EXHIBIT 10.29
EXECUTION VERSION
================================================================================
CALPINE CONSTRUCTION FINANCE COMPANY, L.P.
as the Company
CALPINE HERMISTON, LLC
CPN HERMISTON, LLC
HERMISTON POWER PARTNERSHIP
as the Guarantors
FIRST PRIORITY SENIOR SECURED INSTITUTIONAL TERM LOANS DUE 2009
CREDIT AND GUARANTEE AGREEMENT
Dated as of August 14, 2003
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.
Sole Lead Arranger, Sole Bookrunner, Administrative Agent and Syndication Agent
================================================================================
Table of Contents
Page
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions....................................................2
SECTION 1.02. Other Definitions..............................................7
SECTION 1.03. Rules of Construction..........................................8
ARTICLE II.
THE TERM LOANS
SECTION 2.01. Term Loans.....................................................9
SECTION 2.02. Pro Rata Shares; Availability of Funds........................10
SECTION 2.03. Use of Proceeds...............................................11
SECTION 2.04. Evidence of Debt; Register; Lenders' Books and Records;
Notes......................................................11
SECTION 2.05. Interest......................................................12
SECTION 2.06. Continuation Notice...........................................12
SECTION 2.07. Default Interest..............................................13
SECTION 2.08. Fees..........................................................13
SECTION 2.09. Scheduled Payments/Commitment Reductions......................13
SECTION 2.10. Voluntary Prepayments.........................................14
SECTION 2.11. Mandatory Offers..............................................15
SECTION 2.12. General Provisions Regarding Payments.........................17
SECTION 2.13. Ratable Sharing...............................................18
SECTION 2.14. Making or Maintaining Term Loans..............................18
SECTION 2.15. Increased Costs; Capital Adequacy.............................20
SECTION 2.16. Taxes; Withholding, etc.......................................21
SECTION 2.17. Removal or Replacement of a Lender............................24
SECTION 2.18. Notices.......................................................25
ARTICLE III.
CONDITIONS PRECEDENT
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
ARTICLE V.
COVENANTS
SECTION 5.01. Reports.......................................................37
SECTION 5.02. Compliance Certificate........................................37
SECTION 5.03. Taxes.........................................................38
SECTION 5.04. Stay, Extension and Usury Laws................................38
SECTION 5.05. Restricted Payments...........................................39
i
SECTION 5.06. Dividend and Other Payment Restrictions Affecting
Subsidiaries...............................................39
SECTION 5.07. Incurrence of Indebtedness and Issuance of Preferred Equity...41
SECTION 5.08. Asset Sales...................................................43
SECTION 5.09. Transactions with Affiliates..................................44
SECTION 5.10. Liens.........................................................46
SECTION 5.11. Business Activities...........................................46
SECTION 5.12. Maintenance of Existence......................................47
SECTION 5.13. Offer to Repurchase Upon Change of Control....................47
SECTION 5.14. Payments for Consent..........................................48
SECTION 5.15. Hillabee Facility.............................................48
SECTION 5.16. Restrictions on Activities of Finance Co......................49
SECTION 5.17. Additional Subsidiaries.......................................49
SECTION 5.18. Limitation on Issuances and Sales of Equity Interests in
Subsidiaries...............................................49
SECTION 5.19. Deposit of Revenues...........................................50
SECTION 5.20. Maintenance of Insurance......................................50
ARTICLE VI.
SUCCESSORS
SECTION 6.01. Merger, Consolidation, or Sale of Assets......................50
SECTION 6.02. Successor Corporation Substituted.............................51
ARTICLE VII.
DEFAULTS AND REMEDIES
SECTION 7.01. Events of Default.............................................51
SECTION 7.02. Acceleration..................................................53
SECTION 7.03. Other Remedies................................................53
SECTION 7.04. Waiver of Past Defaults.......................................54
SECTION 7.05. Control by Majority...........................................54
SECTION 7.06. Collection Suit by Administrative Agent.......................54
SECTION 7.07. Priorities....................................................54
ARTICLE VIII.
AGENTS
SECTION 8.01. Appointment of Agents.........................................55
SECTION 8.02. Powers and Duties.............................................55
SECTION 8.03. General Immunity..............................................56
SECTION 8.04. Agents Entitled to Act as Lender..............................57
SECTION 8.05. Lenders' Representations, Warranties and Acknowledgment.......57
SECTION 8.06. Right to Indemnity............................................57
SECTION 8.07. Successor Administrative Agent................................58
ii
ARTICLE IX.
COLLATERAL AND SECURITY
ARTICLE X.
RANKING OF LIENS
ARTICLE XI.
COLLATERAL SHARING
SECTION 11.01. Equal and Ratable Lien Sharing by Holders of Priority Lien
Debt.......................................................59
SECTION 11.02. Enforcement...................................................60
SECTION 11.03. Amendment.....................................................60
ARTICLE XII.
TERM LOAN GUARANTEE
SECTION 12.01. Guarantee.....................................................60
SECTION 12.02. Right of Contribution.........................................61
SECTION 12.03. No Subrogation................................................62
SECTION 12.04. Amendments, etc. with respect to the Term Loan Obligations....62
SECTION 12.05. Guarantee Absolute and Unconditional..........................63
SECTION 12.06. Reinstatement.................................................64
SECTION 12.07. Payments......................................................64
ARTICLE XIII.
MISCELLANEOUS
SECTION 13.01. Notices.......................................................64
SECTION 13.02. Expenses......................................................65
SECTION 13.03. Indemnity.....................................................66
SECTION 13.04. Set-Off.......................................................66
SECTION 13.05. Amendments and Waivers........................................67
SECTION 13.06. Successors and Assigns; Participations........................69
SECTION 13.07. Independence of Covenants.....................................72
SECTION 13.08. Survival of Representations, Warranties and Agreements........72
SECTION 13.09. No Waiver; Remedies Cumulative................................72
SECTION 13.10. Marshalling; Payments Set Aside...............................73
SECTION 13.11. Severability..................................................73
SECTION 13.12. Term Loan Obligations Several; Independent Nature of
Lenders' Rights............................................73
SECTION 13.13. Headings......................................................73
SECTION 13.14. Applicable Law................................................74
SECTION 13.15. Consent to Jurisdiction.......................................74
SECTION 13.16. Waiver Of Jury Trial..........................................74
SECTION 13.17. Confidentiality...............................................75
SECTION 13.18. Usury Savings Clause..........................................76
iii
SECTION 13.19. Counterparts..................................................77
SECTION 13.20. Effectiveness.................................................77
SECTION 13.21. Statements Required in Certificate or Opinion.................77
SECTION 13.22. No Recourse Against the Company or the Guarantors.............77
iv
APPENDICES: A Term Loan Commitments
B Notice Addresses
EXHIBITS: A Assignment Agreement
B Certificate Re Non-Bank Status
C Continuation Notice
D Funding Notice
E Lender Addendum
F Term Loan Note
v
CREDIT AND GUARANTEE AGREEMENT
This CREDIT AND GUARANTEE AGREEMENT, dated as of August 14, 2003 (this,
"Agreement"), is entered into by and among CALPINE CONSTRUCTION FINANCE COMPANY,
L.P., a Delaware limited partnership (the "Company"), CALPINE HERMISTON, LLC, a
Delaware limited liability company ("Calpine LLC"), CPN HERMISTON, LLC, a
Delaware limited liability company ("CPN LLC"), and HERMISTON POWER PARTNERSHIP,
an Oregon general partnership (the "Hermiston Partnership" and, together with
Calpine LLC and CPN LLC, the "Guarantors"), the Lenders party hereto from time
to time, ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., as administrative agent (together
with its successors in such capacity, the "Administrative Agent") and as sole
lead arranger, sole bookrunner and syndication agent (in such capacity, the
"Sole Lead Arranger").
RECITALS
WHEREAS, the Company intends to borrow, on a non-recourse basis as
described in Section 13.22 hereof, $385,000,000 in aggregate principal amount of
First Priority Senior Secured Institutional Term Loans due 2009 (the "Term
Loans") under this Agreement;
WHEREAS, the Company intends to issue, on a non-recourse basis as described
in Section 13.22 hereof, $365,000,000 in aggregate principal amount of Second
Priority Senior Secured Floating Rate Notes due 2011 (the "Notes") pursuant to
the Indenture, dated as of August 14, 2003 (the "Indenture"), by and among the
Company, CCFC Finance Corp., a Delaware corporation and wholly owned subsidiary
of the Company ("Finance Co."), the Guarantors and Wilmington Trust FSB, as
Trustee (together with its successors in such capacity, the "Trustee");
WHEREAS, the Guarantors shall guarantee, on a non-recourse basis as
described in Section 13.22 hereof, payment of the Term Loans and all other Term
Loan Obligations pursuant to the terms hereof;
WHEREAS, the Company and the Guarantors intend to secure the Term Loans,
all other Term Loan Obligations and any other Priority Lien Obligations, on a
first priority basis, and, subject to such priority, to secure the Notes, all
other Note Obligations and any other Parity Lien Obligations, on a second
priority basis, with a lien on all present and future Collateral; and
WHEREAS, the Company and the Guarantors, among others, have entered into
the Collateral Trust Agreement, which sets forth the terms on which the Company
and the Guarantors, among others, have appointed the Collateral Agent as trustee
for the present and future holders of the Secured Obligations to receive, hold,
maintain, administer, enforce and distribute all Security Documents and all
guarantees granted thereunder and hereunder, at any time delivered to the
Collateral Agent and all interests, rights, powers and remedies of the
Collateral Agent thereunder and the proceeds thereof.
1
AGREEMENT
NOW THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
Unless otherwise defined herein or unless the context otherwise requires,
terms used in this Agreement, including its preamble and recitals, shall have
the meanings provided in the Indenture (as defined below) as of the date hereof
or as amended in accordance with the terms of this Agreement. The following
terms, when used in this Agreement, including in its preamble and recitals,
shall have the following meanings:
"Adjusted Eurodollar Rate" means, with respect to the relevant Interest
Period, the greater of (a) 1.50% and (b) the sum of the quotient of (x) the
Eurodollar Base Rate applicable to such Interest Period, divided by (y) one
minus the Applicable Reserve Requirement (expressed as a decimal) applicable to
such Interest Period.
"Administrative Agent" is defined in the Preamble hereto.
"Agents" means the Administrative Agent and the Sole Lead Arranger.
"Applicable Premium" means, with respect to any Term Loan on any prepayment
date therefor, the greater of (a) 1.0% of the principal amount of such Term
Loan, or (b) the excess of (i) the present value at such prepayment date of (x)
the prepayment price for such Term Loan at August 26, 2007 determined in
accordance with Section 2.10(b), plus (y) all required interest payments due on
such Term Loan through August 26, 2007 (excluding accrued but unpaid interest to
the prepayment date), computed using a discount rate equal to the Adjusted
Eurodollar Rate as of such prepayment date, over (ii) the principal amount of
such Term Loan.
"Applicable Reserve Requirement" means, at any time, the maximum rate,
expressed as a decimal, at which reserves (including, without limitation, any
basic marginal, special, supplemental, emergency or other reserves) are required
to be maintained with respect thereto against "Eurocurrency liabilities" (as
such term is defined in Regulation D) under regulations issued from time to time
by the Board of Governors of the Federal Reserve System or other applicable
banking regulator. Without limiting the effect of the foregoing, the Applicable
Reserve Requirement shall reflect any other reserves required to be maintained
by such member banks with respect to (a) any category of liabilities which
includes deposits by reference to which the applicable Adjusted Eurodollar Rate
or any other interest rate of a Term Loan is to be determined, or (b) any
category of extensions of credit or other assets which include Term Loans. Each
Term Loan shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements without benefits of credit for
proration, exceptions or
2
offsets that may be available from time to time to the applicable Lender. The
rate of interest on Term Loans shall be adjusted automatically on and as of the
effective date of any change in the Applicable Reserve Requirement.
"Assignment Agreement" means an Assignment and Assumption Agreement
substantially in the form of Exhibit A with such amendments or modifications as
may be approved by the Administrative Agent.
"Bankruptcy Case" has the meaning assigned to it in the Collateral Trust
Agreement.
"Base Rate" means, for any day, a fluctuating rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of (a)
the Federal Funds Effective Rate for such day and (b) one half of one percent
(0.50%) per annum.
"CCFC Companies" means the Company, Finance Co., the Parents and the
Guarantors.
"Certificate re Non-Bank Status" means a certificate substantially in the
form of Exhibit B.
"Closing Date" means the date on which the Term Loans are made.
"Company" is defined in the Preamble hereto.
"Continuation Notice" means a Continuation Notice substantially in the form
of Exhibit C.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Dollars" and the sign "$" mean the lawful money of the United States of
America.
"Eligible Assignee" means (i) any Lender, any Affiliate of any Lender and
any Related Fund (any two or more Related Funds being treated as a single
Eligible Assignee for all purposes hereof), and (ii) any commercial bank,
insurance company, investment or mutual fund or other entity that is an
"accredited investor" (as defined in Regulation D under the Securities Act) and
which extends credit or buys loans as one of its businesses.
"equally and ratably" has the meaning assigned to it in the Collateral
Trust Agreement.
"Eurodollar Base Rate" means, for the relevant Interest Period, the
applicable British Bankers' Association LIBOR rate for deposits in Dollars for a
period of one, two, three or six months, as applicable, as reported by any
generally recognized financial information service as of 11:00 a.m. (London
time) two (2) Business Days prior to the first day of such Interest Period, and
having a maturity equal to such Interest Period, provided that, if no such
British Bankers' Association LIBOR rate is available to the Company, the
applicable Eurodollar Base Rate for the relevant Interest Period shall instead
be the rate equal to the offered quotation rate to first class banks in the
London interbank market by GSCP or one of its Affiliates for deposits (for
delivery on the first day of the relevant period) in Dollars of $1.0 million in
same day funds for which the
3
Adjusted Eurodollar Rate is then being determined with maturities comparable to
a period of one, two, three or six months, as applicable, as of approximately
11:00 a.m. (London time) two (2) Business Days prior to the first day of such
Interest Period.
"Existing Senior Secured Credit Facility" means the Amended and Restated
Credit Agreement, dated as of February 15, 2001, among the Company, the Bank of
Nova Scotia, as the administrative agent, the financial institutions listed on
Exhibit H thereto, Credit Suisse First Boston, as lead arranger, syndication
agent and bookrunner, TD Securities (USA) Inc., as co-arranger and
co-documentation agent, and CIBC World Markets Corp., as co-arranger and
co-documentation agent.
"Federal Funds Effective Rate" means for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the Federal Funds Rate for such day shall be the average rate
charged to the Administrative Agent, in its capacity as a Lender, on such day on
such transactions as determined by the Administrative Agent.
"FERC" means the Federal Energy Regulatory Commission.
"Final Offering Circular" means the Final Offering Circular dated August 7,
2003 of the Company and Finance Co., as amended or supplemented.
"Funding Notice" means a notice substantially in the form of Exhibit D.
"GSCP" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
"Hazardous Materials" has the meaning assigned to it in the Collateral
Trust Agreement.
"Highest Lawful Rate" means the maximum lawful interest rate, if any, that
at any time or from time to time may be contracted for, charged, or received
under the laws applicable to any Lender which are presently in effect or, to the
extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"Indemnified Liabilities" has the meaning assigned to it in the Collateral
Trust Agreement.
"Indenture" is defined in the Recitals.
"Insolvency Proceeding" has the meaning assigned to it in the Collateral
Trust Agreement.
"Interest Payment Date" means, with respect to each Term Loan, February 26
and August 26 of each year; provided that the first Interest Payment Date shall
be February 26, 2004.
4
"Interest Period" means, (i) initially, the period commencing on the
Closing Date and continuing until February 26, 2004; and (ii) thereafter, the
period of one, two, three or six months, as selected by the Company in the
applicable Funding Notice or Continuation Notice commencing on the day on which
the immediately preceding Interest Period expires; provided, (a) if an Interest
Period would otherwise expire on a day that is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day unless no further
Business Day occurs in such month, in which case such Interest Period shall
expire on the immediately preceding Business Day; (b) any Interest Period that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) of this definition, end on the
last Business Day of such calendar month; and (c) no Interest shall extend
beyond the Maturity Date.
"Interest Rate Determination Date" means, with respect to any Interest
Period, the date that is two Business Days prior to the first day of such
Interest Period.
"Lender" means each financial institution listed on the signature pages
hereto as a Lender, and any other Person that becomes a party hereto pursuant to
an Assignment Agreement.
"Lender Addendum" means with respect to any initial Lender, a Lender
Addendum, substantially in the form of Exhibit E to be executed and delivered by
such Lender on the Closing Date as provided in Section 13.06(j).
"Maturity Date" means the earlier of (i) August 26, 2009, and (ii) the date
that all Term Loans shall become due and payable in full hereunder, whether by
acceleration or otherwise.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. (or, if such entity ceases
to rate the Term Loans for reasons outside of the control of the Company, any
other "nationally recognized statistical rating organization" (or successor
concept) within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act
(or successor provision) selected by the Company as a replacement agency).
"preferred stock" means, with respect to any Person, any Capital Stock of
such Person, however designated, which entitles the holder thereof to a
preference with respect to dividends, distributions or liquidation proceeds of
such Person over the holders of the other Capital Stock issued by such Person.
"Prime Rate" means the rate of interest per annum that ▇▇▇▇▇▇▇ Sachs Credit
Partners L.P. announces from time to time as its prime lending rate, as in
effect from time to time. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P. or any other Lender may make commercial loans
or other loans at rates of interest at, above or below the Prime Rate.
"Principal Office" means, for the Administrative Agent, its "Principal
Office" as set forth on Appendix B, or such other office as the Administrative
Agent (or any permitted successor or thereof) may from time to time designate in
writing to the Company, the Administrative Agent and each Lender.
5
"Pro Rata Share" means with respect to all payments, computations and other
matters relating to the Term Loans of any Lender, the percentage obtained by
dividing (A) an amount equal to the aggregate outstanding Term Loans of that
Lender, by (B) an amount equal to the sum of the aggregate amount of outstanding
Term Loans of all Lenders.
"PUHCA" means the Public Utility Holding Company Act of 1935, as amended.
"Purchase Agreement" means the Purchase Agreement, dated August 7, 2003,
among the Company, Finance Co., the Guarantors and the Initial Purchaser.
"Regulation A" means Regulation A of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Regulation T" means Regulation T of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Related Fund" means, with respect to any Lender that is an investment
fund, any other investment fund that invests in commercial loans similar to the
Term Loans and that is managed or advised by the same investment advisor as such
Lender or by an Affiliate of such investment advisor.
"Requisite Lenders" means one or more Lenders holding more than 50% of the
sum of the aggregate outstanding Term Loans (or, at any time prior to the
funding of the Term Loans, the Term Loan Commitments). For this purpose only,
Term Loans registered in the name of, or beneficially owned by, the Company or
any Affiliate of the Company shall be deemed not to be outstanding.
"S&P" means Standard & Poor's Ratings Group (or, if such entity ceases to
rate the Term Loans for reasons outside of the control of the Company, any other
"nationally recognized statistical rating organization" (or successor concept)
within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act (or
successor provision) selected by the Company as a replacement agency).
"Sole Lead Arranger" is defined in the Preamble hereto
"Tax" means any present or future tax, levy, impost, duty, assessment,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided, "Tax on the overall net income" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in
6
which that Person is organized or in which that Person's applicable principal
office (and/or, in the case of a Lender, its lending office) is located or in
which that Person (and/or, in the case of a Lender, its lending office) is
deemed to be doing business on all or part of the net income, profits or gains
(whether worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or otherwise)
of that Person (and/or, in the case of a Lender, its applicable lending office).
"Term Loan" means a Term Loan made by a Lender to the Company pursuant to
Section 2.1(a).
"Term Loan Commitment" means the commitment of a Lender to make or
otherwise fund a Term Loan and "Term Loan Commitments" means such commitments of
all Lenders in the aggregate. The amount of each Lender's Term Loan Commitment
is set forth on Appendix A, on Schedule 1 to the Lender Addendum delivered by
such Lender or in the applicable Assignment Agreement, subject to any adjustment
or reduction pursuant to the terms and conditions hereof. The aggregate amount
of the Term Loan Commitments as of the Closing Date is $385,000,000.
"Term Loan Guarantee" means the Guarantee by each Guarantor of the
Company's obligations under this Agreement, as set forth in Article XII hereof.
"Term Loan Note" means a promissory note in the form of Exhibit H as it may
be amended, supplemented or otherwise modified from time to time.
"Trustee" is defined in the Recitals hereto.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"U.S." means the United States of America.
SECTION 1.02. Other Definitions.
Defined in
Term Section
---------------------------------------------------------------------------
"Affected Lender"............................................. 2.15
"Affected Loans".............................................. 2.15
"Affiliate Transaction" ...................................... 5.09
"Aggregate Amounts Due"....................................... 2.13
"Asset Sale Offer"............................................ 2.11
"Change of Control Offer"..................................... 5.13
"Change of Control Payment"................................... 5.13
"Change of Control Payment Date".............................. 5.13
"Environmental Law"........................................... Article IV
"EWG" ........................................................ Article IV
"Event of Default"............................................ 7.01
"Filing Agent"................................................ Article III
"Financing Statements"........................................ Article III
7
Defined in
Term Section
---------------------------------------------------------------------------
"FPA" ........................................................ Article III
"▇▇▇▇▇▇▇" .................................................... Article IV
"Increased-Cost Lender"........................................ 2.17
"Indemnitee".................................................. 13.03
"Installment"................................................. 2.09
"Installment Date"............................................ 2.09
"intellectual property rights"................................ Article IV
"Investment Company Act" ..................................... Article IV
"Non-Consenting Lender"....................................... 2.17
"Non-US Lender"............................................... 2.16
"Offer Amount"................................................ 2.11
"Offer Period"................................................ 2.11
"Offering Documents" ......................................... Article IV
"Payment Default"............................................. 7.01
"Permitted Debt" ............................................. 5.07
"Preliminary Offering Circular" .............................. Article IV
"Register".................................................... 2.04
"Repayment Date".............................................. 2.11
"Replacement Lender".......................................... 2.17
"Restricted Payment" ......................................... 5.05
"▇.▇. ▇▇▇▇" .................................................. Article IV
"Terminated Lender"........................................... 2.17
"TPUC" ....................................................... Article IV
SECTION 1.03. Rules of Construction.
Except as set forth below or otherwise provided herein or unless the
context otherwise requires, the rules of construction set forth in Section 1.04
of the Indenture shall apply to this Agreement, including its preamble and
recitals.
(a) Any reference to any agreement or instrument shall be deemed to include
a reference to such agreement or instrument as assigned, amended, amended and
restated, supplemented, otherwise modified from time to time or replaced in
accordance with the terms of this Agreement.
(b) The use in this Agreement or any of the Term Loan Documents of the word
"include" or "including," when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
The word "will" shall be construed to have the same meaning and effect as the
word "shall."
8
(c) References to "Sections" and "clauses" shall be to Sections and
clauses, respectively, of this Agreement unless otherwise specifically provided.
(d) References to "Articles" shall be to Articles of this Agreement unless
otherwise specifically provided.
(e) References to "Exhibits" and "Schedules" shall be to Exhibits and
Schedules, respectively, of this Agreement unless otherwise specifically
provided.
(f) The use in this Agreement of the words "herein," "hereof," and
"hereunder," and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof.
(g) This Agreement, the other Term Loan Documents and any documents or
instruments delivered pursuant hereto or thereto shall be construed without
regard to the identity of the party who drafted the various provisions of the
same. Each and every provision of this Agreement, the other Term Loan Documents
and instruments and documents entered into and delivered in connection therewith
shall be construed as though the parties participated equally in the drafting of
the same. Consequently, each of the parties acknowledges and agrees that any
rule of construction that a document is to be construed against the drafting
party shall not be applicable either to this Agreement or the other Term Loan
Documents and instruments and documents entered into and delivered in connection
therewith.
ARTICLE II.
THE TERM LOANS
SECTION 2.01. Term Loans.
(a) Term Loan Commitments. Subject to the terms and conditions hereof, each
Lender severally agrees to make, on the Closing Date, a Term Loan to the Company
in an amount equal to such Lender's Term Loan Commitment. The Company may make
only one borrowing under each Term Loan Commitment, which shall be on the
Closing Date. Any amount borrowed under this Section and subsequently repaid or
prepaid may not be reborrowed. All amounts owed hereunder with respect to the
Term Loans shall be paid in full no later than the Maturity Date. Each Lender's
Term Loan Commitment shall terminate immediately and without further action upon
the funding by such Lender of its Term Loan Commitment.
(b) Borrowing Mechanics for Term Loans.
(i) On the Closing Date, the Company shall deliver to the
Administrative Agent a fully executed Funding Notice, which Funding Notice
shall be in form and substance reasonably satisfactory to the
Administrative Agent. Promptly upon receipt by the Administrative Agent of
such Funding Notice, the Administrative Agent shall notify each Lender of
the proposed borrowing.
(ii) Each Lender shall make each Term Loan to be made by it hereunder
available to the Administrative Agent not later than 12:00 noon (New York
City time) on
9
the Closing Date, by wire transfer of same day funds in Dollars, at the
Administrative Agent's Principal Office. Upon satisfaction or waiver of the
conditions precedent specified herein, the Administrative Agent shall make
the proceeds of the Term Loans available to the Company on the Closing Date
by causing an amount of same day funds in Dollars equal to the proceeds of
all such Term Loans received by the Administrative Agent from the Lenders
to be credited to the account of the Company at the Administrative Agent's
Principal Office or to such other account as may be designated in writing
to the Administrative Agent by the Company.
SECTION 2.02. Pro Rata Shares; Availability of Funds.
(a) Pro Rata Shares. All Term Loans shall be made by the Lenders
simultaneously in the amount of their respective Term Loan Commitments, it being
understood that no Lender shall be responsible for any default by any other
Lender in such other Lender's obligation to make a Term Loan hereunder nor shall
any Term Loan Commitment of any Lender be increased or decreased as a result of
a default by any other Lender in such other Lender's obligation to make a Term
Loan hereunder.
(b) Availability of Funds. Unless the Administrative Agent shall have been
notified by any Lender prior to the Closing Date that such Lender does not
intend to make available to the Administrative Agent the amount of such Lender's
Term Loan, the Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent on the Closing Date and the
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to the Company a corresponding amount on the Closing Date. If
such corresponding amount is not in fact made available to the Administrative
Agent by such Lender, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from the Closing Date until the date such amount is paid to the
Administrative Agent, at the customary rate set by the Administrative Agent for
the correction of errors among banks for three Business Days and thereafter at
the Base Rate. If such Lender does not pay such corresponding amount forthwith
upon the Administrative Agent's demand therefor, the Administrative Agent shall
promptly notify the Company and the Company shall immediately pay such
corresponding amount to the Administrative Agent together with interest thereon,
for each day from the Closing Date until the date such amount is paid to the
Administrative Agent, at the rate payable hereunder for Term Loans. Nothing in
this Section 2.02(b) shall be deemed to relieve any Lender from its obligation
to fulfill its Term Loan Commitments hereunder or to prejudice any rights that
the Company may have against any Lender as a result of any default by such
Lender hereunder.
SECTION 2.03. Use of Proceeds.
The proceeds of the Term Loans shall be applied by the Company to prepay
and retire the Existing Senior Secured Credit Facility and to pay certain fees
and expenses due under this Agreement and the other Term Loan Documents. No
portion of the proceeds of any Term Loans shall be used in any manner that
causes or might cause the funding of the Term Loans or the application of such
proceeds to violate Regulation T, Regulation U or Regulation X or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the Exchange Act.
10
SECTION 2.04. Evidence of Debt; Register; Lenders' Books and Records; Notes.
(a) Lenders' Evidence of Debt. Each Lender shall maintain on its internal
records an account or accounts evidencing the Indebtedness of the Company to
such Lender, including the amounts of the Term Loans made by it and each
repayment and prepayment in respect thereof. Any such recordation shall be
conclusive and binding on the Company, absent manifest error; provided, that the
failure to make any such recordation, or any error in such recordation, shall
not affect the Company's Obligations in respect of any Term Loan; and provided
further, in the event of any inconsistency between the Register and any Lender's
records, the recordations in the Register shall govern.
(b) Register. The Administrative Agent shall maintain at its Principal
Office a register for the recordation of the names and addresses of the Lenders
and the Term Loans of each Lender from time to time (the "Register"). The
Register shall be available for inspection by the Company or any Lender at any
reasonable time and from time to time upon reasonable prior notice. The
Administrative Agent shall record in the Register the Term Loans, and each
repayment or prepayment in respect of the principal amount of the Term Loans,
and any such recordation shall be conclusive and binding on the Company and each
Lender, absent manifest error; provided, that the failure to make any such
recordation, or any error in such recordation, shall not affect the Company's
Obligations in respect of any Term Loan. The Company hereby designates GSCP to
serve as the Company's agent solely for purposes of maintaining the Register as
provided in this Section 2.04, and the Company hereby agrees that, to the extent
GSCP serves in such capacity, GSCP and its officers, directors, employees,
agents and affiliates shall constitute "Indemnitees" under Section 13.03 hereof.
(c) Term Loan Notes. If so requested by any Lender by written notice to the
Company (with a copy to the Administrative Agent) at any time after the Closing
Date, the Company shall execute and deliver to such Lender (and/or, if
applicable and if so specified in such notice, to any Person who is an assignee
of such Lender pursuant to Section 13.06 on the Closing Date (or, if such notice
is delivered after the Closing Date, promptly after the Company's receipt of
such notice)), a Term Loan Note or Term Loan Notes to evidence such Lender's
Term Loan.
SECTION 2.05. Interest.
(a) Except as otherwise set forth herein, the Term Loans shall bear
interest on the unpaid principal amount thereof from the date made through
repayment (whether by acceleration or otherwise) at the Adjusted Eurodollar Rate
plus 6.00% per annum. Notwithstanding anything contained herein to the contrary,
the interest rate on the Term Loans for the initial Interest Period from the
Closing Date through February 26, 2004 shall be 7.50%.
(b) The Company shall be permitted to select varying Interest Periods for
specified amounts of outstanding Term Loans, provided (i) there shall be no more
than five Interest Periods outstanding at any time and (ii) each such specified
amount shall be in an aggregate minimum amount of $1,000,000 and integral
multiples of $500,000 (or the remaining principal amount). In the event that the
Company fails to specify an Interest Period for any amount of Term Loans in the
applicable Funding Notice or Continuation Notice, the Company shall be
11
deemed to have selected an Interest Period of one month. As soon as practicable
after 11:00 a.m. (New York City time) on each Interest Rate Determination Date,
the Administrative Agent shall determine (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) the interest
rate that shall apply to the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to the
Administrative Agent and each Lender.
(c) Interest payable pursuant to Section 2.05(a) shall be computed on the
basis of a 360-day year, in each case for the actual number of days elapsed in
the period during which it accrues. In computing interest on any Term Loan, the
date of the making of such Term Loan or the first day of an Interest Period
applicable to such Term Loan, shall be included, and the date of payment of such
Term Loan or the expiration date of an Interest Period applicable to such Term
Loan shall be excluded; provided, if a Term Loan is repaid on the same day on
which it is made, one day's interest shall be paid on that Term Loan.
(d) Except as otherwise set forth herein, interest on each Term Loan shall
be payable in arrears (i) on and to each Interest Payment Date applicable to
that Term Loan; (ii) upon any prepayment of that Term Loan, whether voluntary or
mandatory, to the extent accrued on the amount being prepaid; and (iii) on and
to the Maturity Date.
SECTION 2.06. Continuation Notice.
The Company shall deliver a Continuation Notice to the Administrative Agent
no later than 11:00 a.m. (New York City time) at least three Business Days in
advance of the applicable Interest Period; provided, however, that in no event
shall failure to deliver such Continuation Notice constitute a default
hereunder. If the Company fails to deliver a Continuation Notice in accordance
with the foregoing, the Company shall be deemed to have selected an Interest
Period of one month. Except as otherwise provided herein, a Continuation Notice
shall be irrevocable on and after the related Interest Rate Determination Date,
and the Company shall be bound to effect a continuation in accordance therewith.
SECTION 2.07. Default Interest.
If all or a portion of the principal amount of the Term Loans shall not be
paid when due, such overdue principal amount of Term Loans shall thereafter bear
interest (including post-petition interest in any proceeding under the
Bankruptcy Law or other applicable bankruptcy laws) payable on demand at a rate
that is 2.00% per annum in excess of the interest rate otherwise payable
hereunder with respect to the applicable Term Loans. Payment or acceptance of
the increased rates of interest provided for in this Section 2.07 is not a
permitted alternative to timely payment and shall not constitute a waiver of any
Event of Default or otherwise prejudice or limit any rights or remedies of the
Administrative Agent or any Lender.
SECTION 2.08. Fees.
The Company agrees to pay to the Agents such other fees in the amounts and
at the times separately agreed upon.
12
SECTION 2.09. Scheduled Payments/Commitment Reductions.
(a) Scheduled Installments. The principal amounts of the Term Loans shall
be repaid in consecutive semi-annual installments (each, an "Installment"),
without premium, in an amount equal to the aggregate principal amount of the
Term Loans made on the Closing Date multiplied by the percentage set forth below
opposite the applicable date (each, an "Installment Date"), and the remaining
principal amounts of the Term Loans shall be paid in full on the Maturity Date:
Installment Date Percentage
---------------- ----------
February 26, 2004 0.50%
August 26, 2004 0.50%
February 26, 2005 0.50%
August 26, 2005 0.50%
February 26, 2006 0.50%
August 26, 2006 0.50%
February 26, 2007 0.50%
August 26, 2007 0.50%
February 26, 2008 0.50%
August 26, 2008 0.50%
February 26, 2009 0.50%
Notwithstanding the foregoing, (x) such Installments shall be reduced in
connection with any voluntary or mandatory prepayments of the Term Loans, in
accordance with Sections 2.10 and 2.11, as applicable; and (y) the Term Loans,
together with all other amounts owed hereunder with respect thereto, shall, in
any event, be paid in full no later than the Maturity Date.
SECTION 2.10. Voluntary Prepayments.
(a) Voluntary Prepayments.
(i) The Company may not voluntarily prepay Term Loans except as
provided in clause (b) below. In the event of any voluntary prepayment in
accordance with clause (b), the Company may prepay any such Term Loans on
any Business Day in whole or in part, in an aggregate minimum amount of
$1,000,000 and integral multiples of $500,000 (or the remaining amount
outstanding) in excess of that amount.
13
(ii) All such prepayments shall be made upon not less than three
Business Days' prior written or telephonic notice given to the
Administrative Agent by 1:00 p.m. (New York City time) on the date required
and, if given by telephone, promptly confirmed in writing to the
Administrative Agent (and the Administrative Agent shall promptly transmit
such telephonic or original notice for Term Loans, by telefacsimile or
telephone to each Lender). Upon the giving of any such notice, the
principal amount of the Term Loans specified in such notice shall become
due and payable on the prepayment date specified therein. Any prepayment of
any Term Loan pursuant to this Section shall be applied on a pro rata basis
among the Lenders and applied to reduce the scheduled remaining
Installments of principal on such Term Loan in inverse order of maturity,
with the remainder, if any, applied to the payment of principal at
maturity.
(b) In the event that for any reason the Term Loans are voluntarily prepaid
prior to August 26, 2007, the Company shall pay to the Lenders a prepayment
premium equal to the Applicable Premium with respect to the principal amount of
the Term Loans being prepaid. In the event that for any reason the Term Loans
are voluntarily prepaid on or after August 26, 2007 but prior to August 26,
2008, the Company shall pay to the Lenders a prepayment premium equal to 3.00%
of the principal amount of the Term Loans being prepaid. Term Loans may be
prepaid without premium or penalty on or after August 26, 2008.
(c) Notwithstanding anything to the contrary contained in this Section 2.10
or any other provision of this Agreement, so long as (i) there is no Default or
Event of Default and (ii) no Event of Default or Default would result therefrom,
the Company may purchase all or any portion of any Term Loan of any Lender
pursuant to an agreement between the Company and such Lender and such purchase
shall not be deemed to be a voluntary prepayment hereunder; provided that the
Company promptly provides a copy of such agreement to the Administrative Agent.
The Company shall not make any purchase of a Term Loan from a Lender otherwise
permitted by this Section 2.10(c) if, at the time of such purchase, a repurchase
of outstanding Notes by the Company without additional disclosure by the Company
to the holder of such Notes would result in a violation by the Company of Rule
10b-5 of the Exchange Act unless, prior to any such purchase of any Term Loans,
such additional disclosure is made by the Company to such Lender.
Notwithstanding the provisions of the preceding sentence, the Company, the
Lenders and the Agents hereby agree that nothing in this Section 2.10(c) shall
be understood to mean or suggest that the Term Loans constitute "securities" for
purposes of either the Securities Act or the Exchange Act. Following any
purchase pursuant to this Section 2.10(c), the Term Loans so purchased shall be
disregarded and not deemed outstanding (as to which the Company hereby agrees)
for purposes of (i) the making of, or the application of, any payments to the
Lenders under this Agreement or any other Term Loan Documents, (ii) the making
of any request, demand, authorization, direction, notice, consent or waiver
under this Agreement or any other Term Loan Documents or (iii) the determination
of Requisite Lenders, or for any similar or related purpose, under this
Agreement or any other Term Loan Documents, provided that the scheduled
Installment amounts shall remain unchanged. Failure by the Company to make any
payment to a Lender required by an agreement permitted by this Section 2.10(c)
shall not constitute an Event of Default under Section 7.01.
14
SECTION 2.11. Mandatory Offers.
(a) If the Company is required to prepay any Term Loans by reason of any
Lender's acceptance of an Asset Sale Offer or a Change of Control Offer, the
amount payable to such Lender shall be paid to the Administrative Agent for
account of such Lender and credited to the remaining installments to become due
on the Term Loans outstanding to such Lender. Any prepayment of any Term Loan
pursuant hereto shall be applied to reduce the scheduled remaining Installments
with respect to such Term Loan in inverse order of maturity.
(b) In the event that, pursuant to Section 5.08 hereof, the Company shall
be required to commence an offer to all Lenders to repay Term Loans (an "Asset
Sale Offer"), it shall follow the procedures specified below.
(i) The Asset Sale Offer shall remain open for a period of 15 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later
than five Business Days after the termination of the Offer Period (the
"Repayment Date"), the Company shall repay the principal amount of Term
Loans required to be purchased pursuant to Section 5.08 hereof (the "Offer
Amount") or, if less than the Offer Amount has been tendered, all Term
Loans for which repayment was requested in response to the Asset Sale
Offer. Payment for any Term Loans shall be made in the same manner as
interest payments are made.
(ii) Upon the commencement of an Asset Sale Offer, the Company shall
send a notice to the Administrative Agent (for delivery to each Lender).
The notice shall contain all instructions and materials necessary to enable
such Lenders to request repayment for the Term Loans pursuant to the Asset
Sale Offer. The Asset Sale Offer shall be made to all Lenders. The notice,
which shall govern the terms of the Asset Sale Offer, shall state:
(A) that the Asset Sale Offer is being made pursuant to this
Section 2.11 and Section 5.08 hereof and the length of time the Asset
Sale Offer shall remain open;
(B) the Offer Amount, the purchase price and the Repayment Date;
(C) that any Term Loan for which repayment is not requested or
accepted for repayment shall continue to accrete or accrue interest;
(D) that, unless the Company defaults in making such payment, any
Term Loan accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest after the Repayment Date;
(E) that a Lender electing to have Term Loans repaid pursuant to an
Asset Sale Offer must offer all of its Term Loans for repayment and may
not offer only a portion of its Term Loans for repayment;
(F) that the Lenders shall be entitled to withdraw their request if
the Company, or the Administrative Agent, as the case may be, receives,
not later
15
than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Lender, the
principal amount of the Term Loans for which the Lender requested
repayment and a statement that such Lender is withdrawing his request
to have Term Loans repaid; and
(G) that, if the aggregate principal amount of Term Loans for which
repayment is requested by the Lenders exceeds the Offer Amount, the
Administrative Agent shall select the Term Loans to be purchased on a
pro rata basis.
(iii) On or before the Repayment Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Term Loans or portions thereof for which repayment is
requested pursuant to the Asset Sale Offer, or if repayment for Term Loans
in an aggregate amount less than the Offer Amount have been requested, all
Term Loans for which repayment is requested, and shall deliver to the
Administrative Agent (for delivery to the Lenders) an Officers' Certificate
stating that such Term Loans or portions thereof were accepted for payment
by the Company in accordance with the terms of this Section 2.11. The
Company shall promptly (but in any case not later than five days after the
Repayment Date) deliver to the Administrative Agent for the account of each
Lender for which repayment is requested an amount equal to all outstanding
amounts under the Term Loans for which repayment is requested by all
Lenders that were accepted by the Company for repayment. The Administrative
Agent shall promptly forward the appropriate amount to each Lender being
repaid.
SECTION 2.12. General Provisions Regarding Payments.
(a) All payments by the Company of principal, interest, fees and other Term
Loan Obligations (other than pursuant to Section 2.10(c) hereof) shall be made
in Dollars in same day funds, without defense, setoff or counterclaim, free of
any restriction or condition, and delivered to the Administrative Agent not
later than 1:00 p.m. (New York City time) on the date due at the Administrative
Agent's Principal Office for the account of the Lenders. Funds received by the
Administrative Agent after that time on such due date shall be deemed to have
been paid by the Company on the next succeeding Business Day.
(b) All payments in respect of the principal amount of any Term Loan shall
include payment of accrued interest on the principal amount being repaid or
prepaid, and all such payments (and, in any event, any payments in respect of
any Term Loan on a date when interest is due and payable with respect to such
Term Loan) shall be applied to the payment of interest before application to
principal.
(c) The Administrative Agent shall promptly distribute to each Lender at
such address as such Lender shall indicate in writing, such Lender's applicable
Pro Rata Share of all payments and prepayments of principal and interest due
hereunder, except that prepayment offers accepted by Lenders pursuant to Section
5.08 or 5.13 shall be allocated to the accepting Lenders ratably in proportion
to the principal amount of Term Loans outstanding to each accepting Lender (and
not to all Lenders based on Pro Rata Shares), together with all other
16
amounts due thereto, including, without limitation, all fees payable with
respect thereto, to the extent received by the Administrative Agent.
(d) Whenever any payment to be made hereunder shall be stated to be due on
a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder.
(e) The Company hereby authorizes the Administrative Agent to charge the
Company's accounts with the Administrative Agent in order to cause timely
payment to be made to the Administrative Agent of all principal, interest, fees
and expenses due hereunder (subject to sufficient funds being available in its
accounts for that purpose) upon the occurrence of any Event of Default in
respect of its payment obligations hereunder.
(f) The Administrative Agent shall deem any payment by or on behalf of the
Company hereunder that is not made in same day funds prior to 1:00 p.m. (New
York City time) to be a non-conforming payment. Any such payment shall not be
deemed to have been received by the Administrative Agent until the later of (i)
the time such funds become available funds, and (ii) the applicable next
Business Day. The Administrative Agent shall give prompt telephonic notice to
the Company and each applicable Lender (confirmed in writing) if any payment is
non-conforming. Any non-conforming payment may constitute or become a Default or
Event of Default in accordance with the terms of Section 7.01. Interest shall
continue to accrue on any principal as to which a non-conforming payment is made
until such funds become available funds (but in no event less than the period
from the date of such payment to the next succeeding applicable Business Day) at
the rate determined pursuant to Section 2.07 from the date such amount was due
and payable until the date such amount is paid in full.
SECTION 2.13. Ratable Sharing.
The Lenders hereby agree among themselves that, except in the case of
prepayments offered to and accepted by any Lender pursuant to Sections 5.08 or
5.13 or a repurchase under Section 2.10(c) hereof, if any of them shall, whether
by voluntary payment (other than a voluntary prepayment of Term Loans made and
applied in accordance with the terms hereof), through the exercise of any right
of set-off or banker's lien, by counterclaim or cross action or by the
enforcement of any right under the Term Loan Documents or otherwise, or as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Law, receive payment or reduction of a proportion of the aggregate amount of
principal, interest, fees and other amounts then due and owing to such Lender
hereunder or under the other Term Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (a) notify
the Administrative Agent and each other Lender of the receipt of such payment
and (b) apply a portion of such payment to purchase participations (which it
shall be deemed to have purchased from each seller of a participation
simultaneously upon the receipt by such seller of its portion of such payment)
in the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; provided, if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or
17
reorganization of the Company or otherwise, those purchases shall be rescinded
and the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
The Company expressly consents to the foregoing arrangement and agrees that any
holder of a participation so purchased may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies owing
by the Company to that holder with respect thereto as fully as if that holder
were owed the amount of the participation held by that holder.
SECTION 2.14. Making or Maintaining Term Loans.
(a) Inability to Determine Applicable Interest Rate. In the event that the
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Term Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Term Loans on
the basis provided for in the definition of Adjusted Eurodollar Rate, the
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to the Company and each Lender of such
determination, whereupon (i) no Term Loans may be made or maintained with an
interest rate based on the Adjusted Eurodollar Rate, and instead will be made
and maintained with an interest rate equal to the Base Rate plus 6.00% per
annum, until such time as the Administrative Agent notifies the Company and
Lenders that the circumstances giving rise to such notice no longer exist, and
(ii) any Funding Notice or Continuation Notice given by the Company with respect
to the Term Loans in respect of which such determination was made shall be
deemed to be rescinded by the Company.
(b) Illegality or Impracticability of using the Adjusted Eurodollar Rate.
In the event that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with the Company and the
Administrative Agent) that the making, maintaining or continuation of its Term
Loans with an interest rate based on the Adjusted Eurodollar Rate (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful), or (ii) has become impracticable, as a result of contingencies
occurring after the date hereof which materially and adversely affect the London
interbank market or the position of such Lender in that market, then, and in any
such event, such Lender shall be an "Affected Lender" and it shall on that day
give notice (by telefacsimile or by telephone confirmed in writing) to the
Company and the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each other Lender). Thereafter
(1) the obligation of the Affected Lender to make or maintain Term Loans with an
interest rate based on the Adjusted Eurodollar Rate shall be suspended until
such notice shall be withdrawn by the Affected Lender, (2) to the extent such
determination by the Affected Lender relates to a Term Loan then being requested
by the Company pursuant to a Funding Notice or a Continuation Notice, the
Affected Lender shall make such Term Loan as (or continue such Term Loan as) a
Term Loan with an interest rate equal to the Base Rate plus 6.00% annum, (3) the
Affected Lender's obligation to maintain its outstanding Term Loans with an
interest rate based on the Adjusted Eurodollar Rate (the "Affected Loans") shall
be terminated at the earlier
18
to occur of the expiration of the Interest Period then in effect with respect to
the Affected Loans or when required by law, and (4) the Affected Loans shall
automatically convert into Term Loans with an interest rate equal to the Base
Rate plus 6.00% per annum on the date of such termination. Except as provided in
the immediately preceding sentence, nothing in this Section 2.15(b) shall affect
the obligation of any Lender other than an Affected Lender to make or maintain
Term Loans with an interest rate based on the Adjusted Eurodollar Rate in
accordance with the terms hereof.
(c) Compensation for Breakage or Non-Commencement of Interest Periods. The
Company shall compensate each Lender, upon written request by such Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by such
Lender to lenders of funds borrowed by it to make or carry its Term Loans and
any loss, expense or liability sustained by such Lender in connection with the
liquidation or re-employment of such funds but excluding loss of anticipated
profits (such anticipated profits being the 6.00% spread over the Adjusted
Eurodollar Rate) which such Lender may sustain within an Interest Period: (i) if
any prepayment or other principal payment of any of its Term Loans occurs on a
date prior to the last day of an Interest Period applicable to that Term Loan
(including, without limitation, pursuant to Section 2.10, 2.11, 5.08 and 5.13
hereof); or (ii) if any prepayment of any of its Term Loans is not made on any
date specified in a notice of prepayment given by the Company.
(d) Booking of Term Loans. Any Lender may make, carry or transfer Term
Loans at, to, or for the account of any of its branch offices or the office of
an Affiliate of such Lender.
(e) Assumptions Concerning Funding of Term Loans. Calculation of all
amounts payable to a Lender under this Section 2.14 and under Section 2.15 shall
be made as though such Lender had actually funded each of its relevant Term
Loans through the purchase of a Eurodollar deposit bearing interest at the rate
obtained pursuant to clause (b) of the definition of Adjusted Eurodollar Rate in
an amount equal to the amount of such Term Loan and having a maturity comparable
to the relevant Interest Period and through the transfer of such Eurodollar
deposit from an offshore office of such Lender to a domestic office of such
Lender in the United States of America; provided, however, each Lender may fund
each of its Term Loans in any manner it sees fit and the foregoing assumptions
shall be utilized only for the purposes of calculating amounts payable under
this Section 2.14 and under Section 2.15.
SECTION 2.15. Increased Costs; Capital Adequacy.
(a) Compensation For Increased Costs and Taxes. Subject to the provisions
of Section 2.16 (which shall be controlling with respect to the matters covered
thereby), in the event that any Lender shall determine (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto) that any law, treaty or governmental rule, regulation or order,
or any change therein or in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by such
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law):
19
(i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such
Lender) with respect to this Agreement or any of the other Term Loan
Documents or any of its obligations hereunder or thereunder or any payments
to such Lender (or its applicable lending office) of principal, interest,
fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
or advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to any Term Loans that are
reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the London interbank market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Term Loans hereunder or to reduce any
amount received or receivable by such Lender (or its applicable lending office)
with respect thereto; then, in any such case, the Company shall promptly pay to
such Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to the Company (with a copy to the
Administrative Agent) a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts owed to such Lender under this
Section 2.15(a), which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
(b) Capital Adequacy Adjustment. In the event that any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after the
Closing Date of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Term Loans, or participations therein or other obligations
hereunder with respect to the Term Loans to a level below that which such Lender
or such controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within five Business Days
after receipt by the Company from such Lender of the statement referred to in
the next sentence, the Company shall pay to such Lender such additional amount
or amounts as shall compensate such Lender or such controlling corporation
20
on an after-tax basis for such reduction. Such Lender shall deliver to the
Company (with a copy to the Administrative Agent) a written statement, setting
forth in reasonable detail the basis for calculating the additional amounts owed
to such Lender under this Section 2.15(b), which statement shall be conclusive
and binding upon all parties hereto absent manifest error.
SECTION 2.16. Taxes; Withholding, etc.
(a) Payments to Be Free and Clear. All sums payable by any Obligor
hereunder and under the other Term Loan Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within the
U.S. or any political subdivision in or of the U.S. or any other jurisdiction
from or to which a payment is made by or on behalf of any Obligor or by any
federation or organization of which the U.S. or any such jurisdiction is a
member at the time of payment.
(b) Withholding of Taxes. If any Obligor or any other Person is required by
law to make any deduction or withholding on account of any such Tax (other than
a Tax on the overall net income of any Lender) from any sum paid or payable by
any Obligor to the Administrative Agent or any Lender under any of the Term Loan
Documents:
(i) the Company shall notify the Administrative Agent of any such
requirement or any change in any such requirement as soon as the Company
becomes aware of it;
(ii) the Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to pay
is imposed on any Obligor) for its own account or (if that liability is
imposed on the Administrative Agent or such Lender, as the case may be) on
behalf of and in the name of the Administrative Agent or such Lender;
(iii) the sum payable by such Obligor in respect of which the relevant
deduction, withholding or payment is required shall be increased to the
extent necessary to ensure that, after the making of that deduction,
withholding or payment, the Administrative Agent or such Lender, as the
case may be, receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been required or
made; and
(iv) within thirty (30) days after paying any sum from which it is
required by law to make any deduction or withholding, and within thirty
(30) days after the due date of payment of any tax which it is required by
clause (ii) above to pay, the Company shall deliver to the Administrative
Agent evidence satisfactory to the other affected parties of such
deduction, withholding or payment and of the remittance thereof to the
relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to any
Lender under clause (iii) above except to the extent that any change after the
date hereof (in the case of each Lender listed on the signature pages hereof on
the Closing Date) or after the effective date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each other Lender)
in
21
any such requirement for a deduction, withholding or payment as is mentioned
therein shall result in an increase in the rate of such deduction, withholding
or payment from that in effect at the date hereof or at the date of such
Assignment Agreement, as the case may be, in respect of payments to such Lender.
(c) Evidence of Exemption From U.S. Withholding Tax. Each Lender that is
not a United States Person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. federal income tax purposes (a "Non-US Lender") shall deliver
to the Administrative Agent for transmission to the Company, on or prior to the
Closing Date (in the case of each Lender listed on the signature pages hereof on
the Closing Date) or on or prior to the date of the Assignment Agreement
pursuant to which it becomes a Lender (in the case of each other Lender), and at
such other times as may be necessary in the determination of the Company or the
Administrative Agent (each in the reasonable exercise of its discretion):
(i) two original copies of Internal Revenue Service Form W-8BEN or
W-8ECI (or any successor forms), properly completed and duly executed by
such Lender, and such other documentation required under the Code and
reasonably requested by the Company to establish that such Lender is not
subject to deduction or withholding of United States federal income tax
with respect to any payments to such Lender of principal, interest, fees or
other amounts payable under any of the Term Loan Documents; or
(ii) if such Lender is not a "bank" or other Person described in
Section 881(c)(3) of the Code and cannot deliver either Internal Revenue
Service Form W-8BEN or W-8ECI pursuant to clause (i) above, a Certificate
re Non-Bank Status together with two original copies of Internal Revenue
Service Form W-8 (or any successor form), properly completed and duly
executed by such Lender, and such other documentation required under the
Code and reasonably requested by the Company to establish that such Lender
is not subject to deduction or withholding of United States federal income
tax with respect to any payments to such Lender of interest payable under
any of the Term Loan Documents.
Each Lender required to deliver any forms, certificates or other evidence with
respect to United States federal income tax withholding matters pursuant to this
Section 2.16(c) hereby agrees, from time to time after the initial delivery by
such Lender of such forms, certificates or other evidence, whenever a lapse in
time or change in circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that such Lender shall
promptly deliver to the Administrative Agent for transmission to the Company two
new original copies of Internal Revenue Service Form W-8BEN or W-8ECI , or a
Certificate re Non-Bank Status and two original copies of Internal Revenue
Service Form W-8, as the case may be, properly completed and duly executed by
such Lender, and such other documentation required under the Code and reasonably
requested by the Company to confirm or establish that such Lender is not subject
to deduction or withholding of United States federal income tax with respect to
payments to such Lender under the Term Loan Documents, or notify the
Administrative Agent and the Company of its inability to deliver any such forms,
certificates or other evidence. The Company shall not be required to pay any
additional amount to any Non-US Lender under Section 2.16(b)(iii) if such Lender
shall have failed (1) to deliver the forms, certificates or other evidence
referred to in the second sentence of this
22
Section 2.16(c), or (2) to notify the
Administrative Agent and the Company of its inability to deliver any such forms,
certificates or other evidence, as the case may be; provided, if such Lender
shall have satisfied the requirements of the first sentence of this Section
2.16(c) on the Closing Date or on the date of the Assignment Agreement pursuant
to which it became a Lender, as applicable, nothing in this last sentence of
this Section 2.16(c) shall relieve the Company of its obligation to pay any
additional amounts pursuant to Section 2.15(a) in the event that, as a result of
any change in any applicable law, treaty or governmental rule, regulation or
order, or any change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing the fact that
such Lender is not subject to withholding as described herein.
SECTION 2.17. Removal or Replacement of a Lender.
Anything contained herein to the contrary notwithstanding, in the event
that:
(a) (i) any Lender (an "Increased-Cost Lender") shall give notice to the
Company that such Lender is an Affected Lender or that such Lender is entitled
to receive payments under Section 2.14, 2.15 or 2.16, (ii) the circumstances
which have caused such Lender to be an Increased-Cost Lender or which entitle
such Lender to receive such payments shall remain in effect, and (iii) such
Lender shall fail to withdraw such notice within five Business Days after the
Company's request for such withdrawal; or
(b) in connection with any proposed amendment, modification, termination,
waiver or consent with respect to any of the provisions hereof as contemplated
by Section 13.05(b), the consent of Requisite Lenders shall have been obtained
but the consent of one or more of such other Lenders (each a "Non-Consenting
Lender") whose consent is required shall not have been obtained;
then, with respect to each such Increased-Cost Lender or Non-Consenting Lender
(the "Terminated Lender"), the Company may, by giving written notice to the
Administrative Agent and any Terminated Lender of its election to do so, elect
to cause such Terminated Lender (and such Terminated Lender hereby irrevocably
agrees) to assign its outstanding Term Loans in full to one or more Eligible
Assignees (each a "Replacement Lender") in accordance with the provisions of
Section 13.06 and such Terminated Lender shall pay any fees payable thereunder
in connection with such assignment; provided,
(i) on the date of such assignment, the Replacement Lender shall pay to
such Terminated Lender an amount equal to the sum of (A) an amount equal to
the principal of, and all accrued interest on, all outstanding Term Loans
of the Terminated Lender, and (B) an amount equal to all accrued, but
theretofore unpaid, fees owing to such Terminated Lender pursuant to
Section 2.08;
(ii) on the date of such assignment, the Company shall pay any amounts
payable to such Terminated Lender pursuant to Section 2.14(c), 2.15 or 2.16
or otherwise as if it were a prepayment; provided that no premium on such
amounts shall be required to be paid; and
23
(iii) in the event such Terminated Lender is a Non-Consenting Lender,
each Replacement Lender shall consent, at the time of such assignment, to
each matter in respect of which such Terminated Lender was a Non-Consenting
Lender.
Upon the prepayment of all amounts owing to any Terminated Lender, such
Terminated Lender shall no longer constitute a "Lender" for purposes hereof;
provided, any rights of such Terminated Lender to indemnification hereunder
shall survive as to such Terminated Lender.
SECTION 2.18. Notices.
Any Notice shall be executed by an Officer in a writing delivered to the
Administrative Agent. In lieu of delivering a Notice, the Company may give the
Administrative Agent telephonic notice by the required time of any proposed
borrowing or continuation; provided each such notice shall be promptly confirmed
in writing by delivery of the applicable Notice to the Administrative Agent on
or before the applicable date of borrowing or continuation. Neither the
Administrative Agent nor any Lender shall incur any liability to the Company in
acting upon any telephonic notice referred to above that the Administrative
Agent believes in good faith to have been given by a duly authorized officer or
other Person authorized on behalf of the Company or otherwise acting in good
faith.
ARTICLE III.
CONDITIONS PRECEDENT
The obligation of any Lender to make a Term Loan on the Closing Date is
subject to the satisfaction, or waiver in accordance with Section 13.05, of the
following additional conditions precedent on or before the Closing Date:
(a) The Chief Financial Officer of the Company shall have furnished a
certificate, dated the Closing Date, in form and substance satisfactory to the
Administrative Agent, stating to the effect that:
(i) the Company does not intend to or believe that it has incurred or
will incur debts that will be beyond its ability to pay as they mature;
(ii) no subsidiary of the Company intends to or believes that it has
incurred or shall incur debts that will be beyond its ability to pay as
they mature;
(iii) the present fair saleable value of the assets of the Company
exceeds the amount that will be required to pay the probable liability on
its existing debts (whether matured or unmatured, liquidated or
unliquidated, absolute, fixed or contingent) as they become absolute and
matured;
(iv) the present fair saleable value of the assets of each subsidiary
of the Company exceeds the amount that will be required to pay the probable
liability on its existing debts (whether matured or unmatured, liquidated
or unliquidated, absolute, fixed or contingent) as they become absolute and
matured;
24
(v) the Company does not have unreasonably small capital for it to
carry on its businesses as proposed to be conducted;
(vi) no subsidiary of the Company has unreasonably small capital for it
to carry on its business as proposed to be conducted;
(vii) the Company is not incurring obligations or making transfers
under any evidence of indebtedness with the intent to hinder, delay or
defraud any entity to which it is or will become indebted; and
(viii) no subsidiary of the Company is incurring obligations or making
transfers under any evidence of indebtedness with the intent to hinder,
delay or defraud any entity to which it is or will become indebted.
(b) The Collateral Agent shall have received at the Closing Date:
(i) appropriately completed copies, which have been duly authorized for
filing by the appropriate Person, of Uniform Commercial Code Financing
Statements naming each of the CCFC Companies as a debtor and the Collateral
Agent as the secured party, or other similar instruments or documents to be
filed under the UCC of all jurisdictions as may be necessary or, in the
reasonable opinion of the Administrative Agent and its counsel, desirable
to perfect the security interests of the Secured Parties pursuant to the
Security Documents;
(ii) appropriately completed copies, which have been duly authorized
for filing by the appropriate Person, of UCC Financing Statement Amendments
(Form UCC-3), if any, necessary to release all Liens of any Person in any
Collateral described in the Security Documents previously granted by any
Person;
(iii) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report certified
by a party acceptable to the Administrative Agent, dated a date reasonably
near to the Closing Date, listing all effective Financing Statements which
name each of the CCFC Companies (under their present names and any previous
names) as the debtor, together with copies of such Financing Statements
(none of which shall cover any collateral described in the Security
Documents, other than Financing Statements that evidence Liens granted in
connection with the Existing Senior Secured Credit Facility);
(iv) such releases, reconveyances, satisfactions or other instruments
as it may request to confirm the release, satisfaction and discharge in
full of all mortgages and deeds of trust at any time delivered by the
Company to secure any Obligations in respect of the Existing Senior Secured
Credit Facility, duly executed, delivered and acknowledged in recordable
form by the grantee named therein or its of record successors or assigns;
(v) a letter or letters (in form and substance reasonably satisfactory
to the Administrative Agent) addressed to the Collateral Agent, the Trustee
and the Administrative Agent, executed and delivered by the administrative
agent under the
25
Existing Senior Secured Credit Facility, stating the amount (the "Payout
Amount") required to pay in full in cash at the Closing Date all
outstanding Obligations under or in respect of the Existing Senior Secured
Credit Facility;
(vi) a certificate of insurance satisfactory to the Lenders confirming
that all insurance requirements of this Agreement are satisfied; and
(vii) such other approvals, opinions or documents as the Administrative
Agent, the Lenders or the Collateral Agent may reasonably request in form
and substance satisfactory to each of them.
