EXHIBIT 4.5
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DEBT SERVICE RESERVE LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
among
CE GENERATION, LLC,
as Borrower
and
THE BANKS NAMED HEREIN
and
CREDIT SUISSE FIRST BOSTON,
as Agent
dated as of March 2, 1999
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Table of Contents
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ARTICLE I: DEFINITIONS; CONSTRUCTION....................................................1
SECTION 1.1 Definitions.....................................................1
SECTION 1.2 Construction....................................................6
ARTICLE II: DEBT SERVICE RESERVE LETTER OF CREDIT........................................7
SECTION 2.1 Commitments.....................................................7
SECTION 2.2 Amount and Term of Debt Service Reserve Letter of
Credit.......................................................................7
SECTION 2.3 Participations in Debt Service Reserve Letter of
Credit.......................................................................9
SECTION 2.4 Drawing and Reimbursement.......................................9
SECTION 2.5 Fees...........................................................10
SECTION 2.6 Interest.......................................................11
SECTION 2.7 Repayment......................................................12
SECTION 2.8 Prepayments....................................................13
SECTION 2.9 Security.......................................................14
SECTION 2.10 Payments......................................................14
SECTION 2.11 Computation of Interest and Fees..............................15
SECTION 2.12 Payments on Non-Business Days.................................15
SECTION 2.13 Sharing of Payments, Etc......................................15
SECTION 2.14 Evidence of Debt..............................................15
SECTION 2.15 Increased Debt Service Reserve Letter of Credit
Costs.......................................................................16
SECTION 2.16 Capital Adequacy..............................................17
SECTION 2.17 Taxes.........................................................17
SECTION 2.18 Change of Law.................................................21
SECTION 2.19 Non-Availability..............................................21
SECTION 2.20 Assignments by Banks..........................................22
SECTION 2.20A. Mitigation Provision........................................22
SECTION 2.21 Reduction in Commitments/Loans................................23
SECTION 2.22 Right of Set-off..............................................23
SECTION 2.23 Minimum Amounts...............................................24
ARTICLE III: CONDITIONS PRECEDENT........................................................24
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SECTION 3.1 Conditions Precedent to Issuance of Debt Service
Reserve Letter of Credit....................................................24
ARTICLE IV: REPRESENTATIONS AND WARRANTIES..............................................25
SECTION 4.1 Representations and Warranties.................................25
ARTICLE V: COVENANTS...................................................................26
SECTION 5.1 Covenants......................................................26
ARTICLE VI: DEFAULTS AND REMEDIES.......................................................27
SECTION 6.1 Defaults and Remedies..........................................27
ARTICLE VII: CHARACTER OF OBLIGATIONS....................................................29
SECTION 7.1 Obligations Absolute...........................................29
SECTION 7.2 Limited Liability of Agent and Banks...........................30
ARTICLE VIII: THE AGENT..................................................................31
SECTION 8.1 Authorization and Action.......................................31
SECTION 8.2 Agent's Reliance, Etc..........................................32
SECTION 8.3 Initial Bank and Affiliates....................................32
SECTION 8.4 Bank Credit Decision...........................................32
SECTION 8.5 Indemnification................................................33
SECTION 8.6 Successor Agent................................................33
SECTION 8.7 Collateral.....................................................34
ARTICLE IX: MISCELLANEOUS...............................................................34
SECTION 9.1 Amendments, Etc................................................34
SECTION 9.2 Notices, Etc...................................................35
SECTION 9.3 No Waiver; Remedies............................................35
SECTION 9.4 Costs and Expenses.............................................35
SECTION 9.5 Application of Moneys..........................................36
SECTION 9.6 Severability...................................................36
SECTION 9.7 Limitation of Liability........................................36
SECTION 9.8 Binding Effect.................................................37
SECTION 9.9 Assignments and Participations.................................37
SECTION 9.10 Indemnification...............................................39
SECTION 9.11 Governing Law.................................................40
SECTION 9.12 Consent to Jurisdiction and Venue.............................40
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SECTION 9.13 Headings......................................................41
SECTION 9.14 Execution in Counterparts.....................................41
SECTION 9.15 Waiver of Jury Trial..........................................41
Exhibit A Form of Debt Service Reserve Letter of Credit
Exhibit B Debt Service Reserve Letter of Credit Promissory Note
Exhibit C Form of Commitment Transfer Supplement
Exhibit D Reserve Bond Note
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DEBT SERVICE RESERVE LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
This Debt Service Reserve Letter of Credit and Reimbursement Agreement
(this "Agreement"), dated as of March 2, 1999, is entered into by and among (1)
CE GENERATION, LLC, a Delaware limited liability company (the "Borrower"), (2)
CREDIT SUISSE FIRST BOSTON (in its individual capacity, "Initial Bank"), (3)
XXXXXX COMMERCIAL PAPER INC., as a Bank (as defined below), (4) each other bank
or other entity that becomes a party hereto pursuant to Section 9.9
(collectively, the "Banks") and (5) CREDIT SUISSE FIRST BOSTON, as agent (in
such capacity, together with its successors in such capacity, the "Agent") for
the Banks.
A. Pursuant to an Indenture dated as of March 2, 1999 (the "Indenture")
between the Borrower and Chase Manhattan Bank and Trust Company, National
Association, as trustee (in such capacity, together with its successors in such
capacity, the "Trustee"), the Borrower has authorized the creation of issues of
nonrecourse bonds, debentures, promissory notes and other evidences of indebted
ness to be issued in one or more series (collectively, the "Securities"), the
sale proceeds of which are to be advanced to the Borrower pursuant to the
Indenture.
B. The Borrower has requested that Initial Bank issue and the Banks
participate in, and Initial Bank is willing to issue and the Banks are willing
to participate in, the Debt Service Reserve Letter of Credit upon the terms and
conditions hereinafter set forth.
ARTICLE I
DEFINITIONS; CONSTRUCTION
SECTION 1.1 Definitions. (a) Terms defined in the Indenture (in the form of
such terms as they exist on the date of this Agreement and as they may hereafter
be amended from time to time, but only to the extent that the incorporation of
any such amendments into this Agreement has been consented to by the Required
Banks in writing) have, unless the same are defined herein or the context
otherwise requires, the same meaning when used herein (with appropriate
substitutions including without limitation the following: (i) the word
"Indenture" as it appears in the definition of Governmental Approvals shall be
replaced by the words "this Agree-
ment" and (ii) the word "Trustee" as it appears in the definition of Officers'
Certificate shall be replaced by the word "Agent").
(b) The following terms are used in this Agreement with the following
respective meanings:
"Adjusted Base Rate" means the higher of (i) the Federal Funds Rate plus
.375% and (ii) the Prime Rate.
"Adjusted Base Rate Loan" means a Loan bearing interest at the Adjusted
Base Rate.
"Business Day" means a day (other than a Saturday or Sunday) on which banks
are open for business in New York, New York, and, in matters relating to the
determination of a LIBOR Rate or Interest Period, a day on which the London
interbank market deals in U.S. Dollar deposits.
"Closing Date" means the date on which the conditions precedent set forth
in Section 3.1 have been fulfilled.
"Commitment" has the meaning set forth in Section 2.1.
"Commitment Transfer Supplement" means a Commitment Transfer Supplement
entered into by a Bank and another Person substantially in the form of Exhibit
C.
"Credit Documents" means this Agreement, the Notes and the Debt Service
Reserve Letter of Credit.
"DSR LOC Note Repayment Date" means, in respect of each Loan, the later of
(i) ten (10) years from the Closing Date or (ii) five (5) years from the date of
the Drawing giving rise to such Loan.
"Debt Service Reserve Letter of Credit" means a letter of credit
substantially in the form of Exhibit A, issued or to be issued by the Initial
Bank, or any letter of credit issued by the Initial Bank in replacement thereof.
"Default" means an event that with the giving of any required notice and/or
the lapse of any required time would constitute an Event of Default.
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"Depositary Bank" means Chase Manhattan Bank and Trust Company, National
Association, as depositary bank under the Depositary Agreement or any successor
thereto pursuant to the terms thereof.
"Drawing" means a drawing under the Debt Service Reserve Letter of Credit.
"Event of Default" has the meaning set forth in Section 6.1.
"Excluded Taxes" has the meaning set forth in Section 2.17(a).
"Expiration Date" means the earliest of (a) three hundred sixty-four (364)
days from the Closing Date, or (b) the date on which the Debt Service Reserve
Letter of Credit is terminated on the terms set forth herein.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.
"Final Maturity Date" means the latest Stated Maturity date of any series
of Securities.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Indemnified Party" has the meaning set forth in Section 9.10.
"Indenture" has the meaning set forth in Recital A.
"Interest Payment Date" means with respect to any (i) Debt Service Reserve
LOC Loan, each June 15th and December 15th, or any other date as may be agreed
from time to time by Borrower and Agent hereunder, commencing on the first such
date after the applicable drawing, and any date on which interest on such Debt
Service Reserve LOC Loan becomes due and payable at redemption, the final
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maturity date or declaration of acceleration, or otherwise, and (ii) Debt
Service Reserve Bond, each June 15th and December 15th, commencing on the first
such date after the applicable conversion date, and any date on which interest
on such Debt Service Reserve Bond becomes due and payable at redemption, the
final maturity date or declaration of acceleration, or otherwise.
"Interest Period" means, with respect to any Loan bearing interest at the
LIBOR Rate, an interest period of one (1), two (2), three (3) or six (6) months
(or, such other period as mutually agreed between the Borrower and the Agent);
provided, however, that such Interest Period shall, in all events, end no later
than the next Principal Payment Date to occur.
"LIBOR Rate" means, for any Loan bearing interest at the LIBOR Rate, a rate
per annum equal to the offered rate for deposits in United States dollars (in
the approximate amount and having approximately the same maturity as the LIBOR
Rate Loan to be made) which appears on the Reuters Screen LIBOR Page as of 11:00
a.m. (London time), two (2) Business Days prior to the first day of the Interest
Period for such LIBOR Rate Loan, and in case of variations in rates, the
arithmetic average thereof rounded upwards, if necessary, to the nearest 1/100
of 1%, calculated by the Agent.
"LIBOR Rate Loan" means a Loan bearing interest at the LIBOR Rate.
"Loan" has the meaning set forth in Section 2.4.
"Mortgage Basis" means, in respect of each Reserve Bond, an amortization
schedule which, taking into account the interest rate applicable to such Reserve
Bond determined in accordance with Section 2.7(f) and assuming payments are made
on Interest Payment Dates, results in levelized payment of the principal of and
interest on such Reserve Bond to and including the maturity date applicable to
such Reserve Bond determined in accordance with Section 2.7(f).
"Note" has the meaning set forth in Section 2.14(a).
"Obligations" means all of the obligations of the Borrower to the Banks and
the Agent under this Agreement, the Notes and the Reserve Bonds, whether for
principal (including reimbursement of amounts drawn under the Debt Service
Reserve Letter of Credit), interest, fees, expenses, indemnification or
otherwise.
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"Outstanding Amount" means an amount not in excess of $24,500,000 at any
time as set forth on Schedule VI to the Indenture and as the same may be
reduced, increased or reinstated from time to time in accordance with the terms
and provisions hereof and of the Debt Service Reserve Letter of Credit.
"Participant" has the meaning set forth in Section 9.9(b) .
"Prime Rate" means the variable rate of interest per annum officially
announced or published by the Agent from time to time as its "prime rate," such
rate being set by the Agent as a general reference rate of interest, taking into
account such factors as the Agent may deem appropriate, it being understood that
many of the Agent's commercial or other loans are priced in relation to such
rate, that it is not necessarily the lowest or best rate actually charged to any
customer and that the Agent may make various commercial or other loans at rates
of interest having no relationship to such rate. For purposes of this Agreement,
each change in the Prime Rate shall be effective as of the opening of business
on the date announced as the effective date of the change in such "prime rate."
"Principal Payment Date" means with respect to (i) any Debt Service Reserve
LOC Loan, each June 15th and December 15th, or any other date as may be agreed
from time to time by Borrower and Agent hereunder, commencing on the first such
date after the applicable drawing, and the date on which all or a portion of the
principal of such Debt Service Reserve LOC Loan becomes due and payable at
redemption, the final maturity date or declaration of acceleration, or
otherwise, and (ii) any Debt Service Reserve Bond, each June 15th and December
15th, commencing on the first such date after the applicable conversion date,
and any date on which principal of such Debt Service Reserve Bond becomes due
and payable at redemption, the final maturity date or declaration of
acceleration, or otherwise.
"Purchasing Bank" has the meaning set forth in Section 9.9(a).
"Quarterly Date" has the meaning set forth in Section 2.5(c).
"Regulatory Change" means, subsequent to the date of this Agree ment, any
adoption or change in United States Federal, state or municipal or foreign law
or regulations (including without limitation Regulation D) or the adoption or
change or making of any application, interpretation, directive, request or
guideline of or under any United States Federal, state or municipal or foreign
law or regulations by any court, central bank or Governmental Authority.
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"Required Banks" means, at any time, Banks (one of which shall be the
Agent) owed at least 66 2/3% of the sum of Obligations then outstanding and/or
the Commitments; provided, however, that, if and so long as there are only two
Banks, then "Required Banks" shall mean both of such Banks.
"Reserve Bond" has the meaning set forth in Section 2.7(e).
"Reserve Bond Note" has the meaning set forth in Section 2.7(g).
"Reserve Requirement" means, for Loans bearing interest at the LIBOR Rate,
the rate (expressed as a percentage) at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during the
Interest Period therefor under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding one billion Dollars
against "Eurocurrency liabilities" (as such term is used in Regulation D).
"Securities" has the meaning set forth in Recital A.
"Taxes" means any and all present or future income, stamp, transfer,
turnover and other taxes, levies, imposts, duties, charges, fees, deductions or
with holdings now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, and any and all interest, penalties, claims or
other liabilities arising under or relating thereto, including those on any of
the Banks or on payments to be made to or received by any of them from Borrower
hereunder.
"Termination Notice" has the meaning set forth in Section 2.2(h).
"Trustee" has the meaning set forth in Recital A.
SECTION 1.2 Construction. In this Agreement, unless expressly specified to
the contrary: the singular includes the plural and the plural the singular;
words importing any gender include the other genders; references to statutes are
to be construed as including all statutory provisions consolidating, amending or
replacing the statute referred to; references to "writing" include printing,
typing, lithography and other means of reproducing words in a tangible, visible
form; the words "including," "includes" and "include" shall be deemed to be
followed by the words "without limitation"; references to articles, sections (or
subdivisions of sections), recitals, appendices, exhibits, annexes or schedules
are to those of this Agreement; references to agreements and other instruments
shall be deemed to include all amendments and other modifications to such
agreements and instruments, but only to the extent such
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amendments and other modifications are not prohibited by the terms of this Agree
ment; references to Persons include their respective permitted successors and
assigns and, in the case of Governmental Authorities, Persons succeeding to
their respective functions and capacities; and all accounting terms used in this
Agreement shall be interpreted, all accounting determinations under this
Agreement shall be made and all financial statements required to be delivered
under this Agreement shall be prepared in accordance with generally accepted
accounting principles as in effect from time to time.
ARTICLE II
DEBT SERVICE RESERVE LETTER OF CREDIT
SECTION 2.1 Commitments. Each Bank irrevocably agrees sever ally, on the
terms and conditions contained in this Agreement, to participate in the Debt
Service Reserve Letter of Credit in an aggregate amount not to exceed at any
time outstanding the amount set forth opposite such Bank's name on the signature
pages hereof or, if such Bank has entered into one or more Commitment Transfer
Supplements, set forth for such Bank in the register maintained by the Agent
(such agreement by such Bank, as the same may be reduced from time to time
pursuant to the terms of this Agreement, herein called such Bank's
"Commitment").
SECTION 2.2 Amount and Term of Debt Service Reserve Letter of Credit. (a)
Subject to the terms and conditions contained in this Agreement, Initial Bank
irrevocably agrees to issue the Debt Service Reserve Letter of Credit on the
Closing Date for the account of the Borrower in favor of the Depositary Bank and
in the face amount of $24,500,000, subject to reduction, increase and
reinstatement as provided hereinafter and in the Debt Service Reserve Letter of
Credit. The Debt Service Reserve Letter of Credit shall be issued on the Closing
Date.
(b) [Reserved]
(c) [Reserved]
(d) The Debt Service Reserve Letter of Credit shall not be available for
any Debt Service Reserve Requirement applicable to Additional Securities without
the prior written consent of the Required Banks.
(e) If the Debt Service Reserve Requirement shall be reduced or increased
in accordance with the Indenture and the Depositary Agreement, the
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Outstanding Amount of the Debt Service Reserve Letter of Credit shall be reduced
or increased, as the case may be, by an amount equal to the amount of such
reduction or increase in the Debt Service Reserve Requirement; provided,
however, that in no event shall the Outstanding Amount exceed $24,500,000 at any
time. Subject to Section 6.1, the Outstanding Amount of the Debt Service Reserve
Letter of Credit, as so reduced or increased, shall be reinstated to the extent
that Loans are repaid, provided that such reinstatement shall not cause the
Outstanding Amount (when added to the balance in the Debt Service Reserve
Account) to exceed the Debt Service Reserve Requirement.
(f) [Reserved]
(g) The Borrower shall deliver, or cause to be delivered, (i) to each of
the Agent and the Trustee, prompt notice of the occurrence of any event
resulting in an adjustment to the Debt Service Reserve Requirement, including,
in each case, without limitation, pursuant to Section 3.3(c) of the Depositary
Agree ment, and (ii) to each of the Agent and the Depositary Bank, the
calculation of the Outstanding Amount resulting from the adjustment referred to
in clause (i), together with all information reasonably necessary to make such
calculation. The Initial Bank shall deliver to the Depositary Bank a notice in
the form of Annex 5 to the Debt Service Reserve Letter of Credit to effect a
change in the Outstanding Amount of the Debt Service Reserve Letter of Credit.
Notwithstanding the foregoing, no notice hereunder need be delivered in the case
of any reduction or increase scheduled to occur as set forth on Schedule I to
the Depositary Agreement, in effect at the time of such change.
(h) The Initial Bank shall have the right, upon the occurrence and during
the continuance of an Event of Default, to deliver a notice in the form of Annex
2 to the Debt Service Reserve Letter of Credit (a "Termination Notice"). The
Outstanding Amount shall not be reinstated upon repayment of any Loans after the
delivery by the Initial Bank of a Termination Notice.
(i) The Agent shall, solely for informational purposes, deliver to the
Borrower a copy of any termination notice given to the beneficiary under the
Debt Service Reserve Letter of Credit, provided, however, that the Banks'
ability to terminate the Debt Service Reserve Letter of Credit shall not be
contingent upon the Agent's delivery to the Borrower of such notice and that
neither the Agent nor the Banks shall incur any liability whatsoever as a result
of the Agent's failure to deliver such notice to the Borrower.
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SECTION 2.3 Participations in Debt Service Reserve Letter of Credit.
Immediately upon the issuance of the Debt Service Reserve Letter of Credit,
Initial Bank shall be deemed to have sold and transferred to each Bank, and each
Bank shall be deemed to have purchased and received from Initial Bank, in each
case irrevocably and without any further action by any party, an undivided
interest and participation in the Debt Service Reserve Letter of Credit, each
Drawing and the other Obligations in respect thereof in an amount equal to the
product of (a) a fraction the numerator of which is the amount of the Commitment
of such Bank and the denominator of which is the aggregate amount of all of the
Commitments and (b) the maximum amount available to be drawn under the Debt
Service Reserve Letter of Credit plus outstanding LOC Loans. The Agent shall
promptly advise each Bank of any change in the Outstanding Amount or Expiration
Date in respect of the Debt Service Reserve Letter of Credit, the cancellation
or other termination of the Debt Service Reserve Letter of Credit and any
Drawing, provided, however, that failure to provide such notice shall not limit
or impair the rights of the Agent hereunder or under the Financing Documents.
SECTION 2.4 Drawing and Reimbursement. The payment by Initial Bank of a
Drawing shall constitute the making by Initial Bank of a loan in the amount of
such payment. In the event that a Drawing is not repaid by the Borrower by 10:00
a.m., New York time, on the day of such Drawing, the Agent shall promptly notify
each other Bank. Each such Bank shall, on the day of such notification, make a
loan to the Borrower, which shall be used to repay the applicable portion of
Initial Bank's loan with respect to such Drawing, in an amount equal to the
amount of such Bank's participation in such Drawing, for application to repay
Initial Bank, and shall deliver to the Agent for Initial Bank's account, on the
day of such notification and in immediately available funds, the amount of such
loan. In the event that any Bank fails to make available to the Agent for the
account of Initial Bank the amount of such loan, Initial Bank shall be entitled
to recover such amount on demand from such Bank together with interest thereon
at (i) for the first three (3) days of nonpayment, the Federal Funds Rate and
(ii) thereafter, the Federal Funds Rate plus 3%. Each loan by a Bank pursuant to
this Section 2.4 shall be deemed a "Loan" under this Agreement.
SECTION 2.5 Fees. The Borrower shall pay the following fees to the Agent
for the respective accounts of the Persons specified below:
(a) for the account of the Initial Bank, the fee set forth in that certain
letter agreement of even date herewith between the Borrower and the Initial Bank
payable on the Closing Date;
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(b) if there is more than one (1) Bank, for the account of the Agent, an
annual administration fee of $25,000, payable on the Funding Date next
succeeding the first date on which there is more than one Bank and on each
anniversary thereof;
(c) to the Agent for the respective accounts of the Banks, an annual letter
of credit fee equal to (i) from and including the Closing Date to and excluding
the Expiration Date, 2.00% of the Outstanding Amount, and (ii) during the
continuance of an Event of Default or following a DSR LOC Note Repayment Date,
the rate that would otherwise apply pursuant to clause (i) plus 2.00%,
one-fourth of which each such payment is payable in arrears on the Funding Date
in each December, March, June and September (each such Funding Date, a
"Quarterly Date") following the Closing Date;
(d) for the account of the Initial Bank, such additional administrative
fees and charges (including cable charges) as are generally associated with
letters of credit, in accordance with the Initial Bank's standard internal
charge guidelines, payable on the next Funding Date under the Depositary
Agreement; and
(e) for the account of the Initial Bank, an annual letter of credit
fronting fee equal to 0.20% of the amount by which the Outstanding Amount of the
Debt Service Reserve Letter of Credit exceeds the Commitment of the Initial
Bank, one-fourth of which is payable on each Quarterly Date.
Each Bank shall pay to the Agent for the account of the Initial Bank, its
pro rata portion (calculated by dividing such Bank's Commitment by the aggre
gate of all Commitments) of an annual letter of credit fronting fee equal to
0.20% of the amount by which the Outstanding Amount of the Debt Service Reserve
Letter of Credit exceeds the Commitment of the Initial Bank, one-fourth of which
is payable on each Quarterly Date.
SECTION 2.6 Interest. (a) The Borrower shall pay interest on the unpaid
principal amount of each Loan resulting from a Drawing, from the date of such
Loan until such principal amount has been repaid in full. Such interest shall be
paid at a rate per annum equal to (i) so long as no Event of Default has
occurred and is continuing, either (x) the sum of the Adjusted Base Rate in
effect from time to time plus 1.375% or (y) the sum of the LIBOR Rate in effect
from time to time plus 2.00%, and (ii) so long as an Event of Default is
continuing, the Adjusted Base Rate plus 3.00% per annum (the "Default Rate"). If
the principal amount of a Loan is not
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repaid in full by the applicable DSR LOC Note Repayment Date and no Event of
Default has occurred and is continuing, the Borrower shall pay interest on the
unpaid principal amount of such Loan at the Adjusted Base Rate plus 3.00% per
annum. Such interest shall be payable semiannually in arrears on each Interest
Payment Date pursuant to Sections 3.1(c)(iii) and 3.2 of the Depositary
Agreement.
(b) Each Drawing and each Loan made pursuant to Section 2.4 shall initially
bear interest based on the Adjusted Base Rate as in effect from time to time
plus 1.375%; provided, however, that prior to the making of any Loan, the
Borrower may give the Agent written notice of the Borrower's election that such
Loan shall bear interest based on the LIBOR Rate. Such notice shall be
irrevocable and shall be effective only if received by the Agent not later than
10:00 a.m. (New York time) three (3) Business Days prior to the occurrence of
the Drawing giving rise to such Loan. The Agent shall promptly notify the Banks
of the contents of each such notice. Subject to Sections 2.6(d), 2.19 and 2.23,
such Loan shall then bear interest based on the LIBOR Rate from the date of such
Loan.
(c) Subject to Sections 2.6(d), 2.19 and 2.23, unless an Event of Default
shall have occurred, the Borrower may at any time, upon three Business Days'
irrevocable written notice to the Agent, convert (i) any Adjusted Base Rate Loan
to a LIBOR Rate Loan or (ii) any LIBOR Rate Loan to an Adjusted Base Rate Loan,
provided that a LIBOR Rate Loan may be converted only on the last day of the
applicable Interest Period. The Agent shall promptly notify the Banks of the
contents of each such notice. In the event that Borrower fails to select the
applicable interest rate, within the time period and otherwise as provided in
this Section 2.6(c), such Loan (if outstanding as a LIBOR Rate Loan) will be
automatically converted into an Adjusted Base Rate Loan on the last day of the
then current Interest Period for such Loan or (if outstanding as an Adjusted
Base Rate Loan) will remain as, or (if not then outstanding) will be made as, an
Adjusted Base Rate Loan.
(d) The Borrower shall pay to the Agent for the account of each Bank, upon
the request of such Bank through the Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Bank) to compensate it for any
loss, cost or expense which such Bank determines is attributable to any failure
for any reason (i) of any LIBOR Rate Loan, pursuant to a notice given under
Section 2.6(b) to occur or (ii) of the Borrower to convert an Adjusted Base Rate
Loan from such Bank to a LIBOR Rate Loan as and when specified in the relevant
notice given pursuant to Section 2.6(b) or 2.6(c).
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SECTION 2.7 Repayment. (a) The Borrower shall repay the principal amount of
each Loan as, when and to the extent monies are available for such purpose
pursuant to Section 3.1(c), 3.2 or 3.5 of the Depositary Agreement or Section 3
or 6 of the Intercreditor Agreement. Each Loan shall mature on the applicable
DSR LOC Note Repayment Date; provided that the outstanding principal of each
such Loan shall only be due and payable as, when and to the extent that monies
are available for the purpose of repayment of principal pursuant to Section
3.1(c), 3.2 or 3.5 of the Depositary Agreement and Section 3 or 6 or the
Intercreditor Agreement, as applicable.
(b) Subject to Section 2.7(c), the Initial Bank shall reduce the
Outstanding Amount by the outstanding principal amount of each Loan.
(c) Subject to Sections 2.2 and 6.1, the Initial Bank shall, upon receipt
of written notice from the Borrower, reinstate the Outstanding Amount to the
extent of any repayment or prepayment of the principal amount of any Loan.
(d) [Reserved]
(e) Notwithstanding the foregoing provisions of this Section 2.7, if (i)
50% or more of the principal amount of any Loan remains outstanding on or after
the fifth (5th) anniversary of the Drawing giving rise to such Loan or (ii) the
principal amount of any Loan remains outstanding on or after ten (10) years from
the Closing Date, the Agent may, subject to the approval of the Required Banks
and upon thirty (30) days' prior written notice to the Borrower, the Depositary
Bank and the Trustee, convert any Loan into a substitute loan (such converted
Loan, a "Reserve Bond").
(f) Each Reserve Bond shall (i) amortize on a Mortgage Basis, (ii) finally
mature on the Final Maturity Date and (iii) bear interest at a fixed rate equal
to the higher of (x) the interest rate last applicable to the Loan converted
into such Reserve Bond and (y) the then current (at the time of conversion of
the Loan to such Reserve Bond) rate of interest on U.S. Treasury Notes with an
average life most comparable to the remaining average life of the Securities
plus the higher of (A) 2.50% and (B) the spread over U.S. Treasury Notes
applicable to the Securities on the Closing Date.
(g) Upon the expiration of the thirty (30) day period specified in Section
2.7(e), or such shorter period agreed to by the Agent and the Borrower, the
Agent shall deliver to the Borrower the Note (marked canceled) evidencing the
Loan
12
which is to be converted into a Reserve Bond and the Borrower shall deliver to
the Agent an appropriately completed Reserve Bond Note substantially in the form
of Exhibit D (each a "Reserve Bond Note").
(h) The Borrower shall pay interest and principal on each
Reserve Bond in arrears on each Payment Date in accordance with Sections
3.1(c)(iii) and 3.2 of the Depositary Agreement.
(i) Upon any prepayment of a Reserve Bond, whether due to an
optional or mandatory redemption, acceleration or otherwise, the Borrower shall
pay to the Agent for the benefit of the Banks such amount as will be sufficient
to compensate all the Banks for any breakage costs incurred in connection with
any interest rate protection agreement or similar arrangement entered into with
respect to the Reserve Bonds being repaid in accordance with Section 3.1(c) of
the Depositary Agreement.
SECTION 2.8 Prepayments. (a) The Borrower may, at any time and from time to
time on any Business Day, upon prior written notice to the Agent not later than
11:00 a.m., New York time, at least two (2) Business Days before the day of any
prepayment of the Loans, such notice stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay without premium or penalty (except as provided in Section 2.7(i))
the outstanding principal amounts of the Loans in whole or in part, together
with accrued interest to the date of such prepayment on the principal amount
prepaid. The Loans (including Reserve Bonds) are subject to prepayment pursuant
to Sections 3.1(c) and 3.5 of the Depositary Agreement and Sections 3 and 6 of
the Intercreditor Agreement.
(b) The Borrower agrees to indemnify each Bank and hold each Bank harmless
from any direct loss (but excluding any indirect, consequential or incidental
loss or damage), cost or out-of-pocket expense which such Bank incurs as a
result of a prepayment of any Loan bearing interest at the LIBOR Rate on a date
which is not the last day of an Interest Period applicable thereto.
(c) All prepayments made hereunder shall be applied by the Agent and the
Banks against the principal amount of outstanding Loans (i) as long as no Event
of Default has occurred and is continuing, in the order as specified by Bor
rower or, in the absence of such specification, in the order such Loans were
made, and (ii) after an Event of Default has occurred in the order as specified
by the Agent or, in the absence of such specification, in the order such Loans
were made.
13
SECTION 2.9 Security. The Obligations shall be secured by the Security
Documents, the rights and remedies in respect of which shall be exercised
pursuant to the Intercreditor Agreement.
SECTION 2.10 Payments. (a) The Borrower shall make each payment hereunder
and under the Notes and the Reserve Bond Notes not later than 10:00 a.m., New
York time, on the day when due in United States dollars to the Agent at its
address set forth in Section 9.2, in immediately available funds. The Agent will
promptly thereafter cause to be distributed like funds relating to the payment
of principal (including reimbursement of Drawings), interest or fees ratably
(other than amounts payable for the account of the Agent or the Initial Bank
pursuant to Section 2.5(a), (b), (d) or (e) or payable pursuant to Section 9.4)
to the Banks and like funds relating to the payment of any other amount payable
to any Bank to such Bank, in each case to be applied in accordance with the
terms of this Agreement.
(b) Unless the Agent receives notice from the Borrower before the date on
which any payment is due to the Banks hereunder that the Borrower will not make
such payment in full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date, and the Agent may, in reliance upon
such assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due to such Bank. If and to the extent that the
Borrower has not so made such payment in full to the Agent, each Bank shall
repay to the Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date on which such Bank repays such amount to
the Agent (i) for the first three (3) days of non-repayment, at the Federal
Funds Rate and (ii) thereafter, at the Federal Funds Rate plus 3%.
SECTION 2.11 Computation of Interest and Fees. All computations of interest
and fees hereunder shall be made on the basis of a year of three hundred sixty
(360) days for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest or fees are
payable. Each calculation and each determination by the Agent of an interest
rate hereunder shall be conclusive and binding for all purposes, absent manifest
error.
SECTION 2.12 Payments on Non-Business Days. Whenever any payment hereunder
or under any Note or Reserve Bond Note is stated to be due on a day other than a
Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the
14
computation of payment of interest or fees, as the case may be. If no due date
is specified for the payment of any amount payable by Borrower hereunder, such
amount shall be due and payable not later than ten (10) Business Days after
receipt by Borrower of written demand from Agent for payment thereof.
SECTION 2.13 Sharing of Payments, Etc. If any Bank obtains any payment
(whether voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of its Commitment or the Loans made by it (other than
pursuant to Section 9.4) in excess of its ratable share of such payments
obtained by all of the Banks, then such Bank shall be deemed to have received
such payment as agent for and on behalf of all the Banks and shall immediately
advise the Agent of the receipt of such funds and promptly transmit the amount
thereof to the Agent for prompt distribution among the Banks as provided for in
this Agreement and such funds transmitted to the Agent shall be credited as a
payment by the Borrower under this Agreement; provided that such Bank so
transmitting funds to the Agent shall not be deemed to have received, and the
Borrower shall be deemed not to have made to such Bank (to the extent funds are
transmitted to the Agent) any payment transmitted to the Agent by such Bank
pursuant to this Section 2.13.
SECTION 2.14 Evidence of Debt. (a) The indebtedness of the Borrower
resulting from all Loans made by each Bank from time to time shall be evidenced
by an appropriate notation on the schedule, or a continuation thereof, to the
Debt Service Reserve Letter of Credit Promissory Note substantially in the form
of Exhibit B (each a "Note"), delivered by the Borrower to such Bank.
(b) The books and accounts of the Agent shall be conclusive evidence,
absent manifest error, of the amounts of all Drawings, Loans, fees, interest and
other amounts advanced, due, outstanding, payable or paid pursuant to this
Agreement or any Note.
SECTION 2.15 Increased Debt Service Reserve Letter of Credit Costs. If,
after the date hereof, any introduction of or change in any Applicable Law
(including for purposes hereof, any directive guideline or requirement of any
Governmental Authority (whether or not having the force of law)) or in the
interpretation thereof by any Governmental Authority charged with the
administration thereof either (a) imposes, modifies or makes applicable any
reserve, special deposit or similar requirement against letters of credit issued
by, or assets held by, or deposits or other liabilities in or for the account
of, the Agent or any Bank or (b) imposes on the Agent or any Bank any other
condition regarding this Agreement, the Agent, such Bank or the Debt Service
Reserve Letter of Credit, and the result of any event
15
referred to in the preceding clause (a) or (b) is to increase the cost to the
Agent or such Bank of issuing or maintaining the Debt Service Reserve Letter of
Credit, reduce the amount of any payment receivable by the Agent or such Bank
hereunder or reduce the rate of return on any Bank's capital as a consequence of
its obligations hereunder below that which such Bank would have achieved but for
such circumstance, then, in each such case, upon demand by the Agent or such
Bank, the Borrower shall pay to the Agent or such Bank, from time to time as
specified thereby, on the appropriate Funding Dates under the Depositary
Agreement, additional amounts sufficient to compensate the Agent or such Bank
for such increased costs, reduction in payments receivable or reduction in rate
of return. A certificate as to any such additional amount or amounts submitted
by a Bank, through Agent, to Borrower and the other Banks shall certify that
similar demands have been made to other customers of such Bank which are subject
to similar provisions and shall, in the absence of manifest error, be final and
conclusive. In determining such amount, a Bank may use any reasonable averaging
and attribution methods. Notwithstanding the foregoing, Borrower shall only be
obligated to compensate any Bank or Agent for any amount described in this
Section 2.15 arising or occurring during (i) any time period commencing not more
than 90 days prior to the date on which such Bank notifies Agent and Borrower
that such Bank or Agent proposes to demand such compensation and (ii) any time
period during which, because of the unannounced retroactive application of such
statute, regulation or other basis, such Bank could not have known that such
amount might arise or accrue.
SECTION 2.16 Capital Adequacy. If the Agent or any Bank reason ably
determines that compliance with any Applicable Law (including for purposes
hereof, any directive guideline or requirement of any 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 the Agent or such Bank or any
corporation controlling the Agent or such Bank and that the amount of such
capital is increased by or based upon the existence of such Bank's Commitment or
the issuance of the Debt Service Reserve Letter of Credit or outstanding Loans,
then, upon demand by the Agent or such Bank, the Borrower shall pay to the Agent
or such Bank, from time to time as specified thereby, additional amounts
sufficient to compensate the Agent or such Bank in light of such circumstances,
to the extent that the Agent or such Bank reasonably determines such increase in
capital to be allocable to the existence of such Bank's Commitment or the
issuance of the Debt Service Reserve Letter of Credit or such Loans. A
certificate as to any such additional amount or amounts submitted by a Bank,
through Agent, to Borrower and the other Banks shall certify that similar
demands have been made to other customers of such Bank which are subject to
similar provisions and shall, in the absence of manifest
16
error, be final and conclusive. In determining such amount, a Bank may use any
reasonable averaging and attribution methods. Notwithstanding the foregoing,
Borrower shall only be obligated to compensate any Bank or Agent for any amount
described in this Section 2.16 arising or occurring during (i) any time period
commencing not more than 90 days prior to the date on which such Bank notifies
Agent and Borrower that such Bank or Agent proposes to demand such compensation
and (ii) any time period during which, because of the unannounced retroactive
application of such statute, regulation or other basis, such Bank could not
have known that such amount might arise or accrue.
SECTION 2.17 Taxes. (a) Payments by Borrower to each of the Banks under
this Agreement and the Notes will be made free and clear of and without
deduction for Taxes, other than Taxes based on or measured by the net income or
receipts of such Bank (including franchise taxes imposed in lieu of net income
or receipts taxes) imposed by (x) the United States federal government, (y) the
jurisdiction where such Bank is organized or has its principal office or
transacts business or (z) the jurisdiction of the branch of such Bank
maintaining any Loan or the branch of Agent through which it renders its
services as Agent ("Excluded Taxes"). If Borrower is required by law to deduct
Taxes (other than Excluded Taxes) from such a payment, then the sum payable
under the instrument to which the payment relates will be increased so that
there is no diminution in the amount any Bank actually receives on account of
the deduction.
(b) Borrower hereby indemnifies and holds harmless each Bank from and
against, and agrees to reimburse each Bank on an after-tax basis (computed
taking into account any deductions or other benefits available for federal
income tax purposes for the Bank if it is a United States taxpayer and any
deductions and benefits available for income tax purposes in any jurisdiction in
which such Bank is a taxpayer) on demand for, any and all Taxes paid or incurred
by such Bank in connection with the transactions contemplated by this Agreement;
provided, how ever, that the foregoing indemnity does not cover Excluded Taxes.
Reimbursement on an "after-tax basis" means on a basis such that the Bank is
made whole after taking into account income taxes that the Bank will owe on the
indemnity or reimbursement payment in any jurisdiction and any related tax
benefits. Nothing in this paragraph shall interfere with the right of any Bank
to arrange its tax affairs in whatever manner it thinks fit and, in particular,
no Bank is under any obligation to claim a deduction or other benefit relating
to these transactions ahead of any other claim, relief, credit, deduction or
other benefit to which it is entitled. The applicable Bank shall promptly give
written notice to Borrower (but in no event later than sixty (60) days) after
such Bank has actual knowledge of the imposition of any Taxes subject to
indemnification
17
hereunder; provided, however, that failure to give such notice within such sixty
(60) day period will not relieve Borrower of the obligation to indemnify such
Bank in accordance with the terms hereof, except to the extent of interest that
would have been avoided had the notice been given prior to the end of such sixty
(60) day period.
(c) All payments made by the Borrower to each of the Banks under this
Agreement and the Notes will be made without setoff, counterclaim or other
defense.
(d) (i) Borrower will provide evidence that all Taxes imposed on payments
under this Agreement, any Loan or the Notes have been fully paid to the
appropriate authorities by delivering official receipts or notarized copies to
Agent within thirty (30) days after payment. Borrower will compensate any Bank
that has to pay any Taxes because Borrower failed to timely furnish such
evidence; provided, that prior to paying such Taxes, such Bank shall have
notified Borrower of its intent to make such payment.
(ii) If Borrower so requests promptly in writing after receipt of any
notice under this Section 2.17, such Bank will contest in good faith the Taxes
at Borrower's expense, keep Borrower fully informed about the progress of the
contest, consult in good faith with Borrower's counsel regarding conduct of the
contest, and not compromise or otherwise settle the contest without Borrower's
consent (which shall not be unreasonably withheld or delayed); provided that the
Bank may in its sole discretion select the forum for the contest and determine
whether the contest will be by resisting payment of the Taxes or by paying the
Taxes and seeking a refund; provided, further, that the Bank will be under no
obligation to contest unless (V) if the Bank requests, Borrower has provided the
Bank an opinion of independent tax counsel selected by Borrower and reasonably
acceptable to the Bank to the effect that there is a reasonable basis for the
contest, (W) the amount in controversy is at least $75,000, (X) the Bank has
received satisfactory indemnification and security for any liability, loss,
cost or expense arising out of the contest (including, but not limited to, all
reasonable legal and accounting fees and expenses, penalties, interest and
additions to tax), (Y) if requested by the Bank, Borrower has admitted in
writing its duty to indemnify the Bank for the Taxes if the contest is lost (but
such admission shall not preclude Borrower from raising a defense to liability
if a court of competent jurisdiction has rendered a decision articulating the
cause of such Taxes, and the cause is not one for which Borrower is responsible
under this Section 2.17), and (Z) if the contest is conducted in a manner that
requires paying all or part of the Taxes, Borrower has paid the amount required.
18
(iii) If Borrower so requests within ten (10) days of notice to
Borrower of the imposition of any Taxes on payments to any of the Banks of a
type not generally imposed on United States or foreign lenders making loans of
the types contemplated hereunder, such Banks shall (consistent with legal and
regulatory restrictions) comply with Section 2.20 hereof.
(e) Prior to the first Interest Payment Date, each Bank agrees that it will
deliver to Agent and Borrower (A) either (i) a letter stating that it is incorpo
rated under the laws of the United States of America or a state thereof or (ii)
if it is not so incorporated, two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or successor applicable form, as the
case may be, certifying in each case that such Bank is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes and (B) an Internal Revenue Service Form W-8 or W-9
or successor applicable form, as the case may be, to establish an exemption from
United States backup withholding tax. If any Bank delivers to Borrower and Agent
a Form 1001 or 4224 and Form W-8 or W-9 pursuant to the immediately preceding
sentence, it shall deliver to Borrower and Agent two further copies of such Form
1001 or 4224, and Form W-8 and W-9, or successor applicable forms, or other
manner of certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form previously delivered by it to Borrower, and
such extensions or renewals thereof as may reasonably be requested by Borrower,
certifying in the case of a Form 1001 or 4224 that such Bank is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes, unless in any such case an event (including,
without limitation, any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would other wise be required that renders
all such forms inapplicable or that would prevent such Bank from duly completing
and delivering any such form with respect to it and such Bank advises Borrower
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax, and in the case of a Form W-8
or W-9, establishing an exemption from United States backup withholding tax.
The provisions of this Section 2.17(e) shall apply to any successor holder of a
Note.
(f) Notwithstanding the foregoing, if (A)(i) any Bank has previously
delivered to Borrower and Agent a Form 4224 or successor applicable form and
(ii) by virtue of any action taken or not taken voluntarily by such Bank, such
Bank is not lawfully entitled to deliver a subsequent Form 4224 or applicable
successor form solely as a result of such Bank's failure to be engaged in the
active
19
conduct of a trade or business in the United States or a determination that all
amounts to be paid to such Bank hereunder are not effectively connected to such
trade or business or (B) any Bank fails to provide any form required under
Section 2.17(e) hereof at a time when such Bank is qualified to provide such
form, Borrower shall be under no obligation to compensate or indemnify such Bank
under this Section 2.17 or otherwise with respect to any Tax required to be paid
or withheld under United States federal income tax law that would not have been
required to be paid or withheld had such Bank so delivered such Form 4224,
applicable successor form or other form.
(g) Notwithstanding anything contained in this Section 2.17, Borrower shall
not be required to indemnify or reimburse any Bank who has failed to make
available to Agent its portion of any Loan on the date required to be made
available to Agent pursuant to this Agreement after Agent has made written
demand upon such Bank for such payment for any additional documentary stamp
taxes or intangibles taxes incurred by such Bank solely as a result of such
failure.
SECTION 2.18 Change of Law. (a) Notwithstanding any other provision of this
Agreement, if any Regulatory Change, or compliance by any Bank with any
Regulatory Change, makes it unlawful or impossible for any Bank to make,
maintain or continue its proportionate interest in any Debt Service Reserve
Letter of Credit, then such Bank shall promptly give notice together with
evidence thereof to Borrower and Agent, and Borrower shall pay forthwith all
amounts outstanding, accrued or payable under this Agreement to such Bank and
cause such Bank to be released from all obligations of such Bank under this
Agreement.
(b) A Bank shall (consistent with legal and regulatory restrictions)
designate a different lending office for the Loans (or commitments therefor) or
its participation in the Debt Service Reserve Letter of Credit affected pursuant
to this Section 2.18 before giving any notice to Borrower and Agent pursuant to
this Section 2.18 if such designation will avoid the need for giving such notice
and will not, in the sole opinion of such Bank, be disadvantageous to such Bank,
except that such Bank shall have no obligation to designate a lending office
located in the United States of America. If Borrower so requests within ten (10)
days of receipt of the notice referred to above (which notice is based on
circumstances not generally applicable to United States or foreign lenders
making loans of the types contemplated hereunder), such Bank shall (consistent
with legal and regulatory restrictions) comply with Section 2.20 hereof.
20
SECTION 2.19 Non-Availability. (a) If at any time dollar deposits in the
principal amount of any Bank's proportionate interest in, or obligation under,
any Loan bearing interest at the LIBOR Rate are not available to such Bank in
the London interbank market for the next Interest Period, such Bank shall so
notify Agent, who shall so notify Borrower, and the obligation of such affected
Bank to make or continue, or to convert Loans into Loans bearing interest based
on the LIBOR Rate shall be immediately suspended and during such suspension be
converted into an obligation to do the same with respect to Loans bearing
interest at the Adjusted Base Rate; provided, however, that outstanding Loans
bearing interest at the LIBOR Rate shall be converted into Loans bearing
interest at the Adjusted Base Rate on the last day of the then current Interest
Period applicable to such Loans.
(b) If at any time the Interest Rate then in effect based on the LIBOR Rate
does not adequately and fairly reflect, in the reasonable judgment of any Bank,
the cost for such Bank of advancing or maintaining its respective proportionate
interest in any Loan bearing interest at the LIBOR Rate during any Interest
Period, then such Bank shall notify Agent, who shall so notify Borrower, and
interest on such Bank's proportionate share of the Loans shall for any
subsequent Interest Period accrue at the Adjusted Base Rate.
(c) If Borrower so requests after the suspension of a Bank's obligation to
make Loans bearing interest at the LIBOR Rate under this Section 2.19 for at
least ten (10) consecutive Business Days based on circumstances not generally
applicable to United States or foreign lenders making loans of the types contem
plated hereunder, such Bank shall (consistent with legal and regulatory
restrictions) comply with Section 2.20 hereof.
SECTION 2.20 Assignments by Banks. If (i) a Bank is required to comply with
this Section 2.20 after a request from Borrower pursuant to Section 2.17, 2.18
or 2.19 or (ii) Borrower requests that the provisions of this Section 2.20 apply
to a Bank within ten (10) days after it receives a notice from Agent that (A)
such Bank has failed to make available to Agent its portion of any Loan on the
date required to be made available to Agent pursuant to this Agreement after
Agent has made written demand upon such Bank for such payment or (B) such Bank
has provided Agent with notice that such Bank shall not make available to Agent
such portion of any Loan required to be made available to Agent pursuant to this
Agree ment or (C) such Bank has failed to reimburse the Agent pursuant to the
terms of this Agreement, such Bank shall assign all or a part of its
proportionate share of the Loans and its commitment to make Loans to a
replacement Bank (which may be, but is not required to be, one of the other
Banks) designated by Borrower; provided
21
that any assignment or transfer made by a Bank to a replacement Bank shall
satisfy the following conditions: (i) Borrower shall promptly pay when due all
reasonable fees and expenses which such Bank incurs in connection with such
transfer or assignment and (ii) any assignment of all or part of the Loans or
obligations shall be made without recourse, representation or warranty, and
Borrower shall cause the replace ment Bank to pay to Agent for the account of
the assigning Bank in immediately available funds all amounts outstanding or
payable under this Agreement to each Bank assigning its interest in the Loans.
SECTION 2.20A. Mitigation Provision. Each Bank and the Initial Bank agree
that as promptly as practicable after it has made a determination to make a
claim for amounts under Section 2.7(i), 2.8(b), 2.15, 2.16 or 2.17 with respect
to events or conditions arising after the date hereof, it shall notify the
Borrower of the same and use commercially reasonable efforts (consistent with
legal and regulatory restrictions and such Bank's or the Initial Bank's, as
relevant, internal policies) to mitigate the effect of such provisions on the
Borrower, including (i) in the case of Sections 2.15, 2.16 or 2.17, efforts to
make, fund, issue or maintain its Loans or the Debt Service Reserve Letter of
Credit, as relevant, through another office of such Bank or the Initial Bank as
relevant and (ii) in the case of Sections 2.7(i) or 2.8(b), efforts to reemploy
amounts held by such Bank, (x) if as a result thereof the additional moneys
which would otherwise be required to be paid to such Bank pursuant to any of
such provisions of this Agreement would be reduced, or the illegality or other
adverse circumstances which would otherwise require a prepayment of such Loans
or the suspension of the issuance of, or of drawings under, the Debt Service
Reserve Letter of Credit pursuant to any of such provisions would cease to
exist, and (y) if, as determined by such Bank or the Initial Bank, as relevant,
in good faith, the making, funding, issuing or maintaining of such Loan or the
Debt Service Reserve Letter of Credit, or the making of drawings under the Debt
Service Reserve Letter of Credit as relevant, through such other office would
not otherwise adversely affect such Bank or the Initial Bank, as relevant.
SECTION 2.21 Reduction in Commitments/Loans. The Borrower shall have the
right to refinance all Commitments and all of the outstanding Loans, if any, and
all of the outstanding Reserve Bonds, if any, in whole but not in part, without
premium or penalty upon at least ten (10) days' prior written notice to the
Agent; provided, however, that the Borrower agrees to indemnify each Bank and
hold each Bank harmless from any direct loss (but excluding any indirect, conse
quential or incidental loss or damage), cost or out-of-pocket expense which such
Bank incurs as a result of a refinancing pursuant to this Section 2.21 of any
Loan bearing interest at the LIBOR Rate on a date which is not the last day of
an
22
Interest Period applicable thereto. In any refinancing of such Commitments, the
Borrower shall cause the Debt Service Reserve Letter of Credit to be released
and returned to the Initial Bank.
SECTION 2.22 Right of Set-off. Borrower hereby authorizes Agent and only
Agent, upon the occurrence and during the continuance of any Event of Default,
at any time and from time to time, without notice to Borrower or any Person
other than the Collateral Agent (any such notice being hereby expressly waived
by Borrower to the extent it may legally do so) to set off and appropriate and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held, and other indebtedness at any time owing, by any Banks
in any of their offices, wherever located (whether such deposits or indebtedness
be in dollars or in any other currency), to or for the credit or the account of
Borrower against any and all of the Obligations and liabilities of Borrower now
or hereafter existing under this Agree ment, irrespective of whether or not the
Agent shall have made any demand hereunder or thereunder and although such
Obligations may be contingent or unmatured.
SECTION 2.23 Minimum Amounts. (a) Anything in this Agreement to the
contrary notwithstanding, the aggregate principal amount of Loans bearing
interest based on the LIBOR Rate shall be in an amount at least equal to
$1,000,000 or in multiples of $500,000 in excess thereof and, if any Loans
bearing interest based on the LIBOR Rate would otherwise be in a lesser
principal amount for any period, such Loans shall bear interest based on the
Adjusted Base Rate during such period.
(b) Not more than six (6) Loans bearing interest at the LIBOR Rate may be
outstanding at one time.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.1 Conditions Precedent to Issuance of Debt Service Reserve Letter
of Credit. The obligation of the Initial Bank to issue the Debt Service Reserve
Letter of Credit is subject to the follow conditions precedent:
(a) the Agent shall have received the following, each dated on or before
the Closing Date unless otherwise specified below, in form and substance
23
satisfactory to the Agent and in the number of originals or photostatic copies
reasonably required by the Agent:
(i) this Agreement and the Notes duly executed by the Borrower;
(ii) the Indenture duly executed by the parties thereto;
(iii) the Depositary Agreement, the Intercreditor Agreement and each of
the other Security Documents duly executed by the parties thereto;
(iv) written opinions of counsel, as to such matters as the Agent may
reasonably request; and
(v) a certificate of the Depositary Bank as to the incumbency and
specimen signatures of the officers of the Depositary Bank authorized to make
drawings, to execute and present certificates under the Debt Service Reserve
Letter of Credit, and otherwise communicate with the Agent with respect thereto;
(b) all agreements referred to in Sections 3.1(a)(i), (ii) and (iii) remain
in full force and effect;
(c) the Borrower shall have paid all accrued fees and expenses (as provided
in Sections 2.5 and 9.4) of the Agent and the Banks (including the reason able
accrued fees and disbursements of counsel to the Agent and the Banks), to the
extent that one or more statements for such fees and expenses have been
presented for payment, provided that no such statement shall be required to be
delivered in connection with any fee payable on the Closing Date pursuant to
Section 2.5(a);
(d) all conditions precedent under the Purchase Agreement have been
satisfied; and
(e) the Agent shall have received such other approvals, opinions, evidence
and documents as it may reasonably request and which are customary for
transactions of the type contemplated by this Agreement.
ARTICLE IV
24
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Representations and Warranties. The Borrower hereby makes for
the benefit of the Agent and the Banks all of the representations and warranties
of the Borrower made in the Indenture, in the form of such representations and
warranties as they exist on the date of this Agreement and as they may hereafter
be amended from time to time, but only to the extent that the incorporation of
any such amendments into this Agreement has been consented to in accordance with
Section 9.1. Such representations and warranties are incorporated herein by
reference as if set forth at length in this Agreement; provided that any
reference to "CE Generation" shall be deemed to be a reference to "Borrower";
each reference to the term "Securities" shall be deemed to include the
Obligations; and each reference to the term "Indenture" shall be deemed to be a
reference to this Agreement.
ARTICLE V
COVENANTS
SECTION 5.1 Covenants. So long as any Commitment is in effect, the Debt
Service Reserve Letter of Credit is outstanding or the Obligations remain
unpaid, unless compliance has been waived in accordance with Section 9.1:
(a) all of the covenants of the Borrower contained in Article V of the
Indenture, together with any schedules referred to therein (in the form of such
covenants and schedules as they exist as of the date of this Agreement and as
they may hereafter be amended from time to time, but only to the extent that the
incorpo ration of any such amendments into this Agreement has been consented to
in accordance with Section 9.1), are hereby incorporated and made applicable by
reference as if set forth at length in this Agreement; provided that any
reference to "CE Generation" shall be deemed to be a reference to "Borrower";
each reference to the term "Securities" shall be deemed to include the
Obligations; each reference to the term "Indenture" shall be deemed to be a
reference to this Agreement; the phrase "the principal of, premium (if any) and
interest on every Security issued hereunder in accordance with the terms hereof
and thereof" in Section 5.1 of the Indenture shall be deemed to refer to all
Obligations; and each reference to the Trustee shall be deemed to be a reference
to the Agent and the Banks, and the Borrower shall observe and perform all of
such incorporated covenants; and
25
(b) the Borrower will not without the prior written approval of the
Required Banks terminate, amend or otherwise modify any provision of the Inden
ture, the Depositary Agreement or any Security Document if such termination,
amendment or other modification would affect the priority of payments from the
Revenue Account under the Depositary Agreement in a manner adverse to the Agent
or any Bank (it being acknowledged that the issuance of Additional Securities
and the execution and delivery of a Supplemental Indenture in connection
therewith shall not be deemed to affect the priority of payments from the
Revenue Account), increase the interest rate on the Initial Securities (or any
Additional Securities after their issuance) other than in accordance with
Section 2.2(b) of the Indenture or any comparable provision relating to said
Additional Securities, amend the principal payment dates of the Initial
Securities (or any Additional Securities after the date of their issuance) in a
manner adverse to the Agent or any Bank, or change the voting requirements under
the Intercreditor Agreement in a manner adverse to the Agent or any Bank.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 Defaults and Remedies. If any one of the following events (each
an "Event of Default") shall occur and be continuing:
(a) any amount in respect of fees, costs or expenses due by Borrower under
this Agreement shall not be paid in full within fifteen (15) days following
delivery of notice thereof to Borrower;
(b) any amount due by Borrower in respect of interest on any Loan shall not
be paid in full within fifteen (15) days after its due date;
(c) any amount due by Borrower in respect of the principal of or interest
on any Reserve Bond shall not be paid in full within fifteen (15) days after its
due date (taking into account the applicable amortization of such Reserve Bond);
(d) any amount due by Borrower in respect of principal of any Loan shall
not be paid to the Agent within fifteen (15) days after its due date as provided
in Section 2.7(a);
(e) [Reserved]
26
(f) any representation or warranty made by or on behalf of the Borrower in
this Agreement (including by incorporation by reference), or in any certificate
furnished to the Agent or the Banks shall prove to have been false or misleading
in any respect as of the time made, confirmed or furnished and the inaccuracy
has had or is reasonably expected to have a Material Adverse Effect and such
misrepresentation shall continue uncured for thirty (30) or more days from the
date an Authorized Officer of Borrower obtains actual knowledge thereof;
provided that if the Borrower commences and diligently pursues efforts to cure
the factual situation resulting in such misrepresentation within such thirty
(30) day period, the Borrower may continue to effect such cure of the
misrepresentation and such misrepresentation shall not be deemed an Event of
Default for an additional sixty (60) days so long as the Borrower is diligently
pursuing such cure;
(g) any provision of the Indenture, the Depository Agreement or any
Security Document is terminated, amended or otherwise modified without the prior
written approval of the Required Banks if such termination, amendment or other
modification would affect the priority of payments from the Revenue Account
under the Depositary Agreement in a manner adverse to the Agent or any Bank (it
being acknowledged that the issuance of Additional Securities and the execution
and delivery of a Supplemental Indenture in connection therewith shall not be
deemed to affect the priority of payments from the Revenue Account), increase
the interest rate on the Initial Securities (or any Additional Securities after
their issuance) other than in accordance with Section 2.2(b) of the Indenture or
any comparable provision relating to said Additional Securities, amend the
principal payment dates of the Initial Securities (or any Additional Securities
after the date of their issuance) in a manner adverse to the Agent or any Bank,
or change the voting requirements under the Intercreditor Agreement in a manner
adverse to the Agent or any Bank and the same shall continue uncured for sixty
(60) or more days after an Authorized Officer or the Borrower has actual
knowledge of the same; provided that if the Borrower commences and diligently
pursues efforts to cure such default within such sixty (60) day period, the
Borrower may continue to effect such cure of the default (and such default shall
not be deemed an "Event of Default" hereunder) for an additional thirty (30)
days so long as the Borrower is diligently pursuing such cure;
(h) the Borrower shall fail to perform or observe any covenant or agreement
contained in Sections 5.3(a), 5.13, 5.14, 5.15, 5.16, 5.17 and 5.19 of the
Indenture as incorporated in Section 5.1(a) of this Agreement or in Section
5.1(b) of this Agreement, and such failure shall continue uncured for thirty
(30) or more days after an Authorized Officer of the Borrower has actual
knowledge of such failure at
27
any time after all outstanding amounts due in respect of the Securities shall
have been paid in full and the Indenture is no longer in effect;
(i) the Borrower shall fail to perform or observe any of its covenants
contained (including by incorporation by reference) in any other provision of
this Agreement (other than those referred to in paragraphs (a), (b), (c), (e),
(f), (g) and (h) above) and such failure shall continue uncured for sixty (60)
or more days after an Authorized Officer of the Borrower has actual knowledge of
such failure; provided that if the Borrower commences and diligently pursues
efforts to cure such default within such sixty (60) day period, the Borrower may
continue to effect such cure of the default (and such default shall not be
deemed an "Event of Default" hereunder) for an additional thirty (30) days so
long as the Borrower is diligently pursuing such cure; or
(j) an "Event of Default" under clause (b), (c), (d), (e), (f), (g), (h),
(i), (j) or (k) of Section 6.1 of the Indenture shall occur and be continuing
until the earlier of the expiration of thirty (30) days or an acceleration under
the Indenture;
then, and in any such event, the Agent shall at the request of the Required
Banks take one or more of the following actions, (i) by notice to the Borrower
and the Secured Parties, declare the Commitments to be terminated, whereupon the
same shall forthwith terminate and after giving forty five (45) days' written
notice to the beneficiary of such outstanding Debt Service Reserve Letter of
Credit and the lapse of the time period required prior to termination by such
Debt Service Reserve Letter of Credit, terminate the Debt Service Reserve Letter
of Credit, or (ii) declare the Obligations, all interest thereon and all other
amounts payable under this Agreement, the Notes and the Reserve Bonds to be
forthwith due and payable, whereupon the Obligations, all such interest and all
such amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower or (iii) terminate the ability of the Borrower to cause
reinstatement of the Outstanding Amount through the reimbursement of Drawings,
as contemplated by the terms hereof.
ARTICLE VII
CHARACTER OF OBLIGATIONS
28
SECTION 7.1 Obligations Absolute. The Obligations shall be absolute,
unconditional and irrevocable and shall not be affected or impaired under any
circumstances whatsoever, including the following circumstances:
(a) any lack of validity or enforceability of any provision of any
Transaction Document;
(b) any amendment or waiver of, or any consent to departure from, any
provision of any Transaction Document;
(c) the existence of any claim, setoff, defense or other right that the
Borrower may have at any time against the Trustee, any other beneficiary of the
Debt Service Reserve Letter of Credit (or any Person for whom the Trustee or any
such beneficiary may be acting), any Bank, the Agent or any other Person,
whether in connection with any Transaction Document, the transactions
contemplated thereby or any unrelated transaction;
(d) any statement or signature in any certificate or other document
presented under the Debt Service Reserve Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect, or any such statement being
untrue or inaccurate in any respect whatsoever;
(e) any exchange, release or nonperfection of any Collateral or other
collateral, or any release, amendment or waiver of or consent to departure from
any Transaction Document or any guaranty for any of the Obligations;
(f) payment by a Bank under the Debt Service Reserve Letter of Credit
against presentation of a draft or certificate that does not comply with the
terms of the Debt Service Reserve Letter of Credit;
(g) any issuance of additional Permitted Indebtedness (including Additional
Securities) under the Indenture; and
(h) any other circumstance or happening whatsoever, whether or not similar
to any of the foregoing.
SECTION 7.2 Limited Liability of Agent and Banks. As among the Borrower,
the Agent and the Banks, Borrower assumes all risks of the acts or omissions of
the beneficiaries of the Debt Service Reserve Letter of Credit with respect to
the use of the Debt Service Reserve Letter of Credit. Neither the Agent
29
nor any Bank nor any of their respective officers, directors, employees or
agents shall be liable or responsible for (a) the use that may be made of the
Debt Service Reserve Letter of Credit or any acts or omissions of any
beneficiaries of the Debt Service Reserve Letter of Credit in connection with
the Debt Service Reserve Letter of Credit; (b) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted in connection
with the Debt Service Reserve Letter of Credit or of any endorsement thereon,
even if such document or endorsement should prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (c) payment by Initial
Bank against presentation of any document that does not comply with the terms of
the Debt Service Reserve Letter of Credit, including failure of any document to
bear any reference or adequate reference to the Debt Service Reserve Letter of
Credit; or (d) any other circumstance whatsoever in making, delaying to make or
failing to make payment under the Debt Service Reserve Letter of Credit;
provided, however, that the Borrower shall have a claim against Initial Bank,
and Initial Bank shall be liable to the Borrower, to the extent of any direct,
as opposed to consequential, damages suffered by the Borrower that the Borrower
proves were the result of Initial Bank's willful misconduct or gross negligence
in paying under the Debt Service Reserve Letter of Credit or Initial Bank's
willful or grossly negligent failure to pay under the Debt Service Reserve
Letter of Credit after the presentation to it by the beneficiary of a draft and
certificate strictly complying with the terms and conditions of the Debt Service
Reserve Letter of Credit (unless Initial Bank in good faith believed itself
(based upon an opinion of counsel) to be prohibited by law or legal authority
from making such payment). In furtherance and not in limitation of the
foregoing, Initial Bank may accept any document that appears on its face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary.
ARTICLE VIII
THE AGENT
SECTION 8.1 Authorization and Action. Each Bank hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto. As to
any matters not expressly provided for by the Credit Documents (including
enforcement of and collection under any Credit Document), the Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the
30
instructions of the Required Banks, and such instructions shall be binding upon
all Banks and all holders of Notes; provided, however, that the Agent shall not
be required to take any action that exposes the Agent to personal liability or
that is contrary to any Credit Document or applicable law. In performing its
function and duties hereunder, Agent shall act solely as the agent of the Banks
and does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for the Borrower or any other
party to any Transaction Document.
SECTION 8.2 Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with any Credit
Document, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent (a) may treat
any Bank that has signed a Commitment Transfer Supplement as the holder of the
applicable portion of the Obligations; (b) may consult with legal counsel
(including counsel for the Borrower or any Affiliate), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations made in or in connection with any
Transaction Document; (d) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions of
any Transaction Document on the part of the Borrower or any Affiliate or to
inspect the property (including the books and records) of the Borrower or any
Affiliate thereof; (e) shall not be responsible to any Bank for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Transaction Document or any other instrument or document furnished
pursuant hereto or thereto; and (f) shall incur no liability under or in respect
of any Transaction Document by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopier or otherwise) believed
by it to be genuine and signed or sent by the proper party or parties.
SECTION 8.3 Initial Bank and Affiliates. With respect to its Commitment and
participation in the Debt Service Reserve Letter of Credit, the Initial Bank
shall have the same rights and powers under this Agreement as any other Bank and
may exercise the same as though it were not the Agent; and the term "Bank" or
"Banks" shall, unless otherwise expressly indicated, include Initial Bank in its
individual capacity. Initial Bank and its Affiliates may accept deposits from,
lend money to, act as trustee under indentures of, and generally engage in any
kind of
31
business with, the Borrower, any Affiliate thereof and any Person that may do
business with or own securities of the Borrower or any Affiliate thereof, all as
if Initial Bank were not the Agent and without any duty to account therefor to
the Banks.
SECTION 8.4 Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance on the Agent or any other Bank and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also acknowledges
that it will, independently and without reliance on the Agent or any other Bank
and based on such documents and information as it deems appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.
SECTION 8.5 Indemnification. The Banks agree to indemnify the Agent (to the
extent not promptly reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to the respective
principal amounts of the Obligations then held by each of them and/or the
respective amounts of their Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature whatsoever that may at
any time (including without limitation at any time following the payment of any
Obligations or termination of this Agreement) be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of any
Transaction Document or any action taken or omitted by the Agent under any
Transaction Document; provided, however, that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Agent's gross negligence or willful misconduct. Without limitation of the
foregoing, each Bank agrees to reimburse the Agent promptly upon demand for its
ratable share of any costs and expenses payable by the Borrower under Section
9.4, to the extent that the Agent is not reimbursed for such costs and expenses
by the Borrower.
SECTION 8.6 Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Banks and the Borrower and may be removed at any
time with or without cause with the written approval of the Required Banks. Upon
any such resignation or removal, the Required Banks shall have the right to
appoint a successor Agent with the consent of the Borrower, which shall not be
unreasonably withheld. If no successor Agent has been so appointed by the
Required Banks, and has accepted such appointment, within thirty (30) days after
the retiring Agent's giving of notice of resignation or the Required Banks'
removal of the retiring
32
Agent, then the retiring Agent may, on behalf of the Banks, appoint a successor
Agent with the consent of the Borrower (which shall not be unreasonably
withheld), which successor Agent 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 five hundred million dollars
($500,000,000). Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations under the Transaction Documents. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article 8
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was agent under this Agreement.
SECTION 8.7 Collateral. (a) Except as expressly provided herein, the Agent
shall have no duty to take any affirmative steps with respect to the collection
of amounts payable in respect of the Collateral. The Agent shall incur no
liability as a result of any private sale of the Collateral.
(b) The Banks hereby consent, and agree upon written request by the Agent
to execute and deliver such instruments and other documents as the Agent may
deem desirable to confirm such consent, to the release of the Liens on the
Collateral, including any release in connection with any sale, transfer or other
disposition of the Collateral or any part thereof, in accordance with the
Financing Documents.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Amendments, Etc. No amendment or waiver of any provision of
this Agreement or any Note, or consent to any departure by the Bor rower
therefrom, shall be effective unless in writing and signed or consented to (in
writing) by the Required Banks (and, in the case of amendments, the Borrower),
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 or consented to
(in writing) by all of the Banks, do any of the following: (a) waive any of the
conditions specified in Article III; (b) increase the Commitments of the Banks
or subject the Banks to any additional obligations; (c) reduce the principal
of, or interest on, the Loans or any
33
fees or other amounts payable hereunder; (d) postpone any date fixed for (i)
payment of principal of, or interest on, the Loans, (ii) reimbursement of
Drawings under the Debt Service Reserve Letter of Credit or (iii) payment of
fees or other amounts payable hereunder; (e) change the percentage of the
Commitments or of the Loans outstanding, or the number of Banks, required for
the Banks or any of them to take any action hereunder; or (f) amend this Section
9.1; and provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Persons required
above to take such action, affect the rights or duties of the Agent under this
Agreement or any other Credit Document.
SECTION 9.2 Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including by telecopier) and shall be mailed,
telecopied or delivered, if to the Borrower, to it at 000 Xxxxx 00xx Xxxxxx,
Xxxxx 000, Xxxxx, Xxxxxxxx 00000, Attention: Chief Financial Officer, with a
copy to General Counsel, telephone (000) 000-0000, telecopier (000) 000-0000; if
to any Bank other than the Initial Bank, to it at the address or telecopier
number set forth below its name in the Commitment Transfer Supplement by which
it became a party hereto; if to the Agent or the Initial Bank, to it at Eleven
Madison Avenue, New York, New York, telephone (212) 325-_____, telecopier, (212)
325-_____, Attention: _______________; or, as to each party, to it at such
other address or telecopier number as designated by such party in a written
notice to the other parties. All such notices and communications shall be deemed
received, (a) if personally delivered, upon delivery, (b) if sent by first-class
mail, on the third Business Day following deposit into the mails and (c) if sent
by telecopier, upon acknowledgment of receipt thereof by the recipient, except
that notices and communications to the Agent pursuant to Article 2 or 8 shall
not be effective until received by the Agent.
SECTION 9.3 No Waiver; Remedies. No failure on the part of any Bank or the
Agent to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof, and no single or partial exercise of any such right shall
preclude any other or further exercise thereof or the exercise of any other
right. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law.
SECTION 9.4 Costs and Expenses. The Borrower agrees to pay on demand on the
appropriate Funding Date under the Depositary Agreement (a) all reasonable costs
and expenses of the Agent and the Banks in connection with the preparation,
execution, delivery, syndication, administration, modification and amendment of
this Agreement, the Notes and the other documents to be delivered hereunder,
including (i) the reasonable fees and out-of-pocket expenses of one
34
counsel for the Banks with respect thereto and with respect to advising the
Agent and the Banks as to their rights and responsibilities, or the perfection,
protection or reservation of rights or interests, under this Agreement, the
other Transaction Documents and the other documents to be delivered hereunder;
and (ii) the reason able fees and expenses of any consultants, auditors or
accountants engaged by the Agent with the written consent (which shall not be
unreasonably withheld) of the Borrower pursuant hereto and (b) all reasonable
costs and expenses of the Agent and the Banks (including reasonable counsel fees
and expenses of the Agent and the Banks) in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Agreement, the other Transaction Documents and the other documents to be
delivered hereunder, whether in any action, suit or litigation, any bankruptcy,
insolvency or similar proceeding. In addition, the Borrower shall pay any and
all stamp and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of the
aforementioned documents, and the Borrower agrees to indemnify and hold the
Agent and the Banks harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay any of the
foregoing to the extent the Borrower had notice thereof.
SECTION 9.5 Application of Moneys. If any sum paid or recovered in respect
of the Obligations is less than the amount then due, the Agent may apply that
sum to principal, interest, fees or any other amount due under this Agreement in
such proportions and order and generally in such manner as the Agent shall
reasonably determine.
SECTION 9.6 Severability. Any provision of this Agreement that is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions of this Agreement or affecting the validity, enforceability or
authorization of such provision in any other jurisdiction.
SECTION 9.7 Limitation of Liability. Notwithstanding anything to the
contrary contained in this Agreement and the Transaction Documents, the
liability and obligation of the Borrower to perform and observe and make good
the obligations contained in this Agreement and the Security Documents shall not
be enforced by any action or proceeding wherein damages or any money judgment or
any deficiency judgment or any judgment establishing any personal obligation or
liability shall be sought, collected or otherwise obtained against any officer,
director or shareholder or related Person of Borrower or any Secured Party, and
the Collateral
35
Agent, for itself and its successors and assigns, and on behalf of the Secured
Parties, irrevocably waives any and all right to xxx for, seek or demand any
such damages, money judgment, deficiency judgment or personal judgment against
any officer, director or shareholder or related Person of the Borrower under or
by reason of or in connection with this Agreement and agrees to look solely to
the Borrower and the security and Collateral held under or in connection with
the Security Documents for the enforcement of such liability and obligation of
the Borrower.
SECTION 9.8 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the Borrower, the Agent and the Banks and their respective
successors and assigns, except that the Borrower shall not have the right to
assign any of its rights and obligations hereunder without the prior written
consent of the Required Banks, and, except as provided in Section 9.9, no Bank
other than Initial Bank shall have the right to assign any of its rights and
obligations hereunder.
SECTION 9.9 Assignments and Participations. (a) Any Bank may at any time
(with the consent of the Borrower, such consent not to be unreasonably withheld
or delayed, the consent of the Agent, such consent not to be unreasonably
withheld or delayed, and the consent of the Initial Bank) sell to one or more
banks or other entities (a "Purchasing Bank") all or any part of its rights and
obligations under this Agreement and the Notes (which, except in the case of an
assignment to a Person that, immediately before such assignment, was a Bank,
shall be equal to at least $5,000,000) pursuant to a Commitment Transfer
Supplement, executed by such Purchasing Bank, such transferor Bank, the Agent
and the Initial Bank (and, in the case of a Purchasing Bank that is not then a
Bank or an Affiliate thereof, the Bor rower). Upon (x) such execution of such
Commitment Transfer Supplement, and (y) delivery of a copy thereof to the
Borrower and payment of the amount of its participation to the Agent or such
transferor Bank, such Purchasing Bank shall for all purposes be a Bank party to
this Agreement and shall have all the rights and obliga tions of a Bank under
this Agreement, to the same extent as if it were an original party hereto with
the commitment percentage as set forth in such Commitment Transfer Supplement,
which shall be deemed to amend this Agreement to the extent, and only to the
extent, necessary to reflect the addition of such Purchasing Bank and the
resulting adjustment of commitment percentages arising from the purchase by such
Purchasing Bank of all or a portion of the rights and obligations of such
transferor Bank under this Agreement and the Notes. Upon the consummation of any
transfer pursuant to this Section 9.9, the transferor Bank, the Agent and the
Borrower shall make appropriate arrangements so that, if required, replacement
Notes are issued to such transferor Bank and new Notes or, as
36
appropriate, replace ment Notes, are issued to such Purchasing Bank, in each
case, in principal amounts reflecting their Commitment.
(b) Any Bank may, from time to time, sell or offer to sell participating
interests in any Loans owing to such Bank, any Notes held by such Bank, any
Commitment of such Bank or any other interests and obligations of such Bank
hereunder, to one or more banks or other entities (each, a "Participant"), on
such terms and conditions as may be determined by the selling Bank, without the
consent of or notice to the Borrower, and the grant of such participation shall
not relieve any Bank of its obligations, or impair the rights of any Bank,
hereunder. In the event of any such sale by a Bank of a participating interest
to a Participant, such Bank shall remain solely responsible for the performance
of such Bank's obligations under this Agreement, such Bank shall remain the
holder of any such Notes for all purposes under this Agreement, the Borrower,
the Agent and the Initial Bank will continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations under this
Agreement and such Bank shall retain the sole right and responsibility to
exercise the rights of such Bank, and enforce the obligations of the Borrower,
including, without limitation, the right to approve any amendment, modification,
supplement or waiver of any provision of any Credit Document and the right to
take action under Article 6 hereof and such Bank shall not grant any such
Participant any voting rights or veto power over any such action by such Bank
under this Agreement (provided that such Bank may agree not to consent to any
modification, amendment or waiver of this Agreement, without the consent of the
Participant, that would alter the principal of or interest on the Loans,
postpone the date fixed for any payment of principal of or interest thereon or
extend the term of any Commit ment; provided further that if any Participant
refuses to consent to any such modification, amendment or waiver of this
Agreement, such Bank may purchase the participating interests from such
non-consenting Participant). No Participant shall have any rights under this
Agreement to receive payment of principal of or interest on any Loan except
through a Bank and as provided in this Section 9.9. The Bor rower agrees that,
upon the occurrence and during the continuance of any Event of Default, each
Participant shall have the right of set-off in respect of its participating
interest in amounts owing under this Agreement and any Notes as set forth in
Section 2.22 hereof to the same extent as if the amount of its participating
interest was owing directly to it as a Bank under this Agreement or any Notes.
The Borrower also agrees that each Participant shall be entitled to the benefits
of Sections 2.15, 2.16 and 2.17 hereof with respect to its participation granted
hereunder; provided that no Participant shall be entitled to receive any greater
amount pursuant to such Sections than the Bank transferring such
37
participation would have been entitled to receive in respect of the amount of
the participation transferred to such Participant had no such transfer occurred.
(c) Any Bank may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 9.9, disclose to
the Purchasing Bank or Participant or proposed Purchasing Bank or Participant
any information relating to the Borrower furnished to such Bank by or on behalf
of the Borrower; provided, however, that prior to any such disclosure, the
Person receiving such disclosure shall sign such confidentiality agreements as
the Borrower may reasonably request.
SECTION 9.10 Indemnification. The Borrower agrees to indemnify and hold
harmless the Agent and each Bank and, in their capacity as such, each of their
respective officers, directors, shareholders, controlling persons, employees,
agents and servants (each an "Indemnified Party") from and against any and all
claims, damages, losses, liabilities, obligations, penalties, actions, causes of
action, judgments, suits, costs, expenses or disbursements (including, without
limitation, reasonable attorneys and consultants' fees and expenses)
(collectively, "Damages") whatsoever that such Indemnified Party may incur (or
that may be claimed against such Indemnified Party by any Person) by reason of
(a) any untrue statement or alleged untrue statement of any material fact
concerning the Borrower or the Collat eral, or the omission or alleged omission
to state any fact concerning the Borrower or the Collateral necessary to make
any such statement, in light of the circumstances under which it was made, not
misleading; (b) the issuance, sale or delivery of the Securities and the Notes;
(c) the use of the proceeds of the Securities or any Drawing; (d) any
reasonable action taken by such Indemnified Party in protecting and enforcing
the rights and remedies of the Agent and the Banks under the Transaction
Documents; (e) subject to Section 7.2, the execution, delivery or transfer of,
or payment or failure to pay under, the Debt Service Reserve Letter of Credit;
(f) any claim of any Person with respect to any finder's fee, brokerage
commission or other similar sum due in connection with any Transaction Document;
or (g) any failure by the Borrower to comply with any environmental laws;
provided, however, that the Borrower shall not be required to indemnify Initial
Bank for any Damages to the extent caused by Initial Bank's willful misconduct
or gross negligence in (x) paying under the Debt Service Reserve Letter of
Credit or (y) failing to pay under the Debt Service Reserve Letter of Credit
after the presentation to it by the Depositary Bank of a draft and certificate
strictly complying with the terms and conditions of the Debt Service Reserve
Letter of Credit (unless Initial Bank in good faith believed itself (based upon
an opinion of counsel) to be prohibited by law or legal authority from making
such payment). If any action, suit
38
or proceeding arising from any of the foregoing is brought against any
Indemnified Party, such Indemnified Party shall promptly notify the Borrower in
writing, enclosing a copy of all papers served, but the omission so to notify
the Borrower of any such action shall not relieve it of any liability that it
may have to any Indemnified Party otherwise than under this Section 9.10;
provided, however, that the Borrower shall not be liable for any settlement of
any such action effected without the Borrower's prior written consent. In case
any such action shall be brought against any Indemnified Party and it shall
notify the Borrower of the commencement thereof, the Borrower shall be entitled
to participate in and, to the extent that it shall wish, to assume the defense
thereof with counsel reasonably satisfactory to such Indemnified Party, and
after notice from the Borrower to such Indemnified Party of the Borrower's
election so to assume the defense thereof, the Borrower shall not be liable to
such Indemnified Party for any subsequent legal or other expenses attributable
to such defense, except as provided below, other than reasonable costs of
investigation subsequently incurred by such Indemnified Party in connection
with the defense thereof. The Indemnified Party shall have the right to employ
its own counsel in any such action, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (i) the employ ment of
counsel by such Indemnified Party has been authorized by the Borrower, (ii) the
Indemnified Party shall have reasonably concluded that there may be a conflict
of interest between the Borrower and the Indemnified Party in the conduct of the
defense of such action (in which case the Borrower shall not have the right to
direct the defense of such action on behalf of the Indemnified Party) or (iii)
the Borrower shall not in fact have employed counsel reasonably satisfactory to
the Indemnified Party to assume the defense of such action. Recoveries under
this Section 9.10 shall be subject in all respects to Section 7 of the
Intercreditor Agreement to the same extent as if the indemnification provisions
herein had been included in Section 12(b) of the Intercreditor Agreement.
SECTION 9.11 Governing Law. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CHOICE-OF-LAW PRINCIPLES THEREOF.
SECTION 9.12 Consent to Jurisdiction and Venue. Each of the parties hereto
irrevocably (i) agrees that any suit, action or other legal proceeding arising
out of or relating to this Agreement may be brought in any court of the State of
New York or any court of the United States of America located in the State of
New York, (ii) consents, for itself and in respect of its property, to the
jurisdiction of each such court in any such suit, action or proceeding and (iii)
waives any objection which it may have to the laying of venue of any such suit,
action or proceeding in any
39
of such courts and any claim that any such suit, action or proceeding has been
brought in an inconvenient forum. Each of the parties agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Section 9.12 shall affect the right of any
party hereto to serve legal process in any other manner permitted by law.
SECTION 9.13 Headings. The section and subsection headings used herein have
been inserted for convenience of reference only and do not constitute matters to
be considered in interpreting this Agreement.
SECTION 9.14 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 9.15 Waiver of Jury Trial. THE BORROWER, THE AGENT AND THE BANKS
HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY OF THE CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY.
40
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized, as of the
day and year first above written.
CE GENERATION, LLC
By: /s/ Xxxxxx X. XxXxxxxx
------------------------------
Commitment
----------
$12,250,000.00 CREDIT SUISSE FIRST BOSTON,
as Agent, Initial Bank and as a Bank
By: /s/ Xxxxx X. Wu
------------------------------
By: /s/ Xxxxxx Xxxxxxxx
------------------------------
$12,250,000.00 XXXXXX COMMERCIAL PAPER INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
By:
------------------------------
Signature Page to Debt Service Reserve LOC Reimbursement Agreement
Exhibit A
Form of Debt Service Reserve Letter of Credit
Credit Suisse First Boston Letter of Credit No. TS-06001031
Eleven Madison Avenue Irrevocable Standby Credit
Xxx Xxxx, Xxx Xxxx 00000
Date and Place of Issue: Date and Place of Expiry:
New York, New York Credit Suisse First Boston,
March 2, 1999 New York, New York
February 29, 2000
Applicant:
CE Generation, LLC
000 Xxxxx 00xx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Beneficiary: Amount: Up to an aggregate
Chase Manhattan Bank and Trust of Twenty-four Million Five
Company, National Association, Hundred Thousand Dollars
as Depositary Bank (US$24,500,000)
000 Xxxxxxxxxx Xxxxxx, #0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Corporate Trust Department
Credit Available With:
Credit Suisse First Boston
By: Negotiation, Against
Presentation of the Documents
Detailed Herein Drawn on
Credit Suisse First Boston
Ladies and Gentlemen:
We irrevocably authorize you to draw on us for the account of the Applicant in
any amount up to an aggregate amount as of any date as set forth on Schedule I
hereto but in no event to exceed TWENTY-FOUR MILLION FIVE HUNDRED THOUSAND
A-1
UNITED STATES DOLLARS (US$24,500,000.00) (as reduced or reinstated from time to
time as set forth in this Letter of Credit, the "Outstanding Amount") available
against presentation of a dated drawing request drawn on Credit Suisse First
Boston, New York Office, manually signed by an authorized officer of the
Beneficiary (who is identified as such) appropriately completed in the form of
Annex 1 hereto and sent by the Beneficiary's authorized officer.
The above drawing request and all communications with respect to this Letter of
Credit shall be in writing, addressed to us at 0 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx, telephone (000) 000-0000, telecopier, (000) 000-0000,
Attention: Trade Services, telex no. ___________, referencing this Letter of
Credit No. TS- 06001031 and presented to us by tested telex, delivery in person
or facsimile transmission at such address, provided that the original of the
above drawing request or such communications, as the case may be, shall be sent
to us at such address by overnight courier for receipt by us within three (3)
Business Days of the date of any such facsimile transmission.
If the drawing request is presented in compliance with the terms of this Letter
of Credit to us at such address by 12:00 noon New York City time on any Business
Day, payment will be made not later than 3:00 p.m. New York City time on such
day and if such drawing request is so presented to us after 12:00 noon New York
City time on any Business Day, payment will be made on the following Business
Day not later than 1:00 p.m. New York City time. Payment under this Letter of
Credit shall be made in immediately available funds by wire transfer to such
account as may be designated by the Beneficiary in the applicable drawing
request.
As used in this Letter of Credit, "Business Day" means any day on which commer
cial banks located in New York, New York are not required or authorized to
remain closed.
This Letter of Credit shall expire on the date of expiry set forth above (the
"Stated Expiration Date").
Notwithstanding the foregoing, we may at any time, subject to the provisions of
the Debt Service Reserve Letter of Credit and Reimbursement Agreement, dated as
of March 2, 1999, among the Applicant, the Banks party thereto and Credit Suisse
First Boston, as Agent (the "Debt Service Reserve Letter of Credit and
Reimbursement Agreement"), terminate this Letter of Credit by giving the
Beneficiary and Chase Manhattan Bank and Trust Company, National Association, as
Trustee (in such capacity, the "Trustee") under the Indenture referred to in the
Debt Service Reserve
A-2
Letter of Credit and Reimbursement Agreement, written notice thereof in the form
of Annex 2 hereto by delivery in person or facsimile transmission (with written
confirmation by overnight courier for receipt by the Beneficiary and the
Trustee within two (2) Business Days) addressed to Chase Manhattan Bank and
Trust Company, National Association, at 000 Xxxxxxxxxx Xxxxxx, #0000, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, Attn: Corporate Trust Department, [include telex,
telephone and fax numbers], at least forty-five (45) days prior to termination,
whereupon the Beneficiary is authorized to draw on us prior to such termination
the Outstanding Amount of this Letter of Credit by presentation to us, in the
manner and at the address specified in the fourth preceding paragraph, of a
drawing request appropriately completed in the form of Annex 1 hereto and sent
and signed by the Beneficiary's authorized officer.
This Letter of Credit is effective immediately.
In the event that a drawing request fails to comply with the terms of this
Letter of Credit, we shall provide the Beneficiary prompt notice of same stating
the reasons therefor and shall upon your instructions hold any non-conforming
drawing request and other documents at your disposal or return any
non-conforming drawing request and other documents to the Beneficiary at the
address set forth above by delivery in person or facsimile transmission (with
originals thereof sent by overnight courier for receipt within two (2) Business
Days). Upon being notified that the drawing was not effected in compliance with
this Letter of Credit, the Beneficiary may attempt to correct such non-complying
drawing request in accordance with the terms of this Letter of Credit.
This Letter of Credit sets forth in full the terms of our undertaking and this
undertaking shall not in any way be modified, amended, limited or amplified by
reference to any document, instrument or agreement referred to herein, except
only defined terms used herein and the drawing requests and certificates
referred to herein; and any such reference shall not be deemed to incorporate
herein by reference any document, instrument or agreement except for such
defined terms, drawing requests and certificates.
This Letter of Credit may be assigned upon presentation to us of a signed
transfer certificate in the form of Annex 3 accompanied by this Letter of
Credit, in which the Beneficiary irrevocably transfers to such transferee all of
its rights hereunder, whereupon we agree to either issue a substitute letter of
credit to such successor or endorse such transfer on the reverse of this Letter
of Credit.
A-3
Partial drawings under this Letter of Credit are allowed and each such partial
drawing shall reduce the amount thereafter available hereunder for drawings
under this Letter of Credit. This Letter of Credit shall be reinstated as
provided in Sections 2.2(e) and 2.7(c) of the Debt Service Reserve Letter of
Credit and Reimbursement Agreement and we shall so advise the Beneficiary in a
certificate in the form of Annex 4 hereto. The Outstanding Amount shall be
reduced or increased as provided in Sections 2.7(b) and 2.7(c) of the Debt
Service Reserve Letter of Credit and Reimbursement Agreement, subject to
reinstatement as provided in the Debt Service Reserve Letter of Credit and
Reimbursement Agreement. In addition, the Outstanding Amount shall be reduced
as provided in Sections 2.2(e) and 2.2(g) of the Debt Service Reserve Letter of
Credit and Reimbursement Agreement to the extent that we so advise the
Beneficiary pursuant to a certificate in the form of Annex 5 hereto.
All banking charges, including any advising and negotiating bank charges, are
for the account of the Applicant.
All drawing requests under this Letter of Credit must bear the clause:
"Drawn under Credit Suisse First Boston Letter of Credit Number TS-
06001031 dated March 2, 1999."
This Letter of Credit shall not be amended except with the written concurrence
of Credit Suisse, the Applicant and the Beneficiary.
We hereby engage with you that a drawing request drawn strictly in compliance
with the terms of this Letter of Credit and amendments thereto shall meet with
due honor upon presentation.
This Letter of Credit is subject to the Uniform Customs and Practice for Documen
tary Credits (1993 Revision in force as from 1st of January 1994), International
Chamber of Commerce Publication Number 500 (the "Uniform Customs"). This Letter
of Credit shall be deemed to be a contract made under the laws of the State of
New York and shall, as to matters not governed by the Uniform Customs, be
governed by and construed in accordance with the laws of such State.
We irrevocably agree with you that any legal action or proceeding with respect
to this Letter of Credit shall be brought in the courts of the State of New York
in the County of New York or of the United States of America in the Southern
District of New York. By signing this Letter of Credit, we irrevocably submit to
the jurisdiction of such courts solely for the purposes of this Letter of
Credit. We hereby waive, to the
A-4
fullest extent permitted by law, any objection we may now or hereafter have to
the laying of venue in any such action or proceeding in any such court.
CREDIT SUISSE FIRST BOSTON
---------------------------
Authorized signature
---------------------------
Authorized signature
A-5
SCHEDULE I
OUTSTANDING AMOUNT OF DEBT SERVICE
RESERVE LETTER OF CREDIT
PART I
Set forth below for each period indicated is the Outstanding Amount of the
Debt Service Reserve Letter of Credit which shall be adjusted in accordance with
the terms of the Debt Service Reserve Letter of Credit and Reimbursement
Agreement, including, without limitation, Sections 2.2(e), 2.7(b), 2.7(c) and
6.1 thereof. Promptly upon the occurrence of any such adjustment to the
Outstanding Amount (other than pursuant to Section 2.7(b) and 2.7(c) of the Debt
Service Reserve Letter of Credit and Reimbursement Agreement), the Initial Bank
shall prepare a revised version of this Schedule I to reflect such adjustment
and a copy of which shall be annexed to the notice delivered pursuant to Section
2.2(g) of the Debt Service Reserve Letter of Credit and Reimbursement Agreement.
Notwithstanding anything to the contrary contained herein, no increase in the
Debt Service Reserve Requirement occasioned by the issuance of Additional
Securities shall result in an increase in the Outstanding Amount without the
consent of the banks in accordance with the Debt Service Reserve Letter of
Credit and Reimbursement Agreement.
Period
----------------------------------------------------
From and including To and including Outstanding Amount*
------------------ ---------------- -------------------
June 16, 1999 December 15, 1999 $24,279,160
December 16, 1999 June 15, 2000 $24,279,160
June 16, 2000 December 15, 2000 $24,279,160
December 16, 2000 June 15, 2001 $24,279,160
June 16, 2001 December 15, 2001 $24,279,160
December 16, 2001 June 15, 2002 $24,279,160
June 16, 2002 December 15, 2002 $24,279,160
December 16, 2002 June 15, 2003 $24,178,344
June 16, 2003 December 15, 2003 $24,178,344
December 16, 2003 June 15, 2004 $24,178,344
--------
* Prior to giving effect to any drawings hereunder or reinstatement pursuant
to the Debt Service Reserve Letter of Credit and Reimbursement Agreement.
June 16, 2004 December 15, 2004 $24,178,344
December 16, 2004 June 15, 2005 $24,178,344
June 16, 2006 December 15, 2005 $24,178,344
December 16, 2005 June 15, 2006 $24,178,344
June 16, 2006 December 15, 2006 $24,178,344
December 16, 2006 June 15, 2007 $24,178,344
June 16, 2007 December 15, 2007 $24,178,344
December 16, 2007 June 15, 2008 $24,178,344
June 16, 2008 December 15, 2008 $24,178,344
December 16, 2008 June 15, 2009 $23,655,516
June 16, 2009 December 15, 2009 $21,332,688
December 16, 2009 June 15, 2010 $20,876,604
June 16, 2010 December 15, 2010 $19,528,229
December 16, 2010 June 15, 2011 $19,528,229
June 16, 2011 December 15, 2011 $19,528,229
December 16, 2011 June 15, 2012 $19,528,229
June 16, 2012 December 15, 2012 $19,528,229
December 16, 2012 June 15, 2013 $19,528,229
June 16, 2013 December 15, 2013 $19,528,229
December 16, 2013 June 15, 2014 $19,528,229
June 16, 2014 December 15, 2014 $19,528,229
December 16, 2014 June 15, 2015 $19,528,229
June 16, 2015 December 15, 2015 $19,528,229
December 16, 2015 June 15, 2016 $19,528,229
June 16, 2016 December 15, 2016 $19,528,229
December 16, 2016 June 15, 2017 $19,528,229
June 16, 2017 December 15, 2017 $19,528,229
December 16, 2017 June 15, 2018 $19,528,229
June 16, 2018 December 15, 2018 $18,854,114
2
PART II
The following table of the outstanding Amount of the Debt Service Reserve
Letter of Credit shall be utilized at any time that the interest rate on the
Securities has been adjusted pursuant to Section 2.2(b) of the Indenture, and
shall be subject to adjustment as described in Part I above.
Period
-------------------------------------------------
From and including To and including Outstanding Amount*
------------------ ---------------- -------------------
June 16, 1999 December 15, 1999 $25,221,660
December 16, 1999 June 15, 2000 $25,221,660
June 16, 2000 December 15, 2000 $25,221,660
December 16, 2000 June 15, 2001 $25,221,660
June 16, 2001 December 15, 2001 $25,221,660
December 16, 2001 June 15, 2002 $25,221,660
June 16, 2002 December 15, 2002 $25,221,660
December 16, 2002 June 15, 2003 $24,857,844
June 16, 2003 December 15, 2003 $24,857,844
December 16, 2003 June 15, 2004 $24,857,844
June 16, 2004 December 15, 2004 $24,857,844
December 16, 2004 June 15, 2005 $24,857,844
June 16, 2006 December 15, 2005 $24,857,844
December 16, 2005 June 15, 2006 $24,857,844
June 16, 2006 December 15, 2006 $24,857,844
December 16, 2006 June 15, 2007 $24,857,844
June 16, 2007 December 15, 2007 $24,857,844
December 16, 2007 June 15, 2008 $24,857,844
June 16, 2008 December 15, 2008 $24,857,844
December 16, 2008 June 15, 2009 $24,299,766
June 16, 2009 December 15, 2009 $21,941,688
December 16, 2009 June 15, 2010 $21,454,854
June 16, 2010 December 15, 2010 $19,619,129
December 16, 2010 June 15, 2011 $19,619,129
--------
* Prior to giving effect to any drawings hereunder or reinstatement pursuant
to the Debt Service Reserve Letter of Credit and Reimbursement Agreement.
3
June 16, 2011 December 15, 2011 $19,619,129
December 16, 2011 June 15, 2012 $19,619,129
June 16, 2012 December 15, 2012 $19,619,129
December 16, 2012 June 15, 2013 $19,619,129
June 16, 2013 December 15, 2013 $19,619,129
December 16, 2013 June 15, 2014 $19,619,129
June 16, 2014 December 15, 2014 $19,619,129
December 16, 2014 June 15, 2015 $19,619,129
June 16, 2015 December 15, 2015 $19,619,129
December 16, 2015 June 15, 2016 $19,619,129
June 16, 2016 December 15, 2016 $19,619,129
December 16, 2016 June 15, 2017 $19,619,129
June 16, 2017 December 15, 2017 $19,619,129
December 16, 2017 June 15, 2018 $19,619,129
June 16, 2018 December 15, 2018 $18,899,564
4
ANNEX 1
"Drawn under Credit Suisse First Boston Letter of Credit Number
TS-06001031 dated March 2, 1999"
DRAWING REQUEST
[Date]
Credit Suisse First Boston
Eleven Madison Avenue
New York, New York 10010
Attention: Trade Services
Ladies and Gentlemen:
The undersigned hereby draws on Credit Suisse First Boston Letter of Credit
No. TS-06001031 Irrevocable Standby Letter of Credit (the "Letter of Credit")
dated March 2, 1999, issued by you in favor of us. Any capitalized term used
herein and not defined herein shall have its respective meaning as set forth in
the Letter of Credit.
In connection with this drawing, we hereby certify that:
A) "This drawing in the amount of US$_________________ is being made pursuant
to Credit Suisse First Boston Letter of Credit No. TS-06001031 Irrevocable
Standby Letter of Credit issued to the Depositary Bank pursuant to Section
3.3 of the Deposit and Disbursement Agreement, dated as of March 2, 1999,
among CE Generation, LLC, the Assignors, Chase Manhattan Bank and Trust
Company, National Association, as Collateral Agent, and Chase Manhattan
Bank and Trust Company, National Association, as Depositary Bank (as the
same may be amended, supplemented or modified from time to time, the
"Depositary Agreement")";
[Use one or more of the following forms of paragraph B, as applicable]
B) "After the transfer of monies on deposit in the Debt Service Reserve
Account, there are insufficient monies in the Debt Payment Account on the
Payment Date occurring _______________, _____ to pay the [interest] [and]
[or] [principal] due on the Securities on such date (each capitalized word
being used as defined in the Indenture) (whether due on a Payment Date, at
Stated Maturity, at acceleration or otherwise)";
or
B) "You have delivered notice to CE Generation, LLC and the Trustee that the
long-term debt rating of Credit Suisse First Boston has fallen below "A" as
determined by Standard & Poor's Ratings Group or "A2" as determined by
Xxxxx'x Investor Services, Inc. and CE Generation, LLC has failed to
provide us with a substitute letter of credit from another letter of credit
provider within forty-five (45) days of receipt of such notice."
or
B) "The Stated Expiration Date will occur within forty-five (45) days of the
date hereof and CE Generation, LLC has failed to deliver a replacement or
renewal letter of credit or other security reasonably acceptable to
Depositary Bank and security is still required under the terms of the
Depositary Agreement."
or
B) "You have delivered to us notice that the Letter of Credit will terminate
prior to its stated expiry date of [insert Stated Expiration Date] and CE
Generation, LLC has failed to deliver a replacement or renewal letter of
credit or other security reasonably acceptable to Depositary Bank not less
than five (5) Business Days prior to the termination date as provided in
such notice of termination and security is still required under the terms
of the Depositary Agreement."
or
B) "You have delivered to us notice that interest on loans made by Credit
Suisse First Boston in respect of drawings under the Credit Suisse First
Boston Letter of Credit No. TS-06001031 Irrevocable Standby Letter of
Credit is now due and payable, and the drawing requested hereunder,
together with all
2
drawings under the Letter of Credit in the current calendar year do not
exceed $5,000,000 in the aggregate."
C) "The amount requested to be drawn does not exceed the Outstanding Amount";
and
D) "You are directed to make payment of the requested drawing to account no.
_______ at _____________________________ [insert bank name, address and
account number]."
3
IN WITNESS WHEREOF, the undersigned has executed and delivered this request
on this ___ day of ______________________, ____.
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION
By:______________________________
Name:
Title:
4
ANNEX 2
NOTICE OF TERMINATION OF LETTER OF CREDIT
[Date]
Chase Manhattan Bank and Trust Company,
National Association
000 Xxxxxxxxxx Xxxxxx, #0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Corporate Trust Department
Ladies and Gentlemen:
Reference is made to Credit Suisse First Boston Letter of Credit No.
TS-06001031 Irrevocable Standby Letter of Credit (the "Letter of Credit") dated
March 2, 1999, issued by us in your favor.
This constitutes our notice to you pursuant to the Letter of Credit that
the Letter of Credit shall terminate on _________________, ____ [insert a date
which is 45 or more days after the date of this notice of termination] (the
"Termination Date").
Pursuant to the terms of the Letter of Credit, you are authorized to draw
(pursuant to one or more drawings), prior to the Termination Date, on the Letter
of Credit in an aggregate amount that does not exceed the Outstanding Amount (as
defined in the Letter of Credit).
Very truly yours,
CREDIT SUISSE FIRST BOSTON
By:
-------------------------------
By:
-------------------------------
ANNEX 3
TRANSFER OF LETTER OF CREDIT
[Date]
Credit Suisse First Boston
Eleven Madison Avenue
New York, New York 10010
Attention: Trade Services
Gentlemen:
Reference is made to Credit Suisse First Boston Letter of Credit No. TS-06001031
Irrevocable Standby Letter of Credit dated March 2, 1999 originally issued by
you in favor of Chase Manhattan Bank and Trust Company, National Association, as
Depositary Bank (the "Letter of Credit"). Any capitalized term used herein and
not defined shall have its respective meaning as set forth in the Letter of
Credit.
For value received, the undersigned, as beneficiary under the Letter of Credit,
hereby irrevocably transfers to ____________ (the "Transferee") all rights of
the under signed to draw under the Letter of Credit in their entirety.
The Transferee is the successor to the Beneficiary, as Depositary Bank under the
Deposit and Disbursement Agreement, dated as of March 2, 1999, among CE
Generation, LLC, the Assignors, Chase Manhattan Bank and Trust Company, National
Association, as Collateral Agent, Chase Manhattan Bank and Trust Company,
National Association, as Depositary Bank (as the same may be amended,
supplemented or modified from time to time, the "Depositary Agreement") and all
conditions to appointment of such successor set forth in the Depositary
Agreement have been satisfied.
By this transfer, all rights of the undersigned, as beneficiary under the Letter
of Credit, are transferred to the Transferee, and the Transferee shall have the
sole rights with respect to the Letter of Credit relating to any amendments
thereof and any notices thereunder. All amendments to the Letter of Credit are
to be consented to by the Transferee without necessity of any consent of or
notice to the undersigned.
1
Simultaneously with the delivery of this notice to you, copies of this notice
are being transmitted to the Transferee.
The Letter of Credit is returned herewith, and we ask you to either issue a
substitute letter of credit for the benefit of the Transferee or endorse the
transfer on the reverse thereof, and forward it directly to the Transferee with
your customary notice of transfer.
Very truly yours,
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION
By:
--------------------------------
Name:
Title:
2
ANNEX 4
CERTIFICATE OF REINSTATEMENT OF OUTSTANDING AMOUNT
[Date]
Chase Manhattan Bank and Trust Company,
National Association
000 Xxxxxxxxxx Xxxxxx, #0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Corporate Trust Department
Ladies and Gentlemen:
Reference is made to Credit Suisse First Boston Letter of Credit No.
TS-06001031 Irrevocable Standby Letter of Credit (the "Letter of Credit") dated
March 2, 1999, issued by us in your favor. Any capitalized term used herein and
not defined shall have its respective meaning as set forth in the Letter of
Credit.
This constitutes our notice to you pursuant to the Letter of Credit that:
[use one or more of the following paragraphs]
We have received repayment of a Loan in accordance with the provisions of
the Debt Service Reserve Letter of Credit and Reimburse ment Agreement in
the amount of $_______, and, pursuant to Section 2.7(c) of the Debt Service
Reserve Letter of Credit and Reimburse ment Agreement, the Outstanding
Amount is therefore increased by such amount to $________.
or
We have received payment of a Loan in accordance with the provisions of
the Debt Service Reserve Letter of Credit and Reimburse ment Agreement in
the amount of $________. The Debt Service Reserve Requirement has been
previously reduced (each capitalized term being used as defined in the
Indenture, dated as of
March 2, 1999, by and between CE Generation, LLC, and ________________, as
Trustee (as the same may be amended, supplemented or modified from time to
time, the "Indenture")). Accordingly, the Outstanding Amount is hereby
increased by $ _____ to $_______ to the extent that such increase shall not
cause the Outstanding Amount when added to the aggregate balance in the
Debt Service Reserve Account to exceed the Debt Service Reserve
Requirement.
Very truly yours,
CREDIT SUISSE FIRST BOSTON
By:
--------------------------------
By:
--------------------------------
2
ANNEX 5
CERTIFICATE OF CHANGE OF OUTSTANDING AMOUNT
[Date]
Chase Manhattan Bank and Trust Company,
National Association
000 Xxxxxxxxxx Xxxxxx, #0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Corporate Trust Department
Ladies and Gentlemen:
Reference is made to Credit Suisse First Boston Letter of Credit No.
TS-06001031 Irrevocable Standby Letter of Credit (the "Letter of Credit") dated
March 2, 1999 issued by us in your favor. Any capitalized term used herein and
not defined shall have its respective meaning as set forth in the Letter of
Credit. Reference is also made to that certain Deposit and Disbursement
Agreement, dated as of March 2, 1999 (as the same may be amended, supplemented
or modified from time to time, the "Depositary Agreement"), among, among others,
us and you, in your capacity as Depositary Bank.
This constitutes our notice to you pursuant to the Letter of Credit that we
have been advised by the Applicant that:
The Debt Service Reserve Requirement (as defined in the Depositary
Agreement) has been [reduced/increased] by the amount of $__________.
Accordingly, pursuant to Section 2.2(e) of the Debt Service Reserve Letter
of Credit and Reimbursement Agreement, the Outstanding Amount is
[reduced/increased] by $____________ to $_____________ as set forth on
Schedule I annexed hereto.
Very truly yours,
CREDIT SUISSE FIRST BOSTON
By:_______________________________
By:_______________________________
EXHIBIT B
DEBT SERVICE RESERVE LETTER OF CREDIT PROMISSORY NOTE
$24,500,000.00 New York, New York
____________, 1999
FOR VALUE RECEIVED, the undersigned, CE GENERATION, LLC, a Delaware limited
liability company (the "Borrower"), hereby unconditionally promises to pay to
the order of Credit Suisse First Boston (the "Bank") the lesser of (i) the
principal sum of Twenty-four million five hundred thousand dollars
($24,500,000.00) and (ii) the aggregate unpaid principal amount of the Loans
made by the Bank to the Borrower under the Debt Service Reserve LOC
Reimbursement Agreement referred to below, on the dates and in the amounts
specified therein.
The Borrower further promises to pay interest on the daily unpaid principal
amount hereof from time to time outstanding on the dates and at the rates
specified in the Debt Service Reserve LOC Reimbursement Agreement (as herein
defined). This Note is hereby expressly limited so that in no contingency or
event, whether by reason of acceleration of the maturity of any indebtedness
evidenced hereby or otherwise, shall the interest contracted for or charged or
received by the Bank exceed the maximum amount permissible under applicable law.
If, from any circumstance whatsoever, interest would otherwise be payable to the
Bank in excess of the maximum lawful amount, the interest payable to the Bank
shall be reduced to the maximum amount permitted under applicable law, and the
amount of interest for any subsequent period, to the extent less than that
permitted by applicable law, shall to that extent be increased by the amount of
such reduction.
Each holder hereof is irrevocably authorized to endorse on the schedule
attached hereto, or on a continuation thereof, the date each such interest
payment is due and the amount of each such interest payment determined in accor
dance with the Debt Service Reserve LOC Reimbursement Agreement. All such
notations shall constitute prima facie evidence of the accuracy of the
information so recorded and be enforceable against the Borrower with the same
force and effect as if such amounts were each set forth in a separate note
executed by the Borrower.
B-1
All payments due hereunder shall be made without setoff, counter claim or
deduction of any nature to Credit Suisse First Boston, as Agent, at Eleven
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, in lawful money of the United States
of America and in immediately available funds, or at such other place and in
such other manner as may be specified by the Agent pursuant to the Debt Service
Reserve LOC Reimbursement Agreement.
Each holder hereof is irrevocably authorized to endorse on the schedule
attached hereto, or on a continuation thereof, the date and amount of each Loan
made to the Borrower and each payment or prepayment of principal thereof,
provided that the failure of such holder to make, or any error in making, any
such recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Debt Service Reserve LOC Reimbursement Agreement. All
such notations shall constitute prima facie evidence of the accuracy of the
information so recorded and be enforceable against the Borrower with the same
force and effect as if such amounts were each set forth in a separate note
executed by the Borrower.
This Note is the "Note" of the Borrower to the Bank referred to in,
evidences each Loan made by the Bank to the Borrower under, is subject to the
provisions of, and entitles its holder to the benefits of, the Debt Service
Reserve Letter of Credit and Reimbursement Agreement, dated as of March 2, 1999
(the "Debt Service Reserve LOC Reimbursement Agreement"), among the Borrower,
the Bank and the other banks parties thereto, and Credit Suisse First Boston, as
agent for the Bank and such other banks, as the same may be amended,
supplemented or otherwise modified from time to time and to which reference is
hereby made for a more complete statement of the terms and conditions under
which each Loan evidenced hereby is to be made and repaid. Capitalized terms in
this Note that are not specifically defined herein shall have the meanings
ascribed to them in the Debt Service Reserve LOC Reimbursement Agreement.
The Debt Service Reserve LOC Reimbursement Agreement provides for, among
other things, the acceleration of the maturity of the unpaid principal amount
hereof upon the occurrence of certain stated events and for voluntary
prepayments in certain circumstances and upon certain terms and conditions. The
obligations of the Borrower under the Debt Service Reserve LOC Reimbursement
Agreement and this Note are secured by, and the holder hereof is entitled to the
benefit of, the Security Documents.
In addition to any and all costs, fees and expenses for which the Borrower
is liable under the Debt Service Reserve XXX Xxxxxxxxxxxxx Xxxxxxxxx,
X-0
the Borrower promises to pay all reasonable costs and expenses, including reason
able attorneys' fees and disbursements, incurred in the collection and
enforcement hereof or any appeal of any judgment rendered hereon.
The Borrower hereby expressly waives diligence, presentment, protest,
demand, dishonor, nonpayment and notice of every kind to the fullest extent
permitted by applicable law. No failure or delay by any holder of this Note to
exercise any right or remedy under this Note or any other document or instrument
entered into pursuant to the Debt Service Reserve LOC Reimbursement Agreement
shall operate or be construed as a waiver or modification hereof or thereof.
This Note shall be binding upon the successors and assigns of the Borrower
and shall inure to the Bank and its successors, endorsees and assigns. If any
term or provision of this Note shall be held invalid, illegal or unenforceable,
the validity of all other terms and provisions hereof shall in no way be
affected thereby.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITH OUT REFERENCE TO THE CHOICE-OF-LAW PRINCIPLES
THEREOF.
Borrower hereby expressly and irrevocably agrees and consents that any
suit, action or proceeding arising out of or related to this Note may be
instituted in any state or federal court (at Bank's option) sitting in the
County of New York, State of New York, and, by the execution and delivery of
this Note, Borrower expressly waives any objection which it may have now or
hereafter to the venue or to the jurisdiction of any such suit, action or
proceeding, and irrevocably submits generally and unconditionally to the
jurisdiction of any such court in any such suit, action or proceeding.
All excise tax due on this Note has been paid by the Borrower.
CE GENERATION, LLC
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
B-3
SCHEDULE
Amount Total
and Date Date Interest Principal
Principal of Principal Unpaid payment Amount Amount
Amount Paid or Principal is of Interest of Loans Notation
Date of Loan Prepaid Balance Due Due Outstanding Made By
B-4
EXHIBIT C
Form of Commitment Transfer Supplement
COMMITMENT TRANSFER SUPPLEMENT, dated as of the date set forth in Item 1 of
Schedule I hereto, among each Transferor Bank set forth in Item 2 of Schedule I
hereto (each, a "Transferor Bank"), each Purchasing Bank set forth in Item 3 of
Schedule I hereto (each, a "Purchasing Bank"), and Credit Suisse First Boston,
as the Initial Bank and as Agent under the Debt Service Reserve Letter of Credit
and Reimbursement Agreement described below.
W I T N E S S E T H
WHEREAS, this Commitment Transfer Supplement being executed and delivered
in accordance with Section 9.9 of the Debt Service Reserve Letter of Credit and
Reimbursement Agreement, dated as of March 2, 1999, by and among (i) CE
Generation, LLC, a Delaware limited liability company ("Borrower"), (ii) Credit
Suisse First Boston, in its individual capacity as initial bank (the "Initial
Bank"), and the other Banks named therein (collectively, the "Banks"), and (iii)
Credit Suisse First Boston, as agent for the Banks ("Agent") (as from time to
time amended, supplemented or otherwise modified in accordance with the terms
thereof, the "Debt Service Reserve LOC Reimbursement Agreement"; terms defined
therein being used herein as therein defined); and
WHEREAS, each Purchasing Bank (if it is not already a Bank party to the
Debt Service Reserve LOC Reimbursement Agreement) desires to become a Bank party
to the Debt Service Reserve LOC Reimbursement Agreement; and
WHEREAS, each Transferor Bank is selling and assigning to its respective
Purchasing Bank, certain rights, obligations and commitments under the Debt
Service Reserve LOC Reimbursement Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Upon receipt by Agent of [ ] ([ ]) fully executed originals of this
Commitment Transfer Supplement, to each of which is attached a fully completed
Schedule I, Schedule II and Schedule III, and each of which has been executed by
each Transferor Bank, each Purchasing Bank and any other Person required by the
Debt Service Reserve LOC Reimbursement Agreement to execute
C-1
this Commitment Transfer Supplement, Agent will transmit to Borrower, each
Transferor Bank and each Purchasing Bank a Transfer Effective Notice,
substantially in the form of Schedule IV hereto (a "Transfer Effective Notice").
Such Transfer Effective Notice shall set forth inter alia, the date on which the
transfer effected by this Commitment Transfer Supplement shall become effective
(the "Transfer Effective Date"), which date shall be the date hereof. From and
after the Transfer Effective Date each Purchasing Bank shall be a Bank party to
the Debt Service Reserve LOC Reimbursement Agreement for all purposes thereof.
2. Each Purchasing Bank shall pay to each of its respective Transferor
Banks an amount equal to the purchase price, as agreed between such Transferor
Bank and each such Purchasing Bank and set forth on Schedule II hereto (the
"Purchase Price"), of the portion being purchased (such Purchasing Bank's
"Purchased Percentage") by such Purchasing Bank of the outstanding Loans and
other amounts owing to the respective Transferor Bank under the Debt Service
Reserve LOC Reimbursement Agreement and the Notes (the "Outstanding Obliga
tions"). Each Purchasing Bank shall pay the appropriate Purchase Price to each
of its respective Transferor Banks, in immediately available funds, at or before
12:00 noon, local time of the appropriate Transferor Bank, on the first Business
Day of the month in which the Transfer Effective Date occurs. Effective upon the
Transfer Effective Date each Transferor Bank hereby irrevocably sells, assigns
and transfers to each of its respective Purchasing Banks, without recourse,
representation or warranty other than as set forth in Section 8 hereof, and each
such Purchasing Bank hereby irrevocably purchases, takes and assumes from each
of its respective Trans feror Banks, such Purchasing Bank's Purchased Percentage
of the Commitment, presently outstanding Loans and other amounts owing to each
such Transferor Bank under the Debt Service Reserve LOC Reimbursement Agreement
and the Notes, together with all instruments, documents and collateral security
pertaining thereto.
3. Each Transferor Bank has made arrangements with each of its respective
Purchasing Banks with respect to (a) the portion, if any, to be paid, and the
date or dates for payment, by such Transferor Bank to each of its respective
Purchasing Banks of any fees heretofore received by such Transferor Bank
pursuant to the Debt Service Reserve LOC Reimbursement Agreement prior to the
Transfer Effective Date and (b) the portion, if any, to be paid, and the date or
dates for payment, by each such Purchasing Bank to each Transferor Bank, or by
each such Transferor Bank to each Purchasing Bank, of fees or interest received
by each such Purchasing Bank or each such Transferor Bank, as the case may be,
pursuant to the Debt Service Reserve LOC Reimbursement Agreement from and after
the Transfer Effective Date. Any interest, accrued from and after the Transfer
Effective Date,
C-2
with respect to principal of the Loans for which the Purchase Price has yet to
be paid under Section 2 above, shall accrue for the benefit of the appropriate
Transferor Bank to the extent of the Adjusted Base Rate and shall accrue for the
benefit of the appropriate Purchasing Bank to the extent of the applicable
interest rate less the Adjusted Base Rate.
4. (a) All principal payments that would otherwise be payable from and
after the Transfer Effective Date to or for the account of any Transferor Bank
pursuant to the Debt Service Reserve LOC Reimbursement Agree ment and the Notes
shall, instead, be payable to or for the account of the appropriate Transferor
Banks and the appropriate Purchasing Banks, as the case may be, in accordance
with their respective interests as reflected in this Commitment Transfer
Supplement.
(b) Except as otherwise agreed as set forth in Section 3 hereof, all
interest, fees and other amounts that would otherwise accrue for the account of
any Transferor Bank from and after the Transfer Effective Date pursuant to the
Debt Service Reserve LOC Reimbursement Agreement and the Notes shall, instead,
accrue for the account of, and be payable to, the appropriate Transferor Banks
and the appropriate Purchasing Banks, as the case may be, in accordance with
their respective interests as reflected in this Commitment Transfer Supplement.
In the event that any amount of interest, fees, or other amounts accruing prior
to the Transfer Effective Date was included in the Purchase Price paid by any
Purchasing Bank, the appropriate Transferor Bank and such Purchasing Bank will
make appro priate arrangements for payment by such Transferor Bank to such
Purchasing Bank of such amount upon receipt thereof from Borrower.
5. On or prior to the Transfer Effective Date, each Transferor Bank will
deliver to Agent its Note[s]. On or prior to the Transfer Effective Date,
Borrower will deliver to Agent new Notes for each Purchasing Bank and each
Transferor Bank, in each case in principal amounts reflecting, in accordance
with the Debt Service Reserve LOC Reimbursement Agreement, their respective
"Revised Commitment Percentage" or "New Commitment Percentage", as the case may
be and as set forth in Schedule III hereto, of the Commitment or, as
appropriate, their then outstanding shares of the Outstanding Obligations (as
adjusted pursuant to this Commitment Transfer Supplement). Promptly after the
Transfer Effective Date, Agent will send to each Transferor Bank and Purchasing
Bank its new Notes[s] with the superseded Note[s] of each Transferor Bank
attached to the new Note[s] (or if more than one new Note[s], the superseded
Note[s] attached to one of such new Note(s) and copies thereof attached to all
other new Note[s]).
C-3
6. Concurrently with the execution and delivery hereof, the Transferor
Banks will provide to each Purchasing Bank (if it is not already a Bank party to
the Debt Service Reserve LOC Reimbursement Agreement) copies of all documents
delivered to the Transferor Banks evidencing satisfaction of the condi tions
precedent set forth in the Debt Service Reserve LOC Reimbursement Agreement.
7. Each of the parties to this Commitment Transfer Supplement agrees that
at any time and from time to time upon the written request of any other party,
it will execute and deliver such further documents and do such further acts and
things as such other party may reasonably request in order to effect the
purposes of this Commitment Transfer Supplement.
8. By executing and delivering this Commitment Transfer Supplement, each
Transferor Bank and each of its respective Purchasing Banks confirm to and agree
with each other, Agent, the Initial Bank and Banks as follows: (a) other than
the representation and warranty that it is the legal and beneficial owner of the
interest being assigned hereby free and clear of any adverse claim, each such
Transferor Bank makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connec tion with the Debt Service Reserve LOC Reimbursement
Agreement or the execu tion, legality, validity, enforceability, genuineness,
sufficiency or value of the Debt Service Reserve LOC Reimbursement Agreement,
the Notes or any other instrument or document furnished pursuant thereto, (b)
each such Transferor Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or the
performance or observance by Borrower of any of its obligations under the Debt
Service Reserve LOC Reimbursement Agreement, the Notes or any other instrument
or document furnished pursuant hereto, (c) each such Purchasing Bank confers
that it has received a copy of the Debt Service Reserve LOC Reimbursement
Agreement, together with copies of such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Commitment Transfer Supplement, (d) each such Purchasing Bank will,
independently and without reliance upon Agent, its respective Transferor Banks
or any other Bank or the Initial Bank 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 Debt Service Reserve
LOC Reimbursement Agreement, (e) each such Purchasing Bank appoints and
authorizes Agent to take such action as agent on its behalf and to exercise such
powers under the Debt Service Reserve LOC Reimbursement Agreement as are
C-4
delegated to the Agent by the terms thereof together with such powers as are
reasonably incidental thereto and (f) each such Purchasing Bank agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of the Debt Service Reserve LOC Reimbursement Agreement are required to be
performed by it as a Bank.
9. Schedule III hereto sets forth for each Transferor Bank and each
Purchasing Bank the revised Commitment, and/or Commitment Percentage, as the
case may be, of each Transferor Bank and each Purchasing Bank, as well as
certain administrative information with respect to each Purchasing Bank.
10. Notwithstanding anything to the contrary in this Commitment Transfer
Supplement, if the long-term debt rating of any Purchasing Bank shall, at any
time, be less than a rating of A or the equivalent thereof by S&P or A2 or the
equivalent thereof by Xxxxx'x, then the Initial Bank may, in its sole and
absolute discretion, purchase all or any part (as designated by the Initial
Bank) of such Purchasing Bank's participating interest hereunder (the "Purchased
Interests") (which, if in part, may be limited to the Purchasing Bank's
participating interest in the rights and obligations of the Initial Bank under,
and in connection with, one or more Debt Service Reserve Letters of Credit,
including, without limitation, the obligations to pay the Initial Bank if it is
not reimbursed by Borrower in immediately available funds for any drawings under
such Debt Service Reserve Letter of Credit and to make certain loans, if any,
provided to be made under the Debt Service Reserve LOC Reimbursement Agreement
in the event of certain drawings under such Debt Service Reserve Letter of
Credit, all in accordance with the Debt Service Reserve LOC Reimbursement
Agreement) by providing such Purchasing Bank with at least two Banking Days'
prior notice of such purchase and making a payment to such Purchasing Bank for
all outstanding amounts owing to it hereunder or pursuant to the Debt Service
Reserve LOC Reimbursement Agreement in respect of the Purchased Interests on the
date of such purchase as set forth in such notice. Upon any such purchase of all
of a Purchasing Bank's participating interest hereunder, such Purchasing Bank
shall no longer have any rights or obligations as a Purchasing Bank hereunder or
as a Bank under the Debt Service Reserve LOC Reimbursement Agreement or under
any other instruments or documents furnished pursuant thereto. The Initial Bank
may, in its sole and absolute discretion, retain for its own account and/or sell
its interest in all or any portion of the Purchased Interests.
11. THIS COMMITMENT TRANSFER SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
C-5
12. This Commitment Transfer Supplement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same document.
13. Execution of this Commitment Transfer Supplement by Agent and Borrower
as set forth below shall constitute any consent of such Person required pursuant
to Section 9.9 of the Debt Service Reserve LOC Reimbursement Agree ment.
IN WITNESS WHEREOF, the parties hereto have caused this Commitment Transfer
Supplement to be executed by their respective duly authorized officers on
Schedule I hereto as of the date set forth in Item 1 of Schedule I hereto.
C-6
SCHEDULE I TO COMMITMENT
TRANSFER SUPPLEMENT
COMPLETION OF INFORMATION AND
SIGNATURES FOR COMMITMENT
TRANSFER SUPPLEMENT
Re: Debt Service Reserve Letter of Credit
and Reimbursement Agreement, dated as
of March 2, 1999, with CE Generation, LLC,
as Borrower.
Item 1 Date of Commitment [Insert date of
Transfer Supplement: Commitment
Transfer Supplement]
Item 2 Transferor: [Insert names of
Transferor Banks]
Item 3 Purchasing Banks: [Insert names of
Purchasing Banks]
Item 4 Signatures of Parties
to Commitment Transfer
Supplement:
---------------------------------,
as a Transferor Bank
By:
---------------------------------
Name:
Title:
---------------------------------,
as a Purchasing Bank
By:
---------------------------------
Name:
Title:
C-7
SCHEDULE I
(Continued)
Credit Suisse First Boston,
as the Initial Bank and Agent
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
CONSENTED TO AND ACKNOWLEDGED:
CE GENERATION, LLC
By:
---------------------------------
Name:
Title:
ACCEPTED FOR RECORDATION IN REGISTER:
CREDIT SUISSE FIRST BOSTON,
as Agent
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
C-8
SCHEDULE II TO COMMITMENT
TRANSFER SUPPLEMENT
PURCHASE PRICES
Names of
Transfer Banks
=========================================================================================================
--------------------------------------------------------------------------------
Names of [Insert name of [Insert name of [Insert name of
Purchasing Banks Transferor Bank] Transferor Bank] Transferor Bank]
---------------- ---------------- ---------------- ----------------
-------------------------- ------------------------- ------------------------- -------------------------
[Insert name of $[Insert Purchase Price] $[Insert Purchase Price] $[Insert Purchase Price]
Purchasing Bank]
-------------------------- ------------------------- ------------------------- -------------------------
-------------------------- ------------------------- ------------------------- -------------------------
=========================================================================================================
C-9
SCHEDULE III TO COMMITMENT
TRANSFER SUPPLEMENT
LIST OF LENDING OFFICES, ADDRESSES FOR NOTICES,
COMMITMENT AMOUNTS, AND PROPORTIONATE SHARES
======================================================================
Names of Transferor Banks Revised Maximum Commitment
------------------------- --------------------------
---------------------------------------------------------------------
[ ] $
---------------------------------------------------------------------
[ ] $
---------------------------------------------------------------------
Names of Transferor Banks Revised Commitment Percentage
------------------------- -----------------------------
---------------------------------------------------------------------
[ ] %
---------------------------------------------------------------------
%
---------------------------------------------------------------------
Names of Purchasing Banks New Maximum Commitment
------------------------- ----------------------
---------------------------------------------------------------------
[ ] %
---------------------------------------------------------------------
---------------------------------------------------------------------
Names of Purchasing Banks Commitment Percentage
------------------------- ---------------------
---------------------------------------------------------------------
[ ] %
======================================================================
C-10
SCHEDULE III
(Continued)
[NAME PURCHASING BANK(S)]
Address for Notices:
Attention:
Telex:
Answerback:
Telephone:
Telecopier:
Clearing Account:
-----------------
[Insert Acct. #]
Eurodollar Lending Office:
--------------------------
[Insert Address]
Domestic Lending Office:
------------------------
[Insert Address]
C-11
SCHEDULE IV TO COMMITMENT
TRANSFER SUPPLEMENT
TRANSFER EFFECTIVE NOTICE
_________________________, 199_
Transferor Banks: [ ]
Purchasing Banks: [ ]
Borrower: CE Generation, LLC
The undersigned, as Agent under the Debt Service Reserve Letter of Credit
and Reimbursement Agreement, dated as of March 2, 1999 by and among (i) CE
Generation, LLC, a Delaware limited liability company ("Borrower"), (ii) Credit
Suisse First Boston, as initial bank (the "Initial Bank"), and the other Banks
named therein (collectively, the "Banks"), and (iii) Credit Suisse First Boston,
as agent for the Banks ("Agent") (as from time to time amended, supplemented or
otherwise modified in accordance with the terms thereof, the "Debt Service
Reserve LOC Reimbursement Agreement") acknowledge receipt of [ ] ([ ]) copies of
the Commit ment Transfer Supplement as described in Annex I hereto, each fully
executed. Terms defined in such Commitment Transfer Supplement are used herein
as therein defined.
1. Pursuant to such Commitment Transfer Supplement, you are advised that
the Transfer Effective Date will be the date hereof.
2. Pursuant to such Commitment Transfer Supplement, each Transferor Bank is
required to deliver to Agent on or before the Transfer Effective Date its
Note[s].
3. Pursuant to such Commitment Transfer Supplement, Borrower is required to
deliver to Agent on or before the Transfer Effective Date the following Notes:
[Describe each new Note for Transferor Bank and Purchasing Bank as to principal
amount and payee.]
C-12
4. Pursuant to such Commitment Transfer Supplement each Purchasing Bank is
required to pay its Purchase Price, in immediately available funds, to the
appropriate Transferor Bank at or before 12:00 noon, local time of the
appropriate Transferor Bank, on the first Business Day of the month in which the
Transfer Effective Date occurs.
Very truly yours,
Credit Suisse First Boston,
as Agent
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
C-13
ANNEX I
INFORMATION FOR
COMMITMENT TRANSFER SUPPLEMENT
Re: Debt Service Reserve Letter of Credit and
Reimbursement Agreement, dated as of
March 2, 1999, with CE Generation, LLC,
as Borrower
Item 1 Date of Commitment
Transfer Supplement: __________________, 199_
Item 2 Transferor Banks: [ ]
Item 3 Purchasing Banks: [ ]
C-14
EXHIBIT D
RESERVE BOND NOTE
$____________________ New York, New
York
_________________, 1999
FOR VALUE RECEIVED, the undersigned, CE GENERATION, LLC, a Delaware limited
liability company (the "Borrower"), hereby unconditionally promises to pay to
the order of Credit Suisse First Boston (the "Bank") the principal sum of
________________________ dollars ($____________________ ) in respect of Reserve
Bonds advanced by the Bank to the Borrower on the dates and in the amounts
specified in the Debt Service Reserve LOC Reimbursement Agreement referred to
below.
The Borrower further promises to pay interest on the daily unpaid principal
amount hereof from time to time outstanding on the dates and at the rates
specified in the Debt Service Reserve LOC Reimbursement Agreement. This Note is
hereby expressly limited so that in no contingency or event, whether by reason
of acceleration of the maturity of any indebtedness evidenced hereby or
otherwise, shall the interest contracted for or charged or received by the Bank
exceed the maximum amount permissible under applicable law. If, from any
circumstance whatsoever, interest would otherwise be payable to the Bank in
excess of the maximum lawful amount, the interest payable to the Bank shall be
reduced to the maximum amount permitted under applicable law, and the amount of
interest for any subsequent period, to the extent less than that permitted by
applicable law, shall to that extent be increased by the amount of such
reduction.
Each holder hereof is irrevocably authorized to endorse on the schedule
attached hereto, or on a continuation thereof, the date each such interest
payment is due and the amount of each such interest payment determined in accor
dance with the Debt Service Reserve LOC Reimbursement Agreement. All such
notations shall constitute prima facie evidence of the accuracy of the
information so recorded and be enforceable against the Borrower with the same
force
D-1
and effect as if such amounts were each set forth in a separate note executed by
the Borrower.
All payments due hereunder shall be made without setoff, counter claim or
deduction of any nature to Credit Suisse First Boston, as Agent, at Eleven
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, in lawful money of the United States
of America and in immediately available funds, or at such other place and in
such other manner as may be specified by the Agent pursuant to the Debt Service
Reserve LOC Reimbursement Agreement.
Each holder hereof is irrevocably authorized to endorse on the schedule
attached hereto, or on a continuation thereof, the date and amount of each
Reserve Bond made to the Borrower and each payment or prepayment of principal
thereof, provided that the failure of such holder to make, or any error in
making, any such recordation or endorsement shall not affect the obligations of
the Borrower hereunder or under the Debt Service Reserve LOC and Reimbursement
Agreement. All such notations shall constitute prima facie evidence of the
accuracy of the information so recorded and be enforceable against the Borrower
with the same force and effect as if such amounts were each set forth in a
separate note executed by the Borrower.
This Note is the "Reserve Bond Note" of the Borrower to the Bank referred
to in, evidences each Reserve Bond made by the Bank to the Borrower under, is
subject to the provisions of, and entitles its holder to the benefits of, the
Debt Service Reserve Letter of Credit and Reimbursement Agreement dated as of
March 2, 1999 (the "Debt Service Reserve LOC Reimbursement Agreement") among the
Borrower, the Bank and the other banks parties thereto, and Credit Suisse First
Boston, as agent for the Bank and such other banks, as the same may be amended,
supplemented or otherwise modified from time to time and to which reference is
hereby made for a more complete statement of the terms and conditions under
which each Reserve Bond evidenced hereby is to be made and repaid. Capitalized
terms in this Note that are not specifically defined herein shall have the
meanings ascribed to them in the Debt Service Reserve LOC Reimbursement
Agreement.
The Debt Service Reserve LOC Reimbursement Agreement provides for, among
other things, the acceleration of the maturity of the unpaid principal amount
hereof upon the occurrence of certain stated events and for voluntary
prepayments in certain circumstances and upon certain terms and conditions. The
obligations of the Borrower under the Debt Service Reserve LOC Reimbursement
Agreement and this Note are secured by, and the holder hereof is entitled to the
benefit of, the Security Documents.
D-2
In addition to any and all costs, fees and expenses for which the Borrower
is liable under the Debt Service Reserve LOC Reimbursement Agreement, the
Borrower promises to pay all reasonable costs and expenses, including reason
able attorneys' fees and disbursements, incurred in the collection and
enforcement hereof or any appeal of any judgment rendered hereon.
The Borrower hereby expressly waives diligence, presentment, protest,
demand, dishonor, nonpayment and notice of every kind to the fullest extent
permitted by applicable law. No failure or delay by any holder of this Note to
exercise any right or remedy under this Note or any other document or instrument
entered into pursuant to the Debt Service Reserve LOC Reimbursement Agreement
shall operate or be construed as a waiver or modification hereof or thereof.
This Note shall be binding upon the successors and assigns of the Borrower
and shall inure to the Bank and its successors, endorsees and assigns. If any
term or provision of this Note shall be held invalid, illegal or unenforceable,
the validity of all other terms and provisions hereof shall in no way be
affected thereby.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE-OF-LAW PRINCIPLES
THEREOF.
Borrower hereby expressly and irrevocably agrees and consents that any
suit, action or proceeding arising out of or related to this Note may be
instituted in any state or federal court (at Bank's option) sitting in the
County of New York, State of New York, and by the execution and delivery of this
Note, Borrower expressly waives any objection which it may have now or hereafter
to the venue or to the jurisdiction of any such suit, action or proceeding, and
irrevocably submits generally and unconditionally to the jurisdiction of any
such court in any such suit, action or proceeding.
All excise tax due on this Note has been paid by the Borrower.
CE GENERATION, LLC
By:_________________________________
Name:____________________________
Title:_____________________________
D-3
SCHEDULE
Total
Amount Principal
Principal and Date Date Interest Amount
Amount of Principal Unpaid Payment Amount of Reserve
Date of Reserve Paid or Principal is of Interest Bond Notation
Made Bond Prepaid Balance Due Due Outstanding Made By
D-4
