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EXECUTION COPY
U.S.$394,000,000
CREDIT AGREEMENT
Dated as of June 24, 1999
Among
AZURIX BUENOS AIRES S.A.
as Borrower
and
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders
and
WESTDEUTSCHE LANDESBANK GIROZENTRALE
as Agent
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms.....................................................................1
SECTION 1.02. Computation of Time Periods..............................................................13
SECTION 1.03. Accounting Terms.........................................................................13
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances.............................................................................13
SECTION 2.02. Making the Advances......................................................................13
SECTION 2.03. Fees.....................................................................................14
SECTION 2.04. Repayment................................................................................15
SECTION 2.05. Interest.................................................................................15
SECTION 2.06. Interest Rate Determination..............................................................16
SECTION 2.07. Prepayments..............................................................................16
SECTION 2.08. Increased Costs..........................................................................17
SECTION 2.09. Illegality...............................................................................18
SECTION 2.10. Payments and Computations................................................................18
SECTION 2.11. Taxes....................................................................................19
SECTION 2.12. Sharing of Payments, Etc.................................................................21
SECTION 2.13. Use of Proceeds..........................................................................21
ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01....................................21
SECTION 3.02. Conditions Precedent to Each Borrowing and Capitalization of Interest....................23
SECTION 3.03. Determinations Under Section 3.01........................................................24
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower...........................................24
SECTION 4.02. Representations and Warranties of the Lenders............................................26
ARTICLE V COVENANTS OF THE BORROWER SECTION
5.01. Affirmative Covenants............................................................................26
ARTICLE VI EVENTS OF DEFAULT
SECTION 6.01. Events of Default........................................................................27
ARTICLE VII THE AGENT
SECTION 7.01. Authorization and Action.................................................................29
SECTION 7.02. Agent's Reliance, Etc....................................................................29
SECTION 7.03. WestLB and Affiliates....................................................................30
SECTION 7.04. Lender Credit Decision...................................................................30
SECTION 7.05. Indemnification..........................................................................30
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SECTION 7.06. Successor Agent..........................................................................31
ARTICLE VIII MISCELLANEOUS
SECTION 8.01. Amendments, Etc..........................................................................31
SECTION 8.02. Notices, Etc.............................................................................32
SECTION 8.03. No Waiver; Remedies......................................................................32
SECTION 8.04. Costs and Expenses.......................................................................32
SECTION 8.05. Right of Set-off.........................................................................33
SECTION 8.06. Binding Effect...........................................................................34
SECTION 8.07. Assignments and Participations...........................................................34
SECTION 8.08. Governing Law............................................................................37
SECTION 8.10. Execution in Counterparts................................................................37
SECTION 8.11. Jurisdiction, Etc........................................................................37
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Schedules
Schedule I - List of Lending Offices
Exhibits
Exhibit A - Form of Promissory Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Cash Collateral Agreement
Exhibit E - Form of Opinion of Argentine Counsel to the Borrower
Exhibit F - Form of Opinion of New York Counsel to the Borrower and the Pledgor
Exhibit G - Form of Opinion of Counsel for the Pledgor
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CREDIT AGREEMENT
Dated as of June 24, 1999
Credit Agreement (said Agreement, as it may hereafter be amended or
otherwise modified from time to time, being this "Agreement") among Azurix
Buenos Aires S.A., a company organized under the laws of Argentina (the
"Borrower"), the banks, financial institutions and other institutional lenders
(the "Initial Lenders") listed on the signature pages hereof and Westdeutsche
Landesbank Girozentrale ("WestLB"), as agent (the "Agent") for the Lenders (as
hereinafter defined).
PRELIMINARY STATEMENTS:
1. The Borrower has requested that the Lenders make Advances (as
hereinafter defined) to the Borrower on the terms and subject to the conditions
set forth herein.
2. The Lenders are willing to make Advances to Borrower, on the terms
and subject to the conditions set forth herein.
3. The Borrower wishes to enter into the transactions contemplated
hereby for significant commercial purposes associated with its ongoing
operations.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, 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 (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"Accrued Required Collateral Amount" means, as of any date of
determination, the sum of (a) the outstanding principal amount of the
Advances plus any amount of interest to be capitalized as notified by the
Borrower to the Lender (including any amounts added to such principal amount
pursuant to Section 2.05(c)) and (b) the amount of interest accrued and
unpaid through such date on the outstanding principal amount of such
Advances, as determined by the Agent (which determination shall be
conclusive absent manifest error).
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"Advance" means an advance by a Lender to the Borrower
pursuant to Article II, and refers to a Base Rate Advance or a
Eurodollar Rate Advance (each of which shall be a "Type" of Advance).
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the
terms "controlling", "controlled by" and "under common control with")
of a Person means the possession, direct or indirect, of the power to
vote 5% or more of the Voting Stock of such Person or to direct or
cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or
otherwise.
"Agent" has the meaning given such term in the preamble of
this Agreement.
"Agent's Account" means the account of the Agent maintained by
the Agent at The Chase Manhattan Bank, ABA 021000021 for the account of
the Agent, Account No. 001-1-352275.
"Agreement" has the meaning given such term set forth in the
preamble to this Agreement.
"Applicable Margin" means, as of any date, a percentage per
annum equal to 0.0% with respect to Base Rate Advances and 0.15% with
respect to Eurodollar Rate Advances.
"Argentina" means the Republic of Argentina.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Agent, in substantially the form of Exhibit C hereto.
"Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the higher of:
(a) the rate of interest announced publicly by the
Agent in Dusseldorf, Germany, from time to time, as the
Agent's base rate; and
(b) 1/2 of one percent per annum above the Federal
Funds Rate.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 2.05(a)(i).
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"Base Rate Period" means, as of any date of determination, the
lesser of the next succeeding one-month period and the period from such
date of determination until June 22, 2000.
"Borrower" has the meaning given such term in the preamble of
this Agreement.
"Borrowing" means a borrowing consisting of Advances of the
same Type made on the same day by the Lenders.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York, New York or
Dusseldorf, Germany and, if the applicable Business Day relates to any
Eurodollar Rate Advances, on which dealings are carried on in the
London interbank market.
"Cash Collateral Account" has the meaning set forth in the
Cash Collateral Agreement.
"Cash Collateral" has the meaning given such term in the Cash
Collateral Agreement.
"Cash Collateral Agreement" means the Cash Collateral
Agreement attached hereto as Exhibit D.
"Collateral Agent" has the meaning given such term in the
preamble of the Cash Collateral Agreement.
"Commitment" has the meaning specified in Section 2.01.
"Concession" means the concession to provide water and waste
services in the Province of Buenos Aires, Argentina pursuant to the
Concession Agreement.
"Concession Agreement" means the Concession Agreement relating
to the water and sewage services in the Province of Buenos Aires to be
entered into between the Borrower and the Province of Buenos Aires.
"Confidential Information" means any information furnished by
any Loan Party to any Agent or Lender in a writing designated as
confidential but does not include any such information that is or
becomes generally available to any Agent or Lender from a source other
than such Loan Party that is not, to such Agent's or Lender's
knowledge, acting in violation of a confidentiality agreement with such
Loan Party.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
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"Convert", "Conversion" and "Converted" each refers to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.02, 2.06 or 2.09 .
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (i) a Lender organized under the
laws of Germany; (ii) an Affiliate of a Lender organized under the laws
of Germany; (iii) a commercial bank organized under the laws of
Germany, or any subdivision thereof, and having total assets in excess
of $150,000,000,000; (iv) a savings and loan association or savings
bank organized under the laws of Germany, or any subdivision thereof,
and having total assets in excess of $150,000,000,000; (v) a German
finance company, insurance company or other financial institution or
fund (whether a corporation, partnership, trust or other entity) that
is engaged in making, purchasing or otherwise investing in commercial
loans in the ordinary course of its business and having total assets in
excess of $150,000,000,000; provided, however, in the case of clauses
(i) through (v) above, that amounts owing by an Argentine borrower to
any such Person referred to hereinabove would qualify for a tax
withholding rate under applicable Argentine law not in excess of the
tax withholding rate applicable to amounts owing by the Borrower to the
Initial Lenders on the date of any transfer permitted under Section
8.07, and such Person has delivered certification as to the reduced
rate of withholding tax on payments pursuant to this Agreement in
accordance with Section 2.11(e); (vi) any other Person approved by the
Agent and the Pledgor; provided, however, that neither any Loan Party
nor an Affiliate of a Loan Party, nor any competitor of the Borrower or
the Pledgor, shall qualify as an Eligible Assignee and (vii) any Person
solely for purposes of an assignment of 100% of the Lenders rights and
obligations under this Agreement and the Note pursuant to clause (b) of
the definition of "Maturity Date" and Section 2.07(b)(i).
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Rate" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained by
dividing (a) the rate per annum at which deposits in U.S. dollars are
offered by the principal office of WestLB in London, England to prime
banks 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 WestLB's Eurodollar Rate Advance comprising part
of such Borrowing to be outstanding during such Interest Period and for
a period equal to such Interest Period by (b) a percentage equal to
100% minus the Eurodollar Rate Reserve Percentage for such Interest
Period.
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"Eurodollar Rate Advance" means an Advance that bears interest
as provided in Section 2.05(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period
for all Eurodollar Rate Advances comprising part of the same Borrowing
means the reserve percentage applicable two Business Days before the
first day of such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal
reserve requirement) with respect to liabilities or assets consisting
of or including Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which
the interest rate on Eurodollar Rate Advances is determined) having a
term equal to such Interest Period and applying to amounts funded by a
Lender under this Agreement.
"Events of Default" has the meaning specified in Section 6.01.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fee Letter" has the meaning set forth in Section 2.03.
"Initial Lenders" has the meaning given such term in the
preamble of this Agreement.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of
any Base Rate Advance into such Eurodollar Rate Advance and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be
one, three or six months, as the Borrower may, upon notice received by
the Agent not later than 11:00 A.M. (Dusseldorf time) on the third
Business Day prior to the first day of such Interest Period, select;
provided, however, that:
(a) the Borrower may not select any Interest Period
that ends after the Maturity Date;
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(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing
shall be of the same duration;
(c) 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 be extended to occur on
the next succeeding Business Day, provided, however, 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;
(d) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month; and
(e) subject to clause (a) above in which case Section
2.06(c) shall apply, if the Borrower has failed to notify the
Agent with respect to the duration of any Interest Period, the
duration of such Interest Period shall be one month.
"Lenders" means the Initial Lenders and each Person that shall
become a party hereto pursuant to Section 8.07.
"Lending Office" means, with respect to any Lender, the office
of such Lender specified as its "Lending Office" opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender, or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the Agent.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance
on title to real property.
"Loan Document" means each of this Agreement, the Notes, the
Cash Collateral Agreement, and the Fee Letter.
"Loan Party" means the Borrower and the Pledgor.
"Material Adverse Change" means (a) a material impairment of
the ability of any Loan Party to perform any of its obligations under
any Loan Document or (b) a material
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adverse effect upon the legality, validity, binding effect or
enforceability against any Loan Party of any Loan Document to which it
is a party.
"Material Adverse Effect" means (a) a material impairment of
the ability of any Loan Party to perform any of its obligations under
any Loan Document or (b) a material adverse effect upon the legality,
validity, binding effect or enforceability against any Loan Party of
any Loan Document to which it is a party.
"Maturity Date" means the earlier of (a) June 22, 2000 and (b)
the last day of the then-current Interest Period following any date
upon which the direct or indirect ownership by Enron Corp. of the
outstanding Voting Stock of the Pledgor shall fall below 25% of the
total issued and outstanding Voting Stock of the Pledgor; provided,
however, that if the Borrower has given the Lenders prior written
notice that the Borrower shall arrange for the assignment and purchase
of all of the rights and obligations of the Lenders under this
Agreement and within 30 days following such date on which such Voting
Stock ownership is reduced all of the rights and obligations of the
Lenders are assigned pursuant to an Assignment and Acceptance to
another Person for a purchase price equal to the amount of principal,
accrued interest and all other amounts, if any, owing to the Lenders,
clause (b) above shall not apply to any such assignee under such
Assignment and Acceptance.
"Monthly Date" means the last Business Day of each calender
month following the Effective Date.
"Note" means a promissory note of the Borrower payable to the
order of any Lender, in substantially the form of Exhibit A, evidencing
the aggregate indebtedness of the Borrower to such Lender resulting
from the Advances made by such Lender.
"Notice of Borrowing" has the meaning specified in Section
2.02.
"Obligation" means, with respect to any Person, any payment,
performance or other obligations of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether
or not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured,
and whether or not such claim is discharged, stayed or otherwise
affected by any proceeding referred to in Section 6.01(d). Without
limiting the generality of the foregoing, the Obligations of the
Borrower under the Loan Documents include (a) the obligation to pay
principal, interest, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by the Borrower
under any Loan Document and (b) the obligation of Borrower to reimburse
any amount in respect of any of the foregoing that any Lender, in its
sole discretion, may elect to pay or advance on behalf of the Borrower.
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"Other Taxes" has the meaning specified in Section 2.11(b).
"Permitted Investments" means, to the extent owned by the
Pledgor free and clear of all Liens other than Liens created under the
Cash Collateral Agreement and having a maturity of not greater than 180
days from the date of acquisition thereof, readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by
the full faith and credit of the Government of the United States.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture, limited liability company or
other entity, or a government or any political subdivision or agency
thereof.
"Pledgor" means Azurix Corp., a Delaware corporation.
"Register" has the meaning specified in Section 8.07(c).
"Required Collateral Amount" means, as of any date of
determination, the sum of (a) the outstanding principal amount of the
Advances plus the amount of interest to be capitalized as notified by
the Borrower to the Agent (including any amounts added to such
principal amount pursuant to Section 2.05(c)) and (b) the projected
amount of interest payable on the outstanding principal amount of such
Advances for the next succeeding Interest Period, (or in the case of
Base Rate Advances, the projected amount of interest payable for the
Base Rate Period) as determined by the Agent (which determinations
shall be conclusive absent manifest error).
"Required Lenders" means at any time Lenders owed at least a
majority in interest of the then aggregate unpaid principal amount of
the Advances owing to Lenders, or, if no such principal amount is then
outstanding, Lenders having at least a majority in interest of the
Commitments.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than 50% of (a) the issued and outstanding Voting Stock
having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency), (b)
the interest in the capital or profits of such limited liability
company, partnership or joint venture or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries.
"Taxes" has the meaning specified in Section 2.11(a).
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"Treaty" means the treaty between Argentina and the Republic
of Germany for the avoidance of double taxation (as approved by
Argentine law 22.025).
"Type" has the meaning given such term in the definition of
"Advance" hereto.
"U.S. dollar" and the sign "$" each mean the lawful currency
of the United States.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the
happening of such a contingency.
"WestLB" has the meaning given such term in the preamble of
this Agreement.
SECTION 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".
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 3.01(c) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. Each Lender severally agrees, on
the terms and conditions hereinafter set forth, to make one Advance to the
Borrower on or before June 30, 1999 in an aggregate amount not to exceed at any
time outstanding the amount set forth opposite such Lender's name on the
signature pages hereof (such Lender's "Commitment"). The Borrowing shall consist
of Advances of the same Type made on the same day by the Lenders ratably
according to their respective Commitments. Amounts borrowed hereunder and repaid
or prepaid may not be reborrowed.
SECTION 2.02. Making the Advances. (a) The Borrowing shall be
comprised of Eurodollar Rate Advances and shall be made on notice, given not
later than 11:00 A.M. (Dusseldorf time) one Business Day prior to the date of
the proposed Borrowing to the Agent (the "Notice of Borrowing") which shall be
by telephone, confirmed immediately in writing, or telecopier or telex, in
substantially the form of Exhibit B hereto, specifying therein the requested (i)
date of such Borrowing, (ii) the aggregate amount of such Borrowing and (iii)
the applicable Interest Periods. Each Lender shall, before 11:00 A.M.
(Dusseldorf time) on the date of such Borrowing, make
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available for the account of its Lending Office to the Agent at the Agent's
Account, in same day funds, such Lender's ratable portion of such Borrowing.
After the Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article III, the Agent will make such funds available to
the Borrower at the Agent's address referred to in Section 8.02.
(b) The Notice of Borrowing shall be irrevocable and binding
on the Borrower. In the case of any Borrowing that the related Notice
of Borrowing specifies is to be comprised of Eurodollar Rate Advances,
the Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill
on or before the date specified in such Notice of Borrowing for such
Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss, cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Advance to be made by such Lender
as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(c) Unless the Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make
available to the Agent such Lender's ratable portion of such Borrowing,
the Agent may assume that such Lender has made such portion available
to the Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.02 and the Agent may, in reliance upon
such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Agent, such Lender
and the Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon, for
each day from the date such amount is made available to the Borrower
until the date such amount is repaid to the Agent, at (i) in the case
of the Borrower, the interest rate applicable at the time to Advances
comprising such Borrowing and (ii) in the case of such Lender, the
Federal Funds Rate. If such Lender shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this
Agreement.
(d) The failure of any Lender to make the Advance 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 Advance on the date of
such Borrowing, but no Lender shall be responsible for the failure of
any other Lender to make the Advance to be made by such other Lender on
the date of any Borrowing.
(e) Borrowings used to pay accrued and unpaid interest when
due may only be made on the day such interest is due and payable, for
the amount of such interest.
SECTION 2.03. Fees. The Borrower agrees to pay to the Agent
the fees set forth in the Fee Letter dated June 24, 1999 (the "Fee Letter").
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SECTION 2.04. Repayment. The Borrower shall repay to the Agent
for the ratable account of the Lenders on the Maturity Date the aggregate
principal amount of the Advances then outstanding. Five Business Days prior to
the Maturity Date, the Borrower may instruct the Agent in writing to instruct
the Collateral Agent to deliver to Agent the aggregate amount of cash in the
Cash Collateral Account to be applied toward the repayment of the Advances and
interest accrued thereon and other amounts payable hereunder in accordance with
Section 6(b) of the Cash Collateral Agreement.
SECTION 2.05. Interest. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Advance owing to each
Lender from the date of such Advance until such principal amount shall be paid
in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such
Advance is a Base Rate Advance, a rate per annum equal at all
times to the sum of (x) the Base Rate in effect from time to
time plus (y) the Applicable Margin in effect from time to
time, payable in arrears quarterly on the last day of each
September, December, March and June during such periods and on
the date such Base Rate Advance shall be Converted or paid in
full.
(ii) Eurodollar Rate Advances. During such periods as
such Advance is a Eurodollar Rate Advance, a rate per annum
equal at all times during each Interest Period for such
Advance to the sum of (x) the Eurodollar Rate for such
Interest Period for such Advance plus (y) the Applicable
Margin in effect from time to time, payable in arrears on the
last day of such Interest Period and, if such Interest Period
has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the
first day of such Interest Period and on the date such
Eurodollar Rate Advance shall be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the
continuance of an Event of Default, the Borrower shall pay interest on
(i) the unpaid principal amount of each Advance owing to each Lender,
payable in arrears on the dates referred to in clause (a)(i) or (a)(ii)
above, at a rate per annum equal at all times to 2% per annum above the
rate per annum required to be paid on such Advance pursuant to clause
(a)(i) or (a)(ii) above and (ii) to the fullest extent permitted by
law, the amount of any interest, fee or other amount payable hereunder
that is not paid when due, from the date such amount shall be due until
such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal
at all times to 2% per annum above the rate per annum required to be
paid on Base Rate Advances pursuant to clause (a)(i) above.
(c) Capitalized Interest. The Borrower may notify the Agent at
least five Business Days prior to the date of any payment otherwise
required under this Section 2.05 (the "Applicable Interest Payment
Date") other than any such payment required to be paid
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on the Maturity Date, that the amount of interest payable on such
Applicable Interest Payment Date shall be added to the principal amount
of the Advances. So long as on the date of such notice and the
Applicable Interest Payment Date no Default or Event of Default has
occurred and is continuing, the amount of such interest shall be added
to the outstanding principal amount of the Advances on the Applicable
Interest Payment Date and for all purposes shall be deemed to
constitute part of the principal amount of the Advances as of such
date.
SECTION 2.06. Interest Rate Determination. (a) The Agent shall
give prompt notice to the Borrower and the Lenders of the applicable interest
rate determined by the Agent for purposes of Section 2.05(a)(i) or (ii).
(b) If, with respect to any Eurodollar Rate Advances, the
Required Lenders notify the Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost
to such Required Lenders of making, funding or maintaining their
respective Eurodollar Rate Advances for such Interest Period, the Agent
shall forthwith so notify the Borrower and the Lenders, whereupon (i)
each Eurodollar Rate Advance will automatically, on the last day of the
then existing Interest Period therefor, Convert into a Base Rate
Advance, and (ii) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended until the
Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist.
(c) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section
1.01 and there shall be less than one month between the date of such
failure and the Maturity Date, the Agent will forthwith so notify the
Borrower and the Lenders and such Advances will automatically, on the
last day of the then existing Interest Period therefor, Convert into
Base Rate Advances.
(d) On the date on which the aggregate unpaid principal amount
of Eurodollar Rate Advances comprising any Borrowing shall be reduced,
by payment or prepayment or otherwise, to less than $5,000,000, such
Advances shall automatically Convert into Base Rate Advances.
(e) Upon the occurrence and during the continuance of any
Event of Default, (i) each Eurodollar Rate Advance will automatically,
on the last day of the then existing Interest Period therefor, Convert
into a Base Rate Advance and (ii) the obligation of the Lenders to
make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended.
SECTION 2.07. Prepayments. (a) Optional. The Borrower may,
upon at least three Business Days' notice to the Agent stating the proposed date
and aggregate principal amount of the
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prepayment, and if such notice is given the Borrower shall, prepay the
outstanding principal amount of the Advances comprising part of the same
Borrowing in whole or ratably in part, together with accrued interest to the
date of such prepayment on the principal amount prepaid; provided, however, that
(x) each partial prepayment shall be in an aggregate principal amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and (y) in
the event of any such prepayment of a Eurodollar Rate Advance, the Borrower
shall be obligated to reimburse the Lenders in respect thereof pursuant to
Section 8.04(c).
(b) Mandatory. The Borrower shall, at the option of the
Required Lenders and upon not less than 30 Business Days prior written
notice from the Required Lenders, either (i) cause all of the rights
and obligations of the Lenders under this Agreement to be assigned to
and purchased by another Person pursuant to an Assignment and
Acceptance for a purchase price equal to the amount of principal,
accrued interest and all other amounts, if any, owing to the Lenders,
or (ii) prepay the outstanding principal amount of the Advances
comprising part of the same Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the
principal amount prepaid, on each date on which the Borrower receives
any net cash proceeds from any other financing of indebtedness in an
amount equal to the amount by which such net cash proceeds; provided,
however, that (A) the amount of Advances to be prepaid may be reduced
by the amounts required to be paid in connection with such prepayment
pursuant to Section 2.11, (B) the foregoing shall not apply to up to
$75,000,000 received by the Borrower from financings for the Borrower
provided that (x) the proceeds of such financings are used for working
capital purposes and capital expenditures of the Borrower or (y) such
financing consists of indebtedness (not to exceed U.S.$5,000,000)
incurred by the Borrower from one or more of its shareholders and (C)
in the event that any day that such proceeds are required to prepay the
Advances pursuant to this Section is not the last day of an Interest
Period, the Borrower shall set aside and hold in trust such amount
until the last day of the next succeeding Interest Period at which time
such amount shall be applied to prepay the Advances.
SECTION 2.08. Increased Costs. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation 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),
there shall be any increase in the cost to any Lender of agreeing to make or
making, funding or maintaining Eurodollar Rate Advances (excluding for purposes
of this Section 2.08 any such increased costs resulting from (i) Taxes or Other
Taxes (as to which Section 2.11 shall govern) and (ii) changes in the basis of
taxation of overall net income or overall gross income by the United States or
by the foreign jurisdiction or state under the laws of which such Lender is
organized or has its Lending Office or any political subdivision thereof), then
the Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to the Agent), pay to the Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased cost.
A certificate as to the amount of such increased cost, submitted to the Borrower
and the Agent by such Lender, shall be conclusive and binding for all purposes,
absent manifest error.
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(b) If any Lender determines that 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 any corporation controlling such Lender
and that the amount of such capital is increased by or based upon the
existence of such Lender's commitment to lend hereunder and other
commitments of this type, then, upon demand by such Lender (with a copy
of such demand to the Agent), the Borrower shall pay to the Agent for
the account of such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender or such
corporation in the light of such circumstances, to the extent that such
Lender reasonably determines such increase in capital to be allocable
to the existence of such Lender's commitment to lend hereunder. A
certificate as to such amounts submitted to the Borrower and the Agent
by such Lender shall be conclusive and binding for all purposes, absent
manifest error.
SECTION 2.09. Illegality. Notwithstanding any other provision
of this Agreement, if any Lender shall notify the Agent that the introduction of
or any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for any Lender or its Lending Office to perform its obligations
hereunder to make Eurodollar Rate Advances or to fund or maintain Eurodollar
Rate Advances hereunder, (i) each Eurodollar Rate Advance will automatically,
upon such demand, Convert into a Base Rate Advance and (ii) the obligation of
the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall
be suspended until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
SECTION 2.10. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes not later than 11:00 A.M.
(Dusseldorf time) on the day when due in U.S. dollars to the Agent at the
Agent's Account in same day funds. The Agent will promptly thereafter cause to
be distributed like funds relating to the payment of principal or interest or
facility fees ratably (other than amounts payable pursuant to Section 2.08, 2.11
or 8.04(c)) to the Lenders for the account of their respective Lending Offices,
and like funds relating to the payment of any other amount payable to any Lender
to such Lender for the account of its Lending Office, in each case to be applied
in accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 8.07(d), from and after the effective date
specified in such Assignment and Acceptance, the Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder or
under the Note held by such
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Lender, to charge from time to time against any or all of the
Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate shall
be made by the Agent on the basis of a year of 365 or 366 days, as the
case may be, and all computations of interest based on the Eurodollar
Rate or the Federal Funds Rate and of facility fees shall be made by
the Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last
day) occurring in the period for which such interest or facility fees
are payable. Each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(d) Whenever any payment hereunder or under the Notes 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 or facility fee, as the case may be; provided, however, that,
if such extension would cause payment of interest on or principal of
Eurodollar Rate Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.
(e) Unless the 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
Agent may assume that the Borrower has made such payment in full to the
Agent on such date and the 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 Agent, each Lender
shall repay to the 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 Agent, at the Federal Funds Rate.
(f) The making of an Advance to the Borrower, and all payments
of principal and interest hereunder by the Borrower shall be made to or
by the Borrower in New York.
SECTION 2.11. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.10,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Agent, taxes
imposed on its overall net income, and franchise taxes imposed on it in lieu of
net income taxes, by the jurisdiction under the laws of which such Lender or the
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 in lieu of net income taxes, by the jurisdiction
of such Lender's Lending Office or any political subdivision thereof (all such
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non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes 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
Note to any Lender or the 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 2.11) such Lender or
the 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 shall 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 the Notes or from the execution, delivery or registration of,
performing under, or otherwise with respect to, this Agreement or the
Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender and the Agent for
and hold it harmless against the full amount of Taxes or Other Taxes
(including, without limitation, taxes of any kind imposed by any
jurisdiction on amounts payable under this Section 2.11) imposed on or
paid by such Lender or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made within 30 days from
the date such Lender or the Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent, at its address referred to in
Section 8.02, the original or a certified copy of a receipt evidencing
such payment.
(e) Each Lender, from time to time as requested in writing by
the Borrower, shall provide the Borrower as soon as practicable, but
only if and to the extent such Lender is lawfully able to do so, with
such documents certificates, forms which the Borrower has supplied to
the Lender for completion and such other information as the Borrower
may reasonably request from time to time certifying that such Lender is
exempt from or entitled to a reduced rate of withholding tax on
payments pursuant to this Agreement or the Note or otherwise to
establish that such Lender is legally entitled to receive payments
under this Agreement free of any withholding Taxes and to what extent,
if any, such payments are subject to any withholding Taxes.
(f) For any period with respect to which a Lender has failed
to provide the Borrower with such appropriately completed forms or
other information as such Lender is lawfully able to provide and as may
be required under subsection (e) above, such Lender
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shall not be entitled to indemnification under Section 2.11(a) or (c)
with respect to Taxes that are imposed as a consequence of such
failure.
SECTION 2.12. 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 Advances owing to it (other
than pursuant to Section 2.08, 2.11 or 8.04(c)) in excess of its ratable share
of payments on account of the Advances obtained by all the Lenders, such Lender
shall forthwith purchase from the other Lenders such participation in the
Advances owing to them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably 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 2.12
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.
SECTION 2.13. Use of Proceeds. The proceeds of the Advances
shall be available (and the Borrower agrees that it shall use such proceeds)
solely to finance (a) a portion of the purchase price of the Concession, in the
case of the initial Borrowing, (b) interest payable to the Lenders hereunder, in
the case of any Borrowings other than the initial Borrowing and (c) any
transaction cost incurred by the Borrower in connection with this Agreement.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Section
2.01. Section 2.01 of this Agreement shall become effective on and as of the
first date (the "Effective Date") on which the following conditions precedent
have been satisfied:
(a) There shall exist no action, suit, investigation,
litigation or proceeding affecting the Borrower pending or threatened
before any court, governmental agency or arbitrator that (i) could be
reasonably likely to have a Material Adverse Effect or (ii) purports to
affect the legality, validity or enforceability of this Agreement or
any Note or the consummation of the transactions contemplated hereby.
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(b) All governmental and third party consents and approvals
necessary in connection with the transactions contemplated hereby shall
have been obtained (without the imposition of any conditions that are
not acceptable to the Lenders) and shall remain in effect, and no law
or regulation shall be applicable in the reasonable judgment of the
Lenders that restrains, prevents or imposes materially adverse
conditions upon the transactions contemplated hereby.
(c) The Agent shall have received a copy of the Consolidated
balance sheet of the Pledgor and its Subsidiaries as at December 31,
1998, and the related Consolidated statements of income and cash flows
of the Pledgor and its Subsidiaries for the fiscal year then ended,
accompanied by an opinion of Arthur Andersen LLP, independent public
accountants, together with a certificate signed by an officer of the
Pledgor dated the Effective Date certifying that as of December 31,
1998, such documents fairly present in all material respects the
Consolidated financial condition of the Pledgor and its Subsidiaries as
at such date and the Consolidated results of the operations of the
Pledgor and its Subsidiaries for the year ended on December 31, 1998,
all in accordance with generally accepted accounting principles
consistently applied.
(d) On the Effective Date, the following statements shall be
true and the Agent shall have received for the account of each Lender a
certificate duly executed by a duly authorized officer of the Borrower,
dated the Effective Date, stating that:
(i) The representations and warranties contained in
Section 4.01 are correct on and as of the Effective Date, and
(ii) No event has occurred and is continuing that
constitutes a Default.
(e) The Agent shall have received on or before the Effective
Date the following, each dated such day, in form and substance
satisfactory to the Agent and (except for the Notes) in sufficient
copies for each Lender:
(i) The Notes to the order of the Lenders,
respectively.
(ii) The Cash Collateral Agreement duly executed by
the Pledgor.
(iii) Certified copies of the certificate of
incorporation and by-laws or the estatutos, as the case may
be, of each of the Borrower and the Pledgor as in effect on
the Effective Date.
(iv) Certified copies of the resolutions of the Board
of Directors of each of the Loan Parties and certified copies
of the resolutions of the shareholders of the Borrower
approving the Loan Documents to which it is a party, and of
all documents
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evidencing other necessary corporate action and governmental
approvals, if any, with respect to the Loan Documents.
(v) A certificate of the Secretary, an Assistant
Secretary, the President, Vice President or the Board of
Directors, as the case may be, of each of the Loan Parties
certifying the names and true signatures of the officers or
power of attorney, as the case may be, authorized to sign the
Loan Documents and the other documents to be delivered
hereunder.
(vi) A letter from CT Corporation System accepting
appointment as agent to the Borrower for service of process.
(vii) A favorable opinion of Hope, Duggan & Silva,
Argentine counsel for the Borrower, substantially in the form
of Exhibit E hereto and as to such other matters as any Lender
through the Agent may reasonably request.
(viii) A favorable opinion of Morrison & Foerster
LLP, New York counsel for the Loan Parties, substantially in
the form of Exhibit F hereto and as to such other matters as
any Lender through the Agent may reasonably request.
(ix) A favorable opinion of the general counsel for
the Pledgor, substantially in the form of Exhibit G hereto and
as to such other matters as any Lender through the Agent may
reasonably request.
(x) Acknowledgment copies or duly executed
file-stamped copies of UCC-1 statements with respect to the
Cash Collateral, filed in each office in each jurisdiction
that the Agent may deem necessary or appropriate to perfect
and protect a first-priority Lien on the Cash Collateral.
(f) The Borrower shall have paid, or shall pay with the
proceeds of the initial Advance, all accrued fees and expenses of the
Agent and the Lenders (including the accrued fees and expenses of
counsel to the Agent).
SECTION 3.02. Conditions Precedent to Each Borrowing and
Capitalization of Interest. The obligation of each Lender to make an Advance on
the occasion of each Borrowing or a deemed Advance in connection with Section
2.05(c) shall be subject to the conditions precedent that the Effective Date
shall have occurred and on the date of such Borrowing:
(a) The following statements shall be true (and each of the
giving of the applicable Notice of Borrowing and the acceptance by the
Borrower of the proceeds of such Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such
Borrowing such statements are true):
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(i) the representations and warranties contained in
Section 4.01 are correct on and as of the date of such
Borrowing, before and after giving effect to such Borrowing
and to the application of the proceeds therefrom, as though
made on and as of such date, and
(ii) no event has occurred and is continuing, or
would result from such Borrowing or from the application of
the proceeds therefrom, that constitutes a Default.
(b) The U.S. dollar market value of the Cash Collateral shall
equal or exceed the Required Collateral Amount on such date.
(c) The Agent shall have received such other approvals,
opinions or documents as any Lender through the Agent may reasonably
request.
SECTION 3.03. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, 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 Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the date that the Borrower,
by notice to the Lenders, designates as the proposed Effective Date, specifying
its objection thereto. The Agent shall promptly notify the Lenders of the
occurrence of the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:
(a) The Borrower is a "sociedad anonima" with a legal capital
that complies with Argentine law, and in the process of being
incorporated, is validly existing and is operating pursuant to Section
V, Chapter 2 of the Argentine Business Company Law (Law N. 19.550).
(b) The execution, delivery and performance by the Borrower of
this Agreement and the Notes, and the consummation of the transactions
contemplated hereby, are within the Borrower's corporate powers and
have been duly authorized by all necessary corporate action and do not
contravene (i) the Borrower's estatutos or (ii) any law or any
contractual restriction binding on or affecting the Borrower. The
execution, delivery and performance
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by the Borrower of this Agreement and the Notes and the consummation of
the transactions contemplated hereby do not violate any law, rule,
regulation, order, writ, judgment, injunction, decree, or determination
of or made in Argentina.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for the due execution, delivery
and performance by the Borrower of this Agreement or the Notes.
(d) This Agreement has been, and each of the Notes when
delivered hereunder will have been, duly executed and delivered by the
Borrower. This Agreement is, and each of the Notes when delivered
hereunder will be, the legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with their
respective terms, subject to applicable bankruptcy, insolvency or other
similar laws affecting creditors' rights generally.
(e) There is no pending or, to the best of the Borrower's
knowledge, threatened action, suit, investigation, litigation or
proceeding affecting the Borrower before any court, governmental agency
or arbitrator that (i) could be reasonably likely to have a Material
Adverse Effect or (ii) purports to affect the legality, validity or
enforceability of this Agreement or any Note or the consummation of the
transactions contemplated hereby.
(f) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System), and no proceeds of any Advance will be used to
purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying any margin stock.
(g) The Borrower is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for,
an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended. Neither the making of any Advances,
nor the application of the proceeds or repayment thereof by the
Borrower, nor consummation of the financing contemplated under the Loan
Documents, will violate any provision of such Act or any rule,
regulation or order of the Securities and Exchange Commission
thereunder.
(h) This Agreement, the Notes and the other Loan Documents are
in proper legal form under the law of Argentina for the enforcement
thereof against the Borrower under the law of Argentina, and to ensure
the legality, validity, enforceability or admissibility in evidence of
this Agreement, the Notes and the other Loan Documents in Argentina, it
is not necessary that this Agreement, the Notes or any other Loan
Document or any other document be filed or recorded with any court or
other authority in Argentina.
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SECTION 4.02. Representations and Warranties of the Lenders.
Each Lender party hereto represents and warrants (1) that it qualifies as a
German resident under the treaty between Argentina and the Republic of Germany
for the avoidance of double taxation (as approved by Argentine Law 22.025;
hereinafter the "Treaty"); (2) that such Lender does not have permanent
establishment in Argentina or does not perform in Argentina professional
services from a fixed base situated therein, and the Advances under this Credit
Agreement in respect of which interest shall be paid shall not be effectively
connected with such permanent establishment or fixed base; and (3) that in
accordance with applicable German Law, it qualifies as a bank under applicable
German Law in furtherance of Section 11(2)(a) of the Treaty.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Borrower will:
(a) Compliance with Laws, Etc. Comply in all material
respects, with all applicable laws, rules, regulations and orders,
except for a noncompliance which would not have a Material Adverse
Effect.
(b) Preservation of Corporate Existence, Etc. Preserve and
maintain its corporate existence including maintaining required
capitalization under Argentine law, rights (charter and statutory) and
franchises; provided, however, that the Borrower shall not be required
to preserve any right or franchise if the Board of Directors of the
Borrower shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Borrower and that the
loss thereof is not disadvantageous in any material respect to the
Borrower or the Lenders. Notwithstanding anything else provided herein,
the Borrower shall, not later than the 60th day after the date hereof,
cause the Borrower to be registered as required under Argentine law in
accordance with paragraph four of Section 8.1 of the Bidding Terms of
the National and International Public Bid for the Concession of the
Water and Sewage Services in the Province of Buenos Aires provided that
the Borrower shall notify the Agent 30 days after the date hereof
indicating the status of such registrations, and otherwise from time to
time in the event that in the reasonable opinion of the Borrower such
registration may not be achieved as required hereunder.
(e) Reporting Requirements. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the
Borrower will furnish to the Agent for distribution to the Lenders:
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(i) Default Notice. As soon as possible and in any
event within 5 days after the occurrence of each Default, a
statement of an officer of the Borrower setting forth details
of such Default and the action that the Borrower has taken and
proposes to take with respect thereto.
(ii) Other Financings. The Borrower shall notify the
Agent at least 10 days prior to any receipt of cash proceeds
from any other financing of indebtedness; the proceeds are of
the type which could be used to prepay the Advances pursuant
to Section 2.07(b).
(iii) Other Information. Within fifteen days of a
request by the Agent, such other information respecting the
business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower as any
Lender (through the Agent) may from time to time reasonably
request.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable; or the Borrower shall
fail to pay any interest on any Advance or make any other payment of
fees or other amounts payable under this Agreement or any Note within
three days after the same becomes due and payable; or
(b) Any representation or warranty made by a Loan Party in any
Loan Document shall prove to have been incorrect in any material
respect when made; or
(c) (i) The Borrower shall fail to perform or observe any
term, covenant or agreement contained in Section 5.01(a), (b) or (e)(i)
of this Agreement or the Pledgor shall fail to perform any of its
obligations under the Cash Collateral Agreement, or (ii) any Loan Party
shall fail to perform or observe any other term, covenant or agreement
contained in any Loan Document on its part to be performed or observed
if such failure shall remain unremedied for 10 days after written
notice thereof shall have been given to the Borrower by the Agent or
any Lender; or
(e) Any Loan Party shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any
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Loan Party seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee, custodian or other similar official for it or
for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of 60
days, or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official
for, it or for any substantial part of its property) shall occur; or
any Loan Party shall take any corporate action to authorize any of the
actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess
of $10,000,000 shall be rendered against any Loan Party and either (i)
enforcement proceedings shall have been commenced by any creditor upon
such judgment or order or (ii) there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect; provided, however, that any such judgment or order shall not be
an Event of Default under this Section 6.01(e) if and for so long as
(i) the amount of such judgment or order is covered by a valid and
binding policy of insurance between the defendant and the insurer
covering payment thereof and (ii) such insurer, which shall be rated at
least "A" by A.M. Best Company, has been notified of, and has not
disputed the claim made for payment of, the amount of such judgment or
order; or
(g) Any non-monetary judgment or order shall be rendered
against the Borrower that could be reasonably expected to have a
Material Adverse Effect, and there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(h) The Cash Collateral Agreement after delivery thereof
pursuant to Section 3.01 shall for any reason cease to create a valid
and perfected first priority lien on and security interest in the
Collateral; or
(i) Any provision of any Loan Document after delivery thereof
pursuant to Section 3.01 shall for any reason cease to be valid and
binding on or enforceable against any Loan Party party to it, or any
such Loan Party shall so state in writing; or
(j) Commencing on July 30, 1999, the Concession Agreement or
any license, permit, authorization, consent or approval necessary for
the operation of the Concession is not executed, effected or given or
is withdrawn or is otherwise not in full force and effect; or
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then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the Notes,
all interest thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Notes, 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; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to any Loan Party under
applicable bankruptcy laws, (A) the obligation of each Lender to make Advances
shall automatically be terminated and (B) the Notes, 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.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under this Agreement as are delegated to
the Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to this Agreement or applicable law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any
of its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may treat
the payee of any Note as the holder thereof until the Agent receives and accepts
an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 8.07; (ii) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender and shall not be responsible
to any
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Lender for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement; (iv) shall not have any duty
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement on the part of the Borrower or
to inspect the property (including the books and records) of the Borrower; (v)
shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with, this Agreement or any other instrument
or document furnished pursuant hereto; and (vi) shall incur no liability under
or in respect of this Agreement by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telecopier, telegram or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. WestLB and Affiliates. With respect to its
Commitment, the Advances made by it and the Note issued to it, WestLB shall have
the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include WestLB in its
individual capacity. WestLB and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, the
Borrower, any of its Subsidiaries and any Person who may do business with or own
securities of the Borrower or any such Subsidiary, all as if WestLB were not the
Agent and without any duty to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Agent or any other
Lender and based on the financial statements referred to in Section 3.01 and
such other 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 the Agent 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 this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify
the Agent (to the extent not reimbursed by the Borrower), ratably according to
the respective principal amounts of the Notes then held by each of them (or if
no Notes are at the time outstanding or if any Notes are held by Persons that
are not Lenders, ratably according to the respective amounts of their
Commitments), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent under this Agreement
(collectively, the "Indemnified Costs"), provided that no Lender shall be liable
for any portion of the Indemnified Costs resulting from the Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand for its ratable share
of any out-of-pocket expenses (including counsel fees) incurred by the Agent in
connection with the
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preparation, execution, 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,
to the extent that the Agent is not reimbursed for such expenses by the
Borrower. In the case of any investigation, litigation or proceeding giving rise
to any Indemnified Costs, this Section 7.05 applies whether any such
investigation, litigation or proceeding is brought by the Agent, any Lender or a
third party.
SECTION 7.06. Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower and may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent having a combined capital and surplus of at least
$150,000,000,000. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $150,000,000,000 and shall be
reasonably acceptable to the Pledgor. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, discretion, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article VII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes, 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 Borrower and the Required Lenders, 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: (a) waive any of the conditions specified in Section 3.01, (b)
increase the Commitments of the Lenders or subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, the Notes or any fees
or other amounts payable hereunder, (d) postpone any date fixed for any payment
of principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Notes, or the number of Lenders, that shall be
required for the Lenders or any of them to take any action hereunder, (f)
release any material portion of any collateral held to secure the obligations of
the Borrower and
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the Pledgor under any of this Agreement, the Cash Collateral Agreement and the
Notes or (g) amend this Section 8.01; and provided further that no amendment,
waiver or consent shall, unless in writing and signed by the Agent in addition
to the Lenders required above to take such action, affect the rights or duties
of the Agent under this Agreement or any Note.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic or telex communication) and mailed, telecopied, telegraphed, telexed
or delivered, if to the Borrower, at its address at Avenida Madero 900, 18th
Floor, Buenos Aires, Argentina, Attention: President, with a copy to Azurix
Corp., 333 Clay Street, Suite 1000, Houston, Texas 77002, Attention: General
Counsel; if to any Initial Lender, at its Lending Office specified opposite its
name on Schedule I hereto; if to any other Lender, at its Lending Office
specified in the Assignment and Acceptance pursuant to which it became a Lender;
and if to the Agent, at its address at 1211 Avenue of the Americas, New York,
New York 10036, Attention: Richard Newman; or, as to the Borrower or the Agent,
at such other address as shall be designated by such party in a written notice
to the other parties and, as to each other party, at such other address as shall
be designated by such party in a written notice to the Borrower and the Agent.
All such notices and communications shall, when mailed, telecopied, telegraphed
or telexed, be effective when deposited in the mails, telecopied, delivered to
the telegraph company or confirmed by telex answerback, respectively, except
that notices and communications to the Agent pursuant to Article II, III or VII
shall not be effective until received by the Agent. Delivery by telecopier of an
executed counterpart of any amendment or waiver of any provision of this
Agreement or the Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of a manually executed counterpart
thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of
any Lender or the Agent to exercise, and no delay in exercising, any right
hereunder or under any Note 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 8.04. Costs and Expenses. (a) The Borrower agrees to
pay on demand all costs and expenses of the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Agreement, the Notes, any other Loan Document and the other documents to be
delivered hereunder, including, without limitation, the reasonable fees and
expenses of counsel for the Agent with respect thereto and with respect to
advising the Agent as to its rights and responsibilities under this Agreement.
The Borrower further agrees to pay on demand all costs and expenses of the Agent
and the Lenders, if any (including, without limitation, reasonable counsel fees
and expenses), in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement, the Notes and the other
documents to be delivered hereunder, including, without limitation, reasonable
fees and expenses of counsel for the Agent and each Lender in connection with
the enforcement of rights under this Section 8.04(a).
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(b) The Borrower agrees to indemnify and hold harmless the
Agent and each Lender and each of their Affiliates and their officers,
directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable
fees and expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or
in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) (i) the Notes, this
Agreement, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Advances except to the extent such
claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful
misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 8.04(b) applies, such
indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by the Borrower, its directors,
equityholders or creditors or an Indemnified Party or any other Person,
whether or not any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated.
The Borrower also agrees not to assert any claim against the Agent, any
Lender, any of their Affiliates, or any of their respective directors,
officers, employees, attorneys and agents, on any theory of liability,
for special, indirect, consequential or punitive damages arising out of
or otherwise relating to the Notes, this Agreement, any of the
transactions contemplated herein or the actual or proposed use of the
proceeds of the Advances.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account
of a Lender other than on the last day of the Interest Period for such
Advance, as a result of a payment or Conversion pursuant to Section
2.07, 2.08, 2.09, acceleration of the maturity of the Notes pursuant to
Section 6.01 or for any other reason, the Borrower shall, upon demand
by such Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender any amounts required to compensate
such Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment or Conversion, including,
without limitation, any loss, cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.
(d) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in Sections 2.09, 2.11 and 8.04 shall survive the
payment in full of principal, interest and all other amounts payable
hereunder and under the Notes.
SECTION 8.05. Right of Set-off. 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
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specified by Section 6.01 to authorize the Agent to declare the Notes due and
payable pursuant to the provisions of Section 6.01, each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender 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 this Agreement and the Note held by such Lender, whether or not such
Lender shall have made any demand under this Agreement or such Note and although
such obligations may be unmatured. Each Lender agrees promptly to notify the
Borrower after any such set-off and application, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of each Lender under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender may have.
SECTION 8.06. Binding Effect. This Agreement shall become
effective (other than Section 2.01, which shall only become effective upon
satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by the Borrower and the Agent and when the Agent shall
have been notified by each Initial Lender that such Initial Lender has executed
it and thereafter shall be binding upon and inure to the benefit of the
Borrower, the Agent 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 8.07. Assignments and Participations. (a) Each Lender
may, subject to the consent of the Pledgor, assign to one or more Persons all or
a portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it and the
Note or Notes held by it); provided, however, that (i) each such assignment
shall be of a constant, and not a varying, percentage of all rights and
obligations under this Agreement, (ii) except in the case of an assignment to a
Person that, immediately prior to such assignment, was a Lender or an assignment
of all of a Lender's rights and obligations under this Agreement, the amount of
the Commitment or, if no Commitment is remaining, the Advances, of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $10,000,000 or an integral multiple of $5,000,000 in
excess thereof, (iii) each such assignment shall be to an Eligible Assignee, and
(iv) the parties to each such assignment shall execute and deliver to the Agent,
for its acceptance and recording in the Register, an Assignment and Acceptance,
together with any Note subject to such assignment and a processing and
recordation fee of $3,000, payable by the assignor. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, (x) 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 Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor thereunder shall,
to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and
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Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance 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).
(b) By executing and delivering an Assignment and Acceptance,
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 Assignment and Acceptance, 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 this Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency
or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection
with, the Loan Documents or any other instrument or document furnished
pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of any Loan Party or the performance or observance by any
Loan Party of any of its obligations under any Loan Document or any
other instrument or document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of the Loan Documents,
together with copies of the financial statements referred to in Section
4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently
and without reliance upon the Agent, 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 this Agreement; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers
and discretion as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all
of the obligations that by the terms of this Agreement are required to
be performed by it as a Lender.
(c) The Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of
the Advances 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 Agent 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 or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee representing that it is an
Eligible Assignee, together with any Note
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or Notes subject to such assignment, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially
the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower. Within
five Business Days after its receipt of such notice, the Borrower shall
execute and deliver to the Agent in exchange for the surrendered Note a
new Note to the order of such Eligible Assignee in an amount equal to
the Commitment assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained a Commitment hereunder, a new
Note to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Note or Notes shall be in
an aggregate principal amount equal to the aggregate principal amount
of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially
the form of Exhibit A hereto.
(e) Each Lender may sell participations to one or more banks
or other entities in consultation with the Pledgor in or to all or a
portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Advances
owing to it and the Note or Notes held by it); provided, however, that
(i) such Lender's obligations under this Agreement (including, without
limitation, 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 Note for all purposes
of this Agreement, (iv) the Borrower, the Agent 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 and (v) no participant shall have the right to communicate
directly with the Borrower with respect to any amendment or waiver of
any provision of this Agreement or any Note, or any consent to any
departure by the Borrower therefrom.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 8.07, disclose to the assignee or participant or proposed
assignee or participant, any information relating to the Borrower
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 to preserve the
confidentiality of any Confidential Information relating to the
Borrower received by it from such Lender.
(g) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all
or any portion of its rights under this Agreement (including, without
limitation, the Advances owing to it and the Note held by it) in favor
of any Federal Reserve Bank in accordance with Regulation A of the
Board of Governors of the Federal Reserve System.
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SECTION 8.08. Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State of
New York.
SECTION 8.10. 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. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, the Notes or any other Loan Document, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement, the Notes or any other Loan Document in
the courts of any jurisdiction. The Borrower hereby irrevocably appoints CT
Corporation System (the "Process Agent"), with an office on the date hereof at
1633 Broadway, New York, New York 10019, United States, as its agent to receive
on its behalf and its property service of copies of the summons and complaint
and any other process which may be served in any such action or proceeding in
any such New York State or federal court. Such service may be made by mailing or
delivering a copy of such process to the Borrower, in care of the Process Agent
at the Process Agent's above address, and the Borrower hereby irrevocably
authorizes and directs the Process Agent to accept such service on its behalf.
As an alternative method of service, the Borrower also irrevocably consents to
the service of any and all process in any such action or proceeding by the
mailing of copies of such process to the Borrower at its address specified in
Section 8.02. The Borrower agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. In the case of any
legal action brought in Argentina, the Borrower hereby consents to the service
of any and all process in any such action or proceeding at its address specified
in Section 8.02. The Borrower irrevocably consents to the service of any and all
process in any such action or proceeding by sending copies of such process by
mail (by method requiring evidence of receipt) with a second copy to be sent to
the Borrower by courier at its address specified in Section 8.02.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter
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have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement, the Notes and any other Loan
Document in any New York State or federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.
(c) To the extent that the Borrower has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal
process (whether through service of notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property, the Borrower hereby irrevocably
waives such immunity in respect of its obligations under this
Agreement, the Notes and any other Loan Document and, without limiting
the generality of the foregoing, agrees that the waivers set forth in
this subsection (c) shall have the fullest scope permitted under the
Foreign Sovereign Immunities Act of 1976 of the United States and are
intended to be irrevocable for purposes of such Act.
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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.
AZURIX BUENOS AIRES S.A.,
as Borrower
By /s/ Richard G. Jigarjian
Title: Authorized Representative
WESTDEUTSCHE LANDESBANK
GIROZENTRALE,
as Agent
By /s/ Richard R. Newman
Title: Director
By /s/ Duncan M. Robertson
Title: Vice President
40
Initial Lenders
Commitment
- ----------
$394,000,000 WESTDEUTSCHE LANDESBANK
GIROZENTRALE
By /s/ Richard R. Newman
Title: Director
By /s/ Duncan M. Robertson
Title: Vice President
$394,000,000 Total of the Commitments
40
41
SCHEDULE I
LENDING OFFICES
Name of Initial Lender Lending Office
---------------------- --------------
Westdeutsche Landesbank Girozentrale Herzogstr. 15, 40217
Dusseldorf, Germany
42
EXHIBIT A - FORM OF
PROMISSORY NOTE
U.S.$394,000,000 Dated: June 25, 1999
FOR VALUE RECEIVED, the undersigned, Azurix Buenos Aires S.A.,
an Argentine sociedad anonima (the "Borrower"), HEREBY PROMISES TO PAY to the
order of Westdeutsche Landesbank Girozentrale (the "Lender") for the account of
its Lending Office on the Maturity Date (each as defined in the Credit Agreement
referred to below) the principal sum of U.S.$394,000,000 (plus any amounts of
interest capitalized pursuant to Section 2.05(c) of the Credit Agreement dated
as of June 24, 1999 among the Borrower, the Initial Lender and other Lenders
from time to time party thereto, and the Agent for the Initial Lenders and such
other Lenders, (as amended or modified from time to time, the "Credit
Agreement"; the terms defined therein being used herein as therein defined)) or,
if less, the aggregate principal amount of the Advances (plus any amounts of
interest capitalized pursuant to Section 2.05(c)) made by the Lender to the
Borrower pursuant to the Credit Agreement outstanding on the Maturity Date.
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Westdeutsche Landesbank Girozentrale, as Agent, at
The Chase Manhattan Bank, ABA 021- 000-021 for the account of the Lender,
Account No. 001-1-352275, Reference: Azurix Buenos Aires, in same day funds. The
Advance owing to the Lender by the Borrower pursuant to the Credit Agreement,
and all payments made on account of principal thereof, shall be recorded by the
Lender and, prior to any transfer hereof, endorsed on the grid attached hereto
which is part of this Promissory Note.
This Promissory Note is one of the Notes referred to in, and
is entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of the Advance by the Lenders to
the Borrower from time to time in an aggregate amount not to exceed at any time
outstanding the U.S. dollar amount first above mentioned plus any amounts of
interest capitalized pursuant to Section 2.05(c) of the Credit Agreement, the
indebtedness of the Borrower resulting from such Advance being evidenced by this
Promissory Note, and (ii) contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events and also for prepayments on
account of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified. The obligations of the Borrower under this
Promissory Note and the Credit Agreement are secured by the Cash Collateral as
provided in the Loan Documents.
Azurix Buenos Aires S.A.
By
----------------------------
Title:
43
ADVANCES AND PAYMENTS OF PRINCIPAL
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AMOUNT OF
AMOUNT OF PRINCIPAL PAID UNPAID PRINCIPAL NOTATION
DATE ADVANCE OR PREPAID BALANCE MADE BY
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EXHIBIT B - FORM OF
NOTICE OF BORROWING
Westdeutsche Landesbank Girozentrale, as Agent
for the Lenders parties
to the Credit Agreement
referred to below
[Date]
Attention: ____________________
Ladies and Gentlemen:
The undersigned, Azurix Buenos Aires S.A., refers to the
Credit Agreement, dated as of June 24, 1999 (as amended or modified from time to
time, the "Credit Agreement", the terms defined therein being used herein as
therein defined), among the undersigned, certain Lenders parties thereto and
Westdeutsche Landesbank Girozentrale, as Agent for said Lenders and hereby gives
you notice, irrevocably, pursuant to Section 2.02 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 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is June __,
1999.
(ii) The aggregate amount of the Proposed Borrowing is
$394,000,000.
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(A) the representations and warranties contained in Section
4.01 of the Credit Agreement are correct, before and after giving
effect to the Proposed Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date; and
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2
(B) no event has occurred and is continuing, or would result
from such Proposed Borrowing or from the application of the proceeds
therefrom, that constitutes a Default.
Very truly yours,
Azurix Buenos Aires S.A.
By
--------------------------
Title:
46
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of June 24,
1999 (as amended or modified from time to time, the "Credit Agreement") among
Azurix Buenos Aires S.A., an Argentine corporation (the "Borrower"), the Lenders
(as defined in the Credit Agreement). Westdeutsche Landesbank Girozentrale, as
agent for the Lenders (the "Agent"). Terms defined in the Credit Agreement are
used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule I
hereto agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the
Credit Agreement as of the date hereof equal to the percentage interest
specified on Schedule 1 hereto of all outstanding rights and
obligations under the Credit Agreement. After giving effect to such
sale and assignment, the Assignee's Commitment and the amount of the
Advances owing to the Assignee will be as set forth on Schedule 1
hereto.
2. 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 the Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or
security interest created or purported to be created under or in
connection with, the Credit Agreement 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 the performance or observance by the
Borrower of any of its obligations under the Credit Agreement or any
other instrument or document furnished pursuant thereto; and (iv)
attaches the Note held by the Assignor and requests that the Agent
exchange such Note for a new Note payable to the order of the Assignee
in an amount equal to the Commitment assumed by the Assignee pursuant
hereto or new Notes payable to the order of the Assignee in an amount
equal to the Commitment assumed by the Assignee pursuant hereto and the
Assignor in an amount equal to the Commitment retained by the Assignor
under the Credit Agreement, respectively, as specified on Schedule 1
hereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements
referred to in Section 4.01 thereof 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 Acceptance;
(ii) agrees
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that it will, independently and without reliance upon the Agent, 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
Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers and discretion under the Credit
Agreement as are delegated to the Agent by the terms thereof, together
with such powers and discretion as are reasonably incidental thereto;
(v) agrees that it will perform in accordance with their terms all of
the obligations that by the terms of the Credit Agreement are required
to be performed by it as a Lender; and (vi) attaches any U.S. Internal
Revenue Service forms required under Section 2.13 of the Credit
Agreement.
4. Following the execution of this Assignment and Acceptance,
it will be delivered to the Agent for acceptance and recording by the
Agent. The effective date for this Assignment and Acceptance (the
"Effective Date") shall be the date of acceptance hereof by the Agent,
unless otherwise specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and
(ii) the Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations
under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under the
Credit Agreement and the Notes in respect of the interest assigned
hereby (including, without limitation, all payments of principal,
interest and facility fees with respect thereto) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in
payments under the Credit Agreement and the Notes for periods prior to
the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance 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. Delivery of an executed counterpart of Schedule 1 to
this Assignment and Acceptance by telecopier shall be effective as
delivery of a manually executed counterpart of this Assignment and
Acceptance.
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3
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
49
Schedule 1
to
Assignment and Acceptance
Percentage interest assigned: ________%
Assignee's Commitment: $_______________
Aggregate outstanding principal amount of Advances assigned: $_______________
Principal amount of Note payable to Assignee: $_______________
Principal amount of Note payable to Assignor: $_______________
Effective Date: _______________, 199_
[NAME OF ASSIGNOR], as Assignor
By
----------------------------------
Title:
Dated: _______________, 199_
[NAME OF ASSIGNEE], as Assignee
By
----------------------------------
Title:
Lending Office:
[Address]
50
Accepted and Approved this
__________ day of _______________, 199_
Westdeutsche Landesbank Girozentrale, as Agent
By
-----------------------------------
Title:
[Approved this __________ day of _______________, 199_
Azurix Corp.
By
-----------------------------------
Title: