Exhibit 10.25a
----------------------------------------------------------------
$35,000,000
CREDIT AGREEMENT
dated as of April 10, 2001
among
AES EASTERN ENERGY, L.P.
as Borrower
and
THE BANKS NAMED HEREIN
as Banks
and
THE LETTER OF CREDIT ISSUING BANKS
PARTIES HERETO FROM TIME TO TIME
as Issuing Banks
and
UNION BANK OF CALIFORNIA, N.A.
as Agent
----------------------------------------------------------------
TABLE OF CONTENTS
Page
ARTICLE 1
INTERPRETATION
Section 1.01. Defined Terms...................................................1
Section 1.02. Other Interpretive Provisions..................................13
Section 1.03. Accounting Matters.............................................14
Section 1.04. Representations and Warranties.................................14
Section 1.05. Captions.......................................................14
Section 1.06. Interpretation of Related Documents............................14
ARTICLE 2
WORKING CAPITAL FACILITY; COMPUTATIONS
Section 2.01. Commitment to Lend.............................................14
Section 2.02. Manner of Borrowing............................................15
Section 2.03. Interest.......................................................16
(a) Rates......................................................16
(b) Payment....................................................16
(c) Conversion and Continuation................................16
(d) Maximum Interest Rate......................................17
Section 2.04. Repayment......................................................17
Section 2.05. Prepayments....................................................17
(a) Optional Payments..........................................17
(b) Commitment Reduction Mandatory Prepayments.................18
(c) Clean-Up Period Mandatory Prepayments......................18
(d) Rent Payment Date Mandatory Prepayments....................18
Section 2.06. Limitation on Types of Loans...................................18
Section 2.07. Termination or Reduction of Commitments........................18
Section 2.08. Fees...........................................................19
(a) Commitment Fees............................................19
(b) Letter of Credit Fees......................................19
(c) Agency Fees................................................19
(d) Fees Non-Refundable........................................19
(e) Survival...................................................19
Section 2.09. Computation of Interest and Fees...............................19
Section 2.10. Evidence of Indebtedness.......................................19
Section 2.11. Payments by the Borrower.......................................20
i
(a) Time, Place and Manner.....................................20
(b) No Reductions..............................................20
(c) Extension of Payment Dates.................................20
Section 2.12. Distribution of Payments by the Agent..........................20
Section 2.13. Taxes..........................................................21
(a) Taxes Payable by the Borrower..............................21
(b) Taxes Payable by the Agent, any Bank or any Issuing Bank...21
(c) Limitations................................................21
(d) Exemption from U.S. Withholding Taxes......................22
Section 2.14. Pro Rata Treatment.............................................22
Section 2.15. Computations of Outstandings...................................22
Section 2.16. Extension of Maturity Date.....................................23
Section 2.17. Working Capital Facility Designation...........................23
ARTICLE 3
LETTERS OF CREDIT
Section 3.01. Issuing Banks..................................................24
Section 3.02. Letters of Credit..............................................24
Section 3.03. Issuing Bank Fees..............................................25
Section 3.04. Reimbursement to Issuing Banks; Interest.......................25
Section 3.05. Obligations Absolute...........................................27
Section 3.06. Liability of Issuing Banks and the Banks.......................27
ARTICLE 4
CONDITIONS TO EXTENSIONS OF CREDIT
Section 4.01. Conditions to the Initial Extension of Credit..................28
Section 4.02. Conditions to Each Extension of Credit.........................31
Section 4.03. Determinations Under Section 4.01..............................32
Section 4.04. Reliance on Certificates.......................................32
ARTICLE 5
CERTAIN REPRESENTATIONS AND WARRANTIES
Section 5.01. Due Organization, Etc..........................................33
Section 5.02. Loan Documents: Authorization; Enforceability; Required
Consents; Absence of Conflicts.................................33
Section 5.03. Operative Documents: Due Authorization, Enforceability, Etc....34
Section 5.04. Operative Documents: No Conflicts..............................34
ii
Section 5.05. Operative Documents: Governmental Actions......................34
Section 5.06. Litigation.....................................................35
Section 5.07. No Defaults....................................................36
Section 5.08. Liens..........................................................36
Section 5.09. Regulatory Status/Utility Regulation...........................36
Section 5.10. Investment Company Act.........................................37
Section 5.11. Compliance With Laws...........................................37
Section 5.12. Taxes..........................................................37
Section 5.13. ERISA..........................................................37
Section 5.14. Adequate Rights................................................38
Section 5.15. Environmental Matters..........................................39
Section 5.16. Subsidiaries...................................................41
Section 5.17. Property.......................................................41
Section 5.18. No Event of Loss...............................................41
Section 5.19. AEE2 Liens.....................................................41
Section 5.20. AEE2 Adequate Rights...........................................41
Section 5.21. Additional Facilities Environmental Matters....................43
Section 5.22. Burdensome Provisions..........................................44
Section 5.23. No Adverse Change or Event.....................................44
Section 5.24. Additional Adverse Facts.......................................44
Section 5.25. Margin Stock...................................................45
Section 5.26. Title to Properties............................................45
Section 5.27. Insurance......................................................45
Section 5.28. Lien in Collateral.............................................45
Section 5.29. Projections....................................................45
ARTICLE 6
CERTAIN COVENANTS
Section 6.01. Financial Covenants............................................45
(a) Tangible Net Worth.........................................45
(b) Coverage Ratio.............................................45
Section 6.02. Preservation of Existence and Properties, Scope of Business,
Compliance with Law, Payment of Taxes and Claims Preservation of
Enforceability.................................................46
Section 6.03. Insurance......................................................46
Section 6.04. Use of Proceeds................................................46
Section 6.05. Liens..........................................................46
Section 6.06. Merger or Consolidation........................................47
iii
Section 6.07. Disposition of Assets..........................................47
Section 6.08. Incurrence of Indebtedness.....................................47
Section 6.09. Limitations on Investments.....................................48
Section 6.10. Transactions with Affiliates...................................48
Section 6.11. Subsidiaries...................................................48
Section 6.12. Additional Facilities..........................................48
Section 6.13. Payment of Operating and Maintenance Costs.....................48
Section 6.14. Annual Operating Budget........................................49
Section 6.15. AEE Revenues...................................................49
Section 6.16. No Abandonment.................................................49
Section 6.17. Assignment.....................................................49
Section 6.18. Compliance with ERISA..........................................49
ARTICLE 7
INFORMATION
Section 7.01. Information to Be Furnished....................................50
(a) Quarterly Financial Statements.............................50
(b) Year-End Financial Statements; Accountants' Certificate....50
(c) Operating Budgets..........................................51
(d) Monthly Operations Report..................................51
(e) Notices under each of the Participation Agreements.........51
(f) Reports, Filings and Notices...............................51
(g) Requested Information......................................52
(h) Notice of Defaults, Material Adverse Changes and Other
Matters....................................................52
Section 7.02. Accuracy of Financial Statements and Information...............52
(a) Historical Financial Statements............................52
(b) Future Financial Statements................................52
(c) Historical Information.....................................53
(d) Future Information.........................................53
Section 7.03. Additional Covenants Relating to Disclosure....................54
(a) Accounting Methods and Financial Records...................54
(b) Fiscal Year................................................54
(c) Visits, Inspections and Discussions........................54
Section 7.04. Authorization of Third Parties to Deliver Information and Discuss
Affairs........................................................54
iv
ARTICLE 8
DEFAULT
Section 8.01. Events of Default..............................................55
Section 8.02. Remedies upon Event of Default.................................57
ARTICLE 9
ADDITIONAL CREDIT FACILITY PROVISIONS
Section 9.01. Mandatory Suspension and Conversion of Eurodollar Rate Loans
and Eurodollar Rate Drawings...................................58
Section 9.02. Regulatory Changes.............................................59
Section 9.03. Capital Requirements...........................................60
Section 9.04. Funding Losses.................................................60
Section 9.05. Certain Determinations; Survival...............................61
Section 9.06. Change of Lending Office.......................................61
Section 9.07. Replacement of Bank in Respect of Increased Costs..............62
ARTICLE 10
THE AGENT
Section 10.01. Appointment and Powers.........................................62
Section 10.02. Limitation on Agent's Liability................................63
Section 10.03. Defaults.......................................................63
Section 10.04. Rights as a Bank...............................................63
Section 10.05. Indemnification................................................64
Section 10.06. Non-Reliance on Agent and Other Banks..........................64
Section 10.07. Execution and Amendment of Loan Documents on Behalf of the
Banks..........................................................64
Section 10.08. Resignation of the Agent.......................................65
ARTICLE 11
MISCELLANEOUS
Section 11.01. Notices and Deliveries.........................................65
(a) Notices and Materials Other than Collateral................65
(b) Collateral.................................................67
Section 11.02. Expenses; Indemnification......................................67
Section 11.03. Amounts Payable Due upon Request for Payment...................68
v
Section 11.04. Remedies of the Essence........................................68
Section 11.05. Rights Cumulative..............................................68
Section 11.06. Amendments: Waivers............................................68
Section 11.07. Set-Off; Suspension of Payment and Performance.................69
Section 11.08. Sharing of Recoveries..........................................70
Section 11.09. Assignments and Participations.................................70
(a) Assignments................................................70
(b) Participations.............................................72
Section 11.10. Governing Law..................................................73
Section 11.11. Judicial Proceedings; Waiver of Jury Trial.....................73
Section 11.12. LIMITATION OF LIABILITY........................................73
Section 11.13. Process Agent..................................................73
Section 11.14. Severability of Provisions.....................................74
Section 11.15. Counterparts...................................................74
Section 11.16. Survival of Obligations........................................74
Section 11.17. Entire Agreement...............................................74
Section 11.18. Successors and Assigns.........................................74
Section 11.19. No Fiduciary Relationship Established By Loan Documents........74
Section 11.20. No Recourse to Affiliates......................................74
Section 11.21. Confidential Information.......................................75
Section 11.22. Registered Notes...............................................75
vi
ANNEX
- -----
Annex A - Commitments, Lending Offices and Notice Addresses
SCHEDULES
- ---------
Schedule 2.02 - Notice of Borrowing
Schedule 2.03(c)(iv) - Notice of Conversion or Continuation
Schedule 2.05(a) - Notice of Prepayment
Schedule 2.05(c) - Notice of Clean-Up Period
Schedule 2.13(d) - Non-US Bank Certificate
Schedule 3.04(e) - Notice of Conversion of Base Rate Drawing
Schedule 4.01(a)(xv)(A) - Form of Opinion of Special New York Counsel to the
Borrower, AES NY and AES
Schedule 4.01(a)(xv)(B) - Form of Opinion of Joseph C. Brandt, Esq., Counsel
to the Borrower, AES NY and AES
Schedule 4.01(a)(xv)(C) - Form of Opinion of Special New York Counsel to the
Agent
Schedule 5.05 - Governmental Actions
Schedule 5.06 - Litigation
Schedule 5.09 - Utility Regulation
Schedule 5.13 - ERISA
Schedule 5.15 - Environmental Matters
Schedule 5.24 - Additional Material Adverse Facts
Schedule 7.01(a) - Certificate As To Financial Statements and Defaults
Schedule 7.02(a) - Base Financial Statements
Schedule 8.01(g) - Certain Events of Default (Lease Agreement)
Schedule 11.09(a) - Notice of Assignment
EXHIBITS
- --------
Exhibit A - Form of Promissory Note
Exhibit B - Form of Pledge Agreement
Exhibit C - Form of Issuing Bank Agreement
Exhibit D - Form of Amended and Restated Depositary Agreement
Exhibit E - Form of Letter of Credit
Exhibit F - Form of Second Amendment to Participation Agreement
and Appendix A thereto
Exhibit G - Form of Limited Guaranty
vii
viii
CREDIT AGREEMENT
Dated as of April 10, 2001
AES EASTERN ENERGY, L.P., as Borrower, the BANKS, the ISSUING BANKS, and
UNION BANK OF CALIFORNIA, N.A., as Agent, agree as follows (with certain terms
used herein being defined in Article 1):
ARTICLE 1
INTERPRETATION
Section 1.01. Defined Terms. Each capitalized term used herein and not
otherwise defined herein shall have the definition assigned to such term in
Appendix A to the Participation Agreement (Kintigh A-1), dated as of May 1,
1999, as amended on or before the date hereof (and as amended, supplemented or
otherwise modified after the date hereof with the prior written consent of the
Required Banks and the Issuing Banks) ("Appendix A"), among the Borrower, as
Lessee, Kintigh Facility Trust A-1, as Owner Trust, DCC Project Finance
Fourteen, Inc., as Owner Participant, Bankers Trust Company, as Indenture
Trustee, and Bankers Trust Company, as Pass Through Trustee, and the principles
of interpretation set forth in such Appendix A shall apply to such definitions.
As used herein, (i) the term "Leases" shall refer not only to the singular of
such term as defined in such Appendix A but shall also refer to each Other Lease
and each Related Lease as such terms are defined in such Appendix A, (ii) the
term "Participation Agreements" shall refer not only to the singular of such
term as defined in such Appendix A but shall also refer to each other
Participation Agreement as defined in any Other Lease or any Related Lease,
(iii) the term "Facility" shall refer not only to the singular of such term as
defined in such Appendix A but shall also refer to each Related Facility as such
term is defined in such Appendix A, (iv) the term "Facility Site" shall refer
not only to the singular of such term as defined in such Appendix A but shall
also refer to each Related Facility Site as such term is defined in such
Appendix A, (v) the term "Site Lease" shall refer not only to the singular of
such term as defined in such Appendix A but shall also refer to each Related
Site Lease as such term is defined in such Appendix A, and (vi) the term
"Operative Documents" shall refer not only to the singular of such term as
defined in such Appendix A but shall also refer to each Other Operative Document
as such term is defined in such Appendix A. For the purposes of the Loan
Documents:
"Adjusted Eurodollar Rate" means, for any Interest Period, a rate per annum
(rounded upward, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the rate obtained by dividing (a) the Eurodollar Rate for such Interest
Period by (b) a percentage equal to 1 minus the Reserve Requirement in effect
from time to time during such Interest Period.
"AEE2" means AEE2, L.L.C., a limited liability company organized under the
laws of the State of Delaware.
"AEE2 Entity" means AEE2, AES Westover, L.L.C. and AES Greenidge, L.L.C.
"AES" means The AES Corporation, a Delaware corporation.
"AES Cayuga" means AES Cayuga, L.L.C., a limited liability company
organized under the laws of the State of Delaware.
"AES Somerset" means AES Somerset, L.L.C., a limited liability company
organized under the laws of the State of Delaware.
"Affiliate" means, with respect to a Person, any other Person that,
directly or indirectly through one or more intermediaries, Controls, or is
Controlled by, or is under common Control with, such first Person; unless
otherwise specified,"Affiliate" means an Affiliate of the Borrower.
"Agent" means Union Bank of California, N.A., as agent for and
representative (within the meaning of Section 9-105(1)(m) of the Uniform
Commercial Code) of the Banks and the Issuing Banks under this Agreement and the
other Loan Documents, and any successor Agent appointed pursuant to Section
10.08.
"Agent's Fee Letter" means the letter agreement dated the date hereof
between the Borrower and the Agent.
"Agent's Office" means the address of the Agent specified in or determined
in accordance with the provisions of Section 11.01(a)(ii).
"Agreement" means this Agreement, including all schedules, annexes and
exhibits hereto.
"Agreement Date" means the date set forth as such on the signature pages
hereof, which is the date the executed copies of this Agreement were delivered
by all parties hereto and, accordingly, this Agreement became effective and the
Banks and the Issuing Banks first became committed to provide the Extensions of
Credit pursuant to the terms of, and as contemplated by, this Agreement. If no
such date is there set forth, the Agreement Date shall be the date as of which
this Agreement is dated.
"Appendix A" has the meaning assigned to that term in the initial paragraph
of this Section 1.01.
"Applicable Law" means, anything in Section 11.10 to the contrary
notwithstanding, (a) all applicable common law and principles of equity and (b)
all applicable provisions of all (i) constitutions, statutes, rules, regulations
and orders of governmental bodies, (ii) Governmental Approvals and Governmental
Registrations and (iii) orders, decisions, judgments and decrees.
"Available Commitment" means, for each Bank on any day, the unused portion
of such Bank's Commitment, computed after giving effect to all Extensions of
Credit or prepayments to be made on such day and the application of proceeds
therefrom. "Available Commitments" means the aggregate of the Banks' Available
Commitments.
2
"Bank" means (a) any Person listed on the signature pages hereof following
the Agent and (b) any Person (other than the Borrower or any of its Affiliates)
that has been assigned any or all of the rights or obligations of a Bank
pursuant to Section 11.09(a).
"Bank Tax" means any net income or franchise tax or an equivalent type of
tax imposed upon any Bank by any jurisdiction (or political subdivision thereof)
in which such Bank or any of its Lending Offices is located.
"Base Rate" means, for any day, a rate per annum equal to the higher of (a)
the Prime Rate in effect on such day and (b) the sum of the Federal Funds Rate
in effect on such day plus 0.50%.
"Base Rate Drawing" means any Unreimbursed Drawing the interest on which
is, or is to be, as the context may require, computed on the basis of the Base
Rate.
"Base Rate Loan" means any Loan the interest on which is, or is to be, as
the context may require, computed on the basis of the Base Rate.
"Borrower" means AES Eastern Energy, L.P., a Delaware limited partnership.
"Business Day" means any day other than a Saturday, Sunday or other day on
which banks in New York City or Los Angeles, California are authorized or
required by law to close.
"Capital Security" means, with respect to any Person, (a) any share of
capital stock of or other unit of ownership interest in such Person or (b) any
security convertible into, or any option, warrant or other right to acquire, any
share of capital stock of or other unit of ownership interest in such Person.
"Clean-Up Period" means, with respect to each consecutive period of 365 or,
in the case ofa leap year, 366 consecutive days occurring within the period from
the Agreement Date through the Maturity Date, one period of 30 consecutive days
prior to and including one Rent Payment Date included within such annual period,
such Rent Payment Date to be selected at the option of the Borrower.
"Closing Date" means the date upon which each of the conditions precedent
enumerated in Section 4.01 has been fulfilled to the satisfaction of the Banks,
the Agent and the Borrower. All transactions contemplated by the Closing Date
shall take place on or before April 10, 2001, at the offices of Hughes Hubbard &
Reed LLP, One Battery Park Plaza, New York, New York 10004, at 10:00 a.m., or
such other time and/or location as the parties hereto may mutually agree.
"Code" means the Internal Revenue Code of 1986.
"Collateral" means all property in which a Lien is created pursuant to the
Pledge Agreement.
"Commitment" means, for each Bank, the obligation of such Bank to make
Loans to the Borrower and to participate in Extensions of Credit resulting from
the issuance (or extension, modification or amendment) of any Letter of Credit
in an aggregate amount no greater than the
3
amount set forth opposite such Bank's name under the heading "Commitment" on
Annex A or, in the case of a Bank that becomes a Bank pursuant to an assignment,
the amount of the assignor's Commitment assigned to such Bank, in each case as
the same may be reduced from time to time pursuant to Section 2.07 or increased
or reduced from time to time pursuant to assignments in accordance with Section
11.09(a) or (b), as the context may require.
"Contract" means (a) any agreement (whether bilateral or unilateral or
executory or non-executory and whether a Person entitled to rights thereunder is
so entitled directlyor as a third party beneficiary), including an indenture,
lease or license, (b) any deed or other instrument of conveyance, (c) any
certificate of incorporation, charter, partnership agreement, limited liability
company agreement or other organizational document and (d) any by-law.
"Control" means, with respect to a Person, possession by another Person,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such first Person, whether through the ownership of
voting securities, by contract or otherwise. The words "Controlling" and
"controlled" have correlative meanings.
"Debt" means any Liability that constitutes "debt" or "Debt" under section
101(12) of the Bankruptcy Code or under the Uniform Fraudulent Conveyance Act,
the Uniform Fraudulent Transfer Act or any analogous Applicable Law.
"Default" means any condition or event that constitutes an Event of Default
or that with the giving of notice or lapse of time or both would, unless cured
or waived, become an Event of Default.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Domestic Lending Office" of any Bank means (a) the branch or office of
such Bank set forth below such Bank's name under the heading "Domestic Lending
Office" on Annex A or, in the case of a Bank that becomes a Bank pursuant to an
assignment, the branch or office of such Bank set forth under the heading
"Domestic Lending Office" in the Notice of Assignment given to the Borrower and
the Agent with respect to such assignment or (b) such other branch or office of
such Bank designated by such Bank from time to time as the branch or office at
which its Base Rate Loans and Base Rate Drawings are to be made or maintained.
"Eligible Assignee" means (a) any commercial bank, savings and loan
institution or savings bank organized under the laws of the United States, or
any State thereof, and having combined capital and surplus in excess of
$100,000,000, (b) any commercial bank organized under the laws of any other
country that is a member of the Organization for Economic Cooperation and
Development ("OECD"), or a political subdivision of any such country, and having
combined capital and surplus (or the equivalent thereof under the accounting
principles applicable thereto) in excess of $100,000,000, provided that such
bank is acting through a branch, agency or Affiliate located in the country in
which it is organized or another country that is also a member of the OECD, (c)
the central bank of any country that is a member of the OECD or (d) any
insurance company, pension fund, mutual fund or other financial institution of
recognized standing.
4
"Enacted", as applied to a Regulatory Change, means the date such
Regulatory Change first becomes effective or is implemented or first required or
expected to be complied with, whether the same is (a) the result of an enactment
by a government or any agency or political subdivision thereof, a determination
of a court or regulatory authority, a request or directive of a regulatory
authority, or otherwise or (b) enacted, adopted, issued or proposed before or
after the Agreement Date.
"Eurodollar Business Day" means any Business Day on which dealings in
Dollar deposits are carried on in the London interbank market and on which
commercial banks are open for domestic and international business (including
dealings in Dollar deposits) in London, England.
"Eurodollar Lending Office" of any Bank means (a) the branch or office of
such Bank set forth below such Bank's name under the heading "Eurodollar Lending
Office" on Annex A or, in the case of a Bank that becomes a Bank pursuant to an
assignment, the branch or office of such Bank set forth under the heading
"Eurodollar Lending Office" in the Notice of Assignment given to the Borrower
and the Agent with respect to such assignment or (b) such other branch or office
of such Bank designated by such Bank from time to time as the branch or office
at which its Eurodollar Rate Loans and Eurodollar Rate Drawings are to be made
or maintained.
"Eurodollar Rate" means, for any Interest Period, an interest rate per
annum (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of
1%) equal to the rate per annum appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London, England time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period.
If for any reason such rate is not available, the Eurodollar Rate shall be, for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the nearest whole multiple of 1/100 of 1%) equal to the rate per annum at
which deposits in Dollars are offered to the Agent in the London interbank
market at approximately 11:00 a.m. (London, England time) two Business Days
prior to the first day of such Interest Period in an amount of $1,000,000 and
for a period equal to such Interest Period.
"Eurodollar Rate Drawing" means any Unreimbursed Drawing the interest on
which is, or is to be, as the context may require, computed on the basis of the
Adjusted Eurodollar Rate.
"Eurodollar Rate Loan" means any Loan the interest on which is, or is to
be, as the context may require, computed on the basis of the Adjusted Eurodollar
Rate.
"Event of Default" means any of the events specified in Section 8.01.
"Existing Credit Facility" means the Secured Revolving O&M Costs Facility,
dated as of May 14, 1999, as amended, among the Borrower, the banks party
thereto, and Credit Suisse First Boston, as Agent.
"Extension of Credit" means (i) the making of any Loan, (ii) the issuance
of any Letter of Credit, or (iii) the amendment of any Letter of Credit having
the effect of extending the stated expiration date thereof, increasing the LC
Outstandings thereunder, or otherwise altering any of the material terms or
conditions thereof.
5
"Federal Funds Rate" means, for any day, the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York or, if such rate is not so published for any day that
is a Business Day, the average of quotations for such day on such transactions
received by the Agent from three Federal funds brokers of recognized standing
selected by the Agent.
"Governmental Approval" means any authority, consent, approval, license (or
the like) or exemption (or the like) of any governmental unit.
"Governmental Registration" means any registration or filing (or the like)
with, or report or notice (or the like) to, any governmental unit.
"Guaranty" means the Limited Guaranty, dated as of the date hereof, by AES
in favor of the Agent and the Banks, substantially in the form of Exhibit G.
"Indemnified Person" means any Person that is, or at any time, was, the
Agent, a Bank, an Issuing Bank, an Affiliate of the Agent, a Bank or an Issuing
Bank, or a director, officer, employee or agent of any such Person.
"Information" means data, certificates, reports, statements (including
financial statements), opinions of counsel, documents and other information.
"Insolvency" means, with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent" means pertaining to a condition of Insolvency.
"Intellectual Property" means (a) (i) patents and patent rights, (ii)
trademarks, trademark rights, trade names, trade name rights, corporate names,
business names, trade styles, service marks, logos and general intangibles of
like nature and (iii) copyrights, in each case whether registered, unregistered
or under pending registration and, in the case of any such that are registered
or under pending registration, whether registered or under pending registration
under the laws of the United States or any other country, (b) reissues,
continuations, continuations-in-part and extensions of any Intellectual Property
referred to in clause (a), and (c) rights relating to any Intellectual Property
referred to in clause (a) or (b), including rights under applications (whether
pending under the laws of the United States or any other country) or licenses
relating thereto.
"Interest Payment Date" means each Rent Payment Date and the first Business
Day of April and October of each year.
"Interest Period" means a period commencing, in the case of the first
Interest Period applicable to a Eurodollar Rate Loan or Eurodollar Rate Drawing
(as the case may be), on the date of the making of, or conversion into, such
Eurodollar Rate Loan or Eurodollar Rate Drawing (as the case may be), and, in
the case of each subsequent, successive Interest Period
6
applicable thereto, on the last day of the immediately preceding Interest
Period. The duration of each Interest Period shall be one, two, three or six
months (provided, that the Borrower may not select an Interest Period of six
months in the case of a Eurodollar Rate Drawing), as the Borrower may, in
accordance with Section 2.02(a), 2.03(c) or 3.04(e), as applicable, select,
except that (a) any Interest Period that would otherwise have a Rent Payment
Date occur during the term of such Interest Period shall end on the day that is
such Rent Payment Date, (b) any Interest Period that would otherwise end on a
day that is not a Eurodollar Business Day shall be extended to the next
succeeding Eurodollar Business Day unless such Eurodollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the next
preceding Eurodollar Business Day, (c) any Interest Period that begins on the
last Eurodollar Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month in whichsuch Interest
Period ends) shall end on the last Eurodollar Business Day of a calendar month,
(d) the Borrower may not select any Interest Period that ends after the Maturity
Date, and (e) any Interest Period selected by the Borrower in respect of a
Eurodollar Rate Drawing must end on the next-scheduled Rent Payment Date
following the date of such Eurodollar Rate Drawing.
"Issuing Bank" means any Bank designated by the Borrower in accordance with
Section 3.01 as the issuer of a Letter of Credit pursuant to an Issuing Bank
Agreement; provided, that each Issuing Bank shall, at the time of such
designation, have outstanding unsecured indebtedness that is rated A- or better
by S&P or A3 or better by Moody's (or an equivalent rating by another
nationally-recognized credit rating agency of similar standing if neither of
such corporations is then in the business of rating unsecured indebtedness of
entities engaged in such businesses). As of the date hereof, the Borrower has
designated Union Bank as an Issuing Bank and Union Bank has accepted such
designation as an Issuing Bank.
"Issuing Bank Agreement" means an agreement between an Issuing Bank and the
Borrower, substantially in the form of Exhibit C or otherwise in form and
substance satisfactory to the Agent, providing for the issuance of one or more
Letters of Credit.
"LC Payment Notice" has the meaning assigned to that term in Section
3.04(b).
"LC Outstandings" means, for any Letter of Credit on any date of
determination, the maximum amount available to be drawn under such Letter of
Credit at any time on or after such date (assuming the satisfaction of all
conditions for drawing set forth therein).
"Lending Office" of any Bank means the Domestic Lending Office or the
Eurodollar Lending Office of such Bank.
"Letter of Credit" means any irrevocable standby letter of credit,
substantially in the form of Exhibit E or otherwise in form and substance
satisfactory to the Agent and the Borrower, issued by an Issuing Bank pursuant
to Section 3.02 to support the obligations of the Borrower to purchasers of
power from the Borrower's power generating facilities, as such letter of credit
may from time to time be amended, modified or extended in accordance with the
terms of this Agreement and the Issuing Bank Agreement to which it relates.
7
"Letter of Credit Sublimit" means, on any date of determination, the lesser
of (a) $25,000,000 and (b) the aggregate amount of the Commitments on such date.
In no event shall the sum of (i) the aggregate LC Outstandings of all Letters of
Creditoutstanding on any date of determination (after giving effect to all
Extensions of Credit on such date) and (ii) the aggregate outstanding principal
amount of Unreimbursed Drawings on such date, exceed the Letter of Credit
Sublimit.
"Liability" of any Person means (in each case, whether with full or limited
recourse) any indebtedness, liability, obligation, covenant or duty of or
binding upon, or any term or condition to be observed by or binding upon, such
Person or any of its assets, of any kind, nature or description, direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, whether arising under Contract, Applicable Law, or
otherwise, whether now existing or hereafter arising, and whether for the
payment of money or the performance or non-performance of any act.
"Lien" means (a) with respect to any property or asset of any Person,
including any investment property, or any income or profits therefrom, in each
case whether the same is consensual or nonconsensual or arises by Contract,
operation of law, legal process or otherwise, (i) any mortgage, lien, pledge,
attachment, levy or other security interest of any kind thereupon or in respect
thereof or (ii) any other arrangement, express or implied, under which the same
is subordinated, transferred, sequestered or otherwise identified so as to
subject the same to, or make the same available for, the payment or performance
of any Liability in priority to the payment of the ordinary, unsecured
Liabilities of such Person, or (b) in the case of any investment property, any
Contract or other arrangement, express or implied, under which any Person has
the right to control such investment property, provided that for purposes of
this definition the right of the Borrower to direct the investment of such
property shall not constitute control of such investment property. For the
purposes of this Agreement, a Person shall be deemed to own subject to a Lien
any asset that it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Loan" means any amount advanced by a Bank pursuant to Section 2.01.
"Loan Document Related Claim" means any claim or dispute (whether arising
under Applicable Law, including any "environmental" or similar law, under
Contract or otherwise and, in the case of any proceeding relating to any such
claim or dispute, whether civil, criminal, administrative or otherwise) in any
way arising out of, related to, or connected with the Loan Documents, the
relationships established thereunder or any actions or conduct thereunder or
with respect thereto, whether such claim or dispute arises or is asserted before
or after the Agreement Date or before or after the Repayment Date.
"Loan Document Representation and Warranty" means any "Representation and
Warranty" as defined in any Loan Document and any other representation or
warranty made or deemed made under any Loan Document.
"Loan Documents" means (a) this Agreement, the Notes, the Pledge Agreement,
the Issuing Bank Agreement(s), the Guaranty, the Agent's Fee Letter and the
Depositary Agreement
8
and (b) all other agreements, documents and instruments relating to, arising out
of, or in any way connected with any agreement, document or instrument referred
to in clause (a) to which the Agent, any Bank or any Issuing Bank and the
Borrower, AES or one or more AEE Entities are parties.
"Loan Party" means any Person (other than the Agent, a Bank or an Issuing
Bank) that is a party to a Loan Document.
"Materially Adverse Effect" means (a) with respect to any Person, any
materially adverse effect on such Person's business, assets, Liabilities,
financial condition, results of operations or business prospects, (b) with
respect to a group of Persons "taken as a whole", any materially adverse effect
on such Persons' business, assets, Liabilities, financial conditions, results of
operations or business prospects taken as a whole on, where appropriate, a
consolidated basis in accordance with GAAP, (c) with respect to any Loan
Document, any adverse effect, in any material respect, on the binding nature,
validity or enforceability thereof as an obligation of the Borrower and (d) with
respect to any Collateral, or any category of Collateral, pledged by the
Borrower, a materially adverse effect on its value as Collateral or a Materially
Adverse Effect with respect to AEE2, AES Somerset or AES Cayuga or any of such
Persons' utility in the Borrower's business or an adverse effect, in any
material respect, on the validity, perfection, priority or enforceability of the
Security Interest therein. Any such adverse effect may have occurred, and such
an event may have occurred or failed to occur, at any particular time
notwithstanding the fact that at such time no Default shall have occurred and be
continuing.
"Maturity Date" means January 2, 2003 or such later date to which the
Maturity Date is extended in accordance with Section 2.16.
"Maximum Permissible Rate" means, with respect to interest payable on any
amount, the rate of interest on such amount that, if exceeded, could, under
Applicable Law, result in (a) civil or criminal penalties being imposed on the
payee or (b) the payee's being unable to enforce payment of (or, if collected,
to retain) all or any part of such amount or the interest payable thereon.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, that is subject to Title IV of ERISA and to which the
Borrower or any of its ERISA Affiliates is making or accruing an obligation to
make contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions, such plan being maintained pursuant
to one or more collective bargaining agreements.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that is subject to Title IV of ERISA and that (i)
is maintained for employees of the Borrower or any of its ERISA Affiliates and
at least one Person other than the Borrower and its ERISA Affiliates, or (ii)
was so maintained and in respect of which the Borrower or any of its ERISA
Affiliates could have liability under Section 4064 or 4069 of ERISA in the event
such plan has been or were to be terminated.
"Non-US Bank" means a Person that is not a United States Person and that is
not described in Section 881(c)(3) of the Code.
9
"Note" means any Note in the form of Exhibit A.
"Notice of Assignment" means any notice to the Borrower and the Agent with
respect to an assignment pursuant to Section 11.09(a) in the form of Schedule
11.09(a).
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor
entity) established under ERISA.
"Percentage" means, for any Bank on any date of determination, the
percentage obtained by dividing such Bank's Commitment on such date by the total
of the Commitments on such date, and multiplying the quotient so obtained by
100%. In the event that the Commitments have expired or been terminated, each
Bank's Percentage shall be calculated on the basis of the Commitments in effect
immediately prior to such expiration or termination (as the case may be).
"Person" means any individual, sole proprietorship, corporation,
partnership, trust, limited liability company, unincorporated organization,
mutual company, joint stock company, estate, union, employee organization,
government or any agency or political subdivision thereof.
"Pledge Agreement" means the LLC Membership Interest Pledge Agreement,
dated as of the date hereof, between the Borrower and the Agent, as Secured
Party, substantially in the form of Exhibit B.
"Post-Default Rate" means a rate per annum equal at all times to the higher
of (i) the Base Rate in effect from time to time plus 3.375% or (ii) the rate
otherwise applicable under Section 2.03(a)(i) plus 2.0%.
"Prime Rate" means the rate of interest announced publicly by Union Bank in
Los Angeles, California, from time to time, as the Union Bank Reference Rate (it
being acknowledged that the Union Bank Reference Rate may not necessarily be the
lowest rate of interest charged to any class of borrowers by Union Bank). The
Prime Rate shall be adjusted automatically, without notice, on the effective
date of any change in the Union Bank Reference Rate.
"Register" means a register kept at the Agent's office by the Agent on
behalf of the Borrower, at no extra charge to the Borrower, on which the Agent
records the names of the Registered Holders of Registered Notes.
"Registered Holder" means the Person in whose name a Registered Note is
registered.
"Registered Note" means a Note payable to any Person whose name has been
recorded on the Register by the Agent as the holder of such Note. The
registration of a Note shall constitute the registration of any Loan and
Unreimbursed Drawing evidenced thereby.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System.
10
"Regulatory Change" means any Applicable Law, interpretation, directive,
determination, request or guideline (whether or not having the force of law), or
any change therein or in the administration or enforcement thereof, that is
Enacted after the Agreement Date, including any such that imposes, increases or
modifies any Tax, reserve requirement, insurance charge, special deposit
requirement, assessment or capital adequacy requirement, but excluding any such
that imposes, increases or modifies any Bank Tax.
"Reorganization" means, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of Section 4241
of ERISA.
"Repayment Date" means the later to occur of (a) the termination of the
Commitments (whether as a result of the occurrence of the Maturity Date,
termination pursuant to Section 2.07, or termination pursuant to Section 8.02)
and (b) the payment in full in cash of the Loans, any Unreimbursed Drawings and
all other amounts payable or accrued under the Loan Documents and the
termination or expiration of all Letters of Credit.
"Reportable Event" means any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty-day notice period is
waived under subsections .22, .23, .25, .27 or .28 of PBGC Reg. Section 4043.
"Representation and Warranty" means any representation or warranty made
pursuant to or under (a) Section 4.02, Article 5, Section 7.02 or any other
provision of this Agreement or (b) any amendment to, or waiver of rights under,
this Agreement, WHETHER OR NOT, IN THE CASE OF ANY REPRESENTATION OR WARRANTY
REFERRED TO IN CLAUSE (a) OR (b) OF THIS DEFINITION (EXCEPT, IN EACH CASE, TO
THE EXTENT OTHERWISE EXPRESSLY PROVIDED), THE INFORMATION THAT IS THE SUBJECT
MATTER THEREOF IS WITHIN THE KNOWLEDGE OF THE BORROWER.
"Request for Issuance" has the meaning assigned to that term in Section
3.02(a).
"Required Banks" means, on any date of determination, Banks that,
collectively, on such date (i) hold at least 51% of the then aggregate
outstanding principal amount of the Loans and Unreimbursed Drawings owing to
Banks and (ii) if no Loans or Unreimbursed Drawings are then outstanding, have
Percentages in the aggregate of at least 51%. Any determination of those Banks
constituting the Required Banks shall be made by the Agent and shall be
conclusive and binding on all parties absent manifest error.
"Reserve Requirement" means, at any time, the then current maximum rate for
which reserves (including any marginal, special, supplemental or emergency
reserve) are required tobe maintained under Regulation D by member banks of the
Federal Reserve System in New York City with deposits exceeding five billion
Dollars against "Eurocurrency liabilities", as that term is used in Regulation
D. The Adjusted Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
"Secured Party" has the meaning ascribed to such term in the Pledge
Agreement.
11
"Security Interest" means the Liens created, or purported to be created, by
the Loan Documents.
"Single Employer Plan" means a single employer plan, as defined in Section
4001(a)(15) of ERISA, which is subject to Title IV of ERISA and which (i) is
maintained for employees of the Borrower or any of its ERISA Affiliates and no
Person other than the Borrower and its ERISA Affiliates, or (ii) was so
maintained and in respect of which the Borrower or any of its ERISA Affiliates
could have liability under Section 4069 of ERISA in the event such plan has been
or were to be terminated.
"Subsidiary" means, with respect to any Person at any time, (a) any other
Person the accounts of which would be consolidated with those of such first
Person in its consolidated financial statements as of such time, and (b) any
other Person (i) that is, at such time, Controlled by, or (ii) securities of
which having ordinary voting power to elect a majority of the board of directors
(or other persons having similar functions), or other ownership interests of
which ordinarily constituting a majority voting interest, are at such time,
directly or indirectly, owned or controlled by, such first Person, or by such
first Person and one or more of its Subsidiaries; unless otherwise specified,
"Subsidiary" means a Subsidiary of the Borrower.
"Tangible Net Worth" means, with respect to any Person, the excess of such
Person's consolidated assets over its consolidated liabilities, consolidated
assets and consolidated liabilities each to be determined in accordance with
GAAP consistently applied, excluding, however, from the determination of
consolidated assets (i) goodwill, organizational expenses, research and
development expenses, trademarks, trade names, copyrights, patents, patent
applications, licenses and rights in any thereof, and other similar intangibles,
(ii) cash heldin a sinking or other analogous fund established for the purpose
of redemption, retirement or prepayment of capital stock or Indebtedness, and
(iii) any items not included in clause (i) or (ii) above that are treated as
intangibles in conformity with GAAP.
"Tax" means any Federal, State or foreign tax, assessment or other
governmental charge (including any withholding tax) upon a Person or upon its
assets, revenues, income or profits.
"Type" means, with respect to Loans, any of the following, each of which
shall be deemed to be a different "Type" of Loan: Base Rate Loans and Eurodollar
Rate Loans.
"Uniform Commercial Code" means the Uniform Commercial Code as in effect
from time to time in the State of New York.
"Union Bank" means Union Bank of California, N.A., a national banking
association.
"United States Person" means a corporation, partnership or other Person
created, organized or incorporated under the laws of the United States of
America or a State thereof (including the District of Columbia).
"Unreimbursed Drawing" means any drawing under a Letter of Credit that has
not yet been reimbursed by the Borrower to (i) the Issuing Bank that paid such
drawing or (ii) if such
12
Issuing Bank has been reimbursed for such drawing by the Banks pursuant to
Section 3.03, the Banks.
Section 1.02. Other Interpretive Provisions. (a) Except as otherwise
specified herein, all references herein (i) to any Person shall be deemed to
include such Person's successors and assigns, (ii) to any Applicable Law defined
or referred to herein shall be deemed references to such Applicable Law or any
successor Applicable Law as the same may have been or may be amended or
supplemented from time to time and (iii) to any Loan Document or Contract (other
than each of the Leases and each of the Participation Agreements, including
Appendix A thereto) defined or referred to herein shall be deemed references to
such Loan Document or Contract (and, in the case of any Note or any other
instrument, any instrument issued in substitution therefor) as the terms thereof
may have been or may be amended, supplemented, restated, waived or otherwise
modified from time to time (subject to any restrictions on such amendments,
supplements, restatements, waivers or modifications set forth herein or
therein).
(b) When used in this Agreement, the words "herein", "hereof" and
"hereunder", and words of similar import, shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and the words
"Article", "Section", "Annex", "Schedule" and "Exhibit" shall refer to Articles
and Sections of, and Annexes, Schedules and Exhibits to, this Agreement unless
otherwise specified.
(c) Whenever the context so requires, the neuter gender includes the
masculine or feminine, the masculine gender includes the feminine, and the
singular number includes the plural, and vice versa.
(d) Any item or list of items set forth following the word "including",
"include" or "includes" is set forth only for the purpose of indicating that,
regardless of whatever other items are in the category in which such item or
items are "included", such item or items are in such category, and shall not be
construed as indicating that the items in the category in which such item or
items are "included" are limited to such items or to items similar to such
items.
(e) Each authorization in favor of the Agent, the Banks, any Issuing Bank
or any other Person granted by or pursuant to this Agreement shall be deemed to
be irrevocable and coupled with an interest.
(f) Except as otherwise specified herein, all references herein to the
Agent, any Bank, any Issuing Bank or the Borrower shall be deemed to refer to
such Person however designated in Loan Documents, so that (i) a reference to
rights or duties of the Agent under the Loan Documents shall be deemed to
include the rights or duties of such Person as the Secured Party under the
Pledge Agreement, (ii) a reference to costs incurred by a Bank or an Issuing
Bank in connection with the Loan Documents shall be deemed to include costs
incurred by such Person as a"Principal" under the Pledge Agreement and (iii) a
reference to the obligations of the Borrower under the Loan Documents shall be
deemed to include the obligations of such Person as the "Pledgor" under the
Pledge Agreement.
(g) Except as otherwise specified herein, all references to the time of day
shall be deemed to be to Los Angeles, California time as then in effect.
13
(h) Except where the context clearly indicates a different meaning, all
terms defined in Article 1, 8 or 9 of the Uniform Commercial Code, as such
definitions may be amended from time to time, are used herein with the meanings
therein ascribed to them.
Section 1.03. Accounting Matters. Unless otherwise specified herein, all
accounting determinations hereunder and all computations utilized by the
Borrower in complying with the covenants contained herein shall be made, all
accounting terms used herein shall be interpreted, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with GAAP,
except, in the case of such financial statements, for departures from GAAP that
may from time to time be approved in writing by the independent certified public
accountants who are at the time, in accordance with Section 7.02(b), reporting
on the Borrower's financial statements.
Section 1.04. Representations and Warranties. All Representations and
Warranties shall be deemed made (a) in the case of any Representation and
Warranty contained in this Agreement, at the time of its initial execution and
delivery, except where otherwise stated therein at and as of the Agreement Date,
(b) in the case of any Representation and Warranty contained in this Agreement
or any other document, at the time any Extension of Credit is made, except where
otherwise stated therein at and as of such time and (c) in the case of any
particular Representation and Warranty, wherever contained, at such other time
or times as such Representation and Warranty is made or deemed made in
accordance with the provisions of this Agreement or the document pursuant to,
under or in connection with which such Representation and Warranty is made or
deemed made.
Section 1.05. Captions. Captions to Articles, Sections and subsections
of, and Annexes, Schedules and Exhibits to, this Agreement are included for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or in any way affect the meaning or construction of any
provision of this Agreement.
Section 1.06. Interpretation of Related Documents. Except as otherwise
specified therein, terms that are defined herein that are used in Notes,
certificates, opinions and other documents delivered in connection herewith
shall have the meanings ascribed to them herein and such documents shall be
otherwise interpreted in accordance with the provisions of this Article 1.
ARTICLE 2
WORKING CAPITAL FACILITY; COMPUTATIONS
Section 2.01. Commitment to Lend. Upon the terms and subject to the
conditions of this Agreement, each Bank agrees to make, from time to time during
the period from the Agreement Date through the Maturity Date, one or more Loans
to the Borrower in an aggregate unpaid principal amount not exceeding at any
time such Bank's Available Commitment at such time. Subject to Section 2.06 and
the other terms and conditions of this Agreement, the Loans may, at the option
of the Borrower, be made as, and from time to time continued as or converted
into, Base Rate Loans or Eurodollar Rate Loans, or any combination thereof. The
aggregate amount of the Commitments on the Agreement Date is $35,000,000. Upon
the terms and subject to the conditions of this Agreement, the Borrower may
borrow, pay or prepay and reborrow Loans.
14
Section 2.02. Manner of Borrowing. (a) The Borrower shall give the Agent
notice (which shall be irrevocable) no later than 11:00 a.m. on, in the case of
Base Rate Loans, the Business Day before the requested date for the making of
such Loans, and, in the case of Eurodollar Rate Loans, the third Eurodollar
Business Day before the requested date for the making of such Loans. Each such
notice shall be in the form of Schedule 2.02 and shall specify (i) the requested
date for the making of the requested Loans, which (x) shall be, in the case of
Base Rate Loans, a Business Day and, in the case of Eurodollar Rate Loans, a
Eurodollar Business Day and (y) shall not be a day during a Clean-Up Period,
(ii) the Type or Types of Loans requested, (iii) the amount of each such Type of
Loan, and (iv) the Interest Period, if any, for such Loans. Upon receipt of any
such notice, the Agent shall promptly notify each Bank of the contents thereof
and of the amount and Type of each Loan to be made by such Bank on the requested
date specified therein.
(b) Not later than 12:00 noon on each requested date for the making of
Loans, each Bank shall, if it has received the notice contemplated by Section
2.02(a) on or prior to its close of business on, in the case of Base Rate Loans,
the Business Day, and, in the case of Eurodollar Rate Loans, the third
Eurodollar Business Day, before such date, make available to the Agent, in
Dollars in funds immediately available to the Agent at the Agent's Office, the
Loans to be made by such Bank on such date. Any Bank's failure to make any Loan
to be made by it on the requested date therefor shall not relieve any other Bank
of its obligation to make any Loan to be made by such other Bank on such date,
but such other Bank shall not be liable for such failure.
(c) Unless the Agent shall have received notice from a Bank prior to 10:00
a.m. on the requested date for the making of any Loans that such Bank will not
make available to the Agent the Loans requested tobe made by such Bank on such
date, the Agent may assume that such Bank has made such Loans available to the
Agent on such date in accordance with Section 2.02(b) and the Agent in its sole
discretion may, in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount on behalf of such Bank. If and to the extent
such Bank shall not have so made available to the Agent the Loans requested to
be made by such Bank on such date and the Agent shall have so made available to
the Borrower a corresponding amount on behalf of such Bank, such Bank shall, on
demand, pay to the Agent such corresponding amount together with interest
thereon, for each day from the date such amount shall have been so made
available by the Agent to the Borrower until the date such amount shall have
been repaid to the Agent, at the Federal Funds Rate until (and including) the
third Business Day after demand is made and thereafter at the Base Rate. If such
Bank does not pay such corresponding amount promptly upon the Agent's demand
therefor, the Agent may notify the Borrower and the Borrower shall immediately
repay such corresponding amount to the Agent together with accrued interest
thereon at the applicable rate or rates provided in Section 2.03(a).
(d) All Loans made available to the Agent in accordance with Section
2.02(b) shall be disbursed by the Agent not later than 1:00 p.m. on the
requested date therefor in Dollars in funds immediately available to the
Borrower by credit to an account of the Borrower at the Agent's Office or in
such other manner as may have been specified in the applicable notice and as
shall be acceptable to the Agent. Notwithstanding the foregoing or any other
provision contained herein, the proceeds of all Loans made available to the
Agent shall be deposited directly by the
15
Agent or, to the extent received by the Borrower, by the Borrower into the
Revenue Account pursuant to Section 3.1(a) of the Depositary Agreement.
Section 2.03. Interest. (a) Rates. (i) Subject to Section 2.03(a)(ii),
(A) each Loan shall bear interest on the outstanding principal amount thereof at
a rate per annum equal to (1) so long as it is a Base Rate Loan, the Base Rate
as in effect from time to time plus 1.375% and (2) so long as it is a Eurodollar
Rate Loan, the applicable Adjusted Eurodollar Rate plus 2.375% and (B) except as
otherwise provided herein or in any other Loan Document, each other amount due
and payable under the Loan Documents shall, to the maximum extent permitted by
Applicable Law, bear interest at a rate per annum equal to the Base Rate as in
effect from time to time plus 1.375%.
(ii) Upon the occurrence and during the continuance of an Event of
Default (and whether before or after judgment), each Loan (whether or not
due) and, to the maximum extent permitted by Applicable Law, each other
amount due and payable under the Loan Documents shall bear interest at a
rate per annum equal to the applicable Post-Default Rate.
(b) Payment. Interest shall be payable (i) in the case of Base Rate Loans,
on each Interest Payment Date, (ii) in the case of Eurodollar Rate Loans, on the
last day of each applicable Interest Period and, if such Interest Period has a
duration of more than three months, on that day of each third month during such
Interest Period that corresponds to the first day of such Interest Period (or,
if any such month does not have a corresponding day, then on the last day of
such month), (iii) in the case of each Loan, when such Loan shall be due
(whether at maturity, by reason of notice of prepayment or acceleration or
otherwise) or converted, but only to the extent then accrued on the amount then
so due or converted, and (iv) in the case of all other amounts due and payable
under the Loan Documents (other than amounts payable pursuant to Article 3), on
demand. Except as otherwise provided in Article 3, interest at the Post-Default
Rate shall be payable on demand.
(c) Conversion and Continuation. (i) All or any part of the principal
amount of Loans of any Type may, on any Business Day, be converted into any
other Type or Types of Loans, except that (A) Eurodollar Rate Loans may be
converted only on the last day of an applicable Interest Period and (B) Base
Rate Loans may be converted into Eurodollar Rate Loans only on a Eurodollar
Business Day.
(ii) Base Rate Loans shall continue as Base Rate Loans unless and
until such Loans are converted into Loans of another Type. Eurodollar Rate
Loans shall continue as Loans of such Type until the end of the then
current Interest Period therefor, at which time they shall be automatically
converted into Base Rate Loans unless the Borrower shall have given the
Agent notice in accordance with Section 2.03(c)(iv) requesting either that
such Loans continue as Loans of such Type for another Interest Period or
that such Loans be converted into Loans of another Type at the end of such
Interest Period.
(iii) Notwithstanding anything to the contrary contained in Section
2.03(c)(i) or (ii), upon the occurrence and during the continuance of any
Default, the Agent may notify the Borrower that Loans may only be converted
into or continued as Loans of
16
certain specified Types and, thereafter, until such Default no longer
exists, Loans may not be converted into or continued as Loans of any Type
other than one or more of such specified Types.
(iv) The Borrower shall give the Agent notice (which shall be
irrevocable) of each conversion of Loans or continuation of Eurodollar Rate
Loans no later than 10:00 a.m. on, in the case of a conversion into Base
Rate Loans, the Business Day, and, in the case of a conversion into or
continuation of Eurodollar Rate Loans, the third Eurodollar Business Day,
before the requested date of such conversion or continuation. Each notice
of conversion or continuation shall be in the form of Schedule 2.03(c)(iv)
and shall specify (A) the requested date of such conversion or
continuation, (B) the amount and Type and, in the case of Eurodollar Rate
Loans, the last day of the applicable Interest Period of the Loans to be
converted or continued, (C) the amount and Type or Types of Loans into
which such Loans are to be converted or as which such Loans are to be
continued, and (D) the requested initial Interest Period, if any, to be
applicable to the Loans resulting from such conversion or continuation.
Upon receipt of any such notice, the Agent shall promptly notify each Bank
of (1) the contents thereof, (2) the amount and Type and, in the case of
Eurodollar Rate Loans, the last day of the applicable Interest Period of
each Loan to be converted or continued by such Bank, (3) the amount and
Type or Types of Loans into which such Loans are to be converted or as
which such Loans are to be continued, and (4) the Interest Period, if any,
to be applicable to the Loans resulting from such conversion or
continuation.
(d) Maximum Interest Rate. Nothing contained in the Loan Documents shall
require the Borrower at any timeto pay interest at a rate exceeding the Maximum
Permissible Rate. If interest payable by the Borrower on any date would exceed
the maximum amount permitted by the Maximum Permissible Rate, such interest
payment shall automatically be reduced to such maximum permitted amount, and
interest for any subsequent period, to the extent less than the maximum amount
permitted for such period by the Maximum Permissible Rate shall be increased by
the unpaid amount of such reduction. Any interest actually received for any
period in excess of such maximum amount permitted for such period shall be
deemed to have been applied as a prepayment of the Loans.
Section 2.04. Repayment. The Loans shall mature and become due and
payable, and shall be repaid by the Borrower, in full on the Maturity Date.
Section 2.05. Prepayments. (a) Optional Payments. The Borrower may, at any
time and from time to time, prepay the Loans in whole or in part, without
premium or penalty (but subject to Section 9.04), except that any partial
prepayment shall be in an aggregate principal amount of at least $1,000,000.
Under the terms and subject to the conditions of this Agreement, the Borrower
may reborrow amounts that have been prepaid. The Borrower shall give the Agent
notice of each prepayment no later than 10:00 a.m. on, in the case of a
prepayment of Base Rate Loans, the Business Day, and, in the case of a
prepayment of Eurodollar Rate Loans, the third Eurodollar Business Day, before
the date of such prepayment. Eachsuch notice of prepayment shall be in the form
of Schedule 2.05(a) and shall specify (i) the date such prepayment is to be made
and (ii) the amount and Type and, in the case of Eurodollar Rate Loans, the last
day of the
17
applicable Interest Period of the Loans to be prepaid. Upon receipt of any such
notice, the Agent shall promptly notify each Bank of the contents thereof and
the amount and Type and, in the case of Eurodollar Rate Loans, the last day of
the applicable Interest Period of each Loan of such Bank to be prepaid. Amounts
to be prepaid shall irrevocably be due and payable on the date specified in the
applicable notice of prepayment, together with interest thereon as provided in
Section 2.03(b).
(b) Commitment Reduction Mandatory Prepayments. On the date of any
termination or reduction of the Commitments pursuant to Section 2.07, the
Borrower shall pay or prepay so much of the principal amount outstanding
hereunder as shall be necessaryin order that the aggregate principal amount
outstanding hereunder (after giving effect to all Extensions of Credit to be
made on such date and the application of the proceeds thereof) will not exceed
the Commitments following such termination or reduction, together with (i)
accrued interest to the date of such prepayment on the principal amount prepaid
and (ii) in the case of prepayments of Eurodollar Rate Loans, any amount payable
to the Banks pursuant to Section 9.04. Any prepayments required by this
subsection (b) shall be applied to outstanding Base Rate Loans up to the full
amount thereof before they are applied to outstanding Eurodollar Rate Loans.
(c) Clean-Up Period Mandatory Prepayments. The Borrower shall prepay in
whole all Loans on the Business Day immediately preceding each Clean-Up Period.
The Borrower shall, not later than the first day of each Clean-Up Period, notify
the Agent of the commencement of such Clean-Up Period. Each such notice of the
commencement of a Clean-Up Period shall be in the form of Schedule 2.05(c) and
shall specify the commencement date of such Clean-Up Period.
(d) Rent Payment Date Mandatory Prepayments. The Borrower shall prepay in
whole all Loans outstanding immediately prior to making any payment of Rent,
other than any payment of Rent made solely with amounts drawn under Rent Reserve
Account Payment Undertaking Agreements, and shall not borrow hereunder on the
date on which any payment of Rent shall be made.
Section 2.06. Limitation on Types of Loans. Notwithstanding anything to
the contrary contained in this Agreement, the Borrower shall borrow, prepay,
convert and continue Loans in a manner such that (a) the aggregate principal
amount of Eurodollar Rate Loans having the same Interest Period shall at all
times be not less than $5,000,000, (b) there shall not be, at any one time, more
than five Interest Periods in effect with respect to Eurodollar Rate Loans and
(c) each Base Rate Loan shall be in a principal amount of not less than
$1,000,000.
Section 2.07. Termination or Reduction of Commitments. The Borrower may
terminate in whole or reduce in part the Commitments by giving the Agent notice
(which shall be irrevocable) thereof no later than 10:00 a. m. on the third
Business Day before the requested date of such termination or reduction;
provided, that (a) in the case of a termination of the Commitments, no Loans,
Letters of Credit or Unreimbursed Drawings are outstanding atthe time of such
termination, and (b) in the case of any reduction of the Commitments, (i) such
reduction shall apply ratably among the Banks, (ii) such reduction shall be in
an aggregate amount not less than $1,000,000 and (iii) the Commitments shall in
no event be reduced to an amount which is less than the sum of (A) the aggregate
LC Outstandings on the date of such
18
reduction and (B) the aggregate principal amount of Unreimbursed Drawings on the
date of such reduction. Upon receipt of any such notice, the Agent shall
promptly notify each Bank of the contents thereof and, if applicable, the amount
to which such Bank's Commitment is to be irrevocably reduced. Once terminated or
reduced, the Commitments may not be increased by the Borrower at any time
thereafter.
Section 2.08. Fees. (a) Commitment Fees. The Borrower shall pay to the
Agent for the account of each Bank a commitment fee on the average daily amount
of such Bank's Available Commitment for each day from the Agreement Date through
(but excluding) the Maturity Date at a rate per annum of 0.50%, payable
quarterly in arrears on each Interest Payment Date, on the Maturity Date and on
the date of any termination of such Bank's Commitment.
(b) Letter of Credit Fees. The Borrower shall pay to the Agent for the
account of each Bank a letter of credit fee on the average daily aggregate
amount of the LC Outstandings for each day from the Agreement Date through (but
excluding) the Maturity Date at a rate per annum of 2.375% (provided, however,
that upon the occurrence and during the continuance of an Event of Default, such
rate shall increase to 4.375% per annum), compounded quarterly on each Interest
Payment Date and payable semiannually in arrears on each Rent Payment Date.
(c) Agency Fees. The Borrower shall pay to the Agent, for its own account,
the fees payable to it under the Agent's Fee Letter, in the amounts and at the
times specified therein.
(d) Fees Non-Refundable. None of the fees payable under this Section 2.08
shall be refundable in whole or in part.
(e) Survival. Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower contained
in this Section 2.08 shall survive the repayment of all other amounts owing to
the Agent and the Banks under the Loan Documents and the termination of the
Commitments.
Section 2.09. Computation of Interest and Fees. Interest calculated on
the basis of the Adjusted Eurodollar Rate or the Federal Funds Rate and all fees
payable hereunder shall be computed on the basis of a year of 360 days and paid
for the actual number of days elapsed. Interest calculated on the basis of the
Prime Rate shall be computed on the basis of a year of 365 or 366 days, as
applicable, and paid for the actual number of days elapsed. Interest for any
period shall be calculated from and including the first day thereof to but
excluding the last day thereof.
Section 2.10. Evidence of Indebtedness. Each Bank's Loans and
Unreimbursed Drawings and the Borrower's obligation to repay such Loans and
Unreimbursed Drawings with interest in accordance with the terms of this
Agreement shall be evidenced by this Agreement, the records of such Bank and a
single Note payable to the order of such Bank which, subject to Section 11.22,
may be a Registered Note. The records of each Bank shall be prima facie evidence
of such Bank's Loans, Unreimbursed Drawings and accrued interest thereon and of
all payments made in respect thereof.
19
Section 2.11. Payments by the Borrower. (a) Time, Place and Manner. All
payments due to the Agent, the Banks or the Issuing Banks under the Loan
Documents shall be made to the Agent at the Agent's Office or to such other
Person or at such other address as the Agent may designate by written notice to
the Borrower. All payments due to any Bank under the Loan Documents, whethermade
to the Agent or directly to such Bank, shall be made for the account of, in the
case of payments in respect of Eurodollar Rate Loans and Eurodollar Rate
Drawings, such Bank's Eurodollar Lending Office and, in the case of all other
payments, such Bank's Domestic Lending Office. A payment shall not be deemed to
have been made on any day unless such payment has been received by the required
Person, at the required place of payment, in Dollars in funds immediately
available to such Person at such place,no later than 12:00 noon on such day.
(b) No Reductions. All payments due to the Agent, any Bank or any Issuing
Bank under the Loan Documents, and all other terms, conditions, covenants and
agreements to be observed and performed by the Borrower thereunder, shall be
made, observed or performed by the Borrower without any reduction or deduction
whatsoever, including any reduction or deduction for any set-off, recoupment,
counterclaim (whether sounding in tort, contract or otherwise) or Tax, except,
subject to Section 2.13, for any withholding or deduction for Taxes required to
be withheld or deducted under Applicable Law.
(c) Extension of Payment Dates. Whenever any payment to the Agent, any Bank
or any Issuing Bank under the Loan Documents would otherwise be due (except by
reason of acceleration) on a day that is not a Business Day, or, in the case of
payments of the principal of Eurodollar Rate Loans, a Eurodollar Business Day,
such payment shall instead be due on the next succeeding Business Day or
Eurodollar Business Day, as the case may be, unless, in the case of a payment of
the principal of Eurodollar Rate Loans, such extension would cause payment to be
due in the next succeeding calendar month, in which case such due date shall be
advanced to the next preceding Eurodollar Business Day. If the date any payment
under the Loan Documents is due is extended (whether by operation of any Loan
Document, Applicable Law or otherwise), such payment shall bear interest for
such extended time at the rate of interest applicable hereunder.
Section 2.12. Distribution of Payments by the Agent. (a) The Agent
shall promptly distribute to each Bank its ratable share of each payment
received by the Agent under the Loan Documents for the account of the Banks by
credit to an account of such Bank at the Agent's Office or by wire transfer to
an account of such Bank at an office of any other commercial bank located in the
United States.
(b) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Banks under the Loan Documents that
the Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full tothe Agent on such date and the Agent in
its sole discretion may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date a corresponding amount with respect to
the amount then due such Bank. If and to the extent the Borrower shall not have
so made such payment in full to the Agent and the Agent shall have so
distributed to any Bank a corresponding amount, such Bank shall, on demand,
repay to the Agent the amount so
20
distributed together with interest thereon, for each day from the date such
amount is distributed to such Bank until the date such Bank repays such amount
to the Agent, at the Federal Funds Rate until (and including) the third Business
Day after demand is made and thereafter at the Base Rate.
Section 2.13. Taxes. (a) Taxes Payable by the Borrower. If under
Applicable Law any Tax is required to be withheld or deducted by the Borrower
from, or is otherwise payable by the Borrower in connection with, any payment to
the Agent, any Bank or any Issuing Bank under the Loan Documents, the Borrower
(i) shall (A) if so required, withhold or deduct the amount of such Tax from
such payment and, in any case, pay such Tax to the appropriate taxing authority
in accordance with Applicable Law and (B) indemnify the Agent, such Bank and
such Issuing Bank in accordance with the provisions of Section 11.02(d) against
its failure so to do and (ii) shall, subject to Section 2.13(c), pay to the
Agent, such Bank or such Issuing Bank, as applicable, such additional amounts as
may be necessary so that the net amount received by the Agent, such Bank or such
Issuing Bank with respect to such payment, after withholding or deducting all
Taxes required to be withheld or deducted by the Borrower, is equal to the full
amount payable under the Loan Documents. If any Tax is withheld or deducted by
the Borrower from, or is otherwise payable by the Borrower in connection with,
any payment payable to the Agent, any Bank or any Issuing Bank under the Loan
Documents, the Borrower shall, as soon as possible after the date of such
payment, furnish to the Agent, such Bank or such Issuing Bank, as applicable,
the original or a certified copy of a receipt for such Tax from the applicable
taxing authority. If any payment due to the Agent, any Bank or any Issuing Bank
under the Loan Documents is or is expected to be made without withholding or
deducting therefrom, or otherwise paying in connection therewith, any Tax
payable by the Borrower to any taxing authority, the Borrower shall, within 30
days after any request from the Agent, such Bank or such Issuing Bank, as
applicable, furnish to the Agent, such Bank or such Issuing Bank a certificate
from such taxing authority, or an opinion of counsel acceptable to the Agent,
such Bank or such Issuing Bank, in either case stating that no Tax payable to
such taxing authority was or is, as the case may be, required to be withheld or
deducted from, or otherwise paid by the Borrower in connection with, such
payment.
(b) Taxes Payable by the Agent, any Bank or any Issuing Bank. The Borrower
shall, within thirty days of request by the Agent, any Bank or any Issuing Bank
for the payment thereof, but subject to Section 2.13(c), pay to the Agent, such
Bank or such Issuing Bank, as the case may be, (i) all Taxes (other than Bank
Taxes, payable by the Agent or such Bank, as the case may be) with respect to
any payment due to the Agent, such Bank or such Issuing Bank under the Loan
Documents and (B) all Taxes payable by the Agent, such Bank or such Issuing Bank
as a result of payments made by the Borrower (whether made to a taxing authority
or to the Agent, such Bank or such Issuing Bank) pursuant to this Section
2.13(b). A certificate as to the amount of such payment or liability delivered
to the Borrower by a Bank or Issuing Bank, or by the Agent on its own behalf or
on behalf of a Bank or Issuing Bank, shall be conclusive absent manifest error.
(c) Limitations. Notwithstanding anything to the contrary contained herein,
the Borrower shall not be required to pay any additional amount in respect of
withholding of United States Federal income taxes pursuant to this Section 2.13
to any Bank (i) except to the extent
21
such Taxes are required to be withheld as a result of (A) in the case of a
Person that is a Bank on the Agreement Date, a Regulatory Change Enacted after
the Agreement Date and (B) in the case of a Person that becomes a Bank after the
Agreement Date pursuant to Section 11.09(a), a Regulatory Change Enacted after
such Person becomes a Bank, or (ii) to the extent such withholding is required
because such Bank has failed to submit any form or certificate that it is
entitled to so submit under Applicable Law (including any Forms required to be
submitted pursuant to Section 2.13(d)).
(d) Exemption from U.S. Withholding Taxes. There shall be submitted to the
Borrower and the Agent (i) on or before the first date that interest or fees are
payable to such Bank under the Loan Documents, (A) if at the time the same are
applicable (1) by each Bank that is not a United States Person, two duly
completed and signed copies of Internal Revenue Service Form 1001 or 4224, in
either case entitling such Bank to a complete exemption from withholding of any
United States federal income taxes on all amounts to be received by such Bank
under the Loan Documents or (2) by each Bank that is a Non-US Bank, (x) a duly
completed Internal Revenue Service Form W-8ECI or W-8BEN, as applicable, and (y)
a certification in the form of Schedule 2.13(d) that such Bank is a Non-US Bank
or (B) if at the time any of the foregoing are inapplicable, duly completed and
signed copies of such form, if any, as entitles such Bank to exemption from
withholding of United States federal income taxes to the maximum extent to which
such Bank is then entitled under Applicable Law, and (ii) from time to time
thereafter, prior to the expiration or obsolescence of any previously delivered
form or upon any previously delivered form becoming inaccurate or inapplicable,
such further duly completed and signed copies of such form, if any, as entitles
such Bank to exemption from withholding of United States federal income taxes to
the maximum extent to which such Bank is then entitled under Applicable Law.
Each Bank shall promptly notify the Borrower and the Agent if (I) it is required
to withdraw or cancel any form or certificate previously submitted by it or any
such form or certificate has otherwise become ineffective or inaccurate or (II)
payments to it are or will be subject to withholding of United States federal
income taxes to a greater extent than the extent to which paymentsto it were
previously subject. Upon the request of the Borrower or the Agent, each Bank
that is a United States Person shall from time to time submit to the Borrower
and the Agent a certificate to the effect that such Bank is a United States
Person and a duly completed Internal Revenue Service Form W-9.
Section 2.14. Pro Rata Treatment. Except to the extent otherwise provided
herein, (a) Loans of each Type to be made on any day shall be made by the Banks
pro rata in accordance with their respective Commitments, (b) Loans of the Banks
shall be converted and continued pro rata in accordance with their respective
amounts of Loans of the Type and, in the case of Eurodollar Rate Loans, having
the Interest Period being so converted or continued, (c) each reduction in the
Commitments shall be made pro rata in accordance with the respective amounts
thereof and (d) each payment of the principal of or interest on the Loans and on
Unreimbursed Drawings or of fees shall be made for the account of the Banks pro
rata in accordance with the respective amounts thereof then due and payable.
Section 2.15. Computations of Outstandings. Whenever reference is made in
this Agreement to the principal amount outstanding on any date under this
Agreement, such reference shall refer to the sum of (a) the aggregate principal
amount of all Loans and Unreimbursed
22
Drawings outstanding on such date plus (b) the aggregate LC Outstandings of all
Letters of Credit outstanding on such date, in each case after giving effect to
all Extensions of Credit and prepayments to be made on such date and the
application of the proceeds thereof. At no time shall the principal amount
outstanding under this Agreement exceed the aggregate amount of the Commitments.
References to the unused portion of the Commitments shall refer to the excess,
if any, of the Commitments over the principal amount outstanding hereunder; and
references to the unused portion of any Bank's Commitment shall refer to such
Bank's Percentage of the unused Commitments.
Section 2.16. Extension of Maturity Date. At least 60 but not more than
120 days prior to the then-scheduled Maturity Date, the Borrower may, by
delivering a written notice to such effect to the Agent (each such request being
irrevocable), request that each Bank and Issuing Bank consent to a one-year
extension of the Maturity Date. Upon receipt of any such notice, the Agent shall
promptly communicate such request to the Banks and the Issuing Banks. Within 30
days following the giving of such notice by the Borrower, the Banks and the
Issuing Banks shall indicate to the Agent whether the Borrower's request to so
extend the then-scheduled Maturity Date is acceptable to the Banks and the
Issuing Banks (and, if so, the conditions, if any, relating to such acceptance),
it being understood that the unanimous written consent of the Banks and the
Issuing Banks shall be required to effect any such request, that the
determination by each Bank and Issuing Bank will be in its sole and absolute
discretion and that the failure of any Bank or Issuing Bank to so respond
within such period shall be deemed to constitute a refusal by such Bank or
Issuing Bank (as the case may be) to consent to such request (with the result
being that such request is denied). The Agent shall promptly notify the
Borrower, the Banks and the Issuing Banks of the result of such request, and if
such request shall have been consented to by all of the Banks and Issuing Banks,
the Maturity Date shall be extended to the first anniversary of the
then-scheduled Maturity Date (which date shall be a Rent Payment Date).
Section 2.17. Working Capital Facility Designation. The Loans, the
aggregate Commitments hereunder to the extent that they are used to provide
Loans, all interest payable hereunder and under the Notes in respect of the
outstanding principal amount of the Loans, all fees payable pursuant to Section
2.08(a), and all other amounts payable hereunder and under the other Loan
Documents (other than interest, principal, fees and any other amounts payable in
respect of Letters of Credit and LC Outstandings, Unreimbursed Drawings and
amounts payable to Issuing Banks in such capacity), and all covenants,
agreements and other obligations of the Borrower relating thereto, are
designated as the "Working Capital Facility" as such term is used in the
Operative Documents. The rights, obligations and remedies of the Agent and the
Banks, in their collective capacity as "Working Capital Provider" (as such term
is used in the Operative Documents), under the Operative Documents (including
Sections 2.4, 3.1(b)(i), 3.1(b)(ii), 3.2 and 3.3 of the Depositary Agreement)
shall apply solely with respect to, and shall be limited to the extent of
amounts owed in respect of, such "Working Capital Facility". For the avoidance
of doubt, this Section 2.17 shall not restrict or otherwise limit therights or
remedies of the Agent, the Issuing Banks or the Banks in connection with any
Permitted Indebtedness (other than the Working Capital Facility) provided by any
such Person to the Borrower.
23
ARTICLE 3
LETTERS OF CREDIT
Section 3.01. Issuing Banks. Subject to the terms and conditions
hereof, the Borrower may from time to time identify and arrange for one or more
Banks to act as an Issuing Bank hereunder. Any such designation by the Borrower
shall be notified to the Agent at least three Business Days prior to the first
date upon which the Borrower proposes that such Issuing Bank issue its first
Letter of Credit. Nothing contained herein shall be deemed to require any Bank
to agree to act as an Issuing Bank, if it does not so desire; provided, however,
that if no other Bank agrees to be an Issuing Bank hereunder, Union Bank shall
be the sole Issuing Bank hereunder. The Borrower hereby notifies the Agent of
the designation of Union Bank to act as an Issuing Bank hereunder. The Agent
hereby acknowledges such notice and Union Bank hereby accepts such designation.
Section 3.02. Letters of Credit. (a) Each Letter of Credit shall be
issued (or the stated expiration date thereof extended or terms thereof modified
or amended) on not less than two Business Days' prior written notice thereof by
the Borrower to the Agent (which shall promptly distribute copies thereof to the
Banks) and the relevant Issuing Bank. Each such notice (a "Request for
Issuance") shall specify (i) the date (which shall be a Business Day) of
issuance of such Letter of Credit (or the date of effectiveness of such
extension, modification or amendment) and the stated expiry date thereof (which
shall be no later than the date that is five Business Days prior to the Maturity
Date), (ii) the proposed stated amount of such Letter of Credit, (iii) the name
and address of the beneficiary of such Letter of Credit, (iv) whether such
Letter of Credit should be delivered directly to the beneficiary thereof or to
the Borrower and (v) such other information as shall demonstrate compliance of
such Letter of Credit with the requirements specified therefor in this Agreement
and the relevant Issuing Bank Agreement. Each Request for Issuance shall be
irrevocable unless modified or rescinded by the Borrower not less than two days
priorto the proposed date of issuance (or effectiveness) specified therein. Not
later than 12:00 noon on the proposed date of issuance (or effectiveness)
specified in such Request for Issuance, and upon fulfillment of the applicable
conditions precedent and the other requirements set forth herein and in the
relevant Issuing Bank Agreement, such Issuing Bank shall issue (or extend, amend
or modify) such Letter of Credit in accordance with such Request for Issuance
and provide notice and a copy thereof to the Agent, which shall promptly furnish
copies thereof to the Banks and the Borrower.
(b) Each Bank severally agrees with such Issuing Bank to participate in the
Extension of Credit resulting from the issuance (or extension, modification or
amendment) of such Letterof Credit, in the manner and the amount provided in
Section 3.04(b), and the issuance of such Letter of Credit shall be deemed to be
a confirmation by such Issuing Bank and each Bank of such participation in such
amount.
(c) Notwithstanding anything herein to the contrary, the sum of (i) the
aggregate LC Outstandings of all Letters of Credit outstanding at any one time
and (ii) the aggregate principal amount of Unreimbursed Drawings outstanding at
such time, shall not exceed the Letter of Credit Sublimit.
24
Section 3.03. Issuing Bank Fees. The Borrower shall pay directly to each
Issuing Bank such fees and expenses, if any, specified to be paid to such
Issuing Bank pursuant to the Issuing Bank Agreement to which it is a party, at
the times, and in the manner, specified in such Issuing Bank Agreement;
provided, however, that if, pursuant to the Depositary Agreement, the Borrower
is not permitted to pay any such fees and expenses to such Issuing Bank on the
due date therefor, the Borrower shall pay such fees and expenses on the first
date thereafter (but in no event later than the next-scheduled Rent Payment
Date) that the Borrower is permitted to pay such fees and expenses, provided,
that, in such case, all such fees and expenses shall bear interest at the Base
Rate plus 1.375% per annum from such due date until paid in full, payable to
such Issuing Bank on the date that such fees and expenses are paid by the
Borrower.
Section 3.04. Reimbursement to Issuing Banks; Interest. (a) The Borrower
hereby agrees to pay to the Agent for the account of each Issuing Bank, on
demand made by such Issuing Bank to the Borrower and the Agent, on and after
each date on which such Issuing Bank shall pay any amount under the Letter of
Credit issued by such Issuing Bank, a sum equal to the amount so paid plus
interest on such amount from the date so paid by such Issuing Bank until
repayment to such Issuing Bank in full at a fluctuating interest rate per annum
equal at all times to the Base Rate plus 1.375%; provided, however, that if,
pursuant to the Depositary Agreement, the Borrower is not permitted to pay any
such amounts to such Issuing Bank on the date of demand therefor, the Borrower
shall pay such amounts (other than any amounts paid by such Issuing Bank under
such Letter of Credit that have been repaid to the Issuing Bank pursuant to
subsection (b) below) on the first date thereafter (but in no event later than
the next-scheduled Rent Payment Date) that the Borrower is permitted to pay such
amounts, provided, that, in such case, all such amounts shall bear interest at
the Base Rate plus 1.375% per annum from such date of demand until paid in full,
payable to such Issuing Bank on the date that such amounts are paid by the
Borrower.
(b) If any Issuing Bank shall not have been reimbursed in full for any
payment made by such Issuing Bank under any Letter of Credit issued by such
Issuing Bank on the date of such payment, such Issuing Bank shall give the Agent
and each Bank prompt notice thereof (an "LC Payment Notice") no later than 12:00
noon on the Business Day immediately succeeding the date of such payment by such
Issuing Bank. Each Bank severally agrees to purchase a participation in the
reimbursement obligation of the Borrower to such Issuing Bank under subsection
(a) above, by paying to the Agent for the account of such Issuing Bank an amount
equal to such Bank's Percentage of such unreimbursed amount paid by such Issuing
Bank, plus interest on such amount at a rate per annum equal to the Federal
Funds Rate from the date of such payment by such Issuing Bank to the date of
payment to such Issuing Bank by such Bank. Each such payment by a Bank shall be
made not later than 3:00 p.m. on the later to occur of (i) the Business Day
immediately following the date of such payment by such Issuing Bank and (ii) the
Business Day on which such Bank shall have received an LC Payment Notice from
such Issuing Bank. Each Bank's obligation to make each such payment to the Agent
for the account of such Issuing Bank shall be several and shall not be affected
by the occurrence or continuance of any Default or the failure of any other Bank
to make any payment under this Section 3.04. Each Bank further agrees that each
such payment shall be made without any offset, abatement, withholding or
reduction whatsoever.
25
(c) The failure of any Bank to make any payment to the Agent for the
account of an Issuing Bank in accordance with subsection (b) above shall not
relieve any other Bank of its obligation to make payment, but no Bank shall be
responsible for the failure of any other Bank. If any Bank (a "non-performing
Bank") shall fail to make any payment to the Agent for the account of an Issuing
Bank in accordance with subsection (b) above within five Business Days after the
LC Payment Notice relating thereto, then, for so long as such failure shall
continue, such Issuing Bank shall be deemed, for purposes of Section 11.08 and
Article 8 hereof, to be a Bank hereunder owed a Loan in an amount equal to the
outstanding principal amount due and payable by such non-performing Bank to the
Agent for the account of such Issuing Bank pursuant to subsection (b) above.
(d) Each Unreimbursed Drawing shall bear interest on the outstanding
principal amount thereof at a rate per annum equal to (i) the Base Rate as in
effect from time to time plus 1.375%, compounded quarterly on each Interest
Payment Date, or (ii) upon the election of the Borrower pursuant to subsection
(e) below to have such Unreimbursed Drawing bear interest at the Adjusted
Eurodollar Rate, the applicable Adjusted Eurodollar Rate plus 2.375%. Upon the
occurrence and during the continuance of an Event of Default (and whether before
or after judgment), each Unreimbursed Drawing (whether or not due) shall bear
interest at a rate per annum equal to the applicable Post-Default Rate. Interest
on each Unreimbursed Drawing (including interest at the Post-Default Rate) shall
be payable on the earlier to occur of (A) the next-scheduled Rent Payment Date
following the date of such Unreimbursed Drawing or (B) the date that the
Borrower reimburses the Banks for such Unreimbursed Drawing.
(e) So long as no Default has occurred and is continuing, the Borrower may,
upon notice delivered to the Agent not later than 10:00 a.m. three Eurodollar
Business Days prior to the requested date therefor, request that any BaseRate
Drawing or Base Rate Drawings be converted into a Eurodollar Rate Drawing. Each
such notice shall be irrevocable and shall specify (i) the requested date of
such conversion (which date shall be a Eurodollar Business Day), (ii) the
aggregate principal amount of Base Rate Drawings to be converted (which amount
shall be at least $1,000,000), and (iii) the Interest Period to be applicable to
the Eurodollar Rate Drawing resulting from such conversion (which Interest
Period shall be one, two or three months and shall end on the next-scheduled
Rent Payment Date following the date of such conversion). Upon receipt of any
such notice, the Agent shall promptly notify each Bank of the contents thereof.
Each notice of conversion delivered pursuant to this Section 3.04(e) shall be in
the form of Schedule 3.04(e).
(f) Each Unreimbursed Drawing shall mature and become due and payable, and
shall be repaid by the Borrower, in full on the next-scheduled Rent Payment Date
following the date of such Unreimbursed Drawing (but in any event no later than
the Maturity Date). The Borrower may, to the extent permitted under the terms of
the Depositary Agreement, prepay any Unreimbursed Drawing in whole or in part,
without premium or penalty (but subject to Section 9.04), except that any
partial prepayment shall be in an aggregate principal amount of at least
$1,000,000. The Borrower shall give the Agent notice of each prepayment no later
than 10:00 a.m. on, in the case of a prepayment of Base Rate Drawings, the
Business Day, and, in the case of a prepayment of Eurodollar Rate Drawings, the
third Eurodollar Business Day, before the date of such prepayment. Each such
notice of prepayment shall specify (i) the date such prepayment
26
is to be made, (ii) the amount of such prepayment, and (iii) in the case of any
prepayment of Eurodollar Rate Drawings, the last day of the Interest Period
applicable thereto. Upon receipt of any such notice, the Agent shall promptly
notify each Bank of the contents thereof. Amounts to be prepaid shall
irrevocably be due and payable on the date specified in the applicable notice of
prepayment, together with accrued and unpaid interest thereon.
Section 3.05. Obligations Absolute. The payment obligations of each Bank
under Section 3.04(b) and of the Borrower under this Agreement in respect of any
payment under any Letter of Credit and any Unreimbursed Drawing shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including the following
circumstances:
(a) any lack of validity or enforceability of any Loan Document or any
other agreement or instrument relating thereto or to such Letter of Credit;
(b) any amendment or waiver of, or any consent to departure from, all
or any of the Loan Documents;
(c) the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against any beneficiary, or any
transferee, of such Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), any Issuing Bank, or any
other Person, whether in connection with this Agreement, the transactions
contemplated herein or by such Letter of Credit, or any unrelated
transaction;
(d) any statement or any other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(e) payment in good faith by any Issuing Bank under the Letter of
Credit issued by such Issuing Bank against presentation of a draft or
certificate which does not comply with the terms of such Letter of Credit;
or
(f) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
Section 3.06. Liability of Issuing Banks and the Banks. As among the
Borrower, the Agent, the Banks and the Issuing Banks, the Borrower assumes all
risks of the acts and omissions of any beneficiary or transferee of any Letter
of Credit. Neither the Issuing Bank that has issued such Letter of Credit, the
Agent, the Banks nor any of their respective officers, directors, employees,
agents or Affiliates shall be liable or responsible for (a) the use that may be
made of such Letter of Credit or any acts or omissions of any beneficiary or
transferee thereof in connection therewith; (b) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (c) payment by such Issuing Bank against presentation of documents that
do not comply with the terms of such Letter of Credit, including failure of any
documents to bear any reference or adequate reference to such Letter of Credit;
or (d) any other circumstances whatsoever in making or failing to makepayment
under such Letter of Credit,
27
except that, notwithstanding anything contained herein to the contrary, the
Borrower shall have the right to bring suit against such Issuing Bank, and such
Issuing Bank shall be liable to the Borrower and any Bank, to the extent of any
direct, as opposed to consequential, damages suffered by the Borrower or such
Bank which the Borrower or such Bank proves were caused by such Issuing Bank's
willful misconduct or gross negligence, including such Issuing Bank's willful
failure to make timely payment under such Letter of Credit following the
presentation to it by the beneficiary thereof of a draft and accompanying
certificate(s) which strictly comply with the terms and conditions of such
Letter of Credit. In furtherance and not in limitation of the foregoing, any
Issuing Bank may accept sight drafts and accompanying certificates presented
under the Letter of Credit issued by such Issuing Bank that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary. Notwithstanding the foregoing, no
Bank (other than the applicable Issuing Bank) shall be obligated to indemnify
the Borrower for damages caused by such Issuing Bank's willful misconduct or
gross negligence, and the obligation of the Borrower to reimburse the Banks
hereunder shall be absolute and unconditional, notwithstanding the gross
negligence or willful misconduct of any Issuing Bank.
ARTICLE 4
CONDITIONS TO EXTENSIONS OF CREDIT
Section 4.01. Conditions to the Initial Extension of Credit. The
obligation of each Bank and Issuing Bank to make its initial Extension of Credit
is subject to the determination of each Bank and Issuing Bank, in their sole and
absolute discretion, that each of the following conditions has been fulfilled:
(a) The Agent shall have received, on or before the day of the initial
Extension of Credit, the following, each dated such day (except as otherwise
specified below), in form and substance satisfactory to each Bank (except where
otherwise specified below) and (except for the Notes) in sufficient copies for
each Bank:
(i) This Agreement, duly executed by the Borrower, each Bank, Union
Bank, in its capacity as an Issuing Bank, and the Agent.
(ii) The Pledge Agreement, duly executed by the Borrower, together
with:
(A) acknowledgment copies, dated on or before the date of the initial
Extension of Credit, of proper Financing Statements (Form UCC-1) duly filed
under the Uniform Commercial Code of all jurisdictions as may be necessary
or, in the opinion of the Agent, desirable to perfect the Liens created by
the Pledge Agreement;
(B) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports satisfactory to the Agent, dated on or
before the Agreement Date and listing the Financing Statements referred to
in paragraph (A) above (or, if such Financing Statements are not so listed,
other evidence satisfactory to the Agent that the same shall have been duly
filed), and all other
28
effective financing statements that name the Borrower (under its present name
and any previous name) as debtor and that are filed in the jurisdictions
referred to in said paragraph (A), together with copies of such other financing
statements (none of which shall cover the collateral purported to be covered by
the Pledge Agreement);
(C) certificates evidencing all limited liability company membership
interests included in the Collateral, accompanied by irrevocable stock
powers, executed in blank; and
(D) evidence of the completion of all other recordings and filings,
and all other actions, as may be necessary or, in the opinion of the Agent,
desirable to perfect the Liens created by the Pledge Agreement.
(iii) An Issuing Bank Agreement, duly executed by the Borrower and Union
Bank, in form and substance satisfactory to the Agent.
(iv) The Guaranty, duly executed by AES.
(v) The Agent's Fee Letter, duly executed by the Borrower, in form and
substance satisfactory to the Agent.
(vi) The amended and restated Depositary Agreement, in substantially the
form of Exhibit D, duly executed by each of the parties thereto.
(vii) An amendment to each of the Participation Agreements and Appendix A
thereto, in substantially the form of Exhibit F, duly executed by each of the
parties thereto.
(viii) Certified copies of the resolutions of the Board of Directors (or
comparable governing body) of AES NY authorizing the Borrower to enter into each
of the Loan Documents to which it is, or is to be, a party, and of all documents
evidencing other necessary action (partnership, limited liability company or
otherwise) and Governmental Approvals, if any, with respect to such Loan
Documents.
(ix) A certificate of AES NY certifying the names, true signatures and
incumbency of the officers of AES NY authorized to sign the Loan Documents to
which the Borrower is, or is to be, a party, and the other documents to be
delivered hereunder and thereunder.
(x) A certificate of AES certifying the names, true signatures and
incumbency of the officers of AES authorized to sign the Guaranty, and any other
documents to be delivered thereunder.
(xi) Copies of the certificate of limited partnership, partnership
agreement, certificate of formation, limited liability company agreement,
certificate of incorporation, by-laws or comparable organizational documents of
the Borrower, AES and each AEE
29
Entity, together with all amendments thereto, in each case certified in a manner
satisfactory to the Agent.
(xii) Certified copies of each of the executed Operative Documents referred
to in Section 4.1 of each of the Participation Agreements (other than the Tax
Indemnity Agreement).
(xiii) Good standing certificates in respect of the Borrower and each AEE
Entity (other than AES NY3) from its jurisdiction of organization and each
jurisdiction in which it is qualified to do business as a foreign corporation,
limited liability company or partnership,as the case may be, and a good standing
certificate in respect of AES from its jurisdiction of incorporation, in each
case dated no earlier than 10 days prior to the Agreement Date.
(xiv) the Notes payable to the order of each Bank, duly executed by the
Borrower.
(xv) Favorable opinions of:
(A) Chadbourne & Parke LLP, special New York counsel to the Borrower,
AES NY and AES, in substantially the form of Schedule 4.01(a)(xv)(A);
(B) Joseph C. Brandt, Esq., counsel to the Borrower, AES NY and AES,
in substantially the form of Schedule 4.01(a)(xv)(B); and
(C) Hughes Hubbard & Reed LLP, counsel to the Agent, in substantially
the form of Schedule 4.01(a)(xv)(C).
(xvi) Such other approvals, reports (including reports of any
consultants deemed necessary or desirable by the Agent), opinions and
documents as the Agent may reasonably request.
(b) The Agent shall have received satisfactory evidence that the Existing
Credit Facility has been irrevocably terminated, all amounts payable pursuant
thereto have been paid in full, and all Liens securing the Existing Credit
Facility have been released.
(c) The following statements shall be true and the Agent shall have
received a certificate of the Borrower, dated the Closing Date and in sufficient
copies for each Bank, stating that:
(i) the representations and warranties set forth in Article 5 and
Section 7.02 of this Agreement and Section 2.01 of the Pledge Agreement are
true and correct on and as of the Closing Date with the same effect as
though made on and as of the Closing Date, and
(ii) no Default has occurred and is continuing, both before and
after giving effect to the transactions contemplated by the Loan Documents.
30
(d) The following statement shall be true and the Agent shall have received
a certificate of AES, dated the Closing Date and in sufficient copies for each
Bank, stating that: the representations and warranties set forth in Section 5 of
the Guaranty are true and correct on and as of the Closing Date with the same
effect as though made on and as of the Closing Date.
(e) All fees payable on or prior to the requested date of such Extension of
Credit pursuant to Section 2.08 of this Agreement or any other Loan Document,
and all amounts payable pursuant to Section 11.02 of this Agreement for which
invoices have been delivered to the Borrower on or prior to such date, shall
have been paid in full or arrangements satisfactory to the Agent shall have been
made to cause them to be paid in full concurrently with the disbursement of the
proceeds of the Loans to be made on such date.
(f) All Governmental Approvals necessary in connection with the Loan
Documents and the transactions contemplated thereby shall have been obtained and
be in full force and effect. All third party approvals necessary or, in the
judgment of the Agent, advisable in connection with the Loan Documents and the
transactions contemplated thereby shall have been obtained and be in full force
and effect. All such Governmental Approvals and third party approvals, if any,
shall be in form and substance satisfactory to the Agent and the Banks.
Section 4.02. Conditions to Each Extension of Credit. The obligation of
each Bank or Issuing Bank, as the case may be, to make an Extension of Credit
(including the initial Extension of Credit) is subject to the determination of
such Bank or Issuing Bank (as the case may be) in its sole and absolute
discretion, that each of the following conditions has been fulfilled:
(a) In the case of any Extension of Credit consisting of Loans, (i) the
Agent shall have received a Funding Date Certificate complying with the
requirements of the Depositary Agreement setting forth the amounts to be applied
or transferred pursuant to Section 3.1(b) of the Depositary Agreement, and (ii)
after giving effect to such applications or transfers, including, but not
limited to, the Loans to be made on the Funding Date referred to therein, the
amounts remaining in the Revenue Account, the Operating Account and each bank
account of the Borrower or any Subsidiary or otherwise then available to the
Borrower or any Subsidiary for payment of Operating and Maintenance Costs, other
than pursuant to Section 3.13 of the Depositary Agreement (collectively,
"Available Amounts"), would, in the aggregate, be less than $10 million;
provided, that the sum of (A) the aggregate amount transferred to the Operating
Account with respect to any Rent Payment Period (including sums properly
withdrawn therefrom during such Rent Payment Period to pay Operating and
Maintenance Costs), (B) Available Amounts prior to giving effect to such Loans
plus (C) the aggregate principal amount of such Loans, does not exceed the sum
of (1) 125% of the amount set forth in the Annual Operating Budget for such Rent
Payment Period plus (2) fuel costs payable for such Rent Payment Period;
(b) the Agent shall have received (i) if such Extension of Credit consists
of Loans, a notice of borrowing, for the Funding Date referred to in subsection
(a) above, with respect to such Loans complying with the requirements of Section
2.02, and/or (ii) in the case of any other Extension of Credit, a Request for
Issuance that complieswith the requirements of Section 3.02(a);
31
(c) each Loan Document Representation and Warranty shall be true and
correct at and as of the time such Extension of Credit is to be made, both with
and without giving effect to such Extension of Credit and all other Extensions
of Credit to be made at such time and to the application of the proceeds
thereof;
(d) no Default shall have occurred and be continuing at the time such
Extension of Credit is to be made or would result from the making of such
Extension of Credit and all other Extensions of Credit to be made at such time
or from the application of the proceeds thereof;
(e) such Bank or Issuing Bank (as the case may be) shall have received such
Information as it may have requested pursuant to Section 7.01(f); and
(f) such Extension of Credit will not contravene any Applicable Law
applicable to such Bank.
Except to the extent that the Borrower shall have disclosed in the notice
of borrowing or Request for Issuance (as the case may be), or in a subsequent
notice given to the Agent, the Banks and the Issuing Banks prior to 5:00 p.m. on
the Business Day before the requested date for the making of the requested
Extension of Credit, that a condition specified in clause (c) or (d) above will
not be fulfilled as of the requested time forthe making of such Extension of
Credit, the Borrower shall be deemed to have made a Representation and Warranty
as of the time of the making of such Extension of Credit that the conditions
specified in such clauses have been fulfilled as of such time. No such
disclosure by the Borrower that a condition specified in clause (c) or (d) above
will not be fulfilled as of the requested time for the making of the requested
Extension of Credit shall affect the right of each Bank or Issuing Bank (as the
case may be) to not make the Extension of Credit requested to be made by it if,
in such Bank's or Issuing Bank's determination, such condition has not been
fulfilled at such time.
Section 4.03. Determinations Under Section 4.01. For purposes of
determining compliance with the conditions specified in Section 4.01, each Bank
shall be deemed to have consented to, approved or accepted or to be satisfied
with each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to the Banks unless an officer of the
Agent responsible for the transactions contemplated by this Agreement shall have
received notice from such Bank prior to the date of the initial Extension of
Credit specifying its objection thereto.
Section 4.04. Reliance on Certificates. The Banks, the Issuing Banks and
the Agent shall be entitled to rely conclusively upon the certificates delivered
from time to time by officers of AES NY (in its capacity as general partner of
the Borrower) as to the names, incumbency, authority and signatures of the
respective persons named therein until such time as the Agent may receive a
replacement certificate, in form acceptable to the Agent, from an officer of AES
NY (in its capacity as general partner of the Borrower) identified to the Agent
as having authority to deliver such certificate, setting forth the names and
true signatures of the officers and other representatives of AES NY thereafter
authorized to act on behalf of the Borrower and AES NY (in its capacity as
general partner of the Borrower).
32
ARTICLE 5
CERTAIN REPRESENTATIONS AND WARRANTIES
In order to induce each Bank and Issuing Bank to enter into this Agreement
and to make each Extension of Credit requested to be made by it, the Borrower
represents and warrants as follows:
Section 5.01. Due Organization, Etc. The Borrower is a limited
partnership duly formed, validly existing, and in good standing under the laws
of the State of Delaware, is duly licensed or qualified and in good standing in
each jurisdiction in which the failure to so qualify could reasonably be
expected to result in (a) a Material Adverse Effect or (b) a Materially Adverse
Effect on (i) AES NY, (ii) the Borrower and the AEE Subsidiaries taken as a
whole, (iii) any Loan Document or (iv) the Collateral, and has the partnership
power and authority to own, or hold under lease, its assets and properties,
conduct its business as now conducted and as presently proposed to be conducted
and enter into and perform its obligations under this Agreement and the other
Loan Documents and the Operative Documents towhich it is or will be a party. The
sole general partner of the Borrower is AES NY. The sole limited partner of the
Borrower is AES NY2. Each of AES NY, AES NY2 and the AEE Subsidiaries is a
limited liability company duly organized, validly existing, and in good standing
under the laws of the State of Delaware, is duly licensed or qualified and in
good standing in each jurisdiction in which the failure to so qualify could
reasonably be expected to result in (A) a Material Adverse Effect or (B) a
Materially Adverse Effect on (1) AES NY, (2) the Borrower and the AEE
Subsidiaries taken as a whole, (3) any Loan Document or (4) the Collateral, and
has all requisite power and authority to own, or hold under lease, its assets
and properties and conduct its business as now conducted and as presently
proposed to be conducted.
Section 5.02. Loan Documents: Authorization; Enforceability; Required
Consents; Absence of Conflicts. The Borrower has the power, and has taken all
necessary action to authorize it, to execute, deliver and perform in accordance
with their respective terms the Loan Documents and to request and receive
Extensions of Credit in an aggregate amount equal to the unused amount of the
Commitments. This Agreement has been, and each of the other Loan Documents when
delivered to the Agent will have been, duly executed and delivered by the
Borrower and is, or when so delivered will be, a legal, valid and binding
agreement of the Borrower, assuming the due authorization, execution and
delivery by each other party thereto, enforceable against the Borrower in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general principles of equity. The
execution, delivery and performance in accordance with their respective terms by
the Borrower of the Loan Documents, and each Extension of Credit made hereunder,
whether or not in the amount of the unused Commitments, do not and (absent any
change in any Applicable Law or applicable Contract) will not (a) require any
Governmental Approval or any other consent or approval, including any consent or
approval of any partner of the Borrower or any member of any AEE Entity, to have
been obtainedor any Governmental Registration to have been made, other than
Governmental Approvals and other consents and approvals and Governmental
Registrations that have been obtained or made, as the case may be, are final and
not subject to review on appeal or
33
to collateral attack, and are in full force and effect, except that the "Order
Clarifying Prior Order", Case 01-E-0357, issued April 4, 2001 by the New York
State Public Service Commission, is subject to an appeal period of four months
from the date of such order, or (b) violate, conflict with, result in a breach
of, constitute a default under, or result in or require the creation of any Lien
(other than Permitted Liens described in Section 6.05(a)) upon any assets of the
Borrower or any AEE Entity under (i) any Contract to which the Borrower or any
AEE Entity is a party or by which the Borrower or any AEE Entity or any of their
respective properties may be bound, or (ii) any Applicable Law that could
reasonably be expected to have a Materially Adverse Effect on (x) any Loan
Document or (y) the Collateral.
Section 5.03. Operative Documents: Due Authorization, Enforceability,
Etc. The execution, delivery and performance of each of the Operative Documents
to which it is or will be a party and the compliance by it with the terms and
provisions thereof have been duly authorized by all necessary action of each of
the Borrower and the AEE Entities, as applicable, and such action does not and
will not require any further action, consent or approval by any trustee or
holder of any Indebtedness of the Borrower or such AEE Entities, as applicable.
Each of the Operative Documents to which it is or will be a party has been duly
executed and delivered by each of the Borrower and the AEE Entities, as
applicable. Assuming the due authorization, execution and delivery by each other
party thereto, the Operative Documents to which the Borrower or any AEE Entity
is or will be a party constitute the legal, valid and binding obligations of the
Borrower or such AEE Entity, as applicable, enforceable against the Borrower or
such AEE Entity, as applicable, in accordance with their respective terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity.
Section 5.04. Operative Documents: No Conflicts. The execution, delivery
and performance by each of the Borrower and the AEE Entities, as applicable, of
each of the Operative Documents to which it is or will be a party, the
consummation by the Borrower and such AEE Entities of the transactions
contemplated thereby, and compliance by the Borrower and such AEE Entities with
the terms and provisions thereof, do not and will not (i) conflict with or
result in any breach of anyagreement to which the Borrower or any AEE Entity is
a party (including any Material Agreement), (ii) conflict with any Applicable
Law which could reasonably be expected to result in a Material Adverse Effect,
(iii) conflict with the partnership agreementof the Borrower or the
organizational documentation of any AEE Entity or (iv) result in the creation of
any Lien (except Permitted Liens) upon any of the property or assets of the
Borrower and such AEE Entities pursuant to the terms of any indenture, mortgage,
deed of trust, credit agreement or any other agreement, contract or instrument
to which the Borrower or such AEE Entity is a party or by which any of their
respective property or assets are bound.
Section 5.05. Operative Documents: Governmental Actions. Except for such
Governmental Approvals as have been validly issued, are in full force and effect
and are non-appealable and the "Order Clarifying Prior Order", Case 01-E-0357,
issued April 4, 2001 by the New York State Public Service Commission (which
order has been validly issued and is in full force and effect but is subject to
an appeal period of four months from the date of such order) ("Existing
Governmental Approvals"), and except as specifically disclosed in Schedule 5.15,
no Governmental Approval is required to be obtained in the name of the Borrower
or any AEE
34
Entity or the Owner Trust in connection with (i) the ownership, operation and
maintenance of the Facility, the Related Facility and the Additional Facilities,
(ii) the execution, delivery and performance by the Borrower of the Operative
Documents to which it is or will be a party, or (iii) the leasing of the
Undivided Interest, except such Governmental Approvals (A) as may be required by
Applicable Law not now in effect, (B) as may be required in consequence of any
transfer of ownership of the Undivided Interest by the Owner Trust, (C) as would
be required by Applicable Law upon termination or expiration of the Lease in
connection with taking possession of an interest in any assets of the Borrower
in accordance with the Support Agreements or any part thereof or the property
purported to be covered by the Site Lease, (D) as may be required by Applicable
Law if, after termination or expiration of the Lease, the Borrower or any other
Person should provide transmission services for the Owner Trust, (E) as may be
required in consequence of any exercise of remedies or other rights by any such
Person in connection with taking possession of an interest in the Facility or
the property purported to be covered by the Site Lease, or (F) required as
filings pursuant to the terms of a Governmental Approval (which filings the
Borrower agrees to make promptly when required) and other types of routine
operating plans and filings required under Applicable Law. Except as
specifically disclosed in Schedule 5.05 or Schedule 5.15, all of the Existing
Governmental Approvals have been validly issued, are in full force and effect
and are non-appealable (except that the "Order Clarifying Prior Order", Case
01-E-0357, issued April 4, 2001 by the New York State Public Service Commission,
is subject to an appeal period of four months from the date of such order), and
there is no proceeding pending or, to the Actual Knowledge of the Borrower,
threatened, which seeks to, or which may reasonably be expected to, rescind,
terminate, modify, condition, suspend or otherwise alter any such Governmental
Approval (except as are necessary for the transfer or reissuance of such
Governmental Approvals to the Borrower or any AEE Entity). Except as
specifically disclosed in Schedule 5.15, each of the Borrower and the AEE
Entities has obtained and is in compliance with all Governmental Approvals
required to be obtained by it as of the date hereof unless the failure to obtain
such approvals or such non-compliance therewith, individually or in the
aggregate, could not reasonably be expected to result in (a) a Material Adverse
Effect or (b) a Materially Adverse Effect on (i) AES NY, (ii) the Borrower and
the AEE Subsidiaries taken as a whole, (iii) any Loan Document or (iv) the
Collateral.
Section 5.06. Litigation. (a) Except as specifically disclosed in
Schedule 5.06 or Schedule 5.15, there is no pending or, to the Actual Knowledge
of the Borrower, threatened action, suit, investigation or proceeding at law
orin equity by or before any Governmental Entity, against or affecting the
Borrower or any property or other assets or rights of the Borrower or with
respect to any Operative Document, the Undivided Interest, the Ground Interest,
the Facility, the FacilitySite, or any of the other Assigned Assets that,
individually or in the aggregate, if determined adversely could reasonably be
expected to result in a Material Adverse Effect.
(b) Except as specifically disclosed in Schedule 5.06 or Schedule 5.15,
there are not, in any court or before any arbitrator of any kind or before or by
any governmental or nongovernmental body, any actions, suits, investigations or
proceedings pending or, to the Actual Knowledge of the Borrower or any AEE
Entity, threatened (nor to the Actual Knowledge of the Borrower or any AEE
Entity is there any substantial basis therefor) against or in any other way
relating to or affecting (a) the Borrower or any AEE Entity or any of their
respective businesses
35
or properties, (b) any Loan Document or(c) the Collateral, except actions,
suits, investigations or proceedings that, if adversely determined, would not,
singly or in the aggregate, have a Materially Adverse Effect on (i) AES NY, (ii)
the Borrower and the AEE Subsidiaries taken as a whole, (iii) any Loan Document
or (iv) the Collateral.
Section 5.07. No Defaults. Neither the Borrower nor any AEE Entity is in
default, and no condition exists that with notice or lapse of time or both would
constitute a default, under any of the Operative Documents. Neither the Borrower
nor any AEE Entity is in default under, and neither the Borrower nor any AEE
Entity, to its Actual Knowledge, is aware of a default by any other party to,
any Material Agreement in any such case where any such default, individually or
in the aggregate, could reasonably be expected to result in (a) a Material
Adverse Effect or (b) a Materially Adverse Effect on (i) AES NY, (ii) the
Borrower and the AEE Subsidiaries taken as a whole, (iii) any Loan Document or
(iv) the Collateral.
Section 5.08. Liens. (a) The Borrower has good record and marketable fee
title in the Facility Site and the Related Facility Site, in each case free and
clear of all Liens other than Permitted Liens.
(b) Good and marketable fee simple title to the Undivided Interest has been
duly, validly and effectively conveyed and transferred to the Owner Trust, free
and clear of all Liens other than Permitted Liens. A good and valid leasehold
interest in the Ground Interest has been duly, validly and effectively granted
to the Owner Trust upon the terms and conditions in the Site Lease, free and
clear of all Liens other than Permitted Liens. A good and valid easement estate
in the Easements has been duly, validly and effectively granted to the Owner
Trust upon the terms and conditions in theSite Lease, free and clear of all
Liens other than Permitted Liens.
(c) None of the Permitted Liens shall materially interfere with the use,
operation or possession of the Facility (as contemplated by the Operative
Documents) or the use of or exercise by the Owner Trust of its rights under the
Site Lease with respect to the Facility or the Facility Site.
Section 5.09. Regulatory Status/Utility Regulation. Each of the Borrower
and AEE2 is an "Exempt Wholesale Generator" as such term is defined in Section
32 of PUHCA. Neither the Borrower nor any of the AEE Entities is (a) regulated
as a "public utility company", or a "holding company", a "subsidiary company" or
an "affiliate", in each case, of either a "holding company" or a "public utility
company", as such terms are defined in PUHCA, or (b) except as described in
Schedule 5.09, subject to any electric utility regulation under New York law. To
the Actual Knowledge of the Borrower, none of the Owner Trust, the Owner
Participant, the Agent, the Banks, the Issuing Banks, any Certificateholder nor
any of their respective Affiliates is nor, solely by virtue of the execution,
delivery or performance of, or the consummation of the transactions contemplated
by, the Loan Documents or the Lease Financing (and in the case of the
OwnerParticipant and the Owner Trust, assuming that the representations and
warranties of the Owner Participant and the Owner Trust set forth in the
Participation Agreement are true and correct at all times), will be regulated as
a "public utility company," or a "holding company," a "subsidiary company" or an
"affiliate," in each case, of either a "holding company" or a "public utility
company," as such terms are defined in PUHCA nor subject to any electric utility
regulation under New York law; provided, however, that the exercise of rights or
enforcement of
36
remedies under the Operative Documents or the Loan Documents, as the case may
be, by any of the Owner Trust, the Owner Participant, the Agent, the Banks, the
Issuing Banks, any Certificateholder or any of their respective Affiliates, that
results in such party taking ownership of, or operating control over, the
Borrower, any AEE Entity, the Facilities or the Additional Facilities, may
result in such party being regulated as a "public utility company," or a
"holding company," a "subsidiary company" or an "affiliate," in each case, of
either a "holding company" or a "public utility company," as such terms are
defined in PUHCA, or may result in such party being subject to electric utility
regulation under New York law. Neither the Borrower nor any AEE Entity is
subject to electric rate regulation under New York law.
Section 5.10. Investment Company Act. Neither the Borrower nor any AEE
Entity is an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act.
Section 5.11. Compliance With Laws. Each of the Borrower and the AEE
Entities are in compliance with all Applicable Laws, including, without
limitation, all Environmental Laws, and none of such parties has received any
written notice from any Governmental Entity of non-compliance with the need to
perform any work, make repairs or make any capital improvements in order to
comply with, or the imposition or threat of the imposition of penalties under,
Applicable Law, except as specified on Schedule 5.06, Schedule 5.13 or Schedule
5.15 hereto and otherwise, in the case of any Applicable Law, where such
non-compliance is the subject of appropriate proceedings and could not
reasonably be expected to result in (i) a Material Adverse Effect or (ii) a
Materially Adverse Effect on (A) AES NY, (B) the Borrower and the AEE
Subsidiaries taken as a whole, (C) any Loan Document or (D) the Collateral.
Section 5.12. Taxes. Each of the Borrower and the AEE Entities has filed,
or caused to be filed, all tax and information returns that are required to have
been filed in any jurisdiction, and has paid all taxes shown to be due and
payable on such returns and all other taxes and assessments payable by such
Person, to the extent the same have become due and payable, other than taxes the
payment of which is being contested by appropriate proceedings, in accordance
with Section 5.7 of the Participation Agreement, and the Borrower has no Actual
Knowledge of any actual or proposed deficiency or additional assessmentin
connection therewith which, either individually or in the aggregate, could
reasonably be expected to result in (i) a Material Adverse Effect or (ii) a
Materially Adverse Effect on (A) AES NY, (B) the Borrower and the AEE
Subsidiaries taken as a whole, (C) any Loan Document or (D) the Collateral.
Section 5.13. ERISA. Except as specifically disclosed in Schedule 5.13:
(a) Neither a Reportable Event nor an "accumulated funding deficiency"
(within the meaning of Section 412 of the Code or Section 302 of ERISA) has
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all respects with the applicable provisions of ERISA and the
Code. No termination of a Single Employer Plan has occurred, and no Lien in
favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all projected benefit obligations under each Single Employer
Plan (based on those assumptions used to fund such Plans set forth in the most
recent actuarial valuation for such Plans) did not, as of the last annual
valuation date set forth in such actuarial valuation prior to the date on which
this
37
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such projected benefit obligations. Neither the Borrower nor
any ERISA Affiliate has had a complete or partial withdrawal from any
Multiemployer Plan, and neither the Borrower nor any ERISA Affiliate would
become subject to any liability under ERISA if the Borrower or any such ERISA
Affiliate were to withdraw completely from all Multiemployer Plans as of the
valuation date most closely preceding the date on which this representation is
made or deemed made. No such Multiemployer Plan is in Reorganization or
Insolvent. Each of the representations and warranties set forth in this Section
5.13(a) is made subject to the qualification that any inaccuracy thereof has not
resulted in and could not reasonably be expected to result in a Materially
Adverse Effect on (i) AES NY, (ii) the Borrower and the AEE Subsidiaries taken
as a whole, (iii) any Loan Document or (iv) the Collateral.
(b) The Borrower is not (i) a plan described in Section 3(3) of ERISA or
Section 4975 of the Code or (ii) a "foreign person" as defined in Section 1445
of the Code.
(c) Assuming the correctness of the representations contained in Sections
3.2, 3.3. 3.4 and 3.5 of the Participation Agreement and of the
Certificateholders in the Certificates, the Lease Financing did not constitute a
non-exempt "prohibited transaction" within the meaning of Section 406 of ERISA
or Section 4975(c)(1) of the Code (or in the case of a governmental plan or
church plan (each as defined in ERISA) any substantially similar federal, state
or local law).
Section 5.14. Adequate Rights. (a) To the Actual Knowledge of the
Borrower, in all material respects, (i) the rights and interests made available
to the Owner Trust pursuant to the Support Agreements and the other Operative
Documents, together with (ii) all materials, supplies and services, including,
but not limited to, all natural gas, electrical, telephone, water, sanitary
waste disposal, ash disposal, rail, coal supply, septic or water treatment
system or services and all other utility services necessary for the present use,
operation and maintenance of the Facility (currently available at the Facility,
which to the Actual Knowledge of the Borrower are connected under valid permits
and in working order, in all material respects) permit on a commercially
practicablebasis as of the date hereof (A) the occupation, maintenance and
repair of the Facility and the Facility Site, (B) the use, operation, leasing
and possession of the Facility and the Facility Site, (C) the use, operation,
leasing, possession, maintenance, replacement, renewal and repair of all
alterations, modifications, additions, accessions, improvements, appurtenances,
replacements and substitutions thereof and thereto, subject to the provisions of
the Operative Documents, (D) appropriate ingress to and egress from the Facility
for any reasonable purpose in connection with the operation, maintenance and use
of the Facility, including, without limitation, access to dedicated public roads
and all other material roads, easements, servitude, rights-of-way and other
rights of ingress and egress as are necessary for the present operation,
maintenance and use of the Facility, (E) the procurement of other rights and
services necessary or appropriate to utilize the Facility in a commercial
manner, (F) transmission services from the Facility sufficient to enable the
sale of the output of the Facility, and (G) the operation of the Facility as an
independent unit.
(b) To the Actual Knowledge of the Borrower, in all material respects (i)
the electrical, plumbing, heating, drainage, air conditioning, ventilation and
other mechanical and electrical systems on and in the Facility are in good
working order and repair and are adequate in
38
quantity and quality for present operation of the Facility by the Borrower under
the Lease; and (ii) the Facility is otherwise in safe condition and there are no
structural or other patent defects in the roofs, and other structural portions
of the Facility, including walls, pillars, supporting columns and foundations.
(c) To the Actual Knowledge of theBorrower, other than Permitted Liens, the
use of the Facility does not in any material respect depend on any variance,
special exception or other municipal approval, permit or consent that has not
been obtained for its present use, and all material building, construction and
use related permits, approvals and consents necessary for such use have been
issued and are in full force and effect; provided, that no representation is
made herein regarding zoning ordinances or regulations.
(d) To the Actual Knowledge of the Borrower, no default or breach exists
under any covenant, condition, restriction, right-of-way, easement or other
agreement affecting all or any portion of the Facility which is to be performed
or complied with by the owner or occupant of all or any portion of the Facility
the nonperformance of which could reasonably be expected to result in (i) a
Material Adverse Effect or (ii) a Materially Adverse Effect on (A) AES NY, (B)
the Borrower and the AEE Subsidiaries taken as a whole, (C) any Loan Document or
(D) the Collateral.
(e) To the Actual Knowledge of the Borrower, there are no subleases, rental
agreements or other agreements conferring on any Person other than the Borrower
the right to use or occupy all or any portion of the Facility or the Facility
Site except those, if any, reflected in the Title Policies.
(f) To the Actual Knowledge of the Borrower, there are no public
improvements pending or intended that would result in any charge or special
assessment against the Facility, except those, if any, reflected in the Title
Policies. To the Actual Knowledge of the Borrower, the Facility is not subject
to any material utility "tap-in" fees, except those, if any, reflected in the
Title Policies.
Section 5.15. Environmental Matters. (a) Except as specifically disclosed
in Schedule 5.15 or except as would not have (i) a Material Adverse Effect or
(ii) a Materially Adverse Effect on (A) AES NY, (B) the Borrower and the AEE
Subsidiaries taken as a whole, (C) any Loan Document or (D) the Collateral,
neither the Borrower, nor any AEE Entity, nor, to the Actual Knowledge of the
Borrower, NYSEG or NGE has received from any Governmental Entity any written
notice, letter, citation, order, warning, complaint, inquiry, claim or demand
that: (1) there has been a release, or there is a threat of release, of any
Hazardous Substance in, on, under or from the Facility or the Facility Site
except for releases authorized under or in compliance with Applicable Laws,
including Environmental Laws; (2) the Borrower, NYSEG or NGE have or has any
liability for the costs of cleaning up, remedying or responding to a release of
any Hazardous Substance pertaining to the Facility or the Facility Site; or (3)
either the Facility or the Facility Site is subject to a Lien in favor of any
Governmental Entity in response to a release of any Hazardous Substance.
(b) Except as specifically disclosed in Schedule 5.15 or except as would
not have (i) a Material Adverse Effect or (ii) a Materially Adverse Effect on
(A) AES NY, (B) the Borrower
39
and the AEE Subsidiaries taken as a whole, (C) any Loan Document or (D) the
Collateral, the Borrower and, to the Actual Knowledge of the Borrower, each of
NYSEG and NGE have taken, or are taking, all required or necessary response
actions, including any removal or remedial or other response action, in respect
of any release, emission, discharge or disposal, or threat of release,
discharge, disposal or emission of any Hazardous Substance, in, on, under or
from the Facility or the Facility Site, so as to be in compliance with all
Applicable Laws, including Environmental Laws.
(c) To the Actual Knowledge of the Borrower, except as specifically
disclosed in Schedule 5.15 or except as would not have (i) a Material Adverse
Effect or (ii) a Materially Adverse Effect on (A) AES NY, (B) the Borrower and
the AEE Subsidiaries taken as a whole, (C) any Loan Document or (D) the
Collateral:
(1) the Facility and the Facility Site and the ownership, use,
maintenance, modification and operation of the Facility and the Facility
Site are now in compliance with applicable Environmental Laws in all
material respects;
(2) the disposal of all Hazardous Substances generated, maintained,
produced, manufactured, processed, distributed, used, treated, managed,
stored, contained, recycled, transported or handled on, to, at or from the
Facility or the Facility Site has been performed in compliance with
applicable Environmental Laws;
(3) no Hazardous Substances are located in, on, at or under the
Facility or the Facility Site, except to the extent incidental to the
current use of the Facility or the Facility Site, and the Borrower and, to
the Actual Knowledge of the Borrower, each of NYSEG and NGE has not and is
not currently maintaining, producing, manufacturing, processing,
distributing, handling, treating, managing, containing, recycling,
transporting, releasing, emitting, discharging, depositing, generating,
storing, disposing of or creating any Hazardous Substances in its
ownership, alteration, modification, construction, use, operation or
maintenance of the Facility or the Facility Site other than in compliance
with applicable Environmental Laws;
(4) there are no Environmental Conditions with respect to the Facility
or the Facility Site;
(5) no Hazardous Substances have been released at, to, under, about or
from the Facility or the Facility Site other than in compliance with all
Environmental Laws;
(6) there are no underground storage tanks, treatment tanks, sumps,
water, gas or oil wells, or associated piping located at on or under any of
the Facility or the Facility Site, in each case that are leaking;
(7) (x) there is no friable asbestos or urea formaldehyde insulation
contained in, forming any part of, or contaminating any part of the
Facility or the Facility Site, and (y) no polychlorinated biphenyls (PCBs)
are used, stored, located at or contaminate any part of the Facility or the
Facility Site; and
40
(8) no Lien has attached to the Facility by reason of any
Environmental Condition.
(d) To the Actual Knowledge of the Borrower, there are no Environmental
Conditions with respect to the Facility or the Facility Site that would
reasonably be likely to result in the temporary or permanent shutdown of, or
cessation of operations at, the Facility.
Section 5.16. Subsidiaries. The Borrower is the record and beneficial
owner of 100% of the limited liability company membership interests and other
Capital Securities (if any) of AEE2, AES Cayuga and AES Somerset. AEE2 is the
record and beneficial owner of 100% of the limited liability company membership
interests and other Capital Securities (if any) of AES Westover, L.L.C. and AES
Greenidge, L.L.C. As of the Agreement Date, the Borrower has no Subsidiaries
other than AEE2, AES Cayuga, AES Somerset, AES Westover, L.L.C. and AES
Greenidge, L.L.C.
Section 5.17. Property. Each of the Borrower and the AEE Entities has
good and marketable title to and possession of, or a good and valid leasehold
interest in, the Assigned Assets (and the Borrower has good and marketable fee
simple title to the Facility Site and AEE2 has good and marketable fee simple
title to the Additional Facilities) free and clear of all Liens (except
Permitted Liens), including all intellectual property or rights to use
intellectual property and other rights required for the conduct of its
respective business, but only to the extent such intellectual property and other
rights are required and the failure to obtain such property could reasonably be
expected to result in (i) a Material Adverse Effect or (ii) a Materially Adverse
Effect on (A) AES NY, (B) the Borrower and the AEE Subsidiaries taken as a
whole, (C) any Loan Document or (D) the Collateral. The Borrower is not a party
to any contract or agreement to sell any interest in the Facility other than
pursuant to the Operative Documents and the operative documents executed in
connectionwith the lease financings contemplated by the Other Leases. AEE2 is
not a party to any contract or agreement to sell any interest in the Additional
Facilities.
Section 5.18. No Event of Loss. No Event of Loss has occurred, and, to
the Actual Knowledge of the Borrower, no event giving rise to an Event of Loss
is threatened, in each case with the respect to the Facility.
Section 5.19. AEE2 Liens. (a) AEE2 has good record and marketable fee
title in each of the Additional Facilities, in each case free and clear of all
Liens other than Permitted Liens.
(b) None of the Permitted Liens will materially interfere with the use,
operation or possession of the Additional Facilities.
Section 5.20. AEE2 Adequate Rights. (a) AEE2 is able to obtain all
materials, supplies and services, including,but not limited to, all natural gas,
electrical, telephone, water, sanitary waste disposal, ash disposal, rail, coal
supply, septic or water treatment system or services and all other utility
services necessary for the present use, operation and maintenance of the
Additional Facilities (and, to the Actual Knowledge of the Borrower and the AEE
Entities, all such services are currently available and are connected under
valid permits and in working order, in all material respects) so as to permit on
a commercially practicable basis (i) the occupation,
41
maintenance and repair of the Additional Facilities, (ii) the use, operation,
leasing and possession of the Additional Facilities, (iii) the use, operation,
leasing, possession, maintenance, replacement, renewal and repair of all
alterations, modifications, additions, accessions, improvements, appurtenances,
replacements and substitutions thereof and thereto, (iv) appropriate ingress to
and egress from the Additional Facilities for any reasonable purpose in
connection with the exercise of rights under AEE2's interest in the Additional
Facilities, including, without limitation, access to dedicated public roads and
to the Actual Knowledge of the Borrower and the AEE2 Entities, all other
material roads, easements, servitude, rights-of-way and other rights of ingress
and egress as are necessary for the present operation, maintenance and use of
the Additional Facilities, (v) the procurement of other rights and services
necessary or appropriate to utilize the Additional Facilities in a commercial
manner, (vi) transmission services from the Additional Facilities sufficient to
enable AEE2 to sell the output of the Additional Facilities, and (vii) the
operation of the Additional Facilities as independent units.
(b) To the Actual Knowledge of the Borrower and the AEE2 Entities, in all
material respects (i) the electrical, plumbing, heating, drainage, air
conditioning, ventilation and other mechanical and electrical systems on and in
the Additional Facilities are in good working order and repair and are adequate
in quantity and quality for present operation of the Additional Facilities by
the AEE2 Entities; and (ii) the Additional Facilities are otherwise in safe
condition and there are no structural or other patent defects in the roofs, and
other structural portions of the Additional Facilities, including walls,
pillars, supporting columns and foundations.
(c) To the Actual Knowledge of the Borrower and the AEE2 Entities, other
than Permitted Liens, the use of the Additional Facilities does not in any
material respect depend on any variance, special exception or other municipal
approval, permit or consent that has not been obtained for its present use, and
all material building, construction and use related permits, approvals and
consents necessary for such use have been issued and are in full force and
effect; provided, that no representation is made herein regarding zoning
ordinances or regulations.
(d) To the Actual Knowledge of the Borrower and the AEE2 Entities, no
default or breach exists under any covenant, condition, restriction,
right-of-way, easement or other agreement affecting all or any portion of the
Additional Facilities which is to be performed or complied with by the owner or
occupant of all or any portion of the Additional Facilities the nonperformance
of which could reasonably be expected to result in (i) a Material Adverse Effect
or (ii) a Materially Adverse Effect on (A) AES NY, (B) the Borrower and the AEE
Subsidiaries taken as a whole, (C) any Loan Document or (D) the Collateral.
(e) To the Actual Knowledge of the Borrower and the AEE2 Entities, there
are no subleases, rental agreements or other agreements conferring on any Person
other than the AEE2 Entities the right to use or occupy all or any portion of
the Additional Facilities.
(f) To the Actual Knowledge of the Borrower and the AEE2 Entities, there
are no public improvements pending or intended that would result in any charge
or special assessment against the Additional Facilities, except those, if any,
reflected in the title policies relating to the Additional Facilities.
42
Section 5.21. Additional Facilities Environmental Matters. (a) Except as
specifically disclosed in Schedule 5.15 or except as would not have (i) a
Material Adverse Effect or (ii) a Materially Adverse Effect on (A) AES NY, (B)
the Borrower and the AEE Subsidiaries taken as a whole, (C) any Loan Document or
(D) the Collateral, no AEE2 Entity has received from any Governmental Entity any
written notice, letter, citation, order, warning, complaint, inquiry, claim
ordemand that: (1) there has been a release, or there is a threat of release, of
any Hazardous Substance in, on, under or from the Additional Facilities except
for releases authorized under or in compliance with Applicable Laws, including
Environmental Laws,or any release or releases for which, in the aggregate, no
AEE2 Entity has any liability for the costs of cleaning up, remedying or
responding to a release of any Hazardous Substance pertaining to the Additional
Facilities; (2) any AEE2 Entity has any liability for the costs of cleaning up,
remedying or responding to a release of any Hazardous Substance pertaining to
the Additional Facilities; or (3) any Additional Facility is subject to a Lien
in favor of any Governmental Entity in response to a release of any Hazardous
Substance.
(b) Except for the conditions specifically disclosed in Schedule 5.15 or
except as would not have (i) a Material Adverse Effect or (ii) a Materially
Adverse Effect on (A) AES NY, (B) the Borrower and the AEE Subsidiaries taken as
a whole, (C) any Loan Document or (D) the Collateral, each AEE2 Entity has
taken, or is taking, all required or necessary response actions, including any
removal or remedial or other response action, in respect of any release,
emission, discharge or disposal, or threat of release, discharge, disposal or
emission of any Hazardous Substance, in, on, under or from the Additional
Facilities, so as to be in compliance with all Applicable Laws, including
Environmental Laws.
(c) To the Actual Knowledge of the Borrower and each AEE2 Entity, except as
specifically disclosed in Schedule 5.15 or except as would not have (i) a
Material Adverse Effect or (ii) a Materially Adverse Effect on (A) AES NY, (B)
the Borrower and the AEE Subsidiaries taken as a whole, (C) any Loan Document or
(D) the Collateral:
(1) the Additional Facilities and the ownership, use, maintenance,
modification and operation of the Additional Facilities are now in
compliance with applicable Environmental Laws;
(2) the disposal of all Hazardous Substances generated, maintained,
produced, manufactured, processed, distributed, used, treated, managed,
stored, contained, recycled, transported or handled on, to, at or from the
Additional Facilities has been performed in compliance with applicable
Environmental Laws;
(3) no Hazardous Substances are located in, on, at or under the
Additional Facilities, except to the extent incidental to the current use
of the Additional Facilities, and each AEE2 Entity has not and is not
currently maintaining, producing, manufacturing, processing, distributing,
handling, treating, managing, containing, recycling, transporting,
releasing, emitting, discharging, depositing, generating, storing,
disposing of or creating any Hazardous Substances in its ownership,
alteration, modification, construction, use, operation or maintenance of
the Additional Facilities other than in compliance with applicable
Environmental Laws;
43
(4) there are no Environmental Conditions with respect to the
Additional Facilities;
(5) no Hazardous Substances have been released at, to, under, about or
from the Additional Facilities other than in compliance with all
Environmental Laws;
(6) there are no underground storage tanks, treatment tanks, sumps,
water, gas or oil wells, or associated piping located at on or under any of
the Additional Facilities, in each case that are leaking, other than any
such for which, in the aggregate, no AEE2 Entity has any liability for the
costs of cleaning up, remedying or responding to a release of any Hazardous
Substance pertaining to the Additional Facilities;
(7) (A) there is no friable asbestos or urea formaldehyde insulation
contained in, forming any part of, or contaminating any part of the
Additional Facilities, and (B) no polychlorinated biphenyls (PCBs) are
used, stored, located at or contaminate any part of the Additional
Facilities other than any of the foregoing for which, in the aggregate, no
AEE2 Entity has any liability for the costs of cleaning up, remedying or
responding to a release of any Hazardous Substance pertaining to the
Additional Facilities; and
(8) no Lien has attached to the Additional Facilities by reason of any
Environmental Condition.
(d) To the Actual Knowledge of the Borrower, there are no Environmental
Conditions with respect to any Additional Facility that would reasonably be
likely to result in the temporary or permanent shutdown of, or cessation of
operations at, such Additional Facility.
Section 5.22. Burdensome Provisions. Neither the Borrower nor any
Subsidiary is a party to or bound by any Contract or Applicable Law, compliance
with which could reasonably be expected to have a Materially Adverse Effect on
(a) any Loan Document or (b) the Collateral.
Section 5.23. No Adverse Change or Event. Except as specifically set
forth in Schedule 5.06, Schedule 5.13 or Schedule 5.15, since December 31, 1999,
no change in the business, assets, Liabilities, financial condition, results of
operations or business prospects of the Borrower or any AEE Entity has occurred,
and no event has occurred or failed to occur, that has had or could reasonably
be expected to have, either alone or in conjunction with all such other changes,
events and failures, a Materially Adverse Effect on (a) AES NY, (b) the Borrower
and the AEE Subsidiaries taken as a whole, (c) any Loan Document or (d) the
Collateral.
Section 5.24. Additional Adverse Facts. Except for facts and
circumstances disclosed on Schedule 5.06, Schedule 5.13, Schedule 5.15 or
Schedule 5.24, neither the Borrower nor any AEE Entity has Actual Knowledge of
any fact or circumstance, as of the Agreement Date, that, either alone or in
conjunction with all other such facts and circumstances, has had or could
reasonably be expected to have (to the Actual Knowledge of the Borrower or any
AEE Entity) a Materially Adverse Effect on (a) AES NY, (b) the Borrower and the
AEESubsidiaries taken as whole, (c) any Loan Document or (d) the Collateral. If
a fact or circumstance disclosed on such Schedules should in the future have a
Materially Adverse Effect on (i) AES NY, (ii) the Borrower and the AEE
Subsidiaries taken as a whole, (iii) any Loan Document or (iv) the
44
Collateral, such Materially Adverse Effect shall be a change or event subject to
Section 5.23 notwithstanding such disclosure.
Section 5.25. Margin Stock. Following application of the proceeds of each
Extension of Credit, not more than 25 percent of the value of the assets of the
Borrower will be margin stock (within the meaning of Regulation U). The Borrower
is not engaged in the business of extending credit for the purpose of buying or
carrying margin stock (within the meaning of Regulation U), and no proceeds of
any Loan or any drawing under any Letter of Credit will be used to buy or carry
any margin stock or to extend credit to others for the purpose of buying or
carrying any margin stock.
Section 5.26. Title to Properties. The Borrower has good and marketable
title to all of its 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), other than Permitted Liens. The Borrower has complied
in all respects with all obligations under all leases to which it is a party and
all such leases are in full force and effect, except, respectively, where a
failure to comply or to be in full force and effect could not reasonably be
expected to have a Materially Adverse Effect on (a) AES NY, (b) the Borrower and
the AEE Subsidiaries taken as a whole, (c) any Loan Document or (d) the
Collateral. The Borrower enjoys peaceful and undisturbed possession under all
material leases to which it is a party.
Section 5.27. Insurance. All insurance required by Section 6.03 is in
full force and effect and all premiums with respect thereto have been paid (to
the extent due and payable).
Section 5.28. Lien in Collateral. The Pledge Agreement creates a valid
and perfected first priority Lien in the Collateral, subject only to Permitted
Liens described in Section 6.05(a), and all filings and other actions necessary
to perfect and protect such Lien have been taken.
Section 5.29. Projections. All financial projections of the Borrower and
its Subsidiaries previously furnished by or on behalf of the Borrower to the
Agent and the Banks are based upon assumptions that the Borrower believed were
reasonable at the time such projections were delivered and continues to believe
are reasonable, and such projections represent the Borrower's best estimate of
future performance by the Borrower and its Subsidiaries.
ARTICLE 6
CERTAIN COVENANTS
From the Agreement Date and until the Repayment Date,
Section 6.01. Financial Covenants. (a) Tangible Net Worth. The Borrower
shall maintain at all times a Tangible Net Worth of at least $395,000,000.
(b) Coverage Ratio. The Borrower shall maintain, as of the last day of each
fiscal quarter (commencing with the fiscal quarter ending March 31, 2001), for
the immediately
45
preceding four-consecutive-fiscal quarter period ending on such day, a Coverage
Ratio of at least 1.20 to 1.00.
Section 6.02. Preservation of Existence and Properties, Scope of
Business, Compliance with Law, Payment of Taxes and Claims Preservation of
Enforceability. The Borrower shall and shall cause each AEE Entity to (a)
preserve and maintain its legal existence and all of its other franchises,
licenses, rights and privileges, (b) preserve, protect and obtain all
Intellectual Property, and preserve and maintain in good repair, working order
and condition all other properties,required for the conduct of its business,
including the observation of the life extension programs of the Additional
Facilities, (c) engage only in businesses in substantially the same fields as
the businesses conducted on the Agreement Date, (d) comply with Applicable Law
and with all of its obligations under the Operative Documents, (e) pay or
discharge when due all Taxes and all Liabilities that are or could reasonably be
expected to become Liens on any of its properties and (f) take all action and
obtain all consents and Governmental Approvals and make all Governmental
Registrations required so that its obligations under the Loan Documents will at
all time be legal, valid and binding and enforceable in accordance with their
respective terms, except that this Section 6.02 (other than clauses (a), insofar
as it requires the Borrower to preserve its legal existence, (c) and (f)) shall
not apply in any circumstance where noncompliance, together with all other
noncompliances with this Section 6.02, will not have a Materially Adverse Effect
on (x) any Loan Document or (y) the Collateral.
Section 6.03. Insurance. The Borrower shall and shall cause each AEE
Entity to maintain insurance with responsible insurance companies against at
least such risks and in at least such amounts as is customarily maintained by
similar businesses, or as may be required by Applicable Law or reasonably
requested by the Required Banks. Insurance against such risks and in at least
such amounts as is required from time to time under the Leases shall be deemed
to be what is "customarily maintained by similar businesses" for purposes of
this Section 6.03 in regards to the Additional Facilities.
Section 6.04. Use of Proceeds. The Borrower shall and shall cause each
AEE2 Entity to use the proceeds of the Loans only to pay Operating and
Maintenance Costs. None of the proceeds of any of the Loans or of any drawing
under a Letter of Credit shall be used to purchase or carry, or to reduce or
retire or refinance any credit incurred to purchase or carry, any margin stock
(within the meaning of Regulations U and X of the Board of Governors of the
Federal Reserve System) or to extend credit to others for the purpose of
purchasing or carrying any margin stock. If requested by any Bank, the Borrower
shall complete and sign Part I of a copy of Federal Reserve Form U-1 referred to
in Regulation U and deliver such copy to such Bank.
Section 6.05. Liens. (a) The Borrower shall not, and shall not permit any
AEE Subsidiary to, directly or indirectly permit to exist, at any time, any Lien
upon any of the AEE Subsidiaries' properties or assets of any character
(including the Additional Facilities) or upon any Collateral, in each case
whether now owned or hereafter acquired, or upon any income or profits
therefrom, except that this Section 6.05(a) shall not apply to (i) Permitted
Liens, (ii) any revenues of any AEE Subsidiary required to be deposited into the
Revenue Account pursuant to Section 3.1(a) of the Depositary Agreement, or (iii)
equitable Liens (if any) in existence on the date hereof, in favor of the Owner
Trust, on the assets of AEE2 deemed to be created under the
46
Operative Documents (as in effect on the date hereof) pursuant to Applicable Law
by virtue of AEE2's obligations under the Depositary Agreement and other
covenants applicable to AEE2 contained in the Operative Documents (as in effect
on the date hereof); provided, however, that for purposes of this Section
6.05(a), clause (e) of the definition "Permitted Liens" contained in Appendix A
shall read as follows "(e) Liens created by any Loan Document" and clause (f) of
the definition "Permitted Liens" contained in Appendix A shall be omitted.
(b) The Borrower shall not directly or indirectly permit to exist, at any
time, any Lien upon any of the Borrower's properties or assets of any character
(other than the Collateral), whether now owned or hereafter acquired, or upon
any income or profits therefrom, except that this Section 6.05(b) shall not
apply to Permitted Liens; provided, however, that for purposes of this Section
6.05(b), clause (e) of the definition "Permitted Liens" contained in Appendix A
shall read as follows "(e) Liens created by any Operative Document or any Other
Operative Document, in each case as in effect on the Agreement Date" and clause
(f) of the definition "Permitted Liens" contained in Appendix A shall be
omitted.
Section 6.06. Merger or Consolidation. The Borrower shall not, and shall
not permit AES NY or any AEE Subsidiary to, (a) liquidate, wind up or dissolve
or (b) consolidate or merge with or into any other Person, unless, in the case
of this clause (b), the Borrower shall have provided at least ten (10) Business
Days' prior written notice to the Agent, the Banks and the Issuing Banks and,
immediately after giving effect to such transaction, (i) no Default shall have
occurred and be continuing, (ii) the entity resulting from such consolidation or
surviving in such merger shall be (A) in the case of the Borrower, the Borrower,
(B) in the case of AES NY, AES NY, and (C) in the case of any AEE Subsidiary,
the Borrower or anysuch AEE Subsidiary, and (iii) the Borrower shall have
delivered to the Agent a certificate of a Responsible Officer of the Borrower
certifying that the provisions of this Section 6.06(b) have been complied with
together with such other documentation as the Agent may reasonably require to
determine compliance with this Section 6.06.
Section 6.07. Disposition of Assets. The Borrower shall not, and shall
not permit AEE2 or any other AEE Subsidiary to, sell, lease, license, transfer
or otherwise dispose of any asset or any interest therein, or to purchase, lease
or acquire property or other assets, to from any Person or Persons in one or a
series of transactions, except that the foregoing shall not apply to any of the
following: (a) any such transaction in the ordinary course of business of the
Borrower or any AEE Subsidiary, (b) any transfer or other disposition of
emission allowances or the Additional Land to a third party purchaser, (c) any
Permitted Affiliate Transaction that is permitted under Section 6.10, and (d)
solely with the prior written consent of the Agent, the Issuing Banks and the
Banks, the transfer or other disposition of the Related Facility (at any time
when it is owned by the Borrower or any Affiliate thereof, unless acquired by
the Borrower or such Affiliate as a result of an "Event of Loss" as defined in
the Related Lease) or either of the Additional Facilities.
Section 6.08. Incurrence of Indebtedness. The Borrower shall not, and
shall not permit any AEE Subsidiary to, create, incur, assume or suffer to exist
any Indebtedness, other than (a) Indebtedness of any AEE2 Entity referred to in
clause (a) of the definition of "Permitted Indebtedness" contained in Appendix
A, (b) Indebtedness of the Borrower referred to in clauses
47
(a) and (f) of the definition of"Permitted Indebtedness" contained in Appendix
A, or (c) unsecured Permitted Subordinated Indebtedness.
Section 6.09. Limitations on Investments. The Borrower shall not permit
any AEE2 Entity to make or authorize any loans, advances, purchases of
securities or other investmentsother than Permitted Investments as set forth in
Section 3.13 of the Depositary Agreement.
Section 6.10. Transactions with Affiliates. The Borrower shall not, and
shall not permit any AEE Subsidiary to, enter into any transactions with an
Affiliate, other than Permitted Affiliate Transactions, without the prior
written consent of the Agent and the Required Banks; provided, however, that (i)
any Permitted Affiliate Transaction described in clause (a)(iii) of the
definition thereof contained in Appendix A shall require the prior written
consent of the Agent and the Banks (in the case of the sale of any part of the
Assigned Assets constituting all or any part of the Additional Facilities) or
the prior written consent of the Agent and the Required Banks (in the case of
anysale of any part of the Assigned Assets that does not constitute any part of
the Additional Facilities) and (ii) any Permitted Affiliate Transaction
described in clause (b)(II)(2)(y) of the definition thereof contained in
Appendix A shall require the prior written consent of the Agent and the Required
Banks.
Section 6.11. Subsidiaries. The Borrower shall not permit any AEE2 Entity
to create, acquire or permit to exist any Subsidiary of any AEE2 Entity, other
than AES Westover, L.L.C. and AES Greenidge, L.L.C.
Section 6.12. Additional Facilities. The Borrower shall cause each
Additional Facility to be maintained and operated to the same maintenance and
operating standards as the Borrower is required to maintain and operate the
Kintigh Station and Millikin Station under each Lease as in effect as of the
date hereof.
Section 6.13. Payment of Operating and Maintenance Costs. (a) Subject to
the terms of the Depositary Agreement, the Borrower shall not apply or cause the
transfer of monies in the Revenue Account to any Account with a lower order of
priority than the Working Capital Account (i) so long as any Loan is outstanding
hereunder, or (ii) during any Rent Payment Period, in each case under this
clause (ii) until either (A) the aggregate amount transferred to the Operating
Account with respect to such Rent Payment Period (including sums properly
withdrawn therefrom during such Rent Payment Period to pay Operating and
Maintenance Costs) is equal to the sum of 125% of the amount set forth in the
Annual Operating Budget for such Rent Payment Period plus fuel costs payable for
such Rent Payment Period or (B) all Operating and Maintenance Costs for such
Rent Payment Period have been paid.
(b) The Borrower shall not, and shall not permit any Subsidiary to,
commingle monies transferred to it from the Operating Account with any other
monies. The Borrower shall, and shall cause each Subsidiary to, hold all monies
transferred to it from the Operating Account in a separate deposit account in
which only monies transferred from the Operating Account shall be deposited. The
Borrower shall not and shall not permit any Person to use monies transferred to
it from the Operating Account for any purpose other than to pay Operating and
Maintenance Costs.
48
Section 6.14. Annual Operating Budget. The Borrower shall cause each of
the Facility, the Related Facility and the Additional Facilities to be operated
and maintained in accordance with the Annual Operating Budget and shall not
permit the aggregate expenditures in any year for Operating and Maintenance
Costs to exceed 125% of the amount set forth in the Annual Operating Budget.
Copies of the Annual Operating Budget for each calendar year shall be furnished
by the Borrower to the Independent Engineer at least 30 days before final
adoption thereof. Any amendment, modification or reallocation of the Annual
Operating Budget by the Borrower that would cause a change of more than 25%
(positive or negative) in the amounts set forth in the Annual Operating Budget
shall be accompanied by confirmation of the Independent Engineer that
suchamendment, modification or reallocation is based on reasonable assumptions.
For purposes of this Section 6.14, fuel costs shall not be included in the
calculation of the percentage change (positive or negative) in the amounts
specified in the Annual Operating Budget.
Section 6.15. AEE Revenues. The Borrower shall, and shall cause each AEE
Subsidiary to, cause all AEE Revenues to be deposited directly into the Revenue
Account (except, to the extent provided in the Depositary Agreement, for any
revenues received by any AEE Entity under any Operation and Maintenance
Agreement).
Section 6.16. No Abandonment. Subject to the prior written consent of the
Agent, the Borrower shall not, and shall not permit any AEE Entity to, abandon
or agree to abandon the operation or maintenance of the Facility or the Related
Facility or otherwise cease to diligently pursue the operation and maintenance
of the Facility and the Related Facility in accordance with Prudent Industry
Practice or voluntarily reduce the operations of the Facility or the Related
Facility in any material respect (except to the extent required by customary
maintenance procedures). Subject to the prior written consent of the Agent, the
Borrower shall not, and shall not permit any AEE Entity to, abandon or agree to
abandon the operation or maintenance of either of the Additional Facilities or
otherwise cease to diligently pursue the operation and maintenance of such
Additional Facilities in accordance with Prudent Industry Practice (except to
the extent required by customary maintenance procedures), during the expected
useful life of such Additional Facility.
Section 6.17. Assignment. The Borrower may not Transfer any Lease or any
other Operative Document or any interests therein without the prior written
consent of the Agent and the Required Banks (which consent shall not be
unreasonably withheld).
Section 6.18. Compliance with ERISA. The Borrower shall not (a) permit to
exist any "accumulated funding deficiency" (as defined in Section 412(a) of the
Code) (unless such deficiency exists with respect to a Multiple Employer Plan or
Multiemployer Plan and the Borrower has no control over the reduction or
elimination of such deficiency), (b) terminate, or permit any of its ERISA
Affiliates to terminate, any Plan of the Borrower or such ERISA Affiliate so as
to resultin any liability of the Borrower to the PBGC that, in the reasonable
opinion of the Required Banks, could reasonably be expected to result in a
Materially Adverse Effect on (i) AES NY, (ii) the Borrower and the AEE
Subsidiaries taken as a whole, (iii) any Loan Document, or (iv) the Collateral,
or (c) permit to exist any occurrence of any Reportable Event (as defined in
Title IV of ERISA), or any other event or condition, that could reasonably
49
be expected to (i) present a material risk of such a terminationby the PBGC of
any Plan of the Borrower or such ERISA Affiliate and (ii) result in any
liability to the Borrower that, in the reasonable opinion of the Required Banks,
could reasonably be expected to result in a Materially Adverse Effect on (A) AES
NY, (B) the Borrower and the AEE Subsidiaries taken as a whole, (C) any Loan
Document, or (D) the Collateral.
ARTICLE 7
INFORMATION
Section 7.01. Information to Be Furnished. From the Agreement Date and
until the Repayment Date, the Borrower shall furnish to the Agent (with
sufficient copies for each Bank):
(a) Quarterly Financial Statements. As soon as reasonably practicable after
the end of each fiscal quarter but in no event later than 60 days after the end
of such quarter (i) an unaudited consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of income for such quarter and for the portion of the
Borrower's fiscal year ended at the end of such quarter, and the related
consolidated statements of cash flows for such quarter and for the portion of
the fiscal year ended at the end of such quarter, in each case setting forth
comparative figures for previous dates and periods, to the extent available, and
prepared in accordance with GAAP (subject to normal year-end adjustments), and
(ii) an Officer's Certificate, in the form of Schedule 7.01(a), of the Borrower
stating that (A) the signer has made, or caused to be made under its
supervision, a review of this Agreement, the other Loan Documents and the
Operative Documents; and (B) such review has not disclosed the existence during
such fiscal quarter (and the signer does not have knowledge of the existence as
of the date of such certificate) of any condition or event constituting a Lease
Material Default or Lease Event of Default or an Event of Loss or a Default or,
if any such condition or event existed or exists, specifying the nature thereof,
the period of existence thereof and what action the Borrower has taken or
proposes to take with respect thereto. Such Officer's Certificate shall also
contain reasonably detailed calculations demonstrating compliance, as of the end
of such fiscal quarter, with the financial covenants contained in Section 6.01.
(b) Year-End Financial Statements; Accountants' Certificate. As soon as
reasonably practicable after the end of each fiscal year but in no event later
than 120 days after the end of such year, (i) a consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of the end of such fiscal year
and the related consolidated statements of income, retained earnings and cash
flows for such fiscal year (together with footnotes thereto and management
discussion and analysis), setting forth in each case in comparative form the
figures for the previous fiscal year, to the extent available, all prepared in
accordance with GAAP and reported on and audited by an independent public
accountant of nationally recognized standing, together with any other
information required to be filed with the Securities and Exchange Commission in
respect of the Pass Through Certificates under applicable securities laws, (ii)
an Officer's Certificate of the Borrower, in the form of Schedule 7.01(a),
stating, among other things, that (A) the signer has made, or caused to be made
under its supervision, a review of this Agreement, the other Loan Documents and
the Operative Documents; and (B) such review has not disclosed the
50
existence during such fiscal year (and the signer does not have knowledge of the
existence as of the date of such certificate) of any condition or event
constituting a Lease Material Default or Lease Event of Default or an Event of
Loss or a Default or, if any such condition or event existed or exists,
specifying the nature thereof, the period of existence thereof and what action
the Borrower has taken or proposes to take with respect thereto and (iii) a copy
of FERC Form No. 1 to theextent filed with FERC pursuant to 18 C.F.R. Section
141.1. Such Officer's Certificate shall also contain reasonably detailed
calculations demonstrating compliance, as of the end of such fiscal year, with
the financial covenants contained in Section 6.01.
(c) Operating Budgets. At least 30 days prior to the commencement of any
fiscal year, the Annual Operating Budget for such fiscal year demonstrating that
the Borrower will meet the Required Coverage Ratios, together with confirmation
by the Independent Engineer that such budget is based on reasonable assumptions
and is prepared in accordance with the Operative Documents. Such budget shall be
furnished to the Agent and each Bank pursuant to Section 11.21. Such
Annual Operating Budget shall include Pro Forma projections and projections
indicating updated projected Coverage Ratios (taking the Independent Forecast
into account) and shall indicate projected changes, if any, in the Rent Reserve
Account and the Additional Liquidity Account.
(d) Monthly Operations Report. As soon as practicable following the end of
each month, a Monthly Operations Report for each of the Facility, the Related
Facility and the Additional Facilities. The Borrower agrees to amend the Monthly
Operations Report to include such additional operation and maintenance
information as the Agent may reasonably request. The Borrower and the Agent will
work together and establish a mutually acceptable format for such report. The
Monthly Operations Reports shall be deemed confidential for purposes of Section
11.21 of this Agreement.
(e) Notices under each of the Participation Agreements. At the time such
Information is delivered to any Owner Participant, Owner Trust, Indenture
Trustee or Pass Through Trustee, the Information provided to such Owner
Participant, Owner Trust, Indenture Trustee or Pass Through Trustee pursuant to
Article 5 or 6 of any Participation Agreement to the extent not otherwise
delivered hereunder, provided that each opinion or certificate so delivered
shall also be addressed to the Agent.
(f) Reports, Filings and Notices. (i) Promptly upon receipt thereof, copies
of all reports, if any, submitted to the Borrower or any Subsidiary, or the
Board of Directors of the Borrower or any Subsidiary, by its independent
certified public accountants, including any management letter; (ii) as soon as
practicable, copies of all such financial statements and reports as the Borrower
or any Subsidiary shall send to its stockholders (or other equity owners) and of
all registration statements and all regular or periodic reports that the
Borrower or any Subsidiary shall file, or may be required to file, with the
Securities and Exchange Commission or any successor commission; and (iii)
promptly upon receipt thereof, copies of all notices or other communications
received by the Borrower or any AEE Entity from the Depositary Agent or any
Owner Participant, Owner Trust, Indenture Trustee or Pass Through Trustee
pursuant to or in connection with any Operative Document.
51
(g) Requested Information. From time to time and promptly upon request of
the Agent or any Bank, such Information regarding the Loan Documents or the
Operative Documents to which the Borrower or any Subsidiary is a party, the
Loans, the Letters of Credit or the business, assets, Liabilities, financial
condition, results of operations or business prospects of the Borrower and the
Subsidiaries as the Agent or such Bank may reasonably request, in each case in
form and substance and certified in a manner satisfactory to the Agent or such
requesting Bank (as the case may be).
(h) Notice of Defaults, Material Adverse Changes and Other Matters. Prompt
notice of:
(i) any Default,
(ii) the threatening or commencement of, or the occurrence or
nonoccurrence of any change or event relating to, any action, suit or
proceeding that would cause the Representation and Warranty contained in
Section 5.06 to be incorrect if made at such time,
(iii) the occurrence or nonoccurrence of any change or event that
would cause the Representation and Warranty contained in Section 5.23 to be
incorrect if made at such time, and
(iv) any change in the rating given by any nationally recognized
rating agency to any securities issued by the Borrower or any of its
Subsidiaries.
Section 7.02. Accuracy of Financial Statements and Information. (a)
Historical Financial Statements. The Borrower hereby represents and warrants
that (i) Schedule 7.02(a) sets forth a complete and correct list of the
financial statements submitted by the Borrower to the Banks in order to induce
them to execute and deliver this Agreement, (ii) such financial statements
present fairly in all material respects, in accordance with GAAP, the
consolidated financial position of the Borrower and the Consolidated
Subsidiaries as at their respective dates and the consolidated results of
operations, retained earnings and, as applicable, changes in financial position
or cash flows of the Borrower and such Subsidiaries for the respective periods
to which such statements relate, and (iii) except as disclosed or reflected in
such financial statements or otherwise disclosed in Schedule 5.06, Schedule
5.13, Schedule 5.15 or Schedule 5.24, neither the Borrower nor any Subsidiary
has or had any Liability, contingent or otherwise, or any unrealized or
anticipated loss, that, singly or in the aggregate, has had or could reasonably
be expected to have a Materially Adverse Effect on the Borrower and the
Consolidated Subsidiaries taken as a whole.
(b) Future Financial Statements. The financial statements delivered
pursuant to Section 7.01(a) or (b) shall present fairly in all material
respects, in accordance with GAAP (except for changestherein or departures
therefrom that are described in the certificate or report accompanying such
statements and that have been approved in writing by the Borrower's then current
independent certified public accountants), the consolidated financial position
of the Borrower and the Consolidated Subsidiaries as at their respective dates
and the consolidated results of operations, retained earnings and cash flows of
the Borrower and such Subsidiaries for
52
the respective periods to which such statements relate,and the furnishing of the
same to the Agent and the Banks shall constitute a representation and warranty
by the Borrower made on the date the same are furnished to the Agent and the
Banks to that effect and to the further effect that, except as disclosed or
reflected in such financial statements, as at the respective dates thereof or
otherwise disclosed to each Bank pursuant to Section 7.01(f) or 7.01(h), neither
the Borrower nor any Subsidiary has or had any Liability, contingent or
otherwise, or any unrealized or anticipated loss, that, singly or in the
aggregate, has had or could reasonably be expected to have a Materially Adverse
Effect on the Borrower and the Consolidated Subsidiaries taken as a whole.
(c) Historical Information. The Borrower hereby represents and warrants
that all Information furnished to the Agent or the Banks by or on behalf of the
Borrower or any Subsidiary prior to the Agreement Date in connection with or
pursuant to the Loan Documents and the relationships established thereunder, at
the time the same was so furnished, but in the case of Information dated as of a
prior date, as of such date, (i) in the case of any Information prepared in the
ordinary course of business, was complete and correct in all material respects
and in the light of the purpose prepared, and, in the case of any Information
the preparation of which was requested by the Agent or any Bank, was complete
and correct in all material respects to the extent necessary to give the Agent
or such Bank (as the case may be) true and accurate knowledge of the subject
matter thereof, (ii) did not contain any untrue statement of a material fact,
and (iii) did not omit to state a material fact necessary in order to make the
statements contained therein not misleading in the light of the circumstances
under which they were made; provided, however, that any representation and
warranty contained in this subsection (c) in respect of any Information that
relates to any Person other than the Borrower or any AEE Entity is to the best
knowledge of the Borrower.
(d) Future Information. All Information furnished to the Agent or the Banks
by or on behalf of the Borrower or any Subsidiary on or after the Agreement Date
in connection with or pursuant to the Loan Documents or in connection with or
pursuant to any amendment or modification of, or waiver of rights under, the
Loan Documents, shall, at the time the same is so furnished, but in the case of
Information dated as of a prior date, as of such date, (i) in the case of any
Information prepared in the ordinary course of business, be complete and correct
in all material respects and in the light of the purpose prepared, and, in the
case of any Information required by the terms of the Loan Documents or the
preparation of which was requested by the Agent or any Bank, be complete and
correct to the extent necessary to give the Agent or such Bank (as the case may
be) true and accurate knowledge of the subject matter thereof in all material
respects, (ii) not contain any untrue statement of a material fact, and (iii)
not omit to state a material fact necessary in order to make the statements
contained therein not misleading in the light of the circumstances under which
they were made, and the furnishing of the same to the Agent or any Bank shall
constitute a representation and warranty by the Borrower made on the date the
same are so furnished to the effect specified in clauses (i), (ii) and (iii)
above; provided, however, that any representation and warranty contained in this
subsection (d) in respect of any Information that relates to any Person other
than the Borrower or any AEE Entity is to the best knowledge of the Borrower.
53
Section 7.03. Additional Covenants Relating to Disclosure. From the
Agreement Date and until the Repayment Date, the Borrower shall and shall cause
each Subsidiary to:
(a) Accounting Methods and Financial Records. Maintain a system of
accounting, and keep such books, records and accounts (which shall be true and
complete), as may be required or necessary to permit (i) the preparation of
financial statements required to be delivered pursuant to Section 7.01(a) and
(b) and (ii) the determination of the compliance of the Borrower and its
Subsidiaries with the terms of the Loan Documents.
(b) Fiscal Year. Maintain the same opening and closing dates for each
fiscal year as for the fiscal year reflected in the financial statements set
forth in Schedule 7.02(a) or, if the opening and closing dates for the fiscal
year reflected in such financial statements were determined pursuant to a
formula, determine the opening and closing dates for each fiscal year pursuant
to the same formula.
(c) Visits, Inspections and Discussions. Permit or, in the case of
premises, property, books, records or Persons not within its immediate control,
promptly upon reasonable notice take such actions as are necessary or desirable
in order to permit, representatives (whether or not officers or employees) of
the Agent or any Bank, from time to time during operating or business hours, as
often as may be reasonably requested, to (i) visit any of its premises or
property or any premises or property of others on which any of its property or
books and records (or books and records of others relating to it) may be
located, (ii) inspect, and verify the amount, character and condition of, any of
its property, (iii) review and make extracts from its books and records and
books and records of others relating to it, including management letters
prepared by its independent certified public accountants, and (iv) discuss with
any Person (including its principal officers, independent certified public
accountants, suppliers, customers, debtors and other creditors) its business,
assets, Liabilities, financial condition, results of operation and business
prospects.
Section 7.04. Authorization of Third Parties to Deliver Information and
Discuss Affairs. The Borrower hereby authorizes and directs each Person whose
preparation or delivery to the Agent or the Banks of any opinion, report or
other Information is a condition or covenant under the Loan Documents (including
under Article 4 or this Article 7) to so prepare or deliver such Information for
the benefit of the Agent and the Banks. The Borrower further authorizes and
directs all Persons (a) to furnish to the Agent and the Banks any Information
regarding the matters referred to inSection 7.01(g) that the Agent or any Bank
may request, (b) to permit representatives of the Agent or any Bank to make the
visits, inspections, reviews and extracts of premises, property, books and
records within their possession and control contemplated by Section 7.03(c) and
(c) to discuss with representatives of the Agent or any Bank the matters
referred to in Section 7.03(c). The Borrower agrees to promptly execute and
deliver from time to time such further authorizations to effect the purposes of
this Section 7.04 as the Agent or any Bank may reasonably request.
54
ARTICLE 8
DEFAULT
Section 8.01. Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary, or within or without the control of the Borrower or
any Subsidiary, or be effected by operation of law or pursuant to any judgment
or order of any court or any order, rule or regulation of any governmental or
nongovernmental body.
(a) (i) Any payment of principal of any of the Loans, any Unreimbursed
Drawings or the Notes shall not be made when and as due (whether at maturity, by
reason of notice of prepayment or acceleration or otherwise) and in accordance
with the terms of this Agreement and the Notes; or (ii) any payment ofany
interest, fees or other amount under this Agreement or any other Loan Document
(other than a payment which is elsewhere in this Section specifically dealt
with) shall not be made within five (5) Business Days after the same shall be
due (whether at maturity, by reason of notice of prepayment or acceleration or
otherwise) and in accordance with the terms of this Agreement and the other Loan
Documents.
(b) Any Loan Document Representation and Warranty shall at any time prove
to have been incorrect or misleading in any material respect when made and, in
the case of a representation or warranty pursuant to or under Section 5.03,
5.04, 5.05, 5.06(a), 5.07, 5.08, 5.09, 5.10, 5.11, 5.12, 5.13(b), 5.13(c), 5.14,
5.15, 5.17, 5.18, 5.19, 5.20 or 5.21, if capable of being remedied, such
representation or warranty shall continue to be incorrect or misleading in any
material respect for a period of thirty (30) days after notice thereof shall
have been given to the Borrower by the Agent or any other Transaction Party,
provided, that if a good faith effort to remedy is initiated within such thirty
(30) day period and pursued diligently, no Event of Default with respect thereto
shall be deemed to have occurred unless (i) the event resulting in such
representation or warranty being incorrect or misleading in any material respect
could or does result in a Materially Adverse Effect on (A) AES NY, (B) the
Borrower and the AEE Subsidiaries taken as a whole, (C) any Loan Document or (D)
the Collateral or (ii) such representation or warranty remains incorrect or
misleading in any material respect for 180 days after such notice is given.
(c) (i) The Borrower shall default in the performance or observance of:
(A) any term, covenant, condition or agreement contained in Section
6.01, 6.02(a) (insofar as such Section requires the preservation of the
corporate existence of the Borrower), 6.02(f), 6.03 through 6.08, 6.10
through 6.18, or 7.01(h)(i); or
(B) any term, covenant, condition or agreement contained in this
Agreement or any other Loan Document (other than a term, covenant,
condition or agreement a default in the performance or observance of which
is elsewhere in this Section specifically dealt with) and, if capable of
being remedied, such default shall continue unremedied for a period
of thirty (30) days after notice shall have been given by the Agent or any
other Transaction Party to the Borrower
55
requiring that such default be cured, provided, that if such default is
capable of being remedied and a good faith effort to remedy such default is
initiated within such thirty (30) day period and pursued diligently, no
Event of Default with respect thereto shall be deemed to have occurred
until (1) such default has had a Materially Adverse Effect on (w) AES NY,
(x) the Borrower and the AEE Subsidiaries taken as a whole, (y) any Loan
Document or (z) the Collateral or (2) such default has remained uncured for
a period of 180 days after the notice set forth above shall have been given
to the Borrower by the Agent or any other Transaction Party;
(ii) The Borrower shall default in the performance or observance of:
(A) any term, covenant, condition or agreement contained in Article 1,
Section 3.01(a), (b), (c), (d) or (g)(i), or Section 3.02 of the Pledge
Agreement; or
(B) any term, covenant, condition or agreement contained in the Pledge
Agreement (other than any term, covenant, condition or agreement a default
in the performance or observance of which is elsewhere in this Section
specifically dealt with) and, if capable of being remedied, such default
shall continue unremedied for a period of thirty (30) days after notice
shall have been given by the Agent to the Borrower requiring that such
default be cured; or
(iii) AES shall default in any material respect in the performance or
observance of any term, covenant, condition or agreement contained in the
Guaranty, or any other "Event of Default" (as defined in the Guaranty)
shall occur; or
(d) Any AEE Entity or any of its Affiliates asserts, or any AEE Entity or
any of its Affiliates or any other Transaction Party institutes anyproceedings
seeking to establish, that (i) any provision of the Loan Documents is invalid,
not binding or unenforceable or (ii) the Security Interest is not a valid and
perfected first priority security interest in the Collateral subject only to
Permitted Liens described in Section 6.05(a); or
(e) The Borrower shall at any time beneficially directly own less than 100%
of AEE2's issued and outstanding Capital Securities.
(f) The limited liability company agreement or other organizational
document of any AEE2 Entity shall be amended, changed, modified or supplemented
in any material respect.
(g) The occurrence of a Lease Event of Default under any Lease as in effect
as of the date hereof. (See Schedule 8.01(g), for information purposes.)
(h) Any material provision of any ofthe Loan Documents, after delivery
thereof pursuant to Article 4, shall for any reason, except to the extent
permitted by the express terms hereof or thereof, cease to be valid and binding
on or enforceable against the Borrower.
(i) (i) Any Person shall engage in any "prohibited transaction" (as defined
in Section 406 of ERISA or Section 4975 of the Code) involving any Plan that is
not otherwise exempt
56
under any statute, regulation or administrative action, (ii) any "accumulated
funding deficiency" (as defined in Section 302 of ERISA), whether or not waived,
shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any ERISA Affiliate, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required Banks,
likely to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of
ERISA or notice is given of intent to terminate any Single Employer Plan, (v)
the Borrower or any ERISA Affiliate shall, or in the reasonable opinion of the
Required Banks is likely to, incur any liability in connection with (A) a
withdrawal from a Multiemployer Plan or Multiple Employer Plan or (B) the
Insolvency or Reorganization of a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all other
such events or conditions, if any, has had or could reasonably be expected to
have a Materially Adverse Effect on (w) AES NY, (x) the Borrower and the AEE
Subsidiaries taken as a whole, (y) any Loan Document or (z) the Collateral.
(j) The Pledge Agreement, after delivery thereof pursuant to Article 4,
shall for any reason, except to the extent permitted by the terms hereof or
thereof, cease to create a valid and perfected first priority Lien (subject only
to Permitted Liens described in Section 6.05(a)) in any portion of the
Collateral.
(k) At any time any Issuing Bank shall have been served with or otherwise
subjected to a court order, injunction, or other process or decree issued or
granted at the instance of the Borrower restraining or seeking to restrain such
Issuing Bank from paying any amount under any Letter of Credit issued by it and
either (i) there has been a drawing under such Letter of Credit which such
Issuing Bank would otherwise be obligated to pay or (ii) the stated expiration
date or any reduction of the stated amount of such Letter of Credit has occurred
but the right of the beneficiary to draw thereunder has been extended in
connection with the pendency of the related court action or proceeding.
Section 8.02. Remedies upon Event of Default. During the continuance of any
Event of Default (other than one specified in Section 16(g) or (h) of any Lease)
and in every such event, the Agent, upon notice to the Borrower, may do any or
all of the following: (a) declare, in whole or, from time to time, in part, the
principal of and interest on the Loans, the Unreimbursed Drawings and the Notes
and all other amounts owing under the Loan Documents to be, and the Loans, the
Unreimbursed Drawings and the Notes and all such other amounts shall thereupon
and to that extent become, due and payable, (b) terminate, in whole or, from
time to time, in part, the Commitments, (c) require the Borrower to pay
immediately to the Agent an amount equal to the aggregate LC Outstandings of all
Letters of Credit then outstanding, to be held by the Agent (for its benefit and
the benefit of the Issuing Banks andthe Banks) as cash collateral securing such
LC Outstandings, and/or (d) exercise in respect of the Collateral, in addition
to the other rights and remedies provided for herein and in the Pledge Agreement
or otherwise available to the Agent or the Banks, all the rights and remedies of
a secured party on default under the Uniform Commercial Code in effect in the
State of New York and in effect in any other
57
jurisdiction in which any Collateral is located at that time. Upon the
occurrence of an Event of Default specified in Section 16(g) or (h) of any
Lease, automatically and without any notice to the Borrower, (i) the principal
of and interest on the Loans, the Unreimbursed Drawings and the Notes and all
other amounts owing under the Loan Documents shall be due and payable and (ii)
the Commitments shall terminate. Presentment, demand, protest or notice of any
kind (other than the notice provided for in the first sentence of this Section
8.02) are hereby expressly waived.
ARTICLE 9
ADDITIONAL CREDIT FACILITY PROVISIONS
Section 9.01. Mandatory Suspension and Conversion of Eurodollar Rate
Loans and Eurodollar Rate Drawings. A Bank's obligations to make, continue or
convert into Eurodollar Rate Loans or Eurodollar Rate Drawings shall be
suspended, all such Bank's outstanding Eurodollar Rate Loans and Eurodollar Rate
Drawings shall be converted on the last day of their applicable Interest Periods
(or, if earlier, in the case of clause (c) below, on the last day such Bank may
lawfully continue to maintain Eurodollar Rate Loans and Eurodollar Rate Drawings
or, in the case of clause (d) below, on the day determined by such Bank to be
the last Business Day before the effective date of the applicable restriction)
into, and all pending requests for the making or continuation of or conversion
into Eurodollar Rate Loans or Eurodollar Rate Drawings by such Bank shall be
deemed requests for, Base Rate Loans or Base Rate Drawings (as applicable), if:
(a) on or prior to the determination of an interest rate for a Eurodollar
Rate Loan or Eurodollar Rate Drawing for any Interest Period, the Agent
determines that for any reason appropriate information is not available to it
for purposes of determining the Adjusted Eurodollar Rate for such Interest
Period;
(b) on or prior to the first day of any Interest Period for a Eurodollar
Rate Loan or Eurodollar Rate Drawing, such Bank determines that the Adjusted
Eurodollar Rate as determined by the Agent for such Interest Period would not
accurately reflect the cost to such Bank of making, continuing or converting
into a Eurodollar Rate Loan or Eurodollar Rate Drawing (as the case may be) for
such Interest Period;
(c) at any time such Bank determines that any Regulatory Change Enacted
after the Agreement Date makes it unlawful or impracticable for such Bank or its
applicable Lending Office to make, continue or convert into any Eurodollar Rate
Loan or Eurodollar Rate Drawing, or to comply with its obligations hereunder in
respect thereof; or
(d) such Bank determines that, by reason of any Regulatory Change Enacted
after the AgreementDate, such Bank or its applicable Lending Office is
restricted, directly or indirectly, in the amount that it may hold of (i) a
category of liabilities that includes deposits by reference to which, or on the
basis of which, the interest rate applicable to Eurodollar Rate Loans or
Eurodollar Rate Drawings is directly or indirectly determined or (ii) the
category of assets that includes Eurodollar Rate Loans or Eurodollar Rate
Drawings.
58
If, as a result of this Section 9.01, any Loan or Unreimbursed Drawing of
any Bank that would otherwise be made or maintained as or converted into a
Eurodollar Rate Loan or Eurodollar Rate Drawing (as applicable) for any Interest
Period is instead made or maintained as or converted into a Base Rate Loan or
Base Rate Drawing (as applicable), then, unless the corresponding Loan or
Unreimbursed Drawing (as applicable) of each of the other Banks is also to be
made or maintained as or converted into a Base Rate Loan or Base Rate Drawing
(as applicable), such Loan or Unreimbursed Drawing (as applicable) shall be
treated as being a Eurodollar Rate Loan or Eurodollar Rate Drawing (as
applicable) for such Interest Period for all purposes of this Agreement
(including the timing, application and proration among the Banks of interest
payments, conversions and prepayments) except for the calculation of the
interest rate borne by such Loan or Unreimbursed Drawing (as applicable). The
Agent shall promptly notify the Borrower and each Bank of the existence or
occurrence of any condition or circumstance specified in clause (a) above, and
each Bank shall promptly notify the Borrower and the Agent of the existence or
occurrence of any condition or circumstance specified in clause (b), (c) or (d)
above applicable to such Bank's Loans and Unreimbursed Drawings, but the failure
by the Agent or such Bank to give any such notice shall not affect such Bank's
rights hereunder.
Section 9.02. Regulatory Changes. If in the determination of any Bank or
Issuing Bank (a) any Regulatory Change Enacted after the Agreement Dateshall
directly or indirectly (i) reduce the amount of any sum received or receivable
by such Bank with respect to any Loan or Unreimbursed Drawing or the return to
be earned by such Bank on any Loan or Unreimbursed Drawing, (ii) impose a cost
on such Bank or any Affiliate of such Bank that is attributable to (A) the
making, funding or maintaining of, or such Bank's commitment to make, any Loan
or Unreimbursed Drawing, or (B) participating in the issuance, maintenance or
funding of any Letter of Credit, (iii) increase the cost to such Issuing Bank of
issuing or maintaining any Letter of Credit, (iv) require such Bank or any
Affiliate of such Bank to make any payment on or calculated by reference to the
gross amount of any amount received by such Bank under any Loan Document, (v)
reduce, or have the effect of reducing, the rate of return on any capital of
such Bank or any Affiliate of such Bank that such Bank or such Affiliate is
required to maintain on account of any Loan or Unreimbursed Drawing or such
Bank's commitment to make any Loan or to participate in the issuance,
maintenance or funding of any Letter of Credit, or (vi) reduce, or have the
effect of reducing, the rate of return on any capital of such Issuing Bank or
any Affiliate of such Issuing Bank that such Issuing Bank or such Affiliate is
required to maintain on account of any Letter of Credit or such Issuing Bank's
commitment to issue any Letter of Credit, and (b) such reduction, increased cost
or payment shall not be fully compensated for by an adjustment in the applicable
rates of interest payable under the Loan Documents, then the Borrower shall pay
to such Bank or Issuing Bank (as the case may be) such additional amounts as
such Bank or Issuing Bank (as the case may be) determines will, togetherwith any
adjustment in the applicable rates of interest payable hereunder, fully
compensate for such reduction, increased cost or payment. Such additional
amounts shall be due and payable, in the case of those applicable to prior
periods, within 15 days after request by such Bank or Issuing Bank (as the case
may be) for such payment and, in the case of those applicable to future periods,
on the dates specified, or determined in accordance with a method specified, by
such Bank or Issuing Bank (as the case may be); provided, however, that if,
pursuant to the Depositary Agreement, the Borrower is not permitted to pay any
such additional amounts to such Issuing Bank on any such due date, the Borrower
shall pay such additional amounts to such Issuing Bank
59
on the first date thereafter (but in no event later than the next-scheduled Rent
Payment Date) that the Borrower is permitted to pay such additional amounts,
provided, that, in such case, all such additional amounts shall bear interest at
the Base Rate plus 1.375% per annum from such due date until paid in full,
payable to such Issuing Bank on the date that such additional amounts are paid.
Each Bank and Issuing Bank will promptly notify the Borrower of any
determination made by it referred to in clauses (a) and (b) above, but the
failure to give such notice shall not affect such Bank's or Issuing Bank's (as
the case may be) right to compensation.
Section 9.03. Capital Requirements. If, in the determination of any Bank
or Issuing Bank, any Regulatory Change relating to capital adequacy Enacted
after the Agreement Date requires such Bank or Issuing Bank, or any Affiliate of
such Bank or Issuing Bank, to maintain capital on account of (i) any Loan or
Unreimbursed Drawing, (ii) such Bank's Commitment, (iii) such Bank's
participation in the issuance, maintenance or funding of any Letter of Credit,
or (iv) such Issuing Bank's issuance or maintenance of any Letter of Credit or
commitment to issue any Letter of Credit, in a greater amount than such Bank,
Issuing Bank or Affiliate would otherwise have to maintain on account of such
Loan, Unreimbursed Drawing, Commitment, participation or Letter of Credit, as
applicable, then, upon request by such Bank or Issuing Bank (as the case may
be), the Borrower shall from time to time thereafter pay to such Bank or Issuing
Bank (as the case may be) such additional amounts as such Bank or Issuing Bank
(as the case may be) determines will fully compensate for any reduction in the
rate of return on the capital that such Bank, Issuing Bank or Affiliate is so
required to maintain on account of such Loan, Unreimbursed Drawing, Commitment,
participation or Letter of Credit, as applicable. Such additional amounts shall
be due and payable, in the case of those applicable to prior periods, within 15
days after request by such Bank or Issuing Bank (as the case may be) for such
payment and, in the case of those relating to future periods, on the dates
specified, or determined in accordance with a method specified, by such Bank or
Issuing Bank (as the case may be); provided, however, that if, pursuant to the
Depositary Agreement, the Borrower is not permitted to pay any such additional
amounts to such Issuing Bank on any such due date, the Borrower shall pay such
additional amounts to such Issuing Bank on thefirst date thereafter (but in no
event later than the next-scheduled Rent Payment Date) that the Borrower is
permitted to pay such additional amounts, provided, that, in such case, all such
additional amounts shall bear interest at the Base Rate plus 1.375% per annum
from such due date until paid in full, payable to such Issuing Bank on the date
that such additional amounts are paid.
Section 9.04. Funding Losses. The Borrower shall pay to each Bank, within
five (5) Business Days after any request therefor, such amount or amounts as
such Bank determines are necessary to compensate it for any loss, cost or
reasonable expense (but not including loss of anticipated profits) incurred by
it as a result of (a) any payment, prepayment or conversion of a Eurodollar Rate
Loan or Eurodollar Rate Drawing on a date other than the last day of an Interest
Period therefor or (b) a Eurodollar Rate Loan or Eurodollar Rate Drawing for any
reason not being made or converted, or any payment of principal thereof or
interest thereon not being made, on the date therefor determined in accordance
with the applicable provisions of this Agreement. At the election of such Bank,
and without limiting the generality of the foregoing, but without duplication,
such compensation on account of losses may include an amount equal to the excess
of (i) the interest that would have been received from the Borrower under this
Agreement on any amounts to be reemployed during an Interest Period or its
remaining portion over (ii) the interest
60
component of the return that such Bank determines it could have obtained had it
placed such amount on deposit in the interbank Dollar market selected by it for
a period equal to such Interest Period or its remaining portion. If, pursuant to
the Depositary Agreement, the Borrower is not permitted to pay any such amounts
to any Bank on the date that such payment is due and payable pursuant to the
first sentence of this Section 9.04, the Borrower shall pay such amounts to such
Bank on the first date thereafter (but in no event later than the next-scheduled
Rent Payment Date) that the Borrower is permitted to pay such amounts, provided,
that, in such case, all such amounts shall bear interest at the Base Rate plus
1.375% per annum from such due date until paid in full, payable to suchBank on
the date that such amounts are paid.
Section 9.05. Certain Determinations; Survival. (a) In making the
determinations contemplated by Sections 9.01, 9.02 and 9.03, each Bank and
Issuing Bank may make such estimates, assumptions, allocations and the like that
such Bank or Issuing Bank (as the case may be) in good faith determines to be
appropriate, and such Bank's or Issuing Bank's (as the case may be) selection
thereof in accordance with this Section 9.05, and the determinations made by
such Bank or Issuing Bank (as the case may be) on the basis thereof, shall be
final, binding and conclusive upon the Borrower, except, in the case of such
determinations, for manifest errors in computation or transmission. Each Bank
and Issuing Bank shall furnish to the Borrower upon request a certificate
outlining in reasonable detail the computation of any amounts claimed by it
under Sections 9.02 and 9.03 and the assumptions underlying such computations.
So long as any such request by the Borrower is made within five (5) Business
Days after such Bank or Issuing Bank first requests payment of such amounts
pursuant to Section 9.02 or 9.03 (as the case may be), the Borrower shall not be
required to pay such amounts until it has received such certificate.
(b) The Borrower's obligations under this Article 9 shall survive the
repayment of all other amounts owing to the Lenders, the Agents and the Issuing
Banks under the Loan Documents and the termination of the Commitments. If and to
the extent that the obligations of the Borrower under this Article 9 are
unenforceable for any reason, the Borrower agrees to make the maximum
contribution to the payment and satisfaction thereof which is permissible under
applicable law.
Section 9.06. Change of Lending Office. If an event occurs with respect
to a Lending Office of any Bank that obligates the Borrower to pay any amount
under Section 2.13, makes operable the provisions of clause (c) or (d) of
Section 9.01 or entitles such Bank to make a claim under Section 2.13, 9.02 or
9.03, such Bank shall, if requested by the Borrower, use reasonable efforts to
designate another Lending Office or Offices, the designation of which will
reduce the amount the Borrower is so obligated to pay, eliminate such
operability or reduce the amount such Bank is so entitled to claim, provided
that such designation would not, in the sole and absolute discretion of such
Bank, be disadvantageous to such Bank in any manner or contrary to such Bank's
policies. Each Bank may at any time and from time to time change any Lending
Office and shall give notice of any such change to the Agent and the Borrower.
Except in the case of a change in Lending Offices made at the request of the
Borrower, the designation of a new Lending Office by any Bank shall not obligate
the Borrower to pay any amount to such Bank under Section 2.13, make operable
the provisions of clause (c) or (d) of Section 9.01 or entitle such Bank to make
a claim under Section 2.13 or 9.02 if such obligation, the operability of such
61
clause or such claim results solely from such designation and not from a
Regulatory Change Enacted thereafter.
Section 9.07. Replacement of Bank in Respect of Increased Costs. (a)
Within fifteen (15) days after receipt by the Borrower of written notice from
any Bank (an "Affected Bank") (i) claiming payment of additional amounts under
Section 2.13, 9.02 or 9.03, or (ii) claiming that it is unable or unlawful for
it to make Eurodollar Rate Loans or Eurodollar Rate Drawings as set forth in
Section 9.01, the Borrower may, if no Event of Default then exists, at its
option, notify the Agent and such Affected Bank of its intention to replace the
Affected Bank. The Borrower, with the consent of the Agent (which consent shall
not be unreasonably withheld), may obtain, at the Borrower's expense, a
replacement bank ("Replacement Bank") for the Affected Bank, which Replacement
Bank must be reasonably satisfactory to the Agent and each Issuing Bank (other
than any Issuing Bank that is also the Affected Bank). The Affected Bank must
promptly sell and assign its Loans, Unreimbursed Drawings and Commitments to
such Replacement Bank for an amount equal to the principal balance of all Loans
and Unreimbursed Drawings held by the Affected Bank and all accrued interest and
fees with respect thereto through the date of such sale, provided that the
Borrower shall have reimbursed such Affected Bank for the additional amounts,
increased costs and any other amounts that it is entitled to receive under this
Agreement through the date of such sale and assignment.
(b) Notwithstanding the foregoing, the Borrower shall not have the right to
obtain a Replacement Bank if the Affected Bank rescinds its demand for increased
costs or additional amounts within fifteen (15) days following its receipt of
the Borrower's notice of intention to replace such Affected Bank. Furthermore,
if the Borrower gives a notice of intention to replace and does not so replace
such Affected Bank within seventy (70) days thereafter, the Borrower's rights to
replace the Affected Bank as a result of claims based upon the events given rise
to such claim referred to in such written notice shall terminate. The Borrower
shall promptly pay all increased costs or additional amounts previously demanded
by such Affected Bank and shall continue to pay immediately upon receipt of an
invoice therefor all such increased costs and amounts incurred during any period
after such written notice through the date of such assignment.
ARTICLE 10
THE AGENT
Section 10.01. Appointment and Powers. Each Bank and Issuing Bank hereby
irrevocably appoints and authorizes Union Bank, and Union Bank hereby agrees, to
act as the agent for and representative (within the meaning of Section
9-105(1)(m) of the Uniform Commercial Code) of such Bank and Issuing Bank under
the Loan Documents with such powers as are delegated to the Agent and the
Secured Party by the terms thereof, together with such other powers as are
reasonably incidental thereto. The Agent's duties shall be purely ministerial
and it shall have no duties or responsibilities except those expressly set forth
in the Loan Documents. The Agent shall not be required under any circumstances
to take any action that, in its judgment, (a) is contrary to any provision of
the Loan Documents or Applicable Law or (b) would expose it to any Liability or
expense against which it has not been indemnified to its
62
satisfaction. The Agent shall not, by reason of its serving as the Agent, be a
trustee or other fiduciary for any Bank.
Section 10.02. Limitation on Agent's Liability. Neither the Agent nor any
of its directors, officers, employees or agents shall be liable or responsible
for any action taken or omitted to be taken by it or them under or in connection
with the Loan Documents, except for its or their own gross negligence, willful
misconduct or knowing violations of law. The Agent shall not be responsible to
any Bank or Issuing Bank for (a) any recitals, statements, representations or
warranties contained in the Loan Documents or in any certificate or other
document referred to or provided for in, or received by any of the Banks or
Issuing Banks under, the Loan Documents, (b) the validity, effectiveness or
enforceability of the Loan Documents or any such certificate or other document,
(c) the value or sufficiency of the Collateral, (d) the satisfaction of any
condition set forth in Article 4 or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to the Agent or
(e) any failure by the Borrower to perform any of its obligations under the Loan
Documents. The Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact so long as the Agent was not grossly negligent in selecting or
directing such agents or attorneys-in-fact. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telex, telecopier, telegram or cable) believed by it to be genuine
and correct and to have been signed or given by or on behalf of the proper
Person or Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. As to any matters not
expressly provided for by the Loan Documents, the Agent shall in all cases be
fully protected in acting, or in refraining from acting, under the Loan
Documents in accordance with instructions signed by the Required Banks, and such
instructions of the Required Banks and any action taken or failure to act
pursuant thereto shall be binding on all of the Banks.
Section 10.03. Defaults. The Agent shall not be deemed to have knowledge
of the occurrence of a Default (other than the non-payment to it of principal of
or interest on Loans or fees) unless the Agent has received notice from a Bank
or the Borrower specifying such Default and stating that such notice is a
"Notice of Default". In the event that the Agent has knowledge of such a
non-payment or receives such a notice of the occurrence of a Default, the Agent
shall give prompt notice thereof to the Banks. In the event of any Default, the
Agent shall (a) in the case of a Default that constitutes an Event of Default,
take any or all of the actions referred to in the first sentence of Section 8.02
if so directed by the Required Banks and (b) in the case of any Default, take
such other action with respect to such Default as shall be reasonably directed
by the Required Banks. Unless and until the Agent shall have received such
directions, in the event of any Default, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interests of the Banks.
Section 10.04. Rights as a Bank. Each Person acting as the Agent that is
also a Bank shall, in its capacity as a Bank, have the same rights and powers
under the Loan Documents as any other Bank and may exercise the same as though
it were not acting as the Agent, and the term "Bank" or "Banks" shall include
such Person in its individual capacity. Each Person acting as the Agent (whether
or not such Person is a Bank) and its Affiliates may (without having to
63
account therefor to any Bank) accept deposits from, lend money to and generally
engage in any kind of banking, trust or other business with the Borrower and its
Affiliates as if it were not acting as the Agent, and such Person and its
Affiliates may accept fees and other consideration from the Borrower and its
Affiliates for services in connection with the Loan Documents or otherwise
without having to account for the same to the Banks.
Section 10.05. Indemnification. The Banks agree to indemnify the Agent (to
the extent not reimbursed by the Borrower hereunder), ratably on the basis of
the respective Percentages of the Banks, for any and all Liabilities, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against the Agent (including the costs and expenses that the Borrower
is obligated to pay hereunder) in any way relating to or arising out of the
LoanDocuments or any other documents contemplated thereby or referred to therein
or the transactions contemplated thereby or the enforcement of any of the terms
thereof or of any such other documents, provided that no Bank shall be liable
for any of the foregoing to the extent (a) they are subject to the indemnity
contemplated by the last sentence of Section 11.09(b) or (b) they arise from the
gross negligence or willful misconduct of the Agent.
Section 10.06. Non-Reliance on Agent and Other Banks. Each Bank agrees
that it has made and will continue to make, independently and without reliance
on the Agent or any other Bank, and based on such documents and information as
it deems appropriate, its own credit analysis of the Borrower, its own
evaluation of the Collateral and itsown decision to enter into the Loan
Documents and to take or refrain from taking any action in connection therewith.
The Agent shall not be required to keep itself informed as to the performance or
observance by the Borrower of the Loan Documents or anyother document referred
to or provided for therein or to inspect the properties or books of the Borrower
or any AEE Entity or the Collateral. Except for notices, reports and other
documents and information expressly required to be furnished to the Banks by the
Agent under the Loan Documents, the Agent shall have no obligation to provide
any Bank with any information concerning the business, status or condition of
the Borrower or any AEE Entity, the Loan Documents or the Collateral that may
come into the possession of the Agent or any of its Affiliates.
Section 10.07. Execution and Amendment of Loan Documents on Behalf of the
Banks. Each Bank and Issuing Bank hereby authorizes the Agent to execute and
deliver, in the name of and on behalf of such Bank and Issuing Bank, (a) the
Pledge Agreement and (b) all UCC financing and continuation statements and other
documents the filing or recordation of which are, in the determination of the
Agent, necessary or appropriate to create, perfect or maintain the existence or
perfected status of the Security Interest. The Agent shall consent to any
amendment of any term, covenant, agreement or condition of the Pledge Agreement
or the Guaranty, or to any waiver of any right thereunder, if, but only if, the
Agent is directed to do so in writing by the Required Banks; provided, however,
that (i) the Agent shall not be required to consent to any such amendment or
waiver that affects its rights or duties and (ii) the Agent shall not, unless
directed to do so in writing by each Bank, (A) consent to any assignment by the
Borrower of any of its rights or obligations under any such agreement, (B)
consent to any release or termination of the Guaranty or (C) release any
Collateral from the Security Interest, except as required or contemplated by
the Loan Documents.
64
Section 10.08. Resignation of the Agent. The Agent may at any time give
notice of its resignation to the Banks and the Borrower. Upon receipt of any
such notice of resignation, the Required Banks may, after consultation with the
Borrower, appoint a successor Agent which shall be acceptable to the Borrower,
in its reasonable judgment. If no successor Agent shall have been so appointed
by the Required Banks and shall have accepted such appointment within 30 days
after the retiring Agent's giving of notice of resignation, then the retiring
Agent may, on behalf of the Banks and after consultation with the Borrower,
appoint a successor Agent which shall be a bank with an office in New York, New
York, or Los Angeles, California, having a combined capital and surplus of at
least $500,000,000 or an Affiliate of any such bank, which Affiliate shall be
reasonably acceptable to the Borrower. Upon the acceptance by any Person of its
appointment as a successor Agent, (a) such Person shall thereupon succeed to and
become vested with all the rights, powers, privileges, duties and obligations of
the retiring Agent and the retiring Agent shall be discharged from its duties
and obligations as Agent under the Loan Documents and (b) the retiring Agent
shall promptly transfer all Collateral within its possession or control to the
possession or control of the successor Agent and shall execute and deliver such
notices, instructions and assignments as may be necessary or desirable to
transfer the rights of the Agent with respect to the Collateral to the successor
Agent. After any retiring Agent's resignation as Agent, the provisions of this
Article 10 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Agent.
ARTICLE 11
MISCELLANEOUS
Section 11.01. Notices and Deliveries. (a) Notices and Materials Other
than Collateral. Except as provided in Section 10.01(b):
(i) Manner of Delivery. All notices, communications and materials
(including all Information) to be given or delivered pursuant to the Loan
Documents shall, except in those cases where giving notice by telephone is
expressly permitted, be given or delivered in writing (which shall include
telecopy transmissions). Notices under Sections 2.02, 2.03(c), 2.05, 2.07,
3.01, 3.02, 3.04(e) and 8.02 may be by telephone, promptly, in the case of
each notice other than one under Section 8.02, confirmed in writing. In the
event of a discrepancy between any telephonic notice and any written
confirmation thereof, such written confirmation shall be deemed the
effective notice except to the extent that the Agent has acted in reliance
on such telephonic notice.
(ii) Addresses. All notices, communications and materials to be given
or delivered pursuant to the Loan Documents shall be given or delivered at
the following respective addresses and telecopier and telephone numbers and
to the attention of the following individuals or departments:
(A) if to the Borrower, to it at:
1001 North 19th Street, 20th Floor
Arlington, VA 22209
Telecopier No.: (703) 528-4510
65
Telephone No.: (703) 522-1315
Attention: Project Manager
(B) if to the Agent, to it at:
445 South Figueroa Street, 15th Floor
Los Angeles, California 90071
Telecopier No.: (213) 236-4096
Telephone No.: (213) 236-4125
Attention: Susan Johnson
(C) if to any Bank (including in its capacity as an Issuing
Bank), to it at the address or telex, telecopier or telephone
number and to the attention of the individual or department, set
forth below such Bank's name under the heading "Notice Address"
on Annex A or, in the case of a Bank that becomes a Bank pursuant
to an assignment, set forth under the heading "Notice Address" in
the Notice of Assignment given to the Borrower and the Agent with
respect to such assignment;
or at such other address or telecopier or telephone number or to the attention
of such other individual or department as the party to which such information
pertains may hereafter specify for such purpose in a notice specifically
captioned "Notice of Change of Address" given to (x) if the party to which such
information pertains is the Borrower, the Agent and each Bank, (y) if the party
to which such information pertains is the Agent, the Borrower and each Bank and
(z) if the party to which such information pertains is a Bank, the Borrower and
the Agent.
(iii) Effectiveness. Each notice and communication and any material to
be given or delivered pursuant to the Loan Documents shall be deemed so
given or delivered (A) if sent by registered or certified mail, postage
prepaid, return receipt requested, on the fifth Business Day after such
notice, communication or material, addressed as above provided, is
delivered to a United States post office and a receipt therefor is issued
thereby, (B) if sent by any other means of physical delivery, when such
notice, communication or material is delivered to the appropriate address
as above provided, (C) if sent by telecopier, when such notice,
communication or material is transmitted to the appropriate telecopier
number as above provided and is received at such number and (D) if given by
telephone, when communicated to the individual or any member of the
department specified as the individual or department to whose attention
notices, communications and materials are to be given or delivered, or, in
the case of notice by the Agent to the Borrower under Section 8.02 given by
telephone as above provided, if any individual or any member of the
department to whose attention notices, communications and materials are to
be given or delivered is unavailable at the time, to any other officer or
employee of the Borrower, except that (x) notices of a change of address,
telecopier or telephone number or individual or department to whose
attention notices, communications and materials are to be given or
delivered shall not be deemed given until received and (y) notices,
communications and materials to be given or delivered to the Agent, any
Bank or any Issuing Bank pursuant to Sections 2.02, 2.03(c), 2.05, 2.07 and
2.12(b) and Articles 3 and 7 shall not be deemed given or delivered until
received by
66
the officer of the Agent, such Bank or such Issuing Bank responsible, at
the time, for the administration of the Loan Documents.
(iv) Reasonable Notice. Any requirement under Applicable Law of
reasonable notice by the Agent, the Banks or the Issuing Banks to the
Borrower of any event in connection with, or in any way related to, the
Loan Documents or the exercise by the Agent, the Banks or the Issuing Banks
of any of their rights thereunder shall be met if notice of such event is
given to the Borrower in the manner prescribed above at least ten (10) days
before (A) the date of such event or (B) the date after which such event
will occur.
(b) Collateral. Until the Agent shall otherwise specify, all Collateral to
be delivered to the Agent pursuant to the Loan Documents consisting of
instruments, securities, chattel paper, letters of credit or documents shall be
delivered to the Agent at the Agent's Office either by hand delivery or by
registered or certified mail, postage prepaid, return receipt requested, in
either case insured in an amount not less than the greater of the aggregate face
amount and the aggregate fair market value of the Collateral so being delivered.
All other Collateral to be delivered to the Agent pursuant to the Loan Documents
shall be delivered to such Person, at such address, by such means and in such
manner as the Agent may designate.
Section 11.02. Expenses; Indemnification. Whether or not any Extensions of
Credit are made hereunder, the Borrower shall:
(a) pay or reimburse the Agent, each Bank and each Issuing Bank for all
transfer, documentary, stamp and similar taxes, and all recording and filing
fees and taxes payable in connection with, arising out of, or in any way related
to, the execution, delivery and performance of the Loan Documents or the making
of the Extensions of Credit;
(b) pay or reimburse the Agent for all reasonable costs and expenses
(including fees and disbursements of legal counsel, appraisers, accountants and
other experts employed or retained by the Agent) incurred by the Agent in
connection with, or arising out of, or in any way related to (i) the
negotiation, preparation, execution, delivery and syndication of (A) the Loan
Documents and (B) whether or not executed, any waiver, amendment or consent
thereunder or thereto, (ii) the administration of and any operations under the
Loan Documents, (iii) consulting with respect to any matter in any way arising
out of, related to, or connected with, the Loan Documents, including (A) the
protection or preservation of the Collateral, (B) the protection, preservation,
exercise or enforcement of any of the rights of the Agent, the Banks or the
Issuing Banks in, under or related to the Collateral or the Loan Documents or
(C) the performance of any of the obligations of the Agent, the Banks or the
Issuing Banks under or related to the Loan Documents, (iv) protecting or
preserving the Collateral or (v) protecting, preserving, exercising or enforcing
any of the rights of the Agent, the Banks or the Issuing Banks in, under or
related to the Collateral or the Loan Documents, including defending the
Security Interest as a valid, perfected, first priority security interest in the
Collateral subject only to Permitted Liens;
(c) pay or reimburse each Bank for all reasonable costs and expenses
(including fees and disbursements of legal counsel and other experts employed or
retained by such Bank) incurred by such Bank in connection with, arising out of,
or in any way related to (i) consulting
67
during a Default with respect to (A) the protection, preservation, exercise or
enforcement of any of its rights in, under or related to the Collateral or the
Loan Documents or (B) the performance of any of its obligations under or related
to the Loan Documents or (ii) protecting, preserving, exercising or enforcing
during a Default any of its rights in, under or related to the Collateral or the
Loan Documents; provided, however, that the Agent and each Bank shall exercise
reasonable efforts to select one common legal counsel for each jurisdiction and
other common experts except to the extent that the Agent or any Bank deems in
its reasonable judgment that the use of common legal counsel or other experts
would prejudice its interests; and
(d) indemnify and hold each Indemnified Person harmless from and against
all losses (including judgments, penalties and fines) suffered, and pay or
reimburse each Indemnified Person for all reasonable costs and expenses
(including fees and disbursements of legal counsel and other experts employed or
retained by such Indemnified Person) incurred, by such Indemnified Person in
connection with, arising out of, or in any way related to (i) any Loan Document
Related Claim (whether asserted by such Indemnified Person or the Borrower or
any other Person), including the prosecution or defense thereof and any
litigation or proceeding with respect thereto (whether or not, in the case of
any such litigation or proceeding, such Indemnified Person is a party thereto),
(ii) any actual or alleged presence or release of any Hazardous Substance on or
from any property owned or operated by the Borrower or any of its Affiliates, or
any Environmental Conditions related in any way to the Borrower or any of its
Affiliates, or (iii) any investigation, governmental or otherwise, arising out
of, related to, or in any way connected with, the Loan Documents or the
relationships established thereunder, except that the foregoing indemnity shall
not be applicable to any loss suffered by any Indemnified Person to the extent
such loss is determined by a judgment of a court that is binding on the Borrower
and such Indemnified Person, final and not subject to review on appeal, to be
the result of acts or omissions on the part of such Indemnified Person
constituting (x) willful misconduct or (y) gross negligence.
Section 11.03. Amounts Payable Due upon Request for Payment. All amounts
payable by the Borrower under Section 11.02 and under the other provisions of
the Loan Documents shall, except as otherwise expressly provided, be immediately
due upon request for the payment thereof.
Section 11.04. Remedies of the Essence. The various rights and remedies of
the Agent, the Banks and the Issuing Banks under the Loan Documents are of the
essence of those agreements, and the Agent, the Banks and the Issuing Banks
shall be entitled to obtain a decree requiring specific performance of each such
right and remedy.
Section 11.05. Rights Cumulative. Each of the rights and remedies of the
Agent, the Banks and the Issuing Banks under the Loan Documents shall be in
addition to all of their other rights and remedies under the Loan Documents and
Applicable Law, and nothing in the Loan Documents shall be construed as limiting
any such rights or remedies.
Section 11.06. Amendments: Waivers. Any term, covenant, agreement or
condition of the Loan Documents may be amended, and any right under the Loan
Documents may be waived, if, but only if, such amendment or waiver is in writing
and is signed by (a) in the case of an amendment or waiver with respect to the
Loan Documents referred to in Section 10.07, the
68
Agent, (b) in the case of an amendment or waiver with respect to any other Loan
Document, (i) the Required Banks, (ii) if the rights and duties of the Agent are
affected thereby, by the Agent, and (iii) if the rights and duties of any
Issuing Bank are affected thereby, by such Issuing Bank, and (c) in the case of
an amendment with respect to any Loan Document, by the Borrower; provided,
however, that no amendment or waiver shall be effective, unless in writing and
signed by each Bank affected thereby, to the extent it (A) changes the amount of
such Bank's Commitment, (B) reduces the principal of or the rate of interest on
such Bank's Loans, Unreimbursed Drawings or Note or the fees payable to such
Bank hereunder, (C) postpones any date fixed (otherwise than as a result of a
prepayment pursuant to Section 2.05) for any payment of principal of or interest
on such Bank's Loans, Unreimbursed Drawings or Notes or the fees payable to such
Bank hereunder or (D) amends Section 2.14, this Section 11.06 or any other
provision of this Agreement requiring the consent or other action of all of the
Banks. Unless otherwise specified in an amendment or waiver, an amendment or
waiver under the Loan Documents shall be effective only in the specific instance
and for the specific purpose for which given. By entering into an amendment
with, or giving a waiver under, a section of the Loan Documents, the Banks shall
not be deemed to have, or to have intended to have, (1) waived any rights that
they, or any of them, then or thereafter may have under any other provisions of
the Loan Documents and (2) if such amendment or waiver was occasioned by a
particular fact or facts, accepted that fact or those facts for any other
purpose or Section of the Loan Documents, including Section 5.23 of this
Agreement, so that, for purposes of Section 5.23, if such fact or facts has had
or could have, either alone, or together with other facts, a Materially Adverse
Effect, such Materially Adverse Effect shall be a change or event subject to
Section 5.23, notwithstanding such amendment or waiver. No election not to
exercise, failure to exercise or delay in exercising any right, nor any course
of dealing or performance, shall operate as a waiver of any right of the Agent,
any Bank or any Issuing Bank under the Loan Documents or Applicable Law, nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right of the Agent, any
Bank or any Issuing Bank under the Loan Documents or Applicable Law.
Section 11.07. Set-Off; Suspension of Payment and Performance. The Agent,
each Bank and each Issuing Bank is hereby authorized by the Borrower, at any
time and from time to time, without notice, (a) during any Event of Default, to
set-off against, and to appropriate and apply to the payment of, the Liabilities
of the Borrower under the Loan Documents (whether owing to such Person or to any
other Person that is the Agent, a Bank or an Issuing Bank and whether matured or
unmatured, fixed or contingent or liquidated or unliquidated), any and all
Liabilities owing by such Person or any of its Affiliates to the Borrower
(whether payable in Dollars or any other currency, whether matured or unmatured
and, in the case of Liabilities that are deposits, whether general or special,
time or demand and however evidenced and whether maintained at a branch or
office located within or without the United States) and (b) during any Default,
to suspend the payment and performance of such Liabilities owing by such Person
or its Affiliates in an amount equal to the amount then due and payable under
the Loan Documents and, in the case of Liabilities that are deposits, to the
extent necessary, to return as unpaid for insufficient funds any and all checks
and other items drawn against such deposits. The Agent, such Bank or such
Issuing Bank shall provide the Borrower with written notice of the set-off,
provided, that the failure of the Agent, such Bank or such Issuing Bank to
provide such notice will not effect their rights under this Agreement.
69
Section 11.08. Sharing of Recoveries. (a) Each Bank agrees that, if, for
any reason, including as a result of (i) the exercise of any right of
counterclaim, set-off, banker's lien or similar right, (ii) its claim in any
applicable bankruptcy, insolvency or other similar law being deemed secured by a
Debt owed by it to the Borrower, including a claim deemed secured under Section
506 of the Bankruptcy Code, or (iii) the allocation of payments by the Agent or
the Borrower in a manner contrary to the provisions of Section 2.14, such Bank
shall receive payment of a proportion of the aggregate amount due and payable to
it hereunder as principal of or interest on the Loans or Unreimbursed Drawings
or fees that is greater than the proportion received by any other Bank in
respect of the aggregate of such amounts due and payable to such other Bank
hereunder, then the Bank receiving such proportionately greater payment shall
purchase participations (which it shall be deemed to have done simultaneously
upon the receipt of such payment) in the rights of the other Banks hereunder so
that all such recoveries with respect to such amounts due and payable hereunder
(net of costs of collection) shall be pro rata; provided, that if all or part of
such proportionately greater payment received by the purchasing Bank is
thereafter recovered by or on behalf of the Borrower from such Bank, such
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such Bank to the extent of such recovery,
but without interest (unless the purchasing Bank is required to pay interest on
the amount recovered to the Person recovering such amount, in which case the
selling Bank shall be required to pay interest at a like rate). So long as the
purchasing Bank has not advised it to the contrary, each selling Bank may
assume, for purposes of Section 11.09(b), that no Tax is required to withheld or
deducted by the Borrower from, or is otherwise payable by the Borrower in
connection with, any payment by the Borrower to or for the account of such Bank
under the Loan Documents. The Borrower expressly consents to the foregoing
arrangements and agrees that any holder of a participation in any rights
hereunder so purchased or acquired pursuant to this Section 11.08(a) shall, with
respect to such participation, be entitled to all of the rights of a Bank under
Sections 2.13, 9.02, 9.03, 9.04, 9.05, 11.02 and 11.07 (subject to any condition
imposed on a Bank hereunder with respect thereto, including delivery of the
forms and certificates required under Section 2.13(a)(iv)) and may exercise any
and all rights of set-off with respect to such participation as fully as though
the Borrower were directly indebted to the holder of such participation for
Loans in the amount of such participation.
(b) Each Bank agrees to exercise any right of counterclaim, set-off,
banker's lien or similar right that it may have in respect of the Borrower in a
manner so as to apportion the amount subject to such exercise, on a pro rata
basis, between (i) obligations of the Borrower for amounts subject to the
sharing provisions of Section 11.08(a) and (ii) other Liabilities of the
Borrower.
Section 11.09. Assignments and Participations. (a) Assignments. (i) The
Borrower may not assign any of its rights or obligations under the Loan
Documents without the prior written consent of (A) in the case of the Loan
Documents referred to in Section 10.07, the Agent and (B) in the case of any of
the other Loan Documents, each Bank, and no assignment of any such obligation
shall release the Borrower therefrom unless the Agent or each Bank, as
applicable, shall have consented to such release in a writing specifically
referring to the obligation from which the Borrower is to be released.
70
(ii) Each Bank may from time to time assign any or all of its rights
and obligations under the Loan Documents to one or more Persons, without
the consent of the Borrower; provided that, except in the case of the grant
of an assignment to a Federal Reserve Bank (which may be made without
condition or restriction), no such assignment shall be effective unless (A)
the assignment is consented to by (unless an Event of Default specified in
Section 16(g) or 16(h) of the Lease exists) the Agent, (B) the assignment
is consented to by each Issuing Bank, (C) the assignment is to a Bank or an
Eligible Assignee or an Affiliate of a Bank or an Eligible Assignee or is
consented to by the Borrower (unless an Event of Default exists), which
consent shall not be unreasonably withheld or delayed, (D) in the case of a
partial assignment, after giving effect thereto, the aggregate amount of
the Commitment and the outstanding principal amount of the Loans and
Unreimbursed Drawings of both the assignor and the assignee shall be not
less than $5,000,000, (E) the assignment shall involve the assignment of a
fixed percentage of all of the assignor's rights and obligations under the
Loan Documents, (F) a Notice of Assignment with respect to the assignment,
duly executed by the assignor and the assignee, shall have been given to
the Borrower and the Agent, (G) in the case of an assignment of a
Registered Note, such Registered Note shall have been surrendered for
registration of assignment duly endorsed by (or accompanied by a written
instrument of assignment duly executed by) the Registered Holder and such
assignment shall have been recorded on the Register and (H) except in the
case of an assignment by the Bank that is the Agent, the Agent shall have
been paid an assignment fee of $3,500. Upon any effective assignment, the
assignor Bank shall be released from the obligations so assigned and, in
the case of an assignment of all of its Loans, Unreimbursed Drawings and
Commitment, shall cease to be a Bank. In the event of any effective
assignment by a Bank, the Borrower shall, against (except in the case of a
partial assignment) receipt of the existing Note of the assignor Bank,
issue a new Note to the assignee Bank.
(iii) Notwithstanding anything to the contrary contained herein, any
Bank (a "Granting Bank") may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing from time to time by the Granting
Bank to the Agent and the Borrower, the option to fund all or any part of
any Loan that such Granting Bank would otherwise be obligated to fund
pursuant to this Agreement; provided that (A) nothing herein shall
constitute a commitment by any SPC to make any Loan, and (B) nothing herein
shall excuse any Granting Bank from its obligations hereunder. The funding
of a Loan by an SPC hereunder shall utilize the Commitment of the Granting
Bank to the same extent, and as if, such Loan were funded by such Granting
Bank. Each party hereto hereby agrees that no SPC shall be liable for any
indemnity or similar payment obligation under this Agreement for which a
Bank would otherwise be liable for so long as, and to the extent, the
Granting Bank provides such indemnity or makes such payment. In furtherance
of the foregoing, each Bank hereby agrees (which agreement shall survive
the termination of this Agreement) that, prior to the date that is one year
and one day after the payment in full of all outstanding commercial paper
or other senior indebtedness of any SPC, it will not institute against, or
join any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under
the laws of the United States or any State thereof. In addition,
notwithstanding anything to the contrary contained in this Section
11.09(a)(iii), any SPC may, with prior notice to,
71
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 Bank or to any financial
institutions (consented to by the Borrower and the Agent) providing
liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Loans. This Section 11.09(a)(iii) may
not be amended without the prior written consent of each Granting Bank, all
or any part of whose Loans are being funded by an SPC at the time of such
amendment. Notwithstanding the foregoing provisions of this Section
11.09(a)(iii), (1) an SPC shall not be deemed to be a Bank and shall have
no rights under this Agreement except as provided in this Section
11.09(a)(iii), and in particular, but not by way of limitation, shall have
no rights to compensation for increased costs or other payments pursuant to
Section 2.13, 9.02 or 9.03, (2) the Granting Bank's obligations under this
Agreement (including its Commitment to the Borrower hereunder) shall remain
unchanged, (3) the Granting Bank shall remain solely responsible to the
other parties hereto for the performance of such obligations, (4) the
Granting Bank shall remain the holder of any Notes for all purposes of this
Agreement, (5) the Borrower, the Agent, the Issuing Banks and the other
Banks shall continue to deal solely and directly with the Granting Bank in
connection with such Granting Bank's rights and obligations under this
Agreement, and (6) the Granting Bank shall indemnify and hold the Borrower
and its Affiliates harmless from and against any and all liabilities,
obligations, losses, damages, penalties,actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be
incurred or shall arise as a result of any grant to an SPC contemplated
hereunder.
(b) Participations. Each Bank may from time to time sell or otherwise grant
participations in any or all of its rights and obligations under the Loan
Documents without the consent of the Borrower, the Agent, any Issuing Bank or
any other Bank. In the event of any such grant by a Bank of a participation,
such Bank's obligations under the Loan Documents to the other parties thereto
shall remain unchanged, such Bank shall remain solely responsible for the
performance thereof, and the Borrower, the Agent, the Issuing Banks and the
other Banks may continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations thereunder. A Bank may not
grant to any holder of a participation the right to require such Bank to take or
omit to take any action under the Loan Documents, except that a Bank may grant
to any such holder the right to require such holder's consent to (i) reduce the
principal of or the rate of interest on such Bank's Loans or Unreimbursed
Drawings or the fees payable to such Bank hereunder, (ii) postpone any date
fixed for any payment of principal of or interest on such Bank's Loans or
Unreimbursed Drawings or the fees payable to such Bank hereunder, (iii) permit
any Loan Party to assign any of its obligations under the Loan Documents to any
other Person or (iv) release any Collateral from the Security Interest except as
required or contemplated by the Loan Documents. Each holder of a participation
in any rights under the Loan Documents, if and to the extent the applicable
participation agreement so provides, shall, with respect to such participation,
be entitled to all of the rights of a Bank as fully as though it were a Bank and
may exercise any and all rights of set-off with respect to such participation as
fully as though the Borrower were directly indebted to the holder of such
participation for Loans and Unreimbursed Drawings in the amount of such
participation; provided, however, that no holder of a participation shall be
entitled to any amounts that would otherwise be payable to it under Section
2.13, 9.02 or 9.03 with respect to its participation unless such amounts would
have
72
been payable to the Bank that granted such participation if such participation
had not been granted. Each Bank selling or granting a participation, including a
participation sold pursuant to Section 11.08, shall indemnify the Borrower and
the Agent for any Taxes and Liabilities that they may sustain as a result of
such Bank's failure to withhold and pay any Taxes applicable to payments by such
Bank to its participant in respect of such participation.
Section 11.10. Governing Law. The rights and duties of the Borrower, the
Agent, the Banks and the Issuing Banks under this Agreement and the Notes
(including matters relating to the Maximum Permissible Rate), and the other Loan
Documents, shall pursuant to New York General Obligations Law Section 5-1401, be
governed by the law of the State of New York.
Section 11.11. Judicial Proceedings; Waiver of Jury Trial. Any judicial
proceeding brought against the Borrower with respect to any Loan Document
Related Claim may be brought in any court of competent jurisdiction in the City
of New York, and, by execution and delivery of this Agreement, the Borrower (a)
accepts, generally and unconditionally, the nonexclusive jurisdiction of such
courts and any related appellate court and irrevocably agrees to be bound by any
judgment rendered thereby in connection with any Loan Document Related Claim and
(b) irrevocably waives any objection it may now or hereafter have as to the
venue of any such proceeding brought in such a court or that such a court is an
inconvenient forum. The Borrower hereby waives personal service of process and
consents that service of process upon it may be made by certified or registered
mail, return receipt requested, at its address specified or determined in
accordance with the provisions of Section 11.01(a)(ii), and service so made
shall be deemed completed on the third Business Day after such service is
deposited in the mail. Nothing herein shall affect the right of the Agent, any
Bank, any Issuing Bank or any other Indemnified Person to serve process in any
other manner permitted by law or shall limit the right of the Agent, any Bank,
any Issuing Bank or any other Indemnified Person to bring proceedings against
the Borrower in the courts of any other jurisdiction. Any judicial proceeding by
the Borrower against the Agent, any Bank or any Issuing Bank involving any Loan
Document Related Claim shall be brought only in a court located in, in the case
of the Agent, Los Angeles, California and, in the case of any Bank or Issuing
Bank, the jurisdiction in which such Bank's or Issuing Bank's (as the case may
be) principal United States office is located. THE BORROWER, THE AGENT, EACH
BANK AND EACH ISSUING BANK HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING ANY LOAN DOCUMENT RELATED CLAIM.
Section 11.12. LIMITATION OF LIABILITY. NEITHER THE AGENT NOR THE BANKS
NOR THE ISSUING BANKS NOR ANY OTHER INDEMNIFIED PERSON SHALL HAVE ANY LIABILITY
WITH RESPECT TO, AND THE BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE
FOR, ANY SPECIAL, INDIRECT OR CONSEQUENTIAL, AND, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, PUNITIVE DAMAGES SUFFERED BY THE BORROWER IN CONNECTION WITH ANY
LOAN DOCUMENT RELATED CLAIM.
Section 11.13. Process Agent. The Borrower hereby agrees that service of
all writs, process and summonses in any such suit, action or proceeding brought
in the State of New York may be made upon CT Corporation, presently located at
111 Eighth Avenue, New York, New
73
York 10011, U.S.A. (the "Process Agent"), and the Borrower hereby confirms and
agrees that the Process Agent has been duly and irrevocably appointed as its
agent and true and lawful attorney-in-fact in its name, place and stead to
accept such service of any and all such writs, process and summonses, and agrees
that the failure of the Process Agent to give any notice of any such service of
process to the Borrower shall not impair or affect the validity of such service
or of any judgment based thereon.
Section 11.14. Severability of Provisions. Any provision of the Loan
Documents that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by Applicable Law, the Borrower hereby
waives any provision of Applicable Law that renders any provision of the Loan
Documents prohibited or unenforceable in any respect.
Section 11.15. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto were upon the same instrument.
Section 11.16. Survival of Obligations. Except as otherwise expressly
provided therein, the rights and obligations of the Borrower, the Agent, the
Banks, the Issuing Banks and the other Indemnified Persons under the Loan
Documents shall survive the Repayment Date and the termination of the Security
Interest.
Section 11.17. Entire Agreement. This Agreement, the Notes and the other
Loan Documents embody the entire agreement among the Borrower, the Agent, the
Banks and the Issuing Banks relating to the subject matter hereof and supersede
all prior agreements, representations and understandings, if any, relating to
the subject matter hereof.
Section 11.18. Successors and Assigns. All of the provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
Section 11.19. No Fiduciary Relationship Established By Loan Documents.
The relationship between the Borrower and the Banks is that of DEBTOR and
CREDITOR. The Loan Documents are not intended to, and do not, establish a
FIDUCIARY relationship, nor does a FIDUCIARY relationship otherwise exist,
between the Borrower on the one hand, and the Agent, the Banks and the Issuing
Banks, on the other hand. The parties hereto have dealt at arm's length in
negotiating the Loan Documents.
Section 11.20. No Recourse to Affiliates. This Agreement is solely and
exclusively among the Borrower, the Agent, the Banks and the Issuing Banks, and
any obligations created herein shall be the sole obligations of the parties
hereto. No party shall have recourse to any parent, subsidiary, affiliate,
director or officer, as such, of any other party for performance of said
obligations unless the obligations are assumed in writing by the Person against
whom recourse is sought.
74
Section 11.21. Confidential Information. Notwithstanding anything to the
contrary contained in this Agreement, each party to any Loan Document agrees
that all documents, agreements or other information received by it pursuant to
this Agreement or any other Loan Document that was, at the time of its delivery,
identified in writing by any party hereto as being confidential will be held by
such party in confidence in accordance with such party's customary procedures
for handling confidential information. It is understood that each party to any
Loan Document consistent with any such procedures, may disclose such
confidential information, or portions thereof:
(i) in the case of any Bank, to any bona fide permitted prospective
transferee or participant in connection with any contemplated assignment or
grant of a participation; provided, that such transferee or participant (as the
case may be) is aware of the confidential nature of such information in
accordance with the terms of this Section 11.21;
(ii) to the extent necessary or appropriate to comply with the request of,
or as otherwise customarily disclosed to, any Governmental Entity or
representatives thereof;
(iii) to any Related Party of such Person and those of any Subsidiary or
Affiliate of such Person;
(iv) to the extent necessary or appropriate to comply with any subpoena or
other court process or in connection with any litigation or legal proceeding but
only after giving each party hereto the opportunity to obtain an appropriate
protective order;
(v) to such Person's independent auditors and accountants, counsel, and
other professional advisers in the course of their respective duties;
(vi) to the extent necessary to comply with any Applicable Law;
(vii) in the enforcement of such Person's rights, as applicable, hereunder,
or any other Loan Document during the continuance of an Event of Default; and
(viii) which is, or after delivery to such Person becomes, otherwise
publicly known or generally available to the public other than as a result of a
violation of this Section 11.21 by such Person.
Section 11.22. Registered Notes. A Bank that is a Non-US Bank and that has
complied with Section 2.13(d)(i)(A) may have its Notes issued as Registered
Notes, and for this purpose the Agent shall cause to be maintained a Register.
Once issued, Registered Notes may not be exchanged for Notes that are not
Registered Notes and the ownership of Registered Notes, and of the Loans and
Unreimbursed Drawings evidenced thereby, may be transferred only in accordance
with the provisions of Section 11.09(a)(ii)(G).
[The remainder of this page has been intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers all as of the Agreement Date.
AES EASTERN ENERGY, L.P.
By: AES NY, L.L.C., its general partner
By______________________________
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.,
as Agent and Issuing Bank
By______________________________
Name:
Title:
S-1
Banks
UNION BANK OF CALIFORNIA, N.A.
By______________________________
Name:
Title:
BAYERISCHE HYPO- UND VEREINSBANK AG,
NEW YORK BRANCH
By______________________________
Name:
Title:
THE SANWA BANK LIMITED
By______________________________
Name:
Title:
Agreement Date: April 10, 2001
S-2