1
TABLE OF CONTENTS
SECTION PAGE
PRELIMINARY STATEMENTS
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms................................................. 1
SECTION 1.02. Computation of Time Periods; Construction............................. 30
SECTION 1.03. Accounting Terms...................................................... 31
ARTICLE II
COMMITMENTS
SECTION 2.01. The Commitments....................................................... 31
SECTION 2.02. Fees ............................................................... 32
SECTION 2.03. Reduction of the Commitments.......................................... 32
SECTION 2.04. Computations of Outstandings.......................................... 32
ARTICLE III
LOANS
SECTION 3.01. Loans ............................................................... 33
SECTION 3.02. Conversion of Loans................................................... 34
SECTION 3.03. Interest Periods...................................................... 35
SECTION 3.04. Other Terms Relating to the Making and Conversion of Loans............ 35
SECTION 3.05. Repayment of Loans; Term Loan Election; Interest...................... 38
SECTION 3.06. Additional Interest on Eurodollar Rate Loans.......................... 38
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.01. Issuing Banks......................................................... 39
SECTION 4.02. Letters of Credit..................................................... 39
SECTION 4.03. Issuing Bank Fees..................................................... 40
SECTION 4.04. Reimbursement to Issuing Banks........................................ 40
SECTION 4.05. Obligations Absolute.................................................. 41
SECTION 4.06. Liability of Issuing Banks and the Lenders............................ 41
-ii-
2
ARTICLE V
PAYMENTS, COMPUTATIONS AND YIELD PROTECTION
SECTION 5.01. Payments and Computations............................................. 42
SECTION 5.02. Interest Rate Determination........................................... 44
SECTION 5.03. Prepayments........................................................... 44
SECTION 5.04. Yield Protection...................................................... 45
SECTION 5.05. Sharing of Payments, Etc.............................................. 47
SECTION 5.06. Taxes ............................................................... 47
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. Conditions Precedent to Commitment Closing............................ 49
SECTION 6.02. Conditions Precedent to the Initial Extension of Credit............... 52
SECTION 6.03. Conditions Precedent to Each Extension of Credit...................... 52
SECTION 6.04. Determinations Under Sections 6.01 and 6.02........................... 53
SECTION 6.05. Reliance on Certificates.............................................. 53
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. Representations and Warranties of the Borrower........................ 53
ARTICLE VIII
COVENANTS OF THE BORROWER
SECTION 8.01. Affirmative Covenants................................................. 57
SECTION 8.02. Negative Covenants.................................................... 60
SECTION 8.03. Reporting Obligations................................................. 69
ARTICLE IX
DEFAULTS
SECTION 9.01. Events of Default..................................................... 71
SECTION 9.02. Remedies.............................................................. 75
ARTICLE X
THE ADMINISTRATIVE AGENT
-iii-
3
SECTION 10.01. Authorization and Action............................................. 76
SECTION 10.02. Indemnification...................................................... 78
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc...................................................... 78
SECTION 11.02. Notices, Etc......................................................... 79
SECTION 11.03. No Waiver of Remedies................................................ 79
SECTION 11.04. Costs, Expenses and Indemnification.................................. 80
SECTION 11.05. Right of Set-off..................................................... 81
SECTION 11.06. Binding Effect....................................................... 81
SECTION 11.07. Assignments and Participation........................................ 82
SECTION 11.08. Confidentiality...................................................... 86
SECTION 11.09. WAIVER OF JURY TRIAL................................................. 87
SECTION 11.10. Governing Law; Submission to Jurisdiction............................ 87
SECTION 11.11. Relation of the Parties; No Beneficiary.............................. 87
SECTION 11.12. Execution in Counterparts............................................ 87
SECTION 11.13. Survival of Agreement................................................ 87
SECTION 11.14. Waiver of Certain Bankruptcy Claims.................................. 88
SECTION 11.15. Compliance with Usury Laws........................................... 88
SECTION 11.16. Amendments to this Agreement under Certain Circumstances............. 88
-iv-
4
Exhibits
EXHIBIT A - Form of Notice of Borrowing
EXHIBIT B - Form of Notice of Conversion
EXHIBIT C - Form of Opinion of Thelen Reid & Priest LLP, special New York
counsel to the Borrower
EXHIBIT D - Form of Opinion of Kirkland & Ellis, special energy regulatory
counsel to the Borrower
EXHIBIT E - Form of Opinion of Hughes Hubbard & Reed LLP, counsel to the
Administrative Agent
EXHIBIT F - Form of Lender Assignment
EXHIBIT G - Form of Issuing Bank Agreement
Schedules
SCHEDULE I Applicable Lending Offices
SCHEDULE II Ownership of Borrower and Subsidiaries
SCHEDULE III Support Obligations
-v-
5
CREDIT AGREEMENT
Dated as of July 27, 2000
THIS CREDIT AGREEMENT is made by and among:
(i) Orion Power Holdings, Inc., a Delaware corporation (the
"BORROWER"),
(ii) the banks (the "BANKS") listed on the signature pages
hereof and the other Lenders (as hereinafter defined) from
time to time party hereto,
(iii) the letter of credit issuing banks from time to time party
hereto (in such capacity, and together with any bank or
financial institution party to an Issuing Bank Agreement,
the "ISSUING BANKS"),
(iv) Union Bank of California, N.A. ("UNION BANK"), as
administrative agent (in such capacity, the
"ADMINISTRATIVE AGENT") for the Lenders and the Issuing
Banks hereunder,
(v) CIBC World Markets Corp., as syndication agent (in such
capacity, the "SYNDICATION AGENT"), and
(vi) The Bank of Nova Scotia, as documentation agent (in such
capacity, the "DOCUMENTATION Agent").
PRELIMINARY STATEMENTS
The Borrower has requested the Banks to provide the credit facilities
hereinafter described in the amounts and on the terms and conditions set forth
herein. The Banks have so agreed on the terms and conditions set forth herein,
and the Administrative Agent has agreed to act as agent for the Lenders and the
Issuing Banks on such terms and conditions. In addition, each Issuing Bank has
agreed to issue Letters of Credit from time to time at the request of the
Borrower pursuant to such terms and conditions.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:
6
2
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Alternate
Base Rate.
"ABR LOAN" means a Loan that bears interest as provided in
Section 3.05(b)(i).
"AFFILIATE" means, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to
all directors and officers of such Person), controlled by, or under
direct or indirect common control with such Person. A Person shall be
deemed to control another entity if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of such entity, whether through the ownership
of voting securities, by contract, or otherwise.
"AGENT" means, as the context may require, the Administrative
Agent, the Syndication Agent or the Documentation Agent; and "AGENTS"
means either or both of the foregoing.
"ALTERNATE BASE RATE" means, for any day, a rate per annum
equal to the greater of (a) the Base Rate in effect on such day and (b)
the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%.
Any change in the Alternate Base Rate due to a change in the Base Rate
or the Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Base Rate or the
Federal Funds Effective Rate, respectively.
"APPLICABLE LENDING OFFICE" means, with respect to each
Lender, (i) such Lender's Domestic Lending Office, in the case of an
ABR Loan, and (ii) such Lender's Eurodollar Lending Office, in the case
of a Eurodollar Rate Loan.
"APPLICABLE MARGIN" means, for any day, with respect to any
Eurodollar Rate Loan or ABR Loan, as the case may be, the applicable
percentage set forth below under the caption "Eurodollar Margin" or
"ABR Margin", respectively, based upon the ratings by S&P and Moody's
applicable on such date to the Index Debt:
=============================================== ==================== ====================
Eurodollar ABR
Margin Margin
=============================================== ==================== ====================
Category 1
----------
BBB- or higher by S&P and
Baa3 or higher by Moody's 1.50% 0.00%
----------------------------------------------- -------------------- --------------------
Category 2
----------
BB+ or higher by S&P and
Ba1 or higher by Moody's 2.25% 0.75%
7
3
----------------------------------------------- -------------------- --------------------
Category 3
----------
BB or higher by S&P and
Ba2 or higher by Moody's 2.75% 1.25%
----------------------------------------------- -------------------- --------------------
Category 4
----------
BB- or higher by S&P and
Ba3 or higher by Moody's 3.25% 1.75%
----------------------------------------------- -------------------- --------------------
Category 5
----------
B+ or higher by S&P and
B1 or higher by Moody's 4.00% 2.50%
----------------------------------------------- -------------------- --------------------
Category 6
----------
B or below by S&P or
B2 or below by Moody's 4.50% 3.00%
----------------------------------------------- -------------------- --------------------
Notwithstanding the foregoing, (i) in the event that the principal
amount outstanding hereunder exceeds 662/3% of the Commitments for any
continuous period in excess of six consecutive calendar months, then
each of the foregoing Eurodollar Margins and ABR Margins shall be
increased by 0.50% per annum, such increase (A) to be applied
retroactively for the three-calendar-month period most recently ended
(as if such increase had been in effect at all times during such
three-calendar-month period) and (B) to remain in effect unless and
until the principal amount outstanding hereunder is less than 662/3% of
the Commitments for at least three consecutive calendar months, and
(ii) if the restrictions on Distributions contained in the Orion Power
New York Credit Facility and the Orion Power MidWest Credit Facility
have not been irrevocably terminated (so that no such restrictions
exist thereunder) prior to the earlier to occur of (A) December 31,
2001 and (B) the date on which the amount of Permitted Distributions
(as defined in the Orion Power New York Credit Facility as in effect on
the date hereof) paid by or at the direction of Orion Power New York
pursuant to the Orion Power New York Credit Facility first equals the
Maximum Permitted Distribution Amount (as defined in the Orion Power
New York Credit Facility as in effect on the date hereof), then at all
times thereafter until such restrictions have been irrevocably
terminated (so that no such restrictions exist under the Orion Power
New York Credit Facility or the Orion Power MidWest Credit Facility)
the Applicable Margin shall be based on Category 6; provided,
8
4
however, that if, at any time after such restrictions have been
terminated (so that no such restrictions exist thereunder), the Orion
Power New York Credit Facility or the Orion Power MidWest Credit
Facility is amended, supplemented or otherwise modified to provide for
any restrictions on Distributions, then at all times during which such
restrictions are in effect the Applicable Margin shall be based on
Category 6.
In addition, (1) from the Financial Closing Date until the first date
(the "INITIAL COMPLIANCE DATE") on which the Borrower demonstrates to
the reasonable satisfaction of the Administrative Agent (through the
delivery of reasonably detailed schedules and supporting calculations,
or otherwise) that the Borrower is in compliance with each of the
financial covenants set forth in Section 8.01(n), (o), (p) and (q), and
(2) after the Initial Compliance Date, in the event that, and at all
times during which, the Borrower is not in compliance with any such
financial covenant (notwithstanding that an Event of Default may not
yet have occurred as a result of such noncompliance), each of the
foregoing Eurodollar Margins and ABR Margins shall be increased by
0.50% per annum; provided, however, that, solely for purposes of this
paragraph (and the corresponding paragraphs contained in the
definitions of "Commitment Fee Rate" and "Letter of Credit Commission
Rate" in this Section 1.01), (A) the Borrower may demonstrate
compliance with the Borrower Debt Service Coverage Ratio for the
four-Fiscal Quarter period ending March 31, 2001 (as contemplated by
Section 8.01(q)) or for any other four-Fiscal Quarter period ending
prior thereto or thereafter, (B) in determining compliance with the
Borrower Debt Service Coverage Ratio, the Borrower's (but not any of
its Subsidiaries') cash on hand (including Permitted Investments) shall
be included in calculating Cash Flow Available for Debt Service, and
(C) the Borrower shall be deemed to be in compliance with the Borrower
Debt Service Coverage Ratio during the period from the Financial
Closing Date until the end of the Fiscal Quarter in which the Financial
Closing Date occurs if the Borrower's (but not including any of its
Subsidiaries') cash on hand (including Permitted Investments) is at
least $30,000,000 at all times during such period; and provided
further, however, that the Default Rate, and not the increases in the
Eurodollar Margins and ABR Margins set forth in this paragraph, shall
apply upon the occurrence and during the continuance of an Event of
Default.
For purposes of determining the Applicable Margin, (A) if Moody's or
S&P shall not have in effect a rating for the Index Debt (other than by
reason of the circumstances referred to in the last sentence of this
definition), then such rating agency shall be deemed to have
established a rating in Category 6, and (B) if more than one Category
is applicable at any one time, the Applicable Margin shall be based on
the applicable Category having the lowest number (i.e., Category 1 is
lower than Category 2). The Applicable Margins shall be increased or
decreased in accordance with this definition upon any change in the
applicable ratings of the Index Debt, and such increased or decreased
Applicable Margins shall be effective from the date of announcement of
any such new ratings. The Borrower agrees to notify the Administrative
Agent promptly after each change in any rating of the Index Debt. If
the rating system of Moody's or S&P shall change, or if any such rating
agency shall cease to be in the business of rating corporate debt
obligations, the Borrower and the Lenders shall negotiate in good faith
to amend this definition to reflect such changed rating system or the
non-availability of ratings from such rating agency and,
9
5
pending the effectiveness of any such amendment, the Applicable Margin
shall be determined by reference to the rating most recently in effect
prior to such change or cessation.
"APPLICABLE RATE" means:
(i) in the case of each ABR Loan, a rate per annum
equal at all times to the sum of the Alternate Base Rate in
effect from time to time plus the Applicable Margin in effect
from time to time; and
(ii) in the case of each Eurodollar Rate Loan
comprising part of the same Borrowing, a rate per annum during
each Interest Period equal at all times to the sum of the
Eurodollar Rate for such Interest Period plus the Applicable
Margin in effect from time to time during such Interest
Period.
"AVAILABLE COMMITMENT" means, for each Lender on any day, the
unused portion of such Lender's Commitment, computed after giving
effect to all Extensions of Credit or prepayments to be made on such
day and the application of proceeds therefrom. "AVAILABLE COMMITMENTS"
means the aggregate of the Lenders' Available Commitments.
"BASE RATE" means the rate of interest announced publicly by
Union Bank in Los Angeles, California, from time to time, as the Union
Bank Reference Rate (it being acknowledged that the Union Bank
Reference Rate may not necessarily be the lowest rate of interest
charged to any class of borrowers by Union Bank).
"BOARD" means the Board of Governors of the Federal Reserve
System of the United States of America.
"BORROWER DEBT SERVICE COVERAGE RATIO" means, for any
four-Fiscal Quarter period, the ratio of (i) Cash Flow Available for
Debt Service for such period to (ii) Debt Service for such period.
"BORROWING" means a borrowing consisting of Loans of the same
Type, having the same Interest Period and made or Converted on the same
day by the Lenders, ratably in accordance with their respective
Percentages. Any Borrowing consisting of Loans of a particular Type may
be referred to as being a Borrowing of such "TYPE". All Loans of the
same Type, having the same Interest Period and made or Converted on the
same day shall be deemed a single Borrowing hereunder until repaid or
next Converted.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized to close in New York City and Los Angeles,
California, and, if the applicable Business Day relates to any
Eurodollar Rate Loan, a day of the year on which dealings are carried
on in the London interbank market.
"CAPITAL EXPENDITURE" means any expenditure for fixed or
capital assets or additions to plant, property or equipment (including
replacements and capitalized repairs) that, in accordance with GAAP,
would be classified as a capital expenditure.
10
6
"CAPITALIZED LEASE OBLIGATIONS" means obligations to pay rent
or other amounts under any lease of (or other arrangement conveying the
right to use) real and/or personal property, which obligation is
required to be classified and accounted for as a capital lease on a
balance sheet prepared in accordance with GAAP, and for purposes hereof
the amount of such obligations shall be the capitalized amount
determined in accordance with GAAP.
"CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, rights to purchase, warrants, options,
participations or other equivalents of or interest in (however
designated) the common or preference share capital of such Person,
including, without limitation, partnership interests and limited
liability company interests.
"CASH FLOW AVAILABLE FOR DEBT SERVICE" means, for any period,
the difference (but not less than zero) between (i) the sum of the
following amounts (determined without duplication), but only to the
extent received in cash by the Borrower from any other Person during
such period:
(A) dividends or other Distributions paid to the
Borrower by its Subsidiaries during such period, less the
amount of any dividends or other Distributions received by the
Borrower prior to or during such period that it is required to
repay or otherwise return to any of its Subsidiaries for any
reason during such period;
(B) consulting, management and similar fees paid to
the Borrower for such period;
(C) tax sharing payments made to the Borrower during
such period;
(D) the proceeds of any business interruption
insurance paid to the Borrower during such period;
(E) interest and other distributions paid during such
period with respect to cash and other Permitted Investments of
the Borrower;
(F) other cash payments made to the Borrower by its
Subsidiaries during such period other than (i) returns of
invested capital, (ii) payments of the principal of Debt of
any such Subsidiary to the Borrower (other than payments
described in clause (G) below), and (iii) payments in an
amount equal to the aggregate amount released from debt
service reserve accounts upon the issuance of Letters of
Credit for the benefit of the beneficiaries of such accounts;
and
(G) each repayment made during such period of the
principal amount of any loans or advances made by the Borrower
to any of its Subsidiaries pursuant to Section 8.02(d)(iv) or
8.02(d)(v), less, with respect to each such repayment, the
outstanding principal amount of the Loans on the date of such
repayment (after
11
7
giving effect to all Loans made or deemed made on such date of
repayment, but without giving effect to any repayments or
prepayments of the Loans made on such date of repayment);
provided, however, that if any such difference is less than
zero, such amount shall be disregarded for purposes of
determining Cash Flow Available for Debt Service;
minus
(ii) the sum of the following expenses (determined without
duplication), in each case to the extent paid by the Borrower during
such period and regardless of whether any such amount was accrued
during such period:
(A) expenses incurred by the Borrower or any of its
Subsidiaries for the development of any power project (other
than any such expenses that the Borrower accounts for as a
capital contribution to any of its Subsidiaries);
(B) income tax expenses of the Borrower and its
Subsidiaries;
(C) capital expenditures of the Borrower and its
Subsidiaries;
(D) dividends paid on the Borrower's capital stock
during such period; and
(E) corporate overhead expenses (other than any such
expenses that the Borrower accounts for as a capital
contribution to any of its Subsidiaries).
For purposes of determining Cash Flow Available for Debt Service, if
any Subsidiary of the Borrower is sold or otherwise disposed of (by way
of merger, sale of capital stock, sale of assets or otherwise), (x) the
net cash proceeds from such sale or other disposition shall not be
included in Cash Flow Available for Debt Service for any period and (y)
the contributions of such Subsidiary to Cash Flow Available for Debt
Service for any period shall be eliminated and Cash Flow Available for
Debt Service shall be calculated after giving effect to such
elimination.
"CEI" means Constellation Enterprises, Inc., a Delaware
corporation.
"CHANGE OF CONTROL" has the meaning assigned to that term in
the Senior Note Indenture.
"COMMITMENT" means, for each Lender, the obligation of such
Lender to make Loans to the Borrower and to participate in Extensions
of Credit resulting from the issuance (or extension, modification or
amendment) of any Letter of Credit in an aggregate amount no greater
than the amount set forth opposite such Lender's name on the signature
pages hereof or, if such Lender has entered into one or more Lender
Assignments, set forth for such Lender in the Register maintained by
the Administrative Agent pursuant to Section 11.07(c), in each such
case as such amount may be reduced from time to time pursuant to
Section 2.03. "COMMITMENTS" means the total of the
12
8
Lenders' Commitments hereunder. The Commitments shall in no event
exceed $75,000,000.
"COMMITMENT CLOSING DATE" means the date upon which each of
the conditions precedent enumerated in Section 6.01 has been fulfilled
to the satisfaction of the Lenders, the Administrative Agent and the
Borrower. All transactions contemplated by the Commitment Closing Date
shall take place on or before July 27, 2000, at the offices of Hughes
Hubbard & Reed LLP, One Battery Park Plaza, New York, New York 10004,
at 10:00 A.M., or such other time or place as the parties hereto may
mutually agree.
"COMMITMENT FEE RATE" means, for any day, the applicable
percentage set forth below under the caption "Commitment Fee Rate",
based upon the ratings by S&P and Moody's applicable on such date to
the Index Debt:
=============================================== =========================================
Commitment Fee
Rate
=============================================== =========================================
Category 1
----------
BBB- or higher by S&P and
Baa3 or higher by Moody's 0.25%
----------------------------------------------- -----------------------------------------
Category 2
----------
BB+ or higher by S&P and
Ba1 or higher by Moody's 0.50%
----------------------------------------------- -----------------------------------------
Category 3
----------
BB or higher by S&P and
Ba2 or higher by Moody's 0.75%
----------------------------------------------- -----------------------------------------
Category 4
----------
BB- or higher by S&P and
Ba3 or higher by Moody's 0.875%
----------------------------------------------- -----------------------------------------
Category 5
----------
B+ or higher by S&P and
B1 or higher by Moody's 1.00%
----------------------------------------------- -----------------------------------------
Category 6
----------
B or below by S&P or B2 or below 1.25%
----------------------------------------------- -----------------------------------------
13
9
----------------------------------------------- -----------------------------------------
by Moody's
----------------------------------------------- -----------------------------------------
Notwithstanding the foregoing, if the restrictions on Distributions
contained in the Orion Power New York Credit Facility and the Orion
Power MidWest Credit Facility have not been irrevocably terminated (so
that no such restrictions exist thereunder) prior to the earlier to
occur of (A) December 31, 2001 and (B) the date on which the amount of
Permitted Distributions (as defined in the Orion Power New York Credit
Facility as in effect on the date hereof) paid by or at the direction
of Orion Power New York pursuant to the Orion Power New York Credit
Facility first equals the Maximum Permitted Distribution Amount (as
defined in the Orion Power New York Credit Facility as in effect on the
date hereof), then at all times thereafter until such restrictions have
been irrevocably terminated (so that no such restrictions exist under
the Orion Power New York Credit Facility or the Orion Power MidWest
Credit Facility) the Commitment Fee Rate shall be based on Category 6;
provided, however, that if, at any time after such restrictions have
been terminated (so that no such restrictions exist thereunder), the
Orion Power New York Credit Facility or the Orion Power MidWest Credit
Facility is amended, supplemented or otherwise modified to provide for
any restrictions on Distributions, then at all times during which such
restrictions are in effect the Commitment Fee Rate shall be based on
Category 6.
In addition, (1) from the Financial Closing Date until the Initial
Compliance Date, and (2) after the Initial Compliance Date, in the
event that, and at all times during which, the Borrower is not in
compliance with any of the financial covenants set forth in Section
8.01(n), (o), (p) and (q) (notwithstanding that an Event of Default may
not yet have occurred as a result of such noncompliance), each of the
Commitment Fee Rate percentages set forth above shall be increased by
0.25% per annum; provided, however, that, solely for purposes of this
paragraph (and the corresponding paragraphs contained in the
definitions of "Applicable Margin" and "Letter of Credit Commission
Rate" in this Section 1.01), (A) the Borrower may demonstrate
compliance with the Borrower Debt Service Coverage Ratio for the
four-Fiscal Quarter period ending March 31, 2001 (as contemplated by
Section 8.01(q)) or for any other four-Fiscal Quarter period ending
prior thereto or thereafter, (B) in determining compliance with the
Borrower Debt Service Coverage Ratio, the Borrower's (but not any of
its Subsidiaries') cash on hand (including Permitted Investments) shall
be included in calculating Cash Flow Available for Debt Service, and
(C) the Borrower shall be deemed to be in compliance with the Borrower
Debt Service Coverage Ratio during the period from the Financial
Closing Date until the end of the Fiscal Quarter in which the Financial
Closing Date occurs if the Borrower's (but not including any of its
Subsidiaries') cash on hand (including Permitted Investments) is at
least $30,000,000 at all times during such period.
For purposes of determining the Commitment Fee Rate, (A) if Moody's or
S&P shall not have in effect a rating for the Index Debt (other than by
reason of the circumstances referred to in the last sentence of this
definition), then such rating agency shall be deemed to have
established a rating in Category 6, and (B) if more than one Category
is applicable at any one time, the Commitment Fee Rate shall be based
on the applicable Category
14
10
having the lowest number (i.e., Category 1 is lower than Category 2).
The Commitment Fee Rate shall be increased or decreased in accordance
with this definition upon any change in the applicable ratings of the
Index Debt, and such increased or decreased Commitment Fee Rate shall
be effective from the date of announcement of any such new ratings. The
Borrower agrees to notify the Administrative Agent promptly after each
change in any rating of the Index Debt. If the rating system of Moody's
or S&P shall change, or if any such rating agency shall cease to be in
the business of rating corporate debt obligations, the Borrower and the
Lenders shall negotiate in good faith to amend this definition to
reflect such changed rating system or the non-availability of ratings
from such rating agency and, pending the effectiveness of any such
amendment, the Commitment Fee Rate shall be determined by reference to
the rating most recently in effect prior to such change or cessation.
"CONFIDENTIAL INFORMATION" has the meaning assigned to that
term in Section 11.08.
"CONSOLIDATED EBITDA" means, for any period, the sum, without
duplication, of (i) consolidated net income of the Borrower and its
Subsidiaries during such period, plus (ii) the amount deducted, in
determining such consolidated net income, of all income taxes (whether
paid or deferred) of the Borrower and its Subsidiaries during such
period, plus (iii) Consolidated Interest Expense during such period,
plus (iv) the amount deducted, in determining such consolidated net
income, representing amortization and depreciation of assets of the
Borrower and its Subsidiaries during such period, in each case
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED FUNDED DEBT" means the outstanding principal
amount of all Debt of the Borrower and its Subsidiaries of the type
referred to in clause (i), (iii), (iv) or (vii) of the definition of
"Debt" contained in this Section 1.01 and, without duplication, any
Support Obligation in respect of any of the foregoing (provided,
however, that Consolidated Funded Debt shall not include any Support
Obligation if such Support Obligation or the primary obligation so
supported is not fixed or conclusively determined or is not otherwise
reasonably quantifiable as of the date of determination); it being
understood and agreed that Consolidated Funded Debt shall include the
Loans, the Senior Notes and the outstanding principal amount of all
loans under the Orion Power New York Credit Facility and the Orion
Power MidWest Credit Facility.
"CONSOLIDATED INTEREST COVERAGE RATIO" means, for any
four-Fiscal Quarter period, the ratio of (i) Consolidated EBITDA for
such period to (ii) Consolidated Interest Expense for such period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the
aggregate consolidated interest expense of the Borrower and its
Subsidiaries for such period, as determined in accordance with GAAP,
including, without duplication, the portion of any Capitalized Lease
Obligations of the Borrower and its Subsidiaries allocable to interest
expense, all commissions, discounts and other fees charged with respect
to letters of credit and bankers'
15
11
acceptance financing, the amortization of debt discounts and the net
costs under Hedging Agreements, in each case paid or payable during
such period.
"CONSOLIDATED LEVERAGE RATIO" means, for any four-Fiscal
Quarter period, the ratio of (i) the amount of Consolidated Funded Debt
as of the last day of such period (after giving effect to all
extensions of credit to the Borrower and its Subsidiaries, and all
payments and prepayments in respect of Consolidated Funded Debt, on
such day) to (ii) Consolidated EBITDA for such period.
"CONSOLIDATED SUBSIDIARY" means, with respect to any Person,
any Subsidiary of such Person whose accounts are or are required to be
consolidated with the accounts of such Person in accordance with GAAP.
"CONSOLIDATED TANGIBLE ASSETS" means, as applied to the
Borrower, the total consolidated assets of the Borrower and its
Restricted Subsidiaries (as defined in the Senior Note Indenture) less
the total intangible assets of the Borrower and its Restricted
Subsidiaries, all calculated on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" means, with respect to any
Person, the excess of such Person's consolidated assets over its
consolidated liabilities, consolidated assets and consolidated
liabilities each to be determined in accordance with GAAP consistently
applied, excluding, however, from the determination of consolidated
assets (i) goodwill, organizational expenses, research and development
expenses, trademarks, trade names, copyrights, patents, patent
applications, licenses and rights in any thereof, and other similar
intangibles, (ii) cash held in a sinking or other analogous fund
established for the purpose of redemption, retirement or prepayment of
capital stock or Debt, and (iii) any items not included in clauses (i)
or (ii) above, that are treated as intangibles in conformity with GAAP
(other than FERC licenses, emissions reduction credits and emissions
allowances).
"CONVERSION", "CONVERT" or "CONVERTED" refers to a conversion
of Loans of one Type into Loans of another Type, or to the selection of
a new, or the renewal of the same, Interest Period for Loans, as the
case may be, pursuant to Section 3.02.
"CPS STRATEGIC ALLIANCE AGREEMENT" means that certain
Strategic Alliance Agreement, dated as of March 10, 1998, between the
Borrower and CPS.
"CPS" means Constellation Power Source, Inc., a Delaware
corporation.
"DEBT" means, for any Person, without duplication, any and all
indebtedness, liabilities and other obligations of such Person (whether
for principal, interest, fees, costs, expenses or otherwise, and
whether contingent or otherwise) (i) for borrowed money or evidenced by
bonds, debentures, notes or other similar instruments, (ii) to pay the
deferred purchase price of property or services (except trade accounts
payable arising in the ordinary course of business which are not more
than 90 days overdue), (iii) in respect of Capitalized Lease
Obligations, (iv) under reimbursement or similar agreements with
16
12
respect to letters of credit, bankers' acceptances or similar
extensions of credit issued thereunder, (v) under any Hedging
Agreements (the amount of any such obligation to be the amount that is
or would be payable upon settlement, liquidation, termination or
acceleration thereof), (vi) created or arising under any conditional
sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (vii) to pay rent or
other amounts under leases entered into in connection with sale and
leaseback transactions involving assets of such Person being sold in
connection therewith, (viii) in respect of Unfunded Vested Liabilities,
and (ix) arising from (A) direct or indirect guaranties in respect of,
and obligations to purchase or otherwise acquire, or otherwise to
warrant or hold harmless, in each case pursuant to a legally binding
agreement, a creditor against loss in respect of, Debt of others
referred to in clauses (i) through (viii) above (including Debt of
others secured by any Lien existing on any property owned or held by
such Person, whether or not such Person has assumed or become liable
for the obligations secured thereby), and (B) other guaranty or similar
financial obligations in respect of the performance of others,
including Support Obligations.
"DEBT SERVICE" means, for any period, the difference between
(a) the sum of (i) all interest payments paid, payable or accrued by
the Borrower for such period, (ii) all payments under Hedging
Agreements paid or due and payable by the Borrower during such period,
and (iii) all fees (including without limitation, commitment fees and
letter of credit commissions, but excluding consultants' and attorneys
fees and expenses and similar expenses) paid, payable or accrued by the
Borrower pursuant to any Loan Document, the Senior Note Indenture, or
any other agreement or instrument evidencing Debt of the Borrower
during such period, minus (b) amounts, if any, received by the Borrower
(or receivable by the Borrower from any Lender) under Hedging
Agreements during such period.
"DEFAULT RATE" means a rate per annum equal at all times to
(i) in the case of any amount of principal of any Loan, 2% per annum
above the Applicable Rate required to be paid on such Loan immediately
prior to the date on which the Default Rate becomes effective with
respect thereto, (ii) in the case of any outstanding Letters of Credit,
2% per annum above the Letter of Credit Commission Rate required to be
paid in respect thereof immediately prior to the date on which the
Default Rate becomes effective with respect thereto, and (iii) in the
case of any amount of interest, fees or other amounts payable hereunder
that is not paid when due, 2% per annum above the Applicable Rate for
an ABR Loan in effect from time to time; provided, that the Applicable
Rate and the Letter of Credit Commission Rate used in determining the
Default Rate shall in each case be computed after taking into account
the final proviso contained in the penultimate paragraph of each of the
definitions of "Applicable Margin" and "Letter of Credit Commission
Rate", respectively, contained in this Section 1.01.
"DISTRIBUTION" means any payment or other distribution of
assets, properties, cash, rights, obligations or securities to the
Borrower in respect of the Borrower's direct or
17
13
indirect equity ownership interest in Orion Power New York, Orion Power
MidWest or any other Subsidiary of the Borrower.
"DOLLARS" and the sign "$" each means lawful money of the
United States.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender,
the office of such Lender or its Affiliate specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in the Lender
Assignment pursuant to which it became a Lender, or such other office
or affiliate of such Lender as such Lender may from time to time
specify in writing to the Borrower and the Administrative Agent.
"DUQUESNE ACQUISITION" means the acquisition by the Borrower
of certain power generating assets pursuant to Asset Purchase
Agreement, dated as of September 24, 1999, by and among Duquesne Light
Company, the Borrower, The Cleveland Electric Illuminating Company,
Ohio Edison Company and Pennsylvania Power Company, as the same may be
amended, supplemented or otherwise modified from time to time.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank or trust
company organized under the laws of the United States, or any State
thereof; (b) a commercial bank organized under the laws of any other
country that is a member of the OECD, or a political subdivision of any
such country, provided that such bank is acting through a branch or
agency located in the United States; (c) the central bank of any
country that is a member of the OECD; (d) any other commercial bank or
other financial institution engaged generally in the business of
extending credit or purchasing debt instruments; and (e) a Lender or an
Affiliate of a Lender; provided, however, that (A) any such Person
shall also (i) have outstanding unsecured indebtedness that is rated A-
or better by S&P or A3 or better by Moody's (or an equivalent rating by
another nationally-recognized credit rating agency of similar standing
if neither of such corporations is then in the business of rating
unsecured indebtedness of entities engaged in such businesses) or (ii)
have combined capital and surplus (as established in its most recent
report of condition to its primary regulator) of not less than
$500,000,000 (or its equivalent in foreign currency), (B) any Person
described in clause (b), (c), or (d) above, shall, on the date on which
it is to become a Lender hereunder, (1) be entitled to receive payments
hereunder without deduction or withholding of any United States Federal
income taxes (as contemplated by Section 5.06) and (2) not be incurring
any losses, costs or expenses of the type for which such Person could
demand payment under Section 5.04(a) or (c) (except to the extent that,
in the absence of the making of an assignment to such Person, the
assigning Lender would have incurred an equal or greater amount of such
losses, costs or expenses and such losses, costs or expenses would have
been payable by the Borrower to such assigning Lender hereunder), and
(C) any Person described in clause (a), (b), (c), (d) or (e) above that
is not a Lender shall, in addition, be acceptable to each Issuing Bank
based upon its then-existing credit criteria.
"ENVIRONMENTAL LAWS" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or
binding agreements issued, promulgated or entered into by any
governmental agency or authority, relating in any way
18
14
to the environment, preservation or reclamation of natural resources,
the management, release or threatened release of any Hazardous
Substance or to health and safety matters.
"ENVIRONMENTAL LIABILITY" means, with respect to any Person,
any liability, contingent or otherwise (including any liability for
damages, costs of environmental remediation, fines, penalties or
indemnities), of such Person or any of its Subsidiaries directly or
indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Substances, (c)
exposure to any Hazardous Substances, (d) the release or threatened
release of any Hazardous Substances into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA AFFILIATE" means, with respect to the Borrower, (i) any
corporation that is a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Internal
Revenue Code) with the Borrower; (ii) a partnership or other trade or
business (whether or not incorporated) that is under common control
(within the meaning of Section 414(c) of the Internal Revenue Code or
Section 4001(b) of ERISA) with the Borrower; and (iii) a member of the
same affiliated service group (within the meaning of Section 414(m) or
(o) of the Internal Revenue Code) with the Borrower.
"ERISA EVENT" means (i) the occurrence of a reportable event,
within the meaning of Section 4043(c) of ERISA, with respect to any
Plan unless the 30-day notice requirement with respect thereto has been
waived by the PBGC; (ii) the provision by the administrator of any Plan
of notice of intent to terminate such Plan, pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (iii) the cessation
of operations at a facility of the Borrower or any of its ERISA
Affiliates in the circumstances treated as a withdrawal under Section
4062(e) of ERISA; (iv) the withdrawal by the Borrower or an ERISA
Affiliate of the Borrower from a Multiple Employer Plan, subject to
Section 4063 of ERISA, during a plan year for which it was a
"substantial employer", as defined in Section 4001(a)(2) of ERISA; (v)
the failure by the Borrower or an ERISA Affiliate of the Borrower to
make a required payment to a Plan; (vi) the adoption of an amendment to
a Plan requiring the provision of security to such Plan, pursuant to
Section 307 of ERISA; (vii) the institution by the PBGC of proceedings
to terminate a Plan, pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, a Plan; (viii) the
complete or partial withdrawal of the Borrower or any ERISA Affiliate
of the Borrower from any Multiemployer Plan or the insolvency of any
Multiemployer Plan; (ix) the Borrower or any ERISA Affiliate of the
Borrower shall request a minimum funding waiver from the Internal
Revenue Service with respect to any Plan; or (x) the imposition of any
liability
19
15
under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that
term in Regulation D of the Board, as in effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender,
the office of such Lender or its Affiliate specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in the Lender
Assignment pursuant to which it became a Lender (or, if no such office
or affiliate is specified, its Domestic Lending Office), or such other
office or affiliate of such Lender as such Lender may from time to time
specify in writing to the Borrower and the Administrative Agent.
"EURODOLLAR RATE" means, for each Interest Period for each
Eurodollar Rate Loan made as part of the same Borrowing, an interest
rate per annum equal to the rate per annum (rounded upwards, if
necessary, to the nearest whole multiple of 1/16 of 1%) at which
deposits in Dollars are offered to the Administrative Agent in the
London interbank market at 11:00 A.M. (London time) two Business Days
before the first day of such Interest Period in an amount substantially
equal to Union Bank's Eurodollar Rate Loan made as part of such
Borrowing and for a period equal to such Interest Period.
"EURODOLLAR RATE LOAN" means a Loan that bears interest as
provided in Section 3.05(b)(ii).
"EURODOLLAR RESERVE PERCENTAGE" of any Lender for each
Interest Period for each Eurodollar Rate Loan means the reserve
percentage applicable to such Lender during such Interest Period (or if
more than one such percentage shall be so applicable, the daily average
of such percentages for those days in such Interest Period during which
any such percentage shall be so applicable) under Regulation D or other
regulations issued from time to time by the Board for determining the
maximum reserve requirement (including any emergency, supplemental or
other marginal reserve requirement) then applicable to such Lender with
respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest Period.
"EVENT OF DEFAULT" has the meaning specified in Section 9.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXTENSION OF CREDIT" means (i) the making of a Borrowing
(including any Conversion), (ii) the issuance of a Letter of Credit, or
(iii) the amendment of any Letter of Credit having the effect of
extending the stated termination date thereof, increasing the LC
Outstandings thereunder, or otherwise altering any of the material
terms or conditions thereof.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate per annum equal for each day during such
period to the weighted average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the rates on overnight Federal funds
20
16
transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the next succeeding Business Day
by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent
from three Federal funds brokers of recognized standing selected by the
Administrative Agent.
"FEE LETTER" has the meaning assigned to that term in Section
2.02(c).
"FINANCIAL CLOSING DATE" means the date upon which each of the
conditions precedent enumerated in Section 6.02 has been fulfilled to
the satisfaction of the Lenders, the Administrative Agent and the
Borrower. All transactions contemplated to occur in connection with the
Financial Closing Date shall take place on or before July 27, 2000, at
the offices of Hughes Hubbard & Reed LLP, One Battery Park Plaza, New
York, New York 10004, at 10:00 A.M., or such other time or place as the
parties hereto may mutually agree.
"FISCAL QUARTER" means each period of three consecutive
calendar months ending on March 31, June 30, September 30 and December
31 in each year.
"FISCAL YEAR" means each period of twelve consecutive calendar
months ending on December 31.
"FOREIGN LENDER" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is
located. For purposes of this definition, the United States of America,
each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.
"GAAP" has the meaning assigned to that term in Section 1.03.
"GOLDMAN ENTITIES" means the collective reference to GS
Capital Partners II, L.P., GS Capital Partners III, L.P., Stone Street
Fund 1998, L.P., Bridge Street Fund 1998, L.P., GS Capital Partners II
Offshore, L.P., GS Capital Partners III Offshore, L.P., Goldman, Sachs
& Co. Verwaltungs GmbH (for GS Capital Partners II Germany C.L.P. and
GS Capital Partners III Germany C.L.P.) and any other investment fund
that is an Affiliate of The Goldman Sachs Group, Inc.
"GOVERNMENTAL APPROVAL" means any authorization, consent,
approval, license, franchise, lease, ruling, tariff, rate, permit,
certificate, exemption of, or filing or registration with, any
governmental authority or other legal or regulatory body, required to
be obtained, made or filed by the Borrower in connection with its
execution, delivery or performance of any Loan Document (excluding any
such consent, approval, license, franchise, lease, ruling, tariff,
rate, permit, certificate, exemption or filing or registration of or
relating to any Subsidiary of the Borrower or any property, asset,
operations or services of such Subsidiary or any representation,
warranty, covenant or agreement of the
21
17
Borrower to the extent relating to any Subsidiary of the Borrower or
any such Subsidiary's properties, assets, operations or services).
"HAZARDOUS SUBSTANCE" means any waste, substance, or material
identified as hazardous, dangerous or toxic by any office, agency,
department, commission, board, bureau, or instrumentality of the United
States or of the State or locality in which the same is located having
or exercising jurisdiction over such waste, substance or material.
"HEDGING AGREEMENTS" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements designed to protect against fluctuations in currency
exchange or interest rates.
"INDEMNIFIED PERSON" has the meaning assigned to that term in
Section 11.04(b).
"INDEX DEBT" means the long-term senior unsecured debt
securities of the Borrower that are not guaranteed by any other Person
or subject to any other credit enhancement.
"INITIAL COMPLIANCE DATE" has the meaning assigned to that
term in the definition of "Applicable Margin" contained in this Section
1.01.
"INTEREST PERIOD" has the meaning assigned to that term in
Section 3.03.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended from time to time.
"INVESTMENT COMPANY ACT" means the Investment Company Act of
1940, as amended from time to time, and the rules and regulations
promulgated thereunder.
"INVESTMENT" means any investment in or acquisition of assets
from any Person, whether by means of share purchase, asset purchase or
acquisition, capital contribution, loan, guarantee or other Support
Obligation, time deposit or otherwise (but not including any demand
deposit).
"INVESTMENT COMMITMENTS" means all commitments (contingent or
otherwise) by the Borrower or any of its Subsidiaries to make
Investments, including asset sale or purchase agreements relating
thereto and guarantee or other Support Obligations in respect of
obligations of any of its Affiliates thereunder.
"ISSUING BANK" has the meaning assigned to such term in the
preamble hereto and includes (i) any Lender designated by the Borrower
that accepts such designation and (ii) any other financial institution
designated by the Borrower and acceptable to the Administrative Agent
that accepts such designation, in each case in accordance with Section
4.01, as the issuer of a Letter of Credit pursuant to an Issuing Bank
Agreement. As of the date hereof, the Borrower has designated Union
Bank and Canadian Imperial Bank of
22
18
Commerce as Issuing Banks, and the Administrative Agent has accepted
such designees pursuant to Section 4.01.
"ISSUING BANK AGREEMENT" means an agreement between an Issuing
Bank and the Borrower, substantially in the form of Exhibit G or
otherwise in form and substance satisfactory to the Administrative
Agent, providing for the issuance of one or more Letters of Credit.
"LC PAYMENT NOTICE" has the meaning assigned to that term in
Section 4.04(b).
"LC OUTSTANDINGS" means, for any Letter of Credit on any date
of determination, the maximum amount available to be drawn under such
Letter of Credit at any time on or after such date (assuming the
satisfaction of all conditions for drawing enumerated therein).
"LENDER ASSIGNMENT" means an assignment and agreement entered
into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit F.
"LENDERS" means the Banks listed on the signature pages
hereof, each Eligible Assignee that shall become a party hereto
pursuant to Section 11.07 and, if and to the extent so provided in
Section 4.04(c), each Issuing Bank.
"LETTER OF CREDIT" means a letter of credit issued by an
Issuing Bank pursuant to Section 4.02, as such letter of credit may
from time to time be amended, modified or extended in accordance with
the terms of this Agreement.
"LETTER OF CREDIT COMMISSION RATE" means, for any day, the
applicable percentage set forth below under the caption "Financial
Letter of Credit Commission Rate" or "Performance Letter of Credit
Commission Rate", in each case in respect of financial Letters of
Credit and performance Letters of Credit (as the case may be, as
determined by the Administrative Agent), respectively, based upon the
ratings by S&P and Moody's applicable on such date to the Index Debt:
=============================================== ======================== =======================
Financial Letter of Performance Letter of
Credit Commission Rate Credit Commission Rate
=============================================== ======================== =======================
Category 1
----------
BBB- or higher by S&P and
Baa3 or higher by Moody's 1.50% 1.00%
----------------------------------------------- ------------------------ -----------------------
Category 2
----------
23
19
BB+ or higher by S&P and
Ba1 or higher by Moody's 2.25% 1.25%
----------------------------------------------- ------------------------ -----------------------
Category 3
----------
BB or higher by S&P and
Ba2 or higher by Moody's 2.75% 1.50%
----------------------------------------------- ------------------------ -----------------------
Category 4
----------
BB- or higher by S&P and
Ba3 or higher by Moody's 3.25% 1.75%
----------------------------------------------- ------------------------ -----------------------
Category 5
----------
B+ or higher by S&P and
B1 or higher by Moody's 4.00% 2.50%
----------------------------------------------- ------------------------ -----------------------
Category 6
----------
B or below by S&P or
B2 or below by Moody's 4.50% 3.00%
----------------------------------------------- ------------------------ -----------------------
Notwithstanding the foregoing, (i) in the event that the principal
amount outstanding hereunder exceeds 66 2/3% of the Commitments for any
continuous period in excess of six consecutive calendar months, then
each of the Financial Letter of Credit Commission Rate percentages
shall be increased by 0.50% per annum and each of the Performance
Letter of Credit Commission Rate percentages shall be increased by
0.25% per annum, such increase (A) to be applied retroactively for the
three-calendar-month period most recently ended (as if such increase
had been in effect at all times during such three-calendar-month
period) and (B) to remain in effect unless and until the principal
amount outstanding hereunder is less than 66 2/3% of the Commitments
for at least three consecutive calendar months, and (ii) if the
restrictions on Distributions contained in the Orion Power New York
Credit Facility and the Orion Power MidWest Credit Facility have not
been irrevocably terminated (so that no such restrictions exist
thereunder) prior to the earlier to occur of (A) December 31, 2001 and
(B) the date on which the amount of Permitted Distributions (as defined
in the Orion Power New York Credit Facility as in effect on the date
hereof) paid by or at the direction of Orion Power New York pursuant to
the Orion Power New York Credit Facility first equals the Maximum
Permitted
24
20
Distribution Amount (as defined in the Orion Power New York Credit
Facility as in effect on the date hereof), then at all times thereafter
until such restrictions have been irrevocably terminated (so that no
such restrictions exist under the Orion Power New York Credit Facility
or the Orion Power MidWest Credit Facility) the Letter of Credit
Commission Rate shall be based on Category 6; provided, however, that
if, at any time after such restrictions have been terminated (so that
no such restrictions exist thereunder), the Orion Power New York Credit
Facility or the Orion Power MidWest Credit Facility is amended,
supplemented or otherwise modified to provide for any restrictions on
Distributions, then at all times during which such restrictions are in
effect the Letter of Credit Commission Rate shall be based on Category
6.
In addition, (1) from the Financial Closing Date until the Initial
Compliance Date, and (2) after the Initial Compliance Date, in the
event that, and at all times during which, the Borrower is not in
compliance with any of the financial covenants set forth in Section
8.01(n), (o), (p) and (q) (notwithstanding that an Event of Default may
not yet have occurred as a result of such noncompliance), each of the
foregoing Financial Letter of Credit Commission Rate percentages shall
be increased by 0.50% per annum and each of the foregoing Performance
Letter of Credit Commission Rate percentages shall be increased by
0.25% per annum; provided, however, that, solely for purposes of this
paragraph (and the corresponding paragraphs contained in the
definitions of "Applicable Margin" and "Commitment Fee Rate" in this
Section 1.01), (A) the Borrower may demonstrate compliance with the
Borrower Debt Service Coverage Ratio for the four-Fiscal Quarter period
ending March 31, 2001 (as contemplated by Section 8.01(q)) or for any
other four-Fiscal Quarter period ending prior thereto or thereafter,
(B) in determining compliance with the Borrower Debt Service Coverage
Ratio, the Borrower's (but not any of its Subsidiaries') cash on hand
(including Permitted Investments) shall be included in calculating Cash
Flow Available for Debt Service, and (C) the Borrower shall be deemed
to be in compliance with the Borrower Debt Service Coverage Ratio
during the period from the Financial Closing Date until the end of the
Fiscal Quarter in which the Financial Closing Date occurs if the
Borrower's (but not including any of its Subsidiaries') cash on hand
(including Permitted Investments) is at least $30,000,000 at all times
during such period; and provided further, however, that the Default
Rate, and not the increases in the Letter of Credit Commission Rate set
forth in this paragraph, shall apply upon the occurrence and during the
continuance of an Event of Default.
For purposes of determining the Letter of Credit Commission Rate, (A)
if Moody's or S&P shall not have in effect a rating for the Index Debt
(other than by reason of the circumstances referred to in the last
sentence of this definition), then such rating agency shall be deemed
to have established a rating in Category 6, and (B) if more than one
Category is applicable at any one time, the Letter of Credit Commission
Rate shall be based on the applicable Category having the lowest number
(i.e., Category 1 is lower than Category 2). The Letter of Credit
Commission Rate shall be increased or decreased in accordance with this
definition upon any change in the applicable ratings of the Index Debt,
and such increased or decreased Letter of Credit Commission Rate shall
be effective from the date of announcement of any such new ratings. The
Borrower agrees to notify the Administrative Agent promptly after each
change in any rating of the Index
25
21
Debt. If the rating system of Moody's or S&P shall change, or if any
such rating agency shall cease to be in the business of rating
corporate debt obligations, the Borrower and the Lenders shall
negotiate in good faith to amend this definition to reflect such
changed rating system or the non-availability of ratings from such
rating agency and, pending the effectiveness of any such amendment, the
Letter of Credit Commission Rate shall be determined by reference to
the rating most recently in effect prior to such change or cessation.
"LETTER OF CREDIT SUBLIMIT" means, on any date of
determination, the lesser of (i) $40,000,000 and (ii) the aggregate
amount of the Commitments on such date. In no event shall the aggregate
LC Outstandings of all Letters of Credit outstanding on any date of
determination (after giving effect to all Extensions of Credit on such
date) exceed the sum of (A) the Letter of Credit Sublimit and (B) the
amount of cash collateral securing LC Outstandings pursuant to the
operation of Section 5.03(b).
"LIEN" has the meaning assigned to that term in Section
8.02(a).
"LOAN" means a loan by a Lender to the Borrower pursuant to
Section 3.01 (or deemed made pursuant to Section 4.04(c) or (d)), and
refers to a ABR Loan or a Eurodollar Rate Loan (each of which shall be
a "TYPE" of Loan). All Loans by a Lender of the same Type, having the
same Interest Period and made or Converted on the same day shall be
deemed to be a single Loan by such Lender until repaid or next
Converted.
"LOAN DOCUMENTS" means this Agreement, any Promissory Notes,
the Fee Letter, each Issuing Bank Agreement and all other agreements,
instruments and documents now or hereafter executed and/or delivered
pursuant hereto or thereto.
"MAJORITY LENDERS" means, on any date of determination, any
two or more Lenders that, collectively, on such date (i) hold at least
51% of the then aggregate outstanding principal amount of the Loans
owing to Lenders and (ii) if no Loans are then outstanding, have
Percentages in the aggregate of at least 51%. Any determination of
those Lenders constituting the Majority Lenders shall be made by the
Administrative Agent and shall be conclusive and binding on all parties
absent manifest error.
"MATERIAL ADVERSE CHANGE" means any event, development or
circumstance that has had or could reasonably be expected to have a
Material Adverse Effect.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, assets, condition (financial or otherwise),
operations, results of operations or prospects of (i) the Borrower,
(ii) any Material Subsidiary, or (iii) the Borrower and its
Subsidiaries, considered as a whole, (b) the ability of the Borrower to
perform its obligations under this Agreement or any other Loan Document
to which it is or will be a party, or (c) the legality, validity or
enforceability of any Loan Document or the rights and remedies of the
Administrative Agent, the Issuing Banks or the Lenders thereunder;
provided, however, that a Material Adverse Effect pursuant to clause
(a)(ii) above shall be deemed not to have occurred (or not to be
reasonably expected to occur) in connection with a breach of
26
22
any covenant, representation or warranty contained herein with respect
to any Material Subsidiary (which covenant, representation or warranty
requires a Material Adverse Effect to have occurred or to be reasonably
expected to occur in order to constitute a breach thereof) unless and
until the lenders under any credit facility (including the Orion Power
New York Credit Facility, the Orion Power MidWest Credit Facility, and
any other agreement or instrument evidencing Permitted Subsidiary Debt)
to which such Material Subsidiary is a party have determined that the
breach by such Material Subsidiary of any corresponding covenant,
representation or warranty contained in such credit facility (which
corresponding covenant, representation or warranty has a similar
material adverse effect qualification as contained herein) has had,
could have, is reasonably likely to have or could reasonably be
expected to have (or any similar standard, as applicable) a "Material
Adverse Effect" (as such term is defined in such credit facility as in
effect on the date of such credit facility, or, if such term is not
defined in such credit facility, the applicable material adverse effect
qualification contained in such corresponding covenant, representation
or warranty); provided further, however, that the foregoing proviso
shall not apply if such credit facility does not have any such
corresponding covenant, representation or warranty.
"MATERIAL SUBSIDIARY" means Orion Power New York, Orion Power
MidWest and any other Subsidiary of the Borrower that, on a
consolidated basis with any of its Subsidiaries as of any date of
determination, accounts for more than 15% of the consolidated assets of
the Borrower and its Subsidiaries.
"MATERIAL SUBSIDIARY EVENT OF DEFAULT" means any "Event of
Default" under the Orion MidWest Credit Facility, the Orion Power New
York Credit Facility or any other material credit facility to which any
Material Subsidiary is a party resulting from any (i) payment default,
(ii) failure to obtain, revocation or cancellation of, or material
adverse modification to any material governmental approval, (iii)
bankruptcy or insolvency event, (iv) substantial loss, destruction or
condemnation of all or substantially all assets, (v) loss of "exempt
wholesale generator" status or (vi) abandonment of the ownership or
operation of any material portion of assets (including the "Events of
Default" under Sections 7.01, 7.07, 7.08, 7.11, 7.13 and 7.16 of the
Orion Power New York Credit Facility and corresponding "Events of
Default" under the Orion Power MidWest Credit Facility).
"MATERIAL PLAN" means, collectively, a Plan or Plans having
aggregate Unfunded Vested Liabilities in excess of $5,000,000.
"MOODY'S" means Moody's Investors Service, Inc. or any
successor thereto.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, that is subject to Title IV of ERISA and
to which the Borrower or any ERISA Affiliate of the Borrower is making
or accruing an obligation to make contributions, or has within any of
the preceding six plan years made or accrued an obligation to make
contributions, such plan being maintained pursuant to one or more
collective bargaining agreements.
27
23
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that is subject to Title IV of
ERISA and that (a) is sponsored or maintained for employees or former
employees of the Borrower or an ERISA Affiliate of the Borrower and at
least one Person other than the Borrower and its ERISA Affiliates, or
(b) was so sponsored or maintained and in respect of which the Borrower
or an ERISA Affiliate of the Borrower could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were
to be terminated.
"NET DISPOSITION PROCEEDS" means the sum of:
(a) the gross cash proceeds received by any
Subsidiary of the Borrower (i) from any sale, lease, transfer
or other disposition of material assets (including Capital
Stock and receivables) (other than proceeds from the sale of
inventory of such Subsidiary in the ordinary course of its
business) or (ii) as a result of the taking of all or any
material portion of the assets of such Subsidiary under the
power of eminent domain, condemnation or similar proceeding,
in each case including any cash payments received by way of a
deferred payment of principal pursuant to a permitted note or
installment receivable or otherwise, but only when and as
received;
minus
(b) in the case of clause (i) of subsection (a) above
only, (i) all reasonable and customary fees and expenses with
respect to legal, investment banking, brokerage, accounting
and other professional fees actually incurred by such
Subsidiary in connection with such sale, lease, transfer or
other disposition which have not been paid to such Subsidiary
or any of its Affiliates, (ii) all taxes actually paid or
reasonably estimated by such Subsidiary (determined in good
faith by the chief financial officer of such Subsidiary or of
such Subsidiary's general partner or other managing entity, as
applicable) to be payable in cash in connection with such
sale, lease, transfer or other disposition in the same year or
the next following year after the occurrence thereof, (iii)
all other reasonable costs and expenses incurred by such
Subsidiary in connection with such sale, lease, transfer or
other disposition which have not been paid to such Subsidiary
or any of its Affiliates, and (iv) any such proceeds from the
sale, transfer or other disposition of material assets that
are used within the period specified therefor in the Orion
Power New York Credit Facility, the Orion Power MidWest Credit
Facility and/or any other agreement or instrument evidencing
Permitted Subsidiary Debt, as applicable, to purchase or
acquire replacement assets of like utility in such
Subsidiary's business; provided, however, that if, after the
payment of all taxes with respect to such sale, lease,
transfer or other disposition, the amount of estimated taxes,
if any, pursuant to clause (ii) above exceeded the amount of
taxes actually paid in cash in respect of such sale, lease,
transfer or other disposition, the aggregate amount of such
excess shall be immediately payable, pursuant to Section
5.03(b), as Net Disposition Proceeds;
28
24
minus
(c) the amount of any mandatory prepayment made or
required to be made by such Subsidiary pursuant to any credit
facility (including the Orion Power MidWest Credit Facility,
the Orion Power New York Credit Facility and any other
agreement or instrument evidencing Permitted Subsidiary Debt)
to which it is a party from the proceeds of such sale, lease,
transfer, other disposition or taking.
"NET INSURANCE PROCEEDS" means (i) the gross cash proceeds of
casualty insurance received by any Subsidiary of the Borrower in
respect of any loss, damage or destruction to any material asset of
such Subsidiary, minus (ii) the portion of such proceeds applied or to
be applied by such Subsidiary to repair, restore or replace such asset,
minus (iii) the amount of any mandatory prepayment made or required to
be made by such Subsidiary pursuant to any credit facility (including
the Orion Power MidWest Credit Facility and the Orion Power New York
Credit Facility) to which it is a party from such insurance proceeds;
provided, however, that if any such insurance proceeds intended to be
applied by such Subsidiary to repair, restore or replace such asset
pursuant to clause (ii) above exceeded the amount actually paid in cash
in respect of repair, restoration or replacement, the aggregate amount
of such excess shall be immediately payable, pursuant to Section
5.03(b), as Net Insurance Proceeds (less any portion of such excess
required to be paid by such Subsidiary pursuant to clause (iii) above).
The Borrower shall cause each of its Subsidiaries to distribute to the
Borrower, on the first date that such Subsidiary is permitted to do so
pursuant to (x) any credit facility or other contractual obligation to
which such Subsidiary is a party and (y) applicable law, the maximum
amount of Net Insurance Proceeds permitted to be distributed by such
Subsidiary pursuant to such credit facility or other contractual
obligation and applicable law.
"NET SECURITIES PROCEEDS" means, in the case of the issuance,
placement or sale of equity securities of the Borrower or any
obligations convertible into or exchangeable for such equity
securities, or giving any Person a right, option or warrant to acquire
such equity securities or such convertible or exchangeable obligations
(in each case whether pursuant to a public or private offering), the
sum of:
(a) the gross cash proceeds received by the Borrower
from such issuance, placement or sale of equity securities
(including any cash payments received by way of deferred
payment of principal pursuant to a permitted promissory note
or installment receivable or otherwise, but only as and when
such cash payments are received), other than any such proceeds
that the Borrower certifies to the Administrative Agent and
the Lenders are intended to be contributed (as an equity
contribution) to one or more of its Subsidiaries (i) to
finance the acquisition, construction, development, expansion,
improvement or re-powering of power generating assets
(including the acquisition of any Person that owns such
assets) or (ii) to be used by such Subsidiary for other
general corporate purposes;
minus
29
25
(b) in connection with such issuance, placement or
sale of such equity securities, all reasonable and customary
fees and expenses and underwriters' discounts and commissions
actually paid by the Borrower to Persons other than the
Borrower or any of its Affiliates.
"NOTICE OF BORROWING" has the meaning assigned to that term in
Section 3.01(a).
"OECD" means the Organization for Economic Cooperation and
Development.
"OFFERING CIRCULAR" means the Offering Circular, dated April
20, 2000, in respect of the Senior Notes.
"ORION POWER MIDWEST" means Orion Power MidWest, L.P., a
Delaware limited partnership.
"ORION POWER MIDWEST CREDIT FACILITY" means that certain
Credit Agreement, dated as of April 28, 2000, among Orion Power
MidWest, Banc of America Securities LLC and Goldman Sachs Credit
Partners, L.P., as "Co-Lead Arrangers" and "Joint Book Runners",
Paribas and Deutsche Bank Securities Inc., as "Arrangers", Bank of
America, N.A., as "Administrative Agent" and "Issuing Bank", Goldman
Sachs Credit Partners, L.P., Paribas and Deutsche Bank AG New York
Branch, as "Syndication Agents", Paribas and Deutsche Bank AG New York
Branch, as "Documentation Agents", and the financial institutions party
thereto, as "Lenders", including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, and in each case as amended, modified, renewed, refunded,
restructured, supplemented, replaced or refinanced from time to time in
accordance with the terms thereof and hereof.
"ORION POWER MIDWEST PARTNERS" means the general partner(s)
and limited partner(s) of Orion Power MidWest.
"ORION POWER NEW YORK" means Orion Power New York, L.P., a
Delaware limited partnership.
"ORION POWER NEW YORK CREDIT FACILITY" means that certain
Credit Agreement, dated as of July 28, 1999, among Orion Power New
York, Banc of America Securities LLC and Paribas, as "Lead Arrangers",
the financial institutions party thereto, as "Lenders", and Bank of
America, N.A., as "Issuing Bank" and "Administrative Agent", including
any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as
amended, modified, renewed, refunded, restructured, supplemented,
replaced or refinanced from time to time in accordance with the terms
thereof and hereof.
"ORION POWER NEW YORK PARTNERS" means the general partner(s)
and limited partner(s) of Orion Power New York.
"PARTICIPANT" has the meaning assigned to that term in Section
11.07(e).
30
26
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor entity) established under ERISA.
"PERCENTAGE" means, for any Lender on any date of
determination, the percentage obtained by dividing such Lender's
Commitment on such date by the total of the Commitments on such date,
and multiplying the quotient so obtained by 100%. In the event that the
Commitments have been terminated, each Lender's Percentage shall be
calculated on the basis of the Commitments in effect immediately prior
to such termination.
"PERMITTED INVESTMENTS" means each of the following so long as
no such Permitted Investment shall have a final maturity later than
three months from the date of investment therein:
(i) direct obligations of the United States, or of
any agency thereof, or obligations guaranteed as to principal
and interest by the United States or any agency thereof;
(ii) certificates of deposit or bankers' acceptances
issued, or time deposits held, or investment contracts
guaranteed, by any Lender, any nationally-recognized
securities dealer or any other commercial bank, trust company,
savings and loan association or savings bank organized under
the laws of the United States, or any State thereof, or of any
other country which is a member of the OECD, or a political
subdivision of any such country, and in each case having
outstanding unsecured indebtedness that (on the date of
acquisition thereof) is rated A- or better by S&P or A3 or
better by Moody's (or an equivalent rating by another
nationally-recognized credit rating agency of similar standing
if neither of such corporations is then in the business of
rating unsecured bank indebtedness);
(iii) obligations with any Lender, any other bank or
trust company described in clause (ii), above, or any
nationally-recognized securities dealer, in respect of the
repurchase of obligations of the type described in clause (i),
above, provided that such repurchase obligations shall be
fully secured by obligations of the type described in said
clause (i) and the possession of such obligations shall be
transferred to, and segregated from other obligations owned
by, such Lender, such other bank or trust company or such
securities dealer;
(iv) commercial paper rated (on the date of
acquisition thereof) A-1 or P-1 or better by S&P or Moody's,
respectively (or an equivalent rating by another
nationally-recognized credit rating agency of similar standing
if neither of such corporations is then in the business of
rating commercial paper); and
(v) any eurodollar certificate of deposit issued by
any Lender or any other commercial bank, trust company,
savings and loan association or savings bank organized under
the laws of the United States, or any State thereof, or of any
country which is a member of the OECD, or a political
subdivision of any such
31
27
country, and in each case having outstanding unsecured
indebtedness that (on the date of acquisition thereof) is
rated A- or better by S&P or A3 or better by Moody's (or an
equivalent rating by another nationally-recognized credit
rating agency of similar standing if neither of such
corporations is then in the business of rating unsecured bank
indebtedness); and
(vi) investments in money market funds or money
market mutual funds sponsored by any securities broker/dealer
of recognized national standing (or an Affiliate thereof),
having an investment policy that requires substantially all
the invested assets of such fund to be invested in investments
described in any one or more of the foregoing clauses having a
rating of "A" or better by S&P or "A2" or better by Moody's
(including money market funds for which the Administrative
Agent in its individual capacity or any of its Affiliates is
investment manager or adviser).
"PERMITTED LIENS" has the meaning assigned to that term in
Section 8.02(a).
"PERMITTED SUBSIDIARY DEBT" has the meaning assigned to that
term in Section 8.02(c).
"PERMITTED SUBSIDIARY INVESTMENT" has the meaning assigned to
that term in Section 8.02(c).
"PERSON" means an individual, partnership, corporation
(including a business trust), joint stock company, limited liability
company, limited liability partnership, trust, unincorporated
association, joint venture or other entity, or a government or any
political subdivision or agency thereof.
"PLAN" means, with respect to the Borrower, an employee
benefit plan as defined in Section 3(3) of ERISA (other than a
Multiemployer Plan) sponsored or maintained for employees or former
employees of the Borrower or any of its ERISA Affiliates and covered by
Title IV of ERISA or Section 412 of the Internal Revenue Code,
including a Single Employer Plan and a Multiple Employer Plan.
"PROMISSORY NOTE" means any promissory note of the Borrower
payable to the order of a Lender (and, if requested, its registered
assigns), issued pursuant to Section 3.01(d); and "PROMISSORY NOTES"
means any or all of the foregoing.
"PUHCA" means the Public Utility Holding Company Act of 1935,
as amended from time to time.
"RECIPIENT" has the meaning assigned to that term in Section
11.08.
"REFINANCING PLAN" has the meaning assigned to that term in
Section 6.01(a).
