[EXECUTION COPY]
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LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT
among
THE AES CORPORATION,
AS ACCOUNT PARTY
THE SEVERAL BANKS AND
FINANCIAL INSTITUTIONS
PARTIES HERETO FROM TIME TO TIME
AS PARTICIPATING BANKS
THE LETTER OF CREDIT ISSUING BANKS
PARTIES HERETO FROM TIME TO TIME
AS ISSUING BANKS
UNION BANK OF CALIFORNIA, N.A.,
AS ADMINISTRATIVE AGENT,
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK,
AS SYNDICATION AGENT
and
BANK OF AMERICA, N.A.,
AS DOCUMENTATION AGENT
Dated as of October 19, 1999
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TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS........................................................................1
Section 1.1 Defined Terms......................................................................1
Section 1.2 Other Definitional Provisions.....................................................18
Section 1.3 Currency Equivalents Generally....................................................19
ARTICLE 2. LETTERS OF CREDIT; REIMBURSEMENT..................................................20
Section 2.1 Issuing Banks; Issuance of Letters of Credit......................................20
Section 2.2 Termination or Reduction of the Commitments.......................................22
Section 2.3 Commissions and Fees..............................................................22
Section 2.4 Reimbursement and Other Payments by the Account Party.............................23
Section 2.5 Participation; Reimbursement of Issuing Banks.....................................24
Section 2.6 Payments and Computations.........................................................27
Section 2.7 Default Interest..................................................................28
Section 2.8 Requirements of Law...............................................................28
Section 2.9 Taxes.............................................................................30
Section 2.10 Sharing of Payments, Etc..........................................................32
Section 2.11 Obligations Absolute..............................................................32
Section 2.12 Evidence of Indebtedness..........................................................33
Section 2.13 Extension of the Termination Date.................................................33
Section 2.14 Cash Collateral Account; Letter of Credit in Lieu of Cash Collateral..............34
Section 2.15 Computations of Outstandings; Determination of Available
Amount of Alternative Currency Letters of Credit..................................35
ARTICLE 3. REPRESENTATIONS AND WARRANTIES....................................................37
Section 3.1 Corporate Existence and Power.....................................................37
Section 3.2 Corporate and Governmental Authorization; No Contravention........................37
Section 3.3 Binding Effect; Due Execution and Delivery........................................38
Section 3.4 Financial Information.............................................................38
Section 3.5 Litigation........................................................................38
Section 3.6 Compliance with ERISA.............................................................39
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TABLE OF CONTENTS
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Section 3.7 Environmental Matters.............................................................39
Section 3.8 Taxes.............................................................................39
Section 3.9 Material AES Entities.............................................................40
Section 3.10 Not an Investment Company.........................................................40
Section 3.11 Public Utility Holding Company Act................................................40
Section 3.12 Full Disclosure...................................................................40
Section 3.13 Year 2000 Compliance..............................................................40
ARTICLE 4. CONDITIONS PRECEDENT..............................................................41
Section 4.1 Conditions Precedent to Effectiveness of this Agreement...........................41
Section 4.2 Conditions Precedent to Each Extension of Credit..................................43
Section 4.3 Reliance on Certificates..........................................................43
ARTICLE 5. COVENANTS.........................................................................43
Section 5.1 Information.......................................................................44
Section 5.2 Payment of Obligations............................................................46
Section 5.3 Maintenance of Property; Insurance................................................46
Section 5.4 Conduct of Business and Maintenance of Existence..................................47
Section 5.5 Compliance with Laws..............................................................47
Section 5.6 Inspection of Property, Books and Records.........................................47
Section 5.7 Debt..............................................................................47
Section 5.8 Minimum Consolidated Net Worth....................................................51
Section 5.9 Restricted Payments...............................................................52
Section 5.10 Subordinated Debt and Senior Notes................................................52
Section 5.11 Limitations on Guarantees and Commitments.........................................52
Section 5.12 Negative Pledge...................................................................53
Section 5.13 Consolidations, Mergers and Sale of Assets........................................54
Section 5.14 Use of Letters of Credit..........................................................55
Section 5.15 Cash Flow Coverage................................................................55
Section 5.16 Cash Flow to Total Debt Ratio.....................................................56
Section 5.17 Transactions with Affiliates......................................................56
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PAGE
Section 5.18 Limitation on Investments.........................................................56
Section 5.19 Year 2000 Compliance..............................................................57
ARTICLE 6. EVENTS OF DEFAULT.................................................................58
Section 6.1 Events of Default.................................................................58
Section 6.2 Remedies Upon Events of Default...................................................60
ARTICLE 7. THE ADMINISTRATIVE AGENT, THE PARTICIPATING BANKS AND THE ISSUING BANKS...........61
Section 7.1 Appointment.......................................................................61
Section 7.2 Delegation of Duties..............................................................61
Section 7.3 Exculpatory Provisions............................................................61
Section 7.4 Reliance by Administrative Agent..................................................62
Section 7.5 Notice of Default.................................................................62
Section 7.6 Non-Reliance on Administrative Agent, Issuing Banks and Other Participating Banks.62
Section 7.7 Indemnification...................................................................63
Section 7.8 Administrative Agent and Issuing Banks in Individual Capacity.....................63
Section 7.9 Successor Administrative Agent....................................................63
ARTICLE 8. MISCELLANEOUS.....................................................................64
Section 8.1 Amendments and Waivers............................................................64
Section 8.2 Notices...........................................................................65
Section 8.3 No Waiver; Cumulative Remedies....................................................66
Section 8.4 Payment of Expenses and Taxes; General Indemnity..................................66
Section 8.5 Successors and Assigns; Participations; Purchasing Banks..........................66
Section 8.6 Set-off...........................................................................69
Section 8.7 Issuing Banks Not Liable..........................................................70
Section 8.8 Counterparts......................................................................70
Section 8.9 Severability......................................................................70
Section 8.10 Integration.......................................................................71
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Section 8.11 Governing Law.....................................................................71
Section 8.12 Submission To Jurisdiction; Waivers...............................................71
Section 8.13 Acknowledgements..................................................................71
Section 8.14 Judgment Currency.................................................................72
Section 8.15 WAIVERS OF JURY TRIAL.............................................................72
Section 8.16 Designated Senior Debt............................................................72
SCHEDULES
I Commitments and Addresses
II Pricing Schedule
III Existing Agreements with Affiliates
IV Existing Letters of Credit
EXHIBITS
A Form of Commitment Transfer Supplement
B Form of Issuing Bank Agreement
C Form of Opinion of General Counsel of the Account Party
D Form of Opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, Special New York Counsel
to the Account Party
E Form of Opinion of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, Special Counsel to the
Administrative Agent
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LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT, dated as of October 19, 1999,
among THE AES CORPORATION, a Delaware corporation (the "ACCOUNT PARTY"), the
several banks and other financial institutions from time to time parties to this
Agreement (the "PARTICIPATING BANKS"), the letter of credit issuing banks from
time to time parties to this Agreement (in such capacity, and together with any
bank or financial institution party to an Issuing Bank Agreement, the "ISSUING
BANKS"), UNION BANK OF CALIFORNIA, N.A. ("UNION BANK"), as administrative agent
for the Issuing Banks and the Participating Banks hereunder (in such capacity,
the "ADMINISTRATIVE AGENT"), ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK
("▇▇▇▇▇▇"), as Syndication Agent (in such capacity, the "SYNDICATION AGENT"),
and BANK OF AMERICA, N.A., as Documentation Agent (in such capacity, the
"DOCUMENTATION AGENT").
PRELIMINARY STATEMENT
The Account Party has requested the Issuing Banks and the Participating
Banks to provide the letter of credit facility hereinafter described in the
amounts and on the terms and conditions set forth herein. The Issuing Banks and
the Participating Banks have so agreed on the terms and conditions set forth
herein, and the Administrative Agent has agreed to act as agent for the Issuing
Banks and the Participating Banks on such terms and conditions.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 DEFINED TERMS. In addition to the terms defined in the preamble
hereto, as used in this Agreement, the following terms shall have the following
meanings (such meanings to be applicable to the singular and plural forms of the
terms defined):
"ADDITIONAL GUARANTORS" has the meaning assigned to that term in the
Existing Credit Facility (as in effect on the date hereof).
"ADDITIONAL PERMITTED SUBORDINATED DEBT AGREEMENT" means an indenture
or other agreement pursuant to which any Additional Permitted Subordinated
Debt is issued or incurred, as the same may, subject to Section 5.10, be
amended, modified or supplemented and in effect from time to time.
"ADDITIONAL PERMITTED SUBORDINATED DEBT" means Debt of the Account
Party (other than Debt evidenced by the Existing Subordinated Notes) which
does not require any scheduled payment of principal prior to December 19,
2003 and which has subordination provisions no less favorable to the Banks
than those applicable to the Existing 8-3/8% Subordinated Notes and other
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terms and provisions applicable to the Account Party and its Subsidiaries
that are no more restrictive in any material respect (including, without
limitation, covenants and events of default) than those applicable to the
Existing 8-3/8% Subordinated Notes or those otherwise acceptable to the
Required Banks.
"ADJUSTED PARENT OPERATING CASH FLOW" means, 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 Account Party during such period and regardless of
whether any such amount was accrued during such period:
(A) development expenses;
(B) income tax expenses of the Account Party and its subsidiaries; and
(C) corporate overhead expenses.
"AES ELECTRIC" means Applied Energy Services Electric Limited, an
English corporation, and its successors.
"AES HAWAII MANAGEMENT" means AES Hawaii Management Company, Inc., a
Delaware corporation and a Subsidiary of the Account Party, and its
successors.
"AES MANAGEMENT GROUP" means (i) individuals who are members of the
board of directors or officers of the Account Party or the president of any
Material AES Entity, (ii) their respective spouses, children,
grandchildren, siblings and parents, (iii) trusts established for the sole
or principal benefit of Persons described in clauses (i) and (ii) above,
(iv) heirs, executors, administrators and personal or legal representatives
of Persons described in clauses (i) and (ii) above, and (v) any corporation
or other Person that is controlled by, and a majority of the equity
interests in which are directly owned by, Persons described in clauses (i)
and (ii) above.
"AES JUNE 1999 FORM 10-Q" means the Account Party's quarterly report
on Form 10-Q for the fiscal quarter ended June 30, 1999, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act
of 1934.
"AES 1998 FORM 10-K" means the Account Party's annual report on Form
10-K for the year ended December 31, 1998, as filed with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934.
"AES OKLAHOMA" means AES Oklahoma Management Co., Inc., a Delaware
corporation and a Subsidiary of the Account Party, and its successors.
"AES PLACERITA" means AES Placerita, Inc., a Delaware corporation and
an indirect Subsidiary of the Account Party, and its successors.
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"AES SOUTHLAND" means AES Southland Funding LLC, a Delaware limited
liability company and a Wholly-Owned Consolidated Subsidiary of the Account
Party, and its successors.
"AES WARRIOR RUN" means AES Warrior Run Funding LLC, a Delaware
limited liability company and a Wholly-Owned Consolidated Subsidiary of the
Account Party, and its successors.
"AFFILIATE" means (i) any Person that directly, or indirectly through
one or more intermediaries, controls the Account Party (a "CONTROLLING
PERSON") or (ii) any Person (other than the Account Party or any Subsidiary
of the Account Party) which is controlled by or is under common control
with a Controlling Person. As used herein, the term "control" means
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"AGENCY FEE LETTERS" means, collectively, (i) the fee letter
agreement, dated September 10, 1999, between the Account Party and Union
Bank, (ii) the fee letter agreement, dated September 13, 1999, between the
Account Party and ▇▇▇▇▇▇, and (iii) the fee letter agreement, dated the
date hereof, between the Account Party and the Administrative Agent, in
each case as amended, supplemented or otherwise modified from time to time
in accordance with the terms thereof.
"AGREEMENT" means this Letter of Credit and Reimbursement Agreement,
as amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
"ALTERNATE BASE RATE" means a fluctuating interest rate PER ANNUM
equal at all times to the higher of (i) the Reference Rate and (ii) 1/2 of
one percent PER ANNUM plus the Federal Funds Rate. Each change in the
Alternate Base Rate shall take effect concurrently with any change in the
Reference Rate or the Federal Funds Rate.
"ALTERNATIVE CURRENCY" means (i) any lawful currency (other than
Dollars) that is freely transferable and convertible into Dollars or (ii)
with respect to any Letter of Credit issued by an Issuing Bank, any other
lawful currency (other than Dollars) that such Issuing Bank agrees may be
used as the designated currency of such Letter of Credit, PROVIDED that
such Issuing Bank is able to provide, and continues to provide, to the
Administrative Agent the information required pursuant to Section 2.15(b)
with respect to such Letter of Credit.
"ALTERNATIVE CURRENCY LETTER OF CREDIT" means any Letter of Credit
having a stated amount denominated in an Alternative Currency.
"ASSET DISPOSITION" has the meaning set forth in the Existing
Subordinated Note Indentures.
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"AUTOMATIC ACCELERATION EVENT" means the occurrence, with respect to
the Account Party, of any of the Events of Default listed in clauses (g)
and (h) of Section 6.1.
"AVAILABLE AMOUNT" means, for any Letter of Credit on any date of
determination, the maximum aggregate amount (which, in the case of any
Alternative Currency Letter of Credit, shall be the Dollar Equivalent of
such amount) available to be drawn under such Letter of Credit at any time
on or after such date, the determination of such maximum amount to assume
the compliance with and satisfaction of all conditions for drawing
enumerated therein.
"AVAILABLE COMMITMENT" means, for each Participating Bank on any day,
the unused portion of such Participating Bank's Commitment, computed after
giving effect to all Extensions of Credit and all expirations,
terminations, cancellations or reductions in the Available Amount of
Letters of Credit to be made on such day. "AVAILABLE COMMITMENTS" means the
aggregate of the Participating Banks' Available Commitments.
"BANKS" means, collectively, the Issuing Banks and the Participating
Banks.
"BENEFIT ARRANGEMENT" means, at any time, an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by
any member of the ERISA Group.
"BUSINESS DAY" means a day of the year on which banks are not required
or authorized to close in New York City and Los Angeles, California.
"CASH COLLATERAL ACCOUNT" has the meaning assigned to that term in
Section 2.14.
"CASH FLOW COVERAGE RATIO" means, for any period, the ratio of (i)
Adjusted Parent Operating Cash Flow for such period to (ii) Corporate
Charges for such period.
"CASH FLOW TO TOTAL DEBT RATIO" means, at any date, the ratio of (i)
Adjusted Parent Operating Cash Flow for the period of four consecutive
fiscal quarters ended on, or most recently prior to, such date to (ii) Debt
(other than Specified Equity-Related Debt, but only to the extent that the
sum of the aggregate principal amount of all Specified Equity-Related Debt
plus the liquidation preference of all preferred stock of the Account Party
does not exceed 25% of the sum (without duplication) of the aggregate
principal amount of such Specified Equity-Related Debt, such preferred
stock and Consolidated Net Worth at such date) of the Account Party at such
date.
"CLOSING DATE" means the Business Day upon which each of the
conditions precedent enumerated in Section 4.1 shall be fulfilled to the
satisfaction of the Administrative Agent, the Issuing Banks, the
Participating
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Banks and the Account Party. All transactions contemplated to occur on the
Closing Date shall occur contemporaneously on or prior to October 29, 1999
at the offices of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M. (New York City time), or at such other place
and time as the parties hereto may mutually agree.
"COMMITMENT" means, for each Participating Bank, the obligation of
such Participating Bank to participate in each Letter of Credit and the
related Letter of Credit Liabilities in an aggregate amount no greater than
the amount set forth opposite such Participating Bank's name on Schedule I
hereto or, if such Participating Bank has entered into one or more
Commitment Transfer Supplements with a Purchasing Bank, the aggregate
amount set forth for such Participating Bank in the Register maintained by
the Administrative Agent pursuant to Section 8.5(d), in each such case as
such amount may be reduced from time to time pursuant to Section 2.2.
"COMMITMENTS" means the total of the Participating Banks' Commitments
hereunder. The Commitments shall in no event exceed $250 million.
"COMMITMENT FEE RATE" means a rate PER ANNUM determined in accordance
with the Pricing Schedule annexed as Schedule II hereto.
"COMMITMENT PERCENTAGE" means, as of any date of determination (i)
with respect to a Participating Bank initially a party hereto, the
percentage set forth opposite such Participating Bank's name on Schedule I
hereto, except as provided in clause (iii) below, (ii) with respect to a
Purchasing Bank that became a Participating Bank party hereto by operation
of Section 8.5, the Commitment Percentage stated to be assumed by such
Purchasing Bank in the relevant Commitment Transfer Supplement, except as
provided in clause (iii) below, and (iii) with respect to any Participating
Bank described in clause (i) or (ii) above that assigns a percentage of its
interests in accordance with Section 8.5, its Commitment Percentage as
reduced by the percentage so assigned.
"COMMITMENT TRANSFER SUPPLEMENT" means a Commitment Transfer
Supplement entered into by a Participating Bank and a Purchasing Bank in
accordance with Section 8.5, substantially in the form of Exhibit A hereto.
"CONSOLIDATED DEBT" means, at any date, the Debt of the Account Party
and its Consolidated Subsidiaries, determined on a consolidated basis as of
such date.
"CONSOLIDATED NET INCOME" means, for any period, the consolidated net
income (or loss) of the Account Party and its Consolidated Subsidiaries for
such period.
"CONSOLIDATED NET WORTH" means, at any date, the consolidated
stockholders' equity of the Account Party and its Consolidated Subsidiaries
determined as of such date without giving effect to any currency
translation adjustments after September 30, 1997.
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"CONSOLIDATED SUBSIDIARY" means, at any date with respect to any
Person, any Subsidiary of such Person or other entity the accounts of which
would be consolidated with those of such Person in its consolidated
financial statements if such statements were prepared as of such date.
"CORPORATE CHARGES" means, for any period, the sum of the following
amounts (determined without duplication), in each case to the extent paid
by the Account Party during such period and regardless of whether any such
amount was accrued during such period:
(A) interest expense (including, without limitation, interest
expense in respect of Specified Equity-Related Debt) of the Account
Party for such period;
(B) rental expense of the Account Party for such period; and
(C) dividends paid on the Account Party's capital stock during
such period.
"DEBT" of any Person means at any date, without duplication, (i) all
obligations 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 to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
capitalized in accordance with generally accepted accounting principles,
(v) all obligations (whether contingent or non-contingent) of such Person
to reimburse any bank or other Person in respect of amounts paid under a
letter of credit, surety or performance bond or similar instrument, (vi)
all Debt secured by a Lien on any asset of such Person, whether or not such
Debt is otherwise an obligation of such Person, and (vii) all Debt of
others Guaranteed by such Person. For purposes hereof, contingent
obligations of the type described in clause (v) of this definition with
respect to letters of credit not issued hereunder shall not be treated as
"Debt" hereunder to the extent that such obligations are cash
collateralized or to the extent that the issuer of any such letter of
credit is entitled to draw under a Letter of Credit issued hereunder which
by its terms requires that drawings under such Letter of Credit be applied
only to reimburse such issuer for amounts paid by such issuer under such
letter of credit.
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DEFAULT RATE" means a fluctuating interest rate equal at all times to
2% PER ANNUM above the Alternate Base Rate in effect from time to time.
"DESIGNATED SUBSIDIARY" means each of AES Connecticut Management Co.,
Inc., AES Oklahoma Management Co., Inc., AES Hawaii Management Co., Inc.,
AES Thames, Inc., AES Hawaii, Inc., AES Shady Point, Inc., AES Southland
and its Subsidiaries, AES Warrior Run and its Subsidiaries, and
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each Subsidiary of the Account Party that holds a direct or indirect
interest in AES Southland or AES Warrior Run.
"DOLLAR EQUIVALENT" means, on any date of determination with respect
to any Alternative Currency Letter of Credit, (i) in calculating the
maximum aggregate amount available to be drawn under such Alternative
Currency Letter of Credit at any time on or after such date, the amount
thereof in Dollars most recently reported to the Administrative Agent
pursuant to Section 2.15(b) and (ii) in calculating the amount of any
Drawing under such Alternative Currency Letter of Credit, the aggregate
amount of Dollars paid by the relevant Issuing Bank to purchase the
Alternative Currency paid by such Issuing Bank in respect of such Drawing.
"DOLLARS" and the sign "$" each means lawful currency of the United
States.
"DRAWING" means a drawing effected under any Letter of Credit.
"8% SENIOR NOTES" means the Account Party's 8% Senior Notes due 2008
issued pursuant to the 1998 Senior Note Indenture.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions,
grants, franchises, licenses, agreements and other governmental
restrictions relating to the environment, the effect of the environment on
human health or to emissions, discharges or releases of pollutants,
contaminants, Hazardous Substances or wastes into the environment,
including, without limitation, ambient air, surface water, ground water or
land, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of pollutants,
contaminants, Hazardous Substances or wastes or the clean-up or other
remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA GROUP" means the Account Party, its Subsidiaries and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Account Party or any of its Subsidiaries, are treated as a single employer
under Section 414 of the Internal Revenue Code.
"EVENT OF DEFAULT" has the meaning specified in Section 6.1.
"EXISTING CREDIT FACILITY" means the Credit Agreement, dated as of
December 19, 1997, as amended and restated as of March 31, 1999 and as
amended pursuant to Amendment No. 1 thereto dated as of May 21, 1999,
Amendment No. 2 thereto dated as of July 27, 1999, and Amendment No. 3
thereto dated as of September 28, 1999, among the Account Party, the banks
listed therein, the Fronting Banks listed therein, and ▇▇▇▇▇▇ Guaranty
Trust
8
Company of New York, as Agent, as the same may be amended, modified,
supplemented, extended, renewed, refinanced or replaced and in effect from
time to time.
"EXISTING 8-3/8% SUBORDINATED NOTES" means the Account Party's 8-3/8%
Senior Subordinated Notes due 2007 issued pursuant to the Existing 8-3/8%
Subordinated Note Indenture.
"EXISTING 8-3/8% SUBORDINATED NOTE INDENTURE" means the Indenture
dated as of July 17, 1997 between the Account Party and The Bank of New
York, as Trustee, relating to the Existing 8-3/8% Subordinated Notes, as
such Indenture may, subject to Section 5.10, be amended, modified or
supplemented and in effect from time to time.
"EXISTING 8.50% SUBORDINATED NOTES" means the Account Party's 8.50%
Senior Subordinated Notes due 2007 issued pursuant to the Existing October
1997 Subordinated Note Indenture.
"EXISTING 8.875% SUBORDINATED DEBENTURES" means the Account Party's
8.875% Senior Subordinated Debentures due 2027 issued pursuant to the
Existing October 1997 Subordinated Note Indenture.
"EXISTING LETTER OF CREDIT" means any letter of credit issued by an
Issuing Bank (whether prior to or after the date hereof) for the account of
the Account Party or any of its Subsidiaries pursuant to the Existing
Credit Facility or any other agreement (other than this Agreement) to which
the Account Party is a party, including each of the letters of credit set
forth in Schedule IV hereto.
"EXISTING OCTOBER 1997 SUBORDINATED NOTE INDENTURE" means the
Indenture dated as of October 29, 1997 between the Account Party and The
First National Bank of Chicago, as Trustee, relating to the Existing 8.50%
Subordinated Notes and the Existing 8.875% Subordinated Debentures, as such
Indenture may, subject to Section 5.10, be amended, modified or
supplemented and in effect from time to time.
"EXISTING SUBORDINATED NOTES" means (i) the Existing 8-3/8%
Subordinated Notes, (ii) the Existing 10 1/4% Subordinated Notes, (iii) the
Existing 8.50% Subordinated Notes and (iv) the Existing 8.875% Subordinated
Debentures.
"EXISTING SUBORDINATED NOTE INDENTURES" means (i) the Existing 8-3/8%
Subordinated Note Indenture, (ii) the Existing 10-1/4% Subordinated Note
Indenture and (iii) the Existing October 1997 Subordinated Note Indenture.
"EXISTING 10-1/4% SUBORDINATED NOTES" means the Account Party's
10-1/4% Senior Subordinated Notes due 2006 issued pursuant to the Existing
10-1/4% Subordinated Note Indenture.
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"EXISTING 10-1/4% SUBORDINATED NOTE INDENTURE" means the Indenture
dated as of July 1, 1996 between the Account Party and The First National
Bank of Chicago, as Trustee, relating to the Existing 10-1/4% Subordinated
Notes, as such Indenture may, subject to Section 5.10, be amended, modified
or supplemented and in effect from time to time.
"EXTENSION OF CREDIT" means (i) the issuance (or deemed issuance) of a
Letter of Credit or (ii) the amendment of any Letter of Credit having the
effect of extending the stated expiry or termination date thereof or
increasing the Available Amount thereunder.
"FEDERAL FUNDS RATE" means, for any day, the rate PER ANNUM (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day; PROVIDED that (i) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the
next succeeding Business Day, and (ii) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average (rounded upward, if necessary, to the nearest 1/100 of
1%) of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such 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
(whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to
take-or-pay or to maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose 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.
"HAZARDOUS SUBSTANCES" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
10
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"INVESTMENT" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, Guarantee, time deposit or
otherwise (but not including any demand deposit).
"INVESTMENT AND GUARANTEE COMMITMENTS" means, without duplication, (i)
all commitments (contingent or otherwise) by the Account Party to make
Investments and (ii) all obligations (contingent or otherwise but excluding
obligations hereunder) of the Account Party to make payments under
Guarantees.
"ISSUING BANK" has the meaning assigned to such term in the preamble
hereto and includes (i) any Participating Bank designated by the Account
Party that accepts such designation and (ii) any other financial
institution designated by the Account Party and acceptable to the
Administrative Agent that accepts such designation, in each case in
accordance with Section 2.1, as the issuer of a Letter of Credit pursuant
to an Issuing Bank Agreement. As of the date hereof, the Account Party has
designated Union Bank, ▇▇▇▇▇▇ and the other financial institutions set
forth in Schedule IV hereto as Issuing Banks.
"ISSUING BANK AGREEMENT" means an agreement between an Issuing Bank
and the Account Party, substantially in the form of Exhibit B or otherwise
in form and substance satisfactory to the Administrative Agent (it being
understood that any such agreement that (i) contains a provision
substantially similar to Section 2.01 of the form of Issuing Bank Agreement
attached hereto as Exhibit B and (ii) does not contain any terms that are
inconsistent with any of the terms of this Agreement, shall be deemed to be
satisfactory to the Administrative Agent), providing for the issuance (or
deemed issuance) of one or more Letters of Credit.
"LETTER OF CREDIT" means a letter of credit issued (or deemed issued)
by an Issuing Bank pursuant to Section 2.1 (including each Existing Letter
of Credit set forth in Schedule IV) for the account of the Account Party or
one or more of its Subsidiaries (PROVIDED, that the Account Party shall
remain liable with respect to the reimbursement of all Drawings thereunder
pursuant to this Agreement), as such letter of credit may from time to time
be increased, extended or otherwise modified in accordance with the terms
of this Agreement and the Issuing Bank Agreement to which it relates.
"LETTER OF CREDIT COMMISSION RATE" means a rate PER ANNUM determined
in accordance with the Pricing Schedule annexed as Schedule II hereto.
"LETTER OF CREDIT EXPIRATION DATE" means the date that occurs five
Business Days prior to the then-scheduled Termination Date.
11
"LETTER OF CREDIT LIABILITIES" means, at any time and in respect of
any Letter of Credit, the sum, without duplication, of (i) the Available
Amount of such Letter of Credit PLUS (ii) the aggregate unpaid amount of
all Reimbursement Obligations in respect of previous Drawings made under
such Letter of Credit.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a
security interest, in respect of such asset. For the purposes of this
Agreement, the Account Party or any of its Subsidiaries shall be deemed to
own subject to a Lien any asset 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 asset.
"LOAN DOCUMENTS" means this Agreement, the Issuing Bank Agreements,
the Agency Fee Letters and all other agreements, instruments and documents
now or hereafter executed and delivered by the Account Party or any
Subsidiary Guarantor pursuant hereto or thereto.
"MATERIAL AES ENTITY" means (i) any Subsidiary Guarantor, (ii) any
Specified Subsidiary and (iii) any other Person in which the Account Party
has a direct or indirect equity Investment if such Person's contribution to
Parent Operating Cash Flow for the four most recently completed fiscal
quarters of the Account Party constitutes 15% or more of Parent Operating
Cash Flow for such period.
"MATERIAL DEBT" means, with respect to any Person, Debt (other than
the Reimbursement Obligations) of such Person arising in one or more
related or unrelated transactions, in an aggregate principal amount
exceeding $15,000,000.
"MATERIAL PLAN" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $15,000,000.
"MAXIMUM OUTSTANDING EXPOSURE" has the meaning assigned to that term
in Section 2.15(a).
"MINIMUM CP RATING" means (i) A-1 for Standard & Poor's Ratings
Services, (ii) P-1 for ▇▇▇▇▇'▇ Investors Service, Inc., (iii) F-1 for Fitch
IBCA, Inc. and (iv) D-1 for Duff & ▇▇▇▇▇▇ Credit Rating Co.
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member
of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made
contributions, including for these purposes any Person which ceased to be a
member of the ERISA Group during such five year period.
12
"NET CASH PROCEEDS" has the meaning set forth in the Existing
Subordinated Note Indentures.
"1998 SENIOR NOTE INDENTURE" means the Senior Indenture, dated as of
December 8, 1998, between the Account Party and The First National Bank of
Chicago, as Trustee, relating to the Senior Notes, as such Indenture may,
subject to Section 5.10, be amended, modified or supplemented and in effect
from time to time.
"9.50% SENIOR NOTES" means the Account Party's 9.50% Senior Notes due
2009 issued pursuant to the 1998 Senior Note Indenture.
"PARENT OPERATING CASH FLOW" means, for any period, the sum of the
following amounts (determined without duplication), but only to the extent
received in cash by the Account Party from any other Person during such
period:
(A) dividends paid to the Account Party by its Subsidiaries during
such period;
(B) consulting and management fees paid to the Account Party for such
period;
(C) tax sharing payments made to the Account Party during such period;
(D) interest and other distributions paid during such period with
respect to cash and other Temporary Cash Investments of the Account Party
(other than with respect to amounts on deposit in any account to cash
collateralize Letters of Credit issued (or deemed issued) hereunder or
letters of credit issued (or deemed issued) under the Existing Credit
Facility); and
(E) other cash payments made to the Account Party by its Subsidiaries
other than (i) returns of invested capital, (ii) payments of the principal
of Debt of any such Subsidiary to the Account Party, and (iii) payments in
an amount equal to the aggregate amount released from debt service reserve
accounts upon the issuance of Letters of Credit for the benefit of the
beneficiaries of such accounts.
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For purposes of determining Parent Operating Cash Flow:
(1) net cash payments received by a Qualified Holding Company during
any period which could have been (without regard for any cash held by such
Qualified Holding Company at the beginning of such period), but were not,
paid as a dividend to the Account Party during such period due to tax or
other cash management considerations may be included in Parent Operating
Cash Flow for such period; PROVIDED that any amounts so included will not
be included in Parent Operating Cash Flow if and when paid to the Account
Party in any subsequent period;
(2) if at any time there shall exist an event or condition which
permits any holder to accelerate the maturity date of any Debt of, or
terminate its commitment to extend credit to, any Subsidiary of the Account
Party, then the contributions of such Subsidiary to Parent Operating Cash
Flow for any period ending at or prior to such time shall be eliminated and
Parent Operating Cash Flow shall be calculated after giving effect to such
elimination;
(3) if any Subsidiary of the Account Party is sold or otherwise
disposed of (by way of merger, sale of capital stock, sale of assets or
otherwise), (x) the net cash proceeds from such sale or other disposition
shall not be included in Parent Operating Cash Flow for any period and (y)
the contributions of such Subsidiary to Parent Operating Cash Flow for any
period shall be eliminated and Parent Operating Cash Flow shall be
calculated after giving effect to such elimination; and
(4) no dividends, fees or payments made to the Account Party with the
proceeds of any amounts paid to the Account Party or any of its
Subsidiaries in connection with the $525,000,000 additional prepayment made
by The Connecticut Light and Power Company ("CL&P") pursuant to the First
Amendment to the Electricity Purchase Agreement between CL&P and AES
Thames, Inc., or any amounts paid to the Account Party or any of its
Subsidiaries in connection with any monetization, sale or securitization of
any right to receive any such prepayment, shall be included in Parent
Operating Cash Flow, except to the extent that such proceeds (x) have been
received by the Account Party in cash in such period or an earlier period
and (y) are included in Consolidated Net Income for such period.
"PARTICIPANT" has the meaning assigned to such term in Section 8.5(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED SENIOR UNSECURED DEBT" means unsecured Debt of the Account
Party that (i) is not guaranteed by any Subsidiary or Affiliate of the
Account Party and (ii) that is in an aggregate principal amount not
exceeding the lesser of (x) $300,000,000 and (y) $600,000,000 less the
aggregate amount of the Commitments (as defined in the Existing Credit
Facility).
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"PERSON" means an individual, partnership, corporation (including,
without limitation, a business trust), limited liability company, joint
stock company, trust, unincorporated association, joint venture,
Governmental Authority, or other entity or organization of whatever nature.
"PLAN" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Internal Revenue
Code and either (i) is maintained, or contributed to, by any member of the
ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed
to, by any Person which was at such time a member of the ERISA Group for
employees of any Person which was at such time a member of the ERISA Group.
"POWER PROJECT" means an electric power or thermal energy generation
or cogeneration facility or related facilities, and its or their related
electric power transmission, distribution, fuel supply and fuel
transportation facilities, together with its or their related power supply,
thermal energy and fuel contracts as well as other contractual arrangements
with customers, suppliers and contractors.
"POWER PROJECT DEBT" means Debt of a Subsidiary of the Account Party
permitted by Section 5.7(a)(ii).
"POWER PROJECT DEFAULT" means any event or condition which results in
the acceleration of the maturity of any Power Project Debt or enables the
holder of such Power Project Debt or any Person acting on such holder's
behalf to then accelerate the maturity thereof, or failure to pay any Power
Project Debt at the final maturity thereof.
"PURCHASING BANKS" has the meaning assigned to that term in Section
8.5(c).
"QUALIFIED HOLDING COMPANY" means any Wholly-Owned Consolidated
Subsidiary of the Account Party that satisfies, and all of whose direct or
indirect holding companies (other than the Account Party) are Wholly-Owned
Consolidated Subsidiaries of the Account Party that satisfy, the following
conditions:
(i) its direct and indirect interest in any Power Project or
unrelated business shall be limited to the ownership of capital stock
or Debt obligations of a Person with a direct or indirect interest in
such Power Project or unrelated business;
(ii) no consensual encumbrance or restriction of any kind shall
exist on its ability to make payments, distributions, loans, advances
or transfers to the Account Party;
(iii) it shall not have outstanding any Debt other than
Guarantees of Debt of the Account Party under the Existing Credit
15
Facility (subject to Section 5.7(a)(iv)) and under the Loan Documents
and Debt to other Qualified Holding Companies; and
(iv) it shall engage in no business or other activity, shall
enter into no binding agreements and shall incur no obligations other
than (A) the holding of the capital stock and Debt obligations
permitted under clause (i) above, (B) the holding of cash received
from its Subsidiaries and the investment thereof in Temporary Cash
Investments, (C) the payment of dividends to the Account Party, (D)
ordinary business development activities, (E) the making (but not the
entering into binding obligations to make) of Investments in Power
Projects owned by its Subsidiaries, and (F) in the case of AES
Electric, the making of Investments in Power Projects owned by NIGEN
Limited and Medway Power Limited as of the date of this Agreement
under any agreement by which it is bound as of the date of this
Agreement.
"QUALIFIED PREFERRED EQUITY" means, at any date, equity interests in a
Consolidated Subsidiary of the Account Party (i) that are not (A) required
to be redeemed or redeemable at the option of the holder thereof prior to
the fifth anniversary of the Termination Date or (B) convertible into or
exchangeable for (unless solely at the option of the Account Party) equity
interests referred to in clause (A) above or Debt having a scheduled
maturity, or requiring any repayments or prepayments of principal or any
sinking fund or similar payments in respect of principal or providing for
any such repayment, prepayment, sinking fund or other payment at the option
of the holder thereof prior to the fifth anniversary of the Termination
Date and (ii) as to which, at such date, AES has the right to defer the
payment of all dividends and other distributions in respect thereof for the
period of at least 19 consecutive quarters beginning at such date.
"REFERENCE RATE" means the rate of interest announced publicly by
Union Bank in Los Angeles, California, from time to time, as the Union Bank
Reference Rate (it being acknowledged that such Reference Rate may not
necessarily be the lowest rate of interest charged to any class of
borrowers by Union Bank).
"REGISTER" has the meaning assigned to that term in Section 8.5(d).
"REGULATION G" means Regulation G of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT OBLIGATIONS" means at any date the obligations then
outstanding of the Account Party under Section 2.4 to reimburse the Issuing
Banks for amounts drawn under Letters of Credit.
16
"RELATED PARTIES" means, with respect to any specified Person, such
Person's affiliates (including its Affiliates and Subsidiaries) and the
respective directors, officers, employees, agents, attorneys-in-fact and
advisors of such Person and such Person's affiliates (including its
Affiliates and Subsidiaries).
"REQUEST FOR ISSUANCE" has the meaning assigned to that term in
Section 2.1(c).
"REQUIRED BANKS" means, on any date of determination, Participating
Banks who, collectively, on such date (i) have Commitment Percentages in
the aggregate of greater than 50% or (ii) if the Commitments have been
terminated, hold participations in a majority of the then aggregate
outstanding Letter of Credit Liabilities.
"REQUIREMENT OF LAW" means, as to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other
Governmental Authority (including, without limitation, any judgment, writ,
injunction, decree, or order of any court), in each case applicable to or
binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"RESTRICTED PAYMENT" means (i) any dividend or other distribution on
any shares of the Account Party's common stock (except dividends payable
solely in shares of its common stock) or (ii) any payment on account of the
purchase, redemption, retirement or acquisition of (a) any shares of the
Account Party's capital stock or (b) any option, warrant or other right to
acquire shares of the Account Party's capital stock.
"SENIOR NOTES" means, collectively, the 8% Senior Notes and the 9.50%
Senior Notes.
"SIGNIFICANT AES ENTITY" means (i) any Material AES Entity and (ii)
any other Person in which the Account Party has a direct or indirect equity
Investment if (A) such Person's contribution to Parent Operating Cash Flow
for the four most recently completed fiscal quarters of the Account Party
constitutes 10% or more of Parent Operating Cash Flow for such period, or
(B) the Account Party's direct or indirect interest in the total assets of
such Person if such Person is a Consolidated Subsidiary or in the net
assets of such Person in all other cases is at least equal to 10% of the
consolidated assets of the Account Party and its Consolidated Subsidiaries,
taken as a whole, or the Account Party's direct or indirect interest in the
total net income of such Person (for the preceding fiscal quarter) is at
least equal to 10% of the net income of the Account Party and its
Consolidated Subsidiaries (for the preceding fiscal quarter) taken as a
whole.
"SOUTHLAND" means AES Southland Holdings, LLC.
"SPECIFIED EQUITY-RELATED DEBT" means, at any date, (i) Debt of the
Account Party (A) that is owed to a Consolidated Subsidiary of the Account
17
Party, (B) that is issued in connection with the issuance by such
Consolidated Subsidiary of Qualified Preferred Equity, (C) that is
subordinated to other Debt of the Account Party of at least the types and
to at least the extent as was, on the date of issuance thereof, the Junior
Subordinated Debentures issued by the Account Party in connection with the
issuance by AES Trust II of its $2.75 Term Convertible Securities, Series
B, on October 29, 1996, (D) as to which, at such date, the Account Party
has the right to defer the payment of all interest for the period of at
least 19 consecutive quarters beginning at such date and (E) that does not
mature, in whole or in part, and is not subject to any required repayment
or prepayment, any required sinking fund or similar payment or any
repayment or prepayment or sinking fund or similar payment at the option of
the holder thereof, prior to the fifth anniversary of the Termination Date,
and (ii) Guarantees by the Account Party of the obligations of the issuer
of any Qualified Preferred Equity in respect of such Qualified Preferred
Equity.
"SPECIFIED SUBSIDIARY" means each Designated Subsidiary and each other
Subsidiary of the Account Party that holds, directly or indirectly, any
interest in any Designated Subsidiary.
"SUBORDINATED DEBT" means Debt in respect of the Existing Subordinated
Notes and the Additional Permitted Subordinated Debt.
"SUBORDINATED NOTE INDENTURES" means the Existing Subordinated Note
Indentures and the Additional Permitted Subordinated Debt Agreements.
"SUBSIDIARY" means, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having
ordinary voting power 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.
"SUBSIDIARY GUARANTORS" has the meaning assigned to that term in the
Existing Credit Facility (as in effect on the date hereof).
"SUBSIDIARY GUARANTY" has the meaning assigned to that term in the
Existing Credit Facility (as in effect on the date hereof).
"TEMPORARY CASH INVESTMENT" means any Investment in (A)(i) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (ii) commercial
paper rated at least the Minimum CP Rating by any two of Standard & Poor's
Ratings Services, ▇▇▇▇▇'▇ Investors Service, Inc., Fitch IBCA, Inc. and
Duff & ▇▇▇▇▇▇ Credit Rating Co., PROVIDED that one of such two Minimum CP
Ratings is by Standard & Poor's Ratings Services or ▇▇▇▇▇'▇ Investors
Service, Inc., (iii) time deposits with, including certificates of deposit
issued by, any office located in the United States of any bank or trust
company which is organized or licensed under the laws of the United States
or any state thereof and has capital, surplus and undivided profits
aggregating at least $500,000,000, (iv) medium term notes, asset backed
securities, bonds, notes
18
and letter of credit supported instruments, issued by any entity organized
under the laws of the United States, or any state or municipality of the
United States and rated in any of the three highest rated categories by
Standard & Poor's Ratings Services or ▇▇▇▇▇'▇ Investors Service, Inc., (v)
repurchase agreements with respect to securities described in clause (i)
above entered into with an office of a bank or trust company meeting the
criteria specified in clause (iii) above, (vi) eurodollar certificates of
deposit issued by any bank or trust company which has capital and
unimpaired surplus of not less than $500,000,000 or (vii) with respect to
any Subsidiary of the Account Party, any category of investment designated
as permissible investments under such Subsidiary's project loan
documentation, PROVIDED in each case (except clause (vii)) that such
Investment matures within fifteen months from the date of acquisition
thereof by the Account Party or any of its Subsidiaries, and (B) registered
investment companies that are "money market funds" within the meaning of
Rule 2a-7 under the Investment Company Act of 1940.
"TERMINATION DATE" means the earlier to occur of (i) the third
anniversary of the date hereof or such later date to which the Termination
Date is extended in accordance with Section 2.13 and (ii) the date of
termination or reduction in whole of the Commitments pursuant to Section
2.2 or 6.2.
"TRANSFEREE" has the meaning assigned to that term in Section 8.5(f).
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time,
the amount (if any) by which (i) the value of all benefit liabilities under
such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii)
the fair market value of all Plan assets allocable to such liabilities
under Title IV of ERISA (excluding any accrued but unpaid contributions),
all determined as of the then most recent valuation date for such Plan, but
only to the extent that such excess represents a potential liability of a
member of the ERISA Group to the PBGC or any other Person under Title IV of
ERISA.
"UNITED STATES" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
"WHOLLY-OWNED CONSOLIDATED SUBSIDIARY" means any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests
of which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Account Party.
"YEAR 2000 COMPLIANT" has the meaning assigned to that term in Section
3.13.
SECTION 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 certificate or other document made or delivered pursuant
hereto.
19
(b) Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Account Party's independent public accountants) with the most recent audited
consolidated financial statements of the Account Party and its Consolidated
Subsidiaries delivered to the Banks; PROVIDED that, if the Account Party
notifies the Administrative Agent that the Account Party wishes to amend any
covenant in Article 5 to eliminate the effect of any change in generally
accepted accounting principles on the operation of such covenant (or if the
Administrative Agent notifies the Account Party that the Required Banks wish to
amend Article 5 for such purpose), then the Account Party's compliance with such
covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Account
Party and the Required Banks.
(c) Unless otherwise indicated, each reference in this Agreement to a
specific time of day is a reference to New York City time. In the computation of
periods of time under this Agreement, any period of a specified number of days
or months shall be computed by including the first day or month occurring during
such period and excluding the last such day or month. In the case of a period of
time "FROM" a specified date "TO" or "UNTIL" a later specified date, the word
"FROM" means "FROM AND INCLUDING" and the words "TO" and "UNTIL" each means "TO
BUT EXCLUDING".
(d) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"INCLUDE", "INCLUDES", and "INCLUDING" shall be deemed to be followed by the
phrase "WITHOUT LIMITATION". The word "WILL" shall be construed to have the same
meaning and effect as the word "SHALL". Unless the context requires otherwise
(i) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein or in any other Loan Document), (ii) any reference herein to
any Person shall be construed to include such Person's successors and assigns,
(iii) the words "HEREIN", "HEREOF" and "HEREUNDER", and words of similar import,
shall be construed to refer to this Agreement in its entirety and not to any
particular provision hereof, (iv) all references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement and (v) the words "ASSET" and
"PROPERTY" shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.
SECTION 1.3 CURRENCY EQUIVALENTS GENERALLY. For all purposes of this
Agreement, the equivalent in any Alternative Currency of an amount in Dollars
shall be determined at the rate of exchange quoted by the Administrative Agent
in Los Angeles, California, at 11:00 a.m. (Los Angeles time) on the date of
determination, to prime banks in Los
20
Angeles, California for the spot purchase in the Los Angeles foreign exchange
market of such amount of Dollars with such Alternative Currency.
ARTICLE 2
LETTERS OF CREDIT; REIMBURSEMENT
SECTION 2.1 ISSUING BANKS; ISSUANCE OF LETTERS OF CREDIT. (a) Subject to
the terms and conditions hereof, the Account Party may from time to time
identify and arrange for one or more Participating Banks or other financial
institutions to act as Issuing Banks hereunder. Any such designation by the
Account Party shall be accepted by the proposed Issuing Bank and shall be
notified to the Administrative Agent at least three Business Days prior to the
first date upon which the Account Party proposes that such Issuing Bank issue
(or, pursuant to subsection (d) below, be deemed to have issued) its first
Letter of Credit. Within two Business Days following the receipt of any such
designation of a financial institution (other than a Participating Bank) as a
proposed Issuing Bank, the Administrative Agent shall notify the Account Party
as to whether such designee is acceptable to the Administrative Agent. The
failure by the Administrative Agent to provide such notice to the Account Party
within such time period shall be deemed to be an approval of such proposed
Issuing Bank. Nothing contained herein shall be deemed to require any
Participating Bank to agree to act as an Issuing Bank, if it does not so desire.
(b) Each Participating Bank severally agrees, on the terms and conditions
hereinafter set forth, to participate in each Letter of Credit issued hereunder
and the related Letter of Credit Liabilities during the period from the Closing
Date until the Termination Date, in an aggregate outstanding amount not to
exceed on any day such Participating Bank's Commitment. The Commitments are
revolving in nature and, within the limits hereinafter set forth, the Account
Party may, from the Closing Date until the Termination Date, request Extensions
of Credit hereunder at any time up to the Available Commitments at such time in
accordance with the terms hereof.
(c) Each Letter of Credit (other than an Existing Letter of Credit) shall
be issued (or the stated maturity thereof extended or be amended or modified to
increase the Available Amount thereof) on not less than two Business Days' (or
such shorter period of time as shall be acceptable to the Administrative Agent
and the relevant Issuing Bank) prior written notice thereof to the
Administrative Agent (which shall promptly distribute copies thereof to the
Participating Banks) and the relevant Issuing Bank. Each such notice (a "REQUEST
FOR ISSUANCE") shall specify (i) the date (which shall be a Business Day, but in
no event later than ten Business Days immediately preceding the Termination
Date) of issuance of such Letter of Credit (or the date of effectiveness of such
extension or increase, as the case may be) and the stated expiry date thereof
(which shall be no later than the earlier to occur of (A) the date that occurs
two years after the date of issuance of such Letter of Credit and (B) the Letter
of Credit Expiration Date), (ii) the proposed stated amount of such Letter of
Credit (which shall be in Dollars or an Alternative Currency and shall not be
less than $300,000 (or the equivalent thereof in an Alternative Currency));
PROVIDED, HOWEVER, that up to five Letters of Credit may be issued with stated
amounts less than $300,000 (or the equivalent thereof in an Alternative
Currency), (iii)
21
the proposed terms of such Letter of Credit (or the proposed form thereof shall
be attached to such Request for Issuance), (iv) the transaction that is to be
supported or financed with such Letter of Credit, including identification of
the Power Project, if any, to which such transaction relates and the name of the
proposed account party for such Letter of Credit (which may be the Account Party
or one or more of its Subsidiaries), (v) the identity of the Issuing Bank for
such Letter of Credit and (vi) such other information as shall demonstrate
compliance of such Letter of Credit with the requirements specified therefor in
this Agreement and the relevant Issuing Bank Agreement. Each Request for
Issuance shall be irrevocable unless modified or rescinded by the Account Party
prior to the time that the Administrative Agent distributes copies thereof to
the Participating Banks. Not later than 12:00 noon (or such later time as shall
be acceptable to the Account Party and the relevant Issuing Bank) on the
proposed date of issuance (or effectiveness) specified in such Request for
Issuance, and upon fulfillment of the applicable conditions precedent and the
other requirements set forth herein and in the relevant Issuing Bank Agreement,
such Issuing Bank shall issue (or extend or increase, as the case may be) such
Letter of Credit and provide notice and a copy thereof to the Administrative
Agent, which shall promptly furnish copies thereof to the Participating Banks.
(d) Subject to the requirements of subsection (c) above, upon at least five
Business Days prior written notice to the Administrative Agent, the Account
Party may request that an Existing Letter of Credit (other than the Existing
Letters of Credit set forth in Schedule IV) be deemed to be a Letter of Credit
issued hereunder. Such request shall be accompanied by a copy of such Existing
Letter of Credit and a consent of the bank or other financial institution that
issued such Existing Letter of Credit to its deemed issuance hereunder. If the
Administrative Agent determines that such Existing Letter of Credit meets the
requirements specified therefor in this Agreement (including the requirements
set forth in clauses (i) and (ii) of subsection (c) above and in subsection (e)
below) and the relevant Issuing Bank Agreement, then (i) the Administrative
Agent shall promptly provide a copy of such Existing Letter of Credit to the
Participating Banks and (ii) subject to the satisfaction of the conditions
precedent set forth in Section 4.2, and notwithstanding any reference in such
Existing Letter of Credit to the Existing Credit Facility or any other credit
facility pursuant to which such Existing Letter of Credit was issued, such
Existing Letter of Credit shall be deemed to constitute a Letter of Credit and
to have been issued hereunder on the date set forth in the Account Party's
notice to the Administrative Agent (by the Issuing Bank that issued or was
deemed to have issued such Existing Letter of Credit under the Existing Credit
Facility or such other credit facility); PROVIDED, HOWEVER, that nothing
contained in this Section 2.1 shall extend, modify or otherwise affect the
existing expiry date under any such Existing Letter of Credit (PROVIDED, that
the expiry date of each such Existing Letter of Credit shall comply with the
requirements set forth in clause (i) of subsection (c) above). In addition, and
notwithstanding any reference to the Existing Credit Facility contained in any
of the Existing Letters of Credit set forth in Schedule IV hereto, on and as of
the Closing Date each Existing Letter of Credit set forth in Schedule IV shall
be deemed to be a Letter of Credit and to have been issued on the Closing Date
(by the Issuing Bank that issued or was deemed to have issued such Existing
Letter of Credit under the Existing Credit Facility) pursuant to this Section
2.1; PROVIDED HOWEVER, that nothing contained in this
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Section 2.1 shall extend, modify or otherwise affect the existing expiry date
under any such Existing Letter of Credit.
(e) Notwithstanding any other provision contained herein to the contrary,
in no event shall any Letter of Credit be (i) issued (or deemed issued) or (ii)
amended or modified to increase the Available Amount thereof if, after giving
effect to such issuance or amendment, the principal amount outstanding hereunder
would exceed the Commitments.
(f) The Account Party shall provide to the Administrative Agent a copy of
each amendment or modification to a Letter of Credit (other than any amendment
or modification that constitutes an Extension of Credit) not later than two
Business Days prior to the effective date of any such amendment or modification.
The Administrative Agent shall promptly provide a copy of each such amendment or
modification received by it to the Participating Banks.
SECTION 2.2 TERMINATION OR REDUCTION OF THE COMMITMENTS. (a) The Account
Party may, upon at least three Business Days' notice to the Administrative Agent
(which shall promptly distribute copies thereof to the Participating Banks),
terminate in whole or reduce ratably in part the unused portions of the
Commitments; PROVIDED that any such partial reduction shall be in the aggregate
amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof;
and PROVIDED, FURTHER, that the Commitments shall in no event be reduced
pursuant to this subsection (a) to an amount which is less than the aggregate
Available Amount of all Letters of Credit then outstanding.
(b) In the event that the Account Party or any of its Subsidiaries shall at
any time, or from time to time, receive any Net Cash Proceeds of any Asset
Disposition, the Commitments of the Participating Banks shall, unless the
Required Banks otherwise agree, be ratably reduced by such amounts and at such
times as may be required to avoid any requirement that all or any portion of
such Net Cash Proceeds be applied to repay, prepay, repurchase or defease any
Subordinated Debt (after taking into account (i) any reductions in the
"Commitments" under the Existing Credit Facility and (ii) the application of
such Net Cash Proceeds to repay any other Debt (other than Subordinated Debt) of
the Account Party or its Subsidiaries), PROVIDED that any such reduction that
requires the deposit of cash collateral or the delivery of a standby letter of
credit pursuant to Section 2.15(c) shall not take effect until such cash
collateral is deposited or such letter of credit is delivered (as the case may
be) pursuant to Section 2.15(c).
(c) The Commitments shall terminate on the Termination Date, and any
Reimbursement Obligations then outstanding (together with accrued interest
thereon) shall be due and payable on such date.
SECTION 2.3 COMMISSIONS AND FEES. (a) The Account Party agrees to pay to
the Administrative Agent for the account of each Participating Bank a commitment
fee on the average daily amount of such Participating Bank's Available
Commitment at a rate PER ANNUM equal to the Commitment Fee Rate in effect from
time to time, from the date of this Agreement until the Termination Date,
payable quarterly in
23
arrears on the last Business Day of each January, April, July and October,
commencing on the first such date to occur following the date hereof, and on the
Termination Date.
(b) The Account Party hereby agrees to pay to the Administrative Agent, for
the account of the Participating Banks ratably in accordance with their
respective Commitment Percentages, a letter of credit commission with respect to
each Letter of Credit on the Available Amount of such Letter of Credit in effect
from time to time from the date of issuance of such Letter of Credit until the
Letter of Credit Expiration Date at a rate equal to the Letter of Credit
Commission Rate, payable quarterly in arrears on the last Business Day of
January, April, July and October in each year, commencing on the first such date
to occur following the date of issuance of the Letter of Credit, and on the
Letter of Credit Expiration Date.
(c) The Account Party also agrees to pay to the Administrative Agent, for
the account of Administrative Agent, the Syndication Agent, the Documentation
Agent, the Participating Banks, and the Issuing Banks, such other fees as may be
agreed upon from time to time by the Account Party and such parties.
(d) Notwithstanding anything to the contrary contained in Section 2.15, in
calculating the fees payable by the Account Party pursuant to subsections (a)
and (b) above for each quarterly period referred to therein, the Letter of
Credit Liabilities and the Available Amount in respect of each Alternative
Currency Letter of Credit outstanding from time to time during such period shall
be deemed to equal, at all times during each calendar month in such period, the
Dollar Equivalent thereof as of the first Business Day of such calendar month
(as reported to the Administrative Agent pursuant to Section 2.15(b)); PROVIDED,
HOWEVER, that (i) in the case of any Alternative Currency Letter of Credit
issued during such calendar month, the Letter of Credit Liabilities and the
Available Amount in respect thereof shall be deemed to equal, at all times
during such calendar month following the date of such issuance, the Dollar
Equivalent thereof as of such date of issuance (as reported to the
Administrative Agent pursuant to Section 2.15(b)), and (ii) in the case of any
increase or decrease in the Available Amount of any Alternative Currency Letter
of Credit during such calendar month (other than any increase or decrease
attributable solely to currency exchange rate fluctuations), the Letter of
Credit Liabilities and the Available Amount in respect thereof shall be deemed
to equal, at all times during such calendar month following the date of such
increase or decrease (as the case may be), the Dollar Equivalent thereof after
giving effect to such increase or decrease (as the case may be) (as reported to
the Administrative Agent pursuant to Section 2.15(b)).
SECTION 2.4 REIMBURSEMENT AND OTHER PAYMENTS BY THE ACCOUNT PARTY. If any
amount is drawn under any Letter of Credit, the Account Party irrevocably and
unconditionally agrees to reimburse the applicable Issuing Bank in Dollars for
all amounts paid by such Issuing Bank upon such Drawing (which, in the case of
any Drawing under an Alternative Currency Letter of Credit, shall be the Dollar
Equivalent thereof), together with any and all reasonable charges and expenses
which any Bank may pay or incur relative to such Drawing, and all such amounts
due from the Account Party shall bear interest, payable on the date upon which
such amounts shall be due and payable, for each day from and including the date
of such Drawing to
24
but excluding the date such reimbursement payment is due and payable, at a rate
equal to the Alternate Base Rate in effect from time to time PLUS 1.0% PER
ANNUM. Such reimbursement payment, together with all accrued interest thereon,
shall be due and payable not later than 12:00 noon on the fifth Business Day
succeeding the date of such Drawing. Each Issuing Bank shall promptly notify the
Administrative Agent and the Account Party of each drawing under any Letter of
Credit issued by such Issuing Bank (and, in the case of any drawing under an
Alternative Currency Letter of Credit, the Dollar Equivalent of such drawing).
SECTION 2.5 PARTICIPATION; REIMBURSEMENT OF ISSUING BANKS. (a) Upon the
issuance (or deemed issuance) of each Letter of Credit by an Issuing Bank under
Section 2.1, such Issuing Bank shall be deemed, without further action by any
party hereto, to have sold and transferred to each Participating Bank, and each
Participating Bank shall be deemed, without further action by any party hereto,
to have purchased and acquired from such Issuing Bank, an undivided interest and
participation in such Letter of Credit and the related Letter of Credit
Liabilities, in the amount required so that the participations of the
Participating Banks therein shall be in proportion to their respective
Commitment Percentages.
(b) If any Issuing Bank shall not have been reimbursed in full for any
payment made by such Issuing Bank under any Letter of Credit on the date of such
payment, the Issuing Bank shall promptly notify the Administrative Agent and the
Administrative Agent shall promptly notify each Participating Bank of such
non-reimbursement, the amount thereof (which, in the case of any payment under
an Alternative Currency Letter of Credit, shall be the Dollar Equivalent
thereof) and, subject to subsection (g) below, the amount of such Participating
Bank's participation therein. Upon receipt of such notice from the
Administrative Agent, each Participating Bank shall, subject to the last
sentence of subsection (d) below and to subsection (g) below, pay to the
applicable Issuing Bank, directly, an amount equal to such Participating Bank's
ratable portion (according to such Participating Bank's Commitment Percentage)
of such unreimbursed amount paid by such Issuing Bank, plus interest on such
amount at a rate PER ANNUM equal to the Federal Funds Rate from the date of such
payment by such Issuing Bank to the date of payment to such Issuing Bank by such
Participating Bank. All such payments by each Participating Bank shall be made
in Dollars and in same day funds:
(x) not later than 3:00 p.m. on the day such notice is received by
such Participating Bank if such notice is received at or prior to 12:00
noon on a Business Day; or
(y) not later than 12:00 noon on the Business Day next succeeding the
day such notice is received by such Participating Bank, if such notice is
received after 12:00 noon on a Business Day.
If a Participating Bank shall have paid to the applicable Issuing Bank its
ratable portion of any unreimbursed amount paid by such Issuing Bank, together
with all interest thereon required by the second sentence of this subsection
(b), such Participating Bank shall be entitled to receive its ratable share of
all interest paid by the Account Party in respect of such unreimbursed amount
from the date paid by such
25
Issuing Bank. If such Participating Bank shall have made such payment to such
Issuing Bank, but without all such interest thereon required by the second
sentence of this subsection (b), such Participating Bank shall be entitled to
receive its ratable share of the interest paid by the Account Party in respect
of such unreimbursed amount only from the date it shall have paid all interest
required by the second sentence of this subsection (b). Each Participating Bank
shall be subrogated to the rights of the applicable Issuing Bank against the
Account Party to the extent such payment due from such Participating Bank to
such Issuing Bank is paid.
(c) If the Account Party shall reimburse an Issuing Bank for any Drawing
after the Participating Banks shall have made funds available to such Issuing
Bank with respect to such Drawing in accordance with subsection (b) above, such
Issuing Bank shall promptly upon receipt of such reimbursement distribute to
each Participating Bank its PRO RATA share thereof (based upon such
Participating Bank's Commitment Percentage), including interest, to the extent
received by such Issuing Bank. If an Issuing Bank is required at any time
(whether before or after the Termination Date) to return to the Account Party or
to a trustee, receiver, liquidator, custodian or other similar official any
portion of the payments made by the Account Party to such Issuing Bank in
payment of any Reimbursement Obligation or interest thereon upon the insolvency
of the Account Party, or the commencement of any case or proceeding under any
bankruptcy, insolvency or other similar law with respect to the Account Party,
each Participating Bank shall, on demand of such Issuing Bank, forthwith return
to such Issuing Bank any amounts transferred to such Participating Bank by such
Issuing Bank in respect thereof pursuant to this subsection PLUS such
Participating Bank's PRO RATA share (based upon such Participating Bank's
Commitment Percentage) of any interest on such payments required to be paid to
the Person recovering such payments PLUS interest on the amount so demanded from
the day such demand is made, if such demand is made by 12:00 noon, or from the
next succeeding Business Day, if such demand is made after 12:00 noon, to but
not including the day such amounts are returned by such Participating Bank to
such Issuing Bank at a rate PER ANNUM for each day equal to (1) the Federal
Funds Rate for the day of such demand and (2) the Alternate Base Rate for each
day thereafter.
(d) Each Participating Bank's obligation to make each payment to any
Issuing Bank, and such Issuing Bank's right to receive the same, shall be
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, (i) any of the circumstances set
forth in Section 2.11, (ii) the occurrence or continuance of any Default or
Event of Default, (iii) the failure of any other Participating Bank to make any
payment under this Section 2.5, (iv) any set-off, counterclaim, recoupment,
defense or other right which any such Participating Bank or any other Person may
have against the Administrative Agent, any Issuing Bank or any other Person for
any reason whatsoever, (v) the termination of the Commitments or any Letter of
Credit, (vi) any adverse change in the condition (financial or otherwise) of the
Account Party or any other Person, (vii) any breach of any Loan Document by any
party thereto, (viii) the fact that any condition precedent to the issuance of,
or the making of any payment under, any Letter of Credit was not in fact met,
(ix) any violation or asserted violation of law by any Bank or any affiliate
thereof, or (x) any other circumstance, happening or event whatsoever, whether
or not similar to any of the foregoing. Each Participating Bank further agrees
that each such payment shall be
26
made without any set-off, abatement, withholding or reduction whatsoever.
Notwithstanding the foregoing or any other provision contained herein, in no
event shall any Participating Bank be obligated to make any payment to an
Issuing Bank to the extent that such payment would result in such Participating
Bank's Commitment Percentage of the principal amount outstanding hereunder to
exceed such Participating Bank's Commitment; PROVIDED, that the foregoing shall
not affect the obligation of the Account Party (which is absolute, unconditional
and irrevocable) to reimburse each Issuing Bank for the entire amount of each
payment made by such Issuing Bank under a Letter of Credit, including any amount
thereof that is not paid by any Participating Bank to such Issuing Bank
(pursuant to this sentence or otherwise).
(e) The failure of any Participating Bank to make any payment to any
Issuing Bank in accordance with this Section 2.5 shall not relieve any other
Participating Bank of its obligation to make payment, but neither any Issuing
Bank nor any Participating Bank shall be responsible for the failure of any
other Participating Bank to make such payment. Nothing herein shall in any way
limit, waive or otherwise reduce any claims that any party hereto may have
against any non-performing Participating Bank.
(f) If any Participating Bank shall fail to make any payment to any Issuing
Bank in accordance with this Section 2.5, then, in addition to other rights and
remedies which such Issuing Bank may have, the Administrative Agent is hereby
authorized, at the request of such Issuing Bank, to withhold and apply to the
payment of such amounts owing by such Participating Bank to such Issuing Bank
and any related interest, that portion of any payment received by the
Administrative Agent that would otherwise be payable to such Participating Bank.
In furtherance of the foregoing, if any Participating Bank shall fail to make
any payment to any Issuing Bank in accordance with subsection (b) above, and
such failure shall continue for five (5) Business Days following written notice
of such failure from such Issuing Bank to such Participating Bank, such Issuing
Bank may acquire, or transfer to a third party in exchange for the sum or sums
due from such Participating Bank, such Participating Bank's interest in the
related unreimbursed amounts and all other rights of such Participating Bank
hereunder in respect thereof, without, however, relieving such Participating
Bank from any liability for damages, costs and expenses suffered by such Issuing
Bank as a result of such failure. The purchaser of any such interest shall be
deemed to have acquired an interest senior to the interest of such Participating
Bank and shall be entitled to receive all subsequent payments which such Issuing
Bank or the Administrative Agent would otherwise have made hereunder to such
Participating Bank in respect of such interest.
(g) In the event that, on the date of any Drawing, (i) the outstanding
principal amount hereunder exceeds the Maximum Outstanding Exposure, (ii) the
applicable Issuing Bank is not reimbursed by the Account Party on such date
pursuant to Section 2.4 for the entire amount of such Drawing, and (iii) the
Participating Banks, pursuant to the last sentence of subsection (d) above, are
not obligated to reimburse such Issuing Bank for the entire amount of such
Drawing, the Administrative Agent shall, solely for purposes of determining the
portion of such Drawing to be reimbursed by each Participating Bank, (A)
allocate the respective Commitments of the Participating Banks to the Letter of
Credit Liabilities of each Letter of Credit on such
27
date on a PRO RATA basis (based upon (1) the proportion of the Commitments to
the aggregate amount of the Letter of Credit Liabilities of all outstanding
Letters of Credit and (2) each Participating Bank's Commitment Percentage), (B)
based on such allocation, determine the reimbursement obligation of each
Participating Bank with respect to such Drawing and (C) promptly notify each
Participating Bank of the amount of its reimbursement obligation with respect to
such Drawing.
SECTION 2.6 PAYMENTS AND COMPUTATIONS. (a) The Account Party shall make
each payment hereunder not later than 12:00 noon on the day when due, in each
case in lawful money of the United States to the Administrative Agent at its
address referred to in Section 8.2 in immediately available funds (except
payments to be made directly to any Issuing Bank as expressly provided herein),
without set-off, abatement, withholding, counterclaim or other deduction. The
Administrative Agent will promptly thereafter cause to be distributed like funds
relating to the payment of reimbursements, principal, interest, fees or other
amounts payable to the Issuing Banks and the Participating Banks to whom the
same are payable, ratably, at its address set forth in Section 8.2 (in the case
of the Issuing Bank) or for the account of their respective lending offices (in
the case of the Participating Banks), in each case to be applied in accordance
with the terms of this Agreement. Upon the Administrative Agent's acceptance of
a Commitment Transfer Supplement and recording of the information contained
therein in the Register pursuant to Section 8.5, from and after the effective
date specified in such Commitment Transfer Supplement, the Administrative Agent
shall make all payments hereunder in respect of the interest assigned thereby to
the Purchasing Bank thereunder, and the parties to such Commitment Transfer
Supplement shall make all appropriate adjustments in such payments for periods
prior to such effective date directly between themselves. Notwithstanding
anything to the contrary contained herein, in no event shall any Participating
Bank make or receive any payment in an Alternative Currency.
(b) All computations of interest based on the Alternate Base Rate, if and
so long as the Alternate Base Rate is based on the Reference Rate, shall be made
by the Administrative Agent on the basis of a year of 365 or 366 days, as the
case may be. All other computations of interest hereunder (including
computations of the Alternate Base Rate if and so long as such rate is based on
the Federal Funds Rate), and all computations of fees, commissions and other
amounts hereunder, shall be made by the Administrative Agent or the party
claiming such other amounts, as the case may be, on the basis of a year of 360
days. In each such case, such computation shall be made for the actual number of
days (including the first day, but excluding the last day) occurring in the
period for which such interest, commissions or fees are payable. Each such
determination by the Administrative Agent or a Participating Bank, as the case
may be, shall be conclusive and binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of payment of interest, commissions and fees hereunder.
(d) Unless the Administrative Agent shall have received notice from the
Account Party prior to the date on which any payment is due to any Bank
hereunder
28
that the Account Party will not make such payment in full, the Administrative
Agent may assume that the Account Party has made such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in reliance
upon such assumption, cause to be distributed to such Bank on such due date an
amount equal to the amount then due such Bank. If and to the extent the Account
Party shall not have so made such payment in full to the Administrative Agent,
such Bank shall repay to the Administrative Agent forthwith on demand such
amount distributed to such Bank, together with interest thereon, for each day
from the date such amount is distributed to such Bank until the date such Bank
repays such amount to the Administrative Agent, at the Federal Funds Rate.
(e) If, after the Administrative Agent has paid to any Bank any amount
pursuant to subsection (a) above, such payment is rescinded or must otherwise be
returned or must be paid over by the Administrative Agent to any Person, whether
pursuant to any bankruptcy or insolvency law, Section 2.10 or otherwise, such
Bank shall, at the request of the Administrative Agent, promptly repay to the
Administrative Agent an amount equal to its ratable share of such payment,
together with any interest required to be paid by the Administrative Agent with
respect to such payment.
(f) Unless an Issuing Bank shall have received notice from the Account
Party prior to the date on which any payment is due to any Participating Bank
hereunder that the Account Party will not make such payment in full, such
Issuing Bank may assume that the Account Party has made such payment in full to
such Issuing Bank on such date and such Issuing Bank may, in reliance upon such
assumption, cause to be distributed to such Participating Bank on such due date
an amount equal to the amount then due such Participating Bank. If and to the
extent the Account Party shall not have so made such payment in full to such
Issuing Bank, such Participating Bank shall repay to such Issuing Bank forthwith
on demand such amount distributed to such Participating Bank, together with
interest thereon, for each day from the date such amount is distributed to such
Participating Bank until the date such Participating Bank repays such amount to
such Issuing Bank, at the Federal Funds Rate.
SECTION 2.7 DEFAULT INTEREST. Any amounts payable by the Account Party
hereunder that are not paid when due shall (to the fullest extent permitted by
law) bear interest, from the date when due until paid in full, at the Default
Rate, payable on demand.
SECTION 2.8 REQUIREMENTS OF LAW. (a) In the event that any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any 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 Bank to any tax of any kind whatsoever with
respect to the Letters of Credit, its participation interest therein, this
Agreement or any other Loan Document, or change the basis of taxation of
payments to such Bank in respect thereof (except for taxes covered by
Section 2.9 and changes in the rate of tax on the overall net income or the
gross receipts, as applicable, of such Bank);
29
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against letters of credit,
participation interests therein or other similar liabilities in or for the
account of, or other extensions of credit by, any office of any Bank; or
(iii) shall impose on any Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank, by
an amount which such Bank deems to be material, of issuing or maintaining any
Letter of Credit or its participation interest therein (as the case may be) or
to reduce any amount receivable hereunder in respect thereof, then, in any such
case, the Account Party shall promptly (but in no event more than ten (10) days
after notice is received by the Account Party in respect thereof) pay such Bank,
upon its demand, any additional amounts necessary to compensate such Bank for
such increased cost or reduced amount receivable. If any Bank becomes entitled
to claim any additional amounts pursuant to this Section, it shall promptly
notify the Account Party, through the Administrative Agent, of the event by
reason of which it has become so entitled. A certificate as to any additional
amounts payable pursuant to this Section submitted by such Bank, through the
Administrative Agent, to the Account Party shall be conclusive in the absence of
manifest error. The agreements in this Section 2.8 shall survive the termination
of this Agreement and the payment of all amounts payable hereunder.
(b) In the event that any Bank shall have determined that any change in any
Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Bank or any corporation controlling
such Bank with any request or directive regarding capital adequacy (whether or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Bank's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Bank
or such corporation could have achieved but for such change or compliance
(taking into consideration such Bank's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Bank to be material,
then from time to time, after submission by such Bank to the Account Party (with
a copy to the Administrative Agent) of a written request therefor, the Account
Party shall promptly (but in no event more than ten (10) days after such request
is received by the Account Party) pay to such Bank such additional amount or
amounts as will compensate such Bank for such reduction.
(c) Each Bank will promptly notify the Account Party and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
that will entitle such Bank to compensation pursuant to this Section and will
designate a different lending office through which it issues or participates in
(as the case may be) Letters of Credit hereunder if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate
of any Bank claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
29
SECTION 2.9 TAXES. (a) All payments made by the Account Party under this
Agreement 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, in the case of the Administrative Agent and each Bank, net
income taxes, gross receipt taxes (imposed in lieu of net income taxes) and
franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or such Bank, as the case may be, as a result of a present
or former connection between the jurisdiction of the government or taxing
authority imposing such tax and the Administrative Agent or such Bank (excluding
a connection arising solely from the Administrative Agent or such Bank having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement) (all such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions and withholdings being hereinafter called "TAXES"). If
any Taxes are required to be withheld from any amounts payable to the
Administrative Agent or any Bank hereunder, the amounts so payable to the
Administrative Agent or such Bank shall be increased to the extent necessary to
yield to the Administrative Agent or such Bank (after payment of all Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement. Whenever any Taxes are payable by the
Account Party, as promptly as possible thereafter the Account Party shall send
to the Administrative Agent for its own account or for the account of such Bank,
as the case may be, a certified copy of an original official receipt received by
the Account Party showing payment thereof. If the Account Party fails to pay any
Taxes when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Account Party shall indemnify the Administrative Agent and the
Banks for any incremental taxes, interest or penalties that may become payable
by the Administrative Agent or any Bank as a result of any such failure. The
agreements in this Section shall survive the termination of this Agreement and
all other amounts payable hereunder.
(b) In addition, the Account Party agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges or
similar levies which arise from any payment made by it hereunder or under any
other Loan Document or from the execution or delivery of, or otherwise with
respect to, this Agreement or any other Loan Document (hereinafter referred to
as "OTHER TAXES").
(c) The Account Party agrees to indemnify each Bank and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 2.9) paid by such Bank or the Administrative
Agent (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. This indemnification shall
be made within 15 days from the date such Bank or the Administrative Agent (as
the case may be) makes demand therefor.
(d) Each Bank that is not incorporated under the laws of the United States
or a state thereof agrees that it will deliver to the Account Party and the
Administrative Agent two duly completed copies of United States Internal Revenue
Service Form W-
31
8BEN or W-8ECI or successor applicable form, as the case may be. Each such Bank
also agrees to deliver to the Account Party and the Administrative Agent two
further copies of said Form W-8BEN or W-8ECI, or successor applicable forms or
other manner of certification, as the case may be, on or before the date that
any such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the
Account Party or the Administrative Agent, and such extensions or renewals
thereof as may reasonably be requested by the Account Party or the
Administrative 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 Bank from duly completing
and delivering any such form with respect to it and such Bank so advises the
Account Party and the Administrative Agent. Such Bank shall certify that it is
entitled to receive payments under this Agreement and the other Loan Documents
without deduction or withholding of any United States federal income taxes and
that it is entitled to an exemption from United States backup withholding tax.
(e) For any period with respect to which a Bank has failed to provide the
Account Party with the appropriate form pursuant to subsection (d) above (unless
such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Bank shall not be entitled to indemnification under this Section 2.9 with
respect to Taxes imposed by the United States; PROVIDED, HOWEVER, that should a
Bank, which is otherwise exempt from or subject to a reduced rate of withholding
tax, become subject to Taxes because of its failure to deliver a form required
hereunder, the Account Party shall take such steps as such Bank shall reasonably
request to assist such Bank to recover such Taxes.
(f) If the Account Party is required to pay additional amounts to or for
the account of any Bank pursuant to this Section 2.9, then such Bank will change
the jurisdiction of its lending office through which it issues or participates
in (as the case may be) Letters of Credit hereunder so as to eliminate or reduce
any such additional amounts that may thereafter accrue if such change, in the
judgment of such Bank, is not otherwise disadvantageous to such Bank.
(g) Each Bank and the Administrative Agent agrees that it will promptly,
but in any event within 30 days, after receiving notice thereof from any taxing
authority, notify the Account Party of the assertion of any liability by such
taxing authority with respect to Taxes or Other Taxes; PROVIDED, that the
failure to give such notice shall not relieve the Account Party of its
obligations under this Section 2.9 except to the extent that the Account Party
has been prejudiced by such failure and except that the Account Party shall not
be liable for penalties, interest or expenses accruing after such 30 day period
until such time as it receives the notice contemplated above, after which time
it shall be liable for interest, penalties and expenses accruing after such
receipt.
(h) If any Bank or the Administrative Agent shall receive a credit or
refund from a taxing authority (as a result of any error in the imposition of
Tax or Other Tax by such taxing authority) with respect to and actually
resulting from an amount of such Taxes or Other Taxes paid by the Account Party
pursuant to this Section 2.9,
32
such Bank or the Administrative Agent (as the case may be) shall promptly pay to
the Account Party the amount so received (without interest thereon, whether or
not received).
SECTION 2.10 SHARING OF PAYMENTS, ETC. If any Participating Bank shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise, but excluding any proceeds received by
assignments or sales of participations in accordance with Section 8.5 to a
Person that is not an Affiliate or Subsidiary of the Account Party) on account
of its participation interest in the Letter of Credit Liabilities or other
amounts owing to it (other than pursuant to Section 2.8 or 2.9) in excess of its
ratable share of payments on account of the participation interests or other
amounts obtained by all the Participating Banks, such Participating Bank shall
forthwith purchase from the other Participating Banks such participations in the
portions of such participation interests and other amounts owing to them as
shall be necessary to cause such purchasing Participating Bank to share the
excess payment ratably with each of them; PROVIDED, HOWEVER, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Participating Bank, such purchase from each Participating Bank shall be
rescinded and such Participating Bank shall repay to the purchasing
Participating Bank the purchase price to the extent of such recovery together
with an amount equal to such Participating Bank's ratable share (according to
the proportion of (i) the amount of such Participating Bank's required repayment
to (ii) the total amount so recovered from the purchasing Participating Bank) of
any interest or other amount paid or payable by the purchasing Participating
Bank in respect of the total amount so recovered. The Account Party agrees that
any Participating Bank so purchasing a participation from another Participating
Bank pursuant to this Section 2.10 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Participating Bank were the direct
creditor of the Account Party in the amount of such participation.
Notwithstanding the foregoing, if any Participating Bank shall obtain any such
excess payment involuntarily, such Participating Bank may, in lieu of purchasing
a participation from the other Participating Banks in accordance with this
Section 2.10, on the date of receipt of such excess payment, return such excess
payment to the Administrative Agent for distribution in accordance with Section
2.6.
SECTION 2.11 OBLIGATIONS ABSOLUTE. The obligations of the Account Party
under this Agreement shall be absolute, unconditional and irrevocable, and shall
be paid strictly in accordance with the terms of this Agreement (as the same may
be amended from time to time) under all circumstances, including, without
limitation, the following circumstances:
(a) any lack of validity or enforceability of any Loan Document, any
Letter of Credit or any document or agreement delivered in connection
herewith or therewith;
(b) any change in the time, manner, or place of payment of, or in any
other term of, all or any of the obligations of the Account Party in
respect of any Letter of Credit or any other amendment or waiver of or any
consent to
32
departure from all or any of the Loan Documents or any document or
agreement delivered in connection therewith;
(c) the existence of any claim, set-off, defense or other right which
the Account Party may have at any time against the beneficiary or any
transferee of any Letter of Credit (or any Persons for whom any such
beneficiary or transferee may be acting), the Administrative Agent, any
Issuing Bank, any Participating Bank, or any other Person, whether in
connection with this Agreement, the transactions contemplated in any of the
Loan Documents, or any unrelated transaction;
(d) any statement or any other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(e) payment by an Issuing Bank under any Letter of Credit against
presentation of a draft, document or certificate which does not comply with
the terms of such Letter of Credit;
(f) any exchange of, release of, or non-perfection of any interest in
any collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the obligations of the
Account Party in respect of any Letter of Credit; or
(g) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
The foregoing shall not affect the Account Party's right to assert a claim
against any Issuing Bank pursuant to Section 8.7 (and the liability of such
Issuing Bank with respect to any such claim shall be limited as set forth in
Section 8.7).
SECTION 2.12 EVIDENCE OF INDEBTEDNESS. Each Issuing Bank and Participating
Bank shall maintain, in accordance with their usual practice, an account or
accounts evidencing the indebtedness of the Account Party resulting from each
drawing under a Letter of Credit (in the case of each Issuing Bank) and from
each participation interest therein (in the case of each Participating Bank)
made or acquired, respectively, from time to time hereunder and the amounts of
principal and interest payable and paid from time to time hereunder; PROVIDED,
that a Bank's failure to make (or any error in making) any recordation or entry
in such account or accounts shall not affect the Account Party's obligations
hereunder or under any other Loan Document.
SECTION 2.13 EXTENSION OF THE TERMINATION DATE. At least 30 but not more
than 90 days prior to each anniversary of the date hereof (but in any event no
later than 60 days prior to the then-scheduled Termination Date), the Account
Party may, by delivering a written notice to such effect to the Administrative
Agent (each such request being irrevocable), request that each Bank consent to a
one-year extension of the Termination Date. Upon receipt of any such notice, the
Administrative Agent shall promptly communicate such request to the Banks.
Within 30 days following the giving of such notice by the Account Party, the
Banks shall indicate to the
34
Administrative Agent whether the Account Party's request to so extend the
then-scheduled Termination Date is acceptable to the Banks (and, if so, the
conditions, if any, relating to such acceptance, including conditions relating
to renewal fees payable and legal documentation), it being understood that the
unanimous written consent of the Issuing Banks and the Participating Banks shall
be required to effect any such requested extension, that the determination by
each Bank will be in its sole and absolute discretion and that the failure of
any Bank to so respond within such period shall be deemed to constitute a
refusal by such Bank to consent to such request (with the result being that such
request is denied). The Administrative Agent shall promptly notify the Account
Party and the Banks of the result of such request, and if such request shall
have been consented to by all of the Banks, upon the satisfaction of all of the
conditions for extension (including the payment of any renewal fees and the
costs and expenses of effecting the extension of the Termination Date), and
provided that no Default shall have occurred and then be continuing, the
Termination Date shall be extended to the first anniversary of the
then-scheduled Termination Date; PROVIDED, HOWEVER, that the Termination Date
shall be so extended notwithstanding the existence of one or more Issuing Banks
(the "NONEXTENDING ISSUING BANKS") that have elected not to extend (or failed to
notify the Administrative Agent of its (or their) consent to extend) if each
such Nonextending Issuing Bank has been terminated as an Issuing Bank hereunder,
and all Letters of Credit issued (or deemed issued) by such Nonextending Issuing
Bank have been cancelled or replaced by new Letters of Credit issued by one or
more other Issuing Banks pursuant to the terms hereof.
SECTION 2.14 CASH COLLATERAL ACCOUNT; LETTER OF CREDIT IN LIEU OF CASH
COLLATERAL. (a) All amounts required to be deposited as cash collateral with the
Administrative Agent pursuant to Section 2.15(c) or Section 6.2 shall be
deposited in a cash collateral account (the "CASH COLLATERAL ACCOUNT")
established by the Account Party with the Administrative Agent and under the
exclusive dominion and control of the Administrative Agent, to be held, applied
or released for application as provided in this Section 2.14.
(b) If and when any portion of the Letter of Credit Liabilities on which
any deposit of cash collateral was based (the "RELEVANT CONTINGENT EXPOSURE")
shall become fixed (a "DIRECT EXPOSURE") as a result of the payment by an
Issuing Bank of a draft presented under any relevant Letter of Credit (including
any such payment under an Alternative Currency Letter of Credit for which the
relevant Issuing Bank, as a result of fluctuations in currency exchange rates,
is not reimbursed in full by the Participating Banks), the amount of such Direct
Exposure (but not more than the amount in the Cash Collateral Account at the
time) shall be withdrawn by the Administrative Agent from the Cash Collateral
Account and shall be paid to the relevant Issuing Bank to be applied against
such Direct Exposure and the Relevant Contingent Exposure shall thereupon be
reduced by such amount.
(c) Interest and other payments and distributions made on or with respect
to the cash collateral held by the Administrative Agent shall be for the account
of the Account Party and shall constitute cash collateral to be held by the
Administrative Agent or returned to the Account Party in accordance with Section
2.15(d); PROVIDED that the Administrative Agent shall have no obligation to
invest any cash collateral on behalf of the Account Party or any other Person.
Beyond the exercise of reasonable
35
care in the custody thereof, the Administrative 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 preservation of rights
against prior parties or any other rights pertaining thereto. The Administrative
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 Administrative Agent
in good faith. All expenses and liabilities incurred by the Administrative 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 Administrative Agent) shall be paid by the
Account Party from time to time upon demand. Upon a Default, the Administrative
Agent shall be entitled to apply (and, at the request of the Required Banks but
subject to applicable law, shall apply) cash collateral or the proceeds thereof
to payment of any such expenses, liabilities and fees.
(d) Notwithstanding the foregoing subsections of this Section 2.14 or any
other provision contained herein, the Account Party shall be required to comply
with the foregoing subsections of this Section 2.14 and the requirements set
forth in Sections 2.15(c) and 6.2 to provide cash collateral only to the extent
that such compliance and such requirements are not prohibited by the Existing
Credit Facility.
(e) If and to the extent that the Existing Credit Facility prohibits the
Account Party from providing cash collateral pursuant to this Section 2.14 or if
the Account Party otherwise so elects, the Account Party shall, pursuant to
Sections 2.15(c) and 6.2, deliver to the Administrative Agent an irrevocable
standby letter of credit in lieu of such cash collateral. If and when any
portion of the Letter of Credit Liabilities on which any delivery of such a
letter of credit was based (the "RELEVANT LC CONTINGENT EXPOSURE") shall become
fixed (a "DIRECT LC EXPOSURE") as a result of the payment by an Issuing Bank of
a draft presented under any relevant Letter of Credit (including any such
payment under an Alternative Currency Letter of Credit for which the relevant
Issuing Bank, as a result of fluctuations in currency exchange rates, is not
reimbursed in full by the Participating Banks), the Administrative Agent shall
be entitled to draw under such standby letter of credit an amount equal to such
Direct LC Exposure and shall pay such amount to the relevant Issuing Bank to be
applied against such Direct LC Exposure and the Relevant LC Contingent Exposure
shall thereupon be reduced by such amount.
SECTION 2.15 COMPUTATIONS OF OUTSTANDINGS; DETERMINATION OF AVAILABLE
AMOUNT OF ALTERNATIVE CURRENCY LETTERS OF CREDIT. (a) Whenever reference is made
in this Agreement to the principal amount outstanding on any date under this
Agreement, such reference shall refer to the aggregate Letter of Credit
Liabilities of all Letters of Credit outstanding on such date, after giving
effect to all Extensions of Credit to be made on such date. For purposes of
calculating the principal amount outstanding hereunder on any date of
determination, the aggregate Available Amount in respect of all Alternative
Currency Letters of Credit shall be deemed to equal the amount thereof most
recently reported to the Administrative Agent pursuant to subsection (b) below.
At no time shall the principal amount outstanding under this Agreement exceed
the sum of (i) the
36
aggregate amount of the Commitments, PLUS (ii) the aggregate amount of cash
collateral held by the Administrative Agent in the Cash Collateral Account, PLUS
(iii) the aggregate stated amount of all outstanding irrevocable standby letters
of credit delivered to the Administrative Agent pursuant to Section 2.14(e)
(such sum being referred to herein as the "MAXIMUM OUTSTANDING EXPOSURE").
References to the unused portion of the Commitments shall refer to the excess,
if any, of the Commitments over the principal amount outstanding hereunder; and
references to the unused portion of any Participating Bank's Commitment shall
refer to such Participating Bank's Commitment Percentage of the unused
Commitments.
(b) Each Issuing Bank that issues an Alternative Currency Letter of Credit
shall (i) on the first Business Day of each calendar month, deliver to the
Administrative Agent a schedule listing (A) each outstanding Alternative
Currency Letter of Credit issued by such Issuing Bank, (B) the maximum aggregate
amount available to be drawn under each such Alternative Currency Letter of
Credit at any time on or after such date (denominated in the applicable
Alternative Currency), assuming the compliance with and satisfaction of all
conditions for drawing enumerated therein, and (C) the equivalent in Dollars of
such amount (as determined by such Issuing Bank on the basis of exchange rates
available to or otherwise used by such Issuing Bank), together with the
applicable exchange rate utilized by such Issuing Bank and the source thereof,
(ii) on the date of issuance of any Alternative Currency Letter of Credit
(including, if any Alternative Currency Letters of Credit are issued or deemed
issued on the Closing Date, on the Closing Date), deliver to the Administrative
Agent a schedule listing the information described in clauses (B) and (C) above,
(iii) on the date of any increase or decrease in the Available Amount of any
Alternative Currency Letter of Credit (other than any increase or decrease
attributable solely to currency exchange rate fluctuations), deliver to the
Administrative Agent a schedule listing the information described in clauses (B)
and (C) above after giving effect to such increase or decrease (as the case may
be), and (iv) not later than one Business Day after its receipt of a written
request therefor from the Administrative Agent or any Participating Bank,
deliver to the Administrative Agent a schedule listing the information described
in clauses (A), (B) and (C) above. The Administrative Agent shall promptly after
its receipt thereof deliver a copy of each such schedule to the Account Party
and the Participating Banks. For all purposes under this Agreement, unless
otherwise expressly set forth herein, the Available Amount in respect of each
Alternative Currency Letter of Credit shall be deemed to equal, on any date of
determination, the Dollar Equivalent thereof as most recently reported to the
Administrative Agent by the relevant Issuing Bank pursuant to this subsection
(b).
(c) If, on (i) the date that any schedule is delivered by an Issuing Bank
to the Administrative Agent pursuant to subsection (b) above, (ii) any date,
after giving effect to any reduction in the Commitments pursuant to Section
2.2(b) or (c), or (iii) any other date, the aggregate principal amount
outstanding hereunder on such date (calculated pursuant to subsections (a) and
(b) above) exceeds the Maximum Outstanding Exposure, then within two Business
Days thereafter (A) the Account Party shall be obligated (but only to the extent
not prohibited under the Existing Credit Facility) to deposit cash collateral
with the Administrative Agent in the Cash Collateral Account in an amount equal
to such excess to be held, applied or released for application as provided in
Section 2.14, or (B) if such deposit of cash collateral is prohibited by the
Existing Credit Facility or if the Account Party otherwise so elects,
37
the Account Party shall be obligated to deliver to the Administrative Agent (for
the benefit of the Issuing Banks and the Participating Banks) an irrevocable
standby letter of credit (issued pursuant to the Existing Credit Facility or any
other credit facility or agreement (other than this Agreement) to which the
Account Party is a party) having a stated amount equal to such excess, which
letter of credit shall be issued by a commercial bank, and shall be in form and
substance, satisfactory to the Administrative Agent.
(d) If at any time the Maximum Outstanding Exposure exceeds the principal
amount outstanding hereunder, the Account Party may provide a written notice to
the Administrative Agent requesting the Administrative Agent to (1) withdraw
such excess amount from the Cash Collateral Account and pay such amount to the
Account Party and/or (2) reduce the stated amount of, or cancel, one or more of
such standby letters of credit (in an aggregate amount not to exceed such
excess), and, provided that no Default shall have occurred and be continuing,
the Administrative Agent shall promptly undertake such actions in accordance
with the instructions of the Account Party. If a Default shall have occurred and
be continuing, the Administrative Agent shall not take any of the foregoing
actions and, if and when requested by the Required Banks, the amounts held in
the Cash Collateral Account shall be withdrawn by the Administrative Agent, and
the Administrative Agent shall draw upon such standby letters of credit, and the
proceeds thereof shall be applied by the Administrative Agent FIRST to repay the
Reimbursement Obligations and other due and unpaid amounts required to be paid
by the Account Party hereunder and SECOND, so long as no Letters of Credit are
then outstanding, any remaining amounts shall be paid to the Account Party.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
The Account Party hereby represents and warrants to the Administrative
Agent, each Issuing Bank and each Participating Bank that:
SECTION 3.1. CORPORATE EXISTENCE AND POWER. The Account Party is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
SECTION 3.2. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO CONTRAVENTION.
The execution, delivery and performance by the Account Party of the Loan
Documents to which it is a party are within the Account Party's corporate
powers, have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of the Account Party or of any agreement, judgment, injunction, order, decree or
other instrument binding upon
38
the Account Party or any of its Subsidiaries or result in the creation or
imposition of any Lien on any asset of the Account Party or of any Material AES
Entity.
SECTION 3.3. BINDING EFFECT. This Agreement constitutes a valid and binding
agreement of the Account Party and each other Loan Document to which the Account
Party is a party, when executed and delivered in accordance with this Agreement,
will constitute a valid and binding obligation of the Account Party, in each
case enforceable in accordance with its terms. This Agreement has been, and each
other Loan Document to which the Account Party is a party when executed and
delivered in accordance with this Agreement will be, duly executed and delivered
by the Account Party.
SECTION 3.4. FINANCIAL INFORMATION
(a) The consolidated balance sheet of the Account Party and its
Consolidated Subsidiaries as of December 31, 1998 and the related consolidated
statements of operations and cash flows for the fiscal year then ended, reported
on by Deloitte & Touche LLP and set forth in the AES 1998 Form 10-K, a copy of
which has been delivered to each of the Banks, fairly present, in conformity
with generally accepted accounting principles, the consolidated financial
position of the Account Party and its Consolidated Subsidiaries as of such date
and their consolidated results of operations and cash flows for such fiscal
year.
(b) The unaudited consolidated balance sheet of the Account Party and its
Consolidated Subsidiaries as of June 30, 1999 and the related unaudited
consolidated statements of operations and cash flows for the fiscal quarter and
the portion of the Account Party's fiscal year then ended, set forth in the AES
June 1999 Form 10-Q, a copy of which has been delivered to each of the Banks,
fairly present, in conformity with generally accepted accounting principles
applied on a basis consistent with the financial statements referred to in
subsection (a) of this Section, the consolidated financial position of the
Account Party and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such fiscal quarter and
portion of such fiscal year (subject to normal year-end adjustments).
(c) Since December 31, 1998 there has been no material adverse change in
the business, financial position, results of operations or prospects of the
Account Party and its Consolidated Subsidiaries, considered as a whole.
SECTION 3.5 LITIGATION. Except as disclosed in the AES June 1999 Form 10-Q,
there is no action, suit or proceeding pending against, or to the knowledge of
the Account Party threatened against or affecting, the Account Party or any of
its Subsidiaries before any court or arbitrator or any governmental body, agency
or official in which there is a reasonable possibility of an adverse decision
which could materially adversely affect the business, consolidated financial
position or consolidated results of operations of the Account Party and its
Consolidated Subsidiaries or which in any manner draws into question the
validity of any Loan Document.
39
SECTION 3.6 COMPLIANCE WITH ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the currently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability in excess of $100,000 under Title IV of ERISA other than
a liability to the PBGC for premiums under Section 4007 of ERISA.
SECTION 3.7 ENVIRONMENTAL MATTERS. In the ordinary course of its business,
each of the Account Party and its Subsidiaries conducts an ongoing review of the
effect of Environmental Laws on the business, operations and properties of the
Account Party or such Subsidiary, in the course of which it identifies and
evaluates associated liabilities and costs (including, without limitation, any
capital or operating expenditures required for clean-up or closure of properties
presently or previously owned, any capital or operating expenditures required to
achieve or maintain compliance with environmental protection standards imposed
by law or as a condition of any license, permit or contract, any related
constraints on operating activities, including any periodic or permanent
shutdown of any facility or reduction in the level of or change in the nature of
operations conducted thereat, any costs or liabilities in connection with
off-site disposal of wastes or Hazardous Substances by the Account Party or its
Subsidiaries, and any actual or potential liabilities to third parties,
including employees, and any related costs and expenses). On the basis of this
review, the Account Party has reasonably concluded that such associated
liabilities and costs, including the costs of compliance with Environmental
Laws, are unlikely to have a material adverse effect on the business, financial
condition, results of operations or prospects of the Account Party and its
Consolidated Subsidiaries, considered as a whole.
SECTION 3.8 TAXES. United States Federal income tax returns of the Account
Party and its Subsidiaries have been examined and closed through the fiscal year
ended December 31, 1992. The Account Party and its Subsidiaries have filed all
United States Federal income tax returns and the Account Party and all Material
AES Entities have filed all other material tax returns which are required to be
filed by them and have paid all taxes due as indicated on such returns or
pursuant to any assessment received by the Account Party or any of its
Subsidiaries or any Material AES Entity other than any such taxes that are being
diligently contested in good faith through appropriate proceedings and for which
adequate reserves have been established in accordance with generally accepted
accounting principals. The charges, accruals and reserves on the books of the
Account Party, its Subsidiaries and all Material AES Entities in respect of
taxes or other governmental charges are, in the opinion of the Account Party,
adequate.
40
SECTION 3.9 MATERIAL AES ENTITIES. Each Material AES Entity is a
corporation duly incorporated, validly existing and (other than any Material AES
Entity that is not incorporated under the laws of the United States or any
political subdivision thereof) in good standing under the laws of its
jurisdiction of incorporation. Each Material AES Entity has all corporate powers
and all material governmental licenses, authorization, consents and approvals
required to carry on its business as proposed to be conducted and has all
governmental licenses, authorizations, consents and approvals required to have
been obtained prior to the date hereof and which are material to the operation
of its business as proposed to be conducted, except to the extent that the
failure to obtain any such license, authorization, consent or approval,
individually or in the aggregate, could not reasonably be expected to have a
material adverse effect upon the business, financial condition, operations,
property and prospects of the Account Party and its Consolidated Subsidiaries,
taken as a whole.
SECTION 3.10 NOT AN INVESTMENT COMPANY. The Account Party is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 3.11 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Account Party
nor any of its Subsidiaries is subject to regulation as a "holding company" or a
"subsidiary company" of a holding company or an "affiliate" of a subsidiary or
holding company or a "public utility company" under Section 2(a) of the Public
Utility Holding Company Act of 1935, as amended ("PUHCA"), except that the
Account Party, its subsidiary in the United Kingdom (Applied Energy Services
Electric Limited) and certain other Subsidiaries of the Account Party, are
exempt holding companies under Section 3(a)(5) of PUHCA by order of the
Securities and Exchange Commission.
SECTION 3.12 FULL DISCLOSURE. All information heretofore furnished by the
Account Party to the Administrative Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Account Party to the
Administrative Agent or any Bank will be, true and accurate in all material
respects on the date as of which such information is stated or certified. The
Account Party has disclosed to the Banks in writing any and all facts which
materially and adversely affect or may affect (to the extent the Account Party
can now reasonably foresee), the business, operations or financial condition of
the Account Party and its Consolidated Subsidiaries, taken as a whole, or the
ability of the Account Party to perform its obligations under the Loan
Documents.
SECTION 3.13 YEAR 2000 COMPLIANCE. The Account Party has (i) initiated a
review and assessment of all areas within the business and operations of the
Account Party and its Subsidiaries (including those areas affected by suppliers
and vendors) that could be adversely affected by the "YEAR 2000 PROBLEM" (that
is, the risk that computer applications used by them (or their respective
suppliers and vendors) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), (ii) developed a plan and timeline for addressing the Year
2000 Problem on a timely basis and (iii) to date,
41
implemented such plan in accordance with such timetable, except to the extent
that the failure to do so could not reasonably be expected to have a material
adverse effect upon the business, financial position or results of operations of
the Account Party and its Consolidated Subsidiaries, taken as a whole. The
Account Party reasonably believes that all computer applications (including
those of suppliers and vendors) that are material to the business or operations
of the Account Party and its Subsidiaries will on a timely basis be able to
perform properly date-sensitive functions for all dates before and from and
after January 1, 2000 (that is, be "YEAR 2000 COMPLIANT"), except to the extent
that the failure to do so could not reasonably be expected to have a material
adverse effect upon the business, financial position or results of operations of
the Account Party and its Consolidated Subsidiaries, taken as a whole.
ARTICLE 4
CONDITIONS PRECEDENT
SECTION 4.1 CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT. The
effectiveness of this Agreement and the obligation of any Issuing Bank to issue
any Letter of Credit on the Closing Date is subject to the fulfillment of the
following conditions precedent:
(a) LOAN DOCUMENTS. The Administrative Agent shall have received on or
before the Closing Date the following, each dated on or as of the Closing Date,
in form and substance satisfactory to the Administrative Agent, and (except for
the Agency Fee Letter referred to in clause (iii) below) in sufficient copies
for each Participating Bank:
(i) Counterparts of this Agreement, duly executed by the Account
Party, with a counterpart for each Participating Bank;
(ii) Issuing Bank Agreements, duly executed by the Account Party and
each of Union Bank, ▇▇▇▇▇▇ and the other Issuing Banks listed in Schedule
IV, in form and substance satisfactory to the Administrative Agent; and
(iii) the Agency Fee Letter between the Account Party and the
Administrative Agent, duly executed by the Account Party.
(b) CORPORATE DOCUMENTS AND PROCEEDINGS. The Administrative Agent shall
have received on or before the Closing Date a certificate of the Secretary or an
Assistant Secretary of the Account Party, dated the Closing Date, in form and
substance satisfactory to the Administrative Agent and in sufficient copies for
each Participating Bank, certifying:
(i) the names and true signatures of the officers of the Account Party
authorized to sign each Loan Document to which it is a party and the other
documents to be delivered by the Account Party hereunder;
(ii) that attached thereto are true, correct and complete copies of
(A) the Certificate of Incorporation and By-laws of the Account Party, in
each case
42
together with all amendments thereto, as in effect on such date; (B) the
resolutions of the Board of Directors of the Account Party approving each
Loan Document to which it is a party and the other documents to be
delivered by or on behalf of the Account Party hereunder and thereunder;
and (C) all documents evidencing other necessary corporate or other similar
action, if any, with respect to the execution, delivery and performance by
the Account Party of each Loan Document to which it is a party;
(iii) that the resolutions referred to in the foregoing clause (ii)(B)
have not been modified, revoked or rescinded and are in full force and
effect on such date; and
(iv) that attached thereto are true and correct copies of good
standing certificates of the Account Party from the Secretary of State (or
other appropriate governmental official) of the State of Delaware and the
Commonwealth of Virginia.
(c) REPRESENTATIONS AND WARRANTIES; EVENT OF DEFAULT. The Administrative
Agent shall have received on or before the Closing Date a certificate of a duly
authorized officer of the Account Party, dated the Closing Date, in form and
substance satisfactory to the Administrative Agent and in sufficient copies for
each Participating Bank, certifying that, on and as of the Closing Date, (i) the
representations and warranties of the Account Party contained in Article 3 of
this Agreement are true and correct and (ii) no event has occurred and is
continuing that constitutes a Default or an Event of Default, in each case both
before and after giving effect to the transactions contemplated by the Loan
Documents.
(d) NO VIOLATION. The consummation of the transactions contemplated by the
Loan Documents shall not contravene, violate or conflict with, nor involve the
Administrative Agent, any Issuing Bank or any Participating Bank in any
violation of, any Requirement of Law.
(e) FEES AND EXPENSES. All fees and other amounts payable pursuant to
Section 2.3, Section 8.4, and the Agency Fee Letters shall have been paid in
full (to the extent then due and payable).
(f) LEGAL OPINIONS. The Administrative Agent shall have received, with a
counterpart for each Participating Bank, the executed legal opinions of (i)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., General Counsel to the Account Party, in
substantially the form of Exhibit C, (ii) ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special New
York counsel to the Account Party, in substantially the form of Exhibit D, and
(iii) ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, special counsel to the Administrative Agent, in
substantially the form of Exhibit E. Such legal opinions shall be dated the
Closing Date and shall cover such other matters incident to the transactions
contemplated by the Loan Documents as the Administrative Agent may reasonably
require.
(g) ADDITIONAL MATTERS. All corporate and other proceedings, and all
approvals, documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be
43
satisfactory in form and substance to the Administrative Agent, and the
Administrative Agent shall have received such other approvals, opinions and
documents in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as the Administrative Agent shall reasonably
request.
SECTION 4.2 CONDITIONS PRECEDENT TO EACH EXTENSION OF CREDIT. The
obligation of each Issuing Bank to issue any Letter of Credit or to make any
other Extension of Credit shall be subject to the further conditions precedent
that, on the date of issuance (or deemed issuance) of such Letter of Credit or
the date of such other Extension of Credit, as the case may be, and after giving
effect thereto:
(a) The following statements shall be true (and each of the giving of
the applicable notice or request with respect thereto and the making of
such Extension of Credit shall constitute a representation and warranty by
the Account Party that, on the date of such Extension of Credit, such
statements are true):
(i) the representations and warranties contained in Article 3 of
this Agreement are true and correct on and as of the date of such
Extension of Credit, before and after giving effect to such Extension
of Credit, as though made on and as of such date; and
(ii) no Default has occurred and is continuing, or would result
from such Extension of Credit.
(b) The Administrative Agent shall have received such other approvals,
opinions and documents as any Bank, through the Administrative Agent, may
reasonably and in good faith request, and such approvals, opinions and
documents shall be in form and substance satisfactory to the Administrative
Agent.
SECTION 4.3 RELIANCE ON CERTIFICATES. The Administrative Agent, the Issuing
Banks and the Participating Banks shall be entitled to rely conclusively upon
the certificates delivered from time to time by officers of the Account Party as
to the names, incumbency, authority and signatures of the respective persons
named therein until such time as the Administrative Agent may receive a
replacement certificate, in form acceptable to the Administrative Agent, from an
officer of the Account Party identified to the Administrative Agent as having
authority to deliver such certificate, setting forth the names and true
signatures of the officers and other representatives of the Account Party
thereafter authorized to act on behalf of the Account Party and, in all cases,
the Administrative Agent, the Issuing Banks and the Participating Banks may rely
on the information set forth in any such certificate.
ARTICLE 5
COVENANTS
The Account Party agrees that, so long as any Participating Bank has any
Commitment hereunder or any Letter of Credit or Reimbursement Obligation remains
outstanding:
44
SECTION 5.1 INFORMATION. The Account Party will deliver to the
Administrative Agent and each of the Participating Banks:
(a) as soon as available and in any event within 120 days after the end of
each fiscal year of the Account Party, a consolidated and consolidating balance
sheet of the Account Party as of the end of such fiscal year, an unconsolidated
balance sheet of the Account Party as of the end of such fiscal year, the
related consolidated, consolidating and unconsolidated (as applicable)
statements of operations for such fiscal year, the related consolidated and
unconsolidated statements of cash flows for such fiscal year and a statement of
the cash flow to the Account Party of each Subsidiary of the Account Party for
such fiscal year, setting forth in each case in comparative form the figures for
the previous fiscal year, said consolidated financial statements to be reported
on, in a manner acceptable to the Securities and Exchange Commission, by
Deloitte & Touche LLP or other independent public accountants of nationally
recognized standing and such consolidating and unconsolidated financial
statements to be certified as to fairness of presentation, generally accepted
accounting principles (other than failure to consolidate) and consistency by the
chief executive officer, president, chief financial officer or chief accounting
officer of the Account Party;
(b) as soon as available and in any event within 60 days after the end of
each of the first three quarters of each fiscal year of the Account Party, a
consolidated balance sheet of the Account Party as of the end of such quarter
and an unconsolidated balance sheet of the Account Party as of the end of such
fiscal quarter and the related consolidated and unconsolidated statements of
operations for such quarter and for the portion of the Account Party's fiscal
year ended at the end of such quarter and the related consolidated and
unconsolidated statements of cash flows for the portion of the Account Party's
fiscal year ended at the end of such quarter, and a statement of the cash flow
to the Account Party of each Subsidiary of the Account Party for such quarter
and for the portion of the Account Party's fiscal year ended at the end of such
quarter, setting forth in the case of such consolidated statements of operations
and cash flows, in comparative form, the figures for the corresponding quarter
and the corresponding portion of the Account Party's previous fiscal year, all
certified (subject to normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency by the
chief executive officer, president, chief financial officer or chief accounting
officer of the Account Party;
(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate of the chief executive
officer, president, chief financial officer or chief accounting officer of the
Account Party (i) setting forth in reasonable detail the calculations required
to establish whether the Account Party was in compliance with the requirements
of Sections 5.7, 5.8, 5.9, 5.11, 5.13, 5.15, 5.16 and 5.18 on the date of such
financial statements, (ii) stating to the knowledge of the Account Party whether
any Default exists on the date of such certificate and, if any Default then
exists, setting forth the details thereof and the action which the Account Party
is taking or proposes to take with respect thereto and (iii) accompanied by a
schedule setting forth in reasonable detail a description, including, where
applicable, the expected and maximum dollar amounts thereof, of all material
contingent liabilities not disclosed in such financial statements;
45
(d) simultaneously with the delivery of each set of financial statements
referred to in clause (a) above, a statement of the firm of independent public
accountants which reported on such statements (i) whether anything has come to
their attention as a result of their audit (which was not directed primarily
toward obtaining knowledge of noncompliance) to cause them to believe that the
Account Party has failed to comply with the terms, covenants, provisions or
conditions as they relate to accounting of financial matters addressed in
Sections 5.7 to 5.17, inclusive, and (ii) confirming the calculations set forth
in the officer's certificate delivered simultaneously therewith pursuant to
clause (c) above;
(e) within five days after any officer of the Account Party obtains
knowledge of any Default, if such Default is then continuing, a certificate of
the chief executive officer, president, executive vice-president or chief
financial officer of the Account Party setting forth the details thereof and the
action which the Account Party is taking or proposes to take with respect
thereto;
(f) promptly upon the mailing thereof to the shareholders of the Account
Party generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their equivalents)
which the Account Party shall have filed with the Securities and Exchange
Commission;
(h) if and when any member of the ERISA Group (i) gives or is required to
give notice to the PBGC of any "reportable event" (as defined in Section 4043 of
ERISA) with respect to any Plan which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that the plan administrator of
any Plan has given or is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability under
Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such notice; (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies
for a waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to
make any payment or contribution to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the imposition of a Lien or
the posting of a bond or other security, a certificate of the chief executive
officer, president, chief financial officer or chief accounting officer of the
Account Party setting forth details as to such occurrence and the action, if
any, which the Account Party or the applicable member of the ERISA Group is
required or proposes to take;
46
(i) not less than 10 days prior to the anticipated receipt by the Account
Party or any Subsidiary of the Account Party of Net Cash Proceeds from any Asset
Disposition, a certificate of the chief executive officer, president, chief
financial officer or chief accounting officer of the Account Party setting forth
a description of the transaction giving rise to such Net Cash Proceeds, the date
or dates upon which such Net Cash Proceeds are anticipated to be received by the
Account Party or such Subsidiary and the amount of Net Cash Proceeds anticipated
to be received on such date or each of such dates;
(j) promptly after receipt by the Account Party or any Subsidiary of the
Account Party or any Material AES Entity, a copy of each complaint, order,
citation, notice or other written communication from any Person with respect to
the existence or alleged existence of a material violation of any applicable
Environmental Law or the incurrence of any liability, obligation, loss, damage,
cost, expense, fine, penalty or sanction or the requirement to commence any
remedial action resulting from or in connection with any air emission, water
discharge, noise emission, Hazardous Substance or any other environmental,
health or safety matter at, upon, under or within any of the properties now or
previously owned, leased or operated by the Account Party, any of its
Subsidiaries or any Material AES Entity, or due to the operations or activities
of the Account Party, any Subsidiary of the Account Party, any Material AES
Entity or any other Person on or in connection with any such property or any
part thereof; and
(k) from time to time such additional information regarding the financial
position or business of the Account Party and its Subsidiaries as the
Administrative Agent, at the request of any Participating Bank, may reasonably
request.
SECTION 5.2 PAYMENT OF OBLIGATIONS. The Account Party will pay and
discharge all its material obligations and liabilities, including, without
limitation, tax liabilities, except where the same may be contested in good
faith by appropriate proceedings, and will maintain, and will cause each of its
Subsidiaries to maintain, in accordance with generally accepted accounting
principles, appropriate reserves for the accrual of any of the same.
SECTION 5.3 MAINTENANCE OF PROPERTY; INSURANCE. (a) The Account Party will
keep, and will cause each of its Subsidiaries to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted.
(b) The Account Party will, and will cause each of its Subsidiaries to,
maintain (either in the name of the Account Party or in such Subsidiary's own
name), with financially sound and responsible insurance companies, insurance of
such types, in at least such amounts and against at least such risks (and with
such risk retention) as are usually insured against in similar circumstances in
the same general area by companies of established repute engaged in the same or
a similar business; and will furnish to each Bank upon request information
presented in reasonable detail as to the insurance so carried.
47
SECTION 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The Account
Party (a) will continue, and will cause each Material AES Entity to continue, to
engage in business of the same general type as now conducted by the Account
Party and its Subsidiaries, (b) will continue, and will cause each Material AES
Entity to continue, to operate their respective businesses on a basis
substantially consistent with the policies and standards of the Account Party or
such Material AES Entity as in effect on the date hereof and (c) will preserve,
renew and keep in full force and effect, and will cause each Material AES Entity
to preserve, renew and keep in full force and effect, their respective corporate
existence and their respective rights, privileges and franchises necessary or
desirable in the normal conduct of business; PROVIDED that nothing in this
Section 5.4 shall prohibit (i) the merger of a Subsidiary of the Account Party
into the Account Party or the merger or consolidation of any such Subsidiary
with or into another Person if the corporation surviving such consolidation or
merger is a Subsidiary of the Account Party and if, in each case, after giving
effect thereto, (x) no Default shall have occurred and be continuing and (y) the
Account Party shall not be liable for any Debt of such Subsidiary except to the
extent that it was liable for such Debt prior to giving effect to such merger or
(ii) the termination of the corporate existence of any Subsidiary of the Account
Party if the Account Party in good faith determines that such termination is in
the best interest of the Account Party and is not materially disadvantageous to
the Banks.
SECTION 5.5 COMPLIANCE WITH LAWS. The Account Party will comply, and cause
each of its Subsidiaries to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and the
rules and regulations thereunder) (a) except for such non-compliance as would
result solely in the payment of monetary compensation by the Account Party or
such Subsidiary in an amount not to exceed $200,000 for each such non-compliance
and (b) except where the necessity of compliance therewith is contested in good
faith by appropriate proceedings.
SECTION 5.6 INSPECTION OF PROPERTY, BOOKS AND RECORDS. The Account Party
will keep, and will cause each of its Subsidiaries to keep, proper books of
record and account in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities; and will
permit, and will cause each Significant AES Entity to permit, representatives of
any Bank at such Bank's expense to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books and
records and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants, all at
such reasonable times and as often as may reasonably be desired.
SECTION 5.7 DEBT. (a) The Account Party shall not, and shall not permit any
of its Subsidiaries to, incur, assume, create or suffer to exist any Debt
(including any Guarantees of Debt, surety bonds and obligations in respect of
letters of credit), except for:
(i) Debt under the Loan Documents and any Guarantees thereof;
48
(ii) Debt incurred by a Subsidiary (A) (1) to finance the development,
acquisition, construction, operation, maintenance or working capital
requirements of a Power Project or any unrelated business operated or
managed (including on a joint basis with others), directly or indirectly,
by the Account Party and in which such Subsidiary has a direct or indirect
interest or (2) in respect of any letter of credit issued in replacement of
funds on deposit in any debt service reserve or other similar account of a
Power Project in which such Subsidiary has a direct or indirect interest
(up to a maximum aggregate stated amount of all such letters of credit of
all Subsidiaries equal to $100,000,000) to the extent that such funds so
replaced are received by the Account Party as a result of such funds being
used to pay dividends or make distributions on the capital stock of such
Subsidiary and any other Subsidiary in the chain of ownership between the
Account Party and such Subsidiary and (B) that is not also the Debt of, or
Guaranteed by, any other Subsidiary with an interest in any other Power
Project or unrelated business (except for Debt incurred or assumed by
Subsidiaries of the Account Party (other than Specified Subsidiaries)
which, at the time such Debt was incurred or assumed, in the aggregate,
represent less than 50% of the Parent Operating Cash Flow (other than
Parent Operating Cash Flow attributable to Specified Subsidiaries) for the
immediately preceding four fiscal quarters);
(iii) Debt existing on the date hereof (other than Debt under the
Existing Credit Facility);
(iv) Debt under the Existing Credit Facility; PROVIDED, HOWEVER, that
the aggregate principal amount of such Debt at any time outstanding, and
the aggregate amount of commitments under the Existing Credit Facility,
shall not exceed $650,000,000 UNLESS (A) the Subsidiary Guaranties are
irrevocably released or terminated in their entirety (so that the Existing
Credit Facility does not have the benefit of any Guarantees) or (B) the
Account Party's obligations hereunder and under the other Loan Documents
are equally and ratably guaranteed by the Subsidiary Guarantors pursuant to
guaranty agreements in form and substance substantially similar to the
Subsidiary Guaranties;
(v) Debt owing to the Account Party or a Consolidated Subsidiary of
the Account Party;
(vi) Debt of the Account Party or its Subsidiaries representing a
refinancing, replacement or refunding of Debt permitted by clauses (ii) and
(iii) above; PROVIDED that (A) the aggregate principal amount of such Debt
outstanding or available will not be increased at the time of such
refinancing, replacement or refunding (other than (1) in the case of Debt
("HAWAII REFINANCING DEBT") refinancing, replacing or refunding Debt of AES
Hawaii, Inc. outstanding on May 15, 1997 ("REPLACED HAWAII DEBT") (so long
as such Hawaii Refinancing Debt has no scheduled principal repayments, or
principal payments at the option of the holder thereof in the absence of
the occurrence of specified events, in any such case in excess of those
required under the Replaced Hawaii Debt, prior to June 1, 2004), an
increase of up to $300,000,000 in excess of the aggregate principal amount
of Debt that is being
49
refinanced, replaced or refunded to the extent that proceeds in at least
the amount of such increase are received by the Account Party as a result
of such proceeds being used to pay dividends or make distributions on the
capital stock of such Subsidiary and any other Subsidiary in the chain of
ownership between the Account Party and such Subsidiary, (2) in the case of
Debt refinancing, replacing or refunding Debt of the corporations or other
entities that hold the Account Party's interest in the Tiszai II and
Tiszaipalkonya Power Projects (including, without limitation, Debt of a
Subsidiary of the Account Party that does not have a direct or indirect
interest in any other Power Project, the proceeds of which are used to
refinance such Debt of such corporations or other entities and to pay
dividends to the Account Party) outstanding on October 21, 1997, an
increase of up to $85,000,000 in excess of the aggregate principal amount
of Debt that is being refinanced, replaced or refunded to the extent that
proceeds of at least $45,000,000 are received by the Account Party as a
result of such proceeds being used to pay dividends or make distributions
on the capital stock of such Subsidiary and any other Subsidiary in the
chain of ownership between the Account Party and such Subsidiary and (3) in
the case of Debt refinancing, replacing or refunding Debt of Dominican
Power Partners, LDC ("DPP") outstanding on October 21, 1997 (including,
without limitation, Debt of AES Los Mina Finance Company the proceeds of
which are used to refinance such Debt of DPP and to pay dividends to the
Account Party), an increase of up to $100,000,000 in excess of the
aggregate principal amount of Debt that is being refinanced, replaced or
refunded to the extent that proceeds of at least $80,000,000 are received
by the Account Party as a result of such proceeds being used to pay
dividends or make distributions on the capital stock of such Subsidiary and
any other Subsidiary in the chain of ownership between the Account Party
and such Subsidiary), (B) no obligor shall be liable for any such Debt
except to the extent that it was liable for the Debt so refinanced,
replaced or refunded (except that (I) AES Los Mina Finance Company may
incur Debt the proceeds of which are used to refinance Debt of DPP and pay
dividends to the Account Party, (II) a Subsidiary of the Account Party that
does not have a direct or indirect interest in any other Power Project may
incur Debt the proceeds of which are used to refinance Debt of the
corporations or other entities that hold the Account Party's interest in
the Tiszai II and Tiszaipalkonya Power Projects and pay dividends to the
Account Party, (III) a Subsidiary of the Account Party that does not have a
direct or indirect interest in any Power Project other than AES Sul
Distribudora Gaucha de Energia S.A. ("AES SUL") may incur Debt the proceeds
of which are used to refinance Debt of AES Sul and (IV) a Subsidiary of the
Account Party (the "REFINANCING SUBSIDIARY") that has a direct or indirect
interest in a Power Project may incur Debt the proceeds of which are used
to refinance Debt of another Subsidiary of the Account Party (the
"REFINANCED SUBSIDIARY") that has a direct or indirect interest in such
Power Project, PROVIDED that the Refinancing Subsidiary has no direct or
indirect interest in any Power Project other than Power Projects in which
the Refinanced Subsidiary has a direct or indirect interest) and (C) if any
Debt being refinanced, replaced or refunded is subordinated to the Debt of
the Account Party hereunder or of any Subsidiary under any Guarantee
thereof, such Debt shall be subordinated at least to the same extent;
50
(vii) Guarantees by the Account Party of (x) Debt permitted by clause
(ii)(A)(1) above, (y) Debt permitted by clause (ii)(A)(2) above in respect
of letters of credit issued in replacement of debt service reserve or other
similar accounts related to the AES Hawaii (formerly known as Barbers
Point), Shady Point or Thames Power Projects and (z) to the extent that the
same constitutes a refinancing of Debt referred to in subclause (x) or (y)
above, Debt permitted under clause (vi) above;
(viii) Additional Permitted Subordinated Debt;
(ix) Permitted Senior Unsecured Debt;
(x) surety bonds in respect performance obligations of the Account
Party and letters of credit, in an aggregate principal amount at any time
outstanding not to exceed the excess of (A) $400,000,000 over (B) the
Letter of Credit Liabilities;
(xi) the Subsidiary Guaranties; and
(xii) other Debt not described in clauses (i) through (xi) above in an
aggregate principal amount at any time outstanding not to exceed
$10,000,000;
PROVIDED, HOWEVER, that notwithstanding any other provision contained herein,
the Subsidiary Guarantors shall not directly or indirectly Guarantee any Debt of
the Account Party (other than the Debt referred to in clause (iv) above) unless
the Account Party's obligations hereunder and under the other Loan Documents are
equally and ratably guaranteed by the Subsidiary Guarantors pursuant to guaranty
agreements in form and substance substantially similar to the Subsidiary
Guaranties.
(b) The Account Party shall not issue any Additional Permitted Subordinated
Debt or Permitted Senior Unsecured Debt unless (i) both before and after giving
effect to such issuance no Default shall have occurred and be continuing and
(ii) on a PRO FORMA basis after giving effect to such issuance and the
application of the proceeds thereof (but without increasing or decreasing Parent
Operating Cash Flow on account of acquisitions for periods prior to such
acquisitions), the Account Party would have been in compliance with Section 5.16
and (unless the Account Party shall have received net cash proceeds of not less
than $500,000,000 from the issuance, after September 1, 1999 and on or before
the earlier of the date upon which such Additional Permitted Subordinated Debt
or Permitted Senior Unsecured Debt, as applicable, is issued and December 31,
1999, of its common stock to Persons other than Subsidiaries or affiliates of
the Account Party) 5.15 as of the last day of the fiscal quarter ended on, or
most recently ended prior to, the date of such issuance (assuming for this
purpose that (x) such Additional Permitted Subordinated Debt or Permitted Senior
Unsecured Debt, as applicable (and any other Debt or preferred stock of the
Account Party outstanding on the date of issuance of such Additional Permitted
Subordinated Debt or Permitted Senior Unsecured Debt, as applicable, and issued
after the first day of the period of four consecutive fiscal quarters ended on
such last day), was issued and the proceeds applied on the first day of the
period of four consecutive
51
fiscal quarters ended on such last day and (y) all Debt and preferred stock of
the Account Party repaid or redeemed prior to or simultaneously with the
issuance of such Additional Permitted Subordinated Debt or Permitted Senior
Unsecured Debt, as applicable, was repaid or redeemed on the day prior to the
first day of such period).
(c) In addition to the Debt permitted by subsections (a) and (b) above, the
Account Party shall be permitted to incur, assume, create and suffer to exist up
to an aggregate principal amount not to exceed the sum of (1) $600,000,000 PLUS
(2) an amount equal to 50% of the aggregate net proceeds received by the Account
Party from issuances and sales (other than sales to the Account Party or any of
its Subsidiaries or Affiliates) of its common stock after September 1, 1999 of
unsecured senior and/or subordinated Debt issued and sold by way of (i) a
registered public offering, (ii) an offering made to qualified institutional
buyers pursuant to Rule 144A under the Securities Act and/or (iii) in the form
of term loans from banks or other institutional lenders or investors, in each
case having terms and provisions applicable to the Account Party and its
Subsidiaries that are no more restrictive in any material respect (including,
without limitation, covenants and events of default) than those included in
existing outstanding public Debt of the Account Party or otherwise acceptable to
the Required Banks (except that limitations on (I) the ability of Subsidiaries
and Affiliates of the Account Party to guarantee other senior Debt of the
Account Party, (II) the ability of the Account Party to grant Liens on stock of
Subsidiaries or intercompany advances to secure other senior Debt of the Account
Party or (III) the ability of Subsidiaries or Affiliates of the Account Party to
grant Liens on their assets (including stock of Subsidiaries and intercompany
advances) to secure guarantees of other senior Debt of the Account Party shall
be permitted); PROVIDED that (A) both before and after giving effect to such
issuance no Default shall have occurred and be continuing, (B) on a PRO FORMA
basis after giving effect to such issuance and the application of the proceeds
thereof (but without increasing or decreasing Parent Operating Cash Flow on
account of acquisitions for periods prior to such acquisitions) the Account
Party would have been in compliance with Section 5.16 and (unless the Account
Party shall have received net cash proceeds of not less than $500,000,000 from
the issuance, after September 1, 1999 and on or before the earlier of the date
upon which such Debt is issued and December 31, 1999, of its common stock to
Persons other than Subsidiaries or affiliates of the Account Party) 5.15 as of
the last day of the fiscal quarter ended on, or most recently ended prior to,
the date of such issuance (assuming for this purpose that (x) such Debt (and any
other Debt or preferred stock of the Account Party outstanding on the date of
issuance of such Debt and issued after the first day of the period of four
consecutive fiscal quarters ended on such last day) was issued and the proceeds
applied on the first day of the period of four consecutive fiscal quarters ended
on such last day and (y) all Debt and preferred stock of the Account Party
repaid or redeemed prior to or simultaneously with the issuance of such Debt was
repaid or redeemed on the day prior to the first day of such period) and (C)
such Debt (x) is not guaranteed by any Subsidiary or Affiliate of the Account
Party and (y) does not require any scheduled payment of principal prior to July
14, 2003.
SECTION 5.8 MINIMUM CONSOLIDATED NET WORTH. Consolidated Net Worth will at
no time be less than the sum of (i) $1,160,000,000 PLUS (ii) for each fiscal
quarter of the Account Party ended after December 19, 1997 and at or prior to
such
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time for which Consolidated Net Income is a positive number, an amount equal to
50% of Consolidated Net Income for such fiscal quarter PLUS (iii) an amount
equal to 75% of the cumulative net proceeds to the Account Party from issuances
of equity securities made by the Account Party from and after December 19, 1997.
SECTION 5.9 RESTRICTED PAYMENTS. Neither the Account Party nor any of its
Subsidiaries will declare or make any Restricted Payment unless, after giving
effect thereto, the aggregate of all Restricted Payments declared or made
subsequent to June 30, 1995 does not exceed the sum of $5 million PLUS 5% (or,
if such amount is a loss, MINUS 100%) of Consolidated Net Income of the Account
Party and its Consolidated Subsidiaries for the period from June 30, 1995
through the last day of the fiscal quarter of the Account Party then most
recently ended (treated for this purpose as a single accounting period). Nothing
in this Section shall prohibit the payment of any dividend or distribution
within 45 days after the declaration thereof if such declaration was not
prohibited by this Section.
SECTION 5.10 SUBORDINATED DEBT AND SENIOR NOTES. (a) The Account Party will
not, and will not permit any of its Subsidiaries to, consent to or solicit any
amendment, supplement, waiver or other modification of any Subordinated Note
Indenture or any other agreement or instrument evidencing or governing any
Subordinated Debt that would (i) increase the interest rate applicable thereto,
(ii) shorten the time or increase the amount of any principal payment
thereunder, (iii) change, in any manner, the subordination provisions thereof or
(iv) change any of the covenants, events of default or other provisions thereof
in any manner that could make any such covenant, event of default or other
provision more restrictive or that could otherwise be disadvantageous to the
Account Party or the Participating Banks, without the express prior written
consent of the Required Banks.
(b) The Account Party will not, and will not permit any of its Subsidiaries
to, consent to or solicit any amendment, supplement, waiver or other
modification of the 1998 Senior Note Indenture or any other agreement or
instrument evidencing or governing any Senior Notes that (i) would increase the
interest rate applicable thereto, (ii) shorten the time or increase the amount
of any principal payment thereunder or (iii) change any of the covenants, events
of default or other provisions thereof in any manner that could make any such
covenant, event of default or other provision more limiting or that could
otherwise be disadvantageous to the Account Party or the Participating Banks,
without the express prior written consent of the Required Banks.
SECTION 5.11 LIMITATIONS ON GUARANTEES AND COMMITMENTS. (a) The aggregate
amount of Investment and Guarantee Commitments shall not at any time exceed an
amount equal to the sum of:
(i) the product of (A) Parent Operating Cash Flow for the period of four
consecutive fiscal quarters then most recently ended MULTIPLIED by (B) four (4),
PLUS
(ii) the excess, if any, of (A) the aggregate amount of net cash proceeds
received by the Account Party from the issuance of equity securities and from
the disposition of Material AES Entities during the period from December 19,
1997 to such time (to the extent not used to prepay Subordinated Debt or to
permanently retire
53
any other Debt) over (B) the aggregate amount of cash Investments (other than
Temporary Cash Investments) and cash payments made by the Account Party under
Guarantees during such period PLUS $430,000,000;
PROVIDED, that for purposes of determining compliance with this subsection (a),
the aggregate amount of Investment and Guarantee Commitments at any time shall
be reduced to the extent collateralized with cash and cash equivalents and any
deposit or other posting by the Account Party of cash or cash equivalents as
collateral for any Investment and Guarantee Commitment shall be treated as a
cash Investment for purposes of clause (ii)(B) of this subsection (a).
(b) The Account Party shall not make or enter into any Investment and
Guarantee Commitments at any time that the Account Party's senior unsecured Debt
is rated less than BB- by Standard & Poor's Ratings Services or less than Ba3 by
▇▇▇▇▇'▇ Investors Service, Inc.
SECTION 5.12 NEGATIVE PLEDGE. Neither the Account Party nor any Subsidiary
of the Account Party will create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt outstanding
on the date of this Agreement;
(b) any Lien existing on any asset of any corporation at the time such
corporation becomes a Subsidiary of the Account Party and not created in
contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed for the purpose
of financing all or any part of the cost of acquiring such asset, PROVIDED that
such Lien attaches to such asset concurrently with or within 90 days after the
acquisition thereof;
(d) any Lien on any asset of any corporation existing at the time such
corporation is merged or consolidated with or into the Account Party or a
Subsidiary of the Account Party and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition thereof by the
Account Party or a Subsidiary of the Account Party and not created in
contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses or clause (l) of this Section; PROVIDED that such Debt is not increased
and is not secured by any additional assets (other than, in the case of Debt
permitted under Section 5.7(a)(vi), Liens on assets of any Subsidiary permitted
under such Section 5.7(a)(vi) to be obligated on such Debt);
(g) Liens arising in the ordinary course of its business which (i) do not
secure Debt, (ii) do not secure any obligation in any amount exceeding
$25,000,000
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and (iii) do not in the aggregate materially detract from the value of its
assets or materially impair the use thereof in the operation of its business;
(h) Liens in connection with worker's compensation, social security
obligations, taxes, assessments, statutory obligations or other similar charges,
good faith deposits in connection with tenders, contracts or leases to which the
Account Party or any of its Subsidiaries is a party or other deposits required
to be made in the ordinary course of business and not in connection with
borrowing money or obtaining advances or credit, PROVIDED in each case that the
obligation or liability arises in the ordinary course of business and if overdue
is being contested in good faith by appropriate proceedings;
(i) inchoate materialmen's, mechanics', workmen's, repairmen's, employees',
carriers', warehousemen's, or other like Liens arising in the ordinary course of
business of the Account Party or its Subsidiaries;
(j) with respect to real property, easements, rights of way, reservations
and other minor defects or irregularities in title which do not materially
impair the use thereof for the purposes for which it is held by the Account
Party or its Subsidiaries;
(k) Liens on cash collateral securing (i) Investment and Guarantee
Commitments, (ii) the Letter of Credit Liabilities and (iii) the "Letter of
Credit Liabilities" (as defined in the Existing Credit Facility); and
(l) Liens securing Power Project Debt or utility obligations or other
customer, supplier or contractor obligations associated with a Power Project
that are limited to the assets and revenues of the related Power Project and the
capital stock or other assets (including contract rights) of Subsidiaries of the
Account Party having a direct or indirect interest in such Power Project.
SECTION 5.13 CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. (a) The Account
Party will not will consolidate or merge with or into any other Person; PROVIDED
that the Account Party may merge with another Person if (i) the Account Party is
the corporation surviving such merger or the corporation surviving such merger
assumes all obligations of the Account Party under the Loan Documents and (ii)
immediately after giving effect to such merger, no Default shall have occurred
and be continuing.
(b) The Account Party will not sell, lease or otherwise transfer, directly
or indirectly, all or any substantial part of the assets of the Account Party
and its Subsidiaries, taken as a whole, to any other Person.
(c) The Account Party will not sell or otherwise transfer, or permit to be
sold or otherwise transferred, directly or indirectly, any shares of capital
stock of any Material AES Entity which are owned, directly or indirectly, by the
Account Party; PROVIDED that the Account Party may transfer, or permit the
transfer of, shares of capital stock of a Material AES Entity owned, directly or
indirectly, by the Account Party if:
55
(i) after giving effect to such transfer, the Account Party will
continue to own, directly or indirectly, at least 80% of the outstanding
capital stock of each Material AES Entity;
(ii) the consideration received by the Account Party or a Subsidiary
of the Account Party for such transfer (A) has a value, as determined by
the Account Party, at least equal to the fair market value of the shares of
capital stock transferred and (B) is in the form of cash or capital stock
or partnership or other similar equity interests of a Person the principal
assets of which consist of direct or indirect interests in one or more
Power Projects, or a combination of the foregoing;
(iii) after giving effect to such transfer, no Default shall have
occurred and be continuing;
(iv) on a PRO FORMA basis after giving effect to such transfer, the
Cash Flow Coverage Ratio for the four consecutive fiscal quarters then most
recently ended is at least 1.75 to 1.00 (assuming for this purpose that
such transfer occurred on the first day of such period of four consecutive
fiscal quarters);
(v) AES Hawaii, Inc. shall at all times remain a direct Subsidiary of
AES Hawaii Management and AES Shady Point, Inc. shall at all times remain a
direct Subsidiary of AES Oklahoma;
(vi) AES Western Maryland Management, Inc., AES Mexico Farms Inc. and
AES Warrior Run Limited Partnership shall at all times remain Subsidiaries
of AES Warrior Run and shall hold, directly or indirectly, substantially
all of the assets held by them on March 4, 1999; and
(vii) Southland and Subsidiaries of Southland holding substantially
all of the assets of Southland and its Subsidiaries as of March 4, 1999
shall at all times remain Subsidiaries of AES Southland;
PROVIDED, HOWEVER, that the foregoing clauses (v), (vi) and (vii) shall not
apply if the corresponding covenants in the Existing Credit Facility are
permanently deleted pursuant to an amendment thereto or otherwise have no
further force or effect thereunder.
SECTION 5.14 USE OF LETTERS OF CREDIT. The Letters of Credit will be used
to support bidding activities, other performance and financial obligations and
other general corporate purposes of the Account Party and its Subsidiaries. None
of the proceeds of any Letter of Credit will be used, directly or indirectly,
for the purpose, whether immediate, incidental or ultimate, of buying or
carrying any "margin stock" within the meaning of Regulation U or Regulation G.
SECTION 5.15 CASH FLOW COVERAGE. The Cash Flow Coverage Ratio for any
period of four consecutive fiscal quarters of the Account Party ending after the
date hereof (including any PRO FORMA calculation under subsection (b) or (c) of
Section 5.7 made by reference to such period) shall not be less than (i) in the
case of any
56
period ending after the date hereof and on or prior to September 30, 2000, 1.50
to 1.00 and (ii) in all other cases, 1.75 to 1.00.
SECTION 5.16 CASH FLOW TO TOTAL DEBT RATIO. The Cash Flow to Total Debt
Ratio shall not, at any time after the date hereof, be less than (i) 0.10 to
1.00 at any time on or prior to December 31, 1999, (ii) 0.105 to 1.00 at any
time after December 31, 1999 and on or prior to ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇▇) 0.125 to
1.00 at any time after March 31, 2000 and on or prior to September 30, 2000 and
(iv) 0.15 to 1.00 at any time thereafter.
SECTION 5.17 TRANSACTION WITH AFFILIATES. Except pursuant to agreements
existing on the date hereof and listed on Schedule III attached hereto, the
Account Party will not, and will not permit any of its Subsidiaries to, directly
or indirectly, in any transaction involving aggregate consideration in excess of
$1,000,000, pay any funds to or for the account of, make any investment (whether
by acquisition of stock or indebtedness, by loan, advance, transfer of property,
guarantee or other agreement to pay, purchase or service, directly or
indirectly, any Debt, or otherwise) in, lease, sell, transfer or otherwise
dispose of any assets, tangible or intangible, to, or participate in, or effect
any transaction in connection with any joint enterprise or other joint
arrangement with, any Affiliate; PROVIDED, HOWEVER, that the foregoing
provisions of this Section shall not prohibit (a) the Account Party from
declaring or paying any lawful dividend so long as, after giving effect thereto,
no Default shall have occurred and be continuing, (b) the Account Party or any
Subsidiary of the Account Party from making sales to or purchases from any
Affiliate and, in connection therewith, extending credit or making payments, or
from making payments for services rendered by any Affiliate, if such sales or
purchases are made or such services are rendered in the ordinary course of
business and on terms and conditions at least as favorable to the Account Party
or such Subsidiary as the terms and conditions which would apply in a similar
transaction with a Person not an Affiliate, (c) the Account Party or any
Subsidiary of the Account Party from making payments of principal, interest and
premium on any Debt of the Account Party or such Subsidiary held by an Affiliate
if the terms of such Debt are substantially as favorable to the Account Party or
such Subsidiary as the terms which could have been obtained at the time of the
creation of such Debt from a lender which was not an Affiliate and (d) the
Account Party or any Subsidiary of the Account Party from participating in, or
effecting any transaction in connection with, any joint enterprise or other
joint arrangement with any Affiliate if the Account Party or such Subsidiary
participates in the ordinary course of its business and on a basis no less
advantageous than the basis on which such Affiliate participates. The provisions
of this Section 5.17 shall not apply to (i) transactions between the Account
Party or any of its Subsidiaries, on the one hand, and any employee of the
Account Party or any of its Subsidiaries, on the other hand, that are approved
by the Board of Directors of the Account Party or any committee of the Board of
Directors consisting of the Account Party's independent directors and (ii) the
payment of reasonable and customary regular fees to directors of the Account
Party or a Subsidiary of the Account Party.
SECTION 5.18 LIMITATION ON INVESTMENTS. (a) The Account Party will not
permit any Specified Subsidiary to make any Investment in, or to consolidate or
merge with, any other Person with a direct or indirect interest in any Power
Project or unrelated business other than the Power Project or
57
unrelated business in which such Specified Subsidiary has a direct or indirect
interest prior to the making of such Investment or the consummation of such
consolidation or merger; PROVIDED, HOWEVER, that this subsection (a) shall not
apply if the corresponding covenant in the Existing Credit Facility is
permanently deleted pursuant to an amendment thereto or otherwise has no further
force or effect thereunder.
(b) The Account Party will not permit any Subsidiary of the Account Party
with any direct or indirect interest in (i) a Power Project to make any
Investment in, or consolidate or merge with, any other Person with a direct or
indirect interest in any other Power Project or any unrelated business or (ii)
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 Project;
PROVIDED that one or more Subsidiaries of the Account Party (each, an
"INTERMEDIATE HOLDING COMPANY") may serve as holding companies for any or all of
the Account Party's direct and indirect interests in Power Projects and
unrelated businesses, so long as:
(A) each such Intermediate Holding Company's direct and indirect
interest in any Power Project or unrelated business shall be limited to the
ownership of capital stock or Debt obligations of a Person with a direct or
indirect interest in such Power Project or unrelated business;
(B) no Lien shall exist upon any asset of any Intermediate Holding
Company (other than Liens on the capital stock of the Account Party or a
Subsidiary of an Intermediate Holding Company securing Debt of such
Intermediate Holding Company or such Subsidiary and Liens securing Debt
permitted under clause (ii) of Section 5.7(a));
(C) no Intermediate Holding Company shall incur, assume, create or
suffer to exist any Debt (including any Guarantee of Debt) other than Debt
owing to the Account Party or any Intermediate Holding Company and Debt
permitted by clauses (i) and (ii) of Section 5.7(a) or (to the extent that
such Debt represents a refinancing or replacement of Debt permitted by
clause (ii) of Section 5.7(a)) clause (vi) of Section 5.7(a) (without
giving effect to clauses (I) through (IV) of subclause (B) thereof); and
(D) AES Electric may make Investments in Power Projects owned by NIGEN
Limited and Medway Power Limited as of the date of this Agreement under any
agreement by which it is bound as of the date of this Agreement.
SECTION 5.19 YEAR 2000 COMPLIANCE. The Account Party shall promptly notify
the Administrative Agent in the event that the Account Party discovers or
determines that any computer application (including those of its suppliers,
vendors and customers) that is material to its or any of its Subsidiaries'
business and operations will not be Year 2000 compliant, except to the extent
that such failure could not reasonably be expected to have a material adverse
effect upon the business, financial position or results of operations of the
Account Party and its Consolidated Subsidiaries, taken as a whole.
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ARTICLE 6
EVENTS OF DEFAULT
SECTION 6.1 EVENTS OF DEFAULT. The following events shall each constitute
an "EVENT OF DEFAULT", if the same shall occur and be continuing after the grace
period and notice requirement (if any) applicable thereto:
(a) the Account Party shall fail to pay when due any Reimbursement
Obligation, or shall fail to pay within three days of the date when due any
interest, fees or other amounts payable under any Loan Document; or
(b) The Account Party shall fail to observe or perform any covenant
contained in Sections 5.7 to 5.18, inclusive; or
(c) the Account Party shall fail to observe or perform any covenant or
agreement contained in any Loan Document (other than those covered by
clause (a) or (b) above) for 20 days after written notice thereof has been
given to the Account Party by the Administrative Agent at the request of
any Bank; or
(d) any representation, warranty, certification or statement made by
the Account Party in any Loan Document or in any certificate, financial
statement or other document delivered pursuant to any Loan Document shall
prove to have been incorrect in any material respect when made (or deemed
made); or
(e) the Account Party shall fail to make any payment in respect of any
Material Debt when due or within any applicable grace period; or
(f) any event or condition shall occur which (i) results in the
acceleration of the maturity of any Material Debt of AES or of any Material
Debt of any Subsidiary or Subsidiaries of the Account Party (except AES
Placerita and Central Termica San Nicolas S.A.) that, individually or in
the aggregate (in each case together with any Person in which such
Subsidiary has a direct or indirect equity Investment), contributed 15% or
more to Parent Operating Cash Flow for the four most recently completed
fiscal quarters of the Account Party, (ii) results in the termination of
any commitment to provide financing in an amount in excess of $15,000,000
to the Account Party or any Material AES Entity or (iii) enables (or, with
the giving of notice or lapse of time or both, would enable) the holder of
any Material Debt of the Account Party or any Person acting on such
holder's behalf to accelerate the maturity thereof; or
(g) the Account Party or any Significant AES Entity shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any
59
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official for it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due, or
shall take any corporate action to authorize any of the foregoing; or
(h) an involuntary case or other proceeding shall be commenced against
the Account Party or any Significant AES Entity seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be entered
against the Account Party or any Significant AES Entity under the federal
bankruptcy laws as now or hereafter in effect; or
(i) any member of the ERISA Group shall fail to pay when due an amount
or amounts aggregating in excess of $15,000,000 which it shall have become
liable to pay under Title IV of ERISA; or notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by any member of the
ERISA Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate,
to impose liability (other than for premiums under Section 4007 of ERISA)
in respect of, or to cause a trustee to be appointed to administer any
Material Plan; or a condition shall exist by reason of which the PBGC would
be entitled to obtain a decree adjudicating that any Material Plan must be
terminated; or there shall occur a complete or partial withdrawal from, or
a default, within the meaning of Section 4219(c)(5) of ERISA, with respect
to one or more Multiemployer Plans which could cause one or more members of
the ERISA Group to incur a current payment obligation in excess of
$15,000,000; or
(j) a judgment or order for the payment of money in excess of
$15,000,000 shall be rendered against the Account Party or any Subsidiary
of the Account Party, and such judgment or order shall continue unsatisfied
and unstayed for a period of 10 days; or
(k) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) other than a
member of the AES Management Group shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under said Act) of 20% or more of the outstanding
shares of common stock of the Account Party; or during any period of twelve
consecutive calendar months, individuals who were directors of the Account
Party on the first day of such period (or who were appointed or nominated
for election as directors of the Account Party by at least a majority of
the
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individuals who were directors on the first day of such period) shall
cease to constitute a majority of the board of directors of the Account
Party.
SECTION 6.2 REMEDIES UPON EVENTS OF DEFAULT. Upon the occurrence and during
the continuance of any Event of Default, the Administrative Agent shall at the
request of the Required Banks, upon notice to the Account Party (i) declare the
Commitments and the commitments of the Issuing Banks to make any Extension of
Credit to be terminated, whereupon the same shall forthwith terminate (PROVIDED,
that the obligations of the Participating Banks under Section 2.5 shall continue
notwithstanding any such termination), (ii) declare all amounts payable
hereunder by the Account Party, whether matured or unmatured (including all
Reimbursement Obligations and all interest thereon), to be immediately due and
payable, whereupon the same shall immediately become due and payable without
demand, presentment, protest or further notice of any kind, all of which are
hereby expressly waived by the Account Party, and/or (iii) make demand upon the
Account Party to, and forthwith upon such demand the Account Party shall, (A)
subject to Section 2.14(d), pay to the Administrative Agent in immediately
available funds at the Administrative Agent's office designated in such demand,
for deposit in the Cash Collateral Account or any other account designated by
the Administrative Agent, as provided in Section 2.14, an amount equal to the
aggregate Available Amount at such time, or (B) deliver to the Administrative
Agent (for the benefit of the Issuing Banks and the Participating Banks) an
irrevocable standby letter of credit (issued pursuant to the Existing Credit
Facility or any other credit facility or agreement (other than this Agreement)
to which the Account Party is a party) having a stated amount equal to the
aggregate Available Amount at such time, which letter of credit shall be issued
by a commercial bank, and shall be in form and substance, satisfactory to the
Administrative Agent; PROVIDED, HOWEVER, that upon the occurrence of any
Automatic Acceleration Event, (A) the Commitments and the commitments of the
Issuing Banks to make Extensions of Credit shall automatically be terminated,
(B) all amounts payable hereunder by the Account Party, whether matured or
unmatured (including all Reimbursement Obligations and all interest thereon),
shall immediately become due and payable without demand, presentment, protest or
further notice of any kind, all of which are hereby expressly waived by the
Account Party, and (C) without any request or the taking of any other action by
the Administrative Agent or any Participating Bank, (1) subject to Section
2.14(d), the Account Party shall be obligated forthwith to pay to the
Administrative Agent in immediately available funds for deposit in the Cash
Collateral Account, as provided in Section 2.14, an amount equal to the
aggregate Available Amount at such time, or (2) the Account Party shall be
obligated to deliver to the Administrative Agent (for the benefit of the Issuing
Banks and the Participating Banks) an irrevocable standby letter of credit
(issued pursuant to the Existing Credit Facility or any other credit facility or
agreement (other than this Agreement) to which the Account Party is a party)
having a stated amount equal to the aggregate Available Amount at such time,
which letter of credit shall be issued by a commercial bank, and shall be in
form and substance, satisfactory to the Administrative Agent. Notwithstanding
anything to the contrary contained herein, no notice given or declaration made
by the Administrative Agent pursuant to this Section 6.2 shall affect (1) the
obligation of any Issuing Bank to make any payment under any Letter of Credit
issued by such Issuing Bank in accordance with the terms of such Letter of
Credit, or (2) the participatory interest of each Participating Bank in each
such payment.
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ARTICLE 7
THE ADMINISTRATIVE AGENT, THE PARTICIPATING
BANKS AND THE ISSUING BANKS
SECTION 7.1 APPOINTMENT. Each of the Issuing Banks and the Participating
Banks hereby irrevocably designates and appoints Union Bank as the
Administrative Agent under this Agreement and irrevocably authorizes Union Bank,
as Administrative Agent, 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 Administrative Agent by
the terms of this Agreement and the other Loan Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in this Agreement or any other Loan Document, the
Administrative Agent and the Issuing Banks shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Participating 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
Administrative Agent or the Issuing Banks.
SECTION 7.2 DELEGATION OF DUTIES. The Administrative Agent may execute any
of its duties under this Agreement or any other Loan Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
SECTION 7.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent, the
Issuing Banks nor any of their respective Related Parties 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 Participating Banks for any recitals, statements,
representations or warranties made by the Account Party or any officer thereof
contained in any Loan Document or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, any Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any Loan Document
or for any failure of the Account Party to perform its obligations hereunder or
thereunder. Except as otherwise expressly set forth herein, the Administrative
Agent and the Issuing Banks shall not be under any obligation to any
Participating 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 Account Party. Neither the Syndication Agent nor the
Documentation Agent shall have any liabilities, duties or obligations in such
capacity under any of the Loan Documents.
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SECTION 7.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent and
the Issuing Banks shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message, statement,
order or other document or conversation believed 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 Account Party), independent accountants and other experts selected by the
Administrative Agent or any Issuing Bank, as the case may be. The Administrative
Agent shall be fully justified in failing or refusing to take any action under
any Loan Document unless it shall first receive such advice or concurrence of
the Required Banks as it deems appropriate or it shall first be indemnified to
its satisfaction by the Participating Banks 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 Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under any Loan Document in accordance
with a request of the Required Banks, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Participating
Banks.
SECTION 7.5 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default unless the
Administrative Agent has received notice from a Participating Bank, an Issuing
Bank or the Account Party referring to this Agreement, describing such Default
and stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Issuing Banks and the Participating Banks. The
Administrative Agent shall take such action with respect to such Default as
shall be reasonably directed by the Required Banks; PROVIDED that unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable in the best interests of the Participating Banks.
SECTION 7.6 NON-RELIANCE ON ADMINISTRATIVE AGENT, ISSUING BANKS AND OTHER
PARTICIPATING BANKS. Each Participating Bank expressly acknowledges that neither
the Administrative Agent, the Issuing Banks nor any of their respective Related
Parties has made any representations or warranties to it and that no act by the
Administrative Agent or any Issuing Bank hereinafter taken, including any review
of the affairs of the Account Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent or such Issuing Bank to
any Participating Bank. Each Participating Bank represents to the Administrative
Agent and the Issuing Banks that it has, independently and without reliance upon
the Administrative Agent, any Issuing Bank or any other Participating 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 Account Party and made
its own decision to enter into this Agreement. Each Participating Bank also
represents that it will, independently and without reliance upon the
Administrative Agent, any Issuing Bank or any other Participating 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 to make such
63
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Account Party. Except for notices, reports and other documents expressly
required to be furnished to the Banks by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Participating Bank with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Account Party that may come into the possession of the
Administrative Agent or any of its Related Parties.
SECTION 7.7 INDEMNIFICATION. The Participating Banks agree to indemnify
each of the Administrative Agent and the Issuing Banks in its capacity as such
(to the extent not reimbursed by the Account Party and without limiting the
obligation of the Account Party to do so), ratably according to their respective
Commitment Percentages, 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 all amounts arising under this
Agreement) be imposed on, incurred by or asserted against the Administrative
Agent or any Issuing Bank in any way relating to or arising out of this
Agreement, any Letter of Credit, any other Loan Document 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
Administrative Agent or such Issuing Bank under or in connection with any of the
foregoing; PROVIDED that no Participating Bank shall be liable for the payment
of any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's or any Issuing Bank's gross negligence or willful
misconduct. The agreements in this Section shall survive the termination of this
Agreement and the payment of all amounts payable hereunder.
SECTION 7.8 ADMINISTRATIVE AGENT AND ISSUING BANKS IN INDIVIDUAL CAPACITY.
The Administrative Agent and each Issuing Bank and their respective affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Account Party as though the Administrative Agent was not the
Administrative Agent hereunder and such Issuing Bank was not an Issuing Bank
hereunder. The Administrative Agent and each Issuing Bank shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Participating Bank and may exercise the same as though it were not the
Administrative Agent or an Issuing Bank, and the terms "PARTICIPATING BANK" and
"PARTICIPATING BANKS" shall include the Administrative Agent and each Issuing
Bank (to the extent applicable) in their individual capacity.
SECTION 7.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon ten (10) days' notice to the Banks and the
Account Party. If the Administrative Agent shall resign as Administrative Agent
under this Agreement, then the Required Banks shall appoint from among the
Participating Banks a successor agent for the Participating Banks, which
successor agent shall be approved by the Account Party (PROVIDED that such
approval shall not be required upon the occurrence and during the continuance of
an Event of Default), whereupon such successor agent shall succeed to the
rights, powers and duties of the
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Administrative Agent, and the term "ADMINISTRATIVE AGENT" shall mean such
successor agent effective upon its appointment, and the former Administrative
Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement.
ARTICLE 8
MISCELLANEOUS
SECTION 8.1 AMENDMENTS AND WAIVERS. Neither this Agreement nor any other
Loan Document may be amended, supplemented or modified except in accordance with
the provisions of this Section. With the written consent of the Required Banks,
the Administrative Agent and the Account Party may, from time to time, enter
into written amendments, supplements or modifications of any Loan Document for
the purpose of adding any provisions to such Loan Document or changing in any
manner the rights of the Participating Banks, the Issuing Banks or of the
Account Party hereunder or thereunder or waiving, on such terms and conditions
as the Required Banks may specify in such instrument, any of the requirements of
such Loan Document or any Default and its consequences; PROVIDED, HOWEVER, that
no amendment, waiver or consent shall, unless in writing and signed by all of
the Participating Banks, do any of the following: (a) waive, modify or eliminate
any of the conditions specified in Section 4.1, (b) increase or decrease the
Commitment of any Participating Bank (except for a ratable decrease in
Commitments of all Participating Banks) or subject any Participating Bank to any
additional obligations, (c) reduce the principal of, or interest on, the
Reimbursement Obligations or any fees or other amounts payable hereunder (other
than any fees payable to the Administrative Agent, any Issuing Bank, the
Syndication Agent or the Documentation Agent pursuant to the Agency Fee Letters,
any Issuing Bank Agreement or Section 2.3(c)), (d) extend the Termination Date
or postpone any date fixed for any payment of principal of, or interest on, any
Reimbursement Obligations or any fees or other amounts payable hereunder (other
than any fees payable to the Administrative Agent, any Issuing Bank, the
Syndication Agent or the Documentation Agent pursuant to the Agency Fee Letters,
any Issuing Bank Agreement or Section 2.3(c)), (e) amend, modify or waive the
definition of "REQUIRED BANKS" contained in Section 1.1 or otherwise change the
percentage of the Commitments or of the participations in the aggregate
outstanding Letter of Credit Liabilities, or the number of Participating Banks,
which shall be required for the Participating Banks or any of them to take any
action hereunder, (f) amend this Agreement or any other Loan Document in a
manner intended to prefer one or more Participating Banks over any other
Participating Banks, (g) release all or any portion of any cash collateral held
in the Cash Collateral Account (or any other similar account) other than in
accordance with the terms of this Agreement, (h) release any Guarantee of a
Subsidiary Guarantor that guaranties the obligations of the Account Party
hereunder, (i) amend, waive or modify this Section 8.1, or (j) amend, waive or
modify the last sentence of Section 2.1(a); and PROVIDED, FURTHER, that no
amendment, waiver or
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consent shall, unless in writing and signed by the Administrative Agent in
addition to the Participating Banks required above to take such action, affect
the rights or duties of the Administrative Agent under this Agreement or any
other Loan Document; and PROVIDED, FURTHER, that no amendment, waiver or consent
shall, unless in writing and signed by each Issuing Bank in addition to the
Participating Banks required above to take such action, affect the rights or
duties of such Issuing Bank under this Agreement or any other Loan Document; and
PROVIDED, FURTHER, that any agreement entered into pursuant to Section 2.3(c)
may be amended, supplemented or otherwise modified by the parties thereto. Any
such waiver and any such amendment, supplement or modification shall apply
equally to each of the Participating Banks and shall be binding upon the Account
Party, the Participating Banks, the Issuing Banks and the Administrative Agent.
In the case of any waiver, the Account Party, the Participating Banks, the
Issuing Banks and the Administrative Agent shall be restored to their former
position and rights hereunder, and any Default waived shall be deemed to be
cured and not continuing, but only to the extent so waived; but no such waiver
shall extend to any subsequent or other Default or impair any right consequent
thereon.
SECTION 8.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy, telegraph or telex), and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered by hand, or five
(5) days after being deposited in the mail, postage prepaid, or, in the case of
telecopy notice, when received, or, in the case of telegraphic notice, when
delivered to the telegraph company, or, in the case of telex notice, when sent,
answerback received, addressed as follows or to such other address as may be
hereafter notified by the respective parties hereto:
Account Party: The AES Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Administrative Agent: Union Bank of California, N.A.
Power and Utilities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Each Issuing Bank: As set forth in the Issuing Bank Agreement to
which it is a party
Each Participating Bank As set forth in Schedule I hereto or in the
Commitment Transfer Supplement to which it is
a party;
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PROVIDED that any notice, request or demand to or upon the Administrative Agent
or the Participating Banks pursuant to Article 2 shall not be effective until
received.
SECTION 8.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent, any Issuing Bank
or any Participating Bank, any right, remedy, power or privilege hereunder or
under any other Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder or
under any other Loan Document 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.
SECTION 8.4 PAYMENT OF EXPENSES AND TAXES; GENERAL INDEMNITY. (a) The
Account Party shall pay (i) all out-of-pocket expenses of the Administrative
Agent, including reasonable fees and disbursements of special counsel for the
Administrative Agent, in connection with the preparation and administration of
this Agreement and the other Loan Documents, any waiver or consent hereunder or
any amendment hereof or any Default or alleged Default hereunder and (ii) if an
Event of Default occurs, all out-of-pocket expenses incurred by the
Administrative Agent, each Issuing Bank and each Participating Bank, including
(without duplication) the fees and disbursements of outside counsel and the
allocated cost of inside counsel, in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom.
(b) The Account Party agrees to indemnify the Administrative Agent, the
Syndication Agent, the Documentation Agent, each Issuing Bank and each
Participating Bank, and the Related Parties of the foregoing (each an
"INDEMNITEE") and hold each Indemnitee harmless from and against any and all
liabilities, losses, damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of counsel, which may be
incurred by such Indemnitee in connection with any investigative, administrative
or judicial proceeding (whether or not such Indemnitee shall be designated a
party thereto) brought or threatened relating to or arising out of this
Agreement or any actual or proposed use of proceeds of Letters of Credit or the
issuance or deemed issuance of any Letter of Credit; PROVIDED that no Indemnitee
shall have the right to be indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction.
(c) The Account Party's obligations under this Section 8.4 shall survive
the repayment of all amounts owing to the Participating Banks, the Issuing
Banks, the Administrative Agent, the Syndication Agent and the Documentation
Agent under the Loan Documents and the termination of the Commitments. If and to
the extent that the obligations of the Account Party under this Section 8.4 are
unenforceable for any reason, the Account Party agrees to make the maximum
contribution to the payment and satisfaction thereof which is permissible under
applicable law.
SECTION 8.5 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING BANKS. (a)
The provisions of this Agreement shall be binding upon and inure to the benefit
of
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the parties hereto and their respective successors and assigns, except that the
Account Party may not assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all Banks.
(b) Any Participating Bank may at any time grant to one or more banks or
other institutions (each, a "PARTICIPANT") participating interests in its
Commitment or any or all of its participating interests in Letter of Credit
Liabilities. In the event of any such grant by a Participating Bank of a
participating interest to a Participant, whether or not upon notice to the
Account Party, the Issuing Banks and the Administrative Agent, such
Participating Bank shall remain responsible for the performance of its
obligations hereunder, and the Account Party, the Issuing Banks and the
Administrative Agent shall continue to deal solely and directly with such
Participating Bank in connection with such Participating Bank's rights and
obligations under this Agreement. Any agreement pursuant to which any
Participating Bank may grant such a participating interest shall provide that
such Participating Bank shall retain the sole right and responsibility to
enforce the obligations of the Account Party hereunder including, without
limitation, the right to approve any amendment, modification or waiver of any
provision of this Agreement or any other Loan Document; PROVIDED that such
participation agreement may provide that such Participating Bank will not agree
to any modification, amendment or waiver of this Agreement described in clause
(b), (c), (d), (g) or (h) of Section 8.1 without the consent of the Participant.
The Account Party agrees that each Participant shall, to the extent provided in
its participation agreement, be entitled to the benefits of Sections 2.8 and 2.9
with respect to its participating interest. An assignment or other transfer
which is not permitted by subsection (c) or (h) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) Any Participating Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to any
Participating Bank or any affiliate thereof and, with the consent of the Account
Party (which consent of the Account Party shall not be unreasonably withheld or
delayed, and shall not be required upon the occurrence and during the
continuance of an Event of Default), the Issuing Banks and the Administrative
Agent, to one or more additional banks or financial institutions ("PURCHASING
BANKS") all or any part of its rights and obligations under this Agreement
pursuant to a Commitment Transfer Supplement executed by such Purchasing Bank
and such transferor Participating Bank (and, in the case of a Purchasing Bank
that is not then a Participating Bank or an affiliate thereof, by the Account
Party (except as set forth above), the Issuing Banks and the Administrative
Agent) and delivered to the Administrative Agent for its acceptance and
recording in the Register, together with a processing and recordation fee of
$4,000. The amount of the Commitment of the transferor Participating Bank being
transferred pursuant to each such Commitment Transfer Supplement shall in no
event be less than the lesser of the aggregate amount of such Participating
Bank's Commitment and $5,000,000 and shall be an integral multiple of
$1,000,000. Upon such execution, delivery, acceptance and recording, from and
after the Transfer Effective Date determined pursuant to such Commitment
Transfer Supplement, (x) the Purchasing Bank thereunder shall be a party hereto
and, to the extent provided in such Commitment Transfer Supplement, have the
rights and obligations of a Participating
68
Bank hereunder with a Commitment and a Commitment Percentage as set forth
therein, and (y) the transferor Participating Bank thereunder shall, to the
extent provided in such Commitment Transfer Supplement, be released from its
obligations under this Agreement (and, in the case of a Commitment Transfer
Supplement covering all or the remaining portion of a transferor Participating
Bank's rights and obligations under this Agreement, such transferor
Participating Bank shall cease to be a party hereto). Such Commitment Transfer
Supplement shall be deemed to amend this Agreement to the extent, and only to
the extent, necessary to reflect the addition of such Purchasing Bank and the
resulting adjustment of Commitment Percentages arising from the purchase by such
Purchasing Bank of all or a portion of the rights and obligations of such
transferor Participating Bank under this Agreement.
(d) The Administrative Agent shall maintain at its address referred to in
Section 8.2 a copy of each Commitment Transfer Supplement delivered to it and a
register (the "REGISTER") for the recordation of the names and addresses of the
Participating Banks and the Commitment of each Participating Bank from time to
time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Account Party, the Administrative Agent, the Issuing
Banks and the Participating Banks may treat each Person whose name is recorded
in the Register as the owner of the Commitment recorded therein for all purposes
of this Agreement. The Register shall be available for inspection by the Account
Party, any Issuing Bank or any Participating Bank at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly executed Commitment Transfer Supplement, the
Administrative Agent shall (i) promptly accept such Commitment Transfer
Supplement, and (ii) on the Transfer Effective Date determined pursuant thereto
record the information contained therein in the Register and give notice of such
acceptance and recordation to the Issuing Banks, the Participating Banks and the
Account Party.
(f) The Account Party authorizes each Participating Bank to disclose to any
Participant or Purchasing Bank (each, a "TRANSFEREE") and any prospective
Transferee any and all financial information in such Participating Bank's
possession concerning the Account Party and its Affiliates and Subsidiaries
which has been delivered to such Participating Bank by or on behalf of the
Account Party pursuant to this Agreement or which has been delivered to such
Participating Bank by or on behalf of the Account Party in connection with such
Participating Bank's credit evaluation of the Account Party and its Affiliates
and Subsidiaries prior to becoming a party to this Agreement; PROVIDED, that,
prior to any such disclosure, the Transferee or prospective Transferee shall
agree to preserve the confidentiality of any such information received by it
from such Participating Bank.
(g) If, pursuant to this Section, any interest in this Agreement is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any state thereof, the transferor
Participating Bank shall cause such Transferee, concurrently with the
effectiveness of such transfer, (i) to represent to the transferor Participating
Bank (for the benefit of the transferor Participating Bank, the Administrative
Agent and the Account Party) that under applicable law and treaties no
69
taxes will be required to be withheld by the Administrative Agent, the Account
Party or the transferor Participating Bank with respect to any payments to be
made to such Transferee hereunder, (ii) to furnish to the transferor
Participating Bank (and, in the case of any Purchasing Bank registered in the
Register, the Administrative Agent and the Account Party) either U.S. Internal
Revenue Service Form W-8BEN or U.S. Internal Revenue Service Form W-8ECI
(wherein such Transferee claims entitlement to complete exemption from U.S.
federal withholding tax on all interest payments hereunder) and (iii) to agree
(for the benefit of the transferor Participating Bank, the Administrative Agent
and the Account Party) to provide the transferor Participating Bank (and, in the
case of any Purchasing Bank registered in the Register, the Administrative Agent
and the Account Party) a new Form W-8BEN or W-8ECI upon the expiration or
obsolescence of any previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and amendments duly
executed and completed by such Transferee, and to comply from time to time with
all applicable U.S. laws and regulations with regard to such withholding tax
exemption.
(h) Nothing herein shall prohibit any Participating Bank from pledging or
assigning its Commitment or its participation interest in any Reimbursement
Obligations it to any Federal Reserve Bank in accordance with applicable law. No
such pledge or assignment shall release the assigning Participating Bank from
its obligations hereunder.
(i) No Transferee shall be entitled to receive any greater payment under
Section 2.8 or 2.9 than the transferor Participating Bank would have been
entitled to receive with respect to the rights transferred, unless such transfer
is made with the Account Party's prior written consent or by reason of the
provisions of Section 2.8 or 2.9 requiring such transferor Participating Bank to
designate a different lending office through which it participates in Letters of
Credit hereunder under certain circumstances or at a time when the circumstances
giving rise to such greater payment did not exist.
SECTION 8.6 SET-OFF. In addition to any rights and remedies of the Issuing
Banks and the Participating Banks provided by law, each Issuing Bank and
Participating Bank shall have the right, without prior notice to the Account
Party, any such notice being expressly waived by the Account Party to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Account Party 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 Issuing Bank or such Participating
Bank or any affiliate, branch or agency thereof to or for the credit or the
account of the Account Party. Each Issuing Bank and Participating Bank agrees
promptly to notify the Account Party and the Administrative Agent after any such
set-off and application made by such Issuing Bank or such Participating Bank, as
the case may be, PROVIDED that the failure to give such notice shall not affect
the validity of such set-off and application.
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SECTION 8.7 ISSUING BANKS NOT LIABLE. As between the Administrative Agent,
the Issuing Banks and the Participating Banks on the one hand, and the Account
Party on the other, the Account Party assumes all risks of the acts or omissions
of the beneficiary or transferee of any Letter of Credit with respect to its use
of such Letter of Credit. Neither the Administrative Agent, any Issuing Bank,
any Participating Bank, nor any of their respective Related Parties shall be
liable or responsible for: (a) the use which may be made of any Letter of Credit
or any acts or omissions of the beneficiary or any transferee thereof in
connection therewith; (b) the validity, sufficiency or genuineness of documents,
or of any endorsement(s) thereon, even if such documents should prove to be in
any or all respects invalid, insufficient, fraudulent or forged; (c) payment by
any Issuing Bank against presentation of documents which do not comply with the
terms of any Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, EXCEPT that the Account Party shall have a claim against the
applicable Issuing Bank, and such Issuing Bank shall be liable to the Account
Party, to the extent, but only to the extent, of any direct, as opposed to
consequential or special, damages suffered by the Account Party which the
Account Party proves were caused by (i) such Issuing Bank's willful misconduct
or gross negligence, as determined by a final, nonappealable judgment of a court
of competent jurisdiction, in determining whether documents presented under any
Letter of Credit are genuine or comply with the terms of such Letter of Credit
or (ii) such Issuing Bank's willful or grossly negligent failure, as determined
by the final, nonappealable judgment of a court of competent jurisdiction, to
make lawful payment under any Letter of Credit after the presentation to it by
the beneficiary (or any transferee of such Letter of Credit) of a draft and
other required documentation strictly complying with the terms and conditions of
such Letter of Credit. In furtherance and not in limitation of the foregoing, an
Issuing Bank may accept sight drafts and accompanying documents presented under
a Letter of Credit that appear on their face to be in order, without
responsibility for further investigation.
SECTION 8.8 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement in any number of separate counterparts, 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 Account Party and the Administrative Agent.
SECTION 8.9 SEVERABILITY. It is the intention of the parties that this
Agreement be enforceable to the fullest extent permissible under applicable law,
but that the unenforceability (or modification to conform to such law) of any
provision or provisions hereof shall not render unenforceable, or impair, the
remainder hereof. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, this Agreement shall, as
to such jurisdiction, be deemed amended to modify or delete, as necessary, the
offending provision or provisions and to alter the bounds thereof in order to
render it or them valid and enforceable to the maximum extent permitted by
applicable law, without in any manner affecting the validity or enforceability
of such provision or provisions in any other jurisdiction or the remaining
provisions hereof in any jurisdiction.
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SECTION 8.10 INTEGRATION. This Agreement represents the agreement of the
Account Party, the Administrative Agent, the Issuing Banks and the Participating
Banks with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent, the
Issuing Banks or any Participating Bank relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.
SECTION 8.11 GOVERNING LAW. This Agreement and the rights and obligations
of the parties under this Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.
SECTION 8.12 SUBMISSION TO JURISDICTION; WAIVERS. The Account Party 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, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York,
the United Stated District Court 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
Account Party at its address set forth in Section 8.2 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto; and
(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.
SECTION 8.13 ACKNOWLEDGMENTS. The Account Party 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) none of the Administrative Agent, the Issuing Banks nor any
Participating Bank has any fiduciary relationship to the Account Party, and
the relationship between the Administrative Agent, the Issuing Banks and
the Participating Banks, on the one hand, and the Account Party, on the
other hand, is solely that of creditor and debtor; and
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(c) the Loan Documents do not create or constitute a joint venture
among the Participating Banks or among the Account Party and the
Participating Banks.
SECTION 8.14 JUDGMENT CURRENCY. (a) If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due hereunder or under
any other Loan Document in any currency (the "ORIGINAL CURRENCY") into another
currency (the "OTHER CURRENCY") the parties hereto agree, to the fullest extent
that they may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Administrative Agent
could purchase the Original Currency with the Other Currency at 11:00 a.m. (Los
Angeles time) on the Business Day preceding that on which final judgment is
given.
(b) The obligation of the Account Party in respect of any sum due in the
Original Currency from it to any Bank or the Administrative Agent hereunder or
under any other Loan Document shall, notwithstanding any judgment in any Other
Currency, be discharged only to the extent that on the Business Day following
receipt by such Bank or the Administrative Agent (as the case may be) of any sum
adjudged to be so due in such Other Currency such Bank or the Administrative
Agent (as the case may be) may in accordance with normal banking procedures
purchase the Original Currency with such Other Currency; if the amount of the
Original Currency so purchased is less than the sum originally due to such Bank
or the Administrative Agent (as the case may be) in the Original Currency, the
Account Party agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify such Bank or the Administrative Agent (as the case may
be) against such loss, and if the amount of the Original Currency so purchased
exceeds the sum originally due to any Bank or the Administrative Agent (as the
case may be) in the Original Currency, such Bank or the Administrative Agent (as
the case may be) agrees to remit to the Account Party such excess.
SECTION 8.15 WAIVERS OF JURY TRIAL. THE ACCOUNT PARTY, THE ADMINISTRATIVE
AGENT, THE ISSUING BANKS AND THE PARTICIPATING BANKS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 8.16 DESIGNATED SENIOR DEBT. The Account Party hereby designates
this Agreement and all Debt and other obligations of the Account Party hereunder
and under the other Loan Documents as "Designated Senior Debt", as contemplated
by, and for all purposes under, the Subordinated Note Indentures.
S-1
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.
THE AES CORPORATION
By:_________________________________________
Title:
UNION BANK OF CALIFORNIA, N.A., as
Administrative Agent and a Participating Bank
By:_________________________________________
Title:
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Syndication Agent and a
Participating Bank
By:_________________________________________
Title:
BANK OF AMERICA, N.A., as Documentation
Agent and a Participating Bank
By:_________________________________________
Title:
S-2
PARTICIPATING BANKS
BARCLAYS BANK PLC, NEW YORK BRANCH
By:____________________________________________
Title:
CITIBANK, N.A.
By:____________________________________________
Title:
EXPORT DEVELOPMENT CORPORATION
By:____________________________________________
Title:
THE ROYAL BANK OF SCOTLAND PLC
By:____________________________________________
Title:
THE INDUSTRIAL BANK OF JAPAN, LTD.
By:____________________________________________
Title:
S-3
ARAB AMERICAN BANK
By:____________________________________________
Title:
By:____________________________________________
Title:
BANKBOSTON, N.A.
By:____________________________________________
Title:
THE BANK OF NOVA SCOTIA
By:____________________________________________
Title:
BAYERISCHE LANDESBANK
GIROZENTRALE
By:____________________________________________
Title:
By:____________________________________________
Title:
THE CHASE MANHATTAN BANK
By:____________________________________________
Title:
▇-▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, N.A.
By:____________________________________________
Title:
NATIONAL BANK OF EGYPT
INTERNATIONAL LIMITED
By:____________________________________________
Title:
By:____________________________________________
Title: