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FIRST AMENDED AND RESTATED CREDIT AGREEMENT
dated as of October 15, 1996
between
LYON CREDIT CORPORATION,
as Lender,
and
BP HYDRO FINANCE PARTNERSHIP,
as Borrower
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TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS.....................................................2
1.1 Certain Defined Terms...........................................2
1.2 Accounting Terms; Utilization of GAAP for Purposes
of Calculations under Agreement................................24
1.3 Other Definitional Provisions..................................24
SECTION 2 AMOUNTS AND TERMS OF THE LOANS.................................24
2.1 The Loans......................................................24
2.2 Conditions and Terms Specific to the Senior Loan...............25
2.3 Conditions and Terms Specific to the Additional
Credit Facility................................................26
2.4 Interest.......................................................28
2.5 Fees...........................................................30
2.6 Payments and Prepayments.......................................30
2.7 Term of this Agreement.........................................34
2.8 Borrower's Loan Account and Statements.........................34
2.9 Capital Adequacy, Taxes and Other Adjustments..................35
SECTION 3 CONDITIONS TO LOANS............................................36
3.1 Conditions Precedent...........................................36
3.2 Conditions Precedent for the Benefit of Lender.................45
3.3 Location of Closing............................................45
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BORROWER.....................45
4.1 Organization, Business and Qualification.......................45
4.2 Power and Authorization........................................46
4.3 Financial Condition............................................47
4.4 Suits, Actions, Proceedings and Adverse Facts..................47
4.5 Title to Borrower Collateral; Liens............................47
4.6 Governmental Requirements......................................48
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4.7 Employee Benefit Plans.........................................48
4.8 Taxes..........................................................49
4.9 Chief Executive Office.........................................49
4.10 Environmental Matters..........................................49
4.11 Burdensome Restrictions; Other Contracts.......................49
4.12 Labor Matters..................................................49
4.13 Permits........................................................50
4.14 Disclosure.....................................................50
4.15 Material Agreements............................................50
4.16 No Default.....................................................51
4.17 Certain Fees...................................................51
4.18 Use of Proceeds and Margin Security............................51
4.19 Compliance with Governmental Requirements......................52
4.20 Insurance......................................................52
4.21 Projects.......................................................52
4.22 Capital Calls..................................................53
4.23 No Maintenance Liabilities.....................................53
4.24 Indebtedness...................................................53
4.25 Accounts Receivable............................................53
SECTION 5 AFFIRMATIVE COVENANTS AND AGREEMENTS OF BORROWER...............53
5.1 Compliance with Governmental Requirements......................53
5.2 Access.........................................................53
5.3 Notices by Governmental Authority; Fire and
Casualty Losses, etc...........................................54
5.4 Borrower Revenues..............................................54
5.5 No Lender Liability............................................54
5.6 Payment of Taxes, Fees and Claims..............................55
5.7 Financial Statements and Other Reports.........................55
5.8 Insurance......................................................58
5.9 Continuance of Business........................................58
5.10 Perfection and Preservation of Liens...........................58
5.11 Agent..........................................................59
5.12 Employee Benefit Plans.........................................59
5.13 Authorized Officers............................................59
5.14 Self-Certification.............................................59
5.15 Further Assurances.............................................60
5.16 All Necessary Action...........................................60
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5.17 Use of Proceeds................................................60
5.18 Security Documents.............................................60
5.19 Debt Service Reserve Account...................................60
5.20 Other Financial Covenants......................................61
5.21 Additional Work Actions........................................61
5.22 Enforcement of Rights..........................................61
5.23 Change of Chief Executive Office...............................61
SECTION 6 NEGATIVE COVENANTS OF BORROWER.................................61
6.1 No Liens.......................................................62
6.2 Restriction on Fundamental Changes.............................62
6.3 Transactions with Affiliates...................................62
6.4 Changes to Material Agreements.................................62
6.5 Contingent Obligations.........................................62
6.6 Indebtedness...................................................63
6.7 Security Documents.............................................63
6.8 Borrower Revenues..............................................63
SECTION 7 RIGHTS AND REMEDIES OF LENDER..................................63
7.1 Acceleration...................................................63
7.2 Additional Remedies of Lender..................................64
7.3 Application of Proceeds........................................65
7.4 Notices........................................................65
7.5 Funds of Lender................................................66
7.6 No Waiver or Exhaustion........................................66
SECTION 8 GENERAL TERMS AND CONDITIONS...................................67
8.1 Expenses and Attorneys' Fees...................................67
8.2 Indemnity by Borrower..........................................68
8.3 Notice and Defense of Claim....................................70
8.4 Amendments and Waivers.........................................70
8.5 Retention of Borrower Documents................................71
8.6 Notices........................................................71
8.7 Survival of Representations, Warranties, Covenants
and Certain Agreements.........................................72
8.8 Failure or Indulgence Not Waiver; Remedies Cumulative..........73
8.9 Marshaling; Payments Set Aside.................................73
8.10 Independence of Covenants......................................73
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8.11 Severability...................................................73
8.12 Headings.......................................................74
8.13 Applicable Law.................................................74
8.14 Successors and Assigns.........................................74
8.15 No Fiduciary Relationship or Partnership.......................74
8.16 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.................74
8.17 WAIVER OF JURY TRIAL...........................................75
8.18 Counterparts; Effectiveness....................................76
8.19 Assignment and Participation...................................76
8.20 Reproduction of Documents......................................76
8.21 Controlling Agreement..........................................77
8.22 Termination of Commitment......................................77
8.23 Entire Agreement...............................................77
8.24 Confidentiality................................................78
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EXHIBIT 1.1 Descriptions of Projects
EXHIBIT 1.2 Form of Disbursement Instructions
EXHIBIT 1.3 Pro Forma Cash Flow Projections
EXHIBIT 1.5 Form of Security Agreement
EXHIBIT 1.6 Form of Note
EXHIBIT 2.1(a) Request for Advance
EXHIBIT 2.1(b) Receipt for Advance
EXHIBIT 3.1 Form of Assignment
EXHIBIT 3.2 Form of Consent to Assignment
EXHIBIT 4.1 Foreign Jurisdictions
EXHIBIT 4.2 Consents and Waivers
EXHIBIT 4.3 Financing Statement Offices and Locations
EXHIBIT 4.15 Material Agreements
EXHIBIT 4.25 Accounts Receivable
EXHIBIT 5.7 Form of Certificate of Authorized Officer
EXHIBIT 5.21 Report of Independent Engineer
EXHIBIT 6.5 Contingent Obligations
EXHIBIT 6.6 Indebtedness
SCHEDULE I Applicable Permits
SCHEDULE II Articles of Incorporation and Partnership Agreements
SCHEDULE III Initial Disbursement and Closing Costs
SCHEDULE IV Project Documents
SCHEDULE V Schedule of Exceptions
SCHEDULE VI Capital Leases
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FIRST AMENDED AND RESTATED CREDIT AGREEMENT
This FIRST AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"),
dated as of October 15, 1996, is between LYON CREDIT CORPORATION, a Delaware
corporation ("Lender"), with offices at 1266 East Main Street, Stamford,
Connecticut 06902, and BP HYDRO FINANCE PARTNERSHIP, a Utah general partnership
("Borrower"), with offices at 111 West North Bend Way, P.O. Box 1029, North
Bend, Washington 98045 and amends and restates the Credit Agreement, dated as of
August 22, 1990, by and between Borrower and The Fuji Bank, Limited, acting
through its Los Angeles agency ("Fuji Bank"), as amended by Amendment No. 1,
dated as of December 23, 1992, between Borrower and Fuji Bank, and as assigned
by Fuji Bank to Lender pursuant to the Assignment, Assumption and Note Purchase
Agreement, dated as of the date hereof (the "Assignment Agreement"), between
Fuji Bank and Lender (such Credit Agreement, as so amended and assigned, the
"Original Credit Agreement").
RECITALS
WHEREAS, pursuant to the Original Credit Agreement, Borrower issued a
promissory note, dated August 22, 1990 and amended and restated December 23,
1992 (the "Fuji Note"), in the initial principal amount of fifteen million seven
hundred fifty thousand Dollars ($15,750,000);
WHEREAS, the indebtedness of Borrower evidenced by the Fuji Note is
secured by, among other things, certain partnership interests and certain
capital stock of the Affiliates (as defined below), all of the ownership
interests of the Project Owners (as defined below) Borrower in the Projects (as
defined below) and certain contract rights relating to the Projects (the
security for Borrower's indebtedness, collectively, the "Fuji Security");
WHEREAS, pursuant to a letter agreement, dated September 16, 1996,
between Fuji Bank and CHI West, Inc. ("CHI West"), an affiliate of Borrower,
Fuji Bank offered to sell or assign the Fuji Note, the Original Credit Agreement
and the Fuji Security to CHI West or to its designee;
WHEREAS, CHI West designated Lender as its designee to purchase the
Fuji Note and to be the assignee of the Original Credit Agreement and the Fuji
Security;
WHEREAS, pursuant to the Assignment Agreement, Lender has purchased
the Fuji Note and Fuji Bank has assigned to Lender all of its right, title and
interest in, to and under the Original Credit Agreement and the Fuji Security;
WHEREAS, Lender and Borrower wish to amend and restate in its entirety
the Original Credit Agreement to reflect, among other things, the purchase of
the Fuji Note, the assignment of the Fuji Security, the creation of additional
security in favor of Lender, and the restructuring of a portion of the
indebtedness evidenced by the Fuji Note as the Senior Loan (as defined below)
and the Additional Credit Facility (as defined below); and
WHEREAS, simultaneously with the execution of this Agreement, Borrower
will issue (i) an amended and restated promissory note in favor of Lender in the
principal amount of the Senior Loan Commitment (as defined below) and (ii) the
Additional Credit Facility Note (as defined below) and Lender will sell to CHI
Finance, Inc. a Delaware corporation, the balance of the indebtedness of
Borrower under the Fuji Note;
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
SECTION 1
DEFINITIONS
1.1 Certain Defined Terms.
When used herein, the following terms have the following respective
meanings:
"Accounts" means, collectively, the Debt Service Account, the Debt
Service Reserve Account and the Project Revenues Account.
"Accumulated Funding Deficiency" means a funding deficiency described
in section 302 of ERISA.
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"Additional Credit Facility" means a line of credit reserved by Lender
for the benefit of Borrower from the original indebtedness of Borrower to Fuji
Bank pursuant to the Fuji Note and secured by the Fuji Security (as assigned by
Fuji Bank to Lender) in the maximum available amount of two million Dollars
($2,000,000).
"Additional Credit Facility Note" means, collectively, each Note of
Borrower relating to the Additional Credit Facility and issued pursuant to
Section 2.3, and each other promissory note of Borrower issued in substitution
or exchange for any Additional Credit Facility Note. The Additional Credit
Facility Note shall be payable to the order of Lender, shall be in the amount of
the maximum available amount under the Additional Credit Facility and shall
provide for the repayment of principal and the payment of interest as provided
therein and herein and shall be secured by the Borrower Collateral.
"Advance" means any disbursement of principal under the Additional
Credit Facility.
"Affiliate" means (i) CHI-Idaho, Inc., a Delaware corporation, (ii)
CHI-Magic Valley, Inc., a Delaware corporation, (iii) Consolidated Hydro
Mountain States, Inc., a Delaware corporation, (iv) BP Hydro Associates, an
Idaho general partnership, and (v) Fulcrum, Inc., an Idaho corporation.
"Agency Fee" means the fee payable by Borrower to Lender on each
anniversary of the Closing Date, which fee shall be in the amount of twenty
thousand Dollars ($20,000) on the first through the third anniversary of the
Closing Date and ten thousand Dollars ($10,000) on the fourth anniversary of the
Closing Date and each anniversary of the Closing Date thereafter until all
Obligations of Borrower have been indefeasibly paid in full.
"Applicable Permit" means, with respect to any Project, any Permit,
including any zoning, environmental protection, pollution, sanitation, FERC,
public utilities commission, health, safety, siting or building Permit, (a) that
is necessary at any given time in the operation of such Project to test,
operate, maintain, repair, own or use such Project as contemplated by any
Material Agreement relating to such Project, to sell electricity therefrom, to
enter into any Material Agreement for such Project or to perform the obligations
contemplated thereby, or (b) that is necessary so that none of Borrower, any
Affiliate, Lender or any affiliate of Lender may be deemed by any Governmental
Authority to be subject to regulation under the FPA, PUHCA or any state law or
regulation respecting the rates or the financial or
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organizational regulation of electric utilities solely as a result of the
ownership or operation of any Project by the applicable Project Owner or the
sale of electricity therefrom. A list of all Applicable Permits is set forth in
Schedule I.
"Articles of Incorporation" means the documents relating to certain
Affiliates listed in Schedule II.
"Assignment Agreement" has the meaning set forth in the first
paragraph hereof.
"Assignment Fee" means the fee payable by CHI Finance to Lender on the
Closing Date in the amount of twenty-five thousand Dollars ($25,000) as
consideration for the assignment by Lender to CHI Finance of the portion of the
Fuji Note remaining after Borrower shall have executed and delivered to Lender
the Senior Loan Note and the Additional Credit Facility Note.
"Assignments" means the Collateral Assignments of Agreements, dated as
of the date hereof, by Borrower and each Affiliate, assigning to Lender such
Person's rights under the Material Agreements substantially in the form of
Exhibit 3.1.
"Authorized Officer" means, with respect to Borrower and the
Affiliates, Edward M. Stern, Neil A. Manna or any other officer of Borrower or
an Affiliate designated from time to time by written notice to Lender. Each
Authorized Officer shall be authorized to (i) execute and deliver the Loan
Documents on behalf of Borrower and the Affiliates, (ii) execute and deliver any
other agreement, document or certificate contemplated hereunder or thereunder on
behalf of Borrower and the Affiliates, and (iii) communicate with Lender and its
agents on behalf of Borrower and the Affiliates as contemplated hereunder.
"Availability Period" means the period of time from the Closing Date
until the first anniversary thereof.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as amended from time to time, or any successor statute, and all
rules promulgated thereunder.
"Barber Dam Project" means the approximately 4.1 megawatt
hydroelectric facility located in Boise, Idaho, of Fulcrum, Inc., an Idaho
corporation, as more particularly described in Exhibit 1.1.
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"Borrower Collateral" means, collectively, the Fuji Security (as
assigned to Lender pursuant to the Security Assignment Documents), the Accounts,
all assets of Borrower and the Affiliates, the Pledged Interests, certain other
items of personal or intangible property and Lender's rights with respect to any
Borrower Revenues, all as more particularly described in the Security Documents.
"Borrower Revenues" means all cash, property or other value (other
than Insurance Proceeds, Condemnation Proceeds and proceeds from any sale of
assets not required to be utilized as a prepayment pursuant to Section 2.6(c))
paid, payable, distributed or distributable to Borrower or any Affiliate from
any other Affiliate or Idaho Power and any interest therein or proceeds thereof.
"Borrowing Date" means the first Business Day of any month during the
Availability Period.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York, or Hartford, Connecticut,
are required or authorized to be closed.
"Capital Lease" means any lease of any property (whether real,
personal or mixed) that, in conformity with GAAP, a lessee would account for as
a capital lease.
"CHI Finance" means CHI Finance, Inc., a Delaware corporation.
"Closing Costs" means all amounts to be paid by Borrower on the
Closing Date as reflected on Schedule III (or thereafter, including, without
limitation, on the date of any Advance) in connection with the transactions
contemplated hereunder, including, without limitation, the following: (a) to
Lender, on account of the Assignment Fee, the Letter of Credit Fee (if any), the
Success Fee and the Work Fee; (b) to Chadbourne & Parke LLP, on account of
Lender's attorneys' fees and expenses; and (c) to the Independent Engineer, on
account of the work performed by the Independent Engineer.
"Closing Date" means the date on which the conditions precedent to the
obligations of Lender under this Agreement shall be satisfied or waived by
Lender, which date shall be agreed between Lender and Borrower and shall occur
on or before October 28, 1996; provided, that if Lender and Borrower have not
agreed on a date by October 29, 1996, then such date shall be notified to
Borrower by Lender.
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"Condemnation Proceeds" means any proceeds or payments paid or payable
by any Governmental Authority in connection with any condemnation, eminent
domain, requisition for use, compulsory acquisition or like proceeding.
"Consolidated Hydro" means Consolidated Hydro, Inc., a Delaware
corporation.
"Contingent Obligation," as applied to any Person, means any direct or
indirect contingent liability of such Person (a) with respect to any
Indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; (b) with
respect to any letter of credit issued for the account of such Person or as to
which such Person is otherwise liable for reimbursement of drawings; (c) under
interest rate agreements; or (d) under any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect
such Person against fluctuations in currency values; but excluding checks and
other negotiable instruments endorsed in the ordinary course of business.
Contingent Obligations shall include, without limitation (x) the direct or
indirect guaranty, endorsement (other than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (y) the obligation to make
take-or-pay or similar payments if required regardless of nonperformance by any
other party or parties to an agreement, and (z) any liability of such Person for
the obligations of another through any agreement to purchase, repurchase or
otherwise acquire such obligation, to provide funds for the payment or discharge
of such obligation or to maintain the solvency, financial condition or any
balance sheet item or level of income of another. The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported or, if a fixed and determined amount, the maximum amount so
guaranteed.
"Debt Service Account" has the meaning ascribed to it in the Security
Agreement.
"Debt Service Reserve Account" has the meaning ascribed to it in the
Security Agreement.
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"Debtor Relief Laws" means any applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, insolvency,
reorganization or similar laws affecting the rights or remedies of creditors
generally, including, without limitation, the Bankruptcy Code, as in affect from
time to time.
"Default" means a condition or event that, after the giving of notice
or lapse of time or both, would constitute an Event of Default if such condition
or event were not cured or removed within any applicable grace or cure period.
"Default Rate" means the Interest Rate, as the same is applicable to
any Loan or other Obligation pursuant to Section 2.4(a), plus two percent (2%)
per annum, but in no event shall such rate exceed the Maximum Rate.
"Dietrich Drop Project" means the approximately 4.7 megawatt
hydroelectric facility located in Dietrich, Idaho, of BP Hydro Associates, an
Idaho general partnership, as more particularly described in Exhibit 1.1.
"Disbursement Instructions" means each of those certain letters,
substantially in the form of Exhibit 1.2, dated as of the Closing Date from
Borrower to each Affiliate and from each Affiliate to certain Persons (including
the other Affiliates and Idaho Power) irrevocably instructing each such Person
to deposit into the Project Revenues Account for the benefit of Lender all
Borrower Revenues.
"Disbursement Agent" means Fleet National Bank or such other Person as
may from time to time be the "Disbursement Agent" under the Security Agreement.
"Dollar" and the sign "$" mean the lawful currency of the United
States of America.
"Due Inquiry" means every inquiry with any Person, in each case as is
at the time deemed reasonably necessary or desirable to ascertain or confirm the
veracity and accuracy of any matter (including, without limitation, the
inclusion or omission of any fact or circumstance which would, in Lender's
reasonable opinion, be material with respect to such matter or with respect to
Lender's interests hereunder).
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA including any Multiemployer
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Plan which (a) is maintained for employees of Borrower or any ERISA Affiliate or
(b) has at any time within the preceding six (6) years been maintained for the
employees of Borrower or any current or former ERISA Affiliate, excluding any
such plan maintained only after the last date a Person was an ERISA Affiliate.
"Environmental Claim" means any claim, liability, investigation,
notice, litigation or administrative proceeding, whether pending or threatened
pursuant to written notification, or any judgment or order relating to any
Hazardous Material asserted or threatened pursuant to written notification
against Borrower or any Affiliate or any event giving rise to liability of
Borrower or any Affiliate under any Environmental Law.
"Environmental Laws" means any and all laws, statutes, ordinances,
rules, regulations, orders, guidance or determinations of any Governmental
Authority pertaining to public health, pollution or the environment (including,
without limitation, ambient air, surface water, ground water, land surface or
subsurface strata), including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of Hazardous Materials, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials including, without
limitation, common law, the Clean Air Act, the Comprehensive Environmental,
Response, Compensation, and Liability Act of 1980 as amended by the Superfund
Amendments and Reauthorization Act of 1986, the Federal Water Pollution Control
Act, the Occupational Safety and Health Act of 1970, the Resource Conservation
and Recovery Act of 1976, the Safe Drinking Water Act, the Toxic Substances
Control Act, the Emergency Planning and Community Right to Know Act, the
Endangered Species Act, the National Environmental Policy Act, the Oil Pollution
Act, the Pollution Prevention Act, the Solid Waste Disposal Act and any other
environmental conservation or protection law of any applicable jurisdiction, all
as may be hereafter amended, modified or supplemented from time to time;
provided, that in the event any of the foregoing laws is amended, modified or
supplemented so as to broaden the scope or basis of liability of Borrower or any
Affiliate under any or all Environmental Laws, such amended, modified or
supplemented meaning shall apply subsequent to the effective date of such
amendment or modification with respect to all provisions of this Agreement; and
provided, further, that, to the extent the laws of the state in which any
property of Borrower or any Affiliate is located establish a meaning for
"hazardous substance", "release", "solid waste", "disposal" or any other term
which is broader than that specified in any of the foregoing federal laws, such
8
broader meaning shall apply to Borrower and each Affiliate for purposes of this
Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute and all rules and
regulations promulgated thereunder.
