Document:

exhibit_10-2.htm

 

Exhibit 10.2

 

 

 

WORLD FINANCIAL CAPITAL MASTER NOTE TRUST

 

 

Issuer

 

 

And

 

 

DEUTSCHE BANK TRUST COMPANY AMERICAS

 

 

Indenture Trustee

 

 

 

 

THIRD AMENDED AND RESTATED

SERIES 2009-VFN INDENTURE SUPPLEMENT

 

 

Dated as of May 24, 2013

 

 

 

 

 

 

 

 

 

  

  

  

TABLE OF CONTENTS

 

	
ARTICLE I.

	
CREATION OF THE SERIES 2009-VFN NOTES

 

	
  

	
Section 1.1

	
Designation 

	
1

 

	
ARTICLE II.

	
DEFINITIONS

 

	
  

	
Section 2.1

	
Definitions 

	
2

 

	
ARTICLE III.

	
NOTEHOLDER SERVICING FEE

 

	
  

	
Section 3.1

	
Servicing Compensation 

	
20

 

	
ARTICLE IV.

	
VARIABLE FUNDING MECHANICS

 

	
  

	
Section 4.1

	
Variable Funding Mechanics 

	
20

 

	
ARTICLE V.

	
RIGHTS OF SERIES 2009-VFN NOTEHOLDERS AND ALLOCATION AND APPLICATION OF COLLECTIONS

 

	
  

	
Section 5.1

	
Collections and Allocations 

	
24

	
  

	
Section 5.2

	
Determination of Monthly Interest 

	
27

	
  

	
Section 5.3

	
Determination of Class A Monthly Principal, Class M Monthly Principal, Class B Monthly Principal 

     and Class C Monthly Principal 

	
 

30

	
  

	
Section 5.4

	
Application of Available Finance Charge Collections and Available Principal Collections 

	
32

	
  

	
Section 5.5

	
Investor Charge-Offs 

	
35

	
  

	
Section 5.6

	
Reallocated Principal Collections 

	
35

	
  

	
Section 5.7

	
Excess Finance Charge Collections 

	
35

	
  

	
Section 5.8

	
Shared Principal Collections 

	
36

	
  

	
Section 5.9

	
Certain Series Accounts 

	
36

	
  

	
Section 5.10

	
Cash Collateral Account 

	
37

	
  

	
Section 5.11

	
Investment Instructions 

	
38

	
  

	
Section 5.12

	
Determination of LIBOR 

	
38

 

	
ARTICLE VI.

	
DELIVERY OF SERIES 2009-VFN NOTES; DISTRIBUTIONS; REPORTS TO SERIES 2009-VFN NOTEHOLDERS

 

	
  

	
Section 6.1

	
Delivery and Payment for the Series 2009-VFN Notes 

	
39

	
  

	
Section 6.2

	
Distributions 

	
39

	
  

	
Section 6.3

	
Reports and Statements to Series 2009-VFN Noteholders 

	
40

 

	
ARTICLE VII.

	
SERIES 2009-VFN EARLY AMORTIZATION EVENTS

 

	
  

	
Section 7.1

	
Series 2009-VFN Early Amortization Events 

	
41

 

	
ARTICLE VIII.

	
REDEMPTION OF SERIES 2009-VFN NOTES; SERIES TERMINATION

 

	
  

	
Section 8.1

	
Optional Redemption of Series 2009-VFN Notes; Final Distributions 

	
44

	
  

	
Section 8.2

	
Series Termination 

	
45

  

i

  

 

	
ARTICLE IX.

	
MISCELLANEOUS PROVISIONS

 

	
  

	
Section 9.1

	
Ratification of Indenture; Amendments 

	
45

	
  

	
Section 9.2

	
Counterparts 

	
45

	
  

	
Section 9.4

	
Form of Delivery of the Series 2009-VFN Notes 

	
45

	
  

	
Section 9.5

	
GOVERNING LAW 

	
46

	
  

	
Section 9.6

	
Limitation of Liability 

	
46

	
  

	
Section 9.7

	
Rights of the Indenture Trustee 

	
46

	
  

	
Section 9.8

	
Additional Provisions

	
46

	
  

	
Section 9.9

	
No Petition 

	
47

	
  

	
Section 9.10

	
Additional Requirements for Registration of and Limitations on Transfer and Exchange of Notes

	
47

EXHIBITS

EXHIBIT A-1                        FORM OF CLASS A NOTE

EXHIBIT A-2                        FORM OF CLASS M NOTE

EXHIBIT A-3                        FORM OF CLASS B NOTE

EXHIBIT A-4                        FORM OF CLASS C NOTE

EXHIBIT B                            FORM OF MONTHLY PAYMENT INSTRUCTIONS AND

NOTIFICATION TO INDENTURE TRUSTEE

EXHIBIT C                            FORM OF MONTHLY NOTEHOLDERS’ STATEMENT

EXHIBIT D                            FORM OF MONTHLY SERVICER’S CERTIFICATE

  

ii

  

THIRD AMENDED AND RESTATED SERIES 2009-VFN INDENTURE SUPPLEMENT, dated as of May 24, 2013 (the “Indenture Supplement”), between WORLD FINANCIAL CAPITAL MASTER NOTE TRUST, a trust organized and existing under the laws of the State of Delaware (herein, the “Issuer” or the “Trust”), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation, not in its individual capacity, but solely as indenture trustee (herein, together with its successors in the trusts thereunder as provided in the Indenture referred to below, the “Indenture Trustee”) under the Master Indenture, dated as of September 29, 2008 (the “Indenture”), between the Issuer and the Indenture Trustee (the Indenture, together with this Indenture Supplement, the “Agreement”).

 

WHEREAS, the parties hereto are party to the Second Amended and Restated Series 2009-VFN Indenture Supplement, dated as of June 1, 2012 (the “Existing Indenture Supplement”).

 

NOW, THEREFORE, in consideration of the mutual agreements contained herein, the Existing Indenture Supplement is hereby amended and restated in its entirety as follows and each party agrees as follows for the benefit of the other party and the Series 2009-VFN  Noteholders:

 

Pursuant to Section 2.11 of the Indenture, the Transferor may direct the Issuer to issue one or more Series of Notes.  The Principal Terms of this Series are set forth in this Indenture Supplement to the Indenture.

 

ARTICLE I.

 

Creation of the Series 2009-VFN Notes

 

Section 1.1                      Designation.

 

(a)           Pursuant to the Indenture and the Existing Indenture Supplement a Series of Notes was issued known as “World Financial Capital Master Note Trust, Series 2009-VFN” or the “Series 2009-VFN Notes.”  The Series 2009-VFN Notes were issued in four Classes, known as the “Class A Series 2009-VFN Floating Rate Asset Backed Notes,” the “Class M Series 2009-VFN Asset Backed Notes,” the “Class B Series 2009-VFN Asset Backed Notes” and the “Class C Series 2009-VFN Asset Backed Notes.” The Series 2009-VFN Notes shall be Variable Interests.

 

(b)           The Class A Notes may from time to time be divided into separate ownership tranches (each a “Class A Ownership Tranche”) which shall be identical in all respects, except for their respective Class A Maximum Principal Balances, Class A Principal Balances and certain matters relating to the rate and payment of interest.  The initial allocation of Class A Notes among Class A Ownership Tranches shall be made, and reallocations among such Class A Ownership Tranches or new Class A Ownership Tranches may be made, as provided in Section 4.1 of this Indenture Supplement and the Class A Note Purchase Agreement.

 

(c)           The Class M Notes may from time to time be divided into separate ownership tranches (each a “Class M Ownership Tranche”) which shall be identical in all respects, except for their respective Class M Maximum Principal Balances, Class M Principal Balances and certain matters relating to the rate and payment of interest.  The initial allocation of Class M

 

  

  

  

 

Notes among Class M Ownership Tranches shall be made, and reallocations among such Class M Ownership Tranches or new Class M Ownership Tranches may be made, as provided in Section 4.1 of this Indenture Supplement and the Class M Note Purchase Agreement.

 

(d)           Series 2009-VFN shall be included in Group One and shall be a Principal Sharing Series.  Series 2009-VFN shall be an Excess Allocation Series with respect to Group One only.  Series 2009-VFN shall not be subordinated to any other Series.

 

ARTICLE II.

 

Definitions

 

Section 2.1                      Definitions.

 

(a)           Whenever used in this Indenture Supplement, the following words and phrases shall have the following meanings, and the definitions of such terms are applicable to the singular as well as the plural forms of such terms and the masculine as well as the feminine and neuter genders of such terms.

 

“Administrative Agent” means an “Administrative Agent” as defined in the Class A Note Purchase Agreement or the Class M Note Purchase Agreement, as the context requires.

 

“Aggregate Investor Default Amount” means, as to any Monthly Period, the sum of the Investor Default Amounts in respect of such Monthly Period.

 

“Aggregate Senior Purchase Limit” means the sum of the Class A Purchase Limit and the Class M Purchase Limit.

 

“Allocation Percentage” means, with respect to any Monthly Period, the percentage equivalent of a fraction:

 

(a)      the numerator of which shall be equal to:

 

(i)  for Principal Collections during the Revolving Period and for Finance Charge Collections and Default Amounts at any time, the Collateral Amount at the end of the last day of the prior Monthly Period (or, in the case of the Monthly Period in which the Closing Date occurs, on the Closing Date), less any reductions to be made to the Collateral Amount on account of principal payments to be made on the Distribution Date falling in the Monthly Period for which the Allocation Percentage is being calculated; provided, however, that with respect to any Monthly Period in which a Reset Date occurs as a result of a Class A Incremental Funding, Class M Incremental Funding, Class B Incremental Funding, Class C Incremental Funding or the issuance of a new Series, the numerator determined pursuant to this clause (i) shall be (A) the Collateral Amount as of the close of business on the later of the last day of the prior Monthly Period or the preceding Reset Date, in each case less any reductions to be made to the Collateral Amount on account of principal payments to be made on the Distribution Date falling in the Monthly Period for which the Allocation

 

  

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Percentage is being calculated (to the extent not already subtracted in determining the Collateral Amount), for the period from and including the first day of the current Monthly Period or the preceding Reset Date, as applicable, to but excluding such Reset Date and (B) the Collateral Amount as of the close of business on such Reset Date, less any reductions to be made to the Collateral Amount on account of principal payments to be made on the Distribution Date falling in the Monthly Period for which the Allocation Percentage is being calculated (to the extent not already subtracted in determining the Collateral Amount), for the period from and including such Reset Date to the earlier of the last day of such Monthly Period (in which case such period shall include such day) or the next succeeding Reset Date (in which case such period shall not include such succeeding Reset Date); or

 

(ii)  for Principal Collections during the Early Amortization Period and the Controlled Amortization Period, the Collateral Amount at the end of the last day of the Revolving Period, provided, however, that the Transferor may, by written notice to the Indenture Trustee, the Servicer and the Rating Agencies, reduce the numerator used for purposes of allocating Principal Collections to Series 2009-VFN at any time if (x) the Rating Agency Condition shall have been satisfied with respect to such reduction and (y) the Transferor shall have delivered to the Indenture Trustee an Officer’s Certificate to the effect, based on the facts known to such officer at that time, in the reasonable belief of the Transferor, such designation will not cause a Series 2009-VFN Early Amortization Event or an event that, after the giving of notice or the lapse of time, would cause a Series 2009-VFN Early Amortization Event to occur with respect to Series 2009-VFN; and

 

(b)      the denominator of which shall be the greater of (x) the Aggregate Principal Receivables determined as of the close of business on the last day of the prior Monthly Period and (y) the sum of the numerators used to calculate the allocation percentages for allocations with respect to Finance Charge Collections, Principal Collections or Default Amounts, as applicable, for all outstanding Series on such date of determination provided, that if one or more Reset Dates occur in a Monthly Period, the Allocation Percentage for the portion of the Monthly Period falling on and after such Reset Date and prior to any subsequent Reset Date will be recalculated for such period as of the close of business on the subject Reset Date.

 

“Amendment Date” means May 24, 2013.

 

“Available Cash Collateral Amount” means with respect to any Transfer Date, an amount equal to the lesser of (a) the amount on deposit in the Cash Collateral Account (before giving effect to any deposit to, or withdrawal from, the Cash Collateral Account made or to be made with respect to such date) and (b) the Required Cash Collateral Amount for such Transfer Date.

 

“Available Finance Charge Collections” means, for any Monthly Period, an amount equal to the sum of (a) the Investor Finance Charge Collections for such Monthly Period, plus (b) the Excess Finance Charge Collections allocated to Series 2009-VFN for such Monthly Period, plus

 

  

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(c) interest and earnings on funds on deposit in the Cash Collateral Account which will be deposited into the Finance Charge Account on the related Transfer Date to be treated as Available Finance Charge Collections pursuant to subsection 5.10(b).

 

“Available Principal Collections” means, for any Monthly Period, an amount equal to the sum of (a) the Investor Principal Collections for such Monthly Period, minus (b) the amount of Reallocated Principal Collections with respect to such Monthly Period which pursuant to Section 5.6 are required to be applied on the related Distribution Date, plus (c) any Shared Principal Collections with respect to other Principal Sharing Series (including any amounts on deposit in the Excess Funding Account that are allocated to Series 2009-VFN for application as Shared Principal Collections), plus (d) the aggregate amount to be treated as Available Principal Collections pursuant to clauses 5.4(a)(viii) and (ix) for the related Distribution Date.

 

“Bankrupt Merchant” means any Merchant which fails generally to, or admits in writing its inability to, pay its debts as they become due; or any Merchant for which a proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of such Merchant in an involuntary case under any Debtor Relief Law, or for the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official for any substantial part of its property, or for the winding-up or liquidation of its affairs, and such proceedings shall continue undismissed or unstayed and in effect for a period of 60 consecutive days or any of the actions sought in such proceeding shall occur; or any Merchant that commences a voluntary case under any Debtor Relief Law, or such Merchant’s consent to the entry of an order for relief in an involuntary case under any Debtor Relief Law, or consent to the appointment of a taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official for any substantial part of its property, or any general assignment for the benefit of creditors; or any Merchant or any Affiliate of such Merchant shall have taken any corporate action in furtherance of any of the foregoing actions with respect to such Merchant; provided, however, that a Merchant for which a Chapter 11 Plan is confirmed under a Debtor Relief Law shall no longer be a Bankrupt Merchant upon the occurrence of the Effective Date of such Chapter 11 Plan.  For purposes of this definition, a Chapter 11 Plan shall exclude a Chapter 11 Plan under which the Bankrupt Merchant liquidates all of its assets and discontinues operations.  

 

“Base Rate” means, as to any Monthly Period, the annualized percentage equivalent of a fraction, the numerator of which is equal to the sum of the Monthly Interest, any Class A Non-Use Fees and Class M Non-Use Fees payable pursuant to clauses 5.4(a)(ii) and (v) and any Class A Additional Amounts and Class M Additional Amounts payable pursuant to clauses 5.4(a)(i) through (vii) each for the related Distribution Period, any Class B Additional Interest and the Noteholder Servicing Fee with respect to such Monthly Period, and the denominator of which is the Weighted Average Collateral Amount during such Monthly Period.

 

“Cash Collateral Account” is defined in subsection 5.10(a).

 

“Change in Control” means the failure of Holding to own, directly or indirectly, 100% of the outstanding shares of common stock (excluding directors’ qualifying shares) of Comenity Capital Bank.

 

  

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“Chapter 11 Plan” means a plan proposed by a Bankrupt Merchant under and in conformance with the provisions of Chapter 11 of Title 11 of the United States Code for restructuring or reorganizing the business of the Bankrupt Merchant.

 

“Class A Additional Amounts” means Additional Amounts (as defined in the Class A Note Purchase Agreement) payable to the Class A Noteholders pursuant to the Class A Note Purchase Agreement.

 

“Class A Administrative Agents” means the “Administrative Agents” as defined  in the Class A Note Purchase Agreement.

 

“Class A Breakage Payment” is defined in subsection 5.2(e).

 

“Class A Funding Tranche” is defined in subsection 5.2(a).

 

“Class A Incremental Funding” means any increase in the Class A Principal Balance during the Revolving Period made pursuant to the Class A Note Purchase Agreement and Section 4.1(a) hereof.

 

“Class A Incremental Principal Balance” means the amount of the increase in the Class A Principal Balance occurring as a result of any Class A Incremental Funding, which amount shall equal the aggregate amount of the purchase prices paid by the Class A Noteholders pursuant to the Class A Note Purchase Agreement with respect to such Class A Incremental Funding.

 

“Class A Maximum Principal Balance” means the “Maximum Class A Principal Balance” (as defined in the Class A Note Purchase Agreement), as such amount may be increased or decreased from time to time pursuant to the Class A Note Purchase Agreement.  As applied to any particular Class A Note, the “Class A Maximum Principal Balance” means the portion of the overall Class A Maximum Principal Balance represented by that Class A Note.

 

“Class A Monthly Interest” is defined in subsection 5.2(a).

 

“Class A Monthly Principal” is defined in subsection 5.3(a).

 

“Class A Non-Use Fee” means the Class A Non-Use Fee defined in the Class A Note Purchase Agreement.

 

“Class A Note Purchase Agreement” means the Fourth Amended and Restated Note Purchase Agreement, dated as of the Amendment Date, among Transferor, the Issuer, the Servicer and the initial Class A Noteholders, as supplemented by the various Fee Letters referred to (and defined) therein, and as the same may be amended or otherwise modified from time to time. The Class A Note Purchase Agreement is hereby designated a “Transaction Document” for all purposes of the Agreement and this Indenture Supplement.

 

“Class A Noteholder” means the Person in whose name a Class A Note is registered in the Note Register.

 

  

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“Class A Notes” means any one of the Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee, substantially in the form of Exhibit A-1.

 

“Class A Ownership Group” means the “Ownership Group” defined in the Class A Note Purchase Agreement.

 

“Class A Ownership Group Percentage” means the “Ownership Group Percentage” defined in the Class A Note Purchase Agreement.

 

“Class A Ownership Tranche” is defined in subsection 1.1(b).

 

“Class A Principal Balance” means, on any Business Day, an amount equal to the result of (a) $   , plus (b) the aggregate amount of all Class A Incremental Principal Balances for all Class A Incremental Fundings occurring after the Amendment Date and on or prior to that Business Day, minus (c) the aggregate amount of principal payments made to Class A Noteholders after the Amendment Date and on or prior to such Business Day. As applied to any particular Class A Note, the “Class A Principal Balance” means the portion of the overall Class A Principal Balance represented by that Class A Note. The Class A Principal Balance shall be allocated among the Class A Ownership Tranches as provided in the Class A Note Purchase Agreement.

 

“Class A Pro Rata Percentage” means   %.

 

“Class A Purchase Limit” means the “Purchase Limit” defined in the Class A Note Purchase Agreement.

 

“Class A Required Amount” means, for any Distribution Date, an amount equal to the excess of the amounts described in clauses 5.4(a)(i), (ii) and (iii) over the sum of (a) Available Finance Charge Collections applied to pay such amount pursuant to subsection 5.4(a) and (b) any amount withdrawn from the Cash Collateral Account and applied to pay such amount pursuant to subsection 5.10(c).

 

“Class A Scheduled Final Payment Date” means the Distribution Date falling in the twelfth month following the month in which the Controlled Amortization Period begins.

 

“Class A Senior Percentage” means a percentage equal to the Class A Pro Rata Percentage, divided by the sum of the Class A Pro Rata Percentage and the Class M Pro Rata Percentage.

 

“Class A Tranche Rate” means, for any Distribution Period, the Class A Note Rate (as defined in the Class A Note Purchase Agreement) for each Class A Ownership Tranche (or any related Class A Funding Tranche).

 

“Class B Additional Interest” is defined in subsection 5.2(c).

 

“Class B Deficiency Amount” is defined in subsection 5.2(c).

 

  

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“Class B Incremental Funding” means any increase in the Class B Principal Balance during the Revolving Period made pursuant to the applicable Class B Note Purchase Agreement.

 

“Class B Incremental Principal Balance” means the amount of the increase in the Class B Principal Balance occurring as a result of any Class B Incremental Funding, which amount shall equal the aggregate amount of the purchase prices paid by the Class B Noteholders pursuant to the Class B Note Purchase Agreement with respect to such Class B Incremental Funding.

 

“Class B Maximum Principal Balance” means the “Maximum Class B Principal Balance” (as defined in the Class B Note Purchase Agreement), as such amount may be increased or decreased from time to time pursuant to the Class B Note Purchase Agreement.  As applied to any particular Class B Note, the “Class B Maximum Principal Balance” means the portion of the overall Class B Maximum Principal Balance represented by that Class B Note.

 

“Class B Monthly Interest” is defined in subsection 5.2(c).

 

“Class B Monthly Principal” is defined in subsection 5.3(c).

 

“Class B Note Interest Rate” means 0.0%.

 

“Class B Note Purchase Agreement” means the Second Amended and Restated Note Purchase Agreement, dated as of May 24, 2013, entered into among Comenity Capital Bank, the Transferor and each party that purchases Class B Notes from the Transferor.

 

“Class B Noteholder” means the Person in whose name a Class B Note is registered in the Note Register.

 

“Class B Notes” means any one of the Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee, substantially in the form of Exhibit A-3.

 

“Class B Principal Balance” means, on any Business Day, an amount equal to the result of (a) $   , plus (b) the aggregate amount of all Class B Incremental Principal Balances for all Class B Incremental Fundings occurring after the Amendment Date and on or prior to that Business Day, minus (c) the aggregate amount of principal payments made to Class B Noteholders after the Amendment Date and on or prior to such date. As applied to any particular Class B Note, the “Class B Principal Balance” means the portion of the overall Principal Balance represented by that Class B Note.

 

“Class B Pro Rata Percentage” means   %.

 

“Class B Required Amount” means, for any Distribution Date, an amount equal to the excess of the amount described in clause 5.4(a)(vi) over the sum of (a) Available Finance Charge Collections applied to pay such amount pursuant to subsection 5.4(a) and (b) any amount withdrawn from the Cash Collateral Account and applied to pay such amount pursuant to subsection 5.10(c).

 

 “Class C Additional Interest” is defined in subsection 5.2(d).

 

  

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“Class C Deficiency Amount” is defined in subsection 5.2(d).

 

“Class C Incremental Funding” means any increase in the Class C Principal Balance during the Revolving Period made pursuant to the Class C Note Purchase Agreement.

 

“Class C Incremental Principal Balance” means the amount of the increase in the Class C Principal Balance occurring as a result of any Class C Incremental Funding, which amount shall equal the aggregate amount of the purchase prices paid by the Class C Noteholders pursuant to the Class C Note Purchase Agreement with respect to such Class C Incremental Funding.

 

“Class C Maximum Principal Balance” means the “Maximum Class C Principal Balance” (as defined in the Class C Note Purchase Agreement), as such amount may be increased or decreased from time to time pursuant to the Class C Note Purchase Agreement.  As applied to any particular Class C Note, the “Class C Maximum Principal Balance” means the portion of the overall Maximum Principal Balance represented by that Class C Note.

 

“Class C Monthly Interest” is defined in subsection 5.2(d).

 

“Class C Monthly Principal” is defined in subsection 5.3(d).

 

“Class C Note Interest Rate” means 0.0%.

 

“Class C Note Purchase Agreement” means the Second Amended and Restated Note Purchase Agreement, dated as of May 24, 2013, entered into among Comenity Capital Bank, the Transferor and each party that purchases Class C Notes from the Transferor.

 

“Class C Noteholder” means the Person in whose name a Class C Note is registered in the Note Register.

 

“Class C Notes” means any one of the Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee, substantially in the form of Exhibit A-4.

 

“Class C Principal Balance” means, on any Business Day, an amount equal to the result of (a) $   , plus (b) the aggregate amount of all Class C Incremental Principal Balances for all Class C Incremental Fundings occurring after the Amendment Date and on or prior to that Business Day, minus (c) the aggregate amount of principal payments made to Class C Noteholders after the Amendment Date and on or prior to such date. As applied to any particular Class C Note, the “Class C Principal Balance” means the portion of the overall Principal Balance represented by that Class C Note.

 

“Class C Pro Rata Percentage” means   %.

 

“Class M Additional Amounts” means Additional Amounts (as defined in the Class M Note Purchase Agreement) payable to the Class M Noteholders pursuant to the Class M Note Purchase Agreement.

 

“Class M Administrative Agents” means the “Administrative Agents” as defined  in the Class M Note Purchase Agreement.

 

  

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“Class M Breakage Payment” is defined in subsection 5.2(f).

 

“Class M Funding Tranche” is defined in subsection 5.2(b).

 

“Class M Incremental Funding” means any increase in the Class M Principal Balance during the Revolving Period made pursuant to the applicable Class M Note Purchase Agreement.

 

“Class M Incremental Principal Balance” means the amount of the increase in the Class M Principal Balance occurring as a result of any Class M Incremental Funding, which amount shall equal the aggregate amount of the purchase prices paid by the Class M Noteholders pursuant to the Class M Note Purchase Agreement with respect to such Class M Incremental Funding.

 

“Class M Maximum Principal Balance” means the “Maximum Class M Principal Balance” (as defined in the Class M Note Purchase Agreement), as such amount may be increased or decreased from time to time pursuant to the Class M Note Purchase Agreement.  As applied to any particular Class M Note, the “Class M Maximum Principal Balance” means the portion of the overall Class M Maximum Principal Balance represented by that Class M Note.

 

“Class M Monthly Interest” is defined in subsection 5.2(b).

 

“Class M Monthly Principal” is defined in subsection 5.3(b).

 

“Class M Non-Use Fee” means the Non-Use Fee defined in the Class M Note Purchase Agreement.

 

“Class M Note Purchase Agreement” means the Third Amended and Restated Class M Note Purchase Agreement, dated as of the Amendment Date, among Transferor, the Issuer, the Servicer and the initial Class M Noteholders party thereto, as supplemented by the various Fee Letters referred to (and defined) therein, and as the same may be amended or otherwise modified from time to time. The Class M Note Purchase Agreement is hereby designated a “Transaction Document” for all purposes of the Agreement and this Indenture Supplement.

 

“Class M Noteholder” means the Person in whose name a Class M Note is registered in the Note Register.

 

“Class M Notes” means any one of the Notes executed by the Issuer and authenticated by or on behalf of the Indenture Trustee, substantially in the form of Exhibit A-2.

 

“Class M Ownership Group” means the “Ownership Group” defined in the Class M Note Purchase Agreement.

 

“Class M Ownership Group Percentage” means the “Ownership Group Percentage” defined in the Class M Note Purchase Agreement.

 

“Class M Ownership Tranche” is defined in subsection 1.1(c).

 

  

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“Class M Principal Balance” means, on any Business Day, an amount equal to the result of (a) $   plus (b) the aggregate amount of all Class M Incremental Principal Balances for all Class M Incremental Fundings occurring after the Amendment Date and on or prior to that Business Day, minus (c) the aggregate amount of principal payments made to Class M Noteholders after the Amendment Date and on or prior to such date. As applied to any particular Class M Note, the “Class M Principal Balance” means the portion of the overall Principal Balance represented by that Class M Note.

 

“Class M Pro Rata Percentage” means   %.

 

“Class M Purchase Limit” means the “Purchase Limit” defined in the Class M Note Purchase Agreement.

 

“Class M Required Amount” means, for any Distribution Date, an amount equal to the excess of the amount described in clauses 5.4(a)(iv) and (v), over the sum of (a) Available Finance Charge Collections applied to pay such amount pursuant to subsection 5.4(a) and (b) any amount withdrawn from the Cash Collateral Account and applied to pay such amount pursuant to subsection 5.10(c).

 

“Class M Scheduled Final Payment Date” means the Distribution Date falling in the twelfth month following the month in which the Controlled Amortization Period begins.

 

“Class M Senior Percentage” means a percentage equal to the Class M Pro Rata Percentage, divided by the sum of the Class A Pro Rata Percentage and the Class M Pro Rata Percentage

 

 “Class M Tranche Rate” means, for any Distribution Period, the Class M Note Rate (as defined in the Class M Note Purchase Agreement) for each Class M Ownership Tranche (or any related Class M Funding Tranche).

 

“Closing Date” means September 28, 2009.

 

“Collateral Amount” means, as of any date of determination, an amount equal to (a) the Note Principal Balance minus (b) the excess, if any, of the aggregate amount of Investor Charge-Offs and Reallocated Principal Collections over the reimbursement of such amounts pursuant to clause 5.4(a)(ix) prior to such date.

 

“Comenity Capital Bank” means Comenity Capital Bank, a Utah industrial bank, formerly known as World Financial Capital Bank.

 

“Controlled Amortization Amount” means for any Transfer Date with respect to the Controlled Amortization Period prior to the payment in full of the Note Principal Balance, an amount equal to (a) the Note Principal Balance as of the close of business on the last day of the Revolving Period divided by (b) twelve.

 

“Controlled Amortization Date” means the first day of the first Monthly Period that occurs on or after the Purchase Expiration Date under the Class A Note Purchase Agreement or Class M Note Purchase Agreement.

 

  

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“Controlled Amortization Period” means, unless a Series 2009-VFN Early Amortization Event or a Trust Early Amortization Event shall have occurred prior thereto, the period commencing at the opening of business on the first Controlled Amortization Date to occur (without being extended as provided in the applicable Note Purchase Agreement) and ending on the earlier to occur of (a) the commencement of the Early Amortization Period, and (b) the Series Termination Date, provided that Transferor may, by 2 Business Days’ prior written notice to the Indenture Trustee and each Series 2009-VFN Noteholder (and so long as the Early Amortization Period has not begun), cause the Controlled Amortization Period to begin on any date earlier than the one otherwise specified above.

 

“Controlled Amortization Shortfall” initially means zero and thereafter means, with respect to any Monthly Period during the Controlled Amortization Period, the excess, if any, of the Controlled Payment Amount for the previous Monthly Period over the sum of the amount distributed pursuant to subsection 6.2(a) with respect to the Class A Notes for the previous Monthly Period, the amount distributed pursuant to subsection 6.2(b) with respect to the Class M Notes for the previous Monthly Period, the amount distributed pursuant to subsection 6.2(c) with respect to the Class B Notes for the previous Monthly Period and the amount distributed pursuant to subsection 6.2(d) with respect to the Class C Notes for the previous Monthly Period.

 

“Controlled Payment Amount” means, with respect to any Transfer Date, the sum of (a) the Controlled Amortization Amount for such Transfer Date and (b) any existing Controlled Amortization Shortfall.

 

“Day Count Fraction” means, as to any Class A Ownership Tranche (or Class A Funding Tranche), any Class M Ownership Tranche or Class M Funding Tranche, any Class B Note or any Class C Note for any Distribution Period, a fraction (a) the numerator of which is the number of days in that Distribution Period (or, if less, the number of days during that Distribution Period during which that Class A Ownership Tranche, Class A Funding Tranche, Class M Ownership Tranche or Class M Funding Tranche, Class B Note or Class C Note was outstanding, including the first, but excluding the last, such day) and (b) the denominator of which is the actual number of days in the related calendar year (or, if so specified in the related Note Purchase Agreement, 360).

 

“DBRS” means DBRS, Inc.

 

“Default Amount” means, as to any Defaulted Account, the amount of Principal Receivables (other than Ineligible Receivables, unless there is an Insolvency Event with respect to Comenity Capital Bank or the Transferor) in such Defaulted Account on the day it became a Defaulted Account.

 

“Defaulted Account” means an Account in which there are Defaulted Receivables.

 

“Designated LIBOR Page” means Reuters Screen LIBOR01 page or such other page as may replace such page on that service or other service or services as may be nominated by the British Bankers’ Association for the purpose of displaying London interbank offered rates of U.S. dollar deposits.

 

“Designated Maturity” means, for any LIBOR Determination Date, one month.

 

  

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“Dilution” means any downward adjustment made by Servicer in the amount of any Receivable (a) because of a rebate, refund or billing error to an accountholder, (b) because such Receivable was created in respect of merchandise which was refused or returned by an accountholder or (c) for any other reason other than receiving Collections therefor or charging off such amount as uncollectible.

 

“Distribution Account” is defined in subsection 5.9(a).

 

“Distribution Date” means November 16, 2009 and the 15th day of each calendar month thereafter, or if such 15th day is not a Business Day, the next succeeding Business Day.

 

“Distribution Period” means, for any Distribution Date, the period from and including the Distribution Date immediately preceding such Distribution Date (or, in the case of the first Distribution Date, from and including the Closing Date) to but excluding such Distribution Date.

 

“Early Amortization Period” means the period commencing on the date on which a Trust Early Amortization Event or a Series 2009-VFN Early Amortization Event is deemed to occur and ending on the Series Termination Date.

 

“Eligible Investments” is defined in Annex A to the Indenture; provided that in no event shall any Eligible Investment be an equity security or cause the Trust to have any voting rights in respect of such Eligible Investment.

 

“Excess Spread Percentage” means, for any Monthly Period, a percentage equal to the Portfolio Yield for such Monthly Period, minus the Base Rate for such Monthly Period.

 

“Finance Charge Account” is defined in Section  5.9(a).

 

“Finance Charge Collections” means Collections of Finance Charge Receivables.

 

“Finance Charge Shortfall” is defined in Section 5.7.

 

 “Fixed Allocation Period” means either a Controlled Amortization Period or an Early Amortization Period.

 

“Group One” means Series 2009-VFN and each other Series specified in the related Indenture Supplement to be included in Group One.

 

“Investor Charge-Offs” is defined in Section 5.5.

 

“Investor Default Amount” means, with respect to any Defaulted Account, an amount equal to the product of (a) the Default Amount and (b) the Allocation Percentage on the day such Account became a Defaulted Account.

 

“Investor Finance Charge Collections” means, for any Monthly Period, an amount equal to the aggregate amount of Finance Charge Collections (including Net Recoveries treated as Finance Charge Collections) retained or deposited in the Finance Charge Account for Series 2009-VFN pursuant to clause 5.1(b)(i) for such Monthly Period.

 

  

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“Investor Principal Collections” means, for any Monthly Period, an amount equal to the aggregate amount of Principal Collections retained or deposited in the Principal Account for Series 2009-VFN pursuant to clause 5.1(b)(ii) for such Monthly Period.

 

“Investor Uncovered Dilution Amount” means an amount equal to the product of (x) the Series Allocation Percentage for the related Monthly Period (determined on a weighted average basis, if one or more Reset Dates occur during that Monthly Period), times (y) the aggregate Dilutions occurring during that Monthly Period as to which any deposit is required to be made to the Excess Funding Account pursuant to subsection 3.8(a) of the Transfer and Servicing Agreement but has not been made, provided that, to the extent the Transferor Amount is greater than zero at the time the deposit referred to in clause (y) is required to be made, the Investor Uncovered Dilution Amount for such amount to be deposited shall be deemed to be zero.

 

“LIBOR” means, for any Distribution Period, an interest rate per annum for each Distribution Period determined by the Indenture Trustee in accordance with the provisions of Section 5.12.

 

“LIBOR Determination Date” means (i) September 26, 2009 for the period from and including the Closing Date through and including November 15, 2009 and (ii) the second London Business Day prior to the commencement of the second and each subsequent Distribution Period.

 

“London Business Day” means any day on which dealings in deposits in United States dollars are transacted in the London interbank market.

 

“Mandatory Limited Amortization Amount” means, for any Transfer Date with respect to the Mandatory Limited Amortization Period (beginning with the Transfer Date in the Monthly Period following the Monthly Period in which the Mandatory Limited Amortization Period begins) and the Transfer Date in the Monthly Period in which the Controlled Amortization Period commences (unless the Non-Renewing Purchaser Principal Balance shall have been reduced to zero prior to such date), the lesser of (a) the Non-Renewing Purchaser Principal Balance as of the Mandatory Limited Amortization Date, divided by 12 (with the quotient rounded up to the nearest dollar) and (b) the excess of the Non-Renewing Purchaser Principal Balance over the Mandatory Limited Amortization Target.

 

“Mandatory Limited Amortization Date” means, the Purchase Expiration Date (without giving effect to a requested extension) but only if all of the following have occurred:  (x) the Transferor has requested an extension of such Purchase Expiration Date, (y) there are one or more Non-Renewing Ownership Groups and (z) the Issuer has not repaid the outstanding Non-Renewing Purchaser Principal Balance on or prior to the related Purchase Expiration Date (without giving effect to the requested extension).

 

“Mandatory Limited Amortization Period” means the period commencing on the first day of the first Monthly Period that commences on or after the Mandatory Limited Amortization Date and ending the earliest to occur of (x) the payment in full of the Non-Renewing Purchaser Principal Balance, (y) the commencement of the Controlled Amortization Period or the Early Amortization Period and (z) the Series Termination Date.

 

  

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“Mandatory Limited Amortization Shortfall” means, with respect to any Payment Date, the excess, if any, of (a) the Mandatory Limited Payment Amount for the preceding Payment Date over (b) the amounts paid pursuant to Section 5.4(b) with respect to Class A Monthly Principal and Class B Monthly Principal.

 

“Mandatory Limited Amortization Target” means, with respect to any Transfer Date, (a) the Non-Renewing Purchaser Principal Balance as of the Mandatory Limited Amortization Date less (b) the product (rounded up to the nearest dollar) of (i) a fraction, the numerator of which is the number of full Monthly Periods that have elapsed during the Mandatory Limited Amortization Period as of such Transfer Date (which, for the avoidance of doubt, shall exclude the Monthly Period in which such Transfer Date falls), and the denominator of which is 12 and (ii) the Non-Renewing Purchaser Principal Balance as of the Mandatory Limited Amortization Date.

 

“Mandatory Limited Payment Amount” means, with respect to any Transfer Date with respect to the Mandatory Limited Amortization Period, beginning with the Payment Date in the Monthly Period immediately following the Monthly Period in which the Mandatory Limited Amortization Period begins, and the Transfer Date in the Monthly Period in which the Controlled Amortization Period commences (unless the Non-Renewing Purchaser Principal Balance shall have been reduced to zero prior to such date), the sum of (a) the Mandatory Limited Amortization Amount for such Payment Date, plus (b) any existing Mandatory Limited Amortization Shortfall.

 

“Maximum Principal Balance” means the sum of (a) the Class A Maximum Principal Balance, (b) the Class M Maximum Principal Balance, (c) the Class B Maximum Principal Balance and (d) the Class C Maximum Principal Balance.

 

“Monthly Interest” means, for any Distribution Date, the sum of the Class A Monthly Interest, the Class M Monthly Interest, the Class B Monthly Interest and the Class C Monthly Interest for such Distribution Date.

 

“Monthly Period” means the period from and including the first day of the calendar month preceding a related Distribution Date to and including the last day of such calendar month; provided that the Monthly Period related to the November 2009 Distribution Date shall mean the period from and including the Closing Date to and including the last day of October 2009.

 

“Monthly Principal” means, on any Distribution Date, the sum of the Class A Monthly Principal, the Class M Monthly Principal, the Class B Monthly Principal and the Class C Monthly Principal with respect to such date.

 

“Monthly Principal Reallocation Amount” means, for any Monthly Period, an amount equal to the sum of:

 

(a) the lesser of (i) the Class A Required Amount and (ii) the greater of (A)(x) the sum of the Class M Principal Balance, the Class B Principal Balance and the Class C Principal Balance minus (y) the sum of (I) the amount of unreimbursed Investor Charge-Offs (after giving effect to

 

  

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Investor Charge-Offs for the related Monthly Period) and (II) unreimbursed Reallocated Principal Collections (as of the previous Distribution Date) and (B) zero; and

 

(b) the lesser of (i) the Class M Required Amount and (ii) the greater of (A)(x) the sum of the Class B Principal Balance and the Class  C Principal Balance minus (y) the sum of (I) the amount of unreimbursed Investor Charge-Offs (after giving effect to Investor Charge-Offs for the related Monthly Period) and (II) unreimbursed Reallocated Principal Collections (as of the previous Distribution Date and as required in clause (a) above for the current Monthly Period) and (B) zero; and

 

(c) the lesser of (i) the Class B Required Amount and (ii) the greater of (A)(x) the Class C Principal Balance minus (y) the sum of (I) the amount of unreimbursed Investor Charge-Offs (after giving effect to Investor Charge-Offs for the related Monthly Period) and (II) unreimbursed Reallocated Principal Collections (as of the previous Distribution Date and as required in clauses (a) and (b) above for the current Monthly Period) and (B) zero.

 

“Non-Renewing Ownership Group” means, commencing on the related Mandatory Limited Amortization Date, any Class A Ownership Group or Class M Ownership Group that has not consented to the extension of the Purchase Expiration Date when requested as described in the Class A Note Purchase Agreement or Class M Note Purchase Agreement, as applicable.

 

“Non-Renewing Purchaser Class A Principal Balance” means the outstanding principal balance of the Class A Notes allocated to Non-Renewing Ownership Groups.

 

“Non-Renewing Purchaser Class M Principal Balance” means the outstanding principal balance of the Class M Notes allocated to Non-Renewing Ownership Groups.

 

“Non-Renewing Purchaser Principal Balance” means the sum of the Non-Renewing Purchaser Class A Principal Balance, plus the Non-Renewing Purchaser Class M Principal Balance.

 

“Non-Renewing Purchaser Scheduled Distribution Date” means the Distribution Date falling in the twelfth month following the month in which the Mandatory Limited Amortization Period begins.

 

“Note Principal Balance” means, as of any Business Day, the sum of (a) the Class A Principal Balance, (b) the Class M Principal Balance, (c) the Class B Principal Balance and (d) the Class C Principal Balance.

 

“Note Purchase Agreements” means the Class A Note Purchase Agreement, the Class M Note Purchase Agreement, the Class B Note Purchase Agreement and the Class C Note Purchase Agreement.

 

“Noteholder Servicing Fee” is defined in Section 3.1.

 

“Optional Amortization Amount” is defined in subsection 4.1(b).

 

“Optional Amortization Date” is defined in subsection 4.1(b).

 

  

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“Optional Amortization Notice” is defined in subsection 4.1(b).

 

“Percentage Allocation” is defined in subsection 5.1(b)(ii)(y).

 

“Portfolio Yield” means, for any Monthly Period, the annualized percentage equivalent of a fraction, (a) the numerator of which is equal to (i) the Available Finance Charge Collections (excluding any Excess Finance Charge Collections), minus (ii) the Aggregate Investor Default Amount and the Investor Uncovered Dilution Amount for such Monthly Period and (b) the denominator of which is the Weighted Average Collateral Amount during such Monthly Period.

 

“Principal Account” is defined in subsection 5.9(a).

 

“Principal Collections” means Collections of Principal Receivables.

 

“Principal Shortfall” is defined in Section 5.8.

 

“Purchase Expiration Date” has the meaning specified in the Class A Note Purchase Agreement or the Class M Note Purchase Agreement, as applicable.

 

“Purchaser” means a “Purchaser” as defined in the Class A Note Purchase Agreement or the Class M Note Purchase Agreement, as the context requires.

 

“Quarterly Excess Spread Percentage” means (a) with respect to the November 2009 Distribution Date, the Excess Spread Percentage for such Distribution Date, (b) with respect to the December 2009 Distribution Date, the percentage equivalent of a fraction the numerator of which is the sum of (i) the Excess Spread Percentage for the November 2009 Distribution Date and (ii) the Excess Spread Percentage with respect to the December 2009 Distribution Date and the denominator of which is two, (c) with respect to the January 2010 Distribution Date, the percentage equivalent of a fraction the numerator of which is the sum of (i) the Excess Spread Percentage for the November 2009 Distribution Date (ii) the Excess Spread Percentage with respect to the December 2009 Distribution Date and (iii) the Excess Spread Percentage with respect to the January 2010 Distribution Date and the denominator of which is three and (d) with respect to the February 2010 Distribution Date and each Distribution Date thereafter, the percentage equivalent of a fraction the numerator of which is the sum of the Excess Spread Percentages determined with respect to such Distribution Date and the immediately preceding two Distribution Dates and the denominator of which is three.

 

“Quarterly Payment Rate Percentage” means, with respect to any Distribution Date, the percentage equivalent of a fraction, the numerator of which is the sum of the Payment Rate Percentages determined with respect to such Distribution Date and the immediately preceding two Distribution Dates, and the denominator of which is three.  For purposes of the foregoing calculation, the “Payment Rate Percentage” for any Distribution Date shall equal the percentage equivalent of a faction, the numerator which is the aggregate Collections received during the immediately preceding Monthly Period, and the denominator of which is the total Principal Receivables held by the Trust as of the opening of business on the first day of such immediately preceding Monthly Period.

 

  

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“Rating Agency” means, with respect to the Class A Notes, the Class M Notes and the Class B Notes, each of Fitch and DBRS.

 

“Rating Agency Condition” means, with respect to Series 2009-VFN and any action subject to such condition, (i) if any Class of Series 2009-VFN Notes is  rated by a Rating Agency designated for such Class other than Fitch, the notification in writing by each Rating Agency (other than Fitch) to Servicer that such action will not result in the Rating Agency reducing or withdrawing its then existing rating of such Class of Series 2009-VFN Notes, (ii) if Fitch is a Rating Agency for any Class of Series 2009-VFN Notes, 10 days’ prior written notice (or, if 10 days’ advance notice is impracticable, as much advance notice as is practicable) to Fitch delivered electronically to notifications.abs@fitchratings.com and (iii) if there are no Rating Agencies designated for any Class of Series 2009-VFN Notes, the consent of the holders of Series 2009-VFN Notes holding 66 2/3% of the Note Principal Balance of the Series 2009-VFN Notes which are not rated by a Rating Agency.

 

“Reallocated Principal Collections” means, for any Transfer Date, Investor Principal Collections applied in accordance with Section 5.6 in an amount not to exceed the Monthly Principal Reallocation Amount for the related Monthly Period.

 

“Reassignment Amount” means, for any Transfer Date, after giving effect to any deposits and distributions otherwise to be made on the related Distribution Date, the sum of (i) the Note Principal Balance on the related Distribution Date, plus (ii) Monthly Interest for the related Distribution Date and any Monthly Interest previously due but not distributed to the Series 2009-VFN Noteholders, plus (iii) the amount of Class B Additional Interest, if any, for the related Distribution Date and any Class B Additional Interest previously due but not distributed to the Series 2009-VFN Noteholders on a prior Distribution Date, plus (iv) the amount of Class C Additional Interest, if any, for the related Distribution Date and any Class C Additional Interest previously due but not distributed to the Series 2009-VFN Noteholders on a prior Distribution Date, plus (v) the amount of Class A Non-Use Fees and Class M Non-Use Fees, if any, for the related Distribution Date and any Class A Non-Use Fees and Class M Non-Use Fees previously due but not distributed to the Series 2009-VFN Noteholders on a prior Distribution Date, plus (vi) the amount of Class A Additional Amounts and Class M Additional Amounts, if any, for the related Distribution Date and any Class A Additional Amounts and Class M Additional Amounts previously due but not distributed to the Series 2009-VFN Noteholders on a prior Distribution Date.

 

“Record Date” means, for purposes of Series 2009-VFN with respect to any Distribution Date or Optional Amortization Date, the date falling five Business Days prior to such date.

 

“Reference Banks” means four major banks in the London interbank market selected by the Servicer.

 

“Refinancing Date” is defined in subsection 4.1(c).

 

“Related Class A Ownership Group” means, with respect to any Administrative Agent for, or any Purchaser in, a Class M Ownership Group, any Class A Ownership Group that also includes such Administrative Agent or Purchaser.

 

  

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“Related Class M Ownership Group” means, with respect to any Administrative Agent for, or any Purchaser in, a Class A Ownership Group, any Class M Ownership Group that also includes such Administrative Agent or Purchaser.

 

“Required Cash Collateral Amount” means, as of any Determination Date, an amount equal to the excess of (i) the total Principal Receivables outstanding relating to Bankrupt Merchants as of the end of the related Monthly Period over (ii) the product of (A) 20.0% and (B) the total Principal Receivables as of the end of the related Monthly Period.

 

“Required Cash Collateral Amount Trigger Date” means the date on which the Required Cash Collateral Amount shall first become an amount greater than zero.

 

“Required Class B Principal Balance” means, as of any date of determination, the product of the Class B Pro Rata Percentage times the Note Principal Balance.

 

“Required Class C Principal Balance” means, as of any date of determination, the product of the Class C Pro Rata Percentage times the Note Principal Balance.

 

“Required Class M Principal Balance” means, as of any date of determination, the product of the Class M Pro Rata Percentage times the Note Principal Balance.

 

“Required Draw Amount” is defined in subsection 5.10(c).

 

“Required Retained Transferor Percentage” means, for purposes of Series 2009-VFN, 8.0%.

 

“Reset Date” means:

 

(a)      each Addition Date relating to Supplemental Accounts;

 

(b)      each Removal Date on which, if any Series of Notes has been paid in full, Principal Receivables equal to the initial Collateral Amount or initial principal balance for that Series are removed from the Issuer;

 

(c)      each date on which there is an increase in the outstanding balance of any Variable Interest; and

 

(d)      each date on which a new Series or Class of Notes is issued.

 

“Revolving Period” means the period from and including the Closing Date to, but not including, the earlier of (a) the day the Controlled Amortization Period commences and (b) the day the Early Amortization Period commences.  For the avoidance of doubt, the Revolving Period shall not terminate upon the commencement of a Mandatory Limited Amortization Period; provided that for purposes of Section 8.5 of the Master Indenture, the Mandatory Limited Amortization Period shall be deemed to be an Amortization Period.

 

 “Series 2009-VFN” means the Series of Notes the terms of which are specified in this Indenture Supplement.

 

  

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“Series 2009-VFN Early Amortization Event” is defined in Section 7.1.

 

“Series 2009-VFN Note” means a Class A Note, a Class M Note, a Class B Note or a Class C Note.

 

“Series 2009-VFN Noteholder” means a Class A Noteholder, a Class M Noteholder, a Class B Noteholder or a Class C Noteholder.

 

“Series Account” means, (a) with respect to Series 2009-VFN, the Finance Charge Account, the Principal Account, the Distribution Account and the Cash Collateral Account, and (b) with respect to any other Series, the “Series Accounts” for such Series as specified in the Indenture and the applicable Indenture Supplement for such Series.

 

“Series Allocation Percentage” means, with respect to any Monthly Period, the percentage equivalent of a fraction, the numerator of which is the Allocation Percentage for Finance Charge Collections for that Monthly Period and the denominator of which is the sum of the Allocation Percentage for Finance Charge Receivables for all outstanding Series on such date of determination; provided that if one or more Reset Dates occur in a Monthly Period, the Series Allocation Percentages for the portion of the Monthly Period falling on and after each such Reset Date and prior to any subsequent Reset Date will be determined using a denominator which is equal to the sum of the numerators used in determining the Allocation Percentage for Finance Charge Receivables for all outstanding Series as of the close of business on the subject Reset Date.

 

“Series Servicing Fee Percentage” means 2.0% per annum.

 

“Series Termination Date” means the earliest to occur of (a) the Distribution Date falling in a Fixed Allocation Period on which the Collateral Amount is paid in full, (b) the termination of the Trust pursuant to the Agreement, (c) the Distribution Date on or closest to the date falling 46 months after the commencement of the Early Amortization Period and (d) the Distribution Date on or closest to the date falling 58 months after the commencement of the Controlled Amortization Period.

 

“Specified Transferor Amount” means, as of any date of determination, the Minimum Transferor Amount as of such date of determination.

 

“Target Amount” is defined in clause 5.1(b)(i).

 

“Transfer” means any sale, transfer, assignment, exchange, participation, pledge, hypothecation, rehypothecation, or other grant of a security interest in or disposition of, a Note.

 

“Weighted Average Class A Principal Balance” means, as to any Class A Ownership Tranche (or Class A Funding Tranche) for any Distribution Period, the quotient of (a) the summation of the portion of the Class A Principal Balance allocated to that Class A Ownership Tranche (or Class A Funding Tranche) determined as of each day in that Distribution Period, divided by (b) the number of days in that Distribution Period (or, if less, the number of days during that Distribution Period during which that Class A Ownership Tranche or Class A Funding Tranche was outstanding).

 

  

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“Weighted Average Class M Principal Balance” means, as to any Class M Ownership Tranche (or Class M Funding Tranche) for any Distribution Period, the quotient of (a) the summation of the portion of the Class M Principal Balance allocated to that Class M Ownership Tranche (or Class M Funding Tranche) determined as of each day in that Distribution Period, divided by (b) the number of days in that Distribution Period (or, if less, the number of days during that Distribution Period during which that Class M Ownership Tranche or Class M Funding Tranche was outstanding).

 

“Weighted Average Collateral Amount” means, for any Monthly Period, the quotient of (a) the summation of the Collateral Amount determined as of each day in that Monthly Period, divided by (b) the number of days in that Monthly Period.

 

(b)           Each capitalized term defined herein shall relate to the Series 2009-VFN Notes and no other Series of Notes issued by the Trust, unless the context otherwise requires.  All capitalized terms used herein and not otherwise defined herein have the meanings ascribed to them in Annex A to the Indenture, or, if not defined therein, in the Class Note Purchase Agreements or the Class M Note Purchase Agreement, as the context may require.

 

(c)           The interpretive rules specified in Section 1.2 of the Indenture also apply to this Indenture Supplement.  If any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in the Indenture, the terms and provisions of this Indenture Supplement shall be controlling.

 

ARTICLE III.

 

Noteholder Servicing Fee

 

Section 3.1                      Servicing Compensation.  The share of the Servicing Fee allocable to Series 2009-VFN for any Transfer Date (the “Noteholder Servicing Fee”) shall be equal to one-twelfth of the product of (a) the Series Servicing Fee Percentage and (b) the Weighted Average Collateral Amount for the preceding Monthly Period; provided, however, that with respect to the first Transfer Date, the Noteholder Servicing Fee shall instead equal 33/360 of such product.  The remainder of the Servicing Fee shall be paid by the holders of the Transferor Interest or the noteholders of other Series (as provided in the related Indenture Supplements), and in no event shall the Trust, the Indenture Trustee or the Series 2009-VFN Noteholders be liable for the share of the Servicing Fee to be paid by the holders of the Transferor Interest or the noteholders of any other Series.

 

ARTICLE IV.

 

Variable Funding Mechanics

 

Section 4.1                      Variable Funding Mechanics

 

(a)           Class A Incremental Fundings.  From time to time during the Revolving Period and prior to the Purchase Expiration Date, Transferor and Servicer may notify one or more Class A Administrative Agents that a Class A Incremental Funding will occur, subject to the conditions of the Class A Note Purchase Agreement, with respect to the related Class A

 

  

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Ownership Group(s) on the next or any subsequent Business Day by delivering a Notice of Incremental Funding (as defined in the Class A Note Purchase Agreement) executed by Transferor and Servicer to the Class A Administrative Agent for each such Class A Ownership Group, specifying the amount of such Class A Incremental Funding and the Business Day upon which such Class A Incremental Funding is to occur, provided that a Class A Incremental Funding shall not be requested from a Class A Administrative Agent for an Ownership Group that is a Non-Renewing Ownership Group if the Incremental Funding would occur on or after the Purchase Expiration Date (without giving effect to any requested extension of the Purchase Expiration to which the related Non-Renewing Ownership Group did not consent). The amount of Class A Incremental Funding allocated to each Class A Ownership Group, together with the amount of the Class M Incremental Funding allocated to the Related Class M Ownership Group to be made on the same date, shall be a minimum amount of $1,000,000 or a higher integral multiple thereof for each Class A Ownership Group and the Related Class M Ownership Group, except that a Class A Incremental Funding may be requested in the entire remaining Class A Purchase Limit of the related Class A Ownership Group. Upon any Class A Incremental Funding, the Class A Principal Balance, the Collateral Amount, the Note Principal Balance and the Allocation Percentage shall increase as provided herein.  For each Class A Incremental Funding, the Class A Principal Balance shall increase in an amount equal to the Class A Incremental Principal Balance.  The increase in the Class A Principal Balance shall be allocated to the Class A Notes held by the Class A Noteholders from which purchase prices were received in connection with the Class A Incremental Funding in proportion to the amount of such purchase prices received.

 

(b)           Optional Amortization.  On any Business Day in the Revolving Period or the Controlled Amortization Period, Transferor may cause Servicer to provide notice to the Indenture Trustee, the Class B Noteholders, the Class C Noteholders,  the Class A Administrative Agents for affected Class A Ownership Groups and the Class M Administrative Agents for affected Class M Ownership Groups (an “Optional Amortization Notice”) at least two Business Days prior to any Business Day (the “Optional Amortization Date”) stating its intention to cause a full or partial amortization of the Class A Notes, the Class M Notes, the Class B Notes and the Class C Notes with Available Principal Collections on the Optional Amortization Date, in full or in part, in an amount (the “Optional Amortization Amount”), which shall be allocated among the Class A Notes, the Class M Notes, the Class B Notes and the Class C Notes, based on the Class A Pro Rata Percentage, the Class M Pro Rata Percentage, the Class B Pro Rata Percentage and the Class C Pro Rata Percentage, respectively; provided that if as a result of the payment of a Mandatory Limited Payment Amount, the Class B Principal Balance exceeds the Required Class B Principal Balance or the Class C Principal Balance exceeds the Required Class C Principal Balance, the Optional Amortization Amount may be allocated on a non-pro rata basis among the Classes of Series 2009-VFN Notes in order to reduce the Class B Principal Balance to an amount not less than the Required Class B Principal Balance and to reduce the Class C Principal Balance to an amount not less than the Required Class C Principal Balance.  The portion of the Optional Amortization Amount allocated to any Class A Ownership Group and the Related Class M Ownership Group shall be in an aggregate amount not less than $1,000,000 or a higher integral multiple thereof, except that the Optional Amortization Amount allocated to any Class A Ownership Group may equal the entire Principal Balance of the related Class A Note for such Class A Ownership Group and that the Optional Amortization Amount allocated to any Class M Ownership Group may equal the entire Principal Balance of the related Class M Note

 

  

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for such Class M Ownership Group. The Optional Amortization Notice shall state the Optional Amortization Date, the Optional Amortization Amount and the allocation of such Optional Amortization Amount among the various Classes, Class A Ownership Groups and Class M Ownership Groups; provided that if the Administrative Agent for, or any Purchaser in, a Class A Ownership Group to which a portion of the Optional Amortization Amount is allocated is also the Administrative Agent for, or a Purchaser in, a Related Class M Ownership Group, then a corresponding portion of the Optional Amortization Amount must be allocated to the Related Class M Ownership Group so that the proportion of the Class A Principal Amount funded by such Class A Ownership Group to the Class M Principal Balance funded by the Related Class M Ownership Group would not change as a result of the allocation of the Optional Amortization Amount.  The Optional Amortization Amount shall be paid from Shared Principal Collections pursuant to Section 8.5 of the Master Indenture and Section 5.8.  Accrued interest and any Class A Additional Amounts, payable to each affected Class A Ownership Group shall be payable on the first Distribution Date on or after the related Optional Amortization Date.  Accrued interest and any Class M Additional Amounts, payable to each affected Class M Ownership Group shall be payable on the first Distribution Date on or after the related Optional Amortization Date.  On the Business Day prior to each Optional Amortization Date, Servicer shall instruct the Indenture Trustee in writing (which writing shall be substantially in the form of Exhibit B) to withdraw from the Collection Account and deposit in the Distribution Account, to the extent of the available funds held therein as Shared Principal Collections pursuant to Section 5.8, an amount sufficient to pay the Optional Amortization Amount on that Optional Amortization Date, and the Indenture Trustee, acting in accordance with such instructions, shall on such Business Day make such withdrawal and deposit.

 

(c)           Refinanced Optional Amortization.  On any Business Day in the Revolving Period or the Controlled Amortization Period, Transferor may, with the consent of each affected Series 2009-VFN Noteholder, cause Servicer to provide notice to the Indenture Trustee and all of the Series 2009-VFN Noteholders at least five Business Days prior to any Business Day (the “Refinancing Date”) stating its intention to cause the Series 2009-VFN Notes to be prepaid in full or in part on the Refinancing Date by causing all or a portion of the Collateral Amount to be conveyed to one or more Persons (who may be the Noteholders of a new Series issued substantially contemporaneously with such prepayment) for a cash purchase price in an amount equal to the sum of (i) the Collateral Amount (or the portion thereof that is being conveyed), plus (ii) accrued and unpaid interest on the Collateral Amount (or the portion thereof that is being conveyed) through the Refinancing Date, plus (iii) any accrued and unpaid Class A Non-Use Fees, Class M Non-Use Fees, Class A Additional Amounts and Class M Additional Amounts in respect of the Collateral Amount (or portion thereof that is being conveyed) through the Refinancing Date. In the case of any such conveyance, the purchase price shall be deposited in the Collection Account and shall be distributed to the applicable Series 2009-VFN Noteholders on a pro rata basis in accordance with the Class A Pro Rata Percentage, Class M Pro Rata Percentage, Class B Pro Rata Percentage and Class C Pro Rata Percentage and, with respect to the Class A Notes, based on the Class A Ownership Group Percentage for each Class A Ownership Group and with respect to the Class M Notes, based on the Class A Ownership Group Percentage for each Class M Ownership Group, on the Refinancing Date in accordance with the terms of this Indenture Supplement and the Indenture; provided that after giving effect to such conveyance and application of the purchase price (i) the Class M Principal Balance shall not be less than the Required Class M Principal Balance, (ii) the Class B Principal Balance shall not be

 

  

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less than the Required Class B Principal Balance, and (iii) the Class C Principal Balance shall not be less than the Required Class C Principal Balance.