(c) All Uniform Commercial Code Financing Statements (Form UCC-1) or other
similar Financing Statements and UCC Financing Statement Amendments (Form UCC-3)
required pursuant to clauses (b)(i) and (ii) above (collectively, the "Financing
Statements") shall have been delivered to CT Corporation System or another
similar filing service company acceptable to the Administrative Agent (the
"Filing Agent"). The Filing Agent shall have acknowledged in a writing
reasonably satisfactory to the Administrative Agent and its counsel (i) the
Filing Agent's receipt of all Financing Statements, (ii) that the Financing
Statements have either been submitted for filing in the appropriate filing
offices or shall be submitted for filing in the appropriate offices within ten
days following the Closing Date and (iii) that the Filing Agent shall notify the
Administrative Agent and its counsel of the results of such submissions within
30 days following the Closing Date.
(d) The Company shall have consummated the offering of the Notes, and such
Notes shall have been issued prior to, or shall be issued simultaneously with,
the Closing Date on substantially the terms described in the Final Offering
Circular and other terms satisfactory to the Administrative Agent, and the
Administrative Agent shall have received counterparts, conformed as executed, of
the Indenture and such other documentation as they deem necessary to evidence
the consummation thereof.
(e) The Company shall have received cash proceeds from the sale of the
Notes (net of underwriting discounts and commissions), when added to the cash
proceeds from the borrowings hereunder and any capital contributions as
described in the Final Offering Circular to pay in full in cash the Payout
Amount and all other fees, costs and expenses payable by the Company in
connection with the closing of the transactions contemplated in the Final
Offering Circular and shall have authorized disbursement of such cash proceeds
directly to pay the Payout Amounts and such fees, costs and expenses pursuant to
a disbursement authorization letter (in form and substance reasonably
satisfactory to the Administrative Agent) executed and delivered by the Company.
(f) Subsequent to the execution and delivery of the Purchase Agreement,
there shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other), business,
properties or results of operations of the Company and its Subsidiaries taken as
a whole which, in the judgment of the Administrative Agent, is material and
adverse and makes it impractical or inadvisable to proceed with the borrowing of
the Term Loans hereunder; (ii) any downgrading in the rating of any debt
securities or preferred stock of (A) Calpine Corporation to CCC or below by S&P
or Caa1 or below by ▇▇▇▇▇'▇ or
26
(B) the Company to CCC+ or below by S & P; (iii) any suspension or material
limitation of trading in securities generally on the New York Stock Exchange, or
any setting of minimum prices for trading on such exchange, or any suspension of
trading of any securities of Calpine Corporation or the Company on any exchange
or in the over-the-counter market; (iv) a general moratorium on commercial
banking activities declared by either Federal or New York State authorities or a
material disruption in commercial banking or securities settlement or clearance
services in the United States which, in the judgment of the Administrative
Agent, makes it impracticable or inadvisable to proceed with the borrowing of
the Term Loans hereunder; or (vi) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war by
Congress or any other substantial national or international calamity or
emergency if, in the judgment of the Administrative Agent, the effect of any
such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with the completion of the borrowing of
the Term Loans hereunder.
(g) The Lenders shall have received an opinion, in form and substance
reasonably satisfactory to the Lenders and their counsel, dated the Closing
Date, of Stoel Rives LLP, counsel to the Company and the Calpine Companies,
covering the appropriate matters described in Section 6(j) of the Purchase
Agreement, as appropriately modified to reflect the borrowing of the Term Loans
hereunder.
(h) The Lenders shall have received an opinion, in form and substance
reasonably satisfactory to the Lenders and their counsel, dated the Closing
Date, of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to Calpine Corporation, covering the
appropriate matters described in Section 6(k) of the Purchase Agreement, as
appropriately modified to reflect the borrowing of the Term Loans hereunder.
(i) The Lenders shall have received an opinion, in form and substance
reasonably satisfactory to the Lenders and their counsel, dated such Closing
Date, of ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, counsel to the Company and the Calpine
Companies, covering the appropriate matters described in Section 6(l) of the
Purchase Agreement, as appropriately modified to reflect the borrowing of the
Term Loans hereunder.
(j) The Lenders shall have received an opinion, in form and substance
reasonably satisfactory to the Lenders and their counsel, dated such Closing
Date, of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, Vice President and General Counsel of Calpine
Corporation, covering the appropriate matters described in Section 6(m) of the
Purchase Agreement, as appropriately modified to reflect the borrowing of the
Term Loans hereunder.
(k) The Administrative Agent shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal financial
or accounting officer of the Company and each of the Guarantors in which such
officers, to the best of their knowledge after reasonable investigation, shall
state that the representations and warranties of the Company or such Guarantor,
as applicable, in this Agreement are true and correct; the Company or such
Guarantor, as applicable, has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date; and, subsequent to the date of the most recent financial
statements in the Offering Documents (as defined below), there has been no
material adverse change, nor any development or event involving a prospective
material
27
adverse change, in the condition (financial or other), business, properties or
results of operations of the Company and its Subsidiaries taken as a whole
except as set forth in or contemplated by the Final Offering Circular or as
described in such certificate.
(l) Local counsel to the Company in California, Oregon, Texas,
Pennsylvania, Maine and Florida shall have furnished to the Lenders their
written opinions, dated the Closing Date, in form and substance reasonably
satisfactory to the Lenders and their counsel as agreed as of the date hereof,
as to such matters under the laws of their respective states as the Lenders may
reasonably request, it being understood that such opinions shall be
substantively similar to the opinions provided in connection with the closing of
the Existing Senior Secured Credit Facility.
(m) The Administrative Agent shall have received a fully executed and
delivered Funding Notice, and no event shall have occurred and be continuing or
would result from the consummation of the borrowing of the Term Loans on the
Closing Date that would constitute an Event of Default or a Default.
The Company shall furnish the Lenders with conformed copies of such other
opinions, certificates, letters and documents as the Lenders reasonably request.
The Lenders may in their sole discretion waive compliance with any conditions to
the obligations of the Lenders hereunder. The Administrative Agent is entitled,
but not obligated to, request and receive, prior to the making of any Term Loan,
additional information reasonably satisfactory to the Administrative Agent
confirming the satisfaction of any of the foregoing if, in the good faith
judgment of the Administrative Agent, such request is warranted under the
circumstances.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to make the
Term Loans to be made hereby, the Company and each of the Guarantors represent
and warrant to, and agree with, each Lender that:
(a) The first preliminary offering circular dated August 4, 2003 and the
second preliminary offering circular dated August 6, 2003 (such offering
circulars, as amended or supplemented, the "Preliminary Offering Circular") and
the Final Offering Circular relating to the Notes to be offered by the Initial
Purchaser have been prepared by the Company and Finance Co. and have been or
will be delivered to the Initial Purchaser at such place or places as it has
directed or may direct, at or prior to such time as the Initial Purchaser has
requested or may request. Such Preliminary Offering Circular and Final Offering
Circular, together with any other document approved by the Company for use in
connection with the contemplated resale of the Notes, are hereinafter
collectively referred to as the "Offering Documents." The Offering Documents did
not, as of their respective dates, include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that the parties hereto acknowledge that the
Offering Documents were not prepared for use in connection with the Term Loans.
The preceding sentence does not apply to statements in or omissions from the
28
Offering Documents based upon written information furnished to the Company by
the Initial Purchaser specifically for use therein.
(b) The Company has been duly formed and is an existing limited partnership
in good standing under the laws of the State of Delaware, with partnership power
and authority to own its properties and conduct its business as described in the
Offering Documents; and the Company is duly qualified to do business as a
foreign limited partnership, and is in good standing, in all other jurisdictions
in which its ownership or lease of property or the conduct of its business
requires such qualification.
(c) Finance Co. has been duly incorporated and is an existing corporation
in good standing under the laws of the State of Delaware, with corporate power
and authority to own its properties and conduct its business as described in the
Offering Documents; and Finance Co. is duly qualified to do business as a
foreign corporation, and is in good standing in, all other jurisdictions in
which its ownership or lease of property or the conduct of its business requires
such qualification; all of the issued and outstanding capital stock of Finance
Co. has been duly authorized and validly issued and is fully paid and
nonassessable as of the date hereof; the capital stock of Finance Co. is owned
by the Company free from liens, encumbrances and defects; and neither the
Company nor Finance Co. is a general partner in any partnership.
(d) Each subsidiary of the Company (x) other than those Subsidiaries
specified in clause (y) of this subparagraph has been duly incorporated and is
an existing corporation in good standing under the laws of the jurisdiction of
its incorporation, with the corporate power and authority to own its properties
and conduct its business as described in the Offering Documents; or (y) that is
not a corporation is a general partnership or a limited liability company, has
been duly formed and is validly existing as a general partnership or limited
liability company, as the case may be, in good standing under the laws of the
jurisdiction of its formation, and has full partnership or corporate power and
authority, as the case may be, to own its properties and conduct its business as
described in the Offering Documents; each subsidiary of the Company is duly
qualified to do business as a foreign corporation, general partnership or
limited liability company, as the case may be, and is in good standing in, all
other jurisdictions in which its ownership or lease of property or the conduct
of its business requires such qualification; all of the issued and outstanding
capital stock of or other equity interest in each subsidiary of the Company has
been duly authorized and validly issued and is fully paid and nonassessable; the
capital stock of or other equity interest in each subsidiary owned by the
Company, directly or through Subsidiaries, is owned free from liens,
encumbrances and defects.
(e) The Indenture has been duly authorized and conforms to the description
thereof contained in the Final Offering Circular; the Notes and the Note
Guarantees have been duly authorized, and when the Notes and the Note Guarantees
are delivered and paid for pursuant to the Purchase Agreement on the Closing
Date, the Indenture will have been duly executed and delivered, such Notes and
Note Guarantees will have been duly executed, authenticated, issued and
delivered and will conform to the description thereof contained in the Final
Offering Circular and the Indenture and such Notes and Note Guarantees will
constitute valid and legally binding obligations of the Company, Finance Co. and
the Guarantors, as applicable, enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer,
29
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
(f) Each of the Security Documents to which any CCFC Company is a party has
been duly authorized by such CCFC Company and, when executed and delivered, will
conform in all material respects to the description thereof contained in the
Final Offering Circular. Each of the Security Documents, when validly executed
and delivered by the applicable CCFC Company, will constitute a valid and
legally binding obligation of such CCFC Company and will be enforceable against
such CCFC Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(g) This Agreement has been duly authorized, executed and delivered by the
Company and the Guarantors and conforms in all material respects to the
description thereof contained in the Final Offering Circular. This Agreement
constitutes a valid and legally binding obligation of the Company and the
Guarantors and will be enforceable against the Company and the Guarantors in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(h) The Company and each Guarantor, as applicable, has authorized each
Major Project Document to which it is a party and, when executed and delivered
(to the extent not executed and delivered as of the date hereof), each such
Major Project Document will conform in all material respects to the description
thereof contained in the Final Offering Circular. Each Major Project Document,
when validly executed and delivered by the Company or such Guarantor, as
applicable, will constitute a valid and legally binding obligation of the
Company or such Guarantor, as applicable, and will be enforceable against the
Company or such Guarantor, as applicable, in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(i) When executed and delivered to the Collateral Agent at the Closing
Date, (i) the Security Documents will grant and create, in favor of the
Collateral Agent (A) for the benefit of the Priority Secured Parties as security
for all Priority Lien Obligations, a valid first priority security interest in
the personal property Collateral defined in each of such instruments and (B) for
the benefit of the Parity Secured Parties as security for all Parity Lien
Obligations, a valid second priority security interest in the personal property
Collateral defined in each of such instruments, and (ii) each Mortgage will
grant and create, in favor of the Collateral Agent (A) for the benefit of the
Priority Secured Parties as security for all of the Priority Lien Obligations, a
valid first priority mortgage lien and/or security interest in the Collateral
defined in each of such instruments and (B) for the benefit of the Parity
Secured Parties as security for all of the Parity Lien Obligations, a valid
second priority mortgage lien and/or security interest in the Collateral defined
in each of such instruments; and when the filings referred to in the following
sentences are made, such first and second priority security interests will be
perfected security interests and/or mortgage liens. When delivered at the
Closing Date, each Mortgage will be delivered, duly acknowledged and, if
required for recordation, attested and otherwise will be in recordable form. At
the Closing Date, (i) all pledged Collateral will be represented by certificated
securities
30
and (ii) all such certificated securities and all promissory notes
and other instruments then evidencing or representing any Collateral will be
delivered to the Collateral Agent in pledge for the benefit of the Secured
Parties as security for all of the Secured Obligations, duly endorsed by an
effective endorsement.
(j) At the Closing Date, the representations and warranties contained in
the Security Documents will be true and correct in all respects.
(k) Except as disclosed in the Offering Documents, there are no contracts,
agreements or understandings between the Company, Finance Co. or any of the
Guarantors and any person that would give rise to a valid claim against the
Company, Finance Co., any of the Guarantors or the Initial Purchaser for a
brokerage commission, finder's fee or other like payment in connection with the
offering of the Notes.
(l) Except as provided for in this Agreement, there are no contracts,
agreements or understandings between the Company, Finance Co. or any of the
Guarantors and any person granting such person the right to require the Company,
Finance Co. or any of the Guarantors to file a registration statement under the
Securities Act with respect to any securities of the Company, Finance Co. or any
of the Guarantors owned or to be owned by such person or to require the Company,
Finance Co. or any of the Guarantors to include such securities with any other
securities being registered pursuant to any other registration statement filed
by the Company, Finance Co. or any of the Guarantors under the Securities Act.
(m) No consent, approval, authorization, or order of, or filing with, any
governmental agency or body or any court is required for the consummation of the
transactions contemplated by this Agreement, the Indenture, the Security
Documents, the Purchase Agreement or the Major Project Documents or otherwise in
connection with the issuance and sale of the Notes or borrowing of the Term
Loans by the Company, Finance Co. or any of the Guarantors or the grant and
perfection of the security interests in the Collateral pursuant to the Security
Documents, except (i) such consents, approvals, authorizations and orders as
have already been obtained, (ii) filings required to perfect the Collateral
Agent's security interests granted pursuant to the Security Documents, (iii)
such consents, approvals, authorizations and orders as may be required under
state securities or blue sky laws and (iv) such other consents approvals,
authorizations and orders as would not, in the aggregate, have a Material
Adverse Effect.
(n) The execution, delivery and performance of this Agreement, the
Indenture, the Security Documents, the Purchase Agreement and the Major Project
Documents by each CCFC Company party thereto, as applicable, the issuance and
sale of the Notes or the borrowing of the Term Loans by the Company, Finance Co.
and the Guarantors, the grant and perfection of the security interests in the
Collateral pursuant to the Security Documents, compliance with the terms and
provisions of each of the foregoing by the CCFC Companies, as applicable, and
the consummation by such CCFC Companies of the transactions contemplated herein
and therein will not result in a breach or violation of any of the terms and
provisions of, or conflict with or constitute a default under, or result in the
imposition or creation of (or the obligation to create or impose) a Lien (other
than in favor of the Secured Parties) under, any statute, any rule, regulation
or order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over any of the CCFC Companies or any of their properties,
or any agreement or
31
instrument to which any of the CCFC Companies is a party or by which any of the
CCFC Companies is bound or to which any of the properties of any of the CCFC
Companies is subject, or the organizational documents of any of the CCFC
Companies, except in each case as would not have a Material Adverse Effect, and
the Company, Finance Co. and the Guarantors have full power and authority to
authorize, issue and sell the Notes and the Note Guarantees as contemplated by
the Purchase Agreement.
(o) The Purchase Agreement has been duly authorized, executed and delivered
by the Company, Finance Co. and each of the Guarantors.
(p) Except as disclosed in the Offering Documents, the Company, Finance Co.
and each of the Guarantors have good and marketable title to all real properties
and all other properties and assets owned by them, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by them; and,
except as disclosed in the Offering Documents, the Company, Finance Co. and each
of the Guarantors hold any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere with the
use made or to be made thereof by them. No Financing Statements in respect of
any property or assets of the Company, Finance Co. or any of the Guarantors will
be on file in favor of any person other than those in respect of Permitted Liens
and those to be terminated at the Closing Date with respect to the Existing
Senior Secured Credit Facility.
(q) The Company, Finance Co. and the Guarantors possess adequate
certificates, authorities or permits issued by appropriate governmental agencies
or bodies necessary to conduct the business now operated by them and have not
received any notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit that, if determined adversely to the
Company, Finance Co. or any of the Guarantors, would individually or in the
aggregate have a Material Adverse Effect or materially affect the aggregate
value of the Collateral.
(r) No labor dispute with the employees of the Company, Finance Co. or any
of the Guarantors exists or, to the knowledge of the Company, is imminent that
might have a Material Adverse Effect.
(s) The Company, Finance Co. and the Guarantors own, possess or can acquire
on reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and other
intellectual property (collectively, "intellectual property rights") necessary
to conduct the business now operated by them, or presently employed by them, and
have not received any notice of infringement of or conflict with asserted rights
of others with respect to any intellectual property rights that, if determined
adversely to the Company, Finance Co. or any of the Guarantors, would
individually or in the aggregate have a Material Adverse Effect.
(t) Except as disclosed in the Final Offering Circular, none of the
Company, Finance Co. or the Guarantors is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any court
domestic or foreign, relating to the use, disposal or release of hazardous or
toxic substances or relating to the protection or restoration of the
32
environment
or human exposure to hazardous or toxic substances (collectively, "Environmental
Laws"), owns or operates any real property contaminated with any substance that
is subject to any Environmental Laws, is liable for any off-site disposal or
contamination pursuant to any Environmental Laws, or is subject to any claim
relating to any Environmental Laws, which violation, contamination, liability or
claim would individually or in the aggregate have a Material Adverse Effect; and
the Company is not aware of any pending investigation which might lead to such a
claim.
(u) Except as disclosed in the Final Offering Circular, there are no
pending actions, suits or proceedings against any of the CCFC Companies or any
of their respective properties that, if determined adversely to such CCFC
Companies, would individually or in the aggregate have a Material Adverse
Effect, or would materially and adversely affect the ability of such CCFC
Companies to perform its or their obligations under, or contemplated by, this
Agreement, the Indenture, the Security Documents, the Purchase Agreement or the
Major Project Documents, in each case to which such CCFC Company is a party, or
which are otherwise material in the context of the sale of the Securities; and
to the knowledge of the Company, no such actions, suits or proceedings are
threatened or contemplated.
(v) The financial information included in the Final Offering Circular
presents fairly the financial position of the Company and its consolidated
Subsidiaries as of the dates shown and their results of operations and cash
flows for the periods shown, and, except as otherwise disclosed in the Offering
Documents, such financial statements have been prepared in conformity with the
generally accepted accounting principles in the United States applied on a
consistent basis.
(w) The statistical and market-related data (other than market-related data
and statistical data provided by the Company) included in the Final Offering
Circular is based on or derived from sources which the Company believes to be
reliable and accurate, it being understood, however, that the Company has
conducted no independent investigation of the accuracy thereof.
(x) Except as disclosed in the Final Offering Circular, since the date of
the latest audited financial statements that are included in the Final Offering
Circular there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition (financial or
other), business, properties or results of operations of the Company, Finance
Co. and the Guarantors taken as a whole, and, except as disclosed in or
contemplated by the Final Offering Circular, there has been no change in the
equity interests in or long-term debt of the Company, Finance Co. or any of the
Guarantors and no dividend or distribution of any kind declared, paid or made by
the Company on any class of its equity interests.
(y) None of the CCFC Companies is an open-end investment company, unit
investment trust or face-amount certificate company that is or is required to be
registered under Section 8 of the United States Investment Company Act of 1940,
as amended (the "Investment Company Act"); none of the CCFC Companies is or,
after giving effect to the offering, the sale of the Securities and the
application of the proceeds thereof as described in the Offering Documents, and
the consummation of the transactions contemplated by this Agreement, the
33
Indenture, the Security Documents, the Purchase Agreement and the Major Project
Documents, will be an "investment company" as defined in the Investment Company
Act.
(z) None of the Company, Finance Co. or any "subsidiary company," as that
term is defined in the Public Utility Holding Company Act of 1935 ("PUHCA"), of
the Company is, or after giving effect to the issuance and sale of the
Securities, will be, subject to regulation (i) as a "holding company," a
"subsidiary company" of a holding company or a "public-utility company," as
those terms are defined in PUHCA; (ii) under the Federal Power Act, as amended
("FPA"), other than as a power marketer or an "exempt wholesale generator"
("EWG"), as that term is defined Section 32 of PUHCA, that is a "public utility"
with market-based rate authority under Section 205 of the FPA; or (iii) under
any state law or regulation with respect to rates or the financial or
organizational regulation of electric utilities.
(aa) The Company and its Subsidiaries have validly issued orders from the
FERC, not subject to any pending challenge, investigation, or proceeding (other
than the FERC's generic proceeding initiated in Docket No. EL01-118-000), (i)
authorizing the Company and its Subsidiaries to engage in wholesale sales of
electricity, ancillary services and, to the extent permitted under its
market-based rate tariff, other services at market-based rates, and (ii)
granting such waivers and blanket authorizations as are customarily granted to
entities with market-based rate authority. The FERC has not imposed any rate
caps or mitigation measures other than rate caps and mitigation measures
generally applicable to similarly situated marketers or generators selling
electricity, ancillary services or other services at wholesale in the geographic
market where the Company and its Subsidiaries conduct their business.
(bb) The Company and its Subsidiaries own and/or operate Eligible
Facilities within the meaning of Section 32 of PUHCA, and have received
determinations from FERC, not subject to any pending challenge or appeal, that
they are EWG's, within the meaning of Section 32 of PUHCA.
(cc) The Company has registered with the Texas Public Utilities Commission
("TPUC"), and the TPUC has not imposed on the Company any specific rate cap or
mitigation measures.
(dd) Other than as described in the Offering Documents, there are no
pending complaints filed with the FERC seeking abrogation or modification of a
contract for the sale of power by the Company or any of its Subsidiaries.
(ee) None of the transactions contemplated by this Agreement (including,
without limitation, the use of the proceeds from the borrowing of the Term Loan)
will violate or result in a violation of Section 7 of the Exchange Act, or any
regulation promulgated thereunder, including, without limitation, Regulation G,
Regulation T, Regulation U, and Regulation X.
(ff) Prior to the date hereof, neither the Company nor any of its
Affiliates has taken any action which is designed to or which has constituted or
which might have been expected to cause or result in stabilization or
manipulation of the price of any security of the Company in connection with the
borrowing of the Term Loans.
34
(gg) None of the Company, Finance Co. or any of the Guarantors is in
violation of its organizational documents or in default in the performance or
observance of any material obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other material
agreement or instrument to which it is a party or by which it or any of its
properties may be bound.
(hh) The statements set forth in the Final Offering Circular under the
captions "Description of New Term Loans" and "Description of Notes" insofar as
they purport to describe the provisions of the documents referred to therein,
are accurate, complete and fair in all material respects.
(ii) The description of the Collateral set forth in the Final Offering
Circular under the caption "Description of Notes--Security" is accurate and
complete in all material respects.
(jj) PricewaterhouseCoopers LLP, who has certified certain financial
statements of the Company and its Subsidiaries, is an independent public
accountant as required by the Securities Act and the rules and regulations of
the Commission thereunder.
(kk) ▇▇▇▇▇▇▇ Energy Services, Inc. ("▇▇▇▇▇▇▇") is an independent market
consultant and nothing has come to the Company's attention to cause it to
believe that ▇▇▇▇▇▇▇ is not qualified to pass on questions relating to U.S.
wholesale electricity market prices or the projected net revenues of the Company
and its Subsidiaries. The Company, Finance Co. and the Guarantors believe that
the assumptions described by ▇▇▇▇▇▇▇ as part of the summary of its report and
discussions thereof included in the Offering Documents are reasonable; the
information provided by the Company, Finance Co. and the Guarantors to ▇▇▇▇▇▇▇
in connection with its report was prepared in good faith by the Company, Finance
Co. and the Guarantors; nothing has come to the attention of any of the Company,
Finance Co. or the Guarantors that causes it or them to believe that the factual
information or the conclusions contained therein are inaccurate in any material
adverse respect.
(ll) ▇.▇. ▇▇▇▇, Inc. ("▇.▇. ▇▇▇▇") is an independent engineer and nothing
has come to the Company's attention to cause it to believe that ▇.▇. ▇▇▇▇ is not
qualified to pass on questions relating to the technical, environmental and
economic aspects of the projects operated by the Company and its Subsidiaries as
described in the Final Offering Circular. The Company, Finance Co. and the
Guarantors believe that the assumptions described by ▇.▇. ▇▇▇▇ as part of its
report and the summary and other discussions thereof included in the Offering
Documents are reasonable; the information provided by the Company, Finance Co.
and the Guarantors to ▇.▇. ▇▇▇▇ in connection with its report has been prepared
in good faith by the Company, Finance Co. and the Guarantors; nothing has come
to the attention of any of the Company, Finance Co. or the Guarantors that
causes it or them to believe that the factual information or the conclusions
contained therein are inaccurate in any material adverse respect.
(mm) The present fair saleable value of the assets of the Company, Finance
Co. and each of the Guarantors exceeds the amount required to pay the probable
liability on its and their existing debts, respectively (whether matured or
unmatured, liquidated or unliquidated, absolute, fixed or contingent), as they
become absolute and matured, and as a result of the consummation
35
of the transactions contemplated herein and in the Final Offering Circular, will
continue to exceed such amount.
(nn) Each of the Company, Finance Co. and the Guarantors does not, and, as
a result of the consummation of the transactions contemplated herein and in the
Final Offering Circular, will not, have unreasonably small capital for it to
carry on its business as proposed to be conducted.
(oo) None of the Company, Finance Co. or any of the Guarantors is incurring
obligations or making transfers under any evidence of indebtedness with the
intent to hinder, delay or defraud any entity to which it is or will become
indebted.
ARTICLE V.
COVENANTS
SECTION 5.01. Reports.
(a) Whether or not required by the SEC's rules and regulations, so long as
any Term Loan Obligations are outstanding, the Company shall furnish to the
Administrative Agent, within the time periods specified in the SEC's rules and
regulations:
(i) all quarterly and annual reports that would be required to be filed
with the SEC on Forms 10-Q and 10-K if the Company were required to file
such reports (provided that the quarterly report that would otherwise be
required to be provided on August 15, 2003 shall be required to be provided
on or prior to September 1, 2003); and
(ii) all current reports that would be required to be filed with the
SEC on Form 8-K if the Company were required to file such reports.
(b) All such reports shall be prepared in all material respects in
accordance with all of the rules and regulations applicable to such reports and
presented in a manner consistent with the financial statements included in the
Final Offering Circular. Each annual report on Form 10-K shall include a report
on the Company's consolidated financial statements by the Company's certified
independent accountants.
The Company will also cause the Independent Engineer to deliver to the
Administrative Agent (and the Administrative Agent will make available to the
Lenders) annual reports on, or within 10 days after, January 15 of each year
regarding the construction, operation and maintenance of the Facilities. Such
reports will be in form and substance as reasonably determined by the Company as
are customary for capital markets project financings and will include discussion
of, among other things, capital expenditures, planned and unplanned maintenance,
permit compliance and progress of construction (if applicable). The Company
will, and will cause its Subsidiaries to, provide the Independent Engineer
access to the Facilities as necessary for the preparation of such reports.
36
SECTION 5.02. Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such Guarantor is so
required under the TIA) shall deliver to the Administrative Agent (for delivery
to each Lender), within 90 days after the end of each fiscal year, an Officers'
Certificate stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Agreement, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Agreement and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Agreement (or, if a Default or Event of
Default has occurred, describing all such Defaults or Events of Default of which
he or she may have knowledge and what action the Company is taking or proposes
to take with respect thereto) and that to the best of his or her knowledge no
event has occurred and remains in existence by reason of which payments on
account of the principal of or interest, if any, on the Term Loans borrowed
under this Agreement is prohibited or if such event has occurred, a description
of the event and what action the Company is taking or proposes to take with
respect thereto.
(b) So long as not contrary to the then-current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 5.01(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article V or Article VI hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) So long as any of the Term Loan Obligations are outstanding, the
Company shall deliver to the Administrative Agent, forthwith upon any Officer
becoming aware of any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
SECTION 5.03. Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Lenders.
SECTION 5.04. Stay, Extension and Usury Laws.
Each of the Company and each Guarantor covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time
37
hereafter in force, that may affect the covenants or the performance of this
Agreement; and each of the Company and each Guarantor (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Administrative Agent,
but shall suffer and permit the execution of every such power as though no such
law has been enacted.
SECTION 5.05. Restricted Payments.
(a) The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly:
(i) declare or pay any dividend or make any other payment or
distribution on account of the Company's Equity Interests (including any
payment in connection with any merger or consolidation involving the
Company) or to the direct or indirect holders of the Company's Equity
Interests in their capacity as such (other than dividends or distributions
payable to the Company or a Restricted Subsidiary of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value
(including in connection with any merger or consolidation involving the
Company) any Equity Interests of the Company;
(iii) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Subordinated
Indebtedness or any other Indebtedness of the Company that is contractually
subordinated to the Term Loans or the Term Loan Guarantees, including any
payments under the Working Capital Facility (excluding any intercompany
Indebtedness between or among the Company and any of its Subsidiaries); or
(iv) make any Restricted Investment;
(all such payments and other actions set forth in these clauses (i) through (iv)
above being collectively referred to as "Restricted Payments"), unless (A) such
Restricted Payment is made following the end of a Quarterly Period from Excess
Cash Flow generated during such Quarterly Period or during previous Quarterly
Periods (but only if Excess Cash Flow from the date of this Agreement through
the end of such Quarterly Period is positive) and (B) no Default or Event of
Default has occurred and is continuing or would occur as a consequence of such
Restricted Payment (other than any Default or Event of Default that is cured as
a result of such Restricted Payment). The Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, make any Restricted Payment
other than payment of amounts due under the Working Capital Facility unless, at
the time of making such Restricted Payment, all amounts then due under the
Working Capital Facility have been paid in full.
SECTION 5.06. Dividend and Other Payment Restrictions Affecting Subsidiaries.
(a) The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Subsidiary to:
38
(i) pay dividends or make any other distributions on its Capital Stock
to the Company or any of its Subsidiaries, or with respect to any other
interest or participation in, or measured by, its profits, or pay any
indebtedness owed to the Company or any of its Subsidiaries;
(ii) make loans or advances to the Company or any of its Subsidiaries;
or
(iii) transfer any of its properties or assets to the Company or any of
its Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(A) this Agreement, the Indenture, any of the Notes issued pursuant
to the Indenture and the Subsidiary Guarantees;
(B) applicable law, rule, regulation or order;
(C) customary non-assignment provisions in contracts, agreements,
leases, permits or licenses entered into or issued in the ordinary
course of business and consistent with past practices;
(D) purchase money obligations for property acquired in the
ordinary course of business and Capital Lease Obligations that impose
restrictions on the property purchased or leased of the nature
described in clauses (i) and (iii) of the preceding paragraph;
(E) any agreement for the sale or other disposition of a Subsidiary
that restricts distributions by that Subsidiary pending the sale or
other disposition;
(F) Permitted Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as
a whole, than those contained in the agreements governing the
Indebtedness being refinanced;
(G) Liens securing Indebtedness otherwise permitted to be incurred
under the provisions of Section 5.07 hereof that limit the right of the
debtor to dispose of the assets subject to such Liens or to use the
proceeds of any such disposition;
(H) provisions limiting or prohibiting the disposition or
distribution of assets or property in joint venture agreements, asset
sale agreements, sale-leaseback agreements, stock sale agreements and
other similar agreements entered into with the approval of the
Company's Board of Directors, which limitation or prohibition is
applicable only to the assets that are the subject of such agreements;
and
39
(I) restrictions on cash or other deposits or net worth imposed by
customers or suppliers under contracts entered into in the ordinary
course of business.
SECTION 5.07. Incurrence of Indebtedness and Issuance of Preferred Equity.
(a) The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), and the
Company will not issue any Disqualified Stock and shall not permit any of its
Subsidiaries to issue any shares of preferred equity.
(b) Section 5.07(a) shall not prohibit the incurrence of any of the
following items (collectively, "Permitted Debt"):
(i) the incurrence by the Company (and the guarantee by its
Subsidiaries) of revolving credit indebtedness and letters of credit under
Credit Facilities with Persons that are not Affiliates of the Company in an
aggregate principal amount at any one time outstanding under this clause
(i) (with letters of credit being deemed to have a principal amount equal
to the maximum potential liability of the Company thereunder), including
all Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (i), not to
exceed $50.0 million less the aggregate principal amount of Indebtedness
incurred pursuant to clause (iii) of this Section 5.07(b);
(ii) the incurrence by the Company, Finance Co. and the Guarantors of
Indebtedness represented by the Notes, the related Note Guarantees and the
other Note Obligations to be issued on the date of the Indenture;
(iii) the incurrence by the Company, Finance Co. and the Guarantors of
Indebtedness represented by Additional Notes (and the related Subsidiary
Guarantees) issued under the Indenture after the date thereof, in an
aggregate principal amount at any one time outstanding under this clause
(iii), including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(iii), not to exceed $50.0 million less the aggregate principal amount of
Indebtedness incurred pursuant to clause (i) of this Section 5.07(b);
(iv) the incurrence by the Company and the Guarantors of Indebtedness
represented by the Term Loans, the related Term Loan Guarantees and the
other Term Loan Obligations on the Closing Date in an aggregate principal
amount not to exceed $385.0 million;
(v) the incurrence by the Company or any of its Subsidiaries of
Indebtedness represented by Capital Lease Obligations or purchase money
obligations, in each case, incurred for the purpose of financing all or any
part of the costs associated with the construction, installation,
operation, maintenance or improvement of any of the Facilities, in an
aggregate principal amount, including all Permitted Refinancing
40
Indebtedness incurred to refund, refinance or replace any Indebtedness
incurred pursuant to this clause (v), not to exceed $50.0 million at any
time outstanding;
(vi) the incurrence by the Company or any of its Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to refund, refinance or replace, Indebtedness (other than
intercompany Indebtedness) that was permitted to be incurred under clauses
(i), (ii), (iii), (iv), (v) or (vi) of this Section 5.07(b);
(vii) the incurrence by the Company or any of its Subsidiaries of
intercompany Indebtedness between or among the Company and any of its
Subsidiaries; provided, however, that (i) any subsequent issuance or
transfer of Equity Interests that results in any such Indebtedness being
held by a Person other than the Company or a Subsidiary of the Company and
(ii) any sale or other transfer of any such Indebtedness to a Person that
is not either the Company or a Subsidiary of the Company will be deemed, in
each case, to constitute an incurrence of such Indebtedness by the Company
or such Subsidiary, as the case may be, that was not permitted by this
clause (vii); and provided, further, that any such intercompany
Indebtedness must be included in the Collateral;
(viii) the incurrence by the Company or any of its Subsidiaries of
Hedging Obligations, in connection with Permitted Debt or otherwise, in the
ordinary course of business and not for speculative purposes;
(ix) the incurrence by the Company or any of its Subsidiaries of
Indebtedness in respect of workers' compensation claims, self-insurance
obligations, bankers' acceptances, and performance and surety bonds in the
ordinary course of business;
(x) the incurrence by the Company or any of its Subsidiaries of
Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn
against insufficient funds, so long as such Indebtedness is covered within
five business days; and
(xi) the incurrence by the Company or any of its Subsidiaries of (a)
Subordinated Indebtedness under the Working Capital Facility and (b) other
Subordinated Indebtedness loaned to the Company or any of its Subsidiaries
by an Affiliate of the Company outstanding on the Closing Date (and any
accrued interest thereon).
The Company will not incur, and will not permit any Subsidiary to incur,
any Indebtedness (including Permitted Debt) that is contractually subordinated
in right of payment to any other Indebtedness of the Company or such Subsidiary
unless such Indebtedness is also contractually subordinated in right of payment
to the Term Loans and the applicable Term Loan Guarantees on substantially
identical terms or on terms that are more favorable to the Lenders; provided,
however, that no Indebtedness will be deemed to be contractually subordinated in
right of payment to any other Indebtedness of the Company or any of its
Subsidiaries solely by virtue of being unsecured or by virtue of being secured
on a junior basis.
41
For purposes of this Section 5.07, in the event that an item of proposed
Indebtedness meets the criteria of more than one of the categories of Permitted
Debt described in clauses (i) through (xi) above, the Company will be permitted
to classify such item of Indebtedness on the date of its incurrence, or later
reclassify all or a portion of such item of Indebtedness, in any manner that
complies with this Section 5.07. The accrual of interest, the accretion or
amortization of original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Stock in the form of additional shares of
the same class of Disqualified Stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Stock for purposes of this Section
5.07; provided, in each such case, that the amount thereof is included in Fixed
Charges of the Company as accrued. Notwithstanding any other provision of this
Section 5.07, the maximum amount of Indebtedness that the Company or any
Subsidiary may incur pursuant to this Section 5.07 shall not be deemed to be
exceeded solely as a result of fluctuations in exchange rates or currency
values.
SECTION 5.08. Asset Sales.
(a) The Company will not, and will not permit any of its Subsidiaries to,
consummate an Asset Sale (other than a Designated Asset Disposition) unless:
(i) the Company (or any of its Subsidiaries, as the case may be)
receives consideration at the time of the Asset Sale at least equal to the
Fair Market Value of the assets or Equity Interests issued or sold or
otherwise disposed of (as determined by the Company's Board of Directors
and evidenced by a resolution delivered to the Administrative Agent);
(ii) at least 90% of the consideration received in the Asset Sale by
the Company or such Subsidiary is in the form of cash. For purposes of this
provision, each of the following shall be deemed to be cash:
(A) any liabilities, as shown on the Company's most recent
consolidated balance sheet, of the Company or any of its Subsidiaries
(other than contingent liabilities and liabilities that are by their
terms subordinated to the Term Loans and the Term Loan Guarantees) that
are assumed by the transferee of any such assets pursuant to a
customary novation or similar agreement that releases the Company or
such Subsidiary from further liability; and
(B) any securities, notes or other obligations received by the Company or
any such Subsidiary from such transferee that are promptly, subject
to
ordinary settlement periods, converted by the Company or such
Subsidiary into cash, to the extent of the cash received in that
conversion;
(iii) following the consummation of such Asset Sale, at least five
Facilities that have achieved commercial operation continue to be owned and
controlled by the Company and its Subsidiaries; and
42
(iv) if the assets disposed of in such Asset Sale include any component
of a Facility that is necessary for the operation of such Facility, then
the Asset Sale must involve the disposition of such Facility as a whole.
(b) Within 30 days after the receipt of any Net Proceeds from an Asset Sale
(including a Designated Asset Disposition), Casualty Event or Condemnation
Event, the Company will commence an Asset Sale Offer pursuant to the terms of
Section 2.11 hereof. The Offer Amount shall be equal to the lesser of the Net
Proceeds of such Asset Sale, Casualty Event or Condemnation Event and the
aggregate principal amount of Term Loan Obligations outstanding at the time of
such Asset Sale Offer.
SECTION 5.09. Transactions with Affiliates.
(a) The Company will not, and will not permit any of its Subsidiaries to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate of the Company
(each, an "Affiliate Transaction"), unless:
(i) the Affiliate Transaction is on terms that are no less favorable to
the Company or the relevant Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Subsidiary with
an unrelated Person; and
(ii) the Company delivers to the Administrative Agent:
(A) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$5.0 million, a resolution of the Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction
complies with this Section 5.09 and that such Affiliate Transaction has
been approved by a majority of the Board of Directors;
(B) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$15.0 million, a positive opinion as to the Fair Market Value of such
Affiliate Transaction issued by an accounting, appraisal or investment
banking firm of national standing; and
(C) with respect to any Affiliate Transaction or series of
Affiliate Transactions constituting the sale or other disposition of a
Facility, an opinion as to the fairness to the Company or such
Subsidiary of such Affiliate Transaction from a financial point of view
issued by an accounting, appraisal or investment banking firm of
national standing.
(b) The following items shall not be deemed to be Affiliate Transactions
and, therefore, shall not be subject to the provisions of Section 5.09(a):
43
(i) any employment agreement, employee benefit plan, officer and
director indemnification agreement or any similar arrangement entered into
by the Company or any of its Subsidiaries in the ordinary course of
business;
(ii) transactions between or among the Company and/or its Subsidiaries;
(iii) transactions with a Person that is an Affiliate of the Company
solely because the Company owns, directly or through a Subsidiary, an
Equity Interest in, or controls, such Person;
(iv) payment of reasonable directors' fees to Persons who are not
otherwise Affiliates of the Company;
(v) any issuance of Equity Interests (other than Disqualified Stock) of
the Company to Affiliates of the Company; provided that such Equity
Interests are included in the Collateral;
(vi) Restricted Payments that do not violate the provisions of this
Agreement as described in Section 5.05 hereof;
(vii) loans or advances to employees in the ordinary course of business
not to exceed $1.0 million in the aggregate at any one time outstanding;
(viii) Permitted Payments to Parent;
(ix) the Hillabee Disposition;
(x) transactions pursuant to written agreements with Affiliates of the
Company in place as of the date of this Agreement, including transactions
entered into by the Company or its Subsidiaries with third parties that are
not at that time Affiliates on behalf and at the direction of CES pursuant
to the Index Based Gas Sale and Power Purchase Agreement;
(xi) any amendments or modifications of, or waivers under, any written
agreement described under clause (x) of this 5.09(b) that is not a Major
Project Document; provided that no such amendment, modification or waiver
alters any such agreement in a manner than is materially adverse to the
interests of the Lenders;
(xii) amendments or modifications of, or waivers under, any Major
Project Document that are permitted by Section 5.11(b) and are on terms
that are no less favorable to the Company or its relevant Subsidiary (as
certified to the Administrative Agent in an Officer's Certificate) than
those that would have been obtained in a comparable transaction by the
Company or such Subsidiary with an unrelated Person; and
(xiii) any agreement to do any of the foregoing.
