EXHIBIT 10.15
EXECUTION COPY
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of July 16, 2003,
among
CALPINE CORPORATION,
as the Borrower,
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
as the Lenders,
THE BANK OF NOVA SCOTIA
as Administrative Agent, Funding Agent, Lead Arranger and Bookrunner,
BAYERISCHE LANDESBANK, CAYMAN ISLANDS BRANCH
as Lead Arranger, Co-Bookrunner and Documentation Agent
and
ING CAPITAL LLC and TORONTO DOMINION (TEXAS) INC.
as Lead Arrangers, Co-Bookrunners and Co-Syndication Agents
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS....................................................................... 1
SECTION 1.1. Defined Terms............................................................................ 1
SECTION 1.2. Use of Defined Terms..................................................................... 31
SECTION 1.3. Cross-References......................................................................... 31
SECTION 1.4. Accounting and Financial Determinations.................................................. 31
ARTICLE II COMMITMENTS, BORROWING PROCEDURES AND NOTES........................................................... 31
SECTION 2.1. Commitments/Loans........................................................................ 31
SECTION 2.2. Reduction of Revolving Commitment Amount and Term B Loans................................ 33
SECTION 2.3. Borrowing Procedure...................................................................... 34
SECTION 2.4. Continuation and Conversion Elections.................................................... 34
SECTION 2.5. Funding ................................................................................. 34
SECTION 2.6. Notes; Register.......................................................................... 35
ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES........................................................... 35
SECTION 3.1. Repayments and Prepayments............................................................... 35
SECTION 3.2. Interest Provisions...................................................................... 40
SECTION 3.3. Fees .................................................................................... 41
ARTICLE IV LETTERS OF CREDIT..................................................................................... 42
SECTION 4.1. Issuance Requests........................................................................ 42
SECTION 4.2. Issuances and Extensions................................................................. 43
SECTION 4.3. Expenses ................................................................................ 44
SECTION 4.4. Other Revolving Lenders' Participation................................................... 44
SECTION 4.5. Disbursements............................................................................ 45
SECTION 4.6. Reimbursement............................................................................ 45
SECTION 4.7. Cash Collateral.......................................................................... 46
SECTION 4.8. Nature of Reimbursement Obligations...................................................... 46
SECTION 4.9. Increased Costs; Indemnity............................................................... 48
SECTION 4.10. Existing Letters of Credit.............................................................. 49
SECTION 4.11. Equivalent Amount Determinations........................................................ 49
SECTION 4.12. Currency Fluctuations, etc.............................................................. 49
ARTICLE V CERTAIN LIBO RATE AND OTHER PROVISIONS................................................................. 50
SECTION 5.1. LIBO Rate Lending Unlawful............................................................... 50
SECTION 5.2. Deposits Unavailable..................................................................... 50
SECTION 5.3. Increased LIBO Rate Loan Costs, etc...................................................... 50
SECTION 5.4. Funding Losses........................................................................... 51
SECTION 5.5. Increased Capital Costs.................................................................. 51
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SECTION 5.6. Taxes ................................................................................... 52
SECTION 5.7. Payments, Computations, etc.............................................................. 53
SECTION 5.8. Sharing of Payments...................................................................... 54
SECTION 5.9. Use of Proceeds.......................................................................... 54
ARTICLE VI CONDITIONS PRECEDENT.................................................................................. 55
SECTION 6.1. Effectiveness; Initial Credit Extension.................................................. 55
SECTION 6.2. All Credit Extensions.................................................................... 57
ARTICLE VII REPRESENTATIONS AND WARRANTIES....................................................................... 59
SECTION 7.1. Organization, etc........................................................................ 59
SECTION 7.2. Due Authorization, Non-Contravention, etc................................................ 59
SECTION 7.3. Government Approval, Regulation, etc..................................................... 59
SECTION 7.4. Validity, etc............................................................................ 60
SECTION 7.5. Financial Information.................................................................... 60
SECTION 7.6. No Material Adverse Effect............................................................... 60
SECTION 7.7. Litigation, Labor Controversies, etc..................................................... 60
SECTION 7.8. Subsidiaries............................................................................. 60
SECTION 7.9. Ownership of Properties.................................................................. 61
SECTION 7.10. Taxes .................................................................................. 61
SECTION 7.11. Pension and Welfare Plans............................................................... 61
SECTION 7.12. Environmental Warranties................................................................ 61
SECTION 7.13. Regulations U and X..................................................................... 63
SECTION 7.14. Accuracy of Information................................................................. 63
SECTION 7.15. Protection under Security Documents..................................................... 63
SECTION 7.16. Indebtedness of Certain Subsidiaries.................................................... 63
SECTION 7.17. Designation of Subsidiaries............................................................. 63
ARTICLE VIII COVENANTS........................................................................................... 63
SECTION 8.1. Affirmative Covenants.................................................................... 63
SECTION 8.2. Negative Covenants....................................................................... 69
SECTION 8.3. No Restriction on Payments to the Borrower............................................... 82
ARTICLE IX EVENTS OF DEFAULT..................................................................................... 82
SECTION 9.1. Listing of Events of Default............................................................. 82
SECTION 9.2. Action if Bankruptcy..................................................................... 85
SECTION 9.3. Action if Other Event of Default......................................................... 85
ARTICLE X THE AGENT.............................................................................................. 85
SECTION 10.1. Actions................................................................................. 85
SECTION 10.2. Funding Reliance, etc................................................................... 86
SECTION 10.3. Exculpation............................................................................. 86
SECTION 10.4. Successor............................................................................... 86
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SECTION 10.5. Loans or Letters of Credit Issued by Agent or any Issuer................................ 87
SECTION 10.6. Credit Decisions........................................................................ 87
SECTION 10.7. Copies, etc............................................................................. 87
SECTION 10.8. Other Agents; Lead Arrangers............................................................ 87
SECTION 10.9. Collateral Matters...................................................................... 88
ARTICLE XI MISCELLANEOUS PROVISIONS.............................................................................. 89
SECTION 11.1. Waivers, Amendments, etc................................................................ 89
SECTION 11.2. Notices................................................................................. 90
SECTION 11.3. Payment of Costs and Expenses........................................................... 90
SECTION 11.4. Indemnification......................................................................... 91
SECTION 11.5. Survival ............................................................................... 93
SECTION 11.6. Severability............................................................................ 93
SECTION 11.7. Headings ............................................................................... 93
SECTION 11.8. Execution in Counterparts, Effectiveness, etc........................................... 93
SECTION 11.9. Governing Law; Entire Agreement......................................................... 93
SECTION 11.10. Successors and Assigns................................................................. 93
SECTION 11.11. Sale and Transfer of Loans and Notes; Participations in Loans and Notes................ 94
SECTION 11.12. Other Transactions..................................................................... 97
SECTION 11.13. Forum Selection and Consent to Jurisdiction............................................ 97
SECTION 11.14. Waiver of Jury Trial................................................................... 98
SECTION 11.15. Confidentiality........................................................................ 98
SECTION 11.16. Judgment Currency...................................................................... 99
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SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages
SCHEDULE 1.1 - Organizational Chart
SCHEDULE 4.10 - Existing Letters of Credit
EXHIBIT A-1 - Form of Revolving Note
EXHIBIT A-2 - Form of Term Note
EXHIBIT B - Form of Borrowing Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Issuance Request
EXHIBIT E - Form of Lender Assignment Agreement
EXHIBIT F-1 - Form of Opinion of general counsel of the Borrower
EXHIBIT F-2 - Form of Opinion of special counsel to the Borrower
EXHIBIT G - Form of Prepayment Option Notice
EXHIBIT H - Form of Canadian Stock Pledge Agreement
EXHIBIT I - Form of Collateral Trust Agreement
EXHIBIT J - Form of Gilroy Assignment Agreement
EXHIBIT K - Form of LLC Pledge Agreement
EXHIBIT L - Form of Note Pledge Agreement
EXHIBIT M - Form of Guarantee and Collateral Agreement
EXHIBIT N - Form of Stock Pledge Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July 16, 2003,
among CALPINE CORPORATION, a Delaware corporation (together with its successors,
the "Borrower"), the various financial institutions as are or may become parties
hereto (collectively, the "Lenders"), various lead Arrangers (as defined below),
and THE BANK OF NOVA SCOTIA ("Scotia Capital"), as administrative agent and
funding agent (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrower is a party to the Credit Agreement, dated as of
March 8, 2002, as amended (the "2002 Credit Agreement"), with the lenders party
thereto, the agents named therein, and Scotia Capital, as joint administrative
agent and funding agent;
WHEREAS, the Borrower has requested that the Lenders and the Agent
amend and restate the 2002 Credit Agreement in its entirety to, among other
things, (i) extend the maturity of the Revolving Loan Commitments until July 15,
2005, (ii) decrease the aggregate Revolving Loan Commitments to an amount equal
to $300,000,000 and (iii) provide for a new term B loan facility in an aggregate
principal amount equal to $200,000,000;
WHEREAS, the Lenders and the Agent are willing to amend and restate the
2002 Credit Agreement and to make credit facilities available to the Borrower
upon and subject to the terms and conditions hereinafter set forth; and
WHEREAS, (i) the 2002 Credit Agreement is being amended and restated
pursuant to this Agreement, (ii) certain indebtedness under the 2002 Credit
Agreement, as amended and restated in connection with this Agreement, will be
continued under this Agreement and (iii) all obligations of the Borrower under
the Loan Documents and all liens and security interests created under the Loan
Documents will be continued, amended and restated as provided herein and therein
and will not be cancelled or discharged;
NOW, THEREFORE, the parties hereto agree that the 2002 Credit Agreement
shall be amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Acquisition" means an acquisition by the Borrower or any of its
Subsidiaries of power projects, reserves of geothermal steam and fluids, natural
gas reserves, and other assets within the scope of its existing business.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power
(a) to vote 10% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or
managing general partners; or
(b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agent" is defined in the preamble and includes each other Person as
shall have subsequently been appointed as the successor Agent pursuant to
Section 10.4.
"Aggregate Percentage" means, relative to any Lender, the percentage
set forth opposite its name on Schedule II under the caption "Aggregate
Percentage" or as set forth in its Lender Assignment Agreement, as such
percentage may be adjusted from time to time pursuant to Lender Assignment
Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered
pursuant to Section 11.11.
"Agreement" means, on any date, this Amended and Restated Credit
Agreement as originally in effect on the Closing Date and as thereafter from
time to time amended, supplemented, amended and restated, or otherwise modified
and in effect on such date.
"Alternate Base Rate" means, on any date and with respect to all Base
Rate Loans, a fluctuating rate of interest per annum equal to the higher of
(a) the rate of interest most recently established by Scotia
Capital at its Domestic Office as its base rate; and
(b) the Federal Funds Rate most recently determined by Scotia
Capital plus 1/2of 1%.
The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by the Agent in connection with extensions of credit.
Changes in the rate of interest on that portion of any Loans maintained as Base
Rate Loans or any L/C Advances will take effect simultaneously with each change
in the Alternate Base Rate. The Agent will give notice promptly to the Borrower
and the Lenders of changes in the Alternate Base Rate.
"Applicable Margin" means (i) for any Base Rate Loan, 3.00% per annum
and (ii) for any LIBO Rate Loan or L/C Advance, 4.00% per annum.
"Approved Fund" means (i) a CLO and (ii) with respect to any Lender
that is a fund which invests in bank loans and similar extensions of credit, any
other fund that invests in bank loans and similar extensions of credit and is
managed by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.
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"Arranger" or "Arrangers" means, individually or collectively as the
case may be, each of Scotia Capital, BayernLB, Toronto Dominion (Texas) Inc. and
ING Capital LLC.
"Asset Sale" means any sale, transfer, lease or other disposition of
property or assets, other than (i) a transfer of assets between or among the
Borrower and its Subsidiaries, (ii) the sale or disposition of cash or Cash
Equivalent Investments, (iii) the sale or lease of products, services or
accounts receivable in the ordinary course of business and (iv) the sale or
disposition of Excluded Assets.
"Assignee Lender" is defined in Section 11.11.1.
"Attributable Debt" means, with respect to a Sale/Leaseback
Transaction, the present value as of the date of determination (discounted at
the weighted average interest rate borne by the Senior Notes, compounded
annually) of the total obligations of the lessee for rental payments for the
remaining term of the lease included in such Sale/Leaseback Transaction
(including any period for which such lease has been extended).
"Authorized Officer" means, relative to any Obligor, the president, any
executive vice president, any senior vice president, the vice president -
finance, the chief financial officer and the treasurer, in each case for whom a
signature and incumbency certificate has been delivered to the Agent.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"BayernLB" means Bayerische Landesbank, Cayman Islands Branch.
"Borrower" is defined in the preamble.
"Borrower EBITDA" means, for any period, the consolidated EBITDA of the
Borrower and its Subsidiaries, minus that portion of Consolidated Interest
Expense payable by the consolidating Subsidiaries, minus the principal payments
of the consolidating Subsidiaries, minus the consolidated non-discretionary
Capital Expenditures (i.e., Capital Expenditures which are expressly required to
be made under any agreement, contract, instrument, permit, license, law,
regulation, judgment or other arrangement (other than those arrangements and
contracts that relate to the performance of the work for which the Capital
Expenditure is being made) binding on the Borrower or any Subsidiary) of the
Borrower and its Subsidiaries, plus, without duplication, cash and Cash
Equivalent Investments of the Borrower's Wholly Owned Subsidiaries and Cogen
America that are legally and contractually available to each such Subsidiary for
the payment of dividends, but only to the extent the source of such cash and
Cash Equivalent Investments is from such Subsidiary's EBITDA or from repayments
to such Subsidiary of loans made by such Subsidiary.
"Borrower Interest Expense" means, for any period, as applied to the
Borrower, the sum of (a) the total interest expense of the Borrower for such
period as determined in accordance with GAAP, including, without limitation, all
interest paid by the Borrower under its subordinated debt securities issued to a
Trust, plus (b) all but the principal component of rentals in respect of
Capitalized Lease Liabilities paid, accrued, or scheduled to be paid or accrued
by the Borrower,
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plus (c) one-third of all operating lease obligations paid, accrued and/or
scheduled to be paid by the Borrower, plus (d) capitalized interest, plus (e)
dividends paid in respect of preferred stock of the Borrower held by Persons
other than the Borrower, plus (f) cash contributions to any employee stock
ownership plan to the extent such contributions are used by such employee stock
ownership plan to pay interest or fees to any person (other than Borrower) in
connection with loans incurred by such employee stock ownership plan to purchase
capital stock of the Borrower.
"Borrowing" means the Loans of the same type and, in the case of LIBO
Rate Loans, having the same Interest Period made by all Lenders on the same
Business Day and pursuant to the same Borrowing Request in accordance with
Section 2.1.
"Borrowing Request" means a loan request and certificate duly executed
by an Authorized Officer of the Borrower, substantially in the form of Exhibit
B.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in San
Francisco or New York; and
(b) relative to the making, continuing, prepaying or repaying
of any LIBO Rate Loans, any day on which dealings in Dollars are
carried on in the London interbank market.
"Calpine Gilroy" means Calpine Gilroy Cogen, L.P., a Delaware limited
partnership and an indirect, Wholly Owned Subsidiary of the Borrower.
"Calpine Holdings" means Calpine CCFC Holdings, Inc., an indirect,
Wholly Owned Subsidiary of the Borrower.
"Canadian Dollars" and the sign "Cdn$" shall each mean freely
transferable lawful money of Canada.
"Canadian Gas Reserves" means the oil and gas reserves of the
Borrower's Canadian Subsidiaries.
"Canadian Stock Pledge Agreement" means the First Amendment Pledge
Agreement, dated as of July 16, 2003, by QM, JOQ and QCH in favor of the
Collateral Trustee (for the benefit of, among others, the Lenders), in the form
attached hereto as Exhibit H, as amended, supplemented, restated or otherwise
modified from time to time.
"Capex Requirement" means, with respect to the utilization for Capital
Expenditures of the Net Available Cash from any Asset Sale, Monetization,
Insurance Event or incurrence of secured Indebtedness covered by any of those
clauses of Section 3.1.1(c) which include a statement referring to the Capex
Requirement, the requirement that, if such Net Available Cash is derived from
assets owned by the Borrower, any Pledged Entity or any Subsidiary of a Pledged
Entity, such Net Available Cash may only be used to make Capital Expenditures by
the Borrower, any Pledged Entity or any Subsidiary of a Pledged Entity.
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"Capital Expenditures" means, for any period, the aggregate amount of
all (i) construction expenditures, (ii) major maintenance and gas drilling
expenditures, (iii) equipment expenditures and (iv) general development
expenditures of the Borrower and its Subsidiaries made during such period, in
each case determined in accordance with GAAP.
"Capitalized Lease Liabilities" means all rental obligations of the
Borrower or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty.
"Cash Equivalent Investment" means, at any time:
(a) any evidence of Indebtedness, maturing not more than one
year after such time, issued or guaranteed by the United States
government or an agency or instrumentality thereof;
(b) commercial paper, maturing not more than nine months from
the date of issue, which is issued by
(i) a corporation (excluding Affiliates of the
Borrower) organized under the laws of any state of the United
States or of the District of Columbia and rated at least A-l
by S&P or P-l by Xxxxx'x, or
(ii) any Lender (or its holding company or
Affiliates);
(c) any certificate of deposit or bankers acceptance, maturing
not more than one year after such time, which is issued by either
(i) a commercial banking institution that is a
member of the Federal Reserve System and has a combined
capital and surplus and undivided profits of not less than
$500,000,000, or
(ii) any Lender;
(d) money market mutual funds registered with the Securities
and Exchange Commission;
(e) corporate evidences of indebtedness rated A or better by
S&P or A2 or better by Xxxxx'x;
(f) any repurchase agreement entered into with any Lender (or
other commercial banking institution of the stature referred to in
clause (c)(i)) which
(i) is secured by a fully perfected security
interest in any obligation of the type described in any of
clauses (a) through (e); and
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(ii) has a market value at the time such
repurchase agreement is entered into of not less than 100% of
the repurchase obligation of such Lender (or other commercial
banking institution) thereunder; or
(g) any other investment approved by the Required Lenders.
"CCEC" means Calpine Canada Energy Ltd., a Nova Scotia limited
liability company and an indirect, Wholly Owned Subsidiary of the Borrower.
"CCEF" means Calpine Canada Energy Finance ULC, a Nova Scotia unlimited
liability company and a direct, Wholly Owned Subsidiary of QCH.
"CCEF Indenture" means that certain Indenture dated as of April 25,
2001, between CCEF and Wilmington Trust Company, as Trustee, as amended by the
Amended and Restated Indenture, dated as of October 16, 2001, between CCEF and
such Trustee.
"CCEF Notes" means the $2,030,000,000 of 8 1/2% Senior Notes due 2008
and the Cdn$200,000,000 of 8 3/4% Senior Notes due 2007, in each case issued by
CCEF pursuant to the CCEF Indenture.
"CCEFII" means Calpine Canada Energy Finance II ULC, a Nova Scotia
unlimited liability company and a direct, Wholly Owned Subsidiary of CCRC.
"CCEFII Indenture" means that certain Indenture dated as of October 18,
2001, as supplemented by the First Supplemental Indenture, dated as of October
18, 2002, between CCEFII and Wilmington Trust Company, as Trustee.
"CCEFII Notes" means the (pound)200,000,000 of 8 7/8% Senior Notes due
2011 and the (euro)175,000,000 of 8 3/8% Senior Notes due 2008, in each case
issued by CCEFII pursuant to the CCEFII Indenture.
"CCFCI" means Calpine Construction Finance Company, L.P., a Delaware
limited partnership and an indirect, Wholly Owned Subsidiary of the Borrower.
"CCFCI Credit Agreement" means the Amended and Restated Credit
Agreement, dated as of February 15, 2001, among CCFCI, the lenders party
thereto, Credit Suisse First Boston, as Lead Arranger, Syndication Agent and
Bookrunner, The Bank of Nova Scotia, as Lead Arranger LC Bank and Administrative
Agent, TD Securities (USA) Inc., as Co-Arranger and Co-Documentation Agent, and
CIBC World Markets Corp., as Co-Arranger and Co-Documentation Agent, as amended,
supplemented, restated or otherwise modified from time to time.
"CCFCII" means Calpine Construction Finance Company II, LLC, a Delaware
limited liability company and an indirect, Wholly Owned Subsidiary of the
Borrower.
"CCFCII Credit Agreement" means the Credit Agreement, dated as of
October 16, 2000, among CCFCII, the lenders party thereto, Credit Suisse First
Boston, as Lead Arranger and Administrative Agent, The Bank of Nova Scotia, as
Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of America Securities
LLC, as Arranger and Co-Syndication Agent, ING
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(U.S.) Capital LLC, as Arranger and Co-Syndication Agent, Bayerische Landesbank
Girozentrale, as Arranger, Co-Documentation Agent, and LC Bank, CIBC World
Markets Corp., as Arranger and Co-Documentation Agent, Dresdner Kleinwort Xxxxxx
North America Services LLC, as Arranger and Co-Documentation Agent, TD
Securities (USA) Inc., as Arranger and Co-Documentation Agent, as amended,
supplemented, restated or otherwise modified from time to time.
"CCI" means Calpine Calgary, Inc., a Delaware corporation and an
indirect, Wholly Owned Subsidiary of the Borrower.
"CCNGC" means Calpine Canada Natural Gas Company, a Nova Scotia
corporation and an indirect, Wholly Owned Subsidiary of the Borrower.
"CCNGP" means Calpine Canada Natural Gas Partnership, an Alberta
general partnership and an indirect, Wholly Owned Subsidiary of the Borrower.
"CCRC" means Calpine Canada Resources Company, an Alberta corporation
and an indirect, Wholly Owned Subsidiary of the Borrower.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"CES" means Calpine Energy Services, L.P., a Delaware limited
partnership and an indirect, Wholly Owned Subsidiary of the Borrower.
"CES Assets" means all assets owned by CES or any of its Subsidiaries
on the Closing Date and any additional assets to the extent CES or any of its
Subsidiaries obtains an interest in such assets after the Closing Date.
"CES Credit Facility" means any credit facility in favor of CES, the
proceeds of which are used solely for monthly purchases by CES of natural gas on
a commodity basis.
"Change in Control" means (i) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 30% or more of the outstanding shares of voting stock
of the Borrower and/or (ii) any "Change of Control" under (and as defined in)
the High Yield Indentures.
"CLO" means, with respect to any Lender, any entity (whether a
corporation, partnership, trust or otherwise) that is engaged in making,
purchasing, holding or otherwise investing in bank loans and similar extensions
of credit in the ordinary course of its business and is administered or managed
by such Lender or an Affiliate of such Lender.
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"Closing Date" means the date specified in a written notice from the
Agent on which this Agreement becomes effective pursuant to Section 11.8 and
which is intended to be July 16, 2003.
"CNGH" means Calpine Natural Gas Holdings, LLC, a Delaware limited
liability company, and a direct, Wholly-Owned Subsidiary of the Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Cogen America" means Calpine Cogeneration Corporation (previously
named Cogeneration Corporation of America), a Delaware corporation of which the
Borrower indirectly owns not less than 50% of the outstanding voting stock.
"Collateral" means any property of or other items belonging to the
Borrower or certain of its Subsidiaries subject or purported to be subject from
time to time to a Lien under any Loan Document to secure any or all of the
Obligations.
"Collateral Trust Agreement" means the Collateral Trust Agreement,
dated as of July 16, 2003, among the Borrower, the Agent, the Collateral
Trustee, Wilmington Trust Company and Xxxxxxx Xxxxx Credit Partners, L.P., in
the form attached hereto as Exhibit I, as amended, supplemented, restated or
otherwise modified from time to time.
"Collateral Trustee" means The Bank of New York, as Collateral Trustee
under the Collateral Trust Agreement, and any successor collateral trustee
serving from time to time thereunder.
"Commitment" means, relative to any Term B Lender, its Term B Loan
Commitment and, relative to any Revolving Lender, its Revolving Loan Commitment.
"Commitment Amount" means, as the context may require, either the Term
B Loan Commitment Amount or the Revolving Commitment Amount.
"Commitment Fee" is defined in Section 3.3.1.
"Commitment Termination Date" means, as the context may require, either
the Revolving Loan Commitment Termination Date or the Term B Loan Commitment
Termination Date.
"Commitment/Loan Termination Event" means
(a) the occurrence of any Default described in clauses (a)
through (d) of Section 9.1.9 with respect to the Borrower or any
Significant Subsidiary; or
(b) the occurrence and continuance of any other Event of
Default and either
(i) the declaration of the Loans to be due and
payable pursuant to Section 9.3, or
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(ii) in the absence of such declaration, the
giving of notice by the Agent, acting at the direction of the
Required Lenders, to the Borrower that the Commitments have
been terminated.
"Consolidated Income Tax Expense" means, for any period, as applied to
the Borrower, the provision for local, state, federal or foreign income taxes on
a consolidated basis for such period determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, as applied to
the Borrower, the sum of (a) the total interest expense of the Borrower and its
consolidated Subsidiaries for such period as determined in accordance with GAAP,
plus (b) all but the principal component of rentals in respect of Capitalized
Lease Liabilities paid, accrued, or scheduled to be paid or accrued by the
Borrower or its consolidated Subsidiaries, plus (c) one-third of all operating
lease obligations paid, accrued, and/or scheduled to be paid by the Borrower and
its consolidated Subsidiaries, plus (d) capitalized interest, plus (e) dividends
paid in respect of preferred stock of the Borrower or any Subsidiary held by
Persons other than the Borrower or a Wholly Owned Subsidiary, including, without
limitation, but without duplication of payments by the Borrower to a Trust, all
payments by a Trust of dividends and distributions with respect to the
Guaranteed Preferred Securities, plus (f) cash contributions to any employee
stock ownership plan to the extent such contributions are used by such employee
stock ownership plan to pay interest or fees to any Person (other than the
Borrower or a Subsidiary) in connection with loans incurred by such employee
stock ownership plan to purchase capital stock of the Borrower.
"Consolidated Net Income (Loss)" means, for any period, as applied to
the Borrower, the Consolidated Net Income (loss) of the Borrower and its
consolidated Subsidiaries for such period, determined in accordance with GAAP,
adjusted by excluding (without duplication), to the extent included in such net
income (loss), the following: (i) all extraordinary gains or losses; (ii) any
net income of any Person if such Person is not incorporated or organized in the
United States, a state thereof or the District of Columbia, except that (A) the
Borrower's equity in the net income of any such Person for such period shall be
included in Consolidated Net Income (Loss) up to the aggregate amount of cash
actually distributed by such Person during such period to the Borrower or a
Subsidiary incorporated or organized in the United States, a state thereof or
the District of Columbia, as a dividend or other distribution and (B) the equity
of the Borrower or a Subsidiary in a net loss of any such Person for such period
shall be included in determining Consolidated Net Income (Loss); (iii) the net
income of any Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary of such income is not at
the time thereof permitted, directly or indirectly, by operation of the terms of
its charter or by-laws or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Subsidiary or its
stockholders; (iv) any net income (or loss) of any Person combined with the
Borrower or any of its Subsidiaries on a "pooling of interests" basis
attributable to any period prior to the date of such combination; (v) any gain
(but not loss) realized upon the sale or other disposition of any property,
plant or equipment of the Borrower or its Subsidiaries (including pursuant to
any sale-and-leaseback arrangement) which is not sold or otherwise disposed of
in the ordinary course of business and any gain (but not loss) realized upon the
sale or other disposition by the Borrower or any Subsidiary of any capital stock
of any Person, provided that losses shall be included on an after-tax basis; and
(vi) the cumulative effect of a change in accounting principles; and further
adjusted by subtracting from such net income
9
the tax liability of any parent of the Borrower to the extent of payments made
to such parent by the Borrower pursuant to any tax sharing agreement or other
arrangement for such period.
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Contingent Liability shall be
calculated on a net basis (i.e., after taking into effect agreements,
undertakings and other arrangements between the Person whose obligations are
being guaranteed and the counterparty to such Person's obligations) and shall
(subject to any limitation set forth therein) be deemed to be the outstanding
net principal amount (or maximum net principal amount, if larger) of the debt,
obligation or other liability guaranteed thereby, or, if the principal amount is
not stated or determinable, the maximum reasonably anticipated net liability in
respect thereof as determined by the Person in good faith, provided that (y) the
amount of any Contingent Liability arising out of any indebtedness, obligation
or liability other than the items described in clauses (a), (b) and (c) of the
definition of "Indebtedness" and (z) the amount of any Contingent Liability
consisting of a "keep-well", "make well" or other similar arrangement shall be
deemed to be zero unless and until the Borrower is required to make any payment
with respect thereto (and shall thereafter be deemed to be the amount required
to be paid).
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C.
"Control Agreement" means one or more control agreements establishing a
perfected first priority security interest over cash collateral required under
the Loan Documents, with the Agent or other institution satisfactory to it
acting as intermediary thereunder.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
"Convertible Senior Notes" means the $1,200,000,000 of 4% Convertible
Senior Notes Due 2006 issued by the Borrower pursuant to the Shelf Indenture.
"Convertible Subordinated Debentures" means the up to $284,536,100 of
Convertible Subordinated Debentures due 2029 issued by the Borrower pursuant to
the Indenture dated November 2, 1999, the up to $371,134,100 of Convertible
Subordinated Debentures due 2030 issued by the Borrower pursuant to the
Indenture dated January 31, 2000 and the up to $535,000,000 of Convertible
Subordinated Debentures due 2030 issued by the Borrower pursuant to the
Indenture dated August 9, 2000.
10
"Credit Extension" means and includes (a) the advancing of any Loans by
the applicable Lenders in connection with a Borrowing, and (b) any issuance or
extension by an Issuer of a Letter of Credit.
"Debt" means the outstanding principal amount of all Indebtedness of
the Borrower and its consolidated Subsidiaries of the nature referred to in
clauses (a), (b), (c) and (f) of the definition of "Indebtedness," and (without
duplication) all Contingent Liabilities in respect of any of the foregoing.
"Deeds of Trust" means, collectively, (i) in connection with the
Domestic Gas Reserves, the Existing Deeds of Trust, as amended and restated by
the Amended and Restated Mortgage, Deed of Trust, Assignment, Security
Agreement, Financing Statement and Fixture Filing, dated as of July 16, 2003,
and each other mortgage, deed of trust or other real property collateral
security instrument with respect to the Domestic Gas Reserves, from the Borrower
to the Collateral Trustee (for the benefit of, among others, the Lenders), dated
as of July 16, 2003 and delivered pursuant to Article VI hereof, as amended,
supplemented, restated or otherwise modified from time to time and (ii) in
connection with the Pledged Power Projects, each mortgage, deed of trust or
other real property collateral security instrument with respect to a Pledged
Power Project, from the Borrower to the Collateral Trustee (for the benefit of,
among others, the Lenders), dated as of July 16, 2003 and delivered pursuant to
Article VI hereof, as amended, supplemented, restated or otherwise modified from
time to time.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"Designated Assets" means all geothermal energy assets (including any
related extraction, processing or similar equipment and geothermal power plants)
and all Domestic Gas Reserves and Canadian Gas Reserves (including any related
extraction, processing or similar equipment, other than natural gas power
plants) owned by the Borrower or any of its Subsidiaries from time to time,
including the equity interests of any Subsidiary owning any Designated Assets,
but excluding (i) any geothermal energy assets that are both unproven and
undeveloped and (ii) contracts for the purchase or sale of natural gas and
natural gas supplied under such contracts.
"Disbursement" is defined in Section 4.5.