"REGISTER" has the meaning assigned to that term in Section
11.07(c).
32
28
"RELATED PARTIES" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers,
employees, agents and advisors of such Person and such Person's
Affiliates.
"REQUEST FOR ISSUANCE" has the meaning assigned to that term
in Section 4.02(a).
"RESPONSIBLE OFFICER" means the Chief Executive Officer, any
Director, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, the Chief
Financial Officer or the Chief Operating Officer of the Borrower.
"S&P" means Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc., or any successor thereto.
"SENIOR FINANCIAL OFFICER" means the President, any Vice
President, the Chief Financial Officer or the Treasurer of the
Borrower.
"SENIOR NOTE INDENTURE" means the Indenture, dated as of April
27, 2000, between the Borrower and Wilmington Trust Company, as
Trustee.
"SENIOR NOTES" means the 12% Senior Notes due May 1, 2010
issued pursuant to the Senior Note Indenture in the aggregate principal
amount of up to $425,000,000.
"SINGLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, which is subject to Title IV
of ERISA and which (a) is sponsored or maintained for employees or
former employees of the Borrower or an ERISA Affiliate of the Borrower
and no Person other than the Borrower and its ERISA Affiliates, or (b)
was so sponsored or maintained and in respect of which the Borrower or
an ERISA Affiliate of the Borrower could have liability under Section
4069 of ERISA in the event such plan has been or were to be terminated.
"SUBSIDIARY" means, with respect to any Person, any
corporation or unincorporated entity (including, without limitation,
any partnership or limited liability company) of which more than 50% of
the outstanding Capital Stock (or comparable ownership interests)
having ordinary voting power (irrespective of whether at the time
Capital Stock (or comparable ownership interests) of any other class or
classes of such corporation or entity shall or might have voting power
upon the occurrence of any contingency) is at the time directly or
indirectly owned by said Person (whether directly or through one or
more other Subsidiaries). In the case of an unincorporated entity, a
Person shall be deemed to have more than 50% of interests having
ordinary voting power only if such Person's vote in respect of such
interests comprises more than 50% of the total voting power of all such
interests in the unincorporated entity.
"SUBSIDIARY COVENANT EVENT OF DEFAULT" has the meaning
assigned to that term in Section 9.01(e).
33
29
"SUBSIDIARY REPRESENTATION EVENT OF DEFAULT" has the meaning
assigned to that term in Section 9.01(b).
"SUPPORT OBLIGATIONS" means, for any Person, without
duplication, any financial obligation, contingent or otherwise, of such
Person guaranteeing or otherwise supporting any Debt or other
obligation of any other Person in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such
Debt, (ii) to purchase property, securities or services for the purpose
of assuring the owner of such Debt of the payment of such Debt, (iii)
to maintain working capital, equity capital, available cash or other
financial statement condition of the primary obligor so as to enable
the primary obligor to pay such Debt, (iv) to provide equity capital
under or in respect of equity subscription arrangements (to the extent
that such obligation to provide equity capital does not otherwise
constitute Debt), or (v) to perform, or arrange for the performance of,
any non-monetary obligations or non-funded debt payment obligations of
the primary obligor.
"TERMINATION DATE" means the earliest to occur of (i) July 27,
2003, (ii) the maturity date of the Orion Power New York Credit
Facility and (iii) the date of termination or reduction in whole of the
Commitments pursuant to Section 2.03 or 9.02.
"TOTAL VOTING POWER" means, with respect to any Person on any
date, the total number of votes which may be cast in the election of
directors of such Person at any meeting of stockholders of such Person
if all securities entitled to vote in the election of directors of such
Person (on a fully diluted basis, assuming the exercise, conversion or
exchange of all rights, warrants, options and securities outstanding on
such date which are or may thereafter become exercisable for,
exchangeable for or convertible into, such voting securities) were
present and voted at such meeting (other than votes that may be cast
only upon the happening of a contingency).
"TYPE" has the meaning assigned to such term (i) in the
definition of "Loan" when used in such context and (ii) in the
definition of "Borrowing" when used in such context.
"UNFUNDED VESTED LIABILITIES" means, with respect to any Plan
at any time, the amount (if any) by which (i) the present value of all
nonforfeitable accrued benefits under such Plan exceeds (ii) the fair
market value of all Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plan, but
only to the extent that such excess represents a potential liability of
the Borrower or any of its ERISA Affiliates to the PBGC or such Plan
under Title IV of ERISA.
"UNMATURED DEFAULT" means an event that, with the giving of
notice or lapse of time or both, would constitute an Event of Default.
34
30
"YEAR 2000 ISSUES" means actual and anticipated costs,
problems and uncertainties associated with the inability of certain
computer applications to effectively handle data including dates on and
after January 1, 2000.
SECTION 1.02. COMPUTATION OF TIME PERIODS; CONSTRUCTION. (a) Unless
otherwise indicated, each reference in this Agreement to a specific time of day
is a reference to New York City time. In the computation of periods of time
under this Agreement, any period of a specified number of days or months shall
be computed by including the first day or month occurring during such period and
excluding the last such day or month. In the case of a period of time "from" a
specified date "to" or "until" a later specified date, the word "from" means
"from and including" and the words "to" and "until" each means "to but
excluding".
(b) The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes", and "including" shall be deemed
to be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (ii) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (iii) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (iv) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (v)
the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 7.01(f) ("GAAP").
ARTICLE II
COMMITMENTS
SECTION 2.01. THE COMMITMENTS. (a) Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make Loans to the Borrower and to
participate in the issuance of Letters of Credit (and the LC Outstandings
thereunder) during the period from the Financial Closing Date until the
Termination Date, in an aggregate outstanding amount not to exceed on any day
such Lender's Available Commitment (after giving effect to all Extensions of
Credit to be made on such day and the application of the proceeds thereof).
Within the limits hereinafter set forth, the Borrower may request Extensions of
Credit hereunder, prepay Loans, or reduce or cancel Letters of Credit, and use
the resulting increase in the Available Commitments for further Extensions of
Credit in accordance with the terms hereof.
35
31
(b) In no event shall the Borrower be entitled to request or
receive any Extensions of Credit that would cause the principal amount
outstanding hereunder to exceed the Commitments.
SECTION 2.02. FEES. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee on the
average daily amount of such Lender's Available Commitment at a rate per annum
equal to the Commitment Fee Rate in effect from time to time, from the date
hereof, in the case of each Bank, and from the effective date specified in the
Lender Assignment pursuant to which it became a Lender, in the case of each
other Lender, until the Termination Date, payable quarterly in arrears on the
last day of each March, June, September and December, commencing on the first
such date to occur following the date hereof, and on the Termination Date.
(b) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commission (the "LETTER OF CREDIT COMMISSION") on the
average daily aggregate amount of the LC Outstandings from the date hereof until
the Termination Date, at a rate per annum equal to the Letter of Credit
Commission Rate in effect from time to time, payable quarterly in arrears on the
last day of each March, June, September and December, commencing on the first
such date to occur following the date hereof, and on the Termination Date;
provided, however, that upon the occurrence and during the continuance of an
Event of Default, the Letter of Credit Commission shall be based on the Default
Rate applicable to outstanding Letters of Credit.
(c) In addition to the fees provided for in subsections (a) and
(b) above, the Borrower shall pay to the Administrative Agent, for its own
account, such other fees as are provided for in that certain letter agreement,
dated as of the date hereof, between the Borrower and the Administrative Agent
(the "FEE LETTER"), in the amounts and at the times specified therein.
SECTION 2.03. REDUCTION OF THE COMMITMENTS. (a) Optional. The Borrower
may, upon at least five Business Days' notice to the Administrative Agent (which
shall promptly distribute copies thereof to the Lenders), terminate in whole or
reduce ratably in part the unused portions of the Commitments; provided that any
such partial reduction shall be in the aggregate amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof; and provided, further, that
the Commitments shall in no event be reduced to an amount which is less that the
aggregate LC Outstandings of all Letters of Credit then outstanding.
(b) Mandatory. The Commitments shall be automatically and
permanently reduced ratably by the aggregate amount the Loans are prepaid or the
LC Outstandings are cash collateralized pursuant to the operation of Section
5.03(b).
SECTION 2.04. COMPUTATIONS OF OUTSTANDINGS. Whenever reference is made
in this Agreement to the principal amount outstanding on any date under this
Agreement, such reference shall refer to the sum of (i) the aggregate principal
amount of all Loans outstanding on such date plus (ii) the aggregate LC
Outstandings of all Letters of Credit outstanding on such date, in each case
after giving effect to all Extensions of Credit to be made on such date and the
application of the proceeds thereof. At no time shall the principal amount
outstanding under this Agreement exceed the aggregate amount of the Commitments.
References to the unused portion of the
36
32
Commitments shall refer to the excess, if any, of the Commitments over the
principal amount outstanding hereunder; and references to the unused portion of
any Lender's Commitment shall refer to such Lender's Percentage of the unused
Commitments.
ARTICLE III
LOANS
SECTION 3.01. LOANS. (a) The Borrower may request a Borrowing (other
than a Conversion) by delivering a notice (a "NOTICE OF BORROWING") to the
Administrative Agent no later than 12:00 noon on the third Business Day or, in
the case of ABR Loans, on the first Business Day, prior to the date of the
proposed Borrowing. The Administrative Agent shall give each Lender prompt
notice of each Notice of Borrowing. Each Notice of Borrowing shall be in
substantially the form of Exhibit A and shall specify the requested (i) date of
such Borrowing (which shall be a Business Day, but in no event later than the
Business Day immediately preceding the Termination Date), (ii) Type of Loans to
be made in connection with such Borrowing, (iii) Interest Period, if any, for
such Loans and (iv) amount of such Borrowing. Each proposed Borrowing shall
conform to the requirements of Sections 3.03 and 3.04.
(b) Each Lender shall, before 12:00 noon on the date of such
Borrowing, make available for the account of its Applicable Lending Office to
the Administrative Agent at the Administrative Agent's address referred to in
Section 11.02, in same day funds, such Lender's Percentage of such Borrowing.
After the Administrative Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article VI, the Administrative Agent will
make such funds available to the Borrower at the Administrative Agent's
aforesaid address or will transfer such funds into such account(s) as the
Borrower may designate in the corresponding Notice of Borrowing. Notwithstanding
the foregoing, unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's Percentage of such
Borrowing, the Administrative Agent may assume that such Lender has made such
Percentage available to the Administrative Agent on the date of such Borrowing
in accordance with the first sentence of this subsection (b), and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount.
(c) If and to the extent that any Lender (a "NON-PERFORMING
LENDER") shall not have made available to the Administrative Agent, in
accordance with subsection (b) above, such Lender's Percentage of any Borrowing,
the non-performing Lender and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand corresponding amounts, together with
interest thereon for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative Agent, at
(i) in the case of the Borrower, the interest rate applicable at the time to
Loans made in connection with such Borrowing and (ii) in the case of such
Lender, the Federal Funds Effective Rate. Within the limits of each Lender's
Available Commitment and subject to the other terms and conditions set forth in
this Agreement for the making of Loans (including Section 8.01(h)), the Borrower
may request (and the Lenders shall honor) one or more additional Borrowings from
the performing Lenders to fund such repayment to the Administrative Agent. If a
non-performing Lender shall repay to the Administrative Agent such corresponding
amount in full (with interest as above
37
33
provided), (x) the Administrative Agent shall apply such corresponding amount
and interest to the repayment to the Administrative Agent (or repayment of Loans
made to fund such repayment to the Administrative Agent), and shall make any
remainder available to the Borrower and (y) such amount so repaid shall be
deemed to constitute such Lender's Loan, made as part of such Borrowing for
purposes of this Agreement as if funded concurrently with the other Loans made
as part of such Borrowing, and such Lender shall forthwith cease to be deemed a
non-performing Lender; if and so long as such non-performing Lender shall not
repay such amount, and unless and until an Eligible Assignee shall have assumed
and performed the obligations of such non-performing Lender, all computations by
the Administrative Agent of Percentages, Commitments and payments hereunder
shall be made without regard to the Commitments, or outstanding Loans, of such
non-performing Lender, and any amounts paid to the Administrative Agent for the
account of such non-performing Lender shall be held by the Administrative Agent
in trust for such non-performing Lender in a non-interest-bearing special
purpose account. Nothing herein shall in any way limit, waive or otherwise
reduce any claims that any party hereto may have against any non-performing
Lender. The failure of any Lender to make the Loan to be made by it as part of
any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender on the date of any Borrowing.
(d) Any Lender may request that Loans made by it hereunder be
evidenced by a Promissory Note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a Promissory Note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such Promissory Note and interest thereon shall at all times
(including after assignment pursuant to Section 11.07) be represented by one or
more Promissory Notes in such form payable to the order of the payee named
therein (or, if such Promissory Note is a registered note, to such payee and its
registered assigns).
(e) Upon receipt of an affidavit of an officer of the
Administrative Agent or of any Lender as to the loss, theft, destruction or
mutilation of any Promissory Note or any other Loan Document which is not of
public record, and, in the case of any such loss, theft, destruction or
mutilation, upon cancellation of such Promissory Note or other Loan Document,
the Borrower will issue, in lieu thereof, a replacement Promissory Note or other
Loan Document in the same principal amount thereof and otherwise of like tenor.
SECTION 3.02. CONVERSION OF LOANS. The Borrower may from time to time
Convert any Loan (or portion thereof) of any Type to one or more Loans of the
same or any other Type by delivering a notice of such Conversion (a "NOTICE OF
CONVERSION") to the Administrative Agent no later than 12:00 noon on (x) the
third Business Day prior to the date of any proposed Conversion into a
Eurodollar Rate Loan and (y) the first Business Day prior to the date of any
proposed Conversion into an ABR Loan. The Administrative Agent shall give each
Lender prompt notice of each Notice of Conversion. Each Notice of Conversion
shall be in substantially the form of Exhibit B and shall specify (i) the
requested date of such Conversion, (ii) the Type of, and Interest Period, if
any, applicable to, the Loans (or portions thereof) proposed to be Converted,
(iii) the requested Type of Loans to which such Loans (or portions thereof) are
38
34
proposed to be Converted, (iv) the requested initial Interest Period, if any, to
be applicable to the Loans resulting from such Conversion and (v) the aggregate
principal amount of Loans (or portions thereof) proposed to be Converted. Each
proposed Conversion shall be subject to the provisions of Sections 3.03 and
3.04.
SECTION 3.03. INTEREST PERIODS. The period between the date of each
Eurodollar Rate Loan and the date of payment in full of such Loan shall be
divided into successive periods of months ("INTEREST PERIODS") for purposes of
computing interest applicable thereto. The initial Interest Period for each such
Loan shall begin on the day such Loan is made, and each subsequent Interest
Period shall begin on the last day of the immediately preceding Interest Period
for such Loan. The duration of each Interest Period shall be 1, 2, 3, or 6
months, as the Borrower may, in accordance with Section 3.01 or 3.02, select;
provided, however, that:
(i) the Borrower may not select any Interest Period that
ends after the Termination Date;
(ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall occur on the next succeeding Business Day,
provided that if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding Business
Day; and
(iii) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period.
SECTION 3.04. OTHER TERMS RELATING TO THE MAKING AND CONVERSION OF
LOANS. (a) Notwithstanding anything in Section 3.01 or 3.02 to the contrary:
(i) each Borrowing (other than a Borrowing deemed made
under Section 4.04(c) or (d)) shall be in an aggregate amount not less
than (A) in the case of Eurodollar Loans, $5,000,000 or an integral
multiple of $1,000,000 in excess thereof, or (B) in the case of ABR
Loans, $1,000,000 or an integral multiple of $1,000,000 in excess
thereof (or, in each case, such lesser amount as shall be equal to the
total amount of the Available Commitments on such date, after giving
effect to all other Extensions of Credit to be made on such date), and
shall consist of Loans of the same Type, having the same Interest
Period and made or Converted on the same day by the Lenders ratably
according to their respective Percentages;
(ii) the Borrower may request that more than one Borrowing
be made on the same day;
(iii) at no time shall more than six (6) different
Borrowings comprising Eurodollar Rate Loans be outstanding hereunder;
39
35
(iv) no Eurodollar Rate Loan may be Converted on a date
other than the last day of the Interest Period applicable to such Loan
unless the corresponding amounts, if any, payable to the Lenders
pursuant to Section 5.04(b) are paid within two Business Days after the
Administrative Agent provides written notice to the Borrower as to
amounts owing under Section 5.04(b) in connection with such Conversion;
(v) if the Borrower shall either fail to give a timely
Notice of Conversion pursuant to Section 3.02 in respect of any Loans
or fail, in any Notice of Conversion that has been timely given, to
select the duration of any Interest Period for Loans to be Converted
into Eurodollar Rate Loans in accordance with Section 3.03, such Loans
shall, on the last day of the then existing Interest Period therefor,
automatically Convert into, or remain as, as the case may be, ABR
Loans; and
(vi) if, on the date of any proposed Conversion, any Event
of Default or Unmatured Default shall have occurred and be continuing,
all Loans then outstanding shall, on such date, automatically Convert
into, or remain as, as the case may be, ABR Loans.
(b) If any Lender shall notify the Administrative Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other governmental
authority asserts that it is unlawful, for such Lender or its Applicable Lending
Office to perform its obligations hereunder to make, or to fund or maintain,
Eurodollar Rate Loans hereunder, (i) the obligation of such Lender to make, or
to Convert Loans into, Eurodollar Rate Loans for such Borrowing or any
subsequent Borrowing from such Lender shall be forthwith suspended until the
earlier to occur of the date upon which (A) such Lender shall cease to be a
party hereto and (B) it is no longer unlawful for such Lender to make, fund or
maintain Eurodollar Rate Loans, and (ii) if the maintenance of Eurodollar Rate
Loans then outstanding through the last day of the Interest Period therefor
would cause such Lender to be in violation of such law, regulation or assertion,
such Lender may require the Borrower to Convert all Eurodollar Rate Loans from
such Lender within five Business Days after such notice, and if the Borrower
shall not have Converted such Eurodollar Rate Loans by such fifth Business Day,
then such Eurodollar Rate Loans shall be deemed automatically Converted to ABR
Loans on such fifth Business Day. Promptly upon becoming aware that the
circumstances that caused such Lender to deliver such notice no longer exist,
such Lender shall deliver notice thereof to the Administrative Agent (but the
failure to do so shall impose no liability upon such Lender). Promptly upon
receipt of such notice from such Lender (or upon such Lender's assigning all of
its Commitments, Loans, participation and other rights and obligations hereunder
to an Eligible Assignee), the Administrative Agent shall deliver notice thereof
to the Borrower and the Lenders and such suspension shall terminate. Prior to
any Lender giving notice to the Administrative Agent or the Borrower under this
subsection (b), such Lender shall use reasonable efforts to change the
jurisdiction of its Applicable Lending Office, if such change would avoid such
unlawfulness and would not, in the sole determination of such Lender, be
otherwise disadvantageous to such Lender.
(c) If the Majority Lenders shall, at least one Business Day
before the date of any requested Borrowing, notify the Administrative Agent that
the Eurodollar Rate for Eurodollar
40
36
Rate Loans to be made in connection with such Borrowing will not adequately
reflect the cost to such Majority Lenders of making, funding or maintaining
their respective Eurodollar Rate Loans for such Borrowing, the right of the
Borrower to select Eurodollar Rate Loans for such Borrowing and any subsequent
Borrowing shall be suspended until the Administrative Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist with respect to the Majority Lenders, and each Loan to be made or
Converted in connection with such Borrowing shall be an ABR Loan.
(d) If any Lender shall have delivered a notice to the Borrower or
the Administrative Agent described in Section 3.04(b) or Section 3.06, or shall
become a non-performing Lender under Section 3.01(c) or Section 4.04(c), and if
and so long as such Lender shall not have withdrawn such notice or corrected
such non-performance in accordance with said Section 3.04(b), Section 3.06,
Section 3.01(c) or Section 4.04(c), the Borrower or the Administrative Agent may
demand that such Lender assign in accordance with Section 11.07, to one or more
Eligible Assignees designated by the Borrower or the Administrative Agent, all
(but not less than all) of such Lender's Commitments, Loans, participation and
other rights and obligations hereunder; provided that any such demand by the
Borrower during the continuance of an Event of Default or an Unmatured Default
shall be ineffective without the consent of the Majority Lenders. If, within 30
days following any such demand by the Administrative Agent or the Borrower, any
such Eligible Assignee so designated shall fail to consummate such assignment on
terms reasonably satisfactory to such Lender, or the Borrower and the
Administrative Agent shall have failed to designate any such Eligible Assignee,
then such demand by the Borrower or the Administrative Agent shall become
ineffective, it being understood for purposes of this provision that such
assignment shall be conclusively deemed to be on terms reasonably satisfactory
to such Lender, and such Lender shall be compelled to consummate such assignment
forthwith, if such Eligible Assignee (i) shall agree to such assignment in
substantially the form of the Lender Assignment attached hereto as Exhibit F and
(ii) shall tender payment to such Lender in an amount equal to the full
outstanding dollar amount accrued in favor of such Lender hereunder (as computed
in accordance with the records of the Administrative Agent), including, without
limitation, all accrued interest and fees and, to the extent not paid by the
Borrower, any payments required pursuant to Section 5.04(b).
(e) Each Notice of Borrowing and Notice of Conversion shall be
irrevocable and binding on the Borrower. In the case of any Borrowing which the
related Notice of Borrowing or Notice of Conversion specifies is to be comprised
of Eurodollar Rate Loans, the Borrower shall indemnify each Lender against any
loss, cost or expense incurred by such Lender as a result of any failure by the
Borrower to fulfill, on or before the date specified in such Notice of Borrowing
or Notice of Conversion for such Borrowing, the applicable conditions (if any)
set forth in this Article III (other than failure pursuant to the provisions of
Section 3.04(c) hereof) or in Article VI, including any such loss (other than
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to fund the Loan to be made by such Lender when such Loan, as a result of such
failure, is not made on such date.
SECTION 3.05. REPAYMENT OF LOANS; INTEREST. (a) Principal. The Borrower
shall repay the outstanding principal amount of the Loans on the Termination
Date.
41
37
(b) Interest. The Borrower shall pay interest on the unpaid
principal amount of each Loan owing to each Lender from the date of such Loan
until such principal amount shall be paid in full, at the Applicable Rate for
such Loan (except as otherwise provided in this subsection (b)), payable as
follows:
(i) ABR Loans. If such Loan is an ABR Loan,
interest thereon shall be payable quarterly in arrears on the
last day of each March, June, September and December, on the
date of any Conversion of such ABR Loan and on the date such
ABR Loan shall become due and payable or shall otherwise be
paid in full; provided, that upon the occurrence and during
the continuance of an Event of Default, the Borrower shall pay
interest on the unpaid principal amount of each ABR Loan at a
rate per annum equal to the Default Rate in effect from time
to time.
(ii) Eurodollar Rate Loans. If such Loan is a
Eurodollar Rate Loan, interest thereon shall be payable on the
last day of each Interest Period for such Loan and, if the
Interest Period for such Loan has a duration of more than
three months, on that day of each third month during such
Interest Period that corresponds to the first day of such
Interest Period (or, if any such month does not have a
corresponding day, then on the last day of such month);
provided, that upon the occurrence and during the continuance
of an Event of Default, the Borrower shall pay interest on the
unpaid principal amount of each Eurodollar Rate Loan at a rate
per annum equal to the Default Rate in effect from time to
time.
SECTION 3.06. ADDITIONAL INTEREST ON EURODOLLAR RATE LOANS. The
Borrower shall pay to the Administrative Agent for the account of each Lender
any costs actually incurred by such Lender with respect to Eurodollar Rate Loans
that are attributable to such Lender's compliance with regulations of the Board
requiring the maintenance of reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities. Such costs shall be paid to
the Administrative Agent for the account of such Lender in the form of
additional interest on the unpaid principal amount of each Eurodollar Rate Loan
of such Lender, from the date of such Eurodollar Rate Loan until such principal
amount is paid in full, at an interest rate per annum equal at all times to the
remainder obtained by subtracting (i) the Eurodollar Rate for the Interest
Period for such Eurodollar Rate Loan from (ii) the rate obtained by dividing
such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Reserve
Percentage of such Lender for such Interest Period, payable on each date on
which interest is payable on such Eurodollar Rate Loan (but in no event earlier
than ten Business Days after the Borrower's receipt of the certificate referred
to in the last sentence of this Section 3.06). Such additional interest shall be
determined by such Lender and notified to the Borrower through the
Administrative Agent. A certificate as to the amount of such additional interest
and giving a reasonable explanation and calculation thereof shall be submitted
to the Borrower and the Administrative Agent by such Lender and shall be
conclusive and binding for all purposes, absent manifest error, provided that
the determination thereof shall have been made by such Lender in good faith.
42
38
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.01. ISSUING BANKS. Subject to the terms and conditions
hereof, the Borrower may from time to time identify and arrange for one or more
Lenders or other financial institutions to act as Issuing Banks hereunder. Any
such designation by the Borrower that is accepted by the proposed Issuing Bank
shall be notified to the Administrative Agent at least five Business Days prior
to the first date upon which the Borrower proposes that such Issuing Bank issue
its first Letter of Credit. Within three Business Days following the receipt of
any such designation of a financial institution (other than a Lender) as a
proposed Issuing Bank, the Administrative Agent shall notify the Borrower as to
whether such designee is acceptable to the Administrative Agent. The failure by
the Administrative Agent to provide such notice to the Borrower within such time
period shall be deemed to be an approval of such proposed Issuing Bank. Nothing
contained herein shall be deemed to require any Lender to agree to act as an
Issuing Bank, if it does not so desire.
SECTION 4.02. LETTERS OF CREDIT. (a) Each Letter of Credit shall be
issued (or the stated maturity thereof extended or terms thereof modified or
amended) on not less than three Business Days' prior written notice thereof to
the Administrative Agent (which shall promptly distribute copies thereof to the
Lenders) and the relevant Issuing Bank. Each such notice (a "REQUEST FOR
ISSUANCE") shall specify (i) the date (which shall be a Business Day) of
issuance of such Letter of Credit (or the date of effectiveness of such
extension, modification or amendment) and the stated expiry date thereof (which
shall be no later than the earlier to occur of (A) the date one year after the
date of issuance of such Letter of Credit (or, in the case of any extension
thereof, one year after the effectiveness of such extension) and (B) the date
that is five Business Days prior to the Termination Date, provided that any
Letter of Credit with a stated expiry date of one year after its date of
issuance may provide for the renewal thereof for additional one-year periods
(but in no event later than the Termination Date) subject to the other terms and
conditions contained herein (including the satisfaction of the conditions
precedent set forth in Section 6.03)), (ii) the proposed stated amount of such
Letter of Credit (which shall not be less than $1,000,000) and (iii) such other
information as shall demonstrate compliance of such Letter of Credit with the
requirements specified therefor in this Agreement and the relevant Issuing Bank
Agreement. Each Request for Issuance shall be irrevocable unless modified or
rescinded by the Borrower not less than one Business Day prior to the proposed
date of issuance (or effectiveness) specified therein. Not later than 12:00 noon
on the proposed date of issuance (or effectiveness) specified in such Request
for Issuance, and upon fulfillment of the applicable conditions precedent and
the other requirements set forth herein and in the relevant Issuing Bank
Agreement, such Issuing Bank shall issue (or extend, amend or modify) such
Letter of Credit and provide notice and a copy thereof to the Administrative
Agent, which shall promptly furnish copies thereof to the Lenders.
(b) Each Lender severally agrees with such Issuing Bank to
participate in the Extension of Credit resulting from the issuance (or
extension, modification or amendment) of such Letter of Credit, in the manner
and the amount provided in Section 4.04(b), and the issuance of such Letter of
Credit shall be deemed to be a confirmation by such Issuing Bank and each Lender
of such participation in such amount.
43
39
(c) Notwithstanding anything herein to the contrary, the aggregate
LC Outstandings of all Letters of Credit outstanding at any one time shall not
exceed the Letter of Credit Sublimit.
SECTION 4.03. ISSUING BANK FEES. The Borrower shall pay directly to
each Issuing Bank such fees and expenses, if any, specified to be paid to such
Issuing Bank pursuant to the Issuing Bank Agreement to which it is a party, at
the times, and in the manner, specified in such Issuing Bank Agreement.
SECTION 4.04. REIMBURSEMENT TO ISSUING BANKS. (a) The Borrower hereby
agrees to pay to the Administrative Agent for the account of each Issuing Bank,
on demand made by such Issuing Bank to the Borrower and the Administrative
Agent, on and after each date on which such Issuing Bank shall pay any amount
under any Letter of Credit issued by such Issuing Bank, a sum equal to the
amount so paid plus interest on such amount from the date so paid by such
Issuing Bank until repayment to such Issuing Bank in full at a fluctuating
interest rate per annum equal at all times to the Applicable Rate for ABR Loans.
(b) If any Issuing Bank shall not have been reimbursed in full for
any payment made by such Issuing Bank under any Letter of Credit on the date of
such payment, such Issuing Bank shall give the Administrative Agent and each
Lender prompt notice thereof (an "LC PAYMENT NOTICE") no later than 12:00 noon
on the Business Day immediately succeeding the date of such payment by such
Issuing Bank. Each Lender severally agrees to purchase a participation in the
reimbursement obligation of the Borrower to such Issuing Bank under subsection
(a) above, by paying to the Administrative Agent for the account of such Issuing
Bank an amount equal to such Lender's Percentage of such unreimbursed amount
paid by such Issuing Bank, plus interest on such amount at a rate per annum
equal to the Federal Funds Effective Rate from the date of such payment by such
Issuing Bank to the date of payment to such Issuing Bank by such Lender. Each
such payment by a Lender shall be made not later than 3:00 P.M. on the later to
occur of (i) the Business Day immediately following the date of such payment by
such Issuing Bank and (ii) the Business Day on which such Lender shall have
received an LC Payment Notice from such Issuing Bank. Each Lender's obligation
to make each such payment to the Administrative Agent for the account of such
Issuing Bank shall be several and shall not be affected by the occurrence or
continuance of any Unmatured Default or Event of Default or the failure of any
other Lender to make any payment under this Section 4.04. Each Lender further
agrees that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.
(c) The failure of any Lender to make any payment to the
Administrative Agent for the account of an Issuing Bank in accordance with
subsection (b) above, shall not relieve any other Lender of its obligation to
make payment, but no Lender shall be responsible for the failure of any other
Lender. If any Lender (a "NON-PERFORMING LENDER") shall fail to make any payment
to the Administrative Agent for the account of an Issuing Bank in accordance
with subsection (b) above within five Business Days after the LC Payment Notice
relating thereto, then, for so long as such failure shall continue, such Issuing
Bank shall be deemed, for purposes of Section 5.05 and Article IX hereof, to be
a Lender hereunder owed a Loan in an amount equal to the outstanding principal
amount due and payable by such non-performing Lender to the Administrative Agent
for the account of such Issuing Bank pursuant to subsection (b) above.
44
40
(d) Each participation purchased by a Lender under subsection (b)
above shall constitute an ABR Loan deemed made by such Lender to the Borrower on
the date of such payment by the relevant Issuing Bank under the applicable
Letter of Credit issued by such Issuing Bank (irrespective of the Borrower's
noncompliance, if any, with the conditions precedent for Loans hereunder); and
all such payments by the Lenders in respect of any one such payment by such
Issuing Bank shall constitute a single Borrowing hereunder.
SECTION 4.05. OBLIGATIONS ABSOLUTE. The payment obligations of each
Lender under Section 4.04(b) and of the Borrower under this Agreement in respect
of any payment under any Letter of Credit and any Loan deemed made under Section
4.04(c) or (d) shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following circumstances:
(i) any lack of validity or enforceability of
any Loan Document or any other agreement or instrument
relating thereto or to such Letter of Credit;
(ii) any amendment or waiver of, or any consent
to departure from, all or any of the Loan Documents;
(iii) the existence of any claim, set-off, defense
or other right which the Borrower may have at any time against
any beneficiary, or any transferee, of such Letter of Credit
(or any Persons for whom any such beneficiary or any such
transferee may be acting), any Issuing Bank, or any other
Person, whether in connection with this Agreement, the
transactions contemplated herein or by such Letter of Credit,
or any unrelated transaction;
(iv) any statement or any other document
presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(v) payment in good faith by the relevant
Issuing Bank under such Letter of Credit against presentation
of a draft or certificate which does not comply with the terms
of such Letter of Credit; or
(vi) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing.
SECTION 4.06. LIABILITY OF ISSUING BANKS AND THE LENDERS. The Borrower
assumes all risks of the acts and omissions of any beneficiary or transferee of
any Letter of Credit, and neither the Issuing Bank that has issued such Letter
of Credit, the Lenders nor any of their respective officers, directors,
employees, agents or Affiliates shall be liable or responsible for (a) the use
that may be made of such Letter of Credit or any acts or omissions of any
beneficiary or transferee thereof in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon, even if
such documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by such Issuing Bank against presentation of
documents that do not comply with the terms of such Letter of Credit, including
45
41
failure of any documents to bear any reference or adequate reference to such
Letter of Credit; or (d) any other circumstances whatsoever in making or failing
to make payment under such Letter of Credit, except that the Borrower shall have
the right to bring suit against such Issuing Bank, and such Issuing Bank shall
be liable to the Borrower and any Lender, to the extent of any direct, as
opposed to consequential, damages suffered by the Borrower or such Lender which
the Borrower or such Lender proves were caused by such Issuing Bank's willful
misconduct or gross negligence, including such Issuing Bank's willful failure to
make timely payment under such Letter of Credit following the presentation to it
by the beneficiary thereof of a draft and accompanying certificate(s) which
strictly comply with the terms and conditions of such Letter of Credit. In
furtherance and not in limitation of the foregoing, any Issuing Bank may accept
sight drafts and accompanying certificates presented under any Letter of Credit
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
Notwithstanding the foregoing, no Lender shall be obligated to indemnify the
Borrower for damages caused by any Issuing Bank's willful misconduct or gross
negligence, and the obligation of the Borrower to reimburse the Lenders
hereunder shall be absolute and unconditional, notwithstanding the gross
negligence or willful misconduct of any Issuing Bank.
ARTICLE V
PAYMENTS, COMPUTATIONS AND
YIELD PROTECTION
SECTION 5.01. PAYMENTS AND COMPUTATIONS. (a) The Borrower shall make
each payment hereunder and under the other Loan Documents not later than 1:00
P.M. on the day when due in Dollars to the Administrative Agent at its address
referred to in Section 11.02 in same day funds, except payments to be made
directly to any Issuing Bank as expressly provided herein; any payment received
after 1:00 P.M. shall be deemed to have been received at the start of business
on the next succeeding Business Day. The Administrative Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal, interest, fees or other amounts payable to the Lenders, to the
respective Lenders to which the same are payable, for the account of their
respective Applicable Lending Offices, in each case to be applied in accordance
with the terms of this Agreement. If and to the extent that any distribution of
any payment from the Borrower required to be made to any Lender pursuant to the
preceding sentence shall not be made in full by the Administrative Agent on the
date such payment was received by the Administrative Agent, the Administrative
Agent shall pay to such Lender, upon demand, interest on the unpaid amount of
such distribution, at a rate per annum equal to the Federal Funds Effective
Rate, from the date of such payment by the Borrower to the Administrative Agent
to the date of payment in full by the Administrative Agent to such Lender of
such unpaid amount. Upon the Administrative Agent's acceptance of a Lender
Assignment and recording of the information contained therein in the Register
pursuant to Section 11.07, from and after the effective date specified in such
Lender Assignment, the Administrative Agent shall make all payments hereunder
and under any Promissory Notes in respect of the interest assigned thereby to
the Lender assignee thereunder, and the parties to such Lender Assignment shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
46
42
(b) The Borrower hereby authorizes the Administrative Agent, each
Lender and each Issuing Bank, if and to the extent payment owed to the
Administrative Agent, such Lender or such Issuing Bank, as the case may be, is
not made by the Borrower when due hereunder (or, in the case of a Lender, under
any Promissory Note held by such Lender) and such nonpayment constitutes an
Event of Default, to charge from time to time against any or all of the
Borrower's accounts with the Administrative Agent, such Lender or such Issuing
Bank, as the case may be, any amount so due.
(c) All computations of interest based on the Alternate Base Rate
(when the Alternate Base Rate is based on the Base Rate) shall be made by the
Administrative Agent on the basis of a year of 365 or 366 days, as the case may
be. All other computations of interest and fees hereunder (including
computations of interest based on the Eurodollar Rate and the Federal Funds
Effective Rate) shall be made by the Administrative Agent on the basis of a year
of 360 days. In each such case, such computation shall be made for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such interest or fees are payable. Each such determination
by the Administrative Agent or a Lender shall be conclusive and binding for all
purposes, absent manifest error.
(d) Whenever any payment hereunder or under any other Loan
Document shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of interest
and fees hereunder; provided, however, that if such extension would cause
payment of interest on or principal of Eurodollar Rate Loans to be made in the
next following calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the Lenders
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date, and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the
Administrative Agent, such Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender, together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Effective Rate.
(f) Any principal, interest, fees or other amounts payable by the
Borrower hereunder or under any of the Promissory Notes that is not paid when
due (whether at stated maturity, by acceleration or otherwise) shall (to the
fullest extent permitted by law) bear interest, from the date when due until
paid in full, at a rate per annum equal at all times to the Default Rate,
payable on demand.
(g) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and fees then due hereunder, such funds shall be applied (i) first,
towards payment of interest and fees then due hereunder,
47
43
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, towards payment of
principal then due hereunder, ratably among the parties entitled thereto.
SECTION 5.02. INTEREST RATE DETERMINATION. The Administrative Agent
shall give prompt notice to the Borrower and the Lenders of the applicable
interest rate determined by the Administrative Agent for purposes of Section
3.05(b)(i) or (ii).
SECTION 5.03. PREPAYMENTS. The Borrower shall have no right to prepay
any principal amount of any Loans other than as provided in subsections (a), (b)
and (c) below.
(a) The Borrower may, upon at least three Business Days' notice to
the Administrative Agent stating the proposed date and the aggregate principal
amount of the prepayment, and if such notice is given, the Borrower shall,
prepay the outstanding principal amounts of Loans made as part of the same
Borrowing, in whole or ratably in part, together with (i) accrued interest to
the date of such prepayment on the principal amount prepaid and (ii) in the case
of Eurodollar Rate Loans, and subject to Section 5.04(d), any amount payable to
the Lenders pursuant to Section 5.04(b); provided, however, that each partial
prepayment shall be in an aggregate principal amount of not less than (A) in the
case of Eurodollar Loans, $5,000,000 or an integral multiple of $1,000,000 in
excess thereof or (B) in the case of ABR Loans, $1,000,000 or an integral
multiple of $1,000,000 in excess thereof.
(b) The Borrower shall, on the date of receipt by the Borrower of
any Net Disposition Proceeds, Net Insurance Proceeds or Net Securities Proceeds,
pay to the Administrative Agent 100% of all such Net Disposition Proceeds and
Net Insurance Proceeds and, if requested by the Majority Lenders (in their sole
and absolute discretion), 50% of all such Net Securities Proceeds, in each case
to be applied as a mandatory prepayment of the outstanding principal amount of
the Loans and, if all of the Loans have been paid in full, to cash collateralize
all LC Outstandings (pursuant to a cash collateral agreement in form, scope and
substance satisfactory to the Administrative Agent and the Borrower). In
connection with any such prepayment, the Borrower shall also pay (i) accrued
interest to the date of such prepayment on the principal amount prepaid and (ii)
in the case of prepayments of Eurodollar Rate Loans, and subject to Section
5.04(d), any amount payable to the Lenders pursuant to Section 5.04(b). Any
prepayments of the Loans required by this subsection (b) shall be applied to
outstanding ABR Loans up to the full amount thereof before they are applied to
outstanding Eurodollar Rate Loans. The Borrower shall deliver to the
Administrative Agent, at the time of each prepayment required under this
subsection (b), (A) a certificate signed by a Senior Financial Officer setting
forth in reasonable detail the calculation of the amount of such prepayment and
(B) to the extent practicable, at least one Business Day's prior written notice
of such prepayment.
(c) On the date of any termination or reduction of the Commitments
pursuant to Section 2.03(a), the Borrower shall pay or prepay so much of the
principal amount outstanding hereunder as shall be necessary in order that the
aggregate principal amount outstanding hereunder (after giving effect to all
Extensions of Credit to be made on such date and the application of the proceeds
thereof) will not exceed the Commitments following such termination or
reduction, together with (i) accrued interest to the date of such prepayment on
the
48
44
principal amount prepaid and (ii) in the case of prepayments of Eurodollar Rate
Loans, and subject to Section 5.04(d), any amount payable to the Lenders
pursuant to Section 5.04(b). Any prepayments required by this subsection (c)
shall be applied to outstanding ABR Loans up to the full amount thereof before
they are applied to outstanding Eurodollar Rate Loans.
SECTION 5.04. YIELD PROTECTION. (a) Increased Costs. If, due to either
(i) the introduction of or any change in or in the interpretation of any law or
regulation after the date hereof, or (ii) the compliance with any guideline or
request from any central bank or other governmental authority (whether or not
having the force of law) issued or made after the date hereof, there shall be
reasonably incurred any increase in (A) the cost to any Lender of agreeing to
make or making, funding or maintaining Eurodollar Rate Loans, or of
participating in the issuance, maintenance or funding of any Letter of Credit,
or (B) the cost to any Issuing Bank of issuing or maintaining any Letter of
Credit, then the Borrower shall from time to time, promptly after demand by such
Lender or Issuing Bank, as the case may be (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender or Issuing Bank, as the case may be, additional amounts sufficient to
compensate such Lender or Issuing Bank, as the case may be, for such increased
cost. A certificate as to the amount of such increased cost and giving a
reasonable explanation and calculation thereof shall be submitted to the
Borrower and the Administrative Agent by such Lender or such Issuing Bank, as
the case may be, shall constitute such demand and shall be conclusive and
binding for all purposes, absent manifest error.
(b) Breakage. If, due to any prepayment pursuant to Section 5.03,
an acceleration of maturity of the Loans pursuant to Section 9.02, or any other
reason, any Lender receives payments of principal of any Eurodollar Rate Loan
other than on the last day of the Interest Period relating to such Loan, or if
the Borrower shall Convert any Eurodollar Rate Loans on any day other than the
last day of the Interest Period therefor, the Borrower shall, promptly after
demand by such Lender (with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such Lender any amounts
required to compensate such Lender for additional losses, costs, or expenses
(including anticipated lost profits) that such Lender may reasonably incur as a
result of such payment or Conversion, including any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund or maintain such Loan. For purposes of this
subsection (b) and Section 3.04(e), a certificate setting forth the amount of
such additional losses, costs, or expenses and giving a reasonable explanation
and calculation thereof shall be submitted to the Borrower and the
Administrative Agent by such Lender, shall constitute such demand and shall be
conclusive and binding for all purposes, absent manifest error.
(c) Capital. If any Lender or Issuing Bank determines that (i)
compliance with any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law) affects or would affect the amount of capital required or expected to be
maintained by such Lender or Issuing Bank, whether directly, or indirectly as a
result of commitments of any corporation controlling such Lender or Issuing Bank
(but without duplication), and (ii) the amount of such capital is increased by
or based upon (A) the existence of such Lender's or Issuing Bank's commitment to
lend or issue or participate in any Letter of Credit hereunder, or (B) the
participation in or issuance or maintenance of any
49
45
Letter of Credit or Loan and (C) other similar such commitments, then, promptly
after demand by such Lender or Issuing Bank, the Borrower shall pay to the
Administrative Agent for the account of such Lender or Issuing Bank from time to
time as specified by such Lender or Issuing Bank additional amounts sufficient
to compensate such Lender or Issuing Bank in the light of such circumstances, to
the extent that such Lender or Issuing Bank reasonably determines such increase
in capital to be allocable to the transactions contemplated hereby. A
certificate as to such amounts and giving a reasonable explanation and
calculation thereof (to the extent permitted by law) shall be submitted to the
Borrower and the Administrative Agent by such Lender or Issuing Bank and shall
be conclusive and binding for all purposes, absent manifest error.
(d) Notices, Etc. Each Lender and Issuing Bank hereby agrees to
use all reasonable efforts to notify the Borrower of the occurrence of any event
referred to in subsection (a), (b) or (c) of this Section 5.04 promptly after
becoming aware of the occurrence thereof. The Borrower shall pay the
Administrative Agent, for the account of such Lender or Issuing Bank, as the
case may be, the amount shown as due on any certificate delivered pursuant to
this Section 5.04 within ten Business Days after its receipt of the same. The
failure of any Lender or Issuing Bank to provide such notice or to make demand
for payment under said subsection shall not constitute a waiver of such Lender's
or Issuing Bank's rights hereunder; provided that, notwithstanding any provision
to the contrary contained in this Agreement, the Borrower shall not be required
to reimburse any Lender or Issuing Bank for any amounts or costs incurred under
subsection (a), (b) or (c) above, more than 90 days prior to the date that such
Lender or Issuing Bank, as the case may be, notifies the Borrower in writing
thereof, in each case unless, and to the extent that, any such amounts or costs
so incurred shall relate to the retroactive application of any event notified to
the Borrower which entitles such Lender or Issuing Bank to such compensation.
Each Lender claiming any compensation under this Section 5.04 shall use
reasonable efforts to designate a different Applicable Lending Office if such
designation would not result in the incurrence by such Lender of additional
costs or expenses which it deems material or, in the sole judgment of such
Lender, be inadvisable for regulatory, competitive or internal management
reasons. If any Lender or Issuing Bank shall subsequently determine that any
amount demanded and collected under this Section 5.04 was done so in error, such
Lender or Issuing Bank, as the case may be, will promptly return such amount to
the Borrower.
(e) Survival of Obligations. Subject to subsection (d) above, the
Borrower's obligations under this Section 5.04 shall survive the repayment of
all other amounts owing to the Lenders, the Administrative Agent and the Issuing
Banks under the Loan Documents and the termination of the Commitments. If and to
the extent that the obligations of the Borrower under this Section 5.04 are
unenforceable for any reason, the Borrower agrees to make the maximum
contribution to the payment and satisfaction thereof which is permissible under
applicable law.
SECTION 5.05. SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Loans owing to it (other than pursuant
to Section 5.04) in excess of its ratable share of payments obtained by all the
Lenders on account of the Loans of such Lenders, such Lender shall forthwith
purchase from the other Lenders such participation in the Loans owing to them as
shall be necessary to cause such purchasing Lender to share the excess payment
ratably
50
46
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery together with an amount
equal to such Lender's ratable share (according to the proportion of (i) the
amount of such Lender's required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 5.05 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. Notwithstanding the foregoing, if
any Lender shall obtain any such excess payment involuntarily, such Lender may,
in lieu of purchasing participations from the other Lenders in accordance with
this Section 5.05, on the date of receipt of such excess payment, return such
excess payment to the Administrative Agent for distribution in accordance with
Section 5.01(a).
SECTION 5.06. TAXES. (a) All payments by the Borrower hereunder and
under the other Loan Documents shall be made in accordance with Section 5.01,
free and clear of and without deduction for all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender, each Issuing Bank and each
Agent, taxes imposed on its overall net income, and franchise taxes imposed on
it by the jurisdiction under the laws of which such Lender, such Issuing Bank or
such Agent (as the case may be) is organized or any political subdivision
thereof and, in the case of each Lender, taxes imposed on its overall net
income, and franchise taxes imposed on it by the jurisdiction of such Lender's
Applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "TAXES"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any other Loan Document to any Lender, any Issuing Bank or
any Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 5.06) such Lender, such Issuing Bank
or such Agent (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions, and (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or under any other
Loan Document or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any other Loan Document (hereinafter referred
to as "OTHER TAXES").
(c) The Borrower will indemnify each Lender, each Issuing Bank and
each Agent for the full amount of Taxes and Other Taxes (including any Taxes and
any Other Taxes imposed by any jurisdiction on amounts payable under this
Section 5.06) paid by such Lender, such Issuing Bank or such Agent (as the case
may be) and any liability (including penalties, interest and
51
47
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. This indemnification shall be
made within 30 days from the date such Lender, such Issuing Bank or such Agent
(as the case may be) makes written demand therefor. Nothing herein shall
preclude the right of the Borrower to contest any such Taxes or Other Taxes so
paid, and each Lender, each Issuing Bank and each Agent in question (as the case
may be) will, following notice from, and at the expense of, the Borrower,
reasonably cooperate with the Borrower to preserve the Borrower's rights to
contest such Taxes or Other Taxes.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Administrative Agent, at its address referred to in
Section 11.02, the original or a certified copy of a receipt evidencing payment
thereof.
(e) Each Bank represents and warrants that either (i) it is
organized under the laws of a jurisdiction within the United States or (ii) it
has delivered to the Borrower or the Administrative Agent duly completed copies
of such form or forms prescribed by the United States Internal Revenue Service
indicating that such Bank is entitled to receive payments without deduction or
withholding of any United States federal income taxes, as permitted by the
Internal Revenue Code or any tax treaty to which the United States is a party.
Each other Lender agrees that, on or prior to the date upon which it shall
become a party hereto, and upon the reasonable request from time to time of the
Borrower or the Administrative Agent, such Lender will deliver to the Borrower
and the Administrative Agent (to the extent that it is not prohibited by law
from doing so) either (A) a statement that it is organized under the laws of a
jurisdiction within the United States or (B) duly completed copies of such form
or forms as may from time to time be prescribed by the United States Internal
Revenue Service, indicating that such Lender is entitled to receive payments
without deduction or withholding of any United States federal income taxes, as
permitted by the Internal Revenue Code. Each Bank that has delivered, and each
other Lender that hereafter delivers, to the Borrower and the Administrative
Agent the form or forms referred to in the two preceding sentences further
undertakes to deliver to the Borrower and the Administrative Agent, to the
extent that it is not prohibited by law from doing so, further copies of such
form or forms, or successor applicable form or forms, as the case may be, as and
when any previous form filed by it hereunder shall expire or shall become
incomplete or inaccurate in any respect. Each Lender represents and warrants
that each such form supplied by it to the Administrative Agent and the Borrower
pursuant to this subsection (e), and not superseded by another form supplied by
it, is or will be, as the case may be, complete and accurate, and such Lender
acknowledges and agrees that nothing contained herein shall in any way limit,
waive, or otherwise reduce any claim that the Administrative Agent or the
Borrower may have against such Lender in the event that any such form shall not
be complete and accurate. Notwithstanding anything in this Section 5.06 to the
contrary, the Borrower shall not be required to indemnify any Foreign Lender or
pay any additional amounts to any Foreign Lender under this Section 5.06 to the
extent that the obligation to indemnify such Foreign Lender or pay such
additional amounts would not have arisen but for the failure by such Foreign
Lender to comply with applicable certification, information or other
documentation requirements concerning the nationality, residency, identity or
connection with the United States of such Foreign Lender if such compliance is
required by statute or regulation of the United States as a precondition to
relief or exemption from such amounts payable under, or for which
indemnification is given pursuant to, this Section 5.06; provided, that the
Borrower shall be required to indemnify each Foreign
52
48
Lender to the extent that (1) any such payment or indemnification is
attributable to an enactment, promulgation or any change in or interpretation of
any applicable law occurring after the date hereof and (2) such deductions,
withholding, payments or liabilities accrue after the date on which such Foreign
Lender timely furnishes to the Borrower all forms required to be furnished by
this Section 5.06(e) with respect to such enactment, promulgation or any change
in or interpretation of any applicable law.
(f) Any Lender claiming any additional amounts payable pursuant to
this Section 5.06 shall use all reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Applicable Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
(g) Without prejudice to the survival of any other agreement of
the Borrower expressly provided for hereunder, the agreements and obligations of
the Borrower and each Lender contained in this Section 5.06 shall survive the
repayment of all other amounts owing to the Lenders, the Administrative Agent
and the Issuing Banks under the Loan Documents and the termination of the
Commitments. If and to the extent that the obligations of the Borrower under
this Section 5.06 are unenforceable for any reason, the Borrower agrees to make
the maximum contribution to the payment and satisfaction thereof which is
permissible under applicable law.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. CONDITIONS PRECEDENT TO COMMITMENT CLOSING. The
Commitments of the Lenders to make, or to participate in, as the case may be,
Extensions of Credit under Articles III and IV shall not become effective until
the following conditions precedent shall have been fulfilled:
(a) The Administrative Agent shall have received, on or before the
Commitment Closing Date, the following, each dated such day, in form and
substance satisfactory to each Lender (except where otherwise specified below)
and (except for any Promissory Notes) in sufficient copies for each Lender:
(i) This Agreement, duly executed by the
Borrower, each Bank and the Agents.
(ii) The Fee Letter, duly executed by the
Borrower, in form and substance satisfactory to the
Administrative Agent.
(iii) Certified copies of the resolutions of the
Board of Directors of the Borrower authorizing the Borrower to
enter into this Agreement and each of the other Loan Documents
to which it is, or is to be, a party, and of all documents
evidencing other necessary corporate action and Governmental
Approvals, if any, with respect to such Loan Documents.
53
49
(iv) A certificate of the Secretary or an
Assistant Secretary of the Borrower certifying the names, true
signatures and incumbency of the officers of the Borrower
authorized to sign this Agreement and the other Loan Documents
to which it is, or is to be, a party, and the other documents
to be delivered hereunder and thereunder.
(v) Copies of the Certificate of Incorporation
(or comparable charter document) and by-laws of the Borrower,
together with all amendments thereto, certified by the
Secretary or an Assistant Secretary of the Borrower.
(vi) Certificate of the Secretary of State of the
State of Delaware certifying that the Borrower is a
corporation in good standing in such State.
(vii) The Promissory Notes (if requested by any
Lender pursuant to Section 3.01(d)), duly executed by the
Borrower.
(viii) Favorable opinions of:
(A) Thelen Reid & Priest LLP, special
New York counsel to the Borrower, in substantially
the form of Exhibit C;
(B) Kirkland & Ellis, special energy
regulatory counsel to the Borrower, in substantially
the form of Exhibit D; and
(C) Hughes Hubbard & Reed LLP, counsel
to the Administrative Agent, in substantially the
form of Exhibit E.
(ix) A refinancing plan with respect to the Debt
of the Borrower's Subsidiaries (the "REFINANCING PLAN"), in
form and substance satisfactory to the Administrative Agent
and the Lenders.
(x) A schedule of the Borrower's five-year
projected cash flows, in form and substance satisfactory to
the Administrative Agent and the Lenders.
(xi) Certificate of a Senior Financial Officer of
the Borrower, certifying that (i) attached thereto is a true,
correct and complete copy of the Senior Note Indenture, (ii)
the sale of the Senior Notes has been consummated pursuant to
the terms of the Senior Note Indenture, (iii) the Senior Note
Indenture contains terms and conditions substantially similar
to those set forth in the draft dated 2/15/00 of the Offering
Circular, (iv) the Senior Notes have been rated at least B+ by
S&P and Ba3 by Moody's, and (v) the Applicable Margin for
Eurodollar Rate Loans that would have been in effect on the
date of issuance of the Senior Notes was not more than 100
basis points less than the excess of (A) the yield to maturity
of the Senior Notes over (B) the yield on 10-year U.S.
Treasury securities on such date. The statements contained in
the foregoing clauses (iii) and (v) shall, in the good faith
determination of the Administrative Agent, be true and
correct.
54
50
(xii) Certificate of the Secretary or an Assistant
Secretary of the Borrower certifying that attached thereto are
true, correct and complete copies of the Orion Power New York
Credit Facility and the Orion Power MidWest Credit Facility.
(xiii) Such other approvals, opinions and documents
as any Lender, through the Administrative Agent, may
reasonably request.
(b) The following statements shall be true and the Administrative
Agent shall have received a certificate of a Senior Financial Officer of the
Borrower, dated the Commitment Closing Date and in sufficient copies for each
Lender, stating that:
(i) the representations and warranties set forth
in Section 7.01 of this Agreement are true and correct on and
as of the Commitment Closing Date as though made on and as of
such date, and
(ii) no event has occurred and is continuing that
constitutes an Unmatured Default or an Event of Default.
(c) The Borrower shall have paid all fees under or referenced in
Section 2.02 and all expenses referenced in Section 11.04(a), in each case to
the extent then due and payable.
(d) Any Governmental Approvals shall have been obtained and be in
full force and effect. Any third party approvals necessary or, in the judgment
of the Administrative Agent, advisable in connection with the Loan Documents and
the transactions contemplated thereby shall have been obtained and be in full
force and effect (including the consent of the "Required Lenders" under the
Orion Power New York Credit Facility). All such Governmental Approvals and third
party approvals, if any, shall be in form and substance satisfactory to the
Administrative Agent and the Lenders.
(e) Since December 31, 1999, in the judgment of the Administrative
Agent, there shall have been no Material Adverse Change.
SECTION 6.02. CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT.
The obligation of each Lender to make its initial Extension of Credit is subject
to the fulfillment of the following conditions precedent:
(a) The conditions set forth in Section 6.01 shall have been
fulfilled as of the Commitment Closing Date to the satisfaction of the
Administrative Agent and the Lenders, and the conditions set forth in Section
6.01(c), (d) and (e) shall continue to be fulfilled as of the date of the
initial Extension of Credit.
(b) The following statements shall be true and the Administrative
Agent shall have received a certificate of a Senior Financial Officer of the
Borrower, dated the Financial Closing Date and in sufficient copies for each
Lender, stating that:
55
51
(i) the representations and warranties set forth in
Section 7.01 of this Agreement are true and correct on and as of the
Financial Closing Date as though made on and as of such date, and
(ii) no event has occurred and is continuing that
constitutes an Unmatured Default or an Event of Default.
(c) The following statement shall be true and the Administrative
Agent shall have received a certificate of a Senior Financial Officer of the
Borrower, dated the Financial Closing Date and in sufficient copies for each
Lender, certifying that: the shareholders' equity of the Borrower as of such
date, as determined in accordance with GAAP, is at least $725,000,000.
SECTION 6.03. CONDITIONS PRECEDENT TO EACH EXTENSION OF CREDIT. The
obligation of each Lender or any Issuing Bank, as the case may be, to make an
Extension of Credit (including the initial Extension of Credit) shall be subject
to the further conditions precedent that, on the date of such Extension of
Credit and after giving effect thereto:
(a) The following statements shall be true (and each of the giving
of the applicable notice or request with respect thereto and the making of such
Extension of Credit shall constitute a representation and warranty by the
Borrower that, on the date of such Extension of Credit, such statements are
true):
(i) the representations and warranties contained
in Section 7.01 of this Agreement are true and correct in all
material respects on and as of the date of such Extension of
Credit, before and after giving effect to such Extension of
Credit and to the application of the proceeds thereof, as
though made on and as of such date;
(ii) no Unmatured Default or Event of Default has
occurred and is continuing, or would result from such
Extension of Credit or the application of the proceeds
thereof; and
(iii) no Material Subsidiary Event of Default has
occurred and is continuing.
(b) The Administrative Agent shall have received such other
approvals, opinions and documents as any Lender or Issuing Bank, through the
Administrative Agent, may reasonably request, and such approvals, opinions and
documents shall be in form and substance satisfactory to the Administrative
Agent.
SECTION 6.04. DETERMINATIONS UNDER SECTIONS 6.01 AND 6.02. For purposes
of determining compliance with the conditions specified in Sections 6.01 and
6.02, each Lender shall be deemed to have consented to, approved or accepted or
to be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lenders unless
an officer of the Administrative Agent responsible for the transactions
contemplated by this Agreement shall have received written notice from such
Lender
56
52
prior to the Commitment Closing Date (in the case of Section 6.01) or prior to
the date of the initial Extension of Credit (in the case of Section 6.02)
specifying its objection thereto.
SECTION 6.05. RELIANCE ON CERTIFICATES. The Lenders, the Issuing Banks
and each Agent shall be entitled to rely conclusively upon the certificates
delivered from time to time by officers of the Borrower as to the names,
incumbency, authority and signatures of the respective individuals named therein
until such time as the Administrative Agent may receive a replacement
certificate, in form acceptable to the Administrative Agent, from an officer of
such Person identified to the Administrative Agent as having authority to
deliver such certificate, setting forth the names and true signatures of the
officers and other representatives of such Person thereafter authorized to act
on behalf of such Person.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:
(a) The Borrower and each of its Subsidiaries is an entity duly
organized, validly existing and in good standing under the laws of the state of
its formation and is duly qualified to do business in, and is in good standing
in, all other jurisdictions where the nature of its business or the nature of
property owned or used by it makes such qualification necessary (except where
the failure to so qualify would not have a Material Adverse Effect).
(b) The execution, delivery and performance by the Borrower of
this Agreement and the other Loan Documents to which it is or will be a party
are within the Borrower's corporate powers, have been duly authorized by all
necessary corporate action, and do not and will not contravene (i) the
Borrower's certificate of incorporation or by-laws, (ii) any applicable law,
(iii) any legal or contractual restriction binding on or affecting the Borrower
(including the Senior Note Indenture) or (iv) any material legal restriction or
material contractual restriction binding on or affecting any Subsidiary of the
Borrower (including the Orion Power MidWest Credit Facility and the Orion Power
New York Credit Facility); and such execution, delivery and performance do not
and will not result in or require the creation of any Lien upon or with respect
to any of its properties. Each of the Loan Documents to which the Borrower is a
party has been duly executed and delivered by the Borrower.
(c) No Governmental Approval is required.
(d) This Agreement is, and each other Loan Document to which the
Borrower will be a party when executed and delivered hereunder will be, legal,
valid and binding obligations of the Borrower enforceable against the Borrower
in accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
57
53
(e) None of the written financial or other information relating to
the Borrower or any of its Subsidiaries and provided by the Borrower to any
Agent and/or the Lenders (including the Offering Circular) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements contained therein not misleading in light of the circumstances under
which they were made; provided, that no representation or warranty is made with
respect to (i) any projections or forward-looking statements provided by the
Borrower (except as provided in Section 7.01(j)) and (ii) general financial
market information.
(f) (i) The audited consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as at December 31, 1999, and the related audited
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Consolidated Subsidiaries for the fiscal year then ended,
certified by Arthur Andersen LLP, independent public accountants, copies of each
of which have been furnished to each Lender, fairly present the consolidated
financial condition of the Borrower and its Consolidated Subsidiaries as at such
date and the consolidated results of operations of the Borrower and its
Consolidated Subsidiaries for the Fiscal Year ended on such date, all in
accordance with generally accepted accounting principles consistently applied;
(ii) since December 31, 1999, there has been no Material Adverse Change; and
(iii) the Borrower has no material liabilities or obligations except as
reflected in the foregoing financial statements, as evidenced by the Loan
Documents, the Senior Notes, any Project Contract (as defined in the Orion Power
MidWest Credit Facility or the Orion Power New York Credit Facility) to which
the Borrower is a party, and any other liability or obligation as may be
incurred in accordance with this Agreement, the Senior Notes, the Orion Power
MidWest Credit Facility, the Orion Power New York Credit Facility and any other
agreement or instrument evidencing Permitted Subsidiary Debt or in the ordinary
course of the Borrower's business as of the relevant date of determination.
(g) There is no pending or, to the knowledge of the Borrower,
threatened action, suit, investigation, litigation or proceeding affecting the
Borrower or any of its Subsidiaries or any of their respective properties before
any court, governmental agency or arbitrator, that (i) could reasonably be
expected to have a Material Adverse Effect or (ii) purports to affect the
legality, validity or enforceability of this Agreement or any other Loan
Document to which the Borrower is or is to be a party.
(h) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan of the Borrower or any of its ERISA Affiliates that
could reasonably be expected to have a Material Adverse Effect. Schedule B
(Actuarial Information) to the most recent annual report (Form 5500 Series) for
each Plan of the Borrower or any of its ERISA Affiliates, copies of which have
been filed with the Internal Revenue Service, is complete and accurate and
fairly presents the funding status of such Plan. Since the date of such Schedule
B there has been no material adverse change in such funding status and no
"prohibited transaction" (as defined in Section 4975 of the Internal Revenue
Code or Section 406 of ERISA) has occurred with respect thereto which is
reasonably expected to result in any liability to the Borrower that could
reasonably be expected to have a Material Adverse Effect. Neither the Borrower
nor any of its ERISA Affiliates has been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization or has been
terminated, within the meaning of Title IV of ERISA, and no such Multiemployer
Plan is reasonably expected to be in reorganization or to
58
54
be terminated, within the meaning of Title IV of ERISA. The Borrower and its
Subsidiaries have no liability with respect to "expected post retirement benefit
obligations" within the meaning of Statement of Financial Accounting Standards
No. 106 that could reasonably be expected to have a Material Adverse Effect.
Each Plan and any related trust intended to qualify under Internal Revenue Code
Section 401 or 501 are so qualified (except where the failure to so qualify
would not have a Material Adverse Effect). There are no pending or, to the
Borrower's knowledge, threatened claims, actions or proceedings (other than
claims for benefits in the normal course) relating to any Plan other than those
that in the aggregate, if adversely determined, would not have a Material
Adverse Effect.
(i) The Borrower and its Subsidiaries have filed all tax returns
(Federal, state and local) required to be filed and paid all taxes shown thereon
to be due, including interest and penalties, or, to the extent the Borrower or
any of its Subsidiaries is contesting in good faith an assertion of liability
based on such returns, has provided adequate reserves for payment thereof in
accordance with GAAP.
(j) All financial projections of the Borrower and its Subsidiaries
previously furnished by or on behalf of the Borrower to the Administrative Agent
and the Banks are based upon assumptions that the Borrower believed were
reasonable at the time such projections were delivered and continues to believe
are reasonable, and such projections represent the Borrower's good faith
estimate of future performance by the Borrower and its Subsidiaries; provided,
that each of the Administrative Agent and the Banks acknowledge and agree that
such projections may or may not prove to be correct and that no representation
or warranty is made as to whether such projections will reflect actual
performance.
(k) Following application of the proceeds of each Extension of
Credit, not more than 25 percent of the value of the assets of the Borrower and
its Subsidiaries on a consolidated basis will be margin stock (within the
meaning of Regulation U issued by the Board).
(l) The Borrower is not engaged in the business of extending
credit for the purpose of buying or carrying margin stock (within the meaning of
Regulation U issued by the Board), and no proceeds of any Loan or any drawing
under any Letter of Credit will be used to buy or carry any margin stock or to
extend credit to others for the purpose of buying or carrying any margin stock.
(m) Neither the Borrower nor any of its Subsidiaries is, or after
the making of any Extension of Credit or the application of the proceeds or
repayment thereof, or the consummation of any of the other transactions
contemplated hereby, will be, an "investment company", or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company"
(within the meaning of the Investment Company Act of 1940, as amended).
(n) No proceeds of any Extension of Credit or any drawing under
any Letter of Credit will be used to acquire any equity security of a class that
is registered pursuant to Section 12 of the Exchange Act.
59
55
(o) Neither the Borrower nor any of its Subsidiaries is (i) a
"holding company", (ii) a "public-utility company", (iii) a "subsidiary company"
of a "holding company", or (iv) an "affiliate" of any of the foregoing, in each
case as such terms are defined under PUHCA.
(p) The operations and properties of the Borrower and each of its
Subsidiaries comply in all material respects with all applicable laws (including
ERISA and Environmental Laws), all past non-compliance (if any) with
Environmental Laws has been resolved without ongoing obligations or costs that
could reasonably be expected to have a Material Adverse Effect, and no
circumstances exist that could reasonably be expected to (i) form the basis of
any Environmental Liability that could reasonably be expected to have a Material
Adverse Effect or (ii) cause any properties of the Borrower or any of its
Subsidiaries to be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law that could reasonably be expected to
have a Material Adverse Effect.
(q) (i) The fair saleable value of the Borrower's assets will
exceed the amount that will be required to be paid on or in respect of the
probable liability on its existing debts and other liabilities (including
contingent liabilities) as they mature; (ii) the Borrower's assets do not
constitute unreasonably small capital to carry out its business as now conducted
or as proposed to be conducted; (iii) the Borrower does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be received by it and the amounts to be
payable on or in respect of its obligations); and (iv) the Borrower does not
believe that final judgments against it in actions for money damages presently
pending will be rendered at a time when, or in an amount such that, it will be
unable to satisfy any such judgments promptly in accordance with their terms
(taking into account the maximum reasonable amount of such judgments in any such
actions and the earliest reasonable time at which such judgments might be
rendered). The Borrower's cash flow, after taking into account all other
anticipated uses of its cash (including the payments on or in respect of debt
referred to in clause (iii) above), will at all times be sufficient to pay all
such judgments promptly in accordance with their terms.
(r) Neither the Borrower nor any of its Subsidiaries has
experienced or anticipates that it will experience any Year 2000 Issues that
could reasonably be expected to have a Material Adverse Effect.
(s) The Borrower is not in default in the payment of (or in the
performance of any obligation applicable to) any Debt, or in violation of any
law or governmental regulation or court decree or order in any respect, which,
in any such case, could reasonably be expected to have a Material Adverse
Effect, and no Material Subsidiary Event of Default has occurred and is
continuing.
(t) The Borrower and each of its Subsidiaries has good and
insurable title to all of its properties and assets, real and personal, tangible
and intangible, of any nature whatsoever (including patents, trademarks, trade
names, service marks and copyrights), free and clear of all Liens, charges or
claims (including infringement claims with respect to patents, trademarks,
copyrights and the like), other than Permitted Liens. The Borrower and each of
its Subsidiaries has complied in all respects with all obligations under all
leases to which it is a party and all such leases
60
56
are in full force and effect, except, respectively, where a failure to comply or
to be in full force and effect could not reasonably be expected to have a
Material Adverse Effect. Each of the Borrower and its Subsidiaries enjoys
peaceful and undisturbed possession under all leases to which it is a party,
except for such leases the failure of which to be in full force and effect could
not reasonably be expected to have a Material Adverse Effect.
(u) As of the date hereof, the authorized capital stock or the
other equity interests in the Borrower and its Subsidiaries, including the
holders thereof, is set forth in Schedule II.
ARTICLE VIII
COVENANTS OF THE BORROWER
SECTION 8.01. AFFIRMATIVE COVENANTS. So long as any Loan or any other
amount payable hereunder or under any Promissory Note shall remain unpaid, any
Letter of Credit shall remain outstanding or any Lender shall have any
Commitment, the Borrower will, unless the Majority Lenders shall otherwise
consent in writing:
(a) Payment of Taxes, Etc. Pay and discharge, and cause each of
its Subsidiaries to pay and discharge, before the same shall become delinquent,
all taxes, assessments and governmental charges, royalties or levies imposed
upon it or upon its property and all of its other material obligations and
liabilities, except, in the case of taxes, to the extent the Borrower or such
Subsidiary, as the case may be, is contesting the same in good faith and by
appropriate proceedings and has set aside (i) adequate reserves for the payment
thereof in accordance with GAAP or (ii) in the case of Orion Power New York,
Orion Power MidWest or any other Subsidiary of the Borrower, reserves required
under the Orion Power New York Credit Facility, the Orion Power MidWest Credit
Facility or any other agreement or instrument evidencing Permitted Subsidiary
Debt to which such other Subsidiary is a party, respectively.
(b) Maintenance of Insurance. Maintain, or cause to be maintained,
insurance covering the Borrower and each of its Subsidiaries and their
respective properties in effect at all times in such amounts and covering such
risks as is usually carried by companies of a similar size, engaged in similar
businesses and owning similar properties in the same general geographical area
in which the Borrower and each such Subsidiary operates, either with reputable
insurance companies or, in whole or in part, by establishing reserves of one or
more insurance funds, either alone or with other corporations or associations;
provided, that any Subsidiary of the Borrower shall be deemed to be in
compliance with this subsection (b) if such Subsidiary is in compliance with all
insurance covenants and requirements contained in any credit facility to which
it is a party (including, in the case of Orion Power MidWest and Orion Power New
York, the insurance covenants contained in the Orion Power MidWest Credit
Facility and the Orion Power New York Credit Facility, respectively).
(c) Preservation of Existence, Rights, Etc. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its existence
(corporate, partnership or otherwise), material rights (statutory and otherwise)
and franchises, and take such other action as may be necessary or advisable to
preserve and maintain its right to conduct its business in the states where it
shall be conducting its business; provided, however, that neither the Borrower
nor any of
61
57
its Subsidiaries shall be required to preserve and maintain any such right or
franchise, and no such Subsidiary shall be required to preserve and maintain its
corporate existence or its right to conduct business in any such state, unless
the failure to do so could reasonably be expected to have a Material Adverse
Effect.
(d) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority, including Environmental
Laws, ERISA, and any such laws, rules, regulations and orders relating to
zoning, land use, construction and building restrictions, and employee safety
and health matters relating to business operations, the non-compliance with
which, in any of such cases or in the aggregate, could reasonably be expected to
have a Material Adverse Effect, except when any such law, rule, regulation or
order is being contested pursuant to settlement negotiations or other
proceedings pursuant to the applicable provisions of the Orion Power MidWest
Credit Facility, the Orion Power New York Credit Facility or any other credit
facility to which any Subsidiary is a party.
(e) Inspection Rights. At any reasonable time and from time to
time upon reasonable notice, permit or arrange for the Administrative Agent,
each of the Issuing Banks, each of the Lenders, and their respective agents and
representatives to examine and make copies of and abstracts from the records and
books of account of, and the properties of, the Borrower and each of its
Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower
and its Subsidiaries with the Borrower and its Subsidiaries and their respective
officers, directors and accountants, subject to the Borrower's and such
Subsidiaries' reasonable rules and procedures regarding operation, safety and
confidentiality.
(f) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper records and books of account, in which full and correct entries
shall be made of all financial transactions of the Borrower and its Subsidiaries
and the assets and business of the Borrower and its Subsidiaries, in accordance
with GAAP.
(g) Maintenance of Properties, Etc. Maintain, and cause each of
its Subsidiaries to maintain, good and insurable title to all of its properties
which are used or useful in the conduct of its business, and preserve, maintain,
develop, and operate in substantial conformity with all laws and material
contractual obligations, all of its properties which are used or useful in the
conduct of its business in good working order and condition, ordinary wear and
tear excepted, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
(h) Further Assurances. At the expense of the Borrower, promptly
execute and deliver, or cause to be promptly executed and delivered, all further
instruments and documents, and take and cause to be taken all further actions,
that may be necessary or that the Majority Lenders or any Issuing Bank through
the Administrative Agent may reasonably request to enable the Lenders, the
Issuing Banks and the Administrative Agent to enforce the terms and provisions
of this Agreement and to exercise their rights and remedies hereunder or under
any other Loan Document. In addition, the Borrower will use all reasonable
efforts to duly obtain Governmental
62
58
Approvals required from time to time on or prior to such date as the same may
become legally required, and thereafter to maintain all such Governmental
Approvals in full force and effect.
(i) Use of Proceeds. Use all Extensions of Credit only for working
capital and other general corporate purposes of the Borrower.
(j) Refinancing Plan. Use all reasonable efforts to pursue and
consummate the Refinancing Plan.
(k) Maintain Ownership of Subsidiaries. Maintain record and
beneficial ownership, directly or indirectly, of all of the Capital Stock of
Orion Power MidWest, Orion Power New York and each of its other Material
Subsidiaries, subject only to any pledges of equity interests in connection with
the Orion Power MidWest Credit Facility, the Orion Power New York Credit
Facility, and/or any other agreement or instrument evidencing Permitted
Subsidiary Debt and the rights of the pledgees under such pledges.
(l) Annual Reduction of Loans. For at least 10 consecutive days in
each Fiscal Year, reduce the outstanding principal amount of all Loans to $0.00
so that no Loans are outstanding at any time during such period.
(m) Payment of Dividends. Subject to Section 11.14, cause each of
its Subsidiaries to distribute to the Borrower the maximum amount of cash
dividends available to be distributed by such Subsidiary pursuant to applicable
law and any credit facility to which such Subsidiary is a party (taking into
account, without duplication, any cash reserves required to be established by
such Subsidiary pursuant to applicable law or GAAP), such dividends to be
distributed at the earliest possible date pursuant thereto.
(n) Consolidated Leverage Ratio. Maintain, as of the last day of
each Fiscal Quarter ending after the date hereof, for the immediately preceding
four-consecutive-Fiscal Quarter period ending on such day, a Consolidated
Leverage Ratio of not greater than (i) from the date hereof to and including
March 31, 2001, 6.0 to 1.0, (ii) from April 1, 2001 to and including March 31,
2002, 5.5 to 1.0, and (iii) from April 1, 2002 to the Termination Date, 5.0 to
1.0.
(o) Consolidated Interest Coverage Ratio. Maintain, as of the last
day of each Fiscal Quarter ending after the date hereof, for the immediately
preceding four-consecutive-Fiscal Quarter period ending on such day, a
Consolidated Interest Coverage Ratio of at least 1.75 to 1.0.
(p) Consolidated Tangible Net Worth. Maintain at all times a
Consolidated Tangible Net Worth of at least $700,000,000.
(q) Borrower Debt Service Coverage Ratio. Maintain, as of the last
day of each Fiscal Quarter (commencing with the Fiscal Quarter ending March 31,
2001), for the immediately preceding four-Fiscal Quarter period ending on such
day, a Borrower Debt Service Coverage Ratio of at least 1.40 to 1.0.
(r) Net Disposition Proceeds. Cause each of its Subsidiaries to
distribute to the Borrower, on the first date that such Subsidiary is permitted
to do so pursuant to (i) any credit
63
59
facility to which it is a party and (ii) applicable law, the maximum amount of
Net Disposition Proceeds permitted to be distributed by such Subsidiary pursuant
to such credit facility and applicable law (less any portion of such Net
Disposition Proceeds that are utilized by such Subsidiary for cash reserves
required to be established by such Subsidiary pursuant to applicable law or
GAAP).
SECTION 8.02. NEGATIVE COVENANTS. So long as any Loan or any other
amount payable hereunder or under any Promissory Note shall remain unpaid, any
Letter of Credit shall remain outstanding or any Lender shall have any
Commitment, the Borrower shall not, without the written consent of the Majority
Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
lien, security interest, or other charge or encumbrance (including the lien or
retained security title of a conditional vendor) of any kind, or any other type
of arrangement intended to confer or having the effect of conferring upon a
creditor a preferential interest (any of the foregoing being referred to herein
as a "LIEN"), upon or with respect to any of its properties of any character
(including capital stock of any of the Borrower's Subsidiaries, and accounts),
whether now owned or hereafter acquired, or sign or file, or permit any of its
Subsidiaries to sign or file, under the Uniform Commercial Code of any
jurisdiction a financing statement which names the Borrower or any such
Subsidiary as debtor, sign, or permit any of its Subsidiaries to sign, any
security agreement authorizing any secured party thereunder to file such
financing statement, or assign, or permit any of its Subsidiaries to assign,
accounts, excluding, however, from the operation of the foregoing restrictions
any Liens created under the Loan Documents and the following (collectively,
"PERMITTED LIENS"):
(i) Liens for taxes, assessments or governmental charges
or levies to the extent not delinquent or that are diligently being
contested in good faith by appropriate proceedings and for which the
Borrower or such Subsidiary (as the case may be) has set aside adequate
reserves in accordance with GAAP;
(ii) cash pledges or deposits to secure (A) obligations
under workmen's compensation laws or similar legislation, or (B) public
or statutory obligations of the Borrower or any of its Subsidiaries;
(iii) Liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's, and repairmen's, warehousemen's and
carriers' Liens, Liens or privileges of any employees for salary or
wages earned, and other similar Liens arising in the ordinary course of
business securing obligations that are not delinquent or that have been
fully bonded or are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves have been set
aside in accordance with GAAP;
(iv) Liens in respect of judgments or awards with respect
to which the Borrower or any of its Subsidiaries shall (A) in good
faith be prosecuting an appeal or other proceeding for review and with
respect to which the Borrower or such Subsidiary (as the case may be)
shall have secured a stay of execution pending such appeal or other
proceeding and for which the Borrower or such Subsidiary (as the case
may be) has set
64
60
aside adequate reserves in accordance with GAAP, or (B) have the right
to prosecute an appeal or other proceeding for review and for which the
Borrower or such Subsidiary (as the case may be) has set aside adequate
reserves in accordance with GAAP;
(v) (A) purchase money Liens or purchase money security
interests upon or in property acquired or held by the Borrower or any
of its Subsidiaries in the ordinary course of business to secure the
purchase price of such property or to secure indebtedness incurred
solely for the purpose of financing the acquisition of any such
property to be subject to such Liens or security interests (whether or
not such financing is provided by the seller of such property), or
Liens or security interests existing on any such property at the time
of acquisition, or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount, provided that no such Lien
or security interest shall extend to or cover any property other than
the property being acquired and no such extension, renewal or
replacement shall extend to or cover property not theretofore subject
to the Lien or security interest being extended, renewed or replaced;
and (B) any Liens created by leases of personal or real property,
conditional sale or other title retention agreements or arrangements,
or similar financing arrangements, provided that no such Lien created
by any such lease, agreement or arrangement shall extend to or cover
any property other than the property subject to such lease, agreement
or arrangement, respectively; and provided, further, that (1) the
aggregate principal amount of obligations of the Borrower at any one
time outstanding secured by Liens permitted by this clause (v) shall
not exceed $5,000,000, and the aggregate principal amount of
obligations of any Subsidiary of the Borrower at any one time
outstanding secured by Liens permitted by this clause (v) shall not
exceed the aggregate principal amount of purchase money Debt permitted
to be incurred by such Subsidiary pursuant to (x) in the case of Orion
Power New York, the Orion Power New York Credit Facility (as in effect
on the date hereof), (y) in the case of Orion Power MidWest, the Orion
Power MidWest Credit Facility (as in effect on the date hereof) and (z)
in the case of any other Subsidiary of the Borrower, the agreement or
instrument evidencing Permitted Subsidiary Debt to which such
Subsidiary is a party (as in effect on the date of such agreement or
instrument), and (2) for the avoidance of doubt, this clause (v) shall
not be deemed to apply to Debt described in Section 8.02(c)(iv).
(vi) Liens upon the assets and/or Capital Stock of any
Subsidiary of the Borrower securing Debt permitted under Section
8.02(c), and other Liens upon the assets of any such Subsidiary
permitted from time to time pursuant to the Orion Power MidWest Credit
Facility, the Orion Power New York Credit Facility or any other credit
facility to which such Subsidiary is a party (provided, that such other
credit facility constitutes Debt permitted under Section 8.02(c)); and
(vii) zoning restrictions, easements, licenses, covenants,
reservations, utility company rights, restrictions on the use of real
property or minor irregularities of title incident thereto which do not
in the aggregate materially detract from the value of the property or
assets of the Borrower and its Subsidiaries, taken as a whole, or
materially impair the operation of their business, taken as a whole.
65
61
(b) Debt of the Borrower. Create, incur, assume or suffer to exist
any Debt other than:
(i) Debt hereunder and under the other Loan Documents;
(ii) Debt arising by reason of the endorsement of
negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business;
(iii) the Senior Notes;
(iv) Support Obligations in existence on the date hereof
and set forth on Schedule III;
(v) Support Obligations entered into by the Borrower
after the date hereof in the ordinary course of business in connection
with (A) the ownership, operation (including, without limitation, sales
and marketing of energy products), development, expansion and/or
maintenance of Portfolio Assets (as such term is defined in the Orion
Power MidWest Credit Facility and the Orion Power New York Credit
Facility) or (B) subject to Section 8.02(e), the acquisition,
ownership, operation and/or maintenance of other power generating
facilities and related assets owned by any Subsidiary of the Borrower;
(vi) Investment Commitments of the Borrower permitted
under Section 8.02(e);
(vii) Debt secured by any Lien permitted under Section
8.02(a)(v) in an aggregate principal amount at any one time outstanding
not to exceed $5,000,000; and
(viii) other unsecured Debt in an aggregate principal amount
at any one time outstanding not to exceed $5,000,000; provided, that
(A) the Debt of the Borrower hereunder and under the other Loan
Documents shall, at all times, rank pari passu or senior, in right of
payment and security (including the benefit of any guarantees), with
such other Debt and (B) none of the covenants, events of default,
representations and warranties, or other terms and conditions contained
in the agreements and/or instruments evidencing such other Debt shall
be more restrictive to the Borrower than the covenants, events of
default, representations and warranties, and other terms and conditions
contained herein.
(c) Subsidiary Debt. Permit any of its Subsidiaries to create,
incur, assume or suffer to exist any Debt other than:
(i) in the case of Orion Power New York, Debt under the
Orion Power New York Credit Facility in an aggregate principal amount
at any one time outstanding not to exceed $803,000,000;
66
62
(ii) in the case of Orion Power MidWest, Debt under the
Orion Power MidWest Credit Facility in an aggregate principal amount at
any one time outstanding not to exceed $1,320,000,000;
(iii) Debt to be used solely to finance Capitalized Lease
Obligations, the acquisition or development of real property, plant or
equipment (or the acquisition of the Capital Stock of a Person that
owns such real property, plant or equipment), and other Capital
Expenditures, in an aggregate principal amount at any one time
outstanding not to exceed 7.50% of the Borrower's Consolidated Tangible
Assets;
(iv) additional Debt to be used solely to finance the
acquisition, construction, development, expansion, improvement or
re-powering of power generating assets (including the acquisition of
any Person that owns such assets) (any such acquisition, construction,
expansion, improvement or re-powering being referred to herein as a
"PERMITTED SUBSIDIARY INVESTMENT"), provided, that (A) after giving
effect to such additional Debt and the application of the proceeds
thereof and such Permitted Subsidiary Investment, the Borrower will be
in compliance, on a pro forma basis through the Termination Date, with
the financial covenants set forth in Section 8.01(n), (o), (p) and (q),
and (B) the Borrower provides a reasonably detailed schedule to the
Administrative Agent (x) in the case of any such Debt that constitutes
an Investment Commitment (including any Investment Commitment in
respect of a Permitted Subsidiary Investment), within 15 days after the
date of such Investment Commitment, or (y) in the case of any other
such Debt (including any indebtedness for borrowed money), prior to
such Permitted Subsidiary Investment, in each case demonstrating such
compliance (which schedule shall be prepared in good faith based on
reasonable assumptions);
(v) Debt of any Subsidiary of the Borrower representing a
refinancing, replacement or refunding of any Debt incurred by such
Subsidiary pursuant to clause (iv) above; provided that the aggregate
principal amount of such Debt outstanding or available will not be
increased at the time of such refinancing, replacement or refunding to
an amount in excess of 110% of the original principal amount of such
Debt (including both amounts outstanding and available) being
refinanced, replaced or refunded;
(vi) Debt of any Subsidiary of the Borrower representing a
refinancing, replacement or refunding in a single transaction of the
Debt permitted by clauses (i), (ii) and/or (iv) above; provided that
the aggregate principal amount of such Debt outstanding or available
will not be increased at the time of such refinancing, replacement or
refunding to an amount in excess of 110% of the original principal
amount of such Debt (including both amounts outstanding and available)
being refinanced, replaced or refunded (which original principal
amount, in the case of clause (i) above, is $730,000,000 and, in the
case of clause (ii) above, is $1,200,000,000); and
(vii) any other Debt permitted to be incurred by such
Subsidiary pursuant to (A) in the case of Orion Power New York, the
Orion Power New York Credit Facility (as in effect on the date hereof),
(B) in the case of Orion Power MidWest, the Orion Power MidWest Credit
Facility (as in effect on the date hereof), and (C) in the case of any
other
67
63
Subsidiary of the Borrower, the agreement or instrument evidencing any
Permitted Subsidiary Debt to which it is a party (as in effect on the
date of such agreement or instrument);
provided, however, that in connection with (1) any refinancing, refunding or
replacement of the Orion Power MidWest Credit Facility and/or the Orion Power
New York Credit Facility and (2) the incurrence of any Debt referred to in
clause (iii), (iv), (v) or (vi) above (the Debt described in the foregoing
clauses (1) and (2) being referred to herein as "PERMITTED SUBSIDIARY DEBT"),
the Borrower shall certify to the Administrative Agent and the Lenders on or
prior to (or, with respect to any Investment Commitment permitted under clause
(iv) above, within 15 days after) the date thereof that (A) the financial
maintenance covenants and the covenants restricting the payment of dividends and
other distributions to the Borrower or any of its Subsidiaries contained in the
documents evidencing such Permitted Subsidiary Debt are not more restrictive in
any material respect to the borrower thereunder than the corresponding covenants
contained in the Orion Power MidWest Credit Facility (as in effect on the date
hereof) and the Orion Power New York Credit Facility (as in effect on the date
hereof) are to Orion Power MidWest and Orion Power New York, respectively
(except to the extent that any such covenants restricting the payment of
dividends and other distributions are more restrictive solely as the result of
any amendments to such covenants permitted by the proviso contained in Section
8.02(g)), and (B) any encumbrances or restrictions on the ability of any
Subsidiary of the Borrower to (w) pay dividends or make any other Distributions
to the Borrower or any of its Subsidiaries, (x) pay any indebtedness owed to the
Borrower or any of its Subsidiaries, (y) make loans or advances to the Borrower
or any of its Subsidiaries, or (z) transfer any of its properties or assets to
the Borrower or any of its Subsidiaries, in each case contained in the documents
evidencing such Permitted Subsidiary Debt, are permitted pursuant to Section
4.08 of the Senior Note Indenture (as in effect on the date hereof).
(d) Investments in Other Persons. Make, or permit any of its
Subsidiaries to make, any loan or advance to any Person or purchase or otherwise
acquire any Capital Stock, obligations or other securities of, make any capital
contribution to, or otherwise invest in, any Person, other than (i) Permitted
Subsidiary Investments, (ii) Permitted Investments, (iii) in the case of Orion
Power MidWest, Orion Power New York and any other Subsidiary of the Borrower,
any such loans, advances, purchases, capital contributions and other investments
expressly permitted under, or not otherwise prohibited by, the Orion Power
MidWest Credit Facility, the Orion Power New York Credit Facility, or any other
agreement or instrument evidencing Permitted Subsidiary Debt to which such other
Subsidiary is a party, respectively, (iv) loans, advances and capital
contributions by the Borrower to any of its Subsidiaries funded solely with the
proceeds of (A) Net Securities Proceeds (but only to the extent that such Net
Securities Proceeds are not required to be applied as a mandatory prepayment of
the Loans pursuant to Section 5.03(b)) and/or (B) capital contributions received
by the Borrower from any of its shareholders, and (v) other loans, advances and
capital contributions by the Borrower to any of its Subsidiaries, provided,
however, that the Borrower may make any such loans, advances and capital
contributions to any of its Subsidiaries pursuant to this clause (v) only if (A)
on the date of such loan, advance or capital contribution (as the case may be),
no Unmatured Default or Event of Default has occurred or is continuing (other
than any Unmatured Default or Event of Default that the Borrower reasonably
believes would be cured by, among other actions, making
68
64
such loans, advances or capital contributions (as the case may be) to such
Subsidiary and by application of the proceeds thereof by such Subsidiary) or
would result from such loan, advance or capital contribution (as the case may
be) or the application of the proceeds thereof, (B) on the date of such loan,
advance or capital contribution (as the case may be), such Subsidiary is not
permitted to borrow funds under any revolving credit or working capital facility
to which it is a party (whether because a default exists thereunder, no
borrowing capacity exists thereunder, or otherwise), and (C) the Borrower (1)
certifies to the Administrative Agent on or prior to the date of such loan,
advance or capital contribution (as the case may be) that, after giving effect
thereto and the application of the proceeds thereof, the Borrower will be in
compliance, on a pro forma basis through the Termination Date, with the
financial covenants set forth in Section 8.01(n), (o), (p) and (q), and (2)
provides a reasonably detailed schedule to the Administrative Agent on or prior
to the date of such loan, advance or capital contribution (as the case may be)
supporting such certification (which schedule shall be prepared in good faith
based on reasonable assumptions).
(e) Investment Commitments. Make, or permit any of its
Subsidiaries to make, any Investment Commitments, other than Investment
Commitments in respect of any Permitted Subsidiary Investment, provided, that
(i) the Borrower certifies to the Administrative Agent within 15 days after the
date of such Investment Commitment that, after giving effect to such Permitted
Subsidiary Investment and any Debt to be incurred by any Subsidiaries of the
Borrower in connection therewith and the application of the proceeds thereof,
the Borrower will be in compliance, on a pro forma basis through the Termination
Date, with the financial covenants set forth in Section 8.01(n), (o), (p) and
(q), and (ii) the Borrower provides a reasonably detailed schedule to the
Administrative Agent within 15 days after the date of such Investment Commitment
supporting such certification (which schedule shall be prepared in good faith
based on reasonable assumptions).
(f) Restricted Payments. Declare or pay, directly or indirectly,
any dividend, payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any share of any class of Capital Stock
of the Borrower (other than stock splits and dividends payable solely in
nonconvertible equity securities of the Borrower), or purchase, redeem, retire,
or otherwise acquire for value any shares of any class of Capital Stock of the
Borrower or any warrants, rights, or options to acquire any such shares, now or
hereafter outstanding, or make any distribution of assets to any of its
shareholders (any such dividend, payment, distribution, purchase, redemption,
retirement or acquisition being hereinafter referred to as a "RESTRICTED
PAYMENT"), in each case unless (i) no Unmatured Default or Event of Default has
occurred and is continuing or would occur as a result of such Restricted Payment
and (ii) the restrictions on Distributions contained in the Orion Power New York
Credit Facility and the Orion Power MidWest Credit Facility have been
irrevocably terminated (so that no such restrictions exist thereunder).
(g) Negative Pledges, Restrictive Agreements, Etc. Enter into, or
permit any of its Subsidiaries to enter into, any agreement prohibiting (i) the
creation or assumption of any Lien upon its properties, revenues or assets,
whether now owned or hereafter acquired, (ii) the ability of the Borrower to
amend, supplement or otherwise modify this Agreement or any other Loan Document,
or (iii) the ability of any Subsidiary of the Borrower to make any payments,
directly
69
65
or indirectly, to the Borrower by way of dividends, advances, repayments of
loans or advances, reimbursements of management and other intercompany charges,
expenses and accruals or other returns on investments, or any other agreement or
arrangement which restricts the ability of any such Subsidiary to make any
payment, directly or indirectly, to the Borrower, in each case other than (A)
this Agreement and the other Loan Documents, (B) the Senior Note Indenture, and
(C) the Orion Power MidWest Credit Facility (as in effect on the date hereof),
the Orion Power New York Credit Facility (as in effect on the date hereof) and
any other agreement or instrument evidencing Permitted Subsidiary Debt (as in
effect on the date of such agreement or instrument); provided, however, that the
Borrower shall not permit any of its Subsidiaries to amend or otherwise modify,
directly or indirectly, the restrictions on the payment of dividends and other
distributions to the Borrower contained in the Orion Power MidWest Credit
Facility, the Orion Power New York Credit Facility or any other agreement or
instrument evidencing Permitted Subsidiary Debt, in any manner that would
further limit the ability of Orion Power MidWest, Orion Power New York or any
other Subsidiary of the Borrower to pay dividends or make other distributions to
the Borrower (except, with respect to Orion Power MidWest, Orion Power New York,
or any other such Subsidiary of the Borrower, upon the occurrence and during the
continuance of a payment default or a financial maintenance covenant default
under the Orion Power MidWest Credit Facility, the Orion Power New York Credit
Facility, or the credit facility to which such other Subsidiary is a party,
respectively).
(h) Lease Obligations. Create, incur, assume or suffer to exist
any obligations as lessee for the rental or hire of real or personal property of
any kind under leases or agreements to lease (other than leases that constitute
Debt) having an original term of one year or more which would cause the
aggregate scheduled liabilities of the Borrower in respect of all such
obligations payable in any period of 12 consecutive calendar months to exceed
$5,000,000.
(i) Sale/Leaseback Transactions. Enter into, or permit any of its
Subsidiaries to enter into, any arrangement with any Person whereby in a
substantially contemporaneous transaction the Borrower or any of its
Subsidiaries sells or transfers all or substantially all of its right, title and
interest in an asset and, in connection therewith, acquires or leases back the
right to use such asset, except in connection with (i) any refinancing permitted
under Section 8.02(c)(vi) or (ii) any financing of a Permitted Subsidiary
Investment permitted under Section 8.02(c)(iv).
(j) Management Fees. Pay, or permit any of its Subsidiaries to
pay, management, advisory, consulting or other similar fees, other than (i) fees
payable to the Lenders or any of their Affiliates, (ii) fees payable to
non-Affiliate consultants engaged on an arm's-length basis as approved by the
Board of Directors of the Borrower or such Subsidiary, as the case may be, and
(iii) pursuant to agreements in effect on the date hereof (or similar agreements
entered into after the date hereof, whether in respect of existing power
generating facilities of any such Subsidiary or power generating facilities
acquired by the Borrower or any such Subsidiary after the date hereof) that
relate to (A) the operations and maintenance of the assets of the Borrower
and/or its Subsidiaries, (B) power marketing activities of the Borrower and/or
its Subsidiaries, or (C) the management of fuel supply, transportation or
procurement of the Borrower and/or its Subsidiaries.
70
66
(k) Compliance with ERISA. (i) Permit to exist any "accumulated
funding deficiency" (as defined in Section 412(a) of the Internal Revenue Code)
(unless such deficiency exists with respect to a Multiple Employer Plan or
Multiemployer Plan and the Borrower has no control over the reduction or
elimination of such deficiency) that may result in any material liability to, or
any Lien against the properties of, the Borrower, (ii) terminate, or permit any
ERISA Affiliate of the Borrower to terminate, any Material Plan of the Borrower
or such ERISA Affiliate so as to result in any material (in the reasonable
opinion of the Majority Lenders) liability of the Borrower to the PBGC, or (iii)
permit to exist any occurrence of any Reportable Event (as defined in Title IV
of ERISA), or any other event or condition, which could reasonably be expected
to present a material risk of such a termination by the PBGC of any Plan of the
Borrower or such ERISA Affiliate and such a material liability to the Borrower.
(l) Transactions with Affiliates. Except in connection with the
operations and maintenance of the assets of the Borrower and/or its Subsidiaries
or in connection with power marketing activities of the Borrower and/or its
Subsidiaries, enter into, or cause, suffer or permit to exist, any arrangement
or contract with any of its Affiliates, or permit any of its Subsidiaries to do
any of the foregoing, in each case unless such arrangement or contract (i) is
otherwise permitted by this Agreement, the Orion Power MidWest Credit Facility,
the Orion Power New York Credit Facility, or any other agreement or instrument
evidencing Permitted Subsidiary Debt, (ii) is in the ordinary course of business
of the Borrower or such Subsidiary, as the case may be, and (iii) is on terms no
less favorable to the Borrower or such Subsidiary than if such arrangement or
contract had been negotiated in good faith on an arm's-length basis with a
Person that is not one of its Affiliates.
(m) Mergers, Etc. (i) Merge with or into or consolidate with or
into any other Person, or (ii) permit any of its Subsidiaries to merge with or
into or consolidate with or into any other Person, except that any such
Subsidiary may merge with or into any other Person, provided that immediately
after giving effect thereto, (A) the surviving corporation is a Subsidiary of
the Borrower, (B) no event shall occur and be continuing which constitutes an
Unmatured Default or an Event of Default and (C) the Borrower or any of its
Subsidiaries shall not be liable with respect to any Debt which it could not
become liable with respect to under this Agreement or any other Loan Document on
the date of such transaction.
(n) Sales, Etc., of Assets. Sell, lease, transfer, assign or
otherwise dispose of all or substantially all of its assets, or permit any of
its Subsidiaries to sell, lease, transfer, assign or otherwise dispose of all or
substantially all of its assets, except (i) sales, leases, transfers and
assignments from one Subsidiary of the Borrower to another such Subsidiary,
provided in each case that no Unmatured Default or Event of Default shall have
occurred and be continuing after giving effect thereto and (ii) sales, leases,
transfers and assignments by any Subsidiary of the Borrower expressly permitted
under, or not otherwise prohibited by, the terms of the Orion Power MidWest
Credit Facility, the Orion Power New York Credit Facility, or any other
agreement or instrument evidencing Permitted Subsidiary Debt.
