CREDIT AGREEMENT
dated as of
October 28, 2003
among
COGENTRIX DELAWARE HOLDINGS, INC.,
as Borrower,
COGENTRIX ENERGY, INC.,
THE LENDERS NAMED HEREIN,
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED,
as Issuer,
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
and
CITIGROUP GLOBAL MARKETS INC.,
as Joint Lead Arrangers,
CITICORP USA, INC.,
as Collateral Agent
and
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED,
as Administrative Agent
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS.................................................................................. 1
SECTION 1.01 DEFINITIONS............................................................................ 1
SECTION 1.02 ACCOUNTING TERMS AND DETERMINATIONS.................................................... 29
SECTION 1.03 TYPES OF BORROWING..................................................................... 29
SECTION 1.04 COMPUTATION OF TIME PERIODS............................................................ 29
SECTION 1.05 CERTAIN TERMS.......................................................................... 30
ARTICLE II LOANS AND LETTERS OF CREDIT................................................................. 30
SECTION 2.01 REVOLVING CREDIT LOANS................................................................. 30
SECTION 2.02 TRANCHE A TERM LOANS................................................................... 30
SECTION 2.03 TRANCHE B TERM LOANS................................................................... 30
SECTION 2.04 TRANCHE C TERM LOANS................................................................... 31
SECTION 2.05 TRANCHE D TERM LOANS................................................................... 31
SECTION 2.06 NOTICE OF BORROWING.................................................................... 31
SECTION 2.07 LETTERS OF CREDIT...................................................................... 32
SECTION 2.08 EVIDENCE OF DEBT....................................................................... 39
SECTION 2.09 INTEREST RATES......................................................................... 40
SECTION 2.10 METHOD OF ELECTING INTEREST RATES...................................................... 41
SECTION 2.11 FEES................................................................................... 42
SECTION 2.12 TERMINATION AND REDUCTION OF COMMITMENTS............................................... 43
SECTION 2.13 REPAYMENT OF THE LOANS................................................................. 44
SECTION 2.14 OPTIONAL PREPAYMENT OF THE LOANS....................................................... 44
SECTION 2.15 EXTRAORDINARY MANDATORY PREPAYMENTS OF THE LOANS AND PROVISION OF CASH COLLATERAL...... 45
SECTION 2.16 ORDINARY MANDATORY PREPAYMENTS OF THE LOANS AND PROVISION OF CASH COLLATERAL........... 47
SECTION 2.17 GENERAL PROVISIONS AS TO PAYMENTS...................................................... 48
SECTION 2.18 FUNDING LOSSES......................................................................... 49
SECTION 2.19 COMPUTATION OF INTEREST AND FEES....................................................... 49
SECTION 2.20 REVOLVING CREDIT LETTER OF CREDIT CASH COLLATERAL ACCOUNT.............................. 49
SECTION 2.21 TRANCHE D TERM LETTER OF CREDIT CASH COLLATERAL ACCOUNT................................ 50
ARTICLE III CONDITIONS................................................................................. 52
SECTION 3.01 CONDITIONS PRECEDENT TO INITIAL LOANS AND LETTER OF CREDIT............................. 52
SECTION 3.02 ADDITIONAL CONDITIONS PRECEDENT TO INITIAL LOANS AND LETTER OF CREDIT.................. 54
SECTION 3.03 CONDITIONS PRECEDENT TO EACH LOAN AND LETTER OF CREDIT................................. 55
ARTICLE IV REPRESENTATIONS AND WARRANTIES.............................................................. 56
SECTION 4.01 CORPORATE EXISTENCE; COMPLIANCE WITH LAW............................................... 56
SECTION 4.02 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS................................ 56
SECTION 4.03 TAXES.................................................................................. 57
SECTION 4.04 FINANCIAL MATTERS...................................................................... 57
SECTION 4.05 FULL DISCLOSURE........................................................................ 58
SECTION 4.06 LITIGATION............................................................................. 58
SECTION 4.07 MARGIN REGULATIONS..................................................................... 58
SECTION 4.08 OWNERSHIP OF BORROWER; SUBSIDIARIES.................................................... 59
SECTION 4.09 COMPLIANCE WITH ERISA.................................................................. 60
SECTION 4.10 ENVIRONMENTAL MATTERS.................................................................. 60
SECTION 4.11 LIENS.................................................................................. 61
SECTION 4.12 INVESTMENT COMPANY; PUBLIC UTILITY HOLDING COMPANY ACT................................. 61
SECTION 4.13 NO BURDENSOME RESTRICTIONS; NO DEFAULTS................................................ 62
SECTION 4.14 INSURANCE.............................................................................. 62
SECTION 4.15 LABOR MATTERS.......................................................................... 62
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SECTION 4.16 FORCE MAJEURE.......................................................................... 63
SECTION 4.17 USE OF PROCEEDS; TERMINATION OF EXISTING CEI CREDIT AGREEMENT.......................... 63
SECTION 4.18 INTELLECTUAL PROPERTY.................................................................. 64
SECTION 4.19 TITLE.................................................................................. 65
ARTICLE V FINANCIAL COVENANTS.......................................................................... 66
SECTION 5.01 CASH FLOW COVERAGE RATIO............................................................... 66
SECTION 5.02 LEVERAGE RATIO......................................................................... 66
SECTION 5.03 TANGIBLE NET WORTH..................................................................... 66
ARTICLE VI AFFIRMATIVE COVENANTS....................................................................... 67
SECTION 6.01 FINANCIAL STATEMENTS AND OTHER INFORMATION............................................. 67
SECTION 6.02 PAYMENT OF OBLIGATIONS................................................................. 71
SECTION 6.03 NEW REAL ESTATE OR PERSONAL PROPERTY; OTHER ASSETS..................................... 72
SECTION 6.04 MAINTENANCE OF PROPERTY; INSURANCE..................................................... 72
SECTION 6.05 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE....................................... 73
SECTION 6.06 COMPLIANCE WITH LAWS................................................................... 73
SECTION 6.07 FISCAL YEAR............................................................................ 73
SECTION 6.08 INSPECTION OF PROPERTY, BOOKS AND RECORDS.............................................. 73
SECTION 6.09 CASH MANAGEMENT........................................................................ 74
SECTION 6.10 TERMINATION OF GUARANTY AND PLEDGE RESTRICTIONS........................................ 76
SECTION 6.11 FURTHER ASSURANCES..................................................................... 77
ARTICLE VII NEGATIVE COVENANTS......................................................................... 77
SECTION 7.01 LIMITATION ON DEBT..................................................................... 77
SECTION 7.02 LIENS.................................................................................. 79
SECTION 7.03 RESTRICTED PAYMENTS.................................................................... 81
SECTION 7.04 CONSOLIDATIONS AND MERGERS............................................................. 82
SECTION 7.05 TRANSACTION WITH AFFILIATES............................................................ 82
SECTION 7.06 INVESTMENTS IN OTHER PERSONS........................................................... 83
SECTION 7.07 ASSET SALES............................................................................ 84
SECTION 7.08 LEASE OBLIGATIONS...................................................................... 84
SECTION 7.09 ISSUANCES AND TRANSFERS OF EQUITY INTERESTS............................................ 85
SECTION 7.10 OFF BALANCE SHEET OBLIGATIONS; HEDGE AGREEMENT OBLIGATIONS............................. 85
SECTION 7.11 CHANGE IN NATURE OF BUSINESS........................................................... 85
SECTION 7.12 MODIFICATION OF CONTRACTUAL OBLIGATIONS................................................ 85
SECTION 7.13 ACCOUNTING CHANGES..................................................................... 86
SECTION 7.14 CANCELLATION OF INDEBTEDNESS OWED TO IT................................................ 86
SECTION 7.15 NEW SUBSIDIARIES....................................................................... 86
SECTION 7.16 LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES......... 86
SECTION 7.17 LIMITATIONS ON ACCUMULATION OF FUNDS BY SUBSIDIARIES................................... 87
SECTION 7.18 CAPITAL STRUCTURE...................................................................... 87
SECTION 7.19 USE OF PROCEEDS........................................................................ 87
SECTION 7.20 BANK ACCOUNTS.......................................................................... 87
ARTICLE VIII EVENTS OF DEFAULT......................................................................... 88
SECTION 8.01 EVENTS OF DEFAULT...................................................................... 88
SECTION 8.02 NOTICE OF DEFAULT...................................................................... 92
SECTION 8.03 CASH COLLATERAL........................................................................ 93
ARTICLE IX THE ADMINISTRATIVE AGENT AND COLLATERAL AGENT............................................... 93
SECTION 9.01 APPOINTMENT AND AUTHORIZATION.......................................................... 93
SECTION 9.02 ADMINISTRATIVE AGENT, COLLATERAL AGENT AND AFFILIATES.................................. 93
SECTION 9.03 CONSULTATION WITH EXPERTS.............................................................. 94
SECTION 9.04 LIABILITY OF ADMINISTRATIVE AGENT AND COLLATERAL AGENT................................. 94
SECTION 9.05 INDEMNIFICATION........................................................................ 95
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SECTION 9.06 CREDIT DECISION........................................................................ 95
SECTION 9.07 SUCCESSOR ADMINISTRATIVE AGENT OR COLLATERAL AGENT..................................... 95
SECTION 9.08 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.......................................... 96
SECTION 9.09 ADMINISTRATIVE AGENTS' AND COLLATERAL AGENT'S FEES..................................... 97
ARTICLE X CHANGE IN CIRCUMSTANCES...................................................................... 97
SECTION 10.01 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR.............................. 97
SECTION 10.02 ILLEGALITY............................................................................ 97
SECTION 10.03 INCREASED COST AND REDUCED RETURN..................................................... 98
SECTION 10.04 TAXES................................................................................. 99
SECTION 10.05 BASE RATE LOANS SUBSTITUTED FOR AFFECTED EURO-DOLLAR LOANS............................ 102
ARTICLE XI MISCELLANEOUS............................................................................... 102
SECTION 11.01 NOTICES............................................................................... 102
SECTION 11.02 NO WAIVERS............................................................................ 103
SECTION 11.03 EXPENSES; INDEMNIFICATION............................................................. 103
SECTION 11.04 SET-OFF; PRO RATA SHARING OF PAYMENTS................................................. 106
SECTION 11.05 AMENDMENTS AND WAIVERS................................................................ 107
SECTION 11.06 SUCCESSORS AND ASSIGNS................................................................ 108
SECTION 11.07 NO MARGIN STOCK....................................................................... 110
SECTION 11.08 GOVERNING LAW; SUBMISSION TO JURISDICTION............................................. 111
SECTION 11.09 RELEASE OF COLLATERAL................................................................. 111
SECTION 11.10 COUNTERPARTS; INTEGRATION; EFFECTIVENESS.............................................. 111
SECTION 11.11 CONFIDENTIALITY....................................................................... 000
XXXXXXX 00.00 XXXXXXXXXX XX LIABILITY............................................................... 112
SECTION 11.13 WAIVER OF JURY TRIAL.................................................................. 113
SECTION 11.14 SEVERABILITY; MODIFICATION TO CONFORM TO LAW.......................................... 113
SECTION 11.15 JUDGMENT CURRENCY..................................................................... 113
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SCHEDULES AND EXHIBITS
Schedule I - Revolving Credit Commitments
Schedule II - Tranche A Term Commitments
Schedule III - Tranche B Term Commitments
Schedule IV - Tranche C Term Commitments
Schedule V - Tranche D Term Commitments
Schedule VI - Subsidiary Guarantors
Schedule VII - Subsidiary Pledgors
Schedule VIII - Subsidiary Grantors
Schedule IX - Pledged Subsidiaries
Schedule X - [Intentionally Omitted]
Schedule XI - Tranche D Term Letters of Credit
Schedule XII - Existing Project Financing Debt
Schedule XIII - Inactive Subsidiaries
Schedule 4.04(b) - Financial Matters
Schedule 4.04(e) - Solvent Members of CEI Group
Schedule 4.06 - Litigation
Schedule 4.08(a) - Agreements Regarding Capital Stock
Schedule 4.08(b) - Subsidiaries
Schedule 4.10 - Environmental Matters
Schedule 4.19 - Title
Schedule 7.01 - Existing Debt
Schedule 7.08 - Lease Obligations
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Tranche A Term Note
Exhibit A-3 - Form of Tranche B Term Note
Exhibit A-4 - From of Tranche C Term Note
Exhibit A-5 - Form of Tranche D Term Note
Exhibit B-1 - Form of Opinion of Xxxxx & Xxx Xxxxx PLLC,
North Carolina counsel for the Credit Parties
Exhibit B-2 - Form of Opinion of Xxxxxxx & Xxxxxxxx LLP,
special New York counsel for the Credit Parties
Exhibit C-1 - Form of CEI Secured Guaranty
Exhibit C-2 - Form of CEI Unsecured Guaranty
Exhibit C-3 - Form of Subsidiary Guaranty
Exhibit D - Form of Security Agreement
Exhibit E-1 - Form of Citibank Account Control Agreement
Exhibit E-2 - Form of Wachovia Account Control Agreement
Exhibit F-1 - Form of Charlotte Mortgage
Exhibit F-2 - Form of Portsmouth Mortgage
Exhibit G - Form of Assignment and Assumption Agreement
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CREDIT AGREEMENT
CREDIT AGREEMENT dated as of October 28, 2003 among Cogentrix
Delaware Holdings, Inc., a Delaware corporation (the "BORROWER"), Cogentrix
Energy, Inc., a North Carolina corporation ("CEI"), the Lenders named herein,
Australia and New Zealand Banking Group Limited ("ANZ") as issuer of Letters of
Credit (as hereinafter defined) (in such capacity, the "ISSUER"), ANZ and
Citigroup Global Markets Inc., as Joint Lead Arrangers, Citicorp USA, Inc.
("CUSA"), as Collateral Agent (in such capacity, the "COLLATERAL AGENT"), and
ANZ, as Administrative Agent (in such capacity, the "ADMINISTRATIVE AGENT").
PRELIMINARY STATEMENTS:
1. The Borrower is a wholly-owned, direct Subsidiary (as
hereinafter defined) of CEI.
2. CEI is party to a Third Amended and Restated Credit
Agreement dated as of September 14, 2000 (as amended, amended and restated,
supplemented or otherwise modified through the date hereof, the "EXISTING CEI
CREDIT AGREEMENT") among CEI, the lenders named therein, and ANZ, as Lead
Arranger, Administrative Agent and Issuing Lender.
3. The Borrower wishes to obtain from the Lenders a
revolving credit and term loan facility in order to, among other things, (a)
borrow funds which will be paid as a cash dividend to CEI, which in turn shall
be used by CEI solely to prepay in full all obligations outstanding under the
Existing CEI Credit Agreement and to refinance the Existing CDH Guaranty (as
hereinafter defined), (b) obtain letters of credit to replace existing letters
of credit issued pursuant to the Existing CEI Credit Agreement, and (c) obtain
working capital for the operation of the Credit Parties' (as hereinafter
defined) respective businesses.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
The following terms, as used herein, have the following
meanings:
"8.10% SENIOR NOTES" means the 8.10% Senior Notes due 2004
issued by CEI pursuant to the 8.10% Senior Note Indenture.
"8.10% SENIOR NOTE INDENTURE" means the Indenture, dated as of
March 15, 1994, between CEI and Wachovia (f/k/a First Union National Bank of
North Carolina), as Trustee, as amended, amended and restated, supplemented or
otherwise modified from time to time.
"8.75% SENIOR NOTES" means the 8.75% Senior Notes due 2008
issued by CEI pursuant to the 8.75% Senior Note Indenture.
"8.75% SENIOR NOTE INDENTURE" means the Indenture, dated as of
October 20, 1998, between CEI and Wachovia (f/k/a First Union National Bank), as
Trustee, as supplemented by that certain First Supplemental Indenture, dated as
of October 20, 1998, between CEI and Wachovia (f/k/a First Union National Bank),
as Trustee, and as further amended, amended and restated, supplemented or
otherwise modified from time to time.
"ACCOUNT CONTROL AGREEMENTS" means the Citibank Account
Control Agreement and the Wachovia Account Control Agreement.
"ADJUSTED LONDON INTERBANK OFFERED RATE" means, for any
Interest Period, a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100th of 1%) by dividing (i) the
applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage.
"ADJUSTED PARENT OPERATING CASH FLOW" means, for any period,
(a) Parent Operating Cash Flow for such period less (b) the sum of the following
expenses (determined without duplication), in each case to the extent paid by
CEI during such period and regardless of whether any such amount was accrued
during such period:
(i) development expenses for such period of CEI
and its Subsidiaries paid directly by CEI or paid indirectly by the
transferring of funds or other assets (whether through a loan, capital
contribution or otherwise) to any Subsidiary of CEI (whether by CEI or
by any of its Subsidiaries) for the purpose of enabling such Subsidiary
or another Subsidiary to pay any such expense;
(ii) income tax expenses of CEI and its
Subsidiaries (computed on a consolidated basis) for such period; and
(iii) corporate overhead expenses of CEI and its
Subsidiaries for such period.
"ADMINISTRATIVE AGENT" means Australia and New Zealand Banking
Group Limited, in its capacity as administrative agent for the Lenders and the
Issuer hereunder, and its successors in such capacity.
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each
Lender, an administrative questionnaire in the form prepared by the
Administrative Agent and submitted to the Administrative Agent (with a copy to
the Borrower) duly completed by such Lender.
"AFFILIATE" means, as to any Person, any Subsidiary of such
Person and any other Person which, directly or indirectly, controls, is
controlled by or is under common control with such Person and includes each
executive officer or director, general partner or member of such Person, and
each Person who is the beneficial owner of 5% or more of any class of voting
Capital Stock of such Person. For the purposes of this definition, "control"
means the possession
2
of the power to direct or cause the direction of management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise.
"AGREEMENT" means this Credit Agreement, as the same may be
amended, supplemented, restated or otherwise modified from time to time in
accordance with its terms.
"ANZ" has the meaning specified in the recital of the parties
to this Agreement.
"APPLICABLE LENDING OFFICE" means, with respect to any Lender,
(a) in the case of its Base Rate Loans, its Domestic Lending Office and (b) in
the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"APPLICABLE LETTER OF CREDIT COMMISSION RATE" means (a) in
respect of any Letter of Credit which is 100% cash collateralized with
Collateral deposited in a Letter of Credit Cash Collateral Account pursuant to
Section 2.20 or 2.21, a rate per annum equal to 0.50%, and (b) in all other
cases, a rate per annum equal to 4.75%; provided, however, that immediately upon
the occurrence and during the continuance of any Event of Default of the type
described in Sections 8.01(a), 8.01(l), 8.01(m), 8.01(n) or 8.01(o), and upon
written notice from the Required Lenders (or the Administrative Agent on behalf
of the Required Lenders) upon the occurrence and during the continuance of any
other Event of Default, the per annum percentages set forth in clauses (a) and
(b) above shall be increased by 2.00% per annum.
"ASSET SALE" means any sale, lease, transfer, condemnation,
casualty loss or other disposition (including any such transaction effected by
way of merger or consolidation or by way of an Equity Issuance) of any asset or
property (including, without limitation the Equity Interests of any Person) by
any member of the CEI Group, but excluding any Excluded Asset Sales.
"ASSIGNEE" has the meaning specified in Section 11.06(c).
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means an assignment and
assumption agreement substantially in the form of Exhibit G.
"AVAILABLE AMOUNT" means, for any Letter of Credit on any date
of determination, the maximum aggregate amount available to be drawn under such
Letter of Credit at any time on or after such date, the determination of such
maximum amount to assume the compliance with and satisfaction of all conditions
for drawing enumerated in such Letter of Credit.
"BASE RATE" means, for any day, a rate per annum equal to the
higher of (a) the rate of interest established by ANZ from time to time as its
Base Rate for such day and (b) the sum of 1/2 of 1% plus the Federal Funds Rate
for such day.
"BASE RATE BORROWING" has the meaning specified in the
definition of "BORROWING" herein.
"BASE RATE LOAN" means a Loan which bears interest at the Base
Rate plus the Base Rate Margin.
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"BASE RATE MARGIN" means a rate per annum equal to 3.75%.
"BENEFIT ARRANGEMENT" means, at any time, an employee benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"BIRCHWOOD POWER PARTNERS" means Birchwood Power Partners, LP,
a Delaware limited partnership.
"BORROWER" has the meaning specified in the recital of the
parties to this Agreement.
"BORROWING" means a borrowing hereunder consisting of
Revolving Credit Loans, Tranche A Term Loans, Tranche B Term Loans, Tranche C
Term Loans or Tranche D Term Loans made to the Borrower at the same time by the
Revolving Credit Lenders, Tranche A Term Lenders, Tranche B Term Lenders, the
Tranche C Term Lenders or Tranche D Term Lenders, as the case may be, pursuant
to Article II. A Borrowing is a "BASE RATE BORROWING" if such Loans are Base
Rate Loans or a "EURO-DOLLAR BORROWING" if such Loans are Euro-Dollar Loans.
"CALEDONIA PROJECT" means the 810-megawatt natural gas-fueled,
combined-cycle generating facility, owned by Caledonia Generating, LLC, located
in Caledonia, Mississippi.
"CALEDONIA-RELATED ENTITIES" means Cogentrix Caledonia
Holdings I, Inc., Cogentrix Caledonia Funding, LLC, Caledonia Operating
Services, LLC and Caledonia Generating, LLC.
"CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of, or interests in (however designated), the
equity of such Person, including, without limitation, all common stock and
preferred stock and partnership, limited liability company membership and joint
venture interests of such Person.
"CAPITALIZED LEASE" means, as applied to any Person, any lease
of any Property of which the discounted present value of the rental obligations
of such Person as lessee, in conformity with GAAP, is required to be capitalized
on the balance sheet of such Person.
"CASH FLOW COVERAGE RATIO" means, for any period, the ratio of
(i) Adjusted Parent Operating Cash Flow for such period to (ii) Corporate
Charges for such period.
"CDH OPERATING ACCOUNT" means account no. 00000000 of the
Borrower maintained with Citibank.
"CDH REVENUE ACCOUNT" means account no. 00000000 of the
Borrower maintained with Citibank.
"CEA" means Cogentrix Eastern America, Inc., a Delaware
corporation.
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"CEA CREDIT AGREEMENT" means the Amended and Restated Credit
Agreement, dated as of September 6, 2002, among CEA, the several lenders from
time to time parties thereto, and General Electric Capital Corporation, as
administrative agent thereunder, as amended, supplemented or otherwise modified
from time to time.
"CEI" has the meaning specified in the recital of the parties
to this Agreement.
"CEI GROUP" means CEI and each of its Subsidiaries, and a
"MEMBER OF THE CEI GROUP" means CEI or any of its Subsidiaries.
"CEI OPERATING ACCOUNT" means, collectively, account no.
2000000386227 and account no. 2079900011160 of CEI maintained with Wachovia.
"CEI REVENUE ACCOUNT" means account no. 00000000 of CEI
maintained with Citibank.
"CEI SECURED GUARANTY" means a guaranty, substantially in the
form of Exhibit C-1, executed and delivered by CEI and the Administrative Agent,
as such guaranty may be amended, amended and restated, supplemented or otherwise
modified from time to time.
"CEI UNSECURED GUARANTY" means a guaranty, substantially in
the form of Exhibit C-2, executed and delivered by CEI and the Administrative
Agent, as such guaranty may be amended, amended and restated, supplemented or
otherwise modified from time to time.
"CESPM" means La Compania de Electricidad de San Xxxxx de
Macoris, a Cayman Island corporation.
"CHARLOTTE MORTGAGE" means a mortgage, substantially in the
form of Exhibit F-1, executed and delivered by CIP and the Collateral Agent, as
such agreement may be amended, amended and restated, supplemented or otherwise
modified from time to time.
"CIP" means CI Properties, Inc., a North Carolina corporation.
"CITIBANK" means Citibank Delaware.
"CITIBANK ACCOUNT CONTROL AGREEMENT" means an agreement,
substantially in the form of Exhibit E-1, executed and delivered by CEI, the
Borrower, Citibank, as depositary, and the Collateral Agent, as such agreement
may be amended, amended and restated, supplemented or otherwise modified from
time to time.
"CLOSING DATE" means the date on which the first Loans are
made or Letters of Credit issued hereunder.
"CMA" means Cogentrix Mid-America, Inc., a Delaware
corporation.
"CMA CREDIT AGREEMENT" means the Credit Agreement, dated as of
December 11, 1998, among CMA, the several lenders from time to time parties
thereto, and Dresdner Bank
5
AG, New York Branch, as issuing bank and administrative agent thereunder, as
amended, supplemented or otherwise modified from time to time.
"CNC" means Cogentrix of North Carolina, Inc., a North
Carolina corporation.
"COLLATERAL" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by any Credit Party in or upon
which a Lien is granted or purported to be granted under any of the Financing
Documents.
"COLLATERAL ACCOUNTS" means the CEI Revenue Account, the CEI
Operating Account, the CDH Revenue Account, the CDH Operating Account, the
Letter of Credit Cash Collateral Accounts and the Debt Account.
"COLLATERAL AGENT" means CUSA, in its capacity as collateral
agent for the Secured Parties under the Financing Documents and its successors
in such capacity.
"COLLATERAL DOCUMENTS" means the Security Agreement, the
Account Control Agreements, the Mortgages and any other agreement that creates
or purports to create a Lien in favor of the Collateral Agent for the benefit of
the Secured Parties.
"COMMITMENT" means, as to any Lender, the aggregate of such
Lender's Revolving Credit Commitment, Tranche A Term Commitment, Tranche B Term
Commitment, Tranche C Term Commitment and Tranche D Term Commitment, and
"COMMITMENTS" means the Revolving Credit Commitments, Tranche A Term
Commitments, Tranche B Term Commitments, the Tranche C Term Commitments and
Tranche D Term Commitments of all the Lenders.
"CONDUIT LENDER" means any special purpose corporation
organized and administered by any Lender for the purpose of making Loans
hereunder otherwise required to be made by such Lender and designated by such
Lender in a written instrument, subject to the consent of the Administrative
Agent and the Borrower (which, in each case, shall not be unreasonably withheld
or delayed); provided that the designation by any Lender of a Conduit Lender
shall not relieve the designating Lender of any of its obligations to fund a
Loan under the Agreement if, for any reason, its Conduit Lender fails to fund
any such Loan, and the designating Lender (and not the Conduit Lender) shall
have the sole right and responsibility to deliver all consents and waivers
required or requested under this Agreement with respect to its Conduit Lender,
and provided further that no Conduit Lender shall (a) be entitled to receive any
greater amount pursuant to Section 10.03, 10.04 or 11.03 than the designating
Lender would have been entitled to receive in respect of the extensions of
credit made by such Conduit Lender or (b) be deemed to have any Revolving Credit
Commitment hereunder.
"CONTRACTUAL OBLIGATION" of any Person means any obligation,
agreement, undertaking or similar provision of any security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding a Financing Document) to which such
Person is a party or by which it or any of its Property is bound or to which any
of its Properties is subject.
6
"CORPORATE CHARGES" means, for any period, the sum of the
following amounts (determined without duplication), in each case to the extent
paid in cash by CEI or the Borrower during such period and regardless of whether
any such amount was accrued during such period:
(a) interest expense of CEI and the Borrower for such
period:
(i) including, without limitation, interest
expense attributable to (x) the accretion of original issue
discount on Debt issued at less than face value thereof and
(y) any interest added to the principal amount of Debt but;
(ii) excluding any interest expense to the extent
that (x) CEI or the Borrower has the option or obligation to
pay or satisfy such interest expense by the issuance of
Capital Stock of CEI or other securities of CEI which would
not constitute Debt of CEI and (y) CEI and the Borrower have
not paid or satisfied such interest expense during such period
with cash or by the issuance of Debt of CEI; and
(b) rental expense of CEI and the Borrower for such
period under any Capitalized Lease and
(c) dividends paid on CEI's and the Borrower's Redeemable
Stock during such period.
"COTTAGE GROVE PROJECT" means the 245-megawatt natural
gas-fueled, combined-cycle generating facility, owned by LSP-Cottage Grove,
L.P., located in Xxxxxxx Xxxxx, Xxxxxxxxx.
"CREDIT PARTY" means the Borrower, CEI, each of the Subsidiary
Guarantors, each of the Subsidiary Pledgors and each of the Subsidiary Grantors.
"CREDIT PARTY GUARANTIES" means, collectively, the CEI Secured
Guaranty, the CEI Unsecured Guaranty and the Subsidiary Guaranty.
"CUSA" has the meaning specified in the recital of the parties
to this Agreement.
"CVLC" means Cogentrix Virginia Leasing Corporation, a North
Carolina corporation.
"DEBT" of any Person means at any date, without duplication,
(a) all indebtedness of such Person for borrowed money (including, without
limitation, reimbursement and all other obligations with respect to surety
bonds, letters of credit and bankers' acceptances and similar instruments,
whether or not matured) or for the deferred purchase price of property or
services (other than trade debt incurred in the ordinary course of business and
due within twelve months of the incurrence thereof) which should, in accordance
with GAAP, be classified as liabilities on a balance sheet of such Person, (b)
all indebtedness of such Person evidenced by notes, bonds, debentures or similar
instruments, (c) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the
7
event of default are limited to repossession or sale of such property) other
than customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business with payment terms no
longer than 12 months, (d) all Obligations arising under Capital Leases of such
Person to the extent that such amount would appear as a liability on the balance
sheet of such Person as of such date in accordance with GAAP, (e) all Guaranties
of such Person, except customary performance guaranties entered into in the
ordinary course of business consistent with past practices, (f) all obligations
of such Person to purchase, redeem, retire, defease or otherwise acquire for
value any Equity Interests of such Person, valued, in the case of Redeemable
Stock, at the greater of the voluntary or involuntary liquidation preference for
such Redeemable Stock plus any accrued and unpaid dividends payable in
connection with such purchase, redemption, retirement, defeasance or other
acquisition, (g) all net payment obligations in respect of Derivative
Obligations of such Person, calculated as set forth in the definition of
"Derivative Obligations", and (h) all Debt referred to in clause (a), (b), (c),
(d), (e), (f) or (g) above secured by (or for which the holder of such Debt has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in Property owned by such Person, even though such Person has not assumed or
become liable for the payment of such Debt; provided, however, that, to the
extent that the rights and remedies of the obligee of any such Debt are limited
to certain property and are otherwise non-recourse to such Person, the amount of
such Debt shall be limited to the value of the Person's interest in such
Property (valued at the higher of book value or market value as of such date of
determination).
"DEBT ACCOUNT" means account no. 00000000 of the Borrower
maintained with Citibank.
"DEFAULT" means any condition or event which, with the giving
of notice or lapse of time or both would, unless cured or waived, become an
Event of Default.
"DEFAULTING LENDER" means any Lender that (a) has failed to
fund any portion of the Loans in Letter of Credit Liabilities required to be
funded by it hereunder within five Domestic Business Days of the date required
to be funded by it hereunder, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within five Domestic Business Days of the date when due, unless the
subject of a good faith dispute, or (c) has been deemed insolvent or become the
subject of a bankruptcy or insolvency proceeding.
"DERIVATIVE OBLIGATIONS" of any Person means all obligations
of such Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
For purposes of determining the aggregate amount of Derivative Obligations on
any date, the Derivative Obligations of the applicable Person in respect of any
Hedge Agreement shall be the maximum aggregate amount (after giving effect to
any netting agreements to the extent such netting agreements are with the same
Person to whom any such Derivative Obligations are owed or with Affiliates of
such
8
Person) that the applicable Person would be required to pay if such Hedge
Agreement were terminated at such time.
"DESIGNATED AGREEMENTS" means the 8.10% Senior Notes, the
8.10% Senior Note Indenture, the 8.75% Senior Notes, the 8.75% Senior Note
Indenture, the CEA Credit Agreement and the CMA Credit Agreement.
"DISTRIBUTED CASH FLOW" means for any member of the CEI Group
or any Non-Controlled Affiliate, for any period, the sum of the following
amounts (determined without duplication):
(a) dividends and distributions paid by such
member of the CEI Group or Non-Controlled Affiliate to a
member of the CEI Group during such period;
(b) development, consulting, management or other
fees paid by such member of the CEI Group or Non-Controlled
Affiliate to a member of the CEI Group during such period; and
(c) tax-sharing payments made by such member of
the CEI Group or Non-Controlled Affiliate to a member of the
CEI Group during such period.
For purposes of determining Distributed Cash Flow, Net Cash
Proceeds from Asset Sales, Equity Issuances or the incurrence of Debt shall not
be included in Distributed Cash Flow for any period.
"DOLLARS" and the sign "$" each mean the lawful money of the
United States of America.
"DOMESTIC BUSINESS DAY" means any day except a Saturday,
Sunday or other day on which commercial banks in New York City are authorized by
law to close.
"DOMESTIC LENDING OFFICE" means, as to each Lender, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Lender Party may hereafter designate as its
Domestic Lending Office by notice to the Borrower and the Administrative Agent.
"DOMINICAN REPUBLIC PROJECT" means the 300-megawatt
oil-fueled, combined-cycle generating facility, owned by CESPM, located in Santo
Xxxxxxx, Dominican Republic.
"DOMINICAN REPUBLIC-RELATED ENTITIES" means Cogentrix
International, Ltd., Cogentrix de la Republica Dominicana and CESPM.
"ENVIRONMENTAL LAWS" means any and all federal, state, local
and foreign statutes, laws (including principles of common law and decisional
law), regulations, ordinances, rules, judgments, orders, decrees, plans,
injunctions, permits, concessions, grants, franchises, licenses, agreements and
requirements of any Governmental Authority relating to the environment, natural
resources, or safety or health of human beings or other living organisms,
9
including the manufacture, processing, distribution, use, treatment, storage,
Release, transport or handling of Hazardous Substances or Remedial Action.
"ENVIRONMENTAL LIABILITIES AND COSTS" means, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs and expenses (including,
without limitation, all fees, disbursements and expenses of counsel, experts and
consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest, whether based in contract, tort, implied or
express warranty, strict liability, criminal or civil statute, arising under any
Environmental Law.
"EQUITY INTEREST" means, with respect to any Person, Capital
Stock of (or other ownership or profit interests in) such Person, warrants,
options or other rights for the purchase or other acquisition from such Person
of Capital Stock of (or other ownership or profit interests in) such Person,
securities convertible into or exchangeable for Capital Stock of (or other
ownership or profit interests in) such Person or warrants, rights or options for
the purchase or other acquisition from such Person of such Capital Stock (or
such other interests), and other ownership or profit interests in such Person
(including, without limitation, partnership, member or trust interests therein),
whether voting or nonvoting, and whether or not such shares, warrants, options,
rights or other interests are authorized or otherwise existing on any date of
determination.
"EQUITY ISSUANCES" means, in respect of any Person, the
issuance or sale of Equity Interests of such Person other than any such issuance
to directors, officers or employees pursuant to employee benefit plans in the
ordinary course of business (including by way of exercise of stock options).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.
"ERISA GROUP" means CEI, its Subsidiaries and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with CEI or any of its
Subsidiaries, are treated as a single employer under Section 414(b), (c), (m) or
(o) of the Internal Revenue Code.
"EURO-DOLLAR BORROWING" has the meaning specified in the
definition of "BORROWING" herein.
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.
"EURO-DOLLAR LENDING OFFICE" means, as to each Lender, its
office, branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Euro-Dollar Lending Office) or such other office, branch or affiliate of
such Lender as it may hereafter designate as its Euro-Dollar Lending Office by
notice to the Borrower and the Administrative Agent.
10
"EURO-DOLLAR LOAN" means a Loan which bears interest at the
Adjusted London Interbank Offered Rate plus the Euro-Dollar Margin.
"EURO-DOLLAR MARGIN" means a rate per annum equal to 4.75%.
"EURO-DOLLAR RESERVE PERCENTAGE" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding five billion
dollars in respect of "Eurocurrency liabilities" (or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Lender to United States residents). The Adjusted London Interbank Offered
Rate shall be adjusted automatically on and as of the effective date of any
change in the Euro-Dollar Reserve Percentage.
"EVENT OF DEFAULT" has the meaning specified in Section 8.01.
"EXCLUDED ASSET SALES" means, with respect to any member of
the CEI Group, any Asset Sale consisting of (a) sales of electrical and thermal
power in the ordinary course of its business and the granting of any option or
other right to purchase or otherwise acquire such electrical or thermal power in
the ordinary course of its business, (b) the sale, lease, license, transfer or
other disposition of inventory (other than any of the Turbine Assets) in the
ordinary course of such Person's business, (c) the sale, lease, license,
transfer or other disposition of machinery and equipment no longer used or
useful in the conduct of such Person's business (other than any of the Turbine
Assets), (d) any sale, lease, license, transfer or other disposition of property
by such Person to any Credit Party, provided that the Credit Parties shall cause
to be executed and delivered such documents, instruments and certificates as the
Administrative Agent may request so as to cause the Credit Parties to be in
compliance with the terms of Section 6.11 after giving effect to such
transaction, (e) any Asset Sale by such Person constituting an Investment
permitted under Section 7.06 and (f) if such Person is not a Credit Party, any
sale, lease, license, transfer or other disposition of Property by such Person
to any member of the CEI Group that is not a Credit Party; provided, however
that for purposes of this clause (f), the aggregate Fair Market Value of all
such Property sold, leased, licensed or transferred does not exceed $500,000 in
any fiscal year of CEI.
"EXCLUDED PROJECTS" means the Quachita Project, the Caledonia
Project, the Southaven Project and the Dominican Republic Project.
"EXISTING CDH GUARANTY" means the Third Amended and Restated
Guaranty dated as of September 14, 2000, made by the Borrower in favor of the
Borrower Creditors (as that term is defined therein).
"EXISTING CEI CREDIT AGREEMENT" has the meaning specified in
the preliminary statements hereto.
"EXISTING PROJECT FINANCING DEBT" means the outstanding Debt
of certain members of the CEI Group listed on Schedule XII.
11
"FAIR MARKET VALUE" means (a) with respect to any asset (other
than a marketable security) at any date, the value of the consideration
obtainable in a sale of such asset at such date assuming a sale by a willing
seller to a willing purchaser dealing at arm's length and arranged in an orderly
manner over a reasonable period of time having regard to the nature and
characteristics of such asset or, if such asset shall have been the subject of a
relatively contemporaneous appraisal by an independent third party appraiser,
the basic assumptions underlying which have not materially changed since its
date, as set forth in such appraisal, and (b) with respect to any marketable
security at any date, the closing sale price of such security on the Domestic
Business Day (on which any national securities exchange is open for the normal
transaction of business) next preceding such date, as appearing in any published
list of any national securities exchange or of NASDAQ or, if there is no such
closing sale price of such security, the final price for the purchase of such
security at face value quoted on such business day by a financial institution of
recognized standing which regularly deals in securities of such type.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day; provided that (a) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day and (b) if no such rate is so
published on such next succeeding Domestic Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to ANZ on such day on such
transactions as determined by the Administrative Agent.
"FINANCING DOCUMENTS" means this Agreement, the Credit Party
Guaranties, the Collateral Documents and the Notes.
"GAAP" has the meaning specified in Section 1.02.
"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.
"GREEN COUNTRY PROJECT" means the 810-megawatt natural
gas-fueled, combined-cycle generating facility, owned by Green Country Energy,
LLC, located in Jenks, Oklahoma.
"GROUP OF LOANS" means, at any time, a group of Loans
consisting of (a) all Loans which are Base Rate Loans at such time or (b) all
Euro-Dollar Loans having the same Interest Period at such time; provided that if
a Loan of any particular Lender is converted to or made as a Base Rate Loan
pursuant to Article X, such Loan shall be included in the same Group or Groups
of Loans from time to time as it would have been in if it had not been so
converted or made.
"GUARANTORS" means CEI and the Subsidiary Guarantors.
12
"GUARANTY" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part); provided that the term Guaranty shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guaranty"
used as a verb has a corresponding meaning. The amount of any Guaranty shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guaranty is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith.
"HAZARDOUS SUBSTANCES" means any pollutant, contaminant,
toxic, radioactive, or hazardous substance or waste, petroleum, its derivatives,
by-products and other hydrocarbons, any substance having any constituent
elements displaying any of the foregoing characteristics or other compound,
element, material or substance in any form whatsoever (including products)
regulated, restricted or addressed by or under any Environmental Law.
"HEDGE AGREEMENT" means any contract, instrument or agreement
in respect of Derivative Obligations.
"HOPEWELL PROJECT" means the 120-megawatt coal-fueled
generating facility, owned by Xxxxx River Cogeneration Company, located in
Hopewell, Virginia.
"INACTIVE SUBSIDIARIES" means each of the Subsidiaries of CEI
listed on Schedule XIII.
"INDEMNIFIED MATTERS" has the meaning specified in Section
11.03(b).
"INDEMNITEE" has the meaning specified in Section 11.03(b).
"INDIANTOWN COGENERATION" means Indiantown Cogeneration, LP, a
Delaware limited partnership.
"INTEREST PERIOD" means, with respect to each Euro-Dollar
Loan, the period commencing on the date of borrowing specified in the applicable
Notice of Borrowing or on the date specified in an applicable Notice of Interest
Rate Election and ending one, two, three or six months (or such other period of
time agreed to by the Administrative Agent) thereafter, as the Borrower may
elect in such notice; provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business
Day;
13
(b) any Interest Period which begins on the last
Euro-Dollar 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, subject to clause (c) below, end on
the last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period that would otherwise end after
the Termination Date shall end on the Termination Date.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended, or any successor statute.
"INVESTMENT" means any investment in any Person, whether by
means of a purchase of Equity Interests, capital contribution, loan, Guaranty,
time or demand deposit or otherwise.
"ISSUER" has the meaning specified in the recital of the
parties to this Agreement.
"KNOWLEDGE" of any member of the CEI Group means the knowledge
of any responsible officer or director of such member of the CEI Group.
"LENDER" means each lender listed on the signature pages
hereof, each Assignee which becomes a Lender pursuant to Section 11.06(c), and
their respective successors.
"LENDER PARTY" means any Lender, the Issuer, the
Administrative Agent or the Collateral Agent.
"LETTER OF CREDIT" means a Revolving Credit Letter of Credit
or a Tranche D Term Letter of Credit.
"LETTER OF CREDIT CASH COLLATERAL ACCOUNTS" means the
Revolving Credit Letter of Credit Cash Collateral Account and the Tranche D Term
Letter of Credit Cash Collateral Account.
"LETTER OF CREDIT DRAWING" means a Revolving Credit Letter of
Credit Drawing or a Tranche D Term Letter of Credit Drawing.
"LETTER OF CREDIT LIABILITIES" means the Revolving Credit
Letter of Credit Liabilities and the Tranche D Term Letter of Credit
Liabilities.
"LEVERAGE RATIO" means, as of any date, the ratio of (a) the
aggregate amount of all Debt of CEI and the Borrower (without duplication) at
such date to (b) the sum of (i) the Adjusted Parent Operating Cash Flow for the
six-month period ending on such date plus (ii) the projected Adjusted Parent
Operating Cash Flow for the immediately succeeding six-month period. The
projected Adjusted Parent Operating Cash Flow referred to in subclause (ii) of
the preceding sentence shall be determined by using the same amount for Adjusted
Parent Operating Cash Flow for the immediately preceding six months and then
adjusting such amount for the effect thereon (if any) of any planned or
anticipated changes in the Adjusted Parent Operating Cash Flow during such
succeeding six months (as determined in good faith by CEI and by using
14
assumptions reasonably acceptable to the Administrative Agent); provided that in
no event shall the projected Adjusted Parent Operating Cash Flow include cash
flows to be received by CEI in respect of a Subsidiary or other asset which is
not owned by CEI or a consolidated Subsidiary of CEI on the date for which the
Leverage Ratio is being calculated.
"LIEN" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind, or any other type
of preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, a member
of the CEI Group shall be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.
"LOAN" means a Revolving Credit Loan, a Tranche A Term Loan, a
Tranche B Term Loan, a Tranche C Term Loan or a Tranche D Term Loan, each of
which may be a Base Rate Loan or a Euro-Dollar Loan and "LOANS" means the
Revolving Credit Loans, the Tranche A Term Loans, the Tranche B Term Loans, the
Tranche C Term Loans and the Tranche D Term Loans, each of which may be Base
Rate Loans or Euro-Dollar Loans or any combination of the foregoing.
"XXXXX GENERATING COMPANY" means Xxxxx Generating Company, LP,
a Delaware limited partnership.
"LONDON INTERBANK OFFERED RATE" means, for any Interest
Period, the rate per annum equal to the rate at which the Administrative Agent
is offered Dollar deposits at or about 10:00 A.M., New York City time, two
Euro-Dollar Business Days prior to the beginning of such Interest Period in the
London interbank eurodollar market for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of its Euro-Dollar Loan to be outstanding during such
Interest Period.
"MATERIAL ADVERSE CHANGE" means a material adverse change in
any of (a) the condition (financial or otherwise), business, performance,
prospects, operations or properties of any the CEI Group taken as a whole, (b)
the legality, validity or enforceability of any Financing Document, (c) the
perfection or priority of the Liens granted pursuant to the Financing Documents,
(d) the ability of the Borrower to repay the Obligations under, or of any Credit
Party to perform its obligations under, any Financing Document, or (e) the
rights and remedies of the Lender Parties under any of the Financing Documents.
"MATERIAL ADVERSE EFFECT" means an effect that results in or
causes, or has a reasonable likelihood of resulting in or causing, a Material
Adverse Change.
"MINIMUM CP RATING" means (a) A-1 for Standard & Poor's
Ratings Services; (b) P-1 for Xxxxx'x Investors Service, Inc.; (c) F-1 for Fitch
IBCA, Inc. and (d) D-1 for Duff & Xxxxxx Credit Rating Co.
"MORTGAGES" means the Charlotte Mortgage and the Portsmouth
Mortgage.
"MULTIEMPLOYER PLAN" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group
15
is then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions, including for these purposes any
Person which ceased to be a member of the ERISA Group during such five year
period.
"NET CASH PROCEEDS" means:
(a) with respect to an Equity Issuance or the incurrence
of Debt (a "COVERED TRANSACTION"), the aggregate amount of cash received from
time to time (whether as initial consideration or through payment or disposition
of deferred consideration) by any member of the CEI Group from such Covered
Transaction after deducting therefrom (without duplication) (i) brokerage
commissions, underwriting fees and discounts, legal fees, finder's fees and
other similar fees and commissions, (ii) taxes paid or payable as a result
thereof, (iii) in the case of a Covered Transaction in the form of incurrence of
Debt, the amount of any Debt that, by the terms of the agreement or instrument
governing such Debt or applicable law, is required to be repaid or prepaid and
is actually so repaid or prepaid with all or a portion of the proceeds of such
Covered Transaction (iv) any portion of the proceeds of such Covered Transaction
required to prepay or collateralize interest payable in respect of such Covered
Transaction during one six-month period, and (v) all required distributions and
other required payments made to minority interest holders in Subsidiaries or
joint ventures as a result of such Equity Issuance or the incurrence of such
Debt; and
(b) with respect to any Asset Sale, cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received (including any cash received upon sale or disposition of such
note or receivable), excluding any other consideration received in the form of
assumption by the acquiring Person of Debt or other obligations relating to the
property disposed of in such Asset Sale or received in any other noncash form)
therefrom, in each case, net of all legal, title and recording tax expenses,
commissions and other customary fees and expenses incurred (including, without
limitation, consent and waiver fees and any applicable premiums, earn-out or
working interest payments or payments in lieu or in termination thereof), and
all federal, state, provincial, foreign and local taxes payable to the relevant
tax authority (i) as a direct consequence of such Asset Sale, (ii) as a result
of the required repayment of any Debt in any jurisdiction other than the
jurisdiction where the property disposed of was located or (iii) as a result of
any repatriation to the U.S. of any proceeds of such Asset Sale, and in each
case net of a reasonable reserve for any indemnification payments (fixed and
contingent) attributable to seller's indemnities to the purchaser undertaken by
any member of the CEI Group in connection with such Asset Sale, provided that
any amounts in such reserve to the extent not paid to the purchaser as an
indemnification payment after the expiration of any applicable time period set
forth in the agreements in respect of such Asset Sale shall be treated as "Net
Cash Proceeds" for all purposes of the Agreement, and net of all payments made
on any Debt which must by its terms or by applicable law be repaid out of the
proceeds from such Asset Sale, and net of all required distributions and other
required payments made to minority interest holders in Subsidiaries or joint
ventures as a result of such Asset Sale. For the purposes of this definition,
Net Cash Proceeds shall be deemed to include, without limitation, any award of
compensation for any asset or property taken by condemnation or eminent domain
and insurance proceeds for the loss of or damage to any asset or property and
within 180 days after the receipt thereof replacement or repair of such asset or
property has not commenced, except that in the
16
event that at any time such replacement or repair is abandoned or is otherwise
discontinued or is not diligently pursued, the remaining award or proceeds, as
the case may be, shall constitute Net Cash Proceeds at such time.
"NET INCOME" of any Person for any period, means the net
income (loss) of such Person for such period, determined in accordance with
GAAP.
"NET WORTH" of any Person, means, as of any date, the
aggregate of capital, surplus and retained earnings (including any cumulative
translation adjustment) of such Person and its consolidated Subsidiaries as
would be shown on a consolidated balance sheet of such Person and its
consolidated Subsidiaries prepared as of such date in accordance with GAAP.
"NON-CONTROLLED AFFILIATE" means (a) until December 31, 2004,
each of Birchwood Power Partners, Xxxxx Generating Company, Indiantown
Cogeneration, and Northampton Generating (unless such Person has become a
Subsidiary of CEI or is otherwise no longer an Affiliate of CEI), (b) after
December 31, 2004, each of Birchwood Power Partners, Xxxxx Generating Company,
Indiantown Cogeneration, and Northampton Generating (unless such Person becomes
a Subsidiary of CEI or is otherwise no longer an Affiliate of CEI) if such
Person had, for the 12-month period ending on the date of determination,
Distributed Cash Flow equal to or in excess of 3.0% of the aggregate Distributed
Cash Flow from all members of the CEI Group and all Non-Controlled Affiliates,
and (c) at any time of determination, each other Affiliate of CEI that (i) on
the Closing Date was a Subsidiary of CEI but is not a Subsidiary of CEI on the
date of determination and (ii) had, for the 12-month period ending on the date
of determination, Distributed Cash Flow equal to or in excess of 3.0% of the
aggregate Distributed Cash Flow from all members of the CEI Group and all
Non-Controlled Affiliates; provided, that in determining for purposes of clause
(c) the Distributed Cash Flow from such Affiliate, any transaction or series of
related transactions (whether the sale or issuance of Capital Stock, merger or
otherwise) that caused such Affiliate to cease being a Subsidiary of CEI shall
be deemed to have occurred on the first day of such 12-month period.
"NON-RECOURSE" to a Person, as applied to any Debt (or portion
thereof), means that such Person is not, directly or indirectly, liable to make
any payments with respect to such Debt (or portion thereof), that no Guaranty of
such Debt (or portion thereof) has been made by such Person other than a
Guaranty limited in recourse to the Capital Stock of the Person incurring such
Debt (or any shareholder, partner, member or participant of such Person) and
that such Debt (or portion thereof) is not secured by a Lien on any asset of
such Person other than the Capital Stock of the Person incurring such Debt or
any shareholder, partner, member or participant of such Person or of the Person
whose obligations were Guaranteed.
"NORTHAMPTON GENERATING" means Northampton Generating Company,
LP, a Delaware limited partnership.
"NOTE" means a Revolving Credit Note, a Tranche A Term Note, a
Tranche B Term Note, a Tranche C Term Note or a Tranche D Term Note.
"NOTICE OF BORROWING" has the meaning specified in Section
2.06(a).
"NOTICE OF INTEREST RATE ELECTION" has the meaning specified
in Section 2.10(b).
17
"NOTICE OF ISSUANCE" has the meaning specified in Section
2.07(e).
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 6.01(g) or (h). Without limiting the generality of the foregoing, the
Obligations of the Borrower and the other Credit Parties under the Financing
Documents include (a) the obligation to pay principal, interest, Letter of
Credit commissions, charges, expenses, fees, attorneys' fees and disbursements,
indemnities and other amounts payable by the Borrower and the other Credit
Parties under any Financing Document and (b) the obligation of the Borrower and
the other Credit Parties to reimburse any amount in respect of any of the
foregoing that any Lender Party, in its sole discretion, may elect to pay or
advance on behalf of the Borrower or such other Credit Party.
"OFF BALANCE SHEET OBLIGATION" means, with respect to any
Person, any Obligation of such Person under a synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
classified as an operating lease in accordance with GAAP.
"OTHER TAXES" has the meaning specified in Section 10.04(b).
"PARENT" means, with respect to any Lender Party, any Person
controlling such Lender Party.
"PARENT OPERATING CASH FLOW" means, for any period, the sum of
the following amounts (determined without duplication), but only to the extent
received in cash by CEI or the Borrower during such period and regardless of
whether any such amount was accrued during such period:
(a) dividends and distributions paid to CEI or
the Borrower by its Subsidiaries during such period;
(b) development, consulting, management or other
fees paid to CEI or the Borrower during such period;
(c) tax-sharing payments made to CEI or the
Borrower during such period;
(d) interest, dividends and other distributions
paid during such period with respect to cash and cash
investments of CEI or the Borrower (other than with respect to
amounts on deposit in the Collateral Accounts except to the
extent of any interest earnings on cash deposited in the
Collateral Accounts actually paid to CEI or the Borrower); and
(e) other cash payments made to CEI or the
Borrower by its Subsidiaries other than (i) returns of
invested capital upon liquidation or sale,
18
(ii) payments of the principal of Debt of any such Subsidiary
to CEI or the Borrower and (iii) payments in an amount equal
to the aggregate amount released from debt service reserve
accounts upon the issuance of Letters of Credit for the
benefit of the beneficiaries of such accounts.
For purposes of determining Parent Operating Cash Flow, Net
Cash Proceeds from Asset Sales, Equity Issuances or the incurrence of Debt shall
not be included in Parent Operating Cash Flow for any period.
"PARTICIPANT" has the meaning specified in Section 11.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"PERMITTED HOLDERS" means (a) the Estate of Xxxxxx X. Xxxxx,
Xx. (including the beneficiaries of the Estate of Xxxxxx X. Xxxxx, Xx.), Xxxxx
X. Xxxxx, Xxxxx X. Xxxxx, Xxxxx X. Xxxxx and the Estate of Xxxxxx X. Xxxxx
(including the beneficiaries of the Estate of Xxxxxx X. Xxxxx) (collectively,
the "CURRENT HOLDERS"), (b) members of the immediate families of the Current
Holders, (c) trusts for the benefit of Current Holders and members of the
immediate families of the Current Holders, and (d) a non-profit corporation or
foundation controlled by any of the Persons described in (a), (b) or (c) of this
definition. Members of a Person's "immediate family" shall mean such Person's
parents, brothers, sisters, spouse and lineal descendants.
"PERSON" means an individual, a corporation, a partnership,
limited liability company, association, trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"PLAN" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code and either (a) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (b) has at any
time within the preceding five years been maintained, or contributed to, by any
Person which was at such time a member of the ERISA Group for employees of any
Person which was at such time a member of the ERISA Group.
"PLEDGED SUBSIDIARY" means (a) as of the Closing Date, each
Subsidiary of CEI listed on Schedule IX, and (b) thereafter, in addition to the
Subsidiaries of CEI listed on Schedule IX, each Subsidiary of CEI, the Capital
Stock of which is pledged to the Collateral Agent pursuant to Sections 6.10 or
7.15.
"PORTSMOUTH MORTGAGE" means a mortgage, substantially in the
form of Exhibit F-2, executed and delivered by CVLC and the Collateral Agent, as
such agreement may be amended, amended and restated, supplemented or otherwise
modified from time to time.
"PORTSMOUTH PROJECT" means the 120-megawatt coal-fueled
generating facility, owned by Cogentrix Virginia Leasing Corporation, located in
Portsmouth, Virginia.
19
"POWER GENERATION FACILITY" means an electric power or thermal
energy generation or cogeneration facility or related facilities (including
residual waste management, and, to the extent such facilities are in existence
on the date of this Agreement or are required by contract or applicable law,
rule or regulation, facilities that use thermal energy from a cogeneration
facility), and its or their related electric power transmission, fuel supply and
fuel transportation facilities, together with its or their related power supply,
thermal energy and fuel contracts and other facilities, services or goods that
are ancillary, incidental, necessary or reasonably related to the marketing,
development, construction, management or operation of the foregoing, as well as
other contractual arrangements with customers, suppliers and contractors.
"PROPERTY" means, as to any Person, all types of real,
personal, tangible, intangible or mixed property owned by such Person whether or
not included in the most recent consolidated balance sheet of such Person under
GAAP.
"QUACHITA PROJECT" means the 816-megawatt natural gas-fueled,
combined-cycle generating facility, owned by Quachita Power, LLC, located in
Ouachita Parish, Louisiana.
"QUACHITA-RELATED ENTITIES" means Cogentrix Ouachita Holdings,
Inc., Ouachita Operating Services, LLC and Quachita Power, LLC.
"REDEEMABLE STOCK" means any class or series of Capital Stock
of any Person that by its terms or otherwise is (a) required to be redeemed
prior to the first anniversary of the Termination Date, (b) redeemable at the
option of the holder of such class or series of Capital Stock at any time prior
to the first anniversary of the Termination Date or (c) convertible into or
exchangeable for (unless solely at the option of such person) Capital Stock
referred to in clause (a) or (b) above or Debt having a scheduled maturity prior
to the first anniversary of the Termination Date; provided that any Capital
Stock that would not constitute Redeemable Stock but for provisions thereof
giving holders thereof the right to require such person to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or a "change of
control" occurring prior to the first anniversary of the Termination Date shall
not constitute Redeemable Stock if such Capital Stock specifically provides that
such person will not repurchase or redeem any such Capital Stock pursuant to
such provisions unless such repurchase or redemption is permitted under the
terms of this Agreement.
"REGISTER" has the meaning specified in Section 11.06(f).
"REGULATION U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT OBLIGATIONS" means at any date the obligations
then outstanding of the Borrower under Article II to reimburse the Issuer for
Letter of Credit Drawings under Letters of Credit.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, emptying, escaping, dumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration of any Hazardous Substance, into the
indoor or outdoor environment including, without limitation, the movement of
Hazardous Substances through or in the air, soil, surface water, ground water or
property.
20
"REMEDIAL ACTION" means all actions required under applicable
Environmental Law to (a) clean up, remove, remedy, treat or in any other way
address Hazardous Substances in the indoor or outdoor environment, (b) prevent
the Release or threat of Release or minimize the further Release of Hazardous
Substances so they do not migrate or endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment, or (c) perform
pre-remedial studies and investigations and post-remedial monitoring and care.
"REQUIRED LENDERS" means, at any time, Lenders (other than
Defaulting Lenders) owed or holding at least two-thirds in interest of the
aggregate principal amount (other than any principal amount owed to Defaulting
Lenders) of the sum of (a) the aggregate principal amount of the Loans
outstanding at such time, (b) the aggregate Letter of Credit Liabilities
outstanding at such time, (c) the aggregate Unused Revolving Credit Commitments
at such time, (d) the aggregate Tranche A Term Commitments at such time, (e) the
aggregate Tranche B Term Commitments at such time, (f) the aggregate Unused
Tranche C Term Commitments at such time and (e) the aggregate Unused Tranche D
Term Commitments at such time.
"REQUIREMENT OF LAW" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing documents of
such Person, and all federal, state and local laws, rules and regulations,
including, without limitation, Environmental Laws and ERISA, and all orders,
judgments, decrees or other determinations of any Governmental Authority or
arbitrator, applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.
"REVOLVING CREDIT AVAILABILITY PERIOD" means the period from
and including the Closing Date to but excluding the Termination Date.
"REVOLVING CREDIT COMMITMENT" means, at any time, with respect
to any Revolving Credit Lender at any time, the amount set forth opposite such
Revolving Credit Lender's name on Schedule I hereto under the caption "Revolving
Credit Commitments" or, if such Revolving Credit Lender has entered into one or
more Assignment and Assumption Agreements, the amount set forth for such
Revolving Credit Lender in the Register maintained by the Administrative Agent
pursuant to Section 11.06(f) as such Revolving Credit Lender's "Revolving Credit
Commitment", as such amount may be reduced at or prior to such time pursuant to
Sections 2.12 or 8.01. As of the date hereof, the Revolving Credit Commitments
of the Revolving Credit Lenders equal $40,000,000.
"REVOLVING CREDIT LENDER" means (a) initially, each Person
listed on Schedule I having a Revolving Credit Commitment, and (b) after the
first Revolving Credit Loan is made or Revolving Credit Letter of Credit is
issued, each Person having a Revolving Credit Commitment, holding a Revolving
Credit Loan, or participating in Revolving Credit Letter of Credit Liabilities.
"REVOLVING CREDIT LETTER OF CREDIT" means a letter of credit
issued by the Issuer pursuant to Section 2.07(a).
"REVOLVING CREDIT LETTER OF CREDIT CASH COLLATERAL" has the
meaning specified in Section 2.20(b).
21
"REVOLVING CREDIT LETTER OF CREDIT CASH COLLATERAL ACCOUNT"
means account no. 00000000 of the Borrower maintained with Citibank.
"REVOLVING CREDIT LETTER OF CREDIT CONTINGENT EXPOSURE" has
the meaning specified in Section 2.20(c).
"REVOLVING CREDIT LETTER OF CREDIT DIRECT EXPOSURE" has the
meaning specified in Section 2.20(c).
"REVOLVING CREDIT LETTER OF CREDIT DRAWING" means a drawing
effected under any Revolving Credit Letter of Credit.
"REVOLVING CREDIT LETTER OF CREDIT LIABILITIES" means, at any
time and in respect of any Revolving Credit Letter of Credit, the sum, without
duplication, of (a) the Available Amount of such Revolving Credit Letter of
Credit plus (b) the aggregate unpaid amount of all Reimbursement Obligations in
respect of previous Revolving Credit Letter of Credit Drawings made under such
Revolving Credit Letter of Credit.
"REVOLVING CREDIT LOAN" has the meaning specified in Section
2.01.
"REVOLVING CREDIT NOTE" means a promissory note of the
Borrower to the order of any Revolving Credit Lender, in substantially the form
of Exhibit A-1, evidencing the indebtedness of the Borrower to such Revolving
Credit Lender resulting from the Revolving Credit Loans made or deemed to have
been made by such Revolving Credit Lender.
"REVOLVING CREDIT OUTSTANDINGS" means at any time, as to any
Revolving Credit Lender, the sum of the aggregate outstanding principal amount
of such Revolving Credit Lender's Revolving Credit Loans and its participation
in the Revolving Credit Letter of Credit Liabilities.
"RICHMOND PROJECT" means the 240-megawatt coal-fueled
generating facility, owned by Cogentrix of Richmond, Inc., located in Richmond,
Virginia.
"ROCKY MOUNT PROJECT" means the 120-megawatt coal-fueled
generating facility, owned by Cogentrix of Rocky Mount, Inc., located in Rocky
Mount, North Carolina.
"ROT" means the Trust under agreement dated December 30, 1985,
between Roxboro/Southport General Partnership, successor in interest to General
Electric Credit Corporation, and The Bank of New York, successor in interest to
United States Trust Company of New York, as Roxboro Owner Trustee.
"ROXBORO PROJECT" means the 60-megawatt coal-fueled generating
facility, owned by ROT and CNC, located in Roxboro, North Carolina.
"SECURED PARTIES" means, collectively, the Collateral Agent,
the Administrative Agent, the Issuer, the Lenders and the Indemnitees.
22
"SECURITY AGREEMENT" means an agreement, substantially in the
form of Exhibit D, executed and delivered by CEI, the Borrower, each of the
Subsidiary Grantors and the Collateral Agent, as such agreement may be amended,
amended and restated, supplemented or otherwise modified from time to time.
"SOLVENT" and "SOLVENCY" means, with respect to any Person,
that the value of the assets of such Person (both at fair value and present fair
saleable value) is, on the date of determination, greater than the total amount
of liabilities (including, without limitation, contingent and unliquidated
liabilities) of such Person as of such date and that, as of such date, such
Person is able to pay all liabilities of such Person as such liabilities mature
and does not have unreasonably small capital. In computing the amount of
contingent or unliquidated liabilities at any time, such liabilities will be
computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"SOT" means the Trust under agreement dated December 30, 1985,
between Roxboro/Southport General Partnership, successor in interest to General
Electric Credit Corporation, and The Bank of New York, successor in interest to
United States Trust Company of New York, as Southport Owner Trustee.
"SOUTHAVEN PROJECT" means the 810-megawatt natural gas-fueled,
combined-cycle generating facility, owned by Southaven Power, LLC, located in
Southaven, Mississippi.
"SOUTHAVEN-RELATED ENTITIES" means Cogentrix Southaven
Holdings, Inc., Cogentrix Southaven Holdings II, Inc., Cogentrix Southaven
Funding, LLC, Southaven Operating Services, LLC, Cogentrix Southaven Properties,
LLC and Southaven Power, LLC.
"SOUTHPORT PROJECT" means the 120-megawatt coal-fueled
generating facility, owned by SOT and CNC, located in Southport, North Carolina.
"SPECIFIED PREPAYMENTS" means prepayments made pursuant to
Section 2.15 made in connection with the receipt by a member of the CEI Group of
(a) Net Cash Proceeds in respect of an Asset Sale involving any of the Turbine
Assets, (b) Net Cash Proceeds from an Asset Sale released from any escrow,
holdback or similar arrangement (including, without limitation, Net Cash
Proceeds from approximately $26,000,000 held in escrow on the date hereof
resulting from the sale of CEI's Green Country Project) or (c) cash dividends or
other distributions from the Dominican Republic Project or the Quachita Project
(in each case net of all federal, state, provincial, foreign and local taxes
payable to relevant tax authorities).
"SPECIFIED SUBSIDIARIES" means each of the Subsidiaries of the
Borrower having, directly or indirectly, an ownership interest in the Cottage
Grove Project, the Richmond Project, the Rocky Mount Project or the Whitewater
Project.
"STOCKHOLDER LOANS" means the loans made by CEI to its
stockholders and evidenced by that certain Promissory Note from Xxxxx X. Xxxxx
dated June 5, 2002, in the original principal amount of $626,990; that certain
Promissory Note from Xxxxx X. Xxxxx dated November 25, 2002, in the original
principal amount of $2,000,000; that certain Promissory Note from Xxxxxx X.
Xxxxx dated June 7, 2002, in the original principal amount of $300,000; that
23
certain Promissory Note from Xxxxxx X. Xxxxx dated June 21, 2002, in the
original principal amount of $2,200,000; that certain Promissory Note from
Xxxxxx X. Xxxxx dated December 2, 2002, in the original principal amount of
$500,000; and that certain Promissory Note from Xxxxxx X. Xxxxx dated December
2, 2002, in the original principal amount of $2,000,000.
"SUBSIDIARY" means with respect to any Person, (a) any
corporation or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by such Person and (b) any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect
50% of the board of directors or other persons performing similar functions are
at the time directly or indirectly owned by such Person and which corporation or
other entity is operated or otherwise managed by such Person.
"SUBSIDIARY GRANTOR" means (a) on the Closing Date, each
Subsidiary of CEI listed on Schedule VIII and (b) thereafter, in addition to
each Subsidiary of CEI listed on Schedule VIII, each Subsidiary of CEI,
executing and delivering a Security Agreement pursuant to Sections 6.10 or 7.15.
"SUBSIDIARY GUARANTOR" means (a) on the Closing Date, each
Subsidiary of CEI listed on Schedule VI and (b) thereafter, in addition to each
Subsidiary of CEI listed on Schedule VI, each Subsidiary of CEI, executing and
delivering a Subsidiary Guaranty pursuant to Sections 6.10 or 7.15.
"SUBSIDIARY GUARANTY" means a guaranty, substantially in the
form of Exhibit C-3, executed and delivered by each Subsidiary Guarantor and the
Administrative Agent, as such guaranty may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"SUBSIDIARY PLEDGOR" means (a) as of the Closing Date, each
Subsidiary of CEI listed on Schedule VII, and (b) thereafter, in addition to the
Subsidiaries of CEI listed on Schedule VII, each Subsidiary of the Borrower
pledging Equity Interests under the Security Agreement pursuant to Sections 6.10
or 7.15.
"TANGIBLE NET WORTH" means, with respect to any Person, as of
the date of determination, the Net Worth of such Person at such date, after
deducting therefrom all intangible assets, including without limitation the
following:
(a) goodwill;
(b) patents, trademarks, copyrights, franchises,
licenses, service marks and brand names;
(c) leasehold improvements not recoverable at the
expiration of a lease; and
(d) deferred charges (including, but not limited to,
unamortized debt discount and expense, organization expenses and experimental
expenses and project and other development expenses, but excluding prepaid
expenses and deferred financing fees).
24
"TAXES" has the meaning specified in Section 10.04(a).
"TEMPORARY CASH INVESTMENT" means any Investment (having a
maturity of not greater than 60 days from the date of issuance thereof) in
(a)(i) direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof; (ii)
commercial paper rated at least the Minimum CP Rating by any two of Standard &
Poor's Ratings Services, Xxxxx'x Investors Service, Inc., Fitch IBCA, Inc. and
Duff & Xxxxxx Credit Rating Co., provided that one of such two Minimum CP
Ratings is by Standard & Poor's Ratings Services or Xxxxx'x Investors Service,
Inc.; (iii) time deposits with, including certificates of deposit issued by, any
office located in the United States of (A) any Lender or (B) any other bank or
trust company which is organized or licensed under the laws of the United States
or any state thereof and has capital, surplus and undivided profits aggregating
at least $500,000,000 or (C) any other bank whose short term commercial paper is
rated at least the Minimum CP Rating by any two of Standard & Poor's Ratings
Services, Xxxxx'x Investors Service, Inc., Fitch IBCA, Inc. and Duff & Xxxxxx
Credit Rating Co., provided that one of such two Minimum CP Ratings is by
Standard & Poor's Ratings Services or Xxxxx'x Investors Service, Inc.; (iv)
medium term notes, auction rate preferred stock, asset backed securities, bonds,
notes and letter of credit supported instruments, issued by any entity organized
under the laws of the United States, or any state or municipality of the United
States and rated in any of the three highest rated categories by Standard &
Poor's Ratings Services or Xxxxx'x Investors Service, Inc.; (v) repurchase
agreements with respect to securities described in clause (i) above entered into
with an office of a bank or trust company meeting the criteria specified in
clause (iii) above; and (vi) Euro-Dollar certificates of deposit issued by any
bank or trust company which has capital and unimpaired surplus of not less than
$500,000,000 and (b) registered investment companies that are "money market
funds" within the meaning of Rule 2a-7 under the Investment Company Act of 1940.
"TERM LOANS" means the Tranche A Term Loans, the Tranche B
Term Loans, the Tranche C Term Loans and the Tranche D Term Loans.
"TERMINATION DATE" means January 31, 2006.
"TRANCHE", when used in reference to any Loan, Commitment or
Lender, means the characterization of (a) such Loan as a Revolving Credit Loan,
Tranche A Term Loan, Tranche B Term Loan, Tranche C Term Loan or Tranche D Term
Loan, (b) such Commitment as a Revolving Credit Commitment, a Tranche A Term
Commitment, a Tranche B Term Commitment, a Tranche C Term Commitment or a
Tranche D Term Commitment, or (c) such Lender as a Revolving Credit Lender, a
Tranche A Term Lender, a Tranche B Term Lender, a Tranche C Term Lender or a
Tranche D Term Lender and its rights and obligations as such under the Financing
Documents.
"TRANCHE A TERM COMMITMENT" means, at any time, with respect
to any Tranche A Term Lender at any time, the amount set forth opposite such
Tranche A Term Lender's name on Schedule II hereto under the caption "Tranche A
Term Commitments" or, if such Tranche A Term Lender has entered into one or more
Assignment and Assumption Agreements, the amount set forth for such Tranche A
Term Lender in the Register maintained by the Administrative Agent pursuant to
Section 11.06(f) as such Tranche A Term Lender's
25
"Tranche A Term Commitment", as such amount may be reduced at or prior to such
time pursuant to Sections 2.12 or 8.01. As of the date hereof, the Tranche A
Term Commitments of the Tranche A Term Lenders equal $10,000,000.
"TRANCHE A TERM LENDER" means (a) initially, each Person
listed on Schedule II having a Tranche A Term Commitment, and (b) after the
Tranche A Term Loans are made, each Person holding a Tranche A Term Loan.
"TRANCHE A TERM LOAN" has the meaning specified in Section
2.02(a).
"TRANCHE A TERM NOTE" means a promissory note of the Borrower
to the order of any Tranche A Term Lender, in substantially the form of Exhibit
A-2 hereto, evidencing the indebtedness of the Borrower to such Tranche A Term
Lender resulting from the Tranche A Term Loan made by such Tranche A Term
Lender.
"TRANCHE B TERM COMMITMENT" means, at any time, with respect
to any Tranche B Term Lender at any time, the amount set forth opposite such
Tranche B Term Lender's name on Schedule III under the caption "Tranche B Term
Commitments" or, if such Tranche B Term Lender has entered into one or more
Assignment and Assumption Agreements, the amount set forth for such Tranche B
Term Lender in the Register maintained by the Administrative Agent pursuant to
Section 11.06(f) as such Tranche B Term Lender's "Tranche B Term Commitment", as
such amount may be reduced at or prior to such time pursuant to Sections 2.12 or
8.01. As of the date hereof, the Tranche B Term Commitments of the Tranche B
Term Lenders equal $78,694,654.50.
"TRANCHE B TERM LENDER" means (a) initially, each Person
listed on Schedule III having a Tranche B Term Commitment, and (b) after the
Tranche B Term Loans are made, each Person holding a Tranche B Term Loan.
"TRANCHE B TERM LOAN" has the meaning specified in Section
2.03(a).
"TRANCHE B TERM NOTE" means a promissory note of the Borrower
to the order of any Tranche B Term Lender, in substantially the form of Exhibit
A-3 hereto, evidencing the indebtedness of the Borrower to such Tranche B Term
Lender resulting from the Tranche B Term Loan made by such Tranche B Term
Lender.
"TRANCHE C TERM AVAILABILITY PERIOD" means the period from and
including the Closing Date to but excluding the Termination Date.
"TRANCHE C TERM COMMITMENT" means, at any time, with respect
to any Tranche C Term Lender at any time, the amount set forth opposite such
Tranche C Term Lender's name on Schedule IV hereto under the caption "Tranche C
Term Commitments" or, if such Tranche C Term Lender has entered into one or more
Assignment and Assumption Agreements, the amount set forth for such Tranche C
Term Lender in the Register maintained by the Administrative Agent pursuant to
Section 11.06(f) as such Tranche C Term Lender's "Tranche C Term Commitment", as
such amount may be reduced at or prior to such time pursuant to Sections or 2.12
or 8.01. As of the date hereof, the Tranche C Term Commitments of the Tranche C
Term Lenders equal $48,100,000.
26
"TRANCHE C TERM LENDER" means (a) initially, each Person
listed on Schedule IV having a Tranche C Term Commitment, and (b) after the
Tranche C Term Loans are made, each Person holding a Tranche C Term Loan.
"TRANCHE C TERM LOAN" has the meaning specified in Section
2.04(a).
"TRANCHE C TERM NOTE" means a promissory note of the Borrower
to the order of any Tranche C Term Lender, in substantially the form of Exhibit
A-4 hereto, evidencing the indebtedness of the Borrower to such Tranche C Term
Lender resulting from the Tranche C Term Loans made by such Tranche C Term
Lender.
"TRANCHE D TERM COMMITMENT" means, at any time, with respect
to any Tranche D Term Lender at any time, the amount set forth opposite such
Tranche D Term Lender's name on Schedule V hereto under the caption "Tranche D
Term Commitments" or, if such Tranche D Term Lender has entered into one or more
Assignment and Assumption Agreements, the amount set forth for such Tranche D
Term Lender in the Register maintained by the Administrative Agent pursuant to
Section 11.06(f) as such Tranche D Term Lender's "Tranche D Term Commitment", as
such amount may be reduced at or prior to such time pursuant to Sections 2.12 or
8.01. As of the date hereof, the Tranche D Term Commitments of the Tranche D
Term Lenders equal $15,202,845.50.
"TRANCHE D TERM LENDER" means (a) initially, each Person
listed on Schedule V having a Tranche D Term Commitment, and (b) after the
Closing Date, each Person having a Tranche D Term Commitment, holding a Tranche
D Term Loan, or participating in Tranche D Term Letter of Credit Liabilities.
"TRANCHE D TERM LETTER OF CREDIT" means a letter of credit
issued by the Issuer pursuant to Section 2.07(b).
"TRANCHE D TERM LETTER OF CREDIT CASH COLLATERAL" has the
meaning specified in Section 2.21(b).
"TRANCHE D TERM LETTER OF CREDIT CASH COLLATERAL ACCOUNT"
means account no. 00000000 of the Borrower maintained with Citibank.
"TRANCHE D TERM LETTER OF CREDIT CONTINGENT EXPOSURE" has the
meaning specified in Section 2.21(c).
"TRANCHE D TERM LETTER OF CREDIT DIRECT EXPOSURE" has the
meaning specified in Section 2.21(c).
"TRANCHE D TERM LETTER OF CREDIT DRAWING" means a drawing
effected under any Tranche D Term Letter of Credit.