(c) Any transaction which has been determined, in the written opinion of an
independent nationally recognized investment banking firm, to be fair, from a
financial point of
44
view, to the Company or the applicable Subsidiary shall be deemed to be in
compliance with this Section 5.09.
SECTION 5.10. Liens.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Lien of any
kind on any asset now owned or hereafter acquired, except Permitted Liens.
SECTION 5.11. Business Activities.
(a) The Company will not, and will not permit any of its Subsidiaries to,
engage in any business other than Permitted Businesses, except to such extent as
would not be material to the Company and its Subsidiaries taken as a whole.
(b) The Company will, and will cause its Subsidiaries to, perform all their
obligations under the Major Project Documents, and the Company will not, and
will not permit any of its Subsidiaries to, terminate, amend or otherwise
modify, or consent to any termination, amendment or modification of, or grant
any waiver under, any Major Project Document, unless any failure to so perform
or any such termination, amendment, modification or waiver would not reasonably
be expected to, when taken together with all other such failures to perform,
terminations, amendments, modifications and waivers since the date of this
Agreement, be materially adverse to the Lenders, as evidenced by a certificate
of the Chief Financial Officer of the Company (it being understood that any such
failure to perform or any such termination, amendment, modification or waiver
would be materially adverse to the Lenders if the Excess Cash Flow for the
Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
failure to perform occurred or such termination, amendment, modification or
waiver became effective, as applicable, would have decreased by more than 5.0%,
determined on a pro forma basis as if all such failures to perform had occurred
and all such terminations, amendments, modifications and waivers had been
effective at the beginning of such four-quarter period).
(c) The Company will, and will cause its Subsidiaries to, obtain and
maintain all permits and approvals necessary for the construction and operation
of the Facilities, including applicable exemptions from PUHCA, unless the
failure to do so would not reasonably be expected to have a Material Adverse
Effect.
(d) The Company will not, and will not permit any of its Subsidiaries to,
use or dispose of any Hazardous Materials or allow any hazardous materials to be
brought onto or stored or used on or transported to or released from the
Facilities, other than in accordance with prudent industry practices and in
compliance with all applicable Environmental Laws, except to the extent such
non-compliance, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
(e) On or prior to January 1, 2005, the Company will either (i) complete
the Osprey Facility in accordance with the standards for completion contained in
the Calpine Project Undertaking or (ii) sell the Osprey Facility in accordance
with Sections 2.11 and 5.08 hereof.
45
SECTION 5.12. Maintenance of Existence.
Subject to Article 6 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect:
(i) its partnership existence, and the corporate, limited liability
company partnership or other existence of each of its Subsidiaries, in
accordance with the respective organizational documents (as the same may be
amended from time to time) of the Company or any such Subsidiary; and
(ii) the rights (charter and statutory), licenses and franchises of the
Company and its Subsidiaries; provided, however, that the Company shall not
be required to preserve any such right, license or franchise, or the
corporate, limited liability company, partnership or other existence of any
of its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business
of the Company and its Subsidiaries, taken as a whole, and that the loss
thereof is not adverse in any material respect to the Lenders.
SECTION 5.13. Offer to Repurchase Upon Change of Control.
(a) If a Change of Control occurs, each Lender shall have the right to
require the Company to repay all or any part (equal to $1,000 or an integral
multiple of $1,000) of that Lender's Term Loans pursuant to the offer described
below (the "Change of Control Offer") on the terms set forth in this Agreement.
In the Change of Control Offer, the Company shall offer a payment in cash equal
to 101% of the aggregate principal amount of Term Loans repaid plus accrued and
unpaid interest (the "Change of Control Payment"), to but excluding the date of
repayment. Within 30 days following any Change of Control, the Company shall
mail a notice to the Administrative Agent (for delivery to each Lender)
describing the transaction or transactions that constitute the Change of Control
and offering to repay all Term Loans on the change of control payment date (the
"Change of Control Payment Date") specified in the notice, which date shall be
no earlier than 30 days and no later than 60 days from the date such notice is
mailed, pursuant to the procedures required by this Agreement and described in
such notice.
(b) On the Change of Control Payment Date, the Company shall, to the extent
lawful:
(i) transfer to the Administrative Agent in immediately available funds
an amount equal to the Change of Control Payment in respect of all Term
Loans or portions thereof for which repayment has been requested; and
(ii) deliver or cause to be delivered to the Administrative Agent an
Officers' Certificate stating the aggregate principal amount of the Term
Loans or portions thereof being repaid by the Company.
(c) The Administrative Agent shall promptly mail to each Lender so
requesting the Change of Control Payment for such Term Loans.
(d) The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
46
(e) The provisions described above that require the Company to make a
Change of Control Offer following a Change of Control shall be applicable
whether or not any other provisions of this Agreement are applicable.
(f) The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in this Agreement applicable to a Change of Control Offer made by the
Company and repays all Term Loans not withdrawn under the Change of Control
Offer or (ii) notice of voluntary prepayment has been given in accordance with
Section 2.10 unless and until there is a default in payment of the applicable
prepayment price.
SECTION 5.14. Payments for Consent.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any holder of Secured Debt for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of any Secured Debt
Document unless such consideration is offered to be paid and is paid to all
holders of Secured Debt that consent, waive or agree to amend in the time frame
set forth in the solicitation documents relating to such consent, waiver or
agreement.
SECTION 5.15. Hillabee Facility.
The Company will not consummate any Asset Sale, incur any Indebtedness,
grant any Liens, make any Investment (other than an Investment made solely with
the proceeds of a capital contribution from Calpine or an Affiliate thereof
(other than the Company or any of its Subsidiaries)) or enter into or engage in
any other transaction with respect to the Hillabee Facility, other than (i) as
existing on the Closing Date and (ii) as required or expressly provided for by
the terms of this Agreement or the Security Documents (including the Hillabee
Disposition).
SECTION 5.16. Restrictions on Activities of Finance Co.
The Company will not permit Finance Co. to hold any material assets, become
liable for any material obligations or engage in any significant business
activities; provided that Finance Co. may be a co-obligor or guarantor with
respect to Indebtedness if the Company is an obligor on such Indebtedness and
the net proceeds of such Indebtedness are received by the Company, Finance Co.
or one or more of the Company's other Subsidiaries.
SECTION 5.17. Additional Subsidiaries.
(a) If the Company or any of its Subsidiaries acquires or creates another
Subsidiary after the date of this Agreement, then (i) that newly acquired or
created Subsidiary to become a Guarantor hereunder and will deliver an Opinion
of Counsel reasonably satisfactory to the Administrative Agent within 30 days of
the date on which it was acquired or created, and (ii) all Equity Interests in
that Subsidiary and all real and personal property of that Subsidiary will
become part of the Collateral within 30 days of the date on which that
Subsidiary was acquired or created pursuant to documentation (including security
documents, financing statements,
47
opinions and other documents) reasonably satisfactory to the Administrative
Agent and the Collateral Agent.
(b) The Company will not, and will not permit any of its Subsidiaries to,
acquire or create any additional Subsidiaries other than Wholly Owned
Subsidiaries.
SECTION 5.18. Limitation on Issuances and Sales of Equity Interests
in Subsidiaries.
(a) The Company will not, and will not permit any of its Subsidiaries to,
transfer, convey, sell, lease or otherwise dispose of any Equity Interests in
any Subsidiary of the Company to any Person (other than the Company or a Wholly
Owned Subsidiary of the Company ), unless:
(i) such transfer, conveyance, sale, lease or other disposition is of
all the Equity Interests in such Subsidiary; and
(ii) the Net Proceeds from such transfer, conveyance, sale, lease or
other disposition are applied in accordance with Sections 2.11 and 5.08.
(b) The Company will not permit any of its Subsidiaries to issue any Equity
Interests (other than, if necessary, shares of its Capital Stock constituting
directors' qualifying shares) to any Person other than to the Company or a
Wholly Owned Subsidiary of the Company.
SECTION 5.19. Deposit of Revenues.
The Company will, and will cause its Subsidiaries to, deposit all revenues
received by the Company and its Subsidiaries, within two Business Days of
receipt thereof, in the Revenue Account (as defined in the Pledge and Security
Agreement).
SECTION 5.20. Maintenance of Insurance.
The Company shall, and shall cause its Subsidiaries to, maintain with
financially sound and reputable insurance companies, insurance on their
property, including the Facilities, in at least such amounts, with such
deductibles and against at least such risks as is customary for companies of the
same or similar size engaged in the same or similar businesses as those of the
Company and its Subsidiaries and furnish to the Administrative Agent, upon
written request, full information as to such Persons' property and liability
insurance carriers. The Company shall, and shall cause its Subsidiaries to,
cause all their liability insurance policies to name the Secured Parties, as a
class, as additional insureds and shall cause all its property and casualty
policies to name the Collateral Agent as sole loss payee.
48
ARTICLE VI.
SUCCESSORS
SECTION 6.01. Merger, Consolidation, or Sale of Assets.
(a) The Company may not, directly or indirectly: (i) consolidate or merge
with or into another Person (whether or not the Company is the surviving
entity); (ii) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company and its
Subsidiaries taken as a whole, in one or more related transactions, to another
Person; or (iii) lease all or substantially all of its properties or assets, in
one or more related transactions, to any other Person; provided, however, that
the foregoing shall not apply to:
(i) a merger of the Company with an Affiliate solely for the purpose of
reconstituting the Company in another jurisdiction; or
(ii) any sale, transfer, assignment, conveyance, lease or other
disposition of assets between or among the Company and its Subsidiaries.
(b) Notwithstanding the foregoing, the Company is permitted to reorganize
as a corporation or a limited liability company in accordance with the
procedures established in this Agreement, provided that the Company shall have
delivered to the Administrative Agent an Opinion of Counsel in the United States
reasonably acceptable to the Administrative Agent confirming that such
reorganization is not adverse to the Lenders (it being recognized that such
reorganization shall not be deemed adverse to the Lenders solely because (i) of
the accrual of deferred tax liabilities resulting from such reorganization or
(ii) the successor or surviving corporation (A) is subject to income tax as a
corporate entity or (B) is considered to be an "includable corporation" of an
affiliated group of corporations within the meaning of the Code or any similar
state or local law).
SECTION 6.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company in a transaction that is subject to, and that complies with the
provisions of, Section 6.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Agreement referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Agreement with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Term Loans.
49
ARTICLE VII.
DEFAULTS AND REMEDIES
SECTION 7.01. Events of Default.
Each of the following is an "Event of Default":
(a) default for 30 days in the payment when due of interest on the Term
Loans;
(b) default in payment when due of the principal of, or premium, if any, on
the Term Loans;
(c) failure to comply with Section 5.08, 5.11(e), 5.13, 5.19 or 6.01;
(d) failure by the Company or any of its Subsidiaries for 30 days after
written notice from the Administrative Agent or the Lenders holding at least 25%
in outstanding aggregate principal amount of the Term Loans then outstanding to
comply with any of the representations or other agreements in this Agreement or
the other Term Loan Documents;
(e) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of this
Agreement, if that default:
(i) is caused by a failure to pay principal of, or interest or premium,
if any, on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness on the date of such default (a "Payment
Default"); or
(ii) results in the acceleration of such Indebtedness prior to its
express maturity,
and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$5.0 million or more;
(f) failure by the Company or any of its Subsidiaries to pay final
judgments aggregating in excess of $5.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days;
(g) the repudiation by any Parent or the Company or any of its Subsidiaries
of any of its obligations under the Security Documents or the unenforceability
of any of the Security Documents against any Parent or the Company or any of its
Subsidiaries for any reason; provided that such repudiation or unenforceability
relates to Collateral having a Fair Market Value of $5.0 million or more;
50
(h) except as permitted by this Agreement, any Term Loan Guarantee shall be
held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or any Guarantor, or any Person
acting on behalf of any Guarantor, shall deny or disaffirm its obligations under
its Term Loan Guarantee;
(i) breach by any Person (other than the Company or any of its
Subsidiaries) of its obligations under, or termination or failure to be in
full force and effect of, a Major Project Document, unless such breach,
termination or failure to be in full force and effect would not reasonably
be expected to, when taken together with all other such breaches,
terminations or failures since the date of this Agreement (other than those
that have been cured as contemplated below, including by entering into a
replacement agreement), be materially adverse to the Lenders, as evidenced
by a certificate of the Chief Financial Officer of the Company (it being
understood that any such breach, termination or failure would be materially
adverse to the Lenders if the Excess Cash Flow for the Company's most
recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such
breach, termination or failure occurred would have decreased by more than
5.0%, determined on a pro forma basis as if all such breaches, terminations
and failures had occurred at the beginning of such four-quarter period),
unless with respect to any Major Project Document such breach is cured, or
such Major Project Document is replaced with a substantially similar
agreement (it being understood that an agreement will be considered
substantially similar if it would not be materially adverse to the Lenders,
as determined by the standard set forth in the previous parenthetical),
within 60 days thereafter; and
(j) (i) the Company or any of its Subsidiaries, within the meaning of the
Bankruptcy Law: (A) commences a voluntary case, (B) consents to the entry of an
order for relief against it in an involuntary case, (C) consents to the
appointment of a custodian of it or for all or substantially all of its
property, (D) makes a general assignment for the benefit of its creditors or (E)
generally is not paying its debts as they become due, or (ii) a court of
competent jurisdiction enters an order or decree under the Bankruptcy Law that:
(A) is for relief against the Company or any of its Subsidiaries, in an
involuntary case, (B) appoints a custodian of the Company or any of its
Subsidiaries or for all or substantially all of the property of the Company or
any of its Subsidiaries or (C) orders the liquidation of the Company or any of
its Subsidiaries, and in any case under this clause (ii) the order or decree
remains unstayed and in effect for 60 consecutive days.
SECTION 7.02. Acceleration.
(a) In the case of an Event of Default specified in clause (j) of Section
7.01 hereof, with respect to the Company or any of its Subsidiaries, outstanding
Term Loans shall become due and payable immediately without further action or
notice. If any other Event of Default occurs and is continuing, the
Administrative Agent or the Lenders holding at least 25% in outstanding
aggregate principal amount of the Term Loans then outstanding may declare all
the Term Loans to be due and payable immediately.
(b) Upon any such declaration, the Term Loans shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (j) of Section 7.01 hereof occurs with respect to the Company, any of its
Subsidiaries, all outstanding
51
Term Loans shall be due and payable immediately without further action or
notice. The Lenders holding at least 25% in outstanding aggregate principal
amount of the Term Loans then outstanding by written notice to the
Administrative Agent may on behalf of all of the Lenders rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default (except nonpayment of principal,
interest or premium that has become due solely because of the acceleration) have
been cured or waived.
SECTION 7.03. Other Remedies.
(a) If an Event of Default occurs and is continuing, the Administrative
Agent may pursue any available remedy to collect the payment of principal,
premium, if any, and interest on the Term Loans or to enforce the performance of
this Agreement.
(b) The Administrative Agent may maintain a proceeding even if it does not
possess any of the Term Loans. A delay or omission by the Administrative Agent
or any Lender in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent
permitted by law.
SECTION 7.04. Waiver of Past Defaults.
The Requisite Lenders by notice to the Administrative Agent may on behalf
of the Lenders waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium, if any, or interest on, the Term Loans
(including in connection with an offer to purchase); provided, however, that the
Requisite Lenders may rescind an acceleration and its consequences, including
any related payment default that resulted from such acceleration. Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Agreement; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
SECTION 7.05. Control by Majority.
The Requisite Lenders may direct the time, method and place of conducting
any proceeding for exercising any remedy available to the Administrative Agent
or exercising any trust or power conferred on it. However, the Administrative
Agent may refuse to follow any direction that conflicts with law or this
Agreement that the Administrative Agent determines may be unduly prejudicial to
the rights of other Lenders or that may involve the Administrative Agent in
personal liability.
SECTION 7.06. Collection Suit by Administrative Agent. If an Event of
Default specified in Section 7.01(a) or (b) occurs and is continuing, the
Administrative Agent is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Term Loans
and interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
52
collection, including the reasonable compensation, expenses, disbursements and
advances of the Administrative Agent, its agents and counsel.
SECTION 7.07. Priorities.
Subject to the Collateral Trust Agreement, if the Administrative Agent
collects any money pursuant to this Article 7, it shall pay out the money in the
following order:
First: to the Administrative Agent, its agents and attorneys for
amounts due under this Agreement and the other Term Loan Documents,
including payment of all compensation, expense and liabilities incurred,
and all advances made, by the Administrative Agent and the costs and
expenses of collection;
Second: to the Lenders for amounts due and unpaid on the Term Loans for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Term
Loans for principal, premium, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Administrative Agent may fix a record date and payment date for any
payment to the Lenders pursuant to this Section 7.07.
ARTICLE VIII.
AGENTS
SECTION 8.01. Appointment of Agents.
The Company and the Lenders acknowledge and agree that GSCP has acted and
shall be credited as sole lead arranger and sole bookrunner of, and syndication
agent for, the Term Loans and that GSCP is hereby appointed Administrative Agent
hereunder and under the other Term Loan Documents. Each Lender hereby authorizes
the Sole Lead Arranger and the Administrative Agent to act as its agent in
accordance with the terms hereof and the other Term Loan Documents. The
Administrative Agent hereby agrees to act upon the express conditions contained
herein and the other Term Loan Documents, as applicable. The provisions of this
Article VIII are solely for the benefit of the Agents and the Lenders and no
Obligor shall have any rights as a third party beneficiary of any of the
provisions thereof. In performing its functions and duties hereunder, the
Administrative Agent shall act solely as an agent of the Lenders and no Agent
does or shall assume or be deemed to have assumed any obligation towards or
relationship of agency or trust with or for the Company or any of its
Subsidiaries. The Sole Lead Arranger, without consent of or notice to any party
hereto, may assign any and all of its rights or obligations hereunder to any of
its Affiliates. GSCP in its capacity as the Sole Lead Arranger shall not have
any duties, liabilities or obligations under the Term Loan Documents but shall
be entitled to all benefits of this Article VIII.
53
SECTION 8.02. Powers and Duties.
Each Lender irrevocably authorizes each Agent to take such action on such
Lender's behalf and to exercise such powers, rights and remedies hereunder and
under the other Term Loan Documents as are specifically delegated or granted to
such Agent by the terms hereof and thereof, together with such powers, rights
and remedies as are reasonably incidental thereto. Each Agent shall have only
those duties and responsibilities that are expressly specified herein and the
other Term Loan Documents. Each Agent may exercise such powers, rights and
remedies and perform such duties by or through its agents or employees. No Agent
shall have, by reason hereof or any of the other Term Loan Documents, a
fiduciary relationship in respect of any Lender; and nothing herein or any of
the other Term Loan Documents, expressed or implied, is intended to or shall be
so construed as to impose upon any Agent any obligations in respect hereof or
any of the other Term Loan Documents except as expressly set forth herein or
therein.
SECTION 8.03. General Immunity.
(a) No Responsibility for Certain Matters. No Agent shall be responsible to
any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency hereof or any other Term Loan
Document or for any representations, warranties, recitals or statements made
herein or therein or made in any written or oral statements or in any financial
or other statements, instruments, reports or certificates or any other documents
furnished or made by any Agent to the Lenders or by or on behalf of any Obligor
to any Agent or any Lender in connection with the Term Loan Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of any Obligor or any other Person liable for the payment of any Term
Loan Obligations, nor shall any Agent be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Term Loan Documents or as to the
use of the proceeds of the Term Loans or as to the existence or possible
existence of any Event of Default or Default or to make any disclosures with
respect to the foregoing. Anything contained herein to the contrary
notwithstanding, the Administrative Agent shall not have any liability arising
from confirmations of the amount of outstanding Term Loans or the component
amounts thereof.
(b) Exculpatory Provisions. No Agent nor any of its officers, partners,
directors, employees or agents shall be liable to the Lenders for any action
taken or omitted by any Agent under or in connection with any of the Term Loan
Documents except to the extent caused by such Agent's gross negligence or
willful misconduct. Each Agent shall be entitled to refrain from any act or the
taking of any action (including the failure to take an action) in connection
herewith or any of the other Term Loan Documents or from the exercise of any
power, discretion or authority vested in it hereunder or thereunder unless and
until such Agent shall have received instructions in respect thereof from
Requisite Lenders (or such other Lenders as may be required to give such
instructions under Section 13.05) and, upon receipt of such instructions from
Requisite Lenders (or such other Lenders, as the case may be), such Agent shall
be entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper Person or Persons, and shall be
entitled to rely and shall be protected in relying on
54
opinions and judgments of attorneys (who may be attorneys for the Company and
its Subsidiaries), accountants, experts and other professional advisors selected
by it; and (ii) no Lender shall have any right of action whatsoever against any
Agent as a result of such Agent acting or (where so instructed) refraining from
acting hereunder or any of the other Term Loan Documents in accordance with the
instructions of Requisite Lenders (or such other Lenders as may be required to
give such instructions under Section 13.05).
SECTION 8.04. Agents Entitled to Act as Lender.
The agency hereby created shall in no way impair or affect any of the
rights and powers of, or impose any duties or obligations upon, any Agent in its
individual capacity as a Lender hereunder. With respect to its participation in
the Term Loans, each Agent shall have the same rights and powers hereunder as
any other Lender and may exercise the same as if it were not performing the
duties and functions delegated to it hereunder, and the term "Lender" shall,
unless the context clearly otherwise indicates, include each Agent in its
individual capacity. Any Agent and its Affiliates may accept deposits from, lend
money to, own securities of, and generally engage in any kind of banking, trust,
financial advisory or other business with the Company or any of its Affiliates
as if it were not performing the duties specified herein, and may accept fees
and other consideration from the Company for services in connection herewith and
otherwise without having to account for the same to the Lenders.
SECTION 8.05. Lenders' Representations, Warranties and Acknowledgment.
(a) Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of the Company
and its Subsidiaries in connection with its Term Loans hereunder and that it has
made and shall continue to make its own appraisal of the creditworthiness of the
Company and its Subsidiaries. No Agent shall have any duty or responsibility,
either initially or on a continuing basis, to make any such investigation or any
such appraisal on behalf of the Lenders or to provide any Lender with any credit
or other information with respect thereto, whether coming into its possession
before the making of the Term Loans or at any time or times thereafter, and no
Agent shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to the Lenders.
(b) Each Lender, by delivering its signature page to this Agreement and
funding its Term Loan on the Closing Date, shall be deemed to have acknowledged
receipt of, and consented to and approved, each Term Loan Document and each
other document required to be approved by any Agent, Requisite Lenders or the
Lenders, as applicable on the Closing Date.
SECTION 8.06. Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by any Obligor, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against such
Agent in exercising its powers, rights and remedies or performing its duties
hereunder or under the other
55
Term Loan Documents or otherwise in its capacity as such Agent in any way
relating to or arising out of this Agreement or the other Term Loan Documents;
provided, no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. If any indemnity furnished to any Agent for any purpose
shall, in the opinion of such Agent, be insufficient or become impaired, such
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished; provided,
in no event shall this sentence require any Lender to indemnify any Agent
against any liability, obligation, loss, damage, penalty, action, judgment,
suit, cost, expense or disbursement in excess of such Lender's Pro Rata Share
thereof; and provided further, this sentence shall not be deemed to require any
Lender to indemnify any Agent against any liability, obligation, loss, damage,
penalty, action, judgment, suit, cost, expense or disbursement described in the
proviso in the immediately preceding sentence.
SECTION 8.07. Successor Administrative Agent.
The Administrative Agent may resign at any time by giving thirty (30) days'
prior written notice thereof to the Lenders and the Company, and the
Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to the Company and the
Administrative Agent and signed by the Requisite Lenders. Upon any such notice
of resignation or any such removal, the Requisite Lenders shall have the right,
upon five Business Days' notice to the Company, to appoint a successor
Administrative Agent. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Administrative
Agent and the retiring or removed Administrative Agent shall promptly transfer
to such successor Administrative Agent all sums, together with all records and
other documents necessary or appropriate in connection with the performance of
the duties of the successor Administrative Agent under the Term Loan Documents,
whereupon such retiring or removed Administrative Agent shall be discharged from
its duties and obligations hereunder. After any retiring or removed
Administrative Agent's resignation or removal hereunder as Administrative Agent,
the provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent hereunder.
ARTICLE IX.
COLLATERAL AND SECURITY
The Collateral Agent's Liens upon the Collateral shall no longer secure the
Term Loan Obligations outstanding under this Agreement, and the right of the
Lenders to the benefits and proceeds of the Collateral Agent's Liens on
Collateral shall terminate and be discharged:
(a) upon payment in full and discharge of all outstanding Term Loans
and all other Term Loan Obligations that are outstanding, due and payable
at the time all of the Term Loans are paid in full and discharged; or
(b) with the prior written consent of each Lender.
56
ARTICLE X.
RANKING OF LIENS
Notwithstanding: (a) anything to the contrary contained in the Security
Documents; (b) the time of incurrence of any Series of Secured Debt; (c) the
order or method of attachment or perfection of any Liens securing any Series of
Secured Debt; (d) the time or order of filing or recording of financing
statements, mortgages or other documents filed or recorded to perfect any Lien
upon any Collateral; (e) the time of taking possession or control over any
Collateral or (f) the rules for determining priority under any law governing
relative priorities of Liens, all Liens at any time granted by the Company or
any other Obligor to secure any of the Parity Lien Debt shall be subject and
subordinate to Priority Liens securing Priority Lien Obligations up to the
Priority Lien Cap.
The foregoing provision is intended for the benefit of, and shall be
enforceable as a third party beneficiary by, each present and future holder of
Priority Lien Obligations, each present and future Priority Debt Representative
and the Collateral Agent as holder of Priority Liens. No other Person shall be
entitled to rely on, have the benefit of or enforce this provision.
In addition, the foregoing provision is intended solely to set forth the
relative ranking, as Liens, of the Liens securing Parity Lien Debt as against
the Priority Liens. Neither the Notes nor the Term Loans nor any other Parity
Lien Obligations nor the exercise or enforcement of any right or remedy for the
payment or collection thereof are intended to be, or shall ever be by reason of
the foregoing provision, in any respect subordinated, deferred, postponed,
restricted or prejudiced.
ARTICLE XI.
COLLATERAL SHARING
SECTION 11.01. Equal and Ratable Lien Sharing by Holders of Priority Lien Debt.
Notwithstanding (a) anything to the contrary contained in the Security
Documents; (b) the time of incurrence of any Series of Priority Lien Debt; (c)
the order or method of attachment or perfection of any Liens securing any Series
of Priority Lien Debt; (d) the time or order of filing or recording of financing
statements, mortgages or other documents filed or recorded to perfect any Lien
upon any Collateral; (e) the time of taking possession or control over any
Collateral or (f) the rules for determining priority under any law governing
relative priorities of Liens:
(i) all Liens at any time granted by the Company or any other Obligor
to secure any Priority Lien Obligations shall secure equally and ratably
all present and future Priority Lien Obligations; and
(ii) all proceeds of all Liens at any time granted by the Company or
any Obligor to secure any of the Priority Lien Debt and other Priority Lien
Obligations shall be allocated and distributed equally and ratably on
account of the Priority Lien Debt and
57
other Priority Lien Obligations; provided that, for the avoidance of doubt,
in the absence of an Event of Default, the Company and the Guarantors shall
be entitled to utilize cash proceeds of Collateral in the ordinary course
of their business.
SECTION 11.02. Enforcement.
The provisions of this Section 11.01 are intended for the benefit of, and
will be enforceable as a third beneficiary by, each present and future holder of
Priority Lien Obligations, each present and future Priority Debt Representative
and the Collateral Agent as holder of Priority Liens.
SECTION 11.03. Amendment.
(a) No amendment or supplement to the provisions of this Article XI that
adversely affects the right of any holder of Priority Lien Obligations to share
in the Collateral equally and ratably with other holders of Priority Lien
Obligations shall become effective without the consent of each such holder.
(b) Any such amendment or supplement that imposes any obligation upon the
Collateral Agent or adversely affects the rights of the Collateral Agent in its
individual capacity shall become effective only with the consent of the
Collateral Agent.
(c) No waiver of the provisions of this Article XI shall in any event be
effective unless set forth in a writing signed and consented to, as required for
an amendment under this Section 11.03, by the party to be bound thereby.
ARTICLE XII.
TERM LOAN GUARANTEE
SECTION 12.01. Guarantee.
(a) Subject to the limitations set forth in Section 13.22 hereof, the
Guarantors hereby, jointly and severally, unconditionally and irrevocably,
guarantee to the Administrative Agent, for the benefit of the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Company when due (whether at the stated
maturity, by acceleration or otherwise) of the Term Loan Obligations.
(b) Each Guarantor, and by its making of a Term Loan on the Closing Date,
each Lender, hereby confirms that it is the intention of all such parties that
the Term Loan Guarantee of such Guarantor not constitute a fraudulent transfer
or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to
the extent applicable to any Term Loan Guarantee. To effectuate the foregoing
intention, the Administrative Agent, the Lenders and the Guarantors hereby
irrevocably agree that the obligations of such Guarantor will be limited to the
maximum amount that will, after giving effect to such maximum amount and all
other contingent and fixed liabilities of such Guarantor that are relevant under
such laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any
58
other Guarantor in respect of the obligations of such other Guarantor under this
Article XII, result in the obligations of such Guarantor under its Term Loan
Guarantee not constituting a fraudulent transfer or conveyance.
(c) Each Guarantor agrees that the Term Loan Obligations may at any time
and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Article XII or
affecting the rights and remedies of the Administrative Agent or any Agent
hereunder.
(d) The guarantee contained in this Article XII shall remain in full force
and effect until all the Obligations and the obligations of each Guarantor under
the guarantee contained in this Article XII shall have been satisfied by payment
in full and all commitments to extend credit under all Credit Facilities the
Indebtedness under which constitutes Priority Lien Debt shall have been
terminated or expired.
(e) No payment made by the Company, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any Lender from the Company, any of the Guarantors, any other guarantor
or any other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Term Loan Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Guarantor hereunder which
shall, notwithstanding any such payment (other than any payment made by such
Guarantor in respect of the Term Loan Obligations or any payment received or
collected from such Guarantor in respect of the Term Loan Obligations), remain
liable for the Term Loan Obligations up to the maximum liability of such
Guarantor hereunder until the Term Loan Obligations are paid in full and all
commitments to extend credit under all Credit Facilities the Indebtedness under
which constitutes Priority Lien Debt shall have been terminated or expired.
SECTION 12.02. Right of Contribution.
Each Guarantor hereby agrees that to the extent that a Guarantor shall have
paid more than its proportionate share of any payment made hereunder, such
Guarantor shall be entitled to seek and receive contribution from and against
any other Guarantor hereunder which has not paid its proportionate share of such
payment. Each Guarantor's right of contribution shall be subject to the terms
and conditions of Section 12.03. The provisions of this Section 12.02 shall in
no respect limit the obligations and liabilities of any Guarantor to the
Administrative Agent and the Lenders, and each Guarantor shall remain liable to
the Administrative Agent and the Lenders for the full amount guaranteed by such
Guarantor hereunder.
SECTION 12.03. No Subrogation.
Notwithstanding any payment made by any Guarantor hereunder or any set-off
or application of funds of any Guarantor by the Administrative Agent or any
Lender, no Guarantor shall be entitled to be subrogated to any of the rights of
the Administrative Agent or any Lender against the Company or any other
Guarantor or any collateral security or guarantee or right of offset held by the
Administrative Agent or any Lender for the payment of the Secured Obligations,
nor shall any Guarantor seek or be entitled to seek any contribution or
59
reimbursement from the Company or any other Guarantor in respect of payments
made by such Guarantor hereunder, until all amounts owing to the Administrative
Agent and the Lenders by the Company on account of the Term Loan Obligations are
paid in full and all commitments to extend credit under all Credit Facilities
the Indebtedness under which constitutes Priority Lien Debt shall have been
terminated or expired. If any amount shall be paid to any Guarantor on account
of such subrogation rights at any time when all of the Term Loan Obligations
shall not have been paid in full, such amount shall be held by such Guarantor in
trust for the Administrative Agent and the Lenders, segregated from other funds
of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be
turned over to the Administrative Agent in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if
required), to be applied against the Term Loan Obligations, whether matured or
unmatured, in such order as the Administrative Agent may determine, subject to
the terms and provisions of the Collateral Trust Agreement.
SECTION 12.04. Amendments, etc. with respect to the Term Loan Obligations.
Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to or
further assent by any Guarantor, any demand for payment of any of the Term Loan
Obligations made by the Administrative Agent or any Lender may be rescinded by
the Administrative Agent or such Lender and any of the Term Loan Obligations
continued, and the Term Loan Obligations, or the liability of any other Person
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and any of
the Term Loan Documents may be amended, modified, supplemented or terminated, in
whole or in part, as the requisite parties thereto deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time held
by the Administrative Agent or any Lender for the payment of the Term Loan
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Term Loan Obligations or for the guarantee contained in this Article XII or any
property subject thereto.
SECTION 12.05. Guarantee Absolute and Unconditional.
Each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Term Loan Obligations and notice of or proof
of reliance by the Administrative Agent or any Lender upon the guarantee
contained in this Article XII or acceptance of the guarantee contained in this
Article XII; the Term Loan Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee contained in this Article XII;
and all dealings between the Company and any of the Guarantors, on the one hand,
and the Administrative Agent and the Lenders, on the other hand, likewise shall
be conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Article XII. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Company or any of the Guarantors with respect to the Term Loan
Obligations. Each Guarantor understands and agrees that the guarantee contained
in this Article XII shall be
60
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity or enforceability of any of the Term Loan
Documents, any of the Term Loan Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent or any Lender, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the Company
or any other Person against the Administrative Agent or any Lender, or (c) any
other circumstance whatsoever (with or without notice to or knowledge of the
Company or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge (other than payment) of the Company
for the Term Loan Obligations, or of such Guarantor under the guarantee
contained in this Article XII, in bankruptcy or in any other instance. When
making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, the Administrative Agent or any Lender may, but
shall be under no obligation to, make a similar demand on or otherwise pursue
such rights and remedies as it may have against the Company, any other Guarantor
or any other Person or against any collateral security or guarantee for the Term
Loan Obligations or any right of offset with respect thereto, and any failure by
the Administrative Agent or any Lender to make any such demand, to pursue such
other rights or remedies or to collect any payments from the Company, any other
Guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Company, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Administrative Agent or any Lender against any Guarantor. For the purposes
hereof "demand" shall include the commencement and continuance of any legal
proceedings.
SECTION 12.06. Reinstatement.
The guarantee contained in this Article XII shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Term Loan Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Company or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
SECTION 12.07. Payments.
Each Guarantor hereby guarantees that payments hereunder will be paid to
the Collateral Agent without set-off or counterclaim in Dollars at an office of
the Administrative Agent in the City of New York.
61
ARTICLE XIII.
MISCELLANEOUS
SECTION 13.01. Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given to any Obligor, the Sole
Lead Arranger, the Collateral Agent or the Administrative Agent shall be sent to
such Person's address as set forth on Appendix B or in the other relevant Term
Loan Document, and in the case of any Lender, the address as indicated on
Appendix B or otherwise indicated to the Administrative Agent in writing. Each
notice hereunder shall be in writing and may be personally served, telexed or
sent by telefacsimile or United States mail or courier service and shall be
deemed to have been given when delivered in person or by courier service and
signed for against receipt thereof, upon receipt of telefacsimile or telex, or
three Business Days after depositing it in the United States mail with postage
prepaid and properly addressed; provided, no notice to any Agent shall be
effective until received by such Agent. Documents, notices or reports required
to be delivered to the Lenders pursuant to Sections 2.11, 5.01(a), 5.02 and 5.13
may be delivered electronically and posted electronically on
IntraLinks/IntraAgency or other relevant website to which the Lenders have
access (whether a commercial, third-party website or whether sponsored by
Administrative Agent), if any; provided that (i) the Administrative Agent shall
deliver paper copies of such reports to any Lender upon written request
therefor; and (ii) the Administrative Agent shall notify (which may be by
facsimile or electronic mail) each Lender of the posting of any such reports and
provide to each Lender by email electronic versions (i.e., soft copies) of such
reports.
SECTION 13.02. Expenses.
Whether or not the transactions contemplated hereby shall be consummated,
the Company agrees to pay promptly, without duplication among the separate
clauses of this Section 13.02 and without duplication of amounts paid under the
Purchase Agreement:
(a) all expenses associated with the creation and perfection of security
interests and associated documents, including, without limitation, the Security
Documents and all Financing Statements, including filing fees and the reasonable
fees and disbursements of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel to the Sole Lead
Arranger, incurred in connection therewith and the fees and disbursements of
local counsel incurred in connection therewith, in each case, prior to the
Closing Date;
(b) all the costs incurred after the Closing Date of furnishing all
opinions by counsel for the Company and the other Obligors;
(c) after the Closing Date, the reasonable fees, expenses and disbursements
of counsel to Agents in connection with the negotiation, preparation, execution
and administration of the Term Loan Documents and any consents, amendments,
waivers or other modifications thereto and any other documents or matters
requested by the Company;
62
(d) all the actual costs and reasonable expenses of creating and perfecting
Liens in favor of Collateral Agent, for the benefit of the Lenders pursuant
hereto, including filing and recording fees, expenses and taxes, stamp or
documentary taxes, search fees, title insurance premiums and reasonable fees,
expenses and disbursements of counsel to each Agent and of counsel providing any
opinions that any Agent or Requisite Lenders may request in respect of the
Collateral or the Liens created pursuant to the Security Documents;
(e) all the actual costs and reasonable fees, expenses and disbursements of
any auditors, accountants, consultants or appraisers if reasonably required in
connection with the administration or enforcement of this Agreement;
(f) all the actual costs and reasonable expenses (including the reasonable
fees, expenses and disbursements of any appraisers, consultants, advisors and
agents employed or retained by Collateral Agent and its counsel) reasonably
required in connection with the custody or preservation of any of the
Collateral; and
(g) after the occurrence of a Default or an Event of Default, all costs and
expenses, including reasonable attorneys' fees and costs of settlement, incurred
by any Agent and the Lenders in enforcing any Term Loan Obligations of or in
collecting any payments due from any Obligor hereunder or under the other Term
Loan Documents by reason of such Default or Event of Default (including in
connection with the sale of, collection from, or other realization upon any of
the Collateral or the enforcement of the Term Loan Guarantees) or in connection
with any refinancing or restructuring of the credit arrangements provided
hereunder in the nature of a "work-out" or pursuant to any Bankruptcy Case or
Insolvency Proceeding.
SECTION 13.03. Indemnity.
(a) In addition to the payment of costs and expenses pursuant to Section
13.02, whether or not the transactions contemplated hereby shall be consummated,
the Company and the Guarantors agree to defend (subject to Indemnitees'
selection of counsel), indemnify, pay and hold harmless the Administrative Agent
and the Lenders and each of their respective Affiliates and each and all of the
directors, officers, partners, trustees, employees, attorneys and agents, and
(in each case) their respective heirs, representatives, successors and assigns
(each of the foregoing, an "Indemnitee") from and against any and all
Indemnified Liabilities; provided, no Indemnitee shall be entitled to
indemnification hereunder with respect to any Indemnified Liability to the
extent such Indemnified Liability is found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted directly and primarily
from the gross negligence or willful misconduct of such Indemnitee.
(b) All amounts due under Section 13.03(a) shall be payable not later than
10 days after written demand therefor.
(c) To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in Section 13.03(a) may be unenforceable in whole or in part
because they are violative of any law or public policy, the Company and the
Guarantors shall contribute the maximum portion that they are permitted to pay
and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by Indemnitees or any of them.
63
(d) The Company and the Guarantors shall not assert any claim against any
Indemnitee, on any theory of liability, for any lost profits or special,
indirect or consequential damages or (to the fullest extent lawful) any punitive
damages arising out of, in connection with, or as a result of, this Agreement or
any other Term Loan Document or any agreement or instrument or transaction
contemplated hereby or relating in any respect to any Indemnified Liability, and
the Company and the Guarantors hereby forever waive, release and agree not to
▇▇▇ upon any claim for any such lost profits or special, indirect, consequential
or (to the fullest extent lawful) punitive damages, whether or not accrued and
whether or not known or suspected to exist in its favor.
(e) The agreements in this Section 13.03 shall survive repayment of the
Term Loans and all other amounts payable hereunder.
SECTION 13.04. Set-Off.
In addition to any rights now or hereafter granted under applicable law and
not by way of limitation of any such rights, upon the occurrence of any Event of
Default each Lender is hereby authorized by the Company and the Guarantors at
any time or from time to time subject to the consent of the Administrative
Agent, without prior written notice to such Person or to any other Person (other
than the Administrative Agent), any such notice being hereby expressly waived,
to set off and to appropriate and to apply any and all deposits (general or
special, including Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by such Lender to or for the credit or
the account of the Company or any Guarantor against and on account of the
obligations and liabilities of such party to such Lender hereunder, and under
the other Term Loan Documents, including all claims of any nature or description
arising out of or connected hereto, or with any other Term Loan Document,
irrespective of whether or not (a) such Lender shall have made any demand
hereunder or (b) the principal of or the interest on the Term Loans or any other
amounts due hereunder shall have become due and payable pursuant to Article II
and although such obligations and liabilities, or any of them, may be contingent
or unmatured.
SECTION 13.05. Amendments and Waivers.
(a) Requisite Lenders' Consent. Subject to Section 13.05(e), no amendment,
modification, termination or waiver of any provision of the Term Loan Documents,
or consent to any departure by any Obligor therefrom, shall in any event be
effective without the written concurrence of the Requisite Lenders and any
additional consents required by Sections 13.05(b) and (c).
(b) Affected Lenders' Consent. No amendment, modification, termination, or
consent shall be effective if the effect thereof would:
(i) extend the scheduled final maturity of any Term Loan or Term Loan
Note outstanding to any Lender without the prior written consent of that
Lender;
(ii) waive, reduce or postpone any scheduled repayment (but not
prepayment) due to any Lender without the prior written consent of that
Lender;
64
(iii) reduce the rate of interest on any Term Loan (other than any
waiver of any increase in the interest rate applicable to any Term Loan
pursuant to Section 2.07) payable to any Lender or reduce or extend any fee
payable hereunder to any Lender without the prior written consent of that
Lender;
(iv) reduce the principal amount of any Term Loan outstanding to any
Lender without the prior written consent of that Lender;
(v) amend, modify, terminate or waive any provision of this Section
13.05(b), as it applies to any Lender without the prior written consent of
that Lender;
(vi) amend the definition of "Requisite Lenders" or "Pro Rata Share";
(vii) release any Collateral from the Liens created by the Security
Documents, except as specifically provided for in this Agreement and the
Security Documents, without the prior written consent of all Lenders; or
(viii) consent to the assignment or transfer by any Obligor of any of
its rights and obligations under any Term Loan Document without the prior
written consent of all Lenders.
(c) Other Consents. No amendment, modification, termination or waiver of
any provision of the Term Loan Documents, or consent to any departure by any
Obligor therefrom, shall amend, modify, terminate or waive any provision of
Article VIII as the same applies to the Administrative Agent, or any other
provision hereof as the same applies to the rights or obligations of any Agent,
in each case without the consent of the Administrative Agent.
(d) Execution of Amendments, etc. The Administrative Agent may, but shall
have no obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of such Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on any Obligor in any
case shall entitle any Obligor to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this Section 13.05 shall be binding upon
each Lender at the time outstanding, each future Lender and, if signed by a
Obligor, on such Obligor.
(e) Certain Amendments. Notwithstanding the preceding provisions of this
Section 13.05, the Company and the Administrative Agent may amend or supplement
the Term Loan Documents without the consent of any Lender:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for the assumption of the Company's obligations to the
Lenders by a successor to the Company pursuant to Article V hereof;
(iii) to make any change that would provide any additional rights or
benefits to the Lenders or that does not adversely affect the legal rights
hereunder of any Lender;
65
(iv) to allow any Guarantor to execute a supplemental Guarantee with
respect to the Term Loans;
(v) to make, complete or confirm any grant of Collateral permitted or
required by this Agreement or any of the Security Documents or any release
of Collateral that becomes effective as set forth in this Agreement or any
of the Security Documents;
(vi) to conform the text of this Agreement, the Term Loan Notes or the
Security Documents to any provision of the Description of New Term Loans or
Description of Notes section of the Final Offering Circular to the extent
that such provision of the Description of New Term Loans or Description of
Notes section of the Final Offering Circular was intended to be a verbatim
recitation of a provision of this Agreement, the Term Loans or the Security
Documents; or
(vii) to reflect any waiver or termination of any right arising under
the provisions of this Agreement that otherwise would be enforceable by any
holder of the Notes, if such waiver or termination is set forth in the
indentures governing such Notes, provided that no such waiver or amendment
shall adversely affect the rights of the Lenders.
SECTION 13.06. Successors and Assigns; Participations.
(a) Generally. This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of the Lenders and the other
parties hereto. No Obligor's rights or obligations hereunder nor any interest
therein may be assigned or delegated by any Obligor without the prior written
consent of all Lenders. Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, Affiliates of each of the Agents and the Lenders) any legal
or equitable right, remedy or claim under or by reason of this Agreement.
(b) Register. The Company, the Administrative Agent and the Lenders shall
deem and treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Term Loan Commitments and Term Loans listed therein
for all purposes hereof, and no assignment or transfer of any such Term Loan
Commitment or Term Loan shall be effective, in each case, unless and until an
Assignment Agreement effecting the assignment or transfer thereof shall have
been delivered to and accepted by the Administrative Agent and recorded in the
Register as provided in Section 13.06(e). Prior to such recordation, all amounts
owed with respect to the applicable Term Loan Commitment or Term Loan shall be
owed to the Lender listed in the Register as the owner thereof, and any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of the
corresponding Term Loan Commitments or Term Loans.
(c) Right to Assign. Each Lender shall have the right at any time to sell,
assign or transfer all or a portion of its rights and obligations under this
Agreement, including, without
66
limitation, all or a portion of its Term Loan Commitment or Term Loans owing to
it or other Term Loan Obligation (provided, however, that each such assignment
shall be of a uniform, and not varying, percentage of all rights and obligations
under and in respect of any Term Loan and any related Term Loan Commitments):
(i) to any Person meeting the criteria of clause (i) of the definition
of the term of "Eligible Assignee" upon the giving of notice to the Company
and the Administrative Agent; and
(ii) to any Person meeting the criteria of clause (ii) of the
definition of the term of "Eligible Assignee";
provided, further each such assignment pursuant to this Section 13.06(c) shall
be in an aggregate amount of not less than $1,000,000 (or such lesser amount as
may be agreed to by the Company and the Administrative Agent or as shall
constitute the aggregate amount of the Term Loan Commitments and Term Loans
outstanding to the assigning Lender).
(d) Mechanics. The assigning Lender and the assignee thereof shall execute
and deliver to the Administrative Agent an Assignment Agreement, together with
such forms, certificates or other evidence, if any, with respect to United
States federal income tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver to the Administrative Agent
pursuant to Section 2.16(c).
(e) Notice of Assignment. Upon its receipt of a duly executed and completed
Assignment Agreement (and any forms, certificates or other evidence required by
this Agreement in connection therewith), the Administrative Agent shall record
the information contained in such Assignment Agreement in the Register, shall
give prompt notice thereof to the Company and shall maintain a copy of such
Assignment Agreement.
(f) Representations and Warranties of Assignee. Each Lender, upon execution
and delivery hereof or upon executing and delivering an Assignment Agreement, as
the case may be, represents and warrants as of the Closing Date or as of the
applicable Effective Date (as defined in the applicable Assignment Agreement)
that (i) it is an Eligible Assignee; (ii) it has experience and expertise in the
making of or investing in commitments or loans such as the applicable Term Loan
Commitments or Term Loans, as the case may be; and (iii) it shall make or invest
in, as the case may be, its Term Loan Commitments or Term Loans for its own
account in the ordinary course of its business and without a view to
distribution of such Term Loan Commitments or Term Loans within the meaning of
the Securities Act or the Exchange Act or other federal securities laws (it
being understood that, subject to the provisions of this Section 13.06, the
disposition of such Term Loan Commitments or Term Loans or any interests therein
shall at all times remain within its exclusive control).
(g) Effect of Assignment. Subject to the terms and conditions of this
Section 13.06, as of the "Effective Date" specified in the applicable Assignment
Agreement:
(i) the assignee thereunder shall have the rights and obligations of a
"Lender" hereunder to the extent such rights and obligations hereunder have
been assigned to it
67
pursuant to such Assignment Agreement and shall thereafter be a party
hereto and a "Lender" for all purposes hereof;
(ii) the assigning Lender thereunder shall, to the extent that rights
and obligations hereunder have been assigned thereby pursuant to such
Assignment Agreement, relinquish its rights (other than any rights which
survive the termination hereof under Section 13.08 and be released from its
obligations hereunder (and, in the case of an Assignment Agreement covering
all or the remaining portion of an assigning Lender's rights and
obligations hereunder, such Lender shall cease to be a party hereto;
provided, anything contained in any of the Term Loan Documents to the
contrary notwithstanding, such assigning Lender shall continue to be
entitled to the benefit of all indemnities hereunder as specified herein
with respect to matters arising out of the prior involvement of such
assigning Lender as a Lender hereunder);
(iii) the Term Loan Commitments shall be modified to reflect the Term
Loan Commitment of such assignee; and
(iv) if any such assignment occurs after the issuance of any Term Loan
Note hereunder, the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender its
applicable Term Loan Notes to the Administrative Agent for cancellation,
and thereupon the Company shall issue and deliver new Term Loan Notes, if
so requested by the assignee and/or assigning Lender, to such assignee
and/or to such assigning Lender, with appropriate insertions, to reflect
the new outstanding Term Loans of the assignee and/or the assigning Lender.
(h) Participations. Each Lender shall have the right at any time to sell
one or more participations to any Person (other than the Company, any of its
Restricted Subsidiaries or any of its Affiliates) in all or any part of its Term
Loan Commitments, Term Loans or in any other Term Loan Obligation. The holder of
any such participation, other than an Affiliate of the Lender granting such
participation, shall not be entitled to require such Lender to take or omit to
take any action hereunder except with respect to any amendment, modification or
waiver that would:
(i) extend the final scheduled maturity of any Term Loan or Term Loan
Note in which such participant is participating, or reduce the rate or
extend the time of payment of interest or fees thereon (except in
connection with a waiver of applicability of any post-default increase in
interest rates) or reduce the principal amount thereof, or increase the
amount of the participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of
Default or of a mandatory reduction in the Term Loan Commitment shall not
constitute a change in the terms of such participation, and that an
increase in any Term Loan Commitment or Term Loan shall be permitted
without the consent of any participant if the participant's participation
is not increased as a result thereof);
(ii) consent to the assignment or transfer by any Obligor of any of its
rights and obligations under this Agreement; or
68
(iii) release all or substantially all of the Collateral under the
Security Documents (except as expressly provided in the Term Loan
Documents) supporting the Term Loans hereunder in which such participant is
participating.
The Company agrees that each participant shall be entitled to the benefits of
Sections 2.14(c), 2.15 and 2.16 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (c) of this
Section; provided, (i) a participant shall not be entitled to receive any
greater payment under Section 2.14 or 2.15 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
participant, unless the sale of the participation to such participant is made
with the Company's prior written consent and (ii) a participant that would be a
Non-US Lender if it were a Lender shall not be entitled to the benefits of
Section 2.16 unless the Company is notified of the participation sold to such
participant and such participant agrees, for the benefit of the Company, to
comply with Section 2.16 as though it were a Lender. To the extent permitted by
law, each participant also shall be entitled to the benefits of Section 13.04 as
though it were a Lender, provided such participant agrees to be subject to
Section 2.13 as though it were a Lender.
(i) Certain Other Assignments. In addition to any other assignment
permitted pursuant to this Section 13.06, any Lender may assign and/or pledge
all or any portion of its Term Loans, the other Term Loan Obligations owed by or
to such Lender, and its Term Loan Notes, if any, to secure obligations of such
Lender including, without limitation, (i) to any Federal Reserve Bank 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 and (ii) with respect to any Lender that is a fund that invests in bank
loans, to any trustee or holder of obligations owed, or securities issued by,
such fund as security for such obligations or securities or to any other
representative of such holders; provided, no Lender, as between the Company and
such Lender, shall be relieved of any of its obligations hereunder as a result
of any such assignment and pledge, and provided further, in no event shall the
applicable Federal Reserve Bank, trustee or such holder of obligations be
considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder.
(j) Delivery of Lender Addenda. Each initial Lender shall become a party to
this Agreement by delivering to the Administrative Agent a Lender Addendum duly
executed by such Lender, the Company and the Administrative Agent.
SECTION 13.07. Independence of Covenants.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of a Default
or an Event of Default if such action is taken or condition exists.
SECTION 13.08. Survival of Representations, Warranties and Agreements.
All representations, warranties and agreements made herein shall survive
the execution and delivery hereof and the making of any Term Loan.
Notwithstanding anything herein or implied by law to the contrary, the
agreements of the Company and the Guarantors set forth
69
in Sections 2.14(c), 2.15, 2.16, 13.02, 13.03, 13.04, 13.15, 13.16 and 13.17 and
the agreements of Lenders set forth in Sections 2.13, 8.03(b) and 8.06 shall
survive the payment of the Term Loans and the termination hereof.
SECTION 13.09. No Waiver; Remedies Cumulative.
No failure or delay on the part of any Agent or any Lender in the exercise
of any power, right or privilege hereunder or under any other Term Loan Document
shall impair such power, right or privilege or be construed to be a waiver of
any default or acquiescence therein, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other power, right or privilege. The rights, powers and remedies given to
each Agent and each Lender hereby are cumulative and shall be in addition to and
independent of all rights, powers and remedies existing by virtue of any statute
or rule of law or in any of the other Term Loan Documents. Any forbearance or
failure to exercise, and any delay in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be construed to be
a waiver thereof, nor shall it preclude the further exercise of any such right,
power or remedy.
SECTION 13.10. Marshalling; Payments Set Aside.
Neither any Agent nor any Lender shall be under any obligation to marshal
any assets in favor of any Obligor or any other Person or against or in payment
of any or all of the Term Loan Obligations. To the extent that any Obligor makes
a payment or payments to the Administrative Agent or the Lenders (or to the
Administrative Agent, on behalf of the Lenders), or the Administrative Agent or
the Lenders enforce any security interests or exercise their rights of setoff,
and such payment or payments or the proceeds of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
SECTION 13.11. Severability.
In case any provision in or obligation under any Term Loan Document shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 13.12. Term Loan Obligations Several; Independent Nature of
Lenders' Rights.
The obligations of the Lenders hereunder are several and no Lender shall be
responsible for the obligations or Term Loan Commitment of any other Lender
hereunder. Nothing contained herein or in any other Term Loan Document, and no
action taken by the Lenders pursuant hereto or thereto, shall be deemed to
constitute the Lenders as a partnership, an association, a joint venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be
70
entitled to protect and enforce its rights arising out hereof and it shall not
be necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
SECTION 13.13. Headings.
Section headings herein are included herein for convenience of reference
only and shall not constitute a part hereof for any other purpose or be given
any substantive effect.
SECTION 13.14. Applicable Law.
This Agreement and the rights and obligations of the parties hereunder
shall be governed by, and shall be construed and enforced in accordance with,
the laws of the State of New York without regard to conflict of laws principles
thereof.
SECTION 13.15. Consent to Jurisdiction.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY HERETO ARISING OUT OF OR
RELATING HERETO OR ANY OTHER TERM LOAN DOCUMENT, OR ANY OF THE TERM LOAN
OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND
DELIVERING THIS AGREEMENT, EACH PARTY HERETO, FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (B) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE OBLIGOR AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 13.01; (D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (C)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE OBLIGOR
IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT; AND (E) AGREES THAT THE AGENTS AND THE
LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO BRING PROCEEDINGS AGAINST ANY OBLIGOR IN THE COURTS OF ANY OTHER
JURISDICTION.
SECTION 13.16. Waiver Of Jury Trial.
EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR
UNDER ANY OF THE OTHER TERM LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING
TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/COMPANY
RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO
BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF
71
DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 13.16 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER TERM LOAN
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE
HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
SECTION 13.17. Confidentiality.
Each Lender shall hold all non-public information regarding the Company and
its business identified as such by the Company and obtained by such Lender
pursuant to the requirements hereof in accordance with such Lender's customary
procedures for handling confidential information of such nature, it being
understood and agreed by the Company that, in any event, a Lender may make:
(i) disclosures of such information to Affiliates of such Lender and to
their agents and advisors (and to other Persons authorized by a Lender or
Agent to organize, present or disseminate such information in connection
with disclosures otherwise made in accordance with this Section 13.17);
(ii) disclosures of such information reasonably required by any bona
fide or potential assignee, transferee or participant in connection with
the contemplated assignment, transfer or participation by such Lender of
any Term Loans or any participations therein;
(iii) disclosure to any rating agency when required by it, provided
that, prior to any disclosure, such rating agency shall undertake in
writing to preserve the confidentiality of any confidential information
relating to the Obligors received by it from any of the Agents or any
Lender, and
(iv) disclosures required or requested by any governmental agency or
representative thereof or by the National Association of Insurance
Commissioners or pursuant to legal or judicial process; provided, unless
specifically prohibited by applicable law or court order, each Lender shall
make reasonable efforts to notify the Company of any request by any
governmental agency or representative thereof (other than any such request
in connection with any examination of the financial condition or
72
other routine examination of such Lender by such governmental agency) for
disclosure of any such non-public information prior to disclosure of such
information.
Notwithstanding anything to the contrary set forth herein or in any other
written or oral understanding or agreement to which the parties hereto are
parties or by which they are bound, the parties acknowledge and agree that (i)
any obligations of confidentiality contained herein and therein do not apply and
have not applied from the commencement of discussions between the parties to the
tax treatment and tax structure of this Agreement or the Indenture and the
transactions contemplated hereby or thereby (and any related transactions or
arrangements), and (ii) each party (and each of its employees, representatives,
or other agents) may disclose to any and all persons, without limitation of any
kind, the tax treatment and tax structure of this Agreement, the Indenture and
the transactions contemplated hereby or thereby and all materials of any kind
(including opinions or other tax analyses) that are provided to such party
relating to such tax treatment and tax structure, all within the meaning of
Treasury Regulations Section 1.6011-4; provided, however, that each party
recognizes that the privilege each has to maintain, in its sole discretion, the
confidentiality of a communication relating to this Agreement, the Indenture and
the transactions contemplated hereby or thereby, including a confidential
communication with its attorney or a confidential communication with a federally
authorized tax practitioner under Section 7525 of the Code, is not intended to
be affected by the foregoing.
SECTION 13.18. Usury Savings Clause.
Notwithstanding any other provision herein, the aggregate interest rate
charged with respect to any of the Term Loan Obligations, including all charges
or fees in connection therewith deemed in the nature of interest under
applicable law shall not exceed the Highest Lawful Rate. If the rate of interest
(determined without regard to the preceding sentence) under this Agreement at
any time exceeds the Highest Lawful Rate, the outstanding amount of the Term
Loans made hereunder shall bear interest at the Highest Lawful Rate until the
total amount of interest due hereunder equals the amount of interest which would
have been due hereunder if the stated rates of interest set forth in this
Agreement had at all times been in effect. In addition, if when the Term Loans
made hereunder are repaid in full the total interest due hereunder (taking into
account the increase provided for above) is less than the total amount of
interest which would have been due hereunder if the stated rates of interest set
forth in this Agreement had at all times been in effect, then to the extent
permitted by law, the Company shall pay to the Administrative Agent an amount
equal to the difference between the amount of interest paid and the amount of
interest which would have been paid if the Highest Lawful Rate had at all times
been in effect. Notwithstanding the foregoing, it is the intention of the
Lenders and the Company to conform strictly to any applicable usury laws.
Accordingly, if any Lender contracts for, charges, or receives any consideration
which constitutes interest in excess of the Highest Lawful Rate, then any such
excess shall be cancelled automatically and, if previously paid, shall at such
Lender's option be applied to the outstanding amount of the Term Loans made
hereunder or be refunded to the Company.
SECTION 13.19. Counterparts.
This Agreement may be executed in any number of counterparts, each of which
when so executed and delivered shall be deemed an original, but all such
counterparts together shall
73
constitute but one and the same instrument. The delivery of an executed
signature page of this Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
SECTION 13.20. Effectiveness.
This Agreement shall become effective upon the execution of a counterpart
hereof by each of the parties hereto and receipt by the Company and the
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
SECTION 13.21. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Agreement must include:
(i) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(ii) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(iv) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 13.22. No Recourse Against the Company or the Guarantors.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS AGREEMENT OR ANY
OTHER TERM LOAN DOCUMENT, THE TERM LOANS AND THE TERM LOAN GUARANTEES ARE
NON-RECOURSE SECURED OBLIGATIONS OF THE COMPANY AND THE GUARANTORS,
RESPECTIVELY. THE ONLY RECOURSE A LENDER WILL HAVE WITH RESPECT TO THE PAYMENT
OF PRINCIPAL OF, OR INTEREST OR PREMIUM ON, THE TERM LOANS (WHETHER UNDER THIS
AGREEMENT OR PURSUANT TO THE GUARANTEES) WILL BE ENFORCEMENT OF ITS RIGHTS
AGAINST THE COLLATERAL PURSUANT TO THE SECURITY DOCUMENTS.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
74
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
CALPINE CONSTRUCTION FINANCE COMPANY, L.P.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
CALPINE HERMISTON, LLC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
CPN HERMISTON, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
HERMISTON POWER PARTNERSHIP
By: /s/ ▇▇▇▇▇ ▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
1
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Administrative Agent, Sole Lead
Arranger, Syndication Agent and a Lender
By: /s/ ▇▇ ▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
Authorized Signatory
2
APPENDIX A
to Credit and Guarantee Agreement
Initial Term Loan Commitments
Lender Term Loan Commitment Pro Rata Share
------ -------------------- --------------
▇▇▇▇▇▇▇ Sachs Credit Partners L.P. $385,000,000.00 100%
Total $385,000,000.00 100%
▇
▇▇▇▇▇▇▇▇ ▇
to Credit and Guarantee Agreement
Notice Addresses
Administrative Agent's
Principal Office: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Sole Lead Arranger: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Obligors: Calpine Construction Finance
Company, L.P.
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Collateral Agent: Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
2