Exhibit 10.30
MASTER AGREEMENT dated as of July 31, 2000 (the AGREEMENT) among LIBERTY
ELECTRIC PA, LLC, a special purpose limited liability company incorporated under
the laws of the State of Delaware (the BORROWER), LIBERTY ELECTRIC POWER, LLC, a
special purpose limited liability company incorporated under the laws of the
State of Delaware (the PROJECT COMPANY and, collectively with the Borrower, the
OBLIGORS), each of the lenders that is a signatory hereto identified under the
caption "Bank Lenders" on the signature pages hereto or which, pursuant to
Section 12.4 hereof shall become a Bank Lender hereunder (individually, a BANK
LENDER and, collectively, the BANK LENDERS), each of the lenders that is a
signatory hereto identified under the caption "Institutional Lenders" on the
signature pages hereto or which, pursuant to Section 12.4 hereof, shall become
an Institutional Lender hereunder (individually, an INSTITUTIONAL LENDER and,
collectively, the INSTITUTIONAL LENDERS and, collectively with the Bank Lenders,
the LENDERS), and THE CHASE MANHATTAN BANK, as Administrative Agent (the
ADMINISTRATIVE AGENT).
The Borrower has requested that the Lenders make loans and/or provide letters of
credit to it as described more specifically below. The Lenders are prepared to
make such loans and/or provide such letters of credit upon the terms and
conditions hereof, and, accordingly, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
1.1 DEFINED TERMS
Unless otherwise specified herein, capitalized terms used in the Master
Agreement shall have the meanings assigned to such terms in Appendix A hereto,
which Appendix A shall be incorporated by reference herein. References in
Appendix A to "this Agreement" or "this Master Agreement" (including, without
limitation, indirect references such as "hereof", "herein" and "hereto") shall
be deemed to be references to this Agreement.
ARTICLE II. PRELIMINARY MATTERS
2.1 THE OBLIGORS
The Borrower owns 100% of the Project Company, which was formed in July 1998 to
develop, construct, own, operate and maintain the Project.
2.2 PROJECT
The project is an approximately 568 megawatt (MW) combined cycle gas-fueled
electric generating plant located in the Borough of Eddystone, Delaware County,
Pennsylvania (as defined further in Appendix A, the PROJECT).
2.3 TOLLING AGREEMENT
The Project Company and PG&E Energy Trading - Power, L.P., a Delaware limited
partnership (PGET), entered into a tolling agreement dated April 14, 2000, (the
TOLLING AGREEMENT). The Tolling Agreement provides for the Project Company to
design, construct and operate the Project in order to provide certain tolling
operations to PGET and for PGET to utilize the Project for the processing of
natural gas supplied by PGET into electric power.
2.4 EPC CONTRACT
The Project Company and Duke/Fluor Daniel, a North Carolina general partnership
(the CONTRACTOR) entered into a turnkey contract dated as of January 1, 2000
(the EPC CONTRACT). The EPC Contract is a lump-sum fixed-price turnkey contract,
pursuant to which the Contractor will provide all necessary design engineering,
procurement and construction services. The obligations of the Contractor under
the EPC Contract are guaranteed, jointly and severally, by Duke Capital
Corporation and Fluor Corporation.
2.5 O&M AGREEMENT; MANAGEMENT SERVICES AGREEMENT
The Project Company and Conectiv Operating Services Company, a Delaware
Corporation (the OPERATOR) have entered into an Operations and Maintenance
Agreement, dated May 25, 2000 (the O&M AGREEMENT) pursuant to which the Operator
will operate and maintain the Project on the terms and conditions set forth
therein.
The Project Company and the Borrower have entered into a Management Services
Agreement, dated as of July 12, 2000 (the MANAGEMENT SERVICES AGREEMENT). The
Borrower has agreed, pursuant to the Management Services Agreement, to provide
certain management, financial and administrative services on behalf of the
Project Company.
2.6 PJM INTERCONNECTION SERVICE AGREEMENT; PECO AND CONECTIV INTERCONNECTION
AGREEMENTS
Pursuant to the PJM Open Access Transmission Tariff (the PJM TARIFF), the
Project Company and PJM Interconnection L.L.C. (the TRANSMISSION PROVIDER) shall
enter into an Interconnection Service Agreement (the PJM INTERCONNECTION SERVICE
AGREEMENT). Pursuant to the PJM Interconnection Service Agreement, the
Transmission Provider agrees to provide for the interconnection of the Project
to the Transmission System in the PJM Control Area.
PECO Energy Company (PECO), as the transmission owner to whose transmission
system the project will interconnect, and the Project Company have entered into
an interconnection agreement regarding the parallel operation of the parties'
systems, and other matters generally included in interconnection agreements (the
PECO INTERCONNECTION AGREEMENT). In addition, PECO and the Project Company have
entered into a construction agreement regarding the construction of facilities
and upgrades (the PECO INTERCONNECTION CONSTRUCTION AGREEMENT).
The Project Company will also enter into an interconnection facilities upgrade
agreement with Conectiv (CONECTIV) regarding the construction and upgrade of
certain sections of the Conectiv transmission system (the CONECTIV
INTERCONNECTION CONSTRUCTION AGREEMENT) unless the terms governing such
construction are incorporated into the terms of the PJM Interconnection Service
Agreement.
2.7 PRECEDENT AGREEMENT; GAS TRANSPORTATION AGREEMENT
The Project Company, PGET and Texas Eastern Transmission Corporation, a Delaware
corporation (TETCO) have entered into a Precedent Agreement, dated as of May 16,
2000 (the PRECEDENT AGREEMENT).
The Project Company, PGET and TETCO entered into two Fuel Transportation Service
Agreements dated as of May 16, 2000 and related Negotiated Rate Agreements
(collectively, the GAS TRANSPORTATION AGREEMENTS).
2.8 WATER SUPPLY AGREEMENT
The Project Company and Philadelphia Suburban Water Company (PSW) have entered
into a Water Supply Agreement dated as of July 6, 2000 (the WATER SUPPLY
AGREEMENT). Pursuant to the Water Supply Agreement, the Project Company will
purchase water from PSW.
2.9 MERRILL CREEK RESERVOIR CAPACITY ASSIGNMENT
The Project Company and Delmarva Power & Light Company, a Delaware and Virginia
corporation (DP&L) have entered into an Assignment of Entitlement, dated June
20, 2000 (the MERRILL CREEK ASSIGNMENT). The Merrill Creek Assignment provides
for the assignment by DP&L to the Project Company of a portion of DP&L's Merrill
Creek Reservoir storage capacity.
2.10 BANK FACILITY
The Bank Lenders have agreed, subject to the terms and conditions herein and in
the Credit Agreement to (i) make Tranche A Loans from time to time during
construction of the Project and prior to the Conversion Date in an aggregate
principal amount of up to $105,000,000, (ii) make Equity Bridge Loans (which may
be repaid and reborrowed) from time to time and during construction of the
Project in an aggregate principal amount of up to $41,000,000, (iii) participate
in a Debt Service Reserve Letter of Credit to be issued in an amount of up to
$17,500,000 on the Conversion Date and to make Debt Service Reserve Loans to
reimburse the Issuing Bank if and to the extent any amounts are drawn under the
Debt Service Reserve Letter of Credit, (iv) make Working Capital Loans and/or
provide Working Capital Letters of Credit from time to time beginning on the
date which is six months prior to the Scheduled Conversion Date in an aggregate
principal amount of up to $5,000,000.
2.11 INSTITUTIONAL FACILITY
The Institutional Lenders have agreed, subject to the terms and conditions
herein and the Note Purchase Agreement, to make Tranche B Loans to the Borrower
by purchasing Notes in an aggregate principal amount of up to $165,000,000.
2.12 INTERCREDITOR AGREEMENT
The Lenders, the Administrative Agent, the Collateral Agent, the Depositary
Bank, the Borrower and the Project Company have entered into the Intercreditor
and Collateral Agency Agreement dated as of the date hereof (the INTERCREDITOR
AGREEMENT) providing for, among other things, certain sharing of payments and
proceeds of the Collateral on the terms and conditions set forth therein.
2.13 DISBURSEMENT AGREEMENT
The Borrower, the Administrative Agent, the Depository Bank and the Collateral
Agent have entered into a Disbursement Agreement, dated as of the date hereof
(the DISBURSEMENT AGREEMENT), which provides for the establishment of certain
collateral accounts and the disbursement of funds therefrom.
2.14 SECURITY
The Loans and all other obligations of the Obligors to the Lenders and the
Administrative Agent under the Financing Documents will be secured pursuant to
the Security Documents.
2.15 INTENT OF ARTICLE 2
The information set forth in Article 2 is for background purposes only and shall
not be deemed to be a representation or covenant of either Obligor.
ARTICLE III. LOANS; COMMITMENTS
3.1 LOANS
(a) Each Bank Lender severally agrees, on the terms and conditions of this
Agreement and the Credit Agreement, to make loans to the Borrower from time
to time during the Construction Stage Availability Period in an aggregate
principal amount up to such Bank Lender's Tranche A Loan Commitment (the
TRANCHE A LOANS). Amounts repaid in respect of Tranche A Loans may not be
reborrowed.
(b) Each Institutional Lender severally agrees, on the terms and conditions of
this Agreement and the Note Purchase Agreement, to make loans to the
Borrower from time to time during the Construction Stage Availability
Period in an aggregate principal amount up to such Institutional Lender's
Tranche B Loan Commitment (the TRANCHE B LOANS). Amounts repaid in respect
of Tranche B Loans may not be reborrowed.
(c) Each Bank Lender severally agrees, on the terms and conditions of this
Agreement and the Credit Agreement, to make loans to the Borrower from time
to time during the Construction Stage Availability Period in an aggregate
principal amount up to such Bank Lender's Equity Bridge Loan Commitment
(the EQUITY BRIDGE LOANS). Subject to the terms and conditions of this
Agreement and the Credit Agreement, during the Construction Stage
Availability Period, the Borrower may borrow, repay and reborrow the
amounts of the Equity Bridge Loan Commitments.
(d) The Issuing Bank agrees, on the terms and conditions of this Agreement and
the Credit Agreement, to issue a Letter of Credit on the Conversion Date in
an amount up to the Debt Service Reserve Commitment (the DEBT SERVICE
RESERVE LETTER OF CREDIT). The Issuing Bank shall not be obligated to issue
the Debt Service Reserve Letter of Credit until the conditions set forth in
Section 5.3 hereof have been satisfied in the manner prescribed in such
Section. In addition, each Bank Lender severally agrees, on the terms and
conditions of this Agreement and the Credit Agreement, to make loans to the
Borrower to reimburse the Issuing Bank if and to the extent any amounts are
drawn under the Debt Service Reserve Letter of Credit in an aggregate
principal amount that will not result in such Bank Lender's Debt Service
Reserve Exposure exceeding such Bank Lender's Debt Service Reserve
Commitment (the DEBT SERVICE RESERVE LOANS).
(e) Each Bank Lender severally agrees, on the terms and conditions of this
Agreement and the Credit Agreement, to make loans to the Borrower from time
to time on and after October 1, 2001 and until the Working Capital Maturity
Date in an aggregate principal amount that will not result in such Bank
Lender's Working Capital Exposure exceeding such Bank Lender's Working
Capital Commitment (the WORKING CAPITAL LOANS). Subject to the terms and
conditions of this Agreement and the Credit Agreement, during the Working
Capital Availability Period, the Borrower may borrow, repay and reborrow
the amounts of the Working Capital Commitments.
3.2 OPTIONAL REDUCTIONS AND CANCELLATIONS OF COMMITMENTS
The Borrower may, at any time, upon not less than six (6) Business Days' prior
written notice to the Administrative Agent and satisfaction of the applicable
provisions of each Loan Agreement, reduce all or a portion of the unutilized
Commitments under the Loan Agreements; PROVIDED that:
(a) prior to any such cancellation or reduction of the Construction Stage
Commitments, each Lender shall have received a certificate from a Financial
Officer of the Obligors to the effect that after taking into account the
proposed reduction or cancellation, the sum (without duplication) of (i)
the unutilized Construction Stage Commitments (less the Construction
Contingency Amount), (ii) the funds in the Accounts available to the
Project Company in accordance with the Disbursement Agreement, (iii) the
proceeds of insurance received by the Collateral Agent and available to the
Project Company in accordance with the terms of the Disbursement Agreement
and (iv) the amount of Project Revenues that the Project Company reasonably
expects to receive and to have available after the date of such
cancellation or reduction but prior to the Conversion Date as reflected in
the Construction Budget is not less than the sum of all Project Costs
identified in the most recent certificate of the Independent Engineer
delivered under Section 3.4(b) hereof and in the then current Construction
Budget;
(b) the aggregate amount cancelled is a minimum of U.S.$1,000,000 (and in any
integral multiple of U.S.$500,000 in excess thereof) or if the remaining
balance of the Construction Stage Commitments is less than U.S.$1,000,000,
such lesser amount;
(c) the Borrower may not (i) reduce or cancel any Tranche B Loan Commitments
without reducing or canceling a Pro Rata Share of the Tranche A Loan
Commitments or (ii) reduce or cancel the Tranche A Loan Commitments, unless
it has made an offer, not less than 10 Business Days prior to the date of
such reduction or cancellation, to the Institutional Lenders to reduce or
cancel a Pro Rata Share of Tranche B Loan Commitments without payment of
the Commitment Termination Fee; PROVIDED that the failure of any
Institutional Lender to respond to such offer at least 3 Business Days
prior to the date of such reduction or cancellation specified in such offer
shall be deemed to be a rejection of such offer); and PROVIDED, FURTHER,
that each Institutional Lender may accept or reject such offer in its sole
discretion and upon any rejection by an Institutional Lender of such offer,
the Borrower shall have the option to either (1) increase the size of the
reduction of each Bank Lender's Tranche A Loan Commitments pro rata in an
aggregate amount equal to such reduction, or (2) reduce a pro rata portion
of such Institutional Lender's Tranche B Loan Commitment and pay the
applicable Commitment Termination Fee for such reduction (provided that
such Commitment Termination Fee shall be payable on all Tranche B Loan
Commitments being concurrently reduced); and
(d) upon such cancellation or reduction, the Borrower shall pay all Commitment
Termination Fees then due and all costs and expenses and other amounts then
due under Section 12.3 hereof (if any) with respect to such cancellation or
reduction under the Financing Documents.
Once reduced or cancelled, a Commitment may not be increased or reinstated.
3.3 MANDATORY REDUCTION OF COMMITMENTS
Any unutilized Commitments on the last day of the applicable Availability Period
shall be cancelled, after giving effect, with respect to any Construction Stage
Commitments, to any Loan made under the applicable Facility on such date. In
addition, the Commitments shall be subject to automatic reduction to the extent
set forth in Section 4.2. Upon any such mandatory cancellation or reduction, the
Borrower shall pay all costs and expenses and other amounts then due under
Section 12.3 hereof (if any) with respect to such cancellation or reduction
under the Financing Documents.
3.4 PROCEDURES FOR BORROWING
(a) Subject to Article 5 of this Agreement, the Borrower may request Loans by
delivering a Notice of Borrowing with respect to such Loans, appropriately
completed, to the Administrative Agent with a copy to the Collateral Agent
in the manner described in the relevant Loan Agreement.
(b) Each Notice of Borrowing shall include as attachments (i) all certificates
and documentation required under Article 5 of this Agreement and (ii) with
respect to the Tranche A Facility, the Tranche B Facility and the Equity
Bridge Loan Facility, a certificate of the Independent Engineer, in
substantially the form attached hereto as Exhibit D; PROVIDED, HOWEVER,
that no certificate of the Independent Engineer shall be required in
connection with any Notice of Borrowing requesting Loans if the proceeds
thereof are applied only to pay accrued interest on Loans.
ARTICLE IV. PAYMENTS; PREPAYMENTS
4.1 PLACE AND MANNER OF PAYMENTS
All payments due under any Financing Document shall be made by the Borrower on
the date due in the currency specified in, and pursuant to the terms of, the
respective Financing Document and the Disbursement Agreement.
4.2 MANDATORY PREPAYMENTS
The Borrower shall prepay Loans (and the Commitments (including any Debt Service
Reserve Commitment) are subject to automatic reduction) in accordance with this
Section 4.2. Loans so prepaid may not be reborrowed.
(a) EVENTS OF LOSS. Not later than the date specified for prepayment in Section
7.9(j) with respect to Loss Proceeds required to be applied to prepayment
of the Loans under Section 7.9(j) (or upon such earlier date as the
Obligors shall have determined not to restore the Affected Property), the
Borrower shall prepay (without payment of any Make Whole Amount, penalty or
premium) the Loans and/or the Commitments shall be subject to automatic
reduction in the manner required under Section 4.4 in an amount equal to
100% of the Net Available Proceeds of such Loss Proceeds.
(b) PROJECT DOCUMENT CLAIMS. (i) Not later than the date specified for
prepayment in Section 7.9(j) with respect to the proceeds of any Project
Document Claims required to be applied to prepayment of the Loans under
Section 7.9(j) (or, in the case of any Buy Down Amounts, upon such earlier
date as the Obligors shall have determined not to apply such Buy Down
Amounts to Restoration Work in the manner described in Section 7.9(j)), the
Borrower shall prepay (without payment of any Make Whole Amount, penalty or
premium) the Loans and/or the Commitments shall be subject to automatic
reduction in accordance with Section 4.4 in an amount equal to 100% of the
Net Available Proceeds of such Project Document Claim.
(c) EQUITY CONTRIBUTIONS. Not later than two (2) Business Days following the
receipt by the Borrower of the proceeds of an Equity Contribution, the
Borrower shall repay or prepay, as the case may be, Loans (and the
Commitments shall be subject to automatic reduction) and/or shall reserve
for unpaid Project Costs in accordance with Section 4.4(c).
(d) DEBT SERVICE RESERVE LOANS. On each Repayment Date, the Borrower shall
prepay any outstanding Debt Service Reserve Loans to the extent funds are
available therefore as provided in Sections 4.3 and 4.6 of the Disbursement
Agreement.
(e) ANNUAL CLEAN UP OF WORKING CAPITAL FACILITY. The Borrower shall from time
to time prior to the Working Capital Maturity Date prepay the Working
Capital Loans in such amounts as shall be necessary so that, for a period
of at least 10 consecutive days (which period shall include a Repayment
Date) in each fiscal year of the Borrower, the aggregate outstanding
principal amount of the Working Capital Loans shall be zero.
(f) CLEAN UP OF EQUITY BRIDGE LOAN FACILITY. The Borrower shall on each date
when a Tranche B Loan is made, prepay in full all outstanding Equity Bridge
Loans from the proceeds of any Tranche B Loan or Tranche A Loan made on
such date to the extent the proceeds of such Loans are not otherwise (i)
necessary to pay outstanding Project Costs, or (ii) in the case of the
Tranche B Loans, deposited in the Tranche B Escrow Account.
(g) TRANCHE B ESCROW ACCOUNT. On or after the Date Certain, if instructed by
the Required Lenders under the Tranche B Facility, the Borrower shall apply
any amounts credited to the Tranche B Escrow Account to the prepayment of
Tranche B Loans in the manner prescribed in Section 4.1(b) of the Note
Purchase Agreement.
4.3 VOLUNTARY PREPAYMENTS
(a) Subject to Section 4.3(b) below, the Borrower may, on not less than six (6)
Business Days' prior written notice to the Lenders and the Administrative
Agent, voluntarily prepay Loans in accordance with this Section 4.3 and
each of the applicable provisions of the Loan Agreements PROVIDED that, the
Borrower may not (i) prepay any Tranche B Loans without prepaying a Pro
Rata Share of the Tranche A Loans or (ii) prepay any Tranche A Loans unless
it has made an offer, not less than 10 Business Days prior to the date of
such prepayment, to the Institutional Lenders to prepay a Pro Rata Share of
Tranche B Loans (at par plus accrued interest but without payment of any
Make Whole Amount, penalty or premium); PROVIDED that the failure of any
Institutional Lender to respond to such offer at least 3 Business Days
prior to the date of such prepayment specified in such offer shall be
deemed to be a rejection of such offer; and PROVIDED, FURTHER, that each
Institutional Lender may accept or reject such offer in its sole
discretion. Upon such refusal by an Institutional Lender, the Borrower
shall have the option of either (1) paying the refused amount pro rata to
the Bank Lenders or (2) prepaying such Pro Rata Share of the Tranche B
Loans to the Institutional Lenders together with accrued interest thereon
and the Make Whole Amount. The aggregate amount prepaid shall be a minimum
of U.S.$1,000,000 (and in any integral multiple of U.S.$100,000 in excess
thereof) or if the remaining balance of the Loan is less than
U.S.$1,000,000, such lesser amount.
(b) No voluntary prepayments may be made under the Tranche A Facility or the
Tranche B Facility prior to the Conversion Date unless prior to such
prepayment: (i) all Commitments under the Tranche A Facility and the
Tranche B Facility have been fully utilized or cancelled, and, in the case
of any prepayment other than a prepayment in full of all Tranche A Loans
and Tranche B Loans, (ii) each Lender shall have received a certificate
from a Financial Officer of the Obligors to the effect that after taking
into account the proposed prepayment, the sum (without duplication) of (A)
the funds in the Accounts available to the Project Company in accordance
with the Disbursement Agreement, (B) the proceeds of insurance received by
the Collateral Agent and available to the Project Company in accordance
with the terms of the Disbursement Agreement and (C) the amount of Project
Revenues that the Project Company reasonably expects to receive and to have
available after the date of such prepayment but prior to the Conversion
Date as reflected in the Construction Budget is not less than the sum of
all Project Costs identified in the most recent certificate of the
Independent Engineer delivered under Section 3.4(b) hereof and in the then
current Construction Budget.
4.4 ALLOCATION
The Borrower shall apply required prepayments under Section 4.2 in the following
manner.
(a) EVENTS OF LOSS OR PROJECT DOCUMENT CLAIMS PRIOR TO CONVERSION DATE. If any
prepayment under Section 4.2(a) or Section 4.2(b) is required prior to the
Conversion Date, such prepayment shall be applied first, to irrevocably and
permanently reduce pro rata the available undrawn amounts of Tranche A Loan
Commitments and the Tranche B Loan Commitments (and, to the extent of such
reduction, such prepayment shall be deposited into the Construction Account
to be applied in accordance with the Disbursement Agreement), SECOND, to
prepay (without Make Whole Amount, penalty or premium) pro rata outstanding
Tranche A Loans and Tranche B Loans (in the manner described in Section
2.08 of the Credit Agreement or Section 4.1(b) of the Note Purchase
Agreement, as applicable), THIRD, to reduce pro rata the Equity Bridge Loan
Commitments (and, to the extent of such reduction, such prepayment shall be
deposited into the Construction Account to be applied in accordance with
the Disbursement Agreement) and FOURTH, to prepay pro rata outstanding
Equity Bridge Loans.
(b) EVENTS OF LOSS OR PROJECT DOCUMENT CLAIMS AFTER THE CONVERSION DATE. If any
prepayment under Section 4.2(a) or Section 4.2(b) is required after the
Conversion Date, such prepayment shall be applied FIRST, pro rata to the
prepayment of the Tranche A Loans, the Tranche B Loans and the Debt Service
Reserve Loans (in the manner described in Section 2.08 of the Credit
Agreement or Section 4.1(b) of the Note Purchase Agreement, as applicable),
and SECOND, pro rata to the reduction of the Working Capital Commitments
and the Debt Service Reserve Commitments (and, to the extent that after
such reduction, the Loans under the Working Capital Facility would exceed
the Commitments under such Facility , to the prepayment of such Loans).
(c) EQUITY CONTRIBUTION APPLICATION. The proceeds of any Equity Contribution
shall be applied as follows:
(i) the proceeds of any Equity Contribution made on the Conversion Date
shall be applied FIRST, to prepay or repay, as applicable, all
outstanding Equity Bridge Loans (and the remaining Equity Bridge Loan
Commitments shall be cancelled), SECOND, to reserve for unpaid punch
list items, and THIRD, to prepay (without Make Whole Amount, penalty
or premium) pro rata outstanding Tranche A Loans and Tranche B Loans
(in the manner described in Section 2.08 of the Credit Agreement or
Section 4.1(b) of the Note Purchase Agreement, as applicable).
(ii) the proceeds of any Equity Contribution made voluntarily or made
pursuant to the Equity Guarantee prior to the Conversion Date, shall
be applied FIRST, to prepay all outstanding Equity Bridge Loans (and
the Equity Bridge Loan Commitments shall be subject to automatic
reduction to the extent of such Equity Contribution), SECOND, for
deposit in the Construction Account for application in accordance with
Section 4.2 of the Disbursement Agreement to the extent that
undisbursed moneys in the Construction Account and the Tranche B
Escrow Account, proceeds of insurance received by the Collateral Agent
and available to the Project Company in accordance with the terms of
the Disbursement Agreement and amounts then available to be drawn
under the Financing Documents (after the reduction in Equity Bridge
Loan Commitments referred to above) are in aggregate less than the
amount necessary to pay all remaining Project Costs which have been or
are reasonably likely to be incurred in connection with the Project;
THIRD for deposit in the Construction Account for payment to the
Members on the Conversion Date in the manner and in the amount set
forth in Section 8.7(b) and FOURTH for deposit in the Construction
Account to prepay on the Conversion Date (without Make Whole Amount,
penalty or premium) pro rata outstanding Tranche A Loans and Tranche B
Loans (in the manner described in Section 2.08 of the Credit Agreement
or Section 4.1(b) of the Note Purchase Agreement, as applicable).
(iii) the proceeds of any Equity Contribution made prior to the Conversion
Date upon an Event of Default shall be applied FIRST to prepay all
outstanding Equity Bridge Loans (and the remaining Equity Bridge Loan
Commitments shall be cancelled) and SECOND for deposit in the
Construction Account and applied in accordance with Section 4.10 of
the Disbursement Agreement PROVIDED that if the Event of Default is
cured prior to application of amounts deposited in the Construction
Account, such amounts shall be applied in accordance with Section
4.4(c)(ii) above.
ARTICLE V. CONDITIONS
5.1 CONDITIONS PRECEDENT TO INITIAL LOANS
The obligations of each Lender to make the initial Loans shall not become
effective until the date on which each of the conditions precedent set forth in
this Section 5.1 shall have been satisfied or waived; PROVIDED that if such
conditions precedent are not so satisfied (or so waived) on or prior to 3:00
p.m., New York time, on September, 30, 2000, the Commitments shall terminate as
of such time. The conditions precedent so satisfied or waived shall only be
required to be satisfied once and when so satisfied or waived shall not be
subject to further review and the Lenders shall not be able to require that such
conditions precedent be satisfied or waived at any other time.
(a) DOCUMENTS. The Administrative Agent shall have received each of the
documents set forth below by the Closing Date or, if required earlier, by
the date otherwise specified below (each of which shall be satisfactory in
form and substance to the Lenders as of the Closing Date (except as
otherwise provided below) and to the extent that any such documents contain
an Officer's Certificate, such Officer's Certificate shall be true and
correct as of the Closing Date).
(i) CORPORATE AUTHORITY AND INCUMBENCY OF MAJOR PROJECT PARTIES. Certified
copies of:
(A) the Charter Documents and all corporate authority for each
Obligor, CEG and PECO (including, without limitation, board of
director resolutions approving such Person's participation in the
Project and, to the extent applicable, the financing therefor and the
granting of Liens in connection therewith, and evidence of the
incumbency, including specimen signatures, of officers for such
Person) with respect to the execution, delivery and performance of the
Transaction Documents to which such Person is or is intended to be a
party; and
(B) good standing certificates (to the extent available in such
Person's jurisdiction of formation), each dated as of a recent date,
as to the good standing of, and authority to transact business of,
each Major Project Party.
(ii) PLEDGED CERTIFICATES AND INSTRUMENTS. All certificates or other
similar written evidence representing all of the Pledged Membership
Interests together with all instruments evidencing any pledged
Indebtedness, duly endorsed in blank or accompanied by undated
instruments of transfer therefor duly executed in blank.
(iii) CONSULTANT REPORTS. Prior to the Closing Date,
(A) the Independent Engineer's Report (reasonably satisfactory in form
and substance to the Lenders as of the Closing Date);
(B) the Insurance Consultant Report;
(C) the Fuel Consultant's Report (reasonably satisfactory in form and
substance to the Lenders as of the Closing Date); and
(D) the PJM Market Consultant's Report.
(iv) BASE CASE PROJECTIONS. With a copy to the Independent Engineer, at
least ten (10) Business Days prior to the Closing Date, a hard copy
of, and a computer disk containing, the base case projections for the
Project, together with the underlying models and assumptions (in form
and substance reasonably satisfactory to the Administrative Agent as
of the Closing Date) (the BASE CASE PROJECTIONS), containing
projections of revenues and expenses, results of operations and cash
flows with respect to the Project over not shorter than the period
beginning on the Conversion Date and ending on the Tranche B Final
Maturity Date and providing an average Debt Service Coverage Ratio
during the initial Tolling Period of not less than 1.45 and a minimum
Debt Service Coverage Ratio for each fiscal year during the initial
Tolling Period of not less than 1.40 and an average Debt Service
Coverage Ratio thereafter of not less than 3.6 and a minimum Debt
Service Coverage Ratio for each fiscal year thereafter of not less
than 2.7.
(v) CONSTRUCTION SCHEDULE. At least ten (10) Business Days prior to the
Closing Date, a Construction Schedule for the Project, the
Interconnection Upgrades and the Gas Interconnection Facilities
through to the Scheduled Conversion Date, based on assumptions
reasonably acceptable to the Administrative Agent and the Independent
Engineer, demonstrating compliance with the requirements of the
Financing Documents.
(vi) CONSTRUCTION BUDGET. With a copy to the Independent Engineer, at least
ten (10) Business Days prior to the Closing Date, a copy of the
Construction Budget (which may be included in the Base Case
Projections), which shall reflect the scope of work and the contract
price for the Project, including the price under the EPC Contract, as
of the Closing Date, and set forth the amount of all projected
payments under the Construction Budget, certified as the reasonable
estimate of the information set forth therein on the Closing Date by
the chief financial officer of the Borrower, and on or before the
Closing Date the Administrative Agent shall have received a
certificate from the Independent Engineer to the effect that the
Independent Engineer has reviewed and analyzed the Construction
Budget, and that, in the opinion of the Independent Engineer, the
Construction Budget, including the scope of work reflected thereby,
including the price under the EPC Contract, represents a reasonable
estimate of the information set forth therein.
(vii) PROJECT PARTY FINANCIAL STATEMENTS. The Administrative Agent shall
have received a copy of the most recent audited annual and unaudited
quarterly financial statements with respect to each Major Project
Party (other than the Obligors) PROVIDED such financial statements are
prepared by such party and are made available to the Borrower and
shall have received unaudited financial statements of each Obligor.
(viii) FULL RELEASE. The Borrower shall have delivered to the
Administrative Agent a copy of the Full Release delivered by the
Project Company to the Contractor.
(ix) CONTRACTOR'S CERTIFICATE. The Contractor shall have delivered to the
Administrative Agent a certificate not more than (5) five Business
Days prior to the Closing Date stating that as of such date (a) the
Project Company is not in default under the EPC Contract, (b) no
change orders are required as of such date under the EPC Contract
other than change orders which have been delivered to the
Administrative Agent and reviewed and approved by the Independent
Engineer, (c) to the best of its knowledge, after due inquiry, no
Force Majeure Event (as defined in the EPC Contract) has occurred and
is continuing under the EPC Contract and (d) the Contractor has
received and accepted the Full Release from the Project Company.
(x) OPINIONS OF COUNSEL TO THE LENDERS. Opinions, each dated the Closing
Date and addressed to the Administrative Agent and the Lenders, from
Freshfields LLP, special New York counsel to the Lenders, in
substantially the form of Exhibit C-4 hereto and from Reed Smith Shaw
& McClay Pennsylvania counsel to the Lenders, in substantially the
form of Exhibit C-5 hereto.
(xi) OPINIONS OF NEW YORK COUNSEL TO THE OBLIGORS. Opinions, each dated the
Closing Date and addressed to the Administrative Agent and the
Lenders, from LeBoeuf, Lamb, Greene & MacRae, New York counsel to the
Obligors, in substantially the form of Exhibit C-1 hereto, and from
Blank, Rome, Comisky & McCauley, Pennsylvania counsel to the Obligors
in substantially the form of Exhibit C-2 hereto and in each case
covering such other matters incident to the transactions contemplated
hereby as the Lenders may reasonably request.
(xii) LEGAL OPINIONS. A legal opinion from counsel to each of the Major
Project Parties under the laws of the respective jurisdiction of
formation of such Person and under the laws of the jurisdiction(s)
governing the Transaction Documents to which such Person is a party,
in each case substantially in the form of the respective opinion
attached as Exhibit C-3 hereto.
(xiii) AGENTS FOR SERVICE OF PROCESS. Evidence that each Obligor, each
Member and CEG shall have appointed an agent for service of process in
each jurisdiction where such party is required to do so under any
Transaction Document.
(xiv) LIEN, JUDGMENT AND TAX SEARCHES. Copies of financing statements under
the Uniform Commercial Code (and copies of Uniform Commercial Code
search reports and tax lien, judgment and litigation search reports
where available) with respect to the each Obligor and each Member
pledging collateral to secure the obligations of the Borrower under
the Financing Documents in each jurisdiction in which financing
statements or similar documentation is necessary or, in the opinion of
the Administrative Agent, desirable to perfect the Liens created under
the Security Documents, and all other instruments to be recorded or
filed or delivered in connection with the Security Documents and all
other lien searches undertaken in connection therewith.
(xv) TITLE INSURANCE; SURVEYS. The following documents, which shall be
executed (and, where appropriate, acknowledged) by Persons
satisfactory to the Administrative Agent:
(A) one or more mortgagee policies of title insurance on forms of and
issued by one or more title companies satisfactory to the
Administrative Agent (the TITLE COMPANIES), insuring the validity and
priority of the Liens created under the Mortgage for and in amounts
satisfactory to the Administrative Agent, subject only to such
exceptions as are satisfactory to the Administrative Agent and, to the
extent necessary under applicable law, for filing in the appropriate
county land office(s), Uniform Commercial Code financing statements
covering fixtures, in each case appropriately completed and duly
executed; and
(B) surveys of recent date of each of the facilities and real property
to be covered by the Mortgage, showing such matters as may be required
by the Administrative Agent, which surveys shall be in form and
content acceptable to the Administrative Agent, and certified to the
Administrative Agent and the Title Company, and shall have been
prepared by a registered surveyor acceptable to the Administrative
Agent.
In addition, the Obligors shall have paid to the Title Company (or shall
pay from the proceeds of the Loans hereunder) all expenses and premiums of
the Title Company then due and payable in connection with the issuance of
such policies and in addition shall have paid to the Title Company an
amount equal to the recording and stamp taxes payable in connection with
recording the Mortgage in the appropriate county land office(s).
(xvi) INSURANCE. The Administrative Agent shall have received certificates
of all policies of insurance required to be obtained under this
Agreement and shall have received written confirmation from the
insurance broker/agent stating that all such insurance policies as
required by the Master Agreement are in full force and effect and that
all insurance premiums then due have been paid.
(xvii) FINANCING DOCUMENTS. Each of the Financing Documents shall have been
executed and delivered by each of the parties thereto and shall be in
full force and effect, all representations and warranties contained
therein shall be true and correct in all material respects and no
Default or Event of Default shall have occurred.
(xviii) MAJOR PROJECT DOCUMENTS. Each of the Major Project Documents (other
than the PJM Interconnection Service Agreement and the Conectiv
Interconnection Construction Agreement) shall be reasonably
satisfactory in form and substance to the Lenders as of the Closing
Date, shall have been executed and delivered by each of the parties
thereto and shall be in full force and effect, and all conditions
precedent under such Major Project Documents required to have been
satisfied by the date hereof shall have been satisfied or waived in
writing by the relevant parties thereto.
(xix) SOURCE AND USE OF FUNDS. The Obligors shall have delivered a sources
and uses of funds statement identifying all sources and uses of the
initial Loans.
(xx) OTHER. Such other documents, information, reports, or surveys as the
Administrative Agent may reasonably request.
(b) SECURITY INTERESTS. All security interests in the Collateral shall have
been created and, where appropriate, all registrations and filings
necessary to create and perfect the security interest of the Lenders
therein shall have been filed or registered, and all other necessary
actions shall have been taken to create and perfect a first priority
security interest and charge over the Collateral in favor of the Lenders
(or their agent, as appropriate), and all fees and duties shall have been
paid in connection with any such action (or arrangements satisfactory to
the Lenders shall have been made for the payment of such fees or duties
from the proceeds of the initial extension of credit), and all such
security interests shall be valid and enforceable.
(c) NO MATERIAL ADVERSE EFFECT. No event shall have occurred since June 8, 2000
(being the date when commitment letters were executed by the Borrower and
certain of the Lenders in relation to the financing described herein) which
could reasonably be expected to result in a Material Adverse Effect.
(d) FEES. The Borrower shall have paid to each Lender and the Administrative
Agent and their technical and legal advisors the fees and expenses to be
paid in connection herewith, including, without limitation, the fees and
expenses set forth in Section 12.3 (to the extent that statements for such
fees and expenses have been delivered to the Borrower).
(e) ACCOUNTS. Each of the Accounts shall have been established in accordance
with the Disbursement Agreement.
5.2 CONDITIONS PRECEDENT TO EACH LOAN (INCLUDING THE INITIAL LOANS) PRIOR TO THE
CONVERSION DATE.
The obligations of each Lender to make any Loans (including the initial Loans)
prior to the Conversion Date are subject to the satisfaction of the following
conditions precedent or the waiver of such conditions by the Lenders in
accordance with Section 12.2.
(a) DOCUMENTS. The Administrative Agent shall have received each of the
documents set forth below (each of which shall be satisfactory in form
and substance to the Administrative Agent as of the date received, and to
the extent that any such documents contain a certificate, such
certificate shall be true and correct as of the date thereof).
(i) CONSTRUCTION PROGRESS REPORT; CERTIFICATE OF INDEPENDENT ENGINEER.
(A) The most recent Construction Progress Report delivered pursuant
to Section 7.2(a) of the Master Agreement, confirmed by the
Independent Engineer as provided therein, which shall indicate that:
(x) construction of the Project, the Interconnection Upgrades and the
Gas Interconnection Facilities is proceeding substantially in
accordance with or ahead of the Construction Schedule, and
(y) undisbursed moneys in the Construction Account and the Tranche B
Escrow Account, proceeds of insurance received by the Collateral
Agent and available to the Project Company in accordance with the
terms of the Disbursement Agreement and amounts then available to
be drawn under the Financing Documents equal or exceed the amount
necessary to pay all remaining Project Costs which have been or
are reasonably likely to be incurred in connection with the
Project, the Interconnection Upgrades and the Gas Interconnection
Facilities, on or prior to the Conversion Date, including all
interest, fees and other amounts to be paid on the Loans on or
prior to the Conversion Date, as certified by the Independent
Engineer.
(B) The Administrative Agent shall have received from the Independent
Engineer (attached to the Notice of Borrowing referred to in (ii)
below) a certificate in the form of Exhibit D to this Agreement
stating that, to the best of the Independent Engineer's knowledge,
after due inquiry:
(x) the information material to the construction of the Project, the
Interconnection Upgrades and the Gas Interconnection Facilities
contained in each Construction Progress Report delivered pursuant
to Section 7.2(a) of this Agreement is true, complete and correct
in all material respects, and
(y) the Independent Engineer has obtained no knowledge of the
existence of any Default or Event of Default which has not been
waived or cured.
(ii) NOTICE OF BORROWING. A Notice of Borrowing, together with all
documentation required in connection therewith including items
required for disbursements as set forth in the Disbursement
Agreement.
(iii) OFFICER'S CERTIFICATE. An Officer's Certificate dated as of the date
of such Notice of Borrowing stating that (A) all representations and
warranties made by each Obligor in Article VI, and in any certificate
furnished by the Project Company or the Borrower pursuant hereto or
thereto are accurate in all material respects on and as of the date
of such Loan unless such representation or warranty is expressly
stated to have been made as of a specific date, in which case such
representation or warranty is true and correct on and as of such
specific date, (B) at the time of and immediately after giving effect
to such Loan, no Default or Event of Default by either Obligor shall
have occurred and be continuing hereunder and no default shall have
occurred and be continuing under any Transaction Document, (C) the
Obligors have complied with all other conditions precedent set forth
in the Transaction Documents required to have been complied with on
or prior to the date of such Loans.
(iv) CONTRACTOR'S CERTIFICATE. The Project Company shall have delivered to
the Administrative Agent a certificate from the Contractor stating
that the Contractor has paid its direct subcontractors all amounts
(other than those amounts being contested in good faith) then owing
to such subcontractors.
(v) PRIVATE PLACEMENT NUMBER. Evidence that a private placement number
with respect to each Note shall have been obtained by the
Administrative Agent, or a representative thereof, from S&P's CUSIP
Service Bureau.
(b) PRO RATA BORROWINGS.
(i) Notwithstanding anything to the contrary in this Master Agreement or
either of the Loan Agreements but subject to Section 5.2(b)(ii)
below:
(A) no Institutional Lender shall be required to make Tranche B
Loans other than any such Loans the proceeds of which are deposited in
the Tranche B Escrow Account (and no amounts shall be released out of
the Tranche B Escrow Account) if after giving effect thereto, the
aggregate outstanding principal amount under the Tranche B Loans
(excluding amounts then held in the Tranche B Escrow Account) would
exceed 65% of the aggregate outstanding principal amount of the
Tranche A Loans and the Tranche B Loans (excluding amounts then held
in the Tranche B Escrow Account), and
(B) no such Bank Lender shall be required to make Tranche A Loans
if, after giving effect thereto, the aggregate outstanding principal
amount of Tranche A Loans would exceed 45% of the aggregate
outstanding principal amount of the Tranche A Loans and Tranche B
Loans (excluding amounts then held in the Tranche B Escrow Account).
(ii) If any non pro rata Commitment reduction has been made with respect
to the Tranche A Facility and the Tranche B Facility in accordance
with Section 3.2(c) hereof, the percentage amounts set forth in
Section 5.2(b)(i) above shall be adjusted as follows:
(A) the percentage in Section 5.2(b)(i)(A) shall equal the sum of
(x) the quotient, expressed as a percentage, equal to the aggregate
principal amount outstanding under the Tranche B Loans together with
the aggregate unutilized Commitments under the Tranche B Facility,
divided by the aggregate principal amount outstanding under the
Tranche A Loans and the Tranche B Loans together with the aggregate
unutilized Commitments under each such Facility), plus (y) 4%; and
(B) the percentage in Section 5.2(b)(i)(B) shall equal the sum of
(x) the quotient, expressed as a percentage, equal to the aggregate
principal amount outstanding under the Tranche A Loans together with
the aggregate unutilized Commitments under the Tranche A Facility,
divided by the aggregate principal amount outstanding under the
Tranche A Loans and the Tranche B Loans together with the aggregate
unutilized Commitments under each such Facility, plus (y) 4%.
(c) NO MATERIAL ADVERSE EFFECT. No event shall have occurred since the
Closing Date that has resulted in or could reasonably be expected to
result in a Material Adverse Effect.
(d) NO DEFAULT OR BREACH OF REPRESENTATION BY A MAJOR PROJECT PARTY. All
material representations and warranties made by each Major Project Party
(other than the Obligors) in each Transaction Document to which such
Major Project Party is a party are true and correct in all material
respects as of the date of such Loan, unless such representation or
warranty is expressly stated to have been made as of a specific date in
which case such representation or warranty is true and correct in all
material respects as of such specific date except in each case when (i)
the commercial or legal consequences of the failure to be so true and
correct would not materially adversely effect such party's ability to
perform its obligations under the relevant Major Project Document(s) or
(ii) the specific breach of such representation or warranty was waived
without reservation in connection with a prior Loan. No default by any
Major Project Party (other than the Obligors) shall have occurred and be
continuing under any material provision of any Transaction Document.
(e) TITLE POLICY ENDORSEMENTS. The Administrative Agent shall have received a
continuation report of, or endorsement to, the title policy delivered
under Section 5.1(a)(xv) hereto, setting forth no additional exceptions
(including survey exceptions) except for Permitted Liens. In addition,
the Obligors shall have paid to the Title Company (or shall pay from the
proceeds of the Loans hereunder) all expenses and premiums of the Title
Company then due and payable in connection with the issuance of such
policies.
(f) LEGALITY. There shall have been no change since the date hereof (other
than any change relating solely to the status of the applicable
Institutional Lender) that could reasonably be expected to have the
effect of making the Notes to be purchased by each Institutional Lender
an illegal investment for such Institutional Lender under the laws of
each jurisdiction to which such Institutional Lender may be subject
(without resort to any so-called basket provision of said laws, such as
Section 1405(a)(8) of the New York Insurance Law).
5.3 CONDITIONS PRECEDENT TO CONVERSION.
The Conversion Date shall occur upon the satisfaction of the following
conditions on or before the Date Certain:
(i) CONVERSION DATE CERTIFICATE. The Administrative Agent shall have received
the Conversion Date Certificate (the statements contained in which shall
be true and correct).
(ii) AS-BUILT SURVEY. The Administrative Agent shall have received an as-built
survey of the Project Site certified to the Administrative Agent and the
Lenders and the Title Company, showing the Project and the Project Site
and updated with respect to all relevant requirements; PROVIDED that with
respect to structures, such survey need only show such improvements (such
as all principal structures, including buildings but not pipes, manholes,
valves, meters, etc.) as the Title Company shall require for purposes of
deleting the standard survey exception and issuing a comprehensive
endorsement and such other endorsements which require a survey to be
issued.
(iii) TITLE POLICY ENDORSEMENTS. The Administrative Agent shall have received a
continuation report of, or endorsement to, the title policy delivered
under Section 5.1(a)(xv) hereto, setting forth no additional exceptions
(including survey exceptions) except for Permitted Liens. In addition,
the Obligors shall have paid to the Title Company all expenses and
premiums of the Title Company in connection with the issuance of such
policies.
(iv) OPERATING BUDGET. The Administrative Agent shall have received the first
Operating Budget.
(v) CAPITAL CONTRIBUTION. The Members shall have made the capital
contributions to the Borrower required pursuant to the Equity
Contribution Agreement.
5.4 CONDITIONS PRECEDENT TO EACH BORROWING AFTER THE CONVERSION DATE.
The obligations of the Bank Lenders to make any Working Capital Loans or Debt
Service Reserve Loans after the Conversion Date or the obligations of the
Issuing Bank to issue any Letter of Credit under the Debt Service Reserve
Facility or the Working Capital Facility after the Conversion Date are subject
to (i) the Administrative Agent receiving each of the documents set forth in
Sections 5.2(a)(ii) and 5.2 (a)(iii)(A) and (B) hereof (each of which shall be
satisfactory in form and substance to the Administrative Agent, and to the
extent such documents contain a certificate, such certificate shall be true and
correct as of the date thereof) and (ii) the satisfaction of the conditions
described in Section 5.2(d) hereof.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
The Borrower (as to itself and the Project Company) and the Project Company (as
to itself) represents and warrants to the Lenders that:
6.1 ORGANIZATION; POWERS
Each Obligor is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
6.2 AUTHORIZATION; ENFORCEABILITY
Each Obligor has full power, authority and legal right to execute and deliver
the Transaction Documents to which it is or is purported by this Agreement to be
a party (as of the date such representation is made) and to perform its
obligations thereunder, and each Obligor has full power, authority and legal
right to own the property and assets owned by it and lease the property leased
by it. The execution, delivery and performance by either Obligor of the
Transaction Documents to which it is or is contemplated by this Agreement to be
a party and the consummation of the transactions contemplated thereby have been
duly authorized by all necessary action on the part of such Obligor. Each of the
Transaction Documents to which either Obligor is a party have been duly executed
and delivered by such Obligor and constitutes the legal, valid and binding
obligation of such Obligor, enforceable against such Obligor in accordance with
its terms, except as the enforceability thereof may be limited by (a) applicable
bankruptcy, insolvency, moratorium, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally and (b) the application
of general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
6.3 CAPITALIZATION
Schedule 6.3 sets forth the capitalization of each Obligor as of the date
hereof, including (a) the authorized capital, (b) the membership interests
outstanding, and (c) the Members and the membership interest held by each such
Member. All outstanding membership interests are duly and validly issued and
non-assessable. Neither Obligor has outstanding (i) any securities convertible
into or exchangeable for its membership interests or (ii) any rights to
subscribe for or to purchase, or any option for the purchase of, or any
agreement, arrangement or understanding providing for the issuance (contingent
or otherwise) of, or any call, commitment or claims of any character relating
to, its membership interest.
6.4 SUBSIDIARIES AND BENEFICIAL INTEREST
The Project Company has no Subsidiaries and does not beneficially own the whole
or any part of the issued share capital or other ownership interest of any other
Person. The Project Company is the sole Subsidiary of the Borrower, and the
Borrower has no other Subsidiaries and does not otherwise beneficially own the
whole or any part of the issued share capital or other ownership interests in
any other Person.
6.5 GOVERNMENTAL APPROVALS
(a) All material Governmental Approvals necessary to be obtained by or on
behalf of either Obligor in connection with the Project are set forth in
Schedule 6.5. The information set forth in each application and all other
written material submitted by either Obligor or any Affiliate thereof to
the applicable Governmental Authority in connection with each such
Governmental Approval does not contain any misstatements that could
reasonably be expected to render (either individually or taken as a whole)
any such Governmental Approval void or invalid.
(b) All material Governmental Approvals required to be obtained by or on behalf
of either Obligor for the current stage of Development of the Project as
identified in Schedule 6.5 have been duly obtained, are in full force and
effect, not subject to appeal, are held in the name of such Obligor, and
are free from conditions or requirements the compliance with which could
reasonably be expected to have a Material Adverse Effect or which the
applicable Obligor does not expect to be able to satisfy on or prior to the
date required (as contemplated by the Construction Schedule).
(c) Neither Obligor has any reason to believe that any material Governmental
Approvals which have not been obtained by or on behalf of it as of the
Closing Date, but which will be required to be obtained by it in the
future, will not be obtained in due course on or prior to the date required
(as contemplated by the Construction Schedule) and will not contain any
condition or requirements, the compliance with which could reasonably be
expected to result in a Material Adverse Effect. The Project, if
constructed in accordance with the Plans and Specifications and otherwise
developed as contemplated by the Major Project Documents, will conform to
and comply with the terms of the Governmental Approvals applicable thereto.
(d) Neither Obligor, to the best of their knowledge, after due inquiry, is in
violation of any Governmental Approval applicable to it, the violation of
which could reasonably be expected to result in a Material Adverse Effect.
6.6 FINANCING DOCUMENTS; MAJOR PROJECT DOCUMENTS; NON-MATERIAL PROJECT
DOCUMENTS; LICENSES
(a) The Financing Documents, the Major Project Documents and the Non-Material
Project Documents constitute and include all contracts and agreements to
which the Project Company, the Borrower or any Affiliate thereof is, or
will be, a party relating to the Development of the Project and the
construction of the Interconnection Upgrades and the Gas Interconnection
Facilities, and the Obligors are not party to any contract or agreement
that is not a Financing Document, a Major Project Document or a
Non-Material Project Document. There are no services to be performed,
materials to be supplied or rights (other than Governmental Approvals),
required for the current stage of the Development of the Project other than
those granted by, or to be provided to the Project Company pursuant to, the
Major Project Documents and the Non-Material Project Documents and other
than those services, materials and inputs that each Obligor reasonably
believes can be obtained by the Project Company in the ordinary course of
business on terms substantially consistent with the Base Case Projection.
The Administrative Agent has received a certified copy of each Major
Project Document and each Non-Material Project Document (in the case of
Non-Material Project Documents, only those under which the Project Company
has obligations (or a right to receive revenues) in excess of $1,000,000
per year), in each case as in effect on the date of delivery and each
amendment, modification or supplement thereto. Except as permitted pursuant
to Section 8.11, no Major Project Documents have been amended, modified or
supplemented or have been Impaired and all of such Major Project Documents
are in full force and effect. All conditions precedent to the obligations
of the respective parties under such Major Project Documents have been
satisfied or waived except for such conditions precedent which need not and
cannot be satisfied until a later stage of Development of the Project, and
the Project Company has no reason to believe that any such condition
precedent cannot be satisfied on or prior to the commencement of the
appropriate stage of Development of the Project. All representations,
warranties and other factual statements made by the Obligors in such Major
Project Documents are correct in all material respects (or, if stated to
have been made solely as of an earlier date, were correct as of such date).
The Obligors are not in default in the performance of any covenant or
obligation set forth in any such Major Project Document and no event of
force majeure (as defined in the applicable Transaction Document) has
occurred and is continuing with respect to such Obligor under any
Transaction Document.
(b) To the best knowledge of each Obligor, no breach, default or event of force
majeure (each as defined in the applicable Transaction Document) has
occurred and is continuing with respect to any Major Project Party under
any Transaction Document.
(c) The Obligors own or have the right to use all permits, licenses,
trademarks, patents, franchises and similar rights with respect to the
usage of technology or other property (other than those constituting
Governmental Approvals) that are necessary for the Development of the
Project except where any such failure to obtain could not reasonably be
expected to result in a Material Adverse Effect.
6.7 USE OF PROCEEDS
(a) The Borrower will use the proceeds of the Loans only (i) to make loans to
the Project Company, (ii) to pay administrative, finance and tax related
Project Costs as specified in the Financing Documents, (iii) to prepay
Equity Bridge Loans, (iv) in the case of the Tranche A Loans, the Tranche B
Loans and the Equity Bridge Loans, to procure the payment of Project Costs
by the Project Company as set forth in the Construction Budget and if
applicable to make payments to the Members in accordance with Section
8.7(b) hereto, and (v) in the case of Working Capital Loans, to procure the
payment of Operation and Maintenance Expenses by the Project Company as set
forth in the Operating Budget and the Construction Budget.
(b) Neither Obligor is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying Margin Stock, and
no part of the proceeds of any extension of credit hereunder will be used
to buy or carry any Margin Stock.
6.8 NO BREACH
The execution, delivery, and performance by each Obligor of each of the
Transaction Documents to which it is or is contemplated by this Agreement to be
a party and the consummation of the transactions contemplated thereby do not and
will not: (a) contravene or violate any provisions of any Applicable Law to
which either Obligor or any of their assets are subject or require any consent
or approval (other than Governmental Approvals) of any Person that has not been
obtained and each such consent and approval that has been obtained is in full
force and effect, (b) conflict with, result in a breach of or constitute a
default under any other Transaction Document or any other material agreement,
lease or instrument to which such Obligor is a party or, to the best knowledge,
after due inquiry, of such Obligor, to which any Affiliate of such Obligor is a
party or by which such Person's property may be bound or affected, (c) result
in, or create any Lien (other than a Permitted Lien) upon or with respect to any
of the properties now owned or hereafter acquired by either Obligor, (d)
conflict with, result in a breach of or constitute a default under the Charter
Documents of either Obligor, or to the knowledge, after due inquiry, of such
Obligor, the Charter Documents of any Affiliate of such Obligor except, in the
cases of each of clauses (a), (b) and (c), where such contravention, violation,
conflict, inconsistency, breach, default, creation or imposition with respect to
the Major Project Documents would not result in a Material Adverse Effect.
6.9 TITLE; SECURITY DOCUMENTS
(a) Each Obligor owns and has good, legal and marketable title to the
Collateral purported to be covered by the Security Documents to which it is
a party, free and clear of all Liens other than Permitted Liens. The
Project Company has unencumbered title and possession of all Properties
(subject only to Permitted Liens) that are necessary for the current stage
of Development of the Project. As at the Closing Date, no letters of credit
have been issued in support of any obligations of either Obligor or under
which either Obligor has any reimbursement obligation or liability.
(b) The provisions of the Security Documents are effective to create, in favor
of the Collateral Agent for the benefit of the Secured Parties, a legal,
valid and enforceable Lien on, and security interest in, all of the
Collateral purported to be covered thereby, and all necessary and
appropriate recordings and filings have been made in all necessary and
appropriate public offices (including, without limitation, in the
jurisdictions set forth in Annex 2 to the Pledge Agreement), and all other
necessary and appropriate action (including, without limitation, payment of
all filing, recording or other fees required in connection with the
creation or perfection of such Lien) has been taken, so that each such
Security Document creates a perfected Lien on, and security interest in,
all right, title, estate and interest of the Obligors and the relevant
Related Party in the Collateral purported to be covered thereby, prior and
superior to all other Liens other than Permitted Liens.
6.10 ACTIONS, SUITS AND PROCEEDINGS
There is no action, suit or proceeding at law or in equity or by, or before, any
Governmental Authority or arbitral tribunal now pending or, to the best of each
Obligor's knowledge, after due inquiry, threatened against or affecting either
Obligor or any of its Property which could reasonably be expected to result in a
Material Adverse Effect.
6.11 ENVIRONMENTAL MATTERS
(a) To the best of each Obligor's knowledge, after due inquiry, such Obligor is
not in violation of any Environmental Law except where such violation could
not reasonably be expected to result in a Material Adverse Effect.
(b) To the best of each Obligor's knowledge, after due inquiry, no Hazardous
Material has been Used or Released by the Project Company or by any other
Person, at, on, under, or from any part of the Project other than in
compliance with all applicable Environmental Laws except where such non
compliance could not reasonably be expected to result in a Material Adverse
Effect.
(c) There are no material Environmental Claims pending or threatened except
where such Environmental Claim could not reasonably be expected to result
in a Material Adverse Effect.
(d) All environmental investigations, studies, audits, tests, reviews or other
analyses conducted by or that are in the possession of either Obligor in
relation to facts, circumstances, or conditions at or affecting the Project
have been provided to the Lenders.
(e) No Liens have arisen under or pursuant to any Environmental Laws on any
part of the Project, and to the best of each Obligor's knowledge, no
government action has been taken or is in process that could subject such
portion of the Project to such Liens, and neither Obligor will be required
to place any notice or restriction relating to the presence of Hazardous
Materials at the Project in any deed to the real property on which the
Project is located other than a notice in the form set forth in the Special
Warranty Deed.
6.12 COMPLIANCE WITH APPLICABLE LAWS
Each Obligor is, to the best of its knowledge, after due inquiry, in compliance
with all Applicable Laws except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
6.13 INVESTMENT COMPANY ACT
Neither Obligor is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or an "investment advisor" within the meaning of the Investment
Company Act of 1940, as amended.
6.14 PUHCA
(a) Neither Obligor is or will be, solely as a result of the participation by
such Person, separately or as a group, in the transactions contemplated
hereby or by any other Transaction Document, or as a result of the
ownership, use or operation of the Project, subject to regulation by any
Governmental Authority of the United States as a "holding company" or a
"public utility company" as defined in PUHCA.
(b) The Project Company is an Exempt Wholesale Generator exempt from regulation
under PUHCA.
6.15 TAXES
Each Obligor has timely filed or caused to be filed all tax returns, information
statements and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except Taxes that are being
contested in good faith by appropriate proceedings and for which each Obligor
has set aside or accrued for on its books adequate reserves in accordance with
GAAP.
6.16 ERISA
(a) Except as set forth in Schedule 6.16, neither Obligor maintains any Plans,
or contributes to any Multi-employer Plans. Each Plan, and, to the best
knowledge of each Obligor, each Multi-employer Plan, is in substantial
compliance in all material respects with, and has been substantially
administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or state law, and no
event or condition has occurred and is continuing as to which an Obligor
would be under an obligation to furnish written notice to the Lenders under
Section 7.4(c).
(b) No ERISA Event or any other event has occurred with respect to any Plan
that has resulted in or could reasonably be expected to result in an
Obligor or an ERISA Affiliate incurring liability which could reasonably be
expected to result in a Material Adverse Effect.
(c) Assuming the accuracy of the Institutional Lenders representations in
Section 5 of the Note Purchase Agreement, the execution and delivery of the
Financing Documents and the issuance and sale of the Notes under the Note
Purchase Agreement will not constitute a non-exempt "prohibited
transaction" under Section 406 of ERISA or in connection with which a tax
could be imposed pursuant to Section 4975(a) of the Code by reason of a
transaction described in Section 4975(c)(1)(A) through (D) of the Code.
6.17 NATURE OF BUSINESS
Neither Obligor has engaged in any business other than the Development of the
Project.
6.18 UTILITY SERVICES
All utility services necessary for the Development of the Project, including, as
necessary, but not limited to, water supply, storm and sanitary sewer, electric
and telephone services, and facilities, are, or will be when needed, available
to the Project Company on commercially reasonable terms consistent with those
reflected in the Base Case Projections, subject to no unreasonable conditions,
in the ordinary course of business.
6.19 DISCLOSURE
A copy of a confidential syndication information memorandum dated June 26, 2000
(the MEMORANDUM), relating to the transactions contemplated hereby has been made
available to each Lender. The Memorandum (other than with respect to the
information set forth under each sub-heading "Mitigants" in Section IX thereof
and in each Appendix thereto as to which no representations are made) including
any updates or supplements thereof, is correct in all material respects when
taken as a whole, and does not, when taken as a whole, contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, not misleading under the circumstances in which
they were made at the time such statements were made.
The projected financial information contained in the Base Case Projections was
prepared in good faith based upon assumptions believed to be reasonable at the
time and represents reasonable projections on the Closing Date of the future
performance of the Project Company, the Borrower and the Project.
6.20 PRIVATE OFFERINGS
Neither the Borrower nor Chase Securities, Inc. (the only Person authorized to
act on behalf of the Borrower) has offered the Notes or any similar securities
for sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other than the
Institutional Lenders and not more than 11 other institutional investors.
Neither the Borrower nor anyone authorized to act on behalf of the Borrower has
taken, or will take, any action which would subject the issuance or sale of the
Notes to Section 5 of the United States Securities Act of 1933, as amended, or
otherwise require the registration, filing or qualification of the Notes under
any applicable laws of the United States of America.
6.21 FEES
Neither Obligor has any obligation to any Person in respect of any finder's,
broker's, investment banking, legal or accounting or other similar fee
(including, without limitation, any fee payable to engineers, environmental
consultants, fuel consultants or similar experts) generated in connection with
any of the transactions contemplated by the Major Project Documents except as
otherwise set forth in the Base Case Projections and the Construction Budget.
6.22 BUDGETS
The Construction Budget (as amended or modified in accordance with this
Agreement) represents the Obligor's reasonable estimates of all costs and
expenses anticipated by the Obligors to be incurred by the Obligors prior to the
Date Certain in order to construct and finance the construction of the Project,
the Interconnection Upgrades and the Gas Interconnection Facilities in the
manner contemplated by the Transaction Documents.
ARTICLE VII. AFFIRMATIVE COVENANTS
Until the Commitments and all Letters of Credit have expired or terminated and
all Secured Obligations payable to the Lenders have been paid in full, the
Borrower (for itself and for the Project Company) and the Project Company (for
itself) covenant and agree with the Lenders that:
7.1 FINANCIAL STATEMENTS AND RELATED INFORMATION
Each Obligor will furnish to the Administrative Agent (with one hard copy and,
if reasonably available, a copy in electronic format):
(a) annual financial statements (audited with respect to all annual financial
statements prepared after the Closing Date), within 90 days after the end
of each fiscal year of such Obligor and setting forth in each case in
comparative form (commencing with the fiscal year ending December 31,
2001), the corresponding figures for the preceding fiscal year, either (i)
accompanied by an opinion thereon of the Auditor (without a "going concern"
or like qualification or exception as to the scope of such audit) to the
effect that said financial statements present fairly in all material
respects the financial position and results of operations of such Obligor
as at the end of, and for, such fiscal year in accordance with GAAP
consistently applied or (ii) for those statements not required to be
audited, accompanied by a certificate of a Financial Officer of the
relevant Obligor, which certificate shall state that said financial
statements present fairly in all material respects the financial position
and results of operations of such Obligor, in accordance with generally
accepted accounting principles, consistently applied, as at the end of, and
for, such period;
(b) quarterly financial statements within 45 days after the end of each of the
first three fiscal quarters of such Obligor, for such period and for the
period from the beginning of the respective fiscal year to the end of such
period, and the related balance sheet as at the end of such period, setting
forth in each case in comparative form (where available), the corresponding
figures for the corresponding period of (or in the case of the balance
sheet, as of the end of) the preceding fiscal year, accompanied by a
certificate of a Financial Officer of the relevant Obligor, which
certificate shall state that said financial statements present fairly in
all material respects the financial position and results of operations of
such Obligor, in accordance with generally accepted accounting principles,
consistently applied, as at the end of, and for, such period (subject to
normal year-end audit adjustments);
(c) concurrently with any delivery of financial statements under clause (a) or
(b) of this Section 7.1, a certificate of a Financial Officer of such
Obligor (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, and (ii) only in connection
with financial statements delivered under clause (a) above, stating whether
any change in GAAP or in the application thereof has occurred since the
date of the audited financial statements referred to in Section 5.1(a)(vii)
and, if any such change has occurred, specifying the effect of such change
on the financial statements accompanying such certificate;
(d) concurrently with the delivery of the financial statements under clause (a)
of this Section 7.1, a discussion and analysis by the management of the
Project Company of the business and operations through the end of the
fiscal year covered by such financial statements, including a discussion
and analysis with respect to (i) the progress of construction during such
period on the Project , the Interconnection Upgrades and the Gas
Interconnection Facilities (in the case of any report delivered on or prior
to the first fiscal quarter ended after the Conversion Date), (ii)
compliance with Environmental Laws, (iii) a statement of all financial
transactions in such period between each Obligor and any of their
Affiliates (other than pursuant to any Transaction Document or between
Borrower and the Project Company), including a certification by a Financial
Officer of each Obligor that such transactions were on ordinary commercial
terms negotiated on an arm's length basis, and (iv) a comparison of the
results of operations of the Project Company for the relevant period to the
Operating Budget for the same period (in the case of any report delivered
on or after the Conversion Date), together with an explanation of any
material variation therefrom; and
7.2 CONSTRUCTION REPORTS; OPERATING REPORTS; ETC.
As soon as available and in any event by the dates set forth below, the Project
Company will furnish to the Administrative Agent (with one hard copy and, if
reasonably available, a copy in electronic format):
(a) not later than five (5), nor earlier than ten (10), Business Days prior to
the beginning of each month, in the case of each month commencing prior to
the Conversion Date, a Construction Progress Report confirmed by the
Independent Engineer and in the case of each quarter commencing on or after
the Operational Acceptance, an Operating Report;
(b) not later than forty-five (45) days after the end of each fiscal quarter
following the Closing Date and before the Conversion Date, a revised
Construction Budget reflecting actual experience and future expectations
for the next twelve (12) months (or, in the event the Conversion Date is
expected to occur within such twelve (12) month period, for the period up
to the Conversion Date), together with an explanation of material
deviations from the then existing Construction Budget; and
(c) promptly, but in any event within five (5) Business Days after the Project
Company's receipt thereof, a copy of each report with respect to the
Performance Tests and the status of the Work delivered by the Contractor
under Article 32 of the EPC Contract and Section 10 and Schedule H of the
Project Technical Requirements (as defined in the EPC Contract).
7.3 OPERATING BUDGET
As soon as available, but in any event not later than thirty (30) days prior to
the Conversion Date and not later than sixty (60) days before the end of each
fiscal year of the Project Company beginning thereafter, the Project Company
will furnish to the Administrative Agent (with one hard copy and, if reasonably
available, a copy in electronic format):
(a) an Operating Budget for the following fiscal year (or, in the case of the
initial Operating Budget, for the period from the Conversion Date until the
end of the then current fiscal year) of the Project Company complying with
the requirements set forth in Section 7.16 (and not less than sixty (60))
days prior to the due date for each such Operating Budget, a draft of such
Operating Budget); and
(b) a certificate of a Financial Officer of the Project Company, certifying
that such Operating Budget is the good faith estimate for each line item
and for each period included therein and represents a complete, fair and
accurate projection in all material respects as of the date such Operating
Budget is submitted, based on all facts and circumstances then existing and
known (based on due inquiry of officers of the Project Company), and
represents the good faith estimate of the future results of the Project
Company.
7.4 NOTICES OF MATERIAL EVENTS; ENVIRONMENTAL MATTERS
The Obligors will furnish written notice of each of the following events,
occurrences, and conditions to the Administrative Agent and each Lender:
(a) as promptly as possible and in any event within three (3) Business Days
after a Financial Officer of an Obligor has actual knowledge thereof, the
occurrence of any Default;
(b) as promptly as possible and in any event within ten (10) Business Days
after a Financial Officer of an Obligor has actual knowledge thereof (i)
the filing or commencement of any action, suit or proceeding or the
assertion of any Environmental Claim relevant in any material respect to
the Development of the Project or the construction of the Interconnection
Upgrades or the Gas Interconnection Facilities by or before any arbitrator
or other Governmental Authority against or affecting an Obligor or any
other Major Project Party or Merchant Stage Project Party or (ii) any other
circumstance, act, or condition with respect to the adoption, material
amendment, interpretation, or repeal of any Applicable Law relevant in any
material respect to the Development of the Project or the construction of
the Interconnection Upgrades or the Gas Interconnection Facilities or the
Impairment of any Governmental Approval or notice (whether formal or
informal, written or oral) of the failure of a Major Project Party or
Merchant Stage Project Party to comply with the terms and conditions of any
Governmental Approval related to the Development of the Project or the
construction of the Interconnection Upgrades or the Gas Interconnection
Facilities in any material respect;
(c) as promptly as possible and in any event within ten (10) Business Days
after a Financial Officer of an Obligor has actual knowledge thereof, the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in
liability of such Obligor in an aggregate amount exceeding $20,000,000;
(d) within ten (10) Business Days after a Financial Officer of the Borrower has
actual knowledge thereof, the assertion of any Environmental Claim by any
Person against, or with respect to the activities of, the Project Company
and any alleged violation of, or non-compliance with, any Environmental
Laws or any permits, licenses or authorizations by the Project Company; and
(e) as promptly as possible and in any event within three (3) Business Days
after a Financial Officer of an Obligor has actual knowledge of any
development that results in, or could reasonably be expected to result in,
a Material Adverse Effect.
Each notice delivered under this Section 7.4 shall be accompanied by a statement
of a Financial Officer of such Obligor setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto. In addition, such Obligor shall, promptly upon request
therefor, furnish such other environmental reports as any Lender may reasonably
request.
7.5 MISCELLANEOUS NOTICES
Each Obligor will furnish to the Administrative Agent:
(a) promptly, notice of any change in the Financial Officers of such Obligor,
including certified specimen signatures of any new officer so appointed
and, if requested by the Administrative Agent, satisfactory evidence of the
authority of such new officer;
(b) promptly after such Obligor's receipt thereof, a copy of any management
letter received by such Obligor from the Auditor in relation to its
financial, accounting and other systems, management or accounts or the
Project;
(c) promptly upon their becoming available, copies of all material notices and
material documents received or given by either Obligor pursuant to any
Major Project Document (including any notice or other document relating to
a failure by the Project Company or other Major Project Party to perform
any of its covenants or obligations under such Major Project Document); and
(d) promptly following any request therefor, such other information regarding
the material operations, business affairs and financial condition of either
Obligor, or compliance with the terms of the Financing Documents, as the
Administrative Agent may reasonably request.
7.6 EXISTENCE; CONDUCT OF BUSINESS
Each Obligor shall preserve and maintain (a) its legal existence as a limited
liability company in good standing under the laws of the jurisdiction of its
organization; (b) its qualification to do business in each other jurisdiction
where such qualification is required; and (c) all of its licenses, rights,
privileges and franchises necessary for the Development of the Project and the
maintenance of its existence and its qualification to do business.
7.7 PAYMENT OF OBLIGATIONS AND TAX FILINGS
Each Obligor shall file all tax returns that are required to be filed and pay
all of its obligations, including liabilities for Taxes, except where (a)(i) the
validity or amount of such payment is being contested in good faith by
appropriate proceedings and (ii) such Obligor has accrued for or set aside on
its books adequate reserves with respect to such payment in accordance with GAAP
and (b) the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
7.8 PROJECT CONSTRUCTION; MAINTENANCE OF PROPERTIES
(a) The Project Company shall cause the Project to be constructed and completed
in all material respects in accordance with (i) all Governmental Approvals
and Applicable Laws (including Environmental Laws), (ii) generally accepted
engineering practice and generally accepted construction procedures, (iii)
the terms of the EPC Contract (including, without limitation, the Plans and
Specifications) and the other relevant Major Project Documents, and (iv)
the Construction Budget and Construction Schedule.
(b) The Project Company shall cause the Project to be operated and maintained
in accordance with all Governmental Approvals, Applicable Laws (including
Environmental Laws), the Major Project Documents and any Merchant Stage
Agreements and shall maintain and operate the Project and all of its other
Properties necessary or useful in the proper conduct of its business in
good working order and condition, ordinary wear and tear and casualty
excepted, and in the case of the Project, in accordance with Prudent
Utility Practices.
(c) Except as otherwise provided in Section 7.9, the Project Company shall
repair or restore any of its material Property now or hereafter the subject
of a Event of Loss (whether or not insured against or insurable) except any
of its Property that the Project Company determines in good faith with the
approval of the Administrative Agent (after consultation) not to be
necessary to the conduct of its business.
7.9 INSURANCE; EVENT OF LOSS; PROJECT DOCUMENT CLAIMS
(a) MAINTENANCE OF INSURANCE. The Project Company shall, (i) maintain and keep
in full force and effect insurance of the types and in the amounts
sufficient to satisfy the Major Project Documents and the Merchant Stage
Agreements but in no event less than the limits and coverage provisions set
forth in Appendix B and (ii) maintain or cause to be maintained all such
workers' compensation or similar insurance as may be required under
Applicable Laws.
(b) RATING. All insurance required to be maintained by the Project Company
under this Section 7.9 will be effected under a valid and enforceable
policy or policies issued by insurers of recognized responsibility, with an
A.M. Best Insurance Reports rating of "A-" or better and a financial size
category of "VIII" or higher (or if not rated by A.M. Best Insurance
Reports, with a claims paying ability rating from S&P of "A" or higher).
(c) CERTAIN INSURANCE POLICY PROVISIONS. All policies of insurance required to
be maintained by the Project Company pursuant to this Section 7.9 covering
loss or damage to any Property shall provide that (i) there shall be no
recourse against any Secured Party for payment of premiums or other amounts
with respect thereto, (ii) the insurer is required to provide the Project
Company, the Administrative Agent and all named insureds with at least
sixty (60) days (or ten (10) days in the case of nonpayment of premiums)
prior notice of reduction in coverage or amount (other than a reduction in
coverage or amount resulting from a payment thereunder), cancellation or
non-renewal of, or material change in coverages of or limits under, any
policy, and (iii) the proceeds of all policies (other than in respect of
professional liability, pollution legal liability, comprehensive general
liability, workers' compensation and comprehensive automobile liability
insurance) shall be payable to the Collateral Agent, named as first loss
payee pursuant to a standard first mortgagee endorsement, without
contribution, naming the Collateral Agent as first loss payee. All policies
(other than in respect of professional liability, pollution legal
liability, comprehensive general liability, comprehensive automobile
liability and workers' compensation insurance) shall insure the interests
of the Secured Parties regardless of any breach or violation by the
Operator, the Contractor or the Project Company of warranties, declarations
or conditions contained in such policies, any action or inaction of the
Operator, the Contractor or the Project Company or others, or any
foreclosure relating to the Project or any change in ownership of all or
any portion of the Project.
(d) COPIES OF INSURANCE CERTIFICATES.
(i) On or prior to the Closing Date and not less than ten (10) days prior
to the expiration of any policy required hereunder with respect to the
Project Company, the Project Company shall deliver written evidence to
the Administrative Agent (in substance satisfactory to the Insurance
Consultant) that the insurance required to be in force by the
provisions of this Section 7.9 will be in place prior to or
simultaneously with the expiration of any existing policies. As soon
as practicable after the certificates relating to such insurance are
available, such certificates will be executed by each insurer or, if
it is not practical for such insurer to execute such certificates,
then by an authorized representative of such insurer or an insurance
broker acceptable to the Administrative Agent. Such certificates will
identify the underwriters, the type of insurance, the insurance
limits, and the policy term and will specifically list the special
provisions enumerated for such insurance required by this Section 7.9.
As soon as practicable after a request by the Administrative Agent,
the Project Company will promptly furnish the Administrative Agent
with copies of all insurance policies, binders and cover notes or
other evidence of such insurance relating to the insurance required to
be maintained by the Project Company hereunder.
(ii) Concurrently with the delivery of the certificates referred to in the
foregoing clause (d)(i), the Project Company will deliver to the
Administrative Agent a certificate of a Financial Officer of the
Project Company (i) confirming that all insurance policies in respect
of the Project required pursuant to this Section 7.9 are in full force
and effect on the date thereof, (ii) confirming the amounts and
expiration date or dates of such policies and the names of the
insurers issuing such policies, (iii) including certificates
evidencing payment of any premiums then due, in form and substance
reasonably satisfactory to the Administrative Agent and the Required
Lenders and (iv) stating that such policies comply with the
requirements of this Section 7.9.
(e) MODIFICATIONS TO INSURANCE COVERAGE. The Required Lenders may at any time
amend the requirements of Section 7.9(a), (b) and (c) upon (i) new
information becoming known to the Lenders that was not known by the Lenders
on the Closing Date or (ii) a material change in circumstances arising
after the Closing Date that, in either case, in the reasonable judgment of
the Required Lenders renders the coverage provided for therein materially
inadequate; PROVIDED that (i) if the Obligors dispute that such amendments
are required, the parties shall consult with an independent insurance
consultant selected by the Obligors and the Administrative Agent (or, if no
agreement can be reached on such selection, shall consult with the
Insurance Consultant, acting independently) and such insurance consultant
shall determine whether such amendments are reasonably required.
Notwithstanding the foregoing, the Obligors shall not be required to obtain
any insurance otherwise required as a result of an amendment to the
requirements of Section 7.9(a), (b) or (c), if such insurance is not
available on commercially reasonable terms.
(f) RIGHT TO PROCURE INSURANCE. If the Project Company fails to procure or
maintain the insurance coverage required by it under this Section 7.9, the
Lenders (or their agents), upon thirty (30) days prior notice (unless such
insurance coverage would lapse within such period, in which event notice
should be given as soon as reasonably possible) to the Project Company of
any such failure, may (but shall not be obligated to) take out the required
policies of insurance and pay the premiums on the same. All amounts so
advanced therefor by the Lenders or such agents shall become an additional
obligation of the Obligors to such Lenders (or agent), and the Obligors
shall forthwith pay such amounts to such Lenders (or agents), together with
interest thereon at the applicable Default Rate from the date so advanced.
(g) COMPROMISE, ADJUSTMENT OR SETTLEMENT. The Administrative Agent shall be
entitled at its option to participate in any compromise, adjustment or
settlement in connection with any Event of Loss under any policy or
policies of insurance or otherwise in excess of $5,000,000 and either the
Borrower or the Project Company shall within five (5) Business Days after
request therefor reimburse the Administrative Agent for all reasonable
out-of-pocket expenses (including reasonable attorneys' and experts' fees)
incurred by the Administrative Agent in connection with such participation.
Neither Obligor shall make any compromise, adjustment or settlement in
connection with any such claim with a value in excess of $5,000,000 without
the approval of the Required Lenders.
(h) NOTICE OF EVENT OF LOSS OR CHANGE IN INSURANCE COVERAGE. The Project
Company shall promptly notify the Administrative Agent of any actual or,
upon obtaining actual knowledge thereof, potential Event of Loss that is
reasonably likely to result in damage in excess of $5,000,000. The
Administrative Agent shall promptly notify each Lender of each written
notice received by it with respect to the cancellation of, adverse change
in, or default under, any insurance policy required to be maintained in
accordance with this Section 7.9.
(i) LOSS PROCEEDS AND PROJECT DOCUMENT CLAIMS. In the event that the Borrower,
the Project Company or the Administrative Agent receives Loss Proceeds in
respect of any Event of Loss in an aggregate amount greater than or equal
to $5,000,000, the Net Available Amount of such Loss Proceeds shall be
deposited in the Loss Proceeds Account and shall be made available by the
Collateral Agent to the Project Company to complete Restoration Work in
accordance with Section 7.9(j).
In the event that the Borrower, the Project Company or the Administrative
Agent receives any Loss Proceeds or proceeds of any Project Document Claims
(other than Buy Down Amounts) in an aggregate amount less than $5,000,000,
such amounts shall be deposited in the Revenue Account or Construction
Account, as applicable.
In the event that the Borrower or the Project Company receives any proceeds
from any other Project Document Claims, the Net Available Amount of such
Project Document Claims shall be deposited in the Loss Proceeds Account and
(A) in the case of any Buy Down Amounts, shall be made available by the
Collateral Agent to the Project Company to complete Restoration Work in
accordance with Section 7.9(j), and (B) in the case of a Project Document
Claim that is not a Buy Down Amount, shall be released to the Construction
Account or Revenue Account, as applicable, PROVIDED no Default has occurred
and is continuing and the average and minimum Debt Service Coverage Ratios
for each fiscal year during the then current Tolling Period (if applicable)
shall be not less than 1.45 to 1 and 1.40 to 1 respectively, and average
and minimum Debt Service Coverage Ratios for each fiscal year thereafter or
otherwise until the Tranche B Final Maturity Date shall be not less than
3.6 and 2.7, respectively. If a Default has occurred and is continuing or
the Debt Service Coverage Ratio tests referred to in the preceding sentence
cannot be met, the Net Available Proceeds of such Project Document Claim
described in clause (B) of this paragraph, shall be applied to the
prepayment of the Loans as set forth in Section 4.2 within ten (10)
Business Days of such amount being deposited in the Loss Proceeds Account.
(j) RESTORATION. Amounts to be made available to the Project Company from the
Loss Proceeds Account to be applied, as applicable, (A) to the repair or
restoration (including, but not limited to, designing, engineering,
constructing and completing such repair or restoration) of Affected
Property following any Event of Loss or (B) to undertake further
construction to enable the Project to operate at the Performance Guarantee
Levels following a failure by the Contractor to satisfy the applicable
Performance Tests (RESTORATION WORK) shall be remitted to the Project
Company by the Collateral Agent, subject to the satisfaction of the
following conditions:
(i) The Independent Engineer shall have delivered to the
Administrative Agent a certificate to the effect that the amount
of Net Available Proceeds in the Loss Proceeds Account with
respect to such Loss Proceeds or Buy Down Amounts, as applicable,
is sufficient (together with all Project Revenues and other
amounts reasonably expected to be available to the Project
Company) (A) in the case of an Event of Loss, to restore the
Affected Property, or (B) in the case of any Buy Down Amounts, to
enable the Project to be constructed to operate at the
Performance Guarantee Levels, and (C) in each case, to pay all
Project Costs, Operation and Maintenance Expenses, Major
Maintenance Expenditures, and Debt Service during the period of
time that, in the opinion of the Independent Engineer, is
required to undertake such Restoration Work (the RECONSTRUCTION
PERIOD).
(ii) Before the Project Company commences any Restoration Work (other
than temporary Restoration Work to protect Property, to prevent
interference with business or to comply with Applicable Laws),
the Administrative Agent (after consultation with the Independent
Engineer) shall have determined that the plans and specifications
for such Restoration Work provide that, upon completion thereof,
the Project shall be (i) in the case of an Event of Loss, at
least equal in value and general utility as the Project was prior
to the Event of Loss and (ii) in the case of a failure to satisfy
the applicable Performance Tests, able to operate at the
Performance Guarantee Levels.
(iii) No Major Project Document or Governmental Approval required to
be in effect under this Agreement shall have been Impaired, or be
subject to Impairment, due to such Event of Loss or a failure to
meet the applicable Performance Tests, except for such
Governmental Approvals as are reasonably likely to be reinstated
or fully replaced upon the completion of the Restoration Work.
(iv) The Property of the Project Company constituting the Restoration
Work shall be subject to the Lien of the Security Documents
(whether by amendment to the Security Documents or otherwise).
(v) Each request for payment of Restoration Work shall be made on
five (5) days (or such additional time as the Administrative
Agent reasonably believes is necessary, but in no event more than
ten (10) days) prior notice to the Administrative Agent and shall
be accompanied by (A) a certificate of a Financial Officer of the
Project Company and the Independent Engineer certifying that (1)
all of the Restoration Work completed as of the date of the
certificate is in substantial compliance with the plans and
specifications under Section 7.9(j)(i) and (ii), (2) the sum
requested is required to pay, or to reimburse the Project Company
for, costs incurred in connection with such Restoration Work and
providing a brief description of the services and materials
provided in connection with such Restoration Work, and (3) the
amount of the relevant Loss Proceeds or Buy Down Amounts, as
applicable, remaining in the Loss Proceeds Account, together with
other amounts available (in the opinion of the Administrative
Agent) to the Project Company, will be sufficient to complete the
Restoration Work (giving in such reasonable detail as the
Administrative Agent may require, an estimate of the cost of such
completion), (B) a certificate of a Financial Officer of each
such Obligor certifying that: (1) the representations and
warranties of such Obligor contained in Article VI are true and
correct on and as of such date in all material respects as if
made on and as of such date (or, if stated to have been made
solely as of an earlier date, were true and correct as of such
date) and (2) no Default has occurred and is continuing on such
date and (C) if requested by the Administrative Agent: (1)
partial lien waivers executed by each contractor involved in such
Restoration Work which shall cover all labor, materials
(including, without limitation, equipment and fixtures of all
kinds), supplies or services done, performed or furnished at, for
or to the Project in connection with such Restoration Work to the
date of such payment, (2) a continuation report of or endorsement
to the title insurance policy delivered under Section 5.1(a)(xv)
to the date of such payment, in the form approved by the
Administrative Agent, setting forth no additional exceptions
(including, without limitation, survey exceptions) except those
approved by the Administrative Agent, (3) a survey of the Project
Site certified to the Project Company and the Administrative
Agent, updated, with respect to all relevant requirements and
information required in Section 5.1(a)(xv), and (4) such other
certificates, documents or other information as the
Administrative Agent shall reasonably request.
If the Project Company shall not have commenced the Restoration Work in
accordance with this Section 7.9(j) within ninety (90) days after it has
received notice of the receipt by the Collateral Agent of the Net Available
Proceeds referred to above, or at any time after such ninety-day period one or
more of the foregoing conditions shall not be satisfied, then such Net Available
Proceeds shall be applied to the prepayment of the Loans as set forth in Section
4.2. Anything to the contrary in this Section 7.9 notwithstanding, if an Event
of Default shall have occurred and be continuing, the Collateral Agent may apply
any amount of such Net Available Proceeds in accordance with the Disbursement
Agreement.
Any amount remaining in the Loss Proceeds Account after the relevant Restoration
Work has been completed (which may, in the case of Buy Down Amounts, be
completed by the Contractor) shall be deposited in the Construction Account or
the Revenue Account as applicable; PROVIDED the Administrative Agent (after
consultation with the Independent Engineer) is satisfied that the Project (i) in
the case of any Loss Proceeds, is substantially equivalent in general utility as
the Project was prior to the Event of Loss or (ii) in the case of any Buy Down
Amounts, is able to operate at the Performance Guarantee Levels.
7.10 BOOKS AND RECORDS; INSPECTION RIGHTS; ACCOUNTING AND ACCOUNTING MATTERS
(a) Each Obligor will keep proper books of record and account in which full,
true and correct entries are made of all dealings and transactions in
relation to its business and activities. Each Obligor will permit the
Administrative Agent, the Collateral Agent, any Lender, or any
representative thereof, upon reasonable prior notice, to visit and inspect
its properties, to examine and make extracts from its books and records,
and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as
reasonably requested, PROVIDED that in the case of any visit by the Lenders
other than when an Event of Default has occurred and is continuing, the
Lenders shall be required to provide not less than five (5) Business Days
notice of their intent to inspect, shall be limited to two group
inspections per year with respect to all Lenders and such inspections shall
occur during normal business hours. The Independent Engineer shall have the
right to inspect, upon reasonable prior notice to the Project Company, the
Project from time to time, to witness and verify the Performance Tests and
to discuss the affairs with its principal officers and engineers, all at
such times reasonable for the Project Company. In addition, the Project
Company shall use all reasonable efforts to obtain the consent of PECO,
Conectiv or TETCO, as applicable, to permit the Independent Engineer to
inspect the Interconnection Upgrades and the Gas Interconnection Facilities
from time to time, upon reasonable prior notice to the Project Company. The
Project Company shall at all times maintain and preserve a complete set of
the Plans and Specifications (and any plans and specifications relating to
Restoration Work) at the Project Site and available for inspection by the
Independent Engineer, the Administrative Agent and any Lender.
(b) Each Obligor shall authorize the Auditor (whose fees and expenses shall be
for the accounts of the Project Company) to communicate with the officers
and designated representatives of the Administrative Agent, the Lenders and
the Collateral Agent from time to time upon reasonable prior notice to the
Project Company.
7.11 COMPLIANCE WITH LAWS
Each Obligor shall comply with all Applicable Laws, including without limitation
Environmental Laws, and shall from time to time obtain and renew, and shall
comply with, all Governmental Approvals as shall now or hereafter be necessary
for such Obligor to comply with such Applicable Laws, except any such Applicable
Laws or Governmental Approvals, the failure to obtain, renew or comply with,
could not reasonably be expected to result in a Material Adverse Effect.
7.12 MAINTENANCE OF LIEN
Each Obligor shall take, or cause to be taken, all action required or desirable
to maintain and preserve the Liens created by the Security Documents and the
priority thereof. Each Obligor shall from time to time execute or cause to be
executed further instruments (including financing statements, continuation
statements and similar statements with respect to any Security Document)
reasonably requested by the Administrative Agent for such purposes. Each Obligor
shall promptly discharge at such Obligor's cost and expense, any Lien (other
than Permitted Liens) on the Collateral.
7.13 INDEPENDENT ENGINEER; INSURANCE CONSULTANT
Each Obligor and the Project Company (a) shall permit the Independent Engineer
and the Insurance Consultant to carry out the roles described in the Independent
Engineer Agreement and the Insurance Consultancy Agreement, respectively, and
will cooperate in all reasonable respects with the Independent Engineer and the
Insurance Consultant carrying out their respective role, and (b) shall ensure
that each of the Independent Engineer and the Insurance Consultant will be
provided with all information requested and reasonably required by such Person
and will exercise due care to ensure that any information with respect to each
Obligor, the Project, the Interconnection Upgrades and the Gas Interconnection
Facilities which it may supply to the Independent Engineer or the Insurance
Consultant is materially accurate.
7.14 SECURITY INTEREST IN NEWLY ACQUIRED PROPERTY; ADDITIONAL MAJOR PROJECT
DOCUMENTS AND MERCHANT STAGE AGREEMENTS
If an Obligor shall at any time acquire any interest in Property not covered by
the existing Security Documents or enter into any Additional Major Project
Document or Merchant Stage Agreement, promptly upon such acquisition or
execution, such Obligor shall (a) execute, deliver and record or register, as
applicable, an appropriate pledge, mortgage or other instrument, or a supplement
to the then existing Security Documents, satisfactory in form and substance to
the Administrative Agent, subjecting such interests to the lien and security
interests created by the Security Documents, (b) ensure that the security
interest in such interest in property will be a valid and effective interest
pursuant to the terms of the Security Documents, and (c) in the case of
Additional Major Project Documents and Merchant Stage Agreements under which an
Obligor shall have obligations (or a right to receive revenues) in any fiscal
year in excess of $5,000,000, deliver to the Collateral Agent, on behalf of the
Lenders, a Consent and Agreement to assignment for each such Additional Major
Project Document or Merchant Stage Agreement, substantially in the form of
Exhibit B (unless, in the case of Merchant Stage Agreements, such Consent and
Agreement is not required under the energy management procedures previously
agreed under Section 7.19 hereof).
7.15 OPERATING BUDGET
(a) The Project Company shall ensure that the draft Operating Budget and the
final version thereof delivered pursuant to Section 7.3 shall each contain
complete, fair and accurate estimates (by principal components) of
revenues, Operating and Maintenance Expenses and projected Debt Service,
based on the Project Company's good faith reasonable projections at such
time, which shall be based on all facts and circumstances then existing and
known to the Project Company and shall reflect the Project Company's good
faith estimate of the future results of the Project Company. Operating
Budgets shall be prepared on a consistent basis, and in sufficient detail
to permit a meaningful comparison from year to year. The Administrative
Agent and the Independent Engineer shall review the draft Operating Budget
and shall either approve such Operating Budget (acting reasonably) or
advise the Project Company that it has not been approved and specify which
items therein that are disapproved and the reason for such disapproval. If
any items are disapproved, the Administrative Agent (upon consultation with
the Independent Engineer) and the Project Company will promptly work
together to reach an agreement on such items. Until resolution of such
dispute, the Project Company shall adhere to all approved aspects of such
Operating Budget and shall be granted an allowance of up to ten percent
(10%) over the amount approved in the previous Operating Budget for each
item which was disapproved until such time as the Operating Budget has been
approved in its entirety. Amounts in relation to fuel costs, to the extent
disputed, shall not be limited in the manner described above. Approval of
the Operating Budget (including resolution of any disputed items) shall not
be unreasonably withheld or delayed. The Project Company may transfer
amounts to different line items in the Operating Budget as long as the
aggregate amounts set forth in such Operating Budget are not increased or
decreased.
(b) The Project Company will use good faith reasonable efforts to operate and
maintain the Project, or cause the Project to be operated and maintained,
within the Operating Budget.
(c) Concurrently with the preparation of each Operating Budget, the Project
Company shall re-assess the scheduling and probable cost of each item of
major maintenance and include a timetable and budget therefor in such
Operating Budget.
7.16 MAJOR PROJECT DOCUMENTS; ETC.
(a) Each Obligor shall: (i) perform and observe all of its material covenants
and obligations contained in each of the Major Project Documents and
Merchant Stage Agreement to which it is a party, (ii) take all reasonable
and necessary action to prevent the termination or cancellation of any such
Major Project Document prior to its scheduled termination date, (iii)
enforce against the relevant Major Project Party each material covenant or
obligation of such Major Project Document in accordance with its terms,
(iv) use its commercially reasonable efforts to enter into the PJM
Interconnection Service Agreement and the Conectiv Interconnection
Construction Agreement as soon as practicable after the Closing Date and
(v) enter into the PJM Interconnection Service Agreement and the Conectiv
Interconnection Construction Agreement no later than January 15, 2001, in
the case of the PJM Interconnection Service Agreement, and April 1, 2001,
in the case of the Conectiv Interconnection Construction Agreement.
Notwithstanding the above, the Project Company shall not be required to
enter into the Conectiv Interconnection Construction Agreement if the terms
governing the construction and upgrades of the Conectiv transmission system
and incorporated into the PJM Interconnection Service Agreement are in form
and substance satisfactory to the Administrative Agent (acting on the
instructions of the Majority Lenders).
(b) Promptly after the Project Company receives copies of the filing by any
Major Project Party, any Merchant Stage Project Party or any other Person
with any Governmental Authority of any material tariff or rate schedule of
specific or general applicability relating to any Major Project Document or
Merchant Stage Agreement, the Project Company shall furnish copies thereof
to the Administrative Agent and the Lenders, together with a detailed
description of the effect that such tariff or rate schedule has or will
have upon the Project and a description of the actions that the Project
Company proposes to take with respect thereto.
(c) Prior to the Conversion Date, the Project Company shall (a) promptly upon
receipt thereof furnish a copy of each invoice delivered under Section 28
of the EPC Contract, (b) promptly provide the Independent Engineer such
information as the Independent Engineer shall reasonably request as a basis
for issuing its certification in connection with any disbursement from the
Revenue Account to cover such costs, and (c) afford the Independent
Engineer an opportunity to review and discuss the Project Company's
assessment of the completion of the Work and the related costs incurred
with respect thereto. If requested by the Independent Engineer, the Project
Company shall allow the Independent Engineer to visit the Project Site to
review the Work and the costs associated therewith.
7.17 RATING OF THE LOANS
The Borrower shall apply and pay for a rating of the Loans by S&P or Moody's or
another nationally recognized rating agency if requested by the Majority Lenders
after the Closing and at any time up to Conversion and within one year
thereafter and if deemed necessary to obtain an NAIC rating; PROVIDED that the
results of such rating shall in no way affect the Lenders' obligations under
this Agreement or result in an Event of Default. The Borrower shall only be
required to apply and pay for one such rating.
7.18 POWER PRICE FORECAST
The Project Company shall deliver a power price forecast refreshment within
twelve (12) months of the end of the initial Tolling Period and in addition, at
the request of the Required Lenders, upon the occurrence of an event that has a
material adverse effect on the PJM Power Market from the perspective of a power
generator selling into such market. Such power price forecast refreshment shall
be used for informational purposes only and results of such refreshment shall
not in any way affect the Lenders' or Obligors' obligations under this
Agreement, result in an Event of Default, require cash sweeps of Project
Revenues or prohibit Restricted Payments.
7.19 ENERGY MANAGEMENT PROCEDURES
Within twelve (12) months of the end of the initial Tolling Period but not later
than six (6) months before the end of the initial Tolling Period, the Project
Company shall deliver to the Administrative Agent for approval (such approval
not to be unreasonably withheld or delayed), its proposed energy management
procedures and general contract terms for agreements for the sale of electric
power and the purchase of natural gas during any period when a Tolling Period is
not in effect.
ARTICLE VIII. NEGATIVE COVENANTS
Until the Commitments and all Letters of Credit have expired or terminated and
all Secured Obligations payable to the Lenders have been paid in full, the
Borrower (for itself and for the Project Company) and the Project Company (as to
itself) covenant and agree with the Lenders that:
8.1 INDEBTEDNESS
Each Obligor will not at any time directly or indirectly create, incur, assume
or otherwise be or become liable for any Indebtedness, except Permitted
Indebtedness.
8.2 LIENS
Each Obligor will not create, assume, incur or suffer to exist any Lien upon or
with respect to any Property now owned or hereafter acquired by it (including,
without limitation, the Collateral), or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except for
Permitted Liens.
8.3 MERGER, AND CONSOLIDATION; DISPOSITION OF ASSETS
(a) Neither Obligor shall be a party to any merger or consolidation or, except
in the ordinary course of business, transfer, sell, assign (except as
contemplated by the Security Documents), convey, lease or otherwise dispose
of any of its Property (whether now owned or hereafter acquired) except
that the Project Company may (i) dispose of any obsolete or worn-out
Property no longer required in connection with the operation of the
Project, (ii) dispose of Property that is replaced by other Property of
like utility in the Project Company's business in an aggregate amount not
at any time exceeding $2,000,000 for the Project Company in any one fiscal
year and (iii) convey the Producer Built Facilities to PECO as contemplated
by Section 12.11 hereto.
(b) Neither Obligor shall purchase or acquire any assets other than (i) assets
required in the ordinary course of business to operate and maintain the
Project in accordance with the Major Project Documents and the Non-Material
Project Documents, (ii) assets reasonably required in connection with the
restoration of the Project in accordance with Section 7.9(j), and (iii)
Permitted Investments.
(c) The Project Company shall not create or cause to be created any Subsidiary.
The Borrower shall not create or cause to be created any Subsidiary other
than the Project Company.
8.4 ORGANIZATIONAL DOCUMENTS; FISCAL YEAR; LEGAL FORM
Neither Obligor will amend or modify its Charter Documents, except for any
amendment or modification (a) necessary to cure an ambiguity, inconsistency,
formal defect or omission therein, or for the purposes of increasing its
capital, and (b) which does not adversely affect the Lenders, as so certified by
such Obligor but as determined by the Administrative Agent, such determination
not to be unreasonably withheld or delayed. Neither Obligor will change its
legal form or change its fiscal year.
8.5 NO OTHER BUSINESS
Neither Obligor will carry on any business other than the Development of the
Project and the execution and performance of the Transaction Documents and the
Non-Material Project Documents and the transactions contemplated thereby and
will take no action, whether by acquisition or otherwise, which would constitute
or result in any material alteration to the nature of that business or the
nature or scope of the Project.
8.6 INVESTMENTS
Neither Obligor will make, or permit to remain outstanding, any Investments
except Permitted Investments and Permitted Interest Rate Protection Agreements.
8.7 RESTRICTED PAYMENTS
(a) The Borrower shall not, directly or indirectly, declare or make any
Restricted Payment unless each of the following conditions is satisfied on
the date of payment of such Restricted Payment:
(i) the Conversion Date and Plant Completion shall have occurred;
(ii) no Default shall have occurred and shall be continuing or would result
from the making of such Restricted Payment;
(iii) the Debt Service Coverage Ratio for the immediately previous four
full fiscal quarters (or, during the 12-month period following the
Conversion Date, for each full fiscal quarter since the Conversion
Date) and the projected Debt Service Coverage Ratio for the
immediately succeeding four full fiscal quarters shall be at least 1.2
to 1, PROVIDED that when a Tolling Period is not in effect, the Debt
Service Coverage Ratio for the previous four full fiscal quarters and
following eight full fiscal quarters must be at least 1.7 to 1;
PROVIDED that, if in any such period of four preceding fiscal
quarters, a Tolling Period existed, but not for the entire such
period, the applicable Debt Service Coverage Ratio shall be
proportionately adjusted (in other words, if a Tolling Period existed
for one-half of such period the required Debt Service Coverage Ratio
shall be 1.45 to 1 and if a Tolling Period existed for one-quarter of
such period, the required Debt Service Coverage Ration shall be 1.325
to 1;
(iv) the Debt Service Reserve Account Balance is not less than the Required
Debt Service Reserve Amount and no Debt Service Reserve Loans are
outstanding;
(v) the balance in the Major Maintenance Account is not less than the
Required Major Maintenance Amount;
(vi) the Administrative Agent shall have received a certificate, dated the
date of such Restricted Payment from a Financial Officer of the
Borrower to the effect set forth in clauses (a) through (e) above
(which certificate shall include calculations demonstrating compliance
with clause (c) above);
(vii) the amount of Restricted Payment shall not exceed the collected
balance of the Distribution Account and shall be paid only from funds
in the Distribution Account; and
(viii) such Restricted Payment is made on a Repayment Date (as defined in
the Disbursement Agreement) or, if on the immediately preceding
Repayment Date, the Restricted Payment could not be made because of
the existence of a Default, upon the cure or cessation of such
Default.
Any amounts blocked in the Distribution Account as a result of the
inability of the Obligors to satisfy one or more of the conditions set out
above may be utilized at the option of the Borrower to prepay Loans in
accordance with the provision of Section 4.3 hereof and in accordance with
each of the applicable provisions of the Loan Agreements (including without
limitation the payment of any applicable Make Whole Amount).
(b) Notwithstanding the above, the Borrower may make a Restricted Payment from
amounts in the Construction Account on the Conversion Date in accordance
with Section 4.4(c)(ii) hereto in an amount equal to the amount by which
the aggregate Equity Contributions made prior to the Conversion Date (not
exceeding $41,000,000) exceed the amount of Equity Contributions that would
have been required to be made if such Equity Contributions had been made on
the Conversion Date pursuant to the terms of the Equity Contribution
Agreement.
8.8 TRANSACTIONS WITH AFFILIATES AND NON ARMS'-LENGTH DEALING
Neither Obligor shall enter into any transaction or series of related
transactions (including without limitation the purchase, lease, sale or exchange
of Property or the rendering of any services) with any Person (including any
Affiliate of either Obligor) except pursuant to the reasonable requirements of
such Obligor's business and on an arm's length basis; except for transactions
approved by the Administrative Agent (acting on the instructions of the Majority
Lenders).
8.9 MAINTENANCE OF PROPERTIES
Except as otherwise provided in Section 7.9(j), neither Obligor shall permit all
or any portion of the Project to be removed (except in the ordinary course of
business with respect to maintenance of components of the Project that is
required to be conducted off of the Project Site), demolished or materially
altered if such removal, demolition or alteration may adversely affect the
ongoing Development of the Project (including preventing the Project from
operating at the Performance Guarantee Levels).
8.10 COMPLETION; PERFORMANCE TESTS
(a) Neither Obligor shall, without the prior consent of the Administrative
Agent and the Independent Engineer: (a) accept or confirm that the Project
(or any portion thereof) has achieved Operational Acceptance, Actual Plant
Acceptance or Plant Completion, (b) accept the completion of the Punch List
Items or (c) accept or confirm that the Project has satisfied any of the
Performance Tests or met any of the Performance Guarantee Levels. If the
Administrative Agent or the Independent Engineer, as the case may be, fails
to respond to any action of an Obligor requiring approval by the
Administrative Agent under this Section 8.10, within the number of days
specified in the request for such approval from such Obligor (but in no
event less than five (5) Business Days), then such action shall be deemed
approved unless the action in question could reasonably be expected to
result in a Material Adverse Effect.
(b) The Project Company shall not, without the prior written consent of the
Administrative Agent (acting on the instruction of the Majority Lenders)
enter into any change orders under the EPC Contract other than change
orders which do not exceed $2,000,000 individually or $8,000,000 in the
aggregate; PROVIDED that, after giving effect to such change orders, (i)
the Project when completed will have the installed capacity and net
capacity of at least 96% of the Performance Guarantee Levels and the
Project Company shall continue to be entitled to Buy Down Amounts to the
extent set forth in the EPC Contract as of the date hereof if the Project
fails to reach installed capacity or net capacity of at least 100% of the
Performance Guarantee Levels, (ii) the Project is expected to achieve
Operational Acceptance on or before the Date Certain and (iii) total
Project Costs will not exceed the amount available for drawing under the
Tranche A Facility, the Tranche B Facility and the Equity Bridge Loan
Facility.
(c) The Project Company shall not materially change the Construction Budget
(although it may transfer amounts to different line items in the
Construction Budget PROVIDED that development costs may not be increased)
or the Construction Schedule, except (a) material changes approved in
writing by the Administrative Agent (acting on the instruction of the
Majority Lenders), (b) material changes in the Construction Schedule which
have been reviewed and approved by the Independent Engineer and which do
not impair the ability of the Project to achieve Operational Acceptance, or
the ability of the Contractor to achieve Actual Plant Acceptance, on or
prior to the Date Certain, and (c) material changes in the Construction
Budget which have been reviewed and approved by the Independent Engineer
and which do not cause the total projected Project Costs to exceed the
amount available for drawing under the Tranche A Facility, the Tranche B
Facility and the Equity Bridge Loan Facility.
8.11 MAJOR PROJECT DOCUMENTS; ETC.
(a) Neither Obligor shall without the prior written consent of the
Administrative Agent (acting on the instruction of the Majority Lenders
(who shall make such determination in accordance with Section 12.2(d)
hereof)) (i) cancel or terminate any Major Project Document or Merchant
Stage Agreement to which it is a party or consent to or accept any
cancellation or termination thereof prior to the scheduled expiration
thereof, (ii) sell, assign (other than pursuant to the Security Documents)
or otherwise dispose of (by operation of law or otherwise) any part of its
interest in any Major Project Document or Merchant Stage Agreement, (iii)
waive any default under or breach of any material provision of any Major
Project Document or Merchant Stage Agreement or waive, fail to enforce,
forgive, compromise, settle, adjust or release any material right, interest
or entitlement, howsoever arising, under, or in respect of any Major
Project Document or Merchant Stage Agreement, or (iv) amend, supplement,
modify or in any way vary or agree to any variation of any material
provision of any Major Project Document or Merchant Stage Agreement or of
the performance of any material covenant or obligation by any other Person
under any Major Project Document or Merchant Stage Agreement (in each case
as in effect on the Closing Date and as thereafter amended, supplemented or
modified in accordance with this clause (a)). Notwithstanding the above,
the Obligors may carry out any of the actions described in sub clauses (i)
through (iv) above with respect to a Merchant Stage Agreement, if such
action is consistent with the energy management procedures and general
contract terms for Merchant Stage Agreements previously agreed between the
Administrative Agent and the Obligors.
(b) Neither Obligor shall enter into any Additional Major Project Document
(including the PJM Interconnection Service Agreement and the Conectiv
Interconnection Construction Agreement) without the prior approval of the
Administrative Agent (acting on the instructions of the Majority Lenders).
(c) Neither Obligor shall enter into any contract or agreement (other than the
Major Project Documents and the Financing Documents) which restricts the
ability of such Obligor to: (i) enter into amendments, modifications,
supplements or waivers of the Major Project Documents, any Merchant Stage
Agreements or the Financing Documents, (ii) sell, transfer or otherwise
dispose of its Property, (iii) create, incur, assume or suffer to exist any
Lien upon any of its Property other than Permitted Liens, or (iv) create,
incur, assume, suffer to exist or otherwise become liable with respect to
any Indebtedness other than Permitted Indebtedness.
8.12 PUBLIC UTILITY HOLDING COMPANY ACT
The Project Company shall not lose its status as an "Exempt Wholesale Generator"
under Section 32 of PUHCA. The Project Company will not take any action which
could result in the Project Company being subject to regulation by any
Governmental Authority of the United States of America as a "public utility
company" under PUHCA or state law.
ARTICLE IX. EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT
If any of the following events (EVENTS OF DEFAULT) shall occur and so long as
any such event shall be continuing:
(a) the Borrower shall default in the payment when due of any principal under
any Loan Agreement whether at stated maturity, at a date fixed for payment,
or otherwise, or in the payment when due of any Make Whole Amount; or
(b) the Borrower shall default in the payment when due of interest under any
Loan Agreement or any fee, or any other amount payable by it hereunder or
under any other Financing Document and such default shall continue
unremedied for a period of five (5) or more Business Days after the
occurrence of such default; or
(c) any representation or warranty made or deemed made by an Obligor in any
Transaction Document to which it is a party or any representation, warranty
or statement made by an Obligor in any certificate, financial statement or
other document furnished to the Administrative Agent by such Obligor under
any Transaction Document proves to have been incorrect in any material
respect as of the time made or deemed made and the act, omission or event
resulting in such misrepresentation or breach, if susceptible to cure,
continues unremedied for a period of thirty (30) or more days PROVIDED that
if such act, omission or event cannot be cured in such 30-day period but is
susceptible to cure within a longer period, the Obligors may have an
additional 90 days to cure such act, omission or event if the Obligors are
diligently pursuing such cure;
(d) an Obligor shall default in the performance of any of its obligations under
any of Sections 7.6(a) or (b), 7.9, 8.1, 8.2, 8.5, 8.7, 8.8, 8.10(b) and
(c) or 8.11 in the Master Agreement; or
(e) an Obligor shall fail to observe or perform any of its other obligations
contained in this Agreement or under any other Financing Document or
Security Document (other than those specified in clauses (a), (b), (c) or
(d) of this Section 9.1) and such failure shall continue unremedied for a
period of thirty (30) or more days from the date that a Financial Officer
of such Obligor has actual knowledge thereof; PROVIDED that if such failure
cannot reasonably be cured in such 30 day period but is susceptible to cure
within a longer period, such Obligor may have an additional 90 days to cure
such failure if such Obligor is diligently pursuing such cure and no
Material Adverse Effect has resulted from such failure or would be
reasonably likely to result from such failure in such 90-day period; or
(f) any Major Project Party (other than an Obligor) shall fail to observe or
perform any of its obligations contained in any Financing Document to which
it is a party (or shall renounce in writing its obligations with respect
thereto) and such failure shall continue uncured after the expiration of
the applicable grace period set forth therein; or
(g) any event or condition occurs that results in any Material Indebtedness of
an Obligor becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both)
the holder or holders of any Material Indebtedness or any trustee or agent
on its or their behalf to cause any Material Indebtedness to become due, or
to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; PROVIDED that this clause (g) shall not
apply to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the Property securing such Indebtedness; or
(h) a proceeding or case shall be commenced, without the application or consent
of an Obligor, PG&E, any Alternative Power Party or, prior to the
Conversion Date, Duke Capital Corporation, Fluor Corporation or an Equity
Guarantor, in any court of competent jurisdiction seeking (i) liquidation,
reorganization, dissolution, winding up, or composition or readjustment or
other relief in respect of such party or its respective debts, or of a
substantial part of their respective Property, under any federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any Obligor,
PG&E, any Alternative Power Party or, prior to the Conversion Date, Duke
Capital Corporation or Fluor Corporation or an Equity Guarantor or for a
substantial part of their respective Property, and, in any such case, such
proceeding or petition shall continue undismissed for a period of ninety
(90) or more days or an order or decree approving or ordering any of the
foregoing shall be entered, and other than with respect to an Obligor (y)
such event, taking into account actions undertaken by the Obligor, could
reasonably be expected to result in a Material Adverse Effect or (z) such
party has not been replaced with another party whose Index Debt has an
Investment Grade Rating (not on ratings watch for downgrade below
Investment Grade Rating) and on terms acceptable to the Administrative
Agent (acting on the instructions of the Majority Lenders) within ninety
(90) days of the occurrence of such event; or
(i) an Obligor, PG&E, any Alternative Power Party or, prior to the Conversion
Date, Duke Capital Corporation, Fluor Corporation or an Equity Guarantor
shall (i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization, dissolution, winding up, or composition or
readjustment or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or petition described in clause (h)
of this Section 9.1, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official
for such party or for a substantial part of their respective Property, (iv)
file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the
benefit of creditors, or (vi) take any action for the purpose of effecting
any of the foregoing, and other than with respect to an Obligor (y) such
event, taking into account actions undertaken by the Obligors, could
reasonably be expected to result in a Material Adverse Effect or (z) such
party has not been replaced with another party whose Index Debt has an
Investment Grade Rating (not on ratings watch for downgrade below
Investment Grade Rating) and on terms acceptable to the Administrative
Agent (acting on the instructions of the Majority Lenders) within ninety
(90) days; or
(j) an Obligor, PG&E, any Alternative Power Party or, prior to the Conversion
Date, Duke Capital Corporation, Fluor Corporation or an Equity Guarantor
shall become unable and admit in writing their inability or fail generally
to pay their respective debts as they become due, and other than with
respect to an Obligor (y) such event, taking into account actions
undertaken by the Obligors, could reasonably be expected to result in a
Material Adverse Effect or (z) such party has not been replaced with
another party whose Index Debt has an Investment Grade Rating (not on
ratings watch for downgrade below Investment Grade Rating) and on terms
acceptable to the Administrative Agent (acting on the instructions of the
Majority Lenders) within ninety (90) days; or
(k) one or more final judgments for the payment of money in an aggregate amount
in excess of $5,000,000 (or the equivalent thereof, as of any date of
determination, in any other currency) shall be rendered against an Obligor
by one or more Governmental Authority, arbitral tribunals or other bodies
having jurisdiction against and the same shall remain undischarged for a
period of sixty (60) consecutive days during which execution shall not be
effectively vacated, discharged, stayed or bonded; or
(l) any Major Project Party shall fail to perform any obligation or shall
assign any of its rights and obligations, or its obligations shall
otherwise become unenforceable under a Major Project Document other than in
accordance with the Transaction Documents, and such failure, assignment or
unenforceability could reasonably be expected to result in a Material
Adverse Effect and, in the case of a failure to perform by a Major Project
Party other than an Obligor, the resumption of performance by such Major
Project Party or the replacement of such Major Project Party with another
party on terms acceptable to the Administrative Agent (acting on the
instruction of the Majority Lenders) has not occurred within 90 days; or
(m) any Governmental Approvals shall cease to be in full force and effect and
such failure to be in full force and effect shall be uncured for 30 days or
more and such failure could reasonably be expected to result in a Material
Adverse Effect PROVIDED such failure shall not constitute an Event of
Default if the Project Company can continue to build or operate the
Project, as applicable, without material penalty, and is diligently
pursuing a cure; or
(n) any material provision of the Tolling Agreement or any Alternative Power
Agreement shall at any time for any reason cease to be valid and binding or
in full force and effect except upon scheduled termination thereof and the
relevant Major Project Party shall not have been replaced with a party and
on terms acceptable to the Administrative Agent (acting on the instruction
of the Majority Lenders) within 120 days of such occurrence; or
(o) the Project Company and/or the Project cease to be in compliance with the
energy management procedures and general contract terms for Merchant Stage
Agreements previously agreed between the Administrative Agent and such non
compliance (unless previously waived (on a permanent basis) by the Required
Lenders) continues in effect for 120 days; or
(p) any Financing Document is declared unenforceable in whole or in part, or
the Liens created by the Security Documents shall at any time not
constitute valid and perfected Liens on the Collateral intended to be
covered thereby in favor of the Administrative Agent, free and clear of all
other Liens (other than Permitted Liens), or, except for expiration in
accordance with its terms, any of the Security Documents shall for whatever
reason be terminated or cease to be in full force and effect, or the
enforceability thereof shall be contested by any Obligor; or
(q) an Obligor shall incur liability under any Plan that could reasonably be
expected to result in a Material Adverse Effect; or
(r) (i) an Event of Abandonment shall have occurred or (ii) a Total Loss shall
have occurred, or a portion of the Project, necessary for the operation of
the Project, shall be condemned or seized or title thereto shall be
requisitioned or taken by any Governmental Authority under power of eminent
domain or otherwise and an agreed plan for the restoration or replacement
of such Affected Property shall not be agreed within 90 days of such event
occurring; or
(s) Prior to the Conversion Date, CEC shall cease to own and maintain either
directly, or through wholly owned Subsidiaries, at least 50% of the
Membership Interests in the Borrower or, on or after the Conversion Date,
CEC shall sell, assign or transfer a Membership Interest in the Borrower
such that it then owns and maintains less than 50% of the Membership
Interests in the Borrower; PROVIDED that an Event of Default shall not
occur, in relation to a transfer after the Conversion Date, if the Person
or Persons Controlling the Borrower after such transfer are experienced in
the ownership and management of power facilities in the United States and
the Project Company has obtained the prior written consent of the Majority
Lenders to such transfer (such consent not to be unreasonably withheld or
delayed); or
(t) an Obligor shall become subject to regulation as (i) an "investment
company" or a company "controlled by" an investment company under the
Investment Company Act or (ii) a "holding company" or a "public utility
company" under PUHCA; or
(u) at any time after Operational Acceptance, the Project Company loses its
status as an Exempt Wholesale Generator and the Project Company shall not
otherwise be exempt from regulation as an "electric utility company" or an
"electric utility holding company" under PUHCA or state law and such event
could reasonably be expected to have a Material Adverse Effect; or
(v) the Conversion Date shall not have occurred on or before the Date Certain;
then, and in every such event (other than an event with respect to an Obligor
described in clause (h) or (i) of this Section 9.1), and at any time thereafter
during the continuance of such event, (i) the Administrative Agent may, and (A)
at the request of the Required Lenders shall, by notice to the Borrower
terminate the Commitments, and thereupon such Commitments shall terminate
immediately and all fees and other obligations of the Obligors accrued hereunder
shall become due and payable immediately, together with, with respect to the
Tranche B Facility and to the extent permitted by law, an amount equal to the
Additional Amount (as hereinafter defined), in each case, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Obligors, and/or (at the same or different times); and (B) at the request of
the Required Lenders, shall, by notice to the Borrower declare the Loans then
outstanding to be due and payable in whole, and thereupon the principal of the
Loans so declared shall be due and payable immediately, together with accrued
interest thereon and all fees and other obligations of the Obligors accrued
hereunder and, with respect to the Tranche B Facility and to the extent
permitted by law, an amount equal to the Additional Amount (as hereinafter
defined), in each case, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Obligors and (ii) in case of any
event with respect to an Obligor described in clause (h) or (i) of this Section
9.1, the Commitments shall automatically terminate and the principal of the
Loans then outstanding shall automatically become due and payable, together with
accrued interest thereon and all fees and other obligations of the Obligors
accrued hereunder and, with respect to the Tranche B Facility and to the extent
permitted by law, an amount equal to the Additional Amount (as hereinafter
defined), in each case, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Obligors.
For purposes of this Section, the term ADDITIONAL AMOUNT means, with respect to
any Note or Commitment under the Tranche B Facility, an amount equal to the
Make-Whole Amount or Commitment Termination Fee that would have been payable
with respect to such Note or Commitment if the Borrower had elected to prepay
such Note and/or cancel such Commitment in full pursuant to Section 3.2 or
Section 4.3 hereof, as applicable, on the date of such acceleration or
termination. The Additional Amount shall not be payable under this Section to
the extent the Event of Default that resulted in such acceleration or
termination was not solely or in a material part attributable to the actions or
omissions of one of more of the Obligors, the Members, CEC, CEG or any Affiliate
thereof.
In addition, upon an Event of Default, and at any time thereafter during the
continuance of such Event of Default, the Secured Parties may exercise any and
all rights and remedies available to them under the Security Documents.
ARTICLE X. GUARANTEE
10.1 THE GUARANTEE
The Project Company hereby guarantees to each Lender and the Administrative
Agent and their respective successors and assigns the prompt payment in full
when due (whether at stated maturity, by acceleration or otherwise) of all
Secured Obligations under the Financing Documents strictly in accordance with
the terms hereof and thereof (such obligations being herein collectively called
the GUARANTEED OBLIGATIONS); PROVIDED that the obligations of the Project
Company under this Article X shall be reduced dollar for dollar, by any
repayment of principal of any Indebtedness referred to in clause (h) of the
definition of Permitted Indebtedness. The Project Company hereby further agrees
that if the Borrower shall fail to pay in full when due (whether at stated
maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the
Project Company will promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Guaranteed Obligations, the same will be promptly paid in full
when due (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.
10.2 OBLIGATIONS UNCONDITIONAL
The obligations of the Project Company under Section 10.1 are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of the Borrower under this Agreement or any
other agreement or instrument referred to herein, or any substitution, release
or exchange of any other guarantee of or security for any of the Guaranteed
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section that the obligations of the Project Company
hereunder shall be absolute and unconditional under any and all circumstances.
Without limiting the generality of the foregoing, it is agreed that the
occurrence of any one or more of the following shall not alter or impair the
liability of the Project Company hereunder, which shall remain absolute and
unconditional as described above:
(i) at any time or from time to time, without notice to the Project
Company, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of this Agreement
or any other agreement or instrument referred to herein shall be done
or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this
Agreement or any other agreement or instrument referred to herein
shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of, the
Administrative Agent or any Lender or Lenders as security for any of
the Guaranteed Obligations shall fail to be perfected or shall be
released.
The Project Company hereby expressly waives diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement that the
Administrative Agent or any Lender exhaust any right, power or remedy or proceed
against the Borrower under this Agreement or any other agreement or instrument
referred to herein, or against any other Person under any other guarantee of, or
security for, any of the Guaranteed Obligations.
10.3 REINSTATEMENT
The obligations of the Project Company under this Article shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of the Borrower in respect of the Guaranteed Obligations is rescinded or must be
otherwise restored by any holder of any of the Guaranteed Obligations, whether
as a result of any proceedings in bankruptcy or reorganization or otherwise, and
the Project Company agrees that it will indemnify the Administrative Agent and
each Lender on demand for all reasonable costs and expenses (including fees of
counsel) incurred by the Administrative Agent or such Lender in connection with
such rescission or restoration, including any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
10.4 SUBROGATION
The Project Company hereby waives all rights of subrogation or contribution,
whether arising by contract or operation of law (including any such right
arising under the Bankruptcy Code) or otherwise by reason of any payment by it
pursuant to the provisions of this Article until payment in full of all Secured
Obligations.
10.5 REMEDIES
The Project Company agrees that, as between the Project Company and the Lenders,
the obligations of the Borrower under this Agreement may be declared to be
forthwith due and payable as provided in Article IX (and shall be deemed to have
become automatically due and payable in the circumstances provided in Article
IX) for purposes of Section 10.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Borrower and that, in the event of
such declaration (or such obligations being deemed to have become automatically
due and payable), such obligations (whether or not due and payable by the
Borrower) shall forthwith become due and payable by the Project Company for
purposes of Section 10.1.
10.6 INSTRUMENT FOR THE PAYMENT OF MONEY
The Project Company hereby acknowledges that the guarantee in this Article
constitutes an instrument for the payment of money, and consents and agrees that
any Lender or the Administrative Agent, at its sole option, in the event of a
dispute by the Project Company in the payment of any moneys due hereunder, shall
have the right to bring motion-action under New York CPLR Section 3213.
10.7 CONTINUING GUARANTEE
The guarantee in this Article is a continuing guarantee, and shall apply to all
Guaranteed Obligations whenever arising.
ARTICLE XI. THE AGENT
(a) Each of the Lenders hereby irrevocably appoints the Administrative Agent as
its agent hereunder and under the other Financing Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise
such powers as are delegated to the Administrative Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto.
(b) Any Lender that is also acting in the capacity of the Administrative Agent
shall have the same rights and powers in its capacity as a Lender as any
other Lender and may exercise the same as though it were not the
Administrative Agent, and such Person and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business
with either Obligor or other Affiliate of such Obligor as if it were not
the Administrative Agent hereunder.
(c) The Administrative Agent shall have no duties or obligations except those
expressly set forth herein and in the other Financing Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent
shall not be subject to any fiduciary or other implied duties, regardless
of whether a Default has occurred and is continuing, (b) the Administrative
Agent shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Financing Documents that the
Administrative Agent is required to exercise in writing by the Required
Lenders, and (c) except as expressly set forth herein and in the other
Financing Documents, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower that is communicated to or obtained by
the bank serving as the Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall not be liable for any action
taken or not taken by it with the consent or at the request of the Required
Lenders or in the absence of its own gross negligence or willful
misconduct. The Administrative Agent shall not be deemed to have knowledge
of any Default unless and until written notice thereof is given to the
Administrative Agent by an Obligor or a Lender, and the Administrative
Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection
with this Agreement or any other Financing Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder
or in connection herewith or therewith, (iii) the performance or observance
of any of the covenants, agreements or other terms or conditions set forth
herein or therein, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Financing Document or any other
agreement, instrument or document, or (v) the satisfaction of any condition
set forth in Article V or elsewhere herein or therein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.
(d) The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to
be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or
by telephone and believed by it to be made by the proper Person, and shall
not incur any liability for relying thereon. The Administrative Agent may
consult with legal counsel (who may be counsel for the Obligors),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
(e) Subject to the appointment and acceptance of a successor Administrative
Agent, as provided in this paragraph, the Administrative Agent may resign
at any time by notifying the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation
with the Borrower, to appoint a successor which shall be a Lender. If no
successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within thirty (30) days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a bank with an office in New York City
or an Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of
the retiring Administrative Agent and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder. The fees
payable by the Obligors to a successor Administrative Agent shall be the
same as those payable to its predecessor unless otherwise agreed between
the Obligors and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 12.3
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Administrative Agent.
(f) Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to
make its own decisions in taking or not taking action under or based upon
this Agreement, any other Financing Document or any related agreement or
any document furnished hereunder or thereunder.
(g) Except as otherwise provided in Section 12.2(b) with respect to this
Agreement, the Administrative Agent may, with the prior consent of the
Required Lenders (but not otherwise), consent to any modification,
supplement or waiver under any of the Financing Documents.
ARTICLE XII. MISCELLANEOUS
12.1 NOTICES
Except in the case of notices and other communications expressly permitted to be
given by telephone, all notices and other communications provided for herein
shall be in writing and shall be delivered (a) by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy (if, in the
case of notice by telecopier, the sender on the same day sends a confirming copy
of such notice by a recognized overnight delivery service) as follows:
(i) if to an Obligor, to:
Liberty Electric Power, LLC
and/or Liberty Electric PA, LLC, as applicable
222 Delaware Avenue
Suite 1452
Wilmington, DE 19801
Attention: Member Manager;
with a copy to:
Columbia Electric Corporation
13880 Dulles Corner Lane
Herndon, VA 20171-4600
Attention: General Counsel
(ii) if to the Administrative Agent, to:
Chase Manhattan Bank
Loan and Agency Services
One Chase Plaza
8th Floor
New York, N.Y
Attention: Liberty Project Account Manager;
(iii) if to a Lender, to it at its address (or telecopy number) set forth in
its Administrative Questionnaire or otherwise, in the case of an
Institutional Lender, to it at its address as set forth in Schedule I
to the Note Purchase Agreement, or
(b) by electronic means to the addresses set forth in any written notice
delivered in accordance with this Section 12.1.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto (or, in the case
of any such change by a Lender, by notice to an Obligor and the Administrative
Agent). Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when transmitted by confirmed telex or
telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
12.2 WAIVERS; AMENDMENTS; CONSENTS
(a) NO DEEMED WAIVERS; REMEDIES CUMULATIVE. Except as otherwise specifically
set forth in this Section 12.2, no failure or delay by the Administrative
Agent or any Lender in exercising any right or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and
remedies of the Administrative Agent and the Lenders hereunder are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to
any departure by an Obligor therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section, and
then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or the issuance of a
Letter of Credit under a Loan Agreement shall not be construed as a waiver
of any Default, regardless of whether the Administrative Agent or any
Lender may have had notice or knowledge of such Default at the time.
(b) AMENDMENTS. (i) Subject to clause (ii) below, neither this Agreement or any
other Financing Document to which an Obligor is a party or any provision
hereof or thereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by such Obligor(s) and the
Required Lenders or by such Obligor(s) and the Administrative Agent (or in
the case of the Security Documents, the Collateral Agent) with the consent
of the Required Lenders; and (ii) neither of the Loan Agreements, the Notes
or any provision thereof may be waived, amended or modified except pursuant
to an agreement or agreements in writing entered into by the Borrower and
the Required Lenders under the relevant Loan Agreement or by the Borrower
and the Administrative Agent with the consent of the Required Lenders under
such Loan Agreement; PROVIDED that in either case no such agreement shall
(i) increase or reduce the Commitment of any Lender without the written
consent of such Lender, (ii) reduce the principal amount of any Loan or
change the rate of interest thereon, or change any fees, Make Whole
Amounts, breakage costs or indemnification amounts payable hereunder or
thereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any
Loan, or any interest thereon, or any fees payable hereunder or thereunder,
or reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent
of each Lender affected thereby, (iv) alter the manner in which payments or
prepayments of principal, interest or other amounts hereunder or thereunder
shall be applied as among the Lenders or the Facilities, without the
written consent of each Lender so affected, (v) release any of the
Collateral or modify any provision of this Agreement with respect to
Section 12.9 without the written consent of each Lender or (vi) change any
of the provisions of this Section or the definition of the term "REQUIRED
LENDERS" of "MAJORITY LENDERS", or any other provision hereof or thereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or thereunder or make any determination or
grant any consent hereunder or thereunder, without the written consent of
each Lender or, in the case of a Loan Agreement, each Lender thereunder;
and PROVIDED further that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent hereunder
or thereunder without the prior written consent of the Administrative
Agent.
(c) CLASS VOTING. Notwithstanding, Section 12.2(b) above, or any other
provision of any Financing Document:
(i) no waiver, amendment or modification of the Equity Contribution
Agreement, the Equity Guarantee or any consent, approval, discretion,
determination or other decision made with respect thereto shall be
effective without the prior written consent of the Required Lenders
under each Loan Agreement;
(ii) no consent or approval under Section 8.11 hereof with respect to the
Tolling Agreement or any Alternative Power Agreement shall be
effective without the prior written consent and approval of the
Majority Lenders under each Loan Agreement; and
(iii) for so long as the aggregate amount of Loans and Commitments
outstanding under the Credit Agreement constitutes at least 10% of the
aggregate amount of all outstanding Loans and Commitments, no waiver
of any Default, Event of Default or (for the avoidance of doubt) any
condition precedent set forth in Article V hereto, shall be effective
without the prior written consent and approval of the Required Lenders
under each Loan Agreement.
(d) CONSENTS. (i) If at any time, any consent, approval, discretion,
determination or other decision (each a "DECISION") is permitted or
expressly required to be made under or in connection with a provision of
any Financing Agreement by the Lenders, or, in the case of a Loan
Agreement, by the Lenders thereunder, then the Administrative Agent shall,
promptly upon becoming aware of the same notify each applicable Lender of
the matter in question specifying:
(A) whether the Decision is a decision which is required to be made
by all Lenders, by all Lenders so affected, by the Required
Lenders or by the Majority Lenders;
(B) the date (the "DECISION DATE") (being (x) in the case of a
decision that may be reasonably likely to require consultation
with counsel or any independent advisor to the Secured Parties or
which may be reasonably likely to require credit committee
approval, not less than 10 Business Days after the date upon
which the Administrative Agent has received such notice or (y) in
the case of any other decision, a date not less than 5 Business
Days after the date upon which the Administrative Agent has
received such notice), by which the Lenders must provide it with
instructions in relation to such Decision; and
(C) the provisions of subclauses (ii) and (iii) below.
(ii) Each Lender shall, within the time period specified by the
Administrative Agent pursuant to paragraph (i) above, provide notice
setting out directions to the Administrative Agent as to the Decision
on which its instructions were sought by the Administrative Agent
under paragraph (i) above and on or prior to such Decision Date, such
Lender shall provide a certificate setting out directions to the
Administrative Agent as to the Decision on which its instructions were
sought under paragraph (i) above.
(iii) If a Lender does not give the notice required pursuant to paragraph
(ii) above by the Decision Date, such Lender and its share of the
Commitments and/or Loans, as applicable, shall be excluded for the
purpose of calculating whether the requisite instructing parties have
made a Decision and except for such exclusion, any Lender's failure to
give notice shall have no other consequence.
(e) OBLIGOR ACTIONS. The Obligors shall not, and shall not permit any of their
Affiliates to, disclose any information concerning matters described in
Sections 7.4 or 7.5 hereof unless it shall also disclose such information
at such time to the Administrative Agent for dissemination to all Lenders.
The Obligors shall not, and shall not permit any of their Affiliates to,
directly or indirectly, pay or cause to be paid any remuneration, whether
by way of supplemental or additional interest, fee or otherwise, to any
Lender as consideration for or as an inducement to the entering into by
such Lender of any such amendment or waiver, unless such remuneration is
concurrently paid, on the same terms, rateably to all Lenders, whether or
not such Lender shall have consented to such waiver or amendment.
12.3 EXPENSES; INDEMNITY; DAMAGE WAIVER
(a) COSTS AND EXPENSES. The Obligors shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent, including the reasonable
fees, charges and disbursements of counsel and the independent advisors
retained by the Administrative Agent with the written consent of the
Borrower (such consent not to be unreasonably withheld or delayed), in
connection with the syndication of the credit facilities provided for
herein and the preparation and administration of this Agreement and the
other Financing Documents or any amendments, modifications or waivers of
the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the Administrative Agent (or, where
there is a conflict between Secured Parties, incurred by any Secured
Party), including the fees, charges and disbursements of any counsel or
independent advisor for such Secured Party, in connection with the
enforcement or protection of its rights in connection with this Agreement
and the other Financing Documents, including its rights under this Section,
or in connection with the Loans made or Letters of Credit issued hereunder
or thereunder, including in connection with any workout, restructuring or
negotiations in respect thereof and (iii) all reasonable costs, expenses,
taxes, assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated by any Security Document or any other document referred to
therein.
(b) INDEMNIFICATION BY THE BORROWER. The Obligors shall jointly and severally
indemnify and hold the Administrative Agent and each Lender, and each of
their directors, officers, employees, advisors and agents and any Affiliate
of any of the foregoing Persons (each such Person being called an
INDEMNITEE) against, and to hold each Indemnitee harmless from, any and all
third party claims, damages and liabilities, including the reasonable fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement or any agreement
or instrument contemplated hereby, the performance by the parties hereto of
their respective obligations under the Financing Documents or the
consummation of the transactions contemplated thereby, (ii) any Loan or
issuance of a Letter of Credit or the use of the proceeds therefrom, (iii)
the presence, threatened Release or Release of Hazardous Materials relating
to any property owned or operated by either Obligor, or any Environmental
Liability related in any way to the either Obligor, or (iv) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory; PROVIDED that such
indemnity shall not, as to any Indemnitee, be available to the extent that
such claims, damages or liabilities are determined by a court of competent
jurisdiction by final and non-appealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee PROVIDED that
neither Obligor shall be liable for any special, indirect, consequential or
punitive damages in connection herewith.
(c) REIMBURSEMENT BY LENDERS. To the extent that an Obligor fails to pay any
amount required to be paid by it to the Administrative Agent under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay
to the Administrative Agent such Lender's Pro Rata Share (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; PROVIDED that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Agent in its capacity as
such.
(d) WAIVER OF CONSEQUENTIAL DAMAGES, ETC. (i) To the extent permitted by
applicable law, neither Obligor shall assert, and each hereby waives, any
claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this
Agreement or any of the Financing Documents and any agreement or instrument
contemplated thereby, and (ii) to the extent permitted by Applicable Law,
no Lender shall assert, and each Lender hereby waives, any claim against
either Obligor, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or
any of the Financing Documents and any agreement or instrument contemplated
thereby.
(e) PAYMENTS. All amounts due under this Section shall be payable promptly
after written demand therefor.
12.4 SUCCESSORS AND ASSIGNS
(a) ASSIGNMENTS GENERALLY. The provisions of this Agreement and each other
Financing Document shall be binding upon and inure to the benefit of the
parties hereto or thereto, as applicable, and their respective successors
and assigns permitted hereby or thereby, except that neither Obligor may
assign or otherwise transfer any of its rights or obligations hereunder or
thereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by an Obligor without such consent shall
be null and void). Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby and, to the extent
expressly contemplated hereby, the directors, officers, employees and
Affiliates of each of the Administrative Agent and the Lenders) any legal
or equitable right, remedy or claim under or by reason of this Agreement.
(b) ASSIGNMENTS BY LENDERS. Any Lender may assign to one or more assignees all
or a portion of its rights and obligations under any Loan under the
Financing Documents in minimum amounts of $5,000,000 (or to the extent the
amount remaining outstanding under any such Loan is less than $5,000,000,
such lesser amount, or to the extent a lesser amount is permitted under the
relevant Loan Agreement, such lesser amount) in connection with a permitted
assignment under the Credit Agreement or the Note Purchase Agreement, as
applicable, and upon execution and delivery by the assignee and assignor of
an Assignment and Acceptance certificate.
(c) SURVIVAL. All covenants, agreements, representations and warranties made by
either Obligor herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement or any Financing
Document shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and
the making of any Loans, regardless of any investigation made by any such
other party or on its behalf and notwithstanding that the Administrative
Agent or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time made, and shall continue
in full force and effect as long as the principal of or any accrued
interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.12, 2.13, 2.14 of the Credit
Agreement and Sections 10.3 and 12.3 hereof shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans and any LC Disbursements,
the cancellation of the Commitments or the termination of this Agreement or
any provision hereof.
(d) COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement may be executed in
two or more counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract. The Financing
Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract between and
among the parties relating to the subject matter hereof and supersede any
and all previous agreements and understandings, oral or written, relating
to the subject matter hereof. This Agreement shall become effective when it
shall have been executed by the Administrative Agent and the Lenders and
when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other
parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page to this Agreement
by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
(e) SEVERABILITY. Any provision of the Financing Documents held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.
(f) MAINTENANCE OF REGISTER BY THE ADMINISTRATIVE AGENT The Administrative
Agent, acting for this purpose as an agent of the Borrower, shall maintain
at one of its offices in New York City a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitments of, and principal amount
of the Loans and LC Disbursements owing to, each Lender pursuant to the
terms hereof from time to time (the REGISTER). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent, the
Issuing Banks and the Lenders may treat each Person whose name is recorded
in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower, either Issuing
Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
12.5 GOVERNING LAW; JURISDICTION; ETC.
(a) GOVERNING LAW. This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) SUBMISSION TO JURISDICTION. Each party hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New
York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or the
other Financing Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State court (or, to
the extent permitted by law, in such Federal court). Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement
shall affect any right that the Administrative Agent or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement
or any other Financing Document against an Obligor or its properties in the
courts of any jurisdiction.
(c) WAIVER OF VENUE. Each Obligor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement or
any other Financing Document in any court referred to in paragraph (b) of
this Section. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(d) SERVICE OF PROCESS. Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 12.1.
Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
12.6 WAIVER OF JURY TRIAL
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
12.7 LIMITED RECOURSE
Neither the Administrative Agent nor any Lender shall have any claim, remedy or
right to proceed against any Member, or any of their Subsidiaries or Affiliates
(other than the Obligors) or against any past, present or future holder of a
membership interest, director or officer thereof for the payment of any
principal, premium or interest on the Loans or for any claim based thereon or
arising out of any agreement, certificate, representation, covenant or warranty
made by an Obligor herein or in any other Financing Document; PROVIDED that
nothing in this Section 12.7 shall limit in any way any rights of the
Administrative Agent, the Collateral Agent or any Lender relating directly to
(1) any representations made by such Member, in any certificate delivered by
such Member or given by such Member in any Financing Document to which such
Member is a party or (2) any undertaking agreed to by such Member which is set
forth in any Financing Document to which such Member is a party; and PROVIDED,
FURTHER, that the foregoing limitations shall not apply with respect to any
claim based on fraud or bad faith.
12.8 HEADINGS
Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting, this
Agreement.
12.9 TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY
(a) TREATMENT OF CERTAIN INFORMATION. Each Obligor acknowledges that from time
to time financial advisory, investment banking and other services may be
offered or provided to such Obligor (in connection with the Financing
Documents or otherwise) by any Lender or by one or more Subsidiaries or
Affiliates of such Lender and such Obligor hereby authorizes each Lender to
share any information delivered to such Lender by such Obligor pursuant to
this Agreement, or in connection with the decision of such Lender to enter
into this Agreement, to any such Subsidiary or Affiliate, it being
understood that any such Subsidiary or Affiliate receiving such information
shall be bound by the provisions of paragraph (b) of this Section as if it
were a Lender hereunder. Such authorization shall survive the repayment of
the Loans and the Commitments or the termination of this Agreement or any
provision hereof.
(b) CONFIDENTIALITY. Each of the Administrative Agent and the Lenders agrees to
maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (i) to its Affiliates', its beneficial
owners' or its own directors, officers, employees and agents, including
accountants or legal counsel (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential) or to any
other professional advisors (subject to an agreement containing provisions
substantially the same as those of this paragraph), (ii) to the extent
requested by any regulatory authority, (iii) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process,
(iv) to any other party to this Agreement, (v) in connection with the
exercise of any remedies hereunder or under any other Financing Document or
any suit, action or proceeding relating to this Agreement or any other
Financing Document or the enforcement of rights hereunder or thereunder or
in connection with any litigation to which such Lender is a party, (vi)
subject to an agreement containing provisions substantially the same as
those of this paragraph, (A) to any transferee, assignee of or Participant
in, or any prospective transferee, assignee of or Participant in, any of
its rights or obligations under this Agreement or any purchaser or any
prospective purchaser of a Note, (B) to any direct or indirect contractual
counterparty in swap agreements or such contractual counterparty's
professional advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty agrees to be bound by
the provisions of this Section 12.9), (C) to the National Association of
Insurance Commissioners or any similar organization or any nationally
recognized rating agency that requires access to information about a
Lender's investment portfolio in connection with ratings issued with
respect to such Lender, or (D) to any Person from which a Lender offers to
purchase any security of an Obligor, or, (vii) with the consent of the
Borrower or (viii) to the extent such Information (A) becomes publicly
available other than as a result of a breach of this paragraph or (B)
becomes available to the Administrative Agent or any Lender on a
nonconfidential basis from a source other than an Obligor. For the purposes
of this paragraph, INFORMATION means all information received from an
Obligor relating to the Obligors or their business, other than any such
information that is available to the Administrative Agent or any Lender on
a nonconfidential basis prior to disclosure by such Obligor; PROVIDED that,
in the case of information received from such Obligor after the date
hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
12.10 SERVICE OF PROCESS
EACH PARTY HERETO IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE COURTS REFERENCE TO IN SECTION 12.5 IN ANY ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID TO
THE ADMINISTRATIVE AGENT AND SUCH OBLIGOR AT ITS ADDRESS REFERRED TO IN SECTION
12.1.
12.11 PRODUCER BUILT FACILITIES
The Project Company shall be entitled to transfer to PECO the Producer-Built
Facilities and such other real estate rights and interests as Project Company is
required to transfer to PECO pursuant to the PECO Interconnection Construction
Agreement. The provisions of Section 5.12 of the Mortgage shall be applicable to
such transfers, except that if the real estate rights or interests to be
transferred are easements or rights of way, Collateral Agent shall subordinate
the lien of the Mortgage to such easements or rights of way.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
LIBERTY ELECTRIC PA, LLC
By Columbia Electric Liberty Corporation, a Member Manager
By:
--------------------------------------------------
Name:
LIBERTY ELECTRIC POWER, LLC
By Liberty Electric PA, LLC, its sole member
By Columbia Electric Liberty Corporation, a Member Manager
By:_________________________
Name:
Title:
THE CHASE MANHATTAN BANK
(As Administrative Agent)
By:_________________________
Name:
Title:
BANK LENDERS
THE CHASE MANHATTAN BANK
By:_________________________
Name:
Title:
LANDESBANK HESSEN-THURINGEN GIROZENTRALE
By:_________________________
Name:
Title:
BAYERISCHE HYPO-UND VEREINSBANK AG
- NEW YORK BRANCH
By:_________________________
Name:
Title:
BAYERISCHE HYPO-UND VEREINSBANK AG
- NEW YORK BRANCH
By:_________________________
Name:
Title:
THE BANK OF TOKYO-MITSUBISHI, LTD.
NEW YORK BRANCH
By:_________________________
Name:
Title:
CREDIT AGRICOLE INDOSUEZ
By:_________________________
Name:
Title:
CREDIT AGRICOLE INDOSUEZ
By:_________________________
Name:
Title:
THE DAI-ICHI KANGYO BANK, LTD.
By:_________________________
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:_________________________
Name:
Title:
NORDDEUTSCHE LANDESBANK GIROZENTRALE
NEW YORK/CAYMAN ISLAND BRANCH
By:_________________________
Name:
Title:
KBC BANK N.V. (NEW YORK BRANCH)
By:_________________________
Name:
Title:
KBC BANK N.V. (NEW YORK BRANCH)
By:_________________________
Name:
Title:
GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
By:_________________________
Name:
Title:
INSTITUTIONAL LENDERS
NEW YORK LIFE INSURANCE COMPANY
By:_________________________
Name:
Title:
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
By:_________________________
Name:
Title:
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY (BPF)
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY (RDI)
By: Lincoln Investment Management Inc.
Its Attorney-in-Fact
By:_________________________
Name:
Title:
AMERICAN GENERAL ANNUITY INSURANCE COMPANY
AMERICAN GENERAL LIFE AND ACCIDENT INSURANCE COMPANY
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By:_________________________
Name:
Title:
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
By:_________________________
Name:
Title:
MONUMENTAL LIFE INSURANCE COMPANY
By:_________________________
Name:
Title:
APPENDIX A
DEFINITIONS
TERMS GENERALLY; INTERPRETATION
1.1 The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation." The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires otherwise,
(a) any definition of or reference to any agreement, instrument or other
document herein, including the Master Agreement, shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein," "hereof" and "hereunder," and words of similar
import, shall be construed to refer to the Master Agreement in its entirety and
not to any particular provision of the Master Agreement, (d) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Exhibits and Schedules to, the Master Agreement
and (e) the word "asset" and "property" shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.
ACCOUNTING TERMS; GAAP
1.2 Except as otherwise expressly provided herein, all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; PROVIDED that, if the Borrower notifies the Administrative Agent
that the Borrower requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.
DEFINITIONS
1.3 The following terms have the meanings specified below:
ACCOUNTS has the meaning assigned to such term in the Disbursement Agreement.
ACTUAL PLANT ACCEPTANCE has the meaning assigned to such term in the EPC
Contract.
ADDITIONAL AMOUNT has the meaning assigned to such term in Article IX of the
Master Agreement.
ADDITIONAL MAJOR PROJECT DOCUMENT means any contract or agreement (other than a
Merchant Stage Agreement) relating to the Development of the Project or the
construction of the Interconnection Upgrades or the Gas Interconnection
Facilities entered into by an Obligor subsequent to the date hereof under which
such Obligor shall have obligations (or a right to receive revenues) in any
fiscal year in excess of $2,000,000.
ADMINISTRATIVE AGENT has the meaning assigned to such term in the preamble to
the Master Agreement.
ADMINISTRATIVE QUESTIONNAIRE means an administrative questionnaire in a form
supplied by the Administrative Agent to each Lender.
AFFECTED PROPERTY means, with respect to any Event of Loss, the Property that is
lost, destroyed, damaged, condemned, expropriated, or otherwise taken as a
result of such Event of Loss.
AFFILIATE means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
ALTERNATIVE POWER AGREEMENTS means (i) a tolling agreement on terms
substantially similar (when taken as a whole) to the Tolling Agreement or (ii)
an offtake agreement for the sale of electrical power and a supply agreement for
the supply of natural gas entered into by the Project Company on substantially
equivalent terms (when taken as a whole) to the Tolling Agreement; in each case
(A) having a term of at least two years (which term must, in addition, extend to
or beyond the Tolling Agreement Expiration Date), and (B) with a Person whose
Index Debt has an Investment Grade Rating (not on ratings watch for downgrade
below Investment Grade Rating) or whose obligations are otherwise guaranteed to
the same or greater extent as the obligations initially guaranteed under the
Tolling Agreement by a party whose Index Debt has an Investment Grade Rating
(not on ratings watch for downgrade below Investment Grade Rating), PROVIDED in
each case that the Project Company has elected in its sole discretion (by
providing written notice to the Administrative Agent prior to the commencement
of such agreement(s)) for such agreement(s) to be "Alternative Power Agreements"
for the purposes of the Master Agreement.
ALTERNATIVE POWER PARTIES means the parties to any Alternative Power
Agreement(s) or the party providing the guarantee in connection therewith, as
the case may be, whose Index Debt has an Investment Grade Rating (not on ratings
watch for downgrade below Investment Grade Rating).
APPLICABLE LAW means any constitution, statute, law, rule, regulation,
ordinance, judgment, order, decree, permit, or any published directive,
guideline, Governmental Approval, requirement or other governmental restriction
which has the force of law, or any published determination by, or interpretation
of any of the foregoing by, any judicial authority or Governmental Authority
binding on a given Person whether in effect as of the date of the Master
Agreement or thereafter and in each case as amended (including, without
limitation, all Environmental Laws and any of the foregoing pertaining to land
use or zoning restrictions).
ASSIGNMENT AND ACCEPTANCE means the assignment by a Lender of its rights and
obligations under the Master Agreement substantially in the form of Exhibit A to
the Master Agreement.
AUDITOR means such firm or firms of independent public accountants of recognized
international standing as the Borrower, may, from time to time appoint as
auditors of the Borrower.
AVAILABILITY PERIOD means (i) with respect to the Tranche A Facility, the
Tranche B Facility and the Equity Bridge Loan Facility, the Construction Stage
Availability Period, (ii) with respect to the Working Capital Facility, the
Working Capital Availability Period, and (iii) with respect to the Debt Service
Reserve Facility, the Debt Service Reserve Availability Period.
BANK FACILITIES mean collectively the Tranche A Facility, the Equity Bridge Loan
Facility, the Debt Service Reserve Facility and the Working Capital Facility.
BANK LENDERS has the meaning assigned to such term in the preamble to the Master
Agreement.
BASE CASE PROJECTIONS means the base case forecast dated as of July 25, 2000
prepared and certified by the Borrower and previously delivered to the
Administrative Agent, relating to the Development of the Project.
BORROWER has the meaning assigned to such term in the preamble to the Master
Agreement.
BORROWER SECURITY AND PLEDGE AGREEMENT means the Security and Pledge Agreement
dated as of July 31, 2000, between the Borrower and the Collateral Agent.
BUSINESS DAY means (i) any day that is not a Saturday or a Sunday in the United
States or a day on which banking institutions chartered by the State of New York
or the United States are required or authorized to be closed and (ii) when used
in any respect relating to LIBOR, any day described in clause (i) of this
definition that is also a day on which dealings may be carried out in the London
interbank market.
BUY-DOWN AMOUNTS has the meaning assigned to such term in the EPC Contract.
CAPITAL EXPENDITURES means, for any period, expenditures (including the
aggregate amount of Capital Lease Obligations incurred during such period) made
by the Project Company to acquire or construct fixed assets, plant and equipment
(including renewals, improvements and replacements, but excluding repairs)
during such period accounted for and computed in accordance with GAAP.
CAPITAL LEASE OBLIGATIONS of any Person means the obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
CEC means Columbia Electric Corporation a corporation incorporated under the
laws of Delaware.
CEG means Columbia Energy Group a corporation incorporated under the laws of
Delaware.
CHANGE IN LAW means (a) the adoption of any law, rule or regulation after the
date of the Master Agreement, or (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of the Master Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.12(b) of the Credit Agreement by any lending office of
such Lender or by such Lender's holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of the Master Agreement
(the non-compliance with which could be reasonably likely to have an adverse
effect on the business or operations of such Lender) and applying to a class of
banks or financial institutions including such Lender.
CHANGE ORDER has the meaning assigned to such term in the EPC Contract.
CHARTER DOCUMENTS means, with respect to any Person, the articles of
incorporation or association and by-laws or such other document or instruments
which are required to be registered or lodged in the place of incorporation,
organization or formation of such Person and which establish the legal
personality of such Person, as the same may be amended from time to time.
CLOSING DATE means the date on which the conditions specified in Section 5.1 of
the Master Agreement are satisfied (or waived in accordance with the Master
Agreement).
CODE means the Internal Revenue Code of 1986, as amended from time to time.
COLLATERAL means (a) the "Collateral" as defined in any Security Document, (b)
the "Mortgaged Property" as defined in the Mortgage, and (c) all other
collateral of whatsoever nature purported to be subject to the lien of any
Security Document.
COLLATERAL AGENT means The Chase Manhattan Bank, acting in its capacity as
Collateral Agent.
COMMENCEMENT DATE has the meaning assigned to such term in the Tolling
Agreement.
COMMITMENT TERMINATION FEE has the meaning assigned to such term in the Note
Purchase Agreement.
COMMITMENTS means the Tranche A Loan Commitments, the Tranche B Loan
Commitments, the Equity Bridge Loan Commitments, the Working Capital Commitments
and the Debt Service Reserve Commitments.
CONECTIV has the meaning assigned to such term in Section 2.6 of the Master
Agreement.
CONECTIV INTERCONNECTION CONSTRUCTION AGREEMENT has the meaning assigned to such
term in Section 2.6 of the Master Agreement.
CONSENT AND AGREEMENT means each Consent and Agreement, substantially in the
form of Exhibit B to the Master Agreement and containing such other terms as the
Administrative Agent shall reasonably request, among the Borrower, the
Administrative Agent and the applicable Major Project Party or Merchant Stage
Project Party.
CONSTRUCTION ACCOUNT has the meaning assigned to such term in the Disbursement
Agreement.
CONSTRUCTION BUDGET means the budget prepared by the Project Company and
delivered to the Lenders under Section 5.1(a)(v) of this Master Agreement, of
work and expenditure required to achieve Actual Plant Acceptance (together with
completion of all other construction works (including the Interconnection
Upgrades and the Gas Interconnection Facilities) as required pursuant to the
Major Project Documents) as such budget may be amended pursuant to Section
8.10(c) of the Master Agreement.
CONSTRUCTION CONTINGENCY AMOUNT means as of the Closing Date, $11,280,000 and
thereafter, the amount remaining in the Construction Budget as unallocated
construction contingency in the Construction Budget.
CONSTRUCTION PROGRESS REPORT means the monthly report delivered by the Project
Company to the Administrative Agent under Section 7.2 (a) of the Master
Agreement outlining the progress of all construction works (including the
Interconnection Upgrades and the Gas Interconnection Facilities) required to be
undertaken pursuant to the Major Project Document.
CONSTRUCTION SCHEDULE means the construction schedule for the Project, the
Interconnection Upgrades and the Gas Interconnection Facilities as specified,
respectively, in Section IV of the EPC Contract, Schedule D of the PECO
Interconnection Construction Agreement and the conditions precedent in the
Precedent Agreement with respect to commencement of service under the Gas
Transportation Agreements.
CONSTRUCTION STAGE AVAILABILITY PERIOD means the period from and including the
date hereof to but excluding the Construction Stage Commitment Termination Date.
CONSTRUCTION STAGE COMMITMENTS means the Tranche A Commitments, the Tranche B
Commitments and the Equity Bridge Loan Commitments.
CONSTRUCTION STAGE COMMITMENT TERMINATION DATE means the earlier to occur of the
Conversion Date and the Date Certain.
CONTRACTOR has the meaning assigned to such term in Section 2.4 of the Master
Agreement.
CONTRACTOR GUARANTORS means collectively Duke Capital Corporation, a Delaware
corporation, and Fluor Corporation, a Delaware corporation, each a Contractor
Guarantor.
CONTROL means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ability to exercise voting power, by contract or otherwise. CONTROLLING and
CONTROLLED have the meanings correlative thereto.
CONVERSION DATE means the first date on which the conditions specified in
Section 5.3 of the Master Agreement are satisfied or waived in accordance with
the Master Agreement.
CONVERSION DATE CERTIFICATE means a certificate and related attachments and
certifications, substantially in the form of Exhibit E to the Master Agreement,
executed by a Financial Officer of each of the Project Company, the Contractor
and the Independent Engineer, as applicable, and otherwise duly completed.
CREDIT AGREEMENT means the Credit Agreement dated as of July 31, 2000 among the
Borrower, the Project Company, the Bank Lenders, and the Administrative Agent.
DATE CERTAIN means October 1, 2002.
DEBT SERVICE means, for any period, the sum, computed without duplication, of
the following: (a) all amounts payable by the Borrower to the Secured Parties or
any party ranking pari passu to a Secured Party (whether secured or unsecured)
in respect of principal of Indebtedness during such period PLUS (b) all amounts
payable by the Borrower to the Secured Parties or any party ranking pari passu
to a Secured Party (whether secured or unsecured) in respect of Interest Expense
for such period PLUS (c) all fees payable pursuant to the Financing Documents
during such period PLUS (d) all other amounts payable by the Borrower during
such period to the Secured Parties or any party ranking pari passu to a Secured
Party (whether secured or unsecured) (in each case, upon the payment date
thereof, by acceleration or otherwise).
DEBT SERVICE COVERAGE RATIO or DSCR means, for any period of four consecutive
quarters, the ratio of (i) all Project Revenues received or projected to be
received, as applicable, by the Project Company during such period less all
Operating Expenses paid or payable or projected to be payable, as applicable,
during such period to (ii) Debt Service paid or payable or projected to be
payable, as applicable, during such period. Any forward looking Debt Service
Coverage Ratio tests shall be based on Borrower's good faith estimates of
forecasted incremental Project Revenues, Operating Expenses and Debt Service or,
in the event the Administrative Agent disagrees with such estimates, such tests
shall be based on forecasted amounts as agreed by the Administrative Agent and
the Project Company.
DEBT SERVICE RESERVE ACCOUNT BALANCE has the meaning assigned to such term in
the Disbursement Agreement.
DEBT SERVICE RESERVE AVAILABILITY PERIOD has the meaning assigned to such term
in the Credit Agreement.
DEBT SERVICE RESERVE COMMITMENT has the meaning assigned to such term in the
Credit Agreement.
DEBT SERVICE RESERVE EXPOSURE has the meaning assigned to such term in the
Credit Agreement.
DEBT SERVICE RESERVE FACILITY means the $17,500,000 debt service reserve
facility provided by the Bank Lenders under the Master Agreement and the Credit
Agreement.
DEBT SERVICE RESERVE LETTER OF CREDIT has the meaning assigned to such term in
Section 3.1(d) of the Master Agreement.
DEBT SERVICE RESERVE LOANS has the meaning assigned to such term in Section
3.1(d) of the Master Agreement.
DEFAULT means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.
DEFAULT RATE has the meaning assigned to such term in the Loan Agreements.
DELAY LIQUIDATED DAMAGES means liquidated damages payable under Article 27 of
the EPC Contract.
DEPOSITARY BANK means The Chase Manhattan Bank in its capacity as Depositary
Bank for the Secured Parties, or any replacement bank acting in such capacity.
DEVELOPMENT means, with respect to the Project, the ownership, occupation,
construction, testing, starting, repair, operation, maintenance and use of the
Project by the Project Company and the financing of the Project by the Obligors.
DISBURSEMENT AGREEMENT has the meaning assigned to such term in Section 2.14 of
the Master Agreement.
DISTRIBUTION ACCOUNT has the meaning assigned to such term in the Disbursement
Agreement.
DOLLARS or $ refers to lawful money of the United States of America.
DP&L has the meaning assigned to such term in Section 2.9 of the Master
Agreement.
DUKE GUARANTEE means the guarantee provided by the Duke Capital Corporation in
favor of the Project Company guaranteeing the obligations of the Contractor
under the EPC Contract.
EARLY COMMENCEMENT DATE has the meaning assigned to such term in the Tolling
Agreement.
ENVIRONMENTAL CLAIM means, with respect to any Person, any written notice,
claim, administrative, regulatory or judicial action, suit, judgment or demand
by any other Person alleging or asserting such first Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property of such first Person, personal injuries,
fines or penalties arising out of, based on or resulting from (a) the presence,
Use, threatened Release or Release into the environment of any Hazardous
Material at any location, whether or not owned by such first Person or (b) any
fact, circumstance, condition or occurrence forming the basis of any violation,
or alleged violation, of any Environmental Law. The term ENVIRONMENTAL CLAIM
shall include, without limitation, any claim by any Governmental Authority for
enforcement, delineation, investigation, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and any
claim by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from the presence of
Hazardous Materials or arising from alleged injury or threat of injury to the
environment.
ENVIRONMENTAL LAWS means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, (including its effect on human health and safety),
preservation or reclamation of natural resources, the management, Release or
threatened Release of any Hazardous Material or to health and safety matters.
ENVIRONMENTAL LIABILITY means any liability, contingent or otherwise (including
any liability for damages, costs of environmental remediation, fines, penalties
or indemnities, and including any Lien filed against any property covered by the
Mortgage or any part of the Mortgaged Property thereunder in favor of any
governmental entity), of the Borrower directly or indirectly resulting from or
based upon (a) violation of any Environmental Law, (b) exposure to any Hazardous
Materials, (c) the Release or threatened Release of any Hazardous Materials into
the environment or (d) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
EPC CONTRACT has the meaning assigned to such term in Section 2.4 of the Master
Agreement.
EQUITY BRIDGE LOAN COMMITMENT has the meaning assigned to such term in the
Credit Agreement.
EQUITY BRIDGE LOANS has the meaning assigned to such term in Section 3.1(c) of
the Master Agreement.
EQUITY BRIDGE LOAN FACILITY means the $41,000,000 equity bridge loan facility
provided by the Bank Lenders under the Master Agreement and the Credit
Agreement.
EQUITY CONTRIBUTION has the meaning assigned to such term in the Equity
Contribution Agreement.
EQUITY CONTRIBUTION AGREEMENT means the Equity Contribution Agreement dated as
of July 31, 2000 among the Members, the Borrower and the Administrative Agent.
EQUITY GUARANTOR means a Person who guarantees a Member's obligations under the
Equity Contribution Agreement and, as at the date hereof, shall mean CEG.
EQUITY GUARANTEE means a guarantee of a Member's obligations under the Equity
Contribution Agreement by an Equity Guarantor and shall include the guarantee by
CEG of such obligations dated as of the date hereof.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from
time to time.
ERISA AFFILIATE means any trade or business (whether or not incorporated) that,
together with the Borrower, is treated as a single employer under Section 414(b)
or (c) of the Code, or, solely for purposes of Section 302 of ERISA and Section
412 of the Code, is treated as a single employer under Section 414 of the Code.
ERISA EVENT means (a) any "reportable event", as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an ACCUMULATED FUNDING DEFICIENCY (as defined in Section
412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing
pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f ) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, in either case or
the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate
of any notice, concerning the imposition of Withdrawal Liability upon the
Borrower or an ERISA Affiliate or a determination that a Multiemployer Plan is,
or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.
EVENT OF ABANDONMENT means: (a) the announcement (or action evidencing such
intent) by the Project Company prior to the Conversion Date of a decision to
suspend for more than sixty (60) days (as extended by an additional 360 days as
a result of an event of force majeure under a Major Project Document so long as
the Project Company is diligently and continuously proceeding to mitigate the
consequences thereof), abandon or indefinitely defer the construction or
completion of the Project, or (b) the announcement by the Project Company after
the Conversion Date of a decision to abandon operation of the Project or the
actual abandonment thereof.
EVENT OF DEFAULT has the meaning assigned to such term in Article IX of the
Master Agreement.
EVENT OF LOSS means any loss of, or destruction, or damage to or condemnation
of, all or any portion of the Property of the Project Company constituting the
Project.
EXEMPT WHOLESALE GENERATOR means any Person determined by FERC to be an "Exempt
Wholesale Generator" under Section 32(a) of PUHCA.
FACILITIES means collectively the BANK FACILITIES and the TRANCHE B FACILITY.
FERC means the Federal Energy Regulatory Commission and any successor thereto.
FINANCIAL OFFICER means with respect to any Person, the president, general
counsel, principal accounting officer, treasurer or any vice president of such
Person, as the case may be.
FINANCING DOCUMENTS means, collectively, the Master Agreement, the Credit
Agreement, the Note Purchase Agreement, the Notes, the Disbursement Agreement,
the Intercreditor Agreement, the Equity Contribution Agreement, any Equity
Guarantee, the Security Documents, the Consents and Agreements and any
subordination agreement entered into pursuant to the terms of the Equity
Contribution Agreement.
FLUOR GUARANTEE means the guarantee provided by the Fluor Corporation in favor
of the Project Company guaranteeing the obligations of the Contractor under the
EPC Contract.
FUEL CONSULTANT means Navigant Consulting, Inc., or its successors.
FUEL CONSULTANT REPORT means a report from the Fuel Consultant in form and
substance reasonably satisfactory to the Administrative Agent.
FULL RELEASE has the meaning assigned to such term in the EPC Contract.
GAAP means generally accepted accounting principles in the United States of
America, consistently applied.
GAS INTERCONNECTION FACILITIES means the lateral to be constructed pursuant to
the terms of the Precedent Agreement from TETCO's existing Philadelphia lateral
at the Eagle Pennsylvania Compressor Station interconnecting with the Project at
the Project's gas delivery point.
GAS TRANSPORTATION AGREEMENTS has the meaning assigned to such term in Section
2.7 of the Master Agreement.
GOVERNMENTAL APPROVAL means (a) any authorization, consent, approval, license,
lease, ruling, permit, tariff, rate, certification, exemption, filing, variance,
claim, order, judgment, decree, by or with, (b) any declaration of or with or
(c) any registration by or with, any Governmental Authority, in each case
relating to (i) the due execution and delivery of, and the performance by each
intended party (other than the Administrative Agent and the Lenders) of, any
Transaction Document or any Non-Material Project Document of its obligations and
the exercise of its rights under, each Transaction Document or any Non-Material
Project Document to which it is (or is intended to be) a party, (ii) with
respect to the Borrower or any Affiliate of the Borrower (including the Members)
the grant by the Borrower or such Affiliate of the Liens created pursuant to the
Security Documents to which the Borrower or such Affiliate of the Borrower is a
party, the validity, enforceability and perfection of such Liens and the
exercise by the Collateral Agent of its rights and remedies under such Security
Documents or (iii) the Development of the Project as contemplated by the Major
Project Documents and the Non-Material Project Documents.
GOVERNMENTAL AUTHORITY means the government of any jurisdiction, or any
political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
GUARANTEE of or by any Person (the GUARANTOR) means any obligation, contingent
or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the
PRIMARY OBLIGOR) in any manner, whether directly or indirectly, and including
any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (c) to maintain working
capital, equity capital or any other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; PROVIDED that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
GUARANTEED OBLIGATION has the meaning assigned to such term in Section 10.1 of
the Master Agreement.
HAZARDOUS MATERIALS means all explosive or radioactive substances or wastes and
all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.
HEDGING AGREEMENT means any Interest Rate Protection Agreement, foreign currency
exchange agreement, commodity price protection agreement or other interest or
currency exchange rate or commodity price hedging arrangement.
IMPAIRMENT means, with respect to any Major Project Document or Governmental
Approval, the rescission, termination, cancellation, repeal, invalidity,
suspension (other than by reason of an event of force majeure (as defined in
such Major Project Document) to the extent suspension by reason of an event of
force majeure (as defined in such Major Project Document) is expressly permitted
by such Major Project Document or Governmental Approval or results from
Applicable Law), injunction, inability to satisfy stated conditions to
effectiveness or amendment, modification or supplementation (other than, in the
case of a Major Project Document, any such amendment, modification or
supplementation effected in accordance with Section 8.11 of the Master
Agreement). The verb "Impair" shall have a correlative meaning.
INDEBTEDNESS of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or loans of any kind,
(b) all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, (c) all obligations of such Person under conditional sale
or other title retention agreements relating to property acquired by such
Person, (d) all obligations of such Person in respect of the deferred purchase
price of property or services (excluding current accounts payable incurred in
the ordinary course of business), (e) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed or
whether such Person has otherwise become liable for such liabilities, (f) all
Guarantees by such Person of Indebtedness of others, (g) all Capital Lease
Obligations of such Person, (h) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty, (i) all obligations, contingent or otherwise, of such Person in
respect of bankers' acceptances and (j) the maximum fixed redemption or
repurchase price of redeemable stock of such Person, if any, at the time of
redemption or repurchase plus accrued but unpaid dividends thereon; PROVIDED
that with respect to the Borrower redeemable stock shall not include the
ownership interest of any Member in the Borrower or the ownership interest of
any permitted transferee of such ownership interest in the Borrower. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
INDEMNITEE has the meaning assigned to such term in Section 12.3 of the Master
Agreement.
INDEPENDENT ENGINEER means Black & Veatch Corporation, retained as independent
engineer by the Lenders.
INDEPENDENT ENGINEER AGREEMENT means the agreement dated March 15, 2000 between
the Independent Engineer, the Administrative Agent and the Project Company
appointing the Independent Engineer to act as technical advisor to the Lenders
with respect to the Project.
INDEPENDENT ENGINEER'S REPORT means the report of the Independent Engineer
referred to in Section 5.1(a)(iii), in form and substance reasonably
satisfactory to the Administrative Agent and the Lenders and addressing among
other things, (a) the technical feasibility of the Project, the Interconnection
Upgrades and the Gas Interconnection Facilities; (b) the reasonableness of the
Construction Schedule and the Construction Budget; (c) the sufficiency of the
completion and performance tests contained in the EPC Contract, and (d) the
adequacy of the environmental permitting and the environmental site assessment.
In addition, such report shall certify that the Independent Engineer has
reviewed and analyzed the Base Case Projections, and that, in the opinion of the
Independent Engineer, the Base Case Projections, including the underlying models
and assumptions set forth therein, represent a reasonable estimate of the
revenues and expenses, results of operations and cash flows with respect to the
Project, the Interconnection Upgrades and the Gas Interconnection Facilities
over the period presented.
INDEX DEBT has the meaning assigned to such term in the Credit Agreement.
INFORMATION has the meaning assigned to such term in Section 12.9.
INSTITUTIONAL LENDERS has the meaning assigned to such term in the preamble to
the Master Agreement.
INSURANCE CONSULTANCY AGREEMENT means the letter agreement dated June 12, 2000
between the Insurance Consultant and the Administrative Agent appointing the
Insurance Consultant to act as the insurance consultant to the Lenders with
respect to the Project.
INSURANCE CONSULTANT means Marsh McLennan, retained as insurance consultant by
the Lenders or any successor thereto appointed by the Lenders.
INSURANCE CONSULTANT REPORT means the report prepared and furnished by the
Insurance Consultant prior to the Closing Date analyzing and confirming the
adequacy of the Project Company's insurance program.
INTERCONNECTION UPGRADES means the upgrades to be made to the transmission
systems of PECO and Conectiv in order to accommodate the interconnection of the
Project and to provide sufficient transmission capacity for the Project to
qualify as a "Capacity Resource" as specified by PJM in accordance with the PJM
Operating Agreement.
INTERCREDITOR AGREEMENT has the meaning assigned to such term in Section 2.12 of
the Master Agreement.
INTEREST EXPENSE means, for any period, the sum, for the Borrower, of the
following: (a) all interest in respect of Indebtedness (including, without
limitation, the interest component of any payments in respect of Capital Lease
Obligations) accrued or capitalized during such period (whether or not actually
paid during such period) PLUS (b) the net amount payable (or MINUS the net
amount receivable) under Interest Rate Protection Agreements during such period
(whether or not actually paid or received during such period).
INTEREST RATE PROTECTION AGREEMENT means, for any Person, an interest rate swap,
cap or collar agreement or similar arrangement between such Person and one or
more financial institutions providing for the transfer or mitigation of interest
risks either generally or under specific contingencies.
INVESTMENT means, for any Person: (a) the acquisition (whether for cash,
property, services or securities or otherwise) of capital stock, bonds, notes,
debentures, partnership or other ownership interests or other securities of any
other Person or any agreement to make any such acquisition (including any "short
sale" or any sale of any securities at a time when such securities are not owned
by the Person entering into such sale); (b) the making of any deposit with, or
advance, loan or other extension of credit to, any other Person (including the
purchase of property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such property to such Person), but
excluding any such advance, loan or extension of credit having a term not
exceeding ninety (90) days arising in connection with the sale of inventory or
supplies by such Person in the ordinary course of business; (c) the entering
into of any Guarantee of, or other contingent obligation with respect to,
Indebtedness or other liability of any other Person and (without duplication)
any amount committed to be advanced, lent or extended to such Person; or (d) the
entering into of any Hedging Agreement.
INVESTMENT GRADE RATING means a rating of "BBB-" or higher from S&P and a rating
of "Baa3" or higher from Moody's.
ISSUING BANK has the meaning assigned to such term in the Credit Agreement.
LC DISBURSEMENT has the meaning assigned to such term in the Credit Agreement.
LC EXPOSURE has the meaning assigned to such term in the Credit Agreement.
LENDERS has the meaning assigned to such term in the preamble to the Master
Agreement.
LETTER OF CREDIT has the meaning assigned to such term in the Credit Agreement.
LIBO RATE has the meaning assigned to such term in the Credit Agreement.
LIEN means, with respect to any Property, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such Property, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such Property and (c) in the case of securities, any purchase
option, call or similar right of a third party with respect to such securities.
LOAN AGREEMENT means each of the Credit Agreement and the Note Purchase
Agreement.
LOANS means the Tranche A Loans, the Tranche B Loans, the Equity Bridge Loans,
the Working Capital Loans and the Debt Service Reserve Loans.
LOSS PROCEEDS means, with respect to any Event of Loss, insurance proceeds,
condemnation awards or other compensation, awards, damages and other payments or
relief other than payments received for the interruption of operations.
LOSS PROCEEDS ACCOUNT has the meaning assigned to such term in the Disbursement
Agreement.
MAJOR MAINTENANCE ACCOUNT has the meaning assigned to such term in the
Disbursement Agreement.
MAJOR MAINTENANCE EXPENDITURES has the meaning assigned to such term in the
Disbursement Agreement
MAJOR PROJECT DOCUMENTS means those agreements listed in Appendix C to the
Master Agreement and all Additional Major Project Documents.
MAJOR PROJECT PARTY means the Borrower, the Project Company, each Member, CEG,
PGET, PG&E, the Contractor, the Contractor Guarantors, the Operator, the
Transmission Provider, PECO, TETCO, PSW, and each Person party to a Major
Project Document, in each case until each Transaction Document to which such
Person is a party has terminated or expired in accordance with its terms.
MAJORITY LENDERS means Lenders holding at any given time at least 50.1% of (i)
prior to the Conversion Date, the Commitments (not reduced for drawings under
any Facility), and (ii) after the Conversion Date, the aggregate of (a) all
outstanding Loans under the Tranche A Facility and the Tranche B Facility, (b)
the Debt Service Reserve Commitment (not reduced for outstanding Debt Service
Reserve Loans) and (c) the Working Capital Commitment (not reduced for
outstanding Working Capital Loans) and when used with respect to MAJORITY
LENDERS under a Loan Agreement, means Lenders holding at any given time at least
50.1% of such Commitments, and/or Loans, as applicable, under such Loan
Agreement.
MAKE WHOLE AMOUNT has the meaning assigned to such term in the Note Purchase
Agreement.
MANAGEMENT SERVICES AGREEMENT has the meaning assigned to such term in Section
2.5 of the Master Agreement.
MARGIN STOCK means "margin stock" within the meaning of Regulations T, U and X
of the Board.
MATERIAL ADVERSE EFFECT means a material adverse effect on (a) the ability of an
Obligor to perform any of its material obligations under the Financing Documents
or the Major Project Documents to which it is a party, (b) the validity or
enforceability of any of the Financing Documents or the Major Project Documents
or (c) the value of the Collateral or the validity or priority of the security
interests in such Collateral.
MATERIAL INDEBTEDNESS means, with respect to any Person, Indebtedness (other
than under the Loan Agreements), or obligations in respect of one or more
Hedging Agreements, of such Person in an aggregate principal amount exceeding
$5,000,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of any Person in respect of any Hedging Agreement at
any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that such Person would be required to pay if such Hedging Agreement
were terminated at such time.
MEMBER means Columbia Electric Liberty Corporation, Columbia Electric Liberty II
Corporation, Columbia Electric Liberty Member Corporation and Columbia Electric
Liberty Member II Corporation and such other Person or Persons who have, in
accordance with the terms of the Equity Contribution Agreement, acquired any
membership interests in the Borrower from time to time.
MEMBERSHIP INTEREST has the meaning assigned to such term in the Equity
Contribution Agreement.
MEMORANDUM has the meaning assigned to such term in Section 6.19 of the Master
Agreement.
MERCHANT STAGE AGREEMENT means an agreement for the sale of electric power or
the purchase of natural gas (other than Alternative Power Agreements) becoming
effective upon or after the expiration of any Tolling Period on terms consistent
with the energy management procedures and general contract terms for such
agreements previously agreed between the Obligors and the Administrative Agent
in accordance with Section 7.19 of the Master Agreement, unless such agreed
energy management procedures stipulate that such agreement should not be
classified as a Merchant Stage Agreement.
MERCHANT STAGE PROJECT PARTY means a Person (other than an Obligor) party to a
Merchant Stage Agreement.
MERRILL CREEK ASSIGNMENT has the meaning assigned to such term in Section 2.9 of
the Master Agreement.
MOODY'S means Moody's Investors Service, Inc., or any successor thereof.
MORTGAGE means the mortgage, assignment of rents, security agreement and fixture
filing executed by the Project Company in favor of The Chase Manhattan Bank as
Collateral Agent, for the benefit of the Secured Parties, and covering the
Project (including, without limitation, the Project Site and the easement
properties).
MORTGAGED PROPERTY means the mortgaged property as defined in the Mortgage.
MULTIEMPLOYER PLAN means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA to which the Borrower or any ERISA Affiliate is obligated to
contribute.
NAIC means the National Association of Insurance Commissions.
NET AVAILABLE PROCEEDS means:
(a) in the case of any Project Document Claim, the aggregate amount of all cash
received by the Project Company in respect of such Project Document Claim
net of reasonable expenses, income taxes and franchise taxes (to the extent
such franchise taxes are payable solely by reason of the receipt by the
Project Company of the Project Document Claim) incurred by the Project
Company or by an Affiliate of the Project Company in connection therewith;
and
(b) in the case of any Event of Loss, the aggregate amount of Loss Proceeds
received by the Project Company in respect of such Event of Loss net of
reasonable expenses incurred by the Project Company in connection
therewith; PROVIDED that proceeds received in respect of business
interruption insurance shall not be included in calculating Net Available
Proceeds.
NON-MATERIAL PROJECT DOCUMENTS means contracts or agreements entered into by an
Obligor other than a Major Project Document.
NOTE PURCHASE AGREEMENT means the Note Purchase Agreement dated as of July 31,
2000 among the Borrower, the Project Company, and the Institutional Lenders
party thereto.
NOTES has the meaning assigned to such term in the Note Purchase Agreement.
NOTICE OF BORROWING means a notice, substantially in the form of Exhibit F to
the Master Agreement duly executed by a Financial Officer of the Borrower.
O&M AGREEMENT has the meaning assigned to such term in Section 2.5 of the Master
Agreement.
OBLIGOR has the meaning assigned to such term in the preamble to the Master
Agreement.
OFFICER'S CERTIFICATE: A certificate from a Financial Officer or any officer
whose responsibilities extend to the subject matter of such certificate.
OPERATING BUDGET means a budget and annual operating plan, prepared and
certified by the Borrower, and approved in accordance with Section 7.15 of the
Master Agreement, of Operation and Maintenance Expenses, Major Maintenance
Expenditures and other Capital Expenditures expected to be incurred by the
Borrower during the relevant fiscal year to which such budget applies.
OPERATING EXPENSES means, for any period, the sum of (i) Operation and
Maintenance Expenses for such period plus (ii) Major Maintenance Expenditures
(A) to the extent a reserve is made in the Major Maintenance Reserve Account in
such period, and (B) to the extent not otherwise funded through the Major
Maintenance Reserve Account in such period.
OPERATING REPORT means a management report providing data relating to the
Project, describing in reasonable detail material developments concerning the
Project and the Development of the Project and setting forth in reasonable
detail the total Project Revenues for such fiscal quarter.
OPERATION AND MAINTENANCE EXPENSES means, for any period calculated on a cash
basis, the sum, computed without duplication, of the following: (a) expenses of
administering and operating the Project in accordance with the Transaction
Documents and the Non-Material Project Documents plus (b) direct operating and
maintenance costs of the Project (including, without limitation, all payments
due and payable under the O&M Agreement) payable during such period plus (c)
insurance costs payable during such period plus (d) sales and excise taxes
payable by the Project Company with respect to the sale of electrical energy
during such period plus (e) franchise taxes payable by the Obligors during such
period plus (f) Federal, state and local income taxes payable by the Obligors
during such period plus (g) costs and fees attendant to the obtaining and
maintaining, transferring or amending the Governmental Approvals payable during
such period plus (h) legal, accounting and other professional fees attendant to
any of the foregoing items payable during such period plus (i) all agency fees
to the Administrative Agent or Collateral Agent during such period plus (j)
Capital Expenditures made by the Borrower during such period. Operation and
Maintenance Expenses shall exclude, to the extent otherwise included: (i) Debt
Service, (ii) payments into any of the Accounts during such period, (iii) any
Restricted Payments during such period and any other payments subordinated by
the terms thereof or by the terms of the Disbursement Agreement to the payment
of Debt Service, (iv) payments out of the Major Maintenance Account with respect
to major maintenance during such period, (v) depreciation or obsolescence
charges or reserves therefor, amortization of intangibles or other bookkeeping
entries of a similar nature for such period, (vi) any Capital Expenditures to
the extent not included in the O&M Agreement made during such period that are
properly chargeable by GAAP to fixed capital accounts for such period, (vii) any
payments of any kind with respect to Restoration Work during such period, (viii)
non-recurring costs and expenses of the issuance of any Indebtedness paid out of
the proceeds of such Indebtedness, and (ix) any payments made under the EPC
Contract.
OPERATIONAL ACCEPTANCE has the meaning assigned to such term in the EPC
Contract.
OPERATOR has the meaning assigned to such term in Section 2.5 of the Master
Agreement and includes any other Person succeeding to the interests of Conectiv
Operating Services Company as Operator.
PECO has the meaning assigned to such term in Section 2.6 of the Master
Agreement.
PECO INTERCONNECTION AGREEMENT has the meaning assigned to such term in Section
2.6 of the Master Agreement.
PECO INTERCONNECTION CONSTRUCTION AGREEMENT has the meaning assigned to such
term in Section 2.6 of the Master Agreement.
PERFORMANCE GUARANTEE LEVELS has the meaning assigned to such term in the EPC
Contract.
PERFORMANCE TEST has the meaning assigned to such term in the EPC Contract.
PERMITTED INDEBTEDNESS means the following Indebtedness:
(a) Indebtedness incurred under the Financing Documents;
(b) Indebtedness incurred by the Borrower to finance Capital Expenditures to
the extent such Capital Expenditures are required by Applicable Law
PROVIDED that (1) prior to the incurrence of such Indebtedness, the
Independent Engineer shall have confirmed that such Capital Expenditures
are required to comply with Applicable Law and (2) after giving effect to
the incurrence of such Indebtedness, (x) during any Tolling Period, the
average Debt Service Coverage Ratio for each period of four consecutive
quarters until the Tranche B Final Maturity Date shall not be less than
1.30 to 1 and the minimum Debt Service Coverage Ratio for each such period
shall not be less than 1.2 to 1; or (y) at any other time, the average Debt
Service Coverage Ratio for each period of four consecutive quarters until
the Tranche B Final Maturity Date shall be not less than 2.0 to 1 and the
minimum Debt Service Coverage Ratio for each such period shall be not less
than 1.7 to 1 (it being understood that any such projections for periods
after the expiration of Tolling Agreement shall be based on updated
forecasts);
(c) Indebtedness incurred by the Borrower to finance Capital Expenditures which
are not required by Applicable Law but are required by the Tolling
Agreement; PROVIDED that (1) no Default or Event of Default shall have
occurred and be continuing or shall result from the incurrence of such
debt; (2) prior to the incurrence of such Indebtedness, the Independent
Engineer shall have confirmed that such Capital Expenditures are required
to comply with the terms of the Tolling Agreement and (3) after giving
effect to the incurrence of such Indebtedness, (x) during any Tolling
Period, the average Debt Service Coverage Ratio for each period of four
consecutive quarters until the Tranche B Final Maturity Date shall not be
less than 1.30 to 1 and the minimum Debt Service Coverage Ratio for each
such period shall not be less than 1.2 to 1; or (y) at any other time, the
average Debt Service Coverage Ratio for each period of four consecutive
quarters until the Tranche B Final Maturity Date shall be not less than 2.0
to 1 and the minimum Debt Service Coverage Ratio for each such period shall
be not less than 1.7 to 1 (it being understood that any such projections
for periods after the expiration of Tolling Agreement shall be based on
updated forecasts);
(d) Indebtedness incurred by the Borrower to finance Capital Expenditures not
covered by (b) or (c) of this definition; PROVIDED that (1) no Default or
Event of Default shall have occurred and be continuing or shall result from
the incurrence of such Indebtedness, (2) the Borrower shall have obtained
sufficient sources of committed funding to complete such Capital
Expenditures and any such new lenders shall have agreed to accede to the
Intercreditor Agreement in the manner set forth therein; (3) prior to the
incurrence of such Indebtedness, the Independent Engineer shall have
confirmed the reasonableness and adequacy of the plans for such Capital
Expenditures; (4) the Conversion Date shall have occurred; (5) after giving
effect to the incurrence of such Indebtedness, (x) during any Tolling
Period, the average Debt Service Coverage Ratio for each period of four
consecutive quarters until the Tranche B Final Maturity Date shall not be
less than 1.45 to 1 and the minimum Debt Service Coverage Ratio for each
such period shall not be less than 1.4 to 1; or (y) at any other time, the
average Debt Service Coverage Ratio for each period of four consecutive
quarters until the Tranche B Final Maturity Date shall be not less than
2.75 to 1 and the minimum Debt Service Coverage Ratio for each such period
shall be not less than 2.25 to 1, (it being understood that any such
projections for periods after the expiration of Tolling Agreement shall be
based on updated forecasts); (6) S&P or Moody's provides (or reaffirms) an
Investment Grade Rating (not on ratings watch for downgrade below
Investment Grade Rating), for the Loans, and (7) such Indebtedness has an
average life to maturity and final maturity at least as long as the Tranche
B Loans;
(e) Working capital Indebtedness in an amount not to exceed $5,000,000 less the
Indebtedness incurred under the Working Capital Facility;
(f) To the extent deemed Indebtedness (other than for borrowed money),
obligations under the Major Project Documents;
(g) Indebtedness of the Borrower incurred to finance the acquisition,
construction or improvement of any fixed or capital assets, including
Capital Lease Obligations and any Indebtedness assumed in connection with
the acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and replacements
of any such Indebtedness that do not increase the outstanding principal
amount thereof; PROVIDED that (i) such Indebtedness is incurred prior to or
within 90 days after such acquisition or the completion of such
construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (g) shall not exceed $2,000,000 at
any time;
(h) Indebtedness of the Project Company with respect to amounts advanced by the
Borrower to the Project Company PROVIDED that (A) the proceeds of any
payment or repayment of principal of such Indebtedness must be applied to
repayment or prepayment of principal of the Loans and (B) such Indebtedness
is reduced to the extent any payment is made under the guarantee of the
Project Company provided under Article X hereto;
(i) Subordinated Indebtedness between the Borrower and any Member in the amount
of such Member's Equity Contribution on terms and conditions satisfactory
to the Administrative Agent; and
(j) Obligations of the Borrower in respect of letters of credit in an amount
not to exceed $25,000,000 (less the amount of any Letters of Credit issued
under the Debt Service Reserve Facility or the Working Capital Facility)
and the purpose of which is to support obligations under the Major Project
Documents,
PROVIDED that, in each case, the dates for payment or repayment of Debt Service
relating to such Permitted Indebtedness shall be Repayment Date(s).
PERMITTED INTEREST RATE PROTECTION AGREEMENTS means in the case of the Borrower,
interest rate protection agreements including caps and collars entered into with
one or more Bank Lenders and with a notional amount not in excess of the
aggregate outstanding principal amount of the Tranche A Loans or the Tranche B
Loans, as applicable, on the date the Borrower enters into such interest rate
protection agreement and providing for the protection, as applicable, against
(i) fluctuations in the applicable LIBO Rate for the equivalent period for which
LIBO Rate is payable with respect to the Tranche A Loans or (ii) movements in
the yield to maturity on US Treasury Securities prior to the setting of the
applicable rate of interest for each Tranche B Loan.
PERMITTED INVESTMENTS means any of the following: (i) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than 6
months from the date of acquisition; (ii) time deposits and certificates of
deposit, with maturities of not more than 6 months from the date of acquisition,
of any domestic or international commercial bank of recognized standing having
capital and surplus in excess of $500,000,000 (or whose holding company meets
such standard) and having a rating on its commercial paper of at least "A-1" or
the equivalent thereof by S&P or at least "P-1" or the equivalent by Moody's;
(iii) commercial paper issued by any corporation or other business entity, which
commercial paper is rated at least "A-1" or the equivalent thereof by S&P or at
least "P-1" or the equivalent thereof by Moody's and matures not more than 6
months after the date of acquisition; (iv) investments in money market funds
substantially all the assets of which are comprised of securities of the types
described in clauses (i) and (ii) above; (v) United States Securities and
Exchange Commission registered money market mutual funds conforming to Rule 2a-7
of the Investment Company Act of 1940 that are rated in the highest category by
S&P and Moody's; (vi) repurchase agreements backed by securities of the type
described in clause (iii) above; (vii) trust accounts in the name of the
Collateral Agent and (viii) any other Dollar investment which the Required
Lenders agree in writing shall constitute a "Permitted Investment".
PERMITTED LIENS means:
(a) Liens in favor of the Collateral Agent created under the Security
Documents;
(b) Liens to secure Permitted Indebtedness; PROVIDED that (1) no liens shall
secure Indebtedness incurred under subclauses (e) or (f) of the definition
of Permitted Indebtedness, (2) Permitted Indebtedness shall be secured only
by liens on the assets financed with such Indebtedness and (3) any creditor
providing Indebtedness incurred pursuant to subclause (a), (b), (c) or (d)
under the definition of Permitted Indebtedness shall accede to the
Intercreditor Agreement;
(c) Liens in connection with workmen's compensation, unemployment insurance or
other social security or pension obligations;
(d) mechanics', workmen's, materialmen's, suppliers', construction or like
liens, in each case (1) for amounts not yet due and payable or (2) for
amounts due and payable with respect to ordinary course claims being
contested in good faith and for which adequate reserves (in accordance with
GAAP) have been established or bond is posted;
(e) Servitudes, easements (including utility easements), rights-of-way,
restrictions or minor defects or irregularities in title and such other
encumbrances or charges against real property or interests therein as are
of a nature generally existing with respect to properties of a similar
character and which do not in any way materially interfere with the use
thereof;
(f) Liens for taxes not yet delinquent or, if delinquent, which are being
contested in good faith and for which adequate reserves (in accordance with
GAAP) have been established;
(g) Attachment or judgment liens to the extent not constituting an Event of
Default under Article IX; PROVIDED that (1) the existence of such liens
could not reasonably be expected to result in a Material Adverse Effect and
(2) such liens are discharged within 60 days of the creation thereof;
(h) Contractual rights of PGET under the Tolling Agreement and in the side
letter between PGET and the Project Company dated July 24, 2000 concerning
the right of first offer granted to PGET that is subject and subordinate in
all respects to the terms of the Financing Documents; and
(i) Contractual rights of PECO under the PECO Interconnection Construction
Agreement.
PERSON means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or
other entity.
PG&E means PG&E Corporation, a California Corporation.
PGET has the meaning assigned to such term in Section 2.3 of the Master
Agreement.
PGET GUARANTEE means the guarantee provided by the PG&E in favor of the Project
Company guaranteeing the obligations of PGET under the Tolling Agreement.
PJM CONTROL AREA has the meaning given to it in the PJM Tariff.
PJM INTERCONNECTION SERVICE AGREEMENT has the meaning assigned to such term in
Section 2.6 of the Master Agreement.
PJM MARKET CONSULTANT means PHB Hagler Bailly, retained by the Lenders to render
advice on PJM market demand, supply and price fundamentals.
PJM MARKET CONSULTANT'S REPORT means the report from the PJM Market Consultant
addressing the PJM Power Market and providing a projection of market prices for
energy and capacity.
PJM OPERATING AGREEMENT means the operating agreement governing access to the
Transmission System in the PJM Control Area.
PJM POWER MARKET means the power market serviced by PJM Interconnection L.L.C.
(the TRANSMISSION PROVIDER) in the states of Pennsylvania, New Jersey, Delaware,
Maryland, Virginia and the District of Columbia.
PJM TARIFF has the meaning assigned to such term in Section 2.6 of the Master
Agreement.
PLAN means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or the minimum funding
requirements of Section 412 of the Code or Section 302 of ERISA, and in respect
of which the Borrower or any ERISA Affiliate is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an EMPLOYER as
defined in Section 3(5) of ERISA.
PLANS AND SPECIFICATIONS means the Project Technical Requirements for the
Project attached as Schedules A-V to the EPC Contract, as they may be amended or
modified by Change Orders permitted hereunder.
PLANT COMPLETION means after actual plant acceptance by the Obligors when the
Contractor has completed all of the work under the EPC Contract including Punch
List Items.
PLEDGE AGREEMENT means the Pledge Agreement dated as of July 31, 2000 among the
Members and the Collateral Agent.
PLEDGED MEMBERSHIP INTERESTS means all shares, partnership or membership
interests, or other equity interests pledged to the Lenders as Collateral.
PRECEDENT AGREEMENT has the meaning assigned to such term in Section 2.7 of the
Master Agreement.
PRODUCER BUILT FACILITIES has the meaning assigned to such term in the PECO
Interconnection Construction Agreement.
PROJECT means the completed buildings and installed equipment, related Project
Site improvements and related electrical and gas interconnection facilities
located at the Project Site which shall constitute the Liberty Electric Power
Project in the Borough of Eddystone, Delaware County, PA.
PROJECT COMPANY has the meaning assigned to such term in the preamble to the
Master Agreement.
PROJECT COMPANY SECURITY AGREEMENT means the Security Agreement dated as of July
31, 2000 between the Project Company and the Collateral Agent.
PROJECT COSTS means all costs and expenses incurred or to be incurred by the
Obligors to finance and complete the Project, the Interconnection Upgrades and
the Gas Interconnection Facilities in the manner contemplated by the Major
Project Documents and the Construction Budget (without duplication), including,
without limitation, all costs and expenses incurred prior to the Conversion Date
in connection with the Development of the Project, including, without
limitation, all Debt Service, Operation and Maintenance Expenses, and other
expenses incurred (to the extent provided in the Construction Budget) prior to
the Conversion Date.
PROJECT DOCUMENT CLAIM means any payment by any Project Party (other than the
Borrower) under any Major Project Document in respect of liquidated damages,
warranty payments, indemnity payments or similar amounts including, without
limitation, Buy-Down Amounts and payments by PGET pursuant to Section 14.2 of
the Tolling Agreement other than: (a) Delay Liquidated Damages and (b) other
payments received for the interruption of operations including amounts received
under the O&M Agreement.
PROJECT REVENUES means, for any period, all cash revenues received by the
Borrower during such period from: (a) the sale of electricity and ancillary
services from the Project, (b) all investment earnings on Permitted Investments
held in the Accounts credited during such period, (c) refunds of deposits
received by the Borrower during such period and (d) all other income, proceeds
or receipts, howsoever earned or received by the Borrower during such period,
including, but not limited to (i) any proceeds received with respect to business
interruption and delay in start-up insurance, (ii) the amount of any liquidated
damages received during such period and (iii) receipts under Hedging Agreements.
Project Revenues shall exclude, to the extent otherwise included, proceeds of
insurance (other than business interruption and delay in start-up insurance),
condemnation award or other compensation in respect of any Event of Loss
affecting any property of the Borrower.
PROJECT SITE means the site in the Borough of Eddystone, PA on which the Project
will be built, as more specifically described in Schedule C to Section VII of
the EPC Contract.
PROPERTY means any right or interest in or property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible, including,
without limitation, cash, securities, accounts and contract rights.
PRO RATA SHARE: (a) For any Lender and with respect to any Loan or Commitment
under a Facility, (i) if measured on or prior to the Conversion Date with
respect to the Tranche A Facility or the Tranche B Facility or at any time with
respect to each other Facility, the percentage equal to the aggregate amount of
such Lender's Commitment with respect to such Facility over the aggregate amount
of all Commitments to such Facility, and (ii) if measured after the Conversion
Date, with respect to the Tranche A Facility or the Tranche B Facility, the
percentage equal to the aggregate outstanding principal amount of such Lender's
Loans with respect to such Facility over the aggregate outstanding principal
amount of all Loans with respect to such Facility; and (b) for Loans or
Commitments under a Facility with respect to all Loans and/or Commitments under
all Facilities, (i) if measured on or prior to the Conversion Date, the
percentage equal to the aggregate amount of Commitments (whether or not used)
under such Facility over the aggregate amount of all Commitments (whether or not
used), under all Facilities, (ii) if measured after the Conversion Date with
respect to a Tranche A Facility Pro Rata Share or a Tranche B Facility Pro Rata
Share, the percentage equal to the aggregate outstanding principal amount of
Loans under such Facility over the sum of the aggregate outstanding principal
amount of all Loans under each of the Tranche A Facility and the Tranche B
Facility and the aggregate amount of Commitments under each of the Debt Service
Reserve Facility and the Working Capital Facility, and (iii) if measured after
the Conversion Date with respect to a Debt Service Reserve Facility Pro Rata
Share or a Working Capital Facility Pro Rata Share, the percentage equal to the
aggregate outstanding amount of Commitments under such Facility over the sum of
the aggregate outstanding principal amount of all Loans under each of the
Tranche A Facility and the Tranche B Facility and the aggregate principal of
Commitments under each of the Debt Service Reserve Facility and the Working
Capital Facility;
PRUDENT UTILITY PRACTICES means those practices, methods, equipment,
specifications and standards of safety and performance, as the same may change
from time to time, commonly used in the power industry in the United States of a
type and size similar to the Project and recognized as good, safe and prudent
engineering practices in connection with the operation, maintenance, repair and
use of electrical and other equipment, facilities and improvements of such
facilities, with commensurate standards of safety, performance, dependability,
efficiency and economy. "Prudent Utility Practices" is not intended to be
limited to the optimum practice, method or act to the exclusion of all others,
but rather to a spectrum of possible practices, methods or acts having due
regard for, among other things, manufacturers' warranties, geographical
location, and engineering and operating considerations.
PUHCA means the Public Utility Holding Company Act of 1935, as amended.
PUNCH LIST ITEMS has the meaning assigned to such term in the EPC Contract.
PSW has the meaning assigned to such term in Section 2.8 of the Master
Agreement.
RATING means, with respect to any entity, the ratings assigned to such entity by
each of the Rating Agencies.
RATING AGENCIES means Moody's and/or S&P, as applicable, and any successor
thereto.
REGISTER has the meaning assigned to such term in Section 12.4(f) of the Master
Agreement.
RELATED PARTIES means (i) with respect to an Obligor, each Member, the Project
Company and each Affiliate of an Obligor, the Project Company or a Member and
(ii) with respect to any other specified Person, such Person's Affiliates and
the respective directors, officers, employees, agents and advisors of such
Person and such Person's Affiliates.
RELEASE means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including the movement of Hazardous Materials through
ambient air, soil, surface water, ground water, wetlands, land or subsurface
strata.
REPAYMENT DATE means a REPAYMENT DATE under either Loan Agreement.
REQUESTED DRAWDOWN DATE means (i) with respect to the Equity Bridge Loan
Facility and the Working Capital Facility, the date requested by the Borrower
for the making of such Loan and (ii) with respect to the Tranche A Facility and
the Tranche B Facility each of the dates set forth in Schedule II to the Note
Purchase Agreement and Schedule III to the Credit Agreement, as applicable.
REQUIRED DEBT SERVICE RESERVE AMOUNT has the meaning assigned to such term in
the Disbursement Agreement.
REQUIRED LENDERS means Lenders holding at any given time at least 66 2/3% of (i)
prior to the Conversion Date, the Commitments (not reduced for drawings under
any Facility), and (ii) after the Conversion Date, the aggregate of (a) all
outstanding Loans under the Tranche A Facility and the Tranche B Facility, (b)
the Debt Service Reserve Commitments (not reduced for outstanding Debt Service
Reserve Loans) and (c) the Working Capital Commitments (not reduced for
outstanding Working Capital Loans) and when used with respect to REQUIRED
LENDERS under a Loan Agreement, means Lenders holding at any given time at least
66 2/3% of such Commitments and/or Loans, as applicable, under such Loan
Agreement.
REQUIRED MAJOR MAINTENANCE AMOUNT has the meaning given to it in the
Disbursement Agreement.
RESTORATION WORK has the meaning given to such term in Section 7.9(j) of the
Master Agreement.
RESTRICTED PAYMENT means distributions of the Obligors (in cash, property or
obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other analogous fund for, or the
purchase, redemption, retirement or other acquisition of, any portion of any
equity interest in such Obligors or of any subordinated debt or of any warrants,
options or other rights to acquire any such equity interest (or to make any
payments to any Person, such as "phantom stock" payments, where the amount
thereof is calculated with reference to fair market or equity value of such
Obligors.
REVENUE ACCOUNT has the meaning assigned to such term in the Disbursement
Agreement.
S&P means Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., or any successor thereof.
SCHEDULED CONVERSION DATE means April 1, 2002.
SECURED OBLIGATIONS has the meaning assigned to such term in the Intercreditor
Agreement.
SECURED PARTIES has the meaning assigned to such term in the Intercreditor
Agreement.
SECURITIES ACT means the United States Securities Act of 1933, as amended.
SECURITY DOCUMENTS means, collectively, the Borrower Security and Pledge
Agreement, the Project Company Security Agreement, the Mortgage, the Pledge
Agreement, the Disbursement Agreement, the Intercreditor Agreement and all
Uniform Commercial Code financing statements required by the Project Company
Security Agreement, the Borrower Security and Pledge Agreement or the Mortgage
to be filed with respect to the security interests in personal property and
fixtures created pursuant to the Project Company Security Agreement, the
Borrower Security and Pledge Agreement or the Mortgage and all other agreements
pursuant to which a Lien is granted in favor of the Collateral Agent as security
for the payment of Secured Obligations to the Lenders.
SPECIAL WARRANTY DEED means the deed dated August 20, 1998 between the Project
Company and Sidney and Belle Baer in relation to the purchase by the Project
Company of the Project Site.
SUBSIDIARY means, with respect to any Person (the PARENT) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
TAXES means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
TETCO has the meaning assigned to such term in Section 2.7 of the Master
Agreement.
TITLE COMPANY means Lawyers Title Insurance Company.
TITLE POLICY means the policy of title insurance issued on or about the Closing
Date by the Title Company to the Administrative Agent insuring the Liens or
estate created by the Mortgage.
TOLLING AGREEMENT has the meaning assigned to such term in Section 2.3 of the
Master Agreement.
TOLLING AGREEMENT EXPIRATION DATE means September 30, 2016.
TOLLING PERIOD means any time when the Tolling Agreement, or an Alternative
Power Agreement, as applicable, is in full force and effect (or in the case of
Alternative Power Agreements, are each in full force and effect); PROVIDED that
the initial Tolling Period shall not commence until the earlier of the
Commencement Date and the Early Commencement Date.
TOTAL LOSS means (1) the complete destruction of the Project following a fire,
natural disaster, or other similar occurrence, (2) damage to the Project beyond
repair, or other occurrence, which in any case renders the Project as a whole
permanently unfit for normal use for any reason whatsoever, (3) any damage to
the Project which results in an insurance settlement on the basis of "actual" or
"constructive total loss" or (4) the occurrence of an Event of Loss that could
reasonably be expected to reduce the Project's installed capacity or net
capacity below 50% of the Performance Guarantee Levels or if the estimated costs
to restore the loss or damage resulting therefrom exceeds $50,000,000.
TRANCHE A FACILITY means the $105,000,000 floating rate loan facility provided
by the Bank Lenders under the Master Agreement and the Credit Agreement.
TRANCHE A LOAN COMMITMENT has the meaning assigned to such term in the Credit
Agreement.
TRANCHE A LOANS has the meaning assigned to such term in Section 3.1(a) of the
Master Agreement.
TRANCHE B ESCROW ACCOUNT has the meaning assigned to such term in the Note
Purchase Agreement.
TRANCHE B FACILITY means the $165,000,000 fixed rate loan facility provided by
the Institutional Lenders under the Master Agreement and the Note Purchase
Agreement.
TRANCHE B FINAL MATURITY DATE has the meaning assigned to such term in the Note
Purchase Agreement.
TRANCHE B LOAN COMMITMENT has the meaning assigned to such term in the Note
Purchase Agreement.
TRANCHE B LOANS has the meaning assigned to such term in Section 3.1(b) of the
Master Agreement.
TRANSACTION DOCUMENTS means the Financing Documents and the Major Project
Documents.
TRANSMISSION PROVIDER has the meaning assigned to such term in Section 2.6 of
the Master Agreement.
TRANSMISSION SYSTEM has the meaning given to it in the PJM Tariff.
USE means, with respect to any Hazardous Material and with respect to any
Person, the generation, manufacture, processing, distribution, handling, use,
treatment, recycling or storage of such Hazardous Material or transportation to
or from the Property of such Person of such Hazardous Material.
WATER SUPPLY AGREEMENT has the meaning assigned to such term in Section 2.8 of
the Master Agreement.
WORK has the meaning assigned to such term in the EPC Contract.
WORKING CAPITAL AVAILABILITY PERIOD has the meaning assigned to such term in the
Credit Agreement.
WORKING CAPITAL EXPOSURE has the meaning assigned to such term in the Credit
Agreement.
WORKING CAPITAL FACILITY means the $5,000,000 working capital facility provided
by the Bank Lenders under the Master Agreement and the Credit Agreement.
WORKING CAPITAL LETTERS OF CREDIT has the meaning given to it in the Credit
Agreement.
WORKING CAPITAL LOANS has the meaning assigned to such term in Section 3.1(e) of
the Master Agreement.
WORKING CAPITAL COMMITMENT has the meaning assigned to such term in the Credit
Agreement.
APPENDIX B
INSURANCE
1. The Project Company shall, at its own cost, maintain or cause to be
maintained on its behalf in effect at all times the types of insurance required
by this Appendix B and any other insurance required under Section 7.9(e) of the
Master Agreement, in form acceptable to the Administrative Agent and the
Insurance Consultant with insurance companies rated "A-" or better, with a
minimum size rating of "VIII," by Best's Insurance Guide and Key Ratings, (or an
equivalent rating by another nationally recognized insurance rating agency of
similar standing if Best's Insurance Guide and Key Ratings shall no longer be
published) or other insurance companies of recognized responsibility
satisfactory to the Administrative Agent. The following insurance coverages
shall be maintained until the Commitments have expired or terminated and all
Secured Obligations payable to the Lenders shall have been paid in full and all
Letters of Credit have been terminated:
(a) Comprehensive or commercial general liability insurance on an
"occurrence" policy form or AEGIS, or equivalent, claims-first-made form,
including coverage for premises/operations, explosion, collapse and
underground hazards, products/completed operations, broad form property
damage, blanket contractual liability for both oral and written contracts,
independent contractor's and personal injury for Project Company and for
operators and contractors, with primary coverage limits of no less than
$1,000,000 for injuries or deaths or damage to property resulting from any
one occurrence and a $1,000,000 aggregate limit.
The comprehensive or commercial general liability policy shall also include
a severability of interest clause and a cross liability clause in the event
more than one entity is "named insured" under the liability policy.
Deductibles up to $250,000 are permitted; however, the Administrative Agent
and the Project Company will have the right to review this from time to
time based upon the operating results of the Project Company.
(b) Automobile liability insurance, including coverage for owned (to the
extent exposure exists), non-owned and hired automobiles for both bodily
injury and property damage and containing appropriate no-fault insurance
provisions or other endorsements in accordance with state legal
requirements, with limits of no less than $1,000,000 per accident combined
single limit with respect to bodily injury, property damage or death.
(c) (i) Workers compensation insurance with statutory limits; (ii)
Employer's liability, with limits not less than $500,000 per
accident/illness; (iii) Disability benefits insurance and such other forms
of insurance which the Project Company is required by law to provide for
the Project, covering loss resulting from injury, sickness, disability or
death of the employees of the Project Company.
(d) Umbrella/Excess Liability Insurance of not less than $25,000,000 per
occurrence and in the aggregate. Such coverages shall be on a per
occurrence policy form or the AEGIS, or equivalent, claims-first-made form
and over and above coverage provided by the policies described in
paragraphs (a), (b) and (c)(ii) above whose limits shall apply toward a
total of $25,000,000 limits. The umbrella and/or excess policies shall not
contain endorsements which restrict coverages as set forth in paragraphs
(a), (b) and (c) above, and which are provided in the underlying policies.
If the policy or policies provided under this paragraph (d) contain(s)
aggregate limits applying to other operations of the Project Company or the
Contractor other than the Project, and such limits are diminished below
$25,000,000 by any incident, occurrence, claim, settlement or judgment
against such insurance which has caused the carrier to establish a reserve,
the Project Company shall take immediate steps to restore such aggregate
limits or shall provide other equivalent insurance protection for such
aggregate limits.
(e) Marine liability, to the extent exposure exists, including watercraft
liability, protection and indemnity, wharfinger's liability and charterer's
liability, in an amount not less than $10,000,000. Such coverage can be
accomplished under policies provided pursuant to general liability
policies, protection and indemnity policies or separate marine and
watercraft liability policies.
(f) Marine Cargo, to the extent exposure exists, in an amount equal to the
replacement cost of the cargo in transit. Such insurance shall apply to any
one shipment in excess of $500,000 and with a lead time exceeding five (5)
months and shall be subject to a deductible of no greater than $100,000.
The ocean cargo policy shall attach coverage prior to equipment departing
the premises of the manufacturer and shall continue in force until the
shipment arrives at the Project site including 60 days storage, or is
insured under the builders risk policy. Delay in opening (advanced loss of
profits) shall be insured on the traditional actual loss sustained basis in
an amount not less than 18 months debt service, continuing expenses and
profits, subject to a deductible (waiting period) not exceeding 30 days.
The ocean cargo policy shall not be subject to cancellation with the
exception of wars and strikes preventing passage to the United States and
nonpayment of premium.
(g) Aircraft liability, to the extent exposure exists, in an amount not
less than $10,000,000 for all owned, non-owned and hired aircraft, fixed
wing or rotary, used in connection with the operation of the Project.
(h) From the point of groundbreaking for the Project and through to the
Conversion Date, or until such time as cover is provided under the
operational insurance as set forth below, builder's risk insurance on an
"all risk basis" on a replacement value form (including earthquake (subject
to the next paragraph), flood, collapse, sinkhole and subsidence) and
additional construction financing interest on an "agreed amount" basis and
providing (i) coverage for the Project, including removal of debris,
insuring the buildings, structures, machinery, equipment, facilities,
fixtures and other properties constituting a part of the Project in a
minimum aggregate amount not less than full replacement value of the
Project, subject to an annual aggregate limit of $25,000,000 for flood
coverage and for earthquake coverage, (ii) off-site coverage with a per
occurrence limit of $2,500,000 or such higher amount as is sufficient to
cover off-site equipment for which there have been progress payments, (iii)
transit coverage (including ocean cargo where ocean transit will be
required) with a per occurrence limit sufficient to cover the full
insurable value of any item in transit, (iv) coverage for operational
testing and startup with the same dollar coverage and modifications as set
out in (h)(i) above, (v) business interruption insurance (of a "delay" or
"delay in start-up" nature) in a minimum aggregate amount no less than the
sum of eighteen (18) months annual debt service and continuing expenses on
an "all risk" basis, as set forth in (h)(i) through (h)(iv) above. All such
policies may have deductibles of not greater than $50,000 per loss;
earthquake and flood coverage shall have a deductible of not greater than
$500,000; and business interruption/delay in start-up coverage shall have a
deductible not greater than a 45-day period; operational testing shall have
a deductible of not greater than $250,000; and transit coverage shall have
a deductible of not greater than $50,000.
Earthquake coverage shall include coverage for movement, earthquakes,
shocks, tremors, landslides, subsidence, volcanic activity, sinkhole
coverage, or any other earth movement, all whether direct or indirect,
approximate or remote or in whole or in part caused by, contributed to or
aggravated by any physical damage insured against by such policy regardless
of any other cause or event that contributes, concurrently or in sequence,
to the loss.
Flood coverage shall include, but not be limited to, coverage for waves,
tide or tidal water, of lakes, ponds, reservoirs, rivers, harbors, streams,
or other bodies of water, whether or not driven by wind.
(i) Property Damage Insurance, from and after the Conversion Date, "all
risk" operational property insurance coverage in the amount of full
replacement value of the Project including a full replacement cost
endorsement (no co-insurance) with no deduction for depreciation,
providing, without limitation, (i) coverages against loss or damage by
fire, lightning, windstorm, hail, explosion, riot, civil commotion,
aircraft, vehicles, smoke, other risks from time to time included under
"all risk" or "extended coverage" policies, earthquake, flood (PROVIDED,
however, that earthquake and flood coverage may be subject to an annual
aggregate limit), collapse, sinkhole, subsidence and such other perils as
Administrative Agent, after consultation with the Insurance Consultant and
the Project Company, may from time to time require to be insured, with a
sublimit of not less than $1,000,000 for on-site clean-up required as a
result of the occurrence of an insured risk (such cover may be provided
under a pollution liability policy), (ii) off - site coverage with a per
occurrence limit of $5,000,000 or such higher amount as is sufficient to
cover off site equipment, (iii) transit coverage (including ocean cargo
where ocean transit will be required) with a per occurrence limit of not
less than $2,000,000 or such higher amount as is sufficient to cover
replacement cost of property in transit, and (iv) boiler and machinery
coverage on a "comprehensive" basis including breakdown and repair with
limits not less than full replacement cost of the insured objects. The
policy/policies shall include increased cost of construction coverage and
debris removal subject to a sublimit of $5,000,000.
In the event that the all risk property and machinery breakdown insurance
are not written in the same policy, each policy will contain a joint loss
agreement provision.
All such policies may have deductibles of not greater than $500,000 per
loss, with the exception of the combustion turbines, which may have a
deductible of not greater than $1,000,000. Earthquake and flood shall have
deductibles of not greater than $500,000 except flood deductible for
locations in 100 year flood zones shall be subject to a deductible of 2% of
loss with a minimum of $2,500,000 permitted.
(j) Business Interruption Insurance. The Obligors shall also maintain or
cause to be maintained with respect to the Project business interruption
insurance on an "all risk" basis as set forth in (i) above, in an amount
equal to satisfy policy coinsurance conditions, but not less than the sum
of 18 months debt service and continuing expenses. The Obligors shall also
maintain or cause to be maintained, expediting or extra expense coverage in
an amount not less than $2,000,000. The Obligors shall also maintain or
cause to be maintained with respect to the Project contingent business
interruption insurance on a blanket basis in an amount not less than six
months debt service and continuing expenses and profits if not included in
the business interruption.
(k) Such other or additional insurance as may be required pursuant to
Section 7.9(e) of the Master Agreement.
2. All insurance coverage protecting physical assets of the Project shall be
on a replacement cost basis with no coinsurance penalties and in such form
(including the form of the loss payable clauses) as shall be acceptable to the
Administrative Agent after consultation with the Majority Lenders (which
acceptance shall not be unreasonably withheld). The Project Company shall make
available all polices received pursuant to the requirements of this Appendix B
to the Administrative Agent for the review and approval of the Majority Lenders
upon written request of the Administrative Agent.
3. All policies covering real or personal property or business interruption
shall name the Collateral Agent as First Loss Payee in accordance with Lender's
Loss Payable Endorsement 438 BFU or equivalent. Upon payment and satisfaction of
all of the Obligors' obligations under, and termination of, the Financing
Documents, the Administrative Agent will instruct the insurers to name the
Project Company, or such successor credit provider or other Person as the
Project Company shall specify, as loss payee. All policies covering real or
personal property or business interruption shall insure the interests of the
Collateral Agent and the Lenders regardless of any breach or violation by the
Project Company or any other Person of warranties, declarations or conditions
contained in such policies, or any action or inaction of the Obligors or others.
Each policy shall expressly provide that all provisions thereof, except the
limits of liability (which shall be applicable to all insureds as a group) and
liability for premiums (which shall be solely a liability of the Obligors) shall
operate in the same manner as if there were a separate policy covering each such
insured. Each policy shall provide a waiver of subrogation against the
Administrative Agent, the Collateral Agent any of the Lenders or the Obligors
and shall waive any right of the insurers to any setoff or counterclaim or any
other deduction, whether by attachment or otherwise, in respect of any liability
of the Obligors or the Lenders. Each such policy shall provide that if any
premium or installment is not paid when due, or if such insurance is to be
cancelled, terminated or materially changed wherein coverage would be in
conflict with the insurance provisions set forth herein, the insurers (or their
representatives) will promptly notify the Project Company, the Administrative
Agent and all named insureds, and any such cancellation, termination or change
shall not be effective until 60 days (except 10 days for non payment of premium)
after receipt of such notice by the Administrative Agent.
4. In the event that the Project Company fails to respond in a timely and
appropriate manner (as reasonably determined by the Administrative Agent) to
take any steps necessary or reasonably requested by the Administrative Agent to
collect from any insurers for any loss covered by any insurance required to be
maintained by this Appendix B, the Collateral Agent shall have the right to make
all proofs of loss, adjust all claims and/or receive all or any part of the
proceeds of the foregoing insurance policies, either in its own name or the name
of the Project Company; PROVIDED, however, that the Project Company shall, upon
the Administrative Agent's request and at the Project Company's own cost and
expense, make all proofs of loss and take all other steps necessary or
reasonably requested by the Administrative Agent to collect from insurers for
any loss covered by any insurance required to be obtained by this Appendix B.
5. On or before the date of Closing Date and thereafter on each anniversary of
the policy renewals, the Project Company shall furnish to the Administrative
Agent, a certificate of insurance showing the insurance then maintained by or on
behalf of the Project Company pursuant to this Appendix B and stating that such
insurance complies in all material aspects with the terms hereof, together with
evidence of payment of the premiums thereon. In the event that at any time the
insurance as herein provided shall be reduced or cease to be maintained, then
(without limiting the rights of the Administrative Agent or any Secured Party
hereunder in respect of the Event of Default which arises as a result of such
failure) the Administrative Agent may at its option maintain the insurance
required hereby and, in such event, the Project Company shall reimburse the
Administrative Agent upon demand for the cost thereof together with interest
thereon at a rate per annum equal to the Default Rate, but in no event shall the
rate of interest exceed the maximum rate permitted by law.
6. In the event any insurance (including the limits or deductibles thereof)
hereby required to be maintained, other than insurance required by law to be
maintained shall not be available on commercially reasonable terms in the
commercial insurance market, the Administrative Agent, after consultation with
the Insurance Consultant, shall not unreasonably withhold its agreement to waive
such requirement to the extent the maintenance thereof is not so available;
PROVIDED, however, that the Project Company shall first request any such waiver
in writing, explaining in detail the basis for such conclusions. At any time
after the granting of any such waiver, the Administrative Agent may request, and
the Project Company shall furnish to the Administrative Agent within 15 days
after such request, supplemental reports reasonably acceptable to the
Administrative Agent. Any such waiver shall be effective only so long as such
insurance shall not be available on commercially reasonable terms in the
commercial insurance market; however, the waiver shall not extend beyond the
next anniversary of the insurance coverage without the Administrative Agent's
approval.
7. In the event that any policy is written on a "claims-made" basis and such
policy is not renewed or the retroactive date of such policy is to be changed,
the Project Company shall obtain for each such policy or policies the broadest
basic and supplemental extended reporting period coverage or "tail" reasonably
available in the commercial insurance market for each such policy or policies
and shall provide the Administrative Agent with proof that such basic and
supplemental extended reporting period coverage or "tail" has been obtained.
8. The Contractor and its subcontractors shall, prior to the Closing Date,
supply proper evidence of insurance as set forth in paragraphs 1(a), 1(b), and
1(c). above. Such insurance, with the exception of workers compensation,
supplied by these parties shall:
(i) add Project Company, the Collateral Agent and the Lenders, as additional
insureds;
(ii) be primary as respects insurance provided by Project Company and the
Collateral Agent;
(iii) waive rights of subrogation against the Project Company and the Collateral
Agent;
(iv) continue in force until obligations of the Contractor and its
subcontractor are fulfilled.
Contractor and its subcontractors shall be responsible for tools and equipment
brought onto the Project Site unless such tools and equipment are financed by
the Project Company; all such financed tools and equipment shall be covered
under the builders risk policy. The requirements of this Section 8 may be
satisfied by implementation of an Owner Controlled Insurance Program (OCIP) with
limits, terms and conditions are required in this Section 8.
9. If there is any inconsistency between this Appendix B and Section 7.9 of
the Master Agreement, the provisions of this Appendix B shall prevail.
APPENDIX C
MAJOR PROJECT DOCUMENTS
- --------------------------------------- ----------------------------------------- ----------------------
DOCUMENT PARTIES DATE
- --------------------------------------- ----------------------------------------- ----------------------
EPC Contract The Project Company and the Contractor January 1, 2000
- --------------------------------------- ----------------------------------------- ----------------------
Fluor Guarantee The Project Company and Fluor January 1, 2000
Corporation
- --------------------------------------- ----------------------------------------- ----------------------
Duke Guarantee The Project Company and Duke Capital January 1, 2000
Corporation
- --------------------------------------- ----------------------------------------- ----------------------
Tolling Agreement PGET and the Project Company April 14, 2000
- --------------------------------------- ----------------------------------------- ----------------------
PGET Guarantee PG&E and the Project Company April 24, 2000
- --------------------------------------- ----------------------------------------- ----------------------
O&M Agreement Project Company and the Operator May 25, 2000
- --------------------------------------- ----------------------------------------- ----------------------
PECO Interconnection Agreement The Project Company and PECO Energy July 19, 2000
Corp.
- --------------------------------------- ----------------------------------------- ----------------------
PECO Interconnection Construction The Project Company and PECO Energy July 31, 2000
Agreement Corp.
- --------------------------------------- ----------------------------------------- ----------------------
Conectiv Interconnection Construction The Project Company and Conectiv Post Closing
Agreement
- --------------------------------------- ----------------------------------------- ----------------------
Water Supply Agreement The Borrower and the Philadelphia July 6, 2000
Suburban Water Company
- --------------------------------------- ----------------------------------------- ----------------------
Precedent Agreement PGET, the Project Company and TETCO May 16, 2000
- --------------------------------------- ----------------------------------------- ----------------------
Gas Transportation Agreements (4) Each between PGET, TETCO and the Each dated May 16,
Project Company 2000
- --------------------------------------- ----------------------------------------- ----------------------
Management Services Agreement The Project Company and the Borrower July 12, 2000
- --------------------------------------- ----------------------------------------- ----------------------
Merrill Creek Assignment The Project Company and Delmarva Power June 20, 2000
& Light Company
- --------------------------------------- ----------------------------------------- ----------------------
PJM Interconnection Service Agreement The Project Company and Post Closing
PJM Interconnection, L.L.C.
- --------------------------------------- ----------------------------------------- ----------------------
SCHEDULE 6.3
CAPITALIZATION
BORROWER CAPITALIZATION
- ----------------------------- ----------------------------------- --------- ------------------ --------------
NAME OF MEMBER ADDRESS UNITS MEMBERSHIP CERTIFICATE
INTEREST NUMBER
- ----------------------------- ----------------------------------- --------- ------------------ --------------
COLUMBIA ELECTRIC LIBERTY 222 DELAWARE AVENUE, SUITE 1442, 49 49% 1
MEMBER CORPORATION WILMINGTON, DE 19801
- ----------------------------- ----------------------------------- --------- ------------------ --------------
COLUMBIA ELECTRIC MEMBER II 222 DELAWARE AVENUE, SUITE 1442, 49 49% 2
CORPORATION WILMINGTON, DE 19801
- ----------------------------- ----------------------------------- --------- ------------------ --------------
COLUMBIA ELECTRIC LIBERTY 222 DELAWARE AVENUE, SUITE 1442, 1 1% 3
CORPORATION WILMINGTON, DE 19801
- ----------------------------- ----------------------------------- --------- ------------------ --------------
COLUMBIA ELECTRIC LIBERTY 222 DELAWARE AVENUE, SUITE 1442, 1 1% 4
II CORPORATION WILMINGTON, DE 19801
- ----------------------------- ----------------------------------- --------- ------------------ --------------
PROJECT COMPANY CAPITALIZATION
- ------------------------------- ----------------------------------- --------- ---------------- ----------------
NAME OF MEMBER ADDRESS UNITS MEMBERSHIP CERTIFICATE
INTEREST NUMBER
- ------------------------------- ----------------------------------- --------- ---------------- ----------------
LIBERTY ELECTRIC, PA, LLC 222 DELAWARE AVENUE, SUITE 1452, 100 100% 1
WILMINGTON, DE 19801
- ------------------------------- ----------------------------------- --------- ---------------- ----------------
SCHEDULE 6.5
(A) MATERIAL GOVERNMENTAL APPROVALS OBTAINED ON OR PRIOR TO THE CLOSING DATE:
1. Federal Energy Regulatory Commission ("FERC"), Determination of Exempt
Wholesale Generator Status, Letter Approval (12/28/99), supplemented by
letter dated July 19, 2000 from LeBoeuf, Lamb, Greene & MacRae, L.L.P.
respecting certain changes of indirect ownership of Liberty Electric Power,
LLC which do not affect Exempt Wholesale Generator Status;
2. U.S. Department of Energy, Office of Fossil Energy, Fuel Use Act; Notice of
Self-Certification, Docket FEC&E99-28, 65 Fed. Reg. 1620 (1/11/00);
3. Federal Aviation Administration ("FAA"), Determination of No Hazard to Air
Navigation;
4. U.S. Army Corps of Engineers, finding of non-applicability;
5. Pennsylvania Department of Transportation ("PennDOT"), Bureau of Aviation
(finding that the proposed power plant stacks are not an obstruction);
6. PennDOT, Highway Occupancy Permit;
7. PennDOT, Traffic Signal Modification;
8. Pennsylvania Department of Environmental Protection ("PADEP") NPDES Permit
for Storm Water Discharges Associated with Construction Activities, issued
by Delaware County Conservation District ("DCCD");
9. PADEP NPDES General Permit for Storm Water Discharges (for
construction/repair of existing 24" pipe for stormwater discharge)(issued
by DCCD);
10. DCCD, Soil Erosion and Sediment Control Approval;
11. PADEP Air Quality Plan Approval;
12. PADEP Act 2 Approval;
13. Pennsylvania Historical and Museum Commission, Section 106 Approval;
14. DELCORA Permit for Industrial Waste Water Discharges;
15. Delaware River Basin Commission ("DRBC") Approval of Independent Power
Plant Consumptive Use (pursuant to Section 3.8 of DRBC Regulations);
16. Eddystone Borough, Preliminary and Final Land Development Approval for
Power Plant (Resolution 18, 2/14/00);
17. PADEP Sewage Planning Module Exemption;
18. PADEP Coastal Zone Management Approval;
19. U.S. Department of the Interior, Fish and Wildlife Service, Endangered
Species Act Approval;
20. Pennsylvania Department of Conservation and Natural Resources, Approval
Pursuant to the Pennsylvania Natural Diversity Inventory Information
System;
21. Pennsylvania Game Commission, Approval Relating to Impacts on State
Endangered or Threatened Species of Birds or Mammals and State Game Lands;
and
22. Pennsylvania Fish and Boat Commission, Approval Regarding Rare, Candidate,
Threatened, and Endangered Species.
(B) MATERIAL GOVERNMENTAL APPROVALS WHICH ARE NOT REQUIRED AS AT THE CLOSING
DATE, BUT WHICH ARE EXPECTED TO BE OBTAINED IN THE FUTURE:
1. PADEP Title V Operating Permit;
2. PADEP Title IV Acid Rain Permit;
3. PADEP, General NPDES Permit for Storm Water Discharges (for operation);
4. PADEP, Registration/Approvals relating to Storage Tanks;
5. Pennsylvania Department of Labor and Industry, Building Permits;
6. Eddystone Borough, Building Permits;
7. Eddystone Borough (Fire Department) Approval for Manufacturing, Handling,
Storing, Explosives, Hazardous Chemicals and Materials;
8. Eddystone Borough, Certificate of Occupancy; and
9. Authorization to sell electric energy at market-based rates and grant of
waivers of or blanket authorizations under certain regulations implementing
the Federal Power Act.
EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE
1. Reference is made herein to the Master Agreement, dated as of July 31, 2000,
between Liberty Electric PA LLC, Liberty Electric Power, LLC, the Lenders named
thereto and the Chase Manhattan Bank, as Administrative Agent (the MASTER
AGREEMENT). Capitalized terms used herein but not defined herein shall have the
respective meanings assigned thereto in the Master Agreement, whether
specifically set forth therein or by reference to another document.
2. The Assignor named on the reverse hereof hereby sells and assigns, without
recourse, to the Assignee named on the reverse hereof, and the Assignee hereby
purchases and assumes, without recourse, from the Assignor, effective as of the
Assignment Date set forth on the reverse hereof, the interests set forth on the
reverse hereof (the ASSIGNED INTEREST) in the Assignor's rights and obligations
under the Master Agreement and the [Credit Agreement]/[Note Purchase
Agreement]1, including the interests set forth on the reverse hereof in the
Commitments or Loans of the Assignor on the Assignment Date [and the
participations in Letters of Credit and LC Disbursements held by the Assignor on
the Assignment Date]2, together with unpaid interest accrued on the assigned
Commitments or Loans to the Assignment Date and the amount, if any, set forth on
the reverse hereof of the fees accrued to the Assignment Date for the account of
the Assignor. The Assignee hereby acknowledges receipt of a copy of the Master
Agreement and the other Financing Documents.
3. [The Assignee confirms that it notified the Borrower of the source to be used
by such Assignee in connection with the purchase of the Assigned Interest set
forth hereto (which source shall be one or more of the sources listed in Section
5.2 of the Note Purchase Agreement) and to the extent that such source is of the
type referred to in Section 5.2(f) of the Note Purchase Agreement, has received
confirmation from the Borrower that such assignment will not constitute a
non-exempt "prohibited transaction" under Section 406 of ERISA or in connection
with which a tax could be imposed pursuant to Section 4975(a) of the Code by
reason of a transaction described in Section 4975(c)(1)(A) through (D) of the
Code.]3
4. From and after the Assignment Date (i) the Assignee shall be a party to and
be bound by the provisions of the Master Agreement, the Intercreditor Agreement
and the [Credit Agreement]/[Note Purchase Agreement]4 and, to the extent of the
interests assigned by this Assignment and Acceptance, have the rights and
obligations of a Lender under the Financing Documents and (ii) the Assignor
shall, to the extent of the interests assigned by this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Master Agreement, the Intercreditor Agreement the [Credit Agreement]/[Note
Purchase Agreement]5 and the other Financing Documents.
5. This Assignment and Acceptance is being delivered to the Administrative Agent
together with [(i) if the Assignee is a Foreign Lender, any documentation
required to be delivered by the Assignee pursuant to Section 2.14(e) of the
Credit Agreement, duly completed and executed by the Assignee, and (ii)]6 if the
Assignee is not already a Lender under the Master Agreement, an Administrative
Questionnaire in the form supplied by the Administrative Agent, duly completed
by the Assignee. [In addition, the Assignee shall pay the fee payable to the
Administrative Agent pursuant to Section 3.03(a) of the Credit Agreement.]7
6. [The Assignee represents and warrants that it is an "accredited investor" as
the term is defined in Rule 501(a) promulgated under the Securities Act of 1933
as amended.]8
___________________
1 Insert as appropriate.
2 Insert for Bank Lender Assignment
3 Insert for Institutional Lender Assignment
4 Insert as appropriate
5 Insert as appropriate
6 Insert for Bank Lender Assignment
7 Insert for Bank Lender Assignment
8 To be inserted for an Institutional Lender consent
7. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
Date of Assignment: [insert information]
Legal Name of Assignor: [insert information]
Legal Name of Assignee: [insert information]
Assignee's Address for Notices: [insert information]
Effective Date of Assignment: [insert information] (the ASSIGNMENT DATE)1:
Principal Amount Assigned: [insert information]
Commitment Assigned: [insert information]
Fees Assigned (if any): [insert information]
Percentage Assigned of Facility/Commitment: [insert information]2
The terms set forth above and on the reverse side hereof are hereby agreed to:
[NAME OF ASSIGNOR], as Assignor
By:_________________________
Name:
Title:
[NAME OF ASSIGNEE], as Assignee
By:_________________________
Name:
Title:
[The undersigned hereby consent to the within assignment:]3
LIBERTY ELECTRIC PA, LLC
By Columbia Electric Liberty Corporation,
Member Manager
By:_________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:_________________________
Name:
Title:
[THE CHASE MANHATTAN BANK,]
as Issuing Bank
By:_________________________
Name:
Title:]
[Acknowledged with respect to the third paragraph of this certificate:]4
LIBERTY ELECTRIC PA, LLC
By Columbia Electric Liberty Corporation,
Member Manager
By:_________________________
Name:
Title:
_______________________
1 Must be at least five Business Days after execution hereof by all
required parties.
2 Set forth to at least 8 decimals, as a percentage of the Facility and the
aggregate Commitments of all Lenders thereunder.
3 Consents to be included to the extent required by Section 3.03(a) of the
Credit Agreement or Section 3.1 of the Note Purchase Agreement.
4 To be included for an assignment by a Institutional Lender.
EXHIBIT B
FORM OF CONSENT AND AGREEMENT
CONSENT AND AGREEMENT (this CONSENT AND AGREEMENT) dated as of [________] [__],
200[_] between [_________], a [_________] [corporation/limited liability
company/partnership] (the CONTRACTING PARTY), LIBERTY ELECTRIC POWER, LLC, a
Delaware limited liability company (the PROJECT COMPANY) and THE CHASE MANHATTAN
BANK, as Collateral Agent for the Secured Parties referred to herein (the
COLLATERAL AGENT).
RECITALS
WHEREAS, the Project Company [is developing/is the owner of] a 568 megawatt (MW)
combined cycle gas-fueled electric generating plant in the Borough of Eddystone,
Delaware County, Pennsylvania, and having certain site improvements and related
gas and interconnection facilities and upgrades [performed] (the PROJECT);
WHEREAS, the lenders (the LENDERS, and together with the Collateral Agent, the
SECURED PARTIES) under the master agreement dated July [__], 2000 between the
Project Company and Liberty Electric Power PA, LLC, a Delaware limited liability
company (the BORROWER) [intend to lend/ have lent] certain monies relating to
the financing of the Project. It is a requirement under such master agreement
that the Contracting Party execute and deliver this Consent and Agreement for
the benefit of the Lenders and the other Secured Parties.
NOW THEREFORE, the parties hereto do hereby agree as follows:
CONSENT TO ASSIGNMENT
1. The Project Company hereby gives notice to the Contracting Party of the
collateral assignment (the ASSIGNMENT) of the [INSERT NAME OF ASSIGNED
AGREEMENT(S)] dated [_______] between the Project Company and the Contracting
Party (the ASSIGNED AGREEMENT) pursuant to the terms and provisions of a
security agreement (the SECURITY AGREEMENT) between the Project Company and the
Collateral Agent and the Contracting Party hereby acknowledges receipt of such
notice and consents to the Assignment. The Contracting Party acknowledges and
confirms that it has not received notice of any other collateral assignment by
the Project Company to any other person of any of its right, title or interest
under the Assigned Agreement.
REPRESENTATIONS AND WARRANTIES
2. The Contracting Party hereby represents and warrants to the Collateral Agent
for the benefit of the Secured Parties that:
(a) EXISTENCE. The Contracting Party is a [corporation/limited liability
company/partnership/limited liability partnership] duly [organized/formed],
validly existing and in good standing under the laws of the State of
[_______]. The Contracting Party is duly qualified to do business and is in
good standing in all jurisdictions where necessary in light of the business
it conducts and the property it owns and intends to conduct and own and in
light of the transactions contemplated by this Consent and Agreement and
the Assigned Agreement. No filing, recording, publishing or other act that
has not been made or done is necessary or desirable in connection with the
existence or good standing of the Contracting Party or the conduct of its
business.
(b) CORPORATE AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY. The
Contracting Party has all necessary [corporate/partnership] power,
authority and legal right to own or hold under lease its property, to
transact the business in which it is engaged or presently proposes to
engage and to execute, deliver and perform its obligations hereunder and
under the Assigned Agreement. The execution, delivery and performance by
the Contracting Party of this Consent and Agreement and the Assigned
Agreement and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate and
[shareholder/member] action on its part. This Consent and Agreement and the
Assigned Agreement each has been duly and validly executed and delivered by
the Contracting Party and constitute the legal, valid and binding
obligations of the Contracting Party enforceable against the Contracting
Party in accordance with their respective terms (except as the
enforceability thereof may be limited by (a) applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of
creditor's rights generally and (b) the application of general principles
of equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity)).
(c) NO BREACH. The execution, delivery and performance by the Contracting Party
of this Consent and Agreement and the Assigned Agreement do not and will
not:
(i) require any consent or approval of the [board of directors/management
committee] or any [shareholder/member] of the Contracting Party or of
any other person which has not been obtained and each such consent or
approval that has been obtained is in full force and effect;
(ii) violate any provision of any law, rule, regulation, order, writ,
judgment, decree, determination or award having applicability to the
Contracting Party or any provision of the certificate of
[incorporation/formation], the [articles of incorporation, bylaws/
limited liability agreement/partnership agreement] or any resolution
of the [board of directors/partners] of the Contracting Party;
(iii) conflict with, result in a breach of or constitute a default under
any provision of the certificate of [incorporation/formation], the
[bylaws/limited liability agreement/partnership agreement] or any
resolution of the [board of directors/partners] of the Contracting
Party or any indenture or loan or credit agreement or any other
agreement, lease or instrument to which the Contracting Party is a
party or by which the Contracting Party or its properties are bound or
affected; or
(iv) result in, or require the creation or imposition of, any lien upon or
with respect to any of the properties of the Contracting Party now
owned or hereafter acquired.
(d) GOVERNMENTAL APPROVALS. All governmental approvals required to be obtained
under the applicable laws of any governmental body in connection with the
due execution and delivery by the Contracting Party of this Consent and
Agreement and the Assigned Agreement and the performance by the Contracting
Party of its obligations hereunder and thereunder have been duly obtained
or made, were validly issued, are in full force and effect, are final and
not subject to appeal or renewal, are held in the name of the Contracting
Party and are free from conditions or requirements, the compliance with
which could reasonably be expected to have a material adverse effect on the
Project or the business operations or condition (financial or otherwise),
of the Contracting Party or the ability of the Contracting Party to perform
its obligations hereunder or under the Assigned Agreement (a MATERIAL
ADVERSE EFFECT).
(e) NO DEFAULT. The Contracting Party is not in default under any material
covenant or obligation of the Assigned Agreement and no such default has
occurred prior to the date hereof. To the best knowledge of the Contracting
Party, the Project Company is not in default under any material covenant or
obligation of the Assigned Agreement and no such default has occurred prior
to the date hereof. After giving effect to the Assignment, and after giving
effect to the acknowledgment of and consent to such assignment by the
Contracting Party hereunder, there exists no event or condition which would
constitute a default or which would, with the giving of notice or lapse of
time or both, constitute a default under the Assigned Agreement. The
Contracting Party and the Project Company have complied with all conditions
precedent to the effectiveness of the Assigned Agreement.
(f) FINANCIAL CONDITION. The Contracting Party has delivered to the Collateral
Agent on behalf of the Secured Parties copies of the financial statements
of the Contracting Party listed on Schedule 1 hereto. All of said financial
statements fairly present in all material respects the consolidated
financial position of the Contracting Party as of the respective dates
specified in such Schedule and the consolidated results of operations and
cash flows for the respective periods so specified and have been prepared
in accordance with GAAP consistently applied throughout the periods
involved except as set forth in the notes thereto (subject, in the case of
any interim financial statements, to normal year-end adjustments). Since
[INSERT DATE OF MOST RECENT FINANCIAL STATEMENT], there have been no
changes in the financial condition, operations, business, properties,
profits or prospects of the Contracting Party which could, individually or
in the aggregate, have a Material Adverse Effect.
(g) ENTIRE AGREEMENT. This Consent and Agreement and the Assigned Agreement
constitute and include all agreements entered into by the Contracting Party
with the Project Company relating to, and required for the consummation of,
the transactions contemplated by this Consent and Agreement and the
Assigned Agreement.
(h) ACCURACY OF INFORMATION. Each of the representations and warranties made by
the Contracting Party in the Assigned Agreement are (i) incorporated herein
by reference as fully and to the same extent as if set forth herein in
their entirety, (ii) true and correct with the same force and effect as if
made by the Contracting Party and (iii) made for the express benefit of the
Secured Parties.
CONSENT AND AGREEMENT
3. The Contracting Party hereby acknowledges and agrees that:
(a) EXERCISE OF RIGHTS. Upon notice to the Contracting Party and the Project
Company, the Collateral Agent shall be entitled to exercise any and all
rights of the Project Company under the Assigned Agreement (as such rights
have been purported to be assigned pursuant to the Security Agreement) in
accordance with its terms and the Contracting Party shall comply in all
respects with such exercise. Without limiting the generality of the
foregoing, the Collateral Agent shall have (as such rights have been
purported to be assigned pursuant to the Security Agreement) the full right
and power to enforce directly against the Contracting Party all obligations
of the Contracting Party under the Assigned Agreement and otherwise to
exercise all remedies thereunder and to make all demands and give all
notices and make all requests required or permitted to be made by the
Project Company under the Assigned Agreement. The Contracting Party's
performance of its obligations under the Assigned Agreement after the
Collateral Agent's exercise of such rights shall fulfil the Contracting
Party's obligations thereunder to the Project Company.
(b) CHANGES TO ASSIGNED AGREEMENT. For so long as any loan made by any Lender
to the Borrower relating to the financing of the Project (the LOAN) is
outstanding, the Contracting Party will not, without the prior written
consent of the Collateral Agent, take any action to:
(i) cancel or terminate, or suspend performance under, the Assigned
Agreement or exercise any of its rights set forth in the Assigned
Agreement to cancel or terminate, or suspend performance under,
the Assigned Agreement, unless such cancellation, termination or
suspension is expressly provided for in the Assigned Agreement
and, in the case of any such cancellation, termination or
suspension resulting from a default by the Project Company, the
Contracting Party has first delivered to the Collateral Agent
written notice stating that it intends to exercise such right on
a date not less than 90 days (or, in the case of a payment
default, 45 days) after the date of such notice, specifying the
nature of the default (and sufficient details to enable the
Collateral Agent to assess the scope and amount of any liability
of the Project Company resulting therefrom) giving rise to such
right (and, in the case of a payment default, specifying the
amount thereof) and permitting the Collateral Agent to cure such
default by making or causing to be made a payment in the amount
in default or by performing or causing to be performed the
obligation in default, as the case may be;
(ii) consent to or accept any cancellation, termination or suspension
of the Assigned Agreement by the Project Company unless the
notice of cancellation, termination or suspension delivered by
the Project Company under the Assigned Agreement (such notice, a
TERMINATION NOTICE) is accompanied by a notice from the
Collateral Agent confirming its acceptance of such cancellation,
termination or suspension, and, in the event that the Termination
Notice is not accompanied by such notice, the Contracting Party
shall not treat the Assigned Agreement as cancelled, terminated
or suspended; PROVIDED that, in the event that the Assigned
Agreement is cancelled or terminated prior to its scheduled
termination date without such authorization by the Collateral
Agent, the Contracting Party shall use its best efforts promptly
to submit to the Collateral Agent in draft form for approval an
agreement, on identical terms to the cancelled or terminated
agreement, constituting a replacement of the Assigned Agreement
so cancelled or terminated and, upon approval by the Collateral
Agent of such draft form of agreement, use its best efforts
promptly to enter into such agreement; PROVIDED, FURTHER, that
the Contracting Party's obligations under the immediately
preceding proviso shall not be in derogation or limitation of the
Contracting Party's other obligations under this Section 3(b)(ii)
or in any way limit or impair the rights or remedies of the
Secured Parties under any document relating to the financing of
the Project directly or indirectly arising out of the termination
or cancellation of the Assigned Agreement;
(iii) amend, supplement, modify or in any way vary or agree to any
variation of any material provision of the Assigned Agreement; or
(iv) sell, assign or otherwise dispose of (by operation of law or
otherwise) any part of its interest in or obligations under the
Assigned Agreement (except as expressly provided therein) or this
Consent and Agreement.
In furtherance of the foregoing Section 3(b)(i), the Contracting Party agrees
that upon the occurrence of a default under the Assigned Agreement that cannot
by its nature be cured by the payment of money, the Contracting Party will not
cancel or terminate the Assigned Agreement if, and for so long as, the
Collateral Agent shall be diligently seeking to cure such default or otherwise
to institute foreclosure proceedings, or otherwise to acquire the Project
Company's interest in the Assigned Agreement, and the Contracting Party shall
grant the Collateral Agent a reasonable period of time to cure such default upon
the occurrence of such foreclosure or acquisition; PROVIDED that the Contracting
Party shall not terminate the Assigned Agreement solely by reason of the
bankruptcy or insolvency of the Project Company if the Collateral Agent or its
designee succeeds, is attempting to so succeed, or is prohibited from so
succeeding, to the Project Company's interest under the Assigned Agreement,
whether by foreclosure or otherwise.
(c) ASSUMPTION.
(i) If the Collateral Agent or its designee succeeds to the Project
Company's interest under the Assigned Agreement, whether by
foreclosure or otherwise, the Collateral Agent or its designee shall
assume liability for all of the Project Company's obligations under
the Assigned Agreement; PROVIDED that such liability shall not include
any liability for claims of the Contracting Party against the Project
Company arising from the Project Company's acts or omissions during
the period prior to the Collateral Agent's or such designee's
succession to the Project Company's interest in the Assigned
Agreement. Except as stated in the immediately preceding sentence,
neither the Collateral Agent nor any other Secured Party shall be
liable for the performance or observance of any of the obligations or
duties of the Project Company under the Assigned Agreement and the
assignment of the Assigned Agreement by the Project Company to the
Collateral Agent pursuant to the Security Agreement shall not give
rise to any duties or obligations whatsoever on the part of the
Collateral Agent or any other Secured Party.
(ii) Upon the exercise by the Collateral Agent of any of the remedies set
forth in the Security Agreement, the Collateral Agent may assign its
rights and interests and the rights and interests of the Project
Company under the Assigned Agreement to any purchaser or transferee of
any part of the Project, and such purchaser or transferee shall assume
liability for all of the Project Company's obligations under the
Assigned Agreement; PROVIDED that such liability shall not include any
liability for claims of the Contracting Party against the Project
Company arising from the Project Company's acts or omissions during
the period prior to such assignment.
(d) REJECTION IN BANKRUPTCY. In the event that (i) the Assigned Agreement is
rejected by a trustee or debtor-in-possession in any bankruptcy or
insolvency proceeding involving the Project Company (such proceeding, a
BANKRUPTCY PROCEEDING) or (ii) the Assigned Agreement is terminated as a
result of any Bankruptcy Proceeding and, if within 120 days after such
rejection or termination, the Collateral Agent or its designee(s) shall
request and certify in writing to the Contracting Party that it intends to
perform the obligations of the Project Company as and to the extent
required under the Assigned Agreement, the Contracting Party shall execute
and deliver to the Collateral Agent or such designee(s) such new Assigned
Agreement which shall be for the balance of the remaining term under the
original Assigned Agreement before giving effect to such rejection or
termination and shall contain the same conditions, agreements, terms,
provisions and limitations as the original Assigned Agreement (except for
any requirements which have been fulfilled by the Project Company and the
Contracting Party prior to such rejection or termination). References in
this Consent and Agreement to any "Assigned Agreement" shall be deemed also
to refer to such new Assigned Agreement.
(e) LIMITATION OF LIABILITY. In the event that the Collateral Agent or its
designee(s), or any purchaser, transferee, grantee or assignee of the
interests of the Collateral Agent or its designee(s) in the Project (any
such person, an ASSUMING PARTY), assumes any liability under the Assigned
Agreement (as contemplated in Section 3(c) or 3(d) hereof or otherwise),
liability and recourse in respect of any and all obligations of any such
Assuming Party under the Assigned Agreement shall be limited solely to such
Assuming Party's interest in the Project (and no officer, director,
employee, shareholder or agent thereof shall have any liability with
respect thereto).
(f) LIABILITY OF SECURED PARTIES. Except to the extent that a Secured Party
shall become an Assuming Party hereunder, none of the Secured Parties shall
be liable for the performance or observance of any of the obligations or
duties of the Project Company under the Assigned Agreement and the
Assignment shall not give rise to any duties or obligations (express or
implied) whatsoever on the part of any of the Secured Parties owing to the
Contracting Party.
(g) NOTICES. For so long as any Loan is outstanding, the Contracting Party
shall deliver to the Collateral Agent at the address set forth on the
signature pages hereof, or at such other address as the Collateral Agent
may designate in writing from time to time to the Contracting Party,
concurrently with the delivery thereof to the Project Company, a copy of
each notice of default given or received by the Contracting Party pursuant
to the Assigned Agreement.
(h) DISPUTE RESOLUTION. The Contracting Party agrees to notify the Collateral
Agent before any exercise of dispute resolution under the Assigned
Agreement and allow the Collateral Agent the right to participate.
OTHER AGREEMENTS
4. FINANCIAL STATEMENTS. For so long as the Assigned Agreement is outstanding,
the Contracting Party will furnish to the Collateral Agent (with sufficient
copies for each of the Lenders):
(a) as soon as available and in any event within 90 days after the end of each
financial year of the Contracting Party, copies of an audited balance sheet
of the Contracting Party as of the end of such fiscal year and of the
related audited statements of income and cash flows of the Contracting
Party for such fiscal year, all prepared in accordance with GAAP and
stating in comparative form the respective audited figures as of the end of
and for the previous fiscal year and accompanied by the unqualified report
thereon of a firm of independent chartered accountants of recognized
national standing; and
(b) as soon as available and in any event within 60 days after the end of the
first three fiscal quarters of each fiscal year of the Contracting Party,
copies of an unaudited balance sheet of the Contracting Party as of the end
of such period and of the related unaudited statements of income and cash
flows of the Contracting Party for such period and for the year to date,
all prepared in accordance with GAAP and stating in comparative form the
respective figures for corresponding period in the previous fiscal year and
all certified by the chief financial officer, principal accounting officer
or treasurer of the Contracting Party to fairly present the information
contained therein.
To the extent the Contracting Party is a reporting company under the Securities
and Exchange Act of 1934 (the Act) and timely files its 10Q and 10K forms in
compliance with such Act, the provisions set forth above in clauses (a) and (b)
shall not apply.
ARRANGEMENTS REGARDING PAYMENTS
5. For so long as any Loan is outstanding:
(A) METHOD OF PAYMENT. The Contracting Party irrevocably agrees that all
payments to be made by the Contracting Party to the Project Company under
the Assigned Agreement shall be made in immediately available funds,
without deduction, set-off or counterclaim, in lawful money of the United
States, directly to the Chase Manhattan Bank, as Depositary Bank, at its
office at 450 West 33rd Street, 15th Floor, New York, New York, 10001,
Attention: Capital Markets Fiduciary Services - International Project
Finance, or to such other person and/or at such other address as the
Collateral Agent may from time to time specify in writing to the
Contracting Party for application by the Collateral Agent in the manner
contemplated by the Disbursement Agreement, and shall be accompanied by a
notice from the Contracting Party stating that such payments are made under
such Assigned Agreement.
(B) USE OF PROCEEDS; SET OFF. The Contracting Party hereby waives any right to
apply payments to be made by it under the Assigned Agreement in a manner
other than as provided herein and any right to set off against any such
payment.
MISCELLANEOUS
6.(a) NO WAIVER. No failure on the part of the Collateral Agent or any of its
agents to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege hereunder shall operate as a waiver
thereof, and no single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
(b) NOTICES. All notices, requests and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, the Assigned Agreement and this Consent and Agreement) shall be given or
made in writing (including, without limitation, by telex or telecopy, PROVIDED
that any such telex or telecopy communication is promptly followed by a copy
thereof delivered by another method of notice described in this Section 6(b))
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof or, as to any party, at such other
address as shall be designated by such party in a notice to each other party.
Except as otherwise provided in this Consent and Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed notice or a
notice sent by overnight courier, upon receipt, in each case given or addressed
as aforesaid.
(c) AMENDMENT; WAIVER. This Consent and Agreement may be amended or modified
only by an instrument in writing signed by the Contracting Party, Project
Company and the Collateral Agent, and any provision of this Consent and
Agreement may be waived only by a duly executed writing by the party granting
the waiver. Any such amendment, modification or waiver shall be effective only
in the specific instance and for the specified purpose for which it was given.
(d) SUCCESSORS AND ASSIGNS. This Consent and Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of each of the
Contracting Party, the Project Company and the Collateral Agent (PROVIDED,
HOWEVER, that the Contracting Party shall not assign or transfer its rights or
obligations hereunder without the prior written consent of the Collateral
Agent).
(e) COUNTERPARTS. This Consent and Agreement may be executed in any number of
counterparts, all of which when taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Consent and Agreement
by signing any such counterpart. This Consent and Agreement shall become
effective at such time as the Collateral Agent shall have received counterparts
hereof signed by all of the intended parties hereto.
(f) SEVERABILITY. If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible and (ii) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
(g) HEADINGS. Headings appearing herein are used solely for convenience and are
not intended to affect the interpretation of any provision of this Consent and
Agreement.
(h) JURISDICTION AND PROCESS. THE CONTRACTING PARTY AGREES THAT ANY LEGAL ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS CONSENT AND AGREEMENT OR ANY
OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH, OR ANY LEGAL ACTION OR
PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT OBTAINED AGAINST THE
CONTRACTING PARTY, FOR BREACH HEREOF, OR AGAINST ANY OF ITS PROPERTIES, MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK BY ANY SECURED PARTY OR ON BEHALF OF
SUCH SECURED PARTY, AS SUCH SECURED PARTY MAY ELECT, AND THE CONTRACTING PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION
OF SUCH COURTS FOR PURPOSES OF ANY SUCH LEGAL ACTION OR PROCEEDING. THE
CONTRACTING PARTY HEREBY AGREES THAT SERVICE OF PROCESS IN ANY SUCH PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO IT AT ITS ADDRESS
SPECIFIED BELOW ITS NAME ON THE SIGNATURE PAGES HEREOF OR AT SUCH OTHER ADDRESS
OF WHICH EACH LENDER SHALL HAVE BEEN NOTIFIED THERETO. IN ADDITION THE
CONTRACTING PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE
OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS CONSENT AND
AGREEMENT OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH BROUGHT IN THE
COURTS OF THE STATE OF NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
(i) GOVERNING LAW. This Consent and Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.
(j) WAIVER OF JURY TRIAL. The Contracting Party hereby irrevocably waives, to
the fullest extent permitted by law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Consent and Agreement or the
transactions contemplated hereby.
(k) RELIANCE ON AND SURVIVAL OF REPRESENTATIONS. All agreements, representations
and warranties of the Contracting Party herein, in the Assigned Agreement and in
certificates or other instruments delivered pursuant to this Consent and
Agreement shall (i) be deemed to be material and to have been relied upon by the
Collateral Agent, notwithstanding any investigation heretofore or hereafter made
by the Collateral Agent or any Secured Party or on behalf of the Collateral
Agent or any Secured Party and (ii) survive the execution and delivery of this
Consent and Agreement, and shall continue in effect so long as any Loan is
outstanding.
(l) FURTHER ASSURANCE. The Contracting Party and the Project Company shall each
at any time and from time to time upon the reasonable written request of the
Collateral Agent execute and deliver such further documents and do such further
acts and things as the Collateral Agent may occasionally request in order to
effect the purposes of, or any of the transactions contemplated by, this Consent
and Agreement.
IN WITNESS WHEREOF, the undersigned by its officer duly authorized has caused
this Consent and Agreement to be duly executed and delivered as of the day first
above written.
[THE CONTRACTING PARTY]
By: ________________________
Name:
Title:
Address for Notices:
[------------------------------]
[------------------------------]
[------------------------------]
Attention: [__________________]
THE CHASE MANHATTAN BANK,
as Collateral Agent
By:__________________________
Name:
Address for Notices:
450 West 33rd Street, 15th Floor,
New York , New York, 10001,
Attention: Capital Markets Fiduciary Services - International Project Finance
LIBERTY ELECTRIC POWER, LLC
By: ________________________
Name:
Title:
Address for Notices:
222 Delaware Avenue, Suite 1452
Wilmington, DE 19801
Attention: Managing Member
With a copy to:
Columbia Electric Corporation
13880 Dulles Corner Lane
Herndon, CA 20171-4600
Attention: General Counsel
EXHIBIT C-1
OPINION OF COUNSEL TO THE BORROWER
EXHIBIT C-2
OPINION OF PENNSYLVANIA COUNSEL TO THE BORROWER
EXHIBIT C-3
OPINIONS OF COUNSEL TO MAJOR PROJECT PARTIES
EXHIBIT C-4
OPINION OF SPECIAL NEW YORK COUNSEL TO THE LENDERS
EXHIBIT C-5
OPINION OF PENNSYLVANIA COUNSEL TO THE LENDERS
EXHIBIT D
FORM OF INDEPENDENT ENGINEER DRAWDOWN CERTIFICATE
Date: [______________________]
To: The Chase Manhattan Bank,
as Administrative Agent
COPIES TO: Liberty Electric Power, LLC (the PROJECT COMPANY)
The Chase Manhattan Bank, as Collateral Agent
1. Reference is made herein to the Master Agreement dated as of July 31, 2000
between Liberty Electric PA, LLC, Liberty Electric Power, LLC, The Chase
Manhattan Bank, as Administrative Agent and the Lenders named therein.
Capitalized terms used herein but not defined herein shall have the respective
meanings assigned thereto in the Master Agreement, whether specifically set
forth therein or by reference to another document.
2. This Certificate is being delivered to you in connection with a Notice of
Borrowing dated [--------------].
3. The individual executing this Certificate is a duly authorized representative
of the Independent Engineer, authorized to execute and deliver this Certificate
on behalf of the Independent Engineer.
4. The Independent Engineer has received and reviewed the Notice of Borrowing
dated [________] under which the Borrower wishes to make the following drawdowns
under the following Facilities: [ ]1 The Independent Engineer has also received
and reviewed all other information it has requested to enable it to sign this
certificate and has no reason to believe that any such information is untrue,
incorrect or incomplete.
5. The Independent Engineer certifies that to the best of its knowledge, after
due inquiry, the information material to the construction of the Project (and
the construction of the Interconnection Upgrades and the Gas Interconnection
Facilities), contained in each Construction Progress Report delivered pursuant
to Section 7.2(a) of the Master Agreement is true, complete and correct in all
material respects.
6. The Independent Engineer further certifies it has no knowledge of the
existence of any Default or Event of Default which has not been waived or cured.
_______________________
1 List Facilities and drawdown amounts
IN WITNESS WHEREOF the undersigned has executed this Certificate on the date
first above written.
Sincerely,
Black & Veatch Corporation
By________________________
Title:
EXHIBIT E
Form of Conversion Date Certificate
CONVERSION DATE CERTIFICATE
Re: LIBERTY ELECTRIC PA, LLC
[DATE]
Chase Manhattan Bank
Loan and Agency Services
One Chase Plaza
8th Floor
New York, N.Y
Attention: Liberty Project Account Manager;
Ladies and Gentlemen:
Reference is made to the Master Agreement dated as of July 31, 2000 (as amended,
modified and supplemented and in effect from time to time, the MASTER AGREEMENT)
among LIBERTY ELECTRIC PA, LLC, a special purpose limited liability company
incorporated under the laws of the State of Delaware (the BORROWER), LIBERTY
ELECTRIC POWER, LLC, a special purpose limited liability company incorporated
under the laws of the State of Delaware (the PROJECT COMPANY and, collectively
with the Borrower, the OBLIGORS), the LENDERS (as defined in the Master
Agreement), and THE CHASE MANHATTAN BANK, as Administrative Agent (the
ADMINISTRATIVE AGENT). Capitalized terms used herein and not defined herein
shall have the respective definitions assigned to such terms in Appendix A to
the Master Agreement (and the principles of interpretation set forth in Appendix
A to the Master Agreement shall apply to such definitions).
This Conversion Date Certificate is being delivered by the undersigned as
required under Section 5.3(i) of the Master Agreement.
The Obligors hereby certify, that to the best of each Obligor's knowledge, after
due inquiry, and to induce the Lenders and the Secured Parties to take action in
reliance hereon, that:
(a) TRANSACTION DOCUMENTS. At the time of and immediately after giving effect
to the Conversion Date, all Transaction Documents entered into by the
Obligors with Major Project Parties that have continuing obligations are in
full force and effect;
(b) ABSENCE OF DEFAULTS UNDER THE TRANSACTION DOCUMENTS. No default or event of
default by either Obligor has occurred and be continuing under any
Transaction Document and no default or event of default has occurred and be
continuing by any Major Project Company (other than the Obligors) under any
material provision of any Transaction Document, and no Default or Event of
Default has occurred and be continuing;
(c) EVIDENCE OF INSURANCE. All insurance coverages required by or on behalf of
the Obligors under the Master Agreement are in place and are in full force
and effect;
(d) APPROVALS, PERMITS AND LICENSES. All Governmental Approvals (including
those relating to the environment) required under Applicable Law for the
operation of the Project and the execution and performance of all of the
Transaction Documents are in full force and effect, subject to no
conditions (including with respect to renewal) except for conditions that
the Obligors can reasonably expect to be able to satisfy in a timely
manner;
(e) PROJECT COSTS. All Project Costs have been paid or funds have been escrowed
for the payment of remaining Project Costs and no amounts remain credited
to the Tranche B Escrow Account; and
(f) STATUS OF THE PROJECT. The Project has achieved Actual Plant Acceptance and
the Commencement Date or the Early Commencement Date has occurred under the
Tolling Agreement.
Attached to this Conversion Date Certificate is a true and complete copy of the
Acknowledgment of the Independent Engineer delivered in connection with this
Conversion Date Certificate.
The Obligors hereby certify, after due inquiry, that the facts stated by the
Obligors in this Conversion Date Certificate are true and complete.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the date
first written above.
LIBERTY ELECTRIC PA, LLC
By Columbia Electric Liberty Corporation,
Member Manager
By:______________________
Name
Title:
LIBERTY ELECTRIC POWER, LLC
By Liberty Electric PA, LLC
By Columbia Electric Liberty Corporation,
Member Manager
By:______________________
Name
Title:
ACKNOWLEDGMENT
This Acknowledgment is being delivered by the undersigned, BLACK & VEATCH
CORPORATION, a corporation organized under the laws of the State of Missouri, in
connection with the Master Agreement dated as of July 31, 2000 (as amended,
modified and supplemented and in effect from time to time, the MASTER AGREEMENT)
among LIBERTY ELECTRIC PA, LLC, a special purpose limited liability company
incorporated under the laws of the State of Delaware (the BORROWER), LIBERTY
ELECTRIC POWER, LLC, a special purpose limited liability company incorporated
under the laws of the State of Delaware (the PROJECT COMPANY and, collectively
with the Borrower, the OBLIGORS), the LENDERS (as defined in the Master
Agreement), and THE CHASE MANHATTAN BANK, as Administrative Agent (the
ADMINISTRATIVE Agent). Capitalized terms used herein and not defined herein
shall have the respective definitions assigned to such terms in Appendix A to
the Master Agreement (and the principles of interpretation set forth in Appendix
A to the Master Agreement shall apply to such definitions).
BLACK & VEATCH CORPORATION. hereby certifies that it has reviewed the Conversion
Date Certificate dated [_________] and that, to the best of its knowledge (which
knowledge is based upon information provided by the Obligors, the Contractor and
its review conducted in accordance with the scope of its services as Independent
Engineer for the Lenders), the information set forth therein is true and
correct.
BLACK & VEATCH CORPORATION
By:__________________________
Title:
Date: [_______]
EXHIBIT F
FORM OF NOTICE OF BORROWING
Date: [________]
To: To The Chase Manhattan Bank, as Administrative Agent
Copy To: To The Chase Manhattan Bank, as Collateral Agent
LIBERTY ELECTRIC PA, LLC
Ladies and Gentlemen:
1. Reference is made herein to the Master Agreement, dated as of July 31, 2000,
between Liberty Electric PA, LLC, Liberty Electric Power, LLC, the Lenders named
thereto and the Chase Manhattan Bank, as Administrative Agent (the MASTER
AGREEMENT). Capitalized terms used herein but not defined herein shall have the
respective meanings assigned thereto in the Master Agreement, whether
specifically set forth therein or by reference to another document.
2. This Notice of Borrowing is irrevocable and constitutes a request, in
accordance with Section 3.4 of the Master Agreement and [Section 2.1 of the Note
Purchase Agreement]/[Section 2.02 of the Credit Agreement]2 that each Lender
make its Pro Rata Share (as set forth on Annex 1 attached hereto) of the
aggregate [ ]3. The Requested Drawdown Date for the making of the Loans is [ ]4.
3. [FOR LOANS UNDER THE CREDIT AGREEMENT, (I) DESCRIBED WHETHER AN ABR BORROWING
OR A LIBOR BORROWING AND (II) STATE THE INTEREST PERIOD FOR EACH LOAN].5
4. The funds are to be transferred to the following account:
[INSERT INFORMATION]
5. Attached hereto are all certificates and documentation required pursuant to
Section 3.4 of the Master Agreement.
LIBERTY ELECTRIC PA, LLC
By Columbia Electric Liberty Corporation,
Member Manager
By_________________________________
Name:
______________________
2 Insert as appropriate
3 List Facilities and amounts to be drawdown under each such Facility
4 Insert Requested Drawdown Date.
5 Insert for Bank Lender Loans
CONTENTS
CLAUSE PAGE
1. ARTICLE I. DEFINITIONS..................................................1
1.1 Defined Terms....................................................1
2. ARTICLE II. PRELIMINARY MATTERS.........................................1
2.1 The Obligors.....................................................1
2.2 Project..........................................................1
2.3 Tolling Agreement................................................1
2.4 EPC Contract.....................................................1
2.5 O&M Agreement; Management Services Agreement.....................1
2.6 PJM Interconnection Service Agreement; PECO and Conectiv
Interconnection Agreements.......................................1
2.7 Precedent Agreement; Gas Transportation Agreement................1
2.8 Water Supply Agreement...........................................1
2.9 Merrill Creek Reservoir Capacity Assignment......................1
2.10 Bank Facility....................................................1
2.11 Institutional Facility...........................................1
2.12 Intercreditor Agreement..........................................1
2.13 Disbursement Agreement...........................................1
2.14 Security.........................................................1
2.15 Intent of Article 2..............................................1
3. ARTICLE III. LOANS; COMMITMENTS.........................................1
3.1 Loans............................................................1
3.2 Optional Reductions and Cancellations of Commitments.............1
3.3 Mandatory Reduction of Commitments...............................1
3.4 Procedures for Borrowing.........................................1
4. ARTICLE IV. PAYMENTS; PREPAYMENTS.......................................1
4.1 Place and Manner of Payments.....................................1
4.2 Mandatory Prepayments............................................1
4.3 Voluntary Prepayments............................................1
4.4 Allocation.......................................................1
5. ARTICLE V. CONDITIONS...................................................1
5.1 Conditions Precedent to Initial Loans............................1
5.2 Conditions Precedent to Each Loan (including the Initial Loans)
prior to the Conversion Date.....................................1
5.3 Conditions Precedent to Conversion...............................1
5.4 Conditions Precedent to Each Borrowing after the Conversion Date.1
6. ARTICLE VI. REPRESENTATIONS AND WARRANTIES..............................1
6.1 Organization; Powers.............................................1
6.2 Authorization; Enforceability....................................1
6.3 Capitalization...................................................1
6.4 Subsidiaries and Beneficial Interest.............................1
6.5 Governmental Approvals...........................................1
6.6 Financing Documents; Major Project Documents; Non-Material
Project Documents; Licenses......................................1
6.7 Use of Proceeds..................................................1
6.8 No Breach........................................................1
6.9 Title; Security Documents........................................1
6.10 Actions, Suits and Proceedings...................................1
6.11 Environmental Matters............................................1
6.12 Compliance with Applicable Laws..................................1
6.13 Investment Company Act...........................................1
6.14 PUHCA............................................................1
6.15 Taxes............................................................1
6.16 ERISA............................................................1
6.17 Nature of Business...............................................1
6.18 Utility Services.................................................1
6.19 Disclosure.......................................................1
6.20 Private Offerings................................................1
6.21 Fees.............................................................1
6.22 Budgets..........................................................1
7. ARTICLE VII. AFFIRMATIVE COVENANTS......................................1
7.1 Financial Statements and Related Information.....................1
7.2 Construction Reports; Operating Reports; Etc.....................1
7.3 Operating Budget.................................................1
7.4 Notices of Material Events; Environmental Matters................1
7.5 Miscellaneous Notices............................................1
7.6 Existence; Conduct of Business...................................1
7.7 Payment of Obligations and Tax Filings...........................1
7.8 Project Construction; Maintenance of Properties..................1
7.9 Insurance; Event of Loss; Project Document Claims................1
7.10 Books and Records; Inspection Rights; Accounting and
Accounting Matters...............................................1
7.11 Compliance with Laws.............................................1
7.12 Maintenance of Lien..............................................1
7.13 Independent Engineer; Insurance Consultant.......................1
7.14 Security Interest in Newly Acquired Property; Additional Major
Project Documents and Merchant Stage Agreements..................1
7.15 Operating Budget.................................................1
7.16 Major Project Documents; Etc.....................................1
7.17 Rating of the Loans..............................................1
7.18 Power Price Forecast.............................................1
7.19 Energy Management Procedures.....................................1
8. ARTICLE VIII. NEGATIVE COVENANTS........................................1
8.1 Indebtedness.....................................................1
8.2 Liens............................................................1
8.3 Merger, and Consolidation; Disposition of Assets.................1
8.4 Organizational Documents; Fiscal Year; Legal Form................1
8.5 No Other Business................................................1
8.6 Investments......................................................1
8.7 Restricted Payments..............................................1
8.8 Transactions with Affiliates and Non Arms'-Length Dealing........1
8.9 Maintenance of Properties........................................1
8.10 Completion; Performance Tests....................................1
8.11 Major Project Documents; Etc.....................................1
8.12 Public Utility Holding Company Act...............................1
9. ARTICLE IX. EVENTS OF DEFAULT...........................................1
9.1 Events of Default................................................1
10. ARTICLE X. GUARANTEE....................................................1
10.1 The Guarantee....................................................1
10.2 Obligations Unconditional........................................1
10.3 Reinstatement....................................................1
10.4 Subrogation......................................................1
10.5 Remedies.........................................................1
10.6 Instrument for the Payment of Money..............................1
10.7 Continuing Guarantee.............................................1
11. ARTICLE XI. THE AGENT...................................................1
12. ARTICLE XII. MISCELLANEOUS..............................................1
12.1 Notices..........................................................1
12.2 Waivers; Amendments; Consents....................................1
12.3 Expenses; Indemnity; Damage Waiver...............................1
12.4 Successors and Assigns...........................................1
12.5 Governing Law; Jurisdiction; Etc.................................1
12.6 WAIVER OF JURY TRIAL.............................................1
12.7 Limited Recourse.................................................1
12.8 Headings.........................................................1
12.9 Treatment of Certain Information; Confidentiality................1
12.10 Service of Process...............................................1
12.11 Producer Built Facilities........................................1
APPENDIX A Definitions
APPENDIX B Insurance
APPENDIX C Major Project Documents
SCHEDULE 6.3 Capitalization
SCHEDULE 6.5 Governmental Approvals
EXHIBIT A Form of Assignment and Acceptance
EXHIBIT B Form of Consent and Agreement
EXHIBIT C-1 Opinion of Counsel to the Borrower
EXHIBIT C-2 Opinion of Pennsylvania Counsel to the Borrower
EXHIBIT C-3 Opinions of Counsel to Major Project Parties
EXHIBIT C-4 Opinion of Special New York Counsel to the Lenders
EXHIBIT C-5 Opinion of Pennsylvania Counsel to the Lenders
EXHIBIT D Form of Independent Engineer Drawdown Certificate
EXHIBIT E Form of Conversion Date Certificate
EXHIBIT F Form of Notice of Borrowing
Execution Copy
DATED AS OF JULY 31, 2000
LIBERTY ELECTRIC PA, LLC
LIBERTY ELECTRIC POWER, LLC
THE LENDERS PARTY HERETO
AND
THE CHASE MANHATTAN BANK
AS ADMINISTRATIVE AGENT
===============================================================================
MASTER AGREEMENT
===============================================================================
WAIVER NO. 1 TO THE MASTER AGREEMENT dated as of February 6, 2001 between
LIBERTY ELECTRIC PA, LLC, a special purpose limited liability company
incorporated under the laws of the State of Delaware (the BORROWER), LIBERTY
ELECTRIC POWER, LLC, a special purpose limited liability company incorporated
under the laws of the State of Delaware (the PROJECT COMPANY and, collectively
with the Borrower, the OBLIGORS), each of the Lenders signatory to the Master
Agreement referred to below (the LENDERS) and THE CHASE MANHATTAN BANK, as
administrative agent (the ADMINISTRATIVE AGENT).
The Obligors, the Lenders and the Administrative Agent are party to a Master
Agreement dated as of July 31, 2000 (as amended, supplemented and otherwise
modified and in effect immediately prior to the effectiveness of the waiver
contemplated hereby, the MASTER AGREEMENT).
The Obligors have requested that the Lenders agree, and the Lenders party hereto
are willing, to waive certain notice provisions contained in Section 12.2(d) of
the Master Agreement, all on the terms and conditions of this Waiver No. 1.
Accordingly, in consideration of the premises and the mutual agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
DEFINITIONS
1. Terms used but not defined herein shall have the respective meanings
ascribed to such terms in the Master Agreement.
WAIVER
2. With respect to the Decision to approve or reject the proposals requested
by the Administrative Agent in its letter dated January 30, 2001, the Lenders
hereby waive compliance with the provision set forth in Section 12.2(d) of the
Master Agreement requiring the Decision Date to be not less than 10 Business
Days after the date upon which the Administrative Agent has notified the Lenders
of a Decision, PROVIDED that such Decision Date with respect to such proposals
shall be February 6, 2001.
The foregoing waiver shall not be construed as a waiver of (i) any other
provision; or (ii) any provision relating to a Decision made after the date
hereof. Such waiver shall not extend to or affect any obligation not expressly
waived or impair any right consequent thereon.
REPRESENTATIONS AND WARRANTIES
3. Each Obligor represents and warrants to the Lenders that:
(a) This Waiver No. 1 has been duly and validly executed and delivered by such
Obligor and constitutes the Obligor's legal, valid and binding obligation,
enforceable against such Obligor in accordance with its terms.
(b) After giving effect to this Waiver No. 1, (i) no Default or Event of
Default shall have occurred and be continuing; and (ii) the representations
and warranties made by the Obligors in Article 6 of the Master Agreement
are true and correct on and as of the date hereof with the same force and
effect as if made on and as of such date (or, if any such representation or
warranty is expressly stated to have been made as of a specific date, as of
such specific date).
CONDITIONS TO EFFECTIVENESS
4. The waiver provided for in Section 2 hereof shall become effective, as of
the date hereof, upon the execution and delivery of this Waiver No. 1 by
the parties hereto.
DOCUMENTS OTHERWISE UNCHANGED
5. Except as herein provided, the Master Agreement shall remain unchanged and
in full force and effect.
EXPENSES
6. Without limiting its obligations under Section 12.3(a) of the Master
Agreement, the Obligors jointly and severally agree to pay, on demand, all
reasonable out-of-pocket costs and expenses of the Lenders (including the fees
and disbursements of counsel to the Lenders incurred in connection with the
negotiation, preparation, execution and delivery of this Waiver No. 1).
BINDING EFFECT
7. This Waiver No. 1 shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
GOVERNING LAW
8. This Waiver No. 1 shall be governed by, and construed in accordance with,
the law of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver No. 1 to be duly
executed as of the day and year first above written.
LIBERTY ELECTRIC PA, LLC
By Mid Atlantic Liberty Corporation, a Member Manager
By:
Name:
Title:
LIBERTY ELECTRIC POWER, LLC
By Liberty Electric PA, LLC, its sole Member
By Mid Atlantic Liberty Corporation, a Member Manager
By:
Name:
Title:
THE CHASE MANHATTAN BANK
(As Administrative Agent)
By:
Name:
Title:
THE CHASE MANHATTAN BANK
By:
Name:
Title:
LANDESBANK HESSEN-THURINGEN GIROZENTRALE
By:
Title:
BAYERISCHE HYPO-UND VEREINSBANK AG - NEW YORK BRANCH
By:
Title:
BAYERISCHE HYPO-UND VEREINSBANK AG - NEW YORK BRANCH
By:
Title:
THE BANK OF TOKYO-MITSUBISHI, LTD.
NEW YORK BRANCH
By:
Title:
CREDIT AGRICOLE INDOSUEZ
By:
Title:
CREDIT AGRICOLE INDOSUEZ
By:
Title:
THE DAI-ICHI KANGYO BANK, LTD.
By:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
Title:
NORDDEUTSCHE LANDESBANK GIROZENTRALE
NEW YORK/CAYMAN ISLAND BRANCH
By:
Title:
By:
Title:
KBC BANK N.V. (NEW YORK BRANCH)
By:
Title:
KBC BANK N.V. (NEW YORK BRANCH)
By:
Title:
GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
By:
Title:
NEW YORK LIFE INSURANCE COMPANY
By:
Title:
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
By:
Title:
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY (BPF)
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY (RDI)
By: Lincoln Investment Management Inc.
Its Attorney-in-Fact
By:
Title:
AMERICAN GENERAL ANNUITY INSURANCE COMPANY
AMERICAN GENERAL LIFE AND ACCIDENT INSURANCE COMPANY
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By:
Title:
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
By:
Title:
MONUMENTAL LIFE INSURANCE COMPANY
By:
Title:
AMENDMENT NO. 2 TO THE MASTER AGREEMENT dated as of February 6, 2001 between
LIBERTY ELECTRIC PA, LLC, a special purpose limited liability company
incorporated under the laws of the State of Delaware (the Borrower), LIBERTY
ELECTRIC POWER, LLC, a special purpose limited liability company incorporated
under the laws of the State of Delaware (the Project Company and, collectively
with the Borrower, the Obligors), certain Lenders party to the Master Agreement
referred to below (the Lenders) and THE CHASE MANHATTAN BANK, as administrative
agent (the Administrative Agent).
The Obligors, the Lenders and the Administrative Agent are party to a Master
Agreement dated as of July 31, 2000 (as amended, supplemented and otherwise
modified and in effect immediately prior to the effectiveness of the amendments
contemplated hereby, the Master Agreement).
The Obligors have requested that the Lenders agree, and the Lenders party hereto
are willing, to amend the Master Agreement, all on the terms and conditions of
this Amendment.
Accordingly, in consideration of the premises and the mutual agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
DEFINITIONS
1. Terms used but not defined herein shall have the respective meanings
ascribed to such terms in the Master Agreement, as amended hereby. In addition,
as used herein, Amendment Effective Date means the first date on which each of
the conditions to effectiveness set forth in Section 5 shall have been
satisfied.
AMENDMENTS
2. Subject to the satisfaction of the conditions to effectiveness specified in
Section 4 hereof, but with effect on and after the date hereof, the Master
Agreement shall be amended as follows:
(a) Appendix A of the Master Agreement shall be amended by adding the following
new definitions (to the extent not already included in Appendix A) and
inserting the same in the appropriate alphabetic location and amending the
following definitions (to the extent already included in Appendix A), as
follows:
AMENDMENT NO. 1 means the amendment to the Master Agreement pursuant to an
agreement dated as of January 15, 2001 between the Obligors, the Lenders
party thereto and the Administrative Agent.
AMENDMENT NO. 2 Means Amendment No. 2 to the Master Agreement dated as of
February 6, 2001 between the Obligors, the Lenders party thereto, and the
Administrative Agent.
GTN Means PG&E Gas Transmission, Northwest Corporation, a California
corporation.
GTN GUARANTEE Means the guarantee provided by GTN in favor of the Project
Company, guaranteeing the obligations of PGET under the Tolling Agreement.
MAJOR PROJECT PARTY Means the Borrower, the Project Company, each Member,
PGET, GTN, NEG, the Contractor, the Contractor Guarantors, the Operator,
the Transmission Provider, PECO, TETCO, PSW, and each Person party to a
Major Project Document, in each case until each Transaction Document to
which such Person is a party has terminated or expired in accordance with
its terms.
NEG Means PG&E National Energy Group, Inc., a Delaware corporation.
NEG GUARANTEE Means the guarantee provided by NEG in favor of the Project
Company, guaranteeing the obligations of PGET under the Tolling Agreement.
PGET GUARANTEE Means, collectively, each of the NEG Guarantee and GTN
Guarantee provided by NEG and GTN, respectively, guaranteeing the
obligations of PGET under the Tolling Agreement.
(b) Each of sections 9.1(h), (i) and (j) of the Master Agreement shall be
amended to replace each reference to "PG&E" with "GTN, NEG".
REPRESENTATIONS AND WARRANTIES
3. Each Obligor represents and warrants to the Lenders and the Administrative
Agent that:
(a) this Amendment has been duly and validly executed and delivered by each
Obligor and constitutes each Obligor's legal, valid and binding obligation,
enforceable against each Obligor in accordance with its terms; and
(b) after giving effect to this Amendment (i) no Default shall have occurred
and be continuing and (ii) the representations and warranties made by each
Obligor in Article VI of the Master Agreement and in each of the other
Transaction Documents to which it is a party, are true and correct on and
as of the date hereof with the same force and effect as if made on and as
of such date (or, if any such representation or warranty is expressly
stated to have been made as of a specific date, as of such specific date).
It shall be an Event of Default for all purposes of the Master Agreement, as
amended hereby, if any representation, warranty or certification made by either
Obligor in this Amendment shall prove to have been false or misleading as of the
time made or furnished in any material respect.
CONDITIONS TO EFFECTIVENESS
4. The amendments to the Master Agreement set forth in Section 2 hereof shall
become effective, as of the date hereof, upon the satisfaction of all of the
following conditions to effectiveness (including, without limitation, that each
document to be received by the Administrative Agent shall be in form and
substance satisfactory to the Administrative Agent):
(a) AMENDMENT NO. 2. The Administrative Agent shall have received this
Amendment, duly executed and delivered by each Obligor, each of the
Required Lenders, the Majority Lenders under each Loan Agreement and the
Administrative Agent.
(b) REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties
made by the Obligors in Section 3 hereof shall be true and correct on and
as of the Amendment Effective Date with the same force and effect as if
made on and as of the Amendment Effective Date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date) and the Administrative Agent shall
have received a certificate of a senior officer of each of the Obligors to
that effect, dated the Amendment Effective Date, in substantially the form
of Exhibit A hereto.
(c) OPINION OF COUNSEL. The Administrative Agent shall have received an opinion
of (i) Dewey Ballantine, LLP, special New York counsel to GTN and NEG; (ii)
special in-house California counsel to GTN; (iii) Dewey Ballantine, LLP,
special New York counsel to NEG; (iv) Potter Anderson & Corroon, LLP,
special Delaware counsel to NEG; and (v) Stroock & Stroock & Lavan LLP,
special New York Counsel to the Obligors, each dated the Amendment
Effective Date.
(d) GUARANTEES. The Administrative Agent shall have received each of the GTN
Guarantee and the NEG Guarantee, duly executed and delivered by each of GTN
and NEG, respectively.
(e) CONSENTS. The Administrative Agent shall have received (i) the Consent
Agreement between GTN, the Project Company and the Collateral Agent; and
(ii) the Consent Agreement between NEG, the Project Company and the
Collateral Agent, each duly executed and delivered by the relevant parties
thereto.
(f) CONSENT TO SUBSTITUTION. The Administrative Agent shall have received the
Guarantee and Consent Termination Agreement, duly executed and delivered by
each of the parties thereto.
(g) AMENDMENT NO. 4 TO THE TOLLING AGREEMENT. The Administrative Agent shall
have received the Amendment No. 4 to the Tolling Agreement, duly executed
and delivered by each of the parties thereto.
(h) AMENDMENT FEE. The Borrower shall have paid the Administrative Agent for
the account of the Lenders a fee of 0.50% of the total Commitment in
connection with the amendments made hereof.
(i) OTHER DOCUMENTS. The Administrative Agent shall have received such other
documents as the Administrative Agent or any Lender or special New York
counsel to the Lenders may reasonably request.
ORION LOANS
5(a) Appendix A to the Master Agreement shall be further amended so that the
definition of Permitted Indebtedness is amended to permit the incurrence of
Indebtedness of the Borrower in the amount of $167,500 (the Amendment Fee Loan)
to be advanced by Orion Power Holdings, Inc. on February 9, 2001, provided that
such Indebtedness is subordinated to the Secured Obligations in accordance with
the subordination provisions included in the $1,500,000 Interim Orion Loan of
January 16, 2001 (the Interim Orion Loan and together with the Amendment Fee
Loan, the Orion Loans). Notwithstanding any provision to the contrary in the
Interim Orion Loan, no interest or fees will be payable on or in connection with
either of the Orion Loans.
(b) The parties hereto agree that any amounts in the Equity Distribution
Account (as defined in the Disbursement Agreement dated July 31, 2000 between
the Obligors, the Administrative Agent and The Chase Manhattan Bank, as
Collateral Agent and Depositary Bank) may be utilized at the option of the
Borrower to prepay the Orion Loans. For the avoidance of doubt, the Orion Loans
may not be prepaid in any other circumstance.
DOCUMENTS OTHERWISE UNCHANGED
6. Except as herein provided, the Master Agreement shall remain unchanged and
in full force and effect, and each reference to the Master Agreement, and words
of similar import in the Master Agreement, as amended hereby, and other
documents to which any Obligor is a party shall be a reference to the Master
Agreement as amended hereby and as the same may be further amended, supplemented
and otherwise modified and in effect from time to time.
COUNTERPARTS
7. This Amendment may be executed and delivered in counterparts (including by
facsimile transmission), each of which shall be identical and all of which, when
taken together, shall constitute one and the same instrument, and any of the
parties hereto may execute this Amendment by signing any such counterpart.
EXPENSES
8. Without limiting its obligations under Section 12.3(a) of the Master
Agreement, the Obligors agree to pay, on demand, all reasonable out-of-pocket
costs and expenses of the Administrative Agent and the Lenders (including the
fees and disbursements of Freshfields Bruckhaus Deringer LLP, special New York
counsel to the Lenders) incurred in connection with the negotiation,
preparation, execution and delivery of this Amendment.
BINDING EFFECT
9. This Amendment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
GOVERNING LAW
10. This Amendment shall be governed by, and construed in accordance with, the
law of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be
duly executed as of the day and year first above written.
LIBERTY ELECTRIC PA, LLC
By Mid Atlantic Liberty Corporation, a Member Manager
By:
Name:
Title:
LIBERTY ELECTRIC POWER, LLC
By Liberty Electric PA, LLC, its sole Member
By Mid Atlantic Liberty Corporation, a Member Manager
By:
Name:
Title:
THE CHASE MANHATTAN BANK
(As Administrative Agent)
By:
Name:
Title:
THE CHASE MANHATTAN BANK
By:
Name:
Title:
LANDESBANK HESSEN-THURINGEN GIROZENTRALE
By:
Title:
BAYERISCHE HYPO-UND VEREINSBANK AG - NEW YORK BRANCH
By:
Title:
BAYERISCHE HYPO-UND VEREINSBANK AG - NEW YORK BRANCH
By:
Title:
THE BANK OF TOKYO-MITSUBISHI, LTD.
NEW YORK BRANCH
By:
Title:
CREDIT AGRICOLE INDOSUEZ
By:
Title:
CREDIT AGRICOLE INDOSUEZ
By:
Title:
THE DAI-ICHI KANGYO BANK, LTD.
By:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
Title:
NORDDEUTSCHE LANDESBANK GIROZENTRALE
NEW YORK/CAYMAN ISLAND BRANCH
By:
Title:
By:
Title:
KBC BANK N.V. (NEW YORK BRANCH)
By:
Title:
KBC BANK N.V. (NEW YORK BRANCH)
By:
Title:
GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
By:
Title:
NEW YORK LIFE INSURANCE COMPANY
By:
Title:
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
By:
Title:
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY (BPF)
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY (RDI)
By: Lincoln Investment Management Inc.
Its Attorney-in-Fact
By:
Title:
AMERICAN GENERAL ANNUITY INSURANCE COMPANY
AMERICAN GENERAL LIFE AND ACCIDENT INSURANCE COMPANY
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By:
Title:
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
By:
Title:
MONUMENTAL LIFE INSURANCE COMPANY
By:
Title:
EXHIBIT A
CERTIFICATE
[LIBERTY ELECTRIC PA, LLC] [LIBERTY ELECTRIC POWER, LLC]
I, ________________, the duly authorized __________________ of [LIBERTY ELECTRIC
PA, LLC] [LIBERTY ELECTRIC POWER, LLC], a Delaware corporation [(the BORROWER)]
[(the PROJECT COMPANY)], hereby certify as follows:
Each of the representations and warranties made by the
[Borrower][Project Company] in Section 3 of Amendment No. 2 dated as of
February 6, 2001 (the AMENDMENT) between the Obligors, the Lenders
party thereto and THE CHASE MANHATTAN BANK, as administrative agent, is
true and correct on and as of the Amendment Effective Date (as defined
in the Amendment) with the same force and effect as if made on and as
of the date of this Certificate (or, if any such representation or
warranty is expressly stated in the Amendment to have been made as of a
specific date, as of such specific date).
In Witness Whereof, I have caused this Certificate to be executed this February
[__], 2001.
By:
Title: