Exhibit 4.4
EXECUTION COPY
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CONSTRUCTION PERIOD LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
Dated as of June 1, 1999
among
AES IRONWOOD, L.L.C.,
as Company,
DRESDNER BANK AG, NEW YORK BRANCH,
as the Issuing Bank, a Bank and Agent
and
THE BANKS PARTY HERETO
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Table of Contents
Page
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ARTICLE I DEFINITIONS..........................................................1
SECTION 1.1 DEFINITIONS...............................................1
SECTION 1.2 CONSTRUCTION..............................................5
ARTICLE II CP LETTER OF CREDIT.................................................6
SECTION 2.1 COMMITMENTS...............................................6
SECTION 2.2 AMOUNT AND TERM OF CP LETTER OF CREDIT....................6
SECTION 2.3 PARTICIPATION IN CP LETTER OF CREDIT......................6
SECTION 2.4 DRAWING AND REIMBURSEMENT.................................6
SECTION 2.5 FEES......................................................7
SECTION 2.6 INTEREST..................................................7
SECTION 2.7 REPAYMENT................................................10
SECTION 2.8 PREPAYMENTS..............................................10
SECTION 2.9 SECURITY.................................................10
SECTION 2.10 PAYMENTS.................................................10
SECTION 2.11 COMPUTATION OF INTEREST AND FEES.........................11
SECTION 2.12 PAYMENTS ON NON-BUSINESS DAYS............................11
SECTION 2.13 SHARING OF PAYMENTS, ETC.................................11
SECTION 2.14 EVIDENCE OF DEBT.........................................12
SECTION 2.15 INCREASED COSTS AND REDUCED RETURNS......................12
SECTION 2.16 CAPITAL ADEQUACY.........................................14
SECTION 2.17 TAXES....................................................14
SECTION 2.18 ILLEGALITY...............................................16
SECTION 2.19 ASSIGNMENTS BY BANKS.....................................17
SECTION 2.20 REDUCTION IN COMMITMENTS/REIMBURSEMENTS..................17
SECTION 2.21 RIGHT OF SET-OFF.........................................17
ARTICLE III CONDITIONS PRECEDENT..............................................18
SECTION 3.1 CONDITIONS PRECEDENT TO THE CLOSING DATE.................18
SECTION 3.2 [RESERVED]...............................................19
ARTICLE IV REPRESENTATIONS AND WARRANTIES.....................................19
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF COMPANY................19
SECTION 4.2 REPRESENTATIONS AND WARRANTIES OF THE ISSUING BANK.......19
ARTICLE V COVENANTS...........................................................20
SECTION 5.1 COVENANTS................................................20
ARTICLE VI DEFAULTS AND REMEDIES..............................................20
SECTION 6.1 EVENTS OF DEFAULT........................................20
SECTION 6.2 REMEDIES.................................................20
SECTION 6.3 COLLATERALIZATION UPON ACCELERATION OF THE BONDS.........21
ARTICLE VII CHARACTER OF OBLIGATIONS..........................................21
SECTION 7.1 OBLIGATIONS ABSOLUTE.....................................21
SECTION 7.2 LIMITED LIABILITY OF AGENT AND BANKS.....................22
ARTICLE VIII THE AGENT........................................................22
SECTION 8.1 AUTHORIZATION AND ACTION.................................22
SECTION 8.2 AGENT'S RELIANCE, ETC....................................23
SECTION 8.3 THE AGENT, THE ISSUING BANK AND AFFILIATES...............23
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Table of Contents
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SECTION 8.4 BANK CREDIT DECISION.....................................24
SECTION 8.5 INDEMNIFICATION..........................................24
SECTION 8.6 SUCCESSOR AGENT..........................................24
SECTION 8.7 COLLATERAL...............................................25
ARTICLE IX MISCELLANEOUS......................................................25
SECTION 9.1 AMENDMENTS, ETC..........................................25
SECTION 9.2 NOTICES, ETC.............................................26
SECTION 9.3 NO WAIVER, REMEDIES......................................26
SECTION 9.4 COSTS AND EXPENSES.......................................26
SECTION 9.5 APPLICATION OF MONEY.....................................27
SECTION 9.6 SEVERABILITY.............................................27
SECTION 9.7 NON-RECOURSE LIABILITY...................................27
SECTION 9.8 BINDING EFFECT...........................................28
SECTION 9.9 ASSIGNMENTS AND PARTICIPATIONS...........................28
SECTION 9.10 INDEMNIFICATION..........................................29
SECTION 9.11 GOVERNING LAW; SUBMISSION OF JURISDICTION; VENUE;
WAIVER OF JURY TRIAL.....................................30
SECTION 9.12 HEADINGS.................................................31
SECTION 9.13 EXECUTION IN COUNTERPARTS................................31
Exhibit A Form of CP Letter of Credit
Exhibit B Form of CP LOC Loan Promissory Note
Exhibit C Form of Assignment and Acceptance
Exhibit D Amortization Schedule
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CONSTRUCTION PERIOD LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
This Construction Period Letter of Credit and Reimbursement Agreement,
dated as of June 1, 1999 (this "Agreement"), is entered into by and among (1)
AES IRONWOOD, L.L.C., a Delaware limited liability company (the "Company"); (2)
DRESDNER BANK AG, NEW YORK BRANCH, as the Issuing Bank (the "Issuing Bank"); (3)
DRESDNER BANK AG, NEW YORK BRANCH, in its individual capacity, together with
each other bank that becomes a party hereto pursuant to Section 9.9 (each,
including the Issuing Bank, a "Bank" and collectively, the "Banks"); and (4)
DRESDNER BANK AG, NEW YORK BRANCH, as agent for the Banks (in such capacity,
together with its successors in such capacity, the "Agent").
WHEREAS, the Company is constructing and will own a gas-fired combined
cycle electric generating facility in South Lebanon Township, Lebanon County,
Pennsylvania, with a net design capacity of approximately 705 megawatts and
related property and facilities;
WHEREAS, the Company intends to finance the construction and equipping
of the Facility primarily through the issuance of the Bonds, the net proceeds of
which shall be received by the Company and shall be used to pay project costs
related to the Facility;
WHEREAS, the Company has duly authorized the creation and issuance of
the Bonds pursuant to the Indenture; and
WHEREAS, the Company has requested that the Issuing Bank agree to issue
and the Banks participate in, and the Issuing Bank is willing to agree to issue
and the Banks are willing to participate in, the CP Letter of Credit upon the
terms and conditions hereinafter set forth.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
(a) Capitalized terms used but not otherwise defined herein shall have
the respective meanings ascribed to them in the Indenture.
(b) The following terms are used in this Agreement with the following
respective meanings:
"Adjusted Base Rate" means the higher of (i) the Federal Funds Rate
plus .50% and (ii) the Reference Rate.
"Assignment and Acceptance" means an Assignment and Acceptance entered
into by a Bank and another Person, substantially in the form of Exhibit C.
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"Bank" has the meaning set forth in the preamble of this Agreement.
"Base Rate Loan" means a CP LOC Loan, or a portion thereof, bearing
interest at a rate determined with reference to the Adjusted Base Rate.
"Business Day" means a day (other than a Saturday or Sunday) on which
banks are open for business in New York, New York, and with respect to all
notices and determinations in connection with, advances of, continuations of,
conversions from and to, and payments of principal and interest on, Eurodollar
Rate Loans, any day that is also a day for trading by and between banks in U.S.
dollar deposits in the London interbank Eurodollar market.
"Closing Date" means the date on which the conditions precedent set
forth in Section 3.1 have been fulfilled.
"Commitment" of a Bank means (i) the amount set forth opposite such
Bank's name on the signature pages hereof or, if such Bank has entered into one
or more Assignments and Acceptances, set forth for such Bank in the register
maintained by the Agent for such purpose, as the same may be reduced from time
to time in accordance with the provisions of this Agreement or (ii) as the
context may require, the obligation of such Bank to make loans in an aggregate
amount of principal not exceeding such amount.
"Commitments" means all of the Commitments.
"Company" has the meaning set forth in the preamble of this Agreement.
"CP Letter of Credit" means a letter of credit in favor of the
Collateral Agent substantially in the form of Exhibit A, issued or to be issued
by the Issuing Bank.
"CP LOC Loan" has the meaning set forth in Section 2.4.
"CP LOC Loan Note" has the meaning set forth in Section 2.14(a).
"CP LOC Loan Required Payment Date" means, in respect of each CP LOC
Loan, the date ten (10) years from the date such CP LOC Loan is made by the
Banks pursuant to the terms of this Agreement.
"Credit Documents" means this Agreement, the Security Documents, the
Collateral Agency Agreement, the CP LOC Loan Note and the CP Letter of Credit.
"Default" means an event that with the giving of any required notice
and/or the lapse of any required time would constitute an Event of Default.
"Dollars" and "$" means freely transferable United States dollars.
"Drawing" means a drawing under the CP Letter of Credit.
"Eurocurrency Liabilities" has the meaning set forth in Regulation D.
"Eurocurrency Reserve Period" has the meaning set forth in Section
2.15(b).
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"Eurodollar Rate" means, for any Interest Period with respect to a
Eurodollar Rate Loan, the rate per annum equal to the average (rounded upwards,
if necessary, to the nearest 1/100 of 1%) of the offered rates which appear on
the Telerate page 3750, British Bankers Association Interest Settlement Rates
for deposits in Dollars (or such other system for the purpose of displaying
rates of leading reference banks in the London interbank market, as designated
by the Agent) as of 11:00 a.m. (London time) on the day two Business Days prior
to the first day of such Interest Period in an amount approximately equal to the
principal amount of the Eurodollar Rate Loan to which such Interest Period is to
apply and for a period of time comparable to such Interest Period.
"Eurodollar Rate Loan" means a CP LOC Loan, or a portion thereof,
bearing interest at a rate determined with reference to the Eurodollar Rate.
"Event of Default" has the meaning set forth in Section 6.1.
"Excluded Taxes" has the meaning set forth in Section 2.17(a).
"Expiration Date" means the earlier of (i) the date on which the CP LOC
Provider receives notice from the Company that the Commercial Operation Date has
occurred, (ii) four years from the Issue Date and (iii) the 30th day after
written notice of termination of the CP Letter of Credit is given by the Agent
to the Collateral Agent and the Power Purchaser upon the occurrence of an Event
of Default; provided, however, that if the Company replaces the CP Letter of
Credit with substitute collateral in accordance with the requirements of the
Power Purchase Agreement, the Expiration Date of the CP Letter of Credit shall
be the date upon which the CP LOC Provider receives notice of such replacement.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.
"Indemnified Party" has the meaning set forth in Section 9.10.
"Interest Period" means with respect to each Eurodollar Rate Loan, a
period commencing on the date specified in the applicable Notice of Interest
Rate Election and ending one, three or six calendar months thereafter, as the
Company may elect in the applicable Notice of Interest Rate Election; provided,
that:
(a) any Interest Period which would otherwise end on a day which is not
a Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
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(b) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month;
(c) no Interest Period shall be selected to be applicable to a CP LOC
Loan or portion thereof if such Interest Period ends after the next scheduled
principal payment date pursuant to this Agreement and the CP LOC Loan Note
unless, at the time of such selection, there are outstanding Base Rate Loans
and/or Eurodollar Rate Loans the Interest Period(s) applicable to which end on
or before such scheduled payment date which the Company reasonably determines
are in an aggregate principal amount at least equal to the amount of such next
scheduled principal payment; and
(d) no Interest Period shall end after the CP LOC Loan Required Payment
Date.
"Issuing Bank" has the meaning set forth in the preamble of this
Agreement.
"Loan Obligations" means the Drawing and the principal of all CP LOC
Loans (including but not limited to the Company's obligations in respect of
amounts not yet disbursed).
"Non-Recourse Party" has the meaning specified in Section 9.7.
"Notice of Interest Rate Election" has the meaning set forth in Section
2.6(b).
"Obligations" means all of the Loan Obligations and any and all other
obligations of the Company to the Issuing Bank, the Banks or the Agent under or
in connection with the Credit Documents whether for interest, fees, expenses,
indemnification or otherwise.
"Participant" has the meaning set forth in Section 9.9(b).
"Percentage Interest" means, for each Bank, the fraction, expressed as
a percentage, where the numerator is the Commitment of such Bank and the
denominator is the aggregate of all the Commitments held by all the Banks, as
set forth on the signature page opposite the name and signature of each
respective Bank or if applicable, in Schedule 1 to any Assignment and
Acceptance.
"Purchasing Bank" has the meaning set forth in Section 9.9(a).
"Quarterly Date" means each Bond Payment Date during the term of this
Agreement.
"Reference Rate" means the variable rate of interest per annum
officially announced or published by the Agent from time to time as its
"reference rate," such rate being set by the Agent as a general reference rate
of interest, taking into account such factors as the Agent may deem appropriate,
it being understood that many of the Agent's commercial or other loans are
priced in relation to such rate, that it is not necessarily the lowest or best
rate actually charged to any customer and that the Agent may make various
commercial or other loans at rates of interest having no relationship to such
rate. For purposes of this Agreement, each change in the Reference Rate shall be
effective as of the opening of business on the date announced as the effective
date of the change in such "reference rate."
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"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulatory Change" means, subsequent to the date of this Agreement,
any adoption or change in United States Federal, state or municipal or foreign
law or regulations (including Regulation D) or the adoption or change or making
of any application, interpretation, directive, request or guideline of or under
any United States Federal, state or municipal or foreign law or regulations by
any court, central bank or Governmental Authority.
"Required Banks" means, at any time, Banks (one of which shall be the
Agent) owed at least 66-2/3% of the sum of Loan Obligations then outstanding
and/or the Commitments; provided, however, that, if and so long as there are
only two Banks, then "Required Banks" shall mean both of such Banks.
"Stated Amount" means $30,000,000.
"Taxes" means any and all present or future income, stamp, transfer,
turnover and other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, and any and all interest, penalties, claims or
other liabilities arising under or relating thereto, including those imposed on
any of the Banks or on payments to be made to or received by any of them from
the Company hereunder.
"Termination Notice" has the meaning set forth in Section 2.2(b).
SECTION 1.2 Construction.
In this Agreement, unless expressly specified to the contrary: the
singular includes the plural and the plural the singular; words importing any
gender include the other genders; references to statutes or regulations are to
be construed as including all statutory or regulatory provisions consolidating,
amending or replacing the statute or regulation referred to; references to
"writing" include printing, typing, lithography and other means of reproducing
words in a tangible, visible form, but shall not include electronic mail; the
words "including," "includes" and "include" shall be deemed to be followed by
the words "without limitation;" references to articles, sections (or
subdivisions of sections), recitals, appendices, exhibits, annexes or schedules
are to those of this Agreement; references to agreements and other instruments
shall be deemed to include all amendments and other modifications to such
agreements and instruments, but only to the extent such amendments and other
modifications are not prohibited by the terms of this Agreement; references to
Persons include their respective permitted successors and assigns and, in the
case of Governmental Authorities, Persons succeeding to their respective
functions and capacities; and all accounting terms used in this Agreement shall
be interpreted, all accounting determinations under this Agreement shall be made
and all financial statements required to be delivered under this Agreement shall
be prepared in accordance with GAAP as in effect from time to time, on a basis
consistent with the most recent audited financial statements, if any, of the
relevant Person delivered to the Agent, or otherwise reasonably acceptable to
the Agent.
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ARTICLE II
CP LETTER OF CREDIT
SECTION 2.1 Commitments.
Each Bank irrevocably agrees severally, on the terms and conditions
contained in this Agreement, to participate in the CP Letter of Credit and in
the Drawing thereunder in the Percentage Interest of such Bank and in an
aggregate amount not to exceed at any time such Bank's Commitment.
SECTION 2.2 Amount and Term of CP Letter of Credit.
(a) Subject to the terms and conditions contained in this Agreement,
the Issuing Bank irrevocably agrees to issue the CP Letter of Credit on the
Closing Date for the account of the Company and in a face amount not to exceed
the Stated Amount. The conditions precedent to the Issue Date are set forth in
Section 3.2.
(b) The Issuing Bank shall have the right, upon the occurrence and
during the continuance of an Event of Default, to deliver to the Collateral
Agent and the Power Purchaser a notice in the form of Annex 2 to the CP Letter
of Credit (a "Termination Notice"), which notice shall be given at least thirty
(30) days prior to the date of termination referred to in such notice.
(c) The Agent shall, solely for informational purposes, deliver to the
Company a copy of any Termination Notice given to the beneficiary under the CP
Letter of Credit; provided, however, that the Issuing Banks' ability to
terminate the CP Letter of Credit shall not be contingent upon the Agent's
delivery to the Company of such notice and that neither the Agent nor the Banks
shall incur any liability whatsoever as a result of the Agent's failure to
deliver such notice to the Company.
SECTION 2.3 Participation in CP Letter of Credit.
Simultaneously with the issuance of the CP Letter of Credit, the
Issuing Bank shall be deemed to have sold and transferred to each Bank, and each
Bank shall be deemed to have purchased and received from the Issuing Bank, in
each case irrevocably and without any further action by any party, an undivided
interest and participation in the CP Letter of Credit, the Drawing and the other
Loan Obligations in respect thereof in an amount equal to such Bank's Percentage
Interest therein. The Agent shall promptly advise each Bank of any cancellation
or other termination of the CP Letter of Credit and any Drawing; provided,
however, that failure to provide such notice shall not limit or impair the
rights of the Agent hereunder or under the Financing Documents.
SECTION 2.4 Drawing and Reimbursement.
The payment by the Issuing Bank of the Drawing shall constitute the
making by the Issuing Bank of a loan to the Company in the amount of such
payment. In the event that the Drawing is not repaid by the Company by 10:00
a.m. (New York City time), on the day of such
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Drawing, the Agent shall promptly notify each other Bank. Each such Bank
(including the Issuing Bank in its capacity as a Bank) shall, on the day of such
notification, make a loan to the Company, which shall be used to repay the
applicable portion of the Issuing Bank's loan with respect to the Drawing, in an
amount equal to the amount of such Bank's Percentage Interest in the Drawing,
for application to repay the Issuing Bank (such loan by a Bank to be referred to
as a "CP LOC Loan"), and shall deliver to the Agent for the Issuing Bank's
account, on the day of such notification and in immediately available funds, the
amount of such loan. In the event that any Bank fails to make available to the
Agent for the account of the Issuing Bank the amount of such CP LOC Loan, the
Issuing Bank shall be entitled to recover such amount on demand from such Bank
together with interest thereon at the Federal Funds Rate and until such
reimbursement is made, the unreimbursed amount of the Issuing Bank's loan shall
be deemed to be a CP LOC Loan for all purposes under this Agreement.
SECTION 2.5 Fees.
The Company shall pay the following fees to the Agent for the
respective accounts of the Persons specified below:
(a) on the Closing Date, for the account of the Issuing Bank, an
upfront fee equal to the product of (x) the Stated Amount and (y) 1.0% per
annum;
(b) from and including the Closing Date, for the respective accounts of
the Banks, a letter of credit fee equal to the product of (x) the Stated Amount
and (y) 1% per annum, payable quarterly in arrears on each Quarterly Date
occurring after the Closing Date; and
(c) from and including the Closing Date, for the account of the Issuing
Bank, a fronting fee equal to the product of (x) the Stated Amount and (y) 0.15%
per annum, payable quarterly in arrears on each Quarterly Date occurring after
the Closing Date.
SECTION 2.6 Interest.
(a) Rate. The Company shall pay interest on the unpaid principal amount
of each CP LOC Loan from the date such CP LOC Loan is made until such principal
amount has been paid in full as follows:
(i) Base Rate Loans. As to Base Rate Loans, at a rate per
annum equal to the sum of (x) the Adjusted Base Rate plus (y) 1%,
payable monthly in arrears on the first Business Day of each month; and
(ii) Eurodollar Rate Loans. As to Eurodollar Rate Loans, at a
rate per annum equal to the sum of (x) the Eurodollar Rate plus (y) 2%,
payable on the last day of the applicable Interest Period or, if such
Interest Period exceeds three months, at intervals of three months from
the first day of such Interest Period.
(b) Method of Electing Interest Rates.
(i) Each CP LOC Loan shall constitute a Base Rate Loan unless
the Company elects otherwise pursuant to the following provisions of
this Section 2.6(b).
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(ii) Each CP LOC Loan shall constitute a Base Rate Loan or a
Eurodollar Rate Loan as the Company may elect in accordance with this
Section 2.6(b). If no such election is timely made with respect to a CP
LOC Loan, such CP LOC Loan shall initially constitute a Base Rate Loan
in accordance with Section 2.6(b)(i). The Company may from time to time
elect to change or continue the interest rate borne by each CP LOC
Loan, subject to the conditions set forth below, as follows:
(A) with respect to CP LOC Loans that are Base Rate
Loans, the Company may elect to convert all or any portion of
such CP LOC Loans to Eurodollar Rate Loans as of any Business
Day; and
(B) with respect to CP LOC Loans that are Eurodollar
Rate Loans, the Company may elect to convert all or any
portion of such CP LOC Loans to Base Rate Loans or elect to
continue all or any portion of such CP LOC Loans as Eurodollar
Rate Loans for an additional Interest Period, in each case
effective on the last day of the then current Interest Period
applicable to such CP LOC Loans.
Each such election shall be made by delivering a notice (a "Notice of
Interest Rate Election") to the Agent (1) in the case of a conversion
to or continuation of a Eurodollar Rate Loan, not later than 10:00 a.m.
(New York City time) on the third Business Day prior to the day on
which such conversion or continuation is to be effective or (2) in the
case of a conversion to a Base Rate Loan, at any time prior to the day
on which such conversion is to be effective. Each Notice of Interest
Rate Election shall be in writing (including facsimile transmission) or
by voice, promptly confirmed in writing. A Notice of Interest Rate
Election may, if it so specifies, apply to only a portion of the
aggregate principal amount of the relevant CP LOC Loan.
(iii) Each Notice of Interest Rate Election shall specify:
(A) the CP LOC Loan (or portion thereof) together
with the amount of each thereof, to which such notice applies;
(B) the date on which the conversion or continuation
selected in such notice is to be effective, which shall comply
with the applicable clause of subsection (ii) above;
(C) if CP LOC Loans are to be converted, each new
type of CP LOC Loan together with the amount thereof, and if
such new CP LOC Loans are Eurodollar Rate Loans, the duration
of the initial Interest Period applicable thereto; and
(D) if such CP LOC Loans are to be continued as
Eurodollar Rate Loans for additional Interest Periods, the
duration of such Interest Periods.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period. No conversion
into or continuation of a Eurodollar Rate Loans shall be permitted when a
Default or an Event of Default has occurred and is continuing, and if a Default
or an Event of Default has occurred and is continuing, each
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Eurodollar Rate Loan shall automatically be converted into a Base Rate Loan on
the last day of the then current Interest Period applicable thereto.
(iv) A Notice of Interest Rate Election shall not be revocable
by the Company. If the Company fails to deliver a timely Notice of
Interest Rate Election to the Agent for any Eurodollar Rate Loan, such
CP LOC Loans shall be converted into Base Rate Loans on the last day of
the then current Interest Period applicable thereto.
(v) Anything to the contrary in this Agreement
notwithstanding, at no time shall there be outstanding more than four
different Interest Periods applicable to the CP LOC Loans, and
Eurodollar Rate Loans that bear a single Interest Period shall not be
less than $1 million and shall be in integral multiples of $100,000.
(c) Funding Losses. If the Company makes any payment of principal with
respect to any Eurodollar Rate Loan or any Eurodollar Rate Loan is converted to
a Base Rate Loan on any day other than the last day of an Interest Period
applicable thereto, or if the Company fails to borrow, repay or prepay any
Eurodollar Rate Loan after notice has been given to the Agent in accordance with
the terms hereof, the Company shall reimburse the Agent, for the ratable account
of the Banks, within 30 days after demand for any resulting loss or expense
incurred by them, including any loss incurred in obtaining, liquidating or
employing deposits from third parties. Without prejudice to the foregoing, the
Company shall indemnify the Agent and the Banks against any direct (as opposed
to consequential) loss or expense that the Agent or the Banks may sustain or
incur as a consequence of a failure by the Company in payment of principal of,
or interest on, any Eurodollar Rate Loan, or any part thereof, including any
interest, premium or penalty paid by the Agent or any Bank to lenders of funds
borrowed by it or deposited with it for the purpose of making or maintaining
such Eurodollar Rate Loan. A certificate as to the amount of any such loss or
expense in reasonable detail (specifying the basis of such loss or expense)
shall be promptly submitted by the Agent, or by any Bank through the Agent, to
the Company and shall be conclusive and binding as to the amount thereof, absent
manifest error.
(d) Basis for Determining Interest Rate Inadequate or Unfair. If on or
prior to the first day of any Interest Period for any Eurodollar Rate Loan:
(i) the Agent or any Bank determines, in its reasonable
judgment, that deposits in Dollars (in the applicable amounts) are not
being offered to the Agent or such Bank in the relevant market for such
Interest Period, or
(ii) the Agent or such Bank, in its reasonable judgment, shall
determine that the Eurodollar Rate will not adequately and fairly
reflect the cost to the Agent or such Bank of funding its Eurodollar
Rate Loans for such Interest Period,
the Agent, or such Bank through the Agent, shall forthwith give notice thereof
(which notice shall describe in reasonable detail the basis for such
determination) to the Company, whereupon until the Agent, or such Bank through
the Agent, notifies the Company that the circumstances giving rise to such
suspension no longer exist, (A) the obligations of the Agent or such Bank to
make Eurodollar Rate
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Loans or to convert outstanding CP LOC Loans into Eurodollar Rate Loans shall be
suspended and (B) each outstanding Eurodollar Rate Loan or, if only a Bank shall
be affected, each Eurodollar Rate Loan held by such Bank shall be converted into
a Base Rate Loan on the last day of the then current Interest Period applicable
thereto.