"Disbursement Date" is defined in Section 4.5.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented or otherwise modified from time
to time by the Borrower with the written consent of the Agent and the Required
Lenders.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Gas Reserves" means the oil and gas reserves of the Borrower
and its Subsidiaries located in the United States.
11
"Domestic Office" means, relative to any Lender, the office of such
Lender designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender (or any successor or
assign of such Lender) within the United States as may be designated from time
to time by notice from such Lender, as the case may be, to each other Person
party hereto. A Lender may have separate Domestic Offices for purposes of
making, maintaining or continuing Base Rate Loans.
"EBITDA" means, for any period, as applied to the Borrower, the sum of
Consolidated Net Income (Loss) (but without giving effect to adjustments,
accruals, deductions or entries resulting from purchase accounting,
extraordinary losses or gains and any gains or losses from any Asset Sales),
plus the following to the extent included in calculating Consolidated Net Income
(Loss): (a) Consolidated Income Tax Expense, (b) Consolidated Interest Expense,
(c) depreciation expense, (d) amortization expense and (e) all other non-cash
items reducing Consolidated Net Income, less all non-cash items increasing
Consolidated Net Income, in each case for such period; provided that, if the
Borrower has any Subsidiary that is not a Wholly Owned Subsidiary, EBITDA shall
be reduced (to the extent not otherwise reduced by GAAP) by an amount equal to
(A) the consolidated net income (loss) of such Subsidiary (to the extent
included in Consolidated Net Income (Loss)) multiplied by (B) the quotient of
(1) the number of shares of outstanding common stock of such Subsidiary not
owned on the last day of such period by the Borrower or any Wholly Owned
Subsidiary of the Borrower divided by (2) the total number of shares of
outstanding common stock of such Subsidiary on the last day of such period.
"8 1/4% Senior Notes" means the $250,000,000 of 8 1/4% Senior Notes due
2005 issued by the Borrower pursuant to the Shelf Indenture.
"8 1/2% Senior Notes" means the $2,000,000,000 of 8 1/2% Senior Notes
due 2011 issued by the Borrower pursuant to the Shelf Indenture.
"8 3/4% Senior Note Indenture" means that certain Indenture dated as of
July 8, 1997, as supplemented by the First Supplemental Indenture dated as of
September 10, 1997 and the Second Supplemental Indenture dated as of July 31,
2000, between the Borrower and The Bank of New York, as Trustee.
"8 3/4% Senior Notes" means the $275,000,000 of 8 3/4% Senior Notes due
2007 issued by the Borrower pursuant to the 8 3/4% Senior Note Indenture.
"8 5/8% Senior Notes" means the $750,000,000 of 8 5/8% Senior Notes due
2010 issued by the Borrower pursuant to the Shelf Indenture.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"Equivalent Amount" means, on any date, and in respect of any Foreign
Currency Letter of Credit, the equivalent amount in U.S. Dollars of the Stated
Amount of any such Foreign Currency Letter of Credit (or any related
Reimbursement Obligations or Disbursements) denominated in either Canadian
Dollars or Sterling, as the case may be, determined by using the
12
quoted spot rate at which the Issuer of such Letter of Credit offers to exchange
Dollars for such Canadian Dollars or Sterling at the opening of business on such
date.
"Equivalent Amount Determination Date" is defined in Section 4.12.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
"Event of Default" is defined in Section 9.1.
"Excess Proceeds Basket" is defined in Section 8.2.6(b).
"Excluded Assets" shall have the meaning set forth in the Collateral
Trust Agreement.
"Existing Deeds of Trust" means each mortgage, deed of trust, or other
real property collateral security instrument from the Borrower in favor of the
agent under the 2002 Credit Agreement, as amended, supplemented, restated or
otherwise modified from time to time.
"Existing Letters of Credit" means the letters of credit and bank
guarantee described in Schedule 4.10.
"Facility" means a power generation facility or energy producing
facility and all related assets and facilities, including any related fuel
reserves.
"Fair Market Value" means the value that would be paid by a willing
buyer to a willing seller in a transaction not involving duress or necessity of
either party.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by Scotia Capital from three federal funds
brokers of recognized standing selected by it.
"Fee Letters" means the fee letter agreements, each dated as of July
15, 2003, between the Borrower and the Agent.
"Fiscal Quarter" means any period of three consecutive months ending on
March 31, June 30, September 30 or December 31 of any year.
13
"Fiscal Year" means any period of twelve consecutive calendar months
ending on December 31; references to a Fiscal Year with a number corresponding
to any calendar year (e.g. the "2003 Fiscal Year") refer to the Fiscal Year
ending on the December 31 occurring during such calendar year.
"Foreign Currency Letter of Credit" means any Letter of Credit
denominated in either Canadian Dollars or Sterling.
"Foreign Currency Letter of Credit Commitment Amount" means
$200,000,000.
"Foreign Currency Letter of Credit Outstandings" means any Letter of
Credit Outstandings in respect of Foreign Currency Letters of Credit.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" is defined in Section 1.4.
"Gilroy Assignment Agreement" means the First Amendment Assignment and
Security Agreement, dated as of July 16, 2003, by the Borrower in favor of the
Collateral Trustee (for the benefit of, among others, the Lenders), in the form
attached hereto as Exhibit J, as amended, supplemented, restated or otherwise
modified from time to time.
"Gilroy Receivable" means the Borrower's right, title and interest in
all amounts due and payable to Calpine Gilroy by Pacific Gas & Electric Company
under that certain Agreement, dated as of July 1, 1999, as amended, between
Pacific Gas & Electric Company and Calpine Xxxxxx X.X., a California limited
partnership (PG&E Log No. 08C002) For Termination and Buy-Out of Standard Offer
4 Power Purchase Agreement.
"Granting Lender" is defined in Section 11.11.3.
"Guaranteed Preferred Securities" means the preferred securities issued
by one of the Trusts, from time to time, including, without limitation the
$276,000,000 of principal amount of such securities issued in November, 1999,
the $300,000,000 of principal amount of such securities issued in January, 2000,
the $60,000,000 of principal amount of such securities issued in February, 2000,
and the $517,500,000 of principal amount of such securities issued in August,
2000.
"Guarantors" means, collectively, QM, JOQ and QCH and any other
Subsidiary of the Borrower that executes a joinder to the Security Agreement and
becomes a party thereto.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended;
14
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material or substance within the meaning of any other
applicable federal, state or local law, regulation, ordinance or
requirement (including consent decrees and administrative orders)
relating to or imposing liability or standards of conduct concerning
any hazardous, toxic or dangerous waste, substance or material, all as
amended or hereafter amended.
"Hazardous Materials Indemnity" means, collectively (i) the Amended and
Restated Hazardous Materials Undertaking and Indemnity (Multistate), dated as of
July 16, 2003, by the Borrower in favor of the Collateral Trustee (for the
benefit of, among others, the Lenders) and (ii) the Amended and Restated
Hazardous Materials Undertaking and Unsecured Indemnity (California), dated as
of July 16, 2003, by the Borrower in favor of the Collateral Trustee (for the
benefit of, among others, the Lenders), in each case in a form reasonably
satisfactory to the Agent, as amended, supplemented, restated or otherwise
modified from time to time.
"Hedging Obligations" means, with respect to any Person, the net
liabilities of such Person under (a) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, foreign exchange
contracts, currency swap agreements and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency exchange rates and (b) commodity or power swap or exchange agreements.
"herein", "hereof", "hereto", "hereunder" and similar terms contained
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
section, paragraph or provision of this Agreement or such other Loan Document.
"High Yield Indentures" means the Senior Note Indentures (other than
the Shelf Indenture).
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of any Obligor, any qualification or exception to such opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement; or
(c) which relates to the treatment or classification of any
item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause such Obligor to be in default of any of its
obligations under Section 8.2.4.
"including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
shall not be applicable to limit a general statement, which
15
is followed by or referable to an enumeration of specific matters, to matters
similar to the matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments (excluding the Convertible Subordinated
Debentures and any other subordinated debt securities issued by the
Borrower to a Trust and the Guaranteed Preferred Securities or any
similar securities);
(b) all obligations, contingent or otherwise, relative to the
stated amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person; provided,
however, that if a letter of credit or banker's acceptance has been
issued to support or secure any other form of Indebtedness, only the
greater of the stated amount of such letter of credit or banker's
acceptance or the outstanding principal amount of Indebtedness
supported or secured, but not both, will be considered Indebtedness
hereunder;
(c) all obligations of such Person as lessee under leases
which have been or should be, in accordance with GAAP, recorded as
Capitalized Lease Liabilities;
(d) all other items other than deferred taxes, deferred
revenue and deferred leases which, in accordance with GAAP, would be
included as liabilities on the liability side of the balance sheet of
such Person as of the date at which Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging
Obligations;
(f) whether or not so included as liabilities in accordance
with GAAP, all net obligations of such Person to pay the deferred
purchase price of property or services (excluding accounts payable
incurred in the ordinary course of business), and indebtedness
(excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether
or not such indebtedness shall have been assumed by such Person or is
limited in recourse, but excluding any royalties or similar payments to
be made by such Person which are based on production or performance;
and
(g) all Contingent Liabilities of such Person in respect of
any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person (i) shall
include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer, unless the indebtedness of such
partnership or joint venture is expressly nonrecourse to such Person and (ii)
shall exclude any preferred stock if, at the time of the incurrence or issuance
thereof, it would not be recorded as debt of such Person, in accordance with
GAAP.
"Indemnified Liabilities" is defined in Section 11.4.
16
"Indemnified Parties" is defined in Section 11.4.
"Insurance Event" means an event resulting in receipt of the proceeds
described in clause (b) of the definition of Net Available Cash.
"Interest Coverage Ratio" means, for any period of four Fiscal
Quarters, the ratio of (x) the consolidated EBITDA of the Borrower and its
Subsidiaries during such period to (y) the Consolidated Interest Expense of the
Borrower and its Subsidiaries (excluding from Consolidated Interest Expense for
purposes of this clause (y) interest capitalized in connection with the
construction of a new Facility which interest is capitalized during the
construction of such Facility) incurred during such period. This ratio shall be
calculated after giving pro forma effect to any Acquisition based upon the
historical audited financial statements of the project that was the subject of
the Acquisition. It is agreed that for purposes of clause (f)(i) of Section
8.2.2 only, the Interest Coverage Ratio shall be calculated in conformity in all
respects with the calculation of "Consolidated Coverage Ratio" under the
Xxx-0000 Xxxxxxxxxx.
"Interest Coverage Ratio (Parent Only)" means, for any period of four
Fiscal Quarters, the ratio of (x) the Borrower EBITDA during such period to (y)
the Borrower Interest Expense (excluding from Borrower Interest Expense for
purposes of this clause (y) interest capitalized in connection with the
construction of a new Facility which interest is capitalized during the
construction of such Facility) during such period; provided, however, that if
the Interest Coverage Ratio (Parent Only) as so calculated falls below 1.70 to
1.00, then for purposes of Section 6.2.4, the Interest Coverage Ratio (Parent
Only) shall be calculated as of the end of any calendar month on a rolling
twelve month basis until the Interest Coverage Ratio (Parent Only) equals or
exceeds 1.70 to 1.00, at which time such ratio shall again be tested quarterly.
This ratio shall be calculated after giving pro forma effect to any Acquisition.
"Interest Period" means, relative to any LIBO Rate Loans, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4
and ending on (but excluding) the day which numerically corresponds to such date
one, three or six months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), in each case as the
Borrower may select in its relevant notice pursuant to Section 2.3 or 2.4;
provided, however, that
(a) the Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates
occurring on more than five different dates;
(b) Interest Periods commencing on the same date for Loans
comprising part of the same Borrowing shall be of the same duration;
(c) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next
following Business Day (unless, if such Interest Period applies to LIBO
Rate Loans, such next following Business Day is the first Business Day
of a calendar month, in which case such Interest Period shall end on
the Business Day next preceding such numerically corresponding day);
and
(d) no Interest Period may end later than the applicable
Stated Maturity Date.
17
"Investment" means, relative to any Person, without duplication,
(a) any loan or advance made by such Person to any other
Person (excluding commission, travel and similar advances to officers
and employees made in the ordinary course of business and prepaid
expenses);
(b) any Contingent Liability of such Person; and
(c) any ownership or similar interest held by such Person in
any other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the Fair Market Value
of such property.
"Investment Joint Venture" means, with respect to any Person, any
corporation, partnership or other Person of which 25% or more of the outstanding
capital stock or other comparable ownership interest having ordinary voting
power to elect not less than 25% of the board of directors of such corporation
(irrespective or whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person, by such
Person and one or more other Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person.
"Issuance Request" means a request and certificate duly executed by the
chief executive, accounting or financial Authorized Officer of the Borrower, in
substantially the form of Exhibit D (with such changes thereto as may be agreed
upon from time to time by the Agent and the Borrower), together with a properly
completed application for a Letter of Credit on an Issuer's standard form,
executed by an Authorized Officer of the Borrower. In the event of a conflict
between the terms of an application for a Letter of Credit and the terms of this
Agreement, the terms of this Agreement shall prevail.
"Issuer" means Scotia Capital, BayernLB, or any Affiliate or unit of
agency of either, and any other Lender acceptable to the Borrower and the Agent,
and any successor to any of the foregoing Persons.
"Joint Venture" means, with respect to any Person, any corporation,
partnership or other Person of which 50% of the outstanding capital stock or
other comparable ownership interest having ordinary voting power to elect not
less than 50% of the board of directors of such corporation (irrespective or
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person, by such
Person and one or more other Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person.
"JOQ" means JOQ Canada, Inc., a Delaware corporation and indirect,
Wholly Owned Subsidiary of CNGH.
18
"Judgment Currency" is defined in Section 11.16.
"knowledge" or "to the Borrower's knowledge" means the knowledge of or
to the knowledge of the president, any vice president, the general counsel, the
secretary, the chief financial officer, the controller or the vice
president-finance of the Borrower.
"L/C Advances" is defined in Section 4.5.
"Lender Assignment Agreement" means a Lender Assignment Agreement
substantially in the form of Exhibit E.
"Lenders" is defined in the preamble.
"Letter of Credit" is defined in Section 4.1.
"Letter of Credit Agreement" means the Letter of Credit Agreement,
dated as of July 16, 2003, among the Borrower, various lenders parties thereto,
Scotia Capital, as administrative agent thereunder, and Scotia Capital and
BayernLB, as issuers thereunder.
"Letter of Credit Outstandings" means, at any time, an amount equal to
the sum of (a) the aggregate Stated Amount at such time of all Letters of Credit
then outstanding and undrawn (as such aggregate Stated Amount shall be adjusted,
from time to time, as a result of drawings, the issuance of Letters of Credit,
or otherwise) after converting the aggregate Stated Amounts of all Foreign
Currency Letters of Credit to the Equivalent Amount thereof, plus (b) the then
aggregate amount of all unpaid and outstanding Reimbursement Obligations (after
converting the aggregate Reimbursement Obligations with respect to Disbursements
made in either Canadian Dollars or Sterling to the Equivalent Amount thereof).
"Leverage Ratio" means the ratio of (a) Debt to (b) Debt plus Tangible
Net Worth.
"LIBO Rate" is defined in Section 3.2.1.
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" is defined in Section 3.2.1.
"LIBOR Office" means, relative to any Lender, the office of such Lender
designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender (or any successor or
assign of such Lender) as designated from time to time by notice from such
Lender to the Borrower and the Agent, whether or not outside the United States,
which shall be making or maintaining LIBO Rate Loans of such Lender hereunder.
"LIBOR Reserve Percentage" is defined in Section 3.2.1.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment for security, deposit arrangement, encumbrance, lien (statutory or
otherwise), charge against or
19
interest in property to secure payment of a debt or performance of an obligation
or other priority or preferential arrangement of any kind or nature whatsoever.
"LLC Pledge Agreement" means the Second Amendment Pledge Agreement
(Membership Interests), dated as of July 16, 2003, by the Borrower in favor of
the Collateral Trustee (for the benefit of, among others, the Lenders), in the
form attached hereto as Exhibit K, as amended, supplemented, restated or
otherwise modified from time to time.
"Loan" means, as the context may require, either a Term B Loan or a
Revolving Loan.
"Loan Documents" means this Agreement, the Notes, the Security
Agreement, the Deeds of Trust, the Fee Letters, the Collateral Trust Agreement,
the Control Agreements, the Stock Pledge Agreement, the Gilroy Assignment
Agreement, the LLC Pledge Agreement, the Note Pledge Agreement, the Canadian
Stock Pledge Agreement, the Hazardous Materials Indemnity and each other
relevant agreement, document or instrument delivered in connection therewith.
"Mandatory Prepayment Date" is defined in Section 3.1.1.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the financial condition, operations, assets
(including power projects), business or prospects of the Borrower and its
Subsidiaries taken as a whole; or (b) a material adverse change in the ability
of the Borrower or any other Obligor to perform under any Loan Document.
"Material Designated Assets" means Designated Assets having a Fair
Market Value in the aggregate in excess of $50,000,000.
"Monetization" means, in respect of any tangible or intangible asset,
any transaction or arrangement pursuant to which funds or access to cash or
similar liquidity are obtained by subjecting such asset to any agreement,
participation, production payment, forward sale, option or other right or
disposition, assignment or transfer including any securitization involving such
asset, but excluding (i) a transfer of assets between or among the Borrower and
its Subsidiaries, (ii) the sale or disposition of cash or Cash Equivalent
Investments, (iii) the sale or lease of products, services or accounts
receivable in the ordinary course of business, (iv) any transaction or
arrangement resulting in the creation of Indebtedness of the Borrower or any
Subsidiary of the Borrower, (v) the sale or disposition of Excluded Assets and
(vi) any Asset Sale.
"Moody's" means Xxxxx'x Investor Service, Inc.
"Net Available Cash" means, (a) with respect to any Asset Sale, the
cash or cash equivalent payments received by the Borrower or any of its
Subsidiaries in connection with such Asset Sale (including any cash received by
way of deferred payment of principal pursuant to a note or installment
receivable or otherwise, but only as or when received and also including the
proceeds of other property received when converted to cash or cash equivalents)
net of the sum of, without duplication, (i) all reasonable legal, title and
recording tax expenses, reasonable commissions, and other reasonable fees and
expenses incurred directly relating to such Asset Sale, (ii) all local, state,
federal and foreign taxes required to be paid or accrued as a liability by the
Borrower or any of its Subsidiaries as a consequence of such Asset Sale, (iii)
payments made to repay Indebtedness which is secured by any assets subject to
such Asset Sale in accordance
20
with the terms of any Lien upon or other security agreement of any kind with
respect to such assets, or which must by its terms, or by applicable law, be
repaid out of the proceeds from such Asset Sale and (iv) all distributions
required by any contract entered into other than in contemplation of such Asset
Sale to be paid to any holder of a minority equity interest in such Subsidiary
as a result of such Asset Sale, so long as such distributions do not exceed such
minority holder's pro rata portion (based on such minority holder's
proportionate equity interest) of the cash or cash equivalent payments described
above, net of the amounts set forth in clauses (i)-(iii) above; (b) all cash
insurance proceeds received by the Borrower or any of its Subsidiaries from any
condemnation awards or casualty losses (excluding proceeds of business
interruption insurance) in respect of any asset the sale, transfer, lease or
other disposition of which would constitute an Asset Sale, net of all payments
made to repay Indebtedness which is secured by the assets which were the subject
of such condemnation or casualty; provided, however, so long as no Event of
Default shall have occurred and be continuing, upon the Borrower's request
within 90 days after the date of such occurrence, such proceeds shall be
retained by the Borrower or such Subsidiary or delivered to the Borrower or such
Subsidiary to repair or replace the property subject to such casualty so long as
the Borrower or such Subsidiary has undertaken and is diligently pursuing the
repair of such property; provided, however, that if such repairs cease or if,
after such repairs are completed, the Borrower or such Subsidiary retains any of
such proceeds, such proceeds shall thereupon be applied as provided in Sections
2.2.2 and 3.1.1; and (c) with respect to any Monetization or any incurrence of
Indebtedness, the cash proceeds received by the Borrower or any of its
Subsidiaries from such Monetization or incurrence, net of attorneys' fees and
expenses, banking and/or investment banking fees and expenses, accountants' fees
and expenses, underwriting discounts and commissions and other customary fees
and expenses actually incurred in connection therewith.
"Net Equity Proceeds" means, with respect to any issuance by the
Borrower or a Trust of any equity securities (including the Guaranteed Preferred
Securities), the gross consideration received by or for the account of the
issuer, net of attorneys' fees and expenses, banking and/or investment banking
fees and expenses, accountants' fees and expenses, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"Nonmaterial Subsidiary Default" means any Default (excluding any Event
of Default) arising or resulting from the default or potential default by a
Subsidiary (other than a Significant Subsidiary) under any obligation or
condition under Section 8.1 of this Agreement (but not any other section of this
Agreement) or under any other agreement, contract or undertaking binding on such
Subsidiary other than (i) the failure by such Subsidiary to make a required
payment under any Indebtedness of such Subsidiary having a principal amount in
excess of $10,000,000 and (ii) a default in the performance or observance of any
obligation or condition with respect to any Indebtedness of such Subsidiary
having a principal amount in excess of $10,000,000 and, as a result thereof, the
holder or holders of such Indebtedness, or any trustee or agent for such
holders, causes such Indebtedness to be repaid more quickly than theretofore
scheduled, whether through the introduction of a "cash sweep," the increase of
an existing "cash sweep" or otherwise.
"Non-Recourse Debt" means Indebtedness of any Subsidiary of the
Borrower (other than any Subsidiary that owns, directly or indirectly, any
Material Designated Assets) that is incurred
21
to finance the exploration, drilling, development, construction or purchase of
or by, or repairs, improvements or additions to, property or assets of the
Borrower or any Subsidiary (including power generation facilities); provided
that such Indebtedness is without recourse to the Borrower (except as permitted
by Section 8.2.3(n)) or any Subsidiary or to any property or assets of the
Borrower or any Subsidiary other than property or assets (including capital
stock or other comparable ownership interest) of a Subsidiary subject to a Lien
permitted pursuant to Section 8.2.3(n) or property or assets (including capital
stock or other comparable ownership interest) of a Subsidiary subject to a Lien
permitted pursuant to Section 8.2.3(s).
"Note" means, as the context may require, either a Revolving Note or a
Term Note.
"Note Pledge Agreement" means the First Amendment Note Pledge
Agreement, dated as of July 16, 2003, by the Borrower in favor of the Collateral
Trustee (for the benefit of, among others, the Lenders), in the form attached
hereto as Exhibit L, as amended, supplemented, restated or otherwise modified
from time to time.
"Notes" means the Revolving Notes and the Term Notes.
"Obligations" means all obligations (monetary or otherwise) of the
Borrower and each other Obligor arising under or in connection with this
Agreement, the Notes and each other Loan Document.
"Obligor" means the Borrower, each Guarantor or any other Person (other
than the Agent or any Lender) obligated under, or otherwise a party to, any Loan
Document.
"Organic Document" means, relative to any Obligor, its certificate of
incorporation, partnership agreement, or similar organizational document, its
by-laws and all shareholder agreements, voting trusts and similar arrangements
applicable to any of its authorized shares of capital stock or other ownership
interests.
"Original Currency" is defined in Section 11.16.
"Parity Lien Debt" means any Indebtedness incurred in compliance with
the 2003 Senior Note Indenture that is secured by the Collateral on a parity
basis with the 2003 Senior Notes and the Second Priority B Loans.
"Participant" is defined in Section 11.11.2.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which the
Borrower or any corporation, trade or business that is, along with the Borrower,
a member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of Section 4063
of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under Section 4069 of ERISA.
22
"Percentage" means, as the context may require, a Lender's Revolving
Percentage, Term Percentage or Aggregate Percentage.
"Permitted Sale" means any individual sale, transfer, lease,
contribution, conveyance or Monetization of a portion of the Domestic Gas
Reserves or Canadian Gas Reserves (together with related tangible personal
property) having a value, according to the most recent, year-end report
evaluating the Domestic Gas Reserves and Canadian Gas Reserves prepared by an
independent petroleum engineer acceptable to the Agent, of $5,000,000 or less;
provided no such sale, transfer, lease, contribution or conveyance shall be a
Permitted Sale to the extent that it would cause the aggregate value of all
Permitted Sales during any period of twelve consecutive calendar months to
exceed $25,000,000.
"Person" means any natural person, corporation, partnership, limited
liability company, firm, association, trust, government, governmental agency or
any other entity, whether acting in an individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Pledged Entity" means (i) any Subsidiary of the Borrower, (ii) any
Investment Joint Venture and (iii) any trading joint venture or similar
arrangement in which the Borrower has made an Investment of any capital stock or
equity related securities of CES or any CES Assets pursuant to Section 8.2.5(d),
all of the Borrower's (and its Subsidiaries') equity in which Subsidiary,
Investment Joint Venture or trading joint venture or similar arrangement has
been directly pledged to the Collateral Trustee (for the benefit of, among
others, the Lenders hereunder) pursuant to the Security Documents.
"Pledged Power Project" means the power generation property and related
equipment at each of the following locations: (i) the Goldendale Energy Center
in Goldendale, Washington; (ii) the Otay Mesa Energy Center near San Diego,
California; (iii) the Xxxxxxx Energy Center near San Jose, California; (iv) the
Santa Xxxx Energy Center in Santa Xxxx County, Florida; (v) the Washington
Parish Energy Center near Bogalusa, Louisiana; (vi) the Xxxx Xxxx Xxxxxx Xxxxxx
xx Xxxx Xxxx, Xxxxx; and (vii) the Augusta Energy Center in Augusta, Georgia.
"Prepayment Option Notice" is defined in Section 3.1.1.
"Prepayment Letter Agreement" means the letter, dated as of July 16,
2003, from the Agent to the Borrower in connection with the payment or
prepayment of the Convertible Senior Notes.
"Pre-2000 Indentures" means the Senior Note Indentures (other than the
Shelf Indenture, the 2003 Senior Note Indenture, the Second Priority Term Loan
Agreement, any other documentation under which the Parity Lien Debt is incurred,
the CCEF Indenture and the CCEFII Indenture).
"pro forma" or "pro forma basis" means, for any period, that if the
Borrower or any Subsidiary shall have made any acquisition or disposition of
assets or capital stock (occurring by merger or otherwise) since the beginning
of such period (including any acquisition or disposition of assets or capital
stock occurring in connection with a transaction causing a calculation to be
23
made hereunder), subject to the qualifications set forth in the definitions
thereof, the Interest Coverage Ratio and Interest Coverage Ratio (Parent Only)
calculated for such period shall be calculated after giving pro forma effect to
such acquisition or disposition, based upon the historical audited financial
statements covering the assets or stock so acquired or disposed.
"Projected Cash Flow Statement" is defined in Section 6.1.12.
"PUD" means any portion of the Domestic Gas Reserves or Canadian Gas
Reserves to which only proved undeveloped oil and gas reserves or any category
of unproved oil and gas reserves are attributed, or undeveloped acreage to which
no oil and gas reserves are attributed.
"QCH" means Xxxxxxxx Canada Holdings, LLC, a Delaware limited liability
company and indirect, Wholly Owned Subsidiary of CNGH.
"QM" means Xxxxxxxx Minerals (USA), Inc., a Delaware corporation and
indirect, Wholly Owned Subsidiary of CNGH.
"Quarterly Payment Date" means the last day of each March, June,
September, and December or, if any such day is not a Business Day, the next
succeeding Business Day.
"Rating" means, as used in Section 8.2.9(a), the rating by the
applicable Rating Agency of the senior secured debt (or, if no such rating
exists, the implied rating thereof) of the Borrower (or, if the Borrower shall
not be the survivor of a merger permitted under Section 8.2.9(a), of such
survivor); provided that at any time after the credit facilities established by
this Agreement shall be rated by such Rating Agency, "Rating" shall mean such
rating.
"Rating Agencies" means S&P and Moody's.
"Register" is defined in Section 2.6.
"Reimbursement Obligation" is defined in Section 4.6.
"Release" means a "release", as such term is defined in CERCLA.
"Repayable Restricted Capital" means all Restricted Capital of the
Borrower and its Subsidiaries, other than the Convertible Senior Notes, the
Convertible Subordinated Debentures, the Guaranteed Preferred Securities, any
Subordinated Debt and any Contingent Liabilities in respect of any of the
foregoing.
"Required Lenders" means, at any time, Lenders owed or holding (a) if
the Revolving Loan Commitments shall not have been terminated, at least 51% of
the aggregate of all Term B Loans then outstanding, all unfunded Term B Loan
Commitments, all Revolving Loans then outstanding, all Letter of Credit
Outstandings on such date, and all unfunded Revolving Loan Commitments or (b) if
the Revolving Loan Commitments shall have been terminated, at least 51% of the
aggregate amount of all Loans and L/C Advances then outstanding.
"Required Revolving Lenders" means, at any time, Revolving Lenders
having Revolving Percentages aggregating at least 51%.
24
"Reset Date" is defined in Section 4.12.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as in effect
from time to time.
"Restricted Capital" means (i) any Senior Notes, Subordinated Debt or
Convertible Senior Notes and (ii) any other Indebtedness of the Borrower
described in clause (a) of the definition thereof without giving effect to the
parenthetical thereto and clause (g) thereof to the extent guaranteeing
Indebtedness of the type described in clause (a) thereof or clause (ii) of this
definition, and including, for avoidance of doubt, any such Indebtedness related
to preferred or trust preferred or similar capital, or convertible to equity
capital, but excluding any Indebtedness permitted to be incurred under Section
8.2.2(a)(i), (a)(iii) or (d).
"Restricted Capital Payment" is defined in Section 8.2.6(b).
"Restricted Subsidiary" has the meaning given in the Xxx-0000
Xxxxxxxxxx.
"Revolving Commitment Amount" means, on any date, $300,000,000, as such
amount may be reduced from time to time pursuant to Section 2.2.
"Revolving Commitment Availability" means, on any date, the excess of
(a) the then Revolving Commitment Amount, over (b) the sum of (i) the
outstanding principal amount of all Revolving Loans on such date plus (ii) the
Letter of Credit Outstandings on such date.
"Revolving Lender" means each Lender that holds a Revolving Loan
Commitment or a Revolving Loan.
"Revolving Loans" is defined in Section 2.1.2.
"Revolving Loan Commitment" is defined in Section 2.1.2.
"Revolving Loan Commitment Termination Date" means the earliest of
(a) July 15, 2005;
(b) the date on which the Revolving Loan Commitments of the
Revolving Lenders are terminated in full or reduced to zero pursuant to
Section 2.2; and
(c) the date on which any Commitment/Loan Termination Event
occurs.
Upon the occurrence of any event described in clause (b) or (c), the Revolving
Loan Commitments shall terminate automatically and without any further action.
"Revolving Note" means a promissory note of the Borrower payable to the
order of any Revolving Lender, in the form of Exhibit A-1 (as such promissory
note may be amended, endorsed or otherwise modified from time to time),
evidencing the aggregate Indebtedness of the Borrower to such Revolving Lender
resulting from its outstanding Revolving Loans and L/C
25
Advances, and also means all other promissory notes accepted from time to time
in substitution therefor or renewal thereof.
"Revolving Percentage" means, relative to any Revolving Lender, the
percentage set forth opposite its name on Schedule II under the caption
"Revolving Percentage" or as set forth in its Lender Assignment Agreement, as
such percentage may be adjusted from time to time pursuant to Lender Assignment
Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered
pursuant to Section 11.11. After the Revolving Loan Commitment Termination Date,
relative to any Revolving Lender, at any time, such Revolving Lender's
"Revolving Percentage" shall be as in effect immediately prior to the Revolving
Loan Commitment Termination Date and after giving effect to any Lender
Assignment Agreement(s) of such Lender executed by such Lender and its Assignee
Lender(s) and delivered pursuant to Section 11.11 at or prior to such time.
"S&P" means Standard & Poor's Ratings Group.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired whereby the Borrower or a Subsidiary transfers
such property to a Person and leases it back from such Person, other than leases
for a term of not more than 36 months or between the Borrower and a Wholly Owned
Subsidiary or between Wholly Owned Subsidiaries. "Sale/Leaseback Transactions"
shall not include any arrangements or transactions constituting Capitalized
Lease Liabilities.
"Saltend" means Saltend Cogeneration Company Limited, UK private
limited company, a United Kingdom private limited company and an indirect,
Wholly Owned Subsidiary of the Borrower.
"Scotia Capital" is defined in the preamble.
"Second Priority B Loans" means the $750,000,000 of Second Priority
Secured Term B Loans incurred by the Borrower pursuant to the Second Priority
Term Loan Agreement.
"Second Priority Term Loan Agreement" means the Credit Agreement, dated
as of July 16, 2003, among the Borrower, Xxxxxxx Xxxxx Credit Partners L.P., as
sole lead arranger, sole bookrunner and administrative agent, Scotia Capital, as
arranger and syndication agent, TD Securities (USA) Inc., ING (U.S.) Capital LLC
and Landesbank Hessen-Thuringen, as co-arrangers, and Credit Lyonnais New York
Branch and Union Bank of California, N.A., as managing agents.
"Security Agreement" means the Guarantee and Collateral Agreement,
dated as of July 16, 2003, by the Borrower, QM, JOQ and QCH in favor of the
Collateral Trustee (for the benefit of, among others, the Lenders), in the form
attached hereto as Exhibit M, as amended, supplemented, restated or otherwise
modified from time to time.
"Security Documents" means the Security Agreement, the Deeds of Trust,
the Collateral Trust Agreement, the Stock Pledge Agreement, the Gilroy
Assignment Agreement, the LLC Pledge Agreement, the Note Pledge Agreement, the
Canadian Stock Pledge Agreement, the
26
Control Agreements and each other relevant agreement, document or instrument
delivered in connection therewith.
"Senior Note Indentures" means, collectively, the 7 3/4% Senior Note
Indenture, the 7 5/8% Senior Note Indenture, the 7 7/8% Senior Note Indenture,
the 8 3/4% Senior Note Indenture, the Shelf Indenture (to the extent relating
solely to the Senior Notes), the 10 1/2% Senior Note Indenture, the 2003 Senior
Note Indenture, the Second Priority Term Loan Agreement, any other documentation
under which the Parity Lien Debt is incurred, the CCEF Indenture and the CCEFII
Indenture.
"Senior Notes" means, collectively, the 7 3/4% Senior Notes, the 7 5/8%
Senior Notes, the 7 7/8% Senior Notes, the 8 1/4% Senior Notes, the 8 1/2%
Senior Notes, the 8 3/4% Senior Notes, the 8 5/8% Senior Notes, the 10 1/2%
Senior Notes, the Convertible Senior Notes, the 2003 Senior Notes, the Second
Priority B Loans, the Parity Lien Debt, the CCEF Notes and the CCEFII Notes.
"Senior Notes Basket" is defined in Section 8.2.6(b)(A)(y).
"7 5/8% Senior Note Indenture" means that certain Indenture dated as of
March 29, 1999, as supplemented by the First Supplemental Indenture dated as of
July 31, 2000, between the Borrower and The Bank of New York, as Trustee.
"7 5/8% Senior Notes" means the $250,000,000 of 7 5/8% Senior Notes due
2006 issued by the Borrower pursuant to the 7 5/8% Senior Note Indenture.
"7 7/8% Senior Note Indenture" means that certain Indenture dated as of
March 31, 1998, as supplemented by the First Supplemental Indenture dated as of
July 24, 1998 and the Second Supplemental Indenture dated as of July 31, 2000,
between the Borrower and The Bank of New York, as Trustee.
"7 7/8% Senior Notes" means the $400,000,000 of 7 7/8% Senior Notes due
2008 issued by the Borrower pursuant to the 7 7/8% Senior Note Indenture.
"7 3/4% Senior Note Indenture" means that certain Indenture dated as of
March 29, 1999, as supplemented by the First Supplemental Indenture dated as of
July 31, 2000, between the Borrower and The Bank of New York, as Trustee.
"7 3/4% Senior Notes" means the $350,000,000 of 7 3/4% Senior Notes due
2009 issued by the Borrower pursuant to the 7 3/4% Senior Note Indenture.
"Shelf Indenture" means that certain Indenture dated as of August 10,
2000, as supplemented from time to time, between the Borrower and Wilmington
Trust Company, as Trustee.
"Significant Subsidiary" means each Subsidiary of the Borrower that
(a) accounted for at least 10% of consolidated revenues of the
Borrower and its Subsidiaries or 10% of consolidated earnings of the
Borrower and its Subsidiaries
27
before interest and taxes, in each case for the last four full Fiscal
Quarters immediately preceding the date as of which any such
determination is made; or
(b) has assets which represent at least 10% of the
consolidated assets of the Borrower and its Subsidiaries as of the last
day of the last Fiscal Quarter of the Borrower immediately preceding
the date as of which any such determination is made,
all of which shall be as reflected on the financial statements of the Borrower
for the period, or as of the date, in question. Notwithstanding the foregoing,
(i) CCFCI shall be deemed to be a Significant Subsidiary for all purposes of
this Agreement until such date as all Indebtedness under the CCFCI Credit
Agreement shall have been repaid in full and all commitments to lend thereunder
have been terminated and, thereafter, at any time when CCFCI meets the criteria
set forth in the first sentence of this definition and (ii) CCFCII shall be
deemed to be a Significant Subsidiary for all purposes of this Agreement until
such date as all Indebtedness under the CCFCII Credit Agreement shall have been
repaid in full and all commitments to lend thereunder have been terminated and,
thereafter, at any time when CCFCII meets the criteria set forth in the first
sentence of this definition.
"Solvent" means, as to any Person at any time, that (i) the fair value
of the property of such Person is greater than the amount of such Person's
liabilities (whether subordinated, contingent, unmatured, unliquidated or
otherwise); (ii) the present fair saleable value of the property of such Person
is not less than the amount that will be required to pay the probable liability
of such Person on its debts as they become absolute and matured; (iii) such
Person is able to pay its debts and other liabilities as they mature in the
normal course of business; (iv) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature; and (v) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute unreasonably
small capital.
"SPC" is defined in Section 11.11.3.
"Stated Amount" of each Letter of Credit means the "Stated Amount" as
defined therein.
"Stated Expiry Date" is defined in Section 4.1(b).
"Stated Maturity Date" means, in the case of the Revolving Loans, July
15, 2005 and, in the case of the Term B Loans, July 15, 2007.
"Sterling" and the sign "(pound)" shall mean freely transferable lawful
money of the United Kingdom.
"Stock Pledge Agreement" means the Second Amendment Pledge Agreement,
dated as of July 16, 2003, by the Borrower in favor of the Collateral Trustee
(for the benefit of, among others, the Lenders), in the form attached hereto as
Exhibit N, as amended, supplemented, restated or otherwise modified from time to
time.
28
"Subordinated Debt" means all unsecured Indebtedness of the Borrower
for money borrowed which is subordinated, upon terms satisfactory to the Agent
and the Required Lenders, in right of payment to the payment in full in cash of
all Obligations.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other Person of which at least 50% of the outstanding capital
stock or other comparable ownership interest having ordinary voting power to
elect a majority of the board of directors of such corporation, partnership or
other Person (irrespective of whether at the time capital stock of any other
class or classes of such corporation, partnership or other Person shall or might
have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person, by such Person and one or more
other Subsidiaries of such Person, or by one or more other Subsidiaries of such
Person.
"Supermajority Lenders" means, at any time, Lenders owed or holding (a)
if the Revolving Loan Commitments shall not have been terminated, at least 66
2/3% of the aggregate of all Term B Loans then outstanding, all unfunded Term B
Loan Commitments, all Revolving Loans then outstanding, all Letter of Credit
Outstandings on such date, and all unfunded Revolving Loan Commitments or (b) if
the Revolving Loan Commitments shall have been terminated, at least 66 2/3% of
the aggregate amount of all Loans and L/C Advances then outstanding.
"Tangible Net Worth" means the consolidated net worth of the Borrower
and its Subsidiaries, including the aggregate outstanding face amount of the
Guaranteed Preferred Securities, after subtracting therefrom the aggregate
amount of any intangible assets of the Borrower and its Subsidiaries, including
goodwill, franchises, licenses, patents, trademarks, trade names, copyrights,
service marks and brand names.
"Taxes" is defined in Section 5.6.
"10 1/2% Senior Note Indenture" means that certain Indenture dated as
of May 16, 1996, as supplemented by the First Supplemental Indenture dated as of
August 1, 2000, between the Borrower and State Street Bank and Trust Company (as
successor trustee to Fleet National Bank), as Trustee.
"10 1/2% Senior Notes" means the $180,000,000 of 10 1/2% Senior Notes
due 2006 issued by the Borrower pursuant to the 10 1/2% Senior Note Indenture.
"Term B Lender" means each Lender that holds a Term B Loan Commitment
or a Term B Loan.
"Term B Loan" is defined in Section 2.1.1.
"Term B Loan Commitment" is defined in Section 2.1.1.
"Term B Loan Commitment Amount" means, on any date, $200,000,000, as
such amount may be reduced from time to time pursuant to Section 2.2.
"Term B Loan Commitment Termination Date" means the earliest of
29
(a) July 15, 2003;
(b) the date on which the Term B Loan Commitments of the Term
B Lenders are terminated in full or reduced to zero in accordance with
Section 2.2; and
(c) the date on which any Commitment/Loan Termination Event
occurs.
Upon the occurrence of any event described above, the Term B Loan
Commitments shall terminate automatically and without further action.
"Term B Prepayment Amount" is defined in Section 3.1.1.
"Term Note" means a promissory note of the Borrower payable to the
order of any Term B Lender, in the form of Exhibit A-2 hereto (as such
promissory note may be amended, endorsed or otherwise modified from time to
time), evidencing the aggregate Indebtedness of the Borrower to such Term B
Lender resulting from its outstanding Term B Loan, and also means all other
promissory notes accepted from time to time in substitution therefor or renewal
thereof.
"Term Percentage" means, relative to any Term B Lender, the percentage
set forth opposite its name on Schedule II under the caption "Term Percentage"
or as set forth in its Lender Assignment Agreement, as such percentage may be
adjusted from time to time pursuant to Lender Assignment Agreement(s) executed
by such Lender and its Assignee Lender(s) and delivered pursuant to Section
11.11.
"Third Party Indebtedness" means Indebtedness owed to and held by any
Person other than the Borrower or any of its Subsidiaries.
"Trust" means Calpine Capital Trust, Calpine Capital Trust II and
Calpine Capital Trust III, each a Delaware business trust.
"2000 Credit Agreement" means the Second Amended and Restated Credit
Agreement, dated as of May 23, 2000, as amended, among the Borrower, Scotia
Capital and the lenders party thereto.
"2003 Senior Notes" means the $2,550,000,000 of Second Priority Senior
Secured Floating Rate Notes due 2007, 8 1/2% Second Priority Senior Secured
Notes due 2010 and 8 3/4% Second Priority Senior Secured Notes due 2013, in each
case issued by the Borrower pursuant to the 2003 Senior Note Indenture.
"2003 Senior Note Indenture" means that certain Indenture dated as of
July 16, 2003 between the Borrower and Wilmington Trust Company, as Trustee.
"2002 Credit Agreement" is defined in the recitals.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
30
"United States" or "U.S." means the United States of America, its fifty
States and the District of Columbia.
"U.S. Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States of America.
"Welfare Plan" means a "welfare plan", as such term is defined in
Section 3(1) of ERISA.
"Wholly Owned Subsidiary" means a Subsidiary all the capital stock of
which (other than directors' qualifying shares) is owned by the Borrower or
another Wholly Owned Subsidiary.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and in
each Note, Borrowing Request, Continuation/Conversion Notice, Loan Document,
notice and other communication delivered from time to time in connection with
this Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references
in this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder (including under Section 8.2.4) shall be made, and all financial
statements required to be delivered hereunder or thereunder shall be prepared in
accordance with, generally accepted accounting principles ("GAAP") in effect in
the United States from time to time.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1. Commitments/Loans. On the terms and subject to the
conditions of this Agreement (including Article VI), each Lender severally
agrees to continue or make Loans pursuant to the Commitments described in this
Section 2.1.
SECTION 2.1.1. Term B Loan Commitment. On the Closing Date, each Term B
Lender severally will make loans in U.S. Dollars (relative to such Lender, its
"Term B Loan") to the Borrower equal to such Lender's Term Percentage of the
aggregate amount of the Borrowing of Term B Loans requested by the Borrower to
be made on such day. The Commitment of each Term B Lender described in this
Section 2.1.1 is herein referred to as its "Term B Loan Commitment". At 2:00
p.m. (San Francisco time) on the Term B Commitment Termination Date, the Term B
Loan Commitment shall terminate, and any portion of the Term B Loan Commitment
Amount that is not borrowed prior to such time shall be extinguished. No amounts
paid or prepaid with respect to Term B Loans may be reborrowed.
31
SECTION 2.1.2. Revolving Loan Commitment. From time to time on any
Business Day occurring prior to the Revolving Loan Commitment Termination Date,
each Revolving Lender severally will make loans in U.S. Dollars (relative to
such Lender, its "Revolving Loans") to the Borrower equal to such Lender's
Revolving Percentage of the aggregate amount of the Borrowing of Revolving Loans
requested by the Borrower to be made on such day. The Commitment of each
Revolving Lender described in this Section 2.1.2 to make Revolving Loans is
herein referred to as its "Revolving Loan Commitment". On the terms and subject
to the conditions hereof, the Borrower may from time to time borrow, prepay and
reborrow Revolving Loans.
SECTION 2.1.3. Commitment to Issue Letters of Credit. From time to time
on any Business Day, an Issuer will issue, and each Revolving Lender will
participate in, the Letters of Credit, in accordance with Article IV.
SECTION 2.1.4. Lenders Not Permitted or Required To Make Loans or Issue
or Participate in Letters of Credit Under Certain Circumstances. No Lender or
Issuer, as the case may be, shall be permitted or required to
(a) make its Term B Loan if, after giving effect thereto,
(i) the aggregate outstanding principal amount
of all Term B Loans of all Lenders would exceed the Term B
Loan Commitment Amount, or
(ii) the outstanding principal amount of the Term
B Loans of such Lender would exceed such Lender's Term
Percentage of the Term B Loan Commitment Amount;
(b) make any Revolving Loan if, after giving effect thereto,
(i) the aggregate outstanding principal amount
of all Revolving Loans of all Lenders, together with all
Letter of Credit Outstandings, would exceed the Revolving
Commitment Amount, or
(ii) the aggregate outstanding principal amount
of all Revolving Loans of such Lender, together with its
Revolving Percentage of all Letter of Credit Outstandings,
would exceed such Lender's Revolving Percentage of the
Revolving Commitment Amount; or
(c) issue (in the case of an Issuer) or participate in (in the
case of each Revolving Lender) any Letter of Credit prior to the
Revolving Loan Commitment Termination Date, if, after giving effect
thereto
(i) all Letter of Credit Outstandings together
with the aggregate outstanding principal amount of all
Revolving Loans of all Lenders would exceed the Revolving
Commitment Amount,
(ii) in the case of the issuance of any Foreign
Currency Letter of Credit, the Equivalent Amount of all
Foreign Currency Letter of Credit
32
Outstandings would exceed the Foreign Currency Letter of
Credit Commitment Amount, or
(iii) such Lender's Revolving Percentage of all
Letter of Credit Outstandings together with the aggregate
outstanding principal amount of all Revolving Loans of such
Lender would exceed such Lender's Revolving Percentage of the
then Revolving Commitment Amount.
SECTION 2.2. Reduction of Revolving Commitment Amount and Term B Loans.
The Revolving Commitment Amount and the Term B Loans are subject to reduction
and prepayment from time to time pursuant to this Section 2.2. Each prepayment
of the Loans under this Section 2.2 shall be accompanied by accrued interest to
the date of such prepayment on the amount prepaid.
SECTION 2.2.1. Optional Reduction. The Borrower may, from time to time
on any Business Day, make a voluntary prepayment of the Term B Loans in
accordance with Section 3.1.1. The Borrower may, from time to time on any
Business Day voluntarily reduce the Revolving Commitment Amount; provided,
however, that (i) all such reductions shall require at least three Business
Days' prior notice to the Agent and be permanent reductions of the Revolving
Commitment Amount, (ii) any partial reduction of the Revolving Commitment Amount
shall be in a minimum amount of $2,000,000 and in an integral multiple of
$500,000 and (iii) the last two sentences of Section 2.2.2(b) shall be
applicable to each such reduction.
SECTION 2.2.2. Mandatory Reductions.
(a) There shall be a mandatory prepayment of the outstanding
Term B Loans and reduction of the Revolving Commitment Amount by the
amounts and in the circumstances set forth in Section 3.1.1.
(b) Any prepayment of the outstanding Term B Loans and
reduction of the Revolving Commitment Amount described in clause (a)
shall be effective on the first Business Day following the Borrower's
receipt of any related Net Available Cash. All such amounts shall be
applied to the ratable (i) prepayment of the outstanding Term B Loans
and (ii) permanent reduction of the Revolving Commitment Amount. Any
such reduction of the Revolving Commitment Amount shall be accompanied
by prepayment of the Revolving Loans to the extent, if any, that the
sum of (i) the aggregate principal amount of all outstanding Revolving
Loans plus (ii) the aggregate Letter of Credit Outstandings exceeds the
amount of the Revolving Commitment Amount as so reduced, provided that
if the aggregate principal amount of Revolving Loans then outstanding
is less than the amount of such excess (because Letter of Credit
Outstandings constitute a portion thereof), the Borrower shall, to the
extent of the balance of such excess, deposit an amount in cash in a
cash collateral account, consistent with and subject to the procedures
set forth in Section 4.7 hereof, established with the Agent for the
benefit of the Lenders. The application of any prepayment pursuant to
Section 2.2 shall be made, first, to Base Rate Loans and, second, to
LIBO Rate Loans.
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SECTION 2.2.3. Post Default Application. After the occurrence and
during the continuance of an Event of Default, all optional and mandatory
prepayments of outstanding Term B Loans and reductions of the Revolving
Commitment Amount under Section 2.2.1 and Section 2.2.2 shall be applied to the
pro rata prepayment of all outstanding Revolving Loans and Term B Loans and
cash-collateralization of any Letters of Credit outstanding hereunder.
SECTION 2.3. Borrowing Procedure. By delivering a Borrowing Request to
the Agent on or before 10:00 a.m., San Francisco time, on a Business Day, an
Authorized Officer of the Borrower may from time to time irrevocably request, on
not less than three days, in the case of LIBO Rate Loans, or one day in the case
of Base Rate Loans, nor more than five Business Days' notice, that a Borrowing
be made in a minimum amount of $2,000,000 or in the unused amount of the
applicable Commitment. The Agent shall promptly transmit the information in the
Borrower's request to each applicable Lender. On the terms and subject to the
conditions of this Agreement, each Borrowing shall be comprised of the type of
Loans, and shall be made on the Business Day, specified in such Borrowing
Request. On or before 11:00 a.m. (San Francisco time) on the Business Day
specified in such Borrowing Request each applicable Lender shall deposit with
the Agent same day funds in an amount equal to such Lender's applicable
Percentage of the requested Borrowing. Such deposit will be made to an account
which the Agent shall specify from time to time by notice to the Lenders. To the
extent funds are received from the applicable Lenders, the Agent shall make such
funds available to the Borrower by wire transfer to the accounts the Borrower
shall have specified in its Borrowing Request. No Lender's obligation to make
any Loan or L/C Advance shall be affected by any other Lender's failure to make
any Loan or L/C Advance.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/ Conversion Notice to the Agent on or before 10:00 a.m., San
Francisco time, on a Business Day, an Authorized Officer of the Borrower may
from time to time irrevocably elect, on not less than three nor more than five
Business Days' notice that all, or any portion in an aggregate minimum amount of
$2,000,000 of any Loans be, in the case of Base Rate Loans, converted into LIBO
Rate Loans or, in the case of LIBO Rate Loans, be converted into a Base Rate
Loan or continued as a LIBO Rate Loan (in the absence of delivery of a
Continuation/Conversion Notice with respect to any LIBO Rate Loan at least three
Business Days before the last day of the then current Interest Period with
respect thereto, such LIBO Rate Loan shall, on such last day, automatically
convert to a Base Rate Loan); provided, however, that (i) each such conversion
or continuation shall be pro rated among the applicable outstanding Loans of all
Lenders, and (ii) no portion of the outstanding principal amount of any Loans
may be continued as, or be converted into, LIBO Rate Loans when any Default has
occurred and is continuing. The Agent shall promptly transmit the information in
each Continuation/Conversion Notice to each Lender.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the obligation of the Borrower to repay such
LIBO Rate Loan shall nevertheless be to such Lender for the account of such
foreign branch, Affiliate or international banking facility; provided, further,
that each Lender shall use reasonable efforts in making any such election to
minimize the costs payable by the Borrower
34
hereunder with respect to any Loan, Commitment or Letter of Credit. In addition,
the Borrower hereby consents and agrees that, for purposes of any determination
to be made for purposes of Section 5.1, 5.2, 5.3 or 5.4, it shall be
conclusively assumed that each Lender elected to fund all LIBO Rate Loans by
purchasing Dollar deposits in its LIBOR Office's interbank eurodollar market.
SECTION 2.6. Notes; Register. Unless the Agent shall have been advised
by a Lender that it does not want to receive a Note, each Lender's Loans under
each of its Commitments shall be evidenced by a Note payable to the order of
such Lender in a maximum principal amount equal to such Lender's applicable
Percentage of the original applicable Commitment Amount. Whether or not a Loan
is evidenced by a Note, the Borrower hereby designates Agent to serve as its
agent, solely for the purposes of this Section, to maintain a register (the
"Register") on which Agent will record the name and address of each Lender, the
Commitments and Loans and each repayment in respect of the principal amount of
the Loans of each Lender from time to time. No payment with respect to the
outstanding principal and interest applicable for each of the Loans shall be
made to any Person other than the Person identified in such Register as the
Lender. Failure to make any such recordation or any errors in such recordation
shall not affect the Borrower's obligations in respect of such Loans. The
entries in the Register shall be conclusive and binding on the Borrower absent
manifest error. Upon reasonable notice and during normal business hours,
representatives of the Borrower may from time to time inspect the Register. The
Borrower hereby irrevocably authorizes each Lender to make (or cause to be made)
appropriate notations on the grid attached to such Lender's Notes (or on any
continuation of such grid), which notations, if made, shall evidence, inter
alia, the date of, the outstanding principal of, and the interest rate and
Interest Period applicable to the Loans and L/C Advances evidenced thereby. Such
notations shall be conclusive and binding on the Borrower absent manifest error;
provided, however, that the failure of any Lender to make any such notations
shall not limit or otherwise affect any Obligations of the Borrower or any other
Obligor.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments. The Borrower shall repay in
full the unpaid principal amount of each Loan upon the applicable Stated
Maturity Date therefor.
SECTION 3.1.1. Payment Terms. Prior to the Stated Maturity Date of each
Loan, the Borrower
(a) shall repay the Term B Loans of each Term B Lender in 16
consecutive quarterly installments, commencing on October 15, 2003 and
ending on July 15, 2007, each of which shall be in an amount equal to
such Lender's Term Percentage multiplied by $500,000; provided that the
final installment shall be in an amount equal to such Lender's Term
Percentage multiplied by $192,500,000;
(b) may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the outstanding principal
amount of any Loans; provided, however, that
35
(i) any such prepayment shall be made pro rata
among Loans of the same type and, if applicable, having the
same Interest Period, of all Lenders;
(ii) no such prepayment of any LIBO Rate Loan may
be made on any day other than the last day of the Interest
Period for such Loan, unless the Borrower also pays all losses
and expenses (for which the Borrower has received written
notice, including calculations in reasonable detail) as a
result of such prepayment as provided in Section 5.4;
(iii) each such voluntary prepayment shall require
at least three but no more than five Business Days' prior
written notice to the Agent specifying whether such prepayment
is of Revolving Loans or (subject to clause (v) below) Term B
Loans or both;
(iv) each such voluntary partial prepayment shall
be in an aggregate minimum amount of $2,000,000; and
(v) no voluntary prepayment of the Term B Loans
shall be permitted unless the Revolving Commitment Amount is
reduced pursuant to Section 2.2.1 by at least a ratable
amount;
(c) shall, upon receipt by the Borrower or any Subsidiary of
Net Available Cash from any Asset Sale, Monetization, Insurance Event
or incurrence of secured Indebtedness permitted under Section 8.2.2(l)
or (m) (excluding the CES Credit Facility), apply an amount equal to
100% of such Net Available Cash pro rata to prepayments of the
outstanding Term B Loans and the reductions of the Revolving Loan
Commitments (and to any related prepayments of the then outstanding
Revolving Loans and to cash collateralization the Letters of Credit),
in each case as contemplated under Section 2.2.2; provided that
conversion of any non-cash proceeds realized from any Asset Sale,
Monetization or Insurance Event to cash (including both the principal
amount of such non-cash proceeds and any interest attributable thereto)
shall be deemed to be Net Available Cash upon such conversion and
applied pursuant to this clause (c); provided, further, that no such
prepayments and reductions shall be required as a consequence of:
(i) without duplication of any other clause of
this paragraph (c), any Asset Sale or Monetization by the
Borrower of the Gilroy Receivable or any Asset Sale of
uninstalled turbines or equipment, to the extent that an
amount equal to the Net Available Cash with respect thereto is
applied within 355 days of the consummation of such Asset Sale
or Monetization (A) to make Restricted Capital Payments in
respect of Repayable Restricted Capital pursuant to Section
8.2.6(b)(B) or (B) to make Capital Expenditures to the extent
permitted under Section 8.2.7 (subject, however, to the Capex
Requirement); provided that to the extent any such Net
Available Cash is not so applied during such 355-day period,
the Borrower shall make the mandatory prepayments and
commitment reductions required by this paragraph (c) by the
close of business on the last day of such 355-day period in an
aggregate amount equal to the portion of such Net Available
Cash not so applied; or
36
(ii) without duplication of any other clause of
this paragraph (c), any Asset Sale or Monetization of, or
Insurance Event with respect to, assets that are not
Designated Assets or CES Assets, to the extent that an amount
equal to the Net Available Cash with respect thereto is
applied within 355 days after the consummation of such Asset
Sale or Monetization, or the receipt by the Borrower of the
Net Available Cash with respect to such Insurance Event, to
make Capital Expenditures to the extent permitted under
Section 8.2.7 (subject, however, to the Capex Requirement);
provided that to the extent any such Net Available Cash is not
so applied during such 355-day period, the Borrower shall make
the mandatory prepayments and commitment reductions required
by this paragraph (c) by the close of business on the last day
of such 355-day period in an aggregate amount equal to the
portion of such Net Available Cash not so applied; and
provided, further, that to the extent that at any time the
aggregate amount of Net Available Cash described in this
clause (ii) that has not been applied to make Capital
Expenditures in accordance with this clause (ii) shall exceed
the aggregate amount of Capital Expenditures then permitted to
be made with such Net Available Cash under Section 8.2.7
during the applicable 355-day period described above, an
amount equal to such excess shall, immediately thereafter, be
applied in accordance with the immediately preceding proviso;
or
(iii) without duplication of any other clause of
this paragraph (c), any Permitted Sale; or
(iv) without duplication of any other clause of
this paragraph (c), any sale, transfer, lease, contribution or
conveyance by the Borrower or any of its Subsidiaries to any
Person of an interest in a PUD pursuant to an agreement under
which such Person commits to develop or to provide financing
and/or funding to the Borrower or such Subsidiary solely for
the development of such PUD; provided that (A) the Fair Market
Value of such PUD interest (determined as of the date such
agreement is entered into) is less than $25,000,000, (B) the
aggregate Fair Market Value of all PUD interests (determined,
in the case of each PUD, as of the date the agreement with
respect to such PUD is entered into) sold, transferred,
leased, contributed or conveyed as set forth in this clause
(iv) is less than $100,000,000, (C) the Borrower or such
Subsidiary shall retain legal ownership of the entirety of
such PUD (except to the extent of the interest so sold,
transferred, leased, contributed or conveyed) and (D) the
Borrower shall have delivered to the Agent a certificate of an
Authorized Officer of the Borrower as to the satisfaction of
the conditions set forth in clauses (A) and (B) above (it
being understood that the Borrower shall, before or within a
reasonable time after consummation of the relevant
transaction, deliver to the Agent such other information in
connection therewith as the Agent may reasonably request); or
(v) without duplication of any other clause of
this paragraph (c), any Asset Sale or Monetization of Domestic
Gas Reserves, Canadian Gas Reserves or geothermal energy
assets, to the extent that an amount equal to the Net
Available Cash with respect thereto is applied within 355 days
after the consummation of such Asset Sale or Monetization (A)
to make Capital Expenditures to the extent
37
permitted under Section 8.2.7 (subject, however, to the Capex
Requirement) or (B) to purchase additional Domestic Gas
Reserves, Canadian Gas Reserves or geothermal energy assets,
which additional assets (I) become Collateral under the
Security Documents (in the case of any such Domestic Gas
Reserves and domestic geothermal energy assets) or (II) are
owned by CCNGP (in the case of any such Canadian Gas Reserves
and Canadian geothermal energy assets); provided that to the
extent any such Net Available Cash is not so applied during
such 355-day period, the Borrower shall make the mandatory
prepayments and commitment reductions required by this
paragraph (c) by the close of business on the last day of such
355-day period in an aggregate amount equal to the portion of
such Net Available Cash not so applied; and provided further
that the sum of (x) the net proceeds of all such Asset Sales
of Domestic Gas Reserves and Canadian Gas Reserves and (y) the
gross proceeds of all such Asset Sales of geothermal energy
assets under this clause (v) shall not exceed $50,000,000 in
the aggregate; or
(vi) without duplication of any other clause of
this paragraph (c), any Asset Sale or Monetization of CES
Assets permitted under Section 8.2.10(c)(v) and any incurrence
of Non-Recourse Debt by CES permitted under Section 8.2.2(m)
(exclusive of the CES Credit Facility), to the extent that an
amount equal to the Net Available Cash with respect thereto is
applied within 355 days after the consummation of such Asset
Sale or Monetization, or the incurrence of such Indebtedness,
to make Capital Expenditures to the extent permitted under
Section 8.2.7 (subject, however, to the Capex Requirement);
provided that to the extent any such Net Available Cash is not
so applied during such 355-day period, the Borrower shall make
the mandatory prepayments and commitment reductions required
by this paragraph (c) by the close of business on the last day
of such 355-day period in an aggregate amount equal to the
portion of such Net Available Cash not so applied; and
provided, further, that to the extent that at any time the
aggregate amount of Net Available Cash with respect to any
Asset Sale or Monetization described in this clause (vi) that
has not been applied to make Capital Expenditures in
accordance with this clause (vi) shall exceed the aggregate
amount of Capital Expenditures then permitted to be made with
such Net Available Cash under Section 8.2.7 during the
applicable 355-day period described above, an amount equal to
such excess shall, immediately thereafter, be applied in
accordance with the immediately preceding proviso; or
(vii) without duplication of any other clause of
this paragraph (c), any Asset Sale of any Canadian Gas
Reserves to a royalty trust or income fund, to the extent that
an amount equal to the Net Available Cash with respect thereto
is applied within 355 days after the consummation of such
Asset Sale (A) to repurchase or prepay the CCEFII Notes, (B)
to make Capital Expenditures to the extent permitted under
Section 8.2.7 (subject, however, to the Capex Requirement) or
(C) to purchase additional Domestic Gas Reserves, Canadian Gas
Reserves or geothermal energy assets, which additional assets
(I) become Collateral under the Security Documents (in the
case of any such Domestic Gas Reserves and domestic geothermal
energy assets) or (II) are owned by CCNGP
38
(in the case of any such Canadian Gas Reserves and Canadian
geothermal energy assets); provided that to the extent any
such Net Available Cash is not so applied during such 355-day
period, the Borrower shall make the mandatory prepayments and
commitment reductions required by this paragraph (c) by the
close of business on the last day of such 355-day period in an
aggregate amount equal to the portion of such Net Available
Cash not so applied; and provided further that (x) the
aggregate Fair Market Value of all Canadian Gas Reserves
subject to such Asset Sales is less than Cdn$300,000,000 and
(y) the Borrower and/or one or more of its Subsidiaries shall
at all times own not less than 25% of the units issued by such
royalty trust or income fund (subject to dilution in
accordance with the terms of such royalty trust or income
fund) and such units shall be (I) if owned by the Borrower,
pledged to the Collateral Trustee (for the benefit of, among
others, the Lenders hereunder), (II) owned by a Pledged Entity
or (III) if material adverse tax consequences to the Borrower
or the Lenders would arise out of or result from the taking of
either of the actions set forth in clauses (I) or (II) above,
owned by a Subsidiary of a Pledged Entity; and
(d) shall, immediately upon any acceleration of any Loans or
either Commitment Termination Date pursuant to Section 9.2 or Section
9.3, repay all Loans, unless, pursuant to Section 9.3, only a portion
of all Loans is so accelerated.
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 5.4, and, in the case
of clause (c) above, shall be made by the close of business of the day of
receipt or deemed receipt of the relevant Net Available Proceeds. No voluntary
prepayment of principal of any Revolving Loans shall cause a reduction in the
Revolving Commitment Amount.
Notwithstanding anything to the contrary in Section 2.2.2 or 3.1.1, with respect
to the amount of any mandatory prepayment described in Section 2.2.2 or 3.1.1
that is allocated to Term B Loans (such amount, the "Term B Prepayment Amount")
at any time when Revolving Loan Commitments remain outstanding, the Borrower
will, in lieu of applying such amount to the prepayment of the Term B Loans, on
the date specified for such prepayment, give the Agent telephonic notice
(promptly confirmed in writing) requesting that the Agent prepare and provide to
each Term B Lender a notice (each, a "Prepayment Option Notice") as described
below. As promptly as practicable after receiving such notice from the Borrower,
the Agent will send to each Term B Lender a Prepayment Option Notice, which
shall be in the form of Exhibit G, and shall include an offer by the Borrower to
prepay on the date (each a "Mandatory Prepayment Date") that is ten calendar
days after the date of the Prepayment Option Notice (but in no event later than
the date which is 365 days after the applicable Asset Sale, Monetization or
Insurance Event) the relevant Term B Loans of such Lender by an amount equal to
the portion of the Term B Prepayment Amount indicated in such Lender's
Prepayment Option Notice as being applicable to such Lender's Term B Loans. On
the Mandatory Prepayment Date, (i) the Borrower shall pay to the relevant Term B
Lenders the aggregate amount necessary to prepay that portion of the outstanding
Term B Loans in respect of which such Lenders have accepted prepayment as
described above and (ii) the Borrower shall permanently reduce the Revolving
Loan Commitments (and prepay Revolving Loans and cash collateralize the Letters
of Credit) as
39
contemplated under Section 2.2.2 by an amount equal to the portion of the Term B
Prepayment Amount not accepted by the relevant Term B Lenders.
SECTION 3.1.2. Post Default Application of Payments. Notwithstanding
any provision of Sections 2.2.2 or 3.1.1 to the contrary, after the occurrence
and during the continuance of an Event of Default, all optional and mandatory
payments under Section 3.1.1 shall be applied first to pay any fees and expenses
then due and owing hereunder, second to the pro rata payment of accrued and
unpaid interest on all Loans hereunder and third as set forth in Section
2.2.2(b).
SECTION 3.2. Interest Provisions. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this Section 3.2.
SECTION 3.2.1. Rates. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, the Borrower may elect that Loans
comprising a Borrowing accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a
Base Rate Loan, equal to the sum of the Alternate Base Rate from time
to time in effect plus the Applicable Margin; and
(b) on that portion maintained as a LIBO Rate Loan,
during each Interest Period applicable thereto, equal to the sum of the
LIBO Rate (Reserve Adjusted) for such Interest Period plus the
Applicable Margin.
The "LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be
made, continued or maintained as, or converted into, a LIBO Rate Loan for any
Interest Period, a rate per annum (rounded upwards, if necessary, to the nearest
1/16 of 1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
(Reserve Adjusted) -------------------------------
1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be determined by the Agent on the basis of the LIBOR Reserve Percentage in
effect on, and the applicable rates furnished to and received by the Agent from
Scotia Capital, two Business Days before the first day of such Interest Period.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans,
the rate of interest equal to the average (rounded upwards, if necessary, to the
nearest 1/16 of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered to Scotia Capital's LIBOR Office in the
London interbank market as at or about 11:00 a.m. London time two Business Days
prior to the beginning of such Interest Period for delivery on the first day of
such Interest Period, and in an amount approximately equal to the amount of
Scotia Capital's LIBO Rate Loan and for a period approximately equal to such
Interest Period.
"LIBOR Reserve Percentage" means, for each day of any Interest Period
for LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to
the maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and
40
taking into account any transitional adjustments or other scheduled changes in
reserve requirements) specified from time to time under regulations issued from
time to time by the F.R.S. Board and then applicable to assets or liabilities
consisting of and including "Eurocurrency Liabilities", as currently defined in
Regulation D of the F.R.S. Board.
All LIBO Rate Loans shall bear interest from and including the first
day of the applicable Interest Period to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such LIBO
Rate Loan.
SECTION 3.2.2. Post-Maturity Rates. After the date any principal amount
of any Loan is due and payable (whether on the applicable Stated Maturity Date,
upon acceleration or otherwise), or after any other monetary Obligation of the
Borrower shall have become due and payable, the Borrower shall pay, but only to
the extent permitted by law, interest (after as well as before judgment) on such
amounts at a rate per annum equal to the Alternate Base Rate plus the Applicable
Margin plus a margin of 2%.
SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any optional or required payment or
prepayment, in whole or in part, of principal outstanding on such Loan
being prepaid;
(c) with respect to Base Rate Loans, on each Quarterly Payment
Date occurring after the Closing Date;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months, at the end of the third month of such Interest Period);
(e) with respect to any Base Rate Loans converted into LIBO
Rate Loans on a day when interest would not otherwise have been payable
pursuant to clause (c), on the date of such conversion; and
(f) on that portion of any Loans the Stated Maturity Date of
which is accelerated pursuant to Section 9.2 or Section 9.3,
immediately upon such acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the applicable Stated Maturity Date, upon acceleration or
otherwise) shall be payable upon demand.
SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth in
this Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. Commitment Fees. The Borrower agrees to pay to the Agent
for the account of each Revolving Lender, for the period (including any portion
thereof when any of its Commitments are suspended by reason of the Borrower's
inability to satisfy any condition of
41
Article VI) commencing on the Closing Date and continuing through the Revolving
Loan Commitment Termination Date, a commitment fee (the "Commitment Fee") at the
rate of 0.50% per annum, calculated on such Lender's Revolving Percentage of the
average daily unused portion of the Revolving Commitment Amount. Commitment Fees
shall be payable by the Borrower in arrears on each Quarterly Payment Date,
commencing with the first such day following the Closing Date, and on the
Revolving Loan Commitment Termination Date.
SECTION 3.3.2. Fees. The Borrower agrees to pay to the Agent and the
Lenders for their own accounts the fees described in the Fee Letters, at the
times required in such letter.
SECTION 3.3.3. Letter of Credit Fee. The Borrower agrees to pay to the
Agent, for the account of the Revolving Lenders, for each Letter of Credit for
the period from and including the date of the issuance of such Letter of Credit
to (and including) the date upon which (or on the next succeeding Business Day
upon which) such Letter of Credit expires or is returned to the Issuer that
issued such Letter of Credit, a fee, in Dollars, on the average daily stated
amount of such Letter of Credit (or the Equivalent Amount thereof with respect
to Foreign Currency Letters of Credit) calculated at a per annum rate equal to
the Applicable Margin for LIBO Rate Loans in effect from time to time. Such fee
shall be payable by the Borrower in arrears on each Quarterly Payment Date, and
on the date of termination or expiry of the last Letter of Credit outstanding
hereunder (for any period then ending for which such fee shall not theretofore
have been paid), commencing on the first such date after the issuance of such
Letter of Credit.
SECTION 3.3.4. Letter of Credit Issuing Fee. The Borrower agrees to pay
to the Agent, for the account of each Issuer, an issuing fee, in Dollars, for
each Letter of Credit issued by such Issuer for the period from and including
the date of issuance of such Letter of Credit to (and including) the date upon
which such Letter of Credit expires or is returned to the Issuer that issued
such Letter of Credit at such rates as may be agreed in writing by the Borrower
and the Issuers from time to time. Such fee shall be payable by the Borrower in
arrears on each Quarterly Payment Date and on the date of termination or expiry
of the last Letter of Credit outstanding hereunder for any period then ending
for which such fee shall not theretofore have been paid, commencing on the first
such date after the issuance of such Letter of Credit. For any Foreign Currency
Letter of Credit, such issuing fee shall be calculated on the Equivalent Amount
of the average daily stated amount thereof.
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.1. Issuance Requests. By delivering to the Agent and an
Issuer an Issuance Request on or before 12:00 noon, New York time, the Borrower
may request, from time to time prior to the Revolving Loan Commitment
Termination Date and on not less than three nor more than ten Business Days'
notice, that such Issuer issue an irrevocable standby letter of credit, in
Dollars, Canadian Dollars or Sterling (provided that the Equivalent Amount of
the aggregate Stated Amount of all Foreign Currency Letters of Credit after
giving effect to such issuance shall not exceed the Foreign Currency Letter of
Credit Commitment Amount) and in such form as may be requested by the Borrower
and approved by such Issuer (each, together with the Existing Letters of Credit
and any Foreign Currency Letters of Credit, a "Letter of Credit"), in support of
42
the general corporate purposes of the Borrower and its Subsidiaries (including
credit support by the Borrower for gas and power contracts for CES, Calpine
Energy Services Canada Partnership and Calpine Energy Services UK Limited) and
which are described in such Issuance Request, provided that no Letter of Credit
may be used (i) to finance acquisitions (other than acquisitions of equipment,
sites and property in the ordinary course of the Borrower and its Subsidiaries'
business, but in no event may Letters of Credit be used to finance acquisitions
of power projects, reserves of geothermal steam and fluids and material gas
reserves) or make any Investments in any third parties (other than
Subsidiaries), directly or indirectly, through the Borrower or any of its
Subsidiaries or Affiliates or (ii) to defease, repurchase or prepay any
Subordinated Debt or any Senior Notes; and provided, further, that Letters of
Credit shall only be used to secure or support obligations (other than for the
deferred purchase price of property) entered into in the ordinary course of
business of the Borrower and its Subsidiaries. Upon receipt of an Issuance
Request, the Agent shall promptly notify the Revolving Lenders thereof. Each
Letter of Credit shall by its terms:
(a) be issued in a Stated Amount which
(i) is at least the Equivalent Amount of
$500,000 or such lesser amount as may be agreed by the Agent;
(ii) does not exceed (or would not exceed) the
then Revolving Commitment Availability;
(b) be stated to expire on a date (its "Stated Expiry Date")
no later than the earlier of (i) one year from its date of issuance and
(ii) five days prior to the Stated Maturity Date for Revolving Loans;
provided, however, that a Letter of Credit may provide that if it is
not renewed prior to its Stated Expiry Date, it may be drawn by the
beneficiary thereof; and
(c) on or prior to its Stated Expiry Date
(i) terminate immediately upon notice to the
Issuer thereof from the beneficiary thereunder that all
obligations covered thereby have been terminated, paid, or
otherwise satisfied in full and surrender by the beneficiary
of the Letter of Credit to such Issuer, and
(ii) reduce in part immediately and to the extent
the beneficiary thereunder has notified the Issuer thereof
that the obligations covered thereby have been paid or
otherwise satisfied in part and that the Letter of Credit may
be reduced.
SECTION 4.2. Issuances and Extensions. On the terms and subject to the
conditions of this Agreement (including Article VI), the Issuer to whom notice
was given under Section 4.1 shall issue Letters of Credit, in accordance with
the Issuance Requests made therefor. Such Issuer will make available the
original of each Letter of Credit which it issues in accordance with the
Issuance Request therefor to the beneficiary thereof (and will notify the Agent
of any issuance or amendment and such notice will be accompanied by a copy of
each Letter of Credit issued and any amendment thereto) and will notify the
beneficiary under any Letter of Credit of
43
any extension of the Stated Expiry Date thereof. The Agent will promptly notify
the Revolving Lenders of issuances and amendments and, if requested in writing
by a Revolving Lender, will provide copies of issuances and amendments to such
requesting Revolving Lender.
SECTION 4.3. Expenses. The Borrower agrees to pay to the Agent for the
account of each Issuer the standard charges of such Issuer in connection with
the issuance, maintenance, modification (if any) and administration of each
Letter of Credit issued by such Issuer upon demand from time to time.
SECTION 4.4. Other Revolving Lenders' Participation. Each Letter of
Credit issued pursuant to Section 4.2 shall, effective upon its issuance and
without further action, be issued on behalf of all Revolving Lenders (including
the Issuer thereof) pro rata according to their respective Revolving
Percentages. Each Revolving Lender shall, to the extent of its Revolving
Percentage, be deemed irrevocably to have participated in the issuance of such
Letter of Credit and shall be responsible to pay promptly to the Issuer thereof
such Lender's Revolving Percentage of any unreimbursed drawings under a Letter
of Credit which have not been reimbursed by the Borrower in accordance with
Section 4.5, or which have been reimbursed by the Borrower but must be returned,
restored or disgorged by the Issuer thereof for any reason, and each Revolving
Lender shall, to the extent of its Revolving Percentage, be entitled to receive
from the Agent a ratable portion of the letter of credit fees received by the
Agent pursuant to Section 3.3.3, with respect to each Letter of Credit. Each
Revolving Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this Section 4.4 in respect of Letters of Credit
issued or amended while such Revolving Lender remains a party to this Agreement
is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment of any Letter of Credit or the occurrence
and continuation of a Default or Event of Default or reduction or termination of
the Revolving Loan Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. In the event that
the Borrower shall fail to reimburse the Issuer thereof, or if for any reason
Revolving Loans shall not be made to fund any Reimbursement Obligation, all as
provided in Section 4.5 and Section 4.6 and in an amount equal to the amount of
any drawing honored by such Issuer under a Letter of Credit issued by it, or in
the event such Issuer must for any reason return or disgorge such reimbursement,
such Issuer shall promptly notify each Revolving Lender of the unreimbursed
amount of such drawing and of such Revolving Lender's respective participation
therein. Each Revolving Lender shall make available to such Issuer, whether or
not any Default shall have occurred and be continuing, an amount equal to its
respective participation in same day or immediately available funds at the
office of such Issuer specified in such notice not later than 2:00 p.m., New
York time, on the Business Day (under the laws of the jurisdiction of such
Issuer) after the date notified by such Issuer. In the event that any Revolving
Lender fails to make available to an Issuer the amount of such Revolving
Lender's participation in such Letter of Credit as provided herein, such Issuer
shall be entitled to recover such amount on demand from such Revolving Lender
together with interest at the daily average Federal Funds Rate for three
Business Days and thereafter at the Alternate Base Rate plus 2%. Nothing in this
Section shall be deemed to prejudice the right of any Revolving Lender to
recover from any Issuer any amounts made available by such Revolving Lender to
an Issuer pursuant to this Section in the event that it is determined by a court
of competent jurisdiction that the payment with respect to a Letter of Credit by
the Issuer thereof in respect of which payment was made by such Revolving Lender
constituted gross
44
negligence or willful misconduct on the part of such Issuer. Each Issuer shall
distribute to each Revolving Lender which has paid all amounts payable by it
under this Section with respect to any Letter of Credit issued by such Issuer
such Lender's Revolving Percentage of all payments received by such Issuer from
the Borrower in reimbursement of drawings honored by such Issuer under such
Letter of Credit when such payments are received.
SECTION 4.5. Disbursements. Each Issuer will notify the Borrower and
the Agent promptly of the presentment for payment of any Letter of Credit issued
by it, together with notice of the date (a "Disbursement Date") such payment
shall be made (each such payment, a "Disbursement"). Unless otherwise agreed by
the applicable Issuer and the Borrower, drawings under any Letter of Credit
issued under Section 4.1 shall be made on sight. Subject to the terms and
provisions of such Letter of Credit, each Issuer shall make such payment to the
beneficiary (or its designee) of such Letter of Credit. Prior to 2:00 p.m., New
York time, on the Disbursement Date, the Borrower will reimburse each Issuer for
all amounts in the currency which it has disbursed under the Letter of Credit or
will notify such Issuer that it elects to make such reimbursement by requesting
the Revolving Lenders to make a Revolving Loan in the Equivalent Amount of such
required reimbursement. If Borrower elects to make such reimbursement by
requesting a Revolving Loan in such amount and the conditions precedent in
Article VI shall have been satisfied, the Revolving Lenders shall fund such
Reimbursement Obligation by making Base Rate Loans in the appropriate Equivalent
Amounts in accordance with Section 2.3. To the extent an Issuer is not
reimbursed in full on the date payment is made under a Letter of Credit, the
Borrower's Reimbursement Obligation shall accrue interest at the Alternate Base
Rate plus the Applicable Base Rate Margin for two Business Days and thereafter
at the Post-Maturity Rate described in Section 3.2.2, payable on demand, until
reimbursed in full. In the event an Issuer is not reimbursed by the Borrower on
any Disbursement Date, or if an Issuer must for any reason return or disgorge
such reimbursement, the Revolving Lenders (including such Issuer) shall fund the
Reimbursement Obligation therefor by making, on the next Business Day, Loans
(or, if the Revolving Loan Commitments shall no longer then be in effect,
advances ("L/C Advances") that are payable on demand and have the same
characteristics as Loans and which shall be Obligations hereunder) in the
appropriate Equivalent Amounts which are Base Rate Revolving Loans (or L/C
Advances bearing interest by reference to the Base Rate) (except that such
Revolving Loans or L/C Advances shall be made upon demand by the Agent rather
than upon notice by the Borrower and shall be made, notwithstanding anything in
this Agreement to the contrary, without regard to the satisfaction of the
conditions precedent to the making of Revolving Loans set forth in Article VI of
this Agreement and notwithstanding any termination of the Commitments). Each
Revolving Lender's obligation to make Revolving Loans or L/C Advances in the
amount of its Revolving Percentage of any unreimbursed amounts outstanding under
a Letter of Credit pursuant hereto is several, and not joint or joint and
several. Except as specifically noted herein, all terms and provisions that are
applicable to Revolving Loans under this Agreement shall be equally applicable
to L/C Advances. For example, and without limitation, the provisions of Sections
3.1.1(c), 3.2.2, 3.2.3, 5.5, 5.6, 5.8, 5.9, 7.13, 8.2.10(c), 9.1.1, 10.5,
11.1(c), 11.4(a) and 11.11 shall equally apply to L/C Advances as well as Loans.
SECTION 4.6. Reimbursement. The Borrower's obligation (a "Reimbursement
Obligation") under Section 4.5 to reimburse an Issuer with respect to each
disbursement (including interest thereon), and each Revolving Lender's
obligation to make participation
45
payments in each drawing which has not been reimbursed by the Borrower, shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim, or defense to payment which the Borrower may have or
have had against any Revolving Lender or any beneficiary of a Letter of Credit,
including any defense based upon the occurrence of any Default, any draft,
demand or certificate or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient, the failure of any
disbursement to conform to the terms of the applicable Letter of Credit (if, in
such Issuer's good faith opinion, such disbursement is determined to be
appropriate) or any non-application or misapplication by the beneficiary of the
proceeds of such disbursement, or the legality, validity, form, regularity, or
enforceability of such Letter of Credit; provided, however, that nothing herein
shall adversely affect the right of the Borrower to commence any proceeding
against an Issuer for any wrongful disbursement made by such Issuer under a
Letter of Credit as a result of acts or omissions constituting gross negligence
or willful misconduct on the part of such Issuer.
SECTION 4.7. Cash Collateral. In the circumstances set forth in Section
2.2.2(b) or 3.1.1, or upon the occurrence and during the continuation of any
Event of Default described in Section 9.1.9, or, at the election of the Agent
acting on instructions from the Required Revolving Lenders, upon notice to the
Borrower after the occurrence and during the continuation of any other Event of
Default, an amount equal to that portion of Letter of Credit Outstandings
attributable to outstanding and undrawn Letters of Credit (or a lesser amount,
if applicable, required pursuant to Section 2.2.2(b)) shall be deemed to have
been paid or disbursed by the Issuers under the Letters of Credit
(notwithstanding that such amount may not in fact have been paid or disbursed),
and, upon notification by the Issuers to the Agent and the Borrower of its
obligations under this Section, the Borrower shall be immediately obligated to
reimburse the Agent the amount deemed to have been so paid or disbursed by the
Issuers. Any amounts so received by the Agent from the Borrower pursuant to this
Section shall be held as collateral security for the repayment of the Borrower's
obligations in connection with the Letters of Credit. At any time when such a
Letter of Credit shall terminate and all L/C Advances and Obligations of the
Borrower to the Issuers in respect of such Letter of Credit are either
terminated or paid or reimbursed to the Revolving Lenders and the Issuers in
full, the Obligations of the Borrower under this Section with respect to such
Letter of Credit shall also terminate (subject, however, to reinstatement in the
event any payment in respect of such Letter of Credit is recovered in any manner
from any Issuer or Revolving Lender), and the Agent will return to the Borrower
the aggregate amount deposited by the Borrower with the Agent in respect of such
Letter of Credit and not theretofore applied by the Agent to any Reimbursement
Obligation.
At such time when all Events of Default shall have been cured or
waived, the Agent shall return to the Borrower all amounts then on deposit with
it pursuant to this Section. All amounts on deposit pursuant to this Section
shall, until their application to any Reimbursement Obligation or their return
to the Borrower, as the case may be, bear interest at the daily average Federal
Funds Rate from time to time in effect (net of the costs of any reserve
requirements, in respect of amounts on deposit pursuant to this Section,
pursuant to F.R.S. Board Regulation D), which interest shall be held by the
Agent as additional collateral security for the repayment of the Borrower's
Obligations in connection with the Letters of Credit issued by the Issuers.
SECTION 4.8. Nature of Reimbursement Obligations. The Borrower shall
assume all risks of the acts, omissions, or misuse of any Letter of Credit by
the beneficiary thereof. Neither
46
any Issuer (except to the extent of its own gross negligence or willful
misconduct) nor any Revolving Lender shall be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness, or
legal effect of any document submitted by any party in connection with
the application for and issuance of a Letter of Credit, even if it
should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent, or forged;
(b) the form, validity, sufficiency, accuracy, genuineness, or
legal effect of any instrument transferring or assigning or purporting
to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof in whole or in part, which may prove to
be invalid or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions, or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
telex, or otherwise;
(e) any error, omission, interruption, loss or delay in the
transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document
required in order to make a Disbursement thereunder) or of the proceeds
thereof;
(f) any error in interpretation of technical terms;
(g) the performance of any transaction which underlies any
Letter of Credit;
(h) any act or omission of any Person other than the Issuer
and the Revolving Lenders;
(i) loss or destruction of any draft, demand, or document in
transit or in the possession of others;
(j) lack of knowledge of any particular trade usage (other
than standard United States and Western European banking usage as used
in the normal course of business); or
(k) any consequence arising from causes beyond the control of
the Issuer and the Revolving Lenders.
None of the foregoing shall affect, impair, or prevent the vesting of any of the
rights or powers granted any Issuer or any Revolving Lender hereunder. In
furtherance and extension, and not in limitation or derogation, of any of the
foregoing, any action taken or omitted to be taken by an Issuer in good faith
and which is not grossly negligent shall be binding upon the Borrower and shall
not put such Issuer under any resulting liability to the Borrower; provided,
however, that nothing herein shall relieve any Issuer, the Agent or any
Revolving Lender for any liability for its gross negligence or willful
misconduct.
47
SECTION 4.9. Increased Costs; Indemnity. If by reason of
(a) any change after the Closing Date in applicable law,
regulation, rule, decree or regulatory requirement or any change after
the Closing Date in the interpretation or application by any judicial
or regulatory authority of any law, regulation, rule, decree or
regulatory requirement, or
(b) compliance by any Issuer or any Revolving Lender with any
new or modified (after the Closing Date) direction, request or
requirement (whether or not having the force of law) of any
governmental or monetary authority, including Regulation D of the
F.R.S. Board:
(i) any Issuer or any Revolving Lender shall be
subject to any tax (other than franchise taxes or taxes
measured by net income or receipts), levy, charge or
withholding of any nature or to any variation thereof or to
any penalty with respect to the maintenance or fulfillment of
its obligations under this Article IV, whether directly or by
such being imposed on or suffered by any Issuer or any
Revolving Lender;
(ii) any reserve, deposit or similar requirement
is or shall be applicable, imposed or modified in respect of
any Letters of Credit issued by any Issuer or participations
therein purchased by any Revolving Lender; or
(iii) there shall be imposed on any Issuer or any
Revolving Lender any other condition regarding this Article
IV, any Letter of Credit or any participation therein;
and the result of the foregoing is directly or indirectly to increase the cost
to an Issuer or such Revolving Lender of issuing, making or maintaining any
Letter of Credit or of purchasing or maintaining any participation therein, or
to reduce any amount receivable in respect thereof by such Issuer or such
Revolving Lender, then and in any such case such Issuer or such Revolving Lender
may, at any time after the additional cost is incurred or the amount received is
reduced, notify the Borrower thereof and provide Borrower with data and
calculations supporting such costs, and the Borrower shall pay such amounts as
such Issuer or Revolving Lender may specify to be necessary to compensate such
Issuer or Revolving Lender for such additional cost or reduced receipt within
ten (10) Business Days after receiving such notice, together with interest on
such amount from the date of receipt of such notice until payment in full
thereof at a rate equal at all times to the Alternate Base Rate plus the
Applicable Margin; provided, however, that Section 5.6, rather than this Section
4.9 shall govern Borrower's obligations with respect to Taxes relating to
payments by the Borrower described in the first sentence of Section 5.6(a). The
good faith determination by an Issuer or Revolving Lender, as the case may be,
of any amount due pursuant to this Section 4.9, as set forth in a statement
setting forth the calculation thereof in reasonable detail, shall, in the
absence of manifest error, be final and conclusive and binding on all of the
parties hereto. In addition to amounts payable as elsewhere provided in this
Article IV, the Borrower hereby agrees to protect, indemnify, pay and save the
Issuers and the Revolving Lenders harmless from and against any and all claims,
demands, liabilities, damages, losses,
48
costs, charges and expenses (including reasonable attorneys' fees) which any
Issuer or any Revolving Lender may incur or be subject to as a consequence,
direct or indirect, of
(x) the issuance of the Letters of Credit, other than as a
result of the gross negligence or willful misconduct of an Issuer as
determined by a court of competent jurisdiction, or
(y) the failure of an Issuer to honor a drawing under any
Letter of Credit as a result of any act or omission, whether rightful
or wrongful, of any present or future de jure or de facto government or
governmental authority.
SECTION 4.10. Existing Letters of Credit. On the Closing Date, the
Existing Letters of Credit shall continue to be deemed for all purposes to be
Letters of Credit outstanding under this Agreement and entitled to the benefits
of this Agreement and the other Loan Documents, and shall be governed by the
applications and agreements pertaining thereto and by this Agreement. Each
Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the Issuers on the Closing Date a participation in each
such Letter of Credit and each drawing thereunder in an amount equal to the
product of (i) such Lender's Revolving Percentage times (ii) the maximum amount
available to be drawn under such Letter of Credit and the amount of such
drawing, respectively. For purposes of Section 2.1.2, the Existing Letters of
Credit shall be deemed to utilize pro rata the Revolving Loan Commitment of each
Revolving Lender.
SECTION 4.11. Equivalent Amount Determinations. For purposes of
determining the amount of Foreign Currency Letter of Credit Outstandings and for
purposes of calculating fees payable under Section 3.3.3 with respect to Foreign
Currency Letter of Credit Outstandings, the principal amount of such Foreign
Currency Letter of Credit Outstandings shall be deemed to be, as of any date of
determination, the Equivalent Amount thereof at such date. The initial
Equivalent Amount of any Foreign Currency Letter of Credit shall be determined
by the Issuer of such Letter of Credit and notified by such Issuer in writing to
the Agent and the Borrower on the date of issuance thereof. If a Disbursement is
made by an Issuer under any Foreign Currency Letter of Credit, the Equivalent
Amount of such Disbursement shall be determined by the relevant Issuer on the
Disbursement Date related thereto, and such Issuer shall notify the Agent and
the Borrower promptly of such Equivalent Amount.
SECTION 4.12. Currency Fluctuations, etc. Not later than 12:00 p.m.,
New York time, on each Quarterly Payment Date and on each other date specified
by the Agent (each, an "Equivalent Amount Determination Date"), each Issuer
shall determine the Equivalent Amount as of such Equivalent Amount Determination
Date with respect to each Foreign Currency for which there are at such time
outstanding Foreign Currency Letters of Credit issued by such Issuer or in
respect thereof (after giving effect to any Loans to be made or repaid or
Letters of Credit to be issued or Reimbursement Obligations to be repaid on such
date). Each Issuer shall notify the Borrower, the Revolving Lenders and the
Agent of such Equivalent Amount. The Equivalent Amount so determined shall
become effective on the first Business Day immediately following the relevant
Equivalent Amount Determination Date (each, a "Reset Date") and shall remain
effective until the next succeeding Reset Date.
49
ARTICLE V
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 5.1. LIBO Rate Lending Unlawful. If any Lender shall determine
in good faith (which good faith determination shall, upon notice thereof to the
Borrower and the Lenders, be conclusive and binding on the Borrower) that the
introduction of or any change in or in the interpretation of any law makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for such Lender to make, continue or maintain any Loan as, or to
convert any Loan into, a LIBO Rate Loan, the obligations of all Lenders to make,
continue, maintain or convert into any such Loans shall, upon such
determination, forthwith be suspended until such Lender shall notify the Agent
that the circumstances causing such suspension no longer exist, and all LIBO
Rate Loans of such type shall automatically convert into Base Rate Loans at the
end of the then current Interest Periods with respect thereto or sooner, if
required by such law or assertion. Until such time as such Lender's obligation
to make, continue and maintain LIBO Rate Loans is reinstated, the Borrower shall
have the right (with the prior written consent of the Agent, which consent shall
not be unreasonably withheld) to replace such affected Lender by obtaining
another financial institution that is willing to purchase such affected Lender's
interest herein for the full amount of any outstanding Loans, Reimbursement
Obligations and other amounts owed hereunder (including principal, accrued
interest, breakage costs and any other unreimbursed costs and expenses owed to
such Lender), to assume such affected Lender's obligations under this Agreement
and to become a Lender hereunder. In such event, the affected Lender shall, upon
ten (10) Business Days notice from Borrower, assign one hundred percent (100%)
of its interest hereunder to such replacement lender for the price described in
the previous sentence.
SECTION 5.2. Deposits Unavailable. If the Agent shall have determined
that
(a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to the Agent or any Lender
in its relevant market; or
(b) by reason of circumstances affecting the Agent's or any
Lender's relevant market, adequate means do not exist for ascertaining
the interest rate applicable hereunder to LIBO Rate Loans,
then, upon notice from the Agent to the Borrower and the Lenders, the
obligations of all Lenders under Section 2.3 and Section 2.4 to make or continue
any Loans as, or to convert any Loans into, LIBO Rate Loans shall forthwith be
suspended (at the end of the applicable Interest Period, in the case of
outstanding LIBO Rate Loans) until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist.
SECTION 5.3. Increased LIBO Rate Loan Costs, etc. The Borrower agrees
to reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, LIBO Rate Loans as a result in any change after the Closing Date, in
applicable law, regulation, rule, decree or regulatory requirement or in the
interpretation or
50
application by any judicial or regulatory authority of any law, regulation,
rule, decree or regulatory requirement. Such Lender shall promptly notify the
Agent and the Borrower in writing of the occurrence of any such event, such
notice to state, in reasonable detail, the reasons therefor and the additional
amount required fully to compensate such Lender for such increased cost or
reduced amount. Such additional amounts shall be payable by the Borrower
directly to such Lender within five Business Days of its receipt of such notice,
and such notice shall, in the absence of manifest error and if given in good
faith, be conclusive and binding on the Borrower. If such increased costs do not
affect all of the Lenders, the Borrower shall have the right (with the prior
written consent of the Agent, which consent shall not be unreasonably withheld)
to replace the affected Lender by obtaining another financial institution that
is willing to purchase such affected Lender's interest herein for the full
amount of any outstanding Loans and Reimbursement Obligations (principal and
accrued interest), to assume such affected Lender's obligations under this
Agreement and to become a Lender hereunder. In such event, the affected Lender
shall, upon five (5) Business Days notice from Borrower, assign one hundred
percent (100%) of its interests hereunder to such replacement lender for the
price described in the previous sentence and thereafter such Lender shall have
no further obligations hereunder.
SECTION 5.4. Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a LIBO
Rate Loan) as a result of
(a) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Loans on a date other than the scheduled last
day of the Interest Period applicable thereto;
(b) any Loans not being made as LIBO Rate Loans in accordance
with the Borrowing Request therefor other than as a result of any act
or omission by such Lender;
(c) any Loans not being continued as, or converted into, LIBO
Rate Loans in accordance with the Continuation/ Conversion Notice
therefor other than as a result of any act or omission by such Lender;
or
(d) any LIBO Rate Loan not being prepaid in accordance with a
notice of prepayment,
then, upon the written notice of such Lender to the Borrower (with a copy to the
Agent), the Borrower shall, within five Business Days of its receipt thereof,
pay directly to such Lender such amount as will (in the reasonable determination
of such Lender) reimburse such Lender for such loss or expense. Such written
notice (which shall include calculations in reasonable detail and all
information and documentation reasonably necessary to support such calculations)
shall, in the absence of manifest error, be conclusive and binding on the
Borrower.
SECTION 5.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank,
51
regulator or other governmental authority causes the amount of capital required
or expected to be maintained by any Lender or any Person controlling such Lender
attributable to or based upon the Loans, the Letters of Credit or Commitments
hereunder to be increased, and such Lender determines (in its reasonable
discretion) that the rate of return on its or such controlling Person's capital
as a consequence of its Commitments, issuance of or participation in Letters of
Credit or the Loans made by such Lender is reduced to a level below that which
such Lender or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by such Lender to the Borrower, the Borrower shall immediately pay
directly to such Lender additional amounts sufficient to compensate such Lender
or such controlling Person for such reduction in rate of return. A statement of
such Lender as to any such additional amount or amounts (including calculations
thereof in reasonable detail) shall, in the absence of manifest error and if
made in good faith, be conclusive and binding on the Borrower. In determining
such amount, such Lender may use any method of averaging and attribution that it
(in its good faith discretion) shall deem applicable.
SECTION 5.6. Taxes. (a) Subject to each Lender's compliance with this
Section 5.6, all payments by the Borrower of principal of, and interest on, the
Loans and all other amounts payable hereunder shall be made free and clear of
and without deduction for any present or future income, excise, stamp or
franchise taxes and other taxes, fees, duties, withholdings or other charges of
any nature whatsoever imposed by any taxing authority, but excluding franchise
taxes and taxes imposed on or measured by any Lender's net income or receipts
(such non-excluded items being called "Taxes"). In the event that any
withholding or deduction from any payment to be made by the Borrower hereunder
is required in respect of any Taxes pursuant to any applicable law, rule or
regulation, then the Borrower will
(i) pay directly to the relevant authority the
full amount required to be so withheld or deducted;
(ii) promptly forward to the Agent an official
receipt or other documentation satisfactory to the Agent
evidencing such payment to such authority; and
(iii) pay to the Agent for the account of the
Lenders such additional amount or amounts as is necessary to
ensure that the net amount actually received by each Lender
will equal the full amount such Lender would have received had
no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Agent or any
Lender with respect to any payment received by the Agent or such Lender
hereunder, the Agent or such Lender may pay such Taxes and the Borrower
will promptly pay such additional amounts (including any penalties,
interest or expenses) as is necessary in order that the net amount
received by such person after the payment of such Taxes (including any
Taxes on such additional amount) shall equal the amount such person
would have received had not such Taxes been asserted.
If the Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Agent, for the
account of the respective Lenders, the
52
required receipts or other required documentary evidence, the Borrower
shall indemnify the Lenders for any incremental Taxes, interest or
penalties that may become payable by any Lender as a result of any such
failure. For purposes of this Section 5.6, a distribution hereunder by
the Agent or any Lender to or for the account of any Lender shall be
deemed a payment by the Borrower.
(b) Upon the request of the Borrower or the Agent, each Lender
(including, any participant or Assignee Lender) that is (a) organized
under the laws of the United States or a state thereof shall execute
and deliver to the Borrower and the Agent one or more (as the Borrower
or the Agent may reasonably request) appropriately completed United
States Internal Revenue Service Forms W-9 (or any successor forms or
documents) and (b) organized under the laws of a jurisdiction other
than the United States shall, prior to the due date of and as a
condition to any payments hereunder or under the Notes, execute and
deliver to the Borrower and the Agent one or more (as the Borrower or
the Agent may reasonably request) United States Internal Revenue
Service Forms W-8ECI or Forms W-8BEN or such other forms or documents
(or successor forms or documents), appropriately completed, as may be
applicable to establish that such Lender (or participant or Assignee
Lender) is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes.
The Borrower shall not be required to pay any additional
amounts to any Lender (or participant or Assignee Lender) in respect of
Taxes pursuant to this Section 5.6 if the obligation to pay such
additional amounts would not have arisen but for a failure by such
Lender (or participant or Assignee Lender) to comply with the
provisions of this Section 5.6 unless such failure results from (a) a
change in applicable treaty, law or regulation or interpretation
thereof or (b) an amendment, modification or revocation of any
applicable tax treaty or a change in official position regarding the
application or interpretation thereof, in each case after the date such
Lender (or participant or Assignee Lender) becomes a party to this
Agreement.
SECTION 5.7. Payments, Computations, etc. Unless otherwise expressly
provided, all payments by the Borrower pursuant to this Agreement, the Notes or
any other Loan Document shall be made by the Borrower to the Agent for the pro
rata account of the Lenders entitled to receive such payment. All such payments
required to be made to the Agent shall be made, without setoff, deduction or
counterclaim, not later than 11:00 a.m., San Francisco time, on the date due, in
same day or immediately available funds, to such account as the Agent shall
specify from time to time by notice to the Borrower. Funds received after that
time shall be deemed to have been received by the Agent on the next succeeding
Business Day. The Agent shall promptly remit in same day funds to each Lender
its share, if any, of such payments received by the Agent for the account of
such Lender. All interest and fees shall be computed on the basis of the actual
number of days (including the first day but excluding the last day) occurring
during the period for which such interest or fee is payable over a year
comprised of 360 days (or, in the case of interest on a Base Rate Loan (other
than when calculated with respect to the Federal Funds Rate), 365 days or, if
appropriate, 366 days). Whenever any payment to be made shall otherwise be due
on a day which is not a Business Day, such payment shall (except as otherwise
required by clause (c) of the definition of the term "Interest Period" with
respect to LIBO Rate Loans) be
53
made on the next succeeding Business Day and such extension of time shall be
included in computing interest and fees, if any, in connection with such
payment.
SECTION 5.8. Sharing of Payments. If any Lender shall obtain any
payment or other recovery as a result of its receipt of any collateral or
otherwise (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of Sections
5.3, 5.4 and 5.5) or Letter of Credit in excess of its pro rata share of
payments then or therewith obtained by all Lenders, such Lender shall purchase
from the other Lenders such participations in Loans made by them and/or Letters
of Credit as shall be necessary to cause such purchasing Lender to share the
excess payment or other recovery ratably with each of them; provided, however,
that if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and each
Lender which has sold a participation to the purchasing Lender shall repay to
the purchasing Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Lender's ratable share (according
to the proportion of (a) the amount of such selling Lender's required repayment
to the purchasing Lender to (b) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section may, to the fullest extent permitted by law, exercise
all its rights of payment (including pursuant to Section 5.9) with respect to
such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured claim
in lieu of a setoff to which this Section applies, such Lender shall, to the
extent practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Lenders entitled under this Section to
share in the benefits of any recovery on such secured claim.
SECTION 5.9. Use of Proceeds. The Borrower shall apply the proceeds of
each Borrowing of Revolving Loans to the general corporate purposes of the
Borrower and its Subsidiaries, including Capital Expenditures; Letters of Credit
shall be used for general corporate purposes of the Borrower and its
Subsidiaries (including credit support by the Borrower for gas and power
contracts for CES, Calpine Energy Services Canada Partnership and Calpine Energy
Services UK Limited). The Borrower shall apply the proceeds of the Term B Loans
and of the 2003 Senior Notes and the Second Priority B Loans (a) to repay all
amounts owing under the 2000 Credit Agreement and, except to the extent
continued hereunder, the 2002 Credit Agreement and (b) after application as set
forth in clause (a) above, to general corporate purposes. Without limiting the
foregoing, no Letter of Credit or proceeds of any Loan will be used to (i)
acquire any equity security of a class which is registered pursuant to Section
12 of the Securities Exchange Act of 1934 or any "margin stock", as defined in
F.R.S. Board Regulation U, (ii) finance acquisitions (other than the acquisition
of equipment, sites and property in the ordinary course of the Borrower and its
Subsidiaries' business, but in no event may Loans or Letters of Credit be used
to finance acquisitions of power projects, reserves of geothermal steam and
fluids and natural gas reserves), (iii) make Investments in any third parties
(other than Investments in Subsidiaries), directly or indirectly, through the
Borrower or any of its Subsidiaries or Affiliates, or (iv) defease, repurchase
or prepay any Subordinated Debt or any Senior Notes.
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ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. Effectiveness; Initial Credit Extension. The effectiveness
of this Agreement and the obligation of each Lender to make its initial Credit
Extension shall be subject to the prior or concurrent satisfaction of each of
the conditions precedent set forth in this Section 6.1.
SECTION 6.1.1. Credit Agreement; Other Loan Documents. The Agent shall
have received, on or before the Closing Date, (i) this Agreement, executed and
delivered by the Agent, the Borrower and each of the Lenders, (ii) the Security
Agreement, executed and delivered by the Borrower, QM, JOQ and QCH in favor of
the Collateral Trustee (for the benefit of, among others, the Lenders), (iii)
the Collateral Trust Agreement, executed and delivered by the Agent, the
Collateral Trustee and the Trustee under the 2003 Senior Note Indenture, (iv)
the Deeds of Trust, executed and delivered by the Borrower to the Collateral
Trustee (for the benefit of, among others, the Lenders), together with any
additional supporting documentation as shall be reasonably requested by the
Agent, including (w) title and security title opinions from title examiners, and
in form and substance, reasonably acceptable to the Agent, confirming the
Borrower's ownership of, and the first perfected lien and security interest of
the Collateral Trustee in, Domestic Gas Reserves having an aggregate value of
not less than ninety percent (90%) of all proven reserves shown in the report
from Netherland, Xxxxxx & Associates, Inc. entitled "Estimate of Reserves and
Future Revenue to the Calpine Corporation Interest in Certain Oil and Gas
Properties located in the United States as of December 31, 2002", a copy of
which shall be delivered to the Agent; (x) a certificate from the Borrower's
insurance advisor as to the sufficiency of the Borrower's insurance program and
compliance with the insurance requirements of the Loan Documents, (y) the
Hazardous Materials Indemnity, executed and delivered by the Borrower, and (z)
copies of all consents and approvals required in connection with the execution
and delivery by the Borrower of the Deeds of Trust, (v) the Stock Pledge
Agreement, executed and delivered by the Borrower in favor of the Collateral
Trustee (for the benefit of, among others, the Lenders), (vi) the Gilroy
Assignment Agreement, executed and delivered by the Borrower in favor of the
Collateral Trustee (for the benefit of, among others, the Lenders), (vii) the
LLC Pledge Agreement, executed and delivered by the Borrower in favor of the
Collateral Trustee (for the benefit of, among others, the Lenders), (viii) the
Note Pledge Agreement, executed and delivered by the Borrower in favor of the
Collateral Trustee (for the benefit of, among others, the Lenders), and (ix) the
Canadian Stock Pledge Agreement, executed and delivered by QM, JOQ and QCH in
favor of the Collateral Trustee (for the benefit of, among others, the Lenders).
The Collateral Trustee shall be in possession of (a) all share certificates
subject to the Security Documents together with undated stock powers duly
executed in blank and (b) all promissory notes subject to the Security Documents
together with all necessary instruments of transfer or assignment duly executed
in blank.
SECTION 6.1.2. Resolutions, etc. The Agent shall have received from
each Obligor a certificate, dated the Closing Date, of its Secretary or
Assistant Secretary, as to
55
(a) resolutions of its Board of Directors then in full force
and effect authorizing the execution, delivery and performance of this
Agreement, the Notes and each other Loan Document to be executed by it;
and
(b) the incumbency and signatures of those of its officers
authorized to act with respect to this Agreement, the Notes and each
other Loan Document executed by it,
upon which certificate each Lender may conclusively rely until it shall have
received a further certificate of the Secretary of such Obligor canceling or
amending such prior certificate.
SECTION 6.1.3. Delivery of Notes. The Agent shall have received (i) for
the account of each Revolving Lender requesting same, its Revolving Note duly
executed and delivered by the Borrower and (ii) for the account of each Term B
Lender requesting same, its Term Note duly executed and delivered by the
Borrower.
SECTION 6.1.4. Lien Searches. The Agent shall have received the results
of a recent lien search in the jurisdictions of incorporation of the Borrower
and the Guarantors and where the Borrower's and the Guarantors' chief executive
offices are located, and such search shall reveal no liens on any of the assets
of the Borrower or the Guarantors except for liens permitted by Section 8.2.3 or
discharged on or prior to the Closing Date pursuant to documentation
satisfactory to the Agent.
SECTION 6.1.5. Compliance Certificate. The Agent shall have received a
certificate, executed by an Authorized Officer of the Borrower, showing
compliance with the financial covenants in Sections 6.2.4 and 8.2.4 as of
December 31, 2002.
SECTION 6.1.6. Fee Letters. The Agent shall have received the Fee
Letters duly executed by all parties thereto.
SECTION 6.1.7. Opinions of Counsel. The Agent shall have received
opinions, dated the date of the Closing Date and addressed to the Agent and all
Lenders, from
(a) Xxxx Xxxxxxxxxxxx, Esq., general counsel of the Borrower,
and Xxxxxxxxx & Xxxxxxx, special counsel to the Borrower, substantially
in the forms of Exhibits F-1 and F-2, respectively; and
(b) Such other special and local counsel (including, without
limitation, local counsel with respect to the Deeds of Trust) as may be
required by the Agent, in each case in form and substance satisfactory
to the Agent.
SECTION 6.1.8. Closing Fees, Expenses, etc. The Agent shall have
received for its own account, or for the account of each Lender, as the case may
be, all fees, costs and expenses due and payable pursuant to Sections 3.3 and
11.3, if then invoiced.
SECTION 6.1.9. No Material Adverse Effect. No Material Adverse Effect
shall have occurred since December 31, 2002.
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SECTION 6.1.10. Required Proceeds from Issuance of 2003 Senior Notes.
The Borrower shall have received at least $1,800,000,000 in aggregate gross cash
proceeds from the issuance of the 2003 Senior Notes and the Second Priority B
Loans.
SECTION 6.1.11. Termination of Existing Facilities. The Agent shall
have received evidence satisfactory to it that (i) the 2000 Credit Agreement and
all commitments thereunder shall have been terminated and all amounts
outstanding thereunder shall have been paid in full and (ii) except to the
extent continued hereunder, all amounts outstanding under the 2002 Credit
Agreement shall have been paid in full, in each case with the proceeds of the
Term B Loans and of the 2003 Senior Notes and the Second Priority B Loans.
SECTION 6.1.12. Projections. The Agent shall have received from the
Borrower a consolidated statement of projected cash flows (including sources and
uses of cash) for the Borrower and its Subsidiaries through the Stated Maturity
Date for Revolving Loans (the "Projected Cash Flow Statement"), certified by an
Authorized Officer of the Borrower.
SECTION 6.1.13. Pledged Power Projects. The Agent shall have received
evidence satisfactory to it that ownership of the Pledged Power Projects has
been conveyed to the Borrower by merger or otherwise.
SECTION 6.2. All Credit Extensions. The obligation of each Lender to
make any Credit Extension (including the initial Credit Extension) shall be
subject to the satisfaction of each of the conditions precedent set forth in
this Section 6.2.
SECTION 6.2.1. Compliance with Warranties, No Default, etc. Both before
and after giving effect to any Credit Extension (but, if any Default of the
nature referred to in Section 9.1.5 shall have occurred with respect to any
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds of any Borrowing) the following statements shall be
true and correct
(a) the representations and warranties set forth in Article
VII (excluding, however, those contained in Section 7.7) and in each
other Loan Document (excluding the representations and warranties set
forth in the Deeds of Trust except to the extent that a breach thereof
would reasonably be expected to cause a Material Adverse Effect) shall
be true and correct in all material respects with the same effect as if
then made (unless stated to relate solely to an earlier date, in which
case such representations and warranties shall be true and correct as
of such earlier date);
(b) except as disclosed by the Borrower to the Agent and the
Lenders pursuant to Section 7.7
(i) no labor controversy, litigation,
arbitration or governmental investigation or proceeding shall
be pending or, to the knowledge of the Borrower, threatened
against the Borrower or any of its Significant Subsidiaries
which would reasonably be expected to cause a Material Adverse
Effect or which purports to materially and adversely affect
the legality, validity or enforceability of this Agreement,
the Notes or any other Loan Document; and
57
(ii) no development shall have occurred in any
labor controversy, litigation, arbitration or governmental
investigation or proceeding disclosed pursuant to Section 7.7
which might have a Material Adverse Effect; and
(c) no Default (other than a Nonmaterial Subsidiary Default)
shall have then occurred and be continuing, and neither the Borrower,
any other Obligor, nor any of its Significant Subsidiaries are in
material violation of any law or governmental regulation or court order
or decree which would reasonably be expected to cause a Material
Adverse Effect.
SECTION 6.2.2. Credit Request. The Agent shall have received a
Borrowing Request or Issuance Request, as the case may be, for such Credit
Extension. Each of the delivery of a Borrowing Request or an Issuance Request
and the acceptance by the Borrower of the proceeds of the Borrowing or the
issuance of the Letter of Credit, as applicable, shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
(both immediately before and after giving effect to such Borrowing and the
application of the proceeds thereof) or the issuance of the Letter of Credit, as
applicable, the statements made in Section 6.2.1 are true and correct.
SECTION 6.2.3. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower or any of its
Subsidiaries or any other Obligors shall be satisfactory in form and substance
to the Agent and its counsel; the Agent and its counsel shall have received all
information, approvals, opinions, documents or instruments as the Agent or its
counsel may reasonably request.
SECTION 6.2.4. Interest Coverage Ratio (Parent Only). The Interest
Coverage Ratio (Parent Only), calculated as of the end of the most recently
ended Fiscal Quarter or, if the Interest Coverage Ratio (Parent Only) had
previously fallen below 1.70 to 1.00 and had not subsequently returned to 1.70
to 1.00 or better, calculated as of the end of the most recently ended calendar
month, shall be at least 1.70 to 1.00 for the previous 12 months.
SECTION 6.2.5. Indentures. (a) The Borrower shall have certified to the
Agent that its incurrence of the Indebtedness under such Borrowing is
permitted under the terms of Section 3.4 of the Xxx-0000 Xxxxxxxxxx. To
the extent that the Borrower is relying on clause (a) of Section 3.4 of
the Xxx-0000 Xxxxxxxxxx, the Borrower shall have delivered to the Agent
a certificate of an Authorized Officer of the Borrower demonstrating
its compliance with the incurrence test set forth therein.
(b) The Borrower shall have certified to the Agent that the
incurrence of Liens in respect of such Borrowing is permitted under the
terms of Section 3.7 of the Xxx-0000 Xxxxxxxxxx and Section 3.4 of the
Shelf Indenture; provided that the Borrower may not rely upon Section
3.7(d) of the Xxx-0000 Xxxxxxxxxx in making such analysis and
certification. To the extent the Borrower is relying on Section
3.7(f)(1) of each of the Xxx-0000 Xxxxxxxxxx and on Section 3.4(a)(i)
of the Shelf Indenture, the Borrower shall have delivered to the Agent
a certificate of an Authorized Officer of the Borrower demonstrating
its compliance with the provisions thereof. To the extent that the
Borrower is relying on the proviso to Section 3.7 of each of the
Xxx-0000 Xxxxxxxxxx and
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the proviso to Section 3.4 of the Shelf Indenture, the Borrower shall
have delivered to the Agent a certificate of an Authorized Officer of
the Borrower demonstrating its compliance with the incurrence tests set
forth therein.
SECTION 6.2.6. Solvency. Both before and after giving effect to any
Borrowing of Loans or issuance of any Letter of Credit hereunder, the Borrower
and its Subsidiaries, on a consolidated basis, shall be Solvent.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agent to enter into this
Agreement and to make Loans or L/C Advances and issue Letters of Credit
hereunder, the Borrower represents and warrants unto the Agent and each Lender
as set forth in this Article VII.
SECTION 7.1. Organization, etc. The Borrower and each of its
Significant Subsidiaries is a corporation, partnership, limited liability
company or similar entity validly organized and existing and in good standing
under the laws of the State of its organization, is duly qualified to do
business and is in good standing as a foreign organization in each jurisdiction
where the nature of its business requires such qualification and where the
failure to so qualify would have a material adverse effect on the Borrower's or
any Obligor's ability to perform its obligations under the Loan Documents to
which it is a party, and has full power and authority and holds all requisite
governmental licenses, permits and other approvals to enter into and perform its
Obligations under this Agreement, the Notes and each other Loan Document to
which it is a party and to own or hold under lease its property and to conduct
its business substantially as currently conducted by it.
SECTION 7.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by the Borrower of this Agreement, the Notes and each
other Loan Document executed or to be executed by it, and the execution,
delivery and performance by each other Obligor of each Loan Document executed or
to be executed by it are within the Borrower's and each such Obligor's corporate
powers, have been duly authorized by all necessary corporate action, and do not
(a) contravene the Borrower's or any such Obligor's Organic
Documents;
(b) contravene any contractual restriction (including, without
limitation, the Senior Note Indentures), law or governmental regulation
or court decree or order binding on or affecting the Borrower or any
such Obligor; or
(c) result in, or require the creation or imposition of, any
Lien on any of the Borrower's or any other Obligor's properties.
SECTION 7.3. Government Approval, Regulation, etc. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person is required for the due execution,
delivery or performance by the Borrower or any other Obligor of this Agreement,
the Notes or any other Loan Document to which it is a party,
59
other than any such authorization, approval, action, notice or filing that has
been obtained or made or, with respect to the Pledged Power Projects, will be
obtained or made within its required period of time or the failure to obtain or
make which would not have a Material Adverse Effect. Neither the Borrower nor
any of its Significant Subsidiaries is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, or a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 7.4. Validity, etc. This Agreement constitutes, and the Notes
and each other Loan Document executed by the Borrower will, on the due execution
and delivery thereof, constitute, the legal, valid and binding obligations of
the Borrower enforceable in accordance with their respective terms except as
enforceability may be subject to or limited by (i) bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting the
rights of creditors or (ii) general principles of equity, including the possible
unavailability of specific performance or injunctive relief; and each Loan
Document executed pursuant hereto by each other Obligor will, on the due
execution and delivery thereof by such Obligor, be the legal, valid and binding
obligation of such Obligor enforceable in accordance with its terms except as
enforceability may be subject to or limited by (i) bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting the
rights of creditors or (ii) general principles of equity, including the possible
unavailability of specific performance or injunctive relief.
SECTION 7.5. Financial Information. The balance sheets of the Borrower
and each of its Subsidiaries as at December 31, 2002 and the related statements
of earnings and cash flow of the Borrower and each of its Subsidiaries, copies
of which have been furnished to the Agent and each Lender, have been prepared in
accordance with GAAP consistently applied, and present fairly the consolidated
financial condition of the corporations covered thereby as at the date thereof
and the results of their operations for the period then ended.
SECTION 7.6. No Material Adverse Effect. Since December 31, 2002, there
has been no Material Adverse Effect.
SECTION 7.7. Litigation, Labor Controversies, etc. There is no pending
or, to the knowledge of the Borrower, threatened litigation, action, proceeding,
investigation, or labor controversy affecting the Borrower or any of its
Significant Subsidiaries, or any of their respective properties, businesses,
assets or revenues, which would reasonably be expected to have a Material
Adverse Effect or which purports to materially and adversely affect the
legality, validity or enforceability of this Agreement, the Notes or any other
Loan Document.
SECTION 7.8. Subsidiaries. The Borrower has no Significant
Subsidiaries, except those Significant Subsidiaries
(a) which are identified in Item 7.8 ("Existing Significant
Subsidiaries") of the Disclosure Schedule; or
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(b) which are permitted to have been acquired in accordance
with Section 8.2.5 or 8.2.9.
The organizational chart attached hereto as Schedule 1.1 accurately
reflects the ownership structures of the Borrower's equity interests in its
Foreign Subsidiaries as of the Closing Date.
SECTION 7.9. Ownership of Properties. The Borrower and each of its
Significant Subsidiaries owns good and marketable title to all of its material
properties and assets, real and personal, tangible and intangible, of any nature
whatsoever (including patents, trademarks, trade names, service marks and
copyrights), free and clear of all Liens, charges or claims (including
infringement claims with respect to patents, trademarks, copyrights and the
like) except as permitted pursuant to Section 8.2.3. As of the Closing Date, the
Borrower owns all of the equity interests in CNGH, CNGH owns all of the equity
interests in Calpine Holdings, the Canadian Gas Reserves are owned by CCNGP,
substantially all of the Domestic Gas Reserves are owned by the Borrower and
Calpine Holdings directly owns all of the partnership interests of CCFCI, and
Saltend is indirectly owned by CCEC. All governmental filings necessary to
perfect and protect, and establish and, so long as continuation statements are
duly filed with the Secretary of State of the State of Delaware within the time
periods required under the Uniform Commercial Code, maintain the priority of,
the Liens created by the Security Documents have been duly effected or taken.
SECTION 7.10. Taxes. The Borrower and each of its Significant
Subsidiaries has filed all tax returns and reports required by law to have been
filed by it and has paid all taxes and governmental charges thereby shown to be
owing, except any such taxes or charges which are being diligently contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.
SECTION 7.11. Pension and Welfare Plans. No steps have been taken to
terminate any Pension Plan, and no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a Lien under Section
302(f) of ERISA. No condition exists or event or transaction has occurred with
respect to any Pension Plan which might result in the incurrence by the Borrower
or any member of the Controlled Group of any material liability, fine or
penalty. Neither the Borrower nor any member of the Controlled Group has any
contingent liability with respect to any post-retirement benefit under a Welfare
Plan, other than liability for continuation coverage described in Part 6 of
Title I of ERISA.
SECTION 7.12. Environmental Warranties. Except as set forth in Item
7.12 of the Disclosure Schedule,
(a) All facilities and property (including underlying
groundwater) owned or leased by the Borrower or any of its Significant
Subsidiaries have been, and continue to be, owned or leased by the
Borrower and its Significant Subsidiaries in material compliance with
all Environmental Laws;
(b) There have been no past, and there are no pending or, to
the Borrower's knowledge, threatened
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(i) claims, complaints, notices or requests for
information received by the Borrower or any of its Significant
Subsidiaries with respect to any alleged violation of any
Environmental Law that, singly or in the aggregate, may
reasonably be expected to result in a Material Adverse Effect,
or
(ii) complaints, notices or inquiries to the
Borrower or any of its Significant Subsidiaries regarding
potential liability under any Environmental Law that, singly
or in the aggregate, may reasonably be expected to result in a
Material Adverse Effect;
(c) There are no unremediated Releases of Hazardous Materials
at, on or under any property now or previously owned or leased by the
Borrower or any of its Significant Subsidiaries that, singly or in the
aggregate, result in, or may reasonably be expected to result in, a
Material Adverse Effect;
(d) The Borrower and its Significant Subsidiaries have been
issued and are in material compliance with all permits, certificates,
approvals, licenses and other authorizations relating to environmental
matters and necessary for their businesses;
(e) No property now or previously owned or leased by the
Borrower or any of its Significant Subsidiaries is listed or proposed
for listing (with respect to owned property only) on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any similar
state list of sites requiring investigation or clean-up;
(f) There are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any property
now or previously owned or leased by the Borrower or any of its
Significant Subsidiaries that, singly or in the aggregate, result in,
or may reasonably be expected to result in, a Material Adverse Effect;
(g) Neither Borrower nor any Significant Subsidiary of the
Borrower has directly transported or directly arranged for the
transportation of any Hazardous Material to any location which is
listed or proposed for listing on the National Priorities List pursuant
to CERCLA, on the CERCLIS or on any similar state list or which is the
subject of federal, state or local enforcement actions or other
investigations which may lead to material claims against the Borrower
or such Significant Subsidiary thereof for any remedial work, damage to
natural resources or personal injury, including claims under CERCLA;
(h) There are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the
Borrower or any Significant Subsidiary of the Borrower that, singly or
in the aggregate, result in, or may reasonably be expected to result
in, a Material Adverse Effect; and
(i) No conditions exist at, on or under any property now or
previously owned or leased by the Borrower which, with the passage of
time, or the giving of notice or both, would give rise to liability
under any Environmental Law which would reasonably be expected to
result in a Material Adverse Effect.
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SECTION 7.13. Regulations U and X. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Loans will be used for a purpose which violates
F.R.S. Board Regulation U or X. Terms for which meanings are provided in F.R.S.
Board Regulation U or X or any regulations substituted therefor, as from time to
time in effect, are used in this Section with such meanings.
SECTION 7.14. Accuracy of Information. All factual information (which
shall not include projections) heretofore or contemporaneously furnished by or
on behalf of the Borrower in writing to the Agent, any Issuer or any Lender for
purposes of or in connection with this Agreement or any transaction contemplated
hereby is, and all other such factual information hereafter furnished by or on
behalf of the Borrower to the Agent or any Lender will be, true and accurate in
every material respect on the date as of which such information is dated or
certified (except with respect to the financial statements of Borrower and its
Subsidiaries, which will fairly present the financial condition of the entities
covered thereby as of the date thereof) and, with respect to information
provided prior to the execution of this Agreement, as of the date of execution
and delivery of this Agreement by the Agent and such Lender, and such
information is not, or shall not be, as the case may be, incomplete by omitting
to state any material fact necessary to make such information not misleading.
SECTION 7.15. Protection under Security Documents. Subject to the
exceptions agreed to in the agreed form of such documents, the Security
Documents create valid perfected first priority Liens in favor of the Collateral
Trustee (for the benefit of, among others, the Lenders) on the property subject
thereto. The Borrower hereby further represents and warrants to the Agent and
each Lender that all stock certificates, LLC interest certificates and
promissory notes required to be pledged under this Agreement and the Security
Documents in accordance herewith and therewith have been delivered to the
Collateral Trustee together with all necessary instruments of transfer or
assignment duly executed in blank.
SECTION 7.16. Indebtedness of Certain Subsidiaries. As of March 31,
2003, the only outstanding Third Party Indebtedness of any of Calpine Holdings
and its Subsidiaries, CNGH and its Subsidiaries, QM, JOQ, QCH and CCEC and its
Subsidiaries is as set forth on Item 7.16 of the Disclosure Schedule.
SECTION 7.17. Designation of Subsidiaries. As of the Closing Date, each
of CCEC and its Subsidiaries is an Unrestricted Subsidiary, as such term is
defined in the Xxx-0000 Xxxxxxxxxx.
ARTICLE VIII
COVENANTS
SECTION 8.1. Affirmative Covenants. The Borrower agrees with the Agent
and each Lender that, from and after the Closing Date, until all Revolving Loan
Commitments have terminated and all Obligations have been paid and performed in
full, the Borrower will perform the obligations set forth in this Section 8.1.
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SECTION 8.1.1. Financial Information, Reports, Notices, etc. The
Borrower will furnish, or will cause to be furnished, to each Lender and the
Agent copies of the following financial statements, reports, notices and
information:
(a) as soon as available and in any event within 60 days after
the end of each of the first three Fiscal Quarters of each Fiscal Year
of the Borrower, (i) the consolidated balance sheet, statement of
earnings and cash flow statement of the Borrower and its Subsidiaries
for such Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter,
certified by an Authorized Officer of the Borrower and (ii) a
consolidating balance sheet and a consolidating statement of earnings
of the Borrower and its Subsidiaries for such Fiscal Quarter and for
the period commencing at the end of the previous Fiscal Year and ending
with the end of such Fiscal Quarter, certified by an Authorized Officer
of the Borrower;
(b) as soon as available and in any event within 120 days
after the end of each Fiscal Year of the Borrower, (i) a copy of the
annual audit report for such Fiscal Year for the Borrower and its
Subsidiaries, including therein the consolidated balance sheet,
statement of earnings and cash flow statement of the Borrower and its
Subsidiaries as of the end of such Fiscal Year, in each case certified
(without any Impermissible Qualification) in a manner acceptable to the
Agent and the Required Lenders by PricewaterhouseCoopers LLC or other
independent public accountants acceptable to the Agent and the Required
Lenders and (ii) a consolidating balance sheet and a consolidating
statements of earnings of the Borrower and its Subsidiaries as of the
end of such Fiscal Year, certified by an Authorized Officer of the
Borrower;
(c) as soon as available and in any event within 60 days after
the end of each of the first three Fiscal Quarters of each Fiscal Year
and within 120 days after the end of each Fiscal Year, a certificate,
executed by an Authorized Officer of the Borrower, showing (in
reasonable detail and with appropriate calculations and computations in
all respects satisfactory to the Agent) compliance with the financial
covenants set forth in Sections 6.2.4 and 8.2.4, and a certificate,
executed by an Authorized Officer of the Borrower, showing (i) a
computation of the amounts described in Section 3.1.1(c) and in clauses
(x) and (y) of the last sentence of Section 8.2.3 and (ii) a
computation of the utilization of all baskets contained within the
negative covenants set forth in Section 8.2 as of the end of such
period;
(d) as soon as available and in any event within 90 days after
the end of each Fiscal Year of the Borrower, a consolidated budget for
the Borrower and its Subsidiaries for the following Fiscal Year, in
form and substance satisfactory to the Revolving Lenders;
(e) if the Interest Coverage Ratio (Parent Only), calculated
as of the end of the most recently ended Fiscal Quarter, had previously
fallen below 1.70 to 1.00 and had not subsequently returned to 1.70 to
1.00 or better, as soon as available and in any event within 30 days
after the end of each calendar month thereafter, a certificate,
executed by an Authorized Officer of the Borrower, showing (in
reasonable detail and with appropriate calculations and computations in
all respect satisfactory to the Agent) the
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calculation of the Interest Coverage Ratio (Parent Only) as of the end
of such calendar month;
(f) as soon as possible and in any event within three days
after the Borrower obtains knowledge of each Default, a statement of an
Authorized Officer of the Borrower setting forth details of such
Default and the action which the Borrower has taken and proposes to
take with respect thereto;
(g) as soon as possible and in any event within five days
after the Borrower obtains knowledge of (x) any adverse development
with respect to any litigation, action, proceeding, or labor
controversy described in Section 7.7, (y) the commencement of any labor
controversy, litigation, action, proceeding of the type described in
Section 7.7, or (z) any other Material Adverse Effect, notice thereof
and copies of all documentation relating thereto;
(h) promptly after the sending or filing thereof, copies of
all reports which the Borrower sends to any of its security holders,
and all reports and registration statements which the Borrower or any
of its Significant Subsidiaries files with the Securities and Exchange
Commission or any national securities exchange;
(i) immediately upon the Borrower's knowledge of the
institution of any steps by the Borrower or any member of its
Controlled Group to terminate any Pension Plan, or the failure to make
a required contribution to any Pension Plan if such failure is
sufficient to give rise to a Lien under Section 302(f) of ERISA, or the
taking of any action with respect to a Pension Plan which could result
in the requirement that the Borrower furnish a bond or other security
to the PBGC or such Pension Plan, or the occurrence of any event with
respect to any Pension Plan which could result in the incurrence by the
Borrower of any material liability, fine or penalty, or any material
increase in the contingent liability of the Borrower with respect to
any post-retirement Welfare Plan benefit, notice thereof and copies of
all documentation relating thereto;
(j) as soon as available and in any event within 30 days after
the end of each month during the 2003 and 2004 Fiscal Years of the
Borrower, and thereafter within 60 days after the end of each Fiscal
Quarter of the Borrower, an update of the Projected Cash Flow
Statement, certified by an Authorized Officer of the Borrower;
(k) as soon as available and in any event within 30 days after
the end of each month, a certificate signed by an Authorized Officer of
the Borrower setting forth (i) the Borrower's consolidated cash balance
as at the end of such month (identifying both the restricted and
unrestricted portions thereof) and (ii) actual sources and uses of cash
of the Borrower and its Subsidiaries on a consolidated basis during
such month;
(l) within 30 days after any Asset Sale or Monetization by the
Borrower or any of its Subsidiaries, an officer's certificate with
respect to such Asset Sale or Monetization, which certificate shall be
in form and substance reasonably satisfactory to the Agent and shall
provide details of such Asset Sale or Monetization, including the
amount of
65
proceeds thereof, the date of receipt thereof and any planned
reinvestment to be made therewith;
(m) on or before August 15, 2003, an update of Item 7.16 of
the Disclosure Schedule through June 30, 2003; and
(n) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
Significant Subsidiaries as any Lender through the Agent may from time
to time reasonably request and which the Borrower is legally permitted
to provide to such Lender.
The Borrower may provide some or all of the information required in clauses (a)
and (b) above by providing copies of its Forms 10-Q and/or 10-K filed with the
Securities and Exchange Commission.
SECTION 8.1.2. Compliance with Laws, etc. The Borrower will, and will
cause each of its Subsidiaries to, comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance to include
(without limitation):
(a) the maintenance and preservation of its existence and, if
applicable, qualification as a foreign corporation or comparable
entity; and
(b) the payment, before the same become delinquent, of all
taxes, assessments and governmental charges imposed upon it or upon its
property except to the extent being diligently contested in good faith
by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.
SECTION 8.1.3. Maintenance of Properties. The Borrower will, and will
cause each of its Subsidiaries to, maintain, preserve, protect and keep its
material properties in good repair, working order and condition, and make
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times unless
the Borrower determines in good faith that the continued maintenance of any of
its properties is no longer economically desirable.
SECTION 8.1.4. Insurance.
(a) Except as provided in Section 8.1.4(b), the Borrower will,
and will cause each of its Subsidiaries to, maintain or cause to be
maintained with responsible insurance companies insurance with respect
to its properties and business (including business interruption
insurance) against such casualties and contingencies and of such types
and in such amounts as is customary in the case of similar businesses
and will, upon request of the Agent, furnish to each Lender at
reasonable intervals a certificate of an Authorized Officer of the
Borrower setting forth the nature and extent of all insurance
maintained by the Borrower and its Subsidiaries in accordance with this
Section. All insurance policies required to be maintained under the
Deeds of Trust shall be in amounts satisfactory to the Agent and shall
be issued on forms and by companies and with endorsements acceptable to
the Agent.
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(b) With respect to the Domestic Gas Reserves, the Borrower
will, and will cause each of its Subsidiaries to, maintain or cause to
be maintained the insurance required by the Deeds of Trust.
SECTION 8.1.5. Books and Records. The Borrower will, and will cause
each of its Subsidiaries to, keep books and records which accurately reflect all
of its business affairs and transactions and permit the Agent or any of its
representatives or any Lender, at reasonable times and intervals, to visit all
of its offices, to discuss its financial matters with its officers and
independent public accountant (and the Borrower hereby authorizes such
independent public accountant to discuss the Borrower's financial matters with
the Agent or its representatives whether or not any representative of the
Borrower is present) and to examine (and, at the expense of the Borrower,
photocopy extracts from) any of its books or other corporate records. The
Borrower shall pay any fees of such independent public accountant incurred in
connection with the exercise by the Agent of its rights pursuant to this
Section; provided, however, after the occurrence and during the continuance of
any Default, the Borrower shall pay for all fees of such independent accountants
incurred with each exercise by the Agent or any Lender of its rights pursuant to
this Section.
SECTION 8.1.6. Environmental Covenant. The Borrower will, and will
cause each of its Significant Subsidiaries to,
(a) use and operate all of its facilities and properties in
material compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material
compliance therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws;
(b) immediately notify the Agent and provide copies upon
receipt of all material written claims, complaints, notices or
inquiries relating to the condition of its facilities and properties or
compliance with Environmental Laws; and
(c) provide such information and certifications which the
Agent may reasonably request from time to time to evidence compliance
with this Section 8.1.6.
SECTION 8.1.7. Dividends of Subsidiaries. Promptly upon (but in no case
more than five (5) Business Days after) the occurrence of an Event of Default,
the Borrower shall cause each of its Wholly Owned Subsidiaries to declare and
pay dividends on, or to make payments or distributions on account of, the shares
of all classes of stock of such entity in an amount equal to (x) all funds
legally and contractually available at such time to such Subsidiary for the
payment of dividends minus (y) without duplication, such Wholly Owned
Subsidiary's budgeted working capital and budgeted cash requirements for the
following six months.
SECTION 8.1.8. Intercompany Notes. The Borrower will, promptly upon the
creation of any additional Indebtedness owing from any of its Subsidiaries that
has not been evidenced by a non-recourse secured note pledged to the Collateral
Trustee, cause such Indebtedness to be evidenced by a promissory note and
pledged to the Collateral Trustee, pursuant to the Security Documents, as
collateral security for the Obligations. It is understood and agreed that (i)
upon
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the conversion to equity of all Indebtedness owing from a Subsidiary to the
Borrower or the repayment of all Indebtedness from a Subsidiary to the Borrower,
the promissory note of such Subsidiary shall be released from the Security
Documents and cancelled and (ii) subject to the approval of the Agent (not to be
unreasonably withheld), the Borrower may substitute new non-recourse secured
promissory notes for promissory notes previously pledged to the Collateral
Trustee. If all of the Indebtedness owing to the Borrower from a Subsidiary that
is a Pledged Entity shall be converted to equity, not later than ten days
thereafter the Borrower shall pledge to the Collateral Trustee such equity
interest and deliver to the Collateral Trustee the stock certificate, if any,
evidencing such interest together with duly executed stock powers, in blank.
SECTION 8.1.9. Additional Collateral, etc. (a) With respect to any
personal property acquired after the Closing Date directly by the
Borrower (other than any Excluded Assets and other than any property
described in clause (b) below) as to which the Collateral Trustee, for
the benefit of, among others, the Lenders, does not have a perfected
Lien, the Borrower shall promptly (i) execute and deliver to the
Collateral Trustee such amendments to the Security Documents or such
other documents as the Agent reasonably deems necessary or advisable to
grant to the Collateral Trustee, for the benefit of, among others, the
Lenders, a security interest in such property and (ii) take all actions
necessary or advisable to grant to the Collateral Trustee, for the
benefit of, among others, the Lenders, a perfected first priority
security interest in such property, including the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may
be requested by the Agent.
(b) With respect to any new direct Subsidiary (other than a
Subsidiary that is an Excluded Asset) created or acquired after the
Closing Date by the Borrower, the Borrower shall promptly (i) execute
and deliver to the Collateral Trustee such amendments to the Security
Documents as the Agent deems necessary or advisable to grant to the
Collateral Trustee, for the benefit of, among others, the Lenders, a
perfected first priority security interest in the capital stock of such
new Subsidiary, (ii) deliver to the Collateral Trustee the certificates
representing such capital stock, together with undated stock powers, in
blank, executed and delivered by a duly authorized officer of the
Borrower, and (iii) if reasonably requested by the Agent, deliver to
the Agent legal opinions (which may be from in-house counsel) relating
to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Agent.
SECTION 8.1.10. Ownership Interests. CNGH shall at all times directly
or indirectly own 100% of all equity interests of CCEC, which shall, in turn,
directly or indirectly own 100% of the equity interests in Saltend and in CCNGP.
CCNGP shall at all times own all of the Canadian Gas Reserves. The Borrower
shall at all times own 100% of the equity interests of CNGH. The Borrower shall
at all times own 100% of the equity interests of Calpine Holdings. Calpine
Holdings shall at all times own 100% of the equity interests of CCFCI. CNGH
shall at all times own 100% of the equity interests of CCI; CCI shall at all
times own 100% of the equity interests of QM, JOQ, and QCH; QM, JOQ and QCH
shall at all times own 100% of the equity interests of CCEC; CCEC shall at all
times own 100% of the equity interests of CCRC and CCNGC; and CCRC and CCNGC
shall at all times own 100% of the equity interests of CCNGP.
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Nothing in this Section 8.1.10 shall, however, be deemed to limit (i) the
reorganization of CCNGP's direct ownership such that the partnership interests
in CCNGP are owned and held by (A) a Subsidiary of the Borrower formed as a
result of the consolidation or merger of CCRC and CCNGC and (B) another
Subsidiary of the Borrower or a new Subsidiary of the Borrower formed by the
Borrower or one of its Subsidiaries, (ii) the ability of any one or more of QM,
JOQ or QCH to merge or consolidate with one or more of the others (subject only
to a delivery of a certificate in a form reasonably satisfactory to the Agent to
the effect that the merged entity would not be liable for any Obligations of
CCEF) or (iii) the ability of the Borrower and its Subsidiaries to enter into
transactions that are contemplated by Section 3.1.1(c)(i) through (vii) and
permitted under Section 8.2.10.
SECTION 8.1.11. Incremental Domestic Gas Reserves. The Borrower shall
cause all acquisitions of additional Domestic Gas Reserves after the Closing
Date to be made by the Borrower, a Subsidiary of the Borrower that is a Pledged
Entity or a Subsidiary of any such Subsidiary.
SECTION 8.1.12. Gas Reserves. Within 60 days after the acquisition of
any Domestic Gas Reserves by the Borrower after the Closing Date, the Borrower
shall execute and deliver to the Collateral Trustee such mortgages, deeds of
trust, assignments, security agreements, financing statements and/or fixture
filings, together with any additional supporting documentation, as shall be
reasonably requested by the Agent in order to perfect a security interest in
favor of the Collateral Trustee (on behalf of, among others, the Lenders) with
respect to such Domestic Gas Reserves. The Borrower (a) shall notify the Lenders
promptly after each acquisition by the Borrower or any of its Subsidiaries (in
one transaction or a series of related transactions) of Domestic Gas Reserves or
Canadian Gas Reserves having an aggregate value in excess of $5,000,000 and (b)
shall provide to the Lenders updates not less frequently than every six months
with respect to acquisitions by the Borrower and its Subsidiaries of Domestic
Gas Reserves and Canadian Gas Reserves, in each case indicating the size,
location and purchase price of such reserves.
SECTION 8.2. Negative Covenants. The Borrower agrees with the Agent and
each Lender that, from and after the Closing Date until all Revolving Loan
Commitments have terminated and all Obligations have been paid and performed in
full, the Borrower will perform the obligations set forth in this Section 8.2.
SECTION 8.2.1. Business Activities. The Borrower will not, and will not
permit any of its Subsidiaries or Joint Ventures to, engage in any business
activity, except the business of acquiring, developing, constructing, owning and
operating power generation facilities, purchasing, developing and selling
electricity and steam (including geothermal steam and fluids), purchasing,
developing and selling natural gas and other fuels and related marketing
activities, and such activities as may be incidental or related thereto;
provided, however, that up to ten percent (10%) of the consolidated net assets
of the Borrower and its Subsidiaries may be used for unrelated businesses.
SECTION 8.2.2. Indebtedness. The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:
69
(a) (i) Indebtedness created in connection with any Loan
Document, (ii) any Indebtedness existing as of the Closing Date, (iii)
any Indebtedness evidenced by promissory notes pledged to the
Collateral Trustee pursuant to the Security Documents and (iv) the 2003
Senior Notes, the Second Priority B Loans and any Parity Lien Debt;
(b) Indebtedness which is incurred by the Borrower or any of
the Borrower's Subsidiaries to a vendor of any assets to finance the
acquisition of such assets so long as the only recourse of such vendor
is to some or all of the assets so financed;
(c) unsecured Indebtedness incurred in the ordinary course of
business (including open accounts extended by suppliers on normal trade
terms in connection with purchases of goods and services, but excluding
Indebtedness incurred through the borrowing of money or Contingent
Liabilities);
(d) (i) Indebtedness of the Borrower which is owed to and held
by a Subsidiary (it being understood and agreed that the obligations of
the Borrower under its subordinated debt securities issued to a Trust
in connection with the Guaranteed Preferred Securities are not
considered Indebtedness for purposes of this Agreement), (ii)
Indebtedness of a Subsidiary which is owed to and held by the Borrower
and (iii) Indebtedness of a Subsidiary which is owed to and held by a
Subsidiary; provided, however, that any subsequent transfer of such
Indebtedness (other than to the Borrower or a Subsidiary) shall be
deemed, in each case, to constitute the incurrence of such Indebtedness
by the Borrower or by a Subsidiary, as the case may be;
(e) Non-Recourse Debt of a Subsidiary of the Borrower other
than CES;
(f) (i) Unsecured Subordinated Debt of the Borrower and other
unsecured Indebtedness of the Borrower if, after giving effect to the
issuance thereof, the Interest Coverage Ratio calculated as of the end
of the most recent Fiscal Quarter on a pro forma basis is equal to or
greater than 2.00 to 1.00 and (ii) unsecured Indebtedness of any
Subsidiary of the Borrower (other than Indebtedness for borrowed money)
incurred in the ordinary course of business up to an aggregate
principal amount of $100,000,000 at any one time outstanding;
(g) Indebtedness secured by property or assets acquired by, or
owned by any Person acquired by, the Borrower or any of its
Subsidiaries that was in existence at the time such property, assets or
Person are acquired so long as such Indebtedness was not incurred in
contemplation of such acquisition; provided, however, that the Borrower
would have been able to incur such Indebtedness at the time of closing
of such acquisition pursuant to clause (f) above (assuming for purposes
of this proviso that such Indebtedness was unsecured);
(h) unsecured Indebtedness of the Borrower or any of its
Subsidiaries arising from the endorsements of instruments for
collection in the ordinary course of business;
(i) Indebtedness of the Borrower or any of its Subsidiaries
with respect to surety, appeal, indemnity, performance or other similar
bonds in the ordinary course of business;
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(j) Hedging Obligations and Contingent Obligations associated
therewith and other unsecured Contingent Liabilities of the Borrower or
any of its Subsidiaries, in each case incurred in the ordinary course
of business and not for speculative purposes and consistent with
applicable risk management guidelines established by the Borrower from
time to time;
(k) Indebtedness in respect of commercial paper issued and
sold in the commercial paper market in an aggregate principal or stated
amount not to exceed the unused availability under this Agreement;
(l) secured Indebtedness of the Borrower or any of its
Subsidiaries (other than Indebtedness permitted under clause (e) above
or clause (m) below) so long as (i) recourse for any such Indebtedness
is limited solely to the asset or assets securing such Indebtedness and
(ii) the Net Available Cash with respect thereto is applied in
accordance with Section 3.1.1(c);
(m) Non-Recourse Debt of CES (including any CES Credit
Facility) so long as (i) the aggregate outstanding principal amount of
such Indebtedness, together with the aggregate Fair Market Value of CES
Assets subject to Asset Sales and other Monetizations by CES which have
been permitted under Section 8.2.10(c)(v), shall not exceed
$500,000,000 during the term of this Agreement and (ii) other than with
respect to the CES Credit Facility, the Net Available Cash with respect
thereto is applied in accordance with Section 3.1.1(c);
(n) Contingent Liabilities of the Borrower in respect of
Indebtedness of any Subsidiary which, but for such Contingent
Liabilities, would be permitted to be incurred pursuant to clause (e)
above; provided that the aggregate principal amount of Indebtedness
incurred pursuant to this clause (n) shall not exceed $100,000,000 at
any one time outstanding;
(o) Indebtedness incurred by any Subsidiary of the Borrower
represented by letters of credit (or Contingent Liabilities in
connection therewith) entered into in the ordinary course of business
to the extent that such letters of credit are not drawn upon or, if and
to the extent drawn upon, such drawing is reimbursed no later than the
tenth Business Day following a demand for reimbursement following
payment on the letter of credit; provided that no such letter of credit
shall constitute Indebtedness permitted pursuant to this clause (o) if
it is issued in support of Indebtedness;
(p) Indebtedness of Xxxxxxxxx Turbine Services B.V., a Dutch
company, incurred for working capital purposes in an aggregate
principal amount not to exceed $5,000,000 (or the equivalent thereof)
at any one time outstanding;
(q) Indebtedness of the Borrower under the Letter of Credit
Agreement; and
(r) refinancings, refundings, extensions, renewals or
replacements of any of the foregoing permitted Indebtedness; provided
that the outstanding principal amount of such Indebtedness is not
increased (other than by an amount necessary to pay fees and expenses,
including premiums, related to the refinancing, refunding, extension,
renewal
71
or replacement of such Indebtedness), no obligor under such
Indebtedness is liable for any such Indebtedness except to the extent
it was liable for the Indebtedness so renewed or refinanced and if the
Indebtedness being refinanced is subordinated to the Obligations, such
Indebtedness shall be subordinated at least to the same extent;
provided, further, that the limitations set forth in this clause (r)
shall not apply to Indebtedness which is otherwise permitted under this
Section 8.2.2, even if such Indebtedness is used to repay or refinance
other existing Indebtedness.
provided, however, that no Indebtedness otherwise permitted by clauses (d)(ii),
(f), (g), (j) or (k) shall be incurred if, after giving effect to the incurrence
thereof, any Default (other than a Nonmaterial Subsidiary Default) shall have
occurred and be continuing and provided further that in no event shall CCNGP or
any of its direct or indirect parent entities (other than any direct or indirect
parent entities of QM, JOQ or QCH) create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness other than, without
duplication, Indebtedness permitted by clauses (a), (b), (c), (d)(ii), (d)(iii)
(provided that any such Indebtedness permitted by clause (d)(iii) shall be owed
to and held by a Subsidiary that is a Pledged Entity or a Subsidiary of a
Pledged Entity), (h), (i) and (r) of this Section 8.2.2.
SECTION 8.2.3. Liens. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any
of its property, revenues or assets, whether now owned or hereafter acquired,
except:
(a) Liens securing payment of the Obligations granted pursuant
to any Loan Document;
(b) Liens granted prior to the Closing Date to secure payment
of Indebtedness of the type permitted and described in clause (a) of
Section 8.2.2;
(c) Liens granted to secure payment of Indebtedness of the
type permitted and described in clause (b) of Section 8.2.2 where
recourse is limited as described in clause (b) of Section 8.2.2;
(d) Liens for taxes, assessments or other governmental charges
or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(e) Liens of carriers, warehousemen, mechanics, materialmen
and landlords incurred in the ordinary course of business for sums not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(f) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance
of tenders, statutory obligations, leases and contracts (other than for
borrowed money) entered into in the ordinary course of business or to
secure obligations on surety or appeal bonds;
72
(g) judgment Liens in existence less than 15 days after the
entry thereof or with respect to which execution has been stayed or the
payment of which is covered in full (subject to a customary deductible)
by insurance maintained with responsible insurance companies;
(h) Liens granted to secure payment of Indebtedness of the
type permitted and described in clauses (g) and (l) of Section 8.2.2
where recourse is limited as described in clauses (g) or (l), as
applicable, of Section 8.2.2;
(i) Zoning restrictions, easements, rights of way, title
irregularities and other similar encumbrances which alone or in the
aggregate do not materially detract from the value of the property
subject thereto;
(j) Liens on the property or assets of any Subsidiary of the
Borrower in favor of the Borrower;
(k) Banker's Liens and similar Liens (including set-off
rights) in respect of bank deposits;
(l) Landlord's Liens and similar Liens in respect of leased
property;
(m) Liens securing Attributable Debt with respect to
outstanding leases entered into pursuant to Sale/Leaseback Transactions
so long as, with respect to Sale/Leaseback Transactions closing after
January 1, 2002, the amount thereof does not exceed 10% of the
consolidated tangible assets of the Borrower and its Subsidiaries;
(n) (A) Liens on assets or property of a Subsidiary (other
than Material Designated Assets) incurred by any Subsidiary to secure
Indebtedness of such Subsidiary incurred to finance the exploration, drilling,
development, construction or purchase of or by, or repairs, improvements or
additions to, property or assets of the Borrower or such Subsidiary, which Liens
may include Liens on the capital stock or other comparable ownership interest of
such Subsidiary (other than CES or any Subsidiary that (i) is a direct
Subsidiary of the Borrower, (ii) owns, directly or indirectly, Material
Designated Assets or (iii) is a Pledged Entity); (B) Liens (other than Liens on
Material Designated Assets) incurred by any Subsidiary that does not own,
directly or indirectly, at the time of original incurrence of such a Lien under
this clause (B) any Material Designated Assets or any operating properties or
assets, securing Indebtedness incurred to finance the exploration, drilling,
development, construction or purchase of or by, or repairs, improvements or
additions to, property or assets of any Subsidiary that does not, directly or
indirectly, own any operating properties or assets at the time of the original
incurrence of such Lien, which Liens contemplated by this clause (n) may include
Liens on the capital stock or other comparable ownership interest of one or more
Subsidiaries (other than CES) that (i) are not direct Subsidiaries of the
Borrower, (ii) do not, directly or indirectly, own any Material Designated
Assets or operating properties or assets at the time of original incurrence of
such Lien and (iii) are not Pledged Entities; or (C) without duplication, Liens
(other than Liens on Material Designated Assets) incurred by any Subsidiary
(which Liens may include Liens on the capital stock or other comparable
73
ownership interest of such Subsidiary (other than CES) so long as such
Subsidiary is not a Pledged Entity) that owns as of the Closing Date all or part
of one or more of the peaking power plants (and no other significant unrelated
assets) constructed for the purpose of providing peaking capacity and energy to
the California Department of Water Resources; provided that the Indebtedness
secured by any such Lien contemplated by this clause (n) may not be issued more
than 365 days (or, in the case of clause (C) above, two years) after the later
of the exploration, drilling, development, completion of construction, purchase,
repair, improvement, addition or commencement of full commercial operation of
the property or asset being so financed;
(o) Liens on assets of Subsidiaries to secure letters of
credit issued pursuant to Section 8.2.2(o); provided that if and to the
extent such letters of credit are drawn upon, such drawing is
reimbursed no later than the tenth Business Day following a demand for
reimbursement following payment on the letter of credit;
(p) Liens (i) on cash and short-term investments of
Subsidiaries to secure obligations with respect to (A) contracts for
commercial and trading activities in the ordinary course of business
and contracts (including physical delivery, option (whether cash or
financial), exchange, swap and futures contracts) for the purchase,
transmission, distribution, sale, lease or hedge of any energy-related
commodity or service or (B) interest rate, commodity price, or currency
rate management contracts or derivatives and (ii) encumbering assets of
a Subsidiary, other than (A) Material Designated Assets or (B) accounts
or receivables, which Liens arise out of contracts or agreements
relating to the generation, distribution or transmission or sale of
energy and/or fuel; provided that all such agreements or contracts are
entered into in the ordinary course of business;
(q) Liens on assets of Xxxxxxxxx Turbine Services B.V., a
Dutch company, securing Indebtedness permitted under Section 8.2.2(p);
(r) Liens incurred by the Borrower on cash in an amount not to
exceed $200,000,000 plus any earnings thereon, which Liens secure
obligations of the Borrower under the Letter of Credit Agreement; and
(s) Liens incurred in connection with the refinancing,
refunding, extension, renewal or replacement (or successive
refinancings, refundings, extensions, renewals or replacements) of
Indebtedness secured by Liens permitted and described in clauses (b),
(c), (h), (n), (o), (q) and (r) of this Section 8.2.3; provided,
however, that (x) such new Lien shall be limited to all or part of the
same property or assets that secured the original Lien (plus repairs,
expansions, enhancements, improvements and additions to such property
or assets) and (y) the Indebtedness secured by such Lien at such time
is not increased (other than by an amount necessary to pay fees and
expenses, including premiums, related to the refinancing, refunding,
extension, renewal or replacement of such Indebtedness); provided,
further, that the limitations set forth in this clause (s) shall not
apply to Liens which are otherwise permitted under this Section 8.2.3,
even if such Liens secure Indebtedness issued to repay or refinance
existing Indebtedness permitted and described in clauses (b), (c), (h),
(n), (o), (q) and (r) of this Section 8.2.3.
74
Without limitation of the foregoing, in no event shall CCNGP or any of
its direct or indirect parent entities (other than any direct or
indirect parent entities of QM, JOQ or QCH) create, incur, assume or
suffer to exist a Lien upon any of its property, revenues, or assets,
whether now owned or hereafter acquired, except for Liens permitted by
clauses (a) through (g), (i) through (l), (o), (p) and (s) of this
Section 8.2.3.
SECTION 8.2.4. Financial Condition. The Borrower will not permit:
(a) Its Tangible Net Worth to be less than (i) $4,200,000,000
plus (ii) 50% of the Consolidated Net Income of the Borrower and its
Subsidiaries (without giving effect to any losses) for each Fiscal
Quarter ending on or after June 30, 2003 plus (iii) 100% of the Net
Equity Proceeds from any equity offering by the Borrower after the
Closing Date.
(b) Its Leverage Ratio to be greater than .80 to 1.00 as of
the end of any Fiscal Quarter.
(c) Its Interest Coverage Ratio as of the end of any Fiscal
Quarter, to be less than 1.75 to 1.00 for the twelve (12) month period
comprising the four previous Fiscal Quarters.
(d) Its Interest Coverage Ratio (Parent Only) as of the end of
any Fiscal Quarter, to be less than 1.60 to 1.00 for the twelve (12)
month period comprising the four previous Fiscal Quarters.
SECTION 8.2.5. Investments. The Borrower will not, and will not permit
any of its Subsidiaries to, make, incur, assume or suffer to exist any
Investment in any other Person, whether done in a single transaction or a series
of related transactions, except:
(a) Investments existing on the Closing Date;
(b) Cash Equivalent Investments or Investments (as defined in
the High Yield Indentures) by a Restricted Subsidiary in the Borrower
or any other Restricted Subsidiary;
(c) Investments by the Borrower in any of its Subsidiaries or
in any Person that becomes a Subsidiary as a result of such Investment
or in any Investment Joint Venture of the Borrower or Investments by
the Borrower's Subsidiaries in other Subsidiaries or in any Person that
becomes a Subsidiary as a result of such Investment or in any
Investment Joint Venture of the Borrower, whether now existing or
hereafter organized in lines of business of the Borrower and its
Subsidiaries permitted under Section 8.2.1 by way of contributions to
capital or loans or advances (including guarantees and other forms of
Contingent Liabilities to the extent that the occurrence of the
obligations being guaranteed or supported would otherwise be permitted
hereunder);
(d) Investments by the Borrower or any of its Subsidiaries
constituting contributions of the stock or assets of CES to Persons
that are neither Subsidiaries of the Borrower nor Investment Joint
Ventures of the Borrower in connection with the establishment of a
trading joint venture or similar arrangement; provided that no such
75
Investment shall be permitted hereunder unless the equity interests of
the Borrower in such trading joint venture or similar arrangement are
pledged by the Borrower to the Collateral Trustee for the benefit of,
among others, the Lenders pursuant to a pledge agreement to be executed
concurrently with the making of such Investment; and
(e) from and after the Closing Date, in the ordinary course of
business, Investments by the Borrower or any of its Subsidiaries in
Persons that are not Subsidiaries of the Borrower or Investment Joint
Ventures of the Borrower so long as such Persons are engaged only in
permitted lines of business of the Borrower and its Subsidiaries and
lines of business related thereto and so long as no such single
Investment (or series of related Investments) exceeds 5% of the
Borrower's consolidated tangible assets as of the end of the most
recent Fiscal Quarter for which the Borrower has delivered the
financial statements required under Section 8.1.1 hereof and the
aggregate of all such Investments at any time outstanding does not
exceed 10% of the Borrower's consolidated tangible assets as of the end
of the most recent Fiscal Quarter for which the Borrower has delivered
the financial statements required under Section 8.1.1 hereof;
provided, however, that
(f) any Investment which when made complies with the
requirements of the definition of the term "Cash Equivalent Investment"
may continue to be held notwithstanding that such Investment if made
thereafter would not comply with such requirements; and
(g) no Investment otherwise permitted by clauses (c), (d) or
(e) shall be permitted to be made if, immediately after giving effect
thereto, any Material Adverse Effect or any Default (other than a
Nonmaterial Subsidiary Default) shall have occurred and be continuing.
SECTION 8.2.6. Restricted Payments, etc. On and at all times after the
Closing Date:
(a) the Borrower will not declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of any
class of capital stock (now or hereafter outstanding) of the Borrower
or on any warrants, options or other rights with respect to any shares
of any class of capital stock (now or hereafter outstanding) of the
Borrower (other than dividends or distributions payable in its common
stock or warrants to purchase its common stock or splitups or
reclassifications of its stock into additional or other shares of its
common stock) or apply, or permit any of its Subsidiaries (other than
Restricted Subsidiaries) to apply, any of its funds, property or assets
to the purchase, redemption, sinking fund or other retirement of, or
agree or permit any of its Subsidiaries (other than Restricted
Subsidiaries) to purchase or redeem, any shares of any class of capital
stock (now or hereafter outstanding) of the Borrower, or warrants,
options or other rights with respect to any shares of any class of
capital stock (now or hereafter outstanding) of the Borrower;
(b) the Borrower will not, and will not permit any of its
Subsidiaries to make any payment or prepayment of principal of, or make
any payment of interest in respect of, or
76
redeem, purchase or defease any Restricted Capital (any such payment,
prepayment, redemption, purchase or defeasance, a "Restricted Capital
Payment"), other than Restricted Capital Payments on the scheduled
dates and in the amounts provided in the documentation therefor as in
effect on the Closing Date (provided that any such payments would not
violate the subordination provisions of any Subordinated Debt),
provided that, subject to each of the other clauses of this Section
8.2.6, (A) the Borrower shall be permitted to make Restricted Capital
Payments in respect of all or a portion of the Repayable Restricted
Capital if (x) both before and after giving effect thereto, no Default
shall have occurred or be continuing and there are no Loans outstanding
or Letter of Credit Outstandings hereunder or (y) both before and after
giving effect thereto, no Default shall have occurred and be continuing
and the aggregate amount of all such Restricted Capital Payments shall
not exceed $400,000,000 (the "Senior Notes Basket"); (B) the Borrower
shall be permitted to make Restricted Capital Payments in respect of
all or a portion of the Repayable Restricted Capital, in addition to
those permitted by clause (A) immediately preceding, with the sum (the
"Excess Proceeds Basket") of (x) the gross proceeds of the offering of
the 2003 Senior Notes and the Second Priority B Loans to the extent
such gross proceeds exceed $1,800,000,000, (y) an amount equal to the
aggregate Net Available Cash with respect to any Asset Sale or
Monetization by the Borrower of the Gilroy Receivable and/or any Asset
Sale of uninstalled turbines or equipment, to the extent that the
Borrower is entitled to use such amount for such purpose pursuant to
Section 3.1.1(c)(i)(A) and (z) an amount equal to 50% of the portion
that has not been utilized pursuant to clause (G)(ii) below of the Net
Equity Proceeds with respect to common stock of the Borrower issued
more than 60 days prior to the date of such Restricted Capital Payment;
(C) the Borrower shall be permitted to make Restricted Capital Payments
(i) in connection with refinancings, refundings, extensions, renewals
or replacements of Indebtedness permitted under Section 8.2.2(r) or
(ii) with the proceeds of Parity Lien Debt; (D) any Restricted Capital
Payment in respect of Repayable Restricted Capital permitted hereunder
shall be at a price in respect of principal thereof not to exceed $1.00
per $1.00 of the principal amount of such Repayable Restricted Capital,
(E) no Restricted Capital Payment in respect of Repayable Restricted
Capital having a final maturity date prior to the Stated Maturity Date
of the Term B Loans shall be made with the proceeds of any Indebtedness
(other than the 2003 Senior Notes, the Second Priority B Loans and any
Parity Lien Debt); (F) Restricted Capital Payments may be made with
respect to Convertible Senior Notes, Guaranteed Preferred Securities
and/or Convertible Subordinated Debentures (i) in accordance with the
Prepayment Letter Agreement and (ii) with the proceeds of, or in
exchange for, securities having substantially similar terms to the
securities in respect of which such Restricted Capital Payment is made,
except that such newly issued securities must have (x) a later final
maturity and a longer weighted average life to maturity than the
securities refinanced therewith and (y) an interest or dividend rate,
as applicable, consistent with those prevailing at the time of issuance
thereof in the market for similar securities; and (G) any Restricted
Capital Payment may be made with (i) common stock of the Borrower or
(ii) the Net Equity Proceeds with respect to common stock of the
Borrower issued not more than 60 days prior to the date of such
Restricted Capital Payment, in which case such Restricted Capital
Payment shall not be deemed a usage of the Senior Notes Basket or the
Excess Proceeds Basket and the limitations imposed by clause (D) above
shall not be applicable thereto;
77
(c) the Borrower will not, and will not permit any Subsidiary
to, make any deposit for any of the purposes described in clauses (a)
or (b) of this Section 8.2.6 except to the extent a payment, prepayment
or other Restricted Capital Payment would be otherwise permitted
hereunder; and
(d) the Borrower will not, and will not permit any of its
Subsidiaries to, make any voluntary prepayment of principal of any
Indebtedness (other than the Loans and payments by any Subsidiary on
Indebtedness permitted to be incurred under Section 8.2.2(d)(ii) or
(d)(iii) (provided that any such Indebtedness shall be owed to and held
by (i) a Restricted Subsidiary or (ii) a Subsidiary that is a Pledged
Entity or a Subsidiary of a Pledged Entity)), if either before or after
giving effect thereto, there shall exist a Default (other than a
Nonmaterial Subsidiary Default) or an Event of Default.
SECTION 8.2.7. Capital Expenditures and Investments. The Borrower will
not, and will not permit any of its Subsidiaries to, (a) make or commit to make
Capital Expenditures for or Investments in, or in connection with, any new
project if a Default or Event of Default shall have occurred and be continuing
or (b) make Capital Expenditures (excluding for purposes of this clause (b) any
such Capital Expenditure or portion thereof made with the proceeds of any
Non-Recourse Debt which is permitted to be incurred under Section 8.2.2) during
any period set forth below in an aggregate amount for the Borrower and its
Subsidiaries in excess of the amount set forth for such period below.
PERIOD AMOUNT
------ ------
Closing Date through December 31, 2003 $ 862,500,000
2004 Fiscal Year $1,150,000,000
2005 Fiscal Year $ 500,000,000
SECTION 8.2.8. Rental Obligations. The Borrower shall not enter into
any arrangement which does not create a Capitalized Lease Liability or a
Sale/Leaseback Transaction and which involves the leasing by the Borrower from
any lessor of any real or personal property (or any interest therein), except
for arrangements which, together with all other such arrangements which shall
then be in effect, will not require the payment of an aggregate amount of
rentals by the Borrower in excess of (excluding escalations resulting from a
rise in the consumer price or similar index) $25,000,000 in any Fiscal Year;
provided, however, that any calculation made for purposes of this Section 8.2.8
shall exclude any amounts required to be expended for maintenance and repairs,
insurance, taxes, assessments, and other similar charges.
SECTION 8.2.9. Consolidation, Merger, etc. The Borrower will not, and
will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate
with, or merge into or with, any other corporation, or purchase or otherwise
acquire all or substantially all of the assets of any Person (or of any division
thereof) except:
(a) the Borrower or a Wholly Owned Subsidiary may merge with
another Person if (i) (A) Borrower or such Subsidiary is the continuing
Person following such merger or (B) in the case of a merger by the
Borrower, the Person (if other than the Borrower)
78
formed by such merger (including a consolidation effected by a sale or
transfer of all or substantially all of the assets of a Person) is a
corporation organized and existing under the laws of the United States
or any State thereof or the District of Columbia and expressly assumes
the obligations of the Borrower under this Agreement, (ii) such merger
or consolidation is otherwise permitted under the Senior Note
Indentures, (iii) no Default (other than a Nonmaterial Subsidiary
Default) has occurred and is continuing or would occur after giving
effect thereto and (iv) after giving effect thereto, (x) the Rating by
S&P shall be BB- or higher or the Rating by Xxxxx'x shall be Ba3 or
higher; provided that if the Ratings by the Rating Agencies shall be at
different levels, the Rating by the Rating Agency with the lower of
such Ratings shall be no more than one level below the Rating of the
Rating Agency with the higher of such Ratings;
(b) any Subsidiary may liquidate or dissolve voluntarily into,
and may merge with and into, the Borrower or any other Subsidiary, and
the assets or stock of any Subsidiary may be purchased or otherwise
acquired by the Borrower or any other Subsidiary; provided, however,
that if any Subsidiary that is a Pledged Entity shall merge with any
other Subsidiary that is not a Pledged Entity, such Pledged Entity
shall be the continuing Person following such merger; and provided,
further, that if any Subsidiary that is a Pledged Entity shall
liquidate or dissolve voluntarily into, or merge into, the Borrower or
any other Subsidiary, or the assets or stock of any such Subsidiary are
purchased or otherwise acquired by the Borrower or any other
Subsidiary, the assets of such Subsidiary shall be transferred (whether
by means of merger or otherwise) (i) to the Borrower (and pledged by
the Borrower as collateral security for the Obligations) or (ii) to
another Subsidiary that is a Pledged Entity;
(c) so long as no Default (other than a Nonmaterial Subsidiary
Default) has occurred and is continuing or would occur after giving
effect thereto, the Borrower or any of its Subsidiaries may purchase
all or substantially all of the assets or stock of any Person if
permitted by Section 8.2.5 and Section 8.2.7; and
(d) a Subsidiary may consolidate with, or merge into or with,
another Person that is not the Borrower or a Subsidiary of the Borrower
to the extent otherwise permitted under Section 8.2.10.
SECTION 8.2.10. Asset Dispositions, etc. The Borrower will not, and
will not permit any of its Subsidiaries to, sell, transfer, lease, contribute or
otherwise convey, or grant options, warrants or other rights with respect to,
all or any substantial part of its assets (including accounts receivable and
capital stock of Subsidiaries) to any Person (other than to the Borrower or any
Subsidiary), whether done in a single transaction or a series of related
transactions, unless
(a) such sale, transfer, lease, contribution or conveyance is
(i) in the ordinary course of its business or (ii) permitted by Section
8.2.9; or
(b) in the event such sale, transfer, lease, contribution or
conveyance involves the Domestic Gas Reserves or Canadian Gas Reserves,
such sale, transfer, lease, contribution or conveyance, individually
and taken together with all sales, transfers, leases, contributions or
conveyances within the period of twelve consecutive calendar months
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during which such sale, transfer, lease, contribution or conveyance
occurs, is a Permitted Sale; or
(c) such sale, transfer, lease, contribution or conveyance is
not covered by clauses (a) or (b) above and (i) the Borrower or its
Subsidiary receives consideration at the time of such sale, transfer,
lease, contribution or conveyance at least equal to the Fair Market
Value of assets being sold, transferred, leased, contributed or
conveyed; (ii) at least seventy-five percent (75%) of the consideration
received by the Borrower or such Subsidiary is in the form of cash or
cash equivalents (other than with respect to the sale of the Gilroy
Receivable, as to which there shall not be any minimum cash
consideration requirement); (iii) in the case of all Asset Sales (other
than the sale of the Gilroy Receivable), any non-cash consideration
received by the Borrower or such Subsidiary in the form of Restricted
Capital shall be deemed to be a usage of the Senior Notes Basket in an
amount equal to the Fair Market Value of such Restricted Capital as of
the date of consummation of such Asset Sale; (iv) in the case of the
sale of the Gilroy Receivable, any non-cash consideration received by
the Borrower or such Subsidiary shall not be deemed to be a usage of
the Senior Notes Basket; (v) in the case of any Asset Sale or
Monetization of CES Assets by CES (including any incurrence of secured
Indebtedness by CES permitted under Section 8.2.2(m)), (A) such Asset
Sale or Monetization provides for no recourse to the Borrower or any of
its Subsidiaries (other than representations, warranties, covenants and
indemnities entered into by the Borrower or any of its Subsidiaries
which are customary in comparable Asset Sale or Monetization
transactions) or any Lien on or recourse to any of their assets other
than to CES and its Subsidiaries or to CES Assets (excluding, for
avoidance of doubt, any capital stock of CES) and (B) the aggregate
Fair Market Value of the CES Assets subject to all such Asset Sales and
Monetizations, together with the aggregate outstanding principal amount
of Non-Recourse Debt of CES incurred under Section 8.2.2(m), shall not
exceed $500,000,000 during the term of this Agreement; (vi) in the case
of any assets sold, transferred, leased, contributed or conveyed by the
Borrower or any Subsidiary of the Borrower organized under the laws of
the United States (or any State thereof, including the District of
Columbia) to any Subsidiary of the Borrower organized under the laws of
Canada or any province or territory thereof, the aggregate Fair Market
Value of all such assets shall not exceed $100,000,000; and (vii) all
prepayments required in respect thereof pursuant to Sections 2.2.2 and
3.1.1 are made in accordance therewith.
SECTION 8.2.11. Modification of Certain Agreements. The Borrower will
not consent to any amendment, supplement or other modification of any of the
terms or provisions contained in, or applicable to, any Restricted Capital
described in clause (i) of the definition thereof, or any document or instrument
evidencing or applicable thereto, other than (i) any amendment, supplement or
other modification which (A) extends the date or reduces the amount of any
required repayment or redemption or (B) cures any ambiguity, omission, defect or
inconsistency therein or in any documentation under which such Restricted
Capital is issued or incurred so long as such a cure is not adverse to the
interests of the Lenders or (ii) any other change that is not adverse to the
interests of the Lenders or that has been approved by the Required Lenders.
SECTION 8.2.12. Transactions with Affiliates. Except for transactions
between the Borrower and its Wholly Owned Subsidiaries or Cogen America or
between one Wholly Owned
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Subsidiary and another Wholly Owned Subsidiary or Cogen America, the Borrower
will not, and will not permit any of its Subsidiaries to, enter into, or cause,
suffer or permit to exist any arrangement or contract with any of its other
Affiliates unless such arrangement or contract is fair and equitable to the
Borrower or such Subsidiary and is an arrangement or contract of the kind which
would be entered into by a prudent Person in the position of the Borrower or
such Subsidiary with a Person which is not one of its Affiliates.
SECTION 8.2.13. Negative Pledges, Restrictive Agreements, etc. The
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any agreement which:
(i) prohibits the creation or assumption of any
Lien upon its properties, revenues or assets, whether now
owned or hereafter acquired, or the ability of the Borrower or
any other Obligor to amend or otherwise modify this Agreement
or any other Loan Document; or
(ii) restricts the ability of any Subsidiary to
make any payments, directly or indirectly, to the Borrower by
way of dividends, advances, repayments of loans or advances,
reimbursements of management and other intercompany charges,
expenses and accruals or other returns on investments, or
restricts the ability of any such Subsidiary to make any
payment, directly or indirectly, to the Borrower;
provided, however, that the above restriction shall not be applicable to (A)
this Agreement or any other Loan Document; (B) any agreement governing
Indebtedness permitted under Section 8.2.2(a), (b), (e), (f), (g), (j) (provided
that the Borrower has delivered to the Agent a certificate of an Authorized
Officer of the Borrower certifying that the provision contained in such
agreement, which would otherwise cause such agreement to violate this Section
8.2.13, (I) is required in order to enter into such agreement, (II) is customary
for such agreements and (III) applies only to the Person entering into such
agreement and its Subsidiaries), (l), (m), (o) (provided that any such
agreement, but for this proviso, would violate only clause (i) of this Section
8.2.13) or (p) (and refinancings, extensions and renewals of such Indebtedness
permitted under Section 8.2.2(r)); (C) any agreement in respect of a
Sale/Leaseback Transaction permitted under Section 8.2.3(m); or (D) any
agreement pursuant to which any preferred equity shall be issued (provided that
the provision contained in such agreement, which would otherwise cause such
agreement to violate this Section 8.2.13, restricts only the right of the issuer
of such preferred equity to pay dividends on the common equity of such issuer
while any arrearage exists in the payment of dividends on such preferred
equity).
SECTION 8.2.14. Amendments to Canadian Documentation. The Borrower will
not, and will not permit CCEC, CCEF or QCH, to amend the contractual
arrangements among CCEC, QCH and CCEF in respect of the term debentures dated
April 25, 2001, August 14, 2001 and August 23, 2001 between CCEC and CCEF and
the documentation executed in connection therewith or the memorandum of
association or articles of association of CCEC without the prior written consent
of the Agent and the Arrangers, which consent shall not be unreasonably withheld
or delayed. The Borrower will not permit any amendments to be made to the
articles of incorporation of any Guarantor without the prior written consent of
the Agent and the Arrangers, which consent shall not be unreasonably withheld or
delayed. Nothing in this Section 8.2.14
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shall, however, be deemed to limit the ability of any one or more of QM, JOQ or
QCH to merge or consolidate with one or more of the others (subject only to a
delivery of a certificate in a form reasonably satisfactory to the Agent to the
effect that the merged entity would not be liable for any Obligations of CCEF).
SECTION 8.2.15. Restrictions on Issuance of Preferred Equity. No
Subsidiary of the Borrower shall issue any preferred or preference capital stock
or other capital stock with rights prior to or in addition to those contained in
common equity, other than any such equity issued by a Subsidiary of the Borrower
(other than a Subsidiary that owns, directly or indirectly, any Material
Designated Assets), the net proceeds of which are applied to finance the
exploration, drilling, development, construction or purchase of or by, or
repairs or improvements or additions to, property or assets of the Borrower or
any Subsidiary.
SECTION 8.3. No Restriction on Payments to the Borrower. Nothing herein
shall restrict the ability of any Subsidiary of the Borrower to make any payment
by way of dividends, advances, repayments of loans or advances, reimbursements
of management and other intercompany charges, expenses and accruals or other
returns on investments or any other payment, directly or indirectly, to the
Borrower.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1. Listing of Events of Default. Each of the following events
or occurrences described in this Section 9.1 shall constitute an "Event of
Default".
SECTION 9.1.1. Non-Payment of Obligations. The Borrower shall default
in the payment or prepayment when due of any principal of any Loan, the Borrower
shall default in the payment when due of any Reimbursement Obligation, or the
Borrower shall default (and such default shall continue unremedied for a period
of five days) in the payment when due of interest on any Loan, any fee or of any
other Obligation.
SECTION 9.1.2. Breach of Warranty. Any representation or warranty of
the Borrower or any other Obligor made or deemed to be made hereunder or in any
other Loan Document executed by it or any other writing or certificate furnished
by or on behalf of the Borrower or any other Obligor to the Agent or any Lender
for the purposes of or in connection with this Agreement or any such other Loan
Document (including any certificates delivered pursuant to Article VI) is or
shall be incorrect when made in any material respect.
SECTION 9.1.3. Non-Performance of Certain Covenants and Obligations.
The Borrower shall default in the due performance and observance of any of its
obligations under Section 8.2 or the Fee Letter and such default shall continue
unremedied for a period of 10 days after the earlier of (i) actual knowledge
thereof by the Borrower or (ii) notice thereof has been given to the Borrower by
the Agent or by any Lender.
SECTION 9.1.4. Non-Performance of Other Covenants and Obligations. Any
Obligor shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document executed by it, and
such default shall continue unremedied for a
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period of 30 days after notice thereof shall have been given to the Borrower by
the Agent or any Lender (or such longer period as the Required Lenders in their
discretion, may agree, provided that such Obligor has commenced such cure within
such 30 day period and thereafter diligently pursues such cure to completion).
SECTION 9.1.5. Default on Other Indebtedness. (a) A default shall occur
in the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 9.1.1) of the Borrower or any of its Significant
Subsidiaries or any other Obligor having a principal amount, individually or in
the aggregate, in excess of $10,000,000, (b) a default shall occur in the
performance or observance of any obligation or condition with respect to such
Indebtedness if the effect of such default is to accelerate the maturity of any
such Indebtedness or, in the case of the Borrower only, such default shall
continue unremedied for any applicable period of time sufficient to permit the
holder or holders of such Indebtedness, or any trustee or agent for such
holders, to cause such Indebtedness to become due and payable prior to its
expressed maturity (and notice of such default has been given to the relevant
borrower), (c) a default shall occur in the performance or observance of any
obligation or condition with respect to the Borrower's debt securities issued to
a Trust or to any Indebtedness of any Significant Subsidiary (other than CCFCI
and CCFCII) or Obligor, in either case having a principal amount in excess of
$10,000,000, and, as a result thereof, the holder or holders of such debt
securities or such Indebtedness, or any trustee or agent for such holders,
causes such securities or Indebtedness to be repaid more quickly than
theretofore scheduled, whether through the introduction of a "cash sweep," the
increase of an existing "cash sweep" or otherwise, or (d) a default of a type
described in clause (b) above shall occur with respect to any Indebtedness of
CCFCI or CCFCII having an unpaid principal amount in excess of $10,000,000
(whether or not such default actually results in the acceleration of the
applicable Indebtedness) and, as a result thereof, the holder or holders of such
debt securities or such Indebtedness, or any trustee or agent for such holders,
causes such securities or Indebtedness to be repaid more quickly than
theretofore scheduled, whether through the introduction of a "cash sweep," the
increase of an existing "cash sweep" or otherwise.
SECTION 9.1.6. Judgments. Any final judgment or order (not covered by
insurance) for the payment of money shall be rendered against the Borrower or
any Significant Subsidiary or any other Obligor in an amount in excess of
$25,000,000 (or its foreign currency equivalent) (treating any deductibles,
self-insurance or retention as not so covered) which is not stayed or discharged
within 30 days after entry of such final judgment or order, and there shall be
any period of more than 30 consecutive days following entry of the final
judgment or order in excess of $25,000,000 (or its foreign currency equivalent)
during which a stay of enforcement of such final judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect.
SECTION 9.1.7. Pension Plans. Any of the following events shall occur
with respect to any Pension Plan
(a) the institution of any steps by the Borrower, any member
of its Controlled Group or any other Person to terminate a Pension Plan
if, as a result of such termination, the Borrower or any such member
could be required to make a contribution to such
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Pension Plan, or could reasonably expect to incur a liability or
obligation to such Pension Plan, in excess of $10,000,000; or
(b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under Section 302(f) of ERISA.
SECTION 9.1.8. Control of the Borrower. Any Change in Control shall
occur.
SECTION 9.1.9. Bankruptcy, Insolvency, etc. The Borrower or any of its
Significant Subsidiaries or any other Obligor shall
(a) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness to pay, debts as they become
due;
(b) apply for, consent to, or acquiesce in, the appointment of
a trustee, receiver, sequestrator or other custodian for the Borrower
or any of its Significant Subsidiaries or any other Obligor or any
property of any thereof, or make a general assignment for the benefit
of creditors;
(c) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a trustee,
receiver, sequestrator or other custodian for the Borrower or any of
its Significant Subsidiaries or any other Obligor or for a substantial
part of the property of any thereof, and such trustee, receiver,
sequestrator or other custodian shall not be discharged within 60 days,
provided that the Borrower, each Significant Subsidiary and each other
Obligor hereby expressly authorizes the Agent and each Lender to appear
in any court conducting any relevant proceeding during such 60-day
period to preserve, protect and defend their rights under the Loan
Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution,
winding up or liquidation proceeding, in respect of the Borrower or any
of its Significant Subsidiaries or any other Obligor, and, if any such
case or proceeding is not commenced by the Borrower or such Significant
Subsidiary or such other Obligor, such case or proceeding shall be
consented to or acquiesced in by the Borrower or such Significant
Subsidiary or such other Obligor or shall result in the entry of an
order for relief or shall remain for 60 days undismissed, provided that
the Borrower, each Significant Subsidiary and each other Obligor hereby
expressly authorizes the Agent and each Lender to appear in any court
conducting any such case or proceeding during such 60-day period to
preserve, protect and defend their rights under the Loan Documents; or
(e) take any action authorizing any of the foregoing.
SECTION 9.1.10. Impairment of Security, etc. Any Loan Document, or any
Lien granted thereunder, shall (except in accordance with its terms), in whole
or in part, terminate, cease to be effective or cease to be the legally valid,
binding and enforceable obligation of any Obligor party thereto; or the
Borrower, any other Obligor or any Subsidiary shall, directly or indirectly,
contest in any manner such effectiveness, validity, binding nature or
enforceability; or
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any Lien securing any Obligation shall, in whole or in part, cease to be a
perfected first priority Lien, subject only to those exceptions expressly
permitted by such Loan Document.
SECTION 9.2. Action if Bankruptcy. If any Event of Default described in
clauses (a) through (d) of Section 9.1.9 shall occur with respect to the
Borrower or any Significant Subsidiary or any other Obligor, the Commitments (if
not theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations shall
automatically be and become immediately due and payable, without notice or
demand.
SECTION 9.3. Action if Other Event of Default. If any Event of Default
(other than any Event of Default described in clauses (a) through (d) of Section
9.1.9 with respect to the Borrower or any Significant Subsidiary or any other
Obligor) shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Agent, upon the direction of the Required Lenders, shall by
notice to the Borrower declare all or any portion of the outstanding principal
amount of the Loans and other Obligations to be due and payable and/or the
Commitments (if not theretofore terminated) to be terminated, whereupon the full
unpaid amount of such Loans and other Obligations which shall be so declared due
and payable shall be and become immediately due and payable, without further
notice, demand or presentment, and/or, as the case may be, the Commitments shall
terminate and the Agent may thereupon exercise any and all remedies available
under the Loan Documents and applicable law.
ARTICLE X
THE AGENT
SECTION 10.1. Actions. Each Lender hereby appoints Scotia Capital as
its Agent under and for purposes of this Agreement, the Notes and each other
Loan Document. Each Lender authorizes the Agent to act on behalf of such Lender
under this Agreement, the Notes and each other Loan Document and, in the absence
of other written instructions from the Required Lenders received from time to
time by such Person (with respect to which such Person agrees that it will
comply, except as otherwise provided in this Section or as otherwise advised by
counsel), to exercise such powers hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof, together
with such powers as may be reasonably incidental thereto. Each Lender hereby
indemnifies (which indemnity shall survive any termination of this Agreement)
the Agent and the Arrangers, pro rata according to such Lender's Aggregate
Percentage, from and against any and all liabilities, obligations, losses,
damages, claims, costs or expenses of any kind or nature whatsoever which may at
any time be imposed on, incurred by, or asserted against, the Agent or any
Arranger in any way relating to or arising out of this Agreement, the Notes and
any other Loan Document, including reasonable attorneys' fees, and as to which
the Agent or any Arranger is not reimbursed by the Borrower; provided, however,
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, claims, costs or expenses which are
determined by a court of competent jurisdiction in a final proceeding to have
resulted from the Agent's or any Arranger's, as the case may be, gross
negligence or willful misconduct. The Agent and the Arrangers shall not be
required to take any action hereunder, under the Notes or under any other Loan
Document, or to prosecute or defend any suit in respect of this Agreement, the
Notes or
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any other Loan Document, unless they are indemnified hereunder to its
satisfaction. If any indemnity in favor of the Agent or any Arranger shall be or
become, in such Person's determination, inadequate, such Person may call for
additional indemnification from the Lenders and cease to do the acts indemnified
against hereunder until such additional indemnity is given.
SECTION 10.2. Funding Reliance, etc. Unless the Agent shall have been
notified by telephone, confirmed in writing, by any Lender by 5:00 p.m., San
Francisco time, on the day prior to a Borrowing that such Lender will not make
available the amount which would constitute its applicable Percentage of such
Borrowing on the date specified therefor, the Agent may assume that such Lender
has made such amount available to the Agent and, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If and to the
extent that such Lender shall not have made such amount available to the Agent,
such Lender and the Borrower severally agree to repay the Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date the Agent made such amount available to the Borrower to the date
such amount is repaid to the Agent, at the interest rate applicable at the time
to Loans comprising such Borrowing.
SECTION 10.3. Exculpation. Neither the Agent nor any of their
respective directors, officers, employees or agents shall be liable to any
Lender for any action taken or omitted to be taken by it under this Agreement or
any other Loan Document, or in connection herewith or therewith, except for its
own willful misconduct or gross negligence, nor responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any other Loan Document, nor for
the creation, perfection or priority of any Liens purported to be created by any
of the Loan Documents, or the validity, genuineness, enforceability, existence,
value or sufficiency of any collateral security, nor to make any inquiry
respecting the performance by the Borrower of its obligations hereunder or under
any other Loan Document. Any such inquiry which may be made by the Agent shall
not obligate it to make any further inquiry or to take any action. The Agent
shall be entitled to rely upon advice of counsel concerning legal matters and
upon any notice, consent, certificate, statement or writing which it believes to
be genuine and to have been presented by a proper Person.
SECTION 10.4. Successor. The Agent may resign as such at any time upon
at least 30 days' prior notice to the Borrower and all Lenders. If the Agent at
any time shall resign, the Required Lenders may appoint another Lender as a
successor thereto which shall thereupon become the Agent, as applicable,
hereunder. If no successor shall have been so appointed by the Required Lenders,
and shall have accepted such appointment, within 30 days after the retiring
Agent's giving notice of resignation, then the retiring Person may, on behalf of
the Lenders, appoint a successor, which shall be one of the Lenders or a
commercial banking institution organized under the laws of the U.S. (or any
State thereof) or a U.S. branch or agency of a commercial banking institution,
and having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor shall be entitled to receive from the retiring Agent such documents of
transfer and assignment as such successor may reasonably request, and shall
thereupon succeed to and become vested with all rights, powers, privileges and
duties of the retiring Agent, as applicable, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Agent's resignation hereunder as the Agent, the provisions of
86
(a) this Article X shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Agent under
this Agreement; and
(b) Section 11.3 (with respect to expenses incurred prior to
resignation) and Section 11.4 shall continue to inure to its benefit.
SECTION 10.5. Loans or Letters of Credit Issued by Agent or any Issuer.
(a) The Agent shall have the same rights and powers with
respect to (x) the Loans made by it or any of its Affiliates, (y) the
Notes held by it or any of its Affiliates, and (z) its participating
interests in the Letters of Credit as any other Lender and may exercise
the same as if it were not the Agent. The Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind
of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if such Person were not the Agent hereunder.
(b) Each Issuer shall have the same rights and powers with
respect to (x) the Loans made by it or any of its Affiliates, (y) the
Notes held by it or any of its Affiliates, and (z) its participating
interests in the Letters of Credit as any other Lender and may exercise
the same as if it were not an Issuer. Each Issuer and its Affiliates
may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower or any Subsidiary or Affiliate of
the Borrower as if it were not an Issuer hereunder.
SECTION 10.6. Credit Decisions. Each Lender acknowledges that it has,
independently of the Agent and each other Lender, and based on such Lender's
review of the financial information of the Borrower, this Agreement, the other
Loan Documents (the terms and provisions of which being satisfactory to such
Lender) and such other documents, information and investigations as such Lender
has deemed appropriate, made its own credit decision to extend its Commitments.
Each Lender also acknowledges that it will, independently of the Agent and each
other Lender, and based on such other documents, information and investigations
as it shall deem appropriate at any time, continue to make its own credit
decisions as to exercising or not exercising from time to time any rights and
privileges available to it under this Agreement or any other Loan Document.
SECTION 10.7. Copies, etc. The Agent shall give prompt notice to each
Lender of each notice or request required or permitted to be given to the Agent
by the Borrower pursuant to the terms of this Agreement (unless concurrently
delivered to the Lenders by the Borrower). The Agent will distribute to each
Lender each document or instrument received for its account and copies of all
other communications received by the Agent from the Borrower for distribution to
the Lenders by the Agent in accordance with the terms of this Agreement.
SECTION 10.8. Other Agents; Lead Arrangers. None of the Lenders
identified on the facing page or signature pages of this Agreement as a
"bookrunner," or "lead arranger" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. Without limiting the foregoing, none of the
Lenders so identified shall have or be deemed to have any fiduciary relationship
with any Lender. Each
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Lender acknowledges that it has not relied, and will not rely, on any of the
Lenders so identified in deciding to enter into this Agreement or in taking or
not taking action hereunder.
SECTION 10.9. Collateral Matters.
(a) Each of the Lenders hereby acknowledges and agrees that
Liens upon the Collateral granted to or held by the Agent or the
Collateral Trustee under any Loan Document will be released:
(i) in whole, upon termination of the Revolving
Loan Commitments and payment in full of all Obligations (other
than contingent indemnification obligations) and the
expiration or termination of all Letters of Credit;
(ii) as to any Collateral that is sold,
transferred or otherwise disposed of, or to be sold,
transferred or otherwise disposed of, as part of any sale,
transfer or other disposition, or proposed sale, transfer or
other disposition permitted under Sections 8.2.9 or 8.2.10
(exclusive of any transfer (whether by means of merger or
otherwise) to any Subsidiary of the Borrower permitted under
Sections 8.2.9 or 8.2.10; provided, however, that if any
Pledged Power Project is transferred from the Borrower to a
Subsidiary that is a Pledged Entity or a Subsidiary of a
Pledged Entity, the Lien created by the applicable Security
Document thereon shall be so released);
(iii) in connection with any abandonment,
forfeiture, surrender or release of oil and gas assets
permitted under the Deeds of Trust;
(iv) as to any Excluded Assets; and
(v) to the extent permitted by Section 11.1(f).
(b) Each Lender hereby authorizes the Agent to act under the
Collateral Trust Agreement to release the Collateral Trustee's Lien on
applicable Collateral to the extent set forth in clause (a) above.
(c) Each Lender hereby authorizes and directs the Agent to
transfer to the Collateral Trustee all Liens and security interests
held by the Agent under the 2002 Credit Agreement, including the
Agent's interest as beneficiary or mortgagee under the Existing Deeds
of Trust, its interest as secured party under related financing
statements and all rights, powers, duties and obligations under the
Existing Deeds of Trust necessary or helpful in the exercise of the
Collateral Trustee's duties and obligations under the Collateral Trust
Agreement.
(d) The Borrower agrees that, in the case of any Lien to be
released in connection with a proposed sale, transfer or other
disposition pursuant to clause (a)(ii) above, (i) such release will
only become effective in connection with a Permitted Sale, (ii) no Lien
on such property has or will be granted to any other Person other than
the Collateral Trustee (for the benefit of, among others, the Lenders
hereunder) during the period between the date of such release and the
date of the consummation of the Permitted Sale and (iii) in
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the event that the consummation of the Permitted Sale does not take
place (or a definitive binding agreement with respect to such Permitted
Sale is not entered into) with 60 days of such release, the Lien of the
Collateral Trustee (for the benefit of, among others, the Lenders
hereunder) on such property will immediately and automatically be
reinstated.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by the Borrower and, except as set forth in the second proviso
below, the Required Lenders; provided, however, that no such amendment,
modification or waiver which would:
(a) modify this Section 11.1 or modify any requirement
hereunder that any particular action be taken by all the Lenders or by
the Required Lenders shall be effective unless consented to by each
Lender;
(b) modify any requirement hereunder that any particular
action be taken by the Required Revolving Lenders or change the
definition of "Required Revolving Lenders" shall be effective unless
consented to by each Revolving Lender;
(c) (i) increase (A) the Revolving Commitment Amount of any
Revolving Lender or (B) the Revolving Percentage of any Revolving
Lender shall be made without the consent of such Lender or (ii) extend
the Revolving Loan Commitment Termination Date or change any provision
expressly requiring the consent of all Revolving Lenders shall be made
without the consent of each Revolving Lender;
(d) (i) increase (A) the Term B Loan Commitment Amount of any
Term B Lender or (B) the Term Percentage of any Term B Lender shall be
made without the consent of such Lender or (ii) change any provision
expressly requiring the consent of all Term B Lenders shall be made
without the consent of each Term B Lender;
(e) reduce any fees described in Article III shall be made
without the consent of each Lender affected thereby or extend the due
date for, or reduce the amount of, any scheduled payment of principal,
interest or fees on any Loan (or reduce the principal amount of or rate
of interest on any Loan) shall be made without the consent of the
Lender holding the Note evidencing such Loan;
(f) authorize the release of any Lien created by a Loan
Document shall be effective without the consent of Lenders having at
least 75% of the aggregate of all Term B Loans then outstanding, all
unfunded Term B Loan Commitments, all Revolving Loans then outstanding,
all Letter of Credit Outstandings on such date, and all unfunded
Revolving Loan Commitments, except that no such consent shall be
required to the extent that the sale or other disposition of the asset
subject to the Lien is permitted hereunder and the proceeds thereof are
applied as required by this Agreement;
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(g) modify the application of payments specified under
Sections 2.2.2 and 3.1.1(c) shall be effective without the consent of
the Supermajority Lenders;
(h) release any Guarantor shall be effective without the
consent of all Lenders unless all or substantially all of the
Collateral has been released hereunder;
(i) extend the due date for, or reduce the amount of, any
Reimbursement Obligation for a Letter of Credit which has been drawn
shall be made without the consent of the Issuer thereof and each
Revolving Lender;
(j) affect adversely the interests, rights or obligations of
an Issuer qua an Issuer shall be made without the consent of such
Issuer; or
(k) affect adversely the interests, rights or obligations of
the Agent qua the Agent shall be made without consent of the Agent; and
provided, further, that (a) none of the matters referred to in clauses (b),
(c)(i)(B), (c)(ii) or (i) of the immediately preceding proviso shall require the
consent of any Term B Lender and (b) none of the matters referred to in clauses
(d)(i)(B) or (d)(ii) of the immediately preceding proviso shall require the
consent of any Revolving Lender.
Notwithstanding the foregoing, Section 10.3 shall not be amended without the
consent of the Agent. No failure or delay on the part of the Agent, any Lender
or the holder of any Note in exercising any power or right under this Agreement
or any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. No notice
to or demand on the Borrower in any case shall entitle it to any notice or
demand in similar or other circumstances. No waiver or approval by the Agent,
any Lender or the holder of any Note under this Agreement or any other Loan
Document shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
SECTION 11.2. Notices. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth below its signature hereto or set
forth in the Lender Assignment Agreement or at such other address or facsimile
number as may be designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed given when
received; any notice, if transmitted by facsimile, shall be deemed given when
transmitted.
SECTION 11.3. Payment of Costs and Expenses. The Borrower agrees to pay
on demand all reasonable expenses of the Agent and the Arrangers (including the
reasonable fees and out-of-pocket expenses of one special oil and gas counsel to
the Agent and the Arrangers and one counsel to the Agent and the Arrangers
covering all other matters, and of local counsel, if any, who may be retained by
counsel to the Agent and the Arrangers) in connection with
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(a) the negotiation, preparation, execution, delivery or
administration of this Agreement and of each other Loan Document,
including schedules and exhibits, and any amendments, waivers,
consents, supplements or other modifications to this Agreement or any
other Loan Document as may from time to time hereafter be required,
whether or not the transactions contemplated hereby are consummated,
(b) the filing, recording, refiling or rerecording of any
Uniform Commercial Code financing statements and all amendments,
supplements and modifications to any thereof and any and all other
documents or instruments of further assurance required to be filed or
recorded or refiled or rerecorded by the terms hereof, and
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
If the Agent or its counsel shall be precluded from undertaking the duties
described in clause (b) above due to a conflict of interest, the Lenders may
appoint another Lender and/or counsel to discharge such duties and the Borrower
shall be responsible for the reasonable expenses of such Lender and counsel. The
Borrower further agrees to pay, and to save the Agent, each Issuer and the
Lenders harmless from all liability for, any stamp or other taxes (other than
income taxes) which may be payable in connection with the execution or delivery
of this Agreement, the borrowings hereunder, the issuance of the Notes, the
issuance of the Letters of Credit, or any other Loan Documents. The Borrower
also agrees to reimburse the Agent, each Issuer and each Lender upon demand for
all reasonable out-of-pocket expenses (including attorneys' fees and legal
expenses) incurred by the Agent or such Lender in connection with (x) the
negotiation of any restructuring or "work-out", whether or not consummated, of
any Obligations and (y) the enforcement of any Obligations upon and during the
continuing of an Event of Default.
SECTION 11.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitments,
the Borrower hereby indemnifies, exonerates and holds the Agent, the Arrangers,
the Issuers and each Lender and each of their respective Affiliates, officers,
directors, employees and agents, and each other person controlling any of the
foregoing within the meaning of either Section 15 of the Securities Act of 1933,
as amended, or Section 20 of the Securities Exchange Act of 1934, as amended
(collectively, the "Indemnified Parties") free and harmless from and against any
and all actions, causes of action, suits, losses, costs, claims, liabilities and
damages, and expenses incurred by any Indemnified Party in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action for
which indemnification hereunder is sought), including reasonable attorneys' fees
and disbursements (collectively, the "Indemnified Liabilities"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan or the use
of any Letter of Credit;
(b) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties (including
any action brought by or on behalf of the Borrower as the result of the
Required Lenders' refusal to make any Credit Extension as a result of
the Borrower's failure to satisfy the conditions in Article VI
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hereof but not including any breach of this Agreement or any other Loan
Document by the Agent or any of the Lenders);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries of all or any portion of the stock or assets of any
Person, whether or not the Agent or such Lender is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to
the protection of the environment or the Release by the Borrower or any
of its Subsidiaries of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any Subsidiary thereof of
any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within the
control of, the Borrower or such Subsidiary,
except for any such Indemnified Liabilities resulting from, arising out of or
relating to the relevant Indemnified Party's gross negligence or willful
misconduct. If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. In addition to the
foregoing, the Borrower hereby waives any and all rights to seek or obtain
consequential damages from any Indemnified Party.
The Lenders agree to indemnify each Issuer with respect to any acts
taken or omissions suffered by the Issuer in connection with each Letter of
Credit issued by it or proposed to be issued by it and the related Issuance
Request (to the extent not reimbursed by the Borrower), ratably according to
their respective Aggregate Percentages, from and against any and all claims,
damages, losses, liabilities and expenses (including without limitation,
reasonable fees and disbursements of counsel) of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against any Issuer in any way
relating to or arising out of any of the Loan Documents or the Letters of Credit
or any action taken or omitted by such Issuer under the Loan Documents or the
Letters of Credit (EXPRESSLY INCLUDING ANY SUCH CLAIM, DAMAGE, LOSS, LIABILITY
OR EXPENSE ATTRIBUTABLE TO THE ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE OF THE
ISSUER, BUT EXCLUDING ANY SUCH CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE
ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE ISSUER). IT IS
THE INTENT OF THE PARTIES HERETO THAT THE ISSUER SHALL, TO THE EXTENT PROVIDED
IN THIS SECTION 11.4, BE INDEMNIFIED FOR ITS OWN ORDINARY, SOLE OR CONTRIBUTORY
NEGLIGENCE. Without limitation of the foregoing, each Lender agrees to reimburse
each Issuer promptly upon demand for such Lender's ratable share of any
reasonable out-of-pocket expenses (including reasonable counsel fees) incurred
by such Issuer in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in
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respect of rights or responsibilities under, the Loan Documents or the Letters
of Credit, or any of them, to the extent that the Issuer is not reimbursed for
such expenses by the Borrower.
SECTION 11.5. Survival. The obligations of the Borrower under Sections
5.3, 5.4, 5.5, 5.6, 11.3 and 11.4, and the obligations of the Lenders under
Section 10.1, shall in each case survive any termination of this Agreement, the
payment in full of all Obligations and the termination of all Commitments. The
representations and warranties made by each Obligor in this Agreement and in
each other Loan Document shall survive the execution and delivery of this
Agreement and each such other Loan Document.
SECTION 11.6. Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 11.7. Headings. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 11.8. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be executed by the Borrower and the Agent and be deemed to be an
original and all of which shall constitute together but one and the same
agreement. This Agreement shall become effective when counterparts hereof
executed on behalf of the Borrower and each Lender (or notice thereof
satisfactory to the Agent) shall have been received by the Agent, and the
conditions precedent set forth in Section 6.1 shall have been satisfied.
SECTION 11.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE
NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK. This Agreement, the Notes and the other Loan Documents
constitute the entire understanding among the parties hereto with respect to the
subject matter hereof and supersede any prior agreements, written or oral, with
respect thereto.
SECTION 11.10. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
(a) the Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of the Agent
and all Lenders; and
(b) the rights of sale, assignment and transfer of the Lenders
are subject to Section 11.11.
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SECTION 11.11. Sale and Transfer of Loans and Notes; Participations in
Loans and Notes. Each Lender may assign, or sell participations in, its Loans,
Notes and Revolving Loan Commitments to one or more other Persons in accordance
with this Section 11.11.
SECTION 11.11.1. Assignments. Any Lender,
(a) with the written consent of the Borrower and the Agent
(which consents shall not be unreasonably withheld and which consent,
in the case of the Borrower, shall be deemed to have been given in the
absence of a written notice delivered by the Borrower to the Agent, on
or before the fifth Business Day after receipt by the Borrower of such
Lender's request for consent, stating, in reasonable detail, the
reasons why the Borrower proposes to withhold such consent and which
consent shall not be required from the Borrower after the occurrence
and during the continuance of an Event of Default) and each Issuer
(which consent may be granted or withheld in its sole unfettered
discretion) may at any time assign and delegate its Revolving Loans
and/or Revolving Loan Commitments to one or more commercial banks or
other financial institutions; provided that, in addition to the
consents of the Agent and each Issuer as set forth above, only notice
to and not the consent of the Borrower shall be required for the
assignment and delegation of Revolving Loans and/or Revolving Loan
Commitments (i) to any Affiliate or Approved Fund of such Lender or
(ii) in connection with the primary syndication of the Revolving Loans
and/or Revolving Loan Commitments by the Arrangers, and
(b) with the written consent of the Borrower and the Agent
(which consents shall not be unreasonably withheld and which consent,
in the case of the Borrower, shall be deemed to have been given in the
absence of a written notice delivered by the Borrower to the Agent, on
or before the fifth Business Day after receipt by the Borrower of such
Lender's request for consent, stating, in reasonable detail, the
reasons why the Borrower proposes to withhold such consent and which
consent shall not be required from the Borrower after the occurrence
and during the continuance of an Event of Default or in connection with
the assignment and delegation of any Term B Loans) may at any time
assign and delegate its Term B Loans to one or more commercial banks or
other financial institutions; provided that, in addition to the consent
of the Agent as set forth above, only notice to and not the consent of
the Borrower shall be required for the assignment and delegation of
Term B Loans (i) to any Affiliate or Approved Fund of such Lender or
(ii) in connection with the primary syndication of the Term B Loans by
the Arrangers,
(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "Assignee Lender"), which assignment and delegation shall be of a
constant, and not a varying, percentage of all the assigning Lender's Loans,
Commitments and other interests, in a minimum aggregate amount of $5,000,000 in
the case of Revolving Loan Commitments or, if less, the amount of such Lender's
Revolving Loan Commitment; provided, however, that any such Assignee Lender will
comply, if applicable, with the provisions contained in Section 5.6 and further,
provided, however, that, the Borrower, each other Obligor and the Agent shall be
entitled to continue to deal solely and directly with such Lender in connection
with the interests so assigned and delegated to an Assignee Lender until
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(i) written notice of such assignment and
delegation, together with payment instructions, addresses and
related information with respect to such Assignee Lender,
shall have been given to the Borrower and the Agent by such
Lender and such Assignee Lender,
(ii) such Assignee Lender shall have executed and
delivered to the Borrower and the Agent a Lender Assignment
Agreement, and to the extent and on the terms required herein,
such agreement shall have been accepted by the Agent and the
Borrower, and
(iii) the processing fees described below shall
have been paid.
From and after the date that the Agent accepts such Lender Assignment Agreement,
(x) the Assignee Lender thereunder shall be deemed automatically to have become
a party hereto and to the extent that rights and obligations hereunder have been
assigned and delegated to such Assignee Lender in connection with such Lender
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and under the other Loan Documents, and (y) the assignor Lender, to
the extent that rights and obligations hereunder have been assigned and
delegated by it in connection with such Lender Assignment Agreement, shall be
released from its obligations hereunder and under the other Loan Documents with
respect to obligations arising after the date of assignment. Within five
Business Days after its receipt of notice that the Agent has received an
executed Lender Assignment Agreement, the Borrower shall, if requested by the
Assignee Lender, execute and deliver to the Agent (for delivery to the relevant
Assignee Lender) new Notes evidencing such Assignee Lender's assigned Loans and
Commitments and, if the assignor Lender has retained Loans and Commitments
hereunder, replacement Notes in the principal amount of the Loans and
Commitments retained by the assignor Lender hereunder (such Notes to be in
exchange for, but not in payment of, those Notes then held by such assignor
Lender). Each such Note shall be dated the date of the predecessor Notes. The
assignor Lender shall xxxx the predecessor Notes "exchanged" and deliver them to
the Borrower. Such assignor Lender or such Assignee Lender must also pay a
processing fee to the Agent upon delivery of any Lender Assignment Agreement in
the amount of $3,000. Any attempted assignment and delegation not made in
accordance with this Section 11.11.1 shall be null and void. In addition to the
foregoing, and notwithstanding any other provision hereof, (i) any Lender may at
any time without notice to or consent by any other Person assign its rights
under this Agreement to any Federal Reserve Bank and (ii) the Agent shall
provide notice to the Lenders of any assignments by it under this Section
11.11.1.
SECTION 11.11.2. Participations. Any Lender may at any time sell to one
or more commercial banks or other Persons (each of such commercial banks and
other Persons being herein called a "Participant") participating interests (or a
sub-participating interest, in the case of a Lender's participating interest in
a Letter of Credit) in any of the Loans, Commitments, or other interests of such
Lender hereunder; provided, however, that
(a) no participation or sub-participation contemplated in this
Section 11.11 shall relieve such Lender from its Commitments or its
other obligations hereunder or under any other Loan Document,
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(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations,
(c) the Borrower and each other Obligor and the Agent shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and each
of the other Loan Documents,
(d) no Participant, unless such Participant is an Affiliate of
such Lender, or is itself a Lender, shall be entitled to require such
Lender to take or refrain from taking any action hereunder or under any
other Loan Document, except that such Lender may agree with any
Participant that such Lender will not, without such Participant's
consent, take any actions of the type described in clause (b) of
Section 11.1, and
(e) the Borrower shall not be required to pay any amount under
Section 5.6 that is greater than the amount which it would have been
required to pay had no participating interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 5.3, 5.4, 5.5, 5.6, 5.8, 5.9, 11.3 and 11.4, shall be considered a
Lender.
SECTION 11.11.3. Special Funding Vehicles. Notwithstanding anything to
the contrary contained herein, any Lender (a "Granting Lender") may grant to a
special purpose funding vehicle (a "SPC"), identified as such in writing from
time to time by the Granting Lender to the Agent and the Borrower, the option to
provide to the Borrower all or any part of any Loan that such Granting Lender is
obligated to make to the Borrower pursuant to this Agreement; provided that (i)
nothing herein shall constitute a commitment by any SPC to make any Loan, (ii)
if an SPC elects not to exercise such option or otherwise fails to provide all
or any part of such Loan, the Granting Lender shall remain obligated to make
such Loan pursuant to the terms hereof, (iii) the Borrower shall not be required
to pay any amount under Section 5.6 that is greater than the amount which it
would have been required to pay had there been no grant to an SPC and any SPC
(or assignee of an SPC) will comply, if applicable, with the provisions
contained in Section 5.6. No grant by any Granting Lender to an SPC agreeing to
provide a Loan or making of such Loan by any SPC shall operate to relieve such
Granting Lender of its liabilities and obligations hereunder, except to the
extent of the making of such Loan by such SPC. The making of a Loan by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In addition, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, any SPC may (i)
with notice to, but without the prior written consent of, the Borrower and the
Agent and without paying any processing fee therefor, assign all or a portion of
its interests in any Loans to the Granting Lender or to any financial
institutions (consented to by the Borrower and the Agent, each in its sole
discretion) providing liquidity and/or credit support to or for the account of
such SPC to support the funding or maintenance of Loans and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC. This Section may not be amended
without the written consent of any SPC that
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holds an option to provide Loans. No recourse under any obligation, covenant, or
agreement of the SPC contained in this Agreement shall be had against any
shareholder, officer, agent or director of the SPC as such, by the enforcement
of any assessment or by any proceeding, by virtue of any statute or otherwise;
it being expressly agreed and understood that this Agreement is a corporate
obligation of the SPC and no personal liability shall attach to or be incurred
by any officer, agents or member of the SPC as such, or any of them under or by
reason of any of the obligations, covenants or agreements of the SPC contained
in this Agreement, or implied therefrom, and that any and all personal liability
for breaches by the SPC of any such obligations, covenants or agreements, either
at law or by statute or constitution, of every such shareholder, officer, agent
or director is hereby expressly waived by all parties to this Agreement as a
condition of and consideration for the SPC entering into this Agreement;
provided, however, that the foregoing shall not relieve any such person or
entity of any liability they might otherwise have as a result of fraudulent
actions or omissions taken by them. All parties to this Agreement acknowledge
and agree that the SPC shall only be liable for any claims that each of them may
have against the SPC only to the extent of the SPC's assets. The provisions of
this clause shall survive the termination of this Agreement.
SECTION 11.12. Other Transactions. Nothing contained herein shall
preclude the Agent or any other Lender from engaging in any transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Affiliates in which the Borrower or such
Affiliate is not restricted hereby from engaging with any other Person.
SECTION 11.13. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE
LENDERS OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF NEW YORK OR IN ANY MANNER PROVIDED BY LAW. THE BORROWER
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH
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LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE
BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 11.14. Waiver of Jury Trial. THE AGENT, THE LENDERS AND THE
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION AMONG ANY OF THE AGENT,
THE LENDERS AND THE BORROWER BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
THE AGENT, THE LENDERS OR THE BORROWER. THE BORROWER ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND
EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS
ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION 11.15. Confidentiality. The Lenders shall hold all non-public
information (which has been identified as such by the Borrower) obtained
pursuant to the requirements of this Agreement in accordance with their
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices and in any event may make
disclosure to any of their examiners, their Affiliates, outside auditors,
counsel and other professional advisors in connection with this Agreement or as
reasonably required by any bona fide transferee, participant or assignee or as
required or requested by any governmental agency or representative thereof or
pursuant to legal process; provided, however, that
(a) unless specifically prohibited by applicable law or court
order, each Lender shall notify the Borrower of any request by any
governmental agency or representative thereof (other than any such
request in connection with an examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such
non-public information prior to disclosure of such information;
(b) prior to any such disclosure pursuant to this Section
11.15, each Lender shall require any such bona fide transferee,
participant and assignee receiving a disclosure of non-public
information to agree in writing
(i) to be bound by this Section 11.15;
98
(ii) to require such Person to require any other
Person to whom such Person discloses such non-public
information to be similarly bound by this Section 11.15;
(c) except as may be required by an order of a court of
competent jurisdiction and to the extent set forth therein, no Lender
shall be obligated or required to return any materials furnished by the
Borrower or any Subsidiary; and
(d) to any direct or indirect contractual counterparty in swap
agreements or to such contractual counterparty's advisor (so long as
such contractual counterparty or advisor agrees to be bound by the
provisions of this Section 11.15).
Notwithstanding anything herein to the contrary, the parties to this Agreement
(and their employees, representatives or other agents) may disclose to any and
all persons, without limitation of any kind, the U.S. federal income tax
treatment and tax structure of the transactions contemplated by this Agreement
and all materials of any kind (including opinions or other tax analyses)
relating to such tax treatment and tax structure. However, no such party shall
disclose any information relating to such tax treatment or tax structure to the
extent nondisclosure is reasonably necessary in order to comply with applicable
securities laws. For this purpose, "tax structure" is limited to facts relevant
to the U.S. federal income tax treatment of the transactions contemplated by
this Agreement and does not include information relating to the identity of the
Borrower, its affiliates, agents or advisors.
SECTION 11.16. Judgment Currency. The Obligations of the Borrower and
any other Obligor in respect of any sum due to any Lender or the Agent
hereunder, under the Notes or under or in respect of any other Loan Document
shall, notwithstanding any judgment in a currency (the "Judgment Currency")
other than the currency in which such sum was originally denominated (the
"Original Currency"), be discharged only to the extent that on the Business Day
following receipt by such Lender or the Agent of any sum adjudged to be so due
in the Judgment Currency, such Lender or the Agent, in accordance with normal
banking procedures, purchases the Original Currency with the Judgment Currency.
If the amount of Original Currency so purchased is less than the sum originally
due to such Lender or the Agent, the Borrower agrees as a separate obligation
and notwithstanding any such judgment, to indemnify each Lender and the Agent,
as the case may be, against such loss, and if the amount of Original Currency so
purchased exceeds the sum originally due to such Lender and the Agent, as the
case may be, each Lender and the Agent agree to remit any excess to the
applicable Obligor. If, for the purpose of obtaining judgment in any court, it
is necessary to convert a sum due under any Loan Document in another currency
into Dollars, Canadian Dollars or Sterling, as the case may be, 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 applicable Lender could purchase such other currency with
Dollars, Canadian Dollars or Sterling, as the case may be, in New York, at the
close of business on the Business Day immediately preceding the day on which
final judgment is given, together with any premiums and costs of exchange
payable in connection with such purchase.
99
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
CALPINE CORPORATION
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
Title:
Address: 00 Xxxx Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Treasurer
THE BANK OF NOVA SCOTIA,
as Agent
By: /s/ Xxxxx X. X'Xxxxx
-----------------------------------------
Name: Xxxxx X. X'Xxxxx
Title: Managing Director
Address: Scotia Capital
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. X'Xxxxx
with a copy to: The Bank of Nova Scotia
000 Xxxxxxxxx Xxxxxx X.X.
Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
Administrative Agent
Loan Administration
BAYERISCHE LANDESBANK, CAYMAN ISLANDS BRANCH,
as Lender
By: /s/ Xxxxxxx Xxxx /s/ Xxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxxxx Xxxx Xxxxx X. Xxxxx
Title: First Vice President Vice President
Address: 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: 000-000-0000
Attention: Loan Administration
CREDIT LYONNAIS NEW YORK BRANCH,
as Lender
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President
Address: 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: 212.261.3421
Attention: Project Finance Department
ING CAPITAL LLC,
as Lender
By: /s/ Xxxxxxx X. X'Xxxx
-----------------------------------------
Name: Xxxxxxx X. X'Xxxx
Title: Managing Director
By: /s/ G. Xxxxxxxx Xxxxxxx, Xx.
-----------------------------------------
Name: G. Xxxxxxxx Xxxxxxx, Xx.
Title: Director
Address: 1325 Avenue of the Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: 000-000-0000 / 6441
Attention: Xxxxxxx Xxxxx
UNION BANK OF CALIFORNIA, N.A.,
as Lender
By: /s/ Xxxxx Read
------------------------------------------------
Name: Xxxxx Read
Title: Vice President
Address: Union Bank of California, N.A.
Energy Capital Services
000 Xxxxx Xxxxxxxx Xx. 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Bryan Read
TORONTO DOMINION (TEXAS) INC.,
as Lender
By: /s/ Xxxx Xxxxxx
-----------------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
Address: 000 Xxxxxx Xx.,
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile No.: 000-000-0000
Attention: Xxxx Xxxxxx
