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EXHIBIT 4.8
Execution Copy
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WORKING CAPITAL AGREEMENT
Dated as of March 1, 2000
among
AES RED OAK, L.L.C.,
as Borrower
and
THE BANKS NAMED HEREIN
and
DRESDNER BANK AG,
acting through its New York Branch
and/or Grand Cayman Branch
as Initial Bank and as a Bank
and
DRESDNER BANK AG,
acting through its New York Branch,
as Agent
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830 MW (Net) Gas-Fired Combined Cycle Electric Generating Facility
Borough of Sayreville, Middlesex County, New Jersey
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS; CONSTRUCTION................................................................1
SECTION 1.2 DEFINITIONS...................................................................1
SECTION 1.3 CONSTRUCTION..................................................................5
ARTICLE II COMMITMENTS AND LOANS...................................................................5
SECTION 2.1 COMMITMENTS...................................................................5
SECTION 2.2 MAKING LOANS..................................................................7
SECTION 2.3 INTEREST......................................................................8
SECTION 2.4 REPAYMENT....................................................................11
SECTION 2.5 PREPAYMENTS..................................................................11
SECTION 2.6 FEES.........................................................................11
SECTION 2.7 SECURITY.....................................................................12
SECTION 2.8 PAYMENTS.....................................................................12
SECTION 2.9 COMPUTATION OF INTEREST AND FEES.............................................12
SECTION 2.10 PAYMENTS ON NON-BUSINESS DAYS................................................12
SECTION 2.11 SHARING OF PAYMENTS, ETC.....................................................13
SECTION 2.12 EVIDENCE OF DEBT.............................................................13
SECTION 2.13 INCREASED COSTS AND REDUCED RETURNS..........................................14
SECTION 2.14 CAPITAL ADEQUACY.............................................................16
SECTION 2.15 TAXES........................................................................16
SECTION 2.16 ILLEGALITY...................................................................18
SECTION 2.17 ASSIGNMENTS BY BANKS.........................................................19
SECTION 2.18 REFINANCING OPTION...........................................................19
SECTION 2.19 RIGHT OF SET-OFF.............................................................19
ARTICLE III CONDITIONS PRECEDENT..................................................................20
SECTION 3.1 CONDITIONS PRECEDENT TO EFFECTIVENESS........................................20
SECTION 3.2 CONDITIONS PRECEDENT TO EACH BORROWING.......................................21
ARTICLE IV REPRESENTATIONS AND WARRANTIES.........................................................22
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF BORROWER...................................22
SECTION 4.2 REPRESENTATIONS AND WARRANTIES OF INITIAL BANK...............................22
ARTICLE V COVENANTS...............................................................................22
SECTION 5.1 COVENANTS....................................................................22
ARTICLE VI DEFAULTS AND REMEDIES..................................................................23
SECTION 6.1 EVENTS OF DEFAULT............................................................23
SECTION 6.2 REMEDIES.....................................................................23
ARTICLE VII THE AGENT.............................................................................23
SECTION 7.1 AUTHORIZATION AND ACTION.....................................................23
SECTION 7.2 AGENT'S RELIANCE, ETC........................................................24
SECTION 7.3 INITIAL BANK AND AFFILIATES..................................................25
SECTION 7.4 BANK CREDIT DECISION.........................................................25
SECTION 7.5 INDEMNIFICATION..............................................................25
SECTION 7.6 SUCCESSOR AGENT..............................................................25
SECTION 7.7 COLLATERAL...................................................................26
ARTICLE VIII MISCELLANEOUS........................................................................26
SECTION 8.1 AMENDMENTS, ETC..............................................................26
SECTION 8.2 NOTICES, ETC.................................................................27
SECTION 8.3 NO WAIVER; REMEDIES..........................................................27
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SECTION 8.4 COSTS AND EXPENSES...........................................................27
SECTION 8.5 APPLICATION OF MONIES........................................................28
SECTION 8.6 SEVERABILITY.................................................................28
SECTION 8.7 NON-RECOURSE LIABILITY.......................................................28
SECTION 8.8 BINDING EFFECT...............................................................29
SECTION 8.9 ASSIGNMENTS AND PARTICIPATIONS...............................................29
SECTION 8.10 INDEMNIFICATION..............................................................30
SECTION 8.11 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.......31
SECTION 8.12 HEADINGS.....................................................................32
SECTION 8.13 EXECUTION IN COUNTERPARTS....................................................32
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Exhibit A Revolving Promissory Note
Exhibit B Notice of Borrowing
Exhibit C Assignment and Acceptance
Exhibit D Notice of Repayment
Exhibit E Commitment Increase Supplement
Schedule 1 Applicable Margin
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WORKING CAPITAL AGREEMENT
This Working Capital Agreement (this "Agreement"), dated as of March 1,
2000, is entered into by and among AES RED OAK, L.L.C., a Delaware limited
liability company (the "Borrower"), DRESDNER BANK AG, acting through its New
York Branch and/or Grand Cayman Branch (in its individual capacity, "Initial
Bank"), together with each other bank that becomes a party hereto pursuant to
Section 2.17 or Section 8.9 (each a "Bank" and collectively, the "Banks") and
DRESDNER BANK AG, acting through its New York Branch, as agent (in such
capacity, together with its successors in such capacity, the "Agent") for the
Banks.
(A) Borrower has authorized the creation of issues of nonrecourse bonds,
debentures, promissory notes and other evidences of indebtedness to be issued in
one or more series (collectively, the "SENIOR DEBT"), as more particularly
described in the Trust Indenture dated as of March 1, 2000 (as amended and in
effect from time to time, the "INDENTURE") among the Borrower, the Trustee and
the Depositary Bank, the proceeds of which are to be applied to the development,
construction, start-up, testing and operation of an approximately 830 MW (net)
gas-fired power station to be located in the Borough of Sayreville, Middlesex
County, New Jersey.
(B) It is a condition to the occurrence of the Closing Date that the
parties hereto shall have entered into this Agreement.
(C) The Borrower has requested that the Banks make available, and the Banks
are willing to make available, to the Borrower a working capital facility of up
to the maximum aggregate principal amount of $2,500,000 (subject to adjustment
as hereinafter set forth) upon the terms and conditions hereinafter set forth.
ARTICLE I
DEFINITIONS; CONSTRUCTION
SECTION 1.2 DEFINITIONS.
(a) Terms defined in the Indenture have, unless the same are defined herein
or the context otherwise requires, the same meaning when used herein.
(b) The following terms are used in this Agreement with the following
respective meanings:
"ADJUSTED BASE RATE" means the higher of (a) the Federal Funds Rate plus
.50% and (b) the Reference Rate.
"ANNUAL CLEAN-UP PERIOD" means, for each 365 day period commencing on
March 15 of a year, and ending on March 14 of the succeeding year (including
the 365 day period
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commencing on March 15, 2000), a period of 30 consecutive days during which
no Loans shall be outstanding hereunder.
"APPLICABLE MARGIN" means the margin applicable to Base Rate Loans or
Eurodollar Rate Loans, in each case as set forth under the applicable heading
and for the applicable rating category as set forth on Schedule 1.
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance entered into
by a Bank and another Person substantially in the form of Exhibit C.
"AVAILABILITY COMMENCEMENT DATE" means the date selected by the Borrower
pursuant to Section 2.1(b).
"BASE RATE LOAN" means a Loan bearing interest at a rate determined with
reference to the Adjusted Base Rate.
"BORROWING" means a borrowing by the Borrower consisting of Loans.
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which banks
are open for business in New York, New York, and with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Rate Loans, any day that is also a day for trading by and between
banks in U.S. dollar deposits in the interbank Eurodollar market.
"CLOSING DATE" means the date on which the conditions precedent set forth
in Section 3.1 have been fulfilled.
"COMMERCIAL OPERATION DATE" has the meaning set forth in the PPA.
"COMMITMENT" has the meaning set forth in Section 2.1(a).
"COMMITMENT INCREASE SUPPLEMENT" has the meaning set forth in Section
2.1(d).
"CREDIT DOCUMENTS" means this Agreement and the Note.
"DEFAULT" means an event that with the giving of any required notice and/or
the lapse of any required time would constitute an Event of Default.
"EUROCURRENCY LIABILITIES" has the meaning ascribed thereto in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from time
to time.
"EUROCURRENCY RESERVE PERIOD" has the meaning set forth in Section 2.13(b).
"EURODOLLAR RATE" means, for any Interest Period with respect to a
Eurodollar Rate Loan, the rate PER ANNUM equal to the average (rounded upwards,
if necessary, to the nearest 1/100 of 1%) of the offered rates which appear on
the Telerate page 3750, British Bankers Association Interest Settlement Rates
for deposits in Dollars (or such other system for the purpose of
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displaying rates of leading reference banks in the London interbank market, as
designated by the Agent) as of 11:00 a.m. (London time) on the day two Business
Days prior to the first day of such Interest Period in an amount approximately
equal to the principal amount of the Eurodollar Rate Loan to which such Interest
Period is to apply and for a period of time comparable to such Interest Period.
"EURODOLLAR RATE LOAN" means a Loan bearing interest at a rate determined
with reference to the Eurodollar Rate.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.1.
"EXCLUDED TAXES" has the meaning set forth in Section 2.15(a).
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate PER
ANNUM equal for each day during such period to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.
"FINAL DISBURSEMENT DATE" means the earliest of (a) the date that is five
years after the Closing Date, unless extended pursuant to Section 2.1(c), in
which case such extended date, (b) the date on which the Commitments are fully
canceled pursuant to Section 2.1(e), and (c) the occurrence of an Event of
Default and the Agent's termination in accordance with Section 6.2 of the
obligation of each Bank to make Loans hereunder.
"INDEMNIFIED PARTY" has the meaning set forth in Section 8.10.
"INTEREST PERIOD" means with respect to each Eurodollar Rate Loan, a period
commencing on the date specified in the applicable Notice of Interest Rate
Election and ending one, two, three or six calendar months thereafter, or, if
funds in the Eurodollar market are, in the sole judgment of the Agent, available
to the Agent and the Banks for such period, nine or twelve calendar months, as
the Borrower may elect in the applicable Notice, PROVIDED that:
(a) any Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(b) any Interest Period which begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month;
(c) no Interest Period shall be selected to be applicable to a Loan if such
Interest Period ends after the next scheduled principal repayment date pursuant
to this Agreement and
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the Note unless, at the time of such selection, there are outstanding Base Rate
Loans and/or Eurodollar Rate Loans the Interest Period(s) applicable to which
end on or before such scheduled repayment date in an aggregate principal amount
at least equal to the amount of such next scheduled principal repayment; and
(d) no Interest Period shall end after the latest Maturity Date.
"LOAN" has the meaning set forth in Section 2.1(a).
"MATURITY DATE" means, as to each Loan, the date 180 days after such Loan
is advanced pursuant to Section 2.2(a).
"NOTE" has the meaning set forth in Section 2.12(a).
"NOTICE OF BORROWING" has the meaning set forth in Section 2.2(a).
"NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in Section
2.3(b).
"OBLIGATIONS" means all of the obligations of the Borrower to the Banks and
the Agent under this Agreement and the Note, whether for principal, interest,
fees, expenses, indemnification or otherwise.
"PARTICIPANT" has the meaning set forth in Section 8.9(b).
"POST-DEFAULT RATE" means the rate otherwise applicable under Section
2.3(a) plus 2.0%.
"PROJECT" means the Facility, together with all associated equipment and
facilities and the development and construction thereof.
"PURCHASING BANK" has the meaning set forth in Section 8.9(a).
"QUARTERLY DATE" means each Bond Payment Date during the term of this
Agreement.
"REFERENCE RATE" means the variable rate of interest PER ANNUM officially
announced or published by the Agent from time to time as its "prime rate" or
"reference rate," such rate being set by the Agent as a general reference rate
of interest taking into account such factors as the Agent may deem appropriate,
it being understood that many of the Agent's commercial or other loans are
priced in relation to such rate, that it is not necessarily the lowest or best
rate actually charged to any customer and that the Agent may make various
commercial or other loans at rates of interest having no relationship to such
rate. For purposes of this Agreement, each change in the Reference Rate shall be
effective as of the opening of business on the date announced as the effective
date of the change in such "prime rate" or "reference rate."
"REPLACEMENT BANK" has the meaning set forth in Section 2.17.
"REQUIRED BANKS" means, at any time, Banks (one of which shall be the
Agent) holding at least 66-2/3% of the sum of the aggregate unpaid principal
amount of the Loans and/or the
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Commitments; PROVIDED, HOWEVER, that, if and so long as there are only two
Banks, "Required Banks" shall mean both of such Banks.
"TAXES" means any and all present or future income, stamp, transfer,
turnover and other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, and any and all interest, penalties, claims or
other liabilities arising under or relating thereto, including those imposed on
any of the Banks or on payments to be made to or received by any of them from
the Borrower.
"WORKING CAPITAL REQUIREMENT" means the sum of (i) the unpaid balance of
any outstanding Loans and (ii) the total amount of funds that Borrower will need
for working capital purposes in connection with the Project during any six month
period without duplication, as certified by the Independent Engineer, rounded
upward to the next $1,000 increment.
SECTION 1.3 CONSTRUCTION.
In this Agreement, unless expressly specified to the contrary: the singular
includes the plural and the plural the singular; words importing any gender
include the other genders; references to statutes are to be construed as
including all statutory provisions consolidating, amending or replacing the
statute referred to; references to "writing" include printing, typing,
lithography and other means of reproducing words in a tangible, visible form;
the words "including," "includes" and "include" shall be deemed to be followed
by the words "without limitation"; references to articles, sections (or
subdivisions of sections), recitals, appendices, exhibits, annexes or schedules
are to those of this Agreement; references to agreements and other instruments
shall be deemed to include all amendments and other modifications to such
agreements and instruments, but only to the extent such amendments and other
modifications are not prohibited by the terms of this Agreement; references to
Persons include their respective permitted successors and assigns and, in the
case of Governmental Authorities, Persons succeeding to their respective
functions and capacities; and all accounting terms used in this Agreement shall
be interpreted, all accounting determinations under this Agreement shall be made
and all financial statements required to be delivered under this Agreement shall
be prepared in accordance with GAAP as in effect from time to time, on a basis
consistent with the most recent audited financial statements, if any, of the
relevant Person delivered to the Agent, or otherwise reasonably acceptable to
the Agent.
ARTICLE II
COMMITMENTS AND LOANS
SECTION 2.1 COMMITMENTS.
(a) Subject to the terms and conditions of this Agreement, each Bank
irrevocably agrees severally to extend credit to the Borrower from time to time
from the Availability Commencement Date to the Final Disbursement Date by making
loans to the Borrower (each a "LOAN") pursuant to Section 2.2, in an aggregate
amount outstanding not to exceed at any time
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the amount set forth opposite such Bank's name on the signature pages hereof or,
if such Bank has entered into one or more Assignments and Acceptances, set forth
for such Bank in the register maintained by the Agent (said agreement by each
Bank, as the same may be reduced from time to time pursuant to the terms of this
Agreement, herein called such Bank's "COMMITMENT"); PROVIDED THAT, during the
period prior to the earlier of the Commercial Operation Date and the Guaranteed
Provisional Acceptance Date, the amount that the Borrower shall be permitted to
borrow shall not exceed $1,000,000 in the aggregate. Except as provided in the
immediately preceding proviso, within the limits of each Bank's Commitment, the
Borrower may borrow under Section 2.2, prepay Loans under Sections 2.5(a) and
(b), and reborrow under Section 2.2.
(b) The Borrower may, by notice in writing given to the Agent not less than
one Business Day before the date selected, select either of the following dates
to be the Availability Commencement Date: (i) the Commercial Operation Date or
(ii) the date on which the Borrower is obligated to make its first payment for
the purchase or transportation of gas for use at the Project.
(c) On or prior to the date that is one (1) year prior to the original
Final Disbursement Date or any extension thereof pursuant to this Section 2.1(c)
(the "NOTICE DATE"), the Banks may, in their sole discretion, by unanimous
consent, extend the original or extended Final Disbursement Date, as the case
may be, for an additional one or more years. If the Banks agree to extend the
Final Disbursement Date, the Agent shall notify the Borrower of the Banks'
decision regarding such extension on or prior to the applicable Notice Date.
Failure of the Agent to provide the Borrower with written notice of renewal on
or prior to the applicable Notice Date in respect of the original Final
Disbursement Date or any extended Final Disbursement Date, as the case may be,
or imposition of additional terms and conditions adverse to the Borrower (in the
Borrower's reasonable judgment) in respect of any such renewal, shall be deemed
to constitute failure to extend the Final Disbursement Date beyond the original
or extended Final Disbursement Date, as the case may be. If the Banks agree to
extend the then current Final Disbursement Date, the Final Disbursement Date
shall, effective from the date of the Agent's notice to the Borrower, be such
extended date and the then effective Maturity Date shall simultaneously be
extended for such an additional year or years as the case may be.
(d) From time to time, to the extent that the Borrower's Working Capital
Requirement shall exceed the aggregate Commitment of the Banks hereunder, the
Borrower may request an increase in the amount of the aggregate Commitment to an
amount equal to such Working Capital Requirement by submitting to the Agent a
Commitment Increase Supplement in substantially the form of Exhibit E (a
"COMMITMENT INCREASE SUPPLEMENT"). The Banks may, in their sole discretion, by
unanimous consent, so increase the aggregate Commitment and the Agent shall
notify the Borrower of such acceptance by delivery of such Commitment Increase
Supplement, accepted by the Agent, on behalf of the Banks. Failure of the Agent
to deliver an accepted Commitment Increase Supplement to the Borrower not later
than 60 days after the Borrower's submission thereof, or imposition of
additional terms and conditions adverse to the Borrower (in the Borrower's
reasonable judgment) in respect of such increase, shall be deemed
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to constitute rejection of the Borrower's request to increase the aggregate
Commitment of the Banks.
(e) The Borrower shall have the right, from time to time upon at least five
Business Days' notice to the Agent, to terminate in whole or reduce ratably in
part the unused portions of the respective Commitments of the Banks.
(f) The proceeds of the Loans may be used only for Operating and
Maintenance Costs, or in the case of Loans made prior to the earlier of the
Commercial Operation Date or the Guaranteed Provisional Acceptance Date, for the
cost of gas for testing of and chemicals for the Project.
(g) In no event shall the Borrower be permitted to borrow hereunder if such
borrowing would cause the Borrower to have Loans outstanding during any Annual
Clean-Up Period. Prior to the commencement of each Annual Clean-Up Period, the
Borrower shall pay or prepay any and all Loans that are then outstanding,
together with accrued interest to the date of such payment or prepayment, such
that no Loans are outstanding on the first day of such Annual Clean-Up Period.
SECTION 2.2 MAKING LOANS.
(a) Each Borrowing shall be made on notice, given by the Borrower to the
Agent not later than 11:00 a.m. (New York City time), at least three Business
Days before the date of the proposed Borrowing, PROVIDED, HOWEVER, if such
Borrowing will bear interest at the Eurodollar Rate, such notice shall be given
not later than 11:00 a.m. (New York City time) at least five Business Days
before the date of the proposed Borrowing, and the Agent shall give each Bank
prompt notice thereof by telecopier. Each such notice of a Borrowing shall be in
the form of Exhibit B (a "NOTICE OF BORROWING"), or by telephone confirmed
promptly in a Notice of Borrowing, by an Authorized Officer of the Borrower,
specifying (i) the requested date of such Borrowing (which shall be a Business
Day), (ii) the requested aggregate amount of such Borrowing which shall be not
less than $1,000,000 and in integral multiples of $100,000, (iii) whether such
Borrowing will bear interest at the Eurodollar Rate or the Adjusted Base Rate,
(iv) if such Borrowing is to bear interest at the Eurodollar Rate, the
applicable Interest Period, and (iv) the fact that the statements set forth in
Section 3.2(b) are true as of the date of such Notice of Borrowing. Each Bank
shall, before 11:00 a.m. (New York City time), on the date of such Borrowing,
make available to the Agent at its address set forth in Section 8.2, in
immediately available funds, such Bank's ratable portion of such Borrowing.
After the Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article 3, the Agent will make such funds available to
the Borrower by transferring such funds to the Construction Account or the
Revenue Account, in each case established and held by the Collateral Agent
pursuant to the terms of the Collateral Agency Agreement.
(b) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower.
(c) Unless the Agent receives notice from a Bank before the date of any
Borrowing that such Bank will not make available to the Agent such Bank's
ratable portion of such
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Borrowing, the Agent may assume that such Bank has made such portion available
to the Agent on the date of such Borrowing in accordance with Section 2.2(a),
and the Agent may, in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and to the extent that such
Bank has not made such ratable portion available to the Agent, and Agent has
made such amount available to the Borrower, the Agent shall first make written
demand upon such Bank for payment and shall be entitled to recover such
corresponding amount on demand from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent shall
promptly notify the Borrower and the Borrower shall immediately repay such
corresponding amount to the Agent; PROVIDED, that if the Borrower repays such
corresponding amount to the Agent and such Bank subsequently makes available to
the Agent its ratable portion of such borrowing, the Agent shall promptly make
the proceeds thereof available to the Borrower. The Agent shall also be entitled
to recover from such Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent at the following interest rates:
(i) with respect to interest from the Borrower, at the applicable interest rate
selected by the Borrower with respect to such amount and (ii) with respect to
interest from such Bank, at the Federal Funds Rate.
(d) The failure of any Bank to make the Loan to be made by it as part of
any Borrowing shall not relieve any other Bank of its obligation, if any,
hereunder to make its Loan on the date of such Borrowing, but no Bank shall be
responsible for the failure of any other Bank to make the Loan to be made by
such other Bank on the date of any Borrowing.
SECTION 2.3 INTEREST.
(a) The Borrower shall pay interest on the unpaid principal amount of each
Loan from the date such Loan is advanced until such principal amount has been
repaid in full as follows:
(i) BASE RATE LOANS. As to Base Rate Loans, at a rate PER ANNUM equal
to the sum of the Adjusted Base Rate plus the Applicable Margin, payable
monthly in arrears on the first Business Day of each month;
(ii) EURODOLLAR RATE LOANS. As to Eurodollar Rate Loans, at a rate PER
ANNUM equal to the sum of the Eurodollar Rate plus the Applicable Margin,
payable on the last day of the applicable Interest Period or, if such
Interest Period exceeds three months, at intervals of three months from the
first day of such Interest Period; and
(iii) POST-DEFAULT RATE. During an Event of Default (and whether
before or after judgment), each Loan (whether or not due) and, to the
maximum extent permitted by Applicable Law, each other amount due and
payable under the Credit Documents shall bear interest at a rate per annum
equal to the applicable Post-Default Rate.
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(b) METHOD OF ELECTING INTEREST RATES. (i) Each Loan shall constitute a
Base Rate Loan unless the Borrower elects otherwise pursuant to the following
provisions of this Section 2.3(b).
(ii) Each Loan shall constitute a Base Rate Loan or a Eurodollar Rate
Loan as the Borrower may elect in accordance with this Section 2.3(b). If
no such election is timely made with respect to a Loan, such Loan shall
initially constitute a Base Rate Loan in accordance with Section 2.3(b)(i).
Thereafter, the Borrower may from time to time elect to change or continue
the interest rate borne by each Loan, subject to the conditions set forth
below, as follows:
(A) if such Loans are Base Rate Loans, the Borrower may
elect to convert all or any portion of such Loans to Eurodollar
Rate Loans as of any Business Day; and
(B) if such Loans are Eurodollar Rate Loans, the Borrower
may elect to convert all or any portion of such Loans to Base
Rate Loans or elect to continue such Loans as Eurodollar Rate
Loans for an additional Interest Period, in each case effective
on the last day of the then current Interest Period applicable to
such Loans.
Each such election shall be made by delivering a notice (a "NOTICE OF
INTEREST RATE ELECTION") to the Agent (x) in the case of a conversion to or
continuation of a Eurodollar Rate Loan, not later than 12:00 noon (New York
City time) on the third Business Day prior to the day on which such
conversion or continuation is to be effective or (B) in the case of a
conversion to a Base Rate Loan, at any time prior to the day on which such
conversion is to be effective. Each Notice of Interest Rate Election shall
be in writing (including facsimile transmission) or by voice, promptly
confirmed in writing. A Notice of Interest Rate Election may, if it so
specifies, apply to only a portion of the aggregate principal amount of the
relevant Loan.
(iii) Each Notice of Interest Rate Election shall specify:
(A) the Loan (or portion thereof) to which such notice applies;
(B) the date on which the conversion or continuation selected in
such notice is to be effective, which shall comply with the applicable
clause of subsection (ii) above;
(C) if Loans are to be converted, the new type of Loans and, if
such new Loans are Eurodollar Rate Loans, the duration of the initial
Interest Period applicable thereto; and
(D) if such Loans are to be continued as Eurodollar Rate Loans
for additional Interest Periods, the duration of such Interest
Periods.
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Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.
No conversion into or continuation of a Eurodollar Rate Loan shall be
permitted when a Default or an Event of Default has occurred and is
continuing, and if a Default or an Event of Default has occurred and
is continuing, each Eurodollar Rate Loan shall automatically be
converted into a Base Rate Loan on the last day of the Interest Period
applicable thereto.
(iv) A Notice of Interest Rate Election shall not be revocable by
the Borrower. If the Borrower fails to deliver a timely Notice of
Interest Rate Election to the Agent for any Eurodollar Rate Loans,
such Loans shall be converted into Base Rate Loans on the last day of
the then current Interest Period applicable thereto.
(v) Anything to the contrary in this Agreement notwithstanding,
at no time shall there be outstanding more than two different Interest
Periods applicable to the Loans.
(c) FUNDING LOSSES. If the Borrower makes any payment of principal
with respect to any Eurodollar Rate Loan or any Eurodollar Rate Loan is
converted to a Base Rate Loan on any day other than the last day of an
Interest Period applicable thereto, or if the Borrower fails to borrow,
repay or prepay any Eurodollar Rate Loan after notice has been given to the
Agent in accordance with the terms hereof, the Borrower shall reimburse the
Agent, for the ratable account of the Banks, within 30 days after demand
for any resulting loss or expense incurred by them, including any loss
incurred in obtaining, liquidating or employing deposits from third
parties. Without prejudice to the foregoing, the Borrower shall indemnify
the Agent and the Banks against any direct (as opposed to consequential)
loss or expense that the Agent or the Banks may sustain or incur as a
consequence of a failure by the Borrower in payment of principal of, or
interest on, any Eurodollar Rate Loan, or any part thereof, including any
interest, premium or penalty paid by the Agent or any Bank to lenders of
funds borrowed by it or deposited with it for the purpose of making or
maintaining such Eurodollar Rate Loan. A certificate as to the amount of
any such loss or expense in reasonable detail (specifying the basis of such
loss or expense) shall be promptly submitted by the Agent, or by any Bank
through the Agent, to the Borrower and shall be conclusive and binding as
to the amount thereof, absent manifest error.
(d) BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR. If on or
prior to the first day of any Interest Period for any Eurodollar Rate Loan:
(i) the Agent or any Bank determines, in its reasonable judgment,
that deposits in Dollars (in the applicable amounts) are not being
offered to the Agent or such Bank in the relevant market for such
Interest Period, or
(ii) the Agent or such Bank, in its reasonable judgment, shall
determine that the Eurodollar Rate will not adequately and fairly
reflect the cost to the Agent or such Bank of funding its Eurodollar
Rate Loans for such Interest Period, the Agent, or such Bank through
the Agent, shall forthwith give notice thereof (which notice shall
describe in reasonable detail the basis for such determination) to the
Borrower, whereupon until the Agent, or such Bank through the Agent,
notifies the Borrower that the circumstances
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giving rise to such suspension no longer exist, (i) the obligations of
the Agent or such Bank to make or continue Eurodollar Rate Loans or to
convert outstanding Loans into Eurodollar Rate Loans shall be
suspended and (ii) each outstanding Eurodollar Rate Loan shall be
converted into a Base Rate Loan on the last day of the then current
Interest Period applicable thereto.
(e) MAXIMUM RATE. This Agreement is hereby expressly limited so that
in no contingency or event, whether by reason of acceleration of the
maturity of any indebtedness hereunder or otherwise, shall the interest
contracted for or charged or received by the Banks exceed the maximum
amount permissible under Applicable Law. If, from any circumstance
whatsoever, interest would otherwise be payable to the Banks in excess of
the maximum lawful amount, the interest payable to the Banks shall be
reduced to the maximum amount permitted under applicable law, and the
amount of interest for any subsequent period, to the extent less than that
permitted by applicable law, shall to that extent be increased by the
amount of such reduction.
SECTION 2.4 REPAYMENT.
The Borrower shall repay the principal amount of such Loan on the date
180 days after such Loan is advanced pursuant to Section 2.2(a); provided
that, the Borrower shall repay on or prior to the Commercial Operation
Date, the principal amount, together with accrued interest to the date of
such repayment on the principal amount, of each Loan made on or prior to
the Commercial Operation Date to the extent funds are available to pay such
amounts in accordance with Section 3.9 of the Collateral Agency Agreement.
SECTION 2.5 PREPAYMENTS.
(a) The Borrower may, at any time and from time to time on any
Business Day, upon prior written notice in the form of Exhibit D to the
Agent not later than 11:00 a.m. (New York City time), at least one Business
Day before the day of any prepayment of the Loans, such notice stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay without premium or penalty,
except as provided in Section 2.3(c), the outstanding principal amounts of
the Loans making up one or more Borrowings in whole or ratably in part,
together with accrued interest to the date of such prepayment on the
principal amount prepaid.
(b) All prepayments made hereunder shall be applied by the Agent and
the Banks against the principal amount of outstanding Loans in inverse
order of maturity, PROVIDED that such prepayments shall, to the extent not
otherwise inconsistent with this subsection, first be applied to the
prepayment of outstanding Base Rate Loans to the extent thereof and then to
the prepayment of outstanding Eurodollar Rate Loans.
SECTION 2.6 FEES.
The Borrower shall pay the Agent for the respective accounts of the
Banks, a commitment fee equal to .375% PER ANNUM of the difference between
the Commitment and the
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average daily principal amount of Loans outstanding payable quarterly in
arrears on each Quarterly Date occurring after the Closing Date.
SECTION 2.7 SECURITY.
The Obligations shall be secured by the Security Documents, the rights
and remedies in respect of which shall be exercised pursuant to the
Collateral Agency Agreement.
SECTION 2.8 PAYMENTS.
(a) The Borrower shall make each payment hereunder and under the Note
not later than 11:00 a.m. (New York City time), on the day when due to the
Agent at its address set forth in Section 8.2, in immediately available
funds. The Agent will promptly thereafter cause to be distributed like
funds relating to the payment of principal, interest or fees ratably (other
than amounts payable pursuant to Section 8.4) to the Banks and like funds
relating to the payment of any other amount payable to any Bank to such
Bank, in each case to be applied in accordance with the terms of this
Agreement. The Agent may withhold from any interest payment to any Bank an
amount equal to any applicable withholding tax (including upon the failure
of any Bank to provide the forms or other documentation required under
Section 2.15(e)).
(b) Unless the Agent receives notice from the Borrower before the date
on which any payment is due to the Banks hereunder that the Borrower will
not make such payment in full, the Agent may assume that the Borrower has
made such payment in full to the Agent on such date, and the Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such
due date an amount equal to the amount then due to such Bank. If and to the
extent that the Borrower has not so made such payment in full to the Agent
on the date on which such payment is due, each Bank agrees, irrevocably and
without qualification or exception, to repay to the Agent forthwith on
demand such amount distributed to such Bank together with interest thereon,
for each day from the date such amount is distributed to such Bank until
the date on which such Bank repays such amount to the Agent, at the Federal
Funds Rate.
SECTION 2.9 COMPUTATION OF INTEREST AND FEES.
All computations of interest and fees hereunder shall be made on the
basis of a year of 360 days 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 calculation and each determination
by the Agent of an interest rate hereunder shall be conclusive and binding
for all purposes, absent manifest error.
SECTION 2.10 PAYMENTS ON NON-BUSINESS DAYS.
Whenever any payment or required deposit hereunder or under the Note
is 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. If no due date is specified for the payment of
any
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amount payable by Borrower hereunder, such amount shall be due and payable
not later than 10 Business Days after receipt by Borrower of written demand
from the Agent for payment thereof.
SECTION 2.11 SHARING OF PAYMENTS, ETC.
(a) Each Bank agrees that if, as a result of the exercise of a right
of setoff, banker's lien or counterclaim or other similar right or the
receipt of a secured claim, it receives any payment in respect of the Loans
or other Obligations hereunder, it shall promptly notify the Agent thereof
(and the Agent shall promptly notify the other Banks). If, as a result of
such payment, such Bank receives a greater percentage of the Obligations
owed to it under this Agreement than the percentage received by any other
Bank, such Bank shall purchase a participation (which it shall be deemed to
have purchased simultaneously upon the receipt of such payment) in the
Obligations then held by such other Banks so that all such recoveries of
principal and interest with respect to all Obligations owed to each Bank
shall be pro rata on the basis of its respective amount of such Obligations
owed to all Banks; PROVIDED that if all or part of such proportionately
greater payment received by such purchasing Bank is thereafter recovered by
or on behalf of the Borrower from such Bank, such purchase shall be
rescinded and the purchase price paid for such participation shall be
returned to such Bank to the extent of such recovery, but without interest.
(b) Each Bank which receives a secured claim as described in
subsection (a) above shall, to the extent practicable, exercise its rights
in respect of such secured claim in accordance with such subsection (a) and
otherwise in a manner consistent with the rights of the Banks entitled
under this Section 2.11 to share in the benefits of any recovery on such
secured claim.
(c) The Borrower expressly consents to the foregoing arrangements and
agrees that any holder of a participation in any Obligation so purchased or
otherwise acquired of which the Borrower has received notice may exercise
any and all rights of banker's lien, set-off or counterclaim with respect
to any and all monies owing by the Borrower to such holder as fully as if
such holder were a holder of such Obligation in the amount of the
participation held by such holder.
SECTION 2.12 EVIDENCE OF DEBT.
(a) The indebtedness of the Borrower resulting from all Loans made by
the Banks from time to time shall be evidenced by an appropriate notation
on the schedule, or a continuation thereof, to the Working Capital
Promissory Note substantially in the form of Exhibit A (the "NOTE"),
delivered by the Borrower to the Agent, for the benefit of the Banks.
(b) The Borrower shall promptly take such actions as the Agent or any
Bank shall reasonably request to evidence any increase in the outstanding
principal amount of the Obligations hereunder resulting from an increase in
the aggregate Commitment pursuant to Section 2.1(d), including, without
limitation, execution and delivery of amended and restated or supplemental
Notes.
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(c) The books and accounts of the Agent shall be conclusive evidence,
absent manifest error, of the amounts of all Loans, fees, interest and
other amounts advanced, due, outstanding, payable or paid pursuant to this
Agreement or the Note.
SECTION 2.13 INCREASED COSTS AND REDUCED RETURNS.
(a) If, on or after the date hereof, the adoption of any applicable
law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Agent or any Bank with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(i) shall subject the Agent or such Bank to any tax, duty or
other charge (other than routine examination fees or Taxes) with
respect to the Eurodollar Rate Loans, the Notes or its obligation to
make Eurodollar Rate Loans, or shall change the basis of taxation of
payments to the Agent or any Bank of the principal of or interest on
its Eurodollar Rate Loans or any other amounts due under this
Agreement in respect of its Eurodollar Rate Loans or its obligation to
make Eurodollar Rate Loans (except for changes in the rate of tax on
the net income of the Agent or such Bank imposed by the federal, state
or local jurisdiction in which the Agent's or such Bank's principal
executive office is located); or
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including any such requirement imposed
by the Board of Governors of the Federal Reserve System, but excluding
with respect to any Eurodollar Rate Loan any such requirement provided
in Section 2.15(b) against assets of, deposits with or for the account
of, or credit extended by, the Agent or any Bank or shall impose on
the Agent or any Bank or on the London interbank market any other
condition affecting the Eurodollar Rate Loans, the Note or its
obligation to make Eurodollar Rate Loans;
and the result of any of the foregoing is to increase the cost to the Agent
or such Bank of making or maintaining any Eurodollar Rate Loan, or to
reduce the amount of any sum received or receivable by the Agent or such
Bank under this Agreement or under the Note with respect thereto by an
amount deemed by the Agent or such Bank to be material, then, the Agent, or
such Bank through the Agent, shall deliver to the Borrower as promptly as
practicable a certificate setting forth in reasonable detail additional
amounts that the Agent or such Bank, as the case may be, determines will
fully compensate it for such reduction, increased cost or payment and the
basis for the determination of such amount, PROVIDED, that the Borrower
shall not be obligated to compensate the Agent or any Bank for the amount
of such increased cost incurred with respect to a period of time prior to
the date which is 90 days before the date on which the Agent first notifies
the Borrower of a claim for such compensation or that an event had occurred
which will entitle the Agent or a Bank to such compensation. Any such
amount claimed by the Agent or any Bank shall, in the case of clause (i)
above, be net of applicable tax savings, if any, directly attributable
thereto. Within 30 days after demand by the Agent, the Borrower shall pay
to the
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Agent, for its account or for the account of the applicable Bank, as the
case may be, such additional amount shown as due on any such certificate,
absent manifest error.
(b) In the event that the Agent or any Bank shall determine (which
determination shall, absent manifest error, be final and conclusive and
binding on all the parties hereto) at any time that the Agent or such Bank
is required to maintain reserves in respect of Eurocurrency Liabilities
during any period during which any Loan made by it bears interest based on
the Eurodollar Rate (each such period, for the Agent or such Bank, a
"EUROCURRENCY RESERVE PERIOD"), but only in respect of any period during
which any reserve shall actually be maintained by the Agent or such Bank
for any Eurodollar Rate Loan as a result of a reserve requirement
applicable to it under Regulation D in connection with Eurocurrency
Liabilities, then the Agent, or such Bank through the Agent, shall promptly
give notice to the Borrower of such determination, and the Borrower shall
directly pay to the Agent, for its account or for the account of the
applicable Bank, as the case may be, additional interest on the unpaid
principal amount of such Loan during such Eurocurrency Reserve Period at a
rate PER ANNUM which shall, during each monthly period applicable to such
Loan, be the amount by which (x) the Eurodollar Rate for such monthly
period divided (and rounded upward to the next whole multiple of 1/100 of
1%) by a percentage equal to 100% minus the then stated maximum rate of all
reserve requirements (including any marginal, emergency, supplemental,
special or other reserves) applicable to the Agent or such Bank in respect
of Eurocurrency Liabilities exceeds (y) the Eurodollar Rate for such
monthly period. The Agent, or such Bank through the Agent, shall furnish
along with such notice a certificate setting forth in reasonable detail the
cost actually incurred to maintain such reserves and the basis for the
determination of such amount, PROVIDED that the Borrower shall not be
obligated to compensate the Agent or any Bank for the amount of such
increased cost incurred with respect to a period of time prior to the date
which is 90 days before the date on which the Agent first notifies the
Borrower of a claim for such compensation or that an event has occurred
which will entitle the Agent or a Bank to such compensation. Additional
interest payable pursuant to the immediately preceding sentence shall be
paid by the Borrower at the time that it is otherwise required to pay
interest in respect of such Loan or, if later demanded by the Agent or any
Bank, promptly on demand. Each of the Agent and the Banks agrees that, if
notice is given to the Borrower of the existence of a Eurocurrency Reserve
Period, the Agent, or the applicable Bank through the Agent, shall promptly
notify the Borrower of any termination thereof, at which time the Borrower
shall cease to be obligated to pay additional interest to the Agent or such
Bank pursuant to the first sentence of this paragraph until such time, if
any, as a subsequent Eurocurrency Reserve Period shall occur.
(c) The Agent, and each Bank through the Agent, will promptly notify
the Borrower of any event of which it has knowledge, occurring after the
date hereof, which will entitle the Agent or such Bank to compensation
pursuant to this Section and will designate a different lending office if
such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole judgment of the Agent or such Bank,
be otherwise disadvantageous to the Agent or such Bank.
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SECTION 2.14 CAPITAL ADEQUACY.
If the Agent or any Bank shall determine that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of
return on capital of the Agent or such Bank or its holding company as a
consequence of the Agent's or such Bank's obligations hereunder to a level
below that which the Agent or such Bank could have achieved but for such
adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by the Agent
or such Bank to be material, then the Agent, or such Bank through the
Agent, shall deliver to the Borrower as promptly as practicable (but in no
event later than 120 days after the Agent or such Bank has actual knowledge
of such claim for capital adequacy) a certificate setting forth in
reasonable detail the amount being charged by the Agent or such Bank and
the basis for the determination of such amount. Within 30 days after the
delivery of such certificates by the Agent, the Borrower shall pay to the
Agent, for its account or for the account of the applicable Bank, as the
case may be, the amount shown as due on any such certificate.
SECTION 2.15 TAXES.
(a) Payments by the Borrower to the Agent and the Banks under this
Agreement and the Note will be made free and clear of and without deduction
for Taxes, other than Taxes based on the net income of the Agent or any
Bank (including franchise taxes imposed in lieu of net income taxes)
imposed by (x) the United States federal government, (y) the jurisdiction
where the Agent or such Bank is organized or has its principal office or
(z) the jurisdiction of the branch of such Bank maintaining any Loan or the
branch of the Agent through which it renders its services as the Agent
("EXCLUDED TAXES"). If the Borrower is required by law to deduct Taxes
(other than Excluded Taxes) from such a payment, then the sum payable under
the instrument to which the payment relates will be increased so that such
deduction does not result in a diminution in the amount the Agent or any
Bank actually receives.
(b) To the extent permitted by law, without duplication of amounts
paid by the Borrower under Section 2.15(a), the Borrower hereby indemnifies
and holds harmless the Agent and each Bank from and against, and agrees to
reimburse the Agent and each Bank on an after-tax basis (computed taking
into account any deductions or other benefits available for federal income
tax purposes for the Agent or such Bank if it is a United States taxpayer
and any deductions and benefits available for income tax purposes in any
jurisdiction in which the Agent or such Bank is a taxpayer) on demand for,
any and all Taxes paid or incurred by the Agent or such Bank in connection
with the transactions contemplated by this Agreement; PROVIDED, HOWEVER,
that the foregoing indemnity does not cover Excluded Taxes. Reimbursement
on an "after-tax basis" means on a basis such that the Agent or such Bank
is made whole after taking into account income taxes that the Agent or such
Bank will owe on the indemnity or reimbursement payment in any jurisdiction
and any related tax benefits, assuming the Agent or
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such Bank is subject to income taxes at the highest marginal rates. Nothing
in this paragraph shall interfere with the right of the Agent or any Bank
to arrange its tax affairs in whatever manner it thinks fit and, in
particular, the Agent and the Banks are under no obligation to claim a
deduction or other benefit relating to these transactions ahead of any
other claim, relief, credit, deduction or other benefit to which it is
entitled. The Agent, or applicable Bank through the Agent, shall promptly
give written notice to the Borrower (but in no event later than 60 days)
after the Agent or such Bank has actual knowledge of the imposition of any
Taxes subject to indemnification hereunder; PROVIDED, HOWEVER, that failure
to give such notice within such 60 day period will not relieve the Borrower
of the obligation to indemnify the Agent or such Bank in accordance with
the terms hereof, except to the extent of interest that would have been
avoided had the notice been given prior to the end of such 60 day period.
(c) All payments made by the Borrower to each of the Banks and the
Agent under this Agreement and the Note will be made without setoff,
counterclaim or other defense.
(d) The Borrower will provide evidence that all Taxes imposed on
payments under this Agreement, any Loan or the Note, have been fully paid
to the appropriate authorities by delivering official receipts or notarized
copies to the Agent within 30 days after payment. The Borrower will
compensate the Agent or any Bank that has to pay any Taxes because the
Borrower failed to timely furnish such evidence; PROVIDED, that prior to
paying such Taxes, the Agent, or such Bank through the Agent, shall have
notified the Borrower of its intent to make such payment.
(i) If the Borrower so requests promptly in writing after receipt
of any notice under Section 2.15 hereof, the Agent or applicable Bank
will contest in good faith the Taxes at the Borrower's expense, keep
the Borrower fully informed about the progress of the contest, consult
in good faith with the Borrower's counsel regarding conduct of the
contest, and not compromise or otherwise settle the contest without
the Borrower's consent (which shall not be unreasonably withheld or
delayed); PROVIDED that the Agent or such Bank may in its sole
discretion select the forum for the contest and determine whether the
contest will be by resisting payment of the Taxes or by paying the
Taxes and seeking a refund; PROVIDED FURTHER that the Agent or such
Bank will be under no obligation to contest unless (A) if the Agent or
such Bank requests, the Borrower has provided the Agent or such Bank
an opinion of independent tax counsel selected by the Borrower and
reasonably acceptable to the Agent or such Bank to the effect that
there is a reasonable basis for the contest, (B) the amount in
controversy is at least $75,000, (C) the Agent or such Bank has
received satisfactory indemnification and security for any liability,
loss, cost or expense arising out of the contest (including, but not
limited to, all reasonable legal and accounting fees and expenses,
penalties, interest and additions to tax), (D) if requested by the
Agent or such Bank, the Borrower has admitted in writing its duty to
indemnify the Agent or such Bank for the Taxes if the contest is lost
(but such admission shall not preclude the Borrower from raising a
defense to liability if a court of competent jurisdiction has rendered
a decision articulating the cause of such Taxes, and the cause is not
one for which the Borrower is responsible under this Section 2.15),
and
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(E) if the contest is conducted in a manner that requires paying all
or part of the Taxes, the Borrower has paid the amount required.
(ii) If the Borrower so requests within 10 days of notice to the
Borrower of the imposition of any Taxes on payments to any of the
Banks of a type not generally imposed on United States or foreign
lenders making loans of the types contemplated hereunder, such Banks
shall (consistent with legal and regulatory restrictions) comply with
Section 2.17 hereof.
(e) At such times as may be required by Applicable Law or as the Agent
or the Borrower may reasonably request, each Bank agrees that it will
deliver to the Agent and the Borrower duly completed forms of any
applicable jurisdiction or other documentation reasonably satisfactory to
the Agent and the Borrower that such Bank is entitled to receive payments
under this Agreement without deduction or withholding of income tax under
the Applicable Law of such jurisdiction. Each Bank further agrees to notify
the Agent and the Borrower of the occurrence of any event (including any
change in treaty, law or regulation) that would render such Bank unable to
receive payments hereunder without such deduction or withholding. The
provisions of this Section 2.15(e) shall apply to any successor holder of a
Note.
SECTION 2.16 ILLEGALITY.
If, on or after the date of this Agreement, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Agent or any Bank with any
request or directive (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency shall make it
unlawful or impossible for the Agent or such Bank to make, maintain or fund
its Eurodollar Rate Loans, the Agent, or such Bank through the Agent, shall
so notify the Borrower, whereupon until the Agent, or such Bank through the
Agent, notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligation of the Agent or such Bank to
make or continue Eurodollar Rate Loans, or to convert outstanding Loans
into Eurodollar Rate Loans, shall be suspended. Before giving any notice to
the Borrower pursuant to this Section 2.16, the Agent or applicable Bank
shall designate a different lending office for the Eurodollar Rate Loans if
such designation will avoid the need for giving such notice and will not,
in the sole judgment of the Agent or such Bank, be otherwise
disadvantageous to the Agent or such Bank. If such notice is given, each
Eurodollar Rate Loan of the Agent or such Bank then outstanding shall
either (i) be converted to a Base Rate Loan on the last day of the then
current Interest Period applicable to such Eurodollar Rate Loan if the
Agent or such Bank may lawfully continue to maintain and fund such Loan to
such day, or (ii) be immediately converted to a Base Rate Loan if the Agent
or such Bank shall determine that it may not lawfully continue to maintain
and fund such Loan to such day, PROVIDED that the Borrower shall not be
obligated to make any payment pursuant to Section 2.3(c) as a result of
such conversion. If the Borrower so requests within 10 days of receipt of
the notice referred to above, the applicable Bank shall (consistent with
legal and regulatory restrictions) comply with Section 2.17 hereof.
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SECTION 2.17 ASSIGNMENTS BY BANKS.
(a) If at least sixty (60) days prior to one year prior to the
original Final Disbursement Date or any extension thereof, the Agent shall
have requested the consent of each of the other Banks to the extension of
such Final Disbursement Date, and if the Agent shall not within twenty-five
(25) days of issuing such request, have received the written consent of any
Bank to the extension proposed by the Agent, the Agent shall have the right
to require such Bank to transfer all of its proportionate share of the
Loans in accordance with Section 2.17(b). Prior to the Notice Date, each
Bank shall give the Agent written Notice of such Bank's election to extend
or not to extend the original or extended Final Disbursement Date for an
additional one or more years as specified by the Agent.
(b) If (a) a Bank is required to comply with this Section 2.17 after a
request from the Borrower pursuant to Sections 2.15 or 2.16 or (b) the
Borrower requests that the provisions of this Section 2.17 apply to a Bank
within 10 days after the Borrower receives a notice from the Agent that (i)
such Bank has failed to make available to the Agent its portion of any Loan
on the date required to be made available to the Agent pursuant to this
Agreement after the Agent has made written demand upon such Bank for such
payment, (ii) such Bank has provided the Agent with notice that such Bank
shall not make available to the Agent such portion of any Loan required to
be made available to the Agent pursuant to this Agreement or (iii) such
Bank has failed to reimburse the Agent pursuant to the terms of this
Agreement, then such Bank shall assign all or a part of its proportionate
share of the Loans and its Commitment to a replacement bank (which may be,
but is not required to be, a Bank designated by the Borrower) (a
"REPLACEMENT BANK"); PROVIDED that any assignment or transfer made by a
Bank to a Replacement Bank shall satisfy the following conditions: (A) the
Borrower shall promptly pay when due all reasonable fees and expenses which
such Bank incurs in connection with such transfer or assignment and (B) any
assignment of all or part of the Loans or other Obligations shall be made
without recourse, representation or warranty, and the Borrower shall cause
the Replacement Bank to pay to the Agent for the account of the assigning
Bank in immediately available funds all amounts outstanding or payable
under this Agreement to each Bank assigning its interest in the Loans or
other Obligations hereunder.
SECTION 2.18 REFINANCING OPTION.
The Borrower shall have the right to refinance the Commitment and any
outstanding Loans without premium or penalty, except as provided in Section
2.3(c), upon at least 10 Business Days' prior written notice to the Agent.
SECTION 2.19 RIGHT OF SET-OFF.
The Borrower hereby authorizes each Bank (in addition to, and without
limitation of, any right of set-off, banker's lien or counterclaim a Bank
may otherwise have), upon the occurrence and during the continuance of any
Event of Default, at any time and from time to time, without notice to the
Borrower or any Person other than the Collateral Agent (any such notice
being hereby expressly waived by the Borrower to the extent it may legally
do so) to set off and appropriate and apply any and all deposits (general
or special, time or demand, provisional or
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final) at any time held, and other indebtedness at any time owing, by
such Bank in any of its offices, wherever located (whether such deposits or
indebtedness be in Dollars or in any other currency), to or for the credit
or the account of the Borrower against any and all of the Obligations and
liabilities of the Borrower now or hereafter existing under this Agreement
irrespective of whether or not such Bank shall have made any demand
hereunder or thereunder and although such Obligations may be contingent or
unmatured.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.1 CONDITIONS PRECEDENT TO EFFECTIVENESS.
The effectiveness of this Agreement is subject to satisfaction or
waiver of the following conditions precedent:
(a) issuance of the Bonds and submission to the Agent of duplicate
originals or certified copies of all of the documents submitted in
connection with the issuance of the Bonds on the Closing Date, which shall
be in form and substance satisfactory to the Agent;
(b) receipt by the Initial Bank of the following, in each case in the
form approved by the Agent on the Closing Date:
(i) this Agreement and the Note duly executed by the Borrower;
(ii) an original of each of the Security Documents, duly executed
by the parties thereto;
(iii) a copy of each other Financing Document, duly executed by
the parties thereto and certified by the Borrower as to completeness
and authenticity;
(iv) written opinions of counsel acceptable to the Agent,
addressed to the Agent and the Banks, and in form and substance
satisfactory to the Agent and covering such matters as the Agent may
reasonably request;
(v) evidence satisfactory to the Agent that each of the parties
to the Project Contracts, Financing Documents and Security Documents
shall have duly and irrevocably appointed a process agent to act for
and on behalf of such person, to receive summonses and other legal
process in connection with any suit, action or proceeding relating to
such documents in the jurisdictions in which it is required to submit
to such jurisdiction and such appointment shall have been accepted and
all fees scheduled to accrue to each such agent for the service of
process shall have been paid in full; and
(vi) evidence satisfactory to the Agent that all actions
necessary or appropriate in order to effectively establish, create or
perfect the Security Interest have been duly taken; and
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(c) payment by the Borrower of all accrued fees and expenses (as
provided in Sections 2.6 and 8.4) of the Agent and the Banks (including the
reasonable accrued fees and disbursements of counsel to the Agent and the
Banks), to the extent that one or more statements for such fees and
expenses have been presented for payment.
SECTION 3.2 CONDITIONS PRECEDENT TO EACH BORROWING.
The obligation of each Bank to make a Loan on the occasion of each
Borrowing is subject to the limitations of such Bank's Commitment and to
the satisfaction or waiver of the following further conditions precedent:
(a) the Agent shall have received a Notice of Borrowing properly
completed in all material respects with respect to such Loan;
(b) the following statements shall be true (and the acceptance by the
Borrower of the proceeds of such Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such
Borrowing such statements are true):
(i) the representations and warranties of the Borrower
incorporated by reference into this Agreement are true in all material
respects on and as of the date of such Borrowing, before and after
giving effect to such Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, except as affected
by the consummation of the transactions contemplated by this Agreement
and except to the extent that any such failure to be true would not
reasonably be expected to have a Material Adverse Effect; and
(ii) no Default or Event of Default has occurred and is
continuing;
(c) no event shall have occurred and be continuing which could
reasonably be expected to have a Material Adverse Effect;
(d) in the case of a Borrowing prior to the earlier of the Commercial
Operation Date or the Guaranteed Provisional Acceptance Date, the amount
being advanced on the occurrence of such Borrowing together with all
amounts previously advanced shall not exceed $1,000,000;
(e) the requested borrowing shall not result in a failure by the
Borrower to comply with the provisions of Section 2.1(g) of this Agreement;
and
(f) the Bonds are rated "BBB-" or higher by S&P and "Baa3" or higher
by Moody's.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF BORROWER.
The Borrower hereby makes for the benefit of the Agent and the Banks
all of the representations and warranties of the Borrower contained in
Article III of the Indenture (which representations and warranties are
incorporated by reference herein as if fully set forth herein).
SECTION 4.2 REPRESENTATIONS AND WARRANTIES OF INITIAL BANK.
Initial Bank hereby represents and warrants to the Borrower and the
Agent as follows:
(a) Initial Bank is duly formed, validly existing and in good standing
under the laws of its jurisdiction of organization.
(b) Initial Bank has all necessary power and authority to execute and
deliver, and to perform its obligations under, this Agreement.
(c) All action on the part of Initial Bank that is required for the
authorization, execution and delivery of, and performance by Initial Bank
of its obligations under, this Agreement has been duly and effectively
taken.
(d) This Agreement has been duly executed and delivered by Initial
Bank.
(e) This Agreement constitutes a legal, valid and binding obligation
of Initial Bank, enforceable against it in accordance with the terms
thereof, except as such enforceability (A) may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights and remedies generally and
(B) is subject to general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
ARTICLE V
COVENANTS
SECTION 5.1 COVENANTS.
So long as any Commitment is in effect or any Obligation remains
unpaid, the Borrower shall observe and perform all of the covenants of the
Borrower contained in Article VI of the Indenture (which covenants are
incorporated herein by reference as if fully set forth herein).
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ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
Each of the following shall constitute an "Event of Default" under
this Agreement so long as the same shall be continuing:
(a) the Borrower shall fail to pay any amount due under this Agreement
(including under any Note) within 15 days after the due date thereof;
(b) an "Event of Default" under the Indenture shall have occurred and
be continuing;
(c) an "Event of Default" under the DSR LOC Reimbursement Agreement
shall have occurred and be continuing; or
(d) an "Event of Default" under the PPA LOC Reimbursement Agreement
shall have occurred and be continuing.
SECTION 6.2 REMEDIES.
Upon the occurrence and during the continuation of an Event of
Default, the Agent shall at the request, or may with the consent, of the
Required Banks, take one or more of the following actions, (i) by notice to
the Borrower, declare the obligation of each Bank to make Loans to be
terminated, whereupon the same shall forthwith terminate, or (ii) declare
the Obligations, all interest thereon and all other amounts payable under
this Agreement and the Note to be forthwith due and payable, whereupon the
Obligations, 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, or (iii) exercise such other rights and remedies as may be
available under the Financing Documents or Applicable Law; in each case,
PROVIDED that the Agent and the Banks shall not have the right to exercise
any other remedy hereunder or otherwise available to the Agent or any Bank
except in accordance with the provisions of the Collateral Agency
Agreement.
ARTICLE VII
THE AGENT
SECTION 7.1 AUTHORIZATION AND ACTION.
(a) Each Bank hereby appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof, together with
such powers as are reasonably incidental thereto. As to any matters not
expressly provided for by the Credit Documents (including enforcement of
and collection under any Credit Document or other Project Contract), the
Agent shall not be required
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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 Banks, and
such instructions shall be binding upon all Banks and the holders of the
Note; PROVIDED, HOWEVER, that the Agent shall not be required to take any
action that exposes the Agent to personal liability or that is contrary to
any Credit Document or other Project Contract or applicable law. In
performing its function and duties hereunder, Agent shall act solely as the
agent of the Banks and does not assume and shall not be deemed to have
assumed any obligation towards or relationship of agency or trust with or
for the Borrower or any other party to any Project Contract.
(b) Each Bank hereby authorizes the Agent in the name of and on behalf
of such Bank to sign such documents, take all such actions and perform such
obligations that the Agent deems necessary or appropriate to bind each of
the Banks under the Credit Documents and the Transaction Documents, and to
create, perfect or maintain the existence or perfected status of any
security interest, to be the named "Senior Party" under the Collateral
Agency Agreement, and the sole named payee, in respect of all of the
Financing Liabilities of the Borrower under or pursuant to this Agreement
and the Note, and all Collateral to the extent securing such Financing
Liabilities, and to take all such actions and perform such obligations that
the Agent deems necessary or appropriate in such capacity.
SECTION 7.2 AGENT'S RELIANCE, ETC.
Neither the Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it
or them under or in connection with any Credit Document or other Project
Contract, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Agent (a) may treat any Bank that has signed an Assignment and Acceptance
as the holder of the applicable portion of the Obligations; (b) may consult
with legal counsel (including counsel for the Borrower or any Affiliate),
independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts;
(c) makes no warranty or representation to any Bank and shall not be
responsible to any Bank for any statements, warranties or representations
made in or in connection with any Credit Document or other Project
Contract; (d) 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 Credit Document or other Project Contract on the part of the Borrower
or any Affiliate or to inspect the property (including the books and
records) of the Borrower or any Affiliate thereof; (e) shall not be
responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Credit Document or
other Project Contract or any other instrument or document furnished
pursuant hereto or thereto; and (f) shall incur no liability under or in
respect of any Credit Document or other Project Contract by acting upon any
notice, consent, certificate or other instrument or writing (which may be
by telecopier or otherwise) believed by it to be genuine and signed or sent
by the proper party or parties.
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SECTION 7.3 INITIAL BANK AND AFFILIATES.
With respect to its Commitment, the Loans made by it and the Note
issued to it, Initial Bank shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though it were not
the Agent; and the term "Bank" or "Banks" shall, unless otherwise expressly
indicated, include Initial Bank. Initial Bank and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, the Borrower, any Affiliate
thereof and any Person that may do business with or own securities of the
Borrower or any Affiliate thereof, all as if Initial Bank were not the
Agent and without any duty to account therefor to the Banks.
SECTION 7.4 BANK CREDIT DECISION.
Each Bank acknowledges that it has, independently and without reliance
on the Agent or any other Bank and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to
enter into this Agreement. Each Bank also acknowledges that it will,
independently and without reliance on the Agent or any other Bank and based
on such documents and information as it deems appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 7.5 INDEMNIFICATION.
The Banks agree to indemnify the Agent (to the extent not promptly
reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), on demand, ratably according to the respective
principal amounts of the Obligations then held by each of them and/or the
respective amounts of their Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements of any kind or nature whatsoever
that may at any time (including at any time following the payment of any
Obligations or termination of this Agreement) be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of any
Credit Document or other Project Contract or any action taken or omitted by
the Agent under any Credit Document or other Project Contract; PROVIDED,
HOWEVER, that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting solely from the Agent's
gross negligence or willful misconduct. Without limitation of the
foregoing, each Bank agrees to reimburse the Agent promptly upon demand for
its ratable share of any costs and expenses payable by the Borrower under
Section 8.4, to the extent that the Agent is not reimbursed for such costs
and expenses by the Borrower.
SECTION 7.6 SUCCESSOR AGENT.
The Agent may resign at any time by giving written notice thereof to
the Banks and the Borrower and may be removed at any time with cause with
the written approval of the Required Banks. Upon any such resignation or
removal, the Required Banks shall have the right to appoint a successor
Agent with the consent of the Borrower, which shall not be unreasonably
withheld or delayed. If no successor Agent has been so appointed by the
Required Banks, and
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has accepted such appointment, within 30 days after the retiring Agent's
giving of notice of resignation or the Required Banks' removal of the
retiring Agent, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent with the consent of the Borrower (which shall not
be unreasonably withheld or delayed), which successor Agent shall be a
commercial bank organized under the laws of the United States of America or
of any state thereof and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and
become vested with all of the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations under the Credit Documents and the other Project Contracts.
After any retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Article 7 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was agent under this Agreement.
SECTION 7.7 COLLATERAL.
(a) Except as expressly provided herein, the Agent shall have no duty
to take any affirmative steps with respect to the collection of amounts
payable in respect of the Collateral. The Agent shall incur no liability as
a result of any private sale of the Collateral.
(b) The Banks hereby consent, and agree upon written request by the
Agent to execute and deliver such instruments and other documents as the
Agent may deem desirable to confirm such consent, to the release of the
Liens on the Collateral, including any release in connection with any sale,
transfer or other disposition of the Collateral or any part thereof, in
accordance with the Project Contracts.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement or the Note,
or consent to any departure by the Borrower therefrom, shall be effective
unless in writing and signed or consented to (in writing) by the Required
Banks (and, in the case of amendments, the Borrower), and then such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given; PROVIDED, HOWEVER, that no amendment,
waiver or consent shall, unless in writing and signed or consented to (in
writing) by all of the Banks, do any of the following: (a) waive any of the
conditions specified in Article 3; (b) increase the Commitments of the
Banks (except as expressly permitted by Section 2.1(d)) or subject the
Banks to any additional obligations; (c) reduce the principal of, or
interest on, the Loans or any fees or other amounts payable hereunder; (d)
postpone any date fixed for (i) payment of principal of, or interest on,
the Loans or (ii) payment of fees or other amounts payable hereunder; (e)
change the percentage of the Commitments or of the Loans outstanding, or
the number of Banks, required for the Banks or any of them to take any
action hereunder; or (f) amend this Section 8.1; and PROVIDED FURTHER,
however, that no amendment, waiver or consent shall, unless in writing and
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signed by the Agent in addition to the Persons required above to take such
action, affect the rights or duties of the Agent under this Agreement or
the Notes.
SECTION 8.2 NOTICES, ETC.
All notices and other communications provided for hereunder shall be
in writing (including by telecopier) and shall be mailed, telecopied or
delivered, if to the Borrower, to it at AES Red Oak, L.L.C., 1001 North
19th Street, Arlington, Virginia 22209, Attention: Project Manager,
telephone (703) 522-1315, telecopier (703) 528-4510; if to any Bank other
than Initial Bank, to it at the address or telecopier number set forth
below its name in the Assignment and Acceptance by which it became a party
hereto; if to the Agent or Initial Bank, to it at 75 Wall Street, 25th
Floor, New York, NY 10005-2889, Attention: Project Finance Group, Michael
Higgins, telephone (212) 429-2224, telecopier (212) 429-2192, Attention:
Credit Administration Department; or, as to each party, to it at such other
address or telecopier number as designated by such party in a written
notice to the other parties. All such notices and communications shall be
deemed received, (a) if personally delivered, upon delivery, (b) if sent by
first-class mail, on the third Business Day following deposit into the
mails and (c) if sent by telecopier, upon acknowledgment of receipt thereof
by the recipient, except that notices and communications to the Agent
pursuant to Article 2 or 7 shall not be effective until received by the
Agent.
SECTION 8.3 NO WAIVER; REMEDIES.
No failure on the part of any Bank or the Agent to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof,
and no single or partial exercise of any such right shall preclude any
other or further exercise thereof or the exercise of any other right. The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
SECTION 8.4 COSTS AND EXPENSES.
The Borrower agrees to pay on demand (a) all reasonable costs and
expenses of the Agent and the Banks in connection with the preparation,
execution, delivery, syndication, administration, modification and
amendment of this Agreement, the Note and the other documents to be
delivered hereunder, including (i) the reasonable fees and out-of-pocket
expenses of counsel for the Agent and the Banks with respect thereto and
with respect to advising the Agent and the Banks as to their rights and
responsibilities, or the perfection, protection or reservation of rights or
interests, under this Agreement, the other Project Contracts and the other
documents to be delivered hereunder, (ii) the reasonable fees and expenses
of any consultants, auditors or accountants engaged by the Agent with the
written consent (which shall not be unreasonably withheld) of the Borrower
pursuant hereto, and (b) all reasonable costs and expenses of the Agent and
the Banks (including reasonable counsel fees and expenses of the Agent and
the Banks) in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the other
Project Contracts and the other documents to be delivered hereunder,
whether in any action, suit or litigation, any concordato, concurso
liquidatorio, bankruptcy, insolvency or similar proceeding. In addition,
the Borrower shall pay any and all stamp and other taxes and fees payable
or determined to be payable in connection with the execution, delivery,
filing and recording of the aforementioned documents,
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and the Borrower agrees to indemnify and hold the Agent and the Banks
harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay any of the foregoing.
SECTION 8.5 APPLICATION OF MONIES.
If any sum paid or recovered in respect of the Obligations is less
than the amount then due, the Agent may apply that sum to principal,
interest, fees or any other amount due under this Agreement in such
proportions and order and generally in such manner as the Agent shall
reasonably determine.
SECTION 8.6 SEVERABILITY.
Any provision of this Agreement that is prohibited, unenforceable or
not authorized in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition, unenforceability or
nonauthorization without invalidating the remaining provisions of this
Agreement or affecting the validity, enforceability or authorization of
such provision in any other jurisdiction.
SECTION 8.7 NON-RECOURSE LIABILITY.
Satisfaction of the Obligations shall be had solely from the
Collateral. Notwithstanding any provision to the contrary in the
Transaction Documents, there shall be no recourse against any Affiliates,
stockholders, officers, directors, representatives or employees of the
Borrower other than the Borrower (each a "NON-RECOURSE PARTY"), for any
payment due hereunder or under any other Financing Document or Security
Document from the Borrower, or for the performance of any obligation of
such Non-Recourse Party, or breach of any representation or warranty made
by such Non-Recourse Party hereunder or thereunder. The sole recourse of
the Agent and the Banks hereunder or under any other Transaction Document
or for the performance of any obligation of such party, or breach of any
representation or warranty made hereunder or thereunder by such party,
shall be against such party and its assets, it being expressly understood
by the Senior Parties, that such obligations of each party are obligations
solely of such entity and that no such personal liability shall attach to,
or be incurred by any Non-Recourse Party; PROVIDED, that nothing contained
in this Section 8.7 shall (i) impair in respect of the Borrower the
validity of the Notes, prevent the taking of any action permitted by law
against the Borrower or any of its Affiliates, or in any way affect or
impair the rights of the Agent and the Banks to take any action permitted
by law, in either case to realize upon the Collateral, (ii) be deemed to
release the Borrower or any Affiliate thereof, or any past, present or
future shareholder, partner, officer, employee, director or agent of any
thereof, from liability for its fraudulent actions, fraudulent
misrepresentations, gross negligence or willful misconduct or (iii) limit
or affect the obligations and liabilities of any Non-Recourse Party in
accordance with the terms of any other Transaction Document creating such
obligations and liabilities to which such Non-Recourse Party is a party.
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SECTION 8.8 BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Agent and the Banks and their respective successors and
assigns, except that the Borrower shall not have the right to assign any of
its rights and obligations hereunder without the prior written consent of
the Required Banks, and, except as provided in Section 8.9, no Bank other
than Initial Bank shall have the right to assign any of its rights and
obligations hereunder.
SECTION 8.9 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Bank may at any time (with the consent of the Borrower, such
consent not to be unreasonably withheld or delayed, the consent of the
Agent, such consent not to be unreasonably withheld or delayed, and the
consent of the Initial Bank) sell to one or more banks or other entities
whose long-term unsecured debt is rated at least "A" or the equivalent by
S&P and Moody's (a "PURCHASING BANK") all or any part of its rights and
obligations under this Agreement and the Note (which, except in the case of
an assignment to a Person that, immediately before such assignment, was a
Bank, shall be in an amount equal to not less than the lesser of (x)
$1,000,000 and (y) 33 1/3% of the Commitments) pursuant to an Assignment
and Acceptance executed by such Purchasing Bank, such transferor Bank, the
Agent and the Initial Bank (and, in the case of a Purchasing Bank that is
not then a Bank or an Affiliate thereof, by the Borrower). Upon (x) such
execution of such Assignment and Acceptance and (y) delivery of a copy
thereof to the Borrower and payment of the amount of its participation to
the Agent or such transferor Bank, such Purchasing Bank shall for all
purposes be a Bank party to this Agreement and shall have all the rights
and obligations of a Bank under this Agreement, to the same extent as if it
were an original party hereto with the commitment percentage as set forth
in such Assignment and Acceptance, which shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Bank and the resulting adjustment of commitment
percentages arising from the purchase by such Purchasing Bank of all or a
portion of the rights and obligations of such transferor Bank under this
Agreement and the Notes.
(b) Any Bank may, from time to time, sell or offer to sell
participating interests in any Loans owing to such Bank, such Bank's
interest in the Note, any Commitment of such Bank or any other interests
and obligations of such Bank hereunder, to one or more banks or other
entities (each, a "PARTICIPANT"), on such terms and conditions as may be
determined by the selling Bank, without the consent of or notice to the
Borrower, and the grant of such participation shall not relieve any Bank of
its obligations, or impair the rights of any Bank, hereunder. In the event
of any such sale by a Bank of a participating interest to a Participant,
such Bank shall remain solely responsible for the performance of such
Bank's obligations under this Agreement, the Borrower, the Agent and the
Initial Bank will continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement and
such Bank shall retain the sole right and responsibility to exercise the
rights of such Bank, and enforce the obligations of the Borrower, including
the right to approve any amendment, modification, supplement or waiver of
any provision of any Credit Document and the right to take action under
Article 6 hereof and such Bank shall not grant any such Participant any
voting rights or veto
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power over any such action by such Bank under this Agreement (PROVIDED that
such Bank may agree not to consent to any modification, amendment or waiver
of this Agreement, without the consent of the Participant, that would alter
the principal of or interest on the Loans, postpone the date fixed for any
payment of principal of or interest thereon or extend the term of any
Commitment). No Participant shall have any rights under this Agreement to
receive payment of principal, interest or any other amount except through a
Bank and as provided in this Section 8.9. The Borrower agrees that, upon
the occurrence and during the continuance of any Event of Default, each
Participant shall have the right of set-off in respect of its participating
interest in amounts owing under this Agreement and the Note as set forth in
Section 2.19 hereof to the same extent as if the amount of its
participating interest was owing directly to it as a Bank under this
Agreement or the Note. The Borrower also agrees that each Participant shall
be entitled to the benefits of Sections 2.13, 2.14, 2.15 and 2.16 hereof
with respect to its participation granted hereunder; PROVIDED that no
Participant shall be entitled to receive any greater amount pursuant to
such Sections than the Bank transferring such participation would have been
entitled to receive in respect of the amount of the participation
transferred to such Participant had no such transfer occurred.
(c) Any Bank may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 8.9,
disclose to the Purchasing Bank or Participant or proposed Purchasing Bank
or Participant any information relating to the Borrower furnished to such
Bank by or on behalf of the Borrower; PROVIDED, HOWEVER, that prior to any
such disclosure, the Person receiving such disclosure shall sign such
confidentiality agreements as the Borrower may reasonably request.
SECTION 8.10 INDEMNIFICATION.
The Borrower agrees to indemnify, on demand, and hold harmless the
Agent and each Bank and each of their respective officers, directors,
employees, agents and affiliates from and against any and all claims,
damages, losses, liabilities, costs and expenses whatsoever that such
indemnified party may incur (or that may be claimed against such
indemnified party by any Person) by reason of (a) any untrue statement or
alleged untrue statement of any material fact concerning the Borrower or
the Collateral, or the omission or alleged omission to state any fact
concerning the Borrower or the Collateral necessary to make any such
statement, in light of the circumstances under which it was made, not
misleading; (b) the issuance, sale or delivery of the Senior Debt; (c) the
use of the proceeds of the Senior Debt or any Loan; (d) any reasonable
action taken by such indemnified party in protecting and enforcing the
rights and remedies of the Agent and the Banks under the Project Contracts;
(e) any claim of any Person with respect to any finder's fee, brokerage
commission or other similar sum due in connection with any Project
Contract; or (f) any failure by the Borrower to comply with any
Environmental Law; PROVIDED, HOWEVER, that the Borrower shall not be
required to indemnify the Agent or any Bank for any claims, damages,
losses, liabilities, costs or expenses to the extent caused by the Agent's
or any Bank's willful misconduct or gross negligence. The Borrower, upon
demand by any party indemnified or intended to be indemnified pursuant to
this Section 8.10 at any time, shall also reimburse such party for any
reasonable legal or other expenses incurred in connection with
investigating or defending against any of the foregoing. If any action,
suit or proceeding arising
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from any of the foregoing is brought against any party indemnified or
intended to be indemnified pursuant to this Section 8.10 (an "INDEMNIFIED
PARTY"), such Indemnified Party shall promptly notify the Borrower in
writing, enclosing a copy of all papers served, but the omission so to
notify the Borrower of any such action shall not relieve it of any
liability that it may have to any Indemnified Party otherwise than under
this Section 8.10; PROVIDED, HOWEVER, that the Borrower shall not be liable
for any settlement of any such action effected without the Borrower's prior
written consent. In case any such action shall be brought against any
Indemnified Party and it shall notify the Borrower of the commencement
thereof, the Borrower shall be entitled to participate in and, to the
extent that it shall wish, to assume the defense thereof with counsel
reasonably satisfactory to such Indemnified Party, and after notice from
the Borrower to such Indemnified Party of the Borrower's election so to
assume the defense thereof, the Borrower shall not be liable to such
Indemnified Party for any subsequent legal or other expenses attributable
to such defense, except as provided below, other than reasonable costs of
investigation subsequently incurred by such Indemnified Party in connection
with the defense thereof. The Indemnified Party shall have the right to
employ its own counsel in any such action, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party unless (i)
the employment of counsel by such Indemnified Party has been authorized by
the Borrower, (ii) the Indemnified Party shall have reasonably concluded
that there may be a conflict of interest between the Borrower and the
Indemnified Party in the conduct of the defense of such action (in which
case the Borrower shall not have the right to direct the defense of such
action on behalf of the Indemnified Party) or counsel for the Borrower
shall have declined to represent the Indemnified Party in light of a
potential conflict of interest or (iii) the Borrower shall not in fact have
employed counsel reasonably satisfactory to the Indemnified Party to assume
the defense of such action.
SECTION 8.11 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER
OF JURY TRIAL.
(a) THE RIGHTS AND OBLIGATIONS OF EACH OF THE PARTIES UNDER THIS
AGREEMENT AND THE NOTE SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING AGAINST THE BORROWER
WITH RESPECT TO THIS AGREEMENT OR THE NOTE MAY BE BROUGHT IN THE COURTS OF
THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. THE BORROWER HEREBY IRREVOCABLY
DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES ON
THE DATE HEREOF AT 111 EIGHTH AVENUE, NEW YORK, NY 10011, AS ITS DESIGNEE,
APPOINTEE AND AGENT WITH RESPECT TO ANY ACTION OR PROCEEDING IN NEW YORK TO
RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF
ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES
31
<PAGE>
AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING AND
AGREES THAT THE FAILURE OF SUCH AGENT TO GIVE ANY ADVICE OF ANY SUCH
SERVICE OF PROCESS TO THE BORROWER SHALL NOT IMPAIR OR AFFECT THE VALIDITY
OF SUCH SERVICE OR OF ANY CLAIM BASED THEREON. IF FOR ANY REASON SUCH
DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH,
THE BORROWER AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW
YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY
TO THE AGENT. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH IN SECTION
8.2, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
OR THE NOTE BROUGHT IN THE COURTS REFERRED TO IN SECTION 8.11(a) ABOVE AND
HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO ANY OF THIS AGREEMENT OR THE NOTE OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
SECTION 8.12 HEADINGS.
The section and subsection headings used herein have been inserted for
convenience of reference only and do not constitute matters to be
considered in interpreting this Agreement.
SECTION 8.13 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
32
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective duly authorized representatives, as of the day
and year first above written.
AES RED OAK , L.L.C.
By: /s/ Louis J. Anatrella
--------------------------------
Name: Louis J. Anatrella
Title: Vice President
COMMITMENT
$2,500,000 DRESDNER BANK AG, acting through its New York
Branch and/or Grand Cayman Branch, as Initial
Bank and as a Bank
By: /s/ Thomas Lake
-------------------------------------------
Name: Thomas Lake
Title: Vice President
By: /s/ Andrew Schroeder
-------------------------------------------
Name: Andrew Schroeder
Title: Vice President
DRESDNER BANK AG, acting through its New York
Branch, as Agent
By: /s/ Thomas Lake
-------------------------------------------
Name: Thomas Lake
Title: Vice President
By: /s/ Andrew Schroeder
-------------------------------------------
Name: Andrew Schroeder
Title: Vice President
[WORKING CAPITAL AGREEMENT]
<PAGE>
EXHIBIT A
FORM OF
WORKING CAPITAL PROMISSORY NOTE
-------------------------------
$2,500,000 New York, New York
March 15, 2000
FOR VALUE RECEIVED, the undersigned, AES RED OAK, L.L.C., a Delaware
limited liability company (the "BORROWER"), hereby unconditionally promises to
pay to the order of DRESDNER BANK AG, acting through its New York Branch (the
"AGENT") for the benefit of the Banks referred to from time to time in the
Credit Agreement referred to below the lesser of (i) the principal sum of Two
Million Five Hundred Thousand Dollars ($2,500,000) and (ii) the aggregate unpaid
principal amount of the Loans made by the Banks to the Borrower under the Credit
Agreement on the dates and in the amounts specified therein.
The Borrower further promises to pay interest on the daily unpaid principal
amount hereof from time to time outstanding on the dates and at the rates
specified in the Credit Agreement. This Note is hereby expressly limited so that
in no contingency or event, whether by reason of acceleration of the maturity of
any indebtedness evidenced hereby or otherwise, shall the interest contracted
for or charged or received by the Banks exceed the maximum amount permissible
under Applicable Law. If, from any circumstance whatsoever, interest would
otherwise be payable to the Banks in excess of the maximum lawful amount, the
interest payable to the Banks shall be reduced to the maximum amount permitted
under Applicable Law, and the amount of interest for any subsequent period, to
the extent less than that permitted by Applicable Law, shall to that extent be
increased by the amount of such reduction.
The holder hereof is irrevocably authorized to endorse on the schedule
attached hereto, or on a continuation thereof, the date each such interest
payment is due and the amount of each such interest payment determined in
accordance with the Credit Agreement. All such notations shall constitute PRIMA
FACIE evidence of the accuracy of the information so recorded and be enforceable
against the Borrower with the same force and effect as if such amounts were each
set forth in a separate note executed by the Borrower.
All payments due hereunder shall be made without setoff, counterclaim or
deduction of any nature to the Agent, for the account of the Banks, at 75 Wall
Street, New York, NY 10005-2889, in lawful money of the United States of America
and in immediately available funds, or at such other place and in such other
manner as may be specified by the Agent pursuant to the Credit Agreement.
The holder hereof is irrevocably authorized to endorse on the schedule
attached hereto, or on a continuation thereof, the date and amount of each Loan
made to the Borrower and each payment or prepayment of principal thereof,
provided that the failure of such holder to make, or any error in making, any
such recordation or endorsement shall not affect the obligations of the
Ex. A-1
<PAGE>
Borrower hereunder or under the Credit Agreement. All such notations shall
constitute PRIMA FACIE evidence of the accuracy of the information so recorded
and be enforceable against the Borrower with the same force and effect as if
such amounts were each set forth in a separate note executed by the Borrower.
This Note is the "NOTE" of the Borrower to the Agent, for the benefit of
the Banks, referred to in, evidences each Loan made by the Banks to the Borrower
under, is subject to the provisions of, and entitles the holder to the benefits
of, the Working Capital Agreement dated as of March 1, 2000 (the "CREDIT
AGREEMENT") among the Borrower, the Banks (including the "INITIAL BANK") parties
thereto, and the Agent, as the same may be amended, supplemented or otherwise
modified from time to time and to which reference is hereby made for a more
complete statement of the terms and conditions under which each Loan evidenced
hereby is to be made and repaid. Capitalized terms in this Note that are not
specifically defined herein shall have the meanings ascribed to them in the
Credit Agreement.
The Credit Agreement provides for, among other things, the acceleration of
the maturity of the unpaid principal amount hereof upon the occurrence of
certain stated events and for voluntary prepayments in certain circumstances and
upon certain terms and conditions. The obligations of the Borrower under the
Credit Agreement and this Note are secured by, and the holder hereof is entitled
to the benefit of, the Security Documents.
In addition to any and all costs, fees and expenses for which the Borrower
is liable under the Credit Agreement, the Borrower promises to pay all costs and
expenses, including reasonable attorneys' fees and disbursements, incurred in
the collection and enforcement hereof or any appeal of any judgment rendered
hereon.
The Borrower hereby expressly waives diligence, presentment, protest,
demand, dishonor, nonpayment and notice of every kind to the fullest extent
permitted by Applicable Law. No failure or delay by the holder of this Note to
exercise any right or remedy under this Note or any other document or instrument
entered into pursuant to the Credit Agreement shall operate or be construed as a
waiver or modification hereof or thereof.
This Note shall be binding upon the successors and assigns of the Borrower
and shall inure to the Agent and its successors, endorsees and assigns. If any
term or provision of this Note shall be held invalid, illegal or unenforceable,
the validity of all other terms and provisions hereof shall in no way be
affected thereby.
Recourse under this Note is limited in accordance with Section 8.7 of the
Credit Agreement, and the provisions of said Section 8.7 are incorporated herein
by reference.
THIS NOTE SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK. ANY LEGAL ACTION OR PROCEEDING AGAINST THE BORROWER WITH RESPECT TO
THIS NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF
NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY
Ex. A-2
<PAGE>
EXECUTION AND DELIVERY OF THIS NOTE, THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE BORROWER HEREBY
IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR
IN CONNECTION WITH THIS NOTE BROUGHT IN THE COURTS REFERRED TO ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
AES RED OAK, L.L.C.
By:
-------------------------------------------
Name:
Title:
Ex. A-3
<PAGE>
SCHEDULE
<TABLE>
<CAPTION>
Total
Principal
Date Principal Amount of Unpaid Date Interest Amount of Amount of
Loan Amount of Principal Paid Principal Payment is Interest Loans Notation
Made Loan or Prepaid Balance Due Due Outstanding Made by
---- --------- -------------- --------- ------------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
Ex. A-4
<PAGE>
EXHIBIT B
NOTICE OF BORROWING NO. [ ]
[AES Red Oak L.L.C. Letterhead]
[Date - [Three Business Days for
Base Rate Loan or Five Business
Days for Eurodollar Rate Loan]
prior to Working Capital Loan
advance date]
Dresdner Bank AG, New York Branch
75 Wall Street
New York, NY 10005-2889
Attention: Michael Higgins
Portfolio Management
Telephone: 212-429-2224
with a copy to: Maria Pena
Telephone: 212-429-2677
Gentlemen:
Reference is made to the Working Capital Agreement dated as of March 1, 2000, by
and among AES Red Oak L.L.C. (the "BORROWER"), the financial institutions named
therein (the "BANKS") and Dresdner Bank AG, acting through its New York Branch
(the "AGENT") (as the same may be amended, modified or supplemented from time to
time, the "CREDIT AGREEMENT") (capitalized terms used herein and in the
accompanying schedules, unless otherwise noted, shall have the meanings ascribed
to them in the Credit Agreement).
The Borrower hereby requests that the Agent make available to the Borrower on
_________, 200__, a Borrowing under the Credit Agreement in the following
amount:
Funds required by the Borrower to pay
for Operating and Maintenance Costs
[gas and/or chemicals for testing of the Project] $_________________
This Borrowing shall bear interest at [choose Adjusted Base Rate or Eurodollar
Rate as specified in Section 2.3 and Interest Period applicable to Eurodollar
Rate Loan].
Ex. B-1
<PAGE>
Attached hereto are invoices or other evidence of amounts due evidencing the
uses contemplated for the requested Borrowing. We request that the funds
representing the requested Borrowing be deposited in the following account:
[Account Number]
In connection with this request for a Borrowing, the Borrower further certifies
that the proceeds of the Borrowing being requested herein are to be applied for
the uses permitted by the Credit Agreement.
The Borrower hereby certifies to the Agent and each Bank that, as of the date of
this request for a Borrowing, the Borrower will be in compliance, subject to the
satisfaction or waiver by the Agent, with all conditions precedent set forth in
Section 3.2 of the Credit Agreement.
AES RED OAK L.L.C.
By:
-------------------------------------------
Name:
Title:
Ex. B-2
<PAGE>
EXHIBIT C
WORKING CAPITAL AGREEMENT
ASSIGNMENT AND ACCEPTANCE
Dated __________, 200_
Reference is made to the Working Capital Agreement dated as of March 1,
2000 (the "WORKING CAPITAL AGREEMENT") among AES Red Oak L.L.C., a Delaware
limited liability company (the "BORROWER"), the Banks (as defined in the Working
Capital Agreement) and Dresdner Bank AG, acting through its New York Branch, as
Agent for the Banks (the "AGENT"). Terms defined in the Working Capital
Agreement are used herein with the same meaning.
_________________ (the "ASSIGNOR") and ___________________ (the "ASSIGNEE")
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, the percentage interest
specified on Schedule 1 hereto in and to all of the Assignor's rights and
obligations under the Working Capital Agreement as of the date hereof (after
giving effect to any other assignments thereof made before the date hereof,
whether or not such assignments have become effective, but without giving effect
to any other assignments thereof also made on the date hereof), including,
without limitation, such percentage interest in the Assignor's Commitment and
the Loans owing to the Assignor. The Assignee shall pay to the Assignor, at or
before 12:00 noon, local time of the Assignor, on the Effective Date, the
purchase price therefor in an amount equal to the percentage interest of the
Loans owing to the Assignor, as reflected on Schedule 1 hereto, in immediately
available funds.
2. The Assignor (a) represents and warrants that as of the date hereof its
Commitment and the Loans owing to it (after giving effect to any other
assignments of the foregoing made before the date hereof, whether or not such
assignments have become effective, but without giving effect to any other such
assignments also made on the date hereof) are in the respective dollar amounts
specified therefor on Schedule 1 hereto; (b) represents and warrants that it is
the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest in free and clear of any adverse claim; (c) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any of
the Credit Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of any of the Credit Documents or any other
instrument or document furnished pursuant thereto; and (d) 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 or any other Person of any of its obligations under any of the Credit
Documents or any other instrument or document furnished pursuant thereto.
3. The Assignee (a) confirms that it has received copies of the Credit
Documents and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance, including such documents
Ex. C-1
<PAGE>
evidencing satisfaction of the conditions precedent set forth in the Working
Capital Agreement; (b) agrees that it will, independently and without reliance
upon the Agent, the Assignor or any other Bank and based on such documents and
information an it may deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Working Capital
Agreement; (c) appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Documents as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (d) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Working Capital
Agreement are required to be performed by it as a Bank; and (e) specifies as its
address for notices the address set forth beneath its name on Schedule 1 hereto.
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Agent for acceptance and
recording by the Agent in the register maintained by the Agent for such
purposes. The effective date of this Assignment and Acceptance shall be the date
of acceptance thereof by the Agent, unless otherwise specified on Schedule 1
hereto (the "EFFECTIVE DATE").
5. Upon such acceptance and recording by the Agent, as of the Effective
Date (a) the Assignee shall be a party to the Working Capital Agreement and, to
the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and (b) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Working Capital Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date the Agent shall make all payments under the Working Capital
Agreement in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and fees with respect thereto)
to the Assignee. The Assignor and the Assignee shall make all appropriate
adjustments, directly between themselves in respect of payments of principal,
interest and/or fees under the Working Capital Agreement for periods before the
Effective Date.
7. Each of the Assignor and the Assignee agrees that at any time and from
time to time upon the written request of the other party, it will execute and
deliver such further documents and do such further acts and things as the other
party may reasonably request in order to effect the purposes of this Assignment
and Acceptance.
8. THE RIGHTS AND OBLIGATIONS OF EACH OF THE PARTIES UNDER THIS ASSIGNMENT
AND ACCEPTANCE SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
9. This Assignment and Acceptance is executed by the parties on Schedule 1
hereto and may be executed in one or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same
document. Execution of this Assignment and Acceptance by the Agent and the
Borrower on Schedule 1 hereto shall constitute any consent of such Person
required pursuant to Section 8.9 of the Working Capital Agreement.
Ex. C-2
<PAGE>
[ASSIGNOR]
By:
------------------------------------------
Name:
Title:
By:
-------------------------------------------
Name:
Title:
Ex. C-3
<PAGE>
[ASSIGNEE]
By:
Name:
Title:
[ADDRESS FOR NOTICES]
Consented to on this _____ day of
__________, 200__:
DRESDNER BANK AG, acting through its
New York Branch,
as Agent
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
DRESDNER BANK AG, acting through its
New York Branch and/or Grand Cayman Branch,
as Initial Bank
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
Ex. C-4
<PAGE>
Consented to on this _____ day of __________, 200__:
AES RED OAK, L.L.C.
By:
-------------------------------
Name:
Title:
Ex. C-5
<PAGE>
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE
<TABLE>
<CAPTION>
<S> <C>
SECTION 1.
Percentage Interest: _______%
SECTION 2.
IMMEDIATELY PRIOR TO EFFECTIVE DATE:
Assignor's Commitment: $_______
Loans owing to Assignor: $_______
SECTION 3.
UPON EFFECTIVE DATE:
Assignor's Commitment: $
Assignee's Commitment: $
SECTION 4.
Effective Date: _______________
</TABLE>
Ex. C-6
<PAGE>
EXHIBIT D
NOTICE OF REPAYMENT
-------------------
[AES Red Oak, L.L.C. Letterhead]
[Date]
Dresdner Bank AG, New York Branch, as Agent
75 Wall Street
New York, NY 10005-2889
Attention: Michael Higgins
Portfolio Management
Telephone: 212-429-2224
with a copy to: Maria Pena
Telephone: 212-429-2677
The Bank of New York, as Collateral Agent
101 Barclay Street, Floor 21W
New York, NY 10286
Attention: Corporate Trust Administration
Ladies and Gentlemen:
Reference is made to the Working Capital Agreement dated as of March 1, 2000 by
and among AES Red Oak L.L.C. (the "BORROWER"), the financial institutions named
therein (the "BANKS") and Dresdner Bank AG, acting through its New York Branch
(the "AGENT") (as the same may be amended, modified or supplemented from time to
time, the "CREDIT AGREEMENT") (capitalized terms used herein, unless otherwise
noted, shall have the meanings ascribed to them in the Credit Agreement).
The Borrower hereby notifies the Agent and the Collateral Agent of the following
repayment of Loans to be made on [date]:
[1. Repayment of principal in respect of the
Loan made pursuant to Notice of
Borrowing No. [___] dated [____________]
in the original principal amount of
$--------------- $----------------
AES RED OAK, L.L.C.
By:
-------------------------------------------
Name:
Title:
Ex. D-1
<PAGE>
EXHIBIT E
WORKING CAPITAL AGREEMENT
COMMITMENT INCREASE SUPPLEMENT
[AES Red Oak, L.L.C. Letterhead]
[Date]
Dresdner Bank AG, New York Branch, as Agent
75 Wall Street
New York, NY 10005-2889
Attention: Michael Higgins
Portfolio Management
Telephone: 212-429-2224
with a copy to: Maria Pena
Telephone: 212-429-2677
Ladies and Gentlemen:
Reference is made to the Working Capital Agreement dated as of March 1, 2000 by
and among AES Red Oak L.L.C. (the "BORROWER"), the financial institutions named
therein (the "BANKS") and Dresdner Bank AG, acting through its New York Branch
(the "AGENT") (as the same may be amended, modified or supplemented from time to
time, the "CREDIT AGREEMENT") (capitalized terms used herein, unless otherwise
noted, shall have the meanings ascribed to them in the Credit Agreement).
The Borrower hereby notifies the Agent that the current Working Capital
Requirement is $____________ and attaches to this Supplement a certificate of
the Independent Engineer confirming such Working Capital Requirement. Therefore,
pursuant to Section 2.1(d) of the Credit Agreement, the Borrower hereby requests
that the aggregate Commitment of the Banks under the Credit Agreement be
increased from $___________ to $_____________ effective [date], such that the
Commitment of each Bank from and after such date shall be as set forth on Annex
A.
AES RED OAK, L.L.C.
By:
-------------------------------------------
Name:
Title:
Ex. E-1
<PAGE>
Accepted and agreed to this
___ day of _____________ 200__.
DRESDNER BANK, AG, acting through its
New York Branch, as Agent
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
Ex. E-2
<PAGE>
ANNEX A
to
EXHIBIT E
<TABLE>
<CAPTION>
BANK EXISTING COMMITMENT INCREASED COMMITMENT
<S> <C> <C>
---------- ----------
Aggregate Commitment of the Banks
---------- ----------
</TABLE>
Ex. E-3
<PAGE>
SCHEDULE 1
WORKING CAPITAL AGREEMENT
APPLICABLE MARGIN
<TABLE>
<CAPTION>
------------------------------ -----------------------------------------------
APPLICABLE MARGIN
(The Applicable Margin at any time shall be
the percentage listed below opposite the
RATING(1) rating of the Bonds as in effect at such time)
------------------------------ -----------------------------------------------
EURODOLLAR RATE LOANS BASE RATE LOANS
------------------------------ ------------------------ ----------------------
<S> <C> <C>
BBB/Baa2 or higher 1.125% 0.375%
------------------------------ ------------------------ ----------------------
BBB-/Baa3 1.25% 0.50%
------------------------------ ------------------------ ----------------------
BB+/Ba1 2.25% 1.50%
------------------------------ ------------------------ ----------------------
BB/Ba2 2.50% 1.75%
------------------------------ ------------------------ ----------------------
BB-/Ba3 or lower 2.75% 2.00%
------------------------------ ------------------------ ----------------------
</TABLE>
-------------------------------------
(1) The lower of the rating assigned by S&P or Moody's to the Bonds.