 

(d)           Class M Incremental Fundings.  From time to time during the Revolving Period and prior to the Purchase Expiration Date, Transferor and Servicer may notify one or more Class M Administrative Agents that a Class M Incremental Funding will occur, subject to the conditions of the Class M Note Purchase Agreement, with respect to the related Class M Ownership Group(s) on the next or any subsequent Business Day by delivering a Notice of Incremental Funding (as defined in the Class M Note Purchase Agreement) executed by Transferor and Servicer to the Class M Administrative Agent for each such Class M Ownership Group, specifying the amount of such Class M Incremental Funding and the Business Day upon which such Class M Incremental Funding is to occur; provided that a Class M Incremental Funding shall not be requested from a Class M Administrative Agent for an Ownership Group that is a Non-Renewing Ownership Group if the Incremental Funding would occur on or after the Purchase Expiration Date (without giving effect to any requested extension of the Purchase Expiration to which the related Non-Renewing Ownership Group did not consent). The amount of Class M Incremental Funding allocated to each Class M Ownership Group, together with the amount of the Class A Incremental Funding allocated to the related Class A Ownership Group to be made on the same date, shall be a minimum amount of $1,000,000 or a higher integral multiple thereof for each Class M Ownership Group and the Related Class A Ownership Group, except that a Class M Incremental Funding may be requested in the entire remaining Class M Purchase Limit of the Related Class M Ownership Group. Upon any Class M Incremental Funding, the Class M Principal Balance, the Collateral Amount, the Note Principal Balance and the Allocation Percentage shall increase as provided herein.  For each Class M Incremental Funding, the Class M Principal Balance shall increase in an amount equal to the Class M Incremental Principal Balance.  The increase in the Class M Principal Balance shall be allocated to the Class M Notes held by the Class M Noteholders from which purchase prices were received in connection with the Class M Incremental Funding in proportion to the amount of such purchase prices received.

 

(e)           Class B Incremental Fundings.  From time to time during the Revolving Period, Transferor and Servicer may, to the extent permitted by the applicable Class B Note Purchase Agreement, notify the Class B Noteholders that a Class B Incremental Funding will occur, subject to the conditions, if any, of the applicable Class B Note Purchase Agreements, on any Business Day by delivering a Notice of Class B Incremental Funding (as defined in the applicable Class B Note Purchase Agreement) executed by Transferor and Servicer to the Class B Interest Holder, specifying the amount of such Class B Incremental Funding and the Business Day upon which such Incremental Funding is to occur (which shall fall at least three Business Days after the date of such Notice).  Upon any Class B Incremental Funding, the Class B Principal Balance, the Collateral Amount, the Note Principal Balance and the Allocation Percentage shall increase as provided herein.

 

(f)           Class C Incremental Fundings.  From time to time during the Revolving Period, Transferor and Servicer may, to the extent permitted by the Class C Note Purchase Agreement, notify the Class C Noteholders that a Class C Incremental Funding will occur, subject to the conditions, if any, of the Class C Note Purchase Agreement, on any Business Day by delivering a Notice of Class C Incremental Funding (as defined in the Class C Note Purchase Agreement)

 

  

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executed by Transferor and Servicer to the Class C Noteholder, specifying the amount of such Class C Incremental Funding and the Business Day upon which such Class C Incremental Funding is to occur (which shall fall at least three Business Days after the date of such notice).  Upon any Class C Incremental Funding, the Class C Principal Balance, the Collateral Amount, the Note Principal Balance and the Allocation Percentage shall increase as provided herein.

 

ARTICLE V.

 

Rights of Series 2009-VFN Noteholders and Allocation and Application of Collections

 

Section 5.1                      Collections and Allocations

 

(a)           Allocations.  Finance Charge Collections, Principal Collections and Defaulted Receivables allocated to Series 2009-VFN pursuant to Article VIII of the Indenture shall be allocated and distributed as set forth in this Article.

 

(b)           Allocations to the Series 2009-VFN Noteholders.  The Servicer shall on the Date of Processing, allocate to the Series 2009-VFN Noteholders the following amounts as set forth below:

 

(i)           Allocations of Finance Charge Collections. The Servicer shall allocate to the Series 2009-VFN Noteholders an amount equal to the product of (A) the Allocation Percentage and (B) the aggregate Finance Charge Collections processed on such Date of Processing and shall deposit such amount into the Finance Charge Account, provided that, with respect to each Monthly Period falling in the Revolving Period (and with respect to that portion of each Monthly Period in the Controlled Amortization Period falling on or after the day on which Collections of Principal Receivables equal to the Controlled Amortization Amount have been allocated pursuant to clause 5.1(b)(ii)), so long as the Available Cash Collateral Amount is not less than the Required Cash Collateral Amount on such Date of Processing, Collections of Finance Charge Receivables shall be transferred into the Finance Charge Account only until such time as the aggregate amount so deposited equals the product of (x) 1.5 and (y) the sum (the “Target Amount”) of (A) the Monthly Interest for the related Distribution Date, (B) the Class A Non-Use Fee and Class M Non-Use Fee, if any, (C) the Class A Additional Amounts and the Class M Additional Amounts, if any, (D)  if Comenity Capital Bank is not the Servicer, the Noteholder Servicing Fee (and if Comenity Capital Bank is the Servicer, then amounts that otherwise would have been transferred into the Finance Charge Account pursuant to this clause (D) shall instead by returned to Comenity Capital Bank as payment of the Noteholder Servicing Fee), (E) any amount required to be deposited in the Cash Collateral Account on the related Transfer Date and (F) the sum of the Investor Default Amounts for the prior Monthly Period and any Investor Uncovered Dilution Amount for the prior Monthly Period; provided further, that, notwithstanding the preceding proviso, if on any Business Day the Servicer determines that the Target Amount for a Monthly Period exceeds the Target Amount for that Monthly Period as previously calculated by Servicer, then (x) Servicer shall (on the same Business Day) inform Transferor of such determination, and (y) within two Business Days of receiving such notice Transferor shall deposit into the Finance Charge Account funds in an amount

 

  

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equal to the amount of Collections of Finance Charge Receivables allocated to the Noteholders for that Monthly Period but not deposited into the Finance Charge Account due to the operation of the preceding proviso (but not in excess of the amount required so that the aggregate amount deposited for the subject Monthly Period equals the Target Amount); and provided, further, if on any Transfer Date the Transferor Amount is less than zero after giving effect to all transfers and deposits on that Transfer Date, Transferor shall, on that Transfer Date, deposit into the Principal Account funds in an amount equal to the amounts of Available Finance Charge Collections that are required to be treated as Available Principal Collections pursuant to clause 5.4(a)(viii) and (ix) but are not available from funds in the Finance Charge Account as a result of the operation of second preceding proviso.

 

With respect to any Monthly Period when deposits of Collections of Finance Charge Receivables into the Finance Charge Account are limited to deposits up to 1.5 times the Target Amount in accordance with clause (i) above, notwithstanding such limitation and notwithstanding the provisions of Section 8.4(a) of the Indenture: (1) Reallocated Principal Collections for the related Transfer Date shall be calculated as if the full amount of Finance Charge Collections allocated to the Noteholders during that Monthly Period had been deposited in the Finance Charge Account and applied on such Transfer Date in accordance with subsection 5.4(a); and (2) Collections of Finance Charge Receivables released to Transferor pursuant to such Section 5.1(b)(i) shall be deemed, for purposes of all calculations under this Indenture Supplement, to have been retained in the Finance Charge Account and applied to the items specified in subsections 5.4(a) to which such amounts would have been applied (and in the priority in which they would have been applied) had such amounts been available in the Finance Charge Account on such Transfer Date.  To avoid doubt, the calculations referred to in the preceding clause (2) include the calculations required by clause (b) of the definition of Collateral Amount and by the definition of Portfolio Yield.

 

(ii)           Allocations of Principal Collections.  The Servicer shall allocate to the Series 2009-VFN Noteholders the following amounts as set forth below:

 

(x)           Allocations During the Revolving Period.

 

(1)           During the Revolving Period an amount equal to the product of the Allocation Percentage and the aggregate amount of Principal Collections processed on such Date of Processing, shall be allocated to the Series 2009-VFN Noteholders and first, retained in the Principal Account to the extent necessary, to pay the Mandatory Limited Payment Amount on the related Distribution Date, second, if any other Principal Sharing Series is outstanding and in its accumulation period or amortization period, retained in the Principal Account for application, to the extent necessary, as Shared Principal Collections for other Principal Sharing Series on the related Distribution Date, third, retained in the Principal Account, to the extent necessary, to pay any Optional Amortization Amount on the related Optional Amortization Date, fourth, deposited in the Excess Funding Account to the extent necessary so that

 

  

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the Transferor Amount is not less than the Minimum Transferor Amount and fifth, paid to the holders of the Transferor Interest.

 

(2)           With respect to each Monthly Period falling in the Revolving Period, to the extent that Collections of Principal Receivables allocated to the Series 2009-VFN Noteholders pursuant to this clause 5.1(b)(ii) are paid to Transferor, Transferor shall make an amount equal to the Reallocated Principal Collections for the related Transfer Date available on that Transfer Date for application in accordance with Section 5.6.

 

(y)           Allocations During the Controlled Amortization Period.  During the Controlled Amortization Period an amount equal to the product of the Allocation Percentage and the aggregate amount of Principal Collections processed on such Date of Processing (the product for any such date is hereinafter referred to as a “Percentage Allocation”) shall be allocated to the Series 2009-VFN Noteholders and transferred to the Principal Account until applied as provided herein; provided, however, that if the sum of such Percentage Allocation and all preceding Percentage Allocations with respect to the same Monthly Period exceeds the Controlled Payment Amount during the Controlled Amortization Period for the related Distribution Date, then such excess shall not be treated as a Percentage Allocation and shall be first, if any other Principal Sharing Series is outstanding and in its accumulation period or amortization period, retained in the Principal Account for application, to the extent necessary, as Shared Principal Collections to other Principal Sharing Series on the related Distribution Date, second, retained in the Principal Account to pay any Optional Amortization Amount on the related Optional Amortization Date, third, deposited in the Excess Funding Account to the extent necessary so that the Transferor Amount is not less than the Minimum Transferor Amount and fourth, paid to the holders of the Transferor Interest.

 

(z)           Allocations During the Early Amortization Period.  During the Early Amortization Period, an amount equal to the product of  the Allocation Percentage and the aggregate amount of Principal Collections processed on such Date of Processing shall be allocated to the 2009-VFN Noteholders and transferred to the Principal Account until applied as provided herein; provided, however, that after the date on which an amount of such Principal Collections equal to the Note Principal Balance has been deposited into the Principal Account such amount shall be first, if any other Principal Sharing Series is outstanding and in its accumulation period or amortization period, retained in the Principal Account for application, to the extent necessary, as Shared Principal Collections to other Principal Sharing Series on the related Distribution Date, second deposited in the Excess Funding Account to the extent necessary so that the Transferor Amount is not less than the Minimum Transferor Amount and third paid to the holders of the Transferor Interest.

 

  

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(c)           During any period when Servicer is permitted by Section 8.4 of the Indenture to make a single monthly deposit to the Collection Account, amounts allocated to the Noteholders pursuant to Sections 5.1(a) and (b) with respect to any Monthly Period need not be deposited into the Collection Account or any Series Account prior to the related Transfer Date, and, when so deposited, (x) may be deposited net of any amounts required to be distributed to Transferor and, if Comenity Capital Bank is Servicer, to Servicer, and (y) shall be deposited into the Finance Charge Account (in the case of Collections of Finance Charge Receivables) and the Principal Account (in the case of Collections of Principal Receivables (not including any Shared Principal Collections allocated to Series 2009-VFN pursuant to Section 8.5 of the Indenture)).

 

(d)           On any date, Servicer may direct the Indenture Trustee to withdraw from the Collection Account or any Series Account any amounts inadvertently deposited in such account that should have not been so deposited.

 

Section 5.2                      Determination of Monthly Interest.

 

(a)           Pursuant to the Class A Note Purchase Agreement, certain Class A Ownership Tranches may from time to time be divided into one or more subdivisions (each, as further specified in the Class A Note Purchase Agreement, a “Class A Funding Tranche”) which will accrue interest on different bases.  The amount of monthly interest (“Class A Monthly Interest”) distributable from the Distribution Account with respect to the Class A Notes on any Distribution Date shall be an amount equal to the aggregate amount of interest that accrued over that Distribution Period on each Class A Funding Tranche (plus the aggregate amount of interest that accrued over any prior Distribution Period on any Class A Funding Tranche and has not yet been paid, plus additional interest (to the extent permitted by law) on such overdue amounts at the weighted average interest rate applicable to the related Class A Ownership Tranche during that Distribution Period, and minus any overpayment of interest on the prior Distribution Date as a result of the estimation referred to below), all as determined by Servicer on the related Determination Date. For purposes of such determination, Servicer shall rely upon information provided by the various Class A Administrative Agents pursuant to the Class A Note Purchase Agreement including estimates of the interest to accrue on any Class A Funding Tranche through the related Distribution Date. The interest accrued on any Class A Ownership Tranche (or related Class A Funding Tranche) for any Distribution Period shall be determined using the applicable Class A Tranche Rate and shall equal the product of (x) the Weighted Average Class A Principal Balance for that Class A Ownership Tranche (or Class A Funding Tranche), (y) the applicable Class A Tranche Rate and (z) the applicable Day Count Fraction.

 

(b)           Pursuant to the Class M Note Purchase Agreement, certain Class M Ownership Tranches may from time to time be divided into one or more subdivisions (each, as further specified in the Class M Note Purchase Agreement, a “Class M Funding Tranche”) which will accrue interest on different bases.  The amount of monthly interest (“Class M Monthly Interest”) distributable from the Distribution Account with respect to the Class M Notes on any Distribution Date shall be an amount equal to the aggregate amount of interest that accrued over that Distribution Period on each Class M Funding Tranche (plus the aggregate amount of interest that accrued over any prior Distribution Period on any Class M Funding Tranche and has not yet been paid, plus additional interest (to the extent permitted by law) on such overdue amounts at the weighted average interest rate applicable to the related Class M Ownership Tranche during

 

  

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that Distribution Period, and minus any overpayment of interest on the prior Distribution Date as a result of the estimation referred to below), all as determined by Servicer on the related Determination Date. For purposes of such determination, Servicer shall rely upon information provided by the various Class M Administrative Agents pursuant to the Class M Note Purchase Agreement including estimates of the interest to accrue on any Class M Funding Tranche through the related Distribution Date. The interest accrued on any Class M Ownership Tranche (or related Class M Funding Tranche) for any Distribution Period shall be determined using the applicable Class M Tranche Rate and shall equal the product of (x) the Weighted Average Class M Principal Balance for that Class M Ownership Tranche (or Class M Funding Tranche), (y) the applicable Class M Tranche Rate and (z) the applicable Day Count Fraction.

 

(c)           The amount of monthly interest (“Class B Monthly Interest”) distributable from the Distribution Account with respect to the Class B Notes on any Distribution Date shall be an amount equal to the product of (i) (A) a fraction, the numerator of which is the actual number of days in the related Distribution Period and the denominator of which is 360, times (B) the Class B Note Interest Rate in effect with respect to the related Distribution Period and (ii) the average Class B Principal Balance outstanding during the preceding Monthly Period.

 

On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the “Class B Deficiency Amount”), of (x) the aggregate amount accrued pursuant to this subsection 5.2(c) as of the prior Distribution Date over (y) the amount of funds actually transferred from the Distribution Account for payment of such amount.  If the Class B Deficiency Amount for any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class B Deficiency Amount is fully paid, an additional amount (“Class B Additional Interest”) equal to the product of (i) (A) a fraction, the numerator of which is the actual number of days in the related Distribution Period and the denominator of which is 360, times (B) the Class B Note Interest Rate in effect with respect to the related Distribution Period and (ii) such Class B Deficiency Amount (or the portion thereof which has not been paid to the Class B Noteholders) shall be payable as provided herein with respect to the Class B Notes.  Notwithstanding anything to the contrary herein, Class B Additional Interest shall be payable or distributed to the Class B Noteholders only to the extent permitted by applicable law.

 

(d)           The amount of monthly interest (“Class C Monthly Interest”) distributable from the Distribution Account with respect to the Class C Notes on any Distribution Date shall be an amount equal to the product of (i) (A) a fraction, the numerator of which is the actual number of days in the related Distribution Period and the denominator of which is 360, times (B) the Class C Note Interest Rate in effect with respect to the related Distribution Period and (ii) the average Class C Principal Balance outstanding during the preceding Monthly Period.

 

On the Determination Date preceding each Distribution Date, the Servicer shall determine the excess, if any (the “Class C Deficiency Amount”), of (x) the aggregate amount accrued pursuant to this subsection 5.2(d) as of the prior Distribution Date over (y) the amount of funds actually transferred from the Distribution Account for payment of such amount.  If the Class C Deficiency Amount for any Distribution Date is greater than zero, on each subsequent Distribution Date until such Class C Deficiency Amount is fully paid, an additional amount (“Class C Additional Interest”) equal to the product of (i) (A) a fraction, the numerator of which is the actual number of days in the related Distribution Period and the denominator of which is

 

  

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360, times (B) the Class C Note Interest Rate in effect with respect to the related Distribution Period and (ii) such Class C Deficiency Amount (or the portion thereof which has not been paid to the Class C Noteholders) shall be payable as provided herein with respect to the Class C Notes.  Notwithstanding anything to the contrary herein, Class C Additional Interest shall be payable or distributed to the Class C Noteholders only to the extent permitted by applicable law.

 

(e)           If any distribution of principal is made with respect to any Class A Funding Tranche funded through the issuance of commercial paper notes or accruing interest based on LIBOR other than on (i) the day on which the related funding source, to the extent subject to a contracted maturity date, matures or (ii) a Distribution Date, or if the Class A Principal Balance of any Class A Ownership Tranche is reduced by an Optional Amortization Amount in an amount greater than the amount (if any) specified in the Class A Note Purchase Agreement with respect to that Class A Ownership Tranche without the applicable number (as specified in the Class A Note Purchase Agreement) of Business Days’ prior notice to the affected Series 2009-VFN Noteholder, and in either case (i) the interest paid by the Class A Noteholder holding that Class A Funding Tranche to providers of funds to it to fund that Class A Funding Tranche exceeds (ii) returns earned by that Class A Noteholder through the related Distribution Date (or, if earlier, the maturity date for the related funding source) by redeployment of such funds in highly rated short-term money market instruments, then, upon written notice (which notice shall be signed by an officer of that Class A Noteholder with knowledge of and responsibility for such matters and shall set forth in reasonable detail the basis for requesting the amounts) from such Class A Noteholder to Servicer, such Class A Noteholder shall be entitled to receive additional amounts in the amount of such excess (each, a “Class A Breakage Payment”) on the Distribution Date on or after the date such distribution of principal is made with respect to that Class A Funding Tranche, so long as such written notice is received not later than noon, New York City time, on the Transfer Date related to such Distribution Date. For purposes of calculations under this paragraph, any payment received by a Class A Noteholder later than noon, New York City time, on any day shall be deemed to have been received on the next day.

 

(f)           If any distribution of principal is made with respect to any Class M Funding Tranche funded through the issuance of commercial paper notes or accruing interest based on LIBOR other than on (i) the day on which the related funding source, to the extent subject to a contracted maturity date, matures or (ii) a Distribution Date, or if the Class M Principal Balance of any Class M Ownership Tranche is reduced by an Optional Amortization Amount in an amount greater than the amount (if any) specified in the Class M Note Purchase Agreement with respect to that Class M Ownership Tranche without the applicable number (as specified in the Class M Note Purchase Agreement) of Business Days’ prior notice to the affected Series 2009-VFN Noteholder, and in either case (i) the interest paid by the Class M Noteholder holding that Class M Funding Tranche to providers of funds to it to fund that Class M Funding Tranche exceeds (ii) returns earned by that Class M Noteholder through the related Distribution Date (or, if earlier, the maturity date for the related funding source) by redeployment of such funds in highly rated short-term money market instruments, then, upon written notice (which notice shall be signed by an officer of that Class M Noteholder with knowledge of and responsibility for such matters and shall set forth in reasonable detail the basis for requesting the amounts) from such Class M Noteholder to Servicer, such Class M Noteholder shall be entitled to receive additional amounts in the amount of such excess (each, a “Class M Breakage Payment”) on the Distribution Date on or after the date such distribution of principal is made with respect to that Class M

 

  

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Funding Tranche, so long as such written notice is received not later than noon, New York City time, on the Transfer Date related to such Distribution Date. For purposes of calculations under this paragraph, any payment received by a Class M Noteholder later than noon, New York City time, on any day shall be deemed to have been received on the next day.

 

Section 5.3                      Determination of Class A Monthly Principal, Class M Monthly Principal, Class B Monthly Principal and Class C Monthly Principal.

 

(a)           The amount of monthly principal (the “Class A Monthly Principal”) to be transferred from the Principal Account with respect to the Class A Notes (i) on each Transfer Date, beginning with the Transfer Date in the Monthly Period following the Monthly Period in which the Controlled Amortization Period begins (unless an Early Amortization Period shall have commenced prior to the end of the Monthly Period immediately preceding such Transfer Date), shall be equal to the least of (w) the Class A Pro Rata Percentage of the Available Principal Collections on deposit in the Principal Account with respect to such Transfer Date, (x) the Class A Pro Rata Percentage of the Controlled Payment Amount for such Transfer Date, (y) the Collateral Amount (after taking into account any adjustments to be made on such Transfer Date and the related Distribution Date pursuant to Sections 5.5 and 5.6), and (z) the Class A Principal Balance, (ii) on each Transfer Date, beginning with the Transfer Date in the Monthly Period following the Monthly Period in which the Early Amortization Period begins, shall be equal to the least of (x) the Available Principal Collections on deposit in the Principal Account with respect to such Transfer Date, (y) the Collateral Amount (after taking into account any adjustments to be made on such Transfer Date and the related Distribution Date pursuant to Sections 5.5 and 5.6), and (z) the Class A Principal Balance and (iii) on each Transfer Date, beginning with the Transfer Date in the Monthly Period following the Monthly Period in which the Mandatory Limited Amortization Period begins and ending on the Transfer Date in the Monthly Period in which the Controlled Amortization Period begins (unless an Early Amortization Period shall have commenced prior to the end of the Monthly Period immediately preceding such Transfer Date), shall be equal to the least of (x) the Class A Senior Percentage of the Available Principal Collections on deposit in the Principal Account with respect to such Transfer Date, (y) prior to the Non-Renewing Purchaser Scheduled Distribution Date, the Class A Senior Percentage of the Mandatory Limited Payment Amount for such Transfer Date, and (z) the Non-Renewing Purchaser Class A Principal Balance.

 

(b)           The amount of monthly principal (the “Class M Monthly Principal”) to be transferred from the Principal Account with respect to the Class M Notes (i) on each Transfer Date, beginning with the Transfer Date in the Monthly Period following the Monthly Period in which the Controlled Amortization Period begins (unless an Early Amortization Period shall have commenced prior to the end of the Monthly Period immediately preceding such Transfer Date), shall be equal to the least of (w) the Class M Pro Rata Percentage of the Available Principal Collections on deposit in the Principal Account with respect to such Transfer Date, (x) the Class M Pro Rata Percentage of the Controlled Payment Amount for such Transfer Date, (y) the Collateral Amount (after taking into account any adjustments to be made on such Transfer Date and the related Distribution Date pursuant to Sections 5.5 and 5.6 and the payment of Class A Monthly Principal), and (z) the Class M Principal Balance, (ii) on each Transfer Date, beginning with the Transfer Date in the Monthly Period following the Monthly Period in which the Early Amortization Period begins, shall be equal to the least of (x) the excess of the

 

  

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Available Principal Collections on deposit in the Principal Account with respect to such Transfer Date over the portion of such Available Principal Collections applied to Class A Monthly Principal on such Transfer Date, (y) the Collateral Amount (after taking into account any adjustments to be made on such Transfer Date and the related Distribution Date pursuant to Sections 5.5 and 5.6 and the payment of the Class A Monthly Principal), and (z) the Class M Principal Balance and (iii) on each Transfer Date, beginning with the Transfer Date in the Monthly Period following the Monthly Period in which the Mandatory Limited Amortization Period and ending on the Transfer Date in the Monthly Period in which the Controlled Amortization Period begins (unless an Early Amortization Period shall have commenced prior to the end of the Monthly Period immediately preceding such Transfer Date), shall be equal to the least of (x) the Class M Senior Percentage of the Available Principal Collections on deposit in the Principal Account with respect to such Transfer Date, (y) prior to the Non-Renewing Purchaser Scheduled Distribution Date, the Class M Percentage of the Mandatory Limited Payment Amount for such Transfer Date, and (z) the Non-Renewing Purchaser Class M Principal Balance.

 

(c)           The amount of monthly principal (the “Class B Monthly Principal”) to be transferred from the Principal Account with respect to the Class B Notes (i) on each Transfer Date, beginning with the Transfer Date in the Monthly Period following the Monthly Period in which the Controlled Amortization Period begins (unless an Early Amortization Period shall have commenced prior to the end of the Monthly Period immediately preceding such Transfer Date), shall be equal to the least of (w) the Class B Pro Rata Percentage of the Available Principal Collections on deposit in the Principal Account with respect to such Transfer Date, (x) the Class B Pro Rata Percentage of the Controlled Payment Amount for such Transfer Date, (y) the Collateral Amount (after taking into account any adjustments to be made on such Transfer Date and the related Distribution Date pursuant to Sections 5.5 and 5.6 and the payment of Class A Monthly Principal and Class M Monthly Principal), and (z) the Class B Principal Balance, and (ii) on each Transfer Date, beginning with the Transfer Date in the Monthly Period following the Monthly Period in which the Early Amortization Period begins, shall be equal to the least of (x) the excess of the Available Principal Collections on deposit in the Principal Account with respect to such Transfer Date over the portion of such Available Principal Collections applied to Class A Monthly Principal and Class M Monthly Principal on such Transfer Date, (y) the Collateral Amount (after taking into account any adjustments to be made on such Transfer Date and the related Distribution Date pursuant to Sections 5.5 and 5.6 and the payment of Class A Monthly Principal and Class M Monthly Principal), and (z) the Class B Principal Balance.

 

(d)           The amount of monthly principal (the “Class C Monthly Principal”) to be transferred from the Principal Account with respect to the Class C Notes (i) on each Transfer Date, beginning with the Transfer Date in the Monthly Period following the Monthly Period in which the Controlled Amortization Period begins (unless an Early Amortization Period shall have commenced prior to the end of the Monthly Period immediately preceding such Transfer Date) shall be equal to the least of (w) the Class C Pro Rata Percentage of the Available Principal Collections on deposit in the Principal Account with respect to such Transfer Date, (x) the Class C Pro Rata Percentage of the Controlled Payment Amount for such Transfer Date, (y) the Collateral Amount (after taking into account any adjustments to be made on such Transfer Date and the related Distribution Date pursuant to Sections 5.5 and 5.6 and the payment of Class A

 

  

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Monthly Principal, Class M Monthly Principal and Class B Monthly Principal), and (z) the Class C Principal Balance, and (ii) on each Transfer Date, beginning with the Transfer Date in the Monthly Period following the Monthly Period in which the Early Amortization Period begins, shall be equal to the least of (x) the excess of the Available Principal Collections on deposit in the Principal Account with respect to such Transfer Date over the portion of such Available Principal Collections applied to Class A Monthly Principal, Class M Monthly Principal and Class B Monthly Principal, (y) the Collateral Amount (after taking into account any adjustments to be made on such Transfer Date and the related Distribution Date pursuant to Sections 5.5 and 5.6 and the payment of Class A Monthly Principal, Class M Monthly Principal and Class B Monthly Principal), and (z) the Class C Principal Balance.

 

Section 5.4                      Application of Available Finance Charge Collections and Available Principal Collections.  On or before each Transfer Date, the Servicer shall instruct the Indenture Trustee in writing (which writing shall be substantially in the form of Exhibit B) to withdraw and the Indenture Trustee, acting in accordance with such instructions, shall withdraw on such Transfer Date or related Distribution Date, as applicable, to the extent of available funds, the amount required to be withdrawn from the Finance Charge Account, the Principal Account, the Principal Funding Account and the Distribution Account as follows:

 

(a)           On each Transfer Date, an amount equal to the Available Finance Charge Collections with respect to the related Distribution Date will be distributed or deposited in the following priority:

 

(i)           an amount equal to the unpaid Class A Monthly Interest for such Distribution Date shall be deposited by Servicer or the Indenture Trustee into the Distribution Account for distribution to the Class A Noteholders in accordance with Section 6.2;

 

(ii)           an amount equal to the unpaid Class A Non-Use Fee, if any, not paid by the Transferor pursuant to the Class A Note Purchase Agreement for the related Distribution Period plus any Class A Non-Use Fee due but not paid to the Class A Noteholders on any prior Distribution Date and an amount equal to the Class A Additional Amounts, if any, for the related Distribution Period plus any Class A Additional Amounts due but not paid to the Class A Noteholders on any prior Distribution Date shall be deposited by Servicer or the Indenture Trustee into the Distribution Account for distribution to the Class A Noteholders in accordance with Section 6.2; provided, that the amounts distributed pursuant to this clause 5.4(a)(ii) shall not exceed 0.50% of the Weighted Average Collateral Amount over the Distribution Period;

 

(iii)           an amount equal to the Noteholder Servicing Fee for such Transfer Date, plus the amount of any Noteholder Servicing Fee previously due but not distributed to the Servicer on a prior Transfer Date, shall be distributed to the Servicer;

 

(iv)           an amount equal to the unpaid Class M Monthly Interest for such Distribution Date shall be deposited by Servicer or the Indenture Trustee into the

 

  

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Distribution Account for distribution to the Class M Noteholders in accordance with Section 6.2;

 

(v)           an amount equal to the unpaid Class M Non-Use Fee, if any, not paid by the Transferor pursuant to the Class M Note Purchase Agreement for the related Distribution Period plus any Class M Non-Use Fee due but not paid to the Class M Noteholders on any prior Distribution Date and an amount equal to the Class M Additional Amounts, if any, for the related Distribution Period plus any Class M Additional Amounts due but not paid to the Class M Noteholders on any prior Distribution Date shall be deposited by Servicer or the Indenture Trustee into the Distribution Account for distribution to the Class M Noteholders in accordance with Section 6.2; provided, that the amounts distributed pursuant to this clause 5.4(a)(v) shall not exceed 0.50% of the Weighted Average Collateral Amount over the Distribution Period;

 

(vi)           an amount equal to Class B Monthly Interest for such Distribution Date, plus any Class B Deficiency Amount, plus the amount of any Class B Additional Interest for such Distribution Date, plus the amount of any Class B Additional Interest previously due but not distributed to Class B Noteholders on a prior Distribution Date shall be deposited by the Servicer or Indenture Trustee into the Distribution Account;

 

(vii)           an amount equal to Class C Monthly Interest for such Distribution Date, plus any Class C Deficiency Amount, plus the amount of any Class C Additional Interest for such Distribution Date, plus the amount of any Class C Additional Interest previously due but not distributed to Class C Noteholders on a prior Distribution Date shall be deposited by the Servicer or Indenture Trustee into the Distribution Account;

 

(viii)           an amount equal to the Aggregate Investor Default Amount and any Investor Uncovered Dilution Amount for such Distribution Date shall be treated as a portion of Available Principal Collections for such Distribution Date and, during the Controlled Amortization Period or the Early Amortization Period, deposited into the Principal Account on the related Transfer Date to the extent needed to pay Monthly Principal on the related Distribution Date;

 

(ix)           an amount equal to the sum of the aggregate amount of Investor Charge-Offs and the amount of Reallocated Principal Collections which have not been previously reimbursed pursuant to this clause (ix) shall be treated as a portion of Available Principal Collections for such Distribution Date and, during the Controlled Amortization Period or the Early Amortization Period, deposited into the Principal Account on the related Transfer Date to the extent needed to pay Monthly Principal on the related Distribution Date;

 

(x)           an amount equal to the excess, if any, of the Required Cash Collateral Amount over the Available Cash Collateral Amount shall be deposited into the Cash Collateral Account;

 

  

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(xi)           any amounts not distributed pursuant to clause 5.4(a)(ii) because of the proviso in such clause shall be withdrawn from the Finance Charge Account and deposited into the Distribution Account for distribution to the Class A Noteholders;

 

(xii)           any amounts not distributed pursuant to clause 5.4(a)(v) because of the proviso in such clause shall be withdrawn from the Finance Charge Account and deposited into the Distribution Account for distribution to the Class M Noteholders; and

 

(xiii)           the balance, if any, will constitute a portion of Excess Finance Charge Collections for such Distribution Date.

 

(b)           During the Revolving Period, an amount equal to the Available Principal Collections for the related Monthly Period will be treated as Shared Principal Collections and applied in accordance with Section 8.5 of the Indenture; provided, however, during any Mandatory Limited Amortization Period and on the Non-Renewing Purchaser Scheduled Distribution Date, an amount equal to  the Available Principal Collections for the related Monthly Period shall be distributed or deposited in the following order of priority:

 

(i)           an amount equal to the Class A Monthly Principal shall be deposited into the Distribution Account on such Transfer Date for payment to the Class A Noteholders in each Class A Ownership Group that is a Non-Renewing Ownership Group, on a pro rata basis, until the Non-Renewing Purchaser Class A Principal Balance has been reduced to zero;

 

(ii)           an amount equal to the Class M Monthly Principal shall be deposited into the Distribution Account on such Transfer Date for payment to the Class M Noteholders in each  Class M Ownership Group that is a Non-Renewing Ownership Group, on a pro rata basis, until the Non-Renewing Purchaser Class M Principal Balance has been reduced to zero; and

 

(iii)           the balance shall be treated as Shared Principal Collections and applied in accordance with Section 8.5 of the Indenture.

 

(c)           On each Transfer Date following any Monthly Period during the Controlled Amortization Period or the Early Amortization Period, an amount equal to the Available Principal Collections for the related Monthly Period shall be distributed or deposited in the following order of priority:

 

(i)           an amount equal to the Class A Monthly Principal for such Transfer Date shall be deposited into the Distribution Account on such Transfer Date and on each subsequent Transfer Date for payment to the Class A Noteholders on the related Distribution Date until the Class A Principal Balance has been paid in full;

 

(ii)           an amount equal to the Class M Monthly Principal for such Transfer Date shall be deposited into the Distribution Account on such Transfer Date and on each subsequent Transfer Date for payment to the Class M Noteholders on the related Distribution Date until the Class M Principal Balance has been paid in full;

 

  

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(iii)           an amount equal to the Class B Monthly Principal for such Transfer Date shall be deposited into the Distribution Account on such Transfer Date and on each subsequent Transfer Date for payment to the Class B Noteholders on the related Distribution Date until the Class B Principal Balance has been paid in full;

 

(iv)           an amount equal to the Class C Monthly Principal, if any, shall be deposited into the Distribution Account on such Transfer Date and on each subsequent Transfer Date for payment to the Class C Noteholders on the related Distribution Date until the Class C Principal Balance has been paid in full; and

 

(v)           the balance shall be treated as Shared Principal Collections and applied in accordance with Section 8.5 of the Indenture.

 

(d)           On each Distribution Date, the Indenture Trustee shall pay in accordance with Section 6.2 to the Class A Noteholders from the Distribution Account, the amount deposited into the Distribution Account pursuant to clauses 5.4(a)(i), (ii) and (xi) on the preceding Transfer Date, to the Class M Noteholders from the Distribution Account, the amount deposited into the Distribution Account pursuant to clauses 5.4(a)(iv),(v) and (xii) on the preceding Transfer Date, to the Class B Noteholders from the Distribution Account, the amount deposited into the Distribution Account pursuant to clauses 5.4(a)(vi) on the preceding Transfer Date and to the Class C Noteholders from the Distribution Account, the amount deposited into the Distribution Account pursuant to clause 5.4(a)(vii).

 

(e)           Notwithstanding anything to the contrary contained in this Section 5.4, on the date hereof, accrued interest on the Class A Note and Class M Note held by Deutsche Bank AG, New York Branch shall be payable to Deutsche Bank AG, New York Branch, as Class A Administrative Agent and Class M Administrative Agent, respectively.  The Servicer shall instruct the Indenture Trustee to withdraw funds from the Finance Charge Account on the date hereof in an amount equal to all interest accrued on the Class A Note and Class M Note held by Deutsche Bank AG, New York Branch through (but excluding) the date hereof and to pay such amount to Deutsche Bank AG, New York Branch.

 

Section 5.5                      Investor Charge-Offs.  On each Determination Date, the Servicer shall calculate the Aggregate Investor Default Amount and any Investor Uncovered Dilution Amount for the related Distribution Date.  If, on any Distribution Date, the sum of the Aggregate Investor Default Amount and any Investor Uncovered Dilution Amount for such Distribution Date exceeds the sum of the amount of Available Finance Charge Collections and the amount withdrawn from the Cash Collateral Account allocated with respect thereto pursuant to 5.10(c) with respect to such Distribution Date, the Collateral Amount will be reduced (but not below zero) by the amount of such excess (such reduction, an “Investor Charge-Off”).

 

Section 5.6                      Reallocated Principal Collections.  On each Transfer Date, the Servicer shall apply, or shall instruct the Indenture Trustee in writing to apply, Investor Principal Collections with respect to that Transfer Date, to fund any deficiency pursuant to and in the priority set forth in clauses 5.4(a)(i) through (vi) after giving effect to any withdrawal from the Cash Collateral Account to cover such payments.  On each Transfer Date, the Collateral Amount shall be reduced by the amount of Reallocated Principal Collections for such Transfer Date.

 

  

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Section 5.7                      Excess Finance Charge Collections.  Series 2009-VFN shall be an Excess Allocation Series with respect to Group One only.  Subject to Section 8.6 of the Indenture, Excess Finance Charge Collections with respect to the Excess Allocation Series in Group One for any Transfer Date will be allocated to Series 2009-VFN in an amount equal to the product of (x) the aggregate amount of Excess Finance Charge Collections with respect to all the Excess Allocation Series in Group One for such Distribution Date and (y) a fraction, the numerator of which is the Finance Charge Shortfall for Series 2009-VFN for such Distribution Date and the denominator of which is the aggregate amount of Finance Charge Shortfalls for all the Excess Allocation Series in Group One for such Distribution Date.  The “Finance Charge Shortfall” for Series 2009-VFN for any Distribution Date will be equal to the excess, if any, of (a) the full amount required to be paid, without duplication, pursuant to clauses 5.4(a)(i) through (xii) on such Distribution Date over (b) the Available Finance Charge Collections with respect to such Distribution Date (excluding any portion thereof attributable to Excess Finance Charge Collections).

 

Section 5.8                      Shared Principal Collections.  Subject to Section 8.5 of the Indenture, Shared Principal Collections allocable to Series 2009-VFN on any Transfer Date shall equal the product of (i) the aggregate amount of Shared Principal Collections with respect to all Principal Sharing Series for such Transfer Date and (ii) a fraction, the numerator of which is the Principal Shortfall for Series 2009-VFN for such Transfer Date and the denominator of which is the aggregate amount of Principal Shortfalls for all the Series which are Principal Sharing Series for such Transfer Date.  The “Principal Shortfall” for Series 2009-VFN for any Transfer Date shall equal, the excess, if any, of the sum, without duplication, of any Mandatory Limited Payment Amount, Optional Amortization Amounts, Class A Monthly Principal, Class M Monthly Principal, Class B Monthly Principal and Class C Monthly Principal with respect to such Transfer Date over the amount of Available Principal Collections for such Transfer Date (excluding any portion thereof attributable to Shared Principal Collections).

 

Section 5.9                      Certain Series Accounts.

 

(a)           The Indenture Trustee shall establish and maintain with an Eligible Institution, which may be the Indenture Trustee in the name of the Trust, on behalf of the Trust, for the benefit of the Noteholders, three segregated trust accounts with such Eligible Institution (the “Finance Charge Account”, the “Principal Account” and the “Distribution Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Series 2009-VFN Noteholders.  The Indenture Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Finance Charge Account, the Principal Account and the Distribution Account and in all proceeds thereof.  The Finance Charge Account, the Principal Account and the Distribution Account shall be under the sole dominion and control of the Indenture Trustee for the benefit of the Series 2009-VFN Noteholders.  If at any time the institution holding the Finance Charge Account, the Principal Account and the Distribution Account ceases to be an Eligible Institution, the Transferor shall notify the Indenture Trustee in writing, and the Indenture Trustee upon being notified (or the Servicer on its behalf) shall, within ten (10) Business Days, establish a new Finance Charge Account, a new Principal Account and a new Distribution Account meeting the conditions specified above with an Eligible Institution, and shall transfer any cash or any investments to such new Finance Charge Account, new Principal Account and new Distribution Account.  The Indenture Trustee, at the written direction

 

  

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of the Servicer, shall make withdrawals from the Finance Charge Account, the Principal Account and the Distribution Account from time to time, in the amounts and for the purposes set forth in this Indenture Supplement.  Indenture Trustee at all times shall maintain accurate records reflecting each transaction in the Finance Charge Account, the Principal Account and the Distribution Account.

 

(b)           Funds on deposit in the Finance Charge Account, the Principal Account and the Distribution Account, from time to time shall be invested and reinvested at the direction of the Servicer by the Indenture Trustee in Eligible Investments that will mature so that such funds will be available for withdrawal on or prior to the following Transfer Date.  The Servicer shall give a written standing instruction for such investments, and amounts in such accounts will not be invested if the Servicer fails to give such instructions to the Indenture Trustee.

 

(c)           Section 6.14 of the Indenture shall apply to the Series Accounts.

 

Section 5.10                      Cash Collateral Account.

 

(a)           The Indenture Trustee shall establish and maintain with an Eligible Institution, which may be the Indenture Trustee in the name of the Trust, on behalf of the Trust, for the benefit of the Series 2009-VFN Noteholders, a segregated trust account (the “Cash Collateral Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Series 2009-VFN Noteholders.  The Indenture Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Cash Collateral Account and in all proceeds thereof.  The Cash Collateral Account shall be under the sole dominion and control of the Indenture Trustee for the benefit of the Series 2009-VFN Noteholders.  If at any time the institution holding the Cash Collateral Account ceases to be an Eligible Institution, the Transferor shall notify the Indenture Trustee, and the Indenture Trustee upon being notified (or the Servicer on its behalf) shall, within ten (10) Business Days, establish a new Cash Collateral Account meeting the conditions specified above with an Eligible Institution, and shall transfer any cash or any investments to such new Cash Collateral Account.

 

(b)           Funds on deposit in the Cash Collateral Account shall be invested at the written direction of the Servicer by the Indenture Trustee in Eligible Investments.  The Servicer shall give a written standing instruction for such investments, and amounts in such account will not be invested if the Servicer fails to give such instructions to the Indenture Trustee.  Funds on deposit in the Cash Collateral Account on any Transfer Date, after giving effect to any withdrawals from the Cash Collateral Account on such Transfer Date, shall be invested in such investments that will mature so that such funds will be available for withdrawal on or prior to the following Transfer Date.

 

On each Transfer Date, all interest and earnings (net of losses and investment expenses) accrued since the preceding Transfer Date on funds on deposit in the Cash Collateral Account shall be retained in the Cash Collateral Account (to the extent that the Available Cash Collateral Account Amount is less than the Required Cash Collateral Account Amount) and the balance, if any, shall be deposited into the Finance Charge Account and included in Available Finance Charge Collections for such Transfer Date.  For purposes of determining the availability of funds or the balance in the Cash Collateral Account for any reason under this Indenture Supplement,

 

  

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except as otherwise provided in the preceding sentence, interest and earnings on such funds shall be deemed not to be available or on deposit.

 

(c)           On each Determination Date, Servicer shall calculate the amount (the “Required Draw Amount”) by which the sum of the amounts required to be distributed pursuant to clauses 5.4(a)(i) through (viii) with respect to the related Transfer Date exceeds the amount of Available Finance Charge Collections with respect to the related Monthly Period.  If the Required Draw Amount for any Transfer Date is greater than zero, Servicer shall give written notice to the Indenture Trustee of such positive Required Draw Amount on the related Determination Date.  On the related Transfer Date, the Required Draw Amount, if any, up to the Available Cash Collateral Amount, the Servicer shall direct the Indenture Trustee in writing to withdraw from the Cash Collateral Account and distributed to fund any deficiency pursuant to clauses 5.4(a)(i) through (viii) (in the order of priority set forth in subsection 5.4(a)).

 

(d)           If, after giving effect to all deposits to and withdrawals from the Cash Collateral Account with respect to any Transfer Date, the amount on deposit in the Cash Collateral Account exceeds the Required Cash Collateral Amount, the Indenture Trustee acting in accordance with the instructions of the Servicer, shall withdraw an amount equal to such excess from the Cash Collateral Account and distribute such amounts remaining after application pursuant to subsection 5.10(c) to the Transferor.

 

Section 5.11                      Investment Instructions.  Any investment instructions required to be given to the Indenture Trustee pursuant to the terms hereof must be given in the form of a written standing instruction to the Indenture Trustee no later than 11:00 a.m., New York City time, on the date such investment is to be made.  In the event the Indenture Trustee receives such investment instruction later than such time, the Indenture Trustee may, but shall have no obligation to, make such investment.  In the event the Indenture Trustee is unable to make an investment required in an investment instruction received by the Indenture Trustee after 11:00 a.m., New York City time, on such day, such investment shall be made by the Indenture Trustee on the next succeeding Business Day.  In no event shall the Indenture Trustee be liable for any investment not made pursuant to investment instructions received after 11:00 a.m., New York City time, on the day such investment is requested to be made.  If investment instructions are not given with respect to funds in any Accounts, such funds shall remain uninvested until instructions are delivered to the Indenture Trustee in accordance with the terms hereof.

 

Section 5.12                      Determination of LIBOR.

 

(a)           On each LIBOR Determination Date in respect of a Distribution Period, the Indenture Trustee shall determine LIBOR on the basis of the rate for deposits in United States dollars for a period of the Designated Maturity which appears on the Designated LIBOR Page as of 11:00 a.m., London time, on such date.  If such rate does not appear on the Designated LIBOR Page, the rate for that Distribution Period Determination Date shall be determined on the basis of the rates at which deposits in United States dollars are offered by the Reference Banks at approximately 11:00 a.m., London time, on that day to prime banks in the London interbank market for a period of the Designated Maturity.  The Indenture Trustee shall request the principal London office of each of the Reference Banks to provide a quotation of its rate.  If at least two (2) such quotations are provided, the rate for that Distribution Period shall be the arithmetic

 

  

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mean of the quotations.  If fewer than two (2) quotations are provided as requested, the rate for that Distribution Period will be the arithmetic mean of the rates quoted by major banks in New York City, selected by the Servicer, at approximately 11:00 a.m., New York City time, on that day for loans in United States dollars to leading European banks for a period of the Designated Maturity.  LIBOR for the first Distribution Period will be determined by straight-line interpolation, based on the actual number of days in such Distribution Period from the date of the initial Class A Incremental Funding to but excluding November 16, 2009, between two rates determined in accordance with the preceding paragraph, one of which will be determined for a maturity of one month and one of which will be determined for a maturity of two months.

 

(b)           LIBOR that may be applicable to the then current and the immediately preceding Distribution Periods may be obtained by telephoning the Indenture Trustee at its corporate trust office at (800) 934-6802 or such other telephone number as shall be designated by the Indenture Trustee for such purpose by prior written notice by the Indenture Trustee to each Series 2009-VFN Noteholder from time to time.

 

(c)           On each LIBOR Determination Date, the Indenture Trustee shall send to the Servicer by facsimile transmission or electronic mail, notification of LIBOR for the following Distribution Period.

 

ARTICLE VI.

 

Delivery of Series 2009-VFN Notes; Distributions; Reports to Series 2009-VFN Noteholders

 

Section 6.1                      Delivery and Payment for the Series 2009-VFN Notes.  The Issuer shall execute and issue, and the Indenture Trustee shall authenticate, the Series 2009-VFN Notes in accordance with Section 2.3 of the Indenture.  The Indenture Trustee shall deliver the Series 2009-VFN Notes to or upon the written order of the Trust when so authenticated.

 

Section 6.2                      Distributions.

 

(a)           On each Distribution Date, the Indenture Trustee shall distribute to each Class A Noteholder of record on the related Record Date (other than as provided in Section 11.2 of the Indenture) such Class A Noteholder’s portion (determined in accordance with Article V) of the amounts on deposit in the Distribution Account that are allocated and available on such Distribution Date and as are payable to the Class A Noteholders pursuant to this Indenture Supplement.

 

(b)           On each Distribution Date, the Indenture Trustee shall distribute to each Class M Noteholder of record on the related Record Date (other than as provided in Section 11.2 of the Indenture) such Class M Noteholder’s portion (determined in accordance with Article V) of the amounts on deposit in the Distribution Account that are allocated and available on such Distribution Date and as are payable to the Class M Noteholders pursuant to this Indenture Supplement.

 

(c)           On each Distribution Date, the Indenture Trustee shall distribute to each Class B Noteholder of record on the related Record Date (other than as provided in Section 11.2 of the Indenture) such Class B Noteholder’s pro rata share of the amounts on deposit in the Distribution

 

  

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Account that are allocated and available on such Distribution Date and as are payable to the Class B Noteholders pursuant to this Indenture Supplement.

 

(d)           On each Distribution Date, the Indenture Trustee shall distribute to each Class C Noteholder of record on the related Record Date (other than as provided in Section 11.2 of the Indenture) such Class C Noteholder’s pro rata share of the amounts on deposit in the Distribution Account that are allocated and available on such Distribution Date and as are payable to the Class C Noteholders pursuant to this Indenture Supplement.

 

(e)           On each Distribution Date, if a shortfall in the amount of Available Finance Charge Collections available for distribution in accordance with any payment priority in clauses 5.4(a)(i), (ii) and (xi) exists, the Available Finance Charge Collections for such payment priority shall be allocated (a) ratably to each Class A Ownership Group based on its respective Class A Ownership Group Percentage and (b) any Available Finance Charge Collections allocated pursuant to clause (a) to any Class A Ownership Group in excess of the amount owed to such Class A Ownership Group for the related payment priority shall be reallocated to each Class A Ownership Group that has a remaining shortfall in the Available Finance Charge Collections allocated to it pursuant to clause (a) in order to cover the amount owed to such Class A Ownership Group for the related payment priority, which reallocation shall be made ratably in accordance with the portion of the Note Principal Balances of all remaining Class A Ownership Groups represented by the Note Principal Balance of each such remaining Class A Ownership Group.

 

(f)           On each Distribution Date, if a shortfall in the amount of Available Finance Charge Collections available for distribution in accordance with any payment priority in clauses 5.4(a)(iv), (v) and (xii) exists, the Available Finance Charge Collections for such payment priority shall be allocated (a) ratably to each Class M Ownership Group based on its respective Class M Ownership Group Percentage and (b) any Available Finance Charge Collections allocated pursuant to clause (a) to any Class M Ownership Group in excess of the amount owed to such Class M Ownership Group for the related payment priority shall be reallocated to each Class M Ownership Group that has a remaining shortfall in the Available Finance Charge Collections allocated to it pursuant to clause (a) in order to cover the amount owed to such Class M Ownership Group for the related payment priority, which reallocation shall be made ratably in accordance with the portion of the Note Principal Balances of all remaining Class M Ownership Groups represented by the Note Principal Balance of each such remaining Class M Ownership Group.

 

(g)           The distributions to be made pursuant to this Section 6.2 are subject to the provisions of Sections 2.6, 6.1 and 7.1 of the Transfer and Servicing Agreement, Section 11.2 of the Indenture and Section 7.1 of this Indenture Supplement.

 

(h)           All payments set forth herein shall be made by wire transfer of immediately available funds, provided that the Paying Agent, not less than five Business Days prior to the Record Date relating to the first distribution to such Series 2009-VFN Noteholder, has been furnished with appropriate wiring instructions in writing.

 

  

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Section 6.3                      Reports and Statements to Series 2009-VFN Noteholders.

 

(a)           On each Distribution Date, the Indenture Trustee shall make available to each Series 2009-VFN Noteholder via its website (www.usbank.com/abs) a statement substantially in the form of Exhibit C prepared by the Servicer.

 

(b)           Not later than the second Business Day preceding each Distribution Date, the Servicer shall deliver to the Owner Trustee and the Indenture Trustee (i) a statement substantially in the form of Exhibit B prepared by the Servicer and (ii)  a certificate of an Authorized Officer substantially in the form of Exhibit D; provided that the Servicer may amend the form of Exhibit B from time to time, with the prior written consent of the Indenture Trustee.

 

(c)           A copy of each statement or certificate provided pursuant to paragraph (a) or (b) may be obtained by any Series 2009-VFN Noteholder by a request in writing to the Servicer.

 

(d)           On or before January 31 of each calendar year, beginning with January 31, 2010, the Indenture Trustee shall furnish or cause to be furnished to each Person who at any time during the preceding calendar year was a Series 2009-VFN Noteholder, a statement prepared by the Servicer containing the information which is required to be contained in the statement to Series 2009-VFN Noteholders, as set forth in paragraph (a) above, aggregated for such calendar year or the applicable portion thereof during which such Person was a Series 2009-VFN Noteholder, together with other information as is required to be provided by an issuer of indebtedness under the Code.

 

ARTICLE VII.

 

Series 2009-VFN Early Amortization Events

 

Section 7.1                      Series 2009-VFN Early Amortization Events.  If any one of the following events shall occur with respect to the Series 2009-VFN Notes:

 

(a)           failure on the part of Transferor or the Issuer (i) to make any payment or deposit required to be made by it by the terms of the Transfer and Servicing Agreement, the Class A Note Purchase Agreement, the Class M Note Purchase Agreement, the Indenture or this Indenture Supplement on or before the date occurring five (5) Business Days after the date such payment or deposit is required to be made therein or herein or (ii) duly to observe or perform in any material respect any other of its covenants or agreements set forth in the Transfer and Servicing Agreement, the Class A Note Purchase Agreement, the Class M Note Purchase Agreement, the Indenture or this Indenture Supplement, which failure has a material adverse effect on the Series 2009-VFN Noteholders and which continues unremedied for a period of thirty (30) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Transferor by the Indenture Trustee, or to the Transferor and the Indenture Trustee by any Holder of the Series 2009-VFN Notes;

 

(b)           any representation or warranty made by Transferor or the Issuer, in the Transfer and Servicing Agreement, the Class A Note Purchase Agreement, the Class M Note Purchase Agreement, the Indenture or the Indenture Supplement or any information contained in a computer file or microfiche list required to be delivered by it pursuant to Section 2.1 or

 

  

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subsection 2.6(c) of the Transfer and Servicing Agreement shall prove to have been incorrect in any material respect when made or when delivered, which continues to be incorrect in any material respect for a period of thirty (30) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Transferor by the Indenture Trustee, or to the Transferor and the Indenture Trustee by any Holder of the Series 2009-VFN Notes and as a result of which the interests of the Series 2009-VFN Noteholders are materially and adversely affected for such period; provided, however, that a Series 2009-VFN Early Amortization Event pursuant to this subsection 7.1(b) shall not be deemed to have occurred hereunder if the Transferor has accepted reassignment of the related Receivable, or all of such Receivables, if applicable, during such period in accordance with the provisions of the Transfer and Servicing Agreement;

 

(c)           as of any date of determination, the Quarterly Excess Spread Percentage is less than 2%;

 

(d)           a failure by Transferor to convey Receivables in Additional Accounts or Participations to the Receivables Trust within five (5) Business Days after the day on which it is required to convey such Receivables pursuant to subsection 2.6(b) of the Transfer and Servicing Agreement, provided that such failure shall not give rise to an Early Amortization Event if, prior to the date on which such conveyance was required to be completed, Transferor causes a reduction in the principal balance of any Variable Interest to occur, so that, after giving effect to that reduction (i) the Transferor Amount is not less than the Minimum Transferor Amount and (ii) the sum of the aggregate amount of Principal Receivables plus amounts on deposit in the Excess Funding Account is not less than the Required Principal Balance;

 

(e)           any Servicer Default shall occur which would have a material adverse effect on the Series 2009-VFN Holders (which determination shall be made without reference to whether any funds are available under the Cash Collateral Account);

 

(f)           the Class A Note Principal Balance shall not be paid in full on the Class A Scheduled Final Payment Date or the Non-Renewing Purchaser Class A Principal Balance shall not be paid in full on the Non-Renewing Purchaser Scheduled Distribution Date;

 

(g)           the Class M Note Principal Balance shall not be paid in full on the Class M Scheduled Final Payment Date or the Non-Renewing Purchaser Class M Principal Balance shall not be paid in full on the Non-Renewing Purchaser Scheduled Distribution Date;

 

(h)           at any time that the Required Cash Collateral Amount has been greater than zero for three or more consecutive Monthly Periods immediately following the Monthly Period in which a Required Cash Collateral Amount Trigger Date occurs, the Available Cash Collateral Amount shall be less than the Required Cash Collateral Amount;

 

(i)           as of any date of determination, the Quarterly Payment Rate Percentage shall be less than 8.0%;

 

(j)           a Change in Control has occurred;

 

  

42

  

 

(k)           as on any Determination Date, the percentage equivalent of a fraction (A) the numerator of which is the sum of (1) the aggregate Principal Receivables outstanding that have remained unpaid more than 60 days after their contractual due date as of the end of the related Monthly Period plus (2) the aggregate of the Default Amounts for all Accounts that became Defaulted Accounts during the related Monthly Period and (B) the denominator of which is the total Principal Receivables as of the end of the related Monthly Period is  greater than 8.0%;

 

(l)           the Pension Benefit Guaranty Corporation shall file notice of a lien pursuant to Section 4068 of the Employee Retirement Income Security Act of 1974, with regard to any of the assets of Comenity Capital Bank, which lien shall secure a liability in excess of $10,000,000 and shall not have been released within 40 days; or

 

(m)           a default shall have occurred and be continuing under any instrument or agreement evidencing or securing indebtedness for borrowed money of Comenity Capital Bank in excess of $10,000,000 which default (i) is a default in payment of any principal or interest on such indebtedness when due or within any applicable grace period or (ii) shall have resulted in acceleration of the maturity of such indebtedness; or

 

(n)           without limiting the foregoing, the occurrence of an Event of Default with respect to Series 2009-VFN and acceleration of the maturity of the Series 2009-VFN Notes pursuant to Section 5.3 of the Indenture;

 

then, in the case of any event described in subsections 7.1(a), (b), (e), (k), (l) or (m) of this Indenture Supplement, after the applicable grace period set forth in such Sections, two or more Holders of Outstanding Series 2009-VFN Notes evidencing undivided interests aggregating more than 50% of the Aggregate Senior Purchase Limit of this Series 2009-VFN by notice then given in writing to Transferor and Servicer (and to the Indenture Trustee if given by the Holders) may, and the Indenture Trustee at the direction of such Holders shall, declare that an early amortization event (a “Series 2009-VFN Early Amortization Event”) has occurred as of the date of such notice, and in the case of any event described in subsections 7.1(c), (d), (f), (g), (h), (i), (j) or (n) of this Indenture Supplement, a Series 2009-VFN Early Amortization Event shall occur without any notice or other action on the part of Indenture Trustee or the Series 2009-VFN Noteholders immediately upon the occurrence of such event.

 

In addition to the other consequences of a Series 2009-VFN Early Amortization Event specified herein or a Trust Early Amortization Event, from and after the occurrence of any Series 2009-VFN Early Amortization Event or a Trust Early Amortization Event (until the same shall have been waived by all of the Series 2009-VFN Noteholders), with respect to any Account included in the Approved Portfolios, Transferor shall no longer permit or require Merchant Adjustment Payments  or In-Store Payments to be netted against amounts owed to Transferor by the applicable Merchant but shall instead exercise its rights to require each Merchant to transfer to Servicer, not later than the third Business Day following receipt by such Merchant of any In-Store Payments or the occurrence of any event giving rise to Merchant Adjustment Payments, an amount equal to the sum of such In-Store Payments and Merchant Adjustment Payments. In addition, if any bankruptcy or other insolvency proceeding has been commenced against a Merchant, Servicer shall require that Merchant to (i) stop accepting In-Store Payments and (ii) inform Obligors who wish to make In-Store Payments that payment should instead be sent to

 

  

43

  

Servicer, provided that Servicer shall not be required to take such action if (x) Servicer or Trustee has been provided a letter of credit, surety bond or other similar instrument covering collection risk with respect to In-Store Payments and (y) each of the Series 2009-VFN Noteholders consents to such arrangement.

 

ARTICLE VIII.

 

Redemption of Series 2009-VFN Notes; Series Termination

 

Section 8.1                      Optional Redemption of Series 2009-VFN Notes; Final Distributions.

 

(a)           On any Business Day occurring on or after the date on which the outstanding principal balance of the Series 2009-VFN Notes is reduced to 10% or less of the greatest ever Note Principal Balance, the Servicer shall have the option to redeem the Series 2009-VFN Notes, at a purchase price equal to (i) if such day is a Distribution Date, the Reassignment Amount for such Distribution Date or (ii) if such day is not a Distribution Date, the Reassignment Amount for the Distribution Date following such day.

 

(b)           Servicer shall give the Indenture Trustee at least thirty (30) days prior written notice of the date on which Servicer intends to exercise such optional redemption.  Not later than 12:00 noon, New York City time, on such day Servicer shall deposit into the Collection Account in immediately available funds the excess of the Reassignment Amount over the amount, if any, on deposit in the Principal Account.  Such redemption option is subject to payment in full of the Reassignment Amount.  Following such deposit into the Collection Account in accordance with the foregoing, the Collateral Amount for Series 2009-VFN shall be reduced to zero, and the Series 2009-VFN Noteholders shall have no further security interest in the Receivables.  The Reassignment Amount shall be distributed as set forth in subsection 8.1(d).

 

(c)           (1)  The amount to be paid by the Transferor with respect to Series 2009-VFN in connection with a reassignment of Receivables to the Transferor pursuant to subsection 2.4(e) of the Transfer and Servicing Agreement shall equal the Reassignment Amount for the first Distribution Date following the Monthly Period in which the reassignment obligation arises under the Transfer and Servicing Agreement.

 

(ii)           The amount to be paid by the Transferor with respect to Series 2009-VFN in connection with a repurchase of the Notes pursuant to Section 7.1 of the Transfer and Servicing Agreement shall equal the Reassignment Amount for the Distribution Date of such repurchase.

 

(d)           With respect to (a) the Reassignment Amount deposited into the Distribution Account pursuant to Section 8.1 or (b) the proceeds of any sale of Receivables pursuant to clause 5.5(a)(iii) of the Indenture with respect to Series 2009-VFN, the Indenture Trustee shall, in accordance with the written direction of the Servicer, not later than 12:00 noon, New York City time, on the related Distribution Date, make distributions of the following amounts (in the priority set forth below and, in each case, after giving effect to any deposits and distributions otherwise to be made on such date) in immediately available funds:  (i) (x) the Class A Principal Balance on such Distribution Date will be distributed to the Class A Noteholders and (y) an

 

  

44

  

 

amount equal to the sum of (A) Class A Monthly Interest for such Distribution Date, (B) any Class A Monthly Interest previously due but not distributed to the Class A Noteholders on any prior Distribution Date, will be distributed to the Class A Noteholders, (C) Class A Non-Use Fees, if any, due and payable to the Class A Noteholders on such Distribution Date or any prior Distribution Date and (D) Class A Additional Amounts, if any, due and payable on such Distribution Date or any prior Distribution Date will be distributed to the Class A Noteholders, (ii) (x) the Class M Principal Balance on such Distribution Date will be distributed to the Class M Noteholders and (y) an amount equal to the sum of (A) Class M Monthly Interest for such Distribution Date, (B) Class M Non-Use Fees, if any, due and payable to the Class M Noteholders on such Distribution Date or any prior Distribution Date and (C) Class M Additional Amounts, if any, due and payable on such Distribution Date or any prior Distribution Date will be distributed to the Class M Noteholders, (iii) (x) the Class B Principal Balance on such Distribution Date will be distributed to the Class B Noteholders and (y) an amount equal to the sum of (A) Class B Monthly Interest for such Distribution Date, (B) any Class B Deficiency Amount for such Distribution Date and (C) the amount of Class B Additional Interest, if any, for such Distribution Date and any Class B Additional Interest previously due but not distributed to the Class B Noteholders on any prior Distribution Date, will be distributed to the Class B Noteholders on such Distribution Date, (iv) (x) the Class C Principal Balance on such Distribution Date will be distributed to the Class C Noteholders and (y) an amount equal to the sum of (A) Class C Monthly Interest for such Distribution Date, (B) any Class C Deficiency Amount for such Distribution Date and (C) the amount of Class C Additional Interest, if any, for such Distribution Date and any Class C Additional Interest previously due but not distributed to the Class C Noteholders on any prior Distribution Date, will be distributed to the Class C Noteholders, and (v) any excess shall be released to the Issuer.

 

Section 8.2                      Series Termination.  The right of the Series 2009-VFN Noteholders to receive payments from the Trust will terminate on the first Business Day following the Series Termination Date.

 

ARTICLE IX.

 

Miscellaneous Provisions

 

Section 9.1                      Ratification of Indenture; Amendments.  As supplemented by this Indenture Supplement, the Indenture is in all respects ratified and confirmed and the Indenture as so supplemented by this Indenture Supplement shall be read, taken and construed as one and the same instrument.  This Indenture Supplement may be amended only by a Supplemental Indenture entered in accordance with the terms of Section 10.1 or 10.2 of the Indenture.  For purposes of the application of Section 10.2 to any amendment of this Indenture Supplement, the Series 2009-VFN Noteholders shall be the only Noteholders whose vote shall be required.

 

Section 9.2                      Counterparts.  This Indenture Supplement may be executed in two or more counterparts, and by different parties on separate counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument.

 

Section 9.3                      Notices.  Any required notice shall be made to the addresses specified in the applicable Note Purchase Agreement with respect to the Series 2009-VFN Noteholders.

 

  

45

  

 

Section 9.4                      Form of Delivery of the Series 2009-VFN Notes.  The Class A Notes, the Class M Notes, the Class B Notes and the Class C Notes shall be Definitive Notes and initially shall be registered in the Note Register in the name of the initial purchasers of such Notes identified in the Note Purchase Agreements.

 

Section 9.5                      GOVERNING LAW.  THIS INDENTURE SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section 9.6                      Limitation of Liability.  Notwithstanding any other provision herein or elsewhere, this Agreement has been executed and delivered by BNY Mellon Trust of Delaware, not in its individual capacity, but solely in its capacity as Owner Trustee of the Trust.  Nothing herein contained shall be construed as creating any liability on BNY Mellon Trust of Delaware, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any person claiming by, through or under the parties hereto, and in no event shall BNY Mellon Trust of Delaware in its individual capacity have any liability in respect of the representations, warranties, or obligations of the Trust hereunder or under any other document, as to all of which recourse shall be had solely to the assets of the Trust, and for all purposes of this Agreement and each other document, the Owner Trustee (as such or in its individual capacity) shall be subject to, and entitled to the benefits of, the terms and provisions of the Trust Agreement.

 

Section 9.7                      Rights of the Indenture Trustee.  The Indenture Trustee shall have herein the same rights, protections, indemnities and immunities as specified in the Indenture.

 

Section 9.8                      Additional Provisions.  Notwithstanding anything to the contrary in any Transaction Document, until the Series Termination Date:

 

(a)           the Indenture Trustee shall not agree to any extension of the 60 day periods referred to in Section 2.4 or 3.3 of the Transfer and Servicing Agreement;

 

(b)           if the percentage equivalent of a fraction (A) the numerator of which is the total Principal Receivables relating to any one Merchant (other than Blair Corporation, Home Shopping Network or any Merchant affiliated with any of the foregoing) as of the end of any related Monthly Period and (B) the denominator of which is the aggregate total Principal Receivables as of the end of such related Monthly Period exceeds 12.5%, the Transferor shall suspend the addition of the Automatic Additional Accounts relating to such Merchant program until such time as such percentage is less than 12.5%;

 

(c)           if the percentage equivalent of a fraction (A) the numerator of which is the total Principal Receivables relating to Home Shopping Network as of the end of the related Monthly Period and (B) the denominator of which is the aggregate total Principal Receivables as of the end of such related Monthly Period exceeds 65.0%, the Transferor shall suspend the addition of

 

  

46

  

 

the Automatic Additional Accounts relating to Home Shopping Network until such time as such percentage is less than 65.0%;

 

(d)           if the percentage equivalent of a fraction (A) the numerator of which is the total Principal Receivables relating to Blair Corporation as of the end of the related Monthly Period and (B) the denominator of which is the aggregate total Principal Receivables as of the end of such related Monthly Period exceeds 45.0%, the Transferor shall suspend the addition of the Automatic Additional Accounts relating to Blair Corporation until such time as such percentage is less than 45.0%; and

 

(e)           without the consent of each Class A Noteholder, Class M Noteholder and Class B Noteholder (which consent shall not be unreasonably withheld or delayed), Transferor shall not (i) engage in any transaction described in Section 4.2 of the Transfer and Servicing Agreement, (ii) designate additional or substitute Transferors or Credit Card Originators as permitted by Section 2.9 or 2.10 of the Transfer and Servicing Agreement or (iii) increase the percentage of Principal Receivables referred to in the proviso to clause (f) of the definition of “Eligible Account”.

 

Section 9.9                      No Petition.  The Issuer and the Indenture Trustee, by entering into this Indenture Supplement, and each Series 2009-VFN Noteholder, by accepting a Series 2009-VFN Note, hereby covenant and agree that they will not at any time institute against the Issuer, or join in any institution against the Issuer of, any bankruptcy proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Series 2009-VFN Noteholders, the Indenture or this Indenture Supplement; provided, however, that nothing herein shall prohibit the Indenture Trustee from filing proofs of claim or otherwise participating in such proceedings instituted by any other person.  The provisions of this Section 9.8 shall survive the termination of this Indenture Supplement.

 

Section 9.10                      Additional Requirements for Registration of and Limitations on Transfer and Exchange of Notes.  All Transfers will be subject to the transfer restrictions set forth on the Notes.

 

No Transfer (or purported Transfer) of a Class B Note or Class C Note (or economic interest therein) shall be made by Comenity Capital Bank, the Transferor or any person which is considered the same person as Comenity Capital Bank or the Transferor for U.S. Federal income tax purposes (except to a person which is considered the same person as Comenity Capital Bank for such purposes) and any such Transfer (or purported Transfer) of such Notes shall be void ab initio unless an Opinion of Counsel is first delivered to the Indenture Trustee to the effect that such Notes will constitute debt for U.S. federal income tax purposes.

 

Section 9.11                      Amendments to the Indenture.  The phrase “including all Initial Accounts and all Additional Accounts” shall be added to the end of the first sentence in the definition of “Account” contained in Annex A to the Indenture.  Unless the Class A Administrative Agents and Class B Administrative Agents shall otherwise consent, no commercial account shall be an Eligible Account and the definition of “Eligible Account” in Annex A to the Indenture shall be modified by adding the following words at the end of clause (a) of such definition: “and is not a commercial account”.

 

  

47

  

IN WITNESS WHEREOF, the undersigned have caused this Indenture Supplement to be duly executed and delivered by their respective duly authorized officers on the day and year first above written.

 

WORLD FINANCIAL CAPITAL MASTER NOTE TRUST,  as Issuer

 

By:  BNY Mellon Trust of Delaware, not in its individual capacity, but solely as Owner Trustee

 

By:   /s/ Kristine K. Gullo

  Name:  Kristine K. Gullo

  Title:  Vice President

 

DEUTSCHE BANK TRUST COMPANY AMERICAS, as Indenture Trustee

 

By:   /s/ Louis Bodi

  Name:  Louis Bodi

  Title:  Vice President

 

By:   /s/ Sue Kim

  Name: Sue Kim

  Title:  AVP

 

 

Acknowledged and Accepted:

COMENITY CAPITAL BANK,

  as Servicer

 

By:   /s/ Ronald J. Ostler

  Name: Ronald J. Ostler

  Title: President

 

WORLD FINANCIAL CAPITAL CREDIT COMPANY, LLC

  as Transferor

 

By:   /s/ Dale Garlitz

  Name: Dale Garlitz

  Title: Chief Financial Officer and Treasurer

 

 

 

	 	 S-1	Third A&R Indenture Supplement
	 	 	 Series 2009-VFNExhibit 10.1

 

 

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated as of August 2, 2013

 

among

 

ATLANTIC POWER CORPORATION,
  as the Canadian Borrower,

 

ATLANTIC POWER GENERATION, INC.
  and
  ATLANTIC POWER TRANSMISSION, INC.,
  as the US Borrowers,

 

BANK OF MONTREAL,
  as Administrative Agent
 and an L/C Issuer,

 

and

 

THE OTHER LENDERS PARTY HERETO,

 

and

 

UNION BANK, N.A.,
  as Syndication Agent

 

and

 

THE TORONTO-DOMINION BANK AND MORGAN STANLEY BANK, N.A.
  as Co-Documentation Agents

 

and

 

BMO CAPITAL MARKETS, UNION BANK, CANADA BRANCH AND THE

TORONTO-DOMINION BANK,
  as Joint Lead Arrangers and Joint Bookrunners

 

 

 

 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I. DEFINITIONS AND   ACCOUNTING TERMS
    	
1
    
	
 
    	
 
    	
 
    
	
1.01.
    	
Defined Terms
    	
1
    
	
1.02.
    	
Other Interpretive Provisions
    	
49
    
	
1.03.
    	
Accounting Terms
    	
50
    
	
1.04.
    	
Rounding
    	
50
    
	
1.05.
    	
References to Agreements and Laws
    	
50
    
	
1.06.
    	
Times of Day
    	
51
    
	
1.07.
    	
Letter of Credit Amounts
    	
51
    
	
1.08.
    	
Interest Act (Canada)
    	
51
    
	
1.09.
    	
Exchange Rates; Currency Equivalents; Applicable Currency
    	
51
    
	
 
    	
 
    
	
ARTICLE II. THE COMMITMENTS   AND CREDIT EXTENSIONS
    	
52
    
	
 
    	
 
    
	
2.01.
    	
Loans; Advances
    	
52
    
	
2.02.
    	
Borrowings, Conversions and Continuations of Loans
    	
53
    
	
2.03.
    	
Letters of Credit
    	
55
    
	
2.04.
    	
Prepayments
    	
66
    
	
2.05.
    	
Termination or Reduction of Commitments
    	
67
    
	
2.06.
    	
Bankers’ Acceptances
    	
67
    
	
2.07.
    	
Interest
    	
70
    
	
2.08.
    	
Fees
    	
70
    
	
2.09.
    	
Computation of Interest and Fees
    	
71
    
	
2.10.
    	
Evidence of Debt
    	
71
    
	
2.11.
    	
Payments Generally
    	
72
    
	
2.12.
    	
Sharing of Payments
    	
75
    
	
2.13.
    	
Marshaling; Payments Set Aside
    	
76
    
	
2.14.
    	
Defaulting Lenders
    	
76
    
	
2.15.
    	
Effect of Termination; Survival
    	
78
    
	
2.16.
    	
Repayment of Loans
    	
78
    
	
 
    	
 
    
	
ARTICLE III. TAXES, YIELD   PROTECTION AND ILLEGALITY
    	
78
    
	
 
    	
 
    
	
3.01.
    	
Taxes
    	
78
    
	
3.02.
    	
Illegality
    	
81
    
	
3.03.
    	
Inability to Determine Rates
    	
82
    
	
3.04.
    	
Increased Costs
    	
82
    
	
3.05.
    	
Compensation for Losses
    	
84
    
	
3.06.
    	
Mitigation Obligations
    	
85
    
	
3.07.
    	
Circumstances Affecting Cdn. Dollar Availability
    	
85
    
	
 
    	
 
    
	
ARTICLE IV. CONDITIONS   PRECEDENT
    	
86
    
	
 
    	
 
    
	
4.01.
    	
Conditions to Closing
    	
86
    
	
4.02.
    	
Conditions to all Credit Extensions
    	
88
    

 

i

 

TABLE OF CONTENTS (Continued)

 

	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE V. REPRESENTATIONS   AND WARRANTIES
    	
89
    
	
 
    	
 
    
	
5.01.
    	
Existence, Qualification and Power; Compliance with Laws
    	
89
    
	
5.02.
    	
Authorization; No Contravention
    	
89
    
	
5.03.
    	
Governmental Authorization; Other Consents
    	
89
    
	
5.04.
    	
Binding Effect
    	
89
    
	
5.05.
    	
Financial Statements; No Material Adverse Effect
    	
90
    
	
5.06.
    	
Litigation
    	
90
    
	
5.07.
    	
No Default
    	
90
    
	
5.08.
    	
Ownership of Property
    	
90
    
	
5.09.
    	
Environmental Compliance
    	
91
    
	
5.10.
    	
Insurance
    	
91
    
	
5.11.
    	
Taxes
    	
91
    
	
5.12.
    	
ERISA Compliance
    	
92
    
	
5.13.
    	
Subsidiaries
    	
93
    
	
5.14.
    	
Margin Regulations; Investment Company Act
    	
93
    
	
5.15.
    	
Disclosure
    	
94
    
	
5.16.
    	
Intellectual Property; Licenses, Etc.
    	
94
    
	
5.17.
    	
Direct Benefit
    	
94
    
	
5.18.
    	
Solvency
    	
94
    
	
5.19.
    	
CPILP Note Agreements and Convertible Note Documents
    	
94
    
	
5.20.
    	
Labor Relations
    	
95
    
	
5.21.
    	
Undisclosed Liabilities; Absence of Burdensome Obligations
    	
95
    
	
5.22.
    	
Validity and Priority of Security Interest
    	
95
    
	
 
    	
 
    
	
ARTICLE VI. AFFIRMATIVE   COVENANTS
    	
95
    
	
 
    	
 
    
	
6.01.
    	
Financial Statements
    	
96
    
	
6.02.
    	
Certificates; Other Information
    	
96
    
	
6.03.
    	
Notices
    	
98
    
	
6.04.
    	
Payment of Obligations
    	
98
    
	
6.05.
    	
Preservation of Existence, Etc.
    	
99
    
	
6.06.
    	
Maintenance of Properties
    	
99
    
	
6.07.
    	
Maintenance of Insurance
    	
99
    
	
6.08.
    	
Compliance with Laws
    	
99
    
	
6.09.
    	
Books and Records
    	
99
    
	
6.10.
    	
Inspection Rights; Appraisals
    	
99
    
	
6.11.
    	
Compliance with Contractual Obligations
    	
100
    
	
6.12.
    	
Use of Proceeds
    	
100
    
	
6.13.
    	
Additional Guarantors
    	
100
    
	
6.14.
    	
Distribution of Cash from Subsidiaries
    	
100
    
	
6.15.
    	
Further Assurances
    	
101
    
	
6.16.
    	
Liquidity
    	
101
    
	
 
    	
 
    
	
ARTICLE VII. NEGATIVE   COVENANTS
    	
101
    

 

ii

 

TABLE OF CONTENTS (Continued)

 

	
 
    	
Page
    
	
 
    	
 
    
	
7.01.
    	
Liens
    	
101
    
	
7.02.
    	
Investments; Acquisition
    	
105
    
	
7.03.
    	
Indebtedness, and Issuance of Disqualified Stock
    	
106
    
	
7.04.
    	
Fundamental Changes
    	
109
    
	
7.05.
    	
Dispositions
    	
109
    
	
7.06.
    	
Restricted Payments and Prepayments of Permitted   Indebtedness
    	
111
    
	
7.07.
    	
Change in Nature of Business, or Project Documents
    	
112
    
	
7.08.
    	
Transactions with Affiliates
    	
112
    
	
7.09.
    	
Burdensome Agreements
    	
113
    
	
7.10.
    	
Use of Proceeds
    	
115
    
	
7.11.
    	
Financial Covenants
    	
115
    
	
7.12.
    	
Organic Documents
    	
115
    
	
 
    	
 
    
	
ARTICLE VIII. EVENTS OF   DEFAULT AND REMEDIES
    	
115
    
	
 
    	
 
    
	
8.01.
    	
Events of Default
    	
115
    
	
8.02.
    	
Remedies Upon Event of Default
    	
117
    
	
8.03.
    	
Application of Funds
    	
118
    
	
 
    	
 
    
	
ARTICLE IX. ADMINISTRATIVE   AGENT
    	
120
    
	
 
    	
 
    
	
9.01.
    	
Appointment and Authority
    	
120
    
	
9.02.
    	
Rights as a Lender
    	
120
    
	
9.03.
    	
Exculpatory Provisions
    	
121
    
	
9.04.
    	
Reliance by Administrative Agent
    	
122
    
	
9.05.
    	
Delegation of Duties
    	
122
    
	
9.06.
    	
Resignation of Administrative Agent
    	
122
    
	
9.07.
    	
Non-Reliance on Administrative Agent and Other Lenders
    	
123
    
	
9.08.
    	
No Other Duties, Etc.
    	
124
    
	
9.09.
    	
Administrative Agent May File Proofs of Claim
    	
124
    
	
9.10.
    	
Collateral and Guaranty Matters
    	
124
    
	
9.11.
    	
Other Agents; Arrangers, Etc.
    	
125
    
	
 
    	
 
    
	
ARTICLE X. MISCELLANEOUS
    	
125
    
	
 
    	
 
    
	
10.01.
    	
Amendments, Etc.
    	
125
    
	
10.02.
    	
Notices and Other Communications; Facsimile Copies
    	
127
    
	
10.03.
    	
No Waiver; Cumulative Remedies
    	
129
    
	
10.04.
    	
Expenses; Indemnity; Damage Waiver
    	
129
    
	
10.05.
    	
Payments Set Aside
    	
131
    
	
10.06.
    	
Successors and Assigns
    	
131
    
	
10.07.
    	
Treatment of Certain Information; Confidentiality
    	
136
    
	
10.08.
    	
Right of Set-off
    	
137
    
	
10.09.
    	
Interest Rate Limitation
    	
138
    
	
10.10.
    	
Counterparts
    	
138
    
	
10.11.
    	
Integration
    	
138
    

 

iii

 

TABLE OF CONTENTS (Continued)

 

	
 
    	
Page
    
	
 
    	
 
    
	
10.12.
    	
Survival of Representations and Warranties
    	
139
    
	
10.13.
    	
Severability
    	
139
    
	
10.14.
    	
Replacement of Lenders
    	
139
    
	
10.15.
    	
Canadian Borrower Service of Process
    	
140
    
	
10.16.
    	
Governing Law
    	
140
    
	
10.17.
    	
Waiver of Right to Trial by Jury
    	
141
    
	
10.18.
    	
Time of the Essence
    	
141
    
	
10.19.
    	
Entire Agreement
    	
141
    
	
10.20.
    	
Joint and Several Liability of Borrowers
    	
141
    
	
10.21.
    	
Contribution and Indemnification between the Borrowers
    	
142
    
	
10.22.
    	
Appointment of Borrower Agent as Agent for Requesting Loans   and Receipts of Loans and Statements
    	
143
    
	
10.23.
    	
USA Patriot Act Notice
    	
143
    
	
10.24.
    	
Binding Effect; Amendment and Restatement of Existing   Credit Agreement
    	
143
    
	
10.25.
    	
Judgment Currency
    	
144
    
	
10.26.
    	
Lender Action
    	
144
    

 

iv

 

SCHEDULES

 

	
1.01(a)
    	
Applicable   Designees
    
	
1.01(b)
    	
Existing   Letters of Credit
    
	
1.01(c)
    	
Guarantors
    
	
1.01(d)
    	
Pledgors
    
	
1.01(e)
    	
Projects
    
	
2.01
    	
Commitments   and Pro Rata Shares
    
	
5.06
    	
Litigation
    
	
5.09
    	
Environmental   Matters
    
	
5.13
    	
Subsidiaries   and Other Equity Investments
    
	
7.01
    	
Existing   Liens
    
	
7.02(a)
    	
Existing   Investments
    
	
7.03
    	
Existing   Indebtedness
    
	
7.08
    	
Affiliate   Transactions
    
	
10.02
    	
Administrative   Agent’s Office, Certain Addresses for Notices
    
	
10.06
    	
Processing   and Recordation Fees
    

 

EXHIBITS

 

Form of

 

	
A-1
    	
Notice   of Borrowing
    
	
A-2
    	
Notice   of Conversion/Continuation
    
	
B
    	
Note
    
	
C
    	
Compliance   Certificate
    
	
D
    	
Assignment   and Assumption
    
	
E
    	
Joinder   Agreement
    

 

v

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

This SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of August 2, 2013 (as amended, restated, supplemented or otherwise modified from time to time, this “Credit Agreement” or “Agreement”), is by and among ATLANTIC POWER CORPORATION, a corporation continued under the laws of the Province of British Columbia, Canada (the “Canadian Borrower”), ATLANTIC POWER GENERATION, INC., a Delaware corporation (“APG”) and ATLANTIC POWER TRANSMISSION, INC., a Delaware corporation (“APT”), (each of APG and APT is referred to individually herein as a “US Borrower” and collectively as the “US Borrowers” and together with the Canadian Borrower, each individually a “Borrower” and collectively, the “Borrowers”), each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), each of L/C Issuers from time to time party hereto in such capacity and BANK OF MONTREAL, as Administrative Agent.

 

The Administrative Agent and one or more of the Lenders have made available senior secured revolving credit and letter of credit facilities to the Borrowers, pursuant to the Existing Credit Agreement.

 

The Borrowers have requested that the Lenders amend and restate the Existing Credit Agreement and the Lenders are willing to do so on the terms and conditions set forth herein.

 

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

 

ARTICLE I.
 DEFINITIONS AND ACCOUNTING TERMS

 

1.01.       Defined Terms.  As used in this Agreement, the following terms shall have the meanings set forth below:

 

“2011 Note Documents” means the 2011 Note Indenture and each “Guarantee” and each “Note” (as defined in the 2011 Note Indenture) issued in connection therewith and all other instruments, certificates and other documents executed and delivered pursuant to or in connection therewith, as the same may be supplemented, amended or otherwise modified from time to time to the extent not prohibited by the terms of this Agreement.

 

“2011 Note Indenture” means that certain Trust Indenture providing for the issuance of the 2011 Notes, dated November 4, 2011 among the Canadian Borrower, the guarantors a party thereto and Wilmington Trust, National Association, in its capacity as trustee thereunder.

 

“2011 Notes” means those certain (a) unsecured 9.0% Senior Notes of the Canadian Borrower due 2018, Series A and (b) unsecured 9.0% Senior Notes of the Canadian Borrower due 2018, Series B, issued under the 2011 Note Indenture on November 4, 2011, in connection with the 2011 Offering Memorandum in the aggregate amount of $460,000,000.

 

 

“2011 Offering Memorandum” means that certain Offering Memorandum of the Canadian Borrower with respect to the issuance of the 2011 Notes, as supplemented.

 

“Acceptable Project Development Company Projections” means quarterly EBITDA and cash flow projections with respect to a Subsidiary that is a Project Development Company assuming such Project Development Company has reached Commercial Operations, in each case, prepared by the Borrowers in good faith and reasonably acceptable to the Administrative Agent.

 

“Acceptable Security Interest” in any Property means a Lien which (a) exists in favor of the Collateral Agent or the Administrative Agent, as applicable, for the benefit of any of the Secured Parties, (b) is superior to all Liens or rights of any other Person (other than Liens specifically permitted under Section 7.01) in the Property or Collateral encumbered thereby, (c) secures the Obligations, and (d) is perfected and enforceable.

 

“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person (other than a Person that is a Subsidiary) or any subsequent investment made in a Person, division or line of business previously acquired in an Acquisition, (b) the acquisition of in excess of 50% of the Capital Stock of any Person (other than a Person that is a Subsidiary), or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person (other than a Person that is a Subsidiary).

 

“Acquisition (CPILP)” means the Acquisition by the Canadian Borrower of 100% of the Capital Stock of CPILP and CPILP GP pursuant to the Acquisition Agreement (CPILP) and the liquidation of CPI Investments, Inc. into the Canadian Borrower.

 

“Acquisition Agreement (CPILP)” means that certain Arrangement Agreement by and among CPILP, CPILP GP, CPI Investments, Inc., and the Canadian Borrower dated as of June 20, 2011 and effective on November 5, 2011.

 

“Act” means the USA Patriot Act (Title III of Pub. L 107-56 (signed into law on October 26, 2001)).

 

“Administrative Agent” means Bank of Montreal in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify the Borrowers and the Lenders.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.  For purposes of this definition, “control” (including, with correlative

 

2

 

meanings, the terms “controlling”, “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

 

“Aggregate Commitments” means the sum of (a) the Canadian Borrower Commitments of all the Lenders and (b) the US Borrower Commitments of all the Lenders, in each case, as the same may be readjusted from time to time after the date hereof at the discretion of the Administrative Agent and acceptable to the Borrowers.

 

“Agreement Currency” has the meaning set forth in Section 10.25.

 

“Annual Budget” has the meaning set forth in Section 6.01(c).

 

“Anti-Terrorism Laws” means any Laws relating to terrorism or money laundering, including the Act.

 

“APG” has the meaning set forth in the introductory paragraph hereto.

 

“APH” means Atlantic Power Holdings, Inc., a Delaware corporation and a Wholly-Owned Subsidiary of APG.

 

“APT” has the meaning set forth in the introductory paragraph hereto.

 

“Applicable Designee” means any office, branch or Affiliate of a Lender designated thereby from time to time with the consent of the Administrative Agent (which consent shall not be unreasonably withheld, conditioned or delayed) to fund Loans or issue Letters of Credit to or for the benefit of the Borrowers.  As of the Closing Date, the Applicable Designees of each Lender are set forth on Schedule 1.01(a) (which schedule may be updated from time to time upon written notice by any Lender to the Administrative Agent).  Any assignment by a Lender of all or a portion of its Commitment to fund or participate in Loans or Letters of Credit to or for the benefit of the Borrowers to an Applicable Designee shall be effected by delivering to the Administrative Agent an addendum executed by such Lender and its Applicable Designee, in form and substance satisfactory to the Administrative Agent.  For all purposes of this Agreement, any designation of an Applicable Designee by a Lender shall not affect such Lender’s rights and obligations with respect to its Commitment and the Loan Parties, the other Lenders and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and the other Loan Documents, except as otherwise expressly permitted in this Agreement or in the applicable addendum.

 

“Applicable Rate” means, at any time, the appropriate applicable percentages corresponding to the Canadian Borrower’s Public Debt Ratings in effect as of the most recent Calculation Date, as shown below:

 

3

 

	
Pricing
   Level
    	
 
    	
Borrower’s Public
   Debt Rating
    	
 
    	
Applicable
   Percentage for
   Eurodollar Loans,
   BA Stamping Fee
   Rate and Letters of
   Credit
    	
 
    	
Applicable
   Percentage for
   Base Rate Loans
    	
 
    	
Applicable
   Percentage for
   Commitment
   Fees
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
I.
    	
 
    	
BB+ or higher from S&P or Ba1 or higher from Moody’s
    	
 
    	
2.75
    	
%
    	
1.75
    	
%
    	
0.75
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
II.
    	
 
    	
BB from S&P or Ba2 from Moody’s
    	
 
    	
3.00
    	
%
    	
2.00
    	
%
    	
0.875
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
III.
    	
 
    	
BB- from S&P or Ba3 from Moody’s
    	
 
    	
3.25
    	
%
    	
2.25
    	
%
    	
1.00
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
IV.
    	
 
    	
B+ from S&P or B1 from Moody’s
    	
 
    	
4.00
    	
%
    	
3.00
    	
%
    	
1.375
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
V.
    	
 
    	
B from S&P or B2 from Moody’s
    	
 
    	
4.25
    	
%
    	
3.25
    	
%
    	
1.50
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
VI.
    	
 
    	
B- from S&P or B3 from Moody’s
    	
 
    	
4.50
    	
%
    	
3.50
    	
%
    	
1.625
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
VII.
    	
 
    	
Less than B- from S&P or Less than B3 from Moody’s
    	
 
    	
4.75
    	
%
    	
3.75
    	
%
    	
1.75
    	
%
    

 

The Applicable Rate for Eurodollar Loans, Letters of Credit, Bankers’ Acceptances, and Base Rate Loans and the Commitment Fees shall, in each case, be determined and adjusted on the date (each a “Calculation Date”) 5 Business Days after the date there is a change in the Canadian Borrower’s Public Debt Rating.  Each determination of the Applicable Rate shall be effective from one Calculation Date until the next Calculation Date.  Any adjustment in the Applicable Percentage shall be applicable to all existing outstanding Loans as well as any new Loans made, in each case, other than with respect to the applicable BA Stamping Fee in connection with outstanding Bankers’ Acceptances or BA Equivalent Notes.

 

In the event that the Public Debt Ratings of S&P and Moody’s do not correspond to the same Pricing Level, then the higher of the two ratings shall determine the Pricing Level, except that if the Public Debt Ratings differ by more than one Pricing Level, the Pricing Level that is one Pricing Level lower than the Pricing Level corresponding to the higher of such ratings shall determine the Pricing Level.  If only one of S&P and Moody’s shall have in effect a Public Debt Rating, the Pricing Level shall be determined by reference to the available rating.  In the event the Canadian Borrower fails to maintain

 

4

 

a Public Debt Rating with S&P and Moody’s, the Applicable Rate shall be Pricing Level VII from the Business Day immediately succeeding the date that the Canadian Borrower fails to maintain a Public Debt rating until the Business immediately succeeding the date that the Canadian Borrower reestablishes such Public Debt Rating.

 

The Canadian Borrower shall promptly deliver to the Administrative Agent information regarding any change in the Canadian Borrower’s Public Debt Rating, as determined by S&P and Moody’s, that would change the existing Pricing Level pursuant to the preceding paragraph.

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender, or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“Arranger” means each of BMO Capital Markets, LLC, Union Bank, Canada Branch, and The Toronto-Dominion Bank, in their respective capacities as joint lead arranger and joint bookrunner.

 

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

 

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit D or any other form approved by the Administrative Agent.

 

“Assignment Fee” has the meaning specified in Schedule 10.06.

 

“Attorney Costs” means and includes all reasonable and documented fees, out of pocket expenses and disbursements of any law firm or other external counsel incurred by the Administrative Agent, Collateral Agent, the Arrangers and, if applicable, any Lender.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized Lease Obligations of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease.

 

“Audited Financial Statements” means the audited consolidated balance sheet of the Canadian Borrower and its Subsidiaries for the fiscal year ended December 31, 2012, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Canadian Borrower and its Subsidiaries, including the notes thereto.

 

“Auto-Renewal Letter of Credit” has the meaning specified in Section 2.03(b)(iii).

 

5

 

“Availability” means the amount by which the Aggregate Commitments exceeds Total Outstandings.

 

“Availability Period” means the period from and including the Closing Date to the earliest of (a) 1 Business Day prior to the Maturity Date, (b) the date of termination of the Aggregate Commitments pursuant to Section 2.05, and (c) the date of termination of the commitment of each Lender to make Loans and of the obligation of the L/C Issuers to make L/C Credit Extensions, pursuant to Section 8.02.

 

“Available Aggregate Commitment” means, at any time, the Aggregate Commitment then in effect minus the aggregate Outstanding Amount of Loans and L/C Obligations at such time.

 

“Available Cash” means unrestricted cash of any Subsidiary that such Subsidiary is not contractually or legally restricted or otherwise prohibited from distributing to the holders of Capital Stock in such Subsidiary.

 

“BA Discount Proceeds” means, with respect to a particular Bankers’ Acceptance, the following amount:

 

	
 
    	
 F
    
	
1 + 
    	
D   x T
    
	
 
    	
     Y
    

 

Where:

 

F                                         means the face amount of such Bankers’ Acceptance;

 

D                                       means the applicable BA Discount Rate for such Bankers’ Acceptance;

 

T                                        means the number of days to maturity of such Bankers’ Acceptance; and

 

Y                                       means 365,

 

with the amount as so determined being rounded to the nearest whole cent, with one-half of one cent being rounded up.

 

“BA Discount Rate” means, for any date of disbursement in respect of Bankers’ Acceptances and BA Equivalent Notes to be purchased pursuant to Article II (a) for Schedule I Lenders, CDOR, (b) for any Lenders that are not Schedule I Lenders, the lesser of (i) the average of all such Lenders’ bid for Bankers’ Acceptances with a term equal to the term selected by the Borrower Agent and (ii) the sum of (x) the BA Discount Rate for Schedule I Lenders determined in accordance with clause (a) above and (y) 0.10% per annum.

 

“BA Equivalent Note” has the meaning specified in Section 2.06(a).

 

6

 

“BA Lender” means any Lender that is a bank chartered under the Bank Act (Canada) and that has not notified the Administrative Agent in writing that it is unwilling or unable to accept Drafts as provided for in Article II.

 

“BA Stamping Fee” means the amount calculated by multiplying the face amount of a Bankers’ Acceptance or a BA Equivalent Note by the BA Stamping Fee Rate and then multiplying the result by a fraction, the numerator of which is the number of days to elapse from and including the date of acceptance of such Bankers’ Acceptance or purchase of such BA Equivalent Note by a Lender up to but excluding the maturity date of such Bankers’ Acceptance or BA Equivalent Note, and the denominator of which is the number of days in the calendar year in question.

 

“BA Stamping Fee Rate” means, with respect to a Bankers’ Acceptance or a BA Equivalent Note, the applicable percentage rate per annum indicated below the reference to “BA Stamping Fee Rate” in the definition of “Applicable Rate”.

 

“Bank of Montreal” means Bank of Montreal, and its successors.

 

“Bank Product” means any of the following products, services or facilities extended to any Loan Party by the Administrative Agent, any Lender or any of their respective Affiliates:  (a) Cash Management Services, (b) commercial credit card and merchant card services and comparable products, and (c) other banking products or services as may be requested by any Loan Party, other than Letters of Credit or Indebtedness owed to any Lender in connection with the any credit facility, loan facility or other commercial loan arrangement other than this Agreement; provided, however, that the applicable Secured Party agrees to use commercially reasonably efforts to provide written notice to the Administrative Agent of the existence of such Bank Product promptly following the establishment of such Bank Product (which notice shall be deemed given automatically upon the creation or incurrence of any Bank Product provided by the Administrative Agent, Bank of Montreal or any of their Affiliates).

 

“Bank Product Debt” means Indebtedness and other obligations of a Loan Party relating to Bank Products.  The amount of the Bank Product Debt may be changed from time to time upon written notice to the Administrative Agent by the Secured Party and the Loan Party; provided that any portion of Bank Product Debt that is secured may not be voluntarily increased at any time that any Default or Event of Default exists.

 

“Bankers’ Acceptance” means a depository bill, as defined in the Depository Bills and Notes Act (Canada), in Cdn. Dollars that is in the form of a Draft signed by the Canadian Borrower and accepted by a BA Lender as contemplated under Section 2.06, or for Lenders not participating in clearing services as contemplated in that Act, a draft or other bill of exchange in Cdn. Dollars that is signed on behalf of a Borrower and accepted by a Lender.

 

“Bankruptcy Code” means the Bankruptcy Reform Act of 1978 (11 U.S.C. § 101, et seq.).

 

7

 

“Base Rate” means the US Base Rate, the US Prime Rate and/or the Cdn. Prime Rate, as applicable.

 

“Base Rate Loan” means US Base Rate Loans, US Prime Rate Loans and/or Cdn. Prime Rate Loans, as applicable.

 

“BMO ISDA Master Agreement” means that certain ISDA Master Agreement and the Schedule thereto, dated as of November 9, 2004, documenting the FX swap transaction entered into between Bank of Montreal and APH on November 9, 2004 (as amended from time to time).

 

“Borrowed Money” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

 

(a)                                 all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

 

(b)                                 all direct or contingent obligations of such Person arising under funded letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

 

(c)                                  Attributable Indebtedness; and

 

(d)                                 all Guarantees of such Person in respect of any of the foregoing.

 

“Borrower” has the meaning specified in the introductory paragraph hereto.

 

“Borrower Agent” has the meaning specified in Section 10.22.

 

“Borrower Materials” has the meaning specified in Section 6.02.

 

“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type and, in the case of Eurocurrency Rate Loans or Bankers’ Acceptances (or BA Equivalent Notes), having the same Interest Period, made by each of the Lenders pursuant to Section 2.01.

 

“Business Day” means any day of the year, other than a Saturday, Sunday or other day on which banks are required or authorized to close in Toronto, Ontario, Canada or Calgary, Alberta, Canada, and where used in the context of (i) an advance of US$, is also a day on which banks are required or authorized to close in New York, New York or Chicago, Illinois and (ii) a Eurocurrency Rate Loan, is also a day on which banks are required or authorized to close in New York, New York and on which dealings are carried on in the London interbank market in respect of transactions in U.S. Dollars.

 

“Canadian Borrower” has the meaning specified in the introductory paragraph hereto.

 

8

 

“Canadian Borrower Commitment” means, as to each Lender, its obligation to (a) make Loans to the Canadian Borrower pursuant to Section 2.01, and (b) purchase participations in L/C Obligations issued on behalf of any of the Borrowers; in each case, in an aggregate principal amount not to exceed $25,000,000 other than with respect to L/C Borrowings in accordance with Section 2.01 and in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement; in each case as the Canadian Borrower Commitments may be readjusted from time to time by the Administrative Agent and acceptable to the Borrowers in connection with a commensurate readjustment of the US Borrower Commitments; provided, that in no event shall any such readjustment result in the aggregate Commitment of any Lender exceeding the aggregate Commitment amount for such Lender on Schedule 2.01.

 

“Canadian Collateral” means all Property of the Loan Parties organized under the laws of Canada or any Province or Territory thereof described in any Collateral Documents and intended under the terms of the Collateral Documents to be subject to Liens in favor of the Collateral Agent for the benefit of the Secured Parties.

 

“Canadian Guarantors” means the Canadian Borrower, CPILP, CPILP GP, and any Subsidiary of the Canadian Borrower that is organized under the laws of Canada or any Province thereof and is required to deliver a Guaranty under Section 6.13.

 

“Canadian Guaranty” means the Guaranty made by the Canadian Guarantors in favor of the Administrative Agent for the benefit of the Secured Parties, substantially in the form delivered on the Initial Closing Date, as the same may be joined from time to time by additional Guarantors after the Initial Closing Date.

 

“Capital Stock” means: (i) in the case of a corporation, corporate stock; (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (iii) in the case of a partnership or limited liability company, partnership, manager or membership interests (whether general or limited); and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

“Capitalized Lease Obligations” means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP; provided that any obligations existing on the Closing Date (i) which were not included on the balance sheet of the Borrowers and their Subsidiaries as capital lease obligations and (ii) which are subsequently recharacterized for accounting purposes as capital lease obligations, shall for all purposes of this Agreement not be treated as Capitalized Lease Obligations.

 

9

 

“Cash Collateral” means cash, and any interest or other income earned thereon, that is delivered to the Administrative Agent to Cash Collateralize any Obligations.

 

“Cash Collateralize” means the delivery of cash to the Administrative Agent, as security for the payment of the Obligations, (a) with respect to Letters of Credit, in an amount equal to 103% of the aggregate L/C Obligations (or, in the case of Section 2.03(a)(ii)(B) or Section 2.04(b), 103% of the applicable portion of the L/C Obligations referred to therein), in each case, in the corresponding currency of the applicable Letter of Credit, or, (b) with respect to any other Obligation, 103% of the applicable US Dollar or Cdn. Dollar amount of any other Obligations.  “Cash Collateralization” has a correlative meaning.

 

“Cash Equivalents” means,

 

(a)                                 (i) Cdn. Dollars and foreign currency exchanged into Cdn. Dollars within 180 days or (ii) U.S. Dollars and foreign currency exchanged into U.S. Dollars within 180 days;

 

(b)                                 securities issued or directly and fully guaranteed or insured by the U.S. or Canadian government or any agency or instrumentality thereof with maturities of one year or less from the date of acquisition;

 

(c)                                  certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $500,000,000 and whose long-term debt is rated at least “A” or the equivalent thereof by Moody’s or S&P;

 

(d)                                 commercial paper issued by a corporation (other than an Affiliate of the Canadian Borrower or an Affiliate of a Subsidiary of the Borrower) rated at least “A” or the equivalent thereof by Moody’s or S&P and in each case maturing within one year after the date of acquisition;

 

(e)                                  readily marketable direct obligations issued by or guaranteed by the Government of the United States or Canada, any state of the United States of America or any province of Canada or any political subdivision thereof having one of the two highest rating categories obtainable from Moody’s or S&P with maturities of one year or less from the date of acquisition; and

 

(f)                                   investment funds investing at least 95% of their assets in securities of the types described in clauses (a) through (e) above.

 

“Cash Management Services” means any services provided from time to time by any Lender or any of its Affiliates to any Loan Party in connection with operating, collections, payroll, trust, or other depository or disbursement accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled

 

10

 

disbursement, overdraft, depository, information reporting, lockbox and stop payment services.

 

“Cdn. Dollar Equivalent” means, at any time, with respect to any amount denominated in US Dollars, the equivalent amount thereof in Cdn. Dollars as determined by the Administrative Agent at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of Cdn. Dollars with US Dollars.

 

“Cdn. Dollar Extensions” has the meaning set forth in Section 3.07.

 

“Cdn. Dollar Letter of Credit” means any letter of credit issued hereunder for the account of a Borrower in Cdn. Dollars and shall include, without duplication, the Existing Letters of Credit denominated in Cdn Dollars.  A Cdn. Dollar Letter of Credit may be a commercial letter of credit or a standby letter of credit; provided that with respect to a Cdn. Dollar Letter of Credit of which Morgan Stanley Bank, N.A. or its Applicable Designees is the L/C Issuer, such Cdn. Dollar Letter of Credit shall be standby letters of credit.

 

“Cdn. Dollar Loan” means a Loan that bears interest based on the Cdn. Prime Rate or Bankers’ Acceptances or BA Equivalent Notes.

 

“Cdn. Dollars” and “Cdn$” means the lawful money of Canada.

 

“Cdn. GAAP” means generally accepted accounting principles in Canada as determined in the Handbook of by the Canadian Institute of Chartered Accountants or such other principles as may be approved by a significant segment of the accounting profession in Canada, including International Financial Reporting Standards, that are applicable to the circumstances as of the date of determination, consistently applied.

 

“Cdn. Honor Date” has the meaning set forth in Section 2.03(c)(i)(B).

 

“Cdn. Prime Rate” means, for any day, a fluctuating rate per annum equal to the higher of (a) the rate of interest in effect for such day as publicly announced from time to time by Bank of Montreal as the reference rate of interest that it employs in order to determine the rate of interest it will charge for demand loans in Cdn. Dollars to its customers in Canada and which it publicly announces as its Cdn. Dollar “prime rate” and (b) CDOR on the particular day for one-month bankers’ acceptances, plus 1.0% per annum.  Any change in such rate announced by Bank of Montreal shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“Cdn. Prime Rate Loan” means a Loan that bears interest based on the Cdn. Prime Rate.

 

“Cdn. Unreimbursed Amount” has the meaning set forth in Section 2.03(c)(i)(B).

 

“CDOR” means, for any day and relative to Bankers’ Acceptances or BA Equivalent Notes, the stated average of the annual rates that appears on the Reuters

 

11

 

Screen CDOR page with respect to banks named in Schedule I to the Bank Act (Canada) as of 10:00 a.m. (Toronto time) on such day (or, if such day is not a Business Day, as of 10:00 a.m. on the next preceding Business Day) for bankers’ acceptances issued on that day for a term equal or comparable to the term of such Bankers’ Acceptances or BA Equivalent Notes, provided that, if such rate does not appear on the Reuters Screen CDOR page at such time on such day, CDOR for such day will be the discount rate as of 10:00 a.m. on such day at which the Administrative Agent is then offering to purchase bankers’ acceptances accepted by it having an aggregate face amount equal to the aggregate face amount of, and with a term equal or comparable to the term of, such Bankers’ Acceptances or BA Equivalent Notes.

 

“CERCLA” means the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. § 9601 et seq.).

 

“CFC” means a controlled foreign corporation within the meaning of Section 957(a) of the Code and any entity that owns 65% or more of the stock of a CFC so long as such entity has no assets other than the stock of CFCs, obligations, indebtedness or receivables of or attributable to such CFCs and de minimis assets.

 

“Change in Law” means, in respect of any Lender, the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority having jurisdiction over such Lender, or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority having jurisdiction over such Lender; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

“Change of Control” means, with respect to any Person, an event or series of events by which:

 

(a)                                 any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 35% or more of the equity securities of the Canadian Borrower entitled to vote for the 

 

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election of the members of the board of directors or equivalent governing body of the Canadian Borrower on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or

 

(b)                                 during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of such Person cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors); or

 

(c)                                  the Canadian Borrower shall cease to directly own 100% of the Capital Stock of APG, APT, CPILP GP or CPILP (other than any general partnership interests owned by CPILP GP).

 

“Closing Date” means August 2, 2013.

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means, collectively, the US Collateral and the Canadian Collateral.

 

“Collateral Agency and Intercreditor Agreement” means the Third Amended and Restated Collateral Agency and Intercreditor Agreement, dated as of the Initial Closing Date by and among the Administrative Agent, the Convertible Secured Trustee and the Collateral Agent and acknowledged by the Loan Parties (as the same may be amended, restated, supplemented or otherwise modified from time to time).

 

“Collateral Agent” means Bank of Montreal, in its capacity as collateral agent under any of the Loan Documents, or any other successor collateral agent.

 

“Collateral Documents” means the Pledge Agreements, the Guaranties, the Mortgages, the Security Agreements, the Deposit and Disbursement Agreement, the Collateral Agency and Intercreditor Agreement and all other documents, instruments and agreements now or hereafter securing (or given with the intent to secure) any Obligations or evidencing or relating to any Cash Collateralization undertaken hereunder, together with any and all UCC financing statements, and other instruments, documents and

 

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agreements as may be executed and delivered in order to perfect, protect or enforce the Liens created thereby.

 

“Commercial Operations” means the achievement of term loan conversion under the terms of the applicable Project Finance Indebtedness of a Project Development Company.

 

“Commitment” means, as to each Lender, the sum of its Canadian Borrower Commitments and US Borrower Commitments, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01.

 

“Commitment Fee” means the fee payable pursuant to Section 2.08(a) herein.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

 

“Compliance Certificate” means a certificate substantially in the form of Exhibit C.

 

“Consolidated EBITDA” means, for any Subject Period, for the Canadian Borrower and its Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for such period plus (a) without duplication, the following to the extent deducted in calculating such Consolidated Net Income (and in each case, with respect to any Subsidiary that is not a Wholly-Owned Subsidiary, in an amount reflecting the pro rata percentage of the Capital Stock owned by the Borrowers or their Subsidiaries in such Subsidiary):

 

(i)                                     Consolidated Interest Expense for such period, amortization of deferred financing fees and original issue discount,

 

(ii)                                  provisions for taxes based on income, profits or capital gains of the Canadian Borrower and its Subsidiaries, including federal, state, local and foreign income taxes, franchise taxes and foreign withholding taxes paid or accrued by the Canadian Borrower and its Subsidiaries for such period, including penalties and interest related to such taxes or arising from any tax examinations,

 

(iii)                               depreciation and amortization expense,

 

(iv)                              any net after-tax (A) extraordinary or (B) nonrecurring gains or losses or income or expenses (less all fees and expenses relating thereto) including, without limitation, any severance expenses, and fees, expenses or charges related to any offering of any equity interests of the Canadian Borrower, any Investment, any Acquisition or Indebtedness permitted to be incurred hereunder or refinancings thereof (in each case, whether or not successful), including any such fees, expenses or charges related to the Transactions,

 

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(v)                                 any net loss from disposed, abandoned or discontinued operations, and assets for sale to the extent such loss is a non-cash loss,

 

(vi)                              all non-cash losses or expenses included or deducted in calculating net income (or loss) for such period, including, without limitation, any non-cash loss or expense associated with any employee incentive plans due to the application of FAS No. 106 regarding post-retirement benefits, FAS No. 133 regarding hedging activity, FAS No. 142 regarding impairment of goodwill, FAS No. 150 regarding accounting for financial instruments with debt and equity characteristics and non-cash expenses deducted as a result of any grant of equity interests to employees, officers or directors, but excluding any non-cash loss or expense (A) that is an accrual of a reserve for a cash expenditure or payment to be made, or anticipated to be made, in a future period or (B) relating to a write-down, write-off or reserve with respect to Accounts and Inventory (as such terms are defined in the UCC),

 

(vii)                           reasonable and customary documented fees, expenses and other costs related to any Acquisition consented to by the Required Lenders and otherwise permitted under the terms of this Agreement (whether or not successful) after the Closing Date,

 

minus (b) without duplication and to the extent increasing Consolidated Net Income, non-cash gains.

 

For the purposes of calculating Consolidated EBITDA for any period of four consecutive fiscal quarters (each, a “Reference Period”) pursuant to any determination of the Total Leverage Ratio, (i) if at any time during such Reference Period the Canadian Borrower or any of its Subsidiaries shall have made any Material Disposition, the Consolidated EBITDA for such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such Reference Period and (ii) if during such Reference Period the Canadian Borrower or any of its Subsidiaries shall have made a Material Acquisition, Consolidated EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto as if such Material Acquisition occurred on the first day of such Reference Period.  As used in this definition, “Material Acquisition” means any Acquisition with an impact or effect on Consolidated EBITDA of at least 10% on a pro forma basis and “Material Disposition” means any Disposition in with an impact or effect on Consolidated EBITDA of at least 10% on a pro forma basis;

 

“Consolidated Interest Expense” means, for any period, for the Canadian Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium payments, debt discount, fees, charges, all commissions, discounts and other fees and charges (including, without limitation, with respect to letters of credit and bankers’ acceptance financing and net costs under Swap Contracts in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP) of the

 

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Canadian Borrower and its Subsidiaries in connection with Borrowed Money, in each case to the extent paid in cash and treated as interest in accordance with GAAP and (b) the portion of rent expense of the Canadian Borrower and its Subsidiaries with respect to such period under capital leases that is paid in cash and treated as interest in accordance with GAAP;  provided that with respect to the calculation of the Interest Coverage Ratio, “Interest Expense” shall not include (a) any interest payable on account of any intercompany Indebtedness or (b) any make-whole premium required to be paid in connection with the prepayment of the $150,000,000 CPI US Notes due August 15, 2015, to the extent such make-whole is required to be included as interest under GAAP.

 

“Consolidated Net Income” means, for any period, for the Canadian Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP, the net income (or loss) of the Canadian Borrower and its Subsidiaries (excluding extraordinary gains and extraordinary losses) for that period; provided that to the extent Consolidated Net Income does not include net income from minority-owned interests or other equity interests to the Canadian Borrower and its Subsidiaries of the Borrowers, Consolidated Net Income shall be increased by the amount of dividends or distributions or other payments that are paid in cash or Cash Equivalents (or to the extent subsequently converted into cash or Cash Equivalents) to the Canadian Borrower and its Subsidiaries or allocated net income or distributions from minority owned interests or other equity interests to the Canadian Borrower and its Subsidiaries thereof in respect of such period; provided, however, that with respect to the sale on or after November 2, 2012 of any minority-owned interest or other equity interest in an entity that is not a Subsidiary, the proceeds of such sale, whether paid to a Borrower, a Subsidiary in cash, in Cash Equivalent Investments, in-kind or as a dividend, distribution or return on equity, shall not be included in the determination of Consolidated Net Income (except that, any dividend or distribution which, but for such sale, would have been paid to any Borrower or Subsidiary within the fiscal quarter in which or after which such sale occurred and which was reflected in the sale price for such minority-owned interest or other equity interest shall be included in the determination of Consolidated Net Income to the extent actually paid or distributed to a Borrower or a Subsidiary).

 

“Consolidated Total Net Debt” means, as of any date of determination, the aggregate principal amount of Indebtedness of the Canadian Borrower and its Subsidiaries that are consolidated entities of the Canadian Borrower in accordance with GAAP outstanding on such date, in an amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP (but excluding (x) the effects of any discounting of Indebtedness resulting from the application of purchase accounting in connection with the Transactions or any Permitted Acquisition and (y) the amount of any Non-Recourse Project Finance Indebtedness of any Subsidiary that is not a Wholly-Owned Subsidiary that is in excess of the pro rata percentage of the Capital Stock owned by the Borrowers or their Subsidiaries in such Subsidiary, in each case, to the extent such Indebtedness would be reflected on a balance sheet of the Borrowers prepared as of such date on a consolidated basis in accordance with GAAP (the excluded portion of such Non-Recourse Project Finance Indebtedness, “Excluded Non-Recourse Debt”)), consisting of Indebtedness for Borrowed Money, Attributable Indebtedness, and debt obligations evidenced by promissory notes or similar instruments,

 

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minus the aggregate amount of unrestricted cash and Cash Equivalents of the Canadian Borrower and its Subsidiaries that would be reflected on a balance sheet of the Canadian Borrower and its Subsidiaries as of such date (in each case free and clear of all Liens, other than nonconsensual Liens permitted by Section 7.01) to the extent such cash or Cash Equivalents is held in a deposit account or securities account in which the Canadian Borrower or its Subsidiaries have granted a first priority security interest to the Collateral Agent or Administrative Agent, as applicable, for the benefit of the Secured Parties pursuant to a Collateral Document (for the avoidance of doubt, any unrestricted cash and Cash Equivalents maintained by the Borrowers in satisfaction of Section 6.16 shall be deemed unrestricted cash and Cash Equivalents for purposes of this clause); provided that (i) Consolidated Total Net Debt shall not include Indebtedness in respect of letters of credit, except to the extent of unreimbursed amounts thereunder; provided that any unreimbursed amount under letters of credit shall not be included as Consolidated Total Net Debt until 3 Business Days after such amount is drawn, (ii) obligations under Swap Contracts entered into for non-speculative purposes shall not constitute Consolidated Total Net Debt until such time as such obligations have become due and payable in accordance with the terms of such Swap Contract and such obligations have not been paid or otherwise satisfied on the earlier of (x) five Business Days after such amounts have become due and (y) beyond any grace period set forth in such Swap Contract after such amounts have become due (provided that following the expiration of such grace period solely the amounts outstanding will be included in the calculation of Consolidated Total Net Debt), and (iii) the aggregate principal amount of the Loans during any relevant period shall be calculated based on the outstanding amount of the Loans on the last day of such period.

 

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its Property is bound.

 

“Control,” “Controlling” and “Controlled” have the meanings specified in the definition of “Affiliate.”

 

“Convertible Debentures” means collectively, the Convertible Debentures (2006), the Convertible Debentures (2009), the Convertible Debentures (2010) and any other convertible debentures issued under the Convertible Note Indentures or any supplement or amendment thereto.

 

“Convertible Debentures (2006)” means the “Initial Debentures” (as defined in the Convertible Note Indenture (2006)) issued pursuant to the Convertible Note Indenture (2006).

 

“Convertible Debentures (2009)” means the “Initial Debentures” (as defined in the Convertible Note Indenture (2009)) issued pursuant to the Convertible Note Indenture (2009).

 

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“Convertible Debentures (2010)” means the “Series B Debentures” (as defined in the Convertible Note Indenture (2009)) issued pursuant to the Convertible Note Indenture (2009).

 

“Convertible Note Indenture (2006)” means that certain Trust Indenture providing for the issue of Convertible Secured Debentures dated October 11, 2006 between the Canadian Borrower and Computershare Trust Company of Canada, in its capacity as trustee thereunder as supplemented by a First Supplemental Indenture to the Trust Indenture dated November 27, 2009 between the Canadian Borrower and Computershare Trust Company of Canada, in its capacity as trustee thereunder.

 

“Convertible Note Indenture (2009)” means that certain Trust Indenture providing for the issue of 6.25% Convertible Unsecured Subordinated Debentures dated December 17, 2009 between the Canadian Borrower and Computershare Trust Company of Canada, in its capacity as trustee thereunder as supplemented by a First Supplemental Indenture to the Trust Indenture providing for the issue of 5.60% Series B Convertible Unsecured Subordinated Debentures dated October 20, 2010 between the Canadian Borrower and Computershare Trust Company of Canada, in its capacity as trustee thereunder.

 

“Convertible Note Indentures” means, collectively, the Convertible Note Indenture (2006), the Convertible Note Indenture (2009), and the Convertible Note Indenture (2010), each as amended, supplemented or modified from time to time.

 

“Convertible Secured Trustee” means the “Debenture Trustee” as defined in the Convertible Note Indenture (2006).

 

“CP Entities” means all entities acquired by the Canadian Borrower pursuant to the Acquisition (CPILP).

 

“CPI Preferred Equity” means Atlantic Power Preferred Equity (f/k/a CPI Preferred Equity Ltd.), a corporation incorporated under the Business Corporations Act (Alberta).

 

“CPI Preferred Stock” means (a) the Series I 4.85% Cumulative Redeemable Preferred Shares of CPI Preferred Equity issued on May 25, 2007 and guaranteed by CPILP in the aggregate amount outstanding on the Closing Date of Cdn$ 125,000,000 and (b) 7.0% Cumulative Rate Reset Preferred Shares of CPI Preferred Equity issued on November 2, 2009 and guaranteed by CPILP in the aggregate amount outstanding on the Closing Date of Cdn$ 100,000,000.

 

“CPI US GP” means Atlantic Power (US) GP (f/k/a CPI Power (US) G.P.), a Delaware general partnership.

 

“CPI US Note Purchase Agreement” means the Note Purchase and Parent Guaranty Agreement of CPI US GP (as successor in interest to EPCOR Power (US) G.P.) as issuer, CPILP (as successor in interest to EPCOR Power L.P.), as guarantor dated

 

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August 15, 2007 in connection with the issuance of the CPI US Notes and as amended by that certain First Amendment dated as of June 22, 2012.

 

“CPI US Notes” means (a) the unsecured 5.87% Senior Guaranteed Notes, Series A in an aggregate principal amount of $150,000,000 outstanding on the Closing Date and due August 15, 2015, and (b) the unsecured 5.97% Senior Guaranteed Notes, Series B in an aggregate principal amount of $75,000,000 outstanding on the Closing Date and due August 15, 2017.

 

“CPILP” means Atlantic Power Limited Partnership (f/k/a Capital Power Income L.P.), a limited partnership established under the laws of the Province of Ontario, Canada.

 

“CPILP Debentures” means the unsecured 5.95% “Debentures” (as defined in the CPILP Indenture) in an aggregate principal amount of Cdn$210,000,000 outstanding on the Closing Date and due 2036.

 

“CPILP GP” means Atlantic Power GP Inc. (f/k/a CPI Income Services Ltd.), a corporation incorporated under the Canada Business Corporations Act.

 

“CPILP Indenture” means the Trust Indenture of CPILP (as successor in interest to EPCOR Power L.P.) as issuer and CIBC Mellon Trust Company as Trustee and dated June 15, 2006 in connection with the issuance of the CPILP Debentures, as the same is amended, supplemented or modified from time to time.

 

“CPILP Note Agreements” means, collectively, the CPILP Indenture, the CPI US Note Purchase Agreement and the Curtis Palmer Indenture.

 

“CPILP Note Documents “ means, collectively, the CPILP Note Agreements and all other guaranties, agreements, instruments, certificates and other documents executed and delivered pursuant to or in connection therewith, as the same may be supplemented, amended or otherwise modified from time to time to the extent not prohibited by the terms of this Agreement.

 

“CPILP Notes” means, collectively, the CPI US Notes, the CPILP Debentures and the Curtis Palmer Notes.

 

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension, and shall include any and all “Credit Extensions” as defined in and made under the Existing Credit Agreement.

 

“Crown” means Her Majesty the Queen in right of Canada or any Province or Territory thereof.

 

“Curtis Palmer” means Curtis Palmer, LLC a Delaware limited liability company.

 

“Curtis Palmer Indenture” means the Trust Indenture of Curtis Palmer as issuer, CPILP (f/k/a Transcanada Power, L.P.), as guarantor and Deutsche Bank Trust Company

 

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Americas, as Trustee and dated June 28, 2004 in connection with the issuance of the Curtis Palmer Notes, as the same is amended, supplemented or modified from time to time.

 

“Curtis Palmer Notes” means the unsecured 5.90% “Notes” (as defined in the Curtis Palmer Indenture) in an aggregate outstanding principal amount of $190,000,000 outstanding on the Closing Date and due 2014.

 

“Debtor Relief Laws” means, as applicable, (a) the Bankruptcy Code, (b) the Bankruptcy and Insolvency Act (Canada), (c) the Companies’ Creditors Arrangement Act (Canada) and (d) all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States, Canada or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“Deemed Dividend Problem” means, with respect to any Foreign Subsidiary, or any Subsidiary that owns 65% or more of the stock of a CFC so long as such entity has no assets other than the stock of CFCs, obligations, indebtedness or receivables of or attributable to such CFCs and de minimis assets, any portion of such Subsidiary’s accumulated and undistributed earnings and profits being deemed to be repatriated to the US Borrowers or the applicable parent Domestic Subsidiary for U.S. federal income tax purposes.

 

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

 

“Default Rate” means an interest rate equal to (a) the US Base Rate with respect to US Dollar Loans, or the Cdn. Prime Rate with respect to Cdn. Dollar Loans, plus (b) the Applicable Rate, if any, applicable to the applicable type of Base Rate Loans plus (c) 2% per annum.

 

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Loans or participations in L/C Obligations required to be funded by it hereunder within 1 Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within 1 Business Day of the date when due, unless the subject of a good faith dispute, or (c) has become the subject of an Insolvency Proceeding.

 

“Deposit and Disbursement Agreement” means the Third Amended and Restated Deposit and Disbursement Agreement dated as of the Initial Closing Date, by and among each of the Deposit Loan Parties, BMO Harris Bank, N.A., in its capacity as depositary bank, Bank of Montreal in its capacity as Collateral Agent, Bank of Montreal in its capacity as Administrative Agent, and the Convertible Secured Trustee, and acknowledged by each of the Loan Parties, as the same is amended, restated, supplemented or modified from time to time.

 

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“Deposit Loan Party” means the Canadian Borrower and each of the US Borrowers.

 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any Property by any Person.

 

“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable), or upon the happening of any event: (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise; or (b) is convertible or exchangeable for Indebtedness or other equity interests that would constitute Disqualified Stock; provided, however, that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to 90 days after the Maturity Date of the Loans shall be deemed to be Disqualified Stock; provided further, however, that if such Capital Stock is issued to any director, manager, officer, employee or to any plan for the benefit of such parties of the Canadian Borrower or its Subsidiaries or by any such plan to such parties, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Canadian Borrower in order to satisfy applicable statutory or regulatory obligations or as a result of such parties’ termination, death or disability.

 

“Domestic Subsidiary” means a Subsidiary of the Borrowers incorporated or organized under the laws of the United States, any State thereof or the District of Columbia, other than a Subsidiary owned directly or indirectly by a Foreign Subsidiary.

 

“Draft” has the meaning specified in Section 2.06(a).

 

“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, (d) a commercial bank organized under the laws of the United States or Canada, or any state or province thereof, and having total assets in excess of $10,000,000,000, calculated in accordance with the accounting principles prescribed by the regulatory authority applicable to such bank in its jurisdiction of organization and approved by (i) the Administrative Agent and the L/C Issuers, and (ii) unless an Event of Default has occurred and is continuing, the Borrower Agent (each such approval not to be unreasonably withheld or delayed, including with respect to the Administrative Agent, the Administrative Agent’s reasonable determination of the creditworthiness of such Person and the ability of such Person to satisfy its obligations under this Agreement); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include (x) the Borrowers or any of the Borrowers’ Affiliates or Subsidiaries, (y) any Person that cannot (either directly or through an Applicable Designee) lend in US Dollars and Cdn. Dollars or (z) a Foreign Lender, except, in the case of (y) or (z), as the Administrative Agent may otherwise approve.

 

“Enforcement Action” means any action to enforce any Obligations or Loan Documents or to realize upon any Collateral (whether by judicial action, self-help, exercise of setoff or recoupment, or otherwise).

 

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“Environmental Agreement” means each agreement of the Loan Parties with respect to any Real Estate subject to a Mortgage, pursuant to which the Loan Parties agree to indemnify and hold harmless the Secured Parties from liability under any Environmental Laws.

 

“Environmental Laws” means any and all federal, state, provincial, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to Hazardous Materials.

 

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrowers, any other Loan Party or any of their respective Subsidiaries resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“Environmental Release” means a release as defined in CERCLA or under any other applicable Environmental Law, including without limitation, any release or discharge of any Hazardous Materials including any discharge, spray, injection, inoculation, abandonment, deposit, spillage, leakage, seepage, pouring, emission, emptying, throwing, dumping, placing, exhausting, escape, leach, migration, dispersal, dispensing or disposal.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrowers within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan, (b) a withdrawal by the Canadian Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA, (c) a complete or partial withdrawal by the Canadian Borrower or any ERISA Affiliate from a Multiemployer Plan or receipt by the Canadian Borrower or any ERISA Affiliate of notification that a Multiemployer Plan is in reorganization, (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or, to the knowledge of the Canadian Borrower, Multiemployer Plan, or (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the

 

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termination of, or the appointment of a trustee to administer, any Pension Plan or, to the knowledge of the Canadian Borrower, Multiemployer Plan.

 

“Eurocurrency LIBOR Rate” has the meaning set forth in the definition of Eurocurrency Rate.

 

“Eurocurrency Rate” means for any Interest Period with respect to a Eurocurrency Rate Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula:

 

	
Eurocurrency   Rate =
    	
Eurocurrency   LIBOR Rate
    
	
 
    	
1.00   – Eurocurrency Reserve Percentage
    

 

Where,

 

“Eurocurrency LIBOR Rate” means, for such Interest Period, the rate per annum equal to the applicable interest settlement rate for US Dollar LIBOR, as published by Reuters (or such applicable successors or other commercially available source providing quotations of LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, 2 Business Days prior to the commencement of such Interest Period, for deposits in US Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.  If such rate is not available at such time for any reason, then the “Eurocurrency LIBOR Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in US Dollars for delivery on the first day of such Interest Period in Same Day Funds in the approximate amount of the Eurocurrency Rate Loan being made, continued or converted by Bank of Montreal and with a term equivalent to such Interest Period would be offered by Bank of Montreal’s London Branch (or other Bank of Montreal branch or Affiliate) to major banks in the London or other offshore interbank market for such currency at their request at approximately 11:00 a.m. (London time) 2 Business Days prior to the commencement of such Interest Period.

 

“Eurocurrency Reserve Percentage” means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”).  The Eurocurrency Rate for each outstanding Eurocurrency Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurocurrency Reserve Percentage.

 

“Eurocurrency Rate Loan” means a Loan that bears interest at a rate based on the Eurocurrency Rate with respect to US Dollar Deposits.

 

“Event of Default” has the meaning specified in Section 8.01.

 

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“Excluded Non-Recourse Debt” has the meaning specified in the defined term “Consolidated Total Net Debt”.

 

“Excluded Swap Obligation” means, with respect to any Guarantor, any Guarantor Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Guarantor Swap Obligation (or any Guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guaranty of such Guarantor or the grant of such security interest becomes effective with respect to such Guarantor Swap Obligation. If a Guarantor Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Guarantor Swap Obligation that is attributable to swaps for which such Guaranty or security interest is or becomes illegal.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, any L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of the Borrowers hereunder, (a) Taxes imposed on or measured by its overall net income (however denominated), franchise Taxes imposed on it, and branch profits Taxes imposed on it, in each case (i) by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located, or (ii) that are Other Connection Taxes, (b) in the case of a Lender, any withholding Tax that is imposed on amounts payable to or for the account of such Lender (A) on the Closing Date with respect to the Lenders party hereto on the Closing Date, (B) on or following the date any Person that is not already a Lender becomes a Lender under this Agreement pursuant to Section 10.06(b), or (C) on or following the date that any Lender designates a new Lending Office, except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Borrowers with respect to such withholding Tax pursuant to Section 3.01(a), (c) Canadian withholding Tax that is imposed on amounts payable to a Person with whom the payer does not deal at arm’s length or payable in respect of a debt or other obligation to pay an amount to such Person, (d) Taxes attributable to such recipient’s failure to comply with Section 3.01(e) and (e) any U.S. federal withholding Taxes imposed under FATCA (or similar Taxes imposed under an applicable intergovernmental agreement entered into with respect to FATCA).

 

“Existing Credit Agreement” means that certain Amended and Restated Credit Agreement dated as of November 4, 2011, among the Borrowers, Bank of Montreal, as agent, and a syndicate of lenders, as amended, supplemented or modified from time to time prior to the Closing Date.

 

“Existing Letters of Credit” means the letters of credit issued under or deemed issued under the Existing Credit Agreement, in each case, as specified in Schedule 1.01(b).

 

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“Extraordinary Expenses” means, collectively, all reasonable and necessary advances and out-of-pocket costs and expenses that the Administrative Agent may make or incur during an Event of Default, or during the pendency of an Insolvency Proceeding of a Loan Party, including those relating to (a) any audit, inspection, repossession, storage, repair, appraisal, insurance, manufacture, preparation or advertising for sale, sale, collection, or other preservation of or realization upon any Collateral; (b) any action, arbitration or other proceeding (whether instituted by or against the Administrative Agent, any Lender, any Loan Party, any representative of creditors of a Loan Party or any other Person) in any way relating to any Collateral (including the validity, perfection, priority or avoidability of the Administrative Agent’s Liens with respect to any Collateral), Loan Documents, Letters of Credit or Obligations, including any lender liability or other claims; (c) the exercise, protection or enforcement of any rights or remedies of the Administrative Agent in, or the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of any taxes, charges or Liens with respect to any Collateral; (e) any Enforcement Action; and (f) negotiation and documentation of any modification, waiver, workout, restructuring or forbearance with respect to any Loan Documents or Obligations.  Such costs, expenses and advances include all documented transfer fees, Other Taxes, storage fees, insurance costs, permit fees, utility reservation and standby fees, reasonable legal fees, appraisal fees, brokers’ fees and commissions, auctioneers’ fees and commissions, accountants’ fees, environmental study fees, wages and salaries paid to employees of any Loan Party or independent contractors in liquidating any Collateral, and reasonable travel expenses.

 

“Fair Market Value” means, with respect to any asset or Property, the price which could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of who is under undue pressure or compulsion to complete the transaction.

 

“FATCA” means, sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version to the extent substantively comparable and not materially more onerous to comply with), any current or future regulations promulgated thereunder or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) thereof, or any applicable intergovernmental agreement entered into in connection with the implementation of such sections of the Code.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of Montreal on such day on such transactions as determined by the Administrative Agent.

 

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“Fee Letter” means that certain letter agreement dated as of the Closing Date among the Borrowers, the Administrative Agent and the Arrangers.

 

“Foreign Lender” means, in respect of any Borrower, any Lender that is organized under the laws of, or otherwise resident for tax purposes in, a jurisdiction other than that in which such Borrower is resident for tax purposes.  For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction, and Canada and each Province and Territory thereof shall be deemed to constitute a single jurisdiction.

 

“Foreign Plan” means any employee benefit pension plan or employee retirement plan maintained by any Loan Party or Subsidiary that is not subject to the laws of the United States.

 

“Foreign Subsidiary” means any Subsidiary organized under the laws of a jurisdiction not located in the United States of America.

 

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, with respect to each L/C Issuer, such Defaulting Lender’s Pro Rata Share of the outstanding L/C Obligations in respect of Letters of Credit issued by such L/C Issuer other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

 

“Full Payment” means with respect to any Obligations, (a) the full cash payment thereof (other than contingent indemnity and other obligations that are not yet due and owing), including any interest, fees and other charges accruing during an Insolvency Proceeding (whether or not allowed in the proceeding); and (b) if such Obligations are L/C Obligations, Bank Product Debt or Swap Obligations, in each case, to the extent that is not yet due and owing or inchoate or contingent in nature, Cash Collateralization thereof (or delivery of a standby letter of credit reasonably acceptable to the Administrative Agent or the applicable Lender in its reasonable discretion, in the amount of required Cash Collateral) to the extent requested or required by the terms of the Swap Contracts or agreements related to the Bank Product Debt.  No Loans shall be deemed to have been paid in full until all Commitments related to such Loans have expired or been terminated.

 

“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

 

“GAAP” means either Cdn. GAAP or US GAAP, as the context may require.

 

“Governmental Authority” means any federal, state, provincial, municipal, foreign or other governmental department, agency, commission, board, bureau, court, tribunal, instrumentality, political subdivision, or other entity or officer exercising

 

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executive, legislative, judicial, taxing, regulatory or administrative powers or functions for or pertaining to any government or court, in each case whether associated with the United States, Canada, a state, province, district or territory thereof, or a foreign entity or government.

 

“Granting Lender” has the meaning set forth in Section 10.06(h).

 

“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease Property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person.  The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has a corresponding meaning.

 

“Guarantors” means, collectively, (a) each Subsidiary of the Borrowers listed on Schedule 1.01(c) and (b) each other Subsidiary that is required to execute a Joinder Agreement pursuant to Section 6.13.

 

“Guarantor Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

 

“Guaranty” means the Canadian Guaranty, the US Guaranty, and each other guaranty made by the Guarantors in favor of the Administrative Agent for the benefit of the Secured Parties each, as amended, restated, supplemented or otherwise modified and in effect from time to time.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

 

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“Incur” means issue, assume, guarantee, incur or otherwise become liable for and “Incurred” or “Incurrence” will have a corresponding meaning; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.

 

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP: (i) the principal of any indebtedness of such Person, whether or not contingent: (a) in respect of Borrowed Money, (b) evidenced by bonds, notes, debentures or similar instruments or outstanding letters of credit (after giving effect to any prior drawings or reductions which may have been reimbursed) or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any Property or services which purchase price is due more than six months after the date of placing the Property in service or taking delivery and title thereto, except (1) any such balance that constitutes a trade payable or similar obligation to a trade creditor Incurred in the Ordinary Course of Business, (2) any earn-out obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and (3) liabilities accrued in the Ordinary Course of Business), or (d) all Attributable Indebtedness; (ii) to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness of another Person (other than by endorsement of negotiable instruments for collection in the Ordinary Course of Business); and (iii) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that the amount of such Indebtedness will be the lesser of (x) the Fair Market Value of such asset at such date of determination and (y) the amount of such Indebtedness of such other Person; provided, further, that any obligation of a Borrower or any Subsidiary in respect of account credits or participants under any employee, director or officer compensation plan of the Canadian Borrower or Subsidiary, will be deemed not to constitute Indebtedness.

 

For all purposes hereof, the Indebtedness of any Person shall (i) include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person and (ii) in the case of the Borrowers and their Subsidiaries, exclude all intercompany Indebtedness having a term not exceeding 364 days and made in the Ordinary Course of Business.  The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.  The amount of any Capitalized Lease Obligation or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrowers under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

 

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“Indemnitee” has the meaning set forth in Section 10.04(b).

 

“Initial Closing Date” means November 4, 2011.

 

“Insolvency Act (Canada)” means the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3).

 

“Insolvency Proceeding” means any case or proceeding commenced by or against a Person under any state, federal or foreign law for, or any agreement of such Person to, (a) the entry of an order for relief under the Bankruptcy Code or the Insolvency Act (Canada), or any other insolvency, debtor relief or debt adjustment law; (b) the appointment of a receiver, trustee, liquidator, administrator, conservator or other custodian for such Person or any part of its Property; or (c) an assignment or trust mortgage for the benefit of creditors.

 

“Intellectual Property” means all intellectual and similar Property of a Person, including inventions, designs, patents, copyrights, trademarks, service marks, trade names, trade secrets, confidential or proprietary information, customer lists, know-how, software and databases; all embodiments or fixations thereof and all related documentation, applications, registrations and franchises; all licenses or other rights to use any of the foregoing; and all books and records relating to the foregoing.

 

“Intercompany Loan Subordination Agreement” means the Intercompany Loan Subordination Agreement, in form and substance reasonably satisfactory to the Administrative Agent, from each holder of any intercompany note permitted pursuant to Section 7.03(k) that subordinates the rights and interests of such holder to the Obligations, in each case, as the same may be amended, restated, supplemented, modified or joined from time to time.

 

“Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBITDA of the Canadian Borrower for the four fiscal quarters ending on such date of determination to (b) the Consolidated Interest Expense of the Canadian Borrower for the four fiscal quarters ending on such date of determination.

 

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan or a Bankers’ Acceptance (or BA Equivalent Note), the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any Interest Period for a Eurocurrency Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates (or, if such day is not a Business Day, the next succeeding Business Day); (b) as to any Base Rate Loan, the last Business Day of each of March, June, September and December and the Maturity Date; and (c) as to a Bankers’ Acceptance or BA Equivalent Note, the date of payment of the BA Stamping Fee pursuant to the terms of Section 2.06(f).

 

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“Interest Period” means,

 

(a)                                 as to each Eurocurrency Rate Loan, the period commencing on the date such Eurocurrency Rate Loan is disbursed or converted to or continued as a Eurocurrency Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrowers in a Loan Notice; and

 

(b)                                 with respect to each Bankers’ Acceptance (or BA Equivalent Note),  the period commencing on the date such Banker Acceptance is disbursed or converted to or continued as a Bankers’ Acceptance (or BA Equivalent Notes) and ending on the date one, two, three or six months thereafter;

 

provided, that in each case:

 

(i)                                     any Interest Period that would otherwise end on a day that 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;

 

(ii)                                  any Interest Period that 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 the calendar month at the end of such Interest Period; and

 

(iii)                               no Interest Period shall extend beyond the Maturity Date.

 

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Capital Stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit.  For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

 

“IRS” means the United States Internal Revenue Service.

 

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance of such Letter of Credit).

 

“Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by any L/C Issuer and any Borrower (or any Subsidiary) or in favor of such L/C Issuer and relating to any such Letter of Credit.

 

“Joinder Agreement” means an agreement in substantially the form of Exhibit E.

 

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“Judgment Currency” has the meaning set forth in Section 10.25.

 

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Pro Rata Share.

 

“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing.

 

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof.

 

“L/C Issuer” means each of Bank of Montreal, The Toronto-Dominion Bank, Morgan Stanley Bank, N.A. (or their respective Applicable Designees) or any other Lender (so long as such Lender expressly agrees to perform in accordance with their terms all of the obligations that by the terms of this Credit Agreement are required to be performed by it as an L/C Issuer) approved by each of the Administrative Agent and the Borrower Agent.

 

“L/C Issuer Limit” means, with respect to each L/C Issuer, the maximum amount of L/C Obligations related to Letters of Credit issued by such L/C Issuer as set forth in the Register maintained by the Administrative Agent.  On the Closing Date, the respective L/C Issuer Limits of Bank of Montreal, The Toronto-Dominion Bank, Morgan Stanley Bank, N.A. (or their respective Applicable Designee) shall be $62,500,000 for Bank of Montreal, $62,500,000 for The Toronto-Dominion Bank, and $25,000,000 for Morgan Stanley Bank, N.A.

 

“L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all US Unreimbursed Amounts and Canadian Unreimbursed Amounts, including all L/C Borrowings.  For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.07.  For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

 

“L/C Rate” means (a) in respect of any day on which the Default Rate is in effect pursuant to Section 2.07(b), the Applicable Rate in respect of Letters of Credit plus 2% per annum, and (b) in respect of any other day, the Applicable Rate in respect of Letters of Credit.

 

“Laws” means, collectively, all international, foreign, federal, state, provincial, and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed

 

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duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

 

“Lender” has (a) the meaning specified in the introductory paragraph hereto and, as the context requires, includes the L/C Issuers, and (b) any other Person that shall have become party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.  Furthermore, with respect to (i) each provision of this Agreement relating to the funding or participation in any Cdn. Dollar Loans or Cdn. Dollar Letters of Credit or the repayment or the reimbursement thereof by the Borrowers in connection therewith, (ii) any rights of set-off, (iii) any rights of indemnification or expense reimbursement and (iv) reserves, capital adequacy or other provisions, each reference to a Lender shall be deemed to include such Lender’s Applicable Designee.  Notwithstanding the designation by any Lender of an Applicable Designee, the Borrowers and the Administrative Agent shall be permitted to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement; provided that each Applicable Designee shall be subject to the provisions obligating or restricting Lenders under this Agreement.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrowers and the Administrative Agent.

 

“Letter of Credit” means any US Dollar Letter of Credit or Cdn. Dollar Letter of Credit, as applicable, in each case, in the form from time to time in use by the respective L/C Issuers.

 

“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the respective L/C Issuers.

 

“Letter of Credit Expiration Date” means the day that is 7 days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

 

“Letter of Credit Sublimit” means $150,000,000, as the same may be reduced from time to time pursuant to the terms of Section 2.05.  The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Commitment.

 

“Lien” means any mortgage, pledge, hypothecation, assignment (excluding any assignment constituting a sale), deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing), and any contingent or other agreement to provide any of the foregoing.

 

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“Loan” means each loan and any advances made pursuant to Article II.

 

“Loan Account” means the loan account established by each Lender on its books pursuant to Section 2.10(c).

 

“Loan Documents” means this Agreement, the Other Agreements, the Guaranties, the Collateral Documents, the Fee Letter, and any certificate, executed by or on behalf of any Loan Party hereunder.

 

“Loan Notice” means a Notice of Borrowing and a Notice of Conversion/Continuation.

 

“Loan Parties” means, collectively, the Borrowers, each Guarantor, each Pledgor, and each other Subsidiary that Guarantees the Obligations or grants a Lien or security interest in its Property in favor of the Collateral Agent or the Administrative Agent for the benefit of the Secured Parties pursuant to the terms of this Agreement.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, financial condition, or assets of the Borrowers and its consolidated Subsidiaries taken as a whole; (b) a material impairment of the ability of any Loan Party to pay any Obligation when due or otherwise to perform its material obligations under this Agreement, any Guaranty, any Collateral Document or any Note, in each case, to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability of this Agreement, or the Guaranties, the other Collateral Documents and the Notes taken as a whole, in each case, against any Loan Party a party thereto.

 

“Maturity Date” means March 4, 2015.

 

“Moody’s” means Moody’s Investors Service, Inc., or any successor or assignee of the business of such company in the business of rating securities.

 

“Mortgage” means each mortgage, deed of trust or deed to secure debt pursuant to which a Loan Party grants to the Administrative Agent, for the benefit of Secured Parties, Liens upon the Real Estate owned by such Loan Party, as security for the Obligations, as amended, restated, supplemented or otherwise modified and in effect from time to time.

 

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA and subject to Title IV of ERISA, to which either US Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

 

“Net Proceeds” means with respect to a Disposition, proceeds (including, when received, any deferred or escrowed payments) received by a Borrower or a Loan Party, or any Subsidiary thereof, in cash from such disposition, net of (a) reasonable and customary costs and expenses actually incurred in connection therewith, including legal fees and sales commissions; (b) amounts applied to repayment of principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness secured by 

 

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the asset sold in such Disposition and which is required to be repaid with such proceeds (other than any such Indebtedness assumed by the purchaser of such asset); (c) transfer or similar taxes and the Canadian Borrower’s commercially reasonable good faith estimate of income taxes paid or payable in connection with such Disposition; and (d) reserves for indemnities or purchase price adjustment associated with such Disposition, until such reserves are no longer needed.

 

“Non BA Lender” means any Lender that is not a BA Lender.

 

“Non-Loan Party Subsidiary” means each Subsidiary of the Canadian Borrower (a) that as of the Closing Date is not a Loan Party and (b) that after the Closing Date is acquired or formed and is not required to Guarantee the Obligations or grant a Lien on its Property pursuant to a Collateral Document in accordance with the terms of this Agreement.

 

“Non-Recourse Project Finance Indebtedness” means Project Finance Indebtedness that is recourse solely to the assets of the applicable Subsidiary, and is not recourse to any Borrower or any other Subsidiary, including without limitation any Guarantee of such Project Finance Indebtedness by a Borrower or such other Subsidiary; provided, however, that if a Project or a Subsidiary that is a direct owner of a Project pledges the Capital Stock of such Project or provides a limited recourse Guarantee that is limited solely to the Capital Stock pledged, or both, under such Project Finance Indebtedness, such pledge and such limited recourse Guarantee shall not cause such Project Finance Indebtedness to fail to meet this definition.

 

“Note” means a promissory note made by the US Borrowers and the Canadian Borrower in favor of a Lender evidencing Loans made by such Lender, substantially in the forms of Exhibit B.

 

“Notice of Borrowing” means a notice of a Borrowing pursuant to Section 2.02(a)(i), which, if in writing, shall be substantially in the form of Exhibit A-1.

 

“Notice of Conversion/Continuation” means a notice of (a) a conversion of Loans from one Type to the other, or (b) a continuation of Eurocurrency Rate Loans or Bankers’ Acceptances, pursuant to Section 2.02(a)(ii), which, if in writing, shall be substantially in the form of Exhibit A-2.

 

“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, Letter of Credit, Bank Product Debt, or any Swap Obligations in connection with a Swap Contract between any of the Borrowers or another Loan Party and a Lender pursuant to and in accordance with the terms of Section 7.03(e) (including any such Swap Obligations owing to one or more Lenders or their Affiliates), in each case, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising (including Extraordinary Expenses) and interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor 

 

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Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding; provided that the term “Obligations” excludes all Excluded Swap Obligations.

 

“Officers’ Certificate” means a certificate signed on behalf of any of the Borrowers or the other Loan Parties, as applicable, by a Responsible Officer of such Borrower or such other Loan Party.

 

“Ordinary Course of Business” means the ordinary course of business of any Borrower or Subsidiary and undertaken in good faith.

 

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

 

“Other Agreement” means each Note; Issuer Document; Environmental Agreement; or other instrument or agreement (other than this Agreement or a Collateral Document) now or hereafter delivered by a Loan Party or other Person to the Administrative Agent or a Lender in connection with any transactions relating hereto.

 

“Other Connection Taxes” means, with respect to the Administrative Agent, each Lender and each L/C Issuer, Taxes imposed as a result of a present or former connection between the Administrative Agent, each Lender and each L/C Issuer, as the case may be, and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to a request by the Borrowers under Section 10.14).

 

“Outstanding Amount” means (a) with respect to Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Loans, as the case may be, occurring on such date; and 

 

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(b) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.

 

“Overadvance” means any time the Total Outstandings exceed 103% of the Aggregate Commitment, for more than five consecutive Business Days.

 

“Participant” has the meaning specified in Section 10.06(d).

 

“Participant Register” has the meaning specified in Section 10.06(d).

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by either US Borrower or any ERISA Affiliate or to which such US Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years, but excluding any Foreign Plans.

 

“Permitted Acquisitions” means the purchase or other acquisition of Property and assets or businesses of any Person (including Investments in Project Development Companies) constituting a business unit, a line of business or division of such Person, or equity interests in a Person that, upon the consummation thereof, will be a Subsidiary of the Borrowers (including as a result of a merger or consolidation); provided that, with respect to each such purchase or other acquisition:

 

(a)                                 immediately before and immediately after giving pro forma effect to any such purchase or other acquisition, no Default or Event of Default shall have occurred and be continuing (other than, except in the case of an Event of Default under Section 8.01(a), in respect of any Permitted Acquisition made pursuant to a legally binding commitment entered into at a time when no Default exists);

 

(b)                                 a majority of all Property, assets and businesses acquired in such purchase or other acquisition shall be located in the United States or Canada, or if such acquisition is of a Person, such Person is located in and organized under the Laws of any political subdivision of the United States or Canada;

 

(c)                                  the acquired Property, assets, business or Person is in a Similar Business as the Canadian Borrower and its Subsidiaries, taken as a whole (or a business that is reasonably related or ancillary thereto);

 

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(d)                                 the board of directors (or similar governing body) of the Person to be so purchased or acquired shall not have indicated publicly its opposition to the consummation of such purchase or acquisition (which opposition has not been publicly withdrawn);

 

(e)                                  all of the Property and other assets acquired in connection with such acquisition, including all Capital Stock, shall constitute Collateral, and such Collateral shall be made subject to Collateral Documents granting an Acceptable Security Interest in favor of the Administrative Agent for the benefit of the Secured Parties in such Collateral in accordance with and to the extent required by the terms of Section 6.13 unless any long term Indebtedness that is permitted to be Incurred or assumed under Section 7.03(g) covering such assets or Property prohibits the inclusion of such assets or Property as Collateral and prohibits the grant of a Lien in favor of the Administrative Agent for the benefit of the Secured Parties on such Collateral;

 

(f)                                   any such newly created or acquired Subsidiary shall be a Guarantor and shall deliver a Guaranty in accordance with and to the extent required by Section 6.13, within the times specified therein;

 

(g)                                  the majority of the cash flow generated by the assets acquired in connection with such acquisition or of the acquired Subsidiary shall be contracted on terms and conditions that in the good faith judgment of the Canadian Borrower would support non-recourse third party project financing or, with respect to acquisitions of Capital Stock of Project Development Companies that do not satisfy the foregoing cash flow requirements, the aggregate of all such Investments does not exceed $50,000,000 (excluding Project Development Companies that initially do not meet the contracted cash flow requirement but thereafter do satisfy such requirement) at any one time;

 

(h)                                 the Required Lenders shall have consented in writing to such acquisition prior to entering into any definitive purchase agreement or other agreement binding on the Borrower or a Subsidiary to consummate such acquisition, which consent may be withheld in the sole discretion of the Required Lenders; and

 

(i)                                     promptly upon the consummation of the Permitted Acquisition, the Borrower Agent shall provide an Officers’ Certificate to the Administrative Agent confirming that the Acquisition complied with the terms set forth in this definition of Permitted Acquisition and (i) attaching pro forma financial statements demonstrating compliance with, Section 7.11 for the previous four quarter period for which financial statements have been delivered on a pro forma basis after giving effect to such acquisition (including the assumption or Incurrence of any Indebtedness in connection therewith), and (ii) certifying that such pro forma financial statements present fairly in all material respects the financial condition of the Canadian Borrower and its Subsidiaries on a consolidated basis (including the assumption or Incurrence of any Indebtedness in connection therewith) and 

 

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setting forth reasonably detailed calculations demonstrating compliance with the Section 7.11 for the previous four quarter period for which financial statements have been delivered on a pro forma basis.

 

“Permitted Intercompany Notes” means (a) that certain $400,000,000 13% Unsecured Subordinated Note of APH payable to APG and dated as of November 27, 2009, and (b) that certain $400,000,000 13% Unsecured Subordinated Note of APG payable to the Canadian Borrower, dated as of July 1, 2010.

 

“Permitted Investments” has the meaning specified in Section 7.02.

 

“Permitted Liens” has the meaning specified in Section 7.01.

 

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“Platform” has the meaning specified in Section 6.02.

 

“Pledge Agreements” means collectively, (a) the Amended and Restated Pledge Agreement, substantially in the form delivered on the Initial Closing Date, among the Borrowers, the Subsidiaries party thereto and the Collateral Agent for the benefit of the Secured Parties, (b) the Pledge Agreement, substantially in the form delivered on the Initial Closing Date, among the Borrowers, the Subsidiaries party thereto and the Administrative Agent for the benefit of the Secured Parties, and (c) the Canadian Pledge Agreement, substantially in the form delivered on the Initial Closing Date, among the Canadian Borrower, the Subsidiaries party thereto and the Administrative Agent for the benefit of the Secured Parties in each case, as the same is amended, restated, supplemented, modified or joined from time to time.

 

“Pledgees” means each of the US Borrowers, each of the other Loan Parties and each other Subsidiary of the Borrowers identified on Schedule 1.01(d) and each other Subsidiary acquired after the Closing Date that is not prohibited from having its Capital Stock and other equity interests pledged pursuant to the terms of long term Indebtedness permitted under Section 7.03(g), the Capital Stock and other equity interests of whom are required to be pledged pursuant to the Pledge Agreements.

 

“Pledgors” means each of the Borrowers, each of the other Loan Parties and each other Subsidiary of the Borrowers identified on Schedule 1.01(d) and each other Subsidiary acquired after the Closing Date that is not prohibited from pledging its Capital Stock and other equity interests pursuant to the terms of long term Indebtedness permitted under Section 7.03(g), required to grant a pledge of security interest in the Capital Stock and other equity interests of its Subsidiaries pursuant to the Pledge Agreements.

 

“Preferred Stock” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up, including, without limitation, the CPI Preferred Stock.  The principal amount of any Preferred Stock shall be (i) the maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory 

 

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redemption or mandatory repurchase price with respect to such Preferred Stock, whichever is greater.

 

“pro forma” means, in connection with any calculation giving effect on a pro forma basis in connection with (a) a Disposition, as if such Disposition had occurred on the first day of the relevant fiscal quarter being tested, (b) the incurrence of any Indebtedness after the first day of the relevant fiscal quarter being tested, as if such Indebtedness had been incurred (and the proceeds thereof applied) on the first day of such fiscal quarter, (c) the permanent repayment of any Indebtedness after the first day of the relevant fiscal quarter being tested, as if such Indebtedness had been retired or redeemed on the first day of such fiscal quarter, (d) any Investment being consummated as well as any other Investment consummated after the first day of the relevant fiscal quarter being tested, and on or prior to the date of the respective Investment then being made, as if such Investment had occurred on the first day of such fiscal quarter, (e) any Restricted Payment being made after the first day of the relevant fiscal quarter being tested, as if such Restricted Payment had occurred on the first day of such fiscal quarter and/or (f) any Permitted Acquisition being consummated as well as any other Permitted Acquisition consummated after the first day of the relevant fiscal quarter being tested, and on or prior to the date of the respective Permitted Acquisition then being effected, as if such Permitted Acquisition had occurred on the first day of such fiscal quarter, as the case may be, with the following rules to apply in connection therewith:

 

(i)                                     all Indebtedness (x) incurred or issued after the first day of the relevant fiscal quarter (whether incurred to finance a Permitted Acquisition, to refinance Indebtedness or otherwise) shall be deemed to have been incurred or issued (and the proceeds thereof applied) on the first day of the such fiscal quarter and remain outstanding through the date of determination and (y) permanently retired or redeemed after the first day of the relevant fiscal quarter shall be deemed to have been retired or redeemed on the first day of such fiscal quarter and remain retired through the date of determination;

 

(ii)                                  all Indebtedness assumed to be outstanding pursuant to preceding clause (i) shall be deemed to have borne interest at (x) the rate applicable thereto, in the case of fixed rate Indebtedness, or (y) at the rate which would have been applicable thereto on the last day of the respective fiscal quarter, in the case of floating rate Indebtedness (although interest expense with respect to any Indebtedness for periods while same was actually outstanding during such fiscal quarter shall be calculated using the actual rates applicable thereto while same was actually outstanding); and

 

(iii)                               in making any determination of Consolidated EBITDA for the purposes specified above in this definition, pro forma effect shall be given to any Material Acquisition or Material Disposition consummated during the periods described above, with such Consolidated EBITDA to be determined as if such Material Acquisition or Material Disposition was consummated on the first day of the relevant fiscal quarter, but without taking into account (in the case of any Material Acquisition) any pro forma cost savings and expenses.

 

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“Pro Rata Share” means, with respect to each Lender at any time, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Commitment of such Lender at such time and the denominator of which is the amount of the Aggregate Commitments at such time; provided that if the commitment of each Lender to make Loans and the obligation of the L/C Issuers to make L/C Credit Extensions have been terminated pursuant to Section 8.02, then the Pro Rata Share of each Lender shall be determined based on the Pro Rata Share of such Lender immediately prior to such termination and after giving effect to any subsequent assignments made pursuant to the terms hereof.  The initial Pro Rata Share of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

 

“Project Development Companies” means corporations, limited liability companies or partnerships that develop, construct, own and operate power generation or power transmission projects or other energy infrastructure projects.

 

“Project Documents” includes all material power purchase agreements, steam sales contracts, operating and maintenance agreements, administrative services contracts, construction contracts (other than purchase orders), transmission agreements, fuel supply and transportation contracts, Project loan agreements, other than any such agreement that has a term of one year or less or that may be cancelled or terminated by a party thereto on less than one year’s notice without substantial economic detriment.

 

“Project Finance Indebtedness” means long term Indebtedness incurred by a Non-Loan Party Subsidiary (other than CPI Preferred Equity) with respect to the financing of the development, construction, maintenance or operations of such Person, excluding any Capitalized Leases of such Person incurred in the Ordinary Course of Business.

 

“Project Holding Entities” means each Subsidiary of the Borrowers identified on Schedule 1.01(e) and any Subsidiary that is acquired or created after the Closing Date to directly own a Project.

 

“Projected EBITDA” has the meaning specified in the defined term “Total Leverage Ratio.”

 

“Projects” means each Subsidiary of the Borrowers identified on Schedule 1.01(e) that is an operating partnership, limited partnership, limited liability company, corporation or other entity that is the direct owner of physical generation or transmission assets and property and is engaged in the business of generating or transmitting electrical power or generation of steam.

 

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

 

“Public Debt Rating” means, as of any date, the rating that has been most recently announced by either S&P or Moody’s, as the case may be, for any class of non-credit enhanced long-term senior unsecured debt issued by the Canadian Borrower.

 

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“Reaffirmation of Loans Documents” means that certain reaffirmation of loan documents dated August 2, 2013, given by the Borrowers and each of the Guarantors and Pledgors party thereto in favor of the Agent.

 

“Real Estate” means all right, title and interest (whether as owner, lessor or lessee) in any real Property located in the United States or Canada or any buildings, structures, parking areas or other improvements thereon.

 

“Refinancing Indebtedness” means the Incurrence by the Borrowers or any of their Subsidiaries of Indebtedness which serves to refund or refinance certain Indebtedness specified pursuant to Section 7.03, or any Indebtedness issued to so refund or refinance such Indebtedness (subject to the following proviso) prior to its respective maturity, in each case, to the extent permitted under Section 7.03; provided, however, that such Refinancing Indebtedness: (a) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness being refunded or refinanced; (b) has a Stated Maturity which is no earlier than the Stated Maturity of the Indebtedness being refunded or refinanced; (c) does not require the making of any principal payments on a date that is earlier than the making of any such principal payments under the Indebtedness being refunded or refinanced; (d) to the extent such Refinancing Indebtedness refinances Indebtedness pari passu with the Obligations of the Subsidiaries that are Guarantors, is pari passu with or subordinated to the Obligations and the other Secured Obligations of such Subsidiaries under such guarantee, as applicable; or (e) is Incurred in an aggregate amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing.

 

“Register” has the meaning set forth in Section 10.06(c).

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees and agents of such Person and of such Person’s Affiliates.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30-day notice period has been waived.

 

“Request for Credit Extension” means (a) with respect to a Borrowing, a Loan Notice, (b) with respect to a conversion or continuation of Loans, a Notice of Conversion/Continuation, and (c) with respect to an L/C Credit Extension, a Letter of Credit Application.

 

“Required Lenders” means, as of any date of determination, Lenders having more than 50% of the Aggregate Commitments or, if the commitment of each Lender to make Loans and the obligation of the L/C Issuers to make L/C Credit Extensions have been terminated pursuant to Section 8.02, Lenders holding in the aggregate more than 50% of 

 

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the Total Outstandings (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations being deemed “held” by such Lender for purposes of this definition); provided that the Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders; provided further that any time there are five or fewer Lenders, Required Lenders shall require the consent or affirmative vote of at least three Lenders (other than Defaulting Lenders).

 

“Responsible Officer” means the chairman of the board, the president, any chief executive officer, chief financial officer, senior vice president or vice president, the treasurer or assistant treasurer, secretary or assistant secretary, or attorney-in-fact (i) of a Loan Party, or (ii) of any Person appointed or authorized to act by any Loan Party pursuant to any management or similar agreement.

 

“Restricted Indebtedness” means, collectively, any Specified Debt and any Project Finance Indebtedness.

 

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other Property) with respect to any Capital Stock (including any Disqualified Stock or any Preferred Stock) or other equity interest of the Canadian Borrower or any Subsidiary, or any payment (whether in cash, securities or other Property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Capital Stock or other equity interest, or on account of any return of capital to any of the Borrower’s stockholders, partners or members (or the equivalent Person thereof).

 

“Revaluation Date” means (a) with respect to any Cdn. Dollar Loan, each of the following:  (i) each date of a Borrowing of such Loan, (ii) each date of a continuation of such Loan pursuant to Section 2.02, and (iii) such additional dates as the Administrative Agent shall determine, or the Required Lenders shall require, but not more than once monthly unless a Default or Event of Default has occurred and is continuing, and (b) with respect to any Cdn. Dollar Letter of Credit, each of the following:  (i) each date of issuance of such Cdn. Dollar Letter of Credit, (ii) each date of an amendment of such Cdn. Dollar Letter of Credit having the effect of increasing the amount thereof (solely with respect to the increased amount), (iii) each date of any payment by an L/C Issuer under such Cdn. Dollar Letter of Credit, and (iv) such additional dates as the Administrative Agent, or any L/C Issuer shall determine or the Required Lenders shall require but not more than once monthly unless a Default or Event of Default has occurred and is continuing.

 

“S&P” means Standard & Poor’s, a division of The McGraw Hill Companies, Inc., or any successor or assignee of the business of such division in the business of rating securities.

 

“Same Day Funds” means (a) with respect to disbursements and payments in US Dollars, immediately available funds, and (b) with respect to disbursements and payments in Cdn. Dollars, same day or other funds as may be determined by the 

 

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Administrative Agent or the L/C Issuers, as the case may be, to be customary in the place of disbursement or payment for the settlement of international banking transactions in Cdn. Dollars.

 

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

 

“Schedule I Lenders” means those banks that are chartered under the Bank Act (Canada) and named in Schedule I thereto, and “Schedule I Lender” means each such bank.

 

“Schedule I Reference Lenders” means, collectively, Bank of Montreal and any other Schedule I Lender selected by the Administrative Agent in consultation with the Borrower.

 

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

“Secured Indebtedness” means any Indebtedness of the Borrowers or any Subsidiary secured by a Lien, including the Indebtedness hereunder.

 

“Secured Parties” means the Collateral Agent (as applicable), the Administrative Agent, the L/C Issuers, each Lender (or Applicable Designee), including in its capacity as a counterparty to a secured Swap Contract permitted under Section 7.01(l) and Section 7.03(e) and the providers of Bank Products.

 

“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the Public Company Accounting Oversight Board, as each of the foregoing may be amended and in effect on any applicable date hereunder.

 

“Security Agreement” means a security agreement from each Subsidiary formed or acquired after the Initial Closing Date that is not prohibited from granting a security interest in its Property pursuant to the terms of long term Indebtedness permitted under Section 7.03(g), granting a Lien on and pledging a security interest in substantially all of their respective personal Property in favor of the Administrative Agent for the benefit of the Secured Parties, as amended, restated, supplemented or otherwise modified and in effect from time to time.

 

“Similar Business” means (i) a business, the majority of whose revenues are derived from the generation of electric power or power and energy infrastructure assets, (ii) the activities of the Borrowers and their respective Subsidiaries as of the Closing Date or (iii) any business or activity that is reasonably similar thereto or a reasonable extension, development or expansion thereof or ancillary thereto, including investing in power generation facilities or other energy infrastructure.

 

“Solvent” means, when used with respect to any Person, that at the time of determination:

 

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(a)                                 the assets of such Person, at a fair valuation, are in excess of the total amount of its debts (including, without limitation, contingent liabilities); and

 

(b)                                 the present fair saleable value of its assets is greater than its probable liability on its existing debts as such debts become absolute and matured; and

 

(c)                                  it is then able and expects to be able to pay its debts (including, without limitation, contingent debts and other commitments) as they mature; and

 

(d)                                 it has capital sufficient to carry on its business as conducted and as proposed to be conducted.

 

For purposes of determining whether a Person is Solvent, (x) the amount of any contingent liability shall be computed as the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability, and (y) the value of rights of contribution from other Solvent entities shall be included.

 

“SPC” has the meaning set forth in Section 10.06(h).

 

“Specified Debt” means the Convertible Debentures, the CPILP Notes and the 2011 Notes.

 

“Specified Project Effect”  means, from time to time, defaults with respect to Contractual Obligations of any Loan Party or any Subsidiary of any Loan Party, as applicable, related to one or more Projects which Contractual Obligations, in the aggregate, impact at least 10% of the Loan Parties’ net cash flow from all of the Projects for the 12-month period ending the date of the most recent quarterly financial statements delivered pursuant to Section 6.01; provided, that for purposes hereof such net cash flow shall be reduced on a pro forma basis to reflect any Asset Sales occurring since the date of such financials.

 

“Spot Rate” for a currency means the rate determined by the Administrative Agent or the L/C Issuers, as applicable, equal to the rate of exchange for converting from one currency to another quoted by the Bank of Canada at approximately noon (Toronto time) on the effective date of such conversion.

 

“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the Borrowers unless such contingency has occurred).

 

“Subject Period” means, as of any date of determination for any Person, the trailing twelve fiscal month period of such Person ending on such date.

 

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“Subsidiary” means, with respect to any Person (herein referred to as the “parent”), any corporation, partnership, limited liability company, association or other business entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or more than 50% of the general partnership interests are, at the time any determination is being made, owned or held (directly or indirectly through one or more subsidiaries), or (b) which is a partnership with respect to which such parent is the sole general partner of and Controls such partnership; for greater certainty, the Subsidiaries of the Borrowers will include all entities listed on Schedule 5.13.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement, including without limitation the BMO ISDA Master Agreement and any other Master Agreement with a Lender or an Affiliate of a Lender (including any Lender that was a “Lender” under the Existing Credit Agreement).

 

“Swap Obligations” of a Person means any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Swap Contracts, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap Contracts; provided, however, that with respect to Swap Obligations between any of the Borrowers or another Loan Party and a Lender to be included as an “Obligation”, such Swap Obligations shall have been incurred in accordance with the terms of Section 7.03(e), and the applicable Secured Party and Loan Party agree to use commercially reasonable efforts to provide notice to the Administrative Agent of the existence of such Swap Contract and related Swap Obligation promptly following the establishment of such Swap Contract and such Swap Obligation (which notice shall be deemed given automatically upon the creation or incurrence of any Swap Obligation provided by the Administrative Agent, Bank of Montreal or any of their Affiliates).

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have 

 

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been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of Property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“Total Leverage Ratio” means, as of any date of determination, the ratio of Consolidated Total Net Debt as of the last day of the four fiscal quarters ending on such date of determination, to Consolidated EBITDA on a consolidated basis for the four fiscal quarters ending on such date of determination; provided, that (a) with respect to Non-Recourse Project Finance Indebtedness of a Subsidiary that is a Project Development Company and that has not yet achieved Commercial Operations, such Non-Recourse Project Finance Indebtedness shall not be included in determining the amount of Consolidated Total Net Debt until such Subsidiary has achieved Commercial Operations, and (b) upon achieving Commercial Operations, (x) all such Non-Recourse Project Finance Indebtedness (other than any Excluded Non-Recourse Debt) shall be included in the determination of the amount of Consolidated Total Net Debt of such Subsidiary immediately upon the first applicable date of determination, (y) Consolidated EBITDA for each of the four fiscal quarters ending immediately prior to achieving Commercial Operations for such Subsidiary shall be deemed to be as set forth in the applicable Acceptable Project Development Company Projections (“Projected EBITDA”), and (z) the calculation of Consolidated EBITDA for each of the four fiscal quarters ending immediately after achieving Commercial Operations shall include actual EBITDA for any fiscal quarter ending after Commercial Operations and Projected EBITDA for any fiscal quarter ending prior to Commercial Operations; provided further, that at no time shall more than $350,000,000 of such Non-Recourse Project Finance Indebtedness be excluded from the determination of the amount of Consolidated Total Net Debt.

 

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

 

“Type” means, with respect to a Loan, its character as a US Base Rate Loan, US Prime Rate Loans, Cdn. Prime Rate Loan, Bankers’ Acceptance (or BA Equivalent Note) or a Eurocurrency Rate Loan.

 

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“UCC” means the Uniform Commercial Code as in effect in the State of New York or, when the laws of any other jurisdiction govern the perfection or enforcement of any Lien, the UCC shall mean those personal property security laws in such other jurisdiction for the purposes of the provisions hereof relating to such attachment, perfection or priority and for the definitions related to such provisions.

 

“UFCA” has the meaning set forth in Section 10.21.

 

“UFTA” has the meaning set forth in Section 10.21.

 

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

 

“United States” and “U.S.” mean the United States of America.

 

“US Base Rate” means, for any day, a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the annual rate of interest determined from time to time by Bank of Montreal as being its reference rate then in effect for determined rates on US Dollar denominated commercial loans made by Bank of Montreal in Canada and which it publicly announces as its US Dollar “prime rate” and (c) the Eurocurrency Rate for US Dollar deposits for a 30 day Interest Period as determined on such day, plus 1.0%.  Any change in such rate announced by Bank of Montreal shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“US Base Rate Loan” means a Loan made to the Canadian Borrower that bears interest based on the US Base Rate.

 

“US Borrower Commitment” means, as to each Lender, its obligation to (a) make Loans to the US Borrowers pursuant to Section 2.01, and (b) purchase participations in L/C Obligations issued on behalf of any of the Borrowers; in each case, in an aggregate principal amount not to exceed $25,000,000 other than with respect to L/C Borrowings in accordance with Section 2.01 and in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement; in each case as the US Borrower Commitments may be readjusted from time to time by the Administrative Agent in connection with a commensurate readjustment of the Canadian Borrower Commitments; provided, that in no event shall any such readjustment result in the aggregate Commitment of any Lender exceeding the aggregate Commitment amount for such Lender on Schedule 2.01.

 

“US Borrowers” has the meaning specified in the introductory paragraph hereto.

 

“US Collateral” means all Property of the Loan Parties organized under the laws of the United States or any State thereof or the District of Columbia described in any 

 

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Collateral Documents and intended under the terms of the Collateral Documents to be subject to Liens in favor of the Collateral Agent for the benefit of the Secured Parties.

 

“US Dollar” and “$” mean lawful money of the United States.

 

“US Dollar Equivalent” means at any time (a) as to any amount denominated in US Dollars, the amount thereof at such time, and (b) as to any amount denominated in Cdn. Dollars, the equivalent amount in US Dollars calculated by the Administrative Agent at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of US Dollars with Cdn. Dollars.

 

“US Dollar Letter of Credit” means any letter of credit issued hereunder for the account of the Borrowers in US Dollars and shall include the Existing Letters of Credit.  A US Dollar Letter of Credit may be a commercial letter of credit or a standby letter of credit; provided that with respect to Morgan Stanley Bank, N.A. or its Applicable Designees, such US Dollar Letters of Credit shall be standby letters of credit.

 

“US Dollar Loan” means a Loan that bears interest based on the US Base Rate, the US Prime Rate or the Eurocurrency Rate with respect to US Dollar Deposits.

 

“US GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

 

“US Guaranty” means the Amended and Restated Guaranty dated as of the Initial Closing Date, substantially in the form delivered on the Initial Closing Date, as the same may be joined from time to time by additional Guarantors after the Initial Closing Date.

 

“US Honor Date” has the meaning set forth in Section 2.03(c)(i)(A).

 

“US Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

 

“US Prime Rate” means , for any day, a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the annual rate of interest determined from time to time by Bank of Montreal as being its reference rate then in effect for determined rates on US Dollar denominated commercial loans made by Bank of Montreal in the United States and which it publicly announces as its US Dollar “prime rate” and (c) the Eurocurrency Rate for US Dollar deposits for a 30 day Interest Period as determined on such day, plus 1.0%. Any change in such rate announced by Bank of Montreal shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“US Prime Rate Loan” means a Loan made to a US Borrower that bears interest based on the US Prime Rate.

 

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“US Tax Compliance Certificate” has the meaning set forth in Section 3.01(e)(ii)(c).

 

“US Unreimbursed Amount” has the meaning set forth in Section 2.03(c)(i)(A).

 

“Voluntary Prepayment” has the meaning set forth in Section 7.06.

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness or Disqualified Stock, as the case may be, at any date, the quotient obtained by dividing (a) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock multiplied by the amount of such payment, by (b) the sum of all such payments.

 

“Wholly-Owned Subsidiary” of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which will at the time be owned by such Person or by one or more Wholly-Owned Subsidiaries of such Person.

 

1.02.                     Other Interpretive Provisions.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

 

(a)                                 The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “Property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

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(b)                                 In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

 

(c)                                  All calculations of fundings of Loans, issuances of Letters of Credit and payments of Obligations shall be in US Dollars or Cdn. Dollars, as applicable, and, unless the context otherwise requires, all determinations (including calculations of financial covenants) made from time to time under the Loan Documents shall be made in light of the circumstances existing at such time and shall be stated in US Dollars.

 

(d)                                 Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 

1.03.                     Accounting Terms.

 

(a)                                 All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements and using the same asset valuation method as used in such financial statements, except as otherwise specifically prescribed herein.

 

(b)                                 If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrowers or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrowers shall provide to the Secured Parties financial statements and other documents required under this Agreement or as reasonably requested hereunder (such request to be made no later than the later of 6 months after the date of the applicable financial statement or the end of the fiscal year pertaining to such financial statement) setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

 

1.04.                     Rounding.  Any financial ratios required to be maintained by the Borrowers pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

1.05.                     References to Agreements and Laws.  Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, 

 

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restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.

 

1.06.                     Times of Day.  Unless otherwise specified, all references herein to times of day shall be references to Eastern Time (daylight or standard, as applicable).

 

1.07.                     Letter of Credit Amounts.  Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

 

1.08.                     Interest Act (Canada).  For the purposes of this Agreement, whenever interest to be paid hereunder is to be calculated on the basis of 360 days or any other period of time that is less than a calendar year, the yearly rate of interest to which the rate determined pursuant to such calculation is equivalent is the rate so determined multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360 or such other number of days in such period, as the case may be

 

1.09.                     Exchange Rates; Currency Equivalents; Applicable Currency.

 

(a)                                 For purposes of this Agreement, references to the applicable outstanding amount of Loans, Letters of Credit, Total Outstandings or L/C Obligations shall be deemed to refer to the US Dollar Equivalent thereof.

 

(b)                                 For purposes of this Agreement, the US Dollar Equivalent of any Loans, Letters of Credit, other Obligations and other references to amounts denominated in Cdn. Dollars shall be determined in accordance with the terms of this Agreement in respect of the most recent Revaluation Date.  Such US Dollar Equivalent shall become effective as of such Revaluation Date for such Loans, Letters of Credit and other Obligations and shall be the US Dollar Equivalent employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur for such Loans, Letters of Credit and other Obligations.  Except as otherwise expressly provided herein, the applicable amount of any currency for purposes of the Loan Documents (including for purposes of financial statements and all calculations in connection with financial covenants) shall be the US Dollar Equivalent thereof; provided however, that with respect to minimum amounts for Borrowings (and conversions and continuations of Loans) or repayments and prepayments, shall be such the amounts as set forth in this Agreement with respect to the applicable currency of any such Loan.

 

(c)                                  Wherever in this Agreement in connection with a borrowing, conversion, continuation or prepayment of an Loan or the issuance, amendment or extension of a 

 

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Letter of Credit, an amount, such as a required minimum or multiple amount, is expressed in US Dollars, but such Loan or Letter of Credit is denominated in Cdn. Dollars, such amount shall be the relevant Cdn. Dollar Equivalent of such US Dollar amount (rounded to the nearest Cdn. Dollar, with 0.50 of a unit being rounded upward), as determined by the Administrative Agent or the L/C Issuers, as the case may be.

 

(d)                                 For purposes of this Agreement, all repayments, prepayments or reimbursements with respect to Loans, Letters of Credit and other Obligations shall be made in the currency applicable to such Advance, Letter of Credit or other Obligation except as otherwise provided herein.

 

ARTICLE II.
 THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01.                     Loans; Advances.

 

(a)                                 Loans.  Subject to the terms and conditions set forth herein, each Lender severally agrees to make Loans to the Borrowers from time to time in US Dollars or in Cdn. Dollars, in each case on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Commitment; provided, however, that after giving effect to any Borrowing, (i) the Total Outstandings shall not exceed the Aggregate Commitments, (ii) the aggregate Outstanding Amount of the Loans of any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations, shall not exceed such Lender’s Commitment and (iii) the aggregate Outstanding Amount of the Loans of all Lenders shall not exceed $25,000,000, other than any Loans made in connection with an L/C Borrowing; provided however, that the Lenders will not be required to make any Loans to any Borrower (other than in connection with L/C Borrowings) at any time that the aggregate outstanding principal amount of Loans is greater than or equal to $25,000,000.  Within the limits of each Lender’s Commitment, and subject to the other terms and conditions hereof, the Borrowers may borrow under this Section 2.01, prepay under Section 2.04, and reborrow under this Section 2.01.  Loans may be made, at the option of the Borrowers, in US$ as US Base Rate Loans to the Canadian Borrower, US Prime Rate Loans to the US Borrowers or Eurocurrency Rate Loans to any Borrower, or in Cdn$ as Cdn. Prime Rate Loans or Bankers’ Acceptances (or BA Equivalent Notes) to the Canadian Borrower.  In addition to the foregoing, certain Loans may be made to the Borrowers to the extent they are deemed to be made in accordance with Sections 2.02(c), 2.02(g), 2.03(c)(i)(B), 2.03(c)(ii), 3.02, 3.03 and 3.07.  The Borrowers and the Lenders each hereby agree that all “Loans” (as defined in the Existing Credit Agreement), outstanding under the Existing Credit Agreement on the Closing Date, shall be deemed to be Loans made under this Agreement and shall be redistributed amongst the Lenders according to their respective Pro Rata Shares on the Closing Date and all other “Credit Extensions” (as defined in the Existing Credit Agreement) together with any and all fees and expenses accrued and unpaid or otherwise outstanding under the Existing Credit Agreement on the Closing Date, shall be continued as Credit Extensions, fees and expenses under this Agreement.

 

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2.02.                     Borrowings, Conversions and Continuations of Loans.

 

(a)                                 (i)                                     Borrowings.  Each Borrowing shall be made upon the Borrower Agent’s irrevocable notice to the Administrative Agent, which may be given by telephone.  Each such notice must be received by the Administrative Agent not later than (A) 2:00 p.m. (Eastern time) 3 Business Days prior to the requested date of any Borrowing of Eurocurrency Rate Loans or Bankers’ Acceptances (or BA Equivalent Note), (B) 10:00 a.m. (Eastern time) on the requested date of any Borrowing of US Base Rate Loans and US Prime Rate Loans, and (c) 10:00 a.m. (Eastern time) on the requested date of any Borrowing of Cdn. Prime Rate Loans.  Each telephonic notice by the Borrower Agent pursuant to this Section 2.02(a)(i) must be confirmed promptly by delivery to the Administrative Agent of a written Notice of Borrowing, appropriately completed and signed by a Responsible Officer of the Borrower Agent.  Each Borrowing of Eurocurrency Rate Loans or Bankers’ Acceptances (or BA Equivalent Notes) shall be in a principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof.  Except as provided in Section 2.03(c), each Borrowing of Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof.  Each Notice of Borrowing (whether telephonic or written) shall specify (A) the applicable Borrower or Borrowers, (B) the requested date of the Borrowing (which shall be a Business Day), (C) the principal amount of Loans to be borrowed, (D) whether the Borrowing is to be a US Dollar Loan or a Cdn. Dollar Loan and, in each case, whether it is to be made as a Base Rate Loan, Bankers’ Acceptance (or BA Equivalent Note) or a Eurocurrency Rate Loan, and (E) in the case of a Eurocurrency Rate Loan or Bankers’ Acceptance (or BA Equivalent Note), the duration of the Interest Period with respect thereto.  Notwithstanding anything to the contrary, (i) the Canadian Borrower shall be permitted to borrow Eurocurrency Rate Loans, Bankers’ Acceptances (or BA Equivalent Notes), Canadian Prime Rate Loans and US Base Rate Loans, and (ii) the US Borrowers shall be permitted to borrow US Prime Rate Loans and Eurocurrency Rate Loans.  If the Borrower Agent, on behalf of itself or either of the US Borrowers, requests a Borrowing of Eurocurrency Rate Loans (with respect to the Canadian Borrower or the US Borrowers) or Bankers’ Acceptances (or BA Equivalent Notes) (with respect to the Canadian Borrower) in any such Notice of Borrowing, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.  If the Borrower Agent, on behalf of itself or either of the US Borrowers, fails to specify the type of Loan in a Notice of Borrowing, then the applicable Loans shall be made as US Base Rate Loans with respect to the Canadian Borrower or US Prime Rate Loans with respect to the US Borrowers.

 

(ii)                                  Conversions and Continuations of Loans.  Each conversion of Loans from one Type to the other, and each continuation of Eurocurrency Rate Loans or Bankers’ Acceptances (or BA Equivalent Notes) shall be made upon the Borrower Agent’s irrevocable notice to the Administrative Agent, which may be given by telephone.  Each such notice must be received by the Administrative Agent not later than 2:00 p.m. (Eastern time) 3 Business Days prior to the requested date of any conversion to or continuation of Eurocurrency Rate Loans or Bankers’ Acceptances (or BA Equivalent Notes) or of any conversion of a Eurocurrency Rate Loan to a US Base Rate Loan or US Prime Rate Loan, or a 

 

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Bankers’ Acceptance (or BA Equivalent Note) to a Cdn. Prime Rate Loan, or any conversion of a US Base Rate Loan or US Prime Rate Loan to a Eurocurrency Rate Loan, or a Cdn. Prime Rate Loan to a Bankers’ Acceptance (or BA Equivalent Note) or any conversion of a Base Rate Loan from one currency to another currency.  Each telephonic notice by the Borrower Agent pursuant to this Section 2.02(a)(ii) must be confirmed promptly by delivery to the Administrative Agent of a written Notice of Conversion/Continuation, appropriately completed and signed by a Responsible Officer of the Borrower Agent.  Each conversion to or continuation of Eurocurrency Rate Loans or Bankers’ Acceptances (or BA Equivalent Notes), as applicable, shall be in a principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof.  Except as provided in Section 2.03(c), each conversion to Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof.  Each Notice of Conversion/Continuation (whether telephonic or written) shall specify (A) the applicable Borrower or Borrowers, (B) whether the applicable Borrower is requesting a conversion of Loans from one Type to the other, or a continuation of Eurocurrency Rate Loans or Bankers’ Acceptances (or BA Equivalent Notes), (C) the requested date of the conversion or continuation, as the case may be (which shall be a Business Day), (D) the principal amount of Loans to be converted or continued, (E) the Type of Loans to which existing Loans are to be converted, and (F) if applicable, the duration of the Interest Period with respect thereto.  If the Borrower Agent, on behalf of itself or either of the US Borrowers, fails to specify a Type of Loan in a Notice of Conversion/Continuation or if the Borrower Agent fails to give a timely notice requesting a conversion or continuation, then the applicable US Dollar Loans shall be converted to US Base Rate Loans with respect to the Canadian Borrower and US Prime Rate Loans with respect to the US Borrowers and the applicable Cdn. Dollar Loans shall be converted to Cdn. Prime Rate Loans.  Any such automatic conversion to US Base Rate Loans or US Prime Rate Loans, as applicable, shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurocurrency Rate Loans or Bankers’ Acceptances (or BA Equivalent Notes).  If the Borrower Agent requests a conversion to, or continuation of Eurocurrency Rate Loans or Bankers’ Acceptances (or BA Equivalent Notes) in any such Notice of Conversion/Continuation, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.

 

(b)                                 Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Pro Rata Share of the applicable Loans, and if no timely notice of a conversion or continuation is provided by the Borrower Agent, the Administrative Agent shall notify each Lender of the details of any automatic conversion to, in the case of US Dollar Loans, US Base Rate Loans with respect to the Canadian Borrower or US Prime Rate Loans with respect to the US Borrowers and, in the case of Cdn. Dollar Loans, Cdn. Prime Rate Loans, in each case as described in the preceding subsection.  In the case of a Borrowing, each Lender shall make the amount of its Loan available to the Administrative Agent in Same Day Funds at the Administrative Agent’s Office not later than 3:00 p.m. on the Business Day specified in the applicable Loan Notice.  Upon satisfaction of the applicable conditions set forth in Section 4.02  

 

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(and, if such Borrowing is the initial Credit Extension, Section 4.01), the Administrative Agent shall make all funds so received available to the Borrowers in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrowers on the books of Bank of Montreal with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower Agent.

 

(c)                                  Except as otherwise provided herein, a Eurocurrency Rate Loan or Bankers’ Acceptance (or BA Equivalent Note) may be continued or converted only on the last day of an Interest Period for such Eurocurrency Rate Loan or Bankers’ Acceptance (or BA Equivalent Note), as applicable.  During the existence of a Default, no Loans may be requested as, converted to or continued as Eurocurrency Rate Loans or Bankers’ Acceptances (or BA Equivalent Notes) without the consent of the Required Lenders.  During the existence of an Event of Default, unless the Required Lenders consent, (i) all Eurocurrency Rate Loans shall be converted to US Base Rate Loans with respect to the Canadian Borrower and US Prime Rate Loans with respect to the US Borrowers and (ii) all Bankers’ Acceptances (or BA Equivalent Notes) upon their maturity shall be converted to Cdn. Prime Rate Loans.

 

(d)                                 The Administrative Agent shall promptly notify the Borrower Agent and the Lenders of the interest rate or discount rate, as applicable, applicable to any Interest Period for Eurocurrency Rate Loans or Bankers’ Acceptances (or BA Equivalent Notes) upon determination of such interest rate.  The determination of the Eurocurrency Rate or BA Discount Rate by the Administrative Agent shall be conclusive in the absence of manifest error.  Any change in the US Base Rate, US Prime Rate or Cdn. Prime Rate shall be effective on the date the change becomes effective generally without the necessity for any notice.

 

(e)                                  After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Eurocurrency Rate Loans and Bankers’ Acceptances (or BA Equivalent Notes), there shall not be more than ten (10) Interest Periods in effect at any one time.

 

2.03.                     Letters of Credit.

 

(a)                                 The Letter of Credit Commitment.

 

(i)                                     Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrowers on their own behalf, or on behalf of their Subsidiaries, and to amend or renew Letters of Credit previously issued by it, in accordance with subsection (b) below (provided that the Borrower requesting any issuance of a Letter of Credit shall be primarily obligated to the extent a Letter of Credit is issued on behalf of a Subsidiary of such Borrower), and (2) to honor drafts under the Letters of Credit made in accordance with the 

 

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terms of such Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrowers and their Subsidiaries; provided that no L/C Issuer shall be obligated to make any L/C Credit Extension with respect to any Letter of Credit, and no Lender shall be obligated to participate in any Letter of Credit if, as of the date of such L/C Credit Extension, after giving effect thereto (w) Total Outstandings would exceed the Aggregate Commitments, (x) the aggregate Outstanding Amount of the Loans of any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations, would exceed such Lender’s Commitment, (y) the Outstanding Amount of the L/C Obligations would exceed the Letter of Credit Sublimit or (z) the aggregate Outstanding Amount of all of Letters of Credit issued by such L/C Issuer would exceed such L/C Issuer’s L/C Issuer Limit.  Within the foregoing limits, and subject to the terms and conditions hereof, the Borrowers’ ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrowers may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.  All Existing Letters of Credit shall be deemed to have been issued pursuant hereto and to have satisfied all applicable requirements for issuance hereunder, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.

 

(ii)                                  No L/C Issuer shall be obligated to issue any Letter of Credit, if:

 

(A)                               the expiry date of such requested Letter of Credit would occur more than 365 days after the date of issuance or last extension;

 

(B)                               the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless the outstanding amount of such Letter of Credit is Cash Collateralized at the Maturity Date on terms and conditions that are reasonably satisfactory to such L/C Issuer;

 

(C)                               any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Issuer in good faith deems material to it;

 

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(D)                               the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer;

 

(E)                                except as otherwise agreed by the Administrative Agent and such L/C Issuer, such Letter of Credit is in an initial stated amount less than $100,000, in the case of a commercial Letter of Credit, or a standby Letter of Credit or such lesser amount as accepted by such L/C Issuer in its sole discretion;

 

(F)                                 such Letter of Credit is to be denominated in a currency other than US Dollars or Cdn. Dollars;

 

(G)                               such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder;

 

(H)                              the purpose is not consistent with Section 6.12 or the form of the proposed Letter of Credit is not reasonably satisfactory to Administrative Agent and such L/C Issuer in their respective reasonable discretion; or

 

(I)                                   a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at that time a Defaulting Lender, unless the applicable L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to such L/C Issuer (in its sole discretion) with the Borrowers or such Lender to eliminate such L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.14(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which such L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.

 

(iii)                               No L/C Issuer shall be required to amend any Letter of Credit to increase the amount thereof, or extend the maturity thereof, if such L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.

 

(iv)                              No L/C Issuer shall be under any obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

 

(v)                                 Each L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and such L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of 

 

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Credit as fully as if the term “Administrative Agent” as used in Article IX included such L/C Issuer with respect to such acts or omissions, and (B)  as additionally provided herein with respect to such L/C Issuer.

 

(b)                                 Procedures for Issuance and Amendment of Letters of Credit; Auto-Renewal Letters of Credit.

 

(i)                                     Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrowers delivered to the applicable L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower Agent.  Such Letter of Credit Application must be received by such L/C Issuer and the Administrative Agent (x) with respect to US Dollar Letters of Credit, not later than 2:00 p.m. (Eastern time) at least 3 Business Days (or such later date and time as such L/C Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be and (y) with respect to Cdn. Dollar Letters of Credit denominated in Cdn. Dollars, not later than 2:00 p.m. (Eastern time) at least 3 Business Days (or such later date and time as such L/C Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be.  In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to such L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) whether such Letter of Credit is a US Dollar Letter of Credit or a Cdn. Dollar Letter of Credit; and (H) such other matters as such L/C Issuer may require.  In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to such L/C Issuer (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as such L/C Issuer may require.  The Borrower Agent hereby agrees to provide any and all “know your customer” or other similar information required by applicable law regarding the beneficiary of any Letter of Credit reasonably requested in writing by an L/C Issuer prior to the issuance of any Letter of Credit.

 

(ii)                                  Promptly after receipt of any Letter of Credit Application, the applicable L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower Agent and, if not, such L/C Issuer will provide the Administrative Agent with a copy thereof.  Unless such L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, at least 1 Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable 

 

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conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrowers or enter into the applicable amendment, as the case may be, in each case in accordance with such L/C Issuer’s usual and customary business practices.  Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the applicable L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s Pro Rata Share times the amount of such Letter of Credit.

 

(iii)                               The Lenders shall be deemed to have authorized (but may not require) each L/C Issuer to permit, in its sole discretion, the renewal of any Letter of Credit that has automatic renewal provisions (each, an “Auto-Renewal Letter of Credit”) at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that the L/C Issuers shall not permit any such renewal if (A) such L/C Issuer has reasonably determined that it would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof (by reason of the provisions of Section 2.03(a)(ii) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is 5 Business Days before the non-renewal notice date set forth in such Auto-Renewal Letter of Credit or, if not designated, the annual anniversary of the issuance thereof, that (1) from the Administrative Agent that the Required Lenders have elected not to permit such renewal or (2) from the Administrative Agent, any Lender or the Borrowers that one or more of the applicable conditions specified in Section 4.02 is not then satisfied.

 

(iv)                              Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the applicable L/C Issuer will also deliver to the Borrower Agent and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

 

(c)                                  Drawings and Reimbursements; Funding of Participations.

 

(i)                                     Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the applicable L/C Issuer shall notify the Borrower Agent and the Administrative Agent thereof.

 

(A)                               Not later than 10:00 a.m. (Eastern time) with respect to US Dollar Letters of Credit on the date of any payment by such L/C Issuer under a US Dollar Letter of Credit (each such date, a “US Honor Date”), the Borrowers shall reimburse such L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing.  If the Borrowers fail to so reimburse such L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender of the US Honor Date, the amount of the unreimbursed drawing (the “US Unreimbursed Amount”), and the amount of such Lender’s Pro Rata Share thereof.  In 

 

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such event, the Borrowers shall be deemed to have requested a Borrowing of US Prime Rate Loans to be disbursed on the US Honor Date in an amount equal to the US Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02(a) for the principal amount of US Prime Rate Loans, subject to the conditions set forth in Section 4.02 (other than the delivery of a Loan Notice).

 

(B)                               Not later than 10:00 a.m. (Eastern time) with respect to Cdn. Dollar Letters of Credit on the date of any payment by such L/C Issuer under a Cdn. Dollar Letter of Credit (each such date, a “Cdn. Honor Date”), the Borrowers shall reimburse such L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing.  If the Borrowers fail to so reimburse such L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender of the Cdn. Honor Date, the amount of the unreimbursed drawing (the “Cdn. Unreimbursed Amount”), and the amount of such Lender’s Pro Rata Share thereof.  In such event, the Borrowers shall be deemed to have requested a Borrowing of Cdn. Prime Rate Loans to be disbursed on the Cdn. Honor Date in an amount equal to the Cdn. Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02(a), but subject to the conditions set forth in Section 4.02 (other than the delivery of a Loan Notice).

 

(C)                               Any notice given by an L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing.

 

(ii)                                  With respect to US Letters of Credit, each Lender (including the Lender acting as an L/C Issuer) shall upon any notice pursuant to Section 2.03(c)(i)(A) make funds available to the Administrative Agent for the account of each of the applicable L/C Issuers at the Administrative Agent’s Office in an amount equal to its Pro Rata Share of the US Unreimbursed Amount, not later than 2:00 p.m. (Eastern time) on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender that so makes funds available shall be deemed to have made a US Base Rate Loan or US Prime Rate Loan, as applicable, to the applicable Borrower in such amount.  With respect to Cdn. Letters of Credit, each Lender (including the Lender acting as an L/C Issuer) shall upon any notice pursuant to Section 2.03(c)(i)(A) make funds available to the Administrative Agent for the account of each of the applicable L/C Issuers at the Administrative Agent’s Office in an amount equal to its Pro Rata Share of the Cdn. Unreimbursed Amount, not later than 2:00 p.m. (noon) (Eastern time) on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender that so makes funds available shall be deemed to have made a Cdn. Prime Rate Loan, to the applicable Borrower in such amount.  The Administrative Agent shall remit the funds so received to the applicable L/C Issuers.

 

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(iii)                               With respect to (A) any US Unreimbursed Amount that is not fully refinanced by a Borrowing of US Base Rate Loans or US Prime Rate Loans, as applicable, because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the applicable Borrower shall be deemed to have incurred from the applicable L/C Issuer an L/C Borrowing in the amount of the US Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate and (B) any Cdn. Unreimbursed Amount that is not fully refinanced by a Borrowing of Cdn. Prime Rate Loans, in the applicable currency, because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the Canadian Borrower shall be deemed to have incurred from the applicable L/C Issuer an L/C Borrowing in the amount of the Cdn. Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate.  In such event, each Lender’s payment to the Administrative Agent for the account of the applicable L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03.

 

(iv)                              Until each Lender funds its Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse an L/C Issuer for any amount drawn under any Letter of Credit issued by such L/C Issuer, interest in respect of such Lender’s Pro Rata Share of such amount shall be solely for the account of such L/C Issuer.

 

(v)                                 Each Lender’s obligation to make Loans or L/C Advances to reimburse the L/C Issuers for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against any L/C Issuer, the Borrowers or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the Borrowers of a Loan Notice).  No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrowers to reimburse the L/C Issuers for the amount of any payment made by any L/C Issuer under any Letter of Credit issued by it, together with interest as provided herein.

 

(vi)                              If any Lender fails to make available to the Administrative Agent for the account of any of the L/C Issuers any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii) or in accordance with Section 2.02(i), the applicable L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such 

 

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payment is immediately available to such L/C Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by such L/C Issuer in accordance with banking industry rules on interbank compensation.  A certificate of any L/C Issuer submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

 

(d)                                 Repayment of Participations.

 

(i)                                     At any time after an L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative Agent receives for the account of such L/C Issuer any payment in respect of the related applicable Unreimbursed Amount or interest thereon (whether directly from the Borrowers or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Pro Rata Share thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s L/C Advance was outstanding) in the same funds as those received by the Administrative Agent.

 

(ii)                                  If any payment received by the Administrative Agent for the account of an L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by such L/C Issuer in its discretion), each Lender shall pay to the Administrative Agent for the account of such L/C Issuer its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect.  The obligations of the Lenders under this clause (ii) shall survive the payment in full of the Obligations and the termination of this Agreement.

 

(e)                                  Obligations Absolute.  The obligation of the Borrowers to reimburse the L/C Issuers for each drawing under each Letter of Credit and to repay each associated L/C Borrowing, shall in each case, be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

 

(i)                                     any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;

 

(ii)                                  the existence of any claim, counterclaim, set-off, defense or other right that the applicable Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), any L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated 

 

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hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

 

(iii)                               any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

 

(iv)                              any payment by an L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by such L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

 

(v)                                 any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the applicable Borrower, except for the gross negligence or willful misconduct in connection with its payment of a Letter of Credit.

 

The Borrowers shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrowers’ instructions or other irregularity, the Borrower Agent will immediately notify the applicable L/C Issuer.  The Borrowers shall be conclusively deemed to have waived any such claim against such L/C Issuer and its correspondents unless such notice is given as aforesaid.

 

(f)                                   Role of L/C Issuer.  Each Lender and the Borrowers agree that, in paying any drawing under a Letter of Credit, none of the L/C Issuers shall have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document.  None of the L/C Issuers, the Administrative Agent or any of their Related Parties, nor any of the respective correspondents, participants or assignees of any of the L/C Issuers, shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit Application.  The Borrowers hereby assume all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrowers’ pursuing such rights and remedies as they may have against the beneficiary or transferee 

 

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at law or under any other agreement.  None of the L/C Issuers, the Administrative Agent or any of their Related Parties, nor any of the respective correspondents, participants or assignees of any of the L/C Issuers, shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.03(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Borrowers may have a claim against an L/C Issuer, and such L/C Issuer may be liable to the Borrowers, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrowers which the Borrowers prove were caused by the such L/C Issuer’s willful misconduct or gross negligence or such L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit.  In furtherance and not in limitation of the foregoing, each L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and such L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

 

(g)                                  Cash Collateral.

 

(i)                                     Upon the request of the Administrative Agent, (i) if an L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, (ii) if, as of the Letter of Credit Expiration Date, any Letter of Credit may for any reason remain outstanding and partially or wholly undrawn, (iii) if Availability is less than zero after giving effect to the prepayment of outstanding Loans pursuant to Section 2.04(b), (iv) if the Total Outstandings are equal to or greater than $125,000,000, or (v) if any demand for Cash Collateralization has been made under Section 8.02(c), the Borrowers shall immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations (in an amount equal to such Outstanding Amount determined as of the date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case may be) or, in the case of clause (iv), the amount by which the Total Outstandings exceed $125,000,000.  Sections 2.04 and 8.02(c) set forth certain additional requirements to deliver Cash Collateral hereunder. At any time that there shall exist a Defaulting Lender, immediately upon the request of the Administrative Agent or any L/C Issuer, the Borrowers shall deliver to the Administrative Agent Cash Collateral in an amount sufficient to cover all Fronting Exposure (after giving effect to Section 2.14(a)(iv) and any Cash Collateral provided by the Defaulting Lender).  The Borrowers hereby grant to the Administrative Agent, for the benefit of each of the L/C Issuers and the other Secured Parties, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing.  Cash Collateral shall be maintained in blocked deposit accounts at Bank of Montreal or its Affiliate; provided, that with respect to any Cash Collateral posted by the Canadian Borrower, such Cash Collateral shall consist of Canadian government securities that qualify as Cash Equivalent Investments that are pledged to and held by, or 

 

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registered in the name of the Administrative Agent, in each case, on terms and conditions reasonably satisfactory to the Administrative Agent.  If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent as herein provided, or that the total amount of such Cash Collateral is less than the applicable Fronting Exposure and other obligations secured thereby, the Borrowers or the relevant Defaulting Lender will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in a form reasonably satisfactory to the Administrative Agent and in an amount sufficient to eliminate such deficiency.

 

(ii)                                  Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 2.03 or 8.02(c) in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, and obligations to fund participations therein for which the Cash Collateral was provided (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation), it being agreed that Cash Collateral provided in respect of obligations of Defaulting Lenders to L/C Issuers shall be applied on a pro rata basis as set forth in Section 2.14(a)(ii).

 

(iii)                               Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or other obligations and not otherwise applied in accordance with Section 2.03(g)(ii) shall be released promptly following (A) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto or (B) the Administrative Agent’s reasonable good faith determination that there exists excess Cash Collateral; provided, however,  that Cash Collateral furnished by or on behalf of the Borrowers shall not be released during the continuance of an Event of Default (and following application as provided in this Section 2.03 may be otherwise applied in accordance with Section 8.03).

 

(h)                                 Applicability of ISP and UCP.  Unless otherwise expressly agreed by the applicable L/C Issuer and the Borrower Agent when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance shall apply to each commercial Letter of Credit.

 

(i)                                     Letter of Credit Fees.  (i) The Borrowers shall pay to the Administrative Agent, for the account of each Lender in accordance with its Pro Rata Share, a Letter of Credit fee for each Letter of Credit equal to the L/C Rate times the daily maximum amount available to be drawn under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit).  Such Letter of Credit fees shall be computed on a quarterly basis in arrears.  Such Letter of Credit fees shall be due and payable on (i) the last Business Day of each March, June, September and December, commencing on the first such date to occur after the issuance of such Letter of Credit, (ii) on the Letter of Credit Expiration Date and (iii) thereafter on demand.  If there is any 

 

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change in the L/C Rate during any quarter, the daily maximum amount of each Letter of Credit shall be computed and multiplied by the L/C Rate separately for each period during such quarter that such L/C Rate was in effect.

 

(j)                                    Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.  The Borrowers shall pay directly to each L/C Issuer for its own account a fronting fee with respect to each Letter of Credit issued by such L/C Issuer equal to 0.375% per annum times the daily maximum amount available to be drawn under such Letter of Credit on the date such Letter of Credit is issued or renewed.  Such fee shall be due and payable on (i) the date of issuance of each Letter of Credit, and (ii) annually on each anniversary of such issuance date if such Letter of Credit is renewed or has an expiry date more than 365 days, in each case, as permitted under this Agreement.  In addition, the Borrowers shall pay directly to each L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such L/C Issuer relating to letters of credit as from time to time in effect in connection with Letters of Credit issued by such L/C Issuer.  Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

 

(k)                                 Conflict with Letter of Credit Application.  In the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control.

 

2.04.                     Prepayments.

 

(a)                                 The Borrowers may, upon notice to the Administrative Agent by the Borrower Agent, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than (A) 2:00 p.m. (Eastern time) 3 Business Days prior to any date of prepayment of Eurocurrency Rate Loans or Cash Collateralization of Bankers’ Acceptances (or BA Equivalent Notes), (B) 10:00 a.m. (Eastern time) on the date of prepayment of US Base Rate Loans and US Prime Rate Loans, and (C) 10:00 a.m. (Eastern time) on the date of prepayment of Cdn. Prime Rate Loans (ii) any prepayment of Eurocurrency Rate Loans or Cash Collateralization Bankers’ Acceptances (or BA Equivalent Notes) shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof; and (iii) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding.  Each such notice shall specify the date and amount of such prepayment (or Cash Collateralization with respect to Bankers’ Acceptances and BA Equivalent Notes) and whether such Loans are Eurocurrency Rate Loans, Bankers’ Acceptances (or BA Equivalent Notes) or Base Rate Loans and whether such Loans are US Dollar Loans or Cdn. Dollar Loans.  The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s Pro Rata Share of such prepayment.  If such notice is given by the Borrower Agent, the Borrowers shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.  Any prepayment of a Eurocurrency Rate Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to 

 

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Section 3.05 with respect to Eurocurrency Rate Loans.  Each such prepayment shall be applied to the Loans of the Lenders in accordance with their respective Pro Rata Shares.  With respect to Bankers’ Acceptances (and BA Equivalent Notes), the amount of such prepayment shall be held as Cash Collateral to be applied against the liability of the applicable Lender upon the maturity of such Bankers’ Acceptance or BA Equivalent Note being so prepaid.

 

(b)                                 Notwithstanding anything herein to the contrary, if an Overadvance exists as a result of currency fluctuations of Loans and Letters of Credit denominated in Cdn. Dollars, Borrowers shall, on the sooner of Administrative Agent’s demand or the first Business Day after any Borrower has actual knowledge thereof, repay the outstanding Cdn. Dollar Loans and/or Cash Collateralize outstanding L/C Obligations with respect to Cdn. Dollar Letters of Credit, in an amount such that after giving effect to such repayment of Cdn. Dollar Loans or Cash Collateralization of L/C Obligations with respect to Cdn. Dollar Letters of Credit, Total Outstandings do not exceed the Aggregate Commitments.

 

2.05.                     Termination or Reduction of Commitments.  The Borrowers may, upon notice to the Administrative Agent by the Borrower Agent, terminate the Aggregate Commitments, or from time to time permanently reduce the Aggregate Commitments; provided that (i) any such notice shall be received by the Administrative Agent not later than 12:00 p.m. (Eastern time) 2 Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Borrowers shall not terminate or reduce the Aggregate Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Outstandings would exceed the Aggregate Commitments, and (iv) if, after giving effect to any reduction of the Aggregate Commitments, the Letter of Credit Sublimit exceeds Aggregate Commitments, the Letter of Credit Sublimit shall be automatically reduced by the amount of such excess.  Other than as set forth in clause (iv) above, the amount of any such Aggregate Commitment reduction shall not be applied to the Letter of Credit Sublimit or unless otherwise specified by the Borrower Agent.  The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of the Aggregate Commitments.  Any reduction of the Aggregate Commitments shall be applied to the Commitment of each Lender according to its Pro Rata Share.  All facility and utilization fees accrued until the effective date of any termination of the Aggregate Commitments shall be paid on the effective date of such termination.

 

2.06.                     Bankers’ Acceptances

 

(a)                                 To facilitate the issuance of Bankers’ Acceptances pursuant to this Agreement, the Canadian Borrower irrevocably appoints each Lender from time to time as the attorney-in-fact of the Canadian Borrower to execute, endorse and deliver on behalf of the Borrowers drafts in the forms prescribed by such Lender (if such Lender is a BA Lender) for Bankers’ Acceptances denominated in Cdn. Dollars (each such executed draft that has not yet been accepted by a Lender being referred to as a “Draft”) or non interest-bearing promissory notes of the Canadian Borrower in favor of such Lender (if such Lender is a Non BA Lender) (each such promissory note being referred to as a “BA Equivalent Note”).  Each Bankers’ Acceptance and BA Equivalent Note executed and 

 

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delivered by a Lender on behalf of the Canadian Borrower as provided for in this Section 2.06 will be as binding upon the Borrowers as if it had been executed and delivered by a duly authorized officer of each of the Borrowers.

 

(b)                                 Notwithstanding the provisions of Section 2.06(a), the Canadian Borrower will from time to time as required by the applicable Lender provide to (a) each BA Lender an appropriate number of Drafts drawn by the Canadian Borrower upon such BA Lender and either payable to a clearing service (if such BA Lender is a member thereof) or payable to the Canadian Borrower and endorsed in blank by the Canadian Borrower (if such BA Lender is not a member of such clearing service), and (b) each Non BA Lender an appropriate number of BA Equivalent Notes in favor of such Non BA Lender.  The dates, maturity dates and face amounts of all Drafts and BA Equivalent Notes delivered by the Canadian Borrower must be left blank, to be completed by the Lenders as required by this Agreement.  Each Lender to which a Draft or BA Equivalent Note has been delivered by the Canadian Borrower will exercise the same degree of care in the custody of such Draft or BA Equivalent Note as such Lender would exercise with respect to its own property kept at the place at which the Drafts or BA Equivalent Notes are ordinarily kept by such Lender.  Each Lender, upon the written request of the Canadian Borrower, will promptly advise the Canadian Borrower of the number and designation, if any, of the Drafts and BA Equivalent Notes then held by it.  No Lender will be liable for its failure to accept a Draft or purchase a BA Equivalent Note as required by this Agreement if the cause of such failure is, in whole or in part, due to the failure of the Canadian Borrower to provide on a timely basis appropriate Drafts or BA Equivalent Notes to the applicable Lender as requested by such Lender on a timely basis.

 

(c)                                  Promptly following receipt of a Loan Notice requesting Bankers’ Acceptances, the Administrative Agent will (a) advise each BA Lender of the face amount and the term of the Draft to be accepted by it, and (b) advise each applicable Non BA Lender of the face amount and term of the BA Equivalent Note to be purchased by it.  All Drafts to be accepted from time to time by each BA Lender that is a member of a clearing service will be payable to such clearing service.  The term of all Bankers’ Acceptances and BA Equivalent Notes issued pursuant to any Loan Notice must be identical.  Each Bankers’ Acceptance and BA Equivalent Note must be dated the date such Bankers’ Acceptance or BA Equivalent Note is disbursed and issued and will be for a term of one, two, three or six months, provided that in no event will the term of a Bankers’ Acceptance or a BA Equivalent Note extend beyond the Maturity Date.  The face amount of the Draft (or the aggregate face amount of the Drafts) to be accepted at any time by each Lender that is a BA Lender, and the face amount of the BA Equivalent Note (or the aggregate face amount of the BA Equivalent Notes) to be purchased at any time by each Lender that is a Non BA Lender, will be determined by the Administrative Agent based upon the amounts of their respective Commitments; provided, that, if the face amount of a Draft or BA Equivalent Note which would otherwise be accepted or purchased by a Lender would not be Cdn$100,000 or a whole multiple thereof, the face amount shall be increased or reduced by the Agent in its sole discretion to Cdn$100,000 or the nearest whole multiple of that amount, as appropriate; provided that after such issuance, no Lender shall have aggregate outstanding Loans in excess of its Commitment.

 

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(d)                                 Each BA Lender will complete and accept on the applicable date on which a Bankers’ Acceptance or BA Equivalent is disbursed, a Draft having a face amount (or Drafts having the face amounts) and term advised by the Administrative Agent pursuant to Section 2.06(c).  Each applicable BA Lender will purchase on the applicable date on which a Bankers’ Acceptance or BA Equivalent is disbursed all Bankers’ Acceptances accepted by it, for an aggregate price equal to the BA Discount Proceeds of such Bankers’ Acceptances.  The Canadian Borrower will ensure that there is delivered to each applicable BA Lender that is a member of a clearing service, and such BA Lender is hereby authorized to release, the Bankers’ Acceptance accepted by it to such clearing service upon receipt of confirmation that such clearing service holds such Bankers’ Acceptance for the account of such BA Lender.

 

(e)                                  Each Non BA Lender, in lieu of accepting Drafts or purchasing Bankers’ Acceptances on any date such Bankers’ Acceptance is disbursed, will complete and purchase from the Canadian Borrower on the date such Bankers’ Acceptance is disbursed, of a BA Equivalent Note in a face amount and for a term identical to the face amount and term of the Drafts that such Non BA Lender would have been required to accept on such date that such Bankers’ Acceptance is disbursed if it were a BA Lender, for a price equal to the BA Discount Proceeds of such BA Equivalent Note (determined as if such BA Equivalent Note were a Bankers’ Acceptance).  Each Non BA Lender will be entitled, without charge, to exchange any BA Equivalent Note held by it for two or more BA Equivalent Notes of identical date and aggregate face amount, and the Canadian Borrower will execute and deliver to such Non BA Lender such replacement BA Equivalent Notes and such Non BA Lender will return the original BA Equivalent Note to the Canadian Borrower for cancellation.

 

(f)                                   The Canadian Borrower will pay to each BA Lender in respect of each Draft tendered by the Canadian Borrower to and accepted by such BA Lender, and to each Non BA Lender in respect of each BA Equivalent Note tendered to and purchased by such Non BA Lender, as a condition of such acceptance or purchase, the BA Stamping Fee.  A Lender is entitled to deduct and retain for its own account the amount of such fee from the amount to be transferred by such Lender to the Administrative Agent for the account of the Canadian Borrower pursuant to this Agreement in respect of the sale of the related Bankers’ Acceptance or of such BA Equivalent Note.

 

(g)                                  On the date of maturity of each Bankers’ Acceptance or BA Equivalent Note, the Borrowers will pay to the Administrative Agent, for the account of the holder of such Bankers’ Acceptance or BA Equivalent Note, in Cdn. Dollars an amount equal to the face amount of such Bankers’ Acceptance or BA Equivalent Note, as the case may be.  The obligation of the Canadian Borrower to make such payment will not be prejudiced by the fact that the holder of such Bankers’ Acceptance is the Lender that accepted such Bankers’ Acceptances.  No days of grace may be claimed by the Canadian Borrower for the payment at maturity of any Bankers’ Acceptance or BA Equivalent Note.  If any Borrower does not make such payment from the proceeds of a Loan obtained under this Agreement or otherwise, the amount of such required payment will be deemed to be a Cdn. Prime Rate Loan to the Canadian Borrower from the Lender that accepted such Banker’s Acceptance or purchased such BA Equivalent Note.

 

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(h)                                 The signature of any duly authorized officer of the Canadian Borrower on a Draft or a BA Equivalent Note may be mechanically reproduced in facsimile, and all Drafts and BA Equivalent Notes bearing such facsimile signature will be as binding upon the Canadian Borrower as if they had been manually signed by such officer, notwithstanding that such Person whose manual or facsimile signature appears on such Draft or BA Equivalent Note may no longer hold office at the date of such Draft or BA Equivalent Note or at the date of acceptance of such Draft by a BA Lender or at any time thereafter.

 

2.07.                     Interest.

 

(a)                                 Subject to the provisions of subsection (b) below, (i) each Eurocurrency Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurocurrency Rate for such Interest Period plus the Applicable Rate; and (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate.

 

(b)                                 In the event any amount due hereunder or under any other Loan Document (including, without limitation, any interest payment) is not paid when due (whether by acceleration or otherwise), the Borrowers shall pay interest on such unpaid amount (including, without limitation, interest on interest) at a fluctuating interest rate per annum equal to the Default Rate to the fullest extent permitted by applicable Law.  Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

 

(c)                                  Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

 

2.08.                     Fees.  In addition to certain fees described in subsections (i) and (j) of Section 2.03:

 

(a)                                 Commitment Fee.  The Borrowers shall pay to the Administrative Agent for the account of each Lender in accordance with its Pro Rata Share a Commitment Fee at a per annum rate equal to the Applicable Rate on the average daily Available Aggregate Commitment from the date hereof to and including the Maturity Date.  The Commitment Fee shall accrue at all times during the Availability Period (and thereafter so long as any Loans or L/C Obligations remain outstanding), including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each calendar quarter, commencing with the first such date to occur after the Closing Date, and on the Maturity Date (and, if applicable, thereafter on demand).  The Commitment Fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate 

 

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separately for each period during such quarter that such Applicable Rate was in effect.  For purposes of determining the Available Aggregate Commitment, the US Dollar Equivalent of Cdn. Dollar Loans shall be calculated on the basis of the Bank of Canada noon spot rate in effect on the first Business Day of each month. All “Commitment Fees” (as defined in the Existing Credit Agreement) that accrued prior to the Closing Date under the Existing Credit Agreement and have not yet been paid in accordance with the terms thereof, shall continue to accrue at the “Applicable Rate” (as defined in the Existing Credit Agreement) for the period from and including the last date on which such “Commitment Fees” were paid under the Existing Credit Agreement to but excluding the Closing Date, and thereafter shall accrue at the Applicable Rate hereunder and be payable in accordance with the terms hereof.

 

(b)                                 Other Fees.  Upon the satisfaction of the conditions precedent under Section 4.01, the Borrowers shall pay (i) to the Administrative Agent for its own account, fees in the amounts and at the times specified in the Fee Letter and (ii) the other fees set forth in the Fee Letter.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

 

2.09.                     Computation of Interest and Fees.

 

(a)                                 All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of Montreal’s “prime rate”, whether for Cdn. Dollars or US Dollars, shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.11(a), bear interest for one day.

 

(b)                                 Unless otherwise stated, wherever in this Agreement reference is made to a rate of interest “per annum” or a similar expression is used, such interest will be calculated on the basis of a calendar year of 365 days or 366 days, as the case may be, and using the nominal rate method of calculation and not the effective rate method of calculation or on any other basis that gives effect to the principle of deemed reinvestment of interest.  Interest will continue to accrue after maturity and default and/or judgment, if any, until payment thereof, and interest will accrue on overdue interest, if any.

 

2.10.                     Evidence of Debt.

 

(a)                                 Agent Record; Notes.  The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrowers and the interest and payments thereon.  Any failure to so record or any error in 

 

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doing so shall not, however, limit or otherwise affect the obligation of the Borrowers hereunder to pay any amount owing with respect to the Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.  Upon the request of any Lender made through the Administrative Agent, Borrowers shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records.  Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

 

(b)                                 Lender Records.  In addition to the accounts and records referred to in subsection (a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit.  In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

 

(c)                                  Loan Accounts.  The Administrative Agent shall maintain in accordance with its usual and customary practices an account or accounts for each of the US Borrowers and the Canadian Borrower (“Loan Accounts”) evidencing the Indebtedness of the Borrowers resulting from each Loan or issuance of a Letter of Credit from time to time.  Any failure of the Administrative Agent to record anything in the Loan Account, or any error in doing so, shall not limit or otherwise affect the obligation of Borrowers to pay any amount owing hereunder.  The Administrative Agent may maintain a single Loan Account in the name of the Canadian Borrower and a single Loan Account in the name of each of APG and APT, and each Borrower confirms that such arrangement shall have no effect on the joint and several character of its liability for the Obligations.

 

(d)                                 Entries Binding.  Entries made in the Loan Accounts shall constitute presumptive evidence of the information contained therein.  If any information contained in the Loan Accounts is provided to or inspected by any Person, then such information shall be conclusive and binding on such Person for all purposes absent manifest error, except to the extent such Person notifies the Administrative Agent in writing within 30 days after receipt or inspection that specific information is subject to dispute.

 

2.11.                     Payments Generally.

 

(a)                                 Payments.

 

(i)                                     All payments to be made by the Borrowers shall be made without condition or deduction for any counterclaim, defense, recoupment or set-off.  Except as otherwise expressly provided herein, all payments by the Borrowers hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in US Dollars or Cdn. Dollars, as applicable, and in Same Day Funds 

 

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(A) with respect to the payments in US Dollars, not later than 2:00 p.m. (Eastern time) on the date specified herein and (B) with respect to payments in Cdn. Dollars, not later than 2:00 p.m. (Eastern time) on the date specified herein.  The Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative Agent after 3:00 p.m. (Eastern time) shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. Without limiting the generality of the foregoing, the Administrative Agent may require that any payments due under this Agreement be made in the United States.  If, for any reason, any Borrower is prohibited by any Law from making any required payment hereunder in Cdn. Dollars, such Borrower shall make such payment in US Dollars in the US Dollar Equivalent of the Cdn. Dollar payment amount.

 

(ii)                                  The Administrative Agent may (but shall not be required to), in its discretion, retain any payments or other funds received by the Administrative Agent that are to be provided to a Defaulting Lender hereunder, and may apply such funds to such Lender’s defaulted obligations or readvance the funds to Borrowers in accordance with this Agreement.  The failure of any Lender to fund a Loan, to make any payment in respect of L/C Obligations or to otherwise perform its obligations hereunder shall not relieve any other Lender of its obligations, and no Lender shall be responsible for default by another Lender.  The Lenders and the Administrative Agent agree (which agreement is solely among them, and not for the benefit of or enforceable by any Borrower) that, solely for purposes of determining a Defaulting Lender’s right to vote on matters relating to the Loan Documents and to share in payments, fees and Collateral proceeds thereunder, a Defaulting Lender shall not be deemed to be a “Lender” until all its defaulted obligations have been cured.

 

(iii)                               The Loans, L/C Obligations and other Obligations shall constitute one general obligation of the Borrowers and (unless otherwise expressly provided in any Loan Document) shall be secured by the Liens in favor of the Administrative Agent and the Collateral Agent, as applicable, for the benefit of the Secured Parties, upon all Collateral; provided, however, that the Administrative Agent and each Lender shall be deemed to be a creditor of, and the holder of a separate claim against, each Borrower to the extent of any Obligations jointly or severally owed by such Borrower.

 

(iv)                              All repayments, prepayments or reimbursements with respect to Loans, Letters of Credit and other Obligations of the US Borrowers shall be made to the Administrative Agent’s Office in Chicago and, subject to the discretion of the Administrative Agent in Section 2.11(a)(i), all repayments, prepayments or reimbursements with respect to Loans, Letters of Credit and other Obligations of the Canadian Borrower shall be made to the Administrative Agent’s Office in Toronto.

 

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(b)                                 Payment after Business Day.  If any payment to be made by the Borrowers shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

 

(c)                                  Failure to Make Payment.  Unless the Borrower Agent or any Lender has notified the Administrative Agent, prior to the date any payment is required to be made by it to the Administrative Agent hereunder, that the Borrowers or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume that the Borrowers or such Lender, as the case may be, have or has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto.  If and to the extent that such payment was not in fact made to the Administrative Agent in immediately available funds, then:

 

(i)                                     if the Borrowers failed to make such payment, each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Lender in immediately available funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent in immediately available funds at the Federal Funds Rate from time to time in effect for amounts in US Dollars (and at the Administrative Agent’s cost of funds for amounts in Cdn. Dollars); and

 

(ii)                                  if any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Administrative Agent the amount thereof in immediately available funds, together with interest thereon for the period from the date such amount was made available by the Administrative Agent to the Borrowers to the date such amount is recovered by the Administrative Agent (the “Compensation Period”) at a rate per annum equal to the Federal Funds Rate from time to time in effect for amounts in US Dollars (and at the Administrative Agent’s cost of funds for amounts in Cdn. Dollars). If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in the applicable Borrowing.  If such Lender does not pay such amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent may make a demand therefor upon the Borrowers, and the Borrowers shall pay such amount to the Administrative Agent, together with interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable Borrowing.  Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights which the Administrative Agent or the Borrowers may have against any Lender as a result of any default by such Lender hereunder.

 

A notice of the Administrative Agent to any Lender or the Borrowers with respect to any amount owing under this subsection (c) shall be conclusive, absent manifest error.

 

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(d)                                 Return of Funds.  If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the applicable Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

 

(e)                                  Obligations of Lenders.  The obligations of the Lenders hereunder to make Loans and to fund participations in Letters of Credit are several and not joint.  The failure of any Lender to make any Loan or to fund any such participation on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or purchase its participation.

 

(f)                                   Manner of Obtaining Loans.  Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

 

2.12.                     Sharing of Payments.  If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Loans made by it, or the participations in L/C Obligations held by it, any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase from the other Lenders such participations in the Loans made by them and/or such subparticipations in the participations in L/C Obligations held by them, as the case may be, as shall be necessary to cause such purchasing Lender to share the excess payment in respect of such Loans or such participations, as the case may be, pro rata with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the purchasing Lender in its discretion), such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender’s ratable share (according to the proportion of (i) the amount of such paying Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered, without further interest thereon.  The Borrowers agree that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off, but subject to Section 10.08) with respect to such participation as fully as if such Lender were the direct creditor of the Borrowers in the amount of such participation.  The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section and will in each case notify the Lenders following any such purchases or repayments.  Each Lender that purchases a participation pursuant to this Section shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this 

 

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Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased.

 

2.13.                     Marshaling; Payments Set Aside.  None of the Administrative Agent or Lenders shall be under any obligation to marshal any assets in favor of any Loan Party or against any Obligations.  If any payment by or on behalf of Borrowers is made to the Administrative Agent, any L/C Issuer or any Lender, or the Administrative Agent, any L/C Issuer or any Lender exercises a right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, such L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other Person, then to the extent of such recovery, the Obligation originally intended to be satisfied, and all Liens, rights and remedies relating thereto, shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred.

 

2.14.                     Defaulting Lenders.

 

(a)                                 Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

 

(i)                                     Waivers and Amendments.  That Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Credit Agreement shall be restricted as set forth in Section 10.1.

 

(ii)                                  Reallocation of Payments.  Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 8.03 or otherwise, and including any amounts made available to the Administrative Agent by that Defaulting Lender pursuant to Section 10.8), shall be applied at such time or times as may be determined by the Administrative Agent as follows:  first, to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by that Defaulting Lender to the L/C Issuers hereunder; third, if so determined by the Administrative Agent or requested by any L/C Issuer, to be held as Cash Collateral for future funding obligations of that Defaulting Lender of any participation in any Letter of Credit; fourth, as the Borrowers may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Credit Agreement; fifth, if so determined by the Administrative Agent and the Borrowers, to be held in an interest bearing deposit account and released in order to satisfy obligations of that Defaulting Lender to fund Loans under this Agreement; sixth, to the payment of any amounts owing to the Lenders or the L/C Issuers as a result of any judgment of a court of competent jurisdiction obtained by any Lender or any L/C Issuer against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to 

 

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the payment of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by the Borrowers against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Borrowings in respect of which that Defaulting Lender has not fully funded it’s appropriate share and (y) such Loans or L/C Borrowings were made at a time when the conditions set forth in Section 4.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Borrowings owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Advances owed to, that Defaulting Lender.  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.14(a)(ii) shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.  Promptly (x) upon a Lender ceasing to be a Defaulting Lender in accordance with the terms of this Agreement or (y) following termination of this Agreement (including the termination of all Letters of Credit issued hereunder) and the payment of all amounts owed under this Agreement (other than unasserted contingent obligations which by their terms survive the termination of this Agreement), all amounts, if any, held in a deposit account pursuant to this Section 2.14(a) shall be returned to such Lender or Defaulting Lender, as applicable.

 

(iii)                               Certain Fees.  That Defaulting Lender (x) shall not be entitled to receive any Commitment Fee for any period during which that Lender is a Defaulting Lender (and the Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender) and (y) shall be limited in its right to receive Letter of Credit fees as provided in Section 2.03(i).

 

(iv)                              Reallocation of Applicable Percentages to Reduce Fronting Exposure.  During any period in which there is a Defaulting Lender, for purposes of computing the amount of the obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit pursuant to Section 2.03, the Pro Rata Share of each non-Defaulting Lender shall be computed without giving effect to the Commitment of that Defaulting Lender; provided, that, (i) each such reallocation shall be given effect only if, at the date the applicable Lender becomes a Defaulting Lender, no Default or Event of Default exists; and (ii) the aggregate obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit shall not exceed the positive difference, if any, of (1) the Commitment of that non-Defaulting Lender minus (2) the aggregate outstanding principal amount of the Loans of that Lender.

 

(b)                                 Defaulting Lender Cure.  If a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, as reasonably determined by the Borrowers, the Administrative Agent and each L/C Issuer, such Defaulting Lender 

 

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shall no longer be deemed to be a Defaulting Lender and the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit to be held on a pro rata basis by the Lenders in accordance with their Pro Rata Shares (without giving effect to Section 2.14(a)(iv)), whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender

 

2.15.                     Effect of Termination; Survival.  On the effective date of any termination of the entire Commitments, all Obligations (other than Bank Product Debt and Swap Obligations) shall be immediately due and payable, and any Lender may terminate its and its Affiliates’ Bank Products or Swap Contracts if expressly permitted to do so in the agreements relating to such Bank Products or such or Swap Contracts, as applicable.  All undertakings of the Borrowers contained in the Loan Documents shall survive any termination, and the Administrative Agent shall retain its Liens in the Collateral and all of its rights and remedies under the Loan Documents until Full Payment of the Obligations.  Sections 2.03, 3.01, 3.03, 3.04, 3.05 and 10.04, this Section, Articles III and IX, and the obligation of each Loan Party and Lender with respect to each indemnity given by it in any Loan Document, shall, in each case, survive termination of the Aggregate Commitments, Full Payment of the Obligations and any release relating to this credit facility.

 

2.16.                     Repayment of Loans.  The Borrowers shall repay to the Lenders on the Maturity Date the aggregate principal amount of Loans outstanding on such date.

 

ARTICLE III.
 TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01.                     Taxes.

 

(a)                                 Payments Free of Taxes.  Any and all payments by or on account of any obligation of the Borrowers hereunder or under any other Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable Law requires the deduction or withholding of any Tax from any such payment by the Borrowers, then the Borrowers shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrowers shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the 

 

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Administrative Agent, Lender or L/C Issuer, as the case may be, receives an amount equal to the sum it would have received had no such deduction or withholding been made.

 

(b)                                 Payment of Other Taxes by the Borrowers.  Without limiting the provisions of subsection (a) above, the Borrowers shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Law.

 

(c)                                  Indemnification by the Borrowers.  The Borrowers shall indemnify the Administrative Agent, each Lender and each L/C Issuer, within 10 days after demand therefor, for the full amount of any Indemnified Taxes with respect to this Agreement or any other Loan Document (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent, such Lender or such L/C Issuer, as the case may be, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrowers by a Lender or an L/C Issuer (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or an L/C Issuer, shall be conclusive absent manifest error.

 

(d)                                 Evidence of Payments.  As soon as practicable after any payment of Indemnified Taxes by the Borrowers to a Governmental Authority, the Borrower Agent shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(e)                                  Status of Lenders.

 

(i)                                     Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments hereunder or under any other Loan Document shall deliver to the Borrower Agent (with a copy to the Administrative Agent), at the time or times prescribed by applicable Law or reasonably requested by the Borrower Agent or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Law or reasonably requested by the Borrower Agent or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by the Borrower Agent or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower Agent or the Administrative Agent as will enable the Borrower Agent or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

 

(ii)                                  Without limiting the generality of the foregoing, in the event that a Borrower is resident for tax purposes in the United States, (A) any Lender that is a U.S. Person shall deliver to the Borrower Agent and the Administrative Agent on 

 

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or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Agent or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax; and (B) any Foreign Lender shall deliver to the Borrower Agent and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Borrower Agent or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

 

(A)                               executed originals of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,

 

(B)                               executed originals of Internal Revenue Service Form W-8ECI,

 

(C)                               in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (1) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the Canadian Borrower within the meaning of section 881(c)(3)(B) of the Code, or (3) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code (a “US Tax Compliance Certificate”) and (y) executed originals of Internal Revenue Service Form W-8BEN,

 

(D)                               to the extent a Foreign Lender is not the beneficial owner, executed originals of Internal Revenue Service Form W-8IMY, accompanied by Internal Revenue Service Form W-8ECI, Internal Revenue Service Form W-8BEN, a U.S. Tax Compliance Certificate, Internal Revenue Service Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner, or

 

(E)                                executed originals of any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower Agent to determine the withholding or deduction required to be made.

 

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(f)                                   FATCA.  If a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender fails to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrowers and the Administrative Agent at such time or times prescribed by applicable Law and at such time or times reasonably requested by the Borrowers or the Administrative Agent (i) a certification signed by the chief financial officer, principal accounting officer, treasurer or controller, and (ii) other documentation reasonably requested by the Borrowers and the Administrative Agent sufficient for the Administrative Agent and the Borrowers to comply with their obligations under FATCA and to determine that such Lender has complied with such applicable reporting requirements.

 

Each Lender shall provide new forms (or successor forms) upon the expiration or obsolescence of any previously delivered forms and to promptly notify the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction.  In addition, any Lender, if requested by the Borrowers or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrowers or the Administrative Agent as will enable the Borrowers or the Administrative Agent to determine whether such Lender is subject to backup or other withholding or other information reporting requirements.

 

(g)                                  Treatment of Certain Refunds.  If the Administrative Agent, any Lender or any L/C Issuer determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by a Borrower or with respect to which a Borrower has paid additional amounts pursuant to this Section, it shall pay to such Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by such Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent, such Lender or such L/C Issuer, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrowers, upon the request of the Administrative Agent, such Lender or such L/C Issuer, agree to repay the amount paid over to such  Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or such L/C Issuer in the event the Administrative Agent, such Lender or such L/C Issuer is required to repay such refund to such Governmental Authority.  The Administrative Agent, any Lender and any L/C Issuer shall use commercially reasonable efforts to obtain a refund of Indemnified Taxes to which, in its sole discretion, it determines it is entitled.  This subsection shall not be construed to require the Administrative Agent, any Lender or such L/C Issuer to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrowers or any other Person.

 

3.02.                     Illegality.  If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurocurrency Rate Loans or Bankers’ Acceptances, or 

 

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to determine or charge interest rates based upon the Eurocurrency Rate or Bankers’ Acceptances, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, US Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrowers through the Administrative Agent, any obligation of such Lender to make or continue Eurocurrency Rate Loans or Bankers’ Acceptances or to convert Base Rate Loans to Eurocurrency Rate Loans or Bankers’ Acceptances, as applicable shall be suspended until such Lender notifies the Administrative Agent and the Borrowers that the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, the Borrowers shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurocurrency Rate Loans of such Lender into US Base Rate Loans or US Prime Rate Loans, as applicable, and convert all Bankers’ Acceptances (or BA Equivalent Notes) of such Lender into Cdn. Prime Rate Loans, as applicable, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurocurrency Rate Loans or Bankers’ Acceptances to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurocurrency Rate Loans or Bankers’ Acceptances.  Upon any such prepayment or conversion, the Borrowers shall also pay accrued interest, if any, on the amount so prepaid or converted.

 

3.03.                     Inability to Determine Rates.  If the Required Lenders determine that for any reason in connection with any request for a Eurocurrency Rate Loan or a Bankers’ Acceptance (or BA Equivalent Note), as applicable, or a conversion to or continuation thereof that (a) US Dollar deposits are not being offered to banks in the London interbank Eurodollar market for the applicable amount and Interest Period of such Eurocurrency Rate Loan or a Bankers’ Acceptance (or BA Equivalent Note), as applicable, (b) adequate and reasonable means do not exist for determining the Eurocurrency LIBOR Rate or BA Discount Rate, as applicable, for any requested Interest Period with respect to a proposed Eurocurrency Rate Loan or a Bankers’ Acceptance (or BA Equivalent Note), as applicable, or (c) the Eurocurrency LIBOR Rate or BA Discount Rate, as applicable, for any requested Interest Period with respect to a proposed Eurocurrency Rate Loan or a Bankers’ Acceptance (or BA Equivalent Note), as applicable, does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Borrowers and each Lender.  Thereafter, the obligation of the Lenders to make or maintain Eurocurrency Rate Loans or a Bankers’ Acceptance (or BA Equivalent Note), as applicable, shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice.  Upon receipt of such notice, the Borrowers may revoke any pending request for a Borrowing of, conversion to or continuation of Eurocurrency Rate Loans or a Bankers’ Acceptance (or BA Equivalent Note), as applicable, or, failing that, will be deemed to have converted such request into a request for a Borrowing of (a) US Base Rate Loans to the Canadian Borrower or US Prime Rate Loans to the US Borrowers, as applicable, in the amount specified therein with respect to Eurocurrency Rate Loans, or (b) Cdn. Prime Rate Loans in the amount specified therein with respect to Bankers’ Acceptances (or BA Equivalent Notes).

 

3.04.                     Increased Costs.

 

(a)                                 Increased Costs Generally.  If any Change in Law shall:

 

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(i)                                     impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Eurocurrency Rate) or the any L/C Issuer;

 

(ii)                                  subject any Lender or any L/C Issuer to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any Eurocurrency Rate Loan or Bankers’ Acceptance made by it, or change the basis of taxation of payments to such Lender or such L/C Issuer in respect thereof (except for Indemnified Taxes and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or such L/C Issuer); or

 

(iii)                               impose on any Lender or any L/C Issuer or the London interbank market any other condition, cost or expense affecting this Agreement or Eurocurrency Rate Loans made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such Lender of making, continuing, converting to, or maintaining any Eurocurrency Rate Loan or Bankers’ Acceptance (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or such L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or such L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or such L/C Issuer, the Borrowers will pay to such Lender or such L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or such L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered.

 

(b)                                 Capital Requirements.  If any Lender or any L/C Issuer determines that any Change in Law affecting such Lender or such L/C Issuer or any Lending Office of such Lender or such Lender’s or such L/C Issuer’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or such L/C Issuer’s capital or on the capital of such Lender’s or such L/C Issuer’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by such L/C Issuer, to a level below that which such Lender or such L/C Issuer or such Lender’s or such L/C Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such L/C Issuer’s policies and the policies of such Lender’s or such L/C Issuer’s holding company with respect to capital adequacy), then from time to time the Borrowers will pay to such Lender or such L/C Issuer, as the case may be, such additional amount or 

 

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amounts as will compensate such Lender or such L/C Issuer or such Lender’s or such L/C Issuer’s holding company for any such reduction suffered.

 

(c)                                  Certificates for Reimbursement.  A certificate of a Lender or an L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or such L/C Issuer or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrowers shall be conclusive absent manifest error.  The Borrowers shall pay such Lender or such L/C Issuer, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.

 

(d)                                 Delay in Requests.  Failure or delay on the part of any Lender or any L/C Issuer to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s or such L/C Issuer’s right to demand such compensation, provided that the Borrowers shall not be required to compensate a Lender or such L/C Issuer pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than six months prior to the date that such Lender or such L/C Issuer, as the case may be, notifies the Borrowers of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such L/C Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof).

 

3.05.                     Compensation for Losses.  Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrowers shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

 

(a)                                 any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

 

(b)                                 any failure by the Borrowers (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower Agent;

 

(c)                                  any failure by any Borrower to make payment of any Loan or drawing under any Letter of Credit (or interest due thereon) denominated in Cdn. Dollars on its scheduled due date or any payment thereof in a different currency; or

 

(d)                                 any assignment of a Eurocurrency Rate Loan or Bankers’ Acceptance (or BA Equivalent Note) on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower Agent pursuant to Section 10.14;

 

including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained.  The Borrowers shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.

 

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For purposes of calculating amounts payable by the Borrowers to the Lenders under this Section 3.05 with respect to Eurocurrency Rate Loans, each Lender shall be deemed to have funded each Eurocurrency Rate Loan made by it at the Eurocurrency LIBOR Rate used in determining the Eurocurrency Rate for such Loan by a matching deposit or other borrowing in the London interbank Eurodollar market for a comparable amount and for a comparable period, whether or not such Eurocurrency Rate Loan was in fact so funded.

 

3.06.                     Mitigation Obligations.  If any Lender requests compensation under Section 3.04, or the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

3.07.                     Circumstances Affecting Cdn. Dollar Availability.  In connection with any request for a Cdn. Dollar Loan or Cdn. Dollar Letter of Credit (collectively, the “Cdn. Dollar Extensions”) or a continuation or extension thereof, if (a) for any reason a fundamental change has occurred in the foreign exchange or interbank markets with respect to the Cdn. Dollar (including, without limitation, changes in national or international financial, political or economic conditions or currency exchange rates or exchange controls), (b) the introduction of, or any change in, any Law 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 any of Lenders (or any of their applicable lending office) 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 any of Lenders (or any of their applicable lending office) to honor its obligations to make or maintain any Cdn. Dollar Extensions or (c) the Lenders are otherwise unable to make a Cdn. Dollar Extension, as a result of a material disruption to the international currency markets, then the Administrative Agent shall promptly give notice thereof to the Borrower Agent and the other Lenders.  Thereafter, until the Administrative Agent notifies the Borrower Agent that such circumstances no longer exist, the obligation of Lenders to make Cdn. Dollar Extensions or any continuation or extension thereof, as applicable, shall be suspended and the Borrowers shall either (i) repay in full (or cause to be repaid in full) the then outstanding principal amount of such Cdn. Dollar Loans, together with accrued interest thereon, on the last day of the then current Interest Period applicable to such Cdn. Dollar Loans or (ii) convert the then outstanding principal amount of each such Cdn. Dollar Loans to a Eurocurrency Rate Loan denominated in US Dollars or a US Base Rate Loan with respect to the Canadian Borrower or a US Prime Rate Loan with respect to the US Borrowers, as applicable, as of the last day of such Interest Period; provided that if the Borrower Agent elects to make such conversion, the Borrowers shall pay to the Administrative Agent and Lenders any and all costs, fees and other expenses, if any, incurred by the Administrative Agent and Lenders in effecting such conversion.

 

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ARTICLE IV.
 CONDITIONS PRECEDENT

 

4.01.                     Conditions to Closing.  This Agreement shall become effective upon, and the obligation of each Lender to make or continue any Credit Extensions (including the continuation under this Agreement of all “Credit Extensions” as defined under the Existing Credit Agreement) the latter of (i) the Closing Date and (ii) the satisfaction of the following conditions precedent:

 

(a)                                 the Administrative Agent shall have received counterparts of this Agreement and the Notes executed by the Administrative Agent, the Lenders and the Borrowers;

 

(b)                                 the Administrative Agent shall have received counterparts of (i) a Reaffirmation of Loan Documents executed by each of the applicable Guarantors and Loan Parties, reaffirming all of the obligations of the Loan Parties under each of the Loan Documents to which they are a party on the Closing Date, and (ii) control agreements from each of the U.S. Borrowers, APH and Atlantic Power Services, LLC, each in form and substance reasonably satisfactory to the Administrative Agent with respect to the requirements under Section 6.16;

 

(c)                                  the Administrative Agent shall have received copies of all filings or recordations necessary to perfect its Liens in the Collateral (except in connection with Real Estate), as well as UCC and Lien searches and other evidence satisfactory to the Administrative Agent that such Liens are the only Liens upon the Collateral, except Permitted Liens;

 

(d)                                 the Administrative Agent shall have received Officer’s Certificates, reasonably satisfactory to it, from a Responsible Officer of the Borrower Agent on behalf of the Borrowers certifying that, after giving effect to this Agreement and the transactions hereunder, (i) such Borrower is Solvent; (ii) no Default or Event of Default exists; and (iii) the representations and warranties set forth in Article V hereof are true and correct in all material respects on and as of the Closing Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date; provided, however, that any representation or warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects;

 

(e)                                  the Administrative Agent shall have received an Officer’s Certificate certified by a Responsible Officer of each Loan Party certifying, inter alia, (1) true and correct copies of resolutions adopted by the board of directors, board of managers or other appropriate body of such Loan Party (A) authorizing the execution, delivery and performance by such Loan Party of the Loan Documents to which it is or will be a party and the consummation of the transactions contemplated thereby, (B) authorizing the Responsible Officer of such Loan Party to negotiate the Loan Documents to which it is or will be a party on behalf of such Loan Party, and (C) authorizing the Responsible Officer of such Loan Party to execute and deliver the Loan Documents and any related 

 

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documents, including, without limitation, any Collateral Document or other guaranty, pledge agreement, security agreement or other document contemplated by this Agreement; (2) the incumbency and, if such Responsible Officer is an individual, specimen signatures of the Responsible Officer of the Loan Parties executing any Loan Documents to which it is a party, upon which Officer’s Certificate the Collateral Agent, the Administrative Agent and the Secured Parties shall be entitled to rely until informed of any change in writing by the applicable Loan Party; and (3) such evidence as the Administrative Agent may reasonably require to verify that the Loan Parties are each duly organized or formed, validly existing and in good standing, including any required approvals of any applicable Government Authority, certified copies of such Loan Party’s Organization Documents, certificates of organization and/or good standing;

 

(f)                                   the Administrative Agent shall have received an Officer’s Certificate certified by a Responsible Officer of the Canadian Borrower (on behalf of the Borrowers) attaching and certifying as true and correct an organizational diagram satisfactory to the Lenders of the Borrowers and each of their Subsidiaries;

 

(g)                                  the Administrative Agent shall have received written opinions of Goodmans, LLP, Canadian counsel to the Borrowers and Cleary, Gottlieb, Steen & Hamilton, LLP, U.S. counsel to the Borrowers, and such other counsel of the Borrowers as may be reasonably necessary, in each case, reasonably satisfactory to the Administrative Agent and including, without limitation, non-contravention of the 2011 Notes, the Convertible Notes Indentures, and the CPILP Notes, in each case, with respect to the execution and delivery of this Agreement;

 

(h)                                 after giving effect to this Agreement, since December 31, 2012, no Material Adverse Effect shall have occurred, in the opinion of the Administrative Agent or the Arranger, in the business, assets, properties, liabilities, operations or condition of the Borrowers and their Subsidiaries;

 

(i)                                     the Borrowers shall certify (pursuant to an Officer’s Certificate of the Borrower Agent on behalf of the Borrowers) that no action, suit, investigation, litigation or proceeding pending or threatened in any court or before any arbitrator or governmental instrumentality that involve any Loan Document and that could reasonably be expected to, individually or in the aggregate, result in a Material Adverse Effect;

 

(j)                                    the Administrative Agent and the Arranger shall have received all financial statements and reports required under Section 6.01 of the Existing Credit Agreement which demonstrate, in the Administrative Agent’s and the Lenders’ reasonable judgment, together with all other information then available to the Administrative Agent and Lenders, that the Borrowers can repay their debts and satisfy their other obligations as and when they become due, and can comply with the requirements set forth in Section 7.11;

 

(k)                                 the Administrative Agent shall have received satisfactory evidence (including pursuant to an Officer’s Certificate of the Borrower Agent on behalf of the Borrowers) that the Borrowers have received all governmental, regulatory and third party 

 

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consents (including any applicable consents from the holders of the CPILP Notes) and approvals as may be appropriate in connection with this Agreement and the transactions contemplated hereby, as may be reasonably requested by the Administrative Agent and its counsel in writing prior to the Closing Date;

 

(l)                                     the Borrowers shall have executed and delivered the Fee Letter and shall have paid all fees and expenses to be paid to the Secured Parties in connection with the Fee Letter, the Credit Agreement and the other Loan Documents to the extent due; and

 

(m)                             each Lender, to the extent requested at least five days prior to the Closing Date, shall have received all applicable “know your client” and other related information requested in writing by such Lender prior to the Closing Date.

 

Promptly after delivery by the Borrowers of the Notes pursuant to Section 4.01(a), the Administrative Agent shall return to the Borrower Agent all “Notes” (as defined in the Existing Credit Agreement) that were executed and delivered to each Lender, which “Notes” shall be marked “cancelled.”

 

4.02.                     Conditions to all Credit Extensions.  The obligation of each Lender to honor any Request for Credit Extension is subject to the following conditions precedent:

 

(a)                                 The representations and warranties of the Borrowers and each other Loan Party contained in Article V or any other Loan Document, shall be true and correct in all material respects on and as of the date of such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date; provided, however, that any representation or warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects, and except that for purposes of this Section 4.02, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01.

 

(b)                                 No Default or Event of Default shall exist, or would result from such proposed Credit Extension.

 

(c)                                  Since the Closing Date no event or events shall have occurred which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

(d)                                 The Administrative Agent and, if applicable, an L/C Issuer shall have received a Request for Credit Extension in accordance with the requirements hereof.

 

Each Request for Credit Extension submitted by the Borrower Agent shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.

 

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ARTICLE V.
 REPRESENTATIONS AND WARRANTIES

 

Each of the Borrowers represent and warrant to the Administrative Agent and the Lenders that:

 

5.01.                     Existence, Qualification and Power; Compliance with Laws.  Each Loan Party and each Subsidiary (a) is a corporation, partnership or limited liability company duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license, and (d) is in compliance with all Laws; except in each case referred to in clause (b)(i), (c) or (d), to the extent that failure to do so could not reasonably be expected to result in a Material Adverse Effect.

 

5.02.                     Authorization; No Contravention.  The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is party, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, (i) any of the 2011 Note Documents, the Convertible Indentures or the Convertible Debentures, or the CPILP Note Documents, (ii) any other Contractual Obligation to which such Person is a party, except as such, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect or (iii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its Property is subject, except as such, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; or (c) violate any Law, except as such, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

5.03.                     Governmental Authorization; Other Consents.  No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person or entity (including, without limitation, any creditor or equity holder of any Borrower or any Guarantor) (other than those already obtained with respect to any of the 2011 Note Documents, the Convertible Indentures or the Convertible Debentures, or the CPILP Note Documents or otherwise, to the extent already obtained or the absence of which could not reasonably be expected to result in a Material Adverse Effect) is necessary or required to be obtained or made by any Loan Party as a condition to the execution, delivery or performance by, or enforcement against, any Loan Party of any Loan Document.

 

5.04.                     Binding Effect.  This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is a party thereto.  This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is a party thereto in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability 

 

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relating to or affecting creditors’ rights and to general equity principles.  Upon making the initial Credit Extensions and recording the necessary Collateral Documents, the Liens created by the Collateral Documents will be Acceptable Security Interests, constituting valid and perfected first and prior Liens on any Property described therein subject to no other Liens other than Permitted Liens.

 

5.05.                     Financial Statements; No Material Adverse Effect.

 

(a)                                 The Audited Financial Statements (i) were prepared in accordance with U.S. GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present the financial condition of each of the Canadian Borrower and its consolidated Subsidiaries as of the date thereof and their results of operations for the period covered thereby on a pro forma basis in accordance with U.S. GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) reflect all material Indebtedness and other liabilities, direct or contingent, of each of the Canadian Borrower and its consolidated Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness on a pro forma basis in accordance with U.S. GAAP consistently applied throughout the period covered thereby.

 

(b)                                 Since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to result in a Material Adverse Effect.

 

5.06.                     Litigation.  Except as specifically disclosed in Schedule 5.06, there are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of any the Borrowers after reasonable investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against any Loan Party or any Subsidiary of a Borrower or against any of their Properties that (A) purport to adversely affect any Loan Document or enjoin any of the transactions contemplated hereby, or (B) if determined adversely, could reasonably be expected to result in a Material Adverse Effect.  As of the Closing Date, the Borrower Agent has provided the Administrative Agent with copies of all material documents filed in connection with the alleged shareholder claims related to the reduction of the payment of the Canadian Borrower’s regular dividend.

 

5.07.                     No Default.  No Default or Event of Default has occurred and is continuing.  No Borrower or Subsidiary is in default, and no event or circumstance has occurred or exists that with the passage of time or giving of notice would constitute a default, under or with respect to any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

5.08.                     Ownership of Property.  Each Loan Party has good and marketable title to (or valid leasehold interests in) all of its material Real Estate (except for defects in title that do not materially interfere with its ability to conduct its business as currently conducted or to utilize such Real Estate for its intended purposes), and good and marketable title to all of its personal Property, including all property reflected in any financial statements delivered to Administrative Agent or Lenders.  All such Properties are free and clear of Liens, other than Permitted Liens.

 

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5.09.                     Environmental Compliance.  (i) To the best knowledge of each of the Borrowers, (ii) to the best knowledge of the other Loan Parties, and (iii) based on a review conducted by the Loan Parties prior to the Closing Date of the effect of the then existing Environmental Laws and any claims alleging potential liability or responsibility for violation of any Environmental Law on their respective businesses, operations and properties, except as specifically disclosed in Schedule 5.09, the Loan Parties have concluded that:  (a) with respect to the Property of any Loan Party or the operations conducted thereon, the Loan Parties are in compliance with all applicable Environmental Laws, except to the extent that any non-compliance could not reasonably be expected to result in a Material Adverse Effect; (b) the Loan Parties are not subject to any judicial, administrative, government, regulatory or arbitration proceeding alleging the violation of any applicable Environmental Laws or to the best of their knowledge that may lead to claim for cleanup costs, contribution, remedial work, reclamation, conservation, natural resources damages or personal injury or to the issuance of a stop-work order, suspension order, control order, prevention order or clean-up order, except to the extent that any such proceeding could not reasonably be expected to result in a Material Adverse Effect; (c) the Loan Parties are not subject to any federal, provincial, state, local or foreign review, audit or investigation which may lead to a proceeding referred to in (b) above; (d) the Loan Parties have no knowledge that any of their predecessors in title to any of their Property and assets are the subject of any currently pending federal, state, provincial, local or foreign review, audit or investigation which may lead to a proceeding referred to in (b) above; (e) the Loan Parties have not filed any notice under any applicable Environmental Laws indicating past or present treatment, storage or disposal of, or reporting a release of Hazardous Materials into the environment where the circumstances surrounding such notice could reasonably be expected to result in a Material Adverse Effect; and (f) the Loan Parties possess, and are in compliance with, all approvals, licenses, permits, consents and other authorizations which are necessary under any applicable Environmental Laws to conduct their business, except to the extent that the failure to possess, or be in compliance with, such authorizations could not reasonably be expected to result in a Material Adverse Effect.

 

5.10.                     Insurance.  As of the Closing Date, the properties of the Borrowers and their respective Subsidiaries are insured with financially sound and reputable insurance companies (with a Best Rating of at least A7, unless otherwise approved by the Administrative Agent), that are not Affiliates of the Borrowers, in such amounts, with such deductibles and covering such risks as are reasonable and customarily carried by companies engaged in a Similar Businesses and owning similar properties in localities where the Borrowers or their respective Subsidiaries operate.

 

5.11.                     Taxes.  The Borrowers and their Subsidiaries have filed all federal, and all material provincial, state and other material, tax returns and reports required to be filed, and have paid all federal and material state, provincial and other material taxes, assessments, fees and other governmental charges levied or imposed upon any of the Borrowers or any Subsidiary of any Borrower or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP; provided that the foregoing representation and warranty with respect to CPILP and its Subsidiaries is made to the knowledge of the Borrowers and the Loan Parties with respect to the period prior to the Initial Closing Date.  

 

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There is no proposed tax assessment against any of the Borrowers or any Subsidiary of any Borrower that would, if made, result in a Material Adverse Effect.

 

5.12.                     ERISA Compliance.

 

(a)                                 Except as could not reasonably be expected to result in a Material Adverse Effect, each Pension Plan is in compliance with the applicable provisions of ERISA, the Code and other federal or state Laws.  Each Pension Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the knowledge of each of the Borrowers, nothing has occurred which would prevent, or cause the loss of, such qualification under circumstances as could reasonably be expected to result in a Material Adverse Effect.  Except as could not reasonably be expected to result in a Material Adverse Effect, the US Borrowers and each ERISA Affiliate of the US Borrowers have made all required contributions to each Pension Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Pension Plan.

 

(b)                                 There are no pending or, to the knowledge of any of the Borrowers, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Pension Plan that could be reasonably be expected to result in a Material Adverse Effect.  There has been no non-exempt prohibited transaction or violation of the fiduciary responsibility rules with respect to any Pension Plan that has resulted or could be reasonably expected to result in a Material Adverse Effect.

 

(c)                                  (i) No ERISA Event has occurred or is reasonably expected to occur other than as could not reasonably be expected to result in a Material Adverse Effect; (ii) no Pension Plan has any Unfunded Pension Liability in such amount as could reasonably be expected to result in a Material Adverse Effect; (iii) neither US Borrower nor any ERISA Affiliate of the US Borrowers has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA) in such amount as could reasonably be expected to result in a Material Adverse Effect; (iv) neither US Borrower nor any ERISA Affiliate of the US Borrowers has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would reasonably be expected to result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan in such amount as could reasonably be expected to result in a Material Adverse Effect; and (v) neither US Borrower nor any ERISA Affiliate of the US Borrowers has engaged in a transaction that could reasonably be expected to be subject to Sections 4069 or 4212(c) of ERISA.

 

(d)                                 With respect to any Foreign Plan, (i) all employer and employee contributions required by law or by the terms of the Foreign Plan have been made, or, if applicable, accrued, in accordance with normal accounting practices except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect; and (ii) it has been registered as required by Law and has been maintained in good 

 

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standing with applicable regulatory Governmental Authorities except where failure to do so could not reasonably be expected to result in a Material Adverse Effect.

 

5.13.                     Subsidiaries.

 

(a)                                 As of the Closing Date, the Canadian Borrower has no Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13.  All outstanding shares of stock of each class of each Subsidiary of the Borrowers have been and will be validly issued and are and, except as expressly permitted hereby, will be fully paid and nonassessable and are and will be owned, beneficially and of record, free and clear of any Liens (other than Permitted Liens) by a Borrower or a Subsidiary of a Borrower to the extent set forth in the organizational diagram of the Borrowers set forth in Part (d) of Schedule 5.13.

 

(b)                                 As of the Closing Date, Schedule 1.01(c) sets forth each of the Loan Parties that shall have delivered a Guaranty on or prior to the Closing Date.

 

(c)                                  As of the Closing Date, the Borrowers have no equity interests and do not own any Capital Stock in any other corporation, partnership, limited liability company, or entity other than those specifically disclosed in Part (c) of Schedule 5.13.

 

(d)                                 Part (d) of Schedule 5.13 sets forth, as of the Closing Date, an organizational diagram of the Borrowers and each of their Subsidiaries.

 

(e)                                  As of the Closing Date, other than the CP Entities, Atlantic Auburndale, LLC, Auburndale GP, LLC, Auburndale LP, LLC, Dade Investment LP, Lake Investment LP, NCP Dade Power, LLC, NCP Gem, LLC, NCP Lake Power, LLC, NCP Pasco, LLC, Teton New Lake LLC, AP Onondaga, LLC and Onondaga Renewables LLC, each of the Wholly-Owned Non-Loan Party Subsidiaries that is not party to a Pledge Agreement or a Guaranty, or whose Capital Stock or other equity interests have not been pledged pursuant to a Pledge Agreement, is prohibited under applicable Law, regulation or contractual provision from (i) Guaranteeing the Obligations, (ii) granting a pledge in the Capital Stock or other equity interests of its Subsidiaries as collateral security for the Obligations, or (iii) having its Capital Stock or other equity interests pledged as collateral security for the Obligations.

 

5.14.                     Margin Regulations; Investment Company Act.

 

(a)                                 No Borrower and no Subsidiary of a Borrower is engaged, principally or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any margin stock.  No Loan proceeds or Letters of Credit will be used by Borrowers to purchase or carry, or to reduce or refinance any Indebtedness Incurred to purchase or carry, any margin stock or for any related purpose governed by Regulations T, U or X of the Board of Governors.

 

(b)                                 None of the Borrowers, any Person Controlling the Borrowers, or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

 

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5.15.                     Disclosure.  No statement, information, report, representation, or warranty (other than projections) made by any Loan Party in any Loan Document or in the CPILP Note Agreements when so made (or if dated or otherwise specified therein, as of such date), or furnished to the Administrative Agent, the L/C Issuers or any Lender by or at the direction of any Loan Party in connection with any Loan Document, when so furnished (or if dated or otherwise specified therein, as of such date) taken as a whole, contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements therein not materially misleading in light of the circumstances under which such statements are made, after giving effect to all supplements and updates thereto.  There is no fact known to the Borrowers or any Loan Party which has caused, or which likely would in the future in the reasonable judgment of the Borrowers or such Loan Party cause, a Material Adverse Effect (except for any economic conditions which affect generally the industry in which the Borrowers and their Subsidiaries conduct business), that has not been set forth in this Agreement or in the other documents, certificates, statements, reports and other information furnished in writing to the Lenders by or on behalf of the Borrowers or any other Loan Party in connection with the transactions contemplated hereby.

 

5.16.                     Intellectual Property; Licenses, Etc.  The Borrowers and their Subsidiaries own, or possess the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other rights that are reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person, except where the failure to so own or possess, or such conflict, could not reasonably be expected to result in a Material Adverse Effect.  To the knowledge of the Borrowers, no slogan or other advertising device, product, process, method, substance, part or other material now employed, by any of the Borrowers or any Subsidiary infringes upon any rights held by any other Person, except for any such infringement that could not reasonably be expected to result in a Material Adverse Effect.  No claim or litigation regarding any of the foregoing is pending or, to the best knowledge of any Borrower, threatened, which, in any case described in this Section 5.16, could reasonably be expected to result in a Material Adverse Effect.

 

5.17.                     Direct Benefit.  The initial Loans and Letters of Credit hereunder and all additional Loans and Letters of Credit hereunder are for the direct benefit of the Borrowers or one or more of the Guarantors.  The Borrowers and the Guarantors are engaged as an integrated group in the business of energy production and distribution and related fields, and any benefits to any of the Borrowers or any Guarantor is a benefit to all of them, both directly or indirectly, inasmuch as the successful operation and condition of each of the Borrowers and the Guarantors is dependent upon the continued successful performance of the functions of the integrated group as a whole.

 

5.18.                     Solvency.  Each Borrower and each individual Guarantor and the Loan Parties on a consolidated basis are Solvent.

 

5.19.                     CPILP Note Agreements and Convertible Note Documents.  Before and after giving effect to the initial Credit Extension contemplated hereunder, there is no event of default or event or condition that could become an event of default with notice or lapse of time or both, under the Convertible Note Indentures (and any legally binding documents related thereto), each of the CPILP Note Agreements (and any other legally binding documents related thereto) or the 

 

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2011 Note Documents (and any other legally binding documents related thereto). On the Closing Date, the Convertible Note Indentures, the Convertible Debentures, each of the CPILP Note Agreements, the CPILP Notes, 2011 Note Documents and any other legally binding documents executed by the Loan Parties in connection with any thereof, are each in full force and effect.

 

5.20.                     Labor Relations.  No Borrower nor any Subsidiary is engaged in any unfair labor practice that could reasonably be expected to result in a Material Adverse Effect. There is (i) no unfair labor practice complaint pending against any Borrower or any Subsidiary or threatened against any of them, before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against any Borrower or any Subsidiary or, to the best of each Borrower’s knowledge, threatened against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against any Borrower or any Subsidiary or, to each Borrower’s knowledge, threatened in writing against any Borrower or any Subsidiary and (iii) no union representation petition existing with respect to the employees of any Borrower or any Subsidiary and no union organizing activities are taking place, except with respect to any matter specified in clause (i), (ii) or (iii) above, either individually or in the aggregate, such as could not reasonably be expected to result in a Material Adverse Effect.

 

5.21.                     Undisclosed Liabilities; Absence of Burdensome Obligations.  No Loan Party granting or subject to a Lien to the Administrative Agent for the benefit of the Secured Parties (i) is party to any material agreement or arrangement, or subject to any order, judgment, writ or decree, which either restricts or purports to restrict its ability to grant Liens to the Administrative Agent for the benefit of the Secured Parties on or in respect of their Properties to secure the Indebtedness and the Collateral Documents, except as otherwise provided in Section 7.09 or (ii) has any material Indebtedness, contingent liabilities, off balance sheet liabilities, liabilities for taxes, long term commitments or unrealized or anticipated losses from any unfavorable commitments, except as reflected in the financial statements referred to in Section 5.05.

 

5.22.                     Validity and Priority of Security Interest.  The provisions of this Agreement, the Pledge Agreements, and, if applicable, any Security Agreements, Mortgages (if any) and/or the other Collateral Documents create legal and valid Liens on all the Collateral in favor of the Administrative Agent and/or Collateral Agent, as applicable, for the benefit of the Secured Parties, and, if applicable, such Liens constitute (or will constitute, if applicable, upon the Collateral Agent’s or the Administrative Agent’s duly filing or recording, as applicable, of the Mortgages (if any) and any required financing statements, as applicable, and taking possession or control (including possession of any certificate of title) of Collateral that may be perfected only by possession or control) perfected Liens on the Collateral, securing the Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on such Collateral except for Permitted Liens.

 

ARTICLE VI.
 AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, each of the Borrowers shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02 and 6.03) cause each Loan Party and each Subsidiary to:

 

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6.01.                     Financial Statements.  Deliver to the Administrative Agent for prompt further distribution to each Secured Party, in form and detail reasonably satisfactory to the Administrative Agent:

 

(a)                                 as soon as available, but in any event, within 90 days after the end of the fiscal year of the Canadian Borrower, an audited consolidated balance sheet of the Canadian Borrower and its consolidated Subsidiaries, as at the end of such fiscal year, and the related consolidated statements of income and cash flows for such fiscal year, setting forth in comparative form the figures for the previous fiscal year, all in reasonable detail, as audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing selected by the Canadian Borrower, which report and opinion shall be prepared in accordance with U.S. GAAP and which opinion shall be without any qualification or exception as to the scope of such audit;

 

(b)                                 as soon as available, but in any event, within 45 days after the end of each of the fiscal quarter of each fiscal year of the Canadian Borrower a consolidated balance sheet of the Canadian Borrower and its consolidated Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income and cash flows for such fiscal quarter and for the portion of the Canadian Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous applicable fiscal year and the corresponding portion of the previous applicable fiscal year, all in reasonable detail and certified by a Responsible Officer of the Canadian Borrower as fairly presenting the financial condition, results of operations and cash flows of the Canadian Borrower and its consolidated Subsidiaries in accordance with U.S. GAAP, subject only to normal year-end audit adjustments and the absence of footnote; and

 

(c)                                  at least 60 days after the commencement of each fiscal year of the Canadian Borrower, a detailed consolidated annual budget for such fiscal year (the “Annual Budget”) in the same form as approved by the board of directors of the Canadian Borrower.

 

As to any information contained in materials furnished pursuant to Section 6.02(c), the Borrowers shall not be separately required to furnish such information under clause (a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrowers to furnish the information and materials described in subsections (a) and (b) above at the times specified therein.  Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(c) (to the extent any such documents are filed with the SEC or the Canadian equivalent thereof) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which the Canadian Borrower has provided notice to the Administrative Agent that such documents are posted on the publicly available website of the SEC or the Canadian equivalent thereof.

 

6.02.                     Certificates; Other Information.  Deliver to the Administrative Agent for prompt further distribution to each Secured Party, in form and detail satisfactory to the Administrative Agent and the Required Lenders;

 

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(a)                                 concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by Responsible Officers of the Canadian Borrower;

 

(b)                                 promptly after any request by the Administrative Agent, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Canadian Borrower by independent accountants in connection with the accounts or books of the Canadian Borrower or any Subsidiary, or any audit of any of them;

 

(c)                                  promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the shareholders of the Canadian Borrower, and copies of all annual, regular, periodic and special reports and registration statements (if any) which the Canadian Borrower or any US Borrower or CPILP has filed with the Securities and Exchange Commission under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative Agent pursuant hereto, in each case, (i) which are not confidential in nature, as permitted by applicable Laws, as required by contractual restrictions not entered into in contemplation of this Section 6.02(c), as permitted by recognized principles of privilege or as otherwise determined in good faith by the Canadian Borrower, and (ii) which are not publicly available on the United States Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval System (or “EDGAR”), the Canadian Securities Administrators System for Electronic Document Analysis and Retrieval ( or “SEDAR”) or other similar publicly accessible sources of which the Canadian Borrower provides written notice to Administrative Agent and the Lenders; and

 

(d)                                 promptly, such additional information regarding the business, financial or organizational affairs of the Canadian Borrower or the US Borrowers or any Subsidiary as the Administrative Agent, at the request of any Lender, may from time to time reasonably request.

 

The Borrowers hereby acknowledge that (a) the Administrative Agent and/or the Arrangers will make available to the Lenders and the L/C Issuers materials and/or information provided by or on behalf of the Borrowers hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Canadian Borrower or its securities) (each, a “Public Lender”).  The Borrowers hereby agree that (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrowers shall be deemed to have authorized the Administrative Agent, the Arrangers, the L/C Issuers and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Canadian Borrower or its securities for purposes of United States Federal Securities Laws and state securities Laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 

 

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10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) the Administrative Agent and the Arrangers shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.”  Notwithstanding the foregoing, the Borrowers shall be under no obligation to mark any Borrower Materials “PUBLIC.”

 

6.03.                     Notices.  Promptly upon any Responsible Officer having knowledge thereof, notify the Administrative Agent and each Lender:

 

(a)                                 of the occurrence of any Default or Event of Default;

 

(b)                                 of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including without limitation (i) breach or non-performance of, or any default under, a Contractual Obligation of the Canadian Borrower or any Loan Party or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding or suspension between the Canadian Borrower or any Subsidiary and any Governmental Authority or any other litigation, investigation or proceeding affecting any Loan Party; (iii) of the occurrence of any ERISA Event; (iv) of any pending or threatened labor dispute, strike or walkout, or the expiration of any material labor contract, or (v) the commencement of, or any material development in, any litigation or proceeding affecting the Canadian Borrower or any Loan Party or any Subsidiary, including pursuant to any applicable Environmental Laws;

 

(c)                                  the discharge of or any withdrawal or resignation by Borrowers’ independent accountants; and

 

(d)                                 of any announcement by Moody’s or S&P of any change in a debt rating or of any change to the stability rating of the Canadian Borrower.

 

Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of the Canadian Borrower setting forth details of the occurrence referred to therein and stating what action the relevant Loan Party or Subsidiary has taken and proposes to take with respect thereto.  Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement or other Loan Document that have been breached.

 

6.04.                     Payment of Obligations.  Pay and discharge as the same shall become due and payable, all its obligations and liabilities, that if not paid could reasonably be expected to result in a Material Adverse Effect, including:  (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings and adequate reserves in accordance with U.S. GAAP are being maintained by the relevant Loan Party or such Subsidiary; (b) all material lawful claims which, if unpaid, would by law become a Lien upon its Property; and (c) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness.

 

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6.05.                     Preservation of Existence, Etc..  Except in a transaction permitted by Section 7.02(b) or Section 7.05 or pursuant to statutory conversions to another form of entity as permitted by applicable Law, preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization; and except where it will not result in a Material Adverse Effect, take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business and preserve or renew all of its registered patents, trademarks, trade names and service marks, except where Borrowers determine, in their reasonable business judgment, that such Intellectual Property is no longer desirable to maintain.

 

6.06.                     Maintenance of Properties.  Except where it could not be reasonably expected to result in a Material Adverse Effect, (a) maintain, preserve and protect all of its material Properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted, (b) make all necessary repairs thereto and renewals and replacements thereof and (c) use the standard of care typical in the industry in the operation and maintenance of its facilities.

 

6.07.                     Maintenance of Insurance.  Maintain with financially sound and reputable insurance companies (with a Best Rating of at least A7, unless otherwise approved by the Administrative Agent) satisfactory to the Administrative Agent, and that are not Affiliates of the Borrowers, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in a Similar Business, of such types and in such reasonable amounts as are customarily carried under similar circumstances by such other Persons.

 

6.08.                     Compliance with Laws.  Comply in all material respects with the requirements of all Laws applicable to it or to its business or Property, except (other than with respect to any failure to comply with Anti-Terrorism Laws) in such instances in which (a) such requirement of Law is being contested in good faith by appropriate proceedings diligently conducted or a bona fide dispute exists with respect thereto; or (b) the failure to comply therewith could not reasonably be expected to result in a Material Adverse Effect.

 

6.09.                     Books and Records.  Maintain proper books of record and account necessary to prepare the financial statements required to be delivered pursuant to Section 6.01 in accordance with GAAP.

 

6.10.                     Inspection Rights; Appraisals.  Permit representatives and independent contractors of the Administrative Agent, the L/C Issuer and each Lender, at their respective expense, to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, in each case, all at such reasonable times during normal business hours and as reasonably often as may be necessary, upon reasonable advance notice to the Canadian Borrower and subject to compliance with applicable safety standards, with contractual or attorney-client privilege (as applicable) and non-disclosure agreements; provided, however, that during an Event of Default, the Administrative Agent, the L/C Issuer or any Lender (or any of their respective representatives or independent contractors) may, without duplication of the efforts of the others, 

 

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do any of the foregoing at the reasonable expense of the Borrowers at any time during normal business hours.

 

6.11.                     Compliance with Contractual Obligations.  Comply with all Contractual Obligations, except in such instances in which (i) such non-compliance is being contested in good faith or a bona fide dispute exists with respect thereto or (ii) the failure to comply therewith could not be reasonably expected to result in a Material Adverse Effect.

 

6.12.                     Use of Proceeds.  Use the proceeds of the Credit Extensions (i) to pay fees, commissions and expenses in connection with the Agreement and the transactions contemplated hereby, (ii) to make Permitted Acquisitions, to the extent consented to by the Required Lenders in their sole discretion, and (iii) for working capital in the Ordinary Course of Business (including, managing accounts receivables, inventory and other short-term cash requirements, including timing differences with regard to withholding taxes in the United States) and for other general corporate purposes of the Borrowers (but not for Restricted Payments).

 

6.13.                     Additional Guarantors.  Cause each Wholly-Owned Subsidiary which has not previously executed and delivered to the Administrative Agent a Guaranty and other related Collateral Documents to execute and deliver to the Administrative Agent for the benefit of the Secured Parties promptly, and in any event within 10 Business Days following such Subsidiary’s becoming a Subsidiary, a Guaranty and, as applicable, such Collateral Documents, together with a resolution of its board of directors or other similar governing body authorizing such Guaranty and Collateral Documents; provided, that such Person shall not be required to grant a Mortgage with respect to any Real Property to the extent the fair market value of the Real Estate of such Person does not exceed $25,000,000.  Notwithstanding anything to the contrary and for the avoidance of doubt, (a) no Subsidiary acquired after the Closing Date shall be required to furnish any such Guaranties or Collateral Documents if such Subsidiary is a Foreign Subsidiary or any Subsidiary that owns 65% or more of the stock of a CFC so long as such entity has no assets other than the stock of CFCs, obligations, indebtedness or receivables of or attributable to such CFCs and de minimis assets, if and to the extent that such actions would create or result in a Deemed Dividend Problem, (b) any Subsidiary that is subject to any contractual or legal restrictions under applicable law which at such time would be contravened by its becoming a Loan Party shall not be subject to the requirements of this Section 6.13, (c) Atlantic Auburndale, LLC, Auburndale GP, LLC, Auburndale LP, LLC, Dade Investment LP, Lake Investment LP, NCP Dade Power, LLC, NCP Gem, LLC, NCP Lake Power, LLC, NCP Pasco, LLC and Teton New Lake LLC shall not be subject to the requirements of this Section 6.13; provided that until the dissolution or liquidation of each such Subsidiary in compliance with Section 7.04, no such Subsidiary shall hold any assets other than as necessary to maintain its existence and for matters incidental thereto, or (d) any assets if, in the reasonable judgment of the Administrative Agent evidenced in writing, determined in consultation with the Borrowers, the burden, cost or consequences of creating or perfecting such pledges or security interests in such assets is excessive in relation to the benefits to be obtained therefrom by the Secured Parties under the Loan Documents shall not be subject to the requirements of this Section 6.13.

 

6.14.                     Distribution of Cash from Subsidiaries.  Consistent with past practice and subject to fiduciary obligations, cause each Subsidiary to distribute to the US Borrowers and CPILP, as applicable, and each US Borrower shall, and the Canadian Borrower shall cause to, 

 

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distribute to the Canadian Borrower all Available Cash on a regular basis, and in any event at least one time every 60 days; provided that such Subsidiaries shall be permitted to retain Available Cash in an amount reasonably necessary for working capital purposes or foreign currency exchange management of such Subsidiary or to pay required scheduled principal and interest payments in connection with any Indebtedness of such Subsidiary permitted under the terms of Section 7.03; provided, further, that in connection with the obligation of the Borrowers under Section 6.16, the Borrowers shall be permitted to transfer the applicable unrestricted cash or Cash Equivalents from the Canadian Borrower’s Revenue Account (as defined in the Deposit and Disbursement Agreement) to an account held by one or more of the U.S. Borrowers or one of their Domestic Subsidiaries.

 

6.15.                     Further Assurances.  Execute and deliver, or cause to be executed and delivered, to the Administrative Agent such documents and agreements, instruments, assignments, or other documents or agreements, and take or cause to be taken such actions, as the Administrative Agent, the Collateral Agent or the Required Lenders may, from time to time, reasonably request in order to effectuate the transactions contemplated by the Loan Documents and in order to grant, preserve, protect and perfect under the laws of the United States or Canada the validity and priority of the security interests created or intended to be created by the Collateral Documents pursuant to Section 6.13 from Subsidiaries formed or acquired after the Closing Date.

 

6.16.                     Liquidity.  Maintain on a consolidated basis aggregate unrestricted cash or Cash Equivalents in an amount of at least $75,000,000 (less the amount of any Cash Collateral provided pursuant to Section 2.03(g)(i)(iv)) and all such unrestricted cash or Cash Equivalents shall be held in deposit accounts or securities accounts in which one or more of the U.S. Borrowers or its Domestic Subsidiaries have granted a first priority security interest to the Collateral Agent or Administrative Agent, as applicable, for the benefit of the Secured Parties pursuant to a Collateral Document, subject only to Liens in favor of the applicable depositary institution to the extent permitted under Section 7.01(s).

 

ARTICLE VII.
 NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation shall remain unpaid, or any Letter of Credit shall remain outstanding or any other Secured Obligation shall remain outstanding, no Borrower shall, nor shall it permit any Loan Party or any Subsidiary to, directly or indirectly:

 

7.01.                     Liens.  No Borrower will, nor will it permit any Subsidiaries to, directly or indirectly, create, Incur or suffer to exist any Lien on any asset or Property of the Borrowers or any Subsidiary, or any income or profits therefrom, except as set forth below (collectively, “Permitted Liens”):

 

(a)                                 Liens pursuant to any Loan Document or to secure the Obligations;

 

(b)                                 Liens existing on the Closing Date and listed on Schedule 7.01 and any modifications, replacements, renewals, refinancings or extensions thereof; provided that (i) the Lien does not extend to any additional property other than after-acquired property that is affixed or incorporated into the property covered by such Lien proceeds and 

 

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products thereof, and (ii) the replacement, renewal, extension or refinancing of the obligations secured or benefited by such Liens, to the extent constituting Indebtedness, is permitted by Section 7.03;

 

(c)                                  Liens for taxes, assessments or governmental charges that are not overdue for a period more than any applicable grace period related thereto or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

 

(d)                                 carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, construction contractors or other like Liens arising in the Ordinary Course of Business which are not delinquent or which are being contested in good faith by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP or which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien;

 

(e)                                  (i) pledges or deposits in the Ordinary Course of Business in connection with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA (other than Liens on any Capital Stock pledged as Collateral) and (ii) pledges and deposits in the Ordinary Course of Business securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to the Borrowers or any of their Subsidiaries;

 

(f)                                   deposits to secure the performance of bids, trade contracts, governmental contracts and leases (other than Indebtedness for Borrowed Money), statutory obligations, surety, stay, customs and appeal bonds, performance bonds and other obligations of a like nature (including those to secure health, safety and environmental obligations) Incurred in the Ordinary Course of Business (other than Liens on any Capital Stock pledged as Collateral);

 

(g)                                  Liens encumbering any Real Estate subject to a Mortgage that are described on a mortgagee title policy and acceptable to the Administrative Agent in its reasonable discretion;

 

(h)                                 zoning restrictions, easements, licenses, rights-of-way, provisions, covenants, minor irregularities of title (and with respect to leasehold interests, mortgages, obligations, Liens and other encumbrances incurred, created, assumed or permitted to exist and arising by, through and under a landlord, ground lessor or owner of the leased property, with or without consent of the lessee) restrictions and other similar encumbrances affecting Real Estate which, in the aggregate, do not materially detract from the value of the Real Estate subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;

 

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(i)                                     Liens (other than Liens on any Capital Stock pledged as Collateral) securing judgments, decrees or awards (i) in respect of which the Borrowers or any of their Subsidiaries shall in good faith be prosecuting an appeal or proceedings for review and in respect of which there shall have been secured a subsisting stay of execution pending such appeal or proceedings and (ii) not constituting an Event of Default under Section 8.01(h);

 

(j)                                    Liens (other than Liens on any Capital Stock pledged as Collateral) securing Indebtedness permitted under Section 7.03(f) or Section 7.03(h); provided that (i) such Liens do not at any time encumber any Property other than the Property (except for replacements, additions and accessions to such Property) financed by such Indebtedness and (ii) the Indebtedness secured thereby does not exceed the cost of the Property being acquired on the date of acquisition;

 

(k)                                 Liens on any Property (other than Liens on any Capital Stock pledged as Collateral) (i) of any Subsidiary which are in existence at the time that such Subsidiary is acquired pursuant to a Permitted Acquisition, (ii) of any Borrower or any of their respective Subsidiaries existing at the time such Property (other than Liens on any Collateral pledged under a Collateral Document) is purchased or otherwise acquired by a Borrower or such Subsidiary thereof pursuant to a transaction permitted pursuant to this Agreement and (iii) of any Subsidiary acquired pursuant to a Permitted Acquisition to secure Indebtedness Incurred pursuant to Section 7.03(g) in connection with such Permitted Acquisition; provided that, with respect to each of the foregoing clauses (i), (ii) and (iii), (A) such Liens (1) are not Incurred in connection with, or in anticipation of, such Permitted Acquisition, purchase or other acquisition, (2) are applicable only to specific Property (other than Liens on any Capital Stock pledged as Collateral), (3) are not “blanket” or all-asset Liens, other than with respect to the Property of such acquired Subsidiary, and (4) do not attach to any other property or assets of any Borrower or any of its other Subsidiaries and (B) the Indebtedness secured by such Liens is permitted under Section 7.03(g);

 

(l)                                     Liens in favor of one or more of the Lenders on Property of the Borrowers and their respective Subsidiaries to secure obligations of Swap Contracts between a Lender or an Affiliate of a Lender and any of the Borrowers or other Loan Parties permitted under Section 7.03(e), including without limitation, any Swap Contract with a Lender or an Affiliate of a Lender in existence prior to the Closing Date and secured in connection with the Existing Credit Agreement;

 

(m)                             Liens on Property of CPILP and its Subsidiaries, in each case, (i) granted prior to the Closing Date; provided that such Lien was a Permitted Lien in accordance with Section 7.01(m) of the Existing Credit Agreement or (ii) granted after the Closing Date, solely to the extent (A) required under agreements permitted hereunder as in effect on the Closing Date and (B) that a prior Lien has been granted on such Property to the Administrative Agent for the benefit of the Secured Parties, and the beneficiary of such Lien agrees to subordinate its interest in any such Property or, if required under agreements permitted hereunder as in effect on the Closing Date, to share any interest in any Property subject to such Lien on a pro rata basis with the Lenders under this 

 

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Agreement, on terms and conditions reasonably satisfactory to the Administrative Agent and the Required Lenders;

 

(n)                                 Liens arising from Personal Property Security Act filings or Uniform Commercial Code financing statement filings regarding operating leases entered into by the Borrowers and its Subsidiaries in the Ordinary Course of Business;

 

(o)                                 Liens arising from precautionary Uniform Commercial Code financing statement or similar filings;

 

(p)                                 Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

 

(q)                                 leases, licenses, subleases or sublicenses granted to others in the Ordinary Course of Business which do not (i) interfere in any material respect with the business of the Borrowers or any of their Subsidiaries, taken as a whole or (ii) secure any Indebtedness;

 

(r)                                    any interest or title of a lessor, sublessor, licensor or sublicensor (other than any interest in any Capital Stock pledged as Collateral) under leases, subleases, licenses or sublicenses entered into by the Borrowers or any of their Subsidiaries in the Ordinary Course of Business;

 

(s)                                   Liens (i) of a collection bank arising under Section 4-210 of the UCC on items in the course of collection, (ii) attaching to commodity trading accounts or other commodities brokerage accounts permitted under the terms of the Loan Documents, and (iii) in favor of a banking or other financial institution arising as a matter of Law or under customary general terms and conditions encumbering deposits or other funds maintained with a financial institution and that are within the general parameters customary in the banking industry or arising pursuant to such banking institutions general terms and conditions;

 

(t)                                    Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts permitted under the terms of the Loan Documents and incurred in the Ordinary Course of Business and not for speculative purposes;

 

(u)                                 Liens that are contractual rights of setoff or rights of pledge (i) relating to the establishment of depository relations with banks or other financial institutions not given in connection with the issuance of Indebtedness, or (ii) relating to pooled deposit or sweep accounts of the Borrowers or any of their Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the Ordinary Course of Business of the Borrowers or any of their Subsidiaries;

 

(v)                                 Liens to secure any refinancing, refunding, extension, renewal or replacement or successive refinancings, refundings, extensions, renewals or replacements as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (b), (j) and (k); provided, however, that (A) such new Lien shall be 

 

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limited to all or part of the same property that secured the original Lien (plus improvements on such property, after acquired property that is affixed or incorporated into such property, and proceeds and products thereof) and (B) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (1) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (b), (j), and (k) at the time the original Lien became a Permitted Lien under this Agreement and (2) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement; and

 

(w)                               Any interest or title of a lessor or sublessor under any lease entered into by the Borrowers or their respective Subsidiaries in the Ordinary Course of Business and encumbering only the assets so leased;

 

(x)                                 Statutory and common law landlords’ Liens (other than Liens on any Capital Stock pledged as Collateral) under leases to which the Borrowers or any of their respective Subsidiaries are a party;

 

(y)                                 Liens (other than Liens on any Capital Stock pledged as Collateral) arising solely by operation of law or by order of a court or tribunal or other Governmental Authority (or by an agreement of similar effect);

 

(z)                                  Any reservations, limitations, exceptions, provisos and conditions, if any, expressed in any original grants from the Crown, including, without limitation, the reservation of any mines and minerals in the Crown or any other Person; and

 

(aa)                          Liens not otherwise permitted herein securing Indebtedness not in favor of any Affiliate of the Canadian Borrower and not exceeding in the aggregate at any time the principal amount of $10,000,000.

 

7.02.                     Investments; Acquisition.

 

(a)                                 No Borrower will, nor will it permit any Subsidiary to, directly or indirectly to make any Investment except as set forth below (collectively, “Permitted Investments”):

 

(i)                                     Investments in Cash Equivalents;

 

(ii)                                  Investments existing on the Closing Date as described and in the amounts (subject to any increases solely as a result of a return on such Investment) set forth on Schedule 7.02(a);

 

(iii)                               Investments of any Loan Party in any other Loan Party;

 

(iv)                              Guarantees permitted by Section 7.03(d);

 

(v)                                 Swap Contracts permitted by Section 7.03(e);

 

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(vi)                              Acquisitions permitted by Section 7.02(b);

 

(vii)                           advances to employees of the Borrowers or any Subsidiary made in the Ordinary Course of Business not in excess of $5,000,000 outstanding at any one time in the aggregate;

 

(viii)                        any Investment acquired by the Borrowers or any of their respective Subsidiaries: (i) in exchange for any other Investment or accounts receivable held by a Borrower or any such Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable, or (ii) as a result of a foreclosure by a Borrower or any of its Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

 

(ix)                              loans and advances to current or former management personnel of the Borrowers and/or any entity in which any current or former management personnel of the Borrowers has a beneficial or equity interest, pursuant to any management equity plan or stock option plan or any other management or employee benefit or incentive plan or agreement or any other agreement pursuant to which stock is held for the benefit of such Persons not to exceed $5,000,000 in aggregate principal amount at any time outstanding, the proceeds of which will be used to purchase or redeem, directly or indirectly, shares of Capital Stock of the Canadian Borrower;

 

(x)                                 Investments the payment for which consists of Capital Stock of the Canadian Borrower (other than Disqualified Stock);

 

(xi)                              any “Permitted Investments” as such term is defined in the Deposit and Disbursement Agreement made by the Borrowers in accordance with Section 3.10 of the Deposit and Disbursement Agreement; and

 

(xii)                           Other Investments (including without limitation, any Investment constituting an acquisition that does not otherwise constitute a Permitted Acquisition) (i) in an amount not to exceed $10,000,0000 in the aggregate at any one time outstanding, or (ii) if the amount of such Investments exceeds $10,000,000 in the aggregate at any one time outstanding but is less than $25,000,000 in the aggregate at any one time outstanding, the Borrowers shall have obtained the prior written consent of the Administrative Agent (not to be unreasonably withheld or delayed).

 

(b)                                 No Borrower will, nor will permit any Subsidiary to, directly or indirectly make any Acquisition other than a Permitted Acquisition on terms and conditions satisfactory to the Required Lenders in their sole discretion.

 

7.03.                     Indebtedness, and Issuance of Disqualified Stock.  No Borrower will, nor will it permit any Subsidiary to, directly or indirectly, Incur or suffer to exist any Indebtedness or issue any shares of Disqualified Stock or permit CPI Preferred Equity to issue any Preferred Stock other than as follows (provided, however, that notwithstanding anything to the contrary in 

 

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the following, no Borrower will, nor will it permit any Subsidiary to permit CPILP or CPILP GP, or any direct or indirect Subsidiary thereof to Incur or suffer to exist any Indebtedness or issue any shares of Disqualified Stock or permit CPI Preferred Equity to issue any Preferred Stock other than (x) Refinancing Indebtedness of Indebtedness in effect and in the principal amount outstanding on the Closing Date, and (y) Non-Recourse Project Financing Indebtedness of a direct or indirect Subsidiary of CPILP or CPILP GP acquired after the Closing Date, in each case, solely to the extent permitted hereunder):

 

(a)                                 Indebtedness under the Loan Documents and any refinancings thereof;

 

(b)                                 Indebtedness, Disqualified Stock or the CPI Preferred Stock with respect to CPI Preferred Equity, in each case, outstanding on the Closing Date and listed on Schedule 7.03 and any Refinancing Indebtedness thereof (other than Refinancing Indebtedness with respect to the CPI Preferred Stock);

 

(c)                                  unsecured Indebtedness Incurred in connection with the 2011 Notes on the Initial Closing Date; provided that the aggregate outstanding principal amount of such Indebtedness does not exceed $460,000,000 in the aggregate at any one time;

 

(d)                                 (i) Guarantees from the Borrowers or any Loan Party in respect of Indebtedness and Disqualified Stock otherwise permitted hereunder of a Loan Party, (ii) unsecured Guarantees from the Borrowers or any Subsidiary (other than CPI Preferred Equity) in respect of obligations of any Subsidiary arising in the Ordinary Course of Business and consistent with past practices, and (iii) Indebtedness consisting of surety or indemnitor obligations under any bond or other contract for the benefit of any Borrower or Subsidiary to the extent Incurred in the Ordinary Course of Business and consistent with past practices;

 

(e)                                  Swap Obligations (contingent or otherwise) of the Borrowers or any other Loan Party existing or arising under any (i) Swap Contract, provided that such obligations are (or were) entered into by such Person in the Ordinary Course of Business for the purpose of mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person and not for purposes of speculation or taking a “market view;” and (ii) other Bank Product Debt;

 

(f)                                   Indebtedness in respect of Capitalized Lease Obligations, Synthetic Lease Obligations and purchase money obligations for fixed or capital assets within the limitations set forth in Section 7.01(j); provided, however, that the aggregate amount of all such Indebtedness at any one time outstanding together with all Indebtedness outstanding under Section 7.03(h) shall not exceed $40,000,000 in the aggregate;

 

(g)                                  Indebtedness of a Subsidiary (other than CPI Preferred Equity) (i) assumed in connection with any Permitted Acquisition and not otherwise permitted by another clause of this Section 7.03 so long as such Indebtedness is not Incurred in contemplation of such Permitted Acquisition and any refinancing thereof or (ii) Incurred to finance a Permitted Acquisition and any refinancing thereof; provided that, in each case, such Indebtedness is in an amount and on terms and conditions acceptable to the 

 

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Required Lenders in their sole discretion, and provided, further that if such Indebtedness is secured by a Lien, such Lien does not extend to any assets other than those of the Person (or Persons) acquired, such Indebtedness is not required to be Guaranteed by any Borrower or any Subsidiary of a Borrower, including, without limitation, any Loan Party, the Canadian Borrower provides a written certificate of a Responsible Officer demonstrating in reasonable detail and certifying as to compliance with Section 7.11 on a pro forma basis, after giving effect to the consummation of such Acquisition and Incurrence or assumption of such Indebtedness;

 

(h)                                 Indebtedness secured by fixed or capital assets and property acquired by the Borrowers or any Subsidiary; provided that (i) such Indebtedness (A) does not exceed the value of such property or assets so acquired, and (B) was in existence prior to the contemplation of such acquisition, (ii) the Lien securing such Indebtedness does not extend to any assets other than those acquired, and (iii) such Indebtedness, together with all Indebtedness outstanding under Section 7.03(f), does not exceed $40,000,000 in the aggregate;

 

(i)                                     Indebtedness arising from agreements of the Borrowers or a Subsidiary of the Borrowers providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the acquisition or disposition of any business, assets or a Subsidiary of the Borrowers in accordance with the terms of this Agreement, other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;

 

(j)                                    the Permitted Intercompany Notes to the extent subordinated in right of payment to the Obligations pursuant to the Intercompany Loan Subordination Agreement;

 

(k)                                 Indebtedness representing deferred compensation to employees of the Borrowers or any of their Subsidiaries incurred in the Ordinary Course of Business or Indebtedness consisting of promissory notes issued by the Borrowers or any of their respective Subsidiaries to current or former officers, managers, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of equity interests of the Borrowers or any direct or indirect parent of the Borrowers permitted by Section 7.06 so long as such promissory notes are subordinated to the Obligations in a manner reasonably acceptable to the Administrative Agent;

 

(l)                                     Cash management obligations and other Indebtedness in respect of netting services, overdraft protections and similar arrangements in each case in connection with deposit accounts;

 

(m)                             Indebtedness consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the Ordinary Course of Business;

 

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(n)                                 Indebtedness incurred by the Borrowers or any of their Subsidiaries in the form of letters of credit, bank guarantees, bankers’ acceptances or similar instruments issued or created in the Ordinary Course of Business, including in respect of workers compensation claims, health, disability or other employee benefits or property casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;

 

(o)                                 obligations in respect of performance, bid, appeal and surety bonds and similar obligations provided by the Borrowers or any of their Subsidiaries or obligations in the form of letters of credit, bank guarantees or similar instruments related thereto, in each case in the Ordinary Course of Business;

 

(p)                                 all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (p) above;

 

(q)                                 Indebtedness of the Borrowers and their Subsidiaries not described in any other clause of this Section and in an aggregate principal amount not to exceed $10,000,000 at any time outstanding.

 

Notwithstanding anything in this Section 7.03 to the contrary, Curtis Palmer shall not incur any Indebtedness (including any Guarantees of Indebtedness) other than Indebtedness of Curtis Palmer in existence on the Initial Closing Date, including the guaranty of Indebtedness under the CPI US Notes as in effect on the Closing Date (and, in each case, Refinancing Indebtedness thereof).

 

7.04.                     Fundamental Changes.  No Borrower will, nor will it permit any Subsidiary to, directly or indirectly, merge, amalgamate, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, unless permitted by Section 7.05 (i), (j) or (k).

 

7.05.                     Dispositions.  No Borrower will, nor will it permit any Subsidiary to, directly or indirectly, make any Disposition or enter into any agreement to make any Disposition, except:

 

(a)                                 (i) the sale or lease of products, services or accounts receivable in the Ordinary Course of Business, (ii) any sale or other disposition of surplus, damaged, worn-out or obsolete assets or property (including, without limitation, inventory, immaterial assets and property no longer commercially viable to maintain and operate) in the Ordinary Course of Business, (iii) the granting of any option or other right to purchase, or otherwise acquire property in the Ordinary Course of Business, (iv) the sale, transfer or other disposition of power, capacity, energy, ancillary services, and other products or services, or the sale of any other inventory or contracts related to any of the foregoing, (v) the sale, lease, conveyance or other disposition for value by any Borrower 

 

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or any Subsidiary of fuel or emission credits in the Ordinary Course of Business and (vi) the licensing of intellectual property in the Ordinary Course of Business;

 

(b)                                 Dispositions of generated power in the Ordinary Course of Business;

 

(c)                                  Dispositions of equipment to the extent that (i) such Property is exchanged for credit against the purchase price of similar replacement Property or (ii) the Net Proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement Property;

 

(d)                                 Dispositions permitted by Section 7.02 or 7.06;

 

(e)                                  leases, subleases, licenses or sublicenses (including the provision of software or the licensing of other intellectual property rights) and termination thereof, in each case in the Ordinary Course of Business and which do not materially interfere with the business of the Borrowers and the Subsidiaries taken as a whole;

 

(f)                                   transfers of property subject to casualty events; provided that the Borrowers shall deliver to the Administrative Agent as Cash Collateral the amount of any insurance proceeds in excess of $5,000,000 with respect to casualty events individually or in the aggregate, that are not applied to the repair of the applicable damaged property or the purchase of replacement property within 365 days after the Borrowers’ receipt of such insurance proceeds; provided that with respect to any Property being replaced or repaired, to the extent that the Subsidiary or Project that owns such Property had contracts for the sale of power prior to the incurrence of the applicable casualty event, such Person continues to have contracts on substantially the same terms (or more terms more preferable to such Person) at the time such proceeds are applied;

 

(g)                                  any swap of assets in exchange for services or other assets in the Ordinary Course of Business of comparable or greater value or usefulness to the business of the Borrowers and their Subsidiaries as a whole, as determined in good faith by the management of the Borrowers;

 

(h)                                 the unwinding of any Swap Contracts pursuant to its terms;

 

(i)                                     the dissolution or liquidation of any Subsidiary (other than any Loan Party or any Subsidiary the Capital Stock of which has been pledged as Collateral) with no assets;

 

(j)                                    Disposition of AP Onondaga, LLC, Onondaga Renewables, LLC and their respective Property, so long as such Disposition occurs prior to June 30, 2014; provided that at the time of such Disposition, AP Onondaga, LLC and Onondaga Renewables, LLC do not own any assets with an aggregate Fair Market Value in excess of $1,000,000 and a release of the pledge of the stock at the time of the sale of AP Onondaga, LLC;

 

(k)                                 Disposition (i) prior to December 31, 2013, of any interest the Borrowers and their Subsidiaries have in the Gregory cogeneration facility located in Corpus Christi, Texas (“Gregory”), for an approximate aggregate purchase price of $34,100,000 and 

 

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subject to the terms of that separate consent between the Borrowers, the Administrative Agent and the Required Lenders to be dated on or after the Closing Date, and (ii) prior to June 30, 2014, of any interest the Borrowers and their Subsidiaries have in Delta Person Limited Partnership, a Delaware limited partnership (“Delta-Person”), for an approximate aggregate purchase price of $8,900,000. The Lenders, the L/C Issuers and the Administrative Agent hereby agree that immediately upon the Disposition of such properties in accordance with this subsection (k), the Subsidiaries owning Gregory and Delta-Person, shall in each case automatically be released from any and all Obligations as Guarantor or Pledgor under the Collateral Documents, provided that such Subsidiaries hold no assets with a Fair Market Value in excess of $250,000 and are promptly wound up, dissolved or liquidated after such Disposition; and

 

(l)                                     any other Disposition or Dispositions not to exceed an aggregate amount of $10,000,000 in any fiscal year.

 

7.06.                     Restricted Payments and Prepayments of Permitted Indebtedness.  No Borrower will, nor will it permit any Subsidiary to, declare or make, directly or indirectly, any Restricted Payment, or make any voluntary prepayment, defeasance, redemption or repurchase of any Restricted Indebtedness (collectively, “Voluntary Prepayments”) other than regularly scheduled payments of Indebtedness permitted under Section 7.03 and principal payments of revolving Indebtedness that do not permanently reduce the commitments of such Indebtedness, except that:

 

(a)                                 any Subsidiary may make Restricted Payments to a Borrower or another Loan Party or a Subsidiary of a Loan Party;

 

(b)                                 the Borrowers and each Subsidiary may purchase, redeem or otherwise acquire shares of its common stock or other common equity interests or warrants or options to acquire any such shares with the proceeds received from the substantially concurrent issue of new shares of its common stock or other common equity interests;

 

(c)                                  the Canadian Borrower may declare or pay cash dividends to the holders of its Capital Stock, provided that (i) immediately after giving effect to such proposed declaration or payment, no Default or Event of Default would exist, (ii) the Canadian Borrower provides a written certificate of a Responsible Officer demonstrating in reasonable detail and certifying as to compliance with Section 7.11 for the previous four-quarter period for which financial statements have been delivered on a pro forma basis, after giving effect to the making of such payment; and (iii) no Loan proceeds are used or applied to pay such dividends;

 

(d)                                 the Borrowers or any Subsidiary may repurchase, retire, acquire or retire for value of Capital Stock of any Borrower held by any future, present or former employee, officer, director or consultant of such Borrower or such Subsidiary upon the death, disability, retirement or termination of employment of any such Person or pursuant to any employee or director equity plan, employee or director stock option plan or any other employee or director benefit plan or any agreement (including any stock subscription or shareholder agreement) with any employee, director, officer or consultant 

 

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of such Borrower or such Subsidiary; provided that the aggregate amount of all Restricted Payments made pursuant to this clause (d) shall not exceed $5,000,000 in any fiscal year of the Canadian Borrower and shall not exceed $10,000,000 over the term of this Agreement; provided further that no Default or Event of Default has occurred and is continuing or would occur as a result of the making of such Restricted Payments.

 

(e)                                  the Borrowers and their respective Subsidiaries shall be permitted to make Voluntary Prepayments on the Obligations;

 

(f)                                   the Borrowers and their respective Subsidiaries shall be permitted to make Voluntary Prepayments of the notes described in clause (a) of the definition of “CPI US Notes;” provided, that (i) immediately after giving effect to such proposed Voluntary Prepayment, no Default or Event of Default would exist, and (ii) the Canadian Borrower provides a written certificate of a Responsible Officer demonstrating in reasonable detail and certifying as to compliance with Section 7.11 for the previous four-quarter period for which financial statements have been delivered on a pro forma basis, after giving effect to the making of such Voluntary Prepayment;

 

(g)                                  the Borrowers and their Subsidiaries may make Voluntary Prepayments of Indebtedness (x) from the proceeds of Refinancing Indebtedness incurred in respect thereof and (y) during the 60 day period immediately preceding the date on which such Indebtedness or portion thereof, as the case may be, is due.

 

7.07.                     Change in Nature of Business, or Project Documents.  No Borrower will, nor will it permit any Subsidiary to, directly or indirectly, (a) engage in any material line of business substantially different from any Similar Business or those lines of business conducted by any of the Borrowers or their respective Subsidiaries on the date hereof, or (b) consent or agree to any material amendment or modification to any Project Document if such material amendment or modification could reasonably be expected to result in a Material Adverse Effect.

 

7.08.                     Transactions with Affiliates.  No Borrower will, nor will it permit any Subsidiary to, directly or indirectly, make any payment or to, sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any Property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, or advance with, or for the benefit of, any direct or indirect Affiliate of the Borrowers (each of the foregoing, an “Affiliate Transaction”) other than:

 

(a)                                 (i) any transactions between or among Loan Parties, (ii) any transaction among any Borrower and any Subsidiary or any entity that becomes a Subsidiary as a result of such transaction that is not otherwise prohibited under this Agreement and (iii) any transaction among any Borrower, any Subsidiary or any other Affiliate Transaction that is on terms at least as favorable as might reasonably have been obtained at such time in an arm’s length transaction from an unaffiliated party; and

 

(b)                                 any transaction on terms substantially as favorable to the Borrowers or such Subsidiary as would be obtainable by the Borrowers or such Subsidiary at the time in a comparable arm’s-length transaction with a Person other than an Affiliate.

 

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The provisions of this Section 7.08 shall not apply to the following:

 

(i)                                     Permitted Investments permitted by Section 7.02 and Restricted Payments permitted by Section 7.06;

 

(ii)                                  the payment of reasonable and customary fees and out of pocket expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Borrowers, or any Subsidiary;

 

(iii)                               any agreement in effect on the Closing Date and disclosed to the Administrative Agent on Schedule 7.08 or any amendment thereto (so long as any such amendment is not adverse to the Lenders in any material respect) or any transaction contemplated thereby; and

 

(iv)                              the existence of, or the performance by the Borrowers or any Subsidiary of the Borrowers of its respective obligations under the terms of, any shareholders agreement (including any registration rights agreement or purchase agreement related thereto) or services agreement to which it is a party as of the Initial Closing Date and any similar agreements (including any operating agreements or limited partnership agreements) which it may enter into thereafter; provided, however, that the existence of, or the performance by the Borrowers or any of their respective Subsidiaries of its obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Closing Date shall only be permitted by this clause (iv) to the extent that the terms of any such amendment or new agreement (x) have been consented to in writing by the Administrative Agent (such consent not to be unreasonably withheld or delayed), to the extent such amendment or new agreement is not materially adverse to the interest of the Lenders, and (y) have been consented to in writing by the Required Lenders, to the extent that the Administrative Agent reasonably determines such amendment or new agreement is materially adverse to the interest of the Lenders.

 

7.09.                     Burdensome Agreements.  No Borrower will, nor will it permit any Subsidiary to, directly or indirectly, enter into any Contractual Obligation (other than this Agreement or any other Loan Document) that (a) limits the ability of any Subsidiary (i) to make Restricted Payments to the Borrowers or any Guarantor or to otherwise transfer Property to the Borrowers or any Guarantor, (ii) to pay any Indebtedness owed to any Borrower or any of its Subsidiaries, (iii) to Guarantee the Indebtedness of the Borrowers, (iv) to make loans or advances to any of the Borrowers or any of their Subsidiaries, (v) to sell, lease or transfer any of its properties or assets to any of the Borrowers or any of its Subsidiaries, or (vi) to create, Incur, assume or suffer to exist Liens on Property of such Person; or (b) requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person, except in each case for such encumbrances or restrictions existing under or by reason of:

 

(A)                               contractual encumbrances or restrictions in effect on the Initial Closing Date, pursuant to this Agreement;

 

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(B)                               the Convertible Note Indentures, the CPILP Note Agreements or the 2011 Note Documents, in each case as in effect on November 4, 2011;

 

(C)                               applicable law or any applicable rule, regulation or order;

 

(D)                               any agreement or other instrument relating to Indebtedness of a Person acquired by a Borrower or any Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the Properties or assets of any Person, other than the Person, or the Property or assets of the Person, so acquired; provided, however, that with respect to any such agreement relating to an acquisition after the Closing Date, such acquisition is a Permitted Acquisition and any such agreement has been disclosed in writing to the Lenders prior to the Borrower or any Subsidiary receiving consent for such Permitted Acquisition under Section 7.02(b);

 

(E)                                any restriction with respect to a Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Subsidiary pending the closing of such sale or disposition provided that such sale or disposition is otherwise permitted hereunder;

 

(F)                                 Secured Indebtedness or Liens otherwise permitted to be Incurred pursuant to Sections 7.01 and 7.03 hereof that limit the right of the debtor to dispose of the assets securing such Indebtedness;

 

(G)                               restrictions on cash or other deposits or net worth imposed by customers under Contracts entered into in the Ordinary Course of Business that impose restrictions of the type described in Section 7.09(a)(v) herein;

 

(H)                              customary provisions in joint venture agreements, limited partnership agreements and other similar agreements otherwise permitted hereunder and entered into in the Ordinary Course of Business;

 

(I)                                   customary provisions contained in leases and other similar agreements entered into in the Ordinary Course of Business; or

 

(J)                                   any encumbrances or restrictions of the type referred to in clauses (a) and (b) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (A) through (I) above; provided that (x) such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the board of directors or other similar governing body of the Canadian Borrower, not materially more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing, and (y) with respect to any refinancing of Indebtedness of Piedmont Green Power, LLC, in 

 

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the good faith judgment of Piedmont Green Power, LLC the terms of such refinancing would not materially and adversely affect its cash flow.

 

7.10.                     Use of Proceeds.  No Borrower will, nor will it permit any Subsidiary to, use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to (a) purchase margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing margin stock or to refund indebtedness originally Incurred for such purpose, (b) make any Voluntary Prepayments or make any Restricted Payments.

 

7.11.                     Financial Covenants.  No Borrower will, nor will it permit any Subsidiary to, at any time, (a) permit the Interest Coverage Ratio, calculated as of the end of each fiscal quarter for such fiscal quarter and the immediately preceding three fiscal quarters, to be less than 1.60 to 1.00 from the Closing Date through the Maturity Date, or (b) permit the Total Leverage Ratio, calculated as of the end of each fiscal quarter for such fiscal quarter and the immediately preceding three fiscal quarters, to be greater than 7.75 to 1.00 from the Closing Date through the Maturity Date.

 

7.12.                     Organic Documents.  Amend, modify or otherwise change any of its Organization Documents as in effect on the Closing Date in any manner that would have a material and adverse effect on the Lenders or without providing the Administrative Agent with prompt notice of such change.

 

ARTICLE VIII.
 EVENTS OF DEFAULT AND REMEDIES

 

8.01.                     Events of Default.  Any of the following shall constitute an Event of Default:

 

(a)                                 Non-Payment.  Any Borrower fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan or any L/C Obligation, or (ii) within 5 Business Days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any facility, utilization or other fee due hereunder, or any other amount payable hereunder or under any other Loan Document; or

 

(b)                                 Specific Covenants.  Any Borrower shall fail to comply with perform or observe any term, covenant or agreement contained in any of Section 6.03(a), 6.12, or 6.16, or Article VII; or

 

(c)                                  Other Defaults.  Any Loan Party fails or refuses to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed, and such failure or refusal continues for 30 days after such Loan Party’s being notified of such failure or refusal by the Administrative Agent, the L/C Issuer or any Lender; or

 

(d)                                 Representations and Warranties.  Any representation or warranty made or deemed made by any Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered by it in connection herewith or therewith proves to have been incorrect in any material respect when made or deemed made; or

 

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(e)                                  Cross-Default.  (i) any Borrower, any Guarantor, or any Subsidiary (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise), inclusive of any grace, extension, forbearance or similar period, in respect of any Indebtedness having an aggregate principal amount (including undrawn  or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than $25,000,000, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, for a period beyond the applicable grace, cure, extension, forbearance or other similar period the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness (or the beneficiary or beneficiaries of any applicable Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased or redeemed (automatically or otherwise) prior to its stated maturity, or such Guarantee to become payable of more than $25,000,000 in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an “Early Termination Date” (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which any Borrower, any Guarantor, or any Subsidiary is the “Defaulting Party” (as defined in such Swap Contract) or (B) any “Termination Event” (as defined in such Swap Contract) under such Swap Contract as to which any Borrower, any Guarantor, or any Subsidiary is an “Affected Party” (as defined in such Swap Contract) and, in either event, the Swap Termination Value owed by such Borrower, such Guarantor, or such Subsidiary as a result thereof is greater than $25,000,000; provided, that any event described in the preceding clauses (i) and (ii) that relates to a Non-Loan Party Subsidiary (other than CPI Preferred Equity) shall not constitute an Event of Default unless such event constitutes a Specified Project Effect; or

 

(f)                                   Insolvency Proceedings, Etc.  Any Loan Party or any of its Subsidiaries institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its Property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 45 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its Property is instituted without the consent of such Person and continues undismissed or unstayed for 45 calendar days, or an order for relief is entered in any such proceeding; provided, that any event described in this subsection (f) that relates to a Non-Loan Party Subsidiary (other than CPI Preferred Equity) shall not constitute an Event of Default unless such event constitutes a Specified Project Effect; or

 

(g)                                  Inability to Pay Debts.  Any Loan Party becomes unable or admits in writing its inability or fails generally to pay its debts as they become due as provided in Title 11 of the United States Bankruptcy Code; provided, that any event described in this subsection (g) that relates to a Non-Loan Party Subsidiary (other than CPI Preferred 

 

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Equity) shall not constitute an Event of Default unless such event constitutes a Specified Project Effect; or

 

(h)                                 Judgments.  There is entered against any Borrower or any Subsidiary (i) a final judgment or order for the payment of money in an aggregate amount exceeding the $25,000,0000 (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage) unless a stay of enforcement of such judgment or order is in effect, by reason of a pending appeal or otherwise, or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 10 consecutive days during which a stay of enforcement of such judgment for which enforcement proceedings have been commenced, by reason of a pending appeal or otherwise, is not in effect; provided, that any event described in this subsection (h) that relates to a Non-Loan Party Subsidiary (other than CPI Preferred Equity) shall not constitute an Event of Default unless such event constitutes a Specified Project Effect; or

 

(i)                                     ERISA.  (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of a Loan Party under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of $25,000,000, or (ii) the US Borrowers or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of $25,000,000; or

 

(j)                                    Invalidity of Loan Documents.  Any Loan Document, at any time after its execution and delivery and for any reason other than the agreement of all the Lenders or satisfaction in full of all the Obligations, ceases to be in full force and effect, or is declared by a court of competent jurisdiction to be null and void, invalid or unenforceable in any respect; or any Loan Party denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document; or

 

(k)                                 Change of Control.  There occurs any Change of Control.

 

(l)                                     Default Under Project Document.  Any Borrower, any Guarantor or any of their Subsidiaries shall default under or breach any Project Document if such default or breach could reasonably be expected to result in a Material Adverse Effect; provided, however, that if and only if (i) such breaches or defaults do not in the aggregate constitute a Specified Project Effect, then (ii) such breaches or defaults shall be deemed not to result in a Material Adverse Effect for purposes of this Section 8.01(l).

 

8.02.                     Remedies Upon Event of Default.  If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of the Required Lenders, take any or all of the following actions:

 

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(a)           declare the commitment of each Lender to make Loans and any obligation of any L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;

 

(b)           declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrowers;

 

(c)           require the Loan Parties to Cash Collateralize L/C Obligations; and

 

(d)           exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents or applicable Law, subject to the requirements of Section 203 of the Federal Power Act for prior authorization;

 

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to a Borrower under the Bankruptcy Code of the United States or any other applicable bankruptcy or insolvency law, the obligation of each Lender to make Loans and any obligation of any L/C Issuer to make L/C Credit Extensions to either Borrower shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrowers to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.

 

8.03.       Application of Funds.

 

(a)           Obligations.  After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:

 

First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including Attorney Costs and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;

 

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including Attorney Costs and amounts payable under Article III, but excluding amounts relating to Bank Products), ratably among them in proportion to the amounts described in this clause Second payable to them;

 

Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans, L/C Borrowings and other Obligations (excluding amounts relating to Bank Products), ratably among the Lenders in 

 

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proportion to the respective amounts described in this clause Third payable to them;

 

Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, L/C Borrowings and amounts owing in connection with any Swap Obligations related to Swap Contracts with Lenders and permitted under Section 7.03(e), ratably among the Lenders in proportion to the respective amounts described in this clause Fourth held by them;

 

Fifth, to the Administrative Agent for the account of the L/C Issuers, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit issued by such L/C Issuers;

 

Sixth, to payment of all other Obligations other than Bank Product Debt and Obligations due and owing to Defaulting Lenders;

 

Seventh, to payment of Bank Product Debt constituting Obligations other than Obligations due and owing to Defaulting Lenders;

 

Eighth, to payment of any other Obligations due and owing to Defaulting Lenders; and

 

Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrowers or as otherwise required by Law.

 

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur.  If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.  Amounts distributed with respect to any Bank Product Debt shall be the actual amount of Bank Product Debt most recently reported in writing to the Administrative Agent.

 

(b)           Application of Payments.  Notwithstanding anything to the contrary set forth in any of the Loan Documents, all payments on behalf of a Borrower or Guarantor shall be applied first to Obligations denominated in the same currency as the payments received, until all Obligations are paid in full (except as otherwise provided herein); provided that payments and collections received in any currency other than the currency in which any outstanding Obligations are denominated will be accepted and/or applied at the discretion of the Administrative Agent, in the event that the Administrative Agent elects to accept and apply such amounts when there are no Obligations (other than L/C Obligations or other contingent Obligations) then outstanding in the same currency, the Administrative Agent shall convert such currency received to the currency in which the Obligations are denominated at the Spot Rate on such date (regardless of whether such rate is the best available rate) and in such event, Borrowers shall pay the costs of such conversion (or the Administrative Agent may, at its option, charge such costs to the loan account of any Borrower maintained by the Administrative Agent) and to the extent any 

 

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Borrower or Guarantor, directly or indirectly, uses any proceeds of the applicable Loans or L/C Obligations to acquire rights in or the use of any Collateral or to repay any Indebtedness used to acquire rights in or the use of any Collateral, payments in respect of the Obligations shall be deemed applied first to the Obligations arising from Loans and L/C Obligations that were not used for such purposes and second to the Obligations arising from Loans and L/C Obligations the proceeds of which were used to acquire rights in or the use of any Collateral in the chronological order in which such Borrower acquired such rights in or the use of such Collateral.  For purposes of this Section 8.03, “paid in full” of a type of Obligation means payment in cash or immediately available funds of all amounts owing on account of such type of Obligation, including interest accrued after the commencement of any Insolvency Proceeding, default interest, interest on interest, and expense reimbursements, irrespective of whether any of the foregoing would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.

 

(c)           Loans in Respect of Bankers’ Acceptances.  If any Borrower does not pay to the Administrative Agent for the account of the Lenders the face amount of any unmatured Bankers’ Acceptance or BA Equivalent Note required to be paid pursuant to Section 2.06, the Administrative Agent on behalf of the Lenders may at its option at any time without notice to the Borrowers give notice to the Lenders to make a Cdn. Prime Rate Loan to the Borrowers equal to the face amount of all unmatured Bankers’ Acceptances and BA Equivalent Notes, such Loan not to bear interest.  The proceeds of such Loan will be held by each Lender in a non-interest bearing cash collateral account for the benefit of the Borrowers and will be applied in payment of such Bankers’ Acceptances as they mature or otherwise as the Lender may require.  The Borrowers will each execute and deliver as security for such Loans all such security as the Lenders may deem necessary or advisable including an assignment of the credit balance in respect of such Cash Collateral account.

 

ARTICLE IX.
 ADMINISTRATIVE AGENT

 

9.01.       Appointment and Authority.  Each of the Lenders and the L/C Issuers hereby irrevocably appoints Bank of Montreal to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto (in particular, to act as a pledge administrator for the purposes of any security governed by US Law or the Laws of any other jurisdiction).  The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuers, and neither the Borrowers nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions.

 

9.02.       Rights as a Lender.  The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity.  

 

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Each of Bank of Montreal and its Affiliates may accept deposits from, maintain deposits or credit balances for, invest in, lend money to, provide Swap Contracts or Bank Products to, act as trustee under indentures of, serve as financial or other advisor to, and generally engage in any kind of business with, the Loan Parties and their Affiliates, as if Bank of Montreal were any other bank, without any duty to account therefor (including any fees or other consideration received in connection therewith) to the other Lenders.  In their individual capacity, Bank of Montreal and its Affiliates may receive information regarding the Loan Parties and their Affiliates (including information subject to confidentiality obligations), and each Lender agrees that Bank of Montreal and its Affiliates shall be under no obligation to provide such information to the Lenders, if acquired in such individual capacity and not as Administrative Agent hereunder.

 

9.03.       Exculpatory Provisions.  The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents.  Without limiting the generality of the foregoing, the Administrative Agent:

 

(a)           shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

 

(b)           shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law; and

 

(c)           shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrowers or any of their Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

 

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by a Borrower, a Lender or any L/C Issuer.

 

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, 

 

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effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

9.04.       Reliance by Administrative Agent.  The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or any L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or such L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or such L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

9.05.       Delegation of Duties.  The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub agents appointed by the Administrative Agent.  The Administrative Agent and any such sub agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall apply to any such sub agent and to the Related Parties of the Administrative Agent and any such sub agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

 

9.06.       Resignation of Administrative Agent.  The Administrative Agent may resign at any time by giving at least 30 days prior written notice thereof to the Lenders, the L/C Issuers and the Borrowers.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right to appoint a successor reasonably acceptable to the Borrower Agent, which acceptance shall neither be unreasonably withheld or delayed, and which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States.  If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (c) of the definition thereof, the Required Lenders may, to the extent permitted by applicable law, by notice in writing to the Borrowers and such Person, remove such Person as Administrative Agent and, in consultation with the Borrowers, appoint a successor.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring or removed Administrative Agent gives notice of its resignation, then the retiring or removed Administrative Agent may on behalf of the Lenders and the L/C Issuers, appoint a successor Administrative Agent meeting the qualifications set forth above with the written consent of the Borrower Agent, which consent shall not be unreasonably withheld or delayed; provided that if the Administrative Agent shall notify the Borrowers and the Lenders 

 

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that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the L/C Issuers under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and each L/C Issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring, retired or removed Administrative Agent, and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section).  The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor.  After the retiring or removed Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.

 

Any resignation by Bank of Montreal as Administrative Agent pursuant to this Section shall also constitute its resignation as L/C Issuer.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer, (b) the retiring L/C Issuer shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor L/C Issuer shall issue letters of credit having the same terms (other than pricing not specified in Section 2.03(i)), including face amount as, and, in substitution for, the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect to such Letters of Credit.

 

In connection with any resignation of the Administrative Agent under this Agreement, Bank of Montreal in its capacity as Collateral Agent under the Collateral Agency and Intercreditor Agreement may resign as Collateral Agent pursuant to the terms thereof.

 

9.07.       Non-Reliance on Administrative Agent and Other Lenders.  Each Lender and each L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender and each L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or 

 

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based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

 

9.08.       No Other Duties, Etc.  Anything herein to the contrary notwithstanding, none of the Bookrunners, Arrangers, Syndication Agents or Documentation Agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or an L/C Issuer hereunder.

 

9.09.       Administrative Agent May File Proofs of Claim.  In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

 

(a)           to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuers and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuers and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuers and the Administrative Agent under Sections 2.03(i) and (j), 2.09 and 10.04) allowed in such judicial proceeding; and

 

(b)           to collect and receive any monies or other Property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and each L/C Issuer to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuers, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 10.04.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or any L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

 

9.10.       Collateral and Guaranty Matters.  The Lenders and the L/C Issuers irrevocably authorize the Administrative Agent, at its option and in its discretion,

 

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(a)           to release (or direct the Collateral Agent to release) any Lien on any Property granted to or held by the Administrative Agent or the Collateral Agent under any Loan Document (i) upon termination of the Aggregate Commitments and payment in full of all Obligations (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit, (ii) that is sold or to be sold, transferred or to be transferred or otherwise disposed of as part of or in connection with any Disposition permitted hereunder or under any other Loan Document, or (iii) subject to Section 10.01, if approved, authorized or ratified in writing by the Required Lenders; and

 

(b)           to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder.

 

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release its interest in particular types or items of Property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.

 

9.11.       Other Agents; Arrangers, Etc.  None of the Lenders identified on the facing page or signature pages of this Agreement as a “syndication agent,” “documentation agent,” “collateral agent,” “arranger,” “lead arranger” or “book manager” shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such.  Without limiting the foregoing, none of the Lenders so identified shall have or be deemed to have any fiduciary relationship with any Lender.  Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.

 

ARTICLE X.
 MISCELLANEOUS

 

10.01.     Amendments, Etc.  No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by any Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrowers or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

 

(a)           waive any condition set forth in Section 4.01(a) without the written consent of each Lender;

 

(b)           extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Lender;

 

(c)           postpone any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) by any Borrower hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby;

 

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(d)           reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to this Section 10.01) any fees or other amounts payable by any Borrower hereunder or under any other Loan Document, or change the manner of computation of any financial ratio (including any change in any applicable defined term) used in determining the Applicable Rate that would result in a reduction of any interest rate on any Loan or any fee payable hereunder without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any obligation of the Borrowers to pay interest at the Default Rate;

 

(e)           change Section 2.12 or Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly affected thereby;

 

(f)            change any provision of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

 

(g)           release all or substantially all Guarantors from the Guaranty without the written consent of each Lender;

 

(h)           release all or substantially all of the Collateral without the written consent of each Lender;

 

and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the applicable L/C Issuers in addition to the Lenders required above, affect the rights or duties of such L/C Issuer under this Agreement or any Letter of Credit Application relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (iii) Section 10.06(h) may not be amended, waived or otherwise modified without the consent of each Granting Lender all or any part of whose Loans are being funded by an SPC at the time of such amendment, waiver or other modification; and (iv) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto.  Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender.

 

Notwithstanding the foregoing, the Administrative Agent and the Borrower may amend any Loan Document to correct administrative errors or omissions, or to effect administrative changes that are not adverse to any Lender.  Notwithstanding anything to the contrary contained herein, such amendment shall become effective without any further consent of any other party to such Loan Document.

 

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10.02.     Notices and Other Communications; Facsimile Copies.

 

(a)           Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

 

(i)            if to the Borrowers, the Administrative Agent or an L/C Issuer, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 10.02; and

 

(ii)           if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.

 

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient).  Notices delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).

 

(b)           Electronic Communications.  Notices and other communications to the Lenders and the L/C Issuers hereunder may be delivered or furnished by electronic communication (including e mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or any L/C Issuer pursuant to Article II if such Lender or such L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.  The Administrative Agent or the Borrowers may, in their discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement) and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefore; provided that, for both clauses (i) and (ii) above, if such notice or other communication is not sent during the normal 

 

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business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient.

 

(c)           The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrowers, any Lender, any L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrowers’ or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to the Borrowers, any Lender, any L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

 

(d)           Change of Address, Etc.  Each of the Borrowers, the Administrative Agent and the L/C Issuers may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto.  Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Borrowers, the Administrative Agent and the L/C Issuers.  In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.

 

(e)           Reliance by Administrative Agent, L/C Issuers and Lenders.  The Administrative Agent, the L/C Issuers and the Lenders shall be entitled to rely and act upon any notices (including telephonic Loan Notices) purportedly given by or on behalf of the Borrowers even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof.  The Borrowers shall indemnify the Administrative Agent, each L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrowers.  All telephonic notices to and other 

 

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telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

 

10.03.     No Waiver; Cumulative Remedies.  No failure by any Lender, any L/C Issuer or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

10.04.     Expenses; Indemnity; Damage Waiver.

 

(a)           Costs and Expenses.  The Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and out-of-pocket disbursements of one U.S. and one Canadian counsel for the Administrative Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all Extraordinary Expenses, (iii) all reasonable out-of-pocket expenses incurred by each of the L/C Issuers in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, (iv) all reasonable out-of-pocket expenses incurred by the Administrative Agent, any Lender or any L/C Issuer (including the fees, charges and disbursements of one U.S. and one Canadian counsel for the Administrative Agent, any Lender or any L/C Issuer), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.  If, for any reason (including inaccurate reporting on financial statements or a Compliance Certificate), it is determined that a higher Applicable Rate should have applied to a period than was actually applied, then the proper margin shall be applied retroactively and Borrowers shall immediately pay to Administrative Agent, for the pro rata benefit of Lenders, an amount equal to the difference between the amount of interest and fees that would have accrued using the proper margin and the amount actually paid.  All amounts payable by Borrowers under this Section shall be due on demand.

 

(b)           Indemnification by the Borrowers.  The Borrowers shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and each L/C Issuer, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of one counsel for all Indemnitees), and shall indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any 

 

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Indemnitee by any third party or by the Borrowers or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by any L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any Property owned or operated by the Borrowers or any of their Subsidiaries, or any Environmental Liability related in any way to the Borrowers or any of their Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrowers or any other Loan Party, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrowers or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrowers or such Loan Party have obtained a final and nonappealable judgment in its or their favor on such claim as determined by a court of competent jurisdiction.  This Section 10.04(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

 

(c)           Reimbursement by Lenders.  To the extent that the Borrowers for any reason fail to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), any L/C Issuer or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), such L/C Issuer or such Related Party, as the case may be, such Lender’s Pro Rata Share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or such L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or such L/C Issuer in connection with such capacity.  The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.11(d).

 

(d)           Waiver of Consequential Damages, Etc.  To the fullest extent permitted by applicable Law, no party hereto shall assert, and each party hereto hereby waives, any claim against any Indemnitee or any other party, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) 

 

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arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby unless such damages arise from the gross negligence or willful misconduct of such Indemnitee.

 

(e)           Payments.  All amounts due under this Section shall be payable not later than 10 Business Days after demand therefor.

 

(f)            Survival.  Each party’s obligations under this Section shall survive (i) the termination of the Loan Documents and the payment, satisfaction or discharge of the Obligations (other than with respect to Bank Product Debt and Swap Obligations) and (ii) resignation of the Administrative Agent and any L/C Issuer, or the replacement of any Lender.

 

(g)           Nonliability of Lenders.  The relationship between each of the Borrowers on the one hand and the Lenders, the L/C Issuers and the Administrative Agent on the other hand shall be solely that of borrower and lender.  Neither the Administrative Agent, any LC Issuer nor any Lender shall have any fiduciary responsibilities to any Borrower.  Neither the Administrative Agent, any L/C Issuer nor any Lender undertakes any responsibility to any Borrower to review or inform the Borrowers of any matter in connection with any phase of any Borrower’s business or operations.

 

10.05.     Payments Set Aside.  To the extent that any payment by or on behalf of the Borrowers is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect.

 

10.06.     Successors and Assigns.

 

(a)           Successors and Assigns Generally.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither Borrowers nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder 

 

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without the prior written consent of the Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section, or (iv) to an SPC in accordance with the provisions of subsection (h) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void).  No such assignment shall be made to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the L/C Issuers and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)           Assignments by Lenders.  Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this subsection (b), participations in L/C Obligations) at the time owing to it); provided that

 

(i)            except in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and/or the Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $5,000,000 unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower Agent otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;

 

(ii)           each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitment assigned;

 

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(iii)          any assignment of a Commitment must be approved by the Administrative Agent, each of the L/C Issuers and so long as no Event of Default has occurred and is continuing, the Borrower Agent unless the Person that is the proposed assignee is itself a Lender (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee);

 

(iv)          the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with the Assignment Fee in the amount, if any, required as set forth in Schedule 10.06; provided that the Administrative Agent may elect to waive such processing and recordation fee in the case of any assignment.  The Eligible Assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire; and

 

(v)           in connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrowers and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, each L/C Issuer and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected 

 

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parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.  Upon request, the Borrowers (at their expense) shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.

 

(c)           Register.  The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by each of the Borrowers, the Lenders and the L/C Issuers at any reasonable time and from time to time upon reasonable prior notice.  In addition, at any time that a request for a consent for a material or substantive change to the Loan Documents is pending, any Lender may request and receive from the Administrative Agent a copy of the Register.

 

(d)           Participations.  Any Lender may at any time, without the consent of, or notice to, the Borrowers or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrowers or any of the Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in L/C Obligations) owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agent, the Lenders and the L/C Issuers shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

 

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 10.01 that affects such Participant.  Subject to subsection (e) of this Section, the Borrowers agree that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the 

 

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Borrowers, enter in a register the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register

 

(e)           Limitations upon Participant Rights.  A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrowers’ prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Borrowers are notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Section 3.01(e) as though it were a Lender.

 

(f)            Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

(g)           Electronic Execution of Assignments.  The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

(h)           Special Purpose Funding Vehicles.  Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrowers (an “SPC”) the option to provide all or any part of any Loan that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a 

 

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commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof or, if it fails to do so, to make such payment to the Administrative Agent as is required under Section 2.12(b)(ii).  Each party hereto hereby agrees that (A) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of the Borrowers under this Agreement (including its obligations under Section 3.04), (B) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender would be liable, and (C) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Loan Document, remain the lender of record hereunder.  The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender.  In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the laws of the United States or any State thereof.  Notwithstanding anything to the contrary contained herein, any SPC may (1) with notice to, but without prior consent of the Borrowers and the Administrative Agent and with the payment of a processing fee in the amount of $3,500, assign all or any portion of its right to receive payment with respect to any Loan to the Granting Lender and (2) disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or Guarantee or credit or liquidity enhancement to such SPC.

 

(i)            Resignation as an L/C Issuer after Assignment.  Notwithstanding anything to the contrary contained herein, if at any time any Lender that is an L/C Issuer assigns all of its Commitment and Loans pursuant to subsection (b) above, such Lender may, upon 45 days’ notice to the Borrowers and the other Lenders, resign as an L/C Issuer. If a Lender resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of an L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).  Upon the appointment of any successor L/C Issuer, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer, and (b) such successor L/C Issuer shall issue letters of credit having the same terms (other than pricing not specified in Section 2.03(i)), including face amount as, and, in substitution for, the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to such retiring L/C Issuer to effectively assume the obligations of such retiring L/C Issuer with respect to such Letters of Credit.

 

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10.07.     Treatment of Certain Information; Confidentiality.

 

(a)           Each of the Administrative Agent, the Lenders and the L/C Issuers agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (ii) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (iii) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process, (iv) to any other party hereto, (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (B) any actual or prospective counterparty (or its advisors) to any Bank Product or Swap Contract, (vii) with the consent of the Borrowers or (viii) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, any L/C Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrowers.

 

(b)           For purposes of this Section, “Information” means all information received from any Borrower or any Subsidiary relating to any Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or any L/C Issuer on a nonconfidential basis prior to disclosure by any Borrower or any Subsidiary, provided that, in the case of information received from any Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

(c)           Each of the Administrative Agent, the Lenders and the L/C Issuers acknowledges that (i) the Information may include material non-public information concerning the Borrowers or a Subsidiary, as the case may be, (ii) it has developed compliance procedures regarding the use of material non-public information and (iii) it will handle such material non-public information in accordance with applicable Law, including Federal Securities Laws and state securities Laws.

 

10.08.     Right of Set-off.  If an Event of Default shall have occurred and be continuing, each Lender, each L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, such L/C Issuer or any such Affiliate to or for the credit or the account of the 

 

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Borrowers or any other Loan Party against any and all of the obligations of the Borrowers or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or such L/C Issuer, irrespective of whether or not such Lender or such L/C Issuer shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrowers or such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or such L/C Issuer different from the branch or office holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.14 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the L/C Issuers, and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, each L/C Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of set-off) that such Lender, such L/C Issuer or their respective Affiliates may have.  Each Lender and each L/C Issuer agrees to notify the Borrowers and the Administrative Agent promptly after any such set-off and application, provided that the failure to give such notice shall not affect the validity of such set-off and application.

 

10.09.     Interest Rate Limitation.  Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law or would result in any Lender collecting interest at a criminal rate (as such terms are construed under the Criminal Code (Canada)) (the “Maximum Rate”).  If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrowers.  In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

 

10.10.     Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

10.11.     Integration.  This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter.  In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of the Administrative Agent or the Lenders in any other Loan Document shall not be deemed a conflict with this Agreement.  Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof.

 

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10.12.     Survival of Representations and Warranties.  All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

10.13.     Severability.  If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

10.14.     Replacement of Lenders.  If any Lender requests compensation under Section 3.04, or if the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender is a Defaulting Lender, or if any Lender fails to give its consent to any amendment, waiver or action for which consent of all Lenders, each Lender affected thereby or other similar formulation was required and Required Lenders consented, or if any other circumstance exists hereunder that gives the Borrowers the right to replace a Lender as a party hereto, then the Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

 

(a)           the Borrowers shall have paid to the Administrative Agent the Assignment Fee;

 

(b)           such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts);

 

(c)           in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to 

 

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Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter; and

 

(d)           such assignment does not conflict with applicable Laws.

 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

 

10.15.     Canadian Borrower Service of Process.  The Canadian Borrower hereby irrevocably appoints Corporation Service Company its authorized agent to accept and acknowledge service of any and all process which may be served in any suit, action or proceeding of the nature referred to in this Article X and consents to process being served in any such suit, action or proceeding upon Corporation Service Company in any manner or by the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to the Company’s address referred to in Section 10.02.  The Canadian Borrower agrees that such service (a) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (b) shall, to the fullest extent permitted by law, be taken and held to be valid personal service upon and personal delivery to it.  Nothing in this Section 10.15 shall affect the right of any Lender to serve process in any manner permitted by Law or limit the right of any Lender to bring proceedings against any Loan Party in any court of any jurisdiction or jurisdictions.

 

10.16.     Governing Law.

 

(a)           THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

(b)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK CITY, OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWERS, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  THE BORROWERS, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.  THE BORROWERS, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR 

 

140

 

OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE, SUBJECT TO SUCH OTHER FORM OF NOTICE AS MAY BE REQUIRED UNDER APPLICABLE LAW WITH RESPECT TO THE CANADIAN BORROWER.

 

10.17.     Waiver of Right to Trial by Jury.  EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

10.18.     Time of the Essence.  Time is of the essence of the Loan Documents.

 

10.19.     Entire Agreement.  This Agreement and the other Loan Documents represent the final agreement among the parties and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties.  There are no unwritten oral agreements among the parties.

 

10.20.     Joint and Several Liability of Borrowers.

 

(a)           The liability of the Borrowers for all amounts due to the Administrative Agent or any Lender under this Agreement shall be joint and several regardless of which Borrower actually receives Loans or other extensions of credit hereunder or the amount of such Loans received or the manner in which the Administrative Agent or such Lender accounts for such Loans or other extensions of credit on its books and records.  Each Borrower’s Obligations with respect to Loans made to it, and each Borrower’s Obligations arising as a result of the joint and several liability of the Borrowers hereunder, with respect to Loans made to the other Borrower hereunder, shall be separate and distinct obligations, but all such Obligations shall be primary obligations of each Borrower.

 

(b)           Each Borrower’s Obligations arising as a result of the joint and several liability of the Borrowers hereunder with respect to Loans or other extensions of credit made to another Borrower hereunder shall, to the fullest extent permitted by law, be unconditional irrespective of (1) the validity or enforceability, avoidance or subordination of the Obligations of such other Borrower or of any promissory note or other document evidencing all or any part of the Obligations of such other Borrower, (2) the absence of any attempt to collect the Obligations from such other Borrower, any other guarantor, or any other security therefor, or the absence of any other action to enforce the same, (3) the 

 

141

 

waiver, consent, extension, forbearance or granting of any indulgence by the Administrative Agent or any Lender with respect to any provision of any instrument evidencing the Obligations of such other Borrower, or any part thereof, or any other agreement now or hereafter executed by such other Borrower and delivered to the Administrative Agent or any Lender, (4) the failure by the Administrative Agent or any Lender to take any steps to perfect and maintain its security interest in, or to preserve its rights to, any security or collateral for the Obligations of such other Borrower, (5) the Administrative Agent’s or any Lender’s election, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy Code, (6) any borrowing or grant of a security interest by such other Borrower, as debtor-in-possession under Section 364 of the Bankruptcy Code, (7) the disallowance of all or any portion of the Administrative Agent’s or any Lender’s claim(s) for the repayment of the Obligations of such other Borrower under Section 502 of the Bankruptcy Code, or (8) any other circumstances which might constitute a legal or equitable discharge or defense of a guarantor or of such other Borrower.  With respect to each Borrower’s Obligations arising as a result of the joint and several liability of the Borrowers hereunder with respect to Loans or other extensions of credit made to any of the other Borrowers hereunder, such Borrower waives, until the Obligations shall have been paid in full and the Agreement shall have been terminated, any right to enforce any right of subrogation or any remedy which the Administrative Agent or any Lender now or may hereafter have against any Borrower, any endorser or any guarantor of all or any part of the Obligations, and any benefit of, and any right to participate in, any security or collateral given to the Administrative Agent or any Lender to secure payment of the Obligations or any other liability of the Borrowers to the Administrative Agent or any Lender.

 

(c)           Upon any Event of Default, the Administrative Agent may proceed directly and at once, without notice, against either Borrower to collect and recover the full amount, or any portion of the Obligations, without first proceeding against the other Borrower or any other Person, or against any security or collateral for the Obligations, subject to all applicable Laws including any requirements under Section 203 of the Federal Power Act for prior authorization.  Each Borrower consents and agrees that the Administrative Agent shall be under no obligation to marshal any assets in favor of such Borrower or against or in payment of any or all of the Obligations.

 

10.21.     Contribution and Indemnification between the Borrowers.  Each Borrower is obligated to repay the Obligations as joint and several obligor under this Agreement.  To the extent that a Borrower shall, under this Agreement as a joint and several obligor, repay any of the Obligations constituting Loans made to the other Borrower hereunder or other Obligations incurred directly and primarily by the other Borrower (an “Accommodation Payment”), then the Borrower making such Accommodation Payment shall be entitled to contribution and indemnification from, and be reimbursed by, the other Borrower in an amount, for such other Borrower, equal to a fraction of such Accommodation Payment, the numerator of which fraction is such other Borrower’s “Allocable Amount” (as defined below) and the denominator of which is the sum of the Allocable Amounts of both of the Borrowers.  As of any date of determination, the “Allocable Amount” of each Borrower shall be equal to the maximum amount of liability for Accommodation Payments which could be asserted against such Borrower hereunder without (a) rendering such Borrower “insolvent” within the meaning of Section 101(32) of the 

 

142

 

Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act (the “UFTA”) or Section 271 of the New York Uniform Fraudulent Conveyance Act (the “UFCA”), (b) leaving such Borrower with unreasonably small capital or assets, within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or Sections 274 and 275 of the UFCA, or (c) leaving such Borrower unable to pay its debts as they become due within the meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA, or Section 275 of the UFCA.  All rights and claims of contributions, indemnification and reimbursement under this Section shall be subordinate in right of payment to the prior payment in full of the Obligations.  The provisions of this Section shall, to the extent expressly inconsistent with any provision in any Loan Document, supersede such inconsistent provision.

 

10.22.     Appointment of Borrower Agent as Agent for Requesting Loans and Receipts of Loans and Statements.  Each Borrower hereby designates the Canadian Borrower (“Borrower Agent”) as its representative and agent for all purposes under the Loan Documents, including requests for Loans and Letters of Credit, designation of interest rates, delivery or receipt of communications, preparation and delivery of financial reports, receipt and payment of Obligations, requests for waivers, amendments or other accommodations, actions under the Loan Documents (including in respect of compliance with covenants), and all other dealings with the Administrative Agent, any L/C Issuer or any Lender.  Borrower Agent hereby accepts such appointment.  The Administrative Agent and the Lenders shall be entitled to rely upon, and shall be fully protected in relying upon, any notice or communication (including any notice of borrowing) delivered by Borrower Agent on behalf of either Borrower.  The Administrative Agent and the Lenders may give any notice or communication with a Borrower hereunder to Borrower Agent on behalf of such Borrower.  Each of the Administrative Agent, L/C Issuers and the Lenders shall have the right, in its discretion, to deal exclusively with Borrower Agent for any or all purposes under the Loan Documents.  Each Borrower agrees that any notice, election, communication, representation, agreement or undertaking made on its behalf by Borrower Agent shall be binding upon and enforceable against it.

 

10.23.     USA Patriot Act Notice.  Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrowers that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of the Borrowers and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrowers in accordance with the Act.

 

10.24.     Binding Effect; Amendment and Restatement of Existing Credit Agreement.  This Agreement shall become effective at such time, on or after the Closing Date, that the conditions precedent set forth in Section 4.01 have been satisfied and when it shall have been executed by the Borrowers and the Administrative Agent, and the Administrative Agent shall receive copies hereof (telecopied or otherwise) which, when taken together, bear the signatures of each Lender (including the L/C Issuers), and thereafter this Agreement shall be binding upon and inure to the benefit of each Borrower, each Lender (including the L/C Issuers) and the Administrative Agent, together with their respective successors and assigns.  This Agreement amends and restates the Existing Credit Agreement and is not intended to be or operate as a novation or an accord and satisfaction of the Existing Credit Agreement or the “Obligations” evidenced or secured thereby or provided for thereunder.

 

143

 

10.25.     Judgment Currency.  If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given.  The obligation of each Borrower in respect of any such sum due from it to the Administrative Agent or any Lender hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by the Administrative Agent or such Lender, as the case may be, of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent or such Lender, as the case may be, may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency.  If the amount of the Agreement Currency so purchased is less than the sum originally due to the Administrative Agent or any Lender from any Borrower in the Agreement Currency, such Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent or such Lender, as the case may be, against such loss.  If the amount of the Agreement Currency so purchased is greater than the sum originally due to the Administrative Agent or any Lender in such currency, the Administrative Agent or such Lender, as the case may be, agrees to return the amount of any excess to such Borrower (or to any other Person who may be entitled thereto under applicable law).

 

10.26.     Lender Action.  Other than following an Event of Default under Section 8.01(f), each Lender agrees that it shall not take or institute any actions or proceedings, judicial or otherwise, for any right or remedy against any Loan Party or any other obligor under any of the Loan Documents (including the exercise of any right of setoff, rights on account of any banker’s lien or similar claim or other rights of self-help), or institute any actions or proceedings, or otherwise commence any remedial procedures, with respect to any Collateral or any other property of any such Loan Party, unless expressly provided for herein or in any other Loan Document, without the prior written consent of the Administrative Agent.  The provisions of this Section 10.26 are for the sole benefit of the Lenders and shall not afford any right to, or constitute a defense available to, any Loan Party.

 

[Signature Pages Follow]

 

144

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

	
 
    	
ATLANTIC   POWER CORPORATION, as Canadian Borrower
    
	
 
    	
ATLANTIC   POWER GENERATION, INC., as a US Borrower
    
	
 
    	
ATLANTIC   POWER TRANSMISSION, INC., as a US Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Barry E. Welch
    
	
 
    	
Name:   Barry E. Welch
    
	
 
    	
Title:   President of each of the entities listed above
    

 

Second Amended and Restated Credit Agreement

 

S-1

 

	
 
    	
BANK   OF MONTREAL, as Administrative
   Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeff Currie
    
	
 
    	
Name:
    	
Jeff   Currie
    
	
 
    	
Title:
    	
Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BANK   OF MONTREAL, as an L/C Issuer and
   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeff Currie
    
	
 
    	
Name:
    	
Jeff   Currie
    
	
 
    	
Title:
    	
Director
    

 

Second Amended and Restated Credit Agreement

 

S-2

 

	
 
    	
UNION   BANK CANADA BRANCH, as a
   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Anne Collins
    
	
 
    	
Name:
    	
Anne   Collins
    
	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
UNION   BANK, N.A., as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jonathan L. Bigelow
    
	
 
    	
Name:
    	
Jonathan   L. Bigelow
    
	
 
    	
Title:
    	
Vice   President
    

 

Second Amended and Restated Credit Agreement

 

S-3

 

	
 
    	
THE   TORONTO-DOMINION BANK, as an 
   L/C Issuer and as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Stephen O’Neil
    
	
 
    	
Name:
    	
Stephen   O’Neil
    
	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gary Nevison
    
	
 
    	
Name:
    	
Gary   Nevison
    
	
 
    	
Title:
    	
Managing   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TORONTO   DOMINION (NEW YORK) LLC, 
   as an L/C Issuer and as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Marie Fernandes
    
	
 
    	
Name:
    	
Marie   Fernandes
    
	
 
    	
Title:
    	
Authorized   Signatory
    

 

Second Amended and Restated Credit Agreement

 

S-4

 

	
 
    	
MORGAN   STANLEY BANK, N.A., as an L/C 
   Issuer and as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   John Durland
    
	
 
    	
Name:
    	
John   Durland
    
	
 
    	
Title:
    	
Authorized   Signatory
    

 

Second Amended and Restated Credit Agreement

 

S-5

 

Schedules

to

Second Amended and Restated Credit Agreement

 

These Schedules modify, supplement and form a part of the representations or warranties of Borrowers contained in that certain Second Amended and Restated Credit Agreement dated August 2, 2013 by and among Atlantic Power Corporation, a corporation continued under the laws of the Province of British Columbia (“Canadian Borrower”), Atlantic Power Generation, Inc., a Delaware corporation, (“APG”) and Atlantic Power Transmission, Inc., a Delaware corporation (“APT”), (each of APG and APT is referred to individually herein as a “US Borrower” and collectively as the “US Borrowers” and together with the Canadian Borrower, each individually a “Borrower” and collectively, the “Borrowers”), each lender from time to time party thereto (“Lenders”), each of the L/C issuers from time to time party thereto in such capacity and Bank of Montreal, as Administrative Agent, Union Bank, N.A. as Syndication Agent, The Toronto-Dominion Bank and Morgan Stanley Bank, N.A. as Co-Documentation Agents, and BMO Capital Markets, Union Bank, Canada Branch and The Toronto-Dominion Bank as Joint Lead Arrangers and Joint Bookrunners (the “Credit Agreement”).  Unless the context indicates otherwise, all capitalized terms used and not otherwise defined herein shall have the meanings given them in the Credit Agreement.  A matter disclosed in any Schedule shall be deemed disclosed for purposes of all other Schedules.  Notwithstanding any materiality qualifications in any of Borrowers’ representations or warranties in the Credit Agreement, for administrative ease, certain items have been included herein that are not considered by Borrowers to be material to Borrowers’ business, financial condition or results of operations.  The inclusion of any item herein shall not be deemed to be an admission by Borrowers that such item is material to their business, financial condition or results of operations, nor shall it be deemed an admission of any obligation or liability to any third party.  Any description of any document included in the Schedules is qualified in all respects by a reference to the full text of such document.

 

 

SCHEDULE 1.01(a)

APPLICABLE DESIGNEES

 

	
 
    	
 
    	
Applicable Designee
    
	
Lender of Record
    	
 
    	
Lender to US Borrowers
    	
 
    	
Lender to Canadian Borrower
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Bank   of Montreal

 

Address:

 
    	
 
    	
Bank   of Montreal, Chicago Branch

 

115 South LaSalle   Street,

17 West

Chicago, Illinois   60603
    	
 
    	
Bank   of Montreal

 

1   First Canadian Place

100   King Street West

Toronto,   Ontario

M5X   1A1
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Union   Bank, Canada Branch

 

Address:

 
    	
 
    	
Union   Bank, N.A.

 

445   S. Figueroa Street

Los   Angeles, CA 90071
    	
 
    	
Union   Bank, Canada Branch

 

440   2nd Avenue SW, Suite 730

Calgary,   Alberta, Canada T2P 5E9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
The   Toronto-Dominion Bank

 

Address:

 
    	
 
    	
Toronto   Dominion (New York) LLC

 

66   Wellington Street West

8th Floor, TD Tower

Toronto,   Ontario

M5K   1A2
    	
 
    	
The   Toronto-Dominion Bank

 

66   Wellington Street West

8th Floor, TD Tower

Toronto,   Ontario

M5K   1A2
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Morgan   Stanley Bank, N.A.

 

Address:

 
    	
 
    	
Morgan   Stanley Bank, N.A.

 

One   Utah Center

201   South Main Street , 5th Floor

Salt   Lake City, Utah 84111
    	
 
    	
Morgan   Stanley Bank, N.A.

 

One   Utah Center

201   South Main Street , 5th Floor

Salt   Lake City, Utah 84111
    

 

 

Schedule 1.01(b)

 

Existing Letters of Credit

 

	
LC Reference
   Number
    	
 
    	
LC Issuer
    	
 
    	
Borrower
    	
 
    	
Amount
    	
 
    	
Currency
    	
 
    	
Expiry
   Date
    	
 
    	
Beneficiary
    
	
BMCH346960OS
    	
 
    	
BMO
    	
 
    	
CANADIAN   BORROWER
    	
 
    	
10,000.00
    	
 
    	
CAD
    	
 
    	
7-Nov-13
    	
 
    	
The   Province of British Columbia
    
	
BMCH346961OS
    	
 
    	
BMO
    	
 
    	
CANADIAN   BORROWER
    	
 
    	
20,000.00
    	
 
    	
CAD
    	
 
    	
28-Feb-14
    	
 
    	
The   Province of British Columbia
    
	
BMCH348521OS
    	
 
    	
BMO
    	
 
    	
CANADIAN   BORROWER
    	
 
    	
20,000,000.00
    	
 
    	
USD
    	
 
    	
3-Nov-13
    	
 
    	
Puget   Sound Energy Inc.
    
	
BMCH358178OS
    	
 
    	
BMO
    	
 
    	
CANADIAN   BORROWER
    	
 
    	
378,131.66
    	
 
    	
USD
    	
 
    	
25-May-14
    	
 
    	
Southern   California Edison Company
    
	
BMTO353225OS
    	
 
    	
BMO
    	
 
    	
CANADIAN   BORROWER
    	
 
    	
134,500.00
    	
 
    	
CAD
    	
 
    	
7-Nov-13
    	
 
    	
HMQRPO   As Rep. Minister of Finance
    
	
BMCH222277OS.
    	
 
    	
BMO
    	
 
    	
APG
    	
 
    	
1,705,185.00
    	
 
    	
USD
    	
 
    	
23-Jul-14
    	
 
    	
Fortis
    
	
BMCH232576OS.
    	
 
    	
BMO
    	
 
    	
APG
    	
 
    	
1,600,000.00
    	
 
    	
USD
    	
 
    	
14-Oct-13
    	
 
    	
Progress   Energy Florida Inc.
    
	
BMCH310703OS.
    	
 
    	
BMO
    	
 
    	
APG
    	
 
    	
5,827,000.00
    	
 
    	
USD
    	
 
    	
20-Oct-13
    	
 
    	
Union   Bank N.A.
    
	
BMCH313085OS.
    	
 
    	
BMO
    	
 
    	
APG
    	
 
    	
4,600,000.00
    	
 
    	
USD
    	
 
    	
16-Jul-14
    	
 
    	
Consumers   Energy Company
    
	
2011121500
    	
 
    	
Morgan   Stanley
    	
 
    	
CANADIAN   BORROWER
    	
 
    	
9,100,000.00
    	
 
    	
USD
    	
 
    	
9-Dec-13
    	
 
    	
ING   Capital LLC
    
	
2013032800
    	
 
    	
Morgan   Stanley
    	
 
    	
CANADIAN   BORROWER
    	
 
    	
735,000.00
    	
 
    	
USD
    	
 
    	
28-Mar-14
    	
 
    	
Northwest   Pipeline GP
    
	
TD-S198756
    	
 
    	
TD
    	
 
    	
CANADIAN   BORROWER
    	
 
    	
37,625,000.00
    	
 
    	
USD
    	
 
    	
30-Apr-14
    	
 
    	
Public   Service Company of Colorado
    
	
TD-DAWA9B8P6
    	
 
    	
TD
    	
 
    	
CANADIAN   BORROWER
    	
 
    	
1,218,808.00
    	
 
    	
CAD
    	
 
    	
31-Aug-13
    	
 
    	
Her   Majesty the Queen in Right of Ontario as Represented by the Minister of the   Environment
    

 

 

Schedule 1.01(c)

 

Guarantors

 

	
1.
    	
 
    	
Atlantic   Cadillac Holdings, LLC
    
	
2.
    	
 
    	
Atlantic   Idaho Wind C, LLC
    
	
3.
    	
 
    	
Atlantic   Idaho Wind Holdings, LLC
    
	
4.
    	
 
    	
Atlantic   Oklahoma Wind, LLC
    
	
5.
    	
 
    	
Atlantic   Piedmont Holdings, LLC
    
	
6.
    	
 
    	
Atlantic   Power (US) GP (f/k/a CPI Power (US) GP)
    
	
7.
    	
 
    	
Atlantic   Power Corporation
    
	
8.
    	
 
    	
Atlantic   Power Generation, Inc.
    
	
9.
    	
 
    	
Atlantic   Power GP Inc. (f/k/a CPI Income Services Ltd.)
    
	
10.
    	
 
    	
Atlantic   Power Holdings, Inc.
    
	
11.
    	
 
    	
Atlantic   Power Limited Partnership (f/k/a Capital Power Income LP)
    
	
12.
    	
 
    	
Atlantic   Power Services Canada GP Inc.
    
	
13.
    	
 
    	
Atlantic   Power Services Canada LP
    
	
14.
    	
 
    	
Atlantic   Power Services, LLC
    
	
15.
    	
 
    	
Atlantic   Power Transmission, Inc.
    
	
16.
    	
 
    	
Atlantic   Renewables Holdings, LLC
    
	
17.
    	
 
    	
Atlantic   Ridgeline Holdings, LLC
    
	
18.
    	
 
    	
Atlantic   Rockland Holdings, LLC
    
	
19.
    	
 
    	
Baker   Lake Hydro LLC
    
	
20.
    	
 
    	
Bruce   Hill Wind LLC
    
	
21.
    	
 
    	
Dry   Lots Wind LLC
    
	
22.
    	
 
    	
Epsilon   Power Funding, LLC
    
	
23.
    	
 
    	
Frontier   Solar LLC
    
	
24.
    	
 
    	
Goshen   Wind Holdings LLC
    
	
25.
    	
 
    	
Great   Basin Solar Ranch LLC
    
	
26.
    	
 
    	
Harbor   Capital Holdings, LLC
    
	
27.
    	
 
    	
Hurricane   Wind LLC
    
	
28.
    	
 
    	
Lewis   Ranch Wind Project LLC
    
	
29.
    	
 
    	
Meadow   Creek Holdings LLC
    

 

 

	
30.
    	
 
    	
Meadow   Creek Intermediate Holdings LLC
    
	
31.
    	
 
    	
Monticello   Hills Wind LLC
    
	
32.
    	
 
    	
Olympia   Hydro LLC
    
	
33.
    	
 
    	
Orlando   Power Generation I LLC
    
	
34.
    	
 
    	
Orlando   Power Generation II LLC
    
	
35.
    	
 
    	
Pah   Rah Holding Company LLC
    
	
36.
    	
 
    	
Pah   Rah Project Company LLC
    
	
37.
    	
 
    	
Ridgeline   Alternative Energy LLC
    
	
38.
    	
 
    	
Ridgeline   Eastern Energy LLC
    
	
39.
    	
 
    	
Ridgeline   Energy Holdings, Inc.
    
	
40.
    	
 
    	
Ridgeline   Energy LLC
    
	
41.
    	
 
    	
Ridgeline   Energy Solar LLC
    
	
42.
    	
 
    	
Ridgeline   Holdings Junior Inc.
    
	
43.
    	
 
    	
Ridgeline   Power Services LLC
    
	
44.
    	
 
    	
Rockland   Wind Ridgeline Holdings LLC
    
	
45.
    	
 
    	
Saunders   Bros. Transportation Corporation
    
	
46.
    	
 
    	
Smokey   Avenue Wind LLC
    
	
47.
    	
 
    	
South   Mountain Wind LLC
    
	
48.
    	
 
    	
Teton   East Coast Generation LLC
    
	
49.
    	
 
    	
Teton   Operating Services, LLC
    
	
50.
    	
 
    	
Teton   Power Funding, LLC
    
	
51.
    	
 
    	
Teton   Selkirk LLC
    

 

 

Schedule 1.01(d)

 

Pledgors

 

	
 
    	
 
    	
Pledgor
    	
 
    	
Pledged Interest Issuer
    	
 
    	
Type of Interest
   Pledged
    	
 
    	
Percent of Pledged
   Interest Issuer that
   is owned and being
   pledged by Pledgor
    	
 
    	
Represented by
   Certificate No.
   (if applicable)
    
	
1.
    	
 
    	
Atlantic Idaho Wind C, LLC
    	
 
    	
RP Wind ID, LLC
    	
 
    	
Membership Interests
    	
 
    	
99%
    	
 
    	
Uncertificated
    
	
2.
    	
 
    	
Atlantic Idaho Wind Holdings, LLC
    	
 
    	
Atlantic Idaho Wind A, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
3.
    	
 
    	
Atlantic Idaho Wind Holdings, LLC
    	
 
    	
Atlantic Idaho Wind C, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
4.
    	
 
    	
Atlantic Oklahoma Wind, LLC
    	
 
    	
Canadian Hills Holding Company, LLC
    	
 
    	
Membership Interests
    	
 
    	
99%
    	
 
    	
Uncertificated
    
	
5.
    	
 
    	
Atlantic Power Corporation
    	
 
    	
Atlantic Power Generation, Inc.
    	
 
    	
Common Shares
    	
 
    	
100%
    	
 
    	
1
    
	
6.
    	
 
    	
Atlantic Power Corporation
    	
 
    	
Atlantic Power GP Inc. (f/k/a CPI Income Services   Ltd.)
    	
 
    	
Common Shares
    	
 
    	
100%
    	
 
    	
2C
    
	
7.
    	
 
    	
Atlantic Power Corporation
    	
 
    	
Atlantic Power Limited Partnership (f/k/a Capital   Power Income LP)
    	
 
    	
Limited Partnership Units
    	
 
    	
99.9961%
    	
 
    	
LP-2
    
	
8.
    	
 
    	
Atlantic Power Corporation
    	
 
    	
Atlantic Power Services Canada GP Inc.
    	
 
    	
Common Shares
    	
 
    	
100%
    	
 
    	
2
    
	
9.
    	
 
    	
Atlantic Power Corporation
    	
 
    	
Atlantic Power Services Canada LP
    	
 
    	
Limited Partner Units
    	
 
    	
100%
    	
 
    	
LP-1
    
	
10.
    	
 
    	
Atlantic Power Corporation
    	
 
    	
Atlantic Power Transmission, Inc.
    	
 
    	
Preferred Shares
    	
 
    	
100%
    	
 
    	
1-A
    
	
11.
    	
 
    	
Atlantic Power Corporation
    	
 
    	
Atlantic Power Transmission, Inc.
    	
 
    	
Common Shares
    	
 
    	
100%
    	
 
    	
1
    
	
12.
    	
 
    	
Atlantic Power Generation, Inc.
    	
 
    	
Atlantic Power Holdings, Inc.
    	
 
    	
Common Shares
    	
 
    	
100%
    	
 
    	
1
    
	
13.
    	
 
    	
Atlantic Power GP Inc. (f/k/a CPI Income Services   Ltd.)
    	
 
    	
Atlantic Power Limited Partnership (f/k/a Capital   Power Income LP)
    	
 
    	
Limited Partnership Units
    	
 
    	
0.0039%
    	
 
    	
LP-3
    
	
14.
    	
 
    	
Atlantic Power Holdings, Inc.
    	
 
    	
Atlantic Power Services, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
15.
    	
 
    	
Atlantic Power Holdings, Inc.
    	
 
    	
Epsilon Power Funding, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
16.
    	
 
    	
Atlantic Power Holdings, Inc.
    	
 
    	
Harbor Capital Holdings, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
17.
    	
 
    	
Atlantic Power Holdings, Inc.
    	
 
    	
Teton Power Funding, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
18.
    	
 
    	
Atlantic Power Services Canada GP Inc.
    	
 
    	
Atlantic Power Services Canada LP
    	
 
    	
General Partner Units
    	
 
    	
100%
    	
 
    	
GP-1
    
	
19.
    	
 
    	
Atlantic Power Transmission, Inc.
    	
 
    	
Atlantic Cadillac Holdings, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
20.
    	
 
    	
Atlantic Power Transmission, Inc.
    	
 
    	
Atlantic Idaho Wind Holdings, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
21.
    	
 
    	
Atlantic Power Transmission, Inc.
    	
 
    	
Atlantic Oklahoma Wind, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
22.
    	
 
    	
Atlantic Power Transmission, Inc.
    	
 
    	
Atlantic Piedmont Holdings, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
23.
    	
 
    	
Atlantic Power Transmission, Inc.
    	
 
    	
Atlantic Ridgeline Holdings, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
24.
    	
 
    	
Atlantic Power Transmission, Inc.
    	
 
    	
Atlantic Rockland Holdings, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
25.
    	
 
    	
Atlantic Renewables Holdings, LLC
    	
 
    	
AP Onondaga, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
26.
    	
 
    	
Baker Lake Hydro LLC
    	
 
    	
Concrete Hydro Partners, L.P.
    	
 
    	
Limited Partnership Interests
    	
 
    	
99%
    	
 
    	
Uncertificated
    

 

 

	
 
    	
 
    	
Pledgor
    	
 
    	
Pledged Interest Issuer
    	
 
    	
Type of Interest
   Pledged
    	
 
    	
Percent of Pledged
   Interest Issuer that
   is owned and being
   pledged by Pledgor
    	
 
    	
Represented by
   Certificate No.
   (if applicable)
    
	
27.
    	
 
    	
Harbor Capital Holdings, LLC
    	
 
    	
Atlantic Renewables Holdings, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
28.
    	
 
    	
Meadow Creek Holdings LLC
    	
 
    	
Meadow Creek Intermediate Holdings LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
29.
    	
 
    	
Olympia Hydro LLC
    	
 
    	
Concrete Hydro Partners, L.P.
    	
 
    	
General Partnership Interests
    	
 
    	
0.5%
    	
 
    	
Uncertificated
    
	
30.
    	
 
    	
Pah Rah Holding Company
    	
 
    	
Pah Rah Project Company LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
31.
    	
 
    	
Ridgeline Alternative Energy, LLC
    	
 
    	
Goshen Wind Holdings, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
32.
    	
 
    	
Ridgeline Alternative Energy, LLC
    	
 
    	
Meadow Creek Holdings LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
33.
    	
 
    	
Ridgeline Alternative Energy, LLC
    	
 
    	
Ridgeline Holdings Junior, Inc.
    	
 
    	
Common Shares
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
34.
    	
 
    	
Ridgeline Eastern Energy LLC
    	
 
    	
Bruce Hill Wind LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
35.
    	
 
    	
Ridgeline Eastern Energy LLC
    	
 
    	
Dry Lots Wind LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
36.
    	
 
    	
Ridgeline Eastern Energy LLC
    	
 
    	
Monticello Hills Wind LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
37.
    	
 
    	
Ridgeline Eastern Energy LLC
    	
 
    	
Saunders Bros. Transportation Corporation
    	
 
    	
Common Stock
    	
 
    	
100%
    	
 
    	
No. 1
    
	
38.
    	
 
    	
Ridgeline Eastern Energy LLC
    	
 
    	
Smokey Avenue Wind LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
39.
    	
 
    	
Ridgeline Eastern Energy LLC
    	
 
    	
South Mountain Wind LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
40.
    	
 
    	
Ridgeline Energy LLC
    	
 
    	
Frontier Solar LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
41.
    	
 
    	
Ridgeline Energy LLC
    	
 
    	
Hurricane Wind LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
42.
    	
 
    	
Ridgeline Energy LLC
    	
 
    	
Lewis Ranch Wind Project LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
43.
    	
 
    	
Ridgeline Energy LLC
    	
 
    	
Pah Rah Holding Company LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
44.
    	
 
    	
Ridgeline Energy LLC
    	
 
    	
Ridgeline Alternative Energy, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
45.
    	
 
    	
Ridgeline Energy LLC
    	
 
    	
Ridgeline Eastern Energy LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
46.
    	
 
    	
Ridgeline Energy LLC
    	
 
    	
Ridgeline Energy Solar LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
47.
    	
 
    	
Ridgeline Energy LLC
    	
 
    	
Ridgeline Power Services LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
48.
    	
 
    	
Ridgeline Energy Solar LLC
    	
 
    	
Great Basin Solar Ranch LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
49.
    	
 
    	
Teton East Coast Generation LLC
    	
 
    	
Teton Selkirk LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
50.
    	
 
    	
Teton Power Funding, LLC
    	
 
    	
Baker Lake Hydro LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
51.
    	
 
    	
Teton Power Funding, LLC
    	
 
    	
Olympia Hydro LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
52.
    	
 
    	
Teton Power Funding, LLC
    	
 
    	
Orlando Power Generation I LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
53.
    	
 
    	
Teton Power Funding, LLC
    	
 
    	
Orlando Power Generation II LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
54.
    	
 
    	
Teton Power Funding, LLC
    	
 
    	
Teton East Coast Generation LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    
	
55.
    	
 
    	
Teton Power Funding, LLC
    	
 
    	
Teton Operating Services, LLC
    	
 
    	
Membership Interests
    	
 
    	
100%
    	
 
    	
Uncertificated
    

 

2

 

Schedule 1.01(e)

 

Projects

 

Project Holding Entities:

 

	
1.
    	
 
    	
Atlantic   Cadillac Holdings, LLC
    
	
2.
    	
 
    	
Epsilon   Power Partners, LLC
    
	
3.
    	
 
    	
RP   Wind ID, LLC
    
	
4.
    	
 
    	
Atlantic   Idaho Wind A, LLC
    
	
5.
    	
 
    	
Concrete Hydro Partners, L.P.
    
	
6.
    	
 
    	
Orlando   Power Generation I, LLC
    
	
7.
    	
 
    	
Orlando   Power Generation II, LLC
    
	
8.
    	
 
    	
Atlantic   Piedmont Holdings, LLC
    
	
9.
    	
 
    	
Rollcast   Energy, Inc.
    
	
10.
    	
 
    	
Atlantic   Renewables Holdings, LLC
    
	
11.
    	
 
    	
Teton   Selkirk, LLC
    
	
12.
    	
 
    	
Atlantic   Power Preferred Equity Ltd. (f/k/a CPI Preferred Equity Ltd.)
    
	
13.
    	
 
    	
Atlantic   Power (Curtis Palmer) LLC (f/k/a CPI (CP) LLC)
    
	
14.
    	
 
    	
Manchief   Holding LLC
    
	
15.
    	
 
    	
APDC, Inc.   (f/k/a CPIDC, Inc.)
    
	
16.
    	
 
    	
Fredrickson   Power Management, Inc.
    
	
17.
    	
 
    	
Atlantic   Power Enterprises, LLC (f/k/a CPI Power Enterprises, LLC)
    
	
18.
    	
 
    	
Atlantic   Power USA Ventures LLC (f/k/a CPI USA Ventures LLC)
    
	
19.
    	
 
    	
Atlantic   Power USA Holdings LLC (f/k/a CPI USA Holdings LLC)
    
	
20.
    	
 
    	
Curtis   Palmer LLC
    
	
21.
    	
 
    	
Canadian   Hills Holding Company, LLC
    
	
22.
    	
 
    	
Meadow   Creek Intermediate Holdings LLC
    

 

Projects:

 

	
1.
    	
 
    	
Cadillac   Renewable Energy, LLC
    
	
2.
    	
 
    	
Piedmont   Green Power, LLC
    
	
3.
    	
 
    	
Atlantic   Power Limited Partnership (f/k/a Capital Power Income L.P.)
    
	
4.
    	
 
    	
Atlantic   Power (Costal Rivers) Corporation (f/k/a Coastal Rivers Power Corporation)
    
	
5.
    	
 
    	
Atlantic   Power (Williams Lake) Ltd. (f/k/a CPI Power (Williams Lake) Ltd.)
    
	
6.
    	
 
    	
Fredrickson   Power L.P.
    
	
7.
    	
 
    	
Thermo   Power & Electric LLC
    
	
8.
    	
 
    	
Manchief   Power Company LLC
    
	
9.
    	
 
    	
Applied   Energy LLC
    
	
10.
    	
 
    	
EF   Oxnard LLC
    
	
11.
    	
 
    	
Curtis/Palmer   Hydroelectric Company L.P.
    
	
12.
    	
 
    	
EF   Kenilworth LLC
    
	
13.
    	
 
    	
Morris   Cogeneration, LLC
    
	
14.
    	
 
    	
Canadian   Hills Wind, LLC
    
	
15.
    	
 
    	
Meadow   Creek Project Company LLC
    

 

 

SCHEDULE 2.01

 

COMMITMENTS
 AND PRO RATA SHARES

 

	
Lender
    	
 
    	
US Borrower
   Commitment
    	
 
    	
Canadian Borrower
   Commitment
    	
 
    	
Aggregate
   Commitment
    	
 
    	
Pro Rata Share
    	
 
    
	
Bank of Montreal
    	
 
    	
$21,875,000.00
    	
 
    	
$21,875,000.00
    	
 
    	
$43,750,000.00
    	
 
    	
29.16666667
    	
%
    
	
The Toronto-Dominion Bank
    	
 
    	
 
    	
 
    	
$21,875,000.00
    	
 
    	
$43,750,000.00
    	
 
    	
29.16666666
    	
%
    
	
Toronto Dominion (New York) LLC
    	
 
    	
$21,875,000.00
    	
 
    	
 
    	
 
    
	
Morgan Stanley Bank, N.A.
    	
 
    	
$18,750,000.00
    	
 
    	
$18,750,000.00
    	
 
    	
$37,500,000.00
    	
 
    	
25.00000000
    	
%
    
	
Union Bank Canada Branch 
    	
 
    	
$12,500,000.00
    	
 
    	
$12,500,000.00
    	
 
    	
$25,000,000.00
    	
 
    	
16.66666667
    	
%
    
	
Total
    	
 
    	
$75,000,000.00
    	
 
    	
$75,000,000.00
    	
 
    	
$150,000,000.00
    	
 
    	
100
    	
%
    

 

 

Schedule 5.06

 

Litigation

 

None.

 

 

Schedule 5.09

 

Environmental Matters

 

None.

 

 

Schedule 5.13

 

Subsidiaries

 

	
Part (a) Subsidiaries:
    
	
 
    	
 
    	
 
    
	
1.
    	
 
    	
Atlantic   Power Limited Partnership (f/k/a Capital Power Income LP)
    
	
2.
    	
 
    	
Atlantic   Power GP Inc. (f/k/a CPI Income Services, Ltd.)
    
	
3.
    	
 
    	
Atlantic   Power Preferred Equity Ltd. (f/k/a CPI Preferred Equity Ltd.)
    
	
4.
    	
 
    	
Atlantic   Power (US) GP (f/k/a CPI Power (US) GP)
    
	
5.
    	
 
    	
Curtis   Palmer, LLC
    
	
6.
    	
 
    	
Atlantic   Power Generation, Inc.
    
	
7.
    	
 
    	
Atlantic   Power Transmission, Inc.
    
	
8.
    	
 
    	
Atlantic   Power Holdings, Inc.
    
	
9.
    	
 
    	
Teton   Power Funding, LLC
    
	
10.
    	
 
    	
Harbor   Capital Holdings, LLC
    
	
11.
    	
 
    	
Epsilon   Power Funding, LLC
    
	
12.
    	
 
    	
Atlantic   Cadillac Holdings, LLC
    
	
13.
    	
 
    	
Atlantic   Idaho Wind Holdings, LLC
    
	
14.
    	
 
    	
Atlantic   Idaho Wind C, LLC
    
	
15.
    	
 
    	
Baker   Lake Hydro, LLC
    
	
16.
    	
 
    	
Olympia   Hydro, LLC
    
	
17.
    	
 
    	
Teton   East Coast Generation, LLC
    
	
18.
    	
 
    	
Atlantic   Renewables Holdings, LLC
    
	
19.
    	
 
    	
Orlando   Power Generation I, LLC
    
	
20.
    	
 
    	
Orlando   Power Generation II, LLC
    
	
21.
    	
 
    	
Atlantic   Piedmont Holdings LLC
    
	
22.
    	
 
    	
Teton   Selkirk, LLC
    
	
23.
    	
 
    	
Atlantic   Idaho Wind A, LLC
    
	
24.
    	
 
    	
RP   Wind ID, LLC
    
	
25.
    	
 
    	
Atlantic   Power Services Canada GP Inc.
    
	
26.
    	
 
    	
Atlantic   Power Services Canada LP
    
	
27.
    	
 
    	
Cadillac   Renewable Energy, LLC
    
	
28.
    	
 
    	
Epsilon   Power Partners, LLC
    
	
29.
    	
 
    	
Atlantic   Power Services, LLC
    
	
30.
    	
 
    	
Atlantic   Power Energy Services (Canada) Inc. (f/k/a CP Energy Services (Canada) Inc.)
    
	
31.
    	
 
    	
Atlantic   Power (Costal Rivers) Corporation (f/k/a Coastal Rivers Power Corporation)
    
	
32.
    	
 
    	
Atlantic   Power (Williams Lake) Ltd. (f/k/a CPI Power (Williams Lake) Ltd.)
    
	
33.
    	
 
    	
Atlantic   Power Energy Services (US) LLC (f/k/a CPI Energy Services (US) LLC)
    
	
34.
    	
 
    	
APDC, Inc.   (f/k/a CPIDC, Inc.)
    
	
35.
    	
 
    	
Frederickson   Power L.P.
    
	
36.
    	
 
    	
Manchief   Power Company LLC
    
	
37.
    	
 
    	
Morris   Cogeneration, LLC
    
	
38.
    	
 
    	
Applied   Energy LLC
    
	
39.
    	
 
    	
Curtis/Palmer   Hydroelectric Company L.P.
    
	
40.
    	
 
    	
EF   Kenilworth LLC
    

 

 

	
41.
    	
 
    	
EF   Oxnard LLC
    
	
42.
    	
 
    	
Thermo   Power & Electric LLC
    
	
43.
    	
 
    	
AP   Power Holdings Inc. (f/k/a CPI Power Holdings Inc.)
    
	
44.
    	
 
    	
Atlantic   Power USA LLC (f/k/a CPI Power USA LLC)
    
	
45.
    	
 
    	
Atlantic   Power FPLP Holdings LLC (f/k/a CPI FPLP Holdings LCC)
    
	
46.
    	
 
    	
Frederickson   Power Management Inc.
    
	
47.
    	
 
    	
Atlantic   Power Enterprises LLC (f/k/a CPI Power Enterprises LLC)
    
	
48.
    	
 
    	
Manchief   Inc.
    
	
49.
    	
 
    	
Manchief   Holding LLC
    
	
50.
    	
 
    	
AP   (Curtis Palmer) LLC (f/k/a CPI (CP) LLC)
    
	
51.
    	
 
    	
Atlantic   Power USA Ventures LLC (f/k/a CPI USA Ventures LLC)
    
	
52.
    	
 
    	
Atlantic   Power USA Holdings LLC ( f/k/a CPI USA Holdings LLC)
    
	
53.
    	
 
    	
Concrete Hydro Partners L.P.
    
	
54.
    	
 
    	
Rollcast   Energy, Inc.
    
	
55.
    	
 
    	
Piedmont   Green Power, LLC
    
	
56.
    	
 
    	
Teton   Operating Services, LLC
    
	
57.
    	
 
    	
Canadian   Hills Holding Company, LLC
    
	
58.
    	
 
    	
Canadian   Hills Wind, LLC
    
	
59.
    	
 
    	
Meadow   Creek Project Company LLC
    
	
60.
    	
 
    	
AP   Onondaga, LLC
    
	
61.
    	
 
    	
Atlantic   Oklahoma Wind, LLC
    
	
62.
    	
 
    	
Atlantic   Ridgeline Holdings, LLC
    
	
63.
    	
 
    	
Atlantic   Rockland Holdings, LLC
    
	
64.
    	
 
    	
Bruce   Hill Wind LLC
    
	
65.
    	
 
    	
Dry   Lots Wind, LLC
    
	
66.
    	
 
    	
Frontier   Solar LLC
    
	
67.
    	
 
    	
Goshen   Wind Holdings LLC
    
	
68.
    	
 
    	
Great   Basin Solar Ranch, LLC
    
	
69.
    	
 
    	
Hurricane   Wind LLC
    
	
70.
    	
 
    	
Lewis   Ranch Wind Project, LLC
    
	
71.
    	
 
    	
Meadow   Creek Holdings LLC
    
	
72.
    	
 
    	
Meadow   Creek Intermediate Holdings LLC
    
	
73.
    	
 
    	
Monticello   Hills Wind LLC
    
	
74.
    	
 
    	
Pah   Rah Holding Company LLC
    
	
75.
    	
 
    	
Pah   Rah Project Company LLC
    
	
76.
    	
 
    	
Ridgeline   Alternative Energy, LLC
    
	
77.
    	
 
    	
Ridgeline   Eastern Energy LLC
    
	
78.
    	
 
    	
Ridgeline   Energy Holdings Inc.
    
	
79.
    	
 
    	
Ridgeline   Energy LLC
    
	
80.
    	
 
    	
Ridgeline   Energy Solar, LLC
    
	
81.
    	
 
    	
Ridgeline   Holdings Junior, Inc.
    
	
82.
    	
 
    	
Ridgeline   Power Services LLC
    
	
83.
    	
 
    	
Rockland   Wind Ridgeline Holdings, LLC
    
	
84.
    	
 
    	
Saunders   Bros. Transportation Corporation
    
	
85.
    	
 
    	
Smokey   Avenue Wind, LLC
    
	
86.
    	
 
    	
South   Mountain Wind, LLC
    

 

2

 

	
87.
    	
 
    	
Atlantic   Auburndale, LLC
    
	
88.
    	
 
    	
Auburndale   GP, LLC
    
	
89.
    	
 
    	
Auburndale   LLP, LLC
    
	
90.
    	
 
    	
Badger   Power Associates LP
    
	
91.
    	
 
    	
Badger   Power Generation I, LLC
    
	
92.
    	
 
    	
Badger   Power Generation II, LLC
    
	
93.
    	
 
    	
Lake   Investment, LP
    
	
94.
    	
 
    	
Dade   Investment, LP
    
	
95.
    	
 
    	
NCP   Dade Power, LLC
    
	
96.
    	
 
    	
NCP   Gem, LLC
    
	
97.
    	
 
    	
NCP   Lake Power, LLC
    
	
98.
    	
 
    	
NCP   Pasco, LLC
    
	
99.
    	
 
    	
Teton   New Lake, LLC
    

 

Part (b)  Subsidiaries Delivering Guaranties:

 

See Schedule 1.01(c) for list of Guarantors.

 

Part (c) Other Entities Owned by Borrowers:

 

	
1.
    	
 
    	
Chambers   Cogeneration Limited Partnership
    
	
2.
    	
 
    	
Delta   Person LLC
    
	
3.
    	
 
    	
Javelin   Energy, LLC
    
	
4.
    	
 
    	
Idaho   Wind Partners 1, LLC
    
	
5.
    	
 
    	
Koma   Kulshan Associates L.P.
    
	
6.
    	
 
    	
Orlando   Cogen Limited L.P.
    
	
7.
    	
 
    	
Selkirk Cogen Partners L.P.
    
	
8.
    	
 
    	
Selkirk   Cogen Funding Corporation
    
	
9.
    	
 
    	
Rockland   Wind Holdings, LLC
    
	
10.
    	
 
    	
Rockland   Wind Farms, LLC
    
	
11.
    	
 
    	
Rockland   Wind Intermediate Holdings, LLC
    
	
12.
    	
 
    	
Goshen   Phase II Holdings, LLC
    
	
13.
    	
 
    	
Goshen   Ridge Wind Farm LLC
    
	
14.
    	
 
    	
Goshen   Phase II LLC
    
	
15.
    	
 
    	
Wolverine   Creek Goshen Interconnection LLC
    
	
16.
    	
 
    	
Delta   Person GP, LLC
    
	
17.
    	
 
    	
BHB   Power, LLC
    
	
18.
    	
 
    	
Delta   Person Limited Partnership
    
	
19.
    	
 
    	
Javelin   Holding, LLC
    
	
20.
    	
 
    	
Javelin   Gregory Remington Corp.
    
	
21.
    	
 
    	
Gregory   Holding #2, LLC
    
	
22.
    	
 
    	
Gregory   Partners, LLC
    
	
23.
    	
 
    	
Javelin   Gregory General Corp.
    
	
24.
    	
 
    	
Gregory   Holding #1, LLC
    
	
25.
    	
 
    	
Gregory   Power Partners, LP
    
	
26.
    	
 
    	
Onondaga   Renewables, LLC
    

 

3

 

Part (d) Post Acquisition Diagram:

 

See attached.

 

4

 

Schedule 7.01

 

Existing Liens

 

1.             Liens granted in connection with the Convertible Note Indenture.

 

2.             Attached are the UCC lien search results.

 

 

[UCC Lien Search Results are on file with the Administrative Agent]

 

 

Schedule 7.02(a)

 

Existing Investments

 

None.

 

 

Schedule 7.03

 

Existing Indebtedness

 

TARGET NOTES

 

Cdn$210 million Senior Unsecured Notes of Capital Power Income L.P., due 2036

US$150 million Senior Guaranteed Notes of CPI Power (US) GP, due 2015

US$75 million Senior Guaranteed Notes of CPI Power (US) GP, due 2017

US$190 million Senior Unsecured Notes of Curtis Palmer, due 2014

 

SECURED INDEBTEDNESS OF CANADIAN BORROWER AND EXISTING UNSECURED INDEBTEDNESS OF BORROWERS

 

Cdn$44.8 million Convertible Debentures of Canadian Borrower, due 2014

Cdn$67.4 million Convertible Debentures of Canadian Borrower, due 2017

Cdn$80.5 million Convertible Debentures of Canadian Borrower, due 2017

US$150 million Senior Secured Revolver of Canadian Borrower

US$130 million Convertible Debentures of Canadian due in 2019

Cdn$100 million Convertible Debentures of Canadian Borrower due in 2019

 

PROJECT LEVEL INDEBTEDNESS

 

	
Entity
    	
 
    	
Type and US$ Amount
    	
 
    
	
Epsilon   Power Partners, LLC
    	
 
    	
Term   Facility
    	
 
    	
$31,982,388
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Chambers
    	
 
    	
Term   Loan 
    	
 
    	
$6,111,394
    	
 
    
	
 
    	
 
    	
Public   Bonds
    	
 
    	
$40,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Gregory
    	
 
    	
Term   Loan
    	
 
    	
$9,691,165
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Delta   Person
    	
 
    	
Term   Loan
    	
 
    	
$7,084,365
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cadillac
    	
 
    	
Term   Loan
    	
 
    	
$35,240,720
    	
 
    
	
 
    	
 
    	
Notes
    	
 
    	
$1,390,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Idaho   Wind
    	
 
    	
Term   Loan
    	
 
    	
$47,898,887
    	
 
    
	
 
    	
 
    	
L/C   Facility
    	
 
    	
$20,500,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Piedmont
    	
 
    	
Term   Loan
    	
 
    	
$76,635,131
    	
 
    
	
 
    	
 
    	
L/C   Facility
    	
 
    	
$16,200,000
    	
 
    
	
 
    	
 
    	
Bridge   Loan
    	
 
    	
$0
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Rockland
    	
 
    	
Term   Loan
    	
 
    	
$85,739,888
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Meadow   Creek
    	
 
    	
Term   
    	
 
    	
 
    	
 
    

 

 

	
Entity
    	
 
    	
Type and US$ Amount
    	
 
    
	
 
    	
 
    	
Loan
    	
 
    	
$171,411,734
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Goshen
    	
 
    	
Term   Loan
    	
 
    	
$24,570,933
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Ridgeline   Energy
    	
 
    	
Note
    	
 
    	
$257,930
    	
 
    

 

PREFERRED STOCK OF CPI PREFERRED EQUITY LTD.

 

C$125 million Perpetual Preferreds (Series 1) of CPI Preferred Equity Ltd.

C$100 million Rate Reset Preferreds (Series 2) of CPI Preferred Equity Ltd.

 

HIGH YIELD NOTES

 

US$460 million 9% Senior Unsecured Notes of Canadian Borrower (Pending)

 

INTERCOMPANY INDEBTEDNESS

 

US$400 million 13% Unsecured Subordinated Note of Atlantic Power Holdings, Inc., payable to APG

US$400 million 13% Unsecured Subordinated Note of APG payable to Canadian Borrower

 

OTHER INDEBTEDNESS

 

A.                                    Pursuant to the Guaranty made as of August 1, 1997 (the “Orlando Guaranty”) by Air Products and Chemicals, Inc. (and subsequently assumed by Atlantic Power Holdings, Inc.) for the benefit of ABB Power Generation, Inc., (“ABB”) Teton Power Funding, LLC guarantees payment by Orlando CoGen Limited, L.P. (“Orlando CoGen”) of 50% of the Termination Amount (as defined in the Gas Turbine Hot Gas Path Protection Plan dated as of August 1, 1997 (the “Orlando Maintenance Agreement”) between ABB and Orlando CoGen) upon termination of the Orlando Maintenance Agreement by Orlando CoGen pursuant to Section 13.1 of the Orlando Maintenance Agreement.  The Termination Amount is an amount equal to the sum of (i) a cancellation fee (not to exceed $250,000) and (ii) certain outstanding fees under the Orlando Maintenance Agreement.

 

B.                                    Pursuant to the Consent and Agreement entered into as of March, 2004 by and among Orlando Power Generation I Inc., Orlando Power Generation II Inc., Orlando Power Holdings, L.L.C., Orlando CoGen (I), Inc., Orlando CoGen Limited, L.P., the Management Committee of the Partnership, Aquila, Inc., UtilCo Group Inc., Teton Power Funding, LLC, El Paso Power Operations Company, El Paso Merchant Energy, L.P. (“EPMELP”), El Paso Corporation (El Paso), Orlando Cogen Fuel, LLC, Orlando Cogen II, LLC and Northern Star Generation LLC, Teton Power Funding, LLC agreed to replace the credit support currently being provided by El Paso to BP Amoco in respect of the Gas Purchase and Sales Agreement dated December 3, 1991, between BP Amoco and 

 

2

 

EPMELP and related contracts.  Teton Power Funding LLC’s maximum liability with respect to such credit support is $2,500,000.

 

C.                                   Pursuant to a Guaranty dated as of November 17, 2004 by Atlantic Power Holdings, LLC in favor of ArcLight Energy Partners Fund I, L.P. (“ArcLight”), Atlantic Power Holdings, LLC guaranteed certain obligations of ArcLight related to Delta Person Limited Partnership and Javelin Energy, LLC.  The total potential liability of Atlantic Power Holdings, LLC under the guaranty is $7,300,000.

 

3

 

Schedule 7.08

 

Affiliate Transactions

 

1.                                      The intercompany notes referenced on Schedule 7.03.

 

2.                                      The operations and management agreement to be entered between CPI Power USA LLC and Atlantic Power Services, LLC.

 

3.                                      The operations and management agreement to be entered into between CPI Preferred Equity Ltd. and Atlantic Power Services Canada LP.

 

4.                                      The operations and management agreement to be entered into between CPILP and Atlantic Power Services Canada LP.

 

 

SCHEDULE 10.02

 

ADMINISTRATIVE AGENT’S OFFICE,
 CERTAIN ADDRESSES FOR NOTICES

 

BORROWER AGENT

 

	
Atlantic Power   Corporation
    
	
One Federal Street, 30th   Floor
    
	
Boston, MA 02110
    
	
Attn:
    	
Terry Ronan
    
	
Telephone:
    	
617-977-2400
    
	
Fax:
    	
617-977-2410
    
	
Email:
    	
tronan@atlanticpower.com
    
	
 
    
	
Copy to:
    
	
Atlantic Power   Corporation
    
	
One Federal Street, 30th   Floor
    
	
Boston, MA 02110
    
	
Attn:
    	
Jeffrey S. Levy
    
	
Telephone:
    	
617-977-2400
    
	
Fax:
    	
617-977-2410
    
	
Email:
    	
Legal@atlanticpower.com
    
	
 
    	
 
    
	
ADMINISTRATIVE AGENT:
    
	
 
    
	
Administrative Agent’s Office
    
	
(for payments and Requests for   Credit Extensions for US Borrowers ):
    
	
 
    
	
Bank of Montreal, Chicago Branch
    
	
Agency Services
    
	
115 South LaSalle Street, 17 West
    
	
Chicago, Illinois 60603
    
	
Attention:  Terri Mikula
    
	
 
    
	
Fax: (312) 461-3458
    
	
Email:   terri.mikula9@bmo.com
    
	
 
    
	
Administrative Agent’s Office
    
	
(for payments and Requests for   Credit Extensions for Canadian Borrowers ):
    
	
 
    
	
Bank of Montreal
    
	
Agent Bank Services
    
	
234 Simcoe Street, 3rd Floor
    
	
Toronto, Ontario, M5T 1T4
    
	
Attention:  Manager, Agent Bank Services
    
	
Fax: (416) 598-6218
    

 

 

	
L/C ISSUER:
    
	
 
    
	
(for US Borrowers):
    
	
 
    
	
Bank of Montreal, Chicago Branch
    
	
Agency Services
    
	
115 South LaSalle Street, 17 West
    
	
Chicago, Illinois 60603
    
	
Attention:  Terri Mikula
    
	
 
    
	
Fax: (312) 461-3458
    
	
Email:   terri.mikula9@bmo.com
    
	
 
    
	
(for Canadian Borrowers):
    
	
 
    
	
Bank of Montreal
    
	
Agent Bank Services
    
	
234 Simcoe Street, 3rd Floor
    
	
Toronto, Ontario, M5T 1T4
    
	
Attention:    Manager, Agent Bank Services
    
	
Fax: (416) 598-6218
    

 

2

 

	
LENDERS:
    
	
 
    
	
BANK OF MONTREAL, as a Lender
    
	
 
    
	
For Requests for Credit   Extensions for US Borrowers:
    
	
 
    
	
Bank of Montreal, Chicago Branch
    
	
Agency Services
    
	
115 South LaSalle Street, 17 West
    
	
Chicago, Illinois 60603
    
	
Attention:  Terri Mikula
    
	
 
    
	
Fax: (312) 461-3458
    
	
Email:   terri.mikula9@bmo.com
    
	
 
    
	
For Requests for Credit   Extensions for Canadian Borrowers:
    
	
 
    
	
Bank of Montreal
    
	
Agent Bank Services
    
	
234 Simcoe Street, 3rd Floor
    
	
Toronto, Ontario, M5T 1T4
    
	
Attention:    Manager, Agent Bank Services
    
	
Fax: (416) 598-6218
    
	
 
    
	
Notices (other than Requests   for Credit Extensions):
    
	
 
    
	
BMO Capital Markets
    
	
100 King Street West, 4th Floor
    
	
M5X-1A1 Toronto, Ontario, Canada
    
	
Attention:
    	
Jeffrey   Currie
    
	
Telephone:
    	
416-359-6869
    
	
Fax:
    	
416-359-7796
    
	
Email:
    	
JeffreyD.Currie@bmo.com
    
	
 
    	
 
    
	
UNION   BANK, CANADA BRANCH
    
	
 
    
	
For Request for Credit   Extensions for US Borrowers:
    
	
 
    	
 
    
	
Union Bank, N.A.
    
	
Los Angeles, CA
    
	
Attention:
    	
Gena Robles
    
	
Telephone:
    	
323-720-2522
    
	
Fax:
    	
323-724-6198
    
	
Email:
    	
gena.robles@unionbank.com
    

 

3

 

	
Attention:
    	
Maria Suncin
    
	
Telephone:
    	
323-720-2870
    
	
Fax:
    	
323-724-6198
    
	
Email:
    	
maria.suncin@unionbank.com
    
	
 
    	
 
    
	
For Requests for Credit   Extensions for Canadian Borrowers:
    
	
 
    	
 
    
	
Union Bank, Canada Branch
    
	
San Francisco, CA
    
	
James Clark,   Operations
    
	
 
    	
 
    
	
Attention:
    	
James Clark
    
	
Telephone:
    	
415 773 2560
    
	
Fax:
    	
403 770 8868
    
	
Email:
    	
james.clark@unionbank.com
    
	
 
    	
 
    
	
Attention:
    	
Rebecca Sarmiento, Operations
    
	
Telephone:
    	
415-765-2549
    
	
Fax:
    	
403-770-8868
    
	
Email:
    	
rebecca.sarmiento@unionbank.com
    
	
 
    	
 
    
	
Notices (other than Requests   for Credit Extensions):
    
	
 
    
	
Union Bank, Canada Branch
    
	
445 S. Figueroa Street
    
	
Los Angeles, CA 90071
    
	
Attention:
    	
Carmelo   Restifo, Vice President
    
	
Telephone:
    	
213-236-6517
    
	
Email:
    	
carmelo.restifo@unionbank.com
    
	
 
    	
 
    
	
Attention:
    	
Anne   Collins, Vice President
    
	
Telephone:
    	
403   233 4803
    
	
Email:
    	
anne.collins@unionbank.com
    
	
 
    	
 
    
	
THE TORONTO-DOMINION BANK
    
	
 
    
	
For Requests for Credit   Extensions:
    
	
 
    
	
The Toronto-Dominion Bank
    
	
77 King Street, W
    
	
18th Floor Royal Trust Tower
    
	
Toronto, Ontario M5K 1A2
    

 

4

 

	
Attention:
    	
Tara   Harripaul, Analyst
    
	
Telephone:
    	
416-982-7744
    
	
Fax:
    	
416-983-1708
    
	
Email:
    	
tara.boodram-harripaul@tdsecurities.com
    
	
 
    	
 
    
	
Attention:
    	
Maria   Castillo
    
	
Telephone:
    	
416-307-0529
    
	
 
    
	
Notices (other than Requests   for Credit Extensions):
    
	
 
    
	
The Toronto-Dominion Bank
    
	
66 Wellington Street, W
    
	
8th Floor TD Tower
    
	
Toronto, Ontario M5K 1A2
    
	
Attention:
    	
Rahim Kabani
    
	
Telephone:
    	
416-982-7786
    
	
Fax: 416-944-5164
    
	
Email: rahim.kabani@tdsecurities.com
    

 

5

 

	
MORGAN   STANLEY BANK, N.A.
    
	
 
    	
 
    
	
For Requests for Credit   Extensions:
    
	
 
    	
 
    
	
Morgan Stanley Bank, N.A.
    
	
1300 Thames Street
    
	
Baltimore, MD 21213
    
	
Attention:
    	
Letter   of Credit Team
    
	
Telephone:
    	
443-627-4555
    
	
Fax:
    	
212-507-5010
    
	
Emails:
    	
msb.loc@ms.com
    
	
 
    	
 
    
	
Notices (other than Requests   for Credit Extensions):
    
	
 
    	
 
    
	
Morgan Stanley Bank, N.A.
    
	
One Utah Center
    
	
201 South Main Street, 5th Floor
    
	
Salt Lake City, Utah 84111
    
	
Attention:
    	
Carrie   D. Johnson
    
	
Telephone:
    	
801-236-3655
    
	
Fax:
    	
718-233-0967
    
	
Email:
    	
docs4loans@ms.com
    
	
 
    	
 
    
	
1585 Broadway Avenue, 4th Floor
    
	
New York, NY 10036
    
	
Attention:
    	
Michael   Monk
    
	
Telephone:
    	
212-761-2962
    
	
Fax:
    	
212-507-7690
    
	
Email:
    	
Michael.Monk@morganstanley.com
    

 

6

 

SCHEDULE 10.06

 

PROCESSING AND RECORDATION FEES

 

The Administrative Agent will charge a processing and recordation fee (an “Assignment Fee”) in the amount of $3,500 for each assignment (unless otherwise waived); provided, however, that in the event of two or more concurrent assignments to members of the same Assignee Group (which may be effected by a suballocation of an assigned amount among members of such Assignee Group) or two or more concurrent assignments by members of the same Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group), the Assignment Fee will be $3,500 plus the amount set forth below:

 

	
Transaction:
    	
 
    	
Assignment Fee:
    	
 
    
	
First two concurrent assignments or suballocations   to members of an Assignee Group (or from members of an Assignee Group, as   applicable)
    	
 
    	
-0-
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Each additional concurrent assignment or   suballocation to a member of such Assignee Group (or from a member of such   Assignee Group, as applicable)
    	
 
    	
$500
    	
 
    

 

 

EXHIBIT A-1

 

FORM OF LOAN NOTICE

 

Date:                        ,       

 

To:                             Bank of Montreal, as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Second Amended and Restated Credit Agreement, dated as of August 2, 2013 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement”), among Atlantic Power Corporation, a corporation continued under the laws of the Province of British Columbia, Canada (the “Canadian Borrower”), Atlantic Power Generation, Inc., a Delaware corporation, and Atlantic Power Transmission, Inc., a Delaware corporation (collectively, the “Borrowers”), the Lenders from time to time party thereto, the L/C Issuers from time to time party thereto, and Bank of Montreal, as Administrative Agent and an L/C Issuer.  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement.

 

The undersigned hereby requests a Borrowing of Loans:

 

1.                                      By                             [specify Borrower].

 

2.                                      On                             (a Business Day).

 

3.                                      In the amount of $                                .

 

4.                                      Such loan shall be denominated in the following currency:                                         .

[US Dollar Denominated Loan made as a Eurocurrency Rate Loan to any of the Borrowers, or US Prime Rate Loan to any of the US Borrowers or US Base Rate Loan, Cdn. Dollar denominated Loan made as a Bankers’ Acceptance or Cdn. Prime Rate Loan to the Canadian Borrower]

 

5.                                      For Eurocurrency Rate Loans and Bankers’ Acceptances:  with an Interest Period of              months.

 

 

	
ATLANTIC   POWER CORPORATION, as Borrower Agent
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

 

EXHIBIT A-2

 

FORM OF NOTICE OF CONVERSION/CONTINUATION

 

Date:                        ,        

 

To:                             Bank of Montreal, as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Second Amended and Restated Credit Agreement, dated as of August 2, 2013 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement”), among Atlantic Power Corporation, a corporation continued under the laws of the Province of British Columbia, Canada (the “Canadian Borrower”), Atlantic Power Generation, Inc., a Delaware corporation, and Atlantic Power Transmission, Inc., a Delaware corporation (collectively, the “Borrowers”), the Lenders from time to time party thereto, the L/C Issuers from time to time party thereto, and Bank of Montreal, as Administrative Agent and an L/C Issuer.  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement.

 

The undersigned hereby request (select one):

 

	
o A conversion   of Loans
    	
 
    	
o A   continuation of Loans
    

 

1.                                      By                             [specify Borrower].  The proposed [conversion] [continuation] relates to the Borrowing of [Eurocurrency Rate Loans with an Interest Period ending on                        ,         ] [Bankers’ Acceptance with an Interest Period ending on                        ,         ] [US Base Rate Loan] [US Prime Rate Loan] [Cdn. Prime Rate Loan] [Base Rate Loan in [insert currency]] originally made on                        , 20     (the “Outstanding Borrowing”) in the principal amount of                        .

 

2.                                      On                             (a Business Day).

 

3.                                      In the amount of $                                .

 

4.                                      The Outstanding Borrowing shall be [continued as a Borrowing of [Eurocurrency Rate Loan] [Bankers’ Acceptance] with an Interest Period of          months] [converted into a Borrowing of [US Base Rate Loan] [US Prime Rate Loan] [Cdn. Prime Rate Loan] [[Eurocurrency Rate Loan] [Bankers’ Acceptance] with an Interest Period of          months] [Base Rate Loan in [insert currency]].

 

 

	
ATLANTIC   POWER CORPORATION,
    	
 
    
	
as   Borrower Agent
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

 

EXHIBIT B

 

FORM OF NOTE

 

 

FOR VALUE RECEIVED, the undersigned (each, a “Borrower”), hereby jointly and severally promise to pay to [                                          ] or registered assigns (the “Lender”), in accordance with the provisions of the Credit Agreement (as hereinafter defined), the principal amount of each Loan from time to time made by the Lender to one or more of the Borrowers under that certain Second Amended and Restated Credit Agreement, dated as of August 2, 2013 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement;” the terms defined therein being used herein as therein defined), among the undersigned, the Lenders from time to time party thereto, the L/C Issuers from time to time party thereto, and Bank of Montreal, as Administrative Agent and an L/C Issuer.

 

The Borrowers each hereby promise to pay interest on the unpaid principal amount of each Loan from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Credit Agreement.  All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in US Dollars with respect to US Dollar Loans and Cdn. Dollars with respect to Cdn. Dollar Loans in immediately available funds at the Administrative Agent’s Office.  If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Credit Agreement.

 

This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein.  This Note is also entitled to the benefits of the Guaranty.  Upon the occurrence and continuation of one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Credit Agreement.  Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.

 

Each Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.

 

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PROVISIONS THEREOF.

 

[This Note amends and restates the promissory note given by the Borrowers in favor of the Lender dated [                    ].  It is expressly intended, understood, and agreed that this Note shall replace the Prior Note as evidence of all indebtedness to the Lender heretofore represented

 

B-1

 

by the Prior Note, as of the date hereof, shall be considered outstanding hereunder from and after the date hereof and shall not be considered paid (nor shall the undersigned’s obligation to pay the same be considered discharged or satisfied) as a result of the issuance of this Note.]

 

[Signature Page Follows]

 

B-2

 

	
 
    	
ATLANTIC   POWER CORPORATION
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
ATLANTIC   POWER GENERATION, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
ATLANTIC   POWER TRANSMISSION, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

B-3

 

LOANS AND PAYMENTS WITH RESPECT THERETO

 

	
Borrower
    	
 
    	
Date
    	
 
    	
Type of
   Loan
   Made
    	
 
    	
Amount of
   Loan
   Made
    	
 
    	
End of
   Interest
   Period
    	
 
    	
Amount of
   Principal
   or Interest
   Paid This
   Date
    	
 
    	
Outstanding
   Principal
   Balance
   This Date
    	
 
    	
Notation
   Made By
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

B-4

 

EXHIBIT C

 

FORM OF COMPLIANCE CERTIFICATE

 

Financial Statement Date:                                              ,

 

To:                             Bank of Montreal, as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Second Amended and Restated Credit Agreement, dated as of August 2, 2013 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement;” the terms defined therein being used herein as therein defined), among Atlantic Power Corporation, a corporation continued under the laws of the Province of British Columbia, Canada (the “Canadian Borrower”), Atlantic Power Generation, Inc., a Delaware corporation, and Atlantic Power Transmission, Inc., a Delaware corporation (collectively, the “Borrowers”), the Lenders from time to time party thereto, the L/C Issuers from time to time party thereto, and Bank of Montreal, as Administrative Agent and an L/C Issuer.

 

The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the                                                     of the Canadian Borrower, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Borrowers, and that:

 

[Use following paragraph 1 for fiscal year-end financial statements]

 

1.                                      Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 6.01(a)(i) of the Credit Agreement for the Canadian Borrower and its consolidated Subsidiaries for the fiscal year of the Canadian Borrower ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section.

 

[Use following paragraph 1 for fiscal quarter-end financial statements]

 

1.                                      Attached hereto as Schedule 1 are the unaudited financial statements required by Section 6.01(b) of the Credit Agreement for the Canadian Borrower and its consolidated Subsidiaries for the fiscal quarter of the Canadian Borrower ended as of the above date.  Such financial statements fairly present the financial condition, results of operations and cash flows of the Canadian Borrower and its consolidated Subsidiaries in accordance with US GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.

 

2.                                      The undersigned has reviewed and is familiar with the terms of the Credit Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of the Borrowers during the accounting period covered by the attached financial statements.

 

C-1

 

3.                                      A review of the activities of the Borrowers during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Borrowers performed and observed all its obligations under the Loan Documents, and

 

[select one:]

 

[to the best knowledge of the undersigned during such fiscal period, the Borrowers performed and observed each covenant and condition of the Loan Documents applicable to them.]

 

—or—

 

[the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]

 

4.                                      The representations and warranties of the Borrowers contained in Article V and of the Borrowers and each other Loan Party contained in any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date; provided, however, that any representation or warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects, and except that for purposes of this Compliance Certificate, the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Credit Agreement, including the statements in connection with which this Compliance Certificate is delivered.

 

5.                                      The calculation of (a) the Total Leverage Ratio set forth on Schedule 2 attached hereto is true and accurate on and as of the date of this Certificate and reflects a Total Leverage Ratio for the fiscal quarter ending                          , 20[    ] of          to 1.00 and (b) the Interest Coverage Ratio set forth on Schedule 2 attached hereto is true and accurate on and as of the date of this Certificate and reflects an Interest Coverage Ratio for the fiscal quarter ending                          , 20[    ] of          to 1.00.

 

6.                                      The total amount of all Guarantees from the Borrowers or any Subsidiary of obligations to make equity contributions in Project Development Companies and not included in the calculation of Consolidated Total Net Debt is $                  .

 

C-2

 

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of                             ,                 .

 

C-3

 

SCHEDULE 1
 to the Compliance Certificate

 

[Financial Statements Attached]

 

Sch 2-1

 

For the Quarter/Year ended                                       (“Statement Date”)

 

SCHEDULE 2
 to the Compliance Certificate
 ($ in 000’s)

 

I.                                          Section 7.11(a) — Interest Coverage Ratio.

 

	
A.                                      Consolidated   EBITDA for the Canadian Borrower and its Subsidiaries on a consolidated basis   for four consecutive fiscal quarters ending on above date (“Subject Period”):
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Consolidated   Net Income for Subject Period:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
Plus, without duplication,   the following, to the extent deducted in calculating such Consolidated Net   Income (and in each case, with respect to any Subsidiary that is not a   Wholly-Owned Subsidiary, in an amount reflecting the pro rata percentage of   the Capital Stock owned by the Borrowers or their Subsidiaries in such   Subsidiary):
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
1.                                        Consolidated   Interest Expense for Subject Period, amortization of deferred financing fees   and original issue discount:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
2.                                        Provision for   taxes based on income, profits or capital gains of the Canadian Borrower and   its Subsidiaries, including federal, state, local and foreign income taxes,   franchise taxes and foreign withholding taxes paid or accrued by the Canadian   Borrower and its Subsidiaries for Subject Period, including penalties and   interest related to such taxes or arising from any tax examinations:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
3.                                        Depreciation   and amortization expenses for Subject Period:
    	
 
    	
$
    

 

Sch 2-1

 

	
4.                                        any net   after-tax (A) extraordinary or (B) nonrecurring gains or losses or   income or expenses (less all fees and expenses relating thereto) including,   without limitation, any severance expenses, and fees, expenses or charges   related to any offering of any equity interests of the Canadian Borrower, any   Investment, any Acquisition or Indebtedness permitted to be incurred   hereunder or refinancings thereof (in each case, whether or not successful),   including any such fees, expenses or charges related to the Transactions for   Subject Period:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
5.                                        Any net loss   from disposed, abandoned or discontinued operations, and assets for sale to   the extent such loss is a non-cash loss for Subject Period:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
6.                                        All non-cash   losses or expenses included or deducted in calculating net income (or loss)   for Subject Period, including, without limitation, any non-cash loss or   expense associated with employee incentive agreements, any non-cash loss or   expense due to the application of FAS No. 106 regarding post-retirement   benefits, FAS No. 133 regarding hedging activity, FAS No. 142   regarding impairment of goodwill, FAS No. 150 regarding accounting for   financial instruments with debt and equity characteristics and non-cash   expenses deducted as a result of any grant of equity interests to employees,   officers or directors, but excluding any non-cash loss or expense (A) that   is an accrual of a reserve for a cash expenditure or payment to be made, or   anticipated to be made, in a future period or (B) relating to a   write-down, write-off or reserve with respect to Accounts and Inventory (as   such terms are defined in the UCC):
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
7.                                        Reasonable   and customary documented fees, expenses and other costs related to any   Acquisition consented to by the Required Lenders and otherwise permitted   under the terms of this Agreement (whether or not successful) after the   Closing Date:
    	
 
    	
$
    

 

Sch 2-2

 

	
Minus:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
7.                                        Non-cash   gains for Subject Period (to the extent increasing Consolidated Net Income):
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
Consolidated   EBITDA (Consolidated Net Income + Lines I.A.1 + 2 + 3 + 4 + 5 + 6 – 7):
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
B.                                      Consolidated   Interest Expense for the Canadian Borrower and its Subsidiaries on a   consolidated basis for Subject Period:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
C.                                      Interest   Coverage Ratio
   ((Line II.A.)  ̧ (Line II.B.)):
    	
 
    	
              to 1.00
    
	
 
    	
 
    	
 
    
	
[Minimum permitted:  1.60:1.00]
    

 

II.                                     Section 7.11(b) — Total Leverage Ratio.

 

	
A.                                      Consolidated   Total Net Debt of the Canadian Borrower and its Subsidiaries that are   consolidated entities of the Canadian Borrower in accordance with GAAP for   four consecutive fiscal quarters ending on above date (“Subject Period”)   in an amount that would be reflected on a balance sheet prepared as of such   date on a consolidated basis in accordance with GAAP (but excluding (x) the   effects of any discounting of Indebtedness resulting from the application of   purchase accounting in connection with the Transactions or any Permitted   Acquisition and (y) the amount of any Non-Recourse Project Finance   Indebtedness of any Subsidiary that is not a Wholly-Owned Subsidiary that is   in excess of the pro rata percentage of the Capital Stock owned by the   Borrowers or their Subsidiaries in such Subsidiary, in each case, to the   extent such Indebtedness would be reflected on a balance sheet of the   Borrowers prepared as of such date on a consolidated basis in accordance with   GAAP), consisting of the sum of:
    	
 
    	
 
    

 

Sch 2-3

 

	
1.                                        Indebtedness   for Borrowed Money as of the date of determination:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
2.                                        The   capitalized amount of any Capitalized Lease Obligation for Subject Period as   of the date of determination:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
3.                                        The   capitalized amount of the remaining lease payments under the relevant   Synthetic Lease Obligation for Subject Period as of the date of   determination:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
4.                                        Debt   obligations evidenced by promissory notes or similar instruments as of the   date of determination:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
Minus:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
5.                                        The aggregate   amount of unrestricted cash and Cash Equivalents of the Canadian Borrower and   its Subsidiaries that would be reflected on a balance sheet of the Canadian   Borrower and its Subsidiaries as of such date (in each case free and clear of   all Liens, other than nonconsensual Liens permitted by Section 7.01   of the Credit Agreement) to the extent such cash or Cash Equivalents is held   in a deposit account or securities account in which the Canadian Borrower or   its Subsidiaries have granted a first priority security interest to the   Collateral Agent or Administrative Agent, as applicable, for the benefit of   the Secured Parties pursuant to a Collateral Document (for the avoidance of doubt, any unrestricted cash and Cash   Equivalents maintained by the Borrowers in satisfaction of Section 6.16   of the Credit Agreement shall be deemed unrestricted cash and Cash   Equivalents for purposes of this clause):
    	
 
    	
$
    

 

Sch 2-4

 

	
6.                                        Non-Recourse   Project Finance Indebtedness of a Subsidiary that is a Project Development   Company and that has not yet achieved Commercial Operations, such Project   Finance Indebtedness provided further, that at no time   shall more than $350,000,000 of such Project Finance Indebtedness be excluded   from the determination of the amount of Consolidated Total Net Debt
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
Consolidated   Total Net Debt   (Lines II.A.1 + 2 + 3 + 4 – 5-6):
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
B.                                      Consolidated   EBITDA for the Canadian Borrower and its Subsidiaries on a consolidated basis   for the Subject Period (and in each case, with respect to any Subsidiary that   is not a Wholly-Owned Subsidiary, in an amount reflecting the pro rata   percentage of the Capital Stock owned by the Borrowers or their Subsidiaries   in such Subsidiary):
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Consolidated   Net Income for Subject Period:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
Plus, without duplication,   the following, to the extent deducted in calculating such Consolidated Net   Income:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
1.                                        Consolidated   Interest Expense for Subject Period, amortization of deferred financing fees   and original issue discount:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
2.                                        Provision for   taxes based on income, profits or capital gains of the Canadian Borrower and   its Subsidiaries, including federal, state, local and foreign income taxes,   franchise taxes and foreign withholding taxes paid or accrued by the Canadian   Borrower and its Subsidiaries for Subject Period, including penalties and   interest related to such taxes or arising from any tax examinations:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
3.                                        Depreciation   and amortization expenses for Subject Period:
    	
 
    	
$
    

 

Sch 2-5

 

	
4.                                        any net   after-tax (A) extraordinary or (B) nonrecurring gains or losses or   income or expenses (less all fees and expenses relating thereto) including,   without limitation, any severance expenses, and fees, expenses or charges   related to any offering of any equity interests of the Canadian Borrower, any   Investment, any Acquisition or Indebtedness permitted to be incurred   hereunder or refinancings thereof (in each case, whether or not successful),   including any such fees, expenses or charges related to the Transactions for   Subject Period:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
5.                                        Any net loss   from disposed, abandoned or discontinued operations, and assets for sale to   the extent such loss is a non-cash loss for Subject Period:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
6.                                        All non-cash   losses or expenses included or deducted in calculating net income (or loss)   for Subject Period, including, without limitation, any non-cash loss or   expense associated with employee incentive agreements, any non-cash loss or   expense due to the application of FAS No. 106 regarding post-retirement   benefits, FAS No. 133 regarding hedging activity, FAS No. 142   regarding impairment of goodwill, FAS No. 150 regarding accounting for   financial instruments with debt and equity characteristics and non-cash   expenses deducted as a result of any grant of equity interests to employees,   officers or directors, but excluding any non-cash loss or expense (A) that   is an accrual of a reserve for a cash expenditure or payment to be made, or   anticipated to be made, in a future period or (B) relating to a   write-down, write-off or reserve with respect to Accounts and Inventory (as   such terms are defined in the UCC):
    	
 
    	
$
    

 

Sch 2-6

 

	
7.                                        Reasonable   and customary documented fees, expenses and other costs related to any   Acquisition consented to by the Required Lenders and otherwise permitted   under the terms of this Agreement (whether or not successful) after the   Closing Date:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
8.                                        Plus, if   applicable, Acceptable Project Development Company Projections for each of   the four fiscal quarters ending immediately prior to achieving Commercial   Operations for a Subsidiary that was a Project Development Company that has   achieved Commercial Operations within the Subject Period:
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
Minus:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
8.                                        Non-cash   gains for Subject Period (to the extent increasing Consolidated Net Income):
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
Consolidated   EBITDA (Consolidated Net Income + Lines II.B.1 + 2 + 3 + 4 + 5 + 6 +7-8):
    	
 
    	
$
    
	
 
    	
 
    	
 
    
	
C.                                      Total
    ((Line II.A.)  ̧ (II.B)):
    	
 
    	
              to 1.00
    
	
 
    	
 
    	
 
    
	
[Maximum permitted:  as set forth in Section 7.11]
    

 

Sch 2-7

 

EXHIBIT D

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption Agreement (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [the][each]  Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each]  Assignee identified in item 2 below ([the][each, an] “Assignee”).  [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees]  hereunder are several and not joint.]  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below (including, without limitation, the Letters of Credit included in such facilities ) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”).  Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.

 

1.                                      Assignor[s]:                                                                                                                    

 

2.                                      Assignee[s]:                                                                                                                    [for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]

 

3.                                      Borrowers:                                     Atlantic Power Corporation, Atlantic Power Generation, Inc., and Atlantic Power Transmission, Inc.

 

D-1

 

4.                                      Administrative Agent:  Bank of Montreal, as the administrative agent under the Credit Agreement

 

5.                                      Credit Agreement:  Second Amended and Restated Credit Agreement, dated as of August 2, 2013 (as amended, modified or supplemented from time to time), among Atlantic Power Corporation, Atlantic Power Generation, Inc., and Atlantic Power Transmission, Inc., as Borrowers, the Lenders from time to time party thereto, the L/C Issuers from time to time party thereto, and Bank of Montreal, as Administrative Agent and an L/C Issuer.

 

6.                                      Assigned Interest[s]:

 

	
Facility Assigned
    	
 
    	
Aggregate
   Amount of
   Commitment/Loan
   for all Lenders*
    	
 
    	
Amount of
   Commitment/Loans
   Assigned*
    	
 
    	
Percentage
   Assigned of
   Commitment/Loans
    	
 
    	
CUSIP
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    

 

[7.                                  Trade Date:                                      ]

 

Effective Date:                                     , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

	
 
    	
ASSIGNOR
    
	
 
    	
[NAME   OF ASSIGNOR]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ASSIGNEE
    
	
 
    	
[NAME   OF ASSIGNEE]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

*       Amount to be adjusted by the counterparties to take in account any payments or prepayments made between the Trade Date and the Effective Date.

 

D-2

 

	
Consented to and Accepted:
    	
 
    
	
 
    	
 
    
	
BANK OF MONTREAL, as
    	
 
    
	
Administrative Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Consented to:
    	
 
    
	
ATLANTIC POWER CORPORATION,
    	
 
    
	
as Borrower Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

D-3

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

 

[                                      ]

 

STANDARD TERMS AND CONDITIONS FOR

 

ASSIGNMENT AND ASSUMPTION

 

1.                                      Representations and Warranties.

 

1.1.                            Assignor.  [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][[the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of each of the Borrowers, any of their Subsidiaries or any Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by any Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

 

1.2.                            Assignee.  [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 10.06(b)(iii), (iv) and (v) of the Credit Agreement (subject to such consents, if any, as may be required under Section 10.06(b)(iii) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that it will (i) independently and without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not

 

D-4

 

taking action under the Loan Documents, (ii) appoint and authorize each of the Administrative Agent and Collateral Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement and the other Loan Documents as are delegated to or otherwise conferred upon the Administrative Agent or Collateral Agent, as the case may be, by the terms thereof, together with such powers as are reasonably incidental thereto, and (iii) perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

 

2.                                      Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date.

 

3.                                      Effect of Assignment.  Upon the delivery of a fully executed original hereof to the Administrative Agent, as of the Effective Date, (i) [the][each] Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Assumption, have the rights and obligations of a Lender thereunder and under the other Credit Documents and (ii) [the][each] Assignor shall, to the extent provided in this Assignment and Assumption, relinquish its rights and be released from its obligations under the Credit Agreement and the other Loan Documents.

 

4.                                      General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York without giving effect to the conflict of laws provisions thereof..

 

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EXHIBIT E

 

FORM OF JOINDER AGREEMENT

 

THIS JOINDER IN GUARANTY (this “Joinder”) is executed as of                     , 20     by                                         , a                      [corporation/limited liability company/partnership] (“Joining Party”), and delivered to BANK OF MONTREAL, as administrative agent (in such capacity, the “Administrative Agent”), for the benefit of the Lenders (as defined below).  Except as otherwise defined herein, terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined.

 

Atlantic Power Corporation (the “Canadian Borrower”), Atlantic Power Generation, Inc., and Atlantic Power Transmission, Inc. (each of the Canadian Borrower, Atlantic Power Generation, Inc., and Atlantic Power Transmission, Inc. is referred to individually herein as a “Borrower” and collectively as the “Borrowers”), the lenders from time to time party thereto (each a “Lender” and, collectively, the “Lenders”), the L/C Issuers from time to time party thereto, and the Administrative Agent are parties to a Second Amended and Restated Credit Agreement, dated as of August 2, 2013 (as amended, modified or supplemented from time to time, the “Credit Agreement”);

 

The Joining Party is a direct or indirect Wholly-Owned Subsidiary of the Canadian Borrower and desires, or is required pursuant to the provisions of the Credit Agreement, to become a Guarantor under the Guaranty; and

 

The Joining Party will obtain benefits from the incurrence of Loans by, and the issuance of Letters of Credit for the account of, the Borrowers, in each case pursuant to the Credit Agreement and, accordingly, desires to execute this Joinder in order to (i) satisfy the requirements described in the preceding paragraph; and (ii) induce the Lenders to continue to make Loans and the L/C Issuers to issue Letters of Credit to the Borrowers;

 

Accordingly, in consideration of the foregoing and other benefits accruing to the Joining Party, the receipt and sufficiency of which are hereby acknowledged, the Joining Party hereby makes the following representations and warranties to each L/C Issuer, each Lender and the Administrative Agent and hereby covenants and agrees with each L/C Issuer, each Lender and the Administrative Agent as follows:

 

1.                                      By this Joinder, the Joining Party becomes a Guarantor for all purposes under the Guaranty.

 

2.                                      The Joining Party agrees that, upon its execution hereof, it will become a Guarantor under the Guaranty with respect to all Obligations (as defined in the Credit Agreement), and will be bound by all terms, conditions and duties applicable to a Guarantor under the Guaranty and the other Loan Documents.  Without limitation of the foregoing, and in furtherance thereof, the Joining Party unconditionally and irrevocably, guarantees the due and punctual payment and performance of all Obligations (on the same basis as the other Guarantors under the Guaranty).

 

E-1

 

3.                                      The Joining Party hereby makes and undertakes, as the case may be, each covenant, representation and warranty made by, and as a Guarantor pursuant to the Guaranty, in each case as of the date hereof (except to the extent any such representation or warranty relates solely to an earlier date in which case such representation and warranty shall be true and correct as of such earlier date), and agrees to be bound by all covenants, agreements and obligations of a Guarantor pursuant to the Guaranty and all other Loan Documents to which it is or becomes a party.

 

4.                                      This Joinder shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of and be enforceable by each of the parties hereto and its successors and assigns, provided, however, the Joining Party may not assign any of its rights, obligations or interest hereunder or under any other Loan Document without the prior written consent of the Lenders or as otherwise permitted by the Loan Documents.  THIS JOINDER SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO CONFLICT OF LAW PROVISIONS THEREOF.  This Joinder may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one instrument.  In the event that any provision of this Joinder shall prove to be invalid or unenforceable, such provision shall be deemed to be severable from the other provisions of this Joinder, which shall remain binding on all parties hereto.

 

5.                                      From and after the execution and delivery hereof by the parties hereto, this Joinder shall constitute a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents.

 

6.                                      The effective date of this Joinder is                               , 20    .

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be duly executed as of the date first above written.

 

 

	
 
    	
 
    	
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Accepted   and Acknowledged by:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
BANK   OF MONTREAL,
    	
 
    	
 
    	
 
    
	
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