"TRANCHE D TERM LETTER OF CREDIT LIABILITIES" means, at any
time and in respect of any Tranche D Term Letter of Credit, the sum, without
duplication, of (a) the Available Amount of such Tranche D Term Letter of Credit
plus (ii) the aggregate unpaid
27
amount of all Reimbursement Obligations in respect of previous Tranche D Term
Letter of Credit Drawings made under such Tranche D Term Letter of Credit.
"TRANCHE D TERM LOAN" has the meaning specified in Section
2.05(a).
"TRANCHE D TERM NOTE" means a promissory note of the Borrower
to the order of any Tranche D Term Lender, in substantially the form of Exhibit
A-5 hereto, evidencing the indebtedness of the Borrower to such Tranche D Term
Lender resulting from the Tranche D Term Loans made by such Tranche D Term
Lender.
"TRANCHE D TERM OUTSTANDINGS" means at any time, as to any
Tranche D Term Lender, the sum of the aggregate outstanding principal amount of
such Tranche D Term Lender's Tranche D Term Loans and its participation in the
Tranche D Term Letter of Credit Liabilities.
"TURBINE ASSETS" means all assets held by a member of the CEI
Group which were purchased pursuant to the Purchase Agreement (for Gas Turbines
and Steam Turbines), dated as of March 30, 2001, between CEI and General
Electric Company or the Contract Purchase Agreement (for Heat Recovery System
Generators and Accessories), dated May 18, 2001, between CEI and Aalborg
Industries, Inc., each as amended through the Closing Date, and all related
contract and warranty rights and other assets related thereto.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan.
"UNITED STATES" or "U.S." means the United States of America,
including the States and the District of Columbia, but excluding its territories
and possessions.
"UNUSED REVOLVING CREDIT COMMITMENTS" means, with respect to
any Lender at any time, (a) such Lender's Revolving Credit Commitment at such
time minus (b) the sum of (i) the aggregate principal amount of all Revolving
Credit Loans held by such Lender outstanding at such time plus (ii) such
Lender's participation in the Revolving Credit Letter of Credit Liabilities.
"UNUSED TRANCHE C TERM COMMITMENTS" means, with respect to any
Tranche C Term Lender at any time, (a) such Tranche C Term Lender's Tranche C
Term Commitment at such time minus (b) the aggregate principal amount of all
Tranche C Term Loans held by such Tranche C Term Lender outstanding at such
time.
"UNUSED TRANCHE D TERM COMMITMENTS" means, with respect to any
Tranche D Term Lender at any time, (a) such Tranche D Term Lender's Tranche D
Term Commitment at such time minus (b) the sum of (i) the aggregate principal
amount of all Tranche D Term Loans held by such Tranche D Term Lender
outstanding at such time plus (ii) such Tranche D Term Lender's participation in
the Tranche D Term Letter of Credit Liabilities.
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"WACHOVIA" means Wachovia Bank, National Association.
"WACHOVIA ACCOUNT CONTROL AGREEMENT" means an agreement,
substantially in the form of Exhibit E-2, executed and delivered by CEI,
Wachovia, as depositary, and the Collateral Agent, as such agreement may be
amended, amended and restated, supplemented or otherwise modified from time to
time.
"WHITEWATER PROJECT" means the 245-megawatt natural
gas-fueled, combined-cycle generating facility, owned by LSP-Whitewater Limited
Partnership, located in Whitewater, Wisconsin.
Section 1.02 Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared, in accordance with generally accepted accounting principles as in
effect from time to time, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants) with the most
recent audited consolidated financial statements of the Borrower and its
consolidated Subsidiaries delivered to the Lenders ("GAAP"); provided that, if
the Borrower notifies the Administrative Agent that the Borrower wishes to amend
any covenant in Article V to eliminate the effect of any change in generally
accepted accounting principles on the operation of such covenant (or if the
Administrative Agent notifies the Borrower that the Required Lenders wish to
amend Article V for such purpose), then the Borrower's compliance with such
covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Lenders.
Section 1.03 Types of Borrowing.
The term "BORROWING" denotes (a) the aggregation of Loans made
(or deemed to have been made) or to be made to the Borrower by one or more
Lenders pursuant to Article II on the same day, all of which Loans are of the
same type (subject to Article X) and, except in the case of Base Rate Loans,
have the same initial Interest Period or (b) if the context so requires, the
borrowing of such Loans. Borrowings are classified for purposes hereof by
reference to the pricing of Loans comprising such Borrowing (e.g., a
"EURO-DOLLAR BORROWING" is a Borrowing comprised of Euro-Dollar Loans). It is
understood and agreed that all Borrowings will be made in Dollars.
Section 1.04 Computation of Time Periods.
In this Agreement, in the computation of periods of time from
a specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding" and the
word "through" means "to and including."
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Section 1.05 Certain Terms.
(a) The words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole, and not to any
particular Article, Section, subsection or clause in this Agreement. References
herein to an Exhibit, Schedule, Article, Section, subsection or clause refer to
the appropriate Exhibit or Schedule to, or Article, Section, subsection or
clause in this Agreement.
(b) The terms "Lender", "Issuer", "Administrative Agent"
and "Collateral Agent" include their respective successors and the term "Lender"
and "Issuer" includes each assignee of such Lender or Issuer who becomes a party
hereto pursuant to Section 11.06(c).
ARTICLE II
LOANS AND LETTERS OF CREDIT
Section 2.01 Revolving Credit Loans.
Each Revolving Credit Lender severally agrees, on the terms
and conditions set forth in this Agreement, to make loans (each a "REVOLVING
CREDIT LOAN") to the Borrower pursuant to this Section 2.01 from time to time
during the Revolving Credit Availability Period in amounts such that the
Revolving Credit Outstandings of such Revolving Credit Lender at any time shall
not exceed the amount of its Revolving Credit Commitment at such time. Each
Borrowing under this Section 2.01 shall be in an aggregate principal amount of
$1,000,000 or any larger multiple of $500,000 and shall be made from the
Revolving Credit Lenders ratably in proportion to their respective Revolving
Credit Commitments. Within the foregoing limits, the Borrower may borrow under
this Section 2.01, repay, or, to the extent permitted or required by Sections
2.13, 2.14 and 2.15, prepay Revolving Credit Loans and reborrow at any time
during the Revolving Credit Availability Period.
Section 2.02 Tranche A Term Loans.
(a) Each Tranche A Term Lender severally agrees on the
terms and conditions set forth in this Agreement, to make a loan (each, a
"TRANCHE A TERM LOAN") on the Closing Date in an amount equal to such Tranche A
Term Lender's Tranche A Term Commitment.
(b) The Tranche A Term Loans are not revolving in nature,
and amounts repaid or prepaid in respect thereof may not be reborrowed.
Section 2.03 Tranche B Term Loans.
(a) Each Tranche B Term Lender severally agrees on the
terms and conditions set forth in this Agreement, to make a loan (each, a
"TRANCHE B TERM LOAN") on the Closing Date in an amount equal to such Tranche B
Term Lender's Tranche B Term Commitment.
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(b) The Tranche B Term Loans are not revolving in nature,
and amounts repaid or prepaid in respect thereof may not be reborrowed.
Section 2.04 Tranche C Term Loans.
(a) Each Tranche C Term Lender severally agrees, on the
terms and conditions set forth in this Agreement, to make loans (each a "TRANCHE
C TERM LOAN") to the Borrower pursuant to this Section 2.04(a) from time to time
during the Tranche C Term Availability Period in amounts such that the Tranche C
Term Loans of such Tranche C Term Lender made by such Tranche C Term Lender plus
the Unused Tranche C Term Commitment of such Tranche C Term Lender shall not
exceed the amount of its Tranche C Term Commitment at such time. Each Borrowing
under this Section 2.04 shall be made from the Tranche C Term Lenders ratably in
proportion to their respective Tranche C Term Commitments.
(b) The Tranche C Term Loans are not revolving in nature,
and amounts repaid or prepaid in respect thereof may not be reborrowed.
Section 2.05 Tranche D Term Loans.
(a) Each Tranche D Term Lender severally agrees on the
terms and conditions set forth in this Agreement to make, and will have been
deemed to have made, loans (each, a "TRANCHE D TERM LOAN") at the times and in
the amounts specified in Section 2.07(i) provided, that the aggregate amount of
Tranche D Term Loans made by a Tranche D Term Lender hereunder shall not exceed
its Tranche D Term Commitment.
(b) The Tranche D Term Loans are not revolving in nature,
and amounts repaid or prepaid in respect thereof may not be reborrowed.
Section 2.06 Notice of Borrowing.
(a) Except in respect of the Borrowing of Tranche D Term
Loans, the Borrower shall give the Administrative Agent notice (a "NOTICE OF
BORROWING") not later than 11:00 A.M. (New York City time) on (x) one Domestic
Business Day before each Base Rate Borrowing and (y) the third Euro-Dollar
Business Day before each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) whether the Loans comprising such Borrowing are to
bear interest initially at the Base Rate or the Adjusted London
Interbank Offered Rate; and
(iv) in the case of a Euro-Dollar Borrowing, the duration
of the initial Interest Period applicable thereto, subject to the
provisions of the definition of "Interest Period."
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(b) Upon receipt of a Notice of Borrowing, the
Administrative Agent shall promptly notify each Lender of the contents thereof
and of such Lender's ratable share of such Borrowing and such Notice of
Borrowing shall not thereafter be revocable by the Borrower.
(c) Not later than 1:00 P.M. (New York City time) on the
date of each Borrowing, each Lender shall (except as provided in subsection (d)
of this Section 2.06) make available its ratable share of such Borrowing, in
Federal or other funds immediately available in New York City, to the
Administrative Agent at its address referred to in Section 11.01. Unless the
Administrative Agent determines that any applicable condition specified in
Article III has not been satisfied, the Administrative Agent will make the funds
so received from the Lenders available to the Borrower requesting such Borrowing
at the Administrative Agent's aforesaid address.
(d) If any Lender makes a new Loan hereunder to the
Borrower on a day on which the Borrower is to repay all or any part of an
outstanding Loan from such Lender, such Lender shall apply the proceeds of its
new Loan to make such repayment and only an amount equal to the difference (if
any) between the amount being borrowed and the amount being repaid shall be made
available by such Lender to the Administrative Agent as provided in subsection
(c) of this Section 2.06.
(e) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available to the Administrative Agent on the date of such Borrowing in
accordance with subsections (c) and (d) of this Section 2.06 and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such share available to the Administrative Agent,
such Lender and the Borrower severally agree to repay to the Administrative
Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative Agent, at
(i) in the case of the Borrower, a rate per annum equal to the higher of the
Federal Funds Rate and the interest rate applicable thereto pursuant to Section
2.09 and (ii) in the case of such Lender, (A) the Federal Funds Rate for the
first three days after the date of such Borrowing and (B) at a rate per annum
equal to the rate applicable to Base Rate Loans for such day plus 2.00% per
annum thereafter. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender's Loan
included in such Borrowing for purposes of this Agreement.
Section 2.07 Letters of Credit.
(a) Issuance of Revolving Credit Letters of Credit.
Subject to the terms and conditions hereof, the Issuer agrees to issue letters
of credit under this Section 2.07(a) upon the Borrower's request and for the
Borrower's account, from time to time from the Closing Date to but excluding the
sixth Domestic Business Day prior to the Termination Date; provided, however,
that in no event shall (i) the aggregate Available Amount for all Revolving
Credit Letters of Credit exceed the Revolving Credit Commitments at such time
and (ii) a Revolving
32
Credit Letter of Credit be issued with an Available Amount in excess of the
Unused Revolving Credit Commitments at such time.
(b) Issuance of Tranche D Term Letters of Credit. Subject
to the terms and conditions hereof, on the Closing Date, without further action
on the part of any Person, each of the letters of credit described on Schedule
XI, which were originally issued under the Existing CEI Credit Agreement, shall
be automatically deemed to be letters of credit issued pursuant to this Section
2.07(b) in the amounts, upon the terms and in favor of the beneficiaries
specified on Schedule XI.
(c) Participations in Letters of Credit. Upon the
issuance of each Revolving Credit Letter of Credit or Tranche D Term Letter of
Credit by the Issuer pursuant to Section 2.07(a) or (b), the Issuer shall be
deemed, without further action by any party hereto, to have sold to each
Revolving Credit Lender or Tranche D Term Lender, as the case may be, and each
such Lender shall be deemed, without further action by any party hereto, to have
purchased from the Issuer a participation in such Letter of Credit and the
related Letter of Credit Liabilities in the amount required so that the
participations of the Lenders (including the Issuer's retained participation)
therein shall be (i) with respect to the issuance of a Revolving Credit Letter
of Credit, in proportion to their respective Revolving Credit Commitments and
(ii) with respect to a Tranche D Term Letter of Credit, in proportion to their
respective Tranche D Term Commitments.
(d) Required Terms. Each Letter of Credit issued
hereunder shall:
(i) be denominated in Dollars;
(ii) by its terms expire (A) no later than one year from
the date of issuance (subject to customary rights of extension) and (B)
no later than five Domestic Business Days prior to the Termination
Date;
(iii) in the case of a Revolving Credit Letter of Credit,
be in a face amount of (A) not less than $500,000 (unless otherwise
agreed by the Issuer) and (B) not more than the amount that would,
after giving effect to the issuance thereof (and the related purchase
and sale of participations therein pursuant to Section 2.07(c)) cause
the Revolving Credit Outstandings of any Revolving Credit Lender to
exceed its Revolving Credit Commitment;
(iv) in the case of a Tranche D Term Letter of Credit, be
in a face amount of not more than the amount that would, after giving
effect to the issuance thereof (and the related purchase and sale of
participations therein pursuant to Section 2.07(c)) cause the sum of
the Tranche D Term Outstandings of any Tranche D Term Lender to exceed
its Tranche D Term Commitment;
(v) be issued solely for the purposes described in
Section 4.17; and
(vi) be in a form acceptable to the Issuer.
33
(e) Notice of Issuance. The Borrower may request that a
Letter of Credit be issued by giving the Administrative Agent and the Issuer a
notice (a "NOTICE OF ISSUANCE") at least three Domestic Business Days before
such Letter of Credit is to be issued (or such shorter period of time as shall
be acceptable to the Administrative Agent and the Issuer), specifying:
(i) the date of issuance of such Letter of Credit;
(ii) the expiry date of such Letter of Credit (which shall
comply with the requirements of Section 2.07(d)(ii));
(iii) the proposed terms of such Letter of Credit (or the
proposed form thereof shall be attached to such Notice of Issuance),
including the face amount thereof (which shall comply with the
requirements of Sections 2.07(d)(iii) and (iv)); and
(iv) the transaction that is to be supported or financed
with such Letter of Credit, including identification of the member of
the CEI Group, if any, to which such transaction relates.
Upon the receipt of a Notice of Issuance, the Administrative
Agent shall promptly notify each Revolving Credit Lender or Tranche D Term
Lender, as applicable, of the contents thereof and of the amount of such
Lender's participation in such Letter of Credit and such Notice of Issuance
shall not thereafter be revocable by the Borrower.
(f) Letter of Credit Drawings under Letters of Credit.
(i) Upon receipt from the beneficiary of any Letter of
Credit of demand for payment under such Letter of Credit, the Issuer
shall determine in accordance with the terms of such Letter of Credit
whether such request for payment should be honored.
(ii) If the Issuer determines that a demand for payment by
the beneficiary of a Letter of Credit should be honored, the Issuer
shall make available to the beneficiary in accordance with the terms of
such Letter of Credit the amount of the Letter of Credit Drawing under
such Letter of Credit. The Issuer shall thereupon promptly notify the
Borrower, the Administrative Agent and each Revolving Credit Lender or
Tranche D Term Lender, as applicable, of the amount of such Letter of
Credit Drawing paid by it and the amount of such Lender's participation
therein.
(g) Reimbursement and Other Payments by the Borrower in
Respect of Revolving Credit Letters of Credit.
(i) If a Revolving Credit Letter of Credit Drawing is
made under any Revolving Credit Letter of Credit, the Borrower
irrevocably and unconditionally agrees to reimburse the Issuer in
Dollars for all amounts paid by the Issuer upon such Revolving Credit
Letter of Credit Drawing on the date such Revolving Credit Letter of
Credit Drawing is made, together with any and all reasonable charges
and expenses which any Lender or the Issuer may pay or incur relative
to such Revolving Credit Letter of Credit Drawing. Subject to the
conditions to borrowing set forth herein, the Borrower may request in
accordance with Section 2.06, that such payment be made initially with
the
34
proceeds of a Base Rate Borrowing of Revolving Credit Loans in an
equivalent amount and, to the extent so financed, the Borrower's
obligation to make such payment shall be discharged and replaced by the
resulting Base Rate Borrowing of Revolving Credit Loans.
(ii) Each payment to be made by the Borrower pursuant to
this Section 2.07(g) shall be made, in Federal or other funds
immediately available, to the Issuer at its address referred to in
Section 11.01.
(h) Payments with Respect to Revolving Credit Letters of
Credit.
(i) Each Lender shall make available an amount equal to
its ratable share of any Revolving Credit Letter of Credit Drawing
under a Revolving Credit Letter of Credit, in Federal or other funds
immediately available in New York City, to the Issuer on the date on
which the Borrower is required to reimburse the Issuer with respect to
such Revolving Credit Letter of Credit Drawing pursuant to Section
2.07(g)(i) at the Issuer's address referred to in Section 11.01;
provided that each Lender's obligation shall be reduced by its pro rata
share of any reimbursement theretofore paid by the Borrower in respect
of such Revolving Credit Letter of Credit Drawing pursuant to Section
2.07(g). The Issuer shall notify each Revolving Credit Lender of the
amount of such Revolving Credit Lender's obligation in respect of any
Revolving Credit Letter of Credit Drawing under a Revolving Credit
Letter of Credit on the day such payment by such Revolving Credit
Lender is due. Each Revolving Credit Lender shall be subrogated to the
rights of the Issuer against the Borrower to the extent such payment
due from such Revolving Credit Lender to such Issuer is paid, plus
interest thereon, from and including the day such amount is due from
such Revolving Credit Lender to the Issuer to but excluding the day the
Borrower makes payment to the Issuer pursuant to Section 2.07(g),
whether before or after judgment, at a rate per annum equal to the sum
of 2% plus the rate applicable to Base Rate Loans for such day.
(ii) If any Revolving Credit Lender fails to pay any
amount required pursuant to subsection (i) of this Section 2.07(h) on
the date on which such payment is due, interest, payable on demand,
shall accrue on such Revolving Credit Lender's obligation to make such
payment, for each day from and including the date such payment becomes
due to but excluding the date such Revolving Credit Lender makes such
payment at a rate per annum equal to (A) the Federal Funds Rate for the
first three days after the date such payment is due and (B) at a rate
per annum equal to the rate applicable to Base Rate Loans for such day
plus 2.00% per annum thereafter.
(iii) If the Borrower shall reimburse the Issuer for any
Revolving Credit Letter of Credit Drawing under a Revolving Credit
Letter of Credit after the Revolving Credit Lenders shall have made
funds available to the Issuer with respect to such Revolving Credit
Letter of Credit Drawing in accordance with subsection (i) of this
Section 2.07(h), the Issuer shall promptly upon receipt of such
reimbursement distribute to each Revolving Credit Lender its pro rata
share thereof, including interest, to the extent received by such
Issuer.
35
(i) Tranche D Term Loans Made upon Drawing of Tranche D
Term Letters of Credit.
If a Tranche D Term Letter of Credit Drawing is made under any
Tranche D Term Letter of Credit, the Borrower irrevocably and unconditionally
agrees to reimburse the Issuer in Dollars for all amounts paid by the Issuer
upon such Tranche D Term Letter of Credit Drawing, together with any and all
reasonable charges and expenses which any Lender or the Issuer may pay or incur
relative to such Tranche D Term Letter of Credit Drawing. If the Issuer makes
any payment under a Tranche D Term Letter of Credit, the Borrower shall
reimburse the Issuer by paying such amount to the Administrative Agent on the
day that such payment is made. If the Issuer makes any payment under a Tranche D
Term Letter of Credit, and if the Borrower shall not have reimbursed the Issuer
therefor pursuant to the previous sentence, the Borrower shall, without any
further action on the part of any party hereto, be deemed to have requested the
making of Tranche D Term Loans (which shall be made initially as a Base Rate
Borrowing) in an equivalent amount and, to the extent so financed pursuant to
this Section 2.07(i), the Borrower's obligation to make such payment shall be
discharged and replaced by the resulting Base Rate Borrowing of Tranche D Term
Loans. The Issuer shall notify each Tranche D Term Lender of the amount of such
Tranche D Term Lender's obligation in respect of any Tranche D Term Letter of
Credit Drawing under a Tranche D Term Letter of Credit on the day such payment
by such Tranche D Term Lender is due. Each such Tranche D Term Lender shall, on
the day of such notification and regardless of whether one or more conditions
precedent specified in Article III shall not have been satisfied, make a loan to
the Borrower by promptly and unconditionally paying to the Administrative Agent
for the account of the Issuer the amount of such Tranche D Term Lender's ratable
share of such payment made by the Issuer in Dollars and in immediately available
funds. Each such loan made by a Tranche D Term Lender shall, for all purposes of
this Agreement, be deemed a "Tranche D Term Loan", and shall initially be made
as a Base Rate Loan. If any Tranche D Term Lender fails to make a Tranche D Term
Loan pursuant to this subsection (i) on the date on which such payment is due,
interest, payable on demand, shall accrue on such Tranche D Term Lender's
obligation to make such payment, for each day from and including the date such
payment becomes due to but excluding the date such Tranche D Term Lender makes
such payment at a rate per annum equal to (A) the Federal Funds Rate for the
first three days after the date such payment is due and (B) at a rate per annum
equal to the rate applicable to Base Rate Loans for such day plus 2.00% per
annum thereafter.
(j) The obligations of the Borrower to reimburse the
Issuer under Section 2.07(g) shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms of this Agreement,
under all circumstances whatsoever, including without limitation the following
circumstances:
(i) any lack of validity or enforceability of any
Financing Document;
(ii) any amendment or waiver of or any consent to
departure from any Financing Document (except, in the case of an
effective amendment to, waiver of or consent to a departure from any
provision of this Agreement, to the extent specified herein);
36
(iii) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against the beneficiary
of any Letter of Credit (or any Person or entity for whom such
beneficiary may be acting), the Administrative Agent, the Issuer or any
Lender or any other Person or entity, whether in connection with this
Agreement, any other Financing Document or any unrelated transaction;
(iv) any statement or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(v) payment by the Issuer under any Letter of Credit
against presentation of a draft or document which does not comply with
the terms of such Letter of Credit; or
(vi) to the extent permitted under applicable law, any
other circumstance or happening whatsoever, whether or not similar to
any of the foregoing.
(k) The several obligations of (i) the Lenders to the
Issuer hereunder and (ii) the Tranche D Term Lenders to make Tranche D Term
Loans under Section 2.07(i), shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever and shall not be affected by any
circumstance, including, without limitation, (A) any set-off, counterclaim,
recoupment, defense or other right which any such Lender or any other Person may
have against the Administrative Agent, the Issuer, the Borrower or any other
Person for any reason whatsoever; (B) the occurrence or continuance of a Default
or an Event of Default or the termination of the Loans or any Letter of Credit;
(C) any adverse change in the condition (financial or otherwise) of any Credit
Party or any other Person; (D) any breach of any Financing Document by any party
thereto; (E) the fact that any condition precedent to the issuance of, or the
making of any payment under, any Letter of Credit was not in fact met; (F) any
violation or asserted violation of law by any Lender or any Affiliate thereof;
or (G) to the extent permitted under applicable law, any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
Each payment by each Lender to the Issuer for its own account shall be made
without any offset, abatement, withholding or reduction whatsoever. If the
Issuer is required at any time (whether before or after the Termination Date) to
return to the Borrower or to a trustee, receiver, liquidator, custodian or other
similar official any portion of the payments made by the Borrower to such Issuer
in payment of any Reimbursement Obligation or interest thereon upon the
insolvency of the Borrower, or the commencement of any case or proceeding under
any bankruptcy, insolvency or other similar law with respect to the Borrower,
each Revolving Credit Lender or Tranche D Term Lender, as applicable, shall, on
demand of the Issuer, forthwith return to the Issuer any amounts transferred to
such Lender by the Issuer in respect thereof pursuant to this subsection plus
such Lender's pro rata share of any interest on such payments required to be
paid to the Person recovering such payments plus interest on the amount so
demanded from the day such demand is made, if such demand is made by 2:00 P.M.
(New York City time), or from the next following Domestic Business Day, if such
demand is made after 2:00 P.M. (New York City time), to but not including the
day such amounts are returned by such Lender to the Issuer at a rate per annum
for each day equal to (A) the Federal Funds Rate for the day of such demand and
(B) the Base Rate plus 1% for each day thereafter. Notwithstanding the foregoing
or any other provision contained herein, in no event shall any Lender be
obligated to make any Loan to the Borrower to the extent that such payment would
37
cause such Lender's pro rata share of the Revolving Credit Outstandings or
Tranche D Term Outstandings hereunder to exceed such Lender's Revolving Credit
Commitment or Tranche D Term Commitment, respectively; provided that the
foregoing shall not affect the obligation of the Borrower (which is absolute,
unconditional and irrevocable) to reimburse the Issuer for the entire amount of
each payment made by the Issuer under a Letter of Credit, including any amount
thereof that is not paid by any Lender to the Issuer (pursuant to this sentence
or otherwise).
(l) Letter of Credit Commission; Issuance Fee.
(i) Letter of Credit Commission. The Borrower agrees to
pay to the Administrative Agent a letter of credit commission with
respect to each Letter of Credit issued hereunder, computed for each
day from and including the date of issuance of such Letter of Credit to
but excluding the last day a Letter of Credit Drawing is available
under such Letter of Credit, at the Applicable Letter of Credit
Commission Rate on the aggregate amount available for drawing under
such Letter of Credit from time to time (whether or not any conditions
to drawing can then be met), such fee to be for the account of the
Revolving Credit Lenders or the Tranche D Term Lenders, as the case may
be, ratably in proportion to their Revolving Credit Outstandings or
Tranche D Term Outstandings. Such commission shall be payable quarterly
in arrears on the last Domestic Business Day of each January, April,
July and October and upon the Termination Date.
(ii) Issuance Fee. The Borrower shall pay to the Issuer
for its own account such fees with respect to each Letter of Credit
issued by the Issuer for the account of the Borrower as shall have been
agreed between the Borrower and the Issuer.
(iii) Limited Liability of the Issuer. As between the
Issuer, on the one hand, and the Borrower, on the other, the Borrower
assumes all risks of any acts or omissions of the beneficiary and any
transferee of any Letter of Credit with respect to its use of such
Letter of Credit. Neither the Issuer nor any of its respective
employees, officers or directors shall be liable or responsible for:
(A) the use which may be made of any Letter of Credit or for any acts
or omissions of any beneficiary or transferee in connection therewith;
(B) the validity, sufficiency or genuineness of documents, or of any
endorsement(s) thereon, even if such documents should in fact prove to
be in any or all respects invalid, insufficient, fraudulent or forged;
(C) payment by the Issuer against presentation of documents which do
not comply with the terms of any Letter of Credit, including failure of
any documents to bear any reference or adequate reference to such
Letter of Credit; or (D) any other circumstance whatsoever in making or
failing to make payment under any Letter of Credit; provided that the
Borrower shall have a claim against the Issuer, and the Issuer shall be
liable to the Borrower, to the extent, but only to the extent, of any
direct, as opposed to consequential or special, damages suffered by the
Borrower which are found in a final, unappealable judgment of a court
of competent jurisdiction to have been caused by (1) the Issuer's
willful misconduct or gross negligence in determining whether documents
presented under any Letter of Credit comply with the terms thereof or
(2) the Issuer's willful failure to pay, or gross negligence resulting
in a failure to pay, any Letter of Credit Drawing after the
presentation to it by the beneficiary (or any transferee of the Letter
of Credit) of a draft
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and other required documentation strictly complying with the terms and
conditions of the Letter of Credit. In furtherance and not in
limitation of the foregoing, the Issuer may accept documents that
appear on their face to be in order, without responsibility for further
investigation.
(iv) Issuer and Affiliates. The Issuer shall have the same
rights and powers under the Financing Documents as any other Lender and
may exercise or refrain from exercising the same as though it was not
the Issuer (in each case to the extent the Issuer is also a Lender),
and the Issuer and its Affiliates may accept deposits from, lend money
to, and generally engage in any kind of business with any member of the
CEI Group or Affiliate of a member of the CEI Group as if it were not
the Issuer hereunder.
(m) Applicability of ISP98. Unless otherwise expressly
agreed by the Issuer and the Borrower when a Letter of Credit is issued, the
rules of the "International Standby Practices 1998" published by the Institute
of International Banking Law and Practice (or such later version thereof as may
be in effect at the time issuance) shall apply to such Letter of Credit.
Section 2.08 Evidence of Debt.
(a) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing the indebtedness of the
Borrower to such Lender resulting from each Loan owing to such Lender from time
to time, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder. The Borrower agrees that upon notice by
any Lender to the Borrower (with a copy of such notice to the Administrative
Agent) to the effect that a promissory note or other evidence of indebtedness is
required or appropriate in order for such Lender to evidence (whether for
purposes of pledge, enforcement or otherwise) the Loans owing to, or to be made
by, such Lender, the Borrower shall promptly execute and deliver to such Lender,
with a copy to the Administrative Agent, a Revolving Credit Note, a Tranche A
Term Note, a Tranche B Term Note, a Tranche C Term Note or a Tranche D Term
Note, as applicable, in substantially the form of Exhibits X-0, X-0, X-0, X-0 or
A-5, respectively, payable to the order of such Lender in a principal amount
equal to the Loans owing to, or to be made by, such Lender. All references to
Notes in the Financing Documents shall mean Notes, if any, issued hereunder.
(b) The Register maintained by the Administrative Agent
pursuant to Section 11.06(f) shall include a control account, and a subsidiary
account for each Lender, in which accounts (taken together) shall be recorded
(i) the date and amount of each Loan made hereunder (or deemed to be made
hereunder), whether such Loan bears interest at the Base Rate or the Adjusted
London Interbank Offered Rate, and, if appropriate, the Interest Period
applicable thereto; (ii) the terms of each Assignment and Assumption Agreement
delivered to and accepted by it; (iii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder; and (iv) the amount of any sums received by the Administrative Agent
from the Borrower hereunder and each Lender's share thereof.
(c) Entries made in good faith by the Administrative
Agent in the Register pursuant to subsection (b) above, and by each Lender in
its account or accounts pursuant to subsection (a) above, shall be prima facie
evidence of the amount of principal and interest due
39
and payable or to become due and payable from the Borrower to, in the case of
the Register, each Lender and, in the case of such account or accounts, such
Lender, under this Agreement, absent demonstrable error; provided, however, that
the failure of the Administrative Agent or such Lender to make an entry, or any
finding that an entry is incorrect, in the Register or such account or accounts,
shall not limit or otherwise affect the obligations of the Borrower under this
Agreement.
Section 2.09 Interest Rates.
(a) Subject to Section 2.09(c), each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, at a rate per annum equal to the
Base Rate plus the Base Rate Margin for such day. Such interest shall be payable
quarterly in arrears on January 31, April 30, July 31 and October 31 of each
year.
(b) Subject to Section 2.09(c), each Euro-Dollar Loan
shall bear interest on the outstanding principal amount thereof, for each day
during each Interest Period applicable thereto, at a rate per annum equal to the
sum of the Adjusted London Interbank Offered Rate applicable to such Interest
Period plus Euro-Dollar Margin for such day. Such interest shall be payable for
each Interest Period on the last day thereof and, if such Interest Period is
longer than three months, at intervals of three months after the first day
thereof.
(c) Immediately upon the occurrence and during the
continuance of any Event of Default of the type described in Sections 8.01(a),
8.01(l), 8.01(m), 8.01(n) or 8.01(o), and upon written notice from the Required
Lenders (or the Administrative Agent on behalf of the Required Lenders) upon the
occurrence and during the continuance of any other Event of Default, the
Borrower shall pay interest on:
(i) (A) the outstanding principal amount of each Base
Rate Loan owing to each Lender, payable on demand, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to
be paid on such Base Rate Loan pursuant to Section 2.09(a) above and
(B) to the fullest extent permitted by law, the amount of any interest
that is not paid when due, from the date such amount shall be due until
such amount shall be paid in full, at a rate per annum equal to 2% per
annum above the rate per annum required to be paid on the Base Rate
Loans on which such interest has accrued pursuant to Section 2.09(a)
above;
(ii) (A) the outstanding principal amount of each
Euro-Dollar Loan owing to each Lender Party payable on demand, at a
rate per annum equal at all times to a rate per annum equal to the
higher of (1) the sum of 2% plus the Euro-Dollar Margin for such day
plus the Adjusted London Interbank Offered Rate applicable to such
Euro-Dollar Loan and (2) the sum of 2% plus the Euro-Dollar Margin for
such day plus the quotient obtained (rounded upward, if necessary, to
the next higher 1/100th of 1%) by dividing (x) the average (rounded
upward, if necessary, to the next higher 1/16th of 1%) of the
respective rates per annum at which one day (or, if such amount due
remains unpaid more than three Euro-Dollar Business Days, then for such
other period of time not longer than three months as the Administrative
Agent may select) deposits in dollars in an amount
40
approximately equal to such overdue payment are offered to the
Administrative Agent in the London interbank market for the applicable
period determined as provided above by (y) 1.00 minus the Euro-Dollar
Reserve Percentage (or, if the circumstances described in clause (a) or
(b) of Section 10.01 shall exist, at a rate per annum equal to the sum
of 2% plus the rate applicable to Base Rate Loans for such day)(the
"EURO-DOLLAR DEFAULT RATE") and (B) to the fullest extent permitted by
law, the amount of any interest that is not paid when due, from the
date such amount shall be due until such amount shall be paid in full,
at a rate per annum equal to the Euro-Dollar Default Rate the
Euro-Dollars Loans on which such interest has accrued pursuant to
Section 2.09(b) above; and
(iii) (A) the outstanding principal amount of all
Reimbursement Obligations owing to the Issuer, payable on demand, at a
rate per annum equal at all times to 2% per annum above the rate per
annum required to be paid on Base Rate Loans and (B) to the fullest
extent permitted by law, the amount of any interest that is not paid
when due, from the date such amount shall be due until such amount
shall be paid in full, at a rate per annum equal to 2% per annum above
the rate per annum required to be paid on Base Rate Loans.
(d) The Administrative Agent shall determine each
interest rate applicable to the Loans and Reimbursement Obligations hereunder.
The Administrative Agent shall give prompt notice to the Borrower and the
participating Lenders of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of demonstrable error.
Section 2.10 Method of Electing Interest Rates.
(a) The Loans included in each Borrowing shall bear
interest initially at the type of rate specified by the Borrower in the
applicable Notice of Borrowing. Thereafter, the Borrower may from time to time
elect to change or continue the type of interest rate borne by each Group of
Loans (subject to Section 2.10(e) and the provisions of Article X), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may
elect to convert such Loans to Euro-Dollar Loans as of any Euro-Dollar
Business Day; and
(ii) if such Loans are Euro-Dollar Loans, the Borrower may
elect to convert such Loans to Base Rate Loans as of any Domestic
Business Day or elect to continue such Loans as Euro-Dollar Loans for
an additional Interest Period, subject to Section 2.18 if any such
conversion is effective on any day other than the last day of an
Interest Period applicable to such Loans.
(b) Each such election shall be made by delivering a
notice (a "NOTICE OF INTEREST RATE ELECTION") to the Administrative Agent not
later than 11:00 A.M. (New York City time) on the third Euro-Dollar Business Day
before the conversion or continuation selected in such notice is to be effective
(unless the relevant Loans are to be converted from Euro-Dollar Loans to Base
Rate Loans, in which case such notice shall be delivered to the Administrative
Agent not later than 11:00 A.M. (New York City time) on the date such conversion
is to be effective). A Notice of Interest Rate Election may, if it so specifies,
apply to only a portion of
41
the aggregate principal amount of the relevant Group of Loans; provided that (i)
such portion is allocated ratably among the Loans comprising such Group of Loans
and (ii) the portion to which such Notice of Interest Rate Election applies, and
the remaining portion to which it does not apply, are each at least $5,000,000
(unless such portion is comprised of Base Rate Loans). If no such notice is
timely received before the end of an Interest Period for any Group of Loans that
are Euro-Dollar Loans, the Borrower shall be deemed to have elected that such
Group of Loans be converted to Base Rate Loans at the end of such Interest
Period.
(c) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall comply with the
applicable clause of Section 2.10(a) above;
(iii) if the Loans comprising such Group of Loans are to be
converted, the new type of Loans and, if the Loans resulting from such
conversion are to be Euro-Dollar Loans, the duration of the next
succeeding Interest Period applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar
Loans for an additional Interest Period, the duration of such
additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate
Election shall comply with the provisions of the definition of Interest Period.
(d) Promptly after receiving a Notice of Interest Rate
Election from the Borrower pursuant to Section 2.10(b), the Administrative Agent
shall notify each Lender of the contents thereof and such notice shall not
thereafter be revocable by any Borrower.
(e) The Borrower shall not be entitled to elect to
convert any Loans to, or continue any Loans for an additional Interest Period
as, Euro-Dollar Loans if (i) the aggregate principal amount of any Group of
Loans consisting of Euro-Dollar Loans created or continued as a result of such
election would be less than $5,000,000 or (ii) a Default or Event of Default
shall have occurred and be continuing when the Borrower delivers notice of such
election to the Administrative Agent.
(f) If any Loan is converted to a different type of Loan,
the Borrower shall pay, on the date of such conversion, the interest accrued to
such date on the principal amount being converted.
Section 2.11 Fees.
(a) Revolving Credit Commitment Fee. The Borrower shall
pay to the Administrative Agent, for the account of the Revolving Credit
Lenders, ratably in proportion to their Revolving Credit Commitments, a
commitment fee of 0.70% per annum on the daily amount of the Unused Revolving
Credit Commitments. Such commitment fee shall accrue from and including the date
hereof to but excluding the Termination Date (or earlier date of termination of
the Revolving Credit Commitments in their entirety). Accrued commitment fees
42
under this Section 2.11(a) shall be payable quarterly in arrears on January 31,
April 30, July 31 and October 31 of each year and upon the date of termination
of the Revolving Credit Commitments in their entirety.
(b) Tranche C Term Commitment Fee. The Borrower shall pay
to the Administrative Agent, for the account of the Tranche C Term Lenders,
ratably in proportion to their Tranche C Term Commitments, a commitment fee of
0.70% per annum on the daily amount of the Unused Tranche C Term Commitments.
Such commitment fee shall accrue from and including the date hereof to but
excluding the Termination Date (or earlier date of termination of the Tranche C
Term Commitments in their entirety). Accrued commitment fees under this Section
2.11(b) shall be payable quarterly in arrears on January 31, April 30, July 31
and October 31 of each year and upon the date of termination of the Tranche C
Term Commitments in their entirety.
(c) Tranche D Term Commitment Fee. The Borrower shall pay
to the Administrative Agent, for the account of the Tranche D Term Lenders,
ratably in proportion to their Tranche D Term Commitments, a commitment fee of
0.70% per annum on the daily amount of the Unused Tranche D Term Commitments.
Such commitment fee shall accrue from and including the date hereof to but
excluding the Termination Date (or earlier date of termination of the Tranche D
Term Commitments in their entirety). Accrued commitment fees under this Section
2.11(c) shall be payable quarterly in arrears on January 31, April 30, July 31
and October 31 of each year and upon the date of termination of the Tranche D
Term Commitments in their entirety.
(d) Upfront Fee. The Borrower shall pay to the
Administrative Agent on the Closing Date, for the ratable account of each
Lender, an upfront fee equal to 1.00% of the Commitments.
(e) Administrative Agent's Fee. The Borrower shall pay to
the Administrative Agent, for its own account, additional fees, the amount and
dates of payment of which are embodied in a separate agreement between the
Borrower and the Administrative Agent.
(f) Collateral Agent's Fee. The Borrower shall pay to the
Collateral Agent, for its own account, additional fees, the amount and dates of
payment of which are embodied in a separate agreement between the Borrower and
the Collateral Agent.
Section 2.12 Termination and Reduction of Commitments.
(a) Optional Termination or Reduction of Revolving Credit
Commitments.
The Borrower may, upon at least three Domestic Business Days'
notice to the Administrative Agent, (i) terminate the Revolving Credit
Commitments in their entirety at any time, if no Revolving Credit Loans or
Revolving Credit Letters of Credit are outstanding at such time or (ii) ratably
reduce from time to time by an aggregate amount of $1,000,000 or any larger
multiple thereof, the aggregate amount of the Revolving Credit Commitments in
excess of the aggregate Revolving Credit Outstandings.
43
(b) Mandatory Termination and Reduction of Commitments.
(i) The Revolving Credit Commitments shall be reduced on
the date of each prepayment of the Revolving Credit Loans made pursuant
to Section 2.15, other than prepayments consisting of Specified
Prepayments.
(ii) The Revolving Credit Commitments shall terminate on
the Termination Date.
(iii) The Tranche A Term Commitments shall terminate upon
the making of the Tranche A Term Loans on the Closing Date.
(iv) The Tranche B Term Commitments shall terminate upon
the making of the Tranche B Term Loans on the Closing Date.
(v) The Tranche C Term Commitments shall be reduced on
each day Tranche C Term Loans are made in the amount of such Tranche C
Term Loans.
(vi) The Tranche C Term Commitments shall be reduced to an
aggregate of $8,100,000 on Xxxxx 00, 0000 (xx not previously reduced to
an amount less than $8,100,000 prior to such date).
(vii) The Tranche C Term Commitments shall terminate at the
expiration of the Tranche C Term Availability Period.
(viii) The Tranche D Term Commitments shall be reduced on
each day a Tranche D Term Letter of Credit expires or is returned for
cancellation to the Issuer, in the amount equal to the undrawn face
amount of such Tranche D Term Letter of Credit.
(ix) The Tranche D Term Commitments shall be reduced on
each day Tranche D Term Loans are made in the amount of such Tranche D
Term Loans.
(x) The Tranche D Term Commitments shall terminate on the
Termination Date.
(c) Commitment Reductions Permanent. All reductions of
the Commitments pursuant to this Section 2.12 shall be permanent.
Section 2.13 Repayment of the Loans.
Each Loan shall mature, and the principal amount thereof shall
be due and payable in full (together with interest accrued thereon), on the
Termination Date.
Section 2.14 Optional Prepayment of the Loans.
(a) The Borrower shall have no right to prepay the
principal amount of any Loan other than as provided in this Section 2.14.
44
(b) Subject in the case of any Euro-Dollar Loans to
Section 2.18, the Borrower may, upon at least one Domestic Business Day's notice
to the Administrative Agent, prepay any Loans that bear interest at the Base
Rate or upon at least three Euro-Dollar Business Days' notice to the
Administrative Agent, prepay any Euro-Dollar Loans, in each case in whole at any
time, or from time to time in part in amounts aggregating $1,000,000 or any
larger multiple of $1,000,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment. All such
prepayments shall be applied to the Loans in the following priority:
(i) first, to the prepayment of the outstanding Tranche B
Term Loans, Tranche C Term Loans and Tranche D Term Loans pro rata;
(ii) second, to the prepayment of the outstanding Tranche
A Term Loans; and
(iii) third, to the prepayment of the outstanding Revolving
Credit Loans (without a corresponding reduction in the Revolving Credit
Commitments).
(c) Upon receipt of a notice of prepayment pursuant to
this Section, the Administrative Agent shall promptly notify each Lender of the
contents thereof and of such Lenders' ratable share of such prepayment and such
notice shall not thereafter be revocable by the Borrower.
Section 2.15 Extraordinary Mandatory Prepayments of the Loans
and Provision of Cash Collateral.
The Borrower shall prepay the Loans and provide cash
collateral in respect of the Letter of Credit as follows:
(a) To the extent not prohibited or limited by a contract
or other agreement existing on the Closing Date, upon receipt by any member of
the CEI Group of any of the following:
(i) Net Cash Proceeds from any Asset Sale (including,
without limitation, (A) any Net Cash Proceeds received in respect of
the sale, lease or other disposition of the Turbine Assets and (B) any
such Net Cash Proceeds released from any escrow, holdback or similar
arrangement (including, without limitation, Net Cash Proceeds from
approximately $26,000,000 held in escrow on the date hereof resulting
from the sale of CEI's Green Country Project));
(ii) Net Cash Proceeds from the incurrence of Debt
permitted by Section 7.01(a)(iii) or Net Cash Proceeds from the
incurrence of Debt in excess of the Debt being refinanced, replaced,
refunded or extended pursuant to Sections 7.01(b)(iv)(A) or
7.01(c)(iii)(A);
(iii) Net Cash Proceeds from any Equity Issuance by CEI;
45
(iv) any net cash resulting from unwinding, termination,
amendment or modification of any Hedge Agreement, if such cash flow is
not used to enter into another Hedge Agreement;
(v) any net cash received in connection with the
renegotiation, restructuring, amendment or termination of any power
purchase agreement, fuel supply agreement or other "project-level"
agreement to which any member of the CEI Group is a party; or
(vi) cash dividends or other distributions paid by any
Subsidiary of CEI owning a direct or indirect Equity Interest in
respect of the Quachita Project or Dominican Republic Project (net of
all federal, state, provincial, foreign and local taxes payable to
relevant tax authorities);
then, the Borrower shall promptly (and in any event within one Domestic Business
Day or as soon as otherwise allowable if limited by a contract or other
agreement existing on the Closing Date) prepay the Loans (together with accrued
interest thereon) and cash collateralize the Letters of Credit in an amount
equal to amounts described above in the order and priority set forth in Section
2.15(d).
(b) The Borrower shall promptly (and in any event within
one Business Day) prepay the Loans (together with all accrued interest thereon)
and cash collateralize the Letters of Credit in an amount equal to the amount by
which all severance and similar payments made during any fiscal year of CEI by
the members of the CEI Group to any individual employee, officer or director of
any member of the CEI Group under employment contracts or arrangements entered
into after the Closing Date exceed $1,000,000.
(c) If, on (i) January 31, 2005, the sum of (A) the
outstanding Loans, (B) the Available Amount of outstanding Letters of Credit and
(C) the unused Commitments exceeds the difference between (1) $184,997,500.00
and (2) the sum of (x) the Specified Prepayments made on or prior to such date
and (y) prepayments made pursuant to Section 2.15(b) made on or prior to such
date, or (ii) July 31, 2005, the sum of (A) the outstanding Loans, (B) the
Available Amount of outstanding Letters of Credit and (C) the unused Commitments
exceeds the difference between (1) $173,997,500.00 and (2) the sum of (x) the
Specified Prepayments made on or prior to such date and (y) prepayments made
pursuant to Section 2.15(b) on or prior to such date, then, in each case, the
Borrower shall terminate the unused Commitments and/or prepay Loans and cash
collateralize Letters of Credit on such dates in an amount equal to such excess.
(d) All prepayments of the Loans and cash
collateralization of Letters of Credit required in Sections 2.15(a), (b) and (c)
shall be applied to the Loans and the Letters of Credit in the following
priority:
(i) first, to the payment of accrued interest on the
Tranche B Term Loans, Tranche C Term Loans and Tranche D Term Loans and
letter of credit commissions on the Tranche D Term Letters of Credit,
pro rata;
(ii) second, to the prepayment of the Tranche B Term
Loans, Tranche C Term Loans and Tranche D Term Loans pro rata;
46
(iii) third, to the payment of accrued interest on the
Tranche A Term Loans;
(iv) fourth, to the prepayment of the Tranche A Term
Loans;
(v) fifth, deposited in the Tranche D Term Letter of
Credit Cash Collateral Account to cash collateralize the outstanding
Tranche D Term Letters of Credit;
(vi) sixth, to pay any unpaid Reimbursement Obligations in
respect of, Letter of Credit Drawings;
(vii) seventh, deposited in the Revolving Credit Letter of
Credit Cash Collateral Account to cash collateralize the outstanding
Revolving Credit Letters of Credit;
(viii) eighth, to the payment of accrued interest on the
Revolving Credit Loans, letter of credit commissions
on the Revolving Credit Letters of Credit and any interest or other
amount owing in respect of, Letter of Credit Drawings; and
(ix) ninth, to the prepayment of the Revolving Credit
Loans.
(e) If at any time, the Revolving Credit Outstandings at
such time exceeds the Revolving Credit Commitments at such time, the Borrower
shall forthwith prepay the Revolving Credit Loans then outstanding in an amount
equal to such excess, together with accrued interest, and if no Revolving Credit
Loans are then outstanding, the Borrower shall forthwith cash collateralize such
excess by paying to the Administrative Agent immediately available funds in the
amount of such excess for deposit in the Revolving Credit Letter of Credit Cash
Collateral Account.
Section 2.16 Ordinary Mandatory Prepayments of the Loans and
Provision of Cash Collateral.
(a) By 12:00 P.M. (New York City time) on the third
Domestic Business Day of each calendar month, the Collateral Agent shall remit,
by wire transfer of immediately available funds, 100% of the funds on deposit in
the Debt Account to the Administrative Agent, which transfer shall be used
solely to prepay the outstanding Loans and other Obligations outstanding under
the Financing Documents and to cash collateralize outstanding Letters of Credit,
in each case as provided herein.
(b) All prepayments of the Loans and cash
collateralization of the Letters of Credit required in this Section 2.16 shall
be applied to the Loans and the Letters of Credit in the following priority:
(i) first, to the payment of accrued interest on the
Revolving Credit Loans, letter of credit commissions on the Revolving
Credit Letters of Credit and any interest or other amount owing in
respect of, Letter of Credit Drawings;
(ii) second, to the payment of accrued interest on the
Tranche B Term Loans, Tranche C Term Loans and Tranche D Term Loans and
letter of credit commissions on the Tranche D Term Letters of Credit,
pro rata;
47
(iii) third, to the payment of accrued interest on the
Tranche A Term Loans;
(iv) fourth, to the prepayment of the Revolving Credit
Loans (without a corresponding reduction in the Revolving Credit
Commitments);
(v) fifth, to the prepayment of the Tranche B Term Loans,
Tranche C Term Loans and Tranche D Term Loans, pro rata;
(vi) sixth, to the prepayment of the Tranche A Term Loans;
(vii) seventh, deposited in the Tranche D Term Letter of
Credit Cash Collateral Account to cash collateralize the outstanding
Tranche D Term Letters of Credit;
(viii) eighth, to pay any unpaid Reimbursement Obligations
in respect of, Letter of Credit Drawings; and
(ix) ninth, deposited in the Revolving Credit Letter of
Credit Cash Collateral Account to cash collateralize the outstanding
Revolving Credit Letters of Credit.
Section 2.17 General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of,
and interest on, the Loans and Reimbursement Obligations and of fees hereunder,
not later than 11:00 A.M. (New York City time) on the date when due, in Federal
or other funds immediately available in New York City, without set-off,
counterclaim or other deduction, to the Administrative Agent at its address
referred to in Section 11.01. The Administrative Agent will promptly distribute
to the Issuer and each Lender its ratable share of each such payment received by
the Administrative Agent for the account of the Issuer and the Lenders. Whenever
any payment of principal of, or interest on, the Base Rate Loans or
Reimbursement Obligations or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due from the
Borrower to the Issuer or the Lenders hereunder that the Borrower will not make
such payment in full, the Administrative Agent may assume that such Borrower has
made such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to the Issuer and each Lender on such due date an amount equal to
the amount then due to the Issuer or such Lender. If and to the extent that the
Borrower shall not have so made such payment, the Issuer and each Lender shall
repay to the Administrative Agent forthwith on demand such amount distributed to
the Issuer or such Lender together with interest thereon, for each day from the
date such amount is distributed to the Issuer or such Lender until
48
the date the Issuer or such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
Section 2.18 Funding Losses.
If the Borrower makes any payment of principal with respect to
any Euro-Dollar Loan or any Euro-Dollar Loan is converted to a Base Rate Loan
(pursuant to Article II, VIII or X or otherwise) on any day other than the last
day of an Interest Period applicable thereto, or the last day of an applicable
period fixed pursuant to Section 2.10(c), or if the Borrower fails to borrow,
prepay, convert or continue any Euro-Dollar Loans after notice has been given to
any Lender Party in accordance with the term hereof, the Borrower shall
reimburse each Lender Party within 15 days after demand for any resulting loss
or expense incurred by it (or by an existing or prospective Participant in the
related Loan), including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after such payment or conversion or failure to borrow,
prepay, convert or continue.
Section 2.19 Computation of Interest and Fees.
Interest based on the Base Rate hereunder shall be computed on
the basis of a year of 365 days (or 366 days in a leap year) and paid for the
actual number of days elapsed (including the first day but excluding the last
day). All other interest and fees shall be computed on the basis of a year of
360 days and paid for the actual number of days elapsed (including the first day
but excluding the last day).
Section 2.20 Revolving Credit Letter of Credit Cash Collateral
Account.
(a) All amounts required to be deposited as cash
collateral with the Collateral Agent with respect to a Revolving Credit Letter
of Credit shall be deposited in the Revolving Credit Letter of Credit Cash
Collateral Account, to be held, applied or released for application as provided
in this Section 2.20.
(b) The Borrower hereby grants to the Collateral Agent
for the ratable benefit of the Secured Parties as their respective interests
appear, a security interest in the Borrower's right, title and interest in and
to the Revolving Credit Letter of Credit Cash Collateral Account and all funds
and assets from time to time credited thereto, all interest, dividends,
distributions, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such funds and assets, and all certificates and instruments, if any, from
time to time representing or evidencing the Revolving Credit Letter of Credit
Cash Collateral Account and all of proceeds of any of the foregoing (the
"REVOLVING CREDIT LETTER OF CREDIT CASH COLLATERAL"), to secure all of the
Borrower's Obligations hereunder and the other Financing Documents.
(c) If and when any portion of the Revolving Credit
Letter of Credit Liabilities on which any deposit of cash collateral was based
(the "REVOLVING CREDIT LETTER OF CREDIT CONTINGENT EXPOSURE") shall become fixed
(a "REVOLVING CREDIT LETTER OF CREDIT DIRECT EXPOSURE") as a result of the
payment by the Issuer of a draft presented under any Revolving Credit Letter of
Credit, the amount of such Revolving Credit Letter of Credit Direct
49
Exposure (but not more than the amount in the Revolving Credit Letter of Credit
Cash Collateral Account at the time) shall be withdrawn by the Collateral Agent
from the Revolving Credit Letter of Credit Cash Collateral Account and shall be
paid to the Issuer to be applied against such Revolving Credit Letter of Credit
Direct Exposure and the Revolving Credit Letter of Credit Contingent Exposure
shall thereupon be reduced by such amount.
(d) Interest and other payments and distributions made on
or with respect to the Revolving Credit Letter of Credit Cash Collateral held by
the Collateral Agent shall be for the account of the Borrower and shall
constitute additional Revolving Credit Letter of Credit Cash Collateral to be
held by the Collateral Agent; provided that the Collateral Agent shall have no
obligation to invest any Revolving Credit Letter of Credit Cash Collateral on
behalf of the Borrower or any other Person. Beyond the exercise of reasonable
care in the custody thereof, the Collateral Agent shall have no duty as to any
Revolving Credit Letter of Credit Cash Collateral in its possession or control
or in the possession or control of any agent or bailee or any income thereon or
as to the preservation of rights against prior parties or any other rights
pertaining thereto. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Revolving Credit Letter
of Credit Cash Collateral in its possession if the Revolving Credit Letter of
Credit Cash Collateral is accorded treatment substantially equal to that which
it accords its own property, and shall not be liable or responsible for any loss
or damage to any of the Revolving Credit Letter of Credit Cash Collateral, or
for any diminution in the value thereof, by reason of the act or omission of any
agent or bailee selected by the Collateral Agent in good faith. All expenses and
liabilities incurred by the Collateral Agent in connection with taking, holding
and disposing of any Revolving Credit Letter of Credit Cash Collateral
(including customary custody and similar fees with respect to any Revolving
Credit Letter of Credit Cash Collateral held directly by the Collateral Agent
and the Revolving Credit Letter of Credit Cash Collateral Account) shall be paid
by the Borrower from time to time upon demand. Upon an Event of Default, the
Collateral Agent shall be entitled to apply (and, at the request of the Required
Lenders, shall apply) Revolving Credit Letter of Credit Cash Collateral or the
proceeds thereof to payment of any such expenses, liabilities and fees. After
the termination of the Revolving Credit Commitments, the termination of all
Revolving Credit Letters of Credit and the repayment in full of all outstanding
Reimbursement Obligations in respect of the Revolving Credit Letters of Credit,
the Collateral Agent shall transfer the remaining Revolving Credit Letter of
Credit Cash Collateral or the proceeds thereof to the Tranche D Term Letter of
Credit Cash Collateral Account or, if there are no outstanding Tranche D Term
Letters of Credit outstanding, to the Debt Account. Notwithstanding any other
term or provision of this Agreement, and for the avoidance of doubt, the
Revolving Credit Letter of Credit Cash Collateral shall be paid first to the
Issuer in satisfaction of any Revolving Credit Letter of Credit Direct Exposure
or Revolving Credit Letter of Credit Contingent Exposure and no Revolving Credit
Letter of Credit Cash Collateral shall be released or disbursed to any party
other than the Issuer until the satisfaction of all Revolving Credit Letter of
Credit Liabilities and the termination of the Revolving Credit Commitments and
all Revolving Credit Letters of Credit.
Section 2.21 Tranche D Term Letter of Credit Cash Collateral
Account.
(a) All amounts required to be deposited as cash
collateral with the Collateral Agent with respect to a Tranche D Term Letter of
Credit shall be deposited in the Tranche D
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Term Letter of Credit Cash Collateral Account, to be held, applied or released
for application as provided in this Section 2.21.
(b) The Borrower hereby grants to the Collateral Agent
for the ratable benefit of the Secured Parties as their respective interests
appear, a security interest in the Borrower's right, title and interest in and
to the Tranche D Term Letter of Credit Cash Collateral Account and all funds and
assets from time to time credited thereto, all interest, dividends,
distributions, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such funds and assets, and all certificates and instruments, if any, from
time to time representing or evidencing the Tranche D Term Letter of Credit Cash
Collateral Account and all of proceeds of any of the foregoing (the "TRANCHE D
TERM LETTER OF CREDIT CASH COLLATERAL"), to secure all of the Borrower's
Obligations hereunder and the other Financing Documents.
(c) If and when any portion of the Tranche D Term Letter
of Credit Liabilities on which any deposit of cash collateral was based (the
"TRANCHE D TERM LETTER OF CREDIT CONTINGENT EXPOSURE") shall become fixed (a
"TRANCHE D TERM LETTER OF CREDIT DIRECT EXPOSURE") as a result of the payment by
the Issuer of a draft presented under any Tranche D Term Letter of Credit, the
amount of such Tranche D Term Letter of Credit Direct Exposure (but not more
than the amount in the Tranche D Term Letter of Credit Cash Collateral Account
at the time) shall be withdrawn by the Collateral Agent from the Tranche D Term
Letter of Credit Cash Collateral Account and shall be paid to the Issuer to be
applied against such Tranche D Term Letter of Credit Direct Exposure and the
Tranche D Term Letter of Credit Contingent Exposure shall thereupon be reduced
by such amount.
(d) Interest and other payments and distributions made on
or with respect to the Tranche D Term Letter of Credit Cash Collateral held by
the Collateral Agent shall be for the account of the Borrower and shall
constitute additional Tranche D Term Letter of Credit Cash Collateral to be held
by the Collateral Agent; provided that the Collateral Agent shall have no
obligation to invest any Tranche D Term Letter of Credit Cash Collateral on
behalf of the Borrower or any other Person. Beyond the exercise of reasonable
care in the custody thereof, the Collateral Agent shall have no duty as to any
Tranche D Term Letter of Credit Cash Collateral in its possession or control or
in the possession or control of any agent or bailee or any income thereon or as
to the preservation of rights against prior parties or any other rights
pertaining thereto. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Tranche D Term Letter of
Credit Cash Collateral in its possession if the Tranche D Term Letter of Credit
Cash Collateral is accorded treatment substantially equal to that which it
accords its own property, and shall not be liable or responsible for any loss or
damage to any of the Tranche D Term Letter of Credit Cash Collateral, or for any
diminution in the value thereof, by reason of the act or omission of any agent
or bailee selected by the Collateral Agent in good faith. All expenses and
liabilities incurred by the Collateral Agent in connection with taking, holding
and disposing of any Tranche D Term Letter of Credit Cash Collateral (including
customary custody and similar fees with respect to any Tranche D Term Letter of
Credit Cash Collateral held directly by the Collateral Agent and the Tranche D
Term Letter of Credit Cash Collateral Account) shall be paid by the Borrower
from time to time upon demand. Upon an Event of Default, the Collateral Agent
shall be entitled to apply (and, at the request of the Required Lenders, shall
apply) Tranche D Term Letter of Credit Cash Collateral or the proceeds
51
thereof to payment of any such expenses, liabilities and fees. After the
termination of the Tranche D Term Commitments, the termination of all Tranche D
Term Letters of Credit and the repayment in full of all outstanding
Reimbursement Obligations in respect of the Tranche D Term Letters of Credit,
the Collateral Agent shall transfer the remaining Tranche D Term Letter of
Credit Cash Collateral or the proceeds thereof to the Revolving Credit Letter of
Credit Cash Collateral Account or, if there are no outstanding Revolving Credit
Letters of Credit outstanding, to the Debt Account. Notwithstanding any other
term or provision of this Agreement, and for the avoidance of doubt, the Tranche
D Term Letter of Credit Cash Collateral shall be paid first to the Issuer in
satisfaction of any Tranche D Term Letter of Credit Direct Exposure or Tranche D
Term Letter of Credit Contingent Exposure and no Tranche D Term Letter of Credit
Cash Collateral shall be released or disbursed to any party other than the
Issuer until the satisfaction of all Tranche D Term Letter of Credit Liabilities
and the termination of the Tranche D Term Commitments and all Tranche D Term
Letters of Credit.
ARTICLE III
CONDITIONS
Section 3.01 Conditions Precedent to Initial Loans and Letter
of Credit.
The obligation of each Lender to make its initial Loan and of
the Issuer to issue its initial Letters of Credit is subject to satisfaction of
the conditions precedent that the Administrative Agent shall have received, on
the Closing Date, the following, each dated the Closing Date unless otherwise
indicated, in form and substance satisfactory to the Administrative Agent and
(except for the Notes) in sufficient copies for each Lender:
(a) The Revolving Credit Notes to the order of the
Revolving Credit Lenders.
(b) The Tranche A Term Notes to the order of the Tranche
A Term Lenders.
(c) The Tranche B Term Notes to the order of the Tranche
B Term Lenders.
(d) The Tranche C Term Notes to the order of the Tranche
C Term Lenders.
(e) The Tranche D Term Notes to the order of the Tranche
D Term Lenders.
(f) Certified copies of (i) the resolutions of the Board
of Directors of each Credit Party approving each Financing Document to which it
is a party, and (ii) all documents evidencing other necessary corporate action
and required governmental and third party approvals, licenses and consents with
respect to each Financing Document and the transactions contemplated thereby.
(g) A copy of the articles or certificate of
incorporation (or other comparable governing documents) of each Credit Party and
of each Pledged Subsidiary which is not a Credit Party (other than a Pledged
Subsidiary incorporated in a jurisdiction outside the United States) certified
as of a recent date by the Secretary of State of the state of incorporation or
formation of such Credit Party or Pledged Subsidiary, together with certificates
of such official attesting to the good standing of each such Credit Party and
Pledged Subsidiary (other than a Pledged Subsidiary
52
incorporated in a jurisdiction outside the United States), and a copy of the
certificate of incorporation and the By-Laws (or other comparable governing
documents) of each Credit Party and of each Pledged Subsidiary certified as of
the Closing Date by the Secretary or an Assistant Secretary of each such Credit
Party or Pledged Subsidiary.
(h) A certificate of the Secretary or an Assistant
Secretary of each Credit Party certifying the names and true signatures of each
officer of such Credit Party who has been authorized to execute and deliver any
Financing Document or other document required hereunder to be executed and
delivered by or on behalf of such Credit Party.
(i) The CEI Secured Guaranty, duly executed by CEI.
(j) The CEI Unsecured Guaranty, duly executed by CEI.
(k) The Subsidiary Guaranty, duly executed by each
Subsidiary Guarantor.
(l) The Security Agreement, duly executed by CEI, the
Borrower, each Subsidiary Grantor and each Subsidiary Pledgor, together with:
(i) certificates and instruments representing the
certificated securities and Debt pledged under the Security Agreement,
and undated stock powers and assignments for such certificates and
instruments executed in blank;
(ii) acknowledgment copies of proper financing statements
duly filed under the Uniform Commercial Code of all jurisdictions as
may be necessary or, in the opinion of the Collateral Agent, desirable
to perfect the Lien created by the Security Agreement;
(iii) certified copies of Lien search reports listing all
effective financing statements which name CEI, the Borrower, any
Subsidiary Grantor or any Subsidiary Pledgor (under its present name or
any previous name) as debtor and which are filed in the jurisdictions
referred to in clause (i) above, together with copies of such other
financing statements (none of which shall cover the Collateral
purported to be covered by the Security Agreement); and
(iv) evidence that the insurance required by the terms of
the Collateral Documents and by Section 6.04(b) is in full force and
effect.
(m) The Citibank Account Control Agreement, duly executed
by CEI, the Borrower, Citibank, as depositary, and the Collateral Agent.
(n) The Wachovia Account Control Agreement, duly executed
by CEI, Wachovia, as depositary, and the Collateral Agent.
(o) Copies of duly executed and acknowledged Mortgages,
together with:
(i) title insurance policies issued by a title company
acceptable to the Collateral Agent, in such form and amounts as are
reasonably acceptable to the Collateral Agent, insuring that each
Mortgage is a valid first priority Lien on the real estate covered
53
thereby, subject only to such exceptions to title as shall be
reasonably acceptable to the Collateral Agent in its sole discretion
and containing such endorsements and affirmative insurance as the
Collateral Agent may reasonably require and as are obtainable in the
applicable jurisdiction, and true copies of each document, instrument
or certificate required by the terms of each such policy and/or
Mortgage to be, or have been, filed, recorded, executed or delivered in
connection therewith;
(ii) opinions satisfactory to the Collateral Agent of
local counsel retained by the Credit Parties party to the Mortgages
with respect to the validity and enforceability of the Mortgages and
such other matters as may be reasonably required by the Collateral
Agent;
(iii) proper financing statements under the applicable
Uniform Commercial Code to be filed in connection with the Mortgages,
in form and substance satisfactory to the Collateral Agent, to perfect
the Lien created by the Mortgages; and
(iv) proof of payment of all title insurance premiums,
documentary, stamp or intangible taxes, recording fees and mortgage
taxes payable in connection with the recording of any of the Financing
Documents or the issuance of the aforementioned title insurance
policies.
(p) A favorable opinion of (i) Xxxxx & Xxx Xxxxx PLLC,
counsel to the Credit Parties, in substantially the form of Exhibit B-1, and
(ii) Xxxxxxx & Xxxxxxxx, special New York counsel to the Credit Parties, in
substantially the form of Exhibit B-2.
(q) A certificate, signed by a responsible officer of the
Borrower, stating that each of the conditions specified in Sections 3.02 and
3.03 has been satisfied.
(r) Such additional documents, information and materials
as the Issuer or any Lender, through the Administrative Agent, may reasonably
request.
The Administrative Agent shall promptly notify the Borrower,
the Lenders and the Issuer of the Closing Date, and such notice shall be
conclusive and binding on all parties hereto.
Section 3.02 Additional Conditions Precedent to Initial Loans
and Letter of Credit.
The obligation of each Lender to make its initial Loan and of
the Issuer to issue its initial Letter of Credit is subject to the further
conditions precedent that:
(a) On the Closing Date, the following statements shall
be true:
(i) All necessary governmental and third party approvals
required to be obtained by any member of the CEI Group in connection
with the transactions contemplated hereby, have been obtained and
remain in effect; and
54
(ii) There exists no claim, action, suit, investigation or
proceeding (including, without limitation, shareholder or derivative
litigation) pending or, to the Knowledge of CEI or the Borrower,
threatened in any court or before any arbitrator or Governmental
Authority which relates to the financing hereunder or which, if
adversely determined, would have a Material Adverse Effect.
(b) All costs and accrued and unpaid fees and expenses
(including, without limitation, reasonable legal fees and expenses) required to
be paid to any Lender Party on or before the Closing Date, to the extent then
due, payable and invoiced, shall have been paid.
(c) Simultaneously with the making of Loans on the
Closing Date, the Existing CDH Guaranty shall be terminated and of no further
force or effect, and the Administrative Agent shall have received written
evidence satisfactory to it of such termination.
(d) The property subject to the Charlotte Mortgage and
the Turbine Assets shall have been legally and beneficially conveyed to CIP and
Xxxxx County Power, LLC, respectively, and the Administrative Agent shall have
received evidence satisfactory to it of such conveyance.
(e) The combined balances of the CEI Revenue Account, the
CEI Operating Account, the CDH Revenue Account and the CDH Operating Account
shall not exceed $10,000,000.
Section 3.03 Conditions Precedent to Each Loan and Letter of
Credit.
The obligation of each Lender to make any Loan (including the
Loan being made by such Lender on the Closing Date) and of the Issuer to issue
any Letter of Credit (including any Letter of Credit being issued on the Closing
Date) shall be subject to the satisfaction of the following additional
conditions precedent:
(a) Receipt by the Administrative Agent of a Notice of
Borrowing (except in the case of a Tranche D Term Loan) or a Notice of Issuance,
as the case may be;
(b) Immediately before and after the making of such Loan
or issuance of such Letter of Credit, no Default or Event of Default shall have
occurred and be continuing;
(c) Each of the representations and warranties of the
Credit Parties contained in the Financing Documents shall be true in all
material respects on and as of the date of the making of such Loan or issuance
of such Letter of Credit, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be
true in all material respects as of such earlier date; and
(d) The making of such Loan and the issuance of such
Letter of Credit on such date does not violate any Requirement of Law and is not
enjoined, temporarily, preliminarily or permanently.
55
The Borrower's acceptance of the proceeds of each Loan or of
the issuance of each Letter of Credit shall be deemed to be a representation and
warranty by the Borrower on the thereof as to the facts specified in clauses (b)
through (d) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each of CEI and the Borrower represents and warrants that:
Section 4.01 Corporate Existence; Compliance with Law.
Each member of the CEI Group (a) is a corporation or other
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or formation; (b) is duly qualified as a
foreign corporation or other entity and in good standing under the laws of each
jurisdiction where such qualification is necessary, except for failures which in
the aggregate have no Material Adverse Effect; (c) has all requisite corporate
or other power and authority and the legal right to own, pledge, mortgage and
operate its properties, to lease the property it operates under lease and to
conduct its business as now or currently proposed to be conducted; (d) is in
compliance with its certificate of incorporation and by-laws or other comparable
governing documents; (e) is in compliance with all other applicable Requirements
of Law except for such non-compliances as in the aggregate have no Material
Adverse Effect; and (f) has all necessary licenses, permits, consents or
approvals from or by, has made all necessary filings with, and has given all
necessary notices to, each Governmental Authority having jurisdiction, to the
extent required for such ownership, operation and conduct, except for failures
which in the aggregate have no Material Adverse Effect.
Section 4.02 Corporate Power; Authorization; Enforceable
Obligations.
(a) The execution, delivery and performance by each
Credit Party of the Financing Documents to which it is a party, the consummation
of the transactions related to the financing contemplated hereby, the conveyance
of assets contemplated in Section 3.02(d), and the termination of Existing CDH
Guaranty as contemplated by Section 3.02(c):
(i) are within such Credit Party's corporate, limited
liability company, partnership or similar powers;
(ii) have been duly authorized by all necessary corporate
or similar action, including, without limitation, the consent of the
holders of its Capital Stock where required;
(iii) do not and will not (A) contravene any member of the
CEI Group's certificate of incorporation or by-laws or other comparable
governing documents, (B) violate any other applicable Requirement of
Law, or any order or decree of any Governmental Authority or
arbitrator, (C) conflict with or result in the breach of, or constitute
a default under, or result in or permit the termination or acceleration
of, any
56
Contractual Obligation of any member of the CEI Group, or (D) result in
the creation or imposition of any Lien upon any of the property of any
member of the CEI Group, other than those in favor of the Collateral
Agent pursuant to the Financing Documents; and
(iv) do not require the consent of, authorization by,
approval of, notice to, or filing or registration with, any
Governmental Authority or any other Person, other than those which have
been obtained or made and copies of which have been delivered to the
Administrative Agent pursuant to Section 3.01, and each of which are in
full force and effect.
(b) Each of the Financing Documents has been duly
executed and delivered by each Credit Party party thereto. Each of the Financing
Documents is the legal, valid and binding obligation of each Credit Party party
thereto, enforceable against it in accordance with its terms.
Section 4.03 Taxes.
All federal income and any other material federal, state,
local and foreign tax returns, reports and statements (collectively, the "TAX
RETURNS") required to be filed by any member of the CEI Group have been filed
with the appropriate governmental agencies in all jurisdictions in which such
Tax Returns, are required to be filed, all such Tax Returns are true and correct
in all material respects, and all taxes, charges and other impositions due and
payable have been timely paid prior to the date on which any fine, penalty,
interest, late charge or loss may be added thereto for non-payment thereof,
except where contested in good faith and by appropriate proceedings if (a)
adequate reserves therefor have been established on the books of such member of
the CEI Group in conformity with GAAP and (b) all such non-payments in the
aggregate have no Material Adverse Effect. Proper and accurate amounts have been
withheld by each member of the CEI Group from its employees for all periods in
full and complete compliance with the tax, social security and unemployment
withholding provisions of applicable federal, state, local and foreign law and
such withholdings have been timely paid to the respective Governmental
Authorities.
Section 4.04 Financial Matters.
(a) The consolidated balance sheet of CEI and its
consolidated Subsidiaries as at December 31, 2002, and the related consolidated
statements of income, retained earnings and cash flows of CEI and its
consolidated Subsidiaries for the fiscal year then ended, certified by KPMG LLP,
and the consolidated balance sheets of CEI and its consolidated Subsidiaries as
at June 30, 2003, and the related consolidated statements of income, retained
earnings and cash flows of CEI and its consolidated Subsidiaries for the six
months then ended, certified by the chief financial officer of CEI, copies of
which have been furnished to each Lender, fairly present, subject, in the case
of said balance sheets as at June 30, 2003, and said statements of income,
retained earnings and cash flows for the six months then ended, to year-end
audit adjustments, the consolidated financial condition of CEI and its
consolidated Subsidiaries as at such dates and the consolidated results of the
operations of CEI and its consolidated Subsidiaries for the period ended on such
dates, all in conformity with GAAP.
57
(b) Since December 31, 2002, there has been no Material
Adverse Change and there have been no events or developments that in the
aggregate have had a Material Adverse Effect, except as described on Schedule
4.04(b).
(c) Neither CEI nor any of its consolidated Subsidiaries
had at June 30, 2003 any material obligation, contingent liability or liability
for taxes, long-term leases or unusual forward or long-term commitment which is
not reflected in the balance sheet at such date referred to in subsection (a)
above or in the notes thereto.
(d) The unaudited pro forma consolidated projections of
CEI and its consolidated Subsidiaries, a copy of which has been delivered to the
Administrative Agent, has been prepared as of June 10, 2003, reflects as of such
date, on a pro forma basis, the consolidated cash flows of CEI and its
consolidated Subsidiaries, and the projections and assumptions expressed therein
were reasonably based on the information available to CEI at the time so
furnished.
(e) As of the Closing Date (and after giving effect to
the making of Loans on the Closing Date) CEI, the Borrower and each member of
the CEI Group listed on Schedule 4.04(e) is Solvent. From and after the Closing
Date, each of CEI and the Borrower is Solvent.
Section 4.05 Full Disclosure.
No written statement prepared or furnished by or on behalf of
any member of the CEI Group or any of its Affiliates in connection with any of
the Financing Documents, Collateral descriptions or the consummation of the
transactions contemplated thereby, and no financial statement delivered pursuant
hereto or thereto, contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading; provided, that, with respect to projected financial
information, CEI and the Borrower represent only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.
Section 4.06 Litigation.
Except as specifically disclosed on Schedule 4.06, there is no
action, suit, investigation, litigation or proceeding pending against or, to the
Knowledge of CEI or the Borrower, threatened against or affecting, any member of
the CEI Group before any court or arbitrator or any governmental body, agency or
official in which there is a reasonable possibility of an adverse decision which
could have a Material Adverse Effect or which in any manner draws into question
the legality, validity or enforceability of any Financing Document.
Section 4.07 Margin Regulations.
No part of the proceeds of any Loan will be used for
"purchasing" or "carrying" any "margin stock" within the respective meanings of
each of the quoted terms under Regulation U. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 referred to in said Regulation U.
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Section 4.08 Ownership of Borrower; Subsidiaries.
(a) The authorized capital stock of the Borrower consists
of 1,000 shares of common stock, no par value per share, of which 1,000 shares
are issued and outstanding. All of the outstanding capital stock of the Borrower
has been validly issued, is fully paid and non-assessable and is owned
beneficially and of record by CEI, free and clear of all Liens other than the
Lien granted to the Collateral Agent under the Security Agreement. No authorized
but unissued shares, no treasury shares and, to the Knowledge of CEI and the
Borrower, no other outstanding shares of capital stock of the Borrower are
subject to any option, warrant, right of conversion or purchase or any similar
right. Except as specifically disclosed on Schedule 4.08(a), there are no
agreements or understandings with respect to the voting, sale or transfer of any
shares of capital stock of the Borrower, or to the Knowledge of CEI and the
Borrower, any agreement restricting the transfer or hypothecation of any such
shares.
(b) Set forth on Schedule 4.08(b) hereto is a complete
and accurate list showing, as of the date hereof, all Subsidiaries of CEI and,
as to each such Subsidiary, the jurisdiction of its incorporation or formation,
the number of shares of each class of Capital Stock authorized, the number
outstanding on the date hereof and the percentage of the outstanding shares of
each such class owned (directly or indirectly) by CEI. Except as set forth on
Schedule 4.08(b), no Capital Stock of any Subsidiary of CEI, which Capital Stock
is owned by a member of the CEI Group, is subject to any outstanding option,
warrant, right of conversion or purchase or any similar right. All of the
outstanding Capital Stock of each such Subsidiary, which Capital Stock is owned
by a member of the CEI Group, has been validly issued, is fully paid and
non-assessable and is owned by the Persons named on Schedule 4.08(b), free and
clear of all Liens other than (i) as described on Schedule 4.08(b) or (ii) Liens
granted to the Collateral Agent under the Security Agreement. Except in respect
of agreements and instruments evidencing the Existing Project Financing Debt,
neither CEI nor any such Subsidiary is a party to, or has Knowledge of, any
agreement restricting the transfer or hypothecation of any shares of Capital
Stock of any such Subsidiary, which Capital Stock is owned by any member of the
CEI Group, other than (i) as described on Schedule 4.08(b) or (ii) the Financing
Documents. Except as disclosed on Schedule 4.08(b), no member of the CEI Group
owns or holds, directly or indirectly, any Capital Stock or Equity Interest of,
any Person other than such Subsidiaries.
(c) Each of the Subsidiary Guarantors in existence as of
the date hereof is listed on Schedule VI. As of the date hereof, the Subsidiary
Guarantors listed on Schedule VI constitute all of the Subsidiaries of CEI
(other than the Borrower and the Caledonia-Related Entities) that are not
contractually prohibited from guarantying the Obligations outstanding under the
Financing Documents.
(d) Each of the Subsidiary Pledgors in existence as of
the date hereof is listed on Schedule VII. As of the date hereof, the Subsidiary
Pledgors listed on Schedule VII constitute all of the Subsidiaries of CEI (other
than the Borrower, the Caledonia-Related Entities and any Subsidiary
incorporated or otherwise organized in a jurisdiction outside the United States)
that are not contractually prohibited from pledging Equity Interests in any of
its Subsidiaries or any other Person. Except in respect of the Equity Interests
of Agro Power Development, Inc. owned by the Borrower (which Equity Interests
shall be pledged pursuant to Section 6.01(r)), the Collateral pledged by the
Subsidiary Pledgors constitutes 100% (or, in the
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case of any issuer of such Collateral that is a "controlled foreign corporation"
under Section 957(a) of the Internal Revenue Code, 65%) of the Equity Interests
of each Person owned by such Subsidiary Pledgors that is permitted to be pledged
by such Subsidiary Pledgors under the terms of the Contractual Obligations of
such Subsidiary Pledgors in existence as of the date hereof.
(e) Each of the Subsidiary Grantors in existence as of
the date hereof is listed on Schedule VIII. As of the date hereof, the
Subsidiary Grantors listed on Schedule VIII constitute all of the Subsidiaries
of CEI (other than the Borrower and the Caledonia-Related Entities) that are not
contractually prohibited from pledging their assets and property (other than the
Subsidiary Pledgors). The Collateral pledged by each Subsidiary Grantor
constitutes all of the assets and property owned by such Subsidiary Grantor that
is permitted to be pledged by such Subsidiary Grantor under the terms of the
Contractual Obligations of such Subsidiary Grantor in existence as of the date
hereof.
Section 4.09 Compliance with ERISA.
Each member of the ERISA Group has fulfilled its obligations
under the minimum funding standards of ERISA and the Internal Revenue Code with
respect to each Plan and is in compliance in all material respects with the
currently applicable provisions of ERISA and the Internal Revenue Code with
respect to each Plan. No Plan has Unfunded Liabilities in excess of $50,000 and
the aggregate Unfunded Liabilities of all Plans does not exceed $50,000. No
member of the ERISA Group has (a) sought a waiver of the minimum funding
standard under Section 412 of the Internal Revenue Code in respect of any Plan;
(b) failed to make any required contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, made any amendment
to any Plan or Benefit Arrangement, or engaged in any transaction described in
Sections 4062, 4063 or 4064 of ERISA, which has resulted or could result in the
imposition of a Lien on the property of any member of the ERISA Group or the
posting of a bond or other security pursuant to Sections 302(f), 307 or 4068 of
ERISA or Sections 401(a)(29) or 412(n) of the Internal Revenue Code; (c) filed
or been required to file notice with the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of ERISA; (d)
received notice of complete or partial withdrawal liability under Title IV of
ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent
or has been terminated; (e) received notice from the PBGC under Title IV of
ERISA of an intent to terminate, impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or appoint a trustee to administer any
Plan; (f) given notice of intent to terminate any Plan under Section 4041(c) of
ERISA, or (g) given notice of withdrawal from any Plan pursuant to Section 4063
of ERISA.
Section 4.10 Environmental Matters.
Except as disclosed on Schedule 4.10:
(a) Each member of the CEI Group and the operations of
each member of the CEI Group comply with, and at all times have complied with,
all applicable Environmental Laws other than such non-compliance the
consequences of which in the aggregate have no Material Adverse Effect;
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(b) Each member of the CEI Group has obtained all
licenses, permits, consents or approvals from or by, has made all filings with,
and has given all notices to each Governmental Authority having jurisdiction,
necessary under applicable Environmental Laws for its operations, and all such
licenses, permits, consents, approvals, filings and notices are in good
standing, and each member of the CEI Group is in compliance with the terms and
conditions of such licenses, permits, consents, approvals, filings and notices,
other than such non-compliance the consequences of which in the aggregate have
no Material Adverse Effect;
(c) No member of the CEI Group or any of its currently or
previously owned or leased property or operations is subject to any threatened
or outstanding order from or agreement with any Governmental Authority or other
Person, and there is no action, suit, investigation, litigation or proceeding
pending or, to the Knowledge of CEI or the Borrower, threatened against or
affecting any member of the CEI Group or any of its currently or previously
owned or leased property or operations, respecting (i) Environmental Laws, (ii)
Remedial Action or (iii) any Environmental Liabilities and Costs, other than
those the consequences of which in the aggregate have no Material Adverse
Effect;
(d) There are no conditions or circumstances (including
any Release or threatened Release of any Hazardous Substance) associated with
the currently or previously owned or leased properties or operations of any
member of the CEI Group which may give rise to any Environmental Liabilities and
Costs other than those which in the aggregate have no Material Adverse Effect;
and
(e) There are no conditions or circumstances (including
any Release or threatened Release of any Hazardous Substance) which may give
rise to any Environmental Liabilities and Costs associated with any operations
of or ownership of property by any member of the CEI Group that have any
reasonable likelihood of having a Material Adverse Effect.
Section 4.11 Liens.
There are no Liens of any nature whatsoever on any properties
of any member of the CEI Group other than those permitted by Section 7.02. The
Liens granted by the Credit Parties to the Collateral Agent pursuant to the
Financing Documents are fully perfected first priority Liens in and to the
Collateral.
Section 4.12 Investment Company; Public Utility Holding
Company Act.
No member of the CEI Group is (a) an "investment company," or
a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended, or (b) a "holding company," a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended. No member of the CEI Group is subject to regulation under any
Requirement of Law which limits its ability to incur Debt.
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Section 4.13 No Burdensome Restrictions; No Defaults.
(a) No member of the CEI Group (i) is a party to any
Contractual Obligation the compliance with which would have a Material Adverse
Effect, or (ii) is subject to any charter or corporate restriction which has a
Material Adverse Effect.
(b) As of the date hereof, no member of the CEI Group is
in default under or with respect to any Contractual Obligation owed by it, and,
to the Knowledge of CEI and the Borrower, no other party is in default under or
with respect to any Contractual Obligation owed to any member of the CEI Group,
in either case, other than those defaults which in the aggregate have no
Material Adverse Effect.
(c) No Event of Default or Default has occurred and is
continuing.
(d) There is no Requirement of Law the compliance with
which by any Credit Party would have a Material Adverse Effect.
(e) Except in respect of the Existing Project Financing
Debt, as amended or refinanced as permitted hereunder, no Subsidiary of CEI is
subject to any Contractual Obligation restricting or limiting its ability to
declare or make any dividend payment or other distribution on account of any
shares of any class of its Capital Stock or its ability to purchase, redeem, or
otherwise acquire for value or make any payment in respect of any such shares or
any shareholder rights.
Section 4.14 Insurance.
All policies of insurance of any kind or nature owned by or
issued to any member of the CEI Group, including, without limitation, policies
of life, fire, theft, product liability, public liability, property damage,
other casualty, employee fidelity, workers' compensation and employee health and
welfare insurance, are in full force and effect and are of a nature and provide
such coverage as is sufficient and as is customarily carried by companies of the
size and character of such member of the CEI Group. No member of the CEI Group
has been refused insurance for which it applied or had any policy of insurance
terminated (other than at its request or where such insurance was not available
on commercially reasonable terms).
Section 4.15 Labor Matters.
(a) There are no strikes, work stoppages, slowdowns or
lockouts pending or threatened against or involving any member of the CEI Group,
other than those which in the aggregate have no Material Adverse Effect.
(b) There are no arbitrations or grievances pending
against or involving member of the CEI Group, nor, to the Knowledge of CEI and
the Borrower, are there any arbitrations or grievances threatened, involving any
member of the CEI Group, other than those which, in the aggregate, if resolved
adversely to such member of the CEI Group, would have no Material Adverse
Effect.
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(c) There is no organizing activity involving any member
of the CEI Group pending or, to the Knowledge of CEI and the Borrower,
threatened by any labor union or group of employees, other than those which in
the aggregate have no Material Adverse Effect. There are no representation
proceedings pending or threatened with the National Labor Relations Board, and
no labor organization or group of employees of any member of the CEI Group have
made a pending demand for recognition, other than those which in the aggregate
have no Material Adverse Effect.
(d) There are no unfair labor practices charges,
grievances or complaints pending or in process or threatened by or on behalf of
any employee or group of employees of any member of the CEI Group, other than
those which in the aggregate, if adversely determined, would have no Material
Adverse Effect.
(e) There are no complaints or charges against any member
of the CEI Group pending or, to the Knowledge of CEI and the Borrower,
threatened to be filed with any federal, state or local court, governmental
agency or arbitrator based on, arising out of, in connection with, or otherwise
relating to the employment or termination of employment by any member of the CEI
Group of any individual, other than those which in the aggregate, if resolved
adversely, would have no Material Adverse Effect.
(f) Each member of the CEI Group is in compliance with
all laws, and all orders of any court, Governmental Authority or arbitrator,
relating to the employment of labor, including without limitation all such laws
relating to wages, hours, collective bargaining, discrimination, civil rights,
and the payment of withholding and/or social security and similar taxes, except
for such non-compliances that in the aggregate have no Material Adverse Effect.
Section 4.16 Force Majeure.
Neither the business nor the properties of any member of the
CEI Group are currently suffering from the effects of any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance), other than those which in the aggregate
have no Material Adverse Effect.
Section 4.17 Use of Proceeds; Termination of Existing CEI
Credit Agreement.
(a) The proceeds of the Loans and the Letters of Credit
are being used by the Borrower solely as follows:
(i) On the Closing Date, the Borrower will borrow
$15,000,000 in Revolving Credit Loans, the proceeds of which shall be
used solely to pay on the Closing Date a dividend to CEI in the amount
of $15,000,000, which amount will be used by CEI solely to make a
prepayment on the loans outstanding under the Existing CEI Credit
Agreement and to refinance the Existing CDH Guaranty.
(ii) On the Closing Date, the Borrower will borrow
$10,000,000 in Tranche A Term Loans, the proceeds of which shall be
used solely to pay on the Closing Date a dividend to CEI in the amount
of $10,000,000, which amount will be used by CEI solely
63
to make a prepayment on the loans outstanding under the Existing CEI
Credit Agreement and to refinance the Existing CDH Guaranty.
(iii) On the Closing Date, the Borrower will borrow
$78,694,654.50 in Tranche B Term Loans, the proceeds of which shall be
used solely to pay on the Closing Date a dividend to CEI in the amount
of $78,694,654.50, which amount will be used by CEI solely to prepay
the remainder of the loans and other Obligations outstanding under the
Existing CEI Credit Agreement and to refinance the Existing CDH
Guaranty.
(iv) On the Closing Date, the Tranche D Term Letters of
Credit will be deemed issued in the amounts, and for the benefit of the
Person, listed on Schedule XI.
(v) After the Closing Date, the proceeds of Revolving
Credit Loans and Revolving Credit Letters of Credit will be used by the
Borrower solely for general working capital purposes; provided, however
that after the Closing Date, no proceeds of Revolving Credit Loans or
Revolving Credit Letters of Credit may be used, directly or indirectly,
for the funding or other benefit of the Southaven Project.
(vi) After the Closing Date, the proceeds of Tranche C
Term Loans shall be used solely by the Borrower to make a
contemporaneous dividend payment to CEI in the amount of such Tranche C
Term Loans, which payment shall be used by CEI solely (i) to make
payments required under the Amended and Restated Supplemental Equity
Contribution Guaranty, dated as of May 22, 2002, as amended through the
date hereof, in favor of Southaven Power, LLC and the Security Agent
named therein as in effect on the date hereof, in an aggregate amount
not to exceed $8,100,000, (ii) to purchase in the open market 8.10%
Senior Notes at a price not to exceed 96% of the par value thereof or
(iii) to make mandatory sinking fund payments as required by the 8.10%
Senior Note Indenture; provided, however, that the aggregate proceeds
of Tranche C Term Loans used for the purposes described in clauses (ii)
and (iii) shall not exceed $40,000,000.
(vii) After the Closing Date, the proceeds of Tranche D
Term Loans will be used solely to reimburse the Issuer in respect of
Tranche D Term Letter of Credit Drawings, as provided in Section
2.07(i).
(b) Upon the making of the payments and the issuances of
Letters of Credit described in subsections (a)(i), (ii), (iii) and (iv), the
Existing CEI Credit Agreement (and all commitments to extend credit thereunder)
and the other instruments and documents executed in connection therewith shall
automatically be terminated (other than provisions thereof which, by their
terms, survive such termination).
(c) None of the proceeds of any Loan or Letter of Credit
will be used, directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of buying or carrying any "margin stock" within the
meaning of Regulation U.
Section 4.18 Intellectual Property.
Each member of the CEI Group owns or licenses or otherwise has
the right to use all material licenses, permits, patents, patent applications,
trademarks, trademark applications,
64
service marks, trade names, copyrights, copyright applications, franchises,
authorizations and other intellectual property rights that are necessary for the
operations of their respective businesses, without infringement upon or conflict
with the rights of any other Person with respect thereto. To the Knowledge of
CEI and the Borrower, no slogan or other advertising device, product, process,
method, substance, part or component, or other material now employed, or now
contemplated to be employed, by any member of the CEI Group infringes upon or
conflicts with any rights owned by any other Person, and no claim or litigation
regarding any of the foregoing is pending or, to the Knowledge of CEI and the
Borrower, threatened.
Section 4.19 Title.
(a) Each member of the CEI Group owns good, clean and
marketable fee simple absolute title to all of real property purported to be
owned by such member of the CEI Group, which real property is at the date hereof
described in Schedule 4.19, and good, clean and marketable title to, or valid
leasehold interests in, all other properties and assets purported to be owned or
leased by such member of the CEI Group, and none of such properties and assets,
including, without limitation, such real property, is subject to any Lien,
except Liens granted to the Collateral Agent on behalf of and for the ratable
benefit of the Secured Parties pursuant to the Financing Documents or permitted
thereunder.
(b) All material real property leased at the date hereof
by any member of the CEI Group is listed on Schedule 4.19. To the Knowledge of
CEI and the Borrower, no member of the CEI Group (i) is in default under any of
the leases in respect of such leased real property, or (ii) has received any
notice of default from the landlord of any such leased real property. To the
Knowledge of CEI and the Borrower, no condition exists which, with the giving of
notice or the passage of time, or both, would give rise to a default under any
lease in respect of such leased real property. Each of such leases is valid and
enforceable in accordance with its terms and is in full force and effect. The
Borrower has delivered to the Administrative Agent true and complete copies of
any such lease requested by the Administrative Agent and all related documents
affecting the rights or obligations of the member of the CEI Group which is a
party thereto, including, without limitation, any non-disturbance and
recognition agreements, subordination agreements, attornment agreements and
agreements regarding the term or rental of any of the leases.
(c) No member of the CEI Group owns or holds, or is
obligated under or a party to, any option, right of first refusal or other
contractual right to purchase, acquire, sell, assign or dispose of any real
property owned or leased by such member of the CEI Group.
(d) No member of the CEI Group has received any notice,
or has any Knowledge, of any pending, threatened or contemplated condemnation
proceeding affecting any real property owned or leased by any member of the CEI
Group or any part thereof, or of any sale or other disposition of any real
property owned or leased by any member of the CEI Group or any part thereof in
lieu of condemnation.
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ARTICLE V
FINANCIAL COVENANTS
Section 5.01 Cash Flow Coverage Ratio.
CEI and the Borrower will maintain at the end of each period
set forth below, a Cash Flow Coverage Ratio of not less than the ratio set forth
below for each such period:
Four Minimum Cash Flow
Fiscal Quarters Ending Coverage Ratio
---------------------- ------------------
September 30, 2003 1.00 to 1.00
December 31, 2003 1.00 to 1.00
March 31, 2004 1.00 to 1.00
June 30, 2004 1.00 to 1.00
September 30, 2004 1.00 to 1.00
December 31, 2004 1.00 to 1.00
March 31, 2005 1.05 to 1.00
June 30, 2005 1.15 to 1.00
September 30, 2005 1.25 to 1.00
December 31, 2005 1.35 to 1.00
Section 5.02 Leverage Ratio.
CEI and the Borrower will maintain at the end of each fiscal
quarter set forth below, a Leverage Ratio of not more than the ratio set forth
below for each such fiscal quarter:
Maximum Leverage
Fiscal Quarter Ending Ratio
-------------------------- -----------------
September 30, 2003 12.50 to 1.00
December 31, 2003 12.50 to 1.00
March 31, 2004 12.50 to 1.00
June 30, 2004 12.50 to 1.00
September 30, 2004 11.50 to 1.00
December 31, 2004 10.50 to 1.00
March 31, 2005 10.00 to 1.00
June 30, 2005 10.00 to 1.00
September 30, 2005 10.00 to 1.00
December 31, 2005 10.00 to 1.00
Section 5.03 Tangible Net Worth.
CEI shall not permit its Tangible Net Worth at any time to be
less than (a) the sum of (i) $250,000,000, plus (ii) 100% of cumulative Net
Income of CEI and its consolidated Subsidiaries for each fiscal quarter
(beginning with the fiscal quarter commencing on July 1, 2003) for which such
Net Income is positive, plus (iii) 100% of the Net Cash Proceeds of any
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offering by CEI of Capital Stock consummated after the Closing Date, plus (vi)
100% of any capital contribution made to CEI or any of its Subsidiaries after
the Closing Date by any holder of CEI's Capital Stock, minus (b) to the extent
not included in any cumulative positive Net Income of CEI and its consolidated
Subsidiaries referred to in clause (a)(ii) above, the loss attributed to the
impairment or disposition of the Turbine Assets and CEI's indirect ownership
interest in each of the Excluded Projects.
ARTICLE VI
AFFIRMATIVE COVENANTS
Each of CEI and the Borrower agrees that, so long as any Loan
or any other Obligation of any Credit Party under any Financing Document shall
remain unpaid or any Lender has any Commitment hereunder or any amount payable
under any Note remains unpaid or any Letter of Credit or any Reimbursement
Obligation remains outstanding:
Section 6.01 Financial Statements and Other Information.
CEI shall deliver to each of the Lender Parties (it being
understood that delivery to the Administrative Agent and the posting by the
Administrative Agent of each of the following items on an electronic website
shall constitute delivery to each of the other Lender Parties, and the
Administrative Agent hereby agrees to post on an electronic website or otherwise
distribute to the other Lender Parties any such item delivered by the Borrower
to the Administrative Agent):
(a) as soon as available and in any event within 50 days
after the end of each of the first three fiscal quarters of each fiscal year of
CEI, (i) the unaudited consolidated balance sheet of CEI and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of income and retained earnings and of cash flows of CEI
and its consolidated Subsidiaries for such quarter and the portion of the fiscal
year through the end of such quarter, (ii) the unaudited unconsolidated balance
sheet of CEI as at the end of such quarter and the related unconsolidated
statements of income for such quarter and the portion of the fiscal year through
the end of such quarter, (iii) the unaudited consolidating balance sheet of CEI
and its consolidated Subsidiaries as at the end of such quarter and the related
consolidating statement of income for such quarter and the portion of the fiscal
year through the end of such quarter, (iv) a statement of cash flows to CEI from
each of its Subsidiaries for such quarter and the portion of the fiscal year
through the end of such quarter, prepared and presented in a format consistent
with the most recent projections provided pursuant to Section 6.01(c), and (v)
the unaudited balance sheet of the Borrower as at the end of such quarter and
the related statements of income of the Borrower for such quarter and the
portion of the fiscal year through the end of such quarter, in each case,
prepared in accordance with GAAP and setting forth in comparative form the
figures for the corresponding quarter in the fiscal year immediately preceding
such fiscal year, certified by the chief financial officer of CEI as fairly
presenting the financial condition and results of operations of CEI and its
Subsidiaries at such date and for such period, together with (i) a certificate
of said officer stating that no Default or Event of Default has occurred and is
continuing or, if a Default or an Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action which CEI and/or
the Borrower proposes to take with respect
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thereto and (ii) a schedule in form satisfactory to the Administrative Agent of
the computations used by CEI in determining compliance with all financial
covenants contained herein;
(b) as soon as available and in any event within 105 days
after the end of each fiscal year of CEI,
(i) a copy of the audited consolidated balance sheet of
CEI and its consolidated Subsidiaries as at the end of such fiscal year
and the related consolidated statements of income and retained earnings
and of cash flows for such fiscal year, in each case, prepared in
accordance with GAAP and setting forth in each case in comparative form
the figures for the fiscal year immediately preceding such fiscal year,
reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by
KPMG LLP or other independent certified public accountants of
nationally recognized standing, together with (x) a certificate of such
accounting firm stating that in the course of the regular audit of the
business of CEI and its Subsidiaries, which audit was conducted by such
accounting firm in accordance with generally accepted auditing
standards, such accounting firm has obtained no knowledge that a
Default or Event of Default has occurred and is continuing, or, if in
the opinion of such accounting firm, a Default or Event of Default has
occurred and is continuing, a statement as to the nature thereof, and
(y) such statements of cash flows to CEI from each of its Subsidiaries
for such fiscal year prepared and presented in a format consistent with
the most recent projections provided pursuant to Section 6.01(c);
(ii) a copy of the unaudited unconsolidated balance sheet
of CEI as at the end of such fiscal year and the related unconsolidated
statements of income for such fiscal year, setting forth in each case
in comparative form the figures for the fiscal year immediately
preceding such fiscal year, certified by the chief financial officer of
CEI as being fairly stated in all material respects and prepared in
conformity with GAAP;
(iii) a copy of the unaudited consolidating balance sheet
of CEI and its consolidated Subsidiaries as at the end of such fiscal
year and the related consolidating statement of income for such fiscal
year, setting forth in each case in comparative form the figures for
the fiscal year immediately preceding such fiscal year, certified by
the chief financial officer of CEI as being fairly stated in all
material respects and prepared in conformity with GAAP; and
(iv) a copy of the unaudited unconsolidated balance sheet
of the Borrower as at the end of such fiscal year and the related
unconsolidated statements of income for such fiscal year, setting forth
in comparative form the figures for the fiscal year immediately
preceding such fiscal year, certified by the chief financial officer of
CEI as being fairly stated in all material respects and prepared in
conformity with GAAP;
in each case, certified by the chief financial officer of CEI as fairly
presenting the financial condition and results of operations of CEI and
its Subsidiaries at such date and for such period, together with (x) a
certificate of said officer stating that no Default or Event of Default
has occurred and is continuing or, if a Default or an Event of Default
has occurred and is continuing, a statement as to the nature thereof
and the action which
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CEI and/or the Borrower proposes to take with respect thereto, and (y)
a schedule in form satisfactory to the Administrative Agent of the
computations used by CEI in determining compliance with all financial
covenants contained herein;
(c) as soon as available and in any event within 15 days
after the first Domestic Business Day of each calendar quarter (or, during the
continuance of a Default or Event of Default, each calendar month) updates of
CEI's regularly prepared liquidity reports and long-term projections;
(d) simultaneously with delivery thereof pursuant to the
8.10% Senior Note Indenture and the 8.75% Senior Note Indenture, a calculation
in reasonable detail of CEI's "Fixed Charge Coverage Ratio", as defined in the
8.10% Indenture and the 8.75% Indenture, as at the end of such calendar quarter;
(e) as soon as available and in any event no later than
the date financial statements are required to be delivered pursuant to clause
(a) and (b) above, a statement of the monthly cash flows to CEI of each of its
Subsidiaries for each of the twelve months ending prior to the date of such
financial statements;
(f) within two Domestic Business Days after any officer
of CEI or the Borrower obtains Knowledge of any Default or Event of Default,
written notification from the chief executive officer, president, executive
vice-president or chief financial officer of the Borrower setting forth the
details thereof and the action which CEI and/or the Borrower is taking or
proposes to take with respect thereto;
(g) promptly after the commencement thereof (or, in the
case of a Non-Controlled Affiliate, promptly after a member of the CEI Group has
Knowledge thereof), notice of all material actions, suits and proceedings before
any domestic or foreign Governmental Authority or arbitrator, affecting any
member of the CEI Group or any Non-Controlled Affiliate;
(h) promptly and in any event, the earlier of (i) the
date notice is required pursuant to the agreements listed in clause (x) below,
in which case notice to the Lender Parties shall be simultaneous with notice
given under such agreements, or (ii) within five Domestic Business Days after
CEI or the Borrower becomes aware of the existence of (x) any breach or
non-performance of, or any default under the 8.10% Senior Notes, the 8.10%
Senior Note Indenture, the 8.75% Senior Notes, the 8.75% Senior Note Indenture,
any credit agreement or similar document evidencing any Existing Project
Financing Debt, the CEA Credit Agreement, the CMA Credit Agreement or any other
Contractual Obligation which is material to the business, prospects, operations
or financial condition of any member of the CEI Group, or (y) any Material
Adverse Change or any event, development or other circumstance which has any
reasonable likelihood of causing or resulting in a Material Adverse Change,
telephonic notice in reasonable detail specifying the nature of the breach,
non-performance, default, event, development or circumstance, including, without
limitation, the anticipated effect thereof, which notice shall be promptly
confirmed in writing within five days;
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(i) promptly after the sending or filing thereof, copies
of all notices, certificates or reports delivered pursuant to any of the
agreements described in clause (h)(i) above;
(j) promptly upon the mailing thereof to the shareholders
of CEI generally, copies of all financial statements, reports and proxy
statements so mailed;
(k) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and
8-K (or their equivalents) which CEI or the Borrower shall have filed with the
Securities and Exchange Commission;
(l) if and when any member of the ERISA Group (i) gives
or is required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows that
the plan administrator of any Plan has given or is required to give notice of
any such reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent
to terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of
such notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any required payment or contribution to any Plan
or Multiemployer Plan or in respect of any Benefit Arrangement, makes any
amendment to any Plan or Benefit Arrangement, or engaged in any transaction
described in Sections 4062, 4063 or 4064 of ERISA, which has resulted or could
result in the imposition of a Lien on the property of any member of the ERISA
Group or the posting of a bond or other security pursuant to Sections 302(f),
307 or 4068 of ERISA or Sections 401(a)(29) or 412(n) of the Internal Revenue
Code, a certificate of the chief executive officer, president, chief financial
officer or chief accounting officer of CEI or the applicable member of the CEI
Group setting forth details as to such occurrence and the action, if any, which
CEI or the applicable member of the ERISA Group is required or proposes to take;
(m) not less than 10 days' prior to the anticipated
receipt (or, in the case of a Non-Controlled Affiliate, if less than 10 days,
promptly after a member of the CEI Group has Knowledge thereof) by any member of
the CEI Group or any Non-Controlled Affiliate of Net Cash Proceeds from any
Asset Sale, issuance of Debt or Equity Issuance, written notification from the
chief executive officer, president, chief financial officer or chief accounting
officer of CEI setting forth (i) a description of the transaction giving rise to
such Net Cash Proceeds, (ii) the date or dates upon which such Net Cash Proceeds
are anticipated to be received by such member of the CEI Group or Non-Controlled
Affiliate, (iii) the amount of Net Cash Proceeds anticipated to be received on
such date or each of such dates (together with a schedule detailing the
calculations necessary to determine the amount of Net Cash Proceeds), and (iv)
the amount
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of such Net Cash Proceeds that is anticipated to prepay the Loans and cash
collateralize the Letters of Credit;
(n) promptly after receipt by any member of the CEI
Group, a copy of each complaint, order, citation, notice or other written
communication from any Person with respect to the existence or alleged existence
of a material violation of any applicable Environmental Law by, or material
Environmental Liabilities and Costs of, any member of the CEI Group or any
Non-Controlled Affiliate, and promptly after discovery or otherwise learning by
any member of the CEI Group of any condition or circumstance (including any
Release or threatened Release of any Hazardous Substance) may have any
reasonable likelihood of resulting in any material violation of any applicable
Environmental Law by, or material Environmental Liabilities and Costs of, any
member of the CEI Group or any Non-Controlled Affiliate, a description of the
condition or circumstance and any action (including any Remedial Action) with
respect thereto taken or proposed to be taken by any member of the CEI Group or
Non-Controlled Affiliate;
(o) copies of all alterations, amendments, modifications,
rescissions, terminations or waivers in respect of any Designated Agreement or
Stockholder Loan and, upon request by the Administrative Agent, any other
material Contractual Obligation of (i) any member of the CEI Group and (ii) if
in the possession of any member of the CEI Group, any Non-Controlled Affiliate;
and
(p) Within 30 days following the Closing Date, a
description of the commencement date, termination date and renewal options (if
any) in respect of all leased real property listed on Schedule 4.19.
(q) If requested by the Collateral Agent, any stock
certificates representing any Equity Interests of any Pledged Subsidiary
incorporated or otherwise organized outside the United States, which Equity
Interests have been pledged to the Collateral Agent pursuant to the Security
Agreement.
(r) Within 60 days following the Closing Date, to the
extent permitted to be pledged by the Borrower under the terms of the
Contractual Obligations in existence as of the date hereof, a supplement to the
Security Agreement, pledging any Equity Interests of Agro Power Development,
Inc. owned by the Borrower, together with the stock certificates representing
such Equity Interests.
(s) from time to time such additional information
regarding the financial position or business of any member of the CEI Group and,
if in the possession of any member of the CEI Group, any Non-Controlled
Affiliate, as the Administrative Agent, at the request of any other Lender
Party, may reasonably request;
Section 6.02 Payment of Obligations.
CEI and the Borrower shall pay and discharge, and shall cause
each other member of the CEI Group to pay and discharge, all its material
Contractual Obligations and liabilities, except where the same may be contested
in good faith by appropriate proceedings, and will maintain, and will cause each
member of the CEI Group to maintain, in accordance with generally accepted
accounting principles, appropriate reserves for the accrual of any of the same.
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Section 6.03 New Real Estate or Personal Property; Other
Assets.
(a) If CEI, the Borrower or any Subsidiary Grantor
acquires any real property not covered by a Mortgage, upon request by the
Collateral Agent, CEI and the Borrower shall, and shall cause each such
Subsidiary Grantor to, promptly execute, deliver and record a first priority
mortgage in favor of the Collateral Agent on behalf and for the ratable benefit
of the Secured Parties covering such real property, in form and substance
satisfactory to the Collateral Agent, and provide the Collateral Agent (a) a
title insurance policy covering such real property in an amount equal to the
purchase price of such real property, (b) a current ALTA survey thereof, and (c)
a surveyor's certificate in form and substance reasonably satisfactory to the
Collateral Agent.
(b) If, at any time, CEI, the Borrower or any Subsidiary
Grantor acquires any personal property (including, without limitation, any
"fixtures", "security entitlements" or "financial assets", as defined in the
Uniform Commercial Code in effect in the State of New York) not subject to a
first priority Lien pursuant to a Collateral Document, CEI and the Borrower
shall, and shall cause each Subsidiary Grantor or Subsidiary Pledgor, as the
case may be, to, promptly execute, deliver, file and record such security
agreements, account control agreements, financing statements, fixture filings
and other instruments and documents in favor of the Collateral Agent on behalf
and for the ratable benefit of the Secured Parties covering such personal
property, in form and substance satisfactory to the Collateral Agent.
(c) To the extent not prohibited or limited by a contract
or other agreement, if the Collateral Agent shall so request, each of CEI and
the Borrower shall, and shall cause each of their respective Subsidiaries to,
(i) grant to the Collateral Agent a first priority Lien on any of its property
not subject to a Lien in favor of the Collateral Agent as of the Closing Date
and (ii) promptly execute, deliver, file and record such mortgages, security
agreements, account control agreements, financing statements, fixture filings
and other instruments and documents in favor of the Collateral Agent on behalf
and for the ratable benefit of the Secured Parties covering such property, in
form and substance satisfactory to the Collateral Agent; provided, however, that
no member of the CEI Group shall be required to xxxxx x Xxxx to the Collateral
Agent on any voting stock or voting Equity Interests in any Subsidiary that is a
"controlled foreign corporation" under Section 957(a) of the Internal Revenue
Code of 1986, in excess of 65% of the voting stock or voting Equity Interests of
each such Subsidiary.
Section 6.04 Maintenance of Property; Insurance.
(a) CEI and the Borrower (i) shall, and shall cause each
other member of the CEI Group to, and (ii) shall vote or cause, to the extent
within the corporate, partnership or limited liability company power of CEI, the
Borrower or any Subsidiary of CEI, each Non-Controlled Affiliate to, keep all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted.
(b) CEI and the Borrower (i) shall, and shall cause each
other member of the CEI Group to, and (ii) shall vote or cause, to the extent
within the corporate, partnership or limited liability company power of CEI, the
Borrower or any Subsidiary of CEI, each Non-Controlled Affiliate to, maintain
with financially sound and responsible insurance companies,
72
insurance of such types, in at least such amounts and against at least such
risks (and with such risk retention) as are usually insured against in similar
circumstances in the same general area by companies of established repute
engaged in the same or a similar business; and will furnish to each Lender Party
upon request information presented in reasonable detail as to the insurance so
carried.
Section 6.05 Conduct of Business and Maintenance of Existence.
CEI and the Borrower (a) shall, and shall cause each other
member of the CEI Group to, and (b) shall vote or cause, to the extent within
the corporate, partnership or limited liability company power of CEI, the
Borrower or any Subsidiary of CEI, each Non-Controlled Affiliate to, (i)
continue to engage in business of the same general type as now conducted by such
Person; (ii) continue to operate their respective businesses on a basis
substantially consistent with the policies and standards of such Person as in
effect on the date hereof and (iii) preserve, renew and keep in full force and
effect their respective corporate existence and their respective rights,
privileges and franchises necessary or desirable in the normal conduct of
business; provided that nothing in this Section 6.05 shall prohibit any Asset
Sale permitted by Section 7.07, any transaction permitted by Section 7.04, or
the commencement of business or operations by any Inactive Subsidiary in
compliance with the terms of the Financing Documents.
Section 6.06 Compliance with Laws.
CEI and the Borrower (a) shall, and cause each other member of
the CEI Group to, and (b) shall vote or cause, to the extent within the
corporate, partnership or limited liability company power of CEI, the Borrower
or any Subsidiary of CEI, each Non-Controlled Affiliate to, comply with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws and
ERISA and the rules and regulations thereunder) except (i) for such
non-compliance, the result of which would not have a Material Adverse Effect and
(ii) where the necessity of compliance therewith is contested in good faith by
appropriate proceedings (and the pendency of such proceedings themselves shall
not have a Material Adverse Effect).
Section 6.07 Fiscal Year.
Each of CEI and the Borrower shall maintain as its fiscal year
the twelve month period ending on December 31 of each year.
Section 6.08 Inspection of Property, Books and Records.
(a) CEI and the Borrower shall, and shall cause each
other member of the CEI Group to, keep proper books of record and account in
which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and will permit, and
will cause each other member of the CEI Group to permit, representatives of any
Lender Party to visit and inspect any of their respective properties, to examine
and make abstracts from any of their respective books and records and to discuss
their respective affairs, finances and accounts with their respective officers,
employees and independent public accountants, all at such reasonable times
during normal business hours and as often as may reasonably be desired, upon
reasonable advance notice to CEI and the Borrower.
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(b) CEI and the Borrower shall, and shall cause each
other member of the CEI Group to, assist the representatives and consultants of
the Lender Parties in preparing financial information and reports for the Lender
Parties.
Section 6.09 Cash Management.
(a) CEI has established the CEI Revenue Account and the
CEI Operating Account, and the Borrower has established the CDH Revenue Account,
the CDH Operating Account, the Letter of Credit Cash Collateral Accounts and the
Debt Account, each of which shall be, from and after the Closing Date, subject
to the first-priority security interest granted to the Collateral Agent for the
ratable benefit of the Secured Parties.
(b) The CEI Revenue Account shall be used by CEI solely
as a collection account for funds received by CEI, and no payments or
withdrawals may be made from the CEI Revenue Account except for payments to the
CEI Operating Account, the CDH Revenue Account or the CDH Operating Account as
described below.
(c) The CEI Operating Account (which, together with
payroll, tax, and other similar sub-accounts) shall be used by CEI as its sole
operating account from which checks may be written and wire transfers made in
payment of CEI expenses in the ordinary course of business.
(d) The CDH Revenue Account shall be used by the Borrower
solely as a collection account for funds received by the Borrower from the other
members of the CEI Group, and no payments or withdrawals may be made from the
CDH Revenue Account except for payments to the CEI Revenue Account, the CDH
Operating Account or the Debt Account as described below.
(e) The CDH Operating Account shall be used by the
Borrower as its sole operating account from which checks may be written and wire
transfers made in payment of Borrower expenses in the ordinary course of
business.
(f) The Letter of Credit Cash Collateral Accounts shall
be used by the Borrower solely for the purposes described in Sections 2.20 and
2.21.
(g) The Debt Account shall be used by the Borrower solely
as a collection account, and no payments or withdrawals may be made from the
Debt Account except in the prepayment of the Loans as described in Section 2.16.
(h) Subject to the last sentence of this clause (h),
until (i) the Term Loans have been paid in full, (ii) the Tranche A Term
Commitments, the Tranche B Term Commitments, the Tranche C Term Commitments and
the Tranche D Term Commitments have been terminated and (iii) all Tranche D Term
Letters of Credit 100% cash collateralized, CEI shall cause each of its
Subsidiaries to transfer to CEI all cash received or held by such Subsidiary,
from any source whatsoever (excluding (A) all amounts required to prepay the
Loans and cash collateralize the Letters of Credit pursuant to Section 2.15
(other than Section 2.15(a)(vi)) and (B) cash held in a Collateral Account, but
including all (1) dividends, distributions or management or similar fees
received from any member of the CEI Group and (2)
74
revenues received in the ordinary course); provided that such transfer shall not
be required to be made if such transfer would (x) violate any Contractual
Obligation existing on the Closing Date, (y) violate applicable Requirements of
Law or if applicable Requirements of Law would require minority shareholder
approval (it being understood that CEI shall use reasonable efforts to obtain
such minority shareholder approval), a valuation or a discretionary order or
would, in CEI's good faith determination or the good faith determination of a
majority of the board of directors of such Subsidiary, involve a reasonable
likelihood of there being a breach of fiduciary duties by the directors of such
Subsidiary, or (z) leave such Subsidiary with insufficient cash on hand for the
payment of its ordinary operating expenses. All cash received by CEI pursuant to
the prior sentence shall, on the Domestic Business Day received by CEI, be
deposited by CEI into the CEI Revenue Account. Subject to Section 6.09(l),
during the continuance of any Default or Event of Default, CEI shall cause each
of its Subsidiaries to transfer to the Borrower all such cash received or held
by such Subsidiary, from any source whatsoever, which cash shall be deposited by
the Borrower in the CDH Revenue Account.
(i) Subject to the last sentence of this clause (i),
until (i) the Term Loans have been paid in full, (ii) the Tranche A Term
Commitments, the Tranche B Term Commitments, the Tranche C Term Commitments and
the Tranche D Term Commitments have been terminated and (iii) all Tranche D Term
Letters of Credit 100% cash collateralized, all other cash received or held by
CEI from any source whatsoever (excluding (A) all amounts required to prepay the
Loans and cash collateralize the Letters of Credit pursuant to Section 2.15
(other than Section 2.15(a)(vi)), (B) cash held in the CEI Operating Account and
(C) checks and remittances other than from a member of the CEI Group in an
individual amount not in excess of $50,000 which checks and remittances are
deposited in the CEI Operating Account) shall, on the Domestic Business Day
received by CEI, be deposited by CEI into the CEI Revenue Account. Subject to
Section 6.09(l), during the continuance of a Default or Event of Default, all
such other cash received or held by CEI shall, on the date received, be
transferred to the Borrower, which cash shall be deposited by the Borrower on
the date received in the CDH Revenue Account.
(j) CEI may retain cash in the CEI Revenue Account and
may transfer cash from the CEI Revenue Account to the CEI Operating Account;
provided, however, that (i) the cash balance of the CEI Operating Account shall
not, at the close of business on any Domestic Business Day, exceed the sum of
(A) $1,000,000 plus (B) an amount equal to outstanding checks drawn on, and
pending wire transfers initiated from, the CEI Operating Account, and (ii) the
combined cash balances of the CEI Revenue Account and the CEI Operating Account
shall not, at the close of business on any Domestic Business Day, exceed the sum
of (A) $10,000,000 plus (B) an amount equal to outstanding checks drawn on, and
pending wire transfers initiated from, the CEI Operating Account.
(k) At or prior to the close of business on each Domestic
Business Day, CEI and the Borrower shall transfer the excess (if any) of (i) the
combined cash balances contained in the CEI Operating Account and the CDH
Operating Account over (ii) the sum of (A) $1,000,000 plus (B) an amount equal
to outstanding checks drawn on, and pending wire transfers initiated from, the
CEI Operating Account and the CDH Operating Account to the CEI Revenue Account.
After giving effect to the transfers referred to in the previous sentence, at or
prior to the close of business each Domestic Business Day, CEI shall transfer
the excess (if any) of (i) the combined cash balance contained in the CEI
Operating Account, the CDH Operating Account and the CEI
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Revenue Account over (ii) the sum of (A) $10,000,000 plus (B) an amount equal to
outstanding checks drawn on, and pending wire transfers initiated from, the CEI
Operating Account and the CDH Operating Account from the CEI Revenue Account to
the CDH Revenue Account.
(l) If, at the close of business on any Domestic Business
Day, the combined cash balances in the CEI Operating Account, the CDH Operating
Account and the CEI Revenue Account are less than the sum of (i) $10,000,000
plus (ii) an amount equal to outstanding checks drawn on, and pending wire
transfers initiated from, the CEI Operating Account and the CDH Operating
Account, the Borrower may transfer cash in an amount not to exceed such
difference from the CDH Revenue Account to the CEI Revenue Account and/or the
CDH Operating Account.
(m) At or prior to the close of business on the
penultimate Domestic Business Day of each calendar month, the Borrower shall
transfer the entire cash balance in the CDH Revenue Account to the Debt Account.
(n) By 12:00 P.M. (New York City time) on the third
Domestic Business Day of each calendar month, the Collateral Agent shall
transfer the entire cash balance in the Debt Account to the Administrative
Agent, to prepay of the Loans and the other Obligations outstanding under the
Financing Documents and to cash collateralize the Letters of Credit, in each
case as described in Section 2.16.
(o) Each of CEI and the Borrower hereby authorizes the
Collateral Agent to make each of the transfers from the Collateral Accounts
described in this Section 6.09 at the times specified in this Section 6.09
without further notification or action on the part of any member of the CEI
Group.
Section 6.10 Termination of Guaranty and Pledge Restrictions.
If any contractual or other prohibition, restriction or
limitation binding on any member of the CEI Group on the date hereof preventing
any member of the CEI Group from Guaranteeing, or granting a Lien on any of its
assets to secure, the Obligations outstanding under the Financing Documents is
terminated or ceases to be in effect or enforceable for any reason whatsoever,
each of CEI and the Borrower shall cause such member of the CEI Group to execute
and deliver a Subsidiary Guaranty and, as deemed appropriate by the Collateral
Agent, a Security Agreement and/or Mortgage, granting a first priority Lien in
favor of the Collateral Agent in all of the real and personal property owned by
such member of the CEI Group. In connection with the foregoing, CEI and the
Borrower shall, and shall such member of the CEI Group to, (i) take whatever
action (including, without limitation, the recording of mortgages, the filing of
Uniform Commercial Code financing statements, the giving of notices and the
endorsement of notices on title documents) may be necessary or advisable in the
opinion of the Collateral Agent to vest in the Collateral Agent valid and
subsisting Liens on the properties purported to be subject to the pledges and
security agreements delivered pursuant to this Section 6.10, enforceable against
all third parties in accordance with their terms, and (ii) at any time and from
time to time, promptly execute and deliver any and all further instruments and
documents and take all such other action as the Collateral Agent may deem
necessary or desirable in obtaining the full benefits of, or in perfecting and
preserving the Liens of, such pledges, assignments and security agreements.
76
Section 6.11 Further Assurances.
Promptly upon request by the Administrative Agent, CEI and the
Borrower shall, and shall cause each other member of the CEI Group to, do,
execute, acknowledge, deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, security agreements, pledge
agreements, assignments, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments as the Administrative Agent, may reasonably
require from time to time in order to (i) carry out more effectively the
purposes of the Financing Documents, (ii) to the fullest extent permitted by
applicable law, subject each member of the CEI Group's properties, assets,
rights or interests to the Liens now or hereafter intended to be covered by any
of the Collateral Documents, (iii) perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and any of the
Liens intended to be created thereunder and (iv) assure, convey, grant, assign,
transfer, preserve, protect and confirm more effectively unto the Secured
Parties the rights granted or now or hereafter intended to be granted to the
Secured Parties under any Financing Document or under any other instrument
executed in connection with any Financing Document to which any Credit Party is
or is to be a party.
ARTICLE VII
NEGATIVE COVENANTS
Section 7.01 Limitation on Debt.
Neither CEI nor the Borrower shall, or shall permit any other
member of the CEI Group to, incur, assume, create or suffer to exist any Debt,
except for:
(a) In the case of CEI and the Borrower:
(i) Debt under the Financing Documents;
(ii) Debt existing on the date hereof and set forth on
Schedule 7.01; and
(iii) Debt incurred to prepay the Debt of the Credit
Parties under the Financing Documents, provided that (A) the aggregate
Net Cash Proceeds of such Debt shall not be greater than the aggregate
principal amount of the Debt being prepaid, (B) such Debt shall contain
no amortization, repayment, prepayment or repurchase requirements prior
to January 31, 2007 and (C) the other material terms of such Debt, and
of any agreement entered into and of any instrument issued in
connection therewith, are no less favorable taken as a whole in any
material respect to the members of the CEI Group or the Lender Parties
than the terms of the Debt outstanding under the Financing Documents;
provided, however, that the interest rates with respect to any such
Debt may be set at current market rates at the time of such incurrence.
(b) In the case of each member of the CEI Group (other
than CEI, the Borrower, CEA and CMA):
77
(i) Debt under the Financing Documents;
(ii) Existing Project Financing Debt;
(iii) Other Debt existing on the date hereof and set forth
on Schedule 7.01; and
(iv) Debt incurred to refinance, replace, refund or extend
any or all of the Existing Project Financing Debt, provided that (A)
the aggregate principal amount of such Debt shall not exceed the
aggregate principal amount of the Debt being refinanced, replaced,
refunded or extended, unless the Loans are prepaid in an amount equal
to such excess pursuant to Section 2.15(a)(ii), (B) a member of the CEI
Group shall be a direct or contingent obligor in respect of such Debt
to no greater extent than such member of the CEI Group is liable in
respect of the Debt being refinanced, replaced, refunded or extended,
(C) the final maturity of such Debt is no earlier than the Debt being
refinanced, replaced, refunded or extended, and (D) except with respect
to the Existing Project Financing Debt in respect of the Quachita
Project, the Southaven Project and the Dominican Republic Project, the
material terms (including amortization schedule, prepayment and
repurchase requirement, interest rates, covenants and defaults) taken
as a whole of such Debt, and of any agreement entered into and of any
instrument issued in connection therewith, are no less favorable in any
material respect to the members of the CEI Group or the Lender Parties
than the terms of the Debt being so refinanced, replaced, refunded or
extended.
(c) In the case of CEA and its Subsidiaries and CMA and
its Subsidiaries:
(i) Debt incurred by CEA and its Subsidiaries under the
CEA Credit Agreement, as in effect on the date hereof;
(ii) Debt incurred by CMA and its Subsidiaries under the
CMA Credit Agreement, as in effect on the date hereof (plus automatic
increases of letter of credit amounts and the related reimbursement
Debt as provided therein); and
(iii) Debt incurred to refinance, replace, refund or extend
any or all of the Debt outstanding under the CEA Credit Agreement or
the CMA Credit Agreement, provided that (A) the aggregate principal
amount of such Debt shall not exceed the aggregate principal amount of
the Debt being refinanced, replaced, refunded or extended, unless the
Loans are prepaid in an amount equal to such excess pursuant to Section
2.15(a)(ii), (B) CEA, CMA and their respective Subsidiaries shall be a
direct or contingent obligor in respect of such Debt to no greater
extent than such Person is liable in respect of the Debt being
refinanced, replaced, refunded or extended, (C) the final maturity of
such Debt is no earlier than the Debt being refinanced, replaced,
refunded or extended, and (D) the material terms (including
amortization schedule, prepayment and repurchase requirement, interest
rates, covenants and defaults) taken as a whole of such Debt, and of
any agreement entered into and of any instrument issued in connection
therewith, are no less favorable in any material respect to CEA, CMA
and their respective Subsidiaries or the Lender Parties than the terms
of the Debt being so refinanced, replaced, refunded or
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extended; provided, however, that the interest rates with respect to
any such Debt may be set at current market rates at the time of such
incurrence.
(d) In the case of each member of the CEI Group:
(i) Debt owing by a Credit Party that is a wholly-owned
Subsidiary of CEI to another Credit Party that is a wholly-owned
Subsidiary of CEI, so long as such Debt is subordinated on terms
reasonably satisfactory to the Administrative Agent to the Debt of such
Credit Party under the Financing Documents;
(ii) Current liabilities in respect of taxes, assessments
and governmental charges or levies incurred, or claims for labor,
materials, inventory, services, supplies and rentals incurred, or for
goods or services purchased, in the ordinary course of business
consistent with the past practice of such member of the CEI Group;
(iii) Debt (not for borrowed money) incurred in the
ordinary course of business to support the performance obligations of a
Subsidiary of CEI engaged in providing construction management or
operating services to a Power Generation Facility;
(iv) Purchase money Debt in respect of any Property
acquired or held by a member of the CEI Group in the ordinary course of
business; provided, the principal amount of such Debt does not exceed
100% of the purchase price of such Property and is incurred solely for
the purpose of financing the acquisition of such Property;
(v) Debt under any Capitalized Lease incurred in the
ordinary course of business; provided, the principal amount of such
Debt does not exceed 100% of the purchase price of such Property and is
incurred solely for the purpose of financing the acquisition of such
Property; and
(vi) Debt under Hedge Agreements permitted by Section
7.10(b).
Section 7.02 Liens.
Neither CEI nor the Borrower shall, or shall permit any other
member of the CEI Group to, create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it, except:
(a) Liens created under the Financing Documents;
(b) Liens existing on the date of this Agreement securing
the Existing Project Financing Debt and the Debt outstanding under the CEA
Credit Agreement and the CMA Credit Agreement;
(c) Purchase money Liens and purchase money security
interests upon or in any Property acquired or held by a member of the CEI Group
in the ordinary course of business securing Debt permitted under Section
7.01(d)(iv);
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(d) Liens to secure Capitalized Lease Obligations if the
incurrence of such Debt is permitted by Section 7.01(d)(v); provided, however,
that: (i) any such Lien is created solely for the purpose of securing Debt
representing, or incurred to finance, refinance or refund, the cost (including,
without limitation, the cost of construction) of the property subject thereto,
(ii) the principal amount of the Debt secured by such Lien does not exceed 100%
of such cost, (iii) such Lien does not extend to or cover any other property
other than such item of property and any improvements on such item, and (iv)
such Capitalized Lease Obligations are in the ordinary course of business;
(e) Any Lien existing on any asset prior to the
acquisition thereof by a Subsidiary of the Borrower and not created in
contemplation of such acquisition;
(f) Pari passu first priority Liens on the Collateral,
securing Debt of the type described in Section 7.01(a)(iii) if, after
application of the Net Cash Proceeds thereof to the prepayment of the Loans and
the cash collateralization of Letters of Credit, the Loans and Commitments are
permanently reduced to an aggregate outstanding amount not in excess of
$50,000,000 (and in connection with such incurrence of Debt, the Collateral
Agent shall enter into customary intercreditor agreement on terms reasonably
acceptable to the Collateral Agent to effect the same).
(g) Second priority Liens on the Collateral (subordinated
to the Liens on the Collateral in favor of the Collateral Agent on terms and
conditions satisfactory to the Collateral Agent), securing Debt of the type
described in Section 7.01(a)(iii) in an original principal amount of not less
than $50,000,000, the Net Cash Proceeds of which are used to prepay the Loans
and cash collateralize Letters of Credit;
(h) Any Lien securing the refinancing, renewal, extension
or refunding of any Debt secured by any Lien permitted by subsections (b), (c),
(d), (e), (f) or (g) of this Section 7.02 without any increase in the amount
secured thereby or in the assets subject to such Lien;
(i) Liens in connection with worker's compensation,
social security obligations, taxes, assessments, statutory obligations or other
similar charges, good faith deposits in connection with tenders, contracts or
leases to which a member of the CEI Group is a party or other deposits required
to be made in the ordinary course of business and not in connection with
borrowing money or obtaining advances or credit; provided in each case that the
obligation or liability arises in the ordinary course of business and if overdue
is being contested in good faith by appropriate proceedings;
(j) Liens arising by operation of law in favor of
materialmen, mechanics, warehousemen, carriers, lessors or other similar Persons
incurred by a member of the CEI Group in the ordinary course of business which
secure its obligations or liabilities to such Person; provided in each case that
the obligation or liability arises in the ordinary course of business and if
overdue is being contested in good faith by appropriate proceedings;
(k) With respect to real property, easements, rights of
way, reservations and other minor defects or irregularities in title which do
not materially burden such real property or impair the use thereof for the
purposes for which it is held by a member of the CEI Group;
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(l) Liens (other than Liens imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due or which are
being contested in good faith and by appropriate proceedings diligently
conducted, if adequate reserves with respect thereto are maintained on the books
of the applicable Person in accordance with GAAP;
(m) Deposits to secure the performance of bids, trade
contracts and leases (other than Debt), statutory obligations, surety bonds
(other than bonds related to judgments or litigation), performance bonds and
other obligations of a like nature incurred in the ordinary course of business;
(n) Liens securing judgments for the payment of money not
constituting an Event of Default under Section 8.01(q) or securing appeal or
other surety bonds related to such judgments;
(o) Leases or subleases granted to others not interfering
in any material respect with the business of any member of the CEI Group;
(p) Any interest of title of a lessor under, and Liens
arising from UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, leases permitted by this
Agreement;
(q) Liens deemed to exist in connection with Investments
in repurchase agreements permitted under Section 7.06;
(r) Normal and customary rights of setoff upon deposits
of cash in favor of banks or other depository institutions;
(s) Liens of a collection bank arising under Section
4-210 of the Uniform Commercial Code on items in the course of collection; and
(t) Liens of sellers of goods to any member of the CEI
Group arising under Article 2 of the Uniform Commercial Code or similar
provisions of applicable law in the ordinary course of business, covering only
the goods sold and securing only the unpaid purchase price for such goods and
related expenses.
Section 7.03 Restricted Payments.
(a) CEI shall not, directly or indirectly (i) declare or
make any dividend payment or other distribution of assets, properties, cash,
rights, obligations or securities on account or in respect of any of its Equity
Interests, (ii) purchase, redeem, retire, defease or otherwise acquire for value
any of its Equity Interests, (iii) return any capital to its stockholders as
such, or (iv) purchase, redeem, prepay, defease or otherwise acquire for value
or make any payment (other than required payments) on account or in respect of
any principal amount of Debt (other than the Loans), now or hereafter
outstanding, except for the purchase of 8.10% Senior Notes in the open market at
a purchase price not greater than 96% of the par value thereof.
(b) The Borrower shall not, directly or indirectly (i)
declare or make any dividend payment or other distribution of assets,
properties, cash, rights, obligations or securities
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on account or in respect of any of its Equity Interests other than dividends and
distributions paid to CEI in accordance with Sections 4.17 or 6.09,(ii)
purchase, redeem, retire, defease or otherwise acquire for value any of its
Equity Interests, (iii) return any capital to its stockholders as such, or (iv)
except for the Loans, purchase, redeem, prepay, defease or otherwise acquire for
value or make any payment (other than required payments) on account or in
respect of any principal amount of Debt for borrowed money, now or hereafter
outstanding.
(c) CEI and the Borrower shall not permit any other
member of the CEI Group to, directly or indirectly (i) declare or make any
dividend payment or other distribution of assets, properties, cash, rights,
obligations or securities on account or in respect of any of its Equity
Interests other than dividends paid ratably to each holder of such Equity
Interests, (ii) purchase, redeem, retire, defease or otherwise acquire for value
any of its Equity Interests, (iii) return any capital to its stockholders as
such or (iv) purchase, redeem, prepay, defease or otherwise acquire for value or
make any payment (other than required payment obligations in effect on the date
hereof) on account or in respect of any principal amount of Debt for borrowed
money, now or hereafter outstanding, except, payments may be made to a Credit
Party on account of any Debt owing to such Credit Party.
Section 7.04 Consolidations and Mergers.
Neither CEI nor the Borrower shall, or shall permit any other
member of the CEI Group to, merge into, consolidate with or sell, transfer or
otherwise dispose of all or substantially all of its assets to, any Person or
permit any Person to merge into it, except that:
(a) a Subsidiary of the Borrower may sell, transfer or
otherwise dispose of all or substantially all of its assets, if such sale,
transfer or disposition is permitted under Section 7.07(c);
(b) in connection with any sale or other disposition
permitted under Section 7.07(c), a member of the CEI Group may merge into or
consolidate with any other Person or permit any other Person to merge into or
consolidate with it, provided that, immediately after the consummation of such
merger, such member of the CEI Group no longer constitutes a Subsidiary of CEI;
and
(c) each of the Inactive Subsidiaries may be merged with
and into the member of the CEI Group owning 100% of such Inactive Subsidiary's
Equity Interests.
Section 7.05 Transaction with Affiliates.
Neither CEI nor the Borrower shall, or shall permit any other
member of the CEI Group to, directly or indirectly, pay any funds to or for the
account of, make any Investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, guarantee or other
agreement to pay, purchase or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect any transaction in
connection with any joint enterprise or other joint arrangement with, any
Affiliate, except for transactions in the ordinary course of business on a basis
no less favorable to CEI, the Borrower or such other member of the CEI Group as
would be
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obtained in a comparable arm's length transaction with a Person not an
Affiliate. This covenant shall not apply to (a) any transaction on commercially
reasonable terms between CEI and CIP for the lease of CEI's headquarters
building, (b) Stockholder Loans as in effect on the date hereof and (c) any
other agreements with Affiliates of CEI as in effect on the date hereof.
Section 7.06 Investments in Other Persons.
Neither CEI nor the Borrower shall make or hold, or permit any
other member of the CEI Group to make or hold, any Investment in any Person,
except:
(a) Investments by members of the CEI Group existing or
outstanding on the date hereof;
(b) Investments in the form of working capital loans,
subordinated to the Obligations outstanding under the Financing Documents
pursuant to documentation satisfactory to the Administrative Agent, in members
of the CEI Group having a direct ownership interest in the Roxboro Project,
Southport Project, Hopewell Project or Portsmouth Project in an aggregate amount
at any time outstanding not to exceed $2,500,000 and not to exceed $1,000,000 in
respect of the Roxboro Project, Southport Project, Hopewell Project or
Portsmouth Project individually;
(c) loans and advances to employees (except employees who
are also stockholders of any member of the CEI Group, in which case, any such
loans or advances are prohibited) in the ordinary course of the business of such
member of the CEI Group as presently conducted in an aggregate principal amount
not to exceed $200,000 at any time outstanding, provided that such limitation
shall not apply to (i) loans and advances which are made from any such
employee's 401(k) account or other similar retirement benefit plan or defined
contribution plan and (ii) advances related to reasonable and customary business
travel expenses incurred in the ordinary course of business;
(d) Investments in accounts, contract rights and chattel
paper (each as defined in the Uniform Commercial Code), notes receivable and
similar items arising or acquired in the ordinary course of business consistent
with the past practice;
(e) Investments in Temporary Cash Investments;
(f) Investments in Subsidiaries of CEI resulting from
drawings under, or renewals or extensions of, letters of credit, surety bonds,
Guaranties or performance bonds supporting obligations of such Subsidiaries
issued and outstanding on the Closing Date (including renewals and extensions
thereof) and Investments in Subsidiaries of CEI to cash collateralize
obligations supported by such letters of credit, bonds or Guaranties if they
expire or are cancelled undrawn;
(g) Investments in any non-cash proceeds received in
connection with any transaction permitted by the provisions of Section 7.07;
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(h) Investments by CEI in the form of payments,
redemptions or repurchases of the 8.10% Senior Notes made with the proceeds of
Tranche C Term Loans in accordance with Section 4.17(a)(vi); and
(i) Investments received in connection with the
bankruptcy or reorganization of, or settlement of delinquent accounts and
disputes with, or as a result of a default by, customers or suppliers to, or
co-investors in, any member of the CEI Group.
Section 7.07 Asset Sales.
Subject to the provisions of Section 7.04, neither CEI nor the
Borrower shall sell, lease, transfer or otherwise dispose of, or permit any
other member of the CEI Group to sell, lease, transfer or otherwise dispose of,
any assets or other Property, or grant any option or other right to purchase,
lease or otherwise acquire any assets or other Property, except:
(a) Excluded Asset Sales;
(b) the transfer of Property and members of the CEI Group
comprising the Caledonia Project pursuant to the Term Sheet, dated as of May 21,
2003, as modified by the letter agreement dated as of August 19, 2003, each
among Cogentrix Caledonia Holdings I, Inc., Caledonia Generating, LLC, and
General Electric Capital Corporation; and
(c) sales, transfers or other dispositions of assets not
constituting Collateral so long as (i) the consideration received by such member
of the CEI Group for such assets shall equal or exceed the Fair Market Value of
such assets, (ii) after the repayment or prepayment of all Debt (other than the
Loans) required to be repaid or prepaid in connection with such sale, transfer
or disposition, at least 90% of the remaining purchase price received by such
member of the CEI Group for such asset shall consist solely of cash or
securities or other obligations that can be readily converted to cash so long as
such securities or other obligations are converted to cash on the closing date
of such sale, transfer or other disposition; (iii) any non-cash proceeds
received by such member of the CEI Group are pledged to the Collateral Agent as
Collateral under the Security Agreement, and (iv) the Loans are prepaid and
Letters of Credit are cash collateralized in an amount equal to the Net Cash
Proceeds from such sale, transfer or disposition pursuant to, and in the amount
and order of priority set forth in, Section 2.15(a)(i).
Upon a sale of assets or the sale of Equity Interests of a
member of the CEI Group permitted by this Section 7.07, the Administrative Agent
and the Collateral Agent shall (to the extent applicable) deliver to the Credit
Parties, upon the Credit Parties' request and at the Credit Parties' expense,
such documentation as is reasonably necessary to evidence the release of the
Collateral Agent's security interest, if any, in such assets or Equity
Interests, including, without limitation, amendments or terminations of UCC
financing statements, if any, the return of stock certificates, if any, and the
release of such member of the CEI Group from all of its obligations, if any,
under the Financing Documents.
Section 7.08 Lease Obligations.
Except as specifically disclosed on Schedule 7.08, neither CEI
nor the Borrower shall create or suffer to exist, or permit any other member of
the CEI Group to create or suffer to
84
exist, any obligations as lessee for the rental or hire of real or personal
property of any kind under other leases or agreements to lease having an
original term of one year or more which would cause the direct or contingent
liabilities of CEI and its Subsidiaries, on a consolidated basis, in respect of
all such obligations to exceed $1,000,000 payable in any period of 12
consecutive months.
Section 7.09 Issuances and Transfers of Equity Interests.
The Borrower shall not, and CEI and the Borrower shall not
permit any of its Subsidiaries to, issue any Equity Interests other than (i) any
issuance of common stock in connection with an Asset Sale or other disposition
permitted by Section 7.07 or (ii) any such issuance of common stock (other than
Redeemable Stock) by a Subsidiary of the Borrower to the Borrower or a
Subsidiary Pledgor, and then only if pledged to the Collateral Agent pursuant to
the Security Agreement.
Section 7.10 Off Balance Sheet Obligations; Hedge Agreement
Obligations.
(a) Neither CEI nor the Borrower shall have, incur or
undertake, or permit any other member of the CEI Group to have, incur or
undertake any Off Balance Sheet Obligations, other than (i) Off Balance Sheet
Obligations existing on the date hereof and (ii) operating leases permitted by
Section 7.08.
(b) Neither CEI nor the Borrower shall, or shall permit
any other member of the CEI Group to, enter into any Hedge Agreement, except for
Hedge Agreements entered into to hedge against fluctuations in interest rates,
foreign exchange rates and commodity prices incurred in the ordinary course of
business and consistent with prudent business practice.
Section 7.11 Change in Nature of Business.
Neither CEI nor the Borrower shall, or shall permit any other
member of the CEI Group to, engage in any material line of business
substantially different from those lines of business conducted by CEI, the
Borrower or such Subsidiary of CEI on the date hereof or any business
substantially related or incidental thereto.
Section 7.12 Modification of Contractual Obligations.
Neither CEI nor the Borrower shall, or shall permit any other
member of the CEI Group to, alter, amend, modify, rescind, terminate or waive
any of their respective rights under the Designated Agreements, the Stockholder
Loans, or any other material Contractual Obligation; provided, however, that CEI
or the Borrower may, and may permit any member of the CEI Group to, alter,
amend, modify, rescind, terminate or waive any of their respective rights under
the Designated Agreements (other than the 8.10% Senior Notes, the 8.10% Senior
Note Indenture, the 8.75% Senior Notes, or the 8.75% Senior Note Indenture) or
any other Contractual Obligation solely to allow the incurrence of Debt
permitted by Sections 7.01(a)(iii), 7.01(b)(iv) or 7.01(c)(iii); provided,
further, that, with respect to any Contractual Obligation, other than the 8.10%
Senior Notes, the 8.10% Senior Note Indenture, the 8.75% Senior Notes, the 8.75%
Senior Note Indenture or the Stockholder Loans, neither CEI nor the Borrower
shall be deemed in default of this Section 7.12 if (a) all such alterations,
amendments, modifications, rescissions,
85
terminations or waivers in the aggregate have no Material Adverse Effect, (b)
such alteration, amendment, modification, rescission, termination or waiver
would not (i) increase the likelihood of a Letter of Credit Drawing under any
Letter of Credit or (ii) alter the circumstances pursuant to which a Letter of
Credit Drawing could be made under any Letter of Credit, and (c) the terms of
such alteration, amendment, modification, rescission, termination or waiver are
no less favorable in any material respect to the members of the CEI Group or the
Lender Parties than the terms of the agreement being so altered, amended,
modified, rescinded terminated or waived.
Section 7.13 Accounting Changes.
Neither CEI nor the Borrower shall make, nor permit any other
member of the CEI Group to make, any change in accounting treatment and
reporting practices, except as (a) required by law or (b) permitted by a change
in GAAP made after the Closing Date which allows for changes in accounting
treatment elections and disclosed to the Lenders Parties.
Section 7.14 Cancellation of Indebtedness Owed to It.
Neither CEI nor the Borrower shall cancel, or permit any other
member of the CEI Group to cancel, (a) any Stockholder Loan or (b) any other
claim or Debt owed to it except in the case of this clause (b) for adequate
consideration and in the ordinary course of business.
Section 7.15 New Subsidiaries.
Neither CEI nor the Borrower shall, or shall permit any other
member of the CEI Group to, acquire, incorporate or otherwise organize any
Subsidiary which was not in existence on the Closing Date, unless (a) all the
outstanding Equity Interests of such Subsidiary are owned by a Credit Party and
pledged to the Collateral Agent pursuant to the Security Agreement (b) such
Subsidiary executes and delivers a Subsidiary Guaranty, and (c) such Subsidiary
executes and delivers, as deemed appropriate by the Collateral Agent, a Security
Agreement and/or Mortgage, granting a first priority Lien in favor of the
Collateral Agent in all of the real and personal property owned by such
Subsidiary. In connection with the foregoing, CEI and the Borrower shall, and
shall cause each other member of the CEI Group to, (i) take whatever action
(including, without limitation, the recording of mortgages, the filing of
Uniform Commercial Code financing statements, the giving of notices and the
endorsement of notices on title documents) may be necessary or advisable in the
opinion of the Collateral Agent to vest in the Collateral Agent valid and
subsisting Liens on the properties purported to be subject to the pledges and
security agreements delivered pursuant to this Section 7.15, enforceable against
all third parties in accordance with their terms, and (ii) at any time and from
time to time, promptly execute and deliver any and all further instruments and
documents and take all such other action as the Collateral Agent may deem
necessary or desirable in obtaining the full benefits of, or in perfecting and
preserving the Liens of, such pledges, assignments and security agreements.
Section 7.16 Limitations on Dividends and Other Payment
Restrictions Affecting Subsidiaries.
Neither CEI nor the Borrower shall, or shall permit any other
member of the CEI Group to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Subsidiary of CEI (other than the
86
Caledonia-Related Entities, Quachita-Related Entities, Southaven-Related
Entities and Dominican Republic-Related Entities) to (a) pay dividends or make
any other distributions permitted by applicable law on any Capital Stock of such
Subsidiary owned by any member of the CEI Group, (b) make payments in respect of
any Debt owed to any member of the CEI Group, (c) make loans or advances to the
Borrower or any Subsidiary of the Borrower or (d) transfer any of its Property
to the Borrower or any Subsidiary of CEI, other than those encumbrances and
restrictions created or existing (i) on the date of this Agreement, or (ii)
pursuant to the Financing Documents.
Section 7.17 Limitations on Accumulation of Funds by
Subsidiaries.
CEI and the Borrower shall not permit the accumulation of
funds at any member of the CEI Group, other than (a) cash balances contained in
the Collateral Accounts maintained by CEI and the Borrower, as described in this
Agreement, (b) cash balances as may be reasonably required to be maintained by a
Subsidiary of CEI for the payment of ordinary operating expenses incurred in the
ordinary course of business, (c) in the case of any Subsidiary of CEI (other
than the Borrower) directly owning an interest in a power generation facility,
funds required to be accumulated pursuant to reasonable and customary
restrictions in effect on the date hereof or in respect of Debt permitted under
Section 7.01(b)(iv), imposed under the documentation for the financing or
operation of such power generation facility and required for such financing or
operation, (d) in the case of CMA, funds required to be accumulated pursuant to
the CMA Credit Agreement and the security deposit agreement entered into in
connection therewith as in effect on the date hereof or in respect of Debt
permitted under Section 7.01(c)(iii), and (e) in the case of CEA, funds required
to be accumulated pursuant to the CEA Credit Agreement and the security deposit
agreement entered into in connection therewith as in effect on the date hereof
or in respect of Debt permitted under Section 7.01(c)(iii).
Section 7.18 Capital Structure.
Neither CEI nor the Borrower shall make, or shall permit any
other member of the CEI Group to make, any change in its capital structure
(including, without limitation, in the terms of its outstanding Equity
Interests) or amend its certificate of incorporation, by-laws or other
comparable documents other than amendments which in the aggregate have no
Material Adverse Effect.
Section 7.19 Use of Proceeds.
The Borrower shall not use the proceeds of any Loan or any
Letter of Credit for any purpose other than those specified in Section 4.17.
Section 7.20 Bank Accounts.
(a) CEI shall not maintain any bank account or similar
account with any financial institution other than the CEI Revenue Account and
the CEI Operating Account (together with customary payroll, tax and similar
sub-accounts).
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(b) The Borrower shall not maintain any bank account or
similar account with any financial institution other than the CDH Operating
Account, the CDH Revenue Account, the Letter of Credit Cash Collateral Accounts
and the Debt Account.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.01 Events of Default.
If one or more of the following events (each, an "EVENT OF
DEFAULT") shall have occurred and be continuing:
(a) The Borrower shall fail to pay when due any principal
of any Loan or any Reimbursement Obligation, or shall fail to pay within five
days of the date when due any interest, fees or other amounts payable under any
Financing Document;
(b) The Borrower or CEI shall fail to observe or perform
any covenant contained in Section 6.01 (other than Section 6.01(a), (b), (c),
(e) or (l)) or 6.09 or in Article VII;
(c) The Borrower or CEI shall fail to observe or perform
any covenant contained in Sections 6.01(a), (b), (c), (e) or (l) for three
Domestic Business Days after the earlier of (i) such Credit Party becoming aware
of such failure or (ii) written notice thereof being given to the Borrower by
the Administrative Agent at the request of any Lender Party;
(d) Any Credit Party shall fail to observe or perform any
covenant or agreement contained in any Financing Document (other than those
covered by clause (a) or (b) above) for 10 days after the earlier of (i) such
Credit Party becoming aware of such failure or (ii) written notice thereof being
given to the Borrower by the Administrative Agent at the request of any Lender
Party;
(e) Any representation, warranty, certification or
statement made by any Credit Party in any Financing Document or in any
certificate, financial statement or other document delivered pursuant to any
Financing Document shall prove to have been incorrect in any material respect
when made (or deemed made);
(f) Any provision of any Financing Document shall cease
to be valid, binding and in full force and effect, or any member of the CEI
Group shall so state in writing, other than as permitted by the Financing
Documents or upon satisfaction in full of all of the Obligations;
(g) Any Collateral Document or the provisions of Sections
2.20 or 2.21 shall, for any reason, cease to create a valid Lien on any of the
Collateral purported to be covered thereby, or such Lien shall cease to be a
perfected and first priority Lien, or any member of the CEI Group shall so state
in writing, unless such reason is within the control of the Lender Parties;
88
(h) Any member of the CEI Group shall fail to pay any
principal of or premium or interest on any Debt outstanding under any of the
Designated Agreements or any Debt incurred to refinance, replace, refund or
extend any or all of the Debt outstanding under the Designated Agreements when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise); or any other event shall occur
or condition shall exist under any Designated Agreement (excluding, through July
5, 2004 only, the CEA Credit Agreement) or any agreement or instrument relating
to any such Debt, if the effect of such event or condition is to accelerate, or
to permit the acceleration of, the maturity of such Debt; or any such Debt shall
become or be declared to be due and payable, or required to be prepaid (other
than by a regularly scheduled required prepayment), or any member of the CEI
Group shall be required to repurchase or offer to repurchase such Debt, prior to
the stated maturity thereof;
(i) Any Credit Party or any Specified Subsidiary shall
fail to pay any principal of or premium or interest on any Debt of such Credit
Party or Specified Subsidiary having a principal amount of $10,000,000 or more
(excluding the Loans and the Debt outstanding under any of the Designated
Agreements), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise); or any other
event shall occur or condition shall exist under any agreement or instrument
relating to any such Debt, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt; or any
such Debt shall become or be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment), or any Credit
Party or any Specified Subsidiary shall be required to repurchase or offer to
repurchase such Debt, prior to the stated maturity thereof; provided, however,
that any such event or condition caused solely by the failure of a Specified
Subsidiary to maintain insurance as required by the terms of such Debt shall not
constitute an "Event of Default" under this clause (i) if (i) such insurance is
not commercially available, (ii) the maturity of such Debt has not been
accelerated and (iii) such event or condition has not resulted in the blockage
of distributions of cash from such Specified Subsidiary to CEI for a period of
time during which two consecutive calendar quarters have ended;
(j) Any member of the CEI Group (other than a Credit
Party or a Specified Subsidiary) or any Non-Controlled Affiliate shall fail to
pay any principal of or premium or interest on any Debt of such member of the
CEI Group or such Non-Controlled Affiliate which Debt is not Non-Recourse to
each Credit Party having a principal amount of $10,000,000 or more, when the
same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise); or any other event shall occur
or condition shall exist under any agreement or instrument relating to any such
Debt, if the effect of such event or condition is to accelerate, or to permit
the acceleration of, the maturity of such Debt; or any such Debt shall become or
be declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), or such member of the CEI Group or
such Non-Controlled Affiliate shall be required to repurchase or offer to
repurchase such Debt, prior to the stated maturity thereof;
(k) Any member of the CEI Group (other than a Credit
Party or a Specified Subsidiary) or any Non-Controlled Affiliate shall fail to
pay any principal of or premium or interest on any Debt of such member of the
CEI Group or such Non-Controlled Affiliate which
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Debt is Non-Recourse to each Credit Party having a principal amount of
$10,000,000 or more, when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise); or any other
event shall occur or condition shall exist under any agreement or instrument
relating to any such Debt, if the effect of such event or condition is to
accelerate the maturity of such Debt; or any such Debt shall become or be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), or such member of the CEI Group or
such Non-Controlled Affiliate shall be required to repurchase or offer to
repurchase such Debt, prior to the stated maturity thereof (all such Debt,
"DEFAULTED NON-RECOURSE DEBT"); provided, however, that an Event of Default
shall not have occurred under this clause (k) unless, after giving effect
thereto, the aggregate Distributed Cash Flow for the preceding 12-month period
from all Subsidiaries of CEI (other than Credit Parties and the Specified
Subsidiaries) and Non-Controlled Affiliates that have Defaulted Non-Recourse
Debt equals or exceeds 10% of the aggregate Distributed Cash Flow from all
Subsidiaries of CEI and Non-Controlled Affiliates;
(l) Any member of the CEI Group (other than any of the
Quachita-Related Entities, the Southaven-Related Entities, the Dominican
Republic-Related Entities or the Caledonia-Related Entities) shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall admit in writing its inability to pay its debts generally,
or shall take any corporate action to authorize any of the foregoing;
(m) an involuntary case or other proceeding shall be
commenced against any member of the CEI Group (other than any of the
Quachita-Related Entities, the Southaven-Related Entities, the Dominican
Republic-Related Entities or the Caledonia-Related Entities) seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against any member of
the CEI Group under the federal bankruptcy laws as now or hereafter in effect;
(n) Any of the Quachita-Related Entities, the
Southaven-Related Entities, the Dominican Republic-Related Entities or the
Caledonia-Related Entities or any Non-Controlled Affiliate shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall admit in writing its inability to pay its debts generally,
or shall take any corporate action to
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authorize any of the foregoing; provided, however, that that such an event shall
not constitute an Event of Default under this clause (n) unless, after giving
effect thereto, the aggregate Distributed Cash Flow for the preceding 12-month
period from all Quachita-Related Entities, Southaven-Related Entities, Dominican
Republic-Related Entities, Caledonia-Related Entities and Non-Controlled
Affiliates that have suffered such an event equals or exceeds 10% of the
aggregate Distributed Cash Flow from all Subsidiaries of CEI and Non-Controlled
Affiliates;
(o) an involuntary case or other proceeding shall be
commenced against any of the Quachita-Related Entities, the Southaven-Related
Entities, the Dominican Republic-Related Entities or the Caledonia-Related
Entities or against any Non-Controlled Affiliate seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against any such
Person under the federal bankruptcy laws as now or hereafter in effect;
provided, however, that that such an event shall not constitute an Event of
Default under this clause (o) unless, after giving effect thereto, the aggregate
Distributed Cash Flow for the preceding 12-month period from all the
Quachita-Related Entities, Southaven-Related Entities, Dominican
Republic-Related Entities, Caledonia-Related Entities and Non-Controlled
Affiliates that have suffered such an event equals or exceeds 10% of the
aggregate Distributed Cash Flow from all Subsidiaries of CEI and Non-Controlled
Affiliates;
(p) notice of intent to terminate a Plan shall be filed
under Title IV of ERISA by any member of the ERISA Group, or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer any Plan; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree adjudicating that
any Plan must be terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans or any Multiemployer
Plan shall be in reorganization or insolvency; or notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA) with respect to any
Plan which might constitute grounds for a termination of such Plan under Title
IV of ERISA, shall be given or shall be required to be given; or application for
a waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code has been filed with respect to a Plan; or notice of withdrawal from
any Plan pursuant to Section 4063 of ERISA shall be given; or any member of the
ERISA Group shall fail to make any required payment or contribution to any Plan
or Multiemployer Plan or in respect of any Benefit Arrangement, shall make any
amendment to any Plan or Benefit Arrangement, or engaged in any transaction
described in Sections 4062, 4063 or 4064 of ERISA, which has resulted in the
imposition of a Lien on the property of any member of the ERISA Group or the
posting of a bond or other security pursuant to Sections 302(f), 307 or 4068 of
ERISA or Sections 401(a)(29) or 412(n) of the Internal Revenue Code; and any
such event or events described in this subparagraph (p), either individually or
together with any other such event or events, could cause one or more members of
the ERISA Group to incur liability in excess of $3,000,000;
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(q) a judgment or order for the payment of money in
excess of $3,000,000 shall be rendered against any member of the CEI Group
(other than ReUse Technology, Inc.), and such judgment or order shall continue
unsatisfied and unstayed for a period of 60 days (each, an "UNSATISFIED
JUDGMENT"); provided, however, that any such Unsatisfied Judgment against a
member of the CEI Group that is not a Credit Party or a Specified Subsidiary
shall not constitute an Event of Default under this clause (q) unless after
giving effect thereto, the aggregate Distributed Cash Flow for the preceding
12-month period from all Subsidiaries of CEI (other than Credit Parties and the
Specified Subsidiaries) that have Unsatisfied Judgments equals or exceeds 10% of
the aggregate Distributed Cash Flow from all Subsidiaries of CEI; or
(r) (i) Any Person not a Permitted Holder, or any "group"
(within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended) not composed entirely of Permitted Holders, (A) shall have
acquired beneficial ownership any outstanding class of Capital Stock having
ordinary voting power in the election of directors of CEI or (B) shall obtain
the power (whether or not exercised) to elect any of CEI's directors, (ii)
during any period of twelve consecutive calendar months, individuals who were
either (x) directors of CEI on the first day of such period (or who were
appointed or nominated for election as directors of CEI by at least a majority
of the individuals who were directors of CEI on the first day of such period) or
(y) appointed directors to replace directors removed solely as a result of death
or mental or physical disability, shall cease to constitute a majority of the
Board of Directors or (iii) any purchase, prepayment, redemption or payment of
any kind shall be made by any member of the CEI Group or any other Person under
or in respect of the 8.10% Senior Notes, the 8.10% Senior Note Indenture, the
8.75% Notes or the 8.75% Indenture in connection with any "change of control" or
similar provisions contained therein or related thereto;
then, and in every such event, the Administrative Agent shall (i) if requested
by the Required Lenders (or, in the case of an Event of Default under Section
8.01(r), any Lender), by notice to the Borrower terminate the Commitments and
they shall thereupon terminate and (ii) if requested by the Required Lenders
(or, in the case of an Event of Default under Section 8.01(r), any Lender), by
notice to the Borrower declare the Notes, all interest thereon, and all other
amounts payable under this Agreement and the other Financing Documents to be,
and the Notes, all such interest thereon and all such other amounts shall
thereupon become immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; provided that upon the occurrence of an Event of Default specified in
subparagraph (l), (m), (n) or (o) above, without any notice to the Borrower or
any other act by the Administrative Agent or the Lenders, the Commitments shall
thereupon terminate and the Notes, all interest thereon, and all other amounts
payable under this Agreement and the other Financing Documents shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower.
Section 8.02 Notice of Default.
The Administrative Agent shall give notice to the Borrower
under Section 8.01(d) promptly upon being requested to do so by any Lender Party
and shall thereupon notify all the Lenders thereof.
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Section 8.03 Cash Collateral.
Upon the occurrence of an Event of Default specified in
Section 8.01(l), (m), (n) or (o), or if the Loans of the Lender Parties shall
have otherwise been accelerated or the Commitments been terminated pursuant to
Section 8.01, then without any request or the taking of any other action by the
Administrative Agent or any of the other Lender Parties, the Borrower shall be
obligated forthwith to pay to the Collateral Agent an amount in immediately
available funds equal to the then aggregate Available Amount of all Letters of
Credit (regardless of whether any conditions to drawing any Letter of Credit can
then be met), to be held by the Collateral Agent as cash collateral as provided
in Sections 2.20 and 2.21.
ARTICLE IX
THE ADMINISTRATIVE AGENT AND COLLATERAL AGENT
Section 9.01 Appointment and Authorization.
Each Lender and the Issuer irrevocably appoints and authorizes
the Administrative Agent and the Collateral Agent to take such action as agent
on its behalf and to exercise such powers and discretion under this Agreement
and the other Financing Documents as are delegated to the Administrative Agent
or the Collateral Agent, as the case may be, by the terms hereof and thereof,
together with all such powers and discretion as are reasonably incidental
thereto. As to any matters not expressly provided for by the Financing Documents
(including, without limitation, enforcement or collection of the Notes), neither
the Administrative Agent nor the Collateral Agent shall be required to exercise
any discretion or to take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Required Lenders, and such instructions
shall be binding upon all Lender Parties and all the holders of Notes; provided,
however, that neither the Administrative Agent nor the Collateral Agent shall be
required to take any action that exposes such agent to personal liability or
that is contrary to this Agreement or applicable law. Without limiting any of
the foregoing in this Section 9.01, the Administrative Agent shall not be
required to take any action with respect to any Default, except as expressly
provided in Article VIII. Each of the Administrative Agent and the Collateral
Agent agrees to give each other Lender Party prompt notice of each notice given
to it by the Borrower pursuant to the terms of this Agreement.
Section 9.02 Administrative Agent, Collateral Agent and
Affiliates.
ANZ, CUSA and their respective Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire Equity
Interests in and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with each of the Credit Parties and
their respective Affiliates as though ANZ and CUSA were not the Administrative
Agent or the Collateral Agent hereunder and without notice to or consent of the
other Lender Parties. Each of the other Lender Parties acknowledge that,
pursuant to such activities, ANZ and CUSA or their Affiliates may receive
information regarding any Credit Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Credit Party
or such Affiliate) and acknowledge that neither the Administrative Agent
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nor the Collateral Agent shall be under any obligation to provide such
information to them. With respect to its Commitment, Loans or any Letters of
Credit, ANZ and CUSA shall have the same rights and powers under this Agreement
or any other Financing Document as any other Lender Party and may exercise such
rights and powers as though it were not the Administrative Agent or the
Collateral Agent, and the terms "Lender" and "Lenders" include each of ANZ and
CUSA in its individual capacity.
Section 9.03 Consultation with Experts.
The Administrative Agent and the Collateral Agent may execute
any of their respective duties under this Agreement or any other Financing
Document (including for purposes of holding or enforcing any Lien on the
Collateral (or any portion thereof) granted under the Financing Documents or of
exercising any rights and remedies thereunder) by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel, independent
public accountants and other consultants or experts concerning all matters
pertaining to such duties. Neither the Administrative Agent nor the Collateral
Agent shall be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct provided that it also monitors and supervises such agent or
attorney-in-fact without gross negligence or willful misconduct.
Section 9.04 Liability of Administrative Agent and Collateral
Agent.
Neither the Administrative Agent, the Collateral Agent nor any
of their Affiliates nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
with this Agreement or any other Financing Document (a) with the consent or at
the request of the Required Lenders or (b) in the absence of its own gross
negligence or willful misconduct. Neither the Administrative Agent, the
Collateral Agent nor any of their Affiliates nor any of their respective
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made by any Credit Party in connection with the Financing
Documents, any Loan made or Letter of Credit issued hereunder, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent or the Collateral Agent under or in
connection with this Agreement or any other Financing Document; (ii) the
performance or observance of any of the covenants or agreements of any Credit
Party; (iii) the perfection or priority of any Lien or security interest created
or purported to be created under the Financing Documents; (iv) the satisfaction
of any condition specified in Article III, except receipt of items required to
be delivered to the Administrative Agent or (v) the validity, effectiveness,
genuineness, enforceability or sufficiency of the Financing Documents or any
other instrument or writing furnished in connection therewith. Neither the
Administrative Agent nor the Collateral Agent shall incur any liability by
acting in reliance upon any notice, consent, certificate, statement or other
writing (which may be a bank wire, telex, facsimile transmission or similar
writing) believed by it to be genuine or to be signed by the proper party or
parties.
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Section 9.05 Indemnification.
Each Lender shall, ratably (determined as provided below)
indemnify the Administrative Agent, the Collateral Agent, the Issuer, each of
their respective Affiliates and the respective directors, officers, agents and
employees of any of them (to the extent not reimbursed by the Credit Parties)
against any cost, expense (including counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from such indemnitees'
gross negligence or willful misconduct) that such indemnitees may suffer or
incur in connection with the Financing Documents or any action taken or omitted
by such indemnitees thereunder. For purposes of this Section 9.05, a Lender's
ratable share of any amount shall be determined, at any time, according to the
sum of (a) the aggregate principal amount of Loans outstanding at such time and
owing to such Lender; (b) the aggregate Letter of Credit Liabilities outstanding
at such time and owing to such Lender and (c) such Lender's Unused Revolving
Credit Commitment and Unused Tranche D Term Commitment outstanding at such time.
Section 9.06 Credit Decision.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent, the Collateral Agent, the Issuer
or any other Lender, and based on the financial statements referred to in
Section 4.04 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and the other Financing Documents. Each Lender also acknowledges that
it will, independently and without reliance upon the Administrative Agent, the
Collateral Agent, the Issuer or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking any action under this Agreement and
the other Financing Documents.
Section 9.07 Successor Administrative Agent or Collateral
Agent.
The Administrative Agent or the Collateral Agent may resign at
any time by giving notice thereof to the Lenders and the Borrower, and may be
removed at any time with cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Administrative Agent or a successor Collateral Agent. If no successor
Administrative Agent or successor Collateral Agent shall have been so appointed
by the Required Lenders, and shall have accepted such appointment, within 30
days after the retiring Administrative Agent or Collateral Agent gives notice of
resignation or the Required Lenders' removal of the Administrative Agent or
Collateral Agent, then the retiring Administrative Agent or Collateral Agent (as
the case may be), on behalf of the Lenders and the Issuer, shall appoint a
successor Administrative Agent or a successor Collateral Agent (as applicable),
which shall be a commercial bank organized or licensed under the laws of the
United States and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of its appointment as Administrative Agent or
Collateral Agent (as the case may be) hereunder by a successor Administrative
Agent or a successor Collateral Agent, upon the execution and filing or
recording of such financing statements, or amendment, thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Required
Lenders may request with respect to the Collateral Documents in order to
continue the perfection of the Liens granted or purported to be granted by the
Collateral Documents, such successor Administrative Agent or
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Collateral Agent (as applicable) shall thereupon succeed to and become vested
with all the rights and duties of the retiring Administrative Agent or
Collateral Agent (as the case may be), and the retiring Administrative Agent or
Collateral Agent shall be discharged from its duties and obligations hereunder.
If within 45 days after written notice is given of the retiring Administrative
Agent's or Collateral Agent's (as the case may be) resignation or the Required
Lenders' removal of the Administrative Agent or Collateral Agent under this
Section 9.07 no successor Administrative Agent or Collateral Agent (as the case
may be) shall have been appointed and shall have accepted such appointment, then
on such 45th day (i) the retiring Administrative Agent's or Collateral Agent's
(as the case may be) resignation or removal shall become effective, (ii) the
retiring Administrative Agent or Collateral Agent (as the case may be) shall
thereupon be discharged from its duties and obligations under the Financing
Documents and (iii) the Required Lenders shall thereafter perform all duties of
the retiring Administrative Agent or Collateral Agent (as the case may be) until
such time, if any, as the Required Lenders appoint a successor Administrative
Agent or a successor Collateral Agent as provided above. After any retiring
Administrative Agent's or Collateral Agent's (as the case may be) resignation or
removal hereunder as Administrative Agent or Collateral Agent (as the case may
be) the provisions of this Article shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent or
Collateral Agent (as the case may be).
Section 9.08 Administrative Agent May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to any Credit Party, the Administrative Agent
(irrespective of whether the principal of any Loan or Letter of Credit
Liabilities shall then be due and payable as herein expressed or by declaration
or otherwise and irrespective of whether the Administrative Agent shall have
made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, the Letter of
Credit Liabilities and all other Obligations under the Financing Documents that
are owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lender Parties (including any claim
for the reasonable compensation, expenses, disbursements and advances of the
Lender Parties and their respective agents and counsel and all other amounts due
the Lender Parties under this Agreement) allowed in such judicial proceeding;
(b) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same; and
(c) any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Lender Party to make such payments to
the Administrative Agent and, in the event that the Administrative Agent shall
consent to the making of such payments directly to the other Lender Parties, to
pay to the Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent, the Collateral
Agent and their respective agents and counsel, and any other amounts due the
Administrative Agent under this Agreement.
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(d) Nothing contained herein shall be deemed to authorize
the Administrative Agent to authorize or consent to or accept or adopt on behalf
of any other Lender Party any plan of reorganization, arrangement, adjustment or
composition affecting the Obligations under the Financing Documents or the
rights of any other Lender Party or to authorize the Administrative Agent to
vote in respect of the claim of such Lender Party in any such proceeding.
Section 9.09 Administrative Agents' and Collateral Agent's
Fees.
The Borrower shall pay to the Administrative Agent and the
Collateral Agent for their own account fees in the amounts and at the times
previously agreed upon between the Borrower, the Administrative Agent and the
Collateral Agent.
ARTICLE X
CHANGE IN CIRCUMSTANCES
Section 10.01 Basis for Determining Interest Rate Inadequate
or Unfair.
If on or prior to the first day of any Interest Period for any
Euro-Dollar Borrowing:
(a) the Administrative Agent is advised by any Lender
that deposits in Dollars (in the applicable amounts) are not being
offered to such Lender in the relevant market for such Interest Period,
or
(b) the Required Lenders advise the Administrative Agent
that the Adjusted London Interbank Offered Rate as determined by the
Administrative Agent will not adequately and fairly reflect the cost to
such Lenders of funding their Euro-Dollar Loans for such Interest
Period, the Administrative Agent shall forthwith give notice thereof to
the Borrower and the other Lender Parties, whereupon until the
Administrative Agent notifies the Borrower that the circumstances
giving rise to such suspension no longer exist, (i) the obligations of
the Lenders to make Euro-Dollar Loans, or to continue or convert
outstanding Loans as or into Euro-Dollar Loans, shall be suspended and
(ii) each outstanding Euro-Dollar Loan shall be converted into a Base
Rate Loan on the last day of the then current Interest Period
applicable thereto. Unless the Borrower notifies the Administrative
Agent at least two Domestic Business Days before the date of any
Euro-Dollar Borrowing for which a Notice of Borrowing has previously
been given (or upon receipt of notice from the Administrative Agent, if
later) that it elects not to borrow on such date, such Borrowing shall
instead be made as a Base Rate Borrowing.
Section 10.02 Illegality.
If, on or after the date of this Agreement, the adoption of
any applicable law, rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its Euro-Dollar Lending Office) with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency shall make it
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unlawful or impossible for any Lender (or its Euro-Dollar Lending Office) to
make, maintain or fund its Euro-Dollar Loans to the Borrower and such Lender
shall so notify the Administrative Agent, the Administrative Agent shall
forthwith give notice thereof to the other Lender Parties and the Borrower,
whereupon until such Lender notifies the Borrower and the Administrative Agent
that the circumstances giving rise to such suspension no longer exist, the
obligation of such Lender to make Euro-Dollar Loans to the Borrower, or to
convert outstanding Loans into Euro-Dollar Loans or continue outstanding Loans
as Euro-Dollar Loans, shall be suspended. Before giving any notice to the
Administrative Agent pursuant to this Section 10.02, such Lender shall designate
a different Euro-Dollar Lending Office if such designation will avoid the need
for giving such notice and will not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender. If such notice is given, each
Euro-Dollar Loan of such Lender then outstanding shall be converted to a Base
Rate Loan either (a) on the last day of the then current Interest Period
applicable to such Euro-Dollar Loan if such Lender may lawfully continue to
maintain and fund such Loan as a Euro-Dollar Loan to such day or (b) immediately
if such Lender shall determine that it may not lawfully continue to maintain and
fund such Loan as a Euro-Dollar Loan to such day. Interest and principal on any
such Base Rate Loan shall be payable on the same dates as, and on a pro rata
basis with, the interest and principal payable on the related Euro-Dollar Loans
of the other Lenders.
Section 10.03 Increased Cost and Reduced Return.
(a) If on or after the date hereof, the adoption of any
applicable law, rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Applicable Lending Office) or the Issuer with any request or directive (whether
or not having the force of law) of any such authority, central bank or
comparable agency shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System, but excluding with respect to any
Euro-Dollar Loan any such requirement included in an applicable Euro-Dollar
Reserve Percentage), special deposit, insurance assessment or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender or the Issuer or shall impose on any Lender or the
Issuer or on the London interbank market any other condition affecting its
Euro-Dollar Loans, its Note or Notes, the Letters of Credit or its participation
therein or its obligation to make Euro-Dollar Loans and the result of any of the
foregoing is to increase the cost to such Lender or the Issuer of making or
maintaining any Euro-Dollar Loan or issuing any Letter of Credit or
participating therein, or to reduce the amount of any sum received or receivable
by such Lender or the Issuer under this Agreement or under its Note or Notes
with respect thereto, by an amount deemed by such Lender or the Issuer to be
material, then such Lender shall give the Borrower prompt written notice thereof
and, within 30 days after demand by such Lender or the Issuer accompanied by a
reasonably detailed calculation of such increased cost or reduction (with a copy
to the Administrative Agent), the Borrower shall pay to such Lender or the
Issuer such additional amount or amounts as will compensate such Lender or the
Issuer for such increased cost or reduction; provided that if such Lender is not
ultimately subject to the increased cost or reduction it had anticipated, such
amounts shall be credited to the Borrower.
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(b) If any Lender or the Issuer shall have determined
that, after the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any such law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on capital of such Lender or the Issuer (or its Parent) as a
consequence of such Lender's or the Issuer's obligations hereunder to a level
below that which such Lender, the Issuer (or its Parent) could have achieved but
for such adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by such Lender or
the Issuer to be material, then such Lender shall give the Borrower prompt
written notice thereof and from time to time, within 30 days after demand by
such Lender or the Issuer accompanied by a reasonably detailed calculation of
such increased cost or reduction (with a copy to the Administrative Agent), the
Borrower shall pay to such Lender or the Issuer such additional amount or
amounts as will compensate such Lender or the Issuer (or its Parent) for such
reduction; provided that if such Lender is not ultimately subject to the
increased cost or reduction it had anticipated, such amounts shall be credited
to the Borrower.
(c) Each Lender and the Issuer will promptly notify the
Borrower and the Administrative Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Lender or the Issuer to
compensation pursuant to this Section 10.03(c) and will designate a different
Applicable Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Lender or
the Issuer, be otherwise disadvantageous to such Lender or the Issuer. A
certificate of any Lender or the Issuer claiming compensation under this Section
10.03(c) and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of demonstrable error. In
determining such amount, such Lender or the Issuer may use any reasonable
averaging and attribution methods.
Section 10.04 Taxes.
(a) Any and all payments by the Borrower or any other
Credit Party to or for the account of any Lender Party hereunder or under any
other Financing Document shall be made free and clear of and without deduction
for any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender Party, taxes imposed on its income (including branch
profit taxes), franchise and similar taxes and other taxes imposed on it that,
in any such case, would not have been imposed but for a material connection
between such Lender Party and the jurisdiction imposing such taxes (other than a
material connection arising by reason of this Agreement or any other Financing
Document or the receipt of payments made hereunder or thereunder or the exercise
of any rights by a Lender Party hereunder or thereunder) (all such non-excluded
taxes, duties, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "TAXES"). If the Borrower or any
other Credit Party shall be required by law or the administration thereof to
deduct or withhold any Taxes from or in respect of any sum payable hereunder or
under any other Financing Document to any Lender Party (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions
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applicable to additional sums payable under this Section 10.04) such Lender
Party receives an amount equal to the sum it would have received had no such
deductions or withholdings been made; (ii) the Borrower shall make such
deductions or withholdings; (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law and (iv) the Borrower shall furnish to the Administrative
Agent, at its address referred to in Section 11.01, the original or a certified
copy of a receipt or other satisfactory documentation evidencing payment thereof
as promptly as practicable after the payment thereof, and in any event within
thirty (30) days of any such payment being due.
(b) In addition, the Borrower agrees to pay any present
or future stamp, registration, recordation or documentary taxes and any other
excise or property taxes, or charges or similar levies which arise from any
payment made by it hereunder or under any Note or from the execution or delivery
or registration of, or otherwise with respect to, this Agreement or any other
Financing Document (hereinafter referred to as "OTHER TAXES").
(c) The Borrower agrees to indemnify each Lender Party
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section 10.04) paid by such Lender Party and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
This indemnification shall be made within 30 days from the date such Lender
Party makes demand therefor.
(d) Each Lender that is organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement in the case of a Lender listed on the
signature pages hereof, or on or prior to the date on which it becomes a Lender
in the case of each other Lender, and in the case any Lender changes
jurisdiction of its Applicable Lending Office and from time to time thereafter
as requested in writing by the Borrower (but only so long thereafter as such
Lender or the Issuer remains lawfully able to do so), shall deliver to the
Borrower and the Administrative Agent such certificates, documents or other
evidence, as required by the Internal Revenue Code or Treasury Regulations
issued pursuant thereto, including Internal Revenue Service Form W-8BEN, Form
W-8 IMY or Form W-8ECI and any other certificate or statement of exemption
specified by the Borrower and required by Treasury Regulation Section
1.1441-4(a) or Section 1.1441-6(c) or any subsequent version thereof, properly
completed and duly executed by such Lender establishing that any payment under
this Agreement or any other Financing Documents is (i) not subject to
withholding under the Internal Revenue Code because such payment is effectively
connected with the conduct by such Lender of a trade or business in the United
States, or (ii) fully or partially exempt from United States tax under a
provision of an applicable tax treaty, or (iii) not subject to withholding under
the portfolio interest exception under Section 881(c) of the Internal Revenue
Code (and, if such Lender delivers a Form W-8BEN claiming the benefits of
exemption from United States withholding tax under Section 881(c), a certificate
representing that such Lender Party is not a "bank" for purposes of Section
881(c) of the Internal Revenue Code, is not a 10-percent shareholder (within the
meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the Borrower
and is not a controlled foreign corporation related to the Borrower (within the
meaning of Section 864(d)(4) of the Internal Revenue Code). Unless the Borrower
and the Administrative Agent have received forms or other documents reasonably
satisfactory to them indicating that payments hereunder are not subject to
United States
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withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, the Borrower or the Administrative Agent shall withhold taxes from
such payments at the applicable statutory rate in the case of payments to or for
any Lender organized under the laws of a jurisdiction outside the United States.
If a Lender is unable to deliver one of these forms or if the forms provided by
a Lender at the time such Lender first becomes a party to this Agreement or at
the time a Lender changes its Applicable Lending Office (other than at the
request of the Borrower) or designates a Conduit Lender that indicates a United
States interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from Taxes unless and until such Lender
provides the appropriate forms certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such appropriate forms; provided, however, that (i) that
should a Lender, which is otherwise exempt from or subject to a reduced rate of
withholding tax, becomes subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes and (ii) if at
the effective date of a transfer pursuant to which a Lender becomes a party to
this Agreement, the Lender assignor was entitled to payments under Section
10.04(a) in respect of United States withholding tax with respect to interest
paid at such date, then, to such extent, the term Taxes shall include (in
addition to withholding taxes that may be imposed in the future or other amounts
otherwise includable in Taxes) United States withholding tax, if any, applicable
with respect to the Lender assignee on such date.
(e) If the Borrower is required to pay additional amounts
to or for the account of any Lender pursuant to this Section 10.04, then such
Lender shall use reasonable effort (consistent with internal policy and
regulatory restrictions) to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
(f) Each Lender Party agrees that it will promptly
(within 30 days) after receiving notice thereof from any taxing authority,
notify the Borrower of the assertion of any liability by such taxing authority
with respect to Taxes or Other Taxes; provided that the failure to give such
notice shall not relieve the Borrower of its obligations under this Section
10.04 except to the extent that the Borrower has been prejudiced by such failure
and except that the Borrower shall not be liable for penalties, interest or
expenses accruing after such 30 day period until such time as it receives the
notice contemplated above, after which time it shall be liable for interest,
penalties and expenses accruing after such receipt.
(g) If any Lender Party determines that it has received a
credit or refund from a taxing authority (as a result of any error in the
imposition of Taxes or Other Taxes by such taxing authority) with respect to and
actually resulting from an amount of such Taxes or Other Taxes paid by the
Borrower pursuant to subsection (a) or (c) above, such Lender Party shall
promptly pay to the Borrower the amount so received (without interest thereon,
whether or not received) net of all reasonable out-of-pocket expenses of such
Lender Party. The Borrower acknowledges that (i) nothing herein contained shall
interfere with the rights of any Lender Party to arrange its tax affairs in
whatever manner it deems fit and in particular no Lender Party shall be under
any obligation to claim relief from its corporate profits or similar tax
liability in respect of any such deduction or withholding in priority to any
other reliefs, claims, credit or deductions
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available to it or if any Lender Party considers that claiming such relief would
be significantly disadvantageous to such Lender Party, (ii) the Lender Parties
shall not be obligated to disclose to the Borrower any information regarding
their tax affairs or tax computation, and (iii) the Borrower, upon the request
of any Lender Party, agrees to repay the amount paid over to the Borrower (plus
any penalties, interest or other charges imputed by the relevant Governmental
Authority) to such Lender Party in the event such Lender Party is required to
repay such refund to such Governmental Authority.
(h) Without prejudice to the survival of any other
agreement contained herein, the agreements, covenants and obligations contained
in this Section 10.04 shall survive the payment in full of the principal of and
interest on all Loans, Notes and other advances made hereunder.
Section 10.05 Base Rate Loans Substituted for Affected
Euro-Dollar Loans.
If (a) the obligation of any Lender to make, or to continue or
to convert outstanding Loans as or to, Euro-Dollar Loans to the Borrower has
been suspended pursuant to Section 10.02 or (b) any Lender has demanded
compensation under Section 10.03 or 10.04 with respect to its Euro-Dollar Loans
to the Borrower and the Borrower shall, by at least five Euro-Dollar Business
Days' prior notice to such Lender through the Administrative Agent, have elected
that the provisions of this Section 10.05 shall apply to such Lender, then,
unless and until such Lender notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer exist, all Loans to
the Borrower which would otherwise be made by such Lender as (or continued or
converted to) Euro-Dollar Loans shall be made instead as Base Rate Loans (on
which interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Lenders). If such Lender notifies the Borrower
that the circumstances giving rise to such suspension or demand for compensation
no longer exist, the principal amount of each such Base Rate Loan shall be
converted into a Euro-Dollar Loan on the first day of the next succeeding
Interest Period applicable to the related Euro-Dollar Loans of the other
Lenders.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Notices.
(a) All written notices, requests and other
communications to any party hereunder (including bank wire, telex, facsimile
transmission or similar writing) shall be given to such party: (a) in the case
of the Borrower, the Administrative Agent or the Collateral Agent, at its
address or telex or facsimile transmission number set forth on the signature
pages hereof; (b) in the case of any Lender, at its address or telex or
facsimile transmission number set forth in its Administrative Questionnaire or
(c) in the case of any other party, at such other address or telex or facsimile
transmission number as such party may hereafter specify for the purpose by
notice to the Administrative Agent, the Collateral Agent, the Issuer and the
Borrower. Each such notice, request or other communication shall be effective
(x) if given by telex, when such telex is transmitted to the telex number
specified in or pursuant to this Section 11.01 and the appropriate
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answerback is received; (y) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid or (z) if given by any other means, when delivered at the address
specified in or pursuant to this Section 11.01; provided that notices to the
Administrative Agent, the Collateral Agent or the Issuer under Article II or
Article VIII shall not be effective until received.
(b) Telephonic notice, as provided in Section 6.01(h),
shall be given to the Administrative Agent at the phone numbers set forth on the
signature pages hereof. Such telephonic notice shall be effective (a) if spoken
directly with the Administrative Agent, when spoken or (b) if given by voicemail
message, when such voicemail message is retrieved by the Administrative Agent.
Section 11.02 No Waivers.
No failure or delay by any Lender Party in exercising any
right, power or privilege hereunder or under any other Financing Document shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
Section 11.03 Expenses; Indemnification.
(a) The Borrower agrees to pay on demand (i) all costs
and expenses of each Lender Party in connection with the preparation, execution,
delivery, administration, modification and amendment of this Agreement, each of
the other Financing Documents and each of the other documents to be delivered
hereunder and thereunder, and any waiver or consent hereunder or thereunder,
including, without limitation, the fees and out-of-pocket expenses of counsel,
accountants, appraisers, financial advisors, consultants or industry experts
retained by the Administrative Agent or the Collateral Agent with respect
thereto and, as to the Administrative Agent and the Collateral Agent, with
respect to advising it as to its rights and responsibilities under this
Agreement and the other Financing Documents, and (ii) all costs and expenses of
each Lender Party (including, without limitation, the fees and out-of-pocket
expenses of counsel, accountants, appraisers, financial advisors, consultants or
industry experts retained by the Administrative Agent, the Collateral Agent or
any Lender) in connection with the restructuring or enforcement (whether through
negotiation, legal proceedings or otherwise) of this Agreement and the other
Financing Documents.
(b) The Borrower agrees to indemnify and hold harmless
each Lender Party and its Affiliates, and the directors, officers, employees,
agents, attorneys, consultants and advisors of or to any of the foregoing (each
of the foregoing being an "INDEMNITEE") from and against any and all claims,
damages, liabilities, obligations, losses, penalties, actions, judgments, suits,
costs, disbursements and expenses of any kind or nature (including, without
limitation, reasonable fees and disbursements of counsel to any such Indemnitee)
which may be imposed on, incurred by or asserted against any such Indemnitee in
connection with or arising out of any investigation, litigation or proceeding,
whether or not any such Indemnitee is a party thereto, whether direct, indirect
or consequential, and whether based on any federal, state or local law or other
statutory regulation, securities or commercial law or regulation, or under
common law or in
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equity, or on contract, tort or otherwise, in any manner relating to or arising
out of this Agreement, any other Financing Document, any Obligation arising
under any Financing Document or any act, event or transaction related or
attendant to any thereof, including, without limitation, (i) all Environmental
Liabilities and Costs arising from or connected with the past, present or future
operations of each Credit Party involving any property subject to a Collateral
Document, or damage to real or personal property or natural resources or harm or
injury alleged to have resulted from any Release of Hazardous Substances on,
upon or into such property or any contiguous real estate; (ii) any costs or
liabilities incurred in connection with any Remedial Action concerning any
member of the CEI Group; (iii) any reasonable costs or liabilities incurred in
connection with any environmental Lien; (iv) any reasonable costs or liabilities
incurred in connection with any other matter under applicable state property
transfer laws, whether, with respect to any of the foregoing, such Indemnitee is
a mortgagee pursuant to any leasehold mortgage, a mortgagee in possession, the
successor in interest to a member of the CEI Group or the owner, lessee or
operator of any property of any member of the CEI Group by virtue of
foreclosure, except, with respect to any of the foregoing referred to in clauses
(i), (ii), (iii) and (iv), to the extent attributable solely to acts of the
Collateral Agent or the Lenders or any agent on behalf of the Collateral Agent
or the Lenders; or (v) the use or intended use of the proceeds of the Loans or
Letters of Credit or in connection with any investigation of any potential
matter covered hereby (collectively, the "INDEMNIFIED MATTERS"); provided,
however, that neither CEI nor the Borrower shall have any obligation under this
Section 11.03(b) to an Indemnitee with respect to any Indemnified Matter caused
by or resulting from the gross negligence or willful misconduct of that
Indemnitee, as determined by a court of competent jurisdiction in a final
non-appealable judgment or order.
(c) If any Lender receives any payment of principal of,
or is subject to a conversion of, any Euro-Dollar Loan other than on the last
day of an Interest Period relating to such Loan, as a result of any payment or
conversion made by the Borrower or acceleration of the maturity of the Notes
pursuant to Section 8.01 or for any other reason, the Borrower shall, upon
demand by such Lender (with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such Lender all amounts
required to compensate such Lender for any additional losses, costs or expenses
which it may reasonably incur as a result of such payment or conversion,
including, without limitation, any loss (including, without limitation, loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain such Loan.
(d) The Borrower shall indemnify each Lender Party for,
and hold each Lender Party harmless from and against, any and all claims for
brokerage commissions, fees and other compensation made against such Lender
Party for any broker, finder or consultant with respect to any agreement,
arrangement or understanding made by or on behalf of any member of the CEI Group
in connection with the transactions contemplated by this Agreement.
(e) Each Lender Party agrees that in the event that any
such investigation, litigation or proceeding set forth in subparagraph (b) above
is asserted or threatened in writing or instituted against it or any other
Indemnitee, or any Remedial Action, is requested of it or any of its officers,
directors, agents and employees, for which any Indemnitee may desire indemnity
or defense hereunder, such Indemnitee shall promptly notify the Borrower in
writing; provided, however, that the failure to give such notice shall not
relieve the Borrower of its obligations
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under this Section 11.03 except to the extent the rights of the Borrower are
materially prejudiced thereby.
(f) The Borrower, at the request of any Indemnitee, shall
have the obligation to defend against such investigation, litigation or
proceeding or requested Remedial Action, and the Borrower, in any event, may
participate in the defense thereof with legal counsel of the Borrower's choice.
In the event that such Indemnitee requests the Borrower to defend against such
investigation, litigation or proceeding or requested Remedial Action, the
Borrower shall promptly do so and such Indemnitee shall have the right to have
legal counsel of its choice participate in such defense. No action taken by
legal counsel chosen by such Indemnitee in defending against any such
investigation, litigation or proceeding or requested Remedial Action, shall
vitiate or in any way impair the Borrower's obligation and duty hereunder to
indemnify and hold harmless such Indemnitee.
(g) The Borrower agrees that any indemnification or other
protection provided to any Indemnitee pursuant to this Agreement (including,
without limitation, pursuant to this Section 11.03) or any other Financing
Document shall (i) survive payment of the Obligations under the Financing
Documents and (ii) inure to the benefit of any Person who was at any time an
Indemnitee under this Agreement or any other Financing Document.
(h) The Borrower shall pay (i) all out-of-pocket expenses
of the Administrative Agent and the Collateral Agent, including, without
limitation, reasonable fees and disbursements of outside counsel for the
Administrative Agent and the Collateral Agent in connection with the
preparation, negotiation and administration of this Agreement and the other
Financing Documents, any waiver or consent hereunder or any amendment hereof or
any Default or alleged Default hereunder, and (ii) if a Default or Event of
Default occurs, all out-of-pocket expenses incurred by each Lender Party,
including (without duplication) the fees and disbursements of outside counsel
and the allocated cost of inside counsel, in connection with such Default or
Event of Default and collection, bankruptcy, insolvency, workout, restructuring
and other enforcement proceedings resulting therefrom.
(i) The Borrower agrees to indemnify each Indemnitee and
hold each Indemnitee harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without limitation, the
reasonable fees and disbursements of counsel, which may be incurred by such
Indemnitee in connection with any investigative, administrative or judicial
proceeding (whether or not such Indemnitee shall be designated a party thereto)
brought or threatened relating to or arising out of the Financing Documents or
any actual or proposed use of proceeds of Loans or the issuance or deemed
issuance of any Letter of Credit; provided that no Indemnitee shall have the
right to be indemnified hereunder for such Indemnitee's own gross negligence or
willful misconduct, as determined by a court of competent jurisdiction in a
final non-appealable judgment or order.
(j) The Borrower agrees to indemnify and hold the
Administrative Agent and the Issuer harmless from any claims by virtue of such
party's acting upon such telex or facsimile instructions as such instructions
were understood by the such party, except for claims relating solely from such
party's gross negligence or willful misconduct. Neither the Administrative Agent
nor the Issuer shall be liable for any errors in transmission or the
illegibility of any
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telecopied or telexed documents. If any member of the CEI Group sends the
Administrative Agent or the Issuer a manually signed confirmation of previously
sent telex or facsimile instructions, the Administrative Agent or the Issuer, as
the case may be, shall have no duty to compare it against the previous
instructions received by such party nor shall such party have any responsibility
should the contents or the written confirmation differ from the telex or
facsimile instructions acted upon by such party.
Section 11.04 Set-off; Pro Rata Sharing of Payments.
(a) Upon the occurrence and during the continuance of any
Event of Default each Lender Party is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender Party or
any of its Affiliates to or for the credit or the account of the Borrower
against any and all of the Obligations under the Financing Documents now or
hereafter existing whether or not such Lender Party shall have made any demand
under this Agreement or any Note or any other Financing Document and although
such Obligations may be unmatured. Each Lender Party agrees promptly to notify
the Borrower after any such set-off and application made by such Lender Party;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Lender Parties under
this Section are in addition to the other rights and remedies (including,
without limitation, other rights of set-off) which the Lender Parties may have.
(b) Each Lender Party agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise (including, without
limitation, through the application of any proceeds of the Collateral), receive
payment of a proportion of the aggregate amount due and payable to such Lender
Party hereunder which is greater than the proportion received by any other
Lender Party (A) on account of Obligations due and payable to such Lender Party
hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations due and
payable to such Lender Party at such time to (ii) the aggregate amount of
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time) of payments on account of the Obligations due and payable to all
the Lender Parties hereunder and under the Notes at such time obtained by all
the Lender Parties at such time or (B) on account of Obligations owing (but not
due and payable) to such Lender Party hereunder and under the Notes at such time
in excess of its ratable share (according to the proportion of (i) the amount of
such Obligations owing (but not due and payable) to such Lender Party at such
time to (ii) the aggregate amount of Obligations owing (but not due and payable)
to all Lender Parties hereunder and under the Notes at such time) of payments on
account of the Obligations owing (but not due and payable) to all Lender Parties
hereunder and under the Notes at such time obtained by all of the Lender Parties
at such time, such Lender Party shall forthwith purchase from the other Lender
Parties such participations in the Obligations due and payable or owing to them,
as the case may be, as shall be necessary to cause such purchasing Lender Party
to share the excess payment ratably with each of them; provided that nothing in
this Section 11.04 shall impair the right of any Lender Party to exercise any
right of set-off or counterclaim it may have and to apply the amount subject to
such exercise to the
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payment of indebtedness of the Borrower owing to it. The Borrower agrees, to the
fullest extent it may effectively do so under applicable law, that any holder of
a participation in a Note or in any Letter of Credit Liability, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of set-off
or counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of the Borrower in the
amount of such participation.
Section 11.05 Amendments and Waivers.
(a) Any provision of this Agreement or any other
Financing Document may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Required Lenders
(and, if the rights or duties of the Administrative Agent or the Collateral
Agent are affected thereby, by the Administrative Agent or the Collateral Agent,
as the case may be); provided that:
(i) no such amendment or waiver shall, unless signed by
all the Lenders:
(A) waive any of the conditions specified in
Article III;
(B) change the number of Lenders or the
percentage of (1) the Unused Revolving Credit Commitments,
Unused Tranche C Term Commitments and Unused Tranche D Term
Commitments, (2) the aggregate unpaid principal amount of the
Loans or (3) the aggregate Letter of Credit Liabilities that,
in each case, shall be required for the Lender Parties or any
of them to take any action hereunder;
(C) release (1) all or substantially all of the
Collateral or (2) any Collateral in any transaction or series
of related transactions, except, in the case of this clause
(2), as otherwise provided in the Financing Documents;
(D) amend Section 11.04, 11.06 or this Section
11.05;
(E) increase or extend the Commitments of the
Lenders or subject the Lenders to any additional obligations;
(F) reduce the principal of, or interest on, the
Loans or Reimbursement Obligations or any fees or other
amounts payable hereunder;
(G) postpone the date fixed for any payment of
principal of or interest on any Loan or Reimbursement
Obligation or any fees hereunder;
(H) postpone the final maturity of the Loans;
(I) reduce or limit the Obligations of any
Guarantor under any Credit Party Guaranty (other than in
connection with a sale or disposition permitted hereunder) or
otherwise limit such Guarantor's liability with respect to the
Obligations owing to the Lender Parties;
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(J) change the timing, amounts or order of
application of prepayment of the Loans and the cash
collateralization of the Letters of Credit set forth the
applicable provisions of Article II;
(K) amend the definition of "Permitted Holders";
(L) amend, delete, waive, alter or modify in any
manner Section 8.01(r) or the proviso contained in the last
sentence of Section 8.01;
(ii) no such amendment or waiver shall, unless signed by
the Issuer, affect the rights and obligations of the Issuer under this
Agreement; and
(iii) no such amendment or waiver shall effect one or more
Tranches of Loans, Commitments or Lenders without ratably and equitably
effecting all Tranches of Loans, Commitments or Lenders, unless signed
by (A) the Lenders holding a majority of the outstanding Loans and
Commitments of the effected Tranches and (B) the Required Lenders.
(b) Notwithstanding anything of the foregoing, no
amendment or waiver shall be required to release any Subsidiary Guarantor which
is sold pursuant to the terms and conditions of the Financing Documents so long
as the Borrower shall, on the date of receipt by a member of the CEI Group of
the Net Cash Proceeds from such sale, prepay the Loans and cash collateralize
Letters of Credit pursuant to, and in the order of priority set forth in Section
2.15(a)(i), as specified therein.
Section 11.06 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except neither the Borrower nor CEI may assign or otherwise transfer
any of its rights and obligations under this Agreement without the prior written
consent of all of the Lender Parties.
(b) Any Lender other than a Conduit Lender may, without notice
to or consent of the Borrower and Administrative Agent, at any time grant to one
or more banks or other institutions (each, a "PARTICIPANT") participating
interests in its Unused Revolving Credit Commitment, its Unused Tranche D Term
Commitment or any or all of its Loans or participating interests in its Letter
of Credit Liabilities. In the event of any such grant by a Lender of a
participating interest to a Participant, whether or not upon notice to the
Borrower, the Issuer or the Administrative Agent, such Lender shall remain
responsible for the performance of its obligations hereunder, and the Borrower
and each other Lender Party shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement pursuant to which any Lender may grant such a
participating interest shall provide that such Lender shall retain the sole
right and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement or any other Financing Document;
provided that such participation agreement may provide that such Lender will not
agree to any modification, amendment or waiver of this Agreement described in
Section 11.05(a)(i) without the consent of the Participant. The Borrower agrees
that each Participant
108
shall, to the extent provided in its participation agreement, be entitled to the
benefits of Article X with respect to its participating interest. An assignment
or other transfer which is not permitted by subsection (c) or (d) below shall be
given effect for purposes of this Agreement only to the extent of a
participating interest granted in accordance with this subsection (b).
(c) Any Lender other than a Conduit Lender may at any
time assign to one or more banks or other institutions (each, an "ASSIGNEE") all
or any part of its rights and obligations under this Agreement and the other
Financing Documents, and such Assignee shall assume such rights and obligations,
pursuant to an Assignment and Assumption Agreement in substantially the form of
Exhibit D hereto executed by such Assignee and such transferor Lender, with (and
subject to) the subscribed consent of:
(i) the Administrative Agent (which shall not be
unreasonably withheld or delayed);
(ii) in the case of an assignment of Revolving Credit
Commitments or Tranche D Term Commitments, the Issuer;
(iii) in the case of assignments of Revolving Credit
Commitments, Tranche C Term Commitments or Tranche D Term Commitments
to an Assignee having a senior unsecured debt rating less than "BBB" by
Standard & Poor's Rating Services or "Baa2" by Xxxxx'x Investor
Service, Inc., the Borrower; and
(iv) in the case of assignments of Revolving Credit
Commitments, Tranche C Term Commitments or Tranche D Term Commitments
to an Assignee whose senior unsecured debt is not rated by either
Standard & Poor's Rating Services or Xxxxx'x Investor Service, Inc.,
the Borrower (which consent shall not be unreasonably withheld or
delayed);
provided that under no circumstances (A) shall the consent of the Borrower be
required in connection with any assignment during the continuance of an Event of
Default and (B) may any member of the CEI Group or any of its Affiliates be an
"Assignee" hereunder. Upon execution and delivery of such instrument and payment
by such Assignee to such transferor Lender of an amount equal to the purchase
price agreed between such transferor Lender and such Assignee, such Assignee
shall be a Lender party to this Agreement and shall have all the rights and
obligations of a Lender Party as set forth in such instrument of assumption, and
the transferor Lender shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required. Upon the consummation of any assignment pursuant to this subsection
(c), the transferor Lender, the Administrative Agent and the Borrower shall make
appropriate arrangements so that, if required, new Notes are issued to the
Assignee. In connection with any such assignment, the transferor Lender or
Assignee shall pay to the Administrative Agent an administrative fee for
processing such assignment in the amount of $3,500. If the Assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrower and the Administrative Agent certification as
to exemption from, or reduction in, deduction or withholding of any United
States federal income taxes as required by Section 10.04. Notwithstanding the
foregoing, any Conduit Lender may assign at any time to its designating Lender
hereunder without the consent of the Borrower or the
109
Administrative Agent any or all of the Loans it may have funded hereunder and
pursuant to its designation agreement and without regard to the limitations set
forth in the first sentence of this Section 11.06(c).
(d) Any Lender may at any time assign all or any portion
of its rights under this Agreement and the other Financing Documents to a
Federal Reserve Bank. No such assignment shall release the transferor Lender
from its obligations hereunder. In the case of any Lender that is a fund that
invests in bank loans, such Lender may, without the consent of the Borrower or
the Administrative Agent, assign or pledge all or any portion of its rights
under this Agreement, including the Loans and Notes or any other instrument
evidencing its rights as a Lender under this Agreement, to any holder of,
trustee for, or any other representative of holders of, obligations owed or
securities issued, by such fund, as security for such obligations or securities;
provided that unless and until such holder, trustee or representative actually
becomes a Lender in compliance with the other provisions of this Section 11.06,
(i) no such pledge shall release the pledging Lender from any of its obligations
under the Financing Documents and (ii) such holder, trustee or representative
shall not be entitled to exercise any of the rights of a Lender under the
Financing Documents even though such trustee may have acquired ownership rights
with respect to the pledged interest through foreclosure or otherwise.
(e) Each of the Borrower, the Administrative Agent and
each Lender hereby confirms that it will not institute against a Conduit Lender
or join any other Person in instituting against a Conduit Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
state bankruptcy or similar law, for one year and one day after the payment in
full of the latest maturing commercial paper note issued by such Conduit Lender;
provided, however, that each Lender designating any Conduit Lender hereby agrees
to indemnify, save and hold harmless each other party hereto for any loss, cost,
damage or expense arising out of its inability to institute such a proceeding
against such Conduit Lender during such period of forbearance.
(f) The Administrative Agent shall maintain at its
address referred to in Section 11.01, a copy of each Assignment and Assumption
Agreement delivered to and accepted by it and a register for the recordation of
the names and addresses of the Lenders, the Commitments of the Lenders, the
amount of the Letters of Credit issued by the Issuer, the principal amount of
the Loans and Reimbursement Obligations owing to each Lender Party from time to
time (the "REGISTER"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower and the Lender
Parties may treat each Person whose name is recorded in the Register as a Lender
Party hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender Party at any reasonable
time and from time to time upon reasonable prior notice.
Section 11.07 No Margin Stock.
Each of the Lenders represents to the Administrative Agent and
each of the other Lenders that it in good faith is not relying upon any "margin
stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
110
Section 11.08 Governing Law; Submission to Jurisdiction.
This Agreement and the other Financing Documents (other than
the Mortgages, which shall be governed by the laws of the State of North
Carolina or the Commonwealth of Virginia, as the case may be) shall be governed
by and construed in accordance with the laws of the State of New York. The
Borrower hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York State
court sitting in New York City for purposes of all legal proceedings arising out
of or relating to this Agreement and the other Financing Documents or the
transactions contemplated hereby. The Borrower irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum. The Borrower irrevocably agrees that a final judgment
in any such proceeding shall be conclusive and may be enforced in any other
jurisdiction by suit on the judgment or in any other manner permitted by law.
Section 11.09 Release of Collateral.
Upon the sale, lease, transfer or other disposition of any
item of Collateral of any Credit Party (including, without limitation, as result
of the sale, in accordance with the terms of the Financing Documents, of any
Credit Party that owns such Collateral) in accordance with the terms of the
Financing Documents, the Administrative Agent and the Collateral Agent will, at
the Borrower's expense, promptly execute and deliver to such Credit Party such
documents as such Credit Party may reasonably request to evidence the release of
such item of Collateral from the assignment and security interest granted under
the Financing Documents in accordance with the terms of the Financing Documents.
Section 11.10 Counterparts; Integration; Effectiveness.
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement and the other
Financing Documents constitute the entire agreement and understanding among the
parties hereto and supersede any and all prior agreements and understandings,
oral or written, relating to the subject matter hereof. This Agreement shall
become effective upon receipt by the Administrative Agent of counterparts hereof
signed by each of the parties hereto (or, in the case of any such party as to
which an executed counterpart shall not have been received, receipt by the
Administrative Agent in form satisfactory to it of telegraphic, telex, facsimile
transmission or other written confirmation from such party of execution of a
counterpart hereof by such party).
Section 11.11 Confidentiality.
Each Lender Party agrees to keep confidential all non-public
information provided to it by any Credit Party pursuant to this Agreement or the
other Financing Documents relating to any member of the CEI Group or its
business; provided that, in the case of information received from a Credit Party
after the date hereof, such information is clearly identified in writing at the
time of delivery as confidential; provided further, that nothing herein
111
shall prevent any Lender Party from disclosing any such information (a) to any
other Lender Party or any Affiliate of any Lender Party; (b) to any (i) actual
or prospective transferee or (ii) Derivative Obligations counterparty (or such
contractual counterparty's professional advisor), in each case that agrees to
comply with the provisions of this Section 11.11; (c) to its employees,
directors, agents, attorneys, accountants and other professional advisors or
those of any of its Affiliates; (d) upon the request or demand of any
Governmental Authority; (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
requirement of law; (f) if required to do so in connection with any litigation
or similar proceeding; (g) that has been publicly disclosed; (h) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender Party's investment portfolio in connection with ratings issued with
respect to such Lender Party; (i) to any direct or indirect contractual
counterparty in any sway, hedge, securitization, insurance or similar agreement
(or to any such contractual counterparty's professional advisor), so long as
such contractual counterparty (or such professional advisor) agrees to be bound
by the provisions of this Section 11.11; (j) to its internal and external
auditors; or (k) in connection with the exercise of any remedy hereunder or
under any other Financing Documents. Notwithstanding the foregoing, each party
hereto (and each director, officer, employee, representative, or other agent of
each such party) may disclose to any and all persons, without limitation of any
kind, the U.S. tax treatment and U.S. tax structure of the transaction
contemplated hereby and all materials of any kind (including opinions or other
tax analyses) that are provided to it relating to such U.S. tax treatment and
U.S. tax structure; provided that (i) the foregoing permission to disclose the
tax treatment and tax structure does not permit the disclosure of any
information that is not relevant to understanding the tax treatment or tax
structure, and (ii) that with respect to any document or similar item that in
either case contains information concerning the tax treatment or tax structure
of the transaction as well as other information, this sentence shall only apply
to such portions of the document or similar item that relate to the tax
treatment or tax structure of the Loans, Letters of Credit and transactions
contemplated hereby.
The Borrower does not intend to treat the Loans and related
transactions as being a "reportable transaction" (within the meaning of Treasury
Regulation Section 1.6011-4). In the event the Borrower determines to take any
action inconsistent with such intention, it will promptly notify the
Administrative Agent thereof. The Borrower acknowledges that one or more of the
Lenders may treat its Loans as part of a transaction that is subject to Treasury
Regulation Section 1.6011-4 or Section 301.6112-1, and the Administrative Agent
and such Lender or Lenders, as applicable, may file such IRS forms or maintain
such lists and other records as they may determine is required by such Treasury
Regulations.
Section 11.12 Limitation on Liability.
No claim shall be made by CEI or the Borrower or any of their
Affiliates against any Lender Party or any of their Affiliates, directors,
employees, attorneys or agents for any special, indirect, consequential, special
or punitive damages in respect of any breach or wrongful conduct (whether or not
the claim therefor is based on contract, tort or duty imposed by law), in
connection with, arising out of or in any way related to the transactions
contemplated by this Agreement or the other Financing Documents or any act or
omission or event occurring in connection therewith; and each of CEI and the
Borrower hereby waives, releases and agrees not
112
to xxx upon any such claim for any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor.
Section 11.13 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER
FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 11.14 Severability; Modification to Conform to Law.
It is the intention of the parties that this Agreement be
enforceable to the fullest extent permissible under applicable law, but that the
unenforceability (or modification to conform to such law) of any provision or
provisions hereof shall not render unenforceable, or impair, the remainder
hereof. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, this Agreement shall, as
to such jurisdiction, be deemed amended to modify or delete, as necessary, the
offending provision or provisions and to alter the bounds thereof in order to
render it or them valid and enforceable to the maximum extent permitted by
applicable law, without in any manner affecting the validity or enforceability
of such provision or provisions in any other jurisdiction or the remaining
provisions hereof in any jurisdiction.
Section 11.15 Judgment Currency.
If for the purposes of enforcing the obligations of the
Borrower hereunder it is necessary to convert a sum due from such Person in
Dollars into another currency, the parties hereto agree, to the fullest extent
that they may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Administrative Agent, the
Collateral Agent and other Lender Parties could purchase Dollars with such
currency at or about 11:00 A.M. (New York City time) on the Domestic Business
Day preceding that on which final judgment is given. The obligations in respect
of any sum due to the Administrative Agent, the Collateral Agent and the other
Lender Parties hereunder shall, notwithstanding any adjudication expressed in a
currency other than Dollars, be discharged only to the extent that on the
Domestic Business Day following receipt by the Administrative Agent, the
Collateral Agent and the other Lender Parties of any sum adjudged to be so due
in such other currency the Administrative Agent, the Collateral Agent and the
other Lender Parties may in accordance with normal banking procedures purchase
Dollars with such other currency; if the amount of Dollars so purchased is less
than the sum originally due to the Administrative Agent, the Collateral Agent
and the other Lender Parties in Dollars, the Borrower agrees, to the fullest
extent that it may effectively do so, as a separate obligation and
notwithstanding any such adjudication, to indemnify the Administrative Agent,
the Collateral Agent and the other Lender Parties against such loss, and if the
amount of Dollars so purchased exceeds the sum originally due to the
Administrative Agent, the Collateral Agent and the other Lender Parties, it
shall remit such excess to the Borrower.
113
[SIGNATURE PAGES IMMEDIATELY FOLLOW]
114
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
COGENTRIX DELAWARE HOLDINGS,
INC.,
as Borrower
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
Address: 0000 X. Xxxxxx Xx., Xxxxx 0000
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
COGENTRIX ENERGY, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Group Senior Vice President and CFO
Address: 0000 Xxxxxxxxxx Xxxx., Xxxxxxxxx,
XX 00000-0000
Telephone: 000-000-0000
Telecopy: 000-000-0000
AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED,
As Administrative Agent, Joint
Arranger, Issuer and Lender
By: /s/ Xxxxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: Director
Address: 0000 Xxx xx xxx Xxxxxxxx, XX, XX
Telephone: 000-000-0000
Telecopy: 000-000-0000
CITIGROUP GLOBAL MARKETS INC.,
as Joint Lead Arranger
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Managing Director
Address: 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
CITICORP USA, INC.,
as Collateral Agent and Lender
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Director IRM
Address: 000 Xxxxxxxxx Xxxxxx/00xx Xx.
Telephone: 000-000-0000
Telecopy: 000-000-0000
BANK OF AMERICA, N.A.,
as Lender
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
Address: 000 Xxxx Xx., 00xx Xxxxx
Xxxxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
THE BANK OF NOVA SCOTIA,
as Lender
By: /s/ Xxx Xxxxxxx
----------------------------------
Name: Xxx Xxxxxxx
Title: Managing Director
Address: 00xx Xxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
BNP PARIBAS,
as Lender
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
Address:
Telephone:
Telecopy:
By: /s/ Xxxxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Vice President
Address:
Telephone:
Telecopy:
CIBC INC.,
as Lender
By: /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Executive Director
Address: 000 Xxxxxxxxx Xxx.
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
CREDIT LYONNAIS NEW YORK
BRANCH,
as Lender
By: /s/ Xxxx X. Xxxxx
--------------------------------------
Name: Xxxx X. Xxxxx
Title: First Vice President
Address: 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telephone: 000-000-0000
Telecopy:
CREDIT SUISSE FIRST BOSTON, acting
through its Cayman Islands Branch,
as Lender
By: /s/ Xxxxx Xx
--------------------------------------
Name: Xxxxx Xx
Title: Vice President
Address: 00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Director
Address:
Telephone:
Telecopy:
DZ BANK DEUTSCHE ZENTRAL-
GENOSSENSCHAFTSBANK, NEW
YORK BRANCH,
as Lender
By: /s/ Xxxx Xxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxx
Title: Senior Vice President
Address:
Telephone: (000) 000-0000
Telecopy:
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Address:
Telephone: (000) 000-0000
Telecopy:
DRESDNER BANK AG, NEW YORK BRANCH,
as Lender
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Director
Address: 00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Associate
Address: 00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Fleet's approval as evidenced by the signature below is subject to the approval
of 100% of the lenders being required to waive a default arising from a change
of control of the borrower and,
subject to Fleet's percentage interest in the restructured loan remaining at
its pre-restructure level and no funding or commitment, over and above that
pre-restructure level, by Fleet, shall be required following the restructuring.
FLEET NATIONAL BANK, N.A.,
as Lender
By: /s/ Xxxxx X. X'Xxxxx
-------------------------------------
Name: Xxxxx X. X'Xxxxx
Title: Authorized Officer
Address: 000 Xxxxxxx Xxxxxx,
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
THE ROYAL BANK OF SCOTLAND PLC,
as Lender
By: /s/ Xxx X. Xxxxx
----------------------------------------
Name: Xxx X. Xxxxx
Title: Senior Vice President
Address: 000 Xxxx Xxxxxx,
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
BAYERISCHE HYPO-UND VEREINSBANK AG
- NEW YORK BRANCH,
as Lender
By: /s/ Xxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxx
Title: Director
Address:
Telephone:
Telecopy:
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
Address:
Telephone:
Telecopy:
SOCIETE GENERALE,
as Lender
By: /s/ R. Xxxxx Xxxxxx
------------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
Address: 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
THE BANK OF TOKYO-MITSUBISHI, LTD.,
NEW YORK BRANCH,
as Lender
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
Address: 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
MIZUHO CORPORATE BANK, LTD.,
as Lender
By: /s/ Xxxx Xxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxx
Title: Dept Head & Senior Vice President
Address: 1251 Avenue of the Americas,
00xx Xx. XXXX #0
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
SCHEDULE I
REVOLVING CREDIT COMMITMENTS
Australia and New Zealand
Banking Group Limited 4,000,000.00
----------------------------------------------------
The Bank of Nova Scotia 4,000,000.00
----------------------------------------------------
CIBC, Inc. 4,000,000.00
----------------------------------------------------
Citicorp USA, Inc. 4,000,000.00
----------------------------------------------------
DZ Bank Deutsche Zentral-
Genossenschaftsbank, New
York Branch 4,000,000.00
----------------------------------------------------
Bayerische Hypo-Und
Vereinsbank AG - New York
Branch 2,880,000.00
----------------------------------------------------
Fleet National Bank, N.A. 2,880,000.00
----------------------------------------------------
BNP Paribas 2,400,000.00
----------------------------------------------------
The Bank of Tokyo-Mitsubishi,
Ltd., New York Branch 1,600,000.00
----------------------------------------------------
Dresdner Bank AG, New York
Branch 1,600,000.00
----------------------------------------------------
The Royal Bank of Scotland PLC 1,600,000.00
----------------------------------------------------
Societe Generale 1,600,000.00
----------------------------------------------------
Mizuho Corporation Bank, Ltd. 1,600,000.00
----------------------------------------------------
Bank of America, N.A. 1,280,000.00
----------------------------------------------------
Credit Lyonnais, New York
Branch 1,280,000.00
----------------------------------------------------
Credit Suisse First Boston,
acting through its Cayman
Islands Branch 1,280,000.00
====================================================
TOTAL 40,000,000.00
----------------------------------------------------
SCHEDULE II
TRANCHE A TERM COMMITMENTS
Australia and New Zealand
Banking Group Limited 1,000,000.00
----------------------------------------------------
The Bank of Nova Scotia 1,000,000.00
----------------------------------------------------
CIBC, Inc. 1,000,000.00
----------------------------------------------------
Citicorp USA, Inc. 1,000,000.00
----------------------------------------------------
DZ Bank Deutsche
Zentral-Genossenschaftsbank,
New York Branch 1,000,000.00
----------------------------------------------------
Bayerische Hypo-Und
Vereinsbank AG - New York
Branch 720,000.00
----------------------------------------------------
Fleet National Bank, N.A. 720,000.00
----------------------------------------------------
BNP Paribas 600,000.00
----------------------------------------------------
The Bank of Tokyo-Mitsubishi,
Ltd., New York Branch 400,000.00
----------------------------------------------------
Dresdner Bank AG, New York
Branch 400,000.00
----------------------------------------------------
The Royal Bank of Scotland PLC 400,000.00
----------------------------------------------------
Societe Generale 400,000.00
----------------------------------------------------
Mizuho Corporation Bank, Ltd. 400,000.00
----------------------------------------------------
Bank of America, N.A. 320,000.00
----------------------------------------------------
Credit Lyonnais, New York
Branch 320,000.00
----------------------------------------------------
Credit Suisse First Boston,
acting through its Cayman
Islands Branch 320,000.00
====================================================
TOTAL 10,000,000.00
----------------------------------------------------
SCHEDULE III
TRANCHE B TERM COMMITMENTS
Australia and New Zealand
Banking Group Limited 7,869,465.45
----------------------------------------------------
The Bank of Nova Scotia 7,869,465.45
----------------------------------------------------
CIBC, Inc. 7,869,465.45
----------------------------------------------------
Citicorp USA, Inc. 7,869,465.45
----------------------------------------------------
DZ Bank Deutsche
Zentral-Genossenschaftsbank,
New York Branch 7,869,465.45
----------------------------------------------------
Bayerische Hypo-Und
Vereinsbank AG - New York
Branch 5,666,015.12
----------------------------------------------------
Fleet National Bank, N.A. 5,666,015.12
----------------------------------------------------
BNP Paribas 4,721,679.27
----------------------------------------------------
The Bank of Tokyo-Mitsubishi,
Ltd., New York Branch 3,147,786.18
----------------------------------------------------
Dresdner Bank AG, New York
Branch 3,147,786.18
----------------------------------------------------
The Royal Bank of Scotland PLC 3,147,786.18
----------------------------------------------------
Societe Generale 3,147,786.18
----------------------------------------------------
Mizuho Corporation Bank, Ltd. 3,147,786.18
----------------------------------------------------
Bank of America, N.A. 2,518,228.94
----------------------------------------------------
Credit Lyonnais, New York
Branch 2,518,228.94
----------------------------------------------------
Credit Suisse First Boston,
acting through its Cayman
Islands Branch 2,518,228.94
====================================================
TOTAL 78,694,654.50
----------------------------------------------------
SCHEDULE IV
TRANCHE C TERM COMMITMENTS
Australia and New Zealand
Banking Group Limited 4,810,000.00
----------------------------------------------------
The Bank of Nova Scotia 4,810,000.00
----------------------------------------------------
CIBC, Inc. 4,810,000.00
----------------------------------------------------
Citicorp USA, Inc. 4,810,000.00
----------------------------------------------------
DZ Bank Deutsche
Zentral-Genossenschaftsbank,
New York Branch 4,810,000.00
----------------------------------------------------
Bayerische Hypo-Und
Vereinsbank AG - New York
Branch 3,463,200.00
----------------------------------------------------
Fleet National Bank, N.A. 3,463,200.00
----------------------------------------------------
BNP Paribas 2,886,000.00
----------------------------------------------------
The Bank of Tokyo-Mitsubishi,
Ltd., New York Branch 1,924,000.00
----------------------------------------------------
Dresdner Bank AG, New York
Branch 1,924,000.00
----------------------------------------------------
The Royal Bank of Scotland PLC 1,924,000.00
----------------------------------------------------
Societe Generale 1,924,000.00
----------------------------------------------------
Mizuho Corporation Bank, Ltd. 1,924,000.00
----------------------------------------------------
Bank of America, N.A. 1,539,200.00
----------------------------------------------------
Credit Lyonnais, New York
Branch 1,539,200.00
----------------------------------------------------
Credit Suisse First Boston,
acting through its Cayman
Islands Branch 1,539,200.00
====================================================
TOTAL 48,100,000.00
----------------------------------------------------
SCHEDULE V
TRANCHE D TERM COMMITMENTS
Australia and New Zealand
Banking Group Limited 1,520,284.55
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The Bank of Nova Scotia 1,520,284.55
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CIBC, Inc. 1,520,284.55
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Citicorp USA, Inc. 1,520,284.55
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DZ Bank Deutsche
Zentral-Genossenschaftsbank,
New York Branch 1,520,284.55
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Bayerische Hypo-Und
Vereinsbank AG - New York
Branch 1,094,604.88
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Fleet National Bank, N.A. 1,094,604.88
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BNP Paribas 912,170.73
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The Bank of Tokyo-Mitsubishi,
Ltd., New York Branch 608,113.82
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Dresdner Bank AG, New York
Branch 608,113.82
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The Royal Bank of Scotland PLC 608,113.82
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Societe Generale 608,113.82
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Mizuho Corporation Bank, Ltd. 608,113.82
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Bank of America, N.A. 486,491.06
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Credit Lyonnais, New York
Branch 486,491.06
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Credit Suisse First Boston,
acting through its Cayman
Islands Branch 486,491.06
====================================================
TOTAL 15,202,845.50
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SCHEDULE VI
SUBSIDIARY GUARANTORS
Cogentrix Ouachita Holdings, Inc.
Ouachita Operating Services, LLC
Green Country Operating Services, LLC
Cogentrix of Rathdrum, Inc.
Rathdrum Construction Company, Inc.
Rathdrum Operating Services Company, Inc.
Cogentrix of Birchwood I, Inc.
Cogentrix/Birchwood One Partners
Cogentrix of Birchwood II, Inc.
Cogentrix Holdings Corporation
Cogentrix, Inc.
Cogentrix of North Carolina Holdings, Inc.
Cogentrix of North Carolina, Inc.
Roxboro/Southport I, Inc.
Roxboro/Southport General Partnership
Trust under agreement dated December 30, 1985, between Roxboro/Southport General
Partnership, successor in interest to General Electric Credit Corporation,
and The Bank of New York, successor in interest to United States Trust
Company of New York, as Roxboro Owner Trustee ("Roxboro Owner Trust")
Trust under agreement dated December 30, 1985, between Roxboro/Southport General
Partnership, successor in interest to General Electric Credit Corporation,
and The Bank of New York, successor in interest to United States Trust
Company of New York, as Southport Owner Trustee ("Southport Owner Trust")
Roxboro/Southport II, Inc.
Cogentrix of Virginia, Inc.
Cogentrix Virginia Leasing Corporation
Cogentrix of Pennsylvania, Inc.
Cogentrix-Mexico, Inc.
CI Properties, Inc.
Cogentrix Southaven Holdings, Inc.
Cogentrix Southaven Holdings II, Inc.
Southaven Operating Services, LLC
Cogentrix Energy Power Marketing, Inc.
Cogentrix Fuels Management, Inc.
Cogentrix International Holdings, Inc.
Cogentrix of Brazil, Inc.
Cogentrix/Scrubgrass, Inc.
Cedar Power Corporation
Hickory Power Corporation
Birch Power Corporation
Panther Creek Leasing, Inc.
Cogentrix of Latin America, Inc.
Cogentrix Hartburg Power I, Inc.
Hartburg Power, LP
Cogentrix Hartburg Power II, Inc.
Cogentrix Xxxxx County Holdings, Inc.
Xxxxx County Power LLC
Cogentrix of Xxxxxxxx County, Inc.
Cogentrix Xxxxxxxx County, LLC
Cogentrix Xxxxxxxx Holdings, Inc.
Xxxxxxxx Power, LLC
SCHEDULE VII
SUBSIDIARY PLEDGORS
Cogentrix Delaware Holdings, Inc.
Cogentrix of Rathdrum, Inc.
Cogentrix of Birchwood I, Inc.
Cogentrix/Birchwood One Partners
Cogentrix of Birchwood II, Inc.
Cogentrix Holdings Corporation
Cogentrix, Inc.
Cogentrix of North Carolina Holdings, Inc.
Roxboro/Southport I, Inc.
Roxboro/Southport II, Inc.
Roxboro/Southport General Partnership
Cogentrix-Mexico, Inc.
Cogentrix Southaven Holdings II, Inc.
Cogentrix International Holdings, Inc.
Cogentrix of Brazil, Inc.
Cogentrix Hartburg Power I, Inc.
Cogentrix Hartburg Power II, Inc.
Cogentrix Xxxxx County Holdings, Inc.
Cogentrix of Xxxxxxxx County, Inc.
Cogentrix Xxxxxxxx Holdings, Inc.
SCHEDULE VIII
SUBSIDIARY GRANTORS
Cogentrix Delaware Holdings, Inc.
Ouachita Operating Services, LLC
Green Country Operating Services, LLC
Cogentrix of Rathdrum, Inc.
Rathdrum Construction Company, Inc.
Rathdrum Operating Services Company, Inc.
Cogentrix of Birchwood I, Inc.
Cogentrix/Birchwood One Partners
Cogentrix of Birchwood II, Inc.
Cogentrix Holdings Corporation
Cogentrix, Inc.
Cogentrix of North Carolina Holdings, Inc.
Cogentrix of North Carolina, Inc.
Roxboro/Southport I, Inc.
Roxboro/Southport General Partnership
Roxboro Owner Trust
Southport Owner Trust
Roxboro/Southport II, Inc.
Cogentrix of Virginia, Inc.
Cogentrix Virginia Leasing Corporation
Cogentrix of Pennsylvania, Inc.
Cogentrix-Mexico, Inc.
CI Properties, Inc.
Cogentrix Southaven Holdings, Inc.
Cogentrix Southaven Holdings II, Inc.
Southaven Operating Services, LLC
Cogentrix Energy Power Marketing, Inc.
Cogentrix Fuels Management, Inc.
Cogentrix International Holdings, Inc.
Cogentrix of Brazil, Inc.
Cogentrix of Latin America, Inc.
Cogentrix Hartburg Power I, Inc.
Hartburg Power, LP
Cogentrix Hartburg Power II, Inc.
Cogentrix Xxxxx County Holdings, Inc.
Xxxxx County Power LLC
Cogentrix of Xxxxxxxx County, Inc.
Cogentrix Xxxxxxxx County, LLC
Cogentrix Xxxxxxxx Holdings, Inc.
Xxxxxxxx Power, LLC
SCHEDULE IX
PLEDGED SUBSIDIARIES
Cogentrix Delaware Holdings, Inc.
Cogentrix Ouachita Holdings, Inc.
Cogentrix of Oklahoma, Inc.
Cogentrix of Rathdrum, Inc.
Rathdrum Construction Company, Inc.
Rathdrum Operating Services Company, Inc.
Cogentrix of Birchwood I, Inc.
Cogentrix/Birchwood Two, L.P.
Cogentrix/Birchwood One Partners
Cogentrix of Birchwood II, Inc.
Cogentrix Holdings Corporation
Cogentrix, Inc.
Cogentrix of North Carolina Holdings, Inc.
Cogentrix of North Carolina, Inc.
Roxboro/Southport I, Inc.
Roxboro/Southport General Partnership
Roxboro Owner Trust
Southport Owner Trust
Roxboro/Southport II, Inc.
Cogentrix of Virginia, Inc.
Cogentrix Virginia Leasing Corporation
Cogentrix of Pennsylvania, Inc.
Cogentrix-Mexico, Inc.
Cogeneracion Mexicana, S.A. de C.V.1
CI Properties, Inc.
Cogentrix Southaven Holdings, Inc.
Cogentrix Southaven Holdings II, Inc.
Southaven Operating Services, LLC
Cogentrix Parts Company, Inc.
Cogentrix Energy Power Marketing, Inc.
Cogentrix Fuels Management, Inc.
Cogentrix International Holdings, Inc.
Cogentrix International, Ltd.(1)
Cogentrix do Brazil, Limitada(1)
Cogentrix of Brazil, Inc.
Cogentrix Mauritius Company(1)
Cogentrix International Holdings, BV(1)
Cogentrix of Latin America, Inc.
Cogentrix Hartburg Power I, Inc.
Hartburg Power, LP
Cogentrix Hartburg Power II, Inc.
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(1) Pledge only extends to 65% of the Capital Stock of this entity.
Cogentrix Xxxxx County Holdings, Inc.
Xxxxx County Power LLC
Cogentrix of Xxxxxxxx County, Inc.
Cogentrix Xxxxxxxx County, LLC
Cogentrix Xxxxxxxx Holdings, Inc.
Xxxxxxxx Power, LLC