(e) Maximum Rate. This Agreement is hereby expressly limited so that in
no contingency or event, whether by reason of acceleration of the maturity of
any indebtedness hereunder or otherwise, shall the interest contracted for or
charged or received by the Banks exceed the maximum amount permissible under
Applicable Law. If, from any circumstance whatsoever, interest would otherwise
be payable to the Banks in excess of the maximum lawful amount, the interest
payable to the Banks shall be reduced to the maximum amount permitted under
Applicable Law, and the amount of interest for any subsequent period, to the
extent less than that permitted by Applicable Law, shall to that extent be
increased by the amount of such reduction.
SECTION 2.7 Repayment.
On each Quarterly Date, the Company shall repay the principal amount of
each CP LOC Loan in accordance with Exhibit D to this Agreement. Each CP LOC
Loan shall mature and be repaid in full on the applicable CP LOC Loan Required
Payment Date.
SECTION 2.8 Prepayments.
The Company may, at any time and from time to time on any Business Day,
upon prior written notice to the Agent not later than 11:00 a.m. (New York City
time), at least one Business Day before the day of any prepayment of the CP LOC
Loans, such notice stating the proposed date and aggregate principal amount of
the prepayment, and if such notice is given the Company shall, prepay without
premium or penalty, except as provided in Section 2.6(c), the outstanding
principal amounts of the CP LOC Loans in whole or in part, together with accrued
interest to the date of such prepayment on the principal amount prepaid.
All prepayments made hereunder shall be applied by the Agent and the
Banks against the principal amount of outstanding CP LOC Loans in inverse order
of maturity; provided, that such prepayments shall first be applied to the
prepayment of outstanding Base Rate Loans to the extent thereof and then to the
prepayment of outstanding Eurodollar Rate Loans.
SECTION 2.9 Security.
The Obligations shall be secured by the Security Documents, the rights
and remedies in respect of which shall be exercised pursuant to the Collateral
Agency Agreement.
SECTION 2.10 Payments.
(a) The Company shall make each payment hereunder and under the CP LOC
Loan Note not later than 10:00 a.m. (New York City time), on the day when due to
the Agent at its address set forth in Section 9.2, in Dollars in immediately
available funds. The Agent will promptly thereafter cause to be distributed like
funds relating to the payment of principal (including reimbursement of the
Drawing), interest or fees ratably (other than amounts payable for the account
of the Issuing Bank pursuant to Section 2.5(a) and (c), which shall be payable
10
solely to the Issuing Bank, or payable pursuant to Section 9.4) to the Banks and
like funds relating to the payment of any other amount payable to any Bank to
such Bank, in each case to be applied in accordance with the terms of this
Agreement. The Agent may withhold from any interest payment to any Bank an
amount equal to any applicable withholding tax (including upon the failure of
any Bank to provide the forms or other documentation required under Section
2.17(e)).
(b) Unless the Agent receives notice from the Company before the date
on which any payment is due to the Banks hereunder that the Company will not
make such payment in full, the Agent may assume that the Company has made such
payment in full to the Agent on such date, and the Agent may, in reliance upon
such assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due to such Bank. If and to the extent that the Company
has not so made such payment in full to the Agent on the date on which such
payment is due, each Bank agrees, irrevocably and without qualification or
exception, to repay to the Agent forthwith on demand such amount distributed to
such Bank together with interest thereon, for each day from the date such amount
is distributed to such Bank until the date on which such Bank repays such amount
to the Agent, at the Federal Funds Rate.
(c) All payments made by the Company to each of the Banks and the Agent
under this Agreement and the CP LOC Loan Note will be made without set-off,
counterclaim or other defense.
SECTION 2.11 Computation of Interest and Fees.
All computations of interest and fees hereunder shall be made on the
basis of a year of 360 days for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest
or fees are payable. Each calculation and each determination by the Agent of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.
SECTION 2.12 Payments on Non-Business Days.
Whenever any payment hereunder or under the CP LOC Loan Note is stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be.
If no due date is specified for the payment of any amount payable by the Company
hereunder, such amount shall be due and payable not later than 10 Business Days
after receipt by the Company of written demand from the Agent for payment
thereof.
SECTION 2.13 Sharing of Payments, Etc.
(a) Each Bank agrees that if, as a result of the exercise of a right of
set-off, banker's lien or counterclaim or other similar right or the receipt of
a secured claim, it receives any payment in respect of the CP LOC Loans or other
Obligations hereunder it shall promptly notify the Agent thereof (and the Agent
shall promptly notify the other Banks). If, as a result of such payment, such
Bank receives a greater percentage of the Obligations owed to it under this
Agreement than the percentage received by any other Bank, such Bank shall
purchase a
11
participation (which it shall be deemed to have purchased simultaneously upon
the receipt of such payment) in the Obligations then held by such other Banks so
that all such recoveries of principal and interest with respect to all
Obligations owed to each Bank shall be pro rata on the basis of its respective
amount of such Obligations owed to all Banks; provided, that if all or part of
such proportionately greater payment received by such purchasing Bank is
thereafter recovered by or on behalf of the Company from such Bank, such
purchase shall be rescinded and the purchase price paid for such participation
shall be returned to such Bank to the extent of such recovery, but without
interest.
(b) Each Bank which receives a secured claim as described in subsection
(a) above shall, to the extent practicable, exercise its rights in respect of
such secured claim in accordance with such subsection (a) and otherwise in a
manner consistent with the rights of the Banks entitled under this Section 2.13
to share in the benefits of any recovery on such secured claim.
(c) The Company expressly consents to the foregoing arrangements and
agrees that any holder of a participation in any Obligation so purchased or
otherwise acquired of which the Company has received notice may exercise any and
all rights of set-off, banker's lien or counterclaim with respect to any and all
monies owing by the Company to such holder as fully as if such holder were a
holder of such Obligation in the amount of the participation held by such
holder.
SECTION 2.14 Evidence of Debt.
(a) The indebtedness of the Company resulting from all CP LOC Loans
shall be evidenced by this Agreement and the promissory note substantially in
the form of Exhibit B (the "CP LOC Loan Note"), delivered by the Company to the
Agent for the benefit of the Banks in accordance with the terms hereof.
(b) The books and accounts of the Agent shall be conclusive evidence,
absent manifest error, of the amounts of the Drawing, all CP LOC Loans, fees,
interest and other amounts advanced, due, outstanding, payable or paid pursuant
to this Agreement or the CP LOC Loan Note.
SECTION 2.15 Increased Costs and Reduced Returns.
(a) If, on or after the date hereof, the adoption of any Applicable
Law, or any change therein, or any change 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 the Agent or any Bank with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency:
(i) shall subject the Agent or such Bank to any tax, duty or
other charge (other than routine examination fees or Taxes) with
respect to the Eurodollar Rate Loans, the CP LOC Loan Note or its
obligation to make or continue Eurodollar Rate Loans, or shall change
the basis of taxation of payments to the Agent or any Bank of the
principal of or interest on its Eurodollar Rate Loans or any other
amounts due under this Agreement in respect of its Eurodollar Rate
Loans or its obligation to make or continue Eurodollar Rate Loans
(except for changes in the rate of tax on the net income of the
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Agent or such Bank imposed by the federal, state or local jurisdiction
in which the Agent's or such Bank's principal executive office is
located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including any such requirement
imposed by the Board of Governors of the Federal Reserve System, but
excluding with respect to any Eurodollar Rate Loan any such requirement
provided in Section 2.17(b), against assets of, deposits with or for
the account of, or credit extended by, the Agent or any Bank or shall
impose on the Agent or any Bank or on the London interbank market any
other condition affecting the Eurodollar Rate Loans, the CP LOC Loan
Note or its obligation to advance Eurodollar Rate Loans;
and the result of any of the foregoing is to increase the cost to the Agent or
such Bank of making or continuing any Eurodollar Rate Loan or to reduce the
amount of any sum received or receivable by the Agent or such Bank under this
Agreement or under the CP LOC Loan Note with respect thereto by an amount deemed
by the Agent or such Bank to be material, then the Agent, or such Bank through
the Agent, shall deliver to the Company as promptly as practicable a certificate
setting forth in reasonable detail the additional amounts that the Agent or such
Bank, as the case may be, determines will fully compensate it for such
reduction, increased cost or payment and the basis for the determination of such
amount; provided, that the Company shall not be obligated to compensate the
Agent or any Bank for the amount of such increased cost incurred with respect to
a period of time prior to the date which is 90 days before the date on which the
Agent first notifies the Company of a claim for such compensation or that an
event had occurred which will entitle the Agent or a Bank to such compensation.
Any such amount claimed by the Agent or any Bank shall, in the case of clause
(i) above, be net of applicable tax savings, if any, directly attributable
thereto. Within 30 days after demand by the Agent, the Company shall pay to the
Agent, for its account or for the account of the applicable Bank, as the case
may be, such additional amount shown as due on any such certificate, absent
manifest error.
(b) In the event that the Agent or any Bank shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
on all the parties hereto) at any time that the Agent or such Bank is required
to maintain reserves in respect of Eurocurrency Liabilities during any period
during which any CP LOC Loan owing to it bears interest based on the Eurodollar
Rate (each such period, for the Agent or such Bank, a "Eurocurrency Reserve
Period"), but only in respect of any period during which any reserve shall
actually be maintained by the Agent or such Bank for any Eurodollar Rate Loan as
a result of a reserve requirement applicable to it under Regulation D in
connection with Eurocurrency Liabilities, then the Agent, or such Bank through
the Agent, shall promptly give notice to the Company of such determination, and
the Company shall directly pay to the Agent, for its account or for the account
of the applicable Bank, as the case may be, additional interest on the unpaid
principal amount of such CP LOC Loan during such Eurocurrency Reserve Period at
a rate per annum which shall, during each monthly period applicable to such CP
LOC Loan, be the amount by which (x) the Eurodollar Rate for such monthly period
divided (and rounded upward to the next whole multiple of 1/100 of 1%) by a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including any marginal, emergency, supplemental, special or other
reserves) applicable to the Agent or such Bank in respect of Eurocurrency
Liabilities exceeds (y) the Eurodollar Rate for such monthly period. The Agent,
or such Bank through the Agent, shall
13
furnish along with such notice a certificate setting forth in reasonable detail
the cost actually incurred to maintain such reserves and the basis for the
determination of such amount; provided, that the Company shall not be obligated
to compensate the Agent or any Bank for the amount of such increased cost
incurred with respect to a period of time prior to the date which is 90 days
before the date on which the Agent first notifies the Company of a claim for
such compensation or that an event has occurred which will entitle the Agent or
a Bank to such compensation. Additional interest payable pursuant to the
immediately preceding sentence shall be paid by the Company at the time that it
is otherwise required to pay interest in respect of such CP LOC Loan, or, if
later demanded by the Agent or any Bank, promptly on demand. Each of the Agent
and the Banks agrees that, if notice is given to the Company of the existence of
a Eurocurrency Reserve Period, the Agent, or the applicable Bank through the
Agent, shall promptly notify the Company of any termination thereof, at which
time the Company shall cease to be obligated to pay additional interest to the
Agent or such Bank pursuant to the first sentence of this paragraph until such
time, if any, as a subsequent Eurocurrency Reserve Period shall occur.
(c) The Agent, and each Bank through the Agent, will promptly notify
the Company of any event of which it has knowledge, occurring after the date
hereof, which will entitle the Agent or such Bank to compensation pursuant to
this Section and will designate a different lending office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the sole judgment of the Agent or such Bank, be otherwise
disadvantageous to the Agent or such Bank.
SECTION 2.16 Capital Adequacy.
If the Agent or any Bank shall determine that, after the date hereof,
the adoption of any Applicable Law regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on capital of the Agent or such Bank or its holding company as a
consequence of the Agent's or such Bank's obligations hereunder to a level below
that which the Agent or such Bank could have achieved but for such adoption,
change, request or directive (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by the Agent or such Bank to be
material, then the Agent, or such Bank through the Agent, shall deliver to the
Company as promptly as practicable (but in no event later than 120 days after
the Agent or such Bank has actual knowledge of such claim for capital adequacy)
a certificate setting forth in reasonable detail the amount being charged by the
Agent or such Bank and the basis for the determination of such amount. Within 30
days after the delivery of such certificates by the Agent, the Company shall pay
to the Agent, for its account or for the account of the applicable Bank, as the
case may be, the amount shown as due on any such certificate.
SECTION 2.17 Taxes.
