EXHIBIT 10.27
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LETTER OF CREDIT
AND
REIMBURSEMENT AGREEMENT
Dated as of September 17, 1992
between
COGEN TECHNOLOGIES LINDEN VENTURE, L.P.
and
GENERAL ELECTRIC CAPITAL CORPORATION
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Table of Contents
Page
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1. Defined Terms........................................................... 2
2. Maintenance and Issuance of Letters of Credit........................... 3
3. Agreement To Repay Letter of Credit Disbursements....................... 4
4. Letter of Credit Fees................................................... 7
5. Letter of Credit Operations............................................. 7
6. Making of Payments...................................................... 7
7. Representations and Warranties of the Limited Partnership............... 7
8. Conditions Precedent.................................................... 15
9. Affirmative Covenants................................................... 17
10. Negative Covenants...................................................... 24
11. Events of Default....................................................... 26
12. Amendments and Waivers.................................................. 32
13. Notices................................................................. 32
14. No Waiver; Cumulative Remedies.......................................... 33
15. Severability............................................................ 33
16. Headings................................................................ 33
17. Counterparts............................................................ 34
18. GECC Sole Beneficiary................................................... 34
19. GOVERNING LAW........................................................... 34
20. Submission to Jurisdiction; Waivers..................................... 34
21. Indemnification......................................................... 35
22. Expenses................................................................ 35
23. Successor and Assigns; Transferees; Transferred
Interests.............................................................. 36
-i-
Schedule I - Existing Letters of Credit
Exhibit A - Form of Irrevocable Letter of Credit
Exhibit B - Form of Letter of Credit Note
-ii-
LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT, dated as of September
17, 1992, between COGEN TECHNOLOGIES LINDEN VENTURE, L.P., a Delaware limited
partnership (the "Limited Partnership"), of which COGEN TECHNOLOGIES LINDEN,
LTD. (d/b/a COGEN TECHNOLOGIES LINDEN, LIMITED PARTNERSHIP in the State of New
Jersey), a Texas limited partnership is the general partner (the "General
Partner"), and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
("GECC").
W I T N E S S E T H:
WHEREAS, pursuant to a Construction Loan Agreement, dated as of
February 15, 1990, among the Limited Partnership, the lenders from time to time
parties thereto (the "Construction Lenders") and General Electric Power Funding
Corporation, a Delaware corporation ("GEPFC"), as agent for the Construction
Lenders (in such capacity, the "Agent") (as heretofore amended, supplemented or
otherwise modified, the "Loan Agreement"), the Construction Lenders agreed to
make loans (the "Loans") to the Limited Partnership in order to finance the
costs of constructing, equipping and initially operating the Facility (as
defined in the Loan Agreement) and GEPFC agreed to issue certain letters of
credit (the "Construction Letters of Credit") for the account of the Limited
Partnership; and
WHEREAS, pursuant to an Assignment and Assumption Agreement, dated as
of March, 1990, between GECC and GEPFC, GEPFC assigned to GECC its obligation to
issue the Construction Letters of Credit and its rights to be reimbursed by the
Construction Lenders for any drawings thereunder; and
WHEREAS, upon the request of the Limited Partnership, GECC has issued
certain Construction Letters of Credit; and
WHEREAS, pursuant to the Capital Contribution Agreement, dated as of
February 15, 1990, among the Limited Partnership, the General Partner, GEPFC and
State Street Bank and Trust Company of Connecticut, National Association, not in
its individual capacity but as trustee (in such capacity the "Owner Trustee")
under the Trust Agreement (as defined herein), as assignee of GEPFC (as
heretofore amended, supplemented or otherwise modified, the "Capital
Contribution Agreement"), the Owner Trustee agreed to make certain capital
contributions to the Limited Partnership; and
WHEREAS, the Limited Partnership has requested GECC to maintain
certain of the Construction Letters of Credit and has applied to GECC for the
issuance of the Con Ed Letter of Credit (as defined herein) for the account of
the Limited Partnership,
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and GECC is willing to maintain such Construction Letters of Credit and is
willing to issue such Con Ed Letter of Credit subject to and upon the terms and
conditions herein; and
WHEREAS, it is a condition precedent to the obligations of the Owner
Trustee to make its capital contributions on the Second Capital Contribution
Date (as defined in the Capital Contribution Agreement) and of GECC to maintain
and issue such letters of credit that the Limited Partnership shall have
executed and delivered this Agreement;
NOW, THEREFORE, in consideration of the premises and to induce GECC to
maintain and issue certain letters of credit for the account of the Limited
Partnership, the Limited Partnership hereby agrees with GECC as follows:
1. Defined Terms. Unless otherwise defined herein, terms used but not
defined herein shall have their respective meanings in the Amended and Restated
Agreement of Limited Partnership of the Limited Partnership, dated as of
September 15, 1992 (the "Amended and Restated Partnership Agreement") (after
giving effect to any waiver or amendment thereof with the consent of GECC) and
the following terms shall have the following meanings (such definitions to be
equally applicable to both singular and plural forms of the terms defined):
"Agreement": this Letter of Credit and Reimbursement Agreement, as
amended, supplemented or otherwise modified from time to time.
"Con Ed Letter of Credit": as defined in Section 2.
"Default": any of the events specified in Section 11, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
for the happening of any other condition, has been satisfied.
"Event of Default": any of the events specified in Section 11;
provided that any requirement for the giving of notice, the lapse of time,
or both, or for the happening of any other condition, has been satisfied.
"Existing Letters of Credit": as defined in Section 2.
"Letter of Credit Commitment": the obligation of GECC to maintain and
to issue the Letters of Credit for the account of the Limited Partnership
pursuant to Section 2 in an aggregate undrawn amount at any time not to
exceed $120,700,000.
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"Letter of Credit Commitment Period": the period from and including
the date of this Agreement to but not including the Termination Date.
"Letter of Credit Fees": as defined in Section 4.
"Letters of Credit": the collective reference to the Con Ed Letter of
Credit and the Existing Letters of Credit.
"LOC Note": as defined in Section 3.
"Obligations": all the unpaid principal amount of and accrued interest
on the LOC Note and all other obligations and liabilities of the Limited
Partnership to GECC, whether direct or indirect, absolute or contingent,
due or to become due, or non-existing or hereafter incurred, which may
arise under, out of or in connection with this Agreement, the LOC Note or
the Letters of Credit, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all fees and disbursements of counsel to GECC) or
otherwise.
"Operative Documents": as defined in the Amended and Restated
Partnership Agreement.
"Participations": as defined in Section 23.
"Termination Date": July 1, 1993.
"Transferees": as defined in Section 23.
"Trust Agreement": the Trust Agreement, dated as of December 28, 1990,
between the Owner Trustee and Linden Owner Partnership, a Delaware general
partnership, as the same may be amended, supplemented or otherwise modified
from time to time.
"UCP": the Uniform Customs and Practice for Documentary Credits (1983
Revision), Publication No. 400 of the International Chamber of Commerce.
2. Maintenance and Issuance of Letters of Credit. (a) Subject to the
terms and conditions of this Agreement, on the Second Capital Contribution Date
(as defined in the Capital Contribution Agreement), GECC shall continue and
maintain the Construction Letters of Credit listed on Schedule 1 hereto (as
amended, extended, renewed or otherwise modified from time to time, the
"Existing Letters of Credit") in favor of Exxon Corporation and Public Service
Electric and Gas Company and Elizabethtown Gas Company. Notwithstanding the
provisions of Section 3.4 of the Loan Agreement, the parties hereto agree that,
on the date hereof, the Limited Partnership's obligations in
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respect of the Existing Letters of Credit shall be governed by the provisions of
this Agreement and shall be deemed to have been satisfied for purposes of the
Construction Loan Agreement only.
(b) Subject to the terms and conditions of this Agreement (including,
without limitation, the limitations of the Letter of Credit Commitment), during
the Letter of Credit Commitment Period, GECC shall issue an irrevocable letter
of credit (the "Con Ed Letter of Credit"), substantially in the form of Exhibit
A, in favor of Con Ed, to secure certain obligations of the Limited Partnership
to Con Ed pursuant to the Power Purchase Agreement, in a maximum face amount at
any time not to exceed the relevant amount set forth on Appendix C thereto (as
modified by the letter dated September 12, 1989, from John J. Kelliher,
Secretary of the Public Service Commission of the State of New York to Chanoch
Lubling). The Limited Partnership will give GECC at least 10 Business Days'
prior written notice of a request for the opening of the Con Ed Letter of
Credit. Such notice shall set forth the proposed issuance date of the Con Ed
Letter of Credit, which shall be a Business Day. The Limited Partnership shall
also provide such other certificates, documents and other papers and information
as GECC may reasonably request. Upon such receipt, GECC will process the form of
the Con Ed Letter of Credit and the other certificates, documents and other
papers delivered to GECC in connection therewith, in accordance with its
customary procedures, and, subject to the terms and conditions hereof, shall
promptly open the Con Ed Letter of Credit (but in no event shall GECC be
required to open the Con Ed Letter of Credit earlier than three Business Days
after receipt by GECC of the notice relating thereto) by issuing the original of
the Con Ed Letter of Credit to Con Ed and furnishing a copy thereof to the
Limited Partnership.
3. Agreement to Repay Letter of Credit Disbursements. (a) The Limited
Partnership agrees (i) to reimburse GECC for any payment made by GECC under any
Letter of Credit immediately upon the making of such payment by GECC and (ii) to
pay interest on any unreimbursed portion of any such payment from the date of
such payment until reimbursement in full thereof at a rate per annum equal to 2%
above the rate of interest declared by Bankers Trust Company, from time to time,
to be its prime rate of interest (or, if Bankers Trust Company shall cease to
exist, the rate of interest declared by Chemical Bank, from time to time, as its
prime rate of interest). The obligation of the Limited Partnership to reimburse
GECC pursuant to this Section 3(a) shall be evidenced by a promissory note of
the Limited Partnership in the form of Exhibit B hereto (the "LOC Note") in the
principal amount equal to the maximum aggregate face amount of all Letters of
Credit.
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(b) If the General Partner shall exercise its option to purchase the
Limited Partnership Interests (as defined in the Amended and Restated
Partnership Agreement) pursuant to Article XI or XIV of the Amended and Restated
Partnership Agreement, the Letter of Credit Commitment shall terminate forthwith
and the Limited Partnership shall prepay in full all obligations in respect of
the Letters of Credit and the LOC Note, all Letter of Credit Fees accrued but
unpaid to the date of prepayment and all other amounts payable hereunder. The
Limited Partnership's obligations in respect of the Letters of Credit shall be
satisfied by (i) paying or prepaying any amount due or to become due in respect
of such obligations, (ii) providing GECC with cash collateral, pursuant to
documentation in form and substance satisfactory to GECC, in an amount equal to
the aggregate undrawn face amount of the Letters of Credit or (iii) causing the
termination of the Letters of Credit prior to any drawing being made thereunder.
(c) If GECC has delivered a notice in writing to the Limited
Partnership declaring that a Declared Event of Loss has occurred, (i) the Letter
of Credit Commitment shall terminate forthwith and (ii) the Limited Partnership
shall prepay in full, without premium or penalty, all obligations (whether
matured or unmatured, contingent or noncontingent) in respect of the Letters of
Credit and the LOC Note, together with accrued interest thereon to the date of
payment and shall pay any unpaid Letter of Credit Fees and any other amounts
payable hereunder to the date of payment, on the earlier of (x) the date
occurring 90 days after the date of receipt of such notice from GECC and (y) the
date on which insurance proceeds are received by the Limited Partnership with
respect to such Event of Loss; provided, that with respect to any such Event of
Loss that arises out of the loss, destruction or damage of the Facility, the
date specified in clause (x) above shall be extended for an additional period
(not to exceed 90 days) if, in the reasonable opinion of GECC, insurance
proceeds sufficient to cover the amounts specified in clause (ii) above will be
received within such additional period. The Limited Partnership's obligations in
respect of the Letters of Credit shall be satisfied in any of the manners
described in the last sentence of paragraph (b) above.
(d) The Limited Partnership's obligations to prepay and repay GECC for
payments and disbursements made by GECC under, and in accordance with, any
Letter of Credit shall be absolute, unconditional and irrevocable under all
circumstances whatsoever, including, without limitation, the following
circumstances: (i) any lack of validity or enforceability of any Letter of
Credit or any agreement or instrument related thereto; (ii) any amendment or
waiver of or any consent to or departure from the terms of any Letter of Credit,
provided, that any such amendment shall have been effectuated in accordance with
Section 12 hereof; (iii) the existence of any claim, set-off, defense or other
right which the
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Limited Partnership or any other person may at any time have against any
beneficiary or any transferee of any Letter of Credit (or any persons for whom
any such beneficiary or any such transferee may be acting), GEPFC, GECC or any
other person in connection with this Agreement or any other agreement or
transaction; (iv) any draft or any other document presented under any 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 whatsoever;
(v) payment by GECC under any Letter of Credit against presentation of a draft
or certificate which does not comply with the terms of any Letter of Credit,
provided that such payment shall not have constituted gross negligence or
willful misconduct; or (vi) any other circumstance or event whatsoever, whether
or not similar to any of the foregoing.
(e) The Limited Partnership hereby agrees to indemnify and hold
harmless GECC from and against any and all claims, damages, losses, liabilities,
reasonable costs or expenses whatsoever which GECC may incur (or which may be
claimed against GECC by any person or entity whatsoever) by reason of or in
connection with the execution and delivery or transfer of, or payment or failure
to pay under, any Letter of Credit; provided, that the Limited Partnership shall
not be required to indemnify GECC for any claims, damages, losses, liabilities,
costs or expenses to the extent, but only to the extent, caused by the failure
of GECC to act in good faith or to use care in the examination of any draft or
certificate presented under any Letter of Credit in ascertaining whether on its
face it appeared to comply with the terms of such Letter of Credit. Nothing in
this Section 2(e) is intended to limit the reimbursement obligation of the
Limited Partnership contained herein.
(f) The Limited Partnership assumes all risks of the acts or omissions
of the beneficiary and any transferee of any Letter of Credit with respect to
its use of such Letter of Credit. Neither GECC nor any of its affiliates,
officers or directors shall be liable or responsible for: (i) the use which may
be made of any Letter of Credit or for any acts or omissions of the beneficiary
and any transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsements thereon, even if such documents
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (iii) payment by GECC against presentation of documents
which do not comply with the terms of any Letter of Credit, including failure of
any documents to bear any reference or adequate reference to such Letter of
Credit; or (iv) any other circumstances whatsoever in making or failing to make
payment under any Letter of Credit, except only that the Limited Partnership
shall have a claim against GECC, and GECC shall be liable to the Limited
Partnership, to the extent, but only to the extent, of any direct, as opposed to
consequential, damages
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suffered by the Limited Partnership which the Limited Partnership proves were
caused by the failure of GECC to act in good faith or to use care in the
examination of any draft or certificate presented under any Letter of Credit in
ascertaining whether on its face it appeared to comply with the terms of such
Letter of Credit. In furtherance and not in limitation of the foregoing, GECC
may accept documents that appear on their face to be in order, without
responsibility for further investigation.
4. Letter of Credit Fees. The Limited Partnership agrees to pay GECC,
with respect to the Letters of Credit, a letter of credit fee equal to .75% per
annum (computed on the basis of the actual number of days elapsed over a year of
360 days) on the maximum amount available to be drawn at such time under such
Letters of Credit plus, if such maximum amount, at any time, exceeds
$75,000,000, .25% per annum on such maximum amount in excess of $75,000,000. The
letter of credit fees (the "Letter of Credit Fees") referred to in the preceding
sentence shall be payable monthly in advance, commencing on the date of the
issuance of such Letter of Credit or, in the case of the Existing Letters of
Credit, the Second Capital Contribution Date.
5. Letter of Credit Operations. GECC shall within 10 Business Days
following its receipt thereof, examine all documents purporting to represent a
demand for payment under any Letter of Credit to ascertain that the same appear
on their face to be in conformity with the terms and conditions of such Letter
of Credit. Within 10 Business Days of such receipt, GECC shall give written
notification to the Limited Partnership of such demand for payment and the
determination by GECC as to whether such demand for payment was in accordance
with the terms and conditions of such Letter of Credit and whether GECC has made
or will make a disbursement thereunder; provided, however, that the failure to
give such notice shall not relieve the Limited Partnership of its obligation to
reimburse GECC for such disbursement.
6. Making of Payments. All payments by the Limited Partnership to
GECC under this Agreement or under the LOC Note shall be paid to GECC by wire
transfer or electronic transfer for deposit to the credit of its account no. 50-
205-776 at Bankers Trust Company, New York, New York ABA Number 021 001 033 or
to such other account as GECC may from time to time specify to the Limited
Partnership in freely transferable Dollars and immediately available funds
without set-off or counterclaim.
7. Representations and Warranties of the Limited Partnership. The
Limited Partnership represents and warrants as of the date hereof and as of the
date of issuance of the Con Ed Letter of Credit:
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(a) Financial Statements. (i) The balance sheets of each of the
General Partner and the Limited Partnership as at the date which is one
month prior to the Second Capital Contribution Date, and the related
statements of income and partners' capital and changes in partners' capital
and cash flow for the period then ended, furnished to GEPFC prior to the
Second Capital Contribution Date and certified by a Responsible Officer of
the General Partner, are complete and correct in all material respects and
present fairly the financial position of the General Partner or the Limited
Partnership, as the case may be, on such date and the results of the their
respective changes in partners' capital and cash flow for the period then
ended, in conformity with GAAP applied on a consistent basis. All
liabilities, direct and contingent, of the Limited Partnership and the
General Partner on such date required to be disclosed pursuant to GAAP are
disclosed in such balance sheets.
(ii) The most recent balance sheet of the Limited Partnership and the
General Partner and the related statements of income and partners' capital
and changes in partners' capital and cash flow for the period then ended,
heretofore furnished to GEPFC pursuant to the Loan Agreement and certified
by a Responsible Officer of the General Partner (copies of which have been
furnished to GECC), are complete and correct in all material respects and
fairly present the financial condition of the Limited Partnership and the
General Partner on such date and the results of their respective changes in
partners' capital and cash flow for the period then ended, in conformity
with GAAP applied on a consistent basis. All liabilities, direct and
contingent, of the Limited Partnership and the General Partner on such date
required to be disclosed pursuant to GAAP are disclosed in such balance
sheet.
(iii) There has been no material adverse change in (x) the properties,
business, operations, condition (financial or otherwise) or prospects of
the Limited Partnership or the General Partner since the date of the most
recent audited financial statement of the Limited Partnership and the
General Partner, in each case, delivered to GECC pursuant hereto and (y)
there has been no material adverse change in the prospects of the Limited
Partnership from those reflected in the Pro Forma Financial Statements (as
defined in the Capital Contribution Agreement) delivered to GEPFC (copies
of which have been furnished to GECC) pursuant to Section 2 of the Capital
Contribution Agreement.
(b) Partnership Existence and Business; Partners. (i) The Limited
Partnership is a limited partnership duly organized and validly existing
under the laws of the State of Delaware and is duly qualified to do
business in the
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States of New York, Texas and New Jersey, the only jurisdictions in which
the conduct of its business or the ownership or lease of its assets
requires such qualification. The Certificate of Limited Partnership of the
Limited Partnership has been duly filed in the office of the Secretary of
State of Delaware and no other filing, recording, publishing or other act
is necessary or appropriate in connection with the existence or the
business of the Limited Partnership except those which have been duly made
or performed. Prior to the date hereof, the Limited Partnership has engaged
in no business other than the development, construction and operation of
the Project and the negotiation, execution, delivery and performance of the
Basic Documents (as defined in the Loan Agreement) and the Operative
Documents, and the Limited Partnership has no obligations or liabilities
other than those directly related to the conduct of such business. The
Limited Partnership is and will be engaged solely in the business of
constructing, owning and operating the Project and, subject to subsection
7.3(a)(i) of the Amended and Restated Partnership Agreement, the
construction, operation and maintenance of the Exxon System.
(ii) The General Partner is a limited partnership duly organized and
validly existing under the laws of the State of Texas and is duly qualified
to do business in the States of New York and New Jersey, the only
jurisdictions in which the conduct of its business or the ownership or
lease of its assets requires such qualification. The General Partner is the
sole general partner of the Limited Partnership, and is engaged solely in:
(1) the business of being the general partner of the Limited Partnership,
(2) activities permitted pursuant to the General Partner Credit Agreement
(as defined in the Loan Agreement), (3) the performance of the Limited
Partnership's obligations pursuant to the Basic Documents (as defined in
the Loan Agreement) and the Operative Documents and (4) to the extent
permitted by subsection 7.3(a)(i) of the Amended and Restated Partnership
Agreement, the performance of the Limited Partnership's obligations
pursuant to any agreements relating to the Exxon System.
(iii) The only partners of the Limited Partnership on the date of
execution and delivery of this Agreement are the General Partner, as the
sole general partner, and the Owner Trustee, as the sole limited partner.
(iv) The Limited Partnership does not have any Subsidiaries. The
General Partner has one Subsidiary which is the Limited Partnership.
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(c) Compliance with Law. Each of the Limited Partnership and the
General Partner is in compliance with all Requirements of Law.
(d) Power and Authorization; Enforceable Obligations. (i) The Limited
Partnership has full power and authority and the legal right to own its
properties and to conduct its business as now conducted and proposed to be
conducted by it, to execute, deliver and perform this Agreement and the LOC
Note, to take all action as may be necessary to complete the transactions
contemplated hereunder and thereunder and to have the Letters of Credit
maintained and issued for its account. The Limited Partnership has taken
all necessary partnership and legal action to authorize the maintenance and
issuance of the Letters of Credit on the terms and conditions of this
Agreement and the LOC Note, and to authorize the execution, delivery and
performance of this Agreement and the LOC Note. No consent or authorization
of, filing with, or other act by or in respect of any other Person
(including the General Partner) is required in connection with the
maintenance and issuance of the Letters of Credit, or with the execution,
delivery or performance by the Limited Partnership or the validity or
enforceability as to the Limited Partnership of this Agreement and the LOC
Note. Each of this Agreement and the LOC Note has been duly executed and
delivered by the Limited Partnership and constitutes a legal, valid and
binding obligation of the Limited Partnership enforceable against the
Limited Partnership in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and
by general principles of equity.
(ii) The General Partner has full power and authority and the legal
right to own its properties and to conduct its business as now conducted
and proposed to be conducted by it, and to take all action as may be
necessary to complete the transactions contemplated hereunder.
(iii) The Amended and Restated Partnership Agreement has been duly
authorized, executed and delivered by the General Partner and constitutes a
valid and legally binding obligation of the General Partner enforceable in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and by general principles
of equity.
(e) No Legal Bar. The execution, delivery and performance of this
Agreement and the LOC Note and the maintenance and issuance of the Letters
of Credit and the
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use of the proceeds thereof, (i) will not violate any Requirement of Law
applicable to the Limited Partnership or the General Partner, (ii) will not
violate or result in any breach of, or constitute any default under, any
Contractual Obligation of the Limited Partnership or the General Partner,
except to the extent that the failure to comply therewith could not
reasonably be expected to (1) have a material adverse effect on the
business, operations, property, condition (financial or otherwise) or
prospects of the Limited Partnership or the General Partner, as the case
may be, or (2) materially adversely affect the ability of the Limited
Partnership or the General Partner to perform its obligations under the
Operative Documents to which it is a party, and (iii) will not result in,
or require, the creation or imposition of any Lien on any of the properties
or revenues of the Limited Partnership or the General Partner pursuant to
any Requirement of Law or Contractual Obligation, except for Permitted
Liens. No approvals or consents of any trustee or any holder of any
indebtedness, obligations or securities of the Limited Partnership or the
General Partner are required in connection with the execution, delivery and
performance by the Limited Partnership or the General Partner of this
Agreement or any other Operative Document to which it is or is to become a
party, except such as have been duly obtained and are in full force and
effect.
(f) No Proceeding or Litigation. Except as disclosed by the Limited
Partnership to GECC in writing on or prior to February 15, 1990, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the best knowledge of the Limited
Partnership, threatened against the Limited Partnership or the General
Partner, or against any of their respective properties, rights, revenues or
assets, or the Project, (i) which could reasonably be expected to have a
material adverse effect on the properties, business, operations, condition
(financial or otherwise) or prospects of the Limited Partnership or the
General Partner, (ii) which could reasonably be expected to have a material
adverse effect on the ability of any Participant to perform its obligations
under any Operative Documents to which such Participant is or will be a
party, or (iii) which could reasonably be expected to have a material
adverse effect on the construction, completion or operation of the Project
as contemplated by the Operative Documents.
(g) No Default or Event of Loss. Neither the Limited Partnership nor
the General Partner is in default under or with respect to any Contractual
Obligation, including, without limitation, any Operative Document in any
respect which could reasonably be expected to (i) have a material
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adverse effect on the business, operations, property, condition (financial
or otherwise) or prospects of the Limited Partnership or the General
Partner or (ii) materially adversely affect the ability of the Limited
Partnership or the General Partner to perform its obligations under the
Operative Documents to which it is a party. No notice of default has been
given to the Limited Partnership or the General Partner under any of the
Operative Documents to which it is a party. No Default or Event of Default
has occurred and is continuing. No Event of Loss has occurred which has not
been notified in writing to GECC Pursuant to Section 9(o) hereof.
(h) Ownership of Property; Liens. The Limited Partnership has good
title to, or a valid leasehold interest in, all its real property, and good
title to all its other property, free and clear of all liens other than
Permitted Liens. No mortgage or financing statement or other instrument or
recordation covering all or any part of such property which has been
executed by, or with the permission of, the Limited Partnership or the
General Partner is on file in any recording office, except such as
evidences Permitted Liens.
(i) Taxes. The General Partner has filed or caused to be filed all tax
returns which are required to be filed by it or by the Limited Partnership,
and has paid or caused to be paid all taxes shown to be due and payable on
such returns or on any assessments made against it or the Limited
Partnership or any of its or the Limited Partnership's property and all
other taxes, fees or other charges imposed on it or the Limited Partnership
or any of its or the Limited Partnership's property by any Governmental
Authority, except taxes, fees and other charges not yet due and payable or
which are being contested in accordance with the provisions of subsection
7.2(b) of the Amended and Restated Partnership Agreement.
(j) ERISA. No Reportable Event has occurred during the immediately
preceding six-year period with respect to any Plan, and each Plan has
complied and has been administered in all material respects with applicable
provisions of ERISA and the Code. The present value of all benefits under
each Single Employer Plan maintained by the Limited Partnership or any
Commonly Controlled Entity (based on those assumptions used to fund such
Plan) did not, as of the last annual valuation date applicable thereto,
exceed the value of the assets of such Plan allocable to such benefits.
Neither the Limited Partnership nor any Commonly Controlled Entity has
during the immediately preceding six-year period had a complete or partial
withdrawal from any Multiemployer Plan, and neither the Limited Partnership
nor
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any Commonly Controlled Entity would become subject to liability under
ERISA if the Limited Partnership or any Commonly Controlled Entity were to
withdraw completely from all Multiemployer Plans as of the most recent
valuation date applicable thereto. Neither the Limited Partnership nor any
Commonly Controlled Entity has received notice that any Multiemployer Plan
is in Reorganization or Insolvency nor, to the best knowledge of the
Limited Partnership, is any such Reorganization or Insolvency reasonably
likely to occur. The present value (determined using actuarial and other
assumptions which are reasonable in respect of the benefits provided and
the employees participating) of the liability of the Limited Partnership
and each Commonly Controlled Entity for post-retirement benefits to be
provided to their current and former employees under Plans which are
welfare benefit plans (as defined in Section 3(1) of ERISA) does not, in
the aggregate, exceed the assets under all such Plans allocable to such
benefits.
(k) Investment Company Act. Neither the Limited Partnership nor the
General Partner is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of
1940, as amended.
(l) Public Utility. (i) Neither GECC, the Owner Trustee nor any of
their respective Affiliates (solely by reason of the capital contributions
to the Limited Partnership made under the Capital Contribution Agreement or
any transaction contemplated hereby or by any other Operative Document)
will be deemed to be, or be subject to the regulation as, an "electric
utility", an "electric utility holding company", a "public utility", or a
"public utility holding company" or any similar entity under any existing
law, rule or regulation of any Governmental Authority; and neither GECC,
the Owner Trustee nor any of their respective Affiliates will, solely (it
being understood that solely shall mean without regard to any other
activity or operation of GECC, the Owner Trustee, any Affiliate or any
parent thereof) by reason of its ownership or operation of the Project, be
deemed to be, or to be subject to regulation as, an "electric utility", an
"electric utility holding company", a "public utility" or a "public utility
holding company", or any similar entity under any existing law, rule or
regulation of any Governmental Authority.
(ii) The Project (1) continues to meet the requirements for a
Qualifying Facility, (2) is eligible for the benefit of the exemptions
provided by 18 C.F.R. (S) 292.601, (3) continues to be certified by FERC as
a Qualifying Facility and (4) is exempt from all regulation under the
14
Public Utility Holding Company Act of 1935, as amended and the Department
of Public Utilities Act of 1948, NJSA 48:1-1, et seq.
(m) Full Disclosure. No representation, warranty or other statement
made by the Limited Partnership or the General Partner in any Operative
Document or in any certificate, written statement or other document
furnished to GECC by or on behalf of the Limited Partnership or the General
Partner, contains any untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements contained herein
or therein, in light of the circumstances under which they were made, not
misleading. There is no fact known to the Limited Partnership which the
Limited Partnership has not disclosed to GECC in writing prior to the date
hereof which materially adversely affects, or which could reasonably be
expected in the future to materially adversely affect, the Project or the
properties, business, operations or financial condition of the Limited
Partnership or the General Partner or the ability of the Limited
Partnership or the General Partner to perform its obligations under any
Operative Document to which it is or is to be a party.
(n) Principal Place of Business, Etc. The principal place of
business and chief executive office of the Limited Partnership, and the
office where the Limited Partnership keeps its records concerning the
Project and all contracts relating thereto, is located at 1600 Smith
Street, Suite 5000, 50th Floor, Houston, Texas.
(o) Representations and Warranties Contained in Operative Documents.
The representations and warranties of the Limited Partnership contained in
the Operative Documents (other than the Project Documents and this
Agreement) were true and correct on and as of the dates when made, and,
except to the extent such representations and warranties relate solely to
an earlier date (in which case such representations and warranties shall
have been true and correct as of such earlier date), the Limited
Partnership hereby confirms each such representation and warranty with the
same effect as if set forth in full herein. The representations and
warranties of the Limited Partnership contained in any Project Document to
which it is a party were true and correct in all material respects on and
as of the dates when made, and, except to the extent such representations
and warranties relate solely to an earlier date (in which case such
representations and warranties shall have been true and correct in all
material respects as of such earlier date) the Limited Partnership hereby
confirms each such representation and warranty with the same effect as if
set forth in full herein.
15
(p) Environmental Matters. (i) (1) There are and have been no
Hazardous Materials at, upon, under or within or discharged or emitted from
the Project, including, without limitation, the air, subsurface, soil,
surface and ground water and aquifers of any such property, except for such
Hazardous Materials as may be permitted to be maintained thereon in
accordance with any Relevant Environmental Law or such Hazardous Materials
that may be removed from the Site in accordance with all Relevant
Environmental Laws at an aggregate cost not to exceed the sum of (x) the
amount set forth in the Construction Budget (as defined in the Loan
Agreement) for Site preparation, (y) any amounts with respect to the
removal of Hazardous Materials for which Exxon is liable under the Site
Lease Agreement and (z) $2,000,000; and
(2) no Environmental Discharges have occurred at, upon, under, within
or from any such property, except for such Environmental Discharges for
which the aggregate cost of clean up will not exceed the sum of (x) the
amount set forth in the Construction Budget (as defined in the Loan
Agreement) for Site preparation, (y) any amounts with respect to the
removal of Hazardous Materials for which Exxon is liable under the Site
Lease Agreement and (z) $2,000,000.
(ii) No Environmental Notice has been received by Limited Partnership
with respect to any Adverse Environmental Event.
(iii) (1) With respect to the Site and the Facility, there are and have
been no violations of any Relevant Environmental Law, except for violations
which do not constitute an Adverse Environmental Event;
(2) no outstanding order, judgment or decree which constitutes an
Adverse Environmental Event has been entered with respect to the Limited
Partnership, the Site or the Facility; and
(3) no other event has occurred which constitutes an Adverse
Environmental Event.
The representations set forth in this subsection (p) relating to
conditions existing on the Site prior to the Construction Conversion Date
shall be made only to the best knowledge of the Limited Partnership.
8. Conditions Precedent. GECC's obligation to maintain the Existing
Letters of Credit and to issue the Con Ed Letter of Credit hereunder is subject
to the satisfaction or waiver by GECC of the following conditions precedent on
the
16
Second Capital Contribution Date, in the case of the Existing Letters of Credit,
and on the issuance date of the Con Ed Letter of Credit, as the case may be:
(a) Reimbursement Agreement. GECC shall have received a counterpart of
this Agreement, duly executed and delivered by the Limited Partnership.
(b) Conditions to Capital Contribution Agreement. The conditions
precedent to the making by the Owner Trustee of capital contributions to
the Limited Partnership on the Second Capital Contribution Date shall have
been satisfied or waived by the parties thereto with the consent of GECC on
or prior to the Second Capital Contribution Date.
(c) Representations and Warranties. The representations and warranties
made by the Limited Partnership or the General Partner herein, or in any
other Operative Document to which it is a party, or which are contained in
any certificate, document, financial or other statement furnished by the
Limited Partnership or the General Partner hereunder or thereunder or in
connection herewith or therewith, shall be true and correct on and as of
such date as if made on and as of such date, except to the extent that such
representations and warranties relate specifically to an earlier date (in
which case such representations or warranties shall have been true and
correct on and as of such earlier date).
(d) No Default, Event of Default or Event of Loss. No Default or Event
of Default shall be in existence on such date, or shall occur after giving
effect to Letter of Credit to be issued on such date. No Declared Event of
Loss shall be in existence on such date. Satisfaction of this condition
with respect to any particular Default, Event of Default or Event of Loss
shall not constitute satisfaction of this condition with respect to any
other Default, Event of Default or Event of Loss, including, without
limitation, a subsequent Default, Event of Default or Event of Loss which
arises out of identical or similar circumstances.
(e) Certificates. GECC shall have received from the Limited
Partnership such certificates and other documents relating to the
applicable Letter of Credit, dated the Second Capital Contribution Date or
the date of issuance, as the case may be, as GECC may reasonably request.
(f) Additional Documents. GECC shall have received such other
documents and opinions as may be reasonably requested by it.
17
(g) Additional Matters. All other documents and legal matters in
connection with the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to GECC and its counsel.
9. Affirmative Covenants. So long as any amounts remain available to
be drawn under any Letter of Credit or any amount is owing to GECC hereunder,
the Limited Partnership hereby agrees that:
(a) Conduct of Business, Maintenance of Existence, Etc. The Limited
Partnership shall at all times (i) engage solely in the business of
developing, constructing, owning and operating the Project, the performance
of its obligations pursuant to the Project Documents and, to the extent
permitted by subsection 7.3(a)(i) of the Amended and Restated Partnership
Agreement, the construction, operation and maintenance of the Exxon System,
(ii) preserve and maintain in full force and effect its existence as a
limited partnership under the laws of the State of Delaware, its
qualification to do business in the States of New York, New Jersey and
Texas and in each other jurisdiction in which the conduct of its business
requires such qualification and all of its rights, privileges and
franchises necessary for the construction, ownership and operation of the
Project and (iii) obtain and maintain in full force and effect all
Governmental Approvals and other consents and approvals required at any
time in connection with the ownership or operation of the Project, except
to the extent that the failure to obtain and maintain such Governmental
Approval or other consent or approval could not reasonably be expected to
(i) have a material adverse effect on the business, operations, property,
condition (financial or otherwise) or prospects of the Limited Partnership
or (ii) materially adversely affect the Limited Partnership's ability to
perform its obligations under the Operative Documents to which it is a
party. The General Partner will engage solely in (i) the business of being
the sole general partner of the Limited Partnership, (ii) activities
permitted pursuant to the General Partner Credit Agreement, (iii) the
performance of the Borrower's obligations pursuant to the Operative
Documents and (iv) to the extent permitted by subsection 7.3(a)(i) of the
Amended and Restated Partnership Agreement, the performance of the Limited
Partnership's obligations pursuant to any agreements relating to the Exxon
System. In addition, the General Partner shall preserve and maintain its
existence as a limited partnership under the laws of the State of Texas and
its qualification to do business in the States of New Jersey and New York
and in each other jurisdiction in which the conduct of its business
requires such qualification.
18
(b) Payment of Obligations. The Limited Partnership will pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all of its Indebtedness and other
obligations of whatever nature, except for any Indebtedness or other
obligations which are being contested in good faith and by appropriate
proceedings and to the extent that the Limited Partnership is complying
with the relevant provisions of Section 9(l) or 9(m), as applicable.
(c) Performance under Other Agreements. The Limited Partnership shall
duly perform and observe all of the covenants, agreements and conditions on
its part to be performed and observed hereunder and under the LOC Note and
shall duly perform and observe in all material respects all of the
covenants, agreements and conditions on its part to be performed and
observed under the other Operative Documents to which it is a party. The
Limited Partnership shall diligently enforce all of its rights under each
Project Document except to the extent that the failure to enforce such
rights could not reasonably be expected to (i) have a material adverse
effect on the business, operations, property, condition (financial or
otherwise) or prospects of the Limited Partnership or (ii) materially
adversely affect the Limited Partnership's ability to perform its
obligations under the Operative Documents to which it is a party.
(d) Insurance Coverage. Without limiting any of the other obligations
or liabilities of the Limited Partnership under this Agreement, the Limited
Partnership shall at all times carry and maintain at its own expense the
insurance required pursuant to subsection 7.2(f) of the Amended and
Restated Partnership Agreement and the Site Lease Agreement. The Limited
Partnership shall also carry and maintain any other insurance that GECC may
reasonably require from time to time. All insurance carried pursuant to
this subsection shall be with such insurers, in such amounts and in such
form as shall be satisfactory to GECC.
(e) Evidence of Insurance. On each anniversary of the date hereof, the
Limited Partnership shall furnish GECC with approved certification of all
required insurance. Such certification shall be executed by each insurer or
by an authorized representative of each insurer where it is not practical
for such insurer to execute the certificate itself. Such certification
shall identify underwriters, the type of insurance, the insurance limits
and the policy term, shall specifically list the special provisions
enumerated for such insurance required by Section 9(d). Upon request, the
Limited Partnership shall furnish GECC with copies of all insurance
policies, binders and cover notes or other evidence of such insurance
relating to the Facility.
19
(f) Insurance Report. Concurrently with the furnishing of the
certification referred to in Section 9(e), the Limited Partnership shall
furnish GECC with an opinion of an independent insurance broker stating
that all premiums then due have been paid and that, in the opinion of such
broker, the insurance then carried and maintained is in accordance with the
terms of Section 9(d). Furthermore, the Limited Partnership shall cause
such broker to advise GECC promptly in writing of any default in the
payment of any premiums or any other act or omission on the part of any
Person which might invalidate or render unenforceable, in whole or in part,
any insurance provided hereunder. GECC may at its sole option obtain such
insurance if not provided by the Limited Partnership and, in such event,
the Limited Partnership shall reimburse GECC upon demand for the cost
thereof.
(g) No Duty of GECC to Verify. No provision of this Agreement shall
impose on GECC any duty or obligation to verify the existence or adequacy
of the insurance coverage maintained by the Limited Partnership, nor shall
GECC be responsible for any representations or warranties made by or on
behalf of the Limited Partnership to any insurance company or underwriter.
(h) Inspection of Property; Books and Records. The Limited Partnership
shall keep proper books of record and account in which full, true and
correct entries shall be made of all of its transactions in conformity with
GAAP, and the Limited Partnership shall permit representatives of GECC to
visit and inspect its properties, to examine its books of record and
account and to discuss its affairs, finances and accounts with its
principal officers, engineers and independent accountants, all at such
reasonable times during business hours and at such intervals as GECC may
request.
(i) Compliance with Laws. (i) The Limited Partnership shall comply
with all laws, rules, regulations and orders, and shall from time to time
obtain and comply with all Government Approvals as shall now or hereafter
be necessary under applicable law or regulation, except any thereof the
non-compliance with which could not reasonably be expected to (x) have a
material adverse effect on the business, operations, property, condition
(financial or other) or prospects of the Limited Partnership or the rights
or interests of GECC or (y) materially adversely affect the Limited
Partnership's ability to perform its obligations under the Operative
Documents to which it is a party.
(ii) Notwithstanding the foregoing, the Limited Partnership shall cause
all Hazardous Materials on any property owned by the Limited Partnership to
be handled and
20
disposed of in compliance with all Relevant Environmental Laws.
(j) Financial Statements. The Limited Partnership shall furnish or
cause to be furnished to GECC:
(i) as soon as available, but in any event within 90 days after
the end of each fiscal year of the Limited Partnership and the General
Partner, a copy of the balance sheet of each of the Limited
Partnership and the General Partner as of the end of such fiscal year
and the related statements of income and partners' capital and
statements of changes in partners' capital and cash flow of the
Limited Partnership and the General Partner for such fiscal year,
setting forth, after fiscal year 1991, in each case in comparative
form the figures for the previous fiscal year, certified without
qualification or exception as to the scope of its audit by independent
public accountants of national standing reasonably acceptable to GECC;
(ii) as soon as available, but in any event within 60 days after
the end of each quarterly period of each fiscal year of the Limited
Partnership and the General Partner (other than the last quarterly
period of each such fiscal year), the unaudited balance sheet of each
of the Limited Partnership and the General Partner as of the end of
such quarterly period and the related unaudited statements of income
and partners' capital and statements of changes in partners' capital
and cash flow of the Limited Partnership and the General Partner for
such quarterly period and for the portion of the fiscal year then
ended, setting forth, after fiscal year 1991, in each case in
comparative form the figures for the previous period, certified by the
chief executive officer or chief financial officer of the General
Partner (subject to normal year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with
GAAP applied consistently throughout the periods reflected therein (except
for changes approved or required by the independent public accountants
certifying such statements and disclosed therein).
(k) Certificates; Other Information. The Limited Partnership shall
furnish or cause to be furnished to GECC:
(i) concurrently with the delivery of the financial statements
referred to in clauses (i) and (ii) of Section 9(j), a certificate of
a Responsible
21
Officer of the General Partner stating that, to the best of his
knowledge after due inquiry, the Limited Partnership, during the
period covered by such financial statements has observed and performed
in all material respects all of its covenants and other agreements,
and satisfied in all material respects every condition, contained in
this Agreement and the other Operative Documents to be observed,
performed or satisfied by it, and that such Responsible Officer has
obtained no knowledge of any Default or Event of Default hereunder at
any time during such period or on the date of such certificate and no
knowledge of any default or event which with the giving of notice or
the lapse of time or both would constitute a default under any of the
other Operative Documents at any time during such period or on the
date of such certificate (or, if any such Default or Event of Default
or default or event shall have occurred, a statement setting forth the
nature thereof and the steps being taken by the Limited Partnership to
remedy the same);
(ii) promptly after the same are sent, copies of all financial
statements and reports which the Limited Partnership sends to its
partners;
(iii) promptly after the filing thereof, the "Annual Returns"
(Form 5500 series) and attachments filed annually with the Internal
Revenue Service with respect to each Single Employer Plan, if any, of
the Limited Partnership;
(iv) with respect to any Single Employer Plan adopted or amended
by the Limited Partnership or the General Partner or any Commonly
Controlled Entity on or after the first date hereof, any determination
letters received from the Internal Revenue Service with respect to the
qualification of such Plan, as initially adopted or amended under
Section 401(a) of the Code;
(v) promptly after delivery or receipt thereof, a copy of each
material notice, demand or other communication delivered by or
received by the Limited Partnership pursuant to any Operative
Document; and
(vi) promptly, such additional financial and other information
with respect to the Limited Partnership, the General Partner or the
Project as GECC may from time to time reasonably request.
(l) Taxes and Claims. The Limited Partnership shall pay and discharge
all taxes, assessments and governmental charges or levies imposed on it or
on its income or profits
22
or on any of its property prior to the date on which penalties attach
thereto, and all lawful claims which, if unpaid, might become a Lien upon
the property of the Limited Partnership. The Limited Partnership shall have
the right, however, to contest in good faith the validity or amount of any
such tax, assessment, charge, levy or claim by proper proceedings timely
instituted, and may permit the taxes, assessments, charges, levies or
claims so contested to remain unpaid during the period of such contest if:
(a) the Limited Partnership diligently prosecutes such contest, (b) the
Limited Partnership establishes a cash reserve in conformity with GAAP with
respect to such contested item, (c) during the period of such contest the
enforcement of any contested item is effectively stayed; provided, however,
that this clause (c) shall apply to contested income taxes of a partner of
the Limited Partnership only if the failure to pay such tax may then become
a Lien on any part of the Project or may interfere with the operation of
the Facility, and (d) in the reasonable opinion of GECC, such contest does
not involve any substantial danger of the sale, forfeiture or loss of any
part of the Project, title thereto or any interest therein and does not
interfere with the operation of the Facility. The Limited Partnership will
promptly pay or cause to be paid any valid, final judgment enforcing any
such tax, assessment, charge, levy or claim and cause the same to be
satisfied of record.
(m) Mechanics' and Materialmen's Liens. The Limited Partnership shall
protect and defend its interest in the Project against any Lien for the
performance of work or the supply of materials filed against the Project,
and shall remove any such Lien; provided, that the Limited Partnership
shall have the right to contest in good faith any such Lien by proper
proceedings timely instituted, and may permit such Lien to exist during the
period of such contest if: (i) the Limited Partnership diligently
prosecutes such contest, (ii) the Limited Partnership establishes a cash
reserve in conformity with GAAP with respect to such contested item, (iii)
during the period of such contest the enforcement of any contested item and
the Lien relating thereto is effectively stayed, and (iv) in the reasonable
opinion of GECC, such contest does not involve any substantial danger of
the sale, forfeiture or loss of any part of the Project, title thereto or
any interest therein and does not interfere with the operation of the
Facility. The Limited Partnership will promptly pay or cause to be paid any
valid, final judgment enforcing any such item, cause the Lien relating
thereto to be removed and otherwise cause such item to be satisfied of
record.
(n) Maintenance of Property. The Limited Partnership, at its expense,
shall keep all property useful and necessary
23
to its business in good working order and condition and make all repairs,
replacements and renewals with respect thereto and additions and
betterments thereto which are necessary for such property to comply with
all Requirements of Law affecting it and all requirements of the
appropriate Board of Fire Underwriters or other similar body acting in and
for the locality in which such property is located.
(o) Notices. The Limited Partnership will promptly give notice to
GECC:
(i) of the occurrence of any Default, Event of Default, Event of
Loss or Special Event;
(ii) of the occurrence of any default or event of default under
any Operative Document other than this Agreement;
(iii) of any litigation, investigation or proceeding affecting the
Limited Partnership or the General Partner in which the amount
involved is $500,000 or more or in which injunctive or similar relief
is sought;
(iv) of the following events, as soon as possible and in any
event within 10 days after the Limited Partnership knows or has reason
to know of the following events: (i) the occurrence or expected
occurrence of any Reportable Event with respect to any Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by PBGC, the Limited Partnership, any
Commonly Controlled Entity or any Multiemployer Plan with respect to
the withdrawal from, or the terminating, Reorganization or Insolvency
of, any Plan; and
(v) of the receipt by the Limited Partnership of any
Environmental Notice or of any notice of any event that creates a
material likelihood of the occurrence of an Adverse Environmental
Event.
Each notice pursuant to this subsection shall be accompanied by a statement
of a Responsible Officer of the General Partner setting forth details of
the occurrence referred to therein and stating what action the Limited
Partnership proposes to take with respect thereto. For all purposes of
clause (iv) of this subsection, the Limited Partnership shall be deemed to
have all knowledge or knowledge of all facts attributable to the
administrator of such Plan.
24
(p) Agent for Service of Process. The Limited Partnership shall
appoint and continuously retain CT Corporation System, or such other agent
as shall be reasonably acceptable to GECC, as its agent in the State of New
York for receipt of service of process and shall pay all costs, fees, and
expenses in connection therewith. The Limited Partnership has paid all fees
necessary to retain CT Corporation System or such other agent for such
purposes for the forthcoming 12-month period.
(q) Employee Plans. For each Plan adopted by the Limited Partnership
which is an employee benefit plan as defined in Section 3(2) of ERISA, the
Limited Partnership shall (a) use its best efforts to seek and receive
determination letters from the Internal Revenue Service to the effect that
such Plan is qualified within the meaning of Section 401(a) of the Code;
and (b) from and after the date of adoption of any such Plan, cause such
Plan to be qualified within the meaning of Section 401(a) of the Code and
to be administered in all material respects in accordance with the
requirements of ERISA and Section 401(a) of the Code.
(r) Fiscal Year. The fiscal year of the Limited Partnership shall be a
calendar year.
10. Negative Covenants. So long as any amount remains available to be
drawn under any Letter of Credit or any amount is owing to GECC hereunder, the
Limited Partnership agrees that:
(a) Merger, Sale of Assets, Purchases, Etc. The Limited Partnership
shall not merge into or consolidate with any other Person, change its form
of organization or its business, or liquidate or dissolve itself (or suffer
any liquidation or dissolution), or sell, lease, transfer or otherwise
dispose of all or any material part of the Project or any substantial
portion of the Limited Partnership's other assets (including, without
limitation, its leasehold interest in the Site) other than sales of
electric power and sales of steam. The Limited Partnership will not
purchase or acquire any assets other than (x) the purchase of assets in
connection with the operation and/or maintenance of the Project and (y)
Cash Equivalents.
(b) Indebtedness; Guarantee Obligations. The Limited Partnership shall
not create, incur, assume or suffer to exist any Indebtedness or Guarantee
Obligations, except Indebtedness of the Limited Partnership to GECC
pursuant to this Agreement and as otherwise permitted by the Amended and
Restated Partnership Agreement.
25
(c) Distributions, Etc. The Limited Partnership shall not, without the
prior written consent of GECC, make any distributions to its partners or to
any other Person in respect of any partnership interest in the Limited
Partnership or any payments of management fees to any Partner, whether in
cash or other property, or redeem, purchase or otherwise acquire any
interest of any Partner in the Limited Partnership, or permit any Partner
to withdraw any capital from the Limited Partnership, except pursuant to
and as otherwise permitted by the Amended and Restated Partnership
Agreement.
(d) Liens. The Limited Partnership shall not create or suffer to exist
any Lien on any of its properties or assets, other than Permitted Liens.
(e) Nature of Business. The Limited Partnership shall not engage in
any business other than as permitted by the Amended and Restated
Partnership Agreement.
(f) Amendment of Contracts. Etc. The Limited Partnership will not,
without the prior written consent of GECC, agree to or permit (a) the
cancellation, suspension or termination of any Operative Document (except
upon the expiration of the stated term thereof), (b) the assignment of the
rights or obligations of any party to any Operative Document except as
permitted without the consent of the Limited Partnership by the terms of
such Operative Document, or (c) any amendment, supplement or modification
of, or waiver with respect to any of the provisions of, any Operative
Document to which the Limited Partnership or the General Partner is a party
or with respect to which the consent of the Limited Partnership or the
General Partner is required.
(g) Investments. The Limited Partnership shall not make any
investments (whether by purchase of stock, bonds, notes or other
securities, loan, advance or otherwise) other than investments in Cash
Equivalents.
(h) Change of Office. The Limited Partnership shall not change the
location of its chief executive office or principal place of business or
the office where it keeps its records concerning the Project and contracts
relating thereto from that existing on the date of this Agreement and
specified in Section 7(n), unless the Limited Partnership shall have given
GECC at least 30 days' prior written notice thereof.
(i) Change of Name. The Limited Partnership shall not change its name
except on at least 60 days' prior written notice to GECC.
26
(j) Compliance with ERISA. The Limited Partnership shall not (a)
terminate any Single Employer Plan so as to result in any material
liability to PBGC, (b) engage in or permit any Affiliate to engage in any
"prohibited transaction" (as defined in Section 406 of ERISA or Section
4975 of the Code) involving any Plan which would subject the Limited
Partnership to any material tax, penalty or other liability, (c) incur or
suffer to exist any material "accumulated funding deficiency" (as defined
in Section 302 of ERISA), whether or not waived, involving any Plan subject
to Section 412 of the Code or Part 3 of Title I(b) of ERISA, (d) allow or
permit to exist any event (including a Reportable Event) or condition which
represents a material risk of incurring a material liability to PBGC, or
(e) permit the present value of all benefits vested under all Single
Employer Plans subject to Title IV of ERISA, based on those assumptions
used to fund the Plans, as of any valuation date with respect to such Plans
to exceed the value of the assets of the Plans allocable to such benefits
by a material amount.
(k) Transactions with Affiliates and Others. The Limited Partnership
shall not, directly or indirectly, purchase, acquire, exchange or lease any
property from, or sell, transfer or lease any property to, or borrow any
money from, or enter into any management or similar fee arrangement with,
any Affiliate or any officer, director or employee of the Limited
Partnership or the General Partner, except for (a) the transactions
contemplated by the Amended and Restated Partnership Agreement, (b) loans
to the Limited Partnership from the General Partner from the proceeds of
the Working Capital Account (as defined in the Amended and Restated Term
Loan Agreement, dated as of September __, 1992, between the General Partner
and the Owner Trustee (the "GP Term Loan Agreement")) in accordance with
the GP Term Loan Agreement and (c) transactions in the ordinary course of
business and upon fair and reasonable terms no less favorable than the
Limited Partnership could obtain, or could become entitled to, in an arm's
length transaction with a Person which is not an Affiliate.
11. Events of Default. If any of the Events of Default listed below
in this Section 11 shall occur and be continuing, GECC may, (i) by notice to the
Limited Partnership, declare the Letter of Credit Commitment to be terminated,
whereupon the same shall forthwith terminate; and/or (ii) declare all
Obligations (including without limitation, obligations in respect of the Letters
of Credit, although contingent and unmatured) to be forthwith due and payable,
whereupon such amounts shall become and be forthwith due and payable, without
presentment, demand, protest, or notice of any kind, all of which are hereby
expressly waived by the Limited Partnership; and/or
27
(iii) demand that the Limited Partnership discharge any or all the obligations
supported by the Letters of Credit by paying or prepaying any amount due or to
become due in respect of such obligations and/or (iv) proceed to enforce all
other remedies available to it under applicable law. Notwithstanding the
foregoing, if an Event of Default referred to in paragraph (e) or (f) below
shall occur, automatically and without notice the actions described in clauses
(i) and (ii) above shall be deemed to have occurred.
Such Events of Default are the following:
(a) Any reimbursement obligation in respect of a drawing under any
Letter of Credit shall not be paid when due; or any interest on any such
reimbursement obligation or any fee or any other amount payable to GECC
hereunder or under the LOC Note shall not be paid when due and shall remain
unpaid for five or more days; or
(b) Any representation or warranty made by the Limited Partnership
herein or by the Limited Partnership or the General Partner in any other
Operative Document (other than any Project Document) to which the Limited
Partnership or the General Partner is a party, or any representation,
warranty or statement in any certificate, financial statement or other
document furnished to GECC by or on behalf of the Limited Partnership or
the General Partner hereunder or to the Limited Partner by or on behalf of
the Limited Partnership or the General Partner under any Operative Document
(other than any Project Document), shall prove to have been false or
misleading as of the time made or deemed made; or
(c) The Limited Partnership or the General Partner shall fail to
perform or observe any of its covenants contained in this Agreement (other
than those referred to paragraph (a) above) or in any other Operative
Document (other than any Project Document) to which it is a party and such
failure shall continue unremedied for a period of 30 days after written
notice thereof from GECC to the Limited Partnership; provided, however,
that if such default is susceptible of cure, such 30 day period shall be
extended for such period of time (not to exceed 60 days) during which the
Limited Partnership or the General Partner, as the case may be, shall be
diligently using its best efforts to cure such default; or
(d) (i) The Limited Partnership or the General Partner, with respect
to any Indebtedness or Guarantee Obligation, the principal amount of which
exceeds $500,000, shall (i) default in any payment of principal of or
interest on any such Indebtedness (other than any Letter of Credit
28
and the LOC Note) or Guarantee Obligation beyond the period of grace (not
to exceed 30 days), if any, provided in the instrument or agreement under
which such Indebtedness or Guarantee Obligation was created, or (ii)
default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or Guarantee Obligation or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of
which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness (or a trustee or agent on behalf of
such holder or holders) or the beneficiary or beneficiaries of such
Guarantee Obligation (or a trustee or agent on behalf of such beneficiary
or beneficiaries) to cause, with the giving of notice if required or the
passage of time, or both, such Indebtedness to become due prior to its
stated maturity or such Guarantee Obligation to become payable; or
(e) Either the Limited Partnership or the General Partner shall (i)
apply for or consent to the appointment of, or the taking of possession by,
a receiver, custodian, trustee or liquidator of itself or of all or a
substantial part of its property, (ii) admit in writing its inability, or
be generally unable, to pay its debts as such debts become due, (iii) make
a general assignment for the benefit of its creditors, (iv) commence a
voluntary case under the Federal Bankruptcy Code (as now or hereafter in
effect), (v) file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding up, or
composition or readjustment of debts, (vi) fail to controvert in a timely
and appropriate manner, or acquiesce in writing to, any petition filed
against such Person in an involuntary case under the Bankruptcy Code, or
(vii) take any partnership or corporate action for the purpose of effecting
any of the foregoing; or
(f) A proceeding or case shall be commenced without the application
or consent of the Limited Partnership or the General Partner, in any court
of competent jurisdiction, seeking (i) its liquidation, reorganization,
dissolution, winding-up, or the composition or readjustment of debts, (ii)
the appointment of a trustee, receiver, custodian, liquidator or the like
of the Limited Partnership or the General Partner, under any law relating
to bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts or (iii) a warrant of attachment, execution or similar
process against all or a substantial part of the assets of the Limited
Partnership or the General Partner, and such proceeding or case shall
continue undismissed, or any order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue
29
unstayed and in effect, for a period of 60 or more days, or any order for
relief against such Person shall be entered in an involuntary case under
the Federal Bankruptcy Code (as now or hereafter in effect); or
(g) A judgment or judgments for the payment of money in excess of
$1,000,000 shall be rendered against the Limited Partnership and such
judgment or judgments shall remain in effect and unstayed and unbonded for
a period of 60 or more consecutive days; or
(h) The General Partner shall at any time cease to be the managing
general partner of the Limited Partnership, or shall transfer, sell,
assign, mortgage, pledge or otherwise dispose of its partnership interest
in the Limited Partnership without GECC's prior written consent, except as
contemplated by the General Partner Credit Agreement and the Amended and
Restated Partnership Agreement; or
(i) (i) Robert McNair or his wife or children shall fail to own and
control, directly or indirectly, a beneficial interest of at least 8.2% in
the General Partner until the expiration of seven years after the Second
Capital Contribution Date and (ii) thereafter, Robert McNair or his wife or
children or an entity with a net worth equal to at least $100,000,000 shall
fail to own and control, directly or indirectly, a beneficial interest of
at least 8.2% in the General Partner; or
(j) The Limited Partnership shall abandon the Project or otherwise
cease to diligently pursue the development or construction of the Project
for a period of longer than 30 days; or
(k) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan, or
(iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate any Single Employer Plan, which Reportable Event
or institution of proceedings is, in the reasonable opinion of GECC,
likely, to result in the termination of such Plan for purposes of Title IV
of ERISA, or (iv) any Single Employer Plan shall terminate under Section
4041(c) of ERISA, or (v) the General Partner or any Commonly Controlled
Entity shall, or is, in the reasonable opinion of GECC, likely to incur
any liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan, or (vi) any other event or
condition shall occur or exist with
30
respect to a Plan; and in each case in clauses (i) through (vi) above, such
event or condition, together with all other such events or conditions, if
any, could subject the Limited Partnership to any tax, penalty or other
liabilities in the aggregate material in relation to the business,
operations, property or financial or other condition of the Limited
Partnership; or
(1) At any time, (i) the Limited Partnership shall fail to pay,
satisfy or otherwise obtain a release of any bond or lien for the
performance of work or the supply of materials filed against the Site
within 20 days of the Limited Partnership's or the General Partner's
becoming aware of the filing thereof unless, if any such Lien arose in
connection with a claim referred to in subsection 7.2(a)(1) of the Amended
and Restated Partnership Agreement, the Limited Partnership shall be
diligently contesting the same in accordance with, and subject to,
subsection 7.2(a)(1) of the Amended and Restated Partnership Agreement or
(ii) any right, title or interest of the Limited Partnership in and to the
Site or any beneficial ownership interest of the General Partner in the
Limited Partnership shall be levied upon, attached or seized pursuant to a
court order and such order is not vacated or stayed within 20 days of entry
of such order; or
(m) (i) Any Participant, other than the Limited Partnership, shall
fail to perform or observe in any material respect any of its covenants or
obligations contained in any of the Project Documents to which it is a
party within the grace period, if any, provided for in such Project
Documents, which failure shall continue unremedied for a period of 30 days
after notice by the Limited Partner to the Limited Partnership or (ii) (x)
any material provision of any Operative Document shall at any time for any
reason cease to be valid and binding or in full force and effect (other
than as a result of any action by the Limited Partner or GECC) or any party
thereto (other than the Limited Partner or GECC) shall so assert in
writing, (y) any material provision of any Operative Document shall be
declared to be null and void (other than as a result of any action by the
Limited Partner or GECC) or (z) any party thereto shall deny that it has
any further liability or obligation under any Operative Document to which
it is a party; provided that it shall not be an Event of Default under this
paragraph (m) if, (1) within 30 days after the occurrence of any of the
foregoing events with respect to any Project Document (other than the Site
Lease Agreement, the Power Sale Agreement or the Gas Transportation and
Swing Supply Agreement), the Managing General Partner shall have submitted
a plan to the Limited Partner to execute and deliver a document in
substitution for such Project
31
Document, which plan shall be reasonably satisfactory in form and substance
to GECC, and (2) within 90 days after the occurrence of any of the
foregoing events with respect to any Project Document (other than the Site
Lease Agreement, the Power Sale Agreement or the Gas Transportation and
Swing Supply Agreement), such Project Document shall have been replaced
with another document (x) which is executed and delivered by parties
acceptable to GECC in its reasonable discretion and (y) which has terms and
conditions similar to, and in the reasonable opinion of GECC, at least as
favorable to the Project as, the substituted Project Document; or
(n) The dissolution and liquidation of the General Partner without the
prior written consent of GECC unless (i) an entity meeting the requirements
of subsection 10.1 of the Amended and Restated Partnership Agreement
succeeds to the General Partner's interest thereunder or (ii) the ultimate
result of such dissolution and liquidation is the incorporation of the
General Partner and the ownership provisions of such subsection 10.1 apply
to such corporation which shall be admitted as a general partner of the
Limited Partnership in accordance with subsection 10.2 of the Amended and
Restated Partnership Agreement; or
(o) The Limited Partnership shall cease to have a valid leasehold
interest in the Site or good title to the Project, in each case, free and
clear of all Liens other than Permitted Liens; or
(p) At any time, there shall fail to be an adequate supply of water to
the Facility to meet all reasonable requirements for the operation and
maintenance of the Facility; provided that it shall not be an Event of
Default under this paragraph (p) if the Managing General Partner complies
with the proviso to subsection 11(m) hereof with respect to the Water
Supply Commitment in such a manner as will ensure, in the reasonable
opinion of GECC, that there will be such an adequate supply of water to the
Facility; or
(q) If Exxon shall operate the Facility as set forth in Section
11.6B(ii) of the Steam Supply Agreement, unless such operation is pursuant
to an operating agreement to which the Preferred Limited Partner has given
its prior written consent in accordance with subsection 7.3(a)(i) of the
Amended and Restated Partnership Agreement; or
(r) At any time, the Managing General Partner shall fail to follow any
gas purchase plan approved by the Limited Partner pursuant to subsection
7.2(n) of the Amended and Restated Partnership Agreement; or
32
(s) A Special Event described in subsection 14.1(q) of the Amended and
Restated Partnership Agreement shall have occurred and be continuing.
Upon the occurrence of and during the continuance of any Event of
Default, all remedies available to GECC under this Agreement or by statute or by
rule of law may be exercised by GECC at any time and from time to time whether
or not any reimbursement obligations in respect of the Letters of Credit shall
be due and payable, and whether or not GECC shall have instituted any action for
the enforcement of this Agreement or the LOC Note. For the purpose of carrying
out the provisions and exercising the rights, powers and privileges granted by
this paragraph, the Limited Partnership hereby irrevocably constitutes and
appoints GECC its true and lawful attorney-in-fact to execute, acknowledge and
deliver any instruments and to do and to perform any acts such as are referred
to in this paragraph in the name and on behalf of the Limited Partnership. This
power of attorney is a power coupled with an interest and cannot be revoked.
12. Amendments and Waivers. No provision of this Agreement, the LOC
Note or any Letter of Credit may be amended, supplemented, modified or waived,
except in accordance with the terms of this Section 12. The Limited Partnership
and GECC may, from time to time, enter into written amendments, supplements or
modifications hereto for the purpose of adding any provisions to, or changing in
any manner the rights of GECC or of the Limited Partnership under, this
Agreement or the LOC Note or, with the consent of the beneficiary thereof, any
Letter of Credit, and GECC may execute and deliver to the Limited Partnership a
written instrument waiving, on such terms and conditions as GECC may specify in
such instrument, any of the requirements of this Agreement, the LOC Note or,
with the consent of the beneficiary thereof, any Letter of Credit, or any
Default or Event of Default and its consequences. Any such waiver and any such
amendment, supplement or modification shall be binding upon the Limited
Partnership, the beneficiaries of the Letters of Credit and all future holders
of the LOC Note.
13. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing, by telecopier, or
if available, by telex and, unless otherwise expressly provided herein, shall be
deemed to have been duly given or made when delivered by hand, or when deposited
in the mail, first class postage prepaid, or in the case of transmission by
telecopier, when confirmation of receipt is obtained, or in the case of telex
notice, when sent, answerback received, addressed as follows or to such other
address as may be hereafter notified by the respective parties hereto and any
future holders of the LOC Note:
33
The Limited Cogen Technologies Linden Venture, L.P.
Partnership: c/o Cogen Technologies
1600 Smith Street
Suite 5000, 50th Floor
Houston, Texas 77002
Attention: Robert C. McNair
Telecopy: (713) 951-7747
GECC: General Electric Capital Corporation
TIFC
1600 Summer Street
Stamford, Connecticut 06927
Attention: Energy Project Operations
Telecopy: (203) 357-6366
with a copy to:
General Electric Power Funding Corporation
One River Road
Building Two
Schenectady, New York 12345
Attention:
Telecopy: (518) 385-3649
Except that any notice, request or demand to or upon GECC pursuant to
subsections 2(a) and 2(b) shall not be effective until received by GECC.
14. No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of GECC, 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.
15. Severability. Any provision hereof which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and without affecting the validity or enforceability
of any provision in any other jurisdiction.
16. Headings. The headings of the various sections and paragraphs of
this Agreement are for convenience of reference only, do not constitute a part
hereof and shall
34
not affect the meaning or construction of any provision hereof.
17. Counterparts. This Agreement may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
18. GECC Sole Beneficiary. All conditions of the obligations of GECC
to issue the Letters of Credit hereunder are imposed solely and exclusively for
the benefit of GECC and its assigns and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that GECC will refuse to issue the Letters of Credit in the
absence of strict compliance with any or all of such conditions and no Person
shall, under any circumstances, be deemed to be a beneficiary of such
conditions, any or all of which may be freely waived in whole or in part by GECC
at any time if in its sole discretion it deems it advisable to do so. GECC is
obligated hereunder solely to maintain and issue the Letters of Credit and honor
drawings thereunder if and to the extent required by this Agreement and the
Letters of Credit.
19. GOVERNING LAW. THIS AGREEMENT, THE LOC NOTE AND THE LETTERS OF
CREDIT (TO THE EXTENT NOT INCONSISTENT WITH THE UCP) AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT, THE LETTERS OF CREDIT AND THE
LOC NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
20. Submission to Jurisdiction; Waivers. (A) The Limited Partnership
hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement, the Letters of Credit or the LOC
Note, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts, and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in any inconvenient court and agrees not
to plead or claim the same;
35
(iii) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Limited Partnership at its address set forth in Section 13 or at such other
address of which the Lender shall have been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction.
(B) THE LIMITED PARTNERSHIP AND GECC HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING REFERRED
TO IN PARAGRAPH (A) ABOVE.
21. Indemnification. The Limited Partnership agrees to pay, indemnify
and hold GECC and its affiliates, directors and officers harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including without limitation at any time
following the payment of the LOC Note) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or the other Operative Documents, or any documents contemplated by or referred
to herein or therein or the transactions contemplated hereby or thereby (all of
the foregoing, collectively, the "indemnified liabilities"), provided, that the
Limited Partnership shall have no obligation hereunder to any such Person with
respect to indemnified liabilities arising from (i) the gross negligence or
willful misconduct of any such Person, (ii) legal proceedings commenced against
any such Person by any security holder or creditor of any such Person arising
out of and based upon rights afforded any such security holder or creditor
solely in its capacity as such, or (iii) legal proceedings commenced against any
such Person by any Transferee. The agreements in this subsection shall survive
repayment of the LOC Note and all other amounts payable hereunder.
22. Expenses. Whether or not any Letter of Credit is issued or any of
the other transactions contemplated by this Agreement are consummated, the
Limited Partnership shall pay (i) all reasonable out-of-pocket expenses incurred
by GECC with respect to the negotiation, preparation, execution and delivery of,
and the consummation of the transactions contemplated by, this Agreement, the
LOC Note, the Letters of Credit and any amendments or other modifications hereof
or
36
thereof and (ii) natural and customary costs and expenses as are incurred by
GECC, from time to time, in issuing, effecting payment under or administering
any Letter of Credit (including, without limitation, amendment and transfer
fees).
23. Successor and Assigns; Transferees; Transferred Interests. (a)
This Agreement shall be binding upon and inure to the benefit of the Limited
Partnership, GECC, all future holders of the LOC Note and their respective
successors and assigns, except that the Limited Partnership may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of GECC.
(b) The Limited Partnership acknowledges that GECC may at any time
sell, assign, transfer, grant participations in, or otherwise dispose of a
portion of its right, title and interest in any Letter of Credit, the LOC Note
or in this Agreement (collectively, "Participations") to one or more Persons
(such Persons being herein called "Transferees"); provided, however, that (i)
GECC's obligations under this Agreement and the Letters of Credit shall remain
unchanged, and (ii) the Limited Partnership shall continue to deal solely and
directly with GECC in connection with GECC's rights and obligations under this
Agreement and the Letters of Credit.
(c) The Limited Partnership authorizes GECC to disclose to any
prospective Transferee pursuant to paragraph (b) of this Section 23 all
financial and other necessary information in GECC's possession concerning the
Letters of Credit, any Partner or the Project which has been delivered to GECC
by or on behalf of the Limited Partnership pursuant to this Agreement or any
other Operative Document or which has been delivered to GECC by or on behalf of
the Limited Partnership or any Affiliate of the Limited Partnership in
connection with GECC's credit evaluation of the Limited Partnership and the
Project prior to or after entering into this Agreement, provided, however, that
if any such information furnished to GECC is marked in writing as being
confidential information, GECC shall use reasonable efforts to preserve the
confidentiality of such information.
IN WITNESS WHEREOF, the parties hereto have caused this Letter of
Credit and Reimbursement Agreement to be duly executed as of the date first
above written.
COGEN TECHNOLOGIES LINDEN VENTURE, L.P.,
By: Cogen Technologies Linden, Ltd.
(d/b/a Cogen Technologies
Linden, Limited Partnership
in the State of New Jersey),
its General Partner
By: Cogen Technologies, Inc.,
its General Partner
By: /s/ Signature Appears Here
---------------------------------
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Signature Appears Here
---------------------------------
Title: Vice President
SCHEDULE 1 TO
REIMBURSEMENT AGREEMENT
EXISTING LETTERS OF CREDIT
LOC NO. BENEFICIARY MATURITY FACE AMOUNT
CT-03 Public Service July 1, 1996 4,000,000
Electric and Gas
Company and
Elizabethtown Gas
Company
CT-02 Exxon Corporation August 1, 1993 10,000,000
EXHIBIT A TO
REIMBURSEMENT
AGREEMENT
[________________], 19__
[Form of Irrevocable Letter of Credit]
Consolidated Edison Company
of New York, Inc.
4 Irving Place
New York, New York 10003
Attention:
Re: Linden Cogeneration Project
Irrevocable Letter of Credit No.
Dear Ladies and Gentlemen:
At the request and on the instructions of our customer Cogen Technologies
Linden Venture L.P., a Delaware limited partnership (the "Partnership"), we
hereby establish our Irrevocable Letter of Credit No. ___ in favor of
Consolidated Edison Company of New York, Inc. ("Con Ed"), 4 Irving Place, New
York, New York 10003 and authorize you to draw on General Electric Capital
Corporation ("GECC") in an amount (the "Stated Amount") at any date not to
exceed the amount set forth on Schedule 1 which corresponds to the time period
during which any event described in paragraph 1 of a Drawing Certificate (as
defined below) occurs.
Funds under this Letter of Credit are available to you against a sight
draft accompanied by (i) a drawing certificate in the form of Exhibit A (the
"Drawing Certificate") attached hereto and (ii) the original of this Letter of
Credit.
We hereby agree with the drawers, endorsers, and bona fide holders of any
draft drawn under and in compliance with the terms of this Letter of Credit that
such draft will be duly honored by us upon presentation.
Any draft so drawn will be honored by GECC if presented to our office at
1600 Summer Street, Stamford, Connecticut 06927, prior to the close of business
on the expiration date. The expiration date of this Letter of Credit is June 30,
1998.
All payments shall be made as directed in a Drawing Certificate with
written confirmation thereof sent to Con Ed at 4 Irving Place, New York, New
York 10003, in U.S. Dollars and immediately available funds.
2
Any references in this Letter of Credit or in any certificate hereto to any
other document shall not be deemed to incorporate such document in this Letter
of Credit or in any certificate hereto.
Upon payment to you of any amount demanded hereunder, we shall be fully
discharged of our obligation under this Letter of Credit with respect to such
amount, and we shall not thereafter be obligated to make any further payments
under this Letter of Credit in respect of such amount to you or to any other
person.
This Letter of Credit sets forth in full our understanding and such
understanding shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument, or agreement referred to herein.
This Letter of Credit is subject to, and shall be governed by and construed
in accordance with, the Uniform Customs and Procedure for Documentary Credits
(1983 Revision), Publication No. 400 of the International Chamber of Commerce,
and, to the extent not inconsistent therewith, with the laws of the State of New
York (including, without limitation, Article 5 of the Uniform Commercial Code of
the State of New York).
Very truly yours,
General Electric Capital
Corporation
By: ______________________________
Title
SCHEDULE 1
AMOUNT OF LETTER OF CREDIT
Amount
During
Time Period Time Period
----------- -----------
July 1, 1993 - June 30, 1994 $ 29,890,000
July 1, 1994 - June 30, 1995 77,210,000
July 1, 1995 - June 30, 1996 103,860,000
July 1, 1996 - June 30, 1997 110,700,000
July 1, 1997 - June 30, 1998 47,170,000
EXHIBIT A to
LETTER OF CREDIT
[FORM OF DRAWING CERTIFICATE]
GENERAL ELECTRIC CAPITAL
CORPORATION
1600 Summer Street
Stamford, Connecticut 06927
Attention:
Re: Linden Cogeneration Project
Irrevocable Letter of Credit No.
Ladies and Gentlemen:
Reference is made to that certain Letter of Credit dated _______________,
19__ (the "Letter of Credit"), opened for the benefit of the undersigned by
General Electric Capital Corporation ("GECC"). Terms defined in the Letter of
Credit and not otherwise defined herein are used herein with the meanings so
defined.
The undersigned hereby certifies that:
1. (a) The Power Purchase Agreement dated as of April 14, 1989 (as
amended and in effect, the "Power Sale Agreement") between Con Ed and Cogen
Technologies, Inc., as assigned to Cogen Technologies Linden Venture, L.P. (the
"Partnership"), has been terminated by reason of the Partnership's breach of
that agreement.
OR
(b) The Power Sale Agreement has been terminated by the Partnership
pursuant to Article 12.3(B) of that agreement.
2. Pursuant to subsection 5.1(A) of the Power Sale Agreement, the
amount of the accompanying draft does not exceed the amount by which (a) the
Present Worth (as defined in the Power Sale Agreement) of payments for
Deliveries (as defined in the Power Sale Agreement) and curtailed kwh subject to
pricing under subsection 4.5 of the Power Sale Agreement exceeds (b) the sum of
(i) the Present Worth of LRAC (as defined in the Power Sale Agreement) plus (ii)
cumulative interest at the rate of 11% from the Date of Initial Commercial
operation (as defined in the Power Sale Agreement) to the date of termination of
the Power Sale Agreement on the excess of the amount in clause 2(a) above over
the amount in clause 2(b)(i) above.
2
3. The amount of the accompanying draft does not exceed the amount set
forth in Schedule 1 of the Letter of Credit for the time period during which any
event specified in paragraph I above occurred.
You hereby are instructed to pay funds advanced under the Letter of Credit
pursuant to the accompanying draft by wire transfer within the United States of
immediately available funds to account number ____________ at _______________,
Attention: ____ .
IN WITNESS WHEREOF, the undersigned has caused this Drawing Certificate to
be executed and delivered by its officer thereunto duly authorized as of the
__ day of _______________, ____ .
CONSOLIDATED EDISON COMPANY OF
NEW YORK, INC.
By:
----------------------------------
Name:
Title:
EXHIBIT B TO
REIMBURSEMENT
AGREEMENT
FORM OF LOC NOTE
$120,700,000 New York, New York
September 17, 1992
FOR VALUE RECEIVED, the undersigned, Cogen Technologies Linden Venture,
L.P., a Delaware limited partnership (the "Limited Partnership"), hereby
unconditionally promises to pay on demand, to the order of GENERAL ELECTRIC
CAPITAL CORPORATION ("GECC") at the office of GECC located at 1600 Summer
Street, Stamford, Connecticut 06927, in lawful money of the United States of
America and in immediately available funds, the principal amount of ONE HUNDRED
TWENTY MILLION SEVEN HUNDRED THOUSAND DOLLARS ($120,700,000) or, if less, the
aggregate unreimbursed amount of all payments made by GECC under all Letters of
Credit issued or maintained by GECC pursuant to the Reimbursement Agreement
referred to below.
The Borrower further agrees to pay interest at said office, in like money,
on the unreimbursed amount hereof on the dates and at the applicable rates per
annum specified in subsection 3(a) of the Reimbursement Agreement, until such
unreimbursed amount is paid in full.
This Note is the LOC Note referred to in the Reimbursement Agreement, dated
as of September 17, 1992 (as the same may from time to time be amended, modified
or supplemented, the "Reimbursement Agreement"), between the Limited Partnership
and GECC and is entitled to the benefits thereof.
This Note and the rights and obligations of the parties hereunder shall be
governed by, and construed and interpreted in accordance with, the law of the
State of New York.
COGEN TECHNOLOGIES LINDEN VENTURE, L.P.
By: Cogen Technologies Linden, Ltd.
(d/b/a Cogen Technologies Linden,
Limited Partnership in the State
of New Jersey), its General Partner
By: Cogen Technologies, Inc.,
its General Partner
By: /s/ Signature Appears Here
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Title: Vice President