EXHIBIT 10(cc)
CONFORMED COPY
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$2,500,000,000 SENIOR A CREDIT AGREEMENT
Dated as of July 13, 2001
-----------------------------
Among
HOUSTON INDUSTRIES FINANCECO LP,
as Borrower,
RELIANT ENERGY, INCORPORATED,
THE LENDERS PARTIES HERETO,
and
COMMERZBANK AG,
as Syndication Agent,
MIZUHO GROUP,
as Documentation Agent,
THE CHASE MANHATTAN BANK,
as Administrative Agent
-----------------------------
X.X. XXXXXX SECURITIES INC.,
as Lead Arranger and Sole Bookrunner
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS ................................ 1
SECTION 1.1. Certain Defined Terms ............................... 1
SECTION 1.2. Computation of Time Periods ......................... 22
SECTION 1.3. Accounting Terms .................................... 22
ARTICLE II AMOUNTS AND TERMS OF THE COMMITTED LOANS AND
LETTERS OF CREDIT ....................................... 22
SECTION 2.1. The Committed Loans ................................. 22
SECTION 2.2. Making the Loans .................................... 23
SECTION 2.3. Minimum Tranches .................................... 24
SECTION 2.4. Letters of Credit ................................... 24
ARTICLE III AMOUNTS AND TERMS OF THE CAF LOANS ............................ 28
SECTION 3.1. The CAF Loans ....................................... 28
SECTION 3.2. Competitive Bid Procedure ........................... 28
ARTICLE IV PROVISIONS RELATING TO ALL LOANS ............................... 31
SECTION 4.1. Evidence of Loans ................................... 31
SECTION 4.2. Fees ................................................ 32
SECTION 4.3. Optional Termination or Reduction of the Commitments 33
SECTION 4.4. Interest ............................................ 33
SECTION 4.5. Reserve Requirements ................................ 34
SECTION 4.6. Interest Rate Determination and Protection .......... 35
SECTION 4.7. Voluntary Interest Conversion or Continuation of
Committed Loans ..................................... 36
SECTION 4.8. Funding Losses Relating to LIBOR Rate Loans and
Fixed Rate Loans .................................... 37
SECTION 4.9. Change in Legality .................................. 37
ARTICLE V INCREASED COSTS, TAXES, PAYMENTS AND PREPAYMENTS ................ 38
SECTION 5.1. Increased Costs; Capital Adequacy ................... 38
SECTION 5.2. Payments and Computations ........................... 39
SECTION 5.3. Taxes ............................................... 40
SECTION 5.4. Sharing of Payments, Etc ............................ 42
SECTION 5.5. Voluntary Prepayments ............................... 42
SECTION 5.6. Mitigation of Losses and Costs; Replacement of Bank . 43
SECTION 5.7. Determination and Notice of Additional Costs and
Other Amounts ....................................... 44
ARTICLE VI CONDITIONS OF LENDING .......................................... 44
SECTION 6.1. Conditions Precedent to Effectiveness and Initial
Loans ............................................... 44
SECTION 6.2. Conditions Precedent to Certain Borrowings .......... 46
ARTICLE VII REPRESENTATIONS AND WARRANTIES ................................ 46
SECTION 7.1. Corporate, Partnership or Other Status .............. 46
SECTION 7.2. Organizational Status of Subsidiaries ............... 47
SECTION 7.3. Corporate, Partnership or Other Powers .............. 47
SECTION 7.4. Authorization, No Conflict etc ...................... 47
SECTION 7.5. Governmental Approvals and Consents ................. 48
SECTION 7.6. Obligations Binding ................................. 48
SECTION 7.7. Use of Proceeds; Margin Stock ....................... 48
SECTION 7.8. Title to Properties ................................. 48
SECTION 7.9. Investment Company Act; PUHC Act of 1935 ............ 49
SECTION 7.10. No Material Adverse Change ......................... 49
SECTION 7.11. Litigation ......................................... 49
SECTION 7.12. ERISA .............................................. 49
SECTION 7.13. Financial Statements ............................... 50
SECTION 7.14. Accuracy of Information ............................ 50
SECTION 7.15. No Violation ....................................... 50
SECTION 7.16. Subsidiaries ....................................... 50
SECTION 7.17. Solvency ........................................... 50
ARTICLE VIII AFFIRMATIVE AND NEGATIVE COVENANTS ........................... 51
SECTION 8.1. Affirmative Covenants of the Borrower ............... 51
SECTION 8.2. Affirmative Covenants of Reliant Energy ............. 54
SECTION 8.3. Negative Covenants of the Borrower .................. 57
SECTION 8.4. Negative Covenants of Reliant Energy ................ 61
SECTION 8.5. Consent to Restructuring ............................ 64
ARTICLE IX EVENTS OF DEFAULT .............................................. 65
SECTION 9.1. Events of Default ................................... 65
SECTION 9.2. Cancellation/Acceleration ........................... 68
ARTICLE X THE AGENT ....................................................... 69
SECTION 10.1. Appointment ........................................ 69
SECTION 10.2. Delegation of Duties ............................... 70
SECTION 10.3. Exculpatory Provisions ............................. 70
SECTION 10.4. Reliance by Agent .................................. 70
SECTION 10.5. Notice of Default .................................. 70
SECTION 10.6. Non-Reliance on Agent and Other Banks .............. 71
SECTION 10.7. Indemnification .................................... 71
SECTION 10.8. Agent in Its Individual Capacity ................... 72
SECTION 10.9. Successor Agent .................................... 72
ARTICLE XI MISCELLANEOUS .................................................. 73
SECTION 11.1. Amendments and Waivers ............................. 73
SECTION 11.2. Notices ............................................ 74
SECTION 11.3. No Waiver, Cumulative Remedies ..................... 75
SECTION 11.4. Survival of Representations and Warranties ......... 75
SECTION 11.5. Payment of Expenses and Taxes ...................... 75
ii
SECTION 11.6. Effectiveness; Successors and Assigns;
Participations; Assignments ........................ 76
SECTION 11.7. Set-off ............................................ 80
SECTION 11.8. Counterparts ....................................... 80
SECTION 11.9. Severability ....................................... 80
SECTION 11.10. Integration ....................................... 81
SECTION 11.11. GOVERNING LAW ..................................... 81
SECTION 11.12. Submission To Jurisdiction, Waivers ............... 81
SECTION 11.13. Acknowledgements .................................. 82
SECTION 11.14. Limitation on Agreements .......................... 82
SECTION 11.15. Non-recourse to Limited Partner, General Partner .. 83
SECTION 11.16. Notice Under Section 26.02 of the Texas Business
and Commerce Code ................................. 83
SECTION 11.17. Removal of Bank ................................... 83
iii
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B-1 Form of Competitive Bid Request
Exhibit B-2 Form of Competitive Bid
Exhibit B-3 Form of Competitive Bid Confirmation
Exhibit C Form of Note
Exhibit D Form of Reliant Energy Pledge and Collateral Agency Agreement
Exhibit E Terms of Reliant Energy Preference Stock
Exhibit F Form of Pledge and Collateral Agency Agreement
Exhibit G Form of Support Agreement
Exhibit H Form of Notice of Interest Conversion/Continuation
Exhibit I-A Form of Opinion of Xxxxx Xxxxx, LLP
Exhibit I-B Form of Opinion of Xxxxx Xxxxx, LLP
Exhibit J Form of Committed Loan Assignment and Acceptance
Exhibit K Form of Intercompany Note
Exhibit L Form of Regco $2.5 Billion Credit Agreement
SCHEDULES
Schedule 1.1 Commitments and Addresses
Schedule 1.1A Excluded Subsidiaries
Schedule 2 Steps of Restructuring
Schedule 6.1(c) Ownership of Capital Stock of Subsidiaries
Schedule 7.16 Subsidiaries
Schedule 8.4(f) Restrictive Agreements
CREDIT AGREEMENT
Dated as of July 13, 2001 (the "Credit Agreement")
Each of:
(a) HOUSTON INDUSTRIES FINANCECO LP, a Delaware limited partnership (the
"Borrower");
(b) RELIANT ENERGY, INCORPORATED, a Texas corporation;
(c) the banks listed on the signature pages hereof and any bank or other
financial institution that may hereafter become a party hereto in
accordance with the provisions hereof (collectively, the "Banks", and
each individually a "Bank");
(d) COMMERZBANK AG, as syndication agent (in such capacity, the
"Syndication Agent");
(e) MIZUHO GROUP, as documentation agent (in such capacity, the
"Documentation Agent");
(f) X.X. XXXXXX SECURITIES INC., as arranger and sole bookrunner (in such
capacity, the "Arranger"); and
(g) THE CHASE MANHATTAN BANK, as Administrative Agent (in such capacity,
the "Agent") for the Banks hereunder;
hereby agrees as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Certain Defined Terms. As used in this Credit
Agreement (as amended, supplemented or otherwise modified from time to time,
this "Agreement"), the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"ABR" means, for any day, an alternate base rate calculated as a
fluctuating rate per annum (rounded upwards to the nearest 1/64 of 1% if not
already an integral multiple of 1/64 of 1%) as shall be in effect from time to
time, equal to the greater of (a) the Prime Rate in effect on such day and (b)
the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. As used
in this definition, the term "Prime Rate" means the rate of interest per annum
publicly announced from time to time by the Agent as its prime rate in effect at
its principal office in New York City. If for any reason the Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Effective Rate for any
2
reason, including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms hereof, the ABR shall be determined
without regard to clause (b) above until the circumstances giving rise to such
inability no longer exist. Any change in the ABR due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective as of the effective
day of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"ABR Loan" means a Loan that bears interest at the ABR as provided in
Section 4.4(a).
"Affiliate" means any Person that, directly or indirectly, Controls or
is Controlled by or is under common Control with another Person.
"Agent" has the meaning specified in the introduction to this
Agreement.
"Aggregate Outstanding Extensions of Credit" means, as to any Bank at
any time, an amount equal to the sum of (a) the aggregate principal amount of
all Loans made by such Bank then outstanding and (b) such Bank's Pro Rata
Percentage of the L/C Obligations then outstanding.
"Applicable Margin" means the rate per annum set forth below opposite
the Designated Rating from time to time in effect during the period for which
payment is due:
Designated Rating Applicable Margin
----------------- -----------------
A-/A3 and higher .535%
BBB+/Baa1 .650%
BBB/Baa2 .750%
BBB-/Baa3 .950%
BB+/Ba1 or lower or Unrated 1.125%
In each row in the table set forth above, the first indicated rating corresponds
to that assigned by S&P and the second indicated rating corresponds to that
assigned by Xxxxx'x; the determination of which row of such table is applicable
at any time is set forth in the definition of "Designated Rating".
"Application" means an application, in such form as the Issuing Bank
may specify from time to time, requesting the Issuing Bank to issue a Letter of
Credit.
"Arranger" has the meaning specified in the introduction to this
Agreement.
"Available Dividend Amount" means, for any fiscal quarter, the average
per share amount of the quarterly dividends paid by Reliant Energy on its common
stock during the four consecutive fiscal quarters immediately preceding such
fiscal quarter, multiplied by the number of shares of common stock of Reliant
Energy outstanding as of the beginning of such quarter.
3
"Bank" and "Banks" have the meanings specified in the introduction to
this Agreement.
"Bank Affiliate" has the meaning specified in Section 11.6(c).
"Board" means the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"Borrowed Money" of any Person means any Indebtedness of such Person
for or in respect of money borrowed or raised by whatever means (including
acceptances, deposits, lease obligations under Capital Leases and Mandatory
Payment Preferred Stock); provided, however, that Borrowed Money shall not
include (a) any guarantees that may be incurred by endorsement of negotiable
instruments for deposit or collection in the ordinary course of business or
similar transactions, (b) any obligations or guarantees of performance of
obligations under a franchise, performance bonds, franchise bonds, obligations
to reimburse drawings under letters of credit issued in accordance with the
terms of any safe harbor lease or franchise or in lieu of performance or
franchise bonds or other obligations incurred in the ordinary course of business
that do not represent money borrowed or raised, in each case to the extent that
such reimbursement obligations are payable in full within ten Business Days
after the date upon which such obligation arises, (c) trade payables or (d)
customer advance payments and deposits arising in the ordinary course of
business.
"Borrower" has the meaning specified in the introduction to this
Agreement.
"Borrowing" means either a Committed Borrowing or a CAF Borrowing.
"Borrowing Date" means any Business Day specified by the Borrower as a
date on which the Borrower requests the relevant Banks to make Loans hereunder.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
close; provided, that when used in connection with a LIBOR Rate Loan, the term
"Business Day" shall also exclude any day on which commercial banks are not open
for dealings in Dollar deposits in the London interbank market.
"CAF Borrowing" means a borrowing consisting of CAF Loans under Section
3.1 made on the same day by the Bank or Banks whose Competitive Bid or Bids have
been accepted pursuant to Section 3.2(d).
"CAF Facility" has the meaning specified in Section 3.1(a).
"CAF LIBOR Rate Loan" means any CAF Loan that bears interest at the
LIBOR Rate.
"CAF Loan" means a Loan made to the Borrower pursuant to Section 3.1 by
a Bank in response to a Competitive Bid Request.
"CAF Loan Assignee" has the meaning specified in Section 11.6(d).
4
"CAF Loan Assignment and Acceptance" means an assignment and acceptance
executed in connection with the assignment of any CAF Loan to a CAF Loan
Assignee in the manner set forth in Section 11.6(d). Each CAF Loan Assignment
and Acceptance to be registered in the Register shall set forth (a) the full
name of such CAF Loan Assignee; (b) such CAF Loan Assignee's address for notices
and its lending office address (in each case to include telephone, telex and
facsimile transmission numbers); and (c) payment instructions for all payments
to such CAF Loan Assignee, and must contain an agreement by such CAF Loan
Assignee to comply with the provisions of Sections 11.6(d), 11.6(g) and 11.6(h)
to the same extent as any Bank.
"CAF Margin" means, as to any Competitive Bid relating to a CAF LIBOR
Rate Loan, the margin (expressed as a percentage rate per annum in the form of a
decimal to no more than four decimal places) to be added to or subtracted from
the LIBOR Rate in order to determine the interest rate acceptable to such Bank
with respect to such CAF LIBOR Rate Loan.
"CAF Rate" means, as to any Competitive Bid made by a Bank pursuant to
Section 3.2, (i) in the case of a CAF LIBOR Rate Loan, the CAF Margin added to
or subtracted from, as the case may be, the LIBOR Rate, and (ii) in the case of
a Fixed Rate Loan, the fixed rate of interest, in each case, offered by such
Bank.
"Capital Expenditure" means any expenditure in respect of the purchase,
construction or other acquisition of fixed or capital assets (excluding any
expenditure made in connection with normal replacement and maintenance programs
properly treated as an expense in the period in which made according to GAAP).
"Capital Lease" means a lease that, in accordance with GAAP, would be
recorded as a capital lease on the balance sheet of the lessee.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests in partnerships and member
interests in limited liability companies, and any and all warrants or options to
purchase any of the foregoing or securities convertible into any of the
foregoing.
"Change in Control" means, with respect to Reliant Energy, the
acquisition by any Person or "group" (within the meaning of Rule 13d-5 of the
Exchange Act) of beneficial ownership (determined in accordance with Rule 13d-3
of the Exchange Act) of Capital Stock of Reliant Energy, the result of which is
that such Person or group beneficially owns 30% or more of the aggregate voting
power of all then issued and outstanding Capital Stock of Reliant Energy;
provided, however, that a Change in Control shall be deemed not to have occurred
solely by reason of any acquisition of Capital Stock of Reliant Energy by a new
"holding" company if Capital Stock of such holding company representing at least
70% of the aggregate voting power of all issued and outstanding shares of
Capital Stock of such holding company is owned by holders who owned the
outstanding common stock of Reliant Energy immediately prior to such
acquisition. For purposes of the foregoing, the phrase "voting power" means,
with respect to an issuer, the power under ordinary circumstances to vote for
the election of members of the board of directors of such issuer.
5
"Closing Date" has the meaning specified in Section 11.6(a).
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute.
"Committed Borrowing" means a borrowing consisting of Loans under
Section 2.1(a) of the same Type, and having, in the case of Committed LIBOR Rate
Loans, the same Interest Period, made on the same day by the Banks. The term
"Committed Borrowing" as used herein shall not include any conversion or
continuation of a Loan under Section 4.7.
"Committed LIBOR Rate Loan" means any Committed Loan that bears
interest at the LIBOR Rate.
"Committed Loan" has the meaning specified in Section 2.1(a).
"Committed Loan Assignment and Acceptance" has the meaning specified in
Section 11.6(c).
"Commitment" means, with respect to each Bank, the obligation of such
Bank to make Committed Loans to, and/or to issue or participate in Letters of
Credit issued on behalf of, the Borrower in an aggregate principal amount at any
one time outstanding not to exceed the amount set forth under such Bank's name
on Schedule 1.1 attached hereto under the caption "Commitment," as such amount
may be changed from time to time pursuant to Sections 4.3, 9.2 and 11.6; and
"Commitments" shall be the collective reference to the Commitments of all of the
Banks.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"Competitive Bid" has the meaning specified in Section 3.2(b).
"Competitive Bid Confirmation" has the meaning specified in Section
3.2(d).
"Competitive Bid Request" has the meaning specified in Section 3.2(a).
"Consolidated Capitalization" means, as of any date of determination,
the sum of (a) Consolidated Shareholders Equity, (b) Consolidated Indebtedness
for Borrowed Money and, without duplication, (c) Mandatory Payment Preferred
Stock.
"Consolidated Indebtedness" means, as of any date of determination, the
sum of (i) the total Indebtedness as shown on the consolidated balance sheet of
Reliant Energy and its Consolidated Subsidiaries, determined without duplication
of any Guarantee of Indebtedness of Reliant Energy by any of its Consolidated
Subsidiaries or of any Guarantee of Indebtedness of any such Consolidated
Subsidiary by Reliant Energy or any other Consolidated Subsidiary of Reliant
Energy, plus any Mandatory Payment Preferred Stock, less (ii) such amount of
Indebtedness attributable to amounts then outstanding under receivables
facilities or
6
arrangements to the extent that such amounts would not have been shown as
Indebtedness on a balance sheet prepared in accordance with GAAP prior to
January 1, 1997, less (iii) if any Indexed Debt Securities the liabilities in
respect of which as shown on the consolidated balance sheet of Reliant Energy
and its Consolidated Subsidiaries have increased from the amount of liabilities
in respect thereof at the time of their issuance by reason of an increase in the
price of the Indexed Asset relating thereto, the excess of (a) the aggregate
amount of liabilities in respect of such Indexed Debt Securities at the time of
determination over (b) the initial amount of liabilities in respect of such
Indexed Debt Securities at the time of their issuance.
"Consolidated Shareholders' Equity" means, as of any date of
determination, the total assets of Reliant Energy and its Consolidated
Subsidiaries (less, (A) with respect to any Indexed Asset, an amount equal to
the excess of (a) the aggregate amount of liabilities in respect of related
Indexed Debt Securities at the time of determination over, (b) the initial
amount of liabilities in respect of such Indexed Debt Securities at the time of
their issuance and (B) any amount of any assets associated with liabilities in
item (ii) of the definition of Consolidated Indebtedness to the extent of the
related liabilities) less all liabilities of Reliant Energy and its Consolidated
Subsidiaries. As used in this definition, "liabilities" means all obligations
that, in accordance with GAAP consistently applied, would be classified on a
balance sheet as liabilities (including, without limitation, (a) Indebtedness;
(b) deferred liabilities; and (c) Indebtedness of Reliant Energy or any of its
Consolidated Subsidiaries that is expressly subordinated in right and priority
of payment to other liabilities of Reliant Energy or such Consolidated
Subsidiary, but in any case excluding as at such date of determination any
Junior Subordinated Debt owned by any Hybrid Preferred Securities Subsidiary),
less liabilities of the type identified in items (ii) and (iii) in the
definition of "Consolidated Indebtedness."
"Consolidated Subsidiary" means, with respect to a specified Person at
any date, any Subsidiary or any other Person, the accounts of which under GAAP
would be consolidated with those of such specified Person in its consolidated
financial statements as of such date.
"Consolidated Working Capital" means, as of any date of determination,
(i) the amount of all assets of Reliant Energy and its Consolidated Subsidiaries
that would, in accordance with GAAP, be classified on a consolidated balance
sheet of Reliant Energy as current assets of Reliant Energy at such date minus
(ii) all liabilities of Reliant Energy and its Consolidated Subsidiaries that,
in accordance with GAAP, would be classified on a consolidated balance sheet of
Reliant Energy as current liabilities at such date; provided, however, that no
current liabilities for any Junior Subordinated Debt of a Person shall be
included in the calculation of such Person's Consolidated Working Capital when
owned by any Hybrid Preferred Securities Subsidiary.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any written agreement, instrument or other
written undertaking to which such Person is a party or by which it or any of its
property is bound.
"Controlled" means, with respect to any Person, the ability of another
Person (whether directly or indirectly and whether by the ownership of voting
securities, contract or otherwise) to appoint and/or remove the majority of the
members of the board of directors or other governing body of that Person (and
"Control" shall be similarly construed).
7
"Default" means any event that, with the lapse of time or giving of
notice, or both, or any other condition, would constitute an Event of Default.
"Default Rate" means with respect to any overdue amount owed hereunder,
a rate per annum equal to (a) in the case of overdue principal with respect to
any Loan, the sum of the interest rate in effect at such time with respect to
such Loan under Section 4.4 plus 2%; provided, that in the case of overdue
principal with respect to any Committed LIBOR Rate Loan, after the end of the
Interest Period with respect to such Loan, the Default Rate shall equal the rate
set forth in clause (b) below and (b) in the case of overdue interest with
respect to any Loan, Facility Fees or other amounts payable hereunder, the sum
of the ABR in effect at such time plus 2%.
"Designated Rating" means (a) at any time that the Long Term Debt
Rating is assigned by both S&P and Xxxxx'x and such ratings are equivalent, such
rating shall be the Designated Rating or (b) if clause (a) does not apply, (i)
at any time that the Long Term Debt Rating is issued by only one of S&P or
Xxxxx'x, the rating of such debt issued by such Rating Agency shall be the
Designated Rating, and (ii) at any time that such debt is rated by more than one
Rating Agency, the lower of the two highest of such ratings; provided, that at
least one of such two ratings must be issued by either S&P or Xxxxx'x. Any
change in the calculation of the Facility Fees or the Applicable Margin with
respect to the Borrower that is caused by a change in the Designated Rating for
the Borrower will become effective on the date of the change in the Designated
Rating for the Borrower. If the rating system of any Rating Agency shall change,
or if all Rating Agencies shall cease to be in the business of rating corporate
debt obligations, Borrower and the Agent shall negotiate in good faith if
necessary to amend this definition to reflect such changed rating system or the
unavailability of ratings from such Rating Agencies and, pending the
effectiveness of any such amendment, the Designated Rating shall be determined
by reference to the rating most recently in effect prior to such change or
cessation.
"Dollars" and the symbol "$" mean the lawful currency of the United
States of America.
"Early Funding ABR Loan" has the meaning specified in Section 2.2(a).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Event of Default" has the meaning specified in Section 9.1.
"Excess Cash Flow" means, for any period and without duplication of any
item, (a) the sum of (i) consolidated net income of Reliant Energy for the
period (excluding net income of Excluded Subsidiaries), (ii) charges for
depreciation and amortization and other non-cash charges to consolidated income
of Reliant Energy (excluding the amount thereof attributable to Excluded
Subsidiaries), (iii) net cash proceeds from financings at Reliant Energy,
Resources and Consolidated Subsidiaries of Resources, (iv) the amount of cash
dividends received by Reliant Energy from Excluded Subsidiaries during such
period, (v) decreases in Consolidated Working Capital for such period excluding
any change in cash and cash equivalents included in Consolidated Working Capital
(excluding the amount thereof attributable to Excluded Subsidiaries), and (vi)
cash receipts that reduce Reliant Energy consolidated long-term assets or
increase Reliant Energy consolidated long-term liabilities (excluding the amount
thereof
8
attributable to Excluded Subsidiaries) minus (b) the sum (excluding, in each
applicable case, the amount thereof attributable to Excluded Subsidiaries) of
(i) non-cash increases to consolidated net income of Reliant Energy, (ii) net
reductions in debt of Reliant Energy and Resources and its Consolidated
Subsidiaries (to the extent not deducted in computing consolidated income of
Reliant Energy and, in the case of revolving facilities, to the extent
accompanied by permanent commitment reductions), (iii) Reliant Energy
consolidated Capital Expenditures, (iv) the amount (A) of cash dividends paid on
Reliant Energy common stock or on preferred stock (including Mandatory Payment
Preferred Stock and Hybrid Preferred Securities) or preference stock (including
the Reliant Energy Preference Stock) of Reliant Energy, Resources or any
Consolidated Subsidiary of Resources and (B) paid in cash in respect of
redemption of preferred stock (including Mandatory Payment Preferred Stock and
Hybrid Preferred Securities) or preference stock (other than the Reliant Energy
Preference Stock) of Reliant Energy, Resources or any Consolidated Subsidiary of
Resources, (v) cash payments by Reliant Energy and its Consolidated Subsidiaries
that increase long-term assets or decrease long-term liabilities, (vi) increases
in Consolidated Working Capital for such period, excluding any change in cash
and cash equivalents included in Consolidated Working Capital, (vii) other
expenditures required to be made by Reliant Energy and its subsidiaries and paid
in cash during such period that are not deducted in computing consolidated net
income of Reliant Energy, and (viii) other expenditures paid in cash during such
period that are not deducted in computing consolidated net income of Reliant
Energy and that, in the reasonable judgment of the senior management of Reliant
Energy, are necessary in order to accommodate, with respect to HL&P or
Resources, regulatory requirements and sound utility financial and management
practices.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Subsidiaries" means the collective reference to (i) Reliant
Energy International and its Subsidiaries, (ii) the Subsidiaries of Reliant
Energy listed on Schedule 1.1A hereto, (iii) the Borrower and (iv) any Hybrid
Preferred Securities Subsidiary.
"Facility Fee" has the meaning specified in Section 4.2(a).
"Federal Funds Effective Rate" means, for any day, a fluctuating rate
per annum equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day for such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.
"FinanceCo" means Houston Industries FinanceCo LP, a Delaware limited
partnership.
"FinanceCo $1.8 Billion Credit Agreement" means the $1,800,000,000
Senior B Credit Agreement, dated as of July 13, 2001 among FinanceCo, as
borrower, The Chase Manhattan Bank, as administrative agent, and the other
financial institutions parties thereto, as amended, modified or supplemented
from time to time.
"FinanceCo III" means Reliant Energy FinanceCo III LP, a Delaware
limited partnership.
9
"FinanceCo Existing Credit Facility" means, collectively, (i) the
$1,644,000,000 Credit Agreement, dated as of August 6, 1997 (as amended and as
the same may be amended, supplemented or otherwise modified from time to time),
among FinanceCo, as borrower, Reliant Energy, the lenders parties thereto, The
Chase Manhattan Bank, as administrative agent, and Chase Securities, Inc., as
arranger and (ii) the 560,000,000 Credit Agreement, dated as of September 24,
1999 (as amended and as the same may be amended, supplemented or otherwise
modified from time to time), among FinanceCo III, as borrower, Reliant Energy,
the lenders parties thereto, and Chase Manhattan International Limited, as
Administrative Agent.
"FinanceCo GP" means HI FinanceCo LLC, a Delaware limited liability
company, that is the general partner of the Borrower and all of the member
interests in which are Wholly-Owned by Reliant Energy.
"Fitch" means Fitch, Inc., and any successor rating agency.
"Fixed Rate Loan" means any CAF Loan made by a Bank pursuant to Section
3.2 based upon a fixed percentage rate per annum offered by such Bank, expressed
as a decimal (to no more than four decimal places), and accepted by the
Borrower.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States of America.
"Genco Transaction" means, collectively, the following related
transactions:
(i) all of Regco's or its wholly owned subsidiary's
interest in the partners of Texas Genco is contributed to Texas Genco,
Inc.; and
(ii) up to 20% of the common stock of Texas Genco, Inc. is
(1) issued and sold in an initial public offering of such stock or (2)
distributed by Regco to its shareholders, or as a result of some
combination thereof or pursuant to some other issuance up to 20% of the
common stock of Texas Genco, Inc. is listed for trading on a national
stock exchange or automated quotation system.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantee" means, as to any Person (the "guaranteeing Person"), any
obligation of (a) the guaranteeing Person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing Person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
principal of any Indebtedness for Borrowed Money (the "primary obligation") of
any other third Person in any manner, whether directly or indirectly, including,
without limitation, any obligation of the guaranteeing Person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds for the purchase or payment of any such primary obligation or (iii)
otherwise to assure or hold harmless the owner of any such primary obligation
against loss in respect thereof.
10
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement,
or any similar arrangement designed to provide protection against fluctuations
in market value or market rates.
"Highest Lawful Rate" means, with respect to each Bank, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received with respect to any Loan
hereunder or on other amounts, if any, due to such Bank pursuant to this
Agreement or any other Loan Document under applicable law. "Applicable law" as
used in this definition means, with respect to each Bank, that law in effect
from time to time that permits the charging and collection by such Bank of the
highest permissible lawful, nonusurious rate of interest on the transactions
herein contemplated including, without limitation, the laws of each State that
may be held to be applicable, and of the United States of America, if
applicable.
"HL&P" means Houston Lighting & Power Company, a division of Reliant
Energy.
"HL&P Mortgage" means the Mortgage and Deed of Trust dated as of
November 1, 1944 by HL&P to South Texas Commercial National Bank of Houston, as
Trustee (Texas Commerce Bank National Association, successor Trustee), as
amended and supplemented from time to time.
"Hybrid Preferred Securities" means preferred stock issued by any
Hybrid Preferred Securities Subsidiary.
"Hybrid Preferred Securities Subsidiary" means any Delaware business
trust (or similar entity) (i) all of the common equity interest of which is
owned (either directly or indirectly through one or more Wholly-Owned
Subsidiaries) at all times by Reliant Energy, (ii) that has been formed for the
purpose of issuing Hybrid Preferred Securities and (iii) substantially all of
the assets of which consist at all times solely of the Junior Subordinated Debt
and payments made from time to time on the Junior Subordinated Debt.
"Indebtedness" of any Person means the sum of (a) all items (other than
capital stock, capital surplus and retained earnings) that, in accordance with
GAAP consistently applied, would be included in determining total liabilities as
shown on the liability side of a balance sheet of such Person as at the date on
which the Indebtedness is to be determined and (b) without duplication, the
amount of all Guarantees by such Person; provided, however, that Indebtedness of
a Person shall not include (i) any Junior Subordinated Debt owned by any Hybrid
Preferred Securities Subsidiary, (ii) any Guarantee by Reliant Energy or
Resources of payments with respect to any Hybrid Preferred Securities or (iii)
any Securitization Securities.
"Indexed Asset" means, with respect to any Indexed Debt Security, (i)
any security or commodity that is deliverable upon maturity of such Indexed Debt
Security to satisfy the obligations under such Indexed Debt Security at maturity
or (ii) any security, commodity or index relating to one or more securities or
commodities used to determine or measure the obligations under such Indexed Debt
Security at maturity thereof.
"Indexed Debt Securities" means (i) the XXXX and (ii) any other
security issued by Reliant Energy or any Consolidated Subsidiary of Reliant
Energy that (a) in accordance with
11
GAAP, is shown on the consolidated balance sheet of Reliant Energy and its
Consolidated Subsidiaries as Indebtedness or a liability and (b) the obligations
at maturity of which may under certain circumstances be satisfied completely by
the delivery of, or the amount of such obligations are determined by reference
to, (1) an equity security owned by Reliant Energy or any of its Consolidated
Subsidiaries and which is issued by an issuer other than Reliant Energy or such
Consolidated Subsidiary or (2) an underlying commodity or security owned by
Reliant Energy or any of its Consolidated Subsidiaries.
"Insolvency" means, as used in Section 7.12, 8.1(a)(v), 8.2(a)(iv) and
9.1(k), with respect to any Multiemployer Plan, the condition that such Plan is
insolvent within the meaning of Section 4245 of ERISA (and "Insolvent" shall be
construed accordingly for such purposes).
"Intercompany Indebtedness" means (i) any Indebtedness constituting
Money Fund Advances or Money Fund Obligations, (ii) any Indebtedness for
Borrowed Money owed by the Borrower to Reliant Energy or to any Subsidiary of
Reliant Energy the proceeds of which are applied upon the receipt thereof to
repayment of Loans, Reimbursement Obligations under Letters of Credit or
commercial paper supported by this Agreement or any Permitted Facility and (iii)
any Indebtedness constituting an advance by Reliant Energy to the Borrower
pursuant to the Support Agreement or any other support agreement supporting the
Borrower's obligations under any Permitted Facility.
"Interest Period" means, for each Committed LIBOR Rate Loan comprising
part of the same Committed Borrowing, the period commencing on the date of such
Committed LIBOR Rate Loan or the date of the conversion of any Committed Loan
into such Committed LIBOR Rate Loan, as the case may be, and ending on the last
day of the period selected by the Borrower pursuant to Section 2.2 or 4.7, as
the case may be, and, thereafter, each subsequent period commencing on the last
day of the immediately preceding Interest Period and ending on the last day of
the period selected by the Borrower pursuant to Section 4.7. The duration of
each such Interest Period shall be one, two, three, six or, with the consent of
all the Banks, nine months, as the Borrower may select by notice pursuant to
Section 2.2(a) or 4.7 hereof; provided, however, that:
(i) any Interest Period in respect of a Loan that would
otherwise extend beyond the Termination Date shall end on the
Termination Date;
(ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day; provided that if such extension would cause the last day
of such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next preceding
Business Day; and
(iii) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month.
12
"Investment" of any Person means (a) any direct or indirect loan,
advance or extension of credit made by it to any other Person, whether by means
of purchase of debt or equity securities, loan, advance, Guarantee or otherwise;
(b) any capital contribution to any other Person; and (c) any ownership or
similar interest in any other Person.
"Issuing Bank" means The Chase Manhattan Bank, in its capacity as
issuer of any Letter of Credit, and any other Bank, in such capacity, selected
by the Borrower with the consent of the Agent and such Bank to be an Issuing
Bank.
"Junior Subordinated Debt" means subordinated debt of Reliant Energy or
any Subsidiary of Reliant Energy other than the Borrower (i) that is issued at
par to a Hybrid Preferred Securities Subsidiary in connection with the issuance
of Hybrid Preferred Securities, (ii) the payment of the principal of which and
interest on which is subordinated (with certain exceptions) to the prior payment
in full in cash or its equivalent of all senior indebtedness of the obligor
thereunder and (iii) that has an original tenor no earlier than 30 years from
the issuance thereof.
"L/C Commitment" means the amount of $200,000,000.
"L/C Fee Payment Date" means the last day of each March, June,
September and December.
"L/C Obligations" means, at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit that
have not then been reimbursed pursuant to Section 2.4.
"L/C Participants" means the collective reference to all the Banks
other than the Issuing Bank in their respective capacities as participants in
L/C Obligations.
"Letters of Credit" has the meaning assigned to such term in Section
2.4(a).
"LIBOR Rate" means (a) with respect to any Committed LIBOR Rate Loan,
for each day during each Interest Period pertaining thereto, the rate per annum
equal to the average (rounded upward to the nearest 1/64th of 1%) of the
respective rates notified to the Agent by each Reference Bank as the rate at
which such Reference Bank is offered Dollar deposits at or about 10:00 A.M., New
York City time, two Business Days prior to the beginning of such Interest Period
in the interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of its LIBOR Rate Loans are then being conducted
for delivery on the first day of such Interest Period for the number of days
therein and in an amount comparable to the principal amount of its Committed
LIBOR Rate Loan to be outstanding during such Interest Period and (b) with
respect to any CAF LIBOR Rate Loan of a specified maturity requested pursuant to
a Competitive Bid Request, the rate per annum equal to the average (rounded
upward to the nearest 1/64 of 1%) of the respective rates notified to the Agent
by each Reference Bank as the rate at which such Reference Bank is offered
Dollar deposits at or about 10:00 A.M., New York City time, two Business Days
prior to the date of borrowing of such CAF LIBOR Rate Loan in the interbank
eurodollar market where the eurodollar and foreign currency and exchange
operations in respect of its LIBOR Rate Loans are then being conducted for
13
delivery on such Borrowing Date, in an amount comparable to the principal amount
of such CAF LIBOR Rate Loan and with a maturity comparable to the maturity
applicable to such CAF LIBOR Rate Loan.
"LIBOR Rate Loan" means a Loan that bears interest at the LIBOR Rate as
provided in Section 4.4(b).
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, charge, security interest, encumbrance or lien
of any kind whatsoever (including any Capital Lease).
"Loans" means the loans made by the Banks to the Borrower pursuant to
this Agreement.
"Loan Documents" means this Agreement, any Application, the Support
Agreement, the Security Documents, any Notes and any document or instrument
executed and delivered by any Loan Party in connection with the foregoing.
"Loan Party" means the Borrower, each of its Subsidiaries, FinanceCo
GP, Reliant Energy and each of its Subsidiaries whose Capital Stock is pledged
pursuant to any of the Security Documents and, thereafter, such parties and any
other Person (other than the Agent and the Banks) from time to time party to any
Loan Document.
"Long Term Debt Rating" means the rating assigned by a Rating Agency to
the senior long-term debt of Reliant Energy FinanceCo II LP (it being understood
that a change in outlook status (e.g., watch status, negative outlook status) is
not a change in rating as contemplated hereby).
"Majority Banks" means, at any time, Banks having at least 51% of the
aggregate Commitments or, if the Commitments have been terminated, 51% of the
aggregate Commitments in effect immediately prior to such termination.
"Mandatory Payment Preferred Stock" means any preference or preferred
stock of Reliant Energy or of any Consolidated Subsidiary (in each case other
than any issued to Reliant Energy or its subsidiaries and other than Hybrid
Preferred Securities or Junior Subordinated Debt) that is subject to mandatory
redemption, sinking fund or retirement provisions (regardless of whether any
portion thereof is due and payable within one year).
"Margin Stock" has the meaning assigned to such term (or, in the case
of Regulation T, the term "margin security") in Regulation T, U or X, as the
case may be.
"Material Adverse Effect" means any material adverse effect on the
ability of the Borrower or Reliant Energy, as the case may be, to perform on a
timely basis its obligations under this Agreement or any other Loan Document to
which it is a party.
"Money Fund" means the Person, accounts or series of accounts in or
through which the cash management practices and operations of Reliant Energy and
its Affiliates are consolidated from time to time for purposes of conducting
certain investing and/or borrowing activities for Reliant Energy and various of
such Subsidiaries, consisting primarily of a combination of (i)
14
intercompany advances and related intercompany obligations to repay such
advances, (ii) short-term investments and (iii) borrowings from third parties;
initially such Money Fund will be operated by FinanceCo GP and funded with
borrowings under this Agreement or commercial paper supported by this Agreement.
"Money Fund Advances" means, for any Person, loans or advances to, or
investments in, the Money Fund by such Person.
"Money Fund Obligations" means, for any Person, the obligations of such
person with respect to loans or advances to, or investments in, such Person by
the Money Fund (other than repayments by the Money Fund of Money Fund Advances
by such Person).
"Moody's" means Xxxxx'x Investors Service, Inc., and any successor
rating agency.
"Multiemployer Plan" means a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Note" has the meaning specified in Section 11.6(i).
"Notice of Borrowing" has the meaning specified in Section 2.2(a).
"Notice of Interest Conversion/Continuation" has the meaning specified
in Section 4.7.
"Other Taxes" has the meaning specified in Section 5.3(b).
"Participant" has the meaning specified in Section 11.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor.
"Permitted Facility" means any credit facility existing or entered into
by the Borrower in compliance with Section 8.3(b), which provides for ranking,
collateral and credit support on substantially identical terms as that
contemplated by this Agreement, as amended from time to time, including, without
limitation, the pledge of preference stock issued in respect thereof and the
provision of support agreements substantially in the form of the Reliant Energy
Preference Stock and the Support Agreement, respectively. "Permitted Facility"
shall be deemed to include, without limitation, the FinanceCo $1.8 Billion
Credit Agreement, upon the effectiveness thereof.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270
days from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from Moody's,
which at the date hereof are A-1 and P-1, respectively;
15
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any state
thereof, or any Bank, in each case which has a combined capital and surplus and
undivided profits of not less than $250,000,000; and
(d) fully collateralized repurchase agreements with a
term of not more than 30 days for securities described in clause (a) or (b)
above and entered into with a financial institution that either satisfies the
criteria described in clause (c) above or is an investment or merchant banking
institution with a rating applicable to it or its direct or indirect corporate
parent equivalent to the highest rating obtainable from S&P or from Moody's.
"Permitted Liens" means with respect to any Person:
(a) Liens for current taxes, assessments or other
governmental charges that are not delinquent or remain payable without any
penalty, or the validity or amount of which is contested in good faith by
appropriate proceedings; provided, however, that adequate reserves with respect
thereto are maintained on the books of such Person in accordance with GAAP; and
provided, further, that any right to seizure, levy, attachment, sequestration,
foreclosure or garnishment with respect to Property of such Person or any
Subsidiary of such Person by reason of such Lien has not matured, or has been,
and continues to be, effectively enjoined or stayed;
(b) landlord Liens for rent not yet due and payable and
Liens for materialmen, mechanics, warehousemen, carriers, employees, workmen,
repairmen and other similar nonconsensual Liens imposed by operation of law, for
current wages or accounts payable or other sums not yet delinquent, in each case
arising in the ordinary course of business; provided, however, that any right to
seizure, levy, attachment, sequestration, foreclosure or garnishment with
respect to Property of such Person or any Subsidiary of such Person by reason of
such Lien has not matured, or has been, and continues to be, effectively
enjoined or stayed;
(c) Liens (other than any Lien imposed pursuant to
Section 401(a)(29) or 412(n) of the Code, ERISA or any environmental law, order,
rule or regulation) incurred or deposits made, in each case, in the ordinary
course of business, (i) in connection with workers' compensation, unemployment
insurance and other types of social security or (ii) to secure (or to obtain
letters of credit that secure) the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, performance or payment
bonds, purchase, construction or sales contracts and other similar obligations,
in each case not incurred or made in connection with the borrowing of money, the
obtaining of advances or credit or the payment of the deferred purchase price of
property;
(d) Liens arising out of or in connection with any
litigation or other legal proceeding that is being contested in good faith by
appropriate proceedings; provided, however, that adequate reserves with respect
thereto are maintained on the books of such Person in accordance with GAAP; and
provided, further, that any right to seizure, levy, attachment, sequestration,
foreclosure or garnishment with respect to Property of such Person or any
16
Subsidiary of such Person by reason of such Lien has not matured, or has been,
and continues to be, effectively enjoined or stayed; and
(e) precautionary filings under the applicable Uniform
Commercial Code made by a lessor with respect to personal property leased to
such Person or any Subsidiary of such Person.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, government (or any political subdivision or agency thereof) or any
other entity of whatever nature.
"Plan" means, at a particular time and with respect to the Borrower,
any employee benefit plan that is covered by ERISA and in respect of which the
Borrower or a Commonly Controlled Entity is (or, if such plan were terminated at
such time, would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pledge and Collateral Agency Agreement" means the Pledge and
Collateral Agency Agreement to be executed and delivered by Borrower and the
Collateral Agent thereunder, substantially in the form of Exhibit F.
"Project Finance Entity" means any entity established or used primarily
to acquire and/or hold assets (the "Project Finance Assets") so long as Reliant
Energy or a Subsidiary of Reliant Energy (i) owns at least a portion of the
outstanding shares of Capital Stock or other ownership interests having ordinary
voting power to elect directors or other ownership interests having ordinary
voting power to elect directors or other managers of such entity and (ii) has or
will have a role in managing such Project Finance Assets.
"Projected Available Cash" means, for any quarter, the cash resources
projected to be available to the Borrower for such quarter to meet its monetary
obligations during such quarter, which available cash may include projected
Excess Cash Flow of Reliant Energy (after payment of its obligations other than
to the Borrower during such quarter and after payment of dividends on Reliant
Energy common stock, computed as the Available Dividend Amount then in effect)
and availability under this Agreement and any Permitted Facility and
availability of proceeds from commercial paper issued by the Borrower.
"Projected Borrower Debt Service" means, for any quarter, the product
of (i) projected interest service obligations of the Borrower for such quarter
multiplied by (ii) 1.1; provided that for the fiscal quarter ending September
30, 2001, Projected Borrower Debt Service shall be deemed to be the amount
thereof set forth in the certificate delivered pursuant to Section 6.1(f).
"Property" means any interest or right in any kind of property or
asset, whether real, personal or mixed, owned or leased, tangible or intangible
and whether now held or hereafter acquired.
"Pro Rata Percentage" means, with respect to any Bank, a fraction
(expressed as a percentage) the numerator of which is the amount of such Bank's
Commitment and the denominator of which is the aggregate amount of the
Commitments of all of the Banks.
17
"PUHCA" means the Public Utility Holding Company Act of 1935, as
amended.
"Purchasing Banks" has the meaning specified in Section 11.6(c).
"Rating Agencies" means S&P, Xxxxx'x and Fitch.
"Reference Banks" means The Chase Manhattan Bank, Bank of America, N.A.
and Citibank, N.A., together with any successors thereto.
"Regco" means the newly created utility holding company owning, through
its Subsidiaries, certain of the currently regulated utility businesses
currently owned by Reliant Energy, together with its successors and assigns
permitted by the definition of Restructuring.
"Regco $2.5 Billion Credit Agreement" means the $2,500,000,000
Revolving Credit and Competitive Advance Facilities Agreement as such agreement
becomes effective pursuant to Section 2.1(c), as amended, supplemented or
otherwise modified from time to time.
"Register" has the meaning specified in Section 11.6(e) hereof.
"Regulation T," "Regulation U" and "Regulation X" means Regulation T, U
and X, respectively, of the Board or any other regulation hereafter promulgated
by the Board to replace the prior Regulation T, U or X, as the case may be, and
having substantially the same function.
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Bank pursuant to Section 2.4(e) for amounts drawn under
Letters of Credit.
"Reliant Energy" means Reliant Energy, Incorporated, a Texas
corporation formerly known as "Houston Industries Incorporated."
"Reliant Energy FinanceCo II LP" means Reliant Energy FinanceCo II LP,
a Delaware limited partnership.
"Reliant Energy International" means Reliant Energy International,
Inc., a Delaware corporation formerly known as "Houston Industries Energy, Inc."
"Reliant Energy Investment" has the meaning specified in Section
8.4(g).
"Reliant Energy Pledge and Collateral Agency Agreement" means the
Amended and Restated Reliant Energy Pledge and Collateral Agency Agreement,
dated as of July 13, 2001, and substantially in the form of Exhibit D (as
amended, supplemented or otherwise modified from time to time.
"Reliant Energy Preference Stock" means, for purposes of this
Agreement, the preference stock of Reliant Energy to be issued by Reliant Energy
to the Borrower on the Closing Date and having the terms set forth in Exhibit E.
"Reliant Energy Services" means Reliant Energy Services, Inc., a
Delaware corporation.
18
"Reorganization" means, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of Section 4241
of ERISA.
"Replaced Bank" has the meaning specified in Section 5.6(b) hereof.
"Replacement Bank" has the meaning specified in Section 5.6(b) hereof.
"Replacement Date" means the date on which Regco assumes the
outstanding obligations under this Agreement pursuant to the Regco $2.5 Billion
Credit Agreement as set forth in Section 2.1(c).
"Reportable Event" means any of the events set forth in Section 4043(b)
of ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg.
Section 4043.
"Requirement of Law" means, as to any Person, any law, statute,
ordinance, decree, requirement, order, judgment, rule or regulation of any
Governmental Authority.
"Resources" means Reliant Energy Resources Corp., a Delaware
corporation formerly known as "NorAm Energy Corp."
"Responsible Officer" means, with respect to any Person, its chief
financial officer, chief accounting officer, assistant treasurer, treasurer or
comptroller of such Person or any other officer of such Person whose primary
duties are similar to the duties of any of the previously listed officers of
such Person; with respect to the Borrower, such Responsible Officer may be an
officer in a similar capacity with FinanceCo. GP having one of the foregoing
titles or duties in respect of the Borrower.
"Restricted Payment" means, with respect to any Person, any dividend or
other distribution (whether in cash, securities or other property) with respect
to any shares of any class of Capital Stock of such Person or its Subsidiaries,
or any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any such shares of such
Capital Stock or of any option, warrant or other right to acquire any such
shares of Capital Stock.
"Restructuring" has the meaning set forth in Schedule 2 attached
hereto.
"S&P" means Standard & Poor's Ratings Group, and any successor rating
agency.
"SEC" means the Securities and Exchange Commission and any successor
thereto.
"Secured Indebtedness" means, with respect to any Person, all
Indebtedness secured (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured) by any Lien on any
Property (including, without limitation, accounts and contract rights) owned by
such Person or any of its Subsidiaries, even though such Person has not assumed
or become liable for the payment of such Indebtedness.
19
"Securitization Securities" means transition bonds to be issued
pursuant to the Texas Electric Choice Plan if (and only if ) no recourse may be
had to Reliant Energy or any of its Subsidiaries (or to their respective assets)
for the payment of such obligations, other than the issuer of the bonds and its
assets, provided that, payment of such transition charges by any retail electric
provider ("REP") in accordance with such legislation, whether or not such REP
has collected such charges from the retail electric customers, shall not be
deemed "recourse" hereunder, including any REP that is a division or an
Affiliate of Reliant Energy or any Affiliate of Reliant Energy.
"Security Documents" means the Pledge and Guarantee Agreement and the
Reliant Energy Pledge and Collateral Agency Agreement.
"Securitization Subsidiary" means the special purpose subsidiary
created to issue Securitization Securities.
"Significant Subsidiary" means (i) for the purposes of determining what
constitutes an "Event of Default" under Sections 9.1(g), (h), (i), (j) or (k), a
Subsidiary of Reliant Energy (other than a Project Finance Entity) whose total
assets, as determined in accordance with GAAP, represent at least 10% of the
total assets of Reliant Energy, on a consolidated basis, as determined in
accordance with GAAP and (ii) for all other purposes the "Significant
Subsidiaries" shall be those Subsidiaries whose total assets, as determined in
accordance with GAAP, represent at least 10% of the total assets of Reliant
Energy, on a consolidated basis, as determined in accordance with GAAP for
Reliant Energy's most recently completed fiscal year and identified in the
certificate most recently delivered pursuant to Section 8.2(a)(iv)(C); provided,
however, that (i) notwithstanding the foregoing, Borrower shall be deemed to be
a Significant Subsidiary of Reliant Energy and (iii) none of any Securitization
Subsidiary, Unregco or Unregco's Subsidiaries shall be deemed to be a
Significant Subsidiary or subject to the restrictions, covenants or events of
default under this Agreement.
"Single Employer Plan" means any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.
"Solvent" means, as used in Section 7.17, with respect to any Person on
a particular date, the condition that on such date, (a) the fair value of the
property of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person, (b) the
present fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (d) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
an unreasonably small amount of capital. The term "Solvency" shall be construed
accordingly for such purpose.
"Spin-off" shall have the meaning set forth in Schedule 2 attached
hereto
"Subsidiary" means, as to any Person, a corporation, partnership,
limited liability company or other entity of which more than 50% of the
outstanding shares of Capital Stock or
20
other ownership interests having ordinary voting power (other than Capital Stock
or such other ownership interests having such power only by reason of the
happening of a contingency) to elect directors or other managers of such
corporation, partnership or other entity are at the time owned, directly or
indirectly, through one or more Subsidiaries of such Person, by such Person;
provided, however, that no Securitization Subsidiary shall be deemed to be a
Subsidiary for purposes of this Agreement.
"Supermajority Banks" means, at any time, Banks having at least 65% of
the aggregate Commitments or, if the Commitments have been terminated, 65% of
the aggregate Commitments in effect immediately prior to such termination.
"Support Agreement" means the Support Agreement to be executed and
delivered by Reliant Energy, substantially in the form of Exhibit G, as amended,
supplemented or otherwise modified from time to time.
"Taxes" has the meaning specified in Section 5.3(a).
"Termination Date" means initially July 12, 2002, or any earlier date
on which (a) the Commitments have been terminated in accordance with this
Agreement or (b) all unpaid principal amounts of Loans hereunder have been
declared due and payable in accordance with this Agreement.
"Texas Genco, Inc." shall have the meaning set forth in Schedule 2
attached hereto.
"Tranche" means the collective reference to Committed LIBOR Rate Loans,
the Interest Periods with respect to all of which begin on the same date and end
on the same later date (whether or not such Loans shall originally have been
made on the same day).
"Transferee" has the meaning specified in Section 11.6(g).
"Transfer Effective Date" has the meaning specified in Section 11.6(c).
"Triggering Event" has the meaning specified in Section 5.7(b).
"TWX Stock" means shares of common stock of AOL Time Warner Inc.
"Type" refers to the determination of whether a Loan is an ABR Loan or
a Committed LIBOR Rate Loan (or a Committed Borrowing comprised of such Loans).
"Uniform Customs" means the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"Unregco" means Reliant Resources, Inc., a Delaware corporation and
Subsidiary of Reliant Energy which is the parent company of a significant
portion of Reliant Energy's unregulated businesses.
"Unregco IPO Transaction" means collectively, the related transactions
whereby:
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(i) all of the capital stock of Reliant Energy Retail,
Inc. (or alternatively, all of the assets, including contracts, of
Reliant Energy Retail, Inc. related to the retail sale of electricity
were conveyed by Reliant Energy Retail, Inc. to a Wholly-Owned
Subsidiary of Unregco) and certain other Subsidiaries of Resources was
contributed by Resources to Reliant Energy Services;
(ii) Unregco Merger Sub was merged into Reliant Energy
Services with Reliant Energy Services as the surviving corporation of
the merger, and the surviving corporation of the merger became a
Wholly-Owned Subsidiary of Unregco;
(iii) all of the assets of Reliant Energy's regulated and
unregulated retail electric operations, including retail customer care
operations, were contributed by Reliant Energy to Unregco or a
Wholly-Owned Subsidiary of Unregco;
(iv) all of the capital stock of Reliant Energy's
non-Resources unregulated businesses, including (A) Reliant Energy
Power Generation, Inc., a Delaware corporation, (B) Reliant Energy Net
Ventures, Inc., a Delaware corporation, (C) Reliant Energy
Communications, Inc., a Delaware corporation and (D) certain other
Subsidiaries of Reliant Energy, was contributed by Reliant Energy to
Unregco; and
(v) up to 20% of the common stock of Unregco was issued
and sold in an initial public offering of such stock,
and any changes to such steps of the Unregco IPO Transaction as
described in the Texas Public Utility Commission's Final Order in
Docket 21956 (any changes to such steps of the Unregco IPO Transaction
to the extent reflected in such transaction as actually consummated).
"Unregco Merger Sub" means a Subsidiary of Unregco which merged with
and into Reliant Energy Services.
"Wholly-Owned" means, with respect to any Subsidiary of any Person, all
the outstanding Capital Stock (other than directors' qualifying shares required
by law) or other ownership interest of such Subsidiary are at the time owned by
such Person or by one or more Wholly-Owned Subsidiaries of such Person, or both.
"XXXX" means the 2.0% Zero-Premium Exchangeable Subordinated Notes due
2029 issued by Reliant Energy in an initial aggregate face amount of
$999,999,943.25 and the obligations at maturity of which may be determined by
reference of shares of TWX Stock.
SECTION 1.2. Computation of Time Periods. In this Agreement,
in the computation of periods of time from a specified date to a later specified
date, unless otherwise specified herein, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding."
22
SECTION 1.3. Accounting Terms. Unless otherwise specified in
this Agreement, all accounting terms used herein shall be construed in
accordance with GAAP as in effect from time to time.
ARTICLE II
AMOUNTS AND TERMS OF THE
COMMITTED LOANS AND LETTERS OF CREDIT
SECTION 2.1. The Committed Loans. (a) Each Bank severally
agrees, on the terms and subject to the conditions hereinafter set forth, to
make revolving credit Loans (the "Committed Loans") to the Borrower from time to
time on any Business Day during the period from the Closing Date until the
earlier of (i) the Termination Date or (ii) the Replacement Date, in an
aggregate principal amount outstanding, which, when added to such Bank's Pro
Rata Percentage of the then outstanding L/C Obligations, does not exceed at any
time such Bank's Commitment; provided that no Committed Loan shall be made as a
Committed LIBOR Rate Loan after the day that is one month prior to the
Termination Date; and provided, further, that in no event shall the aggregate
amount of Committed Loans, CAF Loans and L/C Obligations outstanding at any time
exceed the aggregate amount of the Commitments at such time.
(b) Each Committed Borrowing by the Borrower shall be in
an aggregate principal amount not less than $10,000,000 (in the case of
Committed LIBOR Rate Loans) or $5,000,000 (in the case of ABR Loans), or an
integral multiple of $1,000,000 in excess thereof and shall consist of Loans of
the same Type made on the same day by the Banks ratably according to their
respective Pro Rata Percentages. Within the limits of the applicable
Commitments, the Borrower may borrow, prepay pursuant to Section 5.5 and
reborrow under this Section 2.1. The principal amount outstanding on the
Committed Loans shall (i) upon the Replacement Date, continue as a loan under
the Regco $2.5 Billion Credit Agreement or (ii) upon the Termination Date,
mature and, together with accrued and unpaid interest thereon, be due and
payable on such date.
(c) So long as no Event of Default exists, upon the
satisfaction or waiver of the conditions set forth in Section 6.01 of the Regco
$2.5 Billion Credit Agreement, automatically and without any further consent or
action required by any Bank, (i) Regco shall assume all obligations in respect
of the Loans hereunder and all other monetary obligations in respect hereof,
(ii) each Loan hereunder shall be continued as a Loan thereunder, (iii) each
Letter of Credit hereunder shall be continued as a Letter of Credit thereunder,
(iv) each Bank hereunder shall be a Bank thereunder and (v) this Agreement shall
be superseded and replaced by, and deemed amended and restated in the form of,
the Regco $2.5 Billion Credit Agreement attached hereto as Exhibit L (with such
changes thereto deemed incorporated as necessary to reflect the identity of
Regco and to make such other technical changes necessary to effectuate the
intent of this clause (c)), and the commitments hereunder shall terminate.
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SECTION 2.2. Making the Loans. (a) Each Committed Borrowing
under Section 2.1 shall be made on the Borrower's oral or written notice given
by the Borrower to the Agent:
(i) not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the date of the proposed Committed
Borrowing in the case of a Committed LIBOR Rate Loan;
(ii) not later than 11:00 A.M. (New York City time) on the
Business Day immediately preceding the date of the proposed Committed
Borrowing in the case of an Early Funding ABR Loan; and
(iii) not later than 11:00 A.M. (New York City time) on the
same Business Day of the proposed Committed Borrowing in the case of
any other ABR Loan.
With respect to any oral notice of borrowing given by the Borrower, the Borrower
shall promptly thereafter confirm such notice in writing. Each written notice of
borrowing and each confirmation of an oral notice of borrowing shall be in
substantially the form of Exhibit A hereto ("Notice of Borrowing"). Each Notice
of Borrowing shall be signed by the Borrower and shall specify therein the
requested (i) date of such Committed Borrowing, (ii) Type of Loans comprising
such Committed Borrowing, (iii) aggregate amount of such Committed Borrowing and
(iv) with respect to any Committed LIBOR Rate Loan, the Interest Period for each
such Loan. Upon receipt of any such notice, the Agent shall promptly notify each
Bank thereof. Each Bank shall, before 1:00 P.M. (New York City time) on the date
of such Committed Borrowing, make available to the Agent at its address referred
to in Section 11.2, in immediately available funds, such Bank's applicable Pro
Rata Percentage of such Committed Borrowing; provided, however, that, in the
event of a requested ABR Loan with respect to which the Borrower has delivered
its notice of borrowing on the Business Day immediately preceding the requested
Borrowing Date (an "Early Funding ABR Loan"), each Bank shall make its
applicable Pro Rata Percentage of such Committed Borrowing before 10:00 A.M.
(New York City time) on the requested Borrowing Date. The Agent shall, no later
than 2:00 P.M. (New York City time) on such date (or no later than 11:00 A.M.
(New York City time), in the case of an Early Funding ABR Loan), make available
to the Borrower the proceeds of the Committed Loans received by the Agent
hereunder by crediting such account of the Borrower which the Agent and the
Borrower shall from time to time designate. Each Notice of Borrowing shall be
irrevocable and binding on the Borrower.
(b) Unless the Agent shall have received notice from a
Bank at least two hours prior to the applicable time described in clause (a)
above by which such Bank is required to deliver its funds to the Agent with
respect to any Committed Borrowing that such Bank will not make available to the
Agent such Bank's applicable Pro Rata Percentage of such Committed Borrowing,
the Agent may assume that such Bank has made such portion available to the Agent
on the date of such Committed Borrowing in accordance with Section 2.2(a) and
the Agent may, in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If such amount is made available to the
Agent on a date after such date of Committed Borrowing, such Bank shall pay to
the Agent on demand an amount equal to the product of (i) the daily average
Federal Funds Effective Rate during such period, times (ii) the amount of
24
such Bank's applicable Pro Rata Percentage of such Committed Borrowing, times
(iii) a fraction, the numerator of which is the number of days that elapse from
and including such date of Committed Borrowing to the date on which such Bank's
applicable Pro Rata Percentage of such Committed Borrowing shall have become
immediately available to the Agent and the denominator of which is 360. A
certificate of the Agent submitted to any Bank with respect to any amounts owing
under this Section 2.2(b) shall be conclusive in the absence of manifest error.
If such Bank shall repay to the Agent such corresponding amount, such amount so
repaid shall constitute such Bank's Loan as part of such Committed Borrowing for
purposes of this Agreement. If such Bank's applicable Pro Rata Percentage of
such Committed Borrowing is not in fact made available to the Agent by such Bank
within one Business Day of such date of Committed Borrowing, the Agent shall be
entitled to recover such amount with interest thereon at the rate per annum,
equal to (i) the ABR (in the case of ABR Loans) or (ii) the Federal Funds
Effective Rate (in the case of Committed LIBOR Rate Loans), on demand, from the
Borrower.
(c) The failure of any Bank to make the Loan to be made
by it as part of any Committed Borrowing shall not relieve any other Bank of its
obligation, if any, hereunder to make its Loan on the date of such Committed
Borrowing, but no Bank shall be responsible for the failure of any other Bank to
make the Loan to be made by such other Bank on the date of any Committed
Borrowing.
SECTION 2.3. Minimum Tranches. All Borrowings, prepayments,
conversions and continuations of Committed Loans hereunder and all selections of
Interest Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Loans comprising each Tranche of Committed LIBOR Rate Loans shall be
equal to $10,000,000 or an integral multiple of $1,000,000 in excess thereof.
SECTION 2.4. Letters of Credit. (a) L/C Commitment. (i)
Subject to the terms and conditions hereof, the Issuing Bank, in reliance on the
agreements of the other Banks set forth in Section 2.4(d), agrees to issue
letters of credit ("Letters of Credit") for the account of the Borrower in
support of obligations (including, without limitation, performance, bid and
similar bonding obligations and credit enhancement) of the Borrower and its
Affiliates on any Business Day prior to the earlier of (i) Termination Date or
(ii) the Replacement Date in such form as may be approved from time to time by
the Issuing Bank; provided that the Issuing Bank shall have no obligation to
issue any Letter of Credit if, after giving effect to such issuance, (A) the L/C
Obligations would exceed the L/C Commitment or (B) the sum of the Loans then
outstanding and the L/C Obligations then outstanding would exceed the aggregate
Commitments then in effect.
(ii) Each Letter of Credit shall be denominated in Dollars
and shall be a standby letter of credit issued to support obligations
of the Borrower or any of its Affiliates, contingent or otherwise, and
expire no later than the Termination Date.
(iii) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the
State of New York.
25
(iv) The Issuing Bank shall not at any time be obligated
to issue any Letter of Credit hereunder if such issuance would conflict
with, or cause the Issuing Bank or any L/C Participant to exceed any
limits imposed on such Issuing Bank by, any applicable Requirement of
Law.
(b) Procedure for Issuance of Letters of Credit. The
Borrower may from time to time request that the Issuing Bank issue a Letter of
Credit by delivering to the Issuing Bank at its address for notices specified
herein an Application therefor, completed to the satisfaction of the Issuing
Bank, and such other certificates, documents and other papers and information as
the Issuing Bank may reasonably request. Upon receipt of any Application, the
Issuing Bank will process such Application and the certificates, documents and
other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the Letter of
Credit requested thereby (but in no event shall the Issuing Bank be required to
issue any Letter of Credit earlier than three Business Days after its receipt of
the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit in a form satisfactory to the Borrower to the beneficiary thereof or
as otherwise may be agreed by the Issuing Bank and the Borrower. The Issuing
Bank shall furnish a copy of such Letter of Credit to the Borrower promptly
following the issuance thereof and notify the Banks of the amount thereof.
(c) Fees, Commissions and Other Charges. (i) The Borrower
shall pay to the Agent, for the account of the Issuing Bank and the L/C
Participants, a letter of credit commission with respect to each Letter of
Credit, computed for the period from the last L/C Fee Payment Date (or, if
later, the date of issuance thereof) to the date upon which such payment is due
hereunder at the rate per annum equal to the Applicable Margin for LIBOR Rate
Loans then in effect, calculated on the basis of a 365- (or 366-, as the case
may be) day year, of the aggregate amount available to be drawn under such
Letter of Credit on the date on which such fee is calculated. The Borrower shall
pay to the Agent, for the account of the Issuing Bank, a fronting fee with
respect to each Letter of Credit, computed for the period from the last L/C Fee
Payment Date to the date upon which such payment is due hereunder at the rate
per annum equal to 1/8 of 1%, calculated on the basis of a 365- (or 366-, as the
case may be) day year, of the aggregate amount available to be drawn under such
Letter of Credit on the date on which such fee is calculated. Such commissions
and fronting fees shall be payable in arrears on each L/C Fee Payment Date and
shall be nonrefundable.
(ii) In addition to the foregoing fees and commissions,
the Borrower shall pay or reimburse the Issuing Bank for such normal
and customary costs and reasonable expenses as are incurred or charged
by the Issuing Bank in issuing, effecting payment under, amending or
otherwise administering any Letter of Credit.
(iii) The Agent shall, promptly following its receipt
thereof, distribute to the Issuing Bank and the L/C Participants all
fees and commissions received by the Agent for their respective
accounts pursuant to this subsection.
(d) L/C Participations. (i) The Issuing Bank irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Bank to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts
26
and purchases from the Issuing Bank, on the terms and conditions hereinafter
stated, for such L/C Participant's own account and risk an undivided interest
equal to such L/C Participant's Pro Rata Percentage in the Issuing Bank's
obligations and rights under each Letter of Credit issued hereunder and the
aggregate amount of drawings under Letters of Credit that have not then been
reimbursed pursuant to Section 2.4. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Bank that, if a draft is paid under any
Letter of Credit for which the Issuing Bank is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C Participant
shall pay to the Issuing Bank upon demand at the Issuing Bank's address for
notices specified herein an amount equal to such L/C Participant's Pro Rata
Percentage of the amount of such draft, or any part thereof, which is not so
reimbursed.
(ii) If any amount required to be paid by any L/C
Participant to the Issuing Bank pursuant to Section 2.4(d)(i) in
respect of any unreimbursed portion of any payment made by the Issuing
Bank under any Letter of Credit is not paid to the Issuing Bank within
one Business Day after the date such payment is due, such L/C
Participant shall pay to the Issuing Bank on demand an amount equal to
the product of (A) such amount, times (B) the daily average Federal
Funds Effective Rate as quoted by the Issuing Bank, during the period
from and including the date such payment is required to the date on
which such payment is immediately available to the Issuing Bank, times
(C) a fraction the numerator of which is the number of days that elapse
during such period and the denominator of which is 360. If any such
amount required to be paid by any L/C Participant pursuant to Section
2.4(d)(ii) is not in fact made available to the Issuing Bank by such
L/C Participant within three Business Days after the date such payment
is due, the Issuing Bank shall be entitled to recover from such L/C
Participant, on demand, such amount with interest thereon calculated
from such due date at the ABR. A certificate of the Issuing Bank
submitted to any L/C Participant with respect to any amounts owing
under this subsection shall be conclusive in the absence of manifest
error.
(iii) Whenever, at any time after the Issuing Bank has made
payment under any Letter of Credit and has received from any L/C
Participant its pro rata share of such payment in accordance with
Section 2.4(d), the Issuing Bank receives any payment related to such
Letter of Credit (whether directly from the Borrower or otherwise,
including proceeds of collateral applied thereto by the Issuing Bank),
or any payment of interest on account thereof, the Issuing Bank will
distribute to such L/C Participant its pro rata share thereof;
provided, however, that in the event that any such payment received by
the Issuing Bank shall be required to be returned by the Issuing Bank,
such L/C Participant shall return to the Issuing Bank the portion
thereof previously distributed by the Issuing Bank to it.
(e) Reimbursement Obligation of the Borrower. (i) The
Borrower agrees to reimburse the Issuing Bank on each date on which the Issuing
Bank notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Bank for the amount of (A) such draft
so paid and (B) any taxes, reasonable fees, charges or other reasonable costs or
expenses incurred by the Issuing Bank in connection with such payment. Each such
payment shall be made to the Issuing Bank at its address for notices specified
herein in lawful money of the United States of America and in immediately
available funds.
27
(ii) Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this subsection from the date
such amounts become payable (whether at stated maturity, by
acceleration or otherwise) until payment in full at the rate that would
be payable on any outstanding ABR Loans that were then overdue.
(iii) Each drawing under any Letter of Credit shall be
deemed to constitute a Committed Borrowing of ABR Loans in the amount
of such drawing unless Borrower has reimbursed the Issuing Bank under
Section 2.4(e)(i). The Borrowing Date with respect to each such
borrowing shall be deemed to be the date of such drawing.
(f) Obligations Absolute. (i) The Borrower's payment
obligations under Section 2.4(e) shall be absolute and unconditional under any
and all circumstances and irrespective of any set-off, counterclaim or defense
to payment that the Borrower may have or have had against the Issuing Bank or
any beneficiary of a Letter of Credit other than a defense based upon the gross
negligence or willful misconduct of the Issuing Bank or violation of the
standards of care specified in the Uniform Commercial Code of the State of New
York.
(ii) The Borrower also agrees with the Issuing Bank that
the Issuing Bank shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 2.4(e) shall not be affected
by, among other things, (i) the validity or genuineness of documents or
of any endorsements thereon, even though such documents shall in fact
prove to be invalid, fraudulent or forged, (ii) any dispute between or
among the Borrower and any beneficiary of any Letter of Credit or any
other party to which such Letter of Credit may be transferred or (iii)
any claims whatsoever of the Borrower against any beneficiary of such
Letter of Credit or any such transferee.
(iii) The Issuing Bank shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with any
Letter of Credit, except for errors or omissions caused by the Issuing
Bank's gross negligence or willful misconduct.
(iv) The Borrower agrees that any action taken or omitted
by the Issuing Bank under or in connection with any Letter of Credit or
the related drafts or documents, if done in the absence of gross
negligence or willful misconduct and in accordance with the standards
of care specified in the Uniform Commercial Code of the State of New
York, shall be binding on the Borrower and shall not result in any
liability of the Issuing Bank to the Borrower.
(g) Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Bank shall
promptly notify the Borrower of the date and amount thereof. The responsibility
of the Issuing Bank to the Borrower in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.
28
(h) Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 2.4, the provisions of this Section 2.4 shall apply.
ARTICLE III
AMOUNTS AND TERMS OF THE CAF LOANS
SECTION 3.1. The CAF Loans. (a) From time to time on any
Business Day during the period from the Closing Date until the earlier of (i)
Termination Date or (ii) the Replacement Date, the Borrower may request CAF
Loans from the Banks in amounts such that the aggregate principal amount of
Committed Loans and CAF Loans outstanding at any time shall not exceed the
aggregate amount of the Commitments at such time (the "CAF Facility").
(b) Under the terms and conditions set forth below, the
Borrower may borrow, repay pursuant to Section 3.2(h) and reborrow under this
Section 3.1.
SECTION 3.2. Competitive Bid Procedure. (a) In order to
request a CAF Loan, the Borrower shall deliver to the Agent a written notice in
the form of Exhibit B-1, attached hereto (a "Competitive Bid Request"), to be
received by the Agent (i) in the case of each CAF LIBOR Rate Loan, not later
than 3:00 P.M. (New York City time), four (4) Business Days before the Borrowing
Date specified for such CAF LIBOR Rate Loan and (ii) in the case of each Fixed
Rate Loan, not later than 11:00 A.M. (New York City time), one (1) Business Day
before the Borrowing Date specified for such Fixed Rate Loan. Each Competitive
Bid Request shall in each case refer to this Agreement and specify (i) the date
of Borrowing of such CAF Loans (which shall be a Business Day), (ii) the
aggregate principal amount thereof, (iii) whether the CAF Loans then being
requested are to be CAF LIBOR Rate Loans or Fixed Rate Loans, (iv) the maturity
date for each CAF Loan requested to be made and (v) the interest payment dates
for each CAF Loan requested to be made. The Agent shall promptly notify each
Bank by telex or facsimile transmission of the contents of each Competitive Bid
Request received by it. Each Competitive Bid Request may solicit bids for CAF
Loans in an aggregate principal amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and for not more than three alternative maturity
dates for such CAF Loans. The maturity date for each CAF Loan shall be not less
than 15 days nor more than 180 days after the applicable date of CAF Borrowing
(and in any event shall not extend beyond the Termination Date).
(b) Each Bank may, in its sole discretion, irrevocably
offer to make one or more CAF Loans to the Borrower responsive to each
Competitive Bid Request from the Borrower. Any such irrevocable offer by a Bank
must be received by the Agent, in the form of Exhibit B-2 hereto (a "Competitive
Bid"), (i) in the case of each CAF LIBOR Rate Loan, not later than 10:30 A.M.
(New York City time), three (3) Business Days before the Borrowing Date
specified for such CAF LIBOR Rate Loan and (ii) in the case of each Fixed Rate
Loan, not later than 9:30 A.M. (New York City time) on the Borrowing Date
specified for such Fixed Rate Loan. Competitive Bids that do not conform
substantially to the format of Exhibit B-1 may be rejected by the Agent after
conferring with, and upon the instruction of, the Borrower, and the
29
Agent shall notify the Bank of such rejection as soon as practicable. Each
Competitive Bid shall refer to this Agreement and (i) specify the maximum
principal amount of CAF Loans for each maturity date (which shall be in an
aggregate principal amount not less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and which may equal, but not exceed, the principal
amount requested for such maturity date by the Borrower) and the aggregate
maximum principal amount of CAF Loans for all maturity dates (which amount, with
respect to any Bank, may exceed such Bank's Commitment) that the Bank is willing
to make to the Borrower; and (ii) specify the CAF Rate at which the Bank is
prepared to make each such CAF Loan. A Competitive Bid submitted by a Bank
pursuant to this Section 3.2(b) shall be irrevocable absent manifest error.
(c) The Agent shall (i) in the case of each CAF LIBOR
Rate Loan, not later than 11:00 A.M. (New York City time) three (3) Business
Days before the Borrowing Date specified for such CAF LIBOR Rate Loan and (ii)
in the case of each Fixed Rate Loan, not later than 10:00 A.M. (New York City
time) on the Borrowing Date specified for such Fixed Rate Loan, notify the
Borrower in writing of all the Competitive Bids made (arranging each such bid in
ascending interest rate order), and the CAF Rate or CAF Rates and the maximum
principal amount of each CAF Loan in respect of which Competitive Bid was made,
and the identity of the Bank that made each bid. The Agent shall send a copy of
all Competitive Bids to the Borrower for its records as soon as practicable
after completion of the bidding process set forth in this Section 3.2.
(d) The Borrower may in its sole and absolute discretion,
subject only to the provisions of this Section 3.2(d), accept or reject any
Competitive Bid referred to in Section 3.2(c); provided, however, that the
aggregate amount of the Competitive Bids for CAF Loans so accepted by the
Borrower may not exceed the lesser of (i) the principal amount of the applicable
CAF Borrowing requested by the Borrower in respect thereof and (ii) the amount
of the Commitments less the sum of (A) the aggregate principal amount of
Committed Loans and CAF Loans and (B) the L/C Obligations then outstanding,
after giving effect to the application of the proceeds of such respective CAF
Borrowing on the Borrowing Date therefor. The Borrower shall notify the Agent in
writing whether and to what extent it has decided to accept or reject any or all
of the bids referred to in Section 3.2(c) by delivering to the Agent a written
notice in the form of Exhibit B-3 hereto (a "Competitive Bid Confirmation"), (i)
in the case of each CAF LIBOR Rate Loan, not later than 1:00 P.M. (New York City
time), three (3) Business Days before the Borrowing Date specified for such CAF
LIBOR Rate Loan and (ii) in the case of each Fixed Rate Loan, not later than
11:00 A.M. (New York City time) on the Borrowing Date specified for such Fixed
Rate Loan, which Competitive Bid Confirmation shall specify the principal amount
of CAF Loans for each relevant maturity date to be made by each such bidding
Bank (which amount for each such maturity date shall be equal to or less than
the maximum amount for such maturity date specified in the Competitive Bid of
such Bank, and for all maturity dates included in such Competitive Bid in
respect thereof shall be equal to or less than the aggregate maximum amount
specified in such Competitive Bid for all such maturity dates); provided,
however, that (A) the failure by the Borrower to so deliver a Competitive Bid
Confirmation by the specified time shall be deemed to be a rejection of all the
bids referred to in Section 3.2(c) for the related Competitive Bid Request; (B)
the Borrower shall not accept a bid made at a particular CAF Rate for a
particular maturity if the Borrower has decided to reject a bid made at a lower
CAF Rate for such maturity; (C) if the Borrower shall accept bids made at a
30
particular CAF Rate for a particular maturity but shall be restricted by other
conditions hereof from borrowing the maximum principal amount of CAF Loans in
respect of which bids at such CAF Rate have been made, then the Borrower shall
accept a pro rata portion of each bid made at such CAF Rate based as nearly as
possible on the respective maximum principal amounts of CAF Loans offered to be
made by the relevant Banks pursuant to such bids; and (D) no bid shall be
accepted for a CAF Loan by any Bank unless such CAF Loan is in an aggregate
principal amount not less than $5,000,000 or an integral multiple of $1,000,000
in excess thereof. Notwithstanding the foregoing, if it is necessary for the
Borrower to accept a pro rata allocation of the bids made in response to a
Competitive Bid Request (whether pursuant to the events specified in clause (C)
above or otherwise) and the available principal amount of CAF Loans to be
allocated among the Banks is not sufficient to enable CAF Loans to be allocated
to each Bank in an aggregate principal amount not less than $5,000,000 or in
integral multiples of $1,000,000 in excess thereof, then the Borrower shall,
subject to clause (D) above, select the Banks to be allocated such CAF Loans and
shall round allocations up or down to the next higher or lower multiple of
$1,000,000 as it shall deem appropriate; provided that the allocations among the
Banks to be allocated such CAF Loans shall be made pro rata based as nearly as
possible on the respective maximum principal amounts of CAF Loans offered to be
made by such Banks. The Competitive Bid Confirmation given by the Borrower
pursuant to this Section 3.2(d) shall be irrevocable.
(e) Upon receipt from the Agent of the LIBOR Rate
applicable to any CAF LIBOR Rate Loan to be made by any Bank pursuant to a
Competitive Bid that has been accepted by the Borrower pursuant to Section 3.2,
the Agent shall notify such Bank of the applicable LIBOR Rate.
(f) If the Agent shall at any time elect to submit a
Competitive Bid in its capacity as a Bank, it shall submit such bid directly to
the Borrower by (i) in the case of a CAF LIBOR Rate Loan, not later than 10:15
A.M. (New York City time), and (ii) in the case of a Fixed Rate Loan, not later
than 9:15 A.M. (New York City time), in each case, on the Business Day on which
the other Banks are required to submit their bids to the Agent pursuant to
Section 3.2(b) above.
(g) If the Borrower accepts pursuant to Section 3.2(d)
one or more of the offers made by any Bank or Banks, the Agent shall promptly
notify each Bank that has made such an offer of the aggregate amount of such CAF
Loans to be made on the Borrowing Date for each maturity date and of the
acceptance or rejection of any offers to make such CAF Loans made by such Bank.
Each Bank that is to make a CAF Loan shall, before 12:00 Noon (New York City
time) on the Borrowing Date specified in the Competitive Bid Request applicable
thereto, make available to the Agent at its office set forth in Section 11.2 the
amount of CAF Loans to be made by such Bank, in immediately available funds. The
Agent shall, no later than 1:00 P.M. (New York City time), make available to the
Borrower the proceeds of the CAF Loans received by the Agent hereunder by
crediting such account of the Borrower with the Agent as the Borrower shall from
time to time designate. As soon as practicable after each Borrowing Date, the
Agent shall notify each Bank of the aggregate amount of CAF Loans advanced on
such Borrowing Date and the respective maturity dates thereof.
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(h) The Borrower shall repay to the Agent for the account
of each Bank that has made a CAF Loan (or the CAF Loan Assignee in respect
thereof, as the case may be) on the maturity date of each CAF Loan (such
maturity date being that specified by the Borrower for repayment of such CAF
Loan in the related Competitive Bid Request) the then unpaid principal amount of
such CAF Loan. The Borrower shall not, without the consent of the relevant Bank,
have the right to prepay any principal amount of any CAF Loan.
(i) All notices required by this Section 3.2 shall be
made in accordance with Section 11.2 hereof; provided, however, that each
request or notice required to be made under Section 3.2(a) or 3.2(d) by the
Borrower may be made by the giving of telephone notice to the Agent that is
promptly confirmed by delivery of a notice in writing (in substantially the form
of Exhibit B-1 or Exhibit B-3, as the case may be) to the Agent.
ARTICLE IV
PROVISIONS RELATING TO ALL LOANS
SECTION 4.1. Evidence of Loans. (a) Each Bank shall maintain
in accordance with its usual practice an account or accounts evidencing
indebtedness of the Borrower to such Bank resulting from each Loan made by such
Bank from time to time, including, without limitation, the amounts of principal
and interest payable and paid to such Bank from time to time under this
Agreement.
(b) The Agent shall maintain the Register pursuant to
Section 11.6(e) and a subaccount therein for each Bank, in which shall be
recorded (i) the amount of each Committed Loan and CAF Loan made by each Bank
through the Agent hereunder, the type thereof, and each Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Bank hereunder and (iii)
both the amount of any sum received by the Agent hereunder from the Borrower and
each Bank's share thereof.
(c) The entries made in the Register and the accounts of
each Bank maintained pursuant to Section 4.1(a) shall, to the extent permitted
by law, be prima facie evidence of the existence and amount of the obligations
of the Borrower therein recorded; provided, however, that the failure of any
Bank or the Agent to maintain the Register or any such account, or any error
therein, shall not in any manner affect the obligation of the Borrower to repay
(with applicable interest) the Loans actually made to such Borrower by such Bank
in accordance with the terms of this Agreement.
SECTION 4.2. Fees. (a) The Borrower agrees to pay to the Agent
for the account of each Bank a facility fee (the "Facility Fee") on the
aggregate average daily amount of such Bank's Commitment (whether or not
utilized), from the Closing Date until the earlier of (i) Termination Date or
(ii) the Replacement Date, payable quarterly in arrears beginning on September
30, 2001 and continuing thereafter on the last day of each March, June,
September and December during the term of this Agreement, and on the earlier of
(i) Termination Date or (ii) the Replacement Date, at the applicable rate per
annum as specified below opposite the Designated Rating in effect from time to
time during the period for which payment is due:
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Designated Rating Facility Fee Rate
----------------- -----------------
A-/A3 or higher 0.090%
BBB+/Baa1 0.100%
BBB/Baa2 0.125%
BBB-/Baa3 0.175%
BB+/Ba1 or lower or Unrated 0.250%
(b) On any day that the Aggregate Outstanding Extensions
of Credit of all Banks exceeds 33 1/3% of the aggregate Commitments, Borrower
agrees to pay to the Agent for the account of each Bank a usage fee (the "Usage
Fee") of 0.125% per annum on the Aggregate Outstanding Extensions of Credit owed
to such Bank on such day. Any accrued Usage Fee shall be due on the last
Business Day of the calendar quarter during which such Usage Fee accrued,
commencing on the first such date to occur after the Closing Date, and on the
earlier of (i) the Termination Date or (ii) the Replacement Date.
(c) The Facility Fees and Usage Fees payable under
Sections 4.2(a) and 4.2(b) shall be calculated by the Agent on the basis of a
365- or 366-day year, as the case may be, for the actual days (including the
first day but excluding the last day) occurring in the period for which such fee
is payable.
(d) In each row in the table set forth in clause (a)
above, the first indicated rating corresponds to that assigned by S&P and the
second indicated rating corresponds to that assigned by Xxxxx'x; the
determination of which row of such table is applicable at any time is set forth
in the definition of "Designated Rating".
(e) The Borrower shall pay to the Agent, for its own
account, the fees in the amounts and on the dates previously agreed to in
writing by the Borrower and the Agent.
SECTION 4.3. Optional Termination or Reduction of the
Commitments. (a) Optional. The Borrower shall have the right, upon at least one
(1) (or in the case of LIBOR Rate Loans, three (3)) Business Day's irrevocable
written notice to the Agent (which shall give prompt notice to each Bank), to
terminate in whole or permanently reduce ratably in part the unused portions of
the Commitments, provided that (i) each partial reduction shall be in the
aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000
in excess thereof and (ii) no such termination or reduction shall be permitted
if, after giving effect thereto and to any prepayments made under Section 5.5
hereof by the Borrower on the effective date thereof, the aggregate principal
amount of Loans plus the L/C Obligations then outstanding would exceed the
Commitments then in effect.
(b) Each reduction of Commitments pursuant to this
Section 4.3 shall be applied pro rata to the Commitments of each Bank. If at any
time, including after giving effect to any reduction of Commitments pursuant to
this Section 4.3, the Aggregate Outstanding
33
Extensions of Credit for all Banks exceeds the aggregate Commitments, the
Borrower shall be obligated to prepay the Loans (and to cash collateralize
Letters of Credit to the extent that the aggregate amount of the L/C Obligations
exceeds such aggregate Commitments after prepayment of all Loans) in the amount
of such excess.
SECTION 4.4. Interest. The Borrower shall pay interest on the
unpaid principal amount of each Loan made by each Bank from the date of such
Loan until such principal amount shall be paid in full, at the times and at the
rates per annum set forth below:
(a) ABR Loans. Each ABR Loan shall bear interest at a
rate per annum equal at all times to the lesser of (i) the ABR and (ii) the
Highest Lawful Rate, payable quarterly in arrears on the last day of each March,
June, September and December, commencing on September 30, 2001, and on the
Termination Date.
(b) LIBOR Rate Loans. Each LIBOR Rate Loan shall bear
interest at a rate per annum equal at all times to:
(i) in the case of each Committed LIBOR Rate Loan, the
lesser of (A) the sum of the LIBOR Rate for the applicable Interest
Period for such Loan plus the Applicable Margin and (B) the Highest
Lawful Rate, payable on the last day of such Interest Period and, with
respect to Interest Periods of six or nine months, on the ninetieth
(90th) day after the commencement of the Interest Period and on each
succeeding ninetieth (90th) day during such Interest Period, and on the
Termination Date; and
(ii) in the case of each CAF LIBOR Rate Loan, the lesser
of (A) the sum of the LIBOR Rate applicable to such Loan plus or minus,
as the case may be, the CAF Margin specified by a Bank with respect to
such Loan in its Competitive Bid submitted pursuant to Section 3.2(b)
and (B) the Highest Lawful Rate, payable on the date or dates specified
in the relevant Competitive Bid Request.
(c) Fixed Rate Loans. Each Fixed Rate Loan shall bear
interest at a rate per annum equal at all times to the lesser of (i) the fixed
rate of interest offered by the Bank making such Loan and accepted by the
Borrower pursuant to Section 3.2 and (ii) the Highest Lawful Rate, payable on
the date or dates specified in the relevant Competitive Bid Request.
(d) Interest that is determined by reference to the Prime
Rate shall be calculated by the Agent on the basis of a 365- or 366-day year, as
the case may be, for the actual days (including the first day but excluding the
last day) occurring in the period in which such interest is payable and
otherwise shall be calculated by the Agent on the basis of a 360-day year for
the actual days (including the first day and excluding the last day) occurring
in the period for which such interest is payable.
(e) Notwithstanding the foregoing, if all or a portion of
(i) the principal amount of any Loan, (ii) any interest payable thereon, or
(iii) any Facility Fee or other amount payable hereunder shall not be paid when
due (whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest, payable from time to time on demand, at a rate per
annum equal to the lesser of (A) the Highest Lawful Rate and (B) the Default
Rate, in
34
each case from the date of such non-payment until such amount is paid in full
(as well after as before judgment).
(f) Each determination of an interest rate by the Agent
pursuant to any provisions of this Agreement shall be conclusive and binding on
the Borrower and the Banks in the absence of manifest error. The Agent shall, at
the request of the Borrower, deliver to the Borrower a statement showing in
reasonable detail the quotations used by the Agent in determining the LIBOR
Rate.
(g) If any Reference Bank shall for any reason no longer
have Commitments or any Loans, such Reference Bank shall thereupon cease to be a
Reference Bank, and the Agent (after consultation with the Borrower and the
Banks) shall, by notice to the Borrower and the Banks, designate another Bank as
a Reference Bank.
(h) Each Reference Bank shall use its best efforts to
furnish quotations of rates to the Agent as contemplated hereby. If any of the
Reference Banks shall be unable or shall otherwise fail to supply such rates to
the Agent upon its request, the rate of interest shall, subject to the
provisions of Section 4.6(b), be determined on the basis of the quotations of
the remaining Reference Banks or Reference Bank.
SECTION 4.5. Reserve Requirements. (a) The Borrower agrees to
pay to each Bank that requests compensation under this Section 4.5 in accordance
with the provisions set forth in Section 5.7(b), so long as such Bank shall be
required to maintain reserves against "Eurocurrency liabilities" under
Regulation D of the Board (or, so long as such Bank shall be required by the
Board or by any other Governmental Authority to maintain reserves against any
other category of liabilities that includes deposits by reference to which the
interest rate on LIBOR Rate Loans is determined as provided in this Agreement or
against any category of extensions of credit or other assets of such Bank that
includes any LIBOR Rate Loans), an additional amount (determined by such Bank
and notified to the Borrower pursuant to the provisions set forth in Section
5.7(b)) representing such Bank's calculation or, if an accurate calculation is
impracticable, reasonable estimate (using such method of allocation to such
Loans of the Borrower as such Bank shall determine in accordance with Section
5.7(a)) of the actual costs, if any, incurred by such Bank during the relevant
Interest Period or during the period a CAF LIBOR Rate Loan made by such Bank was
outstanding, as the case may be, as a result of the applicability of the
foregoing reserves to such Committed LIBOR Rate Loans or CAF LIBOR Rate Loans,
which amount in any event shall not exceed the product of the following for each
day of such Interest Period or each day during the period such CAF LIBOR Rate
Loan was outstanding, as the case may be:
(i) the principal amount of the relevant Committed LIBOR
Rate Loans or CAF LIBOR Rate Loans made by such Bank outstanding on
such day; and
(ii) the difference between (A) a fraction, the numerator
of which is the LIBOR Rate (expressed as a decimal) applicable to such
Committed LIBOR Rate Loan or CAF LIBOR Rate Loan, as the case may be
(expressed as a decimal), and the denominator of which is one minus the
maximum rate (expressed as a decimal) at which
35
such reserve requirements are imposed by the Board or other
Governmental Authority on such date minus (B) such numerator; and
(iii) a fraction, the numerator of which is one and the
denominator of which is 360.
(b) The agreements in this Section 4.5 shall survive the
termination of this Agreement and the payment of all amounts payable hereunder;
provided, however, that in no event shall the Borrower be obligated to reimburse
or compensate any Bank for amounts contemplated by this Section 4.5 for any
period prior to the date that is 180 days prior to the date upon which such Bank
requests in writing such reimbursement or compensation from the Borrower.
SECTION 4.6. Interest Rate Determination and Protection. (a)
The rate of interest for each Committed LIBOR Rate Loan shall be determined by
the Agent two (2) Business Days before the first day of each Interest Period
applicable to such Loan. The Agent shall give prompt notice to the Borrower and
the Banks of the applicable interest rate determined by the Agent for purposes
of Sections 4.4(a) and (b) hereof.
(b) If, with respect to any Committed LIBOR Rate Loans,
prior to the first day of an Interest Period (i) the Agent shall have determined
(which determination shall be conclusive and binding upon the Borrower) that
adequate and reasonable means do not exist for ascertaining the LIBOR Rate for
such Interest Period or (ii) the Agent shall have received notice from the
Majority Banks that the LIBOR Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such Banks
(as determined in good faith and certified by such Banks) of making or
maintaining their affected Committed LIBOR Rate Loans during such Interest
Period, the Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Banks as soon as practicable thereafter. If such notice is
given, (A) any Committed LIBOR Rate Loans requested to be made on the first day
of such Interest Period shall be made as ABR Loans, (B) any Committed Loans that
were to have been converted on the first day of such Interest Period to
Committed LIBOR Rate Loans shall be continued as ABR Loans and (C) any
outstanding Committed LIBOR Rate Loans shall be converted, on the first day of
such Interest Period, to ABR Loans. Until such notice has been withdrawn by the
Agent, no further Committed LIBOR Rate Loans shall be made or continued as such,
nor shall the Borrower have the right to convert Committed Loans to Committed
LIBOR Rate Loans.
SECTION 4.7. Voluntary Interest Conversion or Continuation of
Committed Loans. (a) The Borrower may on any Business Day, upon the Borrower's
irrevocable oral or written notice of interest conversion/continuation given by
the Borrower to the Agent not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the date of the proposed interest conversion or
continuation in the case of a Committed LIBOR Rate Loan, (i) convert Committed
Loans of one Type into Committed Loans of another Type; (ii) convert Committed
LIBOR Rate Loans for a specified Interest Period into Committed LIBOR Rate Loans
for a different Interest Period; or (iii) continue Committed LIBOR Rate Loans
for a specified Interest Period as Committed LIBOR Rate Loans for the same
Interest Period; provided, however, that (A) no Committed Loan may be converted
into or continued as a Committed LIBOR Rate Loan by the Borrower so long as an
Event of Default has occurred and
36
is continuing and the Agent has (or the Majority Banks have) determined that
such a conversion or continuation is not appropriate; (B) no Committed Loan may
be converted into or continued as a Committed LIBOR Rate Loan after the date
that is one month prior to the Termination Date and (C) no Committed Loan may be
converted into or continued as a Committed LIBOR Rate Loan if, after giving
effect thereto, Section 2.3 would be contravened. With respect to any oral
notice of interest conversion/continuation given by the Borrower under this
Section 4.7(a), the Borrower shall promptly thereafter confirm such notice in
writing. Each written notice of interest conversion/continuation given by the
Borrower under this Section 4.7(a) and each confirmation of an oral notice of
interest conversion/continuation given by the Borrower under this Section 4.7(a)
shall be in substantially the form of Exhibit H hereto ("Notice of Interest
Conversion/Continuation"). Each such Notice of Interest Conversion/Continuation
shall specify therein (x) the requested date of such interest conversion or
continuation; (y) the Committed Loans to be converted or continued; and (z) if
such interest conversion or continuation is into Committed LIBOR Rate Loans, the
duration of the Interest Period for each such Committed LIBOR Rate Loan. Upon
receipt of any such Notice of Interest Conversion/Continuation, the Agent shall
promptly notify each Bank thereof. Each Notice of Interest Conversion/
Continuation shall be irrevocable and binding on the Borrower.
(b) If the Borrower shall fail to deliver to the Agent a
Notice of Interest Conversion/Continuation in accordance with Section 4.7(a)
hereof, or to select the duration of any Interest Period for the principal
amount outstanding under any Committed LIBOR Rate Loan by 11:00 A.M. (New York
City time) on the third Business Day prior to the last day of the Interest
Period applicable to such Loan in accordance with Section 4.7(a), the Agent will
forthwith so notify the Borrower and the Banks provided that the failure to give
such notice shall not affect the conversion referred to below) and such
Committed Loans will automatically, on the last day of the then existing
Interest Period therefor, convert into ABR Loans.
SECTION 4.8. Funding Losses Relating to LIBOR Rate Loans and
Fixed Rate Loans. (a) The Borrower agrees, without duplication of any other
provision under this Agreement, to indemnify each Bank and to hold each Bank
harmless from any loss or expense that such Bank may sustain or incur as a
consequence of (i) default by the Borrower in payment when due of the principal
amount of or interest on any LIBOR Rate Loan, (ii) default by the Borrower in
making a borrowing of, conversion into or continuation of any LIBOR Rate Loan
after the Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (iii) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (iv) the making of a prepayment of LIBOR Rate
Loans or the conversion of Committed LIBOR Rate Loans into ABR Loans on a day
that is not the last day of an Interest Period with respect thereto (excluding
any prepayment made pursuant to Section 4.9) or the making of a prepayment of
any Fixed Rate Loan on a day that is not the scheduled maturity date with
respect thereto, including, without limitation, in each case, any such loss or
expense arising from the reemployment of funds obtained by it or from fees
payable to terminate the deposits from which such funds were obtained. The
calculation of all amounts payable to a Bank under this Section 4.8(a) shall be
made pursuant to the method described in Section 5.7(a), but in no event shall
such amounts payable with respect to any LIBOR Rate Loan exceed the amounts that
would have been payable assuming such Bank had actually funded its relevant
LIBOR Rate Loan through the purchase of a deposit bearing interest at the LIBOR
Rate in an amount equal to the amount of such LIBOR
37
Rate Loan and having a maturity comparable to (A) with respect to any Committed
LIBOR Rate Loan, the relevant Interest Period and (B) with respect to any CAF
LIBOR Rate Loan, the maturity set forth in the Competitive Bid applicable
thereto; provided, that each Bank may fund each of its LIBOR Rate Loans in any
manner it sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this Section 4.8(a).
(b) The agreements in this Section 4.8 shall survive the
termination of this Agreement and the payment of all amounts payable hereunder;
provided, however, that in no event shall the Borrower be obligated to reimburse
or compensate any Bank for amounts contemplated by this Section 4.8 for amounts
accruing prior to the date that is 180 days prior to the date upon which such
Bank requests in writing such reimbursement or compensation from the Borrower.
SECTION 4.9. Change in Legality. (a) Notwithstanding any other
provision of this Agreement, if any Bank shall determine in good faith that the
introduction of or any change in or in the interpretation by any Governmental
Authority or application of any law or regulation (in each case occurring after
the date of this Agreement) makes it unlawful, or any central bank or other
Governmental Authority asserts after the date of this Agreement that it is
unlawful, for any Bank or its applicable lending office to perform its
obligations hereunder to make LIBOR Rate Loans or to fund or maintain LIBOR Rate
Loans hereunder, (i) the obligation of such Bank to make, or to convert
Committed Loans into, or to continue LIBOR Rate Loans as, LIBOR Rate Loans shall
be suspended until the Agent shall notify the Borrower that the circumstances
causing such suspension no longer exist; (ii) the Borrower shall, at its option,
either prepay in full all LIBOR Rate Loans of such Bank then outstanding, or
convert all such Loans to ABR Loans, on the respective last days of the then
current Interest Periods with respect to such Loans (or within such earlier
period as required by law), accompanied, in the case of any prepayments, by
interest accrued thereon and (iii) the Borrower shall, with respect to each CAF
LIBOR Rate Loan of such Bank, take such action as such Bank shall reasonably
request. Each Bank agrees that it will use reasonable efforts to designate a
different lending office for the LIBOR Rate Loans due to it affected by this
Section 4.9, if such designation will avoid the illegality described in this
Section 4.9 so long as such designation will not be disadvantageous to such Bank
as determined by such Bank in its sole discretion acting in good faith.
(b) For purposes of this Section 4.9, a notice to the
Borrower (with a copy to the Agent) by any Bank pursuant to paragraph (a) above
shall be effective on the date of receipt thereof by the Borrower.
ARTICLE V
INCREASED COSTS, TAXES, PAYMENTS
AND PREPAYMENTS
SECTION 5.1. Increased Costs; Capital Adequacy. (a) If after
the date of this Agreement the adoption of or any change in any law or
regulation or in the interpretation by any Governmental Authority or application
thereof or compliance by any Bank with any request or
38
directive (whether or not having the force of law) from any central bank or
other Governmental Authority made subsequent to the date of this Agreement:
(i) shall subject any Bank to any tax of any kind
whatsoever with respect to this Agreement, any Note, any Letter of
Credit, any Application or any LIBOR Rate Loan made by it, or change
the basis of taxation of payments to such Bank in respect thereof
(except for (A) Taxes covered by Section 5.3, (B) net income taxes and
franchise taxes imposed on such Bank as a result of a present or former
connection between the jurisdiction of the government or taxing
authority imposing such tax and such Bank other than a connection
arising solely from such Bank having executed, delivered or performed
its obligations or received a payment under, or enforced, this
Agreement or any Note and (C) changes in the rate of tax on the overall
net income of such Bank);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Bank that is not otherwise
included in the determination of the LIBOR Rate hereunder (except for
amounts covered by Section 4.5 or any other Section hereof); or
(iii) shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the actual cost to such
Bank, by an amount that such Bank deems to be material, of making, converting
into, continuing or maintaining LIBOR Rate Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Bank, upon
its demand in the manner set forth in Section 5.7(b), any additional amounts,
computed by such Bank in accordance with Section 5.7(a), necessary to compensate
such Bank for such actual increased cost or reduced amount receivable
attributable to Loans or Commitments to the Borrower (to the extent that such
Bank has not already been compensated or reimbursed for such amounts pursuant to
any other provision of this Agreement). If any Bank becomes entitled to claim
any additional amounts pursuant to this Section 5.1(a) from the Borrower, it
shall promptly notify the Borrower, through the Agent, of the event by reason of
which it has become so entitled in the manner set forth in Section 5.7(b).
(b) If any Bank determines in good faith that the
introduction of or any change in or in the interpretation or application of any
law or regulation regarding capital adequacy after the date of this Agreement or
compliance by such Bank or any corporation controlling such Bank with any law or
regulation or any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law) made or issued
after the date of this Agreement does or shall have the effect, as a result of
such Bank's obligations under this Agreement or under any Letter of Credit, of
reducing the rate of return on such Bank's or such corporation's capital to a
level below that which such Bank or such corporation could have achieved but for
such change or compliance (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Bank to be material, the Borrower shall pay to the Agent for the account of
such Bank, from time to time as specified by such Bank in the manner set forth
in Section 5.7(b),
39
additional amounts, computed by such Bank in accordance with Section 5.7(a),
sufficient to compensate such Bank or such corporation in the light of such
circumstances, to the extent that such Bank reasonably determines such reduction
in rate of return is allocable to the existence of such Bank's obligations
hereunder.
(c) The agreements contained in this Section 5.1 shall
survive the termination of this Agreement and the payment of all amounts payable
hereunder; provided, however, that in no event shall the Borrower be obligated
to reimburse or compensate any Bank for amounts contemplated by this Section 5.1
for any period prior to the date that is 180 days prior to the date upon which
such Bank requests in writing such reimbursement or compensation from the
Borrower.
SECTION 5.2. Payments and Computations. (a) The Borrower shall
make each payment (including each prepayment) hereunder, whether on account of
principal, interest, fees or otherwise, without setoff or counterclaim, not
later than 12:00 Noon (New York City time) on the day when due in Dollars to the
Agent at its address referred to in Section 11.2 in immediately available funds.
The Agent will promptly thereafter cause to be distributed like funds relating
to the payment of principal or interest or Facility Fees (to the extent received
by the Agent) ratably to the Banks according to the amounts of their respective
Loans, L/C Obligations and Commitments in respect of which such payment is made,
and like funds relating to the payment of any other amount payable to any Bank
(to the extent received by the Agent) to such Bank, in each case to be applied
in accordance with the terms of this Agreement.
(b) Whenever any payment hereunder shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be;
provided, however, if such extension would cause payment of interest on or
principal of LIBOR Rate Loans to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
(c) Unless the Agent shall have received notice from the
Borrower prior to 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 such Bank. If and
to the extent the Borrower shall not have so made such payment in full to the
Agent, each Bank shall pay to the Agent on demand an amount equal to the product
of (i) the daily average Federal Funds Effective Rate during such period, times
(ii) the amount of such Bank's applicable Pro Rata Percentage of such payment,
times (iii) a fraction, the numerator of which is the number of days that elapse
from and including the date such amount is distributed to such Bank to the date
on which such Bank's applicable Pro Rata Percentage of such payment shall have
become immediately available to the Agent and the denominator of which is 360.
SECTION 5.3. Taxes. (a) Except with respect to withholdings of
United States taxes as provided in Section 5.3(d), any and all payments by the
Borrower hereunder shall be made, in accordance with Section 5.2, free and clear
of and without deduction or withholding for or on account of any and all present
or future taxes, levies, imposts, deductions, charges or
40
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Bank and the Agent, net income taxes and franchise taxes imposed on it
as a result of a present or former connection between the jurisdiction of the
government or taxing authority imposing such tax and the Agent or such Bank
other than a connection arising solely from the Agent or such Bank having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any Note (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). Except with respect to withholdings of United States
taxes as provided in Section 5.3(d), if the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Bank or the Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 5.3) such Bank or the
Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made; (ii) the Borrower shall make such
deductions; and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law. If requested by any Bank, the Borrower shall confirm that all applicable
Taxes, if any, imposed on it by virtue of the transactions under this Agreement
have been properly and legally paid by it to the appropriate taxing authorities
by sending either (A) official tax receipts or notarized copies of such receipts
to such Bank within thirty (30) days after payment of any applicable tax or (B)
a certificate executed by a Responsible Officer of the Borrower confirming that
such Taxes have been paid, together with evidence of such payment.
(b) In addition, the Borrower agrees to pay, in the
manner set forth in Section 5.7(b), any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies that
arise from any payment made hereunder or under any Note or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
Note and for which such Bank or the Agent (as the case may be) has not been
otherwise reimbursed by the Borrower under this Agreement (hereinafter referred
to as "Other Taxes"). Notwithstanding the foregoing, the Borrower shall not bear
any stamp, documentary, other excise taxes, charges or similar levies that are
levied upon the sale or other transfer of any Note by a Bank or the Agent.
(c) The Borrower will indemnify each Bank and the Agent
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 5.3) paid by such Bank or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, including, without limitation or duplication, any incremental
taxes, interest or penalties that may become payable by the Agent or any Bank as
a result of any failure by the Borrower to pay any Taxes or Other Taxes when due
to the appropriate taxing authority or to remit to any Bank the receipts or
other evidence of payment of Taxes or Other Taxes.
(d) Each Bank and each CAF Loan Assignee registered in
the Register that is not a U.S. Person as defined in Section 7701(a)(30) of the
Code agrees that it will deliver to the Borrower and the Agent two duly
completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI
or successor applicable forms, as the case may be. Each such Bank and each such
CAF Loan Assignee also agrees to deliver to the Borrower and the Agent two
further copies of the said Form W-8BEN or W-8ECI, or successor applicable forms
or other
41
manner of certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form previously delivered by it to the Borrower, and
such extensions or renewals thereof as may reasonably be requested by the
Borrower or the Agent, unless in any such case any change in treaty, law or
regulation has occurred prior to the date on which any such delivery would
otherwise be required that renders all such forms inapplicable or that would
prevent such Bank or such CAF Loan Assignee from duly completing and delivering
any such form with respect to it and such Bank or such CAF Loan Assignee so
advises the Borrower and the Agent. Each such Bank and each such CAF Loan
Assignee shall certify in the case of a Form W-8BEN or W-8ECI that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes. In the event that any
such Bank or CAF Loan Assignee fails to deliver any forms required under this
Section 5.3(d), the Borrower's obligation to pay additional amounts shall be
reduced to the amount that it would have been obligated to pay had such forms
been provided.
(e) If the Taxes or Other Taxes are not correctly or
legally asserted and any Bank receives a refund of those Taxes or Other Taxes,
such Bank shall within 20 days after such refund pay to the Borrower the amount
of such refund to the extent that the Borrower indemnified such Bank (or the
Agent) for such Taxes or Other Taxes pursuant to this Section 5.3 net of any
out-of pocket costs of such Bank.
(f) The agreements in this Section 5.3 shall survive the
termination of this Agreement and the payment of all amounts payable hereunder;
provided, however, that (i) in no event shall the Borrower be obligated to
reimburse or compensate any Bank for amounts contemplated by this Section 5.3
for any period prior to the date that is 180 days prior to the date upon which
such Bank requests in writing such reimbursement or compensation from the
Borrower (other than any amounts as to which the ultimate amount of the
reimbursement due could not then be determined) and (ii) nothing contained in
this Section 5.3 shall require the Borrower to pay any amount to any Bank or the
Agent in addition to that for which it has already reimbursed any Bank or the
Agent under any other provision of this Agreement.
SECTION 5.4. Sharing of Payments, Etc. If any Bank (a
"benefitted Bank") shall at any time receive any payment (other than pursuant to
Section 4.5, 4.8, 5.1 or 5.3) of all or part of its Committed Loans,
Reimbursement Obligations owing to it or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by setoff,
pursuant to events or proceedings of the nature referred to in Section 9.1(h) or
9.1(i), or otherwise), in a greater proportion than any such payment to or
collateral received by any other Bank, if any, in respect of such other Bank's
Committed Loans or Reimbursement Obligations owing to it, respectively, or
interest thereon, such benefitted Bank shall purchase for cash from the other
Banks a participating interest in such portion of each such other Bank's
Committed Loans or Reimbursement Obligations owing to it, respectively, or shall
provide such other Banks with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such benefitted Bank to share
the excess payment or benefits of such collateral or proceeds ratably with each
of the Banks; provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such benefitted Bank, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest. The Borrower agrees that any
Bank so purchasing a participation from another Bank pursuant to this
42
Section 5.4 may, to the fullest extent permitted by law, exercise all its rights
of payment (including the right of setoff) with respect to such participation as
fully as if such Bank were the direct creditor of the Borrower in the amount of
such participation.
SECTION 5.5. Voluntary Prepayments. Subject to payment of
amounts due under Section 4.8, the Borrower may, upon written notice delivered
to the Agent not later than 11:00 A.M. (New York City time) one (1) (or in the
case of LIBOR Rate Loans, three (3)) Business Days prior to the date of
prepayment stating the aggregate principal amount of the prepayment and the
Committed Loans to be prepaid, prepay the outstanding principal amounts of such
Committed Loans comprising part of the same Committed Borrowing in whole or
ratably in part, together with accrued interest to the date of such prepayment
on the principal amount prepaid; provided, however, that all such prepayments
shall be made without premium or penalty thereon; and provided further that
losses incurred by any Bank under Section 4.8 shall be payable with respect to
each such prepayment in the manner set forth in Section 4.8. Any such notice
provided pursuant to this Section 5.5 shall be irrevocable, and the payment
amount specified in such notice shall be due and payable on the prepayment date
described in such notice, together with accrued and unpaid interest on the
amount prepaid. Partial prepayments pursuant to this Section 5.5 with respect to
any Tranche of Committed LIBOR Rate Loans shall be in an aggregate principal
amount equal to the lesser of (a) $10,000,000 or an integral multiple of
$1,000,000 in excess thereof or (b) the aggregate principal amount of such
Tranche of Committed LIBOR Rate Loans then outstanding, as the case may be;
provided, that, no partial prepayment of any Tranche of Committed LIBOR Rate
Loans may be made if, after giving effect thereto, Section 2.3 would be
contravened. Partial prepayments with respect to the ABR Loans shall be made in
an aggregate principal amount equal to the lesser of (i) $5,000,000 or an
integral multiple of $1,000,000 in excess thereof or (ii) the aggregate
principal amount of ABR Loans then outstanding, as the case may be.
SECTION 5.6. Mitigation of Losses and Costs; Replacement of
Bank. (a) Any Bank claiming reimbursement from the Borrower under any of
Sections 4.5, 4.8, 5.1 and 5.3 hereof shall use reasonable efforts (including,
without limitation, if requested by the Borrower, reasonable efforts to
designate a different lending office of such Bank) to mitigate the amount of
such losses, costs, expenses and liabilities, if such efforts can be made and
such mitigation can be accomplished without such Bank suffering (i) any economic
disadvantage for which such Bank does not receive full indemnity from the
Borrower under this Agreement or (ii) any legal or regulatory disadvantage.
(b) Notwithstanding anything to the contrary contained
herein, the Borrower (for any reason and in its sole discretion) shall have the
right at any time and from time to time to replace any of the Banks (each such
Bank, a "Replaced Bank") with one or more other banks (which need not be
existing Banks hereunder) reasonably acceptable to the Agent (collectively, the
"Replacement Bank") that have agreed to purchase the Commitments and Committed
Loans of such Bank pursuant to one or more Committed Loan Assignment and
Acceptances in accordance with the provisions of Section 11.6(c) (including,
without limitation, the requirements of the last sentence thereof); provided
that:
43
(i) each such assignment shall be arranged by the
Borrower (with such reasonable assistance from such Replaced Bank as
the Borrower reasonably may request); and
(ii) no Replaced Bank shall be obligated to make any such
assignment pursuant to this Section 5.6(b) unless and until such
Replaced Bank shall have received one or more payments from the
Replacement Bank in an aggregate amount equal to the aggregate
outstanding principal amount of the Committed Loans owing to such
Replaced Bank, together with accrued and unpaid interest and fees
thereon (including, in any event, any breakage indemnities of the type
described in subsection 4.8) to the date of such payment and all other
amounts payable to such Replaced Bank under this Agreement.
Upon the effectiveness of such assignment, the Replacement Bank shall become a
Bank hereunder and (except with respect to any indemnities under this Agreement
with respect to events or circumstances arising prior to the replacement of such
Replaced Bank, which shall survive as to such Replaced Bank, and the obligation
to repay in a timely manner any then outstanding CAF Loans with accrued interest
thereon and all other amounts payable to such Replaced Bank under this
Agreement, which shall survive as to such Replaced Bank and shall continue to
constitute Loans hereunder until paid in full) the Replaced Bank shall cease to
constitute a Bank hereunder.
SECTION 5.7. Determination and Notice of Additional Costs and
Other Amounts. (a) In determining the amount of any claim for reimbursement or
compensation under Sections 4.5, 4.8, 5.1 and 5.3, each Bank may use any
reasonable averaging, attribution and allocation methods consistent with such
methods customarily employed by such Bank in similar situations.
(b) Each Bank or, with respect to compensation claimed by
it pursuant to Section 5.3, the Agent, as the case may be, will (i) use best
efforts to notify the Borrower through the Agent (in the case of each Bank) of
any event giving rise to such claim occurring after the date of this Agreement
promptly after the occurrence thereof and (ii) notify the Borrower through the
Agent (in the case of each Bank) promptly after such Bank or the Agent, as the
case may be, becomes aware of any event occurring after the date of this
Agreement, in either case if such event (for purposes of this Section 5.7(b), a
"Triggering Event") will entitle such Bank or the Agent, as the case may be, to
compensation pursuant to Section 4.5, 4.8, 5.1 or 5.3, as the case may be. Each
such notification of a Triggering Event shall be accompanied by a certificate of
such Bank or the Agent, as the case may be, setting forth in reasonable detail
such amount or amounts as shall be necessary to compensate such Bank or the
Agent, as the case may be, as specified in Section 4.5, 4.8, 5.1 or 5.3, as the
case may be, which certificate shall be conclusive absent manifest error. The
Borrower shall pay to the Agent for the account of such Bank or to the Agent for
its own account, as the case may be, the amount shown as due on any such
certificate within 10 Business Days after its receipt of the same.
44
ARTICLE VI
CONDITIONS OF LENDING
SECTION 6.1. Conditions Precedent to Effectiveness and Initial
Loans. The effectiveness of this Agreement and the obligation of each Bank to
make its initial Loan to the Borrower hereunder is subject to the satisfaction
of the following conditions precedent:
(a) The Agent (or its counsel) shall have received from
each party to this Agreement, the Reliant Energy Pledge and Collateral Agency
Agreement, the Pledge and Collateral Agency Agreement and the Support Agreement
either (i) a counterpart of such Loan Document signed on behalf of such party or
(ii) written evidence satisfactory to the Agent (which may include telecopy
transmission of a signed signature page of such Loan Document) that such party
has signed a counterpart of such Loan Document.
(b) The Agent (or its counsel) shall have received a
certificate dated the Closing Date of an Assistant Secretary of Reliant Energy
certifying (i) the names and true signatures of the officers of each Loan Party
authorized to sign each Loan Document to which it is a party and the notices and
other documents to be delivered by such Loan Party pursuant to any such Loan
Document; (ii) the bylaws and articles of incorporation, partnership agreement
or similar organizational documents of each Loan Party as in effect on the date
of such certification; (iii) the resolutions of the Board of Directors of each
Loan Party (or, with respect to the Borrower, resolutions of the Board of
Directors of FinanceCo GP) approving and authorizing the execution, delivery and
performance by such Loan Party of each Loan Document to which it is a party and,
in the case of the Borrower, any Notes from time to time issued hereunder and
authorizing the borrowings and other transactions contemplated hereunder; and
(iv) that all authorizations, approvals and consents by any Governmental
Authority or other Person necessary in connection with the execution, delivery
and performance of the Loan Documents and any other regulatory approvals in
respect thereof required to be obtained prior to the Closing Date, have been
obtained and are in full force and effect.
(c) The Agent (or its counsel) shall have received a
certificate of a Responsible Officer of Reliant Energy certifying that, as of
the Closing Date and except as disclosed on Schedule 6.1(c) attached hereto,
Reliant Energy owns, directly or indirectly through one or more of its
Subsidiaries, all of the outstanding Capital Stock of each Significant
Subsidiary of Reliant Energy, free and clear of any Liens other than those
arising under Section 8.4(a).
(d) The Agent (or its counsel) shall have received (i) a
favorable opinion of Xxxxx Xxxxx, LLP, counsel for the Borrower, dated the
Closing Date and substantially in the form of Exhibit I-A hereto and (ii) a
favorable opinion of Xxxxx Xxxxx, LLP, counsel for the Borrower, dated the
Closing Date and substantially in the form of Exhibit I-B hereto.
(e) The Agent (or its counsel) shall have received
certificates dated on or about the Closing Date of the Secretary of State of the
State of Delaware as to the existence and good standing of the Borrower and
FinanceCo GP.
45
(f) The Agent shall have received a certificate showing in
reasonable detail Projected Borrower Debt Service and Projected Available Cash
for the fiscal quarter of the Borrower ending September 30, 2001.
(g) The FinanceCo Existing Credit Facility shall have been
replaced and superseded in all respects as contemplated hereby and the
commitments thereunder terminated or such replacement will occur concurrently
with the effectiveness of this Agreement, and the Borrower shall have delivered
such documentation with respect thereto as the Agent shall reasonably request.
(h) All governmental and third-party approvals necessary in
connection with the execution, delivery and performance by Borrower of this
Agreement, if any, shall have been obtained and be in full force and effect.
The Agent shall notify the Borrower and the Banks of the
effectiveness of this Agreement, and such notice shall be conclusive and
binding.
SECTION 6.2. Conditions Precedent to Certain Borrowings. The
obligation of each Bank to make each extension of credit (including, to the
extent relevant, the initial Loans hereunder and any issuance of a Letter of
Credit) is subject to the satisfaction of the following conditions precedent:
(a) On or prior to the date of such extension of credit, the
Agent shall have received from the Borrower a Notice of Borrowing or a
Competitive Bid Confirmation, as the case may be, in accordance with the terms
of this Agreement, or, in the case of the issuance of any Letter of Credit, the
instruments required under Section 2.4 in respect thereof.
(b) The representations and warranties of Reliant Energy and
the Borrower contained in Article 7 of this Agreement shall be true and correct
in all material respects on and as of the date of such extension of credit
(except for those representations or warranties or parts thereof that, by their
terms, expressly relate solely to a specific date, in which case such
representations and warranties shall be true and correct in all material
respects as of such specific date), before and after giving effect to such
extension of credit, and to the application of the proceeds therefrom, as though
made on and as of such date.
(c) No Default or Event of Default shall have occurred and be
continuing, or would result from such extension of credit.
(d) Each of the giving of any applicable Notice of Borrowing
or Competitive Bid Confirmation, as the case may be, the acceptance by the
Borrower of the proceeds of each Borrowing, and each Letter of Credit issued on
behalf of the Borrower, shall constitute a representation and warranty by the
Borrower that on the date of such Borrowing such statements set forth in Section
6.2(b) and (c) are true and correct.
46
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Each of the Borrower and Reliant Energy hereby represents and
warrants as follows:
SECTION 7.1. Corporate, Partnership or Other Status. (a)
Reliant Energy is validly organized and existing as a corporation (or, if
converted to a limited liability company in accordance with the definition of
Restructuring, a limited liability company) and in good standing under the laws
of its jurisdiction of organization; (b) the Borrower is validly organized and
existing as a limited partnership and in good standing under the laws of the
State of Delaware; (c) FinanceCo GP is validly organized and existing as a
limited liability company and in good standing under the laws of the State of
Delaware; (d) each of Reliant Energy, FinanceCo GP and the Borrower is duly
authorized or qualified to do business in and is in good standing in each other
jurisdiction in which the conduct of its business or the ownership or leasing of
its Property requires it to be so authorized or qualified to do business, except
where the failure to be so duly authorized or qualified or in good standing,
individually or in the aggregate, would not have a Material Adverse Effect; and
(e) each of Reliant Energy, FinanceCo GP and the Borrower has the corporate,
partnership or other requisite power and authority to conduct its business as
presently conducted.
SECTION 7.2. Organizational Status of Subsidiaries. Each
Subsidiary of the Borrower (if any) and each Significant Subsidiary of Reliant
Energy (a) is validly organized and existing as a corporation, partnership or
limited liability company and in good standing under the laws of the
jurisdiction of its organization, (b) is duly authorized or qualified to do
business in and is in good standing in each other jurisdiction in which the
conduct of its business or the ownership or leasing of its Property requires it
to be so authorized or qualified to do business, except where the failure to be
so validly organized and existing or duly authorized or qualified or in good
standing, individually or in the aggregate, would not have a Material Adverse
Effect; and (c) has the corporate, partnership or other requisite power and
authority to conduct its business as presently conducted, except where the
failure to have such corporate power and authority, individually or in the
aggregate, would not have a Material Adverse Effect.
SECTION 7.3. Corporate, Partnership or Other Powers. Each Loan
Party has the corporate, partnership or other requisite power to execute,
deliver and perform and comply with its obligations under this Agreement, any
Notes to which it is (or may become) a party and the other Loan Documents to
which it is a party. This Agreement has been, and each other Loan Document to
which any Loan Party is a party will be, duly executed and delivered on behalf
of such Loan Party.
SECTION 7.4. Authorization, No Conflict etc. The borrowings by
the Borrower contemplated by this Agreement, the execution and delivery by each
Loan Party of the Loan Documents to which it is a party and the performance by
each Loan Party of its obligations hereunder and thereunder have been duly
authorized by all requisite corporate, partnership or other requisite action on
the part of such Loan Party and do not and will not (i) violate any existing
law, any order to which such Loan Party is subject of any court or other
Governmental
47
Authority, or the articles of incorporation or bylaws or other organizational
documents (each as amended from time to time) of such Loan Party; (ii) violate,
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both, or any other condition) a default under, any indenture, loan
agreement or other agreement to which such Loan Party is a party or by which
such Loan Party or any of its Subsidiaries, or any of its respective Property,
is bound (except for such violations, conflicts, breaches or defaults that,
individually or in the aggregate, do not have or would not have a Material
Adverse Effect); or (iii) except as provided by the Security Documents, result
in, or require, the creation or imposition of any Lien upon any of the
Properties of any Loan Party.
SECTION 7.5. Governmental Approvals and Consents. Except for
(a) certain authorizations, approvals or actions by Governmental Authorities
required in connection with foreclosure under and as set forth in certain of the
Security Documents and (b) certain notice filings under the Uniform Commercial
Code required under the Security Documents which have been duly made and are in
full force and effect, no authorization or approval or action by, and no notice
to or filing with, any Governmental Authority is required for the due execution,
delivery and performance by each Loan Party of the Loan Documents to which it is
a party.
SECTION 7.6. Obligations Binding. This Agreement and the other
Loan Documents are the legal, valid and binding obligations of each Loan Party
that is a party thereto enforceable against it in accordance with their
respective terms (assuming due and valid authorization, execution and delivery
of this Agreement by any party other than the Loan Parties), except (a) as such
enforceability may be (i) limited by the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the enforcement of creditors' rights generally and (ii) subject to the
effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (b) the
availability of certain remedies under the Security Documents may require
certain authorizations, approvals or actions by Governmental Authorities as
indicated in Section 7.5.
SECTION 7.7. Use of Proceeds; Margin Stock. The Credit
Agreement will be used by the Borrower (i) to finance the refinancing of certain
obligations under, or for which credit support is provided by, the FinanceCo
Existing Credit Facility, (ii) to finance certain purchases of Reliant Energy
preference stock and (iii) to provide funds for the general purposes of the
Borrower, including the making of intercompany loans to, or securing Letters of
Credit for the benefit of, Affiliates to the extent permitted hereunder and by
applicable law and support for commercial paper issued by the Borrower. Neither
Reliant Energy nor the Borrower or any of its Subsidiaries is principally
engaged in, or has as one of its important activities, the business of extending
credit for the purpose of purchasing or carrying any Margin Stock, and no part
of the proceeds of any Loan made to the Borrower will be used for any purpose
that would violate the provisions of the margin regulations of the Board.
SECTION 7.8. Title to Properties. The issued and outstanding
Capital Stock owned by the Borrower of each of its Subsidiaries, and by Reliant
Energy of each of its Significant Subsidiaries, whether such stock is owned
directly or indirectly through one or more of its Subsidiaries, is owned free
and clear of any Lien other than Liens permitted under Sections 8.3(a) and
8.4(a). In addition, each of Reliant Energy and its Significant Subsidiaries has
good
48
title to the Properties reflected in the financial statements referred to in
Section 7.13 and in any financial statements delivered pursuant to Sections
8.1(a) or 8.2(a), except for (a) such Properties that have been disposed of
subsequent to the dates of the balance sheets included in such financial
statements and that are no longer used or useful in the conduct of the business
of Reliant Energy or of any of its Significant Subsidiaries and (b) such
Properties that have been disposed of in connection with the Unregco IPO
Transaction, the Restructuring or in the ordinary course of their respective
business or pursuant to Section 8.4(c).
SECTION 7.9. Investment Company Act; PUHC Act of 1935. Neither
Reliant Energy nor any Subsidiary of Reliant Energy is (i) required to register
as an "investment company" under, the Investment Company Act of 1940, as
amended, or (ii) subject to regulation as a public utility holding company under
PUHCA except Section 9(a)(2) thereof relating to the acquisition of securities
of other public utility companies or public utility holding companies.
SECTION 7.10. No Material Adverse Change. Since December 31,
2000, there has been no change in the consolidated financial position, results
of operations or business of Reliant Energy and its Consolidated Subsidiaries
that would have a Material Adverse Effect.
SECTION 7.11. Litigation. There is no litigation, action, suit
or other legal or governmental proceeding pending or, to the best knowledge of
the Borrower, threatened, at law or in equity, or before or by any arbitrator or
Governmental Authority (i) relating to the transactions under this Agreement or
(ii) in which there is a reasonable possibility of an adverse decision that is
likely to have a Material Adverse Effect.
SECTION 7.12. ERISA. Neither Reliant Energy nor any of its
Significant Subsidiaries has incurred any material liability or deficiency
arising out of or in connection with (i) any Reportable Event or "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) with respect to any Plan that has occurred during the five-year
period immediately preceding the date on which this representation is made or
deemed made, (ii) any failure of a Plan to comply with the applicable provisions
of ERISA and the Code, (iii) any termination of a Single Employer Plan, (iv) any
complete or partial withdrawal by the Borrower or any Commonly Controlled Entity
from any Multiemployer Plan, or (v) any Lien in favor of the PBGC or any Plan
that has arisen during the five-year period referred to in clause (i) above. In
addition, no Multiemployer Plan is in Reorganization or is Insolvent, where such
Reorganization or Insolvency, individually or when aggregated with the events
described in the first sentence of this Section 7.12, is likely to result in a
material liability or deficiency of Reliant Energy or any of its Significant
Subsidiaries. As used in this Section 7.12, any liability or deficiency shall be
deemed not to be "material" so long as the sum of all liabilities and
deficiencies referred to in this Section 7.12 at any one time outstanding,
individually and in the aggregate, is less than $25,000,000.
SECTION 7.13. Financial Statements. The audited consolidated
financial statements of Reliant Energy as of and for the year ended December 31,
2000 and the unaudited consolidated financial statements of Reliant Energy as of
and for the three months ended March 31, 2001, copies of which have been
delivered to the Banks, present fairly the consolidated financial condition and
results of operations of Reliant Energy and its Consolidated Subsidiaries
49
as of such dates and for the periods then ended, in conformity with GAAP and,
except as otherwise stated therein, consistently applied.
SECTION 7.14. Accuracy of Information. None of the documents
or written information (excluding financial projections and forecasts)
concerning the Loan Parties provided by or on behalf of the Borrower to the
Banks in connection with or pursuant to this Agreement contains as of the date
thereof or will contain as of the date thereof any untrue statement of a
material fact or omits or will omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading as of the date made or deemed made. The financial
projections and forecasts furnished to the Banks by or on behalf of the Borrower
with respect to the transactions contemplated under this Agreement were prepared
in good faith and on the basis of information and assumptions that the Borrower
believed to be reasonable as of the date of such information.
SECTION 7.15. No Violation. Neither Reliant Energy nor the
Borrower is in violation of any order, writ, injunction or decree of any court
or any order, regulation or demand of any Governmental Authority that,
individually or in the aggregate, reasonably could be expected to have a
Material Adverse Effect.
SECTION 7.16. Subsidiaries. Schedule 7.16 attached hereto sets
forth each Subsidiary of the Borrower as of the Closing Date and each
Significant Subsidiary of Reliant Energy as of the Closing Date.
SECTION 7.17. Solvency. On and as of the Closing Date, the
Borrowings of initial Loans on the Closing Date and the other transactions
contemplated hereby and thereby, the Borrower will be Solvent.
ARTICLE VIII
AFFIRMATIVE AND NEGATIVE COVENANTS
SECTION 8.1. Affirmative Covenants of the Borrower. The
Borrower covenants that, as long as any amount is owing hereunder or under any
other Loan Documents, any Letter of Credit is outstanding or any Bank shall have
any Commitment outstanding under this Agreement:
(a) Delivery of Financial Statements, Notices and
Certificates. The Borrower shall deliver to the Agent for distribution to the
Banks sufficient copies for each of the Banks of the following:
(i) as soon as practicable and in any event within 120 days
after the end of each fiscal year of the Borrower (beginning with
fiscal 2001), a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such fiscal year and the
related statements of consolidated income, partners' capital and cash
flows, prepared in conformity with GAAP and, except as otherwise stated
therein, consistently applied, setting forth in comparative form the
figures for the previous fiscal year, together
50
with a report thereon by independent certified public accountants of
nationally recognized standing selected by the Borrower;
(ii) as soon as practicable and in any event within 60 days
after the end of each of the first three quarters of each fiscal year
of the Borrower, beginning with the quarter ending June 30, 2001,
unaudited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries (without footnotes) consisting of at least
consolidated balance sheets as at the close of such quarter and
consolidated statements of income, partners' capital and cash flows for
such quarter and for the period from the beginning of such fiscal year
to the close of such quarter; such financial statements shall be
accompanied by a certificate of a Responsible Officer of the Borrower
to the effect that such unaudited financial statements present fairly
the consolidated financial condition and results of operations of the
Borrower or of the Borrower and its Consolidated Subsidiaries (as the
case may be) as of such date for the period then ending, and subject to
the limitation that no footnotes thereto have been prepared, have been
prepared in conformity with GAAP and, except as otherwise stated
therein, in a manner consistent with the financial statements referred
to in paragraph (a)(i) above;
(iii) with each set of statements to be delivered pursuant to
clauses (i) and (ii) above, a certificate in a form satisfactory to the
Agent, signed by a Responsible Officer of the Borrower stating that no
Default or Event of Default has occurred and is continuing or, if there
is any Default or Event of Default then continuing, describing it and
the steps, if any, being taken to cure it;
(iv) at least 15 days prior to the beginning of each fiscal
quarter (beginning with the fiscal quarter beginning October 1, 2001),
a certificate in a form satisfactory to the Agent, signed by a
Responsible Officer of the Borrower, setting forth (A) the Projected
Borrower Debt Service and Projected Available Cash for such fiscal
quarter of the Borrower, including calculations in reasonable detail
supporting such determinations, and (B) the aggregate amount available
to be drawn under committed credit facilities of Reliant Energy and any
of its Significant Subsidiaries and certified as based on good faith
assumptions believed to be reasonable at the date of such certificate;
(v) (A) within 10 days after the filing thereof, copies of all
reports, if any, under the Exchange Act (in each case other than
exhibits thereto and documents incorporated by reference therein) filed
by the Borrower with the SEC; (B) promptly, and in any event within
seven (7) days after a Responsible Officer of the Borrower becomes
aware of the occurrence thereof, written notice of (x) any Default or
Event of Default, (y) the institution of any litigation, action, suit
or other legal or governmental proceeding involving the Borrower or any
of its Subsidiaries as to which there is a reasonable possibility of an
adverse decision that is likely to have a Material Adverse Effect or
any final adverse determination in any litigation, action, suit or
other legal or governmental proceeding involving the Borrower or any of
its Subsidiaries that would have a Material Adverse Effect, or (z) the
incurrence by the Borrower or any Subsidiary of the Borrower of a
material liability or deficiency, or the existence of a reasonable
possibility of incurring a material liability or deficiency, arising
out of or in connection with (1) any Reportable Event with respect to
any Plan, (2) the failure to make any required
51
contribution to a Plan, (3) the creation of any Lien in favor of the
PBGC or a Plan, (4) any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (5) the
institution of proceedings or the taking of any other action by the
PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan; provided, that,
as used in this clause (z), any liability or deficiency shall be deemed
not to be "material" so long as the sum of all liabilities and
deficiencies referred to in this clause (z) at any one time
outstanding, individually and in the aggregate, is less than
$25,000,000; and (C) such other information relating to the Borrower or
its business, properties, condition and operations as the Agent (or any
Bank through the Agent) may reasonably request; and
(vi) as soon as available, and in any event within 30 days
after the beginning of each fiscal year of the Borrower (beginning with
fiscal 2001) to which such forecast relates, an annual forecast of
Projected Available Cash and Projected Borrower Debt Service for the
four quarters comprising such fiscal year.
(b) Use of Proceeds. The Borrower will use the proceeds of any
Loan made by the Banks to it for the purposes set forth in the first sentence of
Section 7.7 in accordance therewith and with Section 8.3(d).
(c) Existence; Laws. The Borrower will, and will cause each of
its Subsidiaries to, do or cause to be done all things necessary (i) to
preserve, renew and keep in full force and effect its legal existence and all
rights, licenses, permits and franchises and (ii) to comply with all laws and
regulations applicable to it, except in each case, where the failure to do so,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(d) Payment of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, comply with all of its material Contractual
Obligations and pay its obligations, including any tax liabilities, that, if not
paid, could result in a Material Adverse Effect before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to have a Material Adverse Effect.
(e) Maintenance of Properties. The Borrower will, and will
cause each of its Subsidiaries to, preserve and maintain all of its Property
that is material to the conduct of its business and keep the same in good
repair, working order and condition, and from time to time to make, or cause to
be made, such repairs, renewals and replacements thereto as in the good faith
judgment of the Borrower or such Subsidiary, as the case may be, are necessary
or proper so that the business carried on in connection therewith may be
properly conducted at all times, provided, however, that nothing in this Section
8.1(e) shall prevent (a) the Borrower or any of its Subsidiaries from selling,
abandoning or otherwise disposing of any Properties (including the Capital Stock
of any Subsidiary of the Borrower that is not a Significant Subsidiary of the
Borrower), the retention of which in the good faith judgment of the Borrower or
such Subsidiary
52
is inadvisable or unnecessary to the business of the Borrower or such
Subsidiary, as the case may be or (b) any other transaction that is expressly
permitted by the terms of any other provision of this Agreement.
(f) Books and Records; Access. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities as required by GAAP. The Borrower
will, and will cause each of its Subsidiaries to, at any reasonable time and
from time to time, permit up to six representatives of the Banks designated by
the Majority Banks, or representatives of the Agent, on not less than five
Business Days' notice, to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Borrower and
each of its Subsidiaries, and to discuss the general business affairs of the
Borrower and each of its Subsidiaries with their respective officers and
independent certified public accountants (provided the Borrower shall be given
the opportunity to have a representative present during such discussions);
subject, however, in all cases to the imposition of such conditions as the
Borrower and each of its Subsidiaries shall deem necessary based on reasonable
considerations of safety and security. Notwithstanding the foregoing, none of
the conditions precedent to the exercise of the right of access described in the
preceding sentence that relate to notice requirements or limitations on the
Persons permitted to exercise such right shall apply at any time when a Default
or an Event of Default shall have occurred and be continuing.
(g) Insurance. The Borrower will, and will cause each of its
Subsidiaries to, maintain insurance with responsible and reputable insurance
companies or associations, or, to the extent that the Borrower or such
Subsidiary deems it prudent to do so, through its own program of self-insurance,
in such amounts and covering such risks as is usually carried by companies
engaged in similar businesses, of comparable size and financial strength and
with comparable risks.
(h) Long Term Debt Rating. The Borrower will deliver to the
Agent notice of any change by a Rating Agency in the Long Term Debt Rating, and
the issuance by an additional Rating Agency of a Long Term Debt Rating, promptly
upon the effectiveness of such change or issuance.
SECTION 8.2. Affirmative Covenants of Reliant Energy. Reliant
Energy covenants that, as long as any amount is owing hereunder or under any
other Loan Documents, any Letter of Credit is outstanding or any Bank shall have
any Commitment outstanding under this Agreement:
(a) Delivery of Financial Statements. Reliant Energy shall
deliver to the Agent for distribution to the Banks sufficient copies for each of
the Banks of the following:
(i) as soon as practicable and in any event within 120 days
after the end of each fiscal year of Reliant Energy, a consolidated
balance sheet of Reliant Energy and its Consolidated Subsidiaries as of
the end of such fiscal year and the related statements of consolidated
income, retained earnings and cash flows prepared in conformity with
GAAP and, except as otherwise stated therein, consistently applied,
setting forth in
53
comparative form the figures for the previous fiscal year, together
with a report thereon by independent certified public accountants of
nationally recognized standing selected by Reliant Energy (which
requirement may be satisfied by delivering Reliant Energy's Annual
Report on Form 10-K with respect to such fiscal year as filed with the
SEC);
(ii) as soon as practicable and in any event within 60 days
after the end of each of the first three quarters of each fiscal year
of Reliant Energy, unaudited consolidated financial statements of
Reliant Energy and its Consolidated Subsidiaries (without footnotes)
consisting of at least consolidated balance sheets as at the close of
such quarter and consolidated statements of income, retained earnings
and cash flows for such quarter and for the period from the beginning
of such fiscal year to the close of such quarter (which requirement
may, with respect to the consolidated financial statements, be
satisfied by delivering Reliant Energy's Quarterly Report on Form 10-Q
with respect to such fiscal quarter as filed with the SEC); such
financial statements shall be accompanied by a certificate of a
Responsible Officer of Reliant Energy to the effect that such unaudited
consolidated financial statements present fairly the consolidated
financial condition and results of operations of Reliant Energy or of
Reliant Energy and its Consolidated Subsidiaries (as the case may be)
as of such date for the period then ending, and subject to the
limitation that no (or limited) footnotes thereto have been prepared,
have been prepared in conformity with GAAP and, except as otherwise
stated therein, in a manner consistent with the financial statements
referred to in paragraph (a)(i) above;
(iii) with each set of statements to be delivered pursuant to
clauses (i) and (ii) above, a certificate in a form satisfactory to the
Agent, signed by a Responsible Officer of Reliant Energy confirming
compliance with Section 8.4(b) and setting out in reasonable detail the
calculations necessary to demonstrate such compliance as at the date of
the most recent balance sheet included in such financial statements;
and
(iv) (A) within 10 days after the filing thereof, copies of
all periodic reports (other than (x) reports on Form 11-K or any
successor form and (y) Current Reports on Form 8-K that contain no
information other than exhibits filed therewith and (z) reports on Form
10-Q or 10-K or any successor forms) under the Exchange Act (in each
case other than exhibits thereto and documents incorporated by
reference therein) filed by Reliant Energy with the SEC; (B) promptly,
and in any event within seven (7) days after a Responsible Officer of
Reliant Energy becomes aware of the occurrence thereof, written notice
of the institution of any litigation, action, suit or other legal or
governmental proceeding involving Reliant Energy or any of its
Subsidiaries as to which there is a reasonable possibility of an
adverse decision that is likely to have a Material Adverse Effect or
any final adverse determination in any litigation, action, suit or
other legal or governmental proceeding involving Reliant Energy or any
of its Subsidiaries that would have a Material Adverse Effect, or (z)
the incurrence by Reliant Energy or any of its Significant Subsidiaries
of a material liability or deficiency, or the existence of a reasonable
possibility of incurring a material liability or deficiency, arising
out of or in connection with (1) any Reportable Event with respect to
any Plan, (2) the failure to make any required contribution to a Plan,
(3) the creation of any Lien in favor of the PBGC or a Plan, (4) any
withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (5) the institution of proceedings or the
taking
54
of any other action by the PBGC or Reliant Energy or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of,
any Plan; provided, that, as used in this clause (z), any liability or
deficiency shall be deemed not to be "material" so long as the sum of
all liabilities and deficiencies referred to in this clause (z) at any
one time outstanding, individually and in the aggregate, is less than
$50,000,000; (C) with each set of statements delivered pursuant to
Section 8.2(a)(i) a certificate by a Responsible Officer of Reliant
Energy identifying those Subsidiaries which, determined as of the date
of such financial statements, are Significant Subsidiaries; and (D)
such other information relating to Reliant Energy or its business,
properties, condition and operations as the Agent (or any Bank through
the Agent) may reasonably request.
Information required to be delivered pursuant to the
foregoing Sections 8.2(a)(i), (ii), and (iv)(A) shall be deemed to have
been delivered on the date on which Reliant Energy provides notice
(including notice by e-mail) to the Agent (which notice the Agent will
convey promptly to the Banks) that such information has been posted on
the SEC website on the Internet at xxx.xxx/xxxxx/xxxxxxxx.xxx or at
another website identified in such notice and accessible by the Banks
without charge; provided that (i) such notice may be included in a
certificate delivered pursuant to Section 8.2(a)(iii) and (ii) Reliant
Energy shall deliver paper copies of such information to the Agent, and
the Agent shall deliver paper copies of such information to any Bank
that requests such delivery.
(b) Use of Proceeds. To the extent that Reliant Energy,
directly or indirectly, receives the proceeds of any Loan made by the Banks to
the Borrower, Reliant Energy will use such proceeds for the purposes set forth
in the first sentence of Section 7.7 in accordance therewith and with Section
8.4(d).
(c) Existence; Laws. Reliant Energy will, and will cause each
of its Significant Subsidiaries to, do or cause to be done all things necessary
(i) to preserve, renew and keep in full force and effect its legal existence and
all rights, licenses, permits and franchises and (ii) to comply with all laws
and regulations applicable to it, except in each case, where the failure to do
so, individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(d) Maintenance of Properties. Reliant Energy will, and will
cause each of its Significant Subsidiaries to, preserve and maintain all of its
Property that is material to the conduct of its business and keep the same in
good repair, working order and condition, and from time to time to make, or
cause to be made, such repairs, renewals and replacements thereto as in the good
faith judgment of Reliant Energy or such Significant Subsidiary, as the case may
be, are necessary or proper so that the business carried on in connection
therewith may be properly conducted at all times; provided, however, that
nothing in this Section 8.2(d) shall prevent (a) Reliant Energy or any of its
Significant Subsidiaries from selling, abandoning or otherwise disposing of any
Properties (including the Capital Stock of any Subsidiary of Reliant Energy that
is not a Significant Subsidiary of the Borrower), the retention of which in the
good faith judgment of Reliant Energy or such Significant Subsidiary is
inadvisable or unnecessary to the
55
business of Reliant Energy or such Significant Subsidiary, as the case may be or
(b) any other transaction that is expressly permitted by the terms of any other
provision of this Agreement, including, but not limited to, any transaction
permitted under Section 8.4(g).
(e) Access. Reliant Energy will, and will cause each of its
Significant Subsidiaries to, at any reasonable time and from time to time,
permit up to six representatives of the Banks designated by the Majority Banks,
or representatives of the Agent, on not less than five Business Days' notice, to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, Reliant Energy and each of its Significant
Subsidiaries, and to discuss the general business affairs of Reliant Energy and
each of its Significant Subsidiaries with their respective officers and
independent certified public accountants (provided Reliant Energy shall be given
the opportunity to have a representative present during such discussions);
subject, however, in all cases to the imposition of such conditions as Reliant
Energy and each of its Significant Subsidiaries shall deem necessary based on
reasonable considerations of safety and security; provided further, however,
that neither Reliant Energy nor any of its Subsidiaries shall be required to
disclose to the Agent, any Bank or any agents or representatives thereof any
information which is the subject of attorney-client privilege or attorney
work-product privilege properly asserted by the applicable Person to prevent the
loss of such privilege in connection with such information or which is prevented
from disclosure pursuant to a confidentiality agreement with third parties.
Notwithstanding the foregoing, none of the conditions precedent to the exercise
of the right of access described in the preceding sentence that relate to notice
requirements or limitations on the Persons permitted to exercise such right
shall apply at any time when a Default or an Event of Default shall have
occurred and be continuing. The expense of any exercise by the Agent and the
Banks of their rights under this Section 8.2(e) shall not be incurred by
Borrower unless a Default has occurred and is continuing at the time of the
request or visit.
(f) Insurance. Reliant Energy will, and will cause each of its
Significant Subsidiaries to, maintain insurance with responsible and reputable
insurance companies or associations, or, to the extent that Reliant Energy or
such Significant Subsidiary deems it prudent to do so, through its own program
of self-insurance, in such amounts and covering such risks as is usually carried
by companies engaged in similar businesses, of comparable size and financial
strength and with comparable risks.
(g) Maintenance of Business Line. Reliant Energy will maintain
its fundamental business of providing services and products in the energy
market.
SECTION 8.3. Negative Covenants of the Borrower. The Borrower
hereby covenants that so long as any amount is owing hereunder or under any
other Loan Documents, any Letter of Credit is outstanding or any Bank shall have
any Commitment outstanding under this Agreement:
(a) Liens. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:
56
(i) Permitted Liens;
(ii) Liens created under the Security Documents;
(iii) Liens securing additional Indebtedness permitted under
Section 8.3(b) so long as such Liens cover only additional preference
stock (and all Capital Stock, instruments, certificates, rights or
securities that may at any time or from time to time be issued or
distributed to the Borrower in respect thereof) and related rights
(other than any such collateral covered by the Security Documents)
issued in respect of such additional Indebtedness and rights under the
support agreement related thereto, together with all general
intangibles, books and records, investment property, intercompany
notes, proceeds and products pertaining to the foregoing and all
collateral security and guarantees given by any Person with respect to
any of the foregoing and any Lien created in accordance with the
provisions of Section 8.3(e)(i)(C) (or the equivalent provisions of any
Permitted Facility), in each case pursuant to documentation containing
terms substantially corresponding to and consistent with the relevant
provisions of the Security Documents or any other agreement entered
into by the Borrower or any of its Subsidiaries in accordance with the
provisions of Section 8.3(e)(i)(C) (or the equivalent provisions of any
Permitted Facility), with the addition of intercreditor provisions; and
(iv) any extension, renewal or refunding of any Lien permitted
by clause (i), (ii) or (iii) above on the same assets or property
previously subject thereto; provided that no extension, renewal or
refunding of any such Lien shall increase the principal amount of any
Indebtedness secured thereby immediately prior to such extension,
renewal or refunding, unless such Indebtedness is permitted by Section
8.3(b).
(b) Indebtedness. The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, except:
(i) Indebtedness created hereunder;
(ii) Indebtedness constituting commercial paper issued by the
Borrower, provided that the aggregate amount thereof outstanding at any
time, when added to the aggregate principal amount of the Loans and L/C
Obligations then outstanding, does not exceed the -------- aggregate
amount of the Commitments then in effect and commitments under any
Permitted Facility;
(iii) Intercompany Indebtedness, provided that any such
Intercompany Indebtedness subordinated to the Borrower's obligations
hereunder shall be on terms and pursuant to a promissory note
substantially conforming to the Intercompany Note attached as Exhibit K
hereto; and
(iv) other Indebtedness of the Borrower under any Permitted
Facility (or the Guarantees of any Significant Subsidiary of the
Borrower provided pursuant to any Permitted Facility), provided that
immediately after giving effect to the incurrence of any such other
Indebtedness, Reliant Energy is in pro forma compliance with Section
8.4(b).
57
(c) Consolidation, Merger or Disposal of Assets. The Borrower
will not, and will not permit any of its Subsidiaries to, consolidate with, or
merge into or amalgamate with or into, any other Person; liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution); convey, sell,
transfer, lease or otherwise dispose of any of its Properties (including
pursuant to any sale-leaseback or similar arrangement); or except for issuances
of Capital Stock in connection with the formation or capitalization of the
Borrower, issue any Capital Stock, to any Person; provided, however, that
nothing contained in this Section 8.3(c) shall prohibit the following so long
as, in each case, immediately before and after giving effect to any such
consolidation, merger, amalgamation, dissolution or liquidation, or conveyance,
sale, transfer, lease or other disposition, no Event of Default or Default shall
have occurred and be continuing:
(i) a merger involving a Subsidiary of the Borrower (including
mergers to reincorporate or change the domicile of such Subsidiary) if
the Borrower or a Subsidiary of the Borrower is the surviving entity
thereof;
(ii) the liquidation, winding up or dissolution of a
Subsidiary of the Borrower if all of the Properties of such Subsidiary
are conveyed, transferred or distributed to the Borrower or a
Wholly-Owned Subsidiary of the Borrower;
(iii) the conveyance, sale, transfer or other disposal of all
or substantially all (or any lesser portion) of the Properties of any
Subsidiary of the Borrower to the Borrower or a Wholly-Owned Subsidiary
of the Borrower;
(iv) the issuance of Capital Stock by the Borrower to Reliant
Energy and by any Subsidiary of the Borrower to the Borrower or any
other Subsidiary of the Borrower, provided that any such Capital Stock
is pledged pursuant to the Reliant Energy Pledge and Collateral Agency
Agreement or the Pledge and Guarantee Agreement, as the case may be, in
accordance with the provisions thereof; and
(v) the sale of inventory and obsolete or surplus assets by
Subsidiaries of the Borrower in the ordinary course of business.
(d) Takeover Bids. (i) The Borrower will not, and will not
permit any of its Subsidiaries to, use the proceeds of any Loan made to the
Borrower to acquire control of any Person pursuant to a transaction that has not
been approved by the majority of the board of directors (or, for non-corporate
Persons, the analogous body) of the Person being acquired prior to the public
announcement thereof, unless the Borrower notifies each Bank of the material
terms thereof immediately following such public announcement (an "Acquisition
Notice").
(ii) In the event that any Bank provides written notice (an
"Objection Notice") to the Agent and the Borrower within ten days of
such Bank's receipt of an Acquisition Notice from the Borrower that
such Bank (for any reason and in its sole discretion, and without any
obligation to disclose such reason to the Borrower or the Agent)
objects to such transaction, the Borrower will, on the fifth Business
Day following its receipt of such Objection Notice (or on such earlier
date as the Borrower and such Bank shall agree), prepay in full the
Loans of such Bank and terminate its Commitments, with such prepayment
being accompanied by the payment of accrued interest thereon and any
other
58
amounts (including, without limitation, breakage indemnities) owing to
such Bank hereunder. Notwithstanding anything to the contrary contained
herein, any such repayment to an objecting Bank and any such Commitment
termination shall be for the account only of such Bank and need not be
applied ratably to the amounts owing to or Commitments of all Banks.
(e) Investments, Loans, Advances, Guarantees and Acquisitions;
Hedging Agreements. (i) The Borrower will not, and will not permit any of its
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a Wholly-Owned Subsidiary of the Borrower prior to
such merger) any Capital Stock, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit, or
make any Capital Expenditures, except:
(A) Permitted Investments;
(B) investments by the Borrower (i) existing on the date
hereof, after giving effect to consummation of the Mergers and the
transactions related thereto, in Reliant Energy Preference Stock issued
in accordance with the terms thereof, and (ii) additional investments
by the Borrower after the Closing Date in Reliant Energy Preference
Stock or preference stock (other than the Reliant Energy Preference
Stock) of Reliant Energy issued in connection with any Permitted
Facility and, in each case, issued to the Borrower in accordance with
the terms thereof;
(C) loans or advances (other than Money Fund Advances) made by
the Borrower to Reliant Energy or any Subsidiary of Reliant Energy,
provided that (i) in the event that any such loans or advances are
made, the Borrower shall enter into a pledge agreement in form and
substance substantially similar to the Pledge and Guarantee Agreement
and such loans or advances shall be evidenced by a promissory note
which shall be pledged thereunder for the ratable benefit of the Agent,
the collateral agent named therein, the Banks, the holders of any
commercial paper notes issued from time to time by the Borrower and the
banks and other financial institutions party to any Permitted Facility
and (ii) such loans or advances to any Subsidiary of Reliant Energy are
made in compliance with Section 8.4(g) (such loans and advances being
deemed to be Reliant Energy Investments for the purposes thereof);
(D) Money Fund Advances made by the Borrower;
(E) Guarantees constituting Indebtedness permitted by Section
8.3(b); and
(F) obligations of one or more of the Borrower's initial
partners to the Borrower in connection with the initial purchase of the
Borrower's Capital Stock by such partners.
(ii) The Borrower will not, and will not permit any of its
Subsidiaries to, enter into any Hedging Agreement, other than (A)
Hedging Agreements entered into in respect
59
of interest rate risk arising from the Loans or commercial paper
supported by this Agreement or loans under or commercial paper
supported by, and in accordance with, any Permitted Facility and (B)
other Hedging Agreements entered into in the ordinary course of
business to hedge or mitigate risks to which the Borrower or any of its
Subsidiaries is exposed in the conduct of its business or the
management of its liabilities.
(f) Restricted Payments. The Borrower will not, and will not
permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, provided that the foregoing
shall not restrict (i) any Restricted Payment made in connection with a use of
proceeds permitted under Section 7.7 or the purchase of preference stock
pursuant to any Permitted Facility or (ii) any Restricted Payments pursuant to
and in accordance with stock option plans or other benefit plans for management
or employees of the Borrower and its Subsidiaries.
(g) Transactions with Affiliates. The Borrower will not, and
will not permit any of its Subsidiaries to, sell, lease or otherwise transfer
any property or assets to, or purchase, lease or otherwise acquire any property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Borrower or such Subsidiary than could
be obtained on an arm's-length basis from unrelated third parties, (b)
transactions between or among the Borrower and its Wholly-Owned Subsidiaries not
involving any other Affiliate, (c) any transactions permitted under Section
8.3(e)(B), (C), (D) or (F) or Section 8.3(f) or the equivalent provisions under
any Permitted Facility and (d) the transactions contemplated by the Permitted
Facilities.
(h) Restrictive Agreements. The Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly, enter into, incur
or permit to exist any agreement or other arrangement that prohibits, restricts
or imposes any condition upon (a) the ability of the Borrower or any of its
Subsidiaries to create, incur or permit to exist any Lien upon any of its
property or assets, or (b) the ability of any of its Subsidiaries to pay
dividends or other distributions with respect to any shares of its Capital Stock
or to make or repay loans or advances to the Borrower or any other of its
Subsidiaries or to Guarantee Indebtedness of the Borrower or any other of its
Subsidiaries; provided that (i) the foregoing shall not apply to (A)
restrictions and conditions imposed by law or by any of the Loan Documents or
equivalent documents securing Indebtedness under any Permitted Facility, (B)
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary of the Borrower pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be sold and
such sale is permitted hereunder or under any Permitted Facility or (C)
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement or any Permitted Facility if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness, and (ii) clause (a) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof.
(i) Limitation on Optional Payments of Debt Instruments. The
Borrower will not make any optional payment or prepayment on or redemption or
purchase of any Indebtedness
60
other than (i) the Loans and the Indebtedness under any Permitted Facility and
(ii) any return or repayment of Money Fund Obligations owed by the Borrower.
(j) Limitation on Changes in Fiscal Year. The Borrower will
not permit the fiscal year of the Borrower to end on a day other than December
31.
(k) Changes in Lines of Business. The Borrower will not enter
into any business, either directly or through any of its Subsidiaries, except
for those businesses in which the Borrower and its Subsidiaries are engaged on
the date of this Agreement or that are directly related thereto.
SECTION 8.4. Negative Covenants of Reliant Energy. Reliant
Energy hereby covenants that so long as any amount is owing hereunder or under
any other Loan Documents, any Letter of Credit is outstanding or any Bank shall
have any Commitment outstanding under this Agreement:
(a) Certain Liens. Reliant Energy will not, and will not
permit any of its Significant Subsidiaries to, pledge, mortgage, hypothecate or
xxxxx x Xxxx upon, or permit any mortgage, pledge, security interest or other
Lien upon, the Capital Stock of any Significant Subsidiary of Reliant Energy now
or hereafter owned directly or indirectly by Reliant Energy; provided, however,
that this restriction shall neither apply to nor prevent the creation or
existence of:
(i) any existing Liens or Liens arising under the Security
Documents or any Permitted Facility;
(ii) any Lien upon any such Capital Stock (or the Capital
Stock of a holding company formed to acquire or hold such stock)
created at the time of the acquisition thereof or within one year after
such time to secure all or a portion of the purchase price for such
Capital Stock;
(iii) any Lien upon any such Capital Stock (or the Capital
Stock of a holding company formed to acquire or hold such stock)
existing thereon (A) at the time of the acquisition thereof or (B) at
the time at which such Subsidiary first becomes a Significant
Subsidiary, so long as such Lien was in existence prior to such time in
accordance with the provisions of this Agreement and was not incurred
in contemplation of such change of status;
(iv) any Lien upon any such Capital Stock of any Subsidiary of
Resources existing on the Closing Date or permitted to exist pursuant
to any indenture, loan agreement or other agreement to which Resources
or any of its Subsidiaries is a party;
(v) any Lien upon any such Capital Stock that is sold,
transferred or otherwise disposed of pursuant to and in accordance with
Section 8.4(c);
(vi) any Permitted Lien upon any such Capital Stock; or
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(vii) any extension, renewal or refunding of any Lien
permitted by clause (i), (ii), (iii), (iv), (v) or (vi) above on the
same Capital Stock (or the Capital Stock of a holding company formed to
acquire or hold such stock) previously subject thereto; provided that
no extension, renewal or refunding of any such Lien shall increase the
principal amount of any Indebtedness secured thereby immediately prior
to such extension, renewal or refunding, unless such Indebtedness is
permitted by Section 8.3(b) or Section 8.4(b).
(b) Financial Ratios. Reliant Energy will not permit the ratio
of Consolidated Indebtedness for Borrowed Money to Consolidated Capitalization
to exceed 0.65:1.00.
(c) Consolidation, Merger or Disposal of Assets. Reliant
Energy will not, and will not permit any of its Significant Subsidiaries to, (A)
consolidate with, or merge into or amalgamate with or into, any other Person;
(B) liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); or (C) convey, sell, transfer, lease or otherwise dispose of all
or substantially all of its Properties, or the Capital Stock of any Significant
Subsidiary of Reliant Energy, to any Person; provided, however, that nothing
contained in this Section 8.4(c) shall prohibit (1) a merger (other than any
involving Resources) involving Reliant Energy in which Reliant Energy is the
surviving entity thereof; (2) a merger involving a Significant Subsidiary of
Reliant Energy other than Resources or the Borrower (including mergers to
reincorporate or change the domicile of such Significant Subsidiary) if Reliant
Energy or a Wholly-Owned Significant Subsidiary of Reliant Energy is the
surviving entity thereof; (3) the liquidation, winding up or dissolution of a
Significant Subsidiary of Reliant Energy (other than Resources or the Borrower)
if all of the Properties of such Significant Subsidiary are conveyed,
transferred or distributed to Reliant Energy or a Wholly-Owned Significant
Subsidiary of Reliant Energy; or (4) the conveyance, sale, transfer or other
disposal of all or substantially all (or any lesser portion) of the Properties
of any Significant Subsidiary (other than Resources or the Borrower) to Reliant
Energy or a Wholly-Owned Significant Subsidiary of Reliant Energy (5) the Genco
Transaction, the Spin-off or any other step in the Restructuring or (6) the
transfer of assets in connection with the issuance of Securitization Securities;
provided, that, in each case, immediately before and after giving effect to any
such merger, dissolution or liquidation, or conveyance, sale, transfer, lease or
other disposition, no Default or Event of Default shall have occurred and be
continuing.
(d) Use of Proceeds; Other Agreements of the Borrower. Reliant
Energy will not, and will not permit any of its Significant Subsidiaries to, use
direct or indirect proceeds of any Loans for any purpose described in Section
8.3(d) other than in accordance with the provisions thereof.
(e) Restricted Payments. Reliant Energy will not declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
except that:
(i) Reliant Energy may (A) declare and pay dividends and make
payments in redemption with respect to its preferred and preference
stock (including Mandatory Payment Preferred Stock) and any Hybrid
Preferred Securities, at any time and (B) declare and pay dividends
with respect to its other Capital Stock at any time so long as
Projected Available Cash would exceed Projected Borrower Debt Service
for the fiscal
62
quarter of Reliant Energy in which the dividend is to be paid after
giving effect to (1) the payment of such dividend (computed for this
purpose as the proposed actual amount thereof, rather than the
Available Dividend Amount) and (2) any sources of cash available or
reasonably expected by Reliant Energy at the time of the proposed
dividend to be available during the fiscal quarter of Reliant Energy
then in effect; provided that during the period from the Closing Date
through September 30, 2001, Projected Available Cash shall be deemed to
exceed Projected Borrower Debt Service;
(ii) Reliant Energy may make Restricted Payments pursuant to
and in accordance with stock option plans or other benefit plans for
management or employees of Reliant Energy; and
(iii) at any time (x) at which no Default or Event of Default
has occurred and is continuing, (y) that Projected Available Cash
exceeds Projected Borrower Debt Service for the fiscal quarter of
Reliant Energy then in effect and (z) that the long-term senior secured
debt rating in effect for Reliant Energy is at least BBB by S&P or Baa2
by Xxxxx'x, Reliant Energy shall be permitted to repurchase its
outstanding common stock; provided that the requirements set forth in
clauses (x) and (y) above would be satisfied after giving effect to (1)
such repurchases and (2) any sources of cash available or reasonably
expected by Reliant Energy at the time of the proposed repurchase to be
available during the fiscal quarter of Reliant Energy then in effect;
and provided further that during the period from the Closing Date
through September 30, 2001, Projected Available Cash shall be deemed to
exceed Projected Borrower Debt Service.
(f) Agreements Restricting Dividends. Reliant Energy will not,
and will not permit any of its Significant Subsidiaries to enter into, incur or
permit to exist any agreement or other arrangement that explicitly prohibits or
restricts the payment by any of its Significant Subsidiaries of dividends or
other distributions with respect to any shares of its Capital Stock; provided,
that the foregoing shall not prohibit financial incurrence, maintenance and
similar covenants that indirectly have the practical effect of prohibiting or
restricting the ability of a Significant Subsidiary to make such payments or
provisions that require that a certain amount of capital be maintained, or
prohibit the return of capital to shareholders above certain dollar limits;
provided, further, that the foregoing shall not apply to (i) restrictions and
conditions imposed by law or by this Agreement or similar provisions in the
Permitted Facilities, (ii) restrictions and conditions existing on the date
hereof identified on Schedule 8.4(f), any amendment or modification thereof
(other than an amendment or modification expanding the scope of any such
restriction or condition and any restrictions or conditions) that (x) replace
restrictions or conditions existing on the date hereof and (y) are substantially
similar to such existing restriction or condition, (iii) restrictions existing
at the time at which any such Subsidiary first becomes a Significant Subsidiary,
so long as such restriction was in existence prior to such time in accordance
with the other provisions of this Agreement and was not agreed to or incurred in
contemplation of such change of status and (iv) any restrictions with respect to
a Significant Subsidiary imposed pursuant to an agreement that has been entered
into in connection with a disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary.
(g) Certain Investments, Loans, Advances, Guarantees and
Acquisitions. Reliant Energy will not purchase, or acquire (including pursuant
to any merger) any Capital
63
Stock, evidences of indebtedness or other securities of or other interest in
(including any option, warrant or other right to acquire any of the foregoing),
make any loans or advances to, Guarantee any obligations of, or make any
investment in or capital contribution to, any Subsidiary or any other Person
(any of the foregoing, a "Reliant Energy Investment"), in each case after the
Effective Date, except pursuant to the Loan Documents and except that,
notwithstanding the foregoing Reliant Energy and its Subsidiaries may make
Reliant Energy Investments if, after giving effect thereto, Reliant Energy would
be in compliance with its covenant contained in Section 8.4(b) on a pro forma
basis.
SECTION 8.5. Consent to Restructuring. The parties hereto
hereby agree that notwithstanding any provisions of the Loan Documents
(including, without limitation, Sections 8.2(d), 8.4(b), 8.4(c) or 8.4(e) of
this Agreement) that might otherwise prohibit the Restructuring, the
Restructuring (including, without limitation, the distribution of the remaining
80% of the common stock of Unregco to shareholders of Regco) shall be permitted
consistent with the definition thereof, and no Default or Event of Default shall
be deemed to have occurred under the Loan Documents solely as a result thereof.
In addition, notwithstanding the provisions of Section 8.4(b) and the default
provisions related thereto, if the Replacement Date has not occurred (A) as a
result of the Restructuring being partially completed, or (B) in the event that
the Restructuring is completed, as a result of the ratings condition set forth
in Section 6.01 of the Regco $2.5 Billion Credit Agreement not being satisfied,
and Reliant Energy is not in compliance with Section 8.4(b) at any time, such
non-compliance will not be a Default or Event of Default so long as Regco on a
pro forma or actual (as the case may be) consolidated basis would be in
compliance with the financial covenant set forth in Section 8.02(a) of the Regco
$2.5 Billion Credit Agreement at such time if such covenant were then
applicable, it being agreed that the foregoing deemed compliance shall be
available for only 90 days following the first date on which such test under
Section 8.4(b) is not satisfied, unless, in the case of the circumstances
described in only clause (B) above Regco becomes a party to the Support
Agreement or similar support arrangement, in each case as reasonably
satisfactory to the Agent, prior to the end of such 90 day period. Additionally,
Unregco and its Subsidiaries shall not be restricted by the representations,
covenants or events of default hereunder.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1. Events of Default. The occurrence of any of the
following events shall constitute an "Event of Default":
(a) Non-Payment of Principal, Interest and Facility Fee. The
Borrower fails to pay, in the manner provided in this Agreement, (i) any
principal or Reimbursement Obligation payable by it hereunder when due or (ii)
any interest payment or the Facility Fee payable by it hereunder within three
Business Days after its due date; or
(b) Non-Payment of Other Amounts. The Borrower fails to pay,
in the manner provided in this Agreement, any other amount (other than the
amounts set forth in
64
Section 9.1(a) above) payable by it hereunder within ten Business Days after
notice of such payment is received by the Borrower from the Agent; or
(c) Breach of Representation or Warranties. Any representation
or warranty by Reliant Energy or the Borrower in Article 7 of this Agreement or
in any other Loan Document or in any certificate, document or instrument
delivered under this Agreement shall have been incorrect in any material respect
when made or when deemed hereunder to have been made; or
(d) Breach of Certain Covenants. Any Loan Party fails to
perform or comply with any one or more of its obligations under Section
8.1(a)(v)(B)(x), Section 8.1(b), Section 8.2(b), Section 8.3(a), (b) (other than
clause (iii)), (c), (d), (e) (other than clause (C) or (D)), (f) or (i), Section
8.4(a), (b), (c), (e) or (g), Section 5.6 of the Pledge and Guarantee Agreement,
Section 5(a), (b) or (c) of the Reliant Energy Pledge and Collateral Agency
Agreement, Section 5(a), (b) or (c) of the Pledge and Collateral Agency
Agreement or Section 2 or 6 of the Support Agreement; or
(e) Breach of Other Covenants. Any Loan Party fails to perform
or comply with any one or more of its obligations under Section 8.3(g) or (h) or
Section 8.4(d) or (f) and such failure to perform or comply shall not have been
remedied within 10 days after the earlier of notice thereof to it by the Agent
or the Majority Banks or discovery thereof by a Responsible Officer of the
Borrower; or
(f) Breach of Other Obligations. Any Loan Party fails to
perform or comply with any one or more of its other obligations under the Loan
Documents (other than those set forth in Sections 9.1(a), (b), (c), (d) or (e)
above) and such failure to perform or comply shall not have been remedied within
30 days after the earlier of notice thereof to it by the Agent or the Majority
Banks or discovery thereof by a Responsible Officer of the Borrower; or
(g) Other Indebtedness. (i) The Borrower, any of its
Subsidiaries, FinanceCo GP, Reliant Energy or any of its Significant
Subsidiaries fails to pay when due (either at stated maturity or by acceleration
or otherwise but subject to applicable grace periods) any principal or interest
in respect of any Indebtedness for Borrowed Money, Secured Indebtedness or
Junior Subordinated Debt (other than Indebtedness of the Borrower under this
Agreement) if the aggregate principal amount of all such Indebtedness for which
such failure to pay shall have occurred and be continuing exceeds $50,000,000 or
(ii) any default, event or condition shall have occurred and be continuing with
respect to any Indebtedness for Borrowed Money, Secured Indebtedness or Junior
Subordinated Debt of the Borrower, any of its Subsidiaries, Reliant Energy or
any of its Significant Subsidiaries (other than Indebtedness of the Borrower
under this Agreement), the effect of which default, event or condition is to
cause, or to permit the holder thereof to cause, (A) such Indebtedness to become
due prior to its stated maturity or (B) in the case of any Guarantee of
Indebtedness for Borrowed Money of any Person or Junior Subordinated Debt by the
Borrower, any of its Subsidiaries, Reliant Energy or any of its Significant
Subsidiaries the primary obligation (as such term is defined in the definition
of "Guarantee" in Section 1.1) to which such Guarantee relates to become due
prior to its stated maturity, if the aggregate amount of all such Indebtedness
or primary obligations (as the case may be) that is or could be caused to be due
prior to its stated maturity exceeds $50,000,000; or
65
(h) Involuntary Bankruptcy, etc. (i) There shall be commenced
against the Borrower, any of its Subsidiaries, FinanceCo GP, Reliant Energy or
any of its Significant Subsidiaries any case, proceeding or other action (A)
seeking a decree or order for relief in respect of the Borrower, any of its
Subsidiaries, FinanceCo GP, Reliant Energy or any of its Significant
Subsidiaries under any applicable domestic or foreign bankruptcy, insolvency,
reorganization or other similar law, (B) seeking a decree or order adjudging the
Borrower, any of its Subsidiaries, FinanceCo GP, Reliant Energy or any of its
Significant Subsidiaries a bankrupt or insolvent, (C) except as permitted by
Sections 8.3(c)(ii) and 8.4(c)(3) seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other similar
relief of or in respect of the Borrower, any of its Subsidiaries, FinanceCo GP,
Reliant Energy or any of its Significant Subsidiaries or their respective debts
under any applicable domestic or foreign law or (D) seeking the appointment of a
custodian, receiver, conservator, liquidator, assignee, trustee, sequestrator or
other similar official of the Borrower, any of its Subsidiaries, FinanceCo GP,
Reliant Energy or any of its Significant Subsidiaries or of any substantial part
of their respective Properties, or the liquidation of their respective affairs,
and such petition is not dismissed within 60 days or (ii) a decree, order or
other judgment is entered in respect of any of the remedies, reliefs or other
matters for which any petition referred to in (i) above is presented or (iii)
there shall be commenced against the Borrower, any of its Subsidiaries,
FinanceCo GP, Reliant Energy or any of its Significant Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets that results in the entry of an order for any such relief that shall
not have been vacated, discharged or stayed or bonded pending appeal within 60
days from the entry thereof; or
(i) Voluntary Bankruptcy, etc. (i) The commencement by the
Borrower, any of its Subsidiaries, FinanceCo GP, Reliant Energy or any of its
Significant Subsidiaries of a voluntary case, proceeding or other action under
any applicable domestic or foreign bankruptcy, insolvency, reorganization or
other similar law (A) seeking to have an order of relief entered with respect to
it, (B) seeking to be adjudicated a bankrupt or insolvent, (C) except as
permitted by Sections 8.3(c)(ii) and 8.4(c)(3), seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other similar relief with respect to it or its debts under any applicable
domestic or foreign law or (D) seeking the appointment of or the taking
possession by a custodian, receiver, conservator, liquidator, assignee, trustee,
sequestrator or similar official of the Borrower, any of its Subsidiaries,
FinanceCo GP, Reliant Energy or any of its Significant Subsidiaries or of any
substantial part of their respective Properties; or (ii) the making by the
Borrower, any of its Subsidiaries, FinanceCo GP, Reliant Energy or any of its
Significant Subsidiaries of a general assignment for the benefit of creditors;
or (iii) the Borrower, any of its Subsidiaries, FinanceCo GP, Reliant Energy or
any of its Significant Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts
described in clause (i) or (ii) above or in Section 9.1(h); or (iv) the
admission by the Borrower, any of its Subsidiaries, FinanceCo GP, Reliant Energy
or any of its Significant Subsidiaries in writing of its inability to pay its
debts generally as they become due or the failure by the Borrower, any of its
Subsidiaries, FinanceCo GP, Reliant Energy or any of its Significant
Subsidiaries generally to pay its debts as such debts become due; or
(j) Enforcement Proceedings. A final judgment or decree for
the payment of money which, together with all other such judgments or decrees
against the Borrower, any of its
66
Subsidiaries, Reliant Energy or any of its Significant Subsidiaries then
outstanding and unsatisfied, exceeds $25,000,000 in aggregate amount shall be
rendered against the Borrower, any of its Subsidiaries, Reliant Energy or any of
its Significant Subsidiaries and the same shall remain undischarged for a period
of 60 days, during which the execution thereon shall not effectively be stayed,
released, bonded or vacated; or
(k) ERISA Events. (i) The Borrower, any of its Subsidiaries,
Reliant Energy or any of its Significant Subsidiaries shall incur any liability
arising out of (A) any "prohibited transaction" (as defined in Section 406 of
ERISA or Section 4975 of the Code) involving any Plan, (B) the occurrence of any
"accumulated funding deficiency" (as defined in Section 302 of ERISA) by a Plan,
whether or not waived, or any Lien in favor of the PBGC or a Plan on the assets
of the Borrower or any Commonly Controlled Entity, (C) the occurrence of a
Reportable Event with respect to, or the commencement of proceedings under
Section 4042 of ERISA to have a trustee appointed, or the appointment of a
trustee under Section 4042 of ERISA, to administer or to terminate any Single
Employer Plan, which Reportable Event, commencement of proceedings or
appointment of a trustee is likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (D) the termination of any Single Employer Plan
for purposes of Title IV of ERISA, (E) withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (F) the occurrence of any other event
or condition with respect to a Plan, and any of such item (A) through (F) above
results in or is likely to result in a material liability or deficiency of the
Borrower, any of its Subsidiaries, Reliant Energy or any of its Significant
Subsidiaries; provided, however, that for purposes of this Section 9.1(k), any
liability or deficiency of the Borrower, any of its Subsidiaries, Reliant Energy
or any of its Significant Subsidiaries shall be deemed not to be material so
long as the sum of all liabilities or deficiencies referred to in this Section
9.1(k) at any one time outstanding, individually and in the aggregate, is less
than $25,000,000, or (ii) the occurrence of any one or more of the events
specified in clauses (A) through (F) above if, individually or in the aggregate,
such event or events would have a Material Adverse Effect.
(l) Change in Control of Reliant Energy. A Change in Control
of Reliant Energy shall have occurred.
(m) Invalidity of Agreements. (i) Any of the Security
Documents or the Support Agreement shall cease, for any reason, to be in full
force and effect, or the Borrower or any other Loan Party that is a party to any
of the Security Documents or the Support Agreement shall deny the validity
thereof, or (ii) the Lien created by any of the Security Documents shall cease
to be enforceable and of the same effect and priority purported to be created
thereby.
SECTION 9.2. Cancellation/Acceleration. If at any time and for
any reason (whether within or beyond the control of any party to this
Agreement):
(a) either of the Events of Default specified in Section
9.1(h) or 9.1(i) occurs with respect to the Borrower, then automatically:
(i) the Commitments and the CAF Facility shall immediately be
cancelled; and
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(ii) all Loans made hereunder, all amounts of L/C Obligations
(whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required for draws
thereunder), all unpaid accrued interest or fees and any other sum
payable under this Agreement shall become immediately due and payable;
or
(b) any other Event of Default specified in Section 9.1 occurs
and, while such Event of Default is continuing, the Agent, having been so
instructed by the Majority Banks, by notice to the Borrower shall so declare
that:
(i) the Commitments and the CAF Facility shall immediately be
cancelled; and/or
(ii) either (A) all Loans made hereunder, all amounts of L/C
Obligations (whether or not the beneficiaries of the then outstanding
Letters of Credit shall have presented the documents required for draws
thereunder), all unpaid accrued interest or fees and any other sum
payable under this Agreement shall become immediately due and payable
or (B) all Loans made hereunder, all amounts of L/C Obligations
(whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required for draws
thereunder), all unpaid accrued interest or fees and any other sum
payable under this Agreement shall become due and payable at any time
thereafter immediately on demand by the Agent (acting on the
instructions of the Majority Banks).
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit in
a cash collateral account opened by the Agent cash or cash equivalents in an
amount equal to the aggregate then undrawn and unexpired face amount of such
Letters of Credit. The Borrower hereby grants to the Agent, for the benefit of
the Issuing Bank and the L/C Participants, a security interest in such cash
collateral to secure all obligations of the Borrower under this Agreement and
the other Loan Documents. Amounts held in such cash collateral account shall be
applied by the Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the Notes. After all such
Letters of Credit shall have expired or been fully drawn upon, all Reimbursement
Obligations shall have been satisfied and all other obligations of the Borrower
hereunder and under the Notes shall have been paid in full, the balance, if any,
in such cash collateral account shall be returned to the Borrower. The Borrower
shall execute and deliver to the Agent, for the account of the Issuing Bank and
the L/C Participants, such further documents and instruments as the Agent may
request to evidence the creation and perfection of the within security interest
in such cash collateral account.
Except as expressly provided above in this Section 9.2,
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration and all other notices of any kind whatsoever are hereby expressly
waived by the Borrower.
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ARTICLE X
THE AGENT
SECTION 10.1. Appointment. Each Bank hereby irrevocably
designates and appoints The Chase Manhattan Bank as the Agent of such Bank under
this Agreement and the other Loan Documents and as Collateral Agent under the
Security Documents and the Support Agreement, and each such Bank irrevocably
authorizes The Chase Manhattan Bank, as the Agent for such Bank, to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
For purposes of this Article X, "Agent" shall mean The Chase Manhattan Bank as
Agent hereunder and as Collateral Agent under the Security Documents and the
Support Agreement. Notwithstanding any provision to the contrary elsewhere in
this Agreement, (a) the Agent shall not have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Bank, and no implied covenants, functions, responsibilities, duties, obligations
or liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent and (b) the Arranger shall not have any duties
or responsibilities hereunder, or any fiduciary relationship with any Bank, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Arranger.
SECTION 10.2. Delegation of Duties. The Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
SECTION 10.3. Exculpatory Provisions. Neither the Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (b) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any Note or any other Loan
Document or for any failure of the Borrower to perform its obligations hereunder
or thereunder. The Agent shall not be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
SECTION 10.4. Reliance by Agent. The Agent shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate,
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affidavit, letter, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the Agent. The
Agent may deem and treat the payee of any Note or any loan account in the
Register as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Banks as it deems appropriate
or it shall first be indemnified to its satisfaction by the Banks against any
and all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Majority Banks, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Banks and all future holders of the amounts owing
hereunder.
SECTION 10.5. Notice of Default. The Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Bank or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give notice thereof to the Banks. The
Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Majority Banks; provided that unless and
until the Agent shall have received such directions, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Banks.
SECTION 10.6. Non-Reliance on Agent and Other Banks. Each Bank
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent that it has, independently and without reliance upon the
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Bank also represents that it will,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Banks by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Bank with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower that may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
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SECTION 10.7. Indemnification. The Banks agree to indemnify
the Agent and the Arranger, in their respective capacities as such (to the
extent not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to their respective applicable Pro Rata
Percentages in effect on the date on which indemnification is sought under this
Section 10.7, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever that may at any time (including, without limitation, at
any time following the payment of all amounts owing hereunder and the
termination of the Commitments) be imposed on, incurred by or asserted against
the Agent or the Arranger, as the case may be, in any way relating to or arising
out of this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent or
the Arranger, as the case may be, under or in connection with any of the
foregoing; provided that no Bank shall be liable for the payment of any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Agent's or the Arranger's, as the case may be, gross negligence or willful
misconduct. The agreements in this Section 10.7 shall survive the payment of all
amounts payable hereunder.
SECTION 10.8. Agent in Its Individual Capacity. The Agent and
its Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Borrower as though the Agent were not the Agent
hereunder and under the other Loan Documents. With respect to its Loans made or
renewed by it, any Letter of Credit issued or participated in by it and its
Commitment hereunder, the Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Bank and may exercise the same as
though it were not the Agent, and the terms "Bank" and "Banks" shall include the
Agent in its individual capacity.
SECTION 10.9. Successor Agent. The Agent may resign as Agent
upon 30 days' notice to the Banks and the Borrower. If the Agent shall resign as
Agent under this Agreement and the other Loan Documents, then the Majority Banks
shall appoint from among the Banks a successor agent for the Banks, which
successor agent shall be approved by the Borrower, whereupon such successor
agent shall succeed to the rights, powers and duties of the Agent, and the term
"Agent" shall mean such successor agent effective upon such appointment and
approval, and the former Agent's rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement or any holders of any amounts
payable hereunder; provided, that if an Event of Default has occurred and is
continuing, no consent of the Borrower shall be required. If a successor Agent
shall not have been so appointed within said 30-day period, the Agent may then
appoint a successor Agent who shall be a financial institution engaged or
licensed to conduct banking business under the laws of the United States with an
office in New York City and that has total assets in excess of $500,000,000 and
who shall serve as Agent until such time, if any, as an Agent shall have been
appointed as provided above. After any retiring Agent's resignation or removal
as Agent, the provisions of this Article X shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement and the other Loan Documents.
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Notwithstanding anything to the contrary contained herein,
no Bank identified as an "Agent" or "Arranger" other than the Agent, shall have
the right, power, obligation, liability, responsibility or duty under this
Agreement or any Loan Document other than those applicable to all Banks as such.
Without limiting the forgoing, none of the Banks so identified shall have or be
deemed to have any fiduciary relationship with any Bank. Each Bank acknowledges
that it has not relied, and will not rely, on any of the Banks so identified in
deciding to enter into this Agreement or not taking action hereunder.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Amendments and Waivers. Neither this Agreement,
any Note, any other Loan Document, nor any terms hereof or thereof may be
amended, supplemented or modified except pursuant to an instrument or
instruments in writing executed in accordance with the provisions of this
Section 11.1. The Majority Banks may, or, with the written consent of the
Majority Banks, the Agent may, from time to time, (a) enter into with the
Borrower written amendments, supplements or modifications hereto and to any
Notes and the other Loan Documents for the purpose of adding any provisions to
this Agreement or any Notes or the other Loan Documents or changing in any
manner the rights of the Banks or of the Borrower hereunder or thereunder or (b)
waive, on such terms and conditions as the Majority Banks or the Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement (including the conditions to effectiveness of the Regco $2.5 Billion
Credit Agreement) or any Notes or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall:
(i) reduce the amount or extend the scheduled date of maturity
of any Note or Loan, or reduce the stated rate of any interest or fee
payable hereunder or extend the scheduled date of any payment thereof
or increase the amount or extend the expiration date of any Bank's
Commitments, in each case without the consent of each Bank directly
affected thereby;
(ii) amend, modify or waive any provision of this Section or
reduce the percentage specified in the definition of Majority Banks, or
consent to the assignment or transfer by the Borrower of any of its
respective rights and obligations under this Agreement and the other
Loan Documents, in each case without the written consent of all the
Banks;
(iii) amend, modify or waive any provision of Article X
without the written consent of the then Agent;
(iv) amend, modify or waive any provision of Section 2.4 in a
manner that adversely affects any Issuing Bank without the written
consent of the then Issuing Bank or Issuing Banks; or
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(v) except as specifically provided in any of the Loan
Documents, including, but not limited to, Section 8.7(b) of the Pledge
and Guarantee Agreement, release any portion of the Collateral (as
defined in the respective Security Documents) that represents a
material portion of all such Collateral, taken as a whole, without the
consent of the Supermajority Banks.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Banks and shall be binding upon the Borrower, the Banks,
the Issuing Bank or Issuing Banks, the Agent and all future holders of the
amounts payable hereunder. In the case of any waiver, the Borrower, the Banks,
the Issuing Bank or Issuing Banks, and the Agent shall be restored to their
former position and rights hereunder and under any outstanding Notes and any
other Loan Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing, but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
SECTION 11.2. Notices. Unless otherwise expressly provided
herein, all notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy) and shall be
deemed to have been duly given or made when delivered by hand, or three days
after being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, addressed as follows in the case of the Borrower and the
Agent, and as set forth in Schedule 1.1 in the case of the other parties hereto,
or to such other address as may be hereafter notified by the respective parties
hereto and any future holders of the amounts payable hereunder:
The Borrower or Reliant 0000 Xxxxxxxxx
Xxxxxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxx
Assistant Treasurer
Telecopy: 000-000-0000
With a copy to: Xxxx Xxxxxxxx
Treasurer
Telecopy: 000-000-0000
The Agent: Chase Loan and Agency Services Group
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
With a copy to: XX Xxxxxx Chase
000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
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Attention: Xxxxxx Xxxxxxx
Telecopy: 000-000-0000
provided that any notice, request or demand to or upon the Agent or the Banks
pursuant to Sections 2.2, 3.2, 4.3, 4.7, 5.2 and 5.5 shall not be effective
until received.
SECTION 11.3. No Waiver, Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Agent or any Bank, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
SECTION 11.4. Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the other Loan Documents.
SECTION 11.5. Payment of Expenses and Taxes. The Borrower
agrees (a) to pay or reimburse the Agent and its Affiliates for all its
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation, negotiation and execution of, and any amendment,
supplement or modification to, this Agreement and any Notes and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of Xxxxxxx Xxxxxxx & Xxxxxxxx, special counsel to the Agent (but
excluding the fees or expenses of any other counsel), (b) to pay or reimburse
each Bank and the Agent for all its costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Agreement, any
Notes, the other Loan Documents and any such other documents, including, without
limitation, the reasonable fees and disbursements of the several special counsel
to the Banks and the Agent, (c) without duplication of any other provision
contained in this Agreement or any Notes, to pay, indemnify, and hold each Bank
and the Agent harmless from, any and all recording and filing fees, if any, and
any and all liabilities (for which each Bank has not been otherwise reimbursed
under this Agreement) with respect to, or resulting from any delay in paying,
stamp, excise and other taxes (except for taxes covered by Sections 5.1 and
5.3), if any, that may be payable or determined to be payable in connection with
the execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, any Notes, the
other Loan Documents and any such other documents, and (d) without duplication
of any other provision contained in this Agreement or any Notes, to pay,
indemnify, and hold each Bank and the Agent harmless from and against, any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, any Notes, the other Loan Documents and any
such other documents and the
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transactions contemplated hereby (including, without limitation, and the use, or
proposed use, of proceeds of the Loans) (all the foregoing in this clause (d),
collectively, the "indemnified liabilities"); provided, that the Borrower shall
have no obligation hereunder to the Agent or any Bank with respect to
indemnified liabilities arising from the gross negligence or willful misconduct
of the Agent or any such Bank; and provided, further, that it is the intention
of the Borrower to indemnify the Agent and the Banks against the consequences of
their own negligence. The agreements in this Section 11.5 shall survive
repayment of all amounts payable hereunder.
SECTION 11.6. Effectiveness; Successors and Assigns;
Participations; Assignments. (a) This Agreement shall become effective on the
first date on which all of the conditions precedent set forth in Section 6.1
have been satisfied (which date shall occur on or before July 13, 2001) (such
date on which all such conditions are satisfied and such initial Loans are made,
the "Closing Date").
(b) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to one
or more banks or other financial institutions (a "Participant") participating
interests in any Loan owing to such Bank, any Commitment of such Bank or any
other interest of such Bank hereunder and under the other Loan Documents. In the
event of any such sale by a Bank of a participating interest to a Participant,
such Bank's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Bank shall remain solely responsible for
the performance thereof, such Bank shall remain the holder of any such Loan and
Commitment or other interest for all purposes under this Agreement and the other
Loan Documents, the Borrower and the Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement and the other Loan Documents and except with respect to the
matters set forth in Section 11.1, the amendment of which requires the consent
of all of the Banks, the participation agreement between the selling Bank and
the Participant may not restrict such Bank's voting rights hereunder. The
Borrower agrees that each Participant, to the extent provided in its
participation, shall be entitled to the benefits of Sections 4.5, 4.8, 5.1 and
5.3 with respect to its participation in the Commitments and the Loans
outstanding from time to time; provided, that (i) no Participant shall be
entitled to receive any greater amount pursuant to such Sections than the
selling Bank would have been entitled to receive in respect of the amount of the
participation sold by such selling Bank to such Participant had no such sale
occurred and (ii) each such sale of participating interests shall be to a
"qualified purchaser", as such term is defined under Section 2(a)(51)(A) of the
Investment Company Act of 1940. Except as expressly provided in this Section
11.6(b), no Participant shall be a third-party beneficiary of or have any rights
under this Agreement or under any of the other Loan Documents.
(c) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to any
Affiliate of such Bank that is a bank (a "Bank Affiliate") and, with the consent
of the Borrower and the Agent (which in each case shall not be unreasonably
withheld and, in the case of the Borrower, shall not be required if an Event of
Default exists), to one or more additional banks ("Purchasing Banks") all or any
part of its rights and obligations under this Agreement pursuant to a Committed
Loan Assignment and Acceptance ("Committed Loan Assignment and Acceptance"),
substantially in the form of Exhibit J, executed by such Purchasing Bank and
such transferor Bank (and, in the case of a
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Purchasing Bank that is not a Bank Affiliate, by the Borrower and the Agent) and
delivered to the Agent for its acceptance and recording in the Register;
provided, that (i) each such sale shall be of a uniform, and not a varying,
percentage of all rights and obligations under and in respect of the Commitment
of such Bank, (ii) each such sale that is not to an existing Bank hereunder
shall be in an aggregate amount of not less than $10,000,000 (or such lesser
amount that represents the entire Commitment of such Bank), (iii) after giving
effect to such sale, the transferor Bank shall (to the extent that it continues
to have any Commitment hereunder) have a Commitment of not less than $10,000,000
and (iv) at any time other than any time that an Event of Default has occurred
and is continuing, each such assignment shall be to a "qualified purchaser", as
such term is defined under Section 2(a)(51)(A) of the Investment Company Act of
1940. Upon such execution, delivery, acceptance and recording, from and after
the effective date determined pursuant to such Committed Loan Assignment and
Acceptance (the "Transfer Effective Date"), (i) the Purchasing Bank thereunder
shall be a party hereto and, to the extent provided in such Committed Loan
Assignment and Acceptance, have the rights and obligations of a Bank hereunder
with the Commitments as set forth therein and (ii) the transferor Bank
thereunder shall, to the extent provided in such Committed Loan Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of a Committed Loan Assignment and Acceptance covering all or the remaining
portion of a transferor Bank's rights and obligations under this Agreement, such
transferor Bank shall cease to be a party hereto). Such Committed Loan
Assignment and Acceptance 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 Pro Rata 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. On or prior to the
Transfer Effective Date determined pursuant to such Committed Loan Assignment
and Acceptance, (i) appropriate entries shall be made in the accounts of the
transferor Bank and the Register evidencing such assignment and releasing the
Borrower from any and all obligations to the transferor Bank in respect of the
assigned Loan or Loans and (ii) appropriate entries evidencing the assigned Loan
or Loans shall be made in the accounts of the Purchasing Bank and the Register
as required by Section 4.1 hereof. In the event that any Notes have been issued
in respect of the assigned Loan or Loans, such Notes shall be marked "cancelled"
and surrendered by the transferor Bank to the Agent for return to the Borrower.
(d) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time assign to
one or more banks or other financial institutions (a "CAF Loan Assignee") any
CAF Loan owing to such Bank pursuant to a CAF Loan Assignment and Acceptance
executed by the assignor Bank and the CAF Loan Assignee. Upon such execution,
from and after the date of such CAF Loan Assignment and Acceptance, the CAF Loan
Assignee shall, to the extent of the assignment provided for in such CAF Loan
Assignment and Acceptance, be deemed to have the same rights and benefits of
payment and enforcement with respect to such CAF Loan and the same obligation to
share and rights of setoff pursuant to Sections 5.4 and 11.7 as it would have
had if it were a Bank hereunder; provided that (i) unless such CAF Loan
Assignment and Acceptance shall otherwise specify and a copy of such CAF Loan
Assignment and Acceptance shall have been delivered to the Agent for its
acceptance and recording in the Register in accordance with Section 11.6(e), the
assignor thereunder shall act as collection agent for the CAF Loan Assignee
thereunder, and the Agent shall pay all amounts received from the Borrower that
are allocable to the assigned CAF Loan directly to such assignor without any
further liability to such CAF Loan Assignee and (ii) at any
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time other than any time an Event of Default has occurred and is continuing,
each such assignment shall be to a "qualified purchaser", as such term is
defined under Section 2(a)(51)(A) of the Investment Company Act of 1940. A CAF
Loan Assignee under a CAF Loan Assignment and Acceptance shall not, by virtue of
such CAF Loan Assignment and Acceptance, become a party to this Agreement or
have any rights to consent to or refrain from consenting to any amendment,
supplement, waiver or other modification of any provision of this Agreement or
any related document; provided that (i) the assignor under such CAF Loan
Assignment and Acceptance and such CAF Loan Assignee may, in their discretion,
agree between themselves upon the manner in which such assignor will exercise
its rights under this Agreement and any related document and (ii) if a copy of
such CAF Loan Assignment and Acceptance shall have been delivered to the Agent
for its acceptance and recording in the Register in accordance with Section
11.6(e), neither the principal amount of, the interest rate on, nor the maturity
date of any CAF Loan assigned to the CAF Loan Assignee thereunder will be
reduced or postponed, as the case may be, without the written consent of such
CAF Loan Assignee. If a CAF Loan Assignee has caused a CAF Loan Assignment and
Acceptance to be recorded in the Register in accordance with Section 11.6(e),
such CAF Loan Assignee may thereafter, in the ordinary course of its business
and in accordance with applicable law, assign such CAF Loan to any Bank, to any
Affiliate or Subsidiary of such CAF Loan Assignee or to any other financial
institution that has total assets in excess of $1,000,000,000 and that in the
ordinary course of its business extends credit of the type represented by such
CAF Loan, and the foregoing provisions of this Section 11.6(d) shall apply,
mutatis mutandis, to any such assignment by a CAF Loan Assignee. Except in
accordance with the preceding sentence, CAF Loans may not be further assigned by
a CAF Loan Assignee, subject to any legal or regulatory requirement that the CAF
Loan Assignee's assets must remain under its control.
(e) The Agent shall maintain at its address referred to in
Section 11.2 a copy of each CAF Loan Assignment and Acceptance and each
Committed Loan Assignment and Acceptance delivered to it and a register (the
"Register") for the recordation of (i) the names and addresses of the Banks and
the Commitments of, and principal amount of the Loans owing to, each Bank from
time to time and (ii) with respect to each CAF Loan Assignment and Acceptance
delivered to the Agent, the name and address of the CAF Loan Assignee and the
principal amount of each CAF Loan owing to such CAF Loan Assignee. To the extent
permitted by applicable law, the entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Agent and the Banks may
(and, in the case of any Loan or other obligation hereunder that is not
evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Loan or other obligations hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan or other
obligation hereunder which is not evidenced by a Note shall be effective only
upon appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower or any Bank or any
CAF Loan Assignee at any reasonable time and from time to time upon reasonable
prior notice.
(f) Upon its receipt of a Committed Loan Assignment and
Acceptance executed by a transferor Bank and Purchasing Bank (and, in the case
of a Purchasing Bank that is not then a Bank Affiliate, by the Borrower and the
Agent) together with payment to the Agent of a registration and processing fee
of (i) $2,000 with respect to (and payable by) any Purchasing Bank that is not
already a Bank or a Bank Affiliate and (ii) $750 with respect to any Purchasing
77
Bank that is already a Bank or a Bank Affiliate (which fee shall be for the
account of the Borrower only in the case of an assignment made pursuant to
Section 5.6(b) hereof), the Agent shall promptly accept such Committed Loan
Assignment and Acceptance on the Transfer Effective Date determined pursuant
thereto, record the information contained therein in the Register and give
notice of such acceptance and recordation to the Banks and the Borrower. Upon
its receipt of a CAF Loan Assignment and Acceptance executed by an assignor Bank
and a CAF Loan Assignee, together with payment to the Agent of a registration
and processing fee of $750 (which fee shall not be for the account of the
Borrower), the Agent shall promptly accept such CAF Loan Assignment and
Acceptance, record the information contained therein in the Register and give
notice of such acceptance and recordation to the assignor Bank, the CAF Loan
Assignee and the Borrower.
(g) Each of the Banks and the Agent, agrees to exercise its
best efforts to keep, and to cause any third party recipient of the information
described in this Section 11.6(g) to keep, any information delivered or made
available by Borrower to it (including any information obtained pursuant to
Section 8.1 and 8.2), confidential from anyone other than Persons employed or
retained by such party who are or are expected to become engaged in evaluating,
approving, structuring or administering the transactions contemplated hereunder;
provided that nothing shall prevent any Bank or the Agent from disclosing such
information (i) to any other Bank or any Affiliate of any Bank, (ii) pursuant to
subpoena or upon the order of any court or administrative agency, (iii) upon the
request or demand of any Governmental Authority having jurisdiction over such
Bank, (iv) if such information has been publicly disclosed, (v) to the extent
reasonably required in connection with any litigation to which either the Agent,
any Bank, Borrower or their respective Affiliates may be a party, (vi) to the
extent reasonably required in connection with the exercise of any remedy
hereunder, (vii) to the Agent's or such Bank's legal counsel, independent
auditors and other professional advisors, or (viii) to any actual or proposed
Participant, Purchasing Bank or CAF Loan Assignee (each, a "Transferee") that
has agreed in writing to be bound by the provisions of this Section 11.6(g).
Unless prohibited from doing so by applicable law, in the event that any Bank or
the Agent is legally requested or required to disclose any confidential
information pursuant to clause (ii), (iii), or (v) of this Section 11.6(g), such
party shall promptly notify Borrower of such request or requirement prior to
disclosure so that Borrower may seek an appropriate protective order and/or
waive compliance with the terms of this Agreement. If, however, in the opinion
of counsel for such party, such party is nonetheless, in the absence of such
order or waiver, compelled to disclose such confidential information or
otherwise stand liable for contempt or suffer possible censure or other penalty
or liability, then such party may disclose such confidential information without
liability to Borrower; provided, however, that such party will use its best
efforts to minimize the disclosure of such information. Subject to the
exceptions above to disclosure of information, each of the Banks and the Agent
agrees that it shall not publish, publicize, or otherwise make public any
information regarding this Agreement or the transactions contemplated hereby
without the written consent of Borrower, in its sole discretion.
(h) If, pursuant to this Section, any interest in this
Agreement is transferred to any Transferee that is organized under the laws of
any jurisdiction other than the United States or any state thereof, the
transferor Bank shall cause such Transferee, concurrently with the effectiveness
of such transfer, (i) to represent to the transferor Bank (for the benefit of
the transferor Bank, the Agent and the Borrower) that under applicable law and
treaties no taxes will
78
be required to be withheld by the Agent, the Borrower or the transferor Bank
with respect to any payments to be made to such Transferee in respect of the
Loans, (ii) to furnish to the transferor Bank (and, in the case of any
Purchasing Bank or CAF Loan Assignee registered in the Register, the Agent and
the Borrower) either U.S. Internal Revenue Service Form W-8BEN or U.S. Internal
Revenue Service Form W-8ECI (wherein such Transferee claims entitlement to
complete exemption from U.S. federal withholding tax on all interest payments
hereunder) and (iii) to agree (for the benefit of the transferor Bank, the Agent
and the Borrower) to provide the transferor Bank (and, in the case of any
Purchasing Bank or CAF Loan Assignee registered in the Register, the Agent and
the Borrower) a new Form W-8BEN or Form W-8ECI upon the expiration or
obsolescence of any previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and amendments duly
executed and completed by such Transferee, and to comply from time to time with
all applicable U.S. laws and regulations with regard to such withholding tax
exemption.
(i) Nothing herein shall prohibit any Bank from pledging or
assigning all or any portion of its Loans hereunder to any Federal Reserve Bank
in accordance with applicable law. The Borrower hereby agrees that, upon the
request of any Bank at any time and from time to time after the Borrower has
made its initial Borrowing hereunder, the Borrower will provide to such Bank (at
the Borrower's own expense) a promissory note, substantially in the form of
Exhibit C (a "Note"), evidencing the Loans owing to such Bank.
SECTION 11.7. Set-off. In addition to any rights and remedies
of the Banks provided by law, each Bank shall have the right, without prior
notice to the Borrower, any such notice being expressly waived by the Borrower
to the extent permitted by applicable law, upon any amount becoming due and
payable by the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Bank or any branch or
agency thereof to or for the credit or the account of the Borrower. Each Bank
agrees promptly to notify the Borrower and the Agent after any such set-off and
application made by such Bank, provided that the failure to give such notice
shall not affect the validity of such set-off and application.
SECTION 11.8. Counterparts. This Agreement may be executed by
one or more of the parties to this Agreement on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be maintained with the Borrower and the Agent.
SECTION 11.9. Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
79
SECTION 11.10. Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrower, Reliant Energy, the Agent and
the Banks with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agent or any Bank relative to
the subject matter hereof not expressly set forth or referred to herein or in
the other Loan Documents.
SECTION 11.11. GOVERNING LAW. (a) THIS AGREEMENT AND ANY NOTES
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW
OF THE STATE OF NEW YORK.
(b) Notwithstanding anything in Section 11.11(a) to the
contrary, nothing in this Agreement or in any Note or any Loan Documents shall
be deemed to constitute a waiver of any rights which any Bank may have under
applicable federal law relating to the amount of interest which any Bank may
contract for, take, receive or charge in respect of any Loans, including any
right to take, receive, reserve and charge interest at the rate allowed by the
laws of the state where such Bank is located. To the extent that Texas law is
applicable to the determination of the Highest Lawful Rate, the Banks and the
Borrower agree that (i) if Chapter 303 of the Texas Finance Code, as amended, is
applicable to such determination, the weekly rate ceiling (formerly known as the
indicated (weekly) rate ceiling in Article 1.4, Subtitle 1, Title 79, of the
Revised Civil Statutes of Texas, as amended) as computed from time to time shall
apply; provided that, to the extent permitted by such Article, the Agent may
from time to time by notice to the Borrower revise the election of such interest
rate ceiling as such ceiling affects the then current or future balances of the
Loans; and (ii) the provisions of Chapter 346 of the Texas Finance Code, as
amended (formerly found in Chapter 15 of Subtitle 3, Title 79, of the Revised
Civil Statutes of Texas, 1925, as amended) shall not apply to this Agreement or
any Note issued hereunder.
SECTION 11.12. Submission To Jurisdiction, Waivers. Each of
the Borrower and Reliant Energy hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 11.2 or at such other address of
which the Agent shall have been notified pursuant thereto;
80
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent permitted by applicable law,
any right it may have to claim or recover in any legal action or proceeding
referred to in this Section 11.12 any special, exemplary, punitive or
consequential damages.
SECTION 11.13. Acknowledgements. The Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement, any Notes and the other Loan
Documents;
(b) neither the Agent nor any Bank has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Agent and the Banks, on the one hand, and the Borrower, on the other hand,
in connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture exists among the Banks or among the
Borrower and the Banks.
SECTION 11.14. Limitation on Agreements. All agreements
between the Borrower, the Agent or any Bank, whether now existing or hereafter
arising and whether written or oral, are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of demand being made in
respect of an amount due under any Loan Document or otherwise, shall the amount
paid, or agreed to be paid, to the Agent or any Bank for the use, forbearance,
or detention of the money to be loaned under this Agreement, any Notes or any
other Loan Document or otherwise or for the payment or performance of any
covenant or obligation contained herein or in any other Loan Document exceed the
Highest Lawful Rate. If, as a result of any circumstances whatsoever,
fulfillment of any provision hereof or of any of such documents, at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed by applicable usury law, then, ipso facto, the obligation
to be fulfilled shall be reduced to the limit of such validity, and if, from any
such circumstance, the Agent or any Bank shall ever receive interest or anything
that might be deemed interest under applicable law that would exceed the Highest
Lawful Rate, such amount that would be excessive interest shall be applied to
the reduction of the principal amount owing on account of such Bank's Loans or
the amounts owing on other obligations of the Borrower to the Agent or any Bank
under any Loan Document and not to the payment of interest, or if such excessive
interest exceeds the unpaid principal balance of such Bank's Loans and the
amounts owing on other obligations of the Borrower to the Agent or any Bank
under any Loan Document, as the case may be, such excess shall be refunded to
the Borrower. All sums paid or agreed to be paid to the Agent or any Bank for
the use, forbearance or detention of the indebtedness of the Borrower to the
Agent or any Bank shall, to the fullest extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of such
indebtedness until payment in full of the principal (including the period of any
renewal or extension thereof) so that the interest on account of such
indebtedness shall not exceed the Highest Lawful Rate. Notwithstanding anything
to the contrary contained in any Loan Document, it is understood and agreed that
if at
81
any time the rate of interest that accrues on the outstanding principal balance
of any Loan shall exceed the Highest Lawful Rate, the rate of interest that
accrues on the outstanding principal balance of any Note shall be limited to the
Highest Lawful Rate, but any subsequent reductions in the rate of interest that
accrues on the outstanding principal balance of any Loan shall not reduce the
rate of interest that accrues on the outstanding principal balance of any Note
below the Highest Lawful Rate until the total amount of interest accrued on the
outstanding principal balance of any Loan equals the amount of interest that
would have accrued if such interest rate had at all times been in effect. The
terms and provisions of this Section 11.14 shall control and supersede every
other provision of all Loan Documents.
SECTION 11.15. Non-recourse to Limited Partner, General
Partner. By execution hereof, each Bank, the Arranger and the Agent agree that,
notwithstanding statutory and/or common law liability of a general partner for
the debts and obligations of a partnership, no general or limited partner of the
Borrower, solely by virtue of its legal status as such, shall be liable for the
obligations of the Borrower under this Agreement, any Note or any Loan Document,
it being expressly agreed that except as specifically provided and set forth
pursuant to the Security Documents and the Support Agreement, all such debts and
obligations shall be satisfied only from assets of the Borrower. Notwithstanding
the foregoing, nothing in this Section 11.15 shall be deemed to relieve the
Borrower or any other Loan Party of its obligations under this Agreement or to
prejudice the rights or remedies of the Agent and the Lenders hereunder or under
any Loan Documents.
SECTION 11.16. Notice Under Section 26.02 of the Texas
Business and Commerce Code. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
SECTION 11.17. Removal of Bank. Notwithstanding anything
herein to the contrary, Borrower may, at any time in its sole discretion, remove
any Bank upon 15 Business Days' written notice to such Bank and the Agent (the
contents of which notice shall be promptly communicated by the Agent to each
other Bank), such removal to be effective at the expiration of such 15-day
notice period; provided, however, that no Bank may be removed hereunder at a
time when an Event of Default shall have occurred and be continuing. Each notice
by Borrower under this Section 11.17 shall constitute a representation by
Borrower that the removal described in such notice is permitted under this
Section 11.17. Concurrently with such removal, Borrower shall pay to such
removed Bank all amounts owing to such Bank hereunder and under any Notes in
immediately available funds. Upon full and final payment hereunder of all
amounts owing to such removed Bank, such Bank shall make appropriate entries in
its accounts evidencing payment of all Loans hereunder and releasing Borrower
from all obligations owing to the removed Bank in respect of the Loans hereunder
and surrender to the Agent for return to Borrower any Notes of Borrower then
held by it. Effective immediately upon such full and final payment, such removed
Bank will not be considered to be a "Bank" for purposes of this Agreement except
for the purposes of any provision hereof that by its terms survives the
termination of this Agreement and the payment of the amounts payable hereunder.
Effective immediately upon such removal, the Commitments of such removed Bank
shall immediately
82
terminate. Such removal will not, however, affect the Commitments of any other
Bank hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers or agents thereunto duly
authorized, as of the date first above written.
HOUSTON INDUSTRIES
FINANCECO LP
By: HOUSTON INDUSTRIES
FINANCECO GP, LLC,
its General Partner
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Title: Assistant Treasurer
RELIANT ENERGY, INCORPORATED
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Title: Assistant Treasurer
THE CHASE MANHATTAN BANK, as
Agent and as a Bank
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Title: Vice President
Signature Page
Senior A Credit Agreement
ABN AMRO Bank N.V., as a Bank
By: /s/ Xxxx Xxxxxxxxx
-----------------------------------
Title: Senior Vice President
By: /s/ Xxxxxxx Babaya
-----------------------------------
Title: Vice President
Signature Page
Senior A Credit Agreement
BANK OF AMERICA, N.A., as a Bank
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Title: Vice President
Signature Page
Senior A Credit Agreement
BANK ONE, NA, as a Bank
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Title: Director, Capital Markets
Signature Page
Senior A Credit Agreement
BARCLAYS BANK PLC, as a Bank
By: /s/ Sydney X. Xxxxxx
-----------------------------------
Title: Director
Signature Page
Senior A Credit Agreement
BAYERISCHE LANDESBANK
GIROZENTRALE, as a Bank
By: /s/ Xxxxxxxx Xxxxxxxx
-----------------------------------
Title: Senior Vice President
By: /s/ Xxxx X'Xxxxxxxx
-----------------------------------
Title: Vice President
Signature Page
Senior A Credit Agreement
CITIBANK, N.A., as a Bank
By: /s/ Xxxxxx Xxx
-----------------------------------
Title: Managing Director
Signature Page
Senior A Credit Agreement
COBANK., as a Bank
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Title: Assistant Corporate Secretary
Signature Page
Senior A Credit Agreement
COMMERZBANK AG, as Syndication Agent
and as a Bank
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Title: SVP & Manager
By: /s/ X. Xxxxx Xxxxxxx
-----------------------------------
Title: Vice President
Signature Page
Senior A Credit Agreement
CREDIT LYONNAIS NEW YORK BRANCH,
as a Bank
By: /s/ Phillippe Soustra
-----------------------------------
Title: Executive Vice President
Signature Page
Senior A Credit Agreement
CREDIT SUISSE FIRST BOSTON, as a Bank
By: /s Xxxxxx X. Xxxxxx
-----------------------------------
Title: Vice President
By: /s Xxx Xxxxx
-----------------------------------
Title: Director
Signature Page
Senior A Credit Agreement
DEUTSCHE BANK AG, as a Bank
By: /s/ Xxxx Xxxxxxxx
-----------------------------------
Title: Vice President
By: /s/ Xxxx-Xxxxxxxxx Narberhaus
-----------------------------------
Title: Vice President
Signature Page
Senior A Credit Agreement
FIRST UNION NATIONAL BANK, as a Bank
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Title: Vice President
Signature Page
Senior A Credit Agreement
KBC BANK, as a Bank
By: /s/ Xxxx-Xxxxxx Diels
-----------------------------------
Title: First Vice President
By: /s/ Xxxx Xxxxxx
-----------------------------------
Title: Assistant Vice President
Signature Page
Senior A Credit Agreement
MELLON BANK N.A., as a Bank
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Title: Vice President
Signature Page
Senior A Credit Agreement
MIZUHO GROUP, as Documentation Agent
and as a Bank
INDUSTRIAL BANK OF JAPAN, as a Bank
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Title: Senior Vice President,
Houston Office
FUJI BANK LTD., as a Bank
By: /s/ Xxxx Xxxxx
-----------------------------------
Name:
Title:
DAI-ICHI KANGYO, as a Bank
By: /s/ Azlan X. Xxxxx
-----------------------------------
Name:
Title:
Signature Page
Senior A Credit Agreement
ROYAL BANK OF CANADA, as a Bank
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Title: Vice President
Signature Page
Senior A Credit Agreement
THE BANK OF NOVA SCOTIA, as a Bank
By: /s/ F.C.H. Xxxxx
-----------------------------------
Title: Senior Manager Loan Operations
Signature Page
Senior A Credit Agreement
THE BANK OF TOKYO-MITSUBISHI, LTD.,
as a Bank
By: /s/ Xxx Fort
-----------------------------------
Title: Vice President
By: /s/ Xxxx Xxxxxx
-----------------------------------
Title: Vice President & Manager
Signature Page
Senior A Credit Agreement
THE NORTHERN TRUST COMPANY, as a Bank
By: /s/ Xxxxxx X Xxxxxxx
-----------------------------------
Title: Vice President
Signature Page
Senior A Credit Agreement
SUMITOMO MITSUI BANKING
CORPORATION, as a Bank
By: /s/ Tamihiro Kawauchi
-----------------------------------
Title: Joint General Manager
Signature Page
Senior A Credit Agreement
TOKAI BANK, as a Bank
By: /s/ Xxxxxxxx Xxxxxxxx
-----------------------------------
Title: Assistant General Manager
Signature Page
Senior A Credit Agreement
TORONTO DOMINION (TEXAS) INC.,
as a Bank
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Title: Vice President
Signature Page
Senior A Credit Agreement
UBS WARBURG, as a Bank
By: /s/ Xxxxxxx X. Saint
-----------------------------------
Title: Associate Director Banking
Products Services, US
By: /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Title: Associate Director Banking
Products Services, US
Signature Page
Senior A Credit Agreement
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
as a Bank
By: /s/ Xxxxxx X. Xxxxx III
-----------------------------------
Title: Associate Director
By: /s/ Xxxxxxx Xxxxxxxxxx
-----------------------------------
Title: Manager