(a) Payments by the Company to the Agent and the Banks under this
Agreement and the CP LOC Loan Note will be made free and clear of and without
deduction for Taxes, other than Taxes based on the net income of the Agent or
any Bank (including franchise taxes imposed
14
in lieu of net income taxes) imposed by (i) the United States federal
government, (ii) the jurisdiction where the Agent or such Bank is organized or
has its principal office or (iii) the jurisdiction of the branch of such Bank
maintaining any CP LOC Loan or the branch of the Agent through which it renders
its services as the Agent ("Excluded Taxes"). If the Company is required by law
to deduct Taxes (other than Excluded Taxes) from such a payment, then the sum
payable under the instrument to which the payment relates will be increased so
that such deduction does not result in a diminution in the amount the Agent or
any Bank actually receives.
(b) To the extent permitted by law, without duplication of amounts paid
by the Company under Section 2.17(a), the Company hereby indemnifies and holds
harmless the Agent and each Bank from and against, and agrees to reimburse the
Agent and each Bank on an after-tax basis (computed taking into account any
deductions or other benefits available for federal income tax purposes for the
Agent or such Bank if it is a United States taxpayer and any deductions and
benefits available for income tax purposes in any jurisdiction in which the
Agent or such Bank is a taxpayer) on demand for, any and all Taxes paid or
incurred by the Agent or such Bank in connection with the transactions
contemplated by this Agreement; provided, however, that the foregoing indemnity
does not cover Excluded Taxes. Reimbursement on an "after-tax basis" means on a
basis such that the Agent or such Bank is made whole after taking into account
income taxes that the Agent or such Bank will owe on the indemnity or
reimbursement payment in any jurisdiction and any related tax benefits, assuming
the Agent or such Bank is subject to income taxes at the highest marginal rates.
Nothing in this paragraph shall interfere with the right of the Agent or any
Bank to arrange its tax affairs in whatever manner it thinks fit and, in
particular, the Agent and the Banks are under no obligation to claim a deduction
or other benefit relating to these transactions ahead of any other claim,
relief, credit, deduction or other benefit to which it is entitled. The Agent,
or applicable Bank through the Agent, shall promptly give written notice to the
Company after (but in no event later than 60 days after) the Agent or such Bank
has actual knowledge of the imposition of any Taxes subject to indemnification
hereunder; provided, however, that failure to give such notice within such 60
day period will not relieve the Company of the obligation to indemnify the Agent
or such Bank in accordance with the terms hereof, except to the extent of
interest that would have been avoided had the notice been given prior to the end
of such 60-day period.
(c) The Company will provide evidence that all Taxes imposed on
payments under this Agreement, any CP LOC Loan or the CP LOC Loan Note, have
been fully paid to the appropriate authorities by delivering official receipts
or notarized copies to the Agent within 30 days after payment. The Company will
compensate the Agent or any Bank that has to pay any Taxes because the Company
failed to timely furnish such evidence; provided, that prior to paying such
Taxes, the Agent, or such Bank through the Agent, shall have notified the
Company of its intent to make such payment.
(d) If the Company so requests promptly in writing after receipt of any
notice under Section 2.17 hereof, the Agent or applicable Bank will contest in
good faith the Taxes at the Company's expense, keep the Company fully informed
about the progress of the contest, consult in good faith with the Company's
counsel regarding conduct of the contest, and not compromise or otherwise settle
the contest without the Company's consent (which shall not be unreasonably
withheld or delayed); provided, that the Agent or such Bank may in its sole
discretion select the forum for the contest and determine whether the contest
will be by resisting payment of the
15
Taxes or by paying the Taxes and seeking a refund; provided, further that the
Agent or such Bank will be under no obligation to contest unless (A) if the
Agent or such Bank requests, the Company has provided the Agent or such Bank an
opinion of independent tax counsel selected by the Company and reasonably
acceptable to the Agent or such Bank to the effect that there is a reasonable
basis for the contest, (B) the amount in controversy is at least $75,000, (C)
the Agent or such Bank has received satisfactory indemnification and security
for any liability, loss, cost or expense arising out of the contest (including,
but not limited to, all reasonable legal and accounting fees and expenses,
penalties, interest and additions to tax), (D) if requested by the Agent or such
Bank, the Company has admitted in writing its duty to indemnify the Agent or
such Bank for the Taxes if the contest is lost (but such admission shall not
preclude the Company from raising a defense to liability if a court of competent
jurisdiction has rendered a decision articulating the cause of such Taxes, and
the cause is not one for which the Company is responsible under this Section
2.17), and (E) if the contest is conducted in a manner that requires paying all
or part of the Taxes, the Company has paid the amount required.
(e) If the Company so requests within 10 days of notice to the Company
of the imposition of any Taxes on payments to any of the Banks of a type not
generally imposed on United States or foreign lenders making advances of the
types contemplated hereunder, such Banks shall (consistent with legal and
regulatory restrictions) comply with Section 2.19 hereof.
(f) At such times as may be required by Applicable Law or as the Agent
or the Company may reasonably request, each Bank agrees that it will deliver to
the Agent and the Company duly completed forms of any applicable jurisdiction or
other documentation reasonably satisfactory to the Agent and the Company that
such Bank is entitled to receive payments under this Agreement without deduction
or withholding of income tax under the Applicable Law of such jurisdiction. Each
Bank further agrees to notify the Agent and the Company of the occurrence of any
event (including any change in treaty, law or regulation) that would render such
Bank unable to receive payments hereunder without such deduction or withholding.
The provisions of this Section 2.17(f) shall apply to any successor holder of a
CP LOC Loan Note.
SECTION 2.18 Illegality.
If, on or after the date of this Agreement, the adoption of any
Applicable Law, or any change therein, or any change 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 the Agent or any Bank with any request or directive (whether or not having
the force of law) of any such Governmental Authority, central bank or comparable
agency shall make it unlawful or impossible for the Agent or such Bank to make,
continue or convert its Eurodollar Rate Loans, the Agent, or such Bank through
the Agent, shall so notify the Company, whereupon until the Agent, or such Bank
through the Agent, notifies the Company that the circumstances giving rise to
such suspension no longer exist, the obligation of the Agent or such Bank to
make or continue Eurodollar Rate Loans, or to convert outstanding CP LOC Loans
into Eurodollar Rate Loans, shall be suspended. Before giving any notice to the
Company pursuant to this Section, the Agent or applicable Bank shall designate a
different lending office for the Eurodollar Rate Loans if such designation will
avoid the need for giving such notice and will not, in the sole judgment of the
Agent or such Bank, be otherwise
16
disadvantageous to the Agent or such Bank. If such notice is given, each
Eurodollar Rate Loan of the Agent or such Bank then outstanding shall either (i)
be converted to a Base Rate Loan on the last day of the then current Interest
Period applicable to such Eurodollar Rate Loan if the Agent or such Bank may
lawfully continue to make and continue such CP LOC Loan to such day, or (ii) be
immediately converted to a Base Rate Loan if the Agent or such Bank shall
determine that it may not lawfully continue to make and continue such CP LOC
Loan to such day; provided, that the Company shall not be obligated to make any
payment pursuant to Section 2.6(c) as a result of such conversion. If the
Company so requests within 10 days of receipt of the notice referred to above,
the applicable Bank shall (consistent with legal and regulatory restrictions)
comply with Section 2.19 hereof.
SECTION 2.19 Assignments by Banks.
In the event that (i) a Bank is required to comply with this Section
2.19 after a request from the Company pursuant to Sections 2.17 or 2.18, (ii)
the Company or the Issuing Bank requests that the provisions of this Section
2.19 apply to a Bank within 10 days after the Company receives a notice from the
Agent that (a) such Bank has failed to make available to the Agent its portion
of any CP LOC Loan on the date required to be made available to the Agent
pursuant to this Agreement after the Agent has made written demand upon such
Bank for such payment, (b) such Bank has provided the Agent with notice that
such Bank shall not make available to the Agent such portion of any CP LOC Loan
required to be made available to the Agent pursuant to this Agreement or (c)
such Bank has failed to reimburse the Agent pursuant to the terms of this
Agreement, or (iii) the Issuing Bank requests that the provisions of this
Section 2.19 apply to a Bank in the event the long-term debt rating of such Bank
shall at any time be less than a rating of "A" or the equivalent by S&P or by
▇▇▇▇▇'▇, then such Bank shall assign all or a part of its proportionate share of
the CP LOC Loans and its Commitment to a replacement Bank (which may be, but is
not required to be, one of the other Banks, and shall be subject to the prior
written consent of the Issuing Bank) designated by the Company; provided, that
any assignment or transfer made by a Bank to a replacement Bank shall
substantially be in the form of Exhibit C hereto, and any assignment of all or
part of the CP LOC Loans or other obligations with respect to the CP Letter of
Credit shall be made without recourse, representation or warranty. The Company
shall promptly pay when due all reasonable fees and expenses which such Bank
incurs in connection with such transfer or assignment and the Company shall
cause the replacement Bank to pay to the Agent for the account of the assigning
Bank in immediately available funds all amounts outstanding or payable under
this Agreement to each Bank assigning its interest in the CP LOC Loans or other
obligations with respect to the CP Letter of Credit.
SECTION 2.20 Reduction in Commitments/Reimbursements.
The Company shall have the right to refinance the Commitment and any
outstanding CP LOC Loans, if any, without premium or penalty, except as provided
in Section 2.6(c), upon at least 10 Business Days' prior written notice to the
Agent.
SECTION 2.21 Right of Set-off.
Subject to the provisions of the Collateral Agency Agreement, the
Company hereby authorizes each Bank (in addition to, and without limitation of,
any right of set-off, banker's lien
17
or counterclaim a Bank may otherwise have), upon the occurrence and during the
continuance of any Event of Default, at any time and from time to time, without
notice to the Company or any Person other than the Collateral Agent (any such
notice being hereby expressly waived by the Company to the extent it may legally
do so) to set off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held, and other
indebtedness at any time owing, by such Bank in any of its offices, wherever
located (whether such deposits or indebtedness be in dollars or in any other
currency), to or for the credit or the account of the Company against any and
all of the Obligations and liabilities of the Company now or hereafter existing
under this Agreement, irrespective of whether or not such Bank shall have made
any demand hereunder or thereunder and although such Obligations may be
contingent or unmatured.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.1 Conditions Precedent to the Closing Date.
The occurrence of the Closing Date is subject to satisfaction or waiver
of the following conditions precedent:
(a) issuance of the Bonds and submission to the Agent of duplicate
originals or certified copies of all documents submitted in connection with the
issuance of the Bonds on the Closing Date, which shall be in form and substance
satisfactory to the Agent;
(b) receipt by the Issuing Bank and the Agent of the following, in each
case in the form approved by the Agent on the Closing Date:
(i) this Agreement and the CP LOC Loan Note duly executed by
the Company;
(ii) an original of each of the Security Documents, duly
executed by the parties thereto;
(iii) a copy of each other Financing Document, certified by
the Company as to completeness and authenticity;
(iv) written opinions of counsel acceptable to the Agent,
addressed to the Agent and the Banks, and in form and substance
satisfactory to the Agent and covering such matters as the Agent may
reasonably request;
(v) evidence satisfactory to the Agent that each of the
parties to the Project Contracts, Financing Documents and Security
Documents shall have duly and irrevocably appointed a process agent to
act for and on behalf of such person, to receive summonses and other
legal process in connection with any suit, action or proceeding
relating to such documents in the jurisdictions in which it is required
to submit to such
18
jurisdiction and such appointment shall have been accepted and all fees
scheduled to accrue to each such agent for the service of process shall
have been paid in full; and
(vi) evidence satisfactory to the Agent that all actions
necessary or appropriate in order to effectively establish, create or
perfect the security interest have been duly taken.
(c) payment by the Company of all accrued fees and expenses (as
provided in Sections 2.5 and 9.4) of the Agent and the Banks (including the
reasonable accrued fees and disbursements of counsel to the Agent and the
Banks), to the extent that one or more statements for such fees and expenses
have been presented for payment.
SECTION 3.2 [Reserved].
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Representations and Warranties of Company.
The Company hereby makes for the benefit of the Agent and the Banks all
of the representations and warranties of the Company contained in Article III of
the Indenture (which representations and warranties are incorporated by
reference herein as if fully set forth herein and which representations and
warranties shall be true and correct as of the date hereof and the Closing
Date).
SECTION 4.2 Representations and Warranties of the Issuing Bank.
The Issuing Bank hereby represents and warrants to the Company and the
Agent as follows:
(a) The Issuing Bank is duly formed, validly existing and in good
standing under the laws of its jurisdiction of organization.
(b) The Issuing Bank has all necessary power and authority to execute
and deliver, and to perform its obligations under, this Agreement and the CP
Letter of Credit.
(c) All action on the part of the Issuing Bank that is required for the
authorization, execution and delivery of, and performance by the Issuing Bank of
its obligations under, this Agreement and the CP Letter of Credit has been duly
and effectively taken.
(d) This Agreement has been, and, upon issuance thereof, the CP Letter
of Credit will have been, duly executed and delivered by the Issuing Bank.
(e) This Agreement constitutes, and the CP Letter of Credit upon
issuance thereof will constitute, legal, valid and binding obligations of the
Issuing Bank, enforceable against it in accordance with the respective terms
thereof, except as such enforceability (i) may be limited by
19
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights and remedies generally and (ii)
is subject to general principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law.
ARTICLE V
COVENANTS
SECTION 5.1 Covenants.
So long as any Commitment is in effect, the CP Letter of Credit is
outstanding or the Obligations remain unpaid, the Company shall observe and
perform all of the covenants of the Company contained in Article VI of the
Indenture (which covenants are incorporated herein by reference as if fully set
forth herein.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default.
Each of the following shall constitute an "Event of Default" under this
Agreement so long as the same shall be continuing:
(a) the Company shall fail to pay any amount due under this Agreement
(including under any CP LOC Loan Note) within 15 days after the due date
thereof; or
(b) an "Event of Default" under the Indenture shall have occurred and
be continuing; or
(c) an "Event of Default" under the DSR LOC Reimbursement Agreement
shall have occurred and be continuing.
SECTION 6.2 Remedies.
Upon the occurrence and during the continuation of an Event of Default,
the Agent shall, at the request of the Required Banks, take one or more of the
following actions: (i) terminate the CP Letter of Credit, (ii) declare the
Obligations, all interest thereon and all other amounts payable under this
Agreement and the CP LOC Loan Note to be forthwith due and payable, including
but not limited to the amount of any and all CP LOC Loans which may be made upon
a Drawing under the CP Letter of Credit which occurs after the date on which the
Agent declares such amounts to be due and payable, but prior to the effective
date of termination of such CP Letter of Credit in accordance with Section
2.2(f), whereupon the Obligations, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Company or (iii) terminate the ability of the Company to continue CP LOC Loans
as, or to
20
convert CP LOC Loans to, Eurodollar Rate Loans; provided, that the Agent and the
Banks shall not have the right to exercise any other remedy hereunder or
otherwise available to the Agent or any Bank except in accordance with the
provisions of the Collateral Agency Agreement.
SECTION 6.3 Collateralization upon Acceleration of the Bonds.
In the event that an Event of Default hereunder results from an "Event
of Default" under the Indenture and the Trustee accelerates amounts due under
the Indenture, the CP LOC Provider shall be entitled to require
collateralization of the Stated Amount by having the Collateral Agent deposit
(in a separate account to be held by the Collateral Agent), at the time that any
amounts are paid to the Trustee in respect of accelerated amounts due under the
Indenture, an amount equal to the amount that would have been disbursed to the
Agent at such time (based on pro rata payment requirements) if Drawings had been
made to the full extent of the Stated Amount ("Deemed CP LOC Loans") and the
Deemed CP LOC Loans had been accelerated at the same time as an acceleration
under the Indenture. Upon a Drawing on the CP Letter of Credit, a portion of the
amount in the separate account equal to such Drawing's proportionate share of
the Stated Amount shall be transferred by the Collateral Agent to the CP LOC
Provider. The Agent, the Issuing Bank and each Bank agree that upon termination
or expiration of the CP Letter of Credit, all amounts in such separate
collateral account that have not been transferred pursuant to the previous
sentence (to the extent of such expiration or termination) shall be transferred
to the Collateral Agent.
ARTICLE VII
CHARACTER OF OBLIGATIONS
SECTION 7.1 Obligations Absolute.
The Obligations shall be absolute, unconditional and irrevocable and
shall not be affected or impaired under any circumstances whatsoever, including
the following circumstances:
(a) any lack of validity or enforceability of any provision of any
Project Contract or Financing Document;
(b) any amendment or waiver of, or any consent to departure from, any
provision of any Project Contract or Financing Document;
(c) the existence of any claim, set-off, defense or other right that
the Company may have at any time against the beneficiary of the CP Letter of
Credit (or any Person for whom such beneficiary may be acting), any Bank, the
Agent or any other Person, whether in connection with any Project Contract or
Financing Document, the transactions contemplated thereby or any unrelated
transaction;
(d) any statement or signature in any certificate or other document
presented under the CP Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect, or any such statement being untrue or
inaccurate in any respect whatsoever;
21
(e) any exchange, release or nonperfection of any Collateral or other
collateral, or any release, amendment or waiver of or consent to departure from
any Project Contract, Financing Document or any guaranty, for any of the
Obligations;
(f) payment by the Issuing Bank under the CP Letter of Credit against
presentation of a draft or certificate that does not comply with the terms of
the CP Letter of Credit; or
(g) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
SECTION 7.2 Limited Liability of Agent and Banks.
As among the Company, the Agent and the Banks (including the Issuing
Bank), the Company assumes all risks of the acts or omissions of the
beneficiaries of the CP Letter of Credit with respect to the use of the CP
Letter of Credit. Neither the Agent nor any Bank nor any of their respective
officers, directors, employees or agents shall be liable or responsible for (i)
the use that may be made of the CP Letter of Credit or any acts or omissions of
any beneficiaries of the CP Letter of Credit in connection with the CP Letter of
Credit; (ii) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any document submitted in connection with the CP Letter of Credit or
of any endorsement thereon, even if such document or endorsement should prove to
be in any or all respects invalid, insufficient, inaccurate, fraudulent or
forged; (iii) payment by the Issuing Bank against presentation of any document
that does not comply with the terms of the CP Letter of Credit, including
failure of any document to bear any reference or adequate reference to the CP
Letter of Credit; or (iv) any other circumstance whatsoever in making, delaying
to make or failing to make payment under the CP Letter of Credit; provided,
however, that the Company shall have a claim against the Issuing Bank, and the
Issuing Bank shall be liable to the Company, to the extent of any direct, as
opposed to consequential, damages suffered by the Company that the Company
proves were the result of the Issuing Bank's willful misconduct or gross
negligence in paying under the CP Letter of Credit or the Issuing Bank's willful
or grossly negligent failure to pay under the CP Letter of Credit after the
presentation to it by the beneficiary of a draft and certificate strictly
complying with the terms and conditions of the CP Letter of Credit (unless the
Issuing Bank in good faith believed itself (based upon an opinion of counsel) to
be prohibited by law or legal authority from making such payment). In
furtherance and not in limitation of the foregoing, the Issuing Bank may accept
any document that appears on its face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
ARTICLE VIII
THE AGENT
SECTION 8.1 Authorization and Action.
(a) Each Bank hereby appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Agent by the terms hereof, together with such powers as
are reasonably incidental thereto. As to any
22
matters not expressly provided for by the Credit Documents (including
enforcement of and collection under any Credit Document or other Project
Contract), the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Banks, and such instructions shall be binding upon all Banks and
the holders of any CP LOC Loan Note; provided, however, that the Agent shall not
be required to take any action that, in the Agent's sole judgment, exposes the
Agent to personal liability or that is contrary to any Credit Document or other
Project Contract or Applicable Law. In performing its function and duties
hereunder as Agent, the Agent shall act solely as the agent of the Banks and in
its capacity as Issuing Bank it shall act solely as issuer of the CP LOC Letter
of Credit, and does not assume and shall not be deemed to have assumed in either
such capacity any obligation towards or relationship of agency or trust or other
fiduciary relationship with or for the Company or any other party to any Project
Contract.
(b) Each Bank hereby authorizes the Agent in the name of and on behalf
of such Bank to sign such documents, take all such actions and perform such
obligations that the Agent deems necessary or appropriate to bind each of the
Banks under the Credit Documents and to create, perfect or maintain the
existence or perfected status of any security interest.
SECTION 8.2 Agent's Reliance, Etc.
Neither the Agent nor the Issuing Bank nor any of their directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection with any Credit Document or other
Project Contract, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the Agent and
the Issuing Bank (i) may treat any Bank that has signed an Assignment and
Acceptance as the holder of the applicable portion of the Obligations; (ii) may
consult with legal counsel (including counsel for the Company or any Affiliate),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii) makes
no warranty or representation to any Bank and shall not be responsible to any
Bank for any statements, warranties or representations made in or in connection
with any Credit Document or other Project Contract; (iv) shall not have any duty
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of any Credit Document or other Project Contract
on the part of the Company or any Affiliate or to inspect the property
(including the books and records) of the Company or any Affiliate thereof; (v)
shall not be responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Credit Document or
other Project Contract or any other instrument or document furnished pursuant
hereto or thereto; and (vi) shall incur no liability under or in respect of any
Credit Document or other Project Contract by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopier or
otherwise) believed by it to be genuine and signed or sent by the proper party
or parties.
SECTION 8.3 The Agent, the Issuing Bank and Affiliates.
With respect to its Commitment and participation in the CP Letter of
Credit, the Agent and the Issuing Bank shall have the same rights and powers
under this Agreement as any other
23
Bank and may exercise the same as though it were not the Agent or the Issuing
Bank, as the case may be; and the term "Bank" or "Banks" shall, unless otherwise
expressly indicated, include the Agent and Issuing Bank in their capacity as a
Bank (including the Issuing Bank in its capacity as such). The Agent and the
Issuing Bank and their Affiliates may accept deposits from, lend money to, act
as trustee under indentures of, and generally engage in any kind of business
with, the Company, any Affiliate thereof and any Person that may do business
with or own securities of the Company or any Affiliate thereof, all as if the
Agent and the Issuing Bank, respectively, were not the Agent and the Issuing
Bank, and without any duty to account therefor to the Banks.
SECTION 8.4 Bank Credit Decision.
Each Bank agrees that it has, independently and without reliance on the
Agent, the Issuing Bank or any other Bank and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also agrees that it will,
independently and without reliance on the Agent, the Issuing Bank or any other
Bank and based on such documents and information as it deems appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 8.5 Indemnification.
Each of the Banks agree to indemnify the Agent and the Issuing Bank (to
the extent not promptly reimbursed by the Company and without limiting the
obligation of the Company to do so), on demand, ratably according to such Bank's
Percentage Interest, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind or nature whatsoever that may at any time (including
at any time following the payment of any Obligations or termination of this
Agreement) be imposed on, incurred by or asserted against the Agent or the
Issuing Bank in any way relating to or arising out of any Credit Document or
other Project Contract or any action taken or omitted by the Agent under any
Credit Document or other Project Contract; provided, however, that no Bank shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting solely from the Agent's gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank agrees to reimburse the Agent
promptly upon demand for its ratable share of any costs and expenses payable by
the Company under Section 9.4, to the extent that the Agent is not reimbursed
for such costs and expenses by the Company.
SECTION 8.6 Successor Agent.
The Agent may resign at any time by giving written notice thereof to
the Banks and the Company and may be removed at any time with or without cause
with the written approval of the Required Banks. Upon any such resignation or
removal, the Required Banks shall have the right to appoint a successor Agent
with the consent of the Company, which shall not be unreasonably withheld. If no
successor Agent has been so appointed by the Required Banks, and has accepted
such appointment, within 30 days after the retiring Agent's giving of notice of
resignation or the Required Banks' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent with the
consent of the Company (which shall not be unreasonably withheld), which
successor Agent shall be a commercial bank organized under the
24
laws of the United States of America or of any state thereof and having a
combined capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under the Credit Documents and the
other Project Contracts. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article 8 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was agent under
this Agreement.
SECTION 8.7 Collateral.
(a) Except as expressly provided herein, the Agent shall have no duty to
take any affirmative steps with respect to the collection of amounts payable in
respect of the Collateral. The Agent shall incur no liability as a result of any
private sale of the Collateral.
(b) The Banks hereby consent, and agree upon written request by the
Agent to execute and deliver such instruments and other documents as the Agent
may deem desirable to confirm such consent, to the release of the Liens on the
Collateral, including any release in connection with any sale, transfer or other
disposition of the Collateral or any part thereof, in accordance with the
Project Contracts.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Amendments, Etc.
No amendment or waiver of any provision of this Agreement or any CP LOC
Loan Note, or consent to any departure by the Company therefrom, shall be
effective unless in writing and signed or consented to (in writing) by the
Required Banks (and, in the case of amendments, the Company), and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that (A) no amendment,
waiver or consent shall, unless in writing and signed or consented to (in
writing) by all of the Banks do any of the following: (i) waive any of the
conditions specified in Article 3; (ii) increase the Commitments of the Banks or
subject the Banks to any additional obligations; (iii) reduce the principal of,
or interest on, the CP LOC Loans or any fees or other amounts payable hereunder;
(iv) postpone any date fixed for (a) payment of principal of, or interest on,
any CP LOC Loans, (b) reimbursement of drawings under any of the CP Letter of
Credit or (c) payment of fees or other amounts payable hereunder; (v) change the
percentage of the Commitments, or the number of Banks, required for the Banks or
any of them to take any action hereunder; or (vi) amend this Section 9.1; (B)
that no amendment, waiver or consent shall, unless in writing or consented to
(in writing) by the Issuing Bank, affect the rights and obligations of the
Issuing Bank hereunder; (C) no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Persons required above to
take such action, affect the rights or duties of the Agent under this Agreement
or any other Credit Document and (D) any provision that is a part of this
25
Agreement as a result of an incorporation by reference to the Indenture shall be
amended or waived as provided in Section 2.5 of the Collateral Agency Agreement.
SECTION 9.2 Notices, Etc.
All notices and other communications provided for hereunder shall be in
writing (including by telecopier) and shall be mailed, telecopied or delivered,
if to the Company, to it at AES Ironwood, ▇.▇▇., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Project Manager, telephone no. ▇▇▇-▇▇▇-▇▇▇▇,
telecopier no. ▇▇▇-▇▇▇-▇▇▇▇; if to any Bank other than the Issuing Bank, to it
at the address or telecopier number set forth below its name in the Assignment
and Acceptance by which it became a party hereto; if to the Agent or the Issuing
Bank, to it at Dresdner Bank AG, New York Branch, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Project Finance Group, telecopier no.
▇▇▇-▇▇▇-▇▇▇▇, telephone no. ▇▇▇-▇▇▇-▇▇▇▇, or, as to each party, to it at such
other address or telecopier number as designated by such party in a written
notice to the other parties. All such notices and communications shall be deemed
received, (i) if personally delivered, upon delivery, (ii) if sent by
first-class mail, on the third Business Day following deposit into the mails and
(iii) if sent by telecopier, upon acknowledgment of receipt thereof by the
intended recipient, except that notices and communications to the Agent pursuant
to Article 2 or 8 shall not be effective until received by the Agent.
SECTION 9.3 No Waiver, Remedies.
No failure on the part of any Bank (including the Issuing Bank) or the
Agent to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof, and no single or partial exercise of any such right shall
preclude any other or further exercise thereof or the exercise of any other
right. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law.
SECTION 9.4 Costs and Expenses.
The Company agrees to pay on demand (i) all reasonable costs and
expenses of the Agent and the Banks (including the Issuing Bank) in connection
with the preparation, execution, delivery, syndication, administration,
modification and amendment of this Agreement, any CP LOC Loan Note, the other
Credit Documents and the other documents to be delivered hereunder, including
(a) the reasonable fees and out-of-pocket expenses of counsel for the Agent and
the Banks with respect thereto and with respect to advising the Agent and the
Banks as to their rights and responsibilities, or the perfection, protection or
reservation of rights or interests, under this Agreement, the other Credit
Documents, the other Project Contracts and the other documents to be delivered
hereunder, (b) the reasonable fees and expenses of any consultants, auditors or
accountants engaged by the Agent with the written consent (which shall not be
unreasonably withheld) of the Company pursuant hereto, and (ii) all reasonable
costs and expenses of the Agent and the Banks (including the Issuing Bank)
(including reasonable counsel fees and expenses of the Agent and the Banks) in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Agreement, the other Credit Documents, the other Project
Contracts and the other documents to be delivered hereunder, whether in any
action, suit or litigation, bankruptcy, insolvency or similar proceeding. In
addition, the Company
26
shall pay any and all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of the
aforementioned documents, and the Company agrees to indemnify and hold the Agent
and the Banks (including the Issuing Bank) harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay any of the foregoing.
SECTION 9.5 Application of Money.
If any sum paid or recovered in respect of the Obligations is less than
the amount then due, the Agent may apply that sum to principal, interest, fees
or any other amount due under this Agreement in such proportions and order and
generally in such manner as the Agent shall reasonably determine.
SECTION 9.6 Severability.
Any provision of this Agreement that is prohibited, unenforceable or
not authorized in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition, unenforceability or
nonauthorization without invalidating the remaining provisions of this Agreement
or affecting the validity, enforceability or authorization of such provision in
any other jurisdiction.
SECTION 9.7 Non-Recourse Liability.
Satisfaction of the Obligations shall be had solely from the
Collateral. Notwithstanding any provision to the contrary in the Transaction
Documents, there shall be no recourse against any Affiliates, stockholders,
officers, directors, representatives or employees of the Company, other than the
Company (each a "Non-Recourse Party"), for any payment due hereunder or under
any other Financing Document or Security Document from the Company or for the
performance of any obligation of such Non-Recourse Party, or breach of any
representation or warranty made by such Non-Recourse Party hereunder or
thereunder. The sole recourse of the Agent and the Banks hereunder or under any
other Transaction Document or for the performance of any obligation of the
Company, or breach of any representation or warranty made hereunder or
thereunder by the Company, shall be against the Company and its assets, it being
expressly understood by the Senior Parties that such obligations are obligations
solely of the Company and that no such personal liability shall attach to, or be
incurred by any Non-Recourse Party; provided, that nothing contained in this
Section 9.7 shall (i) impair in respect of the Company the validity of any CP
LOC Loan Note, or any other Credit Documents, as applicable, prevent the taking
of any action permitted by law against the Company or any of its Affiliates, or
in any way affect or impair the rights of the Agent and the Banks to take any
action permitted by law, in either case to realize upon the Collateral, (ii) be
deemed to release the Company or any of its Affiliates, or any past, present or
future shareholder, partner, officer, employee, director or agent of any
thereof, from liability for its fraudulent actions, fraudulent
misrepresentations, gross negligence or willful misconduct or (iii) limit or
affect the obligations and liabilities of any Non-Recourse Party in accordance
with the terms of any other Transaction Document creating such obligations and
liabilities to which such Non-Recourse Party is a party.
27
SECTION 9.8 Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the
Company, the Agent and the Banks and their respective successors and assigns,
except that the Company shall not have the right to assign any of its rights and
obligations hereunder without the prior written consent of the Required Banks,
and, except as provided in Section 9.9, no Bank other than the Issuing Bank
shall have the right to assign any of its rights and obligations hereunder.
SECTION 9.9 Assignments and Participations.
(a) Any Bank may at any time (with the consent of the Company, such
consent not to be unreasonably withheld or delayed, the consent of the Agent,
such consent not to be unreasonably withheld or delayed, and the consent of the
Issuing Bank) sell to one or more banks or other entities whose long-term
unsecured debt is rated at least "A" or the equivalent by S&P and ▇▇▇▇▇'▇ (a
"Purchasing Bank") all or any part of its rights and obligations under this
Agreement and any CP LOC Loan Note (which, except in the case of an assignment
to a Person that, immediately before such assignment, was a Bank, shall be in an
amount equal to not less than the lesser of (x) $7,000,000 and (y) 33 1/3% of
the Maximum Stated Amount pursuant to an Assignment and Acceptance, executed by
such Purchasing Bank, such transferor Bank, the Agent and the Issuing Bank (and,
in the case of a Purchasing Bank that is not then a Bank or an Affiliate
thereof, by the Company). Upon (i) such execution of such Assignment and
Acceptance and (ii) delivery of a copy thereof to the Company and payment of the
amount of its participation to the Agent or such transferor Bank, such
Purchasing Bank shall for all purposes be a Bank party to this Agreement and
shall have all the rights and obligations of a Bank under this Agreement, to the
same extent as if it were an original party hereto with the Percentage Interest
as set forth in such Assignment and Acceptance, which shall be deemed to amend
this Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Bank and the resulting adjustment of Percentage
Interests arising from the purchase by such Purchasing Bank of all or a portion
of the rights and obligations of such transferor Bank under this Agreement and
any CP LOC Loan Note.
(b) Any Bank may, from time to time, sell or offer to sell
participating interests in any CP LOC Loans owing to such Bank, such Bank's
interest in any CP LOC Loan Note, any Commitment of such Bank or any other
interests and obligations of such Bank hereunder, to one or more banks or other
entities (each, a "Participant"), on such terms and conditions as may be
determined by the selling Bank, without the consent of or notice to the Company,
and the grant of such participation shall not relieve any Bank of its
obligations, or impair the rights of any Bank, hereunder. In the event of any
such sale by a Bank of a participating interest to a Participant, such Bank
shall remain solely responsible for the performance of such Bank's obligations
under this Agreement, the Company, the Agent and the Issuing Bank will continue
to deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement and such Bank shall retain the sole right
and responsibility to exercise the rights of such Bank, and enforce the
obligations of the Company, including the right to approve any amendment,
modification, supplement or waiver of any provision of any Credit Document and
the right to take action under Article 6 hereof and such Bank shall not grant
any such Participant any voting rights or veto power over any such action by
such Bank under this Agreement (provided, that such Bank may agree not to
consent to any modification, amendment
28
or waiver of this Agreement, without the consent of the Participant, that would
alter the principal of or interest on any CP LOC Loans, postpone the date fixed
for any payment of principal of or interest thereon or extend the term of any
Commitment). No Participant shall have any rights under this Agreement to
receive payment of principal, interest or any other amount payable hereunder
except through a Bank and as provided in this Section 9.9. The Company agrees
that, upon the occurrence and during the continuance of any Event of Default,
each Participant shall have the right of set-off in respect of its participating
interest in amounts owing under this Agreement and any CP LOC Loan Note as set
forth in Section 2.21 hereof to the same extent as if the amount of its
participating interest was owing directly to it as a Bank under this Agreement
or any CP LOC Loan Note. The Company also agrees that each Participant shall be
entitled to the benefits of Sections 2.15, 2.16, 2.17 and 2.18 hereof with
respect to its participation granted hereunder; provided, that no Participant
shall be entitled to receive any greater amount pursuant to such Sections than
the Bank transferring such participation would have been entitled to receive in
respect of the amount of the participation transferred to such Participant had
no such transfer occurred.
(c) Any Bank may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 9.9, disclose to
the Purchasing Bank or Participant or proposed Purchasing Bank or Participant
any information relating to the Company furnished to such Bank by or on behalf
of the Company; provided, however, that prior to any such disclosure, the Person
receiving such disclosure shall sign such confidentiality agreements as the
Company may reasonably request.
SECTION 9.10 Indemnification.
The Company agrees to indemnify, on demand, and hold harmless the Agent
and each Bank (including the Issuing Bank) and each of their respective
officers, directors, employees, agents and affiliates from and against any and
all claims, damages, losses, liabilities, costs and expenses whatsoever that
such indemnified party may incur (or that may be claimed against such
indemnified party by any Person) by reason of (i) any untrue statement or
alleged untrue statement of any material fact concerning the Company or the
Collateral, or the omission or alleged omission to state any fact concerning the
Company or the Collateral necessary to make any such statement, in light of the
circumstances under which it was made, not misleading; (ii) the issuance, sale
or delivery of the Senior Debt; (iii) the use of the proceeds of the Senior Debt
or any Drawing; (iv) any reasonable action taken by such indemnified party in
protecting and enforcing the rights and remedies of the Agent and the Banks
under the Project Contracts; (v) subject to Section 7.2, the execution, delivery
or transfer of, or payment or failure to pay under, the CP Letter of Credit;
(vi) any claim of any Person with respect to any finder's fee, brokerage
commission or other similar sum due in connection with any Project Contract; or
(vii) any failure by the Company to comply with any Environmental Requirement;
provided, however, that the Company shall not be required to indemnify the
Issuing Bank for any claims, damages, losses, liabilities, costs or expenses to
the extent caused by the Issuing Bank's willful misconduct or gross negligence
in paying under the CP Letter of Credit or the Issuing Bank's willful or grossly
negligent failure to pay under the CP Letter of Credit after the presentation to
it by the beneficiary of a draft and certificate strictly complying with the
terms and conditions of the CP Letter of Credit (unless the Issuing Bank in good
faith believed itself (based upon an opinion of counsel) to be prohibited by law
or legal authority from making such payment). The
29
Company, upon demand by any party indemnified or intended to be indemnified
pursuant to this Section 9.10 at any time, shall also reimburse such party for
any reasonable legal or other expenses incurred in connection with investigating
or defending against any of the foregoing. If any action, suit or proceeding
arising from any of the foregoing is brought against any party indemnified or
intended to be indemnified pursuant to this Section 9.10 (an "Indemnified
Party"), such Indemnified Party shall promptly notify the Company in writing,
enclosing a copy of all papers served, but the omission so to notify the Company
of any such action shall not relieve it of any liability that it may have to any
Indemnified Party otherwise than under this Section 9.10; provided, however,
that the Company shall not be liable for any settlement of any such action
effected without the Company's prior written consent. In case any such action
shall be brought against any Indemnified Party and it shall notify the Company
of the commencement thereof, the Company shall be entitled to participate in
and, to the extent that it shall wish, to assume the defense thereof with
counsel reasonably satisfactory to such Indemnified Party, and after notice from
the Company to such Indemnified Party of the Company's election so to assume the
defense thereof, the Company shall not be liable to such Indemnified Party for
any subsequent legal or other expenses attributable to such defense, except as
provided below, other than reasonable costs of investigation subsequently
incurred by such Indemnified Party in connection with the defense thereof. The
Indemnified Party shall have the right to employ its own counsel in any such
action, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the employment of counsel by such Indemnified
Party has been authorized by the Company, (ii) the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest between the
Company and the Indemnified Party in the conduct of the defense of such action
(in which case the Company shall not have the right to direct the defense of
such action on behalf of the Indemnified Party) or counsel for the Company shall
have declined to represent the Indemnified Party in light of a potential
conflict of interest or (iii) the Company shall not in fact have employed
counsel reasonably satisfactory to the Indemnified Party to assume the defense
of such action.
SECTION 9.11 Governing Law; Submission of Jurisdiction; Venue;
Waiver of Jury Trial.
(a) THE RIGHTS AND OBLIGATIONS OF EACH OF THE PARTIES UNDER THIS
AGREEMENT AND ANY CP LOC LOAN NOTE SHALL, PURSUANT TO NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING AGAINST THE
COMPANY WITH RESPECT TO THIS AGREEMENT, ANY CP LOC LOAN NOTE OR ANY OTHER CREDIT
DOCUMENT MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ IN THE COUNTY OF
NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY HEREBY IRREVOCABLY ACCEPTS
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE COMPANY HEREBY
IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION SYSTEM, WITH
OFFICES ON THE DATE HEREOF AT ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, AS ITS
DESIGNEE, APPOINTEE AND AGENT WITH RESPECT TO ANY ACTION OR PROCEEDING IN NEW
YORK TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND
30
IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS,
NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING AND
AGREES THAT THE FAILURE OF SUCH AGENT TO GIVE ANY ADVICE OF ANY SUCH SERVICE OF
PROCESS TO THE COMPANY SHALL NOT IMPAIR OR AFFECT THE VALIDITY OF SUCH SERVICE
OR OF ANY CLAIM BASED THEREON. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND
AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, THE COMPANY AGREES TO
DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND
FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT. THE COMPANY
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE COMPANY AT ITS
ADDRESS SET FORTH IN SECTION 9.2, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING.
(b) THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, ANY CP LOC LOAN
NOTE OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN SECTION
9.11(a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
ANY OF THIS AGREEMENT, ANY CP LOC LOAN NOTE OR THE CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 9.12 Headings.
The section and subsection headings used herein have been inserted for
convenience of reference only and do not constitute matters to be considered in
interpreting this Agreement.
SECTION 9.13 Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized, as of the
day and year first above written.
AES IRONWOOD, L.L.C.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Commitment
----------
$30,000,000.00 DRESDNER BANK AG, NEW YORK BRANCH, as
Agent, the Issuing Bank and as a Bank
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
[CP LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT]
EXHIBIT A
FORM OF
-------
Construction Period Letter of Credit
------------------------------------
Dresdner Bank AG, Letter of Credit No. [________]
New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Irrevocable Standby Credit
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Date and Place of Issue: Date and Place of Expiry:
New York, New York Dresdner Bank AG,
[ ,] 2000 New York Branch
New York, New York
June 25, 2003 as the same may be extended
from time to time in accordance with the
terms hereof
Applicant:
AES Ironwood, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Amount: Up to an aggregate of
[ ] United States Dollars
(US$[ ])
Beneficiary: Credit Available With:
[________] Dresdner Bank AG,
[Address] New York Branch
Attn: By: Negotiation, Against Presentation of
the Documents Detailed Herein Drawn on
Dresdner Bank AG
New York Branch
Ladies and Gentlemen:
We irrevocably authorize you to draw on us for the account of the Applicant up
to an aggregate amount of [________]UNITED STATES DOLLARS (US$[________]) (the
"Stated Amount") available against presentation of a dated drawing request drawn
on Dresdner Bank AG, New York Branch, manually signed by an authorized officer
of the Beneficiary (who is identified as such) appropriately completed in the
form of Annex 1 hereto.
The above drawing request shall be in writing, addressed to us at Dresdner Bank
AG, New York Branch, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇▇▇▇▇,
Credit Administration Department telecopier no. ▇▇▇-▇▇▇-▇▇▇▇, or ▇▇▇-▇▇▇-▇▇▇▇
and all other communications with respect to this Letter of Credit shall be in
writing addressed to us at Dresdner Bank AG, New York Branch, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, telecopier no. ▇▇▇-▇▇▇-▇▇▇▇, with a
copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, telecopier no. ▇▇▇-▇▇▇-▇▇▇▇, referencing this
Ex. A-1
Letter of Credit No. [________] and presented to us by delivery in person or
facsimile transmission at such address, provided that the original of the above
drawing request or such communications, as the case may be, shall be sent to us
at such address by overnight courier for receipt by us within two (2) Business
Days of the date of any such facsimile transmission.
If the drawing request is presented in compliance with the terms of this Letter
of Credit to us at such address by 12:00 noon New York City time on any Business
Day, payment will be made no later than 3:00 p.m. New York City time on such
Business Day and if such drawing request is so presented to us after 12:00 noon
New York City time on any Business Day, payment will be made no later than 12:00
noon New York City time on the following Business Day. Payment under this Letter
of Credit shall be made in immediately available funds by wire transfer to such
account as may be designated by the Beneficiary in the applicable drawing
request.
As used in this Letter of Credit, "Business Day" means any day on which
commercial banks located in New York, New York are not required or authorized to
remain closed.
This Letter of Credit shall expire on the date of expiry set forth above.
Notwithstanding the foregoing, we may at any time, subject to the provisions of
the Construction Period Letter of Credit and Reimbursement Agreement, dated as
of June 1, 1999, among the Applicant, the Issuing Bank and the other Banks party
thereto and on Dresdner Bank AG, New York Branch, as Agent (the "Reimbursement
Agreement"), terminate this Letter of Credit by giving the Beneficiary written
notice thereof in the form of Annex 2 hereto by delivery in person or facsimile
transmission (with written confirmation by overnight courier for receipt by the
Beneficiary within two (2) Business Days) addressed to [________], Attn:
[________], telephone no. [________], telecopier no. [________], at least thirty
(30) days prior to termination whereupon the Beneficiary is authorized to draw
on us prior to such termination the Stated Amount of this Letter of Credit by
presentation to us, in the manner and at the address specified in the third
preceding paragraph, of a drawing request appropriately completed in the form of
Annex 1 hereto and signed by the Beneficiary's authorized officer.
This Letter of Credit is effective immediately.
In the event that a drawing request fails to comply with the terms of this
Letter of Credit, we shall provide the Beneficiary prompt notice of same stating
the reasons therefor and shall upon your instructions hold any non-conforming
drawing request and other documents at your disposal or return any
non-conforming drawing request and other documents to the Beneficiary at the
address set forth above by delivery in person or facsimile transmission (with
originals thereof sent by overnight courier for receipt within two (2) Business
Days). Upon being notified that the drawing was not effected in compliance with
this Letter of Credit, the Beneficiary may attempt to correct such non-complying
drawing request in accordance with the terms of this Letter of Credit.
This Letter of Credit sets forth in full the terms of our undertaking and this
undertaking shall not in any way be modified, amended, limited or amplified by
reference to any document, instrument or agreement referred to herein, except
only defined terms used herein and the drawing requests and certificates
referred to herein; and any such reference shall not be deemed to incorporate
herein by reference any document, instrument, or agreement except for such
defined terms, drawing requests and certificates.
Ex. A-2
This Letter of Credit may be assigned upon presentation to us of a signed
transfer certificate in the form of Annex 3 accompanied by this Letter of
Credit, in which the Beneficiary irrevocably transfers to such transferee all of
its rights hereunder, whereupon we agree to either issue a substitute letter of
credit to such successor or endorse such transfer on the reverse of this Letter
of Credit.
Only one drawing will be allowed under this Letter of Credit.
All banking charges, including any advising and negotiating bank charges, are
for the account of the Applicant.
All drawing requests under this Letter of Credit must bear the clause:
"Drawn under Dresdner Bank AG, New York Branch,
Letter of Credit No.[________] dated June 25, 1999."
This Letter of Credit shall not be amended except with the written concurrence
of Dresdner Bank AG, New York Branch, the Applicant and the Beneficiary.
We hereby engage with you that a drawing request drawn strictly in compliance
with the terms of this Letter of Credit and amendments thereto shall meet with
due honor upon presentation.
This Letter of Credit is subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision in force as from 1st of January 1994),
International Chamber of Commerce Publication Number 500 (the "Uniform
Customs"). This Letter of Credit shall be deemed to be a contract made under the
laws of the State of New York and shall, as to matters not governed by the
Uniform Customs, be governed by and construed in accordance with the laws of
such State, other than its conflict of laws rules that would result in the
application of the law of any jurisdiction other than the laws of such State.
We irrevocably agree with you that any legal action or proceeding with respect
to this Letter of Credit shall be brought in the courts of the State of New York
in the County of New York or of the United States of America in the Southern
District of New York. By signing this Letter of Credit, we irrevocably submit to
the jurisdiction of such courts solely for the purposes of this Letter of
Credit. We hereby waive, to the fullest extent permitted by law, any objection
we may now or hereafter have to the laying of venue in any such action or
proceeding in any such court.
Dresdner Bank AG,
New York Branch
By:
------------------------
Authorized Signature
By:
------------------------
Authorized Signature
Ex. A-3
ANNEX 1
DRAWING REQUEST
---------------
[Date]
------
"Drawn under Dresdner Bank AG, New York Branch,
-----------------------------------------------
Letter of Credit No. [________] Irrevocable Standby Letter of Credit
--------------------------------------------------------------------
dated [________]."
------------------
Dresdner Bank AG
New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇,
Credit Administration Department
Ladies and Gentlemen:
The undersigned hereby draws on Dresdner Bank AG, New York Branch, Letter of
Credit No. [________] Irrevocable Standby Letter of Credit (the "Letter of
Credit"), dated [________], issued by you in favor of us. Any capitalized term
used herein and not defined herein shall have its respective meaning as set
forth in the Letter of Credit.
In connection with this drawing, we hereby certify that:
A "This drawing in the amount of US$_________ is being made pursuant to
Dresdner Bank AG, New York Branch, Letter of Credit No. [________]
Irrevocable Standby Letter of Credit issued to [________] pursuant to
Section 19.2 of the Amended and Restated Power Purchase Agreement dated
February 5, 1999, by and between the Company and [________] (as the same
may be amended, supplemented or modified from time to time, the "Power
Purchase Agreement")"; and
B The Facility has not achieved the Commercial Operation Date by the date
specified in Section 2.2 of the Power Purchase Agreement (each capitalized
term being used as defined in the Power Purchase Agreement)"; and
C "The amount requested to be drawn does not exceed the Stated Amount"; and
D "You are directed to make payment of the requested drawing to account no.
____________ at ____________________________ [insert bank name, address and
account number]."
Ex. A-4
IN WITNESS WHEREOF, the undersigned has executed and delivered this request on
this _____ day of _______________, 199_/200_.
[________]
By:
------------------------
Name:
Title:
Ex. ▇-▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ OF LETTER OF CREDIT
-----------------------------------------
[Date]
------
[--------]
[--------]
[--------]
Attn: [________]
AES Ironwood, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Project Manager
Ladies and Gentlemen:
Reference is made to [the Issuing Bank], Letter of Credit No. [________]
Irrevocable Standby Letter of Credit (the "Letter of Credit"), dated [________],
1999, issued by us in favor of [________].
This constitutes our notice to you pursuant to the Letter of Credit that the
Letter of Credit shall terminate on ___________, 199_/200_ [insert a date which
is 30 or more days after the date of this notice of termination (the
"Termination Date")].
Pursuant to the terms of the Letter of Credit, you are authorized to draw, in a
single drawing, prior to the Termination Date, on the Letter of Credit in an
amount that does not exceed the Stated Amount (as defined in the Letter of
Credit).
Very truly yours,
DRESDNER BANK AG, NEW YORK BRANCH
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
Ex. A-6
ANNEX 3
TRANSFER OF LETTER OF CREDIT
----------------------------
[Date]
------
"Delivered under Dresdner Bank AG, New York Branch
--------------------------------------------------
Letter of Credit No. [________]
-------------------------------
dated _[________], 1999."
-------------------------
Dresdner Bank AG
New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇,
Credit Administration Department
Gentlemen:
Reference is made to Dresdner Bank AG, New York Branch, Letter of Credit No.
[________] Irrevocable Standby Letter of Credit, dated [________], 1999,
originally issued by you in favor of [________] (the "Letter of Credit"). Any
capitalized terms used, but not defined, herein shall have its respective
meaning as set forth in the Letter of Credit.
For value received, the undersigned, as Beneficiary under the Letter of Credit,
hereby irrevocably transfers to _____________ (the "Transferee") all rights of
the undersigned to draw under the Letter of Credit in their entirety.
The Transferee is the successor to the Beneficiary, as Power Purchaser under the
Amended and Restated Power Purchase Agreement, dated as of February 5, 1999, by
and between the Company and the Power Purchaser (as the same may be amended,
supplemented or modified from time to time, the "Power Purchase Agreement") and
all conditions to appointment of such successor set forth in the Power Purchase
Agreement have been satisfied.
By this transfer, all rights of the undersigned, as Beneficiary under the Letter
of Credit, are transferred to the Transferee, and the Transferee shall have the
sole rights with respect to the Letter of Credit relating to any amendments
thereof and any notices thereunder. All amendments to the Letter of Credit are
to be consented to by the Transferee without necessity of any consent of or
notice to the undersigned.
Simultaneously with the delivery of this notice to you, copies of this notice
are being transmitted to the Transferee.
The Letter of Credit is returned herewith, and we ask you to either issue a
substitute letter of credit for the benefit of the Transferee or endorse the
transfer on the reverse thereof, and forward it directly to the Transferee with
your customary notice of transfer.
Ex. A-7
Very truly yours,
[--------]
By:
------------------------
Name:
Title:
Ex. A-8
EXHIBIT B
FORM OF CP LOC LOAN PROMISSORY NOTE
[$___________] New York, New York
____________, 2000
FOR VALUE RECEIVED, the undersigned, AES Ironwood, L.L.C., a Delaware limited
liability company (the "Company"), hereby unconditionally promises to pay to the
order of Dresdner Bank AG, New York Branch (the "Agent") for the benefit of the
Banks party from time to time to the Reimbursement Agreement referred to below
the lesser of (i) the principal sum of _______ _______________________ dollars
($___________) and (ii) the aggregate unpaid principal amount of the CP LOC
Loans owing to the Banks by the Company under the Reimbursement Agreement, on
the dates and in the amounts specified therein.
The Company further promises to pay interest on the daily unpaid principal
amount hereof from time to time outstanding on the dates and at the rates
specified in the Reimbursement Agreement. This CP LOC Loan Note is hereby
expressly limited so that in no contingency or event, whether by reason of
acceleration of the maturity of any indebtedness evidenced hereby or otherwise,
shall the interest contracted for or charged or received by the Agent for the
account of the Banks exceed the maximum amount permissible under Applicable Law.
If, from any circumstance whatsoever, interest would otherwise be payable to the
Agent for the account of the Banks in excess of the maximum lawful amount, the
interest payable to the Agent for the account of the Banks shall be reduced to
the maximum amount permitted under Applicable Law, and the amount of interest
for any subsequent period, to the extent less than that permitted by Applicable
Law, shall to that extent be increased by the amount of such reduction.
The holder hereof is irrevocably authorized to endorse on the schedule attached
hereto, or on a continuation thereof, the date each such interest payment is due
and the amount of each such interest payment determined in accordance with the
Reimbursement Agreement. All such notations shall constitute prima facie
evidence of the accuracy of the information so recorded and be enforceable
against the Company with the same force and effect as if such amounts were each
set forth in a separate CP LOC Loan Note executed by the Company.
All payments due hereunder shall be made without set-off, counterclaim or
deduction of any nature to the Agent, for the account of the Banks, in lawful
money of the United States of America and in immediately available funds, at
such place and in such manner as may be specified by the Agent pursuant to the
Reimbursement Agreement.
The holder hereof is irrevocably authorized to endorse on the schedule attached
hereto, or on a continuation thereof, the date and amount of each CP LOC Loan
incurred by the Company and each payment or prepayment of principal thereof,
provided that the failure of the holder to make, or any error in making, any
such recordation or endorsement shall not affect the obligations of the Company
hereunder or under the Reimbursement Agreement. All such notations shall
constitute prima facie evidence of the accuracy of the information so recorded
and be enforceable against the Company with the same force and effect as if such
amounts were each set forth in a separate CP LOC Loan Note executed by the
Company.
Ex. B-1
This CP LOC Loan Note is the "CP LOC Loan Note" of the Company to the Agent, for
the benefit of the Banks, referred to in, evidences each CP LOC Loan owing to
the Banks by the Company under, is subject to the provisions of, and entitles
the holder to the benefits of, the Construction Period Letter of Credit and
Reimbursement Agreement, dated as of June 1, 1999 (the "Reimbursement
Agreement"), among the Company, the Banks (including the Issuing Bank), parties
thereto, and the Agent, as the same may be amended, supplemented or otherwise
modified from time to time and to which reference is hereby made for a more
complete statement of the terms and conditions under which each CP LOC Loan
evidenced hereby is to be incurred and paid. Capitalized terms in this CP LOC
Loan Note that are not specifically defined herein shall have the meanings
ascribed to them in the Reimbursement Agreement.
The Reimbursement Agreement provides for, among other things, the acceleration
of the maturity of the unpaid principal amount hereof upon the occurrence of
certain stated events and for voluntary prepayments in certain circumstances and
upon certain terms and conditions. The obligations of the Company under the
Reimbursement Agreement and this CP LOC Loan Note are secured by, and the holder
hereof is entitled to the benefit of, the Security Documents.
In addition to any and all costs, fees and expenses for which the Company is
liable under the Reimbursement Agreement, the Company promises to pay all costs
and expenses, including reasonable attorneys' fees and disbursements, incurred
in the collection and enforcement hereof or any appeal of any judgment rendered
hereon.
The Company hereby expressly waives diligence, presentment, protest, demand,
dishonor, nonpayment and notice of every kind to the fullest extent permitted by
Applicable Law. No failure or delay by the holder of this CP LOC Loan Note to
exercise any right or remedy under this CP LOC Loan Note or any other document
or instrument entered into pursuant to the Reimbursement Agreement shall operate
or be construed as a waiver or modification hereof or thereof.
This CP LOC Loan Note shall be binding upon the successors and assigns of the
Company and shall inure to the Agent and its successors, endorsees and assigns.
If any term or provision of this CP LOC Loan Note shall be held invalid, illegal
or unenforceable, the validity of all other terms and provisions hereof shall in
no way be affected thereby.
Recourse under this CP LOC Loan Note is limited in accordance with Section 9.7
of the Reimbursement Agreement, and the provisions of said Section 9.7 are
incorporated herein by reference.
THIS CP LOC LOAN NOTE SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING AGAINST THE COMPANY WITH
RESPECT TO THIS CP LOC LOAN NOTE MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇ IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS CP LOC LOAN NOTE,
THE COMPANY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND
Ex. B-2
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE
COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS
ARISING OUT OF OR IN CONNECTION WITH THIS CP LOC LOAN NOTE BROUGHT IN THE COURTS
REFERRED TO ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
AES IRONWOOD, L.L.C.
By:
------------------------
Name:
Title:
Ex. B-3
SCHEDULE
--------
Principal Amount and Total Principal
Amount of Date of Unpaid Date Interest Amount of CP
Date Reimbursement Principal Paid Principal Payment is Amount of LOC Loans Notation
Made Obligation or Prepaid Balance Due Interest Due Outstanding Made By
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated __________, 199__/200_
Reference is made to the Construction Period Letter of Credit and
Reimbursement Agreement, dated as of June 1, 1999 (the "Reimbursement
Agreement"), among AES Ironwood, L.L.C., a Delaware limited liability company
(the "Company"), the Issuing Bank (as defined in the Reimbursement Agreement),
the Banks (as defined in the Reimbursement Agreement) and Dresdner Bank AG, New
York Branch, as Agent for the Banks (the "Agent"). Terms defined in the
Reimbursement Agreement are used herein with the same meaning.
_________________ (the "Assignor") and ___________________ (the
"Assignee") agree as follows:
(1) The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, the
percentage interest specified on Schedule 1 hereto in and to all of the
Assignor's rights and obligations under the Reimbursement Agreement as
of the date hereof (after giving effect to any other assignments
thereof made before the date hereof, whether or not such assignments
have become effective, but without giving effect to any other
assignments thereof also made on the date hereof), including, without
limitation, such percentage interest in the Assignor's Commitment, each
of the CP LOC Loans owing to the Assignor and the CP Letter of Credit.
The Assignee shall pay to the Assignor, at or before 12:00 noon, local
time of the Assignor, on the Effective Date, the purchase price
therefor in an amount equal to the percentage interest of the CP LOC
Loans owing to the Assignor, as reflected on Schedule 1 hereto, in
immediately available funds.
(2) The Assignor (a) represents and warrants that as of the
date hereof its Commitment, the CP LOC Loans owing to it and its
participation in the CP Letter of Credit (after giving effect to any
other assignments of the foregoing made before the date hereof, whether
or not such assignments have become effective, but without giving
effect to any other such assignments also made on the date hereof) are
in the respective dollar amounts specified therefor on Schedule 1
hereto; (b) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (c) makes no
representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in
connection with any of the Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of any of
the Credit Documents or any other instrument or document furnished
pursuant thereto; and (d) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
the Company or the performance or observance by the Company or any
other Person of any of its obligations under any of the Credit
Documents or any other instrument or document furnished pursuant
thereto.
Ex. C-1
(3) The Assignee (a) confirms that it has received copies of
the Credit Documents and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to
enter into this Assignment and Acceptance, including such documents
evidencing satisfaction of the conditions precedent set forth in the
Reimbursement Agreement; (b) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Bank
(including the Issuing Bank) and based on such documents and
information as it may deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under the
Reimbursement Agreement; (c) appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under
the Credit Documents as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental
thereto; (d) agrees that it will perform in accordance with their terms
all of the obligations that by the terms of the Reimbursement Agreement
are required to be performed by it as a Bank; and (e) specifies as its
address for notices the address set forth beneath its name on Schedule
1 hereto.
(4) Following the execution of this Assignment and Acceptance
by the Assignor and the Assignee, it will be delivered to the Agent for
acceptance and recording by the Agent in the Register maintained by the
Agent for such purpose. The effective date of this Assignment and
Acceptance shall be the date of acceptance thereof by the Agent, unless
otherwise specified on Schedule 1 hereto (the "Effective Date").
(5) Upon such acceptance and recording by the Agent, as of the
Effective Date (a) the Assignee shall be a party to the Reimbursement
Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Bank thereunder and
(b) the Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations
under the Reimbursement Agreement.
(6) Upon such acceptance and recording by the Agent, from and
after the Effective Date the Agent shall make all payments under the
Reimbursement Agreement in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
fees with respect thereto) to the Assignee. The Assignor and the
Assignee shall make all appropriate adjustments directly between
themselves in respect of payments of principal, interest and/or fees
under the Reimbursement Agreement for periods before the Effective
Date.
(7) Each of the Assignor and the Assignee agrees that at any
time and from time to time upon the written request of the other party,
it will execute and deliver such further documents and do such further
acts and things as the other party may reasonably request in order to
effect the purposes of this Assignment and Acceptance.
(8) THE RIGHTS AND OBLIGATIONS OF EACH OF THE PARTIES UNDER
THIS ASSIGNMENT AND ACCEPTANCE SHALL, PURSUANT TO NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Ex. C-2
(9) This Assignment and Acceptance is executed by the parties
on Schedule 1 hereto and may be executed in one or more counterparts,
each of which shall be deemed an original and all of which together
shall constitute one and the same document. Execution of this
Assignment and Acceptance by the Agent and the Company on Schedule 1
hereto shall constitute any consent of such Person required pursuant to
Section 9.9 of the Reimbursement Agreement.
Ex. C-3
Schedule 1
to Assignment and Acceptance
Section 1.
Percentage of Assignor's interest in
Commitments, Drawing and
CP LOC Loans to be assigned: _______%
Section 2.
Immediately prior to Effective Date:
Assignor's Commitment: $_______
CP LOC Loans then owing to Assignor: $_______
Assignor's participation in CP Letter
of Credit: $_______
Assignor's Percentage Interest (as defined
in the Reimbursement Agreement) _______%
Section 3.
Upon Effective Date:
Assignor's Commitment: $_______
Assignor's Percentage Interest: _______%
Assignee's Commitment: $_______
Assignee's Percentage Interest: _______%
Section 4.
Effective Date: __________________
[Assignor]
By:
------------------------------
Name:
Title:
Ex. C-4
By:
------------------------------
Name:
Title:
[Assignee]
By:
------------------------------
Name:
Title:
[address for notices]
Consented to on this _____ day of
__________, 199__/200__:
[ ],
as Agent and the Issuing Bank
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
Consented to on this _____ day of
__________, 199__/200__:
AES IRONWOOD, L.L.C.
By:
------------------------------
Name:
Title:
Ex. C-5
EXHIBIT D
AMORTIZATION SCHEDULE
The principal amount of each CP LOC Loan shall be due and payable in
quarterly installments on consecutive Quarterly Dates, commencing on the first
such Quarterly Date to occur after such CP LOC Loan is made, and maturing in
full on the applicable CP LOC Loan Required Payment Date. The amount of
principal payable on each such Quarterly Date shall be equal to the amount of
the principal component only of an amortization schedule based on the foregoing
payment schedule and a final maturity date ten years from the date on which such
CP LOC Loan is made and assuming (i) a fixed per annum interest rate equal to
the interest rate (whether determined with reference to the Adjusted Base Rate
or the Eurodollar Rate) applicable to such CP LOC Loan on such date and (ii)
mortgage-style payments of principal and interest.
Ex. D-1