"ERISA Affiliate," as applied to Borrower, means any Person who is a
member of a group which is under common control with Borrower, which together
with Borrower is treated as a single employer within the meaning of Section
414(b) or (c) of the IRC, determined without regard to any equity or other
economic interest or benefit or any right to exercise voting power of such
interest or benefit held in the parent.
"Event of Default" means the occurrence or existence of any one or
more of the following:
(a) Borrower or an Affiliate fails (i) to pay any interest, fee or
expense set forth in this Agreement or any other Loan Document (other than
the Intercompany Notes) within three (3) Business Days of when due or
declared due, (ii) to make any payment of principal on any Loan when due or
at maturity, whether by acceleration or otherwise, or (iii) to make any
payment when due under any Letter of Credit;
(b) Borrower, an Affiliate or CHI Finance fails to perform, keep or
observe any term, provision, condition or covenant contained in this
Agreement or any other Loan Document (other than the Intercompany Notes)
(except as provided in paragraph (c) of this definition) which is required
to be performed, kept or observed by Borrower, such Affiliate or CHI
Finance and such failure shall not have been cured within thirty (30) days
(or any shorter period as may be expressly set forth in this Agreement or
such other Loan Document) after the date of such failure; provided, that if
it is reasonably possible to cure in all respects such failure, and if
Borrower, such Affiliate or CHI Finance is diligently attempting to cure
such failure, then Borrower, such Affiliate or CHI Finance shall have an
additional thirty (30) days to effect such cure;
(c) Borrower fails, or fails to cause any Affiliate to perform, keep
or observe any term, provision, condition or covenant contained in Section
5.2, 5.3, 5.4, 5.5, 5.6, 5.8, 5.9, 5.10, 5.11, 5.15, 5.16, 5.17, 5.18,
9
5.19, 5.20, 5.22 or 5.23 Section 6 of this Agreement which is required;
provided, that if Borrower shall have given notice of any such failure in
accordance with Section 5.7(f), such failure shall not become an Event of
Default until five (5) days after Lender shall have notified Borrower in
writing that such failure shall become an Event of Default after the
passage of such five (5) day period;
(d) A default or event of default shall have occurred and be
continuing with respect to any Indebtedness or Contingent Obligation of
Borrower or any Affiliate in excess of fifty thousand Dollars ($50,000);
(e) Any statement, representation, warranty, report, financial
statement or certificate set forth in this Agreement or in any other Loan
Document or made or delivered by any Authorized Officer to Lender (i) is
false or misleading in any material respect on the date made or (ii) is
intentionally misrepresented in any respect, whether material or otherwise;
(f) Any event, occurrence or condition that has a Material Adverse
Effect;
(g) The (i) institution by Borrower, an Affiliate or CHI Finance of
any judicial proceeding intended to effect a suspension of any right or
power of Lender under any Loan Document, or causing Borrower, any Project
or any other Borrower Collateral to become subject to the control or
custody of any court, or (ii) rendering of a judgment (other than a
judgment covered under paragraph (i) below) not stayed or appealed (with
respect to any judicial proceeding not instituted by Borrower, an Affiliate
or CHI Finance) which shall not be discharged or stayed within ten (10)
days after entry thereof, and such judgment shall have the effect of
suspending any material right or power of Lender under any Loan Document,
or causing Borrower, any Project or any other Borrower Collateral to become
subject to the control or custody of any court;
(h) (i) Borrower or any Affiliate does not have good title to its
interests in the Borrower Collateral; (ii) any Project, Pledged Interest or
other Borrower Collateral is attached, seized, levied upon or subjected to
a writ or distress warrant and any such action shall remain unbonded,
undischarged or unstayed for a period in excess of the earlier of ten (10)
days or five (5) days prior to the date of any proposed sale
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thereof; (iii) any Project, other Borrower Collateral or any other material
asset of Borrower or any Affiliate comes within the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors for a
period in excess of ten (10) days; or (iv) Lender does not have or ceases
to have a valid and perfected first priority Lien in any of the Borrower
Collateral (subject to Permitted Liens); provided, that if the provisions
of both this paragraph (h) and paragraph (i) below apply, then the
forty-five (45) day period in paragraph (i) shall apply instead of the
period provided for herein;
(i) An application is made by any Person other than Borrower or any
Affiliate for the appointment of a receiver, trustee or custodian for any
asset of Borrower or any Affiliate and the same is not dismissed within
forty-five (45) days after the application therefor; any order, judgment,
decree or petition under any section or chapter of the Debtor Relief Laws
is filed against Borrower or any Affiliate or any case or proceeding is
filed against Borrower or any Affiliate for its dissolution or liquidation
(as the case may be), and such order, judgment, decree or petition is not
dismissed within forty-five (45) days after the entry or filing thereof;
(j) An application is made by Borrower or any Affiliate for the
appointment of a receiver, trustee or custodian for any assets of Borrower
or any Affiliate; a petition under any section or chapter of the Debtor
Relief Laws is filed by Borrower or any Affiliate; Borrower or any
Affiliate makes an assignment for the benefit of creditors; any case,
certificate or proceeding is filed by Borrower or any Affiliate for the
dissolution or liquidation (as the case may be) of Borrower or any
Affiliate or Borrower or any Affiliate becomes insolvent or admits in
writing its inability to pay its debts as they mature;
(k) Any Project Owner is enjoined, restrained or in any way prevented
by court order or order of any other Governmental Authority from owning any
Project and such order shall not be stayed or otherwise lifted within
thirty (30) days after entry thereof;
(l) (i) Any Material Agreement becomes unenforceable or is terminated
by operation of law or by any party thereto (other than as a result of its
full performance or discharge) or the enforceability of any such agreement
is challenged by any Person (other than by Lender or any affiliate of
Lender) and such challenge, in Lender's reasonable determination, is likely
11
to prevail, the result of any of which is likely to have a Material Adverse
Effect (in such event, Lender shall provide Borrower a written explanation
of the basis for any action Lender is taking or intends to take with
respect to such Event of Default; provided, that neither the form nor the
substance of such explanation, nor Borrower's failure to receive the same,
shall in any way affect the right of Lender to exercise any of its remedies
under this Agreement or the other Loan Documents with respect to such Event
of Default or grant Borrower or any Affiliate any right to contest the
same); or (ii) a default or an event of default occurs and remains
unremedied beyond any applicable cure period under any Material Agreement
and the effect of such default or event of default gives another party to
such agreement the right to terminate the same either immediately or after
any applicable notice or lapse of time, the result of which, in Lender's
reasonable opinion, is likely to have a Material Adverse Effect;
(m) Any money judgment, writ or warrant of attachment in excess of
fifty thousand Dollars ($50,000) in the aggregate, which is or are not
adequately covered by insurance of Borrower, is entered against Borrower or
any Affiliate and is not paid, discharged or stayed within the earlier of
ten (10) days after entry thereof or five (5) days prior to the date of any
proposed sale thereunder; (n) The loss, suspension or revocation of, or
failure to renew, any Applicable Permit now held or hereafter acquired by
or in connection with any Project, if such loss, suspension, revocation or
failure to renew (together with all other such losses, suspensions,
revocations and failures) is likely, in Lender's reasonable opinion, to
have a Material Adverse Effect;
(o) Any Material Agreement is amended without the prior written
consent of Lender and the result of such amendment, in Lender's reasonable
opinion, is likely to have a Material Adverse Effect; and
(p) (1) if Borrower or any ERISA Affiliate has in effect any Employee
Benefit Plan, other than a Multiemployer Plan, notice of intent to
terminate such Employee Benefit Plan shall be filed under Section 4041(c)
of ERISA or the PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer such Employee
Benefit Plan under circumstances that would result in Borrower or an
Affiliate becoming liable to pay under Title IV of ERISA to the PBGC or
12
with respect to such Employee Benefit Plan an amount or amounts aggregating
in excess of $50,000, (2) Borrower or any ERISA Affiliate incurs a
liability to a Multiemployer Plan as a result of a withdrawal or partial
withdrawal therefrom in an amount in excess of $50,000, (3) a condition
shall exist by reason of which the PBGC would be entitled to institute
proceedings to terminate any such Employee Benefit Plan pursuant to the
provisions of Section 4042(a)(1), 4042(a)(2) or 4042(a)(3) of ERISA, as
reasonably determined in good faith by Lender, (4) any such Employee
Benefit Plan shall incur an Accumulated Funding Deficiency, whether or not
waived within the meaning of Section 412 of the IRC, in excess of $50,000,
or (5) any Reportable Event or Prohibited Transaction shall occur with
respect to any such Employee Benefit Plan that could reasonably be expected
to result in Borrower or an Affiliate becoming liable to the PBGC or any
other Person in an amount or amounts aggregating in excess of $50,000, and
any such event specified in any of clauses (1), (2), (3), (4) and (5) above
shall continue for ten (10) days.
"Excess Interest" has the meaning ascribed thereto in Section 2.4(c).
"FERC" means the Federal Energy Regulatory Commission and any
successor thereto.
"Final Maturity Date" means the date that is the twelfth (12th)
anniversary of the Closing Date.
"Financial Statements" means the financial statements required to be
delivered to Lender pursuant to Section 5.7.
"Financing Statements" means the Form UCC-1 and Form UCC-3 financing
statements to be filed with the appropriate offices for the purpose of
perfecting Lender's Liens in the Borrower Collateral.
"Fiscal Quarter" means any of the three (3) month periods ending on
the last day of March, June, September and December, respectively, of each
calendar year.
"Fiscal Year" means the twelve (12) month period beginning on the
first day of July and ending on June 30 of the next calendar year.
13
"Floating U.S. Treasury Note Rate" means the yield, as reported in the
Wall Street Journal on the date of determination, for U.S. Treasury Notes
maturing as near as possible to the third (3d) anniversary of such date of
determination.
"FPA" means the Federal Power Act, as amended, and all rules and
regulations promulgated thereunder.
"Fuji Bank" has the meaning set forth in the first paragraph hereof.
"Fuji Note" has the meaning set forth in the first recital hereto.
"Fuji Security" has the meaning set forth in the second recital
hereto.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board (or any successor authority) that are
applicable to the circumstances as of the date of determination.
"Governmental Authority" means the United States, any state, any
county, any city or any other political subdivision in which Borrower or any
Affiliate operates, any Project or other Borrower Collateral is located, and any
other political subdivision, agency, authority, board, bureau, commission,
court, department, district or other instrumentality of any of the foregoing,
including, without limitation, FERC and the Environmental Protection Agency.
"Governmental Requirements" means, as of the date of determination
thereof, all applicable laws, ordinances, rules, regulations, judgments,
interpretations, policy orders, decrees or similar forms of decision of any
Governmental Authority.
"Hazardous Material" means, without limitation, any of the following
in any solid, liquid or gas form, from whatever source: (a) substances that are
defined or listed in, or otherwise classified pursuant to, any applicable laws
or regulations as "hazardous substances", "hazardous materials", "hazardous
wastes", "toxic substances" or any other formulation intended to define, list or
classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity or "EP
14
toxicity"; (b) oil, petroleum or petroleum-derived substances, natural gas,
natural gas liquids or synthetic gas and drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (c) any flammable substances or
explosives or any radioactive materials; and (d) asbestos in any form or
electrical equipment which contains any oil or dielectric fluid containing
levels of polychlorinated biphenyls in excess of fifty (50) parts per million.
"Indebtedness," as applied to any Person, means (a) any indebtedness
for borrowed money; (b) that portion of any obligation with respect to a Capital
Lease that is properly classified as a liability on a balance sheet in
conformity with GAAP; (c) any note payable and draft accepted representing an
extension of credit whether or not representing an obligation for borrowed
money; (d) any obligation owed for all or any part of the deferred purchase
price of property or services if the purchase price is due more than six (6)
months from the date the obligation is incurred or is evidenced by a note or
similar written instrument; and (e) any indebtedness secured by any Lien on any
property or asset owned or held by such Person regardless of whether the
indebtedness secured thereby shall have been assumed by such Person or is
nonrecourse to the credit of such Person. Obligations under interest rate
agreements constitute Contingent Obligations and not Indebtedness.
"Idaho Power" means Idaho Power Company, a Maine corporation.
"Independent Engineer" means Acres International or such other
qualified and experienced engineer and/or any replacement or successor engineer
as reasonably selected by Lender.
"Initial Disbursement" means an amount equal to or greater than the
sum of the following amounts (all as detailed more fully in Schedule III): (a)
the amount required to purchase the Fuji Note from Fuji Bank; (b) the aggregate
amount of all Closing Costs; (c) the amount required to fund the Debt Service
Reserve Account to the level required by the Security Agreement and (d) the
amount necessary to secure fully the payment of any Letter of Credit then
outstanding.
"Initial U.S. Treasury Note Rate" means the yield, as reported in the
Wall Street Journal, on the Closing Date for U.S. Treasury Notes maturing as
near as possible to the average life of the Senior Loan as determined by the Pro
15
Formas taking into account the scheduled amortization of the Senior Loan and
anticipated mandatory prepayments.
"Insurance Policy" means any policy evidencing insurance coverage
required to be maintained pursuant to any Material Agreement.
"Insurance Proceeds" means, collectively, proceeds or payments paid or
payable by or through the issuer of any Insurance Policy as a result of the
occurrence of any event covered under such Insurance Policy. Insurance Proceeds
shall not include (a) any payment made by the insured as a result of the
occurrence of such an event, whether such payment is as a deductible, co-payment
or otherwise, or (b) any refund of any premium.
"Intercreditor Agreement" means the Intercreditor and Collateral
Sharing Agreement, dated as of the date hereof, between Lender and CHI Finance.
"Intercompany Notes" means, collectively, the BP Hydro Note (as
defined in the Security Agreement) and the Fulcrum Note (as defined in the
Security Agreement).
"Interest Rate" means (i) with respect to the Senior Loan (a) from the
Closing Date through the day before the seventh (7th) anniversary of the Closing
Date, the Initial U.S. Treasury Note Rate plus three hundred ninety (390) basis
points per annum and (b) from the seventh (7th) anniversary of the Closing Date
through the Final Maturity Date, the Floating U.S. Treasury Note Rate plus three
hundred ninety (390) basis points per annum, as recalculated on the date that is
ten (10) days prior to the date of each Scheduled Installment, and (ii) with
respect to each Advance under the Additional Credit Facility, (a) from the
Borrowing Date for such Advance through the day before the seventh (7th)
anniversary of such Borrowing Date, the U.S. Treasury Note Rate for the
Additional Credit Facility plus three hundred ninety (390) basis points per
annum, and (b) from the seventh (7th) anniversary of such Borrowing Date through
the Final Maturity Date, the Floating U.S. Treasury Note Rate plus three hundred
ninety (390) basis points per annum, as recalculated on the date that is ten
(10) days prior to the date of each Scheduled Installment.
"IRC" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute and all rules and regulations promulgated
thereunder.
16
"Letter of Credit" means any letter of credit issued by Lender or its
designee for the benefit of Borrower or an Affiliate.
"Letter of Credit Fee" means a fee on the aggregate amount of Senior
Loan funds utilized as contingent collateral for a Letter of Credit pursuant to
Section 2.2(c)(Y), which fee shall equal two percent (2%) of the amount of such
undrawn funds and shall be payable on the date of issuance of such Letter of
Credit and on each anniversary thereof on which such Letter of Credit is
outstanding.
"Lien" means any mortgage, deed of trust, pledge, lien (statutory or
other), charge, encumbrance, hypothecation, assignment, preference, priority,
levy, assessment, judgment, lease, easement, security interest or claim of
whatever nature or description (including any agreement to give any of the
foregoing), including any security interest arising under conditional sale or
other title retention agreements, or any other defect, irregularity, interest in
property or cloud on title.
"Loan" or "Loans" means any loan to Borrower by Lender evidenced by a
Note.
"Loan Account" has the meaning ascribed thereto in Section 2.8(a).
"Loan Documents" means this Agreement, the Security Documents, the
Intercreditor Agreement, any Note and such other agreements, instruments and
documents (and all annexes, schedules and exhibits thereto) evidencing,
securing, pertaining to or executed in connection with any Loan as shall, from
time to time, be executed and delivered by Borrower or any other Person to
Lender pursuant to this Agreement or any other Loan Document.
"Lowline Rapids Project" means the approximately 2.8 megawatt
hydroelectric facility located in Kimberly, Idaho, of BP Hydro Associates, an
Idaho general partnership, as more particularly described in Exhibit 1.1.
"Material Adverse Effect" means (a) with respect to Borrower or any
Affiliate, the occurrence of any event or condition that individually or in the
aggregate with any other event or condition is materially adverse to Borrower's
or such Affiliate's ability to perform its obligations under any Loan Document
to which it is a party or (b) the occurrence of any event or condition that
impairs in any material respect Lender's right or ability to enforce or collect
the Obligations or any other obligation owing to Lender pursuant to any Loan
17
Document. Lender may find a Material Adverse Effect only after (a) full
consideration of any reasonably anticipated insurance or other proceeds and the
application thereof in accordance with the requirements of this Agreement, (b)
notice to Borrower of such finding, and (c) if such Material Adverse Effect is
one that is reasonably susceptible to remedy, it is not remedied within thirty
(30) days of receipt of such notice; provided, that if cure in all respects is
reasonably possible and Borrower or such Affiliate is diligently attempting to
cure such event or condition, then Borrower or such Affiliate shall have an
additional thirty (30) days to effect such cure.
"Material Agreements" means, individually or collectively, the
Partnership Agreements, the Articles of Incorporation and the Project Documents.
"Maximum Rate" has the meaning ascribed thereto in Section 2.4(c).
"Minimum Coverage Ratio" means 1.15 to 1 for the preceding twenty-four
(24) month period ending on the last day of the calendar month preceding the
date of determination and for the projected subsequent two (2) twelve (12) month
periods as forecasted in the budget submitted by Borrower and approved by
Lender, calculated by dividing (x) the preceding twenty-four (24) months' Net
Operating Cash from all Projects (assuming each of such Projects has been a
Project for at least twenty-four (24) months) by (y) debt service on the Senior
Loan for the same twenty-four (24) month period. "Multiemployer Plan" means a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA to which Borrower
or any ERISA Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions within the
preceding six (6) years.
"Net Operating Cash" means, with respect to any Project, the Borrower
Revenues earned by such Project less the aggregate amount of all sums other than
Variable Fees (as defined in each of the O&M Agreements) and the O&M Incentive
Fee then due and owing by the Project Owners less Qualified Project Expenses (as
defined in and permitted by the Security Agreement).
"Note" means the Senior Loan Note or any Additional Credit Facility
Note, substantially in the form of Exhibit 1.6, or, upon the occurrence of the
18
event specified in Section 2.2(c)(Y)(B), a Letter of Credit, and "Notes" means
all such Notes.
"O&M Agreements" shall have the meaning ascribed thereto in the
Security Agreement.
"O&M Incentive Fee" means a fee payable to the O&M Operator by the
Projects equal to an aggregate amount of one hundred thousand Dollars
($100,000), as adjusted annually at the end of each Fiscal Year by the Consumer
Price Index, less the aggregate of the Variable Fees (as defined in the O&M
Agreements).
"O&M Operator" means CHI Mountain States Operations, Inc., a Delaware
corporation.
"Obligations" means all of Borrower's and the Affiliates'
Indebtedness, liabilities and other obligations of any and every kind and nature
(including, without limitation, the principal amount of all debts, claims and
indebtedness, accrued and unpaid interest, charges, expenses, fees, costs,
attorneys' fees and other sums chargeable to Borrower or any Affiliate by Lender
and future advances made to or for the benefit of Borrower) arising under this
Agreement and the other Loan Documents.
"Partnership Agreements" means the agreements relating to Borrower and
certain of the Affiliates listed on Schedule II.
"PBGC" means the Pension Benefit Guarantee Corporation established
pursuant to Subtitle A of Title IV of ERISA or any entity succeeding to all or
part of its functions under ERISA.
"Permit" means any action, approval, consent, waiver, exemption,
variance, franchise, order, permit, authorization, right or license of or from a
Governmental Authority, including any modification or renewal of the foregoing.
"Permitted Liens" means, with respect to Borrower, any Affiliate or
any Borrower Collateral, (i) Liens for taxes not yet subject to penalties for
non-payment and Liens for taxes the payment of which is being contested as
permitted by Section 5.6; (ii) Liens resulting from any money judgment, writ or
warrant of attachment in an amount less than fifty thousand Dollars ($50,000) in
the aggregate; (iii) Lender's and Disbursement Agent's Liens; (iv) pledges or
deposits by Borrower or such Affiliate under workers' compensation laws,
19
unemployment insurance laws, social security laws or similar legislation, or
good faith deposits in connection with bids, tenders, contracts (other than for
the payment of Indebtedness), or leases or deposits to secure public or
statutory obligations of such Person or deposits of cash to secure surety,
appeal, performance or other similar bonds, or deposits as security for
contested taxes or import duties or for the payment of rent; (v) Liens imposed
by law, such as carriers', warehousemen's, materialmen's and mechanics' Liens
which are incurred in the ordinary course of business for sums not more than
thirty (30) days delinquent or which are being contested in good faith
(provided, that a reserve or other appropriate provision shall have been made
therefor); (vi) purchase money Liens of a vendor of equipment whether or not to
be included in any Project (which Liens will be extinguished upon payment in
full in accordance with the delivery terms of such equipment) and Liens arising
from capital leases of vehicles and office and testing equipment existing on the
Closing Date as set forth on Schedule VI and with respect to any of such items
which are newly acquired, which Liens shall not exceed twenty-five thousand
Dollars ($25,000) individually and two hundred fifty thousand Dollars ($250,000)
in the aggregate; and (vii) all exceptions and encroachments set forth in any
policy of title insurance with respect to any Project delivered to Lender.
"Person" means and includes an individual, a partnership, a joint
stock company, an association, a bank, a trust company, a land trust, a business
trust, a joint venture, a corporation, a trust, an unincorporated organization,
a Governmental Authority and any other entity whether or not such entity is a
legal entity.
"Pledge Agreements" means collectively each of the First Amended and
Restated Stock Pledge Agreements, the General Partner Pledge Agreements, the
Security Agreement and the First Amended and Restated General Partner Pledge
Agreements, each dated of even date herewith, between certain Affiliates, as
pledgor, and Lender, as pledgee.
"Pledged Interests" means the Intercompany Notes and the shares of
corporate stock of and partnership interests in Borrower and certain Affiliates
pledged pursuant to the Pledge Agreements and in which Lender has a security
interest pursuant to the Security Documents.
"Prior Liens" means the Liens of all lenders other than Lender to the
Projects, Borrower and any Affiliate.
20
"Pro Forma" means the pro forma cash flow projections set forth in
Exhibit 1.3.
"Prohibited Transaction" means any transaction described in Section
406 of ERISA which is not exempt by reason of Section 408 of ERISA and any
transaction described in Section 4975(c) of the IRC that is not exempt by reason
of Section 4975(c)(2) or Section 4975(d) of the IRC.
"Project" means each of the Barber Dam Project, the Dietrich Drop
Project, the Lowline Rapids Project and the Rock Creek Project and "Projects"
means all such Projects.
"Project Documents" means the agreements, documents and instruments
listed in Schedule IV.
"Project Owner" means each of BP Hydro Associates, an Idaho general
partnership, and Fulcrum, Inc., an Idaho corporation.
"Project Revenues Account" has the meaning ascribed to it in the
Security Agreement.
"PUHCA" means the Public Utility Holding Company Act of 1935, as
amended, and all rules and regulations promulgated thereunder.
"PURPA" means the Public Utility Regulatory Policies Act of 1978, as
amended, and all rules and regulations promulgated thereunder.
"Qualifying Facility" shall have the same meaning as the term
"qualifying facility" in Part 292 of FERC's regulations under PURPA.
"Reinvestment Loss Amount" means the difference between (i) the
interest which Lender would have earned on the principal amount of a prepaid
Note from the date of Borrower's prepayment of such Note through the seventh
(7th) anniversary of the Closing Date and (ii) the interest which Lender would
have earned on the principal amount of a prepaid Note from the date of
Borrower's prepayment of such Note through the seventh (7th) anniversary of the
Closing Date if the interest rate on such prepaid Note had been the Interest
Rate as recalculated on the date of prepayment.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, a withdrawal from an
21
Employee Benefit Plan described in Section 4063 of ERISA, or a cessation of
operations described in Section 4062(e) of ERISA.
"Rock Creek Project" means the approximately 1.9 megawatt
hydroelectric facility located in Twin Falls, Idaho, of BP Hydro Associates, an
Idaho general partnership, as more particularly described in Exhibit 1.1.
"Scheduled Installment" has the meaning attributed thereto in Sections
2.2(d) and 2.3(d).
"Security Agreement" means that certain First Amended and Restated
Disbursement and Pledge Agreement, dated the date hereof, among Lender, Borrower
and Disbursement Agent, securing the payment and performance of the Obligations
and evidencing a valid and enforceable security interest in and to the
collateral described therein, substantially in the form of Exhibit 1.5.
"Security Assignment Documents" means (i) the Assignment, Assumption
and Note Purchase Agreement, dated the Closing Date, between Fuji Bank and
Lender, (ii) the Assignment and Assumption Agreement, dated the Closing Date,
among Fuji Bank, Lender and Borrower and (iii) the Assignments of Deeds of
Trust, dated the Closing Date, between Fuji Bank and Lender.
"Security Documents" means, individually and collectively, any
instrument, document or agreement executed by or on behalf of Borrower or any
Affiliate to guarantee or provide collateral with respect to the Obligations and
the other transactions contemplated by the Loan Documents, including, without
limitation, the Security Assignment Documents, the Security Agreement, the
Disbursement Instructions, the Pledge Agreements, the Financing Statements and
each instrument, document and agreement executed pursuant to any Security
Document.
"Security Interest" has the meaning ascribed thereto in the Security
Agreement.
"Senior Loan" means the loan made on the Closing Date by Lender to
Borrower in the initial principal amount of the Initial Disbursement, as such
principal amount may be increased in connection with the collateralization of
any Letter of Credit.
22
"Senior Loan Commitment" means five million two hundred thousand
Dollars ($5,200,000).
"Senior Loan Note" means the Note of Borrower relating to the Senior
Loan issued pursuant to Section 2.2(a) and each other promissory note of
Borrower issued in substitution or exchange for the Senior Loan Note. The Senior
Loan Note shall be payable to the order of Lender, shall be in the amount of the
Senior Loan Commitment and shall provide for the repayment of principal and the
payment of interest as provided therein and herein and shall be secured by the
Borrower Collateral.
"Success Fee" means the fee payable by Borrower to Lender on the
Closing Date, which fee shall be in the amount of fifty percent (50%) of the
difference between one hundred twenty thousand Dollars ($120,000) and the
closing fee payable to Fuji Bank in respect of the acquisition of the Fuji Note.
"Tax Liabilities" has the meaning ascribed thereto in Section 2.9(a).
"Termination Date" has the meaning ascribed thereto in Section 2.7.
"UCC" means the Uniform Commercial Code (or any successor statute) as
in force in New York, as it may be amended from time to time, or, pursuant to
the provisions of Section 9.103 of the Uniform Commercial Code, the laws of a
different jurisdiction that govern perfection and the effect of perfection or
non-perfection of Liens in certain Borrower Collateral.
"U.S. Treasury Note Rate for the Additional Credit Facility" means the
yield, as reported in the Wall Street Journal, on the date of determination for
U.S. Treasury Notes maturing as near as possible to the average life of the
Additional Credit Facility as determined by the Pro Formas, taking into account
the scheduled amortization of the Additional Credit Facility.
"Work Fee" means the fee payable by Borrower to Lender on the date of
each Advance, which fee shall be in the amount of five thousand Dollars
($5,000). Work Fees shall compensate Lender for its internal costs incurred in
connection with the making of each such Advance. Lender's internal costs shall
include, without limitation: internal costs to undertake the credit analysis and
due diligence for each Project submitted for inclusion in the Borrower
Collateral, the cost of providing temporary paralegal and secretarial services
23
to support any closing, the use of Lender's facilities to conduct any closing,
wire transfer fees, duplicating costs, telephone costs, direct costs associated
with the use of Lender's personnel to review, document and close any Loan, and
any other direct or indirect cost which may be incurred by Lender which is not
payable by Borrower pursuant to Section 8.1.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
under Agreement. For purposes of this Agreement, all accounting terms not
otherwise defined herein have the meanings assigned to such terms in conformity
with GAAP. All financial statements and other information furnished to Lender
pursuant to Section 5.7 shall be prepared in accordance with GAAP as in effect
at the time of such preparation.
1.3 Other Definitional Provisions. References to "Sections",
"Exhibits" and "Schedules" are to Sections, Exhibits and Schedules,
respectively, of this Agreement unless otherwise specifically provided. Any term
defined herein may, unless the context otherwise requires, be used in the
singular or the plural depending on the reference. In this Agreement, "hereof,"
"herein," "hereto," "hereunder" and the like mean and refer to this Agreement as
a whole and not merely to the specific section, paragraph or clause in which the
respective word appears; words importing any gender include the other gender;
references to "writing" include printing, typing, lithography and other means of
reproducing words in a tangible visible form; the words "including," "includes",
and "include" shall be deemed to be followed by the words "without limitation";
references to agreements and other contractual instruments shall be deemed to
include subsequent amendments, assignments, and other modifications thereto, but
only to the extent such amendments, assignments and other modifications are not
prohibited by the terms of this Agreement or any other Loan Document; references
to Persons include their respective permitted successors and assigns or, in the
case of governmental Persons, Persons succeeding to the relevant functions of
such Persons; and all references to statutes and related regulations shall
include any amendments of same and any successor statutes and regulations.
SECTION 2
AMOUNTS AND TERMS OF THE LOANS
2.1 The Loans. Subject to and upon the terms and conditions herein set
forth, Lender agrees to make the Senior Loan to Borrower in an aggregate
principal amount not to exceed the Senior Loan Commitment and to make available
24
to Borrower the Additional Credit Facility. Each Loan shall mature and be due
and payable on the Final Maturity Date without further action on the part of
Lender. Once repaid, a Loan may not be reborrowed.
2.2 Conditions and Terms Specific to the Senior Loan.
(a) The Senior Loan Note. On the Closing Date, Borrower shall execute
and deliver to Lender the Senior Loan Note, which shall evidence Borrower's
obligation to pay the principal and interest noted therein. Borrower authorizes
Lender to record on Schedule II of the Senior Loan Note the payments made on the
Senior Loan. Such notations shall be prima facie evidence of the information set
forth therein; provided, that the failure by Lender to make any such notation or
an error in making any such notation shall not affect the obligations of
Borrower hereunder or under any other Loan Document. In the event of an
assignment by Lender pursuant to Section 8.19, Borrower shall, upon surrender of
the Senior Loan Note, issue a new Senior Loan Note to reflect such assignment.
(b) Disbursements. Subject to the satisfaction of the terms and
conditions set forth herein, on the Closing Date, Lender shall make available to
Borrower, and Borrower shall borrow, the Initial Disbursement and Borrower shall
deliver to Lender a receipt substantially in the form of Exhibit 2.1(b). In
addition, Lender shall make available to Borrower during the Availability Period
the amount, if any, remaining under the Senior Loan Commitment to be used as
contingent collateral for a Letter of Credit in accordance with Section
2.2(c)(Y).
(c) Permitted Use of Senior Loan.
(X) Note Funds. Except as provided in Section 2.02(c)(Y), funds
from the Senior Loan may be used only (i) to purchase the Fuji Note
from Fuji Bank, (ii) to pay Closing Costs, (iii) to fund the Debt
Service Reserve Account and (iv) to provide working capital to the
Projects. Borrower shall not use any portion of the Senior Loan for
providing working capital to Borrower or any Affiliate or for
distributions to the officers or shareholders of Borrower or any other
Person.
(Y) Letter of Credit.
(A) In addition to the purposes listed in Section
2.02(c)(X), during the Availability Period, Borrower may use up
to three hundred thousand Dollars ($300,000) of the Senior
25
Loan Commitment to provide contingent collateral for any Letter
of Credit issued to secure obligations of Borrower incurred in
the normal course of business. Borrower will not be required to
draw on such contingent collateral until the earliest of any of
the following to occur during the Availability Period: (1) any
Letter of Credit is drawn upon, (2) the occurrence of any Event
of Default and (3) the point in time when Borrower has elected to
prepay, mandatory or otherwise, the then-outstanding principal
balance of the Senior Loan.
(B) In the event a Letter of Credit is drawn upon after the
expiration of the Availability Period or without a portion of the
Senior Loan having been utilized as contingent collateral for
such Letter of Credit pursuant to Section 2.2 (c)(Y)(A), the
Letter of Credit shall become a demand note to be paid prior to
any distribution to Borrower or any Affiliate from Borrower
Revenues. The demand note will carry interest at the Interest
Rate as in effect for the Senior Loan; provided, that the
disbursed amount of the Senior Loan and the amount of the demand
note total an amount which is less than the Senior Loan
Commitment. To the extent such sum exceeds the Senior Loan
Commitment, such excess portion of the demand note shall earn
interest at the Interest Rate then-applicable to the Senior Loan
plus two percent (2%) per annum.
(d) Repayment. Borrower shall make principal payments (each, a
"Scheduled Installment") on the dates listed in Schedule I attached to the
Senior Loan Note and in the amounts determined by multiplying the principal
amount of the Senior Loan Note by the percentage opposite such date. Borrower
hereby agrees that Schedule I to the Senior Loan Note may, at Lender's sole
option, be revised at the time any contingent collateral provided for any Letter
of Credit in accordance with Section 2.2(c)(Y)(A) is drawn (but only if Lender
has opted not to demand payment in full of such draw), analyzed using the
methodology employed in connection with the creation of the original
amortization schedule for the Senior Loan Note and taking into account
anticipated mandatory prepayments of the Senior Loan, the original debt service
coverage ratios and projected Borrower Revenues contained in the Pro Formas.
2.3 Conditions and Terms Specific to the Additional Credit Facility.
(a) The Additional Credit Facility Note. On the Closing Date, Borrower
shall execute and deliver to Lender the Additional Credit Facility Note, which
26
shall evidence Borrower's obligation to pay the principal and interest noted
therein. Borrower authorizes Lender to record on Schedule II attached to the
Additional Credit Facility Note each Advance, the date thereof and the
repayments thereof. Such notations shall be prima facie evidence of the
information set forth therein; provided, that the failure by Lender to make any
such notation or an error in making any such notation shall not affect the
obligations of Borrower hereunder or under any other Loan Document. In the event
of an assignment pursuant to Section 8.19, Borrower shall, upon surrender of the
Additional Credit Facility Note, issue a new Additional Credit Facility Note to
reflect such assignment.
(b) Disbursements. Subject to the satisfaction of the terms and
conditions set forth herein, on the Closing Date or on any Borrowing Date after
the Closing Date, Lender shall make available to Borrower the amount, if any,
remaining under the Additional Credit Facility. Each Advance shall be in an
amount not less than five hundred thousand Dollars ($500,000) and shall be for
credit to the account of Borrower at such bank in such place as Lender and
Borrower shall agree in immediately available funds. Advances shall be made upon
Borrower's request in writing, substantially in the form of Exhibit 2.1(a),
delivered to Lender at least ten (10) Business Days prior to the proposed date
of disbursement, and against each Advance Borrower shall deliver to Lender a
receipt substantially in the form of Exhibit 2.1(b).
(c) Permitted Use of Additional Credit Facility. Borrower may use the
funds available through the Additional Credit Facility for any purpose. Borrower
may apply to Lender for an Advance after Borrower or any Affiliate has taken any
action which increases the operating cash available to Borrower over and above
the levels projected in the Pro Forma. Such actions include renegotiating any
contract or agreement in a manner which increases revenue or reduces Project
operating expenses or negotiating any contract or agreement in a manner which
increases the operating cash available to Borrower. Lender shall have the right,
in its sole discretion, to approve or reject any request for an Advance. If
approved, Lender will calculate the amount of the Advance using the same credit
criteria, pricing spreads, terms and conditions as were used in connection with
the making of the Senior Loan. Borrower may borrow up to seventy-one and
forty-three one-hundredths percent (71.43%) of the discounted additional
operating cash flow (discounted at the then-applicable Interest Rate for the
Senior Loan); provided, that such cash flow, for purposes of this Section
2.3(c), shall be calculated for the shorter of the period remaining until (i)
the Final Maturity Date or (ii) the expiration of the contract negotiated or
re-negotiated in connection with such Advance; and
27
provided, further, that such borrowing may not exceed the maximum amount of the
Additional Credit Facility.
(d) Repayment. Borrower shall make principal payments (each, a
"Scheduled Installment") on the dates listed in Schedule I attached to the
Additional Credit Facility Note and in the amounts determined by multiplying the
sum of all Advances on the Additional Credit Facility Note by the percentage
opposite such date. Borrower hereby agrees that Schedule I to the Additional
Credit Facility Note may, at Lender's sole option, be revised at the time of
each Advance and at the expiration of the Availability Period, using the
methodology employed in connection with the creation of the original
amortization schedule for the Additional Credit Facility Note, taking into
account anticipated mandatory prepayments of the Additional Credit Facility, the
original debt coverage ratios and projected Borrower Revenues contained in the
Pro Formas.
2.4 Interest.
(a) Rate of Interest. So long as no Event of Default has occurred and
is continuing, the Loans and all other Obligations shall bear interest from the
date any such Loan was made or such other Obligation becomes due to the date
paid at a rate per annum equal to the Interest Rate applicable to such Loan or,
in the case of an Obligation for which the Interest Rate is not otherwise
specified, to the Interest Rate then-applicable to the Senior Loan. Upon the
occurrence of an Event of Default and for so long as such Event of Default
continues, the Loans and all other Obligations shall bear interest at their
respective Default Rate.
(b) Computation and Payment of Interest. Interest on the Loans shall
be computed on the daily principal balance outstanding on the basis of a three
hundred sixty (360) day year for the actual number of days elapsed in the period
during which it accrues. In computing interest on the Loans, the date on which
the Initial Disbursement, any draw on contingent collateral for a Letter of
Credit or any Advance is made shall be included and the date of payment shall be
excluded. Interest shall be payable quarterly in arrears on each March 31, June
30, September 30 and December 31, commencing December 31, 1996.
(c) Interest Laws. Notwithstanding any provision to the contrary
contained in this Agreement or the other Loan Documents, Borrower shall not be
required to pay, and Lender shall not be permitted to collect, any amount in
28
excess of the maximum amount of interest permitted by law ("Excess Interest").
In determining whether or not the interest paid or payable with respect to any
Obligation of Borrower to Lender, under any specific contingency, exceeds the
highest lawful rate allowed from time under applicable law (the "Maximum Rate"),
Borrower and Lender shall, to the maximum extent permitted by applicable law,
(i) characterize any non-principal payment as an expense, fee or premium rather
than as interest, (ii) exclude voluntary prepayments and the effects thereof,
(iii) amortize, prorate, allocate and spread the total amount of interest
throughout the full term of such Obligation so that the actual rate of interest
on account of such Obligation does not exceed the Maximum Rate, and/or (iv)
allocate interest between portions of such Obligation such that no such portion
shall bear interest at a rate greater than the Maximum Rate. Notwithstanding the
foregoing, if any Excess Interest is provided for or determined by a court of
competent jurisdiction to have been provided for in this Agreement or in any
other Loan Document, then in such event (1) the provisions of this Section
2.4(c) shall govern and control; (2) Borrower shall not be obligated to pay any
Excess Interest; (3) any Excess Interest that Lender may have received hereunder
shall be, at Lender's option, (A) applied as a credit against the outstanding
principal balance of the Obligations or accrued and unpaid interest (not to
exceed the Maximum Rate), (B) refunded to the payer thereof or (C) any
combination of the foregoing; (4) the Interest Rate provided for herein shall be
automatically reduced to the Maximum Rate, and this Agreement and the other Loan
Documents shall be deemed to have been and shall be reformed and modified to
reflect such reduction; and (5) when Lender shall have complied with clauses (1)
through (4) above, Borrower shall not have any action against Lender for any
damages arising out of the payment or collection of any Excess Interest.
Notwithstanding the foregoing, if for any period of time interest on any Loan is
calculated at the Maximum Rate rather than the applicable rate under this
Agreement, and thereafter such applicable rate becomes less than the Maximum
Rate, the rate of interest payable on such Loan shall remain at the Maximum Rate
until Lender shall have received the amount of interest which Lender would have
received during such period on such Loan had the rate of interest not been
limited to the Maximum Rate during such period.
(d) Waiver. Interest shall be due and payable to Lender at the
Interest Rate or the Default Rate (as the case may be) as provided herein, after
as well as before demand, default and judgment, notwithstanding any judgment
29
rate of interest provided for in any statute and, to the extent permitted by
law, Borrower expressly waives the applicability of any such statutory interest
rate.
2.5 Fees.
(a) Agency Fee. Borrower shall pay to Lender the Agency Fee on or
before each date on which such fee is due.
(b) Success Fee. Borrower shall pay to Lender the Success Fee, if any,
on the Closing Date.
(c) Work Fee. Borrower shall pay to Lender the Work Fee on the date of
each Advance. Borrower agrees that Lender shall have earned the Work Fee with
respect to any Advance upon the issuance by Lender of its approval for such
Advance and that such Work Fee shall be payable regardless of whether such
Advance is disbursed by Lender; provided, that such Work Fee shall not be
payable if Lender shall have breached its obligation to disburse an Advance
following the satisfaction of all conditions precedent to the disbursement of
such Advance.
(d) Letter of Credit Fee. Borrower shall pay to Lender the Letter of
Credit Fee on or before each date on which such fee is due.
(e) Assignment Fee. CHI Finance shall pay to Lender the Assignment Fee
on the Closing Date.
2.6 Payments and Prepayments.
(a) Manner and Time of Payment.
(i) All payments by Borrower of the Obligations shall be made without
defense, setoff or counterclaim and in immediately available funds and
delivered to Lender by wire transfer to Lender's account, ABA No.
011900571, Account No. 7030-0226 at Fleet National Bank, Hartford,
Connecticut, for the benefit of Borrower, or at such other place as Lender
may direct from time to time by notice to Borrower. Borrower shall receive
credit for payments on the date received by Lender if Borrower has given
Lender telephonic notice by 12:00 noon (New York, New York time) of the
transfer of such funds and such funds are received by Lender by 2:00 p.m.
(New York, New York time) on such day. In the absence of timely notice and
receipt, such payments shall be deemed to have been made by Borrower on the
next succeeding Business Day.
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(ii) Notwithstanding the provisions of Section 2.6(a)(i) above to the
contrary, so long as the Security Agreement remains in full force and
effect and provided sufficient funds are available for application in
accordance with the terms and conditions hereof and thereof, Borrower
authorizes and consents to make, and Lender agrees automatically to
receive, any and all payments required to be made hereunder through
operation of the relevant provisions of the Security Agreement.
(iii) All payments made by Borrower hereunder shall be applied in the
following order of priority: (1) payment of all current fees due to Lender,
(2) payment of all current interest due to Lender, (3) payment of all
principal of the Senior Loan then due to Lender (including any mandatory
prepayment thereof), (4) payment of all principal of the Additional Credit
Facility then due to Lender (including any mandatory prepayment thereof),
and (5) payment of any amount drawn under any Letter of Credit.
(b) Payments on Business Days. Except with respect to payments made
through operation of the relevant provisions of the Security Agreement, whenever
any payment to be made hereunder shall be stated to be due on a day that is not
a Business Day, the payment shall be made on the next succeeding Business Day
and such extension of time shall be included in the computation of the payment
of interest hereunder.
(c) Mandatory Prepayments.
(X) Immediately upon receipt by Borrower or any Affiliate of any
distribution of Condemnation Proceeds (with respect to all or
substantially all assets of a Project) or Insurance Proceeds with
respect to any Project or, subject to Section 6.2, the proceeds of any
sale, transfer or disposition of any Project or any Project asset for
which the greater of the net proceeds of the sale of the asset or the
present market value of the asset is at least twenty-five thousand
Dollars ($25,000), Borrower shall prepay the Loans in an amount equal
to the greater of (i) one hundred percent (100%) of such proceeds and
(ii) the percentage of the outstanding principal amounts of the Loans
attributable to such Project as indicated on Schedule III to each Note
(which Schedule III Borrower agrees may, at Lender's sole option, be
revised at the time of the issuance of each Letter of Credit and the
making of each Advance); provided, that Borrower shall not be required
to prepay the Loans in the event such Insurance Proceeds with respect
to any event (which event, for purposes of this Agreement, shall
31
include any series of events arising from a related causal factor or
occurring within a period of five (5) Business Days) do not in the
aggregate exceed two hundred thousand Dollars ($200,000) and Borrower
or such Affiliate is utilizing such Insurance Proceeds to repair the
damage caused to such Project by such event; provided, further, that
Borrower shall be required to prepay the Loans only in an amount equal
to one hundred percent (100%) of such Insurance Proceeds if (i) the
first proviso of this sentence shall not be true and (ii) there has
not been a total loss or constructive total loss of such Project and
such Project can be returned to production of revenue within a
reasonable period of time thereafter. All prepayments in excess of the
amounts payable pursuant to clause (ii) of the first sentence of this
Section 2.6(c) shall be applied in the manner provided in Section
2.6(a)(iii). In the case of Condemnation Proceeds from less than
substantially all of the assets of a Project, so long as such Project
continues to produce revenue without material impairment (or can be
returned to production of revenue without material impairment within a
reasonable period thereafter), the Project Owner may use such proceeds
to purchase assets of substantially the same or greater utility.
(Y) In addition, if any Project Document is amended or terminated
in such a manner that such amendment or termination results in a cash
payment to Borrower or any Affiliate, or if any material Project asset
is sold without replacement within a reasonable period of time by
property of substantially the same or greater utility and equal or
greater value, in either case resulting in a cash payment to Borrower
or any Affiliate, then Borrower shall prepay the Loans in the amount
of such proceeds and such prepayment shall be applied in the manner
provided in Section 2.6(a)(iii).
(Z) In addition, if the Net Operating Cash available to Borrower
exceeds one hundred twenty percent (120%) of the annual debt service
on the Senior Loan and if the Debt Service Reserve Account is funded
at the level required by the Security Agreement, then Borrower shall
prepay the Senior Loan in the reverse order of maturities in an amount
equal to eighty percent (80%) of such excess amount.
(d) Voluntary Prepayments. Borrower may, at any time, upon at least
thirty (30) days' written notice to Lender, prepay to Lender (in the manner
provided in Section 2.6(a)(iii)) all or any portion of any outstanding Loan. Any
32
such prepayment shall cause Borrower to owe Lender the prepayment fee described
in Section 2.6(e).
(e) Prepayment Fee. In connection with (1) any voluntary prepayment,
(2) any mandatory prepayment in connection with the sale, transfer or
disposition of any Project or any Project asset, (3) any mandatory prepayment
resulting from any casualty to any Project which has not caused the total loss
or constructive total loss of the Project or (4) any mandatory prepayment
resulting from the amendment or termination of any Project Document, Borrower
shall pay to Lender a prepayment fee equal to the greater of the Reinvestment
Loss Amount and the amount determined pursuant to the following table as
liquidated damages and compensation for the costs of Lender:
Penalty as a % of Loan
Date of Prepayment Balance
From the Closing Date until the first 6%
anniversary thereof
From the first to the second 5%
anniversary of the Closing Date
From the second to the third 4%
anniversary of the Closing Date
From the third to the fourth 3%
anniversary of the Closing Date
From the fourth to the fifth 2%
anniversary of the Closing Date
From the fifth to the sixth 1%
anniversary of the Closing Date
After the sixth anniversary of the No penalty
Closing Date
Notwithstanding the foregoing, in the event the Reinvestment Loss Amount is
negative, then such negative amount shall be subtracted from the amount
calculated pursuant to the above table.
33
2.7 Term of this Agreement. Unless Lender agrees to extend the term of
this Agreement, the "Termination Date" hereunder shall be the earlier of the
Final Maturity Date or the date upon which all of the Obligations (other than
Contingent Obligations which by their terms survive the termination of the Loan
Documents) shall have been indefeasibly paid in full. However, this Agreement
may be terminated prior to the Termination Date as set forth in Section 7. Upon
termination in accordance with Section 7 or on the Termination Date, all
Obligations (other than Contingent Obligations which by their terms survive the
termination of the Loan Documents) shall become immediately due and payable
without notice or demand. Notwithstanding any termination of this Agreement,
until all Obligations (other than Contingent Obligations which by their terms
survive the termination of the Loan Documents) have been indefeasibly paid in
full and satisfied, Lender shall be entitled to retain its Liens upon all of the
Borrower Collateral and shall retain all of its rights and remedies hereunder
and in the other Loan Documents, and even after payment of all Obligations
Borrower's duty to indemnify Lender in accordance with the terms hereof shall
continue.
2.8 Borrower's Loan Account and Statements.
(a) Lender shall maintain a loan account (the "Loan Account") for
Borrower on its books to record (i) all Loans to Borrower hereunder; (ii) all
payments made by Borrower; and (iii) all other appropriate debits and credits as
provided in this Agreement with respect to the Obligations. All entries in the
Loan Account shall be made in accordance with Lender's customary accounting
practices as in effect from time to time. Borrower shall pay the amount
reflected as owing by it in the Loan Account and all other Obligations as such
amounts become due or are declared due pursuant to the terms of this Agreement.
(b) The balance in the Loan Account, as set forth on Lender's most
recent printout or other written statement, shall be presumptive evidence of the
amounts due and owing to Lender by Borrower. Not more than ten (10) days after
the last day of each Fiscal Quarter, Lender shall render to Borrower a statement
setting forth the principal balance of the Loan Account and the calculation of
interest due thereon. Each statement shall be subject to subsequent adjustment
by Lender but shall, absent manifest errors or omissions, be presumed correct
and binding upon Borrower with respect to the amount of the Obligations, and
shall constitute an account stated unless, within twenty (20) Business Days
after receipt of such statement, Borrower shall
34
deliver to Lender Borrower's written objection thereto specifying any error
contained in such statement.
2.9 Capital Adequacy, Taxes and Other Adjustments.
(a) If Lender determines that the adoption after the date hereof of
any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy, reserve requirements or similar
requirements, or compliance by Lender with any request or directive regarding
capital adequacy, reserve requirements or similar requirements from any central
bank or governmental agency or body having jurisdiction does or shall have the
effect of increasing the amount of capital, reserves or other funds required to
be maintained by Lender and thereby reducing the rate of return on Lender's
capital as a consequence of the Loans hereunder, then Borrower shall from time
to time within fifteen (15) days after notice and demand from Lender (together
with the certificate referred to in the next sentence) pay to Lender, for the
account of Lender, additional amounts sufficient to compensate Lender for such
reduction in the rate of return. A certificate as to the amount of such actual
cost and showing the basis of the computation of such cost in reasonable detail
submitted by Lender to Borrower shall, absent manifest error, be final,
conclusive and binding on Borrower. Any and all payments or reimbursements
hereunder shall be made free and clear of and without deduction for any and all
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto (collectively, "Tax Liabilities"), excluding taxes imposed
on the net income of Lender by the jurisdiction under the laws of which Lender
is organized or any political subdivision thereof and taxes imposed on its net
income by the jurisdiction of Lender's applicable lending office or any
political subdivision thereof. If Borrower shall be required by law to deduct
any such amount from or in respect of any sum payable hereunder to Lender, then
the sum payable hereunder shall be increased as may be necessary so that, after
making all required deductions, Lender receives an amount equal to the sum it
would have received had no such deductions been made. Borrower hereby
indemnifies and agrees to hold Lender harmless from and against all Tax
Liabilities.
(b) Except as otherwise provided in Section 2.9(a) above, in the event
that, subsequent to the Closing Date, (i) any change in any existing law,
regulation, treaty or directive or in the interpretation or application thereof,
or (ii) any new law, regulation, treaty or directive enacted or any
interpretation or application thereof, or (iii) compliance by Lender with any
35
request or directive (whether or not having the force of law) from any
Governmental Authority:
(A) does or shall subject Lender to any tax of any kind
whatsoever with respect to this Agreement, the other Loan Documents or
any Loan made hereunder, or change the basis of taxation of payments
to Lender of principal, fees, interest or any other amount payable
hereunder (except for taxes which are based upon or measured by
Lender's net income or which are expressly in substitution for, or
relieve Lender from, any actual taxes based upon or measured by
Lender's net income); or
(B) does or shall impose on Lender any other condition or
increased cost (other than those determined in accordance with Section
2.9(a) above) in connection with the transactions contemplated hereby;
and the result of any of the foregoing is to increase the actual cost to Lender
of making or continuing any Loan hereunder or to reduce any amount receivable
thereunder then, in any such case, to the extent such increased cost is not
reflected in the Floating U.S. Treasury Note Rate, Borrower shall promptly pay
to Lender, upon its demand, any additional amount necessary to compensate Lender
for such additional cost or reduced amount receivable which Lender deems to be
material as reasonably determined by Lender with respect to this Agreement, the
other Loan Documents or any Loan made hereunder. If Lender becomes entitled to
claim any additional amount pursuant to this subsection, it shall promptly
notify Borrower of the event by reason of which Lender has become so entitled. A
certificate as to any additional amount payable pursuant to the foregoing
sentence submitted by Lender to Borrower shall be conclusive in the absence of
manifest error. For the avoidance of doubt, Lender confirms that the provisions
of this Section 2.9 refer to Lender only and not to any other Person.
SECTION 3
CONDITIONS TO LOANS
3.1 Conditions Precedent.
(a) Conditions to Closing. No obligation of Lender contained in this
Agreement and the other Loan Documents to lend or disburse money or to indemnify
Borrower or any other Person or otherwise to take any action or assume any
36
existing obligation of another Person shall be deemed binding on Lender until
each of the conditions set forth in this Section 3.1(a) is performed to the
satisfaction of Lender and Lender has received the following documents, all in
form and substance satisfactory to Lender:
(i) Lender and its counsel shall have received copies of each
Material Agreement (including without limitation the O&M contract
between the O&M Operator and each Project Owner), and shall have
reviewed and approved (in their sole discretion) the form, terms,
conditions, substance and structure thereof;
(ii) Lender shall have received a review and analysis
satisfactory to Lender (in its sole discretion) by the Independent
Engineer with respect to relevant technical aspects of the Projects
including, without limitation, existing environmental damage and
liabilities, if any, operation and maintenance costs, historical and
projected availability and useful life of each Project, capabilities
of the O&M Operator, Borrower's ability to perform under the Project
Documents, projected operation and maintenance costs, maintenance
plans and schedules, terms of Project Documents, Permits, net capacity
degradation (if any), the Project's ability to comply with Permit
conditions and any other technical issues Lender may request;
(iii) Lender shall have received delivery of reference Pro Formas
on each Project and in aggregate for all Projects for a period
extending out twenty (20) years from the Closing Date or one hundred
thirty-three percent (133%) of the term of the Senior Loan as
determined by the Pro Forma, which shall incorporate the results of
due diligence and the reports of Lender's counsel and the Independent
Engineer and the terms and conditions imposed by the Project
Documents, showing annual Net Operating Cash available for debt
service sufficient (in Lender's sole discretion) to support the
maximum amount of the Senior Loan (assuming a 1.4 to 1 annual loan
coverage ratio);
(iv) Lender and its advisors shall have completed their review of
all Permits relating to the Projects, Borrower shall have accomplished
all items on the regulatory compliance action plan prepared by the
Independent Engineer that were required to have been accomplished on
or before the Closing Date, and all such Permits and accomplished
items shall be satisfactory to Lender (in its sole discretion) and,
where applicable, in full force and effect;
37
(v) Lender shall be satisfied in its sole discretion that (A)
Borrower's and the Projects' operations comply, in all respects deemed
material by Lender, with all applicable Environmental Laws, (B)
Borrower's and the Projects' operations are not subject to any federal
or state investigation evaluating whether remedial action involving
any expenditure deemed material by Lender is needed to respond to any
release of any Hazardous Material and (C) none of Borrower or any
Project have any contingent liabilities deemed material by Lender in
connection with the release of any Hazardous Material. Lender shall be
satisfied (in its sole discretion) with the results of the
environmental audit of each Project;
(vi) Lender shall have received evidence satisfactory to Lender,
in its sole discretion, that Lender has a valid and perfected first
priority Lien in the Borrower Collateral, including, without
limitation, Form UCC-3 assignment or termination statements relating
to the Prior Liens executed and in due form for filing. Borrower shall
have made arrangements satisfactory to Lender that all Prior Liens
will be discharged with the proceeds of the Initial Disbursement or
assigned to Lender and all notes and letters of credit related thereto
will be paid in full and canceled or purchased by Lender. Lender shall
have received UCC, federal and state tax lien, judgment lien,
bankruptcy, court and title search reports listing all effective
financing statements and other documents that name Borrower or the
Affiliates as debtors and that are filed in the jurisdictions in which
the Borrower Collateral is located, the jurisdictions of incorporation
of Borrower and the Affiliates and in each jurisdiction where Borrower
or any Affiliate maintains an office;
(vii) Borrower shall have paid the Closing Costs in immediately
available funds;
(viii) Borrower shall deliver or cause to be delivered to Lender
the documents listed below, duly executed (except the Disbursement
Instructions), in form and substance satisfactory to Lender and in
quantities designated by Lender:
(A) This Agreement;
(B) The Notes and the Intercreditor Agreement;
38
(C) The Security Agreement, the Security Assignment
Documents and the other Security Documents not listed
below;
(D) Drafts of the Disbursement Instructions (Borrower
having thirty (30) days after the Closing Date to
deliver to Lender fully executed originals of the
Disbursement Instructions);
(E) The Pledged Interests, including without limitation
stock certificates representing all issued and
outstanding shares of capital stock of Fulcrum, Inc.,
together with undated stock powers relating to such
certificates executed in blank;
(F) The Pledge Agreements;
(G) The Assignments, if any;
(H) (1) A certificate duly executed as of the Closing Date
by an Authorized Officer of Borrower certifying that
(x) all representations and warranties made by Borrower
under the Loan Documents are true as though made on and
as of such date, (y) all conditions to the obligations
of Lender to make the Loan pursuant to this Section
3.1(a) have been fully satisfied or expressly waived in
writing, and (z) no Default or Event of Default exists
or will result from such closing or making of the Loans
and (2) certificates duly executed as of the Closing
Date by an Authorized Officer of each Affiliate
certifying that all representations and warranties made
by such Affiliate under the Loan Documents to which it
is a party are true as though made on and as of such
date;
(I) Copies of (1) the Partnership Agreement of Borrower,
certified as of the Closing Date by the Secretary or
other appropriate officer of a general partner of
Borrower, (2) resolutions and any other documents
evidencing all action taken by each general partner of
39
Borrower to authorize the execution and delivery of
this Agreement and each other Loan Document to which
Borrower is a party, such documents to be certified as
of the Closing Date by the Secretary or other
appropriate officer of a general partner of Borrower,
and (3) certificates, certified as of the Closing Date
by the Secretary or other appropriate officer of a
general partner of Borrower, setting forth the name and
signature of each Authorized Officer of Borrower
(Lender may rely conclusively on such certification
until it receives notice in writing to the contrary
from the applicable Person);
(J) Copies of (1) the Certificate or Articles of
Incorporation and By-Laws or Partnership Agreement of
each Affiliate certified as of the Closing Date by the
Secretary or other appropriate officer of such
Affiliate, and certificates dated within five (5) days
prior to the Closing Date that each corporate Affiliate
is validly existing and in good standing on such date,
certified by the Secretary of State of the state in
which such Affiliate is organized, (2) resolutions and
any other documents evidencing all action taken by such
Affiliate to authorize the execution and delivery of
each Loan Document to which such Affiliate is a party,
such documents to be certified as of the Closing Date
by the Secretary or other appropriate officer of such
Affiliate, and (3) certificates, certified as of the
Closing Date by the Secretary or other appropriate
officer of such Affiliate setting forth the name and
signature of each Authorized Officer of such Affiliate
(Lender may rely conclusively on such certification
until it receives notice in writing to the contrary
from such Affiliate);
(K) Evidence that Messrs. Cahill, Gordon & Reindel or
another Person acceptable to Lender has agreed to serve
as the agent of Borrower and each Affiliate
40
for receipt of service of process in the State of
New York;
(L) Copies of all financial statements, tax returns,
reports and notices described in Section 5.7 as are
then available or which would be required to be
provided to Lender as of the Closing Date if the
Closing Date had already occurred;
(M) Copies of all Applicable Permits;
(N) Copies of all orders issued as of the Closing Date by
FERC certifying the Projects as Qualifying Facilities
and copies of all Notices of Self-Certification filed
as of the Closing Date with FERC with respect to the
Projects;
(O) Executed originals of one or more written opinions of
Curtis Thaxter Stevens Broder & Micoleau LLC and Davis
Wright Tremaine LLP, special counsel to Borrower and
each Affiliate and of Chadbourne & Parke LLP, special
counsel to Lender, each dated the Closing Date and
addressed to Lender;
(P) The executed originals of the consents of Idaho Power
substantially in the form set forth in Exhibit 3.2;
(Q) Evidence satisfactory to Lender that all existing debt
of Borrower and each Affiliate to a lender other than
Lender (other than the Indebtedness listed in Exhibit
6.6.) will be paid in full with the proceeds of the
Initial Disbursement, including without limitation
canceled notes relating to any such Indebtedness;
(R) Copies of letters from the general partner of each of
Borrower and BP Hydro Associates to Borrower and BP
Hydro Associates instructing each such partnership to
record on its records the pledge of the respective
Pledged Interests pursuant to the Pledge Agreements;
and
41
(S) An endorsement from the applicable title company
confirming the assignment of the deeds of trust
relating to the Projects in favor of Lender and
confirming that such deeds of trust remain a valid and
subsisting Lien on the Projects described therein
subject only to those exceptions set forth in the title
policies originally issued in favor of Fuji Bank.
(ix) The representations and warranties of Borrower and each
Affiliate contained herein and in the other Loan Documents shall be
true, correct and complete in all material respects on and as of the
Closing Date;
(x) No event shall have occurred and be continuing, or would
result from the closing or the making of any Loan, that would
constitute a Default or Event of Default;
(xi) Borrower and each Affiliate shall have performed in all
material respects all agreements and satisfied all conditions which
any Loan Document provides shall be performed or satisfied by it on or
before the Closing Date;
(xii) No order, judgment or decree of any court or Governmental
Authority shall enjoin or restrain Lender from making the Loans;
(xiii) Except as disclosed in Schedule V, there shall not be
pending or, to the knowledge of Borrower or any Affiliate threatened
pursuant to written notification, any action, suit, proceeding,
governmental investigation or arbitration against or affecting
Borrower or any Affiliate, any Project or any of the other Borrower
Collateral and there shall have occurred no development in any action,
suit, proceeding, governmental investigation or arbitration disclosed
to Lender that, in Lender's reasonable determination, is likely to
have a Material Adverse Effect. No injunction or other restraining
order shall have been issued and no hearing to cause an injunction or
other restraining order to be issued shall be pending or noticed with
respect to any action, suit or proceeding seeking to enjoin or
otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, this Agreement or the making of the
Loans hereunder;
42
(xiv) There shall not be any amendment, or any proposed
amendment, to permitting, licensing or other regulatory requirements
that, in Lender's reasonable determination, is likely to have a
Material Adverse Effect;
(xv) There shall not be any amendment, or any proposed amendment,
to any Material Agreement which is likely, in Lender's reasonable
determination, to have a Material Adverse Effect, without Lender's
prior written consent;
(xvi) Borrower shall have taken all actions necessary or
desirable to implement the transactions contemplated in the Security
Documents, including, without limitation, establishing all required
Accounts, procuring all third-party consents, agreements and approvals
necessary or desirable to fund the Accounts in the manner required by
the Security Agreement and the Disbursement Instructions, and all such
other actions necessary or desirable to ensure that Borrower and each
Affiliate complies with the terms and conditions of the Security
Documents;
(xvii) Lender shall have received binders for or other evidence
satisfactory to Lender (including, if requested by Lender,
certificates of insurers, independent brokers and Borrower or any
Affiliate) indicating (i) that Lender will immediately following the
Closing Date be named as loss payee with respect to the property
insurance and business interruption insurance policies relating to the
Projects and (ii) that Lender will immediately following the Closing
Date be named as an additional insured on the general and umbrella
liability insurance policies maintained by Borrower and the
Affiliates;
(xviii) Since September 19, 1996, no change shall have occurred
in the condition or operation, financial or otherwise, of Borrower,
any Affiliate or any Project that, in Lender's sole discretion, is
likely to have a Material Adverse Effect;
(xix) The Closing Date shall occur on or before December 31,
1996; and
(xx) the Certificates or Articles of Incorporation and By-Laws of
CHI-Idaho, Inc., CHI-Magic Valley, Inc. and Fulcrum, Inc. and the
43
Partnership Agreements of BP Hydro Associates and Borrower shall
contain bankruptcy-remote provisions satisfactory to Lender.
(b) Conditions to Advances. Lender shall have no obligation to make
any Advance pursuant to this Agreement until each condition set forth in this
Section 3.1(b) is performed or otherwise satisfied to the satisfaction of
Lender:
(i) Lender shall have issued to Borrower a formal commitment to
make the Advance;
(ii) Since September 19, 1996, no change shall have occurred in
the condition or operation, financial or otherwise, of Borrower, any
Affiliate or any Project that, in Lender's sole discretion, is likely
to have a Material Adverse Effect;
(iii) Borrower shall deliver to Lender the documents listed
below, duly executed, in form and substance satisfactory to Lender:
(A) a certificate of an Authorized Officer of Borrower, duly
executed as of the date of such Advance, representing and
warranting that (1) all representations and warranties made by
Borrower and each Affiliate under all Loan Documents are true as
though made on and as of such date, unless stated to relate to a
specific earlier date, in which case such representations and
warranties shall be true and correct in all material respects as
of such earlier date, (2) all obligations of Borrower and each
Affiliate under the Loan Documents required to be performed on or
before such date have been properly performed or expressly waived
in writing, and (3) no Default or Event of Default exists or will
result from the making of the Advance;
(B) the new or renegotiated contract which gives rise to the
Advance;
(C) a new closing Pro Forma on the operating cash flow of
the Projects for a period extending out twenty (20) years from
the date of the Advance or one hundred thirty-three percent
(133%) of the term of such Advance as determined by the new
closing Pro Forma (which shall incorporate the results of a
report from the Independent Engineer and the terms and conditions
44
imposed by the Project Documents) demonstrating that the annual
operating cash flow which is available to service the Loans
supports the amount of the Advance such that the ratio of Net
Operating Cash to debt service on the Loans is at least 1.4 to 1;
and
(D) such other assurances, instruments or undertakings as
Lender may reasonably request; and
(iv) Borrower shall pay the Closing Costs (to the extent not
previously paid).
3.2 Conditions Precedent for the Benefit of Lender. All conditions
precedent to the obligation of Lender to make any Loan are imposed hereby solely
for the benefit of Lender and no other Person may require satisfaction of any
such condition precedent or be entitled to assume that Lender will refuse to
make the Loan in the absence of strict compliance with such conditions
precedent. All requirements of this Agreement may be waived by Lender in whole
or in part at any time at Lender's sole option and discretion.
3.3 Location of Closing. The closing of the loan transaction
contemplated hereunder shall take place on the Closing Date at the offices of
Lender in Stamford, Connecticut, or the offices of counsel to Lender in New
York, New York, at the election of Lender.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF BORROWER
In order to induce Lender to enter into this Agreement and to make the
Loans, Borrower (as evidenced by the signature of its Authorized Officer to this
Agreement) hereby represents and warrants on the date hereof and on the Closing
Date, except with respect to any representation and warranty which specifically
states that it is made on only one of such dates (each of which representations
and warranties shall survive the Closing Date and the making of the Loans as
provided in Section 8.7) to Lender as follows:
4.1 Organization, Business and Qualification. Borrower is a duly
formed and validly existing general partnership under the laws of the State of
Utah and is qualified to do business in each other jurisdiction in which the
ownership of its properties or the conduct of its business requires such
45
qualification. Each jurisdiction in which Borrower is required to be qualified
and in good standing is set forth in Exhibit 4.1.
4.2 Power and Authorization.
(a) Borrower has the power and authority to own its properties and
assets and to conduct its business as now conducted and to incur the
Indebtedness evidenced by the Notes. The execution, delivery and performance by
Borrower of this Agreement and the other Loan Documents to which it is a party
(i) have been duly authorized and constitute valid obligations of Borrower
legally binding upon it and enforceable in accordance with their respective
terms, except as enforcement may be limited by Debtor Relief Laws or by
equitable principles relating to or limiting creditors' rights generally, and
(ii) do not require any approval of Borrower or any Affiliate which has not been
obtained or the approval of any trustee or holder of any obligation or
Indebtedness of Borrower or any Affiliate and do not, and will not, contravene
any Governmental Requirement, Borrower's Partnership Agreement or any
partnership document or constitute a default under any indenture or agreement to
which Borrower or any Affiliate is a party or by which Borrower or any Affiliate
or any of their properties may be bound or affected, or result in the creation
of any Lien (other than Permitted Liens) upon any property of Borrower or any
Affiliate. Except as contemplated under the Security Documents, no consent of
any other Person and no consent, license, approval or authorization of, or
registration or declaration with, any Governmental Authority is required in
connection with Borrower's execution, delivery or performance of, or the
validity or enforceability of, this Agreement or the other Loan Documents to
which it is a party except those consents which have been obtained or are not
yet required.
(b) The list of consents and waivers set forth in Exhibit 4.2 is a
true, complete and accurate list of all consents and waivers required for the
consummation of the transactions contemplated under the Loan Documents
(including, without limitation, consents and waivers necessary or desirable in
connection with the assignment or grant and perfection of the Security Interests
to Lender and Lender's ability to exercise and enforce its rights and remedies
under the Loan Documents and waivers of rights of first refusal necessary or
desirable in connection with the possible foreclosure on and sale of the
Borrower Collateral by Lender), and such list contains no material misstatement
or inaccuracy or misleading information and does not omit any information the
omission of which would be materially misleading.
46
(c) All consents and waivers set forth in Exhibit 4.2 have been
obtained as of the Closing Date.
4.3 Financial Condition. All financial statements, reports, records
and other information concerning Borrower or any Affiliate which have been
furnished by Borrower to Lender pursuant to this Agreement have been prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as disclosed therein) and present fairly the financial condition of the
Persons covered thereby as at the dates thereof and the results of their
operations for the periods then ended.
4.4 Suits, Actions, Proceedings and Adverse Facts. Except as disclosed
in Schedule V, there is no judgment, action, investigation, claim, complaint,
notice of violation, injunction, order, decree, directive, suit, arbitration or
proceeding pending or threatened pursuant to written notification in any court
or before or by any Governmental Authority (a) against or affecting Borrower,
any Affiliate or any of the Borrower Collateral involving any claim in any
amount or (b) involving the validity, enforceability or priority of any Loan
Document at law or in equity.
4.5 Title to Borrower Collateral; Liens.
(a) Borrower or an Affiliate is the sole owner of each item of the
Borrower Collateral, having good and marketable title thereto free and clear of
any and all Liens other than Permitted Liens.
(b) On the Closing Date, the Security Documents (including the filing
of the Financing Statements in the offices and locations listed in Exhibit 4.5
and the taking by Lender of possession of the Borrower Collateral and the filing
of Liens on certificates of title and the giving of written notice to Borrower
and the Affiliates pursuant to the Security Documents) create or preserve and
constitute a valid and continuing perfected and first priority Lien on and first
priority security interest in the Borrower Collateral in favor of Lender, prior
to all other Liens (other than Permitted Liens) in favor of others and rights of
others, and are enforceable (except as enforcement may be limited by Debtor
Relief Laws or by equitable principles relating to or limiting creditors' rights
generally) as such as against Borrower and the Affiliates and all third parties
(except as otherwise provided by statute) and secure the payment of the
Obligations. On the Closing Date, all action necessary to protect and perfect
such Liens and security interests in each item of the Borrower Collateral has
been duly taken. Such Liens and security interests are entitled to all of the
47
rights, priorities and benefits afforded by the UCC or other relevant law as
enacted in any relevant jurisdiction to perfected security interests. On the
Closing Date, no mortgage or financing statement or other instrument or
recordation covering all or any part of the Borrower Collateral is on file in
any recording office, except such as may have been filed in favor of Lender or
with respect to Permitted Liens. No further action will be required to maintain
and preserve, or effectively to put other Persons on notice of, such Liens and
security interests other than the filing of continuation statements required by
the UCC.
4.6 Governmental Requirements. All representations and warranties made
by Borrower and the Affiliates in the Material Agreements with respect to
Governmental Requirements are, to Borrower's best knowledge upon Due Inquiry,
true and correct as of each date this representation and warranty is made.
4.7 Employee Benefit Plans.
(a) (i) No Prohibited Transaction or Accumulated Funding Deficiency
with respect to an Employee Benefit Plan or withdrawals from Multiemployer Plans
have occurred or exist that, in the aggregate, could reasonably be expected to
subject Borrower or any Affiliate to any material tax, penalty, or other
liability where such tax, penalty or other liability in the aggregate is not
covered in full, for the benefit of Borrower or such Affiliate, by insurance,
(ii) no notice of intent to terminate an Employee Benefit Plan under a distress
termination has been filed, and no Employee Benefit Plan has been terminated,
under Section 4041(c) of ERISA, the PBGC has not instituted proceedings to
terminate, or appoint a trustee to administer, an Employee Benefit Plan, and no
event has occurred or condition exists that could reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Employee Benefit Plan, and (iii) the
present value of all benefit vested under all Employee Benefit Plans (based on
the actuarial assumptions used to fund the Employee Benefit Plans) does not
exceed the assets of the Employee Benefit Plans allocable to such vested
benefits.
(b) All representations and warranties made by Borrower or any
Affiliate in the Material Agreements with respect to Employee Benefit Plans are,
to Borrower's best knowledge upon Due Inquiry, true and correct as of each date
this representation and warranty is made.
48
4.8 Taxes. Borrower and the Affiliates have filed all United States
federal and state tax returns and reports and all other tax returns and reports
with each appropriate Governmental Authority in all jurisdictions in which such
returns and reports are required to be filed, and such returns and reports
properly reflect the taxes, assessments and charges of Borrower and the
Affiliates for the periods covered thereby. Borrower and the Affiliates have
paid all taxes, assessments and other charges which have become due to any
Governmental Authority having jurisdiction over Borrower, the Affiliates or any
of their properties and no tax Liens (other than tax Liens constituting
Permitted Liens) have been filed and no claims are being asserted against
Borrower, the Affiliates or any of their properties. None of the federal or
state income tax returns of Borrower or the Affiliates are under audit. Borrower
has no knowledge of any unpaid taxes, assessments or charges which may be due
and payable against it or the Affiliates or any of their properties which are
likely to have a Material Adverse Effect.
4.9 Chief Executive Office. The address of the chief executive office
(as such term is used in Article 9 of the UCC) of Borrower is set forth on page
1 of this Agreement.
4.10 Environmental Matters. All representations and warranties made by
Borrower or any of the Affiliates in the Material Agreements with respect to
Environmental Claims, compliance with Environmental Laws and any other matter
generally relating to any actual or potential liability of, or the production,
handling and disposal by, any Person with respect to Hazardous Materials, are,
to Borrower's best knowledge upon Due Inquiry, true and correct as of each date
this representation and warranty is made.
4.11 Burdensome Restrictions; Other Contracts. Except with respect to
the Material Agreements and the Applicable Permits, no contract, lease,
agreement or other instrument to which Borrower or any of the Affiliates is a
party or is bound or to which any of such Person's properties is subject, and no
provision of any applicable Governmental Requirement, restricts such Person's
ability to own, operate and maintain any Project in a manner which is likely to
have a Material Adverse Effect with respect to such Project, Borrower or such
Affiliate.
4.12 Labor Matters. All representations and warranties made by
Borrower or any of the Affiliates in the Material Agreements with respect to
labor matters are, to Borrower's best knowledge upon Due Inquiry, true and
correct as of each date this representation and warranty is made.
49
4.13 Permits. Schedule I includes a list of all Applicable Permits.
Each of such Applicable Permits is in full force and effect, is final, and,
based on current regulations, is not subject to appeal or judicial, governmental
or other review.
4.14 Disclosure. No representation or warranty of Borrower or any of
the Affiliates contained in this Agreement, the Financial Statements, the Pro
Formas, the other Loan Documents or any other material document, certificate or
written statement furnished to Lender for use in connection with the
transactions contemplated by this Agreement contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made. There is no material fact known to
Borrower that has had or is likely to have a Material Adverse Effect that has
not been disclosed herein or in such other documents, certificates and
statements furnished to Lender for use in connection with the transactions
contemplated hereby.
4.15 Material Agreements.
(a) Each Material Agreement constitutes the entire agreement of the
respective parties thereto with respect to the subject matter thereof and no
party thereto shall be bound except in accordance therewith.
(b) To the best knowledge of Borrower after Due Inquiry, each Material
Agreement constitutes the valid contract of the parties thereto, enforceable
against the parties thereto in accordance with its terms, except as enforcement
may be limited by Debtor Relief Laws or by equitable principles relating to or
limiting creditors' rights generally; each of the parties thereto has executed
such Material Agreement with full power, authority and capacity to contract; and
such Material Agreement is in full force and effect.
(c) Borrower and, to the best knowledge of Borrower after Due Inquiry,
each other party to a Material Agreement, has performed in a timely manner, in
all material respects, its duties and obligations under each Material Agreement
applicable to it.
(d) To the best knowledge of Borrower after Due Inquiry, the
obligations of each party to a Material Agreement, as stated therein are
absolute and unconditional and are not, nor are claimed to be, subject to any
claim, defense, counterclaim or setoff against Borrower.
50
(e) The list of Material Agreements set forth in Exhibit 4.15 is true,
complete and accurate in every respect. Copies of the Material Agreements as of
the date hereof have been furnished to Lender by Borrower and are true and
complete copies.
(f) With respect to the Material Agreements, there are no existing
conditions that would give rise to any defense to payment or to any claim, right
of setoff, counterclaim, recoupment or rescission except to the extent any such
right is already reflected in the relevant figures in the Pro Forma.
4.16 No Default. None of Borrower or any of the Affiliates is in
default under any agreement (including, without limitation, any Material
Agreement), ordinance, resolution, decree, bond, note, indenture, order or
judgment to which it is a party or by which it is bound, or any other agreement
or other instrument by which it or any of the properties or assets owned by it
or used in the conduct of its business is affected.
4.17 Certain Fees. Other than as disclosed in writing to Lender prior
to the date of this Agreement, no broker's or finder's fee or commission will be
payable with respect to any of the transactions contemplated hereby and Borrower
shall be solely responsible for and shall pay all such broker's or finder's fees
or commissions. Borrower shall indemnify, pay and hold Lender harmless from and
against any claim, demand or liability for broker's or finder's fees alleged to
have been incurred in connection with any of the transactions contemplated
hereby and any expenses, including, without limitation, attorneys' fees, arising
in connection with any such claim, demand or liability. No other similar fees or
commissions will be payable by Borrower for any other services rendered to
Borrower or ancillary to the transactions contemplated hereby.
4.18 Use of Proceeds and Margin Security. Borrower shall use the
proceeds of the Loans for the purposes expressly set forth herein. No portion of
the proceeds of the Loans shall be used by Borrower in any manner that might
cause the borrowing or the application of such proceeds to violate Regulation G,
Regulation U, Regulation T or Regulation X or any other regulation of the Board
of Governors of the Federal Reserve System or to violate the Securities Exchange
Act of 1934 or any applicable usury law.
51
4.19 Compliance with Governmental Requirements.
(a) None of Borrower or any Affiliate has (i) violated any
Governmental Requirement with respect to the operation of any Project as a
hydroelectric generating facility and no such violation has been alleged
pursuant to written notification; (ii) failed to file in a timely manner all
reports, documents and other materials required to be filed by it with any
Governmental Authority with respect to the operation of any Project as a
hydroelectric generating facility (and the information contained in each of such
filings is true, correct and complete in all material respects); or (iii) failed
to retain all records and documents required to be retained by it pursuant to
any Governmental Requirement with respect to the operation of any Project as a
hydroelectric generating facility.
(b) No Project (i) is in violation of any Governmental Requirement
with respect to the operation of any Project as a hydroelectric generating
facility and, to the best knowledge of Borrower upon Due Inquiry, no such
violation has been alleged pursuant to written notification; (ii) has failed, to
the best knowledge of Borrower upon Due Inquiry, to file in a timely manner all
reports, documents and other materials required to be filed by it with any
Governmental Authority, the failure to file which is likely to have a Material
Adverse Effect (and the information contained in each of such filings is true,
correct and complete in all material respects); or (iii) has failed, to the best
knowledge of Borrower upon Due Inquiry, to retain all records and documents
required to be retained by it pursuant to any Governmental Requirement, the
failure to retain which is likely to have a Material Adverse Effect.
4.20 Insurance
(a) Each of Borrower and the Affiliates is in compliance, to the
extent applicable to it, with all requirements set forth in the Material
Agreements to maintain insurance.
(b) All representations and warranties made by Borrower and each
Affiliate in the Material Agreements with respect to insurance are, to
Borrower's best knowledge upon Due Inquiry, true and correct as of each date
this representation and warranty is made.
4.21 Projects. The descriptions of the Projects set forth in
Exhibit 1.1 and all information regarding the Projects furnished by Borrower (or
52
on its behalf) to Lender do not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances in which the same
were made.
4.22 Capital Calls. There are no outstanding calls for contributions
of capital in respect of Borrower or any Affiliate and, to the best knowledge of
Borrower upon Due Inquiry, no such calls for contributions of capital are
currently contemplated or under discussion.
4.23 No Maintenance Liabilities. There are no accrued maintenance
liabilities with respect to the Projects.
4.24 Indebtedness. Exhibit 6.5 lists all Contingent Obligations of
Borrower and the Affiliates as of the Closing Date. Exhibit 6.6 lists all
Indebtedness of Borrower and the Affiliates as of the Closing Date.
4.25 Accounts Receivable. Exhibit 4.25 lists all accounts receivable
of Borrower and the Affiliates as of the Closing Date.
SECTION 5
AFFIRMATIVE COVENANTS AND AGREEMENTS OF BORROWER
Borrower hereby covenants and agrees that, from the date of this
Agreement until the indefeasible payment in full of all Obligations (other than
Contingent Obligations which by their terms survive the termination of the Loan
Documents) and full and complete performance of all of its and the Affiliates'
other obligations hereunder and under the other Loan Documents, Borrower shall
perform, or cause to be performed, all covenants and agreements in this Section
5. Any request for Lender's consent to Borrower's or any other Person's failure
to comply with such covenants must be made by Borrower in writing and any
consent given by Lender shall also be in writing.
5.1 Compliance with Governmental Requirements. Borrower and the
Affiliates shall comply in all material respects with all Governmental
Requirements relating to Borrower, the Borrower Collateral and each Project.
5.2 Access. Upon (a) ten (10) Business Days' notice to Borrower
(except as set forth in clause (b) below) or (b) two (2) Business Days' notice
to Borrower following the occurrence and during the continuance of an Event of
Default, any of Lender's officers, employees or agents shall have the right, in
53
Lender's name or in the name of Borrower and the Affiliates, during normal
business hours, to (i) verify the validity, amount or any other matter relating
to the Borrower Collateral by mail, telephone or otherwise; (ii) inspect the
Borrower Collateral, all books and records related thereto (and to make extracts
from and copies of such books and records) and the premises upon which any of
the Borrower Collateral is located; and (iii) discuss Borrower's and the
Affiliates' affairs and finances and the Borrower Collateral with Borrower's and
the Affiliates' Authorized Officers and independent public accountants. Borrower
and the Affiliates shall fully cooperate with Lender in connection with the
foregoing. So long as no Event of Default has occurred and is continuing, Lender
may exercise its rights provided above once in each calendar quarter. Borrower
and each Affiliate shall also participate in a meeting with Lender, at the
request of Lender, once during each Fiscal Year to be held at Borrower's or such
Affiliate's offices at such time as may be agreed by Borrower or such Affiliate
and Lender.
5.3 Notices by Governmental Authority; Fire and Casualty Losses, etc.
Borrower shall timely comply with and promptly furnish to Lender true and
complete copies of any material notice or material claim by any Governmental
Authority pertaining to Borrower, any Project or the other Borrower Collateral
and any notice or order from FERC pertaining to any Project or any written
notice from any Person that legal action may be or has been initiated
challenging the eligibility of any of the Projects as a Qualifying Facility.
Borrower shall promptly notify Lender of any eminent domain action or similar
proceeding affecting any Project or any fire or other casualty affecting any
Project resulting in more than fifty thousand Dollars ($50,000) in damage.
5.4 Borrower Revenues. Borrower shall use all necessary or desirable
efforts to cause all Borrower Revenues to be deposited in, and disbursed from,
the Project Revenues Account in accordance with this Agreement and the Security
Documents.
5.5 No Lender Liability. Lender shall have no liability, obligation or
responsibility whatsoever with respect to the operation of any Project by any
Project Owner. Lender shall not be obligated to inspect any Project, nor shall
Lender be liable for the performance or default of Borrower or any of the
Affiliates, any Project, any contractor or any other Person, or for any failure
to protect or insure any Project, or for the payment of costs of labor,
materials or services supplied for the operation of any Project, or for the
performance of any obligation of Borrower or any the Affiliates whatsoever.
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5.6 Payment of Taxes, Fees and Claims. Except as set forth below in
this Section 5.6, Borrower shall pay or cause to be paid in a timely manner when
due all taxes, assessments, fees, claims and other charges incurred and payable
by it or any of the Affiliates in connection with the Projects. Notwithstanding
the preceding sentence, Borrower may contest (a) any tax or assessment levied by
any Governmental Authority and (b) all fees and commissions claimed by brokers,
salesmen and agents in connection with the Loans, and, so long as such contest
is being diligently pursued by appropriate proceedings and does not threaten a
Material Adverse Effect, such contest on the part of Borrower shall not be an
Event of Default; provided, that during the pendency of any such contest
involving a disputed amount in excess of fifty thousand Dollars ($50,000) with
respect to Borrower, any Project or the other Borrower Collateral, Borrower
shall furnish to Lender an indemnity bond satisfactory to Lender or other
security acceptable to Lender in an amount equal to any unpaid amount being
contested plus a reasonable additional sum to cover possible costs, interest and
penalties, or should such contest not involve a liquidated amount, in an amount
acceptable to Lender; provided, further, that Borrower shall pay any amount
adjudged by a court of competent jurisdiction to be due, with all costs,
interest and penalties thereon, before such judgment becomes a Lien (other than
a Permitted Lien) on any Project or the other Borrower Collateral. Borrower
shall pay when due all costs and expenses required to be paid by this Agreement,
including, without limitation, all taxes and fees in connection with the
execution, delivery, filing, or recordation of any Lien, the Financing
Statements, any other Loan Document and the Loans.
5.7 Financial Statements and Other Reports.
(a) Borrower shall cause to be furnished to Lender as soon as
available, and in any event no later than one hundred twenty (120) days after
the end of each Fiscal Year (i) certified annual consolidated financial
statements of Consolidated Hydro and (as available) audited annual financial
statements for the Borrower and the Projects, such financial statements to be
prepared in accordance with GAAP consistently applied (if annual audited
financial statements for the Borrower and any Project are not available, then
Borrower must provide Lender with the unaudited balance sheet and income
statement for the Borrower and each Project that are used as a basis for
Consolidated Hydro's audited consolidated financial statements); (ii) a report
and opinion relating to Consolidated Hydro's annual financial statements of
independent certified public accountants of recognized standing selected by
Borrower and reasonably acceptable to Lender (which shall include any of the
55
"Big Six" accounting firms), which report the opinion shall each be based upon
an audit made in accordance with GAAP throughout the period involved and (iii) a
statement by such independent certified public accountants that (A) in making
the audit for such report and opinion such accountants (without making any
special examination for the purpose of such statement) have obtained no
knowledge of any Event of Default under Sections 5.6, 5.7, 6.1, 6.3, 6.4, 6.5,
6.6, and 6.7; provided, that such independent certified public accountants shall
not be liable in respect of such statement by reason of any failure to obtain
knowledge of any such default that would not be disclosed in the course of an
audit examination conducted in accordance with generally accepted auditing
standards in effect at the date of such examination, (B) if, in the opinion of
such accountants, any such Event of Default referred to in the foregoing clause
(A) shall exist, a statement as to the nature and status thereof shall be
included. In addition, concurrently with the delivery of such statements,
Borrower and each Affiliate shall furnish to Lender statements of cash
distributions receivable or received by Borrower and each such Affiliate, which
statements shall be in a form consistent with the Pro Forma.
(b) Borrower shall (i) submit a preliminary draft of the annual
operating budget for each Project to Lender prior to June 1 and shall submit a
final budget prior to June 30 for each subsequent calendar year that contains a
forecast of the operating profit for the next three (3) years and (ii) provide
or cause to be provided quarterly unaudited balance sheet and income statements
on each Project, Borrower and each Affiliate within forty-five (45) days of the
close of each quarterly period. If any budget submitted by Borrower pursuant to
the preceding sentence reflects an expense for operations and maintenance of any
Project that is greater by seven percent (7%) or more than the same expense as
detailed in the Pro Forma, then such budget must be approved by Lender in its
sole discretion.
(c) Promptly upon their becoming available, Borrower shall deliver or
cause to be delivered copies of (i) all financial statements, operating reports,
reports of any other nature and notices which Lender may from time to time
request and (ii) all regular and periodic reports pertaining to any Project
filed by Borrower or any Affiliate with any Governmental Authority or which
Lender may from time to time request. Borrower shall use its best efforts to
deliver to Lender, in a reasonable time frame, all material press releases and
other written statements made available by Borrower or any Affiliate to the
public concerning developments in the business of Borrower or such Affiliate.
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(d) Borrower shall cause to be furnished to Lender as soon as
available all such other reports, schedules or information, or excerpts
therefrom, relating to the Projects as Lender may request from time to time.
(e) Concurrently with the delivery of the reports and statements
referred to in Sections 5.7(a) and (b) above, Borrower shall deliver a
certificate of an Authorized Officer substantially in the form of Exhibit 5.7
(or such other form which is reasonably acceptable to Lender in its sole
discretion), which shall include calculations by Borrower of the Minimum
Coverage Ratio, together with supporting information to allow Lender to verify
such calculations.
(f) Promptly upon Borrower obtaining knowledge of any of the following
events or conditions, Borrower shall deliver a certificate executed by an
Authorized Officer specifying the nature and period of existence of such
condition or event and what action Borrower has taken, is taking and proposes to
take with respect thereto: (i) any condition or event that constitutes a Default
or an Event of Default; (ii) any action, suit, proceeding, investigation or
arbitration affecting Borrower, any Project or the other Borrower Collateral; or
(iii) any event or condition that has a Material Adverse Effect on Borrower, any
Project or the other Borrower Collateral.
(g) Borrower shall furnish to Lender (i) promptly and in any event
within ten (10) days after Borrower knows or has reason to know of the
occurrence of a Reportable Event with respect to the Employee Benefit Plan with
regard to which a 30-day notice must be provided to PBGC, a copy of such
materials required to be filed with the PBGC with respect to such Reportable
Event, and in each such case, a certificate of an Authorized Officer setting
forth details as to such Reportable Event; (ii) at least ten (10) days prior to
the filing by any plan administrator of an Employee Benefit Plan in a distress
termination a copy of such notice; (iii) promptly after requested, and in no
event more than ten (10) days after requested by the Lender, copies of each
annual report that is filed on Form 5500 (together with all schedules filed
therewith) with respect to any Employee Benefit Plan; (iv) promptly and in any
event within ten (10) days after it knows or has reason to know of any event or
condition that could reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or appointment of a trustee to administer,
any Employee Benefit Plan, a certificate of Authorized Officer of Borrower
describing such event or condition; (v) promptly and in no event more than ten
(10) days after receipt thereof by Borrower or any of its ERISA Affiliates, each
notice received by Borrower or an ERISA Affiliate of Borrower concerning the
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imposition of any material withdrawal liability for a complete withdrawal, or
any withdrawal liability for a partial withdrawal, under Section 4202 of ERISA;
and (vi) promptly after receipt thereof, a copy of any material notice Borrower
or any of its ERISA Affiliates may receive from the PBGC or the Internal Revenue
Service with respect to any Employee Benefit Plan or Multiemployer Plan;
provided, that this clause (vi) shall not apply to notices of general
application promulgated by the PBGC or the Internal Revenue Service.
5.8 Insurance. Borrower shall take all necessary action within its
power to ensure that all Insurance Policies are maintained as required under the
Material Agreements.
5.9 Continuance of Business. Each of Borrower and its Affiliates shall
preserve and maintain its existence as a corporation or general partnership
(under state law and for federal income tax purposes) and maintain its rights,
permits, franchises and privileges under the laws of its jurisdiction of
organization or formation. Except for de minimis amounts of cash required to
maintain their existence and as required in connection with the performance of
their obligations under the Loan Documents, each Project Owner shall have no
assets other than, and shall engage in no business other than the holding of,
the corresponding Projects and the proceeds thereof. No Project Owner shall
employ any staff, pay salaries or enter into any agreements for services of any
nature other than administrative costs relating specifically to the existence of
such Project Owner and accounting and legal services relating specifically to
such Project Owner, or incur any Indebtedness (except as provided in Section
6.6) without the prior written approval of Lender.
5.10 Perfection and Preservation of Liens. Borrower shall take any and
all actions necessary (including causing the Financing Statements and other
documents at all times to be recorded, registered and filed, paying or causing
to be paid all recording, filing or other fees, complying with all Governmental
Requirements) in order fully to create, preserve, perfect, maintain and protect
Lender's Lien in the Borrower Collateral as a first and superior Lien and first
priority security interest, subject only to Permitted Liens. Borrower shall, and
shall cause each Affiliate to, protect and defend its interest in the Borrower
Collateral against Liens asserted by any third Person, other than Permitted
Liens, and promptly discharge any such Lien so asserted. Borrower shall promptly
notify Lender of any such assertion and, in the event of any such assertion
which is contested by Borrower or an Affiliate, Borrower shall promptly notify
Lender of the action which Borrower or such Affiliate intends to take to
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discharge or otherwise deal therewith. Borrower will deliver to Lender
statements and schedules further identifying and describing the Borrower
Collateral and such other reports, evidence and information in connection with
the Borrower Collateral, all in reasonable detail, as from time to time may be
reasonably requested by Lender. Borrower shall keep full and accurate books and
records relating to the Borrower Collateral and shall stamp or otherwise mark
such books and records in such manner as Lender may reasonably request
indicating that the Borrower Collateral is subject to the Security Documents.
5.11 Agent. Borrower and each Affiliate shall appoint and continuously
retain Messrs. Cahill, Gordon & Reindel or another Person acceptable to Lender
as its agent in the State of New York for receipt of service of process and
shall pay all costs, fees and expenses in connection therewith.
5.12 Employee Benefit Plans. Neither Borrower nor any ERISA Affiliate
shall (i) terminate or withdraw from any Employee Benefit Plan or Multiemployer
Plan so as to result in any material liability to the PBGC or any Person; (ii)
engage in or permit, to the extent within the reasonable control of Borrower or
its ERISA Affiliates, any event or condition to occur that could reasonably be
expected to constitute grounds for the PBGC to institute proceedings to
terminate or appoint a trustee to administer any Employee Benefit Plan; (iii)
engage in or permit any Prohibited Transaction involving any Employee Benefit
Plan that would subject Borrower to any material tax, penalty or other
liability; (iv) incur or suffer to exist by any ERISA Affiliate of Borrower any
material Accumulated Funding Deficiency, whether or not waived, involving any
Employee Benefit Plan; or (v) allow or suffer to exist any event or condition
within Borrower's material liability to the PBGC or any Person, if any of the
foregoing could reasonably be expected to have the effect of subjecting Borrower
to any material tax, penalty or other liability that is not covered in full for
the benefit of Borrower by insurance.
5.13 Authorized Officers. Borrower shall deliver, or cause to be
delivered, within ten (10) Business Days of any change in Borrower's or any of
the Affiliate's Authorized Officers, an updated certificate of an Authorized
Officer reflecting such change.
5.14 Self-Certification. For each Project that has not been
self-certified as a Qualifying Facility, Borrower shall deliver, not later than
thirty (30) days after the date of this Agreement, a copy of a notice of
self-certification filed with FERC.
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5.15 Further Assurances. Borrower shall, and shall cause the
Affiliates to from time to time, execute such financing statements, documents,
security agreements, reports and, subject to the next sentence, guaranties, and
take all further action as Lender at any time may reasonably request to
evidence, perfect or otherwise implement the guaranties and security for
repayment of the Obligations provided for in the Loan Documents. The foregoing
shall not, without the written consent of Borrower or the relevant Affiliate,
permit Lender to require any guaranty which (a) materially increases the scope
of any guaranty which is a Loan Document or part thereof, or (b) makes any
additional party a guarantor.
5.16 All Necessary Action. Borrower shall take all action necessary or
reasonably requested by Lender to ensure that each of the Affiliates will comply
with all covenants and requirements applicable to such Affiliate under any
Material Agreement; provided that no violation of this Section 5.16 shall become
an Event of Default during the relevant periods for notice and cure under the
terms of the applicable Material Agreement.
5.17 Use of Proceeds. Borrower shall use the proceeds of the Loans
only for the purposes expressly set forth in Sections 2.2 and 2.3 unless
otherwise approved in writing by Lender no fewer than fifteen (15) days prior to
such other use of proceeds. No portion of the proceeds of any Loan shall be used
by Borrower in any manner that might violate the terms and conditions of this
Agreement, any other Loan Document or any Material Agreement.
5.18 Security Documents. Borrower shall take all action necessary or
reasonably requested by Lender for the ongoing implementation of the
transactions contemplated in the Security Documents, including, without
limitation, procuring all third-party consents, agreements and approvals as may
become necessary or reasonably requested by Lender to fund the Project Revenues
Account, the Debt Service Account and the Debt Service Reserve Account in the
manner required by the Security Documents. Borrower shall take all action
necessary or reasonably requested by Lender to ensure that Borrower and all
relevant third parties comply with the terms and conditions of the Security
Documents.
5.19 Debt Service Reserve Account. Borrower shall fund and maintain
the Debt Service Reserve Account in accordance with the terms and conditions of
the Security Agreement.
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5.20 Other Financial Covenants. Borrower shall, starting on September
30, 1998, and thereafter on each anniversary of such date, maintain the Minimum
Coverage Ratio. Borrower agrees on its behalf and on behalf of the Affiliates
that, in the event the Minimum Coverage Ratio is not so maintained, then no
distributions will be made and all cash available, after payments due Lender are
made, shall be placed in the Debt Service Reserve Account in accordance with the
provisions of the Security Documents until the Debt Service Reserve Account has
reached the balance then required by the Security Agreement.
5.21 Additional Work Actions. Borrower shall carry out or shall cause
to be carried out such additional work actions as are requested by Lender on or
before the Closing Date in order for the generation of electrical energy at each
of the Projects to be at the levels estimated in the report of the Independent
Engineer attached hereto as Exhibit 5.21 and used in compiling the Pro Forma.
Each such work action shall, if requested by Lender, be completed to the
reasonable satisfaction of the Independent Engineer.
5.22 Enforcement of Rights. Borrower shall use its best efforts to
enforce, or to cause the Affiliates to enforce, any right it has against any
third party if the failure to enforce such right could have a Material Adverse
Effect. To the extent that any other Person has a right to enforce any right
against any third party as to which the failure to enforce such right could have
a Material Adverse Effect, Borrower shall use all commercially reasonable
efforts to cause such Person to enforce such rights.
5.23 Change of Chief Executive Office. Borrower and any Affiliate of
Borrower shall give Lender at least thirty (30) days' prior written notice of
any change in the location of its chief executive office from that existing on
the Closing Date.
SECTION 6
NEGATIVE COVENANTS OF BORROWER
Borrower hereby covenants and agrees that, from the date of this
Agreement until the indefeasible payment in full of all Obligations (other than
Contingent Obligations which by their terms survive the termination of the Loan
Documents) and full and complete performance of all of its and the Affiliates'
other obligations hereunder and under the other Loan Documents, Borrower shall
comply with all covenants in this Section 6. Any request for Lender's consent to
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Borrower's or any other Person's failure to comply with such covenants must be
made by Borrower in writing and any consent given by Lender shall also be in
writing.
6.1 No Liens. Borrower shall not directly or indirectly create, incur,
assume or permit to exist any Lien on or with respect to the Borrower Collateral
whether now owned or hereafter acquired by Borrower or any of the Affiliates, or
any income or profits therefrom, except for Permitted Liens.
6.2 Restriction on Fundamental Changes. None of Borrower or any
Affiliate shall (a) enter into any transaction of merger or consolidation; (b)
liquidate, wind-up or dissolve itself; or (c) convey, sell, lease, sublease,
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its business or assets (including,
without limitation, the Borrower Collateral) whether now owned or hereafter
acquired (unless the proceeds payable to Borrower from any such disposition of
assets shall be sufficient to pay in full all then-outstanding Obligations, in
which case such proceeds shall be paid to Lender and Lender shall apply the same
in accordance with Section 2.6(c)).
6.3 Transactions with Affiliates. None of Borrower or any Affiliate
shall enter into any transaction, including, without limitation, the purchase,
sale, transfer, lease or exchange of property or the rendering or purchase of
any service to or from any Affiliate, except in the ordinary course of, and
pursuant to the reasonable requirements of, Borrower's or such Affiliate's
business and on reasonable terms no different than are available in a comparable
arm's-length transaction with an unaffiliated Person. This Section 6.3 shall not
be construed to prohibit any contract in effect on the Closing Date, including
without limitation the O&M contracts referenced in Section 3.2(a)(i).
6.4 Changes to Material Agreements. Without the prior written consent
of Lender (which shall not be unreasonably withheld), no Material Agreement
shall be amended, and no obligation under the Material Agreements shall be
modified (whether by waiver or otherwise), if such amendment or modification
would, in the reasonable opinion of Lender, have a Material Adverse Effect on
Borrower or any Affiliate or the ability of any of them to perform its
obligations under the Loan Documents.
6.5 Contingent Obligations. None of Borrower or any Affiliate shall
directly or indirectly create, incur, assume, guarantee or otherwise become or
62
remain directly or indirectly liable with respect to any Contingent Obligation,
except (a) any existing Indebtedness described in Exhibit 6.6, (b) other
existing Contingent Obligations described in Exhibit 6.5, or (c) pursuant to
Letters of Credit issued hereunder.
6.6 Indebtedness. None of Borrower or any Affiliate shall directly or
indirectly create, incur, assume, guarantee or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except existing
Indebtedness described in Exhibit 6.6 and as otherwise permitted by any Loan
Document.
6.7 Security Documents. None of Borrower or any Affiliate shall take
or, to the extent of such Person's power, permit any other Person to take, any
action (or omit to take any action) which would be in violation of the
arrangements provided in the Security Documents (taking into account any periods
for notice and cure provided in the Security Documents).
6.8 Borrower Revenues. None of Borrower or any Affiliate shall receive
any Borrower Revenues (other than amounts due Lender or payments made pursuant
to any Loan Document) upon the occurrence and during the continuation of an
Event of Default.
SECTION 7
RIGHTS AND REMEDIES OF LENDER
7.1 Acceleration. In addition to all other rights and remedies Lender
has under this Agreement and the other Loan Documents, upon the occurrence of an
Event of Default, Lender shall have the right, upon five (5) Business Days'
prior written notice to Borrower (provided, that no such notice shall be
required as a result of any Event of Default described in clause g, h, i, j or k
of the definition of Event of Default, upon the occurrence of which the
Obligations shall become immediately due and payable), at its option and sole
discretion, to declare all or any portion of the Obligations immediately due and
payable without presentment, demand, set off, protest or notice of any kind,
except as provided in this Section 7.1, including, without limitation, notice of
intent to accelerate, all of which are hereby expressly waived by Borrower;
provided, that if Borrower shall, before the expiration of such five (5)
Business Day period, cure such Event of Default, the Lender's rights under this
Section 7.1 with respect to such cured Event of Default shall cease.
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7.2 Additional Remedies of Lender. In addition to all other rights and
remedies Lender has under this Agreement and the other Loan Documents, if an
Event of Default shall have occurred and be continuing, Lender shall have the
following rights and remedies:
(a) The right to collect and apply to the Obligations, pursuant
to the Security Agreement, the Disbursement Instructions and Section
7.3 hereof, all Borrower Revenues and cash held in the Accounts;
(b) All of the rights and remedies of a secured party under the
UCC (whether or not the UCC applies to the affected Borrower
Collateral) and other applicable laws, all of which rights and
remedies shall be cumulative and non-exclusive to the extent permitted
by law;
(c) The right to notify postal authorities to change the address
for delivery of Borrower's mail to an address designated by Lender and
to receive, open and dispose of, in a reasonable manner, all mail
addressed to Borrower (provided, that Lender shall return to Borrower
in a timely manner all such mail that does not involve the Projects or
the Borrower Collateral);
(d) The right to take possession of Borrower's original books and
records, obtain access to Borrower's data processing equipment,
computer hardware and software relating to the Borrower Collateral and
to use all of the foregoing and the information contained therein in
any manner Lender deems appropriate for purposes of realizing on the
Borrower Collateral;
(e) (i) Prepare, file and sign Borrower's name on any proof of
claim in bankruptcy or similar document against any account debtor of
Borrower, (ii) prepare, file and sign Borrower's name on any notice of
Lien, assignment or satisfaction of Lien or similar document in
connection with the Accounts or any note, chattel paper or instrument,
(iii) do all acts and things necessary, in Lender's discretion, to
fulfill Borrower's Obligations, including, without limitation,
withdrawing all cash from the Accounts and applying such monies in
payment of the Obligations, (iv) use Borrower's stationery and sign
the name of Borrower to verifications of the Accounts and notices
thereof to account debtors, and (v) use the information recorded on or
contained in any
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data processing equipment and computer hardware and software relating
to the Accounts;
(f) The right to (i) sell or otherwise dispose of all or any
portion of the Borrower Collateral successively and/or in any sequence
and/or in any order at any judicial and/or public and/or private sale
or sales, or any part thereof, for cash, credit or any combination
thereof, and Lender may purchase all or any part of the Borrower
Collateral at public or, if permitted by law, private sale and, in
lieu of actual payment of such purchase price, may set off the amount
of such price against the Obligations and (ii) adjourn such sales from
time to time with or without notice. To the extent permitted by law,
Borrower hereby expressly waives all rights of redemption, stay or
appraisal which it has or may have under any law now existing or
hereafter enacted; and
(g) Borrower hereby appoints Lender as its attorney-in-fact, with
full power of substitution, and in the name of Borrower, if Lender
elects to do so following the occurrence and during the continuance of
an Event of Default, to (i) endorse the name of Borrower on any check
or draft representing proceeds of the Insurance Policies, or other
checks or instruments payable to Borrower with respect to any Project,
and (ii) prosecute or defend any action or proceeding incident to any
of the Borrower Collateral. The power-of-attorney granted hereby is a
power coupled with an interest and is irrevocable but shall terminate
at such time as the Obligations have been indefeasibly paid in full.
Lender shall have no obligation to undertake any of the foregoing
actions and if Lender should do so, it shall have no liability to
Borrower for the sufficiency or adequacy of any such actions taken by
Lender.
7.3 Application of Proceeds. The proceeds of any sale of, or other
realization upon, all or any part of the Borrower Collateral and of Borrower's
cash held by Lender shall be applied in accordance with the provisions of the
Security Agreement.
7.4 Notices. To the extent there is any notice required to be given by
Lender of a sale, lease, other disposition of the Borrower Collateral or any
other intended action by Lender hereunder, Borrower expressly agrees that notice
given ten (10) days prior to such proposed action shall constitute commercially
reasonable and fair notice thereof.
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7.5 Funds of Lender. Any funds of Lender used for any purpose referred
to in this Section 7 shall constitute part of the Obligations secured by the
Borrower Collateral and the Loan Documents and shall bear interest at the
Default Rate from the date of occurrence, and through the continuance, of any
Event of Default.
7.6 No Waiver or Exhaustion. No waiver by Lender of any of its rights
or remedies hereunder, in the other Loan Documents or otherwise, shall be
considered a waiver of any other or subsequent right or remedy of Lender, and no
waiver shall be valid unless in writing signed by Lender. Any amendment,
modification, termination or waiver shall be effective only in the specific
instance and for the specific purpose for which it was given. No delay or
omission in the exercise or enforcement by Lender of any right or remedy shall
ever be construed as a waiver of any right or remedy of Lender and any single or
partial exercise of any such right or remedy shall not preclude any other or
further exercise thereof or the exercise of any other right; and no exercise or
enforcement of any such right or remedy shall ever be held to exhaust any right
or remedy of Lender. Borrower hereby expressly waives presentment, demand,
notice of non-payment, protest, notice of protest and dishonor, notice of Event
of Default, notice of intent to accelerate, notice of acceleration or any other
notice whatsoever on any and all forms of the Obligations, except for those
notices provided for in any Loan Document, including, without limitation, those
notices which are a prerequisite for certain Defaults ripening into Events of
Default. No notice to or demand on Borrower in any case shall entitle Borrower
to any other or further notice or demand in similar or other circumstances. Any
of the undertakings, agreements, warranties, covenants and representations of
Borrower or any Affiliate contained in the Loan Documents and any Event of
Default may be waived or modified in writing at Lender's discretion but none of
the undertakings, agreements, warranties, covenants and representations of
Borrower or any Affiliate contained in the Loan Documents and no Event of
Default shall be deemed to have been suspended or waived by Lender unless such
suspension or waiver is by an instrument in writing specifying such suspension
or waiver and is signed by a duly authorized representative of Lender and
directed to Borrower.
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SECTION 8
GENERAL TERMS AND CONDITIONS
8.1 Expenses and Attorneys' Fees. Whether or not the transactions
contemplated hereby shall be consummated, Borrower agrees to pay promptly all
reasonable fees, costs and expenses incurred by Lender in connection with any
matter contemplated by or arising out of this Agreement or the other Loan
Documents, including, without limitation, the following (but excluding any fee
deemed to have been paid by Borrower's payment of a Work Fee), and all such
fees, costs and expenses shall be part of the Obligations, payable on demand and
secured by the Borrower Collateral: (a) reasonable fees, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses, and
reasonable fees and expenses of any Independent Engineer, consultant, industry
consultant, accountant and other professional retained by Lender) incurred in
connection with the examination, review, due diligence investigation,
documentation, syndication and closing of the financing arrangements evidenced
by the Loan Documents; (b) reasonable fees, costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses, and reasonable fees
and expenses of any Independent Engineer, industry consultant, accountant and
other professional retained by Lender) incurred in connection with the
negotiation, preparation, execution and administration of the Loan Documents,
the Loans and any amendment, modification and waiver relating thereto,
(including, without limitation, out-of-pocket expenses for travel, lodging and
meals for inspections); (c) reasonable fees, costs and expenses of the
Independent Engineer in connection with the examination and review of all work
actions performed pursuant to Section 5.21; (d) reasonable fees, costs and
expenses incurred in creating, perfecting and maintaining perfection of Liens in
favor of Lender, pursuant to any Loan Document, including lien search fees,
filing and recording fees, taxes and expenses, title insurance policy fees,
reasonable fees and expenses of attorneys for providing such opinions as Lender
may reasonably request and reasonable fees and expenses of attorneys to Lender;
(e) reasonable fees, costs, expenses and bank charges, including bank charges
for returned checks, incurred by Lender in establishing, maintaining and
handling lock box accounts, blocked accounts or other accounts for collection of
the Borrower Collateral; (f) reasonable fees, costs, expenses (including,
without limitation, reasonable attorneys' fees and expenses) and costs of
settlement incurred in collecting upon or enforcing rights against the Borrower
Collateral; and (g) fees, costs and expenses (including, without limitation,
attorneys' fees and expenses and fees and expenses of other professionals
retained by Lender) incurred in any action to enforce this Agreement or the
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other Loan Documents or to collect any payment due from Borrower under this
Agreement, the Notes or any other Loan Document or incurred in connection with
any refinancing or restructuring of the credit arrangements provided under this
Agreement, whether in the nature of a "workout" or in connection with any
insolvency or bankruptcy proceeding or otherwise. For purposes of this Section
8.1, expenses of third-party consultants incurred after the Closing Date shall
be due and payable in full no later than thirty (30) days after the same are
invoiced or billed to Borrower.
8.2 Indemnity by Borrower.
(a) In addition to the payment of expenses pursuant to Section 8.1,
whether or not the transactions contemplated hereby shall be consummated,
Borrower shall, subject to the provisions of this Section 8.2, indemnify, pay
and hold Lender, and any holder of any Note, and the officers, directors,
employees, agents, affiliates and attorneys of Lender and such holder
(collectively, the "Indemnitees") harmless from and against any and all
out-of-pocket liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever (including, without limitation, reasonable attorneys' fees and
costs of the Indemnitees in connection with any investigative, arbitral,
administrative or judicial proceeding commenced or threatened, whether or not
the Indemnitees shall be designated a party thereto) that are imposed on,
incurred by or asserted against any Indemnitee, in any manner relating to or
arising out of this Agreement or the other Loan Documents, Lender's agreement to
make the Loans hereunder, the use or intended use of the proceeds of any Loan or
the exercise of any right or remedy hereunder or under any other Loan Document
(collectively, the "Indemnified Liabilities"); provided, that (i) no Indemnitee
shall be held harmless or indemnified hereunder for its own gross negligence,
willful misconduct or bad faith or breach of this Agreement or any other Loan
Document, and (ii) nothing herein shall affect the obligations and liabilities
of Lender to Borrower contained herein or in any other Loan Document. Borrower
shall be obligated to pay or reimburse each Indemnitee for all reasonable
out-of-pocket costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred by such Indemnitee in the defense of any
claim arising out of any Indemnified Liability at the time such costs and
expenses are incurred and Lender has given Borrower written notice thereof. The
foregoing indemnity shall remain operative and in full force and effect
regardless of the termination of this Agreement, the consummation of the
transactions contemplated by this Agreement or any of the Loan Documents, the
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repayment of the Loans and the Obligations, the invalidity or unenforceability
of any term or provision of this Agreement or any other Loan Document, or any
investigation made on behalf of Lender or the content or accuracy of any
representation or warranty made by Borrower or any Affiliate under this
Agreement or any other Loan Document. Lender may (but shall not be obligated to)
appear in, or defend, or in good faith commence any action or proceeding
purporting to affect the Loans, any property or the respective rights and
obligations of Lender and Borrower or any Affiliate pursuant to any Loan
Document. Lender may (but shall not be obligated to) pay all necessary expenses,
including reasonable attorneys' fees and expenses incurred in connection with
such proceedings or actions, which Borrower agrees to repay to Lender upon
demand together with interest thereon at the Interest Rate then applicable to
the Senior Loan (or the Default Rate, if applicable) from the date of payment by
Lender to the date of repayment by Borrower. To the extent that the undertaking
to indemnify, pay and hold harmless set forth in this Section 8.2 may be
unenforceable because it is violative of any law or public policy, Borrower
shall contribute the maximum portion that it is permitted to pay and satisfy
under applicable laws to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them.
(b) In addition to any other indemnity hereunder, Borrower shall
indemnify and hold the Indemnitees harmless against, and promptly pay on demand
or reimburse each of them with respect to, any and all claims, demands, causes
of action, losses, damages, liabilities, costs and expenses of any and every
kind or nature whatsoever, including, without limitation, those based upon
negligence, sole negligence, contractual comparative negligence, concurrent
negligence or strict liability, asserted against or incurred by any of them by
reason of or arising out of or in any way related to (i) the breach by Borrower
or any Affiliate of any representation or warranty set forth herein regarding
Environmental Laws, (ii) the failure of Borrower or any Affiliate to perform any
obligation required herein or in any Loan Document or any Material Agreement to
be performed pursuant to Environmental Laws, and (iii) any violation or alleged
violation by Borrower or any Affiliate of any obligation or liability arising
under any Environmental Law (collectively, the "Environmental Indemnity
Matters"). Borrower shall be obligated to pay or reimburse each Indemnitee for
all reasonable out-of-pocket costs and expenses (including, without limitation,
consultants', engineers' and attorneys' fees and expenses) incurred by such
Indemnitee in response to and/or in the defense of any claim arising out of any
Environmental Indemnity Matter at the time such costs and expenses are incurred
and such Indemnitee has given Borrower written notice thereof. The provisions of
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this Section 8.2(b) shall be payable upon written demand therefor, shall survive
the final payment of all of the Obligations and the termination of this
Agreement and shall continue thereafter in full force and effect.
8.3 Notice and Defense of Claim.
(a) Each Indemnitee shall give prompt notice to Borrower, in
accordance with the terms of this Section 8.3, of the assertion of any claim, or
the commencement of any suit, action or proceeding by any party in respect of
which such Indemnitee may seek indemnification hereunder, specifying with
reasonable particularity the basis therefor and shall give Borrower such
information with respect thereto as Borrower may reasonably request. Borrower
may, at its own expense, (i) participate in and (ii) upon notice to such
Indemnitee and Borrower's written agreement that such Indemnitee is entitled to
indemnification pursuant to Section 8.1 or 8.2 for any liability or loss arising
out of such claim, suit, action or proceeding, at any time during the course of
any such claim, suit, action or proceeding, assume the defense thereof with
counsel reasonably acceptable to Lender. If Borrower assumes such defense, such
Indemnitee shall have the right (but not the duty) to participate in the defense
thereof and to employ counsel, at its own expense, separate from the counsel
employed by Borrower. Whether or not Borrower chooses to defend or prosecute any
such claim, suit, action or proceeding, all of the parties hereto shall
cooperate in the defense or prosecution thereof.
(b) In the event that Borrower does not elect to assume the defense of
any claim, suit, action or proceeding, then any failure of any Indemnitee to
defend or to participate in the defense of any such claim, suit, action or
proceeding or to cause the same to be done shall not relieve Borrower of its
obligations hereunder; provided, that such Indemnitee gives Borrower at least
thirty (30) days' notice of its proposed failure to defend or participate and
affords Borrower the opportunity to assume the defense thereof.
8.4 Amendments and Waivers. No amendment, modification, termination or
waiver of any provision of this Agreement or any other Loan Document or consent
to any departure by Borrower therefrom, shall in any event be effective without
the written concurrence of Lender and Borrower. No amendment, modification,
termination or waiver of the principal amount, maturity, amortization rate or
seniority level of any Loan or commitment or the rate of interest applicable to
and fees payable with respect to any Loan (other than fees payable solely to
Lender) shall be effective without the written concurrence of the holder of such
70
Loan or commitment. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given. No notice
to or demand on Borrower in any case shall entitle Borrower to any other or
further notice or demand in similar or other circumstances.
8.5 Retention of Borrower Documents. Lender may, in accordance with
Lender's customary practices, destroy or otherwise dispose of all documents,
schedules, invoices or other papers delivered by Borrower or an affiliate of
Borrower to Lender unless Borrower or any Affiliate requests in writing that
same be returned. Upon Borrower's request and at Borrower's expense, Lender
shall return such papers when Lender's actual or anticipated need for the same
has terminated.
8.6 Notices. Unless otherwise specifically provided herein, any notice
or other communication required or permitted to be given shall be in writing
addressed to the respective party as set forth below and may be personally
served, telecopied or sent by overnight courier service or United States mail
(return receipt requested) and shall be deemed to have been given (a) if
delivered in person, when delivered; (b) if delivered by telecopy, on the date
of transmission if transmitted on a Business Day before 4:00 p.m. (New York, New
York time) or, if not, on the next succeeding Business Day; (c) if delivered by
reputable overnight courier, two (2) days after delivery to such courier
properly addressed; or (d) if by U.S. Mail, four (4) Business Days after deposit
in the United States mail, with postage prepaid and properly addressed.
Notices shall be addressed as follows:
If to Borrower:
BP HYDRO FINANCE PARTNERSHIP
111 West North Bend Way
P.O. Box 1029
North Bend, Washington 98045
Attention: Mr. Donald P. Jarrett
Telecopy: (206) 888-2780
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With a copy to:
CONSOLIDATED HYDRO, INC.
680 Washington Boulevard
Suite 500
Stamford, Connecticut 06901
Attention: Mr. Patrick J. Danna
Telecopy: (203) 425-8880
If to Lender:
LYON CREDIT CORPORATION
1266 East Main Street
Stamford, Connecticut 06902
Attention: Mr. Jerome P. Peters, Jr.
Telecopy: (203) 328-9339
With a copy to:
CHADBOURNE & PARKE LLP
1101 Vermont Avenue, N.W.
Washington, D.C. 20005
Attention: Cornelius J. Golden, Jr., Esq.
Telecopy: (202) 289-3002
or in any case, to such other address as the party addressed shall have
previously designated by written notice to the serving party, given in
accordance with this Section 8.6. A notice not given as provided above shall, if
it is in writing, be deemed given if and when actually received by the party to
whom given.
8.7 Survival of Representations, Warranties, Covenants and Certain
Agreements.
(a) All representations, warranties, covenants and agreements made
herein shall survive the execution and delivery of this Agreement and the making
of the Loans hereunder.
(b) Notwithstanding the foregoing or anything in this Agreement or
implied by law to the contrary, the obligations of Borrower set forth in
Sections 5.1, 5.5, 5.6, 8.1, 8.2, 8.3, 8.8, 8.16, 8.17 and 8.21 hereof (and, in
each case, the defined terms used therein) shall survive the payment of the
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Loans and the termination of this Agreement and any other Loan Document;
provided, that the obligations of Borrower to Lender contained in Sections 5.1
and 5.6 shall terminate thirteen (13) months after the indefeasible payment in
full of all Obligations.
8.8 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of Lender or any holder of any Loan in the exercise of any
power, right or privilege hereunder or under the other Loan Documents shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege. All rights and remedies existing under this
Agreement and any other Loan Document are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
8.9 Marshaling; Payments Set Aside. Lender shall not be under any
obligation to marshal any assets in favor of Borrower or any other party or
against or in payment of any or all of the Obligations. To the extent that
Borrower makes a payment or payments to Lender, Lender enforces its Liens and
security interests or exercises its rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
Debtor Relief Law, state or federal law, common law or equitable cause, then to
the extent of such recovery, the Obligations or part thereof originally intended
to be satisfied, and all Liens, rights and remedies therefor, shall be revived
and continued in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.
8.10 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of an Event of Default if such action is taken or such condition
exists.
8.11 Severability. The invalidity, illegality or unenforceability of
any provision in or obligation under this Agreement or the other Loan Documents
shall not affect or impair the validity, legality or enforceability of the
remaining provisions or obligations under this Agreement or the other Loan
Documents or of such provision or obligation in any other jurisdiction.
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8.12 Headings. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
8.13 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
8.14 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns; provided, the rights and duties of Borrower under the Loan
Documents may not be assigned or delegated, whether by operation of law or
otherwise, and any such purported assignment or delegation shall be void.
8.15 No Fiduciary Relationship or Partnership. No provision in this
Agreement or in any of the other Loan Documents and no course of dealing among
Borrower and Lender shall be deemed to create any fiduciary duty or any
partnership, joint venture or other business relationship other than that of
borrower and lender.
8.16 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. BORROWER HEREBY
CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OF NEW YORK COURT OR
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND IRREVOCABLY AGREES
THAT, SUBJECT TO LENDER'S ELECTION, ALL ACTIONS OR PROCEEDINGS RELATING TO THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS.
BORROWER ACCEPTS FOR AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES
ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS OR THE OBLIGATIONS. BORROWER HEREBY DESIGNATES AND APPOINTS MESSRS.
CAHILL, GORDON & REINDEL AND OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY
BORROWER WHICH IRREVOCABLY AGREE IN WRITING TO SO SERVE AS ITS
74
AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY BORROWER TO BE
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO
SERVED SHALL BE MAILED BY REGISTERED MAIL TO BORROWER AT ITS ADDRESS PROVIDED IN
SECTION 8.6 EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE
TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY
AGENT APPOINTED BY BORROWER REFUSES TO ACCEPT SERVICE, BORROWER AGREES THAT
SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL
AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER JURISDICTION PERMITTED BY LAW OR
SHALL LIMIT THE RIGHT OF LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION IF NECESSARY TO ENFORCE THE JUDGMENT RENDERED
BY ANY COURT IN THE STATE OF NEW YORK.
8.17 WAIVER OF JURY TRIAL. BORROWER AND LENDER HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION AND THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. BORROWER AND LENDER ALSO
WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS
WAIVER, BE REQUIRED OF LENDER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. BORROWER AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO
75
RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWER AND LENDER FURTHER
WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL,
AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED, EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT,
THE LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE
LOANS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
8.18 Counterparts; Effectiveness. This Agreement and any amendment,
waiver, consent or supplement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which
counterparts together shall constitute but one and the same instrument. This
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.
8.19 Assignment and Participation. Lender may, without notice to or
the consent of Borrower, assign its rights and delegate its obligations
hereunder and under the other Loan Documents and Lender may assign, or sell
participations in, all or any part of the Loans, Lender's commitments, Lender's
fees or any of Lender's other interests herein or in the other Loan Documents to
no more than two (2) other parties; provided, that such participants are banks
or institutional investors with knowledge and experience in project finance and
who do not have an existing relationship with any Project, including any equity
investor, senior or subordinated debt investor and other contract party (such
Person, a "Permitted Investor"). Borrower shall have the right to consent, which
consent shall not be unreasonably withheld, to the participation in the Loans by
any Person who is not a Permitted Investor. Following any such assignment, the
term "Lender" as used herein shall include such assignee or assignees.
8.20 Reproduction of Documents. This Agreement and all documents
related hereto, including, without limitation (a) consents, waivers and
76
modifications which may hereafter be executed, (b) documents received by Lender
or Borrower at the closing of this Agreement, and (c) financial statements,
certificates and other information and documentation heretofore or hereafter
furnished to Lender or Borrower, may be reproduced by Lender by any
photographic, photostatic, microfilm, microcard, microfiche, miniature
photographic or other similar process, and Lender or Borrower may destroy any
original document so reproduced. Lender and Borrower agree and stipulate that
any such reproduction shall be admissible in evidence as the original itself in
any judicial, arbitration or administrative proceeding (whether or not the
original is in existence and whether or not any such reproduction was made by
Lender or Borrower in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
8.21 Controlling Agreement. Except as otherwise provided in this
Agreement and except as otherwise provided in the other Loan Documents by
specific reference to the applicable provisions of this Agreement, if any
provision contained in this Agreement is in conflict with, or inconsistent with,
any provision in the other Loan Documents, the provision contained in this
Agreement shall govern and control; provided, to the extent that the terms and
provisions of the Security Documents impose greater duties, obligations,
liabilities or standards of care upon Borrower, including, without limitation,
covenants concerning the maintenance or use of the Borrower Collateral, the
terms and provisions of the Security Documents shall control.
8.22 Termination of Commitment. Borrower and Lender hereby agree that,
by their execution and delivery of this Agreement, all obligations, duties and
liabilities of Lender under that certain commitment letter delivered by Lender
to Borrower and dated September 19, 1996, relating to the Loans, shall terminate
and such letter, as amended, shall be of no further force and effect. Each party
hereto acknowledges and agrees that Lender has made no agreement or commitment
to provide any financing to Borrower except as expressly set forth herein.
8.23 Entire Agreement. This Agreement, the other Loan Documents and
any other document executed contemporaneously herewith, memorialize and
constitute the final expression and the complete and exclusive statement among
the parties with respect to the subject matter hereof and thereof. There are no
writings, conversations, representations, warranties or agreements that the
parties intend to be a part hereof except as expressly set forth in this
Agreement, the other Loan Documents and any other document executed
contemporaneously herewith, or to be set forth in the instruments and other
77
documents delivered or to be delivered hereunder and thereunder. This Agreement,
the other Loan Documents and any other document executed contemporaneously
herewith represent the entire agreement among the parties and supersede all
previous written or oral agreements or discussions among the parties and any
other Person concerning the transactions contemplated herein and therein.
8.24 Confidentiality. Lender and Borrower hereby agree to exercise
their best efforts to keep any information delivered or made available pursuant
to this Agreement confidential from anyone other than persons employed or
retained by Lender or assisting Borrower who are or are expected to become
engaged in evaluating, approving, structuring or administering the Loans;
provided, that nothing herein shall prevent Lender from advertising and/or
publicizing the transactions contemplated hereunder in a "tombstone" or
otherwise, or from disclosing such information to any bona fide potential
assignee, transferee or participant that has agreed to comply with this Section
8.24 in connection with the contemplated assignment or transfer of any Loans or
participation therein or as required or requested by any Governmental Authority
or pursuant to legal process or as required in connection with the exercise of
any remedy under the Loan Documents.
8.25 Release of Lender with Respect to Original Credit Agreement.
Borrower, acting on behalf of itself, the Affiliates and its successors and
assigns, and their officers, directors, employees, managers, attorneys,
accountants, agents, servants, shareholders and partners, hereby releases and
forever discharges Lender and its successors and assigns, subsidiaries and
affiliates, officers, directors, employees, managers, attorneys, accountants,
agents and servants, and each of them, in all capacities, including
individually, from any and all actions, liabilities, liens, debts, damages,
claims, suits, judgments, executions and demands of every kind, nature and
description, including but not limited to tort claims, that any of them may have
against Lender as assignee of Fuji Bank in connection with the Original Credit
Agreement, the Fuji Note and the related contracts and accounts assigned by Fuji
Bank to Lender on the Closing Date (such contracts and accounts, the "Fuji
Agreements") to the same extent as Borrower has released Fuji Bank from all
similar liabilities pursuant to the Release Agreement, dated the Closing Date,
by and among Borrower, the Project Owners, CHI-West, Inc., a Delaware
corporation, CHI-Magic Valley, Inc., a Delaware corporation, CHI-Idaho, Inc., a
Delaware corporation, Consolidated Hydro, Inc., a Delaware corporation, and Fuji
Bank.
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IN WITNESS WHEREOF, this First Amended and Restated Credit Agreement
has been duly executed as of the day and year first above written.
LYON CREDIT CORPORATION
By_____________________________________________
Name:
Title:
BP HYDRO FINANCE PARTNERSHIP, a
Utah general partnership
By: BP HYDRO ASSOCIATES, an Idaho general
partnership, its general partner
By: CHI-IDAHO, INC., a Delaware
corporation, its general partner
By___________________
Name:
Title:
79
By: CHI-MAGIC VALLEY, INC., a Delaware
corporation, its general partner
By___________________
Name:
Title:
By: FULCRUM, INC., an Idaho corporation, its
general partner
By________________________
Name:
Title:
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Exhibit 1.1
to First Amended and Restated
Credit Agreement
Description of Projects
[to be provided by Borrower]
Exhibit 1.2
to First Amended and Restated
Credit Agreement
Form of
Disbursement Instructions
-------------------------
[Letterhead of Borrower or Affiliate]
October __, 1996
[Payor] ("Payor")
[Address]
[Address]
Re: Payments to [Borrower/Affiliate]
Ladies and Gentlemen:
Reference is hereby made to that certain First Amended and Restated
Credit Agreement, dated October __, 1996, between Lyon Credit Corporation, a
Delaware corporation ("Lender"), and BP Hydro Finance Partnership, a Utah
general partnership (as amended, modified and supplemented, the "Credit
Agreement").
We hereby irrevocably instruct you, for the benefit of Lender, to
distribute all amounts which are payable to us pursuant to [contract] to the
following account at Fleet National Bank:
Account No. _____________
ABA No. 011900571
Attention: Mr. Donald P. Jarrett
Reference: BP Hydro
Except as otherwise specifically provided for herein, these
instructions may not be amended or revoked without the prior written consent of
Lender, which consent may be withheld in Lender's sole and absolute discretion
until such time as all amounts payable under the Credit Agreement have been
paid, at which time Lender shall deliver to you a written revocation of these
instructions. Please execute your acknowledgment of receipt of these
instructions in the space provided below.
Very truly yours,
[Borrower/Affiliate]
By____________________________
Name:
Title:
RECEIVED AND ACKNOWLEDGED:
Payor hereby agrees, for the benefit of Lender, to distribute all
amounts which are payable to [Borrower/Affiliate] pursuant to [contract]
pursuant to the terms and provisions of this letter agreement until such time as
a written notice from Lender has been received revoking these instructions.
[Payor]
By____________________________
Name:
Title:
2
Exhibit 1.3
to First Amended and Restated
Credit Agreement
Pro Forma Cash Flow Projections
[to be provided by Lender]
Exhibit 1.5
to First Amended and Restated
Credit Agreement
Form of Security Agreement
[draft distributed]
Exhibit 1.6
to First Amended and Restated
Credit Agreement
FORM OF
[SENIOR LOAN/ADDITIONAL CREDIT FACILITY]
NOTE
[New York, New York]
$[maximum principal amount] October __, 1996
FOR VALUE RECEIVED, the undersigned Borrower, with its principal place
of business at 111 West North Bend Way, P.O. Box 1029, North Bend, Washington
98045, (hereinafter referred to as "Maker"), hereby promises to pay to the order
of LYON CREDIT CORPORATION, a Delaware corporation, with a place of business at
1266 East Main Street, Stamford, Connecticut 06902 (hereinafter referred to as
"Holder"), by wire transfer to Holder's account at Fleet National Bank, ABA No.
011900571, Account No. 7030-0226, Reference: Lyon Credit Corporation for the
benefit of BP Hydro Loans, or at such other place or places and to such account
or accounts as Holder may direct from time to time by notice to Maker in
accordance with the Credit Agreement (as hereinafter defined), the principal sum
of [maximum principal amount] ($________________) or the aggregate unpaid
principal amount of the [Senior Loan/Additional Credit Facility] made to Maker
by Holder pursuant to the Credit Agreement in lawful money of the United States
of America in immediately available funds, payable, subject to the fourth
paragraph hereof, in forty-nine (49) Scheduled Installments on March 31, June
30, September 30 and December 31 of each year, such Scheduled Installments
commencing on December 31, 1996, the amount of each such Scheduled Installment
being computed by multiplying the sum of [the Initial Disbursement and any other
portion of the Senior Loan Commitment drawn as collateral for a Letter of
Credit/all Advances on this Note] by the percentage opposite the date of such
Scheduled Installment on Schedule I attached hereto (provided, the final such
Scheduled Installment shall be in an amount sufficient to repay in full unpaid
principal amount of this Note and the amount of any outstanding Letters of
Credit, whether or not drawn upon), or on such earlier date as the same may
become due and payable hereunder or under the Credit Agreement. Capitalized
terms used herein and not defined herein shall have the same meanings as set
forth in the Credit Agreement.
Maker further promises to pay interest on the outstanding principal
amount hereof in accordance with the Credit Agreement on such dates and in such
amounts as determined in accordance with the Credit Agreement. In no contingency
or event whatsoever shall the interest rate charged pursuant to the terms of
this Note exceed the maximum amount of interest permitted by applicable law. In
the event that a court of competent jurisdiction determines that the Credit
Agreement provides for interest in excess of the maximum amount of interest
permitted by applicable law, the provisions of Section 2.4(c) of the Credit
Agreement shall apply.
Maker hereby irrevocably authorizes Holder to record on Schedule II
attached hereto the repayments of the principal amount hereof. The principal
amount of this Note outstanding from time to time shall be the principal amount
of the [Senior Loan/Additional Credit Facility] made to Maker by Lender less the
aggregate amount of all principal payments made thereon.
This Note is issued to evidence a Loan made pursuant to the provisions
of that certain First Amended and Restated Credit Agreement, dated as of October
__, 1996, by and between Holder and Maker (as from time to time in effect, the
"Credit Agreement"), as to which reference is hereby made for a statement of the
terms, conditions and covenants under which the indebtedness evidenced hereby
was made and is to be repaid, including those related to the acceleration of the
indebtedness represented hereby upon the occurrence of an Event of Default or
upon the termination of the financing of which this Note is a part pursuant to
the Credit Agreement. Payment of this Note is secured by the Borrower
Collateral. No voluntary prepayment of the indebtedness evidenced by this Note
is permitted except as provided in the Credit Agreement. This Note is subject to
mandatory prepayment as provided in the Credit Agreement; Schedule III attached
hereto indicates the percentage of the outstanding principal amount hereof
attributable to each Project.
Holder shall not be required to look to the Borrower Collateral for
the payment of this Note but may proceed against Maker in such manner as it
deems desirable. None of the rights or remedies of Holder hereunder are to be
deemed waived or affected by failure or delay on the part of Holder to exercise
the same. All remedies conferred upon Holder by this Note or any other
instrument or agreement shall be cumulative and none is exclusive, and such
remedies may be exercised concurrently or consecutively at Holder's option.
Maker hereby waives diligence, presentment, demand for payment,
protest and notice of protest, notice of dishonor and all other notices in
connection with the delivery, acceptance, performance, default or enforcement of
this Note.
This Note has been executed and delivered in [New York, New York] and
shall be governed by the laws of the State of New York without giving effect to
principles of conflicts of law. Maker hereby expressly and irrevocably agrees
and consents that any suit, action or proceeding arising out of or relating to
this Note may be instituted in either state or federal court (at Holder's
option) and, by the execution and delivery of this Note, Maker expressly waives
any objection which it may have now or hereafter to the venue or jurisdiction of
any such suit, action or proceeding, and irrevocably submits generally and
unconditionally to the jurisdiction of any such court in any such suit, action
or proceeding. By the execution and delivery of this Note, Holder and Maker
expressly waive their
2
respective rights to a jury trial of any claim or cause of action based upon or
arising out of this Note.
WITNESS the hand and seal of Maker.
BP HYDRO FINANCE PARTNERSHIP
By_______________________________
Name:
Title:
3
SCHEDULE I
AMORTIZATION SCHEDULE
---------------------
Percentage of Aggregate Amount of
Payment Date [Advances] to be Paid
------------ ---------------------
SCHEDULE II
Advances and Payments of Principal
----------------------------------
Amount of
Principal Paid Unpaid
Amount or Principal Notation Made
Date of Loan Prepaid Balance By
---- ------- ------- ------- --
SCHEDULE III
Allocation of Principal to Projects
-----------------------------------
Project
(as defined in the Credit
Agreement) Percentage of Principal Amount
---------- ------------------------------
Barber Dam
Dietrich Drop
Lowline Rapids
Rock Creek
------------------------------------
TOTAL: 100%
Exhibit 2.1(a)
to First Amended and Restated
Credit Agreement
Form of
Request For Advance
-------------------
__________________ __, 199_
Lyon Credit Corporation
Soundview Plaza
1266 East Main Street
Stamford, Connecticut 06902
Attn: Mr. Jerome P. Peters, Jr.
Ladies and Gentlemen:
BP Hydro Finance Partnership ("Borrower") hereby requests in
accordance with Section 2.3(b) of that certain First Amended and Restated Credit
Agreement, dated as of October 15, 1996 (the "Credit Agreement"), between Lyon
Credit Corporation ("Lender") and Borrower, that Lender disburse to Account No.
_____________ at [name and address of bank], ABA No. _____________,
______________ Dollars ($________) on __________ __, 199_. Capitalized terms
used herein and not otherwise defined shall have the meanings set forth in the
Credit Agreement.
The undersigned Authorized Officer of Borrower hereby certifies to
Lender that, on and as of the date of this notice (i) all representations made
by Borrower and each Affiliate under all Loan Documents are true as though made
on and as of this date, (ii) all obligations of Borrower and each Affiliate
under the Loan Documents required to be performed on or before the date hereof
have been properly performed or expressly waived in writing, (iii) all
conditions to the obligation of Lender to make the Advance pursuant to Section
3.1(b) of the Credit Agreement have been fully satisfied or expressly
waived in writing, and (iv) no Default or Event of Default exists or will result
from the making of the Advance.
Very truly yours,
BP HYDRO FINANCE PARTNERSHIP, a Utah
general partnership
By: BP HYDRO ASSOCIATES, an Idaho
general partnership,
its general partner
By: CHI-IDAHO, INC., a Delaware
corporation, its
general partner
By___________________
Name:
Title:
By: CHI-MAGIC VALLEY, INC., a
Delaware corporation,
its general partner
By___________________
Name:
Title:
By: FULCRUM, INC., an Idaho corporation,
its general partner
By________________________
Name:
Title:
2
Exhibit 2.1(b)
to First Amended and Restated
Credit Agreement
Form of
Receipt
-------
BP Hydro Finance Partnership, a Utah general partnership, hereby
acknowledges receipt from Lyon Credit Corporation, a Delaware corporation, of
the amount of ________________ Dollars ($______) by wire transfer in Federal
funds to Account No. __________ of [name and address of bank].
IN WITNESS WHEREOF, BP Hydro Finance Partnership has executed and
delivered this receipt by its duly authorized officer in [city], [state], this
____ day of _____________, 199_.
BP HYDRO FINANCE PARTNERSHIP, a Utah
general partnership
By: BP HYDRO ASSOCIATES, an Idaho
general partnership,
its general partner
By: CHI-IDAHO, INC., a Delaware
corporation, its
general partner
By___________________
Name:
Title:
By: CHI-MAGIC VALLEY, INC., a
Delaware corporation,
its general partner
By___________________
Name:
Title:
By: FULCRUM, INC., an Idaho corporation,
its general partner
By________________________
Name:
Title:
Exhibit 3.1
to First Amended and Restated
Credit Agreement
Form of
Assignment
----------
KNOW ALL MEN BY THESE PRESENTS, that [ASSIGNOR] ("Assignor") for
valuable consideration, receipt of which is hereby acknowledged, has, this ___
day of October, 1996, sold, assigned, transferred, conveyed and set over and
does hereby sell, assign, transfer, convey and set over unto LYON CREDIT
CORPORATION ("Lender"), in connection with the transactions contemplated by that
certain First Amended and Restated Credit Agreement, dated the date hereof
between Lender and [Borrower] (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), all right, title and interest of
Assignor in, to and under (including all moneys due and to become due to
Assignor under), and does hereby grant to Lender a first priority security
interest in, each of the Agreements listed on Schedule I hereto (as any of the
same may from time to time be amended, supplemented or otherwise modified, the
"Assigned Agreements"). Capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Credit Agreement.
This Assignment is made as collateral security for all obligations of
Borrower to Lender under the Credit Agreement and the other Loan Documents and
is subject to all of the terms and conditions of the Loan Documents. All right,
title and interest of Assignor in, to and under the Assigned Agreements shall
from the date hereof constitute part of the Borrower Collateral for all purposes
of the Loan Documents.
Assignor hereby irrevocably authorizes and directs each Contract Party
listed in Schedule I hereto to pay all moneys, if any, due and to become due
under or by reason of any Assigned Agreement directly to the following account
of Fleet National Bank, as Disbursement Agent ("Disbursement Agent") under the
Security Agreement:
Account No. ____________
ABA No. 011900571
Attention: Susan Keller, Center 4125
Reference: BP Hydro
or to such other person or in such other manner as Disbursement Agent or Lender
may hereafter from time to time specify to such Contract Party in writing, until
such time as Lender shall notify such Contract Party that this Assignment has
been terminated and released.
This Assignment shall not cause Disbursement Agent or Lender to be
under any obligation to Assignor or any Contract Party for the performance or
observance of any of the representations, warranties, terms or conditions of any
Assigned Agreement.
Notwithstanding this Assignment, Assignor shall be and remain
obligated to each Contract Party to perform all of Assignor's obligations and
agreements under the Assigned Agreements, and each Contract Party shall be and
remain obligated to Assignor to perform such Contract Party's obligations and
agreements under the Assigned Agreements.
Assignor hereby irrevocably constitutes and appoints Lender as its
true and lawful attorney-in-fact with full and irrevocable power and authority
in the place and stead of Assignor and in the name of Assignor or in the name of
Lender, for the purpose of carrying out the terms of this Assignment and the
Loan Documents, to take any and all action and to execute any and all
instruments which may be necessary to accomplish the purposes of this
Assignment. This power-of-attorney is a power coupled with an interest and shall
be irrevocable.
Assignor hereby represents and warrants that it has not heretofore
assigned or otherwise disposed of or encumbered any right, title or interest of
Assignor in, to or under any Assigned Agreement or any moneys due or to become
due to Assignor under or by reason thereof, and that Assignor has the right and
power to transfer to Lender, absolute title to Assignor's right, title and
interest in, to and under each Assigned Agreement to which Assignor is a party
and in and to all the moneys due and to become due to Assignor under each
Assigned Agreement to which Assignor is a party.
This Assignment shall be governed by and construed in accordance with
the laws of the State of New York.
IN WITNESS WHEREOF, Assignor has caused this Collateral Assignment of
Agreements to be duly executed and delivered on the date first above written.
[ASSIGNOR]
By________________________________
Name:
Title:
2
Schedule I
Assigned Agreement Contract Party
------------------ --------------
Exhibit 3.2
to First Amended and Restated
Credit Agreement
Form of Consent to Assignment
[to come; based on contract party's preferences]
Exhibit 4.1
to First Amended and Restated
Credit Agreement
Foreign Jurisdictions
---------------------
[Borrower to provide]
Exhibit 4.2
to First Amended and Restated
Credit Agreement
Consents and Waivers
--------------------
[Borrower to provide]
Exhibit 4.3
to First Amended and Restated
Credit Agreement
Financing Statement Offices and Locations
-----------------------------------------
[Borrower to provide]
Exhibit 4.15
to First Amended and Restated
Credit Agreement
Material Agreements
-------------------
[Borrower to provide]
Exhibit 4.25
to First Amended and Restated
Credit Agreement
Accounts Receivable
-------------------
[Borrower to provide]
Exhibit 5.7
to First Amended and Restated
Credit Agreement
Form of
Certificate of Authorized Officer
---------------------------------
I, ____________________________, an Authorized Officer of BP Hydro
Finance Associates, a Utah general partnership ("Borrower"), hereby certify to
Lyon Credit Corporation ("Lender") pursuant to the requirements of Section 5.7
of the First Amended and Restated Credit Agreement, dated as of October 15, 1996
(the "Credit Agreement"), between Lender and Borrower and in connection with the
delivery to Lender of the information attached hereto as Schedule II required to
be delivered to Lender by Borrower pursuant to Sections 5.7(a) and (b) of the
Credit Agreement (the "Information"), that during the period covered by the
Information, the Minimum Coverage Ratio was ____ to ____, as calculated in
accordance with the provisions of the Credit Agreement.
Attached hereto as Schedule I is supporting information to allow
Lender to verify the foregoing calculations. All such calculations and
supporting information are, as of the date of this Certificate, true, complete
and accurate in every respect, and such calculations and supporting information
do not contain misleading information or omit to include information the
omission of which would be misleading. All such calculations and supporting
information, and the Information, comply in all material respects with the
requirements of the Credit Agreement and the other Loan Documents.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings set forth in the Credit Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of
_______________, 199_.
By_________________________
Name:
Title:
Exhibit 5.21
to First Amended and Restated
Credit Agreement
Report of Independent Engineer
------------------------------
[to be provided by Lender]
Exhibit 6.5
to First Amended and Restated
Credit Agreement
Contingent Obligations
----------------------
[Borrower to provide]
Exhibit 6.6
to First Amended and Restated
Credit Agreement
Indebtedness
------------
[Borrower to provide]
Schedule I
to First Amended and Restated
Credit Agreement
Applicable Permits
------------------
[Borrower to provide]
Schedule II
to First Amended and Restated
Credit Agreement
Articles of Incorporation and Partnership Agreements
----------------------------------------------------
[Borrower to provide]
Schedule III
to First Amended and Restated
Credit Agreement
Initial Disbursement and Closing Costs
--------------------------------------
[Lender to draft based on information provided by Borrower]
Schedule IV
to First Amended and Restated
Credit Agreement
Project Documents
-----------------
[Borrower to provide]
Schedule V
to First Amended and Restated
Credit Agreement
Schedule of Exceptions
----------------------
[Borrower to provide]
Schedule VI
to First Amended and Restated
Credit Agreement
Capital Leases
--------------
[Borrower to provide]