(o) Change in Nature of Business. Make, or permit any of its
Subsidiaries in existence on the date hereof to make, any material change in the
nature of its business as carried on at the date hereof.
71
67
(p) Capital Expenditures. Make or commit to make, or permit any of
its Subsidiaries to make or commit to make, any Capital Expenditures, except (i)
Capital Expenditures of any Subsidiary of the Borrower financed or to be
financed with Debt permitted by Section 8.02(c)(iii) and (ii) other Capital
Expenditures of any Subsidiary of the Borrower permitted under, or not otherwise
prohibited by, any credit facility to which such Subsidiary is a party
(provided, that such credit facility constitutes Debt permitted under Section
8.02(c)).
(q) Prepayments and Redemption of Debt. Purchase, redeem, retire
or otherwise acquire for value, or set apart any money for a sinking, defeasance
or other analogous fund for the purchase, redemption, retirement or other
acquisition of, or make any voluntary payment or prepayment of the principal of
or interest on, or any other amount owing in respect of, any of its Debt (other
than Debt hereunder and under the other Loan Documents), or permit any of its
Subsidiaries to do any of the foregoing with respect to any Debt of such
Subsidiary, except that (i) each of the Borrower and its Subsidiaries may make
payments on the regularly-scheduled payment dates with respect to the principal
of and interest on its Debt, (ii) Debt under the Orion Power MidWest Credit
Facility and the Orion Power New York Credit Facility may be refinanced to the
extent permitted under Section 8.02(c)(i), (ii) and (vi), (iii) any Subsidiary
of the Borrower may make any such payment or prepayment to the extent required
in order to avoid any imminent default or event of default, or to cure any
default or event of default, in each case under any agreement or instrument
evidencing Permitted Subsidiary Debt to which such Subsidiary is a party, (iv)
any Subsidiary of the Borrower may make any such payment or prepayment of
revolving credit loans under any revolving credit facility to which such
Subsidiary is a party (including the revolving credit facilities under the Orion
Power New York Credit Facility and the Orion Power MidWest Credit Facility), and
(v) any Subsidiary of the Borrower may make any such payment or prepayment to
the extent that such payment or prepayment is funded solely with the proceeds of
(A) any loan, advance or capital contribution received by such Subsidiary from
the Borrower pursuant to Section 8.02(d)(iv) or 8.02(d)(v) or (B) any initial
public offering or sale of equity securities of such Subsidiary to any other
Person (other than the Borrower or any of its Affiliates).
SECTION 8.03. REPORTING OBLIGATIONS. So long as any Loan or any other
amount payable hereunder or under any Promissory Note shall remain unpaid, any
Letter of Credit shall remain outstanding or any Lender shall have any
Commitment, the Borrower will, unless the Majority Lenders shall otherwise
consent in writing, furnish to the Administrative Agent in sufficient number of
copies for each Lender, the following:
(a) as soon as possible and in any event within five Business Days
after the Borrower obtains actual knowledge of the occurrence of each Unmatured
Default or Event of Default continuing on the date of such statement, a
statement of a Senior Financial Officer of the Borrower setting forth details of
such Unmatured Default or Event of Default and the action that the Borrower
proposes to take with respect thereto;
(b) as soon as available and in any event within 45 days after the
end of each of the first three Fiscal Quarters of each Fiscal Year, (i) a
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such Fiscal Quarter and statements (presented on
both a consolidated and consolidating basis) of consolidated income,
consolidated
72
68
retained earnings and consolidated cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous Fiscal Year
and ending with the end of such Fiscal Quarter, and (ii) a balance sheet of the
Borrower (on a stand-alone basis) as at the end of such Fiscal Quarter and
statements of income, retained earnings and cash flows of the Borrower (on a
stand-alone basis) for the period commencing at the end of the previous Fiscal
Year and ending with the end of such Fiscal Quarter, all in reasonable detail
and duly certified (subject to year-end audit adjustments) by a Senior Financial
Officer of the Borrower as having been prepared in accordance with GAAP,
together with (A) a schedule in form satisfactory to the Administrative Agent of
the computations used by the Borrower in determining, as of the end of such
Fiscal Quarter, compliance with the financial covenants contained in Sections
8.01(n), (o), (p) and (q), (B) a list of all Support Obligations of the Borrower
then in effect, and (C) a certificate of the Borrower signed one of its Senior
Financial Officers stating that no Unmatured Default or Event of Default has
occurred and is continuing or, if an Unmatured Default or Event of Default has
occurred and is continuing, a statement as to the nature thereof and the action
that the Borrower proposes to take with respect thereto;
(c) as soon as available and in any event within 90 days after the
end of each Fiscal Year, (i) a consolidated and consolidating balance sheet of
the Borrower and its Subsidiaries as at the end of such Fiscal Year and
statements (presented on both a consolidated and consolidating basis) of
consolidated income, consolidated retained earnings and consolidated cash flows
of the Borrower and its Subsidiaries for such Fiscal Year, and (ii) a balance
sheet of the Borrower (on a stand-alone basis) as at the end of such Fiscal Year
and statements of income, retained earnings and cash flows of the Borrower (on a
stand-alone basis) for such Fiscal Year, in each case accompanied by the audit
report of a nationally-recognized independent public accounting firm, together
with (A) a schedule in form satisfactory to the Administrative Agent of the
computations used by the Borrower in determining, as of the end of such Fiscal
Year, compliance with the financial covenants contained in Sections 8.01(n),
(o), (p) and (q), (B) a list of all Support Obligations of the Borrower then in
effect, and (C) a certificate of the Borrower signed by one of its Senior
Financial Officers stating that no Unmatured Default or Event of Default has
occurred and is continuing or, if an Unmatured Default or Event of Default has
occurred and is continuing, a statement as to the nature thereof and the action
that the Borrower proposes to take with respect thereto;
(d) promptly after obtaining actual knowledge and in any event (A)
within 30 days after obtaining actual knowledge of any ERISA Event described in
clause (i) of the definition of ERISA Event with respect to any Material Plan of
the Borrower or any ERISA Affiliate of the Borrower has occurred and (B) within
ten days after any other ERISA Event with respect to any Material Plan of the
Borrower or any ERISA Affiliate of the Borrower has occurred, a statement of a
Senior Financial Officer of the Borrower describing such ERISA Event and the
action, if any, which the Borrower or such ERISA Affiliate proposes to take with
respect thereto;
(e) promptly after receipt thereof by the Borrower or any of its
ERISA Affiliates from the PBGC, copies of each notice received by the Borrower
or such ERISA Affiliate of the PBGC's intention to terminate any Material Plan
of the Borrower or such ERISA Affiliate or to have a trustee appointed to
administer any such Plan;
73
69
(f) promptly and in any event within 30 days after the filing
thereof with the Internal Revenue Service, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) with respect to each
Material Plan (if any) to which the Borrower or any ERISA Affiliate of the
Borrower is a contributing employer;
(g) promptly after receipt thereof by the Borrower or any of its
ERISA Affiliates from a Multiemployer Plan sponsor, a copy of each notice
received by the Borrower or such ERISA Affiliate concerning the imposition or
amount of withdrawal liability in an aggregate principal amount of at least
$5,000,000 pursuant to Section 4202 of ERISA in respect of which the Borrower or
such ERISA Affiliate is reasonably expected to be liable;
(h) promptly after the Borrower becomes aware of the occurrence
thereof, notice of all actions, suits, proceedings or other events (A) of the
type described in Section 7.01(g) or (B) for which the Agents, the Issuing Banks
and the Lenders will be entitled to indemnity under Section 11.04(b);
(i) promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports which the Borrower or any of
its Subsidiaries sends to its public security holders (if any), copies of all
regular, periodic and special reports which the Borrower or any of its
Subsidiaries files with the Securities and Exchange Commission or any
governmental authority which may be substituted therefor, or with any national
securities exchange, pursuant to the Exchange Act, and copies of all final
prospectuses with respect to any securities issued or to be issued by the
Borrower or any of its Subsidiaries;
(j) promptly after the Borrower becomes aware of the occurrence
thereof, notice of any Year 2000 Issue that could reasonably be expected to have
a Material Adverse Effect; and
(k) within a reasonable time (but in no event more than 30 days)
after any request therefor, such other information respecting the business,
properties, results of operations, prospects, revenues, condition or operations,
financial or otherwise, of the Borrower or any of its Subsidiaries (including
annual financial projections and pro forma financial statements) as the
Administrative Agent, any Issuing Bank or the Majority Lenders may from time to
time reasonably request.
ARTICLE IX
DEFAULTS
SECTION 9.01. EVENTS OF DEFAULT. If any of the following events (each
an "EVENT OF DEFAULT") shall occur and be continuing, the Administrative Agent
and the Lenders shall be entitled to exercise the remedies set forth in Section
9.02:
(a) The Borrower shall fail to pay (i) any principal of any Loan
when due or (ii) any interest thereon, fees or other amounts (other than any
principal of any Loan) payable hereunder or under any other Loan Document within
three Business Days after the same shall have become due; or
74
70
(b) Any representation or warranty made or deemed made by or on
behalf of the Borrower in any Loan Document or certificate or other writing
delivered pursuant thereto shall prove to have been incorrect or misleading in
any material respect when made or deemed made; provided, however, that no Event
of Default shall occur pursuant hereto if, within thirty (30) days after the
date on which a Responsible Officer of the Borrower receives notice or has or,
through the exercise of reasonable diligence under the circumstances, should
have had knowledge (from any source) of such incorrect or misleading
representation or warranty (other than any such representation or warranty (i)
that a Responsible Officer of the Borrower knew (or, through the exercise of
reasonable diligence under the circumstances, should have known) was incorrect
or misleading in any material respect at the time made or deemed made and (ii)
any representation or warranty made or deemed made on the Commitment Closing
Date or the Financial Closing Date), the Borrower eliminates or otherwise
addresses to the satisfaction of the Majority Lenders such incorrect or
misleading representation or warranty; and provided further, however, that
notwithstanding Section 9.02, with respect to any Event of Default under this
subsection (b) arising from an incorrect or misleading representation or
warranty related to a Subsidiary of the Borrower (a "SUBSIDIARY REPRESENTATION
EVENT OF DEFAULT"), the Lenders shall not be permitted to accelerate the
obligations of the Borrower hereunder and under the other Loan Documents based
solely on such Subsidiary Representation Event of Default (or based solely on
such Subsidiary Representation Event of Default and a contemporaneous Subsidiary
Covenant Event of Default) for a period of 180 days after the occurrence thereof
(it being understood and agreed that the Majority Lenders may accelerate the
Borrower's obligations hereunder and under the other Loan Documents at any time
after such 180-day period following the occurrence of any Subsidiary
Representation Event of Default (if such Subsidiary Representation Event of
Default is then continuing), whether or not a Subsidiary Covenant Event of
Default or another Subsidiary Representation Event of Default has occurred and
is continuing at such time); or
(c) The Borrower shall fail to perform or observe any term or
covenant on its part to be performed or observed contained in Section 8.01(n),
Section 8.01(o), Section 8.01(p) or Section 8.01(q) for two consecutive Fiscal
Quarters, and the Administrative Agent shall have given notice to the Borrower
not less than 30 days after the Administrative Agent's receipt of the Borrower's
financial statements (delivered pursuant to Section 8.03(b) or (c), as
applicable) for such second Fiscal Quarter that such failure constitutes an
Event of Default; or
(d) The Borrower shall fail to perform or observe any term or
covenant on its part to be performed or observed related to the Borrower itself
(and not any of its Subsidiaries) contained in any Loan Document (other than
Sections 8.01(n), 8.01(o), 8.01(p) and 8.01(q) hereof) and any such failure
shall remain unremedied for a period of 90 days after the occurrence thereof;
provided, however, that if such default described in this subsection (d) is of a
nature such that it cannot reasonably be remedied within such 90-day period, but
is susceptible to cure within a longer period (not to exceed an additional 90
days), an Event of Default shall not result therefrom so long as (x) the
Borrower has complied with Section 8.03(a) (except where the failure to comply
therewith, in the judgment of the Majority Lenders, has not disadvantaged, and
could not reasonably be expected to disadvantage, the Lenders in any material
respect), (y) the Borrower as promptly as practicable during such original
90-day period commences action reasonably designed to cure such default and
continues diligently to pursue such action until cured (but in no event longer
than an additional 90 days), and (z) in the judgment of the Majority Lenders,
neither such
75
71
default, the continuance thereof, nor the action of the Borrower in pursuing
such remedy has had or could reasonably be expected to have a Material Adverse
Effect; or
(e) The Borrower shall fail to perform or observe any term or
covenant on its part to be performed or observed related to any of its
Subsidiaries contained in any Loan Document (other than Sections 8.01(n),
8.01(o), 8.01(p) and 8.01(q) hereof) and, if capable of being cured, such
failure shall remain unremedied for (i) a period of time equal to the applicable
cure or grace period (if any) set forth for corresponding terms or covenants (as
the case may be) applicable to such Subsidiary contained in (A) with respect to
Orion Power New York, the Orion Power New York Credit Facility, (B) with respect
to Orion Power MidWest, the Orion Power MidWest Credit Facility, or (C) with
respect to any other Subsidiary of the Borrower, the agreement or instrument
evidencing Permitted Subsidiary Debt to which such Subsidiary is a party, or
(ii) if there are no such corresponding terms or covenants, 30 days after the
earlier of (A) the Borrower's obtaining actual knowledge thereof or (B) written
notice thereof shall have been given to the Borrower by any Lender or the
Administrative Agent (any Event of Default under this subsection (e) being
referred to herein as a "SUBSIDIARY COVENANT EVENT OF DEFAULT"); provided,
however, that notwithstanding Section 9.02, the Lenders shall not be permitted
to accelerate the obligations of the Borrower hereunder and under the other Loan
Documents based solely on any such Subsidiary Covenant Event of Default (or
based solely on such Subsidiary Covenant Event of Default and a contemporaneous
Subsidiary Representation Event of Default) for a period of 90 days after the
occurrence thereof (it being understood and agreed that the Majority Lenders may
accelerate the Borrower's obligations hereunder and under the other Loan
Documents at any time after such 90-day period following the occurrence of any
such Subsidiary Covenant Event of Default (if such Subsidiary Covenant Event of
Default is then continuing), whether or not a Subsidiary Representation Event of
Default or another Subsidiary Covenant Event of Default has occurred and is
continuing at such time); or
(f) (i) The Borrower shall fail to pay any of its Debt (including
any interest or premium thereon but excluding Debt incurred under this
Agreement) aggregating $25,000,000 or more when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified in
any agreement or instrument relating to such Debt; or (ii) any other default
under any agreement or instrument relating to any such Debt, or any other event,
shall occur and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such default or
event is (A) to accelerate, or (B) to permit the acceleration of, the maturity
of such Debt; or (iii) any such Debt shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required prepayment
or a refinancing thereof) in whole or in part prior to the stated maturity
thereof, as a result of a default or similar adverse event under any such
agreement or instrument; provided, however, that notwithstanding Section 9.02,
the Lenders shall not be permitted to accelerate the obligations of the Borrower
hereunder and under the other Loan Documents based solely on any Event of
Default under clause (i) or clause (ii)(B) of this subsection (f) until the
earlier to occur of (1) the acceleration of the maturity of such Debt or (2) the
end of the 180-day period following the occurrence of such Event of Default; or
(g) (i) Any Subsidiary of the Borrower shall fail to pay any of
its Debt (including any interest or premium thereon) aggregating $25,000,000 or
more when due (whether by scheduled
76
72
maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified in
any agreement or instrument relating to such Debt, or any other default under
any agreement or instrument relating to any such Debt, or any other event, shall
occur and shall continue after the applicable grace period, if any, specified in
such agreement or instrument, if in any case the effect of such failure to pay
or such other default or event is to accelerate the maturity of such Debt or to
cause the holder of such Debt to take steps to accelerate such Debt; or (ii) any
such Debt shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment or a refinancing
thereof) in whole or in part prior to the stated maturity thereof as a result of
a default or similar adverse event under any such agreement or instrument; or
(h) The Borrower or any of its Subsidiaries shall commence a
voluntary case or proceeding concerning itself under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors; or such an involuntary case or proceeding
is commenced against the Borrower or any of its Subsidiaries and the petition is
not dismissed within 60 days after commencement of the case; or a custodian,
receiver, trustee, conservator or other similar official is appointed for, or
takes charge of, all or any substantial part of the property of the Borrower or
any of its Subsidiaries and such official is not dismissed or removed within 60
days after such appointment; or the Borrower or any of its Subsidiaries
commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect relating to the
Borrower or any of its Subsidiaries, or there is commenced against the Borrower
or any of its Subsidiaries any such proceeding which remains undismissed for a
period of 60 days; or the Borrower or any of its Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered and is undischarged and unstayed for a period of
60 days; or the Borrower or any of its Subsidiaries suffers any appointment of
any custodian or the like for it or any substantial part of its property to
continue undischarged and unstayed for a period of 60 days; the Borrower or any
of its Subsidiaries makes a general assignment for the benefit of creditors; or
the Borrower or any of its Subsidiaries shall fail to pay, or shall state that
it is unable to pay, or shall be unable to pay, its debts generally as they
become due; or the Borrower or any of its Subsidiaries shall call a meeting of
its creditors with a view to arranging a composition or adjustment of its debts;
the Borrower or any of its Subsidiaries shall by any act or failure to act
indicate its consent to, approval of or acquiescence in any of the foregoing; or
any corporate action is taken by the Borrower or any of its Subsidiaries for the
purpose of effecting any of the foregoing; or
(i) Any judgment or order for the payment of money equal to or in
excess of (i) $10,000,000 shall be rendered against the Borrower or its
properties, or (ii) $25,000,000 shall be rendered against any Subsidiary of the
Borrower or its properties, and in each case there shall be any period of 30
consecutive days during which (A) such judgment shall remain undischarged or (B)
a stay of enforcement of such judgment or order, by reason of a pending appeal
or otherwise, shall not be in effect; or
(j) Any material provision of any of the Loan Documents, after
delivery thereof pursuant to Article VI, shall for any reason, except to the
extent permitted by the express terms
77
73
hereof or thereof, cease to be valid and binding on or enforceable against the
Borrower or the Borrower shall so assert in writing; or
(k) At any time any Issuing Bank shall have been served with or
otherwise subjected to a court order, injunction, or other process or decree
issued or granted at the instance of the Borrower restraining or seeking to
restrain such Issuing Bank from paying any amount under any Letter of Credit
issued by it and either (i) there has been a drawing under such Letter of Credit
that complies with the terms for drawing thereunder and which such Issuing Bank
would otherwise be obligated to pay or (ii) the stated expiration date or any
reduction of the stated amount of such Letter of Credit has occurred but the
right of the beneficiary to draw thereunder has been extended in connection with
the pendency of the related court action or proceeding; or
(l) Any Governmental Approval shall be rescinded, revoked,
otherwise terminated, or amended or modified in any manner which is materially
adverse to the interests of the Lenders, the Issuing Banks and the
Administrative Agent; or
(m) The Borrower or any of its ERISA Affiliates shall fail to pay
when due an amount or amounts aggregating in excess of $10,000,000 which it
shall have become liable to pay to the PBGC or to a Plan under Title IV of
ERISA; or notice of intent to terminate a Material Plan, other than a
Multiemployer Plan, shall be filed under Title IV of ERISA by the Borrower or
any of its ERISA Affiliates, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any Material Plan,
other than a Multiemployer Plan, or a proceeding shall be instituted by a
fiduciary of any Material Plan which is a Multiemployer Plan against the
Borrower or any of its ERISA Affiliates to enforce an obligation of the Borrower
or any of its ERISA Affiliates exceeding $10,000,000 under Section 4201 of ERISA
in connection with a withdrawal or alleged withdrawal from such Multiemployer
Plan or to take any action under Section 4219(c)(5) of ERISA and any such
proceeding shall not have been dismissed within 30 days thereafter; or a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated; or any other
ERISA Event shall occur that could reasonably be expected to have a Material
Adverse Effect; or
(n) A Change of Control shall occur; or
(o) (i) The failure of the Borrower to own, directly or
indirectly, 100% of the outstanding Capital Stock of the Orion Power New York
Partners, the Orion Power MidWest Partners, Orion Power New York, Orion Power
MidWest and all of the Subsidiaries of Orion Power New York, or (ii) (A) at any
time prior to an initial registered public offering pursuant to an effective
registration statement under the Securities Act of 1933 covering the offer and
sale of common stock of the Borrower to the public (a "BORROWER IPO"), (1) the
failure of CEI, or any direct or indirect parent of CEI, to own, directly or
indirectly, an amount of the outstanding Capital Stock of the Borrower entitled
to 20% or more of the Total Voting Power of the Borrower, (2) the failure of the
Goldman Entities to own, directly or indirectly, an amount of the outstanding
Capital Stock of the Borrower entitled to (i) 20% or more of the Total Voting
Power of the Borrower, (3) the occurrence of a Goldman Disposition (as defined
in the CPS Strategic Alliance Agreement), or (4) the failure of CEI (or any
direct or indirect parent of CEI) and the
78
74
Goldman Entities (jointly, the "PERMITTED HOLDERS") collectively to own an
amount of the outstanding Capital Stock of the Borrower entitled to 51% or more
of the Total Voting Power of the Borrower, or (B) at any time after successful
consummation of a Borrower IPO, (1) any person or "group" (within the meaning of
Rule 13d-5 under the Exchange Act), together with its Affiliates, other than the
Permitted Holders, shall beneficially own, directly or indirectly, an amount of
Capital Stock of the Borrower entitled to twenty percent (20%) or more of the
Total Voting Power of the Borrower; (2) the failure of the Permitted Holders to
own shares of Capital Stock of the Borrower representing at least thirty-three
and one-third percent (33-1/3%) of the Total Voting Power of the Borrower; or
(3) the Continuing Directors in office at any time shall not constitute a
majority of the Board of Directors of the Borrower. For purposes of the
foregoing, the term "CONTINUING DIRECTORS" shall mean, at any date, an
individual (y) who is a member of the Board of Directors of the Borrower on the
Commitment Closing Date, or (z) who has been nominated to fill a vacancy on the
Board of Directors of the Borrower by a majority of the Continuing Directors
then in office.
SECTION 9.02. REMEDIES. If any Event of Default has occurred and is
continuing, then the Administrative Agent shall at the request, or may with the
consent, of the Majority Lenders, upon notice to the Borrower (i) declare the
Commitments and the obligation of each Lender to make or Convert Loans (other
than Loans under Section 4.04(b)) and of any Issuing Bank to issue a Letter of
Credit to be terminated, whereupon the same shall forthwith terminate, (ii)
declare the principal amount outstanding hereunder, all interest thereon and all
other amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the principal amount outstanding hereunder,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower, and/or (iii) require the
Borrower to pay immediately to the Administrative Agent an amount equal to the
aggregate LC Outstandings of all Letters of Credit then outstanding, to be held
by the Administrative Agent (for its benefit and the benefit of the Issuing
Banks and the Lenders) as cash collateral securing LC Outstandings and the
Borrower's reimbursement obligations with respect thereto; provided, however,
that in the event of an actual or deemed entry of an order for relief with
respect to the Borrower under the Federal Bankruptcy Code, (A) the Commitments
and the obligation of each Lender to make Loans and of any Issuing Bank to issue
any Letter of Credit shall automatically be terminated and (B) the principal
amount outstanding hereunder, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower. Notwithstanding anything to the contrary contained herein, no
notice given or declaration made by the Administrative Agent pursuant to this
Section 9.02 shall affect (1) the obligation of any Issuing Bank to make any
payment under any Letter of Credit issued by such Issuing Bank in accordance
with the terms of such Letter of Credit or (2) the participatory interest of
each Lender in each such payment.
79
75
ARTICLE X
THE ADMINISTRATIVE AGENT
SECTION 10.01. AUTHORIZATION AND ACTION.
(a) Each of the Lenders and the Issuing Banks hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto.
(b) Any Lender serving as Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such Lender and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any of its
Subsidiaries or other Affiliate thereof as if it were not the Administrative
Agent hereunder.
(c) The Administrative Agent shall not have any duties or
obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (i) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether an
Unmatured Default or an Event of Default has occurred and is continuing, (ii)
the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated by the Loan Documents that the Administrative
Agent is required to exercise in writing by the Majority Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 11.01), and (iii) except as expressly set
forth in the Loan Documents, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries or Affiliates that is
communicated to or obtained by the Lender serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Majority Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 11.01) or in the
absence of its own gross negligence or willful misconduct. The Administrative
Agent shall be deemed not to have knowledge of any Unmatured Default or Event of
Default unless and until written notice thereof is given to the Administrative
Agent by the Borrower or a Lender (in which case the Administrative Agent shall
promptly give a copy of such written notice to the Lenders and the Issuing
Banks). The Administrative Agent shall not be responsible for or have any duty
to ascertain or inquire into (A) any statement, warranty or representation made
in or in connection with any Loan Document, (B) the contents of any certificate,
report or other document delivered thereunder or in connection therewith, (C)
the performance or observance of any of the covenants, agreements or other terms
or conditions set forth in any Loan Document, (D) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (E) the satisfaction of any condition set forth in
Article VI or elsewhere in any Loan Document, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent. Neither
the
80
76
Syndication Agent nor the Documentation Agent shall have any duties or
obligations in such capacity under any of the Loan Documents.
(d) The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
(e) The Administrative Agent may perform any and all its duties
and exercise its rights and powers by or through one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding subsections of this Section 10.01 shall apply to any such sub-agent
and to the Related Parties of the Administrative Agent and any such sub-agent,
and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.
(f) Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this subsection (f), the Administrative
Agent may resign at any time by notifying the Lenders, the Issuing Banks and the
Borrower. Upon any such resignation, the Majority Lenders shall have the right,
with the consent of the Borrower (which consent shall not be unreasonably
withheld or delayed), to appoint a successor. If no successor shall have been so
appointed by the Majority Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Banks, appoint a successor Administrative Agent which
shall be a Lender or an Affiliate of a Lender. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Administrative Agent shall be no greater
than those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the Administrative Agent's resignation
hereunder, the provisions of this Article and Section 11.04 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while it was acting as Administrative Agent.
(g) Each Lender acknowledges that it has independently and without
reliance upon any Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender and
based on such documents and information as it shall from time to time deem
81
77
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.
SECTION 10.02. INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower), ratably
according to the respective Percentages of the Lenders, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against the Administrative Agent in
any way relating to or arising out of this Agreement or any other Loan Document
or any action taken or omitted by the Administrative Agent under this Agreement
or any other Loan Document, provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the Administrative
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by the Administrative Agent in connection with
the preparation, execution, syndication, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement or any other Loan Document to the extent that the Administrative
Agent is entitled to reimbursement for such expenses pursuant to Section 11.04
but is not reimbursed for such expenses by the Borrower.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of any Loan Document, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Majority Lenders (and, in the case of any such amendment, the Borrower),
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and signed by all the
Lenders, do any of the following: (i) waive, modify or eliminate any of the
conditions specified in Article VI, (ii) increase the Commitments of the Lenders
or subject the Lenders to any additional obligations, (iii) reduce the principal
of, or interest on, any Loan, any Applicable Margin, any Commitment Fee Rate,
any Letter of Credit Commission Rate or any fees or other amounts payable
hereunder (other than fees payable to the Administrative Agent pursuant to
Section 2.02(c)), (iv) extend the Termination Date or postpone any date fixed
for any payment of principal of, or interest on, any Loan or any fees or other
amounts payable hereunder (other than fees payable to the Administrative Agent
pursuant to Section 2.02(c)), (v) change the definition of "Majority Lenders"
contained in Section 1.01 or change any other provision that specifies the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Loans or the number of Lenders which shall be required for the Lenders or any of
them to take any action hereunder, (vi) amend any Loan Document in a manner
intended to prefer one or more Lenders over any other Lenders, or (vii) amend,
waive or modify this Section 11.01; and provided, further, that no amendment,
waiver or consent shall, unless in writing and signed by the Administrative
Agent in
82
78
addition to the Lenders required above to take such action, affect the rights or
duties of the Administrative Agent under this Agreement or any other Loan
Document; and provided, further, that no amendment, waiver or consent shall,
unless in writing and signed by each Issuing Bank in addition to the Lenders
required above to take such action, affect the rights or duties of any Issuing
Bank under this Agreement or any other Loan Document. Any request from the
Borrower for any amendment, waiver or consent under this Section 11.01 shall be
addressed to the Administrative Agent.
SECTION 11.02. NOTICES, ETC. All notices and other communications
provided for hereunder and under the other Loan Documents shall be in writing
(including telegraphic, facsimile, telex or cable communication) and mailed,
telegraphed, telecopied, telexed, cabled or delivered, (i) if to the Borrower,
at its address at 7 East Redwood Street, 10th Floor, Baltimore, Maryland 21202,
Attention: Chief Legal Officer (Telecopy no. 410.234.0994); (ii) if to any Bank,
at its Domestic Lending Office specified opposite its name on Schedule I; (iii)
if to the Administrative Agent, at its address at 445 South Figueroa Street, Los
Angeles, California 90071, Attention: David Musicant (Telecopy no.
213.236.4096); (iv) if to the Syndication Agent, at its address at CIBC World
Markets Corp., c/o Utilities Department, 425 Lexington Avenue, New York, New
York 10017, Attention: Joe Manger (Telecopy no. 212.885.4911); and (v) if to any
Lender other than a Bank, at its Domestic Lending Office specified in the Lender
Assignment pursuant to which it became a Lender; or, as to each party, at such
other address as shall be designated by such party in a written notice to the
other parties. All such notices and communications shall, when mailed,
telegraphed, telecopied, telexed or cabled, be effective five days after being
deposited in the mails, or when delivered to the telegraph company, telecopied,
confirmed by telex answerback or delivered to the cable company, respectively,
except that notices and communications to the Administrative Agent pursuant to
Article II, III, or X shall not be effective until received by the
Administrative Agent.
SECTION 11.03. NO WAIVER OF REMEDIES. No failure on the part of the
Borrower, any Lender, any Issuing Bank or any Agent to exercise, and no delay in
exercising, any right hereunder or under any other Loan Document shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 11.04. COSTS, EXPENSES AND INDEMNIFICATION. (a) The Borrower
agrees to pay on demand all reasonable costs and expenses of each Agent in
connection with the preparation, negotiation, syndication, execution, delivery
and administration of the Loan Documents and any proposed modification,
amendment, waiver or consent relating to any Loan Document, including the
reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent with respect thereto and with respect to the administration of, and
advising the Administrative Agent as to its rights and responsibilities under,
this Agreement and the other Loan Documents. The Borrower further agrees to pay
on demand all costs and expenses of the Administrative Agent and each Lender
(including reasonable fees and expenses of counsel to the Administrative Agent
and counsel for each Lender) in connection with any workout or restructuring of
the Borrower's obligations, and the enforcement (whether through negotiations,
legal proceedings or otherwise) and/or preservation of the Administrative
Agent's and the
83
79
Lenders' rights and interests, under this Agreement, the other Loan Documents
and the other documents to be delivered hereunder.
(b) The Borrower shall indemnify each Agent, each Issuing Bank,
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an "INDEMNIFIED PERSON") against, and hold each Indemnified
Person harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the reasonable fees, charges and disbursements of
any counsel for any Indemnified Person (whether or not such Indemnified Person
is named as a party to any proceeding or is otherwise subjected to judicial or
legal process arising from any such proceeding), incurred by or asserted against
any Indemnified Person arising out of, in connection with, or as a result of (i)
the execution or delivery of any Loan Document or any other agreement or
instrument contemplated hereby or thereby, the performance by the parties to the
Loan Documents of their respective obligations thereunder or the consummation of
the transactions contemplated hereby or thereby, (ii) any Loan, Letter of Credit
or other Extension of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by an Issuing Bank to honor a demand for
payment under a Letter of Credit issued by such Issuing Bank if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
any Hazardous Substance on or from any property owned or operated by the
Borrower or any of its Affiliates, or any Environmental Liability related in any
way to the Borrower or any of its Affiliates, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnified Person is a party thereto; provided that such indemnity shall
not, as to any Indemnified Person, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by the final
judgment of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnified Person. Without limitation
of the foregoing, in any such claim, litigation, investigation or proceeding, or
the preparation therefor, the Indemnified Persons shall be entitled to select
their own counsel and the Borrower shall promptly pay upon demand the reasonable
fees and expenses of such counsel (except to the extent that such claim,
litigation, investigation or proceeding is determined by the final judgment of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnified Person).
(c) The Borrower's obligations under this Section 11.04 shall
survive the repayment of all amounts owing to the Lenders, the Issuing Banks and
the Agents under the Loan Documents and the termination of the Commitments. If
and to the extent that the obligations of the Borrower under this Section 11.04
are unenforceable for any reason, the Borrower agrees to make the maximum
contribution to the payment and satisfaction thereof which is permissible under
applicable law.
SECTION 11.05. RIGHT OF SET-OFF. (a) Upon (i) the occurrence and during
the continuance of any Event of Default and (ii) the making of the request or
the granting of the consent specified by Section 9.02 to authorize the
Administrative Agent to declare the principal amount outstanding hereunder to be
due and payable pursuant to the provisions of Section 9.02, each Lender and
Issuing Bank is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time
84
80
or demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender or Issuing Bank to or for the credit or the account of
the Borrower, against any and all of the obligations of the Borrower now or
hereafter existing under any Loan Document and any Promissory Notes held by such
Lender, irrespective of whether or not such Lender or Issuing Bank shall have
made any demand under such Loan Document or Promissory Notes and although such
obligations may be unmatured. Each Lender and Issuing Bank agrees to notify
promptly the Borrower after any such set-off and application made by such Lender
or Issuing Bank, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of each Lender and
Issuing Bank under this Section 11.05 are in addition to other rights and
remedies (including other rights of set-off) which such Lender and Issuing Bank
may have.
(b) The Borrower agrees that it shall have no right of off-set,
deduction or counterclaim in respect of its obligations hereunder, and that the
obligations of the Lenders hereunder are several and not joint. Nothing
contained herein shall constitute a relinquishment or waiver of the Borrower's
rights to any independent claim that the Borrower may have against the
Administrative Agent or any Lender for the Administrative Agent's or such
Lender's, as the case may be, gross negligence or willful misconduct, but no
Lender shall be liable for any such conduct on the part of the Administrative
Agent or any other Lender, and the Administrative Agent shall be liable for any
such conduct on the part of any Lender.
SECTION 11.06. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrower and the Agents and when the
Administrative Agent shall have been notified by each Bank that such Bank has
executed it and thereafter shall be binding upon and inure to the benefit of the
Borrower, the Agents and each Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Lenders.
SECTION 11.07. ASSIGNMENTS AND PARTICIPATION. (a) Each Lender may, with
the consent of the Borrower and the Administrative Agent (such consent not to be
unreasonably withheld or delayed and, in the case of the Borrower, shall not be
required if an Event of Default has occurred and is continuing), assign to one
or more banks or other financial institutions all or a portion of its rights and
obligations under this Agreement and the other Loan Documents (including all or
a portion of its Commitment, the Loans owing to it and any Promissory Notes held
by it); provided, however, that (i) each such assignment shall be of a constant,
and not a varying, percentage of all of the assigning Lender's rights and
obligations under this Agreement, (ii) the amount of the Commitment of the
assigning Lender being assigned pursuant to each such assignment (determined as
of the date of the Lender Assignment with respect to such assignment) shall in
no event be less than the lesser of the aggregate amount of such Lender's
Commitment and $5,000,000 and shall be an integral multiple of $1,000,000, (iii)
each such assignment shall be to an Eligible Assignee, and (iv) the parties to
each such assignment shall execute and deliver to the Administrative Agent, for
its acceptance and recording in the Register, a Lender Assignment, together with
any Promissory Notes subject to such assignment and a processing and recordation
fee of $3,500; and provided further, however, that the consent of the Borrower
and the Administrative Agent shall not be required for any assignments by a
Lender to any of its Affiliates or to any other Lender or any of its Affiliates.
Upon such execution, delivery,
85
81
acceptance and recording, from and after the effective date specified in each
Lender Assignment, which effective date shall be at least five Business Days
after the execution thereof, (A) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Lender Assignment, have the rights and obligations of a
Lender hereunder and (B) the Lender assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it to an Eligible
Assignee pursuant to such Lender Assignment, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of a Lender
Assignment covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto); provided, however, that the limitation set forth in clause (iii),
above, shall not apply if an Event of Default shall have occurred and be
continuing and the Administrative Agent shall have declared all Loans to be, or
all Loans shall have automatically become, immediately due and payable
hereunder. Notwithstanding anything to the contrary contained in this Agreement,
any Lender may at any time assign all or any portion of the Loans owing to it to
any Affiliate of such Lender. No such assignment, other than to an Eligible
Assignee in accordance with this Section 11.07, shall release the assigning
Lender from its obligations hereunder.
(b) By executing and delivering a Lender Assignment, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Lender Assignment, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with any Loan Document or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Loan Document or any other instrument or document furnished
pursuant thereto; (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or any of its Subsidiaries or the performance or observance by the
Borrower of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant thereto; (iii) such assignee confirms
that it has received a copy of each Loan Document, together with copies of the
financial statements referred to in Section 7.01(f) and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Lender Assignment; (iv) such assignee will,
independently and without reliance upon the Agents, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents; (v) such assignee confirms that it
is an Eligible Assignee (unless an Event of Default shall have occurred and be
continuing and the Administrative Agent shall have declared all Loans to be
immediately due and payable hereunder, in which case no such confirmation is
necessary); (vi) such assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Loan Documents are required to
be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address
referred to in Section 11.02 a copy of each Lender Assignment delivered to and
accepted by it and a register for the
86
82
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agents, the Issuing Banks
and the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower, any Issuing Bank or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a Lender Assignment executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Promissory Notes subject to such assignment, the processing
and recordation fee referred to in subsection (a) above and any written consent
to such assignment required by subsection (a) above, the Administrative Agent
shall, if such Lender Assignment has been completed and is in substantially the
form of Exhibit F, (i) accept such Lender Assignment, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower. New and/or replacement Promissory Notes payable to the
assignee and the assigning Lender (if the assigning Lender assigned less than
all of its rights and obligations hereunder) shall be issued upon request
pursuant to Section 3.01(d), and shall be dated the effective date of such
Lender Assignment.
(e) Each Lender may sell participations to one or more banks or
other financial institutions (a "PARTICIPANT") in or to all or a portion of its
rights and obligations under the Loan Documents (including all or a portion of
its Commitment, the Loans owing to it and any Promissory Notes held by it);
provided, however, that (i) such Lender's obligations under this Agreement
(including its Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Lender shall remain the holder
of any such Promissory Notes for all purposes of this Agreement, and (iv) the
Borrower, the Agents, the Issuing Banks and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and the other Loan
Documents and to approve any amendment, modification or waiver of any provision
of this Agreement or any other Loan Document; provided, that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 11.01 that affects such Participant. Subject to
subsection (f) below, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 5.04 and 5.06 (and subject to the related
obligations under such Sections) to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to subsection (a) above. To the
extent permitted by law, each Participant shall also be entitled to the benefits
of Section 11.05(a) as though it were a Lender, provided such Participant agrees
to be subject to Section 5.05 as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 5.04 or 5.06 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if
87
83
it were a Lender shall not be entitled to the benefits of Section 5.06 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section 5.06
as though it were a Lender.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.07, disclose to the assignee or Participant or proposed assignee or
Participant, any information relating to the Borrower and its Subsidiaries
furnished to such Lender by or on behalf of the Borrower; provided that prior to
any such disclosure, the assignee or Participant or proposed assignee or
Participant shall agree, in accordance with the terms of Section 11.08, to
preserve the confidentiality of any Confidential Information received by it from
such Lender.
(h) If any Lender (or any Participant to which such Lender has
sold a participation) shall make any demand for payment under Section 5.04(a) or
(c), then within 30 days after any such demand (if, but only if, such demanded
payment has been made by the Borrower), the Borrower may, with the approval of
the Administrative Agent (which approval shall not be unreasonably withheld) and
provided that no Event of Default or Unmatured Default shall then have occurred
and be continuing, demand that such Lender assign, at the sole cost and expense
of the Borrower, in accordance with this Section 11.07 to one or more Eligible
Assignees designated by the Borrower, all (but not less than all) of such
Lender's Commitment and the Loans owing to it within the period ending on the
later to occur of (x) the last day of the 30-day period described above and (y)
the last day of the longest of the then current Interest Periods for such Loans.
If any such Eligible Assignee designated by the Borrower shall fail to
consummate such assignment on terms acceptable to such Lender, or if the
Borrower shall fail to designate any such Eligible Assignees for all or part of
such Lender's Commitment or Loans, then such demand by the Borrower shall become
ineffective; it being understood for purposes of this subsection (h) that such
assignment shall be conclusively deemed to be on terms acceptable to such
Lender, and such Lender shall be compelled to consummate such assignment to an
Eligible Assignee designated by the Borrower, if such Eligible Assignee (1)
shall agree to such assignment by entering into a Lender Assignment with such
Lender and (2) shall offer compensation to such Lender in an amount equal to all
amounts then owing by the Borrower to such Lender hereunder and under any
Promissory Notes made by the Borrower to such Lender, whether for principal,
interest, fees, costs or expenses (other than the demanded payment referred to
above, and payable by the Borrower as a condition to the Borrower's right to
demand such assignment) or otherwise (including, without limitation, to the
extent not paid by the Borrower, any payments required pursuant to Section
5.04(b)). Notwithstanding anything set forth above in this subsection (h) to the
contrary, the Borrower shall not be entitled to compel the assignment by any
Lender demanding payment under Section 5.04(a) of its Commitment and Loans if,
prior to or promptly following any such demand by the Borrower, such Lender
shall have changed or shall change, as the case may be, its Applicable Lending
Office for its Eurodollar Rate Loans so as to eliminate the further incurrence
of such increased cost. In furtherance of the foregoing, any such Lender
demanding payment or giving notice as provided above agrees to use reasonable
efforts to so change its Applicable Lending Office if, to do so, would not
result in the incurrence by such Lender of additional costs or expenses which it
deems material or, in the sole judgment of such Lender, be inadvisable for
regulatory, competitive or internal management reasons.
88
84
(i) Anything in this Section 11.07 to the contrary
notwithstanding, any Lender may assign and pledge all or any portion of its
Commitment and the Loans owing to it to any Federal Reserve Bank (and its
transferees) as collateral security pursuant to Regulation A of the Board and
any Operating Circular issued by such Federal Reserve Bank. No such assignment
shall release the assigning Lender from its obligations hereunder.
(j) Notwithstanding anything to the contrary contained herein, any
Lender (a "GRANTING LENDER") may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrower, the option to fund all or any part
of any Loan that such Granting Lender would otherwise be obligated to fund
pursuant to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan, and (ii) nothing herein shall excuse any
Granting Lender from its obligations hereunder. The funding of a Loan by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Loan were funded by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement for which a Lender would otherwise be
liable for so long as, and to the extent, the Granting Lender provides such
indemnity or makes such payment. In furtherance of the foregoing, each Lender
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior indebtedness of any SPC, it
will not institute against, or join any other Person in instituting against,
such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof. In
addition, notwithstanding anything to the contrary contained in this subsection
(j), any SPC may, with prior notice to, but without the prior written consent
of, the Borrower and the Administrative Agent and without paying any processing
fee therefor, assign all or a portion of its interests in any Loans to the
Granting Lender or to any financial institutions (consented to by the Borrower
and the Administrative Agent) providing liquidity and/or credit support to or
for the account of such SPC to support the funding or maintenance of Loans. This
subsection (j) may not be amended without the prior written consent of each
Granting Lender, all or any part of whose Loans are being funded by an SPC at
the time of such amendment. Notwithstanding the foregoing provisions of this
subsection, (1) an SPC shall not be deemed to be a Lender or a Participant and
shall have no rights under this Agreement except as provided in this subsection
(j), and in particular, but not by way of limitation, shall have no rights to
compensation for increased costs pursuant to Article III or Section 5.04 or
5.06, (2) the Granting Lender's obligations under this Agreement (including its
Commitment to the Borrower hereunder) shall remain unchanged, (3) the Granting
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (4) the Granting Lender shall remain the holder
of any Promissory Notes for all purposes of this Agreement, (5) the Borrower,
the Agents, the Issuing Banks and the other Lenders shall continue to deal
solely and directly with the Granting Lender in connection with such Granting
Lender's rights and obligations under this Agreement, and (6) the Granting
Lender shall indemnify and hold the Borrower harmless from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be incurred or shall arise as a result of any grant to an SPC contemplated
hereunder.
89
85
SECTION 11.08. CONFIDENTIALITY. In connection with the negotiation and
administration of this Agreement and the other Loan Documents, the Borrower has
furnished and will from time to time furnish to the Agents, the Issuing Banks
and the Lenders (each, a "RECIPIENT") written information which is identified to
the Recipient when delivered as confidential (such information, other than any
such information which (i) was publicly available, or otherwise known to the
Recipient, at the time of disclosure, (ii) subsequently becomes publicly
available other than through any act or omission by the Recipient or (iii)
otherwise subsequently becomes known to the Recipient other than through a
Person whom the Recipient knows to be acting in violation of his or its
obligations to the Borrower, being hereinafter referred to as "CONFIDENTIAL
INFORMATION"). The Recipient will not knowingly disclose any such Confidential
Information to any third party (other than to those persons who have a
confidential relationship with the Recipient), and will take all reasonable
steps to restrict access to such information in a manner designed to maintain
the confidential nature of such information, in each case until such time as the
same ceases to be Confidential Information or as the Borrower may otherwise
instruct. It is understood, however, that the foregoing will not restrict the
Recipient's ability to freely exchange such Confidential Information with its
Affiliates or with prospective participants in or assignees of the Recipient's
position herein, but the Recipient's ability to so exchange Confidential
Information shall be conditioned upon any such Affiliate's or prospective
participant's (as the case may be) entering into an agreement as to
confidentiality similar to this Section 11.08. It is further understood that the
foregoing will not prohibit the disclosure of any or all Confidential
Information if and to the extent that such disclosure may be required (1) by a
regulatory agency or otherwise in connection with an examination of the
Recipient's records by appropriate authorities, (2) pursuant to court order,
subpoena or other legal process, (3) otherwise as required by law, or (4) in
order to protect such Recipient's interests or its rights or remedies hereunder
or under the other Loan Documents; in the event of any required disclosure under
clause (2), (3) or (4), above, the Recipient agrees to use reasonable efforts to
inform the Borrower as promptly as practicable to the extent not prohibited by
law.
SECTION 11.09. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENTS, THE
ISSUING BANKS, AND THE LENDERS EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OTHER INSTRUMENT OR DOCUMENT
DELIVERED HEREUNDER OR THEREUNDER.
SECTION 11.10. GOVERNING LAW; SUBMISSION TO JURISDICTION. This
Agreement and the Promissory Notes shall be governed by, and construed in
accordance with, the laws of the State of New York. The Borrower, the Lenders,
the Issuing Banks, and the Agents each (i) irrevocably submits to the
jurisdiction of any New York State court or Federal court sitting in New York
City in any action arising out of any Loan Document, (ii) agrees that all claims
in such action may be decided in such court, (iii) waives, to the fullest extent
it may effectively do so, the defense of an inconvenient forum and (iv) consents
to the service of process by mail. A final judgment in any such action shall be
conclusive and may be enforced in other jurisdictions. Nothing herein shall
affect the right of any party to serve legal process in any manner permitted by
law or affect its right to bring any action in any other court.
90
86
SECTION 11.11. RELATION OF THE PARTIES; NO BENEFICIARY. No term,
provision or requirement, whether express or implied, of any Loan Document, or
actions taken or to be taken by any party thereunder, shall be construed to
create a partnership, association, or joint venture between such parties or any
of them. No term or provision of the Loan Documents shall be construed to confer
a benefit upon, or grant a right or privilege to, any Person other than the
parties hereto. The Borrower hereby acknowledges that none of the Agents, the
Issuing Banks nor the Lenders has any fiduciary relationship with or fiduciary
duty to the Borrower arising out of or in connection with this Agreement or any
of the other Loan Documents, and the relationship between the Agents, the
Issuing Banks and the Lenders, on the one hand, and the Borrower, on the other
hand, in connection herewith or therewith is solely that of creditor and debtor.
SECTION 11.12. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
Agreement.
SECTION 11.13. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made herein and in the certificates pursuant
hereto shall be considered to have been relied upon by the Agents, the Issuing
Banks and the Lenders and shall survive the making by the Lenders of the
Extensions of Credit and the execution and delivery to the Lenders of any
Promissory Notes evidencing the Extensions of Credit and shall continue in full
force and effect so long as any Promissory Note or any amount due hereunder or
under any other Loan Document is outstanding and unpaid, any Letter of Credit is
outstanding, or any Commitment of any Lender has not been terminated.
SECTION 11.14. WAIVER OF CERTAIN BANKRUPTCY CLAIMS. The Borrower, the
Agents, the Issuing Banks and the Lenders acknowledge and agree that (A) in the
event of (i) a bankruptcy, receivership, liquidation, dissolution,
reorganization, marshalling or similar case or proceeding of the Borrower or in
which the Subsidiaries of the Borrower are debtors, and (ii) a substantive
consolidation of the Borrower and its Subsidiaries, or any of them, the Agents,
the Issuing Banks and the Lenders will have no rights in or to the assets of the
Subsidiaries of the Borrower or in any distribution therefrom that was made in
violation of the provisions of either the Orion Power MidWest Credit Facility or
the Orion Power New York Credit Facility, in each case with respect to any such
Subsidiary, until such time as the indebtedness of such Subsidiary created and
evidenced thereby has been irrevocably repaid in full in cash, (B) the holders
of indebtedness under the Orion Power MidWest Credit Facility are relying, and
have been deemed to rely, on the acknowledgment and agreement set forth in
clause (A) preceding in extending indebtedness under the Orion Power MidWest
Credit Facility, and (C) the holders of indebtedness under the Orion Power New
York Credit Facility are relying, and have been deemed to rely, on the
acknowledgment and agreement set forth in clause (A) preceding in giving consent
to the incurrence by the Borrower of the indebtedness hereunder as contemplated
under the terms of the Orion Power New York Credit Facility. Each of the parties
hereto agrees that this Section 11.14 shall not be modified or amended without
the prior written consent of the lenders under the Orion Power New York Credit
Facility and the Orion Power MidWest Credit Facility.
91
87
SECTION 11.15. COMPLIANCE WITH USURY LAWS. All agreements between the
Borrower, the Administrative Agent and each Lender are hereby expressly limited
so that in no contingency or event whatsoever, whether by reason of acceleration
of maturity of the indebtedness evidenced hereby or otherwise, shall the amount
paid or agreed to be paid to any Lender for the use or the forbearance of the
indebtedness evidenced hereby exceed the maximum permissible under applicable
law. As used in this Section 11.15, the term "APPLICABLE LAW" shall mean the law
in effect as of the date hereof, provided, however, that in the event there is a
change in the law which results in a higher permissible rate of interest, then
this Agreement and any Promissory Notes shall be governed by such new law as of
its effective date. In this regard, it is expressly agreed that it is the intent
of the Borrower and each Lender in the execution, delivery and acceptance of
this Agreement and any Promissory Notes to contract in strict compliance with
the laws of the State of New York from time to time in effect. If, under or from
any circumstances whatsoever, fulfillment of any provision hereof or of any of
the Loan Documents at the time performance of such provision shall be due, shall
involve transcending the limit of validity prescribed by applicable law, then
the obligation to be fulfilled shall automatically be reduced to the limit of
such validity, and if under or from any circumstances whatsoever any Lender
should ever receive as interest an amount which would exceed the highest lawful
rate, such amount which would be excessive interest shall be applied to the
reduction of the principal balance evidenced hereby and not to the payment of
interest. This provision shall control every other provision of all agreements
between the Borrower, the Administrative Agent and/or each Lender.
SECTION 11.16. AMENDMENTS TO THIS AGREEMENT UNDER CERTAIN
CIRCUMSTANCES. Upon the removal of all restrictions on amendments to this
Agreement that are contained in the Orion Power New York Credit Facility, the
Orion Power MidWest Credit Facility and all other agreements or instruments
evidencing Permitted Subsidiary Debt (whether pursuant to an amendment thereto,
a refinancing thereof, or otherwise), either the Borrower, or the Agents and the
Lenders, shall have the right to request amendments to the provisions of this
Agreement (including, without limitation, default cure periods and pricing
terms), and upon any such request the parties hereto shall negotiate diligently
and in good faith to amend such provisions that the Borrower and the Lenders
mutually agree should be modified; provided, that (i) this Section 11.16 shall
not obligate any party hereto to agree to any such requested amendment(s) and
(ii) if such good faith negotiations shall not have resulted in mutual agreement
among the parties hereto to the requested amendment(s) within 60 days after the
initial request therefor, this Section 11.16 shall thereafter be of no further
force or effect.
92
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
ORION POWER HOLDINGS, INC.
By
----------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A., as
Administrative Agent
By
----------------------------
Name:
Title:
CIBC WORLD MARKETS CORP., as
Syndication Agent
By
----------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA, as
Documentation Agent
By
----------------------------
Name:
Title:
93
S-2
COMMITMENT BANK
$20,000,000 UNION BANK OF CALIFORNIA, N.A.
By
----------------------------
Name:
Title:
$20,000,000 CANADIAN IMPERIAL BANK OF COMMERCE
By
----------------------------
Name:
Title:
$20,000,000 THE BANK OF NOVA SCOTIA
By
----------------------------
Name:
Title:
$15,000,000 BAYERISCHE HYPO- UND VEREINSBANK
AG, NEW YORK BRANCH
By
----------------------------
Name:
Title:
By
----------------------------
Name:
Title:
94
EXHIBIT A
FORM OF NOTICE OF BORROWING
[Date]
Union Bank of California, N.A., as Administrative
Agent for the Lenders parties to the
Credit Agreement referred to below
Attention: _______________
Ladies and Gentlemen:
The undersigned, Orion Power Holdings, Inc. (the "BORROWER"), refers to
the Credit Agreement, dated as of July 27, 2000 (as amended, modified or
supplemented from time to time, the "CREDIT AGREEMENT", the terms defined
therein and not otherwise defined herein being used herein as therein defined),
among the Borrower, the Lenders named therein, the Issuing Banks from time to
time parties thereto, Union Bank of California, N.A., as Administrative Agent,
CIBC World Markets Corp., as Syndication Agent, and The Bank of Nova Scotia, as
Documentation Agent, and hereby gives you notice, irrevocably, pursuant to
Section 3.01 of the Credit Agreement that the undersigned hereby requests a
Borrowing under the Credit Agreement, and in that connection sets forth below
the information relating to such Borrowing (the "PROPOSED BORROWING") as
required by Section 3.01(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is , .
------ -- ----
(ii) The Type of Loans comprising the Proposed Borrowing is [ABR
Loans] [Eurodollar Rate Loans].
(iii) The aggregate amount of the Proposed Borrowing is $ .
----------
(1)[(iv) The initial Interest Period for each Loan made as part of
the Proposed Borrowing is months.]
----
- -----------------------
(1) To be included for a Proposed Borrowing comprised of Eurodollar Rate
Loans.
95
2
The undersigned hereby acknowledges that the delivery of this Notice of
Borrowing shall constitute a representation and warranty by the Borrower that,
on the date of the Proposed Borrowing, the statements contained in Section
6.03(a) of the Credit Agreement are true.
Very truly yours,
ORION POWER HOLDINGS, INC.
By
----------------------------------
Name:
Title:
96
EXHIBIT B
FORM OF NOTICE OF CONVERSION
[Date]
Union Bank of California, N.A., as Administrative
Agent for the Lenders parties to the
Credit Agreement referred to below
Attention:
-----------------
Ladies and Gentlemen:
The undersigned, Orion Power Holdings, Inc. (the "BORROWER"), refers to
the Credit Agreement, dated as of July 27, 2000 (as amended, modified or
supplemented from time to time, the "CREDIT AGREEMENT", the terms defined
therein and not otherwise defined herein being used herein as therein defined),
among the Borrower, the Lenders named therein, the Issuing Banks from time to
time parties thereto, Union Bank of California, N.A., as Administrative Agent,
CIBC World Markets Corp., as Syndication Agent, and The Bank of Nova Scotia, as
Documentation Agent, and hereby gives you notice, irrevocably, pursuant to
Section 3.02 of the Credit Agreement that the undersigned hereby requests a
Conversion under the Credit Agreement, and in that connection sets forth below
the information relating to such Conversion (the "PROPOSED CONVERSION") as
required by Section 3.02 of the Credit Agreement:
(i) The Business Day of the Proposed Conversion is , .
------ -- ---
(ii) The Type of Loans comprising the Proposed Conversion is [ABR
Loans] [Eurodollar Rate Loans].
(iii) The aggregate amount of the Proposed Conversion is $ .
--------
(iv) The Type of Loans to which such Loans are proposed to be
Converted is [ABR Loans] [Eurodollar Rate Loans].
97
2
(v) The Interest Period for each Loan made as part of the Proposed
Conversion is month(s).(1)
----
The undersigned hereby certifies that the Borrower's request for the
Proposed Conversion is made in compliance with Sections 3.02, 3.03 and 3.04 of
the Credit Agreement. The undersigned hereby acknowledges that the delivery of
this Notice of Conversion shall constitute a representation and warranty by the
Borrower that, on the date of the Proposed Conversion, the statements contained
in Section 6.03(a) of the Credit Agreement are true.
Very truly yours,
ORION POWER HOLDINGS, INC.
By
----------------------------------
Name:
Title:
- --------------------
(1) Delete for ABR Loans.
98
EXHIBIT C
FORM OF OPINION OF SPECIAL NEW YORK COUNSEL
TO THE BORROWER
July 27, 2000
Union Bank of California, N.A. The Bank of Nova Scotia
445 South Figueroa Street One Liberty Plaza
Los Angeles, California 90071 New York, New York 10006
CIBC World Markets Corp. Bayerische Hypo-und Vereinsbank AG
425 Lexington Avenue 150 East 42nd Street
New York, New York 10017 New York, New York 10017
Re: Orion 2000 Credit Agreement for $75,000,000 Financing
Ladies and Gentlemen:
We have acted as special New York counsel to Orion Power Holdings,
Inc., a Delaware corporation ("Borrower"), in connection with (i) the Credit
Agreement dated as of July 27, 2000 (the "Credit Agreement") among Borrower, the
Lenders and Issuing Banks from time to time party thereto, Union Bank of
California, N.A., as administrative agent for the Lenders (the "Administrative
Agent"), The Bank of Nova Scotia as the documentation agent (the "Documentation
Agent") and CIBC World Markets Corp., as syndication agent for the Lenders (the
"Syndication Agent"), and (ii) the agreements, instruments and other documents
referred to in the next paragraph. All capitalized terms used but not defined
herein have the respective meanings given to such terms in the Credit Agreement.
This opinion letter is delivered to you pursuant to Section 6.01(a)(viii)(A) of
the Credit Agreement.
In rendering the opinions expressed below, we have examined the
agreements, instruments and other documents set forth in Schedule I hereto (the
"Opinion Documents") (with each such Opinion Document referred to therein
individually by the defined term ascribed thereto in the Credit Agreement). We
have also examined such records of Borrower and such agreements, instruments and
other documents as we have deemed necessary as a basis for the opinions
expressed below. In addition, we have without independent investigation relied
upon and assumed the truth and accuracy of all matters contained in the
Officer's Certificates of Borrower, attached hereto as Annex 1 and Annex 2.
Furthermore, we have obtained and relied upon such certificates and assurances
from public officials as we have deemed necessary for purposes of our opinions,
and our opinion in paragraph 1 as to the good standing of Borrower is
99
Union Bank of California, N.A., et al.
July 27, 2000
Page 2
based solely upon such certificates. We have not, however, conducted any search
of public records concerning litigation or other legal proceedings.
In our examination, we have assumed: (i) the genuineness and validity
of all signatures; (ii) the legal capacity of all natural persons; (iii) the
authenticity of all documents submitted to us as originals and the conformity to
originals of all documents submitted to us as copies or drafts; (iv) the due
organization, valid existence, and good standing of each party (except Borrower)
and the due authorization, execution and delivery of each Opinion Document
referred to above by each party thereto (except Borrower); (v) the full power,
authority and legal right of each party to such Opinion Documents (except
Borrower) to enter into the same; (vi) that each Opinion Document referred to
above is the legal, valid and binding obligation of each party thereto (other
than Borrower) enforceable against each such party in accordance with its terms;
(vii) that except as expressly set forth in paragraph 10 below, with respect to
which this assumption shall not apply, the parties have obtained and will obtain
and will maintain in full force and effect all necessary Governmental Approvals
for conducting their respective operations; (viii) the absence of evidence
extrinsic to the provisions of the written agreements between the parties that
the parties intended a meaning contrary to that expressed by those provisions;
(ix) the identity and capacity of all individuals acting or purporting to act as
public officials; (x) that each party to the Opinion Documents (other than
Borrower) has satisfied those legal requirements that are applicable to such
party to the extent necessary to entitle such party to enforce the Opinion
Documents to which it is a party; (xi) that each party to the Opinion Documents
has and will act in accordance with, and has and will refrain from taking any
action that is forbidden by, the terms and conditions of the Opinion Documents
to which it is a party; (xii) that each party to the Opinion Documents has not
and will not in the future take any discretionary action (including a decision
not to act) permitted under the Opinion Documents to which it is a party that
would result in a violation of law or constitute a breach or default under any
other agreement or court order to which such party may be subject; (xiii) that
there have been no express or implied amendments, waivers or estoppels with
respect to any of those Opinion Documents which were executed and delivered
prior to the date of this opinion letter (provided, that to our knowledge we are
not aware of any such amendments, waivers or estoppels except as set forth in
Schedule I); and (xiv) that no defaults, breaches or other failures to perform
have occurred and are continuing under any of the Opinion Documents which were
executed and delivered prior to the date of this opinion letter. We have also
without independent investigation relied upon the truth and accuracy of
representations and warranties as to factual matters contained in or made
pursuant to the documents referenced above and certificates delivered
thereunder.
Whenever a statement herein is qualified by the phrase "to our
knowledge," it is intended to indicate that, during the course of our
representation of Borrower pursuant to the transactions contemplated by the
Opinion Documents, no information that would give current actual knowledge with
respect to the inaccuracy of such statement has come to the attention of those
attorneys in this firm who have rendered substantial legal services in
connection with the
100
Union Bank of California, N.A., et al.
July 27, 2000
Page 3
representation described in the first paragraph of this opinion letter. With
respect to certain of such statements, we have made limited inquiry of Borrower
regarding matters covered by such statements, but we have made no independent
investigation as to the accuracy of such statements and none should be inferred
or implied; provided, however, that nothing has come to our attention that would
provide current actual knowledge of the inaccuracy of any such statement to any
of those attorneys. We have relied, with your permission, on the statements
contained in the Officer's Certificates of Borrower attached hereto as Annex 1
and Annex 2 as to the factual matters contained therein but we have made no
independent investigation as to the accuracy of such statements and none should
be inferred or implied; provided, however, that nothing has come to our
attention that would provide current actual knowledge of the inaccuracy of any
such statement to any of those attorneys.
Based upon and subject to the foregoing and subject also to the
exceptions, assumptions, comments and qualifications set forth below, and having
considered such questions of law as we have deemed necessary as a basis for the
opinions expressed below, we are of the opinion that:
1. Borrower is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
2. Borrower has all requisite corporate power to own its property and
assets, to transact the business in which it is presently engaged and in which
it presently proposes to be engaged, and to execute and deliver, and to perform
its obligations under, the Opinion Documents.
3. The execution, delivery and performance by Borrower of each Opinion
Document have been duly authorized by all necessary corporate action on the part
of Borrower.
4. Each Opinion Document has been duly executed and delivered by Borrower.
5. Each Opinion Document constitutes the legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms.
6. The execution and delivery by Borrower of, and the performance by
Borrower of its obligations under, each of the Opinion Documents do not and will
not violate any Applicable Law (as hereinafter defined). "Applicable Law" means
the Delaware General Corporation Law and those laws, statutes, rules and
regulations of the State of New York and of the United States of America which,
in our experience, are normally applicable to general business corporations
which engage in transactions of the type contemplated in the Opinion Documents;
provided, that we express no opinion as to any law, statute, rule or regulation
(a) of the type described in the penultimate paragraph of this opinion, or (b)
to which Borrower may be subject as a result of the legal or regulatory status
of the Administrative Agent, any Issuing Bank or any Lender or their involvement
in the transactions contemplated by the Opinion Documents.
101
Union Bank of California, N.A., et al.
July 27, 2000
Page 4
7. The execution and delivery by the Borrower of, and the performance by
Borrower of its obligations under, each of the Opinion Documents to which it is
a party do not and will not (a) conflict with or violate any provision of the
certificate of incorporation or bylaws of Borrower, or (b) conflict with or
violate or result in a breach of any of the provisions of, or constitute a
default under, any of the Applicable Contracts (as hereinafter defined) or any
other Opinion Document (excluding any covenant, restriction or provisions of any
such agreement or instrument with respect to financial covenants, ratios or
tests or any aspect of the financial condition or results of operation of
Borrower), or result in the creation or imposition of (or the obligation to
create or impose) a lien, charge or encumbrance (except Permitted Liens) upon
any of the properties or assets of Borrower. "Applicable Contracts" means those
agreements and instruments set forth on Schedule II hereto.
8. To our knowledge, (a) there are no injunctions, writs, judgments,
preliminary restraining orders or orders of any nature issued by an arbitrator,
court or other governmental authority or regulatory agency against or affecting
Borrower in connection with the transactions contemplated by the Opinion
Documents, and (b) there are no actions, suits, arbitrations, litigations,
proceedings or investigations pending or threatened against the Borrower in any
court or before any other governmental authority or regulatory agency or any
arbitrator.
9. A New York state court or a United States federal court sitting in New
York would give effect to the choice of New York law to govern the Opinion
Documents which select New York law as the law by which such Opinion Documents
will be governed, as provided in Section 5-1401 of the General Obligations Law
of the State of New York.
10. No authorization, approval or consent of, and no notice to or filing or
registration with, any governmental authority or regulatory agency of the United
States of America, the State of New York or, pursuant to the Delaware General
Corporation Law, the State of Delaware is required on the part of Borrower for
the execution, delivery or performance by Borrower of any of the Opinion
Documents or the legality, validity and binding effect of any Opinion Document.
11. The making of the Loans to Borrower and the application of the proceeds
thereof by Borrower pursuant to and in accordance with the Credit Agreement will
not violate Regulations T, U or X of the Board of Governors of the Federal
Reserve System.
12. The Borrower is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
Our opinions in paragraph 5 above are subject to:
(1) limitations imposed by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting the enforcement of
creditor's rights generally, including,
102
Union Bank of California, N.A., et al.
July 27, 2000
Page 5
without limitation, laws relating to fraudulent transfers or conveyances,
preferences and equitable subordination;
(2) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law), including
without limitation (i) the possible nonavailability of specific performance,
injunctive relief or any other equitable remedy, and (ii) concepts of
materiality, reasonableness, good faith and fair dealing;
(3) the unenforceability under certain circumstances of provisions
imposing liquidated damages or late payment charges if such amounts are
determined to be penalties in light of the actual amount of damages incurred;
(4) laws rendering unenforceable indemnification obligations that
are contrary to Federal or state securities laws and the public policy
underlying such laws;
(5) the unenforceability under certain circumstances of provisions
in any Opinion Document purporting to release, exculpate or exempt any party
from, or requiring indemnification of a party for, liability for its acts or
omissions, or purporting to impose a duty upon any party to indemnify any other
party, when any claimed damages result from the negligence, gross negligence,
recklessness, willful misconduct or unlawful conduct of the party seeking such
indemnity;
(6) the enforceability of provisions in the Opinion Documents to
the effect that terms may not be waived or modified except in writing may be
limited under certain circumstances;
(7) the qualification that certain provisions of any such document
to the effect that rights or remedies are not exclusive, that every right or
remedy is cumulative and may be exercised in addition to any other right or
remedy, that the election of some particular remedy does not preclude recourse
to one or more others or that failure to exercise or delay in exercising rights
or remedies will not operate as a waiver of any such right or remedy, may be
unenforceable in whole or in part; and
(8) the qualification that provisions in any such document that
contain a waiver of (i) the benefits of law or of statutory, regulatory, or
constitutional rights, unless and to the extent the law, statute, regulation or
constitution explicitly allows such waivers or (ii) unknown future defenses, may
be unenforceable in whole or in part.
We express no opinion as to the effect of the laws of any jurisdiction
in which any of the Issuing Banks, the Lenders or the Administrative Agent is
located (other than the State of New York) that limit the interest, fees or
other charges or amounts such Persons may impose for the loan or use of money or
other credit.
103
Union Bank of California, N.A., et al.
July 27, 2000
Page 6
We express no opinion on the laws of any jurisdiction other than the
federal laws of the United States, the laws of the State of New York and the
Delaware General Corporation Law. We express no opinion as to (i) any law, rule,
statute, regulation, ordinance, code, order, judgment or published decree
relating to (A) environmental matters, including, without limitation, pollution,
protection of the environment or any Hazardous Substance, or any Governmental
Approval relating thereto, (B) labor, employee rights and benefits, and worker
or occupational safety and health, including ERISA, (C) taxation, (D) planning,
zoning, land use, building or construction matters, (E) antitrust or unfair
competition, including, without limitation, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and (F) the ownership, transfer, use, sale
or subdivision of real property, (ii) except as expressly set forth in paragraph
10 above, and subject to and without limiting clause (i)(A) above, clause (iii)
below and the third paragraph of this opinion letter, any Governmental Approval,
(iii) utility regulatory matters, including, without limitation, any matters
with respect to the Federal Power Act of 1920, the Public Utility Holding
Company Act of 1935, as amended, the Natural Gas Act (15 U.S.C. Section 717 et
seq.), as amended, the Public Utility Regulatory Policies Act of 1970, as
amended, and Federal Energy Regulatory Commission rules, regulations and orders
and any New York laws, rules or regulations relating to utilities or ownership
or operation of electric generating facilities (including, without limitation,
New York Public Service Law or any rules and regulations of the New York Public
Service Commission) or transmission assets or systems (including, without
limitation, the New York Independent System Operator), (iv) any permit, license
or approval required for the ownership, operation and maintenance of Borrower's
assets or any of the Borrower's subsidiaries' assets, (v) with respect to our
opinion in paragraph 6 above, any law, rule, statute, regulation, ordinance,
code, order, judgment or published decree, the contravention of which would not
result in a Material Adverse Effect, (vi) patent, trademark or copyright
statutes, rules or regulations, (vii) any choice of law provision in any Opinion
Document except as set forth in paragraph 9 above, (viii) any provision in any
Opinion Document appointing one party as an attorney-in-fact of any adverse
party or providing that the decision of any particular Person will be conclusive
or binding on others, (ix) except as expressly set forth in paragraph 12 above,
any state or federal securities laws or regulations, (x) any right in or title
to any asset or property, (xi) any provision in any Opinion Document that
provides for the appointment of a receiver, (xii) any law, rule, regulation,
ordinance, code or similar provision of law of any county, municipality, or
similar political subdivision or any agency or instrumentality thereof, (xiii)
the enforceability of any provision that purports to grant rights of
subrogation, (xiv) the enforceability of any provision which purports to award
attorneys' fees solely to one party, or (xv) the enforceability of any provision
which is contrary to the public policy of any jurisdiction.
This opinion letter is delivered as of the date hereof and is based on
the facts and circumstances and upon the current state of the law existing as of
the date hereof. It is possible that future changes or developments in facts,
circumstances, or the federal laws of the United States, the laws of the State
of New York and the Delaware General Corporation Law, could alter or affect such
opinions; however, we undertake no obligation to update or supplement this
104
Union Bank of California, N.A., et al.
July 27, 2000
Page 7
opinion. Without our written consent: (i) no Person other than you may rely on
this letter for any purpose; (ii) this letter may not be cited or quoted in any
financial statement, prospectus, private placement memorandum or other similar
document; (iii) this letter may not be cited or quoted in any other document or
communication which might encourage reliance upon this letter by any person or
for any purpose excluded by the restrictions in this paragraph; and (iv) copies
of this letter may not be furnished to anyone for purposes of encouraging such
reliance. Notwithstanding the foregoing, (i) any Person which on or after the
date hereof becomes a Lender or Issuing Bank may be provided a copy of, and may
rely upon, this opinion letter as if it were addressed to such Person on and as
of the Commitment Closing Date, subject to the limitations contained in this
paragraph, and (ii) the Administrative Agent, any Lender or any Issuing Bank may
provide a copy of this opinion letter to any governmental entity which requires
such a copy and which has regulatory or supervisory authority over the
Administrative Agent, such Lender or such Issuing Bank, as the case may be (but
no recipient of such a copy pursuant to this clause (ii) shall be entitled to
rely thereon).
Very truly yours,
THELEN REID & PRIEST LLP
TBG/WFO/SPH
105
EXHIBIT D
FORM OF OPINION OF SPECIAL ENERGY REGULATORY
COUNSEL TO THE BORROWER
July 27, 2000
Union Bank of California, N.A.
445 South Figueroa Street
Los Angeles, California 90071
CIBC World Markets Corp.
425 Lexington Avenue
New York, New York 10017
Ladies and Gentlemen:
We are issuing this opinion letter in our capacity as special energy
regulatory legal counsel to Orion Power Holdings, Inc., a Delaware corporation
(the "Company"), in response to the requirement in Section 6.01(a)(viii)(B) of
the Credit Agreement (the "Credit Agreement"), dated as of July 27, 2000, among
the Company, Union Bank of California, N.A. ("UBC"), as Administrative Agent,
CIBC World Markets Corp. ("CIBC"), as Syndication Agent, The Bank of Nova
Scotia, as Documentation Agent, the banks named therein and from time to time a
party thereto (collectively, the "Lenders"), and the letter of credit issuing
banks from time to time a party thereto (collectively, the "Issuing Banks").
UBC, CIBC, the Lenders and the Issuing Banks are herein called "you."
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed thereto in the Credit Agreement, provided that references to
any document mean such document in the form executed and delivered as of the
date hereof.
The following is based exclusively on specific federal energy
regulatory statutes and orders, rules or regulations regarding (a) the
generation, transmission, marketing or sale of electricity or (b) the ownership
or operation of power plants. Subject to the assumptions, qualifications,
exclusions and other limitations which are identified in this letter, we advise
you that:
1. To our knowledge, the Company is not (i) subject to regulation
as a "holding company" or a "subsidiary company" of a holding
company or an "affiliate" of a subsidiary company or holding
company or a "public-utility company" under the Public Utility
Holding Company Act of 1935, as amended, or (ii) subject to
regulation under the Federal Power Act of 1920, as amended,
other than as
106
Union Bank of California, N.A.
July ___, 2000
Page 2
contemplated by 18 C.F.R. Section 292.601(c) and other than
due to its subsidiaries' status as power marketers and owners
of certain electric transmission facilities subject to the
Federal Power Act.
2. No authorization, approval or consent of, and no notice to or
filing or registration with, the Federal Energy Regulatory
Commission ("FERC") or the Securities and Exchange Commission
("SEC") under its Public Utility Holding Company Act
jurisdiction is required on the part of the Company for the
execution, delivery or performance by the Company of any of
the Loan Documents.
For purposes of this opinion letter, we have relied, without
investigation, upon each of the following assumptions: (i) Each document
submitted to us for review is accurate and complete, each such document that is
an original is authentic, each such document that is a copy conforms to an
authentic original, and all signatures on each such document are genuine; (ii)
there are no agreements or understandings among the parties, written or oral,
and there is no usage of trade or course of prior dealing among the parties that
would, in either case, define, supplement or qualify the terms of the Credit
Agreement or the other Loan Documents; (iii) the constitutionality or validity
of a relevant statute, rule, regulation or agency action is not in issue; (iv)
all parties to the Credit Agreement and the other Loan Documents will act in
accordance with, and will refrain from taking any action that is forbidden by,
the terms and conditions of the Credit Agreement and the other Loan Documents;
(v) all agreements other than the Credit Agreement and the other Loan Documents
(if any) with respect to which we have provided advice in our letter or reviewed
in connection with our letter would be enforced as written; (vi) the Company and
its subsidiaries will not in the future take any discretionary action (including
a decision not to act) permitted under the Credit Agreement and the other Loan
Documents that would result in a violation of law or constitute a breach or
default under any other agreements or court orders to which the Company or its
subsidiaries may be subject; (vii) except for those governmental and regulatory
approvals that we have specifically opined upon herein, the Company and its
subsidiaries have obtained (and will in the future obtain) all permits and
governmental approvals required, and have taken (and will in the future take)
all actions required, relevant to the consummation of the transactions or
performance of the Credit Agreement and the other Loan Documents; and (viii)
each person who has taken any action relevant to any of our opinions in the
capacity of director or officer was duly elected to that director or officer
position and held that position when such action was taken. In addition, we have
relied without any independent verification upon: (i) information contained in
certificates and approvals obtained from governmental authorities; (ii) factual
information contained in applications to governmental authorities, the Credit
Agreement and the other Loan Documents; and (iii) factual information we have
obtained from such other sources as we have deemed reasonable. We have assumed
without investigation that there has been no relevant change or development
between the dates as of which the information cited in the preceding sentence
was given and the date of this letter and that the information upon which we
have relied is accurate and does not omit disclosures necessary to prevent such
information from being misleading. For purposes of each opinion, we have relied
upon decisions issued by
2
107
Union Bank of California, N.A.
July ___, 2000
Page 3
governmental authorities in each relevant jurisdiction, and such opinion is not
intended to provide any conclusion or assurance beyond that conveyed by that
decision.
While we have not conducted any independent investigation to determine
facts upon which our opinions are based or to obtain information about which
this letter advises you, we confirm that we do not have any actual knowledge
which has caused us to conclude that our reliance and assumptions cited in the
preceding paragraph are unwarranted or that any information supplied in this
letter is wrong. The term "knowledge" whenever it is used in this letter with
respect to our firm means conscious awareness at the time this letter is
delivered on the date it bears by the following Kirkland & Ellis lawyers who
have reviewed the Credit Agreement and the other Loan Documents (herein called
"our Designated Transaction Lawyers"): Mitchell F. Hertz and Katharine
Costenbader.
Our advice on every legal issue addressed in this letter is based
exclusively on the specific federal energy regulatory statutes and orders, rules
or regulations regarding (a) the generation, transmission, marketing or sale of
electricity or (b) the ownership or operation of power plants. We advise you
that issues addressed by this letter may be governed in whole or in part by
other laws, but we express no opinion as to whether any relevant difference
exists between the laws upon which our opinions are based and any other laws
which may actually govern. We are not providing this opinion letter except in
our capacity as special energy regulatory legal counsel to the Company on issues
relating to the FERC and SEC, under PUHCA and the Federal Power Act, and offer
no opinions on environmental or other matters relating to (a) the generation,
transmission, marketing or sale of electricity or (b) the ownership or operation
of power plants, whether or not addressed in the Credit Agreement or the other
Loan Documents.
Our advice on each legal issue addressed in this letter represents our
opinion as to how that issue would be resolved were it to be considered by the
highest court of the jurisdiction upon whose law our opinion on that issue is
based. The manner in which any particular issue would be treated in any actual
court case would depend in part on facts and circumstances particular to the
case, and this letter is not intended to guarantee the outcome of any legal
dispute which may arise in the future.
This letter speaks as of the time of its delivery on the date it bears.
We do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which our Designated Transaction Lawyers did
not have actual knowledge at that time, by reason of any change subsequent to
that time in any law covered by any of our opinions, or for any other reason.
You may rely upon this letter only for the purpose served by the
provision in the Credit Agreement cited in the initial paragraph of this letter
in response to which it has been delivered. Without our written consent: (i) no
person other than you may rely on this letter for any purpose; (ii) this letter
may not be cited or quoted in any financial statement, prospectus, private
3
108
Union Bank of California, N.A.
July ___, 2000
Page 4
placement memorandum or other similar document; (iii) this letter may not be
cited or quoted in any other document or communication which might encourage
reliance upon this letter by any person or for any purpose excluded by the
restrictions in this paragraph; and (iv) except as required by law, copies of
this letter may not be furnished to anyone (except to the Lenders and the
Issuing Banks) for purposes of encouraging such reliance; provided that any
Person who becomes a Lender or Issuing Bank on or after the date hereof may rely
on this opinion as if it were addressed to such Person on and as of the
Commitment Closing Date, subject to the limitations contained in this paragraph.
Sincerely,
Kirkland & Ellis
4
109
EXHIBIT E
FORM OF OPINION OF COUNSEL TO THE
ADMINISTRATIVE AGENT
July 27, 2000
To Union Bank of California, N.A., as Administrative
Agent under the Credit Agreement referred to below, and
to the Lenders from time to time parties to the Credit
Agreement referred to below
Re: Orion Power Holdings, Inc.
Ladies and Gentlemen:
We have acted as special counsel to Union Bank of California, N.A.,
individually and as Administrative Agent, in connection with the execution and
delivery of the Credit Agreement, dated as of July 27, 2000 (the "CREDIT
AGREEMENT"), among Orion Power Holdings, Inc., the Lenders named therein, the
Issuing Banks from time to time party thereto, Union Bank of California, N.A.,
as Administrative Agent, CIBC World Markets Corp., as Syndication Agent, and The
Bank of Nova Scotia, as Documentation Agent. Terms defined in the Credit
Agreement are used herein as therein defined.
In this connection, we have examined executed counterparts of the
Credit Agreement, together with the other documents listed on Schedule A hereto.
In our examination of the documents referred to above, we have assumed
the authenticity of all such documents submitted to us as originals, the legal
capacity of all natural persons, the genuineness of all signatures, the due
authority of the parties executing such documents, and the conformity to the
originals of all such documents submitted to us as copies. We have further
assumed that you have evaluated, and are satisfied with, the creditworthiness of
the Borrower and the business and financial terms evidenced by the Loan
Documents. We have relied, as to factual matters, on the documents we have
examined.
Our opinions expressed below are limited to the law of the State of New
York and the Federal law of the United States, and we do not express any
opinions concerning any other law.
110
July ___, 2000
Page 2
Based upon and subject to the foregoing and upon such investigation as
we have deemed necessary, and while we have not independently considered the
matters covered by the opinions listed on Schedule A hereto to the extent
necessary to enable us to express the conclusions stated therein, we are of the
opinion that (a) the Credit Agreement is in substantially acceptable legal form
and (b) the other Loan Documents and the opinions and other documents listed on
Schedule A hereto are substantially responsive to the requirements of the
corresponding subsections of Sections 6.01 and 6.02 of the Credit Agreement
pursuant to which the same have been delivered.
Very truly yours,
111
SCHEDULE A
Unless otherwise indicated, all documents are dated on or as of July
27, 2000. Terms defined in the Credit Agreement are used herein as
therein defined. All section references are to those contained in the
Credit Agreement.
112
EXHIBIT F
FORM OF LENDER ASSIGNMENT
Dated ,
------- --- ----
Reference is made to the Credit Agreement, dated as of July 27, 2000
(said Agreement, as it may hereafter be amended, supplemented or otherwise
modified from time to time, being the "CREDIT AGREEMENT", the terms defined
therein and not otherwise defined herein being used herein as therein defined),
among Orion Power Holdings, Inc. (the "Borrower"), the Lenders named therein,
the Issuing Banks from time to time parties thereto, Union Bank of California,
N.A., as Administrative Agent, CIBC World Markets Corp., as Syndication Agent,
and The Bank of Nova Scotia, as Documentation Agent. Pursuant to the Credit
Agreement, ___________ (the "ASSIGNOR") has committed to make loans ("LOANS") to
the Borrower[, which Loans are evidenced by a promissory note (the "NOTE")
issued by the Borrower to the Assignor,] and to participate in Extensions of
Credit resulting from the issuance (or extension, modification or amendment) of
any Letter of Credit.
The Assignor and _____________________________ (the "ASSIGNEE") agree
as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
all of the Assignor's rights and obligations under the Credit Agreement as of
the date hereof which represents the percentage interest specified on Schedule 1
of all outstanding rights and obligations under the Credit Agreement (the
"ASSIGNED INTEREST"), including, without limitation, such interest in the
Assignor's Commitment[,] [and] the Loans owing to the Assignor [and the Note
held by the Assignor]. After giving effect to such sale and assignment, the
Assignee's Commitment and the amount of the Loans owing to the Assignee will be
as set forth in Section 2 of Schedule 1. The effective date of this sale and
assignment shall be the date specified in Section 3 of Schedule 1 hereto (the
"EFFECTIVE DATE").
2. On ________ __, ____, the Assignee will pay to the Assignor,
in same day funds, at such address and account as the Assignor shall advise the
Assignee, $________, and (subject to the satisfaction of the requirements set
forth in Section 11.07(d) of the Credit Agreement) the sale and assignment
contemplated
113
2
hereby shall thereupon become effective as of the Effective Date. From and after
the Effective Date, the Assignor agrees that the Assignee shall be entitled to
all rights, powers and privileges of the Assignor under the Credit Agreement
[and the Note] to the extent of the Assigned Interest, including without
limitation (i) the right to receive all payments in respect of the Assigned
Interest for the period from and after the Effective Date, whether on account of
principal, interest, fees, indemnities in respect of claims arising after the
Effective Date, increased costs, additional amounts or otherwise, (ii) the right
to vote and to instruct the Administrative Agent under the Credit Agreement
according to its Percentage based on the Assigned Interest, (iii) the right to
set-off and to appropriate and apply deposits of the Borrower as set forth in
the Credit Agreement and (iv) the right to receive notices, requests, demands
and other communications. The Assignor agrees that it will promptly remit to the
Assignee any amount received by it in respect of the Assigned Interest (whether
from the Borrower, the Administrative Agent or otherwise) in the same funds in
which such amount is received by the Assignor.
3. The Assignor (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any of its Subsidiaries or the performance or observance by the
Borrower of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant thereto; and (iv) represents and
warrants to the Assignee and the Administrative Agent that it has duly executed
and delivered this Assignment and that the execution, delivery and performance
by the Assignor of this Assignment have been duly authorized by all necessary
action (corporate or otherwise). Except as specified in this Section 3, the
assignment of the Assigned Interest contemplated hereby shall be without
recourse to the Assignor.
4. The Assignee (i) confirms that it has received a copy of each
Loan Document, together with copies of the financial statements referred to in
Section 7.01(f) of the Credit Agreement and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into this Assignment and purchase the Assigned Interest, (ii) agrees that
it will, independently and without reliance upon the Agents, the Assignor or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, (iii) confirms that it satisfies the
requirements of an Eligible Assignee, (iv) appoints and authorizes the
Administrative Agent to take
114
3
such action as agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto, (v) agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of the Loan Documents are required to be performed by it as a Lender
and (vi) represents and warrants to the Assignor and the Administrative Agent
that it has duly executed and delivered this Assignment and that the execution,
delivery and performance by the Assignee of this Assignment have been duly
authorized by all necessary action (corporate or otherwise).
5. This Assignment may be executed in any number of counterparts
and by different parties in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same instrument.
6. This Assignment shall be governed by, and construed in
accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written, such execution being made on Schedule 1 hereto.
115
Schedule 1
to
Assignment Agreement
Dated ,
--------- -- ----
Section 1.
- ---------
Percentage Interest: %
-----
Section 2.
- ---------
Assignee's Commitment: $
-----------
Outstanding Principal Amount of
Loans owing to the Assignee: $
-----------
Section 3.
- ---------
Effective Date:(1) ,
-------- -- ----
[NAME OF ASSIGNOR]
By:
---------------------------------
Name:
Title:
[NAME OF ASSIGNEE]
By:
---------------------------------
Name:
Title:
Domestic Lending Office:
---------------------------------
---------------------------------
---------------------------------
- ---------------------
(1) Such date must be at least five Business Days after the date of the
Lender Assignment.
116
2
Eurodollar Lending Office:
---------------------------------
---------------------------------
---------------------------------
Consented to:(2)
ORION POWER HOLDINGS, INC.
By:
---------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.,
as Administrative Agent
By:
---------------------------------
Name:
Title:
- ---------------------
(2) Consent of the Borrower and the Administrative Agent is required for all
assignments except (i) for any assignment by a Lender to any of its
Affiliates or to any other Lender or any of its Affiliates and (ii) the
consent of the Borrower is not required if an Event of Default has occurred
and is continuing.
117
EXHIBIT G
FORM OF ISSUING BANK AGREEMENT
ISSUING BANK AGREEMENT, dated as of ________ ___, 20__, between ORION
POWER HOLDINGS, INC., a Delaware corporation (the "BORROWER"), and
____________________________ (the "NEW ISSUING BANK").
PRELIMINARY STATEMENTS
(1) The Borrower has entered into a Credit Agreement, dated as of
July 27, 2000 (said Agreement, as amended, modified or supplemented from time to
time, being the "CREDIT AGREEMENT"), with certain banks named therein and from
time to time parties thereto, the letter of credit issuing banks named therein
and from time to time parties thereto, Union Bank of California, N.A., as
Administrative Agent, CIBC World Markets Corp., as Syndication Agent, and The
Bank of Nova Scotia, as Documentation Agent. Unless otherwise defined herein,
capitalized terms used herein shall have the meaning assigned to such terms in
the Credit Agreement.
(2) Pursuant to Section 4.01 of the Credit Agreement, the Borrower
may from time to time identify and arrange for one or more of the Lenders or any
other financial institution to act as an Issuing Bank thereunder and issue one
or more Letters of Credit. The Borrower desires to designate the New Issuing
Bank as an Issuing Bank under the Credit Agreement. Subject to the terms and
conditions hereof and of the Credit Agreement, the New Issuing Bank has agreed
to act as an Issuing Bank and to issue Letters of Credit from time to time at
the request of and for the account of the Borrower in an aggregate stated amount
not to exceed $___________(1) (such amount referred to herein as the
"COMMITMENT") at any one time outstanding.
NOW, THEREFORE, in consideration of the premises and in order to induce
the New Issuing Bank to issue Letters of Credit from time to time, the parties
hereto agree as follows:
- -----------------
(1). Such amount may not exceed the Letter of Credit Sublimit.
118
2
ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"BENEFICIARY" means, with respect to any Letter of Credit, the
beneficiary of such Letter of Credit.
"COMMITMENT" has the meaning assigned to that term in Preliminary
Statement (2) hereof.
"COMMITMENT TERMINATION DATE" has the meaning assigned to that term in
Section 3.01 hereof.
"LETTER OF CREDIT" means a "Letter of Credit" (as such term is defined
in the Credit Agreement) issued by the New Issuing Bank, in form and substance
satisfactory to the New Issuing Bank, the Borrower and the Administrative Agent.
"STATED TERMINATION DATE" means, with respect to any Letter of Credit,
the stated termination date of such Letter of Credit; provided, that the Stated
Termination Date of each Letter of Credit shall in no event be later than the
earlier to occur of (i) the date that occurs one year after the date of issuance
of such Letter of Credit and (ii) the date that is five Business Days prior to
the Termination Date.
SECTION 1.02. COMPUTATION OF TIME PERIODS. Computation of a period of
time from a specified date to a later specified date shall be made in accordance
with the Credit Agreement.
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not specifically
defined herein or in the Credit Agreement shall be construed in accordance with
generally accepted United States accounting principles as in effect as of the
date hereof consistently applied, except as otherwise stated herein.
ARTICLE II
THE CREDIT AGREEMENT
SECTION 2.01. CREDIT AGREEMENT. (a) The parties hereto acknowledge and
agree that this Agreement is an "Issuing Bank Agreement" under the Credit
Agreement, and that the parties hereto shall be entitled to the rights and
remedies, and bound by the obligations, accorded to the parties in interest to
an "Issuing Bank Agreement" as so provided in the Credit Agreement. The parties
hereto hereby further acknowledge and agree that the Administrative Agent and
the Lenders are intended third-party beneficiaries hereof and are entitled
(acting
119
3
through the Administrative Agent, in the case of the Lenders) to the rights and
benefits accorded hereunder.
(b) The New Issuing Bank hereby acknowledges and agrees that it is an
"Issuing Bank" under the Credit Agreement, that, by its execution and delivery
hereof, it is deemed a party to the Credit Agreement as if it were a signatory
thereof in such capacity and that it assumes all obligations, and acquires all
rights and remedies, of an "Issuing Bank" under the Credit Agreement.
(c) In the event of any conflict between the terms of this Agreement
and the terms of the Credit Agreement (unless such conflict arises solely as a
result of an amendment to the Credit Agreement made after the date hereof
without the written consent of the New Issuing Bank thereto), the terms of the
Credit Agreement shall control and such conflicting terms hereunder shall be of
no force or effect.
ARTICLE III
AMOUNT AND TERMS OF THE LETTERS OF CREDIT
SECTION 3.01. THE LETTERS OF CREDIT. The New Issuing Bank agrees, on
the terms and conditions hereinafter set forth, to issue each Letter of Credit
to the Beneficiary designated therefor by the Borrower pursuant to the
applicable Request for Issuance on any Business Day during the period from the
date hereof to and including the date that occurs ten Business Days immediately
preceding the Termination Date (the "COMMITMENT TERMINATION DATE"), in an
aggregate stated amount not to exceed the amount of the Commitment less the
aggregate stated amount of all previously issued and outstanding Letters of
Credit, and expiring on or before the Stated Termination Date designated by the
Borrower in such Request for Issuance.
SECTION 3.02. ISSUING THE LETTERS OF CREDIT. Each Letter of Credit
shall be issued pursuant to Section 4.02 of the Credit Agreement.
SECTION 3.03. LETTER OF CREDIT FEES. The Borrower agrees to pay to the
New Issuing Bank for its own account such fronting or other fees as may be
agreed upon from time to time by the Borrower and the New Issuing Bank; each
such fee agreement is incorporated herein by reference for the benefit of the
New Issuing Bank.
SECTION 3.04. PAYMENTS AND COMPUTATIONS. The Borrower shall make each
payment hereunder not later than 1:00 P.M. (New York City time) on any day when
due in U.S. Dollars. The Borrower hereby authorizes the New Issuing Bank, if and
to the extent payment is not made when due hereunder, to charge from time to
time against any or all of the Borrower's accounts with the New Issuing Bank any
amount so due. Computations of any fees hereunder shall be
120
4
made by the New Issuing Bank on the basis of a year of 360 days for the actual
number of days (excluding the first day but including the last day) elapsed.
SECTION 3.05. EXTENSION OF THE STATED TERMINATION DATE. The Borrower
may request the New Issuing Bank in writing (with a copy of each such request to
the Administrative Agent) to extend the Stated Termination Date of any Letter of
Credit for purposes of this Agreement and such Letter of Credit to any date not
later than the earlier to occur of (i) the date that occurs one year after the
effective date of such extension and (ii) the date that occurs five Business
Days prior to the Termination Date; provided, however, that such request shall
not be necessary for any Letter of Credit that, by its terms, provides that it
shall be automatically renewed or extended for a stated period of time (not to
exceed one year) at the end of its then-scheduled Stated Termination Date unless
the New Issuing Bank notifies the Beneficiary thereof prior to such Stated
Termination Date that the New Issuing Bank elects not to renew or extend such
Letter of Credit (provided, that any such Letter of Credit shall have a final
expiration date, which shall not be subject to automatic renewal or extension,
no later than the date that occurs five Business Days prior to the Termination
Date). If the Borrower shall make such a request, the New Issuing Bank shall
notify the Borrower in writing whether or not the New Issuing Bank consents to
such request and, if the New Issuing Bank does so consent, the conditions of
such consent (including, without limitation, conditions relating to legal
documentation and the consent of the Beneficiary thereof). Any such extension
shall be effective only if and when made in accordance with Articles IV and VI
of the Credit Agreement.
ARTICLE IV
CONDITIONS OF ISSUANCE
SECTION 4.01. CONDITIONS PRECEDENT TO ISSUANCE OF EACH LETTER OF
CREDIT. The obligation of the New Issuing Bank to issue each Letter of Credit is
subject to the satisfaction of the applicable conditions precedent set forth in
Article VI of the Credit Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower hereby represents and warrants for the benefit of the New Issuing Bank
that the representations and warranties of the Borrower set forth in Article VII
of the Credit Agreement are true and correct on the date hereof, on each date of
issuance of a Letter of Credit and on each date on which any of the material
terms or conditions of a Letter of Credit are modified, as if made on and as of
such date.
121
5
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
New Issuing Bank and the Borrower and consented to by the Administrative Agent.
SECTION 6.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall be made in accordance with Section 11.02 of the
Credit Agreement and sent, if to the New Issuing Bank, at its address set forth
on the signature page hereof.
SECTION 6.03. NO WAIVER; REMEDIES. No failure on the part of the New
Issuing Bank to exercise, and no delay in exercising, any right hereunder or
under the Credit Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder or thereunder preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein and therein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 6.04. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on
demand (a) the reasonable fees and expenses of counsel to the New Issuing Bank
in connection with the preparation, execution, delivery and administration of
this Agreement and any other documents that may be delivered in connection with
this Agreement and any proposed modification, amendment or consent relating to
this Agreement and with respect to advising the New Issuing Bank as to its
rights and responsibilities under this Agreement and (b) all costs and expenses
(including reasonable counsel fees and expenses) in connection with (i) the
enforcement of this Agreement and such other documents that may be delivered in
connection with this Agreement (whether through negotiations, legal proceedings
or otherwise) and (ii) any action or proceeding relating to a court order,
injunction, or other process or decree restraining or seeking to restrain the
New Issuing Bank from paying any amount under any Letter of Credit. In addition,
the Borrower shall pay any and all stamp and other taxes and fees payable or
reasonably determined to be payable in connection with the execution and
delivery of this Agreement or any Letter of Credit or any such other documents,
and agrees to save the New Issuing Bank harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes and fees.
SECTION 6.05. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrower and the New Issuing Bank and
consented to in writing by the Administrative Agent (for itself as
Administrative Agent and on behalf of the Lenders); and thereafter shall be
binding upon and inure to the benefit of the Borrower, the New Issuing Bank, the
Administrative
122
6
Agent, the Lenders and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lenders and the New Issuing Bank
shall not have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Majority Lenders.
SECTION 6.06. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
SECTION 6.07. WAIVER OF JURY TRIAL. EACH OF THE NEW ISSUING BANK AND
THE BORROWER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
LETTER OF CREDIT, OR ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR
THEREUNDER.
SECTION 6.08. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of
New York. The New Issuing Bank (i) irrevocably submits to the non-exclusive
jurisdiction of any New York State court or Federal court sitting in New York
City in any action arising out of this Agreement or any Letter of Credit, (ii)
agrees that all claims in such action may be decided in such court, (iii)
waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum and (iv) consents to the service of process by mail. A final
judgment in any such action shall be conclusive and may be enforced in other
jurisdictions. Nothing herein shall affect the right of any party to serve legal
process in any manner permitted by law or affect its right to bring any action
in any other court.
SECTION 6.09. 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.
SECTION 6.10. EXECUTION IN COUNTERPARTS. This Agreement may be executed
and consented to in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed or consented to shall
be deemed to be an original and all of which taken together shall constitute one
and the same instrument.
123
7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
ORION POWER HOLDINGS, INC.
By
----------------------------
Title:
[ ], as
----------------------------
New Issuing Bank
By
----------------------------
Title:
Address:
------------------------
------------------------
Attention:
---------------
Consented to as of the date
first above written:
UNION BANK OF CALIFORNIA, N.A., as Administrative
Agent on behalf of the Lenders
By
----------------------------
Title: