Exhibit 10.1
EXECUTION COPY
_____________________________________________________________________________
CREDIT AGREEMENT
Dated as of July 21, 2005
Among
ALLEGHENY ENERGY SUPPLY COMPANY, LLC,
THE OTHER PERSONS REFERRED TO HEREIN AS LOAN PARTIES,
EACH OF THE LENDERS,
CITICORP NORTH AMERICA, INC.,
as Administrative Agent,
and
CITIBANK, N.A.,
as Collateral Agent and Intercreditor Agent
_______________________________________________________________________
_________________________________________________________________________________________________________
| | | |
| CITIGROUP GLOBAL MARKETS INC., | BANC OF AMERICA SECURITIES LLC,| CREDIT SUISSE, CAYMAN ISLANDS BRANCH,|
| Sole Lead Arranger and Joint | Syndication Agent and | Documentation Agent and Joint |
| Book Runner | Joint Book Runner | Book Runner |
|_________________________________|________________________________|______________________________________|
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.01 Definitions......................................................................2
Section 1.02 Principles of Interpretation....................................................35
Section 1.03 Determination of Material Adverse Change and Material Adverse Effect, Etc.......37
ARTICLE II
ADVANCES AND PAYMENTS
Section 2.01 The Borrowings..................................................................37
Section 2.02 Making the Borrowings...........................................................37
Section 2.03 Interest Elections..............................................................39
Section 2.04 Termination or Reduction of Commitments.........................................40
(a) Mandatory..............................................................40
(b) Optional...............................................................40
Section 2.05 Repayment of Advances...........................................................40
Section 2.06 Prepayments.....................................................................41
(a) Optional...............................................................41
(b) Mandatory..............................................................42
(c) Application of Prepayment Amounts......................................43
(d) Prepayments Generally..................................................44
Section 2.07 Interest........................................................................44
(a) Scheduled Interest.....................................................44
(b) Default Interest.......................................................45
(c) Notice of Interest Period and Interest Rate............................45
Section 2.08 Fees............................................................................45
Section 2.09 Payments Generally; Pro Rata Treatment..........................................45
Section 2.10 Illegality......................................................................47
Section 2.11 Increased Costs.................................................................48
Section 2.12 Taxes...........................................................................49
Section 2.13 Evidence of Debt................................................................52
Section 2.14 Request for Commitments.........................................................52
Section 2.15 Use of Proceeds.................................................................54
ARTICLE III
CONDITIONS OF EFFECTIVENESS
Section 3.01 Conditions Precedent to Closing Date............................................55
Section 3.02 Conditions Precedent to Second Draw Date........................................60
Section 3.03 Determinations Under Section 3.01 and Section 3.02..............................61
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the Borrower..................................61
Section 4.02 Representations and Warranties of the Other Loan Parties........................68
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower...........................................70
(a) Compliance with Laws...................................................70
(b) Compliance with Environmental Laws.....................................70
(c) Governmental Approvals.................................................70
(d) Payment of Taxes, Etc..................................................70
(e) Insurance..............................................................71
(f) Preservation of Corporate Existence, Etc...............................71
(g) Visitation Rights......................................................71
(h) Keeping of Books.......................................................71
(i) Maintenance of Properties, Etc.........................................71
(j) Transactions with Affiliates...........................................71
(k) Further Assurances.....................................................72
(l) Preparation of Environmental Reports...................................72
(m) Compliance with Terms of Leaseholds....................................73
(n) Performance of Material Contracts......................................73
(o) Subsidiaries...........................................................73
(p) Real Property..........................................................74
(q) Taxes..................................................................75
(r) Stamp Duties, Etc......................................................76
(s) Use of Proceeds........................................................76
Section 5.02 Negative Covenants of the Borrower..............................................76
(a) Liens, Etc.............................................................76
(b) Debt...................................................................78
(c) Change in Nature of Business...........................................81
(d) Mergers, Etc...........................................................81
(e) Sales, Etc., of Assets.................................................82
(f) Investments in Other Persons...........................................85
(g) Restricted Payments....................................................87
(h) Payment Restrictions Affecting the Borrower and its Subsidiaries.......88
(i) Sale-Leaseback Obligations.............................................89
(j) Accounting Changes.....................................................89
(k) Prepayments, Etc., of Debt.............................................89
(l) Amendment, Etc., of Material Contracts.................................90
(m) Speculative Transactions...............................................90
(n) Capital Expenditures...................................................90
(o) Compliance with ERISA..................................................91
(p) Formation of Subsidiaries..............................................91
Section 5.03 Financial Covenants of the Borrower.............................................91
(a) Interest Coverage Ratio................................................91
(b) Leverage Ratio.........................................................92
Section 5.04 Reporting Covenants of the Borrower.............................................93
(a) Default Notices........................................................93
(b) Annual Financials......................................................93
(c) Quarterly Financials...................................................94
(d) Budget.................................................................94
(e) Litigation.............................................................94
(f) ERISA..................................................................95
(g) Environmental Conditions...............................................95
(h) Real Property..........................................................95
(i) Insurance..............................................................95
(j) Other Information......................................................96
(k) Emissions Credits......................................................96
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 Events of Default...............................................................97
Section 6.02 Actions Following an Event of Default...........................................99
Section 6.03 Default Interest...............................................................100
ARTICLE VII
REMEDIES AND ENFORCEMENT
Section 7.01 Procedures Following an Event of Default Prior to the Second Draw Date.........100
ARTICLE VIII
THE AGENTS
Section 8.01 Authorization and Action.......................................................102
Section 8.02 Reliance.......................................................................102
Section 8.03 CNAI, CGMI, BofA, CSCI, Citibank and Affiliates................................103
Section 8.04 Lender Credit Decision.........................................................103
Section 8.05 Indemnification................................................................103
Section 8.06 Successor Administrative Agent.................................................104
Section 8.07 Liability......................................................................104
Section 8.08 Compensation of Agents.........................................................104
Section 8.09 Exculpatory Provisions.........................................................105
Section 8.10 Treatment of Lenders...........................................................105
Section 8.11 Miscellaneous..................................................................105
(a) Instructions..........................................................105
(b) No Obligation.........................................................105
Section 8.12 Arranger Parties...............................................................106
ARTICLE IX
MISCELLANEOUS
Section 9.01 Amendments, No Waiver..........................................................106
Section 9.02 Notices, Etc...................................................................108
Section 9.03 No Waiver, Remedies............................................................110
Section 9.04 Indemnity and Expenses.........................................................110
Section 9.05 Right of Set-off...............................................................111
Section 9.06 Binding Effect.................................................................112
Section 9.07 Assignments and Participations.................................................112
Section 9.08 Execution in Counterparts......................................................116
Section 9.09 Jurisdiction, Etc..............................................................116
Section 9.10 Governing Law..................................................................116
Section 9.11 Waiver of Jury Trial...........................................................116
Section 9.12 Confidentiality................................................................116
Section 9.13 Benefits of Agreement..........................................................118
Section 9.14 Severability...................................................................118
Section 9.15 Limitations....................................................................118
Section 9.16 Survival.......................................................................119
Section 9.17 USA Patriot Act Notice.........................................................119
SCHEDULES
Schedule I -........Commitments and Applicable Lending Offices
Schedule 1.01(a) -........Term Mortgages
Schedule 1.01(b) -........Amended and Restated Mortgages
Schedule 1.01(c) -........Controlled Accounts and Operating Accounts
Schedule 1.01(d) -........Operating Agreements
Schedule 4.01(b) -........Subsidiaries
Schedule 4.01(d) -........Approvals and Filings
Schedule 4.01(f) -........Disclosed Litigation
Schedule 4.01(g) -........Disclosed Information
Schedule 4.01(n) -........Certain Environmental Matters
Schedule 4.01(p) -........Owned Real Property
Schedule 4.01(q) -........Leased Real Property
Schedule 4.01(r) -........Material Contract Defaults
Schedule 4.01(s) -........Qualifying Obligations Constituting Surviving Debt
Schedule 4.01(t) -........Existing Liens
Schedule 4.01(u) -........Investments
Schedule 4.01(z) -........Insurance
Schedule 5.01(j) -........Affiliate Transactions
EXHIBITS
Exhibit A -........Form of Assignment and Acceptance
Exhibit B -........Form of Notice of Borrowing
Exhibit C -........Form of Note
Exhibit D -........Form of Assumption and Joinder Agreement
Exhibit E -........Form of SIA Amendment
Exhibit F -........Real Property Requirements
Exhibit G -........Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
Exhibit H -........Form of Opinion of Hunton & Williams LLP
CREDIT AGREEMENT
CREDIT AGREEMENT (this "Agreement") dated as of July 21, 2005
made by and among:
ALLEGHENY ENERGY SUPPLY COMPANY, LLC, a Delaware limited
liability company (the "Borrower");
Each of the Persons (as hereinafter defined) (other than the
Borrower) listed on the signature pages hereto as a "Loan Party" (the Borrower
and the Persons so listed being, collectively, the "Loan Parties");
Each of the institutions listed on the signature pages hereto
as an "Initial Lender" (the "Initial Lenders") and each other Lender (as
hereinafter defined);
CITICORP NORTH AMERICA, INC. ("CNAI"), not in its individual
capacity except as expressly set forth herein but solely as administrative
agent for the Lenders (together with any successor administrative agent
appointed pursuant to Section 8.06 of this Agreement, the "Administrative
Agent"); and
CITIBANK, N.A. ("Citibank"), not in its individual capacity
except as expressly set forth herein but solely as (a) collateral agent under
the Security Agreement (as hereinafter defined) (together with any successor
collateral agent appointed pursuant to Article VII of the Security Agreement,
the "Collateral Agent") and (b) intercreditor agent (together with any
successor intercreditor agent appointed pursuant to Article VII of the Security
Agreement, the "Intercreditor Agent") for the Secured Parties (as hereinafter
defined).
PRELIMINARY STATEMENTS
(1) The Borrower is indebted to certain banks and
financial institutions (the "Existing Lenders") pursuant to that certain
Amended and Restated Credit Agreement, dated as of February 21, 2003, as
amended and restated in its entirety on March 8, 2004 and as further amended
and restated in its entirety on October 28, 2004 (as amended through the date
hereof, the "Existing Credit Agreement"), among the Borrower, the other persons
referred to therein as loan parties, the financial institutions party thereto
as lenders, CNAI, as administrative agent, and Citibank, as collateral agent
and intercreditor agent.
(2) The Borrower has requested that the Initial Lenders
establish a senior secured term credit facility in the aggregate amount of
$1,069,000,000 in favor of the Borrower, and the Initial Lenders have indicated
their willingness to provide such financing to the Borrower on the terms and
conditions set forth in this Agreement and the other Financing Documents (as
hereinafter defined).
(3) The proceeds of the Facility (as hereinafter
defined) shall be used (a) on the Closing Date (as hereinafter defined), to
refinance the aggregate principal amount outstanding under the Existing Credit
Agreement and (b) on the Second Draw Date (as hereinafter defined), to
refinance the aggregate principal amount outstanding under the Senior Secured
Notes (as hereinafter defined).
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 INTERPRETATION
Section 1.01 Definitions. As used in this Agreement, unless
otherwise indicated the following terms shall have the following
meanings:
"1940 Act" means the Investment Company Act of 1940, as
amended.
"Acceleration Notice" has the meaning specified in Section
7.01(a)(2).
"Accepting Lender" has the meaning specified in Section
2.06(c)(iii).
"Accession Agreement" has the meaning specified in the
Security Agreement.
"Account Control Agreement" has the meaning set forth in the
Security Agreement.
"Acquired Material Property" has the meaning specified in
Section 5.04(h).
"Act" has the meaning specified in Section 9.17.
"Additional Loan Party" has the meaning specified in Section
5.01(o)(ii).
"Administrative Agent" has the meaning specified in the
recital of the parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with
Citibank, N.A. at its office at 399 Park Avenue, New York, New York
(ABA No. 021000089), Account No. 36852248, Reference: Allegheny Energy
Supply Company, LLC Term C Facility, or such other account as the
Administrative Agent shall specify in writing to the Lenders.
"Advance" has the meaning specified in Section 2.01.
"Advances Prepayment Amount" has the meaning specified in
Section 2.06(c)(i).
"AES Gleason" means Allegheny Energy Supply Gleason
Generating Facility, LLC.
"AES Wheatland" means Allegheny Energy Supply Wheatland
Generating Facility, LLC.
"AESC Hunlock Creek" means Allegheny Energy Supply Company
Hunlock Creek, LLC.
"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 10% or more of the Voting Interests of such Person or to direct
or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Interests, by contract or
otherwise.
"Affiliate Energy Contracts" means, collectively, (a) the
Power Sales Agreement between PEC and the Borrower for Maryland dated
January 1, 2001, as supplemented by the Memorandum of the Operating
Committee dated October 1, 2001, Amendment No. 1 to the Memorandum of
the Operating Committee effective January 1, 2002, Amendment No. 2 to
the Memorandum of the Operating Committee effective January 1, 2003,
Amendment No. 3 to the Memorandum of the Operating Committee effective
January 1, 2004, Amendment No. 4 to the Memorandum of the Operating
Committee effective August 1, 2004 and Amendment No. 5 to the
Memorandum of the Operating Committee, dated January 1, 2005; (b) the
Power Sales Agreement between PEC and the Borrower for Virginia dated
January 1, 2001, as supplemented by the Memorandum of the Operating
Committee dated October 1, 2001, Amendment No. 1 to the Memorandum of
the Operating Committee effective January 1, 2002, Amendment No. 2 to
the Memorandum of the Operating Committee effective January 1, 2003,
Amendment No. 3 to the Memorandum of the Operating Committee effective
January 1, 2004 and Amendment No. 4 to the Memorandum of the Operating
Committee effective August 1, 2004; (c) the Facilities Lease Agreement
between PEC and the Borrower for West Virginia dated August 1, 2000,
the Lease Agreement extension dated March 14, 2003, and the Service
Agreement between PEC and the Borrower for West Virginia dated August
1, 2000; (d) the Power Sales Agreement between WPPC and the Borrower
for Pennsylvania dated January 1, 2001, as supplemented by the
Memorandum of the Operating Committee dated August 1, 2001, Amendment
No. 1 to the Memorandum of the Operating Committee effective January
1, 2002, Amendment No. 2 to the Memorandum of the Operating Committee
effective January 1, 2003, Amendment No. 3 to the Memorandum of the
Operating Committee effective January 1, 2004, Amendment No. 4 to the
Memorandum of the Operating Committee effective August 1, 2004 and
Amendment No. 5 to the Memorandum of the Operating Committee, dated
October 1, 2005; (e) the Facilities Lease Agreement between MPC and
the Borrower for Ohio dated June 1, 2001; and (f) the Power Sales
Agreement between MPC and the Borrower for Ohio dated June 1, 2001, as
supplemented by the Memorandum of the Operating Committee dated August
1, 2001, Amendment No. 1 to the Memorandum of the Operating Committee
effective January 1, 2002, Amendment No. 2 to the Memorandum of the
Operating Committee effective January 1, 2003, Amendment No. 3 to the
Memorandum of the Operating Committee effective January 1, 2004,
Amendment No. 4 to the Memorandum of the Operating Committee effective
August 1, 2004 and Amendment No. 5 to the Memorandum of the Operating
Committee, dated January 1, 2005.
"Affiliate Subordination Terms" means, with respect to any
Debt or other Obligations owed by the Borrower or any of its
Subsidiaries to any Affiliate thereof, that such Debt is either (a)
subject to the terms set forth in Section 9.03 of the Security
Agreement or (b) subject to an agreement which subordinates such Debt
to the Obligations owed in respect of the Advances on identical terms
to those set forth in Section 9.03 of the Security Agreement.
"AGC" means Allegheny Generating Company, a Virginia
corporation.
"Agent Parties" has the meaning specified in Section 9.02(d).
"Agents" means the Administrative Agent, the Intercreditor
Agent and the Collateral Agent.
"Agreement" has the meaning specified in the recital of the
parties to this Agreement.
"Agreement Value" means, for each Hedge Agreement, on any
date of determination, an amount determined by the Borrower in good
faith equal to: (a) in the case of a Hedge Agreement documented
pursuant to the Master Agreement (as defined in the definition of a
"Hedge Agreement"), the amount, if any, that would be payable by the
Borrower or any of its Subsidiaries to its counterparty to such Hedge
Agreement pursuant to the terms of such Hedge Agreement, as if (i)
such Hedge Agreement was being terminated early on such date of
determination, (ii) the Borrower or such Subsidiary was the sole
"Affected Party", and (iii) the Borrower or such Subsidiary was the
sole party determining such payment amount (with the Borrower making
such determination pursuant to the provisions of the Master Agreement
or the Hedge Agreement (whichever is applicable)); or (b) in the case
of a Hedge Agreement traded on an exchange, the mark-to-market value
of such Hedge Agreement, which will be the unrealized loss on such
Hedge Agreement (after any netting permitted pursuant to the terms of
such Hedge Agreement (including any netting across different Hedge
Agreements and Master Agreements to the extent permitted by contract))
to the Borrower or any of its Subsidiaries party to such Hedge
Agreement, if any, determined by the Borrower in good faith based on
the settlement price of such Hedge Agreement on such date of
determination, or (c) in all other cases, the mark-to-market value of
such Hedge Agreement, which will be the unrealized loss on such Hedge
Agreement (after any netting permitted pursuant to the terms of such
Hedge Agreement (including any netting across different Hedge
Agreements and Master Agreements to the extent permitted by contract))
to the Borrower or any of its Subsidiaries party to such Hedge
Agreement, if any, as determined by the Borrower in good faith in
accordance with the terms of such Hedge Agreement or, if such Hedge
Agreement does not provide a methodology for such determination, the
amount, if any, by which (i) the present value of the future cash
flows to be paid by the Borrower or any of its Subsidiaries party
thereto, as the case may be, exceeds (ii) the present value of the
future cash flows to be received by the Borrower or such Subsidiary,
as the case may be, pursuant to such Hedge Agreement; capitalized
terms used and not otherwise defined in this definition shall have the
respective meanings set forth in the above described Master Agreement.
"ALTA Survey" means a fully paid American Land Title
Association/American Congress on Surveying and Mapping form survey.
"Amended and Restated Mortgages" means the deeds of trust,
trust deeds and mortgages set forth on Schedule 1.01(b).
"Amendment Fee" means any fee offered, paid or payable to any
Lender by the Borrower or any Affiliate of the Borrower (whether
directly or through any Agent or any other Person) in consideration
for any waiver of, or agreement to amend or modify any provision of,
any of the Financing Documents.
"Applicable Law" means, with respect to any Person, any and
all laws, statutes, regulations, rules, orders, injunctions, decrees,
writs, determinations, awards and judgments issued by any Governmental
Authority applicable to such Person, including all Environmental Laws.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a Base
Rate Advance and such Lender's Eurodollar Lending Office in the case
of a Eurodollar Rate Advance.
"Applicable Margin" means 0.75% per annum for Base Rate
Advances and 1.75% per annum for Eurodollar Rate Advances; provided
that if at any time the Borrower's Senior Secured Debt Rating from (i)
S&P shall be "BB" or higher and Moody's shall be "Ba1" or higher, or
(ii) S&P shall be "BB+" or higher and Moody's shall be "Ba2" or
higher, "Applicable Margin" shall mean 0.50% per annum for Base Rate
Advances and 1.50% per annum for Eurodollar Rate Advances.
"Approved Fund" means a Fund that is administered or managed
by (a) a Lender, (b) an Affiliate of a Lender or (c) a Person or an
Affiliate of a Person that administers or manages a Lender.
"Armstrong Facility" means the Armstrong generating facility
located near Adrian, Pennsylvania in Armstrong County, Pennsylvania
and owned by the Borrower.
"Arranger Parties" means Citigroup Global Markets Inc.
("CGMI"), as Lead Arranger and Joint Book Runner, Banc of America
Securities LLC ("BofA"), as Syndication Agent and Joint Book Runner,
and Credit Suisse, Cayman Islands Branch ("CSCI"), as Documentation
Agent and Joint Book Runner.
"Asset Sale" means any Sale of any Asset (including, without
limitation, Emissions Credits) by the Borrower or any of its
Subsidiaries to any Person other than the Borrower or any of its
Subsidiaries, other than (a) Sales of Emission Credits in the ordinary
course of business to the extent that the Net Cash Proceeds received
by the Borrower and its Subsidiaries therefrom are less than or equal
to $40,000,000 in the aggregate in any fiscal year of the Borrower and
such Sale does not contravene the terms of Section 5.02(e)(ii) and (b)
Sales pursuant to clause (i), (iii), (iv), (vii), (viii), (ix), (x),
(xi) or (xii) of Section 5.02(e).
"Assets" means, with respect to any Person, all or any part
of its business, property, rights, interests and assets, both tangible
and intangible (including Equity Interests in any Person), wherever
situated.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an Eligible Assignee, and
accepted by the Administrative Agent, in accordance with Section 9.07
and in substantially the form of Exhibit A.
"Assumption and Joinder Agreement" means an assumption and
joinder agreement executed by any Subsidiary of the Borrower pursuant
to Section 5.01(o) and in substantially the form of Exhibit D.
"AYE Money Pool" means the internal financing facility of the
Parent and certain of its Subsidiaries in which the excess funds of
certain participants are used to satisfy the short-term borrowing
needs of other participants.
"Authorized Signatory" means, with respect to any Person, the
individual, or any of the individuals, authorized to sign any
Financing Document, as well as any other agreements, to which such
Person is or is to be a party and give written instructions on behalf
of such Person with regard to any matters pertaining to any Financing
Document to which such Person is or is to be a party (as identified on
an incumbency certificate submitted to the Administrative Agent and
the Collateral Agent from time to time prior to the receipt of any
instructions from such Authorized Signatory).
"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
Citibank in New York, New York, from time to time, as
Citibank's base rate; and
(b) the Federal Funds Rate plus 0.5%.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(i).
"Bingamon Creek Property" means the 34-acre property located
in Harrison County, West Virginia and owned by the Borrower and MPC,
but excluding any related personal property the creation, granting or
perfection of a Lien upon or in which is governed by the UCC.
"BofA" has the meaning specified in the definition of the
term "Arranger Parties".
"Bond Instruments" means (a) the Existing Indentures, (b) the
Indenture dated as of December 1, 1986 between AGC, as issuer, and
U.S. Bank Trust, National Association (successor trustee to Morgan
Guaranty Trust Company of New York), as trustee and (c) the Pollution
Control Bond Indentures.
"Borrower" has the meaning specified in the recital of
parties to this Agreement.
"Borrower's Account" means the account of the Borrower
specified by the Borrower in writing to the Administrative Agent from
time to time.
"Borrowing" means a borrowing consisting of simultaneous
Advances of the same Type, made by the Lenders.
"Buffalo Reserve Project" means the development of property
and mineral rights in Washington County, Commonwealth of Pennsylvania,
including (a) the formation of a legal entity to pursue the
development of such property and mineral rights, and (b) the entering
into operating agreements, joint venture agreements, partnership
agreements, working interests, royalty interests, mineral leases,
processing agreements, contracts for sale, transportation or exchange
agreements, unitization agreements, pooling agreements, area of mutual
interest agreements, production sharing agreements or other similar or
customary agreements, transactions, interests or arrangements, and
Investments and expenditures in connection with the development of
such property and mineral rights.
"Business Day" means a day of the year on which banks are not
required or not authorized by law to close in New York City and, if
the applicable Business Day relates to any Eurodollar Rate Advances,
on which dealings are carried on in the London interbank market.
"Capital Expenditures" means, for any Person for any period,
the sum of, without duplication, all expenditures made, directly or
indirectly, by such Person during such period (whether financed by
cash or by Debt (including Obligations under Capitalized Leases)
assumed or incurred to fund, directly or indirectly, such
expenditures) for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or
additions thereto, that have been or should be, in accordance with
GAAP, reflected as additions to property, plant or equipment on a
balance sheet of such Person. For purposes of this definition, the
purchase price of equipment that is purchased simultaneously with the
trade-in of existing equipment or with insurance proceeds shall be
included in Capital Expenditures only to the extent of the excess (if
any) of the gross amount of such purchase price over the credit
granted by the seller of such equipment for the equipment being traded
in at such time or the amount of such proceeds, as the case may be.
"Capitalized Leases" means all leases that have been or
should be, in accordance with GAAP, recorded as capitalized leases.
"Cash Equivalents" means any of the following, to the extent
owned by the Borrower or any of its Subsidiaries free and clear of all
Liens other than Liens created under the Collateral Documents and,
except in the case of clause (d) below, having a maturity of not
greater than one year from the date of issuance thereof: (a) 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, (b) certificates of deposit, time
deposits, eurodollar deposits and bankers acceptances with any
commercial bank that is an Agent or Lender or a member of the Federal
Reserve System, is organized under the laws of the United States or
any State thereof and has combined capital and surplus of at least
$500,000,000; provided that the aggregate principal amount of
certificates of deposit, time deposits, eurodollar time deposits and
bankers acceptances of any one bank shall not exceed $50,000,000 at
any one time, (c) commercial paper in an aggregate amount of no more
than $50,000,000 per issuer outstanding at any time, issued by any
corporation organized under the laws of any State of the United States
and rated at least "Prime-1" (or the then equivalent grade) by Moody's
or "A-1" (or the then equivalent grade) by S&P, or (d) with respect to
any Pledged Account, Controlled Account or Operating Account,
investments in any mutual fund the sole investments of which are the
cash equivalents identified in clauses (a) through (c) above (but with
a remaining maturity of not greater than 13 months while being held by
the applicable mutual fund) or (e) repurchase obligations for any of
the cash equivalents identified in clause (a) above.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"CGMI" has the meaning specified in the definition of the
term "Arranger Parties".
"Change of Control" means the occurrence of any of the
following: (a) the Parent shall cease to own all issued and
outstanding Equity Interests in the Borrower other than the ML
Interests; (b) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934), directly or indirectly, of Voting Interests of
the Parent (or other securities convertible into such Voting
Interests) representing 40% or more of the combined voting power of
all Voting Interests of the Parent; (c) during any period of up to 24
consecutive months, commencing before or after the date of this
Agreement, individuals who at the beginning of such 24-month period
were directors of the Parent (the "Original Directors") shall cease
for any reason to constitute a majority of the board of directors of
the Parent (unless replaced by individuals nominated or proposed by
the Original Directors); or (d) any Person or two or more Persons
acting in concert shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of the power to
exercise, directly or indirectly, a controlling influence over the
management or policies of the Parent.
"Chief Financial Officer" of any Person means such Person's
chief financial officer or such other natural person who is
principally responsible for such Person's financial matters.
"Citibank" has the meaning specified in the recital of the
parties to this Agreement.
"Closing Date" has the meaning specified in Section 3.01(a).
"Closing Date Transactions" has the meaning specified in
Section 3.01(a)(xvi).
"CNAI" has the meaning specified in the recital of the
parties to this Agreement.
"Collateral" has the meaning specified in the Security
Agreement.
"Collateral Agent" has the meaning specified in the recital
of the parties to this Agreement.
"Collateral Documents" means the Security Agreement, the SIA
Amendment, the Mortgages, the Consents, the Account Control Agreements
and any other agreement that creates or purports to create a Lien in
favor of the Collateral Agent for the benefit of the Secured Parties
or that acknowledges the creation of such a Lien.
"Commitment" means, with respect to any Lender at any time,
(a) the amount set forth opposite such Lender's name on Schedule I
under the caption "Commitment," or, (b) if such Lender has entered
into one or more Assignment and Acceptances on or prior to such time,
set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 9.07(d) as such Lender's
"Commitment", in each case, as such amount may be reduced at or prior
to such time pursuant to Section 2.04 or 6.01.
"Commitment Effective Date" has the meaning specified in
Section 2.14(b).
"Communications" has the meaning specified in Section
9.02(b).
"Conemaugh" means Allegheny Energy Supply Conemaugh, LLC.
"Confidential Information" has the meaning specified in
Section 9.12(a).
"Consents" has the meaning specified in the Security
Agreement.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Consolidated EBITDA" means, for any period, Consolidated Net
Income for such period plus (a) without duplication and to the extent
deducted in determining such Consolidated Net Income, the sum of (i)
Consolidated Interest Expense for such period, (ii) consolidated
income tax expense for such period, (iii) all amounts attributable to
minority interests and to depreciation and amortization for such
period (including amortization of Debt issuance costs), (iv) any
extraordinary or non-recurring non-cash charges (including the
write-down of non-current assets) or any gains for such period, (v)
any non-cash goodwill or other intangible asset impairment charges
resulting from the application of Statement Number 142 or Statement
Number 144 of the Financial Accounting Standards Board, (vi) any
non-recurring expenses or non-cash charges incurred in connection with
the Transactions and (vii) any non-cash compensation charges,
including any such charges arising from stock options, restricted
stock grants and other equity incentive programs; provided that to the
extent that all or any portion of the net income of any Subsidiary of
the Borrower or any other Person is excluded from Consolidated Net
Income pursuant to the definition thereof for all or any portion of
such period any amounts set forth in the preceding clauses (i) through
(vii) that are attributable to such Subsidiary or other Person shall
not be included for purposes of this clause (a) for such period or
portion thereof, and minus (b) without duplication (i) all cash
payments made during such period on account of reserves, restructuring
charges and other non-cash charges added to Consolidated Net Income
pursuant to clause (a) above after the Closing Date and (ii) to the
extent included in determining such Consolidated Net Income, any
extraordinary gains and all non-cash items of income for such period,
all determined on a consolidated basis in accordance with GAAP;
provided that for purposes of calculating Consolidated EBITDA for any
period for purposes of the covenants set forth in Section 5.03, (A)
the Consolidated EBITDA of any Investment made or Subsidiary acquired
by the Borrower or any Subsidiary in accordance with the terms of this
Agreement during such period for which aggregate consideration paid by
the Borrower or any of its Subsidiaries shall be equal to or greater
than $25,000,000 shall be included on a pro forma basis for such
period (assuming the consummation of such acquisition and the
incurrence or assumption of any Debt in connection therewith occurred
as of the first day of such period), and (B) the Consolidated EBITDA
of any Person or line of business sold or otherwise disposed of by the
Borrower or any of its Subsidiaries during such period for which the
aggregate consideration received by the Borrower or any of its
Subsidiaries shall be equal to or greater than $25,000,000 shall be
excluded for such period (assuming the consummation of such sale or
other disposition and the repayment of any Debt in connection
therewith occurred as of the first day of such period).
"Consolidated First Lien Secured Debt" means, as of any date
of determination and, without duplication, for the Borrower and its
Subsidiaries on a Consolidated basis, the sum of the principal amount
of all outstanding Debt for Borrowed Money owed by the Borrower and
its Subsidiaries on such date which Debt is purported to be secured by
a first priority Lien over any of the Assets of the Borrower or any of
its Subsidiaries as of such date of determination, including, without
limitation, the Secured Obligations and Obligations owed by the
Borrower and its Subsidiaries under the Pollution Control Bonds.
"Consolidated Interest Expense" means, for any period, (a)
the sum of, without duplication, (i) the interest expenses (including
imputed interest expense in respect of Capitalized Leases) of the
Borrower and its Subsidiaries for such period (including all
commissions, discounts and other fees and charges owed by the Borrower
and its Subsidiaries with respect to letters of credit and bankers'
acceptance financing), net of interest income, in each case determined
on a consolidated basis in accordance with GAAP, plus (ii) any
interest accrued during such period in respect of Debt of the Borrower
or any of its Subsidiaries that is required to be capitalized rather
than included in consolidated interest expenses for such period in
accordance with GAAP, minus (b) to the extent included in such
consolidated interest expense for such period, amounts attributable to
the amortization of financing costs and non-cash amounts attributable
to the amortization of debt discounts. For purposes of the foregoing,
interest expense shall be determined after giving effect to any net
payments made or received by the Borrower or any of its Subsidiaries
with respect to interest rate Hedge Agreements which are included as
interest expense in accordance with GAAP.
"Consolidated Net Income" means, for any period, the net
income or loss before cumulative effect in change of accounting
principles of the Borrower and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided
that there shall be excluded (a) the income of any Subsidiary of the
Borrower to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary of that income is not, as a
result of any Subsidiary Debt Default, at the time permitted by
operation of the terms of the agreement or other documents governing
the Debt under which such Subsidiary Debt Default shall have occurred;
provided that such income of such Subsidiary shall only be so excluded
for that portion of such period during which the condition described
in this clause (a) shall so exist; (b) the income or loss of any
Person accrued prior to the date it becomes a Subsidiary or is merged
or Consolidated with the Borrower or any Subsidiary on the date such
Person's Assets are acquired by the Borrower or any Subsidiary; (c)
the income or loss of any Person (other than a Subsidiary) in which
any other Person (other than the Borrower or a wholly owned Subsidiary
of the Borrower) has an interest, except to the extent of the amount
of dividends or other distributions actually paid to the Borrower or a
wholly owned Subsidiary by such Person during such period; (d) any
gains or losses attributable to sales of Assets out of the ordinary
course of business; and (e) any gains or losses attributable to
interest rate Hedge Agreements which are not included as interest
expense in accordance with GAAP.
"Constituent Documents" means, with respect to any Person,
(a) the articles or certificate of incorporation or other similar
organizational document of such Person, (b) the by-laws or other
similar document of such Person, (c) any certificate of designation or
instrument relating to the rights of holders (including preferred
shareholders) of Equity Interests in such Person and (d) any
shareholder rights agreement or other similar agreement.
"Contest" means, with respect to the payment of Taxes or any
other claims or liabilities by any Person, to contest the validity or
amount thereof in good faith by appropriate proceedings timely
instituted and diligently pursued within the applicable statutory
period and in accordance with Applicable Law; provided that the
following conditions are satisfied: (a) such Person has posted a bond
or other security in accordance with Applicable Law (if required) or
has established adequate reserves with respect to the contested items
in accordance with, and to the extent required by, GAAP; (b) during
the period of such contest, the enforcement of any contested item is
effectively stayed; (c) neither such Person nor any of its officers,
directors or employees nor any Secured Party or its respective
officers, directors or employees is, or could reasonably be expected
to become, subject to any criminal liability or sanction in connection
with such contested items; and (d) no Lien relating to such contest
attaches to any Assets of such Person and becomes enforceable against
other creditors of such Person.
"Contingent Obligation" means, with respect to any Person,
any Obligation or arrangement of such Person to guarantee or intended
to guarantee any Debt, leases, dividends or other payment Obligations
("primary obligations") of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, including (a) the direct
or indirect guarantee, endorsement (other than for collection or
deposit in the ordinary course of business), co-making, discounting
with recourse or sale with recourse by such Person of the Obligation
of a primary obligor, (b) the Obligation to make take-or-pay or
similar payments, if required, regardless of nonperformance by any
other party or parties to an agreement or (c) any Obligation of such
Person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (A) for the purchase or
payment of any such primary obligation or (B) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase Assets, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made (or, if less, the maximum
amount of such primary obligation for which such Person may be liable
pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is
required to perform thereunder), as determined by such Person in good
faith.
"Continuation", "Continue" and "Continued" each refer to a
continuation of Eurodollar Rate Advances upon the expiration of the
Interest Period therefor as Eurodollar Rate Advances of the same or a
different Interest Period pursuant to Section 2.03.
"Controlled Account" has the meaning specified in the
Security Agreement.
"Conversion", "Convert" and "Converted" each refer to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.03, 2.10 or 2.11.
"Covered Taxes" has the meaning specified in Section 2.12(a).
"CSCI" has the meaning specified in the definition of the
term "Arranger Parties".
"Deadlock Notice" has the meaning specified in Section
7.01(a)(3).
"Debt" of any Person (the "obligor") means, without
duplication, (a) all Obligations of such obligor for or in respect of
moneys borrowed or raised (whether or not for cash by whatever means
(including acceptances, deposits, discounting, letters of credit,
factoring (other than on a non-recourse basis))), and any other form
of financing which is recognized in accordance with GAAP in the
obligor's financial statements as being in the nature of a borrowing
or is treated as "off-balance" sheet financing; (b) all Obligations of
the obligor evidenced by notes, bonds, debentures or other similar
instruments issued in connection with accounts payable excluded
pursuant to the parenthetical in clause (c) below; (c) all Obligations
of the obligor for the deferred purchase price of property or services
(other than accounts payable within 90 days of being incurred arising
in the ordinary course of such obligor's business and not more than 90
days past due and not subject to a Contest); (d) all Obligations of
such obligor under conditional sale or other title retention
agreements relating to Assets acquired by such obligor (even though
the rights and remedies of the seller or lender under such agreement
in the event of default are limited to repossession or sale of such
property); (e) all Obligations of such obligor under any
securitization or monetization arrangement; (f) all Obligations of
such obligor as lessee under Capitalized Leases; (g) all Obligations
of the obligor, contingent or otherwise, of the obligor under
acceptance, letter of credit or similar facilities other than as
issued (i) in connection with Obligations excluded pursuant to clause
(b) above or the parenthetical in clause (c) above or (ii) as credit
support for leases other than Capitalized Leases; (h) all Obligations
of the obligor to purchase, redeem, retire, defease or otherwise make
any payments in respect of any Equity Interests in the obligor or any
other Person or any warrants, rights or options to acquire such
capital stock, valued, in the case of Redeemable Preferred Interests,
at the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends; (i) all Obligations of the obligor
in respect of Hedge Agreements; (j) all Contingent Obligations of the
obligor with respect to Debt; and (k) all indebtedness and other
payment Obligations referred to in clauses (a) through (j) above of
another Person secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) any Lien on
property (including accounts and contract rights owned by the
obligor), even though the obligor has not assumed or become liable for
the payment of such indebtedness or other payment Obligations.
"Debt for Borrowed Money" means Debt of the types specified
in (i) clauses (a), (b), (d), (e) and (f) of the definition of Debt
and (ii) to the extent relating to Debt of the types specified in one
or more of clauses (a), (b), (d), (e) and (f) of the definition of
Debt, clauses (j) and (k) thereof.
"Debt Issuance" means any incurrence or issuance of Debt for
Borrowed Money by the Borrower or any of its Subsidiaries, other than
any Debt permitted to be incurred under Section 5.02(b).
"Decision Period" means, with respect to any decision to be
made for purposes of Section 7.01, the period commencing on the date
of the Notice of Default related thereto and ending ten Business Days
after the date of such Notice of Default; provided that if any of the
Lenders shall require any extension of time to make any such decision,
such Person may, upon written notice to the Administrative Agent
within the Decision Period specified in the notice of the
Administrative Agent delivered thereunder, extend such Decision Period
for such Person for an additional period of time as specified in such
notice; provided further that any such extension shall not exceed ten
Business Days beyond the final date of the original Decision Period.
"Declining Lender" has the meaning specified in Section
2.06(c)(iii).
"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.
"Disclosed Litigation" has the meaning specified in Section
3.01(b).
"Disclosed Matters" means the occurrence of any event in
respect of, or effect upon the business, condition (financial or
otherwise), operations, performance, properties, assets, liabilities
(actual or contingent) results of operation or prospects of the
Borrower or the Borrower and its Subsidiaries, taken as a whole, which
has been disclosed (a) pursuant to a public filing by the Parent with
the SEC or (b) in writing to the Administrative Agent.
"Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office"
beneath such Lender's signature to this Agreement or in the Assignment
and Acceptance pursuant to which it became a Lender, as the case may
be, or such other office of such Lender as such Lender may from time
to time specify to the Borrower and the Administrative Agent.
"Eligible Assignee" means, with respect to any Lender, (i)
any other Lender; (ii) an Affiliate of a Lender; (iii) an Approved
Fund; (iv) a commercial bank organized under the laws of the United
States, or any State thereof, and having a combined capital and
surplus of at least $500,000,000; (v) a savings and loan association
or savings bank organized under the laws of the United States, or any
State thereof, and having a combined capital and surplus of at least
$500,000,000; (vi) a commercial bank organized under the laws of any
other country that is a member of the OECD or has concluded special
lending arrangements with the International Monetary Fund associated
with its General Arrangements to Borrow or a political subdivision of
any such country, and having a combined capital and surplus of at
least $500,000,000, so long as such bank is acting through a branch or
agency located in the country in which it is organized or another
country that is described in this clause (vi); (vii) the central bank
of any country that is a member of the OECD; (viii) a 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 a combined capital and
surplus of at least $500,000,000 (or, in the case of a fund, being
managed or administered by a Person that manages or administers funds
having a combined capital and surplus of at least $500,000,000); or
(ix) any other Person approved by the Administrative Agent and, so
long as no Default or Event of Default shall have occurred and be
continuing, the Borrower, such approval, in either case, not to be
unreasonably withheld or delayed; provided that neither the Borrower
nor any Affiliate of the Borrower shall qualify as an Eligible
Assignee under this definition.
"Emissions Credits" means the emissions limitations which:
(a) are issued by environmental Governmental Authorities; (b)
authorize the emission of a fixed amount of pollutants; and (c) are
utilized as a market-based mechanism for reducing pollution.
"Environmental Action" means any action, suit, demand letter,
claim by any Governmental Authority, notice of non-compliance or
violation, notice of liability or potential liability, investigation,
proceeding, consent order or consent agreement relating to any
Environmental Law, Environmental Permit or Hazardous Material or
arising from alleged injury or threat to health and safety or the
environment relating to any Environmental Law, including (a) by any
governmental or regulatory authority for enforcement, cleanup,
removal, response, remedial or other actions or damages and (b) by any
governmental or regulatory authority or third party for damages,
contribution, indemnification, cost recovery, compensation or
injunctive relief.
"Environmental Law" means any Federal, state, local or
foreign statute, law, ordinance, rule, regulation, code, order, writ,
judgment, injunction, decree or legally binding judicial or agency
interpretation, policy or guidance relating to pollution or protection
of the environment, health and safety as it relates to Hazardous
Materials or natural resources, including those relating to the use,
handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
"Equity Interests" means, with respect to any Person, shares
of capital stock of (or other ownership or profit interests in) such
Person, warrants, options or other rights for the purchase or other
acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, non-Debt securities
convertible into or exchangeable for shares of capital stock of (or
other ownership or profit interests in) such Person, warrants, rights
or options for the purchase or other acquisition from such Person of
such shares (or such other interests), and other ownership or profit
interests in such Person (including partnership, member or trust
interests therein), whether voting or nonvoting, and whether or not
such shares, warrants, options, rights or other interests are
authorized or otherwise existing on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated
and rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title
IV of ERISA is a member of the controlled group of the Borrower or any
of its Subsidiaries, or under common control within the meaning of
Section 414 of the Internal Revenue Code, with the Borrower or any of
its Subsidiaries.
"ERISA Event" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043(c) of ERISA, with respect to
any Plan unless the 30-day notice requirement with respect to such
event has been waived by the PBGC or (ii) the requirements of Section
4043(b) of ERISA apply with respect to a contributing sponsor, as
defined in Section 4001(a)(13) of ERISA, of a Plan, and an event
described in paragraph (9), (10), (11), (12) or (13) of Section
4043(c) of ERISA is reasonably expected to occur with respect to such
Plan within the following 30 days; (b) the application for a minimum
funding waiver in accordance with Section 412(d) of the Internal
Revenue Code with respect to a Plan; (c) the provision by the
administrator of any Plan of a notice of intent to terminate such
Plan, pursuant to Section 4041(a)(2) of ERISA (including any such
notice with respect to a plan amendment referred to in Section 4041(e)
of ERISA); (d) the cessation of operations at a facility of the
Borrower or any of its Subsidiaries or any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA; (e) the
withdrawal by the Borrower or any of its Subsidiaries or any ERISA
Affiliate from a Multiple Employer Plan during a plan year for which
it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (f) a lien has been imposed under Section 302(f) of ERISA with
respect to any Plan; (g) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to Section
307 of ERISA; or (h) the institution by the PBGC of proceedings to
terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence
of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a
trustee to administer, such Plan, provided, however, that the
occurrence of the event or condition described in Section 4042(a)(4)
of ERISA shall be an ERISA Event only if the PBGC has notified the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate that
it intends to institute proceedings to terminate a Plan pursuant to
such Section.
"Eurocurrency Liabilities" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Eurodollar Lending
Office" beneath such Lender's signature to this Agreement or in the
Assignment and Acceptance pursuant to which it became a Lender (or, if
no such office is specified, its Domestic Lending Office), or such
other office of such Lender as such Lender may from time to time
specify to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, with respect to any Interest Period
for any Eurodollar Rate Advances, the rate per annum obtained by
dividing (a) LIBOR for such Interest Period by (b) a percentage equal
to 1.00 minus the Eurodollar Rate Reserve Percentage.
"Eurodollar Rate Advance" means an Advance that bears
interest as provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period
for any Eurodollar Rate Advances 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 any emergency,
supplemental or other marginal reserve requirement) for a member bank
of the Federal Reserve System in New York City 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.
"Event of Default" has the meaning specified in Section 6.01.
"Excess Cash Flow" means for any fiscal year of the Borrower,
(a) cash flows from operations for such fiscal year in accordance with
GAAP and, without duplication, tax refunds received during such fiscal
year, after application of the Tax Allocation Agreement, minus (b)
cash outflows from investing activities for Capital Expenditures of
the Borrower or any of its Subsidiaries during such fiscal year to the
extent permitted by the Financing Documents, minus (c) cash outflows
from financing activities (including payment of scheduled debt
maturities (but not optional prepayments of any Debt (other than (i)
optional prepayments made in respect of the Advances and (ii) optional
prepayments made by the Borrower in respect of the Parent Credit
Agreement during any such year, net of borrowings made by the Borrower
under the Parent Credit Agreement during such year, including
borrowings by the Borrower as a result of draws during such year under
letters of credit issued under the Parent Credit Agreement) or
dividends)) during such fiscal year.
"Excluded Assets" means (a) any Assets of any Excluded
Subsidiary or Excluded Entity, (b) solely with respect to the security
interests created by the Mortgages, the Smith Facility, (c) solely
with respect to the security interests created by the Mortgages, the
Bingamon Creek Property (so long as the Fair Market Value of such
property does not exceed $5,000,000) and (d) the Equity Interests in
each of Conemaugh, Mon Synfuel, LLC, NYC Energy LLC, Allegheny Energy
Supply Units 3, 4 and 5 LLC, AES Gleason and AES Wheatland and any of
their respective Subsidiaries; provided, however, that in the event
that (i) any of Conemaugh, Mon Synfuel, LLC, NYC Energy LLC, Allegheny
Energy Supply Units 3, 4 and 5 LLC or any of their respective
Subsidiaries shall at any time individually hold Assets with a book
value of more than $10,000,000, and (ii) the Person holding such
Equity Interests is not restricted or prohibited by its Constituent
Documents or any other written agreement among Persons holding Equity
Interests in such entity from granting a Lien over such Equity
Interests in favor of the Secured Parties (unless such restriction or
prohibition is adopted after the date hereof), then such Equity
Interests shall cease to constitute "Excluded Assets" and shall
constitute Collateral for all purposes of this Agreement and the
Security Agreement.
"Excluded Entities" means Buchanan Generation LLC, Mon
Synfuel, LLC and NYC Energy LLC; provided, however, that each such
Person shall cease to constitute an "Excluded Entity" in the event
that (a) with respect to Buchanan Generation LLC and any of its
Subsidiaries, Buchanan Generation LLC shall become a direct or
indirect Subsidiary of the Borrower and (b) with respect to Mon
Synfuel, LLC, NYC Energy LLC and any of their respective Subsidiaries,
at any time after the date hereof, such Person (i) shall individually
hold Assets with a book value in excess of $10,000,000, (ii) is not
restricted or prohibited by its Constituent Documents or any other
written agreement among the Persons holding Equity Interests therein
from granting a Lien over its Assets in favor of the Secured Parties
(unless such restriction or prohibition is adopted after the date
hereof) and (iii) shall become a direct or indirect Subsidiary of the
Borrower.
"Excluded Subsidiaries" means each of AGC, Conemaugh,
Allegheny Energy Supply Units 3, 4, 5 LLC, AES Gleason and AES
Wheatland and each of their respective Subsidiaries; provided,
however, that, except with respect to AES Gleason and AES Wheatland,
each such Subsidiary shall cease to constitute an "Excluded
Subsidiary" in the event that (a) with respect to AGC, AGC shall no
longer be restricted or prohibited under any agreement for Debt for
Borrowed Money permitted to exist or be incurred pursuant to the terms
of this Agreement from granting a Lien over its Assets in favor of the
Secured Parties and (b) with respect to Conemaugh, Allegheny Energy
Supply Units 3, 4, 5 LLC and any of their respective Subsidiaries, at
any time after the date hereof, such Person (i) shall individually
hold Assets with a book value in excess of $10,000,000 and (ii) is not
restricted or prohibited by its Constituent Documents or any other
written agreement among the Persons holding Equity Interests therein
from granting a Lien over its Assets in favor of the Secured Parties
(unless such restriction or prohibition is adopted after the date
hereof).
"Existing Credit Agreement" has the meaning specified in
Preliminary Statement (1) to this Agreement.
"Existing Debt" means all Debt, as of the date hereof, of the
Borrower and its Subsidiaries.
"Existing Indentures" means (a) the Indenture dated March 15,
2001 between the Borrower, as issuer, and Bank One Trust Company,
N.A., as trustee and (b) the Indenture dated as of April 8, 2002
between the Borrower, as issuer, and Bank One Trust Company, N.A., as
trustee.
"Existing Lenders" has the meaning specified in Preliminary
Statement (1) to this Agreement.
"Facility" means, at any time, the aggregate amount of the
Commitments at such time.
"Fair Market Value" means with respect to any Asset the price
at which a willing buyer would purchase such Asset from a willing
seller, assuming that both buyer and seller are rational and have
reasonable knowledge of all relevant facts.
"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 for such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"Fee Letters" means, collectively, (a) any fee letter between
the Borrower and any Agent and (b) any fee letter among the Borrower,
the Parent and any Arranger Party.
"Financing Documents" means this Agreement, the Notes, the
Fee Letters and the Collateral Documents.
"First Lien Secured Debt Leverage Ratio" means, at any date
of determination, the ratio of Consolidated First Lien Secured Debt of
the Borrower and its Subsidiaries outstanding as of such date of
determination to Consolidated EBITDA of the Borrower and its
Subsidiaries for the most recently completed fiscal year.
"Fiscal Year" means a fiscal year of the Borrower and its
Consolidated Subsidiaries ending on December 31 in any calendar year.
"Form 10-K" has the meaning specified in Section 4.01(h).
"Fund" means any Person (other than a natural person) that is
(or will be) engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the
ordinary course of its business.
"GAAP" has the meaning specified in Section 1.02(c).
"Governmental Approvals" has the meaning specified in Section
4.01(d).
"Governmental Authority" means any national, state, county,
city, town, village, municipal or other de jure or de facto government
department, commission, board, bureau, agency, authority or
instrumentality of a country or any political subdivision thereof or
any regional transmission authority organized pursuant to federal law,
and any Person exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to any of the foregoing
entities, including all commissions, boards, bureaus, arbitrators and
arbitration panels, and any authority or other Person controlled by
any of the foregoing.
"Granting Lender" has the meaning specified in Section
9.07(g).
"Group Assets" means all Assets of the Loan Parties other
than the Excluded Assets.
"Hatfield's Ferry Facility" means the Hatfield's Ferry
generation facility located near Masontown, PA and owned by the
Borrower and MPC.
"Hazardous Materials" means (a) petroleum or petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
"Hedge Agreements" means (a) any and all rate swap
transactions, basis swaps, credit derivative transactions, forward
rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or
bond price or bond index swaps or options or forward bond or forward
bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions,
cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of the
foregoing (including any option to enter into any of the foregoing),
whether or not any such transaction is governed by or subject to any
master agreement, and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and
conditions of, or are governed by, any form of master agreement
published by the International Swaps and Derivative Association, Inc.,
any International Foreign Exchange Master Agreement or any other
master agreement (including such master agreement, together with any
related schedules, a "Master Agreement") including any such
obligations or liabilities under any Master Agreement.
"Hunlock Agreement" means the Partnership Agreement of
Hunlock Creek Energy Ventures, dated December 8, 2000 and amended on
June 26, 2003, between UGI and Allegheny Energy Supply Hunlock Creek,
LLC.
"Hunlock Transaction" means the transactions to be entered
into by the Borrower or any of its Subsidiaries in connection with
either (a) the exercise or expected exercise of a certain put option
by UGI under the Hunlock Agreement that will require AESC Hunlock
Creek or any Affiliate thereof to purchase from Hunlock Creek Energy
Ventures, an equal partnership between UGI and AESC Hunlock Creek (the
"Hunlock Partnership"), a 48 MW coal fired steam electric generation
facility known as the Hunlock Creek Electric Generating Station
located in Hunlock Township, Commonwealth of Pennsylvania (the
"Hunlock Coal Station"), a 44 MW combustion turbine electric
generation facility located at the same site (the "Hunlock CT"), or
both or (b) the exercise or expected exercise of a certain call option
by AESC Hunlock Creek or any Affiliate thereof under the Hunlock
Agreement that will allow AESC Hunlock Creek or such Affiliate to
purchase from the Hunlock Partnership the Hunlock Coal Station, the
Hunlock CT or both.
"Incremental Commitments" has the meaning specified in
Section 2.14(a).
"Indemnified Costs" has the meaning specified in Section
8.05(a).
"Indemnified Party" has the meaning specified in Section
9.04(b).
"Initial Lenders" has the meaning specified in the recital of
parties to this Agreement.
"Insolvency Proceeding" means, with respect to any Person,
(a) any proceeding instituted against such Person 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
or other similar official for it or for any substantial part of its
property and either such proceeding shall remain undismissed or
unstayed for a period of 60 consecutive days or the entry by any
competent Governmental Authority of any jurisdiction or a court having
jurisdiction in the premises of a decree or order approving or
ordering any of the actions sought in such proceeding (including the
entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or any
substantial part of its property); or (b) commencement by such Person
of a voluntary case or proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated as bankrupt or insolvent, or the
consent by such Person to the entry of a decree or order for relief in
respect of such Person in an involuntary case or proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law
or to the commencement of any bankruptcy or insolvency case or
proceeding against such Person, or the filing by such Person of a
petition or answer or consent seeking reorganization or relief under
any Applicable Law; or consent by such Person to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of such Person or of any substantial part of the property of
such Person, or the making by such Person of an assignment for the
benefit of creditors or any other marshalling of the assets and
liabilities of such Person, or the admission by such Person in writing
of its inability to pay its debts generally as they become due, or the
taking of corporate action by such Person in furtherance of any such
action.
"Intercreditor Agent" has the meaning specified in the
recital of the parties to this Agreement.
"Intercreditor Agreement" means that certain Intercreditor
Agreement, dated as of February 21, 2003, among Citibank, N.A., as
agent for certain lenders described therein and intercreditor agent,
The Bank of Nova Scotia, as agent for certain lenders described
therein, Law Debenture Trust Company of New York, as indenture
trustee, the Parent and the Borrower.
"Interest Coverage Ratio" means, at any date of
determination, the ratio of (a) Consolidated EBITDA for the period of
four consecutive fiscal quarters most recently ended on or prior to
such date, taken as one accounting period to (b) the Consolidated
Interest Expense for the period of four consecutive fiscal quarters
most recently ended on or prior to such date, taken as one accounting
period.
"Interest Period" means, for each Eurodollar Rate Advance,
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, as the case may be, and ending on the last
day of the period selected by the Borrower pursuant to the provisions
below for such Eurodollar Rate Advance 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 so
selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six
months or, if available at the time of selection to all Lenders, nine
or twelve months, as the Borrower may select, upon notice received by
the Administrative Agent not later than 11:00 a.m. (New York City
time) on the third Business Day prior to the first day of such
Interest Period (or in the case of any Conversion of any Base Rate
Advance into a Eurodollar Rate Advance requested to occur within three
Business Days after the Closing Date in accordance with Section
2.03(b), upon notice received by the Administrative Agent by such time
and with such shorter prior notice as may be agreed by the
Administrative Agent); provided, however, that:
(a) the Borrower may not select any Interest Period
with respect to any Eurodollar Rate Advance that ends after
the date specified in clause (a) of the definition of
"Maturity Date";
(b) 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; and
(c) 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.
"Intralinks" means the digital internet workspace located at
http://www.intralinks.com.
"Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any Equity Interests or
Debt or the Assets comprising a division or business unit or a
substantial part or all of the business of such Person, any capital
contribution to such Person or any other direct or indirect investment
in such Person, including any acquisition by way of a merger or
consolidation and any arrangement pursuant to which the investor
incurs Debt of the types referred to in clause (j) or (k) of the
definition of "Debt" in respect of such Person.
"Joint Venture" means, with respect to any Person, at any
date, any other Person in whom such Person directly or indirectly
holds an Investment consisting of an Equity Interest and whose
financial results would not be considered under GAAP with the
financial results of such Person on the Consolidated financial
statements of such Person, if such statements were prepared in
accordance with GAAP as of such date.
"Lenders" means the Initial Lenders and each other Person
that shall become a Lender hereunder pursuant to Section 9.07 for so
long as such Initial Lender or Person, as the case may be, shall be a
party to this Agreement.
"Leverage Ratio" means, as of any date of determination, the
ratio of (a) Consolidated Debt for Borrowed Money of the Borrower as
at such date, to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters most recently ended on or prior to such
date, taken as one accounting period.
"LIBOR" means, for any applicable Interest Period with
respect to any Eurodollar Rate Advance (or portions thereof) with the
same Interest Period, the British Bankers' Association Interest
Settlement Rate per annum for deposits in Dollars for a period equal
to such Interest Period appearing on the display designated as Page
3750 on the Dow Jones Markets Service (or such other page on that
service or such other service designated by the British Bankers'
Association for the display of such Association's Interest Settlement
Rates for Dollar deposits) as of 11:00 a.m. (London, England time) on
the day that is two Business Days prior to the first day of the
Interest Period or, if such Page 3750 is unavailable for any reason at
such time, the rate which appears on the Reuters Screen LIBOR01 Page
as of such date and such time; provided that if the Administrative
Agent determines that the relevant foregoing sources are unavailable
for the relevant Interest Period, "LIBOR" shall mean the rate of
interest determined by the Administrative Agent to be the average
(rounded upward, if necessary, to the nearest 1/1000th of 1%) of the
rates per annum at which deposits in Dollars are offered to the
Administrative Agent two Business Days preceding the first day of such
Interest Period by leading banks in the London interbank market as of
10:00 a.m. (New York City time) for delivery on the first day of such
Interest Period, for the number of days comprised therein and in an
amount comparable to the amount of the Eurodollar Rate Advance (or
portion thereof, as the case may be) of CNAI (in its capacity as a
Lender).
"Lien" means any lien, mortgage, deed of trust, pledge,
security interest or other charge or encumbrance of any kind,
including 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 Party" has the meaning specified in the recital of the
parties hereto.
"Margin Stock" has the meaning specified in Regulation U.
"Master Agreement" has the meaning specified in the
definition of the term "Hedge Agreements".
"Material Adverse Change" means any material adverse change
in the business, financial condition, operations or properties of the
Borrower and its Subsidiaries, taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, financial condition, operations or properties of the
Borrower and its Subsidiaries, taken as a whole, (b) the rights and
remedies of any Secured Party under any Financing Document, or (c) the
ability of any Loan Party to perform its Obligations under any
Financing Document to which it is or is to be a party.
"Material Contracts" means (a) the Affiliate Energy
Contracts, (b) the Operating Agreements, (c) the Tax Allocation
Agreement and (d) each contract or agreement entered into after March
8, 2004 to which the Borrower or any of its Subsidiaries is a party
which is material to the business, financial condition, operations or
properties of the Borrower or the Borrower and its Subsidiaries, taken
as a whole, and for which breach, non-performance, cancellation or
failure to renew could be reasonably expected to have a Material
Adverse Effect.
"Material Governmental Approvals" means those Governmental
Approvals listed in Part A of Schedule 4.01(d).
"Material Property" means such real property of any Loan
Party (other than Excluded Assets), which real property (a) has a book
value greater than or equal to $5,000,000 (including any such real
property acquired in connection with a Permitted Asset Swap), (b) is
subject to a Mortgage or (c) is otherwise material to the value of any
real property of any Loan Party which is subject to a Lien under the
Mortgages.
"Maturity Date" means the earlier of (a) March 8, 2011 and
(b) the date of acceleration of all outstanding Advances pursuant to
Section 6.02.
"Merrill Lynch Litigation" means that litigation arising out
of that complaint filed under the caption Merrill Lynch & Co., Inc.,
et al v. Allegheny Energy, Inc. and Allegheny Energy, Inc. et al. v.
Merrill Lynch & Co., Inc., et al. (02 CV 7689 (HB)).
"ML Interests" means the up to 2% of all issued and
outstanding Equity Interests in the Borrower which are owned by ML IBK
Positions, Inc, a Delaware corporation.
"Moody's" means Moody's Investors Service, Inc.
"Mortgages" means the Term Mortgages, the Amended and
Restated Mortgages, the New Mortgages and any other mortgage, deed of
trust, trust deed, leasehold mortgage or leasehold deed of trust
recorded and filed with any necessary recording office from time to
time in order to create a valid Lien over the Collateral in favor of
the Secured Parties in respect of the Secured Obligations owed to such
Secured Parties pursuant to the terms of this Agreement or the
Security Agreement.
"MPC" means Monongahela Power Company, a corporation
incorporated under the laws of the State of Ohio.
"Multiemployer Plan" means a multiemployer plan, as defined
in Section 4001(a)(3) of ERISA, to which the Borrower or any of its
Subsidiaries or any ERISA Affiliate is making or accruing an
obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of the Borrower or any of its Subsidiaries or any ERISA
Affiliate and at least one Person other than the Borrower, its
Subsidiaries and the ERISA Affiliates or (b) was so maintained and in
respect of which the Borrower and any of its Subsidiaries or any ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease,
transfer or other disposition of any Assets or any Debt Issuance or
the sale or issuance of any Equity Interests (including any capital
contribution) by any Person, the aggregate amount of cash received
from time to time (whether as initial consideration or through payment
or disposition of deferred consideration or received from escrow) by
or on behalf of such Person in connection with such transaction after
deducting therefrom only (without duplication) the following (to the
extent directly and primarily relating to such transaction): (a)
reasonable and customary brokerage commissions, underwriting fees and
discounts, legal, consultant and advisor fees, finder's fees and other
similar fees and commissions, (b) the amount of taxes (or amounts
owing pursuant to the Tax Allocation Agreement) payable in connection
with or as a result of such transaction, and (c) in the case of any
sale, lease, transfer or other disposition of any Asset, (i) the
amount of (A) any Debt secured by a prior Lien on the Asset which is
the subject of such sale, lease, transfer or other disposition or (B)
Debt outstanding under the Pollution Control Bonds that is, in either
case, repaid, redeemed or defeased upon such disposition as required
pursuant to the terms of (1) the agreement or instrument governing
such Debt or (2) any undertaking or agreement of the Borrower made on
or prior to February 21, 2003 in favor of the issuer of any guaranty,
surety bond or insurance policy issued for the benefit of the holders
of such Debt, including each of the consents, dated February 21, 2003,
entered into among (y) the Borrower, PEC and MBIA Insurance
Corporation and (z) the Borrower, WPPC and MBIA Insurance Corporation,
(ii) the costs associated (in the Borrower's best estimate) with
terminating all Hedge Agreements, if any, entered into in connection
with such Asset, which Hedge Agreements are not being transferred as
part of such sale, lease, transfer or other disposition, but only to
the extent that the amounts so deducted are, at the time or within a
reasonable time (not to exceed ten days) of receipt of such cash,
actually paid to a Person that is not an Affiliate of such Person or
any Loan Party or any Affiliate of any Loan Party and are properly
attributable to such transaction or to the Asset that is the subject
thereof and (iii) any amounts received from funds that were held in
escrow as of the Closing Date with respect to any sale, lease,
transfer or other disposition of any Asset consummated prior to the
Closing Date; provided, that, in the case of taxes or termination
costs that are deductible under clause (b) or (c)(ii) above but for
the fact that, at the time of receipt of such cash, such amounts have
not been actually paid or are not then payable, such Person may deduct
an amount (the "Reserved Amount") equal to the amount reserved in
accordance with GAAP for such Person's reasonable estimate of such
amounts, other than taxes for which such Person is indemnified;
provided further that, at the time such amounts are paid, an amount
equal to the amount, if any, by which the Reserved Amount for such
amounts exceeds the amount of such amounts actually paid shall
constitute "Net Cash Proceeds" of the type for which such amounts were
reserved for all purposes hereunder.
"New Mortgages" has the meaning specified in Section 5.01(p).
"Non-UCC Property" means any of the Collateral consisting of
personal property the creation, granting or perfection of a Lien upon
or in which is governed by Applicable Law other than the UCC and
Applicable Law under, or relating to, the UCC.
"Note" means a promissory note of the Borrower payable to the
order of a Lender and issued pursuant to the terms hereof, evidencing
the aggregate indebtedness of the Borrower owed to such Lender
resulting from the Advances made, continued or maintained by such
Lender pursuant to this Agreement.
"Notice of Bank Facility Default" has the meaning specified
in Section 7.01(a)(2).
"Notice of Borrowing" has the meaning specified in Section
2.02(a).
"Notice of Conversion/Continuation" has the meaning specified
in Section 2.03(b).
"Notice of Default" has the meaning specified in Section
7.01(a).
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including
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(h). Without limiting the
generality of the foregoing, the Obligations of any Loan Party under
the Financing Documents include (a) the obligation to pay principal,
interest, commissions, charges, expenses, fees, attorneys' and
consultants' fees and disbursements, indemnities and other amounts
payable by such Loan Party under any Financing Document and (b) the
obligation of such Loan Party to reimburse any amount in respect of
any of the foregoing that any Secured Party, in its sole discretion,
may elect to pay or advance on behalf of such Loan Party.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by a Responsible Officer of such Person.
"Operating Account Bank" means an institution at which an
Operating Account has been established as specified in Part B of
Schedule 1.01(c).
"Operating Accounts" means all those deposit and securities
accounts of the Borrower and the other Loan Parties set forth in Part
B of Schedule 1.01(c).
"Operating Agreements" means each of the agreements set forth
on Schedule 1.01(d) hereto.
"Other Perfection Requirements" means (a) the giving of
notice to any Person (other than an Affiliate of the Borrower or an
Operating Account Bank) of the Liens created by the Loan Parties under
the Collateral Documents and (b) any recording, notice, filing,
registration, instrument or act required to be undertaken, made or
executed in order to grant or perfect any Lien over Non-UCC Property.
"Other Taxes" has the meaning specified in Section 2.12(b).
"PA Report" means the Independent Market Expert's Report for
the PJM, MISO, and SERC-TVA Regions, dated June 24, 2005, prepared by
PA Consulting Group.
"Parent" means Allegheny Energy, Inc., the parent company of
the Borrower.
"Parent Credit Agreement" means that certain Credit
Agreement, dated as of June 16, 2005, among the Parent, the Borrower,
the Lenders and Issuing Bank party thereto, and CNAI, as
Administrative Agent.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"PEC" means The Potomac Edison Company, a corporation
incorporated under the laws of the State of Maryland and of the State
of Virginia.
"PEC Service Agreement" means that certain Service Agreement,
dated as of August 1, 2000, between the Borrower and PEC (d/b/a
Allegheny Power).
"Permitted Asset Swap" has the meaning specified in Section
5.02(e)(ix).
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) Liens for taxes, assessments and
governmental charges or levies to the extent not required to be paid
under Section 5.01(d); (b) Liens imposed by law, such as
materialmen's, mechanics', carriers', workmen's and repairmen's Liens
and other similar Liens arising in the ordinary course of business
securing obligations that are not overdue for a period of more than 30
days, or which are subject to Contest; (c) Liens or deposits to secure
obligations under workers' compensation laws or similar legislation or
to secure public or statutory obligations; (d) deposits to secure the
performance of bids, leases (other than Capitalized Leases), trade
contracts, public or statutory obligations (including environmental,
municipal and public utility commission obligations under Applicable
Law), surety bonds (other than bonds related to judgments or
litigation), performance bonds and other obligations of a like nature;
(e) Liens securing judgments for the payment of money not constituting
an Event of Default under Section 6.01(i) or securing appeal or other
surety bonds related to such judgments; (f) zoning restrictions,
easements, rights of way and other encumbrances on title to real
property that do not render title to the property encumbered thereby
unmarketable or materially adversely affect the use of such property
for its present purposes; (g) Liens securing reimbursement obligations
with respect to letters of credit (which reimbursement obligations
relate to Debt which has not been incurred in contravention of the
terms of this Agreement and the other Financing Documents) that
encumber documents and other property relating to such letters of
credit and the proceeds and products thereof, including such Liens
arising in connection with the issuance of letters of credit on behalf
of the Parent to support obligations of the Borrower and its
Subsidiaries under Hedge Agreement to the extent that such Hedge
Agreements are entered into in accordance with the terms of this
Agreement; (h) Liens on cash deposits in the nature of a right of
setoff, banker's lien, counterclaim or netting of cash amounts owed
arising in the ordinary course of business on deposit accounts,
commodity accounts or securities accounts; (i) financing statements
filed on a precautionary basis in respect of operating leases to the
extent such lease is otherwise permitted under the terms of this
Agreement; provided that no such financing statement extends to or
refers to as collateral any Assets which are not subject to such
operating lease; and (j) rights of first refusal, options or other
contractual rights or obligations to sell, assign or otherwise dispose
of any Asset or interest therein which rights of first refusal, option
or contractual right is in connection with a sale, transfer or other
disposition of Assets permitted under Section 5.02(d) or 5.02(e).
"Permitted Refinancing Debt" means Debt issued or incurred
(including by means of the extension or renewal of existing Debt) to
refinance, refund, extend, renew or replace existing Debt ("Refinanced
Debt") concurrently with or within 90 days after, the issuance or
incurrence of such Debt; provided that (a) the principal amount of
such refinancing, refunding, extending, renewing or replacing Debt is
not greater than the principal amount of such Refinanced Debt plus the
amount of any premiums or penalties and accrued and unpaid interest
paid thereon and reasonable fees and expenses, in each case associated
with such refinancing, refunding, extension, renewal or replacement,
(b) such refinancing, refunding, extending, renewing or replacing Debt
has a final maturity date that is no sooner than, and a weighted
average life to maturity that is no shorter than, such Refinanced
Debt, (c) if such Refinanced Debt is subordinated to the Secured
Obligations hereunder, such refinancing, refunding, extending,
renewing or replacing Debt remains so subordinated on terms no less
favorable to the Lenders, (d) the obligors in respect of such
Refinanced Debt immediately prior to such refinancing, refunding,
extending, renewing or replacing and any additional person (other than
a Loan Party) are the only obligors on such refinancing, refunding,
extending, renewing or replacing Debt and (e) such refinancing,
refunding, extending, renewing or replacing Debt contains covenants
and events of default which, taken as a whole, are determined in good
faith by a Responsible Officer of the Borrower to be customary for
similar issuances of Debt by issuers of a similar credit rating or
standing as the credit rating then applicable to the Borrower.
"Person" means an individual, partnership, corporation
(including a business or statutory trust), limited liability company,
joint stock company, trust, unincorporated association, joint venture
or other entity, or a government or any political subdivision or
agency thereof.
"Plan" means a Single-Employer Plan or a Multiple Employer
Plan.
"Platform" has the meaning specified in Section 9.02(c).
"Pledged Account" means any deposit or securities account
maintained in the name of the Collateral Agent and under the sole
control and dominion of the Collateral Agent pursuant to the terms of
the Security Agreement.
"Pledged Debt" has the meaning set forth in the Security
Agreement.
"PNC Control Agreement" means that certain Deposit Account
Control Agreement, dated as of February 21, 2003, among PNC Bank,
National Association, as the Bank, the Borrower, Energy Financing
Company, LLC, Allegheny Energy Supply Capital, LLC, Allegheny Energy
Supply Development Services, LLC, Allegheny Energy Supply Capital
Midwest, LLC, Allegheny Energy Supply Gleason Generating Facility,
LLC, Allegheny Energy Supply Wheatland Generating Facility, LLC,
Allegheny Energy Supply Lincoln Generating Facility, LLC and Allegheny
Trading Finance Company, LLC, as Debtors, and the Collateral Agent, as
Creditor.
"Pollution Control Bond Indentures" means (a) the Trust
Indenture dated as of April 15, 1992 between the County Commission of
Harrison County, West Virginia and J.P. Morgan Trust Company, National
Association (formerly Chase Manhattan Trust Company, National
Association, successor trustee to Mellon Bank, N.A.), as Trustee,
providing for Solid Waste Disposal Revenue Bonds (West Penn Power
Company Harrison Station Project), (b) the Trust Indenture dated as of
November 1, 1977 between Pleasants County, West Virginia and J.P.
Morgan Trust Company, National Association (formerly Chase Manhattan
Trust Company, National Association, successor trustee to Mellon Bank,
N.A.), as Trustee, providing for Pollution Control Revenue Bonds (West
Penn Power Company Pleasants Station Project), (c) the Trust Indenture
dated as of December 1, 1980 between Washington County Industrial
Development Authority and J.P. Morgan Trust Company, National
Association (formerly Chase Manhattan Trust Company, National
Association, successor trustee to Mellon Bank, N.A.), as Trustee,
providing for Pollution Control Revenue Bonds (West Penn Power Company
Mitchell Station Project), (d) the Trust Indenture dated as of April
15, 1983 between the County Commission of Monongalia County, West
Virginia and J.P. Morgan Trust Company, National Association (formerly
Chase Manhattan Trust Company, National Association, successor trustee
to Mellon Bank, N.A.), as Trustee, providing for Pollution Control
Revenue Bonds (West Penn Power Company Fort Martin Station Project),
(e) the Trust Indenture dated as of February 1, 1977 between Greene
County Industrial Development Authority and J.P. Morgan Trust Company,
National Association (formerly Chase Manhattan Trust Company, National
Association, successor trustee to Mellon Bank, N.A.), as Trustee,
providing for Pollution Control Revenue Bonds (West Penn Power Company
Hatfield's Ferry Project), (f) the Trust Indenture dated as of April
15, 1992 between the County Commission of Harrison County, West
Virginia and J.P. Morgan Trust Company, National Association (formerly
Chase Manhattan Trust Company, National Association, successor trustee
to Mellon Bank, N.A.), as Trustee, providing for Solid Waste Disposal
Revenue Bonds (The Potomac Edison Company Harrison Station Project),
(g) the Trust Indenture dated as of November 1, 1977 between Pleasants
County, West Virginia and J.P. Morgan Trust Company, National
Association (formerly Chase Manhattan Trust Company, National
Association, successor trustee to Mellon Bank, N.A.), as Trustee,
providing for Pollution Control Revenue Bonds (The Potomac Edison
Company Pleasants Station Project), (h) the Trust Indenture dated as
of April 15, 1983 between the County Commission of Monongalia County,
West Virginia and J.P. Morgan Trust Company, National Association
(formerly Chase Manhattan Trust Company, National Association,
successor trustee to Mellon Bank, N.A.), as Trustee, providing for
Pollution Control Revenue Bonds (The Potomac Edison Company Fort
Martin Station Project), (i) the Trust Indenture dated as of February
1, 1977 between Greene County Industrial Development Authority and
J.P. Morgan Trust Company, National Association (formerly Chase
Manhattan Trust Company, National Association, successor trustee to
Mellon Bank, N.A.), as Trustee, providing for Pollution Control
Revenue Bonds (Monongahela Power Company Hatfield's Ferry Project),
(j) the Trust Indenture dated as of November 1, 1977 between Pleasants
County, West Virginia and J.P. Morgan Trust Company, National
Association (formerly Chase Manhattan Trust Company, National
Association, successor trustee to Mellon Bank, N.A.), as Trustee,
providing for Pollution Control Revenue Bonds (Monongahela Power
Company Pleasants Station Project), (k) the Trust Indenture dated as
of April 15, 1983 between the County Commission of Monongalia County,
West Virginia and J.P. Morgan Trust Company, National Association
(formerly Chase Manhattan Trust Company, National Association,
successor trustee to Mellon Bank, N.A.), as Trustee, providing for
Pollution Control Revenue Bonds (Monongahela Power Company Fort Martin
Station Project), and (l) Trust Indenture dated as of April 15, 1992
between the County Commission of Harrison County, West Virginia and
J.P. Morgan Trust Company, National Association (formerly Chase
Manhattan Trust Company, National Association, successor trustee to
Mellon Bank, N.A.), as Trustee, providing for Solid Waste Disposal
Revenue Bonds (Monongahela Power Company Harrison Station Project).
"Pollution Control Bonds" means all notes, bonds and other
instruments evidencing Debt issued pursuant to the Pollution Control
Bond Indentures.
"Preferred Interests" means, with respect to any Person,
Equity Interests issued by such Person that are entitled to a
preference or priority over any other Equity Interests issued by such
Person upon any distribution of such Person's Assets, whether by
dividend or upon liquidation.
"Prepayment Account" has the meaning set forth in the
Security Agreement.
"Prepayment Date" has the meaning specified in Section
2.06(c)(ii).
"Prepayment Notice" has the meaning specified in Section
2.06(c)(ii).
"PUHCA" means the Public Utility Holding Company Act of 1935,
as amended.
"Qualifying Obligation" means an Obligation in an aggregate
principal amount in excess of $5,000,000.
"Quarterly Date" means the last Business Day of March, June,
September and December, commencing with September 30, 2005.
"Real Property Requirements" means the requirements contained
in Exhibit F with respect to the creation and perfection of any Lien
over any of the real property of any Loan Party which is subject to a
prior Mortgage.
"Receipt Date" has the meaning specified in Section
2.06(c)(ii).
"Recorded Term Mortgages" has the meaning specified in
Section 5.01(p).
"Recovery Event" means (a) any act, series of acts, omissions
or series of omissions of any Governmental Authority for the
confiscation, condemnation, expropriation, nationalization, seizure or
other taking of any Asset of any Loan Party or (b) any event that
causes any Asset (or portion thereof) of any Loan Party to be damaged,
destroyed or rendered unfit for normal use for any reason whatsoever.
"Recovery Event Proceeds" means the amount of cash proceeds
paid to any Loan Party in respect of any Recovery Event but excluding
any such proceeds paid under any advance loss of profit insurance,
delayed start-up insurance, liability, business interruption or
similar types of insurance.
"Redeemable" means, with respect to any Equity Interest, any
Debt or any other right or Obligation, any such Equity Interest, Debt,
right or Obligation that (a) the issuer has undertaken to redeem at a
fixed or determinable date or dates, whether by operation of a sinking
fund or otherwise, or upon the occurrence of a condition not solely
within the control of the issuer or (b) is redeemable at the option of
the holder.
"Register" has the meaning specified in Section 9.07(d).
"Regulation U" means Regulation U of the Board of Governors
of the Federal Reserve System, as in effect from time to time.
"Related Fund" means, with respect to any Lender or Eligible
Assignee that is a Fund, any other Fund that is administered or
managed by the same Person as such Lender or Eligible Assignee or by
an Affiliate of such Person.
"Representatives" has the meaning specified in Section
9.12(a).
"Required Lenders" means, at any time, Lenders owed or
holding at least a majority in interest of the sum of the aggregate
principal amount of all Advances outstanding at such time or, if no
such principal amount is outstanding at such time, Lenders holding at
least a majority in interest of the aggregate amount of the
Commitments and the Incremental Commitments, if any.
"Required Prepayment Percentage" means if, on the date of the
applicable prepayment, the First Lien Secured Debt Leverage Ratio as
of such date is (a) 3:1 or higher, 50%, (b) less than 3:1 but higher
than or equal to 2:1, 25% or (c) less than 2:1, 0%.
"Responsible Officer" means, with respect to any Person, the
president, any vice-president, the treasurer, the chief financial
officer or an Authorized Signatory of such Person.
"S&P" means Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc.
"Sale" means any sale (including by way of sale/leaseback),
lease, assignment, transfer or other disposition.
"SEC" means the Securities and Exchange Commission.
"Second Draw Date" has the meaning specified in Section
3.02(a).
"Second Draw Date Transactions" has the meaning specified in
Section 3.02(a)(i).
"Secured Obligations" has the meaning specified in the
Security Agreement.
"Secured Party" has the meaning specified in the Security
Agreement.
"Security Agreement" means that certain Amended and Restated
Security and Intercreditor Agreement, dated as of February 21, 2003,
as amended and restated in its entirety on March 8, 2004 and as
further amended and restated in its entirety on October 28, 2004, as
amended, restated, modified or otherwise supplemented from time to
time in accordance with its terms, including pursuant to the SIA
Amendment, made by and among the Borrower, the other Loan Parties
named therein, Citicorp North America, Inc., as administrative agent,
Law Debenture Trust Company of New York, as indenture trustee, and
Citibank, N.A., as collateral agent, intercreditor agent and
depository bank.
"Senior Debt Obligations" means, without duplication, (a) the
Obligations of the Borrower to pay principal and interest on or in
respect of the Advances (including any interest accruing after the
filing of a petition with respect to, or the commencement of, any
Insolvency Proceeding, whether or not a claim for post-petition
interest is allowed in such proceeding), and (b) any and all
commissions, fees, indemnities, prepayment premiums, costs and
expenses and other amounts payable to any Lender, any Agent or any
Arranger Parties under any Financing Document, including all renewals
or extensions thereof (including any reimbursement obligations for
costs and expenses incurred by any Secured Party in preserving any
rights, interests and remedies with respect to the Collateral and/or
the Liens granted in favor of the Secured Parties); provided that
notwithstanding anything to the contrary in any Financing Document,
"Senior Debt Obligations" shall not include any Obligations of the
Borrower owed to any of its Affiliates.
"Senior Note Indenture" means the Amended and Restated
Indenture, dated as of February 21, 2003, between the Borrower, as
issuer, Law Debenture Trust Company, as Indenture Trustee, and Bank
One Trust Company, N.A., in respect of the senior notes due 2007
issued thereunder.
"Senior Notes" means the Senior Secured Notes and the Senior
Unsecured B Notes.
"Senior Secured Debt Rating" means, as of any date, the
rating that has been most recently announced by either S&P or Moody's,
as the case may be, for any class of non-credit enhanced long-term
senior secured debt issued by the Borrower; provided that (a) if any
rating established by S&P or Moody's shall be changed, such change
shall be effective as of the date on which such change is first
publicly announced by the rating agency making such change, and (b) if
S&P or Moody's shall change the basis on which ratings are
established, each reference to the Senior Secured Debt Rating
announced by S&P or Moody's, as the case may be, shall refer to the
then equivalent rating by S&P or Moody's, as the case may be.
"Senior Secured Notes" means those certain secured 10.25%
Senior Notes due 2007 issued by the Borrower pursuant to the terms of
the Senior Note Indenture and designated as Amended A Notes by the
terms thereof.
"Senior Unsecured B Notes" means those certain unsecured
10.25% Senior Notes due 2007 issued by the Borrower pursuant to the
Senior Note Indenture and designated as Amended B Notes by the terms
thereof.
"SIA Amendment" has the meaning specified in Section
3.01(a)(v).
"Single-Employer Plan" means a single-employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of the Borrower or any of its Subsidiaries or any ERISA
Affiliate and no Person other than the Borrower or any of its
Subsidiaries and the ERISA Affiliates or (b) was so maintained and in
respect of which the Borrower or any of its Subsidiaries or any ERISA
Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
"Smith Facility" means the R. Paul Smith generation facility
located in Williamsport, MD owned by the Borrower, but excluding any
related personal property the creation, granting or perfection of a
Lien upon or in which is governed by the UCC.
"Solvent" and "Solvency" mean, with respect to any Person on
a particular date, that on such date (a) the fair value of the
property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities
that are probable and estimable, of such Person, (b) the present fair
saleable value of the Assets of such Person is not less than the
amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, taking into
account the possibility of refinancing such obligations and selling
Assets, (c) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature, taking into account the
possibility of refinancing such obligations and selling Assets, and
(d) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such
Person's property would constitute an unreasonably small capital. The
determination of whether a Person is "Solvent" and the facts and
circumstances relating thereto (including the amount of contingent
liabilities and actual liabilities) at any time shall be computed in
the light of all the facts and circumstances existing at such time.
"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
capital 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
partnership, joint venture or limited liability company 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.
"Subsidiary Debt Default" means, with respect to any
Subsidiary of the Borrower, the failure of such Subsidiary to pay any
principal or interest or other amounts due in respect of Debt, when
and as the same shall become due and payable, or the occurrence of any
other event or condition that results in any Debt of such Subsidiary
becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, lapse of time or both)
the holder or holders of such Debt or any trustee or agent on its or
their behalf to cause such Debt to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its
scheduled maturity.
"Surviving Debt" means Debt of each Loan Party and its
Subsidiaries outstanding immediately before and after giving effect to
the Transactions.
"Tax Allocation Agreement" means the Tax Allocation
Agreement, dated as of July 1, 2003, by and among the Parent and its
Subsidiaries.
"Taxes" means all federal, state, local or foreign income,
gross receipts, windfall profits, severance, property, production,
sales, use, excise, franchise, employment, value added, real estate,
withholding or similar taxes, assessments, fees, liabilities or other
charges, together with any interest, additions or penalties with
respect thereto and any interest in respect of such additions or
penalties.
"Term Mortgages" means the deeds of trust, trust deeds,
mortgages, leasehold mortgages and leasehold deeds of trust set forth
on Schedule 1.01(a) hereto.
"Termination Date" means the earlier of August 31, 2005 and
the date of termination in whole of the Commitments and Incremental
Commitments pursuant to Section 2.04 or 6.01.
"Termination Event" means an event described in Section
4042(a) of ERISA.
"Transactions" means (a) the incurrence of Debt by the
Borrower under this Agreement and the other Financing Documents, (b)
the effectiveness of the SIA Amendment and (c) the application of the
proceeds of the initial Borrowing on the Closing Date to the repayment
of the aggregate principal amount outstanding under the Existing
Credit Agreement and the application of the proceeds of the Borrowing
on the Second Draw Date to the repayment of the aggregate principal
amount outstanding under the Senior Secured Notes.
"Type" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the
Eurodollar Rate.
"UCC" or "Uniform Commercial Code" means the Uniform
Commercial Code as in effect, from time to time, in the State of New
York; provided that if perfection or the effect of perfection or
non-perfection or the priority of any security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in
a jurisdiction other than the State of New York, "UCC" means the
Uniform Commercial Code as in effect from time to time in such other
jurisdiction for purposes of the provisions hereof relating to such
perfection, effect of perfection or non-perfection or priority.
"UGI" means UGI Hunlock Development Company.
"Unused Commitments" means, with respect to any Lender at any
time, (a) such Lender's Commitment at such time minus (b) the
aggregate principal amount of all Advances made by such Lender.
"Voting Interests" means shares of capital stock issued by a
corporation, or equivalent Equity 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.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
"WPPC" means West Penn Power Company, a corporation
incorporated under the laws of the State of Pennsylvania.
Section 1.02 Principles of Interpretation. (a) Except to the
extent expressly provided to the contrary in this Agreement and the Schedules
and Exhibits hereto, or to the extent that the context otherwise requires, in
this Agreement and the Schedules and Exhibits hereto:
(i) the table of contents and Article and Section headings
are for convenience only and shall not affect the interpretation of
this Agreement, the Schedules and Exhibits hereto or of any Financing
Document;
(ii) references to any document, instrument or agreement,
including any Financing Document, shall include (i) all exhibits,
annexes, schedules, appendices or other attachments thereto and (ii)
all documents, instruments or agreements issued or executed in
replacement thereof;
(iii) references to a document or agreement, including any
Financing Document, shall be deemed to include any amendment,
restatement, modification, supplement or replacement thereto entered
into in accordance with the terms thereof and the terms of the
Financing Documents;
(iv) the words "include", "includes" and "including" are not
limiting;
(v) references to any Person shall include such Person's
successors and permitted assigns (and in the case of any Governmental
Authority, any Person succeeding to such Governmental Authority's
functions and capacities);
(vi) the words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement, the Schedules and
Exhibits hereto or any Financing Document shall refer to this
Agreement, the Schedules and Exhibits hereto or such Financing
Document, as the case may be, as a whole and not to any particular
provision thereof;
(vii) references to "days" shall mean calendar days;
(viii) the singular includes the plural and the plural
includes the singular;
(ix) references to Applicable Law, generally, shall mean
Applicable Law as in effect from time to time, and references to any
specific Applicable Law shall mean such Applicable Law, as amended,
modified or supplemented from time to time, and any Applicable Law
successor thereto;
(x) 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"; and
(xi) any reference in this Agreement or any other Financing
Document to an Article, Section, Schedule, Appendix or Exhibit is to
the article or section of, or a schedule, appendix or exhibit to, this
Agreement or such other Financing Document, as the case may be, unless
otherwise indicated, and the Schedules, Appendices and Exhibits to
this Agreement or any other Financing Document shall be deemed
incorporated by reference into this Agreement or such other Financing
Document, as the case may be.
(b) This Agreement, the Schedules and Exhibits hereto and the
other Financing Documents are the result of negotiations among the parties
hereto and their respective counsel. Accordingly, this Agreement, the Schedules
and Exhibits hereto and the other Financing Documents shall be deemed the
product of all parties hereto or thereto, as the case may be, and no ambiguity
in this Agreement, the Schedules and Exhibits hereto or any Financing Document
shall be construed in favor of or against any Loan Party, Agent, Arranger Party
or Lender that is a party hereto.
(c) All accounting terms used herein shall be interpreted,
all accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared, in accordance
with generally accepted accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Subsidiaries
delivered to the Lenders ("GAAP"); provided that, if the Borrower notifies the
Administrative Agent that the Borrower wishes to amend any covenant in Section
5.03 to eliminate the effect of any change in generally accepted accounting
principles on the operation of such covenant (or if the Administrative Agent
notifies the Borrower that the Required Lenders wish to amend Section 5.03 for
such purpose), then the Borrower's compliance with such covenant shall be
determined on the basis of generally accepted accounting principles in effect
immediately before the relevant change in generally accepted accounting
principles became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Borrower and the Required
Lenders.
Section 1.03 Determination of Material Adverse Change and
Material Adverse Effect, Etc. Determinations of materiality generally and
determinations as to whether any fact, event, circumstance, conditions or
occurrence constitutes (or could reasonably be expected to constitute) a
Material Adverse Effect or a Material Adverse Change to the extent such
determination is made by reference to the audited financial statements of the
Borrower which are subject to a "going concern" qualification by the Borrower's
auditors shall be made without taking into account or giving effect to such
"going concern" opinion.
ARTICLE II
ADVANCES AND PAYMENTS
Section 2.01 The Borrowings. Each Lender hereby severally
agrees, subject to the terms and conditions of this Agreement, to make two
advances (each, an "Advance") to the Borrower in an aggregate amount not to
exceed such Lender's Commitment as follows: (a) the initial such Advance shall
be made on the Closing Date (which shall occur on any Business Day during the
period from the date hereof until the Termination Date); provided that the
aggregate amount of all such Advances by the Lenders shall not exceed
$738,317,051.91 and (b) the second such Advance shall be made on any Business
Day during the period from the day next succeeding the Closing Date up to the
date that is 60 days after the Closing Date; provided that the aggregate amount
of all such Advances by the Lenders shall not exceed $330,682,948.09. Each
Borrowing shall consist of Advances made simultaneously 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 Borrowings. (a) Each Borrowing shall
be made on notice, given not later than 10:00 a.m. (New York City time) on the
third Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Eurodollar Rate Advances, or on the proposed date of
such Borrowing in the case of a Borrowing consisting of Base Rate Advances (or
9:00 a.m. (New York City time) on the Second Draw Date if the Borrowing to be
made on such date shall consist of Base Rate Advances), by the Borrower to the
Administrative Agent, which shall give to each Lender prompt notice thereof by
telecopier or electronic mail. Each such notice of a Borrowing (a "Notice of
Borrowing") shall be by telephone, confirmed immediately in writing, or
telecopier or electronic mail, in substantially the form of Exhibit B,
specifying therein the requested (i) date of such Borrowing (which shall be a
Business Day), (ii) aggregate amount of such Borrowing, (iii) Type of Advances
comprising such Borrowing and (iv) if such Borrowing is to consist of
Eurodollar Rate Advances, initial Interest Period therefor.
(b) With respect to each Borrowing, each Lender shall, before
12:00 noon (New York City time) on the date thereof (or 10:00 a.m. (New York
City time) on the Second Draw Date in the case of the Borrowing to be made on
such date), make available for the account of its Applicable Lending Office to
the Administrative Agent at the Administrative Agent's Account, in immediately
available funds, an amount equal to such Lender's ratable portion of such
Borrowing in accordance with the respective Commitments of such Lender and the
other Lenders. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will (i) in the case of the initial Borrowing, directly
apply the Advances for the account of the Borrower to the repayment of the
aggregate principal amount outstanding under the Existing Credit Agreement and
(ii) in the case of the second Borrowing, make such funds available to the
Borrower by crediting the Borrower's Account. Anything in subsection (a) above
to the contrary notwithstanding, the Borrower may not select Eurodollar Rate
Advances with respect to any Borrowing if the obligation of the Lenders to make
Eurodollar Rate Advances shall then be suspended pursuant to Section 2.03, 2.10
or 2.11.
(c) The failure of any Lender to make the Advance to be made
by it as part of either 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 required of such other Lender on the date of such
Borrowing.
(d) Each Notice of Borrowing shall be irrevocable and binding
on the Borrower. If the Notice of Borrowing for any Borrowing specifies the
Advances thereunder are 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 the conditions set forth in Article III,
including any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or redeployment 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.
(e) Subject to the Administrative Agent giving prompt notice
of the relevant Notice of Borrowing received by the Administrative Agent to the
Lenders, unless the Administrative Agent shall have received notice from a
Lender prior to the date of the Borrowing requested under such Notice of
Borrowing that such Lender will not make available to the Administrative Agent
such Lender's ratable portion of such Borrowing, the Administrative Agent may
assume that such Lender has made such portion available to the Administrative
Agent on the date of such Borrowing in accordance with subsection (b) of this
Section 2.02 and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If and to
the extent that such Lender shall not have made such ratable portion available
to the Administrative Agent, such Lender and the Borrower severally agree to
repay or pay to the Administrative Agent forthwith on demand such corresponding
amount and to pay interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is repaid or paid to
the Administrative Agent, at (i) in the case of the Borrower, the interest rate
applicable at such time under Section 2.07 to Advances comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall pay to the Administrative Agent such corresponding amount, such
amount so paid shall constitute such Lender's Advance as part of such Borrowing
for all purposes.
Section 2.03 Interest Elections. (a) The Borrower may on any
Business Day occurring after the Closing Date elect to Convert all or any
portion of the Advances from one Type into Advances of the other Type and, in
the case of Eurodollar Rate Advances, may elect Interest Periods therefor, all
as provided in the definition of "Interest Period" and in this Section 2.03.
The Borrower may elect different options with respect to different portions of
the Advances, in which case each such portion shall be allocated ratably among
the Lenders in accordance with the Advances owed to such Lenders. At no time
shall the total number of different Interest Periods for all Eurodollar Rate
Advances outstanding exceed ten.
(b) To make an election pursuant to this Section 2.03, the
Borrower shall give the Administrative Agent prior written notice (or
telephonic notice promptly confirmed in writing) by telecopier or electronic
mail (a "Notice of Conversion/Continuation") of the Conversion or Continuation,
as the case may be, (i) by 1:00 p.m. (New York City time) on the requested date
of a Conversion into Base Rate Advances and (ii) by 11:00 a.m. (New York City
time) three Business Days prior to a Continuation of Eurodollar Rate Advances
or Conversion into Eurodollar Rate Advances or, in the case of any Conversion
into Eurodollar Rate Advances requested to occur within three Business Days
after the Closing Date, by such time and with such shorter prior notice as may
be agreed by the Administrative Agent; provided, however, that any Conversion
of Eurodollar Rate Advances into Base Rate Advances shall be made only on the
last day of an Interest Period for such Eurodollar Rate Advances. Each such
Notice of Conversion/Continuation shall be irrevocable and binding on the
Borrower and shall specify (A) if different options are being elected with
respect to different portions of the Advances, the portions thereof that are to
be allocated to each resulting election (in which case the information to be
specified pursuant to clauses (C) and (D) shall be specified for each resulting
portion); (B) the effective date of the election made pursuant to such Notice
of Conversion/Continuation, which shall be a Business Day; (C) whether the
resulting Advances are to be Base Rate Advances or Eurodollar Rate Advances;
and (D) if the resulting Advances are to be Eurodollar Rate Advances, the
Interest Period applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of "Interest Period". If any
such Notice of Conversion/Continuation requests that the Advances be comprised
of Eurodollar Rate Advances but does not specify an Interest Period, the
Borrower shall be deemed to have selected an Interest Period of one month. The
principal amount of any portion of the Advances to which a Eurodollar Rate
election has been made shall not be less than $5,000,000.
(c) If, on the expiration of any Interest Period in respect
of any Eurodollar Rate Advances, the Borrower shall have failed to deliver a
Notice of Conversion/Continuation, then, unless such Advances are repaid as
provided herein, the Borrower shall be deemed to have elected to Convert such
Advances to Base Rate Advances. No Advances may be Converted into, or Continued
as, Eurodollar Rate Advances if a Default has occurred and is continuing,
unless the Administrative Agent and the Required Lenders shall have otherwise
consented in writing.
(d) Upon receipt of any Notice of Conversion/Continuation,
the Administrative Agent shall promptly notify each Lender of the details
thereof and of such Lender's ratable share of each election.
(e) Upon the occurrence and during the continuance of any
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.
(f) If any Advance is converted to a different Type of
Advance, the Borrower shall pay, on the date of such conversion, the interest
accrued to such date on the principal amount so converted.
Section 2.04 Termination or Reduction of Commitments. (a)
Mandatory. All Commitments and Incremental Commitments shall terminate at 5:00
p.m. (New York City time) on the Termination Date if the initial Borrowing has
not occurred by such time. All Unused Commitments, if any, shall terminate at
5:00 p.m. (New York City time) on the date which is 60 days after the Closing
Date if the second Borrowing has not occurred by such time. In addition, on the
Second Draw Date, after giving effect to the second Borrowing, all Unused
Commitments shall terminate.
(b) Optional. The Borrower may, at any time upon at least ten
Business Days' notice to the Administrative Agent, terminate in whole or reduce
in part the Unused Commitments; provided that each partial reduction of the
Commitments shall be in an aggregate amount of $5,000,000 or an integral
multiple of $1,000,000 in excess thereof, and such termination and reduction
shall ratably and permanently reduce each Lender's Commitment.
Section 2.05 Repayment of Advances. The Borrower shall repay
to the Administrative Agent for the ratable account of the Lenders the
aggregate outstanding principal amount of the Advances on each of the following
dates in an amount equal to the product of (a) the percentage set forth below
for such date and (b) the aggregate amount of (i) all Advances as of the date
such Advances were disbursed to the Borrower and (ii) the initial aggregate
amount of all Advances made pursuant to Section 2.14 prior to such date:
Date Percentage
---- ----------
September 30, 2005 0.25%
December 31, 2005 0.25%
March 31, 2006 0.25%
June 30, 2006 0.25%
September 30, 2006 0.25%
December 31, 2006 0.25%
March 31, 2007 0.25%
June 30, 2007 0.25%
September 30, 2007 0.25%
December 31, 2007 0.25%
March 31, 2008 0.25%
June 30, 2008 0.25%
September 30, 2008 0.25%
December 31, 2008 0.25%
March 31, 2009 0.25%
June 30, 2009 0.25%
September 30, 2009 0.25%
December 31, 2009 0.25%
March 31, 2010 0.25%
June 30, 2010 0.25%
September 30, 2010 0.25%
December 31, 2010 0.25%
March 8, 2011 94.50%
provided that the final principal installment shall be repaid on the Maturity
Date and in any event shall be in an amount equal to the aggregate principal
amount of the Advances outstanding on such date.
Section 2.06 Prepayments. (a) Optional. (i) Prior to the
amendment and restatement of the Security Agreement on the Second Draw Date,
the Borrower may prepay the Advances in accordance with Section 2.04(a) or
2.05(e) of the Security Agreement.
(ii) At any time following the amendment and restatement of
the Security Agreement on the Second Draw Date, the Borrower may, upon at least
one Business Day's notice in the case of Base Rate Advances and three Business
Days' notice in the case of Eurodollar Rate Advances, in each case to the
Administrative Agent stating the proposed date and aggregate principal amount
of the prepayment, and if such notice is given, the Borrower shall, prepay the
outstanding aggregate principal amount of the Advances in whole or ratably in
part, together with accrued interest to the date of such prepayment on the
aggregate principal amount prepaid; provided that (A) 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 (B) if any prepayment of a Eurodollar Rate
Advance is made on a date other than the last day of an Interest Period for
such Advance, the Borrower shall also pay any amounts owing pursuant to Section
9.04(d).
(iii) Notwithstanding anything in this Agreement or any other
Financing Document to the contrary, the Lenders hereby agree as between
themselves that if the Borrower makes a prepayment of the Advances (A) prior to
the amendment and restatement of the Security Agreement on the Second Draw Date
pursuant to Section 2.04(a) or 2.05(e) of the Security Agreement or (B)
following the amendment and restatement of the Security Agreement on the Second
Draw Date, pursuant to Section 2.06(a)(ii) hereof, then promptly upon the
Administrative Agent's receipt of the amount of any such prepayment pursuant to
Section 2.04(a) or 2.05(e) of the Security Agreement or Section 2.06(a)(ii)
hereof, as the case may be, such prepayment shall be applied to ratably repay
the Advances and to the remaining amortization installments in any one of the
following manners, as directed by the Borrower in writing to the Administrative
Agent (or, in the absence of any such direction received by the Administrative
Agent prior to the relevant prepayment date, in accordance with clause (1)
below): (1) in inverse order of maturity with respect to the remaining
amortization installments (including the final principal installment), (2) to
all remaining amortization installments (including the final principal
installment) on a pro rata basis or (3) to the next succeeding four
amortization installments as of the date of such prepayment in direct order of
maturity as among such four installments and, thereafter, to the remaining
amortization installments (including the final principal installment) on a pro
rata basis.
(b) Mandatory. (i) Prior to the amendment and restatement of
the Security Agreement on the Second Draw Date, the Borrower shall prepay the
Advances in accordance with Section 2.03 of the Security Agreement. Any such
prepayment shall be effected through the provisions set forth in this Section
2.06(b) and Section 2.06(c).
(ii) Following the amendment and restatement of the Security
Agreement on the Second Draw Date, the Borrower shall prepay the Advances at
the following times and the following amounts:
(A) Within 10 Business Days after receipt by the Borrower or
any of its Subsidiaries of cash proceeds in respect of any Asset Sale,
in an aggregate principal amount equal to 50% of the Net Cash Proceeds
received by the Borrower or any of its Subsidiaries in connection with
such Asset Sale; provided that the foregoing shall not apply to Asset
Sales, the proceeds (or any amount equal to anticipated proceeds) of
which are (1) used or committed to be used by the Borrower or any of
its Subsidiaries for the financing of fixed or capital assets to be
used in the business of the Borrower and its Subsidiaries prior to or
within 12 months after any such Asset Sale or (2) individually or in
the aggregate for any Asset Sales in any fiscal year less than
$10,000,000;
(B) Within three Business Days of receipt by the Borrower or
any of its Subsidiaries of Net Cash Proceeds relating to any Debt
Issuance, in an aggregate principal amount equal to 100% of the Net
Cash Proceeds from such Debt Issuance;
(C) No later than 90 days after the end of each fiscal year
of the Borrower, commencing with the fiscal year ending on December
31, 2005, in an aggregate principal amount equal to the Required
Prepayment Percentage of Excess Cash Flow for the fiscal year then
ended;
(D) (1) Subject to clause (2) below, upon receipt of Recovery
Event Proceeds by any Loan Party in respect of any Recovery Event or
any series of related Recovery Events in excess of $25,000,000, in an
aggregate principal amount equal to such Recovery Event Proceeds;
(2) Notwithstanding the foregoing, if the Borrower reasonably
believes, based on reasonable estimates of loss, that Recovery Event
Proceeds in respect of any Recovery Event or any series of related
Recovery Events will be in excess of $25,000,000, the Borrower may
elect to restore or replace the Asset (or portion thereof) affected by
such Recovery Event if the Borrower has delivered to the
Administrative Agent, within 180 days from the occurrence of such
Recovery Event, each of the following: (I) (aa) a detailed breakdown
of the nature and extent of such Recovery Event and (bb) a bona fide
assessment of the estimated cost and time needed to restore or replace
the Asset (or relevant portion thereof) in order for such Asset (or
relevant portion thereof) to operate at substantially the same level
as prior to the Recovery Event; (II) satisfactory evidence that such
Recovery Event Proceeds, together with any cash proceeds that have
been or are expected to be paid to the Borrower or any other Loan
Party in respect of such Recovery Event, and any other cash expected
to be made available by or on behalf of the Borrower or any other Loan
Party with respect to whose Asset the Recovery Event occurred, are or
are expected to be sufficient to make the necessary restorations or
replacements to such Asset (or relevant portion thereof); (III) an
Officer's Certificate of the Borrower certifying that (aa) it is
expected that all work necessary to restore or replace the Asset (or
relevant portion thereof) affected by the relevant Recovery Event (or
series of related Recovery Events) can be done within the time
periods, if any, required under any Material Contract relating to such
Asset (or relevant portion thereof); (bb) the Asset (other than any
Excluded Asset) subject to restoration/replacement will be subject to
the Liens of the Collateral Documents (whether by amendment to the
Collateral Documents or otherwise); (cc) all material Governmental
Approvals necessary to perform the work necessary to restore or
replace the Asset (or relevant portion thereof) affected by the
relevant Recovery Event (or series of related Recovery Events) have
been obtained (or are reasonably expected to be obtained without undue
delay or as needed); and (dd) the Asset (or relevant portion thereof)
once repaired/restored will be of similar value and general utility as
immediately prior to the loss; provided that, if the Borrower does not
deliver the information and Officer's Certificate set forth in this
clause (2) within such 180-day period, the Borrower shall, as soon as
reasonably practicable after such 180-day period, prepay the Advances
in an aggregate principal amount equal to such Recovery Event Proceeds
in accordance with clause (1) above; and
(E) Upon completion of the restoration and replacement in
respect of any Asset (or the relevant portion thereof) with respect to
which the Borrower delivered the information and Officer's Certificate
set forth in clause (D)(2) above, if the Recovery Event Proceeds in
respect of the relevant Recovery Event (or series of related Recovery
Events) exceed the cost of such restoration and replacement by more
than $1,000,000, in an aggregate principal amount equal to such amount
over $1,000,000; it being understood that the Borrower shall not be
required to use any Recovery Event Proceeds in respect of a Recovery
Event or series of related Recovery Events, which it believes, based
on reasonable estimates of loss, will be $25,000,000 or less in the
aggregate, to pay or as reimbursement for the costs of the necessary
repairs to or replacement of Assets affected by the relevant Recovery
Event pursuant to clause (D)(2) above and this clause (E).
(iii) Mandatory prepayments received by the Administrative
Agent pursuant to Section 2.05(a)(i), 2.05(a)(ii) or 2.05(a)(iii) of the
Security Agreement or pursuant to Section 2.06(b)(ii) shall be applied, first
to repay the Advances held by any Accepting Lender and to all remaining
amortization installments thereof (including the final principal installment)
in inverse order of maturity, and second, if any such amounts remain on deposit
in the Prepayment Account after giving effect to priority first of this clause
(iii), to the Borrower or as the Borrower may otherwise direct.
(c) Application of Prepayment Amounts. (i) Promptly upon
receipt of any mandatory prepayment pursuant to Section 2.05(a)(i), 2.05(a)(ii)
or 2.05(a)(iii) of the Security Agreement or pursuant to Sections 2.06(b)(ii)
and 2.06(d) (the amount of such prepayment being an "Advances Prepayment
Amount"), the Administrative Agent shall deposit such Advances Prepayment
Amount into the Prepayment Account pending application of such Advances
Prepayment Amount on the applicable Prepayment Date as set forth below.
(ii) So long as any Advances shall remain outstanding,
promptly after such receipt (the date of such receipt being the "Receipt
Date"), the Administrative Agent shall give written notice (a "Prepayment
Notice") to each Lender of (A) the aggregate amount of the Advances Prepayment
Amount, (B) the portion of the Advances Prepayment Amount available to prepay
the Advances held by such Lender, (C) the applicable Receipt Date for such
Advances Prepayment Amount and (D) the date on which such Advances Prepayment
Amount shall be applied as a prepayment of the Advances, which date shall be
(1) prior to the amendment and restatement of the Security Agreement on the
Second Draw Date, the 15th Business Day following the delivery of such
Prepayment Notice and (2) following the amendment and restatement of the
Security Agreement on the Second Draw Date, the fifth Business Day following
the delivery of such Prepayment Notice (each such date above being the
"Prepayment Date").
(iii) On or prior to 10:00 a.m. (New York City time) of the
second Business Day occurring prior to the applicable Prepayment Date, each
Lender shall notify the Administrative Agent as to whether it accepts all or
any portion of the Advances Prepayment Amount to be applied to prepay the
Advances held by such Lender as set forth in such Prepayment Notice. If any
Lender fails to give such notice by such time, such Lender (together with each
other Lender delivering a notice declining any such prepayment, a "Declining
Lender") shall be deemed to decline such prepayment, unless an Event of Default
shall have occurred and be continuing on the date on which such notice is due
in which case, such Lender shall be deemed to accept such prepayment. Any
Lender giving written notice of its intention to accept any prepayment or which
is deemed to accept any prepayment offer in accordance with the preceding
sentence is hereinafter referred to as an "Accepting Lender".
(iv) On the relevant Prepayment Date, an amount equal to that
portion of the Advances Prepayment Amount to be applied to prepay the Advances
of each Accepting Lender on such Advances Prepayment Date shall be withdrawn
from the Prepayment Account and paid to each such Accepting Lender as a
prepayment of the Advances of such Accepting Lender and, in the case of any
prepayment occurring after the amendment and restatement of the Security
Agreement on the Second Draw Date, any amounts remaining on deposit in the
Prepayment Account that would otherwise have been applied to prepay Advances
owing to Declining Lenders shall be applied pursuant to priority second of
Section 2.06(b)(iii).
(d) Prepayments Generally. Following the amendment and
restatement of the Security Agreement on the Second Draw Date and concurrently
with any prepayment pursuant to this Section 2.06, the Borrower shall pay to
the Administrative Agent all accrued interest, fees, costs and expenses, if
any, and any other amounts due under the Financing Documents in respect of the
principal amount of the Senior Debt Obligations so prepaid.
Section 2.07 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 (A) the Base Rate in effect from time to time and (B) the
Applicable Margin in effect from time to time, payable in arrears on
each Quarterly Date 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 (A)
the Eurodollar Rate for such Interest Period for such Advance and (B)
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 date 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 and overdue 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
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 such Advance pursuant to clause (a)(i) or
(a)(ii) above and (ii) to the fullest extent permitted by Applicable 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, in the case of interest, on the Type of
Advance on which such interest has accrued pursuant to clause (a)(i) or (a)(ii)
above and, in all other cases, on Base Rate Advances pursuant to clause (a)(i)
above.
(c) Notice of Interest Period and Interest Rate. Promptly
after receipt of a Notice of Borrowing pursuant to Section 2.02 or a Notice of
Conversion/Continuation pursuant to Section 2.03(b), the Administrative Agent
shall give notice to the Borrower and each relevant Lender of the applicable
Interest Period and the applicable interest rate determined by the
Administrative Agent for purposes of clause (a)(i) or (a)(ii) above.
Section 2.08 Fees. The Borrower shall pay to each Agent for
its own account such fees as may from time to time be agreed between the
Borrower and such Agent.
Section 2.09 Payments Generally; Pro Rata Treatment. (a) The
Borrower shall make each payment hereunder, under the Notes and under any
Financing Document to which the Borrower is a party (unless specifically
provided otherwise in such Financing Document) owing to any Lender, in full,
and without condition or deduction for any counterclaim, defense, recoupment or
setoff, not later than 11:00 a.m. (New York City time) on the day when due in
Dollars to the Administrative Agent at the Administrative Agent's Account in
immediately available funds, with payments being received by the Administrative
Agent after such time being deemed to have been received on the next succeeding
Business Day. The Administrative Agent will promptly thereafter cause like
funds to be distributed (i) if such payment by (or for the account of) the
Borrower is in respect of principal, interest or any other Obligation then
payable hereunder and under the Notes to more than one Lender, to such Lenders
for the account of their respective Applicable Lending Offices ratably in
accordance with the amounts of such respective Obligations then payable to such
Lenders and (ii) if such payment by (or for the account of) the Borrower is in
respect of any Obligation then payable hereunder to one Lender, to such Lender
for the account of its Applicable 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 9.07(d), from and after the effective date of
such Assignment and Acceptance, the Administrative 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) All payments under this Agreement and the other Financing
Documents to any Agent (whether for its own account or for the account of any
Lender) or the Depository Bank (as defined in the Security Agreement) shall be
made to such Agent or the Depository Bank, respectively.
(c) The Borrower hereby authorizes each Lender and each of
its Affiliates, if and to the extent payment owed to such Lender is not made
when due hereunder or under the Note held by such Lender, to charge from time
to time, to the fullest extent permitted by law, against any or all of the
Borrower's accounts (other than any Pledged Account or the Controlled Accounts)
with such Lender or such Affiliate any amount so due.
(d) All computations of interest based on the Base Rate or
the Federal Funds Rate shall be made by the Administrative 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 and of fees shall be made by the
Administrative 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 fees are payable. Each
determination by the Administrative Agent of an interest rate, fee or
commission hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(e) Whenever any payment hereunder or under any of 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
fees, 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.
(f) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to any
Lender hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each such Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
(g) If the Administrative Agent receives funds for
application to the Obligations owing to the Lenders under the Financing
Documents under circumstances for which the Financing Documents do not specify
the manner in which such funds are to be applied, the Administrative Agent
shall apply such funds to the ratable payment of all outstanding Obligations
owing in respect of the Advances.
(h) If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise), other than pursuant to Section 2.10, 2.11 or 2.12, as a result of
an assignment pursuant to Section 9.07 or as a result of the payment of an
Amendment Fee which has been offered to or is available to all Lenders on the
same terms, (a) on account of Obligations due and payable to such Lender
hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations due and
payable to such Lender at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lenders hereunder and under the Notes at
such time) of payments on account of the Obligations due and payable to all
Lenders hereunder and under the Notes at such time obtained by all the Lenders
at such time or (b) on account of Obligations owing (but not due and payable)
to such Lender hereunder and under the Notes at such time in excess of its
ratable share (according to the proportion of (i) the amount of such
Obligations owing to such Lender at such time to (ii) the aggregate amount of
the Obligations owing (but not due and payable) to all Lenders hereunder and
under the Notes at such time) of payments on account of the Obligations owing
(but not due and payable) to all Lenders hereunder and under the Notes at such
time obtained by all of the Lenders at such time, such Lender shall forthwith
purchase from the other Lenders such interests or participating interests in
the Obligations due and payable or owing to them, as the case may be, as shall
be necessary to cause such purchasing Lender to share the excess payment
ratably with each of them; provided that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each other Lender shall be rescinded and such other Lender shall repay to the
purchasing Lender the purchase price to the extent of such Lender's ratable
share (according to the proportion of (i) the purchase price paid to such
Lender to (ii) the aggregate purchase price paid to all Lenders) of such
recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such other 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 an interest or participating interest from another Lender
pursuant to this Section 2.09 may, to the fullest extent permitted by
Applicable Law, exercise all its rights of payment (including the right of
set-off) with respect to such interest or participating interest, as the case
may be, as fully as if such Lender were the direct creditor of the Borrower in
the amount of such interest or participating interest, as the case may be.
Section 2.10 Illegality. Notwithstanding any other provision
of this Agreement, if the introduction of or any change in or in the
interpretation of any law or regulation shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for any
Lender or its Eurodollar Lending Office to perform its obligations hereunder to
make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar
Rate Advances hereunder, then, on notice thereof and demand therefor by such
Lender to the Borrower through the Administrative Agent, (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 Administrative
Agent shall notify the Borrower that such Lender has determined that the
circumstances causing such suspension no longer exist; provided that, before
making any such demand, such Lender agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different Eurodollar Lending Office if the making of such a
designation would allow such Lender or its Eurodollar Lending Office to
continue to perform its obligations to make Eurodollar Rate Advances or to
continue to fund or maintain Eurodollar Rate Advances and would not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender.
Section 2.11 Increased Costs. (a) If, due to either (i) the
introduction of or any change (other than any change by way of imposition or
increase of reserve requirements included in the Eurodollar Rate Reserve
Percentage) 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 of making,
funding or maintaining Eurodollar Rate Advances (excluding, for purposes of
this Section 2.11, any such increased costs resulting from (A) Covered Taxes or
Other Taxes (as to which Section 2.12 shall govern) and (B) 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 Applicable 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 Administrative Agent), pay to
the Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost; provided,
however, that a Lender claiming additional amounts under this Section 2.11(a)
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Applicable Lending Office
if the making of such a designation would avoid the need for, or reduce the
amount of, such increased cost that may thereafter accrue and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender. A certificate as to the amount of such increased cost, submitted to the
Borrower by such Lender, shall be conclusive and binding for all purposes,
absent manifest error.
(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 and other commitments of such type, then, upon demand by
such Lender or such corporation (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to the Administrative Agent for
the account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender 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 by such Lender shall be conclusive and binding for all purposes,
absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances, the
Required Lenders notify the Administrative Agent that the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect the cost to
such Lenders of making, funding or maintaining their Eurodollar Rate Advances
for such Interest Period, the Administrative Agent shall forthwith so notify
the Borrower and the Lenders, whereupon (i) each such 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 Administrative Agent shall notify the Borrower that such
Lenders have determined that the circumstances causing such suspension no
longer exist.
Section 2.12 Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.09,
free and clear of and without deduction for any and all present or future
withholding taxes, including levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Administrative Agent, (i) taxes imposed on (or measured
by) its overall net income, or any franchise taxes or other similar taxes
imposed for the privilege of carrying on a business in corporate form (other
than taxes imposed as a result of entering into this Agreement or any other
Financing Document and the transactions contemplated hereby or thereby), or
taxes measured by its net worth or shareholder's capital, by the United States,
or by the jurisdiction under the laws of which such recipient is organized or
in which its Applicable Lending Office is located, (ii) any branch profits
taxes imposed by the United States or any similar tax imposed by any other
jurisdiction in which the Applicable Lending Office of any Lender is located
and (iii) withholding taxes excluded pursuant to clause (e) of this Section
2.12 (all such non-excluded taxes, including levies, imposts, deductions,
charges, withholdings and liabilities in respect of payments hereunder or under
the Notes being hereinafter referred to as "Covered Taxes"). If the Borrower
shall be required by law to deduct any Covered Taxes from or in respect of any
sum payable hereunder or under any Note to any Lender or the Administrative
Agent, (A) the sum payable by the Borrower shall be increased as may be
necessary so that after the Borrower and the Administrative Agent have made all
required deductions (including deductions applicable to additional sums payable
under this Section 2.12) such Lender or the Administrative Agent, as the case
may be, receives an amount equal to the sum it would have received had no such
deductions been made, (B) the Borrower shall make all such deductions and (C)
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, documentary, excise, property, intangible, mortgage recording or similar
taxes, charges or levies that arise from any payment made hereunder or under
the Notes or from the execution, delivery or registration of, performance
under, or otherwise with respect to, this Agreement or any other Financing
Document, but excluding all other U.S. federal taxes other than withholding
taxes (hereinafter referred to as "Other Taxes"). If revised disclosure
regulations under Section 6011 of the Internal Revenue Code are issued which
modify the definition of a "reportable transaction" so that it does not include
a transaction where the issuer of a debt instrument provides an indemnity for
taxes, in addition to withholding taxes imposed on interest paid on the debt
instrument, for purposes of subsections (a) and (b) of this Section 2.12, the
terms "Covered Taxes" and "Other Taxes" shall include all such taxes (other
than any taxes described in clauses (i), (ii) and (iii) of Section 2.12(a)
above), whether or not collected by way of withholding.
(c) The Borrower shall indemnify each Lender and the
Administrative Agent for and hold them harmless against the full amount of
Covered Taxes and Other Taxes, and for the full amount of taxes of any kind
imposed by any jurisdiction on amounts payable under this Section 2.12, imposed
on or paid by such Lender or the Administrative Agent (as the case may be) and
any liability (including penalties, additions to tax, interest and reasonable
expenses) arising therefrom or with respect thereto. This indemnification shall
be made within 30 days from the date such Lender or the Administrative Agent
(as the case may be) makes written demand therefor.
(d) As soon as practicable (but in no event later than 90
days) after the date of any payment of Covered Taxes, the Borrower shall
furnish to the Administrative Agent, at its address referred to in Section
9.02, the original or a certified copy of a receipt evidencing such payment.
Excluding payments made by the Administrative Agent, in the case of any payment
hereunder or under the Notes by or on behalf of the Borrower through an account
or branch outside the United States or by or on behalf of the Borrower by a
payor that is not a United States person, if the Borrower determines that no
Covered Taxes are payable in respect thereof, the Borrower shall furnish, or
shall cause such payor to furnish, to the Administrative Agent, at such
address, an opinion of counsel acceptable to the Administrative Agent stating
that such payment is exempt from Covered Taxes. For purposes of subsections (d)
and (e) of this Section 2.12, the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each Initial Lender and on the date
of the Assignment and Acceptance pursuant to which it becomes a Lender in the
case of each other Lender, and from time to time thereafter as requested in
writing by the Borrower (but only so long thereafter as such Lender remains
lawfully able to do so), provide each of the Administrative Agent and the
Borrower with two duly completed copies of (i) Internal Revenue Service Form
W-8ECI, or any successor form thereto, certifying that the payments received
from the Borrower hereunder are effectively connected with such Lender's
conduct of a trade or business in the United States; or (ii) Internal Revenue
Service Form W-8BEN, or any successor form thereto, certifying that such Lender
is entitled to benefits under an income tax treaty to which the United States
is a party which reduces the rate of withholding tax on payments of interest;
or (iii) Internal Revenue Service Form W-8BEN or any successor form thereto,
together with a certificate stating that (1) the Lender is not a bank for
purposes of Internal Revenue Code Section 881(c)(3)(A), or the obligation of
the Borrower hereunder is not, with respect to such Lender, pursuant to a loan
agreement entered into in the ordinary course of its trade or business, within
the meaning of that Section; (2) the Lender is not a 10% shareholder of the
Borrower within the meaning of Internal Revenue Code Section 871(h)(3) or
881(c)(3)(B); and (3) the Lender is not a controlled foreign corporation that
is related to the Borrower within the meaning of Internal Revenue Code Section
881(c)(3)(C); or (iv) such other governmental forms as may be applicable to the
Lender, including Forms W-8IMY or W-8EXP, which will reduce the rate of
withholding tax on payments of interest. Each Lender organized under the laws
of the United States that is not a corporation shall, on or prior to the date
of its execution and delivery of this Agreement in the case of each Initial
Lender and on the date of the Assignment and Acceptance pursuant to which it
becomes a Lender in the case of each other Lender, and from time to time as
requested in writing by the Borrower, provide each of the Administrative Agent
and the Borrower with two duly completed copies of Internal Revenue Service
Form W-9. Each Lender shall deliver such forms promptly upon the obsolescence
or invalidity of any form previously delivered by such Lender (but only to the
extent such Lender is lawfully able to do so). Each such Lender shall promptly
notify the Borrower at any time that it determines that it is no longer in a
position to provide any previously delivered certificate to the Borrower (or
any other form of certification adopted by the Internal Revenue Service for
such purpose). If the forms provided by a Lender at the time such Lender first
becomes a party to this Agreement indicate a United States interest withholding
tax rate in excess of zero, withholding tax at such rate shall be considered
excluded from Covered Taxes unless and until such Lender provides the
appropriate forms certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Covered Taxes
for periods governed by such forms; provided, however, that if, at the
effective date of the Assignment and Acceptance pursuant to which a Lender
becomes a party to this Agreement, the Lender assignor was entitled to payments
under subsection (a) of this Section 2.12 in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Covered Taxes shall include (in addition to withholding taxes
that may be imposed in the future or other amounts otherwise includable in
Covered Taxes) United States withholding tax, if any, applicable with respect
to the Lender assignee on such date. If any form or document referred to in
this subsection (e) requires the disclosure of information, other than
information necessary to compute the tax payable and information required by
the applicable Internal Revenue Service form (or related certificate described
above), that the applicable Lender reasonably considers to be confidential,
such Lender shall give notice thereof to the Borrower and shall not be
obligated to include in such form or document such confidential information.
(f) Notwithstanding the foregoing, for any period with
respect to which a Lender has failed to provide the Borrower with the
appropriate form described in subsection (e) above (other than if such failure
is due to a change in law occurring after the date on which a form originally
was required to be provided or if such form otherwise is not required under
subsection (e) above), such Lender shall not be entitled to indemnification
under subsection (a) or (c) of this Section 2.12 with respect to Covered Taxes
imposed by the United States by reason of such failure; provided, however, that
should a Lender become subject to Covered Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such Covered
Taxes.
(g) Any Lender claiming any additional amounts payable
pursuant to this Section 2.12 agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office or Domestic Lending Office if the
making of such a change would avoid the need for, or reduce the amount of, any
such additional amounts that may thereafter accrue and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.
(h) If any Lender determines, in its sole discretion, that it
has actually and finally realized, by reason of a refund, deduction or credit
of any Covered Taxes paid or reimbursed by the Borrower pursuant to subsection
(a) or (c) above in respect of payments under this Agreement or any Note, a
current monetary benefit that it would otherwise not have obtained, and that
would result in the total payments under this Section 2.12 exceeding the amount
needed to make such Lender whole, such Lender shall pay to the Borrower, with
reasonable promptness following the date on which it actually realizes such
benefit, an amount equal to the lesser of the amount of such benefit or the
amount of such excess, in each case net of all out-of-pocket expenses in
securing such refund, deduction or credit.
Section 2.13 Evidence of Debt. (a) Each Lender shall maintain
in accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from the Advances owing
to such Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder. The
Borrower agrees that upon notice by any Lender to the Borrower (with a copy of
such notice to the Administrative Agent) to the effect that a promissory note
or other evidence of indebtedness is required or appropriate in order for such
Lender to evidence (whether for purposes of pledge, enforcement or otherwise)
the Advances owing to, or to be made by, such Lender, the Borrower shall
promptly execute and deliver to such Lender, with a copy to the Administrative
Agent, a Note, in substantially the form of Exhibit C hereto, payable to the
order of such Lender in a principal amount equal to the Advances owing to, or
to be made by, such Lender. All references to Notes in the Financing Documents
shall mean Notes, if any, issued hereunder.
(b) The Register maintained by the Administrative Agent
pursuant to Section 9.07(d) shall include a control account, and a subsidiary
account for each Lender, in which accounts (taken together) shall be recorded
(i) the date and amount of each Advance outstanding hereunder, whether such
Advance bears interest at the Base Rate or the Eurodollar Rate, and, if
appropriate, the Interest Period applicable thereto; (ii) the terms of each
Assignment and Assumption delivered to and accepted by it; (iii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower to each Lender; and (iv) the amount of any sums received by the
Administrative Agent from the Borrower hereunder and each Lender's share
thereof.
(c) Entries made in good faith by the Administrative Agent in
the Register pursuant to subsection (b) above, and by each Lender in its
account or accounts pursuant to subsection (a) above, shall be prima facie
evidence of the amount of principal and interest due and payable or to become
due and payable from the Borrower to, in the case of the Register, each Lender
and, in the case of such account or accounts, such Lender, under this
Agreement, absent manifest error; provided, however, that the failure of the
Administrative Agent or such Lender to make an entry, or any finding that an
entry is incorrect, in the Register or such account or accounts shall not limit
or otherwise affect the obligations of the Borrower under this Agreement.
Section 2.14 Request for Commitments. (a) Provided there
exists no Default or Event of Default, upon notice to the Administrative Agent
(which shall promptly notify the Lenders), the Borrower may, from time to time,
request from the Lenders commitments to make new loans (to be Advances for all
purposes under this Agreement and the other Financing Documents) in an
aggregate amount (for all such requests) not exceeding $200,000,000 (the
"Incremental Commitments"); provided that (i) any such request for a commitment
shall be in a minimum amount of $50,000,000, (ii) the Borrower may make a
maximum of three such requests and (iii) the advances made pursuant to this
Section 2.14 in connection with such request shall initially be Base Rate
Advances. At the time of sending such notice, the Borrower (in consultation
with the Administrative Agent) shall specify the time period within which each
Lender is requested to respond (which shall in no event be less than ten
Business Days from the date of delivery of such notice to the Lenders). Each
Lender shall notify the Administrative Agent within such time period whether or
not it agrees to provide any such commitment and, if so, whether in an amount
equal to, greater than, or less than its ratable share of such requested
commitment. Any Lender not responding within such time period shall be deemed
to have declined to make any commitment pursuant to this Section 2.14. The
Administrative Agent shall notify the Borrower and each Lender of the Lenders'
responses to each request made hereunder. To achieve the full amount of a
requested commitment, the Borrower may also invite additional Eligible
Assignees to become Lenders pursuant to a joinder agreement in form and
substance satisfactory to the Administrative Agent and its counsel.
(b) If any Incremental Commitments are made in accordance
with this Section 2.14, the Administrative Agent and the Borrower shall
determine the effective date (the "Commitment Effective Date") and the final
allocation of such commitments. The Administrative Agent shall promptly notify
the Borrower and the Lenders of the final allocation of such commitments and
the Commitment Effective Date. As a condition precedent to such commitments,
the Borrower shall deliver to the Administrative Agent a certificate dated as
of the Commitment Effective Date (in sufficient copies for each Lender) signed
by a Responsible Officer of the Borrower (i) certifying and attaching the
resolutions adopted by the Borrower approving or consenting to such
commitments, and (ii) certifying that: (A) before and after giving effect to
such commitments, the representations and warranties of each Loan Party
contained in Article IV of this Agreement and the other Financing Documents are
true and correct on and as of the Commitment Effective Date, except to the
extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct as of such earlier date,
and except that for purposes of this Section 2.14, the representations and
warranties contained in Section 4.01(g) shall be deemed to refer to the most
recent statements furnished pursuant to Section 5.04, (B) before and after
giving effect to such commitments, no Default or Event of Default exists, (C)
the Borrower is in pro forma compliance with the covenants set forth in Section
5.03 for the period of four consecutive fiscal quarters ending on the last date
of the last completed fiscal quarter immediately preceding the proposed date of
incurrence of Debt pursuant to this Section 2.14(b) (on the assumption that
such incurrence of Debt under this provision occurred on the first day of such
four fiscal quarter period and using historical results of the Borrower and its
Subsidiary for such period), (D) all Governmental Approvals necessary for the
Borrower to incur the Debt to be incurred under this Section 2.14 have been
obtained, are in full force and effect and are not subject to appeal, except as
provided in Section 24 of PUHCA, (E) with respect to any Debt to be incurred
under this Section 2.14 prior to the amendment and restatement of the Security
Agreement on the Second Draw Date, the Borrower has complied with Section 2.13
of the Security Agreement and (F) with respect to any Debt to be incurred under
this Section 2.14 after the amendment and restatement of the Security Agreement
on the Second Draw Date, the Borrower has complied with the Real Property
Requirements.
(c) On each Commitment Effective Date, upon fulfillment of
the conditions set forth in clause (b) above, the Administrative Agent shall
notify the Lenders and the Borrower, on or before 12:00 p.m. (New York City
time) on the Business Day immediately preceding the proposed Commitment
Effective Date by facsimile of the new commitments to be made on such
Commitment Effective Date and the amount and final allocation of such
commitments applicable to each Lender. Each existing Lender making a commitment
as set forth above, and each Eligible Assignee becoming a Lender in accordance
with clause (a) above shall, before 2:00 p.m. (New York City time) on the
applicable Commitment Effective Date, make available to the Administrative
Agent in immediately available funds (i) in the case of any existing Lender, an
amount equal to such Lender's commitment and (ii) in the case of any such
Eligible Assignee, an amount equal to such Eligible Assignee's commitment. The
Administrative Agent shall promptly make such funds available to the Borrower.
(d) Each loan advanced by a Lender as a result of such Lender
making a commitment pursuant to this Section 2.14, and each loan advanced by
any Eligible Assignee becoming a Lender in accordance with clause (a) above,
shall be an "Advance" for all purposes hereunder. Each Eligible Assignee
becoming a Lender in accordance with clause (a) above shall be deemed to be a
"Lender" for all purposes hereunder.
(e) To the extent any Lender that makes an Advance pursuant
to this Section 2.14 already holds a Note or Notes, upon request the Borrower
shall promptly execute and deliver to such Lender, with a copy to the
Administrative Agent, a new Note, in substantially the form of Exhibit C
hereto, payable to the order of such Lender in a principal amount equal to the
Advance made by such Lender pursuant to this Section 2.14.
(f) The failure of any Lender that has agreed to an
Incremental Commitment pursuant to this Section 2.14 to make an Advance with
respect thereto shall not relieve any other Lender that has agreed to an
Incremental Commitment pursuant to this Section 2.14 of its obligation to make
an Advance under Section 2.14 but no Lender shall be responsible for the
failure of any other Lender to make any Advance under this Section 2.14 on any
Commitment Effective Date.
Section 2.15 Use of Proceeds. The proceeds of the Advances
shall be available (and the Borrower agrees that it shall use such proceeds)
solely (a) in the case of the initial Borrowing made on the Closing Date, to
refinance the aggregate principal amount outstanding under the Existing Credit
Agreement, (b) in the case of the Borrowing made on the Second Draw Date, to
refinance the aggregate principal amount outstanding under the Senior Secured
Notes on the Second Draw Date and (c) in the case of any additional borrowing
made pursuant to Section 2.14, for general corporate purposes.
ARTICLE III
CONDITIONS OF EFFECTIVENESS
Section 3.01 Conditions Precedent to Closing Date. No Lender
shall be required or obligated to make an Advance pursuant to clause (a) of
Section 2.01 on the Closing Date and on the terms set forth herein until the
first Business Day on which the following conditions precedent have been
satisfied (or waived, as evidenced by an "effective date" notice to the
Borrower from the Lenders), as determined by each Lender (provided that if the
Closing Date does not occur on or before August 31, 2005, the Commitments of
the Lenders shall terminate on such date):
(a) The Administrative Agent's receipt of the following, each
of which shall be originals or facsimiles (followed promptly by originals)
(unless otherwise specified), each properly executed by a Responsible Officer
of the signing Loan Party (if executed by such Loan Party), each dated the date
of the initial Borrowing (the "Closing Date") (or, in the case of certificates
of governmental officials, a recent date before the Closing Date) and each in
form and substance satisfactory to the Lenders (unless otherwise specified) and
in sufficient copies for the Agents and the Borrower (unless otherwise
specified):
(i) executed counterparts of this Agreement, sufficient in
number for distribution to the Administrative Agent, the Collateral
Agent and the Borrower;
(ii) to the extent requested, duly executed Notes of the
Borrower for the account of each Lender that has so requested,
complying with the provisions of Section 2.13;
(iii) an Officer's Certificate satisfying the requirements of
Section 2.13(c) of the Security Agreement, together with all
attachments thereto;
(iv) executed counterparts of an Accession Agreement to be
delivered to the Collateral Agent and the Intercreditor Agent pursuant
to Section 2.13(d) of the Security Agreement;
(v) executed counterparts of an amendment to the Security
Agreement such that the Security Agreement shall be amended
immediately after giving effect to the Borrowing on the Closing Date
and further amended and restated immediately after giving effect to
the Borrowing and the redemption of the Senior Secured Notes on the
Second Draw Date, in each case, as provided in the form attached
hereto as Exhibit E (the "SIA Amendment"), sufficient in number for
distribution to each Agent and the Borrower, together with:
(A) proper financing statements, duly completed for
filing under the Uniform Commercial Code of all jurisdictions
that the Administrative Agent may deem necessary or
reasonably desirable in order to perfect and protect the
liens and security interests created under the Collateral
Documents in favor of the Agents or the Lenders, covering the
Collateral described in the Collateral Documents;
(B) results of lien searches, dated on or no earlier
than 45 days before the Closing Date, for existing financing
statements filed in the jurisdictions referred to in Section
3.01(a)(v)(A) that name any Loan Party as debtor, together
with copies of all such financing statements; and
(C) evidence that all other action that the
Administrative Agent may deem necessary or desirable in order
to perfect and protect the Liens and security interests in
favor of the Agents or the Lenders created under the Security
Agreement and the Account Control Agreements (both before and
after giving effect to the Closing Date Transactions), other
than the Other Perfection Requirements, has been taken;
(vi) the Amended and Restated Mortgages (in recordable form),
duly executed and delivered by each of the Loan Parties party thereto,
so as to create or ensure the continued effectiveness of the Liens
created thereby, all as determined by the Administrative Agent and its
counsel, together with:
(A) confirmation from Chicago Title Insurance
Company or such other title insurers acceptable to the
Administrative Agent recording the Amended and Restated
Mortgages that duly executed counterparts of such Amended and
Restated Mortgages that are sufficient for recording in all
filing or recording offices that the Administrative Agent may
deem necessary or desirable in order to create valid and
subsisting Liens on the property described therein in favor
of the Collateral Agent for the benefit of the Secured
Parties have been delivered to Chicago Title Insurance
Company or such other title insurer, and evidence reasonably
satisfactory to the Administrative Agent that all filing and
recording taxes and fees have been paid;
(B) fully paid American Land Title Association
Lender's Extended Coverage title insurance policies in form
and substance, with endorsements and in amounts acceptable to
the Administrative Agent, issued by Chicago Title Insurance
Company or such other title insurers acceptable to the
Administrative Agent, insuring the Amended and Restated
Mortgages for the properties described therein to be valid
and subsisting Liens on the properties described therein,
free and clear of all defects (including mechanics' Liens and
materialmen's Liens) and encumbrances, excepting only
Permitted Liens (other than mechanic's liens and
materialmen's liens to be insured against under said
policies), and providing for such other affirmative insurance
(including endorsements for future advances under the
Financing Documents and for mechanics' and materialmen's
Liens) as the Administrative Agent may deem necessary or
desirable;
(C) at the Administrative Agent's option, either (i)
ALTA Surveys, for which all necessary fees (where applicable)
have been paid, dated no more than 60 days before the Closing
Date, of the properties described in the Amended and Restated
Mortgages, showing only such exceptions as are acceptable to
the Administrative Agent, and each certified to the
Collateral Agent and the issuer of the title insurance
policies referred to above in a manner satisfactory to the
Administrative Agent by a land surveyor duly registered and
licensed in the State in which the property described in such
survey is located and acceptable to the Administrative Agent
or (ii) affidavits of the Borrower and of the relevant Loan
Parties, dated as of the Closing Date, certifying to the
Administrative Agent, the Collateral Agent, and the Lenders
and the title insurance company recording the Amended and
Restated Mortgages that there have been no changes,
replacements or additions to the improvements on the
properties described in the Amended and Restated Mortgages
which encroach upon the property or rights of others, which
violate any setback or other zoning requirements or which
violate any agreements of the Borrower or such Loan Parties,
and otherwise in form and substance satisfactory to the
Administrative Agent;
(D) evidence that all action (including payment by
Borrower of all title search expenses, title insurance
premiums, recording fees, mortgage recording taxes and like
taxes) that the Administrative Agent may deem necessary or
desirable in order to preserve, perfect and protect the liens
and security interests created under the Collateral Documents
(other than the Other Perfection Requirements) securing all
Obligations of the Borrower and the Loan Parties under the
Financing Documents have been taken; and
(E) releases of the Term Mortgages not being amended
and restated pursuant to the Amended and Restated Mortgages
(in recordable form), duly executed, delivered and
acknowledged;
(vii) certified copies of resolutions of the Board of
Directors of each Loan Party (A) approving the Transactions to which
each such Loan Party is or is to be a party and (B) the execution,
delivery and performance of each Financing Document to which such Loan
Party is or is to be a party, and of all documents evidencing other
necessary corporate action and governmental and other third party
approvals and consents, if any, with respect to the Transactions and
each Financing Document to which such Loan Party is or is to be a
party;
(viii) copies of a certificate of the Secretary of State of
the jurisdiction of formation of each Loan Party, certifying (A) as to
a true and correct copy of the certificate of incorporation or
formation of such Loan Party and each amendment thereto on file in
such Secretary's office and (B) that (1) such amendments are the only
amendments to such certificate on file in such Secretary's office, (2)
such Loan Party has paid all franchise taxes to the date of such
certificate and (3) such Loan Party is duly formed and in good
standing or presently subsisting under the laws of the State of its
jurisdiction of formation;
(ix) copies of a certificate of the Secretary of State of
each jurisdiction (other than the jurisdiction of its formation) set
forth on Schedule 4.01(b) for each Loan Party stating that such Loan
Party is duly qualified to do business and in good standing as a
foreign corporation in such State and has filed all annual reports
required to be filed to the date of such certificate, as applicable;
(x) certificates signed on behalf of each Loan Party by its
Secretary or any Assistant Secretary (the statements made in which
certificate shall be true on and as of the Closing Date), certifying
(A) as to a true and correct copy of the Constituent Documents of such
Loan Party as of the Closing Date and each amendment to its
Constituent Documents, if any, from the date on which the resolutions
referred to in Section 3.01(a)(vii) were adopted to the Closing Date,
(B) the absence of any proceeding for the dissolution or liquidation
of such Loan Party; and (C) the names and true signatures of the
officers of such Loan Party authorized to sign each Financing Document
to which it is or is to be a party and the other documents to be
delivered hereunder and thereunder;
(xi) forecasts prepared by management of the Borrower of
balance sheets, income statements and cash flow statements of the
Borrower reasonably acceptable to the Administrative Agent on a
consolidated basis for each fiscal quarter commencing with the fiscal
quarter ending March 31, 2005 through the fiscal quarter ending
December 31, 2009;
(xii) legal opinions of appropriate counsel for the Loan
Parties, as to such matters as any Lender may reasonably request;
(xiii) legal opinions of appropriate counsel to the
Administrative Agent (including Shearman & Sterling LLP), as to such
matters as the Administrative Agent may reasonably request;
(xiv) an Officer's Certificate of the Borrower, attaching
copies of all Material Governmental Approvals and certifying that (A)
the copies of each of the Material Governmental Approvals delivered
pursuant to this Section 3.01(a)(xiv) are true, correct and complete
copies of such Material Governmental Approval; (B) each Governmental
Approval is in full force and effect, and is not subject to any
pending appeal, intervention or similar proceeding or any unsatisfied
condition that may result in modification or revocation thereof; (C)
any and all conditions set forth in all Governmental Approvals that
are then required to be satisfied have been satisfied; and (D) to the
best knowledge of the Responsible Officer providing such Officer's
Certificate, no event has occurred that could reasonably be expected
to result in the modification, cancellation or revocation of any
Governmental Approval;
(xv) a certificate from the Chief Financial Officer of the
Borrower attesting to the Solvency of the Borrower and its
Subsidiaries, when considered as a whole, immediately before and
immediately after giving effect to the Closing Date Transactions, in
each case giving pro forma effect to the Closing Date Transactions;
(xvi) certificates signed by a Responsible Officer of the
Borrower to the effect that (A) the representations and warranties
contained in Article IV are true and correct on and as of the Closing
Date as though made on and as of such date both immediately before and
immediately after giving effect to the Transactions being effected on
the Closing Date (the "Closing Date Transactions"); and (B) no Default
has occurred and is continuing or would result from the consummation
of the Closing Date Transactions; and
(xvii) audited Consolidated financial statements for the
Borrower and its Subsidiaries for the fiscal year ending December 31,
2004 and unaudited Consolidated financial statements for the Borrower
and its Subsidiaries for the fiscal quarter ending March 31, 2005.
(b) There shall exist no action, suit, investigation,
litigation or proceeding affecting the Borrower or any of its Subsidiaries or
any such Person's properties pending or threatened, before any court, before or
by any Governmental Authority or before any arbitrator which (i) could
reasonably be expected to have a Material Adverse Effect other than the matters
described on Schedule 4.01(f) (the "Disclosed Litigation"); (ii) purports to
affect the Transactions or any portion thereof, the ability of the Borrower or
any Loan Party to perform their respective obligations under the Financing
Documents; or (iii) purports to affect the legality, validity or enforceability
of any Financing Document, or the consummation of the Transactions.
(c) All Governmental Approvals and third party consents and
approvals necessary in connection with the Transactions shall have been
obtained (without the imposition of any conditions that are adverse to the
Lenders), shall be in full force and effect and not be subject to appeal and
shall not contain any conditions which are then required to be satisfied and
have not been satisfied; all then-applicable waiting periods in connection with
the Transactions shall have expired without any action being taken by any
competent authority, and no law or regulation shall be applicable, in each case
that restrains, prevents or imposes materially adverse conditions upon the
Transactions or the rights of the Borrower or its Subsidiaries to create or
maintain the perfection of any Lien on, any properties now owned or hereafter
acquired by any of them.
(d) Except for Disclosed Matters as of the date hereof, since
December 31, 2004, there shall not have occurred any Material Adverse Change.
(e) All conditions to the effectiveness of the SIA Amendment
set forth in Section 5 of the SIA Amendment shall have been satisfied.
(f) All required stamp duties, registration fees, filing
costs and other charges in connection with the execution, delivery, filing,
recording, perfection, priority or admissibility in evidence of the Financing
Documents, and the security interests purported to be granted by the Financing
Documents, required to be paid on or prior to the Closing Date shall have been
paid in full or an appropriate exemption therefrom shall have been obtained.
(g) All Taxes (i) due and payable on or prior to the Closing
Date in connection with the execution, delivery, filing, recording or
admissibility in evidence of the Financing Documents or to ensure the legality,
validity, enforceability, perfection or admissibility in evidence of the
Financing Documents and (ii) due and payable on or prior to the Closing Date by
the Borrower or any of its Subsidiaries in connection with the consummation of
the transactions contemplated by, and the performance of, the Financing
Documents shall, in the case of clauses (i) and (ii) of this Section 3.01(g),
have been duly paid in full.
(h) The representations and warranties of the Borrower and
each other Loan Party contained in Article IV and Article III of the Security
Agreement shall be true and correct, on and as of the Closing Date (immediately
before and immediately after the consummation of the Closing Date
Transactions), except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date.
(i) No Default shall exist, or would result from the
consummation of the Closing Date Transactions, including the making of the
initial Borrowing and the application of the proceeds of such Borrowing.
(j) The Borrower shall have paid all accrued fees of the
Agents, the Lenders and the Arranger Parties and all accrued expenses of the
Administrative Agent, the Collateral Agent and the Intercreditor Agent
(including under the Existing Credit Agreement and under any Fee Letter and all
fees and expenses payable pursuant to Section 9.04(a)) to the extent invoiced
at least 3 Business Days prior to the Closing Date.
Section 3.02 Conditions Precedent to Second Draw Date.
Following the Closing Date, no Lender shall be required or obligated to make
any further Advance pursuant to clause (b) of Section 2.01 on the Second Draw
Date and on the terms set forth herein until the first Business Day on which
the following conditions precedent have been satisfied (or waived, as evidenced
by notice to the Borrower from the Administrative Agent) (provided that if the
Second Draw Date does not occur on or before the date which is 60 days after
the Closing Date, the Unused Commitments of the Lenders shall terminate on such
date):
(a) The Administrative Agent's receipt of the following, each
of which shall be originals or facsimiles (followed promptly by originals)
(unless otherwise specified), each properly executed by a Responsible Officer
of the signing Loan Party (if executed by such Loan Party), each dated the date
of the second Borrowing (the "Second Draw Date") and each in form and substance
satisfactory to the Administrative Agent:
(i) a certificate signed by a Responsible Officer of each
Loan Party to the effect that no Default has occurred and is
continuing or would result from the consummation of the Transactions
being effected on the Second Draw Date (the "Second Draw Date
Transactions");
(ii) a copy of a redemption notice dated as of a date not
more than 60 days, and not less than 30 days, prior to the Second Draw
Date issued by the Borrower pursuant to Section 1105 of the Senior
Note Indenture providing for the redemption of the Senior Secured
Notes on the Second Draw Date;
(iii) a favorable opinion of Skadden, Arps, Slate, Meagher &
Flom LLP, counsel for the Loan Parties, in substantially the form of
Exhibit G hereto;
(iv) a favorable opinion of Hunton & Williams LLP, Virginia
counsel to Buchanan Energy Company of Virginia, LLC in substantially
the form of Exhibit H hereto; and
(v) a legal opinion of Shearman & Sterling LLP as to such
matters as the Administrative Agent may reasonably request.
(b) No Default shall exist, or would result from the
consummation of the Second Draw Date Transactions, including the making of the
second Borrowing on the Second Draw Date.
(c) The proceeds of the second Borrowing shall be required to
refinance the aggregate principal amount outstanding in respect of the Senior
Secured Notes on the Second Draw Date.
(d) All amounts outstanding under the Senior Unsecured B
Notes shall have been repaid or the Borrower shall have made arrangements
reasonably satisfactory to the Administrative Agent for the repayment of all
such amounts on the Second Draw Date.
Section 3.03 Determinations Under Section 3.01 and Section
3.02. For purposes of determining compliance with the conditions specified in
Section 3.01 and Section 3.02 each Lender shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to it unless an officer of the Administrative Agent responsible
for the transactions contemplated by the applicable Financing Documents shall
have received notice from such Lender prior to the Closing Date or the Second
Draw Date, as the case may be, specifying its objection thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the Borrower.
The Borrower represents and warrants to each Lender and the Administrative
Agent as of the date hereof, as of the Closing Date and as of the date of any
Borrowing made pursuant to Section 2.14, that:
(a) Each of the Borrower and its Subsidiaries (i) is a
limited liability company or corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its formation and (ii)
has all requisite corporate or limited liability company (as applicable) power
and authority (including all governmental licenses, permits and other
approvals) to carry on its business as now conducted, except, in the case of
clause (ii) only, where the failure to so qualify or be so licensed, or to have
such power and authority, could not reasonably be expected to have a Material
Adverse Effect. All of the outstanding Equity Interests in the Borrower have
been validly issued, are fully paid and non-assessable and, except for the ML
Interests, are owned by the Parent free and clear of all Liens other than
pursuant to the Collateral Documents and Liens for taxes, assessments and
governmental charges or levies.
(b) Set forth on Schedule 4.01(b) is a complete and accurate
list of all Subsidiaries of the Borrower as of the Closing Date, showing (as to
each such Subsidiary) the jurisdiction of its formation, the number of shares
of each class of its Equity Interests authorized, and the number outstanding,
on the date hereof and the percentage of each such class of its Equity
Interests, the identity of each owner thereof and the number of shares covered
by all outstanding options, warrants, rights of conversion or purchase and
similar rights at the date hereof. All of the outstanding Equity Interests in
(i) the Borrower's Subsidiaries (other than AGC) have been validly issued, are
fully paid and non-assessable and are owned by the Borrower or one or more of
its Subsidiaries free and clear of all Liens, except those created under the
Collateral Documents and (ii) AGC have been validly issued, are fully paid and
non-assessable and are owned by the Borrower (as to 77.03%), free and clear of
all Liens, or by MPC (as to 22.97%).
(c) The execution, delivery and performance by each Loan
Party of each Financing Document to which it is or is to be a party, and the
consummation of the Transactions, are within such Loan Party's corporate
powers, have been duly authorized by all necessary corporate action, and do not
and will not (i) contravene such Loan Party's Constituent Documents, (ii)
violate any law, rule, regulation (including Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (iii) conflict with or result in the breach of,
or constitute a default or require any payment to be made under, any material
contract, loan agreement, indenture (including the Bond Instruments or the
Senior Note Indenture), mortgage, deed of trust, lease or other instrument
binding on or affecting any Loan Party or any of its properties or (iv) except
for the Liens created under the Collateral Documents, result in or require the
creation or imposition of any Lien upon or with respect to any Assets of any
Loan Party except where, in the case of clauses (i) through (iv), the violation
of any such Constituent Documents, law, rule, regulation, permit, order, writ,
judgment, injunction, decree, determination or award, breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument, or creation or imposition of such Lien, could not be reasonably
expected to have a Material Adverse Effect. No consent or other action by any
Person other than the Required Creditors (as such term is defined in the
Security Agreement) and the acknowledgement of the Collateral Agent and the
Intercreditor Agent is necessary for the effectiveness of the SIA Amendment or
the amendment of the Security Agreement pursuant thereto.
(d) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority or any other third party
is required for (i) the due execution, delivery, recordation, filing or
performance by any Loan Party of any Financing Document to which it is or is to
be a party, or for the consummation of the Transactions, (ii) the grant by any
Loan Party of the Liens granted by it pursuant to the Collateral Documents,
(iii) the perfection or maintenance of the Liens created under the Collateral
Documents (including the priority nature thereof as stated in the Security
Agreement) other than (A) filing of the financing statements duly completed for
filing under the UCC covering the Collateral described in the Collateral
Documents, (B) the filing of the Amended and Restated Mortgages (and upon the
filing of such financing statements in the relevant jurisdictions and the
filing of the Amended and Restated Mortgages, all authorizations, approvals,
actions by, and notices to or filings with, any Governmental Authority required
for the perfection of the Liens created by the Collateral Documents (including
the priority nature thereof as stated in the Security Agreement), other than
the Other Perfection Requirements, shall have been duly obtained, taken and
filed) and (C) the Other Perfection Requirements or (iv) the exercise by any
Agent or Lender of its rights under the Financing Documents or the remedies in
respect of the Collateral pursuant to the Collateral Documents, except (1) for
the authorizations, approvals, actions, notices and filings listed on Part I of
Schedule 4.01(d) (the "Governmental Approvals"), all of which have been duly
obtained, taken, given or made, are in full force and effect, are held in the
name of a Loan Party, are not subject to appeal, intervention, rehearing,
reconsideration, or similar proceeding and are free from any conditions or
requirements that have not been satisfied, and are required to be satisfied, on
or prior to the dates as of which this representation and warranty is made or
reaffirmed, (2) for the Other Perfection Requirements, (3) for all other
authorizations, approvals, actions, notices and filings required under
Applicable Law for any exercise of possessory remedies with respect to the
Collateral (including with respect to foreclosure proceedings) and (4) as
disclosed on Part II of Schedule 4.01(d).
(e) This Agreement has been, and each other Financing
Document when delivered hereunder will have been, duly executed and delivered
by each Loan Party that is a party thereto. This Agreement is, and each other
Financing Document when delivered hereunder will be, the legal, valid and
binding obligation of each Loan Party that is a party thereto, enforceable
against such Loan Party in accordance with its terms, except to the extent
limited by any applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity.
(f) There is no action, suit, investigation, litigation or
proceeding, including any Environmental Action, which has been commenced
against the Borrower or any of its Subsidiaries or any of their respective
properties or to the Borrower's knowledge, pending (but not yet commenced) or
threatened against it or any of its Subsidiaries before any Governmental
Authority that (i) except for Disclosed Matters, if adversely determined, could
reasonably be expected to have a Material Adverse Effect (other than the
Disclosed Litigation) or (ii) affects or could be reasonably expected to affect
the legality, validity or enforceability of any Financing Document or the
consummation of the Transactions, and there has been no change in respect of
the Disclosed Litigation described on Schedule 4.01(f) which could reasonably
be expected to have a Material Adverse Effect.
(g) (i) To the extent applicable at the time this
representation and warranty is made, each of the financial statements of the
Borrower delivered by it to the Administrative Agent pursuant to Sections
3.01(a)(xvii), 5.04(b) and 5.04(c) is true, complete and correct in all
material respects as of the date of such statement, has been prepared in
accordance with GAAP (subject, in the case of interim financial statements, to
normal year-end audit adjustments and the absence of footnotes), and fairly
presents in all material respects the Borrower's financial condition and
results of operations as of the date thereof. Except (A) for Disclosed Matters
or (B) set forth in Schedule 4.01(g), since the date of its most recent
financial statements delivered under this Agreement, no event, condition,
occurrence or circumstance has existed or has occurred and is continuing which
could reasonably be expected to have a Material Adverse Effect.
(ii) Since December 31, 2004, no Material Adverse Change has
occurred, except (A) to the extent this representation and warranty is
made as of the Closing Date, for Disclosed Matters as of the date
hereof, and (B) to the extent this representation and warranty is made
at any time after the Closing Date, for Disclosed Matters as of the
Closing Date.
(h) No information, exhibit or report furnished by the Parent
or any Loan Party to any Agent, Arranger Party or any other Lender in
connection with the negotiation and syndication of the Financing Documents, the
consummation of the Transactions or pursuant to the terms of the Financing
Documents, when taken together with the information contained in the Parent's
most recent annual report on Form 10-K (the "Form 10-K") and in the Parent's
reports filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934 subsequent to the filing of the Form 10-K and the
Borrower's financial statements delivered pursuant to Section 3.01(a)(xvii),
taken as a whole, contains (as of the date on which such information is or was
provided to any Agent, Arranger Party or Lender, as modified or otherwise
supplemented by information so provided) any untrue statement of a material
fact or omits to state a material fact necessary to make the statements made
therein, in light of the circumstances under which they were, are or will be
made, not misleading; provided that to the extent any such information, exhibit
or report was based upon or constitutes a forecast or projection, the Borrower
represents only that such information was prepared in good faith on the basis
of the assumptions stated therein, which assumptions were believed by the
Borrower to be reasonable at the time (it being understood that such forecasts
or projections are subject to significant uncertainties and contingencies, many
of which are beyond the Borrower's control, and that the Borrower makes no
representation as to the attainability of such forecasts or projections or as
to whether such forecasts or projections will be achieved or materialize).
(i) The Borrower is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock, 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 for any purpose that
violates, or is inconsistent with, the provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve System, as in effect from time to
time. If requested by any Lender or the Administrative Agent, the Borrower will
furnish to the Administrative Agent and such Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-3 or FR Form
U 1, as applicable, referred to in Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
(j) Neither the Borrower nor any of its Subsidiaries is an
"investment company", as such term is defined in the 1940 Act.
(k) All filings and other actions necessary or desirable to
perfect and protect the security interest in favor of the Lenders and the
Agents in the Collateral created under the Collateral Documents have been duly
made or taken and are in full force and effect, and the Collateral Documents
create in favor of the Collateral Agent for the benefit of the Lenders a valid
and, together with such filings and other actions, perfected security interest
(in the order of priority contemplated by the Security Agreement) in the
Collateral, securing the payment of the Secured Obligations owed to the Lenders
and the Agents hereunder, and all filings and other actions (other than the
Other Perfection Requirements) necessary or desirable to perfect and protect
such security interest have been duly taken. The Loan Parties are the legal and
beneficial owners of the Collateral free and clear of any Lien, except for the
liens and security interests created or permitted under the Financing
Documents.
(l) The Borrower is, individually and together with its
Subsidiaries, Solvent.
(m) No ERISA Event has occurred with respect to any qualified
retirement Plan that has resulted in a material liability which could be
reasonably likely to have a Material Adverse Effect. Schedule B (Actuarial
Information) to the most recent annual report (Form 5500 Series) for each
qualified retirement Plan, filed with the Internal Revenue Service, is complete
and accurate, and since the date of such Schedule B there has been no material
adverse change which could reasonably be expected to have a Material Adverse
Effect on such funding status. Except as would not reasonably be expected to
have a Material Adverse Effect, neither the Loan Parties nor any ERISA
Affiliate (i) has incurred any Withdrawal Liability to any Multiemployer Plan,
or (ii) has been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been terminated, within the
meaning of Title IV of ERISA.
(n) (i) Except as disclosed on Schedule 4.01(n) or in the
Parent's filings with the SEC or as could not reasonably be expected to have a
Material Adverse Effect, the operations and properties of the Borrower and each
of its Subsidiaries comply in all respects with all applicable Environmental
Laws and Environmental Permits. Except as disclosed on Schedule 4.01(n) or in
the Parent's filings with the SEC or as could not reasonably be expected to
have a Material Adverse Effect, (A) all past non-compliance with such
Environmental Laws and Environmental Permits has been resolved without material
ongoing obligations or costs and (B) no circumstances exist that could
reasonably be expected to (1) form the basis of an Environmental Action against
the Borrower or any of its Subsidiaries or any of their properties or (2) cause
any such property to be subject to any restrictions on ownership, occupancy,
use or transferability under any Environmental Law.
(ii) Except as disclosed on Schedule 4.01(n) or in the
Parent's filings with the SEC or as could not reasonably be expected
to have a Material Adverse Effect, (A) none of the properties
currently or formerly owned or operated by the Borrower or any of its
Subsidiaries is listed or proposed for listing on the NPL or on the
CERCLIS or any analogous foreign, state or local list, (B) to its
knowledge, there are no and never have been any unlawful underground
or aboveground storage tanks or any unlawful surface impoundments,
septic tanks, pits, sumps or lagoons in which Hazardous Materials are
being or have been treated, stored or disposed on any property
currently owned or operated by the Borrower or any of its Subsidiaries
or on any property formerly owned or operated by the Borrower or any
of its Subsidiaries, and (C) Hazardous Materials have not been
released, discharged or disposed of on any property currently or
formerly owned or operated by the Borrower or any of its Subsidiaries.
(iii) Except as disclosed on Schedule 4.01(n) or in the
Parent's filings with the SEC or as could not reasonably be expected
to have a Material Adverse Effect, (A) neither the Borrower nor any of
its Subsidiaries is undertaking, and has not completed, either
individually or together with other potentially responsible parties,
any investigation or assessment or remedial or response action
relating to any actual or threatened release, discharge or disposal of
Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any governmental or regulatory
authority or the requirements of any Environmental Law and (B) all
Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or formerly owned or
operated by the Borrower or any of its Subsidiaries have been used,
sold or disposed of in a manner not reasonably expected to result in
material liability to the Borrower or any of its Subsidiaries.
(o) (i) Neither the Borrower nor any of its Subsidiaries is
party to any tax sharing agreement other than the Tax Allocation Agreement.
Insofar as then required thereunder, all amounts due and payable by the
Borrower or any of its Subsidiaries under the Tax Allocation Agreement have
been paid, and all amounts due and payable to the Borrower or any of its
Subsidiaries under any tax sharing agreement have been received (including
amounts by way of compensation for the use of tax benefits), except as could
not reasonably be expected to have a Material Adverse Effect.
(ii) The Borrower and each of its Subsidiaries has filed, has
caused to be filed or has been included in all tax returns (federal,
state, local and foreign) required to be filed and has paid all taxes
shown thereon to be due, together with applicable interest and
penalties, except (A) to the extent that the aggregate amount of any
unpaid taxes due, together with applicable interest and penalties,
does not exceed $25,000,000 or (B) to the extent such unpaid taxes are
subject to Contest.
(p) Set forth on Part I of Schedule 4.01(p) is a complete and
accurate list of all real property with a book value, as of the date hereof, in
excess of $5,000,000 owned by the Borrower or any of its Subsidiaries, showing,
as of the Closing Date, the street address, county or other relevant
jurisdiction, state, and record owner thereof, and showing, as of June 30,
2005, the book value thereof. The Borrower or such Subsidiary has, as of the
Closing Date, good, marketable and insurable fee simple title to all real
property on such Schedule, free and clear of all Liens, other than Liens
created or permitted under the Financing Documents. Since October 28, 2004,
neither the Borrower, any Subsidiary of the Borrower or any other Loan Party
has (i) sold, transferred or otherwise disposed of a Material Property, except
as disclosed in Part II of Schedule 4.01(p) or (ii) acquired a Material
Property, except as disclosed in Part III of Schedule 4.01(p). Since October
28, 2004 there have been (A) no changes, replacements or additions to the
improvements on the properties described in the Mortgages that are not the
subject of mortgagee title insurance which encroach upon the property or rights
of others, which violate any setback or other zoning requirements or which
violate any agreements of Borrower or any other Loan Party, except as disclosed
in Part IV of Schedule 4.01(p) and (B) no Liens or encumbrances affecting the
properties described in the Mortgages that are not the subject of mortgagee
title insurance, except Permitted Liens and except as disclosed on Part V of
Schedule 4.01(p).
(q) Set forth on Schedule 4.01(q) is a complete and accurate
list, as of the Closing Date, of all leases of real property under which the
Borrower or any of its Subsidiaries is the lessee and which provide for annual
lease payments in excess of $1,000,000, showing as of the Closing Date the
street address, county or other relevant jurisdiction, state, lessor, lessee,
expiration date and annual rental cost thereof.
(r) Each Material Contract has been duly authorized, executed
and delivered by each Loan Party thereto, is in full force and effect and is
binding upon and enforceable against each such Loan Party in accordance with
its terms, except to the extent limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
and, except as described in Schedule 4.01(r), there exists no default under any
Material Contract by any party thereto, except to the extent that any such
default could not reasonably be expected to have a Material Adverse Effect.
(s) Set forth on Schedule 4.01(s) is a complete and accurate
list as of the Closing Date, (except, solely with respect to the amount
thereof, as otherwise indicated thereon) of each Qualifying Obligation
constituting Surviving Debt owed by the Borrower or any of its Subsidiaries,
showing the amount, obligor or issuer, creditor and maturity thereof.
(t) Set forth on Schedule 4.01(t) is a complete and accurate
list as of the Closing Date of all Liens (other than Permitted Liens, Liens
created under the Collateral Documents and Liens specified in clause (iv)
below) on the Assets of the Borrower and its Subsidiaries, showing the
lienholder thereof and the Assets of the Borrower or any of its Subsidiaries
subject thereto. The property of the Borrower and its Subsidiaries is subject
to no Liens other than (i) Liens set forth on Schedule 4.01(t), (ii) Permitted
Liens, (iii) Liens created under the Collateral Documents, and (iv) Liens
existing as of the Closing Date but not set forth on Schedule 4.01(t) which
secure, individually, an amount of Obligations not to exceed $5,000,000 or
which secure, in the aggregate, an amount of Obligations not to exceed
$25,000,000.
(u) As of the Closing Date, set forth on Schedule 4.01(u) is
a complete and accurate list of all Investments held by the Borrower or any of
its Subsidiaries other than (i) Cash Equivalents, (ii) extensions of credit in
the ordinary course and (iii) Investments which have, in the aggregate, a fair
market value of less than $5,000,000.
(v) The Borrower is a "registered holding company", as such
term is defined in PUHCA. Except as could not reasonably be expected to have a
Material Adverse Effect, the Borrower and each of its Subsidiaries has all
authorizations and approvals from the Federal Energy Regulatory Commission or
other Governmental Authority required to provide the services and goods
(including electric capacity, energy and ancillary services) it sells,
including all necessary rate schedules on file and effective with the Federal
Energy Regulatory Commission for the Borrower and its Subsidiaries to sell
electricity at wholesale and authorizations necessary for the Borrower and its
Subsidiaries to engage in existing affiliate transactions.
(w) As of the Closing Date, neither the Borrower nor any of
its Subsidiaries directly or indirectly owns or operates any "qualifying
facilities," as defined in the Public Utility Regulatory Policies Act of 1978
and the regulations of the Federal Energy Regulatory Commission issued
thereunder.
(x) As of the Closing Date, neither the Borrower nor any of
its Subsidiaries directly or indirectly holds any license issued by the Nuclear
Regulatory Commission, or has any direct or indirect interest in, or directly
or indirectly possesses, uses, or engages in any activities or transactions
with respect to, any "byproduct material," "source material," or "special
nuclear material," as those terms are defined in the Atomic Energy Act of 1954
and the regulations of the Nuclear Regulatory Commission issued thereunder.
(y) The Borrower and its Subsidiaries have all necessary
property rights (including easements or other rights of ingress or egress)
required for the design, development, construction, supply, start-up,
commissioning, testing, operation or maintenance of each electric generating
power station owned, partially or wholly, or being developed by the Borrower or
such Subsidiary, and all services, electric and other interconnections,
transmission facilities, utilities, water supply and water discharge facilities
and materials for the Borrower and its Subsidiaries to develop, construct,
operate and maintain each electric power generating plant of the Borrower or
such Subsidiary are owned or leased by the Borrower or such Subsidiary, or are
required to be made available to the Borrower or such Subsidiary under the
Assigned Agreements (as defined in the Security Agreement), except for those
which are otherwise available to the Borrower or such Subsidiary at
commercially reasonable rates or the absence of which could not reasonably be
expected to have a Material Adverse Effect.
(z) Set forth on Schedule 4.01(z) is a true, complete and
correct description of all property and general liability insurance maintained
by or on behalf of the Borrower and its Subsidiaries as of the Closing Date. As
of the Closing Date, such insurance is in full force and effect and all
premiums that are due and owed have been duly paid, except where the failure to
pay could not reasonably be expected to have a Material Adverse Effect. None of
the Borrower or any of its Subsidiaries has any reason to believe that it will
not be able to renew its existing coverage as and when such coverage expires or
to obtain similar coverage from similar insurers at a substantially similar
cost as available to companies of a similar size operating in the same or
similar businesses.
(aa) None of the Excluded Subsidiaries or Excluded Entities
(other than AGC, Buchanan Generation, LLC, AES Gleason and AES Wheatland)
individually holds any Assets, including any deposit or securities accounts
with a book value in excess of $10,000,000.
(bb) Neither AES Gleason nor AES Wheatland holds any Assets
other than the Gleason and Wheatland generating facilities, respectively, and
other related non-material Assets.
(cc) No Default has occurred and is continuing.
Section 4.02 Representations and Warranties of the Other Loan
Parties. Each Loan Party other than the Borrower represents and warrants to
each Lender and the Administrative Agent as of the date hereof, as of the
Closing Date and as of the date of any Borrowing made pursuant to Section 2.14,
that:
(a) It (i) is a limited liability company or corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation and (ii) has all requisite corporate or limited
liability company power and authority (including all governmental licenses,
permits and other approvals) to carry on its business as now conducted, except,
in the case of clauses (ii) only, where the failure to so qualify or be so
licensed, or to have such power and authority, could not reasonably be expected
to have a Material Adverse Effect. All of the outstanding Equity Interests in
such Loan Party have been validly issued, are fully paid and non-assessable and
are owned by another Loan Party free and clear of all Liens other than Liens
created under the Collateral Documents.
(b) Its execution, delivery and performance of each Financing
Document to which it is or is to be a party, and the consummation of the
Transactions to which it is or is to be a party, are within its corporate
powers, have been duly authorized by all necessary corporate action, and do not
(i) contravene its Constituent Documents, (ii) violate any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
applicable to it, (iii) conflict with or result in the breach of, or constitute
a default or require any payment to be made under, any material contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument to
which it is a party or (iv) except for the Liens created under the Collateral
Documents, result in or require the creation or imposition of any Lien upon or
with respect to any of its Assets except where, in the case of clauses (i)
through (iv), the violation of any such Constituent Documents, law, rule,
regulation, permit, order, writ, judgment, injunction, decree, determination or
award, breach of any such contract, loan agreement, indenture, mortgage, deed
of trust, lease or other instrument, or creation or imposition of such Lien,
could not be reasonably expected to have a Material Adverse Effect.
(c) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority or any other third party
is required by it for (i) its due execution, delivery, recordation, filing or
performance of any Financing Document to which it is or is to be a party, (ii)
its grant of the Liens granted by it pursuant to the Collateral Documents,
(iii) the perfection or maintenance of the Liens created by it under the
Collateral Documents (including the priority nature thereof as stated in the
Security Agreement) other than (A) filing of the financing statements duly
completed for filing under the UCC covering the Collateral described in the
Collateral Documents, (B) the filing of the Amended and Restated Mortgages (and
upon the filing of such financing statements in the relevant jurisdictions and
the filing of the Amended and Restated Mortgages, all authorizations,
approvals, actions by, and notices to or filings with, any Governmental
Authority required for the perfection of the Liens created by the Collateral
Documents (including the priority nature thereof as stated in the Security
Agreement), other than the Other Perfection Requirements, shall have been duly
obtained, taken and filed) and (C) the Other Perfection Requirements), or (iv)
the exercise by any Secured Party of its rights under the Financing Documents
or the remedies in respect of the Collateral pursuant to the Collateral
Documents, except for (1) the Governmental Approvals, all of which have been
duly obtained, taken, given or made, are in full force and effect, are held in
the name of a Loan Party, are not subject to appeal, intervention, rehearing,
reconsideration, or similar proceeding and are free from any conditions or
requirements that have not been satisfied, and are required to be satisfied, on
or prior to the dates as of which this representation and warranty is made or
reaffirmed, (2) the Other Perfection Requirements, (3) all other
authorizations, approvals, actions, notices and filings required under
Applicable Law for any exercise of possessory remedies with respect to the
Collateral (including with respect to foreclosure proceedings) and (4) as
otherwise disclosed on Part II of Schedule 4.01(d).
(d) This Agreement has been, and each other Financing
Document to which it is or is to be a party when delivered hereunder will have
been, duly executed and delivered by it. This Agreement is, and each other
Financing Document to which it is or is to be a party when delivered hereunder
will be, its legal, valid and binding obligation, enforceable against it in
accordance with its terms, except to the extent limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general principles of
equity.
(e) There is no action, suit, investigation, litigation or
proceeding, including any Environmental Action, which has been commenced
against it or any of its Subsidiaries or any of their respective properties or
to its knowledge pending (but not yet commenced) or threatened against it or
any of its Subsidiaries before any court, governmental agency or arbitrator
that (i) except for Disclosed Matters, if adversely determined, could
reasonably be expected to have a Material Adverse Effect (other than the
Disclosed Litigation) or (ii) affects or could reasonably be expected to affect
the legality, validity or enforceability of any Financing Document, and there
has been no adverse change in the status, or financial effect on it, in respect
of the Disclosed Litigation described on Schedule 4.01(f).
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower. The
Borrower agrees that, so long as any Advance shall remain unpaid, the Borrower
will:
(a) Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply in all material respects with all Applicable Laws
(including those regarding the paying of dividends or the making of
distributions by the Borrower), except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
(b) Compliance with Environmental Laws. Except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect, (i) comply, and cause each of its Subsidiaries and all lessees and
other Persons operating or occupying its properties to comply, in all material
respects, with all applicable Environmental Laws and Environmental Permits,
(ii) obtain and renew, and cause each of its Subsidiaries to obtain and renew,
all Environmental Permits necessary for its operations and properties, and
(iii) conduct, and cause each of its Subsidiaries to conduct, any required
investigation, study, sampling and testing, and undertake any cleanup, removal,
remedial or other action necessary to remove and clean up all Hazardous
Materials from any of its properties required under any Environmental Law.
(c) Governmental Approvals. Obtain and maintain, and cause
each of its Subsidiaries to obtain and maintain, all Governmental Approvals
(including the Material Governmental Approvals) that are required of it for the
validity or enforceability of the Financing Documents and the Material
Contracts, the ongoing operations of their respective businesses and to issue,
declare or pay dividends or distributions, except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
(d) Payment of Taxes, Etc. Except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect, pay and
discharge, and cause each of its Subsidiaries to pay and discharge, before the
same shall become delinquent, (i) all taxes, assessments and governmental
charges or levies imposed upon it or upon its property and (ii) all lawful
claims that, if unpaid, will by law become a Lien upon its property not
permitted by Section 5.02(a) of this Agreement; provided that neither the
Borrower nor any of its Subsidiaries shall be required to pay or discharge any
such tax, assessment, charge or claim that is the subject of a Contest.
(e) Insurance. (i) Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which the Borrower or such Subsidiary
operates; provided that such insurance shall be in accordance with the terms
and provisions set forth in Section 5.10 of the Security Agreement and such
insurance shall satisfy such other requirements as may be provided pursuant to
the terms of each Material Contract.
(ii) Within 30 Business Days after the Closing Date, deliver
evidence to the Administrative Agent that the Collateral Agent has
been named as an additional insured (and, in the case of all property
and general liability insurance, as loss payee) with respect to all
property damage and liability insurance required under this Section
5.01(e).
(f) Preservation of Corporate Existence, Etc. Except as could
not reasonably be expected to have a Material Adverse Effect, preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain, its
existence, legal structure, rights (charter or statutory), permits, licenses,
approvals, franchises, and privileges in the jurisdiction of its formation and
in each other jurisdiction in which the conduct of its business requires it to
so qualify; provided, however, that the Borrower and its Subsidiaries may
consummate any merger or consolidation permitted under Section 5.02(d).
(g) Visitation Rights. At any reasonable time and from time
to time as may be reasonably desired by any of the Agents or any of the
Lenders, at the Borrower's reasonable cost and expense, permit any of the
Agents or any of the Lenders, or any agents or representatives thereof, to
examine and make copies of and abstracts from its records and books of account
of, and visit the properties of, the Borrower and any of its Subsidiaries, and
to discuss the affairs, finances and accounts of the Borrower and any of its
Subsidiaries with any of their officers or directors and with their independent
certified public accountants.
(h) Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account in accordance with
GAAP in effect from time to time.
(i) Maintenance of Properties, Etc. Operate, maintain and
preserve, and cause each of its Subsidiaries to operate, maintain and preserve,
all of its properties (other than any such properties as are immaterial or
non-essential to the conduct of business by the Borrower and its Subsidiaries,
taken as a whole) that are used or useful in the conduct of its business in
good working order and condition (ordinary wear and tear excepted) in
accordance with prudent practices then being utilized in the merchant,
non-regulated power generation industry and in accordance with Applicable Laws
(including Environmental Laws).
(j) Transactions with Affiliates. Other than as may be
required by PUHCA, conduct, and cause each of its Subsidiaries to conduct, (i)
all transactions with any of the Affiliates of the Borrower on terms that are
fair and reasonable and no less favorable to the Borrower or such Subsidiary
than it would obtain in a comparable arm's-length transaction with a Person not
an Affiliate of the Borrower and (ii) all transactions with a Person other than
an Affiliate of the Borrower on terms that are without regard to any benefit or
detriment to any Affiliate of the Borrower (other than any of the Borrower's
Subsidiaries); provided that this Section 5.01(j) shall not be deemed to permit
any transaction otherwise prohibited by the terms of this Agreement. Without
prejudice to the foregoing, the following transactions shall be deemed to be in
compliance with the first sentence of this clause (j): (A) any transaction
executed in accordance with the requirements of PUHCA, (B) any agreements made
by the Borrower or any of its Subsidiaries with a utility to provide provider
of last resort requirements, as such agreements are amended from time to time,
so long as such provider of last resort agreements are with an Affiliate of the
Borrower and approved by all applicable Governmental Authorities, (C) any
transaction authorized under a tariff or rate schedule which has been approved
by the Federal Energy Regulatory Commission and (D) any Asset sales, leases,
transfers, swaps, exchanges or other dispositions (including in respect of full
or partial ownership percentages of generating facilities, generating equipment
and related contract rights in power purchase agreements, leases, licenses,
permits and other Assets) as contemplated under Section 5.02(e)(ix). For the
avoidance of doubt, (I) any contracts or arrangements listed on Schedule
5.01(j) to which the Borrower or any Subsidiary is a party (and any renewals or
replacements thereof on substantially the same terms as determined in good
faith by a Responsible Officer of the Borrower or any Subsidiary of the
Borrower that is a party thereto) and (II) the Financing Documents shall each
be deemed to comply with this Section 5.01(j) except to the extent that the
Federal Energy Regulatory Commission or the SEC determines that any such
contract is not in conformance with Applicable Law and such non-conforming
contract is not on terms described in clauses (i) or (ii) of this Section
5.01(j).
(k) Further Assurances. (i) Promptly upon request by any
Agent or any Lender, correct, and cause each of its Subsidiaries promptly to
correct, any material defect or error that may be discovered in any Financing
Document or in the execution, acknowledgment, filing or recordation thereof.
(ii) Promptly upon request by the Administrative Agent, the
Collateral Agent or any Lender, do, execute, acknowledge, deliver,
record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, conveyances, pledge agreements, mortgages,
deeds of trust, trust deeds, assignments, financing statements and
continuations thereof, termination statements, notices of assignments,
transfers, certificates, assurances and other instruments as the
Administrative Agent, the Collateral Agent or any Lender may
reasonably require from time to time in order to (A) carry out more
effectively the purposes of the Financing Documents, (B) to the full
extent permitted by Applicable Law, subject any Loan Party's or any of
its Subsidiaries' properties, assets, rights or interests (other than
the Excluded Assets) to the Liens now or hereafter intended to be
covered by any of the Collateral Documents, (C) perfect and maintain
the validity, effectiveness and priority of any of the Collateral
Documents and any of the Liens intended to be created thereunder and
(D) assure, convey, grant, assign, transfer, preserve, protect and
confirm more effectively unto the Secured Parties the rights granted
or now or hereafter intended to be granted to the Secured Parties
under any Financing Document or under any other instrument executed in
connection with any Financing Document to which any Loan Party or any
of its Subsidiaries is or is to be a party, and cause each of its
Subsidiaries to do so.
(l) Preparation of Environmental Reports. If any Agent shall
reasonably believe that a material environmental event has occurred on any
parcel of real property owned or leased by the Borrower or any of its
Subsidiaries after the date hereof, provide to each Agent within 90 days after
receipt of a written request from such Agent in which the Agent describes in
reasonable detail the basis of such belief, at the expense of the Borrower, a
Phase I environmental site assessment report for the properties described in
such request prepared by an environmental consulting firm reasonably acceptable
to the Administrative Agent, indicating the presence or absence of Hazardous
Materials and the estimated cost of any legally required compliance, removal or
remedial action in connection with any Hazardous Materials on such properties.
Without limiting the generality of the foregoing, if any Agent determines at
any time that a material risk exists that any such report will not be provided
within the time referred to above, the Administrative Agent may, at the time
following the forty-fifth day after the request of such Agent, retain an
environmental consulting firm to prepare such report at the expense of the
Borrower, and the Borrower hereby grants and agrees to cause any Subsidiary
that owns any property described in such request to grant at the time of such
request to the Administrative Agent, such firm and any agents or
representatives thereof an irrevocable non-exclusive license, subject to the
rights of tenants, to enter onto their respective properties to undertake such
an assessment.
(m) Compliance with Terms of Leaseholds. Except where the
failure to do so either individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect, (i) make all payments and
otherwise perform all obligations in respect of all leases of real property to
which the Borrower or any of its Subsidiaries is a party, (ii) keep such leases
in full force and effect and not allow such leases to lapse or be terminated or
any rights to renew such leases to be forfeited or cancelled, (iii) notify the
Administrative Agent of any default by any party with respect to such leases
and (iv) cooperate with each Agent in all respects to cure any such default,
and cause each of its Subsidiaries to do so.
(n) Performance of Material Contracts. Except where the
failure to do so either individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect, (i) perform and observe, and
cause each of its Subsidiaries to perform and observe, all the terms and
provisions of all Material Contracts required to be performed or observed by
it, (ii) maintain each such Material Contract in full force and effect, (iii)
enforce each such Material Contract in accordance with its terms, (iv) take all
such action to such end as may be from time to time reasonably requested by the
Administrative Agent or the Collateral Agent and (v) upon reasonable request of
the Administrative Agent or the Collateral Agent, make to each other party to
each such Material Contract such demands and requests for information and
reports or for action as the Borrower or any of its Subsidiaries is entitled to
make under such Material Contract.
(o) Subsidiaries. (i) Promptly (but in any event no later
than 15 Business Days after any of the following occurs or, if any of the
following occurs in connection with a Permitted Asset Swap, no later than five
days after such occurrence), notify the Administrative Agent (A) if any
Subsidiary is formed or acquired by any Loan Party after the date hereof or (B)
if any Subsidiary ceases to be an Excluded Subsidiary.
(ii) Promptly (but in any event no later than 45 Business
Days or, if any of the following occurs in connection with a Permitted
Asset Swap, no later than five days after such occurrence) (A) after
the formation or acquisition after the date hereof of any new
Subsidiary or (B) after any Subsidiary ceases to be an Excluded
Subsidiary, deliver to the Administrative Agent (with copies to the
Administrative Agent, the Collateral Agent and the Intercreditor
Agent) the following: (1) an Assumption and Joinder Agreement executed
by such Subsidiary pursuant to which among other things, such
Subsidiary shall become a party hereto (any such Subsidiary, being an
"Additional Loan Party"), (2) certified copies of the Constituent
Documents of such Subsidiary, (3) certificates representing Equity
Interests in such Subsidiary (if any) accompanied by undated stock
powers (or an equivalent instrument) executed in blank, (4) a security
agreement supplement executed by such Subsidiary pursuant to which
such Subsidiary agrees to be a party to and be bound by the Security
Agreement, (5) acknowledgment copies of proper financing statements,
duly filed under the Uniform Commercial Code of all jurisdictions that
the Administrative Agent or the Collateral Agent may reasonably deem
necessary or desirable in order to perfect and protect the liens and
security interests created under the Security Agreement (in the order
of priority set forth therein) in respect of the Assets of such
Subsidiary, (6) completed requests for information listing the
financing statements referred to in clause (5) above and all other
effective financing statements filed in the jurisdictions referred to
in clause (5) above that name such Subsidiary as debtor, together with
copies of such other financing statements and (7) evidence that all
other action that the Administrative Agent may reasonably deem
necessary or desirable in order to perfect and protect the liens and
security interests created under the Security Agreement (in the order
of priority set forth therein) with respect to any of the Assets of
such Subsidiary.
(iii) Promptly but in any event within the time periods set
forth in Section 5.01(p), (A) after the formation or acquisition after
the date hereof of any new Subsidiary or (B) after any Subsidiary
ceases to be an Excluded Subsidiary, comply with the requirements set
forth below under Section 5.01(p) with respect to any real property
owned by such Subsidiary.
(p) Real Property. Promptly upon the request of the
Administrative Agent (but in any event within 75 days of such request) deliver
to the Collateral Agent (with copies to the Administrative Agent and the
Intercreditor Agent if applicable) the following: (i) mortgages, deeds of
trust, trust deeds, leasehold mortgages and leasehold deeds of trust (the "New
Mortgages") duly executed by the appropriate Loan Party in respect of the
Acquired Material Property, each such New Mortgage to be substantially in the
form of the most relevant Term Mortgage or Amended and Restated Mortgage, as
applicable, (based on, for example, the state and county in which such New
Mortgage will be recorded) recorded as of the Closing Date (the "Recorded Term
Mortgages"), with such changes to account for (A) local law matters as advised
by the Administrative Agent's local counsel, (B) property/transaction specific
matters that are necessary or desirable in the opinion of the Administrative
Agent and (C) any other matters that are necessary or desirable in the opinion
of the Administrative Agent; provided that if the grantor/mortgagor of a New
Mortgage is the Borrower, the starting form for such New Mortgage shall be a
Recorded Term Mortgage in which Borrower was the grantor/mortgagor, and if the
grantor/mortgagor of a New Mortgage is a Loan Party (other than Borrower), the
starting form of such New Mortgage shall be a Recorded Term Mortgage in which a
Loan Party (other than Borrower) was the grantor/mortgagor and provided further
that if the property to be encumbered by a New Mortgage is in a state in which
no Recorded Term Mortgage exists, the starting form to be used shall be the
most suitable form from among the Recorded Term Mortgages, as determined by the
Administrative Agent; (ii) confirmations from the title insurance company
recording the New Mortgages that duly executed counterparts of such New
Mortgages that are sufficient for recording in all filing or recording offices
that the Administrative Agent may deem necessary or desirable in order to
create valid and subsisting Liens on the property described therein in favor of
the Collateral Agent for the benefit of the Lenders and the Collateral Agent
have been delivered to such title insurance company, and evidence reasonably
satisfactory to the Administrative Agent that all filing and recording taxes
and fees have been paid; (iii) fully paid American Land Title Association
Lender's Extended Coverage title insurance policies in form and substance, with
endorsements and in amounts acceptable to the Administrative Agent, issued by
title insurers acceptable to the Administrative Agent, insuring the New
Mortgages to be valid and subsisting Liens on the properties described therein,
free and clear of all defects (including mechanics' Liens and materialmen's
Liens) and encumbrances, excepting only Permitted Liens (other than mechanic's
liens and materialmen's liens to be insured against under said policies), and
providing for such other affirmative insurance as the Administrative Agent may
deem necessary or desirable; (iv) ALTA Surveys (for which all necessary fees
(where applicable) have been paid) of the Material Acquired Property dated
reasonably near the date of such delivery; (v) confirmation from the title
insurance company recording such New Mortgages with respect to the validity and
(subject to the exceptions and encumbrances permitted therein) the priorities
of such New Mortgages; and (vi) evidence that all action (including payment by
the Borrower to the title insurance company recording such New Mortgages of the
amount previously notified by such title insurance company to the Borrower as
necessary for it to record such New Mortgages) that the Administrative Agent
may deem necessary or desirable in order to perfect and protect the liens and
security interests created under the Collateral Documents (other than the Other
Perfection Requirements) securing all Obligations of the Borrower and the Loan
Parties under the Financing Documents have been taken; provided that in the
case of any Acquired Material Property acquired by or otherwise transferred to
the Borrower or any of its Subsidiaries in connection with a Permitted Asset
Swap, the Borrower shall comply with the requirements of the first sentence of
this Section 5.01(p) no later than five days after such acquisition or
transfer, whether or not the Administrative Agent shall have made a request
therefor. The Borrower shall, as soon as reasonably practicable but in any
event no later than 90 days (with respect to matters that can be satisfied by
the payment of a liquidated sum) and 120 days (with respect to all other
matters) after the Closing Date, cause the Liens and all matters which can be
satisfied by the payment of a liquidated sum disclosed on Part IV and Part V of
Schedule 4.01(p) to be removed, cured or otherwise corrected, in each case, to
the reasonable satisfaction of the Administrative Agent and shall use
commercially reasonable efforts to cause all other matters disclosed on Part IV
and Part V of Schedule 4.01(p) to be removed, cured or otherwise corrected, in
each case, to the reasonable satisfaction of the Administrative Agent. In the
event that any additional Advances are made hereunder pursuant to Section 2.14,
the Borrower shall, within twenty (20) days of each such Advance, obtain from
each title insurance company that has issued a mortgagee title insurance
policy, an endorsement (in form and substance reasonably satisfactory to the
Administrative Agent) covering each such additional Advance.
(q) Taxes. Pay in full when due (or obtain an appropriate
exemption therefrom) all Taxes (i) due and payable after the Closing Date in
connection with the execution, delivery, filing, recording or admissibility in
evidence of the Financing Documents or to ensure the legality, validity,
enforceability, perfection or admissibility in evidence of the Financing
Documents and (ii) due and payable from time to time by the Borrower or any of
its Subsidiaries in connection with the consummation of the transactions
contemplated by, and the performance of, the Financing Documents.
(r) Stamp Duties, Etc. Pay in full when due (or obtain an
appropriate exemption therefrom) all required stamp duties, registration fees,
filing costs and other charges in connection with the execution, delivery,
filing, recording, perfection, priority or admissibility in evidence of the
Financing Documents (and the security interests purported to be granted
thereby) required to be paid from time to time.
(s) Use of Proceeds. Use the proceeds of any Borrowing in
accordance with the applicable clause in Section 2.15.
Section 5.02 Negative Covenants of the Borrower. The Borrower
agrees that, so long as any Advance shall remain unpaid, the Borrower will not,
at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of its properties of any character (including
accounts) whether now owned or hereafter acquired, or sign or file or suffer to
exist, or permit any of its Subsidiaries to sign or file or suffer to exist,
under the Uniform Commercial Code of any jurisdiction, a financing statement
that names the Borrower or any of its Subsidiaries as debtor, or sign or suffer
to exist, or permit any of its Subsidiaries to sign or suffer to exist, any
security and intercreditor agreement authorizing any secured party thereunder
to file such financing statement, or assign, or permit any of its Subsidiaries
to assign, any accounts or other right to receive income, except:
(i) Liens upon or in the Group Assets securing Debt of the
Borrower permitted under (A) Section 5.02(b)(i), (B) Section
5.02(b)(ii), (C) Section 5.02(b)(iii) to the extent such Debt is
outstanding under Pollution Control Bonds or, on or prior to the
Second Draw Date, the Senior Notes, (D) Section 5.02(b)(xx) or (E)
Section 5.02(b)(xvi) to the extent such Permitted Refinancing Debt is
incurred in respect of any of the foregoing;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described on
Schedule 4.01(t);
(iv) purchase money Liens upon or in real property, physical
assets or equipment acquired or held by the Borrower or any of its
Subsidiaries in the ordinary course of business to secure the purchase
price of such real property, physical assets or equipment or to secure
Debt permitted to be incurred pursuant to Section 5.02(b)(vi) incurred
solely for the purpose of financing the acquisition, construction or
improvement of any such real property, physical assets or equipment to
be subject to such Liens, or Liens existing on any such real property,
physical assets or equipment at the time of acquisition (other than
any such Liens created in contemplation of such acquisition that do
not secure the purchase price), or extensions, renewals or
replacements of any of the foregoing for the same or a lesser amount;
provided, however, that (A) such Lien is incurred and the Debt secured
thereby is created within 90 days after the acquisition, completion of
construction or completion of improvement thereof (as applicable), and
(B) no such Lien shall extend to or cover any property, physical
assets or equipment other than the real property, physical assets or
equipment being acquired, constructed or improved; and provided
further that the aggregate principal amount of the Debt secured by
Liens permitted by this clause (iv) shall not exceed the amount
permitted under Section 5.02(b)(vi) at any time outstanding;
(v) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(vii); provided that no such Lien shall
extend to or cover any Collateral or Assets other than the Assets
subject to such Capitalized Leases;
(vi) Liens on cash or Cash Equivalents (A) deposited in
margin accounts with or on behalf of futures contract brokers or paid
over to other contract counterparties or (B) pledged or deposited as
collateral to a contract counterparty to secure obligations with
respect to (1) contracts (other than for Debt) for commercial and
trading activities in the ordinary course of business for the
purchase, transmission, distribution, sale, storage, lease or hedge of
any energy related commodity or (2) Hedge Agreements representing
commodity price contracts, transmission agreements or derivatives or
interest rate derivatives to the extent that the Borrower or such
Subsidiary is permitted to enter into any such Hedge Agreement
pursuant to Section 5.02(b)(v);
(vii) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Borrower or any
Subsidiary of the Borrower or becomes a Subsidiary of the Borrower;
provided that such Liens were not created in contemplation of such
merger, consolidation or investment and do not extend to any Assets
other than those of the Person merged into or consolidated with the
Borrower or such Subsidiary or acquired by the Borrower or such
Subsidiary;
(viii) Liens granted by the Borrower or any of its
Subsidiaries in favor of a commercial trading counterparty, a futures
contract broker or other contract counterparty on accounts receivable
arising under, commodities covered by, other obligations owed to, and
other rights of the Borrower or any of its Subsidiaries, in each case,
under any contract (other than for Debt) entered into in the ordinary
course of business and to the extent permitted under Section 5.02(m)
in connection with commercial and trading activities (including any
netting agreement) to secure the Borrower's or such Subsidiary's
obligations under such contract; provided that such Liens are granted
in the ordinary course of business and when granted, do not secure
obligations which are past due;
(ix) Liens granted on cash or Cash Equivalents to defease
Debt that could be prepaid without violating Section 5.02(k);
(x) Liens granted over cash or Cash Equivalents constituting
proceeds from any sale or disposition of Assets permitted under
Section 5.02(e) deposited in escrow accounts to secure Debt permitted
to be incurred under Section 5.02(b)(xi) in respect of such sale or
disposition;
(xi) other Liens affecting property with an aggregate fair
market value not to exceed $25,000,000;
(xii) the replacement, extension or renewal of any Lien
permitted by clauses (iii), (iv), (v), (vii) or (xi) above upon or in
the same property theretofore subject thereto and, if such Lien
secured Debt, upon the incurrence of any Permitted Refinancing Debt in
respect of such Debt secured to the extent such Permitted Refinancing
Debt is incurred in accordance with Section 5.02(b);
(xiii) subject to the PNC Control Agreement, Liens granted in
favor of PNC Bank, National Association over cash, checks, deposit
accounts, securities accounts and Cash Equivalents of the Borrower or
its Subsidiaries held by PNC Bank, National Association from time to
time to secure Debt permitted to be incurred under Section
5.02(b)(xix); and
(xiv) Liens upon or in pollution control equipment at the
Hatfield's Ferry Facility or the Armstrong Facility to secure Debt
permitted to be incurred pursuant to Section 5.02(b)(xxiv) incurred
solely to finance the acquisition and installation of such pollution
control equipment, or extensions, renewals or replacements of any of
the foregoing for the same or a lesser amount; provided, however, that
(A) such Lien is incurred and the Debt secured thereby is created
within 90 days after the completion of the installation thereof, and
(B) no such Lien shall extend to or cover any property, physical asset
or equipment other than such pollution control equipment and other
immaterial related Assets; and provided further that the aggregate
principal amount of the Debt secured by Liens permitted by this clause
(xiv) shall not exceed the amount permitted under Section
5.02(b)(xxiv) at any time outstanding.
(b) Debt. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Debt,
except:
(i) Debt of the Borrower under the Financing Documents
(including Debt incurred pursuant to Section 2.14);
(ii) secured Debt of the Borrower in an aggregate principal
amount, when combined with the aggregate principal amount of Debt
incurred pursuant to Section 2.14, not to exceed $200,000,000 at any
time outstanding;
(iii) Surviving Debt;
(iv) unsecured Debt owed to the Parent, the Borrower or any
Subsidiary of the Borrower so long as such Debt is subordinated to the
Advances in accordance with the Affiliate Subordination Terms and to
the extent such Debt is owed to any Loan Party such Debt constitutes
Pledged Debt;
(v) Debt in respect of Hedge Agreements entered into in the
ordinary course of business and consistent with prudent business
practice to hedge or mitigate (A) risks to which the Borrower or any
Subsidiary is exposed in the conduct of its business or the management
of its liabilities as a result of fluctuations in the prices of
transmission, capacity or energy (or of any fuel required for the
generation thereof) or (B) risks in respect of interest rate
fluctuations; provided that in each case such Hedge Agreement shall
not have been entered into for speculative purposes;
(vi) Debt incurred to finance all or any part of the
acquisition, construction or improvement of any real property,
physical assets or equipment (including Capital Expenditures);
provided that such Debt is incurred prior to or within 90 days after
such acquisition or the completion of construction or completion of
improvement or such Capital Expenditures; provided further that the
aggregate principal amount of Debt permitted under this Section
5.02(b)(vi), when combined with the aggregate principal amount of Debt
incurred in connection with Capitalized Leases permitted under Section
5.02(b)(vii) shall not exceed $100,000,000 at any time outstanding;
(vii) Capitalized Leases in an aggregate principal amount,
when combined with the aggregate principal amount of all Debt incurred
pursuant to Section 5.02(b)(vi), not in excess of $100,000,000 at any
time outstanding;
(viii) Debt of any Person that (x) is merged into or
consolidated with the Borrower or any Subsidiary or (y) becomes a
Subsidiary of the Borrower after the date hereof in either case in
accordance with the terms of Section 5.02(f); provided that (A) such
Debt is existing at the time such Person becomes a Subsidiary of the
Borrower (other than Debt incurred solely in contemplation of such
Person becoming a Subsidiary of the Borrower), (B) immediately after
giving effect to the investment in such Subsidiary, no Default or
Event of Default shall have occurred and be continuing and (C) such
Debt is non-recourse to the Borrower or any other Subsidiary of the
Borrower (other than with respect to such Person and its Subsidiaries
to the extent such Debt was with recourse to such Person and/or its
Subsidiaries at the time of such investment);
(ix) Debt arising from the honoring by a bank or financial
institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business, so long as such Debt is
covered within five Business Days;
(x) Debt in respect of workers' compensation claims,
self-insurance obligations, bankers' acceptance and performance and
surety bonds provided by the Borrower or any of its Subsidiaries in
the ordinary course of business;
(xi) Debt that may be deemed to arise as a result of
agreements of the Borrower or any of its Subsidiaries providing for
indemnification, adjustment of purchase price or any similar
obligations, in each case, incurred in connection with the sale or
disposition of any business, Assets or Equity Interests in any
Subsidiary of the Borrower consummated in accordance with the terms of
Section 5.02(e) in an amount not to exceed with respect to any such
sale or disposition the amount of gross proceeds received by the
Borrower or any of its Subsidiaries in connection with such sale or
disposition;
(xii) Debt of the Borrower represented by letters of credit,
surety bonds, Contingent Obligations and performance bonds supporting
obligations of the Borrower or its Subsidiaries so long as, after
giving effect to such letters of credit, surety bonds, Contingent
Obligations and performance bonds (and the Investment represented
thereby), the Borrower would be in compliance with Section 5.02(f);
(xiii) reimbursement obligations owed to Affiliates for
amounts paid on behalf of the Borrower or any of its Subsidiaries by
the Parent or any of its Subsidiaries in accordance with applicable
requirements under PUHCA with respect to the provision of goods or
services to the Borrower or any such Subsidiary;
(xiv) unsecured Debt of the Borrower and its Subsidiaries not
to exceed $100,000,000 at any time outstanding;
(xv) unsecured Debt in respect of obligations of the Borrower
or any of its Subsidiaries to pay the deferred purchase price of goods
or services or progress payments in connection with such goods and
services; provided that with respect to any material invoice, such
obligations are (A) incurred in connection with open accounts extended
by suppliers on customary trade terms (which require that all such
payments be made within 90 days of the incurrence of the related Debt)
in the ordinary course of business and not in connection with the
borrowing of money and (B)(I) not more than 90 days past due or (II)
subject to any Contest, provided that the aggregate principal amount
of such Debt subject to Contest shall not exceed $15,000,000;
(xvi) Permitted Refinancing Debt incurred in respect of any
Debt permitted under clauses (i), (ii), (iii), (vi), (vii), (viii),
(xiv), (xx) and (xxiv) or this clause (xvi);
(xvii) unsecured Debt for Borrowed Money of the Borrower and
its Subsidiaries incurred in the ordinary course of business, maturing
within one year from the date incurred, and aggregating not more than
$20,000,000 at any one time outstanding;
(xviii) additional unsecured Debt for Borrowed Money issued
or incurred the proceeds of which are used to make Capital
Expenditures required to be made in order to comply with Applicable
Law regarding the environment or the transmission of electricity or
natural gas; provided that (A) the scheduled maturity date for such
Debt is a date that is at least six calendar months after the Maturity
Date and does not require any scheduled amortization or mandatory
prepayments thereof prior to such date, (B) such Debt contains
covenants and events of default which, taken as a whole, are
determined in good faith by a Responsible Officer of the Borrower to
be no less favorable to the Borrower or the applicable Subsidiary in
any material respect than the covenants and Events of Default
applicable under this Agreement, (C) no Default or Event of Default
shall have occurred and be continuing, and (D) prior to the incurrence
or issuance of such Debt the Borrower shall have delivered to the
Administrative Agent a certificate demonstrating pro forma compliance
with the covenants set forth in Section 5.03 for the period of four
consecutive fiscal quarters ending on the last date of the last
completed fiscal quarter immediately preceding the proposed date of
incurrence of such Debt (on the assumption that such incurrence of
Debt under this clause occurred on the first day of such four fiscal
quarter period and using historical results of the Borrower and its
Subsidiaries for such period);
(xix) secured or unsecured Debt owed to PNC Bank, National
Association from time to time in connection with the extension of
credit to the Borrower or its Subsidiaries for the account of one or
more employees or departments of the Borrower or its Affiliates in
respect of costs and expenses incurred by such employees or
departments in connection with the conduct of business on behalf of
the Borrower or its Subsidiaries in an aggregate principal amount not
to exceed $6,000,000 at any one time outstanding;
(xx) Debt of the Borrower or its Subsidiaries in an aggregate
principal amount not to exceed $86,000,000 at any one time outstanding
incurred in connection with the assumption of Pollution Control Bonds
in connection with a Permitted Asset Swap;
(xxi) unsecured Debt incurred by the Borrower or its
Subsidiaries in connection with the Buffalo Reserve Project or any
Joint Ventures in an aggregate principal amount not to exceed
$15,000,000 at any time outstanding; provided that such Debt has a
scheduled maturity date that is at least six calendar months later
than the Maturity Date and does not require any scheduled amortization
or mandatory prepayments thereof prior to such date;
(xxii) Debt incurred in connection with the acquisition of
the Equity Interests in or all or substantially all of the Assets of
AESC Hunlock Creek in connection with the Hunlock Transaction in an
aggregate principal amount not to exceed $45,000,000 at any time
outstanding;
(xxiii) unsecured Debt of the Borrower or its Subsidiaries
under the Parent Credit Agreement; and
(xxiv) Debt incurred to finance all or any part of the
acquisition and installation of pollution control equipment at the
Hatfield's Ferry Facility or the Armstrong Facility; provided that
such Debt is incurred prior to or within 90 days after the completion
of installation of such pollution control equipment; provided further
that the aggregate principal amount of Debt permitted under this
Section 5.02(b)(xxiv) with respect to (A) the Hatfield's Ferry
Facility shall not exceed $400,000,000 at any time outstanding and (B)
the Armstrong Facility shall not exceed $100,000,000 at any time
outstanding.
(c) Change in Nature of Business. Other than the Buffalo
Reserve Project, (i) make, or permit any of its Subsidiaries to make, any
material change in the nature of its business as carried on at the date hereof
or (ii) engage in, or permit any of its Subsidiaries to engage in, any business
other than electric power generation, transmission and distribution, energy
trading and other businesses reasonably and directly related thereto, or any
other business in which the Borrower or any of its Subsidiaries is engaged on
the Closing Date.
(d) Mergers, Etc. Merge into or consolidate with any Person
or permit any Person to merge into it, or permit any of its Subsidiaries to do
so, except that:
(i) (A) any Subsidiary of the Borrower may merge into or
consolidate with any other Subsidiary of the Borrower, provided that,
in the case of any such merger or consolidation, the Person formed by
such merger or consolidation shall be a wholly owned direct or
indirect Subsidiary of the Borrower and (B) any Subsidiary of the
Borrower may merge into or consolidate with the Borrower so long as
the Borrower is the surviving Person following such merger or
consolidation;
(ii) in connection with any sale, transfer or other
disposition permitted under Section 5.02(e) (other than Section
5.02(e)(iii)), any Subsidiary of the Borrower may merge into or
consolidate with any other Person or permit any other Person to merge
into or consolidate with it;
(iii) in connection with any acquisition permitted under
Section 5.02(f), any Subsidiary may merge into the Borrower; and
(iv) the Borrower may merge into or otherwise consolidate
with another Person if either (A) the Borrower is the surviving entity
or (B) (1) the surviving entity is organized or existing under the
laws of the United States, any state thereof or the District of
Columbia and (2) the surviving entity assumes all of the Borrower's
Obligations under the Financing Documents, pursuant to agreements
reasonably satisfactory to the Administrative Agent;
provided, however, that in each case, immediately after giving effect thereto,
no event shall occur and be continuing that constitutes a Default.
(e) Sales, Etc., of Assets. Sell, lease, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease,
transfer or otherwise dispose of, any Assets or grant any option or other right
to purchase, lease or to otherwise acquire any Assets other than:
(i) the sale, transfer, lease or other disposition of power,
capacity, the right to transmit electricity or natural gas, fuel, fuel
storage and processing and other products and services and Cash
Equivalents in the ordinary course of business and any sale, lease or
other disposition of damaged, surplus, worn-out or obsolete Assets in
the ordinary course of business;
(ii) the sale, transfer or other disposition of any Emissions
Credits; provided that to the extent such sale, transfer or other
disposition of Emissions Credits (A) is other than in the ordinary
course of business or (B) is in the ordinary course of business but
results in Net Cash Proceeds to the Borrower or its Subsidiaries in
excess of $40,000,000 in the aggregate from all such sales, transfers
or other dispositions of emission credits in any Fiscal Year, the Net
Cash Proceeds therefrom shall be required to be applied to prepay the
Advances in accordance with the provisions of Section 2.03 and 2.05 of
the Security Agreement or Section 2.06(c), as the case may be;
(iii) transactions permitted under Section 5.02(d);
(iv) sales, transfers, leases or other dispositions of Assets
or Equity Interests among the Borrower and its Subsidiaries; provided,
however, that (A) in respect of sales, transfers or other dispositions
by the Borrower to its Subsidiaries, the Borrower shall not sell,
lease, transfer or otherwise dispose of any Assets to any Excluded
Subsidiary (other than to AGC, AES Gleason or AES Wheatland in
connection with the operation of its business in the ordinary course
as currently conducted or for the necessary maintenance and repair of
the Assets of such Excluded Subsidiary), and (B) in respect of sales,
transfers or other dispositions by Subsidiaries to other Subsidiaries,
(1) with respect to Excluded Subsidiaries, only Excluded Subsidiaries
may sell, transfer or otherwise dispose of Assets to another Excluded
Subsidiary and (2) with respect to other Subsidiaries, such sales,
transfers or other dispositions are either permitted by Section
5.02(f) or the transferring Subsidiary has received fair value for
such sales, transfers or dispositions;
(v) sales, transfers, leases or other dispositions of Assets;
provided that (A) the consideration received by the Borrower and its
Subsidiaries for such Asset shall have been determined on the basis of
an arms-length negotiation with non-Affiliates, (B) with respect to
any Asset or property for which consideration is received by the
Borrower or any Subsidiary is in excess of $10,000,000, the
consideration received shall be at least the Fair Market Value for
such Asset or property and if the consideration to be received with
respect to such Asset or property is equal to or greater than
$75,000,000, the Borrower shall have delivered to the Administrative
Agent an Officer's Certificate certifying that such sale, transfer,
lease or other disposition is for Fair Market Value accompanied by a
resolution of the Board of Directors of the Borrower pursuant to which
the Board of Directors of the Borrower shall have concluded that such
sale, transfer, lease or other disposition is for Fair Market Value
which conclusion shall be supported by an appraisal or fairness
opinion addressed to the Board of Directors from a Person other than
an Affiliate of the Borrower which supports the conclusion that such
sale, transfer or other disposition is for Fair Market Value, (C) no
less than 75% of the purchase price (excluding the amount of any Debt
assumed in connection with any such sale or other disposition by a
Person other than any Loan Party) for such Asset shall be paid to the
Borrower and its Subsidiaries solely in cash or Cash Equivalents, (D)
no portion of the non-cash proceeds received by the Borrower and its
Subsidiaries shall consist of Debt of, or Equity Interests in, the
Borrower or any of its Subsidiaries, (E) no Default or Event of
Default shall have occurred and be continuing, (F) on or prior to such
sale, transfer or disposition, (I) all Debt (other than under this
Agreement) of the Borrower and its Subsidiaries secured by such Asset
required by the terms thereof to be prepaid or repaid upon such sale,
transfer or disposition shall have been so paid and (II) the relevant
portion of the proceeds thereof required to be applied to the
prepayment of Advances shall have been applied in accordance with the
terms contained in the proviso at the end of this Section 5.02(e), and
(G) the Borrower would be in compliance with the covenants set forth
in Section 5.03 as of the most recently completed period ending prior
to such transaction for which financial statements and certificates
required by Section 5.04(b) or 5.04(c) were required to have been
delivered, in each case after giving effect to such transaction and to
any other event occurring during such period as to which pro forma
recalculation is reasonably appropriate (including any other
transaction described in this clause occurring after such period) as
if such transaction (and the repayment of any Debt in connection
therewith) had occurred as of the first day of such period;
(vi) sales, transfers, leases or other dispositions of other
immaterial Assets (other than Equity Interests in, or Debt or other
Obligations of, any Subsidiary) in the ordinary course of business and
on reasonable terms, if no Default exists at the time of such sale,
transfer or other disposition;
(vii) so long as any of AES Gleason, AES Wheatland,
Conemaugh, NYC Energy LLC, Allegheny Energy Supply Units 3, 4 and 5
LLC, Mon Synfuel, LLC or any of their respective Subsidiaries
constitute an Excluded Subsidiary or Excluded Entity, the dissolution
or liquidation of any thereof;
(viii) sales or transfers of Equity Interests in the Parent
to any Plan;
(ix) sale, transfer, lease, swap, exchange or other
disposition of Assets, including full or partial ownership percentages
of the Borrower and its Subsidiaries' various generating facilities
(including AGC and Bath County) or any Assets used in connection with
or related to such generating facilities, including generating
equipment, power, contract rights, permits, licenses and other
intangibles, between the Borrower or any of its Subsidiaries and MPC
or any of its Subsidiaries; provided that (A) such transfers or swaps
shall be of generating facilities or ownership percentages therein,
together with related Assets, with no less than equivalent fair market
value (as determined by reference to the PA Report, if applicable) and
cash flow characteristics or (B) if the Borrower and its Subsidiaries
receive less than equivalent fair market value (as determined by
reference to the PA Report, if applicable) for any Assets transferred
or swapped, then (1) as a result of all such Asset transfers or swaps,
taken as a whole, the Borrower and its Subsidiaries shall receive
Assets with a fair market value (as determined by reference to the PA
Report, if applicable) in an amount not less than the fair market
value (as determined by reference to the PA Report, if applicable)
less $500,000,000 of all Assets transferred or swapped out of the
Borrower and its Subsidiary, (2) the PEC Service Agreement shall have
been either terminated, amended to reflect market rates or assigned by
the Borrower to a third party (other than a Subsidiary of the
Borrower) that assumes the entirety of the Borrower's obligations
thereunder and (3) the Borrower shall have delivered to the
Administrative Agent (I) a certificate signed by the Chief Financial
Officer of the Borrower certifying that (aa) after giving effect to
such transfer or swap, any decrease in the fair market value of the
Assets (determined at the time of such transfer or swap) held by the
Borrower and its Subsidiaries as a result of such transfer or swap
will be offset by the net present value of the impact of the
termination, amendment or assignment of the PEC Service Agreement
(except for any de minimis loss of value to the Borrower and its
Subsidiaries) and (bb) the cumulative cash flow effect on the Borrower
and its Subsidiaries of such transfer or swap (determined at the time
of such transfer or swap) over the period from the date of such
transfer or swap until March 8, 2011 shall not be negative and (II) a
schedule in form reasonably satisfactory to the Administrative Agent
of the computations used by the Chief Financial Officer in support of
the statements contained in such certificate (each such transfer or
swap, a "Permitted Asset Swap");
(x) sales, transfers or other dispositions of Assets from the
Borrower or any of its Subsidiaries to the Parent or any of its
Subsidiaries in connection with the Hunlock Transaction; provided that
the aggregate Fair Market Value of such Assets, together with the
amount of any Investments made by the Borrower or its Subsidiaries
pursuant to Section 5.02(f)(x), does not exceed $45,000,000 in the
aggregate;
(xi) sales, transfers or other dispositions of Assets to any
Joint Venture to the extent permitted by Section 5.02(f); and
(xii) the issuance of any Equity Interests by (A) the
Borrower to any Person or (B) any Subsidiary of the Borrower to the
Borrower or any other Loan Party;
provided that in the case of sales, transfers or other dispositions of Assets
pursuant to clause (ii) (but only to the extent contemplated thereby), (v) or
(vi) above, the Borrower shall, promptly upon receipt by any Loan Party or any
of its Subsidiaries of the Net Cash Proceeds from such sale, transfer or
disposition prepay the Advances in accordance with the provisions of Sections
2.03 and 2.05 of the Security Agreement or Sections 2.06(b)(ii)(A) and 2.06(c),
as the case may be.
(f) Investments in Other Persons. Make or hold, or permit any
of its Subsidiaries to make or hold, any Investment in any Person, except:
(i) (A) equity Investments outstanding as of the date hereof
by the Borrower and its Subsidiaries in their Subsidiaries or
Affiliates and set forth on Part A of Schedule 4.01(u), (B) equity
Investments after the date hereof in direct or indirect Subsidiaries
of the Borrower (other than Excluded Subsidiaries), (C) Investments
after the date hereof in direct or indirect Subsidiaries (other than
Excluded Subsidiaries) of the Borrower consisting of intercompany Debt
permitted under Section 5.02(b)(iv), (D) equity or other Investments
after the date hereof in AGC or Buchanan Generation LLC, the proceeds
of which are used by AGC or Buchanan Generation LLC, as the case may
be, for the operation, maintenance or repair of its Assets; provided
that any Debt owing to any Loan Party shall constitute Pledged Debt
and be delivered to the Collateral Agent to the extent required under
the terms of the Security Agreement and is subject to the Affiliate
Subordination Terms and (E) other Investments after the date hereof in
AES Gleason or AES Wheatland, the proceeds of which are used by AES
Gleason or AES Wheatland, as the case may be, solely in connection
with the operation of its business in the ordinary course as currently
conducted or for the necessary maintenance and repair of its Assets;
(ii) loans and advances to employees in the ordinary course
of business of the Borrower and its Subsidiaries as presently
conducted in an aggregate amount not to exceed $2,000,000 at any time
outstanding;
(iii) Investments in Cash Equivalents;
(iv) Investments in Hedge Agreements permitted pursuant to
Section 5.02(b)(v);
(v) Investments in Subsidiaries of the Borrower resulting
from drawings under, or renewals or extensions of letters of credit,
surety bonds, Contingent Obligations or performance bonds supporting
obligations of Subsidiaries incurred in the ordinary course of
business but in any event not for speculative obligations of such
Subsidiary;
(vi) Investments in any non-cash proceeds received by the
Borrower or any of its Subsidiaries in connection with any sale,
transfer or other disposition of any Asset to the extent permitted
under Section 5.02(e);
(vii) Investments consisting of extensions of credit in the
nature of accounts receivable or notes receivable arising from the
grant of trade credit in the ordinary course of business, and
Investments received in satisfaction or partial satisfaction thereof
from financially troubled account debtors to the extent reasonably
necessary in order to prevent or limit loss;
(viii) Investments not otherwise permitted under this Section
5.02(f) in an aggregate amount not to exceed $50,000,000 plus an
amount equal to (A) the Net Cash Proceeds in respect of any sale or
issuance of any Equity Interests by the Borrower or sale, transfer or
other disposition of Assets retained by the Borrower or its
Subsidiaries in accordance with Section 2.06 and not applied to prepay
Debt plus (B) the Net Cash Proceeds in respect of any sale or issuance
of any Equity Interests by the Borrower or any sale, transfer or other
disposition of Assets applied by the Borrower to voluntarily prepay
the Advances pursuant to Section 2.06(a); provided that with respect
to each Investment made pursuant to this Section 5.02(f)(viii): (1) to
the extent any such Investment constitutes (I) a newly acquired or
organized Subsidiary of the Borrower or any of its Subsidiaries, the
Borrower or any of its Subsidiaries acquiring such newly acquired or
organized Subsidiary shall have complied with its obligations under
Section 5.01(o) and (II) Equity Interests in, or Debt of, any Person,
such Equity Interests or Debt shall constitute Pledged Equity
Interests or Pledged Debt, as the case may be and shall be subject in
all respects to the terms of the Security Agreement; (2) such
Investment shall not include or result in any contingent liabilities
that could reasonably be expected to be material to the business,
financial conditions, operations or prospects of the Borrower and its
Subsidiaries, taken as a whole (as determined in good faith by the
board of directors (or persons performing similar functions) of the
Borrower or such Subsidiary if the board of directors is otherwise
approving such transaction and, in each other case, by a Responsible
Officer; (3) such Investment shall be in Assets which are part of, or
in lines of business which are in the electric power generation,
transmission, distribution and/or energy trading businesses; (4) any
determination of the amount of such Investment shall include all cash
and noncash consideration (including the fair market value of all
Equity Interests issued or transferred to the sellers thereof, all
indemnities, earnouts and other contingent payment obligations to, and
the aggregate amounts paid or to be paid under noncomplete, consulting
and other affiliated agreements with, the sellers thereof, all
write-downs of Assets and reserves for liabilities with respect
thereto and all assumptions of debt, liabilities and other obligations
in connection therewith) paid by or on behalf of the Borrower and its
Subsidiaries in connection with such Investment; and (5) (I)
immediately before and giving pro forma effect to any such purchase or
other acquisition, no Default or Event of Default shall have occurred
and be continuing and (II) immediately after giving effect to such
purchase or other acquisition the Borrower and its Subsidiaries shall
be in pro forma compliance with all of the covenants set forth in
Section 5.03, such compliance to be determined on the basis of the
financial information most recently delivered to the Administrative
Agent pursuant to Section 5.04(b) or 5.04(c) as though such Investment
had been consummated as of the first day of the fiscal period covered
thereby;
(ix) Investments not otherwise permitted under this Section
5.02(f) existing on the Closing Date and described in Part B of
Schedule 4.01(u);
(x) Investments in the Parent or any of its Subsidiaries in
connection with the Hunlock Transaction; provided that the aggregate
amount of such Investments, together with the aggregate Fair Market
Value of all Assets sold, leased, transferred or otherwise disposed of
by the Borrower or its Subsidiaries pursuant to Section 5.02(e)(x),
does not exceed $45,000,000 in the aggregate;
(xi) Investments in the Buffalo Reserve Project or any Joint
Venture in an aggregate amount not to exceed $15,000,000; and
(xii) Investments consisting of Debt owed to the Borrower or
its Subsidiaries under the AYE Money Pool.
provided that this Section 5.02(f) shall not prohibit (A) any repurchase of
Debt of the Borrower by the Borrower or Debt of any Subsidiary by such
Subsidiary to the extent such repurchase is otherwise permitted by the other
provisions in this Agreement, (B) any purchase or acquisition of Assets in a
Permitted Asset Swap in accordance with Section 5.02(e)(ix) or (C) any equity
Investment after the date hereof but prior to the Second Draw Date in the
Parent to the extent required to be made pursuant to the terms of Section
4.01(b) of the Intercreditor Agreement.
(g) Restricted Payments. Declare or pay any dividend,
purchase, redeem, retire, defease or otherwise acquire for value any of its
Equity Interests now or hereafter outstanding, return any capital to its
stockholders, partners or members (or the equivalent Persons thereof) as such,
make any distribution of Assets, Equity Interests (other than Equity Interests
in the Borrower issued to the Parent) or obligations or securities to its
stockholders, partners or members (or the equivalent Persons thereof) as such
or issue or sell any Equity Interests in it other than to the Parent or accept
any capital contributions other than capital contributions made by the Parent
to the Borrower or made with respect to the ML Interest, or permit any of its
Subsidiaries to do any of the foregoing, or permit any of its Subsidiaries to
purchase, redeem, retire, defease or otherwise acquire for value any Equity
Interest in the Borrower or to issue or sell any Equity Interests therein,
except that so long as no Default shall have occurred and be continuing at the
time of any action described in clause (i), (ii), (iii) or (iv) below or would
result therefrom:
(i) the Borrower may (A) declare and pay cash dividends and
distributions with respect to the ML Interests to the extent required
under the Constituent Documents of the Borrower as in effect on the
Closing Date, (B) make payments to the Parent in respect of
reimbursement obligations under any drawn letter of credit posted by
the Parent on behalf of the Borrower or any of its Subsidiaries to
support Obligations of the Borrower or such Subsidiary undertaken in
the ordinary course of business and not for speculative purposes, (C)
issue and sell shares of its Equity Interests so long as, if such
issuance or sale takes place prior to the Second Draw Date, the Net
Cash Proceeds thereof are applied to repayment of the Advances
pursuant to Sections 2.03 and 2.05 of the Security Agreement, (D)
commencing with the Fiscal Year ending December 31, 2005, declare and
pay cash dividends to the Parent in an aggregate amount in any Fiscal
Year not to exceed the greater of (1) $10,000,000 or (2) if the
Borrower's Leverage Ratio as of the last day of the Fiscal Year
immediately preceding the Fiscal Year in which such dividend is paid
was less than (I) 4.50:1.00, 25% of the Borrower's Consolidated Net
Income for the Fiscal Year immediately preceding the Fiscal Year in
which such dividend is paid or (II) 3.50:1.00, 50% of the Borrower's
Consolidated Net Income for the Fiscal Year immediately preceding the
Fiscal Year in which such dividend is paid; and (E) make any equity
Investment in any of its Subsidiaries permitted under Section 5.02(f);
(ii) any Subsidiary of the Borrower may (A) declare and pay
cash dividends or distributions ratably to the holders of its Equity
Interests, including the Borrower or any other Subsidiary of the
Borrower, (B) accept capital contributions from its parent to the
extent permitted under Section 5.02(f)(i) or 5.02(f)(vi) and (C) make
any equity Investment in any of its Subsidiaries permitted under
Section 5.02(f);
(iii) the Borrower or any Subsidiary of the Borrower may
sell, transfer or contribute any Equity Interests in the Parent to any
Plan; and
(iv) the Borrower or any Subsidiary of the Borrower may sell,
transfer or contribute any Equity Interests in any of its respective
Subsidiaries in connection with a Permitted Asset Swap;
provided, however, that the restrictions of this clause (g) shall not apply at
any time prior to the Second Draw Date to any dividends or distributions
required to be made to the Parent pursuant to the terms of Section 4.01(b) of
the Intercreditor Agreement or which are made for the purpose of returning to
the Parent funds received by the Borrower from the Parent pursuant to the
provisions of Section 4.01(a) of the Intercreditor Agreement.
(h) Payment Restrictions Affecting the Borrower and its
Subsidiaries. Enter into, incur or permit to exist any agreement or other
arrangement that prohibits or restricts the ability of the Borrower or any of
its Subsidiaries to (i) create, incur or permit to exist any Lien upon any of
its Assets or (ii) declare or pay any dividend or other distribution in respect
of its Equity Interests or repay or prepay any Debt owed to, make loans or
advances to, or otherwise invest in, the Borrower or any of its Subsidiaries;
provided that the foregoing shall not apply to restrictions and conditions
imposed by (A) Applicable Law, (B) any Financing Document, (C) the terms of any
Existing Debt as in effect on the date hereof or any Permitted Refinancing Debt
incurred in connection therewith, (D) any agreement in effect with respect to
any Subsidiary at the time such Subsidiary becomes a Subsidiary of the
Borrower, so long as such agreement was not entered into solely in
contemplation of such Person becoming a Subsidiary of the Borrower, (E) any
negative pledge incurred or provided in favor of any holder of Debt permitted
under Section 5.02(b)(vi) solely to the extent any such negative pledge relates
to the property financed by or subject of such Debt or any Permitted
Refinancing Debt incurred in connection therewith, (F) any agreement for the
sale or disposition of Assets permitted under Section 5.02(e), provided that
such restrictions and conditions apply only to the Asset that is to be sold or
the proceeds thereof, (G) any trading, netting, operating, construction,
service, supply, purchase, sale or similar agreement to which the Borrower or
any of its Subsidiaries is a party, entered into in the ordinary course of
business; provided that such agreement prohibits the encumbrance of solely the
Assets of the Borrower or such Subsidiary that are the subject of that
agreement, the payment rights arising thereunder and/or the proceeds thereof
and not to any other Asset of the Borrower or such Subsidiary or the Assets of
any other Subsidiary, (H) customary provisions restricting subletting or
assignment of leases or customary provisions in other agreements that restrict
assignment of such agreements or rights thereunder, which restrictions, when
taken as a whole, as determined in good faith by a Responsible Officer of the
Borrower, are no more restrictive than any similar restrictions in effect on
the Closing Date, (I) any negative pledge provided for in any Joint Venture
agreements, stockholder or partnership agreements or organizational documents
relating to Joint Ventures or partnerships or agreements relating to the
Buffalo Reserve Project, (J) any such restrictions or limitations contained in
any other agreement in effect on the Closing Date and any amendments,
modifications, restatements, renewals or replacements thereof that are not more
restrictive, taken as a whole, as determined in good faith by a Responsible
Officer of the Borrower, than the restrictions or limitations in effect on the
Closing Date, (K) any such restrictions or limitations contained in any
agreement evidencing Debt permitted under Section 5.02(b)(xx) or any Permitted
Refinancing Debt incurred in connection therewith but solely to the extent that
such restrictions or limitations are contained in the agreement evidencing the
relevant Pollution Control Bonds as of the date hereof and (L) any negative
pledge incurred or provided in favor of any holder of Debt permitted under
Section 5.02(b)(xxiv) but solely to the extent such negative pledge relates to
the property financed by or subject of such Debt and any other such
restrictions or limitations contained in any agreement evidencing such Debt and
applicable solely to the Borrower or the relevant Subsidiary of the Borrower
obtaining such Debt, as the case may be, so long as such negative pledge or
other such restrictions or limitations are customary for similar transactions
as of the date of such financing as determined in good faith by a Responsible
Officer of the Borrower.
(i) Sale-Leaseback Obligations. Create, incur, assume or
suffer to exist, or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any obligations as lessee for the rental or hire of real or
personal property in connection with any sale and leaseback unless the sale of
such property would be permitted under Section 5.02(e) and any Capitalized
Lease and any Lien arising in connection therewith are permitted by Sections
5.02(a) and 5.02(b), respectively. For the avoidance of doubt, the sale, lease,
transfer, swap, exchange or other disposition of Assets in connection with a
Permitted Asset Swap shall not constitute a sale and leaseback of Assets
subject to this Section 5.02(i).
(j) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in its Fiscal Year.
(k) Prepayments, Etc., of Debt. Prepay, redeem, purchase,
defease or otherwise satisfy or make any unscheduled payment, in each case
prior to the scheduled maturity thereof in any manner, whether directly or
indirectly, or make any payment in violation of any subordination terms of, any
Debt, or permit any of its Subsidiaries to do any of the foregoing (other than
prepay any Debt payable to the Borrower), or amend, modify or change in any
manner any material term or condition of any Debt (including the Bond
Instruments and the Senior Note Indenture), other than (i) in the case of the
Borrower only, for, and in connection with, the prepayment of Debt outstanding
under this Agreement, (ii) in the case of any Subsidiary of the Borrower,
prepayments of any Debt owed by such Subsidiary to the Borrower, (iii) in the
case of the Borrower and its Subsidiaries, prepayments of Debt permitted to be
outstanding under Section 5.02(b)(xvii) or any other Debt which is refinanced
and prepaid with the proceeds of Permitted Refinancing Debt permitted to be
incurred under Section 5.02(b), (iv) prepayments of Debt in an aggregate amount
not to exceed the amount permitted to be distributed to the Parent as dividends
under Section 5.02(g)(i), (v) prepayments of Debt in an aggregate amount not to
exceed the Net Cash Proceeds received by the Borrower and its Subsidiaries in
respect of the sale or issuance of any Equity Interests by the Borrower or its
Subsidiaries (other than any such issuance or sale to the Borrower or any other
Subsidiary of the Borrower) or any sale, transfer or other disposition of
Assets by the Borrower or its Subsidiaries and not otherwise applied to the
prepayment of Debt outstanding under this Agreement pursuant to Section 2.06,
(vi) with respect to Debt permitted to be outstanding under Section
5.02(b)(xxiii), (vii) the redemption of the Senior Notes on the Second Draw
Date, or (viii) to the extent required to effectuate any sale, transfer or
other disposition of Assets which is permitted under Section 5.02(e).
(l) Amendment, Etc., of Material Contracts. Cancel or
terminate any Material Contract or consent to or accept any cancellation or
termination thereof, or amend, amend and restate, supplement or otherwise
modify any Material Contract, or give any consent, waiver or approval
thereunder, waive any default under or breach of any Material Contract to the
extent that any such cancellation, termination, amendment, amendment and
restatement, supplement, modification, waiver, approval or consent to any
thereof could reasonably be expected to have a Material Adverse Effect.
(m) Speculative Transactions. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or any similar speculative transactions (including
take-or-pay contracts, long term fixed price off-take contracts and contracts
for the sale of power for which physical delivery is not available) unless the
same (i) is consistent with the policy on Corporate Energy Risk Policy (as
amended from time to time) approved by the Borrower's board of directors or
(ii) has been approved in writing by the Required Lenders.
(n) Capital Expenditures. Make or become legally obligated to
make any Capital Expenditure, except for Capital Expenditures made (i) in the
ordinary course of business not to exceed, in the aggregate for the Borrower
and its Subsidiaries during each Fiscal Year set forth below, the amount set
forth opposite such Fiscal Year:
Fiscal Year Amount
----------- ------
2004 $120,000,000
2005 $140,000,000
2006 $200,000,000
2007 $300,000,000
2008 $250,000,000
2009 $200,000,000
2010 $200,000,000
2011 $200,000,000
provided, however, that so long as no Event of Default has occurred and is
continuing or would result from such expenditure, any portion of any amount set
forth above, if not expended in the Fiscal Year for which it is permitted
above, may be carried over for expenditure in the next following Fiscal Year
(and shall be deemed to be spent before the amount originally allocated to such
Fiscal Year by the foregoing table) or (ii) in order to comply with Applicable
Law regarding the environment or the transmission of electricity or natural
gas.
(o) Compliance with ERISA. (i) Terminate, or permit any ERISA
Affiliate of the Borrower to terminate, any Plan so as to result in any
liability of the Borrower or any ERISA Affiliate, which could reasonably be
expected to have a Material Adverse Effect, or (ii) permit to exist any
Termination Event with respect to a Plan which could reasonably be expected to
have a Material Adverse Effect to the extent such Termination Event is within
the control of the Borrower.
(p) Formation of Subsidiaries. Organize or invest, or permit
any Subsidiary to organize or invest, in any new Subsidiary to the extent
prohibited by Section 5.02(f).
Section 5.03 Financial Covenants of the Borrower. The
Borrower agrees that, so long as any Advance shall remain unpaid, the Borrower
will not:
(a) Interest Coverage Ratio. Permit the Interest Coverage
Ratio at the end of any fiscal quarter to be less than the ratio set forth for
such fiscal quarter below:
-----------------------------------------------------------
Four Fiscal Ratio
Quarters Ending
-----------------------------------------------------------
September 30, 2005 1.25:1.00
-----------------------------------------------------------
December 31, 2005 1.50:1.00
-----------------------------------------------------------
March 31, 2006 1.60:1.00
-----------------------------------------------------------
June 30, 2006 1.75:1.00
-----------------------------------------------------------
September 30, 2006 2.00:1.00
-----------------------------------------------------------
December 31, 2006 2.00:1.00
-----------------------------------------------------------
March 31, 2007 2.00:1.00
-----------------------------------------------------------
June 30, 2007 2.00:1.00
-----------------------------------------------------------
September 30, 2007 2.00:1.00
-----------------------------------------------------------
December 31, 2007 2.00:1.00
-----------------------------------------------------------
March 31, 2008 2.20:1.00
-----------------------------------------------------------
June 30, 2008 2.30:1.00
-----------------------------------------------------------
September 30, 2008 2.40:1.00
-----------------------------------------------------------
December 31, 2008 2.40:1.00
-----------------------------------------------------------
March 31, 2009 2.40:1.00
-----------------------------------------------------------
June 30, 2009 2.40:1.00
-----------------------------------------------------------
September 30, 2009 2.40:1.00
-----------------------------------------------------------
December 31, 2009 2.40:1.00
-----------------------------------------------------------
March 31, 2010 2.40:1.00
-----------------------------------------------------------
June 30, 2010 2.40:1.00
-----------------------------------------------------------
September 30, 2010 2.40:1.00
-----------------------------------------------------------
December 31, 2010 2.40:1.00
-----------------------------------------------------------
(b) Leverage Ratio. Permit the Leverage Ratio as of any
fiscal quarter to be greater than the ratio set forth below for each fiscal
quarter set forth below:
-----------------------------------------------------------
Four Fiscal Ratio
Quarters Ending
-----------------------------------------------------------
September 30, 2005 9.00:1.00
-----------------------------------------------------------
December 31, 2005 8.75:1.00
-----------------------------------------------------------
March 31, 2006 8.00:1.00
-----------------------------------------------------------
June 30, 2006 7.50:1.00
-----------------------------------------------------------
September 30, 2006 7.25:1.00
-----------------------------------------------------------
December 31, 2006 7.00:1.00
-----------------------------------------------------------
March 31, 2007 6.75:1.00
-----------------------------------------------------------
June 30, 2007 6.75:1.00
-----------------------------------------------------------
September 30, 2007 6.75:1.00
-----------------------------------------------------------
December 31, 2007 6.50:1.00
-----------------------------------------------------------
March 31, 2008 6.25:1.00
-----------------------------------------------------------
June 30, 2008 6.00:1.00
-----------------------------------------------------------
September 30, 2008 5.75:1.00
-----------------------------------------------------------
December 31, 2008 5.75:1.00
-----------------------------------------------------------
March 31, 2009 5.75:1.00
-----------------------------------------------------------
June 30, 2009 5.75:1.00
-----------------------------------------------------------
September 30, 2009 5.75:1.00
-----------------------------------------------------------
December 31, 2009 5.75:1.00
-----------------------------------------------------------
March 31, 2010 5.75:1.00
-----------------------------------------------------------
June 30, 2010 5.75:1.00
-----------------------------------------------------------
September 30, 2010 5.75:1.00
-----------------------------------------------------------
December 31, 2010 5.75:1.00
-----------------------------------------------------------
Section 5.04 Reporting Covenants of the Borrower. The
Borrower covenants and agrees that so long as any Advances shall remain unpaid,
the Borrower will furnish to the Administrative Agent and each of the Lenders
(it being understood that delivery to the Administrative Agent for posting by
the Administrative Agent of each of the following items on a electronic website
shall constitute delivery to each Lender by the Borrower and the Administrative
Agent hereby agrees to post on an electronic website or otherwise distribute to
the Lenders any such item delivered by the Borrower to the Administrative
Agent):
(a) Default Notices. As soon as possible and in any event
within five Business Days after any Responsible Officer of the Borrower becomes
aware of the occurrence of each Default or any event, development or occurrence
reasonably likely to have a Material Adverse Effect, in each case, continuing
on the date of such statement, a statement of a Responsible Officer of the
Borrower setting forth the details of such Default or event, development or
occurrence and, in each case, the actions, if any, which the Borrower has taken
and proposes to take with respect thereto.
(b) Annual Financials. As soon as available and in any event
within 90 days after the end of each Fiscal Year, a copy of the annual audit
report for such year for the Borrower and its Subsidiaries including therein a
Consolidated balance sheet of the Borrower and its Subsidiaries as of the end
of such Fiscal Year and Consolidated statement of income and a Consolidated
statement of cash flows of the Borrower and its Subsidiaries for such Fiscal
Year, in each case accompanied by a report that is unqualified or is otherwise
reasonably acceptable to the Required Lenders of PriceWaterhouseCoopers (or
such other independent public accountants of recognized standing acceptable to
the Required Lenders), together with, (i) a certificate of such accounting firm
to the Lenders stating that in the course of the regular audit of the business
of the Borrower and its Subsidiaries, which audit was conducted by such
accounting firm in accordance with generally accepted auditing standards,
nothing has come to such accounting firm's attention that would cause it to
believe that the Borrower has failed to comply with the covenants set forth in
Section 5.03, (ii) a schedule in form satisfactory to the Administrative Agent
of the computations prepared by the Borrower and used by such accounting firm
in determining, as to the fourth quarter of such Fiscal Year, compliance with
the covenants contained in Section 5.03, provided that in the event of any
change in GAAP used in the preparation of such financial statements, the
Borrower shall also provide, if necessary for the determination of compliance
with Section 5.03, a statement of reconciliation conforming such financial
statements to GAAP as in effect as of the Closing Date) and (iii) a certificate
of the Chief Financial Officer of the Borrower stating that no Default has
occurred and is continuing or, if a default has occurred and is continuing, a
statement as to the nature thereof and the action that the Borrower has taken
and proposes to take with respect thereto.
(c) Quarterly Financials. As soon as available and in any
event within 60 days after the end of each of the first three quarters of each
Fiscal Year, a Consolidated balance sheet of the Borrower and its Subsidiaries
as of the end of such quarter and a Consolidated statement of income and a
Consolidated statement of cash flows of the Borrower and its Subsidiaries for
the period commencing at the end of the previous fiscal quarter and ending with
the end of such fiscal quarter, setting forth in each case in comparative form
the corresponding figures for the corresponding date or period of the preceding
Fiscal Year, all in reasonable detail and duly certified (subject to normal
year-end audit adjustments) by the Chief Financial Officer of the Borrower as
having been prepared in accordance with GAAP, together with (i) a certificate
of said officer stating that no Default has occurred and is continuing or, if a
Default has occurred and is continuing, a statement as to the nature thereof
and the action that the Borrower has taken and proposes to take with respect
thereto and (ii) a schedule in form satisfactory to the Administrative Agent of
the computations used by the Borrower in determining compliance with the
covenants contained in Section 5.03, provided that in the event of any change
in GAAP used in the preparation of such financial statements, the Borrower
shall also provide, if necessary for the determination of compliance with
Section 5.03, a statement of reconciliation conforming such financial
statements to GAAP as in effect as of the Closing Date.
(d) Budget. As soon as available, but in no event later than
30 days after the commencement of each Fiscal Year, forecasts prepared by
management of the Borrower, in form reasonably satisfactory to the
Administrative Agent, of consolidated balance sheets, income statements and
cash flow statements of the Borrower and its Subsidiaries on a quarterly basis
for such Fiscal Year setting forth the assumptions used for purposes of
preparing the budget and promptly when available, any significant revisions to
such budget.
(e) Litigation. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and proceedings before
any Governmental Authority, domestic or foreign, affecting the Borrower or any
of its Subsidiaries of the type described in Section 4.01(f), and promptly
after the occurrence thereof, notice of any change in respect of the Disclosed
Litigation described on Schedule 4.01(f) which could reasonably be expected to
have a Material Adverse Effect.
(f) ERISA. (i) Promptly and in any event within 20 days after
(A) the Borrower or any of its Subsidiaries or any ERISA Affiliate knows that
any ERISA Event has occurred, a statement of the Borrower describing such ERISA
Event and (B) the date of any material correspondence between the Borrower or
any of its Subsidiaries or any ERISA Affiliate and the PBGC, a copy of such
material correspondence.
(ii) Promptly and in any event within three Business Days
after receipt thereof by the Borrower or any of its Subsidiaries or
any ERISA Affiliate, copies of each notice from the PBGC stating its
intention to terminate any Plan or to have a trustee appointed to
administer any Plan.
(iii) Promptly upon the written request of the Administrative
Agent, copies of each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) filed with the Internal Revenue Service from
time to time with respect to each Plan.
(iv) Promptly and in any event within 30 days after receipt
thereof by the Borrower or any of its Subsidiaries or any ERISA
Affiliate from the sponsor of a Multiemployer Plan, copies of each
notice concerning (A) the imposition of Withdrawal Liability by any
such Multiemployer Plan, (B) the reorganization or termination, within
the meaning of Title IV of ERISA, of any such Multiemployer Plan or
(C) the amount of liability incurred, or that may be incurred, by the
Borrower or such Subsidiary or any ERISA Affiliate in connection with
any event described in clause (A) or (B).
(g) Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by the Borrower or any of its Subsidiaries with any Environmental
Law or Environmental Permit that could (i) reasonably be expected to have a
Material Adverse Effect or (ii) cause any property described in the Mortgages
to be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law, except where the failure to do so
could reasonably be expected to have a Material Adverse Effect.
(h) Real Property. Within 45 days after the end of each
fiscal quarter, a report supplementing Schedules 4.01(p) and 4.01(q),
identifying all Material Property disposed of by the Borrower or any of its
Subsidiaries during such fiscal quarter, a list and description (including the
street address, county or other relevant jurisdiction, state, record owner,
book value thereof and, in the case of leases of property, lessor, lessee,
expiration date and annual rental cost thereof) of all Material Property
acquired or leased during such fiscal quarter ("Acquired Material Property")
and a description of such other changes in the information included in such
Schedules as may be necessary for such Schedules to be accurate and complete in
respect of such Acquired Material Property.
(i) Insurance. (i) As soon as available and in any event
within 30 days after the end of each Fiscal Year, a report summarizing the
insurance coverage (specifying type, amount and carrier) in effect for the
Borrower and its Subsidiaries and containing such additional information as any
Lender may reasonably specify.
(ii) Promptly after the occurrence thereof, notice to the
Administrative Agent of the occurrence of any Recovery Event and the
completion of any restoration and replacement work contemplated by any
plan delivered pursuant to Section 2.06(b)(ii)(D)(2).
(j) Other Information. (i) Promptly upon the mailing thereof
to the shareholders of the Borrower generally, copies of all financial
statements, reports and proxy statements so mailed;
(ii) Promptly after receipt thereof by the Borrower or any of
its Subsidiaries, a copy of any "management letter" received by such
Person from its certified public accountants and the management's
response thereto;
(iii) No later than one day prior to the anticipated receipt
by the Borrower or any Subsidiary of the Borrower of Net Cash Proceeds
from (A) any sale or other disposition of any Asset of the Borrower or
such Subsidiary, the proceeds of which are expected to be greater than
$10,000,000 individually or in the aggregate in any given Fiscal Year
or (B) the issuance of any Debt or Equity Interests, the proceeds of
which are, in either case, required to be applied to prepay the
Advances in accordance with Sections 2.03 and 2.05 of the Security
Agreement or Section 2.06(c), as the case may be, a certificate of a
Responsible Officer of the Borrower setting forth (1) a description of
the transaction giving rise to such Net Cash Proceeds, (2) the date or
dates upon which such Net Cash Proceeds are anticipated to be received
by the Borrower or such Subsidiary, (3) the amount of Net Cash
Proceeds anticipated to be received on such date or each of such dates
(together with a schedule detailing the calculations necessary to
determine the amount of Net Cash Proceeds), and (4) the amount of such
Net Cash Proceeds that it is anticipated will be applied to prepay the
Advances;
(iv) Promptly upon receipt thereof, copies of all notices,
requests and other documents received by the Borrower or any of its
Subsidiaries under or pursuant to any Financing Document or indenture,
loan or credit or agreement in respect of any Qualifying Obligation
regarding or related to any breach or default by any party thereto
that could reasonably be expected to have a Material Adverse Effect or
any other event that reasonably be expected to have a Material Adverse
Effect and copies of any amendment, modification or waiver of any
provision of any such Financing Document or indenture, loan or credit
or agreement; and
(v) Such other information respecting the business or
properties, or the condition or operations, financial or otherwise, of
the Borrower or any of its Subsidiaries as the Administrative Agent or
any Lender acting through the Administrative Agent may from time to
time reasonably request.
(k) Emissions Credits. If at any time during any Fiscal Year,
the Net Cash Proceeds received from the sale, transfer or other disposition of
Emissions Credits by the Borrower and its Subsidiaries for such Fiscal Year
exceeds $10,000,000, promptly but in any event within 45 days after the end of
each remaining fiscal quarter for such Fiscal Year, a report summarizing each
sale, transfer or other disposition of Emissions Credits during such fiscal
quarter, including the amount, a description of the consideration received and
the Net Cash Proceeds (if any) received in respect of each such sale, transfer
or other disposition.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 Events of Default. Each of the following events,
conditions or occurrences shall be an "Event of Default":
(a) the Borrower or any other Loan Party fails to pay (i)
when and as required to be paid herein, any amount of principal of any Advance,
or (ii) within three Business Days after the same becomes due, any interest on
any Advance or any fee or other amount due hereunder or under any other
Financing Document; or
(b) any representation, warranty, certification or statement
of fact made or deemed made by or on behalf of the Borrower or any other Loan
Party herein, in any other Financing Document, or in any document delivered in
connection herewith or therewith shall be incorrect or misleading in any
material respect when made or deemed made; or
(c) any Loan Party shall fail to perform or observe any term,
covenant or agreement contained in any of Section 5.01(f), 5.01(s), 5.02 (other
than 5.02(m)), 5.03 or 5.04(a) of this Agreement; or
(d) any Loan Party shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(o) or 5.01(p) in connection
with a Permitted Asset Swap and such failure shall remain unremedied for five
days after the date on which a Responsible Officer of the Borrower becomes
aware of such failure; or
(e) any Loan Party shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(j), 5.01(k), 5.01(o) (other
than in connection with a Permitted Asset Swap), 5.01(p) (other than in
connection with a Permitted Asset Swap), 5.02(m) or 5.04 (other than Section
5.04(a)) and such failure shall remain unremedied for 30 days after the date on
which a Responsible Officer of the Borrower becomes aware of such failure;
provided that with respect to Section 5.04(j)(iii) no Event of Default shall
have occurred as a result of the failure to deliver the notice contemplated
thereby if the Borrower has made any prepayment required to be made in
connection with the related transaction; or
(f) any Loan Party fails to perform or observe any other
covenant or agreement (not specified in Section 6.01(a), 6.01(c), 6.01(d) or
6.01(e) above) contained in any Financing Document on its part to be performed
or observed and such failure shall remain unremedied for 60 days after the date
on which a Responsible Officer of the Borrower becomes aware of such failure;
or
(g) (i) any Loan Party or any Subsidiary (A) fails to make
any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Debt (other than Debt
under the Financing Documents or Debt which is subject to Contest) having an
aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) or with respect to any Hedge Agreement with an Agreement
Value of more than $25,000,000 either individually or in the aggregate or (B)
fails to observe or perform any other agreement or condition relating to any
such Debt or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Debt (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, (A) such Debt
to be demanded, become due, be repurchased, prepaid, defeased or redeemed
(automatically or otherwise), (B) an offer to repurchase, prepay, defease or
redeem such Debt to be made, prior to its stated maturity, or (C) cash
collateral in respect thereof to be demanded; or (ii) there occurs under any
Hedge Agreement an Early Termination Date (as defined in such Hedge Agreement)
resulting from (A) any event of default under such Hedge Agreement as to which
the Borrower or any Subsidiary is the Defaulting Party (as defined in such
Hedge Agreement) or (B) any Termination Event (as so defined) under such Hedge
Agreement as to which the Borrower or any Subsidiary is an Affected Party (as
defined in such Hedge Agreement) and, in either event, the termination value
owed by the Loan Party or such Subsidiary as a result thereof is greater than
$25,000,000 either individually or in the aggregate; or
(h) any Insolvency Proceeding shall occur with respect to the
Borrower or any of its Subsidiaries; or
(i) there is entered against the Borrower or any of its
Subsidiaries (i) a final judgment or order for the payment of money in an
amount exceeding $40,000,000 either individually or in the aggregate other than
in respect of the Merrill Lynch Litigation (to the extent not covered by
independent third-party insurance by an insurer that is rated at least "A" by
A.M. Best Company and such coverage is not the subject of a bona fide dispute),
or (ii) any one or more non-monetary final judgments that have, or could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect and, in the case of (i) or (ii), (A) enforcement proceedings are
commenced by any creditor upon such judgment or order and such proceedings are
not stayed within 10 Business Days, or (B) there is a period of 30 consecutive
days during which a stay of enforcement of such judgment, by reason of a
pending appeal or otherwise, is not in effect; or
(j) there occurs any Change of Control; or
(k) any Collateral Document after delivery thereof shall for
any reason (other than pursuant to the terms thereof) cease to create solely
for the benefit of the Secured Parties (or the enforceability thereof shall be
contested by any Loan Party) with respect to any portion of the Group Assets, a
valid and, but for the giving of notices of Liens thereunder to Persons other
than Affiliates of the Borrower, perfected Lien on and security interest in
such Collateral with the applicable priority set forth in the Security
Agreement and in the case of any invalidity or non-perfection of any such Lien
with respect to an immaterial portion of the Collateral as a result of
administrative or ministerial errors, such occurrence shall remain unremedied
for 60 days after the earlier of the date on which (A) a Responsible Officer of
the Borrower becomes aware of such failure or (B) written notice thereof shall
have been given to the Borrower by the Administrative Agent or any Lender; or
(l) any material provision of any Financing Document shall be
canceled, terminated, declared to be null and void or shall otherwise cease to
be valid and binding on any Loan Party that is a party thereto, in each case,
as determined in a final, non-appealable judgment of a court of competent
jurisdiction, or any Loan Party shall deny in writing any further liability or
obligation under any provision of any Financing Document; provided, however,
that the foregoing provisions of this clause (k) shall not apply to any
Financing Document that is canceled, terminated, declared to be null and void
or which ceases to be valid or binding on the Borrower in accordance with its
terms or by agreement of the requisite parties thereto; or (m) as a result of
or in connection with an ERISA Event with respect to a Plan, the Borrower or
any Subsidiary or any ERISA Affiliate has incurred or is reasonably expected to
incur liability in an amount exceeding, in the aggregate with any amounts
applicable under clauses (m) and (n) of this Section 6.01, $25,000,000; or
(n) the Borrower or any of its Subsidiaries or any ERISA
Affiliate shall have been notified by the sponsor of a Multiemployer Plan that
it has incurred Withdrawal Liability to such Multiemployer Plan in an amount
that, when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Loan Parties and the ERISA Affiliates as Withdrawal
Liability (determined as of the date of such notification), exceeds, in the
aggregate with any amounts applicable under clauses (l) and (n) of this Section
6.01, $25,000,000, or requires payments exceeding $25,000,000 per annum; or
(o) the Borrower or any of its Subsidiaries or any ERISA
Affiliate shall have been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, and as a result of such reorganization or
termination the aggregate annual contributions of the Loan Parties and the
ERISA Affiliates to all Multiemployer Plans that are then in reorganization or
being terminated have been or will be increased over the amounts contributed to
such Multiemployer Plans for the plan years of such Multiemployer Plans
immediately preceding the plan year in which such reorganization or termination
occurs by an amount exceeding, in the aggregate with any amounts applicable
under clauses (l) and (m) of this Section 6.01, $25,000,000; or
(p) any Loan Party shall at any time deliver or cause to be
delivered to the Collateral Agent without prior written consent of the
Collateral Agent a notice pursuant to 42 Pa. C.S.A. ss. 8143 electing to limit
the indebtedness secured by any Mortgage to which such Loan Party is a party.
Section 6.02 Actions Following an Event of Default. Each
Lender hereby agrees to give prompt notice to the Administrative Agent of the
occurrence of any Event of Default of which it has knowledge. At any time after
the Administrative Agent has received such a notice of an Event of Default, the
Administrative Agent shall at the request, or may with the consent, of the
Required Lenders, by notice to the Borrower, (a) declare all or any part of the
Commitment and the Incremental Commitment offered pursuant to Section 2.14 and
the obligation of the Lenders to make Advances pursuant thereto to be
terminated, whereupon the same shall forthwith terminate, and (b) declare all
or any part of the Advances, all interest thereon and all other amounts payable
under this Agreement and the Financing Documents owing to the Lenders to be
forthwith due and payable, whereupon such Advances, 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 that upon the occurrence of
any Event of Default described in Section 6.01(h) with respect to the Borrower,
(A) all Commitments of each Lender and all Incremental Commitments of each
Lender outstanding pursuant to Section 2.14 shall automatically be terminated
and (B) all Advances, all 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.
Section 6.03 Default Interest. At such time as any Event of
Default has occurred and is continuing, each Lender shall apply the
post-default interest rate provided in Section 2.07(b) to any amount overdue
(whether in accordance with the original amortization schedule, as a result of
acceleration or otherwise).
ARTICLE VII
REMEDIES AND ENFORCEMENT
Section 7.01 Procedures Following an Event of Default Prior
to the Second Draw Date. (a) At any time after the Administrative Agent has
received a notice of the occurrence of any Event of Default, the Administrative
Agent shall service a notice (a "Notice of Default") on each Lender which (i)
specifies the Decision Period within which instructions referred to in clause
(iii) below are to be provided to it, (ii) describes the Event of Default, and
(iii) requests instructions from the Required Lenders within such Decision
Period as to (A) whether or not such Event of Default should be waived or (B)
whether any amendment should be made to one or more of the Financing Documents
in order to cure or effectively waive such Event of Default, in which case:
(1) subject to Section 9.01, if the Required Lenders vote to
waive such Event of Default or enter into such an amendment, no Lender
shall be entitled (I) to accelerate any of the Senior Debt Obligations
owed to it or to terminate any of its Commitment or any Incremental
Commitment outstanding pursuant to Section 2.14 as a consequence of
the occurrence and continuance of such Event of Default or (II) to
exercise or enforce, or to instruct the Collateral Agent to exercise
or enforce, any right or remedy under the Financing Documents or under
Applicable Law in connection with such Event of Default; provided that
nothing herein shall bar the exercise of rights or enforcement of
remedies in accordance with the Financing Documents in respect of any
other Event of Default which is not expressly waived by the Required
Lenders pursuant to this Section 7.01; or
(2) if the Required Lenders decide not to waive such Event of
Default or not to enter into such amendment, as the case may be, and
decide to declare that such Event of Default has occurred for purposes
of taking action under the Security Agreement, the Required Lenders
shall, acting through the Administrative Agent, provide (I) written
notice to the Administrative Agent authorizing it to deliver a notice
of default (a "Notice of Bank Facility Default") with respect to such
Event of Default to the Collateral Agent in accordance with Section
6.02(a) of the Security Agreement and (II) to the extent that the
Required Lenders have decided to accelerate the Advances and terminate
all commitments to make any loans as a consequence of the occurrence
of such Event of Default, a written notice to the Collateral Agent and
the Borrower indicating that the outstanding amount of the Advances
has been so accelerated and all such commitments terminated (an
"Acceleration Notice"), or
(3) if, prior to the termination of the Decision Period, the
Required Lenders neither vote to waive such Event of Default or enter
into such an amendment nor decide to enforce such rights and remedies,
the Administrative Agent shall promptly provide written notice (a
"Deadlock Notice") of such event to the Lenders and shall seek
instructions from the Required Lenders as to whether it should deliver
a Notice of Bank Facility Default or Acceleration Notice with respect
to the occurrence of such Event of Default.
(b) If, prior to the termination of the Decision Period, the
Required Lenders neither vote to waive any Event of Default or enter into
amendments of one or more of the Financing Documents nor decide to enforce such
rights and remedies, then during the period (the "Waiting Period") from the
date of delivery pursuant to Section 7.01(a)(3) of any Deadlock Notice with
respect to such Event of Default to the date of receipt by the Administrative
Agent of instructions from the Required Lenders to deliver a Notice of Bank
Facility Default, no Lender shall be entitled to (i) exercise or enforce any
right or remedy in connection with such Event of Default (including (A) any
acceleration of the Senior Debt Obligations owed to it or the termination of
its Commitment or outstanding Incremental Commitment, if any, made pursuant to
Section 2.14 and (B) the remedies specified in Article VI of the Security
Agreement); or (ii) instruct the Collateral Agent to exercise or enforce any
right or remedy against or in respect of the Collateral or otherwise in
connection with such Event of Default); provided that nothing contained herein
shall limit the rights of the Required Lenders to instruct in writing the
Collateral Agent to make, or to immediately cease making, any applications from
any Pledged Accounts, or the obligation of the Collateral Agent to comply with
such instructions, in each case to the extent consistent with the Financing
Documents.
(c) With respect to any applicable Event of Default, the
Waiting Period shall automatically end, and a Notice of Bank Facility Default
shall be effective, upon the agreement of the Required Lenders.
(d) Nothing in Section 7.01(b) shall be construed to restrict
the right of the Required Lenders, at any time prior to the end of the Waiting
Period or thereafter, to elect to waive any Event of Default or, subject to
Section 9.01, agree to any amendment of one or more of the Financing Documents
in order to cure such Event of Default in accordance with Section 7.01(c) and
the terms of the Security Agreement.
(e) In the event that an Acceleration Notice has been
authorized by the Required Lenders, each Lender shall terminate its outstanding
Commitment and Incremental Commitment and accelerate its Advances at any time
on or after the Business Day following delivery of such Acceleration Notice to
the Collateral Agent.
(f) Notwithstanding the foregoing, the procedure set forth in
this Section 7.01 shall not apply in respect of any Event of Default occurring
after the redemption of the Senior Secured Notes and the amendment and
restatement of the Security Agreement on the Second Draw Date.
ARTICLE VIII
THE AGENTS
Section 8.01 Authorization and Action. (a) Each Lender hereby
appoints and authorizes the Administrative Agent to (i) take such action as
agent on its behalf and to exercise such powers and discretion under this
Agreement and the other Financing Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such powers
and discretion as are reasonably incidental thereto and (ii) to take such
actions under the Security Agreement on behalf of the Lenders as provided
therein. As to any matters not expressly provided for by the Financing
Documents (including enforcement or collection of the Notes), the
Administrative 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
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is contrary to this
Agreement or applicable law. The Administrative Agent agrees to give to each
Lender prompt notice of each notice given to it by the Borrower or any other
Person pursuant to the terms of this Agreement or any other Financing Document.
(b) Each Lender hereby appoints and authorizes each of the
Collateral Agent and, solely with respect to the period ending on the Second
Draw Date, the Intercreditor Agent to take such action as agent on its behalf
in accordance with the provisions of Article VII of the Security Agreement and
agrees to be bound by the provisions of Section 7.17 of the Security Agreement.
Section 8.02 Reliance. Neither any 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 the Financing
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing: (a) the Administrative
Agent may treat the payee of any Note as the holder thereof until the
Administrative 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 9.07; (b) each Agent may consult
with legal counsel (including counsel for any Loan Party), independent public
accountants and other experts selected in good faith 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; (c) each
Agent makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations
(whether written or oral) made in or in connection with the Financing
Documents; (d) each Agent 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 any Financing Document on the part of any Loan Party or to inspect the
property (including the books and records) of any Loan Party; (e) each Agent
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, any Financing Document or any other
instrument or document furnished pursuant thereto; and (f) each Agent shall
incur no liability under or in respect of any Financing Document by acting upon
any notice, consent, certificate or other instrument or writing (which may be
by telegram, telecopy or telex) reasonably believed by it to be genuine and
signed or sent by the proper party or parties.
Section 8.03 CNAI, CGMI, BofA, CSCI, Citibank and Affiliates.
With respect to its commitments, if any, to make loans pursuant to its
Commitment or Incremental Commitment, if any, the Advances made by it and the
Notes issued to it, CNAI, CGMI, BofA, CSCI and Citibank shall have the same
rights and powers under the Financing Documents as any other Lender and may
exercise the same as though it were not an Agent or Arranger Party, as the case
may be; and the term "Lender" or "Lenders" shall, unless otherwise expressly
indicated, include each of CNAI, CGMI, BofA, CSCI and Citibank in its
individual capacity. CNAI, CGMI, BofA, CSCI, Citibank and their respective
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 or any of its Subsidiaries, the
Parent, any of its Subsidiaries and any Person that may do business with or own
securities of the Borrower or any of its Subsidiaries, the Parent, or any such
Subsidiary, all as if CNAI, CGMI, BofA, CSCI and Citibank were not an Agent or
Arranger Party, as the case may be, and without any duty to account therefor to
the Lenders.
Section 8.04 Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon any Agent or any other
Lender and based on the financial statements referred to in Sections 3.01 and
5.04 and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and the
other Financing Documents to which it is a party. Each Lender also acknowledges
that it will, independently and without reliance upon any Agent or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement and the other Financing Documents to which it is a
party.
Section 8.05 Indemnification. (a) Each Lender severally
agrees to indemnify the Agents and the Arranger Parties (in each case to the
extent not promptly reimbursed by the Borrower) from and against such Lender's
ratable share (determined as provided below) of 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 any Agent or Arranger Party, as the case
may be, in any way relating to or arising out of the Financing Documents or any
action taken or omitted by any Agent or Arranger Party under the Financing
Documents (collectively, the "Indemnified Costs"); provided that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting directly and primarily from such Agent's or such Arranger Party's
gross negligence or willful misconduct as found in a final, non-appealable
judgment by a court of competent jurisdiction. Without limitation of the
foregoing, each Lender agrees to reimburse each Agent and each Arranger Party
promptly upon demand for its ratable share of any costs and expenses (including
fees and expenses of counsel) payable by the Borrower under Section 9.04, to
the extent that such Agent or such Arranger Party is not promptly reimbursed
for such costs and expenses by the Borrower. In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Costs, this Section
8.05 applies whether any such investigation, litigation or proceeding is
brought by any Lender or any other Person.
(b) For purposes of this Section 8.05, the Lenders'
respective ratable shares of any amount shall be determined, at any time,
according to the principal amount of the Advances outstanding at such time and
owing to the Lenders. The failure of any Lender to reimburse any Agent or any
Arranger Party promptly upon demand for its ratable share of any amount
required to be paid by the Lenders to such Agent or such Arranger Party as
provided herein shall not relieve any other Lender of its obligation hereunder
to reimburse such Agent or such Arranger Party for its ratable share of such
amount, but no Lender shall be responsible for the failure of any other Lender
to reimburse such Agent or such Arranger Party for such other Lender's ratable
share of such amount. Without prejudice to the survival of any other agreement
of any Lender hereunder, the agreement and obligations of each Lender contained
in this Section 8.05 shall survive the payment in full of principal, interest
and all other amounts payable hereunder and under the other Financing
Documents.
Section 8.06 Successor Administrative Agent. The
Administrative 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 Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's giving of notice of resignation or
the Required Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be a commercial bank organized
under the laws of the United States or of any State thereof and having a
combined capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall succeed to and become vested
with all the rights, powers, discretion, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under the Financing Documents. After any
retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent shall have become effective, the provisions of this
Article VIII shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under the Financing Documents.
Section 8.07 Liability. No Agent shall be liable for any
error of judgment or for any act done or omitted to be done by it in good faith
or for any mistake of fact or law, or for anything it may do or refrain from
doing, except to the extent that any such liability is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
directly and primarily from its gross negligence or willful misconduct.
Section 8.08 Compensation of Agents. Each Agent shall be
entitled to reasonable compensation as may be agreed from time to time between
the Borrower and such Agent, for all services rendered under this Agreement and
the other Financing Documents to which it is a party and such compensation,
together with reimbursement of such Agent in its individual capacity (and its
agency capacity) for its advances, disbursements and reasonable expenses in
connection with the performance of the trust and activities provided for herein
(including the reasonable fees and expenses of its agents and of counsel,
accountants and other experts), shall be paid in full by the Borrower promptly
following demand from such Agent, from time to time as services are rendered
and expenses are incurred. All such payments made by the Borrower to any Agent,
shall be made free and clear of all present and future income, stamp or other
taxes, levies and withholdings imposed, assessed, levied or collected by the
government of the United States of America or any political subdivision or
taxing authority thereof. Except as otherwise expressly provided herein, no
Lender shall have any liability for any fees, expenses or disbursements of any
Agent. Upon its resignation or removal, each Agent shall be entitled to the
prompt payment by the Borrower of its compensation and indemnification for the
services rendered under this Agreement and the other Financing Documents to
which it is a party, and to reimbursement of all reasonable out-of-pocket
expenses up to the date of resignation or removal (including the reasonable
fees and expenses of counsel, if any) incurred in connection with the
performance of such services. The agreements in this Section 8.08 shall survive
any resignation or removal of any Agent and the termination of the other
provisions of this Agreement.
Section 8.09 Exculpatory Provisions. No Agent makes any
representation as to the value or condition of the security interests created
under the Collateral Documents or any part thereof, or as to the title of any
Loan Party or as to the rights and interests granted or the security afforded
by this Agreement or any other Financing Document, or as to the validity,
execution (except by itself), enforceability, legality or sufficiency of this
Agreement, any other Financing Document or the Obligations secured under the
Collateral Documents, and no Agent (in its individual and agency capacities)
shall incur any liability or responsibility in respect of any such matters.
Section 8.10 Treatment of Lenders. Each of the Agents may
treat the Lenders as the holders of Senior Debt Obligations and as the absolute
owners thereof for all purposes under this Agreement and the other Financing
Documents unless such Agent shall receive notice to the contrary from such
Lender or the Administrative Agent.
Section 8.11 Miscellaneous. (a) Instructions. The
Administrative Agent shall have the right at any time to seek instructions
concerning the administration of its duties and obligations hereunder or any
other Financing Documents from the Lenders or any court of competent
jurisdiction. In the event there is any disagreement between the other parties
to this Agreement and the terms of this Agreement or any other applicable
Financing Document do not unambiguously mandate the action any Agent is to take
or not to take in connection therewith under the circumstances then existing,
or any Agent is in doubt as to what action it is required to take or not to
take, (i) such Agent (if it is not the Administrative Agent) shall be entitled
to refrain from taking any action until directed otherwise in writing by a
request signed jointly by the Required Lenders or by order of a court of
competent jurisdiction, and (ii) if such Agent is the Administrative Agent
(other than with respect to Section 7.01), it shall be entitled to refrain from
taking any action until directed otherwise in writing by a request signed
jointly by the Required Lenders or by order of a court of competent
jurisdiction.
(b) No Obligation. None of the provisions of this Agreement
or the other Financing Documents shall be construed to require any Agent to
expend or risk its own funds or otherwise to incur any personal financial
liability in the performance of any of its duties hereunder or thereunder. No
Agent shall be under any obligation to exercise any of the rights or powers
vested in it by this Agreement or the other Financing Documents, at the request
or direction of the Borrower, any other Loan Party or any other Agent or any
Lender, (i) if any action it has been requested or directed to take would be
contrary to Applicable Law, or (ii) unless such Agent shall have been offered
security or indemnity reasonably satisfactory to it against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction (including interest thereon from the time incurred until reimbursed).
Section 8.12 Arranger Parties. Except as set forth in Section
8.03 and 9.12 of this Agreement, none of the Lenders or other Persons
identified on the facing page or signature pages of this Agreement as a "lead
arranger", "syndication agent", "documentation agent" or "joint book runner"
shall have any right, power, obligation, liability, responsibility or duty
under this Agreement or any other Financing Document other than, in the case of
such Lenders, those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders
or other Persons so identified in deciding to enter into this Agreement or in
taking action hereunder.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Amendments, No Waiver. (a) No amendment or
waiver of any provision of this Agreement or the Notes, nor consent to any
departure by any Loan Party therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Required Lenders and, in the
case of an amendment only, the Loan Parties, and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided that no amendment, waiver or consent shall,
unless in writing and signed by: (i) all of the Lenders, at any time (A) amend
(1) this Section 9.01, (2) the term "Required Lenders" or (3) any other
provision or definition of this Agreement relating to the percentage of
consents required for any amendment, waiver or consent under this Agreement,
(B) waive any condition set forth in Section 3.01 or 3.02, or (C) release all
or a substantial portion of, or impair the priority of or the perfection of the
security interest on, the Collateral; and (ii) all of the Lenders affected
thereby, at any time (A) reduce the principal of, or rate of interest on, the
Advances or Notes or any fees or other amounts payable hereunder or extend or
postpone any date scheduled for any payment required to be made hereunder
(including pursuant to Section 2.05, 2.06 or 2.07) or under the Security
Agreement, (B) extend the Maturity Date, (C) subject any Lender to any
additional obligation, (D) alter any provision of this Agreement requiring the
pro rata sharing of payments among the Lenders, (E) change the order of
application of any payments or prepayments of Advances from the application
thereof contemplated by Section 2.05 or 2.06 of this Agreement or, prior to the
amendment and restatement of the Security Agreement on the Second Draw Date,
Section 2.05 of the Security Agreement, (F) modify any provision or definition
of this Agreement or of Exhibit A relating to the percentage of consents
required in connection with any assignment or participation of any right or
obligation under this Agreement, (G) amend the definition of "Interest Period"
so as to allow the durations of Interest Periods to be in excess of six months
without regard to the availability to all Lenders of such duration, or (H)
limit the liability of the Borrower hereunder or under any of the Notes;
provided further that that no amendment, waiver or consent shall, (i) unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or the other Financing Documents,
(ii) unless in writing and signed by the Collateral Agent in addition to the
Lenders required above to take such action, affect the rights or duties of the
Collateral Agent under this Agreement or the other Financing Documents, (iii)
prior to the amendment and restatement of the Security Agreement on the Second
Draw Date, unless in writing and signed by the Intercreditor Agent in addition
to the Lenders required above to take such action, affect the rights or duties
of the Intercreditor Agent under this Agreement or the other Financing
Documents or (iv) unless in writing and signed by each Granting Lender all or
any part of whose Advances are being funded by an SPV at the time of such
amendment, waiver or consent, in addition to the Lenders required above to take
such action, be made or given with respect to Section 9.07(g). Each of the
parties hereto agrees that neither the Security Agreement nor, prior to the
amendment and restatement of the Security Agreement on the Second Draw Date,
any other Collateral Document shall be amended, modified or otherwise
supplemented, nor shall any waiver or consent to departure therefrom be
effective unless such amendment, modification, supplement or consent is
effected in accordance with the terms of Section 9.02 of the Security
Agreement.
(b) (i) Neither the Administrative Agent nor the Collateral
Agent shall enter into any amendment or waiver of any provision of the Security
Agreement or any other Collateral Document, nor consent to any departure by any
Loan Party party thereto therefrom, other than (A) to the extent that any such
amendment, waiver or consent would (1) amend any provision or definition of the
Security Agreement or other Collateral Document relating to the percentage of
consents required for any amendment, waiver or consent under the Security
Agreement or such other Collateral Document, as the case may be, (2) release
all or a substantial portion of, or impair the priority of or the perfection of
the security interest in the Collateral, or (3) limit the liability of any Loan
Party under the Security Agreement or any other Collateral Document, with the
written consent of each Lender, (B) to the extent that any such amendment,
waiver or consent would (1) alter any provision relating to the allocation or
ratable sharing of any payments to be made under the Security Agreement or any
other Collateral Document or (2) at any time prior to the amendment and
restatement of the Security Agreement on the Second Draw Date, change the order
of application of prepayment of Advances from the application thereof
contemplated by Section 2.05 of the Security Agreement, with the written
consent of each Lender affected thereby, or (C) any amendment, waiver or
consent as to any matter not contemplated by clauses (A) or (B), with the
written consent of the Required Lenders and (ii) each Lender hereby agrees and
acknowledges for the benefit of each other Lender that notwithstanding anything
to the contrary in any Financing Document, its consent to any amendment,
modification or waiver of any provision of the Security Agreement or any other
Collateral Document or any consent to any departure therefrom by any Loan Party
party thereto is conditioned on the Administrative Agent's or the Collateral
Agent's receipt of the requisite consents set forth in the foregoing clause
(i). Notwithstanding the foregoing, (I) each Lender hereby authorizes the
Administrative Agent to execute on the Closing Date on its behalf, an Accession
Agreement and the SIA Amendment and the Administrative Agent shall so execute
such Accession Agreement and the SIA Amendment on the Closing Date on behalf of
each Lender and (II) no consent of any Lender shall be required in connection
with any amendment, modification or waiver of any provision of any Collateral
Document entered into by the Administrative Agent or the Collateral Agent
solely to (aa) cure any ambiguity in any of the Collateral Documents or to
correct or supplement any provision of any of the Collateral Documents which is
manifestly inconsistent with any other provision of the Financing Documents;
provided that such action shall not adversely affect the interest of any
Secured Party in any respect or (bb) make any change that would provide any
additional benefits or rights to (but not impose any further obligations on)
the Secured Parties, so long as, prior to the execution of any such amendment,
modification or waiver referred to in this clause (II), the Borrower shall have
delivered to the Administrative Agent and the Collateral Agent an Officer's
Certificate to the effect that such amendment, modification or waiver complies
with the requirements of this clause (II). Neither the Administrative Agent nor
the Collateral Agent shall incur any liability by relying upon such Officer's
Certificate, except to the extent that such reliance shall constitute gross
negligence or willful misconduct.
(c) Except as otherwise specifically provided in this
Agreement or any other Financing Document, the Lenders may amend, modify,
terminate, change or waive, or consent or agree to any amendment, modification,
termination, change or waiver of, any provision of any other Financing Document
to which they are a party in accordance with the terms thereof.
Section 9.02 Notices, Etc. (a) Notices and other
communications provided for hereunder or under the Credit Agreements shall be
either (i) in writing (including telecopier, telegraphic or telex
communication) and mailed, telecopied or otherwise delivered or (ii) as and to
the extent set forth in Section 9.02(b) and in the proviso to this Section
9.02(a), if to the Borrower or any other Loan Party, at its address at
Allegheny Energy Supply Company, LLC, 800 Cabin Hill Drive, Greensburg, PA
15601, Fax: (724) 830-5151, Attention: General Counsel and Chief Financial
Officer; if to any Lender, at its Domestic Lending Office; and if to the
Administrative Agent, at its address at Two Penns Way, New Castle, DE 19720;
Attention: Bank Loan Syndications Department; or, as to the Borrower or the
Administrative 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 Administrative Agent, provided that materials required to
be delivered pursuant to Section 5.04 shall be delivered to the Administrative
Agent as specified in Section 9.02(b) or as otherwise specified to the Borrower
by the Administrative Agent. All such notices and communications shall, when
mailed, telecopied, telegraphed or e-mailed, be effective when deposited in the
mails, telecopied, delivered to the telegraph company or confirmed by e-mail,
respectively, except that notices and communications to the Administrative
Agent pursuant to Article II, III or VII shall not be effective until received
by the Administrative Agent. Delivery by telecopier of an executed counterpart
of any amendment or waiver of any provision of this Agreement, the Notes or of
any Exhibit hereto or thereto to be executed and delivered hereunder shall be
effective as delivery of a manually executed counterpart thereof.
(b) The Borrower hereby agrees that it will provide to it all
information, documents and other materials that it is obligated to furnish to
it pursuant to the Financing Documents, including all notices, requests,
financial statements, financial and other reports, certificates and other
information materials, but excluding any such communication that (i) relates to
the payment of any principal or other amount due under this Agreement prior to
the scheduled date therefor, (ii) provides notice of any Default or Event of
Default or (iii) is required to be delivered to satisfy any condition precedent
to the effectiveness of this Agreement and/or any borrowing or other extension
of credit hereunder (all such non-excluded communications being referred to
herein collectively as "Communications"), by transmitting the Communications in
an electronic/soft medium in a format acceptable to the Administrative Agent to
oploanswebadmin@citigroup.com. In addition, the Borrower agrees to continue to
provide the Communications to the Administrative Agent in the manner specified
in the Financing Documents but only to the extent requested by the
Administrative Agent.
(c) The Borrower further agrees that the Administrative Agent
may make the Communications available to the Lenders by posting the
Communications on Intralinks or a substantially similar electronic transmission
system (the "Platform").
(d) THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE". THE
AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
THE COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN
CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE
ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES (COLLECTIVELY, "AGENT
PARTIES") HAVE ANY LIABILITY TO ANY LOAN PARTY, ANY LENDER OR ANY OTHER PERSON
OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING DIRECT OR INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT,
CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN PARTY'S OR THE ADMINISTRATIVE
AGENT'S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE
EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE
JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM
SUCH AGENT PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(e) The Administrative Agent agrees that the receipt of the
Communications by the Administrative Agent at its e-mail address set forth
above shall constitute effective delivery of the Communications to the
Administrative Agent for purposes of the Financing Documents. Each Lender
agrees that receipt of notice to it (as provided in the next sentence)
specifying that the Communications have been posted to the Platform shall
constitute effective delivery of the Communications to such Lender for purposes
of the Financing Documents. Each Lender agrees to notify the Administrative
Agent in writing (including by electronic communication) from time to time of
such Lender's e-mail address to which the foregoing notice may be sent by
electronic transmission and that the foregoing notice may be sent to such
e-mail address.
(f) Nothing herein shall prejudice the right of the
Administrative Agent or any Lender to give any notice or other communication
pursuant to any Financing Document in any other manner specified in such
Financing Document.
Section 9.03 No Waiver, Remedies. No failure by any Lender or
any Agent to exercise, and no delay by any such Person in exercising any right,
remedy, power or privilege hereunder or under any other Financing Document
shall operate as a waiver thereof nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder or under any other Financing
Document preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges provided herein and in the other Financing Documents are cumulative
and not exclusive of any rights, remedies, powers and privileges provided by
law.
Section 9.04 Indemnity and Expenses. (a) The Borrower agrees
to pay within 30 days (or earlier if, and to the extent, required under Article
III) after the presentation of an invoice all reasonable third-party costs and
expenses of (i) the Agents in connection with the administration of this
Agreement and the other Financing Documents and the transactions contemplated
hereby and thereby (but without duplication of such obligation under any other
Financing Document) and (ii) the Agents and the Arranger Parties in connection
with the preparation, negotiation, execution and delivery of this Agreement,
the Notes, the other Financing Documents and the other documents to be
delivered hereunder or thereunder, including (A) all due diligence, syndication
(including printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, consultant, audit expenses and, where appropriate,
registration of all Financing Documents and (B) the reasonable fees and
expenses of counsel for the Agents. The Borrower further agrees to pay on
demand all costs and expenses of each Agent, each Arranger Party and each
Lender, if any (including reasonable counsel fees and expenses), in connection
with (1) the enforcement (whether through negotiations, legal proceedings or
otherwise) of this Agreement, the Notes, the other Financing Documents and the
other documents to be delivered hereunder or thereunder, including reasonable
fees and expenses of counsel for each Agent, each Arranger Party and each
Lender; (2) the custody, preservation, use or operation of, or the sale of,
collection from or other realization upon, any of the Collateral of any Loan
Party; (3) the exercise or enforcement of any of the rights of any Agent,
Arranger Party or Lender under any Financing Document; (4) the failure by such
Loan Party to perform or observe any of the provisions hereof; and (5) any
amendments, modifications, waivers or consents required or requested under the
Financing Documents.
(b) Each Loan Party agrees to indemnify and hold harmless
each Agent, each Arranger Party and each Lender and each of its Affiliates and
their respective officers, directors, employees, agents, trustees, attorneys
and advisors (each, an "Indemnified Party") from and against any and all
claims, damages, losses, liabilities and expenses (including 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 in connection with any investigation, litigation or
proceeding or preparation of a defense in connection therewith) or relating to
(i) execution, amendment or administration of this Agreement, the other
Financing Documents, any of the transactions contemplated herein or therein or
the actual or proposed use of the proceeds of the Advances, or (ii) the actual
or alleged presence of Hazardous Materials requiring remediation or other
response pursuant to Environmental Law on any property of the Borrower or any
of its Subsidiaries or any Environmental Action relating in any way to the
Borrower or any of its Subsidiaries, 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 directly and primarily 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 9.04(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. Each Loan
Party agrees not to assert any claim against the Administrative Agent, any
Lender or any of their Affiliates, or any of their respective officers,
directors, employees, agents, attorneys and advisors, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to the actual or proposed use of the proceeds of the
Advances, the Financing Documents or any of the transactions contemplated by
the Financing Documents.
(c) The indemnities provided by each Loan Party pursuant to
this Agreement shall survive the expiration, cancellation, termination or
modification of this Agreement or the other Financing Documents, the
resignation or removal of an Agent, and the provision of any subsequent or
additional indemnity by any person.
(d) 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 2.03, 2.06, 2.10 or 2.11,
acceleration of the maturity of the Notes or for any other reason, or if the
Borrower fails to make any payment or prepayment of an Advance for which a
notice of prepayment has been given or that is otherwise required to be made,
whether pursuant to Section 2.05 or 2.06 or otherwise, the Borrower shall, upon
demand by such Lender (with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such Lender any amounts
required to compensate such Lender for any additional losses, costs or expenses
that it may reasonably incur as a result of such payment or Conversion or such
failure to pay or prepay, as the case may be, including any loss (excluding
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to fund or maintain such Advance.
(e) If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it under any Financing Document, including
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of such Loan Party by the Administrative Agent or any Lender, in its sole
discretion.
Section 9.05 Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the
request or the granting of the consent specified by Section 6.02 to authorize
the Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.02, the Administrative Agent and each Lender and each
of their respective Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law (including PUHCA), to set off
and otherwise apply any and all deposits (general or special, time or demand,
provisional or final), other than any Pledged Account or the Controlled
Accounts, at any time held and other indebtedness at any time owing by the
Administrative Agent, such Lender or such Affiliate 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 the Financing Documents, irrespective of
whether the Administrative Agent or such Lender shall have made any demand
under this Agreement or such Note or Notes and although such Obligations may be
unmatured. The Administrative Agent and each Lender agrees promptly to notify
the Borrower after any such set-off and application; provided, however, that
the failure to give such notice shall not affect the validity of such set-off
and application. The rights of the Administrative Agent and each Lender and
their respective Affiliates under this Section 9.05 are in addition to other
rights and remedies (including other rights of set-off) that the Administrative
Agent, such Lender and their respective Affiliates may have.
Section 9.06 Binding Effect. This Agreement shall become
effective at such time as it shall have been executed by the Borrower and the
Administrative Agent and the Administrative Agent shall have been notified by
each Lender that such Lender has executed it and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Administrative 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 9.07 Assignments and Participations. (a) Each Lender
may and, if requested by the Borrower (following (i) a demand by such Lender
for the payment of additional compensation pursuant to Section 2.11 or 2.12,
(ii) an assertion by such Lender pursuant to Section 2.10 that it is unlawful
for such Lender to make Eurodollar Rate Advances or (iii) a failure by such
Lender to approve any amendment or waiver pursuant to Section 9.01, provided
that such amendment or waiver would otherwise have been effective but for such
Lender's failure, together with the failure of any other Lender to which the
Borrower has made a similar request under this clause (a), to approve such
amendment or waiver, provided further that, with respect to clause (iii), such
failure to approve shall have continued for a period of not less than five
Business Days following written notice by the Borrower to such Lender of such
request by the Borrower) shall, assign to one or more Eligible Assignees all or
a portion of its rights and obligations under this Agreement (including all or
a portion of the Advances owing to it and the Notes held by it), including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided,
however, that (i) each such assignment shall be of a uniform, and not a
varying, percentage of all rights and obligations of such Lender under and in
respect of and shall be made on a pro rata basis with respect to each of the
Advances held by such Lender, (ii) except in the case of an assignment to a
Person that, immediately prior to such assignment, was a Lender, an Affiliate
of any Lender or an Approved Fund or an assignment of all of a Lender's rights
and obligations under this Agreement, the aggregate amount of the Advances
being assigned to such Eligible Assignee pursuant to such assignment
(determined as of the date of the Assignment and Acceptance with respect to
such assignment) shall in no event be less than $1,000,000 (or such lesser
amount as shall be approved by the Administrative Agent), and shall be in
increments of $250,000 in excess thereof; provided that Related Funds shall be
combined for purposes of determining compliance with such minimum assignment
amounts, (iii) each such assignment shall be to an Eligible Assignee, (iv) no
such assignments shall be permitted without the consent of the Administrative
Agent and, so long as no Default has occurred and is continuing, the Borrower
(in each case, such consent not to be unreasonably withheld), except
assignments to any other Lender, an Affiliate of any Lender, any Approved Fund
or to any Federal Reserve Bank and (v) the parties to each such assignment
shall execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
or Notes subject to such assignment and a processing and recordation fee of
$3,500 (such fee to be paid by the Borrower if such assignment is being made
pursuant to a request of the Borrower therefor pursuant to this Section
9.07(a)); provided that only one such fee shall be payable in the case of
contemporaneous assignments to or by two or more Approved Funds; provided,
further, that (I) each such assignment made as a result of a request by the
Borrower pursuant to this Section 9.07(a) shall be arranged by the Borrower
with the approval of the Administrative Agent, which approval shall not be
unreasonably withheld or delayed, and shall be either an assignment of all of
the rights and obligations of the assigning Lender under this Agreement or an
assignment of a portion of such rights and obligations made concurrently with
another such assignment or other such assignments that, in the aggregate, cover
all of the rights and obligations of the assigning Lender under this Agreement
and (II) no Lender shall be obligated to make any such assignment as a result
of a demand by the Borrower pursuant to this Section 9.07(a) unless and until
such Lender shall have received one or more payments from one or more Eligible
Assignees in an aggregate amount at least equal to the aggregate outstanding
principal amount of the Advances owing to such Lender, together with accrued
interest thereon to the date of payment of such principal amount, and from the
Borrower and/or one or more Eligible Assignees in an aggregate amount equal to
all other amounts payable to such Lender under this Agreement and the other
Financing Documents (including, without limitation, any amounts owing under
Sections 2.11, 2.12 or 9.04).
(b) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in such Assignment and Acceptance,
(i) 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 (ii) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (other than its rights under
Sections 2.11, 2.12 and 9.04 to the extent any claim thereunder relates to an
event arising prior to such assignment) and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance,
each Lender assignor thereunder and each assignee thereunder confirm to and
agree with each other and the other parties thereto and 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
any Financing Document 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, any Financing Document or any other instrument or document furnished
pursuant thereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or the performance or observance by the Borrower of any of its
obligations under any Financing Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement and each other Financing Document, together with copies
of the financial statements referred to in Sections 3.01 and 5.04 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 Administrative
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 or any
other Financing Document; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent,
the Collateral Agent and the Intercreditor Agent to take such action as agent
on its behalf and to exercise such powers and discretion under the Financing
Documents as are delegated to the Administrative Agent, the Collateral Agent
and the Intercreditor Agent, respectively, by the terms hereof and thereof,
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 and the other
Financing Documents are required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at its address
referred to in Section 9.02 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 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 Administrative Agent and the Lenders shall 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 the Administrative Agent or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee, together with any Note or Notes subject
to such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit A,
(i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrower and each of the Intercreditor Agent and the Collateral Agent. In the
case of any assignment by a Lender, within five Business Days after its receipt
of such notice, the Borrower, at its own expense, shall execute and deliver to
the Administrative Agent in exchange for the surrendered Note or Notes a new
Note to the order of such Eligible Assignee in an amount equal to the principal
amount of the Advances assumed by it pursuant to such Assignment and Acceptance
and, if any assigning Lender has retained Advances hereunder, a new Note to the
order of such assigning Lender in an amount equal to the Advances 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 C.
(f) Each Lender may sell participations to one or more
Persons (other than any Loan Party or any Affiliate of any Loan Party) in or to
all or a portion of its rights and obligations under this Agreement in respect
of the Advances owing to it and the Notes (if any) held by it; provided that
any such sale shall be of a uniform and not varying percentage of all of its
rights and obligations in respect of such Advances; provided, however, that (i)
such Lender's obligations under this Agreement 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, each 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 under any such participation shall have any
right to approve any amendment or waiver of any provision of any Financing
Document, or any consent to any departure by any Loan Party therefrom, except
to the extent that such amendment, waiver or consent would reduce the principal
of, or interest on, the Notes or other amounts payable hereunder, in each case
to the extent subject to such participation, postpone any date fixed for any
payment of principal of, or interest on, the Notes or any fees or other amounts
payable hereunder, in each case to the extent subject to such participation, or
release any material portion of the Collateral.
(g) Notwithstanding anything in this Agreement to the
contrary (including any other provision regarding assignments, participations,
transfers or novations), any Lender (a "Granting Lender") may, without the
consent of any other party hereto, grant to a special purpose vehicle (whether
a corporation, partnership, limited liability company, trust or otherwise, an
"SPV") sponsored or managed by the Granting Lender or any Affiliate thereof, a
participation in all or any part of any Advance that such Granting Lender has
made pursuant to this Agreement; provided that (i) such Granting Lender's
obligations under this Agreement shall remain unchanged; (ii) such Granting
Lender shall remain the holder of its Notes for all purposes under this
Agreement; and (iii) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Granting Lender in
connection with such Granting Lender's rights and obligations under the
Financing Documents. Each party hereto hereby agrees that (A) no SPV will be
entitled to any rights or benefits that a Lender would not otherwise be
entitled to under this Agreement or any other Financing Document; and (B) an
SPV may assign its interest in any Advance under this Agreement to any Person
that would constitute a Lender subject to the satisfaction of all requirements
for an assignment by any Lender set forth in this Section 9.07. Notwithstanding
anything in this Agreement to the contrary, the Granting Lender and any SPV
may, without the consent of any other party to this Agreement, and without
limiting any other rights of disclosure of the Granting Lender under this
Agreement, disclose on a confidential basis any non-public information relating
to its funding of its Advances to (1) (in the case of the Granting Lender) any
actual or prospective SPV, (2) (in the case of an SPV) its lenders, sureties,
reinsurers, guarantors or credit liquidity enhancers, (3) their respective
directors, officers, and advisors, and (4) any rating agency.
(h) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, 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.
(i) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement (including the Advances
owing to it and the Note or Notes held by it) to secure the obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
Section 9.08 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 an original executed
counterpart of this Agreement.
Section 9.09 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 or any of the other Financing Documents to which it
is a party, 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 fullest 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 or any of the
other Financing Documents in the courts of any jurisdiction.
(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 have to the laying of venue
of any suit, action or proceeding arising out of or relating to this Agreement
or any of the other Financing Documents to which it is a party 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.
Section 9.10 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 9.11 Waiver of Jury Trial. Each of the Borrower, the
Administrative Agent and the Lenders irrevocably waives all right to trial by
jury in any action, proceeding or counterclaim (whether based on contract, tort
or otherwise) arising out of or relating to any of the Financing Documents, the
Advances or the actions of the Administrative Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.
Section 9.12 Confidentiality. (a) Neither any Agent, any
Arranger Party nor any Lender may, without the prior written consent of the
Borrower, disclose to any Person (i) any confidential, proprietary or
non-public information of the Borrower furnished to the Agents, the Arranger
Parties or the Lenders by the Borrower (such information being referred to
collectively herein as the "Confidential Information") or (ii) the fact that
the Confidential Information has been made available or any of the terms,
conditions or other facts with respect to the Confidential Information, in each
case except as permitted by Section 9.07 or this Section 9.12 and except that
each of the Agents, each of the Arranger Parties and each of the Lenders may
disclose Confidential Information (i) to its and its Affiliates' employees,
officers, directors, agents and advisors (collectively, "Representatives") who
need to know the Confidential Information for the purpose of administering or
enforcing its rights under this Agreement and the other Financing Documents and
the transactions contemplated hereby and thereby or for the discharge of their
duties (it being understood that the Representatives to whom such disclosure is
made will be informed of the confidential nature of such Confidential
Information and instructed to keep such Confidential Information confidential
on substantially the same terms as provided herein), (ii) to the extent
requested by any regulatory authority having jurisdiction over it or to the
extent necessary for purposes of enforcing this Agreement or any other
Financing Document, (iii) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (iv) to any other
party to this Agreement, (v) in connection with the exercise of any remedies
hereunder or under any other Financing Document or any suit, action or
proceeding relating to this Agreement or any other Financing Document or the
enforcement of rights hereunder or thereunder, (vi) subject to an agreement
containing provisions substantially the same as those of this Section 9.12, to
any pledgee or assignee of or participant in, or any prospective assignee or
pledgee of or participant in, any of its rights or obligations under this
Agreement including in the case of any securitization or collateralization of,
or other similar transaction relating to the rights and obligations of any
Lender or Lenders hereunder, disclosure to any necessary Person in connection
with such securitization, collateralization or other transaction (including any
funding vehicle organized to undertake or effectuate such securitization,
collateralization or other transaction, its lenders, sureties, reinsurers, swap
counterparties, guarantors or credit liquidity enhancers, their respective
directors, officers, and advisors, and any rating agency) so long as the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Confidential Information and such Persons have agreed in writing
(or with respect to any rating agency, in writing or otherwise) to keep such
Confidential Information confidential on substantially the same terms as
provided herein, (vii) to the extent such Confidential Information (A) is or
becomes generally available to the public on a non-confidential basis other
than as a result of a breach of this Section 9.12 by such Agent, such Arranger
Party or such Lender, or (B) is or becomes available to such Agent, such
Arranger Party or such Lender on a nonconfidential basis from a source other
than the Borrower and (viii) with the consent of the Borrower.
(b) Neither any Agent, any Arranger Party nor any Lender
shall, without the prior written consent of the Borrower, use, either directly
or indirectly, any of the Confidential Information except in connection with
this Agreement and the other Financing Documents and the transactions
contemplated hereby and thereby.
(c) Notwithstanding the foregoing, any of the parties hereto
may disclose to any and all persons, without limitation of any kind, the U.S.
tax treatment and U.S. tax structure of the transactions contemplated by this
Agreement and the other Financing Documents and all materials of any kind
(including opinions or other tax analyses) that are provided to such parties
relating to such U.S. tax treatment and U.S. tax structure.
(d) In the event that any Agent, any Arranger Party or any
Lender becomes legally compelled to disclose any of the Confidential
Information otherwise than as contemplated by Section 9.12(a), such Agent, such
Arranger Party or such Lender shall provide the Borrower with notice of such
event promptly upon its obtaining knowledge thereof (provided that it is not
otherwise prohibited by Applicable Law from giving such notice) so that the
Borrower may seek a protective order or other appropriate remedy. In the event
that such protective order or other remedy is not obtained, such Agent, such
Arranger Party or such Lender shall furnish only that portion of the
Confidential Information that it is legally required to furnish and shall
cooperate with the Borrower's counsel to enable the Borrower to obtain a
protective order or other reliable assurance that confidential treatment will
be accorded the Confidential Information.
(e) In the event of any breach of this Section 9.12, the
Borrower shall be entitled to equitable relief (including injunction and
specific performance) in addition to all other remedies available to it at law
or in equity.
(f) Neither any Agent, any Arranger Party nor any Lender
shall make any public announcement, advertisement, statement or communication
regarding the Borrower, its Affiliates (insofar as such announcement,
advertisement, statement or communication relates to the Borrower or the
transactions contemplated hereby) or this Agreement or the transactions
contemplated hereby without the prior consent of the Borrower (such consent not
to be unreasonably withheld or delayed).
(g) The obligations of each Agent, each Arranger Party and
each Lender under this Section 9.12 shall survive for a period of one year
following the termination or expiration of this Agreement.
Section 9.13 Benefits of Agreement. Nothing in this Agreement
or any other Financing Document, express or implied, shall give to any Person,
other than the parties hereto, each Indemnified Party and each of their
successors and permitted assigns under this Agreement or any other Financing
Document, any benefit or any legal or equitable right or remedy under this
Agreement; provided that each Indemnified Party and its successors and assigns
shall not have any benefit or any legal or equitable right or remedy under this
Agreement other than as provided by Section 9.04(b).
Section 9.14 Severability. If any provision of this Agreement
shall be invalid, illegal or unenforceable, then to the extent permitted by
law, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.
Section 9.15 Limitations. (a) The obligations, liabilities or
responsibilities of any party hereunder shall be limited to those obligations,
liabilities or responsibilities expressly set forth and attributed to such
party pursuant to this Agreement or otherwise applicable under Applicable Law.
(b) In no event shall any Indemnified Party be liable for,
and each Loan Party hereby agrees not to assert any claim against any
Indemnified Party, on any theory of liability, for consequential, incidental,
indirect, punitive or special damages arising out of or otherwise relating to
the Notes, this Agreement, the other Financing Documents, any of the
transactions contemplated herein or therein or the actual or proposed use of
the proceeds of the Advances.
Section 9.16 Survival. Notwithstanding anything in this
Agreement to the contrary, Sections 8.05, 8.08, 8.12, 9.04, 9.09, 9.10, 9.11,
9.12, 9.15 and 9.16 shall survive any termination of this Agreement. In
addition, each representation and warranty made or deemed to be made hereunder
shall survive the making of such representation and warranty, and no Lender
shall be deemed to have waived, by reason of making any Advance or making any
payment pursuant thereto, any Default that may arise by reason of such
representation or warranty proving to have been false or misleading,
notwithstanding that such Lender may have had notice or knowledge or reason to
believe that such representation or warranty was false or misleading at the
time such Advance was made.
Section 9.17 USA Patriot Act Notice. Each Lender and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"),
it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Act.
IN WITNESS WHEREOF, each party hereto has caused this
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
ALLEGHENY ENERGY SUPPLY COMPANY, LLC,
as Borrower
By: /s/ Suzanne C. Lewis
---------------------
Name: Suzanne C. Lewis
Title: Treasurer
ALLEGHENY ENERGY SUPPLY CAPITAL, LLC,
as Loan Party
By: /s/ Richard G. Gilmore
----------------------
Name: Richard G. Gilmore
Title: President
ALLEGHENY ENERGY SUPPLY DEVELOPMENT
SERVICES, LLC, as Loan Party
By: /s/ Suzanne C. Lewis
--------------------
Name: Suzanne C. Lewis
Title: Treasurer
ACADIA BAY ENERGY COMPANY, LLC,
as Loan Party
By: /s/ Suzanne C. Lewis
--------------------
Name: Suzanne C. Lewis
Title: Treasurer
BUCHANAN ENERGY COMPANY OF VIRGINIA, LLC,
as Loan Party
By: /s/ Suzanne C. Lewis
--------------------
Name: Suzanne C. Lewis
Title: Treasurer
LAKE ACQUISITION COMPANY, L.L.C.,
as Loan Party
By: /s/ Suzanne C. Lewis
--------------------
Name: Suzanne C. Lewis
Title: Treasurer
CITICORP NORTH AMERICA, INC., as Lender
and Administrative Agent
By: /s/ Caesar W. Wyszominski
--------------------
Name: Caesar W. Wyszominski
Title: Vice President
CITIBANK, N.A., as Intercreditor Agent
By: /s/ Caesar W. Wyszominski
--------------------
Name: Caesar W. Wyszominski
Title: Vice President
CITIBANK, N.A., as Collateral Agent
By: /s/ Fernando Moreya
--------------------
Name: Fernando Moreya
Title: Assistant Vice President