Exhibit 10b(5)
EXECUTION COPY
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$500,000,000
(364-DAY FACILITY)
CREDIT AGREEMENT
Dated as of November 13, 2001
PROGRESS ENERGY, INC.
(Borrower)
and
THE BANKS LISTED ON THE SIGNATURE PAGES HEREOF
(Banks)
and
CITIBANK, N.A.
(Administrative Agent)
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▇.▇. ▇▇▇▇▇▇ SECURITIES INC. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
(Joint Lead Arrangers)
JPMORGAN CHASE BANK
(Syndication Agent)
BANK OF AMERICA, N.A.,
THE BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
and
BANK ONE, NA
(Co-Documentation Agents)
TABLE OF CONTENTS
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Section Page
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms........................................................1
SECTION 1.02. Computation of Time Periods.................................................12
SECTION 1.03. Accounting Terms............................................................12
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances...............................................................12
SECTION 2.02. Making the Advances.........................................................12
SECTION 2.03. Fees........................................................................14
SECTION 2.04. Reduction of the Commitments................................................14
SECTION 2.05. Repayment of Advances.......................................................15
SECTION 2.06. Interest on Advances........................................................16
SECTION 2.07. Additional Interest on Eurodollar Rate Advances.............................16
SECTION 2.08. Interest Rate Determination.................................................16
SECTION 2.09. Voluntary Conversion of Advances............................................18
SECTION 2.10. Prepayments of Advances.....................................................18
SECTION 2.11. Increased Costs.............................................................19
SECTION 2.12. Illegality..................................................................19
SECTION 2.13. Payments and Computations...................................................20
SECTION 2.14. Sharing of Payments, Etc....................................................21
SECTION 2.15. Extension of Commitment Termination Date...................................21
SECTION 2.16. Term Loan Conversion Option.................................................23
ARTICLE III CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Closing.............................................24
SECTION 3.02. Conditions Precedent to Each Borrowing and to the Exercise of the Term
Loan Conversion Option..................................................25
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower..............................25
ARTICLE V COVENANTS OF THE COMPANY
SECTION 5.01. Affirmative Covenants.......................................................27
SECTION 5.02. Negative Covenants..........................................................30
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ARTICLE VI EVENTS OF DEFAULT
SECTION 6.01. Events of Default...........................................................31
ARTICLE VII THE AGENT
SECTION 7.01. Authorization and Action....................................................33
SECTION 7.02. The Agent's Reliance, Etc...................................................33
SECTION 7.03. The Administrative Agent and its Affiliates.................................34
SECTION 7.04. Lender Credit Decision......................................................34
SECTION 7.05. Indemnification.............................................................34
SECTION 7.06. Successor Administrative Agent..............................................34
ARTICLE VIII MISCELLANEOUS
SECTION 8.01. Amendments, Etc.............................................................35
SECTION 8.02. Notices, Etc................................................................36
SECTION 8.03. No Waiver; Remedies.........................................................36
SECTION 8.04. Costs, Expenses, Taxes and Indemnification..................................36
SECTION 8.05. Right of Set-off............................................................39
SECTION 8.06. Binding Effect..............................................................39
SECTION 8.07. Assignments and Participations..............................................39
SECTION 8.08. Governing Law...............................................................43
SECTION 8.09. WAIVER OF JURY TRIAL........................................................43
SECTION 8.10. Execution in Counterparts...................................................44
SECTION 8.11. Severability................................................................44
SECTION 8.12. Headings....................................................................44
SECTION 8.13. Entire Agreement............................................................44
SCHEDULES
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Schedule I - List of Commitments and Applicable Lending Offices
Schedule II - Permitted Existing Indebtedness
EXHIBITS
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A-1 Form of Notice of Borrowing
A-2 Form of Notice of Conversion
B Form of Assignment and Acceptance
C-1 Form of Opinion of General Counsel to the Borrower
C-2 Form of Opinion of Special Counsel for the Borrower
C-3 Form of Opinion of General Counsel to the Borrower upon Extension of the
Commitment Termination Date or Exercise of the Term Loan Conversion Option
C-4 Form of Opinion of Special Counsel for the Borrower upon Extension of the
Commitment Termination Date or Exercise of the Term Loan Conversion Option
D Form of Opinion of Counsel for the Administrative Agent and the Arrangers
E Form of Request for Extension of Commitment Termination Date
F Form of Term Loan Conversion Notice
G Form of Compliance Certificate
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CREDIT AGREEMENT
Dated as of November 13, 2001
This CREDIT AGREEMENT (this "Agreement") is made by PROGRESS ENERGY, INC.,
a North Carolina corporation (the "Borrower"), the banks listed on the signature
pages hereof (the "Banks") and CITIBANK, N.A. ("Citibank"), as administrative
agent (the "Administrative Agent") for the Lenders (as hereinafter defined).
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms.
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Additional Lender" shall have the meaning assigned such term in Section
2.04(b).
"Administrative Agent" has the meaning specified in the introductory
paragraph of this Agreement.
"Advance" means an advance by a Lender to the Borrower as part of a
Borrowing and refers to a Base Rate Advance or a Eurodollar Rate Advance, each
of which shall be a "Type" of Advance.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by, or is under common control with such
Person or is a director or officer of such Person.
"Applicable Lending Office" means, with respect to each Lender, (i) such
Lender's Domestic Lending Office in the case of a Base Rate Advance, or (ii)
such Lender's Eurodollar Lending Office, in the case of a Eurodollar Rate
Advance.
"Applicable Margin" means for each Type of Advance at all times during
which any Applicable Rating Level set forth below is in effect, the interest
rate per annum set forth below next to such Applicable Rating Level :
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Applicable Margin Applicable Margin
Applicable for Eurodollar for Base Rate
Rating Level Rate Advances Advances
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1 0.295% 0%
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2 0.410% 0%
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3 0.650% 0%
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4 0.750% 0%
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5 0.950% 0%
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6 1.300% 0%
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provided, that
(i) the Applicable Margins for Eurodollar Rate Advances set forth
above for each Applicable Rating Level shall increase by 0.125% at any time
following the exercise of the Term Loan Conversion Option,
(ii) the Applicable Margins for Eurodollar Rate Advances set forth
above for each Applicable Rating Level shall increase at any time the
aggregate principal amount of Advances outstanding is greater than 33% of
the aggregate Commitments by 0.125% at Levels 1, 2, 3, 4 and 5 and by
0.250% at ▇▇▇▇▇ ▇,
(▇▇▇) the Applicable Margins set forth above for each Applicable
Rating Level shall increase upon the occurrence and during the continuance
of any Event of Default by 2.0%, and
(iv) any change in the Applicable Margin resulting from a change in
the Applicable Rating Level shall become effective upon the date of
announcement of a change in the ▇▇▇▇▇'▇ Rating or the S&P Rating that
results in a change in the Applicable Rating Level.
"Applicable Rating Level" at any time shall be determined in accordance
with the then-applicable S&P Rating and the then-applicable ▇▇▇▇▇'▇ Rating as
follows:
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S&P Rating/▇▇▇▇▇'▇
Rating Applicable Rating Level
------------------------------------------------------
A or higher or A2 or
higher 1
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A- or A3 2
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BBB+ or Baa1 3
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BBB or Baa2 4
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BBB- and Baa3 5
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lower than BBB- and Baa3
or unrated 6
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In the event that the S&P Rating and the ▇▇▇▇▇'▇ Rating are not at the same
Applicable Rating Level but differ by only one Applicable Rating Level, then the
higher of the two ratings shall determine the Applicable Rating Level. In the
event that the S&P Rating and the ▇▇▇▇▇'▇ Rating differ by more than one
Applicable Rating Level, then the Applicable Rating Level immediately below the
higher of the two ratings shall be the Applicable Rating Level. The Applicable
Rating Level shall be redetermined on the date of announcement of a change in
the S&P Rating or the ▇▇▇▇▇'▇ Rating.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an Eligible Assignee, and accepted by the Administrative Agent,
in substantially the form of Exhibit B hereto.
"Banks" has the meaning specified in the introductory paragraph of this
Agreement.
"Base Rate" means, for any Interest Period or any other period, a
fluctuating interest rate per annum as shall be in effect from time to time,
which rate per annum shall at all times be equal to the higher from time to time
of:
(i) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate; and
(ii) 1/2 of one percent per annum above the Federal Funds Rate in
effect from time to time.
"Base Rate Advance" means an Advance that bears interest as provided in
Section 2.06(a).
"Borrower" has the meaning specified in the introductory paragraph of this
Agreement.
"Borrowing" means a borrowing consisting of simultaneous Advances of the
same Type made by each of the Lenders pursuant to Section 2.01 or Converted
pursuant to Section 2.08 or 2.09.
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"Business Day" means a day of the year on which banks are not required or
authorized to close at the principal office of any Lender and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market.
"Change of Control" means the occurrence, after the date of this Agreement,
of (i) any Person or "group" (within the meaning of Rule 13(d) or 14(d) of the
Securities and Exchange Commission under the Exchange Act), directly or
indirectly, acquiring beneficial ownership of or control over securities of the
Borrower (or other securities convertible into such securities) representing 30%
or more of the combined voting power of all securities of the Borrower entitled
to vote in the election of directors.
"Citibank" has the meaning specified in the introductory paragraph of this
Agreement.
"Commitment" has the meaning specified in Section 2.01.
"Commitment Increase" shall have the meaning assigned such term in Section
2.04(b).
"Commitment Increase Approvals" means any governmental approval, resolution
of the Board of Directors of the Borrower or resolution of the Board of
Directors of any Subsidiary not obtained by or on behalf of the Borrower or such
Subsidiary, as applicable, and in full force and effect on the date hereof,
which governmental approval or resolution is required to be obtained in order to
authorize the Commitment Increase and the performance by the Borrower and the
Subsidiaries of their respective obligations under this Agreement after giving
effect to the Commitment Increase.
"Commitment Termination Date" means, with respect to a Lender, the earlier
to occur of (i) the Extension Date, or as to any Lender that has extended its
Commitment pursuant to Section 2.15, such later date that may be established
pursuant to Section 2.15, and (ii) the date of termination in whole of the
Commitments pursuant to Section 2.04 or 6.01.
"Consolidated" refers to the consolidation of the accounts of the Borrower
and its subsidiaries in accordance with generally accepted accounting
principles, including principles of consolidation, consistent with those applied
in the preparation of the financial statements referred to in Section 4.01(e).
"Convert", "Conversion" and "Converted" each refers to a conversion of
Advances of one Type into Advances of another Type, or the selection of a new,
or the renewal of the same, Interest Period for Eurodollar Rate Advances,
pursuant to Section 2.08(g) or 2.09.
"CP&L" means the Carolina Power & Light Company.
"Declining Lender" has the meaning assigned to that term in Section 2.15.
"Domestic Lending Office" means, with respect to any Lender, the office of
such Lender specified as its "Domestic Lending Office" opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender, or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative Agent.
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"Eligible Assignee" means (i) any other Lender or any Affiliate of a Lender
meeting the criteria set forth in clause (ii) hereof and (ii) (A) any other
commercial bank organized under the laws of the United States, or any State
thereof, and having a combined capital and surplus of at least $250,000,000 (as
established in its most recent report of condition to its primary regulator),
(B) a savings and loan association or savings bank organized under the laws of
the United States, or any State thereof, and having a combined capital and
surplus of at least $250,000,000 (as established in its most recent report of
condition to its primary regulator), (C) a commercial bank organized under the
laws of any other country that is a member of the OECD or has concluded special
lending arrangements with the International Monetary Fund associated with its
General Arrangements to Borrow of the Cayman Islands, or a political subdivision
of any such country, and having a combined capital and surplus of at least
$250,000,000 (as established in its most recent report of condition to its
primary regulator); provided that such bank is acting through a branch or agency
located in the United States or in the country in which it is organized or
another country that is described in this clause (C), (D) the central bank of
any country that is a member of the OECD, or (E) a finance company, insurance
company or other financial institution or fund (whether a corporation,
partnership or other entity) that is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business, whose
outstanding unsecured indebtedness is rated AA- or better by S&P or Aa3 or
better by ▇▇▇▇▇'▇ (or an equivalent rating by another nationally-recognized
credit rating agency of similar standing if neither of such corporations is then
in the business of rating unsecured indebtedness).
"Environmental Laws" means any federal, state or local laws, ordinances or
codes, rules, orders, or regulations relating to pollution or protection of the
environment, including, without limitation, laws relating to hazardous
substances, laws relating to reclamation of land and waterways and laws relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollution, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to each Lender, the office
of such Lender specified as its "Eurodollar Lending Office" opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar Rate
Advance comprising part of the same Borrowing an interest rate per annum equal
to the average (rounded upward to the nearest whole multiple of 1/8 of 1% per
annum, if such average is not such a multiple) of the rates per annum at which
deposits in U.S. dollars are offered by the principal
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office of each of the Reference Banks in London, England to prime banks in the
London Interbank market at 11:00 A.M. (London time) two Business Days before the
first day of such Interest Period for a period equal to such Interest Period and
in an amount substantially equal to the amount of such Eurodollar Rate Advance
comprising part of such Borrowing to be outstanding during such Interest Period
from such Reference Bank. The Eurodollar Rate for the Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing shall be
determined by the Administrative Agent on the basis of the applicable rates
furnished to and received by the Administrative Agent from the Reference Banks
two Business Days before the first day of such Interest Period, subject,
however, to the provisions of Section 2.08.
"Eurodollar Rate Advance" means an Advance that bears interest as provided
in Section 2.06(b).
"Eurodollar Rate Reserve Percentage" of any Lender for the Interest Period
for any Eurodollar Rate Advance means the reserve percentage applicable during
such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term equal
to such Interest Period.
"Events of Default" has the meaning assigned to that term in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, and the
regulations promulgated thereunder, in each case as amended and in effect from
time to time.
"Existing Credit Facilities" means, collectively, (i) the $3,750,000,000
364-Day Credit Agreement, dated as of November 15, 2000, as amended to the date
hereof, among the Borrower, the lenders named therein, and Citibank, N.A., as
agent for said lenders, (ii) the Fourth Amended and Restated Credit Agreement A,
dated as of November 14, 2000, among Progress Capital, the Lenders identified
therein and The Chase Manhattan Bank, as Agent, (iii) the Third Amended and
Restated Credit Agreement B, dated as of November 17, 1998, as amended by a
First Amendment, dated as of November 14, 2000, among Progress Capital, the
Lenders identified therein and The Chase Manhattan Bank, as Agent, and (iv) the
Credit Agreement C, dated as of July 13, 2000, as amended by a First Amendment,
dated as of November 14, 2000, among Progress Capital, the Lenders identified
therein and The Chase Manhattan Bank, as Agent.
"Extending Commitment Lender" has the meaning assigned to that term in
Section 2.15(b).
"Extension Date" means the 364th day following the date of this Agreement.
"Facility Fee Percentage" means, at all times during which any Applicable
Rating Level set forth below is in effect, the rate per annum set forth below
next to such Applicable Rating Level:
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Applicable Facility Fee
Rating Level Percentage
------------------------------
1 0.080%
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2 0.090%
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3 0.100%
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4 0.125%
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5 0.175%
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6 0.200%
------------------------------
provided, that a change in the Facility Fee Percentage resulting from a change
in the Applicable Rating Level shall become effective upon the date of
announcement of a change in the ▇▇▇▇▇'▇ Rating or the S&P Rating that results in
a change in the Applicable Rating Level.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"First Mortgage Bonds" means those bonds issued from time to time by CP&L
pursuant to the Mortgage.
"Florida Power" means Florida Power Corporation.
"Florida Power Mortgage" means the Indenture, dated as of January 1, 1944,
between Florida Power, Guaranty Trust Company of New York and the Florida
National Bank of Jacksonville, as modified, amended or supplemented from time to
time.
"Florida Power Mortgage Bonds" means those bonds issued from time to time
by Florida Power pursuant to the Florida Power Mortgage.
"FPC" means Florida Progress Corporation.
"GenCo Financing" means up to $500,000,000 original principal amount of
Indebtedness incurred by or created for the benefit of Progress GenCo Ventures,
LLC, an indirect wholly owned Subsidiary of the Borrower, secured by liens and
security interests on the property of Progress Ventures, Inc. and its
Subsidiaries, including Progress GenCo Ventures, LLC, as to which neither the
Borrower nor any Subsidiary of the Borrower that is not also a Subsidiary of
Progress Ventures, Inc. shall be liable.
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"Guaranty" of any Person means any obligation, contingent or otherwise, of
such Person (i) to pay any Liability of any other Person or to otherwise
protect, or having the practical effect of protecting, the holder of any such
Liability against loss (whether such obligation arises by virtue of such Person
being a partner of a partnership or participant in a joint venture or by
agreement to pay, to keep well, to purchase assets, goods, securities or
services or to take or pay, or otherwise) or (ii) incurred in connection with
the issuance by a third Person of a Guaranty of any Liability of any other
Person (whether such obligation arises by agreement to reimburse or indemnify
such third Person or otherwise). The word "Guarantee" when used as a verb has
the correlative meaning.
"Increasing Lender" shall have the meaning assigned such term in Section
2.04(b).
"Indebtedness" of any Person means (i) any obligation of such Person for
borrowed money, (ii) any obligation of such Person evidenced by a bond,
debenture, note or other similar instrument, (iii) any obligation of such Person
to pay the deferred purchase price of property or services, except a trade
account payable that arises in the ordinary course of business but only if and
so long as the same is payable on customary trade terms, (iv) any obligation of
such Person as lessee under a capital lease, (v) any Mandatorily Redeemable
Stock of such Person (the amount of such Mandatorily Redeemable Stock to be
determined for this purpose as the higher of the liquidation preference and the
amount payable upon redemption of such Mandatorily Redeemable Stock), (vi) any
obligation of such Person to purchase securities or other property that arises
out of or in connection with the sale of the same or substantially similar
securities or property, (vii) any non-contingent obligation of such Person to
reimburse any other Person in respect of amounts paid under a letter of credit
or other Guaranty issued by such other Person to the extent that such
reimbursement obligation remains outstanding after it becomes non-contingent,
(viii) any Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) a
mortgage, lien, pledge, charge or other encumbrance on any asset of such Person,
(ix) any Liabilities in respect of unfunded vested benefits under plans covered
by Title IV of ERISA, (x) any Synthetic Lease Obligations of such Person and
(xi) any Indebtedness of others Guaranteed by such Person.
"Interest Period" means, for each Eurodollar Rate Advance comprising part
of the same Borrowing, the period commencing on the date of such Advance or the
date of the Conversion of any Advance into such an Advance and ending on the
last day of the period selected by the Borrower pursuant to the provisions below
and, thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The duration of each
such Interest Period shall be one, two, three or six months, as the Borrower
may, in the Notice of Borrowing given by the Borrower to the Administrative
Agent pursuant to Section 2.02, select; provided, however, that:
(i) the Borrower may not select any Interest Period that ends after
the Commitment Termination Date;
(ii) Interest Periods commencing on the same date for Advances
comprising the same Borrowing shall be of the same duration; and
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(iii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day;
provided that if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day.
The Administrative Agent shall promptly advise each Lender by or telecopy
transmission of each Interest Period so selected by the Borrower.
"Lenders" means the Lenders listed on the signature pages hereof and each
Eligible Assignee that shall become a party hereto pursuant to Section 8.07.
"Liability" of any Person means any indebtedness, liability or obligation
of or binding upon, such Person or any of its assets, of any kind, nature or
description, direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated, whether arising under
contract, applicable law, or otherwise, whether now existing or hereafter
arising.
"Majority Lenders" means at any time Lenders holding at least 66-2/3% of
the aggregate principal amount of the Advances then outstanding, or, if no such
principal amount is then outstanding, Lenders having at least 66-2/3% of the
Commitments (provided that, for purposes hereof, neither the Borrower, nor any
of its Affiliates, if a Lender, shall be included in (i) the Lenders holding
such amount of the Advances or having such amount of the Commitments or (ii)
determining the aggregate unpaid principal amount of the Advances or the total
Commitments).
"Mandatorily Redeemable Stock" means, with respect to any Person, any share
of such Person's capital stock to the extent that it is (i) redeemable, payable
or required to be purchased or otherwise retired or extinguished, or convertible
into any Indebtedness or other Liability of such Person, (A) at a fixed or
determinable date, whether by operation of a sinking fund or otherwise, (B) at
the option of any Person other than such Person or (C) upon the occurrence of a
condition not solely within the control of such Person, such as a redemption
required to be made out of future earnings or (ii) convertible into Mandatorily
Redeemable Stock.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor thereto.
"▇▇▇▇▇'▇ Rating" means, on any date of determination, the debt rating most
recently announced by Moody's with respect to the Borrower's long-term senior
unsecured non-credit-enhanced debt.
"Mortgage" means the Mortgage and Deed of Trust, dated as of May 1, 1940,
from CP&L to The Bank of New York (formerly Irving Trust Company) and to
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (▇.▇. ▇▇▇▇▇▇▇▇▇▇, successor), as modified, amended or
supplemented from time to time.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
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"Notice of Conversion" has the meaning specified in Section 2.09.
"OECD" means the Organization for Economic Cooperation and Development.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a foreign state or
political subdivision thereof or any agency of such state or subdivision.
"Plan" means an employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Borrower or any of its Affiliates and covered by
Title IV of ERISA.
"Progress Capital" means Progress Capital Holdings, Inc.
"Portfolio Transaction" means the sale of Florida Progress's and CP&L's
portfolio of affordable housing investments.
"Rail Transaction" means the sale of substantially all of the assets or
capital stock of Progress Rail Services, Inc.
"Reference Banks" means Citibank and JPMorgan Chase Bank.
"Register" has the meaning specified in Section 8.07(c).
"Responsible Officer" means the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller or any Assistant Treasurer of
the Borrower the signatures of whom, in each case, have been certified to the
Administrative Agent and each other Lender pursuant to Section 3.01(d), or in a
certificate delivered to the Administrative Agent replacing or amending such
certificate. Each Lender may conclusively rely on each certificate so delivered
until it shall have received a copy of a certificate from the Secretary or an
Assistant Secretary of the Borrower amending, canceling or replacing such
certificate.
"S&P" means Standard & Poor's Ratings Group or any successor thereto.
"S&P Rating" means, on any date of determination, the debt rating most
recently announced by S&P with respect to the Borrower's long-term senior
unsecured non-credit-enhanced debt.
"SEC Order" means Order Nos. 35-27440 and 70-9909 of the Securities and
Exchange Commission issued September 20, 2001.
"Significant Subsidiary" means CP&L, FPC, Florida Power, Progress Capital
and any other Subsidiary of the Borrower that at any time constitutes a
"significant subsidiary", as such term is defined in Regulation S-X of the
Securities and Exchange Commission as in effect on the date hereof (17 C.F.R.
Part 210).
"Subsidiary" means, with respect to any Person, any corporation or
unincorporated entity of which more than 50% of the outstanding capital stock
(or comparable interest) having
10
ordinary voting power (irrespective of whether at the time capital stock (or
comparable interest) of any other class or classes of such corporation or entity
shall or might have voting power upon the occurrence of any contingency) is at
the time directly or indirectly owned by said Person (whether directly or
through one or more other Subsidiaries).
"Synthetic Lease" means a lease transaction under which the parties intend
that (i) the lease will be treated as an "operating lease" by the lessee
pursuant to Statement of Financial Accounting Standards No. 13, as amended, and
(ii) the lessee will be entitled to various tax and other benefits ordinarily
available to owners (as opposed to lessees) of like property.
"Synthetic Lease Obligations" means, with respect to any Person, the sum of
(i) all remaining rental obligations of such Person as lessee under Synthetic
Leases that are attributable to principal and, without duplication, (ii) all
rental and purchase price payment obligations of such Person under such
Synthetic Leases assuming such Person exercises the option to purchase the lease
property at the end of the lease term.
"Term Loan Conversion Notice" has the meaning assigned to that term in
Section 2.16.
"Term Loan Conversion Option" means the option of the Borrower to convert
outstanding Advances into a term loan with a maturity of one year in accordance
with Section 2.16.
"Termination Date" means, with respect to all Lenders, the Commitment
Termination Date, unless the Term Loan Conversion Option has been effectively
exercised in accordance with Section 2.16, in which case the Termination Date
means the earliest to occur of (i) the date the Advances become due and payable
in accordance with Section 2.16, (ii) the date of repayment in full of the
Advances pursuant to Section 2.10(b), and (iii) the date of acceleration of the
Borrower's payment obligations hereunder in accordance with Section 6.01.
"Termination Event" means (i) a Reportable Event described in Section 4043
of ERISA and the regulations issued thereunder (other than a Reportable Event
not subject to the provision for 30-day notice to the Pension Benefit Guaranty
Corporation under such regulations), or (ii) the withdrawal of the Borrower or
any of its Affiliates from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or (iii) the
filing of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under Section 4041 of ERISA, or (iv) the institution
of proceedings to terminate a Plan by the Pension Benefit Guaranty Corporation,
or (v) any other event or condition that might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.
"Total Capitalization" means the sum of the value of the common stock,
retained earnings, and preferred and preference stock of the Borrower (in each
case, determined in accordance with generally accepted accounting principles
consistent with those applied in the preparation of the financial statements
referred to in Section 4.01(e)), plus Consolidated Indebtedness of the Borrower.
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SECTION 1.02. Computation of Time Periods.
In this Agreement in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including" and
the words "to" and "until" each means "to but excluding".
SECTION 1.03. Accounting Terms.
All accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles consistent with those
applied in the preparation of the financial statements referred to in Section
4.01(e).
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances.
(a) Each Lender severally agrees, on the terms and conditions hereinafter
set forth, to make Advances to the Borrower from time to time on any Business
Day during the period from the date hereof to and including the Commitment
Termination Date, in an aggregate amount outstanding not to exceed at any time
the amount set forth opposite such Lender's name on Schedule I hereto or, if
such Lender has entered into any Assignment and Acceptance, set forth for such
Lender in the Register maintained by the Administrative Agent pursuant to
Section 8.07(c), as such amount may be reduced pursuant to Section 2.04(a) or
increased pursuant to Section 2.04(b) (such Lender's "Commitment"). Each
Borrowing shall be in an aggregate amount not less than $10,000,000 or an
integral multiple of $1,000,000 in excess thereof and shall consist of Advances
of the same Type made on the same day by the Lenders ratably according to their
respective Commitments. Until the Commitment Termination Date, within the limits
of each Lender's Commitment, the Borrower may from time to time borrow, repay
pursuant to Section 2.05 or prepay pursuant to Section 2.10(b) and reborrow
under this Section 2.01.
(b) Any Lender may request that any Advances made by it be evidenced by one
or more promissory notes. In such event, the Borrower shall prepare, execute and
deliver to such Lender one or more promissory notes payable to the order of such
Lender (or, if requested by such Lender, to such Lender and its assignees) and
in a form approved by the Administrative Agent.
SECTION 2.02. Making the Advances.
(a) Each Borrowing shall be made on notice, given not later than 10:00 A.M.
(New York City time) on the day of such proposed Borrowing, in the case of a
Borrowing comprised of Base Rate Advances, or on the third Business Day prior to
the date of the proposed Borrowing, in the case of a Borrowing comprised of
Eurodollar Rate Advances, by the Borrower to the Administrative Agent, which
shall give to each Lender prompt notice thereof by telecopier. Each such notice
of a Borrowing (a "Notice of Borrowing") shall be by telecopier, confirmed
promptly in writing, in substantially the form of Exhibit A-1 hereto, specifying
therein the
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requested (i) date of such Borrowing, (ii) Type of Advances comprising such
Borrowing, (iii) aggregate amount of such Borrowing, and (iv) in the case of a
Borrowing comprised of Eurodollar Rate Advances, the Interest Period for each
such Advance. In the case of a proposed Borrowing comprised of Eurodollar Rate
Advances, the Administrative Agent shall promptly notify each Lender of the
applicable interest rate under Section 2.06(b). Each Lender shall, before 12:00
P.M. (New York City time) on the date of such Borrowing, make available for the
account of its Applicable Lending Office to the Administrative Agent at its
address referred to in Section 8.02, in same day funds, such Lender's ratable
portion of such Borrowing. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article
III, the Administrative Agent will make such funds available to the Borrower at
the Administrative Agent's aforesaid address.
(b) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower and, in respect of any Borrowing comprised of Eurodollar Rate Advances,
the Borrower shall indemnify each Lender against any loss or expense incurred by
such Lender as a result of any failure by the Borrower to fulfill on or before
the date specified for such Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss (including loss of
anticipated profits) or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.
(c) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay to the Administrative Agent (without
duplication), forthwith on demand, such corresponding amount, together with
interest thereon for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative Agent, at
(x) in the case of the Borrower, the interest rate applicable at the time to
Advances comprising such Borrowing and (y) in the case of such Lender, the
Federal Funds Rate. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender's
Advance as part of such Borrowing for purposes of this Agreement.
(d) The failure of any Lender to make the Advance to be made by it as part
of any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.
(e) If, for any reason, a Borrowing is not made on the date specified in
any Notice of Borrowing, the Administrative Agent hereby agrees to repay to each
Lender the amount, if any, that such Lender has made available to the
Administrative Agent as such Lender's ratable portion
13
of such Borrowing, together with interest thereon for each day from the date
such amount is made available to the Administrative Agent until the date such
amount is repaid to such Lender, at the Federal Funds Rate.
SECTION 2.03. Fees.
(a) The Borrower agrees to pay to the Administrative Agent for the account
of each Lender a facility fee on each Lender's Commitment, irrespective of
usage, from the date hereof, in the case of each Bank, and from the effective
date specified in the Assignment and Acceptance pursuant to which it became a
Lender, in the case of each other Lender, until the Termination Date at the rate
per annum equal to the Facility Fee Percentage from time to time in effect. Such
fee shall be calculated on the basis of actual number of days elapsed in a year
of 365 or 366 days. Such fee shall be payable quarterly in arrears on the last
day of each March, June, September and December during the term of such Lender's
Commitment, and on the Termination Date.
(b) The Borrower agrees to pay to the Administrative Agent an agency fee in
such amounts and payable at such times, as shall be agreed to between them in
writing.
SECTION 2.04. Reduction and Increase of the Commitments.
(a) The Borrower shall have the right, upon at least three Business Days'
notice to the Administrative Agent, irrevocably to terminate in whole or reduce
ratably in part the unused portions of the respective Commitments of the
Lenders; provided that the aggregate amount of the Commitments of the Lenders
shall not be reduced to an amount that is less than the aggregate principal
amount of the Advances then outstanding; and provided, further, that each
partial reduction of Commitments shall be in the aggregate amount of $10,000,000
or an integral multiple of $1,000,000 in excess thereof. Once terminated or
reduced, the Commitments may not be reinstated.
(b) (i) At any time prior to the Termination Date, the Borrower may
increase the aggregate amount of the Commitments by an amount not greater than
$50,000,000 and to an amount not greater than $550,000,000 (any such increase, a
"Commitment Increase") by designating either one or more of the existing Lenders
(each of which, in its sole discretion, may determine whether and to what degree
to offer to participate in such Commitment Increase) or one or more other banks
or other financial institutions reasonably acceptable to the Administrative
Agent that at the time agree, in the case of any such bank or financial
institution that is an existing Lender to increase its Commitment (an
"Increasing Lender") and, in the case of any other such bank or financial
institution (an "Additional Lender"), to become a party to this Agreement. The
sum of the increases in the Commitments of the Increasing Lenders pursuant to
this subsection (b) plus the Commitments of the Additional Lenders upon giving
effect to the Commitment Increase shall not in the aggregate exceed the amount
of the Commitment Increase. The Borrower shall provide prompt notice of any
proposed Commitment Increase pursuant to this Section 2.04(b) to the
Administrative Agent, which shall promptly provide a copy of such notice to the
Lenders.
(ii) Any Commitment Increase shall become effective upon (A) the
receipt by the Administrative Agent of (1) an agreement in form and
substance satisfactory to the
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Administrative Agent signed by the Borrower, each Increasing Lender and
each Additional Lender, setting forth the new Commitment of each such
Lender and setting forth the agreement of each Additional Lender to become
a party to this Agreement and to be bound by all the terms and provisions
hereof binding upon each Lender, (2) certified copies of the Commitment
Increase Approvals and such opinions of counsel for the Borrower with
respect to the Commitment Increase as the Administrative Agent may
reasonably request, and (3) a certificate (the statements contained in
which shall be true) of a duly authorized officer of the Borrower stating
that both before and after giving effect to such Commitment Increase (x) no
Event of Default has occurred and is continuing, (y) all representations
and warranties made by the Borrower in this Agreement are true and correct
in all material respects, and (z) all Commitment Increase Approvals have
been obtained and are in full force and effect, and (B) the funding by each
Increasing Lender and Additional Lender of the Loan(s) to be made by each
such Lender described in paragraph (iii) below.
(iii) Upon the effective date of any Commitment Increase, each
Increasing Lender and each Additional Lender shall provide funds to the
Administrative Agent in the manner described in Section 2.01 in an amount
equal to the product of (x) the aggregate principal amount of Advances
outstanding hereunder, expressed as a percentage of the Commitments
(calculated, in each case, immediately prior to such Commitment Increase)
and (y) the amount of such Lender's Commitment Increase. The funds so
provided by any Lender shall be deemed to be an Advance or Advances made by
such Lender on the date of such Commitment Increase, with such Advance(s)
being (A) in an amount equal to the product of (x) the aggregate
outstanding principal amount of each Advance expressed as a percentage of
the Commitments (calculated, in each case, immediately prior to such
Commitment Increase) and (y) the amount of such Lender's Commitment
Increase and (B) of the same Type(s) and having the same Interest Period(s)
as each Advance described in the preceding clause (A), such that after
giving effect to such Commitment Increase and the Advances(s) made on the
date of such Commitment Increase, each Advance outstanding hereunder shall
consist of Advances made by the Lenders ratably in accordance with their
pro rata shares of the Commitments.
(iv) Notwithstanding any provision contained herein to the contrary,
from and after the date of any Commitment Increase and the making of any
Advances on such date pursuant to paragraph (iii) above, all calculations
and payments of interest on the Advance comprising any Advances shall take
into account the actual Commitment of each Lender and the principal amount
outstanding of each Advance made by such Lender during the relevant period
of time.
SECTION 2.05. Repayment of Advances.
The Borrower shall repay the principal amount of each Advance made by each
Lender on the Termination Date, subject to Section 2.16 hereof.
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SECTION 2.06. Interest on Advances.
The Borrower shall pay interest on the unpaid principal amount of each
Advance made by each Lender from the date of such Advance until such principal
amount shall be paid in full, at the following rates per annum:
(a) Base Rate Advances. If such Advance is a Base Rate Advance, a rate per
annum equal at all times to the Base Rate in effect from time to time, plus the
Applicable Margin, payable quarterly in arrears on the last day of each March,
June, September and December and on the date such Base Rate Advance shall be
paid in full; provided, however, that if and for so long as an Event of Default
has occurred and is continuing, interest on the unpaid principal amount of each
Base Rate Advance shall be payable on demand.
(b) Eurodollar Rate Advances. If such Advance is a Eurodollar Rate Advance,
a rate per annum equal at all times during each Interest Period for such Advance
to the sum of the Eurodollar Rate for such Interest Period, plus the Applicable
Margin for such Eurodollar Rate Advance in effect from time to time, payable on
the last day of such Interest Period and, if such Interest Period for such
Advance has a duration of more than three months, on each day that occurs during
such Interest Period every three months from the first day of such Interest
Period; provided, however, that if and for so long as an Event of Default has
occurred and is continuing, interest on the unpaid amount of each Eurodollar
Rate Advance shall be payable on demand.
SECTION 2.07. Additional Interest on Eurodollar Rate Advances.
The Borrower shall pay to each Lender additional interest on the unpaid
principal amount of each Eurodollar Rate Advance of such Lender, from the date
of such Advance until such principal amount is paid in full, at an interest rate
per annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the Interest Period for such Advance from (ii) the rate
obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period,
payable on each date on which interest is payable on such Advance. All claims
for such additional interest shall be submitted by such Lender to the Borrower
(with a copy to the Administrative Agent) as soon as is reasonably possible and
in all events within 90 days after the first day of such Interest Period;
provided, however, that if a claim is not submitted to the Borrower within such
90-day period, such Lender shall thereby waive its claim to such additional
interest incurred during such 90-day period but not to any such additional
interest incurred thereafter. A certificate as to the amount of such additional
interest, submitted to the Borrower (with a copy to the Administrative Agent) by
such Lender, shall be conclusive and binding for all purposes, absent manifest
error.
SECTION 2.08. Interest Rate Determination.
(a) Each Reference Bank agrees to furnish to the Administrative Agent
timely information for the purpose of determining the Eurodollar Rate. If any
one or more of the Reference Banks shall not furnish such timely information to
the Administrative Agent for determination of any such interest rate, the
Administrative Agent shall determine such interest rate on the basis of timely
information furnished by the remaining Reference Banks.
16
(b) The Administrative Agent shall give prompt notice to the Borrower and
the Lenders of the applicable interest rate determined by the Administrative
Agent for purposes of Section 2.06(a) or (b), and the applicable rate, if any,
furnished by each Reference Bank for determining the applicable interest rate
under Section 2.06(b).
(c) If fewer than two Reference Banks furnish timely information to the
Administrative Agent for determining the Eurodollar Rate for any Eurodollar Rate
Advances,
(i) the Administrative Agent shall forthwith notify the Borrower and
the Lenders that the interest rate cannot be determined for such Eurodollar
Rate Advances,
(ii) each such Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance (or if
such Advance is then a Base Rate Advance, will continue as a Base Rate
Advance), and
(iii) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended until the Administrative
Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist.
(d) If, with respect to any Eurodollar Rate Advances, the Majority Lenders
notify the Administrative Agent that the Eurodollar Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Majority Lenders
of making, funding or maintaining their respective Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders, whereupon
(i) each Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate
Advance, and
(ii) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended until the Administrative
Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist.
(e) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Lenders and
such Advances will automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances.
(f) On the date on which the aggregate unpaid principal amount of Advances
comprising any Borrowing shall be reduced, by prepayment or otherwise, to less
than $20,000,000, such Advances shall, if they are Advances of a Type other than
Base Rate Advances, automatically Convert into Base Rate Advances, and on and
after such date the right of the Borrower to Convert such Advances into Advances
of a Type other than Base Rate Advances shall terminate; provided, however, that
if and so long as each such Advance shall be of the same Type and have the same
Interest Period as Advances comprising another Borrowing or other Borrowings,
and the aggregate unpaid principal amount of all such Advances shall equal
17
or exceed $20,000,000, the Borrower shall have the right to continue all such
Advances as, or to Convert all such Advances into, Advances of such Type having
such Interest Period.
(g) If an Event of Default has occurred and is continuing, (i) each
Eurodollar Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended.
SECTION 2.09. Voluntary Conversion of Advances.
The Borrower may, on any Business Day prior to the Termination Date
(including any date occurring on and after the effectiveness of the Term Loan
Conversion Option), upon notice given to the Administrative Agent not later than
10:00 A.M. (New York City time) on the third Business Day prior to the date of
the proposed Conversion, in the case of any proposed Conversion into Eurodollar
Rate Advances, and on the date of the proposed Conversion, in the case of any
proposed Conversion into Base Rate Advances, and subject to the provisions of
Sections 2.08 and 2.12, Convert all Advances of one Type comprising the same
Borrowing into Advances of another Type; provided, however, that any Conversion
of any Eurodollar Rate Advances into Advances of another Type shall be made on,
and only on, the last day of an Interest Period for such Eurodollar Rate
Advances, except as otherwise provided in Section 2.12. Each such notice of a
Conversion (a "Notice of Conversion") shall be by telecopier, confirmed promptly
in writing, in substantially the form of Exhibit A-2 hereto and shall, within
the restrictions specified above, specify (i) the date of such Conversion, (ii)
the aggregate amount of, Type of, and Interest Periods applicable to the
Advances to be Converted, (iii) the Type of Advance to which such Advances (or
portions thereof) are proposed to be Converted, and (iv) if such Conversion is
into or with respect to Eurodollar Rate Advances, the duration of the Interest
Period for each such Advance.
SECTION 2.10. Prepayments of Advances.
(a) The Borrower shall have no right to prepay any principal amount of any
Advances other than as provided in subsection (b) below.
(b) The Borrower may, upon notice given to the Administrative Agent at
least two Business Days prior to the proposed prepayment, in the case of any
Eurodollar Rate Advance, and on the date of the proposed prepayment, in the case
of any Base Rate Advance, and if such notice is given the Borrower shall, prepay
the outstanding principal amounts of the Advances comprising the same Borrowing
in whole or ratably in part, together with accrued interest to the date of such
prepayment on the amount prepaid and, in the case of any Eurodollar Rate
Advance, any amount payable pursuant to Section 8.04(b); provided, however, that
(i) each partial prepayment shall be in an aggregate principal amount not less
than $5,000,000 and in integral multiples of $1,000,000 in excess thereof and
(ii) in the case of any such prepayment of a Eurodollar Rate Advance, the
Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant
to Section 8.04(b) on the date of such prepayment.
18
SECTION 2.11. Increased Costs.
(a) If, due to either (i) the introduction of or any change (other than any
change by way of imposition or increase of reserve requirements, in the case of
Eurodollar Rate Advances, included in the Eurodollar Rate Reserve Percentage),
in or in the interpretation of any law or regulation, or (ii) the compliance
with any guideline or request from any central bank or other governmental
authority (whether or not having the force of law), there shall be any increase
in the cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon demand
by such Lender (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for account of such Lender additional amounts
sufficient to reimburse such Lender for such increased cost. All claims for
increased cost shall be submitted by such Lender to the Borrower (with a copy to
the Administrative Agent) as soon as is reasonably possible and in all events
within 90 days after such introduction, such change, or the beginning of such
compliance, the occurrence of which resulted in such increased cost, and the
Borrower shall make such payment within five Business Days after notice of such
claim is received; provided, however, that if a claim is not submitted to the
Borrower within such 90-day period, such Lender shall thereby waive its claim to
such increased cost incurred during such 90-day period but not to any such
increased cost incurred thereafter. A certificate as to the amount of such
increased cost, submitted to the Borrower (with a copy to the Administrative
Agent) by such Lender, shall be conclusive and binding for all purposes, absent
manifest error.
(b) If any Lender determines that compliance with any law or regulation or
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender's commitment to lend hereunder and other
commitments of this type, then, upon demand by such Lender (with a copy of such
demand to the Administrative Agent), the Borrower shall immediately pay to the
Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender or such corporation in the light of such circumstances, to the extent
that such Lender reasonably determines such increase in capital to be allocable
to the existence of such Lender's commitment to lend hereunder. All claims for
such additional amounts shall be submitted by such Lender (with a copy to the
Administrative Agent) as soon as is reasonably possible and in all events within
90 days after such determination by such Lender, and the Borrower shall make
such payment within five Business Days after notice of such claim is received;
provided, however, that if a claim is not submitted to the Borrower within such
90-day period, such Lender shall thereby waive its claim to such additional
amounts incurred during such 90-day period but not to any such additional
amounts incurred thereafter. A certificate as to such amounts submitted to the
Borrower and the Administrative Agent by such Lender shall be conclusive and
binding for all purposes, absent manifest error.
SECTION 2.12. Illegality.
Notwithstanding any other provision of this Agreement, if any Lender shall
notify the Administrative Agent that the introduction of or any change in or in
the interpretation of any law
19
or regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for such Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar Rate Advances or
to fund or maintain Eurodollar Rate Advances hereunder, (i) the obligation of
the Lenders to make Eurodollar Rate Advances or to Convert Advances into
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist, and (ii) the Borrower shall forthwith prepay in full
all Eurodollar Rate Advances of all Lenders then outstanding, together with
interest accrued thereon, unless the Borrower, within five Business Days of
notice from the Administrative Agent, Converts all Eurodollar Rate Advances of
all Lenders then outstanding into Advances of another Type in accordance with
Section 2.09.
SECTION 2.13. Payments and Computations.
(a) The Borrower shall make each payment hereunder, without condition or
deduction for any counterclaim, defense, recoupment or setoff, not later than
11:00 A.M. (New York City time) on the day when due in U.S. dollars to the
Administrative Agent at its address referred to in Section 8.02 in same day
funds. The Administrative Agent will promptly thereafter cause to be distributed
like funds relating to the payment of principal or interest or fees (other than
pursuant to Section 2.02(c), 2.07 or 2.11) ratably to the Lenders for the
account of their respective Applicable Lending Offices, and like funds relating
to the payment of any other amount payable to any Lender to such Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 8.07(d), from and after the effective date
specified in such Assignment and Acceptance, the Administrative Agent shall make
all payments hereunder in respect of the interest assigned thereby to the Lender
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
(b) All computations of interest based on the base rate referred to in
clause (i) of the definition of Base Rate shall be made by the Administrative
Agent on the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the Eurodollar Rate or Federal Funds Rate or
of fees payable hereunder shall be made by the Administrative Agent, and all
computations of interest pursuant to Section 2.07 shall be made by a Lender, on
the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period of
which such interest or fees are payable. Each determination by the
Administrative Agent (or, in the case of Section 2.07, by a Lender) of an
interest rate hereunder shall be conclusive and binding for all purposes.
(c) Whenever any payment hereunder shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of payment of interest or fees, as the case may be; provided,
however, that if such extension would cause payment of interest on or principal
of Eurodollar Rate Advances to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
20
(d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent the Borrower
shall not have so made such payment in full to the Administrative Agent, each
Lender shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender, together with interest thereon for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent at the Federal Funds Rate.
SECTION 2.14. Sharing of Payments, Etc.
If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of the
Advances made by it (other than pursuant to Section 2.02(c), 2.07 or 2.11) in
excess of its ratable share of payments on account of the Advances obtained by
all the Lenders, such Lender shall forthwith purchase from the other Lenders
such participation in the Advances made by them as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery, together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.14 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
SECTION 2.15. Extension of Commitment Termination Date.
(a) So long as no Event of Default shall have occurred and be continuing
and the Commitment Termination Date shall not have occurred, then at least 30
days but not more than 45 days prior to the Extension Date, the Borrower may
request that the Lenders, by written notice to the Administrative Agent (in
substantially the form attached hereto as Exhibit E), consent to a 364-day
extension of the Commitment Termination Date. Each Lender shall, in its sole
discretion, determine whether to consent to such request and shall notify the
Administrative Agent of its determination at least 20 days but not more than 30
days prior to such Extension Date. The failure to respond by any Lender within
such time period shall be deemed a denial of such request. The Administrative
Agent shall deliver a notice to the Borrower and the Lenders at least 15 days
but not more than 20 days prior to the Extension Date of the identity of the
Lenders that have consented to such extension and the Lenders that have declined
such consent (the "Declining Lenders"). If Lenders holding in the aggregate 50%
or less of the Commitments have consented to the requested extension, the
Commitment Termination Date shall not be
21
extended, and the Commitments of all Lenders shall terminate on the then current
Commitment Termination Date.
(b) If Lenders holding in the aggregate more than 50% but less than 85% of
the Commitments have consented to the requested extension, subject to the
conditions set forth in Section 2.15(c), the Borrower will within 5 Business
Days after notice from the Administrative Agent of the Lenders' determinations
irrevocably notify the Administrative Agent in writing whether it still requests
an extension of the Commitment Termination Date. If the Borrower still requests
such extension or if Lenders holding in the aggregate 85% or more of the
Commitments have consented to the requested extension, subject to the conditions
set forth in Section 2.15(c), the Commitment Termination Date shall be extended
as to such consenting Lenders only (and not as to any Declining Lender) for a
period of 364 days from the then current Commitment Termination Date, the
Commitments of any Declining Lenders shall terminate on the Commitment
Termination Date (as theretofore in effect), and all Advances of such Declining
Lenders shall be repaid to them on such date. If the Borrower so requests, each
Lender consenting to such request shall be given the opportunity at least seven
days but not more than 15 days prior to such Extension Date, in each Lender's
sole discretion, to commit to increase its Commitment by submission of a written
notice setting forth the desired increase in such Lender's Commitment to the
Administrative Agent in amounts such that the aggregate Commitments hereunder
after giving effect to any such extension and increase in the Commitments shall
not exceed the aggregate Commitments immediately prior to the Extension Date. If
the Administrative Agent receives commitments to increase the Commitments from
the Lenders, that, when aggregated with the existing Commitments, (i) are less
than or equal to the Commitments immediately prior to the Extension Date, the
Administrative Agent shall accept all such Commitments, (ii) are greater than
the Commitments on the date hereof, the Administrative Agent may determine, in
its reasonable discretion, which Commitments to accept and the amounts by which
each submitting Lender's Commitments shall be increased so that the aggregate
Commitments after the Extension Date shall equal the aggregate Commitments
immediately prior to the Extension Date (any Lender whose commitment to increase
its Commitment hereunder is accepted by the Administrative Agent, an "Extending
Commitment Lender"). If Lenders do not consent to increase the aggregate
Commitments to an amount equal to the Commitments immediately prior to the
Extension Date, the Borrower may, at least two days but not more than seven days
prior to the Extension Date, request that the Administrative Agent, in its sole
discretion, accept the Commitment or Commitments of an Eligible Assignee or
Eligible Assignees such that the aggregate Commitments hereunder after the
Extension Date shall not be greater than the aggregate Commitments hereunder
immediately prior to the Extension Date. If the Administrative Agent shall
accept the Commitment of any Extending Commitment Lender or Eligible Assignee,
the Commitments of the Declining Lenders shall terminate on the Extension Date,
and any Advances made by such Declining Lenders shall be repaid on such date in
accordance with this Agreement.
(c) Each such accepted Eligible Assignee and each Extending Commitment
Lender shall deliver a signature page hereto indicating that it is bound by the
terms hereof and setting forth its aggregate Commitment hereunder. Such new
signature page shall constitute a part hereof upon acceptance by the
Administrative Agent and, in the case of any signature page submitted by any
Extending Commitment Lender, shall replace such Extending Commitment Lender's
signature page. Any such extension shall become effective upon the Extension
Date, if
22
the Borrower shall have delivered to the Administrative Agent and each Lender,
on or prior to the Extension Date, (i) opinions of counsel to the Borrower
substantially in the forms of Exhibits C-3 and C-4 attached hereto upon which
each Lender and the Administrative Agent may rely, together with any
governmental order referred to therein attached thereto and (ii) a certificate
of a duly authorized officer of the Borrower (the statements contained in which
shall be true) to the effect that (x) the representations and warranties
contained in Section 4.01 are correct on and as of the Extension Date before and
after giving effect to the extension of the Commitment Termination Date, as
though made on and as of the Extension Date, and (y) no event has occurred and
is continuing, or would result from such extension of the Commitment Termination
Date, that constitutes an Event of Default or that would constitute an Event of
Default but for the requirement that notice be given or time elapse, or both.
Upon satisfaction of such conditions and the effectiveness of such extension,
each new Lender and Extending Commitment Lender shall make Advances to the
Borrower (A) in the case of each new Lender, equal to such Lender's ratable
portion of the Advances outstanding immediately prior to the Extension Date and
(B) in the case of each Extending Commitment Lender, equal to such portion of
such Lender's ratable portion of the Advances (assuming that such Lender's
Commitment consists only of the increased portion thereof) outstanding
immediately prior to the Extension Date, in each case, without giving effect to
any repayment of Advances to Declining Lenders made on the Extension Date.
SECTION 2.16. Term Loan Conversion Option.
At least one Business Day but not more than 45 Business Days prior to any
Commitment Termination Date, and subject to the delivery on or prior to such
Commitment Termination Date of an opinion of counsel to the Borrower
substantially in the form of Exhibit C-3 attached hereto, together with any
required governmental approvals referred to therein and attached thereto, to the
Administrative Agent and each of the Lenders, by submission of a written notice
(substantially in the form of Exhibit F, the "Term Loan Conversion Notice") to
the Administrative Agent, the Borrower may request that the Lenders convert all
Advances outstanding hereunder on such Commitment Termination Date into term
loans. Upon satisfaction of such conditions and delivery of such Term Loan
Conversion Notice), all Advances outstanding on the then current Commitment
Termination Date shall convert into term loans on such Commitment Termination
Date, and all such converted Advances shall become due and payable on the first
anniversary of such Commitment Termination Date. Notwithstanding the foregoing,
any Term Loan Conversion Notice may be delivered by the Borrower in conjunction
with (and simultaneously with) any request for extension of the Commitment
Termination Date pursuant to Section 2.15, above. If such extension of the
Commitment Termination Date shall occur as provided in Section 2.15, such Term
Loan Conversion Notice shall be deemed withdrawn and shall be of no further
effect.
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ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Closing.
The Commitments of the Lenders shall not become effective unless and until
all fees due and payable by the Borrower in connection with this Agreement have
been paid and the Administrative Agent shall have received the following:
(a) Promissory notes, in a form acceptable to the Administrative Agent,
payable to the order of each Lender that has requested such a note.
(b) Copies of the resolutions of the Board of Directors of the Borrower
approving this Agreement and all documents evidencing other necessary corporate
action, certified by the Secretary or an Assistant Secretary of the Borrower to
be true and correct, and in full force and effect on and as of the date hereof.
(c) A certificate of the Secretary or an Assistant Secretary of the
Borrower, dated as of the date hereof, certifying the names and true signatures
of the officers of the Borrower authorized to sign this Agreement and the other
documents to be delivered hereunder.
(d) A certificate of a Responsible Officer of the Borrower, dated as of the
date hereof, certifying (i) the accuracy of the representations and warranties
contained herein and (ii) that no event has occurred and is continuing that
constitutes an Event of Default or that would constitute an Event of Default but
for the requirement that notice be given or time elapse, or both.
(e) Certified copies of all governmental approvals and authorizations
required to be obtained in connection with the execution, delivery and
performance by the Borrower of this Agreement.
(f) Certified copies of the Restated Charter and By-Laws of the Borrower.
(g) Favorable opinions of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel of the
Borrower, and of Hunton & ▇▇▇▇▇▇▇▇, counsel for the Borrower, substantially in
the forms of Exhibit C-1 and C-2, respectively, hereto and as to such other
matters as any Lender through the Administrative Agent may reasonably request.
(h) A favorable opinion of King & Spalding, counsel for the Administrative
Agent, substantially in the form of Exhibit D hereto.
(i) Evidence that all outstanding obligations of the Borrower under the
Existing Credit Facilities have been paid in full and that the commitments of
the lenders under such Existing Credit Facilities have been terminated.
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SECTION 3.02. Conditions Precedent to Each Borrowing and to the Exercise of
the Term Loan Conversion Option.
The obligation of each Lender to make an Advance on the occasion of each
Borrowing (including the initial Borrowing) and to convert the Advances into
term loans in accordance with Section 2.16 shall be subject to the further
conditions precedent that (a) in the case of the making of an Advance, the
Administrative Agent shall have received the written confirmatory Notice of
Borrowing with respect thereto, (b) on the date of such Borrowing or exercise of
the Term Loan Conversion Option, as the case may be, the following statements
shall be true (and each of the giving of the Notice of Borrowing or Term Loan
Conversion Notice, as the case may be, and the acceptance by the Borrower of the
proceeds of such Borrowing, in the case of a Borrowing, or the conversion of the
Advances into term loans, in the case of the exercise of the Term Loan
Conversion Option, shall constitute a representation and warranty by the
Borrower that, on the date of such Borrowing, exercise or request, as the case
may be, such statements are true):
(i) The representations and warranties contained in Section 4.01 are
correct on and as of the date of such Borrowing or the date of
effectiveness of the Term Loan Conversion Option, as the case may be,
before and after giving effect to (x) such Borrowing and to the application
of the proceeds therefrom, or (y) such effectiveness, as the case may be,
as though made on and as of such date; and
(ii) No event has occurred and is continuing, or would result from
such Borrowing or from the application of the proceeds therefrom, or the
exercise of such Term Loan Conversion Option, as the case may be, that
constitutes an Event of Default or that would constitute an Event of
Default but for the requirement that notice be given or time elapse, or
both;
and (c) the Administrative Agent shall have received such other approvals,
opinions and documents as any Lender through the Administrative Agent may
reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:
(a) Each of the Borrower and each Significant Subsidiary is a corporation
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and is duly qualified to do business in
and is in good standing under the laws of each other jurisdiction where the
nature of its business or the nature of property owned or used by it makes such
qualification necessary (except where failure to so qualify would not have a
material adverse affect on the financial condition, operations or properties of
the Borrower and its Subsidiaries, taken as a whole).
(b) The execution, delivery and performance by the Borrower of this
Agreement are within the Borrower's corporate powers, have been duly authorized
by all necessary corporate
25
action, and do not contravene (i) the Borrower's charter or by-laws or (ii) any
law or contractual restriction binding on or affecting the Borrower or its
properties.
(c) No authorization or approval or other action by, and no notice to or
filing with any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower of this Agreement, other
than, the SEC Order, which has been duly issued and in full force and effect.
(d) This Agreement has been duly executed and delivered by the Borrower and
is, and any promissory note when delivered pursuant to Section 2.01(b) will be,
the legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms.
(e) The Consolidated balance sheets of the Borrower and its Subsidiaries as
at December 31, 2000, and the related Consolidated statements of income and
retained earnings of the Borrower and its Subsidiaries for the fiscal year then
ended, and the Consolidated balance sheets of the Borrower and its Subsidiaries
as at June 30, 2001, and the related Consolidated statements of income and
retained earnings of the Borrower and its Subsidiaries, copies of each of which
have been furnished to each Lender, fairly present (subject, in the case of such
financial statements dated June 30, 2001, to year end adjustments) the financial
condition of the Borrower and its Subsidiaries as at such dates and the results
of the operations of the Borrower and its Subsidiaries for the periods ended on
such dates, all in accordance with generally accepted accounting principles
consistently applied. Since December 31, 2000, there has been no material
adverse change in the financial condition, operations or properties of the
Borrower and its Subsidiaries, taken as a whole.
(f) Except as described in the reports and registration statements that the
Borrower, CP&L, FPC and Florida Power have filed with the Securities and
Exchange Commission prior to the date of this Agreement, there is no pending or
threatened action or proceeding affecting the Borrower or any Subsidiary before
any court, governmental agency or arbitrator, that may materially adversely
affect the financial condition, operations or properties of the Borrower and its
Subsidiaries, taken as a whole.
(g) No proceeds of any Advance will be used to acquire any security in any
transaction that is subject to Sections 13 and 14 of the Exchange Act.
(h) The Borrower is not engaged in the business of extending credit for the
purpose of buying or carrying margin stock (within the meaning of Regulation U
issued by the Board of Governors of the Federal Reserve System), and no proceeds
of any Advance will be used to buy or carry any margin stock or to extend credit
to others for the purpose of buying or carrying any margin stock.
(i) Following application of the proceeds of each Advance, not more than 5%
of the value of the assets (either of the Borrower only or of the Borrower and
the Subsidiaries on a Consolidated basis) subject to the provisions of Section
5.02(a) or 5.02(e) will be margin stock (within the meaning of Regulation U
issued by the Board of Governors of the Federal Reserve System).
26
(j) No Termination Event has occurred or is reasonably expected to occur
with respect to any Plan.
(k) The Borrower is not an "investment company" or a company "controlled"
by an "investment company", within the meaning of the Investment Company Act of
1940, as amended.
(l) The Borrower is in substantial compliance with all applicable laws,
rules, regulations and orders of any governmental authority, the noncompliance
with which would materially and adversely affect the business or condition of
the Borrower, such compliance to include, without limitation, substantial
compliance with ERISA, Environmental Laws and paying before the same become
delinquent all material taxes, assessments and governmental charges imposed upon
it or upon its property, except to the extent compliance with any of the
foregoing is then being contested in good faith by appropriate legal
proceedings.
(m) All written information furnished by the Borrower to the Administrative
Agent and the Lenders in connection with this Agreement (the "Disclosed
Information") was (and all information furnished in the future by the Borrower
to the Administrative Agent and the Lenders will be) complete and correct in all
respects material to the creditworthiness of the Borrower when delivered. As of
the date hereof, the Disclosed Information does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements contained therein not misleading in light of the circumstances under
which made.
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.01. Affirmative Covenants.
So long as any Advance or any other amount payable by the Borrower
hereunder shall remain unpaid or any Lender shall have any Commitment hereunder,
the Borrower shall, unless the Majority Lenders shall otherwise consent in
writing:
(a) Compliance with Laws, Etc. Except to the extent contested in good
faith, comply, and cause each Subsidiary to comply, with all applicable laws,
rules, regulations and orders (such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property), the non-compliance with which
would materially adversely affect the Borrower's business or credit.
(b) Preservation of Corporate Existence, Etc. Except as provided in Section
5.02 (d), preserve and maintain, and cause each Significant Subsidiary to
preserve and maintain, its corporate existence, rights (charter and statutory)
and franchises.
(c) Visitation Rights. At any reasonable time and from time to time, permit
the Administrative Agent or any of the Lenders or any agents or representatives
thereof to examine and make copies of and abstracts from the records and books
of account of, and visit the properties of, the Borrower and any Subsidiary, and
to discuss the affairs, finances and accounts of the Borrower and any Subsidiary
with any of their respective officers or directors.
27
(d) Keeping of Books. Keep, and cause each Subsidiary to keep, proper books
of record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Borrower and such
Subsidiary in accordance with generally accepted accounting principles
consistently applied.
(e) Maintenance of Properties, Etc. Maintain and preserve, and cause each
Subsidiary to maintain and preserve, all of its properties that are used or
useful in the conduct of its business in good working order and condition,
ordinary wear and tear excepted.
(f) Maintenance of Insurance. Maintain, and cause each Subsidiary to
maintain, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower or such Subsidiary operates.
(g) Taxes. File, and cause each Subsidiary to file, all tax returns
(federal, state and local) required to be filed and paid and pay all taxes shown
thereon to be due, including interest and penalties except, in the case of
taxes, to the extent the Borrower or such Subsidiary is contesting the same in
good faith and by appropriate proceedings and has set aside adequate reserves
for the payment thereof in accordance with generally accepted accounting
principles.
(h) Material Obligations. Pay, and cause each Subsidiary to pay, promptly
as the same shall become due each material obligation of the Borrower or such
Subsidiary.
(i) Reporting Requirements. Furnish to the Lenders:
(i) as soon as available and in any event within 60 days after the end
of each of the first three quarters of each fiscal year of the Borrower, a
Consolidated balance sheet of the Borrower and the Subsidiaries as at the
end of such quarter and Consolidated statements of income and retained
earnings of the Borrower and the Subsidiaries for the period commencing at
the end of the previous fiscal year and ending with the end of such
quarter, certified by the treasurer or the chief financial officer of the
Borrower, together with a certificate of the treasurer or chief financial
officer of the Borrower, setting forth in reasonable detail the calculation
of the Borrower's compliance with Section 5.01(j) and stating that no Event
of Default and no event that, with the giving of notice or lapse of time or
both, would constitute an Event of Default has occurred and is continuing,
or if an Event of Default or such event has occurred and is continuing, a
statement setting forth details of such Event of Default or event and the
action that the Borrower has taken and proposes to take with respect
thereto;
(ii) as soon as available and in any event within 120 days after the
end of each fiscal year of the Borrower, a copy of the annual report for
such year for the Borrower and the Subsidiaries, containing Consolidated
financial statements for such year certified by Deloitte & Touche or other
independent public accountants acceptable to the Majority Lenders, together
with a certificate of the treasurer or chief financial officer of the
Borrower, substantially in the form of Exhibit G hereto, setting forth in
reasonable detail the calculation of the Borrower's compliance with Section
5.01(j) and stating that no
28
Event of Default and no event that, with the giving of notice or lapse of
time or both, would constitute an Event of Default has occurred and is
continuing, or if an Event of Default or such event has occurred and is
continuing, a statement setting forth details of such Event of Default or
event and the action that the Borrower has taken and proposes to take with
respect thereto;
(iii) promptly after the sending or filing thereof, copies of all
reports that the Borrower sends to any of its security holders, and copies
of all reports and registration statements that the Borrower or any
Subsidiary files with the Securities and Exchange Commission or any
national securities exchange, to the extent not delivered by the Borrower
pursuant to clause (i) or (ii) of this Section 5.01(i);
(iv) immediately upon any Responsible Officer's obtaining knowledge of
the occurrence of any Event of Default or any event that, with the giving
of notice or lapse of time, or both, would constitute an Event of Default,
a statement of the chief financial officer or treasurer of the Borrower
setting forth details of such Event of Default or event and the action that
the Borrower proposes to take with respect thereto;
(v) immediately upon obtaining knowledge thereof, notice of any change
in either the ▇▇▇▇▇'▇ Rating or the S&P Rating;
(vi) as soon as possible and in any event within five days after the
commencement thereof or any adverse determination or development therein,
notice of all actions, suits and proceedings that may adversely affect the
Borrower's ability to perform its obligations under this Agreement;
(vii) as soon as possible and in any event within five days after the
occurrence of a Termination Event, notice of such Termination Event; and
(viii) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any Subsidiary as any Lender
through the Administrative Agent may from time to time reasonably request.
(j) Indebtedness to Total Capitalization. Maintain at all times a ratio of
Consolidated Indebtedness of the Borrower and its Subsidiaries to Total
Capitalization of not more than .70:1.0.
(k) Use of Proceeds. Use the proceeds of each Advance solely for general
corporate purposes (including, in each case, without limitation, as a commercial
paper back-up). No proceeds of any Advance will be used to acquire any equity
security of a class that is registered pursuant to Section 12 of the Exchange
Act, or any security in any transaction that is subject to Sections 13 and 14 of
the Exchange Act.
(l) Ownership of Subsidiaries. Own at all times, directly or indirectly and
free and clear of all liens and encumbrances, 100% of the common stock of CP&L,
FPC and Florida Power.
29
SECTION 5.02. Negative Covenants.
So long as any Advance or any other amount payable by the Borrower
hereunder shall remain unpaid or any Lender shall have any Commitment hereunder,
the Borrower will not, without the written consent of the Majority Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any
Subsidiary to create, incur, assume or suffer to exist, any lien, security
interest or other charge or encumbrance, or any other type of preferential
arrangement, upon or with respect to any of its properties, whether now owned or
hereafter acquired, or assign, or permit any Subsidiary to assign, any right to
receive income, in each case to secure any Indebtedness of any Person, other
than (i) liens, mortgages and security interests created by the Mortgage and the
Florida Power Mortgage, (ii) liens and security interests against the fuel used
by the Borrower in its power generating operations in favor of the suppliers
thereof, (iii) liens and security interests created in connection with the GenCo
Financing, and (iv) liens, mortgages and security interests securing other
Indebtedness of the Borrower and its Subsidiaries not exceeding $100,000,000 in
the aggregate.
(b) Indebtedness. Create, incur, assume or suffer to exist, or permit any
Subsidiary to create, incur, assume or suffer to exist, any Indebtedness other
than (i) Indebtedness hereunder, (ii) Indebtedness secured by liens and security
interests permitted pursuant to clauses (ii), (iii) and (iv) of subsection
5.02(a), (iii) Indebtedness evidenced by the First Mortgage Bonds and the
Florida Power Mortgage Bonds, (iv) unsecured Indebtedness, including guarantees
issued in connection with the financing of pollution control facilities operated
by CP&L, FPC or Florida Power, guarantees of Indebtedness incurred by any
wholly-owned Subsidiary and guarantees of debt securities issued by any
financing Subsidiary established to secure debt financing in the offshore
markets, and (v) other Indebtedness outstanding on the date of this Agreement,
as described on Schedule II hereto.
(c) Lease Obligations. Create, incur, assume or suffer to exist, or permit
any Subsidiary to create, incur, assume or suffer to exist, any obligations for
the payment of rental for any property under leases or agreements to lease
having a term of one year or more that would cause the direct or contingent
Consolidated liabilities of the Borrower and its Subsidiaries in respect of all
such obligations payable in any calendar year to exceed 10% of the Consolidated
operating revenues of the Borrower and its Subsidiaries for the immediately
preceding calendar year.
(d) Mergers, Etc. Merge with or into or consolidate with or into, or
acquire all or substantially all of the assets or securities of, any Person,
unless, in each case, (i) immediately after giving effect thereto, no event
shall occur and be continuing that constitutes an Event of Default or an event
that with the giving of notice or lapse of time, or both, would constitute an
Event of Default, and (ii) in the case of any such merger to which the Borrower
is a party, such other Person is a utility company and the resulting or
surviving corporation, if not the Borrower, (x) is organized and existing under
the laws of the United States of America or any State thereof, (y) is a
corporation satisfactory to the Majority Lenders, and (z) shall have expressly
assumed, by an instrument satisfactory in form and substance to the Majority
Lenders, the due and
30
punctual payment of all amounts due under this Agreement and the performance of
every covenant and undertaking of the Borrower contained in this Agreement.
(e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose of,
or permit any Subsidiary to sell, lease, transfer or otherwise dispose of, any
of its assets, other than the following sales: (i) sales of generating capacity
to the wholesale customers of the Borrower and the Subsidiaries, (ii) sales of
nuclear fuel, (iii) sales of accounts receivable, (iv) sales in connection with
a transaction authorized by subsection (d) of this Section, (v) the Portfolio
Transaction, (vi) the Rail Transaction, (vii) sales of investments in securities
with a maturity of less than one year, or (viii) other sales not exceeding
$150,000,000 in the aggregate in any fiscal year of the Borrower.
(f) Margin Stock. Use any proceeds of any Advance to buy or carry margin
stock (within the meaning of Regulation U issued by the Board of Governors of
the Federal Reserve System).
(g) Change in Nature of Business. Engage, or cause or permit CP&L or
Florida Power to engage, in a material manner in businesses other than those in
which they are engaged on the date hereof and businesses reasonably related
thereto.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default.
If any of the following events ("Events of Default") shall occur and be
continuing:
(a) The Borrower shall fail to pay any principal of any Advance when due,
or shall fail to pay any interest on the principal amount of any Advance or any
fees or other amount payable hereunder within five Business Days after such
interest or fees or other amount shall become due; or
(b) Any representation or warranty made by the Borrower herein or by the
Borrower (or any of its officers) in any document delivered pursuant to this
Agreement shall prove to have been incorrect in any material respect when made
or deemed made; or
(c) The Borrower shall fail to perform or observe any other term, covenant
or agreement contained in Section 5.01(b), 5.01(i)(iv), 5.01(j), 5.01(l) or 5.02
on its part to be performed or observed; or the Borrower shall fail to perform
or observe any other term, covenant or agreement contained in this Agreement on
its part to be performed or observed and any such failure shall remain
unremedied for 30 days after written notice thereof shall have been given to the
Borrower by the Administrative Agent or any Lender; or
(d) The Borrower or any Subsidiary shall fail to pay any amount in respect
of any Indebtedness in excess of $10,000,000 (but excluding Indebtedness
hereunder) of the Borrower or such Subsidiary (as the case may be), or any
interest or premium thereon, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure
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shall continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness; or any other default
under any agreement or instrument relating to any such Indebtedness, or any
other event, shall occur and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such default
or event is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness; or any such Indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(e) The Borrower or any Subsidiary shall generally not pay its debts as
such debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Borrower or any Subsidiary
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official for
it or for any substantial part of its property; or the Borrower or any
Subsidiary shall take any corporate action to authorize any of the actions set
forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess of $10,000,000
shall be rendered against the Borrower or any Subsidiary and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(g) Any Termination Event with respect to a Plan shall have occurred, and,
30 days after the occurrence thereof, (i) such Termination Event (if
correctable) shall not have been corrected and (ii) the then present value of
such Plan's vested benefits exceeds the then current value of assets accumulated
in such Plan by more than the amount of $20,000,000 (or in the case of a
Termination Event involving the withdrawal of a "substantial employer" (as
defined in Section 4001(a)(2) of ERISA), the withdrawing employer's
proportionate share of such excess shall exceed such amount); or
(h) The Borrower or any of its Affiliates as employer under a Multiemployer
Plan shall have made a complete or partial withdrawal from such Multiemployer
Plan and the plan sponsor of such Multiemployer Plan shall have notified such
withdrawing employer that such employer has incurred a withdrawal liability in
an annual amount exceeding $20,000,000; or
(i) A Change of Control shall occur;
then, and in any such event, the Administrative Agent shall at the request, or
may with the consent, of the Majority Lenders, by notice to the Borrower, (i)
declare the Commitments and the obligation of each Lender to make Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii) declare the
principal amount of the Advances then outstanding, all interest thereon and all
other amounts payable under this Agreement to be forthwith due and payable,
whereupon such principal amount, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any
32
kind, all of which are hereby expressly waived by the Borrower; provided,
however, that in the event of an actual or deemed entry of an order for relief
with respect to the Borrower or any Subsidiary under the Federal Bankruptcy
Code, (A) the obligation of each Lender to make Advances shall automatically be
terminated and (B) the principal amount of the Advances then outstanding, all
such interest and all such other amounts shall automatically become and be due
and payable, without presentment, demand, protest or any notice of any kind, all
of which are hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action.
Each Lender hereby appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably provided for by this Agreement
(including, without limitation, enforcement or collection of the Advances), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon all Lenders;
provided, however, that the Administrative Agent shall not be required to take
any action that exposes the Administrative Agent to personal liability or that
is contrary to this Agreement or applicable law.
SECTION 7.02. The Agent's Reliance, Etc.
Neither the Administrative Agent nor any of its directors, officers, agents
or employees shall be liable for any action taken or omitted to be taken by each
or any of them under or in connection with this Agreement, except for their own
gross negligence or willful misconduct. Without limitation of the generality of
the foregoing, the Administrative Agent: (i) may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (ii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations made in or in connection with this Agreement; (iii) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement on the part of the
Borrower or to inspect the property (including the books and records) of the
Borrower; (iv) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other instrument or document furnished pursuant hereto; and (v)
shall incur no liability under or in respect of this Agreement by acting upon
any notice, consent, certificate or other instrument or writing (which may be by
telegram, telecopy or e-mail) believed by it to be genuine and signed or sent by
the proper party or parties.
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SECTION 7.03. The Administrative Agent and its Affiliates.
With respect to its Commitments and, the Advances made by it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same as though it were not an
Administrative Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include each Agent in its individual capacity, as
applicable. The Administrative Agent and its Affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally engage in
any kind of business with, the Borrower, any Subsidiary and any Person who may
do business with or own securities of the Borrower or any Subsidiary, all as if
the Administrative Agent were not the Administrative Agent and without any duty
to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on the financial
statements referred to in Section 4.01(e) and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification.
The Lenders agree to indemnify the Administrative Agent (to the extent not
reimbursed by the Borrower), ratably according to the respective principal
amounts of the Advances then held by each of them (or if no Advances are at the
time outstanding, ratably according to the respective amounts of their
Commitments), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against the Administrative Agent in any way relating to or arising out
of this Agreement or any action taken or omitted by the Administrative Agent
under this Agreement; provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender agrees to reimburse the Administrative Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including
reasonable counsel fees) incurred by the Administrative Agent in connection with
the preparation, execution, administration, or enforcement of, or legal advice
in respect of rights or responsibility under, this Agreement, to the extent that
the Administrative Agent is not reimbursed for such expenses by the Borrower.
SECTION 7.06. Successor Administrative Agent.
The Administrative Agent may resign at any time by giving written notice
thereof to the Lenders and the Borrower and may be removed at any time with or
without cause by the Majority Lenders. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall
34
have been so appointed by the Majority Lenders, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's giving of
notice of resignation or the Majority Lenders' removal of the retiring
Administrative Agent, the Administrative Agent may appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States of America or of any State thereof and having a combined
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative Agent,
the provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc.
No amendment or waiver of any provision of this Agreement, nor consent to
any departure by the Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Majority Lenders, in the case of
any such amendment, waiver or consent of or in respect of this Agreement, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by all of the Lenders, do
any of the following: (i) waive any of the conditions specified in Section 3.01
or 3.02, (ii) increase the Commitment of any Lender or subject any Lender to any
additional obligations (other than pursuant to Section 2.04(b)), (iii) reduce,
or waive the payment of, the principal of, or interest on, the Advances or any
fees or other amounts payable to the Lenders ratably hereunder, (iv) postpone
any date fixed for any payment of principal of, or interest on, the Advances or
any fees or other amounts payable to the Lenders ratably hereunder, (v) change
the percentage of the Commitments or of the aggregate unpaid principal amount of
the Advances, or the number of Lenders, which shall be required for the Lenders
or any of them to take any action under this Agreement, or (vi) amend, waive, or
in any way modify or suspend any provision requiring the pro rata application of
payments or of Section 2.15 or of this Section 8.01; provided further, that no
amendment, waiver or consent shall, unless in writing and signed by each Lender
affected thereby, reduce, waive or postpone the date of payment of any amount
payable to such Lender, other than any such amount payable to the Lenders
ratably; and provided, further, that (A) no amendment, waiver or consent shall,
unless in writing and signed by the Administrative Agent in addition to the
Lenders required hereinabove to take such action, affect the rights or duties of
such Administrative Agent under this Agreement and (B) this Agreement may be
amended and restated without the consent of any Lender or the Administrative
Agent if, upon giving effect to such amendment and restatement, such Lender or
Administrative Agent, as the case may be, shall no longer be a party to this
Agreement (as so amended and restated) or have any Commitment or other
obligation hereunder and shall have been paid in full all amounts payable
hereunder to such Lender or the Administrative Agent, as the case may be.
35
SECTION 8.02. Notices, Etc.
All notices and other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including telegraphic communication) and
mailed, telecopied, e-mailed or delivered, if to the Borrower, at its address at
410 S. Wilmington Street, PEB 19A3, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Director of Financial Operations, Treasury Department, Facsimile no. (919)
546-7826, e-mail: ▇▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇; if to any Lender, at its Domestic
Lending Office set forth opposite its name on Schedule I hereto; and if to the
Administrative Agent, at its address at ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Bank Loan Syndications, Facsimile no.: (212)
816-8098, e-mail: ▇.▇▇▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇.▇▇▇; or, as to each party, at such other
address as shall be designated by such party in a written notice to the other
parties. All such notices and communications shall be effective when received by
the addressee thereof.
SECTION 8.03. No Waiver; Remedies.
No failure on the part of any Lender or the Administrative Agent to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 8.04. Costs, Expenses, Taxes and Indemnification.
(a) The Borrower agrees to pay on demand all costs and expenses of the
Administrative Agent (and as described in clause (iv) below, the Lenders) in
connection with (i) the preparation, execution, negotiation, syndication and
delivery of this Agreement and the other documents to be delivered hereunder,
(ii) the first Borrowing under this Agreement, (iii) any modification, amendment
or supplement to this Agreement and the other documents to be delivered
hereunder and (iv) the enforcement of the rights and remedies of the Lenders and
the Administrative Agent under this Agreement and the other documents to be
delivered hereunder (whether through negotiations or legal proceedings), all the
above costs and expenses to include, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Administrative Agent and each of the
Lenders with respect thereto. In addition, the Borrower shall pay any and all
stamp and other taxes payable or determined to be payable in connection with the
execution and delivery of this Agreement and the other documents to be delivered
hereunder, and agrees to save the Administrative Agent and each Lender harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes.
(b) If (i) due to payments made by the Borrower due to the acceleration of
the maturity of the Advances pursuant to Section 6.01 or due to any other
reason, any Lender receives payments of principal of any Eurodollar Rate Advance
based upon the Eurodollar Rate other than on the last day of the Interest Period
for such Advance, or (ii) due to any Conversion of Eurodollar Advance other than
on the last day of an Interest Period pursuant to Section 2.12, the Borrower
shall, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender any
36
amounts required to compensate such Lender for any additional losses, costs or
expenses that it may reasonably incur as a result of such payment, including,
without limitation, any loss (including loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain such Advance. In
addition, if the Borrower fails to prepay any Advance on the date for which
notice of prepayment has been given, the Borrower shall, upon demand by any
Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any losses, costs or expenses (including loss of
anticipated profits) that it may reasonably incur as a result of such prepayment
not having been made on the date specified by the Borrower for such prepayment.
(c) Any and all payments by the Borrower hereunder shall be made, in
accordance with Section 2.13, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Administrative Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Lender or Agent (as the case may be) is organized or any political subdivision
thereof and, in the case of each Lender, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction of such Lender's Applicable
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to any Lender
or Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 8.04) such Lender or Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(d) The Borrower will indemnify each Lender and the Administrative Agent
for the full amount of Taxes (including, without limitation, any Taxes imposed
by any jurisdiction on amounts payable under this Section 8.04) paid by such
Lender or Agent (as the case may be) and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally asserted. This indemnification shall be
made within 30 days from the date such Lender or Agent (as the case may be)
makes written demand therefor.
(e) Prior to the date of the initial Borrowing or on the date of the
Assignment and Acceptance pursuant to which it became a Lender, in the case of
each Lender that becomes a Lender by virtue of entering into an Assignment and
Acceptance, and from time to time thereafter if requested by the Borrower or the
Administrative Agent, each Lender organized under the laws of a jurisdiction
outside the United States shall provide the Administrative Agent and the
Borrower with the forms prescribed by the Internal Revenue Service of the United
States certifying that such Lender is exempt from United States withholding
taxes with respect to all payments to be made to such Lender hereunder. If for
any reason during the term of this Agreement, any Lender becomes unable to
submit the forms referred to above or the information or representations
contained therein are no longer accurate in any material respect, such Lender
37
shall notify the Administrative Agent and the Borrower in writing to that
effect. Unless the Borrower and the Administrative Agent have received forms or
other documents satisfactory to them indicating that payments hereunder are not
subject to United States withholding tax, the Borrower or the Administrative
Agent shall withhold taxes from such payments at the applicable statutory rate
in the case of payments to or for any Lender organized under the laws of a
jurisdiction outside the United States.
(f) Any Lender claiming any additional amounts payable pursuant to Section
8.04(c) or (d) shall use its reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) (i) to change the jurisdiction of
its Applicable Lending Office if the making of such a change would avoid the
need for, or reduce the amount of, any such additional amounts that may
thereafter accrue and would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender and (ii) to otherwise minimize the
amounts due, or to become due, under Sections 8.04(c) and (d).
(g) If the Borrower makes any additional payment to any Lender pursuant to
Sections 8.04(c) and (d) in respect of any Taxes, and such Lender determines
that it has received (i) a refund of such Taxes or (ii) a credit against or
relief or remission for, or a reduction in the amount of, any tax or other
governmental charge solely as a result of any deduction or credit for any Taxes
with respect to which it has received payments under Sections 8.04(c) and (d),
such Lender shall, to the extent that it can do so without prejudice to the
retention of such refund, credit, relief, remission or reduction, pay to the
Borrower such amount as such Lender shall have determined to be attributable to
the deduction or withholding of such Taxes. If such Lender later determines that
it was not entitled to such refund, credit, relief, remission or reduction to
the full extent of any payment made pursuant to the first sentence of this
Section 8.04(g), the Borrower shall upon demand of such Lender promptly repay
the amount of such overpayment. Any determination made by such Lender pursuant
to this Section 8.04(g) shall in the absence of bad faith or manifest error be
conclusive, and nothing in this Section 8.04(g) shall be construed as requiring
any Lender to conduct its business or to arrange or alter in any respect its tax
or financial affairs so that it is entitled to receive such a refund, credit or
reduction or as allowing any Person to inspect any records, including tax
returns, of any Lender.
(h) The Borrower hereby agrees to indemnify and hold harmless each Lender,
the Administrative Agent, counsel to the Administrative Agent and their
respective officers, directors, partners, employees, Affiliates and advisors
(each, an "Indemnified Person") from and against any and all claims, damages,
losses, liabilities, costs, or expenses (including reasonable attorney's fees
and expenses, whether or not such Indemnified Person is named as a party to any
proceeding or is otherwise subjected to judicial or legal process arising from
any such proceeding), joint and several, that may actually be incurred by or
asserted or awarded against any Indemnified Person (including, without
limitation, in connection with any investigation, litigation or proceeding or
the preparation of a defense in connection therewith) in each case by reason of
or in connection with the execution, delivery, or performance of this Agreement,
or the use by the Borrower of the proceeds of any Advance, except to the extent
that such claims, damages, losses, liabilities, costs, or expenses are
determined in a final non-appealable judgment by a court of competent
jurisdiction to have resulted solely from the gross negligence or willful
misconduct of the party seeking indemnification.
38
(i) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 8.04 shall survive the payment in full of principal and interest
hereunder and the termination of the Commitments.
SECTION 8.05. Right of Set-off.
Upon (i) the occurrence and during the continuance of any Event of Default
and (ii) the making of the request or the granting of the consent specified by
Section 6.01 to authorize the Administrative Agent to declare the Advances due
and payable pursuant to the provisions of Section 6.01, each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender to or for the credit or the account of the Borrower
now or hereafter existing under this Agreement, irrespective of whether or not
such Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
after any such set-off and application made by such Lender; provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
SECTION 8.06. Binding Effect.
This Agreement shall become effective when it shall have been executed by
the Borrower and the Administrative Agent and when the Administrative Agent
shall have been notified by each Lender that such Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent and each Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of each
Lender.
SECTION 8.07. Assignments and Participations.
(a) Each Lender may, with the consent of the Administrative Agent and the
Borrower (such consent not to be unreasonably withheld and, in the case of the
Borrower, such consent shall not be required if an Event of Default has occurred
and is continuing), assign to one or more banks or other entities all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment and the Advances owing to it);
provided, however, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all rights and obligations under this Agreement, (ii)
prior to the effectiveness of the Term Loan Conversion Option, the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than the lesser of (A)
$10,000,000 and (B) all of such Lender's rights and obligations and, if the
preceding clause (A) is applicable, shall be an integral multiple of $1,000,000,
(iii) each such assignment shall be to an Eligible Assignee, and (iv) the
parties to each such assignment shall execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance and such parties (other than when Citibank is an assigning party)
shall also deliver to
39
the Administrative Agent a processing and recordation fee of $3,500. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, (x) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01(e) and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Lender.
(c) The Administrative Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance (and copies of the related
consents of the Borrower and the Administrative Agent to such assignment)
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Commitment of, and principal amount of the
Advances owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
40
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
the Administrative Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit B hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower.
(e) Each Lender may assign to one or more banks or other entities any
Advance made by it.
(f) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Advances owing to it); provided, however, that (i) such Lender's obligations
under this Agreement (including, without limitation, its Commitment to the
Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any promissory note held pursuant
to Section 2.01(b) for all purposes of this Agreement, (iv) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (v) the holder of any such participation,
other than an Affiliate of such Lender, shall not be entitled to require such
Lender to take or omit to take any action hereunder, except action (A) extending
the time for payment of interest on, or the final maturity of any portion of the
principal amount of, the Advances or (B) reducing the principal amount of or the
rate of interest payable on the Advances. Without limiting the generality of the
foregoing: (i) such participating banks or other entities shall be entitled to
the cost protection provisions contained in Sections 2.08, 2.12 and 8.04(b) only
if, and to the same extent, the Lender from which such participating banks or
other entities acquired its participation would, at the time, be entitled to
claim thereunder; and (ii) such participating banks or other entities shall
also, to the fullest extent permitted by law, be entitled to exercise the rights
of set-off contained in Section 8.05 as if such participating banks or other
entities were Lenders hereunder.
(g) If any Lender (or any bank, financial institution, or other entity to
which such Lender has sold a participation) shall make any demand for payment
under Section 2.11(b), then within 30 days after any such demand (if, but only
if, such demanded payment has been made by the Borrower), the Borrower may, with
the approval of the Administrative Agent (which approval shall not be
unreasonably withheld) demand that such Lender assign in accordance with this
Section 8.07 to one or more Eligible Assignees designated by the Borrower all
(but not less than all) of such Lender's Commitment (if any) and the Advances
owing to it within the period ending on the later to occur of such 30th day and
the last day of the longest of the then current Interest Periods for such
Advances, provided that (i) no Event of Default or event that, with the passage
of time or the giving of notice, or both, would constitute an Event of Default
shall then have occurred and be continuing, (ii) the Borrower shall have
satisfied all its presently due obligations to such Lender under this Agreement,
and (iii) if such Eligible Assignee designated by the Borrower is not an
existing Lender on the date of such demand, the Borrower shall have delivered to
the Administrative Agent an administrative fee of $3,500. If any such Eligible
Assignee designated by the Borrower shall fail to consummate such assignment on
terms acceptable to such Lender, or if the Borrower shall fail to designate any
such Eligible Assignees for all or part of such Lender's Commitment or Advances,
then such demand by the Borrower
41
shall become ineffective; it being understood for purposes of this subsection
(g) that such assignment shall be conclusively deemed to be on terms acceptable
to such Lender, and such Lender shall be compelled to consummate such assignment
to an Eligible Assignee designated by the Borrower, if such Eligible Assignee
(i) shall agree to such assignment by entering into an Assignment and Acceptance
in substantially the form of Exhibit B hereto with such Lender and (ii) shall
offer compensation to such Lender in an amount equal to all amounts then owing
by the Borrower to such Lender hereunder made by the Borrower to such Lender,
whether for principal, interest, fees, costs or expenses (other than the
demanded payment referred to above and payable by the Borrower as a condition to
the Borrower's right to demand such assignment), or otherwise.
(h) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to the Borrower
received by it from such Lender.
(i) Anything in this Section 8.07 to the contrary notwithstanding, any
Lender may (i) assign and pledge all or any portion of its Commitment and the
Advances owing to it to any Federal Reserve Bank (and its transferees) as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank; provided, that no such assignment shall release the assigning Lender from
its obligations hereunder; or (ii) assign its Commitments, Advances and other
rights and obligations hereunder to any of its Affiliates upon notice to, but
without the consent of, the Borrower and the Administrative Agent.
(j) Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Lender") may grant to a special purpose funding vehicle (an "SPC")
of such Granting Lender identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower, the option to
provide to the Borrower all or any part of any Advance that such Granting Lender
would otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any such SPC
to make any Advance, (ii) if such SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Advance, the Granting Lender
shall be obligated to make such Advance pursuant to the terms hereof and (iii)
no SPC or Granting Lender shall be entitled to receive any greater amount
pursuant to Section 2.07 or 2.11 than the Granting Lender would have been
entitled to receive had the Granting Lender not otherwise granted such SPC the
option to provide any Advance to the Borrower. The making of an Advance by an
SPC hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Advance were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement for which a Lender would otherwise be
liable so long as, and to the extent that, the related Granting Lender provides
such indemnity or makes such payment. In furtherance of the foregoing, each
party hereto hereby agrees (which agreement shall survive the termination of
this Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior indebtedness
of any SPC, it will not institute against or join
42
any other person in instituting against such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof. Notwithstanding the foregoing, the Granting Lender
unconditionally agrees to indemnify the Borrower, the Administrative Agent and
each Lender against all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be incurred by or asserted against the Borrower, the
Administrative Agent or such Lender, as the case may be, in any way relating to
or arising as a consequence of any such forbearance or delay in the initiation
of any such proceeding against its SPC. Each party hereto hereby acknowledges
and agrees that no SPC shall have the rights of a Lender hereunder, such rights
being retained by the applicable Granting Lender. Accordingly, and without
limiting the foregoing, each party hereby further acknowledges and agrees that
no SPC shall have any voting rights hereunder and that the voting rights
attributable to any Advance made by an SPC shall be exercised only by the
relevant Granting Lender and that each Granting Lender shall serve as the
administrative agent and attorney-in-fact for its SPC and shall on behalf of its
SPC receive any and all payments made for the benefit of such SPC and take all
actions hereunder to the extent, if any, such SPC shall have any rights
hereunder. In addition, notwithstanding anything to the contrary contained in
this Agreement any SPC may with notice to, but without the prior written consent
of any other party hereto, assign all or a portion of its interest in any
Advances to the Granting Lender. This Section may not be amended without the
prior written consent of each Granting Lender, all or any part of whose Advance
is being funded by an SPC at the time of such amendment.
SECTION 8.08. Governing Law.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York. The Borrower (i) irrevocably submits to the
non-exclusive jurisdiction of any New York State court or Federal court sitting
in New York City in any action arising out of this Agreement, (ii) agrees that
all claims in such action may be decided in such court, (iii) waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum
and (iv) consents to the service of process by mail. A final judgment in any
such action shall be conclusive and may be enforced in other jurisdictions.
Nothing herein shall affect the right of any party to serve legal process in any
manner permitted by law or affect its right to bring any action in any other
court.
SECTION 8.09. WAIVER OF JURY TRIAL.
THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER EACH HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY AND LAWFULLY DO SO,
ALL RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING TO THIS AGREEMENT IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.
43
SECTION 8.10. Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 8.11. Severability.
Any provision of this Agreement that is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or non-authorization without
invalidating the remaining provisions hereof or affecting the validity,
enforceability or legality of such provision in any other jurisdiction.
SECTION 8.12. Headings.
Section headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
SECTION 8.13. Entire Agreement.
This Agreement constitutes the entire contract between the parties relative
to the subject matter hereof. Any previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement. Except as
is expressly provided for herein, nothing in this Agreement, expressed or
implied, is intended to confer upon any party other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
44
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
PROGRESS ENERGY, INC.
By
-------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Treasurer
S-1
CITIBANK, N.A., as Administrative Agent
and Lender
By
-------------------------------------------
Name:
Title:
S-2
JPMORGAN CHASE BANK
By
-------------------------------------------
Name:
Title:
S-3
BANK ONE, NA
By
-------------------------------------------
Name:
Title:
S-4
BANK OF AMERICA, N.A.
By
-------------------------------------------
Name:
Title:
S-5
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By
-------------------------------------------
Name:
Title:
S-6
WACHOVIA BANK, N.A.
By
-------------------------------------------
Name:
Title:
S-7
SUNTRUST BANK
By
-------------------------------------------
Name:
Title:
S-8
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By
-------------------------------------------
Name:
Title:
S-9
MELLON BANK, N.A.
By
-------------------------------------------
Name:
Title:
S-10
SCHEDULE I
PROGRESS ENERGY, INC.
List of Commitments and Applicable Lending Offices
Eurodollar Domestic
Name of Bank Lending Office Lending Office Commitment
------------ -------------- -------------- ----------
Citibank, N.A. Two Pennsway, Ste. 200 Same as Eurodollar Lending $89,473,684.22
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Office
Attention: Bank Loan Syndications
JPMorgan Chase Bank ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Same as Eurodollar Lending $89,473,684.22
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Office
Attention:
Bank One, NA ▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ Same as Eurodollar Lending $65,789,473.68
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Office
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Bank of America, N.A. Bank of America Plaza Same as Eurodollar Lending $76,315,789.47
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Bank of Tokyo-Mitsubishi Trust 1251 Avenue of the Americas Same as Eurodollar Lending $65,789,473.68
Company ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Wachovia Bank. N.A. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. Same as Eurodollar Lending $47,368,421.05
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Office
Attention: Loan Administration
SunTrust Bank ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Same as Eurodollar Lending $26,315,789.47
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Office
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
The Industrial Bank of Japan, 1251 Avenue of the Americas Same as Eurodollar Lending $26,315,789.47
Limited ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Office
Attention: Loan Administration
Mellon Bank, N.A. Three Mellon Center, Rm. 1203 Same as Eurodollar Lending $13,157,894.74
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Office
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
SCHEDULE II
Permitted Existing Indebtedness
None.
EXHIBIT A-1
NOTICE OF BORROWING
[Date]
Citibank, N.A., as Administrative Agent
for the Lenders parties to the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Bank Loan Syndications
Ladies and Gentlemen:
The undersigned, PROGRESS ENERGY, INC. refers to the Credit Agreement,
dated as of November 13, 2001 (the "Credit Agreement", the terms defined therein
being used herein as therein defined), among the undersigned, certain Lenders
from time to time parties thereto, and CITIBANK, N.A., as Administrative Agent
for the Lenders, and hereby gives you notice pursuant to Section 2.02 of the
Credit Agreement that the undersigned hereby requests a Borrowing under the
Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by Section
2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is , 20 .
--------- -----
(ii) The Type of Advances comprising the Proposed Borrowing is [Base
Rate Advances][Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is $ .
---------
(iv) The Interest Period for each Eurodollar Rate Advance that is an
Advance made as part of the Proposed Borrowing is months.
------------
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:
(i) the representations and warranties contained in Section 4.01 of
the Credit Agreement are correct, before and after giving effect to the
Proposed Borrowing and to the application of the proceeds therefrom, as
though made on and as of such date; and
(ii) no event has occurred and is continuing, or would result from
such Proposed Borrowing or from the application of the proceeds therefrom,
that constitutes
A-1-1
an Event of Default or would constitute an Event of Default but for the
requirement that notice be given or time elapse or both.
Very truly yours,
PROGRESS ENERGY, INC.
By
----------------------------------
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
NOTICE OF CONVERSION
[Date]
Citibank, N.A., as Administrative Agent
for the Lenders parties to the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Bank Loan Syndications
Ladies and Gentlemen:
The undersigned, PROGRESS ENERGY, INC. refers to the Credit Agreement,
dated as of November 13, 2001 (the "Credit Agreement", the terms defined therein
being used herein as therein defined), among the undersigned, certain Lenders
from time to time parties thereto, and CITIBANK, N.A., as Administrative Agent
for the Lenders, and hereby gives you notice pursuant to Section 2.09 of the
Credit Agreement that the undersigned hereby requests a Conversion under the
Credit Agreement, and in that connection sets forth the terms on which such
Conversion (the "Proposed Conversion") is requested to be made:
(i) The Business Day of the Proposed Conversion is ,
---------------
20 .
----
(ii) The Type of, and Interest Period applicable to, the Advances (or
portions thereof) proposed to be Converted: .
----------------
(iii) The Type of Advance to which such Advances (or portions thereof)
are proposed to be Converted:
------------------------.
(iv) Except in the case of a Conversion to Base Rate Advances, the
initial Interest Period to be applicable to the Advances resulting from
such Conversion: .
------------------------------
(v) The aggregate amount of Advances (or portions thereof) proposed
to be Converted is $ .
----------------
A-2-1
The undersigned hereby certifies that, on the date hereof, and on the date
of the Proposed Conversion, no event has occurred and is continuing, or would
result from such Proposed Conversion, that constitutes an Event of Default.
Very truly yours,
PROGRESS ENERGY, INC.
By
--------------------------------------
Name:
Title:
A-2-2
EXHIBIT B
ASSIGNMENT AND ACCEPTANCE
Dated , 20
----------------- ---
Reference is made to the Credit Agreement, dated as of November 13, 2001
(as amended, modified and supplemented from time to time, the "Credit
Agreement", the terms defined therein being used herein as therein defined),
among PROGRESS ENERGY, INC., certain Lenders (as defined in the Credit
Agreement) from time to time parties thereto, and CITIBANK, N.A., as
Administrative Agent for the Lenders (the "Administrative Agent").
(the "Assignor") and (the "Assignee") agree as
------------- -----------
follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, that interest in and to all of
the Assignor's rights and obligations under the Credit Agreement as of the date
hereof that represents the percentage interest specified on Schedule 1 of all
outstanding rights and obligations under the Credit Agreement, including,
without limitation, such interest in the Assignor's Commitment (to the extent it
has not been terminated), the Advances owing to the Assignor. After giving
effect to such sale and assignment, the Assignee's Commitment (if any) and the
amount of the Advances owing to the Assignee will be as set forth in Section 2
of Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01(e) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all of
B-1
the obligations that by the terms of the Credit Agreement are required to be
performed by it as a Lender; [and] (vi) specifies as its Domestic Lending Office
(and address for notices) and Eurodollar Lending Office the offices set forth
beneath its name on the signature pages hereof [and (vii) attaches the forms
prescribed by the Internal Revenue Service of the United States certifying as to
the Assignee's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to the Assignee under
the Credit Agreement or such other documents as are necessary to indicate that
all such payments are subject to such rates at a rate reduced by an applicable
tax treaty]./1/
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date of this
Assignment and Acceptance shall be the date of acceptance thereof by the
Administrative Agent, unless otherwise specified on Schedule 1 hereto (the
"Effective Date").
5. Upon such acceptance and recording by the Administrative Agent, as of
the Effective Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Administrative Agent, from and
after the Effective Date, the Administrative Agent shall make all payments under
the Credit Agreement in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement for periods prior
to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
----------
/1/ If the Assignee is organized under the laws of a jurisdiction outside the
United States.
B-2
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By By
---------------------- --------------------------
Name: Name:
Title: Title:
Domestic Lending Office (and
address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this day
----
of , 20
------------ --
CITIBANK, N.A.,
as Administrative Agent
By
----------------------------
Title:
PROGRESS ENERGY, INC./2/
By
----------------------------
Title:
-------------------------
/2/ If required.
B-3
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE
Dated , 20
----------------- ----
Section 1
---------
Percentage Interest Assigned: %
----
Section 2
---------
Assignee's Commitment/3/: $
Aggregate Outstanding Principal Amount of Advances owing to
Assignee [specify Facility]: $
Section 3
---------
Effective Date/4/
----------
/3/ For use in connection with the Extension.
/4/ This date should be no earlier than the date of acceptance by the
Administrative Agent.
EXHIBIT C-1
FORM OF OPINION OF GENERAL COUNSEL TO THE COMPANY
[November 13, 2001]
To each of the Lenders parties to the Credit
Agreement referred to below and to Citibank, N.A.,
as Administrative Agent
Re: Progress Energy, Inc.
Ladies and Gentlemen:
This opinion is furnished to you by me as General Counsel to Progress
Energy, Inc. (the "Borrower") pursuant to Section 3.01(g) of the Credit
Agreement, dated as of November 13, 2001 (the "Credit Agreement", the terms
defined therein being used herein as therein defined), among Progress Energy,
Inc., certain lenders named therein (the "Lenders") and Citibank, N.A., as
Administrative Agent for the Lenders.
In connection with the preparation, execution and delivery of the Credit
Agreement, I have examined:
(1) The Credit Agreement.
(2) The documents furnished by the Borrower pursuant to Section 3.01 of the
Credit Agreement.
(3) The Amended and Restated Articles of Incorporation of the Borrower (the
"Charter").
(4) The By-Laws of the Borrower and all amendments thereto (the "By-Laws").
I have also examined the originals, or copies of such other corporate
records of the Borrower, certificates of public officials and of officers of the
Borrower and agreements, instruments and other documents as I have deemed
necessary as a basis for the opinions expressed below. As to questions of fact
material to such opinions, I have, when relevant facts were not independently
established by me, relied upon certificates of the Borrower or its officers or
of public officials. I have assumed the authenticity of all documents submitted
to me as originals, the conformity to originals of all documents submitted as
certified or photostatic copies and the authenticity of signatures (other than
those of the Borrower), and the due execution and
C-1-1
delivery, pursuant to due authorization, of the Credit Agreement by the Lenders
and the Agent and the validity and binding effect thereof on such parties. For
purposes of my opinions expressed in paragraph 1 below as to existence and good
standing, I have relied as of their respective dates on certificates of public
officials, copies of which are attached hereto as Exhibit A. Whenever the phrase
"to my knowledge" is used in this opinion it refers to my actual knowledge and
the actual knowledge of the attorneys who work under my supervision and who were
involved in the representation of the Borrower in connection with the
transactions contemplated by the Credit Agreement.
I or attorneys working under my supervision are qualified to practice law
in the States of North Carolina and Florida, and the opinions expressed herein
are limited to the law of the States of North Carolina and Florida, the Federal
law of the United States and, in reliance on a certificate issued by the
Secretary of State of South Carolina and attached hereto as part of Exhibit A,
the laws of the State of South Carolina for purposes of the first sentence of
opinion paragraph 1 below.
Based upon the foregoing and upon such investigation as I have deemed
necessary, I am of the following opinion:
1. Each of the Borrower and CP&L is a corporation duly organized, validly
existing and in good standing under the laws of the State of North Carolina, and
CP&L is duly qualified to do business and in good standing in the State of South
Carolina. Each of Florida Power and FPC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida. Progress
Capital is a corporation duly organized, validly existing and in good standing
under the laws of the State of Florida. The Borrower has the corporate power and
authority to enter into the transactions contemplated by the Credit Agreement.
2. The execution, delivery and performance of the Credit Agreement by the
Borrower have been duly authorized by all necessary corporate action on the part
of the Borrower and the Credit Agreement has been duly executed and delivered by
the Borrower.
3. The execution, delivery and performance of the Credit Agreement by the
Borrower will not (i) violate the Charter or the By-Laws or any law, rule or
regulation applicable to the Borrower (including, without limitation, Regulation
X of the Board of Governors of the Federal Reserve System) or (ii) result in a
breach of, or constitute a default under, any judgment, decree or order binding
on the Borrower, or any indenture, mortgage, contract or other instrument to
which it is a party or by which it is bound.
4. No authorization, approval or other action by, and no notice to or
filing with any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower of the Credit Agreement,
other than the SEC Order, which has been duly issued and is in full force and
effect.
5. To my knowledge, except as described in the reports and registration
statements that the Borrower, CP&L, FPC and Florida Power have filed with the
Securities and Exchange
C-1-2
Commission, there are no pending or overtly threatened actions or proceedings
against the Borrower or any of such Subsidiaries before any court, governmental
agency or arbitrator, that may materially adversely affect the financial
condition, operations or properties of the Borrower and its Subsidiaries, taken
as a whole.
The opinions set forth above are subject to the qualification that no
opinion is expressed herein as to the enforceability of the Credit Agreement or
any other document.
The foregoing opinions are solely for your benefit and may not be relied
upon by any other Person other than (i) any other Person that may become a
Lender under the Credit Agreement after the date hereof and (ii) Hunton &
▇▇▇▇▇▇▇▇ and ▇▇▇▇ & ▇▇▇▇▇▇▇▇, in connection with their respective opinions
delivered on the date hereof under Section 3.01 of the Credit Agreement.
Very truly yours,
C-1-3
EXHIBIT C-2
FORM OF OPINION OF SPECIAL COUNSEL FOR THE COMPANY
[November 13, 2001]
To each of the Lenders parties to the Credit
Agreement referred to below and to Citibank, N.A.,
as Administrative Agent
Re: Progress Energy, Inc.
Ladies and Gentlemen:
This opinion is furnished to you by us as counsel for Progress Energy, Inc.
(the "Borrower") pursuant to Section 3.01(g) of the Credit Agreement, dated as
of November 13, 2001 (the "Credit Agreement", the terms defined therein being
used herein as therein defined), among Progress Energy, Inc., certain lenders
named therein (the "Lenders") and Citibank, N.A., as Administrative Agent for
the Lenders.
In connection with the preparation, execution and delivery of the Credit
Agreement, we have examined:
(1) The Credit Agreement.
(2) The documents furnished by the Borrower pursuant to Section 3.01 of the
Credit Agreement.
(3) The opinion letter of even date herewith, addressed to you by ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, General Counsel to the Company and delivered in connection with the
transactions contemplated by the Credit Agreement (the "Company Opinion
Letter").
We have also examined the originals, or copies of such other corporate
records of the Borrower, certificates of public officials and of officers of the
Borrower and agreements, instruments and other documents as we have deemed
necessary as a basis for the opinions expressed below. As to questions of fact
material to such opinions, we have, when relevant facts were not independently
established by us, relied upon certificates of the Borrower or its officers or
of public officials. We have assumed the authenticity of all documents submitted
to us as originals, the conformity to originals of all documents submitted as
certified or photostatic copies and the authenticity of the originals (other
than those of the Borrower), and the due execution and delivery, pursuant to due
authorization, of the Credit Agreement by the Lenders and the
C-2-1
Agent and the validity and binding effect thereof on such parties. Whenever the
phrase "to our knowledge" is used in this opinion it refers to the actual
knowledge of the attorneys of this firm involved in the representation of the
Borrower without independent investigation.
We are qualified to practice law in the States of North Carolina, Florida
and New York, and the opinions expressed herein are limited to the law of the
States of North Carolina, Florida and New York and the federal law of the United
States. To the extent that our opinions expressed herein depend upon opinions
expressed in paragraphs 1 through 4 of the Company Opinion Letter, we have
relied without independent investigation on the accuracy of the opinions
expressed in the Company Opinion Letter, subject to the assumptions,
qualifications and limitations set forth in the Company Opinion Letter.
Based upon the foregoing and upon such investigation as we have deemed
necessary, we are of the opinion that the Credit Agreement constitutes the
legal, valid and binding obligation of the Borrower enforceable against the
Borrower in accordance with its terms except as enforcement may be limited or
otherwise affected by (a) bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws affecting the rights of creditors
generally and (b) principles of equity, whether considered at law or in equity.
The opinion set forth above is subject to the following qualifications:
(a) In addition to the application of equitable principles described above,
courts have imposed an obligation on contracting parties to act reasonably and
in good faith in the exercise of their contractual rights and remedies, and may
also apply public policy considerations in limiting the right of parties seeking
to obtain indemnification under circumstances where the conduct of such parties
is determined to have constituted negligence.
(b) No opinion is expressed herein as to (i) Section 8.05 of the Credit
Agreement, (ii) the enforceability of provisions purporting to grant to a party
conclusive rights of determination, (iii) the availability of specific
performance or other equitable remedies, (iv) the enforceability of rights to
indemnity under federal or state securities laws or (v) the enforceability of
waivers by parties of their respective rights and remedies under law.
(c) No opinion is expressed herein as to provisions, if any, in the Credit
Agreement, which (A) purport to excuse, release or exculpate a party for
liability for or indemnify a party against the consequences of its own acts, (B)
purport to make void any act done in contravention thereof, (C) purport to
authorize a party to make binding determinations in its sole discretion, (D)
relate to the effects of laws which may be enacted in the future, (E) require
waivers, consents or amendments to be made only in writing, (F) purport to waive
rights of offset or to create rights of set off other than as provided by
statute, or (G) purport to permit acceleration of indebtedness and the exercise
of remedies by reason of the occurrence of an immaterial breach of the Credit
Agreement or any related document. Further, we express no opinion as to the
necessity for any Lender, by reason of such Lender's particular circumstances,
to qualify to transact business in the State of New York or as to any Lender's
liability for taxes in any jurisdiction.
The foregoing opinion is solely for your benefit and may not be relied upon
by any other Person other than (i) any other Person that may become a Lender
under the Credit Agreement
C-2-2
after the date hereof in accordance with the provisions thereof and (ii) King &
Spalding, in connection with their opinion delivered on the date hereof under
Section 3.01 of the Credit Agreement.
Very truly yours,
C-2-3
EXHIBIT C-3
FORM OF OPINION OF GENERAL COUNSEL TO THE COMPANY UPON
EXTENSION OF THE COMMITMENT TERMINATION DATE
AND EXERCISE OF THE TERM LOAN CONVERSION OPTION
, 20
------------------ ---
To each of the Lenders parties to the Credit
Agreement referred to below and to Citibank, N.A.,
as Administrative Agent
Re: Progress Energy, Inc.
Ladies and Gentlemen:
This opinion is furnished to you by me as General Counsel to Progress
Energy, Inc. (the "Borrower") in connection with [the extension of the
Commitment Termination Date until , under Section 2.15 (the
-------- -- ------
"Extension")]/1/ [the exercise of the Term Loan Conversion Option under Section
2.16 (the "Exercise")]/2/ of the Credit Agreement, dated as of November 13, 2001
(the "Credit Agreement", the terms defined therein being used herein as therein
defined), among Progress Energy, Inc., certain lenders from time to time parties
thereto (the "Lenders") and Citibank, N.A., as Administrative Agent for the
Lenders.
In connection with the preparation, execution and delivery of the Credit
Agreement, I have examined:
(1) The Credit Agreement.
(2) The documents furnished by the Borrower pursuant to Section 3.01 of
the Credit Agreement.
[(3) The Request for Extension of Commitment Termination Date and
Certificate, dated , submitted by the Borrower in connection with the
-----
Extension.]/1/
[(4) The Notice of Term Loan Conversion Option, dated , submitted by
-----
the Borrower in connection with the Exercise.]/2/
(5) The Amended and Restated Articles of Incorporation of the Borrower
(the"Charter").
----------
/1/ For use in connection with the Extension.
/2/ For use in connection with the Exercise.
C-3-1
(6) The By-Laws of the Borrower and all amendments thereto (the "By-Laws").
I have also examined the originals, or copies of such other corporate
records of the Borrower, certificates of public officials and of officers of the
Borrower and agreements, instruments and other documents as I have deemed
necessary as a basis for the opinions expressed below. As to questions of fact
material to such opinions, I have, when relevant facts were not independently
established by me, relied upon certificates of the Borrower or its officers or
of public officials. I have assumed the authenticity of all documents submitted
to me as originals, the conformity to originals of all documents submitted as
certified or photostatic copies and the authenticity of the signatures (other
than those of the Borrower), and the due execution and delivery, pursuant to due
authorization, of the Credit Agreement by the Lenders and the Administrative
Agent and the validity and binding effect thereof on such parties. For purposes
of my opinions expressed in paragraph 1 below as to existence and good standing,
I have relied as of their respective dates on certificates of public officials,
copies of which are attached hereto as Exhibit A. Whenever the phrase "to my
knowledge" is used in this opinion it refers to the my actual knowledge and the
actual knowledge of the attorneys who work under my supervision and who were
involved in the representation of the Borrower in connection with the
transactions contemplated by the Credit Agreement.
[We have also reviewed the NCUC Order and the SCPSC Order, each of which is
attached hereto.]
I or attorneys working under my supervision are qualified to practice law
in the States of North Carolina and Florida, and the opinions expressed herein
are limited to the law of the States of North Carolina and Florida, the Federal
law of the United States and, in reliance on a certificate issued by the
Secretary of State of South Carolina and attached hereto as part of Exhibit A,
the laws of the State of South Carolina for purposes of the first sentence of
opinion paragraph 1 below.
Based upon the foregoing and upon such investigation as I have deemed
necessary, I am of the following opinion:
1. The Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the State of North Carolina, and is duly
qualified to do business and in good standing in the State of South Carolina.
2. The execution, delivery and performance by the Borrower of the Credit
Agreement, [after giving effect to the Extension,]/1/ [after giving effect to
the Exercise,]/2/ are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, and do not violate (i) the Charter
or the By-Laws or any law, rule or regulation applicable to the Borrower
(including, without limitation, Regulation X of the Board of Governors of the
Federal Reserve System) or (ii) result in breach of, or constitute a default
under, any judgment, decree or order binding on the Borrower, or any indenture,
mortgage, contract or other instrument to which it is a party or by which it is
bound. The Credit Agreement has been duly executed and delivered on behalf of
the Borrower.
----------
/1/ For use in connection with the Extension.
/2/ For use in connection with the Exercise.
C-3-2
3. No authorization, approval or other action by, and no notice to or
filing with any governmental authority or regulatory body is required for the
due execution, delivery and performance, by the Borrower of the Credit
Agreement, [after giving effect to the Extension,]/1/ [after giving effect to
the Exercise,]/2/ other than the SEC Order, which has been duly issued and is in
full force and effect.
4. To my knowledge, except as described in the reports and registration
statements that the Borrower has filed with the Securities and Exchange
Commission, there are no pending or overtly threatened actions or proceedings
against the Borrower or any of the Subsidiaries before any court, governmental
agency or arbitrator, that may materially adversely affect the financial
condition, operations or properties of the Borrower and its Subsidiaries, taken
as a whole.
The opinions set forth above are subject to the qualification that no
opinion is expressed herein as to the enforceability of the Credit Agreement or
any other document.
The foregoing opinions are solely for your benefit and may not be relied
upon by any other Person other than (i) any other Person that may become a
Lender under the Credit Agreement after the date hereof and (ii) Hunton &
▇▇▇▇▇▇▇▇ and ▇▇▇▇ & ▇▇▇▇▇▇▇▇, in connection with their opinion delivered on the
date hereof under Section 3.01 of the Credit Agreement.
Very truly yours,
----------
/1/ For use in connection with the Extension.
/2/ For use in connection with the Exercise.
C-3-3
EXHIBIT C-4
FORM OF OPINION OF SPECIAL COUNSEL TO THE COMPANY UPON
EXTENSION OF THE COMMITMENT TERMINATION DATE
AND EXERCISE OF THE TERM LOAN CONVERSION OPTION
, 20
------------------ ---
To each of the Lenders parties to the Credit
Agreement referred to below and to Citibank, N.A.,
as Administrative Agent
Re: Progress Energy, Inc.
Ladies and Gentlemen:
This opinion is furnished to you by us as counsel for Progress Energy, Inc.
(the "Borrower") in connection with [the extension of the Commitment Termination
Date until , under Section 2.15 (the "Extension")]/1/ [the
-------- -- -----
exercise of the Term Loan Conversion Option under Section 2.16 (the
"Exercise")]/2/ of the Credit Agreement, dated as of November 13, 2001 (the
"Credit Agreement", the terms defined therein being used herein as therein
defined), among Progress Energy, Inc., certain lenders from time to time parties
thereto (the "Lenders") and Citibank, N.A., as Administrative Agent for the
Lenders.
In connection with the preparation, execution and delivery of the Credit
Agreement, we have examined:
(1) The Credit Agreement.
(2) The documents furnished by the Borrower pursuant to Section 3.01 of
the Credit Agreement.
[(3) The Request for Extension of Commitment Termination Date and
Certificate, dated , submitted by the Borrower in connection with the
-----
Extension.]/1/
[(4) The Notice of Term Loan Conversion Option, dated , submitted by
-----
the Borrower in connection with the Exercise.]/2/
----------
/1/ For use in connection with the Extension.
/2/ For use in connection with the Exercise.
C-4-1
(5) The opinion letter of even date herewith, addressed to you by [▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇], General Counsel to the Borrower and delivered in connection with
the transactions contemplated by the Credit Agreement (the "Borrower Opinion
Letter").
We have also examined the originals, or copies of such other corporate
records of the Borrower, certificates of public officials and of officers of the
Borrower and agreements, instruments and other documents as we have deemed
necessary as a basis for the opinions expressed below. As to questions of fact
material to such opinions, we have, when relevant facts were not independently
established by us, relied upon certificates of the Borrower or its officers or
of public officials. We have assumed the authenticity of all documents submitted
to us as originals, the conformity to originals of all documents submitted as
certified or photostatic copies and the authenticity of the originals (other
than those of the Borrower), and the due execution and delivery, pursuant to due
authorization, of the Credit Agreement by the Lenders and the Administrative
Agent and the validity and binding effect thereof on such parties. Whenever the
phrase "to our knowledge" is used in this opinion it refers to the actual
knowledge of the attorneys of this firm involved in the representation of the
Borrower without independent investigation.
[We have also reviewed the NCUC Order and the SCPSC Order, each of which is
attached hereto.]
We are qualified to practice law in the States of North Carolina, Florida
and New York, and the opinions expressed herein are limited to the law of the
States of North Carolina, Florida and New York applicable to public utilities
and the federal law of the United States. To the extent that our opinions
expressed herein depend upon opinions expressed in paragraphs 1 through 4 of the
Borrower Opinion Letter, we have relied without independent investigation on the
accuracy of the opinions expressed in the Borrower Opinion Letter, subject to
the assumptions, qualifications and limitations set forth in the Borrower
Opinion Letter.
Based upon the foregoing and upon such investigation as we have deemed
necessary, we are of the following opinion the Credit Agreement [after giving
effect to the Extension] [after giving effect to the exercise of the Term Loan
Conversion Option] constitutes the valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms except as
enforcement may be limited or otherwise affected by (a) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws affecting
the rights of creditors generally and (b) principles of equity, whether
considered at law or in equity.
The opinion set forth above is subject to the following qualifications:
(a) In addition to the application of equitable principles described above,
courts have imposed an obligation on contracting parties to act reasonably and
in good faith in the exercise of their contractual rights and remedies, and may
also apply public policy considerations in limiting the right of parties seeking
to obtain indemnification under circumstances where the conduct of such parties
is determined to have constituted negligence.
(b) No opinion is expressed herein as to (i) Section 8.05 of the Credit
Agreement, (ii) the enforceability of provisions purporting to grant to a party
conclusive rights of determination,
C-4-2
(iii) the availability of specific performance or other equitable remedies, (iv)
the enforceability of rights to indemnity under federal or state securities laws
or (v) the enforceability of waivers by parties of their respective rights and
remedies under law.
(c) No opinion is expressed herein as to provisions, if any, in the Credit
Agreement, which (A) purport to excuse, release or exculpate a party for
liability for or indemnify a party against the consequences of its own acts, (B)
purport to make void any act done in contravention thereof, (C) purport to
authorize a party to make binding determinations in its sole discretion, (D)
relate to the effects of laws which may be enacted in the future, (E) require
waivers, consents or amendments to be made only in writing, (F) purport to waive
rights of offset or to create rights of set off other than as provided by
statute, or (G) purport to permit acceleration of indebtedness and the exercise
of remedies by reason of the occurrence of an immaterial breach of the Credit
Agreement or any related document. Further, we express no opinion as to the
necessity for any Lender, by reason of such Lender's particular circumstances,
to qualify to transact business in the State of New York or as to any Lender's
liability for taxes in any jurisdiction.
The foregoing opinion is solely for your benefit and may not be relied upon
by any other Person other than (i) any other Person that may become a Lender
under the Credit Agreement after the date hereof in accordance with the
provisions thereof and (ii) King & Spalding, in connection with their opinion
delivered on the date hereof under Section 3.01 of the Credit Agreement.
Very truly yours,
C-4-3
EXHIBIT D
FORM OF OPINION OF COUNSEL
TO THE ADMINISTRATIVE AGENT
AND THE ARRANGERS
[DATE]
To Citibank, N.A. ("Citibank"), as Administrative
Agent for the Lenders referred to below, and to each
of the Arrangers and Lenders parties to the Credit
Agreement referred to below
Re: Progress Energy, Inc.
Ladies and Gentlemen:
We have acted as counsel to the Administrative Agent and the Arrangers in
connection with the preparation, execution and delivery of the Credit Agreement,
dated as of November 13, 2001 (the "Credit Agreement", the terms defined therein
being used herein as therein defined), among Progress Energy, Inc., certain
Lenders from time to time parties thereto, and Citibank, N.A., as Administrative
Agent for the Lenders.
In this connection, we have examined the following documents:
1. a counterpart of the Credit Agreement, executed by the parties
thereto;
2. the documents furnished by or on behalf of the Borrower pursuant to
subsections (b) through (g) of Section 3.01 of the Credit Agreement,
including, without limitation, the opinion of Hunton & ▇▇▇▇▇▇▇▇ (the
"Borrower Opinion").
In our examination of the documents referred to above, we have assumed the
authenticity of all such documents submitted to us as originals, the genuineness
of all signatures, the due authority of the parties executing such documents and
the conformity to the originals of all such documents submitted to us as copies.
We have also assumed that you have independently evaluated, and are satisfied
with, the creditworthiness of the Borrower and the business terms reflected in
the Credit Agreement. We have relied, as to factual matters, on the documents we
have examined.
To the extent that our opinions expressed below involve conclusions as to
matters governed by law other than the law of the State of New York, we have
relied upon the Borrower Opinion and have assumed without independent
investigation the correctness of the matters set
D-1
forth therein, our opinions expressed below being subject to the assumptions,
qualifications and limitations set forth in the Borrower Opinion.
Based upon and subject to the foregoing, and subject to the qualifications
set forth below, we are of the opinion that the Credit Agreement is the legal,
valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms.
Our opinion is subject to the following qualifications:
(a) The enforceability of the Borrower's obligations under the Credit
Agreement is subject to the effect of any applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar law affecting
creditors' rights generally.
(b) The enforceability of the Borrower's obligations under the Credit
Agreement is subject to the effect of general principles of equity, including
(without limitation) concepts of materiality, reasonableness, good faith and
fair dealing (regardless of whether considered in a proceeding in equity or at
law). Such principles of equity are of general application, and, in applying
such principles, a court, among other things, might not allow a contracting
party to exercise remedies in respect of a default deemed immaterial, or might
decline to order an obligor to perform covenants.
(c) We note further that, in addition to the application of equitable
principles described above, courts have imposed an obligation on contracting
parties to act reasonably and in good faith in the exercise of their contractual
rights and remedies, and may also apply public policy considerations in limiting
the right of parties seeking to obtain indemnification under circumstances where
the conduct of such parties is determined to have constituted negligence.
(d) We express no opinion herein as to (i) the enforceability of Section
8.05 of the Credit Agreement, (ii) the enforceability of provisions purporting
to grant to a party conclusive rights of determination, (iii) the availability
of specific performance or other equitable remedies, (iv) the enforceability of
rights to indemnity under federal or state securities laws, or (v) the
enforceability of waivers by parties of their respective rights and remedies
under law.
(e) Our opinions expressed above are limited to the law of the State of New
York, and we do not express any opinion herein concerning any other law.
The foregoing opinion is solely for your benefit and may not be relied upon
by any other person or entity.
Very truly yours,
D-2
EXHIBIT E
FORM OF REQUEST FOR EXTENSION OF
THE COMMITMENT TERMINATION DATE
$500,000,000
(364-DAY FACILITY )
CREDIT AGREEMENT
dated as of November 13, 2001
----------
PROGRESS ENERGY, INC.
(Borrower)
AND
THE BANKS LISTED ON THE SIGNATURE PAGES HEREOF
(Banks)
and
CITIBANK, N.A.
(Administrative Agent)
Request for Extension of Commitment Termination Date
and
Certificate of Representations and Warranties and No Default
I, [______________], [_________________] of Progress Energy, Inc., do
hereby request that the Commitment Termination Date of the Credit Agreement,
dated as of November 13, 2001 (the "Credit Agreement", the terms defined therein
being used herein as therein defined), among Progress Energy, Inc., certain
Lenders from time to time parties thereto, and Citibank, N.A., as Administrative
Agent for the Lenders, be extended for an additional 364-day period (hereinafter
the "Proposed Extension") pursuant to Section 2.15 of the Credit Agreement and,
in connection therewith, hereby certify as follows:
(i) as of the date hereof, the representations and warranties set
forth in Section 4.01 (including without limitation those regarding any
required approvals of or notices to governmental bodies) of the Credit
Agreement are and will be as of the
E-1
effective date of the Proposed Extension accurate both before and after
giving effect to the Proposed Extension; and
(ii) as of the date hereof, no Event of Default, as defined in Section
6.01 of the Credit Agreement, has occurred, nor has any event occurred,
that with the giving of notice or the passage of time or both, would
constitute an Event of Default, in either case both before and after giving
effect to the Proposed Extension.
Witness my hand this day of , .
------ --------- ----
------------------------
[________________]
E-2
EXHIBIT F
FORM OF REQUEST FOR
TERM LOAN CONVERSION OPTION
$500,000,000
(364-DAY FACILITY)
CREDIT AGREEMENT
dated as of November 13, 2001
----------
PROGRESS ENERGY, INC.
(Borrower)
AND
THE BANKS LISTED ON THE SIGNATURE PAGES HEREOF
(Banks)
and
CITIBANK, N.A.
(Administrative Agent)
Request for Term Loan Conversion Option
and
Certificate of Representations and Warranties and No Default
I, [______________], [_______________] of Progress Energy, Inc., do hereby
exercise the Term Loan Conversion Option of the Credit Agreement, dated as of
November 13, 2001 (the "Credit Agreement", the terms defined therein being used
herein as therein defined), among Progress Energy, Inc., certain Lenders from
time to time parties thereto the Banks, and Citibank, N.A., as Administrative
Agent for the Lenders, pursuant to Section 2.16 of the Credit Agreement and, in
connection therewith, hereby certify as follows:
(i) as of the date hereof, the representations and warranties set
forth in Section 4.01 (including without limitation those regarding any
required approvals of or notices to governmental bodies) of the Credit
Agreement are and will be as of the effective date of the Term Loan
Conversion Option accurate both before and after giving effect thereto; and
F-1
(ii) as of the date hereof, no Event of Default, as defined in Section
6.01 of the Credit Agreement, has occurred, nor has any event occurred,
that with the giving of notice or the passage of time or both, would
constitute an Event of Default, in either case both before and after giving
effect to the effectiveness of the Term Loan Conversion Option.
Witness my hand this day of , .
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[________________]
Vice President and Treasurer
F-2
EXHIBIT G
FORM OF COMPLIANCE CERTIFICATE
[Letterhead of Progress Energy, Inc.]
[Date]
To the Lenders party to the
Credit Agreement referred
to below and to Citibank, N.A.
as Administrative Agent
Progress Energy, Inc.
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Ladies and Gentlemen:
This compliance certificate is furnished to you pursuant to Section 5.01(i)(ii)
of the Credit Agreement, dated as of November 13, 2001 (the "Credit Agreement"),
among Progress Energy, Inc., a North Carolina corporation (the "Borrower"), the
banks listed on the signature pages thereof (the "Banks"), and Citibank, N.A.
("Citibank"), as administrative agent (the "Administrative Agent") for the
Lenders (as hereinafter defined). Terms defined in the Credit Agreement are used
herein as therein defined.
1. As of [_______], 2001, the ratio of Consolidated Indebtedness of the Borrower
and its Subsidiaries to Total Capitalization was to 1.0, calculated, in
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accordance with Section 5.01(j) of the Credit Agreement, as follows:
A. Indebtedness as of such date was $ , calculated as follows:
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Current Indebtedness: Amount
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[List all forms of current Debt]
---------------------------------- $
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----------------------------------
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Total current Indebtedness $
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Long-term Indebtedness : Amount
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[list all forms of long-term Indebtedness ]
---------------------------------- $
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G-1
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Total long-term Indebtedness $
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Total Indebtedness (current Indebtedness plus long-term $
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Indebtedness)
B. Total Capitalization as of such date was $ , calculated as follows:
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Consolidated Indebtedness $
Preferred Stock $
Common Stock $
Retained Earnings $
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2. As of [_______], 2001, and as of the date hereof, no Event of Default and no
event that, with the giving of notice or lapse of time or both, will constitute
an Event of Default, has occurred and in continuing.
I hereby certify that the calculations set forth in paragraph 1 hereof were
prepared in accordance with generally accepted accounting principles consistent
with those applied in the preparation of the financial statements referred to in
Section 4.01(e) of the Credit Agreement.
Very truly yours,
PROGRESS ENERGY, INC.
By:
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Name:
Title:
G-2