1
EXHIBIT 10.129
CREDIT AGREEMENT
among
COGENTRIX ENERGY, INC.,
The Several Lenders
from Time to Time Parties Hereto
and
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED,
as Agent and as the Issuing Bank
Dated as of May 22, 1997
2
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS 1
1.1 Defined Terms 1
1.2 Other Definitional Provisions 26
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS 26
2.1 Revolving Credit Commitments 26
2.2 Procedure for Revolving Credit Borrowing 27
2.3 Fees 28
2.4 Termination or Reduction of Commitments 28
2.5 Term Loans 29
2.6 Procedure for Term Loan Borrowing 29
2.7 Repayment of Loans; Evidence of Debt 29
2.8 Prepayments 31
2.9 Conversion and Continuation Options 32
2.10 Minimum Amounts and Maximum Number of Tranches 33
2.11 Interest Rates and Payment Dates 33
2.12 Computation of Interest and Fees 33
2.13 Inability to Determine Interest Rate 34
2.14 Pro Rata Treatment and Payments 34
2.15 Illegality 35
2.16 Requirements of Law 36
2.17 Taxes 37
2.18 Indemnity 39
2.19 Change of Lending Office 39
2.20 Procedure for Term Loan Repayment 39
2.21 Use of Proceeds 40
SECTION 3. LETTERS OF CREDIT 40
3.1 L/C Commitment 40
3.2 Procedure for Issuance of Letters of Credit 41
3.3 Fees, Commissions and Other Charges 42
3.4 L/C Participations 42
3.5 Reimbursement Obligation of the Borrower 43
3.6 Obligations Absolute 44
3.7 Letter of Credit Payments 44
3.8 Issuance Request 45
3.9 Cash Collateralization 45
3.10 Substitution/Replacement of Issuing Bank 46
SECTION 4. REPRESENTATIONS AND WARRANTIES 47
4.1 Financial Information 47
4.2 No Change 48
4.3 Corporate Existence; Compliance with Law 48
4.4 Corporate Power; Authorization; Enforceable
Obligations 48
i
3
4.5 No Legal Bar 49
4.6 No Material Litigation 49
4.7 No Default 49
4.8 Ownership of Property; Liens 49
4.9 Taxes 50
4.10 Federal Regulations 50
4.11 ERISA 50
4.12 Investment Company Act; Public Utility Holding
Company Act; Other Regulations 51
4.13 Subsidiaries 51
4.14 Purpose of Revolving Credit Loans 51
4.15 Environmental Matters 51
4.16 Accuracy of Information; Full Disclosure 53
SECTION 5. CONDITIONS PRECEDENT 53
5.1 Conditions to Initial Extension of Credit 53
5.2 Conditions to Each Revolving Credit Loan and
Each Letter of Credit 55
SECTION 6. AFFIRMATIVE COVENANTS 56
6.1 Financial Statements 56
6.2 Certificates; Other Information 57
6.3 Payment of Obligations 58
6.4 Conduct of Business and Maintenance of Existence 59
6.5 Maintenance of Property; Insurance 59
6.6 Inspection of Property; Books and Records;
Discussions 59
6.7 Notices 59
6.8 Environmental Laws 60
6.9 Indemnification 60
SECTION 7. NEGATIVE COVENANTS 62
7.1 Parent Cash Flow Coverage Ratio 62
7.2 Limitation on Debt 62
7.3 Limitation on Subsidiary Debt 63
7.4 Limitation on Restricted Payments 66
7.5 Limitations on Dividends and Other Payment
Restrictions Affecting Subsidiaries 67
7.6 Restrictions on Dispositions 68
7.7 Limitations on Transactions with Affiliates 68
7.8 Limitations on Liens 69
7.9 Limitations on Mergers, Consolidations, Sales or
Transfers of Assets by or Involving Borrower 71
7.10 Limitations on Certain Mergers, Consolidations
and Investments by Subsidiaries 71
7.11 CDH Permitted Investments 72
SECTION 8. EVENTS OF DEFAULT 72
ii
4
SECTION 9. THE AGENT 76
9.1 Appointment 76
9.2 Delegation of Duties 77
9.3 Exculpatory Provisions 77
9.4 Reliance by Agent 77
9.5 Notice of Default 78
9.6 Non-Reliance on Agent and Other Lenders 78
9.7 Indemnification 79
9.8 Agent in Its Individual Capacity 79
9.9 Successor Agent 79
SECTION 10. MISCELLANEOUS 80
10.1 Amendments and Waivers 80
10.2 Notices 81
10.3 No Waiver; Cumulative Remedies 81
10.4 Survival of Representations and Warranties;
Survival of Certain Agreements and Covenants 82
10.5 Payment of Expenses and Taxes 82
10.6 Successors and Assigns; Participations and
Assignments 82
10.7 Adjustments; Set-off 85
10.8 Counterparts 86
10.9 Severability 86
10.10 Integration 86
10.11 GOVERNING LAW 86
10.12 Submission To Jurisdiction; Waivers 86
10.13 Acknowledgments 87
10.14 WAIVERS OF JURY TRIAL 87
10.15 Confidentiality 87
10.16 Rank 88
SCHEDULES
Schedule I - Lenders' Commitment Percentages and Addresses for Notices
Schedule II - Applicable Margin
Schedule III - Financial Disclosure
Schedule IV - Material Litigation
Schedule V - Subsidiaries of the Borrower
Schedule VI - Environmental Matters
EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Term Note
Exhibit C - Form of CDH Guarantee
Exhibit D - Form of Extension Agreement
Exhibit E-1 - Form of Borrowing Request
Exhibit E-2 - Form of Issuance Request
Exhibit F-1 - Form of Opinion of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC
Exhibit F-2 - Form of Opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Exhibit G - Form of Assignment and Acceptance
iii
5
CREDIT AGREEMENT, dated as of May 22, 1997, among
COGENTRIX ENERGY, INC., a North Carolina corporation (the
"Borrower"), the several banks and other financial institutions
from time to time parties to this Agreement (the "Lenders") and
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED, as the issuer
hereunder of the Letters of Credit (as hereinafter defined) and
as agent for the Lenders hereunder.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the higher of
(a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%.
For purposes hereof: "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by
the Agent as its prime rate in effect at its principal
office in New York City (the Prime Rate not being intended
to be the lowest rate of interest charged by the Agent in
connection with extensions of credit to debtors); and
"Federal Funds Effective Rate" shall mean, for any day, the
weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for
the day of such transactions received by the Agent from
three federal funds brokers of recognized standing selected
by it. Any change in the ABR due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective
as of the opening of business on the effective day of such
change in the Prime Rate or the Federal Funds Effective
Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to
which is based upon the ABR.
"Acquisition Debt": Debt of any Person existing at the
time such Person became a Subsidiary of the Borrower (or
such Person is merged into the Borrower or one of its
Subsidiaries) or assumed in connection with the acquisition
of assets from any such Person (other than assets acquired
in the ordinary course of business), including Debt Incurred
in connection with, or in contemplation of, such Person
becoming a Subsidiary of the Borrower (but excluding Debt of
such Person which is extinguished, retired or repaid in
1
6
connection with such Person becoming a Subsidiary of the
Borrower).
"Adjusted Consolidated Net Income": for any period,
for any Person the aggregate Net Income (or loss) of such
Person and its consolidated Subsidiaries for such period
determined in conformity with GAAP plus the Net Income of
any Subsidiary of such Person for prior periods to the
extent such Net Income is actually paid in cash to such
Person during such period plus the Net Income of such Person
(other than a Subsidiary thereof) in which any third Person
has a joint interest for prior periods to the extent such
Net Income is actually paid in cash to such Person during
such period; provided that the following items shall be
excluded in computing Adjusted Consolidated Net Income
(without duplication): (i) the Net Income (or loss) of such
Person (other than a Subsidiary thereof) in which any third
Person has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid in
cash to such Person during such period by such Person in
which the joint interest is held, which dividends and
distributions shall be included in such computation;
(ii) solely for the purposes of calculating the amount of
Restricted Payments that may be made pursuant to
clause (c)(i) or (c)(ii) of subsection 7.4 (and in such
case, except to the extent includable pursuant to clause (i)
above), the Net Income (if positive) of such Person accrued
prior to the date it becomes a Subsidiary of any other
Person or is merged into or consolidated with such other
Person or any of its Subsidiaries or all or substantially
all of the property and assets of such Person are acquired
by such other Person or any of its Subsidiaries; (iii) the
Net Income of any Subsidiary of such Person, except to the
extent that (A) such Net Income (if positive) is actually
paid in cash to such Person during such period and (B) such
Net Income (if negative) is actually paid in cash to such
Subsidiary during such period; (iv) any gains or losses (on
an after-tax basis) attributable to Asset Sales; (v) the
cumulative effect of a change in accounting principle; and
(vi) any amounts paid or accrued as dividends on Preferred
Stock of such Person or Preferred Stock of any Subsidiary of
such Person.
"Adjusted Parent Operating Cash Flow": for any period,
(i) Parent Operating Cash Flow for such period less (ii) the
sum of the following expenses (determined without
duplication), in each case to the extent paid by the
Borrower during such period and regardless of whether any
such amount was accrued during such period:
(a) development expenses for such period of
the Borrower and its Subsidiaries paid directly by the
Borrower or paid indirectly by the transferring of
funds or other assets (whether through a loan, capital
2
7
contribution or otherwise) to any Subsidiary of the
Borrower (whether by the Borrower or by any of its
Subsidiaries) for the purpose of enabling such
Subsidiary or another Subsidiary to pay any such
expense;
(b) income tax expenses of the Borrower and
its Subsidiaries (computed on a consolidated basis) for
such period; and
(c) corporate overhead expenses of the
Borrower and its Subsidiaries for such period.
"Administration Fee": as defined in subsection 2.3(c).
"Affiliate": as to any Person, any other Person
directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person. For the
purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled
by" and "under common control with") when used with respect
to any Person means the possession, directly or indirectly,
of the power either (a) to vote 10% or more of the
securities having ordinary voting power for the election of
directors of such Person or (b) to direct or cause the
direction of the management and policies of such Person,
whether through the ownership of voting securities, by
contract or otherwise.
"Agent": ANZ in its capacity as the agent for the
Lenders under this Agreement and the other Loan Documents
and its successors in such capacity.
"Aggregate Outstanding Extensions of Credit": as to
any Lender at any time, an amount equal to the sum of
(a) the aggregate principal amount of all Loans made by such
Lender then outstanding and (b) such Lender's Commitment
Percentage of the L/C Obligations then outstanding.
"Agreement": this Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"Amortization Amount": the total of all Lenders'
Aggregate Outstanding Extensions of Credit as of the
Revolving Credit Termination Date less the aggregate amount,
if any, of cash on deposit in the Cash Collateral Account on
such date.
"ANZ": Australia and New Zealand Banking Group
Limited.
"Applicable Margin": for the Commitment Fee, for each
Type of Loan and for each Type of Letter of Credit, the rate
3
8
per annum as set forth under the relevant column heading on
Schedule II.
"Asset Acquisition": (i) an investment by the Borrower
or any of its Subsidiaries in any other Person pursuant to
which such Person shall become a Subsidiary of the Borrower
or any of its Subsidiaries or shall be merged into or
consolidated with the Borrower or any of its Subsidiaries or
(ii) an acquisition by the Borrower or any of its
Subsidiaries of the Property of any Person other than the
Borrower or any of its Subsidiaries that constitutes
substantially all of an operating unit or business of such
Person.
"Asset Disposition": with respect to any Person, any
sale, transfer, conveyance, lease or other disposition
(including by way of merger, consolidation or sale-
leaseback) by such Person or any of its Subsidiaries to any
Person (other than to such Person or a Subsidiary of such
Person and other than in the ordinary course of business) of
(i) any Property of such Person or any of its Subsidiaries
or (ii) any shares of Capital Stock of such Person's
Subsidiaries. For purposes of this definition, any
disposition in connection with directors' qualifying shares
or investments by foreign nationals mandated by applicable
law shall not constitute an Asset Disposition. In addition,
the term "Asset Disposition" shall not include (i) any sale,
transfer, conveyance, lease or other disposition of the
Capital Stock or assets of Subsidiaries pursuant to the
terms of any power sales agreements or steam sales
agreements to which such Subsidiaries are parties as of the
date of this Agreement or pursuant to the terms of any power
sales agreements or steam sales agreements to which such
Subsidiaries become a party after such date if the Board of
Directors determines in good faith (evidenced by a Board
resolution) that such provisions are necessary in order to
effect such agreements and are reasonable, (ii) any sale,
transfer, conveyance, lease or other disposition of assets
governed by subsection 7.9, (iii) the sale, transfer,
conveyance, lease or other disposition of the Capital Stock
or assets of the following: (A) Cogentrix of Pennsylvania,
Inc. and (B) ReUse Technology, Inc. and (iv) any transaction
or series of related transactions consisting of the sale,
transfer, conveyance, lease or other disposition of Capital
Stock or assets with a Fair Market Value aggregating less
than $5 million. The term "Asset Disposition" also shall
not include (i) the grant of a Lien by any Person in any
assets or shares of Capital Stock securing a borrowing by,
or contractual performance obligation of, such Person or any
Subsidiary of such Person or any Joint Venture in which such
Person has an interest, which Lien is not prohibited under
subsection 7.8 or under Section 10(a) of the CDH Guarantee
or the exercise of remedies thereunder or (ii) a sale-
leaseback transaction involving substantially all of the
4
9
assets of a Power Generation Facility where a Subsidiary of
the Borrower sells the Power Generation Facility to a Person
in exchange for the assumption by that Person of the Debt
financing the Power Generation Facility and the Subsidiary
leases the Power Generation Facility from such Person.
"Asset Sale": the sale or other disposition by the
Borrower or any of its Subsidiaries (other than to the
Borrower or another Subsidiary of the Borrower) of (i) all
or substantially all of the Capital Stock of any Subsidiary
of the Borrower or (ii) all or substantially all of the
Property of the Borrower or any of its Subsidiaries.
"Assignee": as defined in subsection 10.6(c).
"Assignment and Acceptance": an Assignment and
Acceptance substantially in the form of Exhibit G.
"Attributable Value": as to a Capitalized Lease
Obligation under which any Person is at the time liable and
at any date as of which the amount thereof is to be
determined, the capitalized amount thereof that would appear
on the face of a balance sheet of such Person in accordance
with GAAP.
"Available Commitment": as to any Lender, at any time,
an amount equal to the excess, if any, of (a) such Lender's
Commitment over (b) such Lender's Aggregate Outstanding
Extensions of Credit.
"Average Life": at any date of determination with
respect to any Debt security or Preferred Stock the quotient
obtained by dividing (i) the sum of the product of (A) the
number of years from such date of determination to the dates
of each successive scheduled principal or involuntary
liquidation value payment of such Debt security or Preferred
Stock, respectively, multiplied by (B) the amount of such
principal or involuntary liquidation value payment by
(ii) the sum of all such principal or involuntary
liquidation value payments.
"Board of Directors": either the Board of Directors of
the Borrower or any committee of such Board duly authorized
to act on behalf of such Board.
"Borrower Indenture": the Indenture, dated as of
March 15, 1994, between the Borrower and the First Union
National Bank of North Carolina, a National Banking
Association, as trustee, as amended, supplemented or
otherwise modified from time to time.
"Borrower Indenture Securities": the 8.10% Senior
Notes Due 2004 issued by the Borrower pursuant to the
Borrower Indenture.
5
10
"Borrowing Date": any Business Day specified in a
Borrowing Request pursuant to subsection 2.2 or in a notice
pursuant to subsection 2.6 as a date on which the Borrower
requests the Lenders to make Loans hereunder.
"Borrowing Request": a request and certificate of the
Borrower substantially in the form of Exhibit E-1 (with such
changes thereto as agreed upon from time to time by the
Agent and the Borrower).
"Business": as defined in subsection 4.15(b).
"Business Day": a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are
authorized or required by law to close.
"Capital Stock": with respect to any Person, any and
all shares, interests, participations or other equivalents
(however designated, whether voting or non-voting) of, or
interests in (however designated), the equity of such Person
which is outstanding or issued on or after the date of this
Agreement, including, without limitation, all Common Stock
and Preferred Stock and partnership and joint venture
interests of such Person.
"Capitalized Lease": as applied to any Person, any
lease of any Property of which the discounted present value
of the rental obligations of such Person as lessee, in
conformity with GAAP, is required to be capitalized on the
balance sheet of such Person; "Capitalized Lease Obligation"
means the rental obligations, as aforesaid, under such
lease.
"Cash Collateral Account": as defined in
subsection 3.9(b).
"CDH": Cogentrix Delaware Holdings, Inc., a Delaware
corporation and a Wholly-Owned Subsidiary of the Borrower.
"CDH Guarantee": the Guarantee to be executed and
delivered by CDH, substantially in the form of Exhibit C, as
amended, supplemented or otherwise modified from time to
time.
"CDH Permitted Investments": as defined in the CDH
Guarantee.
"Closing Date": the date on which the conditions
precedent set forth in subsection 5.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended
from time to time.
6
11
"Commitment": as to any Lender, the obligation of such
Lender to make Loans to and/or issue or participate in
Letters of Credit issued hereunder in an aggregate principal
and/or face amount at any one time outstanding not to exceed
the amount set forth next to such Lender's name under the
caption "Commitment" on Schedule I or set forth in the
Assignment and Acceptance executed by such Lender by which
such Lender became a Lender hereunder, in either such case
as such amount may be reduced from time to time pursuant to
subsection 2.4 and as such amount may be adjusted from time
to time in accordance with subsection 10.6 pursuant to any
Assignment and Acceptance executed by such Lender or
otherwise in accordance with this Agreement.
"Commitment Fee": as defined in subsection 2.3(a).
"Commitment Percentage": as to any Lender at any time,
the percentage set forth next to such Lender's name under
the caption "Commitment Percentage" on Schedule I or set
forth in the Assignment and Acceptance executed by such
Lender by which such Lender became a Lender hereunder, in
either such case as such percentage may be adjusted from
time to time in accordance with subsection 10.6 pursuant to
any Assignment and Acceptance executed by such Lender or
otherwise in accordance with this Agreement.
"Commitment Period": the period from and including the
Closing Date to but not including the Revolving Credit
Termination Date or such earlier date on which the
Commitments shall terminate as provided herein.
"Common Stock": with respect to any Person, Capital
Stock of such Person that does not rank prior, as to the
payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution
or winding up of such Person, to shares of Capital Stock of
any other class of such Person.
"Commonly Controlled Entity": an entity, whether or
not incorporated, which is under common control with the
Borrower within the meaning of Section 4001 of ERISA or is
part of a group which includes the Borrower and which is
treated as a single employer under Section 414 of the Code.
"Consolidated EBITDA": of any Person for any period,
the Adjusted Consolidated Net Income of such Person, plus
(i) income taxes, excluding income taxes (either positive or
negative) attributable to extraordinary and non-recurring
gains or losses or Asset Sales, all determined on a
consolidated basis for such Person and its consolidated
Subsidiaries in accordance with GAAP, (ii) Consolidated
Fixed Charges, (iii) depreciation and amortization expense,
all determined on a consolidated basis for such Person and
its consolidated Subsidiaries in accordance with GAAP,
7
12
(iv) all other non-cash items reducing Adjusted Consolidated
Net Income for such period, all determined on a consolidated
basis for such Person and its consolidated Subsidiaries in
accordance with GAAP and (v) the aggregate amount actually
received in cash by such Person during such period relating
to non-cash items increasing Adjusted Consolidated Net
Income for prior periods, and less (i) all non-cash items
increasing Adjusted Consolidated Net Income during such
period and (ii) the aggregate amount actually paid in cash
by such Person during such period relating to non-cash items
reducing Adjusted Consolidated Net Income for prior periods;
provided that depreciation and amortization expense of any
Subsidiary of such Person and any other non-cash item of any
Subsidiary of such Person that reduces Adjusted Consolidated
Net Income shall be excluded (without duplication) in
computing Consolidated EBITDA, except to the extent that the
positive cash flow associated with such depreciation and
amortization expense and other non-cash items is actually
distributed in cash to such Person during such period.
"Consolidated Fixed Charges": of any Person, for any
period, the aggregate of (i) Consolidated Interest Expense,
(ii) the interest component of Capitalized Leases,
determined on a consolidated basis for such Person and its
consolidated Subsidiaries in accordance with GAAP excluding
any interest component of Capitalized Leases in respect of
that portion of a Capitalized Lease Obligation of a
Subsidiary that is Non-Recourse to such Person and
(iii) cash and non-cash dividends due (whether or not
declared) on the Preferred Stock of any Subsidiary of such
Person and any Redeemable Stock of such Person.
"Consolidated Interest Expense": of any Person, for
any period, the aggregate interest expense in respect of
Debt (including amortization or original issue discount and
non-cash interest payments or accruals) of such Person and
its consolidated Subsidiaries, determined on a consolidated
basis in accordance with GAAP, including all commissions,
discounts, other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net
costs associated with Interest Rate Protection Agreements
and any amounts paid during such period in respect of such
interest expense, commissions, discounts, other fees and
charges that have been capitalized; provided that
Consolidated Interest Expense of the Borrower shall not
include any interest expense (including all commissions,
discounts, other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net
costs associated with Interest Rate Protection Agreements)
in respect of that portion of Debt of a Subsidiary of the
Borrower that is Non-Recourse to the Borrower; and provided
further that Consolidated Interest Expense of the Borrower
in respect of a Guarantee by the Borrower of Debt of a
Subsidiary shall be equal to the commissions, discounts,
8
13
other fees and charges that would be due with respect to a
hypothetical letter of credit issued under a bank credit
agreement that can be drawn by the beneficiary thereof in
the amount of the Debt so guaranteed if (i) the Borrower is
not actually making directly or indirectly interest payments
on such Debt and (ii) GAAP does not require the Borrower on
an unconsolidated basis to record such Debt as a liability
of the Borrower.
"Consolidated Total Assets": with respect to any
Person at any time, the total assets of such Person and its
consolidated Subsidiaries at such time determined in
conformity with GAAP.
"Contractual Obligation": as to any Person, any
provision of any security issued by such Person or of any
agreement, instrument or other undertaking to which such
Person is a party or by which it or any of its property is
bound.
"Currency Protection Agreement": with respect to any
Person any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed
to protect such Person or any of its Subsidiaries against
fluctuations in currency values to or under which such
Person or any of its Subsidiaries is a party or a
beneficiary on the date of this Agreement or becomes a party
or a beneficiary thereafter.
"Debt": with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of
such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person in
respect of letters of credit or bankers' acceptance or other
similar instruments (or reimbursement obligations with
respect thereto), (iv) all obligations of such Person to pay
the deferred purchase price of property or services, except
Trade Payables, (v) the Attributable Value of all
obligations of such Person as lessee under Capitalized
Leases, (vi) all Debt of others secured by a Lien on any
asset of such Person, whether or not such Debt is assumed by
such Person; provided that, for purposes of determining the
amount of any Debt of the type described in this clause, if
recourse with respect to such Debt is limited to such asset,
the amount of such Debt shall be limited to the lesser of
the Fair Market Value of such asset or the amount of such
Debt, (vii) all Debt of others Guaranteed by such Person to
the extent such Debt is Guaranteed by such Person,
(viii) all Redeemable Stock valued at the greater of its
voluntary or involuntary liquidation preference plus accrued
and unpaid dividends and (ix) to the extent not otherwise
included in this definition, all obligations of such Person
9
14
under Currency Protection Agreement and Interest Rate
Protection Agreements.
"Default": any of the events specified in Section 8,
whether or not any requirement for the giving of notice, the
lapse of time, or both, or any other condition, has been
satisfied.
"Dollars" and "$": dollars in lawful currency of the
United States of America.
"Environmental Laws": any and all foreign, Federal,
state, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, requirements of any
Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of
human health or the environment, as now or may at any time
hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as
applied to a Eurodollar Loan, the aggregate (without
duplication) of the rates (expressed as a decimal fraction)
of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of
Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect
thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of such Board) maintained by a
member bank of such System.
"Eurodollar Base Rate": with respect to each day
during each Interest Period pertaining to a Eurodollar Loan,
the rate per annum equal to the rate at which the Agent is
offered Dollar deposits at or about 10:00 A.M., New York
City time, two Eurodollar Business Days prior to the
beginning of such Interest Period in the London interbank
eurodollar market for delivery on the first day of such
Interest Period for the number of days comprised therein and
in an amount comparable to the amount of its Eurodollar Loan
to be outstanding during such Interest Period.
"Eurodollar Business Day": any Business Day on which
dealings in foreign currency and exchange between banks may
be carried on in London, England.
"Eurodollar Loans": Loans the rate of interest
applicable to which is based upon the Eurodollar Rate.
10
15
"Eurodollar Rate": with respect to each day during
each Interest Period pertaining to a Eurodollar Loan, a rate
per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
divided by
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in
Section 8, provided that any requirement for the giving of
notice, the lapse of time, or both, or any other condition,
has been satisfied.
"Excess Cash Flow": of any Person for any period,
Consolidated EBITDA less Consolidated Fixed Charges less any
income taxes actually paid during such period.
"Extension Date": as defined in subsection 2.1(c).
"Extension of Credit": any making of any Loan by a
Lender and any issuance or extension by the Issuing Bank of
any Letter of Credit.
"Fair Market Value": with respect to any Capital
Stock, asset or other Property, the price obtainable for
such Capital Stock, asset or other Property in an arm's-
length sale between an informed and willing purchaser under
no compulsion to purchase and an informed and willing seller
under no compulsion to sell.
"Fee Letter": as defined in subsection 2.3(b).
"Final Maturity Date": the second anniversary of the
Revolving Credit Termination Date.
"Financial Letter of Credit": as defined in clause
(i)(1) of subsection 3.1(b).
"Fixed Charge Ratio": the ratio, on a pro forma basis,
of (i) the aggregate amount of Consolidated EBITDA of any
Person for the Reference Period immediately prior to the
date of the transaction giving rise to the need to calculate
the Fixed Charge Ratio (the "Transaction Date") to (ii) the
aggregate Consolidated Fixed Charges of such Person during
such Reference Period; provided that for purposes of such
computation in calculating Consolidated EBITDA and
Consolidated Fixed Charges, (1) the Incurrence of the Debt
giving rise to the need to calculate the Fixed Charge Ratio
and the application of the proceeds therefrom shall be
assumed to have occurred on the first day of the Reference
Period, (2) Asset Sales and Asset Acquisitions which occur
during the Reference Period or subsequent to the Reference
Period and prior to the Transaction Date (but including any
11
16
Asset Acquisition to be made with the Debt Incurred pursuant
to (1) above) shall be assumed to have occurred on the first
day of the Reference Period, (3) the Incurrence of any Debt
during the Reference Period or subsequent to the Reference
Period and prior to the Transaction Date and the application
of the proceeds therefrom shall be assumed to have occurred
on the first day of such Reference Period, (4) Consolidated
Interest Expense attributable to any Debt (whether existing
or being Incurred) computed on a pro forma basis and bearing
a floating interest rate shall be computed as if the rate in
effect on the date of computation had been the applicable
rate for the entire period unless such Person or any of its
Subsidiaries is a party to an Interest Rate Protection
Agreement (which shall remain in effect for the twelve month
period after the Transaction Date) which has the effect of
fixing the interest rate on the date of computation, in
which case such rate (whether higher or lower) shall be used
and (5) there shall be excluded from Consolidated Fixed
Charges any Consolidated Fixed Charges related to any amount
of Debt which was outstanding during and subsequent to the
Reference Period but is not outstanding on the Transaction
Date, except for Consolidated Fixed Charges actually
incurred with respect to Debt borrowed (as adjusted pursuant
to clause (4)) under a revolving credit or similar
arrangement to the extent the commitment thereunder remains
in effect on the Transaction Date. For the purpose of
making this computation, Asset Sales and Asset Acquisitions
which have been made by any Person which has become a
Subsidiary of the Borrower or been merged with or into the
Borrower or any Subsidiary of the Borrower during the
Reference Period, or subsequent to the Reference Period and
prior to the Transaction Date shall be calculated on a pro
forma basis (including all of the calculations referred to
in clauses (1) through (5) above assuming such Asset Sales
or Asset Acquisitions occurred on the first day of the
Reference Period).
"Fronting Fee": as defined in subsection 3.3(a).
"GAAP": generally accepted accounting principles in
the United States of America in effect from time to time,
including, without limitation, those set forth in the
opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant
segment of the accounting profession.
"Governmental Authority": any nation or government,
any state or other political subdivision thereof and any
entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
12
17
"Guarantee" or "Guarantee Obligation": any obligation,
contingent or otherwise, of any Person directly or
indirectly guaranteeing any Debt or other obligation of any
other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt or
other obligation of such other Person (whether arising by
virtue of partnership arrangements, or by agreement to keep-
well, to purchase assets, goods, securities or services, or
to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in
part); provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has
a corresponding meaning.
"Incur": with respect to any Debt, to incur, create,
issue, assume, Guarantee or otherwise become liable for or
with respect to, or become responsible for, the payment of,
contingently or otherwise, such Debt; provided that neither
the accrual of interest (whether such interest is payable in
cash or kind) nor the accretion of original issue discount
shall be considered an Incurrence of Debt.
"Insolvency": with respect to any Multiemployer Plan,
the condition that such Plan is insolvent within the meaning
of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Payment Date": (a) as to any ABR Loan, the
last day of each March, June, September and December, (b) as
to any Eurodollar Loan having an Interest Period of three
months or less, the last day of such Interest Period, and
(c) as to any Eurodollar Loan having an Interest Period
longer than three months or 90 days, respectively, each day
which is three months or 90 days, respectively, or a whole
multiple thereof, after the first day of such Interest
Period and the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar
Loan:
(i) initially, the period commencing on
the Borrowing Date or conversion date, as the case may
be, with respect to such Eurodollar Loan and ending
one, two, three, six, nine or twelve months thereafter,
as selected by the Borrower in its Borrowing Request or
notice of conversion, as the case may be, given with
respect thereto; and
13
18
(ii) thereafter, each period commencing
on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two,
three, six, nine or twelve months thereafter, as
selected by the Borrower by irrevocable notice to the
Agent not less than three Eurodollar Business Days
prior to the last day of the then current Interest
Period with respect thereto;
provided that, all of the foregoing provisions relating to
Interest Periods are subject to the following:
(1) if any Interest Period pertaining to a
Eurodollar Loan would otherwise end on a day that is
not a Eurodollar Business Day, such Interest Period
shall be extended to the next succeeding Eurodollar
Business Day unless the result of such extension would
be to carry such Interest Period into another calendar
month in which event such Interest Period shall end on
the immediately preceding Eurodollar Business Day;
(2) any Interest Period that would otherwise
extend beyond the Revolving Credit Termination Date or
beyond the Final Maturity Date shall end on the
Revolving Credit Termination Date or the Final Maturity
Date, as the case may be;
(3) any Interest Period pertaining to a
Eurodollar Loan that begins on the last Eurodollar
Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the
calendar month at the end of such Interest Period)
shall end on the last Eurodollar Business Day of a
calendar month; and
(4) the Borrower shall select Interest
Periods so as not to require a payment or prepayment of
any Eurodollar Loan during an Interest Period for such
Loan.
"Interest Rate Protection Agreement": with respect to
any Person, any interest rate protection agreement, interest
rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, interest rate hedge
agreement or other similar agreement or arrangement designed
to protect such Person or any of its Subsidiaries against
fluctuations in interest rates to or under which such Person
or any of its Subsidiaries is a party or a beneficiary on
the date of this Agreement or becomes a party or a
beneficiary thereafter.
14
19
"Investment": in a Person, any investment in, loan or
advance to, Guarantee on behalf of, directly or indirectly,
or other transfer of assets to, such Person.
"Investment Grade": with respect to the Borrower
Indenture Securities, a rating of "Baa3" or better by
▇▇▇▇▇'▇ Investors Service, Inc. and a rating of "BBB-" or
better by Standard and Poor's Rating Group.
"Issuance Request": a request and certificate of the
Borrower substantially in the form of Exhibit E-2 (with such
changes thereto as agreed upon from time to time by the
Agent and the Borrower), together with a properly completed
application for a Letter of Credit in such form as the
Issuing Bank may specify from time to time.
"Issuing Bank": ANZ, in its capacity as issuer of any
Letter of Credit, and any L/C Participant issuing any Letter
of Credit pursuant to subsection 3.10(a) or succeeding ANZ
as Issuing Bank pursuant to subsection 3.9(b), in its
capacity as the issuer of each Letter of Credit issued by
it.
"Joint Venture": a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or
other legal form; provided that, as to any such arrangement
in corporate form, such corporation shall not, as to any
Person to which such corporation is a Subsidiary, be
considered to be a Joint Venture to which such Person is a
party.
"L/C Fee Payment Date": the last day of each March,
June, September and December.
"L/C Obligations": at any time, an amount equal to the
sum of (a) the aggregate then undrawn and unexpired amount
of the then outstanding Letters of Credit and (b) the
aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to subsection 3.5(a).
"L/C Participants": the collective reference to all
the Lenders.
"Letter of Credit Availability": (a) at any time that
a Lien shall exist on any assets of the Borrower to secure
the Borrower's reimbursement obligations with respect to a
letter of credit issued in favor of ▇▇▇▇▇ Public Utility
District No. 1 in the amount of $20,000,000, an amount equal
to the excess of (i) $30,000,000 over (ii) the then
outstanding L/C Obligations and (b) at any other time, an
amount equal to the excess of (i) the aggregate Commitments
of all the Lenders over (ii) the then Aggregate Outstanding
Extensions of Credits of all the Lenders.
15
20
"Letter of Credit Fee": as defined in subsection 3.3(b).
"Letters of Credit": as defined in subsection 3.1(a).
"Lien": with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of
any kind in respect of such Property. For purposes of this
Agreement, the Borrower shall be deemed to own subject to a
Lien any Property which it has acquired or holds subject to
the interest of a vendor or lessor under any conditional
sale agreement, capital lease or other title retention
agreement relating to such Property.
"Loan": any Revolving Credit Loan or Term Loan.
"Loan Documents": this Agreement, the Notes, all
Borrowing Requests, all Issuance Requests, the Fee Letter
and the CDH Guarantee.
"Loan Parties": the Borrower and CDH.
"Majority Lenders": at any time, Lenders the
Commitment Percentages of which aggregate more than 50%.
"Mandatory Cash Collateralization Amount": for any
Term Loan Reduction Date, an amount (not less than zero)
that, when added to the Term Loan Payment Amount for such
date, shall equal 25% of the Amortization Amount; provided,
that the Mandatory Cash Collateralization Amount for any
Term Loan Reduction Date shall not be more than the excess,
if any, of the outstanding L/C Obligations on such date over
the aggregate amount of cash on deposit in the Cash
Collateral Account on such date before any deposit made on
such date pursuant to subsection 3.9(a).
"Material Adverse Effect": a material adverse effect
on (a) the business, operations, property, condition
(financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole, (b) the validity or
enforceability of this or any of the other Loan Documents or
the rights or remedies of the Agent, the Issuing Bank or the
Lenders hereunder or thereunder or (c) any Loan Party's
ability to perform any Obligation.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or
petroleum products or any hazardous or toxic substances,
materials or wastes, defined or regulated as such in or
under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.
16
21
"Multiemployer Plan": a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": from an Asset Disposition, cash
payments received (including, without limitation, any cash
payment received by way of (a) a payment of principal
pursuant to a note or installment receivable or otherwise,
but only as and when received (including any cash received
upon sale or disposition of such note or receivable) or
(b) any dividend or other distribution on any shares of any
Person's Capital Stock representing directly or indirectly
all or part of the consideration in respect of any Asset
Disposition, but only as and when received, but excluding
any other consideration received in the form of assumption
by the acquiring Person of Debt or other obligations
relating to the Property disposed of in such Asset
Disposition or received in any other noncash form)
therefrom, in each case, net of all legal, title and
recording tax expenses, commissions and other fees and
expenses incurred or payable and all federal, state,
provincial, foreign and local taxes required to be accrued
as a liability under GAAP (i) as a consequence of such Asset
Disposition, (ii) as a result of the repayment of any Debt
in any jurisdiction other than the jurisdiction where the
Property disposed of was located or (iii) as a result of any
repatriation to the United States of America of any proceeds
of such Asset Disposition, and in each case net of a
reasonable reserve for the after tax cost of any
indemnification payments (fixed and contingent) attributable
to seller's indemnities to the purchaser undertaken by the
Borrower or any of its Subsidiaries in connection with such
Asset Disposition (but excluding any payments, which by the
terms of the indemnities will not, under any circumstances,
be made prior to the then Final Maturity Date), and net of
all payments made on any Debt which is secured by such
Property, in accordance with the terms of any Lien upon or
with respect to such Property or which must by its terms or
by applicable law be repaid out of the proceeds from such
Asset Disposition, and net of all distributions and other
payments made to holders of minority interests in
Subsidiaries or Joint Ventures as a result of such Asset
Disposition.
"Net Income": of any Person for any period, the net
income (loss) of such Person for such period, determined in
accordance with GAAP, except that extraordinary and
non-recurring gains and losses as determined in accordance
with GAAP shall be excluded.
"Net Worth": of any Person, as of any date the
aggregate of capital, surplus and retained earnings
(including any cumulative translation adjustment) of such
Person and its consolidated Subsidiaries as would be shown
on a consolidated balance sheet of such Person and its
17
22
consolidated Subsidiaries prepared as of such date in
accordance with GAAP.
"Non-Excluded Taxes": as defined in subsection 2.17.
"Non-Recourse": to a Person as applied to any Debt (or
portion thereof), that such Person is not, directly or
indirectly, liable to make any payments with respect to such
Debt (or portion thereof), that no Guarantee of such Debt
(or portion thereof) has been made by such Person other than
a Guarantee limited in recourse to the Capital Stock of the
Person incurring such Debt (or any shareholder, partner,
member or participant of such Person) and that such Debt (or
portion thereof) is not secured by a Lien on any asset of
such Person other than the Capital Stock of the Person
incurring such Debt or any shareholder, partner, member or
participant of such Person or of the Person whose
obligations were Guaranteed, provided that for purposes of
this definition the status of a Subsidiary as a general
partner of a partnership or Joint Venture shall not, without
more, cause such Person to be, directly or indirectly,
liable to make payments with respect to such Debt or
constitute a Guarantee of such Debt for purposes of
determining whether Debt is Non-Recourse, and provided
further that none of the following shall cause any Debt to
fail to be Non-Recourse: the incurrence of Debt, Guarantees
or Liens jointly by (i) Cogentrix Eastern Carolina
Corporation and Cogentrix of North Carolina, Inc. (or
successor to the merger or other combination of such
entities) with respect to the Power Generation Facilities
located at Elizabethtown, Kenansville, Lumberton, Southport
and Roxboro, North Carolina; (ii) Cogentrix Virginia Leasing
Corporation and ▇▇▇▇▇ River Cogeneration Company (or
successor to the merger or other combination of such
entities) with respect to the Power Generation Facilities
located at Portsmouth and Hopewell, Virginia; and
(iii) Subsidiaries of the Borrower or Joint Ventures in
which the Borrower or one of its Subsidiaries is a partner,
shareholder, member or other participant, which become such
after the date of this Agreement, incurred thereafter with
respect to the development or acquisition by such
Subsidiaries or Joint Ventures of multiple Power Generation
Facilities, so long as no such Subsidiary or Joint Venture
has any direct or indirect interest in any Power Generation
Facility other than the Power Generation Facilities to be
developed or acquired or in any other business.
"Notes": the collective reference to the Revolving
Credit Notes and the Term Notes.
"Obligations": all of the Debt, obligations and
liabilities of the Loan Parties to the Agent, the Issuing
Bank, the Lenders or to any of them now or in the future
existing under or in connection with this Agreement, the
18
23
Notes, the CDH Guarantee or any other Loan Document (as any
of the foregoing may from time to time be amended, modified,
substituted, extended, or renewed), direct or indirect,
absolute or contingent, due or to become due, now or
hereafter existing.
"Parent Cash Flow Coverage Ratio": for any period, the
ratio of (i) Adjusted Parent Operating Cash Flow for such
period to (ii) Parent Corporate Charges for such period.
"Parent Corporate Charges": for any period, the sum of
the following amounts (determined without duplication), in
each case to the extent paid by the Borrower during such
period and regardless of whether any such amount was accrued
during such period:
(a) interest expenses of the Borrower for
such period, including without limitation all
commissions, discounts, other fees and charges owed
with respect to letters of credit and bankers'
acceptance financing and net costs associated with
Interest Rate Protection Agreements; and
(b) rental payments and other expenses of
the Borrower for such period under any Capitalized
Lease.
"Parent Operating Cash Flow": for any period, the sum
of the following amounts (determined without duplication),
but only to the extent received in cash by the Borrower
during such period and regardless of whether any such amount
was accrued during such period:
(a) dividends and distributions paid to the
Borrower by its Subsidiaries during such period;
(b) development, consulting, management or
other fees paid to the Borrower during such period;
(c) tax-sharing payments made to the
Borrower during such period;
(d) interest, dividends and other
distributions paid during such period with respect to
cash and cash investments of the Borrower (other than
with respect to amounts on deposit in the Cash
Collateral Account except to the extent of any interest
earnings on cash deposited in the Cash Collateral
Account actually paid to the Borrower pursuant to
Section 3.9(c)); and
(e) other cash payments made to the Borrower
by its Subsidiaries other than (i) returns of invested
capital upon liquidation or sale, (ii) payments of the
principal of Debt of any such Subsidiary to the
Borrower and (iii) payments in an amount equal to the
19
24
aggregate amount released from debt service reserve
accounts upon the issuance of Letters of Credit for the
benefit of the beneficiaries of such accounts.
"Participant": as defined in subsection 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"Performance Letter of Credit": as defined in clause
(i)(2) of subsection 3.1(b).
"Permitted Holders": (a) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇
(collectively, the "Current Holders"), (b) members of the
immediate families of the Current Holders, (c) trusts for
the benefit of Current Holders and members of the immediate
families of the Current Holders, and (d) a non-profit
corporation or foundation controlled by any of the Persons
described in (a), (b) or (c) of this definition. Members of
a Person's "immediate family" shall mean such Person's
parents, brothers, sisters, spouse and lineal descendants.
"Permitted Investment": any Investment of the type
specified in clause (iv) of the definition of Restricted
Payment which is made directly or indirectly by the Borrower
and its Subsidiaries; provided that the Person in which the
Investment is made is (a) a Subsidiary which, directly or
indirectly, is or will be engaged in the development,
construction, marketing, management, acquisition, ownership
or operation of a Power Generation Facility or (b) a Joint
Venture; provided further, that, in the case of an
Investment in a Joint Venture, (i) at the time such
Investment is made, the Borrower could Incur at least $1 of
Debt under subsection 7.2; (ii) at the time such Investment
is made, no Event of Default or event that, after the giving
of notice or lapse of time or both would become an Event of
Default, shall have occurred and be continuing; and
(iii) such Investment is in a Joint Venture which, directly
or indirectly, is or will be engaged in the development,
construction, marketing, management, acquisition, ownership
or operation of a Power Generation Facility.
"Permitted Payments": with respect to the Borrower or
any of its Subsidiaries (i) any dividend on shares of
Capital Stock payable (or to the extent paid) solely in
shares of Capital Stock (other than Redeemable Stock) or in
options, warrants or other rights to purchase Capital Stock
(other than Redeemable Stock); (ii) any dividend or other
distribution payable to the Borrower by any of its
Subsidiaries or by a Subsidiary to a Wholly-Owned
Subsidiary; (iii) the repurchase or other acquisition or
retirement for value of any shares of the Borrower's Capital
Stock, or any option, warrant or other right to purchase
20
25
shares of the Borrower's Capital Stock with additional
shares of, or out of the proceeds of a substantially
contemporaneous issuance of, Capital Stock other than
Redeemable Stock (unless the redemption provisions of such
Redeemable Stock prohibit the redemption thereof prior to
the date on which the Capital Stock to be acquired or
retired was by its terms required to be redeemed); (iv) any
defeasance, redemption, repurchase or other acquisition for
value of any Debt which by its terms ranks subordinate in
right of payment to the Obligations with the proceeds from
the issuance of (x) Debt which is also subordinate to the
Obligations at least to the extent and in the manner as the
Debt to be defeased, redeemed, repurchased or otherwise
acquired is subordinate in right of payment to the
Obligations; provided that such subordinated Debt provides
for no payments of principal by way of sinking fund,
mandatory redemption or otherwise (including defeasance) by
the Borrower (including, without limitation, at the option
of the holder thereof other than an option given to a holder
pursuant to an asset disposition or change of control
covenant which is no more favorable to the holders of such
Debt than the provisions contained in subsections 2.8(b),
7.6, 7.9, 7.10 and 8(j) are to the Lenders and such Debt
provides that the Borrower will not repurchase such Debt
pursuant to such provisions prior to the date that all
Obligations have been paid and performed in full) prior to,
or in an amount greater than, any Stated Maturity of the
Debt being replaced and the proceeds of such subordinated
Debt are utilized for such purpose within 45 days of
issuance or (y) Capital Stock (other than Redeemable Stock);
(v) in respect of any actual payment on account of an
Investment (other than a Permitted Investment) which is not
fixed in amount at the time when made, the amount determined
by the Board of Directors to be a Restricted Payment on the
date such Investment was originally deemed to have been made
(the "Original Restricted Payment Charge") plus an amount
equal to the interest on a hypothetical investment in a
principal amount equal to the Original Restricted Payment
Charge assuming interest at a rate of 7% per annum
compounded annually for a period beginning on the date the
Investment was originally deemed to have been made and
ending with respect to any portion of the Original
Restricted Payment Charge actually paid on the date of
actual payment less any actual payments previously made on
account of such Investment; provided that the Permitted
Payment under this clause (v) shall in no event exceed the
payment actually made; (vi) any amount required to be paid
with respect to an obligation outstanding on the date of
this Agreement; or (vii) a Permitted Investment.
"Person": an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other
entity of whatever nature.
21
26
"Plan": at a particular time, any employee benefit
plan which is covered by ERISA and in respect of which the
Borrower or a Commonly Controlled Entity is (or, if such
plan were terminated at such time, would under Section 4069
of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Power Generation Facility": an electric power or
thermal energy generation or cogeneration facility or
related facilities (including residual waste management and,
to the extent such facilities are in existence on the date
of this Agreement or are required by contract or applicable
law, rule or regulation, facilities that use thermal energy
from a cogeneration facility), and its or their related
electric power transmission, fuel supply and fuel
transportation facilities, together with its or their
related power supply, thermal energy and fuel contracts and
other facilities, services or goods that are ancillary,
incidental, necessary or reasonably related to the
marketing, development, construction, management or
operation of the foregoing, as well as other contractual
arrangements with customers, suppliers and contractors.
"Preferred Stock": with respect to any Person, any and
all shares, interests, participations or other equivalents
(however designated, whether voting or non-voting) of
preferred or preference stock of such Person which is
outstanding or issued on or after the date of this
Agreement.
"Project Properties": as defined in subsection 4.15.
"Property": as to any Person, all types of real,
personal, tangible, intangible or mixed property owned by
such Person whether or not included in the most recent
consolidated balance sheet of such Person under GAAP.
"Redeemable Stock": any class or series of Capital
Stock of any Person that by its terms or otherwise is
(i) required to be redeemed prior to the later of the Final
Maturity Date or the Stated Maturity of the Borrower
Indenture Securities, (ii) redeemable at the option of the
holder of such class or series of Capital Stock at any time
prior to the later of the Final Maturity Date or the Stated
Maturity of the Borrower Indenture Securities or
(iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Debt having a
scheduled maturity prior to the later of the Final Maturity
Date or the Stated Maturity of the Borrower Indenture
Securities; provided that any Capital Stock that would not
constitute Redeemable Stock but for provisions thereof
giving holders thereof the right to require the Borrower to
repurchase or redeem such Capital Stock upon the occurrence
of an "asset sale" or a "change of control" occurring prior
22
27
to the later of the Final Maturity Date or the Stated
Maturity of the Borrower Indenture Securities shall not
constitute Redeemable Stock if the asset disposition or
change of control provision applicable to such Capital Stock
is no more favorable to the holders of such Capital Stock
than the provisions contained in subsections 2.8(b), 7.6,
7.9, 7.10 and 8(j) are to the Lenders and such Capital Stock
specifically provides that the Borrower will not repurchase
or redeem any such Capital Stock pursuant to such provisions
prior to the date that all Obligations have been paid and
performed in full.
"Reference Period": the four complete fiscal quarters
for which financial information is available preceding the
date of a transaction giving rise to the need to make a
financial calculation; provided, that for purposes of this
definition financial information shall not be considered
unavailable for any fiscal quarter on any day that is 30 or
more days after the last day of such fiscal quarter.
"Refinance": to issue Debt in order to substantially
concurrently repay, redeem, defease, refund, refinance,
discharge or otherwise retire for value, in whole or in
part, other Debt or securities.
"Register": as defined in subsection 10.6(d).
"Regulation U": Regulation U of the Board of Governors
of the Federal Reserve System as in effect from time to
time.
"Reimbursement Obligation": the obligation of the
Borrower to reimburse the Issuing Bank pursuant to
subsection 3.5(a) for amounts drawn under Letters of Credit.
"Reorganization": with respect to any Multiemployer
Plan, the condition that such plan is in reorganization
within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in
Section 4043(b) of ERISA, other than those events as to
which the thirty day notice period is waived under
subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
Section 2615.
"Required Lenders": at any time, Lenders the
Commitment Percentages of which aggregate at least 66-2/3%.
"Requirement of Law": as to any Person, the
Certificate of Incorporation and By-Laws or other
organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any
23
28
of its property or to which such Person or any of its
property is subject.
"Responsible Officer": the chief executive officer or
the president of the Borrower or, with respect to financial
matters, the chief financial officer, the vice president-
finance or the treasurer of the Borrower.
"Restricted Payment": with respect to any Person,
(i) any dividend or other distribution on any shares of such
Person's Capital Stock; (ii) any payment on account of the
purchase, redemption, retirement or acquisition for value of
such Person's Capital Stock; (iii) any defeasance,
redemption, repurchase or other acquisition or retirement
for value prior to the Stated Maturity of any Debt ranked
subordinate in right of payment to the Obligations; and
(iv) any Investment made in an Affiliate (other than the
Borrower or CDH). Notwithstanding the foregoing,
"Restricted Payment" shall not include any Permitted
Payment.
"Revolving Credit Loans": as defined in
subsection 2.1.
"Revolving Credit Note": as defined in
subsection 2.7(e).
"Revolving Credit Termination Date": the third
anniversary of the Closing Date or such later date to which
the Revolving Credit Termination Date shall have been
extended pursuant to subsection 2.1(c); provided, that, if
such day is not a Eurodollar Business Day, the Revolving
Credit Termination Date shall be the next succeeding
Eurodollar Business Day.
"Significant Subsidiary": of a Person, as of any date,
any Subsidiary, or two or more Subsidiaries taken together
in the event of a cross-collateralization of such multiple
Subsidiaries' Debt, which has two or more of the following
attributes: (i) it contributes 20% or more of such Person's
Excess Cash Flow for its most recently completed fiscal
quarter or (ii) it contributed 15% or more of Net Income
before tax of such Person and its consolidated Subsidiaries
for such Person's most recently completed fiscal quarter or
(iii) it constituted 20% or more of Consolidated Total
Assets of such Person at the end of such Person's most
recently completed fiscal quarter.
"Single Employer Plan": any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Stated Maturity": with respect to any debt security
or any installment of interest thereon, the date specified
in such debt security as the fixed date on which any
24
29
principal of such debt security or any such installment of
interest is due and payable.
"Subsidiary": with respect to any Person, any
corporation or other entity of which a majority of the
Capital Stock or other ownership interests having ordinary
voting power (other than stock or such other ownership
interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of
directors or other persons performing similar functions are
at the time directly or indirectly owned by such Person.
Unless otherwise qualified, all references to a "Subsidiary"
or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.
"Term Loan": as defined in subsection 2.5.
"Term Loan Payment Amount": for any Term Loan
Reduction Date, an amount (not less than zero) equal to the
lesser of (a) the then aggregate outstanding principal
amount of the Term Loans and (b) 25% of the Amortization
Amount; provided, that the Term Loan Payment Amount for the
Term Loan Reduction Date occurring on the Final Maturity
Date shall be equal to the then aggregate outstanding
principal amount of the Term Loans.
"Term Loan Reduction Dates": (a) the dates that are
six months, twelve months and eighteen months after the
Revolving Credit Termination Date and (b) the Final Maturity
Date.
"Term Note": as defined in subsection 2.7(e).
"Trade Payables": with respect to any Person, any
accounts payable or any other indebtedness or monetary
obligation to trade creditors created, assumed or Guaranteed
by such Person or any of its Subsidiaries arising in the
ordinary course of business in connection with the
acquisition of goods or services.
"Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all
of which begin on the same date and end on the same later
date (whether or not such Loans shall originally have been
made on the same day).
"Transferee": as defined in subsection 10.6(f).
"Type": (a) as to any Loan, its nature as an ABR Loan
or a Eurodollar Loan and (b) as to any Letter of Credit, its
nature as a Financial Letter of Credit or a Performance
Letter of Credit.
25
30
"Uniform Customs": the Uniform Customs and Practice
for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, as the same may be
amended from time to time.
"Voting Stock": with respect to any Person, Capital
Stock of any class or kind ordinarily having the power to
vote for the election of directors (or persons fulfilling
similar responsibilities) of such Person.
"Wholly-Owned Subsidiary": with respect to any Person,
any Subsidiary of such Person if all of the Capital Stock or
other ownership interests in such Subsidiary having ordinary
voting power (other than stock or such other ownership
interests having such power only by reason of the happening
of a contingency) to elect the entire board of directors or
entire group of other persons performing similar functions
(other than any director's qualifying shares or Investments
by foreign nationals mandated by applicable law) is owned
directly or indirectly, by one or more Wholly-Owned
Subsidiaries of such Person's Wholly-Owned Subsidiaries, by
such Person.
1.2 Other Definitional Provisions. (a) Unless
otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings when used in any Notes or any
certificate or other document made or delivered pursuant hereto.
(b) As used herein and in any Notes, and any
certificate or other document made or delivered pursuant hereto,
accounting terms relating to the Borrower and its Subsidiaries
not defined in subsection 1.1 and accounting terms partly defined
in subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and Section, subsection, Schedule and
Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of
such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the
terms and conditions hereof, each Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower
from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding which, when added to
26
31
such Lender's Commitment Percentage of the then outstanding L/C
Obligations, does not exceed the amount of such Lender's
Commitment. During the Commitment Period the Borrower may use
the Commitments by borrowing, prepaying and reborrowing the
Revolving Credit Loans in whole or in part, all in accordance
with the terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time
be (i) Eurodollar Loans, (ii) ABR Loans or (iii) a combination
thereof, as determined by the Borrower and notified to the Agent
in accordance with subsections 2.2 and 2.9, provided that no
Revolving Credit Loan shall be made as a Eurodollar Loan after
the day that is one month prior to the Revolving Credit
Termination Date.
(c) The Revolving Credit Termination Date may be
extended, in the manner set forth in this subsection 2.1(c), on
the first anniversary of the Closing Date and each such
anniversary thereafter (each, an "Extension Date"), in each case
for a period of one year after the Revolving Credit Termination
Date theretofore in effect. If the Borrower wishes to request an
extension of the Revolving Credit Termination Date on any
Extension Date, it shall give written notice to that effect to
the Agent not less than 45 nor more than 90 days prior to such
Extension Date, whereupon the Agent shall notify each of the
Lenders of such notice. Each Lender will use reasonable efforts
to respond to such request, whether affirmatively or negatively,
no later than 15 days prior to such Extension Date. If all
Lenders respond affirmatively (any Lender which does not respond
being deemed to have responded negatively), then, subject to
receipt by the Agent prior to such Extension Date of counterparts
of an Extension Agreement in substantially the form of Exhibit D
duly completed and signed by all of the parties hereto, the
Revolving Credit Termination Date shall be extended, effective on
such Extension Date, for a period of one year to the date stated
in such Extension Agreement.
2.2 Procedure for Revolving Credit Borrowing. The
Borrower may borrow under the Commitments during the Commitment
Period on any Business Day in the case of ABR Loans and on any
Eurodollar Business Day in the case of Eurodollar Loans, provided
that the Borrower shall have delivered to the Agent a properly
completed Borrowing Request, duly executed by a Responsible
Officer of the Borrower, which notice shall be irrevocable and
must be received by the Agent prior to 10:00 A.M., New York City
time, (a) three Eurodollar Business Days prior to the requested
Borrowing Date, if all or any part of the requested Revolving
Credit Loans are to be initially Eurodollar Loans or (b) one
Business Day prior to the requested Borrowing Date, otherwise.
In each such Borrowing Request, the Borrower shall, in addition
to any other information required to be therein, specify (i) the
amount to be borrowed, (ii) the requested Borrowing Date,
(iii) whether the borrowing is to be of Eurodollar Loans, ABR
Loans or a combination thereof and (iv) if the borrowing is to be
27
32
entirely or partly of Eurodollar Loans, the respective amounts of
each such Type of Loan and the respective lengths of the initial
Interest Periods therefor. Each borrowing under the Commitments
of ABR Loans and each borrowing under the Commitments of
Eurodollar Loans shall be in an amount equal to $1,000,000 or a
whole multiple of $500,000 in excess thereof. Upon receipt of
any such notice from the Borrower, the Agent shall promptly
notify each Lender thereof. Each Lender will make the amount of
its pro rata share of each borrowing available to the Agent for
the account of the Borrower at the office of the Agent specified
in subsection 10.2 prior to 11:00 A.M., New York City time, on
the Borrowing Date requested by the Borrower in funds immediately
available to the Agent. Such borrowing will then be made
available to the Borrower by the Agent by wire transfer to the
account specified in the Borrowing Request, in the amount of the
aggregate of the amounts made available to the Agent by the
Lenders and in like funds as received by the Agent.
2.3 Fees. (a) Commitment Fee. The Borrower agrees
to pay to the Agent for the account of each Lender a commitment
fee (a "Commitment Fee") for the Commitment Period computed at a
rate per annum equal to the Applicable Margin in effect from time
to time for the Commitment Fee, such fee to be paid on the
average daily amount of the Available Commitment of such Lender
during the period for which payment is made. The Commitment Fee
shall be payable quarterly in arrears on the last day of each
March, June, September and December and on the Revolving Credit
Termination Date or such earlier date as the Commitments shall
terminate as provided herein, commencing on the first of such
dates to occur after the date hereof.
(b) Up-Front Fee. The Borrower agrees to pay to ANZ
on the Closing Date for its own account an up-front fee in the
amount as set forth in the letter agreement dated May 22, 1997,
between the Borrower and ANZ (the "Fee Letter").
(c) Administration Fee. The Borrower agrees to pay to
the Agent, for its own account, a non-refundable fee (the
"Administration Fee") for its administration of this Agreement in
the amount and at the times set forth in the Fee Letter.
2.4 Termination or Reduction of Commitments.
(a) Optional. The Borrower shall have the right, upon
not less than thirty days' notice to the Agent, to terminate the
Commitments or, from time to time, to reduce the amount of the
Commitments. Any such reduction shall be in an amount equal to
$1,000,000 or a whole multiple of $500,000 in excess thereof and
shall reduce permanently the Commitments then in effect.
Termination of the Commitments shall also terminate the
obligation of the Lenders to make the Term Loans.
(b) Mandatory. In the event that (i) the Borrower or
any of its Subsidiaries shall at any time before the day that is
28
33
366 days before the Revolving Credit Termination Date receive any
payment representing all or any part of the Net Cash Proceeds of
an Asset Disposition made by the Borrower or any of its
Subsidiaries and (ii) such payment shall not have been invested
in its entirety by the Borrower or its Subsidiaries in the
business or businesses of the Borrower or any of its Subsidiaries
within 364 days of the receipt of such payment, the amount of the
Commitments shall be mandatorily reduced on the day that is 365
days after the receipt of such payment in an amount equal to the
product of (x) the amount of the payment of Net Cash Proceeds not
so invested times (y) the fraction obtained by dividing (A) the
amount of the Commitments then in effect by (B) the sum of the
amount of the Commitments then in effect plus the aggregate
principal amount of the Borrower Indenture Securities then
outstanding.
2.5 Term Loans. Subject to the terms and conditions
hereof, each Lender severally agrees to make a term loan (a "Term
Loan") to the Borrower on the Revolving Credit Termination Date
in an amount not to exceed the amount of the aggregate principal
amount of the Revolving Credit Loans of such Lender then
outstanding. The Term Loans may from time to time be
(a) Eurodollar Loans, (b) ABR Loans or (c) a combination thereof,
as determined by the Borrower and notified to the Agent in
accordance with subsections 2.6 and 2.9.
2.6 Procedure for Term Loan Borrowing. The Borrower
shall give the Agent irrevocable notice (which notice must be
received by the Agent prior to 10:00 A.M., New York City time,
(a) three Eurodollar Business Days prior to the Revolving Credit
Termination Date, if all or any part of the Term Loans are to be
initially Eurodollar Loans or (b) one Business Day prior to the
Revolving Credit Termination Date, otherwise) requesting that the
Lenders make the Term Loans on the Revolving Credit Termination
Date and specifying (i) the amount to be borrowed, (ii) whether
the Term Loans are to be initially Eurodollar Loans, ABR Loans or
a combination thereof, and (iii) if the Term Loans are to be
entirely or partly Eurodollar Loans, the respective amounts of
each such Type of Loan and the respective lengths of the initial
Interest Periods therefor. Upon receipt of such notice the Agent
shall promptly notify each Lender thereof. If the aggregate
principal amount of the Term Loans is to be less than the
aggregate principal amount of the Revolving Credit Loans then
outstanding, the Borrower shall pay any difference to the Agent
on behalf of the Lenders on the Revolving Credit Termination
Date. Promptly after the making of its Term Loan each Lender
shall ▇▇▇▇ any Revolving Credit Note held by it "cancelled" and
deliver the same to the Borrower.
2.7 Repayment of Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay to the Agent for
the account of each Lender:
29
34
(i) the then unpaid principal amount of each
Revolving Credit Loan of such Lender on the Revolving Credit
Termination Date (or such earlier date on which the
Revolving Credit Loans become due and payable pursuant to
Section 8); and
(ii) the principal amount of the Term Loan of
such Lender in four installments, each payable on a Term
Loan Reduction Date in an aggregate principal amount equal
to such Lender's Commitment Percentage of the Term Loan
Payment Amount for such Term Loan Reduction Date (or the
then unpaid principal amount of such Term Loan, on the date
that the Term Loans become due and payable pursuant to
Section 8).
The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding from
the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in subsection 2.11.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of
the Borrower to such Lender resulting from each Loan of such
Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time under
this Agreement.
(c) The Agent shall maintain the Register pursuant to
subsection 10.6(d), and a subaccount therein for each Lender, in
which shall be recorded (i) the amount of each Revolving Credit
Loan and Term Loan made hereunder, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder and (iii) both
the amount of any sum received by the Agent hereunder from the
Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts
of each Lender maintained pursuant to subsection 2.7(b) shall, to
the extent permitted by applicable law, be prima facie evidence
of the existence and amounts of the obligations of the Borrower
therein recorded; provided, however, that the failure of any
Lender or the Agent to maintain the Register or any such account,
or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest)
the Loans made to such Borrower by such Lender in accordance with
the terms of this Agreement.
(e) The Borrower agrees that it will execute and
deliver to each Lender (i) upon the Closing Date, a promissory
note of the Borrower evidencing the Revolving Credit Loans of
such Lender, substantially in the form of Exhibit A with
appropriate insertions as to date and principal amount (a
"Revolving Credit Note") and (ii) upon the Revolving Credit
Termination Date, a promissory note of the Borrower evidencing
30
35
the Term Loan of such Lender made on such date, substantially in
the form of Exhibit B with appropriate insertions as to date and
principal amount (a "Term Note").
2.8 Prepayments.
(a) Optional. The Borrower may on the last day of any
Interest Period with respect thereto, in the case of Eurodollar
Loans, or at any time and from time to time, in the case of ABR
Loans, prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice to the Agent, specifying the
date and amount of prepayment and whether the prepayment is of
Eurodollar Loans, ABR Loans or a combination thereof, and, if of
a combination thereof, the amount allocable to each, which notice
must be received by the Agent at least (i) three Eurodollar
Business Days prior to the date of prepayment if any of the Loans
to be prepaid are Eurodollar Loans and (ii) one Business Day
prior to the date of prepayment, otherwise. Upon receipt of any
such notice the Agent shall promptly notify each Lender thereof.
If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together
with any amounts payable pursuant to subsection 2.18 and accrued
interest to such date on the amount prepaid. Amounts prepaid on
account of the Term Loans may not be reborrowed. Partial
prepayments shall be in an aggregate principal amount of
$1,000,000 or a whole multiple of $500,000 in excess thereof.
(b) Mandatory.
(i) In the event that the Commitments shall
have been reduced pursuant to subsection 2.4 and the
aggregate principal amount of the Revolving Credit Loans
then outstanding, when added to the then outstanding L/C
Obligations, exceed the Commitments in effect after such
reduction less the aggregate amount then on deposit in the
Cash Collateral Account (excluding any amounts then on
deposit representing interest or other earnings thereon),
the Borrower shall apply an amount equal to the amount of
such excess to prepay the Loans or to cash collateralize the
Letters of Credit or both.
(ii) In the event that (1) the Borrower or any
of its Subsidiaries shall at any time on or after the day
that is 366 days before the Revolving Credit Termination
Date receive any payment representing all or any part of the
Net Cash Proceeds of an Asset Disposition made by the
Borrower or any of its Subsidiaries and (2) such payment
shall not have been invested in its entirety by the Borrower
or its Subsidiaries in the business or businesses of the
Borrower or any of its Subsidiaries within 364 days of the
receipt of such payment, the Borrower shall, on the day that
is 365 days after the receipt of such payment, apply an
amount equal to the product of (x) the amount of the payment
of Net Cash Proceeds not so invested times (y) the fraction
31
36
obtained by dividing (A) the amount of the then Aggregate
Outstanding Extensions of Credit of all Lenders by (B) the
sum of the amount of the then Aggregate Outstanding
Extensions of Credit of all Lenders plus the aggregate
principal amount of the Borrower Indenture Securities then
outstanding, to prepay the Loans or to cash collateralize
the Letters of Credit or both.
(iii) Amounts to be applied pursuant to
clause (i) or (ii) of this subsection 2.8(b) shall be
applied first to prepay the principal amount of the Loans
then outstanding until all such Loans shall have been
prepaid in full, and if any excess then remains such excess
shall be deposited in the Cash Collateral Account to be
held, applied or released for application as provided in
subsection 3.9. The particular Loans to be prepaid shall be
designated by the Borrower (or, failing such designation, as
the Agent may determine). Each prepayment shall be applied
to prepay ratably the Loans of the Lenders. Each payment of
principal shall be made together with interest accrued on
the amount prepaid to the date of payment.
2.9 Conversion and Continuation Options. (a) The
Borrower may elect from time to time to convert Eurodollar Loans
to ABR Loans by giving the Agent at least two Eurodollar Business
Days' prior irrevocable notice of such election, provided that
any such conversion of Eurodollar Loans may only be made on the
last day of an Interest Period with respect thereto. The
Borrower may elect from time to time to convert ABR Loans to
Eurodollar Loans by giving the Agent at least three Eurodollar
Business Days' prior irrevocable notice of such election. Any
such notice of conversion to Eurodollar Loans shall specify the
length of the initial Interest Period or Interest Periods
therefor. Upon receipt of any such notice the Agent shall
promptly notify each Lender thereof. All or any part of
outstanding Eurodollar Loans or ABR Loans may be converted as
provided herein, provided that (i) no Loan may be converted into
a Eurodollar Loan when any Event of Default has occurred and is
continuing and (ii) no Loan may be converted into a Eurodollar
Loan after the date that is one month prior to the Revolving
Credit Termination Date (in the case of conversions of Revolving
Credit Loans) or the Final Maturity Date.
(b) Any Eurodollar Loans may be continued as such upon
the expiration of the then current Interest Period with respect
thereto by the Borrower giving notice to the Agent, in accordance
with the applicable provisions of the term "Interest Period" set
forth in subsection 1.1, of the length of the next Interest
Period to be applicable to such Loans, provided that no
Eurodollar Loan may be continued as such (i) when any Event of
Default has occurred and is continuing or (ii) after the date
that is one month prior to the Revolving Credit Termination Date
(in the case of continuations of Revolving Credit Loans) or the
Final Maturity Date and provided, further, that if the Borrower
32
37
shall fail to give such notice or if such continuation is not
permitted such Loans shall be automatically converted to ABR
Loans on the last day of such then expiring Interest Period.
2.10 Minimum Amounts and Maximum Number of Tranches.
All borrowings, conversions and continuations of Loans hereunder
and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, after
giving effect thereto, the aggregate principal amount of the
Loans comprising each Tranche shall be equal to $1,000,000 or a
whole multiple of $500,000 in excess thereof.
2.11 Interest Rates and Payment Dates. (a) Each
Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to
the Eurodollar Rate determined for such day plus the Applicable
Margin for such Type of Loan.
(b) Each ABR Loan shall bear interest at a rate per
annum equal to the ABR plus the Applicable Margin for such Type
of Loan.
(c) If all or a portion of (i) any principal of any
Loan, (ii) any interest payable thereon, (iii) the Commitment
Fee, the Administration Fee, any Fronting Fee or any Letter of
Credit Fee or (iv) any other amount payable hereunder or under
any other Loan Document shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), the principal
of the Loans and any such overdue interest, Commitment Fee,
Administration Fee, Fronting Fee, Letter of Credit Fee or other
amount shall bear interest at a rate per annum which is (x) in
the case of principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this
subsection plus 2% or (y) in the case of any such overdue
interest, Commitment Fee, Administration Fee, Fronting Fee,
Letter of Credit Fee or other amount, the rate described in
paragraph (b) of this subsection plus 2%, in each case from the
date of such non-payment until such overdue principal, interest,
Commitment Fee, Administration Fee, Fronting Fee, Letter of
Credit Fee or other amount is paid in full (as well after as
before judgment).
(d) Interest shall be payable in arrears on each
Interest Payment Date, provided that interest accruing pursuant
to paragraph (c) of this subsection shall be payable from time to
time on demand.
2.12 Computation of Interest and Fees. (a) The
Commitment Fee and, whenever it is calculated on the basis of the
Prime Rate, interest shall be calculated on the basis of a 365-
(or 366-, as the case may be) day year for the actual days
elapsed; and, otherwise, interest shall be calculated on the
basis of a 360-day year for the actual days elapsed. The Agent
shall as soon as practicable notify the Borrower and the Lenders
33
38
of each determination of a Eurodollar Rate. Any change in the
interest rate on a Loan resulting from a change in the ABR or the
Eurocurrency Reserve Requirements shall become effective as of
the opening of business on the day on which such change becomes
effective. The Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of
each such change in interest rate.
(b) Each determination of an interest rate by the
Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the
absence of manifest error. The Agent shall, at the request of
the Borrower, deliver to the Borrower a statement showing the
quotations used by the Agent in determining any interest rate
pursuant to subsection 2.11(a) or (c).
2.13 Inability to Determine Interest Rate. If prior
to the first day of any Interest Period:
(a) the Agent shall have determined (which
determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist
for ascertaining the Eurodollar Rate for such Interest
Period, or
(b) the Agent shall have received notice from the
Majority Lenders that the Eurodollar Rate determined or to
be determined for such Interest Period will not adequately
and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If
such notice is given (x) any Eurodollar Loans requested to be
made on the first day of such Interest Period shall be made as
ABR Loans, (y) any Loans that were to have been converted on the
first day of such Interest Period to Eurodollar Loans shall be
continued as ABR Loans and (z) any outstanding Eurodollar Loans
that were to have been continued as such on such first day shall
be converted on such day to ABR Loans. Until such notice has
been withdrawn by the Agent, no further Eurodollar Loans shall be
made or continued as such, nor shall the Borrower have the right
to convert Loans to Eurodollar Loans.
2.14 Pro Rata Treatment and Payments. (a) Each
borrowing by the Borrower from the Lenders hereunder, each
payment by the Borrower of the Commitment Fee or any Letter of
Credit Fee and any reduction of the Commitments of the Lenders
shall be made pro rata according to the respective Commitment
Percentages of the Lenders. Each payment (including each
prepayment) by the Borrower on account of principal of and
interest on the Loans shall be made pro rata according to the
34
39
respective outstanding principal amounts of the Loans then held
by the Lenders. All payments (including prepayments) to be made
by the Borrower hereunder, whether on account of principal,
interest, fees or otherwise, shall be made without set off or
counterclaim and shall be made prior to 11:00 a.m., New York City
time, on the due date thereof to the Agent, for the account of
the Lenders, at the Agent's office specified in subsection 10.2,
in Dollars and in immediately available funds. The Agent shall
distribute such payments to the Lenders promptly upon receipt in
like funds as received. If any payment hereunder (other than a
payment on any Eurodollar Loan) becomes due and payable on a day
other than a Business Day, such payment shall be extended to the
next succeeding Business Day, and, with respect to payments of
principal, interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a
Eurodollar Loan becomes due and payable on a day other than a
Eurodollar Business Day, the maturity thereof shall be extended
to the next succeeding Eurodollar Business Day (unless the result
of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the
immediately preceding Eurodollar Business Day) and, with respect
to payments of principal, interest thereon shall be payable at
the then applicable rate during any such extension.
(b) Unless the Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will
not make the amount that would constitute its Commitment
Percentage of such borrowing available to the Agent, the Agent
may assume that such Lender is making such amount available to
the Agent, and the Agent may, in reliance upon such assumption,
make available to the Borrower a corresponding amount. If such
amount is not made available to the Agent by the required time on
the Borrowing Date therefor, such Lender shall pay to the Agent,
on demand, such amount with interest thereon at a rate equal to
the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the
Agent. A certificate of the Agent submitted to any Lender with
respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error. If such Lender's
Commitment Percentage of such borrowing is not made available to
the Agent by such Lender within three Business Days of such
Borrowing Date, the Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to
ABR Loans hereunder, on demand, from the Borrower.
2.15 Illegality. Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of
Law or in the interpretation or application thereof shall make it
unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Agreement, (a) the commitment of such Lender
hereunder to make Eurodollar Loans, continue Eurodollar Loans as
such and convert ABR Loans to Eurodollar Loans shall forthwith be
cancelled and (b) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to ABR
35
40
Loans on the respective last days of the then current Interest
Periods with respect to such Loans or within such earlier period
as required by law. If any such conversion of a Eurodollar Loan
occurs on a day which is not the last day of the then current
Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to
subsection 2.18.
2.16 Requirements of Law. (a) If the adoption of or
any change in any Requirement of Law or in the interpretation or
application thereof or compliance by any Lender or the Issuing
Bank with any request or directive (whether or not having the
force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender or the Issuing Bank to
any tax of any kind whatsoever with respect to this
Agreement, the CDH Guarantee, any Note, any Letter of
Credit, any Issuance Request or any Eurodollar Loan made by
it, or change the basis of taxation of payments to such
Lender or the Issuing Bank in respect thereof (except for
Non-Excluded Taxes covered by subsection 2.17 and changes in
the rate of tax on the overall net income of such Lender or
the Issuing Bank);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of
funds by, any office of such Lender or the Issuing Bank
which is not otherwise included in the determination of the
Eurodollar Rate hereunder; or
(iii) shall impose on such Lender or the Issuing
Bank any other condition;
and the result of any of the foregoing is to increase the cost to
such Lender or the Issuing Bank, by an amount which such Lender
or the Issuing Bank, as the case may be, deems to be material, of
making, converting into, continuing or maintaining Eurodollar
Loans or issuing or participating in Letters of Credit or to
reduce any amount receivable hereunder in respect thereof, then,
in any such case, the Borrower shall promptly pay such Lender or
the Issuing Bank such additional amount or amounts as will
compensate such Lender or the Issuing Bank, as the case may be,
for such increased cost or reduced amount receivable.
(b) If any Lender or the Issuing Bank shall have
determined that the adoption of or any change in any Requirement
of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or the Issuing
Bank or any corporation controlling such Lender or the Issuing
Bank with any request or directive regarding capital adequacy
36
41
(whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the
effect of reducing the rate of return on such Lender's or the
Issuing Bank's or such corporation's capital as a consequence of
its obligations hereunder or under any Letter of Credit to a
level below that which such Lender or the Issuing Bank or such
corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or the
Issuing Bank's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender or the
Issuing Bank to be material, then from time to time, the Borrower
shall promptly pay to such Lender or the Issuing Bank such
additional amount or amounts as will compensate such Lender or
the Issuing Bank, as the case may be, for such reduction.
(c) If any Lender or the Issuing Bank becomes entitled
to claim any additional amounts pursuant to this subsection, it
shall promptly notify the Borrower (with a copy to the Agent) of
the event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to this
subsection submitted by such Lender or the Issuing Bank to the
Borrower (with a copy to the Agent) shall be conclusive in the
absence of manifest error. The agreements in this subsection
shall survive the termination of this Agreement and the payment
of the Notes, the Loans and all other Obligations.
2.17 Taxes. (a) All payments made by the Borrower
under this Agreement and any Notes shall be made free and clear
of, and without deduction or withholding for or on account of,
any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by
any Governmental Authority, excluding net income taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on
the Agent or the Issuing Bank or any Lender as a result of a
present or former connection between the Agent or the Issuing
Bank or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such
connection arising solely from the Agent or the Issuing Bank or
such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this
Agreement or any Note). If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings ("Non-
Excluded Taxes") are required to be withheld from any amounts
payable to the Agent or the Issuing Bank or any Lender hereunder
or under any Note, the amounts so payable to the Agent or the
Issuing Bank or such Lender shall be increased to the extent
necessary to yield to the Agent or the Issuing Bank or such
Lender (after payment of all Non-Excluded Taxes) interest or any
such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the
Borrower shall not be required to increase any such amounts
payable to any Lender that is not organized under the laws of the
37
42
United States of America or a state thereof if such Lender fails
to comply with the requirements of paragraph (b) of this
subsection. Whenever any Non-Excluded Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall
send to the Agent for its own account or for the account of the
Issuing Bank or such Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing
payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes when due to the appropriate taxing authority or fails to
remit to the Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent, the
Issuing Bank and the Lenders for any incremental taxes, interest
or penalties that may become payable by the Agent or the Issuing
Bank or any Lender as a result of any such failure. The
agreements in this subsection 2.17(a) shall survive the
termination of this Agreement and the payment of the Notes, the
Loans and all other Obligations.
(b) Each Lender that is not incorporated under the
laws of the United States of America or a state thereof shall:
(i) deliver to the Borrower and the Agent (A) two duly
completed copies of United States Internal Revenue Service
Form 1001 or 4224, or successor applicable form, as the case
may be, and (B) an Internal Revenue Service Form W-8 or W-9,
or successor applicable form, as the case may be;
(ii) deliver to the Borrower and the Agent two further
copies of any such form or certification on or before the
date that any such form or certification expires or becomes
obsolete and after the occurrence of any event requiring a
change in the most recent form previously delivered by it to
the Borrower; and
(iii) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be
requested by the Borrower or the Agent;
unless in any such case an event (including, without limitation,
any change in treaty, law or regulation) has occurred prior to
the date on which any such delivery would otherwise be required
which renders all such forms inapplicable or which would prevent
such Lender from duly completing and delivering any such form
with respect to it and such Lender so advises the Borrower and
the Agent. Such Lender shall certify (i) in the case of a Form
1001 or 4224, that it is entitled to receive payments under this
Agreement without deduction or withholding of any United States
federal income taxes and (ii) in the case of a Form W-8 or W-9,
that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Lender or a
Participant pursuant to subsection 10.6 shall, upon the
effectiveness of the related transfer, be required to provide all
of the forms and statements required pursuant to this subsection,
38
43
provided that in the case of a Participant such Participant shall
furnish all such required forms and statements to the Lender from
which the related participation shall have been purchased.
2.18 Indemnity. The Borrower agrees to indemnify each
Lender and to hold each Lender harmless from any loss or expense
which such Lender may sustain or incur as a consequence of
(a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in
making any prepayment after the Borrower has given a notice
thereof in accordance with the provisions of this Agreement or
(c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto.
Such indemnification may include an amount equal to the excess,
if any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of
such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the
applicable rate of interest for such Loans provided for herein
(excluding, however, the Applicable Margin included therein, if
any) over (ii) the amount of interest (as reasonably determined
by such Lender) which would have accrued to such Bank on such
amount by placing such amount on deposit for a comparable period
with leading banks in the interbank eurodollar market. This
covenant shall survive the termination of this Agreement and the
payment of the Notes, the Loans and all other Obligations.
2.19 Change of Lending Office. Each Lender agrees
that if it makes any demand for payment under subsection 2.16 or
2.17(a), or if any adoption or change of the type described in
subsection 2.15 shall occur with respect to it, it will use
reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions and so long as such efforts would not
be disadvantageous to it, as determined in its sole discretion)
to designate a different lending office if the making of such a
designation would reduce or obviate the need for the Borrower to
make payments under subsection 2.16 or 2.17(a), or would
eliminate or reduce the effect of any adoption or change
described in subsection 2.15.
2.20 Procedure for Term Loan Repayment. No later than
three Business Days prior to each Term Loan Reduction Date, the
Borrower shall give the Agent irrevocable notice specifying the
Term Loan Payment Amount for such Term Loan Reduction Date and
whether such payment will be of Eurodollar Loans, ABR Loans or a
combination thereof, and, if of a combination thereof, the amount
allocable to each. The Term Loan Payment Amount for any Term
Loan Reduction Date shall be due and payable by the Borrower on
such date, together with any amounts payable pursuant to
39
44
subsection 2.18 and accrued interest to such date on the amount
paid.
2.21 Use of Proceeds. The Borrower shall use the
proceeds of the Revolving Credit Loans solely for working capital
and general corporate purposes in the ordinary course of
business. The Borrower shall use the proceeds of the Term Loans
solely to pay the Revolving Credit Loans.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and
conditions hereof, the Issuing Bank agrees to issue standby
letters of credit ("Letters of Credit") for the account of the
Borrower or, at the Borrower's request, any Subsidiary of the
Borrower on any Business Day during the Commitment Period in such
form as may be approved from time to time by the Issuing Bank;
provided, that the Issuing Bank shall have no obligation to issue
any Letter of Credit if, after giving effect to such issuance,
the Available Commitment for any Lender, or the Letter of Credit
Availability, would be less than zero.
(b) Each Letter of Credit shall:
(i) be denominated in Dollars and shall be
either (1) a standby letter of credit issued to support
financial obligations (incurred in the ordinary course of
business) of the Borrower or any Subsidiary of the Borrower,
contingent or otherwise, to pay money (a "Financial Letter
of Credit") or (2) a standby letter of credit issued to
support non-financial obligations of the Borrower or any
Subsidiary of the Borrower, contingent or otherwise, to
provide goods or services in the ordinary course of business
(a "Performance Letter of Credit");
(ii) have a face amount of (1) not less than
$300,000 and (2) not more than the amount that would, after
giving effect to the issuance thereof, cause the Available
Commitment of any Lender or the Letter of Credit
Availability to be less than zero; and
(iii) expire (1) no earlier than 30 days after
its date of issue and (2) no later than five Business Days
prior to the then Final Maturity Date.
(c) Each Letter of Credit shall be subject to the
Uniform Customs and, to the extent not inconsistent therewith,
the laws of the State of New York.
(d) The Issuing Bank shall not at any time be
obligated to issue any Letter of Credit hereunder if such
issuance would conflict with, or cause the Issuing Bank or any
40
45
L/C Participant to exceed any limits imposed by, any applicable
Requirement of Law.
3.2 Procedure for Issuance of Letters of Credit.
(a) The Borrower may from time to time request that the Issuing
Bank issue a Letter of Credit by delivering to the Agent and the
Issuing Bank a duly executed and completed Issuance Request
therefor, completed to the satisfaction of the Agent and the
Issuing Bank, and such other certificates, documents and other
papers and information relating to such Letter of Credit as the
Issuing Bank may reasonably request consistent with its current
practices and procedures with respect to letters of credit of the
same type. In addition to such other information as is required
to be therein, the Borrower shall specify in any Issuance
Request:
(i) the proposed party for whose account the requested
Letter of Credit would be issued (which shall be either the
Borrower or a Subsidiary of the Borrower);
(ii) the proposed beneficiary of the requested Letter
of Credit;
(iii) the proposed date of issuance of the requested
Letter of Credit;
(iv) the proposed expiry date of the requested Letter
of Credit;
(v) the proposed terms of the requested Letter of
Credit, including the proposed face amount thereof and
whether it would constitute a Financial Letter of Credit or
a Performance Letter of Credit; and
(vi) the transaction that is to be supported or
financed with the requested Letter of Credit, including
identification of the Power Generation Facility, if any, to
which such Letter of Credit would relate.
(b) Upon receipt of any Issuance Request, the Issuing
Bank will process such Issuance Request and the certificates,
documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures
and shall promptly issue the Letter of Credit requested thereby
(but in no event shall the Issuing Bank be required to issue any
Letter of Credit earlier than three Business Days after its
receipt of the Issuance Request therefor and all such other
certificates, documents and other papers and information relating
thereto) by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed by the Issuing
Bank and the Borrower. The Issuing Bank shall furnish a copy of
such Letter of Credit to the Borrower promptly following the
issuance thereof.
41
46
3.3 Fees, Commissions and Other Charges. (a) The
Borrower shall pay to the Agent, for the account of the Issuing
Bank, a fronting fee ("Fronting Fee") with respect to each Letter
of Credit in the amount and at the times set forth in the Fee
Letter.
(b) The Borrower shall pay to the Agent, for the
account of the Issuing Bank and the L/C Participants, a letter of
credit fee ("Letter of Credit Fee") with respect to each Letter
of Credit, computed for the period from and including the date of
the issuance of such Letter of Credit and to but excluding the
date such Letter of Credit expires, at a rate per annum,
calculated on the basis of a 365- (or 366-, as the case may be)
day year, equal to the Applicable Margin in effect from time-to-
time for the Type of such Letter of Credit and calculated on the
aggregate amount available for drawing under such Letter of
Credit for each day during the period for which such fee is then
being calculated. Each Letter of Credit Fee shall be payable to
the L/C Participants to be shared ratably among them in
accordance with their respective Commitment Percentages. Each
Letter of Credit Fee shall be payable in arrears on each L/C Fee
Payment Date to occur after the date of issuance of each Letter
of Credit and shall be nonrefundable.
(c) In addition to the foregoing fees and commissions,
the Borrower shall pay or reimburse the Issuing Bank for such
normal and customary costs and expenses as are incurred or
charged by the Issuing Bank in issuing, effecting payment under,
amending or otherwise administering any Letter of Credit.
(d) The Agent shall, promptly following its receipt
thereof, distribute to the Issuing Bank and the L/C Participants
all fees and commissions received by the Agent for their
respective accounts pursuant to this subsection.
3.4 L/C Participations. (a) The Issuing Bank
irrevocably agrees to grant and hereby grants to each L/C
Participant, and, to induce the Issuing Bank to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the
Issuing Bank, on the terms and conditions hereinafter stated, for
such L/C Participant's own account and risk an undivided interest
equal to such L/C Participant's Commitment Percentage in the
Issuing Bank's obligations and rights under each Letter of Credit
issued hereunder and the amount of each draft paid by the Issuing
Bank thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Bank that, if a draft is paid
under any Letter of Credit for which the Issuing Bank is not
reimbursed in full by the Borrower in accordance with the terms
of this Agreement, such L/C Participant shall pay to the Issuing
Bank upon first demand at the Issuing Bank's address for notices
specified herein an amount equal to such L/C Participant's
Commitment Percentage of the amount of such draft, or any part
thereof, which is not so reimbursed.
42
47
(b) If any amount required to be paid by any L/C
Participant to the Issuing Bank pursuant to subsection 0 in
respect of any unreimbursed portion of any payment made by the
Issuing Bank under any Letter of Credit is paid to the Issuing
Bank within three Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Bank on demand
an amount equal to the product of (i) such amount, times (ii) the
daily average Federal funds rate, as quoted by the Issuing Bank,
during the period from and including the date such payment is
required to the date on which such payment is immediately
available to the Issuing Bank, times (iii) a fraction the
numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount
required to be paid by any L/C Participant pursuant to
subsection 3.4(a) is not in fact made available to the Issuing Bank
by such L/C Participant within three Business Days after the date
such payment is due, the Issuing Bank shall be entitled to
recover from such L/C Participant, on demand, such amount with
interest thereon calculated from such due date at the rate per
annum applicable to ABR Loans hereunder. A certificate of the
Issuing Bank submitted to any L/C Participant with respect to any
amounts owing under this subsection shall be conclusive in the
absence of manifest error.
(c) Whenever, at any time after the Issuing Bank has
made payment under any Letter of Credit and has received from any
L/C Participant its pro rata share of such payment in accordance
with subsection 0, the Issuing Bank receives any payment related
to such Letter of Credit (whether directly from the Borrower or
otherwise, including proceeds of collateral applied thereto by
the Issuing Bank), or any payment of interest on account thereof,
the Issuing Bank will distribute to such L/C Participant its pro
rata share thereof; provided, however, that in the event that any
such payment received by the Issuing Bank shall be required to be
returned by the Issuing Bank, such L/C Participant shall return
to the Issuing Bank the portion thereof previously distributed by
the Issuing Bank to it.
3.5 Reimbursement Obligation of the Borrower.
(a) The Borrower agrees to reimburse the Issuing Bank on each
date on which the Issuing Bank notifies the Borrower of the date
and amount of a draft presented under any Letter of Credit and
paid by the Issuing Bank for the amount of such draft so paid.
Each such payment shall be made to the Issuing Bank at its
address for notices specified herein in lawful money of the
United States of America and in immediately available funds.
(b) Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this subsection from the
date such amounts become payable (whether at stated maturity, by
acceleration or otherwise) until payment in full at the rate
which would be payable on any outstanding ABR Loans which were
then overdue.
43
48
(c) Each drawing under any Letter of Credit during the
Commitment Period shall be deemed a request by the Borrower to
the Agent for a borrowing pursuant to subsection 2.2 (Procedure
for Revolving Credit Borrowing) of ABR Loans in the amount of
such drawing. The Borrowing Date with respect to such borrowing
shall be the date of such drawing.
3.6 Obligations Absolute. (a) The Borrower's
obligations under this Section 3 shall be absolute and
unconditional under any and all circumstances and irrespective of
any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Bank or any
beneficiary of a Letter of Credit.
(b) The Borrower also agrees with the Issuing Bank
that the Issuing Bank shall not be responsible for, and the
Borrower's Reimbursement Obligations under subsection 3.5(a) shall
not be affected by, among other things, (i) the validity or
genuineness of documents or of any endorsements thereon, even
though such documents shall in fact prove to be invalid,
fraudulent or forged, or (ii) any dispute between or among the
Borrower and any beneficiary of any Letter of Credit or any other
party to which such Letter of Credit may be transferred or (iii)
any claims whatsoever of the Borrower against any beneficiary of
such Letter of Credit or any such transferee.
(c) The Issuing Bank shall not be liable for any
error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit, except for errors or
omissions caused by the Issuing Bank's gross negligence or
willful misconduct.
(d) The Borrower agrees that any action taken or
omitted by the Issuing Bank under or in connection with any
Letter of Credit or the related drafts or documents, if done in
the absence of gross negligence of willful misconduct and in
accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the
Borrower and shall not result in any liability of the Issuing
Bank to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing
Bank shall promptly notify the Borrower of the date and amount
thereof. The responsibility of the Issuing Bank to the Borrower
in connection with any draft presented for payment under any
Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to
determining that the documents (including each draft) delivered
under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit.
44
49
3.8 Issuance Request. To the extent that any
provision of any Issuance Request related to any Letter of Credit
is inconsistent with the provisions of this Section 3, the
provisions of this Section 3 shall apply.
3.9 Cash Collateralization. (a) The Borrower shall
on each Term Loan Reduction Date deposit in the Cash Collateral
Account an amount equal to the Mandatory Cash Collateralization
Amount for such Term Loan Reduction Date.
(b) All amounts required to be deposited as cash
collateral with the Agent pursuant to subsection 2.8(b),
subsection 3.9(a) or Section 8 shall be deposited in a cash
collateral account established by the Borrower with the Agent
(the "Cash Collateral Account"), to be held, applied or released
for application as provided in this subsection 3.9. The Borrower
hereby grants to the Agent, for the benefit of the Issuing Bank
and the L/C Participants, a security interest in all cash in the
Cash Collateral Account to secure the Obligations. The Borrower
shall execute and deliver to the Agent, for the account of the
Issuing Bank and the L/C Participants, such further documents and
instruments as the Agent may reasonably request to evidence the
creation and perfection of such security interest in the Cash
Collateral Account.
(c) In the event of a payment by the Issuing Bank of a
draft presented under any Letter of Credit, the amount of such
drawing (but not more than the amount in the Cash Collateral
Account at the time) shall be withdrawn by the Agent from the
Cash Collateral Account and shall be paid to the Issuing Bank to
be applied against such drawing. If on any L/C Fee Payment Date
the amount in the Cash Collateral Account exceeds the then
outstanding L/C Obligations, the excess amount shall, so long as
no Default shall have occurred and be continuing, be withdrawn by
the Agent and paid to the Borrower on such L/C Fee Payment Date.
If an Event of Default shall have occurred and be continuing,
such excess amount shall, if and when requested by the Required
Lenders, be withdrawn by the Agent and applied first to repay the
Loans, Reimbursement Obligations and other due and unpaid amounts
required to be paid by the Borrower hereunder and second any
remaining excess shall be paid to the Borrower.
(d) Interest and other payments and distributions made
on or with respect to the cash collateral held by the Agent in
the Cash Collateral Account shall be for the account of the
Borrower and shall constitute cash collateral to be held by the
Agent or returned to the Borrower in accordance with
subsection 3.9(c). Funds held in the Cash Collateral Account
shall be invested in time deposits with the Agent which pay a
market rate of interest for a like deposit with a comparable
financial institution. Beyond the exercise of reasonable care in
the custody thereof, the Agent shall have no duty as to any cash
collateral in its possession or control or in the possession or
control of any agent or bailee or any income thereon or as to the
45
50
preservation of rights against prior parties or any other rights
the preservation of rights against prior parties or any other
rights pertaining thereto. The Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the
cash collateral in its possession if the cash collateral is
accorded treatment substantially equal to that which it accords
its own property, and shall not be liable or responsible for any
loss or damage to any of the cash collateral, or for any
diminution in the value thereof, by reason of the act or omission
of any agent or bailee selected by the Agent in good faith. All
expenses and liabilities incurred by the Agent in connection with
taking, holding and disposing of any cash collateral (including
customary custody and similar fees with respect to any cash
collateral held directly by the Agent) shall be paid by the
Borrower from time to time upon demand. Upon a Default, the
Agent shall be entitled to apply (and, at the request of the
Required Lenders but subject to applicable law, shall apply) cash
collateral or the proceeds thereof to payment of any such
expenses, liabilities and fees.
3.10 Substitution/Replacement of Issuing Bank.
(a) In the event that the Issuing Bank shall refuse pursuant to
subsection 3.1(d) to issue any Letter of Credit requested by the
Borrower, the Borrower may request any L/C Participant to issue
such Letter of Credit hereunder in substitution for the Issuing
Bank by delivering to such L/C Participant and to the Agent a
duly executed and completed Issuance Request in accordance with
subsection 3.2, and such L/C Participant may agree to issue such
Letter of Credit (but no L/C Participant shall be under any
obligation to do so); provided, that the issuance by such L/C
Participant of such Letter of Credit would not conflict with any
Requirement of Law applicable to any other L/C Participant or
cause any other L/C Participant to exceed any limits imposed by
any applicable Requirement of Law. Any L/C Participant issuing a
Letter of Credit pursuant to this subsection 3.10(a) shall be
deemed hereunder and under the other Loan Documents to be, and to
have all rights, powers, duties and obligations of, the Issuing
Bank for the purposes of such Letter of Credit without any
further act or deed on the part of any of the L/C Participants or
any other party to this Agreement.
(b) If at any time the senior unsecured long-term debt
securities of ANZ shall be rated less than "A1" by ▇▇▇▇▇'▇
Investors Service, Inc. or less than "A+" by Standard & Poor's
Rating Group, the Borrower may request any L/C Participant, and
such L/C Participant may agree, to succeed ANZ as Issuing Bank
hereunder (but no L/C Participant shall be under any obligation
to do so). In such event, upon 10 days' prior written notice to
the Agent, ANZ and each L/C Participant but without any further
act or deed on the part of any of the L/C Participants or any
other party to this Agreement, such L/C Participant shall succeed
ANZ as Issuing Bank hereunder and be deemed hereunder and under
the other Loan Documents to be, and to have all rights, powers,
duties and obligations of, the Issuing Bank for the purposes of
46
51
each Letter of Credit issued thereafter by such L/C Participant;
provided, that ANZ shall remain, and have all rights, powers,
duties and obligations of, the Issuing Bank with respect to (i)
any actions taken or omitted to be taken by it while it was
Issuing Bank and (ii) each Letter of Credit issued by ANZ as
Issuing Bank that shall not have been surrendered and returned to
ANZ by the beneficiary thereof in a manner acceptable to ANZ in
its sole discretion.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agent, the Issuing Bank and the Lenders
to enter into this Agreement and to make the Loans and issue or
participate in the Letters of Credit, the Borrower hereby
represents and warrants to the Agent, the Issuing Bank and each
Lender that:
4.1 Financial Information. (a) The audited
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at June 30, 1996 and the related audited
consolidated statements of income and of cash flows for the
fiscal year ended on such date, reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
LLP, copies of which have heretofore been furnished to each
Lender, are complete and correct and present fairly the
consolidated financial condition of the Borrower and its
consolidated Subsidiaries as at such date, and the consolidated
results of their operations and their consolidated cash flows for
the fiscal year then ended.
(b) The unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at March 31, 1997
and the related unaudited consolidated statements of income and
of cash flows for the nine-month period ended on such date,
certified by a Responsible Officer, copies of which have
heretofore been furnished to each Lender, are complete and
correct and present fairly the consolidated financial condition
of the Borrower and its consolidated Subsidiaries as at such
date, and the consolidated results of their operations and their
consolidated cash flows for the nine-month period then ended
(subject to normal year-end audit adjustments).
(c) All of the financial statements referred to in
clause (a) and (b) above, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved
by such accountants or Responsible Officer, as the case may be,
and as disclosed therein).
(d) Neither the Borrower nor any of its consolidated
Subsidiaries had, at the date of the most recent balance sheet
referred to above, any material Guarantee Obligation, contingent
liability or liability for taxes, or any long-term lease or
unusual forward or long-term commitment, including, without
47
52
limitation, any interest rate or foreign currency swap or
exchange transaction, which is not reflected in the foregoing
statements or in the notes thereto. During the period from
June 30, 1996 to and including the date of this Agreement there
has been no sale, transfer or other disposition by the Borrower
or any of its consolidated Subsidiaries of any material part of
its business or property and no purchase or other acquisition of
any business or property (including any capital stock of any
other Person) material in relation to the consolidated financial
condition of the Borrower and its consolidated Subsidiaries at
June 30, 1996.
4.2 No Change. (a) Except as disclosed on
Schedule III, since June 30, 1996 there has been no development
or event which has had or could reasonably be expected to have a
Material Adverse Effect, and (b) during the period from March 31,
1997 to and including the date of this Agreement no dividends or
other distributions have been declared, paid or made upon the
Capital Stock of the Borrower nor has any of the Capital Stock of
the Borrower been redeemed, retired, purchased or otherwise
acquired for value by the Borrower or any of its Subsidiaries.
4.3 Corporate Existence; Compliance with Law. Each of
the Borrower and its Subsidiaries (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its organization (except, in the case of the Borrower's
Subsidiaries, to the extent that the failure to be so organized,
validly existing or in good standing could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect),
(b) has the corporate or partnership power and authority, and the
legal right, to own and operate its property, to lease the
property it operates as lessee and to conduct the business in
which it is currently engaged (except, in the case of the
Borrower's Subsidiaries, to the extent that the failure to have
such power and authority or legal right could not, in the
aggregate, reasonably be expected to have a Material Adverse
Effect), (c) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its
business requires such qualification (except, in the case of the
Borrower's Subsidiaries, to the extent that the failure to be so
duly qualified or in good standing could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect) and,
(d) is in compliance with all Requirements of Law except to the
extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
4.4 Corporate Power; Authorization; Enforceable
Obligations. The Borrower has the corporate power and authority,
and the legal right, to make, deliver and perform the Loan
Documents to which it is a party and to borrow hereunder and has
taken all necessary corporate action to authorize the borrowings
on the terms and conditions of this Agreement and the Notes and
48
53
to authorize the execution, delivery and performance of the Loan
Documents to which it is a party. No consent or authorization
of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person (other than those that
have been given or made) is required in connection with the
borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of the Loan Documents to
which the Borrower is a party. This Agreement has been, and each
other Loan Document to which it is a party will be, duly executed
and delivered on behalf of the Borrower. This Agreement
constitutes, and each other Loan Document to which it is a party
when executed and delivered will constitute, a legal, valid and
binding obligation of the Borrower enforceable against the
Borrower in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
4.5 No Legal Bar. The execution, delivery and
performance of the Loan Documents to which the Borrower is a
party, the borrowings hereunder and the use of the proceeds
thereof will not violate any Requirement of Law or Contractual
Obligation of the Borrower or of any of its Subsidiaries and will
not result in, or require, the creation or imposition of any Lien
(other than any Lien created by the Loan Documents) on any of its
or their respective properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation.
4.6 No Material Litigation. Except as disclosed on
Schedule IV, no litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to
the knowledge of the Borrower, threatened by or against the
Borrower or any of its Subsidiaries or against any of its or
their respective properties or revenues (a) with respect to any
of the Loan Documents or any of the transactions contemplated
hereby or thereby or (b) which could reasonably be expected to
have a Material Adverse Effect.
4.7 No Default. The Borrower is not in default under
or in respect of any of its obligations under the Borrower
Indenture, and no "Event of Default" (as defined in the Borrower
Indenture) has occurred and is continuing under the Borrower
Indenture. Neither the Borrower nor any of its Subsidiaries is
in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default
has occurred and is continuing.
4.8 Ownership of Property; Liens. Each of the
Borrower and its Subsidiaries has good record and marketable
title in fee simple to, or a valid leasehold interest in, all its
real property, and good title to, or a valid leasehold interest
49
54
in, all its other property, and none of the Borrower's property
is subject to any Lien except as permitted by subsection 7.8.
4.9 Taxes. Each of the Borrower and its Subsidiaries
has filed or caused to be filed all tax returns which, to the
knowledge of the Borrower, are required to be filed and has paid
all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other
taxes, fees or other charges imposed on it or any of its property
by any Governmental Authority (other than any the amount or
validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the
Borrower or its Subsidiaries, as the case may be); no tax Lien
has been filed, and, to the knowledge of the Borrower, no claim
is being asserted, with respect to any such tax, fee or other
charge.
4.10 Federal Regulations. No part of the proceeds of
any Loans will be used for "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms
under Regulation G or Regulation U of the Board of Governors of
the Federal Reserve System as now and from time to time hereafter
in effect. If requested by any Lender or the Agent, the Borrower
will furnish to the Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-
1 or FR Form U-1 referred to in said Regulation G or Regulation
U, as the case may be.
4.11 ERISA. Neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has occurred
during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan,
and each Plan has complied in all material respects with the
applicable provisions of ERISA and the Code. No termination of a
Single Employer Plan has occurred, and no Lien in favor of the
PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did
not, as of the last annual valuation date prior to the date on
which this representation is made or deemed made, exceed the
value of the assets of such Plan allocable to such accrued
benefits. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any
Multiemployer Plan, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any liability under
ERISA if the Borrower or any such Commonly Controlled Entity were
to withdraw completely from all Multiemployer Plans as of the
valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent. The present value
(determined using actuarial and other assumptions which are
reasonable in respect of the benefits provided and the employees
50
55
participating) of the liability of the Borrower and each Commonly
Controlled Entity for post retirement benefits to be provided to
their current and former employees under Plans which are welfare
benefit plans (as defined in Section 3(1) of ERISA) does not, in
the aggregate, exceed the assets under all such Plans allocable
to such benefits.
4.12 Investment Company Act; Public Utility Holding
Company Act; Other Regulations. The Borrower is not (a) an
"investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of
1940, as amended, or (b) a "holding company," a "subsidiary
company" of a "holding company" or an "affiliate" of a "holding
company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended. The Borrower is not subject to
regulation under any Federal or State statute or regulation
(other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Debt.
4.13 Subsidiaries. All the Subsidiaries of the
Borrower at the date of this Agreement are listed on Schedule V.
4.14 Purpose of Revolving Credit Loans. The proceeds
of the Revolving Credit Loans shall be used by the Borrower for
working capital and general corporate purposes in the ordinary
course of business.
4.15 Environmental Matters. Except as set forth on
Schedule VI:
(a) To the best knowledge of the Borrower, the
facilities and properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the "Project
Properties") do not contain, and have not previously
contained, any Materials of Environmental Concern in amounts
or concentrations which (i) constitute or constituted a
violation of, or (ii) could reasonably be expected to give
rise to liability under, any Environmental Law, except in
either case insofar as such violation or liability, or any
aggregation thereof, is not reasonably likely to have a
Material Adverse Effect.
(b) To the best knowledge of the Borrower, the Project
Properties and all operations at the Project Properties are
in compliance, and have been in compliance while owned,
leased or operated by the Borrower or any of its
Subsidiaries, in all material respects with all applicable
Environmental Laws, and there is no contamination at, under
or about the Project Properties or violation of any
Environmental Law with respect to the Project Properties or
the business operated by the Borrower or any of its
Subsidiaries (the "Business") which could materially
interfere with the continued operation of the Project
51
56
Properties or materially impair the fair saleable value
thereof.
(c) Neither the Borrower nor any of its Subsidiaries
has received any notice of violation, alleged violation, non-
compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws
with regard to any of the Project Properties or the
Business, nor does the Borrower have knowledge or reason to
believe that any such notice will be received or is being
threatened, except insofar as such notice or threatened
notice, or any aggregation thereof, does not involve a
matter or matters that is or are reasonably likely to have a
Material Adverse Effect.
(d) To the best knowledge of the Borrower, Materials
of Environmental Concern have not been transported or
disposed of from the Project Properties in violation of, or
in a manner or to a location which could reasonably be
expected to give rise to liability under, any Environmental
Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under
any of the Project Properties (i) in violation of any
applicable Environmental Law which violation, or any
aggregration thereof, could reasonably be expected to give
rise to material liability to the Borrower or any of its
Subsidiaries under any applicable Environmental Law or (ii)
in a manner that could reasonably be expected to give rise
to material liability to the Borrower or any of its
Subsidiaries under any applicable Environmental Law.
(e) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of the
Borrower, threatened, under any Environmental Law to which
the Borrower or any Subsidiary is or will be named as a
party with respect to the Project Properties or the
Business, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the
Project Properties or the Business that could reasonably be
expected to give rise to material liability to the Borrower
or any of its Subsidiaries under any applicable
Environmental Law.
(f) To the best knowledge of the Borrower, there has
been no release or threat of release of Materials of
Environmental Concern at or from the Project Properties, or
arising from or related to the operations of the Borrower or
any Subsidiary in connection with the Project Properties or
otherwise in connection with the Business, (i) in violation
of any applicable Environmental Law which violation, or any
aggregration thereof, could reasonably be expected to give
rise to material liability to the Borrower or any of its
52
57
Subsidiaries under any applicable Environmental Law or (ii)
in amounts or in a manner that could reasonably give rise to
material liability to the Borrower or any of its
Subsidiaries under any applicable Environmental Law.
4.16 Accuracy of Information; Full Disclosure. No
representation, warranty or other statement made by any Loan
Party in this Agreement, the CDH Guarantee or any other Loan
Document or in any certificate, written statement or other
document furnished to the Agent or any Lender by or on behalf of
any Loan Party pursuant to or in connection with this Agreement,
the CDH Guarantee or any other Loan Document or the transactions
contemplated hereby or thereby, contains any untrue statement of
a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein, in
light of the circumstances under which they were made, not
misleading. There is no fact known to the Borrower as of the
date of this Agreement which the Borrower has not disclosed to
the Agent and the Lenders in writing prior to the date of this
Agreement which has had, or could reasonably be expected to have,
a Material Adverse Effect.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The
closing hereunder shall not occur until, and the agreement of
each Lender and the Issuing Bank to make the initial Loan or
other Extension of Credit requested to be made by it is subject
to, the satisfaction of the following conditions precedent:
(a) Loan Documents. The Agent shall have received
(i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower, with a counterpart for
each Lender, (ii) for the account of each Lender, a
Revolving Credit Note, dated the Closing Date, conforming to
the requirements hereof and executed and delivered by a duly
authorized officer of the Borrower, and (iii) the CDH
Guarantee, executed and delivered by a duly authorized
officer of CDH, with a counterpart or a conformed copy for
each Lender.
(b) Related Agreements. The Agent shall have
received, with a copy for each Lender, a true and correct
copy, certified as to authenticity by the Borrower, of the
Borrower Indenture.
(c) Corporate Proceedings of the Borrower. The Agent
shall have received, with a counterpart for each Lender, a
copy of the resolutions, in form and substance satisfactory
to the Agent, of the Board of Directors of the Borrower
authorizing (i) the execution, delivery and performance of
this Agreement, the Notes and the other Loan Documents to
which it is a party and (ii) the borrowings contemplated
53
58
hereunder, certified by the Secretary or an Assistant
Secretary of the Borrower as of the Closing Date, which
certificate shall be in form and substance satisfactory to
the Agent and shall state that the resolutions thereby
certified have not been amended, modified, revoked or
rescinded.
(d) Borrower Incumbency Certificate. The Agent shall
have received, with a counterpart for each Lender, a
Certificate of the Borrower, dated the Closing Date, as to
the incumbency and signature of the officers of the Borrower
executing any Loan Document satisfactory in form and
substance to the Agent, executed by the Secretary or any
Assistant Secretary of the Borrower and countersigned by one
such officer of the Borrower.
(e) Corporate Proceedings of CDH. The Agent shall
have received, with a counterpart for each Lender, a copy of
the resolutions, in form and substance satisfactory to the
Agent, of the Board of Directors of CDH authorizing the
execution, delivery and performance of the CDH Guarantee,
certified by the Secretary or an Assistant Secretary of CDH
as of the Closing Date, which certificate shall be in form
and substance satisfactory to the Agent and shall state that
the resolutions thereby certified have not been amended,
modified, revoked or rescinded.
(f) CDH Incumbency Certificate. The Agent shall have
received, with a counterpart for each Lender, a certificate
of CDH, dated the Closing Date, as to the incumbency and
signature of the officer of CDH executing the CDH Guarantee
satisfactory in form and substance to the Agent, executed by
the Secretary or any Assistant Secretary of CDH and
countersigned by such officer of CDH.
(g) Corporate Documents. The Agent shall have
received, with a counterpart for each Lender, true and
complete copies of the certificate or articles of
incorporation and by-laws of each Loan Party, certified as
of the Closing Date as complete and correct copies thereof
by the Secretary or an Assistant Secretary of such Loan
Party.
(h) Fees and Expenses. ANZ shall have received (i)
the fee to be received by it on the Closing Date referred to
in subsection 2.3(b) and (ii) payment for all of its costs
and expenses then payable to it as the Agent pursuant to
subsection 10.5.
(i) Legal Opinions. The Agent shall have received,
with a counterpart for each Lender, the following executed
legal opinions:
54
59
(i) the executed legal opinion of
▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC, counsel to the Borrower and
CDH, substantially in the form of Exhibit F-1; and
(ii) the executed legal opinion of
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special New York counsel to the
Borrower and CDH, substantially in the form of
Exhibit F-2.
Each such legal opinion shall cover such other matters
incident to the transactions contemplated by this Agreement
as the Agent may reasonably require.
(j) Lien Searches. The Agent shall have received the
results of a recent search by a Person satisfactory to the
Agent of the Uniform Commercial Code, judgement and tax lien
filings which may have been filed with respect to personal
property of the Borrower and CDH, and the results of such
search shall be satisfactory to the Agent.
(k) Additional Matters. All corporate and other
proceedings, and all documents, instruments and other legal
matters in connection with the transactions contemplated by
this Agreement and the other Loan Documents shall be
satisfactory in form and substance to the Agent, and the
Agent shall have received such other documents and legal
opinions in respect of any aspect or consequence of the
transactions contemplated hereby or thereby as it shall
reasonably request.
5.2 Conditions to Each Revolving Credit Loan and Each
Letter of Credit. The agreement of each Lender to make any
Revolving Credit Loan, and of the Issuing Bank to issue any
Letter of Credit, requested to be made or issued by it on any
date (including, without limitation, its initial Revolving Credit
Loan or Letter of Credit) is subject to the satisfaction of the
following conditions precedent:
(a) Borrowing or Issuance Request. Except in the case
of a request for a borrowing deemed to be made pursuant to
subsection 3.5(c), the Agent and, in the case of a request
for a Letter of Credit, the Issuing Bank shall have received
a Borrowing Request or Issuance Request, as the case may be,
for such Revolving Credit Loan or Letter of Credit, duly
executed by a Responsible Officer of the Borrower and
completed, with the appropriate insertions and attachments,
to the satisfaction of the Agent and, in the case of an
Issuance Request, the Issuing Bank.
(b) Representations and Warranties. Each of the
representations and warranties made by the Borrower or CDH
in or pursuant to the Loan Documents shall be true and
correct in all material respects on and as of such date as
if made on and as of such date (or, if such representation
55
60
or warranty is expressly stated to have been made as of a
specific date, such specific date).
(c) No Default. No Default or Event of Default shall
have occurred and be continuing on such date or after giving
effect to all Extensions of Credit requested to be made on
such date.
(d) Parent Cash Flow Coverage Ratio. The Agent shall
have received a certificate of a Responsible Officer of the
Borrower setting forth in reasonable detail the calculations
and financial information necessary to determine the Parent
Cash Flow Coverage Ratio for the four most recent
consecutive fiscal quarters of the Borrower, and such ratio
shall not have been less than 2.0 to 1 for such period.
Each borrowing of a Revolving Credit Loan by and Letter of Credit
issued at the request of the Borrower hereunder shall constitute
a representation and warranty by the Borrower as of the date
thereof that the conditions contained in this subsection have
been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, until the Commitments
are terminated, all Obligations have been paid and performed in
full, no L/C Obligations are outstanding and all Letters of
Credit have expired and are no longer outstanding, the Borrower
shall:
6.1 Financial Statements. Furnish to each
Lender:
(a) as soon as available, but in any event within
90 days after the end of each fiscal year of the Borrower,
(i) a copy of the audited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of
such year and the related consolidated statements of income
and retained earnings and of cash flows for such year,
setting forth in each case in comparative form the figures
for the previous year, reported on without a "going concern"
or like qualification or exception, or qualification arising
out of the scope of the audit, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP or
other independent certified public accountants of nationally
recognized standing, (ii) a copy of the unaudited
consolidating balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such year and the
related consolidating statement of income for such year,
setting forth in each case in comparative form the figures
for the previous year, certified by a Responsible Officer as
being fairly stated in all material respects and (iii) a
copy of the unaudited balance sheet of CDH as at the end of
such year and the related statements of income and retained
earnings for such year, setting forth in comparative figures
56
61
for the previous year, certified by a Responsible Officer as
being fairly stated in all material respects; and
(b) as soon as available, but in any event not later
than 45 days after the end of each of the first three
quarterly periods of each fiscal year of the Borrower,
(i) the unaudited consolidated balance sheet of the Borrower
and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of
income and retained earnings and of cash flows of the
Borrower and its consolidated Subsidiaries for such quarter
and the portion of the fiscal year through the end of such
quarter and (ii) the unaudited balance sheet of CDH as at
the end of such quarter and the related statements of income
and retained earnings of CDH for such quarter and the
portion of the fiscal year through the end of such quarter,
setting forth in the case of each of subclause (i) and (ii)
in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in
all material respects (subject to normal year-end audit
adjustments);
all such financial statements shall be complete and correct in
all material respects and shall be prepared in reasonable detail
and in accordance with GAAP applied consistently throughout the
periods reflected therein and with prior periods (except as
approved by such accountants or officer, as the case may be, and
disclosed therein).
6.2 Certificates; Other Information. Furnish to each
Lender:
(a) concurrently with the delivery of the financial
statements referred to in clause (i) of subsection 6.1(a), a
certificate of the independent certified public accountants
reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as
specified in such certificate;
(b) concurrently with the delivery of the financial
statements referred to in subsections 6.1(a) and 6.1(b), a
certificate of a Responsible Officer (i) stating that, to
the best of such Officer's knowledge, during such period the
Borrower has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained
in this Agreement and the other Loan Documents to be
observed, performed or satisfied by it, and that such
Officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate and
(ii) setting forth in reasonable detail the calculations and
financial information required to establish whether the
Borrower is in compliance with subsection 7.1;
57
62
(c) not later than thirty days prior to the end of
each fiscal year of the Borrower, a copy of the projections
by the Borrower of the consolidated operating budget and
cash flow budget of the Borrower and its consolidated
Subsidiaries for the succeeding fiscal year, such
projections to be accompanied by a certificate of a
Responsible Officer to the effect that such projections have
been prepared on the basis of sound financial planning
practice and that such Officer has no reason to believe they
are based on unreasonable assumptions or misleading in any
material respect;
(d) within five days after the same are filed, copies
of all financial statements and reports which the Borrower
may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental
Authority;
(e) concurrently with the delivery thereof, copies of
all certificates, notices and other written communications
which the Borrower delivers pursuant to the Borrower
Indenture to any party thereto;
(f) not less than 10 days prior to the anticipated date
of any Asset Disposition by the Borrower or any of its
Subsidiaries, a certificate of a Responsible Officer of the
Borrower setting forth (i) a description of the transaction
resulting in such Asset Disposition (including, without
limitation, an identification of the securities, assets or
other Property to be sold or otherwise disposed of), (ii) a
description and valuation of the consideration to be
received by the Borrower or such Subsidiary for such Asset
Disposition and (iii) the date or dates upon which any Net
Cash Proceeds therefrom are anticipated to be received by
the Borrower or such Subsidiary and the amount of the Net
Cash Proceeds anticipated to be received on such date or
each of such dates; and
(g) promptly, such additional financial and other
information as any Lender may from time to time reasonably
request.
6.3 Payment of Obligations. Pay, discharge or
otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, (a) all of the Obligations and
(b) all of its other obligations of whatever nature, except in
the case of this clause (b) where the amount or validity thereof
is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the Borrower;
provided, that no Default or Event of Default shall exist under
this subsection 6.3(b) unless the aggregate amount of obligations
the Borrower has failed so to pay, discharge or otherwise satisfy
shall be equal to at least $5 million.
58
63
6.4 Conduct of Business and Maintenance of Existence.
Preserve, renew and keep in full force and effect its corporate
existence and take all action necessary to maintain all rights,
privileges and franchises necessary or desirable in the normal
conduct of its business; comply with all Contractual Obligations
and Requirements of Law except to the extent that failure to
comply therewith could not, in the aggregate, have a Material
Adverse Effect.
6.5 Maintenance of Property; Insurance. Keep or cause
its Subsidiaries to keep all property useful and necessary in its
and its Subsidiaries' businesses in good working order and
condition and maintain and operate such property in accordance
with prudent engineering and business practices no less rigorous
than, in the case of Power Generation Facilities, those customary
in the independent power industry and, in the case of any other
property, those customary in the industry in which such property
is used, except, in either such case, to the extent that the
failure to comply herewith with respect to its Subsidiaries'
businesses could not, in the aggregate, be reasonably expected to
have a Material Adverse Effect; maintain or cause its
Subsidiaries to maintain with financially sound and reputable
insurance companies insurance on all its and its Subsidiaries'
properties in at least such amounts and against at least such
risks (but including in any event public liability, product
liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same
or a similar business; and furnish to each Lender, upon written
request, full information as to the insurance carried.
6.6 Inspection of Property; Books and Records;
Discussions. Keep proper books of records and account in which
full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and
transactions in relation to its business and activities; and
permit representatives of any Lender to visit and inspect any of
its properties and examine and make abstracts from any of its
books and records at any reasonable time and as often as may
reasonably be desired and to discuss the business, operations,
properties and financial and other condition of the Borrower and
its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public
accountants.
6.7 Notices. Promptly give notice to the Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Borrower or any of its
Subsidiaries (including, without limitation, the Borrower
Indenture) or (ii) litigation, investigation or proceeding
which may exist at any time between the Borrower or any of
59
64
its Subsidiaries and any Governmental Authority, which in
either case, if not cured or if adversely determined, as the
case may be, could reasonably be expected to have a Material
Adverse Effect;
(c) any litigation or proceeding affecting the
Borrower or any of its Subsidiaries in which the amount
involved is $3 million or more or in which injunctive or
similar relief is sought or that could reasonably be
expected to have a Material Adverse Effect; and
(d) the following events, as soon as possible and in
any event within 30 days after the Borrower knows or has
reason to know thereof: (i) the occurrence or expected
occurrence of any Reportable Event with respect to any Plan,
a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action
by the PBGC or the Borrower or any Commonly Controlled
Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or
Insolvency of, any Plan.
Each notice pursuant to this subsection shall be accompanied by a
statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the
Borrower proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply with, and ensure
compliance by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply in all
material respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all material respects with
and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental
Laws except to the extent that failure to do so could not be
reasonably expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions
required under Environmental Laws and promptly comply in all
material respects with all lawful orders and directives of all
Governmental Authorities regarding Environmental Laws except to
the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings
could not be reasonably expected to have a Material Adverse
Effect.
6.9 Indemnification. The Borrower shall pay, and
protect, indemnify and save harmless the Agent, the Issuing Bank
and the Lenders and, in their capacity as such, their officers,
directors, shareholders, controlling persons, employees, agents
60
65
and servants (individually an "Indemnified Party," collectively
the "Indemnified Parties") from and against, all liabilities,
losses, claims, damages, penalties, causes of action, suits,
costs, expenses and disbursements of any kind whatsoever
(including, without limitation, reasonable attorneys' fees and
expenses, but excluding special, exemplary, punitive or
consequential damages suffered by such Indemnified Party)
incurred by or asserted against any Indemnified Party arising out
of, in any way in connection with, or as a result of (a) the
execution, delivery, enforcement, performance or administration
of this Agreement, the CDH Guarantee, any other Loan Document or
any document contemplated hereby or thereby or any of the
transactions contemplated by any Loan Document, (b) the use of
the proceeds of the Loans, (c) the issuance or use of the
proceeds of, or any drawing under, any Letter of Credit or
(d) any claim, litigation, investigation or proceeding relating
to any of the foregoing, whether or not any Indemnified Party is
a party thereto (including, without limitation, any of the
foregoing relating to the violation of, noncompliance with or
liability under, any Environmental Law applicable to the
operations of the Borrower, any of its Subsidiaries or any of the
Project Properties); provided that the Borrower will not be
liable to any Indemnified Party for such liabilities, losses,
claims, damages, penalties, causes of action, suits, costs and
expenses (including, without limitation, attorneys' fees) or
judgments arising from such Indemnified Party's gross negligence
or wilful misconduct. With respect to any action, suit or
proceeding against it, or any of its officers, directors,
shareholders, controlling persons, employees, agents and
servants, in respect of which indemnity may be sought hereunder,
the Agent, the Issuing Bank and each Lender agrees that it will
give written notice of the commencement of such action, suit or
proceeding to the Borrower within a reasonable time after it is
made a party to such action, suit or proceeding; but the omission
to so notify the Borrower will not relieve the Borrower from any
liability which it might have to any Indemnified Party, except to
the extent that the failure to give notice of the commencement of
such action, suit or proceeding shall preclude the Borrower from
effectively defending such action, suit or proceeding. Upon
receipt of any such notice by the Borrower, the Borrower shall be
entitled to assume the defense of such action, suit or
proceeding, including the employment of counsel and the payment
of all expenses in connection with such defense, and shall have
the right to negotiate and consent to settlement. Any
Indemnified Party shall have the right to employ separate counsel
in any such action, suit or proceeding against it and to
participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party
unless (i) the employment of such counsel shall have been
specifically authorized in writing by the Borrower or (ii) the
Borrower shall have elected not to assume the defense of such
action, suit or proceeding or (iii) such Indemnified Party has
been advised by its own counsel that there are legal defenses
available to such Indemnified Party which are different from,
61
66
additional to or in conflict with the defenses available to the
Borrower. The Borrower shall not be liable for any settlement of
any such action, suit or proceeding effected without its consent,
which consent shall not be unreasonably withheld; but if any such
action, suit or proceeding is settled with the consent of the
Borrower or if there is a final judgment for the plaintiff in any
such action, suit or proceeding (of which the Borrower shall have
been notified), the Borrower shall indemnify and hold harmless
each Indemnified Party from and against any losses, claims,
damages, liabilities or expenses incurred or suffered by reason
of such settlement or judgment. This covenant shall survive the
termination of this Agreement and the payment of the Notes, the
Loans and all other Obligations.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, until the Commitments
are terminated, all Obligations have been paid and performed in
full, no L/C Obligations are outstanding and all Letters of
Credit have expired or are no longer outstanding, the Borrower
shall not do any of the following:
7.1 Parent Cash Flow Coverage Ratio. The Borrower
shall not permit the Parent Cash Flow Coverage Ratio to be less
than 2.0 to 1 for any period of four consecutive fiscal quarters
of the Borrower.
7.2 Limitation on Debt. (a) The Borrower shall not
Incur any Debt, including Acquisition Debt, unless after giving
effect to the Incurrence of such Debt and the receipt and
application of the proceeds therefrom, the Fixed Charge Ratio of
the Borrower would be equal to or greater than 2.0 to 1.
(b) Notwithstanding the foregoing, the Borrower may
Incur each and all of the following:
(i) Debt issued in exchange for, or the
proceeds of which are used to Refinance, Debt of the
Borrower in an amount (or, if such new Debt provides for an
amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration thereof, with an
original issue price) not to exceed the amount so exchanged
or Refinanced (plus accrued interest and fees and expenses
related to such exchange or Refinancing), the amount so
exchanged or Refinanced being equal to the lesser of (x) the
principal amount or involuntary liquidation preference of
the Debt so exchanged or Refinanced and (y) if the Debt
being exchanged or Refinanced was issued with an original
issue discount, the accreted value thereof (as determined in
accordance with GAAP) at the time of such Refinancing;
provided that such Debt of the Borrower will rank pari passu
with or expressly subordinated in right of payment to the
Obligations and the Average Life of the new Debt shall be
62
67
equal to or greater than the Average Life of the Debt to be
exchanged or Refinanced;
(ii) Debt of the Borrower to any of its
Subsidiaries and to any Joint Ventures in which the Borrower
is a direct or indirect partner, shareholder, member or
other participant if such Debt of the Borrower is expressly
subordinated in right of payment to the Obligations;
provided that any transfer of such Debt by a Subsidiary or a
Joint Venture (other than to another Subsidiary or Joint
Venture) will be deemed to be an Incurrence of Debt unless
(x) such Debt has an Average Life which is greater than that
of the Borrower Indenture Securities and which extends to a
date later than the then Final Maturity Date or (y) the
aggregate amount of such Debt which has an Average Life
which is equal to or less than that of the Borrower
Indenture Securities or which extends to, or to a date
earlier than, the then Final Maturity Date does not exceed
$3 million;
(iii) Debt in an aggregate principal amount not
to exceed $10 million at any one time outstanding;
(iv) Debt in respect of Currency Protection
Agreements or Interest Rate Protection Agreements; and
(v) Debt outstanding as of the date of this
Agreement.
For purposes of determining any particular amount of
Debt under this subsection 7.2, Guarantees of, or obligations
with respect to letters of credit supporting, Debt otherwise
included in the determination of such particular amount shall not
be included. For purposes of determining compliance with the
provisions of this subsection 7.2, in the event that an item of
Debt meets the criteria of more than one of the types of Debt
described in the above clauses, the Borrower, in its sole
discretion, shall classify such item of Debt and only be required
to include the amount and type of such Debt in one of such
clauses.
7.3 Limitation on Subsidiary Debt. (a) The Borrower
shall not permit any Subsidiary to Incur, assume or otherwise
cause or suffer to exist, directly or indirectly, any Debt.
(b) Notwithstanding the foregoing, each and all of the
following Debt may be Incurred by a Subsidiary:
(i) Debt outstanding as of the date of this
Agreement;
(ii) Debt owed by a Subsidiary to the Borrower;
63
68
(iii) Debt Incurred to finance the development,
acquisition, construction or operation of a Power Generation
Facility in which such Subsidiary has a direct or indirect
interest; provided that such Debt shall be permitted under
this clause (iii) only to the extent of the amount thereof
which is Non-Recourse to the Borrower and is Non-Recourse to
any other Subsidiary with a direct or indirect interest in
any other Power Generation Facility;
(iv) Debt issued in exchange for, or the
proceeds of which are used to Refinance, outstanding Debt of
such Subsidiary otherwise permitted under this Agreement in
an amount (or, if such new Debt provides for an amount less
than the principal amount thereof to be due and payable upon
a declaration of acceleration thereof, with an original
issue price) not to exceed the amount so exchanged or
Refinanced (plus accrued interest and fees and expenses
related to such exchange or Refinancing), the amount so
exchanged or Refinanced being equal to the lesser of (x) the
principal amount or involuntary liquidation preference of
the Debt so exchanged or Refinanced and (y) if the Debt
being exchanged or Refinanced was issued with an original
issue discount, the accreted value thereof (as determined in
accordance with GAAP) at the time of such Refinancing;
provided that (A) the new Debt shall be Non-Recourse to the
Borrower to no lesser extent than the Debt to be exchanged
or Refinanced, (B) the new Debt shall be Non-Recourse to any
other Subsidiary with a direct or indirect interest in any
other Power Generation Facility to no lesser extent than the
Debt to be exchanged or Refinanced, and (C) the Average Life
of the new Debt shall be equal to or greater than the
Average Life of the Debt to be exchanged or Refinanced;
(v) Debt issued in exchange for, or the
proceeds of which are used to Refinance, outstanding Debt of
such Subsidiary otherwise permitted under this Agreement in
an amount (or, if such new Debt provides for an amount less
than the principal amount thereof to be due and payable upon
a declaration of acceleration thereof, with an original
issue price) in excess of the amount so exchanged or
Refinanced (plus accrued interest and fees and expenses
related to such exchange or Refinancing); provided that
(A) the new Debt shall be Non-Recourse to the Borrower to no
lesser extent than the Debt to be exchanged or Refinanced,
(B) the new Debt shall be Non-Recourse to any other
Subsidiary with a direct or indirect interest in any other
Power Generation Facility to no lesser extent than the Debt
to be exchanged or Refinanced, and (C) the Average Life of
the new Debt shall be equal to or greater than the Average
Life of the Debt to be exchanged or Refinanced; provided
further that, after giving effect to the Incurrence of such
new Debt and the retirement of the Debt to be exchanged or
Refinanced, the Fixed Charge Ratio of the Borrower would be
equal to or greater than 2.0 to 1;
64
69
(vi) Debt issued in exchange for, or the
proceeds of which are used to Refinance, outstanding Debt
which is not Non-Recourse to the Borrower or to any other
Subsidiary in an amount (or if such new Debt provides for an
amount less than the principal amount thereof to be due and
payable upon a declaration or acceleration thereof, with an
original issue price) not to exceed the amount so exchanged
or Refinanced (plus accrued interest and fees and expenses
related to such exchange or Refinancing), the amount so
exchanged or Refinanced being equal to the lesser of (x) the
principal amount of the Debt so exchanged or Refinanced and
(y) if the Debt being so exchanged or Refinanced was issued
with an original issue discount, the accreted value thereof
(as determined in accordance with GAAP) at the time of such
Refinancing; provided that the Average Life of the new Debt
shall be equal to or greater than the Average Life of the
Debt to be exchanged or Refinanced;
(vii) Debt Incurred to support the performance
obligations of a Subsidiary engaged in providing
construction management or operating services to a Power
Generation Facility; provided that such Debt shall be
permitted under this clause (vii) only to the extent of the
amount thereof which is Non-Recourse to the Borrower and is
Non-Recourse to any other Subsidiary with a direct or
indirect interest in any other Power Generation Facility;
(viii) Debt of a Subsidiary Incurred solely to
finance the development, acquisition, construction or
operation of a Power Generation Facility in which such
Subsidiary, the Borrower or another Subsidiary has a direct
or indirect interest; provided, that after giving effect to
the Incurrence of such new Debt and the retirement of any
Debt to be exchanged or Refinanced, the Fixed Charge Ratio
of the Borrower would be equal to or greater than 2.0 to 1;
(ix) Debt Incurred by a Person prior to the
time: (A) such Person became a Subsidiary of the Borrower;
(B) such Person merges with or into a Subsidiary of the
Borrower; or (C) another Subsidiary of the Borrower merges
with or into such Person (in a transaction in which such
Person becomes a Subsidiary of the Borrower); provided that,
giving effect to such transaction, such Debt could have been
Incurred at the time of such merger or acquisition by the
Borrower pursuant to subsection 7.2 or by the Subsidiary
pursuant to either of clauses (iii) or (iv) of this
paragraph (b) of this subsection 7.3; and
(x) Debt Incurred by a Subsidiary of which at
least 80% of each class of Common Stock is owned, directly
or indirectly, by the Borrower, to another Subsidiary of
which at least 80% of each class of Common Stock is owned,
directly or indirectly, by the Borrower.
65
70
For purposes of determining any particular amount of
Debt under this subsection 7.3, Guarantees of, or obligations
with respect to letters of credit supporting, Debt otherwise
included in the determination of such particular amount shall not
be included. For purposes of determining compliance with the
provisions of this subsection 7.3, in the event that an item of
Debt meets the criteria of more than one of the types of Debt
described in the above clauses, the Borrower, in its sole
discretion, shall classify such item of Debt and only be required
to include the amount and type of such Debt in one of such
clauses.
7.4 Limitation on Restricted Payments. The Borrower
will not, and will not permit any Subsidiary to, directly or
indirectly, make any Restricted Payment if at the time of such
Restricted Payment and after giving effect thereto:
(a) an Event of Default or an event that, after the
giving of notice or lapse of time or both would become an
Event of Default, shall have occurred and be continuing;
(b) the Borrower could not Incur at least $1 of Debt
under subsection 7.2(a);
(c) the aggregate amount of all Restricted Payments
made by the Borrower and its Subsidiaries after March 15,
1994 (the amount so made, if other than in cash, to be
determined in good faith by the Board of Directors, as
evidenced by a Board resolution) shall exceed the sum
(without duplication) of: (i) $5 million plus 50% of the
Net Income of the Borrower and its consolidated Subsidiaries
for the period (taken as one accounting period) beginning on
March 15, 1994 and ending on the last day of the fiscal
quarter immediately prior to the date of such calculation;
provided that if Net Income for such period is less than
zero, then minus 100% of the amount of such net loss; plus
(ii) if the Borrower Indenture Securities are Investment
Grade at the time of and after giving effect to the
Restricted Payment (or in the case of a dividend, its
declaration) in connection with which the calculation is
made, an additional 25% of Net Income of the Borrower and
its consolidated Subsidiaries for any period of one or more
completed fiscal quarters ending with the last fiscal
quarter completed prior to the date of such Restricted
Payment during which the Borrower Indenture Securities were
Investment Grade for the entire period; plus (iii) the
aggregate net proceeds (including the Fair Market Value of
proceeds other than cash) received by the Borrower from and
after March 15, 1994 from the issuance and sale (other than
to a Subsidiary) of its Capital Stock (excluding Redeemable
Stock, but including Capital Stock other than Redeemable
Stock issued upon conversion of, or in exchange for,
Redeemable Stock or securities other than its Capital
Stock), and warrants, options and rights to purchase its
66
71
Capital Stock (other than Redeemable Stock), but excluding
the net proceeds from the issuance, sale, exchange,
conversion or other disposition of its Capital Stock
convertible (whether at the option of the Borrower or the
holder thereof or upon the happening of any event) into
(x) any security other than its Capital Stock or (y) its
Redeemable Stock; plus (iv) the net reduction in Investments
of the type specified in clause (iv) of the definition of
"Restricted Payment" resulting from payments of interest on
Debt, dividends, repayments of loans or advances, or other
transfers of assets to the Borrower or other Person that
made the original Investment from the Person in which such
Investment was made; provided that such payment shall not
exceed the amount of the original Investment; plus (v) any
amount previously included as a Restricted Payment on
account of an obligation by the Borrower or any Subsidiary
to make a Restricted Payment which has not actually been
made by the Borrower or any Subsidiary; provided that this
clause (c) shall not prevent the payment of any dividend
within 60 days after the date of its declaration if such
dividend could have been made on the date of its declaration
without violation of the provisions of this subsection 7.4.
7.5 Limitations on Dividends and Other Payment
Restrictions Affecting Subsidiaries. The Borrower will not, and
will not permit any Subsidiary to, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any Subsidiary to
(a) pay dividends or make any other distributions permitted by
applicable law on any Capital Stock of such Subsidiary owned by
the Borrower or any other Subsidiary, (b) make payments in
respect of any Debt owed to the Borrower or any other Subsidiary
of the Borrower, (c) make loans or advances to the Borrower or
any other Subsidiary of the Borrower or (d) transfer any of its
Property to the Borrower or any other Subsidiary, other than
those encumbrances and restrictions created or existing (i) on
the date of this Agreement, (ii) pursuant to this Agreement, the
CDH Guarantee or the Borrower Indenture, (iii) in connection with
the Incurrence of any Debt permitted under clauses (iii) and
(vii) of subsection 7.3(b) hereof; provided that such
encumbrances or restrictions are required in order to effect such
financing and are not materially more restrictive, taken as a
whole, on the ability of the applicable Subsidiary to make the
payments, distributions, loans, advances or transfers referred to
in clauses (a) through (d) above than encumbrances and
restrictions, taken as a whole, customarily accepted (or, in the
absence of any industry custom, reasonably acceptable) in
substantially Non-Recourse financing, (iv) in connection with the
execution and delivery of an electric power or thermal energy
purchase contract to which such Subsidiary is the supplying party
or other contracts with customers, suppliers and contractors to
which such Subsidiary is a party and where such Subsidiary is
engaged, directly or indirectly, in the development,
construction, acquisition or operation of a Power Generation
67
72
Facility; provided that such encumbrances or restrictions are
required in order to effect such contracts and are not materially
more restrictive, taken as a whole, on the ability of the
applicable Subsidiary to make the payments, distributions, loans,
advances or transfers referred to in clauses (a) through (d)
above than encumbrances and restrictions, taken as a whole,
customarily accepted (or, in the absence of any industry custom,
reasonably acceptable) in comparable transactions, (v) in
connection with any Debt of a Person outstanding when such Person
becomes a Subsidiary permitted under clause (ix) of
subsection 7.3(b); provided that such encumbrance or restriction
was not Incurred in contemplation of such Subsidiary becoming a
Subsidiary, (vi) in connection with the Incurrence of any Debt
permitted under clause (iv), (v), (vi), (viii) or (to the extent
not covered by (iii) above) (iii) of subsection 7.3(b) hereof;
provided that such encumbrances or restrictions taken as a whole
are not materially more restrictive on the ability of the
applicable Subsidiary to make the payments, distributions, loans,
advances or transfers referred to in clauses (a) through (d)
above than those, taken as a whole, customarily accepted (or, in
the absence of any industry custom, reasonably acceptable) in
comparable financing transactions of the same nature as the Debt
being Incurred, (vii) customary non-assignment provisions in
leases or other contracts entered into in the ordinary course of
business of the Borrower or any Subsidiary and (viii) any
restrictions imposed pursuant to an agreement entered into for
the sale or disposition of all or substantially all of the
Capital Stock or assets of any Subsidiary or Joint Venture that
apply pending the closing of such sale or disposition.
7.6 Restrictions on Dispositions. Subject to the
provisions of subsections 7.9 and 7.10, the Borrower will not
make and will not permit any of its Subsidiaries to make, any
Asset Disposition unless the Borrower (or the Subsidiary, as the
case may be) receives, at the time of such Asset Disposition,
consideration with a Fair Market Value at least equal to the Fair
Market Value of the securities, assets or other Property sold or
otherwise disposed of. In determining the Fair Market Value of
the consideration received for any Asset Disposition, in addition
to any other adjustment necessary to determine such
consideration's Fair Market Value, any payment or other amount
that is to be received after the date of such Asset Disposition
(whether paid pursuant to a note or installment receivable or
otherwise or in the form of a dividend or distribution on any
shares of any Person's Capital Stock) shall be valued at the net
present value of such payment or other amount calculated by
discounting such payment or other amount to the date of such
Asset Disposition using an assumed discount rate proposed by the
Borrower and reasonably acceptable to the Agent.
7.7 Limitations on Transactions with Affiliates. The
Borrower will not, and will not permit any of its Subsidiaries
to, directly or indirectly, enter into any transaction after the
date of this Agreement (including, without limitation, the sale,
68
73
purchase or lease of any assets or properties or the rendering of
any services) involving aggregate consideration with respect to
such transaction in excess of $1 million with any Affiliate or
holder of 5% or more of any class of Capital Stock of the
Borrower except for transactions (including, subject to
subsection 7.4, any loans or advances by or to, or guarantee on
behalf of, any Affiliate or holder) made in good faith the terms
of which are fair and reasonable to the Borrower or such
Subsidiary, as the case may be, and are at least as favorable as
the terms which could be obtained by the Borrower or such
Subsidiary, as the case may be, in a comparable transaction made
on an arm's-length basis with Persons who are not such a holder
or Affiliate; provided that the fairness, reasonableness and
arm's-length nature of the terms of any transaction which is part
of a series of related transactions may be determined on the
basis of the terms of the series of related transactions taken as
a whole. This covenant shall not apply to (a) the payment of
reasonable and customary regular fees to directors of the
Borrower or a Subsidiary of the Borrower (including directors who
are employees), (b) any transaction between the Borrower and any
of its Subsidiaries the terms of which are not unfair or
unreasonable to the Borrower, (c) any Permitted Payment, and any
Restricted Payment not otherwise prohibited by subsection 7.4 or
(d) equipment and real property lease transactions with and loans
to Equipment Leasing Partners, a North Carolina general
partnership, outstanding on the date of this Agreement,
indebtedness of the shareholders of the Borrower outstanding on
the date of this Agreement, the Consulting Agreement between the
Borrower and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and Stock Transfer Agreements
between the Borrower and each of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇
and ▇▇▇▇▇ ▇. ▇▇▇▇▇, in each case as in effect on the date of this
Agreement.
7.8 Limitations on Liens. The Borrower may not Incur
any Debt which is secured, directly or indirectly, with, nor will
the Borrower grant or cause or suffer to exist, a Lien on the
Property of the Borrower now owned or hereafter acquired unless
contemporaneous therewith or prior thereto the Obligations are
equally and ratably secured thereof except for (a) any such Debt
secured by Liens existing on the assets of any entity at the time
such assets are acquired by the Borrower, whether by merger,
consolidation, purchase of assets or otherwise; provided that
such Liens (x) are not created, incurred or assumed in
contemplation of such assets being acquired by the Borrower and
(y) do not extend to any other Property of the Borrower;
(b) Liens granted to secure any other Debt required by its terms
to be equally and ratably secured as a result of the Incurrence
of such Debt; (c) Liens on the Borrower's interests in
Subsidiaries and Joint Ventures in which the Borrower is a
partner, shareholder, member or other participant, which Liens
are granted in good faith in connection with the acquisition of
such assets or as part of the financing of a Power Generation
Facility; provided that such Liens are required in order to
effect such financing and are not materially more restrictive,
69
74
taken as a whole, than Liens, taken as a whole, customarily
accepted (or in the absence of any industry custom, reasonably
acceptable) in substantially Non-Recourse project financing;
(d) Liens on the stock or partnership interest of Subsidiaries
and interests in Joint Ventures in which the Borrower becomes a
partner, shareholder, member or other participant which Liens are
granted in good faith as part of a project financing or the
development of a project; provided that such Liens are required
in order to effect such transaction and are not materially more
restrictive, taken as a whole, than Liens, taken as a whole,
customarily accepted (or in the absence of any industry custom,
reasonably acceptable) in substantially Non-Recourse project
financing; (e) Liens in existence on the date of this Agreement
or established pursuant to this Agreement; (f) purchase money
Liens incurred to secure Debt incurred by the Borrower as
permitted by subsection 7.2, which Debt finances the purchase
price of Property acquired in the ordinary course of business,
and which Liens will not cover any Property other than that being
purchased, improved or constructed; (g) [intentionally omitted];
(h) Liens incurred in connection with Capitalized Lease
Obligations incurred by the Borrower as permitted by
subsection 7.2; (i) Liens in respect of extensions, renewals,
refunding or Refinancing of any Debt secured by the Liens
referred to in clauses (a), (b), (c), (d), (e), (f) or (h) above,
provided that the Liens in connection with such renewal,
extension, refunding or Refinancing shall be limited to all or
part of the specific Property which was subject to the original
Lien; (j) any Lien arising by reason of (A) any judgment, decree
or order or any court, so long as such Lien is being contested in
good faith and is adequately bonded, and any appropriate legal
proceedings which may have been duly initiated for the review of
such judgment, decree or order shall not have been finally
terminated or the period within which such proceedings may be
initiated shall not have expired, (B) taxes not yet delinquent or
which are being contested in good faith, (C) security for payment
of worker's compensation or other insurance, (D) security for the
performance of tenders, contracts (other than contracts for the
payment of money) or leases, (E) deposits to secure public or
statutory obligations, or to secure permitted contracts for the
purchase or sale of any currency entered into in the ordinary
course of business, (F) operation of law in favor of carriers,
warehousemen, landlords, mechanics, materialmen, laborers,
employees or suppliers, incurred in the ordinary course of
business for sums which are not yet delinquent or which are being
contested in good faith by negotiations or by appropriate
proceedings which suspend the collection thereof, (G) easements,
rights-of-way, zoning and similar covenants and restrictions and
other similar encumbrances or title defects which, in the
aggregate, are not material, and which do not in any case
materially detract from the value of the Property subject thereto
or materially interfere with the ordinary conduct of the business
of the Borrower or (H) leases and subleases of property which do
not interfere with the ordinary conduct of the business of the
Borrower, and which are made on customary and usual terms
70
75
applicable to similar properties; or (I) Liens in addition to the
foregoing, provided that the amount of the obligations secured by
such Liens does not exceed in the aggregate $1 million.
7.9 Limitations on Mergers, Consolidations, Sales or
Transfers of Assets by or Involving Borrower. The Borrower shall
not consolidate with, merge with or into, or transfer all or
substantially all of its assets (as an entirety or substantially
an entirety in one transaction or a series of related
transactions), to any Person unless:
(a) the Borrower shall be the continuing Person, or
the Person (if other than the Borrower) formed by such
consolidation or into which the Borrower is merged or to
which properties and assets of the Borrower are transferred
shall be a corporation organized and existing under the laws
of the United States or any state thereof or the District of
Columbia and shall expressly assume in a writing acceptable
to the Lenders all of the Obligations of the Borrower;
(b) immediately after giving effect to such
transaction no Event of Default or event or condition which
through the giving of notice or lapse of time or both would
become an Event of Default shall have occurred and be
continuing;
(c) the Net Worth of the Borrower or the surviving
entity, as the case may be, on a pro forma basis after
giving effect to such transaction is not less than the Net
Worth of the Borrower immediately prior to such transaction;
and
(d) immediately after giving effect to such
transaction on a pro forma basis, the Borrower or the
surviving entity would be able to incur at least $1 of Debt
under subsection 7.2(a).
7.10 Limitations on Certain Mergers, Consolidations
and Investments by Subsidiaries. Without the prior written
consent of the Required Lenders (which shall not be unreasonably
withheld), the Borrower shall not permit any Subsidiary with any
direct or indirect interest in (a) a Power Generation Facility to
make any Investment in, or to consolidate or merge with, any
other Person with a direct or indirect interest in any other
Power Generation Facility or any unrelated business or (b) any
unrelated business to make any Investment in, or to consolidate
or merge with, any other Person with a direct or indirect
interest in any Power Generation Facility; provided, that to the
extent otherwise permitted under this Agreement and the other
Loan Documents (i) Cogentrix Virginia Leasing Corporation and
▇▇▇▇▇ River Cogeneration Company may each make Investments in and
consolidate or merge with each other and (ii) CDH, Cogentrix
International Holdings, Inc. and Cogentrix International
Holdings, B.V. may each make any Investment in any Person.
71
76
7.11 CDH Permitted Investments. Notwithstanding any
other provision of this Agreement, the Borrower shall not make
any advance, loan, extension of credit or capital contribution
to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets constituting a business unit of, or
make any other Investment in, any Person, other than (i)
Investments in any Subsidiary of the Borrower (or any Person that
will become a Subsidiary of the Borrower as a result of such
Investment) otherwise permitted hereunder (including, without
limitation, subsection 7.4) and under the other Loan Documents
and (ii) CDH Permitted Investments; provided, that so long as the
total of the aggregate amount of CDH Permitted Investments owned
by the Borrower plus the aggregate amount of CDH Permitted
Investments owned by CDH (exclusive of, in the case of both the
Borrower and CDH, any CDH Permitted Investments subject to or
otherwise covered by any Lien other than the Lien created under
this Agreement in the Cash Collateral Account) shall have a value
of $50 million or more, the Borrower may make any Investment that
the Borrower is otherwise permitted to make hereunder (including,
without limitation, subsection 7.4) and under the other Loan
Documents.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be
continuing:
(a) The Borrower shall fail to pay when due any
principal of any Loan or any Reimbursement Obligation in
accordance with the terms hereof; or the Borrower shall fail
to make in full any deposit required to be made hereunder
into the Cash Collateral Account on the day such deposit is
due in accordance with the terms hereof; or the Borrower
shall fail to pay any interest on any Loan, or any fee or
other amount payable hereunder or under any other Loan
Document (including, without limitation, any Commitment Fee,
Administration Fee, Fronting Fee or Letter of Credit Fee),
when due in accordance with the terms hereof, and such
interest or fee or other amount shall remain unpaid for a
period of five or more Business Days after notice to the
Borrower by the party to whom such payment was due (or by
the Agent on behalf of such party); or
(b) Any representation or warranty made or deemed made
by any Loan Party herein, the CDH Guarantee or in any other
Loan Document or which is contained in any certificate,
document or financial or other statement furnished at any
time under or in connection with this Agreement, the CDH
Guarantee or any other Loan Document shall prove to have
been false or misleading as of the time made or furnished in
any material respect and either such false or misleading
representation or warranty (i) has resulted in a Material
72
77
Adverse Effect or (ii) could reasonably be expected to
result in a Material Adverse Effect; or
(c) The Borrower shall default in the observance or
performance of any covenant contained in subsection 7.1, 7.9
or 7.10; or the Borrower shall default in the observance or
performance of any other covenant contained in Section 7 or
CDH shall default in the observance or performance of any
covenant in Section 10 of the CDH Guarantee, and in either
case such default shall continue unremedied for a period of
10 days after the earlier to occur of (i) the date the Agent
shall have provided notice to the Borrower of such default
and (ii) the date a Responsible Officer of the Borrower
shall have learned or reasonably should have learned of such
default; or
(d) The Borrower shall default in the observance or
performance of any other covenant contained in this
Agreement (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue
unremedied for a period of 30 Business Days after notice to
the Borrower by the Agent of such default; or
(e) The Borrower or CDH shall (i) default in any
payment of principal of or interest on any Debt (other than
the Loans) or in the payment of any Guarantee Obligation,
beyond the period of grace (not to exceed 30 days), if any,
provided in the instrument or agreement under which such
Debt or Guarantee Obligation was created and such default
permits the holder or holders of such Debt or beneficiary or
beneficiaries of such Guarantee Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if
required, such Debt to become due prior to its stated
maturity or such Guarantee Obligation to become payable; or
(ii) default in the observance or performance of any other
agreement or condition relating to any such Debt or
Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of
which default or other event or condition is to cause such
Debt to become due prior to its stated maturity or such
Guarantee Obligation to become payable; provided, however,
that no Default or Event of Default shall exist under this
paragraph unless the aggregate amount of Debt and/or
Guarantee Obligations in respect of which any default or
other event or condition referred to in this paragraph shall
have occurred shall be equal to at least $5 million; or
(f) (i) The Borrower or CDH shall commence any case,
proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors,
seeking to have an order for relief entered with respect to
73
78
it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its
assets, or the Borrower or CDH shall make a general
assignment for the benefit of its creditors; or (ii) there
shall be commenced against the Borrower or CDH any case,
proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order
for relief or any such adjudication or appointment or
(B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against
the Borrower or CDH any case, proceeding or other action
seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial
part of its assets which results in the entry of an order
for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) the Borrower or CDH
shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) the
Borrower or CDH shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as
they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any Plan, (ii) any
"accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect
to any Plan or any Lien in favor of the PBGC or a Plan shall
arise on the assets of the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or
to terminate, any Single Employer Plan, which Reportable
Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan
for purposes of Title IV of ERISA, (iv) any Single Employer
Plan shall terminate for purposes of Title IV of ERISA,
(v) the Borrower or any Commonly Controlled Entity shall, or
in the reasonable opinion of the Required Lenders is likely
to, incur any liability in connection with a withdrawal
from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition
shall occur or exist with respect to a Plan; and in each
case in clauses (i) through (vi) above, such event or
condition, together with all other such events or
conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or
74
79
(h) One or more judgments or decrees shall be entered
against the Borrower or any Significant Subsidiary involving
in the aggregate a liability (not paid or fully covered by
insurance) of $3 million or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 60 days from the entry thereof;
provided, that no Default or Event of Default shall exist
under this paragraph (h) as a result of any such judgment or
decree if such judgment or decree is not against the
Borrower and the Borrower is not liable, by contract or
otherwise, to make any payment in respect of such judgment
or decree; or
(i) (i) The CDH Guarantee shall cease, for any reason,
to be in full force and effect or CDH shall so assert or
(ii) CDH shall fail, at any time, to be a direct Wholly-
Owned Subsidiary of the Borrower; or
(j) (i) Any Person not a Permitted Holder, or any
"group" (within the meaning of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended) not composed
entirely of Permitted Holders, (A) shall have acquired
beneficial ownership of more than 50% of any outstanding
class of Capital Stock having ordinary voting power in the
election of directors of the Borrower or (B) shall obtain
the power (whether or not exercised) to elect a majority of
the Borrower's directors or (ii) during any period of twelve
consecutive calendar months, individuals who were either
(x) directors of the Borrower on the first day of such
period (or who were appointed or nominated for election as
directors of the Borrower by at least a majority of the
individuals who were directors of the Borrower on the first
day of such period) or (y) appointed directors to replace
directors removed solely as a result of death or mental or
physical disability, shall cease to constitute a majority of
the Board of Directors;
(k) an event of default, as defined in any indenture
or instrument evidencing or under which any Significant
Subsidiary has at the date of this Agreement or shall
hereafter have outstanding any Debt, shall happen and be
continuing and either (i) such default results from the
failure to pay principal of such Debt in excess of $10
million at final maturity of such Debt or (ii) as a result
of such default, the maturity of such Debt shall have been
accelerated so that the same shall be or become due and
payable prior to the date on which the same would otherwise
have become due and payable, and such acceleration shall not
be rescinded or annulled within 30 days and the principal
amount of such Debt of any Significant Subsidiary in
default, or the maturity of which has been accelerated
aggregates $10 million or more; provided that such default
shall not be an Event of Default if such Debt is Non-
Recourse to the Borrower in respect of the amounts not paid
75
80
or due upon acceleration and the Borrower could, at the time
of default, Incur at least $1 of Debt under subsection
7.2(a);
then, and in any such event, (A) if such event is an Event of
Default specified in clause (i) or (ii) of paragraph (f) of this
Section with respect to the Borrower, automatically the
Commitments shall immediately terminate and the Loans hereunder
(with accrued interest thereon), the Notes and all other amounts
owing under this Agreement (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the
documents required thereunder) shall immediately become due and
payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with
the consent of the Required Lenders, the Agent may, or upon the
request of the Required Lenders, the Agent shall, by notice to
the Borrower declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and
(ii) with the consent of the Required Lenders, the Agent may, or
upon the request of the Required Lenders, the Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued
interest thereon), the Notes and all other amounts owing under
this Agreement (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents
required thereunder) to be due and payable forthwith, whereupon
the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to
which presentment for honor shall not have occurred at the time
of an acceleration pursuant to the preceding paragraph, the
Borrower shall at such time deposit in the Cash Collateral
Account an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit, to be held, applied
or released for application as cash collateral as provided in
subsection 3.9.
Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind
are hereby expressly waived.
SECTION 9. THE AGENT
9.1 Appointment. Each Lender and the Issuing Bank
hereby irrevocably designates and appoints the Agent as the agent
of such Lender and the Issuing Bank under this Agreement and the
other Loan Documents, and each such Lender and the Issuing Bank
irrevocably authorizes the Agent, in such capacity, to take such
action on its behalf under the provisions of this Agreement and
the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms
of this Agreement and the other Loan Documents, together with
76
81
such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender or the Issuing Bank, and
no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or
any other Loan Document or otherwise exist against the Agent.
9.2 Delegation of Duties. The Agent may execute any
of its duties under this Agreement and the other Loan Documents
by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither the Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates shall be (i) liable for any action lawfully taken
or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Loan Document (except
for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the
Lenders or the Issuing Bank for any recitals, statements,
representations or warranties made by the Borrower or any officer
thereof contained in this Agreement or any other Loan Document or
in any certificate, report, statement or other document referred
to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document or for
the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower to perform its obligations
hereunder or thereunder. The Agent shall not be under any
obligation to any Lender or the Issuing Bank to ascertain or to
inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or
records of the Borrower.
9.4 Reliance by Agent. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower),
independent accountants and other experts selected by the Agent.
The Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the
Agent. The Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Loan
77
82
Document unless it shall first receive such advice or concurrence
of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall
in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders, and such
request and any action taken or failure to act pursuant thereto
shall be binding upon all the Lenders, the Issuing Bank and all
future holders of the Loans.
9.5 Notice of Default. The Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Agent has received notice
from a Lender, the Issuing Bank or the Borrower referring to this
Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." In the event
that the Agent receives such a notice, the Agent shall give
notice thereof to the Lenders and the Issuing Bank. The Agent
shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders;
provided that unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to
such Default or Event of Default as it shall deem advisable in
the best interests of the Lenders and the Issuing Bank.
9.6 Non-Reliance on Agent and Other Lenders. Each
Lender and the Issuing Bank expressly acknowledges that neither
the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by the Agent hereinafter taken,
including any review of the affairs of the Borrower, shall be
deemed to constitute any representation or warranty by the Agent
to any Lender or the Issuing Bank. Each Lender and the Issuing
Bank represents to the Agent that it has, independently and
without reliance upon the Agent or any other Lender or the
Issuing Bank, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial
and other condition and creditworthiness of the Borrower and made
its own decision to make its Loans hereunder and enter into this
Agreement. Each Lender and the Issuing Bank also represents that
it will, independently and without reliance upon the Agent or any
other Lender or the Issuing Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking
or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents
expressly required to be furnished to the Lenders and the Issuing
78
83
Bank by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender or the Issuing Bank with any
credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower which may come into the
possession of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify
the Agent in its capacity as such (to the extent not reimbursed
by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on which
indemnification is sought, from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation,
at any time following the payment of the Loans) be imposed on,
incurred by or asserted against the Agent in any way relating to
or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred
to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Agent under or in
connection with any of the foregoing; provided that no Lender
shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting
solely from the Agent's gross negligence or willful misconduct.
The agreements in this subsection shall survive the termination
of this Agreement and payment of the Notes, the Loans and all
other Obligations.
9.8 Agent in Its Individual Capacity. The Agent and
its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower as
though the Agent were not the Agent hereunder and under the other
Loan Documents. With respect to the Loans made by it and any
Note issued to it and with respect to any Letter of Credit issued
or participated in by it, the Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as
any Lender and may exercise the same as though it were not the
Agent, and the terms "Lender" and "Lenders" shall include the
Agent in its individual capacity.
9.9 Successor Agent. The Agent may resign as Agent
upon 10 days' notice to the Lenders and the Issuing Bank. If the
Agent shall resign as Agent under this Agreement and the other
Loan Documents, then the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders and the
Issuing Bank, which successor agent (provided that it shall have
been approved by the Borrower), shall succeed to the rights,
powers and duties of the Agent hereunder. Effective upon such
appointment and approval, the term "Agent" shall mean such
successor agent, and the former Agent's rights, powers and duties
79
84
as Agent shall be terminated, without any other or further act or
deed on the part of such former Agent or any of the parties to
this Agreement or any holders of the Loans. After any retiring
Agent's resignation as Agent, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement and the
other Loan Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement
nor any other Loan Document, nor any terms hereof or thereof may
be amended, supplemented or modified except in accordance with
the provisions of this subsection. The Required Lenders may, or,
with the written consent of the Required Lenders, the Agent may,
from time to time, (a) enter into with the Borrower written
amendments, supplements or modifications hereto and to the other
Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner
the rights of the Lenders or of the Borrower hereunder or
thereunder or (b) waive, on such terms and conditions as the
Required Lenders or the Agent, as the case may be, may specify in
such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (i) reduce the amount
or extend the scheduled date of maturity of any Loan or of any
installment thereof, or reduce the stated rate of any interest or
fee payable hereunder or extend the scheduled date of any payment
thereof or increase the amount or extend the expiration date of
any Lender's Commitment, in each case without the consent of each
Lender affected thereby, or (ii) amend, modify or waive any
provision of this subsection or reduce the percentage specified
in the definition of Required Lenders or Majority Lenders, or
consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement and the other
Loan Documents, in each case without the written consent of all
the Lenders, or (iii) amend, modify or waive any provision of
Section 9 without the written consent of the Agent. Any such
waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon
the Borrower, the Lenders, the Issuing Bank, the Agent and all
future holders of the Loans. In the case of any waiver, the
Borrower, the Lenders and the Agent shall be restored to their
former positions and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; no such waiver shall
extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon. Notwithstanding any
provision of this Agreement (including, without limitation, any
provision of this subsection 10.1), the provisions of this
subsection 10.1 shall not apply to any amendment, supplement,
modification, or waiver with respect to the Fee Letter, and the
80
85
Fee Letter and any term thereof may be amended, supplemented or
modified, and any requirement or other provision thereof may be
waived, as permitted under the Fee Letter without meeting any
requirement (including, without limitation, any requirement to
obtain the agreement or consent of any Person) other than as may
be imposed by the Fee Letter.
10.2 Notices. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in
writing (including by facsimile transmission) and delivered by
hand or courier or sent by certified mail or facsimile
transmission and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made (a) in the case
of delivery by hand or courier, when delivered, (b) in the case
of delivery by certified mail, three Business Days after being
deposited in the mails, postage prepaid, or (c) in the case of
delivery by facsimile transmission, when sent and receipt has
been confirmed, addressed as follows in the case of the Borrower,
the Issuing Bank and the Agent, and as set forth in Schedule I in
the case of the other parties hereto, or to such other address as
may be hereafter notified by the respective parties hereto:
The Borrower: Cogentrix Energy, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with copy to General Counsel
Fax: ▇▇▇-▇▇▇-▇▇▇▇
The Agent and the
Issuing Bank: Australia and New Zealand Banking Group Limited
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Agent,
the Issuing Bank or the Lenders pursuant to subsection 2.2, 2.4,
2.6, 2.8, 2.9, 2.14, 2.20 or 3.2 shall not be effective until
received.
10.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Agent or
any Lender, any right, remedy, power or privilege hereunder or
under the other Loan Documents shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
81
86
10.4 Survival of Representations and Warranties;
Survival of Certain Agreements and Covenants. All
representations and warranties made hereunder, in the other Loan
Documents and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the making of the
Loans hereunder. To the extent provided in such subsections, the
agreements and covenants in subsections 2.16, 2.17(a), 2.18, 6.9,
9.7 and 10.5 shall survive the termination of this Agreement and
the payment of the Notes, the Loans and all other Obligations.
10.5 Payment of Expenses and Taxes. The Borrower
agrees (a) to pay or reimburse the Agent for all its
out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment,
supplement or modification to, or waiver or consent under or in
respect of, this Agreement and the other Loan Documents and any
other documents prepared in connection herewith or therewith, and
the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation,
the reasonable fees and disbursements of counsel to the Agent,
(b) to pay or reimburse each Lender, the Issuing Bank and the
Agent for all its costs and expenses incurred in connection with
the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents,
including, without limitation, the fees and disbursements of
counsel (including without limitation the allocated fees and
expenses of in-house counsel, if applicable) to each Lender and
of counsel to the Agent and (c) to pay, indemnify, and hold each
Lender, the Issuing Bank and the Agent harmless from, any and all
recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise
and other taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement,
the other Loan Documents and any such other documents. The
agreements in this subsection 10.5 shall survive the termination
of this Agreement and the payment of the Notes, the Loans and all
other Obligations.
10.6 Successors and Assigns; Participations and
Assignments. (a) This Agreement shall be binding upon and inure
to the benefit of the Borrower, the Lenders, the Issuing Bank,
the Agent and their respective successors and assigns, except
that the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written
consent of each Lender and the Issuing Bank (except as otherwise
may be permitted by subsection 7.9).
(b) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable
law, at any time sell to one or more banks or other entities
82
87
("Participants") participating interests in any Loan owing to
such Lender, any Commitment of such Lender or any other interest
of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain
unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any
such Loan for all purposes under this Agreement and the other
Loan Documents, and the Borrower and the Agent shall continue to
deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the
other Loan Documents. No Lender shall be entitled to create in
favor of any Participant, in the participation agreement pursuant
to which such Participant's participating interest shall be
created or otherwise, any right to vote on, consent to or approve
any matter relating to this Agreement or any other Loan Document
except for those specified in clauses (i) and (ii) of the proviso
to subsection 10.1. The Borrower agrees that if amounts
outstanding under this Agreement are due or unpaid, or shall have
been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall, to the
maximum extent permitted by applicable law, be deemed to have the
right of setoff in respect of its participating interest in
amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as
a Lender under this Agreement, provided that, in purchasing such
participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided
in subsection 10.7(a) as fully as if it were a Lender hereunder.
The Borrower also agrees that each Participant shall be entitled
to the benefits of subsections 2.16, 2.17 and 2.18 with respect
to its participation in the Commitments and the Loans outstanding
from time to time as if it was a Lender; provided that, in the
case of subsection 2.17, such Participant shall have complied
with the requirements of said subsection and provided, further,
that no Participant shall be entitled to receive any greater
amount pursuant to any such subsection than the transferor Lender
would have been entitled to receive in respect of the amount of
the participation transferred by such transferor Lender to such
Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable
law, at any time and from time to time assign to any Lender or
any affiliate thereof or, with the consent of the Borrower and
the Agent (which in each case shall not be unreasonably
withheld), to an additional bank or financial institution (an
"Assignee") all or any part of its rights and obligations under
this Agreement and the other Loan Documents pursuant to an
Assignment and Acceptance, substantially in the form of
Exhibit G, executed by such Assignee, such assigning Lender (and,
in the case of an Assignee that is not then a Lender or an
affiliate thereof, by the Borrower and the Agent) and delivered
83
88
to the Agent for its acceptance and recording in the Register,
provided that, in the case of any such assignment to an
additional bank or financial institution, the sum of the
aggregate principal amount of the Loans, the aggregate amount of
the L/C Obligations and the aggregate amount of the unused
Available Commitment being assigned is not less than $10 million
(or such lesser amount as may be agreed to by the Borrower and
the Agent). Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder
shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a
Lender hereunder with a Commitment and Commitment Percentage as
set forth therein, and (y) the assigning Lender thereunder shall,
to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations
under this Agreement, such assigning Lender shall cease to be a
party hereto).
(d) The Agent, on behalf of the Borrower, shall
maintain at the address of the Agent referred to in
subsection 10.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the
Commitment of, and principal amounts of the Loans owing to, each
Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower,
the Agent and the Lenders may (and, in the case of any Loan or
other obligation hereunder not evidenced by a Note, shall) treat
each Person whose name is recorded in the Register as the owner
of a Loan or other obligation hereunder as the owner thereof for
all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of
any Loan or other obligation hereunder not evidenced by a Note
shall be effective only upon appropriate entries with respect
thereto being made in the Register.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Assignee (and, in the case
of an Assignee that is not then a Lender or an affiliate thereof,
by the Borrower and the Agent) together with payment to the Agent
of a registration and processing fee of $2,500, the Agent shall
(i) promptly accept such Assignment and Acceptance and (ii) on
the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of
such acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to
any Participant or Assignee (each, a "Transferee") and any
prospective Transferee, subject to the provisions of
subsection 10.15, any and all financial information in such
Lender's possession concerning the Borrower and its Affiliates
84
89
which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered
to such Lender by or on behalf of the Borrower in connection with
such Lender's credit evaluation of the Borrower and its
Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this
Agreement acknowledge that the provisions of this subsection
concerning assignments of Loans and Notes relate only to absolute
assignments and that such provisions do not prohibit assignments
creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
10.7 Adjustments; Set-off. (a) If any Lender (a
"benefitted Lender") shall at any time receive any payment of all
or part of its Loans or the Reimbursement Obligations owing to
it, or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in
Section 8, or otherwise), in a greater proportion than any such
payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Loans or the Reimbursement
Obligations owing to it, or interest thereon, such benefitted
Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other
Lender's Loan or the Reimbursement Obligations owing to it, or
shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to
cause such benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the
Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the
Lenders provided by law, each Lender shall have the right,
without prior notice to the Borrower, any such notice being
expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each
case whether direct or indirect, absolute or contingent, matured
or unmatured, at any time held or owing by such Lender or any
branch or agency thereof to or for the credit or the account of
the Borrower. Each Lender agrees promptly to notify the Borrower
and the Agent after any such set-off and application made by such
Lender, provided that the failure to give such notice shall not
affect the validity of such set-off and application.
85
90
10.8 Counterparts. This Agreement may be executed by
one or more of the parties to this Agreement on any number of
separate counterparts (including by facsimile transmission), and
all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of
this Agreement signed by all the parties shall be lodged with the
Borrower and the Agent.
10.9 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrower, the Agent and
the Lenders with respect to the subject matter hereof, and there
are no promises, undertakings, representations or warranties by
the Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan
Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The
Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the
other Loan Documents to which it is a party, or for
recognition and enforcement of any judgement in respect
thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the
United States of America for the Southern District of
New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(c) agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar
form of mail), postage prepaid, to the Borrower at its
address set forth in subsection 10.2 or at such other
86
91
address of which the Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted
by law or shall limit the right to ▇▇▇ in any other
jurisdiction; and
(e) waives, to the maximum extent not prohibited by
law, any right it may have to claim or recover in any legal
action or proceeding referred to in this subsection any
special, exemplary, punitive or consequential damages.
10.13 Acknowledgments. The Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan
Documents;
(b) neither the Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan
Documents, and the relationship between Agent and Lenders,
on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor
and creditor; and
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the
transactions contemplated hereby among the Lenders or among
the Borrower and the Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
10.15 Confidentiality. Each Lender agrees to keep
confidential all non-public information provided to it by the
Borrower pursuant to this Agreement that is designated by the
Borrower in writing as confidential; provided that nothing herein
shall prevent any Lender from disclosing any such information
(i) to the Agent or any other Lender, (ii) to any Transferee
which receives such information having been made aware of the
confidential nature thereof, (iii) to its employees, directors,
agents, attorneys, accountants and other professional advisors,
(iv) upon the request or demand of any Governmental Authority
having jurisdiction over such Lender, (v) in response to any
order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law,
(vi) which has been publicly disclosed other than in breach of
87
92
this Agreement, or (vii) in connection with the exercise of any
remedy hereunder.
10.16 Rank. The parties hereto, for their own benefit
and not for the benefit of or for the purpose of creating any
duty, obligation or liability to any other Person (including,
without limitation, any party to the Borrower Indenture or any
holder of any Borrower Indenture Security), specifically
designate that the Extensions of Credit made by the Lenders and
the Issuing Bank to the Borrower under this Agreement are neither
senior nor subordinate to the Borrower Indenture Securities in
right of payment, except to the extent that the Extensions of
Credit are senior to the Borrower Indenture Securities as a
result of the security interest granted by the Borrower hereunder
in the Cash Collateral Account to the Agent for the benefit of
the Issuing Bank and the L/C Participants.
88
93
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
COGENTRIX ENERGY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President - Finance
Treasurer
AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED,
as Agent, as the Issuing Bank
and as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
89
94
Schedule I to
Credit Agreement
LENDERS' COMMITMENT PERCENTAGES
AND ADDRESSES FOR NOTICES
Commitment
Lender Percentage Commitment
Australia and New Zealand Banking Group Limited 100% $50,000,000
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇/
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇/▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
95
Schedule II to
Credit Agreement
APPLICABLE MARGIN
Status: ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ 5
Commitment Fee: 0.25% 0.30% 0.35% 0.40% 0.50 %
Eurodollar Loans: 0.60% 0.80% 1.00% 1.25% 1.625%
ABR Loans: -0.05% 0.15% 0.35% 0.60% 0.975%
Financial Letters
of Credit: 0.60% 0.80% 1.00% 1.25% 1.625%
Performance
Letters of Credit: 0.40% 0.60% 0.80% 1.05% 1.425%
For purposes of this Schedule, capitalized terms shall have the meanings
assigned to them in the Credit Agreement (as amended from time to time) to
which this Schedule is appended, provided that the following terms shall have
the following meanings:
"Level 1 Status" exists at any date if, at such date, the Borrower Indenture
Securities are rated BBB- or higher by S&P and Baa3 or higher by Moody's.
"Level 2 Status" exists at any date if, at such date, (i) the Borrower
Indenture Securities are rated BB+ or higher by S&P and Ba1 or higher by
Moody's and (ii) Level 1 Status does not exist.
"Level 3 Status" exists at any date if, at such date, (i) the Borrower
Indenture Securities are rated BB or higher by S&P and Ba2 or higher by
Moody's and (ii) neither ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ exists.
"Level 4 Status" exists at any date if, at such date, (i) the Borrower
Indenture Securities are rated BB- or higher by S&P and Ba3 or higher by
Moody's and (ii) none of ▇▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇
exists.
"Level 5 Status" exists at any date if, at such date, no other Status exists
or the Borrower Indenture Securities are not rated by both S&P and Moody's or
no Borrower Indenture Securities are outstanding.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"S&P" means Standard & Poor's Rating Group.
"Status" refers to the determination which of ▇▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇▇▇,
▇▇▇▇▇ 3 Status, Level 4 Status or Level 5 Status exists at any date. For
purposes of this determination, the credit rating in effect at any date is
that in effect at the close of business on such date.