1
Exhibit 10.2.2
CREDIT AGREEMENT
among
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC
a Delaware limited liability company
(Borrower)
and
CREDIT SUISSE FIRST BOSTON,
THE BANK OF NOVA SCOTIA ACTING THROUGH ITS NEW YORK BRANCH
(Lead Arranger, Co-Syndication (Lead Arranger and
Agent and Bookrunner) Administrative Agent)
and
BANC OF AMERICA SECURITIES LLC
(Arranger and Co-Syndication Agent)
and
ING (U.S.) CAPITAL LLC
(Arranger and Co-Syndication Agent)
and
BAYERISCHE LANDESBANK GIROZENTRALE
(Arranger, Co-Documentation Agent and LC Bank)
and
CIBC WORLD MARKETS CORP.
(Arranger and Co-Documentation Agent)
and
DRESDNER KLEINWORT ▇▇▇▇▇▇ NORTH AMERICA SERVICES LLC
(Arranger and Co-Documentation Agent)
and
TD SECURITIES (USA) INC.
(Arranger and Co-Documentation Agent)
and
THE BANKS PARTIES HERETO
2
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS.......................................................................................... 1
1.1 Definitions................................................................................... 1
1.2 Rules of Interpretation....................................................................... 1
ARTICLE 2. THE CREDIT FACILITIES................................................................................ 1
2.1 Loans......................................................................................... 1
2.1.1 Loan Facility........................................................................ 1
2.1.2 Turbine Purchase Loan Facility....................................................... 3
2.1.3 Interest Provisions Relating to Loans................................................ 4
2.1.4 Promissory Notes..................................................................... 5
2.1.5 Loan Funding......................................................................... 6
2.1.6 Conversion of Loans.................................................................. 6
2.1.7 Prepayments.......................................................................... 7
2.2 Letter of Credit Facilities................................................................... 7
2.2.1 Issuance of the Letters of Credit.................................................... 7
2.2.2 Availability......................................................................... 8
2.2.3 Notice of LC Activity................................................................ 8
2.2.4 Reimbursement........................................................................ 8
2.2.5 Reimbursement Obligation Absolute.................................................... 9
2.2.6 Reduction and Reinstatement of Stated Amount......................................... 10
2.2.7 Bank Participation................................................................... 10
2.2.8 Commercial Practices................................................................. 11
2.2.9 Term of Letters of Credit............................................................ 11
2.3 Total Commitments............................................................................. 12
2.3.1 Loan Commitment...................................................................... 12
2.3.2 Turbine Purchase Loan Commitment..................................................... 12
2.3.3 Letter of Credit Commitment.......................................................... 12
2.3.4 Reductions and Cancellations......................................................... 12
2.3.5 Turbine Purchase Loan Conversion to Construction Loans............................... 12
2.4 Fees.......................................................................................... 13
2.4.1 Fee Letter........................................................................... 13
2.4.2 Loan Commitment Fees................................................................. 13
2.4.3 Activation Fees...................................................................... 13
2.5 Letter of Credit Fees......................................................................... 13
2.6 Other Payment Terms........................................................................... 14
2.6.1 Place and Manner..................................................................... 14
2.6.2 Date................................................................................. 14
2.6.3 Late Payments........................................................................ 14
2.6.4 Net of Taxes, Etc.................................................................... 14
2.6.5 Application of Payments.............................................................. 16
2.6.6 Failure to Pay Administrative Agent.................................................. 16
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2.6.7 Withholding Exemption Certificates................................................... 16
2.7 Pro Rata Treatment............................................................................ 17
2.7.1 Borrowings, Commitment Reductions, Etc............................................... 17
2.7.2 Sharing of Payments, Etc............................................................. 17
2.8 Change of Circumstances....................................................................... 18
2.8.1 Inability to Determine Rates......................................................... 18
2.8.2 Illegality........................................................................... 18
2.8.3 Increased Costs...................................................................... 19
2.8.4 Capital Requirements................................................................. 19
2.8.5 Notice; Participating Banks' Rights.................................................. 20
2.9 Funding Losses................................................................................ 20
2.10 Alternate Office; Minimization of Costs....................................................... 20
2.11 Extension of Loan Maturity Date............................................................... 21
ARTICLE 3. CONDITIONS PRECEDENT................................................................................. 23
3.1 Conditions Precedent to the Closing Date...................................................... 23
3.1.1 Resolutions.......................................................................... 23
3.1.2 Incumbency........................................................................... 23
3.1.3 Formation Documents.................................................................. 23
3.1.4 Good Standing Certificates........................................................... 23
3.1.5 Satisfactory Proceedings............................................................. 24
3.1.6 Credit Documents..................................................................... 24
3.1.7 Certificates of Borrower............................................................. 24
3.1.8 Legal Opinions....................................................................... 24
3.1.9 No Change in Tax Laws................................................................ 24
3.1.10 Absence of Litigation................................................................ 25
3.1.11 Payment of Filing Fees............................................................... 25
3.1.12 Insurance............................................................................ 25
3.1.13 UCC Reports.......................................................................... 25
3.1.14 Project Budgets...................................................................... 25
3.1.15 Project Schedules.................................................................... 25
3.1.16 Base Case Project Projections........................................................ 26
3.1.17 No Material Adverse Change........................................................... 26
3.1.18 Establishment of Accounts............................................................ 26
3.1.19 Representations and Warranties....................................................... 26
3.1.20 Payment of Bank and Consultants Fees................................................. 26
3.1.21 Certificate of Independent Engineer.................................................. 26
3.1.22 Acquisition Closing.................................................................. 26
3.1.23 Initial Contributions................................................................ 26
3.2 Conditions Precedent to the Initial Funding of the Initial Projects........................... 26
3.2.1 Borrower Equity...................................................................... 27
3.2.2 Resolutions.......................................................................... 27
3.2.3 Incumbency........................................................................... 27
3.2.4 Formation Documents.................................................................. 27
3.2.5 Good Standing Certificates........................................................... 27
3.2.6 Satisfactory Proceedings............................................................. 28
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3.2.7 Operative Documents.................................................................. 28
3.2.8 Certificate of Borrower.............................................................. 30
3.2.9 Legal Opinions....................................................................... 30
3.2.10 Certificate of Insurance Consultant.................................................. 30
3.2.11 Insurance............................................................................ 30
3.2.12 Certificate of the Independent Engineer.............................................. 31
3.2.13 Reports of the Environmental Consultant.............................................. 31
3.2.14 Certificate of the Fuel Consultant................................................... 31
3.2.15 Certificate of Power Marketing Consultant............................................ 32
3.2.16 Power Marketing Plan................................................................. 32
3.2.17 Fuel Plan............................................................................ 32
3.2.18 Schedule of Applicable Permits and Applicable Third Party Permits.................... 32
3.2.19 No Change in Tax Laws................................................................ 33
3.2.20 Absence of Litigation................................................................ 33
3.2.21 Payment of Filing Fees............................................................... 33
3.2.22 Financial Statements................................................................. 34
3.2.23 UCC Reports.......................................................................... 34
3.2.24 Base Case Project Projections........................................................ 34
3.2.25 Project Schedules; Project Budgets................................................... 34
3.2.26 No Material Adverse Change........................................................... 35
3.2.27 Real Estate Rights; A.L.T.A. Surveys................................................ 35
3.2.28 Title Policies....................................................................... 35
3.2.29 Regulatory Status.................................................................... 36
3.2.30 Notice to Proceed.................................................................... 36
3.2.31 Representations and Warranties....................................................... 36
3.2.32 Utilities............................................................................ 36
3.2.33 Calpine Compliance................................................................... 36
3.2.34 Calpine Guaranties................................................................... 37
3.2.35 Updated Exhibits..................................................................... 37
3.2.36 Calpine Corporation Credit Rating.................................................... 37
3.2.37 Delta Energy Center Project Requirements............................................. 37
3.3 Conditions Precedent to the Initial Funding of the Subsequent Projects........................ 37
3.3.1 Borrower Equity...................................................................... 37
3.3.2 Joint Venture Projects............................................................... 37
3.3.3 Resolutions.......................................................................... 38
3.3.4 Incumbency........................................................................... 38
3.3.5 Formation Documents.................................................................. 38
3.3.6 Good Standing Certificates........................................................... 38
3.3.7 Satisfactory Proceedings............................................................. 39
3.3.8 Operative Documents.................................................................. 39
3.3.9 Certificate of Borrower.............................................................. 41
3.3.10 Legal Opinions....................................................................... 41
3.3.11 Certificate of Insurance Consultant.................................................. 42
3.3.12 Insurance............................................................................ 42
3.3.13 Certificate of the Independent Engineer.............................................. 42
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3.3.14 Reports of the Environmental Consultant.............................................. 42
3.3.15 Certificate of the Fuel Consultant................................................... 43
3.3.16 Certificate of Power Marketing Consultant............................................ 43
3.3.17 Power Marketing Plan................................................................. 43
3.3.18 Fuel Plan............................................................................ 43
3.3.19 Schedule of Applicable Permits and Applicable Third Party Permits.................... 44
3.3.20 No Change in Tax Laws................................................................ 45
3.3.21 Absence of Litigation................................................................ 45
3.3.22 Payment of Filing Fees............................................................... 45
3.3.23 Financial Statements................................................................. 45
3.3.24 UCC Reports.......................................................................... 45
3.3.25 Project Budgets...................................................................... 46
3.3.26 Project Schedule..................................................................... 46
3.3.27 Base Case Project Projections........................................................ 46
3.3.28 No Material Adverse Change........................................................... 46
3.3.29 Real Estate Rights; A.L.T.A. Surveys................................................ 46
3.3.30 Title Policies....................................................................... 47
3.3.31 Regulatory Status.................................................................... 48
3.3.32 Notice to Proceed.................................................................... 48
3.3.33 Representations and Warranties....................................................... 48
3.3.34 Utilities............................................................................ 48
3.3.35 Calpine Compliance................................................................... 48
3.3.36 Calpine Guaranties................................................................... 48
3.3.37 Updated Exhibits..................................................................... 49
3.3.38 Diversification Requirements......................................................... 49
3.3.39 Calpine Corporation Credit Rating.................................................... 49
3.3.40 Initial Projects Satisfaction of Conditions Precedent to Initial Funding............. 49
3.3.41 Modified Conditions Precedent to Initial Funding..................................... 49
3.4 Conditions Precedent to Each Construction Credit Event........................................ 50
3.4.1 Monthly Drawdown Frequency........................................................... 50
3.4.2 Notice of Construction Borrowing..................................................... 50
3.4.3 Construction Drawdown Certificate and Engineer's Certificate......................... 50
3.4.4 Amount............................................................................... 50
3.4.5 Title Policy Endorsement............................................................. 50
3.4.6 Lien Releases........................................................................ 51
3.4.7 Applicable Permits................................................................... 51
3.4.8 Equity Contributions................................................................. 51
3.4.9 Additional Documentation............................................................. 51
3.4.10 Acceptable Work; No Liens............................................................ 52
3.4.11 Casualty............................................................................. 52
3.4.12 Absence of Litigation................................................................ 52
3.4.13 Insurance............................................................................ 52
3.4.14 Available Construction Funds......................................................... 52
3.4.15 Representations and Warranties....................................................... 52
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3.4.16 No Event of Default or Inchoate Default.............................................. 53
3.4.17 Operative Documents, Applicable Permits and Applicable Third Party Permits in Effect. 53
3.4.18 No Material Adverse Effect........................................................... 53
3.4.19 Third Party Funding.................................................................. 53
3.4.20 Debt to Capitalization Ratio......................................................... 53
3.4.21 Interest Coverage Ratio.............................................................. 53
3.4.22 Funded Projects...................................................................... 53
3.5 Conditions Precedent to the Initial Funding of the Turbines................................... 54
3.5.1 Borrower Equity...................................................................... 54
3.5.2 Resolutions.......................................................................... 54
3.5.3 Incumbency........................................................................... 54
3.5.4 Formation Documents.................................................................. 54
3.5.5 Good Standing Certificates........................................................... 54
3.5.6 Satisfactory Proceedings............................................................. 55
3.5.7 Operative Documents.................................................................. 55
3.5.8 Certificate of Borrower.............................................................. 56
3.5.9 Legal Opinions....................................................................... 56
3.5.10 Insurance............................................................................ 56
3.5.11 Certificate of the Independent Engineer.............................................. 57
3.5.12 No Change in Tax Laws................................................................ 57
3.5.13 Absence of Litigation................................................................ 57
3.5.14 Payment of Filing Fees............................................................... 57
3.5.15 Financial Statements................................................................. 57
3.5.16 UCC Reports.......................................................................... 57
3.5.17 No Material Adverse Change........................................................... 58
3.5.18 Representations and Warranties....................................................... 58
3.5.19 Calpine Compliance................................................................... 58
3.5.20 Calpine Guaranties................................................................... 58
3.5.21 Calpine Corporation Credit Rating.................................................... 58
3.6 Conditions Precedent to Each Turbine Purchase Credit Event.................................... 58
3.6.1 Monthly Drawdown Frequency........................................................... 58
3.6.2 Notice of Turbine Purchase Borrowing................................................. 58
3.6.3 Turbine Purchase Drawdown Certificate and Engineer's Certificate..................... 58
3.6.4 Amount............................................................................... 58
3.6.5 Equity Contributions................................................................. 59
3.6.6 Insurance............................................................................ 59
3.6.7 Available Construction Funds......................................................... 59
3.6.8 Representations and Warranties....................................................... 59
3.6.9 No Event of Default or Inchoate Default.............................................. 59
3.6.10 Credit Documents and Turbine Purchase Contract in Effect............................. 59
3.6.11 No Material Adverse Effect........................................................... 59
3.6.12 Debt to Capitalization Ratio......................................................... 59
3.6.13 Funded Projects...................................................................... 59
3.7 Conditions Precedent to Final Completion...................................................... 60
3.7.1 Notice of Completion................................................................. 60
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3.7.2 Completion........................................................................... 60
3.7.3 Annual Budget........................................................................ 60
3.7.4 Insurance............................................................................ 60
3.7.5 Applicable Permits and Applicable Third Party Permits................................ 60
3.7.6 Real Estate Rights; A.L.T.A. Surveys................................................. 61
3.7.7 Title Policy......................................................................... 61
3.7.8 Operating Plans...................................................................... 62
3.7.9 Affiliated Party Deeds of Trust...................................................... 62
3.7.10 Equipment Maintenance Agreements..................................................... 62
3.8 Conditions Precedent to the Issuance of Letters of Credit..................................... 62
3.8.1 Representations and Warranties....................................................... 63
3.8.2 No Event of Default or Inchoate Default.............................................. 63
3.8.3 Operative Documents, Applicable Permits and Applicable Third Party Permits in Effect. 63
3.8.4 No Material Adverse Effect........................................................... 63
3.8.5 Interest Coverage Ratio.............................................................. 63
3.8.6 Project Satisfaction of Conditions Precedent to Initial Funding...................... 63
3.8.7 Debt to Capitalization Ratio......................................................... 63
3.8.8 Funded Projects...................................................................... 63
3.9 Failure of Conditions Precedent to be Satisfied for a Particular Project...................... 64
3.10 Funding of Equity............................................................................. 64
3.11 No Approval of Work........................................................................... 66
3.12 Waiver of Funding; Adjustment of Drawdown Requests............................................ 66
3.13 Ability of Technical Committee to Defer Satisfaction of Conditions Precedent to Initial
Funding for Projects Five Through Twelve...................................................... 66
ARTICLE 4. REPRESENTATIONS AND WARRANTIES....................................................................... 67
4.1 Organization.................................................................................. 67
4.2 Authorization; No Conflict.................................................................... 68
4.3 Enforceability................................................................................ 68
4.4 Compliance with Law........................................................................... 68
4.5 Business, Debt, Contracts, Joint Ventures Etc................................................. 68
4.6 Adverse Change................................................................................ 69
4.7 Investment Company Act, Etc................................................................... 69
4.8 ERISA......................................................................................... 69
4.9 Permits....................................................................................... 70
4.10 Qualifying Facility/Exempt Wholesale Generator................................................ 71
4.11 Hazardous Substance........................................................................... 71
4.12 Litigation.................................................................................... 71
4.13 Labor Disputes and Acts of God................................................................ 72
4.14 Project Documents and Turbine Purchase Contracts.............................................. 72
4.15 Disclosure.................................................................................... 72
4.16 Private Offering by Borrower.................................................................. 73
4.17 Taxes......................................................................................... 73
4.18 Governmental Regulation....................................................................... 73
4.19 Regulation U, Etc............................................................................. 73
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4.20 Project Budgets; Projections.................................................................. 73
4.21 Financial Statements.......................................................................... 74
4.22 Existing Defaults............................................................................. 74
4.23 No Default.................................................................................... 74
4.24 Offices, Location of Collateral............................................................... 74
4.25 Title and Liens............................................................................... 75
4.26 Trademarks.................................................................................... 76
4.27 Collateral.................................................................................... 76
4.28 Sufficiency of Project Documents.............................................................. 77
4.29 Utilities..................................................................................... 77
4.30 Roads/Transmission Line....................................................................... 78
4.31 Proper Subdivision............................................................................ 78
4.32 Flood Zone Disclosure......................................................................... 78
4.33 Acquisition of Real Property.................................................................. 78
ARTICLE 5. COVENANTS OF BORROWER................................................................................ 78
5.1 Use of Proceeds and Revenues.................................................................. 78
5.1.1 Proceeds............................................................................. 78
5.1.2 Revenues............................................................................. 79
5.2 Payment....................................................................................... 79
5.2.1 Credit Documents..................................................................... 79
5.2.2 Project Documents and Turbine Purchase Contracts..................................... 79
5.3 Warranty of Title............................................................................. 79
5.4 Notices....................................................................................... 80
5.5 Financial Statements.......................................................................... 82
5.6 Books, Records, Access........................................................................ 83
5.7 Compliance with Laws, Instruments, Etc........................................................ 83
5.8 Reports....................................................................................... 83
5.9 Existence, Conduct of Business, Properties, Etc............................................... 85
5.10 Four-Quarter Portfolio Interest Coverage Ratio; Maximum Debt to Capitalization Ratio.......... 85
5.11 Indemnification............................................................................... 86
5.12 Qualifying Facility/Exempt Wholesale Generator................................................ 88
5.13 Construction of Each Project.................................................................. 89
5.14 Completion.................................................................................... 89
5.15 Operation of Projects and Annual Operating Budget............................................. 89
5.16 Preservation of Rights; Further Assurances.................................................... 90
5.17 Project Equity................................................................................ 91
5.17.1 (a).................................................................................. 92
5.18 Maintenance of Insurance...................................................................... 92
5.19 Taxes and Other Government Charges............................................................ 92
5.20 Event of Eminent Domain....................................................................... 93
5.21 Power Marketing Plan; Fuel Plan............................................................... 93
5.22 Utility Charges............................................................................... 93
5.23 Revenue Payment to Borrower................................................................... 93
5.24 Initial Project Deeds of Trust and Equipment Finance Company Collateral Documents............. 94
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5.25 Funded Projects............................................................................... 94
ARTICLE 6. NEGATIVE COVENANTS................................................................................... 94
6.1 Contingent Liabilities........................................................................ 94
6.2 Limitations on Liens.......................................................................... 95
6.3 Indebtedness.................................................................................. 95
6.4 Sale or Lease of Assets....................................................................... 95
6.5 Changes....................................................................................... 102
6.6 Distributions................................................................................. 102
6.7 Investments................................................................................... 103
6.8 Transactions With Affiliates.................................................................. 103
6.9 Regulations................................................................................... 104
6.10 ERISA......................................................................................... 104
6.11 Partnerships, Etc............................................................................. 104
6.12 Dissolution................................................................................... 104
6.13 Amendments; Change Orders; Completion......................................................... 104
6.14 Compliance with Operative Documents........................................................... 107
6.15 Name and Location; Fiscal Year................................................................ 107
6.16 Use of Project Sites.......................................................................... 107
6.17 Assignment.................................................................................... 107
6.18 Abandonment of Project or Turbine............................................................. 107
6.19 Hazardous Substance........................................................................... 107
6.20 Additional Project Documents.................................................................. 107
6.21 Project Budget Amendments..................................................................... 108
6.22 Loan Proceeds; Project Revenues............................................................... 108
6.23 Acquisition of Real Property.................................................................. 108
6.24 Accounts...................................................................................... 108
ARTICLE 7. APPLICATION OF FUNDS................................................................................. 109
7.1 Construction Account.......................................................................... 109
7.1.1 Establishment of Account............................................................. 109
7.1.2 Disbursements from Construction Account.............................................. 109
7.1.3 Rights of Administrative Agent....................................................... 110
7.2 Revenue Account............................................................................... 111
7.2.1 Establishment of Account; Priority of Payments....................................... 111
7.2.2 O&M Costs............................................................................ 112
7.2.3 Subordinated O&M Costs............................................................... 113
7.2.4 Mandatory Prepayment................................................................. 113
7.3 Operating Account............................................................................. 113
7.3.1 Establishment of Account............................................................. 114
7.3.2 Funding.............................................................................. 114
7.3.3 Withdrawals.......................................................................... 114
7.3.4 Security Interest.................................................................... 114
7.4 Loss Proceeds Account......................................................................... 114
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7.5 Application of Insurance Proceeds............................................................. 114
7.5.1 General.............................................................................. 115
7.5.2 Delay in Start Up and Business Interruption Insurance................................ 115
7.5.3 Applications; Mandatory Prepayments.................................................. 115
7.5.4 Proceeds Less than $1,000,000........................................................ 117
7.5.5 Proceeds in Excess of $1,000,000, Not in Excess of $10,000,000....................... 117
7.5.6 Proceeds in Excess of $10,000,000.................................................... 117
7.5.7 Repair and Restoration Procedures.................................................... 117
7.5.8 Excess Insurance Proceeds............................................................ 118
7.5.9 Turbine Insurance Proceeds........................................................... 118
7.5.10 Events of Default.................................................................... 118
7.6 Application of Eminent Domain Proceeds........................................................ 118
7.7 Application of Certain Damages Payments; Mandatory Prepayments................................ 118
7.7.1 Contractor........................................................................... 118
7.7.2 Power Purchasers..................................................................... 119
7.7.3 Other................................................................................ 119
7.8 Working Capital Reserve Account............................................................... 119
7.8.1 Establishment of Account............................................................. 119
7.8.2 Funding.............................................................................. 119
7.8.3 Withdrawals.......................................................................... 120
7.8.4 Earnings............................................................................. 120
7.9 Security Interest in Proceeds and Accounts.................................................... 120
7.10 Permitted Investments......................................................................... 121
7.11 Earnings on Accounts.......................................................................... 121
7.12 Dominion and Control.......................................................................... 121
7.13 Termination of Commitments.................................................................... 121
7.14 Flow of Funds Between Portfolio Entities...................................................... 121
ARTICLE 8. EVENTS OF DEFAULT; REMEDIES.......................................................................... 123
8.1 Events of Default............................................................................. 123
8.1.1 Failure to Make Payments............................................................. 123
8.1.2 Judgments............................................................................ 123
8.1.3 Misstatements; Omissions............................................................. 123
8.1.4 Bankruptcy; Insolvency............................................................... 123
8.1.5 Debt Cross Default................................................................... 124
8.1.6 ERISA................................................................................ 124
8.1.7 Breach of Terms of Agreement......................................................... 125
8.1.8 Loss of Qualifying Facility or Eligible Facility Status.............................. 126
8.1.9 Abandonment.......................................................................... 126
8.1.10 Security............................................................................. 127
8.1.11 Loss of Control...................................................................... 127
8.1.12 Loss of or Failure to Obtain Applicable Permits or Applicable Third Party Permits.... 127
8.1.13 Loss of Collateral................................................................... 128
8.1.14 Non-Fundamental Defaults............................................................. 128
8.2 Remedies...................................................................................... 128
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8.2.1 No Further Loans or Letters of Credit................................................ 128
8.2.2 Cash Collateralization of Letters of Credit.......................................... 128
8.2.3 Prepayment of Loans.................................................................. 129
8.2.4 Cure by Administrative Agent......................................................... 129
8.2.5 Acceleration......................................................................... 129
8.2.6 Cash Collateral...................................................................... 129
8.2.7 Possession of Projects and Turbines.................................................. 129
8.2.8 Remedies Under Credit Documents...................................................... 129
ARTICLE 9. SCOPE OF LIABILITY................................................................................... 130
ARTICLE 10. ADMINISTRATIVE AGENT; SUBSTITUTION; TECHNICAL COMMITTEE............................................. 131
10.1 Appointment, Powers and Immunities............................................................ 131
10.2 Reliance by Administrative Agent.............................................................. 132
10.3 Non-Reliance.................................................................................. 132
10.4 Defaults...................................................................................... 132
10.5 Indemnification............................................................................... 132
10.6 Successor Administrative Agent................................................................ 133
10.7 Authorization................................................................................. 134
10.8 Administrative Agent, Technical Committee, Bookrunner, Arrangers, Co-Syndication Agents and
Co-Documentation Agents....................................................................... 134
10.9 Amendments; Waivers........................................................................... 134
10.10 Withholding Tax............................................................................... 135
10.11 General Provisions as to Payments............................................................. 136
10.12 Substitution of Bank.......................................................................... 136
10.13 Participation................................................................................. 136
10.14 Transfer of Commitment........................................................................ 137
10.15 Laws.......................................................................................... 138
10.16 Assignability to Federal Reserve Bank......................................................... 138
10.17 Technical Committee........................................................................... 139
10.18 Notices to Technical Committee and Banks...................................................... 139
ARTICLE 11. INDEPENDENT CONSULTANTS............................................................................. 139
11.1 Removal and Fees.............................................................................. 139
11.2 Duties........................................................................................ 139
11.3 Independent Consultants' Certificates......................................................... 140
11.4 Certification of Dates........................................................................ 140
ARTICLE 12. MISCELLANEOUS....................................................................................... 140
12.1 Addresses..................................................................................... 140
12.2 Additional Security; Right to Set-Off......................................................... 142
12.3 Delay and Waiver.............................................................................. 142
12.4 Costs, Expenses and Attorneys' Fees; Syndication.............................................. 142
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12.5 Entire Agreement.............................................................................. 143
12.6 Governing Law................................................................................. 144
12.7 Severability.................................................................................. 144
12.8 Headings...................................................................................... 144
12.9 Accounting Terms.............................................................................. 144
12.10 Additional Financing.......................................................................... 144
12.11 No Partnership, Etc........................................................................... 144
12.12 Deed of Trust/Collateral Documents............................................................ 144
12.13 Limitation on Liability....................................................................... 144
12.14 Waiver of Jury Trial.......................................................................... 145
12.15 Consent to Jurisdiction....................................................................... 145
12.16 Usury......................................................................................... 145
12.17 Knowledge and Attribution..................................................................... 146
12.18 Successors and Assigns........................................................................ 146
12.19 Counterparts.................................................................................. 146
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INDEX OF EXHIBITS AND SCHEDULES
Exhibit A Definitions and Rules of Interpretation
NOTES
Exhibit B Form of Note
LOAN DISBURSEMENT PROCEDURES
Exhibit C-1 Form of Notice of Construction Borrowing
Exhibit C-2 Form of Notice of Turbine Purchase Borrowing
Exhibit C-3 Form of Confirmation of Interest Period Selection
Exhibit C-4 Form of Notice of Conversion of Loan Type
Exhibit C-5 Form of Notice of LC Activity
Exhibit C-6 Form of Construction Drawdown Certificate
Exhibit C-7 Form of Engineer's Construction Certificate
Exhibit C-8 Form of Turbine Purchase Drawdown Certificate
Exhibit C-9 Form of Engineer's Turbine Purchase Certificate
Exhibit C-10 Form of Disbursement Requisition
Exhibit C-11 Form of Reserve Account Disbursement Requisition
EQUITY AND SECURITY-RELATED DOCUMENTS
Exhibit D-1 Form of Depositary Agreement
Exhibit D-2A Form of Affiliated Party Agreement Guaranty
Exhibit D-2B Form of Project Completion Guaranty
Exhibit D-2C Form of Turbine Purchase Guaranty
Exhibit D-2D Form of Project Owner Guaranty
Exhibit D-3 Form of Deed of Trust
Exhibit D-4A Form of Borrower Security Agreement
Exhibit D-4B Form of Project/Turbine Owner Security Agreement
Exhibit D-4C Development Company Security Agreement
Exhibit D-4D Form of CCFC II Equipment Finance Company Security Agreement
Exhibit D-4E Form of Equipment Finance Company Security Agreement
Exhibit D-5 INTENTIONALLY OMITTED
Exhibit D-6 Schedule of Security Filings
Exhibit D-7 Form of Debt Subordination Agreement
Exhibit D-8 Form of Affiliated Subordination Agreement
Exhibit D-9 Form of Pledge Agreement (Pledged Equity Interests)
Exhibit D-10 Form of Portfolio Entity Note
CONSENTS
Exhibit E-1 Form of Consent for Contracting Party
CLOSING CERTIFICATES
Exhibit F-1 Form of Borrower's Closing Certificate
Exhibit F-2 Form of Borrower's Project Funding Certificate
Exhibit F-3 Form of Borrower's Turbine Funding Certificate
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Exhibit F-4 Form of Insurance Consultant's Certificate
Exhibit F-5 Form of Independent Engineer's Closing Certificate
Exhibit F-6 Form of Independent Engineer's Project Funding Certificate
Exhibit F-7 Form of Independent Engineer's Turbine Funding Certificate
Exhibit F-8 Form of Fuel Consultant's Certificate
Exhibit F-9 Form of Power Marketing Consultant's Certificate
PROJECT DESCRIPTION EXHIBITS
Exhibit G-1 Description of Initial Projects
Exhibit G-2 Description of Subsequent Projects
Exhibit G-3 Description of Turbines
Exhibit G-4 Project Budgets
Appendix G-4A Los Medanos Energy Center Project Budget
Appendix G-4B Baytown Energy Center Project Budget
Appendix G-4C ▇▇▇▇▇▇▇▇ Project Budget
Appendix G-4D Panda ▇▇▇▇▇ Power Project Budget
Appendix G-4E Santa ▇▇▇▇-Phase I Project Budget
Appendix G-4F Delta Energy Center Project Budget
Appendix G-4G Freestone Energy Center Project Budget
Appendix G-4H Broad River-Phase II Project Budget
▇▇▇▇▇▇▇▇ ▇-▇▇ Channel Project Budget
Appendix G-4J Corpus-Phase I Project Budget
Appendix G-4K Solutia Project Budget
▇▇▇▇▇▇▇▇ ▇-▇▇ ▇▇▇▇▇▇ Energy Center-Amoco Project Budget
Appendix G-4M Borrower Budget for Non-Project Allocated Costs
Exhibit G-5 Initial Project Scheduled Completion Dates
Exhibit G-6 Base Case Project Projections
Exhibit G-7 Pending Litigation
Exhibit G-8 Hazardous Substances Disclosure
Exhibit G-9 Form of Power Marketing Plan
Exhibit G-10 Form of Fuel Plan
OTHER
Exhibit H Banks/Lending Offices
Exhibit I Annual Insurance Consultant's Certificate
Exhibit J-1 Form of Withholding Certificate (Treaty)
Exhibit J-2 Form of Withholding Certificate (Effectively Connected)
Exhibit K Insurance Requirements
Exhibit L Assignment Agreement
Schedule 1 Required Contribution Percentage
Schedule 3.2 Initial Project Funding Specifics
Schedule 3.3.41 Modified Conditions Precedent to Initial Funding
Schedule 4.24 Chief Executive Offices of Portfolio Entities
xiii
15
THIS CREDIT AGREEMENT (this "Agreement") dated as of October
16, 2000, is entered into among CALPINE CONSTRUCTION FINANCE COMPANY II, LLC, a
Delaware limited liability company, as Borrower, CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch, as Lead Arranger and Administrative Agent,
THE BANK OF NOVA SCOTIA, as Lead Arranger, Co-Syndication Agent and Bookrunner,
BANC OF AMERICA SECURITIES LLC, as Arranger and Co-Syndication Agent, ING (U.S.)
CAPITAL LLC, as Arranger and Co-Syndication Agent, BAYERISCHE LANDESBANK
GIROZENTRALE, as Arranger, Co-Documentation Agent, and LC Bank, CIBC WORLD
MARKETS CORP., as Arranger and Co-Documentation Agent, DRESDNER KLEINWORT ▇▇▇▇▇▇
NORTH AMERICA SERVICES LLC, as Arranger and Co-Documentation Agent, TD
SECURITIES (USA) INC., as Arranger and Co-Documentation Agent, and the financial
institutions listed on Exhibit H hereto (the "Banks").
In consideration of the agreements herein and in the other
Credit Documents and in reliance upon the representations and warranties set
forth herein and therein, the parties agree as follows:
ARTICLE 1.
DEFINITIONS
1.1 Definitions. Except as otherwise expressly provided, capitalized terms
used in this Agreement and its exhibits shall have the meanings given in Exhibit
A.
1.2 Rules of Interpretation. Except as otherwise expressly provided, the
rules of interpretation set forth in Exhibit A shall apply to this Agreement and
the other Credit Documents.
ARTICLE 2.
THE CREDIT FACILITIES
2.1 Loans.
2.1.1 Loan Facility.
(a) Availability. Subject to the terms and conditions set
forth in this Agreement, each Bank severally agrees to advance to Borrower from
time to time during the Loan Availability Period such loans as Borrower may
request under this Section 2.1.1 (individually, a "Construction Loan" and
collectively the "Construction Loans"), in an aggregate principal amount which,
when added to such Bank's Proportionate Share of the aggregate principal amount
of all Turbine Purchase Loans then outstanding, such Bank's Proportionate Share
of the Aggregate LC Stated Amount and all outstanding Reimbursement Obligations
owed such Bank, does not exceed such Bank's Loan Commitment. Subject to the
terms hereof (including without limitation the conditions to drawdowns set forth
in Article 3), Borrower may borrow, repay and reborrow the Construction Loans
from time to time during the Loan Availability Period.
(b) Notice of Construction Borrowing. Borrower shall request
Construction Loans by delivering to Administrative Agent a written notice in the
form of
16
Exhibit C-1, appropriately completed (a "Notice of Construction Borrowing"),
which specifies, among other things:
(i) The principal portion of the requested Borrowing
which will bear interest as provided in (1) Section 2.1.1(c)(i) (individually, a
"Base Rate Construction Loan") and/or (2) Section 2.1.1(c)(ii) (individually, a
"LIBOR Construction Loan");
(ii) The amount of the requested Borrowing, which (A)
shall be in the minimum amount of $1,000,000 and (B) when added to all other
Construction Loans then outstanding shall not exceed the Total Loan Commitment,
minus the sum of (x) the aggregate principal amount of all Turbine Purchase
Loans then outstanding plus (y) the aggregate Stated Amount of all Letters of
Credit then outstanding plus (z) the aggregate amount of all Reimbursement
Obligations then outstanding;
(iii) The date of the requested Borrowing, which shall
be a Banking Day;
(iv) If the requested Borrowing is to consist of LIBOR
Construction Loans, the initial Interest Periods selected by Borrower for such
Construction Loans; and
(v) The Project(s) to which such Borrowing relates.
Borrower shall give each Notice of Construction Borrowing
relating to Construction Loans to Administrative Agent so as to provide the
Minimum Notice Period applicable to Loans of the Type requested. Any Notice of
Construction Borrowing may be modified or revoked by Borrower through the
Banking Day prior to the Minimum Notice Period, and shall thereafter be
irrevocable.
(c) Construction Loan Interest. Borrower shall pay interest on
the unpaid principal amount of each Construction Loan from the date of such
Construction Loan until the maturity or prepayment thereof at the following
rates per annum:
(i) With respect to the principal portion of such
Construction Loan which is, and during such periods as such Construction Loan
is, a Base Rate Construction Loan, at a rate per annum equal to the Base Rate
plus the Applicable Margin, such rate to change from time to time as the Base
Rate shall change; and
(ii) With respect to the principal portion of such
Construction Loan which is, and during such portion of such periods as such
Construction Loan is, a LIBOR Construction Loan, at a rate per annum, at all
times during each Interest Period for such LIBOR Construction Loan, equal to the
LIBO Rate for such Interest Period plus the Applicable Margin.
(d) Construction Loan Principal Payments. Borrower shall repay
to Administrative Agent, for the account of each Bank, in full on the Loan
Maturity Date the unpaid principal amount of all Construction Loans made by such
Bank.
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17
2.1.2 Turbine Purchase Loan Facility.
(a) Availability. Subject to the terms and conditions set
forth in this Agreement, each Bank severally agrees to advance to Borrower from
time to time during the Loan Availability Period such loans as Borrower may
request under this Section 2.1.2 (individually, a "Turbine Purchase Loan" and
collectively the "Turbine Purchase Loans"). Subject to the terms hereof
(including without limitation the conditions to drawdowns set forth in Article
3), Borrower may borrow, repay and reborrow the Turbine Purchase Loans from time
to time during the Loan Availability Period.
(b) Notice of Turbine Purchase Borrowing. Borrower shall
request Turbine Purchase Loans by delivering to Administrative Agent a written
notice in the form of Exhibit C-2, appropriately completed (a "Notice of Turbine
Purchase Borrowing"), which specifies, among other things:
(i) The principal portion of the requested Borrowing
which will bear interest as provided in (1) Section 2.1.2(c)(i) (individually, a
"Base Rate Turbine Purchase Loan") and/or (2) Section 2.1.2(c)(ii)
(individually, a "LIBOR Turbine Purchase Loan");
(ii) The amount of the requested Borrowing, which (A)
shall be in the minimum amount of $1,000,000 and (B) when added to all other
Turbine Purchase Loans then outstanding shall not exceed the lesser of (I) Total
Turbine Purchase Loan Commitment and (II) an amount equal to the excess, if any,
of (x) the amount of the Total Loan Commitment at such time over (y) the
aggregate principal amount of all Loans then outstanding plus the Aggregate LC
Stated Amount and all outstanding Reimbursement Obligations;
(iii) The date of the requested Borrowing, which shall
be a Banking Day;
(iv) If the requested Borrowing is to consist of LIBOR
Turbine Purchase Loans, the initial Interest Periods selected by Borrower for
such Turbine Purchase Loans; and
(v) The Turbine(s) to which such Borrowing relates.
Borrower shall give each Notice of Turbine Purchase Borrowing
relating to Turbine Purchase Loans to Administrative Agent so as to provide the
Minimum Notice Period applicable to Loans of the Type requested. Any Notice of
Turbine Purchase Borrowing may be modified or revoked by Borrower through the
Banking Day prior to the Minimum Notice Period, and shall thereafter be
irrevocable.
(c) Turbine Purchase Loan Interest. Borrower shall pay
interest on the unpaid principal amount of each Turbine Purchase Loan from the
date of such Turbine Purchase Loan until the maturity or prepayment thereof at
the following rates per annum:
(i) With respect to the principal portion of such
Turbine Purchase Loan which is, and during such periods as such Turbine Purchase
Loan is, a Base Rate
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18
Turbine Purchase Loan, at a rate per annum equal to the rate of interest per
annum then applicable to Base Rate Construction Loans pursuant to Section
2.1.1(c)(i); and
(ii) With respect to the principal portion of such
Turbine Purchase Loan which is, and during such portion of such periods as such
Turbine Purchase is, a LIBOR Turbine Purchase Loan, at a rate per annum, at all
times during each Interest Period for such LIBOR Turbine Purchase Loan, equal to
the rate of interest per annum then applicable to LIBOR Construction Loans
pursuant to Section 2.1.1(c)(ii).
(d) Turbine Purchase Loan Principal Payments. Borrower shall
repay to Administrative Agent, for the account of each Bank, in full on the Loan
Maturity Date the unpaid principal amount of all Turbine Purchase Loans made by
such Bank.
2.1.3 Interest Provisions Relating to Loans.
(a) Interest Payment Dates. Borrower shall pay accrued
interest on the unpaid principal amount of each Loan (i) in the case of each
Base Rate Loan, on the last Banking Day of each calendar quarter, (ii) in the
case of each LIBOR Loan, on the last day of each Interest Period related to such
LIBOR Loan and, if such Interest Period is longer than three months, every three
months after the date of such LIBOR Loan and (iii) in all cases, upon prepayment
(to the extent thereof and including any optional prepayments or Mandatory
Prepayments), upon conversion from one Type of Loan to another Type, and on the
Loan Maturity Date.
(b) LIBOR Loan Interest Periods.
(i) The initial and subsequent Interest Periods for
LIBOR Loans shall be a maximum of one month during the six month period
immediately following the Closing Date; provided that Administrative Agent may
otherwise approve, in its sole discretion, a longer Interest Period which is
requested by Borrower and otherwise complies with the following provisions of
this Section 2.1.3(b)(i). Thereafter, each subsequent Interest Period (including
any Interest Period referenced in the proviso of the first sentence of this
Section 2.1.3(b)) selected by Borrower for all LIBOR Loans shall be one, two,
three, six or, if made available by Administrative Agent, 12 months or such
other period as close to three months as is practicable to enable Borrower to
limit the number of LIBOR Loans as required by this Section 2.1.3(b)(i) or to
comply with clauses (C), (D) or (F) of the next sentence. Notwithstanding
anything to the contrary in either of the two preceding sentences, (A) any
Interest Period which would otherwise end on a day which is not a Banking Day
shall be extended to the next succeeding Banking Day unless such next Banking
Day falls in another calendar month, in which case such Interest Period shall
end on the immediately preceding Banking Day; (B) any Interest Period which
begins on the last Banking Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Banking Day of a calendar month; (C)
Borrower may not select Interest Periods which would leave a greater principal
amount of Loans subject to Interest Periods ending after a date upon which Loans
are or may be required to be repaid than principal amount of Loans scheduled to
be outstanding after such date; (D) any Interest Period for a Loan which would
otherwise end after the Loan Maturity Date shall end on the Loan
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19
Maturity Date; (E) LIBOR Loans for each Interest Period shall be in the amount
of at least $100,000; and (F) Borrower may not at any time have outstanding more
than twelve different Interest Periods relating to LIBOR Loans.
(ii) Borrower may contact Administrative Agent at any
time prior to the end of an Interest Period, for a quotation of Interest Rates
in effect at such time for given Interest Periods and Administrative Agent shall
promptly provide such quotation. Borrower may select an Interest Period
telephonically within the time periods specified in Section 2.1.6, which
selection shall be irrevocable on and after the applicable Minimum Notice
Period. Borrower shall confirm such telephonic notice to Administrative Agent by
telecopy on the day such notice is given (in substantially the form of Exhibit
C-3, a "Confirmation of Interest Period Selection"). Borrower shall promptly
deliver to Administrative Agent the original of the Confirmation of Interest
Period Selection initially delivered by telecopy. If Borrower fails to notify
Administrative Agent of the next Interest Period for any LIBOR Loans in
accordance with this Section 2.1.3(b), such Loans shall automatically convert to
Base Rate Loans on the last day of the current Interest Period therefor.
Administrative Agent shall as soon as practicable (and, in any case, within two
Banking Days after delivery of the Confirmation of Interest Period Selection)
notify Borrower of each determination of the Interest Rate applicable to each
Loan.
(c) Interest Account and Interest Computations. Borrower
authorizes Administrative Agent to record in an account or accounts maintained
by Administrative Agent on its books (i) the interest rates applicable to all
Loans and the effective dates of all changes thereto, (ii) the Interest Period
for each LIBOR Loan, (iii) the date and amount of each principal and interest
payment on each Loan and (iv) such other information as Administrative Agent may
determine is necessary for the computation of interest payable by Borrower
hereunder. Borrower agrees that all computations by Administrative Agent of
interest shall be conclusive in the absence of manifest error. All computations
of interest on Base Rate Loans shall be based upon a year of 365 or 366 days and
the actual days elapsed, and shall be adjusted in accordance with any changes in
the Base Rate to take effect on the beginning of the day of such change in the
Base Rate. All computations of interest on LIBOR Loans shall be based upon a
year of 360 days and the actual days elapsed.
2.1.4 Promissory Notes. The obligation of Borrower to repay the Loans
made by each Bank and to pay interest thereon at the rates provided herein shall
be evidenced by promissory notes in the form of Exhibit B (individually, a
"Note"), each payable to the order of such Bank and in the principal amount of
such Bank's Loan Commitment. Borrower authorizes each Bank to record on the
schedule annexed to such Bank's Note, the date and amount of each Loan made by
such Bank, and each payment or prepayment of principal thereunder and agrees
that all such notations shall constitute prima facie evidence of the matters
noted. Borrower further authorizes each Bank to attach to and make a part of
such Bank's Note continuations of the schedule attached thereto as necessary. No
failure to make any such notations, nor any errors in making any such notations,
shall affect the validity of Borrower's obligations to repay the full unpaid
principal amount of the Loans or the duties of Borrower hereunder or thereunder.
5
20
2.1.5 Loan Funding.
(a) Notice. Each Notice of Borrowing shall be delivered by
Borrower to Administrative Agent in accordance with Section 12.1. Administrative
Agent shall promptly notify each Bank of the contents of each Notice of
Borrowing.
(b) Pro Rata Loans. All Loans shall be made on a pro rata
basis by the Banks in accordance with their respective Proportionate Shares of
such Loans, with each Borrowing to consist of a Loan by each Bank equal to such
Bank's Proportionate Share of such Borrowing.
(c) Bank Funding. Each Bank shall, before 12:00 noon on the
date of each Borrowing, make available to Administrative Agent at its office
specified in Section 12.1, in same day funds, such Bank's Proportionate Share of
such Borrowing. The failure of any Bank to make the Loan to be made by it as
part of any Borrowing shall not relieve any other Bank of its obligation
hereunder to make its Loan on the date of such Borrowing. No Bank shall be
responsible for the failure of any other Bank to make the Loan to be made by
such other Bank on the date of any Borrowing.
(d) Construction Account. No later than 2:00 p.m. on the date
specified in each Notice of Borrowing, if the applicable conditions precedent
listed in Article 3 have been satisfied and to the extent Administrative Agent
shall have received the appropriate funds from the Banks, Administrative Agent
will make available the Loans requested in such Notice of Borrowing (or so much
thereof as the Banks shall have approved pursuant to this Agreement) in Dollars
and in immediately available funds, at Administrative Agent's New York Branch,
and shall deposit such Loans into the Construction Account.
2.1.6 Conversion of Loans. Borrower may convert Loans from one Type of
Loans to another Type; provided, however, that (i) any conversion of LIBOR Loans
into Base Rate Loans shall be made on, and only on, the first day after the last
day of an Interest Period for such LIBOR Loans and (ii) Loans shall be converted
only in amounts of $1,000,000 or more. Borrower shall request such a conversion
by a written notice to Administrative Agent in the form of Exhibit C-4,
appropriately completed (a "Notice of Conversion of Loan Type"), which
specifies:
(a) The Loans, or portion thereof, which are to be converted;
(b) The Type into which such Loans, or portion thereof, are to
be converted;
(c) If such Loans are to be converted into LIBOR Loans, the
initial Interest Period selected by Borrower for such Loans in accordance with
Section 2.1.3(b); and
(d) The date of the requested conversion, which shall be a
Banking Day.
Borrower shall so deliver each Notice of Conversion of Loan Type so as to
provide at least the applicable Minimum Notice Period. Any Notice of Conversion
of Loan Type may be modified or revoked by Borrower through the Banking Day
prior to the Minimum Notice Period, and shall
6
21
thereafter be irrevocable. Each Notice of Conversion of Loan Type shall be
delivered by first-class mail or telecopy to Administrative Agent at the office
or to the telecopy number and during the hours specified in Section 12.1;
provided, however, that Borrower shall promptly deliver to Administrative Agent
the original of any Notice of Conversion of Loan Type initially delivered by
telecopy. Administrative Agent shall promptly notify each Bank of the contents
of each Notice of Conversion of Loan Type.
2.1.7 Prepayments.
(a) Terms of All Prepayments. Upon the prepayment of any Loan
(whether such prepayment is an optional prepayment under Section 2.1.7(b) or a
Mandatory Prepayment), Borrower shall pay to Administrative Agent for the
account of the Bank which made such Loan, as applicable, (i) all accrued
interest to the date of such prepayment on the amount prepaid, (ii) all accrued
fees to the date of such prepayment of the amount being prepaid, and (iii) if
such prepayment is the prepayment of a LIBOR Loan on a day other than the last
day of an Interest Period for such LIBOR Loan, all Liquidation Costs incurred by
such Bank as a result of such prepayment. Notwithstanding the foregoing,
Borrower shall have the right, by giving five Banking Days' notice to
Administrative Agent, in lieu of prepaying a LIBOR Loan on a day other than the
last day of an Interest Period for such LIBOR Loan, to deposit or cause
Administrative Agent to deposit, into an account to be held by Depositary Agent
(which account shall be subjected to the Lien of the Collateral Documents in a
manner satisfactory to Administrative Agent) an amount equal to the LIBOR Loans
to be prepaid. Such funds shall be held in such account until the expiration of
the Interest Period applicable to the LIBOR Loan to be prepaid at which time the
amount deposited in such account shall be used to prepay such LIBOR Loan and any
interest accrued on such amount shall be deposited in the Revenue Account. The
deposit of amounts into such account shall not constitute a prepayment of Loans
and all Loans to be prepaid using the proceeds from such account shall continue
to accrue interest at the then applicable interest rate for such Loans until
actually prepaid. All amounts in such account shall only be invested in
Permitted Investments as directed by and at the expense and risk of Borrower.
Borrower may reborrow the principal amount of any Loan which is prepaid.
(b) Optional Prepayments. Subject to Section 2.1.7(a),
Borrower may, at its option and without penalty, upon five Banking Days' notice
to Administrative Agent, prepay any Loans in whole or in part in minimum amounts
of $5,000,000 or an incremental multiple of $1,000,000 in excess thereof.
(c) Mandatory Prepayments. Borrower shall prepay (or cause to
be prepaid) Loans to the extent required by Section 3.13, 6.4, 7.2.1(9), 7.2.4,
7.5, 7.6, or 7.7 of this Agreement, or any other provision of this Agreement
which requires prepayment of Loans (such prepayment, "Mandatory Prepayment").
2.2 Letter of Credit Facilities.
2.2.1 Issuance of the Letters of Credit. Subject to the terms and
conditions set forth in this Agreement, LC Bank shall, during the Loan
Availability Period, on each Banking Day specified in a Notice of LC Activity
described in Section 2.2.3, issue, extend or increase the
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22
Stated Amount (as applicable), for the account of Borrower, of the Letter(s) of
Credit to which such Notice of LC Activity relates, and deliver each such Letter
of Credit (or a notice of extension or increase in the Stated Amount thereof) to
the applicable LC Beneficiary. Subject to Section 2.2.6(b), LC Bank shall not
modify the conditions for draws or terms of availability for any Letter of
Credit issued and outstanding hereunder without Borrower's consent.
2.2.2 Availability. LC Bank shall, subject to the terms and conditions
of the Agreement, at the request and for the account of Borrower, make Letter(s)
of Credit available to Borrower and/or the Project Owners solely to enable the
Project Owners to provide security for their obligations under Project
Documents. No Letter of Credit shall be issued, renewed, replaced or extended by
LC Bank until such time (or a reasonable period before such time) as required
under the Project Document pursuant to which such Letter of Credit is being
issued. The expiration date of each Letter of Credit shall be on or prior to the
scheduled Loan Maturity Date.
2.2.3 Notice of LC Activity. Borrower shall request the issuance,
extension or increase in the Stated Amount of any Letter of Credit by delivering
to Administrative Agent and LC Bank an irrevocable written notice in the form of
Exhibit C-5, appropriately completed (a "Notice of LC Activity"), which
specifies, among other things:
(a) The particulars of the Letter of Credit to be issued or
the specific Letter of Credit to be extended or the Stated Amount of which is to
be increased;
(b) The Project to which such Letter of Credit relates;
(c) The issue date and expiration date of the Letter of Credit
to be issued or extended (neither of which shall in any event be later than the
scheduled Loan Maturity Date);
(d) The Stated Amount of such Letter of Credit which, together
with the Aggregate LC Stated Amount and all outstanding Reimbursement
Obligations, shall not exceed the lesser of (i) Total Letter of Credit
Commitment and (ii) an amount equal to the excess, if any, of (A) the amount of
the Total Loan Commitment at such time over (B) the aggregate principal amount
of all Loans then outstanding plus the Aggregate LC Stated Amount and all
outstanding Reimbursement Obligations; and
(e) The Available Construction Funds which, after taking into
effect the issuance of such Letter of Credit, will be equal to or exceed the
remaining Project Costs for the Initial Projects and the Funded Subsequent
Projects.
Borrower shall give the Notice of LC Activity to Administrative Agent and LC
Bank at least five Banking Days before the requested date of issuance of any
Letter of Credit, and at least five Banking Days before the requested date of
extension, or increase in the Stated Amount, thereof. Any Notice of LC Activity,
once given by Borrower, may not be modified or revoked without the prior consent
of the LC Bank.
2.2.4 Reimbursement. LC Bank shall notify Borrower of any Drawing
Payment under any Letter of Credit within one Banking Day after the date that
such Drawing Payment is made (the date such Drawing Payment is made, the
"Drawing Date"); provided, however, that
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23
LC Bank's failure to provide such notification shall not relieve Borrower of its
Reimbursement Obligation (it being understood, however, that LC Bank shall not
be excused from any liability it may have to Borrower as a result of such
failure to provide the required notice). No later than 11:00 a.m. on the fifth
Banking Day after the Drawing Date, Borrower shall make or cause to be made to
LC Bank a Reimbursement Payment in an amount equal to the sum of (a) the full
amount of such Drawing Payment and (b) interest thereon for each day or portion
thereof until such Reimbursement Payment is made at a rate equal to (i) from the
Drawing Date through the fifth Banking Day following the Drawing Date, the LIBO
Rate plus the Applicable Margin then applicable to LIBOR Loans and (ii)
thereafter, the Default Rate; provided, however, that such Reimbursement Payment
shall be for the benefit of each Bank (in proportion to its Proportionate Share
of the Total Letter of Credit Commitment) to the extent that, prior to the time
such Reimbursement Payment is made, such Bank has, pursuant to Section 2.2.7,
paid LC Bank its respective Proportionate Share of the Drawing Payment made by
LC Bank. If a Reimbursement Payment is made in the full amount of such Drawing
Payment by 3:00 p.m. on the applicable Drawing Date, no interest shall be
payable on such Drawing Payment.
2.2.5 Reimbursement Obligation Absolute. The Reimbursement Obligation
of Borrower for each Drawing Payment shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under and without regard to any circumstances, including, (a) any
lack of validity or enforceability of any of the Operative Documents, (b) any
amendment or waiver of or any consent to departure from all or any terms of any
of the Operative Documents, (c) the existence of any claim, setoff, defense or
other right which Borrower may have at any time against any LC Beneficiary or
any transferee of any Letter of Credit (or any Persons for whom any such LC
Beneficiary or transferee may be acting), LC Bank, Administrative Agent, any
Bank or any other Person, whether in connection with this Agreement, the
transactions contemplated herein or in the other Operative Documents, or in any
unrelated transaction, (d) any breach of contract or dispute among or between
Borrower, LC Bank, Administrative Agent, any Bank, or any other Person, (e) any
demand, statement, certificate, draft or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect,
(f) payment by LC Bank under any Letter of Credit against presentation of any
demand, statement, certificate, draft or other document which does not comply
with the terms of such Letter of Credit, (g) any non-application or
misapplication by an LC Beneficiary of the proceeds of any Drawing Payment under
a Letter of Credit or any other act or omission of an LC Beneficiary in
connection with a Letter of Credit, (h) any extension of time for or delay,
renewal or compromise of or other indulgence or modification to the Drawing
Payment granted or agreed to by LC Bank, Administrative Agent or any Bank, with
or without notice to or approval by Borrower, (i) any failure to preserve or
protect any Collateral, any failure to perfect or preserve the perfection of any
Lien thereon, or the release of any of the Collateral securing the performance
or observance of the terms of this Agreement or any of the other Operative
Documents, or (j) any other circumstances or happenings whatsoever relating to
Borrower, such Reimbursement Obligation or any Project, whether or not similar
to any of the foregoing, including the failure of Borrower to occupy or use any
Project in the manner contemplated by the Operative Documents or otherwise, any
defect in title, design, operation, merchantability, fitness or condition of any
Project or in the suitability of any Project for Borrower's purposes or needs,
any failure of consideration, destruction of or damage to any Project, any
commercial frustration of purpose, the taking by condemnation of title to or the
use
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24
of all or any part of any Project, any Regulatory Change, any failure of an LC
Beneficiary or any other Person to perform or observe any agreement, whether
express or implied, or any duty, liability or obligation arising out of or in
connection with the Operative Documents to which each is a party; provided,
however, that nothing in this Section 2.2.5 shall relieve LC Bank,
Administrative Agent or any Bank from liability for its gross negligence or
willful misconduct or breach of this Agreement.
2.2.6 Reduction and Reinstatement of Stated Amount.
(a) The Stated Amount of each Letter of Credit shall be
reduced by the amount of Drawing Payments made in respect thereof.
Notwithstanding anything to the contrary contained in this Section 2.2, once so
reduced, the Stated Amount of any Letter of Credit shall not be reinstated
except (i) upon the prior written consent of Administrative Agent, LC Bank and
the Required Banks or (ii) upon payment by Borrower of the Reimbursement
Obligation corresponding to such Drawing Payment and satisfaction of the
conditions for an increase in the Stated Amount of a Letter of Credit set forth
in Section 2.2.3 and Article 3.
(b) Upon the occurrence and during the continuation of an
Event of Default under Section 8.1.4 or at such time as, pursuant to the terms
hereof, Administrative Agent and the Banks have accelerated the Obligations,
Administrative Agent (acting at the direction of the LC Bank or the Required
Banks) shall be entitled to cancel all outstanding Letters of Credit any time at
least 15 days after delivery to the LC Beneficiary of each Letter of Credit that
will be canceled a written notice of such intent to cancel, whereupon the LC
Beneficiary shall be entitled to draw upon the applicable Letter of Credit in
accordance with its terms.
2.2.7 Bank Participation. Each Bank severally agrees to participate
with LC Bank in the extension of credit arising from the issuance of the Letters
of Credit in an amount equal to such Bank's Proportionate Share of the Stated
Amount of each Letter of Credit, and the issuance of a Letter of Credit shall be
deemed a confirmation to LC Bank of such participation in such amount. After
written notification by LC Bank to Administrative Agent at any time after LC
Bank has received notice of or request for any Drawing Payment, Administrative
Agent may request the Banks to pay to Administrative Agent on behalf of LC Bank
their respective Proportionate Shares of all or any portion of such Drawing
Payment made or to be made by LC Bank under any Letter of Credit by contacting
each Bank telephonically (promptly confirmed in writing), and specifying the
amount of such Drawing Payment (as set forth in LC Bank's written notification
of Administrative Agent of the same), such Bank's Proportionate Share thereof,
and the date on which such Drawing Payment is to be made or was made (as set
forth in LC Bank's written notification of Administrative Agent of the same);
provided, however, that Administrative Agent shall not request the Banks to make
any payment under this Section 2.2.7 in connection with any portion of a Drawing
Payment for which LC Bank has been reimbursed through a Reimbursement Payment by
Borrower (unless such Reimbursement Payment has been thereafter recovered by
Borrower). Upon receipt of any such request for payment from Administrative
Agent, each Bank shall pay to Administrative Agent such Bank's Proportionate
Share of the unreimbursed portion of such Drawing Payment, together with
interest thereon at a per annum rate equal to the Federal Funds Rate, as in
effect from time to time, from the date of such Drawing Payment to the date on
which such Bank makes payment, and Administrative
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Agent shall promptly thereafter pay to LC Bank all amounts so received. Each
Bank's obligation to make each such payment to Administrative Agent shall be
absolute, unconditional and irrevocable and shall not be affected by any
circumstance whatsoever, including the occurrence or continuance of any Inchoate
Default or Event of Default, or the failure of any other Bank to make any
payment under this Section 2.2.7, and each Bank further agrees that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever. If any Reimbursement Payment is made to Administrative Agent or LC
Bank, Administrative Agent or LC Bank, as applicable, shall pay to each Bank
which has paid its Proportionate Share of the Drawing Payment such Bank's
Proportionate Share of the Reimbursement Payment and shall, in the case of
Administrative Agent, pay to LC Bank and, in the case of LC Bank, retain, the
balance of such Reimbursement Payment.
2.2.8 Commercial Practices. Borrower assumes all risks of the acts or
omissions of any LC Beneficiary or transferee of any Letter of Credit with
respect to the use of such Letter of Credit. Borrower agrees that neither LC
Bank, Administrative Agent nor any Bank (nor any of their respective directors,
officers or employees) shall be liable or responsible for: (a) the use which may
be made of any Letter of Credit or for any acts or omissions of any LC
Beneficiary or transferee in connection therewith; (b) any reference which may
be made to this Agreement or to any Letter of Credit in any agreements,
instruments or other documents; (c) the validity, sufficiency or genuineness of
documents other than the Letters of Credit, or of any endorsement(s) thereon,
even if such documents should in fact prove to be in any or all respects
invalid, insufficient, fraudulent or forged or any statement therein prove to be
untrue or inaccurate in any respect whatsoever; (d) payment by LC Bank against
presentation of documents which do not strictly comply with the terms of the
applicable Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit; or (e) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except only that LC Bank shall be liable to Borrower for acts or
events described in clauses (a) through (e) above, to the extent, but only to
the extent, of any direct damages, as opposed to indirect, special or
consequential damages, suffered by Borrower which Borrower proves were caused by
(i) LC Bank's willful misconduct or gross negligence in determining whether a
drawing made under the applicable Letter of Credit complies with the terms and
conditions therefor stated in such Letter of Credit or (ii) LC Bank's willful
failure to pay under any Letter of Credit after a drawing by the respective LC
Beneficiary strictly complying with the terms and conditions of the applicable
Letter of Credit. Without limiting the foregoing, LC Bank may accept any
document that appears on its face to be in order, without responsibility for
further investigation. Borrower hereby waives any right to object to any payment
made under a Letter of Credit with regard to a drawing that is in the form
provided in such Letter of Credit but which varies with respect to punctuation
(except punctuation with respect to any Dollar amount specified therein),
capitalization, spelling or similar matters of form.
2.2.9 Term of Letters of Credit. Unless terminated earlier in
accordance with its terms, or extended pursuant to Section 2.2.3, each Letter of
Credit shall terminate on the earlier to occur of (a) 12:01 a.m., on the
Expiration Date stated therein (which shall be no later than the earlier of the
Loan Maturity Date and 15 days following the scheduled expiration of the letter
of credit obligations under the Project Document in connection with which such
Letter of Credit is to be issued) and (b) cancellation of such Letter of Credit
pursuant to Section 2.2.6(b).
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2.3 Total Commitments.
2.3.1 Loan Commitment. The aggregate principal amount of all Loans
outstanding at any time or times shall not exceed $2,500,000,000 or, if such
amount is reduced by Borrower pursuant to Section 2.3.4, such lower amount (such
amount, so reduced from time to time, the "Total Loan Commitment"), minus the
sum of (i) the aggregate Stated Amount of all Letters of Credit then outstanding
plus (ii) the aggregate amount of all Reimbursement Obligations then
outstanding.
2.3.2 Turbine Purchase Loan Commitment. The aggregate principal amount
of all Turbine Purchase Loans outstanding at any time or times shall not exceed
$500,000,000 or, if such amount is reduced by Borrower pursuant to Section
2.3.4, such lower amount (such amount, as so reduced from time to time, the
"Total Turbine Purchase Loan Commitment").
2.3.3 Letter of Credit Commitment. The aggregate Stated Amount of all
Letters of Credit from time to time outstanding and all outstanding
Reimbursement Obligations thereunder shall not exceed $200,000,000, or, if such
amount is reduced by Borrower pursuant to Section 2.3.4, such lower amount (such
amount, as so reduced from time to time, the "Total Letter of Credit
Commitment").
2.3.4 Reductions and Cancellations. Borrower may, from time to time
upon five Banking Days written notice to Administrative Agent, permanently
reduce, by an amount of $10,000,000 or an integral multiple of $1,000,000 in
excess thereof or cancel in its entirety the Total Loan Commitment, the Total
Turbine Purchase Loan Commitment and/or the Total Letter of Credit Commitment.
Notwithstanding the foregoing, Borrower may not reduce or cancel the Total Loan
Commitment, the Total Turbine Purchase Loan Commitment and/or the Total Letter
of Credit Commitment if, after giving effect to such reduction or cancellation,
(a) the sum of the aggregate principal amount of all Loans then outstanding and
the Aggregate LC Stated Amount together with all outstanding Reimbursement
Obligations would exceed the Total Loan Commitment, (b) the Available
Construction Funds would not, in the reasonable judgment of the Technical
Committee and the Independent Engineer, be equal to or exceed remaining Project
Costs for all Initial Projects and Funded Subsequent Projects, or (c) such
reduction or cancellation would cause a violation of any other provision of this
Agreement, the other Credit Documents, any Project Documents, any Turbine
Purchase Contracts or have a Material Adverse Effect on Borrower, any Project
Owner, any Initial Project or any Funded Subsequent Project. Borrower shall pay
to Administrative Agent any Commitment Fees then due upon any cancellation and,
from the effective date of any reduction, the Commitment Fees shall be computed
on the basis of the Available Loan Commitment, as so reduced. Once reduced or
canceled, none of the Total Loan Commitment may be increased or reinstated. Any
reductions in the Total Loan Commitment, the Total Turbine Purchase Loan
Commitment or the Total Letter of Credit Commitment pursuant to this Section
2.3.4 shall be applied ratably to each Bank's respective Commitments in
accordance with Section 2.7.1.
2.3.5 Turbine Purchase Loan Conversion to Construction Loans. In the
event a Project satisfies the conditions precedent to initial funding pursuant
to Section 3.2 or 3.3, as the case may be, and prior to such initial funding the
Turbines assigned to such Project (as set forth in Exhibit G-3), if any, were
Funded Turbines, the Turbine Purchase Loans associated with such
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Funded Turbines shall be automatically converted for all purposes hereof into
Construction Loans and shall cease to be considered outstanding Turbine Purchase
Loans, including for purposes of Section 2.3.2, in each case as of the Funding
Date with respect to such Project.
2.4 Fees.
2.4.1 Fee Letter. Borrower shall pay to the Lead Arrangers, Arrangers
and Administrative Agent solely for the Lead Arrangers', Arrangers' and
Administrative Agent's respective accounts the fees described in that certain
letter from Borrower to the Lead Arrangers, Arrangers and Administrative Agent
dated the Closing Date.
2.4.2 Loan Commitment Fees. On the last Banking Day in each calendar
quarter (where all or any portion of such calendar quarter occurs on or after
the Closing Date and prior to the Loan Maturity Date) and on the Loan Maturity
Date (or, if the Total Loan Commitment is canceled prior to such date, on the
date of such cancellation), Borrower shall pay to Administrative Agent, for the
benefit of the Banks, accruing from the Closing Date or the first day of such
quarter, as the case may be, a commitment fee (the "Commitment Fee") for such
quarter (or portion thereof) then ending equal to the product of (a) 0.50% times
(b) the daily average Available Loan Commitment for such quarter (or portion
thereof) times (c) a fraction, the numerator of which is the number of days in
such quarter (or portion thereof) and the denominator of which is the number of
days in that calendar year (365 or 366, as the case may be).
2.4.3 Activation Fees. Concurrently with the first Borrowing in respect
of each Subsequent Project or Substituted Initial Project that becomes a Funded
Project, Borrower shall pay to Administrative Agent, for the benefit of the
Banks, an activation fee (the "Activation Fee") equal to the product of (a)
0.25% times (b) the total amount of Project Costs in respect of such Project
less any Contributions by Calpine previously applied to pay Project Costs for
such Project as reflected in such Project's Project Budget.
2.5 Letter of Credit Fees.
2.5.1 On the last Banking Day in each calendar quarter commencing on or
after the Closing Date and through the Loan Maturity Date, on the Expiration
Date of each Letter of Credit and on the Loan Maturity Date, Borrower shall pay
to Administrative Agent for the benefit of the Banks, accruing from the date of
issuance of such Letter of Credit, a Letter of Credit fee (the "Letter of Credit
Fee") for such quarter (or portion thereof in the case of payment on the
Expiration Date of a Letter of Credit or on the Loan Maturity Date) then ending
at the rates per annum described below and computed in the following manner: The
Letter of Credit Fee in respect of each Letter of Credit shall be equal to the
product of (a) the Applicable Margin with respect to LIBOR Loans applicable at
such time, times (b) the daily average Stated Amount of each such Letter of
Credit for such quarter (or portion thereof in the case of payment on the
Expiration Date of a Letter of Credit or on the Loan Maturity Date) times (c) a
fraction, the numerator of which is the number of days in such quarter (or
portion thereof in the case of payment on the Expiration Date of a Letter of
Credit or on the Loan Maturity Date) and the denominator of which is 360.
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2.5.2 Borrower shall pay to LC Bank solely for LC Bank's account the
issuing and paying fee and LC Bank's usual and customary charges (or such
charges as LC Bank and Borrower may agree) for the opening of any Letter of
Credit, for the negotiation of any drafts paid pursuant to any Letter of Credit
and for any wire transfers, all as described in that certain letter from
Borrower to LC Bank dated the Closing Date.
2.6 Other Payment Terms.
2.6.1 Place and Manner. Borrower shall make all payments due to each
Bank or Administrative Agent hereunder to Administrative Agent, for the account
of such Bank, to The Bank of New York, Federal Reserve Bank of New York
ABA#▇▇▇▇▇▇▇▇▇, for further credit to account #8900410825 CSFB Project Finance
Fund Clearing Account; Reference: Calpine Construction Finance Company II, in
lawful money of the United States and in immediately available funds not later
than 12:00 noon on the date on which such payment is due. Any payment made after
such time on any day shall be deemed received on the Banking Day after such
payment is received. Administrative Agent shall disburse to each Bank each such
payment received by Administrative Agent for such Bank, such disbursement to
occur on the day such payment is received if received by 12:00 noon or if
otherwise reasonably possible, otherwise on the next Banking Day.
2.6.2 Date. Whenever any payment due hereunder shall fall due on a day
other than a Banking Day, such payment shall be made on the next succeeding
Banking Day (except in the case of any payment relating to a LIBOR Loan where
such next succeeding Banking Day is in the next calendar month, in which case
such payment shall be made on the next preceding Banking Day), and such
extension of time shall be included in the computation of interest or fees, as
the case may be.
2.6.3 Late Payments. If any amounts required to be paid by Borrower
under this Agreement or the other Credit Documents (including principal or
interest payable on any Loan, and any fees or other amounts otherwise payable to
Administrative Agent or any Bank) remain unpaid after such amounts are due,
Borrower shall pay interest on the aggregate, unpaid balance of such amounts
from the date due until those amounts are paid in full at a per annum rate equal
to the Default Rate.
2.6.4 Net of Taxes, Etc.
(a) Taxes. Subject to each Bank's compliance with Section
2.6.7, any and all payments to or for the benefit of Administrative Agent or any
Bank by Borrower hereunder or under any other Credit Document shall be made free
and clear of and without deduction, setoff or counterclaim of any kind
whatsoever and in such amounts as may be necessary in order that all such
payments, after deduction for or on account of any present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto (excluding income and franchise taxes, which include taxes
imposed on or measured by the net income or capital of Administrative Agent or
such Bank by any jurisdiction or any political subdivision or taxing authority
thereof or therein solely as a result of a connection between such Bank and such
jurisdiction or political subdivision, other than a connection resulting solely
from executing, delivering or performing its obligations or receiving a payment
under, or enforcing, this
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Agreement or any Note) (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"), shall be equal to the amounts otherwise specified to be paid under
this Agreement and the other Credit Documents. If Borrower shall be required by
law to withhold or deduct any Taxes from or in respect of any sum payable
hereunder or under any other Credit Document to Administrative Agent or any
Bank, (i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.6.4, Administrative Agent or such Bank
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) Borrower shall make such deductions and (iii)
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law. If Borrower shall make any
payment under this Section 2.6.4 to or for the benefit of Administrative Agent
or any Bank with respect to Taxes and if Administrative Agent or such Bank shall
claim any credit or deduction for such Taxes against any other taxes payable by
Administrative Agent or such Bank to any taxing jurisdiction then Administrative
Agent or such Bank shall pay to Borrower an amount equal to the amount by which
such other taxes are actually reduced; provided that the aggregate amount
payable by Administrative Agent or such Bank pursuant to this sentence shall not
exceed the aggregate amount previously paid by Borrower with respect to such
Taxes. In addition, Borrower agrees to pay any present or future stamp,
recording or documentary taxes and any other excise or property taxes, charges
or similar levies (not including income or franchise taxes) that arise under the
laws of the United States of America, the State of New York or any other state
or jurisdiction where a Project is located from any payment made hereunder or
under any other Credit Document or from the execution or delivery or otherwise
with respect to this Agreement or any other Credit Document (hereinafter
referred to as "Other Taxes").
(b) Indemnity. Borrower shall indemnify each Bank for the full
amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 2.6.4 paid by any Bank,
or any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted; provided that Borrower shall not be obligated to indemnify
any Bank for any penalties, interest or expenses relating to Taxes or Other
Taxes arising from the indemnitee's gross negligence or willful misconduct. Each
Bank agrees to give written notice to Borrower of the assertion of any claim
against such Bank relating to such Taxes or Other Taxes as promptly as is
practicable after being notified of such assertion, and in no event later than
180 days after the principal officer of such Bank responsible for administering
this Agreement obtains knowledge thereof; provided that any Bank's failure to
notify Borrower of such assertion within such 180 days period shall not relieve
Borrower of its obligation under this Section 2.6.4 with respect to Taxes or
Other Taxes arising prior to the end of such period, but shall relieve Borrower
of its obligations under this Section 2.6.4 with respect to Taxes or Other Taxes
between the end of such period and such time as Borrower receives notice from
such Bank as provided herein. Payments by Borrower pursuant to this
indemnification shall be made within 30 days from the date such Bank makes
written demand therefor (submitted through Administrative Agent), which demand
shall be accompanied by a certificate describing in reasonable detail the basis
thereof. Each Bank agrees to repay to Borrower any refund (including that
portion of any interest that was included as part of such refund with respect to
Taxes or Other Taxes paid by Borrower pursuant to this Section 2.6.4) received
by such Bank for Taxes or Other Taxes that were paid by Borrower pursuant to
this Section 2.6.4 and to contest, with the
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approval and participation of and at the expense of Borrower, any such Taxes or
Other Taxes which such Bank or Borrower reasonably believes not to have been
properly assessed.
(c) Notice. Within 30 days after the date of any payment of
Taxes by Borrower, Borrower shall furnish to Administrative Agent, at its
address referred to in Section 12.1, the original or a certified copy of a
receipt evidencing payment thereof. Borrower shall compensate each Bank for all
reasonable losses and expenses sustained by such Bank as a result of any failure
by Borrower to so furnish such copy of such receipt.
(d) Survival of Obligations. The obligations of Borrower under
this Section 2.6.4 shall survive the termination of this Agreement and the
repayment of the Obligations.
2.6.5 Application of Payments. Payments made under this Agreement or
the other Credit Documents and other amounts received by Administrative Agent
and the Banks under this Agreement or the other Credit Documents shall first be
applied to any fees, costs, charges or expenses payable to Administrative Agent
or the other Banks hereunder or under the other Credit Documents, next to any
accrued but unpaid interest then due and owing, and then to outstanding
principal then due and owing or otherwise to be prepaid; provided, with respect
to payments applied to accrued but unpaid interest then due and owing or
outstanding principal then due and owing or otherwise to be prepaid, such
payments shall be applied to such debt associated with or attributable to
Projects in the order of the respective dates of Operation of such Projects or,
if all Loans associated with or attributable to Projects which have achieved
Operation have been paid, then, at Borrower's election, pro rata as to all such
debt, to such debt associated with or attributable to Turbines or to such debt
associated with or attributable to Projects (in the case of payments of such
debt associated with or attributable to Projects, such payment shall be applied
in order of the respective anticipated dates of Commercial Operation of such
Projects, as set forth in such Projects' Project Schedules).
2.6.6 Failure to Pay Administrative Agent. Unless Administrative Agent
shall have received notice from Borrower at least two Banking Days prior to the
date on which any payment is due to the Banks hereunder that Borrower will not
make such payment in full, Administrative Agent may assume that Borrower has
made such payment in full to Administrative Agent on such date and
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to the amount then due
such Bank. If and to the extent Borrower shall not have so made such payment in
full to Administrative Agent, such Bank shall repay to Administrative Agent
forthwith upon demand such amount distributed to such Bank, together with
interest thereon, for each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to Administrative Agent, at the
Federal Funds Rate for the first five days after such date, and subsequent
thereto at the Base Rate. A certificate of Administrative Agent submitted to any
Bank with respect to any amounts owing by such Bank under this Section 2.6.6
shall be conclusive in the absence of manifest error.
2.6.7 Withholding Exemption Certificates. Administrative Agent on the
Closing Date and each Bank upon becoming a Bank hereunder including any entity
to which any Bank grants a participation, or otherwise transfers its interest in
this Agreement, agree that they
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will deliver to Borrower and Administrative Agent (and Administrative Agent
agrees that it will deliver to Borrower) either (a) a statement that it is
formed under the laws of the United States of America or a state thereof or (b)
if it is not so formed, a letter in the form of Exhibit J-1 or Exhibit J-2, as
appropriate, or other documentation reasonably acceptable to Borrower and
Administrative Agent and two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor applicable form, as the case may
be, certifying in each case that such Bank is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes. Each Bank which delivers to Borrower and Administrative Agent a
Form 1001 or 4224 pursuant to the preceding sentence further undertakes to
deliver to Borrower and Administrative Agent further copies of the said letter
and Form 1001 or 4224, or successor applicable forms, or other manner of
certification or procedure, as the case may be, on or before the date that any
such letter or form expires or becomes obsolete or within a reasonable time
after gaining knowledge of the occurrence of any event requiring a change in the
most recent letter and forms previously delivered by it to Borrower, and such
extensions or renewals thereof as may reasonably be requested by Borrower,
certifying in the case of a Form 1001 or 4224 that such Bank is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes, unless in any such cases an event (including
any change in treaty, law or regulation) has occurred prior to the date on which
any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent a Bank from duly completing and delivering
any such letter or form with respect to it and such Bank advises Borrower that
it is not capable of receiving payments without any deduction or withholding of
United States federal income tax, and in the case of Form W-8 or W-9,
establishing an exemption from United States backup withholding tax. Borrower
shall not be obligated, however, to pay any additional amounts in respect of
United States Federal income tax pursuant to Section 2.6.4 (or make an
indemnification payment pursuant to Section 2.6.4) to any Bank (including any
entity to which any Bank sells, assigns, grants a participation in, or otherwise
transfers its rights under this Agreement) if the obligation to pay such
additional amounts (or such indemnification) would not have arisen but for a
failure of such Bank to comply with its obligations under this Section 2.6.7.
2.7 Pro Rata Treatment.
2.7.1 Borrowings, Commitment Reductions, Etc. Except as otherwise
provided herein, (a) each Borrowing and each reduction of the Total Loan
Commitment, the Total Turbine Purchase Loan Commitment or the Total Letter of
Credit Commitment shall be made or allocated among the Banks pro rata according
to their respective Proportionate Shares of such Loans or Commitments, as the
case may be, (b) each payment of principal of and interest on Loans shall be
made or shared among the Banks holding such Loans pro rata according to the
respective unpaid principal amounts of such Loans held by such Banks and (c)
each payment of Commitment Fees and Letter of Credit Fees shall be shared among
the Banks pro rata according to (i) their respective Proportionate Shares of the
Commitments to which such fees apply and (ii) in the case of each Bank which
becomes a Bank hereunder after the date hereof, the date upon which such Bank so
became a Bank.
2.7.2 Sharing of Payments, Etc. If any Bank shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of Loans owed to it, in excess of its ratable share of
payments on account of such Loans obtained
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by all Banks entitled to such payments, such Bank shall forthwith purchase from
the other Banks such participation in the Loans, as the case may be, as shall be
necessary to cause such purchasing Bank to share the excess payment ratably with
each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Bank, such purchase from
such Bank shall be rescinded and each other Bank shall repay to the purchasing
Bank the purchase price to the extent of such recovery together with an amount
equal to such other Bank's ratable share (according to the proportion of (a) the
amount of such other Bank's required repayment to (b) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered.
Borrower agrees that any Bank so purchasing a participation from another Bank
pursuant to this Section 2.7.2 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of setoff) with respect
to such participation as fully as if such Bank were the direct creditor of
Borrower in the amount of such participation.
2.8 Change of Circumstances.
2.8.1 Inability to Determine Rates. If, on or before the first day of
any Interest Period for any LIBOR Loans, (a) Administrative Agent determines
that the LIBO Rate for such Interest Period cannot be adequately and reasonably
determined due to the unavailability of funds in or other circumstances
affecting the London interbank market, or (b) Banks holding aggregate
Proportionate Shares of 33-1/3% or more of the Total Loan Commitment shall
advise Administrative Agent that (i) the rates of interest for such LIBOR Loans
do not adequately and fairly reflect the cost to such Banks of making or
maintaining such Loans or (ii) deposits in Dollars in the London interbank
market are not available to such Banks (as conclusively certified by each such
Bank in good faith in writing to Administrative Agent and to Borrower) in the
ordinary course of business in sufficient amounts to make and/or maintain their
LIBOR Loans, Administrative Agent shall immediately give notice of such
condition to Borrower. After the giving of any such notice and until
Administrative Agent shall otherwise notify Borrower that the circumstances
giving rise to such condition no longer exist, Borrower's right to request the
making of or conversion to, and the Banks' obligations to make or convert to
LIBOR Loans shall be suspended. Any LIBOR Loans outstanding at the commencement
of any such suspension shall be converted at the end of the then current
Interest Period for such Loans into Base Rate Loans unless such suspension has
then ended.
2.8.2 Illegality. If, after the date of this Agreement, the adoption of
any Governmental Rule, any change in any Governmental Rule or the application or
requirements thereof (whether such change occurs in accordance with the terms of
such Governmental Rule as enacted, as a result of amendment, or otherwise), any
change in the interpretation or administration of any Governmental Rule by any
Governmental Authority, or compliance by any Bank or Borrower with any request
or directive (whether or not having the force of law) of any Governmental
Authority (a "Change of Law") shall make it unlawful or impossible for any Bank
to make or maintain any LIBOR Loan, such Bank shall immediately notify
Administrative Agent and Borrower of such Change of Law. Upon receipt of such
notice, (a) Borrower's right to request the making of or conversion to, and the
Bank's obligations to make or convert to, LIBOR Loans shall be suspended for so
long as such condition shall exist, and (b) Borrower shall, at the request of
such Bank, either (i) pursuant to Section 2.1.6, convert any then outstanding
LIBOR Loans into Base Rate Loans at the end of the current Interest Periods for
such Loans, or
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(ii) immediately repay pursuant to Section 2.1.7 or convert LIBOR Loans of the
affected Type into Base Rate Loans if such Bank shall notify Borrower that such
Bank may not lawfully continue to fund and maintain such Loans. Any conversion
or prepayment of LIBOR Loans made pursuant to the preceding sentence prior to
the last day of an Interest Period for such Loans shall be deemed a prepayment
thereof for purposes of Section 2.9.
2.8.3 Increased Costs. If, after the date of this Agreement, any Change
of Law:
(a) Shall subject any Bank to any tax, duty or other charge
with respect to any LIBOR Loan or Commitment, or shall change the basis of
taxation of payments by Borrower to any Bank on such a Loan or with respect to
any Commitment (except for Taxes, Other Taxes or changes in the rate of taxation
on the overall net income of any Bank); or
(b) Shall impose, modify or hold applicable any reserve,
special deposit or similar requirement (without duplication of any reserve
requirement included within the applicable Interest Rate through the definition
of "Reserve Requirement") against assets held by, deposits or other liabilities
in or for the account of, advances or loans by, or any other acquisition of
funds by any Bank for any LIBOR Loan; or
(c) Shall impose on any Bank any other condition directly
related to any LIBOR Loan or Commitment;
and the effect of any of the foregoing is to increase the cost to such Bank of
making, issuing, creating, renewing, participating in (subject to the
limitations in Section 10.13) or maintaining any such LIBOR Loan or Commitment
or to reduce any amount receivable by such Bank hereunder; then Borrower shall
from time to time, upon demand by such Bank, pay to such Bank additional amounts
sufficient to reimburse such Bank for such increased costs or to compensate such
Bank for such reduced amounts. A certificate setting forth in reasonable detail
the amount of such increased costs or reduced amounts and the basis for
determination of such amount, submitted by such Bank to Borrower, shall, in the
absence of manifest error, be conclusive and binding on Borrower for purposes of
this Agreement.
2.8.4 Capital Requirements. If any Bank determines that (a) any Change
of Law after the date of this Agreement increases the amount of capital required
or expected to be maintained by such Bank (or the Lending Office of such Bank)
or any Person controlling such Bank (a "Capital Adequacy Requirement") and (b)
the amount of capital maintained by such Bank or such Person which is
attributable to or based upon the Loans, the Commitments or this Agreement must
be increased as a result of such Capital Adequacy Requirement (taking into
account such Bank's or such Person's policies with respect to capital adequacy),
Borrower shall pay to Administrative Agent on behalf of such Bank or such
Person, upon demand of Administrative Agent on behalf of such Bank or such
Person, such amounts as such Bank or such Person shall reasonably determine are
necessary to compensate such Bank or such Person for the increased costs to such
Bank or such Person of such increased capital. A certificate of such Bank or
such Person, setting forth in reasonable detail the computation of any such
increased costs, delivered to Borrower by Administrative Agent on behalf of such
Bank or such Person shall, in the absence of manifest error, be conclusive and
binding on Borrower for purposes of this Agreement.
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2.8.5 Notice; Participating Banks' Rights. Each Bank will notify
Borrower of any event occurring after the date of this Agreement that will
entitle such Bank to compensation pursuant to this Section 2.8, as promptly as
practicable, and in no event later than 90 days after the principal officer of
such Bank responsible for administering this Agreement obtains knowledge
thereof; provided that any Bank's failure to notify Borrower within such 90 day
period shall not relieve Borrower of its obligation under this Section 2.8.5
with respect to claims arising prior to the end of such period, but shall
relieve Borrower of its obligations under this Section 2.8.5 with respect to the
time between the end of such period and such time as Borrower receives notice
from the indemnitee as provided herein. No Person purchasing from a Bank a
participation in any Commitment (as opposed to an assignment) shall be entitled
to any payment from or on behalf of Borrower pursuant to Section 2.8.3 or
Section 2.8.4 which would be in excess of the applicable proportionate amount
(based on the portion of the Commitment in which such Person is participating)
which would then be payable to such Bank if such Bank had not sold a
participation in that portion of the Commitment.
2.9 Funding Losses. If Borrower shall (a) repay or prepay any LIBOR Loans
on any day other than the last day of an Interest Period for such Loans (whether
an optional prepayment or a Mandatory Prepayment), (b) fail to borrow any LIBOR
Loans in accordance with a Notice of Borrowing delivered to Administrative Agent
(whether as a result of the failure to satisfy any applicable conditions or
otherwise), (c) fail to convert any Loans into LIBOR Loans in accordance with a
Notice of Conversion of Loan Type delivered to Administrative Agent (whether as
a result of the failure to satisfy any applicable conditions or otherwise), (d)
fail to continue a LIBOR Loan in accordance with a Confirmation of Interest
Period Selection delivered to Administrative Agent or (e) fail to make any
prepayment in accordance with any notice of prepayment delivered to
Administrative Agent; Borrower shall, upon demand by any Bank, reimburse such
Bank for all costs and losses incurred by such Bank as a result of such
repayment, prepayment or failure ("Liquidation Costs"). Borrower understands
that such costs and losses may include losses incurred by a Bank as a result of
funding and other contracts entered into by such Bank to fund LIBOR Loans. Each
Bank demanding payment under this Section 2.9 shall deliver to Borrower a
certificate setting forth in reasonable detail the basis for and the amount of
costs and losses for which demand is made. Such a certificate so delivered to
Borrower shall, in the absence of manifest error, be conclusive and binding as
to the amount of such loss for purposes of this Agreement.
2.10 Alternate Office; Minimization of Costs.
2.10.1 To the extent reasonably possible, each Bank shall designate an
alternative Lending Office with respect to its LIBOR Loans and otherwise take
any reasonable actions to reduce any liability of Borrower to any Bank under
Section 2.6.4, 2.8.3 or 2.8.4, or to avoid the unavailability of any Type of
Loans under Section 2.8.2 so long as such Bank, in its sole discretion, does not
determine that such designation is disadvantageous to such Bank.
2.10.2 If and with respect to each occasion that a Bank either makes a
demand for compensation pursuant to Section 2.6.4, 2.6.7, 2.8.3 or 2.8.4 or is
unable to fund LIBOR Loans pursuant to Section 2.8.2 or such Bank wrongfully
fails to fund a Loan, Borrower may, upon at least five Banking Days' prior
irrevocable written notice to each of such Bank and Administrative Agent, in
whole permanently replace the Commitment of such Bank; provided
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that Borrower shall replace such Commitment with the Commitment of a commercial
bank reasonably satisfactory to the Lead Arrangers. Such replacement Bank shall
upon the effective date of replacement purchase the Obligations owed to such
replaced Bank for the aggregate amount thereof and shall thereupon for all
purposes become a "Bank" hereunder. Such notice from Borrower shall specify an
effective date for the replacement of such Bank's Commitment, which date shall
not be later than the tenth day after the day such notice is given. On the
effective date of any replacement of such Bank's Commitment pursuant to this
Section 2.10.2, Borrower shall pay to Administrative Agent for the account of
such Bank (a) any fees due to such Bank to the date of such replacement; (b)
accrued interest on the principal amount of outstanding Loans held by such Bank
to the date of such replacement, and (c) the amount or amounts requested by such
Bank pursuant to each of Sections 2.6.4, 2.6.7, 2.8.3 and 2.8.4, as applicable.
Borrower will remain liable to such replaced Bank for any Liquidation Costs that
such Bank may sustain or incur as a consequence of repayment of such Bank's
Loans (unless such Bank has defaulted on its obligation to fund a Loan
hereunder). Upon the effective date of repayment of any Bank's Loans and
termination of such Bank's Commitment pursuant to this Section 2.10.2, such Bank
shall cease to be a Bank hereunder. No such termination of any such Bank's
Commitment and the purchase of such Bank's Loans pursuant to this Section 2.10.2
shall affect (i) any liability or obligation of Borrower or any other Bank to
such terminated Bank which accrued on or prior to the date of such termination
or (ii) such terminated Bank's rights hereunder in respect of any such liability
or obligation.
2.10.3 Any Bank may designate a Lending Office other than that set
forth on Exhibit H and may assign all of its interests under the Credit
Documents, and its Notes, to such Lending Office; provided that such designation
and assignment do not at the time of such designation and assignment increase
the reasonably foreseeable liability of Borrower under Sections 2.6.4, 2.8.3, or
2.8.4 or make an Interest Rate option unavailable pursuant to Section 2.8.2.
2.11 Extension of Loan Maturity Date.
2.11.1 Borrower may, not earlier than 730 days and not later than 365
days prior to the initial Date Certain, request Administrative Agent to request
that the Banks agree to an extension of the initial Date Certain for an
additional period not to exceed one year from the date of the initial Date
Certain upon the terms and conditions of this Section 2.11.
2.11.2 Upon receipt of any such request from Borrower, Administrative
Agent shall promptly notify each Bank of such request. Each Bank shall notify
Administrative Agent not later than 45 days after receiving notice of the
extension request from Administrative Agent if, in its sole discretion, it
agrees to extend its Commitment (or any portion thereof) for such additional
requested period. Each such notice from a Bank which agrees to extend such
Commitment (each, a "Renewing Bank") shall specify (i) all or that portion of
its Commitment which it is willing to extend and (ii) the amount of any
additional Commitment it would be willing to assume (with respect to any
Renewing Bank, an "Additional Commitment"). Any Bank which fails to deliver such
notice to Administrative Agent shall be deemed to have declined to renew its
Commitment for such additional requested period. Each Commitment (or portion
thereof) which is not renewed is hereinafter referred to as a "Declined
Commitment" and collectively, the "Declined Commitments." After receipt of such
notices, Administrative Agent
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shall allocate the Declined Commitments (if any) among each Renewing Bank pro
rata according to the respective amounts of their Additional Commitments
(provided that in no event shall any such Renewing Bank be allocated an amount
in excess of its Additional Commitment). On the first Business Day after the
60th day following the notice issued by Administrative Agent to the Banks of the
extension request, Administrative Agent shall advise Borrower in writing (a
"Renewal Notice"), with a copy to each of the Banks, of the affirmative
responses which it has received from the Renewing Banks and the respective
amounts of the Commitments of each Renewing Bank.
2.11.3 Subject to the following sentence, if the aggregate amount of
the Additional Commitments is less than 100% of the aggregate of the Declined
Commitments then in effect, the initial Date Certain shall only be extended if,
(i) on or before the initial Date Certain Borrower repays in accordance with
Section 2.1.7 (and subject to Section 2.3.4) the Loans outstanding comprising
Declined Commitments not being assumed pursuant to Section 2.11.4, if any, and
(ii) the Available Construction Funds, after giving effect to such repayment,
equal or exceed the remaining Project Costs of all Initial Projects and Funded
Subsequent Projects. Notwithstanding the foregoing, if the aggregate amount of
the Additional Commitments is less than 100% of the aggregate of the Declined
Commitments, Borrower may replace any Bank to the extent of such Bank's Declined
Commitment, with another commercial bank or banks reasonably satisfactory to the
Lead Arrangers and the LC Bank (a "Replacement Bank"). Borrower shall notify
Administrative Agent (who shall promptly forward such notice to the Banks), no
later than 180 days prior to the initial Loan Maturity Date, whether it will
prepay the Loans comprising the Declined Commitments in accordance with Section
2.1.7 and/or replace Banks to the extent of such Banks' Declined Commitments as
described in the preceding sentences. Each Bank whose outstanding Loans have
been repaid in full and who has been paid all other amounts due to it hereunder
shall cease to be a Bank hereunder and shall cancel and return to Borrower any
Notes held by such Bank.
2.11.4 If the aggregate amount of the Additional Commitments (including
the Commitments provided by any Replacement Banks) is equal to or greater than
100% of the aggregate of the Commitments of all Banks then in effect, the
following shall occur:
(a) the initial Date Certain shall be extended as requested by
Borrower;
(b) Borrower shall repay any Loans (and all fees and other
Obligations due in respect of such Loans) it has elected to repay pursuant to
Section 2.11.3;
(c) the Banks (including the Replacement Banks, if any) shall
enter into such assignment and assumption agreements reasonably acceptable to
Administrative Agent as may be necessary to transfer any Banks' Declined
Commitments to Banks (and Replacement Banks) extending Additional Commitments,
such assignment and assumption agreements to become effective on the initial
Date Certain (before giving effect to any extension thereof);
(d) on the initial Date Certain (prior to giving effect to any
extension thereof) each Replacement Bank shall for all purposes become a "Bank"
hereunder;
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(e) Borrower shall, if applicable, execute and deliver to each
Bank a new Note to reflect such Bank's new Commitment (after giving effect to
such Bank's Additional Commitment or Declined Commitment) and each Bank
receiving such new Note shall cancel and return to Borrower the pre-existing
Note held by such Bank; and
(f) each Bank whose outstanding Loans have been repaid in full
and who has been paid all other amounts due to it hereunder shall cease to be a
Bank hereunder and shall cancel and return to Borrower any Notes held by such
Bank.
ARTICLE 3.
CONDITIONS PRECEDENT
3.1 Conditions Precedent to the Closing Date. The occurrence of the Closing
Date is subject to the prior satisfaction of each of the following conditions
(unless waived in writing by Administrative Agent with the consent of all
Banks):
3.1.1 Resolutions. Delivery to the Lead Arrangers of a copy of one or
more resolutions or other authorizations of each of the Portfolio Entities
(other than those with respect to the Delta Energy Center Project), the Member
and Calpine, certified by the appropriate officers of each such entity as being
in full force and effect on the Closing Date, authorizing, as applicable, the
Borrowings herein provided for and the execution, delivery and performance of
this Agreement and the other Credit Documents and any instruments or agreements
required hereunder or thereunder to which such entity is a party.
3.1.2 Incumbency. Delivery to the Lead Arrangers of a certificate
satisfactory in form and substance to the Lead Arrangers from each of the
Portfolio Entities (other than those with respect to the Delta Energy Center
Project), the Member and Calpine, signed by the appropriate authorized officer
of each such entity and dated the Closing Date, as to the incumbency of the
natural persons authorized to execute and deliver this Agreement and the other
Credit Documents and any instruments or agreements required hereunder or
thereunder to which such entity is a party.
3.1.3 Formation Documents. Delivery to the Lead Arrangers of (a) a copy
of the Limited Liability Company Agreement, certified by an officer of Borrower
or the secretary or an assistant secretary of the Member as being true, correct
and complete on the Closing Date, and any related agreements or certificates
filed in accordance with applicable state law, (b) copies of the articles of
incorporation or certificate of incorporation or charter or other state
certified constituent documents of each of the Portfolio Entities (other than
those with respect to the Delta Energy Center Project), the Member and Calpine,
certified by the secretary of state of the state of formation, and (c) copies of
the Bylaws or other comparable constituent documents of each such Portfolio
Entity, the Member and Calpine, certified by its secretary or an assistant
secretary.
3.1.4 Good Standing Certificates. (a) With respect to each of the
Project Owners (other than the Delta Energy Center Project Owner), delivery to
the Lead Arrangers of certificates issued by the secretary of state of the state
in which such Project Owner's Initial Project is located and, if other than such
state, the state of formation of such Project Owner and
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(b) with respect to each of the Portfolio Entities other than such Project
Owners, the Member and Calpine, delivery to the Lead Arrangers of certificates
issued by the secretary of state of the state of formation of such Persons, in
each case certifying that such Person is in good standing and is qualified to do
business in, and has paid all franchise taxes or similar taxes due to, such
states.
3.1.5 Satisfactory Proceedings. All corporate, partnership and legal
proceedings and all instruments in connection with the transactions contemplated
by this Agreement shall be satisfactory in form and substance to the Lead
Arrangers, and the Lead Arrangers shall have received all information and copies
of all documents, including records of corporate or partnership or limited
liability company proceedings and copies of any approval by any Governmental
Authority required in connection with any transaction herein contemplated (with
respect to the Initial Projects and Turbines), which the Lead Arrangers may
reasonably have requested in connection herewith, such documents where
appropriate to be certified by proper corporate or partnership officers or
Governmental Authorities.
3.1.6 Credit Documents. Delivery to the Lead Arrangers of executed
originals of each Credit Document (except for the Consents and financing
statements recorded as fixture filings) relating to Collateral comprising the
Initial Contribution and the Turbines assigned to the Initial Projects (as set
forth on Exhibit G-3), the Project Completion Guaranty and the Turbine Purchase
Guaranty. All actions shall have been taken to provide the Banks with a valid
and perfected first priority Lien on the personal property Collateral
attributable to the Initial Contribution and the Turbines assigned to the
Initial Projects (as set forth on Exhibit G-3) (other than the Turbines assigned
to the Delta Energy Center Project (as set forth on Exhibit G-3)), including,
without limitation, the execution, delivery and filing of UCC-1 financing
statements with appropriate secretaries of state and/or other filing offices and
the delivery of the Pledged Equity Interests of each of the Portfolio Entities
(other than with respect to the Delta Energy Center Project) in accordance with
the Pledge Agreements (Pledged Equity Interests), and the delivery of the
Portfolio Entity Notes pursuant to the Borrower Security Agreement, the
Development Company Security Agreement and the CCFC II Equipment Finance Company
Security Agreement. All the documents specified above shall be in form and
substance satisfactory to the Lead Arrangers and shall have been duly
authorized, executed and delivered by the parties thereto.
3.1.7 Certificates of Borrower. The Lead Arrangers shall have received
a certificate, dated as of the Closing Date, signed by a Responsible Officer of
Borrower, in substantially the form of Exhibit F-1.
3.1.8 Legal Opinions. Delivery to the Lead Arrangers of legal opinions
of counsel to the Portfolio Entities (other than those with respect to the Delta
Energy Center Project) and their respective Affiliates that are party to any
Credit Documents addressing such Credit Documents, in each case in form and
substance satisfactory to the Lead Arrangers.
3.1.9 No Change in Tax Laws. No change shall have occurred, since the
date upon which this Agreement was executed and delivered, in any law or
regulation or interpretation thereof that would subject any Bank to any material
unreimbursed Tax or Other Tax.
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3.1.10 Absence of Litigation. (a) No action, suit, proceeding or
investigation shall have been instituted or threatened against any Portfolio
Entity and (b) except for the applicability of the FPA solely by reason of a
Project Owner being an Exempt Wholesale Generator, no order, judgment or decree
shall have been issued or proposed to be issued by any Governmental Authority
that, as a result of the construction, ownership, leasing or operation of the
Initial Projects, the sale of electricity or steam therefrom or the entering
into of any Operative Document or any transaction contemplated hereby or
thereby, would cause or deem the Banks, any Portfolio Entity or any Affiliate of
any of them to be subject to, or not exempted from, regulation under the FPA or
PUHCA or under state laws and regulations respecting the rates or the financial
or organizational regulation of electric utilities.
3.1.11 Payment of Filing Fees. All amounts required to be paid to or
deposited with the Lead Arrangers, and all taxes, fees and other costs payable
in connection with the execution, delivery, recordation and filing of the
documents and instruments referred to in this Section 3.1, shall have been paid
in full or, as approved by the Lead Arrangers, provided for.
3.1.12 Insurance. Insurance with respect to each Initial Project to
which Initial Contributions are attributable complying with Exhibit K shall be
in full force and effect and Administrative Agent on behalf of the Banks shall
have received certificates of insurance, identifying underwriters, type of
insurance, insurance limits and policy terms, listing the special provisions
required as set forth in Exhibit K and describing the insurance obtained, each
signed by the insurer or a broker authorized to bind the applicable insurer in
form and substance satisfactory to the Lead Arrangers.
3.1.13 UCC Reports. The Lead Arrangers shall have received a UCC report
of a date reasonably close to the Closing Date for each of the jurisdictions in
which the UCC-1 financing statements are intended to be filed in respect of the
Collateral attributable to the Initial Contribution or with respect to the
Turbines assigned to the Initial Projects (as set forth on Exhibit G-3), showing
that upon due filing (assuming such filing or recordation occurred on the date
of such respective reports), the security interests created under the Collateral
Documents with respect to such Collateral will be prior to all other financing
statements, or other security documents wherein the security interest is
perfected by filing in respect of such Collateral.
3.1.14 Project Budgets. Borrower shall have furnished to the Lead
Arrangers budgets in substantially the form of Appendices G-4A through G-4M for
all anticipated costs to be incurred in connection with the construction and
start-up of each of the Initial Projects, including in such budgets all
construction and non-construction costs, and including all interest, taxes and
other carrying costs, non-allocated costs of Borrower or the relevant Project
Owner, and such other information as the Lead Arrangers may require, together
with a balanced statement of sources (including an allocation between Loan
proceeds and Contributions) and uses of proceeds (and any other funds necessary
to complete each of the Initial Projects), broken down as to separate
construction phases and components, which budgets shall be satisfactory to the
Lead Arrangers.
3.1.15 Project Schedules. Borrower shall have furnished to the Lead
Arrangers a schedule of the scheduled Completion Dates for each Initial Project
in substantially the form of Exhibit G-5.
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3.1.16 Base Case Project Projections. Borrower shall have furnished to
the Lead Arrangers the Base Case Project Projections of operating expenses and
cash flow for the Initial Projects in substantially the form of Exhibit G-6 and
in form and substance satisfactory to the Lead Arrangers. Such Base Case Project
Projections shall show a minimum projected annual Four-Quarter Portfolio
Interest Coverage Ratio of no less than [*] to 1.0.
3.1.17 No Material Adverse Change. Since July 31, 2000, in the
reasonable judgment of the Lead Arrangers, there shall not have occurred any
change in the Project Budgets or Base Case Project Projections with respect to
the Initial Projects, in the economics or feasibility of constructing and/or
operating the Initial Projects or in the economics or feasibility of purchasing
the Turbines assigned to the Initial Projects (as set forth on Exhibit G-3)
which could reasonably be expected to have a Material Adverse Effect on
Borrower.
3.1.18 Establishment of Accounts. The Accounts required under Article 7
shall have been established to the satisfaction of the Lead Arrangers.
3.1.19 Representations and Warranties. Each representation and warranty
of the Member, Calpine and the Portfolio Entities under the Credit Documents
shall be true and correct in all material respects.
3.1.20 Payment of Bank and Consultants Fees. Borrower shall have paid
all outstanding amounts due and owing to (i) the Banks under any fee letters and
(ii) the Banks' attorneys and consultants including, without limitation, the
Independent Consultants, for all services rendered and billed prior to the
Closing Date.
3.1.21 Certificate of Independent Engineer. Delivery to Administrative
Agent on behalf of the Banks of the Independent Engineer's certificate with
respect to the Initial Projects, in substantially the form of Exhibit F-5, with
the Independent Engineer's report with respect to the Initial Projects attached
thereto, confirming, in form and substance satisfactory to the Lead Arrangers,
the feasibility of the Initial Projects.
3.1.22 Acquisition Closing. The Acquisitions shall have been (or shall
contemporaneously with the Closing Date be) consummated.
3.1.23 Initial Contributions. Delivery to Administrative Agent on
behalf of the Banks of documentation or other evidence, in each case in form and
substance satisfactory to the Lead Arrangers, confirming that Calpine has made
Contributions to pay Costs with respect to the Initial Projects and the Turbines
assigned thereto (as set forth on Exhibit G-3) (other than Contributions to pay
(a) Costs associated with the acquisition or lease of real property rights that
are not subject to the lien of the Collateral Documents and (b) Costs with
respect to the Delta Energy Center Project, the ▇▇▇▇▇▇▇▇ Project, the Santa ▇▇▇▇
- Phase I Project, the Broad River - Phase II Project or the Corpus - Phase I
Project and, in each case, the Turbines assigned thereto (as set forth on
Exhibit G-3)) in an amount equal to [*] prior to the Closing Date.
3.2 Conditions Precedent to the Initial Funding of the Initial Projects.
Except as provided in Schedule 3.2, the obligation of the Banks to make the
initial Construction Loans and/or issue the initial Letter of Credit with
respect to a particular Initial Project is subject to the prior satisfaction of
each of the following conditions:
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3.2.1 Borrower Equity. Contributions required pursuant to Section
5.17.1 and 5.17.2 hereof shall have been funded and applied in accordance with
Section 5.1.
3.2.2 Resolutions. Delivery to Administrative Agent on behalf of the
Banks of (a) a copy of one or more resolutions or other authorizations of the
relevant Project Owner, the relevant Equipment Finance Company (if any) and each
of the Affiliated Major Project Participants and with respect to such Initial
Project, certified by the appropriate officers of each such entity as being in
full force and effect on the Funding Date, authorizing, as applicable, the
execution, delivery and performance of the Operative Documents with respect to
such Initial Project and any instruments or agreements required hereunder or
thereunder to which such entity is a party, or (b) in so far as any of the
materials delivered pursuant to Section 3.1.1 are sufficient (in the reasonable
discretion of the Technical Committee) to satisfy the requirements set forth in
this Section 3.2.2, Borrower shall deliver a certificate by the appropriate
officers that the matters delivered under Section 3.1.1 remain in full force and
effect as of the Funding Date.
3.2.3 Incumbency. Delivery to Administrative Agent on behalf of the
Banks of (a) a certificate satisfactory in form and substance to the Technical
Committee, from the relevant Project Owner, the relevant Equipment Finance
Company (if any) and each of the Affiliated Major Project Participants with
respect to such Initial Project, signed by the appropriate authorized officer of
each such entity and dated the Funding Date, as to the incumbency of the natural
persons authorized to execute and deliver the Operative Documents with respect
to such Initial Project and any instruments or agreements required hereunder or
thereunder to which such entity is a party, or (b) in so far as any of the
materials delivered pursuant to Section 3.1.2 are sufficient (in the reasonable
discretion of the Technical Committee) to satisfy the requirements set forth in
this Section 3.2.3, Borrower shall deliver a certificate by the appropriate
officers that the matters delivered under Section 3.1.2 remain in full force and
effect as of the Funding Date.
3.2.4 Formation Documents. Delivery to Administrative Agent on behalf
of the Banks of (a) copies of the articles of incorporation or certificate of
incorporation or charter or other state certified constituent documents of the
relevant Project Owner, the relevant Equipment Finance Company (if any) and each
other Major Project Participant with respect to such Initial Project, certified,
if requested by the Technical Committee, by the secretary of state of the state
of formation, except, with respect to any Major Project Participant other than
such Project Owner or such Equipment Finance Company, where such Major Project
Participant is not the type of entity for which such state certified constituent
documents are reasonably available, and (b) copies of the Bylaws or other
comparable constituent documents of the relevant Project Owner, the relevant
Equipment Finance Company (if any) and the Affiliated Major Project Participants
with respect to such Initial Project, certified by its secretary or an assistant
secretary, or (c) in so far as any of the materials delivered pursuant to
Section 3.1.3 are sufficient (in the reasonable discretion of the Technical
Committee) to satisfy the requirements set forth in this Section 3.2.4(a) or
(b), Borrower shall deliver a certificate by the appropriate officers that the
matters delivered under Section 3.1.3 remain in full force and effect as of the
Funding Date.
3.2.5 Good Standing Certificates. For the relevant Project Owner, the
relevant Equipment Finance Company (if any) and each other Major Project
Participant with respect to such Initial Project, delivery to Administrative
Agent on behalf of the Banks of certificates issued by the secretary of state of
the state where such Initial Project is located and, if other than
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such state, the state of formation of such Major Project Participant certifying
that such Major Project Participant is in good standing and is qualified to do
business in, and has paid all franchise taxes or similar taxes due to, such
states, except, with respect to any Major Project Participant other than such
Project Owner and such Equipment Finance Company, where such Major Project
Participant is not required to qualify to do business in such state in order to
perform its obligations under any Project Document with respect to such Initial
Project to which it is a party or where such Major Project Participant is not
the type of entity for which a good standing certificates is available.
3.2.6 Satisfactory Proceedings. All corporate, partnership and legal
proceedings and all instruments in connection with the transactions contemplated
by this Agreement with respect to such Initial Project shall be satisfactory in
form and substance to the Technical Committee, and Administrative Agent on
behalf of the Banks shall have received all information and copies of all
documents, including records of corporate or partnership proceedings and copies
of any approval by any Governmental Authority required in connection with any
transaction herein contemplated (with respect to such Initial Project), which
the Technical Committee may reasonably have requested in connection herewith,
such documents where appropriate to be certified by proper corporate or
partnership officers or Governmental Authorities.
3.2.7 Operative Documents.
(a) Delivery to Administrative Agent on behalf of the Banks of
executed originals of:
(i) Amendments, supplements or modifications to each of
the Collateral Documents with respect to such Initial Project and, if not
previously delivered to Administrative Agent, the Deed of Trust with respect to
such Initial Project (or additional Collateral Documents (including, if
applicable, an Equipment Finance Company Security Agreement executed by a
relevant Equipment Finance Company in favor of Administrative Agent if
reasonably requested by the Technical Committee) considered necessary by the
Technical Committee to ensure that all rights and assets related to such Initial
Project, including all real property and personal property comprising such
Initial Project, have been pledged to Administrative Agent and the Banks;
provided, however, that if one or more Projects have previously achieved
Operation, such Liens, to the extent not previously created pursuant to Sections
3.1, 5.16 or 5.24 or otherwise in accordance with this Agreement prior to such
Projects achieving Operation, shall not secure outstanding Loans attributable to
Projects that have achieved Operation.
(ii) Consents to assignment in substantially the form
of Exhibit E-1 or otherwise in form and substance reasonably satisfactory to the
Technical Committee from the counterparties to each Major Project Document
(Major Gas Supply Contracts, Major Power Purchase Agreements and Major Gas
Transportation Agreements only to the extent then in existence), electric
transmission and interconnection agreements and material water supply agreements
in respect of such Initial Project delivered pursuant to Section 3.2.7(d).
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(iii) Affiliated Subordination Agreements substantially
in the form of Exhibit D-8 or otherwise in form and substance reasonably
satisfactory to the Technical Committee (or, if applicable, amendments to
existing Affiliated Subordination Agreements) executed by each Affiliate of
Calpine (other than the relevant Project Owner and Equipment Finance Company, if
any) entering into Project Documents with respect to such Initial Project
considered necessary by the Technical Committee to subordinate certain O&M Costs
that the relevant Project Owner may incur pursuant to such Project Documents to
the Obligations. Such O&M Costs shall only include amounts payable to such
Affiliate which do not represent reimbursement of costs payable to third parties
not Affiliates of Calpine and shall be subordinated to the Obligations to the
extent satisfactory to the Technical Committee.
(b) Subject to the proviso to Section 3.2.7(a)(i), all actions
shall have been taken to provide the Banks with a valid and perfected first
priority Lien on the Collateral in respect of such Initial Project (except as
otherwise approved by the Technical Committee, including all personal property
comprising such Initial Project) including, without limitation, to the extent
necessary, the filing of UCC-1, UCC-2 or UCC-3 financing statements, as
applicable, with respect to such Collateral with the Secretary of State and/or
other appropriate filing office in the state in which such Initial Project is
located, in the state of formation of the relevant Project Owner and Equipment
Finance Company, if any, or the state in which such Project Owner's and
Equipment Finance Company's, if any, principal place of business is located and
the execution, delivery and recordation of the Deed of Trust and fixture filings
with respect to such Initial Project.
(c) Delivery to Administrative Agent on behalf of the Banks of
a certified list of and true and correct copies of each Project Document with
respect to such Initial Project then in effect, and, in each case, any
supplements or amendments thereto and all of which Project Documents shall be
certified by a Responsible Officer of Borrower as being true, complete and
correct and in full force and effect on the Funding Date pursuant to the
certificates delivered as provided in the this Section 3.2, which certificates
shall state that neither the relevant Project Owner nor, to Borrower's
knowledge, any other party to any such Project Document is or, but for the
passage of time or giving of notice or both will be, in breach of any material
obligation thereunder, and that all conditions precedent to the performance of
the parties under such Project Documents then required to have been performed
have been satisfied.
(d) All the Major Project Documents (other than Major Gas
Supply Contracts (other than Gas Supply Contracts with Affiliates of Borrower)
and Major Power Purchase Agreements), electric transmission and interconnection
agreements and material water supply agreements with respect to such Initial
Project shall be in form and substance reasonably satisfactory to the Technical
Committee and shall have been duly authorized, executed and delivered by the
parties thereto.
(e) Delivery to Administrative Agent of (i) all shared use
agreements and/or joint ownership agreements reasonably requested by the
Technical Committee evidencing the relevant Project Owner's interests, rights
and obligations with respect to any shared facilities incorporated into or used
with respect to such Initial Project and (ii) all intercreditor agreements
and/or non-disturbance agreements reasonably requested by the Technical
Committee establishing the relative rights and remedies between Administrative
Agent on behalf of the
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Banks and any other Persons with interests in any such shared facilities or
other properties incorporated into or used with respect to such Initial Project,
in each case in form and substance satisfactory to the Technical Committee.
(f) In the event one or more Equipment Leases are associated
with such Initial Project, the equipment leasing structure implemented pursuant
to such Equipment Lease(s) shall not, in the Technical Committee's reasonable
opinion, affect in any adverse manner (i) such Initial Project's Project
Revenues available for payments under Waterfall Levels 2, 3 and 4 or (ii) the
Lien imposed by the Collateral Documents in favor of Administrative Agent on the
Collateral with respect to such Initial Project, in each case as compared to
such Initial Project assuming the equipment held by the associated Equipment
Finance Company and leased to the relevant Project Owner pursuant to such
Equipment Lease(s) (and the Project Documents related thereto) were held
directly by such Project Owner.
3.2.8 Certificate of Borrower. Administrative Agent on behalf of the
Banks shall have received a certificate, dated as of the Funding Date, signed by
a Responsible Officer of Borrower, in substantially the form of Exhibit F-2.
3.2.9 Legal Opinions. Without duplication of any legal opinions of
counsel delivered to Administrative Agent pursuant to Section 3.1.8, delivery to
Administrative Agent on behalf of the Banks of legal opinions of counsel to the
relevant Portfolio Entities, Affiliates of Calpine that are party to Operative
Documents relating to such Initial Project, each Major Project Participant
designated by the Technical Committee that is a party to a Major Project
Document delivered pursuant to Section 3.2.7(d), and each counterparty
designated by the Technical Committee to a material water supply agreement
delivered pursuant to Section 3.2.7(d) with respect to such Initial Project, in
each case in form and substance satisfactory to the Technical Committee.
3.2.10 Certificate of Insurance Consultant. Delivery to Administrative
Agent on behalf of the Banks of the Insurance Consultant's certificate with
respect to such Initial Project, in substantially the form of Exhibit F-4, with
the Insurance Consultant's report with respect to such Initial Project,
confirming the adequacy of the insurance described on Exhibit K or otherwise in
form and substance satisfactory to the Technical Committee, attached thereto.
3.2.11 Insurance. Insurance with respect to such Initial Project
complying with Exhibit K (as the same may be modified to include such Initial
Project) shall be in full force and effect and Administrative Agent on behalf of
the Banks shall have received (a) a certificate from Borrower's insurance
broker(s), dated as of the Funding Date and identifying underwriters, type of
insurance, insurance limits and policy terms, listing the special provisions
required as set forth in Exhibit K, describing the insurance obtained and
stating that such insurance is in full force and effect and that all premiums
due thereon have been paid and that, in the opinion of such broker(s), such
insurance complies with Exhibit K, and (b) certified copies of all policies
evidencing such insurance (or a binder, commitment or certificates signed by the
insurer or a broker authorized to bind the insurer), in form and substance
satisfactory to the Technical Committee.
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3.2.12 Certificate of the Independent Engineer. Delivery to
Administrative Agent on behalf of the Banks of the Independent Engineer's
certificate with respect to such Initial Project, in substantially the form of
Exhibit F-6, with the Independent Engineer's report with respect to such Initial
Project attached thereto, confirming, in form and substance satisfactory to (a)
in the case of the Projects One Through Four, the Required Banks, and (b) in the
case of all other Initial Projects, the Technical Committee, that the revenue
assumptions approved by the Power Marketing Consultant in its report delivered
to Administrative Agent on behalf of the Banks pursuant to Section 3.2.15 and
fuel price assumptions approved by the Fuel Consultant in its report delivered
to Administrative Agent on behalf of the Banks pursuant to Section 3.2.14 have
been properly incorporated into the Base Case Project Projections and that the
Project Schedule with respect to such Initial Project is consistent with the
applicable Project Budget, and the Required Banks or the Technical Committee, as
the case may be (as determined pursuant to clauses (a) and (b) above), shall be
satisfied that the projected O&M Costs and the projected performance (including
output, heat rate, environmental and Permit compliance, and availability,
individually or taken as a whole) of such Initial Project as reflected in the
Base Case Project Projections delivered to Administrative Agent on behalf of the
Banks as contemplated in Section 3.2.24 hereof and the design and other
technical aspects of such Initial Project are reasonable and achievable in a
manner consistent with the applicable Project Budget and Project Schedule.
3.2.13 Reports of the Environmental Consultant. Delivery to
Administrative Agent on behalf of the Banks of (a) Borrower's Environmental
Consultant's Phase I reports with respect to such Initial Project along with the
corresponding reliance letter from such Environmental Consultant, confirming
that no Hazardous Substances were found in, on or under the Site of such Initial
Project or (b) if Hazardous Substances were found in, on or under such real
property pursuant to such Phase I environmental report or such report otherwise
indicates that a Phase II environmental review is warranted, (i) a Phase II
environmental report with respect to such real property along with a
corresponding reliance letter from Environmental Consultant, confirming, in form
and substance satisfactory to Administrative Agent, either (A) that no Hazardous
Substances were found in, on or under such real property or (B) matters
otherwise satisfactory to the Technical Committee or (ii) an environmental
indemnity agreement in form and substance satisfactory to the Technical
Committee pursuant to which an indemnitor satisfactory to Administrative Agent
indemnifies the Portfolio Entities and the Banks from any and all damages or
other liabilities relating to or arising from Hazardous Substances then in, on
or under such real property or otherwise caused by or attributable to such
indemnitor.
3.2.14 Certificate of the Fuel Consultant. Delivery to Administrative
Agent on behalf of the Banks of the Fuel Consultant's certificate with respect
to such Initial Project, in substantially the form of Exhibit F-8, with the Fuel
Consultant's report with respect to such Initial Project attached thereto,
confirming, in form and substance satisfactory to the Technical Committee that
there is sufficient fuel available to such Initial Project to operate such
Project in the manner contemplated by, and in accordance with the fuel price
assumptions incorporated in the Base Case Project Projections delivered to
Administrative Agent on behalf of the Banks as contemplated in Section 3.2.24
and that the Fuel Plan delivered to Administrative Agent on behalf of the Banks
as contemplated in Section 3.2.17 for such Initial Project constitutes a
reasonable plan for the supply and transportation of fuel for such Initial
Project under existing
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and expected market conditions affecting such Initial Project and consistent
with the intended operation thereof.
3.2.15 Certificate of Power Marketing Consultant. Delivery to
Administrative Agent on behalf of the Banks of a Power Marketing Consultant's
certificate with respect to such Initial Project, in substantially the form of
Exhibit F-9, with a Power Marketing Consultant's report with respect to such
Initial Project attached thereto, confirming, in form and substance satisfactory
to the Technical Committee, that the revenue assumptions incorporated in the
Base Case Project Projections delivered to Administrative Agent on behalf of the
Banks as contemplated in Section 3.2.24 are reasonable in light of existing and
expected market conditions affecting such Initial Project.
3.2.16 Power Marketing Plan. Delivery to Administrative Agent on behalf
of the Banks of a plan with respect to power marketing setting forth Borrower's
good faith assessment of the projected sales of power with respect to such
Initial Project, which plan shall not in any way be construed to modify or limit
Borrower's rights and obligations set forth herein, substantially in the form of
Exhibit G-9 and otherwise satisfactory in form and substance to the Technical
Committee and the Power Marketing Consultant.
3.2.17 Fuel Plan. Delivery to Administrative Agent on behalf of the
Banks of a plan with respect to fuel setting forth Borrower's good faith
assessment of such Initial Project's projected fuel consumption needs and fuel
supply and transportation strategy, which plan shall not in any way be construed
to modify or limit Borrower's rights and obligations set forth herein,
substantially in the form of Exhibit G-10 and otherwise satisfactory in form and
substance to the Technical Committee and the Fuel Consultant.
3.2.18 Schedule of Applicable Permits and Applicable Third Party
Permits. Delivery to Administrative Agent of the schedule(s) of Permits required
to construct, own and operate such Initial Project or required to be obtained by
any Person that is party to any Project Document with respect to such Initial
Project in order to perform its obligations thereunder (a "Permit Schedule")
satisfactory in form and substance to the Technical Committee, together with (i)
copies of each Applicable Permit and Applicable Third Party Permit listed on
Parts I(A) and I(B) of such Permit Schedule, each satisfactory in form and
substance to the Technical Committee, and (ii) legal opinions of counsel to the
Portfolio Entities with respect to the matters described in the next two
sentences in form and substance satisfactory to the Technical Committee. The
relevant Project Owner (or such other Person responsible for constructing and
operating such Initial Project) shall have duly obtained or been assigned, and
there shall be in full force and effect in the relevant Project Owner's (or such
other Person responsible for constructing and operating such Initial Project)
name, and not subject to any current legal proceeding or to any unsatisfied
condition that could reasonably be expected to allow material modification or
revocation of, and all applicable appeal periods shall have expired with respect
to, the Applicable Permits for such Initial Project set forth on Parts I(A) and
I(B) of such Permit Schedule, constituting in the Technical Committee's
reasonable opinion all of the Applicable Permits for such Initial Project as of
the Funding Date. Each Major Project Participant with respect to which
responsibility for an Applicable Third Party Permit is indicated in Part I(B) of
such Permit Schedule shall have duly obtained or been assigned such Applicable
Third Party Permit and there shall be in full force and effect in such Person's
name, and not subject to any
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current legal proceeding or to any unsatisfied condition that could reasonably
be expected to allow material modification or revocation of, and all applicable
appeal periods shall have expired with respect to, each Applicable Third Party
Permit for such Project set forth on Part I(B) of such Project Schedule,
constituting in the Technical Committee's reasonable opinion all of the
Applicable Third Party Permits for such Initial Project as of the Funding Date.
Part II(A) of such Permit Schedule shall list all other Permits required by the
relevant Project Owner or other Person responsible for constructing and
operating such Initial Project to construct, own and operate such Initial
Project as contemplated by the Operative Documents. Part II(B) of such Permit
Schedule shall list all other material Permits required by any other Major
Project Participant with respect to such Initial Project to perform its
obligations under the Operative Documents with respect to such Initial Project
to which it is a party. The Permits listed in Parts II(A) and II(B) of such
Permit Schedule shall either (a) in the Technical Committee's reasonable
opinion, be timely obtainable at a cost consistent with the applicable Project
Budget without material difficulty or delay prior to the time the relevant
Project Owner or the applicable other Major Project Participant, as applicable,
requires such Permits, or (b) there shall exist alternative solutions (the
expected cost of which is reflected in the applicable Project Budget) reasonably
satisfactory to the Independent Engineer which would eliminate the need for such
Permit. Except as disclosed in such Permit Schedule, the Permits listed in Parts
I(A) and I(B) of such Permit Schedule shall not be subject to any restriction,
condition, limitation or other provision that could reasonably be expected to
have a Material Adverse Effect on such Initial Project or result in such Initial
Project being operated in a manner not substantially as assumed in the Base Cost
Project Projections.
3.2.19 No Change in Tax Laws. No change shall have occurred, since the
date upon which this Agreement was executed and delivered, in any law or
regulation or interpretation thereof that would subject any Bank to any material
unreimbursed Tax or Other Tax.
3.2.20 Absence of Litigation. (a) No action, suit, proceeding or
investigation shall have been instituted or threatened against any Portfolio
Entity in respect of such Initial Project which could reasonably be expected to
have a Material Adverse Effect on Borrower or such Initial Project, and (b)
except for the applicability of the FPA solely by reason of the relevant Project
Owner being an Exempt Wholesale Generator, no order, judgment or decree shall
have been issued or proposed to be issued by any Governmental Authority that, as
a result of the construction, ownership, leasing or operation of such Initial
Project, the sale of electricity or steam therefrom or the entering into of any
Operative Document with respect to such Initial Project or any transaction
contemplated hereby or thereby, would cause or deem the Banks, any Portfolio
Entity or any Affiliate of any of them to be subject to, or not exempted from,
regulation under the FPA or PUHCA or under state laws and regulations respecting
the rates or the financial or organizational regulation of electric utilities.
3.2.21 Payment of Filing Fees. All amounts required to be paid to or
deposited with the Banks (including the Activation Fee with respect to a
Substituted Initial Project) in respect of such Initial Project, and all taxes,
fees and other costs payable in connection with the execution, delivery,
recordation and filing of the documents and instruments referred to in this
Section 3.2, shall have been paid in full or, as approved by the Technical
Committee, provided for.
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3.2.22 Financial Statements. Administrative Agent on behalf of the
Banks shall have received the most recent annual financial statements (audited
if available) or Form 10-K and most recent quarterly financial statements or
Form 10-Q from Borrower, the relevant Project Owner and the relevant Equipment
Finance Company, if any, and, in the case of the first Initial Project to become
a Funded Project, each of the other Portfolio Entities (other than those with
respect to the Delta Energy Center Project, such financial statements to be
provided on or before the Funding Date of such Project) and, to the extent
reasonably obtainable, each other Major Project Participant with respect to such
Initial Project (or their respective parent entities), together (in the case of
such Project Owner, such Equipment Finance Company and the Affiliated Major
Project Participants with respect to such Initial Project and, in the case of
the first Initial Project to become a Funded Project, each of the other
Portfolio Entities (other than those with respect to the Delta Energy Center
Project, such financial statements to be provided on or before the Funding Date
of such Project)) with certificates from the appropriate Responsible Officer
thereof, stating that no material adverse change in the consolidated assets,
liabilities, operations or financial condition of such Person has occurred from
those set forth in the most recent financial statements or the balance sheet, as
the case may be, provided to Administrative Agent on behalf of the Banks.
3.2.23 UCC Reports. Administrative Agent on behalf of the Banks shall
have received a UCC report of a date reasonably close to the Funding Date for
each of the jurisdictions in which any UCC-1 financing statements or amendments
thereto are intended to be filed in respect of the Collateral with respect to
such Initial Project, showing that upon due filing (assuming such filing or
recordation occurred on the date of such respective reports), the security
interests created under the Collateral Documents with respect to such Initial
Project will be prior to all other financing statements or other security
documents wherein the security interest is perfected by filing in respect of
such Collateral.
3.2.24 Base Case Project Projections. Borrower shall have furnished to
Administrative Agent on behalf of the Banks the combined Base Case Project
Projections of operating expenses and cash flow for such Initial Project and all
other Funded Projects showing, for each year in such projections, a projected
annual Four-Quarter Portfolio Interest Coverage Ratio equal to or exceeding 90%
of the projected annual Four-Quarter Portfolio Interest Coverage Ratio reflected
in the Base Case Project Projections delivered with respect to such Projects
pursuant to Section 3.1.16 and, if applicable, Section 3.3.27 (which ratio shall
be supported by the projections set forth in the Independent Consultant's
reports delivered pursuant to this Section 3.2 and, if applicable, Section 3.3
with respect to such Projects) in substantially the form (including the duration
thereof) of those projections delivered pursuant to Section 3.1.16 and otherwise
in form and substance satisfactory to the Technical Committee.
3.2.25 Project Schedules; Project Budgets. Borrower shall have
furnished to Administrative Agent (a) a detailed project schedule for such
Initial Project, which project schedule shall be in form and substance
satisfactory to the Technical Committee and the Independent Engineer, and (b) a
Project Budget for such Initial Project, updated from the applicable budget
submitted for such Project pursuant to Section 3.1.14, and otherwise in form and
substance reasonably satisfactory to the Technical Committee.
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3.2.26 No Material Adverse Change. No event or circumstance having a
Material Adverse Effect with respect to Borrower has occurred since the Closing
Date, and, with respect to such Initial Project, no event or circumstance having
a Material Adverse Effect with respect to such Initial Project shall have
occurred.
3.2.27 Real Estate Rights; A.L.T.A. Surveys. The Technical Committee
shall (a) be satisfied that the relevant Project Owner (or other Person who
holds direct ownership interests in such Initial Project) shall have obtained
all real estate rights necessary for construction and operation of such Initial
Project other than (i) such rights as can be obtained through eminent domain
proceedings or (ii) rights, the procurement of which, in the Technical
Committee's reasonable judgment, is not subject to the discretion of any third
party, and in the case of either clause (i) or (ii) above, the Technical
Committee shall be satisfied that any rights which have not been obtained can be
obtained without material difficulty or delay by the time they are needed, and
(b) have received A.L.T.A. surveys of the Site and, unless not required by the
Technical Committee, the Easements with respect to such Initial Project in
existence on the Funding Date, satisfactory in form and substance to the
Technical Committee and the Title Insurer, reasonably current and certified to
the Technical Committee by a licensed surveyor satisfactory to the Technical
Committee, showing (i) as to such Site, the exact location and dimensions
thereof, including the location of all means of access thereto and all easements
relating thereto and showing the perimeter within which all foundations are or
are to be located; (ii) as to such Easements in existence on the Funding Date,
the exact location and dimensions thereof, including the location of all means
of access thereto, and all improvements or other encroachments in or on such
Easements in existence on the Funding Date; (iii) the existing utility
facilities servicing such Initial Project (including water, electricity, gas,
telephone, sanitary sewer and storm water distribution and detention
facilities); (iv) that such existing improvements do not encroach or interfere
with adjacent property or existing easements or other rights (whether on, above
or below ground), and that there are no gaps, gores, projections, protrusions or
other survey defects; (v) whether such Site or any portion thereof is located in
a special earthquake or flood hazard zone; and (vi) that there are no other
matters that could reasonably be expected to be disclosed by a survey
constituting a defect in title other than Permitted Encumbrances with respect to
such Initial Project; provided, however, that the matters described in clauses
(ii) and (v) of this subsection (b) may be shown by separate maps, surveys or
other information reasonably satisfactory to the Technical Committee.
3.2.28 Title Policies. Borrower shall have delivered to Administrative
Agent on behalf of the Banks a lender's A.L.T.A. policy of title insurance
(with, in the case of Easements with respect to which A.L.T.A. surveys were not
required by the Technical Committee pursuant to Section 3.2.27, appropriate
survey exceptions), together with such endorsements as are required by the
Technical Committee (without a mechanics' or materialmen's exception included in
such title policy, except where applicable Governmental Rules prevent the
deletion of such exception), or commitment to issue such policy, dated as of the
Funding Date (x) in an amount equal to 50% of the aggregate amount of Project
Costs set forth in the Project Budget for such Initial Project (or such other
amount as is reasonably acceptable to the Technical Committee) and (y) with such
reinsurance as is satisfactory to the Technical Committee, issued by the Title
Insurer in form and substance satisfactory to the Technical Committee, insuring
(or agreeing to insure) that:
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(a) the relevant Project Owner has a good, marketable and
insurable fee or leasehold title to or right to control, occupy and use the Site
and the Easements with respect to such Initial Project, free and clear of liens,
encumbrances or other exceptions to title except Permitted Liens described in
clause (a), (b) or (e) of the definition thereof, those permitted pursuant to
this Section 3.2.28 and those satisfactory to the Technical Committee and
specified on such policy; and
(b) the Deed of Trust with respect to such Initial Project is
(or will be when recorded) a valid first lien on the Mortgaged Property with
respect to such Initial Project, free and clear of all liens, encumbrances and
exceptions to title whatsoever, other than those encumbrances permitted pursuant
to Section 3.2.28(a).
3.2.29 Regulatory Status. Such Initial Project shall (a) have complied
with the requirements of 18 C.F.R. Section 292.207 required to be complied with
as of the Funding Date and delivered to Administrative Agent, in form and
substance satisfactory to the Technical Committee, either (i) a certificate of
FERC certifying such Initial Project as a Qualifying Facility, or (ii)
documentation evidencing the self-certification of such Initial Project as a
Qualifying Facility and a legal opinion of counsel to the Portfolio Entities
with respect to the effectiveness of such documentation to qualify such Initial
Project as a Qualifying Facility or (b) be or be capable of becoming an Eligible
Facility, and Administrative Agent shall have received a legal opinion of
counsel to the Portfolio Entities in form and substance satisfactory to the
Technical Committee to the effect that there exists no reasonable basis for FERC
to deny an application filed by the Project Owner of such Initial Project
pursuant to Section 5.12 for Exempt Wholesale Generator status.
3.2.30 Notice to Proceed. The Prime Contractor with respect to such
Initial Project shall have been given an unconditional notice to proceed or
otherwise been unconditionally directed to begin performance under the Prime
Construction Contract to which it is a party on or prior to the Funding Date.
3.2.31 Representations and Warranties. Each representation and warranty
of Borrower, the Portfolio Entities with respect to such Initial Project, the
Member, Calpine and the Non-Affiliated Parents with respect to such Initial
Project, if any, and under the Credit Documents and each representation and
warranty of Borrower, the relevant Project Owner and the relevant Equipment
Finance Company, if any, under the other Operative Documents, in each case with
respect to itself or such Initial Project, shall be true and correct in all
material respects as if made on the Funding Date, unless such representation or
warranty expressly relates solely to another time.
3.2.32 Utilities. Administrative Agent on behalf of the Banks has
received evidence acceptable to the Technical Committee that all necessary gas
and electrical interconnections and utility services are either contracted for,
or will be readily available on reasonable economic terms, at such Initial
Project.
3.2.33 Calpine Compliance. No "event of default" (as defined therein)
under any agreement or instrument documenting or evidencing any of Calpine's
Debt obligations that are greater than $10,000,000 shall have occurred and be
continuing.
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3.2.34 Calpine Guaranties. Calpine shall have executed (a) an
acknowledgement, in form and substance satisfactory to the Technical Committee,
that such Initial Project shall be included with the obligations undertaken
pursuant to the Project Completion Guaranty and (b) (i) in the case of each
Person party to a Project Document that is directly or indirectly more than 50%
owned by Calpine (other than the relevant Project Owner and Equipment Finance
Company, if any), an Affiliated Party Agreement Guaranty in respect of each
Project Document (guarantying 100% of such Person's obligations under each such
Project Document) entered into between the relevant Project Owner and such
Person for such Initial Project or (ii) in the case of each Person party to a
Project Document that is directly or indirectly 50% owned by Calpine (other than
the relevant Project Owner and Equipment Finance Company, if any), an Affiliated
Party Agreement Guaranty in respect of each Project Document (guarantying at
least Calpine's percentage ownership interest of such Person's obligations under
each such Project Document) entered into between the relevant Project Owner and
such Person for such Initial Project; provided, in the case of clause (b)(ii) of
this Section 3.2.34, Borrower shall also deliver to Administrative Agent a
guaranty agreement in favor of the relevant Project Owner in respect of each
such Project Document, executed by a guarantor satisfactory to the Technical
Committee and in form and substance satisfactory to the Technical Committee,
guarantying those obligations of such Person under each such Project Document
not otherwise addressed in the relevant Affiliated Party Agreement Guaranty
delivered pursuant to such clause.
3.2.35 Updated Exhibits. Borrower shall have delivered to
Administrative Agent a supplement to Exhibit K reflecting any additional or
revised insurance policies or coverages required by the Insurance Consultant to
account for such Initial Project, in each case reasonably satisfactory to the
Technical Committee.
3.2.36 Calpine Corporation Credit Rating. Calpine shall be rated at
least Ba2 by ▇▇▇▇▇'▇ and BB by S&P.
3.2.37 Delta Energy Center Project Requirements. In the event such
Initial Project is the Delta Energy Center Project, delivery to Administrative
Agent on behalf of the Banks, without duplication of any of the requirements set
forth in this Section 3.2, of the items set forth in Sections 3.1.1, 3.1.2,
3.1.3, 3.1.4, 3.1.6 and 3.1.8 with respect to the Portfolio Entities and the
Non-Affiliated Parent related to the Delta Energy Center Project.
3.3 Conditions Precedent to the Initial Funding of the Subsequent Projects.
Subject to Section 3.3.41, the obligation of the Banks to make the initial
Construction Loans with respect to a particular Subsequent Project is subject to
the prior satisfaction of each of the following conditions:
3.3.1 Borrower Equity. Contributions required pursuant to Section
5.17.1 and 5.17.2 hereof shall have been funded and applied in accordance with
Section 5.1.
3.3.2 Joint Venture Projects. In the case of a Subsequent Project that
is only partially owned by the relevant Project Owner, (a) Administrative Agent
on behalf of the Banks shall have received all joint venture, joint tenancy,
joint operating or other documents relating to the joint ownership, operation or
governance of such Subsequent Project (collectively, the "Joint Venture
Agreement"), in form and substance satisfactory to the Technical Committee,
including
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provisions (i) requiring all parties to the Joint Venture Agreement (the "Joint
Venturers") to fund their respective obligations in connection with the
development, construction and operation of such Subsequent Project, providing
reasonable remedies for a Joint Venturer's failure to fund, and permitting the
relevant Project Owner to fund such obligations if any of the Joint Venturers
fail to do so, (ii) permitting the relevant Project Owner to ▇▇▇▇▇ ▇ ▇▇▇▇ on its
interest in such Subsequent Project in favor of the Banks pursuant to this
Agreement, and (iii) prohibiting any of the other Joint Venturers from granting
a Lien on or otherwise encumbering the relevant Project Owner's interest in such
Subsequent Project and (b) if required by applicable law, such Joint Venture
Agreement or the relative rights of the Joint Venturers in such Subsequent
Project (or a memorandum thereof) shall have been recorded or filed, as
applicable, in the appropriate public records in order to give third parties
notice of such Joint Venture Agreement.
3.3.3 Resolutions. Delivery to Administrative Agent on behalf of the
Banks of a copy of one or more resolutions or other authorizations of the
relevant Project Owner, the relevant Equipment Finance Company (if any) and all
other Portfolio Entities with respect to such Subsequent Project and each
Affiliated Major Project Participant with respect to such Subsequent Project,
certified by the appropriate officers of each such entity as being in full force
and effect on the Funding Date, authorizing, as applicable, the execution,
delivery and performance of the Operative Documents with respect to such
Subsequent Project and any instruments or agreements required hereunder or
thereunder to which such entity is a party.
3.3.4 Incumbency. Delivery to Administrative Agent on behalf of the
Banks of a certificate satisfactory in form and substance to the Technical
Committee, from the relevant Project Owner, the relevant Equipment Finance
Company (if any) and all other Portfolio Entities with respect to such
Subsequent Project and each Affiliated Major Project Participant with respect to
such Subsequent Project, signed by the appropriate authorized officer of each
such entity and dated the Funding Date, as to the incumbency of the natural
persons authorized to execute and deliver the Operative Documents with respect
to such Subsequent Project and any instruments or agreements required hereunder
or thereunder to which such entity is a party.
3.3.5 Formation Documents. Delivery to Administrative Agent on behalf
of the Banks of (a) copies of the articles of incorporation or certificate of
incorporation or charter or other state certified constituent documents of the
relevant Project Owner, the relevant Equipment Finance Company (if any) and all
other Portfolio Entities with respect to such Subsequent Project, each other
Major Project Participant with respect to such Subsequent Project and each
Non-Affiliated Parent with respect to such Subsequent Project, if any,
certified, if requested by the Technical Committee, by the secretary of state of
the state of formation, except, with respect to any Major Project Participant
other than such Project Owner or such Equipment Finance Company or other
Portfolio Entities, where such Major Project Participant is not the type of
entity for which such state certified constituent documents are reasonably
available, and (b) copies of the Bylaws or other comparable constituent
documents of the relevant Project Owner, the relevant Equipment Finance Company
(if any) and all other Portfolio Entities with respect to such Subsequent
Project and each Affiliated Major Project Participant with respect to such
Subsequent Project, certified by its secretary or an assistant secretary.
3.3.6 Good Standing Certificates. (a) For the relevant Project Owner,
the relevant Equipment Finance Company (if any) and each other Major Project
Participant with
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respect to such Subsequent Project, delivery to Administrative Agent on behalf
of the Banks of certificates issued by the secretary of state of the state where
such Subsequent Project is located and, if other than such state, the state of
formation of such Major Project Participant, and (b) with respect to each
Portfolio Entity with respect to such Subsequent Project (other than the
relevant Project Owner and Equipment Finance Company, if any) and each
Non-Affiliated Parent with respect to such Subsequent Project, if any, delivery
to the Lead Arrangers of certificates issued by the secretary of state of the
state of formation of such Persons, in each case certifying that such Person is
in good standing and is qualified to do business in, and has paid all franchise
taxes or similar taxes due to, such states, except, with respect to any Major
Project Participant other than such Project Owner, such Equipment Finance
Company or other Portfolio Entities, where such Major Project Participant is not
required to qualify to do business in such state in order to perform its
obligations under any Project Document with respect to such Subsequent Project
to which it is a party or where such Major Project Participant is not the type
of entity for which a good standing certificate is available.
3.3.7 Satisfactory Proceedings. All corporate, partnership and legal
proceedings and all instruments in connection with the transactions contemplated
by this Agreement with respect to such Subsequent Project shall be satisfactory
in form and substance to the Technical Committee, and Administrative Agent on
behalf of the Banks shall have received all information and copies of all
documents, including records of corporate or partnership proceedings and copies
of any approval by any Governmental Authority required in connection with any
transaction herein contemplated (with respect to such Subsequent Project), which
the Technical Committee may reasonably have requested in connection herewith,
such documents where appropriate to be certified by proper corporate or
partnership officers or Governmental Authorities.
3.3.8 Operative Documents.
(a) Delivery to Administrative Agent on behalf of the Banks of
executed originals of:
(i) Amendments, supplements or modifications to each of
the Collateral Documents with respect to such Subsequent Project (or additional
Collateral Documents if reasonably requested by the Technical Committee,
including a Project Owner Guaranty and a Project/Turbine Owner Security
Agreement executed by the Project Owner with respect to such Subsequent Project,
an Equipment Finance Company Security Agreement executed by the Equipment
Finance Company with respect to such Subsequent Project, if applicable, and
Pledge Agreements (Pledged Equity Interests) executed by each Portfolio Entity
with respect to such Subsequent Project (other than the relevant Project Owner
and Equipment Finance Company, if any) and the Non-Affiliated Parents with
respect to such Subsequent Project, if any) considered necessary by the
Technical Committee to ensure that all rights and assets related to such
Subsequent Project, including all real property and personal property comprising
such Subsequent Project and all rights of the relevant Project Owner under any
Joint Venture Agreement relating to such Subsequent Project, have been pledged
to Administrative Agent and the Banks; provided, however, as set forth in the
relevant Project/Turbine Owner Security Agreement, Equipment Finance Company
Security Agreement, Pledge Agreement(s) (Pledged Equity Interests) and Deed of
Trust, the Lien on the Collateral comprising such
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Subsequent Project and the ownership interests in the relevant Portfolio
Entities shall not secure those Obligations relating to or arising from Projects
that have achieved Operation prior to the Funding Date.
(ii) Consents to assignment in substantially the form
of Exhibit E-1 or otherwise in form and substance reasonably satisfactory to the
Technical Committee from the counterparties to each Major Project Document
(Major Gas Supply Contracts, Major Power Purchase Agreements and Major Gas
Transportation Agreements only to the extent then in existence), electric
transmission and interconnection agreements and material water supply agreements
in respect of such Subsequent Project delivered pursuant to Section 3.3.8(d).
(iii) Affiliated Subordination Agreements substantially
in the form of Exhibit D-8 or otherwise in form and substance reasonably
satisfactory to the Technical Committee (or, if applicable, amendments to
existing Affiliated Subordination Agreements) executed by each Affiliate of
Calpine (other than the relevant Project Owner and Equipment Finance Company, if
any) entering into Project Documents with respect to such Subsequent Project
considered necessary by the Technical Committee to subordinate certain O&M Costs
that the relevant Project Owner may incur pursuant to such Project Documents to
the Obligations. Such O&M Costs shall only include amounts payable to such
Affiliate which do not represent reimbursement of costs payable to third parties
not Affiliates of Calpine and shall be subordinated to the Obligations to the
same extent as O&M Costs are subordinated to the Obligations in the
corresponding documents furnished by Borrower pursuant to Section 3.2.8 or
otherwise to the extent satisfactory to the Technical Committee.
(b) Borrower shall have delivered to Administrative Agent the
federal employer number and all other information requested by Administrative
Agent with respect to the Portfolio Entities and the Non-Affiliated Parents, if
any, with respect to such Subsequent Project and all actions shall have been
taken to provide the Banks with a valid and perfected first priority Lien on the
Collateral in respect of such Subsequent Project (except as otherwise approved
by the Technical Committee, including all personal property comprising such
Subsequent Project) including, without limitation, to the extent necessary, the
execution, delivery and recordation of the Deed of Trust and fixture filings
with respect to such Subsequent Project in the appropriate locations, the filing
of UCC-1, UCC-2 or UCC-3 financing statements, as applicable, with respect to
such Collateral with the Secretary of State and/or other appropriate filing
office in the states in which such Subsequent Project is located, the states of
formation of the relevant Portfolio Entities or Non-Affiliated Parents or the
states in which such Portfolio Entities' or Non-Affiliated Parents' principal
places of business are located, the delivery of the Pledged Equity Interests of
the Portfolio Entities with respect to such Subsequent Project in accordance
with the relevant Pledge Agreements (Pledged Equity Interests) and the delivery
of a Portfolio Entity Note executed by the relevant Project Owner and Equipment
Finance Company, if any.
(c) Delivery to Administrative Agent on behalf of the Banks of
a certified list of, and true and correct copies of, each Project Document with
respect to such Subsequent Project then in effect, and, in each case, any
supplements or amendments thereto, and all of which Project Documents shall be
certified by a Responsible Officer of Borrower as being true, complete and
correct and in full force and effect on the Funding Date pursuant to the
certificates
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delivered as provided in this Section 3.3, which certificates shall state that
neither the relevant Project Owner nor, to Borrower's knowledge, any other party
to any such Project Document is or, but for the passage of time or giving of
notice or both will be, in breach of any material obligation thereunder, and
that all conditions precedent to the performance of the parties under such
Project Documents then required to have been performed have been satisfied.
(d) All the Major Project Documents (other than Major Gas
Supply Contracts (other than Gas Supply Contracts with Affiliates of Borrower)
and Major Power Purchase Agreements), electric transmission and interconnection
agreements and material water supply agreements with respect to such Subsequent
Project shall be substantially similar to the corresponding documents furnished
by Borrower pursuant to Section 3.2.7 (to the extent there are such
corresponding documents) with counterparties reasonably acceptable to the
Technical Committee and conforming changes to address the specifics of such
Subsequent Project or otherwise in form and substance reasonably satisfactory to
the Technical Committee, shall have been duly authorized, executed and delivered
by the parties thereto.
(e) Delivery to Administrative Agent of (i) all shared use
agreements and/or joint ownership agreements reasonably requested by the
Technical Committee evidencing the relevant Project Owner's interests, rights
and obligations with respect to any shared facilities incorporated into or used
with respect to such Subsequent Project, (ii) all intercreditor agreements
and/or non-disturbance agreements reasonably requested by the Technical
Committee establishing the relative rights and remedies between Administrative
Agent on behalf of the Banks and any other Persons with interests in any such
shared facilities or other properties incorporated into or used with respect to
such Subsequent Project and (iii) in the case of a Subsequent Project where the
relevant Project Owner is directly or indirectly partially owned by Borrower,
all joint venture, joint operating or other documents relating to the joint
ownership or joint governance of such Project Owner between the Portfolio
Entities and the Non-Affiliated Parents with respect to such Subsequent Project,
in each case in form and substance satisfactory to the Technical Committee.
(f) In the event one or more Equipment Leases are associated
with such Subsequent Project, the equipment leasing structure implemented
pursuant to such Equipment Lease(s) shall not, in the Technical Committee's
reasonable opinion, affect in any adverse manner (i) such Subsequent Project's
Project Revenues available for payments under Waterfall Levels 2, 3 and 4 or
(ii) the Lien imposed by the Collateral Documents in favor of Administrative
Agent on the Collateral with respect to such Subsequent Project, in each case as
compared to such Subsequent Project assuming the equipment held by the
associated Equipment Finance Company and leased to the relevant Project Owner
pursuant to such Equipment Lease(s) (and the Project Documents related thereto)
were held directly by such Project Owner.
3.3.9 Certificate of Borrower. Administrative Agent on behalf of the
Banks shall have received a certificate, dated as of the Funding Date, signed by
a Responsible Officer of Borrower, in substantially the form of Exhibit F-2.
3.3.10 Legal Opinions. Delivery to Administrative Agent on behalf of
the Banks of legal opinions of counsel to the relevant Portfolio Entities,
Affiliates of Calpine that are party to Operative Documents relating to such
Subsequent Project, the Non-Affiliated Parents with
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respect to such Subsequent Project, if any, and each Major Project Participant
designated by the Technical Committee that is a party to a Major Project
Document delivered pursuant to Section 3.3.8(d) and each counterparty designated
by the Technical Committee to a material water supply agreement delivered
pursuant to Section 3.3.8(d) with respect to such Subsequent Project,
substantially similar to the corresponding opinions furnished by Borrower
pursuant to Section 3.1.8 or 3.2.9, as the case may be, with conforming changes
to address the specifics of such Subsequent Project or otherwise in form and
substance satisfactory to the Technical Committee.
3.3.11 Certificate of Insurance Consultant. Delivery to Administrative
Agent on behalf of the Banks of the Insurance Consultant's certificate with
respect to such Project, in substantially the form of Exhibit F-4, with the
Insurance Consultant's report with respect to such Subsequent Project,
confirming the adequacy of the insurance described on Exhibit K or otherwise in
form and substance satisfactory to the Technical Committee, attached thereto.
3.3.12 Insurance. Insurance with respect to such Subsequent Project
complying with Exhibit K (as the same may be modified to include such Subsequent
Project) shall be in full force and effect and Administrative Agent on behalf of
the Banks shall have received (a) a certificate from Borrower's insurance
broker(s), dated as of the Funding Date and identifying underwriters, type of
insurance, insurance limits and policy terms, listing the special provisions
required as set forth in Exhibit K, describing the insurance obtained and
stating that such insurance is in full force and effect and that all premiums
due thereon have been paid and that, in the opinion of such broker(s), such
insurance complies with Exhibit K, and (b) certified copies of all policies
evidencing such insurance (or a binder, commitment or certificates signed by the
insurer or a broker authorized to bind the insurer), in form and substance
satisfactory to the Technical Committee.
3.3.13 Certificate of the Independent Engineer. Delivery to
Administrative Agent on behalf of the Banks of the Independent Engineer's
certificate with respect to such Subsequent Project, in substantially the form
of Exhibit F-6, with the Independent Engineer's report with respect to such
Subsequent Project attached thereto, confirming, in form and substance
satisfactory to the Technical Committee, that the revenue assumptions approved
by the Power Marketing Consultant in its report delivered to Administrative
Agent on behalf of the Banks pursuant to Section 3.3.16 and fuel price
assumptions approved by the Fuel Consultant in its report delivered to
Administrative Agent on behalf of the Banks pursuant to Section 3.3.15 have been
properly incorporated into the Base Case Project Projections and that the
Project Schedule with respect to such Subsequent Project is consistent with the
applicable Project Budget, and the Technical Committee shall be satisfied that
the projected O&M Costs and the projected performance (including output, heat
rate, environmental and Permit compliance, and availability, individually or
taken as a whole) of such Subsequent Project as reflected in the Base Case
Project Projections delivered to Administrative Agent on behalf of the Banks as
contemplated in Section 3.3.27 hereof and the design and other technical aspects
of, such Subsequent Project, are reasonable and achievable in a manner
consistent with the applicable Project Budget and Project Schedule.
3.3.14 Reports of the Environmental Consultant. Delivery to
Administrative Agent on behalf of the Banks of (a) Borrower's Environmental
Consultant's Phase I reports with
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respect to such Subsequent Project, along with the corresponding reliance
letters from such Environmental Consultant, confirming that no Hazardous
Substances were found in, on or under the Site of such Subsequent Project or (b)
if Hazardous Substances were found in, on or under such real property pursuant
to such Phase I environmental report, or such report otherwise indicates that a
Phase II environmental review is warranted, (i) a Phase II environmental report
with respect to such real property along with a corresponding reliance letter
from Environmental Consultant, confirming in form and substance satisfactory to
Administrative Agent, either (A) that no Hazardous Substances were found in, on
or under such real property or (B) matters otherwise satisfactory to the
Technical Committee or (ii) an environmental indemnity agreement in form and
substance satisfactory to the Technical Committee pursuant to which an
indemnitor satisfactory to Administrative Agent indemnifies the Portfolio
Entities and the Banks from any and all damages or other liabilities relating to
or arising from Hazardous Substances then in, on or under such real property or
otherwise caused by or attributable to such indemnitor.
3.3.15 Certificate of the Fuel Consultant. Delivery to Administrative
Agent on behalf of the Banks of the Fuel Consultant's certificate with respect
to such Subsequent Project, in substantially the form of Exhibit F-8, with the
Fuel Consultant's report with respect to such Subsequent Project attached
thereto, confirming, in form and substance satisfactory to the Technical
Committee that there is sufficient fuel available to such Subsequent Project to
operate such Subsequent Project in the manner contemplated by, and in accordance
with the fuel price assumptions incorporated in the Base Case Project
Projections delivered to Administrative Agent on behalf of the Banks as
contemplated in Section 3.3.27 and that the Fuel Plan delivered to
Administrative Agent on behalf of the Banks as contemplated in Section 3.3.18
for such Subsequent Project constitutes a reasonable plan for the supply and
transportation of fuel for such Project under existing and expected market
conditions affecting such Subsequent Project and consistent with the intended
operation thereof.
3.3.16 Certificate of Power Marketing Consultant. Delivery to
Administrative Agent on behalf of the Banks of a Power Marketing Consultant's
certificate with respect to such Subsequent Project, in substantially the form
of Exhibit F-9, with a Power Marketing Consultant's report with respect to such
Subsequent Project attached thereto, confirming, in form and substance
satisfactory to the Technical Committee, that the revenue assumptions
incorporated in the Base Case Project Projections delivered to Administrative
Agent on behalf of the Banks as contemplated in Section 3.3.27 are reasonable in
light of existing and expected market conditions affecting such Subsequent
Project.
3.3.17 Power Marketing Plan. Delivery to Administrative Agent on behalf
of the Banks of a plan with respect to power marketing setting forth Borrower's
good faith assessment of the projected sales of power with respect to such
Subsequent Project, which plan shall not in any way be construed to modify or
limit Borrower's rights and obligations set forth herein, substantially in the
form of the Power Marketing Plans furnished by Borrower pursuant to Section
3.2.16 and with such additional changes satisfactory in form and substance to
the Technical Committee as may be appropriate under the circumstances.
3.3.18 Fuel Plan. Delivery to Administrative Agent on behalf of the
Banks of a plan with respect to fuel setting forth Borrower's good faith
assessment of such Subsequent Project's projected fuel consumption needs and
fuel supply and transportation strategy, which
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plan shall not in any way be construed to modify or limit Borrower's rights and
obligations set forth herein, substantially in the form of the Fuel Plans
delivered furnished by Borrower pursuant to Section 3.2.17 and with such
additional changes satisfactory in form and substance to the Technical Committee
and the Fuel Consultant as may be appropriate under the circumstances.
3.3.19 Schedule of Applicable Permits and Applicable Third Party
Permits. Delivery to Administrative Agent of the Permit Schedule with respect to
such Subsequent Project, substantially similar to the Permit Schedules furnished
by Borrower pursuant to Section 3.2.18 with conforming changes to address the
specifics of such Subsequent Project and otherwise satisfactory in form and
substance to the Technical Committee, together with (i) copies of each
Applicable Permit and Applicable Third Party Permit listed on Parts I(A) and
I(B) of such Permit Schedule, each satisfactory in form and substance to the
Technical Committee, and (ii) legal opinions of counsel to the Portfolio
Entities with respect to the matters described in the next two sentences,
substantially similar to the corresponding opinions furnished by Borrower
pursuant to Section 3.2.18 with conforming changes to address the specifics of
such Subsequent Project or otherwise in form and substance satisfactory to the
Technical Committee. The relevant Project Owner (or such other Person
responsible for constructing and operating such Subsequent Project) shall have
duly obtained or been assigned, either by itself or jointly with its Joint
Venturers (if applicable), and there shall be in full force and effect in the
relevant Project Owner's (or such other Person responsible for constructing and
operating such Subsequent Project) name, either by itself or jointly with its
Joint Venturers (if applicable), and not subject to any current legal proceeding
or to any unsatisfied condition that could reasonably be expected to allow
material modification or revocation of, and all applicable appeal periods shall
have expired with respect to, the Applicable Permits for such Subsequent Project
set forth on Parts I(A) and I(B) of such Permit Schedule, constituting in the
Technical Committee's reasonable opinion all of the Applicable Permits for such
Subsequent Project as of the Funding Date. Each Major Project Participant with
respect to which responsibility for an Applicable Third Party Permit is
indicated in Part I(B) of such Permit Schedule shall have duly obtained or been
assigned such Applicable Third Party Permit and there shall be in full force and
effect in such Person's name, and not subject to any current legal proceeding or
to any unsatisfied condition that could reasonably be expected to allow material
modification or revocation of, and all applicable appeal periods shall have
expired with respect to, each Applicable Third Party Permit for such Project set
forth on Part I(B) of such Permit Schedule, constituting in the Technical
Committee's reasonable opinion all of the Applicable Third Party Permits for
such Subsequent Project as of the Funding Date. Part II(A) of such Permit
Schedule shall list all other Permits required by the relevant Project Owner (or
such Project Owner and its Joint Venturers, if applicable) or other Person
responsible for constructing and operating such Subsequent Project to construct,
own and operate such Subsequent Project as contemplated by the Operative
Documents. Part II(B) of such Project Schedule shall list all other material
Permits required by any other Major Project Participant with respect to such
Subsequent Project to perform its obligations under the Operative Documents with
respect to such Subsequent Project to which it is a party. The Permits listed in
Parts II(A) and II(B) of such Permit Schedule shall either (a) in the Technical
Committee's reasonable opinion, be timely obtainable at a cost consistent with
the applicable Project Budget without material difficulty or delay prior to the
time the relevant Project Owner (or such Project Owner and its Joint Venturers,
if applicable) or the applicable other Major Project Participant, as applicable,
requires such Permits, or (b) there shall exist alternative solutions (the
expected cost of which is reflected in the applicable Project Budget) reasonably
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satisfactory to the Independent Engineer which would eliminate the need for such
Permit(s). Except as disclosed in such Permit Schedule, the Permits listed in
Parts I(A) and I(B) of such Permit Schedule shall not be subject to any
restriction, condition, limitation or other provision that could reasonably be
expected to have a Material Adverse Effect on such Subsequent Project or result
in such Subsequent Project being operated in a manner not substantially as
assumed in the Base Cost Project Projections.
3.3.20 No Change in Tax Laws. No change shall have occurred, since the
date upon which this Agreement was executed and delivered, in any law or
regulation or interpretation thereof that would subject any Bank to any material
unreimbursed Tax or Other Tax.
3.3.21 Absence of Litigation. (a) No action, suit, proceeding or
investigation shall have been instituted or threatened against any Portfolio
Entity in respect of such Subsequent Project which could reasonably be expected
to have a Material Adverse Effect on Borrower or such Subsequent Project, and
(b) except for the applicability of the FPA solely by reason of the relevant
Project Owner being an Exempt Wholesale Generator, no order, judgment or decree
shall have been issued or proposed to be issued by any Governmental Authority
that, as a result of the construction, ownership, leasing or operation of such
Subsequent Project, the sale of electricity or steam therefrom or the entering
into of any Operative Document with respect to such Subsequent Project or any
transaction contemplated hereby or thereby, would cause or deem the Banks, any
Portfolio Entity or any Affiliate of any of them to be subject to, or not
exempted from, regulation under the FPA or PUHCA or under state laws and
regulations respecting the rates or the financial or organizational regulation
of electric utilities.
3.3.22 Payment of Filing Fees. All amounts required to be paid to or
deposited with the Banks (including the Activation Fee) in respect of such
Subsequent Project, and all taxes, fees and other costs payable in connection
with the execution, delivery, recordation and filing of the documents and
instruments referred to in this Section 3.3, shall have been paid in full or, as
approved by the Technical Committee, provided for.
3.3.23 Financial Statements. Administrative Agent on behalf of the
Banks shall have received the most recent annual financial statements (audited
if available) or Form 10-K and most recent quarterly financial statements or
Form 10-Q from Borrower and each of the relevant Portfolio Entities and, to the
extent reasonably obtainable, Non-Affiliated Parents with respect to such
Subsequent Project and, to the extent reasonably obtainable, each other Major
Project Participant with respect to such Subsequent Project (or their respective
parent entities), together (in the case of such Portfolio Entities and the
Affiliated Major Project Participants with respect to such Subsequent Project)
with certificates from the appropriate Responsible Officer thereof, stating that
no material adverse change in the consolidated assets, liabilities, operations
or financial condition of such Person has occurred from those set forth in the
most recent financial statements or the balance sheet, as the case may be,
provided to Administrative Agent on behalf of the Banks.
3.3.24 UCC Reports. Administrative Agent on behalf of the Banks shall
have received a UCC report of a date reasonably close to the Funding Date for
each of the jurisdictions in which any UCC-1 financing statements or amendments
thereto are intended to be
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filed in respect of the Collateral with respect to such Subsequent Project,
showing that upon due filing (assuming such filing or recordation occurred on
the date of such respective reports), the security interests created under the
Collateral Documents with respect to such Subsequent Project will be prior to
all other financing statements or other security documents wherein the security
interest is perfected by filing in respect of such Collateral.
3.3.25 Project Budgets. Borrower shall have furnished Administrative
Agent on behalf of the Banks a budget for such Subsequent Project and, if
applicable, a revised budget for Borrower in substantially the form of the
Project Budgets delivered pursuant to Section 3.1.14 but with such changes as
are required to address the specifics of such Subsequent Project for all
anticipated costs to be incurred in connection with the construction and
start-up of such Subsequent Project, including in such budgets all construction
and non-construction costs, and including all interest, taxes and other carrying
costs, and such other information as the Technical Committee may require,
together with a balanced statement of sources (including an allocation between
Construction Loan proceeds and Contributions) and uses of proceeds (and any
other funds necessary to complete such Subsequent Project), broken down as to
separate construction phases and components, which project budgets shall be in
form and substance satisfactory to the Technical Committee.
3.3.26 Project Schedule. Borrower shall have furnished Administrative
Agent a project schedule with respect to such Subsequent Project in
substantially the form of the Project Schedules delivered pursuant to Section
3.2.25 but with such changes as are required to address the specifics of such
Subsequent Project and showing a guaranteed completion date for such Subsequent
Project that is on or before the Loan Maturity Date and which is otherwise in
form and substance satisfactory to the Technical Committee and the Independent
Engineer.
3.3.27 Base Case Project Projections. Borrower shall have furnished to
Administrative Agent on behalf of the Banks the combined Base Case Project
Projections of operating expenses and cash flow for all Funded Initial Projects
and Funded Subsequent Projects (including such Subsequent Project) showing, for
each year in such projections, a projected annual Four-Quarter Portfolio
Interest Coverage Ratio equal to or exceeding [*] to 1.00 (which ratio shall
be supported by the projections set forth in the Independent Consultant's
reports delivered pursuant to Section 3.2 and this Section 3.3 with respect to
such Projects) in substantially the form (including the duration thereof) of
those projections delivered pursuant to Section 3.1.16 and otherwise in form and
substance satisfactory to the Technical Committee.
3.3.28 No Material Adverse Change. No event or circumstance having a
Material Adverse Effect with respect to Borrower has occurred since the Closing
Date, and, with respect to such Subsequent Project, no event or circumstance
having a Material Adverse Effect with respect to such Subsequent Project shall
have occurred.
3.3.29 Real Estate Rights; A.L.T.A. Surveys. Administrative Agent on
behalf of the Banks shall (a) be satisfied that the relevant Project Owner (or
other Person who holds direct ownership interests in such Subsequent Project)
shall have obtained all real estate rights necessary for construction and
operation of such Subsequent Project other than (i) such rights as can be
obtained through eminent domain proceedings or (ii) rights, the procurement of
which, in the Technical Committee's reasonable judgment, is not subject to the
discretion of any third
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party, and in the case of either clause (i) or (ii) above, the Technical
Committee shall be satisfied that any rights which have not been obtained can be
obtained without material difficulty or delay by the time they are needed, and
(b) have received A.L.T.A. surveys of the Site and, unless not required by the
Technical Committee, the Easements with respect to such Subsequent Project in
existence on the Funding Date, satisfactory in form and substance to the
Technical Committee and the Title Insurer, reasonably current and certified to
the Technical Committee by a licensed surveyor satisfactory to the Technical
Committee, showing (i) as to such Site, the exact location and dimensions
thereof, including the location of all means of access thereto and all easements
relating thereto and showing the perimeter within which all foundations are or
are to be located; (ii) as to such Easements in existence on the Funding Date,
the exact location and dimensions thereof, including the location of all means
of access thereto, and all improvements or other encroachments in or on such
Easements in existence on the Funding Date; (iii) the existing utility
facilities servicing such Subsequent Project (including water, electricity, gas,
telephone, sanitary sewer and storm water distribution and detention
facilities); (iv) that such existing improvements do not encroach or interfere
with adjacent property or existing easements or other rights (whether on, above
or below ground), and that there are no gaps, gores, projections, protrusions or
other survey defects; (v) whether such Site or any portion thereof is located in
a special earthquake or flood hazard zone; and (vi) that there are no other
matters that could reasonably be expected to be disclosed by a survey
constituting a defect in title other than Permitted Encumbrances with respect to
such Subsequent Project; provided, however, that the matters described in
clauses (ii) and (v) of this subsection (b) may be shown by separate maps,
surveys or other information reasonably satisfactory to the Technical Committee.
3.3.30 Title Policies. Borrower shall have delivered to Administrative
Agent on behalf of the Banks a lender's A.L.T.A. policy of title insurance
(with, in the case of Easements with respect to which A.L.T.A. surveys were not
required by the Technical Committee pursuant to Section 3.3.29, appropriate
survey exceptions), together with such endorsements as are required by the
Technical Committee (without a mechanics' or materialmen's exception included in
such title policy, except where applicable Governmental Rules prevent the
deletion of such exception), or commitment to issue such policy, dated as of the
Funding Date (x) in an amount equal to 50% of the aggregate amount of Project
Costs set forth in the Project Budget for such Subsequent Project (or such other
amount as is reasonably acceptable to the Technical Committee) and (y) with such
reinsurance as is satisfactory to the Technical Committee, issued by the Title
Insurer in form and substance satisfactory to the Technical Committee, insuring
(or agreeing to insure) that:
(a) the relevant Project Owner has a good, marketable and
insurable fee or leasehold title to or right to control, occupy and use the Site
and the Easements with respect to such Subsequent Project, free and clear of
liens, encumbrances or other exceptions to title except Permitted Liens
described in clause (a), (b) or (e) of the definition thereof, those otherwise
permitted pursuant to this Section 3.3.30 and those satisfactory to the
Technical Committee and specified on such policy; and
(b) the Deed of Trust with respect to such Subsequent Project
is (or will be when recorded) a valid first lien on the Mortgaged Property with
respect to such Subsequent Project, free and clear of all liens, encumbrances
and exceptions to title whatsoever, other than those encumbrances permitted
pursuant to Section 3.3.30(a).
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3.3.31 Regulatory Status. Such Subsequent Project shall (a) have
complied with the requirements of 18 C.F.R. Section 292.207 required to be
complied with as of the Funding Date and delivered to Administrative Agent on
behalf of the Banks, in form and substance satisfactory to the Technical
Committee, either (i) a certificate of FERC certifying such Subsequent Project
as a Qualifying Facility, or (ii) documentation evidencing the
self-certification of such Subsequent Project as a Qualifying Facility and a
legal opinion of counsel to the Portfolio Entities with respect to the
effectiveness of such documentation to qualify such Subsequent Project as a
Qualifying Facility or (b) be or be capable of becoming an Eligible Facility,
and (x) if the relevant Project Owner has previously filed an application with
FERC for a determination that such Project Owner is an Exempt Wholesale
Generator, Borrower shall have delivered to the Technical Committee a copy of an
additional or supplemental application regarding Exempt Wholesale Generator with
respect to such Subsequent Project filed by such Project Owner with FERC and (y)
the Technical Committee shall have received a legal opinion of counsel to the
Portfolio Entities in form and substance satisfactory to the Technical Committee
to the effect that (i) if FERC has previously determined that such Project Owner
is an Exempt Wholesale Generator, such Subsequent Project will not adversely
impact such Project Owner's status as an Exempt Wholesale Generator or (ii) if
FERC has not yet determined that such Project Owner is an Exempt Wholesale
Generator, there exists no reasonable basis for FERC to deny an application
filed by such Project Owner pursuant to Section 5.12 for Exempt Wholesale
Generator status.
3.3.32 Notice to Proceed. The Prime Contractor with respect to such
Subsequent Project shall have been given an unconditional notice to proceed or
otherwise been unconditionally directed to begin performance under the Prime
Construction Contract to which it is a party, on or prior to the Funding Date.
3.3.33 Representations and Warranties. Each representation and warranty
of Borrower, the Portfolio Entities with respect to such Subsequent Project, the
Member, Calpine and the Non-Affiliated Parents with respect to such Subsequent
Project, if any, under the Credit Documents and each representation and warranty
of Borrower, the relevant Project Owner and the relevant Equipment Finance
Company, if any, under the other Operative Documents, in each case with respect
to itself or such Subsequent Project, shall be true and correct in all material
respects as if made on the Funding Date, unless such representation or warranty
expressly relates solely to another time.
3.3.34 Utilities. Administrative Agent on behalf of the Banks has
received evidence acceptable to the Technical Committee that all necessary gas
and electrical interconnections and utility services are either contracted for,
or will be readily available on reasonable economic terms, at such Subsequent
Project.
3.3.35 Calpine Compliance. No "event of default" (as defined therein)
that are greater than $10,000,000 under any agreement or instrument documenting
or evidencing any of Calpine's Debt obligations shall have occurred and be
continuing.
3.3.36 Calpine Guaranties. Calpine shall have executed (a) an
acknowledgement, in form and substance satisfactory to the Technical Committee,
that such Subsequent Project shall be included with the obligations undertaken
pursuant to the Project Completion Guaranty
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and (b) (i) in the case of each Person party to a Project Document that is
directly or indirectly more than 50% owned by Calpine (other than the relevant
Project Owner and Equipment Finance Company, if any), an Affiliated Party
Agreement Guaranty in respect of each Project Document (guarantying 100% of such
Person's obligations under each such Project Document) entered into between the
relevant Project Owner and such Person for such Subsequent Project or (ii) in
the case of each Person party to a Project Document that is directly or
indirectly 50% owned by Calpine (other than the relevant Project Owner and
Equipment Finance Company, if any), an Affiliated Party Agreement Guaranty in
respect of each Project Document (guarantying at least Calpine's percentage
ownership interest of such Person's obligations under each such Project
Document) entered into between the relevant Project Owner and such Person for
such Subsequent Project; provided, in the case of clause (b)(ii) of this Section
3.3.36, Borrower shall also deliver to Administrative Agent a guaranty agreement
in favor of the relevant Project Owner in respect of each such Project Document,
executed by a guarantor satisfactory to the Technical Committee and in form and
substance satisfactory to the Technical Committee, guarantying those obligations
of such Person under each such Project Document not otherwise addressed in the
Affiliated Party Agreement Guaranty delivered pursuant to such clause.
3.3.37 Updated Exhibits. Borrower shall have delivered to
Administrative Agent supplements to (a) Exhibit G-8 (Hazardous Substances)
referencing the environmental reports in respect of such Subsequent Project that
were delivered to Administrative Agent on behalf of the Banks pursuant to
Section 3.3.14, (b) Exhibit D-6 reflecting the filings and recordings required
to be made to perfect security interests in the Collateral in respect of such
Subsequent Project, and (c) Exhibit K reflecting any additional or revised
insurance policies or coverages required by the Insurance Consultant to account
for such Subsequent Project, in each case reasonably satisfactory to the
Technical Committee.
3.3.38 Diversification Requirements. Such Subsequent Project satisfies
the Diversification Requirements.
3.3.39 Calpine Corporation Credit Rating. Calpine shall be rated at
least Ba2 by ▇▇▇▇▇'▇ and BB by S&P.
3.3.40 Initial Projects Satisfaction of Conditions Precedent to Initial
Funding. Each Initial Project shall be a Funded Project; provided, however, one
Subsequent Project shall be permitted to become a Funded Project prior to the
time all Initial Projects have become Funded Projects so long as (a) at least
six Initial Projects have become Funded Projects prior to the Funding Date with
respect to such Subsequent Project, (b) Borrower owns 100% of the equity
interests of the Project Owner with respect to such Subsequent Project and (c)
the Project Owner with respect to such Subsequent Project owns 100% of such
Subsequent Project.
3.3.41 Modified Conditions Precedent to Initial Funding.
Notwithstanding anything to the contrary contained in this Section 3.3, the
obligation of the Banks to make the initial Construction Loans with respect to a
particular Subsequent Project at any time when at least 12 Projects are Funded
Projects and at least five Projects have achieved Commercial Operation, each of
such Projects having become Funded Projects pursuant to either Section 3.2 or
3.3 (other than this Section 3.3.41), shall be subject only to the prior
satisfaction of those conditions set forth in Section 3.4 and Schedule 3.3.41.
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3.4 Conditions Precedent to Each Construction Credit Event. The obligation
of the Banks to make each Construction Loan (including the initial Construction
Loans for each Initial Project and each Subsequent Project) (a "Construction
Credit Event"), is subject to the prior satisfaction of each of the following
conditions:
3.4.1 Monthly Drawdown Frequency. Construction Loans shall be made no
more frequently than two times per month.
3.4.2 Notice of Construction Borrowing. Borrower shall have delivered a
Notice of Construction Borrowing to Administrative Agent in accordance with the
procedures specified in Section 2.1.
3.4.3 Construction Drawdown Certificate and Engineer's Certificate. (i)
At least 8 Banking Days prior to each Construction Credit Event, Borrower shall
have provided Administrative Agent with a certificate, dated the date of the
proposed occurrence of such Construction Credit Event and signed by Borrower,
substantially in the form of Exhibit C-6, in respect of each Project for which a
disbursement of funds are being requested and (ii) at least four Banking Days
prior to each Construction Credit Event, the Independent Engineer shall have
provided Administrative Agent with a certificate of the Independent Engineer,
substantially in the form of Exhibit C-7. Such certificates shall certify, among
other things, that (A) the aggregate amount of Project Costs for each Project
(not including financing fees and interest expenses allocated to such Project
but not reflected in such Project's Project Budget delivered pursuant to Section
3.1 or 3.3, as the case may be, and other expenses not allocable to a particular
Project) for which the disbursement of funds is being requested is not projected
to exceed 110% of the anticipated aggregate amount of Project Costs for such
Project as set forth in such Project's Project Budget delivered pursuant to
Section 3.1 or 3.3, as the case may be, and (B) the aggregate amount of Project
Costs for all Initial Projects and Funded Subsequent Projects then under
construction is not projected to exceed 105% of the anticipated aggregate amount
of Project Costs for all such Projects as set forth in the respective Project
Budgets delivered pursuant to Section 3.1 or 3.3, as the case may be; provided,
however, that if the condition described in clause (A) above is not satisfied
with respect to a particular Project for which funds are being requested but (x)
the Independent Engineer confirms that the cost overruns with respect to such
Project are not reasonably likely to exceed a specific amount and (y) the
condition described in clause (B) is satisfied and will continue to be satisfied
after giving effect to any further anticipated overruns with respect to the
Project experiencing such overruns, then the Banks will not unreasonably
withhold their consent to waive the condition described in clause (A) above.
3.4.4 Amount. Construction Loans shall be in such amounts as shall
ensure that uncommitted funds remaining in the Construction Account (other than
those in Turbine Purchase Sub-Accounts) shall be disbursed to the greatest
extent possible, given the requirements of Section 2.1.1(b)(ii).
3.4.5 Title Policy Endorsement. Borrower shall provide, or
Administrative Agent shall be adequately assured that the Title Insurer is
committed at the time of each Construction Credit Event to issue to
Administrative Agent a date-down endorsement of the relevant Title Policies, if
any, to the date of such Construction Credit Event, insuring or
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otherwise establishing to the satisfaction of Administrative Agent the
continuing first priority of the relevant Deeds of Trust (subject only to
relevant Permitted Encumbrances and Permitted Liens described in clause (a), (b)
or (c) of the definition thereof) and otherwise in form and substance reasonably
satisfactory to Administrative Agent.
3.4.6 Lien Releases. If requested by Administrative Agent and subject
to Borrower's right to contest liens as described in the definition of
"Permitted Liens," Borrower shall have delivered to Administrative Agent duly
executed acknowledgments of payments and releases of mechanics' and
materialmen's liens, in form satisfactory to Administrative Agent, from each
relevant Major Contractor and Major Subcontractors thereof for all work,
services and materials, including equipment and fixtures of all kinds, done,
previously performed or furnished for the construction of the relevant Project,
and in respect of which Borrower has requested payment; provided, however, that
such releases may be conditioned upon receipt of payment with respect to work,
services and materials to be paid for with the proceeds of the requested
Construction Loan or other Borrowing pursuant to this Section 3.4.
3.4.7 Applicable Permits. Except as disclosed in the Permit Schedule
applicable to the relevant Project, if any, all Applicable Permits and
Applicable Third Party Permits (as of the date of the Construction Credit Event)
with respect to the construction and, if applicable, operation of the relevant
Project required to have been obtained by the relevant Project Owner (or such
Project Owner and its Joint Venturers, if applicable) or any other applicable
Major Project Participant by the date of such Construction Credit Event from any
Governmental Authority shall have been issued and be in full force and effect
and not subject to current legal proceedings or to any unsatisfied conditions
that could reasonably be expect to allow material modification or revocation,
and all applicable appeal periods with respect thereto shall have expired. With
respect to any Permits not yet obtained and, if the relevant Project has an
associated Permit Schedule, listed in Part II(A) or II(B) of the applicable
Permit Schedule, either (a) in the Technical Committee's reasonable opinion,
such Permit will be timely obtainable at a cost consistent with the applicable
Project Budget without material difficulty or delay prior to the time the
relevant Project Owner (or such Project Owner and its Joint Venturers, if
applicable) or the applicable other Major Project Participant, as applicable,
requires such Permit, or (b) there shall exist alternate solutions (the expected
cost of which is reflected in the applicable Project Budget) reasonably
satisfactory to the Independent Engineer which would eliminate the need for such
Permit. Except as disclosed in the applicable Permit Schedule, if any, such
Permits which have been obtained by the relevant Project Owner (or such Project
Owner and its Joint Venturers, if applicable) or any applicable Major Project
Participant shall not be subject to any restriction, condition, limitation or
other provision that could reasonably be expected to have a Material Adverse
Effect with respect to Borrower or such Project.
3.4.8 Equity Contributions. Borrower shall be in compliance with
Section 5.17.
3.4.9 Additional Documentation. With respect to Additional Major
Project Documents and Applicable Permits with respect to the relevant Project
entered into or obtained, transferred or required (whether because of the status
of the construction or operation of the relevant Project or otherwise) since the
date of the most recent Construction Credit Event, in furtherance of, among
other things, the Lien on such Project and related Collateral granted on the
Closing Date or the relevant Funding Date, as the case may be, there shall be
redelivery of such
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matters as are described in Sections 3.2.2 through 3.2.5 and 3.2.7 or Sections
3.3.3 through 3.3.6 and 3.3.8, as the case may be, to the extent applicable to
such Additional Project Documents or Applicable Permits and, if reasonably
requested by Administrative Agent, Sections 3.2.9 and 3.2.22 or Sections 3.3.10
and 3.3.23, as the case may be, from the counterparty to such Additional Project
Document.
3.4.10 Acceptable Work; No Liens. All work that has been done on the
relevant Project shall have been done in a good and workmanlike manner and in
accordance with the Construction Contracts and Prudent Utility Practices and
there shall not have been filed with or served upon any Portfolio Entity with
respect to such Project or any part thereof notice of any Lien, claim of Lien or
attachment upon or claim affecting the right to receive payment of any of the
monies payable to any of the Persons named on such request which has not been
released by payment or bonding or otherwise or which will not be released with
the payment of such obligation out of such Construction Loan or other Borrowing
pursuant to this Section 3.4, other than Permitted Liens.
3.4.11 Casualty. If at the time of any Credit Event, any Project for
which a disbursement of funds is being requested shall have been materially
injured or damaged by flood, fire or other casualty, Administrative Agent shall
have received insurance proceeds or money or other assurances sufficient in the
reasonable judgment of Administrative Agent and the Independent Engineer to
assure restoration and Completion of such Project prior to the Loan Maturity
Date and each of the conditions set forth in Section 7.5.3 has been satisfied.
3.4.12 Absence of Litigation. No action, suit, proceeding or
investigation shall have been instituted against any Portfolio Entity or the
relevant Project which could reasonably be expected to have a Material Adverse
Effect on Borrower or the Project with respect to which a Construction Loan is
being requested, except as approved by Administrative Agent with the consent of
the Required Banks.
3.4.13 Insurance. Insurance complying with the requirements of Section
5.18 shall be in effect, and upon the request of Administrative Agent evidence
thereof shall be provided to Administrative Agent.
3.4.14 Available Construction Funds. After taking into consideration
the Construction Loans being requested, Available Construction Funds shall not
be less than the aggregate unpaid amount of Project Costs required to cause the
Completion Date of all Initial Projects and Funded Subsequent Projects that have
not achieved Completion to occur in accordance with all Legal Requirements and
the Construction Contracts prior to the guaranteed completion date with respect
to each such Project set therefor in such Project's Project Schedule and to pay
or provide for all anticipated non-construction Project Costs as to each such
Project, all as set forth in the Project Budgets.
3.4.15 Representations and Warranties. Each representation and warranty
of the Member, Calpine and the Non-Affiliated Parents with respect to the
Project for which Construction Loans are being requested, if any, under the
Credit Documents and each representation and warranty of the Portfolio Entities
under the Operative Documents, in each case with respect to itself or a Project
for which Construction Loans are being requested, shall be
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true and correct in all material respects as if made on such date, unless such
representation or warranty expressly relates solely to another time.
3.4.16 No Event of Default or Inchoate Default. No Event of Default or
Inchoate Default, no Non-Fundamental Project Default or Non-Fundamental Project
Inchoate Default in respect of the Project for which funds are being requested
and, to the extent Section 3.9(b) does not otherwise permit Borrowings, no other
Non-Fundamental Project Default or Non-Fundamental Project Inchoate Default has
occurred and is continuing or will result from such Construction Credit Event.
3.4.17 Operative Documents, Applicable Permits and Applicable Third
Party Permits in Effect. Each Credit Document, Major Project Document (other
than Major Gas Supply Contracts, Major Power Purchase Agreements and Major Gas
Transportation Agreements not then in existence), electric transmission and
interconnection agreement, material water supply agreement, Additional Major
Project Document, Applicable Permit (except as provided in Section 3.4.7) and
Applicable Third Party Permit (except as provided in Section 3.4.7) related to
the Project for which Construction Loans are then being requested remains in
full force and effect in accordance with its terms and no material defaults have
occurred thereunder.
3.4.18 No Material Adverse Effect. No event or circumstance having a
Material Adverse Effect with respect to Borrower has occurred since the Closing
Date (except as is no longer continuing), and no event or circumstance having a
Material Adverse Effect with respect to the Project for which a disbursement of
funds is being requested has occurred since the Closing Date (except as is no
longer continuing).
3.4.19 Third Party Funding. For Projects which are not wholly-owned by
the relevant Project Owner, each Person (other than such Project Owner) who has
an ownership interest in such Project, has funded its pro rata share of all
Project Costs incurred through such date to such Project or any other Person
(including such Project Owner) has funded such costs on such Person's behalf.
3.4.20 Debt to Capitalization Ratio. Borrower's Debt to Capitalization
Ratio shall be no more than the Maximum Debt to Capitalization Ratio.
3.4.21 Interest Coverage Ratio. From and after the first day of the
second calendar quarter following the Final Completion of the first Project to
achieve Final Completion, Borrower's Four-Quarter Portfolio Interest Coverage
Ratio as of the most recent calendar quarter shall (a) until such time as the
fourth Project achieves Final Completion, equal the lesser of (i) [*] to 1.00
or (ii) 90% of the projected annual Four-Quarter Portfolio Interest Coverage
Ratio for such period reflected in the Base Case Project Projections delivered
with respect to the relevant Projects pursuant to Section 3.1 or 3.3, as the
case may be, and (b) thereafter, equal or exceed [*] to 1.00.
3.4.22 Funded Projects. In the event such Construction Credit Event
occurs after the second anniversary of the Closing Date, all Initial Projects
shall be Funded Projects.
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3.5 Conditions Precedent to the Initial Funding of the Turbines. The
obligation of the Banks to make the initial Turbine Purchase Loans with respect
to a particular Turbine is subject to the prior satisfaction of each of the
following conditions:
3.5.1 Borrower Equity. Contributions required pursuant to Section
5.17.1 and 5.17.2 hereof shall have been funded and applied in accordance with
Section 5.1.
3.5.2 Resolutions. Delivery to Administrative Agent on behalf of the
Banks of (a) a copy of one or more resolutions or other authorizations of the
Turbine Owner which owns such Turbine and any Intermediate Parent with respect
to such Turbine Owner, certified by the appropriate officers of each such entity
as being in full force and effect on the Turbine Funding Date, authorizing the
execution, delivery and performance of the Turbine Purchase Contract and any
other Operative Documents with respect to the purchase of such Turbine, and any
instruments or agreements required hereunder or thereunder to which such entity
is a party, or (b) in so far as any of the materials delivered pursuant to
Section 3.1.1 are sufficient (in the reasonable discretion of the Technical
Committee) to satisfy the requirements set forth in this Section 3.5.2, Borrower
shall deliver a certificate by the appropriate officers that the matters
delivered under Section 3.1.1 remain in full force and effect as of the Turbine
Funding Date.
3.5.3 Incumbency. Delivery to Administrative Agent on behalf of the
Banks of (a) a certificate satisfactory in form and substance to the Technical
Committee, from the Turbine Owner which owns such Turbine and any Intermediate
Parent with respect to such Turbine Owner, signed by the appropriate authorized
officer of each such entity and dated the Turbine Funding Date, as to the
incumbency of the natural persons authorized to execute and deliver the Turbine
Purchase Contract and any other Operative Documents with respect to such
Turbine, as applicable, and any instruments or agreements required hereunder or
thereunder to which such entity is a party, or (b) in so far as any of the
materials delivered pursuant to Section 3.1.2 are sufficient (in the reasonable
discretion of the Technical Committee) to satisfy the requirements set forth in
this Section 3.5.3, Borrower shall deliver a certificate by the appropriate
officers that the matters delivered under Section 3.1.2 remain in full force and
effect as of the Turbine Funding Date.
3.5.4 Formation Documents. Delivery to Administrative Agent on behalf
of the Banks of (a) copies of the articles of incorporation or certificate of
incorporation or charter or other state certified constituent documents of the
Turbine Owner which owns such Turbine, any Intermediate Parent with respect to
such Turbine Owner and the Turbine Purchase Contractor with respect to such
Turbine, certified, if requested by the Technical Committee, by the secretary of
state of the state of formation, and (b) (i) copies of the Bylaws or other
comparable constituent documents of such Turbine Owner and other Portfolio
Entities, certified by its secretary or an assistant secretary, or (ii) in so
far as any of the materials delivered pursuant to Section 3.1.3 are sufficient
(in the reasonable discretion of the Technical Committee) to satisfy the
requirements set forth in this Section 3.5.4(b)(i), Borrower shall deliver a
certificate by the appropriate officers that the matters delivered under Section
3.1.3 remain in full force and effect as of the Turbine Funding Date.
3.5.5 Good Standing Certificates. For the Turbine Owner which owns such
Turbine, any Intermediate Parent with respect to such Turbine Owner and the
Turbine Purchase
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Contractor with respect to such Turbine, delivery to Administrative Agent on
behalf of the Banks of certificates issued by the secretary of state of the
state of formation of such entity certifying that such entity is in good
standing and is qualified to do business in, and has paid all franchise taxes or
similar taxes due to, such state.
3.5.6 Satisfactory Proceedings. All corporate, partnership and legal
proceedings and all instruments in connection with the transactions contemplated
by this Agreement with respect to such Turbine shall be satisfactory in form and
substance to the Technical Committee, and Administrative Agent on behalf of the
Banks shall have received all information and copies of all documents, including
records of corporate or partnership proceedings and copies of any approval by
any Governmental Authority required in connection with any transaction herein
contemplated (with respect to such Turbine), which the Technical Committee may
reasonably have requested in connection herewith, such documents where
appropriate to be certified by proper corporate or partnership officers or
Governmental Authorities.
3.5.7 Operative Documents.
(a) Delivery to Administrative Agent on behalf of the Banks of
executed originals of:
(i) Amendments, supplements or modifications to each of
the Collateral Documents with respect to such Turbine (or additional Collateral
Documents if reasonably requested by the Technical Committee, including, if not
previously delivered pursuant to Section 3.1, a Project/Turbine Owner Security
Agreement executed by the Turbine Owner with respect to such Turbine and Pledge
Agreements (Pledged Equity Interests) executed by each Portfolio Entity with
respect to such Turbine (other than the relevant Turbine Owner)) considered
necessary by the Technical Committee to ensure that all rights and assets
related to such Turbine under the relevant Turbine Purchase Contract have been
pledged to Administrative Agent and the Banks; provided, however, as set forth
in the relevant Project/Turbine Owner Security Agreement and Pledge Agreements
(Pledged Equity Interests), the Lien on the Collateral comprising such Turbine
and the ownership interests in the relevant Portfolio Entities shall not secure
those Obligations relating to or arising from Projects that have achieved
Operation prior to the Turbine Funding Date.
(ii) A Consent to assignment in substantially the form
of Exhibit E-1 or otherwise in form and substance reasonably satisfactory to the
Technical Committee from the relevant Turbine Purchase Contractor and, if a
guaranty or other credit support document executed by Persons other than Calpine
with respect to such Turbine exists as of the expected Funding Date for such
Turbine, from such guarantors or other credit support providers, as applicable.
(b) Unless previously delivered pursuant to Section 3.1,
Borrower shall have delivered to Administrative Agent the federal employer
number and all other information requested by Administrative Agent with respect
to the Turbine Owner and any Intermediate Parent with respect to such Turbine
Owner, and all actions shall have been taken to provide the Banks with a valid
and perfected first priority Lien on the Collateral with respect to the relevant
Turbine Owner's interest in such Turbine and the relevant Turbine Purchase
Contract including,
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without limitation, to the extent necessary, the execution, delivery and filing
of UCC-1, UCC-2 or UCC-3 financing statements, as applicable, with respect to
such Collateral with the Secretary of State and/or other appropriate filing
office in the states of formation of the relevant Turbine Owner or other
Portfolio Entity or the states in which such Turbine Owner's or other Portfolio
Entities' principal places of business are located, the delivery of the Pledged
Equity Interests of the Portfolio Entities with respect to such Turbine in
accordance with the relevant Pledge Agreements (Pledged Equity Interests) and
the delivery of a Portfolio Entity Note executed by such Turbine Owner).
(c) Delivery to Administrative Agent on behalf of the Banks of
true and correct copies of the Turbine Purchase Contract and, if any guaranty or
other credit support document executed by Persons other than Calpine with
respect to such Turbine exists as of the expected Funding Date for such Turbine,
delivery of all such guaranty agreements or other credit support documents, and
any supplements or amendments thereto and which Turbine Purchase Contract shall
be certified by a Responsible Officer of Borrower as being true, complete and
correct and in full force and effect on the Turbine Funding Date pursuant to the
certificates delivered as provided in this Section 3.5, which certificates shall
state that neither such Turbine Owner nor, to Borrower's knowledge, the relevant
Turbine Purchase Contractor is or, but for the passage of time or giving of
notice or both will be, in breach of any material obligation thereunder, and
that all conditions precedent to the performance of the parties under such
Turbine Purchase Contract then required to have been performed have been
satisfied.
(d) The relevant Turbine Purchase Contract shall be in form
and substance reasonably satisfactory to the Technical Committee and shall have
been duly authorized, executed and delivered by the parties thereto. The
counterparty to the relevant Turbine Contract (other than the applicable Project
Owner) shall be a Turbine Purchase Contractor. All guaranty agreements and other
credit support documents delivered pursuant to Section 3.5.7(c) shall be in form
and substance satisfactory to the Technical Committee and shall have been duly
authorized, executed and delivered by the Party thereto.
3.5.8 Certificate of Borrower. Administrative Agent on behalf of the
Banks shall have received a certificate, dated as of the Turbine Funding Date,
signed by a Responsible Officer of the Borrower, certifying that such Turbine
has been assigned to a Project, is owned by a Turbine Owner, such Turbine's
Turbine Delivery Date and otherwise in substantially the form of Exhibit F-3.
3.5.9 Legal Opinions. Unless previously delivered pursuant to Section
3.1, delivery to Administrative Agent on behalf of the Banks of legal opinions
of counsel to the Turbine Owner which owns such Turbine, any Intermediate Parent
with respect to such Turbine Owner and, to the extent required by the Technical
Committee, the relevant Turbine Purchase Contractor and all other Persons party
to a guaranty agreement or credit support document delivered pursuant to Section
3.5.7(c), in each case in form and substance satisfactory to the Technical
Committee.
3.5.10 Insurance. Insurance with respect to such Turbine complying with
Exhibit K (as the same may be modified to include such Turbine) shall be in full
force and effect and Administrative Agent on behalf of the Banks shall have
received (a) a certificate from
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Borrower's insurance broker(s), dated as of the Turbine Funding Date and
identifying underwriters, type of insurance, insurance limits and policy terms,
listing the special provisions required as set forth in Exhibit K, describing
the insurance obtained and stating that such insurance is in full force and
effect and that all premiums due thereon have been paid and that, in the opinion
of such broker(s), such insurance complies with Exhibit K, and (b) certified
copies of all policies evidencing such insurance (or a binder, commitment or
certificates signed by the insurer or a broker authorized to bind the insurer),
in form and substance satisfactory to the Technical Committee.
3.5.11 Certificate of the Independent Engineer. Delivery to
Administrative Agent on behalf of the Banks of the Independent Engineer's
certificate with respect to such Turbine, in substantially the form of Exhibit
F-7, with the Independent Engineer's report with respect to such Turbine,
confirming, in form and substance satisfactory to the Technical Committee, that
the technology and size of such Turbine is appropriate for the Project to which
it has been assigned.
3.5.12 No Change in Tax Laws. No change shall have occurred, since the
date upon which this Agreement was executed and delivered, in any law or
regulation or interpretation thereof that would subject any Bank to any material
unreimbursed Tax or Other Tax.
3.5.13 Absence of Litigation. No action, suit, proceeding or
investigation shall have been instituted or threatened against the Turbine Owner
or any Intermediate Parent with respect to such Turbine Owner which could
reasonably be expected to have a Material Adverse Effect on Borrower.
3.5.14 Payment of Filing Fees. All amounts required to be paid to or
deposited with the Banks in respect of such Turbine, and all taxes, fees and
other costs payable in connection with the execution, delivery, recordation and
filing of the documents and instruments referred to in this Section 3.5, shall
have been paid in full or, as approved by the Technical Committee, provided for.
3.5.15 Financial Statements. Administrative Agent on behalf of the
Banks shall have received the most recent annual financial statements (audited
if available) or Form 10-K and most recent quarterly financial statements or
Form 10-Q from the Turbine Purchase Contractor with respect to such Turbine (or
its respective parent entity).
3.5.16 UCC Reports. Administrative Agent on behalf of the Banks shall
have received a UCC report of a date reasonably close to the Turbine Funding
Date for each of the jurisdictions in which any UCC-1 financing statements or
amendments thereto are intended to be filed in respect of such Turbine, showing
that upon due filing (assuming such filing or recordation occurred on the date
of such respective reports), the security interests created under the Collateral
Documents with respect to such Turbine will be prior to all other financing
statements or other security documents wherein the security interest is
perfected by filing in respect of such Turbine.
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3.5.17 No Material Adverse Change. No event or circumstance having a
Material Adverse Effect with respect to Borrower has occurred since the Closing
Date.
3.5.18 Representations and Warranties. Each representation and warranty
of the Member, Calpine and the Portfolio Entities with respect to such Turbine
under the Credit Documents and each representation and warranty of Borrower and
the Turbine Owner which owns such Turbine under the Operative Documents, in each
case with respect to itself and such Turbine, shall be true and correct in all
material respects as if made on such date, unless such representation or
warranty expressly relates solely to another time.
3.5.19 Calpine Compliance. No "event of default" (as defined therein)
under any agreement or instrument documenting or evidencing any of Calpine's
Debt obligations that are greater than $10,000,000 shall have occurred and be
continuing.
3.5.20 Calpine Guaranties. Calpine shall have executed an
acknowledgment, in form and substance satisfactory to the Technical Committee,
that such Turbine shall be included with the obligations undertaken pursuant to
the Turbine Purchase Guaranty.
3.5.21 Calpine Corporation Credit Rating. Calpine shall be rated at
least Ba2 by ▇▇▇▇▇'▇ and BB by S&P.
3.6 Conditions Precedent to Each Turbine Purchase Credit Event. The
obligation of the Banks to make each Turbine Purchase Loan (including the
initial Turbine Purchase Loans for each Turbine) (a "Turbine Purchase Credit
Event"), is subject to the prior satisfaction of each of the following
conditions:
3.6.1 Monthly Drawdown Frequency. Turbine Purchase Loans shall be made
no more frequently than two times per month.
3.6.2 Notice of Turbine Purchase Borrowing. Borrower shall have
delivered a Notice of Turbine Purchase Borrowing to Administrative Agent in
accordance with the procedures specified in Section 2.1.
3.6.3 Turbine Purchase Drawdown Certificate and Engineer's Certificate.
(i) At least 8 Banking Days prior to each Turbine Purchase Credit Event,
Borrower shall have provided Administrative Agent with a certificate, dated the
date of the proposed occurrence of such Turbine Purchase Credit Event and signed
by Borrower, substantially in the form of Exhibit C-8, in respect of each
Turbine for which a disbursement of funds are being requested and (ii) at least
four Banking Days prior to each Turbine Purchase Credit Event, the Independent
Engineer shall have provided Administrative Agent with a certificate of the
Independent Engineer, substantially in the form of Exhibit C-9. Such
certificates shall certify that the payments to the Turbine Purchase Contractor
with respect to the relevant Turbine (including payments made from and after
October 1, 2000) for which Turbine Loans are being requested have been made.
3.6.4 Amount. Turbine Purchase Loans may include reimbursement of
Turbine Costs paid by Borrower or an Affiliate of Borrower on or after October
1, 2000 and shall be in such amounts as shall ensure that uncommitted funds
remaining in the Turbine Purchase Sub-
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Account shall be disbursed to the greatest extent possible, given the
requirements of Section 2.1.2(b)(ii).
3.6.5 Equity Contributions. Borrower shall be in compliance with
Section 5.17.
3.6.6 Insurance. Insurance complying with the requirements of Section
5.18 with respect to such Turbine shall be in effect, and upon the request of
Administrative Agent evidence thereof shall be provided to Administrative Agent.
3.6.7 Available Construction Funds. After taking into consideration the
Turbine Purchase Loans being requested, Available Construction Funds shall not
be less than the aggregate unpaid amount of Project Costs required to cause the
Completion Date of all Initial Projects and Funded Subsequent Projects that have
not achieved Completion to occur in accordance with all Legal Requirements and
the Construction Contracts prior to the guaranteed completion date with respect
to each such Project set therefor in such Project's Project Schedule and to pay
or provide for all anticipated non-construction Project Costs as to each such
Project, all as set forth in the Project Budgets.
3.6.8 Representations and Warranties. Each representation and warranty
of the Member, Calpine and the Portfolio Entities with respect to such Turbine
under the Credit Documents and each representation and warranty of the Turbine
Owner which owns such Turbine under the Operative Documents, in each case with
respect to itself and a Turbine for which Turbine Purchase Loans are being
requested, shall be true and correct in all material respects as if made on such
date, unless such representation or warranty expressly relates solely to another
time.
3.6.9 No Event of Default or Inchoate Default. No Event of Default or
Inchoate Default has occurred and is continuing or will result from such Turbine
Purchase Credit Event.
3.6.10 Credit Documents and Turbine Purchase Contract in Effect. Each
Credit Document and the Turbine Purchase Contract related to the Turbine for
which Turbine Purchase Loans are then being requested remains in full force and
effect in accordance with its terms and no material defaults have occurred
thereunder.
3.6.11 No Material Adverse Effect. No event or circumstance having a
Material Adverse Effect with respect to Borrower has occurred since the Closing
Date (except as is no longer continuing).
3.6.12 Debt to Capitalization Ratio. Borrowers' Debt to Capitalization
Ratio shall be no more than the Maximum Debt to Capitalization Ratio.
3.6.13 Funded Projects.
(a) In the event such Turbine Purchase Credit Event occurs
after the first anniversary of the Closing Date, at least ten Initial Projects
shall be Funded Projects.
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(b) In the event such Turbine Purchase Credit Event occurs
after the second anniversary of the Closing Date, at least two Subsequent
Projects and all Initial Projects shall be Funded Projects.
3.7 Conditions Precedent to Final Completion. Final Completion with respect
to a Project shall not occur until the following conditions shall have been
satisfied:
3.7.1 Notice of Completion. Delivery to Administrative Agent, in form
and substance satisfactory to Administrative Agent, of evidence that all work
with respect to such Project requiring inspection by municipal and other
Governmental Authorities having jurisdiction has been duly inspected and
approved by such authorities, that the relevant Project Owner (or other Person
that directly owns such Project) has duly recorded a notice of completion for
such Project, that all parties performing such work have been or will be paid
for such work, and that no mechanics' and/or materialmen's liens or application
therefor have been filed and all applicable filing periods for any such
mechanics' and/or materialmen's liens have expired; provided, however, that in
the event Borrower delivers to Administrative Agent either (i) a policy of title
insurance or endorsement thereto, in form and substance satisfactory to
Administrative Agent, insuring against loss arising by reason of any mechanics'
or materialmen's lien gaining priority over the relevant Deed of Trust (except
where applicable Governmental Rules prevent the insurance against such a loss)
or (ii) a bond, in form and substance satisfactory to Administrative Agent, in
the amount of all payments owed to any contractor, subcontractor or any other
person as to whom the filing periods for mechanics' and materialmen's liens have
not expired, and covering the relevant Project Owner's liability to such
contractors, subcontractors or other persons, Administrative Agent shall waive
the applicable filing periods referred to herein.
3.7.2 Completion. Completion with respect to such Project shall have
occurred and Administrative Agent shall have received a certification by
Construction Manager for such Project and by Borrower and the Independent
Engineer to such effect.
3.7.3 Annual Budget. Administrative Agent shall have received the
Annual Operating Budget with respect to such Project as required under Section
5.15.2 for the calendar year containing the date of Final Completion. In the
event that such Annual Operating Budget does not, in Administrative Agent's
opinion, properly reflect the operation of such Project during such calendar
year as a result of the actual date of Final Completion being different from the
date anticipated therefor and set forth in such Annual Operating Budget,
Administrative Agent shall have received an amendment to such Annual Operating
Budget properly reflecting the actual date of Final Completion.
3.7.4 Insurance. Insurance complying with the requirements of Section
5.18 shall be in effect, and upon the request of Administrative Agent, evidence
thereof shall be provided to Administrative Agent.
3.7.5 Applicable Permits and Applicable Third Party Permits. The
relevant Project Owner shall have obtained or caused to be obtained and
delivered to Administrative Agent all Applicable Permits with respect to such
Project, satisfactory in form and substance to Administrative Agent, together
with copies of each such Applicable Permit and a certificate of
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an authorized officer of Borrower certifying that all such Applicable Permits
have been obtained. Each Major Project Participant with respect to such Project
shall have obtained or caused to be obtained all Applicable Third Party Permits
applicable to such Person with respect to such Project, satisfactory in form and
substance to Borrower and Administrative Agent, and Borrower shall have
delivered or cause to be delivered to Administrative Agent copies or other
evidence of each such Applicable Third Party Permit and a certificate of an
authorized officer of Borrower certifying that all such Applicable Third Party
Permits have been obtained. All such Applicable Permits and Applicable Third
Party Permits shall be in full force and effect, not subject to any then current
legal proceeding or to any unsatisfied condition that could reasonably be
expected to allow material modification or revocation, and all applicable appeal
periods with respect thereto shall have expired.
3.7.6 Real Estate Rights; A.L.T.A. Surveys. Administrative Agent shall
have received as-built A.L.T.A. surveys of the Site and the Easements with
respect to such Project (or such other documentation acceptable to
Administrative Agent), reasonably satisfactory in form and substance to
Administrative Agent and the Title Insurer, certified to Administrative Agent as
to completeness and accuracy as of not more than four weeks prior to Final
Completion by a licensed surveyor reasonably satisfactory to Administrative
Agent, showing (a) as to such Site, the exact location and dimensions thereof,
including the location of all means of access thereto and all easements relating
thereto and showing the perimeter within which all foundations are located; (b)
as to such Easements, the exact location and dimensions thereof, including the
location of all means of access thereto, and all improvements or other
encroachments in or on such Easements; (c) the location and dimensions of all
improvements, fences or encroachments located in or on such Site or such
Easements; (d) that the location of such Project does not encroach on or
interfere with adjacent property or existing easements or other rights (whether
on, above or below ground), and that there are no gaps, gores, projections,
protrusions or other survey defects; (e) whether such Site or any portion
thereof is located in a special earthquake or flood hazard zone; and (f) that
there are no other matters that could reasonably be expected to be disclosed by
a survey constituting a defect in title other than relevant Permitted
Encumbrances; provided, however, that the matters described in clauses (b) and
(e) may be shown by separate maps, surveys or other information reasonably
satisfactory to Administrative Agent.
3.7.7 Title Policy. Administrative Agent shall have received (a) a
lender's A.L.T.A. policy of title insurance, together with such endorsements as
are reasonably required by Administrative Agent and are obtainable in the state
where such Project is located at reasonable costs, in the amount of an aggregate
principal amount reasonably satisfactory to Administrative Agent, not to exceed
the amount of the Title Policies delivered pursuant to Section 3.2.28, 3.3.30 or
3.3.41, as applicable, with respect to such Project, issued by the Title
Insurer, in form and substance and with such reinsurance as is reasonably
satisfactory to Administrative Agent, and insuring Administrative Agent as to
all matters described in Section 3.2.28, 3.3.30 or 3.3.41, as the case may be,
the continued first priority of the Lien on the relevant Mortgaged Property
evidenced by the relevant Deed of Trust (without a mechanics' and materialmen's
exception included in such title policy, except where applicable Governmental
Rules prevent the deletion of such exception) and as to such other matters as
Administrative Agent may reasonably request, and containing only relevant
Permitted Encumbrances, such Permitted Liens (other than Permitted Liens
described in clauses (a) and (b) of the definition thereof) as are junior and
subordinate to the relevant Deed of Trust and any other exceptions relating to
the boundaries of
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the relevant Site, encroachments and matters disclosed or discoverable by a
survey or inspection as are acceptable to Administrative Agent in its sole
discretion or (b) an endorsement to the A.L.T.A. Policy delivered to
Administrative Agent pursuant to Section 3.2.27, 3.3.29 or 3.3.41, as the case
may be, reasonably satisfactory to Administrative Agent reflecting the items
referred to above.
3.7.8 Operating Plans. Borrower shall have provided to Administrative
Agent a plan setting forth such Project's procedures for operating the Project,
fuel procurement and power marketing in form and substance reasonably
satisfactory to Administrative Agent.
3.7.9 Affiliated Party Deeds of Trust. Borrower shall have delivered to
Administrative Agent either (a) a deed of trust in form and substance
satisfactory to Administrative Agent executed by each Affiliate of Calpine
(other than the relevant Project Owner) that is party to an agreement with
respect to such Project and owns or otherwise holds an interest in any real
property related to the operation of such Project, if any, in favor of such
Project Owner and securing either (i) in the case such agreement is entered into
between such Affiliate and such Project Owner, such Affiliate's obligations to
such Project Owner under such agreement or (ii) in the case such agreement is
entered into between such Affiliate and a Person other than such Project Owner,
such Affiliate's obligations to such Project Owner under a guaranty executed by
such Affiliate in favor of such Project Owner evidencing such Affiliate's
guaranty (for the benefit of such Project Owner) of its obligations to the
relevant Person under such agreement (such guaranty to be delivered to
Administrative Agent concurrently with the delivery of such deed of trust and in
form and substance satisfactory to Administrative Agent) or (b) in the case such
agreement is entered into between such Affiliate and a Person other than such
Project Owner, such documents, agreements and other instruments in form and
substance satisfactory to Administrative Agent (other than those specified in
clause (a)(ii) above) pursuant to which such Affiliate's ownership interests in
such real property are pledged to such Project Owner (whether by collateral
assignment or otherwise) as security for such Person's obligations to such
Project Owner under a Project Document related to such agreement and, in each
such case, such amendments, supplements or modifications to each of the
Collateral Documents with respect to such Project (or additional Collateral
Documents if reasonably requested by Administrative Agent) considered necessary
by Administrative Agent to ensure that all of such Project Owner's rights under
such deed of trust, guaranty and/or other documentation, as the case may be, are
subject to the Lien of the Collateral Documents.
3.7.10 Equipment Maintenance Agreements. In the event an Equipment
Finance Company has entered into any maintenance or other service agreements
associated with or related to any equipment leased or to be leased by such
Equipment Finance Company to the Project Owner with respect to such Project, if
reasonably requested by the Technical Committee such agreements shall be
assigned or otherwise transferred by such Equipment Finance Company to such
Project Owner and any related Consents shall be amended accordingly.
3.8 Conditions Precedent to the Issuance of Letters of Credit. The
obligation of the LC Bank to issue, extend or increase the Stated Amount of any
Letter of Credit (an "LC Action") is subject to the prior satisfaction of each
of the following conditions:
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3.8.1 Representations and Warranties. Each representation and warranty
of the Member, Calpine and the Non-Affiliated Parents with respect to the
Project for which Construction Loans are being requested, if any, under the
Credit Documents and each representation and warranty of the Portfolio Entities
under the Operative Documents, in each case with respect to itself and the
Project for which the issuance, extension or increase in Stated Amount of a
Letter of Credit is being requested, shall be true and correct in all material
respects as if made on such date, unless such representation or warranty
expressly relates solely to another time.
3.8.2 No Event of Default or Inchoate Default. No Event of Default or
Inchoate Default has occurred and is continuing or will result from such LC
Action and no Non-Fundamental Project Default or Non-Fundamental Project
Inchoate Default in respect of the Project for which the issuance, extension or
increase in Stated Amount of a Letter of Credit is requested has occurred and is
continuing or will result from such LC Action.
3.8.3 Operative Documents, Applicable Permits and Applicable Third
Party Permits in Effect. Each Credit Document, Project Document, Additional
Project Document, Applicable Permit and Applicable Third Party Permit related to
the Project for which Letters of Credit are then being requested remains in full
force and effect in accordance with its terms and no material defaults have
occurred thereunder.
3.8.4 No Material Adverse Effect. No event or circumstance having a
Material Adverse Effect with respect to Borrower has occurred since the Closing
Date (except as is no longer continuing) and no event or circumstance having a
Material Adverse Effect with respect to the Project in respect of which the LC
Bank is being requested to issue, extend or increase the stated Amount of a
Letter of Credit has occurred since the Closing Date (except as is no longer
continuing).
3.8.5 Interest Coverage Ratio. From and after the first day of the
second calendar quarter following Final Completion of the first Project to
achieve Final Completion, Borrower's Four-Quarter Portfolio Interest Coverage
Ratio as of the most recent calendar quarter shall (a) to and including such
time as the fourth Project achieves Final Completion, equal the lesser of (i)
[*] to 1.00 or (ii) 90% of the projected annual Four-Quarter Portfolio Interest
Coverage Ratio reflected in the Base Case Project Projections delivered with
respect to the relevant Projects pursuant to Section 3.1 or 3.3, as the case may
be, and (b) thereafter, equal or exceed [*] to 1.00.
3.8.6 Project Satisfaction of Conditions Precedent to Initial Funding.
The Project in respect of which the LC Bank is being requested to issue, extend
or increase the stated Amount of a Letter of Credit shall be a Funded Project.
3.8.7 Debt to Capitalization Ratio. Borrower's Debt to Capitalization
Ratio shall be no more than the Maximum Debt to Capitalization Ratio.
3.8.8 Funded Projects. In the event such LC Action occurs after the
second anniversary of the Closing Date, each Initial Project shall be a Funded
Project.
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3.9 Failure of Conditions Precedent to be Satisfied for a Particular
Project.
(a) In the event that Borrower requests a Borrowing with
respect to more than one Project, and the applicable conditions set forth in
this Article 3 for such Borrowing have not been satisfied for one or more of
such Projects, then such Borrowing shall be permitted to occur for the Projects
in respect of which all applicable conditions have been satisfied, unless (i)
the failure of any condition to be satisfied with respect to any Project has the
effect of causing an Event of Default or Inchoate Default to occur under this
Agreement, in which case the requested Borrowing shall not be permitted to occur
until such time as the Event of Default or Inchoate Default has been cured and
the applicable conditions have been satisfied, or (ii) a Non-Fundamental Project
Default or Non-Fundamental Project Inchoate Default has occurred and is
continuing with respect to any Project, as the case may be, in which case the
provisions of Section 3.9(b) shall apply.
(b) In the event that a Non-Fundamental Project Default or
Non-Fundamental Project Inchoate Default has occurred and is continuing with
respect to a given Project but the conditions to the requested Borrowing in
respect of a different Project are otherwise satisfied, then:
(i) In the event that (A) the Four-Quarter Portfolio
Interest Coverage Ratio yields a minimum projected ratio of no less than [*] to
1.00 through the same term of the Base Case Project Projections delivered
pursuant to Sections 3.1 and, if applicable, 3.3, and (B) the Debt to
Capitalization Ratio yields maximum projected ratios that are no higher than the
Maximum Debt to Capitalization Ratio at any time through the Loan Maturity Date,
then Borrower shall be permitted to obtain the requested Borrowing for a Project
with respect to which no Non-Fundamental Project Default or Non-Fundamental
Project Inchoate Default has occurred and is continuing and which otherwise
satisfied the required conditions of this Article 3.
(ii) In the event that (A) the Four-Quarter Portfolio
Interest Coverage Ratio yields a minimum projected ratio of less than [*] to
1.00 through the same term of the Base Case Project Projections delivered
pursuant to Sections 3.1 and, if applicable, 3.3, or (B) the Debt to
Capitalization Ratio yields maximum projected ratios that are higher than the
Maximum Debt to Capitalization Ratio at any time through the Loan Maturity Date,
then Borrower shall not be permitted to obtain the requested Borrowing with
respect to any Project unless and until such time as (x) the Four-Quarter
Portfolio Interest Coverage Ratio and the Debt to Capitalization Ratio meet the
thresholds specified above or (y) the Non-Fundamental Project Default or
Non-Fundamental Project Inchoate Default, is no longer continuing and, in each
case, the applicable conditions in this Article 3 have been satisfied.
3.10 Funding of Equity.
(a) Notwithstanding any other provision of this Agreement to
the contrary, Borrower shall have the right to, at any time, make a Contribution
into the Construction Account or any sub-account therein and have such funds
applied to the payments of Costs in accordance with Section 7.1.2 so long as (i)
at least 10 Banking Days prior to the requested disbursement of funds from the
Construction Account, Borrower shall have provided Administrative Agent with a
certificate, dated the date of the proposed disbursement and signed by Borrower,
substantially in the form of Exhibit C-6 or C-8, as the case may be, in respect
of the Project or Turbine for which the disbursement is being requested and (ii)
at least 4 Banking Days prior to the date of the requested disbursement of funds
from the Construction Account, the Independent Engineer shall have provided
Administrative Agent with
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a certificate, substantially in the form of Exhibit C-7 or C-9, as the case may
be, relating to such disbursement; provided, however, that in the case of a
Project (rather than a Turbine) such certificates need not certify as to whether
the amount of Project Costs incurred by the Project for which the disbursement
is being requested are in excess of the amounts set forth in the corresponding
Project Budget, and the funds deposited by Borrower into the Construction
Account with respect to Projects shall be released regardless of whether or not
the requested disbursement is in excess of the amounts set forth in the
corresponding Project Budget; provided, further, that until the funding of the
initial Loans with respect to a given Project or Turbine, funds deposited by
Borrower into the Construction Account with respect to such Project or Turbine
shall be released notwithstanding failure to satisfy the conditions set forth in
(i) Sections 3.2, 3.3, 3.4.5, 3.4.7, 3.4.8, 3.4.9, 3.4.11, 3.4.12, 3.4.14,
3.4.15, 3.4.17, 3.4.18 (as it relates to such Project), 3.4.19, 3.4.20 and
3.4.22 with respect to such Project, or (ii) Sections 3.5, 3.6.5, 3.6.7, 3.6.8,
3.6.10, 3.6.11 (as it relates to such Turbine), and 3.6.12 (with respect to such
Turbine).
(b) In the event that Borrower makes a Contribution with
respect to a Project as contemplated in paragraph (a) above or otherwise with
respect to a Project which is in excess of the Base Equity and Additional
Borrower Equity which Borrower is required to contribute or cause to be
contributed under this Agreement, then Borrower shall, at any time (i) except as
set forth in the last sentence of this Section 3.10(b), after all Initial
Projects have become Funded Projects, (ii) prior to the Completion of the
Project for which such funds were contributed, (iii) when no Non-Fundamental
Project Default, Non-Fundamental Project Inchoate Default, Event of Default or
Inchoate Default has occurred and is continuing, (iv) so long as Borrower's
Four-Quarter Portfolio Interest Coverage Ratio as of the end of the most recent
calendar quarter equaled or exceeded [*] to 1.00, and (v) so long as Borrower's
Debt to Capitalization Ratio as of the end of the most recent calendar quarter
were no higher than the Applicable Debt to Capitalization Ratio then in effect,
obtain reimbursement of or repayment of, as the case may be, such Contributions
described in paragraph (a) above through Loans by satisfying the conditions set
forth in Section 3.4 with respect to such Project; provided, however, that the
difference between (x) the aggregate amount of Contributions by Borrower to the
Funded Projects less (y) the sum of the amount of the requested reimbursement or
repayment, as the case may be, plus the aggregate amount of all prior
reimbursements and repayments shall be no less than (z) [*] plus the
Contributions required pursuant to Section 5.17.1. Notwithstanding clause (i) of
this Section 3.10(b) but so long as the other conditions set forth in this
Section 3.10(b) are satisfied (including without limitation the satisfaction of
the conditions set forth in Section 3.4), on the Funding Date for the Los
Medanos Energy Center Project, Borrower shall be entitled to obtain
reimbursement for (x) any Project Costs with respect to the Los Medanos Energy
Center Project paid by Calpine from September 1, 2000 through the Funding Date
for such Project, and (y) the amount of any and all fees and costs paid to the
Lead Arrangers, the Arrangers, Administrative Agent, LC Bank or the Banks by or
on behalf of Borrower on the Closing Date.
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3.11 No Approval of Work. Neither the making of any Loan nor the issuance
of any Letter of Credit hereunder shall be deemed an approval or acceptance by
Administrative Agent or the Banks of any work, labor, supplies, materials or
equipment furnished or supplied with respect to any of the Projects or Turbines.
3.12 Waiver of Funding; Adjustment of Drawdown Requests. Subject to Section
10.9, notwithstanding the foregoing, the Required Banks, without waiving any of
the Banks' rights hereunder, shall have the right to effect a Construction
Credit Event, Turbine Purchase Credit Event or LC Action hereunder without full
compliance by Borrower with the conditions described in this Article 3. In the
event Administrative Agent determines that an item or items listed in a Drawdown
Certificate as a Cost is not properly included in such Drawdown Certificate,
Administrative Agent, in consultation with the Independent Engineer, may in its
reasonable discretion cause to be made a Loan or Loans in the amount requested
in such Drawdown Certificate less the amount of such item or items or may reduce
the amount of Loans made pursuant to any subsequent Drawdown Certificate. In the
event that Borrower prevails in any dispute as to whether such Costs were
properly included in such Drawdown Certificate, Loans in the amount requested
but not initially made shall forthwith be made.
3.13 Ability of Technical Committee to Defer Satisfaction of Conditions
Precedent to Initial Funding for Projects Five Through Twelve. The Technical
Committee (and not the Required Banks), without deferring any of the Banks'
other rights hereunder, or waiving any of the Banks' rights hereunder, shall
have the ability to defer Borrower's required satisfaction of any condition
precedent set forth in Sections 3.2 or 3.3, as the case may be, and to effect a
Construction Credit Event under Sections 3.2 or 3.3, as the case may be, with
respect to any of Projects Five Through Twelve without satisfaction by Borrower
of the condition(s) so deferred; provided that (a) in the reasonable opinion of
the Technical Committee, the deferral of Borrower's satisfaction of such
condition(s) precedent is not reasonably likely to have a Material Adverse
Effect on Borrower, (b) if such deferred condition(s) precedent is not satisfied
or waived by the Required Banks by the earlier of (i) one year after the Funding
Date with respect to the applicable Project and (ii) the scheduled Completion
Date of such Project (as set forth in such Project's Project Schedule), then
Borrower's ability to borrow Construction Loans with respect to such Project
shall be suspended until such condition has been satisfied or waived by the
Required Banks and (c) if such condition is not satisfied or waived by the
Required Banks by the scheduled Completion Date of such Project (as set forth in
such Project's Project Schedule), Borrower shall calculate Borrower's Debt to
Capitalization Ratio and promptly make or cause to be made Contributions so that
Borrower's Debt to Capitalization Ratio does not exceed the Applicable Debt to
Capitalization Ratio then in effect; provided, however, Borrower may, at its
option, prepay all Loans attributable to such Project (with amounts other than
amounts in any Account or otherwise constituting Collateral), in which event
Administrative Agent thereafter shall execute and deliver to Borrower such
documents and instruments, including UCC-3 termination statements, as reasonably
may be necessary to release the Liens granted to the Banks in the relevant
Project and/or equity interests with respect to the relevant Portfolio Entities
with respect to such Project (including the Lien on cash flows from such
Project).
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ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
Borrower makes the following representations and warranties to
and in favor of the Lead Arrangers, Administrative Agent, LC Bank and the other
Banks as of the Closing Date and as of the date of each Construction Credit
Event, Turbine Purchase Credit Event and LC Action, in each case to the extent
set forth in Article 3. All of these representations and warranties shall
survive the Closing Date, the issuance of any Letters of Credit and the making
of the Loans:
4.1 Organization.
4.1.1 Borrower is a limited liability company duly constituted, validly
existing and in good standing under the laws of the State of Delaware and is
duly qualified, authorized to do business and in good standing in each other
jurisdiction where the character of its properties or the nature of its
activities makes such qualification necessary. Borrower has all requisite power
and authority to own or hold under lease and operate the property it purports to
own or hold under lease and to carry on its business as now being conducted and
as now proposed to be conducted. On the Closing Date, Member is the sole member
of Borrower.
4.1.2 Member (a) is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware with all requisite
corporate power and authority under the laws of the State of Delaware to enter
into the Limited Liability Company Agreement and, as the sole member of the
Borrower, to perform its obligations thereunder and to consummate the
transactions contemplated thereby, (b) is duly qualified, authorized to do
business and in good standing in each other jurisdiction where the character of
its properties or the nature of its activities makes such qualification
necessary, (c) has the corporate power (i) to carry on its business as now being
conducted and as proposed to be conducted by it, (ii) to execute, deliver and
perform each Operative Document to which it is a party, in its individual
capacity, and (iii) to take all action as may be necessary to consummate the
transactions contemplated thereunder and (d) has the power and authority under
the Limited Liability Company Agreement to execute and deliver, on behalf of
Borrower, each Operative Document to which Borrower is a party.
4.1.3 Each of the Portfolio Entities (other than Borrower and the
Corporate Portfolio Entities) with respect to the Initial Projects and Funded
Subsequent Projects is a limited partnership or limited liability company, as
the case may be, and each of the Corporate Portfolio Entities is a corporation,
in each case duly organized, validly existing and in good standing under the
laws of the State of Delaware (except for Freestone Power Generation, LP and
Calpine Power Equipment LP, such Portfolio Entities being validly existing and
in good standing under the laws of the State of Texas) and is duly qualified,
authorized to do business and in good standing in the states where the character
of its properties or the nature of its activities makes such qualification
necessary including, in respect to a Project Owner and an Equipment Finance
Company party to an Equipment Lease, the state where the respective Project is
located. Each such Portfolio Entity has all requisite partnership, company or
corporate, as the case may be, power and authority to own or hold under lease
and operate the property it purports to own or hold under lease and to carry on
its business as now being conducted and as now proposed to be
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conducted and to execute, deliver and perform each Operative Document to which
it is a party. Each such Portfolio Entity is directly or indirectly a
wholly-owned Subsidiary of Borrower, except in the case of Project Owners with
respect to Subsequent Projects where such Project Owners are at least directly
or indirectly 50% owned by Borrower and the Delta Energy Center Project Owner.
4.2 Authorization; No Conflict. Each Portfolio Entity has duly authorized,
executed and delivered, or has been properly assigned, each Operative Document
to which such Portfolio Entity is a party and neither such Portfolio Entity's
execution and delivery thereof nor its consummation of the transactions
contemplated thereby nor its compliance with the terms thereof (a) does or will
contravene the constituent documents or any other Legal Requirement applicable
to or binding on such Portfolio Entity or any of its properties, (b) does or
will contravene or result in any breach of or constitute any default under, or
result in or require the creation of any Lien (other than Permitted Liens) upon
any of its properties under, any agreement or instrument to which such Portfolio
Entity is a party or by which it or any of its properties may be bound or
affected or (c) does or will require the consent or approval of any Person which
has not already been obtained.
4.3 Enforceability. Each of the Operative Documents to which each Portfolio
Entity is a party is a legal, valid and binding obligation of such Portfolio
Entity enforceable against such Portfolio Entity in accordance with its terms,
except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting the enforcement of creditors' rights or by the effect of general
equitable principles. None of the Operative Documents to which a Portfolio
Entity is a party has been amended or modified except in accordance with this
Agreement.
4.4 Compliance with Law. There are no violations by any Portfolio Entity,
the Member or, to Borrower's knowledge, Calpine, of any Legal Requirement which
could reasonably be expected to have a Material Adverse Effect on Borrower or
any Initial Project or Funded Subsequent Project. Except as otherwise have been
delivered to Administrative Agent, no notices of violation of any Legal
Requirement relating to any Initial Project or Funded Subsequent Project or
related Site or any Turbine assigned to an Initial Project (as set forth on
Exhibit G-3) or Funded Turbine have been issued, entered or received by any
Portfolio Entity, the Member or, to Borrower's knowledge, Calpine.
4.5 Business, Debt, Contracts, Joint Ventures Etc.
4.5.1 Neither the Member nor any Portfolio Entity has conducted any
business other than the business contemplated by the Operative Documents, has
any outstanding Debt or other material liabilities other than pursuant to or
allowed by the Operative Documents. None of such Persons is party to or bound by
any material contract other than the Operative Documents to which it is a party.
4.5.2 No Portfolio Entity is (a) a general partner or a limited partner
in any general or limited partnership or a member in any limited liability
company or (b) a joint venturer in any joint venture, except, (i) Borrower, (ii)
Intermediate Parents, (iii) in the case of Project Owners with respect to
Subsequent Projects where either (A) such Project Owners are at
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least directly or indirectly 50% owned by Borrower or (B) such Subsequent
Projects are at least 50% owned by the respective Project Owners, or (iv) the
Delta Energy Center Project Owner.
4.5.3 Neither any Portfolio Entity nor the Member has any subsidiaries
other than Portfolio Entities.
4.5.4 No Portfolio Entity has any properties or assets other than as
permitted by the Credit Documents.
4.6 Adverse Change.
4.6.1 With respect to each Initial Project and Funded Subsequent
Project, to the best of Borrower's knowledge, there has occurred no material
adverse change in the Project Budget, Project Schedule (with respect to the
Initial Projects, if delivered) or Base Case Project Projections, in the
economics or feasibility of constructing and/or operating such Project, or in
the financial condition, business or property of any Major Project Participant,
or any other event or circumstance which is reasonably likely to have a Material
Adverse Effect on Borrower or such Project (a) as of the Closing Date, since
July 31, 2000 and (b) after the Closing Date, except as disclosed to
Administrative Agent in writing at the time the representation in this Section
4.6 is being made, since such Project's Funding Date).
4.6.2 With respect to each Funded Turbine, to the best of Borrower's
knowledge, there has occurred no material adverse change in the economics or
feasibility of procuring or owning such Turbine, or in the financial condition,
business or property of the Turbine Purchase Contractor with respect to such
Turbine, or any other event or circumstance which is reasonably likely to have a
Material Adverse Effect on Borrower, except as disclosed to Administrative Agent
in writing at the time the representation in this Section 4.6 is being made,
since such Turbine's Turbine Funding Date.
4.7 Investment Company Act, Etc. Neither any Portfolio Entity nor the
Member is an investment company or a company controlled by an investment
company, within the meaning of the Investment Company Act of 1940, and neither
any Portfolio Entity nor the Member is or has been determined by the Securities
and Exchange Commission or any other Governmental Authority to be subject to, or
not exempt from, regulation under PUHCA or the FPA (other than as provided by
PURPA or as an Exempt Wholesale Generator).
4.8 ERISA. Either (a) there are no ERISA Plans for any Portfolio Entity or
any member of the Controlled Group or (b) each Portfolio Entity and each member
of the Controlled Group have fulfilled their obligations (if any) under the
minimum funding standards of ERISA and the Code for each ERISA Plan, each ERISA
Plan is in compliance in all material respects with the currently applicable
provisions of ERISA and the Code and neither any Portfolio Entity nor any
Controlled Group member has incurred any liability to the PBGC or any ERISA Plan
under Title IV of ERISA (other than liability for premiums due in the ordinary
course). None of any Portfolio Entity's assets constitute assets of an employee
benefit plan within the meaning of 29 CFR Section 2510.3-101.
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4.9 Permits. With respect to each Funded Project in the case of Sections
4.9.1 and 4.9.2, and with respect to each Turbine assigned to any Initial
Project (as set forth on Exhibit G-3) and each Funded Turbine in the case of
Section 4.9.3:
4.9.1 There are no Permits under existing law as such Project is
designed that are or will become Applicable Permits other than the Applicable
Permits described in the applicable Permit Schedule. Except as disclosed
therein, each Applicable Permit listed in Part I(A) of the applicable Permit
Schedule is in full force and effect and is not subject to any current legal
proceeding or to any unsatisfied condition that could reasonably be expected to
have a Material Adverse Effect on Borrower or such Project, and all applicable
appeal periods with respect thereto have expired. Each Permit listed in Part
II(A) of the applicable Permit Schedule is either (a) timely obtainable at a
cost consistent with the applicable Project Budget prior to the time the
applicable Project Owner requires such Permit and is of a type that is routinely
granted upon application and that would not normally be obtained before
contemplated by Borrower or the relevant Project Owner or (b) able to be
eliminated as an Applicable Permit through the implementation of alternative
solutions at a cost consistent with the applicable Project Budget. No fact or
circumstance exists, to Borrower's knowledge, which indicates that any Permit
identified in Part II(A) of the applicable Permit Schedule shall not be timely
obtainable at a cost consistent with the applicable Project Budget without
material difficulty or delay by the relevant Project Owner before it becomes an
Applicable Permit. Each Project Owner with respect to an Initial Project or
Funded Subsequent Project is in compliance in all material respects with all
Applicable Permits.
4.9.2 There are no Permits under existing law as such Project is
designed that are or will become Applicable Third Party Permits other than the
Applicable Third Party Permits described in the applicable Permit Schedule
(other than those, the failure of which to obtain could not reasonably be
expected to have a Material Adverse Effect on Borrower or such Project). Except
as disclosed therein, each Applicable Third Party Permit listed in Part I(B) of
the applicable Permit Schedule is in full force and effect and is not subject to
current legal proceeding or to any unsatisfied condition that could reasonably
be expected to have a Material Adverse Effect on Borrower or such Project, and
all applicable appeal periods with respect thereto have expired. No fact or
circumstance exists, to Borrower's knowledge, which indicates that any Permit
identified in Part II(B) of the applicable Permit Schedule shall not be timely
obtainable at a cost consistent with the applicable Project Budget without
material difficulty or delay by the applicable Major Project Participant before
it becomes an Applicable Third Party Permit. To the best knowledge of Borrower,
each Major Project Participant is in compliance in all material respects with
its respective Applicable Third Party Permits, each other Major Project
Participant possesses all licenses, franchises, patents, copyrights, trademarks
and trade names, or rights thereto necessary to perform its duties under the
Operative Documents to which it is a party, and such Person is not in violation
of any valid rights of others with respect to any of the foregoing which could
reasonably be expected to have a Material Adverse Effect on Borrower or such
Project.
4.9.3 To the best knowledge of Borrower, each Turbine Purchase
Contractor possesses all licenses, franchises, patents, copyrights, trademarks
and trade names, or rights thereto necessary to perform its duties under the
Turbine Purchase Contract to which it is a party, and such Turbine Purchase
Contractor is not in violation of any valid rights of others with
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respect to any of the foregoing which could reasonably be expected to have a
Material Adverse Effect on Borrower.
4.10 Qualifying Facility/Exempt Wholesale Generator. Each Initial Project
and Funded Subsequent Project, upon Completion of such Project, will be a
Qualifying Facility or an Eligible Facility and, from and after the commencement
of commercial operations of each Project that is an Eligible Facility, the
respective Project Owner will be an Exempt Wholesale Generator.
4.11 Hazardous Substance.
4.11.1 Except as set forth in Exhibit G-8: (a) neither any Portfolio
Entity nor the Member nor Calpine (the "Subject Companies"), with respect to the
Sites, Improvements or other Mortgaged Properties owned or leased by a Portfolio
Entity, is or has in the past been in violation of any Hazardous Substance Law
which violation could reasonably be expected to result in a material liability
to any of the Subject Companies or their respective properties and assets or in
an inability of any Portfolio Entity to perform its obligations under the
Operative Documents; (b) none of the Subject Companies nor, to the best
knowledge of the Member and Borrower, any third party has used, released,
discharged, generated, manufactured, produced, stored, or disposed of in, on,
under, or about the Sites, Improvements or other Mortgaged Properties owned or
leased by any Portfolio Entity, or transported thereto or therefrom, any
Hazardous Substances that could reasonably be expected to subject the Banks to
liability or the Subject Companies to liability, under any Hazardous Substance
Law; (c) there are no underground tanks, whether operative or temporarily or
permanently closed, located on the Sites, Improvements or other Mortgaged
Properties owned or leased by any Portfolio Entity; (d) there are no Hazardous
Substances used, stored or present at, on or, to the best knowledge of the
Member and Borrower, near the Sites, Improvements or other Mortgaged Properties
owned or leased by any Portfolio Entity, except in compliance with Hazardous
Substance Laws and other Legal Requirements or as disclosed in the Environmental
Reports; and (e) to the best knowledge of the Member and Borrower, there neither
is nor has been any condition, circumstance, action, activity or event that
could reasonably be expected to be a material violation by the Subject Companies
of any Hazardous Substance Law, or to result in liability to the Banks or
material liability to the Subject Companies under any Hazardous Substance Law.
4.11.2 Except as set forth on Exhibit G-7 or Exhibit G-8, there is no
pending or, to the best knowledge of Borrower, threatened, action or proceeding
by any Governmental Authority (including, without limitation, the U.S.
Environmental Protection Agency) or any non-governmental third party with
respect to the presence or Release of Hazardous Substances in, on, from or to
the Sites, Improvements or other Mortgaged Properties owned or leased by any
Portfolio Entity.
4.11.3 Neither the Member nor Borrower nor Calpine has knowledge of any
past or existing violations of any Hazardous Substances Laws by any Person
relating in any way to the Sites, Improvements or other Mortgaged Properties
owned or leased by any Portfolio Entity.
4.12 Litigation. Except as set forth on Exhibit G-7 there are no pending
or, to the best knowledge of Borrower, threatened actions or proceedings of any
kind, including actions or
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proceedings of or before any Governmental Authority, to which any Portfolio
Entity, the Member, Calpine, or, to the best knowledge of Borrower, any other
Major Project Participant, Turbine Purchase Contractor or Project is a party or
is subject, or by which any of them or any of their properties or a Project or
Turbine are bound, which if adversely determined to or against any Portfolio
Entity, any other Major Project Participant or a Project or Turbine could
reasonably be expected to have a Material Adverse Effect on any Initial Project,
Funded Subsequent Project or Borrower.
4.13 Labor Disputes and Acts of God. Neither the business nor the
properties of any Portfolio Entity, the Member, Calpine, or, to the best
knowledge of Borrower, any other Major Project Participant or Turbine Purchase
Contractor are affected by any fire, explosion, accident, strike, lockout or
other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of
the public enemy, or other casualty (whether or not covered by insurance), which
could reasonably be expected to have a Material Adverse Effect on any Initial
Project, Funded Subsequent Project or Borrower.
4.14 Project Documents and Turbine Purchase Contracts.
4.14.1 Copies of all of the Project Documents and Turbine Purchase
Contracts in effect with respect to the Funded Projects and the Funded Turbines,
as the case may be, as of such date have been delivered to Administrative Agent
by Borrower. Except as has been previously disclosed in writing to
Administrative Agent, as of the date of delivery of such Project Documents or
Turbine Purchase Contracts none of such Project Documents or Turbine Purchase
Contracts has been amended, modified or terminated.
4.14.2 To Borrower's knowledge, the representations and warranties of
the Major Project Participants contained in the Operative Documents relating to
the Initial Projects, the Funded Subsequent Projects, the Turbines assigned to
Initial Projects (as set forth on Exhibit G-3) and the Funded Turbines, as the
case may be, other than this Agreement are true and correct.
4.15 Disclosure. Neither this Agreement nor any certificate or other
documentation furnished to Administrative Agent, or to any consultant submitting
a report to Administrative Agent, by or, to the knowledge of Borrower, on behalf
of any Portfolio Entity in connection with the transactions contemplated by this
Agreement, the other Project Documents or Turbine Purchase Contracts or the
design, description, testing or operation of a Project or a Turbine, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein not
misleading under the circumstances in which they were made at the time such
statements are made. As of the Closing Date, there is no fact known to Borrower
which has had or could reasonably be expected to have a Material Adverse Effect
on Borrower, any Initial Project, or any Funded Subsequent Project which has not
been set forth in this Agreement or in the other documents, certificates and
written statements furnished to Administrative Agent and/or the Independent
Engineer, by or on behalf of Borrower in connection with the transactions
contemplated hereby. The documentation furnished to Administrative Agent and to
the Independent Engineer taken as a whole, including without limitation written
updated or supplemented information, is true and correct in all material
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respects and all such documentation does not omit to state any fact which would
have a Material Adverse Effect on Borrower, any Initial Project or any Funded
Subsequent Project.
4.16 Private Offering by Borrower. Assuming that the Banks are acquiring
the Notes for investment purposes only, and not for purposes of resale or
distribution thereof except for assignments or participations as provided in
Sections 10.13 and 10.14, no registration of the Notes under the Securities Act
of 1933, as amended, or under the securities laws of the State of New York, or
any other state in which a Project is located is required in connection with the
offering, issuance and sale of the Notes hereunder. Neither Borrower nor anyone
acting on its behalf has taken, or will take, any action which would subject the
issuance or sale of the Notes to Section 5 of the Securities Act of 1933, as
amended.
4.17 Taxes. The Member and each Portfolio Entity has filed all federal,
state and local tax returns that it is required to file, has paid all taxes it
is required to pay to the extent due (other than those taxes that it is
contesting in good faith and by appropriate proceedings, with adequate,
segregated reserves or other security reasonably acceptable to Administrative
Agent established for such taxes) and, to the extent such taxes are not due, has
established reserves that are adequate for the payment thereof and are required
by GAAP. For federal income tax purposes, each Portfolio Entity other than the
Corporate Portfolio Entities is a partnership or a limited liability company and
not an association taxed as a corporation.
4.18 Governmental Regulation. Except to the extent that the FPA is
applicable solely by reason of a Portfolio Entity being an Exempt Wholesale
Generator or the owner of a Qualifying Facility, none of any Portfolio Entity,
the Member, Administrative Agent, or the Banks, nor any Affiliate of any of them
will, solely as a result of the construction, ownership, leasing or operation of
any Project or any Turbine, the sale of electricity therefrom or the entering
into any Operative Document or any transaction contemplated hereby or thereby,
be subject to, or not exempt from, regulation under the FPA or PUHCA or under
state laws and regulations respecting the rates or the financial or
organizational regulation of electric utilities. No Portfolio Entity is subject
to regulation under any Governmental Rule as to securities, rates or financial
or organizational matters that would preclude any Loans, or the incurrence by
any Portfolio Entity of any of the Obligations or the execution, delivery and
performance by any Portfolio Entity of the Operative Documents. No Portfolio
Entity will be deemed by any Governmental Authority having jurisdiction to be
subject to financial, organizational or rate regulation as an "electric
utility," "electric corporation," "electrical company," "public utility,"
"public utility holding company" or any similar entity under any existing law,
rule or regulation of any Governmental Authority.
4.19 Regulation U, Etc. No Portfolio Entity is engaged principally, or as
one of its principal activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (as defined in Regulations T, U
or X of the Federal Reserve Board), and no part of the proceeds of the Loans or
the Project Revenues will be used by a Portfolio Entity to purchase or carry any
such margin stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock.
4.20 Project Budgets; Projections. Borrower has prepared the Project
Budgets and the Base Case Project Projections and is responsible for developing
the assumptions on which the
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Project Budget and the Base Case Project Projections are based; and the Project
Budgets and the Base Case Project Projections for the Initial Projects and the
Funded Subsequent Projects (a) are based on reasonable assumptions as to all
legal and factual matters material to the estimates set forth therein, (b) as of
the date delivered are consistent with the provisions of the Project Documents
and (c) indicate that the estimated Project Costs with respect to such Project
will not exceed funds available (including Committed Equity Funds) to pay
Project Costs with respect to such Project. In the reasonable opinion of
Borrower, as of the date delivered the textual material accompanying the Base
Case Project Projections for the Initial Projects and the Funded Subsequent
Projects discloses all information reasonably necessary for an understanding of
the Base Case Project Projections, and does not contain any material
misstatements or omit any information which, in conjunction with other
information given, would be necessary to make such information not materially
misleading.
4.21 Financial Statements. The financial statements of the Portfolio
Entities, Calpine, the Member and any Affiliated Major Project Participants
delivered pursuant to Sections 3.2.22, 3.3.23, 3.5.15 and 5.5 are true, complete
and correct and fairly present the financial condition of each such Person as of
the date thereof. Such financial statements have been prepared in accordance
with GAAP. Neither the Portfolio Entities, the Member, Calpine or such
Affiliated Major Project Participants has any material liabilities, direct or
contingent, except as has been disclosed in such financial statements.
4.22 Existing Defaults. No Portfolio Entity is in default under any
material term of any Operative Document relating to the Initial Projects, the
Funded Subsequent Projects, the Turbines assigned to Initial Projects (as set
forth on Exhibit G-3) or the Funded Turbines or any agreement relating to any
obligation of any Portfolio Entity for or with respect to borrowed money, and to
the best of Borrower's knowledge, no other party to any Project Document or
Turbine Purchase Contract is in default thereunder.
4.23 No Default. No Event of Default, Inchoate Default, Non-Fundamental
Project Default or Non-Fundamental Project Inchoate Default has occurred or is
existing.
4.24 Offices, Location of Collateral.
4.24.1 The chief executive office or chief place of business (as such
term is used in Article 9 of the Uniform Commercial Code as in effect in each
state where the Projects are located and the State of New York from time to
time) of Borrower and each Portfolio Entity set forth in Schedule 4.24.
Borrower's federal employer identification number is ▇▇-▇▇▇▇▇▇▇ and each of the
other Portfolio Entities' federal employer numbers are set forth in Schedule
4.24 or as otherwise delivered to Administrative Agent in connection with the
satisfaction of the requirements for initial funding of Construction Loans or
Turbine Purchase Loans under Section 3.2, 3.3 or 3.5, as the case may be:
4.24.2 With respect to each Project, all of the tangible Collateral
(other than the Accounts and general intangibles), including the Mortgaged
Properties is, or when installed pursuant to the Project Documents will be,
located on the Site or the Easements or at the address set forth in Section
4.24.1.
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4.24.3 The location of each Portfolio Entity's books of accounts and
records is set forth in Schedule 4.24.
4.25 Title and Liens.
(a) With respect to the properties and assets attributable to
the Initial Contribution, the Portfolio Entities with respect to such properties
and assets has good, and with respect to real property, marketable and insurable
title to such properties and assets, in each case free and clear of all Liens,
encumbrances or other exceptions to title other than Permitted Liens.
(b) With respect to each Funded Project (other than Funded
Subsequent Projects in which the relevant Project Owner holds a partial
undivided ownership interest), the Project Owner and the Equipment Finance
Company (with respect to any equipment subject to an Equipment Lease) with
respect to such Project have good, and with respect to real property, marketable
and insurable title to such Project, and all of the Collateral relating to such
Project, and good, marketable and insurable title to, or as applicable, a
leasehold estate in, the Site and the Easements relating to such Project in
existence as of the date this representation is made (except that title to
certain of the Easements which are licenses may not be insurable), in each case
free and clear of all Liens, encumbrances or other exceptions to title other
than Permitted Liens. With respect to each Funded Turbine, such Turbine is
wholly-owned by a Turbine Owner and such Turbine Owner has good title to such
Turbine, free and clear of all Liens, encumbrances or other exceptions to title
other than Permitted Liens.
(c) With respect to each Funded Subsequent Project in which
the relevant Project Owner (subject to the last sentence of clause (b) above)
holds a partial undivided ownership interest, such Project Owner has good, and
with respect to real property, marketable and insurable title to the applicable
undivided portion of such Project, and all of the Collateral relating to such
Project, and good, and with respect to real property, marketable and insurable
title to, or as applicable, a leasehold estate in, the applicable undivided
portion of the Site and the Easements relating to such Project in existence as
of the date this representation is made (except that title to certain of the
Easements which are licenses may not be insurable), in each case free and clear
of all Liens, encumbrances or other exceptions to title other than Permitted
Liens.
(d) Subject to clause (c) above, (i) each Project Owner owns
100% of its respective Project, (ii) each Project Owner holds title to only one
Project, (iii) each Funded Turbine is 100% owned by a Turbine Owner that is a
directly or indirectly wholly-owned Subsidiary of Borrower (or, with the consent
of the Required Banks, if the relevant Project Owner is a partially-owned
Subsidiary of Borrower, a partially-owned Subsidiary of Borrower), and (iv) all
equipment leased to a Funded Project pursuant to an Equipment Lease is 100%
owned by an Equipment Finance Company that is a directly or indirectly
wholly-owned Subsidiary of Borrower (or, with the consent of the Required Banks,
if the relevant Project Owner is a partially-owned Subsidiary of Borrower, a
partially-owned Subsidiary of Borrower).
(e) The Lien of the Collateral Documents constitutes a valid
lien on all Collateral comprising the Initial Contribution. The Lien of the
Collateral Documents constitutes a first priority perfected security interest in
all the personal property relating to the Initial
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Contribution, subject to no Liens except Permitted Liens described in clauses
(a), (b) and (e) of the definition thereof.
(f) The Lien of the Collateral Documents (to the extent then
existing) constitutes a valid lien on all Collateral relating to the Funded
Projects (including any equipment leased to a Project Owner pursuant to an
Equipment Lease) and relevant Turbine Owners' interest in the Funded Turbines.
The Lien of the Collateral Documents (to the extent then existing) constitutes a
valid and subsisting first priority Lien of record on all the Mortgaged
Properties relating to the Initial Projects and the Funded Subsequent Projects
described in the Deeds of Trust and, a first priority perfected security
interest in all the personal property relating to the Funded Projects and the
Funded Turbines described in the Collateral Documents, subject to no Liens
except Permitted Encumbrances and Permitted Liens described in clauses (a), (b)
and (c) of the definition thereof; provided, however, as set forth in the
Project/Turbine Owner Security Agreements, the Lien on the Collateral comprising
each Project or Turbine shall not secure those Obligations relating to or
arising from Projects that have achieved Operation prior to the relevant Funding
Date or Turbine Funding Date, as the case may be.
4.26 Trademarks. Each Portfolio Entity owns or has the right to use all
patents, trademarks, service marks, trade names, copyrights, licenses and other
rights, which are necessary for the operation of its business. Nothing has come
to the attention of Borrower to the effect that (a) any material product,
process, method, substance, part or other material presently contemplated to be
sold by or employed by any Portfolio Entity in connection with its business will
infringe any patent, trademark, service ▇▇▇▇, trade name, copyright, license or
other right owned by any other Person, (b) there is pending or threatened any
claim or litigation against or affecting any Portfolio Entity contesting its
right to sell or use any such product, process, method, substance, part or other
material or (c) there is, or there is pending or proposed, any patent,
invention, device, application or principle or any statute, law, rule,
regulation, standard or code relating to the use of technology or intellectual
property by any Portfolio Entity which could reasonably have a Material Adverse
Effect on Borrower or a Project.
4.27 Collateral. The security interests granted to Administrative Agent
pursuant to the Collateral Documents in the Collateral related to the Initial
Contribution, the Funded Projects (including equipment leased to a Project Owner
pursuant to an Equipment Lease) and the Funded Turbines (a) constitute as to
personal property included in the Collateral and, with respect to subsequently
acquired personal property included in the Collateral, will constitute, a
perfected security interest under the UCC to the extent a security interest can
be perfected by filing or, in the case of the Accounts, the Portfolio Entity
Notes and the Pledged Equity Interests (the Pledged Equity Interests being
"certificated securities" as defined in Article 8 of the UCC), by possession by
or on behalf of the secured party and (b) are, and, with respect to such
subsequently acquired personal property, will be, as to Collateral related to
the Initial Contribution, the Funded Projects (including equipment leased to a
Project Owner pursuant to an Equipment Lease) and the Funded Turbines perfected
under the UCC as aforesaid, superior and prior to the rights of all third
Persons now existing or hereafter arising whether by way of mortgage, lien,
security interests, encumbrance, assignment or otherwise; provided, however, as
set forth in the Collateral Documents, the Lien on the Collateral comprising
each Project (including equipment leased to a Project Owner pursuant to an
Equipment Lease) or Turbine shall not secure those Obligations relating to or
arising from Projects that have achieved
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Operation prior to the relevant Funding Date or Turbine Funding Date, as the
case may be. Except to the extent possession of portions of such Collateral is
required for perfection, all such action as is necessary has been taken to
establish and perfect Administrative Agent's rights in and to such Collateral to
the extent Administrative Agent's security interest can be perfected by filing,
including any recording, filing, registration, giving of notice or other similar
action. No filing, recordation, re-filing or re-recording other than those
listed on Exhibit D-6 hereto is necessary to perfect and maintain the perfection
of the interest, title or Liens of the Collateral Documents related to the
Initial Contribution, the Funded Projects (including equipment leased to a
Project Owner pursuant to an Equipment Lease) and the Funded Turbines, and all
such filings or recordings will have been made to the extent Administrative
Agent's security interest can be perfected by filing. Each Portfolio Entity has
properly delivered or caused to be delivered to Administrative Agent all such
Collateral that requires perfection of the Lien and security interest described
above by possession.
4.28 Sufficiency of Project Documents.
4.28.1 With respect to each Initial Project and Funded Subsequent
Project, other than those that can be reasonably expected to be commercially
available when and as required, the services to be performed, the materials to
be supplied and the real property interests, the Easements and other rights
granted or to be granted pursuant to the Project Documents in effect as of such
date:
(a) comprise all of the property interests necessary to secure
any right material to the acquisition, leasing, development, construction,
installation, completion, operation and maintenance of such Project in
accordance with all Legal Requirements and in accordance with the Project
Schedule, all without reference to any proprietary information not owned by the
relevant Project Owner;
(b) are sufficient to enable such Project to be located,
constructed and operated on its respective Site and the Easements, respectively;
and
(c) provide adequate ingress and egress from the Site for such
Project for any reasonable purpose in connection with the construction and
operation of such Project.
4.28.2 With respect to each Initial Project and Funded Subsequent
Project, there are no services, materials or rights required for the
construction or operation of such Project in accordance with the Construction
Contracts and the Base Case Project Projections, respectively, other than those
that can reasonably be expected to be commercially available at the Site for
such Project on commercially reasonable terms consistent with the Project Budget
and the Base Case Project Projections, respectively.
4.29 Utilities. With respect to each Initial Project and Funded Subsequent
Project, all gas and electrical interconnection and utility services necessary
for the construction and the operation of such Project for its intended purposes
are available at such Project or will be so available as and when required upon
commercially reasonable terms consistent with the Project Budget, Project
Schedule and the Base Case Project Projections.
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4.30 Roads/Transmission Line. With respect to each Initial Project and
Funded Subsequent Project, other than those that can be reasonably expected to
be commercially available when and as required:
4.30.1 All roads necessary for the construction and full utilization of
such Project for its intended purposes have either been completed or the
necessary rights of way therefor have been acquired.
4.30.2 All necessary easements, rights of way, licenses, agreements and
other rights for the construction, interconnection and utilization of the
interconnection facilities have been acquired.
4.31 Proper Subdivision. With respect to each Initial Project and Funded
Subsequent Project, at such time as a Project Owner obtains any title or
leasehold interests therein, the Site for such Project has been properly
subdivided or entitled to exception therefrom, and for all purposes such Site
may be mortgaged, conveyed and otherwise dealt with as separate legal lots or
parcels.
4.32 Flood Zone Disclosure. With respect to each Initial Project and Funded
Subsequent Project, none of the Collateral in respect of such Project includes
improved real property that is or will be located in an area that has been
identified by the Director of the Federal Emergency Management Agency as an area
having special flood hazards and in which flood insurance has been made
available under the National Flood Insurance Act of 1968, as amended.
4.33 Acquisition of Real Property. No Portfolio Entity has acquired or
leased any real property or other interest in real property (excluding the
acquisition (but not the exercise) of any options to acquire any such interests
in real property) except as otherwise permitted pursuant to Section 6.23.
ARTICLE 5.
COVENANTS OF BORROWER
Borrower covenants and agrees that so long as this Agreement
is in effect, it will, and will cause each other Portfolio Entity to:
5.1 Use of Proceeds and Revenues.
5.1.1 Proceeds. Unless otherwise applied by Administrative Agent
pursuant to this Agreement, deposit the proceeds of the Loans advanced for each
Project or Turbine, as the case may be, the Additional Borrower Equity and the
other Contributions made pursuant to Section 3.10(a) in the relevant
Construction Sub-Account, and except to the extent permitted in Section 3.10(b),
(a) hold such proceeds as a trust fund for the payment of Costs of such Project
or Turbine, as the case may be, and (b) use them solely to pay Costs of such
Project or Turbine, as the case may be. Notwithstanding anything to the contrary
contained in this Agreement, Turbine Purchase Loans shall only be used to pay
Turbine Costs associated with Turbines assigned to Unfunded Projects (as set
forth on Exhibit G-3).
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5.1.2 Revenues. With respect to each Initial Project and Funded
Subsequent Project, unless otherwise applied by Administrative Agent pursuant to
Articles 7 and 8, (a) deposit all Project Revenues received or due any Portfolio
Entity other than Insurance Proceeds, Eminent Domain Proceeds and damage
payments described in Section 7.7 received prior to Completion of such Project
in the relevant Construction Sub-Account for application toward Project Costs
and otherwise for application as set forth in Section 7.1, (b) deposit all
Project Revenues received or due any Portfolio Entity other than Insurance
Proceeds, Eminent Domain Proceeds and damage payments described in Section 7.7
received after Completion of such Project in the Revenue Account for application
solely for the purposes and in the order and manner provided in Section 7.2, and
(c) deposit all Insurance Proceeds, Eminent Domain Proceeds and damage payments
described in Section 7.7 received at any time in the Loss Proceeds Account for
application solely for the purposes, and in the order and manner, provided in
Section 7.5. With respect to each Turbine assigned to an Initial Project (as set
forth on Exhibit G-3) and Funded Turbine, unless otherwise applied by
Administrative Agent pursuant to Articles 7 and 8, deposit all Insurance
Proceeds and damage payments described in Section 7.7 received at any time in
the Loss Proceeds Account for application solely for the purposes, and in the
order and manner, provided in Section 7.5.
5.2 Payment.
5.2.1 Credit Documents. Pay all sums due under this Agreement and the
other Credit Documents according to the terms hereof and thereof.
5.2.2 Project Documents and Turbine Purchase Contracts. With respect to
each Initial Project, Funded Project (including equipment leased to a Project
Owner pursuant to an Equipment Lease), Turbine assigned to an Initial Project
(as set forth on Exhibit G-3) and Funded Turbine, pay all obligations due under
the Project Documents and Turbine Purchase Contracts, howsoever arising, as and
when due and payable, except (a) such as may be contested in good faith or as to
which a bona fide dispute may exist, provided that Administrative Agent is
satisfied in its reasonable discretion that non-payment of such obligation
pending the resolution of such contest or dispute will not in any way endanger
or have a Material Adverse Effect on such Project, the Banks' Liens in the
Collateral, any Portfolio Entity or that provision is made to the satisfaction
of Administrative Agent in its reasonable discretion for the posting of security
(other than the Collateral) for or the bonding of such obligations or the prompt
payment thereof in the event that such obligation is payable and (b) each
Portfolio Entity's trade payables which shall be paid in the ordinary course of
business.
5.3 Warranty of Title. Maintain (a) with respect to properties and assets
attributable to the Initial Contribution, good and, with respect to real
property, marketable and insurable title to such properties and assets, (b) with
respect to each Funded Project, good, marketable and insurable leasehold or fee
title, as the case may be, to the Site and related Easements (or the applicable
undivided portion thereof), subject only to Permitted Liens, (c) with respect to
each Funded Project (including equipment leased to a Project Owner pursuant to
an Equipment Lease) and Funded Turbine, good title to such Project (including
equipment leased to a Project Owner pursuant to an Equipment Lease), Turbine or
the related Turbine Purchase Contract, as applicable, and (d) good, and with
respect to real property, marketable and insurable title to all of
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its other respective properties and assets (other than properties and assets
disposed of in the ordinary course of business).
5.4 Notices. Promptly, upon acquiring notice or giving notice, as the case
may be, or obtaining knowledge thereof, give written notice (with copies of any
such underlying notices) to Administrative Agent of:
5.4.1 Any litigation pending or, to the knowledge of any Portfolio
Entity, threatened against any Portfolio Entity and involving claims against any
Portfolio Entity or any Initial Project, Funded Subsequent Project, Turbine
assigned to an Initial Project (as set forth on Exhibit G-3) or Funded Turbine
in excess of $2,000,000 in the aggregate per calendar year or involving any
injunctive, declaratory or other equitable relief, such notice to include, if
requested by Administrative Agent, copies of all papers filed in such litigation
and to be given monthly if any such papers have been filed since the last notice
given;
5.4.2 Any dispute or disputes which may exist between any Portfolio
Entity and any Governmental Authority and which involve (a) claims against any
Portfolio Entity which exceed $2,000,000 individually or $10,000,000 in the
aggregate per calendar year, (b) injunctive or declaratory relief, (c)
revocation, modification, failure to renew or the like of any Applicable Permit
or Applicable Third Party Permit relating to an Initial Project or a Funded
Subsequent Project or imposition of additional material conditions with respect
thereto, or (d) any Liens relating to an Initial Project, a Funded Subsequent
Project or a Turbine for taxes due but not paid;
5.4.3 Any Event of Default, Inchoate Default, Non-Fundamental Project
Default or Non-Fundamental Project Inchoate Default;
5.4.4 Any casualty, damage or loss, whether or not insured, through
fire, theft, other hazard or casualty, or any act or omission of any Portfolio
Entity, its employees, agents, contractors, consultants or representatives, or
of any other Person if such casualty, damage or loss affects any Portfolio
Entity or any Initial Project, Funded Subsequent Project, Turbine assigned to an
Initial Project (as set forth on Exhibit G-3) or Funded Turbine, in excess of
$500,000 for any one casualty or loss or $5,000,000 in the aggregate in any
policy period;
5.4.5 Any cancellation or material change in the terms, coverage or
amounts of any insurance described in Exhibit K;
5.4.6 Any matter which has had, or, in any Portfolio Entity's
reasonable judgment, could reasonably be expected to have, a Material Adverse
Effect on Borrower or any Initial Project or Funded Subsequent Project,
including any PUC or FERC proceedings affecting any Initial Project or Funded
Subsequent Project which if adversely determined, reasonably could be expected
to have a Material Adverse Effect on such Project;
5.4.7 Any act by any Portfolio Entity to become a surety, guarantor,
endorser or accommodation endorser for a third party other than endorsement of
negotiable instruments for collection purposes;
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5.4.8 Any intentional withholding of compensation to any Contractor,
any Turbine Purchase Contractor, any engineer or Operator or any other Person
under any Major Construction Contract, any O&M Agreement, any Power Marketing
Agreement or any other construction or operating contract relating to any
Initial Project, Funded Subsequent Project, Turbine assigned to an Initial
Project (as set forth on Exhibit G-3) or Funded Turbine, other than retention
provided by the express terms of any such contracts;
5.4.9 Any termination or material default or notice thereof (including
any notice of default) under any Project Document relating to an Initial Project
or a Funded Subsequent Project or under any Turbine Purchase Contract relating
to a Turbine assigned to an Initial Project (as set forth on Exhibit G-3) or a
Funded Turbine;
5.4.10 Any events of force majeure or change orders under any Major
Construction Contract or other Project Documents relating to any Initial Project
or Funded Subsequent Project or under any Turbine Purchase Contract relating to
any Turbine assigned to an Initial Project (as set forth on Exhibit G-3) or
Funded Turbine and, to the extent requested by Administrative Agent, copies of
invoices or statements which are reasonably available to any Portfolio Entity
under such Construction Contract, other Construction Contract or Turbine
Purchase Contract, certified by an authorized representative of Borrower,
together with a copy of any supporting documentation, schedule, data or
affidavit delivered under such Construction Contract, other Construction
Contract or Turbine Purchase Contract, other Project Document or Turbine
Purchase Contract;
5.4.11 No later than the date upon which the Independent Engineer is
entitled to receive notice pursuant to any Major Construction Contract of the
proposed conduct of the initial Performance Tests under such Construction
Contract, promptly prior to the proposed conduct of any subsequent Performance
Tests pursuant to each such Construction Contract and promptly prior to the
conduct of any performance tests required under any other Project Document,
written notice of such proposed test;
5.4.12 Any (a) fact, circumstance, condition or occurrence at, on, or
arising from, any Site, Improvements, or other Mortgaged Property that results
in material noncompliance with any Hazardous Substance Law or any Release of
Hazardous Substances on or from such Site, Improvements or other Mortgaged
Property that has resulted or could reasonably be expected to result in personal
injury or material property damage or to have a Material Adverse Effect on a
Project, and (b) pending or, to any Portfolio Entity's knowledge, threatened,
Environmental Claim against any Portfolio Entity or to any Portfolio Entity's
knowledge any of its Affiliates, contractors, lessees or any other Persons,
arising in connection with their occupying or conducting operations on or at any
Project or any related Site, Improvements or other Mortgaged Property;
5.4.13 Promptly, but in no event later than 30 days if consent of
Administrative Agent or the Banks is required, and 15 days otherwise, prior to
the time any Person will become an equity holder of any Portfolio Entity or the
occurrence of any other change in or transfer of ownership interests in any
Portfolio Entity, any Project or any Turbine notice thereof, which notice shall
identify such Person and such Person's interest in the relevant Portfolio
Entity, Project or Turbine and shall describe, in reasonable detail, such other
change or transfer;
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5.4.14 Any material notices delivered to or received from, the parties
to the Project Documents relating to an Initial Project or a Funded Subsequent
Project or the parties to a Turbine Purchase Contract relating to a Turbine
assigned to an Initial Project (as set forth on Exhibit G-3) or a Funded
Turbine;
5.4.15 Initiation of any condemnation proceedings involving any Initial
Project or Funded Subsequent Project or the related Site or material portion
thereof;
5.4.16 Promptly, but in no event later than 15 days after any Portfolio
Entity has knowledge of the execution and delivery thereof, a copy of each
Additional Project Document relating to an Initial Project or a Funded
Subsequent Project; and
5.4.17 Promptly, but in no event later than 30 days after the receipt
thereof by any Portfolio Entity, copies of (a) all Applicable Permits relating
to an Initial Project or a Funded Subsequent Project obtained by any Portfolio
Entity or the Member after the Closing Date, (b) any amendment, supplement or
other modification to any Applicable Permits relating to an Initial Project or a
Funded Subsequent Project received by any Portfolio Entity after the Closing
Date and (c) all material notices relating to any Initial Project or Funded
Subsequent Project received by any Portfolio Entity from any Governmental
Authority.
5.5 Financial Statements.
5.5.1 Unless Administrative Agent otherwise consents, deliver or cause
to be delivered to Administrative Agent, in form and detail reasonably
satisfactory to Administrative Agent:
(a) As soon as practicable and in any event within 45 days
after the end of the first, second and third quarterly accounting periods of its
fiscal year (commencing with the quarter ending September 30, 2000), an
unaudited balance sheet of the Portfolio Entities, the Member, Calpine and each
other Affiliated Major Project Participant as of the last day of such quarterly
period and the related statements of income, cash flows, and partners' capital
(where applicable) for such quarterly period and (in the case of second and
third quarterly periods) for the portion of the fiscal year ending with the last
day of such quarterly period, setting forth in each case in comparative form
corresponding unaudited figures from the preceding fiscal year (such requirement
may be satisfied with respect to any party by delivery of the appropriate Form
10-Q filed with the Securities and Exchange Commission); and
(b) As soon as available but no later than 120 days after the
close of each applicable fiscal year, audited (or, if not available with respect
to Persons who are not Calpine Affiliates, unaudited) financial statements of
the Portfolio Entities, the Member, Calpine, each other Affiliated Major Project
Participant, each Major Fuel Supplier and each Major Power Purchaser relating to
an Initial Project or a Funded Subsequent Project, including a statement of
equity, a balance sheet as of the close of such year, an income and expense
statement, reconciliation of capital accounts and a statement of sources and
uses of funds, all prepared in accordance with GAAP and in the case of audited
financial statements, certified by an independent certified public accountant
selected by the Person whose financial statements are being prepared and
satisfactory to Administrative Agent. Such certificate for the Portfolio
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Entities, the Member, Calpine and each Affiliated Major Project Participant
shall not be qualified or limited because of restricted or limited examination
by such accountant of any material portion of the records of the applicable
Person. Such requirement may be satisfied with respect to any party by delivery
of the appropriate Form 10-K filed with the Securities and Exchange Commission.
(c) Each time the financial statements are delivered under
Section 5.5.1(a) above for the Portfolio Entities, the Member, Calpine and each
Affiliated Major Project Participant, deliver or cause to be delivered, along
with such financial statements, a certificate signed by a Responsible Officer of
such Person, certifying that such officer has made or caused to be made a review
of the transactions and financial condition of such Person during the relevant
fiscal period and that such review has not, to the best of such Responsible
Officer's knowledge, disclosed the existence of any event or condition which
constitutes an Event of Default or Inchoate Default (or, in the case of the
Portfolio Entities, a Non-Fundamental Project Default or Non-Fundamental Project
Inchoate Default), or if any such event or condition existed or exists, the
nature thereof and the corrective actions that such Person has taken or proposes
to take with respect thereto, and also certifying that such Person is in
compliance with all applicable material provisions of each Credit Document to
which such Person is a party or, if such is not the case, stating the nature of
such non-compliance and the corrective actions which such Person has taken or
proposes to take with respect thereto.
5.6 Books, Records, Access. Maintain or cause to be maintained adequate
books, accounts and records and prepare all financial statements required
hereunder in accordance with GAAP and in compliance with the regulations of any
Governmental Authority having jurisdiction thereof, and, subject to requirements
of Governmental Rules and safety requirements, after pre-scheduling with the
relevant Operator, permit employees or agents of Administrative Agent and
Independent Engineer at any reasonable times and upon reasonable prior notice to
inspect all of its properties, including the Sites, to examine or audit all of
its books, accounts and records and make copies and memoranda thereof and to
witness all Performance Tests.
5.7 Compliance with Laws, Instruments, Etc. Promptly comply, or cause
compliance, in all material respects, with all Legal Requirements relating to
the Portfolio Entities, the Initial Projects or the Subsequent Projects,
including Legal Requirements relating to pollution control, environmental
protection, equal employment opportunity or employee benefit plans, ERISA Plans
and employee safety, with respect to the Portfolio Entities and each such
Project or Turbine, and make such alterations to such Projects and Sites and
Turbines as may be required for such compliance.
5.8 Reports. With respect to each Initial Project and Funded Subsequent
Project and, in the case of Sections 5.8.6, 5.8.7 and 5.8.8, with respect to
each Turbine assigned to an Initial Project (as set forth on Exhibit G-3) and
Funded Turbine:
5.8.1 Deliver to Administrative Agent on the last Banking Day of each
month (if any) prior to Final Completion of such Project in which no Loan is
made to such Project a certificate of an authorized officer of Borrower as to
the matters required by Section 3.4.3 in respect of such Project, substantially
in the form of the Construction Drawdown Certificate.
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5.8.2 Until Final Completion of such Project, deliver to Administrative
Agent at such times as Administrative Agent may reasonably request (but not more
frequently than monthly) a report describing in reasonable detail the progress
of the construction of such Project since the last prior report hereunder.
5.8.3 Within 30 days following the completion of the major foundations
for such Project, provide to Administrative Agent a foundation survey showing
(a) the exact location and dimensions of such foundations, (b) that such
foundations comply with all applicable building and zoning codes and set-back
lines, and (c) that such foundations do not encroach or interfere with existing
property rights.
5.8.4 From and after the commercial operation date of such Project,
deliver to Administrative Agent within 30 days of the end of each month, a
summary operating report with respect to such Project which shall include, with
respect to the month most recently ended, (a) a monthly and year-to-date
numerical and narrative assessment of (i) such Project's compliance with each
material category in the Annual Operating Budget for such Project, (ii)
electrical production and delivery, (iii) fuel deliveries and use, including
heat rate, (iv) plant and unit availability, including trips and scheduled and
unscheduled outages, (v) cash receipts and disbursements and cash balances,
including distributions to the Member, debt service payments and balances in the
Accounts, (vi) maintenance activity, (vii) staffing changes with respect to
project or construction managers, (viii) casualty losses of value in excess of
$500,000, (ix) replacement of equipment of value in excess of $500,000 and (x)
material disputes with contractors, materialmen, suppliers or others and any
related claims against Borrower; (b) statistical data and reasonably detailed
commentary thereon; and (c) a comparison of year-to-date figures to
corresponding figures provided in the prior year.
5.8.5 Deliver to Administrative Agent within 60 days of the end of each
year after the Closing Date, a report setting forth a narrative summary
describing and assessing such Project's compliance with all Applicable Permits
and Legal Requirements.
5.8.6 Provide to Administrative Agent promptly upon request such
reports, statements, lists of property, accounts, budgets, forecasts and other
information concerning such Project or Turbine and, to the extent reasonably
available, the Major Project Participants or Turbine Purchase Contractors, as
the case may be, and at such times as Administrative Agent shall reasonably
require, including such reports and information as are reasonably required by
the Independent Consultants.
5.8.7 Provide to Administrative Agent promptly upon receipt by any
Portfolio Entity any material notices, information or reports provided by (a)
Power Marketer under any Power Marketing Project Document, (b) any Fuel Supplier
under a Gas Contract, (c) any other purchaser under a Power Purchase Document or
(d) any Turbine Purchase Contractor under a Turbine Purchase Contract.
5.8.8 Within 30 days of the end of each fiscal year after the Closing
Date, deliver to Administrative Agent a certificate, substantially in the Form
of Exhibit I hereto, and otherwise in form and substance satisfactory to
Administrative Agent in consultation with the
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Insurance Consultant, certifying that the insurance requirements of Exhibit K
have been implemented and are being complied with in all material respects.
5.9 Existence, Conduct of Business, Properties, Etc. Except as otherwise
expressly permitted under this Agreement, (a) in the case of Borrower, maintain
and preserve its existence as a limited liability company formed under the laws
of the state of Delaware and all material rights, privileges and franchises
necessary or desirable in normal conduct of its business, (b) in the case of
each other Portfolio Entity, maintain and preserve its existence as a
corporation, limited partnership or limited liability company, as the case may
be, formed under the laws of the state of Delaware or, in the case of Freestone
Power Generation, LP or Calpine Power Equipment LP, Texas and all material
rights, privileges and franchises necessary or desirable in normal conduct of
its business, (c) perform (to the extent not excused by force majeure events or
the nonperformance of another party and not subject to a good faith dispute) all
of its contractual obligations under the Project Documents or Turbine Purchase
Contracts, as the case may be, to which it is party or by which it is bound, (d)
maintain all necessary Permits and licenses, including all Applicable Permits,
with respect to its business and each Initial Project and Funded Subsequent
Project and cause all Major Project Participants to maintain all Applicable
Third-Party Permits with respect to each such Project, (e) at or before the time
that any Permit becomes an Applicable Permit with respect to any Initial Project
or Funded Subsequent Project, obtain such Permit, (f) at or before the time that
any Permit required to be obtained by a Major Project Participant becomes an
Applicable Third-Party Permit with respect to any Initial Project or Funded
Subsequent Project, cause the relevant third party to obtain such Permit, (g)
engage only in the business contemplated by the Operative Documents and (h)
perform all of its contractual obligations under the Credit Documents.
5.10 Four-Quarter Portfolio Interest Coverage Ratio; Maximum Debt to
Capitalization Ratio.
(a) As promptly as practicable, but in no event later than 45
days after (a) the last Banking Day of each calendar quarter, calculate and
deliver to Administrative Agent the Four-Quarter Portfolio Interest Coverage
Ratio. Administrative Agent shall notify Borrower in writing of any suggested
corrections, changes or adjustments which should be made to such Four-Quarter
Portfolio Interest Coverage Ratio calculations within 20 days after receipt.
Borrower shall incorporate all such corrections, changes or adjustment as
Administrative Agent reasonably deems appropriate.
(b) (i) As promptly as practicable, but in no event later than
two Banking Days after delivery by Borrower of the financial statements of the
Portfolio Entities required to be delivered pursuant to Section 5.5.1 and at
such other times as required under this Agreement, calculate and deliver to
Administrative Agent the Debt to Capitalization Ratio based on the financial
statements so delivered. Administrative Agent shall notify Borrower in writing
of any suggested corrections, changes or adjustments which should be made to
such ratio calculations within five days after receipt. Borrower shall
incorporate all such corrections, changes or adjustments as Administrative Agent
reasonably deems appropriate.
(ii) Borrower shall maintain, as of the end of each
calendar quarter (after giving effect to any Construction Credit Event and/or
the Turbine Purchase Credit
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Event as of the end of each such calendar quarter), a Debt to Capitalization
Ratio of no more than the Maximum Debt to Capitalization Ratio.
(c) For purposes of this Agreement, Borrower shall calculate
the Four-Quarter Portfolio Interest Coverage Ratio and the Debt to
Capitalization Ratio without taking into account the EBITDA produced by, or the
Contributions with respect to, a Project (i) where a Non-Fundamental Project
Default or Non-Fundamental Project Inchoate Default shall have occurred and be
continuing with respect to such Project, (ii) where, in the case of Projects
Five Through Twelve, a condition precedent deferred in accordance with Section
3.13 shall not have been satisfied or waived by such Project's scheduled
Completion Date (as set forth in such Project's Project Schedule) or (iii) that
is an Unfunded Project.
5.11 Indemnification.
5.11.1 Indemnify, defend and hold harmless Administrative Agent and
each Bank, and in their capacities as such, their respective officers,
directors, shareholders, controlling persons, employees, agents and servants
(collectively, the "Indemnitees") from and against and reimburse the Indemnitees
for:
(a) any and all claims, obligations, liabilities, losses,
damages, injuries (to person, property, or natural resources), penalties, stamp
or other similar taxes, actions, suits, judgments, costs and expenses (including
reasonable attorney's fees) of whatever kind or nature, whether or not well
founded, meritorious or unmeritorious, demanded, asserted or claimed against any
such Indemnitee (collectively, "Subject Claims") in any way relating to, or
arising out of or in connection with this Agreement, the other Operative
Documents, any Project or any Turbine, except for claims by a Portfolio Entity
against an Indemnitee;
(b) any and all Subject Claims arising in connection with the
release or presence of any Hazardous Substances at any Project, whether
foreseeable or unforeseeable, including all costs of removal and disposal of
such Hazardous Substances, all reasonable costs required to be incurred in (i)
determining whether any Project is in compliance and (ii) causing each Project
to be in compliance, with all applicable Legal Requirements, all reasonable
costs associated with claims for damages to persons or property, and reasonable
attorneys' and consultants' fees and court costs; and
(c) any and all Subject Claims in any way relating to, or
arising out of or in connection with any claims, suits, liabilities against any
Portfolio Entity, the Member, Calpine or any of their Affiliates.
5.11.2 The foregoing indemnities shall not apply with respect to an
Indemnitee, to the extent arising as a result of the gross negligence or willful
misconduct of such Indemnitee, but shall continue to apply to other Indemnitees.
5.11.3 The provisions of this Section 5.11 shall survive foreclosure of
the Collateral Documents and satisfaction or discharge of the Portfolio Entities
obligations hereunder and under the other Credit Documents, and shall be in
addition to any other rights and remedies of the Banks.
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5.11.4 In case any action, suit or proceeding shall be brought against
any Indemnitee, such Indemnitee shall notify Borrower of the commencement
thereof, and Borrower shall be entitled, at its expense, acting through counsel
reasonably acceptable to such Indemnitee, to participate in, and, to the extent
that Borrower desires, to assume and control the defense thereof. Such
Indemnitee shall be entitled, at its expense, to participate in any action, suit
or proceeding the defense of which has been assumed by Borrower. Notwithstanding
the foregoing, Borrower shall not be entitled to assume and control the defenses
of any such action, suit or proceedings if and to the extent that, in the
reasonable opinion of such Indemnitee and its counsel, such action, suit or
proceeding involves the potential imposition of criminal liability upon such
Indemnitee or a conflict of interest between such Indemnitee and Borrower or
between such Indemnitee and another Indemnitee (unless such conflict of interest
is waived in writing by the affected Indemnitees), and in such event (other than
with respect to disputes between such Indemnitee and another Indemnitee)
Borrower shall pay the reasonable expenses of such Indemnitee in such defense.
5.11.5 Borrower shall report to such Indemnitee on the status of such
action, suit or proceeding as material developments shall occur and from time to
time as requested by such Indemnitee (but not more frequently than every 60
days). Borrower shall deliver to such Indemnitee a copy of each document filed
or served on any party in such action, suit or proceeding, and each material
document which Borrower possesses relating to such action, suit or proceeding.
5.11.6 (a) Notwithstanding Borrower's rights hereunder to control
certain actions, suits or proceedings, if any Indemnitee reasonably determines
that failure to compromise or settle any Subject Claim made against such
Indemnitee is reasonably likely to have an imminent and material adverse effect
on such Indemnitee, such Indemnitee shall be entitled (and Borrower shall cause
other relevant Portfolio Entity to agree to the same) to compromise or settle
such Subject Claim.
(b) Notwithstanding Borrower's rights hereunder to control
certain actions, suits or proceedings, if the Required Banks reasonably
determine that failure to compromise or settle any Subject Claim made against
such Indemnitee is reasonably likely to have an imminent and material adverse
effect on Borrower or any Project, such Indemnitee or the Required Banks, as the
case may be, shall provide Borrower with written notice of a proposed compromise
or settlement of such claim specifying in detail the nature and amount of such
proposed settlement or compromise. Borrower (and any other relevant Portfolio
Entity) shall be deemed to have approved such proposed compromise or settlement
unless, within 30 days after the date Borrower receives such notice of intended
compromise or settlement, Borrower provides such Indemnitee or the Required
Banks, as the case may be, with (i) a written legal analysis from counsel
reasonably acceptable to such Indemnitee or Required Banks, as the case may be,
reasonably concluding that, based on the magnitude of the Subject Claim, the
legal basis for such Subject Claim, and/or the cost of defending such Subject
Claim, the amount of such proposed settlement or compromise is not within a
reasonable range of settlements or compromises for such Subject Claim, and
indicating, based on such factors, such counsel's view as to the appropriate
amount of a reasonable settlement or compromise for such Subject Claim (the
"Settlement Amount"). If the Indemnitee or the Required Banks, as the case may
be, receives such legal analysis required by this Section within such 30-day
period, the Indemnitee
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or the Required Banks, as the case may be, may elect to settle or compromise
such Subject Claim and Borrower shall be responsible for the payment of all
amounts of such compromise or settlement up to 125% of the Settlement Amount,
such Indemnitee shall be responsible for payment of all amounts of such
compromise or settlement in excess of such 125% limit and such compromise or
settlement shall be binding upon Borrower. If Borrower does not provide such
legal analysis within such period, or if such legal analysis is not reasonable,
in the reasonable determination of such Indemnitee or the Required Banks, as the
case may be, such Indemnitee may settle or compromise such Subject Claim (and
Borrower shall cause any other relevant Portfolio Entity to agree to the same)
and shall be fully indemnified by Borrower therefor. Such Indemnitee or the
Required Banks, as the case may be, shall not otherwise settle or compromise any
such Subject Claim other than at its own expense.
5.11.7 Upon payment of any Subject Claim by Borrower pursuant to this
Section 5.11 or other similar indemnity provisions contained herein to or on
behalf of an Indemnitee, Borrower, without any further action, shall be
subrogated to any and all claims that such Indemnitee may have relating thereto,
and such Indemnitee shall cooperate with Borrower and give such further
assurances as are necessary or advisable to enable Borrower vigorously to pursue
such claims.
5.11.8 Any amounts payable by Borrower pursuant to this Section 5.11
shall be regularly payable within 30 days after Borrower receives an invoice for
such amounts from any applicable Indemnitee, and if not paid within such 30-day
period shall bear interest at the Default Rate.
5.11.9 Notwithstanding anything to the contrary set forth herein,
Borrower shall not, in connection with any one legal proceeding or claim, or
separate but related proceedings or claims arising out of the same general
allegations or circumstances, in which the interests of the Indemnitees do not
materially differ, be liable to the Indemnitees (or any of them) under any of
the provisions set forth in this Section 5.11 for the fees and expenses of more
than one separate firm of attorneys (which firm shall be selected by the
affected Indemnitees, or upon failure to so select, by Administrative Agent).
5.11.10 If, for any reason whatsoever, the indemnification provided
under this Section 5.11 is unavailable to any Indemnitee or is insufficient to
hold it harmless to the extent provided in this Section 5.11, then provided such
payment is not prohibited by or contrary to any applicable Governmental Rule,
Legal Requirement or public policy, Borrower shall contribute to the amount paid
or payable by such Indemnitee as a result of the Subject Claim in such
proportion as is appropriate to reflect the relative economic interests of
Borrower and its Affiliates on the one hand, and such Indemnitee on the other
hand, in the matters contemplated by this Agreement as well as the relative
fault of Borrower (and its Affiliates) and such Indemnitee with respect to such
Subject Claim, and any other relevant equitable considerations.
5.12 Qualifying Facility/Exempt Wholesale Generator. With respect to each
Project, take or cause to be taken all necessary or appropriate actions (a) so
that such Project will, from and after commercial operations of such Project,
either be a Qualifying Facility or an Eligible Facility until all Obligations
due the Banks under the Credit Documents have been paid in full unless such
Project's failure to be a Qualifying Facility or Eligible Facility, as the case
may be,
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could not reasonably be expected to have a Material Adverse Effect on such
Project, and (b) except to the extent that the FPA is applicable solely by
reason of the relevant Project Owner being the owner of a Qualifying Facility or
an Exempt Wholesale Generator, to maintain such Project Owner's and such
Project's exemptions from regulation under the FPA (unless failure to so
maintain such exemptions could not reasonably be expected to have a Material
Adverse Effect on Borrower or such Project) and PUHCA (except regulations
specifically applicable to an Exempt Wholesale Generator or a Qualifying
Facility) or, if Calpine or its successor or Borrower becomes a registered
holding company under PUHCA, as a subsidiary of such registered holding company.
5.13 Construction of Each Project. With respect to each Initial Project and
Funded Subsequent Project, cause such Project to be constructed and equipped
substantially in accordance with the Plans and Specifications, Construction
Contracts, other Project Documents, Project Budget and the Project Schedule for
such Project as the same may be amended from time to time pursuant to Section
6.13.
5.14 Completion. With respect to each Initial Project and Funded Subsequent
Project, achieve Completion and Final Completion of such Project in a timely and
diligent manner in accordance with the Project Schedule, Project Budget,
Construction Contracts and Plans and Specifications of such Project as the same
may be extended and, in the case of Completion, in no event later than the
guaranteed completion date set therefor in such Project's Project Schedule
(which shall be extended as the result of the occurrence of events of force
majeure for additional periods up to an aggregate of 180 days).
5.15 Operation of Projects and Annual Operating Budget. With respect to
each Initial Project and Funded Subsequent Project:
5.15.1 (a) Keep such Project, after Completion thereof, or cause the
same to be kept, in good operating condition consistent with Prudent Utility
Practices, all Applicable Permits (and, if applicable, Applicable Third Party
Permits), Legal Requirements and the Operative Documents, and make or cause to
be made all repairs (structural and non-structural, extraordinary or ordinary)
necessary to keep such Project in such condition; and (b) operate such Project,
after Completion thereof, or cause the same to be operated, in a manner
consistent with Prudent Utility Practices and in compliance with the terms of
the Power Purchase Documents so as to assure, to the extent reasonably possible,
the maximum generation of net revenue for such Project consistent with the Power
Purchase Documents.
5.15.2 On or before 60 days prior to the first day of the month in
which Completion of such Project occurs or is anticipated to occur and 60 days
prior to the first day of each calendar year thereafter, submit to
Administrative Agent a draft operating plan and a budget, detailed by month for
such Project, of anticipated revenues and anticipated expenditures, such budget
to include debt service (if applicable), proposed distributions, maintenance,
repair and operation expenses (including reasonable allowance for
contingencies), Major Maintenance, reserves and all other anticipated O&M Costs
for such Project for the remainder of the calendar year for the first such plan
and budget and for the ensuing calendar year for each other such plan and budget
and, in the case of Major Maintenance in accordance with Section 5.15.3, to the
conclusion of the second full calendar year thereafter (each such annual
operating plan and
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budget with respect to each Project and for all the Projects as a whole, an
"Annual Operating Budget"). Each Annual Operating Budget shall be subject to the
reasonable approval of Administrative Agent and the Independent Engineer.
Failure by Administrative Agent to approve or disapprove such draft Annual
Operating Budget within 30 days after receipt thereof shall be deemed to be an
approval by Administrative Agent of such draft. Borrower shall incorporate
Administrative Agent's suggestions into a final Annual Operating Budget, which,
subject to the provisions of the last sentence of this Section 5.15.2, shall be
prepared no less than 30 days in advance of each fiscal year. The O&M Costs in
each Annual Operating Budget which are subject to escalation limitations in the
Project Documents shall not, absent extraordinary circumstances, be increased by
more than the amounts provided in such Project Documents. Borrower shall
continue to operate and maintain such Project, or cause such Project to be
operated and maintained, within amounts not to exceed 115% of the aggregate
amounts set forth in the applicable Annual Operating Budget; provided, however,
the costs for fuel shall not be limited by the Annual Operating Budget. Pending
approval of any Annual Operating Budget in accordance with the terms of this
Section 5.15.2, Borrower shall continue to operate and maintain such Project, or
cause such Project to be operated and maintained, within the Annual Operating
Budget for such Project then in effect; provided that the amounts specified
therein shall be increased by the amounts specified in the Project Documents.
5.15.3 Replace the Operator of such Project if such Operator is not
operating such Project in accordance with the provisions hereof or the
applicable O&M Agreement, Power Purchase Documents or any other agreement or
instrument under which the relevant Project Owner holds title, an easement or a
leasehold to the applicable Site, the Easements or the Collateral, and such
failure could reasonably be expected to have a Material Adverse Effect on such
Project, upon receipt of notice from Administrative Agent (after consultation
with Borrower) to the effect that, in the opinion of the Required Banks and the
Independent Engineer, said Operator has failed to perform any material
obligations set forth above; provided, however, that the Operator may have 30
days from Borrower's receipt of notice to cure said failure (or to establish to
the satisfaction of the Required Banks that a failure does not exist); provided,
further, that if such failure cannot be corrected within such 30 days, the
Required Banks will not unreasonably withhold their consent to an extension of
such time if corrective action is promptly instituted by such Operator within
the 30-day period and thereafter diligently pursued until the failure is
corrected and such extension shall not have a Material Adverse Effect on such
Project.
5.16 Preservation of Rights; Further Assurances.
5.16.1 Preserve, protect and defend the rights of the Portfolio
Entities under each material Project Document relating to the Initial Projects
and the Funded Subsequent Projects and under each Turbine Purchase Contract
relating to the Turbines assigned to Initial Projects (as set forth on Exhibit
G-3) and the Funded Turbines, including prosecution of suits to enforce any
rights of the Portfolio Entities thereunder and enforcement of any claims with
respect thereto; provided, however, that upon the occurrence and during the
continuance of an Event of Default if Administrative Agent requests that certain
actions be taken and the Portfolio Entities fail to take the requested actions
within five Banking Days and such failure reasonably could be expected to have a
Material Adverse Effect on Borrower, any such Project or any such Turbine,
Administrative Agent may enforce in its own name or in the relevant Portfolio
Entity's name, such rights of any Portfolio Entity.
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5.16.2 From time to time, execute, acknowledge, record, register,
deliver and/or file all such notices, statements, instruments and other
documents (including any memorandum of lease or other agreement, financing
statement, continuation statement, certificate of title or estoppel
certificate), relating to the Loans stating the interest and charges then due
and any known defaults, and take such other steps as may be necessary or
advisable to render fully valid and enforceable under all applicable laws the
rights, liens and priorities of the Banks with respect to all Collateral and
other security from time to time furnished under this Agreement and the other
Credit Documents or intended to be so furnished, including (x) granting Liens,
subject to no other Liens other than Permitted Liens, in favor of Administrative
Agent, in any Project or portion thereof not part of the Collateral and (y)
causing its partners, members or shareholders, as the case may be, to grant a
first priority Lien to Administrative Agent in all the ownership interests in a
Portfolio Entity, in each case to the extent permitted, without any waivers, and
consistently with the characterization of the Debt incurred and Liens granted
hereunder and under the other Credit Documents, under the Calpine Indenture, in
each case in such form and at such times as shall be satisfactory to
Administrative Agent, and pay all fees and expenses (including reasonable
attorneys' fees) incident to compliance with this Section 5.16.2.
5.16.3 Subject to Section 6.23, if a Portfolio Entity shall at any time
acquire any real property or leasehold or other interest in real property
related to a Funded Project not covered by the Deeds of Trust, promptly upon
such acquisition (or on the Closing Date if such acquisition occurred prior
thereto) in furtherance of the Lien on the Project and related Collateral
granted on the respective Funding Date execute, deliver and record a supplement
to the applicable Deed of Trust or, if necessary, execute, deliver and record a
new Deed of Trust, satisfactory in form and substance to Administrative Agent,
subjecting the real property or leasehold or other interests so acquired to a
lien and security interest in favor of Administrative Agent and the Banks,
subject only to Permitted Liens and other exceptions to title approved by
Administrative Agent, securing all of the relevant Portfolio Entity's
Obligations under the Credit Documents other than such Obligations relating to
Projects that have achieved Operation prior to the execution of such Deed of
Trust. If requested by Administrative Agent, Borrower shall obtain an
appropriate endorsement or supplement to the applicable Title Policy or procure
a new Title Policy insuring the Lien of the Banks in such additional property,
subject only to Permitted Liens and other exceptions to title approved by
Administrative Agent, and shall obtain subordination and nondisturbance
agreements from applicable third parties to the extent reasonably requested by
Administrative Agent.
5.16.4 Perform, upon the request of Administrative Agent, such
reasonable acts as may be necessary to carry out the intent of this Agreement
and the other Credit Documents.
5.16.5 Cause the Pledged Equity Interests to be "certificated
securities" as defined in Article 8 of the UCC and include in each appropriate
Portfolio Entity's constituent documents terms, in each case consistent with
Section 8-103(c) of the UCC, to the effect that the corresponding Pledged Equity
Interests are "securities" (as such term is defined in Article 8 of the UCC)
governed by Article 8 of the UCC.
5.17 Project Equity.
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5.17.1 (a) Make or cause to be made Contributions with respect to
Funded Projects in an amount equal to the Required Contribution Percentage of
the aggregate Project Costs in respect to which Borrower has requested Loans at
such time, such Contributions to be made at the time of each Borrowing and (b)
make or cause to be made Contributions with respect to Funded Projects in an
amount equal to any or all income taxes due or owing by Borrower and each other
Portfolio Entity within 10 days after such payment becoming due (all
Contributions pursuant to clauses (a) and (b) above, the "Base Equity").
Borrower may deposit some or all of the Base Equity with Administrative Agent as
provided in Section 3.10. In such event, Administrative Agent shall deposit the
Base Equity into the relevant Construction Sub-Accounts at Administrative
Agent's New York office pursuant to the Depositary Agreement. From time to time
following the deposits of such amounts, Borrower shall have the right to request
that Administrative Agent transfer amounts from the relevant Construction
Sub-Accounts to pay Costs upon the satisfaction of the requirements set forth in
Section 3.10(a).
5.17.2 At such time, if ever as the Available Construction Funds are
less than the remaining Project Costs to be incurred or paid to achieve Final
Completion of the Initial Projects and the Funded Subsequent Projects, then
promptly thereafter deposit or cause to be deposited with Administrative Agent,
Contributions in an amount equal to all such further Project Costs, such
Contributions to be made on or before the date such Project Costs are due to be
paid ("Additional Borrower Equity"). All such Additional Borrower Equity
proceeds shall be deposited in the relevant Construction Sub-Accounts
established pursuant to Section 7.1 hereof and applied, after satisfaction of
the requirements set forth in Section 3.10(a), to pay Project Costs.
5.17.3 Upon an acceleration of Loans pursuant to Section 8.2.5,
promptly make or cause to be made Contributions in an amount equal to (x) the
Committed Equity Funds that have not yet been contributed and that would have
otherwise been contributed with respect to all remaining Costs for Funded
Projects and (y) to the extent required by Section 6.4.2(i), an amount equal to
the aggregate remaining progress payments to be made for Funded Turbines at the
time of such acceleration.
5.18 Maintenance of Insurance. With respect to each Initial Project, Funded
Subsequent Project, Turbines assigned to Initial Projects (as set forth on
Exhibit G-3), without cost to the Banks, maintain or cause to be maintained on
its behalf in effect at all times the types of insurance required pursuant to
Exhibit K, in the amounts and on the terms and conditions specified therein,
with insurance companies rated "A-" or better, with a minimum size rating of
"IX," 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 Administrative
Agent.
5.19 Taxes and Other Government Charges. With respect to each Initial
Project, Funded Subsequent Project, and, to the extent required by the
applicable Turbine Purchase Contract, Turbine assigned to an Initial Project (as
set forth on Exhibit G-3) and Funded Turbine, pay, or cause to be paid, as and
when due and prior to delinquency, all taxes, assessments and governmental
charges of any kind that may at any time be lawfully assessed or levied against
or with respect to any Portfolio Entity, such Project or such Turbine, including
sales and use taxes
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and real estate taxes, all other charges incurred in the operation, maintenance,
use, occupancy and upkeep of such Project or such Turbine, other than utility
charges, and all assessments and charges lawfully made by any Governmental
Authority for public improvements that may be secured by a lien on such Project
or such Turbine. In furtherance of the foregoing, Borrower shall engage a
qualified Person or Persons to confirm each Portfolio Entity's compliance with
all tax laws and regulations and to implement any required programs and
procedures to ensure continued compliance with the same. The Portfolio Entities
may contest in good faith any such taxes, assessments and other charges and, in
such event, may permit the taxes, assessments or other charges so contested to
remain unpaid during any period, including appeals, when the Portfolio Entities
are in good faith contesting the same, so long as (a) reserves reasonably
satisfactory to Administrative Agent have been established in an amount
sufficient to pay any such taxes, assessments or other charges, accrued interest
thereon and potential penalties or other costs relating thereto, or other
adequate provision for the payment thereof shall have been made, (b) enforcement
of the contested tax, assessment or other charge is effectively stayed for the
entire duration of such contest, and (c) any tax, assessment or other charge
determined to be due, together with any interest or penalties thereon, is
immediately paid after resolution of such contest.
5.20 Event of Eminent Domain. With respect to each Initial Project and
Funded Subsequent Project, if an Event of Eminent Domain shall occur with
respect to any Collateral, (a) promptly upon discovery or receipt of notice of
any such occurrence, provide written notice of the same to Administrative Agent,
(b) diligently pursue all its rights to compensation against the relevant
Governmental Authority in respect of such Event of Eminent Domain, (c) not,
without the written consent of Administrative Agent and the Required Banks,
which consent shall not be unreasonably withheld, compromise or settle any claim
against such Governmental Authority, (d) pay or apply all Eminent Domain
Proceeds in accordance with Section 7.10. Borrower consents and shall cause each
other Portfolio Entity to consent to the participation of Administrative Agent
in any eminent domain proceedings, and Borrower shall from time to time deliver
to Administrative Agent all documents and instruments requested by it to permit
such participation.
5.21 Power Marketing Plan; Fuel Plan. With respect to each Funded Project,
comply in all material respects with the provisions of the Power Marketing Plan
and Fuel Plan delivered to and approved by the Technical Committee as
contemplated in Article 3.
5.22 Utility Charges. With respect to each Initial Project and Funded
Subsequent Project, pay, or cause to be paid, as and when due and prior to
delinquency, all utility charges of any kind that may at any time be lawfully
assessed or levied against or with respect to any Portfolio Entity or such
Project.
5.23 Revenue Payment to Borrower. Use good faith reasonable efforts to
include, or cause to be included, in each Major Project Document or Consent
related thereto entered into after the date hereof, provisions to the effect
that each counterparty will pay all Project Revenues or other payments,
disbursements or distributions due and owing to a Project Owner directly to
Borrower for application in accordance with this Agreement.
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5.24 Initial Project Deeds of Trust and Equipment Finance Company
Collateral Documents. Within 6 months after the first Funding Date for an
Initial Project (a) execute, deliver to Administrative Agent and record in the
appropriate locations the Deeds of Trust with respect to each Initial Project
(other than those previously executed, delivered to Administrative Agent and
recorded in accordance with Section 3.2.7) and (b)(i) execute and deliver to
Administrative Agent appropriate Collateral Documents with respect to the
Equipment Finance Companies and their Intermediate Parents with respect to the
Initial Projects, including Equipment Finance Company Security Agreements and
Pledge Agreements (Pledged Equity Interests) considered necessary by the
Technical Committee to ensure that all rights and assets of such Portfolio
Entities have been pledged to Administrative Agent and the Banks and (ii) take
all actions necessary to provide the Banks with a valid and perfected first
priority Lien on such Collateral, including without limitation, to the extent
necessary, the filing of UCC-1, UCC-2 or UCC-3 financing statements, as
applicable, with respect to such Collateral with the Secretary of State and/or
other appropriate filing office in the states where the corresponding Initial
Projects are located or the states in which such Portfolio Entities' have been
formed or where their principal places of business are located, as appropriate,
and the execution and delivery of the Portfolio Entity Notes and Pledged Equity
Interests pledged to Administrative Agent pursuant to the Collateral Documents
delivered pursuant to this Section 5.24(b) (in each case, to the extent not
previously executed and delivered to Administrative Agent).
5.25 Funded Projects.5.25.1 Cause 12 Projects to become Funded Projects.
5.25.2 In the case of a Substituted Initial Project, cause such
Substituted Initial Project to become a Funded Project (a) if such Substituted
Initial Project's substitution occurs prior to the second anniversary of the
Closing Date, no later than the second anniversary of the Closing Date and (b)
if such Substituted Initial Project's substitution occurs on or after the second
anniversary of the Closing Date, no later than six months after such
substitution; provided, in each case, such Substituted Initial Project's
satisfaction of the applicable conditions precedent to initial funding under
Section 3.2 shall be determined in the same manner as it was (or would have
been) for the Initial Project being replaced by such Substituted Initial
Project.
ARTICLE 6.
NEGATIVE COVENANTS
Borrower covenants and agrees that so long as this Agreement
is in effect, it will not, and will not allow any other Portfolio Entity to:
6.1 Contingent Liabilities. Except as provided in this Agreement or the
other Credit Documents, become liable as a surety, guarantor, accommodation
endorser or otherwise, for or upon the obligation of any other Person; provided,
however, that this Section 6.1 shall not be deemed to prohibit (a) the
acquisition of goods, supplies or merchandise in the normal course of business
or normal trade credit; (b) the endorsement of negotiable instruments received
in the normal course of its business; (c) contingent liabilities required under
any Applicable Permit or Operative Document; or (d) joint liabilities incurred
with respect to any partially owned Project or pursuant to a Joint Venture
Agreement.
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6.2 Limitations on Liens. Create, assume or suffer to exist any Lien,
securing a charge or obligation on any properties or assets attributable to the
Initial Contribution, Funded Project or Funded Turbine or on any related
Collateral, real or personal, whether now owned or hereafter acquired, except
Permitted Liens.
6.3 Indebtedness. Incur, create, assume or permit to exist any Debt except
Permitted Debt.
6.4 Sale or Lease of Assets.
6.4.1 Except as permitted in Section 3.13 and Section 6.4.2 below,
sell, lease, assign, transfer or otherwise dispose of assets, whether now owned
or hereafter acquired except (a) in the ordinary course of its business as
contemplated by the Operative Documents, (b) to the extent that such property is
worn out or no longer useful or usable in connection with the operation of a
relevant Project, and in each case at fair market value, or (c) in the case of a
transfer of 100% of the ownership interests in a Project Owner, a Turbine Owner
or an Equipment Finance Company party to an Equipment Lease with respect to a
Funded Project from a direct or indirect wholly-owned Subsidiary of Borrower to
Borrower or another direct or indirect wholly-owned Subsidiary of Borrower.
6.4.2 (a) In the event the Non-Affiliated Parent with respect to the
Project Owner of a Designated Project exercises its right to have a Designated
Project refinanced and/or to have Borrower or another applicable Portfolio
Entity transfer its interest in a Designated Project to another subsidiary of
Calpine (other than a Portfolio Entity), Borrower shall be permitted to have
such Designated Project (including the related Project Owner and Pledged Equity
Interests and any related assets) released from the Lien and obligations of the
Collateral Documents and to implement a transfer of such Designated Project
(whether pursuant to a refinancing or otherwise), notwithstanding the existence
of an Event of Default or an Inchoate Default, and the Banks shall consent to
such transfer and release, free and clear of the Liens imposed by the Collateral
Documents, on the conditions that (x) Borrower prepays the Loans (with amounts
other than amounts in any Account or otherwise constituting Collateral) in an
amount equal to the greater of (A) the amount necessary to cause Borrower's Debt
to Capitalization Ratio not to exceed the Applicable Debt to Capitalization
Ratio in effect immediately after such transfer and release of such Designated
Project and (B) the outstanding Loans attributable to such Project and (y) if
such Designated Project is the Delta Energy Center Project or another Initial
Project, Borrower identifies a Substituted Initial Project to replace such
Project (such Substituted Initial Project to satisfy the requirements of the
definition thereof) (in which case such Substituted Initial Project shall be
deemed an Initial Project and Appendixes G-1, G-2 and G-3, as appropriate, shall
be amended to reflect the foregoing and such Substituted Initial Project shall
thereafter be funded with Construction Loans in accordance with Section 5.25.2).
Upon satisfaction of the foregoing conditions, Administrative Agent shall
execute and deliver to Borrower such documents and instruments, including UCC-3
termination statements and deeds of reconveyance, and shall return, cancel and
terminate any applicable Portfolio Entity Note and Project Owner Guaranty and
shall return all related Pledged Equity Interests free and clear of the Liens
imposed by the Collateral Documents, all as may be reasonably necessary to
release the Liens granted to the Banks in such Project and related
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Portfolio Entities, as the case may be (including the Lien on cash flows from
such Project), and to permit such release and transfer of ownership.
(b) In the event that the Non-Affiliated Parent with respect
to a Designated Project exercises its right to restructure the ownership
interests in such Designated Project into direct undivided ownership interests
(provided, after such restructuring, (x) such Non-Affiliated Parent owns no more
than a 50% direct undivided ownership interest in such Project and (y) the
remaining direct undivided ownership interest in such Project is held by a
Portfolio Entity that is directly or indirectly wholly-owned by Borrower), then
the relevant Portfolio Entity shall, notwithstanding the existence of an Event
of Default or an Inchoate Default, be permitted to implement such restructuring
and the Banks shall consent to such restructuring on the conditions that:
(i) The relevant Portfolio Entity and such
Non-Affiliated Parent enter into a Joint Venture Agreement relating to the joint
ownership and joint operation of such Project, and Borrower delivers or causes
to be delivered documents and instruments similar to those contemplated for
partially owned Projects similar to such Project pursuant to Section 3.3 as will
permit the Banks, to the greatest extent possible, to maintain a first priority
perfected Lien on the remaining Collateral owned by the relevant Project Owner
in respect of such Project (including without limitation any Joint Venture
Agreement described in this clause (i) above) and exercise remedies with respect
to such Collateral (with the benefit of lender protective provisions), including
without limitation, to the extent applicable (A) all necessary amendments to the
relevant Project/Turbine Owner Security Agreement (to include, without
limitation, the Joint Venture Agreement described in this clause (i) above in
the Collateral subject thereto), Deed of Trust, Pledge Agreements (Pledged
Equity Interests) and Project Owner Guaranty, (B) an agreement consenting to the
pledge by the relevant Portfolio Entity of its interest in the Joint Venture
Agreement as contemplated in this clause (i) above and an agreement by such
Non-Affiliated Parent recognizing the Banks as its counterparty in the event
that the Banks shall exercise remedies (including foreclosure) on the Collateral
with respect to such Project, and (C) any other customary lender protective
agreements or provisions, all of which documents and instruments shall be in
form and substance satisfactory to the Technical Committee; and
(ii) Borrower uses any and all amounts paid by such
Non-Affiliated Parent for such interest in such Project and, to the extent
necessary, makes additional Contributions to prepay the Loans in an amount equal
to the greater of (A) the amount necessary to cause Borrower's Debt to
Capitalization Ratio not to exceed the Applicable Debt to Capitalization Ratio
then in effect and (B) the net proceeds of such restructuring.
Upon the satisfaction of each of the foregoing conditions, as applicable,
Administrative Agent shall execute and deliver to Borrower, subject to the
provisions of clause (i) above, such documents and instruments, including UCC-3
termination statements, deeds of reconveyance, amendments of Portfolio Entity
Notes and amendments of the applicable Project Owner Guaranty, and shall return
any Pledged Equity Interests owned by such Non-Affiliated Parent, free and clear
of the Liens imposed by the Collateral Documents, all as reasonably may be
necessary to release its Lien on the portion of the Collateral (including
related cash flows) that is intended to be transferred in connection with such
restructuring.
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(c) In the event that (x) a Project Document for a Funded
Subsequent Project gives any party thereto (other than a Portfolio Entity) the
unilateral right to acquire an undivided direct ownership interest in the
relevant Project (but not more than a 50% undivided direct ownership interest)
and (y) such party exercises such right, then the relevant Portfolio Entity
shall be permitted to implement such sale to the extent required under the
relevant Project Document and the Banks shall consent to the acquisition of such
Project or interest therein on the conditions that:
(i) The relevant Portfolio Entity and such third party
enter into a Joint Venture Agreement relating to the joint ownership and joint
operation of such Project, and Borrower delivers or causes to be delivered
documents and instruments similar to those contemplated for partially owned
Projects similar to such Project pursuant to Section 3.3 as will permit the
Banks, to the greatest extent possible pursuant to the terms of the purchase
option, to maintain a first priority perfected Lien on the remaining Collateral
owned by the relevant Project Owner in respect of such Project (including
without limitation the Joint Venture Agreement described in this clause (i)
above) and exercise remedies with respect to such Collateral (with the benefit
of lender protective provisions), including without limitation, to the extent
applicable (A) all necessary amendments to the relevant Project/Turbine Owner
Security Agreement (to include, without limitation, the Joint Venture Agreement
described in this clause (i) above in the Collateral subject thereto), Deed of
Trust, Pledge Agreements (Pledged Equity Interests) and Project Owner Guaranty,
(B) an agreement consenting to the pledge by the relevant Portfolio Entity of
its interest in the Joint Venture Agreement as contemplated in this clause (i)
above and an agreement by such third party recognizing the Banks as its
counterparty in the event that the Banks shall exercise remedies (including
foreclosure) on the Collateral with respect to such Project, and (C) any other
customary lender protective agreements or provisions, all of which documents and
instruments shall be in form and substance satisfactory to the Technical
Committee; and
(ii) Borrower uses the entire amount of the purchase
price paid by such Person for such interest in such Project and, to the extent
necessary, makes additional Contributions to prepay the Loans in an amount equal
to the greater of (A) the book value of the pro rata percentage of such Project
purchased by such Person calculated in accordance with GAAP and (B) the net
proceeds of such sale.
Upon the satisfaction of each of the foregoing conditions, as applicable,
Administrative Agent shall execute and deliver to Borrower, subject to the
provisions of clause (i) above, such documents and instruments, including UCC-3
termination statements, deeds of reconveyance, amendments of Portfolio Entity
Notes and amendments of the applicable Project Owner Guaranty, and shall return
related Pledged Equity Interests, all as reasonably may be necessary to release
its Lien on the portion of the Collateral (including related cash flows) that is
intended to be transferred in connection with such sale.
(d) [*]
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(e) In the event that (x) a Project Document for a Funded
Subsequent Project or a Substituted Initial Project gives any party thereto the
unilateral right to acquire no more than 33% of the equity interests in the
Project Owner with respect to such Project and (y) such party exercises such
right, then Borrower shall be permitted to implement such sale to the extent
required under the relevant Project Document, notwithstanding the existence of
an Event of Default or Inchoate Default, and the Banks shall consent to
acquisition of such interest, subject to the Liens imposed by the Collateral
Documents, on the conditions that:
(i) Such party, in its capacity as a Non-Affiliated
Parent, shall execute and/or deliver to Administrative Agent (A) a Pledge
Agreement (Pledged Equity Interests) and its Pledged Equity Interests with
respect to such Project Owner in accordance therewith, (B) documents and
instruments similar to those contemplated for Non-Affiliated Parents pursuant to
Section 3; and
(ii) Borrower uses the entire amount of the purchase
price paid by such Person for such interest in such Project Owner to prepay the
Loans.
Upon the satisfaction of each of the foregoing conditions, Administrative Agent
shall execute and deliver to Borrower such documents and instruments as
reasonably may be necessary to enable such Person to acquire such equity
interests in such Project Owner, subject to the Liens imposed by the Collateral
Documents; provided, however, that in no event shall any such document or
instrument affect or deprive the Banks from having a perfected, first priority
Lien on all of the relevant Project Owner's right, title and interest in and to
such Project (including the cash flows therefrom).
(f) Borrower shall be permitted to implement sale-leaseback or
similar tax-related financing with respect to the ▇▇▇▇▇ Energy Center Project
and two other Projects, on the conditions that (i) at the time of the closing of
such a sale-leaseback or similar tax-related financing, if such Project is an
Initial Project, Borrower identifies a Substituted Initial Project to
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replace such Project (such Substituted Initial Project to satisfy the
requirements of the definition thereof) (in which case such Substituted Initial
Project shall be deemed an Initial Project and Appendixes G-1, G-2 and G-3, as
appropriate, shall be amended to reflect the foregoing and such Substituted
Initial Project shall thereafter be funded with Construction Loans in accordance
with Section 5.25.2), (ii) concurrently with the closing of each sale-leaseback
or similar tax-related financing Borrower uses all of the net proceeds of such
financing and, to the extent necessary, makes additional Contributions to prepay
the Loans in an amount equal to the greater of (A) the book value of the
relevant Project calculated in accordance with GAAP and (B) the net proceeds of
such financing, (iii) no Inchoate Default or Event of Default has occurred and
is continuing, (iv) Borrower's Four-Quarter Portfolio Interest Coverage Ratio as
of the most recent calendar quarter shall equal or exceed [*] to 1.00, and (v)
Borrower's Debt to Capitalization Ratio as of the most recent calendar quarter
shall be no higher than the Maximum Debt to Capitalization Ratio. Upon
satisfaction of each of the foregoing conditions Administrative Agent shall
execute and deliver to Borrower such documents and instruments, including UCC-3
termination statements, deeds of reconveyance, shall return, cancel and
terminate any applicable Portfolio Entity Note and Project Owner Guaranty, and
shall return all related Pledged Equity Interests, free and clear of the Liens
imposed by the Collateral Documents, all as reasonably may be necessary to
release the Liens granted to the Banks in such Project and the related Portfolio
Entities, as the case may be (including the Lien on cash flows from such
Project), and to permit such transfer of ownership.
(g) Borrower shall have the right in its sole discretion
without payment of additional consideration or any mandatory prepayment of Loans
to have any Unfunded Subsequent Project transferred to another Person or Persons
(whether by sale of assets or equity), and the Banks shall promptly consent to
the transfer of such Project and/or related Project Owner, as the case may be,
notwithstanding the existence of an Inchoate Default or Event of Default or any
other circumstance or condition whatsoever. Upon receipt of notice from
Borrower, Administrative Agent shall execute and deliver to Borrower such
documents and instruments as may be reasonably necessary to permit such transfer
of ownership.
(h) In the event a Project to which a Turbine is assigned (as
set forth in Exhibit G-3) is transferred and/or released pursuant to this
Section 6.4 or if Borrower elects not to proceed with the development of an
Unfunded Subsequent Project, (i) Borrower shall have the right in its discretion
to have such Turbine released from the Liens of the Collateral Documents and to
transfer ownership of such Turbine to another Person or Persons, and the Banks
shall promptly release such Turbine and consent to its transfer to another
Person or Persons upon written notice to Administrative Agent, so long as
Borrower shall prepay the aggregate principal amount of all Turbine Purchase
Loans (if any) made hereunder to pay Turbine Costs related to such Turbine (with
amounts other than amounts in any Account or otherwise constituting Collateral),
(ii) Borrower shall have the right at its discretion, upon written notice to
Administrative Agent, to have such Turbine assigned to another Project, in which
case Exhibit G-3 shall be amended to reflect such assignment, or (iii) subject
to Section 6.4.2(g), Borrower shall have the right at its discretion to make
Contributions to pay Turbine Costs with respect to such Turbine in accordance
with Section 3.10(a) until such time as Borrower selects either clause (i) or
(ii) above with respect to such Turbine, and until such time as Borrower selects
clause (ii) above with respect to such Turbine, if ever, such Turbine will not
be eligible to receive Turbine Purchase Loans for the payment of Turbine Costs
associated thereto. Upon receipt of a notice
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under clause (i) above requesting the release of any such Turbine and compliance
with the conditions thereto, Administrative Agent shall promptly execute and
deliver to Borrower such documents and instruments as may be reasonably
necessary to release such Turbine from the Liens of the Collateral Documents and
to permit such transfer of ownership.
(i) (i) In the event the Loans are accelerated pursuant
to Section 8.2.5, at the election of the Required Banks, Borrower shall, or
shall cause Calpine to, make either (A) Contributions in an amount equal to the
aggregate remaining payments to be made under the Turbine Purchase Contracts
with respect to Turbines that have not been assigned to Funded Projects or (B)
all remaining payments under the applicable Turbine Purchase Contracts with
respect to Funded Turbines that have not been assigned to Funded Projects, and
(ii) if on the date that is 30 days prior to the Turbine Delivery Date with
respect to any Turbine, the Project to which such Turbine has been assigned (as
set forth on Exhibit G-3) is not a Funded Project, Borrower shall, or shall
cause Calpine to, make all remaining payments under the applicable Turbine
Purchase Contract with respect to such Turbine (with amounts other than amounts
in any Account or otherwise constituting Collateral), and Borrower and/or the
applicable Portfolio Entities shall grant Administrative Agent a Lien on the
Collateral related to the Unfunded Project to which such Turbine is assigned (as
set forth on Exhibit G-3) securing all outstanding Loans hereunder other than
Loans attributable to Projects which have achieved Operation prior to the date
such Lien is granted; provided, however, that in any such case, Borrower shall
have the right in its discretion to prepay or cause to be prepaid the aggregate
amount of outstanding Turbine Purchase Loans attributable to such Turbine(s)
(with amounts other than amounts in any Account or otherwise constituting
Collateral) and, upon Administrative Agent's receipt of such payment, to have
such Turbine(s) released from the Liens of the Collateral Documents and to
transfer ownership of such Turbine(s) to Calpine. If Borrower exercises the
right in the foregoing proviso, upon prepayment in full of all such Turbine
Purchase Loans, the Banks shall promptly release such Turbine(s) and consent to
the transfer of such Turbine(s) to Calpine, and Administrative Agent shall
promptly execute and deliver to Borrower such documents and instruments as may
be reasonably necessary to release such Turbine(s) from the Liens of the
Collateral Documents and to permit such transfer(s) of ownership.
(j) In the event that Borrower is unable, after using
commercially reasonable efforts, to satisfy the conditions precedent for initial
funding for any Initial Project under Section 3.2, and the failure to satisfy
the conditions precedent for initial funding of such Initial Project is not
otherwise waived in accordance with this Agreement, Borrower shall have the
right in its discretion to have such Initial Project and/or related Portfolio
Entities released from the Liens of the Collateral Documents and to transfer
ownership of such Initial Project and/or Portfolio Entities to another Person or
Persons at any time prior to such Initial Project becoming a Funded Project, and
the Banks shall promptly release such Initial Project and/or Portfolio Entities
and consent to its transfer to another Person or Persons on the conditions that:
(i) (A) No Inchoate Default or Event of Default has
occurred and is continuing, (B) Borrower's Four-Quarter Portfolio Interest
Coverage Ratio as of the most recent calendar quarter shall equal or exceed [*]
to 1.00 and (C) Borrower's Debt to Capitalization Ratio as of the most recent
calendar quarter shall be no higher than the Maximum Debt to Capitalization
Ratio.
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(ii) Unless Borrower has made or caused to be made
Contributions to pay Project Costs for the Initial Projects other than such
Project in an aggregate amount equal to or greater than of $500,000,000, the
properties and assets attributable to such Contributions being subject to the
valid and first priority Lien of the Collateral Documents, Borrower makes
additional Contributions to prepay the Loans in an amount equal to the lesser of
(x) the difference between (A) $500,000,000 and (B) the total amount of
Contributions made or caused to be made to pay Project Costs for Initial
Projects at such time and (y) the total amount of Contributions attributed to
such Project, if any, as of the Closing Date in satisfaction of Section 3.1.23;
and
(iii) Borrower identifies a Substituted Initial Project
to replace such Project (such Substituted Initial Project to satisfy the
requirements of the definition thereof).
Upon satisfaction of the foregoing conditions, Administrative Agent shall
execute and deliver to Borrower such documents and instruments, including UCC-3
termination statements and deeds of reconveyance, shall return, cancel and
terminate any applicable Portfolio Entity Note and Project Owner Guaranty, and
shall return all related Pledged Equity Interests, free and clear of the Liens
imposed by the Collateral Documents, all as may be reasonably necessary to
release the Liens granted to the Banks in such Initial Project and/or related
Portfolio Entities, as the case may be (including the Lien on cash flows from
such Initial Project), and to permit such transfer of ownership. Concurrently
with the release and transfer of such Initial Project and/or related Project
Owner, such Substituted Initial Project shall be deemed an Initial Project and
Appendixes G-1, G-2 and G-3, as appropriate, shall be amended to reflect the
foregoing and such Substituted Initial Project shall thereafter be funded with
Construction Loans in accordance with Section 5.25.2.
(k) Upon any release of a Project or Turbine from the Lien of
the Collateral Documents as provided herein, such Project or Turbine shall cease
to be an Initial Project, Subsequent Project or Turbine, as applicable, for
purposes of this Agreement and the other Credit Documents.
(l) Borrower or the applicable Portfolio Entity shall have the
right to transfer and convey, notwithstanding the existence of an Event of
Default or Inchoate Default and free and clear of all Liens under the Credit
Documents, real estate interests, including Easements, relating to (i) the
transmission or transportation of power, gas, water or other inputs or outputs
to or from a Project, (ii) access to or from the Project, or (iii) the provision
of other services to the Project, to a Governmental Authority, local utility or
similar Person, so long as the Technical Committee is satisfied that the
transmission or transportation of such commodities, access and the provision of
such other services to or from the Project will not be adversely affected as a
result of such conveyance. In the event of such transfer and conveyance,
Administrative Agent shall execute and deliver to Borrower such documents and
instruments, including UCC-3 termination statements and deeds of reconveyance,
as reasonably may be necessary to release such real estate interests and related
portions of the Collateral from the Liens under the Credit Agreement.
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6.5 Changes. Change the nature of its business or expand its business
beyond the business contemplated in the Operative Documents, including without
limitation purchasing gas with the intention of reselling such gas; provided (a)
each Portfolio Entity shall be directly or indirectly a wholly-owned Subsidiary
of Borrower other than Project Owners with respect to Subsequent Projects which
shall be indirectly or directly at least 50% owned by Borrower, the Delta Energy
Center Project Owner and as otherwise permitted pursuant to Section 6.4.2, (b)
each Project Owner shall hold title to only one Project (or portion thereof),
(c) each Project Owner shall own 100% of its respective Project other than
Project Owners that are directly or indirectly wholly-owned by Borrower and
which own at least an undivided 50% interest in the Delta Energy Center Project,
a Substituted Initial Project or a Subsequent Project, (d) each Turbine is 100%
owned by a Turbine Owner (that is directly or indirectly wholly-owned by
Borrower) and (e) all equipment that is leased to a Funded Project by an
Equipment Finance Company pursuant to an Equipment Lease is 100% owned by such
Equipment Finance Company.
6.6 Distributions. (a) Subject to Section 7.14 and those distributions made
to Non-Affiliated Parents pursuant to Waterfall ▇▇▇▇▇ ▇, and except for payments
by the Delta Energy Center Project Owner under the Calpine DEC Credit Agreement
in accordance with the terms thereof, directly or indirectly, make or declare
any distribution (in cash, property or obligation) on, repay any subordinated
indebtedness or make any other payment on account of, any interest in Borrower
or any other Portfolio Entity (including any transfers of any tax benefits)
unless:
(i) no Event of Default or Inchoate Default has
occurred and is continuing and such payment or distribution will not result in
an Inchoate Default or Event of Default;
(ii) no Non-Fundamental Project Default or
Non-Fundamental Project Inchoate Default has occurred and is continuing with
respect to the Project to which the funds to be distributed are attributable,
such payment or distribution will not result in such Non-Fundamental Project
Default or Non-Fundamental Project Inchoate Default and such Project shall have
achieved Final Completion;
(iii) such distribution is made at Waterfall Level 8;
(iv) no Material Adverse Effect with respect to
Borrower has occurred and is continuing;
(v) the proceeds of such payment or distribution are in
an amount that is not greater than the Deemed Interest due, from time to time,
on the amount of Contributions to Borrower for Funded Projects (other than
Contributions made in connection with the release of Collateral pursuant to
Section 6.4.2) in excess of the difference between (x) the total aggregate
Project Costs for the Initial Projects, as reflected in the Project Budgets
delivered to the Lead Arrangers on the Closing Date pursuant to Section 3.1.14
less (y) [*];
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(vi) at the time of such proposed distribution or
payment, all the Initial Projects are Funded Projects; and
(vii) Borrower's Four-Quarter Portfolio Interest
Coverage Ratio as of the most recent calendar quarter shall equal or exceed [*]
to 1.00.
(b) Notwithstanding anything herein to the contrary, if
Borrower makes Contributions, or causes Contributions to be made, whether before
or after Commercial Operation of any Project, to itself or its Subsidiaries in
order to enable one or more Project Owners to pay amounts due the applicable
Equipment Finance Company pursuant to an Equipment Lease, such payments under
the applicable Equipment Lease shall not be considered Project Revenues, and if
and to the extent that such payments are not used to pay the purchase price for
such equipment to the vendor thereof, and are in excess of all other
Contributions then required to be made in accordance with this Agreement,
Borrower (or the relevant Subsidiaries) shall be entitled to make distributions
equal to the amount of such Contributions, free and clear of the Liens of the
Collateral Documents.
6.7 Investments. Make any investments (whether by purchase of stocks,
bonds, notes or other securities, loan, extension of credit, advance or
otherwise) other than Permitted Investments and investments in other Portfolio
Entities.
6.8 Transactions With Affiliates. Except for (a) the Equity Documents, the
Project Documents and the Additional Project Documents approved by
Administrative Agent and/or the Technical Committee, as the case may be,
pursuant to this Agreement and the transactions permitted thereby, (b)
arms-length transactions in the ordinary course of business, (c) transfers of
ownership interests permitted under Section 6.4.1(c) and the related Equipment
Leases, (d) the Calpine DEC Credit Agreement and documents related thereto, and
(e) as otherwise expressly permitted or contemplated by this Agreement and the
other Credit Documents, directly or indirectly enter into any transaction or
series of transactions relating to an Initial Project, a Funded Subsequent
Project, a Turbine assigned to an Initial Project (as set forth on Exhibit G-3)
or a Funded Turbine with or for the benefit of an Affiliate without the prior
written approval of Administrative Agent; provided, Borrower shall, subject to
Sections 3.2 and 3.3 and except in the case of an Equipment Lease, cause (i) any
Affiliate entering into a Project Document with a Project Owner for the supply
of goods or services to any such Project to deliver to Administrative Agent a
duly executed Affiliated Subordination Agreement substantially in the form of
Exhibit D-8 with conforming changes to address the specifics of such Project or
otherwise in form and substance reasonably satisfactory to Administrative Agent
(or, if applicable, amend an existing Affiliated Subordination Agreement) in
order to subordinate O&M Costs, to the extent satisfactory to Administrative
Agent, that a Project Owner may incur pursuant to such Project Document to the
Obligations and (ii) if such Affiliate is a Subsidiary of Calpine, Calpine to
deliver to Administrative Agent (A) if such Affiliate is a Subsidiary of Calpine
that is directly or indirectly more than 50% owned by Calpine, a duly executed
Affiliated Party Agreement Guaranty (or, if applicable, an amendment to an
existing
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Affiliated Party Agreement Guaranty) in order to evidence Calpine's guaranty of
100% of such Affiliate's performance under such Project Document in favor of
such Project Owner or (B) if such Affiliate is a Subsidiary of Calpine that is
directly or indirectly 50% owned by Calpine, a duly executed Affiliated Party
Agreement Guaranty (or, if applicable, an amendment to an existing Affiliated
Party Agreement Guaranty) in order to evidence Calpine's guaranty of at least
Calpine's percentage ownership in such Affiliate's performance under such
Project Document in favor of such Project Owner and a duly executed guaranty
agreement in favor of such Project Owner executed by a guarantor satisfactory to
the Technical Committee and in form and substance satisfactory to the Technical
Committee in order to evidence such guarantor's guaranty of those obligations of
such Affiliate under such Project Document not otherwise addressed in the
relevant Affiliated Party Agreement Guaranty. Notwithstanding the foregoing, in
no event shall (x) any Project Owner enter into any Project Document with
respect to any Project other than such Project Owner's Project, and (y) Borrower
enter into any Project Document.
6.9 Regulations. Directly or indirectly apply any part of the proceeds of
any Loan or other revenues to the purchasing or carrying of any margin stock
within the meaning of Regulations T, U or X of the Federal Reserve Board, or any
regulations, interpretations or rulings thereunder.
6.10 ERISA. Establish, maintain, contribute to or become obligated to
contribute to any ERISA Plan or suffer or permit any member of the Controlled
Group to do so.
6.11 Partnerships, Etc. Become a general or limited partner in any
partnership or a member in any limited liability company (except, in the case of
Borrower and Intermediate Parents, with respect to other Portfolio Entities)
create and hold stock in any subsidiary (except with respect to other Portfolio
Entities) or, except as otherwise expressly permitted by this Agreement, become
a joint venturer in any joint venture.
6.12 Dissolution. Except as otherwise expressly permitted by this Agreement
or in connection with the acquisition of a Subsequent Project, liquidate or
dissolve, or sell or lease or otherwise transfer or dispose of all or any
substantial part of its property, assets or business or combine, merge or
consolidate with or into any other entity, or change its legal form, or purchase
or otherwise acquire all or substantially all of the assets of any Person.
6.13 Amendments; Change Orders; Completion.
6.13.1 Directly or indirectly, amend, modify, supplement or waive, or
permit or consent to the amendment, modification, supplement or waiver
(including any waiver (or refund) of liquidated damages payable by any Major
Contractor under any Major Construction Contract or any Turbine Purchase
Contractor under any Turbine Purchase Contract) of, any of the provisions of, or
give any consent under, (a) any of (i) the Major Project Documents (other than
Major Gas Supply Contracts, Major Gas Transportation Agreements and Major Power
Purchase Agreements) relating to an Initial Project or a Funded Subsequent
Project or (ii) any of the Turbine Purchase Contracts relating to a Turbine
assigned to an Initial Project (as set forth on Exhibit G-3) or a Funded Turbine
without first submitting to Administrative Agent a copy of such proposed
amendment, modification, supplement or waiver and if, in the reasonable judgment
of Administrative Agent, the amendment, modification, supplement or waiver could
reasonably be expected to have a Material Adverse Effect on Borrower or any
Initial Project, Funded Subsequent Project, Turbine assigned to an Initial
Project (as set forth on Exhibit G-3) or Funded Turbine, obtaining the prior
written consent of the Required Banks thereto, which consent shall not be
unreasonably withheld or delayed or (b) any Project Document between
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Borrower or a Project Owner and an Affiliate thereof relating to an Initial
Project or a Funded Subsequent Project (but not including the amendment,
modification, supplement or waiver of any "Transactions" under any Power
Marketing Agreement or Gas Supply Contract between Borrower and such Affiliate)
without obtaining the prior written consent of the Required Banks thereto.
6.13.2 Without the prior written consent of Administrative Agent direct
or consent to any change order under any of the Major Construction Contracts
relating to an Initial Project or a Funded Subsequent Project or any of the
Turbine Purchase Contracts relating to a Turbine assigned to an Initial Project
(as set forth on Exhibit G-3) or a Funded Turbine if such change order:
(a) in the case of a Project, will, individually or together
with all previous change orders, increase or decrease the Project Costs of a
particular Initial Project or Funded Subsequent Project by more than $2,500,000
in the aggregate (exclusive of increases reimbursed by insurance awards,
condemnation awards or contractual damage awards); provided, however,
notwithstanding the foregoing, Borrower or a Project Owner may direct or consent
to any such change order without the prior written consent of Administrative
Agent if such change order will not individually increase the Project Costs of a
particular Initial Project or Funded Subsequent Project by more than $250,000
and such change order, together with all previous change orders, will not
increase the Project Costs of such Initial Project or Funded Subsequent Project
by more than $5,000,000 in the aggregate (in each case, exclusive of increases
reimbursed by insurance awards, condemnation awards or contractual damage
awards);
(b) in the case of a Turbine, will, individually or together
with all previous change orders, increase or decrease the Turbine Costs of a
particular Turbine assigned to a Initial Project (as set forth on Exhibit G-3)
or Funded Turbine by more than $1,000,000 in the aggregate (exclusive of
increases reimbursed by insurance awards, condemnation awards or contractual
damage awards);
(c) in the case of a Project, is reasonably likely to delay
Completion of any Project beyond the Loan Maturity Date;
(d) is reasonably likely to permit or result in any adverse
modification or impair the enforceability of any warranty under any Major
Construction Contract, any Maintenance Contract or any O&M Agreement relating to
an Initial Project or a Funded Subsequent Project or any warranty under any
Turbine Purchase Contract relating to a Turbine assigned to an Initial Project
(as set forth on Exhibit G-3) or a Funded Turbine, in each case if such
modification or impairment could reasonably be expected to have a Material
Adverse Effect on a Project;
(e) is reasonably likely, in the opinion of the Independent
Engineer, to impair or reduce the maximum capacity, efficiency, output,
performance, reliability, durability or availability of any Initial Project,
Funded Subsequent Project, Turbine assigned to an Initial Project (as set forth
on Exhibit G-3) or Funded Turbine, or increase O&M Costs associated with any
Initial Project or Funded Subsequent Project, or decrease Project Revenues from
any Initial
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Project or Funded Subsequent Project, in each case after accounting for other
favorable or unfavorable circumstances which may have affected such Project or
Turbine, as the case may be;
(f) is not permitted by any Major Project Document relating to
an Initial Project or a Funded Subsequent Project or Turbine Purchase Contract
relative to a Turbine assigned to an Initial Project (as set forth on Exhibit
G-3) or a Funded Project or would (i) materially diminish any obligation of any
Major Project Participant or Turbine Purchase Contractor, as the case may be, or
(ii) materially increase any obligation of any Portfolio Entity thereunder;
(g) is likely, in the reasonable opinion of Administrative
Agent, to present a significant risk of the revocation or material modification
of any Applicable Permit or Third Party Permit relating to an Initial Project or
a Funded Subsequent Project or jeopardize any Project's status as a Qualifying
Facility or an Eligible Facility, as the case may be;
(h) may cause any Initial Project, Funded Subsequent Project,
Turbine assigned to an Initial Project (as set forth on Exhibit G-3) or Funded
Turbine not to comply or lessen any such Project's or Turbine's ability to
comply with Legal Requirements; or
(i) relates to a Major Construction Contract between any
Portfolio Entity and an Affiliate of Borrower.
6.13.3 Declare "Completion", "Final Construction Completion", "Final
Project Completion" or "Mechanical Completion" (as such terms are defined in the
Construction Contracts) under the Construction Contracts relating to an Initial
Project or a Funded Subsequent Project or declare that the "Acceptance Date" has
occurred or approve the successful completion of the "Acceptance Tests" relating
to an Initial Project or a Funded Subsequent Project (as such terms are defined
in the Construction Contracts) without the written approval of Administrative
Agent acting in consultation with the Independent Engineer, which approval shall
not be unreasonably withheld or delayed.
6.13.4 Consent, without Administrative Agent's prior approval, to (a)
any action taken by any Contractor or Turbine Purchase Contractor to conform the
equipment or services provided by such Person to the intellectual property
rights of others if such action could reasonably be expected to materially and
adversely affect a Portfolio Entity's continued use of any Initial Project,
Funded Subsequent Project, Turbine assigned to an Initial Project (as set forth
on Exhibit G-3) or Funded Turbine or (b) to the settlement by any Contractor or
Turbine Purchase Contractor of any claim or proceeding which could reasonably be
expected to materially adversely affect a Portfolio Entity's rights relating to
an Initial Project, a Funded Subsequent Project, a Turbine assigned to an
Initial Project (as set forth on Exhibit G-3) or a Funded Turbine.
6.13.5 Direct any Major Contractor or Turbine Purchase Contractor to
suspend the work being performed under any Construction Contract or any Turbine
Purchase Contract relating to an Initial Project, a Funded Subsequent Project, a
Turbine assigned to an Initial Project (as set forth on Exhibit G-3) or a Funded
Turbine without Administrative Agent's prior consent.
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Wherever Administrative Agent is required to approve or consent to any change
order under this Section 6.13, Administrative Agent shall use good faith efforts
to respond to each change order request as soon as possible and in all events
within 20 days. No change order shall be deemed approved by Administrative Agent
until expressly approved.
6.14 Compliance with Operative Documents. Do or permit (to the extent
within its control) to be done in, upon or about any Project or Turbine or any
part thereof, or do or permit (to the extent within its control) to be done any
act under the Operative Documents, or omit or refrain from any act under the
Operative Documents, where such act done or permitted to be done, or such
omission of or refraining from action, could reasonably be expected to have a
Material Adverse Effect on Borrower, an Initial Project or a Funded Subsequent
Project.
6.15 Name and Location; Fiscal Year. Unless waived in writing by
Administrative Agent, change its name, the location of its principal place of
business or its federal employer identification number without notice to
Administrative Agent at least 45 days prior to such change, or change its fiscal
year without Administrative Agent's consent.
6.16 Use of Project Sites. Use, or permit to be used, any Site owned or
leased by a Portfolio Entity for any purpose other than for the construction,
operation and maintenance of the Project situated thereon as contemplated by the
Operative Documents, without the prior written approval of Administrative Agent.
6.17 Assignment. Assign its rights hereunder or under any of the other
Credit Documents, under any of the Project Documents relating to an Initial
Project or a Funded Subsequent Project or under a Turbine Purchase Contract
relating to a Turbine assigned to an Initial Project (as set forth on Exhibit
G-3) or a Funded Turbine, to any Person except as permitted under this Agreement
and the other Credit Documents.
6.18 Abandonment of Project or Turbine. Except as set forth in Section 6.4,
voluntarily cease or abandon the development, construction or operation of any
Initial Project or Funded Subsequent Project or voluntarily cease or abandon the
procurement of any Turbine assigned to an Initial Project (as set forth on
Exhibit G-3) or Funded Turbine.
6.19 Hazardous Substance. Release, emit or discharge into the environment
any Hazardous Substances in violation of any Hazardous Substance Laws, Legal
Requirements or Applicable Permits.
6.20 Additional Project Documents. Except as contemplated under the Power
Marketing Plans and Fuel Plans, enter into or become a party to any Project
Document relating to an Initial Project or a Funded Subsequent Project not in
existence or specifically contemplated pursuant to this Agreement (with the form
of such contemplated agreement approved by the Technical Committee) on the
Funding Date with respect to such Project, except (a) with the prior written
consent of Administrative Agent acting at the direction of the Technical
Committee, and (b) if required by Administrative Agent, upon delivery to
Administrative Agent of a Consent from such third party in substantially the
form of Exhibit E-1; provided that the consent of Administrative Agent and the
Technical Committee shall not be required for a Portfolio Entity to enter into
Additional Project Documents (i) with Persons other than Affiliates of Borrower
and
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(ii) pursuant to which such Portfolio Entity will incur obligations or
liabilities with a value of not more than $1,000,000 individually, or $2,000,000
in the aggregate, per year. In the event that the consent of Administrative
Agent is required in connection with a proposed Project Document pursuant to
this Section 6.20, Administrative Agent shall have 20 days from the time at
which it received such proposed Project Document to approve or disapprove such
proposed Project Document. No proposed Project Document shall be deemed approved
by Administrative Agent until expressly approved.
6.21 Project Budget Amendments. Directly or indirectly, amend, modify,
allocate, re-allocate or supplement or permit or consent to the amendment,
modification, allocation, re-allocation or supplement of, any of the provisions
of any Project Budget relating to an Initial Project or a Funded Subsequent
Project.
6.22 Loan Proceeds; Project Revenues. Use, pay, transfer, distribute or
dispose of any Loan proceeds in any manner or for any purposes except as
provided in Section 5.1.1 or of any Project Revenues in any manner or for any
purposes except as provided in Sections 5.1.2, 7.1 and 7.2.
6.23 Acquisition of Real Property. Acquire or lease any real property or
other interest in real property (excluding the acquisition (but not the
exercise) of any options to acquire any such interests in real property and the
acquisition of any Easements) unless (a) Borrower shall have delivered to
Administrative Agent on behalf of the Banks the Environmental Consultant's Phase
I environmental report with respect to such real property along with a
corresponding reliance letter from the Environmental Consultant confirming that
no Hazardous Substances were found in, on or under such real property and that a
Phase II environmental report is not warranted by the findings of such Phase I
environmental report and (b) if Hazardous Substances were found in, on or under
such real property pursuant to such Phase I environmental report or a Phase II
environmental report is warranted by the findings of such Phase I environmental
report, Borrower shall have either (i) delivered to Administrative Agent on
behalf of the Banks a Phase II environmental report with respect to such real
property along with a corresponding reliance letter from the Environmental
Consultant, confirming, in form and substance satisfactory to Administrative
Agent, either (A) that no Hazardous Substances were found in, on or under such
real property or (B) matters otherwise satisfactory to Administrative Agent or
(ii) delivered to Administrative Agent an environmental indemnity agreement in
form and substance satisfactory to Administrative Agent pursuant to which an
indemnitor satisfactory to Administrative Agent indemnifies the Portfolio
Entities and the Banks from any and all damages or other liabilities relating to
or arising from Hazardous Substances then in, on or under such real property or
otherwise caused by or attributable to such indemnitor.
6.24 Accounts. Maintain, or permit other Portfolio Entities to maintain,
any bank accounts other than the Accounts.
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ARTICLE 7.
APPLICATION OF FUNDS
7.1 Construction Account.
7.1.1 Establishment of Account. On or prior to the Closing Date,
Borrower and Administrative Agent shall establish the Construction Account at
the Depositary Agent's New York office and within the Construction Account a
sub-account for each Initial Project (other than Substituted Initial Projects).
On or prior to the initial funding of Construction Loans in respect of a
Substituted Initial Project or a Subsequent Project, Borrower and Administrative
Agent shall establish a sub-account within the Construction Account for such
Project and, on or prior to the initial funding of Turbine Purchase Loans in
respect of a Turbine, Borrower and Administrative Agent shall establish a
sub-account within the Construction Account for such Turbine (a "Turbine
Purchase Sub-Account" and, each sub-account established pursuant to the two
preceding sentences, a "Construction Sub-Account"). Subject to the satisfaction
(or waiver) of the applicable provisions of Article 3 in respect of the
applicable Project or Turbine, as the case may be, there shall be deposited into
each Construction Sub-Account the proceeds of all Loans made hereunder in
respect of the corresponding Project or, in the case of each Turbine Purchase
Sub-Account, the corresponding Turbine, and all amounts required to be deposited
in such Construction Sub-Account pursuant to Sections 3.10(a), 5.1.2 and 5.17.
7.1.2 Disbursements from Construction Account. Amounts shall be
disbursed from each Construction Sub-Account from time to time as provided in
this Section 7.1. Borrower shall have the right to cause Administrative Agent
(a) to disburse amounts from the Construction Sub-Account for the corresponding
Project to the accounts of each of the Contractors performing work on such
Project for amounts due and owing to such Contractors under the Construction
Contracts, or to any other materialmen, subcontractors, Administrative Agent or
any other Person performing work on such Project in payment of amounts due and
owing to such parties in respect of such Project in accordance with a duly
completed Construction Drawdown Certificate, (b) to transfer up to $250,000 in
any month from the Construction Sub-Account with respect to a Project to the
Operating Account with respect to such Project to pay specified amounts of less
than $50,000, individually, (c) to maintain up to $100,000 in any Operating
Account by transferring amounts from the corresponding Construction Sub-Account
to pay unspecified amounts (the expenditure of which shall be identified, and
substantiated to the reasonable satisfaction of Administrative Agent in the
immediately subsequent Construction Drawdown Certificate), (d) to disburse
amounts from the Turbine Purchase Sub-Account for the corresponding Turbine to
the account of the Turbine Purchase Contractor performing work with respect to
such Turbine in payment for amounts due and owing to such Turbine Purchase
Contractor under the Turbine Purchase Contract in accordance with a duly
completed Turbine Purchase Drawdown Certificate, and (e) to transfer amounts (i)
from the Construction Sub-Account for the corresponding Project to the Operating
Account with respect to such Project for payment by Borrower of amounts due and
owing to Contractors under the Construction Contracts or to any other
materialmen, subcontractors or other Persons performing work on such Project of
amounts due and owing to such parties in respect of such Project in accordance
with a duly completed Construction Drawdown Certificate and (ii) from the
Turbine Purchase Sub-Account for the corresponding Turbine to the Operating
Account for payment by Borrower of amounts due and owing to the Turbine Purchase
Contractor
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performing work with respect to such Turbine for amounts due and owing to such
Turbine Purchase Contractor under the Turbine Purchase Contract in accordance
with a duly completed Turbine Purchase Drawdown Certificate. Borrower agrees
that, where Administrative Agent has not transferred such amounts to the
relevant Operating Account pursuant to clause (e) above, Administrative Agent
may transfer any or all of a Loan and other sums in the applicable Construction
Sub-Account directly into the account of any Contractor or Turbine Purchase
Contractor, as the case may be, for amounts due and owing to such Person under
the relevant Construction Contract or Turbine Purchase Contract, as the case may
be, or any other materialmen or subcontractors in payment of amounts due and
owing to such parties in respect of the applicable Project or Turbine without
further authorization from Borrower; provided, however, that if Borrower has
notified Administrative Agent that it is contesting a claim for payment by any
such Person or a subcontractor or materialmen in accordance with the
requirements of this Agreement and the definition of "Permitted Liens,"
Administrative Agent will not, except as described in the proviso to the next
sentence, be entitled to pay any amount being contested. Borrower hereby
constitutes and appoints Administrative Agent its true and lawful
attorney-in-fact to make such direct payments and this power of attorney shall
be deemed to be a power coupled with an interest and shall be irrevocable;
provided that, except upon the occurrence and continuation of an Event of
Default or a Non-Fundamental Project Default with respect to the relevant
Project, Administrative Agent shall not exercise its rights under this power of
attorney except to make payments (a) as directed by Borrower or (b) which
Administrative Agent reasonably believes, if not promptly made, are reasonably
likely to have a Material Adverse Effect on the applicable Project. No further
direction or authorization from Borrower shall be necessary to warrant or permit
Administrative Agent to make such direct Loans in accordance with the foregoing
sentence, and all such direct Loans shall satisfy pro tanto the obligations of
Administrative Agent and the Banks hereunder, and shall be secured by the
Collateral Documents as fully as if made directly to Borrower, regardless of the
disposition thereof by any Contractor, Turbine Purchase Contractor, or any other
subcontractors, materialmen, laborers or other parties. Upon Completion of a
Project, any amounts remaining in the applicable Construction Sub-Account in
excess of amounts necessary to pay for "punchlist" items for such Project shall,
at Borrower's option, (i) be transferred to the Construction Sub-Account for
another Project, (ii) be transferred to the relevant sub-account of the Revenue
Account, and/or (iii) be applied to prepay Loans. Upon Final Completion of a
Project, any amounts remaining in the Construction Sub-Account for such Project
shall be transferred to the relevant sub-account of the Revenue Account. At any
time when there exists no remaining Turbine Costs for a Funded Turbine, any
amounts remaining in the corresponding Turbine Purchase Sub-Account shall, at
Borrower's option, (i) be transferred to the Construction Sub-Account for
another Turbine, (ii) be transferred to the Construction Sub-Account for a
Project, and/or (iii) be applied to prepay Loans; provided, in the case of
clause (ii) of this sentence, the Turbine Purchase Loans corresponding to such
transferred amounts shall be deemed Construction Loans in the manner set forth
in Section 2.3.5.
7.1.3 Rights of Administrative Agent. Administrative Agent will have
the right, but not the obligation, to (a) supply any missing endorsements of
Borrower, refuse any item for deposit except as required by the terms of this
Agreement, and pay and charge items payable by Administrative Agent pursuant to
Section 7.1.2 in any order convenient to Administrative Agent; (b) refuse to
honor any check drawn on the Construction Account or any sub-account therein
which is not consistent with this Agreement, or which has been improperly filled
out or
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endorsed; (c) create and charge to the Construction Account or the applicable
Construction Sub-Account overdrafts and all applicable charges; (d) remit copies
of checks and other items with statements instead of the originals which may be
retained by Administrative Agent; and (e) pay fees, interest and other charges
owing by Borrower.
7.2 Revenue Account.
7.2.1 Establishment of Account; Priority of Payments. On or prior to
the Closing Date, Borrower and Administrative Agent shall establish the Revenue
Account at the Depositary Agent's New York office and within the Revenue Account
a sub-account for each Initial Project (other than Substituted Initial
Projects). On or prior to the initial funding of Construction Loans in respect
of a Substituted Initial Project or a Subsequent Project, Borrower and
Administrative Agent shall establish a sub-account within the Revenue Account
for such Project. There shall be deposited into the Revenue Account the amounts
specified in Section 5.1.2 and the applicable portion of withdrawals from time
to time from the Working Capital Reserve Account pursuant to Section 7.8.3. So
long as no Event of Default has occurred and is continuing, or will occur upon
giving effect to the application described below, funds in the Revenue Account
shall be applied at the following times and in the following order of priority
by disbursement or internal account transfer by the Depositary Agent, (a) on
Administrative Agent's volition with respect to Waterfall Levels 1 through 6 and
8 or if Administrative Agent reasonably believes that failure to make any such
payment could reasonably be expected to have a Material Adverse Effect with
respect to Borrower or a Project, or (b) pursuant to a disbursement requisition
executed by Borrower, directly to the Person entitled thereto, in each case at
the following times, commencing on the date funds are first deposited in the
Revenue Account, and in the following order of priority (each, a "Waterfall
Level"):
(1) from time to time, provided that Administrative Agent has
timely received and approved a Disbursement Requisition delivered pursuant to
Section 7.2.2, amounts in the Revenue Account shall be transferred to a
Project's Operating Account for payment of Senior O&M Costs incurred with
respect to such Project in an amount determined pursuant to Section 7.2.2 below;
(2) as and when due under the terms of this Agreement, from
the Revenue Account to the payment of all fees, costs, charges and any other
amounts due and payable to Administrative Agent, LC Bank and the Banks in
connection with this Agreement and the other Credit Documents;
(3) as and when due, on a pro rata basis among the Banks, from
the Revenue Account to the payment of interest on the Loans and on Reimbursement
Obligations;
(4) as and when due, from the Revenue Account, to repayment of
the Reimbursement Obligations incurred in connection with Letters of Credit;
(5) on the last Banking Day of each calendar quarter, as and
to the extent requested by Borrower, from the Revenue Account to the Working
Capital Reserve Account as required by Section 7.8;
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(6) on the last Banking Day of each calendar quarter, in the
event that the conditions to distributions set forth in Section 6.6 have been
satisfied, provided that Administrative Agent has timely received and approved a
Disbursement Requisition delivered pursuant to Section 7.2.2, and as and to the
extent requested by Borrower from the Revenue Account to the payment of
Subordinated O&M Costs in an amount determined pursuant to Section 7.2.3 below;
(7) on the last Banking Day of each calendar quarter, (a) with
respect to any Non-Affiliated Parent, for payment to such Non-Affiliated Parent
in an amount equal to such Non-Affiliated Parent's percentage interest in the
net Project Revenues from such Project remaining after payment of the amounts
described in clauses (1) through (6) with respect to such Project and other
amounts which Borrower certifies are properly chargeable to such Non-Affiliated
Parent's interest and (b) in the event that the conditions to distributions set
forth in Section 6.6 have been satisfied, for payment of obligations owed to
Persons that are not Affiliates of Borrower and which obligations have been
approved by the Technical Committee in its sole discretion;
(8) on the last Banking Day of each calendar quarter, in the
event that the conditions to distributions set forth in Section 6.6 have been
satisfied, for payment to Borrower or distribution by Borrower in amounts
described in and for application in accordance with Section 6.6;
(9) on the last Banking Day of each calendar quarter, on a pro
rata basis among the Banks, to the prepayment of principal amounts of the Loans
outstanding; and
(10) on the last Banking Day of each calendar quarter,
provided no Loans are then outstanding, to Borrower.
To the extent reasonably practicable, funds in the various sub-accounts of the
Revenue Account shall be applied at each Waterfall Level to costs, payments or
other uses as described in such Waterfall Level related or attributable to the
Project to which such sub-account relates; provided, if funds in any such
sub-account are insufficient for such application, Borrower or Administrative
Agent may apply funds in other sub-accounts of the Revenue Account to such
application; provided further, however, that the Lien of the Collateral
Documents on the Project Revenues from a particular Project shall not secure
Obligations relating to or arising from Projects that had achieved Operation
prior to the date such Lien was granted to Administrative Agent on behalf of the
Banks pursuant to the Credit Documents.
7.2.2 O&M Costs. Sums shall be transferred to the Operating Accounts
for the payment of Senior O&M Costs as provided in this Section 7.2.2. On or
before the fifth Banking Day prior to the last Banking Day of each month during
which Borrower desires to transfer sums to the Operating Account for the
corresponding Project for the payment of Senior O&M Costs incurred in respect of
the corresponding Project, Borrower shall submit to Administrative Agent a
certificate in the form of Exhibit C-10 detailing the amounts to be so
transferred ("Disbursement Requisition"), which amounts shall not exceed the
Senior O&M Costs incurred in respect of the corresponding Project which have
become, or are anticipated to become, due and payable during such month.
Administrative Agent shall review such Disbursement
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Requisition within five Banking Days following receipt thereof, and shall
transfer the amounts specified therein to the applicable Operating Account for
application in accordance with Waterfall Level 1 to the extent that such
expenditures are in accordance with the terms of the applicable Annual Operating
Budget and this Agreement, as such budget may be exceeded pursuant to the terms
hereof. Notwithstanding anything in this Section 7.2.2 to the contrary, the
transfers to, and expenditures from, the Revenue Account or a sub-account
therein for Senior O&M Costs (other than O&M Costs incurred in an emergency and
fuel costs and netting any O&M Costs consisting of payments under Equipment
Leases against the corresponding Project Revenues resulting from such payments)
payable pursuant to Waterfall Level 1 shall not, without Administrative Agent's
consent, exceed 115% of the aggregate amounts specified in such Annual Operating
Budget. Borrower shall promptly pay or cause to be paid all Senior O&M Costs in
excess of the amounts permitted under the preceding sentence by Contributions of
additional funds; provided, however, that if Administrative Agent subsequently
approves a variation in such Annual Operating Budget which would have allowed
the payment of such excess Senior O&M Costs, Borrower shall be entitled to
recover any such Senior O&M Costs previously paid by Contributions of additional
funds at Waterfall Level 1. Each Disbursement Requisition shall reflect a
reduction in the Senior O&M Costs for which Borrower requests that funds be
transferred to the Operating Account during such month for any amounts which
remain, or are expected to remain, in the applicable Operating Account at the
end of any month as a result of a previous Disbursement Requisition.
7.2.3 Subordinated O&M Costs. On or before the fifth Banking Day prior
to the end of each calendar quarter on which Borrower desires to make payments
of Subordinated O&M Costs, Borrower shall include in the Disbursement
Requisition submitted pursuant to Section 7.2.2 on such date the amounts to be
so paid, which amounts shall not exceed the Subordinated O&M Costs which have
become due and payable. Administrative Agent shall review such Disbursement
Requisition within five Banking Days following receipt thereof, and, to the
extent funds exist in the Revenue Account after application of amounts in such
account to Waterfall Levels 1 through 5, make payment of the Subordinated O&M
Costs specified therein in accordance with Section 7.2.1 to the designated payee
thereof to the extent that such expenditures are in accordance with the terms of
the relevant Annual Operating Budget.
7.2.4 Mandatory Prepayment.
(a) If on the last Banking Day of any calendar quarter, an
Event of Default shall exist, Borrower shall use all amounts, if any, in the
Revenue Account and all sub-accounts thereof at such time after application of
amounts in such account to Waterfall Levels 1 through 5 (i) to prepay the Loans
(and the Reimbursement Obligations, pro rata), and (ii) upon repayment in full
of the Loans and the Reimbursement Obligations, to repay all other Obligations
of Borrower to the Banks, as designated by Administrative Agent and the Required
Banks.
(b) Nothing in this Section 7.2.4 shall limit in any manner
the rights and remedies of Administrative Agent and the Banks upon and during
the continuation of an Event of Default under this Agreement.
7.3 Operating Account.
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7.3.1 Establishment of Account. On or prior to the Funding Date for a
Project, the relevant Project Owner and Administrative Agent shall establish at
a mutually acceptable financial institution an account entitled "[RELEVANT]
Project -- Operating Account" (each, an "Operating Account" and collectively,
the "Operating Accounts").
7.3.2 Funding. From time to time, in accordance with Section 7.1.2 or
the provisions of the Waterfall Levels, Borrower shall cause to be transferred
to the Operating Accounts the amounts specified in Sections 7.1.2, 7.2.1 and
7.2.2, as the case may be.
7.3.3 Withdrawals. The relevant Project Owner shall be entitled to
withdraw amounts from an Operating Account (a) to pay Project Costs for the
corresponding Project in accordance with Section 7.1.2 or (b) to pay Senior O&M
Costs for the corresponding Project which have become due and payable in respect
of such Project in accordance with the Disbursement Requisition in which such
Senior O&M Costs were described. Amounts transferred to an Operating Account for
the payment of Project Costs which are not, for any reason, applied to the
payment of Project Costs pursuant to the Construction Drawdown Certificate
pursuant to which such amounts were transferred, shall be retained in such
Operating Account for application to the following month's Project Costs in
accordance with Section 7.1.2. Amounts transferred to an Operating Account for
the payment of Senior O&M Costs which are not, for any reason, applied to the
payment of Senior O&M Costs in accordance with the Disbursement Requisition
pursuant to which such amounts were transferred, shall be retained in such
Operating Account for application to the following month's Senior O&M Costs in
accordance with Section 7.2.2.
7.3.4 Security Interest. Each Operating Account shall be established in
a state in which the Uniform Commercial Code as adopted in such state governs
the creation, perfection and priority of security interests in "Deposit
Accounts" (as defined in such Uniform Commercial Code), and each Operating
Account shall be maintained as a "Deposit Account" in accordance with such
Uniform Commercial Code. The relevant Project Owner shall execute and deliver
such documents and instruments as Administrative Agent shall reasonably request
in order to grant Administrative Agent a perfected first priority Lien in each
Operating Account.
7.4 Loss Proceeds Account. On or prior to the Closing Date, Borrower and
Administrative Agent shall establish at the Depositary Agent's New York Office
the Loss Proceeds Account, and within the Loss Proceeds Account a sub-account
for each Initial Project (other than Substituted Initial Projects). On or prior
to the initial funding of Construction Loans in respect of a Substituted Initial
Project or a Subsequent Project, Borrower and Administrative Agent shall
establish a sub-account within the Loss Proceeds Account for such Project.
Except where a Project Document for a Funded Project that is not directly or
indirectly wholly-owned by Borrower may, with the approval of the Technical
Committee, direct otherwise, all Insurance Proceeds, Eminent Domain Proceeds and
damage payments described in Section 7.7 shall be deposited in the appropriate
subaccount in the Loss Proceeds Account and applied (a) as specified in Sections
7.5 through 7.7 and (b) if no such application is specified, to the prepayment
of the Loans, and thereafter to payment of all other Obligations of Borrower.
7.5 Application of Insurance Proceeds.
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7.5.1 General. Borrower shall notify Administrative Agent of casualties
as provided in Section 5.4.4 and any other casualty as to which Insurance
Proceeds have been made available. Borrower shall keep Administrative Agent
timely apprised of insurance claim proceedings. All amounts and proceeds
(including instruments) in respect of the proceeds of any insurance policy
required to be maintained by a Portfolio Entity hereunder (including the pro
rata portion of such amounts received under any policy maintained by a Joint
Venture) ("Insurance Proceeds") shall be applied as provided in this Section 7.5
except where a Project Document for a Funded Project that is not directly or
indirectly wholly-owned by Borrower may, with the approval of the Technical
Committee, direct otherwise. Except where a Project Document for a Funded
Project that is not directly or indirectly wholly-owned by a Borrower may, with
the approval of the Technical Committee, direct otherwise, and except as set
forth in Section 7.5.9, all Insurance Proceeds (or, in the case of a Project
that is not wholly-owned by a Portfolio Entity, such Portfolio Entity's share of
such Insurance Proceeds) shall be paid by the insurers directly to
Administrative Agent (as loss payee or additional insured as provided in Exhibit
K). If any Insurance Proceeds required to be paid to Administrative Agent
pursuant to the preceding sentence are paid directly to any Portfolio Entity,
Calpine or any other Person with respect to any Project or Turbine by any
insurer, such Insurance Proceeds shall be received only in trust for
Administrative Agent, shall be segregated from other funds of the Portfolio
Entities, Calpine or such other Person, as the case may be, and Borrower shall
cause such amounts to be forthwith paid over to Administrative Agent in the same
form as received (with any necessary endorsement). To the fullest extent that it
effectively may do so under applicable law, Administrative Agent shall apply all
such Insurance Proceeds in accordance with the provisions of this Section 7.5.
7.5.2 Delay in Start Up and Business Interruption Insurance. Any delay
in start up Insurance Proceeds received by Administrative Agent or any Portfolio
Entity (i) prior to Completion of the Project to which such Insurance Proceeds
relate shall be deposited into the Construction Sub-Account for such Project for
application in accordance with Section 7.1 and (ii) on or after Completion of
the Project to which such Insurance Proceeds relate shall be deposited into the
Revenue Account for application in accordance with Section 7.2.
7.5.3 Applications; Mandatory Prepayments. All Insurance Proceeds
(other than those described in Sections 7.5.2, 7.5.4 and 7.5.9) and all Eminent
Domain Proceeds shall be applied (a) to the prepayment of Loans and
Reimbursement Obligations, pro rata, and (b) to the payment of all other
Obligations of Borrower, unless, with respect to a Project, each of the
following conditions are satisfied or waived by Administrative Agent, or the
Required Banks, as required pursuant to Section 7.5.5 or 7.5.6, in which event
such amounts shall be applied to the repair or restoration of the Project to
which such Insurance Proceeds or Eminent Domain Proceeds relate in accordance
with the terms of such subsections:
(a) such damage or destruction does not constitute the
destruction of all or substantially all of the man-made portion of the Project
to which such Insurance Proceeds or Eminent Domain Proceeds relate;
(b) neither a Non-Fundamental Project Default or a
Non-Fundamental Project Inchoate Default with respect to the damaged or
destroyed Project nor an Inchoate Default or an Event of Default has occurred
and is continuing and after giving effect to any
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proposed repair and restoration, such damage or destruction or proposed repair
and restoration will not result in a Non-Fundamental Project Default or
Non-Fundamental Project Inchoate Default with respect to such Project or an
Event of Default or an Inchoate Default;
(c) Borrower and the Independent Engineer certify, and
Administrative Agent (with, if applicable, the consent of the Required Banks)
determines in its reasonable judgment, that repair or restoration of the Project
to which such Insurance Proceeds or Eminent Domain Proceeds relate is
technically and economically feasible within a twelve-month period and that a
sufficient amount of funds is or will be available to Borrower and the relevant
Project Owner and, if applicable, the Joint Venturer to make repairs and
restorations; provided, however, that if such Project is not wholly-owned by a
Project Owner, then the Joint Venture Agreement shall, unless otherwise approved
by the Technical Committee, require the other Persons owning an interest in such
Project to use their share of Insurance Proceeds or Eminent Domain Proceeds for
the repair or restoration of such Project;
(d) Borrower certifies, and Administrative Agent (with, if
applicable, the consent of the Required Banks) determines in its reasonable
judgment, that a sufficient amount of funds is or will be available to Borrower
to make all payments of Debt Service which will become due during, if any, and
following repair period and to maintain the Four-Quarter Portfolio Interest
Coverage Ratios set forth in the Base Case Project Projections, unless the
Required Banks agree otherwise;
(e) if such damage or destruction occurs prior to the
Completion of a Project, such repair or restoration will not adversely affect,
in the reasonable judgment of Administrative Agent in consultation with the
Independent Engineer, achievement of Completion in accordance with the terms and
conditions of this Agreement and the other Credit Documents;
(f) no Permit is necessary to proceed with the repair and
restoration of the Project to which such Insurance Proceeds or Eminent Domain
Proceeds relate and no material amendment to the Project Documents, or, except
with the consent of the Required Banks, this Agreement or any of the Credit
Documents, and no other instrument is necessary for the purpose of effecting the
repairs or restorations of the Project to which such Insurance Proceeds or
Eminent Domain Proceeds relate or subjecting the repairs or restorations to the
Liens of the applicable Collateral Documents and maintaining the priority of
such Liens or, if any of the above is necessary, Borrower will be able to obtain
the same as and when required;
(g) Administrative Agent shall receive an opinion of counsel
acceptable to Administrative Agent opining as to the Permits described in
paragraph (f) above, and an opinion to the effect that such repairs or
restoration (to the extent constituting Collateral) will be subject to the Liens
of the applicable Collateral Documents at the same level of priority as the
other Collateral; and
(h) Administrative Agent shall receive such additional title
insurance, title insurance endorsements, mechanic's lien waivers, certificates,
opinions or other matters as it may reasonably request as necessary or
appropriate in connection with such repairs or restoration
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of the Project to which such Insurance Proceeds or Eminent Domain Proceeds
relate or to preserve or protect the Banks' interests hereunder and in the
applicable Collateral.
7.5.4 Proceeds Less than $1,000,000. If there shall occur any damage or
destruction of a Project with respect to which Insurance Proceeds received by
the Portfolio Entities for any single loss not in excess of $1,000,000 are
payable, such Insurance Proceeds received by the Portfolio Entities shall be
held by Administrative Agent in the Loss Proceeds Account and released by
Administrative Agent to Borrower in accordance with Section 7.5.7.
7.5.5 Proceeds in Excess of $1,000,000, Not in Excess of $10,000,000.
Provided that the conditions set forth in Section 7.5.3 have been waived by
Administrative Agent and the Independent Engineer, or have been acknowledged by
such Persons as having been satisfied, if there shall occur any damage or
destruction of a Project with respect to which Insurance Proceeds received by
the Portfolio Entities for any single loss in excess of $1,000,000, but not in
excess of $10,000,000, are payable, such Insurance Proceeds received by the
Portfolio Entities shall be held by Administrative Agent in the Loss Proceeds
Account and released by Administrative Agent to Borrower in accordance with
Section 7.5.7.
7.5.6 Proceeds in Excess of $10,000,000. Provided that the conditions
set forth in Section 7.5.3 have been waived by Administrative Agent, the
Required Banks and the Independent Engineer, or have been acknowledged by such
Persons as having been satisfied, if there shall occur any damage or destruction
of a Project with respect to which Insurance Proceeds for any single loss in
excess of $10,000,000 are payable, such Insurance Proceeds shall be held by
Administrative Agent in the Loss Proceeds Account and released by Administrative
Agent to Borrower in accordance with Section 7.5.7.
7.5.7 Repair and Restoration Procedures. Amounts which are to be
applied to repair or restoration of a Project pursuant to this Section 7.5 shall
be disbursed by Administrative Agent from the Loss Proceeds Account in
accordance with the following procedures:
(a) Borrower shall cause any repairs or restoration to be
commenced and completed promptly and diligently either using Insurance Proceeds
as contemplated in paragraph (b) below or, to the extent such proceeds are not,
or have not yet been made, available, using Borrower's funds;
(b) From time to time (after Administrative Agent or the
Required Banks, if applicable, shall have duly approved the making of such
repairs or restoration), Administrative Agent's authorization of release of
Insurance Proceeds for application toward such repairs or restoration shall be
conditioned upon Borrower's written request and the presentation to
Administrative Agent of all documents, certificates and information with respect
to such Insurance Proceeds which would be required in order to obtain a Loan
under this Agreement, including a certificate from Borrower (i) describing in
reasonable detail the nature of the repairs or restoration to be effected with
such release, (ii) stating the cost of such repairs or restoration and the
specific amount requested to be paid over to or upon the order of Borrower and
that such amount is requested to pay the cost thereof, (iii) stating that the
aggregate amount requested by Borrower in respect of such repairs or restoration
(when added to any other Insurance Proceeds received by the Portfolio Entities
or otherwise made available to a Project in respect of such
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damage or destruction) does not exceed the cost of such repairs or restoration
and that a sufficient amount of funds is or will be available to the Portfolio
Entities to complete the applicable Project, and (iv) stating that neither a
Non-Fundamental Project Inchoate Default with respect to the damaged or
destroyed Project nor an Inchoate Default has occurred and is continuing other
than a Non-Fundamental Project Default with respect to such Project or an Event
of Default resulting solely from such damage or destruction.
7.5.8 Excess Insurance Proceeds. If, after Insurance Proceeds have been
applied to the repair or restoration of a Project as provided in Sections 7.5.4,
7.5.5 or 7.5.6, the Banks in consultation with the Independent Consultants
determine that such Project will be able to operate at a level enabling Borrower
to satisfy its obligations hereunder as well as before the damage or
destruction, any excess Insurance Proceeds shall be paid into the Revenue
Account. In the event that the Banks in consultation with the Independent
Engineer determine otherwise, such excess Insurance Proceeds shall be applied
(a) to the prepayment of Loans and Reimbursement Obligations, pro rata, and (b)
to the payment of all other Obligations of Borrower.
7.5.9 Turbine Insurance Proceeds. Any Insurance Proceeds related to
Turbines shall be distributed directly to Borrower, provided that, with respect
to a Funded Turbine, Borrower pays to Administrative Agent the aggregate amount
of the Turbine Purchase Loans then outstanding with respect to such Turbine.
Upon satisfaction of the foregoing condition, Administrative Agent shall execute
and deliver to Borrower such documents and instruments as may be reasonably
necessary to release such Turbine from the Liens of the Collateral Documents and
to permit such transfer of ownership.
7.5.10 Events of Default. If a Non-Fundamental Project Default with
respect to the damaged or destroyed Project or an Event of Default shall have
occurred and be continuing, then any provisions of this Sections 7.5 to the
contrary notwithstanding, the Insurance Proceeds (including any Permitted
Investments made with such proceeds, which shall be liquidated in such manner as
the Banks shall deem reasonable and prudent under the circumstances) may be
applied by Administrative Agent (a) to curing such Non-Fundamental Project
Default or Event of Default, and any Insurance Proceeds remaining thereafter
shall be applied as provided in this Section 7.5 or (b) if such Non-Fundamental
Project Default or Event of Default cannot be cured, toward payment of all other
Obligations of Borrower, in connection with exercise of the Banks' remedies
pursuant to Article 8.
7.6 Application of Eminent Domain Proceeds. All amounts and proceeds
(including instruments) received in respect of any Event of Eminent Domain
("Eminent Domain Proceeds") shall be subject to the same treatment as Insurance
Proceeds as provided in Section 7.5.
7.7 Application of Certain Damages Payments; Mandatory Prepayments.
7.7.1 Contractor. All delay related liquidated damages (or, in the case
of a Project that is not wholly-owned by a Portfolio Entity, such Portfolio
Entity's share of such liquidated damages) shall (a) if received prior to
Completion of the Project in respect of which they were received, be deposited
in the Construction Account and applied pursuant to Section 7.1 or (b) if
received after Completion of such Project, be deposited in the Revenue Account
and applied pursuant to Section 7.2.1. All performance related liquidated
damages (or, in the case of
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a Project that is not wholly-owned by a Portfolio Entity, such Portfolio
Entity's share of such liquidated damages), including all payments in lieu of
performance related liquidated damages payable by Calpine pursuant to clause
(vii) of the definition of "Completion", shall be applied be applied first to
the prepayment of Loans and Reimbursement Obligations, pro rata, in accordance
with Section 2.1.7 and thereafter to all other Obligations of Borrower.
7.7.2 Power Purchasers. All damage payments made by Power Marketer or
any other purchaser of the power generated by a Project in satisfaction of such
party's obligations under its purchase agreement (or, in the case of a Project
that is not wholly-owned by a Portfolio Entity, such Portfolio Entity's share of
such damage payments,) shall (a) to the extent such damages are intended to
replace lost revenues, be deposited in the Revenue Account for application as
provided in Section 7.2, and (b) otherwise, applied to (i) the prepayment of
Loans and the Reimbursement Obligations, pro rata, and (ii) to the extent that
all such Loans and Reimbursement Obligations, as applicable, have been prepaid,
applied to the other Obligations of Borrower.
7.7.3 Other. Except as otherwise expressly permitted under this
Agreement, including this Section 7.7, Borrower shall apply the proceeds of any
other surety, performance or similar bonds and any other liquidated or other
damages paid in respect of damage payments or performance payments by (a) any
contractors or subcontractors or other Persons involved in the construction and
operation of a Project or (b) any Turbine Purchase Contractors with respect to
Turbines (or in the case of a Project or a Turbine that is not wholly-owned by a
Portfolio Entity, such Portfolio Entity's share of such proceeds), to the
prepayment of the Loans and Reimbursement Obligations, pro rata, and thereafter
to the Obligations of Borrower or, with the prior written consent of
Administrative Agent acting in consultation with the Independent Engineer, to
such other application in relation to a Project or a Turbine as Borrower may
request.
7.8 Working Capital Reserve Account.
7.8.1 Establishment of Account. On or prior to the Closing Date,
Borrower and Administrative Agent shall establish the Working Capital Reserve
Account at the Depositary Agent's New York office and within the Working Capital
Reserve Account a sub-account for each Initial Project (other than Substituted
Initial Projects). On or prior to the initial funding of Construction Loans in
respect of a Substituted Initial Project or a Subsequent Project, Borrower and
Administrative Agent shall establish a sub-account within the Working Capital
Reserve Account for such Project.
7.8.2 Funding. On the last Banking Day of each calendar quarter,
Borrower shall cause such portion as Borrower may direct of the amounts then in
the Revenue Account in excess of the amounts applied through Waterfall Level 4
to be deposited into the Working Capital Reserve Account, until the amounts
deposited therein equal the Working Capital Reserve Requirement; provided, if
the applicable Project's Project Budget approved by the Lead Arrangers or the
Technical Committee, as the case may be, pursuant to Article 3 contains initial
working capital as an approved Project Cost, such amounts up to the Working
Capital Reserve Requirement shall be deposited into the Working Capital Reserve
Account on the Completion Date with respect to such Project.
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7.8.3 Withdrawals. Borrower shall be entitled to submit a duly executed
Reserve Account Disbursement Requisition in substantially the form of Exhibit
C-11 (a "Reserve Account Disbursement Requisition") in order to withdraw amounts
from the Working Capital Reserve Account, including for deposit into the Revenue
Account, to pay all Senior O&M Costs (a) that have become due and payable for
any Initial Project or Funded Subsequent Project, (b) for which insufficient
amounts are available in the Revenue Account or applicable Operating Account and
(c) which, unless Administrative Agent consents, do not, together with all
Senior O&M Costs previously paid during the same calendar year with respect to
such Project, exceed 115% of the amounts of Senior O&M Costs (other than fuel
costs) specified for such Project in the applicable Annual Operating Budget for
such calendar year, or as otherwise approved by Administrative Agent and the
Independent Engineer. To the extent reasonably practicable, funds in the various
sub-accounts of the Working Capital Reserve Account shall be applied to costs,
payments or other uses as described in this Section 7.8 related or attributable
to the Project to which such sub-account relates; provided, if funds in any such
sub-account are insufficient for such application, Borrower or Administrative
Agent may apply funds in other sub-accounts of the Working Capital Reserve
Account to such application.
7.8.4 Earnings. All earnings on monies in the Working Capital Reserve
Account shall accrue to the Working Capital Reserve Account up to the Working
Capital Reserve Requirement and shall thereafter be deposited in the Revenue
Account.
7.9 Security Interest in Proceeds and Accounts. Borrower hereby pledges,
assigns and transfers to Administrative Agent on behalf of the Banks and grants
to Depositary Agent on behalf of the Banks a security interest in and to all of
its right, title and interest in and to all Insurance Proceeds and Eminent
Domain Proceeds (to the extent permitted under the Calpine Indenture)
(collectively, "Proceeds"), Accounts, Sub-Accounts and contents of Accounts and
Sub-Accounts, as security for the Loans and the full and faithful performance of
all of Borrower's obligations hereunder and under the other Credit Documents.
Borrower shall not have any rights or powers with respect to any Account except
to have funds on deposit therein applied or distributed in accordance with this
Agreement. Administrative Agent is hereby authorized to reduce to cash any
Permitted Investment (without regard to maturity) in order to make any
application required by any section of this Article 7 or otherwise pursuant to
the Credit Documents. Upon the occurrence and during the continuance of an Event
of Default, Administrative Agent shall have all rights and powers with respect
to Proceeds, the Accounts and the contents of the Accounts as it has with
respect to any other Collateral and may apply such amounts to the payment of
interest, principal, fees, costs, charges or other amounts due or payable to
Administrative Agent or the Banks with respect to the Loans in such order as the
Required Banks may elect in their sole discretion. If such Event of Default
occurs and is continuing, until such time as the Required Banks so elect to
exercise such rights and powers, amounts in the Revenue Account shall continue
to be applied by Administrative Agent to the payment categories specified in
Waterfall Levels 1 (to the extent of actual Senior O&M Costs payable to third
parties that are not Affiliates of Borrower) and 2 through 5 and ▇▇▇▇▇ ▇, and,
to the extent that Administrative Agent, as directed by the Required Banks
acting in their sole discretion, so elects Waterfall Levels 6, 7, 8 and 10.
Borrower shall not have any rights or powers with respect to such amounts except
as expressly provided in this Article 7.
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7.10 Permitted Investments. All amounts held by Borrower and/or
Administrative Agent in the Accounts or as Insurance Proceeds or Eminent Domain
Proceeds shall only be invested in Permitted Investments as provided in the
Depositary Agreement. Borrower shall not hold funds in any accounts other than
the Accounts; provided that the relevant Project Owners shall be permitted to
maintain the Operating Accounts in accordance with Section 7.3.
7.11 Earnings on Accounts. Except as otherwise expressly provided herein,
including with respect to the Revenue Account and the Operating Accounts, all
earnings on funds in any Account maintained hereunder shall, on the last day of
each calendar quarter, be deposited in the Revenue Account.
7.12 Dominion and Control. Each of the Accounts and the amounts held
thereunder (including Permitted Investments therein) shall at all times be under
the exclusive dominion and control of the Depositary Agent.
7.13 Termination of Commitments. Upon repayment in full of all Obligations
and expiration or irrevocable termination of all Commitments, Administrative
Agent shall disburse any amounts on deposit in the Accounts to Borrower, or, if
applicable, as directed by a court of competent jurisdiction.
7.14 Flow of Funds Between Portfolio Entities.
(a) On or prior to the Closing Date each of the Project Owners
with respect to the Initial Projects, each of the Turbine Owners with respect to
the Turbines assigned to the Initial Projects (as set forth on Exhibit G-3) and
each Equipment Finance Company (to the extent in existence on the Closing Date)
(in each case, other than such Persons with respect to the Delta Energy Center
Project) shall execute and deliver to Development Company or CCFC II Equipment
Finance Company, as the case may be, a Portfolio Entity Note and, to the extent
not executed and delivered pursuant to the foregoing, on or prior to the initial
funding of Construction Loans in respect of each Funded Project and Turbine
Purchase Loans in respect of each Funded Turbine, the relevant Project Owner,
Turbine Owner, or Equipment Finance Company, as the case may be, shall execute
and deliver to Development Company or CCFC II Equipment Finance Company, as
applicable, a Portfolio Entity Note. On or prior to the Closing Date Development
Company and CCFC II Equipment Finance Company shall execute and deliver to
Borrower a Portfolio Entity Note. The Portfolio Entity Notes which, in
accordance with this Agreement, shall be pledged by Borrower, Development
Company and CCFC II Equipment Finance Company to Administrative Agent pursuant
to the Borrower Security Agreement, the Development Company Security Agreement
and the CCFC II Equipment Finance Company Security Agreement, respectively,
shall evidence the loans made by Borrower to Development Company and CCFC II
Equipment Finance Company, respectively, and CCFC II Equipment Finance Company
and Development Company to the other Portfolio Entities, respectively, in
accordance with Section 7.14(b). In the event that (i) the ownership of a Funded
Turbine or a Turbine assigned to an Initial Project or a Funded Subsequent
Project is transferred from a Turbine Owner to an Equipment Finance Company or
from a Turbine Owner or an Equipment Finance Company to the relevant Project
Owner, (ii) the ownership of a Turbine Owner or an Equipment Finance Company is
transferred from Development Company to CCFC II Equipment Finance Company, or
vice versa, or (iii) the ownership of an Equipment Finance
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Company, a Turbine Owner or a Project Owner is transferred from Development
Company or CCFC II Equipment Finance Company to Borrower or CCFC II Equipment
Finance Holdings Company, the Portfolio Entity Note executed by the Portfolio
Entity whose ownership or assets are transferred may likewise be transferred to
the direct or indirect parent of the Portfolio Entity to whom such assets or
ownership is transferred, subject in all cases to the pledge of such Portfolio
Entity Notes in favor of Administrative Agent, such that the Portfolio Entity
Note executed by each Portfolio Entity shall run to the benefit of the parent of
such Portfolio Entity after giving effect to such transfer. In connection with
any such transfer, Borrower and each relevant Portfolio Entity shall execute and
deliver such amendments to the Collateral Documents or additional Collateral
Documents as the Technical Committee considers necessary to preserve the Banks'
Lien on the Portfolio Entity Notes and any related Collateral.
(b) All proceeds of Loans, Contributions and any other amounts
utilized by Borrower with respect to the Projects or the Turbines in accordance
with this Agreement, including amounts disbursed from the Accounts in accordance
with this Article 7, shall constitute, depending on the purpose for which such
payments or other distributions are made, either (i) consecutive loans
consisting first of a loan by Borrower to Development Company and then a loan by
Development Company to the relevant Project Owner, Turbine Owner or Equipment
Finance Company or (ii) consecutive loans consisting first of a loan by Borrower
to CCFC II Equipment Finance Company (or CCFC II Equipment Finance Holdings
Company, if applicable) and then a loan by CCFC II Equipment Finance Company (or
CCFC II Equipment Finance Holdings Company, if applicable) to the relevant
Turbine Owner or Equipment Finance Company, in each case such loans to be
evidenced by the relevant Portfolio Entity Notes as set forth in Section 7.14(a)
above.
(c) Borrower shall use its good faith reasonable efforts to
cause all Project Revenues, Insurance Proceeds, Eminent Domain Proceeds, damage
payments (including delay or performance liquidated damage payments) and any
other amounts due any Portfolio Entity to be paid or otherwise delivered by such
Persons making such payment or delivery directly to Borrower for deposit in the
Accounts as required pursuant to this Agreement. Upon the receipt of such
amounts by Borrower, such amounts shall be deemed consecutive repayments of
amounts due and owing first from the relevant Portfolio Entity to Development
Company or CCFC II Equipment Finance Company (or a subsequent holder of the
Portfolio Entity Note, if applicable), as the case may be, and then from
Development Company or CCFC II Equipment Finance Company (or a subsequent holder
of the Portfolio Entity Note, if applicable), as the case may be, to Borrower,
in each case under the corresponding Portfolio Entity Note; provided, to the
extent no amounts are due and owing under such Portfolio Entity Notes such
amounts shall be deemed distributions to Development Company, CCFC II Equipment
Finance Company, CCFC II Equipment Finance Holdings Company, or Borrower, as the
case may be, with respect to its ownership interest in the Portfolio Entity
making such distribution.
(d) If any amounts described in Sections 7.14(b) and (c) above
are paid directly to or received directly by any Portfolio Entity, such amounts
shall be received only in trust for Administrative Agent, shall be segregated
from other funds of such Portfolio Entities, and Borrower shall cause such
amounts to be forthwith paid over to (i) in the case of clause (b) above, the
Person to which such amounts are due and owing and (ii) in the case of clause
(c)
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above, Administrative Agent for application in accordance with this Agreement,
in each case in the same form as received (with any necessary endorsement).
(e) Other than with respect to the Operating Accounts held by
the relevant Portfolio Entities, no Portfolio Entity, other than Borrower, shall
have any right, power or interest with respect to the Accounts, Sub-Accounts and
contents of Accounts and Sub-Accounts and no such Portfolio Entity shall hold
funds in any accounts.
ARTICLE 8.
EVENTS OF DEFAULT; REMEDIES
8.1 Events of Default. The occurrence of any of the following events shall
constitute an event of default ("Events of Default") hereunder:
8.1.1 Failure to Make Payments. Borrower shall fail to pay, in
accordance with the terms of this Agreement, (a) any principal on any Loan, or
any Reimbursement Obligation, on the date that such sum is due, (b) any interest
on any Loan or on any Reimbursement Obligation or any scheduled fee, cost,
charge or sum due hereunder or under the other Credit Documents, within three
days after the date that such sum is due, or (c) any other fee, cost, charge or
other sum due under this Agreement within five days after written notice that
such sum is due and has not been paid.
8.1.2 Judgments. A final judgment or judgments shall be entered against
(i) Calpine in the amount of $25,000,000 or more individually or in the
aggregate or (ii) any Portfolio Entity or the Member in the amount of $1,000,000
or more individually or in the aggregate (other than, in the case of both
clauses (i) and (ii) above, (a) a judgment which is fully covered by insurance
or discharged within 30 days after its entry, or (b) a judgment, the execution
of which is effectively stayed within 30 days after its entry but only for 30
days after the date on which such stay is terminated or expires) or, in the case
of both clauses (i) and (ii) above, which if left unstayed could reasonably be
expected to have a Material Adverse Effect on Borrower.
8.1.3 Misstatements; Omissions. Any financial statement,
representation, warranty or certificate made or prepared by, under the control
of or on behalf of any Portfolio Entity and furnished to Administrative Agent,
the Lead Arrangers, the Technical Committee or any Bank pursuant to this
Agreement, or in any separate statement or document to be delivered to
Administrative Agent or any Bank hereunder or under any other Credit Document,
shall contain an untrue or misleading statement of a material fact or shall fail
to state a material fact necessary to make the statements therein not misleading
as of the date made, in either case, which could reasonably be expected to
result in a Material Adverse Effect on Borrower.
8.1.4 Bankruptcy; Insolvency. Any of the Portfolio Entities, the
Member, Calpine, any Construction Manager (so long as such Construction Manager
has outstanding or unperformed obligations under any Construction Management
Agreement), any Operator, any Project Manager, any Joint Venturer, Power
Marketer or any other purchaser of capacity or energy from a Project (so long as
Power Marketer or such other purchaser, as the case may be, has outstanding or
unperformed obligations under the Power Purchase Documents to which it is
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party and such party's Bankruptcy Event could reasonably be expected to have a
Material Adverse Effect on Borrower), any Fuel Supplier (so long as such party's
Bankruptcy Event could reasonably be expected to have a Material Adverse Effect
on Borrower) or any Turbine Purchase Contractor, Major Contractor, Major Gas
Transporter or counterparty to any electrical transmission or interconnection
agreement or material water supply agreement (so long as such Turbine Purchase
Contractor, Major Contractor, Major Gas Transporter or counterparty has
outstanding or unperformed obligations under the Turbine Purchase Contract,
Major Construction Contract, Major Gas Transportation Agreement or other
agreement to which it is a party and such party's Bankruptcy Event could
reasonably be expected to have a Material Adverse Effect on Borrower) shall
become subject to a Bankruptcy Event; provided that, solely with respect to a
Bankruptcy Event affecting any entity other than the Portfolio Entities, the
Member and Calpine, no Event of Default shall occur as a result of such
Bankruptcy Event if the applicable Portfolio Entity obtains a Replacement
Obligor (or, in the case of the occurrence of a Bankruptcy Event with respect to
a Joint Venturer, if such Portfolio Entity or another Person acquired such
Person's interest in such Project or Turbine, as the case may be) for the
affected party within 90 days thereafter and such Bankruptcy Event has not had
and does not have prior to so obtaining such Replacement Obligor (or purchaser
of the Joint Venturer's interest), a Material Adverse Effect on Borrower.
8.1.5 Debt Cross Default. Except with respect to debt evidenced by the
Portfolio Entity Notes, any Portfolio Entity, Calpine or any other Calpine
Affiliate other than a Calpine Sole Purpose Entity shall default for a period
beyond any applicable grace period (a) in the payment of any principal, interest
or other amount due under any agreement involving the borrowing of money or the
advance of credit and the outstanding amount or amounts payable under all such
agreements equals or exceeds $1,000,000 in the aggregate (or, in the case of
Calpine only, $10,000,000 in the aggregate), or (b) in the payment of any amount
or performance of any obligation due under any guarantee or other agreement if
in either case, pursuant to such default, the holder of the obligation concerned
has the right to accelerate the maturity of an indebtedness evidenced thereby
which equals or exceeds $1,000,000 (or, in the case of Calpine only, $10,000,000
in the aggregate). For purposes of this Section, the term "Calpine Sole Purpose
Entity" shall mean a Calpine Affiliate (i) whose sole purpose is the ownership
and maintenance of a power project (other than a Project) that has been financed
on a non-recourse basis and (ii) that is not directly connected to a Project or
responsible for actions materially and directly affecting a Project.
8.1.6 ERISA. If any Portfolio Entity or any member of the Controlled
Group should establish, maintain, contribute to or become obligated to
contribute to any ERISA Plan and (a) a reportable event (under Section 4043(b)
or (c) of ERISA for which notice to the PBGC is not waived) shall have occurred
with respect to any ERISA Plan and, within 30 days after the reporting of such
reportable event to Administrative Agent by Borrower (or Administrative Agent
otherwise obtaining knowledge of such event) and the furnishing of such
information as Administrative Agent may reasonably request with respect thereto,
Administrative Agent shall have notified Borrower in writing that (i)
Administrative Agent has made a determination that, on the basis of such
reportable event, there are reasonable grounds for the termination of such ERISA
Plan by the PBGC or for the appointment by the appropriate United States
District Court of a trustee to administer such ERISA Plan and (ii) as a result
thereof, an Event of Default exists hereunder; or (b) a trustee shall be
appointed by a United States District Court to administer any
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ERISA Plan; or (c) the PBGC shall institute proceedings to terminate any ERISA
Plan; or (d) a complete or partial withdrawal by any Portfolio Entity or any
member of the Controlled Group from any Multiemployer Plan shall have occurred,
or any Multiemployer Plan shall enter reorganization status, become insolvent,
or terminate (or notify Borrower or any member of the Controlled Group of its
intent to terminate) under Section 4041A of ERISA and, within 30 days after the
reporting of any such occurrence to Administrative Agent by Borrower (or
Administrative Agent otherwise obtaining knowledge of such event) and the
furnishing of such information as Administrative Agent may reasonably request
with respect thereto, Administrative Agent shall have notified Borrower in
writing that Administrative Agent has made a determination that, on the basis of
such occurrence, an Event of Default exists hereunder; provided that any of the
events described in this Section 8.1.6 shall involve (A) one or more ERISA Plans
that are single-employer plans (as defined in Section 4001(a)(15) of ERISA) and
under which the aggregate gross amount of unfunded benefit liabilities (as
defined in Section 4001(a)(16) of ERISA), including vested unfunded liabilities
which arise or might arise as the result of the termination of such ERISA Plans,
and/or (B) one or more Multiemployer Plans to which the aggregate liabilities of
the Portfolio Entity and all members of the Controlled Group, shall exceed
$1,000,000.
8.1.7 Breach of Terms of Agreement.
(a) Borrower or the relevant Project Owner under its
respective Project Owner Guaranty shall fail to perform or observe any of the
covenants (in the case of the relevant Project Owner, as if such covenants were
fully set forth and incorporated in its respective Project Owner Guaranty) set
forth in Section 5.1, 5.9(a), 5.9(g), 5.10, 5.11, 5.17, 5.18, 5.24, or Article 6
(other than Section 6.7, 6.8, 6.14, 6.15, 6.20, 6.23 or 6.24).
(b) Borrower or the relevant Project Owner under its
respective Project Owner Guaranty shall fail to perform or observe any of the
covenants (in the case of the relevant Project Owner, as if such covenants were
fully set forth and incorporated in its respective Project Owner Guaranty) set
forth in Section 5.4 (unless the event with respect to which notice is required
to be given relates to one or more specific Projects), 5.5 (unless the party
whose financial statements were not properly delivered is not a Calpine
Affiliate), 5.6 (unless the books, accounts or records in question specifically
relate to one or more Projects), 5.7 (unless the failure to comply with the
Legal Requirement in question specifically relates to one or more Projects),
5.12, 5.16.2, 5.16.4, 5.19, 5.20, 5.24, 6.7, 6.8, 6.15, 6.19, or any other
covenant to be observed or performed by it hereunder or any other Credit
Document not otherwise specifically provided for in Section 8.1.7(a), elsewhere
in this Article 8 or in the definition of the term "Non-Fundamental Project
Default" and such failure shall continue unremedied for a period of 30 days
after Borrower becomes aware thereof or receives written notice thereof from
Administrative Agent provided, however, that, if (i) such failure cannot be
cured within such 30 day period, (ii) such failure is susceptible of cure, (iii)
a Portfolio Entity is proceeding with diligence and in good faith to cure such
failure, (iv) the existence of such failure has not had and cannot after
considering the nature of the cure be reasonably expected to have a Material
Adverse Effect on Borrower and (v) Administrative Agent shall have received an
officer's certificate signed by a Responsible Officer of Borrower to the effect
of clauses (i), (ii), (iii) and (iv) above and stating what action the relevant
Portfolio Entity is taking to cure such failure, then such 30 day cure
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period shall be extended to such date, not to exceed a total of 90 days, as
shall be necessary for such Portfolio Entity diligently to cure such failure.
(c) Any Non-Affiliated Parent, Portfolio Entity, the Member or
Calpine shall be in breach of, or in default under, its respective Pledge
Agreement (Pledged Equity Interests), Project/Turbine Owner Security Agreement ,
CCFC II Equipment Finance Company Security Agreement, Equipment Finance Company
Security Agreement, Development Company Security Agreement or any other Credit
Document to which it is a party and such failure shall continue unremedied for a
period of 30 days after any such Person becomes aware thereof or receives
written notice thereof from Administrative Agent provided, however, that, if (i)
such failure cannot be cured within such 30 day period, (ii) such failure is
susceptible of cure, (iii) such Person is proceeding with diligence and in good
faith to cure such failure, (iv) the existence of such failure has not had and
cannot after considering the nature of the cure be reasonably expected to have a
Material Adverse Effect on Borrower and (v) Administrative Agent shall have
received an officer's certificate signed by a Responsible Officer of the
relevant Person to the effect of clauses (i), (ii), (iii) and (iv) above and
stating what action the relevant Person is taking to cure such failure, then
such 30 day cure period shall be extended to such date, not to exceed a total of
90 days, as shall be necessary for such Person diligently to cure such failure.
(d) Calpine shall be in breach of, or in default under, the
Project Completion Guaranty or the Turbine Purchase Guaranty.
8.1.8 Loss of Qualifying Facility or Eligible Facility Status.
(a) If loss of Qualifying Facility or Eligible Facility status
of a Project could reasonably be expected to have a Material Adverse Effect on
Borrower (i) FERC shall have issued an order determining that any Project has
ceased to be a Qualifying Facility or Eligible Facility, as the case may be, or
(ii) any Project shall have failed to meet the criteria for a Qualifying
Facility or Eligible Facility, as the case may be, and, subject to cure rights
equivalent to those set forth in clause (a)(i) of the definition of
"Non-Fundamental Project Default", shall have failed to obtain a waiver from
FERC on account thereof within six months after the end of any calendar year in
which Borrower knows or should reasonably have known that it has failed to meet
such criteria.
(b) Any Portfolio Entity or the Member shall lose the
exemption from regulation under PUHCA.
8.1.9 Abandonment.
(a) At any time prior to the Completion of any Initial Project
(except an Initial Project that has been replaced by a Substituted Initial
Project) or Funded Subsequent Project, a Portfolio Entity shall announce that it
is abandoning such Project or such Project shall be abandoned or work thereon
shall cease for a period of more than 30 consecutive days for any reason (which
period (i) shall be measured from the first occurrence of a work stoppage and
continuing until work of a substantial nature is resumed and thereafter
diligently continued, and (ii) shall not include delays caused by any event of
"force majeure" (as defined in the relevant Project Document) or default by a
Major Project Participant (other than a Portfolio Entity or its
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Affiliates) under the Construction Contracts) or any Project shall not be
constructed substantially in accordance with the Plans and Specifications
(except as to changes therein approved by Administrative Agent).
(b) At any time following the Completion of any Initial
Project or Funded Subsequent Project, a Portfolio Entity shall announce that it
is abandoning such Project or such Project shall be abandoned or operation
thereof shall cease for a period of more than 30 consecutive days for any reason
(other than force majeure).
8.1.10 Security. Any of the Collateral Documents, once executed and
delivered, shall, except as the result of the acts or omissions of
Administrative Agent or the Banks, fail to provide the Banks the Liens, first
priority security interest, rights, titles, interest, remedies permitted by law,
powers or privileges intended to be created thereby or cease to be in full force
and effect with respect to Collateral relating to the Initial Projects, the
Funded Subsequent Projects and the Turbines assigned to the Initial Projects (as
set forth in Exhibit G-3) and the Funded Turbines, or the first priority or
validity thereof or the applicability thereof to the Loans, the Notes, the
Reimbursement Obligations or any other obligations purported to be secured or
guaranteed thereby or any part thereof shall be disaffirmed by or on behalf of
Calpine, the Member or any Portfolio Entity.
8.1.11 Loss of Control. (a) Calpine shall cease to indirectly own 100%
of the ownership interests in Borrower, (b) the Member shall cease to directly
own 100% of the membership interests in the Borrower, (c) except for (i)
Designated Projects, (ii) Project Owners approved pursuant to Section 3.3 which
are at least directly or indirectly 50% owned by Borrower, and (iii) as
otherwise permitted pursuant to Section 6.4.2, Borrower shall cease to directly
own 100% of the ownership interests in each of the other Portfolio Entities, or
(c) except for (i) Projects approved pursuant to Section 3.3 which are at least
50% owned by a Project Owner, or (ii) as otherwise permitted pursuant to Section
6.4.2, a Project Owner shall cease to directly own or, with respect to Turbines
and other equipment leased pursuant to Equipment Leases, lease 100% of its
respective Project.
8.1.12 Loss of or Failure to Obtain Applicable Permits or Applicable
Third Party Permits.
(a) The relevant Portfolio Entity shall fail to obtain any
Permit on or before the date that such Permit becomes an Applicable Permit with
respect to an Initial Project or a Funded Subsequent Project, or any Major
Project Participant shall fail to obtain any Permit on or before the date that
such Permit becomes an Applicable Third Party Permit with respect to an Initial
Project or a Funded Subsequent Project, and such failure could reasonably be
expected to have a Material Adverse Effect on Borrower or the Projects, taken as
a whole.
(b) Any Applicable Permit necessary for operation of any
Initial Project or Funded Subsequent Project shall be materially modified (other
than modifications contemplated in a Project Document requested by a Portfolio
Entity and approved in writing in advance of such modification by Administrative
Agent acting at the direction of the Required Banks which approval shall not be
unreasonably withheld), revoked, canceled or not renewed by the issuing agency
or other Governmental Authority having jurisdiction and within 30 days
thereafter
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Borrower is not able to demonstrate to the reasonable satisfaction of the
Required Banks that such modification or loss of such Permit reasonably could
not be expected to have a Material Adverse Effect on Borrower.
(c) Any Third Party Permit necessary for performance by the
applicable Major Project Participant with respect to an Initial Project or a
Funded Subsequent Project, shall be materially modified, revoked, canceled or
not renewed by the issuing agency or other Governmental Authority having
jurisdiction and within 90 days thereafter (i) Borrower is not able to
demonstrate to the reasonable satisfaction of the Required Banks that such
modification or loss of such Third Party Permit will not have a Material Adverse
Effect on Borrower or (ii) a Portfolio Entity is not able to obtain a
Replacement Obligor for such Major Project Participant, where prior to a
Portfolio Entity obtaining such Replacement Obligor such breach or default has
not had and could not reasonably be expected to have, a Material Adverse Effect
on Borrower.
8.1.13 Loss of Collateral. Any substantial portion of any Portfolio
Entity's property relating to an Initial Project, Funded Subsequent Project or
Turbine is seized or appropriated without fair value being paid therefor so as
to allow replacement of such property and/or prepayment of Loans and to allow
the Portfolio Entities in Administrative Agent's reasonable judgment to continue
satisfying its obligations hereunder and under the other Operative Documents.
8.1.14 Non-Fundamental Defaults. A Non-Fundamental Project Default has
occurred, is continuing, and could reasonably be expected to have a Material
Adverse Effect with respect to Borrower.
8.2 Remedies. Upon the occurrence and during the continuation of an Event
of Default, but subject to Section 1(a) of the Project Completion Guaranty,
Administrative Agent, LC Bank and the Banks may, at the election of the Required
Banks, without further notice of default, presentment or demand for payment,
protest or notice of non-payment or dishonor, or other notices or demands of any
kind, all such notices and demands being waived, exercise any or all of the
following rights and remedies, in any combination or order that the Required
Banks may elect, in addition to such other rights or remedies as the Banks may
have hereunder, including without limitation, such rights and remedies under
Section 5.17.3, under the Collateral Documents or at law or in equity:
8.2.1 No Further Loans or Letters of Credit. Cancel all commitments,
refuse, and Administrative Agent, LC Bank and the Banks shall not be obligated,
to continue any Loans, make any additional Loans, issue, renew, extend or
increase the Stated Amount of any Letter of Credit, or make any payments, or
permit the making of payments, from any Account or any Proceeds or other funds
held by Administrative Agent under the Credit Documents or on behalf of
Borrower.
8.2.2 Cash Collateralization of Letters of Credit. Maintain in the
Accounts for payment of any Reimbursement Obligations or interest thereon
arising in connection with any outstanding Letter of Credit an amount of cash
equal to the Stated Amount of each such Letter of Credit (plus accrued interest
on the amounts in such Accounts).
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8.2.3 Prepayment of Loans. Cause the Loans to be prepaid as set forth
in Section 7.2.4.
8.2.4 Cure by Administrative Agent. Without any obligation to do so,
make disbursements or Loans to or on behalf of Borrower to cure any Event of
Default hereunder and to cure any default and render any performance under any
Project Documents or Turbine Purchase Contracts as the Required Banks in their
sole discretion may consider necessary or appropriate, whether to preserve and
protect the Collateral or the Banks' interests therein or for any other reason,
and all sums so expended, together with interest on such total amount at the
Default Rate (but in no event shall the rate exceed the maximum lawful rate),
shall be repaid by Borrower to Administrative Agent on demand and shall be
secured by the Credit Documents, notwithstanding that such expenditures may,
together with amounts advanced under this Agreement, exceed the aggregate amount
of the Total Loan Commitment, Total Turbine Purchase Loan Commitment and Total
Letter of Credit Commitment.
8.2.5 Acceleration. Declare and make all sums of accrued and
outstanding principal and accrued but unpaid interest remaining under this
Agreement together with all unpaid fees, costs (including Liquidation Costs and
charges due hereunder or under any other Credit Document), immediately due and
payable and require Borrower immediately, without presentment, demand, protest
or other notice of any kind, all of which Borrower hereby expressly waives, to
pay Administrative Agent or the Banks an amount in immediately available funds
equal to the aggregate amount of any outstanding Reimbursement Obligations,
provided that in the event of an Event of Default occurring under Section 8.1.4
with respect to Borrower, all such amounts shall become immediately due and
payable without further act of Administrative Agent or the Banks.
8.2.6 Cash Collateral. Apply or execute upon any amounts on deposit in
any Account or any Proceeds or any other monies of Borrower on deposit with
Administrative Agent or any Bank in the manner provided in the Uniform
Commercial Code and other relevant statutes and decisions and interpretations
thereunder with respect to cash collateral.
8.2.7 Possession of Projects and Turbines. Enter into possession of any
Project or Turbine and perform any and all work and labor necessary to complete
such Project or Turbine substantially according to the Plans and Specifications
or to operate and maintain such Project or Turbine, and all sums expended by
Administrative Agent in so doing, together with interest on such total amount at
the Default Rate, shall be repaid by Borrower to Administrative Agent upon
demand and shall be secured by the Credit Documents to the extent provided
herein, notwithstanding that such expenditures may, together with amounts
advanced under this Agreement, exceed the aggregate amount of the Total Loan
Commitment, Total Turbine Purchase Loan Commitment and Total Letter of Credit
Commitment.
8.2.8 Remedies Under Credit Documents. Exercise any and all rights and
remedies available to it under any of the Credit Documents, including judicial
or non-judicial foreclosure or public or private sale of any of the Collateral
pursuant to the Collateral Documents.
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ARTICLE 9.
SCOPE OF LIABILITY
Except as set forth in this Article 9, notwithstanding anything in the
Credit Agreement or the other Credit Documents to the contrary, the Banks shall
have no claims with respect to the transactions contemplated by the Operative
Documents against the Portfolio Entities, the Member, Calpine or any of their
respective Affiliates (other than the Portfolio Entities), shareholders,
officers, directors or employees (collectively the "Nonrecourse Persons"), and
the Banks' recourse against the Portfolio Entities shall be limited to the
Collateral, the Projects, the Turbines and the equipment and assets owned by the
Equipment Finance Companies (and all portions thereof and rights or
appurtenances thereto), all Project Revenues, all Proceeds, and all income or
revenues of the foregoing as and to the extent provided herein and in the
Collateral Documents; provided that (a) the foregoing provision of this Article
9 shall not constitute a waiver, release or discharge of any of the
indebtedness, or of any of the terms, covenants, conditions, or provisions of
this Agreement, any other Security Document or Credit Document and the same
shall continue (but without personal liability to the Nonrecourse Person or to
the Portfolio Entities except as provided herein and therein) until fully paid,
discharged, observed, or performed; (b) the foregoing provision of this Article
9 shall not limit or restrict the right of Administrative Agent and/or the Banks
(or any assignee, beneficiary or successor to any of them) to name the Portfolio
Entities or any other Person as a defendant in any action or suit for a judicial
foreclosure or for the exercise of any other remedy under or with respect to
this Agreement or any other Security Document or Credit Document, or for
injunction or specific performance, so long as no judgment in the nature of a
deficiency judgment shall be enforced against any Nonrecourse Person, and
recourse to the Portfolio Entities shall be limited as provided above, except as
set forth in this Article 9, (c) the foregoing provision of this Article 9 shall
not in any way limit or restrict any right or remedy of Administrative Agent
and/or the Banks (or any assignee or beneficiary thereof or successor thereto)
with respect to, and each of the Nonrecourse Persons and the Portfolio Entities
shall remain fully liable to the extent that it would otherwise be liable for
its own actions with respect to, any fraud (which shall not include innocent or
negligent misrepresentation), willful misrepresentation, or misappropriation of
Project Revenues, Proceeds or any other earnings, revenues, rents, issues,
profits or proceeds from or of the Collateral that should or would have been
paid as provided herein or paid or delivered to Administrative Agent or any Bank
(or any assignee or beneficiary thereof or successor thereto) towards any
payment required under this Agreement or any other Credit Document; (d) the
foregoing provision of this Article 9 shall not affect or diminish or constitute
a waiver, release or discharge of any specific written obligation, covenant, or
agreement in respect of any Project or Turbine made by any of the Nonrecourse
Persons or any security granted by the Nonrecourse Persons in support of the
obligations of such persons under any Equity Document or as security for the
obligations of the Portfolio Entities; and (e) nothing contained herein shall
limit the liability of (i) any Person who is a party to any Project Document or
Turbine Purchase Contract or has issued any certificate or other statement in
connection therewith with respect to such liability as may arise by reason of
the terms and conditions of such Project Document or Turbine Purchase Contract
(but subject to any limitation of liability in such Project Document or Turbine
Purchase Contract), certificate or statement, or (ii) any Person rendering a
legal opinion pursuant to this Agreement, in each case under this clause (e)
relating solely to such liability of such Person as may arise under such
referenced agreement, instrument or opinion. The limitations on recourse set
forth in this Article 9 shall survive the termination of this Agreement
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and the full payment and performance of the Obligations hereunder and under the
other Operative Documents.
ARTICLE 10.
ADMINISTRATIVE AGENT; SUBSTITUTION; TECHNICAL COMMITTEE
10.1 Appointment, Powers and Immunities.
10.1.1 Each Bank hereby appoints and authorizes Administrative Agent to
act as its agent hereunder and under the other Credit Documents with such powers
as are expressly delegated to Administrative Agent by the terms of this
Agreement and the other Credit Documents, together with such other powers as are
reasonably incidental thereto. Administrative Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in any
other Credit Document, or be a trustee or a fiduciary for any Bank.
Notwithstanding anything to the contrary contained herein Administrative Agent
shall not be required to take any action which is contrary to this Agreement or
any other Credit Documents or any Legal Requirement or exposes Administrative
Agent to any liability. Each of Administrative Agent, the Banks and any of their
respective Affiliates shall not be responsible to any other Bank for any
recitals, statements, representations or warranties made by the Member, any
Portfolio Entity or its Affiliates contained in this Agreement or in any
certificate or other document referred to or provided for in, or received by
Administrative Agent, or any Bank under this Agreement, for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, the
Notes or any other document referred to or provided for herein or for any
failure by the Member, any Portfolio Entity or its Affiliates to perform their
respective obligations hereunder or thereunder. Administrative Agent may employ
agents and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care.
10.1.2 Administrative Agent and its respective directors, officers,
employees or agents shall not be responsible for any action taken or omitted to
be taken by it or them hereunder or under any other Credit Document or in
connection herewith or therewith, except for its or their own gross negligence
or willful misconduct. Without limiting the generality of the foregoing,
Administrative Agent (a) may treat the payee of any Note as the holder thereof
until Administrative Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form satisfactory to Administrative Agent;
(b) may consult with legal counsel, independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by them in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Bank for
any statements, warranties or representations made in or in connection with any
Project Document, Turbine Purchase Contract or Credit Document; (d) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of any Operative Document on the part
of any party thereto or to inspect the property (including the books and
records) of any Portfolio Entity or any other Person; and (e) shall not be
responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Operative Document or
any other instrument or document furnished pursuant hereto. Except as otherwise
provided under this Agreement, Administrative Agent shall take such action with
respect to the Credit Documents as shall be directed by the Required Banks.
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10.2 Reliance by Administrative Agent. Administrative Agent shall be
entitled to rely upon any certificate, notice or other document (including any
cable, telegram, telecopy or telex) believed by it to be genuine and correct and
to have been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel, independent accountants and other
experts selected by Administrative Agent. As to any other matters not expressly
provided for by this Agreement, Administrative Agent shall not be required to
take any action or exercise any discretion, but shall be required to act or to
refrain from acting upon instructions of the Required Banks or, where expressly
provided, the Required Banks (except that Administrative Agent shall not be
required to take any action which exposes Administrative Agent to personal
liability or which is contrary to this Agreement, any other Credit Document or
any Legal Requirement) and shall in all cases be fully protected in acting, or
in refraining from acting, hereunder or under any other Credit Document in
accordance with the instructions of the Required Banks (or, where so expressly
stated, the Required Banks), and such instructions of the Required Banks (or
Required Banks, where applicable) and any action taken or failure to act
pursuant thereto shall be binding on all of the Banks.
10.3 Non-Reliance. Each Bank represents that it has, independently and
without reliance on Administrative Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of the financial condition and affairs of the Portfolio Entities and decision to
enter into this Agreement and agrees that it will, independently and without
reliance upon Administrative Agent, or any other Bank, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own appraisals and decisions in taking or not taking action under this
Agreement. Each of Administrative Agent and any Bank shall not be required to
keep informed as to the performance or observance by the Member, any Portfolio
Entity or its Affiliates under this Agreement or any other document referred to
or provided for herein or to make inquiry of, or to inspect the properties or
books of the Member, any Portfolio Entity or its Affiliates.
10.4 Defaults. Administrative Agent shall not be deemed to have knowledge
or notice of the occurrence of any Inchoate Default, Event of Default,
Non-Fundamental Project Default or Non-Fundamental Project Inchoate Default
unless Administrative Agent has received a notice from a Bank or Borrower,
referring to this Agreement, describing such Inchoate Default, Event of Default,
Non-Fundamental Project Default or Non-Fundamental Project Inchoate Default and
indicating that such notice is a notice of default. If Administrative Agent
receives such a notice of the occurrence of an Inchoate Default, Event of
Default, Non-Fundamental Project Default or Non-Fundamental Project Inchoate
Default Administrative Agent shall give notice thereof to the Banks and
Borrower. Administrative Agent shall take such action with respect to any
Inchoate Default or Event of Default as is provided in Article 8 or if not
provided for in Article 8, as Administrative Agent shall be reasonably directed
by the Required Banks; provided, however, unless and until Administrative Agent
shall have received such directions, Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Inchoate Default or Event of Default as it shall deem advisable in the
best interest of the Banks.
10.5 Indemnification. Without limiting the Obligations of Borrower
hereunder, each Bank agrees to indemnify Administrative Agent and its officers,
directors, shareholders, controlling persons, employees, agents and servants,
ratably in accordance with their
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Proportionate Shares for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may at any time be imposed on, incurred by or
asserted against Administrative Agent or any such Person in any way relating to
or arising out of this Agreement or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or the
enforcement of any of the terms hereof or thereof or of any such other
documents; provided, however, that no Bank shall be liable for any of the
foregoing to the extent they arise from Administrative Agent's or any such
Person's gross negligence or willful misconduct. Administrative Agent of any
such Person shall be fully justified in refusing to take or to continue to take
any action hereunder unless it shall first be indemnified to its satisfaction by
the Banks against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. Without limitation of
the foregoing, each Bank agrees to reimburse Administrative Agent and any such
Person promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by Administrative Agent or any such Person in
connection with the preparation, execution, administration or enforcement of, or
legal advice in respect of rights or responsibilities under, the Operative
Documents, to the extent that Administrative Agent or any such Person is not
reimbursed for such expenses by Borrower.
10.6 Successor Administrative Agent. Administrative Agent acknowledges
that its current intention is to remain Administrative Agent hereunder.
Nevertheless, Administrative Agent may resign at any time by giving written
notice thereof to the Banks and Borrower. Administrative Agent may be removed
involuntarily only for a material breach of its duties and obligations hereunder
or under the other Credit Documents or for gross negligence or willful
misconduct in connection with the performance of its duties hereunder or under
the other Credit Documents and then only upon the affirmative vote of the
Required Banks (excluding Administrative Agent from such vote and Administrative
Agent's Proportionate Share of the Commitment from the amounts used to determine
the portion of the Commitment necessary to constitute the required Proportionate
Share of the remaining Banks). Upon any such resignation or removal, the
Required Banks shall have the right, with the consent of Borrower (such consent
not to be unreasonably withheld or delayed) to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Required Banks, and shall have accepted such appointment,
within 30 days after the retiring Administrative Agent's giving of notice of
resignation or the Banks' removal of the retiring Administrative Agent, the
retiring Administrative Agent may, on behalf of the Banks, with the consent of
Borrower (such consent not to be unreasonably withheld or delayed), appoint a
successor Administrative Agent, which shall be a Bank, if any Bank shall be
willing to serve, and otherwise shall be a commercial bank having a combined
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Administrative Agent under the Operative Documents by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
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 as Administrative Agent only
under the Credit Documents. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of this
Article 10 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under the Operative Documents.
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10.7 Authorization. Administrative Agent is hereby authorized by the Banks
to execute, deliver and perform each of the Credit Documents to which
Administrative Agent is or is intended to be a party and each Bank agrees to be
bound by all of the agreements of Administrative Agent contained in the Credit
Documents. Administrative Agent is further authorized by the Banks to release
liens on property that the Portfolio Entities permitted to sell or transfer
pursuant to the terms of this Agreement, the other Credit Documents or the
Operative Documents, and to enter into agreements supplemental hereto for the
purpose of curing any formal defect, inconsistency, omission or ambiguity in
this Agreement or any Credit Document to which it is a party.
10.8 Administrative Agent, Technical Committee, Bookrunner, Arrangers,
Co-Syndication Agents and Co-Documentation Agents. With respect to its
Commitment, the Loans made by it and any Note issued to it, each of the
financial institutions acting as Administrative Agent or as members of the
Technical Committee shall have the same rights and powers under the Operative
Documents as any other Bank and may exercise the same as though it were not
Administrative Agent or a member of the Technical Committee, as the case may be.
The term "Bank" or "Banks" shall, unless otherwise expressly indicated, include
Administrative Agent and members of the Technical Committee, in each case in
their individual capacity. The financial institutions acting as Administrative
Agent and members of the Technical Committee and their Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with Borrower or any other Person, without any
duty to account therefor to the Banks. The parties acknowledge and agree that
the Bookrunner, Arrangers, Co-Syndication Agents and the Co-Documentation Agents
shall not, in such capacities (but not in their capacities as Banks), have any
rights, responsibilities, duties, obligations (including any fiduciary
obligations) or liability hereunder.
10.9 Amendments; Waivers. Subject to the provisions of this Section 10.9,
unless otherwise specified in this Agreement or another Credit Document, the
Required Banks (or Administrative Agent with the consent in writing of the
Required Banks) and Borrower may enter into agreements supplemental hereto for
the purpose of adding, modifying or waiving any provisions to the Credit
Documents or changing in any manner the rights of the Banks or Borrower
hereunder or waiving any Inchoate Default or Event of Default; provided,
however, that no such supplemental agreement shall, without the consent of all
of the Banks:
(i) Modify Section 2.1.1(d), 2.1.2(d), 2.7, 2.8, 2.9,
5.1, 5.17, 6.17, 6.22, 7.1 through 7.14, 8.1.10, 10.1, 10.13, 10.14 or 10.17;
(ii) Increase the amount of the Commitment of any
Bank hereunder; or
(iii) Reduce the percentage specified in the
definition of Required Banks; or
(iv) Permit Borrower to assign its rights under this
Agreement except as provided in Section 6.17, or permit a transfer of ownership
of a Portfolio Entity, a Project or a Turbine except as provided in Section
8.1.11, or
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(v) Amend this Section 10.9; or
(vi) Release any Collateral from the Lien of any of
the Collateral Documents, except as permitted in Section 6.4, or allow release
of any funds from any Account otherwise than in accordance with the terms
hereof; or
(vii) Extend the maturity of any Loan or any of the
Notes or reduce the principal amount thereof, or reduce the rate or change the
time of payment of interest due on any Loan or any Notes; or
(viii) Extend the Loan Maturity Date; or
(ix) Reduce the amount or extend the payment date for
any amount due under Article 2, whether principal, interest, fees or other
amounts; or
(x) Reduce or change the time of payment of any fee
due or payable hereunder; or
(xi) Terminate the Project Completion Guaranty or the
Turbine Purchase Guaranty except in accordance with its terms; or
(xii) Subordinate the Loans to any other Indebtedness.
Any proposed action to be taken by the Required Banks under the Credit
Documents, including, without limitation, supplemental agreements with Borrower
adding, modifying or waiving any provisions to the Credit Documents or changing
in any manner the rights of the Banks or Borrower hereunder or waiving any
Inchoate Default or Event of Default under this Section 10.9 or Section 3.12,
shall be deemed so taken by the Required Banks unless, after the Banks have
received from Administrative Agent and/or Borrower notice of such proposed
action together with all other documentation and other information reasonably
necessary for the Banks' consideration of such proposed action, Banks having
Proportionate Shares exceeding 33.33% at the time of such notice notify
Administrative Agent of such Banks' disapproval of such proposed action by the
Determination Date.
10.10 Withholding Tax.
10.10.1 Administrative Agent may withhold from any interest payment to
any Bank an amount equivalent to any applicable withholding tax. If the forms or
other documentation required by Section 2.6 are not delivered to Administrative
Agent, then Administrative Agent may withhold from any interest payment to any
Bank not providing such forms or other documentation, an amount equivalent to
the applicable withholding tax.
10.10.2 If the Internal Revenue Service or any authority of the United
States or other jurisdiction asserts a claim that Administrative Agent did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered, was not properly executed, or
because such Bank failed to notify Administrative Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Bank shall indemnify
Administrative
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Agent fully for all amounts paid, directly or indirectly, by Administrative
Agent as tax or otherwise, including penalties and interest, together with all
expenses incurred, including legal expenses, allocated staff costs, and any out
of pocket expenses.
10.10.3 If any Bank sells, assigns, grants participation in, or
otherwise transfers its rights under this Agreement, the purchaser, assignee,
participant or transferee, as applicable, shall comply and be bound by the terms
of Sections 2.6.7, 10.10.1 and 10.10.2 as though it were such Bank.
10.11 General Provisions as to Payments. Administrative Agent shall
promptly distribute to each Bank, subject to the terms of the assignment and
assumption agreement between Administrative Agent and such Bank, its pro rata
share of each payment of principal and interest payable to the Banks on the
Loans and of fees hereunder received by Administrative Agent for the account of
the Banks and of any other amounts owing under the Loans. The payments made for
the account of each Bank shall be made, and distributed to it, for the account
of (a) its domestic lending office in the case of payments of principal of, and
interest on, its Base Rate Loans, (b) its domestic or foreign lending office, as
each Bank may designate in writing to Administrative Agent, in the case of LIBOR
Loans, and (c) its domestic lending office, or such other lending office as it
may designate for the purpose from time to time, in the case of payments of fees
and other amounts payable hereunder. Banks shall have the right to alter
designated domestic lending offices upon notice to Administrative Agent and
Borrower.
10.12 Substitution of Bank. Should any Bank fail to make a Loan in
violation of its obligations under this Agreement (a "Non-Advancing Bank"),
Administrative Agent shall (a) in its sole discretion fund the Loan on behalf of
the Non-Advancing Bank or (b) cooperate with Borrower or any other Bank to find
another Person that shall be acceptable to Administrative Agent and that shall
be willing to assume the Non-Advancing Bank's obligations under this Agreement
(including the obligation to make the Loan which the Non-Advancing Bank failed
to make but without assuming any liability for damages for failing to have made
such Loan or any previously required Loan). Subject to the provisions of the
next following sentence, such Person shall be substituted for the Non-Advancing
Bank hereunder upon execution and delivery to Administrative Agent of an
agreement acceptable to Administrative Agent by such Person assuming the
Non-Advancing Bank's obligations under this Agreement, and all interest and fees
which would otherwise have been payable to the Non-Advancing Bank shall
thereafter be payable to such Person. Nothing in (and no action taken pursuant
to) this Section 10.12 shall relieve the Non-Advancing Bank from any liability
it might have to Borrower or to the other Banks as a result of its failure to
make any Loan.
10.13 Participation.
10.13.1 Nothing herein provided shall prevent any Bank from selling a
participation in one or more of its Commitments (and Loans made and Letters of
Credit issued thereunder); provided that (a) no such sale of a participation
shall alter such Bank's or Borrower's obligations hereunder, (b) any agreement
pursuant to which any Bank may grant a participation in its rights with respect
to its Commitment (Letters of Credit and Loans) shall provide that, with respect
to such Commitment (Letters of Credit and Loans), subject to the following
proviso, such Bank shall retain the sole right and responsibility to exercise
the rights of
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such Bank, and enforce the obligations of Borrower relating to such Commitment
(Letters of Credit and Loans), including the right to approve any amendment,
modification or waiver of any provision of this Agreement or any other Bank
Document and the right to take action to have the Notes declared due and payable
pursuant to Article 8; provided, however, that such agreement may provide that
the participant may have rights to approve or disapprove decreases in
Commitments, interest rates or fees, lengthening of maturity of any Loans,
extend the payment date for any amount due under Article 2 hereof or release of
any material Collateral. No recipient of a participation in any Commitment or
Loans of any Bank shall have any rights under this Agreement or shall be
entitled to any reimbursement for Taxes, Other Taxes increased costs or reserve
requirements under Sections 2.6 or 2.8 or any other indemnity or payment rights
against Borrower (but shall be permitted to receive from the Bank granting such
participation a proportionate amount which would have been payable to the Bank
from whom such Person acquired its participation).
10.13.2 Notwithstanding anything to the contrary contained herein, any
Bank (a "Granting Bank") may grant to a special purpose funding vehicle (a
"SPC"), identified as such in writing from time to time by the Granting Bank to
Administrative Agent and Borrower, the option to provide to Borrower all or any
part of any Loan that such Granting Bank would otherwise be obligated to make to
Borrower pursuant to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to make any Loan, (ii) if an SPC elects not
to exercise such option or otherwise fails to provide all or any part of such
Loan, the Granting Bank shall be obligated to make such Loan pursuant to the
terms hereof. The making of a Loan by an SPC hereunder shall utilize the
Commitment of the Granting Bank to the same extent, and as if, such Loan were
made by such Granting Bank. Each party hereto hereby agrees that no SPC shall be
liable for any indemnity or similar payment obligation under this Agreement (all
liability for which shall remain with the Granting Bank). In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC, it will not institute against, or join any other
person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any state thereof. In addition, notwithstanding anything to the
contrary contained in this Section 10.13, any SPC may (i) with notice to, but
without the prior written consent of, Borrower and Administrative Agent and
without paying any processing fee therefor, assign all or a portion of its
interests in any Loans to the Granting Bank or to any financial institutions
(consented to by Borrower and Administrative Agent) providing liquidity and/or
credit support to or for the account of such SPC to support the funding or
maintenance of Loans and (ii) disclose on a confidential basis any non-public
information relating to its Loans to any rating agency, commercial paper dealer
or provider of any surety, guarantee or credit or liquidity enhancement to such
SPC. This section may not be amended without the written consent of the SPC.
10.14 Transfer of Commitment. Notwithstanding anything else herein to the
contrary, any Bank, after receiving Borrower's prior written consent as to the
identity of the assignee, which consent shall not be unreasonably withheld or
delayed or, so long as an Event of Default has occurred and is continuing,
required, may from time to time, at its option, sell, assign, transfer,
negotiate or otherwise dispose of a portion of one or more of its Commitments
(and Loans made and Letters of Credit issued thereunder) (including the Bank's
interest in this
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Agreement and the other Credit Documents) to any bank or other lending
institution which in such assigning Bank's judgment is reasonably capable of
performing the obligations of a Bank hereunder and reasonably experienced in
project financing; provided, however, that no Bank (including any assignee of
any Bank) may assign any portion of its Commitment (including Loans and Letters
of Credit) of less than $10,000,000 (unless to another Bank) and provided,
further, that assignments of any rights or obligations under any Letter of
Credit shall require the consent of the LC Bank; provided, further, that any
Bank may assign all or any portion of its Commitments to an Affiliate of such
Bank. In the event of any such assignment, (a) the assigning Bank's
Proportionate Share shall be reduced and its obligations hereunder released by
the amount of the Proportionate Share assigned to the new lender, (b) the
parties to such assignment shall execute and deliver to Administrative Agent an
Assignment Agreement evidencing such sale, assignment, transfer or other
disposition substantially in the form of Exhibit L or otherwise satisfactory to
Administrative Agent together with an assignment fee payable to Administrative
Agent of $3,500 (provided such assignment fee shall not be required with respect
to the initial syndication of the Lead Arrangers' and Arrangers' Commitments)
and any other related documentation reasonably requested by Administrative
Agent, including without limitation such withholding tax certificates as may be
appropriate pursuant to Section 2.6.7, (c) at the assigning Bank's option,
Borrower shall execute and deliver to such new lender new Notes in the forms
attached hereto as Exhibit B in a principal amount equal to such new lender's
Commitment, and Borrower shall execute and exchange with the assigning Bank a
replacement note for any Note in an amount equal to the Commitment retained by
the Bank, if any and (d) Administrative Agent may amend Exhibit H attached
hereto to reflect the Proportionate Shares of the Banks following such
assignment. Thereafter, such new lender shall be deemed to be a Bank and shall
have all of the rights and duties of a Bank (except as otherwise provided in
this Article 10), in accordance with its Proportionate Share, under each of the
Credit Documents.
10.15 Laws. Notwithstanding the foregoing provisions of this Article 10,
no sale, assignment, transfer, negotiation or other disposition of the interests
of any Bank hereunder or under the other Credit Documents shall be allowed if it
would require registration under the federal Securities Act of 1933, as then
amended, any other federal securities laws or regulations or the securities laws
or regulations of any applicable jurisdiction. Borrower shall, from time to time
at the request and expense of Administrative Agent, execute and deliver to
Administrative Agent, or to such party or parties as Administrative Agent may
designate, any and all further instruments as may in the opinion of
Administrative Agent be reasonably necessary or advisable to give full force and
effect to such disposition.
10.16 Assignability to Federal Reserve Bank. Notwithstanding any other
provision contained in this Agreement or any other Credit Document to the
contrary, any Bank may assign all or any portion of the Loans or Notes held by
it to any Federal Reserve Bank or the United States Treasury as collateral
security pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any Operating Circular issued by such Federal Reserve Bank,
provided that any payment in respect of such assigned Loans or Notes made by
Borrower to or for the account of the assigning and/or pledging Bank in
accordance with the terms of this Agreement shall satisfy Borrower's obligations
hereunder in respect of such assigned Loans or Notes to the extent of such
payment. No such assignment shall release the assigning Bank from its
obligations hereunder.
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10.17 Technical Committee. Each Bank hereby appoints and authorizes each
of Banc of America Securities LLC, Credit Suisse First Boston, TD Securities
(USA) Inc. and The Bank of Nova Scotia to act as its technical committee
hereunder and under the other Credit Documents (the "Technical Committee") with
such powers as are expressly delegated to the Technical Committee by the terms
of this Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. The Technical Committee shall not
have any duties or responsibilities except those expressly set forth in this
Agreement or in any other Credit Document, or be a trustee or a fiduciary for
any Bank. Notwithstanding anything to the contrary contained herein the
Technical Committee shall not be required to take any action which is contrary
to this Agreement or any other Credit Documents or any Legal Requirement or
exposes the Technical Committee to any liability. All decisions and
determinations to be made by the Technical Committee hereunder and under the
other Credit Documents shall be made by unanimous consent of its members.
Borrower and each Bank hereby agrees that the protective provisions set forth in
Section 5.11 and Sections 10.1 through 10.5 shall apply to and protect, mutatis
mutandis, each member of the Technical Committee and all determinations,
decisions, actions or inactions taken or omitted to be taken by the Technical
Committee. In the event that any member of the Technical Committee at any time
reduces its Commitment to less than $10,000,000, ceases to be a Bank hereunder
or otherwise resigns from the Technical Committee, the remaining members of the
Technical Committee shall appoint a Bank as a successor member to the Technical
Committee; provided (i) such Bank shall be a Bank with one of the five largest
Commitments at such time among the Banks who are not then members of the
Technical Committee and (ii) Borrower does not reasonably disapprove of such
Bank within two Banking Days of receipt of notice of such Bank's appointment to
the Technical Committee.
10.18 Notices to Technical Committee and Banks. Administrative Agent
promptly shall deliver all material documents, instruments and notices that it
receives hereunder and under the other Operative Documents to the Technical
Committee and to each Bank that is not a member of the Technical Committee.
ARTICLE 11.
INDEPENDENT CONSULTANTS
11.1 Removal and Fees. Administrative Agent, in its reasonable discretion,
may remove from time to time, any one or more of the Independent Consultants
and, after consulting with Borrower as to an appropriate Person, appoint
replacements as Administrative Agent may choose. Notice of any replacement
Independent Consultant shall be given by Administrative Agent to Borrower, the
Banks and to the Independent Consultant being replaced. All reasonable fees and
expenses of the Independent Consultants (whether the original ones or
replacements) shall be paid by Borrower.
11.2 Duties. Each Independent Consultant shall be contractually obligated
to Administrative Agent to carry out the activities required of it in this
Agreement and as otherwise requested by Administrative Agent and shall be
responsible solely to Administrative Agent. Borrower acknowledges that it will
not have any cause of action or claim against any Independent Consultant
resulting from any decision made or not made, any action taken or not taken or
any advice given by such Independent Consultant in the due performance in good
faith
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of its duties to Administrative Agent, except to the extent arising from such
Independent Consultant's gross negligence or willful misconduct.
11.3 Independent Consultants' Certificates.
11.3.1 Until the receipt by Administrative Agent of certificates
satisfactory to Administrative Agent from each Independent Consultant whom
Administrative Agent considers necessary or appropriate certifying Final
Completion, Borrower shall provide such documents and information to the
Independent Consultants as any of the Independent Consultants may reasonably
consider necessary in order for the Independent Consultants to deliver to
Administrative Agent the following certificates:
(a) all certificates to be delivered pursuant to Article 3, if
any, or, if no Loan has taken place in any month, certificates delivered at the
end of the month as to the matters required by Exhibit C-11; and
(b) monthly after the Closing Date, a full report and status
of the progress of each Initial Project and Funded Subsequent Project to that
date, a complete assessment of Project Costs to Final Completion of such
Projects and such other information and certification as Administrative Agent
may reasonably require from time to time.
11.3.2 Following Final Completion of each Project, Borrower shall
provide such documents and information to the Independent Consultants (subject
to the execution by such Independent Consultants of confidentiality agreements
reasonably acceptable to Administrative Agent and Borrower) as they may
reasonably consider necessary in order for the Independent Consultants to
deliver annually to Administrative Agent a certificate setting forth a full
report on the status of such Project and such other information and
certification as Administrative Agent may reasonably require from time to time.
11.4 Certification of Dates. Administrative Agent will request that the
Independent Consultants act diligently in the issuance of all certificates
required to be delivered by the Independent Consultants hereunder, if their
issuance is appropriate. Borrower shall provide the Independent Consultants with
reasonable notice of the expected occurrence of any such dates or events.
ARTICLE 12.
MISCELLANEOUS
12.1 Addresses. Any communications between the parties hereto or notices
provided herein to be given may be given to the following addresses:
If to Administrative Agent: Credit Suisse First Boston, New York Branch
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Portfolio Management
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If to Borrower: Calpine Construction Finance Company II, LLC
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Asset Management
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Technical Committee: The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Credit Suisse First Boston, New York Branch
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Portfolio Management
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
TD Securities (USA) Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be considered as properly given (a) if
delivered in person, (b) if sent by overnight delivery service (including
Federal Express, UPS, ETA, ▇▇▇▇▇, DHL, AirBorne and other similar overnight
delivery services), (c) in the event overnight delivery services are not readily
available, if mailed by first class United States Mail, postage prepaid,
registered or certified with return receipt requested or (d) if sent by prepaid
telegram, or by telecopy or other
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electronic means (including electronic mail) confirmed by telephone. Notice so
given shall be effective upon receipt by the addressee, except that
communication or notice so transmitted by telecopy or other direct electronic
means shall be deemed to have been validly and effectively given on the day (if
a Banking Day and, if not, on the next following Banking Day) on which it is
transmitted if transmitted before 4:00 p.m., recipient's time, and if
transmitted after that time, on the next following Banking Day; provided,
however, that if any notice is tendered to an addressee and the delivery thereof
is refused by such addressee, such notice shall be effective upon such tender.
Any party shall have the right to change its address for notice hereunder to any
other location within the continental United States by giving of 30 days' notice
to the other parties in the manner set forth hereinabove.
12.2 Additional Security; Right to Set-Off. Any deposits or other sums at
any time credited or due from Banks and any Project Revenues, securities or
other property of Borrower in the possession of Administrative Agent may at all
times be treated as collateral security for the payment of the Loans and the
Notes and all other obligations of Borrower to Banks under this Agreement and
the other Credit Documents, and Borrower hereby pledges to Administrative Agent
for the benefit of the Banks and grants Administrative Agent a security interest
in and to all such deposits, sums, securities or other property. Regardless of
the adequacy of any other collateral, Administrative Agent and only
Administrative Agent, may execute or realize on the Banks' security interest in
any such deposits or other sums credited by or due from Banks to Borrower, may
apply any such deposits or other sums to or set them off against Borrower's
obligations to Banks under the Notes and this Agreement at any time after the
occurrence and during the continuance of any Event of Default.
12.3 Delay and Waiver. No delay or omission to exercise any right, power
or remedy accruing to the Banks upon the occurrence of any Event of Default or
Inchoate Default or any breach or default of the Portfolio Entities under this
Agreement or any other Credit Document shall impair any such right, power or
remedy of the Banks, nor shall it be construed to be a waiver of any such breach
or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring, nor shall any waiver of any single Event of
Default, Inchoate Default or other breach or default be deemed a waiver of any
other Event of Default, Inchoate Default or other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of Administrative Agent and/or the Banks of any Event of
Default, Inchoate Default or other breach or default under this Agreement or any
other Credit Document, or any waiver on the part of Administrative Agent and/or
the Banks of any provision or condition of this Agreement or any other Credit
Document, must be in writing and shall be effective only to the extent in such
writing specifically set forth. All remedies, either under this Agreement or any
other Credit Document or by law or otherwise afforded to Administrative Agent,
LC Bank and the Banks, shall be cumulative and not alternative.
12.4 Costs, Expenses and Attorneys' Fees; Syndication.
12.4.1 Borrower will pay to Administrative Agent, Lead Arrangers,
Arrangers, Co-Syndication Agents and Co-Documentation Agents all of its
reasonable costs and expenses in connection with the preparation, negotiation,
closing and administering this Agreement and the documents contemplated hereby
and any participation or syndication of the Loans or this
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Agreement, including the reasonable fees, expenses and disbursements of ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ and other associated local attorneys retained by such Persons in
connection with the preparation of such documents and any amendments hereof or
thereof, or the preparation, negotiation, closing, administration, enforcement,
participation or syndication of the Loans or this Agreement, the reasonable
fees, expenses and disbursements of the Independent Consultants and any other
engineering, insurance and construction consultants to Administrative Agent,
Lead Arrangers, Arrangers, Co-Syndication Agents and Co-Documentation Agents
incurred in connection with this Agreement or the Loans subsequent to the
Closing Date, and the travel and out-of-pocket costs incurred by such Persons
following the Closing Date, and Borrower further agrees to pay Administrative
Agent, Lead Arrangers, Arrangers, Co-Syndication Agents and Co-Documentation
Agents the out-of-pocket costs and travel costs incurred by such Persons in
connection with syndication of the Loans or this Agreement; provided, however,
Borrower shall not be required to pay advertising costs of any of the Banks or
the fees of the Banks' attorneys, other than ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ and associated
local counsel or the fees and costs of any engineers or consultants other than
the Independent Engineer and the Independent Consultant engaged by
Administrative Agent. Borrower will reimburse Administrative Agent, Lead
Arrangers, Arrangers, Co-Syndication Agents and Co-Documentation Agents for all
costs and expenses, including reasonable attorneys' fees, expended or incurred
by such Persons in enforcing this Agreement or the other Credit Documents in
connection with an Event of Default or Inchoate Default, in actions for
declaratory relief in any way related to this Agreement or in collecting any sum
which becomes due such Persons on the Notes or under the Credit Documents.
12.4.2 In connection with syndication of the Loans and Commitments, an
information package containing certain relevant information concerning Borrower,
the Projects, the Turbines and the other Project and Turbine participants has
been provided to potential Banks and participants. Borrower agrees to cooperate
and to cause the Member and Calpine to cooperate in the syndication of the Loans
and Commitments in all respects reasonably requested by Administrative Agent,
Lead Arrangers, Arrangers, Co-Syndication Agents and Co-Documentation Agents,
including participation in bank meetings held in connection with such
syndication, and to provide, for inclusion in any additional package, all
information which such Persons may request from it or which such Persons or
Borrower may consider material to a lender or participant, or necessary or
appropriate for accurate and complete disclosure. Upon request of Administrative
Agent, Lead Arrangers, Arrangers, Co-Syndication Agents and Co-Documentation
Agents, Borrower shall represent to such Persons, and indemnify such Persons for
claims relating to, the accuracy and completeness of such disclosure, upon terms
acceptable to such Persons.
12.5 Entire Agreement. This Agreement and any agreement, document or
instrument attached hereto or referred to herein integrate all the terms and
conditions mentioned herein or incidental hereto and supersede all oral
negotiations and prior writings in respect to the subject matter hereof. In the
event of any conflict between the terms, conditions and provisions of this
Agreement and any such agreement, document or instrument, the terms, conditions
and provisions of this Agreement shall prevail. This Agreement and the other
Credit Documents may only be amended or modified by an instrument in writing
signed by Borrower, Administrative Agent and any other parties to such
agreements.
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12.6 Governing Law. This Agreement, and any instrument or agreement
required hereunder (to the extent not otherwise expressly provided for therein),
shall be governed by, and construed under, the laws of the State of New York,
without reference to conflicts of laws (other than Section 5-1401 of the New
York General Obligations Law).
12.7 Severability. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
12.8 Headings. Paragraph headings have been inserted in this Agreement as
a matter of convenience for reference only and it is agreed that such paragraph
headings are not a part of this Agreement and shall not be used in the
interpretation of any provision of this Agreement.
12.9 Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP and practices consistent with
those applied in the preparation of the financial statements submitted by
Borrower to Administrative Agent, and all financial data submitted pursuant to
this Agreement shall be prepared in accordance with such principles and
practices.
12.10 Additional Financing. The parties hereto acknowledge that the Banks
have made no agreement or commitment to provide any financing except as set
forth herein.
12.11 No Partnership, Etc. The Banks and Borrower intend that the
relationship between them shall be solely that of creditor and debtor. Nothing
contained in this Agreement, the Notes or in any of the other Credit Documents
shall be deemed or construed to create a partnership, tenancy-in-common, joint
tenancy, joint venture or co-ownership by or between the Banks, Borrower or any
other Person. The Banks shall not be in any way responsible or liable for the
debts, losses, obligations or duties of the Portfolio Entities or any other
Person with respect to any Project, Turbine or otherwise. All obligations to pay
real property or other taxes, assessments, insurance premiums, and all other
fees and charges arising from the ownership, operation or occupancy of any
Project or Turbine and to perform all obligations and other agreements and
contracts relating to any Project or Turbine shall be the sole responsibility of
the Portfolio Entities.
12.12 Deed of Trust/Collateral Documents. The Loans are or will be secured
in part by the Deeds of Trust encumbering certain properties associated with the
Projects in such Projects' respective states. Reference is hereby made to the
Deeds of Trust and the other Collateral Documents for the provisions, among
others, relating to the nature and extent of the security provided thereunder,
the rights, duties and obligations of the Portfolio Entities and the rights of
Administrative Agent and the Banks with respect to such security.
12.13 Limitation on Liability. No claim shall be made by any Portfolio
Entity, the Member, Calpine or any of their Affiliates, against the Banks or any
of their Affiliates, directors, employees, attorneys or agents for any special,
indirect, consequential or punitive damages in respect of any breach or wrongful
conduct (whether or not the claim therefor is based on contract, tort or duty
imposed by law), in connection with, arising out of or in any way related to the
transactions contemplated by this Agreement or the other Operative Documents or
any act or
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omission or event occurring in connection therewith except to the extent that
any such claims are caused by the willful misconduct of the Banks; and Borrower
hereby waives, releases and agrees not to ▇▇▇ upon any such claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
12.14 Waiver of Jury Trial. THE BANKS AND BORROWER HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, OR ANY COURSE OR
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS
OF THE BANKS OR BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANKS
TO ENTER INTO THIS AGREEMENT.
12.15 Consent to Jurisdiction. The Banks and Borrower agree that any legal
action or proceeding by or against Borrower or with respect to or arising out of
this Agreement, the Notes, or any other Credit Document may be brought in or
removed to the courts of the State of New York, in and for the County of New
York, or of the United States of America for the Southern District of New York,
as Administrative Agent may elect. By execution and delivery of the Agreement,
the Banks and Borrower accept, for themselves and in respect of their property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The
Banks and Borrower irrevocably consent to the service of process out of any of
the aforementioned courts in any manner permitted by law. Nothing herein shall
affect the right of Administrative Agent to bring legal action or proceedings in
any other competent jurisdiction, including judicial or non-judicial foreclosure
of the Deed of Trust. Notwithstanding the foregoing, service of process shall
not be deemed served or mailed to Administrative Agent or the Banks until a copy
of all matters to be served have be mailed to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇ or such other
Person as Administrative Agent or the Banks may hereafter designate by notice
given pursuant to Section 12.1. The Banks and Borrower further agree that the
aforesaid courts of the State of New York and of the United States of America
shall have exclusive jurisdiction with respect to any claim or counterclaim of
Borrower based upon the assertion that the rate of interest charged by the Banks
on or under this Agreement, the Loans and/or the other Credit Documents is
usurious. The Banks and Borrower hereby waive any right to stay or dismiss any
action or proceeding under or in connection with any or all of any Project,
Turbine, this Agreement or any other Credit Document brought before the
foregoing courts on the basis of forum non-conveniens.
12.16 Usury. Nothing contained in this Agreement or the Notes shall be
deemed to require the payment of interest or other charges by Borrower or any
other Person in excess of the amount which the holders of the Notes may lawfully
charge under any applicable usury laws. In the event that the holders of the
Notes shall collect moneys which are deemed to constitute interest which would
increase the effective interest rate to a rate in excess of that permitted to be
charged by applicable law, all such sums deemed to constitute interest in excess
of the legal rate shall, upon such determination, at the option of the holder of
the Notes, be returned to Borrower or credited against the principal balance of
the Notes then outstanding.
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12.17 Knowledge and Attribution. References in this Agreement and the
other Credit Documents to the "knowledge," "best knowledge" or facts and
circumstances "known to" Borrower, and all like references, mean facts or
circumstances of which a Responsible Officer of a Portfolio Entity or the Member
has actual knowledge after due inquiry.
12.18 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Borrower may not assign or otherwise transfer any of its
rights under this Agreement except as provided in Section 6.17, and the Banks
may not assign or otherwise transfer any of their rights under this Agreement
except as provided in Article 10.
12.19 Counterparts. This Agreement may be executed in one or more
duplicate counterparts and when signed by all of the parties listed below shall
constitute a single binding agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have caused this Credit Agreement to be
duly executed by their officers or partners thereunto duly authorized as of the
day and year first above written.
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By: Calpine CCFC II Holdings, Inc., a Delaware
corporation, its sole member.
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
THE BANK OF NOVA SCOTIA
as Lead Arranger, Co-Syndication Agent, Bookrunner
and Bank
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH as Lead
Arranger, Administrative Agent and Bank
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
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BANC OF AMERICA SECURITIES LLC,
as Arranger and Co-Syndication Agent
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
BANK OF AMERICA, N.A.,
as Bank
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
ING (U.S.) CAPITAL LLC,
as Arranger, Co-Syndication Agent and Bank
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
BAYERISCHE LANDESBANK GIROZENTRALE,
as Arranger, Co-Documentation Agent, LC Bank and Bank
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
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CIBC WORLD MARKETS CORP.,
as Arranger and Co-Documentation Agent
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
CIBC, INC.,
as Bank
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
DRESDNER KLEINWORT ▇▇▇▇▇▇ NORTH AMERICA SERVICES LLC,
as Arranger and Co-Documentation Agent
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES,
as Bank
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
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164
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
TD SECURITIES (USA) INC.,
as Arranger and Co-Documentation Agent
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇▇) INC.,
as Bank
By:
----------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
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EXHIBIT A
to Credit Agreement
DEFINITIONS
"Accounts" means the Construction Account, the Revenue Account, the
Operating Accounts, the Working Capital Reserve Account and the Loss Proceeds
Account, including any sub-accounts within such accounts.
"Acquisitions" means the purchase by Calpine or a Subsidiary thereof
of (a) all of the outstanding ownership interests of ▇▇▇▇▇▇ Energy Corporation
and (b) all right, title and interest in and to the assets comprising the ▇▇▇▇▇
Energy Center Project.
"Activation Fee" has the meaning set forth in Section 2.4.3 of the
Credit Agreement.
"Additional Borrower Equity" has the meaning given in Section 5.17.2
of the Credit Agreement.
"Additional Commitment" has the meaning given in Section 2.11.2 of
the Credit Agreement.
"Additional Major Project Document" means an Additional Project
Document that is a Major Project Document.
"Additional Project Documents" means any material contracts or
agreements related to the construction, testing, maintenance, repair, operation
or use of one or more of the Projects entered into by a Project Owner or an
Equipment Finance Company and any other Person, or assigned to a Project Owner
or an Equipment Finance Company, subsequent to the Funding Date of a particular
Project. Without in any way limiting the foregoing, all such contracts and
agreements providing for the payment by a Project Owner or an Equipment Finance
Company of $1,000,000 or more, or the provision to a Project Owner or an
Equipment Finance Company of $1,000,000 in value of goods or services, entered
into by or assigned to a Project Owner or an Equipment Finance Company after the
Funding Date for the respective Project shall be deemed to constitute an
Additional Project Document.
"Administrative Agent" means Credit Suisse First Boston, New York
Branch, acting in its capacity as administrative agent for the Banks under the
Credit Agreement, or its successor appointed pursuant to the terms of the Credit
Agreement.
"Affiliate" of a specified Person means any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the Person specified, or who holds
or beneficially owns 10% or more of the equity interest in the Person specified
or 10% or more of any class of voting securities of the Person specified. When
used with respect to Borrower, "Affiliate" shall include the Member, Calpine and
any Affiliate of the Member or Calpine (other than the Portfolio Entities).
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"Affiliated Major Project Participant" means Calpine and each Major
Project Participant (other than the Portfolio Entities) that is an Affiliate of
Calpine.
"Affiliated Party Agreement Guaranty" means, collectively, for each
Project, the contract or agreement approved by the Technical Committee in
accordance with Section 3.2 or 3.3, as the case may be, of the Credit Agreement
or as otherwise required thereby entered into by Calpine in favor of the Project
Owner with respect to such Project guarantying in whole or in part the
obligations of Subsidiaries of Calpine (other than Equipment Finance Companies)
pursuant to Project Documents to which such Subsidiaries are party.
"Affiliated Subordination Agreement" means, collectively, for each
Affiliate of Borrower (other than Equipment Finance Companies) providing goods
or services to a Project, the contract or agreement approved by the Technical
Committee in accordance with Section 3.2 or 3.3, as the case may be, of the
Credit Agreement or as otherwise required thereby entered into by such Affiliate
in favor of Administrative Agent for the subordination of O&M Costs as provided
therein.
"Aggregate LC Stated Amount" means, as of any time, the aggregate
Stated Amount of all Letters of Credit issued and outstanding under the Credit
Agreement.
"Annual Operating Budget" has the meaning given in Section 5.15.2 of
the Credit Agreement.
"Applicable Debt to Capitalization Ratio" means (a) for so long as
there exist fewer than nine Funded Projects, a Debt to Capitalization Ratio of
0.70 to 1.00, (b) for so long as there exist nine Funded Projects, a Debt to
Capitalization Ratio of 0.675 to 1.00, (c) for so long as there exist 10 Funded
Projects, a Debt to Capitalization Ratio of 0.65 to 1.00, (d) for so long as
there exist 11 Funded Projects, a Debt to Capitalization Ratio of 0.625 to 1.00,
(e) for so long as there exist 12 Funded Projects, a Debt to Capitalization
Ratio of 0.60 to 1.00, and (f) for so long as there exist more than 12 Funded
Projects, a Debt to Capitalization Ratio of 0.70 to 1.00. For purposes of
determining the Applicable Debt to Capitalization Ratio, Funded Projects that
are released from the Lien of the Collateral Documents as provided in the Credit
Agreement shall not thereafter be considered Funded Projects.
"Applicable Margin" shall mean, for all Loans, the amount set forth
below for the applicable Type of Loan (with (lambda) being Borrower's Debt to
Capitalization Ratio):
Debt to
Capitalization Base Rate, LIBO Rate
Level Ratio (Projects) (% p.a.) (% p.a.)
I (lambda)=/<50% 0.75% 1.50%
II 50%<(lambda)=/<60% 1.00% 1.75%
III 60%<(lambda) 1.50% 2.25%
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"Applicable Permit" means any Permit, including any zoning,
environmental protection, pollution (including air, water or noise), sanitation,
FERC, PUC, import, export, safety, siting or building Permit (a) that is
necessary to be obtained by or on behalf of a Project Owner at the time the
determination is made in light of the stage of development, construction or
operation of a Project (to the extent required by Legal Requirements or the
Operative Documents) to construct, test, operate, maintain, repair, own or use a
Project as contemplated by the Operative Documents, to sell electricity and
steam therefrom, for a Project Owner to enter into any Operative Document or to
consummate any transaction contemplated thereby, in each case in accordance with
all applicable Legal Requirements, (b) that is necessary so that none of
Borrower or the other Portfolio Entities, Administrative Agent, Lead Arrangers,
Technical Committee or the Banks nor any Affiliate of any of them may be deemed
by any Governmental Authority to be subject to regulation under the FPA or PUHCA
or under any state laws or regulations respecting the rates of, or the financial
or organizational regulation of, electric utilities as a result of the
construction or operation of a Project or the sale of electricity or steam
therefrom, or (c) that is listed on Part I(A) of any Permit Schedule.
"Applicable Third Party Permit" means any Permit, including any
zoning, environmental protection, pollution, sanitation, FERC, PUC, import,
export, safety, siting or building Permit (a) that is necessary to be obtained
by any Person (other than a Project Owner) that is a party to a Project
Document, a Credit Document or an Additional Project Document in order to
perform such Person's obligations under and as contemplated by the Operative
Documents to which such Person is a party, or in order to consummate any
transaction contemplated thereby, in each case in accordance with all applicable
Legal Requirements or (b) that is listed on Part I(B) of any Permit Schedule.
"Arrangers" means each of Banc of America Securities LLC, ING
(U.S.) Capital LLC, Bayerische Landesbank Girozentrale, CIBC World Markets
Corp., Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC and TD Securities
(USA) Inc. as the arrangers of the Commitments.
"Available Construction Funds" means, at any time and without
duplication, the sum of (a) amounts in the Construction Account and all
subaccounts thereunder other than the Turbine Purchase Sub-Account (provided,
however, that amounts in any given Construction Sub-Account shall only be taken
into account to the extent of the Project Costs remaining to be paid in respect
of the Project to which such Construction Sub-Account relates), (b) the
Available Loan Commitment, (c) undisbursed Insurance Proceeds which are
available for payment of Project Costs, (d) any delay liquidated damages which
Borrower or another Portfolio Entity has received under any Construction
Contract, (e) any other liquidated damages which Borrower or another Portfolio
Entity has received under the other Project Documents and which, by the terms of
the Credit Agreement, are available for the payment of Project Costs, (f) any
undisbursed amounts on deposit with Administrative Agent or Depositary Agent
constituting Base Equity or Additional Borrower Equity or amounts deposited
pursuant to Section 3.10(a) of the Credit Agreement which are designated to be
used to pay Project Costs but not Turbine Costs other than Turbine Costs for
Turbines assigned to the applicable Project(s) (as set forth on Exhibit G-3 to
the Credit Agreement), (g) the Base Equity required to be funded pursuant to
Section 5.17.1 of the Credit Agreement and (h) any other Committed Equity Funds
which are designated to be
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used to pay Project Costs but not Turbine Costs other than Turbine Costs for
Turbines assigned to the applicable Project(s) (as set forth on Exhibit G-3 to
the Credit Agreement).
"Available Loan Commitment" means at any time and from time to time
during the Loan Availability Period, the Total Loan Commitment at such time
minus the sum of (a) the aggregate principal amount of all Loans outstanding at
such time plus (b) the aggregate Stated Amount of all Letters of Credit and
outstanding Reimbursement Obligations thereunder at such time.
"Bank" or "Banks" means the banks and other financial institutions
that are or become parties to the Credit Agreement and their successors and
assigns including each LC Bank.
"Banking Day" means any day other than a Saturday, Sunday or other
day on which banks are or Administrative Agent is authorized to be closed in the
State of New York or the State of California and, where such term is used in any
respect relating to a LIBOR Loan, which is also a day on which dealings in
Dollar deposits are carried out in the London interbank market.
"Bankruptcy Event" shall be deemed to occur, with respect to any
Person, if that Person shall institute a voluntary case seeking liquidation or
reorganization under the Bankruptcy Law, or shall consent to the institution of
an involuntary case thereunder against it; or such Person shall file a petition
or consent or shall otherwise institute any similar proceeding under any other
applicable Federal or state law, or shall consent thereto; or such Person shall
apply for, or by consent or acquiescence there shall be an appointment, of a
receiver, liquidator, sequestrator, trustee or other officer with similar powers
for itself or any substantial part of its assets; or such Person shall make an
assignment for the benefit of its creditors; or such Person shall admit in
writing its inability to pay its debts generally as they become due; or if an
involuntary case shall be commenced seeking liquidation or reorganization of
such Person under the Bankruptcy Law or any similar proceedings shall be
commenced against such Person under any other applicable Federal or state law
and (i) the petition commencing the involuntary case is not timely controverted,
(ii) the petition commencing the involuntary case is not dismissed within 60
days of its filing, (iii) an interim trustee is appointed to take possession of
all or a portion of the property, and/or to operate all or any part of the
business of such Person and such appointment is not vacated within 60 days, or
(iv) an order for relief shall have been issued or entered therein; or a decree
or order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee or other officer having similar
powers, of such Person or all or a part of its property shall have been entered;
or any other similar relief shall be granted against such Person under any
applicable Federal or state law.
"Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, and any other
state or federal insolvency, reorganization, moratorium or similar law for the
relief of debtors, or any successor statute.
"Base Case Project Projections" means a projection of operating
results for the Projects over a period ending no sooner than the Loan Maturity
Date, showing at a minimum Borrower's reasonable good faith estimates, as of the
date of delivery, of revenue, operating
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expenses, Four-Quarter Portfolio Interest Coverage Ratios (on an annual basis),
Debt to Capitalization Ratios projected to exist from time to time and sources
and uses of revenues over the forecast period, in each case as delivered
pursuant to Section 3.1.16, 3.2.24, 3.3.27 or 3.3.41 of the Credit Agreement.
"Base Equity" has the meaning given in Section 5.17.1 of the Credit
Agreement.
"Base Rate" means the greater of (a) the prime commercial lending
rate announced by Credit Suisse First Boston at its New York office or (b) the
Federal Funds Rate plus 0.50%.
"Base Rate Construction Loan" has the meaning given in Section
2.1.1(b)(i) of the Credit Agreement.
"Base Rate Loans" means, collectively, the Base Rate Construction
Loans and the Base Rate Turbine Purchase Loans.
"Base Rate Turbine Purchase Loans" has the meaning given in Section
2.1.2(b)(i) of the Credit Agreement.
"Baytown Energy Center Project" means the Initial Project titled
"Baytown Energy Center" set forth on Exhibit G-1 to the Credit Agreement.
"Beneficiary" has the meaning given in the granting clause of the
Deeds of Trust.
"Bookrunner" means The Bank of Nova Scotia.
"Borrower" means Calpine Construction Finance Company II, LLC, a
Delaware limited liability company.
"Borrower Security Agreement" means the Borrower Security Agreement
dated as of October 16, 2000 in substantially the form of Exhibit D-4A to the
Credit Agreement as executed by Borrower in favor of Administrative Agent.
"Borrower's Environmental Consultant" means with respect to any
Project, the Person providing environmental consulting services and site
assessment report(s) to the Portfolio Entities with respect to such Project and
who provides a reliance letter in form and substance reasonably acceptable to
the Technical Committee.
"Borrowing" means a borrowing by Borrower of any Loan or the
issuance, renewal, extension or increase in the Stated Amount of any Letter of
Credit.
"Broad River - Phase II Project" means the Initial Project titled
"Broad River Energy Center II" set forth on Exhibit G-1 to the Credit Agreement.
"Calpine" means Calpine Corporation, a Delaware corporation.
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"Calpine DEC Credit Agreement" means the Credit Agreement between
Calpine, as lender, and the Delta Energy Center Project Owner, as borrower, and
to which Borrower and/or Development Company will become parties (as lenders),
pursuant to which Calpine and, after becoming party, Borrower and/or Development
Company will loan funds on a secured basis to the Delta Energy Center Project
Owner to pay Project Costs incurred with respect to such Project, such agreement
and all other documents associated therewith to be in form and substance
satisfactory to the Technical Committee.
"Calpine Indenture" means, collectively, (a) that certain Indenture dated
February 17, 1994 relating to the principal amount of $105,000,000 9 1/4% Senior
Notes due 2004 by and between Calpine and State Street Bank and Trust Company
(as successor to Shawmut Bank Connecticut), as trustee, as supplemented by that
certain First Supplemental Indenture, dated as of July 31, 2000; (b) that
certain Indenture dated as of May 16, 1996 relating to the issuance of the
principal amount of $180,000,000 of 10 1/2% Senior Notes due 2006, by and
between Calpine and State Street Bank and Trust Company (as successor to Fleet
National Bank), as trustee, as supplemented by that certain First Supplemental
Indenture, dated as of August 1, 2000; (c) that certain Indenture dated as of
July 8, 1997 relating to the issuance of a principal amount of $275,000,000,
8 3/4% Senior Notes due 2007, by and between Calpine and The Bank of New York,
as trustee, as supplemented by that certain First Supplemental Indenture dated
as of September 10, 1997 and that certain Second Supplemental Indenture, dated
as of July 31, 2000; (d) that certain Indenture dated as of March 31, 1998
relating to the issuance of a principal amount of $400,000,000, 7 7/8% Senior
Notes due 2008, by and between Calpine and the Bank of New York, as trustee, as
supplemented by that certain First Supplemental Indenture dated as of July 24,
1998 and that Second Supplemental Indenture, dated as of July 31, 2000; (e) that
certain Indenture, dated as of March 29, 1999, relating to the issuance of a
principal amount of $250,000,000, 7 5/8% Senior Notes due 2006 and the issuance
of a principal amount of $350,000,000, 7 3/4% Senior Notes due 2009 by and
between Calpine and The Bank of New York, as trustee, as supplemented by that
certain First Supplemental Indenture, dated as of July 31, 2000; (f) that
certain Indenture, dated as of August 10, 2000, relating to the issuance of a
principal amount of $250,000,000, 8 1/4% Senior Notes due 2005 and the issuance
of a principal amount of $750,000,000, 8 5/8% Senior Notes due 2010 by and
between Calpine and Wilmington Trust, as trustee, as supplemented by that
certain First Supplemental Indenture, dated as of September 28, 2000; and (g)
such additional indentures relating to senior notes of Calpine issued after the
date hereof.
"Capital Adequacy Requirement" has the meaning given in Section
2.8.4 of the Credit Agreement.
"Capitalization" means, at any time, the sum of (x) the aggregate
Debt of the Portfolio Entities at such time (except (a) Debt consisting of
Contributions made in the form of subordinated loans and (b) Portfolio Entity
Debt) and (y) the Net Worth of the Portfolio Entities at such time. The Debt and
Net Worth of the Portfolio Entities with respect to partially owned Projects
shall be determined in accordance with GAAP.
"▇▇▇▇▇▇▇▇ Project" means the Initial Project titled "▇▇▇▇▇▇▇▇ Energy
Center" set forth on Exhibit G-1 to the Credit Agreement.
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"CCFC II Equipment Finance Company" means CCFC II Equipment Finance
Company, LLC, a Delaware limited liability company.
"CCFC II Equipment Finance Company Security Agreement" means the
CCFC II Equipment Finance Company Security Agreement dated as of October 16,
2000 in substantially the form of Exhibit D-4D to the Credit Agreement as
executed by CCFC II Equipment Finance Company in favor of Administrative Agent.
"CCFC II Equipment Finance Holdings Company" means CCFC II Equipment
Finance Holdings Company, LLC, a Delaware limited liability company.
"Change of Law" has the meaning given in Section 2.8.2 of the Credit
Agreement.
"Closing Date" means the date when each of the conditions precedent
listed in Section 3.1 of the Credit Agreement has been satisfied (or waived in
accordance with the terms of the Credit Agreement).
"COD" means, with respect to a Project, the date on which such
Project has achieved Commercial Operation.
"Co-Documentation Agents" means each of Bayerische Landesbank
Girozentrale, CIBC World Markets Corp., Dresdner Kleinwort ▇▇▇▇▇▇ North America
Services LLC and TD Securities (USA) Inc.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all real and personal property which is subject
or is intended to become subject to the security interests or liens granted by
any of the Collateral Documents.
"Collateral Documents" means the Deeds of Trust, the Depositary
Agreement, the Credit Agreement, the Borrower Security Agreement, the
Development Company Security Agreement, the CCFC II Equipment Finance Company
Security Agreement, the Pledge Agreements (Pledged Equity Interests), the
Project/Turbine Owner Security Agreements, the Equipment Finance Company
Security Agreements, the Consents, the Equity Documents, the Affiliated
Subordination Agreements, the Debt Subordination Agreements, any security
agreements granting security interests in the Operating Accounts and any
financing statements, notices and the like filed, recorded or delivered in
connection with the foregoing.
"Commercial Operation" means, with respect to a Project, that such
Project is able to operate and produce electrical energy for commercial sale in
accordance with the Prudent Utility Practices and applicable laws.
"Commitment Fee" has the meaning given in Section 2.4.2 of the
Credit Agreement.
"Commitments" means, with respect to each Bank, such Bank's Loan
Commitment, Turbine Purchase Loan Commitment and Letter of Credit Commitment,
and with
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respect to all Banks, the Total Loan Commitment, the Total Turbine Purchase Loan
Commitment and the Total Letter of Credit Commitment.
"Committed Equity Funds" means Contributions required pursuant to
Section 5.17.1 of the Credit Agreement and guaranteed by Calpine pursuant to
Section 1 of the Project Completion Guaranty or otherwise irrevocably and
unconditionally committed by Calpine to fund Project Costs pursuant to
documentation in form and substance reasonably satisfactory to the Required
Banks.
"Completion" means, with respect to each Project, that (i) all work
under the applicable Major Construction Contracts (other than "punchlist" items
and work which is to be done after the Project has passed its "acceptance tests"
or "performance tests") has been completed substantially in accordance with the
applicable Plans and Specifications and the requirements of all Applicable
Permits, (ii) all necessary facilities for the transportation of natural gas to
such Project have been completed, (iii) all necessary electrical interconnection
facilities sufficient to transmit all power generated by such Project have been
completed, (iv) all necessary facilities for the procurement, transportation and
discharge of water to or from such Project have been completed, (v) the
"acceptance tests" or "performance tests" (however defined) under the applicable
Prime Construction Contract and the applicable Power Island Supply Contract have
been performed and the Project has achieved the minimum levels specified in such
contracts for such "acceptance tests" or "performance tests," (vi) such
"acceptance tests" or "performance tests" either (A) have been successfully
completed as provided in the Prime Construction Contract and the Power Island
Supply Contract, or (B) performance liquidated damages as provided in such
contracts have been paid by the applicable Contractor under the applicable Major
Construction Contract and/or by Calpine under the Project Completion Guaranty in
an amount which, in the aggregate, is equal to the lesser of (1) the amount of
performance liquidated damages required to be paid in order to be deemed to have
successfully completed such "acceptance tests" or "performance tests" under the
applicable Major Construction Contracts, without regard to any limitations of
liability in such contracts, or (2) the EPC Equivalent Damages for such Project,
and (vii) all real estate rights necessary for the completion of the foregoing
and the continued operation of such Project shall have been obtained, in each
case other than clause (vii) above, as satisfactorily certified by the
Independent Engineer to Administrative Agent in its reasonable discretion.
"Completion Date" means, with respect to a Project, the date on
which Completion of such Project occurs.
"Confirmation of Interest Period Selection" has the meaning given in
Section 2.1.3(b)(ii) of the Credit Agreement.
"Consents" means the third-party consents required pursuant to the
Credit Agreement in substantially the form of Exhibit E-1 to the Credit
Agreement and any other third party consents to the assignments contemplated by
the Credit Documents.
"Construction Account" has the meaning given in Section 1.1 of the
Depositary Agreement.
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"Construction Contracts" means, collectively, for each Project, the
Prime Construction Contract, the Construction Management Agreement, the Power
Island Supply Contract and the Engineering Contract for such Project and any
other contract or agreement approved by the Technical Committee in accordance
with Section 3.2 or 3.3, as the case may be, of the Credit Agreement entered
into by, or on behalf of, the Project Owner with respect to such Project with a
Contractor for the construction of all or any portion of such Project, or the
supply or provision of any goods or services relating to the construction of
such Project.
"Construction Credit Event" has the meaning given in Section 3.4 of
the Credit Agreement.
"Construction Drawdown Certificate" means a certificate delivered to
Administrative Agent substantially in the form of Exhibit C-6 to the Credit
Agreement.
"Construction Loan" has the meaning given in Section 2.1.1(a) of the
Credit Agreement.
"Construction Management Agreement" means, collectively, for each
Project, the contract or agreement approved by the Technical Committee in
accordance with Section 3.2 or 3.3, as the case may be, of the Credit Agreement
entered into by, or on behalf of, the Project Owner with respect to such Project
for the provision of construction management services for such Project.
"Construction Manager" means any wholly-owned subsidiary of Calpine
or any other Person approved by the Technical Committee in accordance with
Section 3.2 or 3.3, as the case may be, of the Credit Agreement in its capacity
as construction manager under a Construction Management Agreement.
"Construction Period" means, with respect to any Project, the period
from the commencement of construction of such Project through the Completion
Date of such Project.
"Construction Sub-Account" has the meaning given in Section 7.1.1 of
the Credit Agreement.
"Contractors" means, collectively, each Construction Manager, each
Prime Contractor, each Project Engineer, and any other Person who is providing
goods or services to a Project pursuant to a Construction Contract.
"Contribution" means either (i) a cash equity contribution or (ii) a
subordinated loan made pursuant to a Debt Subordination Agreement, or a
combination thereof (other than with respect to Portfolio Entity Debt) and, for
purposes of Section 6.6 of the Credit Agreement only, in-kind amounts considered
to be Contributions, in each case as permitted pursuant to the Credit Agreement.
At such time as a Project to which a Turbine has been assigned (as set forth in
Exhibit G-3 to the Credit Agreement) becomes a Funded Project, Contributions
with respect to such Turbine shall be deemed Contributions with respect to such
Project.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together
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with a Portfolio Entity, are treated as a single employer under Sections 414(b),
(c), (m) or (o) of the Code.
"Corporate Portfolio Entities" means, collectively, CPN
Freestone, Inc. and Calpine Freestone, Inc.
"Corpus - Phase I Project" means the Initial Project titled "Corpus
Christi Energy Center 1" set forth on Exhibit G-1 to the Credit Agreement.
"Costs" means, collectively, Project Costs and Turbine Costs.
"Co-Syndication Agents" means each of The Bank of Nova Scotia, Banc
of America Securities LLC and ING (U.S.) Capital LLC.
"Credit Agreement" means the Credit Agreement dated as of October
16, 2000 by and among Borrower, Administrative Agent, Lead Arrangers, Arrangers,
LC Bank, Co-Documentation Agents, Co-Syndication Agents, Bookrunner and the
Banks.
"Credit Documents" means the Credit Agreement, the Notes, the
Portfolio Entity Notes, the Collateral Documents, the Letters of Credit and any
other loan or security agreements or letter agreement or similar document,
entered into by Administrative Agent and one or more Major Project Participants
in connection with the transactions contemplated by the Credit Documents.
"Date Certain" means the fourth anniversary of the Closing Date,
provided, however, that the Date Certain may be extended up to the fifth
anniversary of the Closing Date in accordance with Section 2.11 of the Credit
Agreement.
"Debt" of any Person at any date means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (c)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (d) all obligations of such Person under leases which are or should
be, in accordance with GAAP, recorded as capital leases in respect of which such
Person is liable, (e) all obligations of such Person to purchase securities (or
other property) which arise out of or in connection with the sale of the same or
substantially similar securities (or property), (f) all deferred obligations of
such Person to reimburse any bank or other Person in respect of amounts paid or
advanced under a letter of credit or other instrument, (g) all Debt of others
secured by a Lien on any asset of such Person, whether or not such Debt is
assumed by such Person, (h) all Debt (or other obligations) of others guaranteed
directly or indirectly by such Person or as to which such Person has an
obligation substantially the economic equivalent of a guaranty and (i)
obligations in respect of Hedge Transactions.
"Debt Service" means all fees of Administrative Agent and the Banks,
interest (including all interest accrued during the subject period) and
principal, Reimbursement Obligations and interest thereon and any other payments
due in connection with Letters of Credit, Liquidation Costs, Hedge Breaking
Fees, and net payments pursuant to Hedge Transactions.
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"Debt to Capitalization Ratio" means the ratio of (x) the aggregate
outstanding principal amount of Debt of the Portfolio Entities (except (a) Debt
consisting of Contributions made in the form of subordinated loans and (b)
Portfolio Entity Debt) at a given time to (y) the sum of the Capitalization of
the Portfolio Entities at such time (excluding, for purposes of clause (y),
Turbine Purchase Loans then outstanding and the aggregate amount of progress
payments made on the Turbines), all calculated in accordance with Section
5.10(c) of the Credit Agreement.
"Debt Subordination Agreement" means a Subordination Agreement
executed by the Member or Calpine, Borrower and Administrative Agent in
substantially the form of Exhibit D-7 to the Credit Agreement and otherwise in
form and substance satisfactory to Administrative Agent.
"Decatur Energy Center Project" means the Initial Project titled
"Decatur Energy Center" set forth on Exhibit G-1 to the Credit Agreement.
"Declined Commitment" has the meaning given in Section 2.11.2 of the
Credit Agreement.
"Deeds of Trust" means, collectively, each of the deeds of trust or
mortgages encumbering the Sites and/or Easements related to the Projects as
security for the Obligations, each in substantially the form of Exhibit D-3 to
the Credit Agreement with such changes as may be appropriate or necessary under
the laws of the jurisdiction in which the respective Project is located.
"Deemed Interest" means interest accruing at an interest rate equal
to 9% per annum; provided, however, that with respect to Contributions made for
a Project or a Turbine prior to Completion of such Project or the Project to
which such Turbine is assigned (as set forth in Exhibit G-3 to the Credit
Agreement), Deemed Interest thereon shall accrue but not be payable until
Completion of the relevant Project, at which time such accrued interest shall be
added to, and be considered part of, the principal amount of such Contribution.
"Default Rate" means the interest rate per annum equal to the
interest rate then applicable plus two percent. Interest computed with reference
to the Default Rate shall be adjusted and calculated in the same manner as
interest computed with reference to the Base Rate.
"Delta Energy Center Project" means the Initial Project titled
"Delta Energy Center" set forth on Exhibit G-1 to the Credit Agreement.
"Delta Energy Center Project Owner" means the Project Owner with
respect to the Delta Energy Center Project.
"Depositary Agent" means The Bank of New York, in its capacity as
depositary agent under the Depositary Agreement.
"Depositary Agreement" means the Depositary Agreement dated as of
October 16, 2000 in substantially the form of Exhibit D-1 to the Credit
Agreement among Borrower, Administrative Agent and Depositary Agent.
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"Designated Project" means the Delta Energy Center Project and any
Subsequent Project that is owned (a) 50% by a wholly-owned direct or indirect
Subsidiary of Borrower and (b) 50% by a wholly-owned direct or indirect
Subsidiary of ▇▇▇▇▇▇▇ Corporation.
"Determination Date" means, with respect to any action to be taken
by the Required Banks under the Credit Documents, including, without limitation,
supplemental agreements with Borrower adding, modifying or waiving any
provisions to the Credit Documents or changing in any manner the rights of the
Banks or Borrower hereunder or waiving any Inchoate Default or Event of Default
under Section 3.12 or 10.9 of the Credit Agreement, a date established by
Administrative Agent by which the Banks disapproving such action must notify
Administrative Agent of the same, such date to allow the Banks a reasonable time
period to consider the action being so requested and in any event not less than
10 Banking Days after the later of (a) the date Borrower or Administrative Agent
notifies the Banks of such proposed action and (b) the date the Banks receive
all documentation and other information which the Technical Committee considers
reasonably necessary for the Banks' consideration of such proposed action and
such additional documentation and other information that a Bank may reasonably
request within five Banking Days after receipt of the documentation and other
information originally provided by the Technical Committee under this clause
(b).
"Development Company" means Calpine CCFC II Development Company,
LLC, a Delaware limited liability company.
"Development Company Security Agreement" means the Development
Company Security Agreement dated as of October 16, 2000 in substantially the
form of Exhibit D-4C to the Credit Agreement as executed by Development Company
in favor of Administrative Agent.
"Disbursement Requisition" means a request for disbursement of funds
submitted by Borrower to Administrative Agent in the form of Exhibit C-10 to the
Credit Agreement.
"Diversification Requirements" means, with respect to any Subsequent
Project, that the fraction determined by dividing (A) the projected net capacity
of such Subsequent Project plus the net capacity of all other Initial Projects
and Funded Subsequent Projects located within the same NERC Region as such
Subsequent Project by (B) the aggregate net capacity of all Initial Projects and
Funded Subsequent Projects (including such Subsequent Project) is less than .50.
"Dollars" and "$" means United States dollars or such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts in the United States of
America.
"Drawdown Certificate" means a Construction Drawdown Certificate or
a Turbine Purchase Drawdown Certificate, as appropriate.
"Drawing Date" has the meaning given in Section 2.2.4 of the Credit
Agreement.
"Drawing Payment" means any payment by LC Bank honoring a drawing
under a Letter of Credit.
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"Easements" means the easements appurtenant, easements in gross,
license agreements and other rights running in favor of a Project Owner and/or
appurtenant to any Site, including without limitation those certain easements
and licenses described in the Title Policies.
"EBITDA" means, for any period, Project Operating Revenues for such
period minus Senior O&M Costs (excluding payments under Equipment Leases) for
such period.
"Eligible Facility" means an eligible facility within the meaning of
PUHCA.
"Eminent Domain Proceeds" has the meaning given in Section 7.6 of
the Credit Agreement.
"Engineering Contracts" means, collectively, for each Project, the
contract or agreement approved by the Technical Committee in accordance with
Section 3.2 or 3.3, as the case may be, of the Credit Agreement entered into by,
or on behalf of, the Project Owner with respect to such Project for the supply
of engineering or design services for such Project.
"Environmental Claim" means any and all liabilities, losses,
administrative, regulatory or judicial actions, suits, demands, decrees, claims,
liens, judgments, warning notices, notices of noncompliance or violation,
investigations, proceedings, removal or remedial actions or orders, or damages
(foreseeable and unforeseeable, including consequential and punitive damages),
penalties, fees, out-of-pocket costs, expenses, disbursements, attorneys' or
consultants' fees, relating in any way to any Hazardous Substance Law or any
Permit issued under any such Hazardous Substance Law (hereafter "Claims"),
including (a) any and all Claims by Governmental Authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Hazardous Substance Law, and (b) any and all Claims by any third
party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Substances or arising
from alleged injury or threat of injury to health, safety or the environment.
"Environmental Reports" means, collectively, for each Project, the
environmental reports delivered to Administrative Agent in accordance with
Section 3.2.13, 3.3.14 or 3.3.41, as the case may be, of the Credit Agreement
with respect to such Project.
"EPC Equivalent Damages" means [*].
"Equipment" has the meaning given in the granting clause of the
Deeds of Trust.
"Equipment Finance Company" means a direct or indirect wholly-owned
Subsidiary of Borrower (or, with the consent of the Required Banks, if the
relevant Project Owner is a partially-owned Subsidiary of Borrower, a
partially-owned Subsidiary of Borrower) that directly owns Turbines or other
equipment leased to one or more Project Owners pursuant to one or more Equipment
Leases. In the event a Turbine Owner leases Turbines to a Project Owner pursuant
to an Equipment Lease, such Turbine Owner shall be deemed an Equipment Finance
Company and shall no longer be considered a Turbine Owner.
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"Equipment Finance Company Security Agreements" means, collectively,
each Equipment Finance Company Security Agreement, in substantially the form of
Exhibit D-4E to the Credit Agreement, executed by an Equipment Finance Company
pursuant to Section 3.1, 3.2 or 3.3 of the Credit Agreement, as the case may be,
with respect to its respective Turbine(s) or other equipment leased to a Project
Owner in favor of Administrative Agent. In the event a Turbine Owner becomes an
Equipment Finance Company pursuant to the definition of "Equipment Finance
Company" or "Turbine Owner" contained herein, the Project/Turbine Owner Security
Agreement previously executed by such Turbine Owner, if any, shall be amended at
such time as the relevant Project becomes a Funded Project as considered
necessary by the Technical Committee to ensure that all rights and assets held
by such Equipment Finance Company related to such Project, including the related
Equipment Lease, have been pledged to Administrative Agent and the Banks, at
which time such Project/Turbine Owner Security Agreement shall be deemed an
Equipment Finance Company Security Agreement.
"Equipment Lease" means a lease entered into between an Equipment
Finance Company, as lessor, and a Project Owner with respect to a Funded
Project, as lessee, pursuant to which such Equipment Finance Company leases to
such Project Owner Turbine(s) and/or other equipment to be used or incorporated
into such Project Owner's Funded Project, in each case as approved by the
Technical Committee pursuant to Section 3.2 or 3.3, as the case may be, of the
Credit Agreement; collectively, the "Equipment Leases".
"Equity Documents" means the Project Completion Guaranty, the
Turbine Purchase Guaranty, the Project Owner Guaranties, and any other guaranty
executed from time to time by a Portfolio Entity, Non-Affiliated Parent, or an
Affiliate of Borrower in favor of Administrative Agent and the Banks.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Plan" means any employee benefit plan (a) maintained by a
Portfolio Entity or any member of the Controlled Group, or to which any of them
contributes or is obligated to contribute, for its employees and (b) covered by
Title IV of ERISA or to which Section 412 of the Code applies.
"Event of Default" has the meaning given in Article 8 of the Credit
Agreement.
"Event of Eminent Domain" means any compulsory transfer or taking by
condemnation, eminent domain or exercise of a similar power, or transfer under
threat of such compulsory transfer or taking, of any part of the Collateral or
any of the real property interests subject to the Deeds of Trust, by any agency,
department, authority, commission, board, instrumentality or political
subdivision of any state, the United States or another Governmental Authority
having jurisdiction.
"Exempt Wholesale Generator" means an exempt wholesale generator
within the meaning of PUHCA.
"Expiration Date" has the meaning given in each Letter of Credit.
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"Federal Funds Rate" means, for any day, the weighted average of the
per annum rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers as published by the
Federal Reserve Bank of New York for such day (or, if such rate is not so
published for any day, the average rate charged by Administrative Agent on such
day on such transactions as determined by Administrative Agent).
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System.
"FERC" means the Federal Energy Regulatory Commission and its
successors.
"Final Completion" means, with respect to any Project, that all
conditions to "Final Completion" shall have been satisfied as provided in
Section 3.7 of the Credit Agreement.
"Final Project Cost" means, with respect to any Project, the actual
total Project Costs through Final Completion of such Project, as determined by
Administrative Agent in consultation with Independent Engineer and Borrower.
"Four-Quarter Portfolio Interest Coverage Ratio" means, as of the
last day of each calendar quarter, the ratio of (a) EBITDA for the 12-month
period ending on such day for the Projects that have achieved (or, in the case
of a projected ratio calculation, are projected to achieve) Commercial Operation
before such day to (b) the sum of (x) Borrower's interest expense allocated to
such Projects plus (y) interest accruing on all outstanding Turbine Loans to the
extent not capitalized or paid for with Contributions in excess of amounts
required under Section 5.17.1 of the Credit Agreement, all in accordance with
GAAP for such 12-month period. In the event that a given Project achieved (or,
in the case of a projected ratio calculation, is projected to achieve)
Commercial Operation at any time during such 12-month period, such Project's
EBITDA and allocated interest expense shall be calculated beginning on the date
Commercial Operation was achieved (or projected to be achieved), all calculated
pursuant to Section 5.10(c) of the Credit Agreement.
"FPA" means the Federal Power Act, excluding Sections 1-18, 21-30,
202(c), 210, 211, 212, 305(c) and any necessary enforcement provision of Part
III of the Act with regard to the foregoing sections.
"Fuel Consultant" means, for each Project, the Person providing fuel
consulting services to the Banks with respect to such Project or their
respective successors appointed pursuant to the Credit Agreement.
"Fuel Manager" means any Person approved by the Technical Committee
in accordance with Section 3.2 or 3.3, as the case may be, of the Credit
Agreement in its capacity as fuel manager under a Fuel Management Agreement.
"Fuel Management Agreements" means, collectively, for each Project,
the fuel management agreement approved by the Technical Committee in accordance
with Section 3.2 or 3.3, as the case may be, of the Credit Agreement and entered
into by the Project Owner with respect to such Project.
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"Fuel Plans" means, collectively, the fuel plans delivered by
Borrower pursuant to Sections 3.2.17, 3.3.18 and Section 3.3.41 of the Credit
Agreement.
"Fuel Supplier" means any wholly-owned subsidiary of Calpine or any
other Person who is supplying fuel and/or related services to a Project pursuant
to a Gas Supply Contract.
"Funded Projects" means, collectively, the Projects that have
satisfied their initial funding requirements under Section 3.2 or 3.3, as the
case may be, of the Credit Agreement.
"Funded Subsequent Projects" means, collectively, the Subsequent
Projects that are Funded Projects.
"Funded Turbines" means, collectively, the Turbines that have
satisfied their initial funding requirements under Section 3.5 of the Credit
Agreement; provided, Funded Turbines do not include Turbines from and after the
date that they are assigned or leased to Funded Projects (as set forth on
Exhibit G-3 to the Credit Agreement) (regardless of whether such Turbines where
Funded Turbines prior to the initial funding of such Project).
"Funding Date" means each date of an initial funding of Loans for a
Project pursuant to Section 3.2 or 3.3, as the case may be, of the Credit
Agreement.
"GAAP" means generally accepted accounting principles in the United
States consistently applied.
"Gas Supply Contracts" means, collectively, the contracts or
agreements entered into in accordance with the Credit Agreement by, or on behalf
of, a Project Owner with a Fuel Supplier for the supply of fuel and/or related
services for a Project.
"Gas Transportation Agreements" means, collectively, the contracts
or agreements entered into in accordance with the Credit Agreement by, or on
behalf of, a Project Owner with a Gas Transporter for the supply of fuel
transportation services for a Project.
"Gas Transporter" means any Person that owns gathering systems
and/or transportation systems that are able to move fuel from its source of
supply to a point of interconnection that provides such services to a Project
pursuant to a Gas Transportation Agreement.
"Governmental Authority" means any national, state or local
government (whether domestic or foreign), any political subdivision thereof or
any other governmental, quasi-governmental, judicial, public or statutory
instrumentality, authority, body, agency, bureau or entity, (including any
zoning authority, FERC, the PUC, the FDIC, the Comptroller of the Currency or
the Federal Reserve Board, any central bank or any comparable authority) or any
arbitrator with authority to bind a party at law.
"Governmental Rule" means any law, rule, regulation, ordinance,
order, code interpretation, treaty, judgment, decree, directive, guidelines,
policy or similar form of decision of any Governmental Authority.
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"Granting Bank" has the meaning given in Section 10.13.2 of the
Credit Agreement.
"Hazardous Substances" means (statutory acronyms and abbreviations
having the meaning given them in the definition of "Hazardous Substances Laws")
substances defined as "hazardous substances," "pollutants" or "contaminants" in
Section 101 of the CERCLA; those substances defined as "hazardous waste,"
"hazardous materials" or "regulated substances" by the RCRA; those substances
designated as a "hazardous substance" pursuant to Section 311 of the CWA; those
substances defined as "hazardous materials" in Section 103 of the HMTA; those
substances regulated as a hazardous chemical substance or mixture or as an
imminently hazardous chemical substance or mixture pursuant to Sections 6 or 7
of the TSCA; those substances defined as "contaminants" by Section 1401 of the
SDWA, if present in excess of permissible levels; those substances regulated by
the Oil Pollution Act; those substances defined as a pesticide pursuant to
Section 2(u) of the FIFRA; those substances defined as a source, special nuclear
or by-product material by Section 11 of the AEA; those substances defined as
"residual radioactive material" by Section 101 of the UMTRCA; those substances
defined as "toxic materials" or "harmful physical agents" pursuant to Section 6
of the OSHA); those substances defined as hazardous wastes in 40 C.F.R. Part
261.3; those substances defined as hazardous waste constituents in 40 C.F.R.
Part 260.10, specifically including Appendix VII and VIII of Subpart D of 40
C.F.R. Part 261; those substances designated as hazardous substances in 40
C.F.R. Parts 116.4 and 302.4; those substances defined as hazardous substances
or hazardous materials in 49 C.F.R. Part 171.8; those substances regulated as
hazardous materials, hazardous substances, or toxic substances in 40 C.F.R. Part
1910; in any other Hazardous Substances Laws; and in the regulations adopted and
publications promulgated pursuant to said laws, whether or not such regulations
or publications are specifically referenced herein.
"Hazardous Substances Law" means any of:
(i) the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.)
("CERCLA");
(ii) the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 et seq.) ("Clean Water Act" or "CWA");
(iii) the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.) ("RCRA");
(iv) the Atomic Energy Act of 1954 (42 U.S.C. Section 2011 et
seq.) ("AEA");
(v) the Clean Air Act (42 U.S.C. Section 7401 et seq.)
("CAA");
(vi) the Emergency Planning and Community Right to Know Act
(42 U.S.C. Section 11001 et seq.) ("EPCRA");
(vii) the Federal Insecticide, Fungicide, and Rodenticide Act
(7 U.S.C. Section 136 et seq.) ("FIFRA");
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(viii) the Oil Pollution Act of 1990 (P.L. 101-380,
104 Stat. 486);
(ix) the Safe Drinking Water Act (42 U.S.C. Sections 300f et
seq.) ("SDWA");
(x) the Surface Mining Control and Reclamation Act of 1974
(30 U.S.C. Sections 1201 et seq.) ("SMCRA");
(xi) the Toxic Substances Control Act (15 U.S.C. Section 2601
et seq.) ("TSCA");
(xii) the Hazardous Materials Transportation Act (49 U.S.C.
Section 1801 et seq.) ("HMTA");
(xiii) the Uranium Mill Tailings Radiation Control Act
of 1978 (42 U.S.C. Section 7901 et seq.) ("UMTRCA");
(xiv) the Occupational Safety and Health Act (29 U.S.C.
Section 651 et seq.) ("OSHA");
(xv) all other Federal Governmental Rules which govern
Hazardous Substances; and
(xxi) and all state and local Governmental Rules which govern
Hazardous Substances in any state or local jurisdiction in which a Project is
located, and the regulations adopted and publications promulgated pursuant to
all such foregoing laws.
"Hedge Breaking Fees" means all reasonable costs, fees and expenses
incurred by Borrower in connection with any unwinding, breach or termination of
the Hedge Transactions, all to the extent provided in and calculated pursuant to
the applicable Interest Rate Agreements.
"Hedge Transaction" means any "Transaction" (such as swaps, caps,
collars or floors) entered into under an Interest Rate Agreement.
"Improvements" has the meaning given in the granting clause in the
Deeds of Trust.
"Inchoate Default" means any occurrence, circumstance or event, or
any combination thereof, which, with the lapse of time and/or the giving of
notice, would constitute an Event of Default.
"Independent Consultants" means, collectively, the Insurance
Consultant, the Fuel Consultant, the Independent Engineer, the Power Marketing
Consultant or their successors appointed pursuant to the Credit Agreement.
"Independent Engineer" means ▇.▇. ▇▇▇▇, Inc., or its successor
appointed pursuant to the Credit Agreement.
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"Information Memorandum" means the descriptive Information
Memorandum with respect to the Projects, Turbines and Credit Agreement prepared
by Co-Syndication Agents in consultation with Borrower for use in connection
with the syndication of the Commitments.
"Initial Contribution" means the Contributions described in Section
3.1.23 of the Credit Agreement.
"Initial Projects" means, collectively, the natural gas-fired power
generating plants utilizing commercially accepted technology located on the
respective Sites, all as further described in Exhibit G-1 to the Credit
Agreement, as such Exhibit may be amended as the result of the replacement of an
Initial Project with a Substituted Initial Project (which Substituted Initial
Project shall thereafter be considered an Initial Project) together with all
buildings, structures or improvements erected on the respective Sites and the
respective Easements with respect to such Sites, all alterations thereto or
replacements thereof, all fixtures, attachments, appliances, equipment,
machinery and other articles attached thereto or used in connection therewith
and all Parts which may from time to time be incorporated or installed in or
attached thereto, all contracts and agreements for the purchase or sale of
commodities or other personal property related thereto, all leases of real or
personal property related thereto, and all other real and tangible and
intangible personal property owned by a Project Owner or by an Equipment Finance
Company and leased to a Project Owner and placed upon or used in connection with
such natural gas-fired power generating plants, whether located upon the
respective Sites and Easements or otherwise; each individually, an "Initial
Project."
"Insurance Consultant" means ▇▇▇▇▇ USA Inc. or its successor
appointed pursuant to the Credit Agreement.
"Insurance Proceeds" has the meaning given in Section 7.5.1 of the
Credit Agreement.
"Intermediate Parents" means, collectively, each of the wholly-owned
Subsidiaries of Borrower that holds a direct or indirect ownership interest in a
Project Owner, an Equipment Finance Company or a Turbine Owner, including,
without limitation, Development Company and CCFC II Equipment Finance Company.
"Interest Period" means, with respect to any LIBOR Loan, the time
period selected by Borrower which commences on the first day of such Loan or the
effective date of any conversion (as the case may be) and ends on the last day
of such time period, provided that no single day shall be deemed to be a part of
two Interest Periods.
"Interest Rate" means the Base Rate or the LIBO Rate, as the case
may be.
"Interest Rate Agreements" means any ISDA Master Agreement and the
schedules thereto between Borrower and the counterparty(ies) thereto and the
transaction confirmations thereunder.
"Inventory" means "inventory," as defined in the UCC, of the
Portfolio Entities.
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"Joint Venture Agreement" has the meaning given in Section 3.3.2 of
the Credit Agreement.
"Joint Venturers" has the meaning given in Section 3.3.2 of the
Credit Agreement.
"LC Action" has the meaning given in Section 3.8 of the Credit
Agreement.
"LC Bank" means Bayerische Landesbank Girozentrale or, from time to
time, the Bank approved by such Bank, Borrower and Administrative Agent that
issues the Letters of Credit, in its capacity as such issuer.
"LC Beneficiary" means the account beneficiary under a Letter of
Credit, or any assignee or transferee of such beneficiary with respect to the
rights of such beneficiary under such Letter of Credit.
"Lead Arrangers" means each of Credit Suisse First Boston, New York
Branch and The Bank of Nova Scotia as the lead arrangers of the Commitments.
"Leases" mean all contracts or agreements approved by the Technical
Committee in accordance with Section 3.2 or 3.3, as the case may be, of the
Credit Agreement entered into by or on behalf of a Project Owner for the leasing
of a Site for a Project.
"Legal Requirements" means, as to any Person, the articles of
incorporation, bylaws or other organizational or governing documents of such
Person, and any requirement under a Permit, and any Governmental Rule in each
case applicable to or binding upon such Person or any of its properties or to
which such Person or any of its property is subject.
"Lending Office" means, with respect to any Bank, the office
designated as such beneath the name of such Bank on Exhibit H of the Credit
Agreement or such other office of such Bank as such Bank may specify from time
to time to Administrative Agent and Borrower.
"Letter of Credit" means a letter of credit issued by LC Bank
pursuant to Section 2.2 of the Credit Agreement in substantially the format of
letters of credit generally issued by LC Bank.
"Letter of Credit Commitment" means, at any time with respect to
each Bank, such Bank's Proportionate Share of the Total Letter of Credit
Commitment at such time.
"Letter of Credit Fee" has the meaning given in Section 2.5.1 of the
Credit Agreement.
"LIBO Rate" means, with respect to any LIBOR Loan for any Interest
Period, the rate per annum determined by Administrative Agent at approximately
11:00 a.m. (London time) on the date which is two Business Days prior to the
beginning of such Interest Period by reference to the British Bankers'
Association Interest Settlement Rates for deposits in Dollars (as set forth by
any service selected by Administrative Agent which has been nominated by the
British Bankers' Association as an authorized information vendor for the purpose
of displaying such rates) for a period equal to such Interest Period; provided
that, to the extent that an interest
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rate is not ascertainable pursuant to the foregoing provisions of this
definition the "LIBO Rate" shall be the interest rate per annum determined by
Administrative Agent to be the average of the rates per annum at which deposits
in Dollars are offered for such Interest Period to major banks in the London
interbank market in London, England by Administrative Agent at approximately
11:00 a.m. (London time) on the date which is two Business Days prior to the
beginning of such Interest Period. Each determination by Administrative Agent
pursuant to this definition shall be conclusive absent manifest error.
"LIBOR Construction Loan" has the meaning given in Section
2.1.1(b)(i) of the Credit Agreement.
"LIBOR Loans" means, collectively, the LIBOR Construction Loans and
the LIBOR Turbine Purchase Loans.
"LIBOR Turbine Purchase Loans" has the meaning given in Section
2.1.2(b)(i) of the Credit Agreement.
"Lien" on any asset means any mortgage, deed of trust, lien, pledge,
charge, security interest, or easement or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected or effective
under applicable law, as well as the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.
"Liquidation Costs" has the meaning given in Section 2.9 of the
Credit Agreement.
"Limited Liability Company Agreement" means that certain Limited
Liability Company Agreement of CCFC II, LLC, dated as of October 16, 2000 and
executed by the Member.
"Loan" means, collectively, the Construction Loans and the
Turbine Purchase Loans.
"Loan Availability Period" means the period from the Closing Date to
the Loan Maturity Date.
"Loan Commitment" means, at any time with respect to each Bank, such
Bank's Proportionate Share of the Total Loan Commitment at such time.
"Loan Maturity Date" means the date that is the earliest to occur of
(a) the acceleration of the Obligations upon and during the occurrence and
continuance of an Event of Default and (b) the Date Certain.
"Los Medanos Energy Center Project" means the Initial Project titled
"Los Medanos Energy Center" set forth on Exhibit G-1 to the Credit Agreement.
"Loss Proceeds Account" has the meaning given in Section 1.1 of the
Depositary Agreement.
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"Maintenance Contracts" means, collectively, the contracts or
agreements approved by the Technical Committee in accordance with Section 3.2 or
3.3, as the case may be, of the Credit Agreement entered into by, or on behalf
of, a Project Owner or an Equipment Finance Company for the supply of
maintenance services for a Project.
"Maintenance Provider" means any entity approved by the Technical
Committee in accordance with Section 3.2 or 3.3, as the case may be, of the
Credit Agreement in its capacity as maintenance provider under a Maintenance
Contract.
"Major Construction Contracts" means, collectively, the Construction
Management Agreement, the Prime Construction Contract, the Engineering Contract
and the Power Island Supply Contract for the Project to which it relates.
"Major Contractors" means, collectively, with respect to a given
Project, the Construction Manager, the Prime Contractor, the Project Engineer
and the Power Island Supplier, if any, for such Project.
"Major Fuel Supplier" means the Fuel Supplier under a Major Gas
Supply Contract.
"Major Gas Supply Contract" means, collectively, (i) one or more Gas
Supply Contracts, with the same Fuel Supplier for the same Project, for more
than 17,000 MMBtu/day in the aggregate (calculated on a yearly average basis)
for a given Project with a term of more than two years or (ii) any Gas Supply
Contract with an Affiliate of Borrower.
"Major Gas Transportation Agreement" means, collectively, (i) one or
more Gas Transportation Agreements, with the same Fuel Transporter for the same
Project, for more than 17,000 MMBtu/day in the aggregate (calculated on a yearly
average basis) for a given Project with a term of more than two years and (ii)
any Gas Transportation Agreement with an Affiliate of Borrower.
"Major Gas Transporter" means the Gas Transporter under a Major Gas
Transportation Agreement.
"Major Maintenance" means labor, materials and other direct expenses
for any overhaul of, or major maintenance procedure for, the Projects which
requires significant disassembly or shutdown of any of the Projects pursuant to
manufacturers' guidelines or recommendations, engineering or operating
considerations or the requirements of any applicable Legal Requirement,
including, without limitation, fees payable under the Maintenance Contracts.
"Major Power Purchase Agreement" means one or more Power Purchase
Documents, with the same power purchaser for the same Project, for more than 100
MW in the aggregate (calculated on a yearly average basis) of capacity and/or
firm energy from a given Project with a term of more than two years.
"Major Power Purchaser" means the Power Purchaser under a Major
Power Purchase Agreement.
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"Major Project Documents" means, collectively, with respect to a
given Project, the Major Construction Contracts, the Project Management
Agreement, the Power Marketing Agreement, the Fuel Management Agreement, the
Maintenance Contract, any Major Gas Supply Contracts, the Affiliated Party
Agreement Guaranty, any guaranty agreements executed by Persons other than
Calpine in favor of the relevant Project Owner pursuant to Sections 3.2.34,
3.3.36 and 6.8 of the Credit Agreement, any Major Gas Transportation Agreements,
any Major Power Purchase Agreements, the Lease, if any, of the applicable Site,
the O&M Agreement, the Equipment Lease, if any, and any Joint Venture Agreement,
if any, for such Project.
"Major Project Participants" means Borrower, the Member, Calpine,
and, with respect to each Project, the Project Owner, the Operator, the Project
Manager, the Power Marketer, the Fuel Manager, the Maintenance Provider, the
lessor under the Lease, if any, of the applicable Site, each Major Contractor,
each Major Power Purchaser, each Major Fuel Supplier, each Major Gas
Transporter, each guarantor that executes a guaranty agreement (other than
Calpine) in favor of a Project Owner pursuant to Sections 3.2.34, 3.3.36 and 6.8
of the Credit Agreement, the Equipment Finance Company, if any, and each Joint
Venturer, if any, for such Project.
"Major Subcontractor" means any subcontractor party to a subcontract
with a Major Contractor providing for the payment to such subcontractor of
$100,000 or more.
"Mandatory Prepayment" has the meaning specified in Section 2.1.7(c)
of the Credit Agreement.
"Material Adverse Effect" means
(a) a material adverse change (i) with respect to Borrower, in the
business, property, results of operation or financial
condition of Borrower, the other Portfolio Entities, the
Initial Projects, the Funded Subsequent Projects, and the
Funded Turbines taken as a whole, or Calpine, and (ii) with
respect to an individual Initial Project, Funded Subsequent
Project or related Project Owner, in the business, property,
results of operating or financial condition of such Project
and the relevant Project Owner taken as a whole; provided that
a change in any Bank's or the Power Marketing Consultant's or
Fuel Consultant's view of future price of electricity or gas
is not a Material Adverse Effect; or
(b) any event or occurrence of whatever nature (but specifically
excluding a change in any Bank's or the Power Marketing
Consultant's or the Fuel Consultant's view of the future price
of electricity or gas) which could reasonably be expected to
materially and adversely affect:
(i) the Portfolio Entities' ability to perform their
obligations under the Credit Documents or, with respect
to an individual Initial Project, Funded Subsequent
Project or Funded Turbine, the ability of such Project,
relevant Project Owner, relevant Major Project
Participant or relevant Turbine Purchase Contractor to
perform its obligations
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under a Project Document or Turbine Purchase Contract,
as the case may be, where such inability to perform will
have a material and adverse effect on the completion of
the construction or operation of such Project or the
purchase and operation of such Turbine, as the case may
be, or
(ii) the Banks' security interests in the Collateral.
"Maturity" or "maturity" means, with respect to any Loan, Borrowing,
interest, fee or other amount payable by Borrower under the Credit Agreement or
the other Credit Documents, the date such Loan, Borrowing, interest, fee or
other amount becomes due, whether upon the stated maturity or due date, upon
acceleration or otherwise.
"Maximum Debt to Capitalization Ratio" means [*].
"Member" means Calpine CCFC II Holdings, Inc., a Delaware
corporation.
"Minimum Notice Period" means at least three Banking Days before the
date of any Borrowing or conversion of Type of Loan resulting in whole or in
part of LIBOR Loans and at least one Banking Day before any Borrowing or
conversion of Type of Loan resulting in whole of Base Rate Loans.
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgaged Properties" has the meaning given in the granting clauses
of the Deeds of Trust.
"Multiemployer Plan" means any multiemployer plan (as defined in
Section 3(37) of ERISA).
"NERC Region" means one of the ten geographic areas within the
United States, Canada and a portion of Baja California Norte designated as a
"region" by the North American Electric Reliability Counsel.
"Net Worth" means, at any time, the aggregate net equity of the
Portfolio Entities set forth in the balance sheet of the Portfolio Entities,
prepared in accordance with GAAP.
"Non-Advancing Bank" has the meaning given in Section 10.12 of the
Credit Agreement.
"Non-Affiliated Parents" means, collectively, each Person other than
Borrower or a wholly-owned Subsidiary of Borrower who directly owns equity
interests in a Project Owner.
"Non-Fundamental Project Default" with respect to any Initial
Project or Funded Subsequent Project means the occurrence of any of the
following events with respect to such Project:
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(a) Breach of Project Documents.
(i) Portfolio Entities. Any of the relevant Portfolio
Entities shall be in breach of any term, condition, provision, covenant,
representation, warranty or obligation, or in default, under a Project Document
relating to such Project, and such breach or default shall not be remediable or,
if remediable, shall continue unremedied for a period of 30 days; provided that
if (A) such breach cannot be cured within such 30 day period, (B) such breach is
susceptible of cure within 90 days, (C) the relevant Portfolio Entity is
proceeding with diligence and in good faith to cure such breach, (D) the
existence of such breach has not had and could not after considering the nature
of the cure, be reasonably expected to give rise to termination by the
counterparty to the Project Document which is subject to breach or to otherwise
have a Material Adverse Effect on such Project and (E) Administrative Agent
shall have received an officer's certificate signed by a Responsible Officer of
Borrower to the effect of clauses (A), (B), (C) and (D) above and stating what
action such Portfolio Entity is taking to cure such breach, then such 30 day
cure period shall be extended to such date, not to exceed a total of 90 days, as
shall be necessary for such Portfolio Entity diligently to cure such breach.
(ii) Third Party. A party other than the relevant Portfolio
Entities shall be in breach of, or in default under, a Project Document relating
to such Project or any Consent, or any Equity Document (other than the Project
Completion Guaranty), such breach could reasonably be expected to have a
Material Adverse Effect on such Project, and such breach or default shall not be
remediable or, if remediable, shall continue unremedied for a period of 30 days;
provided that if (A) such breach cannot be cured within such 30 day period, (B)
such breach is susceptible of cure within 90 days, (C) the breaching party is
proceeding with diligence and in good faith to cure such breach, and (D) the
existence of such breach has not had and could not after considering the nature
of the cure, be reasonably expected to have a Material Adverse Effect on such
Project then, such 30 day cure period shall be extended to such date, not to
exceed a total of 90 days, as shall be necessary for such third party diligently
to cure such breach; provided further that, no Event of Default shall be
declared as a result of any such action if the relevant Portfolio Entity obtains
a Replacement Obligor for the affected party within the 90 day cure period
referred to in this paragraph (or within the 30 day cure period, if no extension
is given) and such action has not had and does not have prior to so obtaining
such Replacement Obligor a Material Adverse Effect on such Project.
(iii) Termination. Any material provision in any Project
Document relating to such Project shall for any reason cease to be valid and
binding on any party thereto (other than the relevant Portfolio Entities) except
upon fulfillment of such party's obligations thereunder (or any such party shall
so state in writing), or shall be declared null and void, or the validity or
enforceability thereof shall be contested by any party thereto (other than
Administrative Agent and the Banks) or any Governmental Authority, or any such
party shall deny that it has any liability or obligation thereunder, except upon
fulfillment of its obligations thereunder, and such occurrence could reasonably
be expected to have a Material Adverse Effect on such Project; provided that no
Event of Default shall occur as a result of such breach or default if the
relevant Portfolio Entity obtains a Replacement Obligor for the affected party
within 90 days thereafter and, such breach or default has not had and does not
have prior to so obtaining such Replacement Obligor, a Material Adverse Effect
on such Project.
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(b) Breach of Covenants. Borrower or the relevant Project Owner
under its respective Project Owners Guaranty shall fail to perform or observe
any of the covenants (in the case of the relevant Project Owner, as if such
covenants were fully set forth and incorporated in its respective Project Owners
Guaranty) set forth in Section 5.2.2, 5.3, 5.4 (if the event with respect to
which notice is required to be given relates to such Project), 5.5 (if the party
whose financial statements were not properly delivered is not a Calpine
Affiliate), 5.6 (with respect to books, records and accounts of such Project),
5.7 (if the failure to comply with the Legal Requirement relates to such
Project), 5.8, 5.9(b), (c), (d), (e) or (f), 5.13, 5.14, 5.15, 5.16.1, 5.16.3,
5.21, 5.22, 5.23, 6.14, 6.20 or 6.23 and such failure shall continue unremedied
for a period of 30 days after Borrower becomes aware thereof or receives written
notice thereof from Administrative Agent provided, however, that, if (i) such
failure cannot be cured within such 30 day period, (ii) such failure is
susceptible of cure, (iii) the relevant Project Owner is proceeding with
diligence and in good faith to cure such failure, (iv) the existence of such
failure has not had and cannot after considering the nature of the cure be
reasonably expected to have a Material Adverse Effect on such Project and (v)
Administrative Agent shall have received an officer's certificate signed by a
Responsible Officer of Borrower to the effect of clauses (i), (ii), (iii) and
(iv) above and stating what action the relevant Project Owner is taking to cure
such failure, then such 30 day cure period shall be extended to such date, not
to exceed a total of 90 days, as shall be necessary for such Project Owner
diligently to cure such failure.
(c) Material Adverse Effect. The occurrence of any event or
circumstance having a Material Adverse Effect on such Project.
(d) Omissions. Any financial statement, representation, warranty
or certificate made or prepared by, under the control of or on behalf of a
Portfolio Entity and furnished to Administrative Agent, the Lead Arrangers, the
Technical Committee or any Bank pursuant to this Agreement, or in any separate
statement or document to be delivered to Administrative Agent or any Bank
hereunder or under any other Credit Document, shall contain an untrue or
misleading statement of a material fact or shall fail to state a material fact
necessary to make the statements therein not misleading as of the date made, in
either case, which could reasonably be expected to result in a Material Adverse
Effect on such Project.
"Non-Fundamental Project Inchoate Default" means, with respect to
any Initial Project or Funded Subsequent Project, any occurrence, circumstance
or event, or any combination thereof, which, with the lapse of time or giving of
notice, would constitute a Non-Fundamental Project Default with respect to such
Project.
"Nonrecourse Persons" has the meaning given in Article 9 of the
Credit Agreement.
"Notice of Borrowing" means a Notice of Construction Borrowing or a
Notice of Turbine Purchase Borrowing, as appropriate.
"Note" has the meaning given in Section 2.1.4 of the Credit
Agreement.
"Notice of Construction Borrowing" has the meaning given in Section
2.1.1(b) of the Credit Agreement.
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"Notice of Conversion of Loan Type" has the meaning given in Section
2.1.6 of the Credit Agreement.
"Notice of LC Activity" has the meaning given in Section 2.2.3 of
the Credit Agreement.
"Notice of Turbine Purchase Borrowing" has the meaning given in
Section 2.1.2(b) of the Credit Agreement.
"O&M Agreement" means the contracts or agreements approved by the
Technical Committee in accordance with Section 3.2 or 3.3, as the case may be,
of the Credit Agreement entered into by, or on behalf of, a Project Owner for
the operation or maintenance of a Project.
"O&M Costs" means all actual cash maintenance and operation costs
incurred and paid for any Project in any particular calendar or fiscal year or
period to which said term is applicable, including payments for fuel, additives
or chemicals and transportation costs related thereto, replacement energy,
capacity and other products or services required to be obtained by a Project
Owner under any Power Purchase Agreement, Major Maintenance costs, local, sales
and real estate taxes, income taxes of any Portfolio Entity, insurance,
consumables, payments made in connection with the requirements of any Permit or
Legal Requirement, payments under any lease (including an Equipment Lease),
payments pursuant to the agreements for the management, operation and
maintenance of the applicable Project, payments for goods or services, including
project management, power marketer and fuel management services, provided or
rendered to the owner of such Project, legal, accounting and consulting fees and
expenses paid by the owner of such Project in connection with the management,
maintenance or operation of Project, fees paid in connection with obtaining,
transferring, maintaining or amending any Permits and reasonable general and
administrative expenses, but exclusive in all cases of non-cash charges,
including depreciation or obsolescence charges or reserves therefor,
amortization of intangibles or other bookkeeping entries of a similar nature,
and also exclusive of all interest charges and charges for the payment or
amortization of principal of indebtedness of the owner of the applicable
Project. O&M Costs shall not include (a) distributions of any kind (as opposed
to payments for goods or services) to a Project Owner or its Affiliates, (b)
depreciation, (c) capital expenditures other than those incurred in an emergency
included in and approved as part of an Annual Operating Budget or (d) payments
for restoration or repair of such Project from the Loss Proceeds Account in
accordance with the terms of the Credit Agreement. In the case of Projects that
are not wholly-owned by a Project Owner, O&M Costs shall consist of a pro rata
portion (based on such Project Owner's ownership percentage in such Project) of
the amounts of costs described above.
"Obligations" means and includes, with respect to any Person, all
loans, advances, debts, liabilities, and obligations, howsoever arising, owed by
such Person to Administrative Agent, LC Bank, Lead Arrangers, Technical
Committee or the Banks of every kind and description (whether or not evidenced
by any note or instrument and whether or not for the payment of money), direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, pursuant to the terms of the Credit Agreement or any of the
other Credit Documents, including all interest, fees, charges, expenses,
attorneys' fees and accountants fees chargeable to such Person and payable by
such Person hereunder or thereunder.
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"▇▇▇▇▇ Energy Center Project" means the Initial Project titled
"▇▇▇▇▇ Energy Center" set forth on Exhibit G-1 to the Credit Agreement.
"Operating Account" has the meaning given in Section 7.3.1 of the
Credit Agreement.
"Operation" means, with respect to any Project, the commencement of
performance testing with respect to such Project.
"Operative Documents" means the Credit Documents, the Project
Documents, the Turbine Purchase Contracts and any Additional Project Documents.
"Operator" means any wholly-owned subsidiary of Calpine or any other
Person approved by the Technical Committee in accordance with Section 3.2 or
3.3, as the case may be, of the Credit Agreement in its capacity as operator
under an O&M Agreement.
"Other Taxes" has the meaning given in Section 2.6.4(a) of the
Credit Agreement.
"Outstanding Committed Credit" means, as of a given date, the total
of the aggregate principal amount of all Loans then outstanding.
"Parts" means any part, appliance, instrument, appurtenance,
accessory or other property of any nature necessary or useful to the operation,
maintenance, service or repair of a Project.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under Title IV of ERISA.
"Performance Tests" means, for any Project, the "acceptance tests"
or "performance tests" (however defined) under the Major Construction Contracts
for such Project.
"Permit" means any action, approval, consent, waiver, exemption,
variance, franchise, order, permit, authorization, right or license of or from a
Governmental Authority.
"Permit Schedule" has the meaning given in Section 3.2.18 of the
Credit Agreement.
"Permitted Debt" means: (a) indebtedness incurred under the Credit
Documents, (b) indebtedness to any party pursuant to the terms of an Operative
Document, not more than 90 days past due or being contested in good faith and by
appropriate proceedings, (c) trade or other similar indebtedness incurred in the
ordinary course of business (but not for borrowed money) (i) not more than 90
days past due, or (ii) being contested in good faith and by appropriate
proceedings, (d) contingent liabilities permitted pursuant to Section 6.1 of the
Credit Agreement, (e) indebtedness incurred pursuant to a Contribution, (f)
Interest Rate Agreements with an aggregate notional amount not to exceed at any
time the Outstanding Committed Credit, (g) Contributions in the form of
subordinated debt, (h) Portfolio Entity Debt, (i) indebtedness incurred by the
Delta Energy Center Project Owner pursuant to the Calpine DEC Credit Agreement,
such indebtedness to be subordinated to the indebtedness incurred under the
Credit
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Documents pursuant to a subordination agreement in form and substance
satisfactory to Administrative Agent and (j) rights under Equipment Leases.
"Permitted Encumbrances" means (a) with respect to the Funded
Projects, those liens, encumbrances or other exceptions to title satisfactory to
the Technical Committee and specified on a Title Policy pursuant to Sections
3.2.28(a), 3.3.30(a) and 3.3.41 of the Credit Agreement, and (b) with respect to
the Unfunded Subsequent Projects, those liens, encumbrances, or other exceptions
to title which do not result in a Material Adverse Effect on Borrower.
"Permitted Investments" means (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having a maturity not exceeding
one year from the date of issuance, (ii) time deposits and certificates of
deposit of any Bank or any domestic commercial bank rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇
having capital and surplus in excess of $500,000,000, (iii) commercial paper of
any domestic corporation rated at least A-1 or the equivalent thereof by S&P or
at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇ and, in each case, having a
maturity not exceeding 90 days from the date of acquisition, (iv) fully secured
repurchase obligations with a term of not more than seven (7) days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications established in clause (ii) above and
(v) money market mutual funds.
"Permitted Liens" means (a) the rights and interests of the Banks as
provided in the Credit Documents, (b) Liens for any tax, assessment or other
governmental charge, either secured by a bond or other security reasonably
acceptable to Administrative Agent or not yet due or being contested in good
faith and by appropriate proceedings, so long as (i) such proceedings shall not
involve any substantial danger of the sale, forfeiture or loss of an Initial
Project or a Funded Subsequent Project, or the related Site or any related
Easements, or a Funded Turbine, as the case may be, title thereto or any
interest therein and shall not interfere in any material respect with the use or
disposition of such Project, Site or any Easements, or (ii) a bond or other
security reasonably acceptable to Administrative Agent has been posted or
provided in such manner and amount as to assure Administrative Agent that any
taxes, assessments or other charges determined to be due will be promptly paid
in full when such contest is determined, (c) materialmen's, mechanics',
workers', repairmen's, employees' or other like Liens, junior in right of
payment to the Lien of the Collateral Documents or for which the Banks are
otherwise indemnified, arising in the ordinary course of business or in
connection with the construction of an Initial Project or a Funded Subsequent
Project or the purchase of a Funded Turbine, either for amounts not yet due or
for amounts being contested in good faith and by appropriate proceedings, so
long as (i) such proceedings shall not involve any substantial danger of the
sale, forfeiture or loss of such Project or the related Site or any related
Easements or such Turbine, as the case may be, title thereto or any interest
therein and shall not interfere in any material respect with the use or
disposition of such Project, Site or Easements, or such Turbine, or (ii) a bond
or other security reasonably acceptable to Administrative Agent has been posted
or provided in such manner and amount as to assure Administrative Agent that any
amounts determined to be due will be promptly paid in full when such contest is
determined, (d) Liens arising out of judgments or awards so long as an appeal or
proceeding for review is being prosecuted in good
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faith and for the payment of which adequate reserves, bonds or other security
reasonably acceptable to Administrative Agent have been provided or are fully
covered by insurance, (e) Permitted Encumbrances, (f) Liens, deposits or pledges
to secure statutory obligations or performance of bids, tenders, contracts
(other than for the repayment of borrowed money) or leases, or for purposes of
like general nature in the ordinary course of its business, not to exceed
$2,000,000 in the aggregate at any time, and with any such Lien to be released
as promptly as practicable, (g) other Liens incident to the ordinary course of
business that are not incurred in connection with the obtaining of any loan,
advance or credit and that do not in the aggregate materially impair the use of
the property or assets of the Portfolio Entities or the value of such property
or assets for the purposes of such business, (h) involuntary Liens as
contemplated by the Operative Documents (including a lien of an attachment,
judgment or execution) securing a charge or obligation, on the Portfolio
Entities' property, either real or personal, whether now or hereafter owned in
the aggregate sum of less than $1,000,000, (i) with respect to the Delta Energy
Center Project, Liens securing indebtedness incurred pursuant to the Calpine DEC
Credit Agreement which are subordinated to the Liens under the Credit Documents
pursuant to a subordination agreement in form and substance satisfactory to
Administrative Agent and (j) rights under any Equipment Lease.
"Person" means any natural person, corporation, partnership, limited
liability company, firm, association, Governmental Authority or any other entity
whether acting in an individual, fiduciary or other capacity.
"Plans and Specifications" means, collectively, the plans and
specifications for the construction and design of the Projects, including any
document describing the scope of work performed by the Contractors under the
Construction Contracts or any other contract for the construction of the
Projects and any transmission or other interconnection facilities, all work
drawings, engineering and construction schedules, project schedules, project
monitoring systems, specifications status lists, material and procurement
ledgers, drawings and drawing lists, manpower allocation documents, management
and project procedures documents, project design criteria, and any other
document referred to in the Construction Contracts or any of the documents
referred to in this definition.
"Pledge Agreements (Pledged Equity Interests)" means, collectively,
each Pledge Agreement (Pledged Equity Interests), in substantially the form of
Exhibit D-9 to the Credit Agreement, executed by the Member, a Portfolio Entity
(other than a Project Owner, an Equipment Finance Company or a Turbine Owner
(unless such Equipment Finance Company or Turbine Owner is also an Intermediate
Parent)) or a Non-Affiliated Parent, as the case may be, pursuant to Section
3.1, 3.2, 3.3 or 3.5, as the case may be, with respect to Pledged Equity
Interests held by such Person in favor of Administrative Agent.
"Pledged Equity Interests" means the equity interests of each
Portfolio Entity, such equity interests being pledged as security to
Administrative Agent by the Member, the Portfolio Entities (other than the
Project Owners, the Equipment Finance Companies and the Turbine Owners (unless
such Equipment Finance Companies or Turbine Owners are also Intermediate
Parents)) or the Non-Affiliated Parents, as the case may be, pursuant to the
Pledge Agreements (Pledged Equity Interests).
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"Portfolio Entities" means, collectively, Borrower, the Project
Owners and their Intermediate Parents, the Equipment Finance Companies and their
Intermediate Parents and the Turbine Owners and their Intermediate Parents.
"Portfolio Entity Debt" means collectively, the subordinated loans
made by (a) Borrower to Development Company or CCFC II Equipment Finance Company
and (b) Development Company or CCFC II Equipment Finance Company (or their
successors) to each of the Project Owners, Turbine Owners and Equipment Finance
Companies, as applicable, in each case evidenced by the Portfolio Entity Notes
in accordance with Section 7.14 of the Credit Agreement.
"Portfolio Entity Notes" means, collectively, each of the promissory
notes, in substantially the form of Exhibit D-10 to the Credit Agreement, (a)
issued by a Project Owner, a Turbine Owner or an Equipment Finance Company in
favor of Development Company or CCFC II Equipment Finance Company and (b) issued
by Development Company or CCFC II Equipment Finance Company in favor of
Borrower, such Portfolio Entity Notes being pledged as security to
Administrative Agent by Development Company, CCFC II Equipment Finance Company
and Borrower pursuant to the Development Company Security Agreement, the CCFC II
Equipment Finance Company Security Agreement and the Borrower Security
Agreement, respectively.
"Power Island Supplier" means the Turbine Purchase Contractor or any
entity approved by the Technical Committee in accordance with Section 3.2 or
3.3, as the case may be, of the Credit Agreement in its capacity as supplier
under one or more Power Island Supply Contracts.
"Power Island Supply Contracts" means, collectively, the contracts
or agreements for the purchase or supply of the "power island" (combustion
turbines, steam turbine, HRSGs, etc.) for a Project (including any Turbine
Purchase Contract related thereto) between the Project Owner, the Turbine Owner
or the Equipment Finance Company, if any, and the Power Island Suppliers for
such Project and approved by the Technical Committee pursuant to Section 3.2 or
3.3, as the case may be, of the Credit Agreement.
"Power Marketer" means any wholly-owned subsidiary of Calpine or any
other Person approved by the Technical Committee in accordance with Section 3.2
or 3.3, as the case may be, of the Credit Agreement in its capacity as power
marketer under a Power Marketing Agreement.
"Power Marketing Agreement" means, collectively, for each Project,
the power marketing agreement approved by the Technical Committee in accordance
with Section 3.2 or 3.3, as the case may be, of the Credit Agreement and entered
into by the Project Owner with respect to such Project.
"Power Marketing Consultants" means for each Project, the nationally
recognized independent power marketing consultants providing power marketing
consulting services with respect to such Project to the Banks or their
representatives.
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"Power Marketing Plan" means, collectively, the power marketing
plans delivered by Borrower pursuant to Sections 3.2.16, 3.3.17 and 3.3.41 of
the Credit Agreement.
"Power Purchase Documents" means, collectively, for each Project,
contracts or agreements entered into by, or on behalf of, the Project Owner with
respect to such Project in accordance with the Credit Agreement for the sale of
electrical and/or steam energy or capacity or any ancillary or other related
services, including transmission services, from such Project.
"Power Purchaser" means any Person who is purchasing electrical
and/or steam energy or capacity or ancillary or other related services pursuant
to any Power Purchase Document.
"Prime Construction Contracts" means, for each Project, the contract
or agreement approved by the Technical Committee in accordance with Section 3.2
or 3.3, as the case may be, of the Credit Agreement entered into by, or on
behalf of, the Project Owner with respect to such Project for either (i) the
design and construction of the entire Project on a "turnkey" basis or (ii) the
construction of that portion of the Project not included within the scope of the
Power Island Supply Contract pursuant to plans or designs prepared by the
Project Engineer for such Project.
"Prime Contractor" means any entity approved by the Technical
Committee in accordance with Section 3.2 or 3.3, as the case may be, of the
Credit Agreement in its capacity as prime contractor under a Prime Construction
Contract.
"Proceeds" has the meaning given in Section 7.9 of the Credit
Agreement.
"Prohibited Transaction" means any transaction set forth in Section
406 of ERISA or Section 4975 of the Code which is not exempt under Section 408
of ERISA or Section 4975 of the Code.
"Project" means an Initial Project or a Subsequent Project;
collectively, the "Projects".
"Project Budget" means, collectively, the project budgets delivered
by Borrower pursuant to Sections 3.1.14, 3.3.25 and 3.3.41 of the Credit
Agreement.
"Project Completion Guaranty" means the Project Completion Guaranty
dated as of October 16, 2000 on substantially the form of Exhibit D-2B to the
Credit Agreement executed by Calpine in favor of Administrative Agent.
"Project Costs" means, with respect to any Project or any Portfolio
Entity, the cost of the development, design, engineering, acquisition,
equipping, construction, assembly, inspection, testing, completion, and start-up
of a Project, including: (a) all amounts payable under the Construction
Contracts, any contractor bonuses, site acquisition and preparation costs, any
interconnection and transmission upgrade costs payable by a Project Owner
pursuant to the Power Purchase Documents, all steam and water interconnection
costs, all costs related to water clarification facilities and/or water
treatment facilities and all costs of acquisition and construction of natural
gas fuel handling and processing equipment (if any) and interconnection
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expenses payable pursuant to the Gas Supply Contracts and the Gas Transportation
Agreements after the Closing Date; (b) financing, advisory, legal and other
fees; (c) all other costs, including fuel-related costs and prepaid fuel costs,
management services fees and expenses and expenses to complete the acquisition,
construction and financing of such Project; (d) interest and fees payable on or
in respect of any Note or Loan Commitments pursuant to the Credit Agreement
prior to Final Completion of such Project; (e) payments and fees under the
Interest Rate Agreements; provided, however, that "Project Costs" shall not
include any contingency and (f) the initial working capital for a Project as
included in the applicable Project Budget. Project Costs with respect to a
Funded Project shall include Turbine Costs for Turbines assigned or leased to
such Project regardless of whether such Turbine Costs were funded by Turbine
Purchase Loans prior to such Project becoming a Funded Project. Except as
otherwise set forth in Section 3.3.2 or 3.3.41 of the Credit Agreement, in the
case of Projects that are not wholly owned by a Project Owner, Project Costs
shall consist of a pro rata portion (based on such Project Owner's ownership
percentage in such Project) of the amounts of costs described above.
"Project Documents" means, collectively, agreements or documents
relating to the development, construction or operation of any Project, including
Turbine Purchase Contracts assigned to a Project Owner, entered into by a
Project Owner, a Turbine Owner or an Equipment Finance Company and approved by
the Technical Committee in accordance with and to the extent required under
Section 3.2 or 3.3, as the case may be, of the Credit Agreement.
"Project Engineer" means any entity approved by the Technical
Committee in accordance with Section 3.2 or 3.3, as the case may be, of the
Credit Agreement in its capacity as project engineer under an Engineering
Contract.
"Project Management Agreement" means, collectively, each agreement
or document relating to the provision of management services to a Project,
entered into by the Project Owner with respect to such Project and approved by
the Technical Committee in accordance with Section 3.2 or 3.3, as the case may
be, of the Credit Agreement.
"Project Manager" means any wholly-owned subsidiary of Calpine or
any other Person approved by the Technical Committee in accordance with Section
3.2 or 3.3, as the case may be, of the Credit Agreement in its capacity as
project manager under a Project Management Agreement.
"Project Operating Revenues" means all payments received by a
Project Owner under the Power Purchase Documents (excluding damages, liquidated
damages and certain other payments described in Section 7.7 of the Credit
Agreement to the extent deposited in the Loss Proceeds Account), proceeds of any
business interruption insurance, income derived from the sale or use of electric
or thermal capacity or energy transmitted or distributed by any Project,
payments for remarketing of fuel or transportation rights relating thereto, and
net payments, if any, received by Borrower under Hedge Transactions, all as
determined in conformity with cash accounting principles, and the investment
income on amounts in the Accounts (but solely to the extent deposited in the
Revenue Account).
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"Project Owners" means, collectively, each of the direct or indirect
Subsidiaries of Borrower that directly develops and owns all or a portion of an
Initial Project or a Funded Subsequent Project in accordance with the Credit
Agreement.
"Project Owner Guaranties" means, collectively, each Project Owner
Guaranty, in substantially the form of Exhibit D-4A to the Credit Agreement,
executed by each Project Owner pursuant to Sections 3.1, 3.2, or 3.3 of the
Credit Agreement, as the case may be, with respect to its respective Project, in
favor of Administrative Agent.
"Project Revenues" means all income and receipts of the Portfolio
Entities (including Equipment Finance Companies pursuant to Equipment Leases
(except as provided in Section 6.6(b) of the Credit Agreement)) derived from the
ownership or operation of the Projects, including payments received by the
Portfolio Entities under the Power Purchase Documents, Construction Contracts
and O&M Agreements (including damages, liquidated damages and certain other
payments described in Section 7.7 of the Credit Agreement), proceeds of any
delay in start up or business interruption or other insurance, income derived
from the sale or use of electric or thermal capacity or energy transmitted or
distributed by any Project, payments for remarketing of fuel or transportation
rights relating thereto, and net payments, if any, received by Borrower under
Hedge Transactions, together with any receipts derived from the sale of any
property pertaining to any Project or incidental to the operation of any
Project, all as determined in conformity with cash accounting principles, the
investment income on amounts in the Accounts (but solely to the extent deposited
in the Revenue Account), the proceeds of any condemnation awards relating to any
Project and proceeds from the Collateral Documents with respect to Projects.
"Projects Five Through Twelve" means, collectively, each of the
fifth through twelfth Projects to become a Funded Project.
"Projects One Through Four" means, collectively, each of the first
four Initial Projects to become a Funded Project.
"Project Schedules" means, collectively, the project schedules
delivered by Borrower pursuant to Sections 3.1.15, 3.2.25, 3.3.26 and 3.3.41 of
the Credit Agreement.
"Project/Turbine Owner Security Agreements" means, collectively,
each Project/Turbine Owner Security Agreement, in substantially the form of
Exhibit D-4A to the Credit Agreement, executed by a Project Owner or a Turbine
Owner pursuant to Section 3.1, 3.2, 3.3 or 3.5 of the Credit Agreement, as the
case may be, with respect to its respective Projects or Turbine(s), as the case
may be, in favor of Administrative Agent.
"Proportionate Share" means, with respect to each Bank, the
percentage participation of such Bank in the Total Loan Commitment, the Total
Turbine Purchase Loan Commitment or the Total Letter of Credit Commitment,
respectively, as set forth on Exhibit H to the Credit Agreement. Upon any
transfer by a Bank of all or part of its Commitments, Administrative Agent may
revise Exhibit H to reflect the Banks' Proportionate Shares after giving effect
to such transfer.
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"Prudent Utility Practices" means those practices, methods,
equipment, specifications and standards of safety and performance, as the same
may change from time to time, as are commonly used by gas fired electric
generation stations in the state where a Project is located, as applicable, of a
type and size similar to the applicable Project as good, safe and prudent
engineering practices in connection with the design, construction, operation,
maintenance, repair and use of electrical and other equipment, facilities and
improvements of such electrical station, with commensurate standards of safety,
performance, dependability, efficiency and economy. Prudent Utility Practices
does not necessarily mean one particular practice, method, equipment
specification or standard in all cases, but is instead intended to encompass a
broad range of acceptable practices, methods, equipment specifications and
standards.
"PUC" means, with respect to a Project, the Public Utility
Commission, Public Service Commission, or equivalent Government Authority in the
state where a Project is located.
"PUHCA" means the Public Utility Holding Company Act of 1935 and all
rules and regulations adopted thereunder.
"PURPA" means the Public Utility Regulatory Policies Act of 1978 and
all rules and regulations adopted thereunder.
"Qualifying Facility" means a qualifying facility within the meaning
of PURPA.
"Receivables" means "accounts" and "general intangibles", as such
terms are defined in Section 9-106 of the UCC, of the Portfolio Entities and any
chattel paper, document or instrument relating to any such account or general
intangible and any security agreement, lease or other contract securing any of
the foregoing.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System (or any successor).
"Regulatory Change" means any change after the date of the Credit
Agreement in federal, state, local or foreign laws, regulations, Legal
Requirements or requirements under Applicable Permits, or the adoption or making
after such date of any interpretations, directives or requests of or under any
federal, state, local or foreign laws, regulations, Legal Requirements or
requirements under Applicable Permits (whether or not having the force of law)
by any Governmental Authority charged with the interpretation or administration
thereof.
"Reimbursement Obligation" means Borrower's obligation to repay
Drawing Payments under any of the Letters of Credit as provided in Sections
2.2.4 and 2.2.5 of the Credit Agreement.
"Reimbursement Payment" means a payment made by or on behalf of
Borrower in partial or complete satisfaction of a Reimbursement Obligation,
including any interest payment obligation in connection therewith.
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"Release" means disposing, discharging, injecting, spilling,
leaking, leaching, dumping, pumping, pouring, emitting, escaping, emptying,
seeping, placing and the like, into or upon any land or water or air, or
otherwise entering into the environment.
"Renewal Notice" has the meaning given in Section 2.11.2 of the
Credit Agreement.
"Renewing Bank" has the meaning given in Section 2.11.2 of the
Credit Agreement.
"Replacement Bank" has the meaning given in Section 2.11.3 of the
Credit Agreement.
"Replacement Obligor" means, with respect to any Person party to a
Project Document, any Person satisfactory to the Required Banks and having
credit, or acceptable credit support, equal to or greater than that of the
replaced Person on the date that the applicable Project Document was entered
into (or otherwise acceptable to the Required Banks) who, pursuant to any
definitive agreement, definitive guaranty or definitive backup arrangement, in
each case reasonably satisfactory to the Required Banks, assumes the obligation
of providing the services and/or products on terms and conditions no less
favorable to Borrower than those which such Person is obligated to provide
pursuant to the applicable Project Document.
"Required Banks" means, at any time, Banks having Proportionate
Shares which in the aggregate exceed 66.67%.
"Required Contribution Percentage" means the applicable percentage
set forth in the column titled "Required Contribution Percentage" on Schedule 1
to the Credit Agreement related to the period in question.
"Reserve Requirement" means, for LIBOR Loans, the maximum rate
(expressed as a percentage) at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during the
Interest Period therefor under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding $1,000,000,000 against
"Eurocurrency liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks by reason of any
Regulatory Change against (i) any category of liabilities which includes
deposits by reference to which the LIBO Rate or LIBOR Loans is to be determined,
(ii) any category of liabilities or extensions of credit or other assets which
include LIBOR Loans or (iii) any category of liabilities or extensions of credit
which are considered irrevocable commitments to lend.
"Responsible Officer" means, as to any Person, its president, chief
executive officer, any vice president, treasurer, or secretary or any managing
general partner (or any of the preceding with regard to such managing general
partner).
"Revenue Account" has the meaning given in Section 1.1 of the
Depositary Agreement.
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"S&P" means Standard & Poor's Corporation.
"Santa ▇▇▇▇ - Phase I Project" means the Initial Project titled
"Santa ▇▇▇▇ Energy Center 1" set forth on Exhibit G-1 to the Credit Agreement.
"Secured Obligations" has the meaning given in the granting clause
of the Deed of Trust.
"Senior O&M Costs" means all O&M Costs except Subordinated O&M
Costs.
"Settlement Amount" has the meaning given in Section 5.11.6 of the
Credit Agreement.
"Site" has the meaning given in the relevant Deed of Trust.
"SPC " has the meaning given in Section 10.13.2 of the Credit
Agreement.
"Stated Amount" means with respect to each Letter of Credit, the
total amount available to be drawn thereunder at the time in question in
accordance with the terms of such Letter of Credit.
"Subject Companies" has the meaning given in Section 4.11 of the
Credit Agreement.
"Subordinated O&M Costs" means all of the O&M Costs that are payable
to Affiliates of Borrower to the extent such amounts are subordinated pursuant
to the applicable Affiliated Subordination Agreements.
"Subsequent Projects" means, collectively, the natural gas-fired
power generating plants utilizing commercially accepted technology located on
the respective Sites, all as further described in Exhibit G-2 to the Credit
Agreement owned or partially owned by a Project Owner, together with all
buildings, structures or improvements erected on the respective Sites and the
respective Easements with respect to such Sites, all alterations thereto or
replacements thereof, all fixtures, attachments, appliances, equipment,
machinery and other articles attached thereto or used in connection therewith
and all Parts which may from time to time be incorporated or installed in or
attached thereto, all contracts and agreements for the purchase or sale of
commodities or other personal property related thereto, all leases of real or
personal property related thereto, and all other real and tangible and
intangible personal property owned by a Project Owner or by an Equipment Finance
Company and leased to a Project Owner and placed upon or used in connection with
such natural gas-fired power generating plants, whether located upon the
respective Sites and Easements or otherwise; each individually, a "Subsequent
Project." Borrower may, in its sole discretion and upon written notice to
Administrative Agent, amend, modify or supplement Exhibit G-2 to the Credit
Agreement in order to add additional Subsequent Projects to such Exhibit.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association, or other business entity (other than a partnership) of which 50% or
more of the total voting power of shares of capital stock entitled (without
regard to the occurrence of any contingency) to
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vote in the election of directors, managers or trustees thereof is at the time
of determination owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of that Person of a combination thereof
and (ii) any partnership or limited liability company of which 50% or more of
the partnership's or limited liability company's, as the case may be, capital
accounts, distribution rights or general or limited partnership interests or
limited liability company membership interests, as the case may be, are owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"Substituted Initial Project" means a Subsequent Project that (A)
has a substantially similar effect on the projected annual Four-Quarter
Portfolio Interest Coverage Ratio as the Initial Project for which it is being
substituted as determined by the Required Banks, (B) is 100% owned by its
respective Project Owner, (C) satisfies the Diversification Requirements, (D)
satisfies each condition precedent set forth in Section 3.1 of the Credit
Agreement that would have been applicable to such Subsequent Project (or the
relevant Portfolio Entities) if such Subsequent Project was an Initial Project
as of the Closing Date, including, without limitation, the delivery to
Administrative of the relevant Credit Documents, (E) except for a Subsequent
Project being substituted for the Delta Energy Center Project, is not a
Designated Project and (F) with respect to the relevant Project Owner's
Non-Affiliated Parents, if any, satisfies each condition precedent set forth in
Section 3.3 of the Credit Agreement related to Non-Affiliated Parents generally,
including, without limitation, the delivery to Administrative of the relevant
Credit Documents with respect to such Non-Affiliated Parents, if any.
"Taxes" has the meaning given in Section 2.6.4(a) of the Credit
Agreement.
"Technical Committee" has the meaning given in Section 10.17 of the
Credit Agreement.
"Telerate Screen" means the display designated as Page 3750 on the
Dow ▇▇▇▇▇ Market Screen (or such page as may replace such page for the purpose
of displaying London Interbank offered rates of major banks, or, if
discontinued, any replacement service designated by Administrative Agent).
"Title Insurer" means, with respect to a Project, the title company
issuing a Title Policy pursuant to Section 3.2.28, 3.3.30 or 3.3.41 of the
Credit Agreement.
"Title Policy" means, collectively, the title policies delivered by
Borrower pursuant to Sections 3.2.28, 3.3.30 and 3.3.41 of the Credit Agreement.
"Total Letter of Credit Commitment" has the meaning given in Section
2.3.3 of the Credit Agreement.
"Total Loan Commitment" has the meaning given in Section 2.3.1 of
the Credit Agreement.
"Total Turbine Purchase Loan Commitment" has the meaning given in
Section 2.3.2 of the Credit Agreement.
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"Turbine" means a natural gas-fired combustion turbine generator or
a steam turbine generator or rights thereto ordered and allocated by the
manufacturer thereof, together with all alterations thereto or replacements
thereof, all contracts and agreements relating thereto, including the Turbine
Purchase Contract and/or the appropriate Power Island Supply Contract, and all
other tangible and intangible personal property, interests or rights in respect
thereof, in each case owned by (a) a Turbine Owner and assigned to an Initial
Project or a Subsequent Project with a Turbine Delivery Date, in each case as
more fully described on Exhibit G-3 to the Credit Agreement, (b) a Project Owner
or (c) an Equipment Finance Company and leased to a Project Owner pursuant to an
Equipment Lease. Borrower may, in its sole discretion and upon written notice to
Administrative Agent, amend, modify or supplement Exhibit G-3 to the Credit
Agreement in order to add additional Turbines to such Exhibit. To the extent
title to a Turbine has not been transferred to a Turbine Owner, "Turbine" means
the rights to such Turbine under the applicable Turbine Purchase Contract. Once
a Turbine has been assigned to a Funded Project or leased to a Project,
reference to such Turbine shall be removed from Exhibit G-3 to the Credit
Agreement.
"Turbine Costs" means, with respect to any Turbine owned by a
Turbine Owner, the sum of (a) all amounts payable under the associated Turbine
Purchase Contract; plus (b) interest and fees payable on or in respect of any
Note or Loan Commitments pursuant to the Credit Agreement prior to the date such
Turbine has been assigned to a Funded Project or is no longer part of the
Collateral. Notwithstanding the foregoing, at such time as a Project to which a
Funded Turbine has been assigned (as set forth in Exhibit G-3 to the Credit
Agreement) becomes a Funded Project, Turbine Costs with respect to such Turbines
shall be deemed Project Costs with respect to the corresponding Project and
shall thereafter no longer be considered Turbine Costs.
"Turbine Delivery Date" means, with respect to any Turbine, the
earliest date upon which such Turbine (or portion thereof) is scheduled to be
physically delivered to Turbine Owner or otherwise deemed to be in Turbine
Owner's control pursuant to the associated Turbine Purchase Contract, such date
being set forth on Exhibit G-3 to the Credit Agreement with respect to each
Turbine.
"Turbine Funding Date" means each date of an initial funding of
Turbine Purchase Loans for a Turbine pursuant to Section 3.5 of the Credit
Agreement.
"Turbine Owners" means, collectively, Borrower and/or each of the
direct or indirect Subsidiaries of Borrower that directly owns (a) a Turbine or
rights to a Turbine assigned to an Initial Project (as set forth in Exhibit G-3
to the Credit Agreement) or (b) a Funded Turbine or rights to a Funded Turbine.
In the event a Turbine Owner leases Turbines to a Project Owner pursuant to an
Equipment Lease, such Turbine Owner shall be deemed an Equipment Finance Company
and shall no longer be considered a Turbine Owner.
"Turbine Purchase Contractor" means Siemens Westinghouse Power
Corporation, a Delaware corporation, or General Electric Company, a New York
corporation or, with respect to steam Turbines only, any other Person approved
by the Technical Committee.
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"Turbine Purchase Contracts" means, collectively, each of the
contracts or agreements for the purchase or supply of the Turbines entered into
by a Turbine Owner and approved by the Technical Committee pursuant to Section
3.5 of the Credit Agreement.
"Turbine Purchase Credit Event" has the meaning given in Section 3.6
of the Credit Agreement.
"Turbine Purchase Drawdown Certificate" means a certificate
delivered to Administrative Agent substantially in the form of Exhibit C-8 to
the Credit Agreement.
"Turbine Purchase Guaranty" means the Turbine Purchase Guaranty
dated as of October 16, 2000 on substantially the form of Exhibit D-2C to the
Credit Agreement executed by Calpine in favor of Administrative Agent, on behalf
of the Banks.
"Turbine Purchase Loan" has the meaning given in Section 2.1.2(a) of
the Credit Agreement.
"Turbine Purchase Loan Commitment" means, at any time with respect
to each Bank, such Bank's Proportionate Share of the Total Turbine Purchase Loan
Commitment at such time.
"Turbine Purchase Sub-Accounts" has the meaning given in Section
7.1.1 of the Credit Agreement.
"Type" means the type of Loan, whether a Base Rate Loan or LIBOR
Loan.
"UCC" means the Uniform Commercial Code of the jurisdiction the law
of which governs the document in which such term is used.
"Unfunded Projects" means, collectively, the Projects other than the
Funded Projects.
"Unfunded Subsequent Projects" means, collectively, the Subsequent
Projects other than the Funded Subsequent Projects.
"Waterfall Level" has the meaning given in Section 7.2.1 of the
Credit Agreement.
"Working Capital Reserve Account" has the meaning given in Section
1.1 of the Depositary Agreement.
"Working Capital Reserve Requirement" means an amount equal to the
anticipated O&M Costs (including fuel costs) for all Initial Projects and Funded
Subsequent Projects then in operation for a 30-day period.
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RULES OF INTERPRETATION
1. The singular includes the plural and the plural includes
the singular.
2. "or" is not exclusive.
3. A reference to a Governmental Rule includes any amendment or
modification to such Governmental Rule, and all regulations, rulings and other
Governmental Rules promulgated under such Governmental Rule.
4. A reference to a Person includes its permitted successors
and permitted assigns.
5. Accounting terms have the meanings assigned to them by GAAP,
as applied by the accounting entity to which they refer.
6. The words "include," "includes" and "including" are not
limiting.
7. A reference in a document to an Article, Section, Exhibit,
Schedule, Annex or Appendix is to the Article, Section, Exhibit, Schedule, Annex
or Appendix of such document unless otherwise indicated. Exhibits, Schedules,
Annexes or Appendices to any document shall be deemed incorporated by reference
in such document. In the event of any conflict between the provisions of the
Credit Agreement (exclusive of the Exhibits, Schedules, Annexes and Appendices
thereto) and any Exhibit, Schedule or Annex thereto, the provisions of this
Credit Agreement shall control. A reference to any Exhibit, Schedule, Annex or
Appendix of the Credit Agreement shall mean such Exhibit, Schedule, Annex or
Appendix as, amended, modified or supplemented from time to time in accordance
with the Credit Agreement; provided, that no Exhibit, Schedule, Annex or
Appendix may be amended, modified or supplemented by Borrower except to the
extent specifically permitted in the Credit Agreement.
8. References to any document, instrument or agreement (a) shall
include all exhibits, schedules and other attachments thereto, (b) shall include
all documents, instruments or agreements issued or executed in replacement
thereof, and (c) shall mean such document, instrument or agreement, or
replacement or predecessor thereto, as amended, modified and supplemented from
time to time and in effect at any given time.
9. The words "hereof," "herein" and "hereunder" and words of
similar import when used in any document shall refer to such document as a whole
and not to any particular provision of such document.
10. References to "days" shall mean calendar days, unless the term
"Banking Days" shall be used. References to a time of day shall mean such time
in New York, New York, unless otherwise specified.
11. The Credit Documents are the result of negotiations between,
and have been reviewed by the Portfolio Entities, Administrative Agent, Lead
Arrangers, Arrangers, Co-Documentation Agents, LC Bank, Co-Syndication Agents,
Bookrunner each Bank and their respective counsel. Accordingly, the Credit
Documents shall be deemed to be the product of all
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parties thereto, and no ambiguity shall be construed in favor of or against the
Portfolio Entities, Administrative Agent, Lead Arrangers, Arrangers, LC Bank,
Co-Documentation Agents, Co-Syndication Agents, Bookrunner or any Bank solely as
a result of any such party having drafted or proposed the ambiguous provision.
42
207
EXHIBIT B
to Credit Agreement
Note No. __
FORM OF NOTE
$______________ New York, New York
___________________
For value received, the undersigned CALPINE CONSTRUCTION
FINANCE COMPANY II, LLC, a Delaware limited liability company ("Borrower"),
promises to pay to ___________________ (the "Bank"), or order, at the office of
CREDIT SUISSE FIRST BOSTON, acting through its New York Branch as Administrative
Agent, located at ______________________, Attn: Manager, Project Finance, in
lawful money of the United States of America and in immediately available funds,
the principal amount of ______________________ DOLLARS ($______________), or if
less, the aggregate unpaid and outstanding principal amount of Loans advanced by
the Bank to Borrower pursuant to that certain Credit Agreement, dated as of
October 16, 2000 (the "Credit Agreement"), by and among Borrower, the financial
institutions listed on Exhibit H thereto, Credit Suisse First Boston, acting
through its New York Branch, as Lead Arranger and Administrative Agent
("Administrative Agent"), The Bank of Nova Scotia, as Lead Arranger,
Co-Syndication Agent and Bookrunner, Banc of America Securities LLC, as Arranger
and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and Co-Syndication
Agent, Bayerische Landesbank Girozentrale, as Arranger, Co-Documentation Agent
and LC Bank, CIBC World Markets Corp., as Arranger and Co-Documentation Agent,
Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as Arranger and
Co-Documentation Agent and TD Securities (USA) Inc., as Arranger and
Co-Documentation Agent, as the same may be amended from time to time, and all
other amounts owed by Borrower to the Bank hereunder.
This is one of the Notes referred to in the Credit Agreement
and is entitled to the benefits thereof and is subject to all terms, provisions
and conditions thereof. Capitalized terms used and not defined herein shall have
the meanings set forth in the Credit Agreement.
This Note is made in connection with and is secured by, among
other instruments, the provisions of the Collateral Documents. Reference is
hereby made to the Credit Agreement and the Collateral Documents for the
provisions, among others, with respect to the custody and application of the
Collateral, the nature and extent of the security provided thereunder, the
rights, duties and obligations of Borrower and the rights of the holder of this
Note.
The principal amount hereof is payable in accordance with the
Credit Agreement, and such principal amount may be prepaid solely in accordance
with the Credit Agreement, including without limitation any prepayment fees and
premiums provided for therein.
Borrower further agrees to pay, in lawful money of the United
States of America and in immediately available funds, interest from the date
hereof on the unpaid and outstanding principal amount hereof until such unpaid
and outstanding principal amount shall become due and payable (whether at stated
maturity, by acceleration or otherwise) at the rates of interest and at the
times set forth in the Credit Agreement and Borrower agrees to pay other fees
and costs as stated in the Credit Agreement.
If any payment on this Note becomes due and payable on a date
which is not a Banking Day, such payment shall be made on the first succeeding,
or next preceding, Banking Day, in accordance with the terms of the Credit
Agreement.
208
All Loans made by the Bank pursuant to the Credit Agreement
and other Credit Documents, and all payments and prepayments made on account of
the principal balance hereof shall be recorded by the Bank on the grid attached
hereto, provided that failure to make such a notation shall not affect or
diminish Borrower's obligation to repay all amounts due on this Note, as and
when due.
Upon the occurrence of any one or more Events of Default, all
amounts then remaining unpaid on this Note may become or be declared to be
immediately due and payable as provided in the Credit Agreement and other Credit
Documents, without notice of default, presentment or demand for payment, protest
or notice of nonpayment or dishonor, or notices or demands of any kind, all of
which are expressly waived by Borrower.
Recourse under this Note shall be limited as provided in
Article 9 of the Credit Agreement.
Borrower agrees to pay costs and expenses, including without
limitation attorneys' fees, incurred in connection with the interpretation or
enforcement of this Note, in accordance with the Credit Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
2
209
This Note has been executed and delivered in and shall be
construed and interpreted in accordance with and governed by the laws of the
State of New York, without reference to conflicts of laws (other than Section
5-1401 of the New York General Obligations Law).
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By:
-------------------------------------------
Name:
Title:
210
Prepayment or Outstanding
Date Advance Repayment Balance
--------------------------------------------------------------------------------
211
EXHIBIT C-1
to Credit Agreement
FORM OF NOTICE OF CONSTRUCTION BORROWING
(Delivered pursuant to Section 2.1.1(b)
of the Credit Agreement)
[Date]
Credit Suisse First Boston,
New York Branch
as Administrative Agent for the Banks
Eleven Madison Avenue
New York, New York 10010
Attn: Manager, Project Finance
Re: Calpine Construction Finance Company II Projects
This Notice of Construction Borrowing is delivered to you
pursuant to Section 2.1.1(b) of the Credit Agreement dated as of October 16,
2000 ("Credit Agreement"), among Calpine Construction Finance Company II, LLC, a
Delaware limited liability company, as Borrower ("Borrower"), the financial
institutions listed on Exhibit H thereto (the "Banks"), Credit Suisse First
Boston, acting through its New York Branch, as Lead Arranger and Administrative
Agent ("Administrative Agent"), The Bank of Nova Scotia, as Lead Arranger,
Co-Syndication Agent and Bookrunner, Banc of America Securities LLC, as Arranger
and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and Co-Syndication
Agent, Bayerische Landesbank Girozentrale, as Arranger, Co-Documentation Agent
and LC Bank, CIBC World Markets Corp., as Arranger and Co-Documentation Agent,
Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as Arranger and
Co-Documentation Agent and TD Securities (USA) Inc., as Arranger and
Co-Documentation Agent. All capitalized terms used herein shall have the
respective meanings specified in Exhibit A to the Credit Agreement unless
otherwise defined herein or unless the context requires otherwise.
This Notice of Borrowing constitutes a request for a Borrowing
of Construction Loans as set out below:
1. The requested date of the Borrowing is __________,
______, which is a Banking Day.
2. The total amount of the requested Construction Loans
is $____________.
3. Borrower requests the following funding options:
a. Base Rate Loans amount: $_______________.
b. LIBOR Loans:
Amount Requested Initial Interest Period
$______ ________ months
$______ ________ months
$______ ________ months
212
The undersigned further confirms and certifies to
Administrative Agent and each Bank that (i) the requested Construction Loans,
when added to all other Construction Loans outstanding as of the date hereof do
not exceed the Total Loan Commitment minus the sum of (x) the aggregate
principal amount of all Turbine Purchase Loans outstanding as of the date
hereof, (y) the aggregate Stated Amount of all Letters of Credit outstanding as
of the date hereof, (z) the aggregate amount of all Reimbursement Obligations
outstanding as of the date hereof, and (ii) the conditions precedent to the
Borrowing hereby requested set forth in Article 3 of the Credit Agreement have
been satisfied or waived in accordance with the terms thereof.
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By:
----------------------------------------
Name:
Title:
2
213
EXHIBIT C-2
to Credit Agreement
FORM OF NOTICE OF TURBINE PURCHASE BORROWING
(Delivered pursuant to Section 2.1.2(b)
of the Credit Agreement)
[Date]
Credit Suisse First Boston,
New York Branch
as Administrative Agent for the Banks
Eleven Madison Avenue
New York, New York 10010
Attn: Manager, Project Finance
Re: Calpine Construction Finance Company II ("Turbines")
This Notice of Turbine Purchase Borrowing is delivered to you
pursuant to Section 2.1.2(b) of the Credit Agreement dated as of October 16,
2000 ("Credit Agreement"), among Calpine Construction Finance Company II, LLC, a
Delaware limited liability company, as Borrower ("Borrower"), the financial
institutions listed on Exhibit H thereto (the "Banks"), Credit Suisse First
Boston, acting through its New York Branch, as Lead Arranger and Administrative
Agent ("Administrative Agent"), The Bank of Nova Scotia, as Lead Arranger,
Co-Syndication Agent and Bookrunner, Banc of America Securities LLC, as Arranger
and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and Co-Syndication
Agent, Bayerische Landesbank Girozentrale, as Arranger, Co-Documentation Agent
and LC Bank, CIBC World Markets Corp., as Arranger and Co-Documentation Agent,
Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as Arranger and
Co-Documentation Agent and TD Securities (USA) Inc., as Arranger and
Co-Documentation Agent. All capitalized terms used herein shall have the
respective meanings specified in Exhibit A to the Credit Agreement unless
otherwise defined herein or unless the context requires otherwise.
This Notice of Borrowing constitutes a request for a Borrowing
of Turbine Purchase Loans as set out below:
1. The requested date of the Borrowing is __________,
______, which is a Banking Day.
2. The total amount of the requested Turbine Purchase
Loans is $____________.
3. Borrower requests the following funding options:
a. Base Rate Loans amount: $_______________.
b. LIBOR Loans:
Amount Requested Initial Interest Period
$______ ________ months
$______ ________ months
$______ ________ months
214
The undersigned further confirms and certifies to
Administrative Agent and each Bank that (i) the requested Turbine Purchase
Loans, when added to all other Turbine Purchase Loans outstanding as of the date
hereof shall not exceed the lesser of (x) the Total Turbine Purchase Loan
Commitment and (y) an amount equal to the excess, if any, of (A) the amount of
the Total Loan Commitment as of the date hereof over (B) the aggregate principal
amount of all Loans outstanding as of the date hereof plus the Aggregate LC
Stated Amount and all outstanding Reimbursement Obligations outstanding as of
the date hereof, and (ii) the conditions precedent to the Borrowing hereby
requested set forth in Article 3 of the Credit Agreement have been satisfied or
waived in accordance with the terms thereof.
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By: ____________________________________________
Name:
Title:
2
215
EXHIBIT C-3
to Credit Agreement
FORM OF CONFIRMATION OF INTEREST PERIOD SELECTION
(Delivered pursuant to Section 2.1.3(b)(ii)
of the Credit Agreement)
[Date]
Credit Suisse First Boston
New York Branch
as Administrative Agent for the Banks
Eleven Madison Avenue
New York, New York 10010
Attn: Manager, Project Finance
Re: Calpine Construction Finance Company II Project
This Confirmation of Interest Period Selection is delivered to
you pursuant to Section 2.1.3(b)(ii) of the Credit Agreement dated as of October
16, 2000 ("Credit Agreement"), among Calpine Construction Finance Company II,
LLC, a Delaware limited liability company, as Borrower ("Borrower"), the
financial institutions listed on Exhibit H thereto (the "Banks"), Credit Suisse
First Boston, acting through its New York Branch, as Lead Arranger and
Administrative Agent ("Administrative Agent"), The Bank of Nova Scotia, as Lead
Arranger, Co-Syndication Agent and Bookrunner, Banc of America Securities LLC,
as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and
Co-Syndication Agent, Bayerische Landesbank Girozentrale, as Arranger,
Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as Arranger and
Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as
Arranger and Co-Documentation Agent and TD Securities (USA) Inc., as Arranger
and Co-Documentation Agent. All capitalized terms used herein shall have the
respective meanings specified in Exhibit A to the Credit Agreement unless
otherwise defined herein or unless the context requires otherwise.
This Confirmation of Interest Period Selection relates to $
__________ of the LIBOR Loans with an Interest Period ending on ________. This
Confirmation of Interest Period Selection constitutes a confirmation that
effective __________ (which shall be the last day of an Interest Period), the
requested Interest Period for ___________ of such LIBOR Loans shall be __
months. [SPECIFY WHETHER CONSTRUCTION/TURBINE PURCHASE LOANS, IF NECESSARY]
This notice shall be effective only if delivered to
Administrative Agent as a Confirmation of Interest Period Selection made
pursuant to Section 2.1.3(b)(ii) of the Credit Agreement.
216
The undersigned confirms and certifies to each Bank that as of
the date of this Confirmation of Interest Period Selection, no Event of Default
or Inchoate Default exists under the Credit Agreement.
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By:
-----------------------------------------
Name:
Title:
The undersigned acknowledges receipt of a copy of this
Confirmation of Interest Period Selection:
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH, Date: ,
as Administrative Agent for the Banks ----------- -----
By:
-----------------------------------------------------
Name:
Title:
By:
-----------------------------------------------------
Name:
Title:
217
EXHIBIT C-4
to Credit Agreement
FORM OF NOTICE OF CONVERSION OF LOAN TYPE
(Delivered pursuant to Section 2.1.6
of the Credit Agreement)
[Date]
Credit Suisse First Boston,
New York Branch
as Administrative Agent for the Banks
Eleven Madison Avenue
New York, New York 10010
Attn: Manager, Project Finance
Re: Calpine Construction Finance Company II Projects
1. Reference is hereby made to that certain Credit Agreement
dated as of October 16, 2000 ("Credit Agreement"), among Calpine Construction
Finance Company II, LLC, a Delaware limited liability company, as Borrower
("Borrower"), the financial institutions listed on Exhibit H thereto (the
"Banks"), Credit Suisse First Boston, acting through its New York Branch, as
Lead Arranger and Administrative Agent ("Administrative Agent"), The Bank of
Nova Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of
America Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital
LLC, as Arranger and Co-Syndication Agent, Bayerische Landesbank Girozentrale,
as Arranger, Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as
Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America
Services LLC, as Arranger and Co-Documentation Agent and TD Securities (USA)
Inc., as Arranger and Co-Documentation Agent. All capitalized terms used herein
shall have the respective meanings specified in Exhibit A to the Credit
Agreement unless otherwise defined herein or unless the context requires
otherwise.
2. Pursuant to Section 2.1.6 of the Credit Agreement, Borrower
hereby notifies Administrative Agent: [SPECIFY WHETHER CONSTRUCTION/TURBINE
PURCHASE LOANS, IF NECESSARY]]
(a) the conversion of $_______________ of such Loans
from a [BASE RATE/LIBOR] Loan to a [LIBOR/BASE RATE] Loan;
(b) that the effective date of the conversion shall
be ___________, which is a Banking Day and which shall be the first day
after the last day of an Interest Period if converting from LIBOR
Loans;
(c) if converting to LIBOR Loans, the following
Interest Periods are selected:
218
Amount Requested Initial Interest Period
$_________ ________ months
$_________ ________ months
$_________ ________ months
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
219
IN WITNESS WHEREOF, Borrower has executed this Notice of Conversion of
Loan Type on the date set forth above.
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By:
-----------------------------------
Name:
Title:
The undersigned acknowledges receipt of a copy of this Notice of
Conversion of Loan Type:
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH, Date: ,
as Administrative Agent for the Banks ---------- -----
By:
------------------------------------------------------
Name:
Title:
By:
------------------------------------------------------
Name:
Title:
220
EXHIBIT C-5
to Credit Agreement
FORM OF NOTICE OF LC ACTIVITY
(Delivered pursuant to Section 2.2.3
of the Credit Agreement)
[Date]
Credit Suisse First Boston,
New York Branch
as Administrative Agent for the Banks
Eleven Madison Avenue
New York, New York 10010
Attn: Manager, Project Finance
Re: Calpine Construction Finance Company II Project
This Notice of LC Activity is delivered to you pursuant to
Section 2.2.3 of the Credit Agreement dated as of October 16, 2000 ("Credit
Agreement"), among Calpine Construction Finance Company II, LLC, a Delaware
limited liability company, as Borrower ("Borrower"), the financial institutions
listed on Exhibit H thereto (the "Banks"), Credit Suisse First Boston, acting
through its New York Branch, as Lead Arranger and Administrative Agent
("Administrative Agent"), The Bank of Nova Scotia, as Lead Arranger,
Co-Syndication Agent and Bookrunner, Banc of America Securities LLC, as Arranger
and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and Co-Syndication
Agent, Bayerische Landesbank Girozentrale, as Arranger, Co-Documentation Agent
and LC Bank, CIBC World Markets Corp., as Arranger and Co-Documentation Agent,
Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as Arranger and
Co-Documentation Agent and TD Securities (USA) Inc., as Arranger and
Co-Documentation Agent. All capitalized terms used herein shall have the
respective meanings specified in Exhibit A to the Credit Agreement unless
otherwise defined herein or unless the context requires otherwise.
1. We request that a/the [SPECIFY LETTER OF CREDIT] be
[ISSUED] [EXTENDED] [INCREASED] as provided below.
2. The Letter of Credit relates to the _______ Project.
3. The issue date of the Letter of Credit is
__________________, and the [EXTENDED] Expiration Date of the Letter of Credit
is ________________, neither of which is later than the Loan Maturity Date.
4. [THE STATED AMOUNT OF THE LETTER OF CREDIT IS
$_____________] or [WE REQUEST THAT THE STATED AMOUNT OF THE LETTER OF CREDIT BE
INCREASED FROM $________ TO $_________] which, together with the Aggregate LC
Stated Amount and all outstanding Reimbursement Obligations thereunder, does not
exceed the lesser of (i) the Total Letter of Credit Commitment and (ii) an
amount equal to the excess, if any, of (a) the amount of the Total Loan
Commitment as of the date hereof over (b)
221
the aggregate principal amount of all Loans then outstanding plus the Aggregate
LC Stated Amount and all outstanding Reimbursement Obligations.
5. The Available Construction Funds, after taking into effect
the issuance of the Letter of Credit requested hereby, will be equal to or
exceed the remaining Project Costs of all Initial Projects and Funded Subsequent
Projects then under construction.
6. Administrative Agent is instructed to deliver the [LETTER
OF CREDIT] [NOTICE OF EXTENSION] [NOTICE OF INCREASE IN STATED AMOUNT] to
________, [THE LC BENEFICIARY] [BORROWER], at [ADDRESS].
The undersigned further confirms and certifies to
Administrative Agent and each Bank that the Letter of Credit requested hereby
shall only be used in the manner and for the purposes specified and permitted by
the Credit Agreement, and that, as of the date of the issuance of such Letter of
Credit, the conditions set forth in Section 3.8 of the Credit Agreement have all
been satisfied or waived in accordance with the terms thereof.
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By:
-----------------------------------------------------
Name:
Title:
222
EXHIBIT C-6
to Credit Agreement
FORM OF CONSTRUCTION DRAWDOWN CERTIFICATE
(Delivered pursuant to Section 3.4.3
of the Credit Agreement)
Date: [__________, ____]
Drawdown Date: [__________, ____]
Credit Suisse First Boston,
New York Branch
as Administrative Agent for the Banks
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Manager, Project Finance
Ladies and Gentlemen:
1. This Construction Drawdown Certificate is delivered to you pursuant
to Section 3.4.3 of that certain Credit Agreement dated as of October 16, 2000
("Credit Agreement"), among Calpine Construction Finance Company II, LLC, a
Delaware limited liability company, as Borrower ("Borrower"), the financial
institutions listed on Exhibit H thereto (the "Banks"), Credit Suisse First
Boston, acting through its New York Branch, as Lead Arranger and Administrative
Agent ("Administrative Agent"), The Bank of Nova Scotia, as Lead Arranger,
Co-Syndication Agent and Bookrunner, Banc of America Securities LLC, as Arranger
and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and Co-Syndication
Agent, Bayerische Landesbank Girozentrale, as Arranger, Co-Documentation Agent
and LC Bank, CIBC World Markets Corp., as Arranger and Co-Documentation Agent,
Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as Arranger and
Co-Documentation Agent and TD Securities (USA) Inc., as Arranger and
Co-Documentation Agent. Unless otherwise defined herein, all capitalized terms
used herein shall have the respective meanings specified in Exhibit A to the
Credit Agreement.
2. We have read the provisions of the Credit Agreement which are
relevant to the furnishing of this Construction Drawdown Certificate. To the
extent that this Construction Drawdown Certificate evidences, attests or
confirms compliance with any covenants or conditions precedent provided for in
the Credit Agreement, we have made such examination or investigation as was, in
our opinion, necessary to enable us to express an informed opinion as to whether
such covenants or conditions have been complied with. This Construction Drawdown
Certificate relates to a Borrowing or other disbursement to take place on the
Drawdown Date.
223
3. This Construction Drawdown Certificate relates to the
__________________________ Project (the "Project").
4. BORROWER HEREBY CERTIFIES THAT, as of the date hereof:
4.1 The Project Costs for the Project incurred through the
immediately preceding Drawdown Date by or on behalf of the appropriate Portfolio
Entities and for which a Construction Drawdown Certificate has previously been
submitted by Borrower are $__________, segregated by major categories as
described in Column A of Appendix I hereto. The Project Costs for the Project
paid during the previous month from funds in the Project's Operating Account as
permitted pursuant to Section 7.1.2(c) of the Credit Agreement are as follows:
_____.
4.2 The Project Costs for the Project to be paid with the
funds requested by this Construction Drawdown Certificate for the current month
are $___________, segregated by major categories as described in Column B of
Appendix I hereto. Of such Project Costs, $__________ will be paid through the
application of Contributions pursuant to Section 3.10 of the Credit Agreement,
$__________ will be paid through the application of Contributions pursuant to
Section 5.17.1 of the Credit Agreement, $___________ will be paid through the
application of Additional Borrower Equity and $_________ will be paid through
the application of Construction Loans. All items shown in Column B represent
work that has been satisfactorily performed in a good and workmanlike manner and
in conformance with the Project's Construction Contracts or materials that have
been supplied and delivered to the Project's Site prior to the date of this
Certificate, or Borrower's best estimate of fuel and other O&M Costs related to
startup and testing of the Project which will become due and payable on the
Drawdown Date or within thirty (30) days thereafter.
4.3 The estimated dates of Completion and Final Completion for
the Project are set forth on Appendix II hereto.
4.4 The estimated Project Costs to Final Completion for the
Project are _________, segregated by major categories and described in Column L
of Appendix I hereto. The aggregate amount of Project Costs for the Project (not
including financing fees and interest expenses allocated to such Project but not
reflected in such Project's Project Budget and other expenses not allocable to a
Project) will not exceed 110% of the anticipated aggregate amount of such
Project Costs for the Project as set forth in the Project's Project Budget. The
aggregate amount of Project Costs for all Initial Projects and Funded Subsequent
Projects under construction as of the date hereof will not exceed 105% of the
anticipated aggregate amount of Project Costs for such Projects as set forth in
such Projects' Project Budgets. [MODIFY THIS CERTIFICATION IF NECESSARY IN
ACCORDANCE WITH THE LAST CLAUSE OF SECTION 3.4.3 OF THE CREDIT AGREEMENT.]
4.5 A detailed description of the variances from the estimated
Project Costs for the Project as of the date of the Credit Agreement is
summarized in Appendix III hereto.
4.6 The Available Construction Funds are sufficient to pay all
remaining Project Costs for all Initial Projects and Funded Subsequent Projects
under construction as of the date hereof (after giving effect to this and any
other Drawdown Certificates delivered as of the date hereof).
2
224
4.7 There has not occurred any development which materially
adversely affects the likelihood of the Project achieving Completion on or
before the Loan Maturity Date.
4.8 No Event of Default or Inchoate Default or, with respect
to the Project, Non-Fundamental Project Default or Non-Fundamental Project
Inchoate Default has occurred and is continuing.
4.9 All proceeds of all Construction Loans and other amounts
deposited into the Project's Construction Sub-Account on or prior to the date
hereof, except for $_________ remaining in the Project's Construction
Sub-Account since the date of the last Construction Drawdown Certificate, have
been expended and have been applied to Project Costs for the Project in
accordance with the applicable Construction Contracts, the applicable Project
Documents or the Credit Agreement.
4.10 All insurance required under the Credit Agreement is in
place, in good standing and in full force and effect and all premiums due
thereon have been paid.
4.11 There are no Applicable Permits or Applicable Third Party
Permits other than those which have been obtained as of the date hereof.
4.12 Each Applicable Permit and Applicable Third Party Permit
with respect to the Project has been issued, is in full force and effect and is
not subject to any current legal proceedings, or to any unsatisfied condition
that could allow modification or revocation and all applicable appeal periods
have expired with respect thereto.
4.13 To Borrower's knowledge, no facts or circumstances exist
which indicate that any Permit will not be timely obtainable at a cost
consistent with the Project's Project Budget without material difficulty or
delay by Borrower or the applicable Major Project Participant, respectively,
prior to the time that it becomes an Applicable Permit or an Applicable Third
Party Permit, as applicable.
4.14 All of the Operative Documents executed and delivered
with respect to the Project on or prior to the date of the Borrowing requested
by this Drawdown Certificate are in full force and effect without change or
amendment since the respective dates of their execution and delivery in a form
which was approved by Administrative Agent, except as consented to in writing by
Administrative Agent to the extent required under the Credit Agreement or as
otherwise permitted by the Credit Agreement. No Portfolio Entity is in default
under any term of any Project Document with respect to the Project and, to the
best of Borrower's knowledge, no other party to such a Project Document is in
default thereunder except, in either case, where such default could not
reasonably be expected to have a Material Adverse Effect on the Project.
4.15 The Project has not been abandoned or terminated.
4.16 No Portfolio Entity with respect to the Project has
incurred or permitted to exist any Liens (other than Permitted Liens) on the
Project or the Mortgaged Property with respect to the Project or any part
thereof or on any other assets of such Portfolio Entity, except as permitted
under the Credit Agreement. No Liens, claims of Lien, attachments or similar
claims (including without limitation mechanic's and materialman's liens) have
been recorded or filed with respect to the Project or the Mortgaged Property
with respect to the Project or any part thereof, except Permitted
3
225
Liens or Permitted Encumbrances, as the case may be, and such Liens, claims of
Lien, attachments or similar claims as will be released, removed and discharged
from the funds requested by this Construction Drawdown Certificate and the
corresponding Notice of Construction Borrowing.
4.17 There are no pending or, to the best knowledge of
Borrower, threatened actions or proceedings of any kind, including actions or
proceedings of or before any Governmental Authority, to which Borrower or any
other Portfolio Entity with respect to the Project, the Member, Calpine, any
Affiliated Major Project Participant or, to the best knowledge of Borrower, any
other Major Project Participant with respect to the Project, or by which any of
them or any of their properties or the Project are bound, which if adversely
determined to or against Borrower or any other such Portfolio Entity, the
Member, Calpine, any other such Major Project Participant or the Project could
reasonably be expected to have a Material Adverse Effect on Borrower or the
Project, except as permitted pursuant to the terms of the Credit Agreement.
4.18 No Portfolio Entity with respect to the Project has
waived performance or released from liability any party to any Operative
Document with respect to the Project except with the consent of Administrative
Agent or as otherwise permitted by the Credit Agreement.
4.19 Attached to this Construction Drawdown Certificate as
Appendix IV are complete and accurate listings of all material contracts entered
into by the Portfolio Entities with respect to the Project from the last day of
the month preceding the date of the last Construction Drawdown Certificate to
the last day of the month preceding the date hereof with respect to the Project.
4.20 Borrower has obtained and is delivering to Administrative
Agent concurrently herewith a datedown endorsement to the Title Policy with
respect to the Project to the date the Construction Loans requested hereby are
to be made, extending the coverage of Title Policy to such date, including all
Borrowings and extensions of credit made to and including such date, insuring
that the Lien of the Deed of Trust with respect to the Project on the Mortgaged
Property with respect to the Project is prior to any liens, encumbrances or
other matters except Permitted Encumbrances and Permitted Liens described in
clauses (a), (b) or (c) of the definition thereof.
4.21 All property, rights and assets acquired for the Project
are free and clear of all encumbrances except for Permitted Liens or as
otherwise permitted by the Credit Agreement.
4.22 All of the representations of Borrower and the other
Portfolio Entities with respect to the Project contained in the Credit Documents
(in each case with respect to itself or the Project) are true and correct to the
extent provided therein on and as of the Construction Drawdown Date with the
same effect as if given on the date hereof (except to the extent such
representations and warranties relate to a prior date).
4.23 A list of all approved, pending and proposed change
orders to the Construction Contracts since the previous Construction Drawdown
Certificate pertaining to the Project, together with copies of all such change
orders not previously delivered to the Administrative Agent, is attached hereto
as Appendix V.
4.24 Attached hereto (if funds are being requested with
respect to any Construction Contract) as Attachment A and delivered herewith is
a duly executed and completed Contractor's
4
226
Certificate and a copy of the information delivered to the relevant Portfolio
Entity pursuant to [INSERT PROVISIONS OF APPLICABLE CONSTRUCTION CONTRACT],
including the Monthly Progress Report prepared thereunder for the month to which
this Drawdown Certificate relates.
4.25 The conditions set forth in Section 3.4 of the Credit
Agreement are satisfied or have been waived in writing by Administrative Agent
as of the date hereof and as of the date of the requested draw.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
5
227
IN WITNESS WHEREOF, Borrower has executed this Construction
Drawdown Certificate as of the date hereof.
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By:
---------------------------------------
Name:
Title:
228
Appendix I
to Exhibit C-6
CALPINE - PROJECT XXXXXXXXXX
PROJECT COSTS AS OF
X/XX/XX
PRIOR THIS DRAW TOTAL BUDGETED TOTAL VARIANCE CLOSING BUDGET CURRENT BANK
EXPENDITURES REQUEST EXPENDITURES EXPENDITURES APPROVED BUDGET
(DEBT&EQUITY) TO DATE
A B C=(A+B) D E=(C-D) F G
LAND
DEVELOPMENT COSTS
CONSTRUCTION
POWER ISLAND
INSURANCE
EPC
PROJECT ENHANCEMENTS
SALES TAX
CONSTRUCTION
MANAGEMENT
STARTUP (COMMISSIONING)
PENDING CHG. ORDERS
TITLE INSURANCE
- -
SUBTOTAL 0 - - - - - -
INTEREST EXPENSE
COMMITMENT FEES
INDEPENDENT ENGINEER
TOTAL: 0 - - - - - -
PRIOR EQUITY CUMULATIVE CURRENT EXPECTED
EQUITY THIS EQUITY ESTIMATE OF BALANCE TO
REQUEST MONTH TOTAL PROJECT COMPLETION
COSTS
H I J=(H+I) K L=(K-C)
LAND
DEVELOPMENT COSTS
CONSTRUCTION
POWER ISLAND
INSURANCE
EPC
PROJECT ENHANCEMENTS
SALES TAX
CONSTRUCTION
MANAGEMENT
STARTUP (COMMISSIONING)
PENDING CHG. ORDERS
TITLE INSURANCE
- - - -
SUBTOTAL - - - - -
INTEREST EXPENSE
COMMITMENT FEES
INDEPENDENT ENGINEER
TOTAL: - - - - -
I-1
229
Appendix II
to Exhibit C-6
Estimated Dates of Completion and Final Completion
Completion: _________
Final Completion: _________
II-1
230
Appendix III
to Exhibit C-6
Summary description of variances from estimated Project Costs.
Variation Amount
0 0
TOTAL $0
III-1
231
Appendix IV
to Exhibit C-6
Material Contracts entered into by Project Owner with respect to the
Project and property, rights and assets acquired from date of previous
Construction Drawdown Certificate to the date hereof.
IV-1
232
Appendix V
to Exhibit C-6
List of Change Orders
V-1
233
ATTACHMENT A TO
BORROWER'S CONSTRUCTION DRAWDOWN CERTIFICATE
CONTRACTOR'S CERTIFICATE
Pursuant to Section ____ of that certain
________________________ Contract (the "Contract") by and between Calpine
Construction Finance Company II, LLC, a Delaware limited liability company, and
______________________ ("Contractor"), Contractor hereby certifies, to the
Contractor's knowledge as of the date hereof, that (all capitalized terms have
the meanings ascribed in the Contract unless otherwise indicated):
1. This attachment refers to the __________________________
Project (the "Project").
2. The Work performed to date has, unless otherwise stated by
Contractor, been performed in all material respects in
accordance with the Contract and the Contract schedule in
effect on the date hereof as referenced in Article ____ of the
Contract.
3. To the Contractor's knowledge, no event currently exists with
respect to the Contract which reasonably could be expected to
delay the [INSERT PROPER TERMINOLOGY USED IN CONTRACT WITH
RESPECT TO COMPLETION OF SCOPE OF WORK UNDER SUCH CONTRACT].
4. Contractor has been paid all amounts due to it under the
Contract and all Subcontractor/Suppliers engaged or employed
by Contractor have been paid to the extent that such amounts
are due or such payment (or a portion thereof) is subject to a
good faith contest which is being diligently pursued by the
Contractor (in each case, other than amounts to be paid with
the proceeds of the drawdown related to this certificate).
By furnishing this Contractor's Certificate, Contractor
assumes no independent liability to recipients of the same. Any liability of the
undersigned arising from this Contractor's Certificate shall be governed
exclusively by the terms of the Contract including any limitations of liability
and exclusive remedy provisions therein.
IN WITNESS WHEREOF, the undersigned have executed this
Contractor's Certificate as of the ___ of _______________, ____.
-------------------------------------------
By:
----------------------------------------
Name:
Its:
A-1
234
EXHIBIT C-7
to Credit Agreement
FORM OF ENGINEER'S CONSTRUCTION CERTIFICATE
[LETTERHEAD OF [▇.▇. ▇▇▇▇, INC.]]
(Delivered pursuant to Section 3.4.3)
Credit Suisse First Boston, Date: _____________________
New York Branch Drawdown Date: _________________
as Administrative Agent for the Banks
Eleven Madison Avenue
New York, New York 10010
Attn: Manager, Project Finance
Re: Calpine Construction Finance Company II Projects
Ladies and Gentlemen:
▇.▇. ▇▇▇▇, Inc. ("Independent Engineer"), pursuant to Section
3.4.3 of the Credit Agreement dated as of October 16, 2000 ("Credit Agreement"),
among Calpine Construction Finance Company II, LLC, a Delaware limited liability
company, as Borrower ("Borrower"), the financial institutions listed on Exhibit
H thereto (the "Banks"), Credit Suisse First Boston, acting through its New York
Branch, as Lead Arranger and Administrative Agent ("Administrative Agent"), The
Bank of Nova Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner, Banc
of America Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.)
Capital LLC, as Arranger and Co-Syndication Agent, Bayerische Landesbank
Girozentrale, as Arranger, Co-Documentation Agent and LC Bank, CIBC World
Markets Corp., as Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇
North America Services LLC, as Arranger and Co-Documentation Agent and TD
Securities (USA) Inc., as Arranger and Co-Documentation Agent, hereby makes the
following statements, with respect to the _______ Project (the "Project") as of
_____________________.
1. We have read the provisions of Section 3.4.3 of the Credit
Agreement as it identifies the responsibilities of the
Independent Engineer related to providing this Independent
Engineer's Construction Certificate.
2. All defined terms set forth in this Independent Engineer's
Construction Certificate shall have respective meanings
specified in Exhibit A to the Credit Agreement unless
otherwise defined herein.
3. We have reviewed the material and data made available to us by
the Contractors with respect to the Project and the relevant
Portfolio Entities since the date of the last Construction
Drawdown Certificate with respect to the Project, consisting
of: the Construction Drawdown Certificate with respect to the
Project, dated ________________, and the Appendices and other
items attached thereto; drawings and specifications prepared
by ________________ and ________________; and work progress
documents consisting of ________________. We have also
observed the status of construction progress and startup
activities at the Project's Site (the "Site"). Our review and
observations were performed in accordance with generally
accepted consulting
235
practices consisting of a walk-through of such Site conducted
on ____________, _____, observation of installed equipment and
material, observation of work procedures, review of "QA" and
"QC" reports as made available by the Contractors with respect
to the Project and attendance of the construction monthly
progress review meeting with respect to the Project. We have
reviewed paragraphs 4.1 through 4.7, 4.9, 4.11 through 4.13
and 4.15 of the Construction Drawdown Certificate with respect
to the Project (the "Current Construction Drawdown
Certificate"), dated ________________ (the "Drawdown Date"),
and we have previously reviewed the corresponding paragraphs
of all previous Construction Drawdown Certificates with
respect to the Project. We have also reviewed the materials
attached to the Current Construction Drawdown Certificate as
Attachment A, including each monthly progress report submitted
pursuant to each Construction Contract with respect to the
Project (the "Current Contractor Certificates"), and we have
reviewed the contractor certificates submitted with all
previous Construction Drawdown Certificates with respect to
the Project. We have also reviewed the following additional
material: _________________________.
4. To the extent practical, we have periodically reviewed the
progress of engineering, procurement and construction for the
Project and in the course of this review we have not
discovered any errors or omissions in the claims for materials
that have been procured and work performed under this and all
previous Borrowings.
5. Based on our review of the aforementioned information, and of
data provided to us by others which we have not independently
verified, we are of the opinion that, as of Drawdown Date:
a. The estimated Project Costs to Final Completion
[ARE/ARE NOT] as set forth in the Current
Construction Drawdown Certificate. [IF NOT, CONTINUE
AS FOLLOWS: IN OUR OPINION, THE ESTIMATED PROJECT
COSTS TO FINAL COMPLETION VARY FROM THE ESTIMATED
PROJECT COSTS SET FORTH IN THE CURRENT CONSTRUCTION
DRAWDOWN CERTIFICATE BECAUSE: [(STATE REASONS)];
b. The aggregate amount of Project Costs for the Project
(not including financing fees and interest expenses
allocated to such Project but not reflected in such
Project's Project Budget and other expenses not
allocable to a Project) will not exceed 110% of the
anticipated aggregate amount of such Project Costs
for the Project as set forth in the Project's Project
Budget.
c. The aggregate amount of Project Costs for all Initial
Projects and Funded Subsequent Projects under
construction as of the date hereof will not exceed
105% of the anticipated aggregate amount of Project
Costs for all such Projects as set forth in such
Projects' Project Budgets.
[IF THE AGGREGATE AMOUNT OF PROJECT COSTS FOR THE
PROJECT EXCEEDS 110% OF THE ANTICIPATED AGGREGATE
AMOUNT OF SUCH PROJECT COSTS, THEN CONTINUE AS
FOLLOWS:]
[__. WE CONFIRM THAT THE COST OVERRUNS WITH RESPECT TO THE
PROJECT ARE NOT REASONABLY LIKELY TO EXCEED $______.]
[__. THE AGGREGATE AMOUNT OF PROJECT COSTS FOR ALL INITIAL
PROJECTS AND FUNDED SUBSEQUENT PROJECTS UNDER
CONSTRUCTION AS OF THE DATE HEREOF, AFTER GIVING
236
EFFECT TO ANY FURTHER CONTEMPLATED OVERRUNS WITH
RESPECT TO THE PROJECT, WILL NOT EXCEED 105% OF THE
ANTICIPATED AGGREGATE AMOUNT OF PROJECT COSTS FOR ALL
SUCH PROJECTS AS SET FORTH IN SUCH PROJECTS' PROJECT
BUDGETS.]
d. Completion with respect to the Project will occur on
or before the Date Certain.
e. Our scope of review [HAS/HAS NOT] brought to our
actual attention any errors in the information
contained in the paragraphs of the Current
Construction Drawdown Certificate or in the Current
Contractor Certificate referred to in paragraph 3 of
this Independent Engineer's Construction Certificate.
[IF ANY PARAGRAPH IN THE CURRENT DRAWDOWN CERTIFICATE
OR INFORMATION IN THE CURRENT CONTRACTOR CERTIFICATE
IS INCORRECT, LIST AND SPECIFY REASONS.]
f. Except as disclosed in the Permit Schedule applicable
to the Project, to our knowledge, no other Permits or
governmental authorizations are required in
connection with the construction and operation of the
Project;
g. The quality of construction performed with respect to
the Project during the period covered by this
Independent Engineer's Construction Certificate is
[SATISFACTORY/UNSATISFACTORY] and [APPEARS TO HAVE
BEEN/DOES NOT APPEAR TO HAVE BEEN] performed in a
good and workmanlike manner and in conformance with
the Construction Contracts with respect to the
Project; [IF UNSATISFACTORY, SPECIFY REASONS.]
h. The work accomplished with respect to the Project
during the period covered by this Independent
Engineer's Construction Certificate [IS/IS NOT] in
accordance with the Project's Project Schedule; and
[IF NOT IN ACCORDANCE WITH SCHEDULE, SPECIFY
REASONS.]
i. After giving effect to the Borrowings requested by
the Current Construction Drawdown Certificate, we
estimate Available Construction Funds to be
sufficient to pay remaining Project Costs for all
Initial Projects and Funded Subsequent Projects under
construction as of the date hereof (after giving
effect to any other Drawdown Certificates delivered
to Administrative Agent as of the date hereof).
6. To the best of our knowledge, there are no approved or
material proposed change orders which are not listed on
Appendix V to the Current Construction Drawdown Certificate or
that have not been listed in a previous Construction Drawdown
Certificate.
7. Without having specifically reviewed the matter, the
undersigned does not know of any pending or proposed changes
in any codes or regulations affecting the design, construction
or use of the Project which would affect completion of the
Project or the ability to obtain any certificates or permits
necessary for the use and operation of the Project.
Except as specified above, the undersigned has not discovered
any error in the matters set forth in the Current Construction Drawdown
Certificate or Current Contractor Certificate that are within its scope of work.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
237
The information contained herein is for the benefit of
Administrative Agent and the Banks and may be relied upon for the purposes of
making Loans pursuant to the Credit Agreement.
▇.▇. ▇▇▇▇, INC.,
a Washington corporation
By:
---------------------------------------------
Name:
Title:
238
EXHIBIT C-8
to Credit Agreement
FORM OF TURBINE PURCHASE DRAWDOWN CERTIFICATE
(Delivered pursuant to Section 3.6.3
of the Credit Agreement)
Date: [__________, ____]
Drawdown Date: [__________, ____]
Credit Suisse First Boston,
New York Branch
as Administrative Agent for the Banks
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Manager, Project Finance
Ladies and Gentlemen:
1. This Turbine Purchase Drawdown Certificate is delivered to you
pursuant to Section 3.6.3 of that certain Credit Agreement dated as of October
16, 2000 ("Credit Agreement"), among Calpine Construction Finance Company II,
LLC, a Delaware limited liability company, as Borrower ("Borrower"), the
financial institutions listed on Exhibit H thereto (the "Banks"), Credit Suisse
First Boston, acting through its New York Branch, as Lead Arranger and
Administrative Agent ("Administrative Agent"), The Bank of Nova Scotia, as Lead
Arranger, Co-Syndication Agent and Bookrunner, Banc of America Securities LLC,
as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and
Co-Syndication Agent, Bayerische Landesbank Girozentrale, as Arranger,
Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as Arranger and
Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as
Arranger and Co-Documentation Agent and TD Securities (USA) Inc., as Arranger
and Co-Documentation Agent. Unless otherwise defined herein, all capitalized
terms used herein shall have the respective meanings specified in Exhibit A to
the Credit Agreement.
2. We have read the provisions of the Credit Agreement which are
relevant to the furnishing of this Turbine Purchase Drawdown Certificate. To the
extent that this Turbine Purchase Drawdown Certificate evidences, attests or
confirms compliance with any covenants or conditions precedent provided for in
the Credit Agreement, we have made such examination or investigation as was, in
our opinion, necessary to enable us to express an informed opinion as to whether
such covenants or conditions have been complied with. This Turbine Purchase
Drawdown Certificate relates to a Borrowing or other disbursement to take place
on the Drawdown Date.
1
239
3. This Turbine Purchase Drawdown Certificate relates to the Turbine(s)
identified by serial #___ (as set forth on Exhibit G-3 to the Credit Agreement)
(the "Turbine(s)") and assigned to the ____ Project.
4. BORROWER HEREBY CERTIFIES THAT, as of the date hereof:
4.1 The Turbine Costs for the Turbine(s) incurred through the
immediately preceding Drawdown Date by or on behalf of Borrower and for which a
Turbine Purchase Drawdown Certificate has previously been submitted by Borrower
are $__________.
4.2 The Turbine Costs for the Turbine(s) to be paid with the
funds requested by this Turbine Purchase Drawdown Certificate for the current
month are $___________. Of such Turbine Costs, $__________ will be paid through
the application of Contributions pursuant to Section 3.10 of the Credit
Agreement, $__________ will be paid through the application of Contributions
pursuant to Section 5.17.1 of the Credit Agreement and $_________ will be paid
through the application of Turbine Purchase Loans.
4.3 The Turbine Delivery Date of the Turbine(s) is ______.
4.4 The remaining Turbine Costs for the Turbine(s) are
_________.
4.5 The technology and size of the Turbine(s) is appropriate
for the Project to which it has been assigned.
4.6 No Event of Default or Inchoate Default has occurred and
is continuing.
4.7 All proceeds of all Turbine Purchase Loans and other
amounts deposited into the Turbine Purchase Sub-Account with respect to the
Turbine(s) on or prior to the date hereof, except for $_________ remaining in
such Turbine Purchase Sub-Account since the date of the last Turbine Purchase
Drawdown Certificate, have been expended and have been applied to Turbine Costs
for the Turbine(s) in accordance with the applicable Turbine Purchase Contract
or the Credit Agreement.
4.8 All insurance required under the Credit Agreement with
respect to the Turbine(s) is in place, in good standing and in full force and
effect and all premiums due thereon have been paid.
4.9 The Turbine Purchase Contract executed and delivered with
respect to the Turbine(s) is in full force and effect without change or
amendment since the date of its execution and delivery in a form which was
approved by Administrative Agent, except as consented to in writing by
Administrative Agent to the extent required under the Credit Agreement or as
otherwise permitted by the Credit Agreement. The Turbine Owner with respect to
the Turbine(s) is not in material default under the Turbine Purchase Contract
with respect to the Turbine(s) and, to the best of Borrower's knowledge, no
other material defaults have occurred with respect to the Turbine Purchase
Contract.
4.10 The Turbine Owner with respect to the Turbine(s) has not
incurred or permitted to exist any Liens (other than Permitted Liens) on the
Turbine(s) or any part thereof or on any other assets of such Turbine Owner,
except as permitted under the Credit Agreement. No Liens, claims of Lien,
attachments or similar claims (including without limitation mechanic's and
materialman's liens) have been recorded or filed with respect to the Turbine(s)
or any part thereof, except Permitted Liens and such
2
240
Liens, claims of Lien, attachments or similar claims as will be released,
removed and discharged from the funds requested by this Turbine Purchase
Drawdown Certificate and the corresponding Notice of Turbine Purchase Borrowing.
4.11 All of the representations of Borrower and the relevant
Turbine Owner contained in the Credit Documents are true and correct to the
extent provided therein on and as of the Turbine Purchase Drawdown Date with the
same effect as if given on the date hereof (except to the extent such
representations and warranties relate to a prior date).
4.12 The conditions set forth in Section 3.6 of the Credit
Agreement are satisfied or have been waived in writing by Administrative Agent
as of the date hereof and as of the date of the requested draw.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
241
IN WITNESS WHEREOF, Borrower has executed this Turbine
Purchase Drawdown Certificate as of the date hereof.
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By:
-------------------------------------
Name:
Title:
4
242
EXHIBIT C-9
to Credit Agreement
FORM OF ENGINEER'S TURBINE PURCHASE CERTIFICATE
[LETTERHEAD OF [▇.▇. ▇▇▇▇, INC.]]
(Delivered pursuant to Section 3.6.3)
Credit Suisse First Boston, Date: _____________________
New York Branch Drawdown Date: _________________
as Administrative Agent for the Banks
Eleven Madison Avenue
New York, New York 10010
Attn: Manager, Project Finance
Re: Calpine Construction Finance Company II Turbines
Ladies and Gentlemen:
▇.▇. ▇▇▇▇, Inc. ("Independent Engineer"), pursuant to Section
3.6.3 of the Credit Agreement dated as of October 16, 2000 ("Credit Agreement"),
among Calpine Construction Finance Company II, LLC, a Delaware limited liability
company, as Borrower ("Borrower"), the financial institutions listed on Exhibit
H thereto (the "Banks"), Credit Suisse First Boston, acting through its New York
Branch, as Lead Arranger and Administrative Agent ("Administrative Agent"), The
Bank of Nova Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner, Banc
of America Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.)
Capital LLC, as Arranger and Co-Syndication Agent, Bayerische Landesbank
Girozentrale, as Arranger, Co-Documentation Agent and LC Bank, CIBC World
Markets Corp., as Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇
North America Services LLC, as Arranger and Co-Documentation Agent and TD
Securities (USA) Inc., as Arranger and Co-Documentation Agent, hereby makes the
following statements, with respect to the Turbine(s) identified by serial #___
(as set forth on Exhibit G-3 to the Credit Agreement) (the "Turbine(s)") and
assigned to the _______ Project as of ________________.
1. We have read the provisions of Section 3.6.3 of the Credit
Agreement as it identifies the responsibilities of the
Independent Engineer related to providing this Independent
Engineer's Turbine Purchase Certificate.
2. All defined terms set forth in this Independent Engineer's
Turbine Purchase Certificate shall have respective meanings
specified in Exhibit A to the Credit Agreement unless
otherwise defined herein.
3. We have reviewed the material and data made available to us by
Borrower since the date of the last Turbine Purchase Drawdown
Certificate with respect to the Turbine(s), consisting of the
Turbine Purchase Drawdown Certificate with respect to the
Turbine(s), if any, dated ________________. We have reviewed
paragraphs 4.1 through 4.7 of the Turbine Purchase Drawdown
Certificate with respect to the Turbine(s) (the "Current
Turbine Purchase Drawdown Certificate"), dated
________________ (the "Drawdown Date"), and we have previously
reviewed the corresponding paragraphs of all previous Turbine
Purchase Drawdown Certificates
243
with respect to the Turbine(s). We have also reviewed the
following additional material: _____________________.
4. Based on our review of the aforementioned information, and of
data provided to us by others which we have not independently
verified, we are of the opinion that, as of Drawdown Date:
a. The payments to the Turbine Purchase Contractor with
respect to the Turbine have been made.
b. Our scope of review [HAS/HAS NOT] brought to our
actual attention any errors in the information
contained in the paragraphs of the Current Turbine
Purchase Drawdown Certificate. [IF ANY PARAGRAPH IN
THE CURRENT TURBINE PURCHASE DRAWDOWN CERTIFICATE IS
INCORRECT, LIST AND SPECIFY REASONS.]
Except as specified above, the undersigned has not discovered
any error in the matters set forth in the Current Turbine Purchase Drawdown
Certificate that are within its scope of work.
The information contained herein is for the benefit of
Administrative Agent and the Banks and may be relied upon for the purposes of
making Loans pursuant to the Credit Agreement.
▇.▇. ▇▇▇▇, INC.,
a Washington corporation
By:
---------------------------------------------
Name:
Title:
244
EXHIBIT C-10
to Credit Agreement
FORM OF DISBURSEMENT REQUISITION
(Delivered pursuant to Section 7.2.2 [AND SECTION 7.2.3]
of the Credit Agreement)
[Date]
Credit Suisse First Boston
New York Branch
as Administrative Agent for the Banks
Eleven Madison Avenue
New York, New York 10010
Attn: Manager, Project Finance
Re: Calpine Construction Finance Company II Projects
This Disbursement Requisition is delivered to you pursuant to
Section 7.2.2 [AND SECTION 7.2.3] of the Credit Agreement dated as of October
16, 2000 ("Credit Agreement"), among Calpine Construction Finance II Company,
LLC, a Delaware limited liability company, as Borrower ("Borrower"), the
financial institutions listed on Exhibit H thereto (the "Banks"), Credit Suisse
First Boston, acting through its New York Branch, as Lead Arranger and
Administrative Agent ("Administrative Agent"), The Bank of Nova Scotia, as Lead
Arranger, Co-Syndication Agent and Bookrunner, Banc of America Securities LLC,
as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and
Co-Syndication Agent, Bayerische Landesbank Girozentrale, as Arranger,
Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as Arranger and
Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as
Arranger and Co-Documentation Agent and TD Securities (USA) Inc., as Arranger
and Co-Documentation Agent. All capitalized terms used herein shall have the
respective meanings specified in Exhibit A to the Credit Agreement unless
otherwise defined herein or unless the context requires otherwise.
This Disbursement Requisition constitutes, with respect to the
_______ Project (the "Project"), [(a)] a request for a transfer of Senior O&M
Costs from the Revenue Account to the Operating Account as described in Section
7.2.2 of the Credit Agreement [AND (b) A REQUEST FOR PAYMENT OF SUBORDINATED O&M
COSTS AS DESCRIBED IN SECTION 7.2.3 OF THE CREDIT AGREEMENT], [EACH] as further
described below:
1. DISBURSEMENT DATE
1.1 [IF THE DISBURSEMENT REQUISITION IS FOR SENIOR O&M COSTS
ONLY, INSERT: THE DISBURSEMENT DATE IS [LAST BANKING DAY OF EACH MONTH].]
[IF THE DISBURSEMENT REQUISITION INCLUDES PAYMENT OF
SUBORDINATED O&M COSTS, INSERT: [THE DISBURSEMENT DATE IS THE LAST DAY OF A
CALENDAR QUARTER].]
245
2. AMOUNT
2.1 Amount of Senior O&M Costs to be transferred to the
Project's Operating Sub-Account: $___________.
2.2 [AMOUNT OF SUBORDINATED O&M COSTS: $___________.]
3. BORROWER HEREBY CONFIRMS AND CERTIFIES THAT, as of the date
hereof:
3.1 The O&M Costs with respect to the Project incurred during
the present fiscal year of Borrower through the immediately preceding date of
disbursement from the Revenue Account pursuant to Sections 7.2.2 [AND 7.2.3] of
the Credit Agreement by or on behalf of Borrower are $___________, segregated by
major categories as described in Column 1 on Appendix I hereto.
3.2 The O&M Costs with respect to the Project expected to be
paid with this disbursement are $__________, segregated by major categories as
described in Column 5 on Appendix I hereto. All items shown in Column 5
represent Borrower's best estimate of O&M Costs with respect to the Project
which have become, or are anticipated to become, due and payable during the
calendar month to which this Disbursement Requisition relates. [OF THE AMOUNTS
SHOWN IN COLUMN 5, ALL REPRESENT WORK OR AMOUNTS INCLUDED IN THE PROJECT'S
ANNUAL OPERATING BUDGET/$___________ REPRESENT WORK OR AMOUNTS NOT INCLUDED IN
THE PROJECT'S ANNUAL OPERATING BUDGET].
3.3 No Event of Default or Inchoate Default or, with respect
to the Project, Non-Fundamental Project Default or Non-Fundamental Project
Inchoate Default has occurred and is continuing or will occur upon giving effect
to the application of the disbursement requested hereby.
3.4 Except as specified below, all proceeds of all
disbursements from the [REVENUE ACCOUNT] [PROJECT'S REVENUE SUB-ACCOUNT] made
prior to the date hereof for O&M Costs with respect to the Project have been
expended and have been applied to O&M Costs with respect to the Project in
accordance with the Credit Agreement. [LIST ANY EXCEPTIONS] [TO DISCUSS WHETHER
SEPARATE REVENUE SUB-ACCOUNTS ARE APPROPRIATE]
3.5 Attached to this Disbursement Requisition as Appendix II
are true, complete and correct listings of all Additional Project Documents with
respect to the Project and all material property, rights and assets acquired by
Borrower with respect to the Project since the date of the last Disbursement
Requisition with respect to the Project to the date hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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246
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Disbursement Requisition on the date shown above.
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By:
-------------------------------------------
Name:
Title:
247
APPENDIX I
To Exhibit C-10
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
Disbursement Request for the month of _____________, 200__ with respect to
the _______ Project
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
O&M the (5)+(1) (2+4) (7)-(8)
[Example Only - BUDGET CURRENT lesser of TOTAL
Actuals to Conform EXPENDITURES DISBURSEMENTS AMOUNT MONTH'S 4 or 5-3 O&M O&M
to Categories Set TO LAST TO LAST REMAINING FOR EXPENDITURES (=/<(4))* NET COSTS TOTAL OVER %
Forth in Operating DISBURSEMENT DISBURSEMENT RESIDUAL/ CURRENT DUE AND DISBURSEMENT TO O&M (UNDER) OVER/
Budget] DATE DATE (SHORTFALL) MONTH PAYABLE REQUEST DATE BUDGET RUN (UNDER)
Land
Development Costs
Construction
Power Island
Insurance
EPC
Project
Enhancements
Sales Tax
Construction
Management
Startup
(Commissioning)
Pending Change
Orders
Title Insurance
Subtotal
Interest Expense
Commitment Fees
Independent
Engineer
TOTAL
---------------------------------
* Subject to variation as permitted under Section [5.15.2] of the Credit
Agreement.
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248
APPENDIX II
to Exhibit C-10
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
Additional Project Documents with respect to the _______ Project to be
executed from date of previous disbursement request to the date hereof.
Item Cost
TOTAL $[____________]
II-1
249
EXHIBIT C-11
to Credit Agreement
FORM OF RESERVE ACCOUNT DISBURSEMENT REQUISITION
(Delivered pursuant to Section 7.8.3 of the Credit Agreement)
[Date]
Credit Suisse First Boston,
New York Branch
as Administrative Agent for the Banks
Eleven Madison Avenue
New York, New York 10010
Attn: Manager, Project Finance
Re: Calpine Construction Finance Company II Projects
This Reserve Account Disbursement Requisition is delivered to
you pursuant to Section 7.8.3 of the Credit Agreement dated as of October 16,
2000 ("Credit Agreement"), among Calpine Construction Finance Company II, LLC, a
Delaware limited liability company, as Borrower ("Borrower"), the financial
institutions listed on Exhibit H thereto (the "Banks"), Credit Suisse First
Boston, acting through its New York Branch, as Lead Arranger and Administrative
Agent ("Administrative Agent"), The Bank of Nova Scotia, as Lead Arranger,
Co-Syndication Agent and Bookrunner, Banc of America Securities LLC, as Arranger
and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and Co-Syndication
Agent, Bayerische Landesbank Girozentrale, as Arranger, Co-Documentation Agent
and LC Bank, CIBC World Markets Corp., as Arranger and Co-Documentation Agent,
Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as Arranger and
Co-Documentation Agent and TD Securities (USA) Inc., as Arranger and
Co-Documentation Agent. All capitalized terms used herein shall have the
respective meanings specified in Exhibit A to the Credit Agreement unless
otherwise defined herein or unless the context requires otherwise.
This Reserve Account Disbursement Requisition relates to the
__________________ Project (the "Project").
Borrower hereby requests a withdrawal from the Working Capital
Reserve Account in the amount of $____________ for the payment of Senior O&M
Costs that have become due and payable for the Project as described and to the
Persons specified on Schedule 1 attached hereto.
Borrower hereby confirms and certifies that, as of the date
hereof:
(a) Insufficient amounts are available in the Revenue
Account and the Project's Operating Account for the
payment of Senior O&M Costs with respect to the
Project;
[CHOOSE ONE ALTERNATIVE (b) BELOW, AS APPLICABLE]
250
[(b) THE AMOUNT REQUESTED DOES NOT, TOGETHER WITH ALL SENIOR
O&M COSTS WITH RESPECT TO THE PROJECT PREVIOUSLY PAID DURING
THE SAME CALENDAR YEAR AS THE DATE OF THIS REQUISITION, EXCEED
115% OF THE AMOUNTS OF SENIOR O&M COSTS (OTHER THAN FUEL
COSTS) SPECIFIED FOR THE PROJECT IN THE PROJECT'S ANNUAL
OPERATING BUDGET FOR SUCH CALENDAR YEAR.]
[(b) ADMINISTRATIVE AGENT, AS EVIDENCED BY ITS SIGNATURE
BELOW, CONSENTS TO SUCH WITHDRAWAL.]
(c) No Event of Default or Inchoate Default or, with respect
to the Project, Non-Fundamental Project Default or Non-Fundamental Project
Inchoate Default has occurred and is continuing or will occur upon giving effect
to the application of the withdrawal requested hereby; and
(d) Except as specified below, all proceeds of all withdrawals
from the Working Capital Reserve Account made prior to the date hereof have been
expended and have been applied in accordance with the Credit Agreement. [LIST
ANY EXCEPTIONS].
The undersigned hereby certifies that the undersigned is an
officer of Borrower and, as such, is authorized to execute this Reserve Account
Disbursement Requisition on behalf of Borrower.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Reserve Account Disbursement Requisition on the date shown above.
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By:
----------------------------------------------
Name:
Title:
The undersigned acknowledges receipt of a copy of this Reserve
Account Disbursement Requisition:
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH Date: ,
as Administrative Agent for the Banks ---------- -----
By:
------------------------------------------------------
Name:
Title:
By:
------------------------------------------------------
Name:
Title:
251
Schedule 1
To Exhibit C-11
Description of Payees and Uses of Funds Withdrawn
From the Working Capital Reserve Account
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252
EXHIBIT D-1
to the Credit Agreement
FORM OF DEPOSITARY AGREEMENT
dated as of October 16, 2000
among
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company,
as Borrower,
CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch
as Administrative Agent for the Banks,
and
THE BANK OF NEW YORK,
as Depositary Agent
253
THIS DEPOSITARY AGREEMENT (this "Agreement"), dated as of
October 16, 2000, is among CALPINE CONSTRUCTION FINANCE COMPANY II, LLC, a
Delaware limited liability company ("Borrower"), CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch, acting in its capacity as Administrative
Agent ("Administrative Agent") for the Banks under the Credit Agreement (as
defined below), and THE BANK OF NEW YORK, acting in its capacity as Depositary
Agent (the "Depositary Agent").
RECITALS
A. Borrower has entered into that certain Credit Agreement,
dated as of October 16, 2000 (as the same may be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among Borrower,
the financial institutions listed on Exhibit H thereto (the "Banks"), Credit
Suisse First Boston, acting through its New York Branch, as Lead Arranger and
Administrative Agent ("Administrative Agent"), The Bank of Nova Scotia, as Lead
Arranger, Co-Syndication Agent and Bookrunner, Banc of America Securities LLC,
as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and
Co-Syndication Agent, Bayerische Landesbank Girozentrale, as Arranger,
Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as Arranger and
Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as
Arranger and Co-Documentation Agent and TD Securities (USA) Inc., as Arranger
and Co-Documentation Agent, whereby the Banks have agreed to advance to Borrower
certain loans to finance the construction and operation by Borrower of the
Projects and the purchase of the Turbines.
B. In order to give effect to (a) the security interest in the
Accounts (as defined herein) granted by Borrower to Administrative Agent and (b)
the deposit of funds into the Accounts and the application of funds in
connection with the construction and operation of the Projects and the purchase
of the Turbines, each as contemplated in the Credit Agreement, the parties have
agreed that all amounts to be paid over to Administrative Agent for deposit
into, and disbursement from, the Accounts under of the Credit Agreement shall be
paid to Depositary Agent, as agent for Administrative Agent, to be held by
Depositary Agent in pledge as collateral security for Borrower's obligations
under the Credit Agreement and distributed by Depositary Agent as provided
herein.
C. Depositary Agent has agreed to act as depositary agent for
Administrative Agent pursuant to the terms of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants contained in this Agreement and for other good and valuable
consideration, receipt of which is hereby acknowledged, the parties hereto
hereby agree as follows:
254
ARTICLE 1
Definitions; Rules of Interpretation
Section 1.1 Definitions. Capitalized terms used but not defined herein shall
have the respective meanings given them in Exhibit A to the Credit Agreement.
The following terms when used herein shall have the following meanings:
"Accounts" shall mean the collective reference to the
Construction Account, the Revenue Account, the Loss Proceeds Account, the
Working Capital Reserve Account and any and all other accounts hereinafter
established under the Credit Agreement and/or this Agreement, including any
sub-accounts within such accounts but excluding any Operating Account held in
the name of any Project Owner.
"Account Withdrawal Certificate" shall mean a certificate of
an Authorized Representative of Borrower countersigned by Administrative Agent
substantially in the form of Exhibit A hereto, stating (i) the specific amount
requested to be withdrawn from a specific Account and transferred, applied or
paid over to another Account or Person, (ii) the purpose for which such payment
shall be made, (iii) that no Event of Default and, with respect to withdrawals
from the Construction Account or the Loss Proceeds Account of the Project to
which such withdrawl relates, no Non-Fundamental Project Default shall have
occurred and be continuing or will occur after giving effect to the withdrawal
of funds so requested and (iv) that all other conditions to distributions from
such account set forth in the Credit Agreement have been satisfied.
"Construction Account" shall mean, collectively, the special
account designated by that name established by the Depositary Agent pursuant to
Section 2.5, the Construction Sub-Accounts, including the Turbine Purchase
Sub-Accounts and all other sub-accounts therein.
"Disbursement Instruction" shall mean a notice from
Administrative Agent, substantially in the form of Exhibit B hereto, instructing
Depositary Agent to transfer a specific amount of funds from any of the Accounts
to such other account or recipient identified by Administrative Agent in
accordance therewith.
"Loss Proceeds Account" shall mean collectively the special
account designated by that name established by Depositary Agent pursuant to
Section 2.5 and all sub-accounts therein.
"Revenue Account" shall mean the special account designated by
that name established by the Depositary Agent pursuant to Section 2.5 and all
sub-accounts therein.
"UCC" shall mean the Uniform Commercial Code as adopted in the
State of New York.
"Working Capital Reserve Account" shall mean the special
account designated by that name established by the Depositary Agent pursuant to
Section 2.5 and all sub-accounts therein.
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Section 1.2 Rules of Interpretation. The rules of
interpretation set forth in Exhibit A to the Credit Agreement shall apply to
this Agreement.
ARTICLE 2
Appointment of Depositary Agent;
Establishment of Accounts
Section 2.1 Appointment of Depositary Agent. Depositary Agent
is hereby appointed by Borrower and by Administrative Agent as depositary agent
hereunder, and Depositary Agent hereby agrees to act as such and to accept all
cash, payments, other amounts and Permitted Investments to be delivered to or
held by Depositary Agent pursuant to the terms of this Agreement. Depositary
Agent shall hold and safeguard the Accounts (and the cash, instruments and
securities on deposit therein) during the term of this Agreement and shall treat
the cash, instruments, and securities in the Accounts as funds, instruments and
securities pledged by Borrower to Administrative Agent for the ratable benefit
of the Banks, to be held by Depositary Agent, as agent of Administrative Agent,
in trust in accordance with the provisions hereof.
Section 2.2 Security Interest; Control. In order to secure the
performance by Borrower of all of its covenants, agreements and obligations
under the Credit Agreement and the other Credit Documents and the payment and
performance by Borrower of all Obligations, this Agreement is intended to
create, and Borrower hereby pledges to and creates in favor of Administrative
Agent, for the benefit of the Banks, a security interest in and to, the
Accounts, all cash, cash equivalents, instruments, investments and other
securities at any time on deposit in the Accounts, and all proceeds of any of
the foregoing (collectively, the "Collateral"). All moneys, cash equivalents,
instruments, investments and securities at any time on deposit in any of the
Accounts shall constitute collateral security for the payment and performance by
Borrower of the Obligations, and shall at all times be subject to the control of
Administrative Agent, acting through Depositary Agent in respect of the Accounts
and shall be held in the custody of Depositary Agent in trust for the purposes
of, and on the terms set forth in, this Agreement.
Section 2.3 Accounts Maintained as UCC "Securities Accounts."
Depositary Agent hereby agrees and confirms that it has established the Accounts
as set forth and defined in this Agreement. Each of Depositary Agent and
Borrower agrees that (i) Depositary Agent is acting as "securities intermediary"
(within the meaning of Section 8-102(14) of the UCC) with respect to the
Accounts and the "financial assets" (within the meaning of Section 8-102(a)(9)
of the UCC, the "Financial Assets") credited to the Accounts; (ii) each such
Account established by Depositary Agent is and will be maintained as a
"securities account" (within the meaning of Section 8-501 of the UCC); (iii)
Borrower is an "entitlement holder" (within the meaning of Section 8-102(a)(7)
of the UCC) in respect of the Financial Assets credited to such Accounts and
with respect to such Accounts and Depositary Agent shall so note in its records
pertaining to such Financial Assets and Accounts; and (iv) all Financial Assets
in registered form or payable to or to order of and credited to any such Account
shall be registered in the name of, payable to or to the order of, or specially
endorsed to, Depositary Agent or in blank, or credited to another securities
account maintained in the name of Depositary Agent, and in no case will any
Financial
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Asset credited to any such Account be registered in the name of, payable to or
to the order of, or endorsed to, Borrower except to the extent the foregoing
have been subsequently endorsed by Borrower to Depositary Agent or in blank.
Each item of property (including a security, security entitlement, investment
property, instrument or obligation, share, participation, interest or other
property whatsoever) credited to any Account shall be treated as a Financial
Asset. Until this Agreement shall terminate in accordance with the terms hereof,
Administrative Agent shall have "control" (within the meaning of Section
8-106(d)(2) of the UCC) of Borrower's "security entitlements" (within the
meaning of Section 8-102(a)(17) of the UCC, "Security Entitlements") with
respect to the Accounts and the Financial Assets credited to the Accounts. All
property delivered to Depositary Agent pursuant to this Agreement will be
promptly credited to the Accounts and shall be treated as Financial Assets. If
at any time Depositary Agent shall receive from Administrative Agent any
"entitlement order" (within the meaning of Section 8-102(8) of the UCC, an
"Entitlement Order") relating to the Accounts or Financial Assets credited to
the Accounts, Depositary Agent shall comply with such Entitlement Order without
further consent by Borrower or any other Person. In the event that Depositary
Agent receives conflicting Entitlement Orders relating to the Accounts or
Financial Assets credited to the Accounts from Administrative Agent and any
other Person (including, without limitation, Borrower), Depositary Agent shall
comply with the Entitlement Orders originated by Administrative Agent. Each of
Borrower and Depositary Agent agrees that it has not and will not execute and
deliver, or otherwise become bound by, any agreement under which it agrees with
any Person other than Administrative Agent to comply with Entitlement Orders
originated by such Person relating to the Accounts or Financial Assets credited
to the Accounts. Except for the claims and interests of Administrative Agent and
Borrower in the Accounts and the Financial Assets credited to the Accounts,
neither Depositary Agent nor Borrower knows of any claim to, or interest in, any
Account or Financial Assets credited to the Accounts. If either Depositary Agent
or Borrower obtains knowledge that any Person has asserted a lien, encumbrance
or adverse claim against any or the Accounts or Financial Assets credited to the
Accounts, such party will promptly notify Administrative Agent thereof. In the
event that the Depositary Agent has or subsequently obtains by agreement,
operation of law or otherwise a Lien or security interest in any Account, any
Security Entitlement carried therein or credited thereto or any Financial Asset
that is the subject of any such Security Entitlement, Depositary Agent agrees
that such Lien or security interest shall be subordinate to the Lien and
security interest of the Administrative Agent. The Financial Assets standing to
the credit of the Accounts will not be subject to deduction, set-off, banker's
lien or any other right, and Depositary Agent shall not grant, permit or consent
to any other right or interest in such Financial Assets, in favor of any Person
(including the Depositary Agent) other than Administrative Agent.
Section 2.4 Borrower's Rights. Borrower shall not have any
rights or powers with respect to any amounts in the Accounts or any part thereof
except (i) as provided in Article 5 hereof and (ii) the right to have such
amounts applied in accordance with the provisions hereof and of the Credit
Agreement.
Section 2.5 Creation of Accounts. Depositary Agent hereby
establishes at its office located in New York, New York, the following special,
segregated and irrevocable money collateral accounts and sub-accounts within
such accounts which shall be maintained at all times
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until the termination of this Agreement, unless earlier termination is otherwise
provided for herein or in the Credit Agreement:
(1) The Construction Account (Acc. # 050451);
(2) The Construction Sub-Account (Los Medanos) (Acc. # 050452);
(3) The Construction Sub-Account (Baytown) (Acc. # 050453);
(4) The Construction Sub-Account (▇▇▇▇▇▇▇▇) (Acc. # 050454);
(5) The Construction Sub-Account (Panda) (Acc. # 050455);
(6) The Construction Sub-Account (Santa ▇▇▇▇) (Acc. # 050456);
(7) The Construction Sub-Account (Delta) (Acc. # 050457);
(8) The Construction Sub-Account (Freestone) (Acc. # 050458);
(9) The Construction Sub-Account (Broad River) (Acc. # 050459);
(10) The Construction Sub-Account (Channel) (Acc. # 050460);
(11) The Construction Sub-Account (Corpus Christi) (Acc. # 050461);
(12) The Construction Sub-Account (Decatur) (Acc. # 050462);
(13) The Construction Sub-Account (▇▇▇▇▇▇) (Acc. # 050463);
(14) The Turbine Purchase Sub-Account (Acc. # 050464);
(15) The Revenue Account (Acc. # 050465);
(16) The Revenue Sub-Account (Los Medanos) (Acc. # 050491);
(17) The Revenue Sub-Account (Baytown) (Acc. # 050490);
(18) The Revenue Sub-Account (▇▇▇▇▇▇▇▇) (Acc. # 050489);
(19) The Revenue Sub-Account (Panda) (Acc. # 050488);
(20) The Revenue Sub-Account (Santa ▇▇▇▇) (Acc. # 050487);
(21) The Revenue Sub-Account (Delta) (Acc. # 050486);
(22) The Revenue Sub-Account (Freestone) (Acc. # 050485);
(23) The Revenue Sub-Account (Broad River) (Acc. # 050484);
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(24) The Revenue Sub-Account (Channel) (Acc. # 050483);
(25) The Revenue Sub-Account (Corpus Christi) (Acc. # 050482);
(26) The Revenue Sub-Account (Decatur) (Acc. # 050481);
(27) The Revenue Sub-Account (▇▇▇▇▇▇) (Acc. # 050480);
(28) The Loss Proceeds Account (Acc. # 050466);
(29) The Loss Proceeds Sub-Account (Los Medanos) (Acc. # 050479);
(30) The Loss Proceeds Sub-Account (Baytown) (Acc. # 050478);
(31) The Loss Proceeds Sub-Account (▇▇▇▇▇▇▇▇) (Acc. # 050477);
(32) The Loss Proceeds Sub-Account (Panda) (Acc. # 050476);
(33) The Loss Proceeds Sub-Account (Santa ▇▇▇▇) (Acc. # 050475);
(34) The Loss Proceeds Sub-Account (Delta) (Acc. # 050474);
(35) The Loss Proceeds Sub-Account (Freestone) (Acc. # 050473);
(36) The Loss Proceeds Sub-Account (Broad River) (Acc. # 050472);
(37) The Loss Proceeds Sub-Account (Channel) (Acc. # 050471);
(38) The Loss Proceeds Sub-Account (Corpus Christi) (Acc. # 050470);
(39) The Loss Proceeds Sub-Account (Decatur) (Acc. #050469);
(40) The Loss Proceeds Sub-Account (▇▇▇▇▇▇) (Acc. # 050468);
(41) The Working Capital Reserve Account (Acc. # 050467);
(42) The Working Capital Sub-Account (Los Medanos) (Acc. # 050598);
(43) The Working Capital Sub-Account (Baytown) (Acc. # 050597);
(44) The Working Capital Sub-Account (▇▇▇▇▇▇▇▇) (Acc. # 050596);
(45) The Working Capital Sub-Account (Panda) (Acc. # 050595);
(46) The Working Capital Sub-Account (Santa ▇▇▇▇) (Acc. # 050594);
(47) The Working Capital Sub-Account (Delta) (Acc. # 050593);
(48) The Working Capital Sub-Account (Freestone) (Acc. # 050592);
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(49) The Working Capital Sub-Account (Broad River) (Acc. # 050591);
(50) The Working Capital Sub-Account (Channel) (Acc. # 050590);
(51) The Working Capital Sub-Account (Corpus Christi) (Acc. #
050589);
(52) The Working Capital Sub-Account (Decatur) (Acc. # 050588); and
(53) The Working Capital Sub-Account (▇▇▇▇▇▇) (Acc. # 050587).
All moneys, investments and securities at any time on deposit in any of the
Accounts shall constitute trust funds to be held in the custody of Depositary
Agent for the purposes and on the terms set forth in this Agreement.
ARTICLE 3
Deposits into Accounts
Section 3.1 Deposits. Each of Borrower and Administrative Agent
covenants and agrees that all amounts required by the Credit Agreement or the
other Credit Documents to be delivered or deposited in any of the Accounts,
shall be paid over to Depositary Agent directly for deposit into the appropriate
Account. Any deposit made to any Account under this Agreement shall be
irrevocable and the amount of such deposit and any instrument or security held
in such Account and all income or gain earned on such deposits shall be held in
trust by Depositary Agent and applied solely as provided in this Agreement. In
the event Depositary Agent receives monies without adequate instruction with
respect to the source or proper Account into which such monies are to be
deposited, Depositary Agent shall deposit such monies into the Revenue Account
and notify Borrower and Administrative Agent of the receipt and the source of
such monies.
ARTICLE 4
Payments from Accounts
Section 4.1 Withdrawals by Administrative Agent. As soon as
practicable, and in all events within three Banking Days after receipt of a
Disbursement Instruction, executed by Administrative Agent, Depositary Agent
shall distribute or apply monies on deposit in the Accounts specified in such
notice, in the manner, in the amount and to the Person or Account specified in
such Disbursement Instruction. Notwithstanding anything to the contrary in this
Agreement, from and after Depositary Agent's receipt of notice from
Administrative Agent or Borrower that an Event of Default exists until such time
as Depositary Agent receives notice from Administrative Agent that such Event of
Default no longer exists, Depositary Agent shall only withdraw or transfer
amounts in the Construction Account or the Loss Process Account at the direction
of Administrative Agent. Notwithstanding anything to the contrary in this
Agreement, from and after Depositary Agent's receipt of notice from
Administrative Agent or Borrower that a Non-Fundamental Project Default exists
until such time as Depositary Agent receives notice from Administrative Agent
that such Non-Fundamental Project Default no longer
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260
exists, Depositary Agent shall only withdraw or transfer amounts in the
Construction Account or the Loss Proceeds Account for the Project to which such
Non-Fundamental Project Default relates at the direction of Administrative
Agent. In the event that funds on deposit in any Account exceed the amounts
required to be deposited therein, and such excess funds are required to be
transferred to the Revenue Account pursuant to the Credit Agreement,
Administrative Agent shall, as soon as practicable, deliver a Disbursement
Instruction to the Depositary Agent requesting that such excess funds be
transferred to the Revenue Account.
Section 4.2 Withdrawals from Construction Account. On the same Banking
Day on which Depositary Agent receives an Account Withdrawal Certificate from
Borrower, duly executed by Borrower and acknowledged and agreed to in writing by
Administrative Agent, requesting that funds be withdrawn and/or transferred from
the Construction Account or a sub-account therein, Depositary Agent shall
distribute or apply monies on deposit in the Construction Account or such
sub-account therein in the manner, in the amount and to the Person or Account
specified in such Account Withdrawal Certificate; provided, however, that in the
event that Depositary Agent receives such Account Withdrawal Certificate after
12:00 p.m. eastern standard time of any Banking Day, then Depositary Agent may
take the actions specified therein on the next Banking Day.
Section 4.3 Withdrawals from the Revenue Account. As soon as
practicable and in all events within three Banking Days after receipt of an
Account Withdrawal Certificate from Borrower, duly executed by Borrower and
acknowledged and agreed to in writing by Administrative Agent, requesting that
funds be withdrawn and/or transferred from the Revenue Account or a sub-account
therein, Depositary Agent shall distribute or apply monies on deposit in the
Revenue Account or such sub-account therein in the manner, in the amount and to
the Person or Account specified in such Account Withdrawal Certificate.
Section 4.4 Withdrawals from the Loss Proceeds Account. As soon as
practicable, and in all events within three Banking Days after receipt of an
Account Withdrawal Certificate from Borrower, duly executed by Borrower and
acknowledged and agreed to in writing by Administrative Agent, requesting that
funds be withdrawn and/or transferred from the Loss Proceeds Account or a
sub-account therein, Depositary Agent shall distribute or apply monies on
deposit in the Loss Proceeds Account or such sub-account therein in the manner,
in the amount and to the Person or Account specified in such Account Withdrawal
Certificate.
Section 4.5 Withdrawals from the Working Capital Reserve Account. As
soon as practicable, and in all events within three Banking Days after receipt
of an Account Withdrawal Certificate from Borrower, duly executed by Borrower
and acknowledged and agreed to in writing by Administrative Agent, requesting
that funds be withdrawn and/or transferred from the Working Capital Reserve
Account or a sub-account therein, Depositary Agent shall distribute or apply
monies on deposit in the Working Capital Reserve Account or such sub-account
therein in the manner, in the amount and to the Person or Account specified in
such Account Withdrawal Certificate.
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ARTICLE 5
Investment
Section 5.1 Permitted Investments. Depositary Agent shall invest any
money held in any Account in such Permitted Investments as directed in writing
by Borrower from time to time (or, if Administrative Agent shall have notified
Depositary Agent that Administrative Agent is exercising its power of attorney
to direct investments, by and at the discretion of Administrative Agent). In the
event that Depositary Agent has not received any such written directions,
Depositary Agent shall invest all available funds in a money market mutual fund
selected by Borrower. Any income or gain realized as a result of any such
investment shall be held as part of the applicable Account and reinvested as
provided in this Agreement until released in compliance with Article 4. Any
income tax payable on account of any such income or gain shall be paid by
Borrower. Depositary Agent shall have no liability for any loss resulting from
any such investment other than solely by reason of its willful misconduct or
gross negligence or bad faith or from failure to exercise such care in the
custody of any such investments as it does for accounts held by other customers
or in the custody of its own investments. Any such investment may be sold
(without regard to maturity date) by Depositary Agent whenever necessary to make
any distribution required by this Agreement. In addition, if an Event of Default
has occurred and is continuing, any investment shall be liquidated and sold by
Depositary Agent if so directed in writing by Administrative Agent.
ARTICLE 6
Depositary Agent
Section 6.1 Rights, Duties, etc. The acceptance by Depositary Agent of
its duties under this Agreement is subject to the following terms and conditions
which the parties to this Agreement hereby agree shall govern and control with
respect to Depositary Agent's rights, duties, liabilities and immunities:
(a) Depositary Agent shall act as an agent only and shall not
be responsible or liable in any manner for soliciting any funds or for the
sufficiency, correctness, genuineness or validity of any funds or securities
deposited with or held by it, except as set forth in Section 6.1(c) hereof;
(b) Depositary Agent shall be protected in acting or
refraining from acting upon any written notice, certificate, instruction,
request or other paper or document, as to the due execution thereof and the
validity and effectiveness of the provisions thereof and as to the truth of any
information contained therein, which Depositary Agent in good faith believes to
be genuine;
(c) Depositary Agent shall not be liable for any error of
judgment or for any act done or step taken or omitted except in the case of its
gross negligence, willful misconduct or bad faith;
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(d) Depositary Agent may consult with and obtain advice from
counsel in the event of any dispute or question as to the construction of any
provision of this Agreement;
(e) Depositary Agent shall have no duties as Depositary Agent
except those which are expressly set forth in this Agreement and in any
modification or amendment hereof; provided, however, that no such modification
or amendment shall affect Depositary Agent's duties unless Depositary Agent
shall have given its prior written consent to such modification or amendment;
(f) Depositary Agent may execute or perform any duties under
this Agreement either directly or through agents or attorneys;
(g) Depositary Agent may engage or be interested in any
financial or other transactions with any party to this Agreement and may act on,
or as depositary, trustee or agent for, any committee or body of holders of
obligations of such Persons as freely as if it were not Depositary Agent
hereunder; and
(h) Depositary Agent shall not be obligated to take any action
which in its reasonable judgment would involve it in expense or liability unless
it has been furnished with reasonable indemnity.
Section 6.2 Resignation or Removal.
(a) Depositary Agent may at any time resign by giving notice
to each other party to this Agreement, such resignation to be effective upon the
appointment of a successor Depositary Agent as provided below.
(b) Administrative Agent may remove Depositary Agent at any
time by giving notice to each other party to this Agreement, such removal to be
effective upon the appointment of successor Depositary Agent as provided below.
(c) In the event of any resignation or removal of Depositary
Agent, a successor Depositary Agent, which shall be a bank or trust company
organized under the laws of the United States America or of the State of New
York, having a corporate trust office in New York and a capital and surplus of
not less than $50,000,000, shall be appointed by Administrative Agent after
consultation with Borrower. If a successor Depositary Agent shall not have been
appointed and accepted its appointment as Depositary Agent within 45 days after
such notice of resignation of Depositary Agent or such notice of removal of
Depositary Agent, Depositary Agent, Administrative Agent or Borrower may apply
to any court of competent jurisdiction to appoint a successor Depositary Agent
to act until such time, if any, as a successor Depositary Agent shall have
accepted its appointment as provided above. A successor Depositary Agent so
appointed by such court shall immediately and without further act be superseded
by any successor Depositary Agent appointed by Administrative Agent as provided
above. Any such successor Depositary Agent shall be capable of acting as a
"securities intermediary" (within the meaning of Section 8-102(14) of the UCC)
and shall deliver to each party to this Agreement a written instrument accepting
such appointment and thereupon such
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successor Depositary Agent shall succeed to all the rights and duties of
Depositary Agent under this Agreement and shall be entitled to receive the
Accounts from the predecessor Depositary Agent.
ARTICLE 7
Determinations
Section 7.1 Sales of Permitted Investments. Depositary Agent will use
its best efforts to sell Permitted Investments so that actual money is
available, on each date on which a distribution is to be made pursuant to this
Agreement, for Depositary Agent to make such distribution in money on such date.
Section 7.2 Available Cash. In determining the amount of deposit or
available money in any Account at any time, in addition to any money then on
deposit in such Account, Depositary Agent shall treat as on deposit or as
available money the net amount which would have been received by Depositary
Agent on such day if Depositary Agent had liquidated all the Permitted
Investments (at then prevailing market prices) then on deposit in such Account.
ARTICLE 8
Miscellaneous
Section 8.1 Fees and Indemnification of Depositary Agent. Borrower
agrees to pay the fees of Depositary Agent as compensation for its services
under this Agreement. In addition, Borrower and Administrative Agent hereby
agree that (a) Depositary Agent, its directors, officers, employees and agents
(each such Person being called a "Depositary Agent Indemnitee") are released
from any and all liabilities to Borrower and Administrative Agent arising from
the terms or in connection with this Agreement and the compliance of any
Depositary Agent Indemnitee with the terms hereof, except to the extent that
such liabilities arise from the negligence or willful misconduct of any
Depositary Agent Indemnitee, and (b) Borrower, Administrative Agent and their
respective successors and assigns shall at all times indemnify and save harmless
the Depositary Agent Indemnitees from and against any and all claims, actions
and suits of others arising out of the terms of this Agreement or the compliance
of any Depositary Agent Indemnitee with the terms hereof, whether or not any
Depositary Agent Indemnitee is a party thereto, except to the extent that such
claims, actions or suits arise from the negligence or willful misconduct of any
Depositary Agent Indemnitee, and from and against any and all liabilities,
losses, damages, costs, charges, reasonable counsel fees and other expenses of
every nature and character arising by reason of the same. The provisions of this
Section 8.1 shall survive the termination of this Agreement and the resignation
or removal of Depositary Agent. All payments made by Borrower hereunder shall be
made without setoff or counterclaim.
Section 8.2 Waiver of Right of Set-Off. Depositary Agent waives, with
respect to all of its existing and future claims against Borrower or any
Affiliate thereof, all existing and future rights of set-off and banker's liens
against the Accounts and all items (and proceeds thereof) that come into its
possession in connection with the Accounts.
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Section 8.3 Termination. Subject to Section 8.1, the provisions of this
Agreement shall terminate on the date on which all Obligations shall have been
paid in full and the Credit Documents have terminated in accordance with their
terms. The termination of this Agreement shall have been deemed to have occurred
upon receipt by Depositary Agent of a certificate to such effect executed by
Administrative Agent. Promptly after receipt of such certificate by Depositary
Agent, Depositary Agent shall distribute all amounts contained in the Accounts
to the Borrower and shall be discharged of all obligations hereunder.
Section 8.4 Severability. If any one or more of the covenants or
agreements provided in this Agreement on the part of the parties to this
Agreement to be performed should be determined by a court of competent
jurisdiction to be contrary to law, such covenant or agreement shall be deemed
and construed to be severable from the remaining covenants and agreements of
this Agreement and shall in no way affect the validity of the remaining
provisions.
Section 8.5 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which taken together
shall constitute but one and the same instrument.
Section 8.6 Amendments This Agreement may not be modified or amended
without the prior written consent of each of the parties to this Agreement.
Section 8.7 Applicable Law. This Agreement and any instrument or
agreement required hereunder (to the extent not expressly provided for therein)
shall be governed by, and construed in accordance with, the laws of the State of
New York, without reference to conflicts of laws (other than Section 5-1401 of
the New York General Obligations Law).
Section 8.8 Notices, etc.. Except as otherwise provided in this
Agreement, notices and other communications under this Agreement shall be in
writing and shall be delivered, or mailed by first-class mail, postage prepaid,
to the following addresses:
(a) If to Administrative Agent:
Credit Suisse First Boston,
New York Branch
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Portfolio Management
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Borrower:
Calpine Construction Finance Company II, LLC
c/o Calpine Corporation
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Asset Management
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
(c) If to Depositary Agent:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10286
Attention: Corporate Trust Administrator
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
All notices or other communications required or permitted to
be delivered hereunder, shall be in writing and shall be considered as properly
delivered (a) if delivered in person, (b) if sent by overnight delivery service
(including Federal Express, ▇▇▇▇▇, DHL, Air Borne and other similar overnight
delivery services), (c) in the event overnight delivery services are not readily
available, if mailed by first class United States Mail, postage prepaid,
registered or certified with return receipt requested or (d) if sent by prepaid
telegram, or by telecopy confirmed by telephone. Notice so delivered shall be
effective upon receipt by the addressee, except that communication or notice so
transmitted by telecopy or other direct written electronic means shall be deemed
to have been validly and effectively delivered on the day (if a Banking Day and,
if not, on the next following Banking Day) on which it is transmitted if
transmitted before 4:00 p.m., recipient's time, and if transmitted after that
time, on the next following Banking Day; provided, however, that if any notice
is tendered to an addressee and the delivery thereof is refused by such
addressee, such notice shall be effective upon such tender. Any party shall have
the right to change its address for notice hereunder to any other location
within the continental United States by giving of 30 days' notice to the other
parties in the manner set forth hereinabove.
Section 8.9 Further Information. Depositary Agent shall
promptly provide Administrative Agent and Borrower with any information
reasonably requested by Administrative Agent or Borrower concerning balances in
the Accounts and payments from such Accounts.
Section 8.10 Benefit of Agreement. This Agreement shall inure
to the benefit of, and be enforceable by, the parties to this Agreement and
their respective successors and permitted assigns.
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Section 8.11 Account Balance Statements. Depositary Agent
shall on a monthly basis, and at such other times as Administrative Agent or
Borrower may from time to time reasonably request, provide Administrative Agent
and Borrower account balance statements in respect of each of the Accounts. Such
balance statements shall also include deposits and transfers to, withdrawals
from and the net investment income or gain received and collected from each
Account.
Section 8.12 Authorized Officer of Administrative Agent. All
written directions and instructions (which may be provided by facsimile
transmission) by Administrative Agent to Depositary Agent pursuant to this
Agreement shall be executed by an authorized signatory of Administrative Agent.
No person shall be deemed to be an authorized signatory of Administrative Agent
unless named on a certificate of incumbency of such person delivered to
Depositary Agent on the Closing Date.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have each caused this
Depositary Agreement to be duly executed by their duly authorized officers, all
as of the day and year first above written.
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By:
-----------------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH,
as Administrative Agent for the Banks
By:
-------------------------------------------------
Name:
Title:
By:
-------------------------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Depositary Agent
By:
-----------------------------------------------
Name:
Title:
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Exhibit A
Form of Account Withdrawal Certificate
[LETTERHEAD OF [BORROWER] [AUTHORIZED REPRESENTATIVE OF BORROWER]]
[DATE]
[THE LANGUAGE IN BRACKETS REPRESENTS ALTERNATIVE DRAWING EVENTS AND THE
CERTIFICATE PRESENTED SHOULD RECITE ONLY THE APPLICABLE ALTERNATIVE.]
Dear Sirs:
Reference is made to that certain Depositary Agreement (the "Depositary
Agreement") dated as of October 16, 2000, among Calpine Construction Finance
Company II, LLC, a Delaware limited liability company ("Borrower"), The Bank of
New York, as Depositary Agent ("Depositary Agent"), and Credit Suisse First
Boston, acting through its New York Branch, as Administrative Agent
("Administrative Agent") for the Banks named in that certain Credit Agreement
dated as of October 16, 2000, among Borrower, the financial institutions listed
on Exhibit H thereto (the "Banks"), Credit Suisse First Boston, acting through
its New York Branch, as Lead Arranger and Administrative Agent, The Bank of Nova
Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of America
Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as
Arranger and Co-Syndication Agent, Bayerische Landesbank Girozentrale, as
Arranger, Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as
Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America
Services LLC, as Arranger and Co-Documentation Agent and TD Securities (USA)
Inc., as Arranger and Co-Documentation Agent. Capitalized terms used herein
without definition shall have the respective meanings specified in the
Depositary Agreement.
Please liquidate investments held in the [NAME OF ACCOUNT] under the
Depositary Agreement in an amount sufficient to yield proceeds of
$_____________, to be used for the payment of [________ COSTS] as set forth in
the [CONSTRUCTION DRAWDOWN CERTIFICATE] [TURBINE PURCHASE DRAWDOWN CERTIFICATE]
[DISBURSEMENT REQUISITION] [SPECIFY ANY OTHER PURPOSES FOR THE WITHDRAWAL],
attached hereto as Schedule 1. Please [PAY] [TRANSFER] such amounts [BY
[OFFICIAL BANK CHECK] [WIRE TRANSFER]] to [THE ________ ACCOUNT(S)] [THE
PERSON(S) SPECIFIED ON SCHEDULE 2 ATTACHED HERETO AT THE ADDRESSES SET FORTH
THEREIN].
The undersigned hereby certifies that:
(a) the undersigned is an officer of the [BORROWER] [AUTHORIZED
REPRESENTATIVE OF BORROWER] and, as such, is authorized to execute this Account
Withdrawal Certificate on behalf of [BORROWER] [AUTHORIZED REPRESENTATIVE OF
BORROWER];
(b) the amounts paid or applied pursuant to this Account Withdrawal
Certificate shall be used for the purpose(s) set forth on Schedule 1 attached
hereto;
Exhibit A
269
(c) no Event of Default and, with respect to withdrawals from the
Construction Account or the Loss Proceeds Account for the Project to which such
withdrawal relates, no Non-Fundamental Project Default has occurred and is
continuing or will occur after giving effect to the withdrawal of funds
requested by this Account Withdrawal Certificate; and
(d) all other conditions to distributions from the [NAME OF ACCOUNT]
set forth in the Credit Agreement have been satisfied.
Very truly yours,
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By:
-----------------------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH,
as Administrative Agent for the Banks
By:
-------------------------------------------------
Name:
Title:
By:
-------------------------------------------------
Name:
Title:
Exhibit A
270
Schedule 1 to Account Withdrawal Certificate
Use of Proceeds of Withdrawal from [NAME OF ACCOUNT]
Exhibit A - Schedule 1
271
Schedule 2 to Account Withdrawal Certificate
Payees of Proceeds of Withdrawal from [NAME OF ACCOUNT]
Exhibit A - Schedule 2
272
Exhibit B
Form of Disbursement Instruction
[LETTERHEAD OF ADMINISTRATIVE AGENT]
[DATE]
[THE LANGUAGE IN BRACKETS REPRESENTS ALTERNATIVE DRAWING EVENTS AND THE
CERTIFICATE PRESENTED SHOULD RECITE ONLY THE APPLICABLE ALTERNATIVE.]
Dear Sirs:
Reference is made to that certain Depositary Agreement (the "Depositary
Agreement") dated as of October 16, 2000, among Calpine Construction Finance
Company II, LLC, a Delaware limited liability company ("Borrower"), The Bank of
New York, as Depositary Agent ("Depositary Agent"), and Credit Suisse First
Boston, acting through its New York Branch, as Administrative Agent
("Administrative Agent") for the Banks named in that certain Credit Agreement
dated as of October 16, 2000, among Borrower, the financial institutions listed
on Exhibit H thereto (the "Banks"), Credit Suisse First Boston, acting through
its New York Branch, as Lead Arranger and Administrative Agent, The Bank of Nova
Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of America
Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as
Arranger and Co-Syndication Agent, Bayerische Landesbank Girozentrale, as
Arranger, Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as
Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America
Services LLC, as Arranger and Co-Documentation Agent and TD Securities (USA)
Inc., as Arranger and Co-Documentation Agent. Capitalized terms used herein
without definition shall have the respective meanings specified in the
Depositary Agreement.
Please liquidate investments held in the [NAME OF ACCOUNT] under the
Depositary Agreement in an amount sufficient to yield proceeds of
$_____________. Please [PAY] [TRANSFER] such amounts [BY [OFFICIAL BANK CHECK]
[WIRE TRANSFER]] to [THE _________ ACCOUNT(S)] [THE PERSON(S) SPECIFIED ON
SCHEDULE 1 ATTACHED HERETO AT THE ADDRESSES SET FORTH THEREIN].
The undersigned hereby certifies that the undersigned is an officer of
the Administrative Agent and, as such, is authorized to execute this
Disbursement Instruction on behalf of Administrative Agent.
Very truly yours,
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
as Administrative Agent for the Banks
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
Exhibit B
273
Schedule 1 to Disbursement Instruction
Payees of Proceeds of Withdrawal from [NAME OF ACCOUNT]
Exhibit B -- Schedule 1
274
TABLE OF CONTENTS
ARTICLE 1 Definitions; Rules of Interpretation............................ 1
Section 1.1 Definitions............................................ 1
Section 1.2 Rules of Interpretation................................ 2
ARTICLE 2 Appointment of Depositary Agent; Establishment of Accounts...... 2
Section 2.1 Appointment of Depositary Agent........................ 2
Section 2.2 Security Interest; Control............................. 2
Section 2.3 Accounts Maintained as UCC "Securities Accounts"....... 2
Section 2.4 Borrower's Rights...................................... 3
Section 2.5 Creation of Accounts................................... 3
ARTICLE 3 Deposits into Accounts.......................................... 6
Section 3.1 Deposits............................................... 6
ARTICLE 4 Payments from Accounts.......................................... 6
Section 4.1 Withdrawals by Administrative Agent.................... 6
Section 4.2 Withdrawals from Construction Account.................. 7
Section 4.3 Withdrawals from the Revenue Account................... 7
Section 4.4 Withdrawals from the Loss Proceeds Account............. 7
Section 4.5 Withdrawals from the Working Capital Reserve Account... 7
ARTICLE 5 Investment...................................................... 8
Section 5.1 Permitted Investments.................................. 8
ARTICLE 6 Depositary Agent................................................ 8
Section 6.1 Rights, Duties, etc.................................... 8
Section 6.2 Resignation or Removal................................. 9
ARTICLE 7 Determinations.................................................. 10
Section 7.1 Sales of Permitted Investments......................... 10
Section 7.2 Available Cash......................................... 10
ARTICLE 8 Miscellaneous................................................... 10
Section 8.1 Fees and Indemnification of Depositary Agent........... 10
Section 8.2 Waiver of Right of Set-Off............................. 10
Section 8.3 Termination............................................ 11
Section 8.4 Severability........................................... 12
Section 8.5 Counterparts........................................... 11
Section 8.6 Amendments............................................. 11
Section 8.7 Applicable Law......................................... 11
Section 8.8 Notices, etc........................................... 11
Section 8.9 Further Information.................................... 12
Section 8.10 Benefit of Agreement.................................. 12
Section 8.11 Account Balance Statements............................ 13
Section 8.12 Authorized Officer of Administrative Agent............ 13
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EXHIBIT D2-A
to the Credit Agreement
AFFILIATED PARTY AGREEMENT GUARANTY
This AFFILIATED PARTY AGREEMENT GUARANTY (this "Guaranty")
dated as of __________, 200_ is made by CALPINE CORPORATION, a Delaware
corporation ("Guarantor"), in favor of [NAME OF PROJECT OWNER] a Delaware [TYPE
OF ENTITY] ("Project Owner").
RECITALS
A. _____________, a _____________ ("______"), and Project
Owner are parties to that certain ______________ dated as of ____________, 2000
(the "______"), that certain _______________ dated as of ___________, 2000 (the
" ") and that certain _________ dated as of ______________, 2000 (the "_____").
_____________, a _____________ ("______"), and Project Owner are parties to that
certain ______________ dated as of ____________, 2000 (the "_____"), that
certain _______________ dated as of ___________, 2000 (the "______") and that
certain _________ dated as of ______________, 2000 (the "_____"). Collectively,
the ______, the ______, the _______, and the _________ are referred to as the
"Relevant Documents". Collectively, ______, ______ and ______ are referred to as
the "Affiliated Parties". [RELEVANT DOCUMENTS TO INCLUDE, IF APPLICABLE,
CONSTRUCTION MANAGEMENT AGREEMENT, PROJECT MANAGEMENT AGREEMENT, O&M AGREEMENT,
FUEL MANAGEMENT AGREEMENT, FUEL SUPPLY AGREEMENT AND POWER MARKETING AGREEMENT.]
B. Guarantor owns, either directly or indirectly, more than
50% of the outstanding capital stock or other equity interests of each of the
Affiliated Parties; and
C. Project Owner has agreed to enter into the Relevant
Documents on the condition that Guarantor guarantee certain of the Affiliated
Parties' obligations thereunder as provided herein; and
D. Guarantor acknowledges that it will benefit, directly and
indirectly, if Project Owner enters into the Relevant Documents; and
E. The obligations of Guarantor hereunder are being incurred
concurrently with the obligations of the Affiliated Parties under the Relevant
Documents; and
F. Capitalized terms used but not defined herein shall have
the respective meanings given them in Exhibit A to that certain Credit Agreement
dated as of October 16, 2000 among Calpine Construction Finance Company II, LLC,
a Delaware limited liability company as ("Borrower"), the financial institutions
listed on Exhibit H thereto, Credit Suisse First Boston,
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acting through its New York Branch, as Lead Arranger and Administrative Agent
("Administrative Agent"), The Bank of Nova Scotia, as Lead Arranger,
Co-Syndication Agent and Bookrunner, Banc of America Securities LLC, as Arranger
and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and Co-Syndication
Agent, Bayerische Landesbank Girozentrale, as Arranger, Co-Documentation Agent
and LC Bank, CIBC World Markets Corp., as Arranger and Co-Documentation Agent,
Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as Arranger and
Co-Documentation Agent and TD Securities (USA) Inc., as Arranger and
Co-Documentation Agent. The Rules of Interpretations contained in said Exhibit A
shall apply hereto.
AGREEMENT
NOW, THEREFORE, in consideration of the premises set forth
above and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and as an inducement to Project Owner to enter
into the Relevant Documents with the Affiliated Parties, Guarantor hereby
consents and agrees as follows:
1. Guaranty.
(a) The undersigned Guarantor, as primary obligor and
not merely as surety, unconditionally and irrevocably guarantees to Project
Owner payment and performance when due, whether by acceleration or otherwise, of
any and all obligations and liabilities of each of the Affiliated Parties under
the Relevant Documents, together with all expenses incurred by Project Owner in
enforcing any of such obligations and liabilities or the terms hereof,
including, without limitation, reasonable fees and expenses of legal counsel
(collectively, the "Obligations"), and agrees that if for any reason any of the
Affiliated Parties shall fail to pay or perform when due any of such
Obligations, Guarantor will pay or perform the same forthwith (it being
understood that Guarantor's liability hereunder shall be subject to the same
limitations of liability as the Affiliated Parties' liability under the Relevant
Documents). Guarantor waives notice of acceptance of this Guaranty and of any
obligation to which it applies or may apply under the terms hereof, and waives
diligence, presentment, demand of payment, notice of dishonor or non-payment,
protest, notice of protest, of any such obligations, suit or taking other action
by Project Owner against, and giving any notice of default or other notice to,
or making any demand on, any party liable thereon (including Guarantor).
(b) This Guaranty is a primary obligation of the
Guarantor and is an absolute, unconditional, continuing and irrevocable guaranty
of payment and performance and not of collectibility and is in no way
conditioned on or contingent upon any attempt to enforce in whole or in part any
of the Affiliated Parties' liabilities and obligations to Project Owner. If any
of the Affiliated Parties shall fail to pay or perform any of the Obligations to
Project Owner as and when they are due, Guarantor shall forthwith pay or
perform, as applicable, such Obligations. Any and all payments by Guarantor
hereunder shall be in immediately available funds. Each failure by any of the
Affiliated Parties to pay or perform any Obligations shall give rise to a
separate cause of action herewith, and separate suits may be brought hereunder
as each cause of action arises.
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(c) Project Owner may, at any time and from time to
time (whether or not after revocation or termination of this Guaranty) without
the consent of or notice to Guarantor, except such notice as may be required by
the Relevant Documents or applicable law which cannot be waived, without
incurring responsibility to Guarantor, without impairing or releasing the
obligations of Guarantor hereunder, upon or without any terms or conditions and
in whole or in part, (i) change the manner, place and terms of payment or
performance or change or extend the time of payment of, renew, or alter any
Obligation, or any obligations and liabilities (including any of those
hereunder) incurred directly or indirectly in respect thereof or hereof or in
any manner modify, amend or supplement the terms of the Relevant Documents, any
documents, instruments or agreements executed in connection therewith, in each
case with the consent of the relevant Affiliated Parties, if required by the
Relevant Documents, and the guaranty herein made shall apply to the Obligations,
changed, extended, renewed, modified, amended, supplemented or altered in any
manner; (ii) exercise or refrain from exercising any rights against any of the
Affiliated Parties or others (including Guarantor) or otherwise act or refrain
from acting; (iii) add or release any other guarantor from its obligations
without affecting or impairing the obligations of Guarantor hereunder; (iv)
settle or compromise any Obligations and/or any obligations and liabilities
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and may subordinate the payment of all or any part thereof to
the payment of any obligations and liabilities which may be due to Project Owner
or others; (v) sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner or in any order any property by whomsoever pledged or
mortgaged to secure or howsoever securing the Obligations or any liabilities or
obligations (including any of those hereunder) incurred directly or indirectly
in respect thereof or hereof and/or any offset thereagainst; (vi) apply any sums
by whomsoever paid or howsoever realized to any obligations and liabilities of
any of the Affiliated Parties to Project Owner under the Relevant Documents in
the manner provided therein regardless of what obligations and liabilities
remain unpaid; (vii) consent to or waive any breach of, or any act, omission or
default under, the Relevant Documents or otherwise amend, modify or supplement
(with the consent of the relevant Affiliated Parties, if required by the
Relevant Documents) the Relevant Documents or any of such other instruments or
agreements; and/or (viii) act or fail to act in any manner referred to in this
Guaranty which may deprive Guarantor of its right to subrogation against any of
the Affiliated Parties to recover full indemnity for any payments made pursuant
to this Guaranty or of its right of contribution against any other party.
(d) No invalidity, irregularity or unenforceability
of the obligations or liabilities hereby guaranteed shall affect, impair, or be
a defense to this Guaranty, which is a primary obligation of Guarantor.
(e) This is a continuing Guaranty and all obligations
to which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. In the event that,
notwithstanding the provisions of Section 1(a) hereof, this Guaranty shall be
deemed revocable in accordance with applicable law, then any such revocation
shall become effective only upon receipt by Project Owner of written notice of
revocation signed by Guarantor. No revocation or termination hereof shall affect
in any manner rights arising under this Guaranty with respect to Obligations (i)
arising prior to receipt by Project Owner of written notice of such revocation
or termination and the sole effect of revocation and termination hereof shall be
to exclude from this Guaranty Obligations thereafter arising which are
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unconnected with Obligations theretofore arising or transactions theretofore
entered into or (ii) arising as a result of a default under the Relevant
Documents occurring by reason of the revocation or termination of this Guaranty.
(f) (i) Except as otherwise required by law, each
payment required to be made by Guarantor to Project Owner hereunder shall be
made without deduction or withholding for or on account of Taxes. If such
deduction or withholding is so required, Guarantor shall, upon notice thereof
from Project Owner, (A) pay the amount required to be deducted or withheld to
the appropriate authorities before penalties attach thereto or interest accrues
thereon, (B) on or before the 60th day after payment of such amount, forward to
Project Owner an official receipt evidencing such payment (or a certified copy
thereof), and (C) in the case of any such deduction or withholding, forthwith
pay to Project Owner such additional amount as may be necessary to ensure that
the net amount actually received by Project Owner is free and clear of such
Taxes, including any Taxes on such additional amount, is equal to the amount
that Project Owner would have received had there been no such deduction or
withholding.
(ii) As used herein, the term "Tax" means
any present or future tax, levy, impost, duty, charge, assessment or fee of any
nature (including interest, penalties and additions thereto) that is imposed by
any government or other taxing authority in respect of any payment under this
Guaranty other than any income, franchise or similar tax imposed upon the gross
or net income of Project Owner by the United States or any State or any
jurisdiction where Project Owner is organized and/or the jurisdiction in which
is located.
2. Representations and Warranties. Guarantor makes the
representations and warranties set forth below to Project Owner as of the date
hereof:
(a) Guarantor is duly formed, validly existing and in
good standing under the laws of the State of Delaware and has the power and
authority to execute and deliver this Guaranty and to perform its obligations
hereunder.
(b) Guarantor has taken all necessary corporate
action to authorize the execution and delivery of this Guaranty and the
performance of its obligations hereunder.
(c) All governmental authorizations and actions
necessary in connection with the execution and delivery by Guarantor of this
Guaranty and the performance of its obligations hereunder have been obtained or
performed and remain valid and in full force and effect.
(d) This Guaranty has been duly executed and
delivered by Guarantor and constitutes the legal, valid and binding obligation
of Guarantor, enforceable against Guarantor in accordance with the terms of this
Guaranty, subject to applicable bankruptcy, insolvency and other similar laws
affecting creditors' rights generally.
(e) The execution, delivery and performance of this
Guaranty (i) do not and will not contravene any provisions of Guarantor's
certificate of incorporation or bylaws,
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or any law, rule, regulation, order, judgment or decree applicable to or binding
on Guarantor or any of its Affiliates or properties; (ii) do not and will not
contravene, or result in any breach of or constitute any default under, any
agreement or instrument to which Guarantor is a party or by which Guarantor or
any of its properties may be bound or affected; and (iii) do not and will not
require the consent of any Person under any existing law or agreement which has
not already been obtained.
(f) There is no pending or, to the best of
Guarantor's knowledge, threatened action or proceeding affecting Guarantor
before any court, governmental agency or arbitrator, which might reasonably be
expected to materially and adversely affect the financial condition, results of
operations, business or prospects of Guarantor or the ability of Guarantor to
perform its obligations under this Guaranty.
(g) Guarantor possesses all franchises, certificates,
licenses, permits and other governmental authorizations and approvals necessary
for it to own its properties, conduct its businesses and perform its obligations
under this Guaranty.
(h) Guarantor is not an investment company or a
company controlled by an investment company, within the meaning of the
Investment Company Act of 1940, and is not subject to, or is exempt from,
regulation under the Public Utility Holding Company Act of 1935 and the Federal
Power Act.
(i) Guarantor has established adequate means of
obtaining financial and other information pertaining to the businesses,
operations and condition (financial and otherwise) of each of the Affiliated
Parties and their respective properties on a continuing basis, and Guarantor now
is and hereafter will be completely familiar with the businesses, operations and
condition (financial and otherwise) of each of the Affiliated Parties and their
respective properties.
(j) (i) Guarantor is not, and will not as a result of
the execution and delivery of this Guaranty, be rendered insolvent, (ii)
Guarantor does not intend to incur, or believe it is incurring, obligations
beyond its ability to pay and (iii) Guarantor's property remaining after the
delivery and performance of this Guaranty will not constitute unreasonably small
capital.
3. Covenants. So long as any Obligations are outstanding,
Guarantor agrees that:
(a) It will maintain in full force and effect all
consents of any governmental or other authority that are required to be obtained
by it with respect to this Guaranty and will obtain any that may become
necessary in the future;
(b) It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Guaranty;
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(c) Promptly, and in any event within 30 Banking Days
after the General Counsel of Guarantor obtains knowledge thereof, Guarantor will
give to Project Owner notice of the occurrence of any event or of any litigation
or governmental proceeding pending (i) against Guarantor or any of its
Affiliates which could affect the business, operations, property, assets or
condition (financial or otherwise) of Guarantor so as to materially and
adversely affect the ability of Guarantor to perform its obligations hereunder
or (ii) with respect to this Guaranty, which event or pending proceeding is
likely to materially and adversely affect the business, operations, property,
assets or condition (financial or otherwise) of Guarantor and its Affiliates
taken as a whole;
(d) It will deliver such other documents and other
information reasonably requested by Project Owner; and
(e) It will comply in all material respects with its
certificate of incorporation.
4. Waiver. Guarantor hereby waives and relinquishes all rights
and remedies accorded by applicable law to sureties or guarantors and agrees not
to assert or take advantage of any such rights or remedies, including without
limitation (a) any right to require Project Owner to proceed against any of the
Affiliated Parties or any other person or to proceed against or exhaust any
security held by Project Owner at any time or to pursue any other remedy in
Project Owner's power before proceeding against Guarantor, (b) any defense that
may arise by reason of the incapacity, lack of power or authority, death,
dissolution, merger, termination or disability of any of the Affiliated Parties
or any other Person or the failure of Project Owner to file or enforce a claim
against the estate (in administration, bankruptcy or any other proceeding) of
any of the Affiliated Parties or any other Person, (c) demand, presentment,
protest and notice of any kind, including without limitation notice of the
existence, creation or incurring of any new or additional indebtedness or
obligation or of any action or non-action on the part of any of the Affiliated
Parties, Project Owner, any endorser or creditor of any of the Affiliated
Parties or Guarantor or on the part of any other person under this or any other
instrument in connection with any obligation or evidence of indebtedness held by
Project Owner as collateral or in connection with any Obligations, (d) any
defense based upon an election of remedies by Project Owner, including without
limitation an election to proceed by non-judicial rather than judicial
foreclosure, which destroys or otherwise impairs the subrogation rights of
Guarantor, the right of Guarantor to proceed against any of the Affiliated
Parties for reimbursement, or both, (e) any defense based on any offset against
any amounts which may be owed by any Person to Guarantor for any reason
whatsoever, (f) any defense based on any act, failure to act, delay or omission
whatsoever on the part of any of the Affiliated Parties or the failure by any of
the Affiliated Parties to do any act or thing or to observe or perform any
covenant, condition or agreement to be observed or performed by it under the
Relevant Documents, (g) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal provided, that, upon
payment in full of the Obligations, this Guaranty shall no longer be of any
force or effect, (h) any defense, setoff or counterclaim which may at any time
be available to or asserted by any of the Affiliated Parties against Project
Owner or any other Person under the Relevant Documents, (i) any duty on the part
of Project Owner to disclose to Guarantor any facts Project Owner may now
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or hereafter know about any of the Affiliated Parties, regardless of whether
Project Owner have reason to believe that any such facts materially increase the
risk beyond that which Guarantor intends to assume, or have reason to believe
that such facts are unknown to Guarantor, or have a reasonable opportunity to
communicate such facts to Guarantor, since Guarantor acknowledges that Guarantor
is fully responsible for being and keeping informed of the financial condition
of any of the Affiliated Parties and of all circumstances bearing on the risk of
non-payment of any obligations and liabilities hereby guaranteed, (j) the fact
that Guarantor may at any time in the future dispose of all or part of its
direct or indirect interest in any of the Affiliated Parties, (k) any defense
based on any change in the time, manner or place of any payment under, or in any
other term of, the Relevant Documents or any other amendment, renewal,
extension, acceleration, compromise or waiver of or any consent or departure
from the terms of the Relevant Documents, (l) any defense arising because of
Project Owner's election, in any proceeding instituted under the Federal
Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal
Bankruptcy Code, and (m) any defense based upon any borrowing or grant of a
security interest under Section 364 of the Federal Bankruptcy Code.
5. Subordination. Except as otherwise specifically provided in
this Guaranty, all existing and future indebtedness of any of the Affiliated
Parties to Guarantor (except to the extent such indebtedness is incurred in the
ordinary course of business and relates to costs of materials or services
provided pursuant to or consistent with the Relevant Documents) and the right of
Guarantor to withdraw any capital invested by Guarantor in any of the Affiliated
Parties, is hereby subordinated to all obligations and liabilities hereby
guaranteed. Without the prior written consent of Project Owner or Administrative
Agent, such subordinated indebtedness shall not be paid or withdrawn in whole or
in part, nor shall Guarantor accept any payment of or on account of any such
indebtedness or as a withdrawal of capital while this Guaranty is in effect. Any
payment by any of the Affiliated Parties in violation of this Guaranty shall be
received by Guarantor in trust for Project Owner, and Guarantor shall cause the
same to be paid to Project Owner immediately upon demand by Project Owner on
account of the relevant Affiliated Parties' obligations and liabilities hereby
guaranteed. Guarantor shall not assign all or any portion of such indebtedness
while this Guaranty remains in effect except upon prior written notice to
Project Owner by which the assignee of any such indebtedness agrees that the
assignment is made subject to the terms of this Guaranty, and that any attempted
assignment of such indebtedness in violation of the provisions hereof shall be
void.
6. Subrogation. Until the Obligations have been paid in full,
(a) Guarantor shall not have any right of subrogation and waives all rights to
enforce any remedy which Project Owner now have or may hereafter have against
any of the Affiliated Parties, and waives the benefit of, and all rights to
participate in, any security now or hereafter held by Project Owner from any of
the Affiliated Parties and (b) Guarantor waives any claim, right or remedy which
Guarantor now has or hereafter acquire against any of the Affiliated Parties
that arises hereunder and/or from the performance by the Guarantor hereunder
including, without limitation, any claim, remedy or right of subrogation,
reimbursement, exoneration, contribution, indemnification, or participation in
any claim, right or remedy of Project Owner against any of the Affiliated
Parties, or any security which Project Owner now has or may hereafter acquire,
whether or not such claim, right or remedy arises in equity, under contract, by
statute, under common law or otherwise.
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7. Bankruptcy.
(a) So long as any of the Obligations are owed to
Project Owner, Guarantor shall not, without the prior written consent of Project
Owner, commence, or join with any other Person in commencing, any bankruptcy,
reorganization, or insolvency proceeding against any of the Affiliated Parties.
The obligations of Guarantor under this Guaranty shall not be altered, limited
or affected by any proceeding, voluntary or involuntary, involving the
bankruptcy, reorganization, insolvency, receivership, liquidation or arrangement
of any of the Affiliated Parties, or by any defense which any of the Affiliated
Parties may have by reason of any order, decree or decision of any court or
administrative body resulting from any such proceeding.
(b) So long as any Obligations are owed to Project
Owner, to the extent of such Obligations, Guarantor shall file, in any
bankruptcy or other proceeding in which the filing of claims is required or
permitted by law, all claims which Guarantor may have against any of the
Affiliated Parties relating to any indebtedness of any of the Affiliated Parties
to Guarantor, and hereby assigns to Project Owner all rights of Guarantor
thereunder. If Guarantor does not file any such claim, Project Owner, is hereby
authorized to do so in the name of Guarantor or, in Project Owner's discretion,
to assign the claim to a nominee and to cause proofs of claim to be filed in the
name of Project Owner's nominee. The foregoing power of attorney is coupled with
an interest and cannot be revoked. Project Owner or its nominee shall have the
sole right to accept or reject any plan proposed in any such proceeding and to
take any other action which a party filing a claim is entitled to take. In all
such cases, whether in administration, bankruptcy or otherwise, the person
authorized to pay such a claim shall pay the same to Project Owner to the extent
of any Obligations which then remain unpaid, and, to the full extent necessary
for that purpose, Guarantor hereby assigns to Project Owner all of Guarantor's
rights to all such payments or distributions to which Guarantor would otherwise
be entitled; provided, however, that Guarantor's obligations hereunder shall not
be satisfied except to the extent that Project Owner receives cash by reason of
any such payment or distribution. If Project Owner receives anything hereunder
other than cash, the same shall be held as collateral for amounts due under this
Guaranty.
8. Successions or Assignments.
(a) This Guaranty shall inure to the benefit of the
successors or assigns of Project Owner who shall have, to the extent of its
interest, the rights of Project Owner hereunder.
(b) This Guaranty is binding upon Guarantor and its
successors and assigns. Guarantor is not entitled to assign its obligations
hereunder to any other person without the written consent of Project Owner and
Administrative Agent, and any purported assignment in violation of this
provision shall be void.
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9. Waivers.
(a) No delay on the part of Project Owner in
exercising any of its rights (including those hereunder) and no partial or
single exercise thereof and no action or non-action by Project Owner, with or
without notice to Guarantor or anyone else, shall constitute a waiver of any
rights or shall affect or impair this Guaranty.
(b) GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY OR
RELATING TO THE SUBJECT MATTER OF THIS GUARANTY AND THE RELATIONSHIP BETWEEN
GUARANTOR AND Project Owner THAT IS BEING ESTABLISHED. GUARANTOR ACKNOWLEDGES
THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT Project Owner HAS RELIED ON THE WAIVER IN ENTERING INTO THIS GUARANTY, AND
THAT Project Owner WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE
DEALINGS. GUARANTOR FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
10. Interpretation. The section headings in this Guaranty are
for the convenience of reference only and shall not affect the meaning or
construction of any provision hereof.
11. Notices. All notices in connection with this Guaranty
shall be given by telex or cable or by notice in writing hand-delivered or sent
by facsimile transmission or by certified mail return-receipt requested
(airmail, if overseas), postage prepaid. All such notices shall be sent to the
appropriate telex or telecopier number or address, as the case may be, set forth
in Section 15 below or to such other number or address as shall have been
subsequently specified by written notice to the other party, and shall be sent
with copies, if any, as indicated below. All such notices shall be effective
upon receipt, and confirmation by answerback of any such notice so sent by telex
shall be sufficient evidence of receipt thereof.
12. Amendments. This Guaranty may be amended only with the
written consent of the parties hereto.
13. Jurisdiction; Governing Law.
(a) Any action or proceeding relating in any way to
this Guaranty may be brought and enforced in the courts of the State of New York
or of the United States for the Southern District of New York. Any such process
or summons in connection with any such action or proceeding may be served by
mailing a copy thereof by certified or registered mail, or any substantially
similar form of mail, addressed to Guarantor as provided for notices hereunder.
(b) This Guaranty and the rights and obligations of
Project Owner and of the Guarantor shall be governed by and construed in
accordance with the law of the State of
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New York without reference to principles of conflicts of laws (other than
Section 5-1401 of the New York General Obligations Law).
14. Integration of Terms. This Guaranty contains the entire
agreement between the Guarantor and Project Owner relating to the subject matter
hereof and supersedes all oral statements and prior writing with respect hereto.
15. Addresses.
(a) The address of Guarantor for notices is:
Calpine Corporation
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Asset Optimization
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) The address of Project Owner for notices is:
[NAME OF PROJECT OWNER]
c/o [REGIONAL OFFICE]
Attention: Asset Optimization and
Regional Counsel
Telephone Number:
Telecopy Number:
and
[NAME OF PROJECT OWNER]
c/o Calpine Corporation
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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(c) The address of Administrative Agent for notices
is:
Credit Suisse First Boston,
New York Branch
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Portfolio Management
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
16. Interest; Collection Expenses. Any amount required to be
paid by Guarantor pursuant to the terms hereof shall bear interest at the
Default Rate or the maximum rate permitted by law, whichever is less, from the
date due until paid in full. If Project Owner is required to pursue any remedy
against Guarantor hereunder, Guarantor shall pay to Project Owner, as the case
may be, upon demand, all reasonable attorneys' fees and expenses all other costs
and expenses incurred by Project Owner in enforcing this Guaranty.
17. Reinstatement of Guaranty. This Guaranty shall continue to
be effective or be reinstated, as the case may be, if at any time any payment to
or on behalf of any of the Affiliated Parties or to Project Owner by any of the
Affiliated Parties under the Relevant Documents or by Guarantor hereunder is
rescinded or must otherwise be returned by Project Owner upon the insolvency,
bankruptcy, reorganization, dissolution or liquidation of any of the Affiliated
Parties or otherwise, all as though such payment had not been made.
18. Counterparts. The Guaranty may be executed in one or more
duplicate counterparts, and when executed and delivered by all of the parties
listed below shall constitute a single binding agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to
be duly executed and delivered in San Jose, California as of the day and year
first written above.
CALPINE CORPORATION,
a Delaware corporation
By:
------------------------------------------------
Name:
Title:
Agreed and accepted.
[NAME OF PROJECT OWNER]
a Delaware [TYPE OF ENTITY]
By:
------------------------------------------
Name:
Title:
287
EXHIBIT D2-B
to the Credit Agreement
PROJECT COMPLETION GUARANTY
THIS PROJECT COMPLETION GUARANTY (this "Guaranty") dated as of
October 16, 2000 is made by CALPINE CORPORATION, a Delaware corporation
("Guarantor"), in favor of CREDIT SUISSE FIRST BOSTON, acting through its New
York Branch, as Administrative Agent ("Administrative Agent") for the Banks
under that certain Credit Agreement (the "Credit Agreement") dated as of October
16, 2000 among Calpine Construction Finance Company II, LLC, a Delaware limited
liability company, as Borrower ("Borrower"), the financial institutions listed
on Exhibit H thereto (the "Banks"), Credit Suisse First Boston, acting through
its New York Branch, as Lead Arranger and Administrative Agent, The Bank of Nova
Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of America
Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as
Arranger and Co-Syndication Agent, Bayerische Landesbank Girozentrale, as
Arranger, Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as
Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America
Services LLC, as Arranger and Co-Documentation Agent and TD Securities (USA)
Inc., as Arranger and Co-Documentation Agent.
RECITALS
A. Guarantor owns all the outstanding stock of CCFC II
Holdings, Inc., a Delaware corporation, the sole member of Borrower.
B. Administrative Agent and the Banks have agreed to enter
into the Credit Agreement with Borrower on the condition that Guarantor
guarantee certain of Borrower's obligations thereunder as provided herein.
C. Guarantor acknowledges that it will benefit, directly and
indirectly, if Administrative Agent and the Banks enter into the Credit
Agreement.
D. The obligations of Guarantor hereunder are being incurred
concurrently with the obligations of Borrower under the Credit Agreement.
E. Capitalized terms used but not defined herein shall have
the respective meanings given them in Exhibit A to the Credit Agreement and the
Rules of Interpretations contained in said Exhibit A shall apply hereto.
AGREEMENT
NOW, THEREFORE, in consideration of the premises set forth
above and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged and as an inducement to Administrative Agent and
the Banks to enter into the Credit Agreement with Borrower, Guarantor hereby
consents and agrees as follows:
288
1. Guaranty.
(a) The undersigned Guarantor, as primary obligor and
not merely as surety, unconditionally and irrevocably guarantees to the Banks
(i) the performance, when due, of the obligations of Borrower under Section 5.14
of the Credit Agreement to achieve Completion of each of the Initial Projects
and the Funded Subsequent Projects (including with respect to any partially
owned Projects), (ii) the payment, when due, of the obligations of Borrower
under Section 5.17.1, 5.17.2 and 5.17.3(x) of the Credit Agreement and (iii) if
Borrower is unable to obtain a disbursement of Loan proceeds under the Credit
Agreement for any Project for which the requirements of Section 5.14 of the
Credit Agreement have not been waived in accordance with the terms of the Credit
Agreement for a period of 60 consecutive days after a request for the same
pursuant to a Drawdown Certificate delivered pursuant to Section 3.4 of the
Credit Agreement, the prompt payment, when due, of the Project Costs for which
funds were requested in such Drawdown Certificate, in each case together with
the payment of all expenses incurred by Administrative Agent or the Banks in
enforcing any of such obligations and liabilities or the terms hereof,
including, without limitation, reasonable fees and expenses of legal counsel
(collectively, the "Obligations"), and agrees that if for any reason Borrower
shall fail to pay or perform, as the case may be, when due any of such
Obligations, Guarantor will pay or perform, as the case may be, the same
forthwith; provided, however, if the default giving rise to the potential
exercise of remedies is susceptible of cure and the failure to so exercise
remedies could not reasonably be expected to have a Material Adverse Effect on
Borrower, Administrative Agent and the Banks shall not exercise any remedies in
the nature of foreclosure on or sale of any Collateral, appointment of a
receiver, entry into possession of any Project or other remedies under the
Credit Documents intended to or having the effect of depriving Borrower or any
other Portfolio Entity of the use, possession or enjoyment of any of the
Projects as a result of an Event of Default thereunder for 90 days so long as
Guarantor is diligently pursuing performance of the Obligations and/or
diligently attempting to refinance all outstanding Loans under the Credit
Agreement; provided, further, that if the Obligations under clause (ii) above
have been performed, Guarantor's liability with respect to the Obligations under
clause (i) above shall be limited to the excess of the cost of achieving
Completion of the applicable Projects over the amounts deposited or contributed
pursuant to Section 5.17.3 of the Credit Agreement. Guarantor waives notice of
acceptance of this Guaranty and of any obligation to which it applies or may
apply under the terms hereof, and waives diligence, presentment, demand of
payment or performance, notice of dishonor or non-payment or non-performance,
protest, notice of protest, of any such obligations, suit or taking other action
by the Banks against, and giving any notice of default or other notice to, or
making any demand on, any party liable thereon (including Guarantor).
(b) This Guaranty is a primary obligation of
Guarantor and is an absolute, unconditional, continuing and irrevocable guaranty
of payment and performance, as the case may be, of the Obligations and not of
collectibility, and is in no way conditioned on or contingent upon any attempt
to enforce in whole or in part Borrower's or any other Portfolio Entity's
liabilities and obligations to the Banks. If Borrower shall fail to pay or
perform, as the case may be, any of the Obligations to the Banks as and when
they are due, Guarantor shall forthwith pay or perform, as the case may be, such
Obligations immediately (in the case of payment obligations, in immediately
available funds). Each failure by Borrower to pay or perform, as the case may
be, any Obligations shall give rise to a separate cause of action herewith, and
separate suits may be brought hereunder as each cause of action arises.
(c) The Banks may, at any time and from time to time
(whether or not after revocation or termination of this Guaranty) without the
consent of or notice to Guarantor, except such notice as may be required by the
Credit Documents or applicable law which cannot be waived, without incurring
responsibility to Guarantor, without impairing or releasing the obligations of
Guarantor hereunder, upon or without any terms or conditions and in whole or in
part, (i) change the manner, place and terms of payment or performance or change
or extend the time of payment or performance of, or renew or alter, any
Obligation, or any obligations and liabilities (including any of those
hereunder)
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incurred directly or indirectly in respect thereof or hereof or in any manner
modify, amend or supplement the terms of the Credit Documents (including
provisions with respect to the Completion of the Projects), any documents,
instruments or agreements executed in connection therewith, in each case with
the consent of Borrower or such other relevant Portfolio Entity, if required by
the Credit Documents, and the guaranty herein made shall apply to the
Obligations changed, extended, renewed, modified, amended, supplemented or
altered in any manner; (ii) exercise or refrain from exercising any rights
against Borrower, any other Portfolio Entity or others (including Guarantor) or
otherwise act or refrain from acting; (iii) add or release any other guarantor
from its obligations without affecting or impairing the obligations of Guarantor
hereunder; (iv) settle or compromise any Obligations and/or any obligations and
liabilities (including any of those hereunder) incurred directly or indirectly
in respect thereof or hereof, and may subordinate the payment or performance of
all or any part thereof to the payment or performance of any obligations and
liabilities which may be due to the Banks or others; (v) sell, exchange,
release, surrender, realize upon or otherwise deal with in any manner or in any
order any property by whomsoever pledged or mortgaged to secure or howsoever
securing the Obligations or any liabilities or obligations (including any of
those hereunder) incurred directly or indirectly in respect thereof or hereof
and/or any offset thereagainst; (vi) apply any sums by whomsoever paid or
howsoever realized to any obligations and liabilities of Borrower or any other
Portfolio Entity to the Banks under the Credit Documents in the manner provided
therein regardless of what obligations and liabilities remain unpaid; (vii)
consent to or waive any breach of, or any act, omission or default under, the
Credit Documents (including provisions with respect to the Completion of the
Projects) or otherwise amend, modify or supplement (with the consent of Borrower
or such other relevant Portfolio Entity, if required by the Credit Documents)
the Credit Documents (including provisions with respect to the Completion of the
Projects) or any of such other instruments or agreements; and/or (viii) act or
fail to act in any manner referred to in this Guaranty which may deprive
Guarantor of its right to subrogation against Borrower to recover full indemnity
for any payments or performances made pursuant to this Guaranty or of its right
of contribution against any other party.
(d) No invalidity, irregularity or unenforceability
of the obligations or liabilities hereby guaranteed shall affect, impair or be a
defense to this Guaranty, which is a primary obligation of Guarantor.
(e) This is a continuing Guaranty and all obligations
to which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. In the event that,
notwithstanding the provisions of Section 1(a) hereof, this Guaranty shall be
deemed revocable in accordance with applicable law, then any such revocation
shall become effective only upon receipt by Administrative Agent of written
notice of revocation signed by Guarantor. No revocation or termination hereof
shall affect in any manner rights arising under this Guaranty with respect to
Obligations arising prior to receipt by Administrative Agent of written notice
of such revocation or termination.
(f) (i) Except as otherwise required by law, each
payment required to be made by Guarantor to the Banks hereunder shall be made
without deduction or withholding for or on account of Taxes. If such deduction
or withholding is so required, Guarantor shall, upon notice thereof from
Administrative Agent, (A) pay the amount required to be deducted or withheld to
the appropriate authorities before penalties attach thereto or interest accrues
thereon, (B) on or before the 60th day after payment of such amount, forward to
the Banks an official receipt evidencing such payment (or a certified copy
thereof), and (C) in the case of any such deduction or withholding, forthwith
pay to Administrative Agent for the account of the Banks such additional amount
as may be necessary to ensure that the net amount actually received by the Banks
is free and clear of such Taxes, including any Taxes on such additional amount,
is equal to the amount that the Banks would have received had there been no such
deduction or withholding.
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(ii) As used herein, the term "Tax" means any
present or future tax, levy, impost, duty, charge, assessment or fee of any
nature (including interest, penalties and additions thereto) that is imposed by
any government or other taxing authority in respect of any payment under this
Guaranty other than (A) any income, franchise or similar tax imposed upon the
gross or net income of Administrative Agent or any Bank by the United States,
New York State, any jurisdiction where Administrative Agent or any Bank is
organized and/or the jurisdiction in which is located any office from or at
which Administrative Agent or any Bank is making or maintaining any Loans or
receiving any payments under any of the Credit Documents and (B) any stamp,
registration, documentation or similar tax.
(g) In fulfilling its obligations hereunder with
respect to the Obligations set forth in Section 1(a)(i) hereof, but subject to
the provisions of Section 5.14 of the Credit Agreement, Guarantor hereby
irrevocably and unconditionally guarantees, promises and agrees to perform and
comply with Section 5.14 of the Credit Agreement. The words "perform and comply
with" are used in their most comprehensive sense and include without limitation
(i) the payment of all costs and expenses with respect to the construction of
the Initial Projects and the Funded Subsequent Projects and the construction of
such Projects within the time and in the manner set forth in Section 5.14 of the
Credit Agreement, (ii) the payment, satisfaction or discharge of all Liens
(other than Permitted Liens other than the Liens described in clause (c) of the
definition of "Permitted Liens") arising out of or relating to the construction
and Completion of, and that are or may be imposed upon or asserted against, the
Initial Projects and the Funded Subsequent Projects and (iii) the defense and
indemnification of the Banks against all such Liens, whether arising from the
furnishing of labor, materials, supplies or equipment, from taxes, assessments,
fees or other charges, from injuries or damage to persons or property, or
otherwise. Without limiting the generality of the foregoing, Guarantor agrees
(A) to cause any and all costs of achieving Completion of each of the Initial
Projects and the Funded Subsequent Projects, including without limitation the
costs of all labor, materials, supplies and equipment related thereto and any
and all costs and cost overruns prior to such Completion, to be funded, paid and
satisfied from Guarantor's own resources as the same shall become due and (B) to
cause the Completion of each of the Initial Projects and the Funded Subsequent
Projects, using Guarantor's own resources, in a timely, good and workmanlike
manner, in accordance with the terms of the Credit Documents; provided, however,
that Guarantor shall not be required to pay any performance and/or other
liquidated damages due and owing from a Contractor (other than a Contractor that
is an Affiliate of Guarantor) under a Construction Contract; provided, further,
Guarantor's liability with respect to such liquidated damages shall be limited
to the amount specified in clause (vi)(B) of the definition of "Completion" less
the amount of any such liquidated damages determined to be due and owing from
any applicable Contractors.
2. Representations and Warranties. Guarantor makes the
representations and warranties set forth below to Administrative Agent and the
Banks as of the date hereof:
(a) Guarantor is duly formed, validly existing and in
good standing under the laws of the State of Delaware and has the power and
authority to execute and deliver this Guaranty and to perform its obligations
hereunder.
(b) Guarantor has taken all necessary corporate
action to authorize the execution and delivery of this Guaranty and the
performance of its obligations hereunder.
(c) All governmental authorizations and actions
necessary in connection with the execution and delivery by Guarantor of this
Guaranty and the performance of its obligations hereunder have been obtained or
performed and remain valid and in full force and effect.
(d) This Guaranty has been duly executed and
delivered by Guarantor and constitutes the legal, valid and binding obligation
of Guarantor, enforceable against Guarantor in
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accordance with the terms of this Guaranty, subject to applicable bankruptcy,
insolvency and other similar laws affecting creditors' rights generally.
(e) The execution, delivery and performance of this
Guaranty (i) do not and will not contravene any provisions of Guarantor's
certificate of incorporation or bylaws, or any law, rule, regulation, order,
judgment or decree applicable to or binding on Guarantor or any of its
Affiliates or properties; (ii) do not and will not contravene, or result in any
breach of or constitute any default under, any agreement or instrument to which
Guarantor is a party or by which Guarantor or any of its properties may be bound
or affected; and (iii) do not and will not require the consent of any Person
under any existing law or agreement which has not already been obtained.
(f) There is no pending or, to the best of
Guarantor's knowledge, threatened action or proceeding affecting Guarantor
before any court, governmental agency or arbitrator, which might reasonably be
expected to materially and adversely affect the financial condition, results of
operations, business or prospects of Guarantor or the ability of Guarantor to
perform its obligations under this Guaranty.
(g) All quarterly and annual financial statements
heretofore delivered by Guarantor to Administrative Agent are true, correct and
complete, do not fail to disclose any material liabilities, whether direct or
contingent, fairly present the financial condition of Guarantor as of the date
delivered and are prepared in accordance with generally accepted accounting
principles consistently applied.
(h) Guarantor possesses all franchises, certificates,
licenses, permits and other governmental authorizations and approvals necessary
for it to own its properties, conduct its businesses and perform its obligations
under this Guaranty.
(i) Guarantor is not an investment company or a
company controlled by an investment company, within the meaning of the
Investment Company Act of 1940, and is not subject to, or is exempt from,
regulation under the Public Utility Holding Company Act of 1935 and the Federal
Power Act.
(j) Guarantor has established adequate means of
obtaining financial and other information pertaining to the businesses,
operations and condition (financial and otherwise) of Borrower and the other
Portfolio Entities and their respective properties on a continuing basis, and
Guarantor now is and hereafter will be completely familiar with the businesses,
operations and condition (financial and otherwise) of Borrower and the other
Portfolio Entities and their respective properties.
(k) (i) Guarantor is not, and will not as a result of
the execution and delivery of this Guaranty, be rendered insolvent, (ii)
Guarantor does not intend to incur, or believe it is incurring, obligations
beyond its ability to pay or perform and (iii) Guarantor's property remaining
after the delivery and performance of this Guaranty will not constitute
unreasonably small capital.
(l) Guarantor is not in default under any material
agreement relating to the incurrence of debt to which it is a party.
3. Covenants. So long as any Obligations are outstanding,
Guarantor agrees that:
(a) It will maintain in full force and effect all
consents of any governmental or other authority that are required to be obtained
by it with respect to this Guaranty and will obtain any that may become
necessary in the future;
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(b) It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Guaranty;
(c) Promptly, and in any event within 30 Banking Days
after the General Counsel of Guarantor obtains knowledge thereof, Guarantor will
give to Administrative Agent notice of the occurrence of any event or of any
litigation or governmental proceeding pending (i) against Guarantor or any of
its Affiliates which could affect the business, operations, property, assets or
condition (financial or otherwise) of Guarantor so as to materially and
adversely affect the ability of Guarantor to perform its obligations hereunder
or (ii) with respect to this Guaranty, which event or pending proceeding is
likely to materially and adversely affect the business, operations, property,
assets or condition (financial or otherwise) of Guarantor and its Affiliates
taken as a whole;
(d) It will deliver such other documents and other
information reasonably requested by Administrative Agent;
(e) It will comply in all material respects with its
certificate of incorporation;
(f) Guarantor will not permit its:
(i) Tangible Net Worth to be less than (A)
$1,474,280,000 plus (B) 50% of the consolidated net income of Guarantor and its
Subsidiaries (without giving effect to any losses) for each Fiscal Quarter
ending on or after September 30, 2000, plus (C) 100% of the Net Equity Proceeds
from any equity offering by Guarantor after June 30, 2000;
(ii) Leverage Ratio to be greater than .85
to 1.00 as of the end of any Fiscal Quarter;
(iii) Interest Coverage Ratio as of the end
of any Fiscal Quarter to be less than 1.75 to 1.00 for the 12 month period
comprising the four previous Fiscal Quarters; or
(iv) Interest Coverage Ratio (Parent Only)
as of the end of any Fiscal Quarter to be less than 1.60 to 1.00 for the 12
month period comprising the four previous Fiscal Quarters.
Guarantor shall furnish, or shall cause to be furnished, to Administrative Agent
as soon as possible and in any event within 60 days after the end of each of the
first three Fiscal Quarters of each Fiscal Year and within 120 days after the
end of each Fiscal Year, a certificate, executed by a Responsible Officer of
Guarantor, showing (in reasonable detail and with appropriate calculations and
computations in all respects reasonably satisfactory to Administrative Agent)
compliance with the covenants set forth in this Section 3(f).
Capitalized terms used in this Section 3(f) and defined in Appendix A attached
hereto shall have the meanings given therein.
4. Waiver. Guarantor hereby waives and relinquishes all rights
and remedies accorded by applicable law to sureties or guarantors and agrees not
to assert or take advantage of any such rights or remedies, including without
limitation (a) any right to require Administrative Agent or the Banks to proceed
against Borrower or any other Person or to proceed against or exhaust any
security held by Administrative Agent or the Banks at any time or to pursue any
other remedy in Administrative Agent's or the Banks' power before proceeding
against Guarantor, (b) any defense that may arise by reason of the incapacity,
lack of power or authority, death, dissolution, merger, termination or
disability
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of Borrower or any other Person or the failure of Administrative Agent or the
Banks to file or enforce a claim against the estate (in administration,
bankruptcy or any other proceeding) of Borrower or any other Person, (c) demand,
presentment, protest and notice of any kind except as provided herein, including
without limitation notice of the existence, creation or incurring of any new or
additional indebtedness or obligation or of any action or non-action on the part
of Borrower, Administrative Agent, the Banks, any endorser or creditor of
Borrower or Guarantor or on the part of any other Person under this or any other
instrument in connection with any obligation or evidence of indebtedness held by
Administrative Agent or the Banks as collateral or in connection with any
Obligations, (d) any defense based upon an election of remedies by
Administrative Agent or the Banks, including without limitation an election to
proceed by non-judicial rather than judicial foreclosure, which destroys or
otherwise impairs the subrogation rights of Guarantor, the right of Guarantor to
proceed against Borrower for reimbursement, or both, (e) any defense based on
any offset against any amounts which may be owed by any Person to Guarantor for
any reason whatsoever, (f) any defense based on any act, failure to act, delay
or omission whatsoever on the part of Borrower or any other Portfolio Entity of
the failure by Borrower or any other Portfolio Entity to do any act or thing or
to observe or perform any covenant, condition or agreement to be observed or
performed by it under the Credit Documents, (g) any defense based upon any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal provided, that, upon payment or performance in full of the
Obligations, this Guaranty shall no longer be of any force or effect, (h) any
defense, setoff or counterclaim which may at any time be available to or
asserted by Borrower or any other Portfolio Entity against Administrative Agent,
the Banks or any other Person under the Credit Documents, (i) any duty on the
part of Administrative Agent or the Banks to disclose to Guarantor any facts
Administrative Agent or the Banks may now or hereafter know about Borrower or
any other Portfolio Entity, regardless of whether Administrative Agent or the
Banks have reason to believe that any such facts materially increase the risk
beyond that which Guarantor intends to assume, or have reason to believe that
such facts are unknown to Guarantor, or have a reasonable opportunity to
communicate such facts to Guarantor, since Guarantor acknowledges that Guarantor
is fully responsible for being and keeping informed of the financial condition
of Borrower and the other Portfolio Entities and of all circumstances bearing on
the risk of non-payment or non-performance of any obligations and liabilities
hereby guaranteed, (j) the fact that Guarantor may at any time in the future
dispose of all or part of its direct or indirect interest in Borrower or any
other Portfolio Entity, (k) any defense based on any change in the time, manner
or place of any payment or performance under, or in any other term of, the
Credit Documents (including provisions with respect to the Completion of the
Projects) or any other amendment, renewal, extension, acceleration, compromise
or waiver of or any consent or departure from the terms of the Credit Documents
(including provisions with respect to the Completion of the Projects), (l) any
defense arising because of Administrative Agent's or the Banks' election, in any
proceeding instituted under the Federal Bankruptcy Code, of the application of
Section 1111(b)(2) of the Federal Bankruptcy Code, and (m) any defense based
upon any borrowing or grant of a security interest under Section 364 of the
Federal Bankruptcy Code.
5. Subordination. Except as otherwise specifically provided in
this Guaranty, all existing and future indebtedness of Borrower or any other
Portfolio Entity to Guarantor (except to the extent such indebtedness consists
of approved operating expenses or other O&M Costs with respect to materials or
services provided consistent with an applicable Annual Operating Budget) and the
right of Guarantor to withdraw any capital invested by Guarantor in Borrower or
any other Portfolio Entity, is hereby subordinated to all obligations and
liabilities hereby guaranteed. Without the prior written consent of
Administrative Agent, such subordinated indebtedness shall not be paid or
withdrawn in whole or in part, nor shall Guarantor accept any payment of or on
account of any such indebtedness or as a withdrawal of capital while the Credit
Agreement is in effect except from distributions permitted under Waterfall Level
8 and 10 of Section 7.2 of the Credit Agreement or as permitted under Section
3.10(b) of the Credit Agreement. Any payment by Borrower in violation of this
Guaranty shall be received by Guarantor in trust for Administrative Agent and
the Banks, and Guarantor shall cause the same to be paid
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to Administrative Agent for the benefit of the Banks immediately upon demand by
Administrative Agent on account of Borrower's obligations and liabilities hereby
guaranteed. Guarantor shall not assign all or any portion of such indebtedness
while the Credit Agreement remains in effect except upon prior written notice to
Administrative Agent by which the assignee of any such indebtedness agrees that
the assignment is made subject to the terms of this Guaranty, and that any
attempted assignment of such indebtedness in violation of the provisions hereof
shall be void.
6. Subrogation. So long as the Credit Agreement remains in
effect, (a) Guarantor shall not have any right of subrogation and waives all
rights to enforce any remedy which the Banks now have or may hereafter have
against Borrower or any other Portfolio Entity, and waives the benefit of, and
all rights to participate in, any security now or hereafter held by
Administrative Agent or the Banks from Borrower or any other Portfolio Entity
and (b) Guarantor waives any claim, right or remedy which Guarantor may now have
or hereafter acquire against Borrower or any other Portfolio Entity that arises
hereunder and/or from the performance by Guarantor hereunder including, without
limitation, any claim, remedy or right of subrogation, reimbursement,
exoneration, contribution, indemnification, or participation in any claim, right
or remedy of the Banks against Borrower or any other Portfolio Entity, or any
security which the Banks now have or hereafter acquire, whether or not such
claim, right or remedy arises in equity, under contract, by statute, under
common law or otherwise.
7. Bankruptcy.
(a) So long as the Credit Agreement remains in
effect, Guarantor shall not, without the prior written consent of Administrative
Agent, commence, or join with any other Person in commencing, any bankruptcy,
reorganization, or insolvency proceeding against Borrower or any other Portfolio
Entity. The obligations of Guarantor under this Guaranty shall not be altered,
limited or affected by any proceeding, voluntary or involuntary, involving the
bankruptcy, reorganization, insolvency, receivership, liquidation or arrangement
of Borrower or any other Portfolio Entity, or by any defense which Borrower or
any other Portfolio Entity may have by reason of any order, decree or decision
of any court or administrative body resulting from any such proceeding.
(b) So long as the Credit Agreement remains in
effect, to the extent of any Obligations, Guarantor shall file, in any
bankruptcy or other proceeding in which the filing of claims is required or
permitted by law, all claims which Guarantor may have against Borrower or any
other Portfolio Entity relating to any indebtedness of Borrower or any other
Portfolio Entity to Guarantor, and hereby assigns to Administrative Agent on
behalf of the Banks all rights of Guarantor thereunder. If Guarantor does not
file any such claim, Administrative Agent, as attorney-in-fact for Guarantor, is
hereby authorized to do so in the name of Guarantor or, in Administrative
Agent's discretion, to assign the claim to a nominee and to cause proofs of
claim to be filed in the name of Administrative Agent's nominee. The foregoing
power of attorney is coupled with an interest and cannot be revoked.
Administrative Agent or its nominee shall have the sole right to accept or
reject any plan proposed in any such proceeding and to take any other action
which a party filing a claim is entitled to take. In all such cases, whether in
administration, bankruptcy or otherwise, the person authorized to pay such a
claim shall pay the same to Administrative Agent to the extent of any
Obligations which then remain unpaid, and, to the full extent necessary for that
purpose, Guarantor hereby assigns to Administrative Agent all of Guarantor's
rights to all such payments or distributions to which Guarantor would otherwise
be entitled; provided, however, that Guarantor's obligations hereunder shall not
be satisfied except to the extent that Administrative Agent receives cash by
reason of any such payment or distribution. If Administrative Agent receives
anything hereunder other than cash, the same shall be held as collateral for
amounts due under this Guaranty.
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8. Successions or Assignments.
(a) This Guaranty shall inure to the benefit of the
successors or assigns of the Banks who shall have, to the extent of their
interest, the rights of the Banks hereunder; provided, however, that the rights
of the Banks hereunder, if any be retained by them, shall have priority over and
be senior to the rights of its successors or assigns unless Administrative Agent
shall otherwise elect.
(b) This Guaranty is binding upon Guarantor and its
successors and assigns. Guarantor is not entitled to assign its obligations
hereunder to any other person without the written consent of Administrative
Agent, and any purported assignment in violation of this provision shall be
void.
9. Waivers.
(a) No delay on the part of Administrative Agent or
the Banks in exercising any of their rights (including those hereunder) and no
partial or single exercise thereof and no action or non-action by Administrative
Agent or the Banks, with or without notice to Guarantor or anyone else, shall
constitute a waiver of any rights or shall affect or impair this Guaranty.
(b) GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY OR
RELATING TO THE SUBJECT MATTER OF THIS GUARANTY AND THE RELATIONSHIP BETWEEN
GUARANTOR AND ADMINISTRATIVE AGENT THAT IS BEING ESTABLISHED. GUARANTOR
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT ADMINISTRATIVE AGENT HAS ALREADY RELIED ON THE WAIVER IN
ENTERING INTO THIS GUARANTY, AND THAT ADMINISTRATIVE AGENT WILL CONTINUE TO RELY
ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. GUARANTOR FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.
10. Interpretation. The section headings in this Guaranty are
for the convenience of reference only and shall not affect the meaning or
construction of any provision hereof.
11. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be considered as
properly given (a) if delivered in person, (b) if sent by overnight delivery
service by the addressee, except that communication or notice so transmitted by
telecopy or other direct written electronic means shall be deemed to have been
validly and effectively given on the day (if a Bank Day and, if not, on the next
following Banking Day) on which it is transmitted if transmitted before 4:00
p.m., recipient's time, and if transmitted after that time, on the next
following Banking Day; provided, however, that if any notice is tendered to an
addressee and the delivery thereof is refused by such addressee, such notice
shall be effective upon such tender. Any party shall have the right to change
its address for notice hereunder to any other location within the continental
United States by giving of 30 days' notice to the other parties in the manner
set forth hereinabove.
12. Amendments. This Guaranty may be amended only with the
written consent of the parties hereto.
13. Jurisdiction; Governing Law.
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(a) Any action or proceeding relating in any way to
this Guaranty may be brought and enforced in the courts of the State of New York
or of the United States for the Southern District of New York. Any such process
or summons in connection with any such action or proceeding may be served by
mailing a copy thereof by certified or registered mail, or any substantially
similar form of mail, addressed to Guarantor as provided for notices hereunder.
(b) This Guaranty and the rights and obligations of
Administrative Agent and of Guarantor shall be governed by and construed in
accordance with the law of the State of New York without reference to principles
of conflicts of laws (other than Section 5-1401 of the New York General
Obligations Law).
14. Integration of Terms. This Guaranty contains the entire
agreement between Guarantor and the Banks relating to the subject matter hereof
and supersedes all oral statements and prior writing with respect hereto.
15. Addresses.
(a) The address of Guarantor for notices is:
Calpine Corporation
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
(b) The address of Administrative Agent for notices is:
Credit Suisse First Boston
New York Branch
Eleven Madison Avenue
New York, New York 10010-3629
Attn: Portfolio Management
Telephone No.(▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
16. Interest; Collection Expenses. Any amount required to be
paid by Guarantor pursuant to the terms hereof shall bear interest at the
Default Rate or the maximum rate permitted by law, whichever is less, from the
date due until paid in full. If Administrative Agent or the Banks are required
to pursue any remedy against Guarantor hereunder, Guarantor shall pay to
Administrative Agent or the Banks, as the case may be, upon demand, all
reasonable attorneys' fees and expenses all other costs and expenses incurred by
Administrative Agent or the Banks in enforcing this Guaranty.
17. Termination; Reinstatement of Guaranty. Upon the
indefeasible payment in full of all Obligations owing under the Credit
Agreement, this Guaranty shall terminate in its entirety. Notwithstanding the
foregoing, this Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment to or on behalf of Borrower or to
Administrative Agent by Borrower or any other Person in respect of the
Obligations (as such term is defined in the Credit Agreement) or by Guarantor
hereunder is rescinded or must otherwise be returned by Administrative Agent
upon the insolvency, bankruptcy, reorganization, dissolution or liquidation of
Borrower or any other Portfolio Entity or otherwise, all as though such payment
had not been made.
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18. Counterparts. The Guaranty may be executed in one or more
duplicate counterparts, and when executed and delivered by all of the parties
listed below shall constitute a single binding agreement.
19. No Benefit to Borrower. This Guaranty is for the benefit
of only Administrative Agent and is not for the benefit of Borrower or any other
Portfolio Entity. Notwithstanding that, pursuant to the Credit Agreement,
Guarantor may treat any amounts actually paid hereunder as a loan to Borrower,
the Guaranty shall not be deemed to be a contract to make a loan, or extend
other debt financing or financial accommodation, for the benefit of Borrower, in
each case within the meaning of Section 365(e) of the Federal Bankruptcy Code.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be
duly executed and delivered as of the day and year first written above.
CALPINE CORPORATION,
a Delaware corporation
By:
----------------------------------------------
Name:
Title:
Agreed and accepted.
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
as Administrative Agent
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
299
APPENDIX A TO PROJECT COMPLETION GUARANTY
"Asset Sale" means any sale, transfer, lease or other disposition pursuant to
which (a) Guarantor or a Subsidiary receives consideration at the time of such
sale, transfer, lease contribution or conveyance at least equal to the fair
market value of assets being sold, transferred, leased, contributed or conveyed,
(b) at least 60% of the consideration received by Guarantor or such Subsidiary
is in the form of cash or cash equivalents and (c) an amount equal to 100% of
Net Available Cash is either (x) reinvested in additional assets within 365 days
of such asset sale or (y) used by Guarantor to prepay the loans and to
permanently reduce the commitments under the Guarantor Credit Agreement.
"Capital Expenditures" means, for any period, the aggregate amount of all
expenditures of Guarantor and its Subsidiaries for fixed or capital assets made
during such period which, in accordance with GAAP, would be classified as
capital expenditures.
"Capitalized Lease Liabilities" means all rental obligations of Guarantor or any
of its Subsidiaries under any leasing or similar arrangement which, in
accordance with GAAP, would be classified as capitalized leases, where (a) the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with GAAP, and (b) the stated maturity thereof shall be the date
of the last payment of rent or any other amount due under such lease prior to
the first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"Cogen America" means Cogeneration Corporation of America, a Delaware
corporation of which Guarantor owns not less than 50% of the outstanding voting
stock.
"Consolidated EBITDA" means, for any period, as applied to Guarantor, the sum of
Consolidated Net Income (Loss) (but without giving effect to adjustments,
accruals, deductions or entries resulting from purchase accounting,
extraordinary losses or gains and any gains or losses from any Asset Sales),
plus the following to the extent included in calculating Consolidated Net Income
(Loss): (a) Consolidated Income Tax Expense, (b) Consolidated Interest Expense,
(c) depreciation expense, (d) amortization expense and (e) all other non-cash
items reducing Consolidated Net Income, less all non-cash items increasing
Consolidated Net Income, in each case for such period; provided that, if
Guarantor has any Subsidiary that is not a Wholly Owned Subsidiary, Consolidated
EBITDA shall be reduced (to the extent not otherwise reduced by GAAP) by an
amount equal to (A) the consolidated net income (loss) of such Subsidiary (to
the extent included in Consolidated Net Income (Loss)) multiplied by (B) the
quotient of (1) the number of shares of outstanding common stock of such
Subsidiary not owned on the last day of such period by Guarantor or any Wholly
Owned Subsidiary divided by (2) the total number of shares of outstanding common
stock of such Subsidiary on the last day of such period.
"Consolidated Income Tax Expense" means, for any period, as applied to
Guarantor, the provision for local, state, federal or foreign income taxes on a
consolidated basis for such period determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, as applied to Guarantor,
the sum of (a) the total interest expense of Guarantor and its consolidated
Subsidiaries for such period as determined in accordance with GAAP, plus (b) all
but the principal component of rentals in respect of Capitalized Lease
Liabilities paid, accrued, or scheduled to be paid or accrued by Guarantor or
its consolidated Subsidiaries, plus (c) one-third of all operating lease
obligations paid, accrued, and/or scheduled to be paid by Guarantor and its
consolidated Subsidiaries, plus (d) capitalized interest, plus (e) dividends
paid in respect of preferred stock of Guarantor or any Subsidiary held by
Persons other than Guarantor or a Wholly Owned Subsidiary, including, without
limitation, but without duplication of payments by Guarantor to a Trust, all
payments by a Trust of dividends and distributions with respect to the
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Guaranteed Preferred Securities, plus (f) cash contributions to any employee
stock ownership plan to the extent such contributions are used by such employee
stock ownership plan to pay interest or fees to any Person (other than Guarantor
or a Subsidiary) in connection with loans incurred by such employee stock
ownership plan to purchase capital stock of Guarantor.
"Consolidated Net Income (Loss)" means, for any period, as applied to Guarantor,
the Consolidated Net Income (Loss) of Guarantor and its consolidated
Subsidiaries for such period, determined in accordance with GAAP, adjusted by
excluding (without duplication), to the extent included in such net income
(loss), the following: (i) all extraordinary gains or losses; (ii) any net
income of any Person if such Person is not incorporated or organized in the
United States, a state thereof or the District of Columbia, except that (A)
Guarantor's equity in the net income of any such Person for such period shall be
included in Consolidated Net Income (Loss) up to the aggregate amount of cash
actually distributed by such Person during such period to Guarantor or a
Subsidiary incorporated or organized in the United States, a state thereof or
the District of Columbia, as a dividend or other distribution and (B) the equity
of Guarantor or a Subsidiary in a net loss of any such Person for such period
shall be included in determining Consolidated Net Income (Loss); (iii) the net
income of any Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary of such income is not at
the time thereof permitted, directly or indirectly, by operation of the terms of
its charter or by-laws or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Subsidiary or its
stockholders; (iv) any net income (or loss) of any Person combined with
Guarantor or any of its Subsidiaries on a "pooling of interests" basis
attributable to any period prior to the date of such combination; (v) any gain
(but not loss) realized upon the sale or other disposition of any property,
plant or equipment of Guarantor or its Subsidiaries (including pursuant to any
sale-and-leaseback arrangement) which is not sold or otherwise disposed of in
the ordinary course of business and any gain (but not loss) realized upon the
sale or other disposition by Guarantor or any Subsidiary of any capital stock of
any Person, provided that losses shall be included on an after-tax basis; and
(vi) the cumulative effect of a change in accounting principles; and further
adjusted by subtracting from such net income the tax liability of any parent of
Guarantor to the extent of payments made to such parent by Guarantor pursuant to
any tax sharing agreement or other arrangement for such period.
"Contingent Liability" means any agreement, undertaking or arrangement by which
any Person guarantees, endorses or otherwise becomes or is contingently liable
upon (by direct or indirect agreement, contingent or otherwise, to provide funds
for payment, to supply funds to, or otherwise to invest in, a debtor, or
otherwise to assure a creditor against loss) the indebtedness, obligation or any
other liability of any other Person (other than by endorsements of instruments
in the course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The amount of any Person's
obligation under any Contingent Liability shall be calculated on a net basis
(i.e., after taking into effect agreements, undertakings and other arrangements
between the Person whose obligations are being guaranteed and the counterparty
to such Person's obligations) and shall (subject to any limitation set forth
therein) be deemed to be the outstanding net principal amount (or maximum net
principal amount, if larger) of the debt, obligation or other liability
guaranteed thereby, or, if the principal amount is not stated or determinable,
the maximum reasonably anticipated net liability in respect thereof as
determined by the Person in good faith, provided that (y) the amount of any
Contingent Liability arising out of any indebtedness, obligation or liability
other than the items described in clauses (a), (b) and (c) of the definition of
"Indebtedness" (as defined in this Appendix A) and (z) the amount of any
Contingent Liability consisting of a "keep-well," "make well" or other similar
arrangement shall be deemed to be zero unless and until Guarantor is required to
make any payment with respect thereto (and shall thereafter be deemed to be the
amount required to be paid).
"Debt" means the outstanding principal amount of all Indebtedness of Guarantor
and its consolidated Subsidiaries of the nature referred to in clauses (a), (b),
(c) and (f) of the definition of "Indebtedness" (as
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defined in this Appendix A), and (without duplication) all Contingent
Liabilities in respect of any of the foregoing.
"Facility" means a power generation facility or energy producing facility,
including any related fuel reserve.
"Fiscal Quarter" means any period of three consecutive months ending on March
31, June 30, September 30 or December 31 of any year.
"Fiscal Year" means any period of twelve consecutive calendar months ending on
December 31.
"Guaranteed Preferred Securities" means the preferred securities issued by one
of the Trusts, from time to time, including, without limitation the $276,000,000
of principal amount of such securities issued in October, 1999, the $300,000,000
of principal amount of such securities issued in January, 2000 and the
$60,000,000 of principal amount of such securities issued in February, 2000.
"Guarantor EBITDA" means, for any period, the Consolidated EBITDA of Guarantor
and its Subsidiaries, minus that portion of Consolidated Interest Expense
payable by the consolidating Subsidiaries, minus the principal payments of the
consolidating Subsidiaries, minus the consolidated non-discretionary Capital
Expenditures (i.e., Capital Expenditures which are expressly required to be made
under any agreement, contract, instrument, permit, license, law, regulation,
judgment or other arrangement (other than those arrangements and contracts that
relate to the performance of the work for which the Capital Expenditure is being
made) binding on Guarantor or any Subsidiary) of Guarantor and its Subsidiaries,
plus, without duplication, cash and Permitted Investments of Guarantor's Wholly
Owned Subsidiaries and Cogen America that are legally and contractually
available to each such Subsidiary for the payment of dividends, but only to the
extent the source of such cash and Permitted Investments is from that portion of
Consolidated EBITDA attributable to such Subsidiary or from repayments to such
Subsidiary of loans made by such Subsidiary.
"Guarantor Credit Agreement" means that certain First Amended and Restated
Credit Agreement (as amended, amended and restated or otherwise modified from
time to time), dated as of May 23, 2000, among Guarantor, certain commercial
lending institutions party thereto (the "Guarantor Lenders") and The Bank of
Nova Scotia, as agent for the Guarantor Lenders or, if the Guarantor Credit
Agreement has been terminated, any replacement thereof.
"Guarantor Interest Expense" means, for any period, as applied to Guarantor, the
sum of (a) the total interest expense of Guarantor for such period as determined
in accordance with GAAP, including, without limitation, all interest paid by
Guarantor under its subordinated debt securities issued to a Trust, plus (b) all
but the principal component of rentals in respect of Capitalized Lease
Liabilities paid, accrued, or scheduled to be paid or accrued by Guarantor, plus
(c) one-third of all operating lease obligations paid, accrued and/or scheduled
to be paid by Guarantor, plus (d) capitalized interest, plus (e) dividends paid
in respect of preferred stock of Guarantor held by Persons other than Guarantor,
plus (f) cash contributions to any employee stock ownership plan to the extent
such contributions are used by such employee stock ownership plan to pay
interest or fees to any person (other than Guarantor) in connection with loans
incurred by such employee stock ownership plan to purchase capital stock of
Guarantor.
"Hedging Obligations" means, with respect to any Person, the net liabilities of
such Person under (a) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, foreign exchange contracts,
currency swap agreements and all other agreements or arrangements designed to
protect such Person against fluctuations in interest rates or currency exchange
rates and (b) commodity or power swap or exchange agreements.
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"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
(b) all obligations, contingent or otherwise, relative to the
stated amount of all letters of credit and banker's acceptances issued for the
account of such Person (excluding Guarantor's subordinated debt securities
issued to a Trust and the Guaranteed Preferred Securities, or any similar
securities); provided, however, that if a letter of credit or banker's
acceptance has been issued to support or secure any other form of Indebtedness,
only the greater of the stated amount of such letter of credit or banker's
acceptance or the outstanding principal amount of Indebtedness supported or
secured, but not both, will be considered Indebtedness hereunder;
(c) all obligations of such Person as lessee under leases
which have been or should be, in accordance with GAAP, recorded as Capitalized
Lease Liabilities;
(d) all other items other than deferred taxes, deferred
revenue and deferred leases which, in accordance with GAAP, would be included as
liabilities on the liability side of the balance sheet of such Person as of the
date at which Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging
Obligations;
(f) whether or not so included as liabilities in accordance
with GAAP, all net obligations of such Person to pay the deferred purchase price
of property or services (excluding accounts payable incurred in the ordinary
course of business), and indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse, but excluding any royalties or similar
payments to be made by such Person which are based on production or performance;
and
(g) all Contingent Liabilities of such Person in respect of
any of the foregoing.
For all purposes of this Guaranty, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer, unless the indebtedness of such partnership
or joint venture is expressly nonrecourse to such Person.
"Interest Coverage Ratio" means, for any period of four Fiscal Quarters, the
ratio of (x) the Consolidated EBITDA of Guarantor and its Subsidiaries during
such period to (y) the Consolidated Interest Expense of Guarantor and its
Subsidiaries (excluding from Consolidated Interest Expense for purposes of this
clause (y) interest capitalized in connection with the construction of a new
Facility which interest is capitalized during the construction of such Facility)
incurred during such period.
"Interest Coverage Ratio (Parent Only)" means, for any period of four Fiscal
Quarters, the ratio of (x) the Guarantor EBITDA during such period to (y)
Guarantor Interest Expense (excluding from Guarantor Interest Expense for
purposes of this clause (y) interest capitalized in connection with the
construction of a new Facility which interest is capitalized during the
construction of such Facility) during such period.
"Leverage Ratio" means the ratio of (a) Debt to (b) Debt plus Tangible Net
Worth.
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"Lien" means any security interest, mortgage, pledge, hypothecation, assignment
for security, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"Net Available Cash" means, with respect to any Asset Sale, the cash or cash
equivalent payments received by Guarantor or a Subsidiary in connection with
such Asset Sale (including any cash received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
or when received and also including the proceeds of other property received when
converted to cash or cash equivalents) net of the sum of, without duplication,
(i) all reasonable legal, title and recording tax expenses, reasonable
commissions, and other reasonable fees and expenses incurred directly relating
to such Asset Sale, (ii) all local, state, federal and foreign taxes required to
be paid or accrued as a liability by Guarantor or any of its Subsidiaries as a
consequence of such Asset Sale, (iii) payments made to repay Indebtedness which
is secured by any assets subject to such Asset Sale in accordance with the terms
of any Lien upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or by applicable law, be repaid out of the
proceeds from such Asset Sale and (iv) all distributions required by any
contract entered into other than in contemplation of such Asset Sale to be paid
to any holder of a minority equity interest in such Subsidiary as a result of
such Asset Sale, so long as such distributions do not exceed such minority
holder's pro rata portion (based on such minority holder's proportionate equity
interest) of the cash or cash equivalent payments described above, net of the
amounts set forth in clauses (i)-(iii) above.
"Net Equity Proceeds" means, with respect to any issuance by Guarantor or a
Trust of any equity securities (including the Guaranteed Preferred Securities),
the gross consideration received by or for the account of Guarantor minus
underwriting and brokerage commissions, discounts and fees relating to such
issuance that are payable by Guarantor.
"Person" means any natural person, corporation, partnership, limited liability
company, firm, association, trust, government, governmental agency or any other
entity, whether acting in an individual, fiduciary or other capacity.
"Subsidiary" means, with respect to any Person, any corporation, partnership or
other Person of which more than 50% of the outstanding capital stock or other
comparable ownership interest having ordinary voting power to elect a majority
of the board of directors of such corporation (irrespective of whether at the
time capital stock of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person, by such Person and one or more
other Subsidiaries of such Person, or by one or more other Subsidiaries of such
Person.
"Tangible Net Worth" means the consolidated net worth of Guarantor and its
Subsidiaries, including the aggregate outstanding face amount of the Guaranteed
Preferred Securities, after subtracting therefrom the aggregate amount of any
intangible assets of Guarantor and its Subsidiaries, including goodwill,
franchises, licenses, patents, trademarks, trade names, copyrights, service
marks and brand names.
"Trust" means Calpine Capital Trust and Calpine Capital Trust I, each a Delaware
business trust.
"Wholly Owned Subsidiary" means a Subsidiary all the capital stock (or other
comparable ownership interests) of which (other than directors' qualifying
shares) is owned by Guarantor or another Wholly Owned Subsidiary.
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EXHIBIT D2-C
to the Credit Agreement
TURBINE PURCHASE GUARANTY
THIS TURBINE PURCHASE GUARANTY (this "Guaranty") dated as of
October 16, 2000 is made by CALPINE CORPORATION, a Delaware corporation
("Guarantor"), in favor of CREDIT SUISSE FIRST BOSTON, acting through its New
York Branch, as Administrative Agent ("Administrative Agent") for the Banks
under that certain Credit Agreement (the "Credit Agreement") dated as of October
16, 2000 among Calpine Construction Finance Company II, LLC, a Delaware limited
liability company, as Borrower ("Borrower"), the financial institutions listed
on Exhibit H thereto (the "Banks"), Credit Suisse First Boston, acting through
its New York Branch, as Lead Arranger and Administrative Agent, The Bank of Nova
Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of America
Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as
Arranger and Co-Syndication Agent, Bayerische Landesbank Girozentrale, as
Arranger, Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as
Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America
Services LLC, as Arranger and Co-Documentation Agent and TD Securities (USA)
Inc., as Arranger and Co-Documentation Agent.
RECITALS
A. Guarantor owns all the outstanding stock of CCFC II
Holdings, Inc., a Delaware corporation, the sole member of Borrower.
B. Administrative Agent and the Banks have agreed to enter
into the Credit Agreement with Borrower on the condition that Guarantor
guarantee certain of Borrower's obligations thereunder as provided herein.
C. Guarantor acknowledges that it will benefit, directly and
indirectly, if Administrative Agent and the Banks enter into the Credit
Agreement.
D. The obligations of Guarantor hereunder are being incurred
concurrently with the obligations of Borrower under the Credit Agreement.
E. Capitalized terms used but not defined herein shall have
the respective meanings given them in Exhibit A to the Credit Agreement and the
Rules of Interpretations contained in said Exhibit A shall apply hereto.
AGREEMENT
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NOW, THEREFORE, in consideration of the premises set forth
above and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged and as an inducement to Administrative Agent and
the Banks to enter into the Credit Agreement with Borrower, Guarantor hereby
consents and agrees as follows:
1. Guaranty.
(a) The undersigned Guarantor, as primary obligor and
not merely as surety, unconditionally and irrevocably guarantees to the Banks
(i) the payment, when due, of the obligations of Borrower under Section 6.4.2(i)
of the Credit Agreement, (ii) without duplication of amounts paid pursuant to
clause (i) above, the payment, when due, of the obligations of Borrower under
Section 5.17.3(y) of the Credit Agreement and (iii) if Borrower is unable to
obtain a disbursement of Loan proceeds under the Credit Agreement for any Funded
Turbine for a period of 60 consecutive days after a request for the same
pursuant to a Drawdown Certificate delivered pursuant to Section 3.6 of the
Credit Agreement, the prompt payment, when due, of the Turbine Costs for which
funds were requested in such Drawdown Certificate, in each case together with
the payment of all expenses incurred by Administrative Agent or the Banks in
enforcing any of such obligations and liabilities or the terms hereof,
including, without limitation, reasonable fees and expenses of legal counsel
(collectively, the "Obligations"), and agrees that if for any reason Borrower
shall fail to pay when due any of such Obligations, Guarantor will pay the same
forthwith. Guarantor waives notice of acceptance of this Guaranty and of any
obligation to which it applies or may apply under the terms hereof, and waives
diligence, presentment, demand of payment or performance, notice of dishonor or
non-payment or non-performance, protest, notice of protest, of any such
obligations, suit or taking other action by the Banks against, and giving any
notice of default or other notice to, or making any demand on, any party liable
thereon (including Guarantor).
(b) This Guaranty is a primary obligation of
Guarantor and is an absolute, unconditional, continuing and irrevocable guaranty
of payment of the Obligations and not of collectibility, and is in no way
conditioned on or contingent upon any attempt to enforce in whole or in part
Borrower's or any other Portfolio Entity's liabilities and obligations to the
Banks. If Borrower shall fail to pay any of the Obligations to the Banks as and
when they are due, Guarantor shall forthwith pay such Obligations immediately
(in the case of payment obligations, in immediately available funds). Each
failure by Borrower to pay any Obligations shall give rise to a separate cause
of action herewith, and separate suits may be brought hereunder as each cause of
action arises.
(c) The Banks may, at any time and from time to time
(whether or not after revocation or termination of this Guaranty) without the
consent of or notice to Guarantor, except such notice as may be required by the
Credit Documents or applicable law which cannot be waived, without incurring
responsibility to Guarantor, without impairing or releasing the obligations of
Guarantor hereunder, upon or without any terms or conditions and in whole or in
part, (i) change the manner, place and terms of payment or change or extend the
time of payment of, or renew or alter, any Obligation, or any obligations and
liabilities (including any of those hereunder) incurred directly or indirectly
in respect thereof or hereof or in any manner modify, amend or supplement the
terms of the Credit Documents, any documents, instruments or agreements executed
in connection therewith, in each case with the consent of Borrower or such
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other relevant Portfolio Entity, if required by the Credit Documents, and the
guaranty herein made shall apply to the Obligations changed, extended, renewed,
modified, amended, supplemented or altered in any manner; (ii) exercise or
refrain from exercising any rights against Borrower, any other Portfolio Entity
or others (including Guarantor) or otherwise act or refrain from acting; (iii)
add or release any other guarantor from its obligations without affecting or
impairing the obligations of Guarantor hereunder; (iv) settle or compromise any
Obligations and/or any obligations and liabilities (including any of those
hereunder) incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment or performance of all or any part thereof to the payment
or performance of any obligations and liabilities which may be due to the Banks
or others; (v) sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner or in any order any property by whomsoever pledged or
mortgaged to secure or howsoever securing the Obligations or any liabilities or
obligations (including any of those hereunder) incurred directly or indirectly
in respect thereof or hereof and/or any offset thereagainst; (vi) apply any sums
by whomsoever paid or howsoever realized to any obligations and liabilities of
Borrower or any other Portfolio Entity to the Banks under the Credit Documents
in the manner provided therein regardless of what obligations and liabilities
remain unpaid; (vii) consent to or waive any breach of, or any act, omission or
default under, the Credit Documents or otherwise amend, modify or supplement
(with the consent of Borrower or such other relevant Portfolio Entity, if
required by the Credit Documents) the Credit Documents or any of such other
instruments or agreements; and/or (viii) act or fail to act in any manner
referred to in this Guaranty which may deprive Guarantor of its right to
subrogation against Borrower to recover full indemnity for any payments or
performances made pursuant to this Guaranty or of its right of contribution
against any other party.
(d) No invalidity, irregularity or unenforceability
of the obligations or liabilities hereby guaranteed shall affect, impair or be a
defense to this Guaranty, which is a primary obligation of Guarantor.
(e) This is a continuing Guaranty and all obligations
to which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. In the event that,
notwithstanding the provisions of Section 1(a) hereof, this Guaranty shall be
deemed revocable in accordance with applicable law, then any such revocation
shall become effective only upon receipt by Administrative Agent of written
notice of revocation signed by Guarantor. No revocation or termination hereof
shall affect in any manner rights arising under this Guaranty with respect to
Obligations arising prior to receipt by Administrative Agent of written notice
of such revocation or termination.
(f) (i) Except as otherwise required by law, each
payment required to be made by Guarantor to the Banks hereunder shall be made
without deduction or withholding for or on account of Taxes. If such deduction
or withholding is so required, Guarantor shall, upon notice thereof from
Administrative Agent, (A) pay the amount required to be deducted or withheld to
the appropriate authorities before penalties attach thereto or interest accrues
thereon, (B) on or before the 60th day after payment of such amount, forward to
the Banks an official receipt evidencing such payment (or a certified copy
thereof), and (C) in the case of any such deduction or withholding, forthwith
pay to Administrative Agent for the account of the Banks such additional amount
as may be necessary to ensure that the net amount actually received by the Banks
is free and clear of such Taxes, including any Taxes on such additional amount,
is
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equal to the amount that the Banks would have received had there been no such
deduction or withholding.
(ii) As used herein, the term "Tax" means any
present or future tax, levy, impost, duty, charge, assessment or fee of any
nature (including interest, penalties and additions thereto) that is imposed by
any government or other taxing authority in respect of any payment under this
Guaranty other than (A) any income, franchise or similar tax imposed upon the
gross or net income of Administrative Agent or any Bank by the United States,
New York State, any jurisdiction where Administrative Agent or any Bank is
organized and/or the jurisdiction in which is located any office from or at
which Administrative Agent or any Bank is making or maintaining any Loans or
receiving any payments under any of the Credit Documents and (B) any stamp,
registration, documentation or similar tax.
2. Representations and Warranties. Guarantor makes the
representations and warranties set forth below to Administrative Agent and the
Banks as of the date hereof:
(a) Guarantor is duly formed, validly existing and in
good standing under the laws of the State of Delaware and has the power and
authority to execute and deliver this Guaranty and to perform its obligations
hereunder.
(b) Guarantor has taken all necessary corporate
action to authorize the execution and delivery of this Guaranty and the
performance of its obligations hereunder.
(c) All governmental authorizations and actions
necessary in connection with the execution and delivery by Guarantor of this
Guaranty and the performance of its obligations hereunder have been obtained or
performed and remain valid and in full force and effect.
(d) This Guaranty has been duly executed and
delivered by Guarantor and constitutes the legal, valid and binding obligation
of Guarantor, enforceable against Guarantor in accordance with the terms of this
Guaranty, subject to applicable bankruptcy, insolvency and other similar laws
affecting creditors' rights generally.
(e) The execution, delivery and performance of this
Guaranty (i) do not and will not contravene any provisions of Guarantor's
certificate of incorporation or bylaws, or any law, rule, regulation, order,
judgment or decree applicable to or binding on Guarantor or any of its
Affiliates or properties; (ii) do not and will not contravene, or result in any
breach of or constitute any default under, any agreement or instrument to which
Guarantor is a party or by which Guarantor or any of its properties may be bound
or affected; and (iii) do not and will not require the consent of any Person
under any existing law or agreement which has not already been obtained.
(f) There is no pending or, to the best of
Guarantor's knowledge, threatened action or proceeding affecting Guarantor
before any court, governmental agency or arbitrator, which might reasonably be
expected to materially and adversely affect the financial condition, results of
operations, business or prospects of Guarantor or the ability of Guarantor to
perform its obligations under this Guaranty.
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(g) All quarterly and annual financial statements
heretofore delivered by Guarantor to Administrative Agent are true, correct and
complete, do not fail to disclose any material liabilities, whether direct or
contingent, fairly present the financial condition of Guarantor as of the date
delivered and are prepared in accordance with generally accepted accounting
principles consistently applied.
(h) Guarantor possesses all franchises, certificates,
licenses, permits and other governmental authorizations and approvals necessary
for it to own its properties, conduct its businesses and perform its obligations
under this Guaranty.
(i) Guarantor is not an investment company or a
company controlled by an investment company, within the meaning of the
Investment Company Act of 1940, and is not subject to, or is exempt from,
regulation under the Public Utility Holding Company Act of 1935 and the Federal
Power Act.
(j) Guarantor has established adequate means of
obtaining financial and other information pertaining to the businesses,
operations and condition (financial and otherwise) of Borrower and the other
Portfolio Entities and their respective properties on a continuing basis, and
Guarantor now is and hereafter will be completely familiar with the businesses,
operations and condition (financial and otherwise) of Borrower and the other
Portfolio Entities and their respective properties.
(k) (i) Guarantor is not, and will not as a result of
the execution and delivery of this Guaranty, be rendered insolvent, (ii)
Guarantor does not intend to incur, or believe it is incurring, obligations
beyond its ability to pay or perform and (iii) Guarantor's property remaining
after the delivery and performance of this Guaranty will not constitute
unreasonably small capital.
(l) Guarantor is not in default under any material
agreement relating to the incurrence of debt to which it is a party.
3. Covenants. So long as any Obligations are outstanding,
Guarantor agrees that:
(a) It will maintain in full force and effect all
consents of any governmental or other authority that are required to be obtained
by it with respect to this Guaranty and will obtain any that may become
necessary in the future;
(b) It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Guaranty;
(c) Promptly, and in any event within 30 Banking Days
after the General Counsel of Guarantor obtains knowledge thereof, Guarantor will
give to Administrative Agent notice of the occurrence of any event or of any
litigation or governmental proceeding pending (i) against Guarantor or any of
its Affiliates which could affect the business, operations,
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property, assets or condition (financial or otherwise) of Guarantor so as to
materially and adversely affect the ability of Guarantor to perform its
obligations hereunder or (ii) with respect to this Guaranty, which event or
pending proceeding is likely to materially and adversely affect the business,
operations, property, assets or condition (financial or otherwise) of Guarantor
and its Affiliates taken as a whole;
(d) It will deliver such other documents and other
information reasonably requested by Administrative Agent; and
(e) It will comply in all material respects with its
certificate of incorporation.
4. Waiver. Guarantor hereby waives and relinquishes all rights
and remedies accorded by applicable law to sureties or guarantors and agrees not
to assert or take advantage of any such rights or remedies, including without
limitation (a) any right to require Administrative Agent or the Banks to proceed
against Borrower or any other Person or to proceed against or exhaust any
security held by Administrative Agent or the Banks at any time or to pursue any
other remedy in Administrative Agent's or the Banks' power before proceeding
against Guarantor, (b) any defense that may arise by reason of the incapacity,
lack of power or authority, death, dissolution, merger, termination or
disability of Borrower or any other Person or the failure of Administrative
Agent or the Banks to file or enforce a claim against the estate (in
administration, bankruptcy or any other proceeding) of Borrower or any other
Person, (c) demand, presentment, protest and notice of any kind except as
provided herein, including without limitation notice of the existence, creation
or incurring of any new or additional indebtedness or obligation or of any
action or non-action on the part of Borrower, Administrative Agent, the Banks,
any endorser or creditor of Borrower or Guarantor or on the part of any other
Person under this or any other instrument in connection with any obligation or
evidence of indebtedness held by Administrative Agent or the Banks as collateral
or in connection with any Obligations, (d) any defense based upon an election of
remedies by Administrative Agent or the Banks, including without limitation an
election to proceed by non-judicial rather than judicial foreclosure, which
destroys or otherwise impairs the subrogation rights of Guarantor, the right of
Guarantor to proceed against Borrower for reimbursement, or both, (e) any
defense based on any offset against any amounts which may be owed by any Person
to Guarantor for any reason whatsoever, (f) any defense based on any act,
failure to act, delay or omission whatsoever on the part of Borrower or any
other Portfolio Entity of the failure by Borrower or any other Portfolio Entity
to do any act or thing or to observe or perform any covenant, condition or
agreement to be observed or performed by it under the Credit Documents, (g) any
defense based upon any statute or rule of law which provides that the obligation
of a surety must be neither larger in amount nor in other respects more
burdensome than that of the principal provided, that, upon payment in full of
the Obligations, this Guaranty shall no longer be of any force or effect, (h)
any defense, setoff or counterclaim which may at any time be available to or
asserted by Borrower or any other Portfolio Entity against Administrative Agent,
the Banks or any other Person under the Credit Documents, (i) any duty on the
part of Administrative Agent or the Banks to disclose to Guarantor any facts
Administrative Agent or the Banks may now or hereafter know about Borrower or
any other Portfolio Entity, regardless of whether Administrative Agent or the
Banks have reason to believe that any such facts materially increase the risk
beyond that which Guarantor intends to assume, or have reason to believe that
such facts are unknown to Guarantor,
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or have a reasonable opportunity to communicate such facts to Guarantor, since
Guarantor acknowledges that Guarantor is fully responsible for being and keeping
informed of the financial condition of Borrower and the other Portfolio Entities
and of all circumstances bearing on the risk of non-payment of any obligations
and liabilities hereby guaranteed, (j) the fact that Guarantor may at any time
in the future dispose of all or part of its direct or indirect interest in
Borrower or any other Portfolio Entity, (k) any defense based on any change in
the time, manner or place of any payment under, or in any other term of, the
Credit Documents or any other amendment, renewal, extension, acceleration,
compromise or waiver of or any consent or departure from the terms of the Credit
Documents, (l) any defense arising because of Administrative Agent's or the
Banks' election, in any proceeding instituted under the Federal Bankruptcy Code,
of the application of Section 1111(b)(2) of the Federal Bankruptcy Code, and (m)
any defense based upon any borrowing or grant of a security interest under
Section 364 of the Federal Bankruptcy Code.
5. Subordination. Except as otherwise specifically provided in
this Guaranty, all existing and future indebtedness of Borrower or any other
Portfolio Entity to Guarantor (except to the extent such indebtedness consists
of approved operating expenses or other O&M Costs with respect to materials or
services provided consistent with an applicable Annual Operating Budget) and the
right of Guarantor to withdraw any capital invested by Guarantor in Borrower or
any other Portfolio Entity, is hereby subordinated to all obligations and
liabilities hereby guaranteed. Without the prior written consent of
Administrative Agent, such subordinated indebtedness shall not be paid or
withdrawn in whole or in part, nor shall Guarantor accept any payment of or on
account of any such indebtedness or as a withdrawal of capital while the Credit
Agreement is in effect except from distributions permitted under Waterfall Level
8 and 10 of Section 7.2 of the Credit Agreement or as permitted under Section
3.10(b) of the Credit Agreement. Any payment by Borrower in violation of this
Guaranty shall be received by Guarantor in trust for Administrative Agent and
the Banks, and Guarantor shall cause the same to be paid to Administrative Agent
for the benefit of the Banks immediately upon demand by Administrative Agent on
account of Borrower's obligations and liabilities hereby guaranteed. Guarantor
shall not assign all or any portion of such indebtedness while the Credit
Agreement remains in effect except upon prior written notice to Administrative
Agent by which the assignee of any such indebtedness agrees that the assignment
is made subject to the terms of this Guaranty, and that any attempted assignment
of such indebtedness in violation of the provisions hereof shall be void.
6. Subrogation. So long as the Credit Agreement remains in
effect, (a) Guarantor shall not have any right of subrogation and waives all
rights to enforce any remedy which the Banks now have or may hereafter have
against Borrower or any other Portfolio Entity, and waives the benefit of, and
all rights to participate in, any security now or hereafter held by
Administrative Agent or the Banks from Borrower or any other Portfolio Entity
and (b) Guarantor waives any claim, right or remedy which Guarantor may now have
or hereafter acquire against Borrower or any other Portfolio Entity that arises
hereunder and/or from the performance by Guarantor hereunder including, without
limitation, any claim, remedy or right of subrogation, reimbursement,
exoneration, contribution, indemnification, or participation in any claim, right
or remedy of the Banks against Borrower or any other Portfolio Entity, or any
security which the Banks now have or hereafter acquire, whether or not such
claim, right or remedy arises in equity, under contract, by statute, under
common law or otherwise.
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7. Bankruptcy.
(a) So long as the Credit Agreement remains in
effect, Guarantor shall not, without the prior written consent of Administrative
Agent, commence, or join with any other Person in commencing, any bankruptcy,
reorganization, or insolvency proceeding against Borrower or any other Portfolio
Entity. The obligations of Guarantor under this Guaranty shall not be altered,
limited or affected by any proceeding, voluntary or involuntary, involving the
bankruptcy, reorganization, insolvency, receivership, liquidation or arrangement
of Borrower or any other Portfolio Entity, or by any defense which Borrower or
any other Portfolio Entity may have by reason of any order, decree or decision
of any court or administrative body resulting from any such proceeding.
(b) So long as the Credit Agreement remains in
effect, to the extent of any Obligations, Guarantor shall file, in any
bankruptcy or other proceeding in which the filing of claims is required or
permitted by law, all claims which Guarantor may have against Borrower or any
other Portfolio Entity relating to any indebtedness of Borrower or any other
Portfolio Entity to Guarantor, and hereby assigns to Administrative Agent on
behalf of the Banks all rights of Guarantor thereunder. If Guarantor does not
file any such claim, Administrative Agent, as attorney-in-fact for Guarantor, is
hereby authorized to do so in the name of Guarantor or, in Administrative
Agent's discretion, to assign the claim to a nominee and to cause proofs of
claim to be filed in the name of Administrative Agent's nominee. The foregoing
power of attorney is coupled with an interest and cannot be revoked.
Administrative Agent or its nominee shall have the sole right to accept or
reject any plan proposed in any such proceeding and to take any other action
which a party filing a claim is entitled to take. In all such cases, whether in
administration, bankruptcy or otherwise, the person authorized to pay such a
claim shall pay the same to Administrative Agent to the extent of any
Obligations which then remain unpaid, and, to the full extent necessary for that
purpose, Guarantor hereby assigns to Administrative Agent all of Guarantor's
rights to all such payments or distributions to which Guarantor would otherwise
be entitled; provided, however, that Guarantor's obligations hereunder shall not
be satisfied except to the extent that Administrative Agent receives cash by
reason of any such payment or distribution. If Administrative Agent receives
anything hereunder other than cash, the same shall be held as collateral for
amounts due under this Guaranty.
8. Successions or Assignments.
(a) This Guaranty shall inure to the benefit of the
successors or assigns of the Banks who shall have, to the extent of their
interest, the rights of the Banks hereunder; provided, however, that the rights
of the Banks hereunder, if any be retained by them, shall have priority over and
be senior to the rights of its successors or assigns unless Administrative Agent
shall otherwise elect.
(b) This Guaranty is binding upon Guarantor and its
successors and assigns. Guarantor is not entitled to assign its obligations
hereunder to any other person without the written consent of Administrative
Agent, and any purported assignment in violation of this provision shall be
void.
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9. Waivers.
(a) No delay on the part of Administrative Agent or
the Banks in exercising any of their rights (including those hereunder) and no
partial or single exercise thereof and no action or non-action by Administrative
Agent or the Banks, with or without notice to Guarantor or anyone else, shall
constitute a waiver of any rights or shall affect or impair this Guaranty.
(b) GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY OR
RELATING TO THE SUBJECT MATTER OF THIS GUARANTY AND THE RELATIONSHIP BETWEEN
GUARANTOR AND ADMINISTRATIVE AGENT THAT IS BEING ESTABLISHED. GUARANTOR
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT ADMINISTRATIVE AGENT HAS ALREADY RELIED ON THE WAIVER IN
ENTERING INTO THIS GUARANTY, AND THAT ADMINISTRATIVE AGENT WILL CONTINUE TO RELY
ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. GUARANTOR FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.
10. Interpretation. The section headings in this Guaranty are
for the convenience of reference only and shall not affect the meaning or
construction of any provision hereof.
11. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be considered as
properly given (a) if delivered in person, (b) if sent by overnight delivery
service by the addressee, except that communication or notice so transmitted by
telecopy or other direct written electronic means shall be deemed to have been
validly and effectively given on the day (if a Bank Day and, if not, on the next
following Banking Day) on which it is transmitted if transmitted before 4:00
p.m., recipient's time, and if transmitted after that time, on the next
following Banking Day; provided, however, that if any notice is tendered to an
addressee and the delivery thereof is refused by such addressee, such notice
shall be effective upon such tender. Any party shall have the right to change
its address for notice hereunder to any other location within the continental
United States by giving of 30 days' notice to the other parties in the manner
set forth hereinabove.
12. Amendments. This Guaranty may be amended only with the
written consent of the parties hereto.
13. Jurisdiction; Governing Law.
(a) Any action or proceeding relating in any way to
this Guaranty may be brought and enforced in the courts of the State of New York
or of the United States for the Southern District of New York. Any such process
or summons in connection with any such
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action or proceeding may be served by mailing a copy thereof by certified or
registered mail, or any substantially similar form of mail, addressed to
Guarantor as provided for notices hereunder.
(b) This Guaranty and the rights and obligations of
Administrative Agent and of Guarantor shall be governed by and construed in
accordance with the law of the State of New York without reference to principles
of conflicts of laws (other than Section 5-1401 of the New York General
Obligations Law).
14. Integration of Terms. This Guaranty contains the entire
agreement between Guarantor and the Banks relating to the subject matter hereof
and supersedes all oral statements and prior writing with respect hereto.
15. Addresses.
(a) The address of Guarantor for notices is:
Calpine Corporation
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
(b) The address of Administrative Agent for notices
is:
Credit Suisse First Boston,
New York Branch
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Portfolio Management
Telephone No.(▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
16. Interest; Collection Expenses. Any amount required to be
paid by Guarantor pursuant to the terms hereof shall bear interest at the
Default Rate or the maximum rate permitted by law, whichever is less, from the
date due until paid in full. If Administrative Agent or the Banks are required
to pursue any remedy against Guarantor hereunder, Guarantor shall pay to
Administrative Agent or the Banks, as the case may be, upon demand, all
reasonable attorneys' fees and expenses all other costs and expenses incurred by
Administrative Agent or the Banks in enforcing this Guaranty.
17. Termination; Reinstatement of Guaranty. Upon the
indefeasible payment in full of all Obligations owing under the Credit
Agreement, this Guaranty shall terminate in its entirety. Notwithstanding the
foregoing, this Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment to or on behalf of Borrower or to
Administrative Agent by Borrower or any other Person in respect of the
Obligations (as such term is defined in the Credit Agreement) or by Guarantor
hereunder is rescinded or must
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otherwise be returned by Administrative Agent upon the insolvency, bankruptcy,
reorganization, dissolution or liquidation of Borrower or any other Portfolio
Entity or otherwise, all as though such payment had not been made.
18. Counterparts. The Guaranty may be executed in one or more
duplicate counterparts, and when executed and delivered by all of the parties
listed below shall constitute a single binding agreement.
19. No Benefit to Borrower. This Guaranty is for the benefit
of only Administrative Agent and is not for the benefit of Borrower or any other
Portfolio Entity. Notwithstanding that, pursuant to the Credit Agreement,
Guarantor may treat any amounts actually paid hereunder as a loan to Borrower,
the Guaranty shall not be deemed to be a contract to make a loan, or extend
other debt financing or financial accommodation, for the benefit of Borrower, in
each case within the meaning of Section 365(e) of the Federal Bankruptcy Code.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be
duly executed and delivered as of the day and year first written above.
CALPINE CORPORATION,
a Delaware corporation
By:
------------------------------------
Name:
Title:
Agreed and accepted.
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
as Administrative Agent
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
316
EXHIBIT D2-D
to the Credit Agreement
PROJECT OWNER GUARANTY
THIS PROJECT OWNER GUARANTY (this "Guaranty") dated as of ,
200__ is made by ____________, a Delaware ___________ ("Guarantor"), in favor of
CREDIT SUISSE FIRST BOSTON, acting through its New York Branch, as
Administrative Agent ("Administrative Agent") for the Banks under that certain
Credit Agreement (the "Credit Agreement") dated as of October 16, 2000 among
Calpine Construction Finance Company II, LLC, a Delaware limited liability
company, as Borrower ("Borrower"), the financial institutions listed on Exhibit
H thereto (the "Banks"), Credit Suisse First Boston, acting through its New York
Branch, as Lead Arranger and Administrative Agent ("Administrative Agent"), The
Bank of Nova Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner, Banc
of America Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.)
Capital LLC, as Arranger and Co-Syndication Agent, Bayerische Landesbank
Girozentrale, as Arranger, Co-Documentation Agent and LC Bank, CIBC World
Markets Corp., as Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇
North America Services LLC, as Arranger and Co-Documentation Agent and TD
Securities (USA) Inc., as Arranger and Co-Documentation Agent.
RECITALS
A. Guarantor is a Subsidiary of Borrower and developer and
owner of the _________ Project (the "Project"). Borrower will loan to Guarantor
proceeds of the Loans made by the Banks to Borrower under the Credit Agreement
for Guarantor's payment of Project Costs with respect to the Project.
B. Administrative Agent and the Banks have agreed to enter
into the Credit Agreement with Borrower on the condition that Guarantor
guarantee certain of Borrower's and the other Portfolio Entities' obligations
thereunder as provided herein.
C. Guarantor acknowledges that it will benefit, directly and
indirectly, if Administrative Agent and the Banks enter into the Credit
Agreement and the other Credit Documents.
D. [THE OBLIGATIONS OF GUARANTOR HEREUNDER ARE BEING INCURRED
CONCURRENTLY WITH [THE OBLIGATIONS OF BORROWER UNDER THE CREDIT AGREEMENT][THE
INITIAL FUNDING OF LOANS TO BORROWER WITH RESPECT TO THE PROJECT].
E. Capitalized terms used but not defined herein shall have
the respective meanings given them in Exhibit A to the Credit Agreement and the
Rules of Interpretations contained in said Exhibit A shall apply hereto.
AGREEMENT
NOW, THEREFORE, in consideration of the premises set forth
above and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged and as an inducement to Administrative Agent and
the Banks to enter into the Credit Agreement with Borrower
317
and the other Credit Documents with the Portfolio Entities, Guarantor hereby
consents and agrees as follows:
1. Guaranty.
(a) The undersigned Guarantor, as primary obligor and
not merely as surety, unconditionally and irrevocably guarantees to the Banks
the punctual payment when due, whether at stated maturity, by acceleration or
otherwise of all of the Obligations of the Portfolio Entities under the Credit
Documents, including without limitation the Obligations of Borrower under the
Credit Agreement and the other Credit Documents, in each case together with the
payment of all expenses incurred by Administrative Agent or the Banks in
enforcing any of such obligations and liabilities or the terms hereof,
including, without limitation, reasonable fees and expenses of legal counsel,
but expressly excluding any Obligations (including expenses of enforcement and
the fees and expenses of legal counsel related thereto) arising out of or
attributable to Projects which have achieved Operation prior to the effective
date of this Guaranty (collectively, the "Guaranteed Obligations"), and agrees
that if for any reason Borrower or any other Portfolio Entity shall fail to pay
when due any of such Guaranteed Obligations, Guarantor will pay the same
forthwith. Guarantor waives notice of acceptance of this Guaranty and of any
obligation to which it applies or may apply under the terms hereof, and waives
diligence, presentment, demand of payment or performance, notice of dishonor or
non-payment or non-performance, protest, notice of protest, of any such
obligations, suit or taking other action by the Banks against, and giving any
notice of default or other notice to, or making any demand on, any party liable
thereon (including Guarantor).
(b) This Guaranty is a primary obligation of
Guarantor and is an absolute, unconditional, continuing and irrevocable guaranty
of payment of the Guaranteed Obligations and not of collectibility, and is in no
way conditioned on or contingent upon any attempt to enforce in whole or in part
Borrower's or any other Portfolio Entity's liabilities and obligations to the
Banks. If Borrower or any other Portfolio Entity shall fail to pay any of the
Guaranteed Obligations to the Banks as and when they are due, Guarantor shall
forthwith pay such Guaranteed Obligations immediately (in immediately available
funds). Each failure by Borrower or any other Portfolio Entity to pay any
Guaranteed Obligations shall give rise to a separate cause of action herewith,
and separate suits may be brought hereunder as each cause of action arises.
(c) The Banks may, at any time and from time to time
(whether or not after revocation or termination of this Guaranty) without the
consent of or notice to Guarantor, except such notice as may be required by the
Credit Documents or applicable law which cannot be waived, without incurring
responsibility to Guarantor, without impairing or releasing the obligations of
Guarantor hereunder, upon or without any terms or conditions and in whole or in
part, (i) change the manner, place and terms of payment or performance or change
or extend the time of payment or performance of, or renew or alter, any
Obligation, or any obligations and liabilities (including any of those
hereunder) incurred directly or indirectly in respect thereof or hereof or in
any manner modify, amend or supplement the terms of the Credit Documents, any
documents, instruments or agreements executed in connection therewith, in each
case with the consent of Borrower or such other relevant Portfolio Entity, if
required by the Credit Documents, and the guaranty herein made shall apply to
the Guaranteed Obligations changed, extended, renewed, modified, amended,
supplemented or altered in any manner; (ii) exercise or refrain from exercising
any rights against Borrower, any other Portfolio Entity or others (including
Guarantor) or otherwise act or refrain from acting; (iii) add or release any
other guarantor from its obligations without affecting or impairing the
obligations of Guarantor hereunder; (iv) settle or compromise any Guaranteed
Obligations and/or any obligations and liabilities (including any of those
hereunder) incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment or performance of all or any part thereof to the payment
or performance of any obligations and liabilities
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which may be due to the Banks or others; (v) sell, exchange, release, surrender,
realize upon or otherwise deal with in any manner or in any order any property
by whomsoever pledged or mortgaged to secure or howsoever securing the
Guaranteed Obligations or any liabilities or obligations (including any of those
hereunder) incurred directly or indirectly in respect thereof or hereof and/or
any offset thereagainst; (vi) apply any sums by whomsoever paid or howsoever
realized to any obligations and liabilities of Borrower or any other Portfolio
Entity to the Banks under the Credit Documents in the manner provided therein
regardless of what obligations and liabilities remain unpaid; (vii) consent to
or waive any breach of, or any act, omission or default under, the Credit
Documents or otherwise amend, modify or supplement (with the consent of Borrower
or such other relevant Portfolio Entity, if required by the Credit Documents)
the Credit Documents or any of such other instruments or agreements; and/or
(viii) act or fail to act in any manner referred to in this Guaranty which may
deprive Guarantor of its right to subrogation against Borrower or any other
Portfolio Entity to recover full indemnity for any payments or performances made
pursuant to this Guaranty or of its right of contribution against any other
party.
(d) No invalidity, irregularity or unenforceability
of the obligations or liabilities hereby guaranteed shall affect, impair or be a
defense to this Guaranty, which is a primary obligation of Guarantor.
(e) This is a continuing Guaranty and all obligations
to which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. In the event that,
notwithstanding the provisions of Section 1(a) hereof, this Guaranty shall be
deemed revocable in accordance with applicable law, then any such revocation
shall become effective only upon receipt by Administrative Agent of written
notice of revocation signed by Guarantor. No revocation or termination hereof
shall affect in any manner rights arising under this Guaranty with respect to
Guaranteed Obligations arising prior to receipt by Administrative Agent of
written notice of such revocation or termination.
(f) (i) Except as otherwise required by law, each
payment required to be made by Guarantor to the Banks hereunder shall be made
without deduction or withholding for or on account of Taxes. If such deduction
or withholding is so required, Guarantor shall, upon notice thereof from
Administrative Agent, (A) pay the amount required to be deducted or withheld to
the appropriate authorities before penalties attach thereto or interest accrues
thereon, (B) on or before the 60th day after payment of such amount, forward to
the Banks an official receipt evidencing such payment (or a certified copy
thereof), and (C) in the case of any such deduction or withholding, forthwith
pay to Administrative Agent for the account of the Banks such additional amount
as may be necessary to ensure that the net amount actually received by the Banks
is free and clear of such Taxes, including any Taxes on such additional amount,
is equal to the amount that the Banks would have received had there been no such
deduction or withholding.
(ii) As used herein, the term "Tax" means
any present or future tax, levy, impost, duty, charge, assessment or fee of any
nature (including interest, penalties and additions thereto) that is imposed by
any government or other taxing authority in respect of any payment under this
Guaranty other than (A) any income, franchise or similar tax imposed upon the
gross or net income of Administrative Agent or any Bank by the United States,
New York State, any jurisdiction where Administrative Agent or any Bank is
organized and/or the jurisdiction in which is located any office from or at
which Administrative Agent or any Bank is making or maintaining any Loans or
receiving any payments under any of the Credit Documents and (B) any stamp,
registration, documentation or similar tax.
2. Representations and Warranties. Guarantor makes the
representations and warranties set forth below to Administrative Agent and the
Banks as of the date hereof:
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(a) Guarantor is duly formed, validly existing and in
good standing under the laws of the State of Delaware and has the power and
authority to execute and deliver this Guaranty and to perform its obligations
hereunder.
(b) Guarantor has taken all necessary action to
authorize the execution and delivery of this Guaranty and the performance of its
obligations hereunder.
(c) All governmental authorizations and actions
necessary in connection with the execution and delivery by Guarantor of this
Guaranty and the performance of its obligations hereunder have been obtained or
performed and remain valid and in full force and effect.
(d) This Guaranty has been duly executed and
delivered by Guarantor and constitutes the legal, valid and binding obligation
of Guarantor, enforceable against Guarantor in accordance with the terms of this
Guaranty, subject to applicable bankruptcy, insolvency and other similar laws
affecting creditors' rights generally.
(e) The execution, delivery and performance of this
Guaranty (i) do not and will not contravene any provisions of Guarantor's
constituent documents, or any law, rule, regulation, order, judgment or decree
applicable to or binding on Guarantor or any of its Affiliates or properties;
(ii) do not and will not contravene, or result in any breach of or constitute
any default under, any agreement or instrument to which Guarantor is a party or
by which Guarantor or any of its properties may be bound or affected; and (iii)
do not and will not require the consent of any Person under any existing law or
agreement which has not already been obtained.
(f) There is no pending or, to the best of
Guarantor's knowledge, threatened action or proceeding affecting Guarantor
before any court, governmental agency or arbitrator, which might reasonably be
expected to materially and adversely affect the financial condition, results of
operations, business or prospects of Guarantor or the ability of Guarantor to
perform its obligations under this Guaranty.
(g) All of Guarantor's quarterly and annual financial
statements heretofore delivered by Borrower to Administrative Agent are true,
correct and complete, do not fail to disclose any material liabilities, whether
direct or contingent, fairly present the financial condition of Guarantor as of
the date delivered and are prepared in accordance with generally accepted
accounting principles consistently applied.
(h) Guarantor possesses all franchises, certificates,
licenses, permits and other governmental authorizations and approvals necessary
for it to own its properties, conduct its businesses and perform its obligations
under this Guaranty.
(i) Guarantor is not an investment company or a
company controlled by an investment company, within the meaning of the
Investment Company Act of 1940, and is not subject to, or is exempt from,
regulation under the Public Utility Holding Company Act of 1935 and the Federal
Power Act.
(j) Guarantor has established adequate means of
obtaining financial and other information pertaining to the businesses,
operations and condition (financial and otherwise) of Borrower and the other
Portfolio Entities and their respective properties on a continuing basis, and
Guarantor now is and hereafter will be completely familiar with the businesses,
operations and condition (financial and otherwise) of Borrower and the other
Portfolio Entities and their respective properties.
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(k) (i) Guarantor is not, and will not as a result of
the execution and delivery of this Guaranty, be rendered insolvent, (ii)
Guarantor does not intend to incur, or believe it is incurring, obligations
beyond its ability to pay or perform and (iii) Guarantor's property remaining
after the delivery and performance of this Guaranty will not constitute
unreasonably small capital. If, notwithstanding the foregoing, enforcement of
the liability of Guarantor under this Guaranty for the full amount of the
Guaranteed Obligations would be an unlawful or voidable transfer under any
applicable fraudulent conveyance or fraudulent transfer law or any comparable
law, then the liability of Guarantor hereunder shall be reduced to the highest
amount for which such liability may then be enforced without giving rise to an
unlawful or voidable transfer under any such law.
(l) Guarantor is not in default under any material
agreement relating to the incurrence of debt to which it is a party.
3. Covenants. So long as any Guaranteed Obligations are
outstanding, Guarantor agrees that:
(a) It will maintain in full force and effect all
consents of any governmental or other authority that are required to be obtained
by it with respect to this Guaranty and will obtain any that may become
necessary in the future;
(b) It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Guaranty;
(c) Promptly, and in any event within 30 Banking Days
after the General Counsel of Guarantor obtains knowledge thereof, Guarantor will
give to Administrative Agent notice of the occurrence of any event or of any
litigation or governmental proceeding pending (i) against Guarantor or any of
its Affiliates which could affect the business, operations, property, assets or
condition (financial or otherwise) of Guarantor so as to materially and
adversely affect the ability of Guarantor to perform its obligations hereunder
or (ii) with respect to this Guaranty, which event or pending proceeding is
likely to materially and adversely affect the business, operations, property,
assets or condition (financial or otherwise) of Guarantor;
(d) It will deliver such other documents and other
information reasonably requested by Administrative Agent;
(e) It will comply in all material respects with its
constituent documents;
(f) It will perform, or cause Borrower to perform,
each of the covenants and other agreements contained in Articles 5 and 6 of the
Credit Agreement as if such covenants and other agreements were fully set forth
in this Guaranty, such agreements and other covenants being incorporated into
this Guaranty by reference; provided, however, that performance of such
covenants by Borrower or another Portfolio Entity will satisfy Guarantor's
obligations hereunder with respect to such convenants.
4. Waiver. Guarantor hereby waives and relinquishes all rights
and remedies accorded by applicable law to sureties or guarantors and agrees not
to assert or take advantage of any such rights or remedies, including without
limitation (a) any right to require Administrative Agent or the Banks to proceed
against Borrower, any other Portfolio Entity or any other Person or to proceed
against or exhaust any security held by Administrative Agent or the Banks at any
time or to pursue any other
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remedy in Administrative Agent's or the Banks' power before proceeding against
Guarantor, (b) any defense that may arise by reason of the incapacity, lack of
power or authority, death, dissolution, merger, termination or disability of
Borrower, any other Portfolio Entity or any other Person or the failure of
Administrative Agent or the Banks to file or enforce a claim against the estate
(in administration, bankruptcy or any other proceeding) of Borrower, any other
Portfolio Entity or any other Person, (c) demand, presentment, protest and
notice of any kind except as provided herein, including without limitation
notice of the existence, creation or incurring of any new or additional
indebtedness or obligation or of any action or non-action on the part of
Borrower, any other Portfolio Entity, Administrative Agent, the Banks, any
endorser or creditor of Borrower, any other Portfolio Entity or Guarantor or on
the part of any other Person under this or any other instrument in connection
with any obligation or evidence of indebtedness held by Administrative Agent or
the Banks as collateral or in connection with any Guaranteed Obligations, (d)
any defense based upon an election of remedies by Administrative Agent or the
Banks, including without limitation an election to proceed by non-judicial
rather than judicial foreclosure, which destroys or otherwise impairs the
subrogation rights of Guarantor, the right of Guarantor to proceed against
Borrower or any other Portfolio Entity for reimbursement, or both, (e) any
defense based on any offset against any amounts which may be owed by any Person
to Guarantor for any reason whatsoever, (f) any defense based on any act,
failure to act, delay or omission whatsoever on the part of Borrower or any
other Portfolio Entity of the failure by Borrower or any other Portfolio Entity
to do any act or thing or to observe or perform any covenant, condition or
agreement to be observed or performed by it under the Credit Documents, (g) any
defense based upon any statute or rule of law which provides that the obligation
of a surety must be neither larger in amount nor in other respects more
burdensome than that of the principal provided, that, upon payment or
performance in full of the Guaranteed Obligations, this Guaranty shall no longer
be of any force or effect, (h) any defense, setoff or counterclaim which may at
any time be available to or asserted by Borrower or any other Portfolio Entity
against Administrative Agent, the Banks or any other Person under the Credit
Documents, (i) any duty on the part of Administrative Agent or the Banks to
disclose to Guarantor any facts Administrative Agent or the Banks may now or
hereafter know about Borrower or any other Portfolio Entity, regardless of
whether Administrative Agent or the Banks have reason to believe that any such
facts materially increase the risk beyond that which Guarantor intends to
assume, or have reason to believe that such facts are unknown to Guarantor, or
have a reasonable opportunity to communicate such facts to Guarantor, since
Guarantor acknowledges that Guarantor is fully responsible for being and keeping
informed of the financial condition of Borrower and the other Portfolio Entities
and of all circumstances bearing on the risk of non-payment or non-performance
of any obligations and liabilities hereby guaranteed, (j) the fact that
Guarantor may at any time in the future dispose of all or part of its direct or
indirect interest in Borrower or any other Portfolio Entity, (k) any defense
based on any change in the time, manner or place of any payment or performance
under, or in any other term of, the Credit Documents or any other amendment,
renewal, extension, acceleration, compromise or waiver of or any consent or
departure from the terms of the Credit Documents, (l) any defense arising
because of Administrative Agent's or the Banks' election, in any proceeding
instituted under the Federal Bankruptcy Code, of the application of Section
1111(b)(2) of the Federal Bankruptcy Code, and (m) any defense based upon any
borrowing or grant of a security interest under Section 364 of the Federal
Bankruptcy Code.
5. Subordination. Except as otherwise specifically provided in
this Guaranty, all existing and future indebtedness of Borrower or any other
Portfolio Entity to Guarantor (except to the extent such indebtedness consists
of approved operating expenses or other O&M Costs with respect to materials or
services provided consistent with an applicable Annual Operating Budget) and the
right of Guarantor to withdraw any capital invested by Guarantor in Borrower or
any other Portfolio Entity, is hereby subordinated to all obligations and
liabilities hereby guaranteed. Without the prior written consent of
Administrative Agent, such subordinated indebtedness shall not be paid or
withdrawn in whole or in part, nor shall Guarantor accept any payment of or on
account of any such indebtedness or as
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a withdrawal of capital while the Credit Documents are in effect. Any payment by
Borrower or any other Portfolio Entity in violation of this Guaranty shall be
received by Guarantor in trust for Administrative Agent and the Banks, and
Guarantor shall cause the same to be paid to Administrative Agent for the
benefit of the Banks immediately upon demand by Administrative Agent on account
of Borrower's and the other Portfolio Entities' obligations and liabilities
hereby guaranteed. Guarantor shall not assign all or any portion of such
indebtedness while the Credit Documents remain in effect except upon prior
written notice to Administrative Agent by which the assignee of any such
indebtedness agrees that the assignment is made subject to the terms of this
Guaranty, and that any attempted assignment of such indebtedness in violation of
the provisions hereof shall be void.
6. Subrogation. So long as the Credit Documents remain in
effect, (a) Guarantor shall not have any right of subrogation and waives all
rights to enforce any remedy which the Banks now have or may hereafter have
against Borrower or any other Portfolio Entity, and waives the benefit of, and
all rights to participate in, any security now or hereafter held by
Administrative Agent or the Banks from Borrower or any other Portfolio Entity
and (b) Guarantor waives any claim, right or remedy which Guarantor may now have
or hereafter acquire against Borrower or any other Portfolio Entity that arises
hereunder and/or from the performance by Guarantor hereunder including, without
limitation, any claim, remedy or right of subrogation, reimbursement,
exoneration, contribution, indemnification, or participation in any claim, right
or remedy of the Banks against Borrower or any other Portfolio Entity, or any
security which the Banks now have or hereafter acquire, whether or not such
claim, right or remedy arises in equity, under contract, by statute, under
common law or otherwise.
7. Bankruptcy.
(a) So long as the Credit Documents remain in effect,
Guarantor shall not, without the prior written consent of Administrative Agent,
commence, or join with any other Person in commencing, any bankruptcy,
reorganization, or insolvency proceeding against Borrower or any other Portfolio
Entity. The obligations of Guarantor under this Guaranty shall not be altered,
limited or affected by any proceeding, voluntary or involuntary, involving the
bankruptcy, reorganization, insolvency, receivership, liquidation or arrangement
of Borrower or any other Portfolio Entity, or by any defense which Borrower or
any other Portfolio Entity may have by reason of any order, decree or decision
of any court or administrative body resulting from any such proceeding.
(b) So long as the Credit Documents remain in effect,
to the extent of any Guaranteed Obligations, Guarantor shall file, in any
bankruptcy or other proceeding in which the filing of claims is required or
permitted by law, all claims which Guarantor may have against Borrower or any
other Portfolio Entity relating to any indebtedness of Borrower or any other
Portfolio Entity to Guarantor, and hereby assigns to Administrative Agent on
behalf of the Banks all rights of Guarantor thereunder. If Guarantor does not
file any such claim, Administrative Agent, as attorney-in-fact for Guarantor, is
hereby authorized to do so in the name of Guarantor or, in Administrative
Agent's discretion, to assign the claim to a nominee and to cause proofs of
claim to be filed in the name of Administrative Agent's nominee. The foregoing
power of attorney is coupled with an interest and cannot be revoked.
Administrative Agent or its nominee shall have the sole right to accept or
reject any plan proposed in any such proceeding and to take any other action
which a party filing a claim is entitled to take. In all such cases, whether in
administration, bankruptcy or otherwise, the person authorized to pay such a
claim shall pay the same to Administrative Agent to the extent of any Guaranteed
Obligations which then remain unpaid, and, to the full extent necessary for that
purpose, Guarantor hereby assigns to Administrative Agent all of Guarantor's
rights to all such payments or distributions to which Guarantor would otherwise
be entitled; provided, however, that Guarantor's obligations hereunder shall not
be satisfied except to the extent that Administrative Agent receives cash by
reason of any such payment or
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distribution. If Administrative Agent receives anything hereunder other than
cash, the same shall be held as collateral for amounts due under this Guaranty.
8. Successions or Assignments.
(a) This Guaranty shall inure to the benefit of the
successors or assigns of the Banks who shall have, to the extent of their
interest, the rights of the Banks hereunder; provided, however, that the rights
of the Banks hereunder, if any be retained by them, shall have priority over and
be senior to the rights of its successors or assigns unless Administrative Agent
shall otherwise elect.
(b) This Guaranty is binding upon Guarantor and its
successors and assigns. Guarantor is not entitled to assign its obligations
hereunder to any other person without the written consent of Administrative
Agent, and any purported assignment in violation of this provision shall be
void.
9. Waivers.
(a) No delay on the part of Administrative Agent or
the Banks in exercising any of their rights (including those hereunder) and no
partial or single exercise thereof and no action or non-action by Administrative
Agent or the Banks, with or without notice to Guarantor or anyone else, shall
constitute a waiver of any rights or shall affect or impair this Guaranty.
(b) GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY OR
RELATING TO THE SUBJECT MATTER OF THIS GUARANTY AND THE RELATIONSHIP BETWEEN
GUARANTOR AND ADMINISTRATIVE AGENT THAT IS BEING ESTABLISHED. GUARANTOR
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT ADMINISTRATIVE AGENT HAS ALREADY RELIED ON THE WAIVER IN
ENTERING INTO THIS GUARANTY, AND THAT ADMINISTRATIVE AGENT WILL CONTINUE TO RELY
ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. GUARANTOR FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.
10. Interpretation. The section headings in this Guaranty are
for the convenience of reference only and shall not affect the meaning or
construction of any provision hereof.
11. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be considered as
properly given (a) if delivered in person, (b) if sent by overnight delivery
service by the addressee, except that communication or notice so transmitted by
telecopy or other direct written electronic means shall be deemed to have been
validly and effectively given on the day (if a Bank Day and, if not, on the next
following Banking Day) on which it is transmitted if transmitted before 4:00
p.m., recipient's time, and if transmitted after that time, on the next
following Banking Day; provided, however, that if any notice is tendered to an
addressee and the delivery thereof is refused by such addressee, such notice
shall be effective upon such tender. Any party shall have the right to change
its address for notice hereunder to any other location within the continental
United States by giving of 30 days' notice to the other parties in the manner
set forth hereinabove.
12. Amendments. This Guaranty may be amended only with the
written consent of the parties hereto.
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13. Jurisdiction; Governing Law.
(a) Any action or proceeding relating in any way to
this Guaranty may be brought and enforced in the courts of the State of New York
or of the United States for the Southern District of New York. Any such process
or summons in connection with any such action or proceeding may be served by
mailing a copy thereof by certified or registered mail, or any substantially
similar form of mail, addressed to Guarantor as provided for notices hereunder.
(b) This Guaranty and the rights and obligations of
Administrative Agent and of Guarantor shall be governed by and construed in
accordance with the law of the State of New York without reference to principles
of conflicts of laws (other than Section 5-1401 of the New York General
Obligations Law).
14. Integration of Terms. This Guaranty contains the entire
agreement between Guarantor and the Banks relating to the subject matter hereof
and supersedes all oral statements and prior writing with respect hereto.
15. Addresses.
(a) The address of Guarantor for notices is:
________________________________________
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
(b) The address of Administrative Agent for notices
is:
Credit Suisse First Boston,
New York Branch
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Portfolio Management
Telephone No.(▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
16. Interest; Collection Expenses. Any amount required to be
paid by Guarantor pursuant to the terms hereof shall bear interest at the
Default Rate or the maximum rate permitted by law, whichever is less, from the
date due until paid in full. If Administrative Agent or the Banks are required
to pursue any remedy against Guarantor hereunder, Guarantor shall pay to
Administrative Agent or the Banks, as the case may be, upon demand, all
reasonable attorneys' fees and expenses all other costs and expenses incurred by
Administrative Agent or the Banks in enforcing this Guaranty.
17. Termination; Reinstatement of Guaranty. Upon the
indefeasible payment in full of all Guaranteed Obligations owing under the
Credit Documents, this Guaranty shall terminate in its entirety. Notwithstanding
the foregoing, this Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment to or on behalf of Borrower, the
other Portfolio Entities or to Administrative Agent by Borrower, any other
Portfolio Entity or any other Person in respect of the
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Guaranteed Obligations or by Guarantor hereunder is rescinded or must otherwise
be returned by Administrative Agent upon the insolvency, bankruptcy,
reorganization, dissolution or liquidation of Borrower or any other Portfolio
Entity or otherwise, all as though such payment had not been made.
18. Counterparts. The Guaranty may be executed in one or more
duplicate counterparts, and when executed and delivered by all of the parties
listed below shall constitute a single binding agreement.
19. No Benefit to Borrower or other Portfolio Entities. This
Guaranty is for the benefit of only Administrative Agent and is not for the
benefit of Borrower or any other Portfolio Entity. Notwithstanding that,
pursuant to the Credit Documents, Guarantor may treat any amounts actually paid
hereunder as a loan to Borrower or the relevant Portfolio Entity, but this
Guaranty shall not be deemed to be a contract to make a loan, or extend other
debt financing or financial accommodation, for the benefit of Borrower, in each
case within the meaning of Section 365(e) of the Federal Bankruptcy Code.
20. Scope of Liability. Notwithstanding anything herein to the
contrary, recourse against Guarantor, the other Portfolio Entities, the Member
and their respective Affiliates, members, partners, stockholders, officers,
directors and employees under this Guaranty shall be limited to the extent
provided in Article 9 of the Credit Agreement.
[REMINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be
duly executed and delivered as of the day and year first written above.
---------------------------------,
a Delaware
---------------------
By:
-------------------------------------------------
Name:
Title:
Agreed and accepted.
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH,
as Administrative Agent
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
327
Exhibit D-3
FORM OF DEED OF TRUST
This DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT, dated
as of ___________, 200__ (this "Deed of Trust") BY _________________, a Delaware
__________ ("Trustor"), whose address is ___________________________, to [TITLE
COMPANY], as trustee ("Trustee"), whose address is [TC ADDRESS], for the benefit
of CREDIT SUISSE FIRST BOSTON, acting through its New York Branch, as
Administrative Agent for the Banks (as defined below) (together with its
successors and assigns, "Beneficiary"), whose address is Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
[FORM DEED OF TRUST INCORPORATES PROVISIONS FOR BOTH FEE AND LEASEHOLD DEED
OF TRUST. LOCAL COUNSEL TO SUPPLEMENT AS NECESSARY TO COMPLY WITH LOCAL LAW.]
Recitals
A. Calpine Construction Finance Company II, LLC, a Delaware limited
liability company (the "Borrower"), Credit Suisse First Boston, acting through
its New York Branch, as Lead Arranger and Administrative Agent ("Administrative
Agent"), The Bank of Nova Scotia, as Lead Arranger, Co-Syndication Agent and
Bookrunner, Banc of America Securities LLC, as Arranger and Co-Syndication
Agent, ING (U.S.) Capital LLC, as Arranger and Co-Syndication Agent, Bayerische
Landesbank Girozentrale, as Arranger, Co-Documentation Agent and LC Bank, CIBC
World Markets Corp., as Arranger and Co-Documentation Agent, Dresdner Kleinwort
▇▇▇▇▇▇ North America Services LLC, as Arranger and Co-Documentation Agent and TD
Securities (USA) Inc., as Arranger and Co-Documentation Agent, and the financial
institutions listed in Exhibit H thereto, (together with their respective
successors and assigns, the "Banks") have entered into a Credit Agreement, dated
as of October 16, 2000 (as modified, supplemented or amended from time to time,
the "Credit Agreement"), pursuant to which the Banks have agreed to lend to
Borrower Two Billion Five Hundred Million Dollars ($2,500,000,000) for the
purpose of purchasing turbines and purchasing, constructing, owning and
operating various power projects. Borrower intends to loan certain proceeds of
the Credit Agreement to Trustor for Trustor's payment of project costs
associated with the Project (as defined below). Capitalized terms used in this
Deed of Trust and not otherwise defined herein shall have the meanings assigned
to them in the Credit Agreement.
B. Trustor and Administrative Agent on behalf of the Banks have entered
into the Project Owner Guaranty dated as of _____, 200_ (the "Guaranty")
pursuant to which Trustor has guaranteed, among other things, the obligations of
each of the other Portfolio Entities under the Credit Documents, including
Borrower's obligations under the Credit Agreement and the other Credit Documents
to which Borrower is a party.
C. The Banks are willing to make the Loans and make other financial
accommodations in accordance with the Credit Documents, but in each case only
upon the condition, among others,
328
that Trustor secure its obligations under the Guaranty and the other Credit
Documents with various items of real and personal property owned by Trustor.
D. As set forth more fully below, Trustor intends to secure its payment
and performance of its obligations under the Guaranty and the other Credit
Documents with the Trust Estate (as defined below), along with various other
items of personal and real property owned by Trustor.
Agreement
NOW, THEREFORE, to secure the prompt and complete payment when and as
due and payable of all of the obligations and liabilities of Trustor to
Beneficiary and the Banks, by acceleration or otherwise, arising out of or in
connection with the Credit Agreement, the Guaranty executed by Trustor in favor
of Beneficiary, the other Credit Documents and the obligations of Trustor set
forth herein (collectively, the "Secured Obligations"; provided, however, the
Secured Obligations shall not include any obligations and liabilities of Trustor
to Beneficiary and the Banks relating to or arising from Projects (as defined in
the Credit Agreement) that have achieved Operation prior to the effective date
of this Deed of Trust), and in consideration of the covenants herein contained
and in the Guaranty, Trustor, intending to be legally bound, does hereby grant,
bargain, sell, convey, warrant, assign, transfer, mortgage, pledge, set over and
confirm unto Trustee in trust for Beneficiary as set forth in this Deed of
Trust, for the benefit of Beneficiary and the Banks, all of Trustor's estate,
right, title, interest, property, claim and demand, now or hereafter arising, in
and to the following property and rights (herein collectively called the "Trust
Estate"):
(a) Trustor's interest in and to the lands and premises more
particularly described in Exhibit A herein (the "Premises") [TRUSTOR'S
INTEREST UNDER THE GROUND LEASE (AS MODIFIED, SUPPLEMENTED OR AMENDED
FROM TIME TO TIME, THE "GROUND LEASE") EXECUTED ON __________ BETWEEN
____________ AND TRUSTOR, AND THE LEASEHOLD ESTATE CREATED THEREBY AND
ALL OTHER RIGHTS OF TRUSTOR UNDER THE GROUND LEASE, WHEREBY TRUSTOR
LEASES THE LANDS AND PREMISES MORE PARTICULARLY DESCRIBED IN EXHIBIT A
HERETO, (THE "LEASED PREMISES")], together with all and singular the
tenements, hereditaments and appurtenances thereto, and also Trustor's
rights in and to (i) any land lying within the right-of-way of any
streets, open or proposed, adjoining the same, (ii) any easements,
natural gas pipelines, rights-of-way and rights used in connection
therewith or as a means of access thereto, including, without
limitation, the easements described in Exhibit B hereto, all easements
for ingress and egress and easements for water and sewage pipelines,
running in favor of Trustor, or appurtenant to the [LEASED] Premises,
[OR ARISING UNDER THE GROUND LEASE] (collectively, the "Easements"),
(iii) any and all sidewalks, alleys, strips and gores of land adjacent
thereto or used in connection therewith (the [LEASED] Premises, the
Easements and all of the foregoing being hereinafter collectively
called the "Site"), [AND (iv) ALL RIGHTS OF TRUSTOR TO EXERCISE ANY
ELECTION OR OPTION TO MAKE ANY DETERMINATION OR TO GIVE ANY NOTICE,
CONSENT, WAIVER OR APPROVAL OR TO TAKE ANY OTHER ACTION UNDER THE
GROUND LEASE];
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329
(b) all buildings, structures, fixtures and other improvements
now or hereafter erected on the Site owned by Trustor, including the
Project (collectively, the "Improvements");
(c) all machinery, apparatus, equipment, fittings, fixtures,
boilers, turbines and other articles of personal property, including
all goods and all goods which become fixtures, now owned or hereafter
acquired by Trustor and now or hereafter located on, attached to or
used in the operation of or in connection with the Site and/or the
Improvements, and all replacements thereof, additions thereto and
substitutions therefor, to the fullest extent permitted by applicable
law (all of the foregoing being hereinafter collectively called the
"Equipment");
(d) all raw materials, work in process and other materials
used or consumed in the construction of, or now or hereafter located on
or used in connection with, the Site, the Improvements and the
Equipment, (including, without limitation, fuel and fuel deposits, now
or hereafter located on the Site or elsewhere or otherwise owned by
Trustor) (the above items, together with the Equipment, being
hereinafter collectively called the "Tangible Collateral");
(e) all rights, powers, privileges and other benefits of
Trustor (to the extent assignable) now or hereafter obtained by Trustor
from any Governmental Authority, including, without limitation, Permits
issued in the name of Trustor, governmental actions relating to the
ownership, operation, management and use of the Site, the development
and financing of the Project, the Improvements and the Equipment, and
any improvements, modifications or additions thereto;
(f) all the lands and interests in lands, tenements and
hereditaments hereafter acquired by Trustor in connection with or
appurtenant to the Site, including (without limitation) all interests
of Trustor, whether as lessor or lessee, in any leases of land
hereafter made and all rights of Trustor thereunder;
(g) any and all other property in connection with or
appurtenant to the Site that may from time to time, by delivery or by
writing of any kind, be subjected to the lien hereof by Trustor or by
anyone on its behalf or with its consent, or which may come into the
possession or be subject to the control of Trustee or Beneficiary
pursuant to this Deed of Trust, being hereby collaterally assigned to
Beneficiary and subjected or added to the lien or estate created by
this Deed of Trust forthwith upon the acquisition thereof by Trustor,
as fully as if such property were now owned by Trustor and were
specifically described in this Deed of Trust and subjected to the lien
and security interest hereof; and Trustee and Beneficiary is hereby
authorized to receive any and all such property as and for additional
security hereunder; and
(h) all the remainder or remainders, reversion or reversions,
rents, revenues, issues, profits, royalties, income and other benefits
derived from any of the foregoing, all of which are hereby assigned to
Beneficiary, who is hereby authorized to collect and receive
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330
the same, to give proper receipts and acquittances therefor and to
apply the same in accordance with the provisions of this Deed of Trust.
[INCORPORATE PARTICULAR ITEMS OF PROPERTY RELATING TO THE
PROJECT IN QUESTION INTO COLLATERAL DESCRIPTION]
TO HAVE AND TO HOLD the said Trust Estate, whether now owned or held or
hereafter acquired, unto Beneficiary, its successors and assigns, pursuant to
the provisions of this Deed of Trust.
IT IS HEREBY COVENANTED, DECLARED AND AGREED that the lien, security
interest or estate created by this Deed of Trust to secure the payment of the
Secured Obligations, both present and future, shall be first, prior and superior
to any Lien, security interest, reservation of title or other interest
heretofore, contemporaneously or subsequently suffered or granted by Trustor,
its legal representatives, successors or assigns, except only those, if any,
expressly hereinafter referred to and that the Trust Estate is to be held, dealt
with and disposed of by Beneficiary, upon and subject to the terms, covenants,
conditions, uses and agreements set forth in this Deed of Trust.
PROVIDED ALWAYS, that upon payment in full of the Secured Obligations
in accordance with the terms and provisions hereof and of the other Credit
Documents and the observance and performance by Trustor of its covenants and
agreements set forth herein and therein, then this Deed of Trust and the estate
hereby and therein granted shall cease and be void and shall be reconveyed as
provided herein below.
ARTICLE 1 - DEFINITIONS
1.1 Defined Terms. Capitalized terms used in this Deed of Trust and not
otherwise defined herein shall have the meanings assigned to them in the Credit
Agreement. Any term defined by reference to an agreement, instrument or other
document shall have the meaning so assigned to it whether or not such document
is in effect. In addition, for purposes of this Deed of Trust, the following
definitions shall apply:
"Credit Agreement" has the meaning ascribed to it in Recital A
hereof.
"Easements " has the meaning ascribed to it in the Granting
Clauses.
"Equipment" has the meaning ascribed to it in the Granting
Clauses.
["GROUND LEASE" HAS THE MEANING ASCRIBED TO IT IN THE GRANTING
CLAUSES.]
"Guaranty" has the meaning ascribed to it in Recital B hereof.
"Improvements" has the meaning ascribed to it in the Granting
Clauses.
["LEASED PREMISES" HAS THE MEANING ASCRIBED TO IT IN THE
GRANTING CLAUSES.]
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"Premises" has the meaning ascribed to it in the Granting
Clauses.
"Proceeds" has the meaning assigned to it under the UCC and,
in any event, shall include, without limitation, (i) any and all proceeds of any
insurance (including, without limitation, property casualty and title
insurance), indemnity, warranty or guaranty payable from time to time with
respect to any of the Site; (ii) any and all proceeds in the form of accounts
(as such term is defined in the UCC), security deposits, tax escrows (if any),
down payments (to the extent the same may be pledged under applicable law),
collections, contract rights, documents, instruments, chattel paper, liens and
security instruments, guaranties or general intangibles relating in whole or in
part to the Site and all rights and remedies of whatever kind or nature Trustor
may hold or acquire for the purpose of securing or enforcing any obligation due
Trustor thereunder.
"Project" means that certain _____MW (approximately) power
generating facility located at ___________, as more particularly described on
Exhibit G-__ to the Credit Agreement.
"Secured Obligations" has the meaning ascribed to it in the
Granting Clauses.
"Site" has the meaning ascribed to it in the Granting Clauses.
"Tangible Collateral" has the meaning ascribed to it in the
Granting Clauses.
"Trust Estate" has the meaning ascribed to it in the Granting
Clauses.
1.2 Accounting Terms. As used herein and in any certificate or other
document made or delivered pursuant hereto, accounting terms not defined herein
shall have the respective meanings given to them under GAAP.
1.3 The Rules of Interpretation. The rules of interpretation as set
forth in the Credit Agreement shall govern the terms, conditions and provisions
hereof. In the event of any conflict between those set forth in this Deed of
Trust and the Credit Agreement, the latter shall be deemed controlling and shall
preempt the former.
ARTICLE 2 - GENERAL COVENANTS AND PROVISIONS
2.1 Trustor Performance of Credit Documents. Trustor shall perform,
observe and comply with each and every provision hereof, and with each and every
provision contained in the Credit Documents and shall promptly pay to
Beneficiary, when payment shall become due under the Guaranty, the principal
with interest thereon and all other sums required to be paid by Trustor under
this Deed of Trust and the other Credit Documents at the time and in the manner
provided in the Credit Documents.
2.2 General Representations, Covenants and Warranties. Trustor, to the
best of its knowledge, represents, covenants and warrants that as of the date
hereof: (a) Trustor has good and marketable title to the Site [, INCLUDING THE
GROUND LEASE AND THE LEASEHOLD ESTATE CREATED THEREBY], free and clear of all
encumbrances except the title exceptions set forth on Exhibit C
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hereto and that it has the right to hold, occupy and enjoy its interest in the
[LEASED] Premises [ON AND SUBJECT TO THE TERMS AND CONDITIONS OF THE GROUND
LEASE], and has good right, full power and lawful authority to mortgage and
pledge the same as provided herein and Beneficiary may at all times peaceably
and quietly enter upon, hold, occupy and enjoy the entire [LEASED] Premises in
accordance with the terms hereof; (b) all costs arising from construction of any
improvements, the performance of any labor and the purchase of all Tangible
Collateral and Improvements have been or shall be paid when due; (c) the Site
has access for ingress and egress to dedicated street(s); and (d) no material
part of the [LEASED] Premises has been damaged, destroyed, condemned or
abandoned.
2.3 Compliance with Legal Requirements. Trustor shall promptly, fully,
and faithfully comply with all Legal Requirements relating to its use and
occupancy of the [LEASED] Premises, whether or not such compliance requires work
or remedial measures that are ordinary or extraordinary, foreseen or unforeseen,
structural or nonstructural, or that interfere with the use or enjoyment of the
[LEASED] Premises.
2.4 Insurance; Application of Insurance Proceeds; Application of
Eminent Domain Proceeds.
2.4.1 Trustor shall at its sole expense obtain for, deliver
to, assign and maintain for the benefit of Beneficiary, during the term of this
Deed of Trust, insurance policies insuring the Site and liability insurance
policies, all in accordance with the requirements of Section 5.18 of the Credit
Agreement. Trustor shall pay promptly when due any premiums on such insurance
policies and on any renewals thereof. In the event of the foreclosure of this
Deed of Trust or any other transfer of the [LEASED] Premises in extinguishment
of the indebtedness and other sums secured hereby, all right, title and interest
of Trustor in and to all casualty insurance policies, and renewals thereof then
in force, shall pass to the purchaser or grantee in connection therewith;
provided that Trustor's obligations shall be reduced accordingly.
2.4.2 All insurance proceeds and all Eminent Domain Proceeds
shall be paid and/or shall be applied in accordance with the provisions of the
Credit Documents, including, without limitation, Sections 7.5 and 7.6 of the
Credit Agreement.
2.5 Assignment of Rents. Trustor unconditionally and absolutely assigns
to Beneficiary all of Trustor's right, title and interest in and to: all leases,
subleases, occupancy agreements, licenses, rental contracts and other agreements
now or hereafter existing relating to the use or occupancy of the Premises,
together with all guarantees, modifications, extensions and renewals thereof;
and all rents, issues, profits, income and proceeds due or to become due from
tenants of the Premises (the "Leases"), including rentals and all other payments
of any kind under any leases now existing or hereafter entered into, together
with all deposits (including security deposits) of tenants thereunder. This is
an absolute assignment to Beneficiary and not an assignment as security for the
performance of the obligations under the Credit Documents, or any other
indebtedness. Subject to the provisions of herein below, Beneficiary shall have
the right, power and authority to: notify any person that the Leases have been
assigned to Beneficiary and that all rents and other obligations are to be paid
directly to Beneficiary, whether or not Beneficiary has commenced or completed
foreclosure or taken possession of the Premises; settle compromise,
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release, extend the time of payment of, and make allowances, adjustments and
discounts of any rents or other obligations under the Leases; enforce payment of
rents and other rights under the Leases, prosecute any action or proceeding ,
and defend against any claim with respect to rents and Leases; enter upon, take
possession of and operate the Premises, lease all or any part of the Premises;
and/or perform any and all obligations of Trustor under the Leases and exercise
any and all rights of Trustor therein contained to the full extent of Trustor's
rights and obligations thereunder, with or without the bringing of any action or
the appointment of a receiver. At Beneficiary's request, Trustor shall deliver a
copy of this Deed of Trust to each tenant under a Lease. Trustor irrevocably
directs any tenant, without any requirement for notice to or consent by Trustor,
to comply with all demands of Beneficiary under this Section 2.5 and to turn
over to Beneficiary on demand all rents which it receives. Beneficiary shall
have the right, but not the obligation, to use and apply all rents received
hereunder in such order and such manner as Beneficiary may determine in
accordance with the Credit Agreement. Notwithstanding that this is an absolute
assignment of the rents and Leases and not merely the collateral assignment of,
or the grant of a lien or security interest in the rents and Leases, Beneficiary
grants to Trustor a revocable license to collect and receive the rents and to
retain, use and enjoy such rents. Such license may be revoked by Beneficiary
only upon the occurrence of any Event of Default. Trustor shall apply any rents
which it receives to the payment due under the Secured Obligations, taxes,
assessments, water charges, sewer rents and other governmental charges levied,
assessed or imposed against the Premises, insurance premiums, and other
obligations of lessor under the Leases before using such proceeds for any other
purpose. [UNLESS APPLICABLE (IN WHICH CASE DEFINED TERM "PREMISES" TO BE CHANGED
TO "LEASED PREMISES"), DELETE IF SITE IS HELD VIA LEASE].
[2.5 REJECTION OF GROUND LEASE BY LESSOR. TO THE EXTENT APPLICABLE, IF
THE LESSOR UNDER THE GROUND LEASE REJECTS OR DISAFFIRMS THE GROUND LEASE OR
PURPORTS OR SEEKS TO DISAFFIRM THE GROUND LEASE PURSUANT TO ANY BANKRUPTCY LAW,
THEN:
2.5.1 TO THE EXTENT PERMITTED BY LAW OR GOVERNMENTAL RULE,
TRUSTOR SHALL REMAIN IN POSSESSION OF THE LEASED PREMISES DEMISED UNDER THE
GROUND LEASE AND SHALL PERFORM ALL ACTS REASONABLY NECESSARY FOR TRUSTOR TO
REMAIN IN SUCH POSSESSION FOR THE UNEXPIRED TERM OF SUCH GROUND LEASE (INCLUDING
ALL RENEWALS), WHETHER THE THEN EXISTING TERMS AND PROVISIONS OF SUCH GROUND
LEASE REQUIRE SUCH ACTS OR OTHERWISE; AND
2.5.2 ALL THE TERMS AND PROVISIONS OF THIS DEED OF TRUST AND
THE LIEN CREATED BY THIS DEED OF TRUST SHALL REMAIN IN FULL FORCE AND EFFECT AND
SHALL EXTEND AUTOMATICALLY TO ALL OF TRUSTOR'S RIGHTS AND REMEDIES ARISING AT
ANY TIME UNDER, OR PURSUANT TO, SECTION 365(h) OF THE BANKRUPTCY CODE, INCLUDING
ALL OF TRUSTOR'S RIGHTS TO REMAIN IN POSSESSION OF THE LEASED PREMISES.]
2.6 Expenses. Trustor shall indemnify Beneficiary with respect to any
transaction or matter in any way connected with any portion of the Site, or
Trustor's use, occupancy, or operation of the Site in accordance with Section
5.11 of the Credit Agreement.
2.7 Beneficiary Assumes No Secured Obligations. It is expressly agreed
that, anything herein contained to the contrary notwithstanding, Trustor shall
remain obligated under all
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agreements which are included in the definition of "Trust Estate" and shall
perform all of its obligations thereunder in accordance with the provisions
thereof, and neither Beneficiary nor any of the Banks shall have any obligation
or liability with respect to such obligations of Trustor, nor shall Beneficiary
or any of the Banks be required or obligated in any manner to perform or fulfill
any obligations or duties of Trustor under such agreements, or to make any
payment or to make any inquiry as to the nature or sufficiency of any payment
received by it, or to present or file any claim or take any action to collect or
enforce the payment of any amounts which have been assigned to Beneficiary
hereunder or to which Beneficiary or the Banks may be entitled at any time or
times.
2.8 Further Assurances. Trustor shall, from time to time, at its
expense, promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or that Trustee or Beneficiary
may reasonably request, in order to perfect and continue the lien and security
interest granted hereby and to enable Beneficiary to obtain the full benefits of
the lien and security interest granted or intended to be granted hereby. Trustor
shall keep the Trust Estate free and clear of all Liens, other than Permitted
Liens. Without limiting the generality of the foregoing, Trustor shall execute
and record or file this Deed of Trust and each amendment hereto, and such
financing or continuation statements, or amendments thereto, and such other
instruments, endorsements or notices, as may be necessary, or as Beneficiary or
Trustee may reasonably request, in order to perfect and preserve the lien and
security interest granted or purported to be granted hereby. Trustor hereby
authorizes Beneficiary to file one or more financing statements or continuation
statements, and amendments thereto, relative to all or any part of the Trust
Estate necessary to preserve or protect the lien and security interest granted
hereby without the signature of Trustor where permitted by law.
2.9 Acts of Trustor. Except as provided in or permitted by the Credit
Documents, Trustor hereby represents and warrants that it has not mortgaged,
hypothecated, assigned or pledged and hereby covenants that it will not
mortgage, hypothecate, assign or pledge, so long as this Deed of Trust shall
remain in effect, any of its right, title or interest in and to the Trust Estate
or any part thereof, to anyone other than Beneficiary.
2.10 After-Acquired Property. Any and all of the Trust Estate which is
hereafter acquired shall immediately, without any further conveyance, assignment
or act on the part of Trustor or Beneficiary, become and be subject to the lien
and security interest of this Deed of Trust as fully and completely as though
specifically described herein, but nothing contained in this Section 2.10 shall
be deemed to modify or change the obligations of Trustor under Section 2.8
hereof. If and whenever from time to time Trustor shall hereafter acquire any
real property or interest therein which constitutes or is intended to constitute
part of the Trust Estate hereunder, Trustor shall promptly give notice thereof
to Beneficiary and Trustor shall forthwith execute, acknowledge and deliver to
Beneficiary a supplement to this Deed of Trust in form and substance reasonably
satisfactory to Beneficiary subjecting the property so acquired to the lien of
this Deed of Trust. At the same time, if Beneficiary so requests, Trustor shall
deliver to Beneficiary an endorsement to the lender's policy of title insurance
issued to Beneficiary insuring the lien of this Deed of Trust which shall insure
to Beneficiary in form and substance satisfactory to Beneficiary that the lien
of this Deed of Trust as insured under such title insurance policy encumber such
later acquired property and that Trustor's title to such property meets all of
the applicable requirements
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of the Credit Documents with respect to title to Trustor's real property. [TO BE
AMENDED IF LOCAL TITLE RULES PRECLUDE SUCH ENDORSEMENT TO TITLE POLICY.]
2.11 Site.
2.11.1 [TRUSTOR SHALL PAY OR CAUSE TO BE PAID ALL RENT AND
OTHER CHARGES REQUIRED UNDER THE GROUND LEASE AS AND WHEN THE SAME ARE DUE AND
SHALL PROMPTLY AND FAITHFULLY PERFORM OR CAUSE TO BE PERFORMED ALL OTHER
MATERIAL TERMS, OBLIGATIONS, COVENANTS, CONDITIONS, AGREEMENTS, INDEMNITIES AND
LIABILITIES OF TRUSTOR UNDER THE GROUND LEASE.] Trustor shall observe all
applicable covenants, easements and other restrictions of record with respect to
the Site, the Easements or to any other part of the Trust Estate, in all
material respects.
2.11.2 [TRUSTOR SHALL DO, OR CAUSE TO BE DONE, ALL THINGS
NECESSARY TO PRESERVE AND KEEP UNIMPAIRED ALL RIGHTS OF TRUSTOR AS LESSEE UNDER
THE GROUND LEASE, AND TO PREVENT ANY DEFAULT UNDER THE GROUND LEASE, OR ANY
TERMINATION, SURRENDER, CANCELLATION, FORFEITURE, SUBORDINATION OR IMPAIRMENT
THEREOF. TRUSTOR DOES HEREBY AUTHORIZE AND IRREVOCABLY APPOINT AND CONSTITUTE
BENEFICIARY AS ITS TRUE AND LAWFUL ATTORNEY-IN-FACT, WHICH APPOINTMENT IS
COUPLED WITH AN INTEREST, IN ITS NAME, PLACE AND STEAD, TO TAKE ANY AND ALL
ACTIONS DEEMED NECESSARY OR DESIRABLE BY BENEFICIARY TO PERFORM AND COMPLY WITH
ALL THE OBLIGATIONS OF TRUSTOR UNDER THE GROUND LEASE, AND TO DO AND TAKE UPON
THE OCCURRENCE AND DURING CONSTRUCTION OF AN EVENT OF DEFAULT, BUT WITHOUT ANY
OBLIGATION SO TO DO OR TAKE, ANY ACTION WHICH BENEFICIARY DEEMS REASONABLY
NECESSARY TO PREVENT OR CURE ANY DEFAULT BY TRUSTOR UNDER THE GROUND LEASE, TO
ENTER INTO AND UPON THE SITE OR ANY PART THEREOF AS PROVIDED IN THE CREDIT
DOCUMENTS IN ORDER TO PREVENT OR CURE ANY DEFAULT OF TRUSTOR PURSUANT THERETO,
TO THE END THAT THE RIGHTS OF TRUSTOR IN AND TO THE LEASEHOLD ESTATE CREATED BY
THE GROUND LEASE SHALL BE KEPT FREE FROM DEFAULT.]
2.11.3 [TRUSTOR SHALL USE ALL REASONABLE EFFORTS TO ENFORCE
THE OBLIGATIONS OF THE LESSOR UNDER THE GROUND LEASE IN A COMMERCIALLY
REASONABLE MANNER.]
2.11.4 [TRUSTOR SHALL NOT VOLUNTARILY SURRENDER ITS LEASEHOLD
ESTATE AND INTEREST UNDER THE GROUND LEASE OR MODIFY, CHANGE, SUPPLEMENT, ALTER
OR AMEND THE GROUND LEASE OR AFFIRMATIVELY WAIVE ANY PROVISIONS THEREOF, EITHER
ORALLY OR IN WRITING, EXCEPT AS PERMITTED IN THE CREDIT DOCUMENTS, AND ANY
ATTEMPT ON THE PART OF TRUSTOR TO DO ANY OF THE FOREGOING WITHOUT THE WRITTEN
CONSENT OF BENEFICIARY SHALL BE NULL AND VOID.]
2.11.5 [IF ANY ACTION OR PROCEEDING SHALL BE INSTITUTED TO
EVICT TRUSTOR OR TO RECOVER POSSESSION OF THE SITE OR ANY PART THEREOF OR
INTEREST THEREIN FROM TRUSTOR OR ANY ACTION OR PROCEEDING OTHERWISE AFFECTING
THE SITE OR THIS DEED OF TRUST SHALL BE INSTITUTED, THEN TRUSTOR SHALL,
IMMEDIATELY AFTER RECEIPT, DELIVER TO BENEFICIARY A TRUE AND COMPLETE COPY OF
EACH PETITION, SUMMONS, COMPLAINT, NOTICE OF MOTION, ORDER TO SHOW CAUSE AND ALL
OTHER PLEADINGS AND PAPERS, HOWEVER DESIGNATED, SERVED IN ANY SUCH ACTION OR
PROCEEDING.]
2.11.6 [TRUSTOR COVENANTS AND AGREES THAT THE FEE TITLE TO THE
SITE AND THE LEASEHOLD ESTATE CREATED UNDER THE GROUND LEASE SHALL NOT MERGE BUT
SHALL ALWAYS REMAIN
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SEPARATE AND DISTINCT, NOTWITHSTANDING THE UNION OF SAID ESTATES EITHER IN
TRUSTOR OR A THIRD PARTY BY PURCHASE OR OTHERWISE AND, IN CASE TRUSTOR ACQUIRES
THE FEE TITLE OR ANY OTHER ESTATE, TITLE OR INTEREST IN AND TO THE SITE, THE
LIEN OF THIS DEED OF TRUST SHALL, WITHOUT FURTHER CONVEYANCE, SIMULTANEOUSLY
WITH SUCH ACQUISITION, BE SPREAD TO COVER AND ATTACH TO SUCH ACQUIRED ESTATE AND
AS SO SPREAD AND ATTACHED SHALL BE PRIOR TO THE LIEN OF ANY MORTGAGE PLACED ON
THE ACQUIRED ESTATE AFTER THE DATE OF THIS DEED OF TRUST.]
2.11.7 [NO RELEASE OR FORBEARANCE OF ANY OF TRUSTOR'S
OBLIGATIONS UNDER THE GROUND LEASE BY THE LESSOR THEREUNDER, SHALL RELEASE
TRUSTOR FROM ANY OF ITS OBLIGATIONS UNDER THIS DEED OF TRUST.]
2.11.8 [TRUSTOR SHALL, WITHIN TEN DAYS AFTER WRITTEN DEMAND
FROM BENEFICIARY, DELIVER TO BENEFICIARY PROOF OF PAYMENT OF ALL ITEMS THAT ARE
REQUIRED TO BE PAID BY TRUSTOR UNDER THE GROUND LEASE, INCLUDING, WITHOUT
LIMITATION, RENT, TAXES, OPERATING EXPENSES AND OTHER CHARGES.]
2.11.9 [THE LIEN OF THIS DEED OF TRUST SHALL ATTACH TO ALL OF
TRUSTOR'S RIGHTS AND REMEDIES AT ANY TIME ARISING UNDER OR PURSUANT TO SECTION
365(h) OF THE BANKRUPTCY LAW, INCLUDING, WITHOUT LIMITATION, ALL OF TRUSTOR'S
RIGHTS TO REMAIN IN POSSESSION OF THE SITE. TRUSTOR SHALL NOT ELECT TO TREAT THE
GROUND LEASE AS TERMINATED UNDER SECTION 365(h)(1) OF THE BANKRUPTCY LAW, AND
ANY SUCH ELECTION SHALL BE VOID.]
2.11.9.1 [IF PURSUANT TO SECTION 365(h)(2) OF THE
BANKRUPTCY LAW, TRUSTOR SHALL SEEK TO OFFSET AGAINST THE RENT RESERVED
IN THE GROUND LEASE THE AMOUNT OF ANY DAMAGES CAUSED BY THE
NONPERFORMANCE BY THE LESSOR OR ANY OTHER PARTY OF ANY OF THEIR
RESPECTIVE OBLIGATIONS THEREUNDER AFTER THE REJECTION BY THE LESSOR OR
SUCH OTHER PARTY OF THE GROUND LEASE UNDER THE BANKRUPTCY LAW, THEN
TRUSTOR SHALL, PRIOR TO EFFECTING SUCH OFFSET, NOTIFY BENEFICIARY OF
ITS INTENT TO DO SO, SETTING FORTH THE AMOUNT PROPOSED TO BE SO OFFSET
AND THE BASIS THEREFOR. BENEFICIARY SHALL HAVE THE RIGHT TO OBJECT TO
ALL OR ANY PART OF SUCH OFFSET THAT, IN THE REASONABLE JUDGMENT OF
BENEFICIARY, WOULD CONSTITUTE A BREACH OF THE GROUND LEASE, AND IN THE
EVENT OF SUCH OBJECTION, TRUSTOR SHALL NOT EFFECT ANY OFFSET OF THE
AMOUNTS FOUND OBJECTIONABLE BY BENEFICIARY. NEITHER BENEFICIARY'S
FAILURE TO OBJECT AS AFORESAID NOR ANY OBJECTION RELATING TO SUCH
OFFSET SHALL CONSTITUTE AN APPROVAL OF ANY SUCH OFFSET BY BENEFICIARY.]
2.11.9.2 [IF ANY ACTION, PROCEEDING, MOTION OR NOTICE
SHALL BE COMMENCED OR FILED IN RESPECT OF THE LESSOR UNDER THE GROUND
LEASE OR ANY OTHER PARTY OR IN RESPECT OF THE GROUND LEASE IN
CONNECTION WITH ANY CASE UNDER THE BANKRUPTCY LAW, THEN BENEFICIARY
SHALL HAVE THE OPTION TO INTERVENE IN ANY SUCH LITIGATION WITH COUNSEL
OF BENEFICIARY'S CHOICE. BENEFICIARY MAY PROCEED IN ITS OWN NAME IN
CONNECTION WITH ANY SUCH LITIGATION, AND TRUSTOR AGREES TO EXECUTE ANY
AND ALL POWERS, AUTHORIZATIONS, CONSENTS OR OTHER DOCUMENTS REQUIRED BY
BENEFICIARY IN CONNECTION THEREWITH.]
2.11.9.3 [TRUSTOR SHALL, AFTER OBTAINING KNOWLEDGE
THEREOF, PROMPTLY NOTIFY BENEFICIARY OF ANY FILING BY OR AGAINST THE
LESSOR OR OTHER PARTY WITH
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AN INTEREST IN THE SITE OF A PETITION UNDER THE BANKRUPTCY LAW. TRUSTOR
SHALL PROMPTLY DELIVER TO BENEFICIARY, FOLLOWING RECEIPT, COPIES OF ANY
AND ALL NOTICES, SUMMONSES, PLEADINGS, APPLICATIONS AND OTHER DOCUMENTS
RECEIVED BY TRUSTOR IN CONNECTION WITH ANY SUCH PETITION AND ANY
PROCEEDINGS RELATING THERETO.]
2.11.9.4 [IF THERE SHALL BE FILED BY OR AGAINST
TRUSTOR A PETITION UNDER THE BANKRUPTCY LAW, AND TRUSTOR, AS LESSEE
UNDER THE GROUND LEASE, SHALL DETERMINE TO REJECT THE GROUND LEASE
PURSUANT TO SECTION 365(a) OF THE BANKRUPTCY LAW, THEN TRUSTOR SHALL
GIVE BENEFICIARY A NOTICE OF THE DATE ON WHICH TRUSTOR SHALL APPLY TO
THE BANKRUPTCY COURT FOR AUTHORITY TO REJECT THE GROUND LEASE (SUCH
NOTICE TO BE NO LATER THAN 20 DAYS PRIOR TO SUCH DATE). BENEFICIARY
SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO SERVE UPON TRUSTOR AT
ANY TIME PRIOR TO THE DATE ON WHICH TRUSTOR SHALL SO APPLY TO THE
BANKRUPTCY COURT A NOTICE STATING THAT BENEFICIARY DEMANDS THAT TRUSTOR
ASSUME AND ASSIGN THE GROUND LEASE TO BENEFICIARY PURSUANT TO SECTION
365 OF THE BANKRUPTCY LAW. IF BENEFICIARY SHALL SERVE UPON TRUSTOR THE
NOTICE DESCRIBED IN THE PRECEDING SENTENCE, TO THE EXTENT PERMITTED BY
LAW OR GOVERNMENTAL RULE TRUSTOR SHALL NOT SEEK TO REJECT THE GROUND
LEASE AND SHALL COMPLY WITH THE DEMAND PROVIDED FOR IN THE PRECEDING
SENTENCE. IN ADDITION, EFFECTIVE UPON THE ENTRY OF AN ORDER FOR RELIEF
WITH RESPECT TO TRUSTOR UNDER THE BANKRUPTCY LAW, TRUSTOR HEREBY
ASSIGNS AND TRANSFERS TO BENEFICIARY A NON-EXCLUSIVE RIGHT TO APPLY TO
THE BANKRUPTCY COURT UNDER SECTION 365(d)(4) OF THE BANKRUPTCY LAW FOR
AN ORDER EXTENDING THE PERIOD DURING WHICH THE GROUND LEASE MAY BE
REJECTED OR ASSUMED; AND SHALL (a) PROMPTLY NOTIFY BENEFICIARY OF ANY
DEFAULT BY TRUSTOR IN THE PERFORMANCE OR OBSERVANCE OF ANY OF THE
TERMS, COVENANTS OR CONDITIONS ON THE PART OF TRUSTOR TO BE PERFORMED
OR OBSERVED UNDER THE GROUND LEASE AND OF THE GIVING OF ANY WRITTEN
NOTICE BY THE LESSOR THEREUNDER TO TRUSTOR OF ANY SUCH DEFAULT, AND (b)
PROMPTLY CAUSE A COPY OF EACH WRITTEN NOTICE GIVEN TO TRUSTOR BY THE
LESSOR UNDER THE GROUND LEASE TO BE DELIVERED TO BENEFICIARY.
BENEFICIARY MAY RELY ON ANY NOTICE RECEIVED BY IT FROM ANY SUCH LESSOR
OF ANY DEFAULT BY TRUSTOR UNDER THE GROUND LEASE AND MAY TAKE SUCH
ACTION AS MAY BE PERMITTED BY LAW OR GOVERNMENTAL RULE TO CURE SUCH
DEFAULT EVEN THOUGH THE EXISTENCE OF SUCH DEFAULT OR THE NATURE THEREOF
SHALL BE QUESTIONED OR DENIED BY TRUSTOR OR BY ANY PERSON ON ITS
BEHALF.]
2.12 Power of Attorney. Trustor does hereby irrevocably constitute and
appoint Beneficiary, its true and lawful attorney (which appointment is coupled
with an interest), with full power of substitution, for Trustor and in the name,
place and stead of Trustor or in Beneficiary's own name, for so long as any of
the Secured Obligations are outstanding, to ask, demand, collect, receive,
receipt for and ▇▇▇ for any and all rents, income and other sums which are
assigned hereunder with full power to endorse the name of Trustor on all
instruments given in payment or in part payment thereof, to settle, adjust or
compromise any claims thereunder as fully as Trustor itself could do and in its
discretion file any claim or take any action or proceeding, either in its own
name or in the name of Trustor or otherwise, which Beneficiary may deem
necessary or appropriate to protect and preserve the right, title and interest
of Beneficiary in and to such rents, income and other sums and the security
intended to be afforded hereby; provided that Beneficiary shall not exercise
such rights unless an Event of Default has occurred and is continuing.
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2.13 Covenant to Pay. If an Event of Default has occurred and is
continuing and such Event of Default could reasonably be expected to materially
and adversely affect Beneficiary's interest hereunder in the Trust Estate or
result in personal injury, then Beneficiary, among its other rights and
remedies, shall have the right, but not the obligation, to pay, observe or
perform the same, in whole or in part, and with such modifications as
Beneficiary reasonably shall deem advisable. To the extent provided in the
Credit Documents, all sums, including, without limitation, reasonable attorneys
fees, so expended or incurred by Beneficiary by reason of the default of
Trustor, or by reason of the bankruptcy or insolvency of Trustor, as well as,
without limitation, sums expended or incurred to sustain the lien or estate of
this Deed of Trust or its priority, or to protect or enforce any rights of
Beneficiary hereunder, or to recover any of the Secured Obligations, or to
complete construction of the Project for which the Credit Documents are intended
as financing, or for repairs, maintenance, alterations, replacements or
improvements thereto or for the protection thereof, or for real estate taxes or
other governmental assessments or charges against any part of the Trust Estate,
or premiums for insurance of the Trust Estate, shall be entitled to the benefit
of the lien on the Trust Estate as of the date of the recording of this Deed of
Trust, shall be deemed to be added to and be part of the Secured Obligations
secured hereby, whether or not the result thereof causes the total amount of the
Secured Obligations to exceed the stated amount set forth in the second
introductory paragraph of this Deed of Trust, and shall be repaid by Trustor as
provided in the Credit Documents.
2.14 Security Agreement.
2.14.1 This Deed of Trust shall also be a security agreement
between Trustor and Beneficiary covering the Deed of Trust Property constituting
personal property or fixtures (hereinafter collectively called "UCC Collateral")
governed by the [RELEVANT STATE] Uniform Commercial Code ("UCC") as the same may
be more specifically set forth in any financing statement delivered in
connection with this Deed of Trust, and as further security for the payment and
performance of the Secured Obligations, Trustor hereby grants to Beneficiary a
security interest in such portion of the Site to the full extent that the Site
may be subject to the UCC. In addition to Beneficiary's other rights hereunder,
Beneficiary shall have all rights of a secured party under the UCC. Trustor
shall execute and deliver to Beneficiary all financing statements and such
further assurances that may be reasonably required by Beneficiary to establish,
create, perfect (to the extent the same can be achieved by the filing of a
financing statement) and maintain the validity and priority of Beneficiary's
security interests, and Trustor shall bear all reasonable costs thereof,
including all UCC searches. Except as otherwise provided in the Credit
Documents, if Beneficiary should dispose of any of the Site comprising the UCC
Collateral pursuant to the UCC, ten (10) days' prior written notice by
Beneficiary to Trustor shall be deemed to be reasonable notice; provided,
however, Beneficiary may dispose of such property in accordance with the
foreclosure procedures of this Deed of Trust in lieu of proceeding under the
UCC. Beneficiary may from time to time execute and deliver at Trustor's expense,
all continuation statements, termination statements, amendments, partial
releases, or other instruments relating to all financing statements by and
between Trustor and Beneficiary. Except as otherwise provided in the Credit
Documents, if an Event of Default shall occur and is continuing, (a)
Beneficiary, in addition to any other rights and remedies which it may have, may
exercise immediately and without demand to the extent permitted by law, any and
all rights and remedies granted to a secured party under the UCC
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including, without limiting the generality of the foregoing, the right to take
possession of the UCC Collateral or any part thereof, and to take such other
measures as Beneficiary may deem necessary for the care, protection and
preservation of such collateral and (b) upon request or demand of Beneficiary,
Trustor shall at its expense, assemble the UCC Collateral and make it available
to Beneficiary at a convenient place acceptable to Beneficiary. Trustor shall
pay to Beneficiary on demand, any and all expenses, including reasonable
attorneys' fees and disbursements incurred or paid by Beneficiary in protecting
the interest in the UCC Collateral and in enforcing the rights hereunder with
respect to such UCC Collateral.
2.14.2 Trustor and the Beneficiary agree, to the extent
permitted by law, that: (i) this Deed of Trust upon recording or registration in
the real estate records of the proper office shall constitute a financing
statement filed as a "fixture filing" within the meaning of [SECTIONS 9-313 AND
9-402 OF THE UCC]; (ii) all or a part of the Trust Estate are or are to become
fixtures; and (iii) the addresses of Trustor and Beneficiary are as set forth on
the first page of this Deed of Trust.
ARTICLE 3 - REMEDIES
3.1 Acceleration of Maturity. If an Event of Default occurs and is
continuing, Beneficiary may (except that such acceleration shall be automatic if
the Event of Default is caused by a Bankruptcy Event of Trustor), declare the
Secured Obligations to be due and payable immediately, and upon such declaration
such principal and interest and other sums shall immediately become due and
payable without demand, presentment, notice or other requirements of any kind
(all of which Trustor waives).
3.2 Protective Advances If an Event of Default shall have occurred and
is continuing, then without thereby limiting Beneficiary's other rights or
remedies, waiving or releasing any of Trustor's obligations, or imposing any
obligation on Beneficiary, Beneficiary may either advance any amount owing or
perform any or all actions that Beneficiary considers necessary or appropriate
to cure such default. All such advances shall constitute "Protective Advances."
No sums advanced or performance rendered by Beneficiary shall cure, or be deemed
a waiver of any Event of Default.
3.3 Institution of Equity Proceedings. If an Event of Default occurs
and is continuing, Beneficiary may institute an action, suit or proceeding in
equity for specific performance of this Deed of Trust, the Guaranty or any other
Credit Document, all of which shall be specifically enforceable by injunction or
other equitable remedy.
3.4 Beneficiary's Power of Enforcement.
(a) If an Event of Default occurs and is continuing,
Beneficiary shall be entitled, at its option and in its sole and absolute
discretion, to prepare and record on its own behalf, or to deliver to Trustee
for recording, if appropriate, written declaration of default and demand for
sale and written Notice of Breach and Election to Sell (or other statutory
notice) to cause the Trust Estate to be sold to satisfy the obligations hereof,
and in the case of delivery to Trustee, Trustee shall cause said notice to be
filed for record.
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(b) After the lapse of such time as may then be required by
law following the recordation of said Notice of Breach and Election to Sell, and
notice of sale having been given as then required by law, Trustee without demand
on Trustor, shall sell the Trust Estate or any portion thereof at the time and
place fixed by it in said notice, either as a whole or in separate parcels, and
in such order as it may determine, at public auction to the highest bidder, of
cash in lawful money of the United States payable at the time of sale. Trustee
may, for any cause it deems expedient, postpone the sale of all or any portion
of said property until it shall be completed and, in every case, notice of
postponement shall be given by public announcement thereof at the time and place
last appointed for the sale and from time to time thereafter Trustee may
postpone such sale by public announcement at the time fixed by the preceding
postponement; provided that Trustee shall give Trustor notice of such
postponement to the extent required by law. Trustee shall execute and deliver to
the purchaser its Deed, ▇▇▇▇ of Sale, or other instrument conveying said
property so sold, but without any covenant or warranty, express or implied. The
recitals in such instrument of conveyance of any matters or facts shall be
conclusive proof of the truthfulness thereof. Any person, including Beneficiary,
may bid at the sale.
(c) After deducting all costs, fees and expenses of Trustee
and of this Deed of Trust, including, without limitation, costs of evidence of
title and reasonable attorneys' fees of Trustee or Beneficiary in connection
with a sale, Trustee shall apply the proceeds of such sale to payment of all
sums expended under the terms hereof not then repaid, with accrued interest at
the interest rate on the Notes then to the payment of all other sums then
secured hereby and the remainder, if any, to the person or persons legally
entitled thereto.
(d) If any Event of Default occurs and is continuing,
Beneficiary may, either with or without entry or taking possession of the Trust
Estate, and without regard to whether or not the indebtedness and other sums
secured hereby shall be due and without prejudice to the right of Beneficiary
thereafter to bring an action or proceeding to foreclose or any other action for
any default existing at the time such earlier action was commenced, proceed by
any appropriate action or proceeding: (1) to enforce payment of the Secured
Obligations, to the extent permitted by law, or the performance of any term
hereof or any other right; (2) to foreclose this Deed of Trust in any manner
provided by law for the foreclosure of mortgages or deeds of trust on real
property and to sell, as an entirety or in separate lots or parcels, the Trust
Estate or any portion thereof pursuant to the laws of the [RELEVANT STATE] or
under the judgment or decree of a court or courts of competent jurisdiction, and
Beneficiary shall be entitled to recover in any such proceeding all costs and
expenses incident thereto, including reasonable attorneys' fees in such amount
as shall be awarded by the court; (3) to exercise any or all of the rights and
remedies available to it under the Credit Documents; and (4) to pursue any other
remedy available to it. Beneficiary shall take action either by such proceedings
or by the exercise of its powers with respect to entry or taking possession, or
both, as Beneficiary may determine.
(e) The remedies described in this Section 3.4 may be
exercised with respect to all or any portion of the Tangible Collateral, either
simultaneously with the sale of any real property encumbered hereby or
independent thereof. Beneficiary shall at any time be
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permitted to proceed with respect to all or any portion of the Tangible
Collateral in any manner permitted by the UCC. Trustor agrees that Beneficiary's
inclusion of all or any portion of the Tangible Collateral in a sale or other
remedy exercised with respect to the real property encumbered hereby, as
permitted by the UCC, is a commercially reasonable disposition of such property.
3.5 Beneficiary's Right to Enter and Take Possession, Operate and Apply
Income.
(a) If an Event of Default occurs and is continuing, Trustor,
upon demand of Beneficiary, shall forthwith surrender to Beneficiary the actual
possession and, if and to the extent permitted by law, Beneficiary itself, or by
such officers or agents as it may appoint, may enter and take possession of all
the Trust Estate including the Tangible Collateral, without liability for
trespass, damages or otherwise, and may exclude Trustor and its agents and
employees wholly therefrom and may have joint access with Trustor to the books,
papers and accounts of Trustor.
(b) If an Event of Default has occurred and is continuing and
Trustor shall for any reason fail to surrender or deliver the Trust Estate, the
Tangible Collateral or any part thereof after Beneficiary's demand, Beneficiary
may obtain a judgment or decree conferring on Beneficiary or Trustee the right
to immediate possession or requiring Trustor to deliver immediate possession of
all or part of such property to Beneficiary or Trustee and Trustor hereby
specifically consents to the entry of such judgment or decree. Trustor shall pay
to Beneficiary or Trustee, upon demand, all costs and expenses of obtaining such
judgment or decree and reasonable compensation to Beneficiary or Trustee, their
attorneys and agents, and all such costs, expenses and compensation shall, until
paid, be secured by the lien of this Deed of Trust.
(c) Upon every such entering upon or taking of possession,
Beneficiary or Trustee may hold, store, use, operate, manage and control the
Trust Estate and conduct the business thereof, and, from time to time in its
sole and absolute discretion and without being under any duty to so act:
(1) make all necessary and proper maintenance,
repairs, renewals and replacements thereto and thereon, and all necessary
additions, betterments and improvements thereto and thereon and purchase or
otherwise acquire fixtures, personalty and other property in connection
therewith;
(2) insure or keep the Trust Estate insured;
(3) manage and operate the Trust Estate and exercise
all the rights and ▇▇▇▇▇▇ of Trustor in their name or otherwise with respect to
the same;
(4) enter into agreements with others to exercise the
powers herein granted Beneficiary or Trustee, all as Beneficiary or Trustee from
time to time may determine; and shall apply the monies so received by
Beneficiary or Trustee in such priority as provided by the Credit Documents to
(1) the payment of interest and principal due and payable to the Beneficiary,
(2) the deposits for taxes and assessments and insurance premiums due, (3) the
cost of insurance, taxes,
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assessments and other proper charges upon the Trust Estate or any part thereof;
(4) the compensation, expenses and disbursements of the agents, attorneys and
other representatives of Beneficiary or Trustee as allowed under this Deed of
Trust; and (5) any other charges or costs required to be paid by Trustor under
the terms of the Credit Documents.
(5) rent or sublet the Trust Estate or any portion
thereof for any purpose permitted by this Deed of Trust.
Beneficiary or Trustee shall surrender possession of the Trust
Estate and the Tangible Collateral to Trustor (i) as may be required by law or
court order, or (ii) when all amounts under any of the terms of the Credit
Documents, including this Deed of Trust, shall have been paid current and all
Events of Default have been cured or waived. The same right of taking
possession, however, shall exist if any subsequent Event of Default shall occur
and be continuing.
3.6 Separate Sales. To the extent permitted by law or Governmental
Rule, the Trust Estate may be sold in one or more parcels and in such manner and
order as Trustee, in his sole discretion, may elect, it being expressly
understood and agreed that the right of sale arising out of any Event of Default
shall not be exhausted by any one or more sales.
3.7 Waiver of Appraisement, Valuation, Stay, Extension and Redemption
Laws. Trustor agrees to the full extent permitted by law that if an Event of
Default occurs and is continuing, neither Trustor nor anyone claiming through or
under it shall or will set up, claim or seek to take advantage of any
appraisement, valuation, stay, extension or redemption laws now or hereafter in
force, in order to prevent or hinder the enforcement or foreclosure of this Deed
of Trust or the absolute sale of the Trust Estate or any portion thereof or the
final and absolute putting into possession thereof, immediately after such sale,
of the purchasers thereof, and Trustor for itself and all who may at any time
claim through or under it, hereby waives, to the full extent that it may
lawfully so do, the benefit of all such laws, and any and all right to have the
assets comprising the Trust Estate marshalled upon any foreclosure of the lien
hereof and agrees that Trustee or any court having jurisdiction to foreclose
such lien may sell the Trust Estate in part or as an entirety.
3.8 Receiver. If an Event of Default occurs and is continuing,
Beneficiary, to the extent permitted by law, and without regard to the value,
adequacy or occupancy of the security for the indebtedness and other sums
secured hereby, shall be entitled as a matter of right if it so elects to the
appointment of a receiver to enter upon and take possession of the Trust Estate
and to collect all earnings, revenues and receipts and apply the same as the
court may direct, and such receiver may be appointed by any court of competent
jurisdiction upon application by Beneficiary. To the extent permitted by law or
Governmental Rule, Beneficiary may have a receiver appointed without notice to
Trustor or any third party, and Beneficiary may waive any requirement that the
receiver post a bond. To the extent permitted by law or Governmental Rule,
Beneficiary shall have the power to designate and select the Person who shall
serve as the receiver and to negotiate all terms and conditions under which such
receiver shall serve. To the extent permitted by law or Governmental Rule, any
receiver appointed on Beneficiary's behalf may be an Affiliate of Beneficiary.
The reasonable expenses, including receiver's fees, reasonable attorneys' fees,
costs and agent's compensation, incurred pursuant to the powers herein contained
shall be secured by this Deed of
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Trust. The right to enter and take possession of and to manage and operate the
Trust Estate and to collect all earnings, revenues and receipts, whether by a
receiver or otherwise, shall be cumulative to any other right or remedy
available to Beneficiary under this Deed of Trust, the other Credit Documents or
otherwise available to Beneficiary and may be exercised concurrently therewith
or independently thereof, but such rights shall be exercised in a manner which
is otherwise in accordance with and consistent with the Credit Documents.
Beneficiary shall be liable to account only for such earnings, revenues and
receipts (including, without limitation, security deposits) actually received by
Beneficiary, whether received pursuant to this section or any other provision
hereof. Notwithstanding the appointment of any receiver or other custodian,
Beneficiary shall be entitled as pledgee to the possession and control of any
cash, deposits, or instruments at the time held by, or payable or deliverable
under the terms of this Deed of Trust to, Beneficiary.
3.9 Suits to Protect the Trust Estate. Beneficiary shall have the power
and authority to institute and maintain any suits and proceedings as
Beneficiary, in its sole and absolute discretion, may deem advisable (a) to
prevent any impairment of the Trust Estate by any acts which may be unlawful or
in violation of this Deed of Trust, (b) to preserve or protect its interest in
the Trust Estate, or (c) to restrain the enforcement of or compliance with any
legislation or other Legal Requirement that may be unconstitutional or otherwise
invalid, if the enforcement of or compliance with such enactment, rule or order
might impair the security hereunder or be prejudicial to Beneficiary's interest
3.10 Proofs of Claim. In the case of any receivership, insolvency,
Bankruptcy Event, reorganization, arrangement, adjustment, composition or other
judicial proceedings affecting Trustor, any Affiliate or any guarantor, co-maker
or endorser of any of Trustor's obligations, its creditors or its property,
Beneficiary, to the extent permitted by law, shall be entitled to file such
proofs of claim or other documents as it may deem be necessary or advisable in
order to have its claims allowed in such proceedings for the entire amount due
and payable by Trustor under the Credit Documents, at the date of the
institution of such proceedings, and for any additional amounts which may become
due and payable by Trustor after such date.
3.11 Trustor to Pay Amounts Secured Hereby on Any Default in Payment;
Application of Monies by Beneficiary.
(a) In case of a foreclosure sale of all or any part of the
Trust Estate and of the application of the proceeds of sale to the payment of
the sums secured hereby, to the extent permitted by law, Beneficiary shall be
entitled to enforce payment from Trustor of any additional amounts then
remaining due and unpaid and to recover judgment against Trustor for any portion
thereof remaining unpaid, with interest at the interest rate on the Notes.
(b) Trustor hereby agrees to the extent permitted by law, that
no recovery of any such judgment by Beneficiary or other action by Beneficiary
and no attachment or levy of any execution upon any of the Trust Estate or any
other property shall in any way affect the Lien and security interest of this
Deed of Trust upon the Trust Estate or any part thereof or any Lien, rights,
powers or remedies of Beneficiary hereunder, but such Lien, rights, powers and
remedies shall continue unimpaired as before.
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(c) Any monies collected or received by Beneficiary under this
Section 3.11 shall be first applied to the payment of compensation, expenses and
disbursements of the agents, attorneys and other representatives of Beneficiary,
and the balance remaining shall be applied to the payment of amounts due and
unpaid under the Credit Documents.
3.12 Delay or Omission; No Waiver. No delay or omission of Beneficiary
or the Banks to exercise any right, power or remedy upon any Event of Default
shall exhaust or impair any such right, power or remedy or shall be construed to
waive any such Event of Default or to constitute acquiescence therein. Every
right, power and remedy given to Beneficiary whether contained herein or in the
other Credit Documents or otherwise available to Beneficiary may be exercised
from time to time and as often as may be deemed expedient by Beneficiary.
3.13 No Waiver of One Default to Affect Another. No waiver of any Event
of Default hereunder shall extend to or affect any subsequent or any other Event
of Default then existing, or impair any rights, powers or remedies consequent
thereon. If Beneficiary (a) grants forbearance or an extension of time for the
payment of any sums secured hereby; (b) takes other or additional security for
the payment thereof; (c) waives or does not exercise any right granted in this
Deed of Trust or any other Credit Document; (d) releases any part of the Trust
Estate from the lien or security interest of this Deed of Trust or any other
instrument securing the Secured Obligations; (e) consents to the filing of any
map, plat or replat of the [LEASED] Premises; (f) consents to the granting of
any easement on the [LEASED] Premises; or (g) makes or consents to any agreement
changing the terms of this Deed of Trust or any other Credit Document
subordinating the lien or any charge hereof, no such act or omission shall
release, discharge, modify, change or affect the liability under this Deed of
Trust or any other Credit Document or otherwise of Trustor, or any subsequent
purchaser of the Trust Estate or any part thereof or any maker, co-signer,
surety or guarantor with respect to any other matters not addressed by such act
or omission. No such act or omission shall preclude Beneficiary from exercising
any right, power or privilege herein granted or intended to be granted in case
of any Event of Default then existing or of any subsequent Event of Default,
nor, except as otherwise expressly provided in an instrument or instruments
executed by Beneficiary, shall the lien or security interest of this Deed of
Trust be altered thereby, except to the extent expressly provided in such acts
or omissions. In the event of the sale or transfer by operation of law or
otherwise of all or any part of the Trust Estate, Beneficiary, without notice to
any person, firm or corporation, is hereby authorized and empowered to deal with
any such vendee or transferee with reference to the Trust Estate or the
indebtedness secured hereby, or with reference to any of the terms or conditions
hereof, as fully and to the same extent as it might deal with the original
parties hereto and without in any way releasing or discharging any of the
liabilities or undertakings hereunder, or waiving its right to declare such sale
or transfer an Event of Default as provided herein. Notwithstanding anything to
the contrary contained in this Deed of Trust or any other Credit Document, (i)
in the case of any non-monetary Event of Default, Beneficiary may continue to
accept payments due hereunder without thereby waiving the existence of such or
any other Event of Default and (ii) in the case of any monetary Event of
Default, Beneficiary may accept partial payments of any sums due hereunder
without thereby waiving the existence of such Event of Default if the partial
payment is not sufficient to completely cure such Event of Default.
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3.14 Discontinuance of Proceedings; Position of Parties Restored. If
Beneficiary shall have proceeded to enforce any right or remedy under this Deed
of Trust by foreclosure, entry of judgement or otherwise and such proceedings
shall have been discontinued or abandoned for any reason, or such proceedings
shall have resulted in a final determination adverse to Beneficiary, then and in
every such case Trustor and Beneficiary shall be restored to their former
positions and rights hereunder, and all rights, powers and remedies of
Beneficiary shall continue as if no such proceedings had occurred or had been
taken.
3.15 Remedies Cumulative. Subject to the provisions of Section 5.15
hereof, no right, power or remedy, including without limitation remedies with
respect to any security for the Secured Obligations, conferred upon or reserved
to Beneficiary by this Deed of Trust or any other Credit Document is exclusive
of any other right, power or remedy, but each and every such right, power and
remedy shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or under any other Credit Document, now
or hereafter existing at law, in equity or by statute, and Beneficiary shall be
entitled to resort to such rights, powers, remedies or security as Beneficiary
shall in its sole and absolute discretion deem advisable.
3.16 Interest After Event of Default. If an Event of Default shall have
occurred and is continuing, all sums outstanding and unpaid under the Credit
Documents, including this Deed of Trust, shall, at Beneficiary's option, bear
interest at the interest rate on the [NOTES] until such Event of Default has
been cured. Trustor's obligation to pay such interest shall be secured by this
Deed of Trust.
3.17 Foreclosure; Expenses of Litigation. If Trustee forecloses,
reasonable attorneys' fees for services in the supervision of said foreclosure
proceeding shall be allowed to the Trustee and Beneficiary as part of the
foreclosure costs. In the event of foreclosure of the lien hereof, there shall
be allowed and included as additional indebtedness all reasonable expenditures
and expenses which may be paid or incurred by or on behalf of Beneficiary for
attorneys' fees, appraiser's fees, outlays for documentary and expert evidence,
stenographers' charges, publication costs, and costs (which may be estimated as
to items to be expended after foreclosure sale or entry of the decree) of
procuring all such abstracts of title, title searches and examinations, title
insurance policies and guarantees, and similar data and assurances with respect
to title as Beneficiary may deem reasonably necessary either to prosecute such
suit or to evidence to a bidder at any sale which may be had pursuant to such
decree the true condition of the title to or the value of the Trust Estate or
any portion thereof. All expenditures and expenses of the nature in this section
mentioned, and such expenses and fees as may be incurred in the protection of
the Trust Estate and the maintenance of the lien and security interest of this
Deed of Trust, including the reasonable fees of any attorney employed by
Beneficiary in any litigation or proceeding affecting this Deed of Trust or any
other Credit Document, the Trust Estate or any portion thereof, including,
without limitation, civil, probate, appellate and bankruptcy proceedings, or in
preparation for the commencement or defense of any proceeding or threatened suit
or proceeding, shall be immediately due and payable by Trustor, with interest
thereon at the interest rate on the Notes, and shall be secured by this Deed of
Trust. Trustee waives its right to any statutory fee in connection with any
judicial or nonjudicial foreclosure of the lien hereof and agrees to accept a
reasonable fee for such services.
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3.18 Deficiency Judgments Recourse against Trustor, the other Portfolio
Entities, the Member and their respective Affiliates, members, partners,
stockholders, officers, directors and employees under this Deed of Trust shall
be limited to the extent provided in Article 9 of the Credit Agreement. Subject
to Article 9 of the Credit Agreement, if after foreclosure of this Deed of Trust
or Trustee's sale hereunder, there shall remain any deficiency with respect to
any amounts payable under the Credit Documents, including hereunder, or any
amounts secured hereby, and Beneficiary shall institute any proceedings to
recover such deficiency or deficiencies, all such amounts shall continue to bear
interest at the interest rate on the Notes. Subject to Article 9 of the Credit
Agreement, Trustor waives any defense to Beneficiary's recovery against Trustor
of any deficiency after any foreclosure sale of the Trust Estate. Subject to
Article 9 of the Credit Agreement, to the extent permitted by law, Trustor
expressly waives any defense or benefits that may be derived from any statute
granting Trustor any defense to any such recovery by Beneficiary. Subject to
Article 9 of the Credit Agreement, in addition, Beneficiary and Trustee shall be
entitled to recovery of all of their reasonable costs and expenditures
(including without limitation any court imposed costs) in connection with such
proceedings, including their reasonable attorneys' fees, appraisal fees and the
other costs, fees and expenditures referred to in Section 3.17 above. This
provision shall survive any foreclosure or sale of the Trust Estate, any portion
thereof and/or the extinguishment of the lien hereof.
3.19 Waiver of Jury Trial. Beneficiary and Trustor each waive any right
to have a jury participate in resolving any dispute whether sounding in
contract, tort or otherwise arising out of, connected with, related to or
incidental to the relationship established between them in connection with this
Deed of Trust, the Guaranty or any other Credit Document. Any such disputes
shall be resolved in a bench trial without a jury.
3.20 Exculpation of Beneficiary. The acceptance by Beneficiary of the
assignment contained herein with all of the rights, powers, privileges and
authority created hereby shall not, prior to entry upon and taking possession of
the Trust Estate by Beneficiary, be deemed or construed to make Beneficiary a
"mortgagee in possession"; nor thereafter or at any time or in any event
obligate Beneficiary to appear in or defend any action or proceeding relating to
the Trust Estate, nor shall Beneficiary, prior to such entry and taking, be
liable in any way for any injury or damage to person or property sustained by
any Person in or about the Trust Estate.
ARTICLE 4 - RIGHTS AND RESPONSIBILITIES OF TRUSTEE;
OTHER PROVISIONS RELATING TO TRUSTEE
Notwithstanding anything to the contrary in this Deed of Trust, Trustor
and Beneficiary agree as follows.
4.1 Exercise of Remedies by Trustee To the extent that this Deed of
Trust or applicable law authorizes or empowers Beneficiary to exercise any
remedies set forth in Article Three hereof or otherwise, or perform any acts in
connection therewith, Trustee (but not to the exclusion of Beneficiary unless so
required under the law of the State of [RELEVANT STATE]) shall have the power to
exercise any or all such remedies, and to perform any acts provided for in this
Deed of Trust in connection therewith, all for the benefit of Beneficiary and on
Beneficiary's behalf in accordance with applicable law of the State of [RELEVANT
STATE]. In connection therewith,
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Trustee: (a) shall not exercise, or waive the exercise of, any Beneficiary's
Remedies (other than any rights or Trustee to any indemnity or reimbursement),
except at Beneficiary's request, and (b) shall exercise, or waive the exercise
of, any or all of Beneficiary's remedies at Beneficiary's request, and in
accordance with Beneficiary's directions as to the manner of such exercise or
waiver. Trustee may, however, decline to follow Beneficiary's request or
direction if Trustee shall be advised by counsel that the action or proceeding,
or manner thereof, so directed may not lawfully be taken or waived.
4.2 Rights and Privileges of Trustee. To the extent that this Deed of
Trust requires Trustor to reimburse Beneficiary for any expenditures Beneficiary
may incur, Trustee shall be entitled to the same rights to reimbursement of
expenses as Beneficiary, subject to such limitations and conditions as would
apply in the case of Beneficiary. To the extent that this Deed of Trust negates
or limits Beneficiary's liability as to any matter, Trustee shall be entitled to
the same negation or limitation of liability. To the extent that Trustor,
pursuant to this Deed of Trust, appoints Beneficiary as Trustor's attorney in
fact for any purpose, Beneficiary or (when so instructed by Beneficiary) Trustee
shall be entitled to act on Trustor's behalf without joinder or confirmation by
the other.
4.3 Resignation or Replacement of Trustee Trustee may resign by an
instrument in writing addressed to Beneficiary, and Trustee may be removed at
any time with or without cause (i.e., in Beneficiary's sole and absolute
discretion) by an instrument in writing executed by Beneficiary. In case of the
death, resignation, removal or disqualification of Trustee or if for any reason
Beneficiary shall deem it desirable to appoint a substitute, successor or
replacement Trustee to act instead of Trustee originally named (or in place of
any substitute, successor or replacement Trustee), then Beneficiary shall have
the right and is hereby authorized and empowered to appoint a successor,
substitute or replacement Trustee, and, if preferred, several substitute
trustees in succession, without any formality other than appointment and
designation in writing executed by Beneficiary, which instrument shall be
recorded if required by the law of the State of [RELEVANT STATE]. The law of the
State of [RELEVANT STATE] shall govern the qualifications of any Trustee. The
authority conferred upon Trustee by this Deed of Trust shall automatically
extend to any and all other successor, substitute and replacement Trustee(s)
successively until the Secured Obligations have been paid in full or the Trust
Estate has been sold hereunder or released in accordance with the provisions of
the Credit Documents. Beneficiary's written appointment and designation of any
Trustee shall be full evidence of Beneficiary's right and authority to make the
same and of all facts therein recited. No confirmation, authorization, approval
or other action by Trustor shall be required in connection with any resignation
or other replacement of Trustee.
4.4 Authority of Beneficiary. If Beneficiary is a banking corporation,
state banking corporation or a national banking association and the instrument
of appointment of any successor or replacement Trustee is executed on
Beneficiary's behalf by an officer of such corporation, state banking
corporation or national banking association, then such appointment may be
executed by any authorized officer or agent of Beneficiary and such appointment
shall be conclusively presumed to be executed with authority and shall be valid
and sufficient without proof of any action by the board of directors or any
superior officer of Beneficiary.
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4.5 Effect of Appointment of Successor Trustee. Upon the appointment
and designation of any successor, substitute or replacement Trustee, Trustee's
entire estate and title in the Trust Estate shall vest in the designated
successor, substitute or replacement Trustee. Such successor, substitute or
replacement Trustee shall thereupon succeed to and shall hold, possess and
execute all the rights, powers, privileges, immunities and duties herein
conferred upon Trustee. All references herein to Trustee shall be deemed to
refer to Trustee (including any successor or substitute appointed and designated
as herein provided) from time to time acting hereunder.
4.6 Confirmation of Transfer and Succession. Any new Trustee appointed
pursuant to any of the provisions hereof shall, without any further act, deed or
conveyance, become vested with all the estates, properties, rights, powers and
trusts of his predecessor in the rights hereunder with like effect as if
originally named as Trustee herein; but nevertheless, upon the written request
of Beneficiary or of any successor, substitute or replacement Trustee, any
former Trustee ceasing to act shall execute and deliver an instrument
transferring to such successor, substitute or replacement Trustee all of the
right, title, estate and interest in the Trust Estate of Trustee so ceasing to
act, together with all the rights, powers, privileges, immunities and duties
herein conferred upon Trustee, and shall duly assign, transfer and deliver all
properties and moneys held by said Trustee hereunder to said successor,
substitute or replacement Trustee.
4.7 Exculpation. Trustee shall not be liable for any error of judgment
or act done by Trustee in good faith, or otherwise be responsible or accountable
under any circumstances whatsoever, except for Trustee's gross negligence,
willful misconduct or knowing violation of law. Trustee shall not be personally
liable in case of entry by him, or anyone entering by virtue of the powers
herein granted him, upon the Trust Estate for debts contracted or liability or
damages incurred in the management or operation of the Trust Estate. Trustee
shall have the right to rely on any instrument, document or signature
authorizing or supporting any action taken or proposed to be taken by it
hereunder, believed by it in good faith to be genuine. All moneys received by
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated in any
manner from any other moneys (except to the extent required by law). Trustee
shall be under no liability for interest on any moneys received by it hereunder.
4.8 Endorsement and Execution of Documents. Upon Beneficiary's written
request, Trustee shall, without liability or notice to Trustor, execute, consent
to, or join in any instrument or agreement in connection with or necessary to
effectuate the purposes of the Credit Documents. Trustor hereby irrevocably
designates Trustee as its attorney in fact to execute, acknowledge and deliver,
on Trustor's behalf and in Trustor's name, all instruments or agreements
necessary to implement any provision(s) of this Deed of Trust or to further
perfect the lien created by this Deed of Trust on the Trust Estate. This power
of attorney shall be deemed to be coupled with an interest and shall survive any
disability of Trustor.
4.9 Multiple Trustees. If Beneficiary appoints multiple trustees, then
any Trustee, individually, may exercise all powers granted to Trustee under this
instrument, without the need for action by any other Trustee(s).
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4.10 No Required Action. Trustee shall not be required to take any
action under this Deed of Trust or to institute, appear in or defend any action,
suit or other proceeding in connection therewith where in his opinion such
action will be likely to involve him in expense or liability, unless requested
so to do by a written instrument signed by Beneficiary and, if Trustee so
requests, unless Trustee is tendered security and indemnity satisfactory to him
against any and all costs, expense and liabilities arising therefrom. Trustee
shall not be responsible for the execution, acknowledgment or validity of the
Credit Documents, or for the proper authorization thereof, or for the
sufficiency of the lien and security interest purported to be created hereby,
and makes no representation in respect thereof or in respect of the rights,
remedies and recourses of Beneficiary.
4.11 Terms of Trustee's Acceptance. Trustee accepts the trust created
by this Deed of Trust upon the following terms and conditions:
(a) DELEGATION. Trustee may exercise any of its powers through
appointment of attorney(s) in fact or agents.
(b) SECURITY. Trustee shall be under no obligation to take any
action upon any Event of Default unless furnished security or indemnity, in form
satisfactory to Trustee, against costs, expenses, and liabilities that Trustee
may incur.
(c) COSTS AND EXPENSES. Trustor shall reimburse Trustee, as
part of the Secured Obligations secured hereunder, for all reasonable
disbursements and expenses (including reasonable legal fees and expenses)
incurred by reason of or arising from an Event of Default and as provided for in
this Deed of Trust, including any of the foregoing incurred in Trustee's
administering and executing the trust created by this Deed of Trust and
performing Trustee's duties and exercising Trustee's powers under this Deed of
Trust.
(d) RELEASE. Upon payment of the Secured Obligations secured
hereunder, Beneficiary shall request Trustee to release this Deed of Trust and
shall surrender all the Secured Obligations secured hereunder to Trustee.
Trustee shall release this Deed of Trust without charge to Trustor. Trustor
shall pay all costs of recordation, if any.
ARTICLE 5 - GENERAL
5.1 Discharge. When all of the Secured Obligations shall have been paid
in full, then this Deed of Trust and the lien and security interest created
hereby shall be of no further force and effect, Trustor shall be released from
the covenants, agreements and obligations of Trustor contained in this Deed of
Trust and all right, title and interest in and to the Trust Estate shall revert
to Trustor. Beneficiary and Trustee, at the request and the expense of Trustor,
shall promptly execute a deed of reconveyance and such other documents as may be
reasonably requested by Trustor to evidence the discharge and satisfaction of
this Deed of Trust and the release of Trustor from its obligations hereunder.
5.2 No Waiver. The exercise of the privileges granted in this Deed of
Trust to perform Trustor's obligations under the agreements which constitute the
Trust Estate shall in no event be considered or constitute a waiver of any right
which Beneficiary may have at any time, after an
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Event of Default shall have occurred and be continuing, to declare the Secured
Obligations to be immediately due and payable. No delay or omission to exercise
any right, remedy or power accruing upon any default shall impair any such
right, remedy or power or shall be construed to be a waiver of any such default
or acquiescence therein; and every such right, remedy and power may be exercised
from time to time and as often as may be deemed expedient.
5.3 Extension, Rearrangement or Renewal of Secured Obligations. It is
expressly agreed that any of the Secured Obligations at any time secured hereby
may be from time to time extended for any period, or with the consent of Trustor
rearranged or renewed, and that any part of the security herein described, or
any other security for the Secured Obligations, may be waived or released,
without altering, varying or diminishing the force, effect or lien or security
interest of this Deed of Trust; and the lien and security interest granted by
this Deed of Trust shall continue as a prior lien and security interest on all
of the Trust Estate not expressly so released, until the Secured Obligations are
fully paid and this Deed of Trust is terminated in accordance with the
provisions hereof; and no other security now existing or hereafter taken to
secure the payment of the Secured Obligations or any part thereof or the
performance of any obligation or liability of Trustor whatever shall in any
manner impair or affect the security given by this Deed of Trust; and all
security for the payment of the Secured Obligations or any part thereof and the
performance of any obligation or liability shall be taken, considered and held
as cumulative.
5.4 Forcible Detainer. Trustor agrees for itself and all Persons
claiming by, through or under it, that subsequent to foreclosure hereunder in
accordance with this Deed of Trust and applicable law if Trustor shall hold
possession of the Trust Estate or any part thereof, Trustor or the Persons so
holding possession shall be guilty of trespass; and any such tenant failing or
refusing to surrender possession upon demand shall be guilty of forcible
detainer and shall be liable to such purchasers for reasonable rental on said
premises, and shall be subject to eviction and removal in accordance with law.
5.5 Waiver of Stay or Extension. To the extent permitted to be waived
by law, Trustor shall not at any time insist upon or plead or in any manner
whatever claim the benefit or advantage of any stay, extension or moratorium law
now or at any time hereafter in force in any locality where the Trust Estate or
any part thereof may or shall be situated, nor shall Trustor claim any benefit
or advantage from any law now or hereafter in force providing for the valuation
or appraisement of the Trust Estate or any part thereof prior to any sale
thereof to be made pursuant to any provision of this Deed of Trust or to a
decree of any court of competent jurisdiction, nor after any such sale shall
Trustor claim or exercise any right conferred by any law now or at any time
hereafter in force to redeem the Trust Estate so sold or any part thereof; and
Trustor hereby expressly waives all benefit or advantage of any such law or laws
and the appraisement of the Trust Estate or any part thereof, and covenants that
Trustor shall not hinder or delay the execution of any power herein granted and
delegated to Beneficiary but that Trustor shall permit the execution of every
such power as though no such law had been made.
5.6 Notices. Except where certified or registered mail notice is
required by applicable law, any notice to Trustor or Beneficiary required or
permitted hereunder shall be deemed to be given when given in the manner
prescribed in Section 12.1 of the Credit Agreement. All notices to
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Trustee required or permitted hereunder shall be deemed given when given in the
manner prescribed in Section 12.1 of the Credit Agreement to the following
address:
[TRUSTEE ADDRESS]
5.7 Severability. All rights, powers and remedies provided herein may
be exercised only to the extent that the exercise thereof does not violate any
applicable law, and are intended to be limited to the extent necessary so that
they will not render this Deed of Trust invalid, unenforceable or not entitled
to be recorded, registered or filed under any applicable law. In the event any
term or provision contained in this Deed of Trust is in conflict, or may
hereafter be held to be in conflict, with the laws of [RELEVANT STATE] or of the
United States of America, this Deed of Trust shall be affected only as to such
particular term or provision, and shall in all other respects remain in full
force and effect.
5.8 Application of Payments. In the event that any part of the Secured
Obligations cannot lawfully be secured hereby, or in the event that the lien and
security interest hereof cannot be lawfully enforced to pay any part of the
Secured Obligations, or in the event that the lien or security interest created
by this Deed of Trust shall be invalid or unenforceable as to any part of the
Secured Obligations, then all payments on the Secured Obligations shall be
deemed to have been first applied to the complete payment and liquidation of
that part of the Secured Obligations which is not secured by this Deed of Trust
and the unsecured portion of the Secured Obligations shall be completely paid
and liquidated prior to the payment and liquidation of the remaining secured
portion of the Secured Obligations.
5.9 Governing Law
THIS DEED OF TRUST IS GOVERNED BY AND SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF [RELEVANT STATE.]
5.10 Entire Agreement. THIS WRITTEN AGREEMENT, THE GUARANTY AND THE
OTHER CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
AS OF THE DATE HEREOF, THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
TRUSTOR BENEFICIARY
5.11 Amendments. This Deed of Trust may be amended, supplemented or
otherwise modified only by an instrument in writing signed by Trustor and
Beneficiary.
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5.12 Successors and Assigns. All terms of this Deed of Trust shall run
with the land and bind each of Trustor and Beneficiary and their respective
successors and assigns, and all Persons claiming under or through Trustor or
Beneficiary, as the case may be, or any such successor or assign, and shall
inure to the benefit of Beneficiary and Trustor, and their respective successors
and assigns.
5.13 Renewal, Etc. Beneficiary may at any time and from time to time
renew or extend this Deed of Trust, or alter or modify the same in any way, or
waive any of the terms, covenants or conditions hereof in whole or in part and
may release any portion of the Trust Estate or any other security, and grant
such extensions and indulgences in relation to the Secured Obligations as
Beneficiary may determine, without the consent of any junior lienor or
encumbrancer and without any obligation to give notice of any kind thereto and
without in any manner affecting the priority of the lien and security interest
hereof on any part of the Trust Estate; provided that nothing in this Section
5.13 shall grant Beneficiary the right to alter or modify the Deed of Trust
without the consent of the Trustor unless otherwise specifically permitted in
this Deed of Trust.
5.14 Future Advances. This Deed of Trust is executed and delivered to
secure, among other things, Trustor's guaranty of future advances under the
Credit Agreement. It is understood and agreed that this Deed of Trust secures
Trustor's guaranty of present and future advances made pursuant to the Credit
Agreement and that the lien of such future advances shall relate to the date of
this Deed of Trust. The advances are being used by Trustor to pay for all or
part of the cost of completing erection, acquisition, construction, alteration
or repair of any part of the Project, the financing of which, in whole or in
part, this Deed of Trust was given to secure.
5.15 Liability. Notwithstanding any provision in this Deed of Trust to
the contrary, Recourse against the Trustor, the other Portfolio Entities, the
Member and their respective Affiliates (all as defined in the Credit Agreement),
stockholders, officers, directors and employees under this Deed of Trust shall
be limited to the extent provided in Article 9 of the Credit Agreement.
5.16 [SEVERABILITY AND COMPLIANCE WITH USURY LAW. THE CREDIT DOCUMENTS
ARE INTENDED TO BE PERFORMED IN ACCORDANCE WITH, AND ONLY TO THE EXTENT
PERMITTED BY, ALL APPLICABLE GOVERNMENTAL RULES AND LEGAL REQUIREMENTS. IF ANY
PROVISION OF ANY OF THE CREDIT DOCUMENTS OR THE APPLICATION THEREOF TO ANY
PERSON OR CIRCUMSTANCE SHALL, FOR ANY REASON AND TO ANY EXTENT, BE INVALID OR
UNENFORCEABLE, NEITHER THE REMAINDER OF THE INSTRUMENT IN WHICH SUCH PROVISION
IS CONTAINED, NOR THE APPLICATION OF SUCH PROVISION TO OTHER PERSONS OR
CIRCUMSTANCES, NOR THE OTHER INSTRUMENTS REFERRED TO HEREINABOVE, SHALL BE
AFFECTED THEREBY, BUT RATHER SHALL BE ENFORCEABLE TO THE GREATEST EXTENT
PERMITTED BY LAW. IT IS EXPRESSLY STIPULATED AND AGREED TO BE THE INTENT OF
TRUSTOR AND BENEFICIARY AT ALL TIMES TO COMPLY WITH THE APPLICABLE [RELEVANT
STATE] LAW GOVERNING THE MAXIMUM RATE OR AMOUNT OF INTEREST PAYABLE ON OR IN
CONNECTION WITH THE SECURED OBLIGATIONS (OR APPLICABLE UNITED STATES FEDERAL LAW
TO THE EXTENT THAT IT PERMITS BENEFICIARY TO CONTRACT FOR, CHARGE, TAKE, RESERVE
OR RECEIVE A GREATER AMOUNT OF INTEREST THAN UNDER [RELEVANT STATE] LAW). IF THE
APPLICABLE LAW IS EVER JUDICIALLY INTERPRETED SO AS TO RENDER USURIOUS ANY
AMOUNT CALLED FOR UNDER THE CREDIT DOCUMENTS, OR CONTRACTED FOR, CHARGED, TAKEN,
RESERVED OR RECEIVED WITH RESPECT TO THE EXTENSION OF CREDIT EVIDENCED BY THE
CREDIT DOCUMENTS OR IF ACCELERATION OF THE MATURITY OF THE SECURED OBLIGATIONS
OR IF ANY PREPAYMENT BY TRUSTOR RESULTS IN TRUSTOR
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HAVING PAID ANY INTEREST IN EXCESS OF THAT PERMITTED BY LAW, THEN IT IS
TRUSTOR'S AND BENEFICIARY'S EXPRESS INTENT THAT ALL EXCESS AMOUNTS THERETOFORE
COLLECTED BY BENEFICIARY BE CREDITED ON THE PRINCIPAL BALANCE DUE UNDER THE
CREDIT DOCUMENTS (OR, IF THE CREDIT DOCUMENTS HAVE BEEN OR WOULD THEREBY BE PAID
IN FULL, REFUNDED TO TRUSTOR), AND THE PROVISIONS OF THE CREDIT DOCUMENTS
IMMEDIATELY BE DEEMED REFORMED AND THE AMOUNTS THEREAFTER COLLECTIBLE THEREUNDER
REDUCED, WITHOUT THE NECESSITY OF THE EXECUTION OF ANY NEW DOCUMENT, SO AS TO
COMPLY WITH THE APPLICABLE LAW, BUT SO AS TO PERMIT THE RECOVERY OF THE FULLEST
AMOUNT OTHERWISE CALLED FOR HEREUNDER AND THEREUNDER. THE RIGHT TO ACCELERATE
MATURITY OF SECURED OBLIGATIONS DOES NOT INCLUDE THE RIGHT TO ACCELERATE ANY
INTEREST WHICH HAS NOT OTHERWISE ACCRUED ON THE DATE OF SUCH ACCELERATION, AND
BENEFICIARY DOES NOT INTEND TO COLLECT ANY UNEARNED INTEREST IN THE EVENT OF
ACCELERATION. ALL SUMS PAID OR AGREED TO BE PAID TO BENEFICIARY FOR THE USE,
FORBEARANCE OR DETENTION OF THE SECURED OBLIGATIONS SHALL, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, BE AMORTIZED, PRORATED, ALLOCATED AND SPREAD
THROUGHOUT THE FULL TERM OF THE SECURED OBLIGATIONS UNTIL PAYMENT IN FULL SO
THAT THE RATE OR AMOUNT OF INTEREST ON ACCOUNT OF THE SECURED OBLIGATIONS DOES
NOT EXCEED THE APPLICABLE USURY CEILING.]
5.17 [SUBJECT TO GROUND LEASE. THE TRUSTOR, THE BENEFICIARY AND THE
TRUSTEE ACKNOWLEDGE AND AGREE THAT THIS DEED OF TRUST IS SUBJECT TO THE TERMS
AND CONDITIONS OF THE GROUND LEASE. IN THE EVENT OF A CONFLICT BETWEEN THE TERMS
OF THIS DEED OF TRUST AND THE GROUND LEASE, THE TERMS OF THE GROUND LEASE SHALL
SUPERSEDE AND CONTROL.]
5.18 Release of Collateral.
(a) Notwithstanding any provision herein to the contrary, The
Trust Estate or any part thereof shall be released from the security interest
created by this Deed of Trust at any time or from time to time upon the request
of the Trustor; provided that the requirements of the Credit Documents have been
satisfied. Upon satisfaction of such requirements, a Responsible Officer of the
Beneficiary shall instruct the Trustee to promptly execute, deliver and
acknowledge any necessary or proper instruments of termination, satisfaction or
release to evidence the release of any Trust Estate permitted to be released
pursuant to this Deed of Trust.
(b) The Beneficiary may instruct the Trustee to release Trust
Estate from the security interest created hereunder upon the sale or disposition
of such Trust Estate pursuant to the Beneficiary's powers, rights and duties
with respect to remedies provided herein.
5.19 Fixture Filing Under Uniform Commercial Code. Trustor and the
Beneficiary agree, to the extent permitted by law, that: (i) this Deed of Trust
upon recording or registration in the real estate records of the proper office
shall constitute a financing statement filed as a "fixture filing" within the
meaning of [SECTIONS 9-313 AND 9-402] of the UCC; and (ii) the addresses of
Trustor and Beneficiary are as set forth on the last page of this Deed of Trust.
5.20 Credit Agreement Controls. [EXCEPT WITH RESPECT TO SECTION 5.17
HEREOF,] In the event of any conflict between any terms and provisions set forth
in this Deed of Trust and those set forth in the Credit Agreement, the terms and
provisions of the Credit Agreement shall supersede and control the terms and
provisions of this Deed of Trust.
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Trustor has caused this Deed of Trust to be duly
executed and delivered as of the day and year first above written.
-------------------------,
a Delaware
---------------
By:
-------------------------------------------
Name:
Title:
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THE STATE OF :
:
COUNTY OF :
This instrument was acknowledged before me on _______________, 200__,
by _______________________________________, ____________________________________
President of _____ ____________________________________, a ______________
corporation, on behalf of such corporation.
_________________________________
Notary Public, State of _________
My Commission Expires:___________
_________________________________
Printed Name of Notary
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EXHIBIT A
DESCRIPTION OF [LEASED] PREMISES
358
EXHIBIT B
DESCRIPTION OF EASEMENTS
359
EXHIBIT C
PERMITTED ENCUMBRANCES
360
EXHIBIT D-3
to the Credit Agreement
RECORDING REQUESTED BY AND
WHEN RECORDED, RETURN TO:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ "▇" ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FORM OF
DEED OF TRUST, ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
DATED AS OF ____________, 200__
BY
A DELAWARE __________,
AS TRUSTOR
TO
[TITLE COMPANY],
AS TRUSTEE
FOR THE BENEFIT OF
CREDIT SUISSE FIRST BOSTON,
ACTING THROUGH ITS NEW YORK BRANCH,
AS ADMINISTRATIVE AGENT FOR THE BANKS,
AS BENEFICIARY
361
TABLE OF CONTENTS
Page
----
ARTICLE 1 - DEFINITIONS.......................................................................................... 4
1.1 DEFINED TERMS........................................................................................ 4
1.2 ACCOUNTING TERMS..................................................................................... 5
1.3 THE RULES OF INTERPRETATION.......................................................................... 5
ARTICLE 2 - GENERAL COVENANTS AND PROVISIONS..................................................................... 5
2.1 TRUSTOR PERFORMANCE OF CREDIT DOCUMENTS.............................................................. 5
2.2 GENERAL REPRESENTATIONS, COVENANTS AND WARRANTIES.................................................... 5
2.3 COMPLIANCE WITH LEGAL REQUIREMENTS................................................................... 6
2.4 INSURANCE; APPLICATION OF INSURANCE PROCEEDS; APPLICATION OF EMINENT DOMAIN PROCEEDS................. 6
2.5 ASSIGNMENT OF RENTS.................................................................................. 6
2.6 EXPENSES............................................................................................. 7
2.7 BENEFICIARY ASSUMES NO SECURED OBLIGATIONS........................................................... 7
2.8 FURTHER ASSURANCES................................................................................... 8
2.9 ACTS OF TRUSTOR...................................................................................... 8
2.10 AFTER-ACQUIRED PROPERTY.............................................................................. 8
2.11 SITE................................................................................................. 9
2.12 POWER OF ATTORNEY.................................................................................... 11
2.13 COVENANT TO PAY...................................................................................... 12
2.14 SECURITY AGREEMENT................................................................................... 12
ARTICLE 3 - REMEDIES............................................................................................. 13
3.1 ACCELERATION OF MATURITY............................................................................. 13
3.2 PROTECTIVE ADVANCES.................................................................................. 13
3.3 INSTITUTION OF EQUITY PROCEEDINGS.................................................................... 13
3.4 BENEFICIARY'S POWER OF ENFORCEMENT................................................................... 13
3.5 BENEFICIARY'S RIGHT TO ENTER AND TAKE POSSESSION, OPERATE AND APPLY INCOME........................... 15
3.6 SEPARATE SALES....................................................................................... 16
3.7 WAIVER OF APPRAISEMENT, VALUATION, STAY, EXTENSION AND REDEMPTION LAWS............................... 16
3.8 RECEIVER............................................................................................. 16
3.9 SUITS TO PROTECT THE TRUST ESTATE.................................................................... 17
3.10 PROOFS OF CLAIM...................................................................................... 17
3.11 TRUSTOR TO PAY AMOUNTS SECURED HEREBY ON ANY DEFAULT IN PAYMENT; APPLICATION OF MONIES BY
BENEFICIARY........................................................................................ 17
3.12 DELAY OR OMISSION; NO WAIVER......................................................................... 18
3.13 NO WAIVER OF ONE DEFAULT TO AFFECT ANOTHER........................................................... 18
3.14 DISCONTINUANCE OF PROCEEDINGS; POSITION OF PARTIES RESTORED.......................................... 19
3.15 REMEDIES CUMULATIVE.................................................................................. 19
3.16 INTEREST AFTER EVENT OF DEFAULT...................................................................... 19
3.17 FORECLOSURE; EXPENSES OF LITIGATION.................................................................. 19
3.18 DEFICIENCY JUDGMENTS................................................................................. 20
3.19 WAIVER OF JURY TRIAL................................................................................. 20
3.20 EXCULPATION OF BENEFICIARY........................................................................... 20
ARTICLE 4 - RIGHTS AND RESPONSIBILITIES OF TRUSTEE; OTHER PROVISIONS RELATING TO TRUSTEE......................... 20
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4.1 EXERCISE OF REMEDIES BY TRUSTEE...................................................................... 20
4.2 RIGHTS AND PRIVILEGES OF TRUSTEE..................................................................... 21
4.3 RESIGNATION OR REPLACEMENT OF TRUSTEE................................................................ 21
4.4 AUTHORITY OF BENEFICIARY............................................................................. 21
4.5 EFFECT OF APPOINTMENT OF SUCCESSOR TRUSTEE........................................................... 22
4.6 CONFIRMATION OF TRANSFER AND SUCCESSION.............................................................. 22
4.7 EXCULPATION.......................................................................................... 22
4.8 ENDORSEMENT AND EXECUTION OF DOCUMENTS............................................................... 22
4.9 MULTIPLE TRUSTEES.................................................................................... 22
4.10 NO REQUIRED ACTION................................................................................... 23
4.11 TERMS OF TRUSTEE'S ACCEPTANCE........................................................................ 23
ARTICLE 5 - GENERAL.............................................................................................. 23
5.1 DISCHARGE............................................................................................ 23
5.2 NO WAIVER............................................................................................ 23
5.3 EXTENSION, REARRANGEMENT OR RENEWAL OF SECURED OBLIGATIONS........................................... 24
5.4 FORCIBLE DETAINER.................................................................................... 24
5.5 WAIVER OF STAY OR EXTENSION.......................................................................... 24
5.6 NOTICES.............................................................................................. 24
5.7 SEVERABILITY......................................................................................... 25
5.8 APPLICATION OF PAYMENTS.............................................................................. 25
5.9 GOVERNING LAW........................................................................................ 25
5.10 ENTIRE AGREEMENT..................................................................................... 25
5.11 AMENDMENTS........................................................................................... 25
5.12 SUCCESSORS AND ASSIGNS............................................................................... 26
5.13 RENEWAL, ETC......................................................................................... 26
5.14 FUTURE ADVANCES...................................................................................... 26
5.15 LIABILITY............................................................................................ 26
5.16 [SEVERABILITY AND COMPLIANCE WITH USURY LAW.......................................................... 26
5.17 [SUBJECT TO GROUND LEASE............................................................................. 27
5.18 RELEASE OF COLLATERAL................................................................................ 27
5.19 FIXTURE FILING UNDER UNIFORM COMMERCIAL CODE......................................................... 27
5.20 CREDIT AGREEMENT CONTROLS............................................................................ 27
2
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EXHIBIT D4-A
BORROWER SECURITY AGREEMENT
This BORROWER SECURITY AGREEMENT (this "Agreement"), dated as
of October 16, 2000, is entered into by and between CALPINE CONSTRUCTION FINANCE
COMPANY II, LLC, a Delaware limited liability company ("Borrower"), and CREDIT
SUISSE FIRST BOSTON, acting through its New York Branch, as Administrative Agent
("Administrative Agent") for the Banks (as defined below).
PREFACE
A. Borrower, the financial institutions listed on Exhibit H to the Credit
Agreement (the "Banks"), Credit Suisse First Boston, acting through its New York
Branch, as Lead Arranger and Administrative Agent ("Administrative Agent"), The
Bank of Nova Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner, Banc
of America Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.)
Capital LLC, as Arranger and Co-Syndication Agent, Bayerische Landesbank
Girozentrale, as Arranger, Co-Documentation Agent and LC Bank, CIBC World
Markets Corp., as Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇
North America Services LLC, as Arranger and Co-Documentation Agent and TD
Securities (USA) Inc., as Arranger and Co-Documentation Agent, have entered into
that certain Credit Agreement, dated as of October 16, 2000 (as modified,
supplemented or amended from time to time, the "Credit Agreement"), pursuant to
which the Banks agreed to make certain advances of credit to Borrower in the
amounts specified and on the terms and subject to the conditions set forth
therein. For purposes of this Agreement, the term "Banks" shall include the
Administrative Agent, the Lead Arrangers, the Co-Syndication Agents, the
Bookrunner, the Co-Documentation Agents and the Banks (as such terms are defined
in the Credit Agreement).
B. As a condition precedent to the Banks' making the advances of credit
contemplated by the Credit Agreement, the Banks require that Borrower shall have
executed this Agreement.
AGREEMENT
In consideration of the promises contained herein, and in order to
induce the Banks to enter into the Credit Agreement and to make the advances of
credit pursuant to the terms thereof, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Borrower hereby agrees with Administrative Agent for the benefit of
Administrative Agent and the Banks as follows:
1. DEFINITIONS.
1.1 "UCC" shall mean the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of New York provided, however, in the
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a
364
jurisdiction other than the State of New York the term "UCC" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.
1.2 All capitalized terms used, but not otherwise defined herein, shall
have the meanings provided in the Credit Agreement. All other terms used herein
(whether or not capitalized) shall have the meanings given them in the UCC. The
rules of interpretation contained in Exhibit A to the Credit Agreement shall
apply to this Agreement.
2. ASSIGNMENT, PLEDGE AND GRANT OF SECURITY INTEREST.
2.1 To secure the timely payment and performance of the Obligations (as
defined in Section 3 hereof) Borrower does hereby assign, grant and pledge to,
and subject to a security interest in favor of, Administrative Agent, on behalf
of and for the benefit of Administrative Agent and the Banks, all the estate,
right, title and interest of Borrower, whether now owned or hereafter acquired,
in, to and under:
2.1.1 The following agreements and documents, as amended from
time to time (individually, an "Assigned Agreement," and collectively, the
"Assigned Agreements") and all of Borrower's rights thereunder:
(a) any Project Documents and Turbine Purchase Contracts to
which Borrower is or may become a party;
(b) the insurance policies maintained or required to be
maintained by Borrower or any other Person under the Credit Agreement,
including, without limitation, any such policies insuring against loss of
revenues by reason of interruption of the operation of a Project and all loss
proceeds and other amounts payable to Borrower thereunder, and all eminent
domain proceeds relating to any Project;
(c) to the extent assignable, all agreements, including vendor
warranties, running to Borrower or assigned to Borrower, relating to the
construction, maintenance, improvement, operation or acquisition of a Project or
Turbine or any part thereof, or transport of material, equipment and other parts
of a Project or any part thereof;
(d) any lease or sublease agreements or easement agreements,
including, without limitation, those relating to a Project or any part thereof
or any ancillary facilities, to which Borrower is or becomes a party;
(e) each Additional Project Document, and, to the extent
assignable, any other agreements to which Borrower may be or become a party,
including, without limitation, those relating to the construction or operation
of a Project or any part thereof or the purchase of a Turbine;
(f) all amendments, supplements, substitutions and renewals to
any of the aforesaid agreements; and
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(g) all Permits issued in the name of Borrower, but excluding
any of the Permits which by their terms or by operation of law prohibit or do
not allow assignment or which would become void solely by virtue of a security
interest being granted therein;
2.1.2 all rents, profits, income, distributions royalties and
revenues derived in any other manner by Borrower, including, without limitation,
those from its direct or indirect ownership of a Project, Turbine or Portfolio
Entity or any part thereof, including, without limitation, all Project Revenues
and all revenues from the sale of electricity, steam, heat, goods or services,
but excluding amounts distributed to Borrower under Waterfall Levels 8 and 10 of
Section 7.2.1 of the Credit Agreement;
2.1.3 all other personal property and fixtures of Borrower,
including, without limitation, those relating to any Project, Turbine or
Portfolio Entity, whether now owned or existing or hereafter acquired or
arising, or in which Borrower may have an interest, and wheresoever located,
whether or not of a type which may be subject to a security interest under the
UCC, including, without limitation, all machinery, tools, engines, turbines
(including combustion turbines and steam turbine generators), boilers, fuel
storage tanks, control equipment, appliances, mechanical and electrical systems,
elevators, lighting, alarm systems, fire control systems, furnishings,
furniture, as-extracted collateral, equipment, service equipment, motor
vehicles, building or maintenance equipment, building or maintenance materials,
pipes and pipelines supplies, goods and property covered by any warehouse
receipts or bills of lading or other such documents, spare parts, maps, plans,
specifications, architectural, engineering, construction or shop drawings,
manuals or similar documents, copyrights, trademarks and trade names, and any
replacements, renewals or substitutions for any of the foregoing or additional
tangible or intangible personal property hereafter acquired by Borrower;
2.1.4 all goods, money, instruments, investment securities,
investment property, accounts, contract rights, commercial tort claims, letters
of credit, letter of credit rights, payment intangibles, promissory notes,
software, supporting obligations, documents, deposit accounts, chattel paper
(including tangible and electronic chattel paper), general intangibles, and
inventory, including, without limitation, those relating directly or indirectly
to any Project, Turbine or Portfolio Entity;
2.1.5 the Portfolio Entity Note from Development Company (the
"Development Company Portfolio Entity Note") and the Portfolio Entity Note from
CCFC II Equipment Finance Company, LLC, a Delaware limited liability company;
2.1.6 all Accounts, including without limitation, the
Construction Accounts, the Revenue Accounts, the Loss Proceeds Account and the
Working Capital Reserve Accounts, including any sub-accounts within such
accounts; and
2.1.7 the proceeds of all of the foregoing (all of the
collateral described in clauses 2.1.1 through 2.1.7 being herein collectively
referred to as the "Collateral"), including, without limitation, (a) all rights
of Borrower to receive moneys due and to become due under or pursuant to the
Collateral; (b) all rights of Borrower to receive the return of any premiums
for, or proceeds of, any insurance, indemnity, warranty or guaranty with respect
to the Collateral or to
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receive any condemnation proceeds; (c) all claims of Borrower for damages
arising out of, or for breach of or default under, the Assigned Agreements or
any other Collateral; (d) all rights of Borrower to terminate, amend,
supplement, modify or waive performance under the Assigned Agreements, to
perform thereunder and to compel performance and otherwise exercise all remedies
thereunder; and (e) to the extent not included in the foregoing, all proceeds
receivable or received when any and all of the foregoing Collateral is sold,
collected, exchanged or otherwise disposed of, whether voluntarily or
involuntarily.
2.2 In order to effectuate the foregoing, Borrower has heretofore
delivered, or concurrently with the delivery hereof, is delivering to
Administrative Agent an executed counterpart or certified copy of each of the
Assigned Agreements. Borrower will likewise deliver to Administrative Agent an
executed counterpart of each future lease, construction agreement, operation
agreement and other agreement, including, without limitation, those relating to
a Project, Turbine or Portfolio Entity, or any part thereof, and amendments and
supplements to the foregoing, included in the Collateral, as they are entered
into by Borrower promptly upon the execution thereof. Notwithstanding anything
to the contrary contained herein, no such future lease, construction agreement,
operation agreement or other material agreement or any part thereof may be
entered into by Borrower except as permitted under the Credit Agreement.
2.3 Notwithstanding anything to the contrary contained herein, Borrower
shall remain liable under each of the Assigned Agreements to perform all of the
obligations undertaken by it thereunder, all in accordance with and pursuant to
the terms and provisions thereof, and Administrative Agent shall have no
obligation or liability under any of such Assigned Agreements by reason of or
arising out of this Agreement, nor shall Administrative Agent be required or
obligated in any manner to perform or fulfill any obligations of Borrower
thereunder or to make any payment or inquiry as to the nature or sufficiency of
any payment received by it, or present or file any claim or take any action to
collect or enforce the payment of any amounts which may have been assigned to it
or to which it may be entitled at any time.
2.4 If any default by Borrower under any of the Assigned Agreements
shall occur and be continuing, then Administrative Agent shall, at its option
and after the expiration of the applicable cure periods under Section 8.1.7 of
the Credit Agreement, be permitted (but shall not be obligated) to remedy any
such default by giving written notice of such intent to Borrower and to the
parties to the Assigned Agreement or Assigned Agreements for which
Administrative Agent intends to remedy the default. After giving such notice of
its intent to cure such default and upon the commencement thereof,
Administrative Agent will proceed diligently to cure such default. Any cure by
Administrative Agent of Borrower's default under any of the Assigned Agreements
shall not be construed as an assumption by Administrative Agent or any of the
Banks of any obligations, covenants or agreements of Borrower under such
Assigned Agreement, and neither Administrative Agent nor any of the Banks shall
be liable to Borrower or any other Person as a result of any actions undertaken
by Administrative Agent in curing or attempting to cure any such default, except
as set forth in Section 12.13 of the Credit Agreement. This Agreement shall not
be deemed to release or to affect in any way the obligations of Borrower under
the Assigned Agreements.
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3. OBLIGATIONS SECURED. Without limiting the generality of the foregoing,
this Agreement and all of the Collateral secure the payment and performance when
due of all Obligations (as defined in the Credit Agreement) of Borrower to the
Administrative Agent and the Banks (the "Obligations").
4. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower represents and
warrants as of the date hereof as follows:
4.1 Borrower has not assigned any of its rights under the Assigned
Agreements except as provided in the Credit Documents.
4.2 Borrower has not executed and is not aware of any effective
financing statement, security agreement or other instrument similar in effect
covering all or any part of the Collateral, except such as may have been filed
pursuant to this Agreement and the other Credit Documents or pursuant to the
documents evidencing Permitted Liens.
4.3 Except as permitted by the Credit Agreement, Borrower is lawfully
possessed of ownership of the Collateral and has full right, title and interest
in and to all rights purported to be granted to it under the Assigned
Agreements, not subject to any mortgages, liens, charges, or encumbrances except
Permitted Liens. Borrower has full power and lawful authority to grant and
assign the Collateral hereunder.
5. COVENANTS OF BORROWER. Borrower covenants as follows:
5.1 Any action or proceeding to enforce this Agreement or any Assigned
Agreement may be taken by Administrative Agent either in Borrower's name or in
Administrative Agent's name, as Administrative Agent may deem necessary.
5.2 Borrower will, so long as any Obligations shall be outstanding,
warrant and defend its title to the Collateral and the interest of
Administrative Agent in the Collateral against any claim or demand of any
persons (other than Permitted Liens) which could reasonably be expected to
materially adversely affect Borrower's title to, or Administrative Agent's right
or interest in, such Collateral.
5.3 Borrower will at all times keep accurate and complete records of
the Collateral. Borrower shall permit representatives of Administrative Agent
upon reasonable prior notice, and in accordance with Section 5.6 of the Credit
Agreement, at any time during normal business hours of Borrower to inspect and
make abstracts from Borrower's books and records pertaining to the Collateral.
Upon the occurrence and during the continuation of any Event of Default, at
Administrative Agent's request, Borrower shall promptly deliver copies of any
and all such records to Administrative Agent.
5.4 Unless waived in writing by Administrative Agent, Borrower shall
give Administrative Agent at least 45 days' notice before it changes the
location of its principal place of business, chief executive office or state of
organization and shall at the expense of Borrower execute and deliver such
instruments and documents as may reasonably be required by Administrative Agent
to maintain a prior perfected security interest in the Collateral.
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6. EVENTS OF DEFAULT. The occurrence of an Event of Default under the
Credit Agreement, whatever the reason therefor and whether it shall be voluntary
or involuntary or be effected by operation of law, or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body, shall constitute an event of default
hereunder (an "Event of Default").
7. REMEDIES UPON EVENT OF DEFAULT.
7.1 If any Event of Default has occurred and is continuing,
Administrative Agent may (1) declare any amounts payable by Borrower under the
Credit Agreement to be due and payable immediately and thereupon the same shall
become immediately due and payable (provided that if such Event of Default
occurs under Section 8.1.4 of the Credit Agreement with respect to Borrower, all
such amounts shall become automatically due and payable); (2) proceed to protect
and enforce the rights vested in it by this Agreement, including but not limited
to, the right to cause all revenues pledged hereby as security and all other
moneys pledged hereunder to be paid directly to it, and to enforce its rights
hereunder to such payments and all other rights hereunder by such appropriate
judicial proceedings as it shall deem most effective to protect and enforce any
of such rights, either at law or in equity or otherwise, whether for specific
enforcement of any covenant or agreement contained in any of the Assigned
Agreements, or in aid of the exercise of any power therein or herein granted, or
for any foreclosure hereunder and sale under a judgment or decree in any
judicial proceeding, or to enforce any other legal or equitable right vested in
it by this Agreement or by law; (3) cause any action at law or suit in equity or
other proceeding to be instituted and prosecuted to collect or enforce any
Obligations or rights hereunder or included in the Collateral, or to foreclose
or enforce any other agreement or other instrument by or under or pursuant to
which such Obligations are issued or secured, subject in each case to the
provisions and requirements thereof; (4) sell or otherwise dispose of any or all
of the Collateral or cause the Collateral to be sold or otherwise disposed of in
one or more sales or transactions, at such prices and in such manner as
Administrative Agent may deem commercially reasonable, and for cash or on credit
or for future delivery, without assumption of any credit risk at any broker's
board or at public or private sale, with or without a warranty of title, without
demand of performance or notice of intention to sell or of time or place of sale
(except such notice as is required by applicable statute and cannot be waived),
it being agreed that Administrative Agent may be a purchaser on behalf of the
Banks or on its own behalf at any such sale and that Administrative Agent, any
Bank, or any other Person who may be a bona fide purchaser for value and without
notice of any claims of any or all of the Collateral so sold shall thereafter
hold the same absolutely free from any claim or right of whatsoever kind,
including any equity of redemption, of Borrower, any such demand, notice or
right and equity being hereby expressly waived and released to the extent
permitted by law; (5) incur reasonable expenses, including reasonable attorneys'
fees, reasonable consultants' fees, and other costs appropriate to the exercise
of any right or power under this Agreement; (6) perform any obligation of
Borrower hereunder or under any other Credit Document, and make payments,
purchase, contest or compromise any encumbrance, charge or lien, and pay taxes
and expenses without, however, any obligation to do so; (7) in connection with
any acceleration and foreclosure, take possession of the Collateral and render
it usable and repair and renovate the same without, however, any obligation to
do so, and enter upon any Site or any other location where the same may be
located for that purpose, control, manage, operate, rent and lease the
Collateral, either separately or in
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conjunction with any Project, collect all rents and income from the Collateral
and apply the same to reimburse the Banks for any cost or expenses incurred
hereunder or under any of the Credit Documents and to the payment or performance
of Borrower's obligations hereunder or under any of the Credit Documents, and
apply the balance to the Loans of Borrower as provided for in the Credit
Agreement and any remaining excess balance to whomsoever is legally entitled
thereto; (8) secure the appointment of a receiver of the Collateral or any part
thereof; or (9) exercise any other or additional rights or remedies granted to a
secured party under the UCC. If pursuant to applicable law prior notice of any
such action is required to be given to Borrower, Borrower hereby acknowledges
that the minimum time required by such applicable law, or if no minimum time is
specified, 10 Banking Days, shall be deemed a reasonable notice period.
7.2 All reasonable costs and expenses (including reasonable attorneys'
fees and expenses) incurred by Administrative Agent in connection with any such
suit or proceeding or in connection with the performance by Administrative Agent
of any of Borrower's agreements contained in any of the Assigned Agreements or
any exercise of its rights or remedies hereunder, pursuant to the terms of this
Agreement, together with interest thereon (to the extent permitted by law)
computed at a rate per annum equal to the Default Rate from the date on which
such costs or expenses are incurred to the date of payment thereof, shall
constitute additional indebtedness secured by this Agreement and shall be paid
by Borrower to Administrative Agent on behalf of the Banks on demand.
8. REMEDIES CUMULATIVE; DELAY NOT WAIVER.
8.1 No right, power or remedy herein conferred upon or reserved to
Administrative Agent is intended to be exclusive of any other right, power or
remedy and every such right, power and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right, power and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder or otherwise shall not
prevent the concurrent assertion or employment of any other appropriate right or
remedy. Resort to any or all security now or hereafter held by Administrative
Agent may be taken concurrently or successively and in one or several
consolidated or independent judicial actions or lawfully taken nonjudicial
proceedings, or both.
8.2 No delay or omission of Administrative Agent to exercise any right
or power accruing upon the occurrence and during the continuance of any Event of
Default as aforesaid shall impair any such right or power or shall be construed
to be a waiver of any such Event of Default or an acquiescence therein; and
every power and remedy given by this Agreement may be exercised from time to
time, and as often as shall be deemed expedient, by Administrative Agent.
9. APPLICATION OF PROCEEDS. Upon the occurrence and during the continuation
of an Event of Default, the proceeds of any sale of or other realization upon,
all or any part of the Collateral shall be applied: first, to all fees, costs
and expenses incurred by and due and owing to Administrative Agent and the Banks
under the Credit Agreement, the other Credit Documents or the Collateral
Documents; second, to accrued and unpaid interest on the Obligations (including
any interest which, but for the provisions of the Bankruptcy Code, would have
accrued on such
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amounts); third, to the principal amounts of the Obligations outstanding;
fourth, to any other Obligations of Borrower owing to Administrative Agent or
the Banks; and fifth, to, or as directed by, Borrower.
10. ATTORNEY-IN-FACT. Borrower hereby constitutes and appoints
Administrative Agent, acting for and on behalf of itself and the Banks and each
successor or assign of Administrative Agent and the Banks, the true and lawful
attorney-in-fact of Borrower, with full power and authority in the place and
stead of Borrower and in the name of Borrower, Administrative Agent or otherwise
to enforce all rights, interests and remedies of Borrower with respect to the
Collateral, including, without limitation, the right:
10.1 to ask, require, demand, receive and give acquittance for any and
all moneys and claims for moneys due and to become due under or arising out of
the Assigned Agreements or any of the other Collateral, including without
limitation, any insurance policies;
10.2 to elect remedies thereunder and to endorse any checks or other
instruments or orders in connection therewith;
10.3 to file any claims or take any action or institute any proceedings
in connection therewith which Administrative Agent may reasonably deem to be
necessary or advisable;
10.4 to pay, settle or compromise all bills and claims which may be or
become liens or security interests against any or all of the Collateral, or any
part thereof, unless a bond or other security satisfactory to Administrative
Agent has been provided; and
10.5 upon foreclosure and to the extent provided in the Consents, to do
any and every act which Borrower may do on its behalf with respect to the
Collateral or any part thereof and to exercise any or all of Borrower's rights
and remedies under any or all of the Assigned Agreements;
provided, however, that Administrative Agent shall not exercise any such rights
except upon the occurrence and continuation of an Event of Default. This power
of attorney is a power coupled with an interest and shall be irrevocable.
11. ADMINISTRATIVE AGENT MAY PERFORM. Upon the occurrence and during the
continuance of an Event of Default, if Borrower fails to perform any agreement
contained herein, Administrative Agent may itself perform, or cause performance
of, such agreement, and the reasonable expenses of Administrative Agent incurred
in connection therewith shall be part of the Obligations.
12. PERFECTION; FURTHER ASSURANCES.
12.1 Borrower agrees that from time to time, at the expense of
Borrower, Borrower shall promptly execute and deliver all instruments and
documents, and take all action, that may be reasonably necessary, or that
Administrative Agent may reasonably request, in order to perfect and protect the
assignment and security interest granted or intended to be granted
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hereby or to enable Administrative Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, Borrower shall (i) with respect to the Development
Company Portfolio Entity Note and any other Collateral evidenced by a promissory
note or other instrument in excess of $5,000, deliver and pledge to
Administrative Agent for the benefit of the Banks such note duly endorsed
without recourse, and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to Administrative Agent; and
(ii) execute and deliver to Administrative Agent such financing or continuation
statements, or amendments thereto, and such other instruments, endorsements or
notices, as may be reasonably necessary or desirable or as Administrative Agent
may reasonably request, in order to perfect and preserve the assignments and
security interests granted or purported to be granted hereby.
12.2 Borrower hereby authorizes Administrative Agent to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of Borrower where
permitted by law.
12.3 Borrower shall pay all filing, registration and recording fees and
all refiling, re-registration and re-recording fees, and all reasonable expenses
incident to the execution and acknowledgment of this Agreement, any assurance,
and all federal, state, county and municipal stamp taxes and other taxes,
duties, imports, assessments and charges arising out of or in connection with
the execution and delivery of this Agreement, any agreement supplemental hereto,
any financing statements, and any instruments of further assurance.
12.4 Borrower shall, promptly upon request, provide to Administrative
Agent all information and evidence it may reasonably request concerning the
Collateral to enable Administrative Agent to enforce the provisions of this
Agreement.
13. PLACE OF BUSINESS; LOCATION OF RECORDS. Unless Administrative Agent is
otherwise notified under Section 5.4, the place of business and chief executive
office of Borrower is, and all records of Borrower concerning the Collateral are
and will be, located at the address set forth in Schedule 4.24 to the Credit
Agreement and Borrower is, and will be, a limited liability company organized
under the laws of the State of Delaware.
14. CONTINUING ASSIGNMENT AND SECURITY INTEREST; TRANSFER OF NOTES. This
Agreement shall create a continuing assignment of, and security interest in, the
Collateral and shall (a) remain in full force and effect until payment in full
of the Obligations, (b) be binding upon Borrower, its successors and assigns;
provided, however, that the obligations of Borrower, its successors and assigns
hereunder may not be assigned without the prior written consent of
Administrative Agent; and (c) inure, together with the rights and remedies of
Administrative Agent, to the benefit of Administrative Agent, the Banks and
their respective successors, transferees and assigns. Without limiting the
generality of the foregoing but subject to the terms of the Credit Agreement,
Administrative Agent or any of the Banks may assign or otherwise transfer all or
any part of or interest in the Notes and the other Credit Documents or other
evidence of indebtedness held by them to any other Person to the extent
permitted by and in accordance with the Credit Agreement, and such other Person
shall thereupon become vested with all or an appropriate part of the benefits in
respect thereof granted to the Banks herein or
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otherwise. The release of the security interest in any or all of the Collateral,
the taking or acceptance of additional security, or the resort by Administrative
Agent to any security it may have in any order it may deem appropriate, shall
not affect the liability of any person on the indebtedness secured hereby. If
this Agreement shall be terminated or revoked by operation of law, Borrower will
indemnify and save Administrative Agent and the Banks harmless from any loss
which may be suffered or incurred by Administrative Agent and the Banks in
acting hereunder prior to the receipt by Administrative Agent, its successors,
transferees, or assigns of notice of such termination or revocation.
15. TERMINATION OF SECURITY INTEREST. Upon the indefeasible payment in full
of the Obligations, the security interest granted hereby shall terminate and all
rights to the Collateral shall revert to Borrower. Upon any such termination,
Administrative Agent will, at Borrower's expense, execute and, subject to
Section 21 hereof, deliver to Borrower such documents (including, without
limitation, UCC-3 termination statements) as Borrower shall reasonably request
to evidence such termination.
16. ATTORNEYS' FEES. In the event any legal action or proceeding
(including, without limitation, any of the remedies provided for herein or at
law) is commenced to enforce or interpret this Agreement or any provision
thereof, unless Borrower is the prevailing party, Borrower shall indemnify each
of Administrative Agent and the Banks for their reasonable attorneys' fees and
other costs and expenses incurred therein, and if a judgment or award is entered
in any such action or proceeding, such reasonable attorneys' fees and other
costs and expenses may be made a part of such judgment or award.
17. LIABILITY. Recourse against the Borrower, the other Portfolio Entities,
the Member and their respective Affiliates, members, partners, stockholders,
officers, directors and employees under this Agreement shall be limited to the
extent provided in Article 9 of the Credit Agreement.
18. AMENDMENTS; WAIVERS; CONSENTS. No amendment, modification, termination
or waiver of any provision of this Agreement, or consent to any departure by
Borrower therefrom, shall in any event be effective without the written
concurrence of Administrative Agent and the Borrower.
19. NOTICES. All notices required or permitted under the terms and
provisions hereof shall be in writing and any such notice shall be effective if
given in accordance with the provisions of Section 12.1 of the Credit Agreement.
Notices to Borrower may be given at the address of Borrower set forth in such
Section 12.1.
20. GOVERNING LAW. This Agreement, including all matters of construction,
validity, performance and the creation, validity, enforcement or priority of the
lien of, and security interests created by, this Agreement in or upon the
Collateral shall be governed by the laws of the state of New York, without
reference to conflicts of law (other than Section 5-1401 of the New York General
Obligations Law), except as required by mandatory provisions of law and except
to the extent that the validity or perfection of the lien and security interest
hereunder, or remedies
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hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the state of New York.
21. REINSTATEMENT. This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any amount received by
Administrative Agent in respect of the Obligations is rescinded or must
otherwise be restored or returned by Administrative Agent upon the insolvency,
bankruptcy, reorganization, liquidation of Borrower or any general partner of
Borrower or upon the dissolution of, or appointment of any intervenor or
conservator of, or trustee or similar official for, Borrower or any general
partner of Borrower or any substantial part of Borrower's or any of its general
partners' assets, or otherwise, all as though such payments had not been made.
22. SEVERABILITY. The provisions of this Agreement are severable, and if
any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Agreement in any jurisdiction.
23. SURVIVAL OF PROVISIONS. All agreements, representations and warranties
made herein shall survive the execution and delivery of this Agreement and the
Credit Agreement and the making of the Loans and extensions of credit
thereunder. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements, representations and warranties of Borrower set forth
herein shall terminate only upon payment of the Obligations, and the termination
of all Commitments and other obligations of the Banks under the Credit
Documents.
24. HEADINGS DESCRIPTIVE. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
25. ENTIRE AGREEMENT. This Agreement, together with any other agreement
executed in connection herewith, is intended by the parties as a final
expression of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
26. TIME. Time is of the essence of this Agreement.
27. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
together constitute one and the same agreement.
28. WAIVER OF JURY TRIAL. BORROWER AND ADMINISTRATIVE AGENT HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP AMONG BORROWER AND
ADMINISTRATIVE AGENT THAT IS BEING ESTABLISHED. BORROWER AND ADMINISTRATIVE
AGENT ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
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INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THE WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO
RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWER AND ADMINISTRATIVE
AGENT FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the undersigned has caused this
Borrower Security Agreement to be duly executed and delivered as of the day and
year first above written.
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By:
---------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
as Administrative Agent
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
376
EXHIBIT D-4A
to the Credit Agreement
FORM
OF
BORROWER SECURITY AGREEMENT
Dated as of October 16, 2000
between
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
and
CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch,
as Administrative Agent
377
TABLE OF CONTENTS
PAGE
----
1. Definitions............................................................... 2
2. Assignment, Pledge and Grant of Security Interest......................... 2
3. Obligations Secured....................................................... 6
4. Representations and Warranties of Borrower................................ 6
5. Covenants of Borrower..................................................... 6
6. Events of Default......................................................... 7
7. Remedies Upon Event of Default............................................ 7
8. Remedies Cumulative; Delay Not Waiver..................................... 8
9. Application of Proceeds................................................... 9
10. Attorney-In-Fact.......................................................... 9
11. Administrative Agent May Perform.......................................... 10
12. Perfection; Further Assurances............................................ 10
13. Place of Business; Location of Records.................................... 11
14. Continuing Assignment and Security Interest; Transfer of Notes............ 11
15. Termination of Security Interest.......................................... 11
16. Attorneys' Fees........................................................... 11
17. Liability................................................................. 11
18. Amendments; Waivers; Consents............................................. 12
19. Notices................................................................... 12
20. Governing Law............................................................. 12
21. Reinstatement............................................................. 12
22. Severability.............................................................. 12
23. Survival of Provisions.................................................... 12
24. Headings Descriptive...................................................... 13
25. Entire Agreement.......................................................... 13
26. Time...................................................................... 13
27. Counterparts.............................................................. 13
28. Waiver of Jury Trial...................................................... 13
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EXHIBIT D4-B
PROJECT/TURBINE OWNER SECURITY AGREEMENT
This PROJECT/TURBINE OWNER SECURITY AGREEMENT (this
"Agreement"), dated as of _______, 200__, is entered into by and between [NAME
OF PROJECT/TURBINE OWNER], a Delaware _________ ("Owner"), and CREDIT SUISSE
FIRST BOSTON, acting through its New York Branch, as Administrative Agent
("Administrative Agent") for the Banks (as defined below).
PREFACE
A. [OWNER INTENDS TO CONSTRUCT AND OWN AND OPERATE THE _________ PROJECT
(THE "PROJECT").][OWNER INTENDS TO PURCHASE [DESCRIBE TURBINES] (THE
"TURBINE(S)") AND IN FURTHERANCE THEREOF HAS ENTERED INTO OR BEEN ASSIGNED
RIGHTS UNDER THAT CERTAIN [DESCRIBE TURBINE PURCHASE CONTRACT] DATED
____________, _______, BETWEEN [OWNER] AND [DESCRIBE TURBINE PURCHASE
CONTRACTOR] (THE "TURBINE PURCHASE CONTRACT").
B. Calpine Construction Finance Company II, LLC, a Delaware limited
liability company ("Borrower"), the financial institutions listed on Exhibit H
to the Credit Agreement (the "Banks"), Credit Suisse First Boston, acting
through its New York Branch, as Lead Arranger and Administrative Agent
("Administrative Agent"), The Bank of Nova Scotia, as Lead Arranger,
Co-Syndication Agent and Bookrunner, Banc of America Securities LLC, as Arranger
and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and Co-Syndication
Agent, Bayerische Landesbank Girozentrale, as Arranger, Co-Documentation Agent
and LC Bank, CIBC World Markets Corp., as Arranger and Co-Documentation Agent,
Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as Arranger and
Co-Documentation Agent and TD Securities (USA) Inc., as Arranger and
Co-Documentation Agent, have entered into that certain Credit Agreement, dated
as of October 16, 2000 (as modified, supplemented or amended from time to time,
the "Credit Agreement"), pursuant to which the Banks agreed to make certain
advances of credit to Borrower in the amounts specified and on the terms and
subject to the conditions set forth therein. For purposes of this Agreement, the
term "Banks" shall include the Administrative Agent, the Lead Arrangers, the
Co-Syndication Agents, the Bookrunner, the Co-Documentation Agents and the Banks
(as such terms are defined in the Credit Agreement).
C. Owner intends to finance certain [PROJECT][TURBINE] Costs associated
with Owner's [CONSTRUCTION AND OPERATION OF THE PROJECT][PURCHASE OF THE
TURBINE(S)] with funds borrowed by Borrower pursuant to the Credit Agreement.
D. [INSERT IF PROJECT OWNER][OWNER AND ADMINISTRATIVE AGENT ON BEHALF OF
THE BANKS HAVE ENTERED INTO THE PROJECT OWNER GUARANTY DATED AS OF _________,
200__ (THE "GUARANTY") PURSUANT TO WHICH OWNER HAS GUARANTEED THE OBLIGATIONS OF
EACH OF THE OTHER PORTFOLIO ENTITIES UNDER THE CREDIT DOCUMENTS, INCLUDING
BORROWER'S OBLIGATIONS UNDER THE CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS
TO WHICH BORROWER IS A PARTY.]
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E. As a condition precedent to the Banks' making the advances of credit
contemplated by the Credit Agreement, the Banks require that Owner shall have
executed this Agreement.
AGREEMENT
In consideration of the promises contained herein, and in order to induce
the Banks to enter into the Credit Agreement and to make the advances of credit
pursuant to the terms thereof, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Owner hereby agrees
with Administrative Agent for the benefit of Administrative Agent and the Banks
as follows:
1. DEFINITIONS.
1.1 "UCC" shall mean the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of New York [OR, WITH RESPECT TO THE
OPERATING ACCOUNT (AS DEFINED BELOW) ONLY, THE STATE OF ____________][IF PROJECT
OWNER, INSERT STATE WHERE OPERATING ACCOUNT HELD] provided, however, in the
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York [OR, IF APPLICABLE, THE STATE OF ____________][TO BE
USED FOR OPERATING ACCOUNT] the term "UCC" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.
1.2 All capitalized terms used, but not otherwise defined herein, shall
have the meanings provided in the Credit Agreement. All other terms used herein
(whether or not capitalized) shall have the meanings given them in the UCC. The
rules of interpretation contained in Exhibit A to the Credit Agreement shall
apply to this Agreement.
2. ASSIGNMENT, PLEDGE AND GRANT OF SECURITY INTEREST.
2.1 To secure the timely payment and performance of the Obligations (as
defined in Section 3 hereof) Owner does hereby assign, grant and pledge to, and
subject to a security interest in favor of, Administrative Agent, on behalf of
and for the benefit of Administrative Agent and the Banks, all the estate,
right, title and interest of Owner, whether now owned or hereafter acquired, in,
to and under:
2.1.1 The following agreements and documents, as amended from time to
time (individually, an "Assigned Agreement," and collectively, the "Assigned
Agreements") and all of Owner's rights thereunder:
(a) [INSERT IF PROJECT OWNER - IF AT CLOSING USE GENERAL
DEFINITIONS BELOW AND IF AT FUNDING INSERT DESCRIPTION OF
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SPECIFIC DOCUMENTS IN ADDITION TO GENERAL DEFINITIONS][ALL PROJECT DOCUMENTS
WITH RESPECT TO THE PROJECT TO WHICH OWNER IS OR MAY BECOME A PARTY FROM TIME TO
TIME INCLUDING;
(i) ANY POWER ISLAND SUPPLY CONTRACT;
(ii) ANY PRIME CONSTRUCTION CONTRACT;
(iii) ANY ENGINEERING CONTRACT;
(iv) ANY MAINTENANCE CONTRACT;
(v) ANY CONSTRUCTION MANAGEMENT AGREEMENT;
(vi) ANY PROJECT DOCUMENT RELATED TO THE DELIVERY OF
WATER TO THE PROJECTS;
(vii) ANY LEASE;
(viii) ANY O&M AGREEMENT;
(ix) ANY PROJECT MANAGEMENT AGREEMENT;
(x) ANY GAS SUPPLY CONTRACT;
(xi) ANY GAS TRANSPORTATION AGREEMENT;
(xii) ANY FUEL MANAGEMENT AGREEMENT;
(xiii) ANY POWER PURCHASE DOCUMENT;
(xiv) ANY POWER MARKETING AGREEMENT; AND
(xv) ANY EQUIPMENT LEASE;]
[INSERT IF TURBINE OWNER][OWNER'S INTEREST IN ANY TURBINE
PURCHASE CONTRACT AND ANY EQUIPMENT LEASE;]
(b) the insurance policies maintained or required to be
maintained by Owner or any other Person under the Credit Agreement [OR THE
TURBINE PURCHASE CONTRACT][OR ANY PROJECT DOCUMENT, INCLUDING, WITHOUT
LIMITATION, ANY SUCH POLICIES INSURING AGAINST LOSS OF REVENUES BY REASON OF
INTERRUPTION OF THE OPERATION OF THE PROJECT AND ALL LOSS PROCEEDS AND OTHER
AMOUNTS PAYABLE TO OWNER THEREUNDER, AND ALL EMINENT DOMAIN PROCEEDS RELATING TO
THE PROJECT];
(c) to the extent assignable, all other agreements, including
vendor warranties, running to Owner or assigned to Owner, relating to the
[CONSTRUCTION, MAINTENANCE, IMPROVEMENT, OPERATION OR ACQUISITION OF THE
PROJECT][PURCHASE OF THE TURBINE] or any part thereof,
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or transport of material, equipment and other parts of the [PROJECT][TURBINE] or
any part thereof;
(d) [INSERT IF PROJECT OWNER][ANY OTHER LEASE OR SUBLEASE
AGREEMENTS OR EASEMENT AGREEMENTS RELATING TO THE PROJECT OR ANY PART THEREOF OR
ANY ANCILLARY FACILITIES TO WHICH OWNER IS OR BECOMES A PARTY];
(e) [INSERT IF PROJECT OWNER][ANY TURBINE PURCHASE CONTRACT TO
WHICH OWNER IS OR BECOMES A PARTY];
(f) [INSERT IF PROJECT OWNER][EACH ADDITIONAL PROJECT
DOCUMENT, AND, TO THE EXTENT ASSIGNABLE, ANY OTHER AGREEMENTS TO WHICH OWNER MAY
BE OR BECOME A PARTY TO RELATING TO THE CONSTRUCTION OR OPERATION OF THE PROJECT
OR ANY PART THEREOF];
(g) all amendments, supplements, substitutions and renewals to
any of the aforesaid agreements; and
(h) [INSERT IF PROJECT OWNER][ALL PERMITS ISSUED IN THE NAME
OF THE OWNER BUT EXCLUDING ANY OF THE PERMITS WHICH BY THEIR TERMS OR BY
OPERATION OF LAW PROHIBIT OR DO NOT ALLOW ASSIGNMENT OR WHICH WOULD BECOME VOID
SOLELY BY VIRTUE OF A SECURITY INTEREST BEING GRANTED THEREIN];
2.1.2 [INSERT IF PROJECT OWNER][ALL RENTS, PROFITS, INCOME,
DISTRIBUTIONS, ROYALTIES AND REVENUES DERIVED IN ANY OTHER MANNER BY OWNER FROM
ITS OWNERSHIP OF THE PROJECT OR ANY PART THEREOF AND THE OPERATION OF THE
PROJECT OR ANY PART THEREOF, INCLUDING, WITHOUT LIMITATION, ALL PROJECT REVENUES
AND ALL REVENUES FROM THE SALE OF ELECTRICITY, STEAM, HEAT, GOODS OR SERVICES];
2.1.3 all other personal property and fixtures of Owner,
including without limitation personal property and fixtures relating to the
[PROJECT][TURBINE], whether now owned or existing or hereafter acquired or
arising, or in which Owner may have an interest, and wheresoever located,
whether or not of a type which may be subject to a security interest under the
UCC, including without limitation all machinery, tools, engines, turbines
(including combustion turbines and steam turbine generators), boilers, fuel
storage tanks, control equipment, appliances, mechanical and electrical systems,
elevators, lighting, alarm systems, fire control systems, furnishings,
furniture, as-extracted collateral, equipment, service equipment, motor
vehicles, building or maintenance equipment, building or maintenance materials,
pipes and pipelines supplies, goods and property covered by any warehouse
receipts or bills of lading or other such documents, spare parts, maps, plans,
specifications, architectural, engineering, construction or shop drawings,
manuals or similar documents, copyrights, trademarks and trade names, and any
replacements, renewals or substitutions for any of the foregoing or additional
tangible or intangible personal property hereafter acquired by Owner;
2.1.4 all goods, money, instruments, investment securities,
investment property, accounts, contract rights, commercial tort claims, letters
of credit, letter of credit rights, payment intangibles, promissory notes,
software, supporting obligations, documents, deposit
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accounts, chattel paper (including tangible and electronic chattel paper),
general intangibles, and inventory, including without limitation those relating
to the [PROJECT][TURBINE];
2.1.5 [INSERT IF PROJECT OWNER][THE ______________ (THE
"OPERATING ACCOUNT");] and
2.1.6 the proceeds of all of the foregoing (all of the
collateral described in clauses [2.1.1 THROUGH 2.1.6], being herein collectively
referred to as the "Collateral"), including without limitation, (a) all rights
of Owner to receive moneys due and to become due under or pursuant to the
Collateral; (b) all rights of Owner to receive the return of any premiums for,
or proceeds of, any insurance, indemnity, warranty or guaranty with respect to
the Collateral or to receive any condemnation proceeds; (c) all claims of Owner
for damages arising out of, or for breach of or default under, the Assigned
Agreements or any other Collateral; (d) all rights of Owner to terminate, amend,
supplement, modify or waive performance under the Assigned Agreements, to
perform thereunder and to compel performance and otherwise exercise all remedies
thereunder; and (e) to the extent not included in the foregoing, all proceeds
receivable or received when any and all of the foregoing Collateral is sold,
collected, exchanged or otherwise disposed of, whether voluntarily or
involuntarily.
2.2 In order to effectuate the foregoing, Owner has heretofore
delivered, or concurrently with the delivery hereof, is delivering to
Administrative Agent an executed counterpart or certified copy of each of the
Assigned Agreements. Owner will likewise deliver to Administrative Agent an
executed counterpart of each future lease, construction agreement, operation
agreement and other agreement, including without limitation those relating to
the [PROJECT][PURCHASE OF THE TURBINE] or any part thereof, and amendments and
supplements to the foregoing, included in the Collateral, as they are entered
into by Owner promptly upon the execution thereof. Notwithstanding anything to
the contrary contained herein, no such future lease, construction agreement,
operation agreement or other material agreement may be entered into by Owner
except as permitted under the Credit Documents.
2.3 Notwithstanding anything to the contrary contained herein, Owner
shall remain liable under each of the Assigned Agreements to perform all of the
obligations undertaken by it thereunder, all in accordance with and pursuant to
the terms and provisions thereof, and Administrative Agent shall have no
obligation or liability under any of such Assigned Agreements by reason of or
arising out of this Agreement, nor shall Administrative Agent be required or
obligated in any manner to perform or fulfill any obligations of Owner
thereunder or to make any payment or inquiry as to the nature or sufficiency of
any payment received by it, or present or file any claim or take any action to
collect or enforce the payment of any amounts which may have been assigned to it
or to which it may be entitled at any time.
2.4 If any default by Owner under any of the Assigned Agreements shall
occur and be continuing, then Administrative Agent shall, at its option and
after the expiration of the applicable cure periods under Section 8.1.7 of the
Credit Agreement, be permitted (but shall not be obligated) to remedy any such
default by giving written notice of such intent to Owner and to the parties to
the Assigned Agreement or Assigned Agreements for which Administrative Agent
intends to remedy the default. After giving such notice of its intent to cure
such default and upon
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the commencement thereof, Administrative Agent will proceed diligently to cure
such default. Any cure by Administrative Agent of Owner's default under any of
the Assigned Agreements shall not be construed as an assumption by
Administrative Agent or any of the Banks of any obligations, covenants or
agreements of Owner under such Assigned Agreement, and neither Administrative
Agent nor any of the Banks shall be liable to Owner or any other Person as a
result of any actions undertaken by Administrative Agent in curing or attempting
to cure any such default, except as set forth in Section 12.13 of the Credit
Agreement. This Agreement shall not be deemed to release or to affect in any way
the obligations of Owner under the Assigned Agreements.
3. OBLIGATIONS SECURED. Without limiting the generality of the foregoing,
this Agreement and all of the Collateral secure the payment and performance when
due of the [IF PROJECT OWNER: GUARANTEED OBLIGATIONS (AS DEFINED IN THE
GUARANTY) OF OWNER UNDER THE GUARANTY][IF TURBINE OWNER: OBLIGATIONS (AS DEFINED
IN THE CREDIT AGREEMENT) OF EACH OF THE PORTFOLIO ENTITIES (INCLUDING OWNER)
UNDER THE CREDIT DOCUMENTS, INCLUDING BORROWER'S OBLIGATIONS UNDER THE CREDIT
AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH BORROWER IS A PARTY] to the
Administrative Agent and the Banks (the "Obligations"); provided, however, the
Obligations as defined in this Section 3 shall not include any Obligations (as
defined in the Credit Agreement) of any Portfolio Entity under the Credit
Documents relating to or arising from Projects (as defined in the Credit
Agreement) that have achieved Operation prior to the effective date of this
Agreement.
4. REPRESENTATIONS AND WARRANTIES OF OWNER. Owner represents and warrants
as of the date hereof as follows:
4.1 Owner has not assigned any of its rights under the Assigned
Agreements except as provided in the Credit Documents.
4.2 Owner has not executed and is not aware of any effective financing
statement, security agreement or other instrument similar in effect covering all
or any part of the Collateral, except such as may have been filed pursuant to
this Agreement and the other Credit Documents or pursuant to the documents
evidencing Permitted Liens.
4.3 Except as permitted by the Credit Agreement, Owner is lawfully
possessed of ownership of the Collateral and has full right, title and interest
in and to all rights purported to be granted to it under the Assigned
Agreements, not subject to any mortgages, liens, charges, or encumbrances except
Permitted Liens. Owner has full power and lawful authority to grant and assign
the Collateral hereunder.
5. COVENANTS OF OWNER. Owner covenants as follows:
5.1 Any action or proceeding to enforce this Agreement or any Assigned
Agreement may be taken by Administrative Agent either in Owner's name or in
Administrative Agent's name, as Administrative Agent may deem necessary.
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5.2 Owner will, so long as any Obligations shall be outstanding,
warrant and defend its title to the Collateral and the interest of
Administrative Agent in the Collateral against any claim or demand of any
persons (other than Permitted Liens) which could reasonably be expected to
materially adversely affect Owner's title to, or Administrative Agent's right or
interest in, such Collateral.
5.3 Owner will at all times keep accurate and complete records of the
Collateral. Owner shall permit representatives of Administrative Agent upon
reasonable prior notice, and in accordance with Section 5.6 of the Credit
Agreement, at any time during normal business hours of Owner to inspect and make
abstracts from Owner's books and records pertaining to the Collateral. Upon the
occurrence and during the continuation of any Event of Default, at
Administrative Agent's request, Owner shall promptly deliver copies of any and
all such records to Administrative Agent.
5.4 Unless waived in writing by Administrative Agent, Owner shall give
Administrative Agent at least 45 days' notice before it changes the location of
its principal place of business, chief executive office or state of organization
and shall at the expense of Owner execute and deliver such instruments and
documents as may reasonably be required by Administrative Agent to maintain a
prior perfected security interest in the Collateral.
6. EVENTS OF DEFAULT. The occurrence of an Event of Default under the
Credit Agreement, whatever the reason therefor and whether it shall be voluntary
or involuntary or be effected by operation of law, or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body, shall constitute an event of default
hereunder (an "Event of Default").
7. REMEDIES UPON EVENT OF DEFAULT.
7.1 If any Event of Default has occurred and is continuing,
Administrative Agent may (a) proceed to protect and enforce the rights vested in
it by this Agreement, including but not limited to, the right to cause all
revenues pledged hereby as security and all other moneys pledged hereunder to be
paid directly to it, and to enforce its rights hereunder to such payments and
all other rights hereunder by such appropriate judicial proceedings as it shall
deem most effective to protect and enforce any of such rights, either at law or
in equity or otherwise, whether for specific enforcement of any covenant or
agreement contained in any of the Assigned Agreements, or in aid of the exercise
of any power therein or herein granted, or for any foreclosure hereunder and
sale under a judgment or decree in any judicial proceeding, or to enforce any
other legal or equitable right vested in it by this Agreement or by law; (b)
cause any action at law or suit in equity or other proceeding to be instituted
and prosecuted to collect or enforce any Obligations or rights hereunder or
included in the Collateral, or to foreclose or enforce any other agreement or
other instrument by or under or pursuant to which such Obligations are issued or
secured, subject in each case to the provisions and requirements thereof; (c)
sell or otherwise dispose of any or all of the Collateral or cause the
Collateral to be sold or otherwise disposed of in one or more sales or
transactions, at such prices and in such manner as Administrative Agent may deem
commercially reasonable, and for cash or on credit or for future delivery,
without assumption of any credit risk at any broker's board or at public or
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private sale, with or without a warranty of title, without demand of
performance or notice of intention to sell or of time or place of sale (except
such notice as is required by applicable statute and cannot be waived), it being
agreed that Administrative Agent may be a purchaser on behalf of the Banks or on
its own behalf at any such sale and that Administrative Agent, any Bank, or any
other Person who may be a bona fide purchaser for value and without notice of
any claims of any or all of the Collateral so sold shall thereafter hold the
same absolutely free from any claim or right of whatsoever kind, including any
equity of redemption, of Owner, any such demand, notice or right and equity
being hereby expressly waived and released to the extent permitted by law; (d)
incur reasonable expenses, including reasonable attorneys' fees, reasonable
consultants' fees, and other costs appropriate to the exercise of any right or
power under this Agreement; (e) perform any obligation of Owner hereunder or
under any other Credit Document, and make payments, purchase, contest or
compromise any encumbrance, charge or lien, and pay taxes and expenses without,
however, any obligation to do so; (f) in connection with any acceleration and
foreclosure, take possession of the Collateral and render it usable and repair
and renovate the same without, however, any obligation to do so, and enter upon
any Site or any other location where the same may be located for that purpose,
control, manage, operate, rent and lease the Collateral[, EITHER SEPARATELY OR
IN CONJUNCTION WITH THE PROJECT], collect all rents and income from the
Collateral and apply the same to reimburse the Banks for any cost or expenses
incurred hereunder or under any of the Credit Documents and to the payment or
performance of Owner's obligations hereunder or under any of the Credit
Documents, and apply the balance to the Loans of Borrower as provided for in the
Credit Agreement and any remaining excess balance to whomsoever is legally
entitled thereto; (g) secure the appointment of a receiver of the Collateral or
any part thereof; or (h) exercise any other or additional rights or remedies
granted to a secured party under the UCC. If pursuant to applicable law prior
notice of any such action is required to be given to Owner, Owner hereby
acknowledges that the minimum time required by such applicable law, or if no
minimum time is specified, 10 Banking Days, shall be deemed a reasonable notice
period.
7.2 All reasonable costs and expenses (including reasonable attorneys'
fees and expenses) incurred by Administrative Agent in connection with any such
suit or proceeding or in connection with the performance by Administrative Agent
of any of Owner's agreements contained in any of the Assigned Agreements or any
exercise of its rights or remedies hereunder, pursuant to the terms of this
Agreement, together with interest thereon (to the extent permitted by law)
computed at a rate per annum equal to the Default Rate from the date on which
such costs or expenses are incurred to the date of payment thereof, shall
constitute additional indebtedness secured by this Agreement and shall be paid
by Owner to Administrative Agent on behalf of the Banks on demand.
8. REMEDIES CUMULATIVE; DELAY NOT WAIVER.
8.1 No right, power or remedy herein conferred upon or reserved to
Administrative Agent is intended to be exclusive of any other right, power or
remedy and every such right, power and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right, power and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder or otherwise shall not
prevent the concurrent assertion or employment of any other appropriate right or
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remedy. Resort to any or all security now or hereafter held by Administrative
Agent may be taken concurrently or successively and in one or several
consolidated or independent judicial actions or lawfully taken nonjudicial
proceedings, or both.
8.2 No delay or omission of Administrative Agent to exercise any right
or power accruing upon the occurrence and during the continuance of any Event of
Default as aforesaid shall impair any such right or power or shall be construed
to be a waiver of any such Event of Default or an acquiescence therein; and
every power and remedy given by this Agreement may be exercised from time to
time, and as often as shall be deemed expedient, by Administrative Agent.
9. APPLICATION OF PROCEEDS. Upon the occurrence and during the continuation
of an Event of Default, the proceeds of any sale of or other realization upon,
all or any part of the Collateral shall be applied: first, to all fees, costs
and expenses incurred by and due and owing to Administrative Agent and the Banks
under the Credit Agreement, the other Credit Documents or the Collateral
Documents; second, to accrued and unpaid interest on the Obligations (including
any interest which, but for the provisions of the Bankruptcy Code, would have
accrued on such amounts); third, to the principal amounts of the Obligations
outstanding; fourth, to any other Obligations of Owner owing to Administrative
Agent or the Banks; and fifth, to, or as directed by, Owner.
10. ATTORNEY-IN-FACT. Owner hereby constitutes and appoints Administrative
Agent, acting for and on behalf of itself and the Banks and each successor or
assign of Administrative Agent and the Banks, the true and lawful
attorney-in-fact of Owner, with full power and authority in the place and stead
of Owner and in the name of Owner, Administrative Agent or otherwise to enforce
all rights, interests and remedies of Owner with respect to the Collateral,
including, without limitation, the right:
10.1 to ask, require, demand, receive and give acquittance for any and
all moneys and claims for moneys due and to become due under or arising out of
the Assigned Agreements or any of the other Collateral, including without
limitation, any insurance policies;
10.2 to elect remedies thereunder and to endorse any checks or other
instruments or orders in connection therewith;
10.3 to file any claims or take any action or institute any proceedings
in connection therewith which Administrative Agent may reasonably deem to be
necessary or advisable;
10.4 to pay, settle or compromise all bills and claims which may be or
become liens or security interests against any or all of the Collateral, or any
part thereof, unless a bond or other security satisfactory to Administrative
Agent has been provided; and
10.5 upon foreclosure and to the extent provided in the Consents, to do
any and every act which Owner may do on its behalf with respect to the
Collateral or any part thereof
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and to exercise any or all of Owner's rights and remedies under any or all of
the Assigned Agreements;
provided, however, that Administrative Agent shall not exercise any such rights
except upon the occurrence and continuation of an Event of Default. This power
of attorney is a power coupled with an interest and shall be irrevocable.
11. ADMINISTRATIVE AGENT MAY PERFORM. Upon the occurrence and during the
continuance of an Event of Default, if Owner fails to perform any agreement
contained herein, Administrative Agent may itself perform, or cause performance
of, such agreement, and the reasonable expenses of Administrative Agent incurred
in connection therewith shall be part of the Obligations.
12. PERFECTION; FURTHER ASSURANCES.
12.1 Owner agrees that from time to time, at the expense of Owner,
Owner shall promptly execute and deliver all instruments and documents, and take
all action, that may be reasonably necessary, or that Administrative Agent may
reasonably request, in order to perfect and protect the assignment and security
interest granted or intended to be granted hereby or to enable Administrative
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Collateral. Without limiting the generality of the foregoing, Owner shall
(a) if any Collateral shall be evidenced by a promissory note or other
instrument in excess of $5,000, deliver and pledge to Administrative Agent for
the benefit of the Banks such note duly endorsed without recourse, and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to Administrative Agent; and (b) execute and deliver
to Administrative Agent such financing or continuation statements, or amendments
thereto, and such other instruments, endorsements or notices, as may be
reasonably necessary or desirable or as Administrative Agent may reasonably
request, in order to perfect and preserve the assignments and security interests
granted or purported to be granted hereby.
12.2 Owner hereby authorizes Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of Owner where permitted by
law.
12.3 Owner shall pay all filing, registration and recording fees and
all refiling, re-registration and re-recording fees, and all reasonable expenses
incident to the execution and acknowledgment of this Agreement, any assurance,
and all federal, state, county and municipal stamp taxes and other taxes,
duties, imports, assessments and charges arising out of or in connection with
the execution and delivery of this Agreement, any agreement supplemental hereto,
any financing statements, and any instruments of further assurance.
12.4 Owner shall, promptly upon request, provide to Administrative
Agent all information and evidence it may reasonably request concerning the
Collateral to enable Administrative Agent to enforce the provisions of this
Agreement.
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13. PLACE OF BUSINESS; LOCATION OF RECORDS. Unless Administrative Agent is
otherwise notified under Section 5.4, the place of business and chief executive
office of Owner is, and all records of Owner concerning the Collateral are and
will be, located at the address set forth in Schedule 4.24 to the Credit
Agreement and Owner is, and will be, a _________ organized under the laws of the
state of Delaware.
14. CONTINUING ASSIGNMENT AND SECURITY INTEREST; [FOR PROJECT OWNERS ONLY:
TRANSFER OF GUARANTY]. This Agreement shall create a continuing assignment of,
and security interest in, the Collateral and shall (a) remain in full force and
effect until payment in full of the Obligations, (b) be binding upon Owner, its
successors and assigns; provided, however, that the obligations of Owner, its
successors and assigns hereunder may not be assigned without the prior written
consent of Administrative Agent; and (c) inure, together with the rights and
remedies of Administrative Agent, to the benefit of Administrative Agent, the
Banks and their respective successors, transferees and assigns. Without limiting
the generality of the foregoing but subject to the terms of the Credit
Agreement, Administrative Agent or any of the Banks may assign or otherwise
transfer all or any part of or interest in the Notes and the other Credit
Documents[INSERT IF PROJECT OWNER: , INCLUDING THE GUARANTY,] or other evidence
of indebtedness held by them to any other Person to the extent permitted by and
in accordance with the Credit Agreement, and such other Person shall thereupon
become vested with all or an appropriate part of the benefits in respect thereof
granted to the Banks herein or otherwise. The release of the security interest
in any or all of the Collateral, the taking or acceptance of additional
security, or the resort by Administrative Agent to any security it may have in
any order it may deem appropriate, shall not affect the liability of any person
on the indebtedness secured hereby. If this Agreement shall be terminated or
revoked by operation of law, Owner will indemnify and save Administrative Agent
and the Banks harmless from any loss which may be suffered or incurred by
Administrative Agent and the Banks in acting hereunder prior to the receipt by
Administrative Agent, its successors, transferees, or assigns of notice of such
termination or revocation.
15. TERMINATION OF SECURITY INTEREST. Upon the indefeasible payment in full
of the Obligations, the security interest granted hereby shall terminate and all
rights to the Collateral shall revert to Owner. Upon any such termination,
Administrative Agent will, at Owner's expense, execute and, subject to Section
21 hereof, deliver to Owner such documents (including, without limitation, UCC-3
termination statements) as Owner shall reasonably request to evidence such
termination.
16. ATTORNEYS' FEES. In the event any legal action or proceeding
(including, without limitation, any of the remedies provided for herein or at
law) is commenced to enforce or interpret this Agreement or any provision
thereof, unless Owner is the prevailing party, Owner shall indemnify each of
Administrative Agent and the Banks for their reasonable attorneys' fees and
other costs and expenses incurred therein, and if a judgment or award is entered
in any such action or proceeding, such reasonable attorneys' fees and other
costs and expenses may be made a part of such judgment or award.
17. LIABILITY. Recourse against the Owner, the other Portfolio Entities,
the Member and their respective Affiliates, members, partners, stockholders,
officers, directors and employees
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under this Agreement shall be limited to the extent provided in Article 9 of the
Credit Agreement.
18. AMENDMENTS; WAIVERS; CONSENTS. No amendment, modification, termination
or waiver of any provision of this Agreement, or consent to any departure by
Owner therefrom, shall in any event be effective without the written concurrence
of Administrative Agent and the Owner.
19. NOTICES. All notices required or permitted under the terms and
provisions hereof shall be in writing and any such notice shall be effective if
given in accordance with the provisions of Section 12.1 of the Credit Agreement.
Notices to Owner may be given at the address of Borrower set forth in such
Section 12.1.
20. GOVERNING LAW. This Agreement, including all matters of construction,
validity, performance and the creation, validity, enforcement or priority of the
lien of, and security interests created by, this Agreement in or upon the
Collateral shall be governed by the laws of the state of New York, without
reference to conflicts of law (other than Section 5-1401 of the New York General
Obligations Law), except as required by mandatory provisions of law and except
to the extent that the validity or perfection of the lien and security interest
hereunder, or remedies hereunder, in respect of any particular Collateral are
governed by the laws of a jurisdiction other than the state of New York. [INSERT
FOR PROJECT OWNER][NOTWITHSTANDING THE FOREGOING, THE VALIDITY, PERFECTION AND
PRIORITY OF THE LIEN AND SECURITY INTEREST CREATED HEREUNDER IN RESPECT TO THE
OPERATING ACCOUNT IS GOVERNED BY THE LAWS OF THE STATE OF ________ [INSERT STATE
WHERE OPERATING ACCOUNT HELD].
21. REINSTATEMENT. This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any amount received by
Administrative Agent in respect of the Obligations is rescinded or must
otherwise be restored or returned by Administrative Agent upon the insolvency,
bankruptcy, reorganization, liquidation of Owner or any general partner of Owner
or upon the dissolution of, or appointment of any intervenor or conservator of,
or trustee or similar official for, Owner or any general partner of Owner or any
substantial part of Owner's or any of its general partners' assets, or
otherwise, all as though such payments had not been made.
22. SEVERABILITY. The provisions of this Agreement are severable, and if
any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Agreement in any jurisdiction.
23. SURVIVAL OF PROVISIONS. All agreements, representations and warranties
made herein shall survive the execution and delivery of this Agreement and the
Credit Agreement and the making of the Loans and extensions of credit
thereunder. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements, representations and warranties of Owner set forth
herein shall terminate only upon payment of the Obligations, and the termination
of all Commitments and other obligations of the Banks under the Credit
Documents.
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24. HEADINGS DESCRIPTIVE. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
25. ENTIRE AGREEMENT. This Agreement, together with any other agreement
executed in connection herewith, is intended by the parties as a final
expression of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
26. TIME. Time is of the essence of this Agreement.
27. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
together constitute one and the same agreement.
28. WAIVER OF JURY TRIAL. OWNER AND ADMINISTRATIVE AGENT HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP AMONG OWNER AND
ADMINISTRATIVE AGENT THAT IS BEING ESTABLISHED. OWNER AND ADMINISTRATIVE AGENT
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. OWNER AND ADMINISTRATIVE AGENT FURTHER WARRANT AND REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.
29. ADDITIONAL WAIVERS. [TO INSERT IF TURBINE OWNER] [OWNER HEREBY WAIVES
AND RELINQUISHES ALL RIGHTS AND REMEDIES ACCORDED BY APPLICABLE LAW TO SURETIES
OR GUARANTORS AND AGREES NOT TO ASSERT OR TAKE ADVANTAGE OF ANY SUCH RIGHTS OR
REMEDIES, INCLUDING WITHOUT LIMITATION (a) ANY RIGHT TO REQUIRE ADMINISTRATIVE
AGENT OR THE BANKS TO PROCEED AGAINST ANY PORTFOLIO ENTITY OR ANY OTHER PERSON
OR TO PROCEED AGAINST OR EXHAUST ANY SECURITY HELD BY ADMINISTRATIVE AGENT OR
THE BANKS AT ANY TIME OR TO PURSUE ANY OTHER REMEDY IN ADMINISTRATIVE AGENT'S OR
THE BANKS' POWER BEFORE PROCEEDING AGAINST OWNER, (b) ANY DEFENSE THAT MAY ARISE
BY REASON OF THE INCAPACITY, LACK OF POWER OR AUTHORITY, DEATH, DISSOLUTION,
MERGER, TERMINATION OR DISABILITY OF ANY PORTFOLIO ENTITY OR ANY OTHER PERSON OR
THE FAILURE OF ADMINISTRATIVE AGENT OR THE BANKS TO FILE OR ENFORCE A CLAIM
AGAINST THE ESTATE (IN ADMINISTRATION, BANKRUPTCY OR ANY OTHER PROCEEDING) OF
ANY PORTFOLIO ENTITY OR ANY OTHER PERSON, (c) DEMAND, PRESENTMENT, PROTEST AND
NOTICE OF ANY KIND, INCLUDING WITHOUT LIMITATION NOTICE OF THE EXISTENCE,
CREATION OR INCURRING OF ANY NEW OR ADDITIONAL INDEBTEDNESS OR OBLIGATION OR OF
ANY ACTION OR NON-ACTION ON THE PART OF ANY PORTFOLIO ENTITY, ADMINISTRATIVE
AGENT, THE BANKS, ANY ENDORSER OR CREDITOR OF THE FOREGOING OR ON THE PART OF
ANY OTHER PERSON UNDER THIS OR ANY OTHER INSTRUMENT IN CONNECTION WITH ANY
OBLIGATION OR EVIDENCE OF INDEBTEDNESS HELD BY ADMINISTRATIVE AGENT OR THE BANKS
AS
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391
COLLATERAL OR IN CONNECTION WITH ANY OBLIGATIONS, (d) ANY DEFENSE BASED UPON AN
ELECTION OF REMEDIES BY ADMINISTRATIVE AGENT OR THE BANKS, INCLUDING WITHOUT
LIMITATION AN ELECTION TO PROCEED BY NON-JUDICIAL RATHER THAN JUDICIAL
FORECLOSURE, WHICH DESTROYS OR OTHERWISE IMPAIRS THE SUBROGATION RIGHTS OF
OWNER, THE RIGHT OF OWNER TO PROCEED AGAINST A PORTFOLIO ENTITY OR ANOTHER
PERSON FOR REIMBURSEMENT, OR BOTH, (e) ANY DEFENSE BASED ON ANY OFFSET AGAINST
ANY AMOUNTS WHICH MAY BE OWED BY ANY PERSON TO OWNER FOR ANY REASON WHATSOEVER,
(f) ANY DEFENSE BASED ON ANY ACT, FAILURE TO ACT, DELAY OR OMISSION WHATSOEVER
ON THE PART OF A PORTFOLIO ENTITY OF THE FAILURE BY A PORTFOLIO ENTITY TO DO ANY
ACT OR THING OR TO OBSERVE OR PERFORM ANY COVENANT, CONDITION OR AGREEMENT TO BE
OBSERVED OR PERFORMED BY IT UNDER THE CREDIT DOCUMENTS, (g) ANY DEFENSE BASED
UPON ANY STATUTE OR RULE OF LAW WHICH PROVIDES THAT THE OBLIGATION OF A SURETY
MUST BE NEITHER LARGER IN AMOUNT NOR IN OTHER RESPECTS MORE BURDENSOME THAN THAT
OF THE PRINCIPAL PROVIDED, THAT, UPON PAYMENT IN FULL OF THE OBLIGATIONS, THIS
AGREEMENT SHALL NO LONGER BE OF ANY FORCE OR EFFECT, (h) ANY DEFENSE, SETOFF OR
COUNTERCLAIM WHICH MAY AT ANY TIME BE AVAILABLE TO OR ASSERTED BY A PORTFOLIO
ENTITY AGAINST ADMINISTRATIVE AGENT, THE BANKS OR ANY OTHER PERSON UNDER THE
CREDIT DOCUMENTS, (i) ANY DUTY ON THE PART OF ADMINISTRATIVE AGENT OR THE BANKS
TO DISCLOSE TO OWNER ANY FACTS ADMINISTRATIVE AGENT OR THE BANKS MAY NOW OR
HEREAFTER KNOW ABOUT ANY PORTFOLIO ENTITY, REGARDLESS OF WHETHER ADMINISTRATIVE
AGENT OR THE BANKS HAVE REASON TO BELIEVE THAT ANY SUCH FACTS MATERIALLY
INCREASE THE RISK BEYOND THAT WHICH OWNER INTENDS TO ASSUME, OR HAVE REASON TO
BELIEVE THAT SUCH FACTS ARE UNKNOWN TO OWNER, OR HAVE A REASONABLE OPPORTUNITY
TO COMMUNICATE SUCH FACTS TO OWNER, SINCE OWNER ACKNOWLEDGES THAT OWNER IS FULLY
RESPONSIBLE FOR BEING AND KEEPING INFORMED OF THE FINANCIAL CONDITION OF THE
PORTFOLIO ENTITIES AND OF ALL CIRCUMSTANCES BEARING ON THE RISK OF NON-PAYMENT
OF ANY OBLIGATIONS AND LIABILITIES HEREBY GUARANTEED, (j) THE FACT THAT ANY
PORTFOLIO ENTITY MAY AT ANY TIME IN THE FUTURE DISPOSE OF ALL OR PART OF ITS
DIRECT OR INDIRECT INTEREST IN ANY OTHER PORTFOLIO ENTITY, (k) ANY DEFENSE BASED
ON ANY CHANGE IN THE TIME, MANNER OR PLACE OF ANY PAYMENT UNDER, OR IN ANY OTHER
TERM OF, THE CREDIT DOCUMENTS OR ANY OTHER AMENDMENT, RENEWAL, EXTENSION,
ACCELERATION, COMPROMISE OR WAIVER OF OR ANY CONSENT OR DEPARTURE FROM THE TERMS
OF THE CREDIT DOCUMENTS, (l) ANY DEFENSE ARISING BECAUSE OF ADMINISTRATIVE
AGENT'S OR THE BANKS' ELECTION, IN ANY PROCEEDING INSTITUTED UNDER THE FEDERAL
BANKRUPTCY CODE, OF THE APPLICATION OF SECTION 1111(b)(2) OF THE FEDERAL
BANKRUPTCY CODE, AND (m) ANY DEFENSE BASED UPON ANY BORROWING OR GRANT OF A
SECURITY INTEREST UNDER SECTION 364 OF THE FEDERAL BANKRUPTCY CODE.]
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the undersigned has caused this
Project/Turbine Owner Security Agreement to be duly executed and delivered as of
the day and year first above written.
[NAME OF PROJECT/TURBINE OWNER],
a Delaware
-----------------------------
By:
-------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
as Administrative Agent
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
393
EXHIBIT D-4B
to the Credit Agreement
FORM
OF
PROJECT/TURBINE OWNER SECURITY AGREEMENT
Dated as of __________, 200__
between
[NAME OF PROJECT/TURBINE OWNER]
a Delaware ___________
and
CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch,
as Administrative Agent
394
TABLE OF CONTENTS
PAGE
----
1. Definitions............................................................................................. 2
2. Assignment, Pledge and Grant of Security Interest....................................................... 2
3. Obligations Secured..................................................................................... 4
4. Representations and Warranties of Owner................................................................. 4
5. Covenants of Owner...................................................................................... 5
6. Events of Default....................................................................................... 5
7. Remedies Upon Event of Default.......................................................................... 5
8. Remedies Cumulative; Delay Not Waiver................................................................... 7
9. Application of Proceeds................................................................................. 7
10. Attorney-In-Fact........................................................................................ 7
11. Administrative Agent May Perform........................................................................ 8
12. Perfection; Further Assurances.......................................................................... 8
13. Place of Business; Location of Records.................................................................. 9
14. Continuing Assignment and Security Interest; [for Project Owners only: Transfer of
Guaranty]............................................................................................... 9
15. Termination of Security Interest........................................................................ 9
16. Attorneys' Fees......................................................................................... 9
17. Liability............................................................................................... 10
18. Amendments; Waivers; Consents........................................................................... 10
19. Notices................................................................................................. 10
20. Governing Law........................................................................................... 10
21. Reinstatement........................................................................................... 10
22. Severability............................................................................................ 10
23. Survival of Provisions.................................................................................. 10
24. Headings Descriptive.................................................................................... 11
25. Entire Agreement........................................................................................ 11
26. Time.................................................................................................... 11
27. Counterparts............................................................................................ 11
28. Waiver of Jury Trial.................................................................................... 11
29. Additional Waivers...................................................................................... 11
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EXHIBIT D4-C
DEVELOPMENT COMPANY SECURITY AGREEMENT
This DEVELOPMENT COMPANY SECURITY AGREEMENT (this
"Agreement"), dated as of __________________, __________, is entered into by and
between CCFC II DEVELOPMENT COMPANY, LLC, a Delaware limited liability company
("Owner"), and CREDIT SUISSE FIRST BOSTON, acting through its New York Branch,
as Administrative Agent ("Administrative Agent") for the Banks (as defined
below).
PREFACE
A. Calpine Construction Finance Company II, LLC, a Delaware limited
liability company ("Borrower"), the financial institutions listed on Exhibit H
to the Credit Agreement (the "Banks"), Credit Suisse First Boston, acting
through its New York Branch, as Lead Arranger and Administrative Agent
("Administrative Agent"), The Bank of Nova Scotia, as Lead Arranger,
Co-Syndication Agent and Bookrunner, Banc of America Securities LLC, as Arranger
and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and Co-Syndication
Agent, Bayerische Landesbank Girozentrale, as Arranger, Co-Documentation Agent
and LC Bank, CIBC World Markets Corp., as Arranger and Co-Documentation Agent,
Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as Arranger and
Co-Documentation Agent and TD Securities (USA) Inc., as Arranger and
Co-Documentation Agent, have entered into that certain Credit Agreement, dated
as of October 16, 2000 (as modified, supplemented or amended from time to time,
the "Credit Agreement"), pursuant to which the Banks agreed to make certain
advances of credit to Borrower in the amounts specified and on the terms and
subject to the conditions set forth therein. For purposes of this Agreement, the
term "Banks" shall include the Administrative Agent, the Lead Arrangers, the
Co-Syndication Agents, the Bookrunner, the Co-Documentation Agents and the Banks
(as such terms are defined in the Credit Agreement).
B. Owner is a wholly-owned Subsidiary of Borrower and certain Portfolio
Entities (including each Project Owner, their Intermediate Parents, certain
Turbine Owners and certain Equipment Finance Companies) are Subsidiaries of
Owner. Each Project Owner and certain Turbine Owners intend to finance certain
Costs associated with such entity's construction and operation of a Project or
purchase of a Turbine(s), as the case may be, with funds borrowed from Owner.
Owner intends to borrower such funds from Borrower and Borrower intends to
borrower such funds pursuant to the Credit Agreement.
C. As a condition precedent to the Banks' making the advances of credit
contemplated by the Credit Agreement, the Banks require that Owner shall have
executed this Agreement.
AGREEMENT
In consideration of the promises contained herein, and in order to induce
the Banks to enter into the Credit Agreement and to make the advances of credit
pursuant to the terms thereof, and for other good and valuable consideration,
the receipt and adequacy of which are hereby
396
acknowledged, Owner hereby agrees with Administrative Agent for the benefit of
Administrative Agent and the Banks as follows:
1. DEFINITIONS.
1.1 "UCC" shall mean the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of New York; provided, however, in the
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, the term "UCC" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.
1.2 All capitalized terms used, but not otherwise defined herein, shall
have the meanings provided in the Credit Agreement. All other terms used herein
(whether or not capitalized) shall have the meanings given them in the UCC. The
rules of interpretation contained in Exhibit A to the Credit Agreement shall
apply to this Agreement.
2. ASSIGNMENT, PLEDGE AND GRANT OF SECURITY INTEREST.
2.1 To secure the timely payment and performance of the Obligations (as
defined in Section 3 hereof) Owner does hereby assign, grant and pledge to, and
subject to a security interest in favor of, Administrative Agent, on behalf of
and for the benefit of Administrative Agent and the Banks, all the estate,
right, title and interest of Owner, whether now owned or hereafter acquired, in,
to and under:
2.1.1 The following agreements and documents, as amended from
time to time (individually, an "Assigned Agreement," and collectively, the
"Assigned Agreements") and all of Owner's rights thereunder:
(a) all Project Documents and Turbine Purchase Contracts with
respect to which Owner is or may become a party from time to time;
(b) the insurance policies maintained or required to be
maintained by Owner or any other Person under any Operative Document; and
(c) all amendments, supplements, substitutions and renewals to
any of the aforesaid agreements.
2.1.2 the Portfolio Entity Notes from each Project Owner and
Turbine Owner (collectively, the "Project/Turbine Owner Portfolio Entity
Notes");
2.1.3 all other personal property and fixtures of Owner,
including without limitation personal property and fixtures relating to any
Project or Turbine, whether now owned or existing or hereafter acquired or
arising, or in which Owner may have an interest, and
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397
wheresoever located, whether or not of a type which may be subject to a security
interest under the UCC, including without limitation all machinery, tools,
engines, turbines (including combustion turbines and steam turbine generators),
boilers, fuel storage tanks, control equipment, appliances, mechanical and
electrical systems, elevators, lighting, alarm systems, fire control systems,
furnishings, furniture, as-extracted collateral, equipment, service equipment,
motor vehicles, building or maintenance equipment, building or maintenance
materials, pipes and pipelines supplies, goods and property covered by any
warehouse receipts or bills of lading or other such documents, spare parts,
maps, plans, specifications, architectural, engineering, construction or shop
drawings, manuals or similar documents, copyrights, trademarks and trade names,
and any replacements, renewals or substitutions for any of the foregoing or
additional tangible or intangible personal property hereafter acquired by Owner;
2.1.4 all goods, money, instruments, investment securities,
investment property, accounts, contract rights, commercial tort claims, letters
of credit, letter of credit rights, payment intangibles, promissory notes,
software, supporting obligations, documents, deposit accounts, chattel paper
(including tangible and electronic chattel paper), general intangibles, and
inventory, including without limitation those relating to any Project or
Turbine; and
2.1.5 the proceeds of all of the foregoing (all of the
collateral described in clauses 2.1.1 through 2.1.5, being herein collectively
referred to as the "Collateral"), including without limitation, (a) all rights
of Owner to receive moneys due and to become due under or pursuant to the
Collateral; (b) all rights of Owner to receive the return of any premiums for,
or proceeds of, any insurance, indemnity, warranty or guaranty with respect to
the Collateral or to receive any condemnation proceeds; (c) all claims of Owner
for damages arising out of, or for breach of or default under, the Assigned
Agreements or any other Collateral; (d) all rights of Owner to terminate, amend,
supplement, modify or waive performance under the Assigned Agreements, to
perform thereunder and to compel performance and otherwise exercise all remedies
thereunder; and (e) to the extent not included in the foregoing, all proceeds
receivable or received when any and all of the foregoing Collateral is sold,
collected, exchanged or otherwise disposed of, whether voluntarily or
involuntarily.
2.2 In order to effectuate the foregoing, Owner has heretofore
delivered, or concurrently with the delivery hereof, is delivering to
Administrative Agent an executed counterpart or certified copy of each of the
Assigned Agreements. Owner will likewise deliver to Administrative Agent an
executed counterpart of each future lease, construction agreement, operation
agreement and other agreement, including without limitation those relating to
any Project or Turbine or any part thereof, and amendments and supplements to
the foregoing, included in the Collateral, as they are entered into by Owner
promptly upon the execution thereof. Notwithstanding anything to the contrary
contained herein, no such future lease, construction agreement, operation
agreement or other material agreement may be entered into by Owner except as
permitted under the Credit Documents.
2.3 Notwithstanding anything to the contrary contained herein, Owner
shall remain liable under each of the Assigned Agreements to perform all of the
obligations undertaken by it thereunder, all in accordance with and pursuant to
the terms and provisions thereof, and Administrative Agent shall have no
obligation or liability under any of such
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398
Assigned Agreements by reason of or arising out of this Agreement, nor shall
Administrative Agent be required or obligated in any manner to perform or
fulfill any obligations of Owner thereunder or to make any payment or inquiry as
to the nature or sufficiency of any payment received by it, or present or file
any claim or take any action to collect or enforce the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time.
2.4 If any default by Owner under any of the Assigned Agreements shall
occur and be continuing, then Administrative Agent shall, at its option and
after the expiration of the applicable cure periods under Section 8.1.7 of the
Credit Agreement, be permitted (but shall not be obligated) to remedy any such
default by giving written notice of such intent to Owner and to the parties to
the Assigned Agreement or Assigned Agreements for which Administrative Agent
intends to remedy the default. After giving such notice of its intent to cure
such default and upon the commencement thereof, Administrative Agent will
proceed diligently to cure such default. Any cure by Administrative Agent of
Owner's default under any of the Assigned Agreements shall not be construed as
an assumption by Administrative Agent or any of the Banks of any obligations,
covenants or agreements of Owner under such Assigned Agreement, and neither
Administrative Agent nor any of the Banks shall be liable to Owner or any other
Person as a result of any actions undertaken by Administrative Agent in curing
or attempting to cure any such default, except as set forth in Section 12.13 of
the Credit Agreement. This Agreement shall not be deemed to release or to affect
in any way the obligations of Owner under the Assigned Agreements.
3. OBLIGATIONS SECURED. Without limiting the generality of the foregoing,
this Agreement and all of the Collateral secure the payment and performance when
due of the Obligations (as defined in the Credit Agreement) of each of the
Portfolio Entities (including Owner) under the Credit Documents, including
Borrower's Obligations under the Credit Agreement and the other Credit Documents
to which Borrower is a party to the Administrative Agent and the Banks (the
"Obligations"); provided, however, the Obligations as defined in this Section 3
shall not include any Obligations (as defined in the Credit Agreement) of any
Portfolio Entity under the Credit Documents relating to or arising from Projects
(as defined in the Credit Agreement) that have achieved Operation prior to the
effective date of this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF OWNER. Owner represents and warrants
as of the date hereof as follows:
4.1 Owner has not assigned any of its rights under the Assigned
Agreements except as provided in the Credit Documents.
4.2 Owner has not executed and is not aware of any effective financing
statement, security agreement or other instrument similar in effect covering all
or any part of the Collateral, except such as may have been filed pursuant to
this Agreement and the other Credit Documents or pursuant to the documents
evidencing Permitted Liens.
4.3 Except as permitted by the Credit Agreement, Owner is lawfully
possessed of ownership of the Collateral and has full right, title and interest
in and to all rights purported to be granted to it under the Assigned
Agreements, not subject to any mortgages, liens, charges, or
4
399
encumbrances except Permitted Liens. Owner has full power and lawful authority
to grant and assign the Collateral hereunder.
5. COVENANTS OF OWNER. Owner covenants as follows:
5.1 Any action or proceeding to enforce this Agreement or any Assigned
Agreement may be taken by Administrative Agent either in Owner's name or in
Administrative Agent's name, as Administrative Agent may deem necessary.
5.2 Owner will, so long as any Obligations shall be outstanding,
warrant and defend its title to the Collateral and the interest of
Administrative Agent in the Collateral against any claim or demand of any
persons (other than Permitted Liens) which could reasonably be expected to
materially adversely affect Owner's title to, or Administrative Agent's right or
interest in, such Collateral.
5.3 Owner will at all times keep accurate and complete records of the
Collateral. Owner shall permit representatives of Administrative Agent upon
reasonable prior notice, and in accordance with Section 5.6 of the Credit
Agreement, at any time during normal business hours of Owner to inspect and make
abstracts from Owner's books and records pertaining to the Collateral. Upon the
occurrence and during the continuation of any Event of Default, at
Administrative Agent's request, Owner shall promptly deliver copies of any and
all such records to Administrative Agent.
5.4 Unless waived in writing by Administrative Agent, Owner shall give
Administrative Agent at least 45 days' notice before it changes the location of
its principal place of business, chief executive office or state of organization
and shall at the expense of Owner execute and deliver such instruments and
documents as may reasonably be required by Administrative Agent to maintain a
prior perfected security interest in the Collateral.
6. EVENTS OF DEFAULT. The occurrence of an Event of Default under the
Credit Agreement, whatever the reason therefor and whether it shall be voluntary
or involuntary or be effected by operation of law, or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body, shall constitute an event of default
hereunder (an "Event of Default").
7. REMEDIES UPON EVENT OF DEFAULT.
7.1 If any Event of Default has occurred and is continuing,
Administrative Agent may (a) proceed to protect and enforce the rights vested in
it by this Agreement, including but not limited to, the right to cause all
revenues pledged hereby as security and all other moneys pledged hereunder to be
paid directly to it, and to enforce its rights hereunder to such payments and
all other rights hereunder by such appropriate judicial proceedings as it shall
deem most effective to protect and enforce any of such rights, either at law or
in equity or otherwise, whether for specific enforcement of any covenant or
agreement contained in any of the Assigned Agreements, or in aid of the exercise
of any power therein or herein granted, or for any foreclosure hereunder and
sale under a judgment or decree in any judicial proceeding, or to
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400
enforce any other legal or equitable right vested in it by this Agreement or by
law; (b) cause any action at law or suit in equity or other proceeding to be
instituted and prosecuted to collect or enforce any Obligations or rights
hereunder or included in the Collateral, or to foreclose or enforce any other
agreement or other instrument by or under or pursuant to which such Obligations
are issued or secured, subject in each case to the provisions and requirements
thereof; (c) sell or otherwise dispose of any or all of the Collateral or cause
the Collateral to be sold or otherwise disposed of in one or more sales or
transactions, at such prices and in such manner as Administrative Agent may deem
commercially reasonable, and for cash or on credit or for future delivery,
without assumption of any credit risk at any broker's board or at public or
private sale, with or without a warranty of title, without demand of performance
or notice of intention to sell or of time or place of sale (except such notice
as is required by applicable statute and cannot be waived), it being agreed that
Administrative Agent may be a purchaser on behalf of the Banks or on its own
behalf at any such sale and that Administrative Agent, any Bank, or any other
Person who may be a bona fide purchaser for value and without notice of any
claims of any or all of the Collateral so sold shall thereafter hold the same
absolutely free from any claim or right of whatsoever kind, including any equity
of redemption, of Owner, any such demand, notice or right and equity being
hereby expressly waived and released to the extent permitted by law; (d) incur
reasonable expenses, including reasonable attorneys' fees, reasonable
consultants' fees, and other costs appropriate to the exercise of any right or
power under this Agreement; (e) perform any obligation of Owner hereunder or
under any other Credit Document, and make payments, purchase, contest or
compromise any encumbrance, charge or lien, and pay taxes and expenses without,
however, any obligation to do so; (f) in connection with any acceleration and
foreclosure, take possession of the Collateral and render it usable and repair
and renovate the same without, however, any obligation to do so, and enter upon
any Site or any other location where the same may be located for that purpose,
control, manage, operate, rent and lease the Collateral, either separately or in
conjunction with a Project, collect all rents and income from the Collateral and
apply the same to reimburse the Banks for any cost or expenses incurred
hereunder or under any of the Credit Documents and to the payment or performance
of Owner's obligations hereunder or under any of the Credit Documents, and apply
the balance to the Loans of Borrower as provided for in the Credit Agreement and
any remaining excess balance to whomsoever is legally entitled thereto; (g)
secure the appointment of a receiver of the Collateral or any part thereof; or
(h) exercise any other or additional rights or remedies granted to a secured
party under the UCC. If pursuant to applicable law prior notice of any such
action is required to be given to Owner, Owner hereby acknowledges that the
minimum time required by such applicable law, or if no minimum time is
specified, 10 Banking Days, shall be deemed a reasonable notice period.
7.2 All reasonable costs and expenses (including reasonable attorneys'
fees and expenses) incurred by Administrative Agent in connection with any such
suit or proceeding or in connection with the performance by Administrative Agent
of any of Owner's agreements contained in any of the Assigned Agreements or any
exercise of its rights or remedies hereunder, pursuant to the terms of this
Agreement, together with interest thereon (to the extent permitted by law)
computed at a rate per annum equal to the Default Rate from the date on which
such costs or expenses are incurred to the date of payment thereof, shall
constitute additional indebtedness secured by this Agreement and shall be paid
by Owner to Administrative Agent on behalf of the Banks on demand.
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8. REMEDIES CUMULATIVE; DELAY NOT WAIVER.
8.1 No right, power or remedy herein conferred upon or reserved to
Administrative Agent is intended to be exclusive of any other right, power or
remedy and every such right, power and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right, power and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder or otherwise shall not
prevent the concurrent assertion or employment of any other appropriate right or
remedy. Resort to any or all security now or hereafter held by Administrative
Agent may be taken concurrently or successively and in one or several
consolidated or independent judicial actions or lawfully taken nonjudicial
proceedings, or both.
8.2 No delay or omission of Administrative Agent to exercise any right
or power accruing upon the occurrence and during the continuance of any Event of
Default as aforesaid shall impair any such right or power or shall be construed
to be a waiver of any such Event of Default or an acquiescence therein; and
every power and remedy given by this Agreement may be exercised from time to
time, and as often as shall be deemed expedient, by Administrative Agent.
9. APPLICATION OF PROCEEDS. Upon the occurrence and during the continuation
of an Event of Default, the proceeds of any sale of or other realization upon,
all or any part of the Collateral shall be applied: first, to all fees, costs
and expenses incurred by and due and owing to Administrative Agent and the Banks
under the Credit Agreement, the other Credit Documents or the Collateral
Documents; second, to accrued and unpaid interest on the Obligations (including
any interest which, but for the provisions of the Bankruptcy Code, would have
accrued on such amounts); third, to the principal amounts of the Obligations
outstanding; fourth, to any other Obligations of Owner owing to Administrative
Agent or the Banks; and fifth, to, or as directed by, Owner.
10. ATTORNEY-IN-FACT. Owner hereby constitutes and appoints Administrative
Agent, acting for and on behalf of itself and the Banks and each successor or
assign of Administrative Agent and the Banks, the true and lawful
attorney-in-fact of Owner, with full power and authority in the place and stead
of Owner and in the name of Owner, Administrative Agent or otherwise to enforce
all rights, interests and remedies of Owner with respect to the Collateral,
including, without limitation, the right:
10.1 to ask, require, demand, receive and give acquittance for any and
all moneys and claims for moneys due and to become due under or arising out of
the Assigned Agreements or any of the other Collateral, including without
limitation, any insurance policies;
10.2 to elect remedies thereunder and to endorse any checks or other
instruments or orders in connection therewith;
10.3 to file any claims or take any action or institute any proceedings
in connection therewith which Administrative Agent may reasonably deem to be
necessary or advisable;
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10.4 to pay, settle or compromise all bills and claims which may be or
become liens or security interests against any or all of the Collateral, or any
part thereof, unless a bond or other security satisfactory to Administrative
Agent has been provided; and
10.5 upon foreclosure and to the extent provided in the Consents, to do
any and every act which Owner may do on its behalf with respect to the
Collateral or any part thereof and to exercise any or all of Owner's rights and
remedies under any or all of the Assigned Agreements;
provided, however, that Administrative Agent shall not exercise any such rights
except upon the occurrence and continuation of an Event of Default. This power
of attorney is a power coupled with an interest and shall be irrevocable.
11. ADMINISTRATIVE AGENT MAY PERFORM. Upon the occurrence and during the
continuance of an Event of Default, if Owner fails to perform any agreement
contained herein, Administrative Agent may itself perform, or cause performance
of, such agreement, and the reasonable expenses of Administrative Agent incurred
in connection therewith shall be part of the Obligations.
12. PERFECTION; FURTHER ASSURANCES.
12.1 Owner agrees that from time to time, at the expense of Owner,
Owner shall promptly execute and deliver all instruments and documents, and take
all action, that may be reasonably necessary, or that Administrative Agent may
reasonably request, in order to perfect and protect the assignment and security
interest granted or intended to be granted hereby or to enable Administrative
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Collateral. Without limiting the generality of the foregoing, Owner shall
(a) with respect to the Project/Turbine Owner Portfolio Entity Notes and any
other Collateral evidenced by a promissory note or other instrument in excess of
$5,000, deliver and pledge to Administrative Agent for the benefit of the Banks
such note duly endorsed without recourse, and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Administrative Agent; and (b) execute and deliver to Administrative Agent such
financing or continuation statements, or amendments thereto, and such other
instruments, endorsements or notices, as may be reasonably necessary or
desirable or as Administrative Agent may reasonably request, in order to perfect
and preserve the assignments and security interests granted or purported to be
granted hereby.
12.2 Owner hereby authorizes Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of Owner where permitted by
law.
12.3 Owner shall pay all filing, registration and recording fees and
all refiling, re-registration and re-recording fees, and all reasonable expenses
incident to the execution and acknowledgment of this Agreement, any assurance,
and all federal, state, county and municipal stamp taxes and other taxes,
duties, imports, assessments and charges arising out of or in
8
403
connection with the execution and delivery of this Agreement, any agreement
supplemental hereto, any financing statements, and any instruments of further
assurance.
12.4 Owner shall, promptly upon request, provide to Administrative
Agent all information and evidence it may reasonably request concerning the
Collateral to enable Administrative Agent to enforce the provisions of this
Agreement.
13. PLACE OF BUSINESS; LOCATION OF RECORDS. Unless Administrative Agent is
otherwise notified under Section 5.4, the place of business and chief executive
office of Owner is, and all records of Owner concerning the Collateral are and
will be, located at the address set forth in Schedule 4.24 to the Credit
Agreement and Owner is, and will be, a limited liability company organized under
the laws of the state of Delaware.
14. CONTINUING ASSIGNMENT AND SECURITY INTEREST. This Agreement shall
create a continuing assignment of, and security interest in, the Collateral and
shall (a) remain in full force and effect until payment in full of the
Obligations, (b) be binding upon Owner, its successors and assigns; provided,
however, that the obligations of Owner, its successors and assigns hereunder may
not be assigned without the prior written consent of Administrative Agent; and
(c) inure, together with the rights and remedies of Administrative Agent, to the
benefit of Administrative Agent, the Banks and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing but
subject to the terms of the Credit Agreement, Administrative Agent or any of the
Banks may assign or otherwise transfer all or any part of or interest in the
Notes and the other Credit Documents or other evidence of indebtedness held by
them to any other Person to the extent permitted by and in accordance with the
Credit Agreement, and such other Person shall thereupon become vested with all
or an appropriate part of the benefits in respect thereof granted to the Banks
herein or otherwise. The release of the security interest in any or all of the
Collateral, the taking or acceptance of additional security, or the resort by
Administrative Agent to any security it may have in any order it may deem
appropriate, shall not affect the liability of any person on the indebtedness
secured hereby. If this Agreement shall be terminated or revoked by operation of
law, Owner will indemnify and save Administrative Agent and the Banks harmless
from any loss which may be suffered or incurred by Administrative Agent and the
Banks in acting hereunder prior to the receipt by Administrative Agent, its
successors, transferees, or assigns of notice of such termination or revocation.
15. TERMINATION OF SECURITY INTEREST. Upon the indefeasible payment in full
of the Obligations, the security interest granted hereby shall terminate and all
rights to the Collateral shall revert to Owner. Upon any such termination,
Administrative Agent will, at Owner's expense, execute and, subject to Section
21 hereof, deliver to Owner such documents (including, without limitation, UCC-3
termination statements) as Owner shall reasonably request to evidence such
termination.
16. ATTORNEYS' FEES. In the event any legal action or proceeding
(including, without limitation, any of the remedies provided for herein or at
law) is commenced to enforce or interpret this Agreement or any provision
thereof, unless Owner is the prevailing party, Owner shall indemnify each of
Administrative Agent and the Banks for their reasonable attorneys' fees and
other costs and expenses incurred therein, and if a judgment or award is entered
in any such
9
404
action or proceeding, such reasonable attorneys' fees and other costs and
expenses may be made a part of such judgment or award.
17. LIABILITY. Recourse against the Owner, the other Portfolio Entities,
the Member and their respective Affiliates, members, partners, stockholders,
officers, directors and employees under this Agreement shall be limited to the
extent provided in Article 9 of the Credit Agreement.
18. AMENDMENTS; WAIVERS; CONSENTS. No amendment, modification, termination
or waiver of any provision of this Agreement, or consent to any departure by
Owner therefrom, shall in any event be effective without the written concurrence
of Administrative Agent and the Owner.
19. NOTICES. All notices required or permitted under the terms and
provisions hereof shall be in writing and any such notice shall be effective if
given in accordance with the provisions of Section 12.1 of the Credit Agreement.
Notices to Owner may be given at the address of Borrower set forth in such
Section 12.1.
20. GOVERNING LAW. This Agreement, including all matters of construction,
validity, performance and the creation, validity, enforcement or priority of the
lien of, and security interests created by, this Agreement in or upon the
Collateral shall be governed by the laws of the state of New York, without
reference to conflicts of law (other than Section 5-1401 of the New York General
Obligations Law), except as required by mandatory provisions of law and except
to the extent that the validity or perfection of the lien and security interest
hereunder, or remedies hereunder, in respect of any particular Collateral are
governed by the laws of a jurisdiction other than the state of New York.
21. REINSTATEMENT. This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any amount received by
Administrative Agent in respect of the Obligations is rescinded or must
otherwise be restored or returned by Administrative Agent upon the insolvency,
bankruptcy, reorganization, liquidation of Owner or any general partner of Owner
or upon the dissolution of, or appointment of any intervenor or conservator of,
or trustee or similar official for, Owner or any general partner of Owner or any
substantial part of Owner's or any of its general partners' assets, or
otherwise, all as though such payments had not been made.
22. SEVERABILITY. The provisions of this Agreement are severable, and if
any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Agreement in any jurisdiction.
23. SURVIVAL OF PROVISIONS. All agreements, representations and warranties
made herein shall survive the execution and delivery of this Agreement and the
Credit Agreement and the making of the Loans and extensions of credit
thereunder. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements, representations and warranties of
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405
Owner set forth herein shall terminate only upon payment of the Obligations, and
the termination of all Commitments and other obligations of the Banks under the
Credit Documents.
24. HEADINGS DESCRIPTIVE. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
25. ENTIRE AGREEMENT. This Agreement, together with any other agreement
executed in connection herewith, is intended by the parties as a final
expression of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
26. TIME. Time is of the essence of this Agreement.
27. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
together constitute one and the same agreement.
28. WAIVER OF JURY TRIAL. OWNER AND ADMINISTRATIVE AGENT HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP AMONG OWNER AND
ADMINISTRATIVE AGENT THAT IS BEING ESTABLISHED. OWNER AND ADMINISTRATIVE AGENT
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. OWNER AND ADMINISTRATIVE AGENT FURTHER WARRANT AND REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.
29. ADDITIONAL WAIVERS. Owner hereby waives and relinquishes all rights and
remedies accorded by applicable law to sureties or guarantors and agrees not to
assert or take advantage of any such rights or remedies, including without
limitation (a) any right to require Administrative Agent or the Banks to proceed
against any Portfolio Entity or any other Person or to proceed against or
exhaust any security held by Administrative Agent or the Banks at any time or to
pursue any other remedy in Administrative Agent's or the Banks' power before
proceeding against Owner, (b) any defense that may arise by reason of the
incapacity, lack of power or authority, death, dissolution, merger, termination
or disability of any Portfolio Entity or any other Person or the failure of
Administrative Agent or the Banks to file or enforce a claim against the estate
(in administration, bankruptcy or any other proceeding) of any Portfolio Entity
or any other Person, (c) demand, presentment, protest and notice of any kind,
including without limitation notice of the existence, creation or incurring of
any new or additional indebtedness or obligation or of any action or non-action
on the part of any Portfolio Entity, Administrative Agent, the Banks, any
endorser or creditor of the foregoing or on the part of any other Person
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under this or any other instrument in connection with any obligation or evidence
of indebtedness held by Administrative Agent or the Banks as collateral or in
connection with any Obligations, (d) any defense based upon an election of
remedies by Administrative Agent or the Banks, including without limitation an
election to proceed by non-judicial rather than judicial foreclosure, which
destroys or otherwise impairs the subrogation rights of Owner, the right of
Owner to proceed against a Portfolio Entity or another Person for reimbursement,
or both, (e) any defense based on any offset against any amounts which may be
owed by any Person to Owner for any reason whatsoever, (f) any defense based on
any act, failure to act, delay or omission whatsoever on the part of a Portfolio
Entity of the failure by a Portfolio Entity to do any act or thing or to observe
or perform any covenant, condition or agreement to be observed or performed by
it under the Credit Documents, (g) any defense based upon any statute or rule of
law which provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal
provided, that, upon payment in full of the Obligations, this Agreement shall no
longer be of any force or effect, (h) any defense, setoff or counterclaim which
may at any time be available to or asserted by a Portfolio Entity against
Administrative Agent, the Banks or any other Person under the Credit Documents,
(i) any duty on the part of Administrative Agent or the Banks to disclose to
Owner any facts Administrative Agent or the Banks may now or hereafter know
about any Portfolio Entity, regardless of whether Administrative Agent or the
Banks have reason to believe that any such facts materially increase the risk
beyond that which Owner intends to assume, or have reason to believe that such
facts are unknown to Owner, or have a reasonable opportunity to communicate such
facts to Owner, since Owner acknowledges that Owner is fully responsible for
being and keeping informed of the financial condition of the Portfolio Entities
and of all circumstances bearing on the risk of non-payment of any obligations
and liabilities hereby guaranteed, (j) the fact that any Portfolio Entity may at
any time in the future dispose of all or part of its direct or indirect interest
in any other Portfolio Entity, (k) any defense based on any change in the time,
manner or place of any payment under, or in any other term of, the Credit
Documents or any other amendment, renewal, extension, acceleration, compromise
or waiver of or any consent or departure from the terms of the Credit Documents,
(l) any defense arising because of Administrative Agent's or the Banks'
election, in any proceeding instituted under the Federal Bankruptcy Code, of the
application of Section 1111(b)(2) of the Federal Bankruptcy Code, and (m) any
defense based upon any borrowing or grant of a security interest under Section
364 of the Federal Bankruptcy Code.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the undersigned has caused this
Development Company Security Agreement to be duly executed and delivered as of
the day and year first above written.
CCFC II DEVELOPMENT COMPANY, LLC,
a Delaware limited liability company
By:
--------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
as Administrative Agent
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
408
EXHIBIT D-4C
to the Credit Agreement
FORM
OF
DEVELOPMENT COMPANY SECURITY AGREEMENT
Dated as of __________________, __________
between
CCFC II DEVELOPMENT COMPANY, LLC
a Delaware limited liability company
and
CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch,
as Administrative Agent
409
TABLE OF CONTENTS
PAGE
----
1. Definitions............................................................................................. 2
2. Assignment, Pledge and Grant of Security Interest....................................................... 2
3. Obligations Secured..................................................................................... 4
4. Representations and Warranties of Owner................................................................. 4
5. Covenants of Owner...................................................................................... 5
6. Events of Default....................................................................................... 5
7. Remedies Upon Event of Default.......................................................................... 5
8. Remedies Cumulative; Delay Not Waiver................................................................... 7
9. Application of Proceeds................................................................................. 7
10. Attorney-In-Fact........................................................................................ 7
11. Administrative Agent May Perform........................................................................ 8
12. Perfection; Further Assurances.......................................................................... 8
13. Place of Business; Location of Records.................................................................. 9
14. Continuing Assignment and Security Interest............................................................. 9
15. Termination of Security Interest........................................................................ 9
16. Attorneys' Fees......................................................................................... 9
17. Liability............................................................................................... 10
18. Amendments; Waivers; Consents........................................................................... 10
19. Notices................................................................................................. 10
20. Governing Law........................................................................................... 10
21. Reinstatement........................................................................................... 10
22. Severability............................................................................................ 10
23. Survival of Provisions.................................................................................. 10
24. Headings Descriptive.................................................................................... 11
25. Entire Agreement........................................................................................ 11
26. Time.................................................................................................... 11
27. Counterparts............................................................................................ 11
28. Waiver of Jury Trial.................................................................................... 11
29. Additional Waivers...................................................................................... 11
i
410
DEPOSITARY AGREEMENT
dated as of October 16, 2000
among
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company,
as Borrower,
CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch
as Administrative Agent for the Banks,
and
THE BANK OF NEW YORK,
as Depositary Agent
411
THIS DEPOSITARY AGREEMENT (this "Agreement"), dated as of October 16,
2000, is among CALPINE CONSTRUCTION FINANCE COMPANY II, LLC, a Delaware limited
liability company ("Borrower"), CREDIT SUISSE FIRST BOSTON, acting through its
New York Branch, acting in its capacity as Administrative Agent ("Administrative
Agent") for the Banks under the Credit Agreement (as defined below), and THE
BANK OF NEW YORK, acting in its capacity as Depositary Agent (the "Depositary
Agent").
RECITALS
A. Borrower has entered into that certain Credit Agreement, dated as of
October 16, 2000 (as the same may be amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among Borrower, the financial
institutions listed on Exhibit H thereto (the "Banks"), Credit Suisse First
Boston, acting through its New York Branch, as Lead Arranger and Administrative
Agent ("Administrative Agent"), The Bank of Nova Scotia, as Lead Arranger,
Co-Syndication Agent and Bookrunner, Banc of America Securities LLC, as Arranger
and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and Co-Syndication
Agent, Bayerische Landesbank Girozentrale, as Arranger, Co-Documentation Agent
and LC Bank, CIBC World Markets Corp., as Arranger and Co-Documentation Agent,
Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as Arranger and
Co-Documentation Agent and TD Securities (USA) Inc., as Arranger and
Co-Documentation Agent, whereby the Banks have agreed to advance to Borrower
certain loans to finance the construction and operation by Borrower of the
Projects and the purchase of the Turbines.
B. In order to give effect to (a) the security interest in the Accounts
(as defined herein) granted by Borrower to Administrative Agent and (b) the
deposit of funds into the Accounts and the application of funds in connection
with the construction and operation of the Projects and the purchase of the
Turbines, each as contemplated in the Credit Agreement, the parties have agreed
that all amounts to be paid over to Administrative Agent for deposit into, and
disbursement from, the Accounts under of the Credit Agreement shall be paid to
Depositary Agent, as agent for Administrative Agent, to be held by Depositary
Agent in pledge as collateral security for Borrower's obligations under the
Credit Agreement and distributed by Depositary Agent as provided herein.
C. Depositary Agent has agreed to act as depositary agent for
Administrative Agent pursuant to the terms of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained in this Agreement and for other good and valuable
consideration, receipt of which is hereby acknowledged, the parties hereto
hereby agree as follows:
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412
ARTICLE 1
Definitions; Rules of Interpretation
Section 1.1 Definitions. Capitalized terms used but not defined herein
shall have the respective meanings given them in Exhibit A to the Credit
Agreement. The following terms when used herein shall have the following
meanings:
"Accounts" shall mean the collective reference to the Construction
Account, the Revenue Account, the Loss Proceeds Account, the Working Capital
Reserve Account and any and all other accounts hereinafter established under the
Credit Agreement and/or this Agreement, including any sub-accounts within such
accounts but excluding any Operating Account held in the name of any Project
Owner.
"Account Withdrawal Certificate" shall mean a certificate of an
Authorized Representative of Borrower countersigned by Administrative Agent
substantially in the form of Exhibit A hereto, stating (i) the specific amount
requested to be withdrawn from a specific Account and transferred, applied or
paid over to another Account or Person, (ii) the purpose for which such payment
shall be made, (iii) that no Event of Default and, with respect to withdrawals
from the Construction Account or the Loss Proceeds Account of the Project to
which such withdrawal relates, no Non-Fundamental Project Default shall have
occurred and be continuing or will occur after giving effect to the withdrawal
of funds so requested and (iv) that all other conditions to distributions from
such account set forth in the Credit Agreement have been satisfied.
"Construction Account" shall mean, collectively, the special account
designated by that name established by the Depositary Agent pursuant to Section
2.5, the Construction Sub-Accounts, including the Turbine Purchase Sub-Accounts
and all other sub-accounts therein.
"Disbursement Instruction" shall mean a notice from Administrative
Agent, substantially in the form of Exhibit B hereto, instructing Depositary
Agent to transfer a specific amount of funds from any of the Accounts to such
other account or recipient identified by Administrative Agent in accordance
therewith.
"Loss Proceeds Account" shall mean collectively the special account
designated by that name established by Depositary Agent pursuant to Section 2.5
and all sub-accounts therein.
"Revenue Account" shall mean the special account designated by that
name established by the Depositary Agent pursuant to Section 2.5 and all
sub-accounts therein.
"UCC" shall mean the Uniform Commercial Code as adopted in the State of
New York.
"Working Capital Reserve Account" shall mean the special account
designated by that name established by the Depositary Agent pursuant to Section
2.5 and all sub-accounts therein.
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413
Section 1.2 Rules of Interpretation. The rules of interpretation set
forth in Exhibit A to the Credit Agreement shall apply to this Agreement.
ARTICLE 2
Appointment of Depositary Agent;
Establishment of Accounts
Section 2.1 Appointment of Depositary Agent. Depositary Agent is hereby
appointed by Borrower and by Administrative Agent as depositary agent hereunder,
and Depositary Agent hereby agrees to act as such and to accept all cash,
payments, other amounts and Permitted Investments to be delivered to or held by
Depositary Agent pursuant to the terms of this Agreement. Depositary Agent shall
hold and safeguard the Accounts (and the cash, instruments and securities on
deposit therein) during the term of this Agreement and shall treat the cash,
instruments, and securities in the Accounts as funds, instruments and securities
pledged by Borrower to Administrative Agent for the ratable benefit of the
Banks, to be held by Depositary Agent, as agent of Administrative Agent, in
trust in accordance with the provisions hereof.
Section 2.2 Security Interest; Control. In order to secure the
performance by Borrower of all of its covenants, agreements and obligations
under the Credit Agreement and the other Credit Documents and the payment and
performance by Borrower of all Obligations, this Agreement is intended to
create, and Borrower hereby pledges to and creates in favor of Administrative
Agent, for the benefit of the Banks, a security interest in and to, the
Accounts, all cash, cash equivalents, instruments, investments and other
securities at any time on deposit in the Accounts, and all proceeds of any of
the foregoing (collectively, the "Collateral"). All moneys, cash equivalents,
instruments, investments and securities at any time on deposit in any of the
Accounts shall constitute collateral security for the payment and performance by
Borrower of the Obligations, and shall at all times be subject to the control of
Administrative Agent, acting through Depositary Agent in respect of the Accounts
and shall be held in the custody of Depositary Agent in trust for the purposes
of, and on the terms set forth in, this Agreement.
Section 2.3 Accounts Maintained as UCC "Securities Accounts."
Depositary Agent hereby agrees and confirms that it has established the Accounts
as set forth and defined in this Agreement. Each of Depositary Agent and
Borrower agrees that (i) Depositary Agent is acting as "securities intermediary"
(within the meaning of Section 8-102(14) of the UCC) with respect to the
Accounts and the "financial assets" (within the meaning of Section 8-102(a)(9)
of the UCC, the "Financial Assets") credited to the Accounts; (ii) each such
Account established by Depositary Agent is and will be maintained as a
"securities account" (within the meaning of Section 8-501 of the UCC); (iii)
Borrower is an "entitlement holder" (within the meaning of Section 8-102(a)(7)
of the UCC) in respect of the Financial Assets credited to such Accounts and
with respect to such Accounts and Depositary Agent shall so note in its records
pertaining to such Financial Assets and Accounts; and (iv) all Financial Assets
in registered form or payable to or to order of and credited to any such Account
shall be registered in the name of, payable to or to the order of, or specially
endorsed to, Depositary Agent or in blank, or credited to another securities
account maintained in the name of Depositary Agent, and in no case will any
Financial
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Asset credited to any such Account be registered in the name of, payable to or
to the order of, or endorsed to, Borrower except to the extent the foregoing
have been subsequently endorsed by Borrower to Depositary Agent or in blank.
Each item of property (including a security, security entitlement, investment
property, instrument or obligation, share, participation, interest or other
property whatsoever) credited to any Account shall be treated as a Financial
Asset. Until this Agreement shall terminate in accordance with the terms hereof,
Administrative Agent shall have "control" (within the meaning of Section
8-106(d)(2) of the UCC) of Borrower's "security entitlements" (within the
meaning of Section 8-102(a)(17) of the UCC, "Security Entitlements") with
respect to the Accounts and the Financial Assets credited to the Accounts. All
property delivered to Depositary Agent pursuant to this Agreement will be
promptly credited to the Accounts and shall be treated as Financial Assets. If
at any time Depositary Agent shall receive from Administrative Agent any
"entitlement order" (within the meaning of Section 8-102(8) of the UCC, an
"Entitlement Order") relating to the Accounts or Financial Assets credited to
the Accounts, Depositary Agent shall comply with such Entitlement Order without
further consent by Borrower or any other Person. In the event that Depositary
Agent receives conflicting Entitlement Orders relating to the Accounts or
Financial Assets credited to the Accounts from Administrative Agent and any
other Person (including, without limitation, Borrower), Depositary Agent shall
comply with the Entitlement Orders originated by Administrative Agent. Each of
Borrower and Depositary Agent agrees that it has not and will not execute and
deliver, or otherwise become bound by, any agreement under which it agrees with
any Person other than Administrative Agent to comply with Entitlement Orders
originated by such Person relating to the Accounts or Financial Assets credited
to the Accounts. Except for the claims and interests of Administrative Agent and
Borrower in the Accounts and the Financial Assets credited to the Accounts,
neither Depositary Agent nor Borrower knows of any claim to, or interest in, any
Account or Financial Assets credited to the Accounts. If either Depositary Agent
or Borrower obtains knowledge that any Person has asserted a lien, encumbrance
or adverse claim against any or the Accounts or Financial Assets credited to the
Accounts, such party will promptly notify Administrative Agent thereof. In the
event that the Depositary Agent has or subsequently obtains by agreement,
operation of law or otherwise a Lien or security interest in any Account, any
Security Entitlement carried therein or credited thereto or any Financial Asset
that is the subject of any such Security Entitlement, Depositary Agent agrees
that such Lien or security interest shall be subordinate to the Lien and
security interest of the Administrative Agent. The Financial Assets standing to
the credit of the Accounts will not be subject to deduction, set-off, banker's
lien or any other right, and Depositary Agent shall not grant, permit or consent
to any other right or interest in such Financial Assets, in favor of any Person
(including the Depositary Agent) other than Administrative Agent.
Section 2.4 Borrower's Rights. Borrower shall not have any rights or
powers with respect to any amounts in the Accounts or any part thereof except
(i) as provided in Article 5 hereof and (ii) the right to have such amounts
applied in accordance with the provisions hereof and of the Credit Agreement.
Section 2.5 Creation of Accounts. Depositary Agent hereby establishes
at its office located in New York, New York, the following special, segregated
and irrevocable money collateral accounts and sub-accounts within such accounts
which shall be maintained at all times
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until the termination of this Agreement, unless earlier termination is otherwise
provided for herein or in the Credit Agreement:
(1) The Construction Account (Acc. # 050451);
(2) The Construction Sub-Account (Los Medanos) (Acc. # 050452);
(3) The Construction Sub-Account (Baytown) (Acc. # 050453);
(4) The Construction Sub-Account (▇▇▇▇▇▇▇▇) (Acc. # 050454);
(5) The Construction Sub-Account (Panda) (Acc. # 050455);
(6) The Construction Sub-Account (Santa ▇▇▇▇) (Acc. # 050456);
(7) The Construction Sub-Account (Delta) (Acc. # 050457);
(8) The Construction Sub-Account (Freestone) (Acc. # 050458);
(9) The Construction Sub-Account (Broad River) (Acc. # 050459);
(10) The Construction Sub-Account (Channel) (Acc. # 050460);
(11) The Construction Sub-Account (Corpus Christi) (Acc. # 050461);
(12) The Construction Sub-Account (Decatur) (Acc. # 050462);
(13) The Construction Sub-Account (▇▇▇▇▇▇) (Acc. # 050463);
(14) The Turbine Purchase Sub-Account (Acc. # 050464);
(15) The Revenue Account (Acc. # 050465);
(16) The Revenue Sub-Account (Los Medanos) (Acc. # 050491);
(17) The Revenue Sub-Account (Baytown) (Acc. # 050490);
(18) The Revenue Sub-Account (▇▇▇▇▇▇▇▇) (Acc. # 050489);
(19) The Revenue Sub-Account (Panda) (Acc. # 050488);
(20) The Revenue Sub-Account (Santa ▇▇▇▇) (Acc. # 050487);
(21) The Revenue Sub-Account (Delta) (Acc. # 050486);
(22) The Revenue Sub-Account (Freestone) (Acc. # 050485);
(23) The Revenue Sub-Account (Broad River) (Acc. # 050484);
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(24) The Revenue Sub-Account (Channel) (Acc. # 050483);
(25) The Revenue Sub-Account (Corpus Christi) (Acc. # 050482);
(26) The Revenue Sub-Account (Decatur) (Acc. # 050481);
(27) The Revenue Sub-Account (▇▇▇▇▇▇) (Acc. # 050480);
(28) The Loss Proceeds Account (Acc. # 050466);
(29) The Loss Proceeds Sub-Account (Los Medanos) (Acc. # 050479);
(30) The Loss Proceeds Sub-Account (Baytown) (Acc. # 050478);
(31) The Loss Proceeds Sub-Account (▇▇▇▇▇▇▇▇) (Acc. # 050477);
(32) The Loss Proceeds Sub-Account (Panda) (Acc. # 050476);
(33) The Loss Proceeds Sub-Account (Santa ▇▇▇▇) (Acc. # 050475);
(34) The Loss Proceeds Sub-Account (Delta) (Acc. # 050474);
(35) The Loss Proceeds Sub-Account (Freestone) (Acc. # 050473);
(36) The Loss Proceeds Sub-Account (Broad River) (Acc. # 050472);
(37) The Loss Proceeds Sub-Account (Channel) (Acc. # 050471);
(38) The Loss Proceeds Sub-Account (Corpus Christi)
(Acc. # 050470);
(39) The Loss Proceeds Sub-Account (Decatur) (Acc. #050469);
(40) The Loss Proceeds Sub-Account (▇▇▇▇▇▇) (Acc. # 050468);
(41) The Working Capital Reserve Account (Acc. # 050467);
(42) The Working Capital Sub-Account (Los Medanos) (Acc. # 050598);
(43) The Working Capital Sub-Account (Baytown) (Acc. # 050597);
(44) The Working Capital Sub-Account (▇▇▇▇▇▇▇▇) (Acc. # 050596);
(45) The Working Capital Sub-Account (Panda) (Acc. # 050595);
(46) The Working Capital Sub-Account (Santa ▇▇▇▇) (Acc. # 050594);
(47) The Working Capital Sub-Account (Delta) (Acc. # 050593);
(48) The Working Capital Sub-Account (Freestone) (Acc. # 050592);
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(49) The Working Capital Sub-Account (Broad River) (Acc. # 050591);
(50) The Working Capital Sub-Account (Channel) (Acc. # 050590);
(51) The Working Capital Sub-Account (Corpus Christi) (Acc. #
050589);
(52) The Working Capital Sub-Account (Decatur) (Acc. # 050588); and
(53) The Working Capital Sub-Account (▇▇▇▇▇▇) (Acc. # 050587).
All moneys, investments and securities at any time on deposit in any of the
Accounts shall constitute trust funds to be held in the custody of Depositary
Agent for the purposes and on the terms set forth in this Agreement.
ARTICLE 3
Deposits into Accounts
Section 3.1 Deposits. Each of Borrower and Administrative Agent
covenants and agrees that all amounts required by the Credit Agreement or the
other Credit Documents to be delivered or deposited in any of the Accounts,
shall be paid over to Depositary Agent directly for deposit into the appropriate
Account. Any deposit made to any Account under this Agreement shall be
irrevocable and the amount of such deposit and any instrument or security held
in such Account and all income or gain earned on such deposits shall be held in
trust by Depositary Agent and applied solely as provided in this Agreement. In
the event Depositary Agent receives monies without adequate instruction with
respect to the source or proper Account into which such monies are to be
deposited, Depositary Agent shall deposit such monies into the Revenue Account
and notify Borrower and Administrative Agent of the receipt and the source of
such monies.
ARTICLE 4
Payments from Accounts
Section 4.1 Withdrawals by Administrative Agent. As soon as
practicable, and in all events within three Banking Days after receipt of a
Disbursement Instruction, executed by Administrative Agent, Depositary Agent
shall distribute or apply monies on deposit in the Accounts specified in such
notice, in the manner, in the amount and to the Person or Account specified in
such Disbursement Instruction. Notwithstanding anything to the contrary in this
Agreement, from and after Depositary Agent's receipt of notice from
Administrative Agent or Borrower that an Event of Default exists until such time
as Depositary Agent receives notice from Administrative Agent that such Event of
Default no longer exists, Depositary Agent shall only withdraw or transfer
amounts in the Construction Account or the Loss Process Account at the direction
of Administrative Agent. Notwithstanding anything to the contrary in this
Agreement, from and after Depositary Agent's receipt of notice from
Administrative Agent or Borrower that a Non-Fundamental Project Default exists
until such time as Depositary Agent receives notice from Administrative Agent
that such Non-Fundamental Project Default no longer
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exists, Depositary Agent shall only withdraw or transfer amounts in the
Construction Account or the Loss Proceeds Account for the Project to which such
Non-Fundamental Project Default relates at the direction of Administrative
Agent. In the event that funds on deposit in any Account exceed the amounts
required to be deposited therein, and such excess funds are required to be
transferred to the Revenue Account pursuant to the Credit Agreement,
Administrative Agent shall, as soon as practicable, deliver a Disbursement
Instruction to the Depositary Agent requesting that such excess funds be
transferred to the Revenue Account.
Section 4.2 Withdrawals from Construction Account. On the same Banking
Day on which Depositary Agent receives an Account Withdrawal Certificate from
Borrower, duly executed by Borrower and acknowledged and agreed to in writing by
Administrative Agent, requesting that funds be withdrawn and/or transferred from
the Construction Account or a sub-account therein, Depositary Agent shall
distribute or apply monies on deposit in the Construction Account or such
sub-account therein in the manner, in the amount and to the Person or Account
specified in such Account Withdrawal Certificate; provided, however, that in the
event that Depositary Agent receives such Account Withdrawal Certificate after
12:00 p.m. eastern standard time of any Banking Day, then Depositary Agent may
take the actions specified therein on the next Banking Day.
Section 4.3 Withdrawals from the Revenue Account. As soon as
practicable and in all events within three Banking Days after receipt of an
Account Withdrawal Certificate from Borrower, duly executed by Borrower and
acknowledged and agreed to in writing by Administrative Agent, requesting that
funds be withdrawn and/or transferred from the Revenue Account or a sub-account
therein, Depositary Agent shall distribute or apply monies on deposit in the
Revenue Account or such sub-account therein in the manner, in the amount and to
the Person or Account specified in such Account Withdrawal Certificate.
Section 4.4 Withdrawals from the Loss Proceeds Account. As soon as
practicable, and in all events within three Banking Days after receipt of an
Account Withdrawal Certificate from Borrower, duly executed by Borrower and
acknowledged and agreed to in writing by Administrative Agent, requesting that
funds be withdrawn and/or transferred from the Loss Proceeds Account or a
sub-account therein, Depositary Agent shall distribute or apply monies on
deposit in the Loss Proceeds Account or such sub-account therein in the manner,
in the amount and to the Person or Account specified in such Account Withdrawal
Certificate.
Section 4.5 Withdrawals from the Working Capital Reserve Account. As
soon as practicable, and in all events within three Banking Days after receipt
of an Account Withdrawal Certificate from Borrower, duly executed by Borrower
and acknowledged and agreed to in writing by Administrative Agent, requesting
that funds be withdrawn and/or transferred from the Working Capital Reserve
Account or a sub-account therein, Depositary Agent shall distribute or apply
monies on deposit in the Working Capital Reserve Account or such sub-account
therein in the manner, in the amount and to the Person or Account specified in
such Account Withdrawal Certificate.
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ARTICLE 5
Investment
Section 5.1 Permitted Investments. Depositary Agent shall invest any money held
in any Account in such Permitted Investments as directed in writing by Borrower
from time to time (or, if Administrative Agent shall have notified Depositary
Agent that Administrative Agent is exercising its power of attorney to direct
investments, by and at the discretion of Administrative Agent). In the event
that Depositary Agent has not received any such written directions, Depositary
Agent shall invest all available funds in a money market mutual fund selected by
Borrower. Any income or gain realized as a result of any such investment shall
be held as part of the applicable Account and reinvested as provided in this
Agreement until released in compliance with Article 4. Any income tax payable on
account of any such income or gain shall be paid by Borrower. Depositary Agent
shall have no liability for any loss resulting from any such investment other
than solely by reason of its willful misconduct or gross negligence or bad faith
or from failure to exercise such care in the custody of any such investments as
it does for accounts held by other customers or in the custody of its own
investments. Any such investment may be sold (without regard to maturity date)
by Depositary Agent whenever necessary to make any distribution required by this
Agreement. In addition, if an Event of Default has occurred and is continuing,
any investment shall be liquidated and sold by Depositary Agent if so directed
in writing by Administrative Agent.
ARTICLE 6
Depositary Agent
Section 6.1 Rights, Duties, etc. The acceptance by Depositary Agent of
its duties under this Agreement is subject to the following terms and conditions
which the parties to this Agreement hereby agree shall govern and control with
respect to Depositary Agent's rights, duties, liabilities and immunities:
(a) Depositary Agent shall act as an agent only and shall not
be responsible or liable in any manner for soliciting any funds or for the
sufficiency, correctness, genuineness or validity of any funds or securities
deposited with or held by it, except as set forth in Section 6.1(c) hereof;
(b) Depositary Agent shall be protected in acting or
refraining from acting upon any written notice, certificate, instruction,
request or other paper or document, as to the due execution thereof and the
validity and effectiveness of the provisions thereof and as to the truth of any
information contained therein, which Depositary Agent in good faith believes to
be genuine;
(c) Depositary Agent shall not be liable for any error of
judgment or for any act done or step taken or omitted except in the case of its
gross negligence, willful misconduct or bad faith;
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(d) Depositary Agent may consult with and obtain advice from
counsel in the event of any dispute or question as to the construction of any
provision of this Agreement;
(e) Depositary Agent shall have no duties as Depositary Agent
except those which are expressly set forth in this Agreement and in any
modification or amendment hereof; provided, however, that no such modification
or amendment shall affect Depositary Agent's duties unless Depositary Agent
shall have given its prior written consent to such modification or amendment;
(f) Depositary Agent may execute or perform any duties under
this Agreement either directly or through agents or attorneys;
(g) Depositary Agent may engage or be interested in any
financial or other transactions with any party to this Agreement and may act on,
or as depositary, trustee or agent for, any committee or body of holders of
obligations of such Persons as freely as if it were not Depositary Agent
hereunder; and
(h) Depositary Agent shall not be obligated to take any action
which in its reasonable judgment would involve it in expense or liability unless
it has been furnished with reasonable indemnity.
Section 6.2 Resignation or Removal.
(a) Depositary Agent may at any time resign by giving notice
to each other party to this Agreement, such resignation to be effective upon the
appointment of a successor Depositary Agent as provided below.
(b) Administrative Agent may remove Depositary Agent at any
time by giving notice to each other party to this Agreement, such removal to be
effective upon the appointment of successor Depositary Agent as provided below.
(c) In the event of any resignation or removal of Depositary
Agent, a successor Depositary Agent, which shall be a bank or trust company
organized under the laws of the United States America or of the State of New
York, having a corporate trust office in New York and a capital and surplus of
not less than $50,000,000, shall be appointed by Administrative Agent after
consultation with Borrower. If a successor Depositary Agent shall not have been
appointed and accepted its appointment as Depositary Agent within 45 days after
such notice of resignation of Depositary Agent or such notice of removal of
Depositary Agent, Depositary Agent, Administrative Agent or Borrower may apply
to any court of competent jurisdiction to appoint a successor Depositary Agent
to act until such time, if any, as a successor Depositary Agent shall have
accepted its appointment as provided above. A successor Depositary Agent so
appointed by such court shall immediately and without further act be superseded
by any successor Depositary Agent appointed by Administrative Agent as provided
above. Any such successor Depositary Agent shall be capable of acting as a
"securities intermediary" (within the meaning of Section 8-102(14) of the UCC)
and shall deliver to each party to this Agreement a written instrument accepting
such appointment and thereupon such
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successor Depositary Agent shall succeed to all the rights and duties of
Depositary Agent under this Agreement and shall be entitled to receive the
Accounts from the predecessor Depositary Agent.
ARTICLE 7
Determinations
Section 7.1 Sales of Permitted Investments. Depositary Agent will use
its best efforts to sell Permitted Investments so that actual money is
available, on each date on which a distribution is to be made pursuant to this
Agreement, for Depositary Agent to make such distribution in money on such date.
Section 7.2 Available Cash. In determining the amount of deposit or
available money in any Account at any time, in addition to any money then on
deposit in such Account, Depositary Agent shall treat as on deposit or as
available money the net amount which would have been received by Depositary
Agent on such day if Depositary Agent had liquidated all the Permitted
Investments (at then prevailing market prices) then on deposit in such Account.
ARTICLE 8
Miscellaneous
Section 8.1 Fees and Indemnification of Depositary Agent. Borrower
agrees to pay the fees of Depositary Agent as compensation for its services
under this Agreement. In addition, Borrower and Administrative Agent hereby
agree that (a) Depositary Agent, its directors, officers, employees and agents
(each such Person being called a "Depositary Agent Indemnitee") are released
from any and all liabilities to Borrower and Administrative Agent arising from
the terms or in connection with this Agreement and the compliance of any
Depositary Agent Indemnitee with the terms hereof, except to the extent that
such liabilities arise from the negligence or willful misconduct of any
Depositary Agent Indemnitee, and (b) Borrower, Administrative Agent and their
respective successors and assigns shall at all times indemnify and save harmless
the Depositary Agent Indemnitees from and against any and all claims, actions
and suits of others arising out of the terms of this Agreement or the compliance
of any Depositary Agent Indemnitee with the terms hereof, whether or not any
Depositary Agent Indemnitee is a party thereto, except to the extent that such
claims, actions or suits arise from the negligence or willful misconduct of any
Depositary Agent Indemnitee, and from and against any and all liabilities,
losses, damages, costs, charges, reasonable counsel fees and other expenses of
every nature and character arising by reason of the same. The provisions of this
Section 8.1 shall survive the termination of this Agreement and the resignation
or removal of Depositary Agent. All payments made by Borrower hereunder shall be
made without setoff or counterclaim.
Section 8.2 Waiver of Right of Set-Off. Depositary Agent waives, with
respect to all of its existing and future claims against Borrower or any
Affiliate thereof, all existing and future rights of set-off and banker's liens
against the Accounts and all items (and proceeds thereof) that come into its
possession in connection with the Accounts.
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Section 8.3 Termination. Subject to Section 8.1, the provisions of this
Agreement shall terminate on the date on which all Obligations shall have been
paid in full and the Credit Documents have terminated in accordance with their
terms. The termination of this Agreement shall have been deemed to have occurred
upon receipt by Depositary Agent of a certificate to such effect executed by
Administrative Agent. Promptly after receipt of such certificate by Depositary
Agent, Depositary Agent shall distribute all amounts contained in the Accounts
to the Borrower and shall be discharged of all obligations hereunder.
Section 8.4 Severability. If any one or more of the covenants or
agreements provided in this Agreement on the part of the parties to this
Agreement to be performed should be determined by a court of competent
jurisdiction to be contrary to law, such covenant or agreement shall be deemed
and construed to be severable from the remaining covenants and agreements of
this Agreement and shall in no way affect the validity of the remaining
provisions.
Section 8.5 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which taken together
shall constitute but one and the same instrument.
Section 8.6 Amendments This Agreement may not be modified or amended
without the prior written consent of each of the parties to this Agreement.
Section 8.7 Applicable Law. This Agreement and any instrument or
agreement required hereunder (to the extent not expressly provided for therein)
shall be governed by, and construed in accordance with, the laws of the State of
New York, without reference to conflicts of laws (other than Section 5-1401 of
the New York General Obligations Law).
Section 8.8 Notices, etc. Except as otherwise provided in this
Agreement, notices and other communications under this Agreement shall be in
writing and shall be delivered, or mailed by first-class mail, postage prepaid,
to the following addresses:
(a) If to Administrative Agent:
Credit Suisse First Boston,
New York Branch
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Portfolio Management
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Borrower:
Calpine Construction Finance Company II, LLC
c/o Calpine Corporation
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Asset Management
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
(c) If to Depositary Agent:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10286
Attention: Corporate Trust Administrator
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
All notices or other communications required or permitted to be
delivered hereunder, shall be in writing and shall be considered as properly
delivered (a) if delivered in person, (b) if sent by overnight delivery service
(including Federal Express, ▇▇▇▇▇, DHL, Air Borne and other similar overnight
delivery services), (c) in the event overnight delivery services are not readily
available, if mailed by first class United States Mail, postage prepaid,
registered or certified with return receipt requested or (d) if sent by prepaid
telegram, or by telecopy confirmed by telephone. Notice so delivered shall be
effective upon receipt by the addressee, except that communication or notice so
transmitted by telecopy or other direct written electronic means shall be deemed
to have been validly and effectively delivered on the day (if a Banking Day and,
if not, on the next following Banking Day) on which it is transmitted if
transmitted before 4:00 p.m., recipient's time, and if transmitted after that
time, on the next following Banking Day; provided, however, that if any notice
is tendered to an addressee and the delivery thereof is refused by such
addressee, such notice shall be effective upon such tender. Any party shall have
the right to change its address for notice hereunder to any other location
within the continental United States by giving of 30 days' notice to the other
parties in the manner set forth hereinabove.
Section 8.9 Further Information. Depositary Agent shall promptly
provide Administrative Agent and Borrower with any information reasonably
requested by Administrative Agent or Borrower concerning balances in the
Accounts and payments from such Accounts.
Section 8.10 Benefit of Agreement. This Agreement shall inure to the
benefit of, and be enforceable by, the parties to this Agreement and their
respective successors and permitted assigns.
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Section 8.11 Account Balance Statements. Depositary Agent shall on a
monthly basis, and at such other times as Administrative Agent or Borrower may
from time to time reasonably request, provide Administrative Agent and Borrower
account balance statements in respect of each of the Accounts. Such balance
statements shall also include deposits and transfers to, withdrawals from and
the net investment income or gain received and collected from each Account.
Section 8.12 Authorized Officer of Administrative Agent. All written
directions and instructions (which may be provided by facsimile transmission) by
Administrative Agent to Depositary Agent pursuant to this Agreement shall be
executed by an authorized signatory of Administrative Agent. No person shall be
deemed to be an authorized signatory of Administrative Agent unless named on a
certificate of incumbency of such person delivered to Depositary Agent on the
Closing Date.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have each caused this
Depositary Agreement to be duly executed by their duly authorized officers, all
as of the day and year first above written.
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By:
------------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
as Administrative Agent for the Banks
By:
--------------------------------------------
Name:
Title:
By:
--------------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Depositary Agent
By:
------------------------------------------
Name:
Title:
426
Exhibit A
Form of Account Withdrawal Certificate
[LETTERHEAD OF [BORROWER] [AUTHORIZED REPRESENTATIVE OF BORROWER]]
[DATE]
[THE LANGUAGE IN BRACKETS REPRESENTS ALTERNATIVE DRAWING EVENTS AND THE
CERTIFICATE PRESENTED SHOULD RECITE ONLY THE APPLICABLE ALTERNATIVE.]
Dear Sirs:
Reference is made to that certain Depositary Agreement (the "Depositary
Agreement") dated as of October 16, 2000, among Calpine Construction Finance
Company II, LLC, a Delaware limited liability company ("Borrower"), The Bank of
New York, as Depositary Agent ("Depositary Agent"), and Credit Suisse First
Boston, acting through its New York Branch, as Administrative Agent
("Administrative Agent") for the Banks named in that certain Credit Agreement
dated as of October 16, 2000, among Borrower, the financial institutions listed
on Exhibit H thereto (the "Banks"), Credit Suisse First Boston, acting through
its New York Branch, as Lead Arranger and Administrative Agent, The Bank of Nova
Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of America
Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as
Arranger and Co-Syndication Agent, Bayerische Landesbank Girozentrale, as
Arranger, Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as
Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America
Services LLC, as Arranger and Co-Documentation Agent and TD Securities (USA)
Inc., as Arranger and Co-Documentation Agent. Capitalized terms used herein
without definition shall have the respective meanings specified in the
Depositary Agreement.
Please liquidate investments held in the [NAME OF ACCOUNT] under the
Depositary Agreement in an amount sufficient to yield proceeds of
$_____________, to be used for the payment of [________ COSTS] as set forth in
the [CONSTRUCTION DRAWDOWN CERTIFICATE] [TURBINE PURCHASE DRAWDOWN CERTIFICATE]
[DISBURSEMENT REQUISITION] [SPECIFY ANY OTHER PURPOSES FOR THE WITHDRAWAL],
attached hereto as Schedule 1. Please [PAY] [TRANSFER] such amounts [BY
[OFFICIAL BANK CHECK] [WIRE TRANSFER]] to [THE ________ ACCOUNT(S)] [THE
PERSON(S) SPECIFIED ON SCHEDULE 2 ATTACHED HERETO AT THE ADDRESSES SET FORTH
THEREIN].
The undersigned hereby certifies that:
(a) the undersigned is an officer of the [BORROWER] [AUTHORIZED
REPRESENTATIVE OF BORROWER] and, as such, is authorized to execute this Account
Withdrawal Certificate on behalf of [BORROWER] [AUTHORIZED REPRESENTATIVE OF
BORROWER];
(b) the amounts paid or applied pursuant to this Account Withdrawal
Certificate shall be used for the purpose(s) set forth on Schedule 1 attached
hereto;
Exhibit A
427
(c) no Event of Default and, with respect to withdrawals from the
Construction Account or the Loss Proceeds Account for the Project to which such
withdrawal relates, no Non-Fundamental Project Default has occurred and is
continuing or will occur after giving effect to the withdrawal of funds
requested by this Account Withdrawal Certificate; and
(d) all other conditions to distributions from the [NAME OF ACCOUNT]
set forth in the Credit Agreement have been satisfied.
Very truly yours,
CALPINE CONSTRUCTION FINANCE COMPANY II,
LLC, a Delaware limited liability company
By:
--------------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
-----------------------
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH,
as Administrative Agent for the Banks
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
Exhibit A
428
Schedule 1 to Account Withdrawal Certificate
Use of Proceeds of Withdrawal from [NAME OF ACCOUNT]
Exhibit A - Schedule 1
429
Schedule 2 to Account Withdrawal Certificate
Payees of Proceeds of Withdrawal from [NAME OF ACCOUNT]
Exhibit A - Schedule 2
430
Exhibit B
Form of Disbursement Instruction
[LETTERHEAD OF ADMINISTRATIVE AGENT]
[DATE]
[THE LANGUAGE IN BRACKETS REPRESENTS ALTERNATIVE DRAWING EVENTS AND THE
CERTIFICATE PRESENTED SHOULD RECITE ONLY THE APPLICABLE ALTERNATIVE.]
Dear Sirs:
Reference is made to that certain Depositary Agreement (the "Depositary
Agreement") dated as of October 16, 2000, among Calpine Construction Finance
Company II, LLC, a Delaware limited liability company ("Borrower"), The Bank of
New York, as Depositary Agent ("Depositary Agent"), and Credit Suisse First
Boston, acting through its New York Branch, as Administrative Agent
("Administrative Agent") for the Banks named in that certain Credit Agreement
dated as of October 16, 2000, among Borrower, the financial institutions listed
on Exhibit H thereto (the "Banks"), Credit Suisse First Boston, acting through
its New York Branch, as Lead Arranger and Administrative Agent, The Bank of Nova
Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of America
Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as
Arranger and Co-Syndication Agent, Bayerische Landesbank Girozentrale, as
Arranger, Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as
Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America
Services LLC, as Arranger and Co-Documentation Agent and TD Securities (USA)
Inc., as Arranger and Co-Documentation Agent. Capitalized terms used herein
without definition shall have the respective meanings specified in the
Depositary Agreement.
Please liquidate investments held in the [NAME OF ACCOUNT] under the
Depositary Agreement in an amount sufficient to yield proceeds of
$_____________. Please [PAY] [TRANSFER] such amounts [BY [OFFICIAL BANK CHECK]
[WIRE TRANSFER]] to [THE _________ ACCOUNT(S)] [THE PERSON(S) SPECIFIED ON
SCHEDULE 1 ATTACHED HERETO AT THE ADDRESSES SET FORTH THEREIN].
The undersigned hereby certifies that the undersigned is an officer of
the Administrative Agent and, as such, is authorized to execute this
Disbursement Instruction on behalf of Administrative Agent.
Very truly yours,
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
as Administrative Agent for the Banks
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
Exhibit B
431
Schedule 1 to Disbursement Instruction
Payees of Proceeds of Withdrawal from [NAME OF ACCOUNT]
Exhibit B -- Schedule 1
432
TABLE OF CONTENTS
ARTICLE 1 Definitions; Rules of Interpretation.................................................................... 2
Section 1.1 Definitions.................................................................................. 2
Section 1.2 Rules of Interpretation...................................................................... 3
ARTICLE 2 Appointment of Depositary Agent; Establishment of Accounts.............................................. 3
Section 2.1 Appointment of Depositary Agent............................................................. 3
Section 2.2 Security Interest; Control.................................................................. 3
Section 2.3 Accounts Maintained as UCC "Securities Accounts."........................................... 3
Section 2.4 Borrower's Rights........................................................................... 4
Section 2.5 Creation of Accounts........................................................................ 4
ARTICLE 3 Deposits into Accounts.................................................................................. 7
Section 3.1 Deposits....................................................................................... 7
ARTICLE 4 Payments from Accounts.................................................................................. 7
Section 4.1 Withdrawals by Administrative Agent......................................................... 7
Section 4.2 Withdrawals from Construction Account....................................................... 8
Section 4.3 Withdrawals from the Revenue Account........................................................ 8
Section 4.4 Withdrawals from the Loss Proceeds Account.................................................. 8
Section 4.5 Withdrawals from the Working Capital Reserve Account........................................ 8
ARTICLE 5 Investment ............................................................................................. 9
Section 5.1 Permitted Investments....................................................................... 9
ARTICLE 6 Depositary Agent ....................................................................................... 9
Section 6.1 Rights, Duties, etc.. ...................................................................... 9
Section 6.2 Resignation or Removal...................................................................... 10
ARTICLE 7 Determinations ......................................................................................... 11
Section 7.1 Sales of Permitted Investments.............................................................. 11
Section 7.2 Available Cash.............................................................................. 11
ARTICLE 8 Miscellaneous .......................................................................................... 11
Section 8.1 Fees and Indemnification of Depositary Agent................................................ 11
Section 8.2 Waiver of Right of Set-Off.................................................................. 11
Section 8.3 Termination................................................................................. 12
Section 8.4 Severability................................................................................ 12
Section 8.5 Counterparts................................................................................ 12
Section 8.6 Amendments.................................................................................. 12
Section 8.7 Applicable Law.............................................................................. 12
Section 8.8 Notices, etc................................................................................ 12
Section 8.9 Further Information......................................................................... 13
Section 8.10 Benefit of Agreement........................................................................ 13
Section 8.11 Account Balance Statements.................................................................. 14
Section 8.12 Authorized Officer of Administrative Agent.................................................. 14
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433
EXHIBIT D2-B
to the Credit Agreement
PROJECT COMPLETION GUARANTY
THIS PROJECT COMPLETION GUARANTY (this "Guaranty") dated as of October
16, 2000 is made by CALPINE CORPORATION, a Delaware corporation ("Guarantor"),
in favor of CREDIT SUISSE FIRST BOSTON, acting through its New York Branch, as
Administrative Agent ("Administrative Agent") for the Banks under that certain
Credit Agreement (the "Credit Agreement") dated as of October 16, 2000 among
Calpine Construction Finance Company II, LLC, a Delaware limited liability
company, as Borrower ("Borrower"), the financial institutions listed on Exhibit
H thereto (the "Banks"), Credit Suisse First Boston, acting through its New York
Branch, as Lead Arranger and Administrative Agent, The Bank of Nova Scotia, as
Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of America Securities
LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger
and Co-Syndication Agent, Bayerische Landesbank Girozentrale, as Arranger,
Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as Arranger and
Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as
Arranger and Co-Documentation Agent and TD Securities (USA) Inc., as Arranger
and Co-Documentation Agent.
RECITALS
A. Guarantor owns all the outstanding stock of CCFC II Holdings, Inc., a
Delaware corporation, the sole member of Borrower.
B. Administrative Agent and the Banks have agreed to enter into the
Credit Agreement with Borrower on the condition that Guarantor guarantee certain
of Borrower's obligations thereunder as provided herein.
C. Guarantor acknowledges that it will benefit, directly and indirectly,
if Administrative Agent and the Banks enter into the Credit Agreement.
D. The obligations of Guarantor hereunder are being incurred
concurrently with the obligations of Borrower under the Credit Agreement.
E. Capitalized terms used but not defined herein shall have the
respective meanings given them in Exhibit A to the Credit Agreement and the
Rules of Interpretations contained in said Exhibit A shall apply hereto.
AGREEMENT
NOW, THEREFORE, in consideration of the premises set forth above and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and as an inducement to Administrative Agent and the Banks
to enter into the Credit Agreement with Borrower, Guarantor hereby consents and
agrees as follows:
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1. Guaranty
(a) The undersigned Guarantor, as primary obligor and not merely
as surety, unconditionally and irrevocably guarantees to the Banks (i) the
performance, when due, of the obligations of Borrower under Section 5.14 of the
Credit Agreement to achieve Completion of each of the Initial Projects and the
Funded Subsequent Projects (including with respect to any partially owned
Projects), (ii) the payment, when due, of the obligations of Borrower under
Section 5.17.1, 5.17.2 and 5.17.3(x) of the Credit Agreement and (iii) if
Borrower is unable to obtain a disbursement of Loan proceeds under the Credit
Agreement for any Project for which the requirements of Section 5.14 of the
Credit Agreement have not been waived in accordance with the terms of the Credit
Agreement for a period of 60 consecutive days after a request for the same
pursuant to a Drawdown Certificate delivered pursuant to Section 3.4 of the
Credit Agreement, the prompt payment, when due, of the Project Costs for which
funds were requested in such Drawdown Certificate, in each case together with
the payment of all expenses incurred by Administrative Agent or the Banks in
enforcing any of such obligations and liabilities or the terms hereof,
including, without limitation, reasonable fees and expenses of legal counsel
(collectively, the "Obligations"), and agrees that if for any reason Borrower
shall fail to pay or perform, as the case may be, when due any of such
Obligations, Guarantor will pay or perform, as the case may be, the same
forthwith; provide however, if the default giving rise to the potential exercise
of remedies is susceptible of cure and the failure to so exercise remedies could
not reasonably be expected to have a Material Adverse Effect on Borrower,
Administrative Agent and the Banks shall not exercise any remedies in the nature
of foreclosure on or sale of any Collateral, appointment of a receiver, entry
into possession of any Project or other remedies under the Credit Documents
intended to or having the effect of depriving Borrower or any other Portfolio
Entity of the use, possession or enjoyment of any of the Projects as a result of
an Event of Default thereunder for 90 days so long as Guarantor is diligently
pursuing performance of the Obligations and/or diligently attempting to
refinance all outstanding Loans under the Credit Agreement; provided, further,
that if the Obligations under clause (ii) above have been performed, Guarantor's
liability with respect to the Obligations under clause (i) above shall be
limited to the excess of the cost of achieving Completion of the applicable
Projects over the amounts deposited or contributed pursuant to Section 5.17.3 of
the Credit Agreement. Guarantor waives notice of acceptance of this Guaranty and
of any obligation to which it applies or may apply under the terms hereof, and
waives diligence, presentment, demand of payment or performance, notice of
dishonor or non-payment or non-performance, protest, notice of protest, of any
such obligations, suit or taking other action by the Banks against, and giving
any notice of default or other notice to, or making any demand on, any party
liable thereon (including Guarantor).
(b) This Guaranty is a primary obligation of Guarantor and is an
absolute, unconditional, continuing and irrevocable guaranty of payment and
performance, as the case may be, of the Obligations and not of collectibility,
and is in no way conditioned on or contingent upon any attempt to enforce in
whole or in part Borrower's or any other Portfolio Entity's liabilities and
obligations to the Banks. If Borrower shall fail to pay or perform, as the case
may be, any of the Obligations to the Banks as and when they are due, Guarantor
shall forthwith pay or perform, as the case may be, such Obligations immediately
(in the case of payment obligations, in immediately available funds). Each
failure by Borrower to pay or perform, as the case may be, any Obligations shall
give rise to a separate cause of action herewith, and separate suits may be
brought hereunder as each cause of action arises.
(c) The Banks may, at any time and from time to time (whether or
not after revocation or termination of this Guaranty) without the consent of or
notice to Guarantor, except such notice as may be required by the Credit
Documents or applicable law which cannot be waived, without incurring
responsibility to Guarantor, without impairing or releasing the obligations of
Guarantor hereunder, upon or without any terms or conditions and in whole or in
part, (i) change the manner, place and terms of payment or performance or change
or extend the time of payment or performance of, or renew or alter, any
Obligation, or any obligations and liabilities (including any of those
hereunder)
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435
incurred directly or indirectly in respect thereof or hereof or in any manner
modify, amend or supplement the terms of the Credit Documents (including
provisions with respect to the Completion of the Projects), any documents,
instruments or agreements executed in connection therewith, in each case with
the consent of Borrower or such other relevant Portfolio Entity, if required by
the Credit Documents, and the guaranty herein made shall apply to the
Obligations changed, extended, renewed, modified, amended, supplemented or
altered in any manner, (ii) exercise or refrain from exercising any rights
against Borrower, any other Portfolio Entity or others (including Guarantor) or
otherwise act or refrain from acting; (iii) add or release any other guarantor
from its obligations without affecting or impairing the obligations of Guarantor
hereunder, (iv) settle or compromise any Obligations and/or any obligations and
liabilities (including any of those hereunder) incurred directly or indirectly
in respect thereof or hereof, and may subordinate the payment or performance of
all or any part thereof to the payment or performance of any obligations and
liabilities which may be due to the Banks or others; (v) sell, exchange,
release, surrender, realize upon or otherwise deal with in any manner or in any
order any property by whomsoever pledged or mortgaged to secure or howsoever
securing the Obligations or any liabilities or obligations (including any of
those hereunder) incurred directly or indirectly in respect thereof or hereof
and/or any offset thereagainst; (vi) apply any sums by whomsoever paid or
howsoever realized to any obligations and liabilities of Borrower or any other
Portfolio Entity to the Banks under the Credit Documents in the manner provided
therein regardless of what obligations and liabilities remain unpaid; (vii)
consent to or waive any breach of, or any act, omission or default under, the
Credit Documents (including provisions with respect to the Completion of the
Projects) or otherwise amend, modify or supplement (with the consent of Borrower
or such other relevant Portfolio Entity, if required by the Credit Documents)
the Credit Documents (including provisions with respect to the Completion of the
Projects) or any of such other instruments or agreements; and/or (viii) act or
fail to act in any manner referred to in this Guaranty which may deprive
Guarantor of its right to subrogation against Borrower to recover full indemnity
for any payments or performances made pursuant to this Guaranty or of its right
of contribution against any other party.
(d) No invalidity, irregularity or unenforceability of the
obligations or liabilities hereby guaranteed shall affect, impair or be a
defense to this Guaranty, which is a primary obligation of Guarantor.
(e) This is a continuing Guaranty and all obligations to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. In the event that, notwithstanding the
provisions of Section 1(a) hereof, this Guaranty shall be deemed revocable in
accordance with applicable law, then any such revocation shall become effective
only upon receipt by Administrative Agent of written notice of revocation signed
by Guarantor. No revocation or termination hereof shall affect in any manner
rights arising under this Guaranty with respect to Obligations arising prior to
receipt by Administrative Agent of written notice of such revocation or
termination.
(f) (i) Except as otherwise required by law, each payment
required to be made by Guarantor to the Banks hereunder shall be made without
deduction or withholding for or on account of Taxes. If such deduction or
withholding is so required, Guarantor shall, upon notice thereof from
Administrative Agent, (A) pay the amount required to be deducted or withheld to
the appropriate authorities before penalties attach thereto or interest accrues
thereon, (B) on or before the 60th day after payment of such amount, forward to
the Banks an official receipt evidencing such payment (or a certified copy
thereof), and (C) in the case of any such deduction or withholding, forthwith
pay to Administrative Agent for the account of the Banks such additional amount
as may be necessary to ensure that the net amount actually received by the Banks
is free and clear of such Taxes, including any Taxes on such additional amount,
is equal to the amount that the Banks would have received had there been no such
deduction or withholding.
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436
(ii) As used herein, the term "Tax" means any present or
future tax, levy, impost, duty, charge, assessment or fee of any nature
(including interest, penalties and additions thereto) that is imposed by any
government or other taxing authority in respect of any payment under this
Guaranty other than (A) any income, franchise or similar tax imposed upon the
gross or net income of Administrative Agent or any Bank by the United States,
New York State, any jurisdiction where Administrative Agent or any Bank is
organized and/or the jurisdiction in which is located any office from or at
which Administrative Agent or any Bank is making or maintaining any Loans or
receiving any payments under any of the Credit Documents and (B) any stamp,
registration, documentation or similar tax.
(g) In fulfilling its obligations hereunder with respect to the
Obligations set forth in Section 1(a)(i) hereof, but subject to the provisions
of Section 5.14 of the Credit Agreement, Guarantor hereby irrevocably and
unconditionally guarantees, promises and agrees to perform and comply with
Section 5.14 of the Credit Agreement. The words "perform and comply with" are
used in their most comprehensive sense and include without limitation (i) the
payment of all costs and expenses with respect to the construction of the
Initial Projects and the Funded Subsequent Projects and the construction of such
Projects within the time and in the manner set forth in Section 5.14 of the
Credit Agreement, (ii) the payment, satisfaction or discharge of all Liens
(other than Permitted Liens other than the Liens described in clause (c) of the
definition of "Permitted Liens") arising out of or relating to the construction
and Completion of, and that are or may be imposed upon or asserted against, the
Initial Projects and the Funded Subsequent Projects and (iii) the defense and
indemnification of the Banks against all such Liens, whether arising from the
furnishing of labor, materials, supplies or equipment, from taxes, assessments,
fees or other charges, from injuries or damage to persons or property, or
otherwise. Without limiting the generality of the foregoing, Guarantor agrees
(A) to cause any and all costs of achieving Completion of each of the Initial
Projects and the Funded Subsequent Projects, including without limitation the
costs of all labor, materials, supplies and equipment related thereto and any
and all costs and cost overruns prior to such Completion, to be funded, paid and
satisfied from Guarantor's own resources as the same shall become due and (B) to
cause the Completion of each of the Initial Projects and the Funded Subsequent
Projects, using Guarantor's own resources, in a timely, good and workmanlike
manner, in accordance with the terms of the Credit Documents; provided however.
that Guarantor shall not be required to pay any performance and/or other
liquidated damages due and owing from a Contractor (other than a Contractor that
is an Affiliate of Guarantor) under a Construction Contract; provided further,
Guarantor's liability with respect to such liquidated damages shall be limited
to the amount specified in clause (vi)(B) of the definition of "Completion" less
the amount of any such liquidated damages determined to be due and owing from
any applicable Contractors.
2. Representations and Warranties. Guarantor makes the representations
and warranties set forth below to Administrative Agent and the Banks as of the
date hereof:
(a) Guarantor is duly formed, validly existing and in good
standing under the laws of the State of Delaware and has the power and authority
to execute and deliver this Guaranty and to perform its obligations hereunder.
(b) Guarantor has taken all necessary corporate action to
authorize the execution and delivery of this Guaranty and the performance of its
obligations hereunder.
(c) All governmental authorizations and actions necessary in
connection with the execution and delivery by Guarantor of this Guaranty and the
performance of its obligations hereunder have been obtained or performed and
remain valid and in full force and effect.
(d) This Guaranty has been duly executed and delivered by
Guarantor and constitutes the legal, valid and binding obligation of Guarantor,
enforceable against Guarantor in
4
437
accordance with the terms of this Guaranty, subject to applicable bankruptcy,
insolvency and other similar laws affecting creditors' rights generally.
(e) The execution, delivery and performance of this Guaranty (i)
do not and will not contravene any provisions of Guarantor's certificate of
incorporation or bylaws, or any law, rule, regulation, order, judgment or decree
applicable to or binding on Guarantor or any of its Affiliates or properties;
(ii) do not and will not contravene, or result in any breach of or constitute
any default under, any agreement or instrument to which Guarantor is a party or
by which Guarantor or any of its properties may be bound or affected; and (iii)
do not and will not require the consent of any Person under any existing law or
agreement which has not already been obtained.
(f) There is no pending or, to the best of Guarantor's knowledge,
threatened action or proceeding affecting Guarantor before any court,
governmental agency or arbitrator, which might reasonably be expected to
materially and adversely affect the financial condition, results of operations,
business or prospects of Guarantor or the ability of Guarantor to perform its
obligations under this Guaranty.
(g) All quarterly and annual financial statements heretofore
delivered by Guarantor to Administrative Agent are true, correct and complete,
do not fail to disclose any material liabilities, whether direct or contingent,
fairly present the financial condition of Guarantor as of the date delivered and
are prepared in accordance with generally accepted accounting principles
consistently applied.
(h) Guarantor possesses all franchises, certificates, licenses,
permits and other governmental authorizations and approvals necessary for it to
own its properties, conduct its businesses and perform its obligations under
this Guaranty.
(i) Guarantor is not an investment company or a company
controlled by an investment company, within the meaning of the Investment
Company Act of 1940, and is not subject to, or is exempt from, regulation under
the Public Utility Holding Company Act of 1935 and the Federal Power Act.
(j) Guarantor has established adequate means of obtaining
financial and other information pertaining to the businesses, operations and
condition (financial and otherwise) of Borrower and the other Portfolio Entities
and their respective properties on a continuing basis, and Guarantor now is and
hereafter will be completely familiar with the businesses, operations and
condition (financial and otherwise) of Borrower and the other Portfolio Entities
and their respective properties.
(k) (i) Guarantor is not, and will not as a result of the
execution and delivery of this Guaranty, be rendered insolvent, (ii) Guarantor
does not intend to incur, or believe it is incurring, obligations beyond its
ability to pay or perform and (iii) Guarantor's property remaining after the
delivery and performance of this Guaranty will not constitute unreasonably small
capital.
(1) Guarantor is not in default under any material agreement
relating to the incurrence of debt to which it is a party.
3. Covenants. So long as any Obligations are outstanding, Guarantor
agrees that:
(a) It will maintain in full force and effect all consents of any
governmental or other authority that are required to be obtained by it with
respect to this Guaranty and will obtain any that may become necessary in the
future;
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438
(b) It will comply in all material respects with all applicable
laws and orders to which it may be subject if failure so to comply would
materially impair its ability to perform its obligations under this Guaranty;
(c) Promptly, and in any event within 30 Banking Days after the
General Counsel of Guarantor obtains knowledge thereof, Guarantor will give to
Administrative Agent notice of the occurrence of any event or of any litigation
or governmental proceeding pending (i) against Guarantor or any of its
Affiliates which could affect the business, operations, property, assets or
condition (financial or otherwise) of Guarantor so as to materially and
adversely affect the ability of Guarantor to perform its obligations hereunder
or (ii) with respect to this Guaranty, which event or pending proceeding is
likely to materially and adversely affect the business, operations, property,
assets or condition (financial or otherwise) of Guarantor and its Affiliates
taken as a whole;
(d) It will deliver such other documents and other information
reasonably requested by Administrative Agent;
(e) It will comply in all material respects with its certificate
of incorporation;
(f) Guarantor will not permit its:
(i) Tangible Net Worth to be less than (A) $1,474,280,000
plus (B) 50% of the consolidated net income of Guarantor and its Subsidiaries
(without giving effect to any losses) for each Fiscal Quarter ending on or after
September 30, 2000, plus (C) 100% of the Net Equity Proceeds from any equity
offering by Guarantor after June 30, 2000;
(ii) Leverage Ratio to be greater than .85 to 1.00 as of
the end of any Fiscal Quarter;
(iii) Interest Coverage Ratio as of the end of any Fiscal
Quarter to be less than 1.75 to 1.00 for the 12 month period comprising the four
previous Fiscal Quarters; or
(iv) Interest Coverage Ratio (Parent Only) as of the end
of any Fiscal Quarter to be less than 1.60 to 1.00 for the 12 month period
comprising the four previous Fiscal Quarters.
Guarantor shall furnish, or shall cause to be furnished, to Administrative Agent
as soon as possible and in any event within 60 days after the end of each of the
first three Fiscal Quarters of each Fiscal Year and within 120 days after the
end of each Fiscal Year, a certificate, executed by a Responsible Officer of
Guarantor, showing (in reasonable detail and with appropriate calculations and
computations in all respects reasonably satisfactory to Administrative Agent)
compliance with the covenants set forth in this Section 3(f).
Capitalized terms used in this Section 3(f) and defined in Appendix A attached
hereto shall have the meanings given therein.
4. Waiver. Guarantor hereby waives and relinquishes all rights and
remedies accorded by applicable law to sureties or guarantors and agrees not to
assert or take advantage of any such rights or remedies, including without
limitation (a) any right to require Administrative Agent or the Banks to proceed
against Borrower or any other Person or to proceed against or exhaust any
security held by Administrative Agent or the Banks at any time or to pursue any
other remedy in Administrative Agent's or the Banks' power before proceeding
against Guarantor, (b) any defense that may arise by reason of the incapacity,
lack of power or authority, death, dissolution, merger, termination or
disability
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439
of Borrower or any other Person or the failure of Administrative Agent or the
Banks to file or enforce a claim against the estate (in administration,
bankruptcy or any other proceeding) of Borrower or any other Person, (c) demand,
presentment, protest and notice of any kind except as provided herein, including
without limitation notice of the existence, creation or incurring of any new or
additional indebtedness or obligation or of any action or non-action on the part
of Borrower, Administrative Agent, the Banks, any endorser or creditor of
Borrower or Guarantor or on the part of any other Person under this or any other
instrument in connection with any obligation or evidence of indebtedness held by
Administrative Agent or the Banks as collateral or in connection with any
Obligations, (d) any defense based upon an election of remedies by
Administrative Agent or the Banks, including without limitation an election to
proceed by non-judicial rather than judicial foreclosure, which destroys or
otherwise impairs the subrogation rights of Guarantor, the right of Guarantor to
proceed against Borrower for reimbursement, or both, (e) any defense based on
any offset against any amounts which may be owed by any Person to Guarantor for
any reason whatsoever, (f) any defense based on any act, failure to act, delay
or omission whatsoever on the part of Borrower or any other Portfolio Entity of
the failure by Borrower or any other Portfolio Entity to do any act or thing or
to observe or perform any covenant, condition or agreement to be observed or
performed by it under the Credit Documents, (g) any defense based upon any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal provided, that, upon payment or performance in full of the
Obligations, this Guaranty shall no longer be of any force or effect, (h) any
defense, setoff or counterclaim which may at any time be available to or
asserted by Borrower or any other Portfolio Entity against Administrative Agent,
the Banks or any other Person under the Credit Documents, (i) any duty on the
part of Administrative Agent or the Banks to disclose to Guarantor any facts
Administrative Agent or the Banks may now or hereafter know about Borrower or
any other Portfolio Entity, regardless of whether Administrative Agent or the
Banks have reason to believe that any such facts materially increase the risk
beyond that which Guarantor intends to assume, or have reason to believe that
such facts are unknown to Guarantor, or have a reasonable opportunity to
communicate such facts to Guarantor, since Guarantor acknowledges that Guarantor
is fully responsible for being and keeping informed of the financial condition
of Borrower and the other Portfolio Entities and of all circumstances bearing on
the risk of non-payment or non-performance of any obligations and liabilities
hereby guaranteed, (j) the fact that Guarantor may at any time in the future
dispose of all or part of its direct or indirect interest in Borrower or any
other Portfolio Entity, (k) any defense based on any change in the time, manner
or place of any payment or performance under, or in any other term of, the
Credit Documents (including provisions with respect to the Completion of the
Projects) or any other amendment, renewal, extension, acceleration, compromise
or waiver of or any consent or departure from the terms of the Credit Documents
(including provisions with respect to the Completion of the Projects), (l) any
defense arising because of Administrative Agent's or the Banks' election, in any
proceeding instituted under the Federal Bankruptcy Code, of the application of
Section 1111(b)(2) of the Federal Bankruptcy Code, and (m) any defense based
upon any borrowing or grant of a security interest under Section 364 of the
Federal Bankruptcy Code.
5. Subordination. Except as otherwise specifically provided in this
Guaranty, all existing and future indebtedness of Borrower or any other
Portfolio Entity to Guarantor (except to the extent such indebtedness consists
of approved operating expenses or other O&M Costs with respect to materials or
services provided consistent with an applicable Annual Operating Budget) and the
right of Guarantor to withdraw any capital invested by Guarantor in Borrower or
any other Portfolio Entity, is hereby subordinated to all obligations and
liabilities hereby guaranteed. Without the prior written consent of
Administrative Agent, such subordinated indebtedness shall not be paid or
withdrawn in whole or in part, nor shall Guarantor accept any payment of or on
account of any such indebtedness or as a withdrawal of capital while the Credit
Agreement is in effect except from distributions permitted under Waterfall Level
8 and 10 of Section 7.2 of the Credit Agreement or as permitted under Section
3.10(b) of the Credit Agreement. Any payment by Borrower in violation of this
Guaranty shall be received by Guarantor in trust for Administrative Agent and
the Banks, and Guarantor shall cause the same to be paid
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440
to Administrative Agent for the benefit of the Banks immediately upon demand by
Administrative Agent on account of Borrower's obligations and liabilities hereby
guaranteed. Guarantor shall not assign all or any portion of such indebtedness
while the Credit Agreement remains in effect except upon prior written notice to
Administrative Agent by which the assignee of any such indebtedness agrees that
the assignment is made subject to the terms of this Guaranty, and that any
attempted assignment of such indebtedness in violation of the provisions hereof
shall be void.
6. Subrogation. So long as the Credit Agreement remains in effect, (a)
Guarantor shall not have any right of subrogation and waives all rights to
enforce any remedy which the Banks now have or may hereafter have against
Borrower or any other Portfolio Entity, and waives the benefit of, and all
rights to participate in, any security now or hereafter held by Administrative
Agent or the Banks from Borrower or any other Portfolio Entity and (b) Guarantor
waives any claim, right or remedy which Guarantor may now have or hereafter
acquire against Borrower or any other Portfolio Entity that arises hereunder
and/or from the performance by Guarantor hereunder including, without
limitation, any claim, remedy or right of subrogation, reimbursement,
exoneration, contribution, indemnification, or participation in any claim, right
or remedy of the Banks against Borrower or any other Portfolio Entity, or any
security which the Banks now have or hereafter acquire, whether or not such
claim, right or remedy arises in equity, under contract, by statute, under
common law or otherwise.
7. Bankruptcy.
(a) So long as the Credit Agreement remains in effect, Guarantor
shall not, without the prior written consent of Administrative Agent, commence,
or join with any other Person in commencing, any bankruptcy, reorganization, or
insolvency proceeding against Borrower or any other Portfolio Entity. The
obligations of Guarantor under this Guaranty shall not be altered, limited or
affected by any proceeding, voluntary or involuntary, involving the bankruptcy,
reorganization, insolvency, receivership, liquidation or arrangement of Borrower
or any other Portfolio Entity, or by any defense which Borrower or any other
Portfolio Entity may have by reason of any order, decree or decision of any
court or administrative body resulting from any such proceeding.
(b) So long as the Credit Agreement remains in effect, to the
extent of any Obligations, Guarantor shall file, in any bankruptcy or other
proceeding in which the filing of claims is required or permitted by law, all
claims which Guarantor may have against Borrower or any other Portfolio Entity
relating to any indebtedness of Borrower or any other Portfolio Entity to
Guarantor, and hereby assigns to Administrative Agent on behalf of the Banks all
rights of Guarantor thereunder. If Guarantor does not file any such claim,
Administrative Agent, as attorney-in-fact for Guarantor, is hereby authorized to
do so in the name of Guarantor or, in Administrative Agent's discretion, to
assign the claim to a nominee and to cause proofs of claim to be filed in the
name of Administrative Agent's nominee. The foregoing power of attorney is
coupled with an interest and cannot be revoked. Administrative Agent or its
nominee shall have the sole right to accept or reject any plan proposed in any
such proceeding and to take any other action which a party filing a claim is
entitled to take. In all such cases, whether in administration, bankruptcy or
otherwise, the person authorized to pay such a claim shall pay the same to
Administrative Agent to the extent of any Obligations which then remain unpaid,
and, to the full extent necessary for that purpose, Guarantor hereby assigns to
Administrative Agent all of Guarantor's rights to all such payments or
distributions to which Guarantor would otherwise be entitled; provided, however,
that Guarantor's obligations hereunder shall not be satisfied except to the
extent that Administrative Agent receives cash by reason of any such payment or
distribution. If Administrative Agent receives anything hereunder other than
cash, the same shall be held as collateral for amounts due under this Guaranty.
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441
8. Successions or Assignments.
(a) This Guaranty shall inure to the benefit of the successors or
assigns of the Banks who shall have, to the extent of their interest, the rights
of the Banks hereunder; provided, however, that the rights of the Banks
hereunder, if any be retained by them, shall have priority over and be senior to
the rights of its successors or assigns unless Administrative Agent shall
otherwise elect.
(b) This Guaranty is binding upon Guarantor and its successors
and assigns. Guarantor is not entitled to assign its obligations hereunder to
any other person without the written consent of Administrative Agent, and any
purported assignment in violation of this provision shall be void.
9. Waivers.
(a) No delay on the part of Administrative Agent or the Banks in
exercising any of their rights (including those hereunder) and no partial or
single exercise thereof and no action or non-action by Administrative Agent or
the Banks, with or without notice to Guarantor or anyone else, shall constitute
a waiver of any rights or shall affect or impair this Guaranty.
(b) GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY OR RELATING
TO THE SUBJECT MATTER OF THIS GUARANTY AND THE RELATIONSHIP BETWEEN GUARANTOR
AND ADMINISTRATIVE AGENT THAT IS BEING ESTABLISHED. GUARANTOR ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
ADMINISTRATIVE AGENT HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
GUARANTY, AND THAT ADMINISTRATIVE AGENT WILL CONTINUE TO RELY ON THE WAIVER IN
THEIR RELATED FUTURE DEALINGS. GUARANTOR FURTHER WARRANTS AND REPRESENTS THAT IT
HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.
10. Interpretation. The section headings in this Guaranty are for the
convenience of reference only and shall not affect the meaning or construction
of any provision hereof.
11. Notices. All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be considered as properly
given (a) if delivered in person, (b) if sent by overnight delivery service by
the addressee, except that communication or notice so transmitted by telecopy or
other direct written electronic means shall be deemed to have been validly and
effectively given on the day (if a Bank Day and, if not, on the next following
Banking Day) on which it is transmitted if transmitted before 4:00 p.m.,
recipient's time, and if transmitted after that time, on the next following
Banking Day; provided, however, that if any notice is tendered to an addressee
and the delivery thereof is refused by such addressee, such notice shall be
effective upon such tender. Any party shall have the right to change its address
for notice hereunder to any other location within the continental United States
by giving of 30 days' notice to the other parties in the manner set forth
hereinabove.
12. Amendments. This Guaranty may be amended only with the written
consent of the parties hereto.
13. Jurisdiction: Governing Law.
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442
(a) Any action or proceeding relating in any way to this Guaranty
may be brought and enforced in the courts of the State of New York or of the
United States for the Southern District of New York. Any such process or summons
in connection with any such action or proceeding may be served by mailing a copy
thereof by certified or registered mail, or any substantially similar form of
mail, addressed to Guarantor as provided for notices hereunder.
(b) This Guaranty and the rights and obligations of
Administrative Agent and of Guarantor shall be governed by and construed in
accordance with the law of the State of New York without reference to principles
of conflicts of laws (other than Section 5-1401 of the New York General
Obligations Law).
14. Integration of Terms. This Guaranty contains the entire agreement
between Guarantor and the Banks relating to the subject matter hereof and
supersedes all oral statements and prior writing with respect hereto.
15. Addresses.
(a) The address of Guarantor for notices is:
Calpine Corporation
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
(b) The address of Administrative Agent for notices is:
Credit Suisse First Boston
New York Branch
Eleven Madison Avenue
New York, New York 10010-3629
Attn: Portfolio Management
Telephone No.(▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
16. Interest; Collection Expenses. Any amount required to be paid by
Guarantor pursuant to the terms hereof shall bear interest at the Default Rate
or the maximum rate permitted by law, whichever is less, from the date due until
paid in full. If Administrative Agent or the Banks are required to pursue any
remedy against Guarantor hereunder, Guarantor shall pay to Administrative Agent
or the Banks, as the case may be, upon demand, all reasonable attorneys' fees
and expenses all other costs and expenses incurred by Administrative Agent or
the Banks in enforcing this Guaranty.
17. Termination; Reinstatement of Guaranty. Upon the indefeasible
payment in full of all Obligations owing under the Credit Agreement, this
Guaranty shall terminate in its entirety. Notwithstanding the foregoing, this
Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment to or on behalf of Borrower or to Administrative Agent
by Borrower or any other Person in respect of the Obligations (as such term is
defined in the Credit Agreement) or by Guarantor hereunder is rescinded or must
otherwise be returned by Administrative Agent upon the insolvency, bankruptcy,
reorganization, dissolution or liquidation of Borrower or any other Portfolio
Entity or otherwise, all as though such payment had not been made.
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443
18. Counterparts. The Guaranty may be executed in one or more duplicate
counterparts, and when executed and delivered by all of the parties listed below
shall constitute a single binding agreement.
19. No Benefit to Borrower. This Guaranty is for the benefit of only
Administrative Agent and is not for the benefit of Borrower or any other
Portfolio Entity. Notwithstanding that, pursuant to the Credit Agreement,
Guarantor may treat any amounts actually paid hereunder as a loan to Borrower,
the Guaranty shall not be deemed to be a contract to make a loan, or extend
other debt financing or financial accommodation, for the benefit of Borrower, in
each case within the meaning of Section 365(e) of the Federal Bankruptcy Code.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed and delivered as of the day and year first written above.
CALPINE CORPORATION,
a Delaware corporation
By:
------------------------------------------
Name:
Title:
Agreed and accepted.
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH, as
Administrative Agent
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
445
APPENDIX A TO PROJECT COMPLETION GUARANTY
"Asset Sale" means any sale, transfer, lease or other disposition pursuant to
which (a) Guarantor or a Subsidiary receives consideration at the time of such
sale, transfer, lease contribution or conveyance at least equal to the fair
market value of assets being sold, transferred, leased, contributed or conveyed,
(b) at least 60% of the consideration received by Guarantor or such Subsidiary
is in the form of cash or cash equivalents and (c) an amount equal to 100% of
Net Available Cash is either (x) reinvested in additional assets within 365 days
of such asset sale or (y) used by Guarantor to prepay the loans and to
permanently reduce the commitments under the Guarantor Credit Agreement.
"Capital Expenditures" means, for any period, the aggregate amount of all
expenditures of Guarantor and its Subsidiaries for fixed or capital assets made
during such period which, in accordance with GAAP, would be classified as
capital expenditures.
"Capitalized Lease Liabilities" means all rental obligations of Guarantor or any
of its Subsidiaries under any leasing or similar arrangement which, in
accordance with GAAP, would be classified as capitalized leases, where (a) the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with GAAP, and (b) the stated maturity thereof shall be the date
of the last payment of rent or any other amount due under such lease prior to
the first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"Cogen America" means Cogeneration Corporation of America, a Delaware
corporation of which Guarantor owns not less than 50% of the outstanding voting
stock.
"Consolidated EBITDA" means, for any period, as applied to Guarantor, the sum of
Consolidated Net Income (Loss) (but without giving effect to adjustments,
accruals, deductions or entries resulting from purchase accounting,
extraordinary losses or gains and any gains or losses from any Asset Sales),
plus the following to the extent included in calculating Consolidated Net Income
(Loss): (a) Consolidated Income Tax Expense, (b) Consolidated Interest Expense,
(c) depreciation expense, (d) amortization expense and (e) all other non-cash
items reducing Consolidated Net Income, less all non-cash items increasing
Consolidated Net Income, in each case for such period; provided that, if
Guarantor has any Subsidiary that is not a Wholly Owned Subsidiary, Consolidated
EBITDA shall be reduced (to the extent not otherwise reduced by GAAP) by an
amount equal to (A) the consolidated net income (loss) of such Subsidiary (to
the extent included in Consolidated Net Income (Loss)) multiplied by (B) the
quotient of (1) the number of shares of outstanding common stock of such
Subsidiary not owned on the last day of such period by Guarantor or any Wholly
Owned Subsidiary divided by (2) the total number of shares of outstanding common
stock of such Subsidiary on the last day of such period.
"Consolidated Income Tax Expense" means, for any period, as applied to
Guarantor, the provision for local, state, federal or foreign income taxes on a
consolidated basis for such period determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, as applied to Guarantor,
the sum of (a) the total interest expense of Guarantor and its consolidated
Subsidiaries for such period as determined in accordance with GAAP, plus (b) all
but the principal component of rentals in respect of Capitalized Lease
Liabilities paid, accrued, or scheduled to be paid or accrued by Guarantor or
its consolidated Subsidiaries, plus (c) one-third of all operating lease
obligations paid, accrued, and/or scheduled to be paid by Guarantor and its
consolidated Subsidiaries, plus (d) capitalized interest, plus (e) dividends
paid in respect of preferred stock of Guarantor or any Subsidiary held by
Persons other than Guarantor or a Wholly Owned Subsidiary, including, without
limitation, but without duplication of payments by Guarantor to a Trust, all
payments by a Trust of dividends and distributions with respect to the
446
Guaranteed Preferred Securities, plus (f) cash contributions to any employee
stock ownership plan to the extent such contributions are used by such employee
stock ownership plan to pay interest or fees to any Person (other than Guarantor
or a Subsidiary) in connection with loans incurred by such employee stock
ownership plan to purchase capital stock of Guarantor.
"Consolidated Net Income (Loss)" means, for any period, as applied to Guarantor,
the Consolidated Net Income (Loss) of Guarantor and its consolidated
Subsidiaries for such period, determined in accordance with GAAP, adjusted by
excluding (without duplication), to the extent included in such net income
(loss), the following: (i) all extraordinary gains or losses; (ii) any net
income of any Person if such Person is not incorporated or organized in the
United States, a state thereof or the District of Columbia, except that (A)
Guarantor's equity in the net income of any such Person for such period shall be
included in Consolidated Net Income (Loss) up to the aggregate amount of cash
actually distributed by such Person during such period to Guarantor or a
Subsidiary incorporated or organized in the United States, a state thereof or
the District of Columbia, as a dividend or other distribution and (B) the equity
of Guarantor or a Subsidiary in a net loss of any such Person for such period
shall be included in determining Consolidated Net Income (Loss); (iii) the net
income of any Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary of such income is not at
the time thereof permitted, directly or indirectly, by operation of the terms of
its charter or by-laws or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Subsidiary or its
stockholders; (iv) any net income (or loss) of any Person combined with
Guarantor or any of its Subsidiaries on a "pooling of interests" basis
attributable to any period prior to the date of such combination; (v) any gain
(but not loss) realized upon the sale or other disposition of any property,
plant or equipment of Guarantor or its Subsidiaries (including pursuant to any
sale-and-leaseback arrangement) which is not sold or otherwise disposed of in
the ordinary course of business and any gain (but not loss) realized upon the
sale or other disposition by Guarantor or any Subsidiary of any capital stock of
any Person, provided that losses shall be included on an after-tax basis; and
(vi) the cumulative effect of a change in accounting principles; and further
adjusted by subtracting from such net income the tax liability of any parent of
Guarantor to the extent of payments made to such parent by Guarantor pursuant to
any tax sharing agreement or other arrangement for such period.
"Contingent Liability" means any agreement, undertaking or arrangement by which
any Person guarantees, endorses or otherwise becomes or is contingently liable
upon (by direct or indirect agreement, contingent or otherwise, to provide funds
for payment, to supply funds to, or otherwise to invest in, a debtor, or
otherwise to assure a creditor against loss) the indebtedness, obligation or any
other liability of any other Person (other than by endorsements of instruments
in the course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The amount of any Person's
obligation under any Contingent Liability shall be calculated on a net basis
(i.e., after taking into effect agreements, undertakings and other arrangements
between the Person whose obligations are being guaranteed and the counterparty
to such Person's obligations) and shall (subject to any limitation set forth
therein) be deemed to be the outstanding net principal amount (or maximum net
principal amount, if larger) of the debt, obligation or other liability
guaranteed thereby, or, if the principal amount is not stated or determinable,
the maximum reasonably anticipated net liability in respect thereof as
determined by the Person in good faith, provided that (y) the amount of any
Contingent Liability arising out of any indebtedness, obligation or liability
other than the items described in clauses (a), (b) and (c) of the definition of
"Indebtedness" (as defined in this Appendix A) and (z) the amount of any
Contingent Liability consisting of a "keep-well," "make well" or other similar
arrangement shall be deemed to be zero unless and until Guarantor is required to
make any payment with respect thereto (and shall thereafter be deemed to be the
amount required to be paid).
"Debt" means the outstanding principal amount of all Indebtedness of Guarantor
and its consolidated Subsidiaries of the nature referred to in clauses (a) (b),
(c) and (f) of the definition of "Indebtedness" (as
447
defined in this Appendix A), and (without duplication) all Contingent
Liabilities in respect of any of the foregoing.
"Facility" means a power generation facility or energy producing facility,
including any related fuel reserve.
"Fiscal Quarter" means any period of three consecutive months ending on March
31, June 30, September 30 or December 31 of any year.
"Fiscal Year" means any period of twelve consecutive calendar months ending on
December 31.
"Guaranteed Preferred Securities" means the preferred securities issued by one
of the Trusts, from time to time, including, without limitation the $276,000,000
of principal amount of such securities issued in October, 1999, the $300,000,000
of principal amount of such securities issued in January; 2000 and the
$60,000,000 of principal amount of such securities issued in February, 2000.
"Guarantor EBITDA" means, for any period, the Consolidated EBITDA of Guarantor
and its Subsidiaries, minus that portion of Consolidated Interest Expense
payable by the consolidating Subsidiaries, minus the principal payments of the
consolidating Subsidiaries, minus the consolidated non-discretionary Capital
Expenditures (i.e., Capital Expenditures which are expressly required to be made
under any agreement, contract, instrument, permit, license, law, regulation,
judgment or other arrangement (other than those arrangements and contracts that
relate to the performance of the work for which the Capital Expenditure is being
made) binding on Guarantor or any Subsidiary) of Guarantor and its Subsidiaries,
plus, without duplication, cash and Permitted Investments of Guarantor's Wholly
Owned Subsidiaries and Cogen America that are legally and contractually
available to each such Subsidiary for the payment of dividends, but only to the
extent the source of such cash and Permitted Investments is from that portion of
Consolidated EBITDA attributable to such Subsidiary or from repayments to such
Subsidiary of loans made by such Subsidiary.
"Guarantor Credit Agreement" means that certain First Amended and Restated
Credit Agreement (as amended, amended and restated or otherwise modified from
time to time), dated as of May 23, 2000, among Guarantor, certain commercial
lending institutions party thereto (the "Guarantor Lenders") and The Bank of
Nova Scotia, as agent for the Guarantor Lenders or, if the Guarantor Credit
Agreement has been terminated, any replacement thereof.
"Guarantor Interest Expense" means, for any period, as applied to Guarantor, the
sum of (a) the total interest expense of Guarantor for such period as determined
in accordance with GAAP, including, without limitation, all interest paid by
Guarantor under its subordinated debt securities issued to a Trust, plus (b) all
but the principal component of rentals in respect of Capitalized Lease
Liabilities paid, accrued, or scheduled to be paid or accrued by Guarantor, plus
(c) one-third of all operating lease obligations paid, accrued and/or scheduled
to be paid by Guarantor, plus (d) capitalized interest, plus (e) dividends paid
in respect of preferred stock of Guarantor held by Persons other than Guarantor,
plus (f) cash contributions to any employee stock ownership plan to the extent
such contributions are used by such employee stock ownership plan to pay
interest or fees to any person (other than Guarantor) in connection with loans
incurred by such employee stock ownership plan to purchase capital stock of
Guarantor.
"Hedging Obligations" means, with respect to any Person, the net liabilities of
such Person under (a) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, foreign exchange contracts,
currency swap agreements and all other agreements or arrangements designed to
protect such Person against fluctuations in interest rates or currency exchange
rates and (b) commodity or power swap or exchange agreements.
448
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
(b) all obligations, contingent or otherwise, relative to the
stated amount of all letters of credit and banker's acceptances issued for the
account of such Person (excluding Guarantor's subordinated debt securities
issued to a Trust and the Guaranteed Preferred Securities, or any similar
securities); provided, however, that if a letter of credit or banker's
acceptance has been issued to support or secure any other form of Indebtedness,
only the greater of the stated amount of such letter of credit or banker's
acceptance or the outstanding principal amount of Indebtedness supported or
secured, but not both, will be considered Indebtedness hereunder;
(c) all obligations of such Person as lessee under leases which
have been or should be, in accordance with GAAP, recorded as Capitalized Lease
Liabilities;
(d) all other items other than deferred taxes, deferred revenue
and deferred leases which, in accordance with GAAP, would be included as
liabilities on the liability side of the balance sheet of such Person as of the
date at which Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging Obligations;
(f) whether or not so included as liabilities in accordance with
GAAP, all net obligations of such Person to pay the deferred purchase price of
property or services (excluding accounts payable incurred in the ordinary course
of business), and indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements), whether or
not such indebtedness shall have been assumed by such Person or is limited in
recourse, but excluding any royalties or similar payments to be made by such
Person which are based on production or performance; and
(g) all Contingent Liabilities of such Person in respect of any
of the foregoing.
For all purposes of this Guaranty, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer, unless the indebtedness of such partnership
or joint venture is expressly nonrecourse to such Person.
"Interest Coverage Ratio" means, for any period of four Fiscal Quarters, the
ratio of (x) the Consolidated EBITDA of Guarantor and its Subsidiaries during
such period to (y) the Consolidated Interest Expense of Guarantor and its
Subsidiaries (excluding from Consolidated Interest Expense for purposes of this
clause interest capitalized in connection with the construction of a new
Facility which interest is capitalized during the construction of such Facility)
incurred during such period.
"Interest Coverage Ratio (Parent Only)" means, for any period of four Fiscal
Quarters, the ratio of (x) the Guarantor EBITDA during such period to (y)
Guarantor Interest Expense (excluding from Guarantor Interest Expense for
purposes of this clause interest capitalized in connection with the construction
of a new Facility which interest is capitalized during the construction of such
Facility) during such period.
"Leverage Ratio" means the ratio of (a) Debt to (b) Debt plus Tangible Net
Worth.
449
"Lien" means any security interest, mortgage, pledge, hypothecation, assignment
for security, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"Net Available Cash" means, with respect to any Asset Sale, the cash or cash
equivalent payments received by Guarantor or a Subsidiary in connection with
such Asset Sale (including any cash received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
or when received and also including the proceeds of other property received when
converted to cash or cash equivalents) net of the sum of, without duplication,
(i) all reasonable legal, title and recording tax expenses, reasonable
commissions, and other reasonable fees and expenses incurred directly relating
to such Asset Sale, (ii) all local, state, federal and foreign taxes required to
be paid or accrued as a liability by Guarantor or any of its Subsidiaries as a
consequence of such Asset Sale, (iii) payments made to repay Indebtedness which
is secured by any assets subject to such Asset Sale in accordance with the terms
of any Lien upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or by applicable law, be repaid out of the
proceeds from such Asset Sale and (iv) all distributions required by any
contract entered into other than in contemplation of such Asset Sale to be paid
to any holder of a minority equity interest in such Subsidiary as a result of
such Asset Sale, so long as such distributions do not exceed such minority
holder's pro rata portion (based on such minority holder's proportionate equity
interest) of the cash or cash equivalent payments described above, net of the
amounts set forth in clauses (i)-(iii) above.
"Net Equity Proceeds" means, with respect to any issuance by Guarantor or a
Trust of any equity securities (including the Guaranteed Preferred Securities),
the gross consideration received by or for the account of Guarantor minus
underwriting and brokerage commissions, discounts and fees relating to such
issuance that are payable by Guarantor.
"Person" means any natural person, corporation, partnership, limited liability
company, firm, association, trust, government, governmental agency or any other
entity, whether acting in an individual, fiduciary or other capacity.
"Subsidiary" means, with respect to any Person, any corporation, partnership or
other Person of which more than 50% of the outstanding capital stock or other
comparable ownership interest having ordinary voting power to elect a majority
of the board of directors of such corporation (irrespective of whether at the
time capital stock of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person, by such Person and one or more
other Subsidiaries of such Person, or by one or more other Subsidiaries of such
Person.
"Tangible Net Worth" means the consolidated net worth of Guarantor and its
Subsidiaries, including the aggregate outstanding face amount of the Guaranteed
Preferred Securities, after subtracting therefrom the aggregate amount of any
intangible assets of Guarantor and its Subsidiaries, including goodwill,
franchises, licenses, patents, trademarks, trade names, copyrights, service
marks and brand names.
"Trust" means Calpine Capital Trust and Calpine Capital Trust I, each a Delaware
business trust.
"Wholly Owned Subsidiary" means a Subsidiary all the capital stock (or other
comparable ownership interests) of which (other than directors' qualifying
shares) is owned by Guarantor or another Wholly Owned Subsidiary.
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EXHIBIT D4-D
CCFC II EQUIPMENT FINANCE COMPANY SECURITY AGREEMENT
This CCFC II EQUIPMENT FINANCE COMPANY SECURITY AGREEMENT
(this "Agreement"), dated as of __________________, __________, is entered into
by and between CCFC II EQUIPMENT FINANCE COMPANY, LLC, a Delaware limited
liability company ("Owner"), and CREDIT SUISSE FIRST BOSTON, acting through its
New York Branch, as Administrative Agent ("Administrative Agent") for the Banks
(as defined below).
PREFACE
A. Calpine Construction Finance Company II, LLC, a Delaware limited
liability company ("Borrower"), the financial institutions listed on Exhibit H
to the Credit Agreement (the "Banks"), Credit Suisse First Boston, acting
through its New York Branch, as Lead Arranger and Administrative Agent
("Administrative Agent"), The Bank of Nova Scotia, as Lead Arranger,
Co-Syndication Agent and Bookrunner, Banc of America Securities LLC, as Arranger
and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and Co-Syndication
Agent, Bayerische Landesbank Girozentrale, as Arranger, Co-Documentation Agent
and LC Bank, CIBC World Markets Corp., as Arranger and Co-Documentation Agent,
Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as Arranger and
Co-Documentation Agent and TD Securities (USA) Inc., as Arranger and
Co-Documentation Agent, have entered into that certain Credit Agreement, dated
as of October 16, 2000 (as modified, supplemented or amended from time to time,
the "Credit Agreement"), pursuant to which the Banks agreed to make certain
advances of credit to Borrower in the amounts specified and on the terms and
subject to the conditions set forth therein. For purposes of this Agreement, the
term "Banks" shall include the Administrative Agent, the Lead Arrangers, the
Co-Syndication Agents, the Bookrunner, the Co-Documentation Agents and the Banks
(as such terms are defined in the Credit Agreement).
B. Owner is a wholly-owned Subsidary of Borrower and each of the
Equipment Finance Companies are Subsidiaries of Owner. Each Equipment Finance
Company intends to finance certain Costs associated with such entity's purchase
of equipment with funds borrowed from Owner. Owner intends to borrower such
funds from Borrower and Borrower intends to borrower such funds pursuant to the
Credit Agreement.
C. As a condition precedent to the Banks' making the advances of credit
contemplated by the Credit Agreement, the Banks require that Owner shall have
executed this Agreement.
AGREEMENT
In consideration of the promises contained herein, and in order to
induce the Banks to enter into the Credit Agreement and to make the advances of
credit pursuant to the terms thereof, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, Owner
hereby agrees with Administrative Agent for the benefit of Administrative Agent
and the Banks as follows:
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1. DEFINITIONS.
1.1 "UCC" shall mean the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of New York; provided, however, in the
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, the term "UCC" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.
1.2 All capitalized terms used, but not otherwise defined herein, shall
have the meanings provided in the Credit Agreement. All other terms used herein
(whether or not capitalized) shall have the meanings given them in the UCC. The
rules of interpretation contained in Exhibit A to the Credit Agreement shall
apply to this Agreement.
2. ASSIGNMENT, PLEDGE AND GRANT OF SECURITY INTEREST.
2.1 To secure the timely payment and performance of the Obligations (as
defined in Section 3 hereof) Owner does hereby assign, grant and pledge to, and
subject to a security interest in favor of, Administrative Agent, on behalf of
and for the benefit of Administrative Agent and the Banks, all the estate,
right, title and interest of Owner, whether now owned or hereafter acquired, in,
to and under:
2.1.1 The following agreements and documents, as amended from
time to time (individually, an "Assigned Agreement," and collectively, the
"Assigned Agreements") and all of Owner's rights thereunder:
(a) all Project Documents and Equipment Leases with respect to
which Owner is or may become a party from time to time;
(b) the insurance policies maintained or required to be
maintained by Owner or any other Person under any Operative Document; and
(c) all amendments, supplements, substitutions and renewals to
any of the aforesaid agreements.
2.1.2 the Portfolio Entity Notes from each Equipment Finance
Company (collectively, the "Equipment Finance Company Portfolio Entity Notes");
2.1.3 all other personal property and fixtures of Owner,
including without limitation personal property and fixtures relating to any
equipment or Equipment Lease, whether now owned or existing or hereafter
acquired or arising, or in which Owner may have an interest, and wheresoever
located, whether or not of a type which may be subject to a security interest
under the UCC, including without limitation all machinery, tools, engines,
turbines (including combustion turbines and steam turbine generators), boilers,
fuel storage tanks, control
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equipment, appliances, mechanical and electrical systems, elevators, lighting,
alarm systems, fire control systems, furnishings, furniture, as-extracted,
collateral, equipment, service equipment, motor vehicles, building or
maintenance equipment, building or maintenance materials, pipes and pipelines
supplies, goods and property covered by any warehouse receipts or bills of
lading or other such documents, spare parts, maps, plans, specifications,
architectural, engineering, construction or shop drawings, manuals or similar
documents, copyrights, trademarks and trade names, and any replacements,
renewals or substitutions for any of the foregoing or additional tangible or
intangible personal property hereafter acquired by Owner;
2.1.4 all goods, money, instruments, investment securities,
investment property, accounts, contract rights, commercial tort claims, letters
of credit, letter of credit rights, payment intangibles, promissory notes,
software, supporting obligations, documents, deposit accounts, chattel paper
(including tangible and electronic chattel paper), general intangibles, and
inventory, including without limitation those relating to any equipment or
Equipment Lease; and
2.1.5 the proceeds of all of the foregoing (all of the
collateral described in clauses 2.1.1 through 2.1.5, being herein collectively
referred to as the "Collateral"), including without limitation, (a) all rights
of Owner to receive moneys due and to become due under or pursuant to the
Collateral; (b) all rights of Owner to receive the return of any premiums for,
or proceeds of, any insurance, indemnity, warranty or guaranty with respect to
the Collateral or to receive any condemnation proceeds; (c) all claims of Owner
for damages arising out of, or for breach of or default under, the Assigned
Agreements or any other Collateral; (d) all rights of Owner to terminate, amend,
supplement, modify or waive performance under the Assigned Agreements, to
perform thereunder and to compel performance and otherwise exercise all remedies
thereunder; and (e) to the extent not included in the foregoing, all proceeds
receivable or received when any and all of the foregoing Collateral is sold,
collected, exchanged or otherwise disposed of, whether voluntarily or
involuntarily.
2.2 In order to effectuate the foregoing, Owner has heretofore
delivered, or concurrently with the delivery hereof, is delivering to
Administrative Agent an executed counterpart or certified copy of each of the
Assigned Agreements. Owner will likewise deliver to Administrative Agent an
executed counterpart of each future lease, construction agreement, operation
agreement and other agreement, including without limitation those relating to
any equipment or Equipment Lease or any part thereof, and amendments and
supplements to the foregoing, included in the Collateral, as they are entered
into by Owner promptly upon the execution thereof. Notwithstanding anything to
the contrary contained herein, no such future lease, construction agreement,
operation agreement or other material agreement may be entered into by Owner
except as permitted under the Credit Documents.
2.3 Notwithstanding anything to the contrary contained herein, Owner
shall remain liable under each of the Assigned Agreements to perform all of the
obligations undertaken by it thereunder, all in accordance with and pursuant to
the terms and provisions thereof, and Administrative Agent shall have no
obligation or liability under any of such Assigned Agreements by reason of or
arising out of this Agreement, nor shall Administrative Agent be required or
obligated in any manner to perform or fulfill any obligations of Owner
thereunder or to make any payment or inquiry as to the nature or sufficiency of
any payment
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received by it, or present or file any claim or take any action to collect or
enforce the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time.
2.4 If any default by Owner under any of the Assigned Agreements shall
occur and be continuing, then Administrative Agent shall, at its option and
after the expiration of the applicable cure periods under Section 8.1.7 of the
Credit Agreement, be permitted (but shall not be obligated) to remedy any such
default by giving written notice of such intent to Owner and to the parties to
the Assigned Agreement or Assigned Agreements for which Administrative Agent
intends to remedy the default. After giving such notice of its intent to cure
such default and upon the commencement thereof, Administrative Agent will
proceed diligently to cure such default. Any cure by Administrative Agent of
Owner's default under any of the Assigned Agreements shall not be construed as
an assumption by Administrative Agent or any of the Banks of any obligations,
covenants or agreements of Owner under such Assigned Agreement, and neither
Administrative Agent nor any of the Banks shall be liable to Owner or any other
Person as a result of any actions undertaken by Administrative Agent in curing
or attempting to cure any such default, except as set forth in Section 12.13 of
the Credit Agreement. This Agreement shall not be deemed to release or to affect
in any way the obligations of Owner under the Assigned Agreements.
3. OBLIGATIONS SECURED. Without limiting the generality of the foregoing,
this Agreement and all of the Collateral secure the payment and performance when
due of the Obligations (as defined in the Credit Agreement) of each of the
Portfolio Entities (including Owner) under the Credit Documents, including
Borrower's Obligations under the Credit Agreement and the other Credit Documents
to which Borrower is a party to the Administrative Agent and the Banks (the
"Obligations"); provided, however, the Obligations as defined in this Section 3
shall not include any Obligations (as defined in the Credit Agreement) of any
Portfolio Entity under the Credit Documents relating to or arising from Projects
(as defined in the Credit Agreement) that have achieved Operation prior to the
effective date of this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF OWNER. Owner represents and warrants
as of the date hereof as follows:
4.1 Owner has not assigned any of its rights under the Assigned
Agreements except as provided in the Credit Documents.
4.2 Owner has not executed and is not aware of any effective financing
statement, security agreement or other instrument similar in effect covering all
or any part of the Collateral, except such as may have been filed pursuant to
this Agreement and the other Credit Documents or pursuant to the documents
evidencing Permitted Liens.
4.3 Except as permitted by the Credit Agreement, Owner is lawfully
possessed of ownership of the Collateral and has full right, title and interest
in and to all rights purported to be granted to it under the Assigned
Agreements, not subject to any mortgages, liens, charges, or encumbrances except
Permitted Liens. Owner has full power and lawful authority to grant and assign
the Collateral hereunder.
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5. COVENANTS OF OWNER. Owner covenants as follows:
5.1 Any action or proceeding to enforce this Agreement or any Assigned
Agreement may be taken by Administrative Agent either in Owner's name or in
Administrative Agent's name, as Administrative Agent may deem necessary.
5.2 Owner will, so long as any Obligations shall be outstanding,
warrant and defend its title to the Collateral and the interest of
Administrative Agent in the Collateral against any claim or demand of any
persons (other than Permitted Liens) which could reasonably be expected to
materially adversely affect Owner's title to, or Administrative Agent's right or
interest in, such Collateral.
5.3 Owner will at all times keep accurate and complete records of the
Collateral. Owner shall permit representatives of Administrative Agent upon
reasonable prior notice, and in accordance with Section 5.6 of the Credit
Agreement, at any time during normal business hours of Owner to inspect and make
abstracts from Owner's books and records pertaining to the Collateral. Upon the
occurrence and during the continuation of any Event of Default, at
Administrative Agent's request, Owner shall promptly deliver copies of any and
all such records to Administrative Agent.
5.4 Unless waived in writing by Administrative Agent, Owner shall give
Administrative Agent at least 45 days' notice before it changes the location of
its principal place of business, chief executive office or state of organization
and shall at the expense of Owner execute and deliver such instruments and
documents as may reasonably be required by Administrative Agent to maintain a
prior perfected security interest in the Collateral.
6. EVENTS OF DEFAULT. The occurrence of an Event of Default under the
Credit Agreement, whatever the reason therefor and whether it shall be voluntary
or involuntary or be effected by operation of law, or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body, shall constitute an event of default
hereunder (an "Event of Default").
7. REMEDIES UPON EVENT OF DEFAULT.
7.1 If any Event of Default has occurred and is continuing,
Administrative Agent may (a) proceed to protect and enforce the rights vested in
it by this Agreement, including but not limited to, the right to cause all
revenues pledged hereby as security and all other moneys pledged hereunder to be
paid directly to it, and to enforce its rights hereunder to such payments and
all other rights hereunder by such appropriate judicial proceedings as it shall
deem most effective to protect and enforce any of such rights, either at law or
in equity or otherwise, whether for specific enforcement of any covenant or
agreement contained in any of the Assigned Agreements, or in aid of the exercise
of any power therein or herein granted, or for any foreclosure hereunder and
sale under a judgment or decree in any judicial proceeding, or to enforce any
other legal or equitable right vested in it by this Agreement or by law; (b)
cause any action at law or suit in equity or other proceeding to be instituted
and prosecuted to collect or enforce any Obligations or rights hereunder or
included in the Collateral, or to foreclose or
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enforce any other agreement or other instrument by or under or pursuant to which
such Obligations are issued or secured, subject in each case to the provisions
and requirements thereof; (c) sell or otherwise dispose of any or all of the
Collateral or cause the Collateral to be sold or otherwise disposed of in one or
more sales or transactions, at such prices and in such manner as Administrative
Agent may deem commercially reasonable, and for cash or on credit or for future
delivery, without assumption of any credit risk at any broker's board or at
public or private sale, with or without a warranty of title, without demand of
performance or notice of intention to sell or of time or place of sale (except
such notice as is required by applicable statute and cannot be waived), it being
agreed that Administrative Agent may be a purchaser on behalf of the Banks or on
its own behalf at any such sale and that Administrative Agent, any Bank, or any
other Person who may be a bona fide purchaser for value and without notice of
any claims of any or all of the Collateral so sold shall thereafter hold the
same absolutely free from any claim or right of whatsoever kind, including any
equity of redemption, of Owner, any such demand, notice or right and equity
being hereby expressly waived and released to the extent permitted by law; (d)
incur reasonable expenses, including reasonable attorneys' fees, reasonable
consultants' fees, and other costs appropriate to the exercise of any right or
power under this Agreement; (e) perform any obligation of Owner hereunder or
under any other Credit Document, and make payments, purchase, contest or
compromise any encumbrance, charge or lien, and pay taxes and expenses without,
however, any obligation to do so; (f) in connection with any acceleration and
foreclosure, take possession of the Collateral and render it usable and repair
and renovate the same without, however, any obligation to do so, and enter upon
any Site or any other location where the same may be located for that purpose,
control, manage, operate, rent and lease the Collateral, either separately or in
conjunction with a Project, collect all rents and income from the Collateral and
apply the same to reimburse the Banks for any cost or expenses incurred
hereunder or under any of the Credit Documents and to the payment or performance
of Owner's obligations hereunder or under any of the Credit Documents, and apply
the balance to the Loans of Borrower as provided for in the Credit Agreement and
any remaining excess balance to whomsoever is legally entitled thereto; (g)
secure the appointment of a receiver of the Collateral or any part thereof; or
(h) exercise any other or additional rights or remedies granted to a secured
party under the UCC. If pursuant to applicable law prior notice of any such
action is required to be given to Owner, Owner hereby acknowledges that the
minimum time required by such applicable law, or if no minimum time is
specified, 10 Banking Days, shall be deemed a reasonable notice period.
7.2 All reasonable costs and expenses (including reasonable attorneys'
fees and expenses) incurred by Administrative Agent in connection with any such
suit or proceeding or in connection with the performance by Administrative Agent
of any of Owner's agreements contained in any of the Assigned Agreements or any
exercise of its rights or remedies hereunder, pursuant to the terms of this
Agreement, together with interest thereon (to the extent permitted by law)
computed at a rate per annum equal to the Default Rate from the date on which
such costs or expenses are incurred to the date of payment thereof, shall
constitute additional indebtedness secured by this Agreement and shall be paid
by Owner to Administrative Agent on behalf of the Banks on demand.
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8. REMEDIES CUMULATIVE; DELAY NOT WAIVER.
8.1 No right, power or remedy herein conferred upon or reserved to
Administrative Agent is intended to be exclusive of any other right, power or
remedy and every such right, power and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right, power and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder or otherwise shall not
prevent the concurrent assertion or employment of any other appropriate right or
remedy. Resort to any or all security now or hereafter held by Administrative
Agent may be taken concurrently or successively and in one or several
consolidated or independent judicial actions or lawfully taken nonjudicial
proceedings, or both.
8.2 No delay or omission of Administrative Agent to exercise any right
or power accruing upon the occurrence and during the continuance of any Event of
Default as aforesaid shall impair any such right or power or shall be construed
to be a waiver of any such Event of Default or an acquiescence therein; and
every power and remedy given by this Agreement may be exercised from time to
time, and as often as shall be deemed expedient, by Administrative Agent.
9. APPLICATION OF PROCEEDS. Upon the occurrence and during the continuation
of an Event of Default, the proceeds of any sale of or other realization upon,
all or any part of the Collateral shall be applied: first, to all fees, costs
and expenses incurred by and due and owing to Administrative Agent and the Banks
under the Credit Agreement, the other Credit Documents or the Collateral
Documents; second, to accrued and unpaid interest on the Obligations (including
any interest which, but for the provisions of the Bankruptcy Code, would have
accrued on such amounts); third, to the principal amounts of the Obligations
outstanding; fourth, to any other Obligations of Owner owing to Administrative
Agent or the Banks; and fifth, to, or as directed by, Owner.
10. ATTORNEY-IN-FACT. Owner hereby constitutes and appoints Administrative
Agent, acting for and on behalf of itself and the Banks and each successor or
assign of Administrative Agent and the Banks, the true and lawful
attorney-in-fact of Owner, with full power and authority in the place and stead
of Owner and in the name of Owner, Administrative Agent or otherwise to enforce
all rights, interests and remedies of Owner with respect to the Collateral,
including, without limitation, the right:
10.1 to ask, require, demand, receive and give acquittance for any and
all moneys and claims for moneys due and to become due under or arising out of
the Assigned Agreements or any of the other Collateral, including without
limitation, any insurance policies;
10.2 to elect remedies thereunder and to endorse any checks or other
instruments or orders in connection therewith;
10.3 to file any claims or take any action or institute any proceedings
in connection therewith which Administrative Agent may reasonably deem to be
necessary or advisable;
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10.4 to pay, settle or compromise all bills and claims which may be or
become liens or security interests against any or all of the Collateral, or any
part thereof, unless a bond or other security satisfactory to Administrative
Agent has been provided; and
10.5 upon foreclosure and to the extent provided in the Consents, to do
any and every act which Owner may do on its behalf with respect to the
Collateral or any part thereof and to exercise any or all of Owner's rights and
remedies under any or all of the Assigned Agreements;
provided, however, that Administrative Agent shall not exercise any such rights
except upon the occurrence and continuation of an Event of Default. This power
of attorney is a power coupled with an interest and shall be irrevocable.
11. ADMINISTRATIVE AGENT MAY PERFORM. Upon the occurrence and during the
continuance of an Event of Default, if Owner fails to perform any agreement
contained herein, Administrative Agent may itself perform, or cause performance
of, such agreement, and the reasonable expenses of Administrative Agent incurred
in connection therewith shall be part of the Obligations.
12. PERFECTION; FURTHER ASSURANCES.
12.1 Owner agrees that from time to time, at the expense of Owner,
Owner shall promptly execute and deliver all instruments and documents, and take
all action, that may be reasonably necessary, or that Administrative Agent may
reasonably request, in order to perfect and protect the assignment and security
interest granted or intended to be granted hereby or to enable Administrative
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Collateral. Without limiting the generality of the foregoing, Owner shall
(a) with respect to the Equipment Finance Company Portfolio Entity Notes and any
other Collateral evidenced by a promissory note or other instrument in excess of
$5,000, deliver and pledge to Administrative Agent for the benefit of the Banks
such note duly endorsed without recourse, and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Administrative Agent; and (b) execute and deliver to Administrative Agent such
financing or continuation statements, or amendments thereto, and such other
instruments, endorsements or notices, as may be reasonably necessary or
desirable or as Administrative Agent may reasonably request, in order to perfect
and preserve the assignments and security interests granted or purported to be
granted hereby.
12.2 Owner hereby authorizes Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of Owner where permitted by
law.
12.3 Owner shall pay all filing, registration and recording fees and
all refiling, re-registration and re-recording fees, and all reasonable expenses
incident to the execution and acknowledgment of this Agreement, any assurance,
and all federal, state, county and municipal stamp taxes and other taxes,
duties, imports, assessments and charges arising out of or in
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458
connection with the execution and delivery of this Agreement, any agreement
supplemental hereto, any financing statements, and any instruments of further
assurance.
12.4 Owner shall, promptly upon request, provide to Administrative
Agent all information and evidence it may reasonably request concerning the
Collateral to enable Administrative Agent to enforce the provisions of this
Agreement.
13. PLACE OF BUSINESS; LOCATION OF RECORDS. Unless Administrative Agent is
otherwise notified under Section 5.4, the place of business and chief executive
office of Owner is, and all records of Owner concerning the Collateral are and
will be, located at the address set forth in Schedule 4.24 to the Credit
Agreement and Owner is, and will be, a limited liability company organized under
the laws of the state of Delaware.
14. CONTINUING ASSIGNMENT AND SECURITY INTEREST. This Agreement shall
create a continuing assignment of, and security interest in, the Collateral and
shall (a) remain in full force and effect until payment in full of the
Obligations, (b) be binding upon Owner, its successors and assigns; provided,
however, that the obligations of Owner, its successors and assigns hereunder may
not be assigned without the prior written consent of Administrative Agent; and
(c) inure, together with the rights and remedies of Administrative Agent, to the
benefit of Administrative Agent, the Banks and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing but
subject to the terms of the Credit Agreement, Administrative Agent or any of the
Banks may assign or otherwise transfer all or any part of or interest in the
Notes and the other Credit Documents or other evidence of indebtedness held by
them to any other Person to the extent permitted by and in accordance with the
Credit Agreement, and such other Person shall thereupon become vested with all
or an appropriate part of the benefits in respect thereof granted to the Banks
herein or otherwise. The release of the security interest in any or all of the
Collateral, the taking or acceptance of additional security, or the resort by
Administrative Agent to any security it may have in any order it may deem
appropriate, shall not affect the liability of any person on the indebtedness
secured hereby. If this Agreement shall be terminated or revoked by operation of
law, Owner will indemnify and save Administrative Agent and the Banks harmless
from any loss which may be suffered or incurred by Administrative Agent and the
Banks in acting hereunder prior to the receipt by Administrative Agent, its
successors, transferees, or assigns of notice of such termination or revocation.
15. TERMINATION OF SECURITY INTEREST. Upon the indefeasible payment in full
of the Obligations, the security interest granted hereby shall terminate and all
rights to the Collateral shall revert to Owner. Upon any such termination,
Administrative Agent will, at Owner's expense, execute and, subject to Section
21 hereof, deliver to Owner such documents (including, without limitation, UCC-3
termination statements) as Owner shall reasonably request to evidence such
termination.
16. ATTORNEYS' FEES. In the event any legal action or proceeding
(including, without limitation, any of the remedies provided for herein or at
law) is commenced to enforce or interpret this Agreement or any provision
thereof, unless Owner is the prevailing party, Owner shall indemnify each of
Administrative Agent and the Banks for their reasonable attorneys' fees and
other costs and expenses incurred therein, and if a judgment or award is entered
in any such
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action or proceeding, such reasonable attorneys' fees and other costs and
expenses may be made a part of such judgment or award.
17. LIABILITY. Recourse against the Owner, the other Portfolio Entities,
the Member and their respective Affiliates, members, partners, stockholders,
officers, directors and employees under this Agreement shall be limited to the
extent provided in Article 9 of the Credit Agreement.
18. AMENDMENTS; WAIVERS; CONSENTS. No amendment, modification, termination
or waiver of any provision of this Agreement, or consent to any departure by
Owner therefrom, shall in any event be effective without the written concurrence
of Administrative Agent and the Owner.
19. NOTICES. All notices required or permitted under the terms and
provisions hereof shall be in writing and any such notice shall be effective if
given in accordance with the provisions of Section 12.1 of the Credit Agreement.
Notices to Owner may be given at the address of Borrower set forth in such
Section 12.1.
20. GOVERNING LAW. This Agreement, including all matters of construction,
validity, performance and the creation, validity, enforcement or priority of the
lien of, and security interests created by, this Agreement in or upon the
Collateral shall be governed by the laws of the state of New York, without
reference to conflicts of law (other than Section 5-1401 of the New York General
Obligations Law), except as required by mandatory provisions of law and except
to the extent that the validity or perfection of the lien and security interest
hereunder, or remedies hereunder, in respect of any particular Collateral are
governed by the laws of a jurisdiction other than the state of New York.
21. REINSTATEMENT. This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any amount received by
Administrative Agent in respect of the Obligations is rescinded or must
otherwise be restored or returned by Administrative Agent upon the insolvency,
bankruptcy, reorganization, liquidation of Owner or any general partner of Owner
or upon the dissolution of, or appointment of any intervenor or conservator of,
or trustee or similar official for, Owner or any general partner of Owner or any
substantial part of Owner's or any of its general partners' assets, or
otherwise, all as though such payments had not been made.
22. SEVERABILITY. The provisions of this Agreement are severable, and if
any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Agreement in any jurisdiction.
23. SURVIVAL OF PROVISIONS. All agreements, representations and warranties
made herein shall survive the execution and delivery of this Agreement and the
Credit Agreement and the making of the Loans and extensions of credit
thereunder. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements, representations and warranties of
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Owner set forth herein shall terminate only upon payment of the Obligations, and
the termination of all Commitments and other obligations of the Banks under the
Credit Documents.
24. HEADINGS DESCRIPTIVE. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
25. ENTIRE AGREEMENT. This Agreement, together with any other agreement
executed in connection herewith, is intended by the parties as a final
expression of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
26. TIME. Time is of the essence of this Agreement.
27. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
together constitute one and the same agreement.
28. WAIVER OF JURY TRIAL. OWNER AND ADMINISTRATIVE AGENT HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP AMONG OWNER AND
ADMINISTRATIVE AGENT THAT IS BEING ESTABLISHED. OWNER AND ADMINISTRATIVE AGENT
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. OWNER AND ADMINISTRATIVE AGENT FURTHER WARRANT AND REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.
29. ADDITIONAL WAIVERS. Owner hereby waives and relinquishes all rights and
remedies accorded by applicable law to sureties or guarantors and agrees not to
assert or take advantage of any such rights or remedies, including without
limitation (a) any right to require Administrative Agent or the Banks to proceed
against any Portfolio Entity or any other Person or to proceed against or
exhaust any security held by Administrative Agent or the Banks at any time or to
pursue any other remedy in Administrative Agent's or the Banks' power before
proceeding against Owner, (b) any defense that may arise by reason of the
incapacity, lack of power or authority, death, dissolution, merger, termination
or disability of any Portfolio Entity or any other Person or the failure of
Administrative Agent or the Banks to file or enforce a claim against the estate
(in administration, bankruptcy or any other proceeding) of any Portfolio Entity
or any other Person, (c) demand, presentment, protest and notice of any kind,
including without limitation notice of the existence, creation or incurring of
any new or additional indebtedness or obligation or of any action or non-action
on the part of any Portfolio Entity, Administrative Agent, the Banks, any
endorser or creditor of the foregoing or on the part of any other Person
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under this or any other instrument in connection with any obligation or evidence
of indebtedness held by Administrative Agent or the Banks as collateral or in
connection with any Obligations, (d) any defense based upon an election of
remedies by Administrative Agent or the Banks, including without limitation an
election to proceed by non-judicial rather than judicial foreclosure, which
destroys or otherwise impairs the subrogation rights of Owner, the right of
Owner to proceed against a Portfolio Entity or another Person for reimbursement,
or both, (e) any defense based on any offset against any amounts which may be
owed by any Person to Owner for any reason whatsoever, (f) any defense based on
any act, failure to act, delay or omission whatsoever on the part of a Portfolio
Entity of the failure by a Portfolio Entity to do any act or thing or to observe
or perform any covenant, condition or agreement to be observed or performed by
it under the Credit Documents, (g) any defense based upon any statute or rule of
law which provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal
provided, that, upon payment in full of the Obligations, this Agreement shall no
longer be of any force or effect, (h) any defense, setoff or counterclaim which
may at any time be available to or asserted by a Portfolio Entity against
Administrative Agent, the Banks or any other Person under the Credit Documents,
(i) any duty on the part of Administrative Agent or the Banks to disclose to
Owner any facts Administrative Agent or the Banks may now or hereafter know
about any Portfolio Entity, regardless of whether Administrative Agent or the
Banks have reason to believe that any such facts materially increase the risk
beyond that which Owner intends to assume, or have reason to believe that such
facts are unknown to Owner, or have a reasonable opportunity to communicate such
facts to Owner, since Owner acknowledges that Owner is fully responsible for
being and keeping informed of the financial condition of the Portfolio Entities
and of all circumstances bearing on the risk of non-payment of any obligations
and liabilities hereby guaranteed, (j) the fact that any Portfolio Entity may at
any time in the future dispose of all or part of its direct or indirect interest
in any other Portfolio Entity, (k) any defense based on any change in the time,
manner or place of any payment under, or in any other term of, the Credit
Documents or any other amendment, renewal, extension, acceleration, compromise
or waiver of or any consent or departure from the terms of the Credit Documents,
(l) any defense arising because of Administrative Agent's or the Banks'
election, in any proceeding instituted under the Federal Bankruptcy Code, of the
application of Section 1111(b)(2) of the Federal Bankruptcy Code, and (m) any
defense based upon any borrowing or grant of a security interest under Section
364 of the Federal Bankruptcy Code.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the undersigned has caused this
CCFC II Equipment Finance Company Security Agreement to be duly executed and
delivered as of the day and year first above written.
CCFC II EQUIPMENT FINANCE COMPANY, LLC,
a Delaware limited liability company
By:
-----------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
as Administrative Agent
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
463
EXHIBIT D-4D
to the Credit Agreement
FORM
OF
CCFC II EQUIPMENT FINANCE COMPANY SECURITY AGREEMENT
Dated as of __________________, __________
between
CCFC II EQUIPMENT FINANCE COMPANY, LLC
a Delaware limited liability company
and
CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch,
as Administrative Agent
464
TABLE OF CONTENTS
PAGE
----
1. Definitions..............................................................2
2. Assignment, Pledge and Grant of Security Interest........................2
3. Obligations Secured......................................................4
4. Representations and Warranties of Owner..................................4
5. Covenants of Owner.......................................................5
Owner covenants as follows:....................................................5
6. Events of Default........................................................5
7. Remedies Upon Event of Default...........................................5
8. Remedies Cumulative; Delay Not Waiver....................................7
9. Application of Proceeds..................................................7
10. Attorney-In-Fact.........................................................7
11. Administrative Agent May Perform.........................................8
12. Perfection; Further Assurances...........................................8
13. Place of Business; Location of Records...................................9
14. Continuing Assignment and Security Interest..............................9
15. Termination of Security Interest.........................................9
16. Attorneys' Fees..........................................................9
17. Liability...............................................................10
18. Amendments; Waivers; Consents...........................................10
19. Notices.................................................................10
20. Governing Law...........................................................10
21. Reinstatement...........................................................10
22. Severability............................................................10
23. Survival of Provisions..................................................10
24. Headings Descriptive....................................................11
25. Entire Agreement........................................................11
26. Time....................................................................11
27. Counterparts............................................................11
28. Waiver of Jury Trial....................................................11
29. Additional Waivers......................................................11
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EXHIBIT D4-E
EQUIPMENT FINANCE COMPANY SECURITY AGREEMENT
This EQUIPMENT FINANCE COMPANY SECURITY AGREEMENT (this
"Agreement"), dated as of ________, 200__, is entered into by and between
___________________, a Delaware _______________ ("Owner"), and CREDIT SUISSE
FIRST BOSTON, acting through its New York Branch, as Administrative Agent
("Administrative Agent") for the Banks (as defined below).
PREFACE
A. Owner intends to purchase certain equipment (the "Equipment") to be
leased to a Project Owner pursuant to one or more Equipment Leases and
incorporated into a Project.
B. Calpine Construction Finance Company II, LLC, a Delaware limited
liability company ("Borrower"), the financial institutions listed on Exhibit H
to the Credit Agreement (the "Banks"), Credit Suisse First Boston, acting
through its New York Branch, as Lead Arranger and Administrative Agent
("Administrative Agent"), The Bank of Nova Scotia, as Lead Arranger,
Co-Syndication Agent and Bookrunner, Banc of America Securities LLC, as Arranger
and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and Co-Syndication
Agent, Bayerische Landesbank Girozentrale, as Arranger, Co-Documentation Agent
and LC Bank, CIBC World Markets Corp., as Arranger and Co-Documentation Agent,
Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as Arranger and
Co-Documentation Agent and TD Securities (USA) Inc., as Arranger and
Co-Documentation Agent, have entered into that certain Credit Agreement, dated
as of October 16, 2000 (as modified, supplemented or amended from time to time,
the "Credit Agreement"), pursuant to which the Banks agreed to make certain
advances of credit to Borrower in the amounts specified and on the terms and
subject to the conditions set forth therein. For purposes of this Agreement, the
term "Banks" shall include the Administrative Agent, the Lead Arrangers, the
Co-Syndication Agents, the Bookrunner, the Co-Documentation Agents and the Banks
(as such terms are defined in the Credit Agreement).
C. Owner intends to finance certain Costs associated with Owner's
purchase of the Equipment with funds borrowed by Borrower pursuant to the Credit
Agreement.
D. As a condition precedent to the Banks' making the advances of credit
contemplated by the Credit Agreement, the Banks require that Owner shall have
executed this Agreement.
AGREEMENT
In consideration of the promises contained herein, and in order to induce
the Banks to enter into the Credit Agreement and to make the advances of credit
pursuant to the terms thereof, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Owner hereby agrees
with Administrative Agent for the benefit of Administrative Agent and the Banks
as follows:
466
1. DEFINITIONS.
1.1 "UCC" shall mean the Uniform Commercial Code as the same
may, from time to time, be in effect in the State of New York; provided,
however, in the event that, by reason of mandatory provisions of law, any or all
of the attachment, perfection or priority of the security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term "UCC" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.
1.2 All capitalized terms used, but not otherwise defined
herein, shall have the meanings provided in the Credit Agreement. All other
terms used herein (whether or not capitalized) shall have the meanings given
them in the UCC. The rules of interpretation contained in Exhibit A to the
Credit Agreement shall apply to this Agreement.
2. ASSIGNMENT, PLEDGE AND GRANT OF SECURITY INTEREST.
2.1 To secure the timely payment and performance of the
Obligations (as defined in Section 3 hereof) Owner does hereby assign, grant and
pledge to, and subject to a security interest in favor of, Administrative Agent,
on behalf of and for the benefit of Administrative Agent and the Banks, all the
estate, right, title and interest of Owner, whether now owned or hereafter
acquired, in, to and under:
2.1.1 The following agreements and documents, as amended
from time to time (individually, an "Assigned Agreement," and collectively, the
"Assigned Agreements") and all of Owner's rights thereunder:
(a) Owner's interest in any Equipment Lease or Project
Document;
(b) the insurance policies maintained or required to
be maintained by Owner or any other Person under the Credit Agreement or Project
Documents;
(c) to the extent assignable, all other agreements,
including vendor warranties, running to Owner or assigned to Owner, relating to
the purchase of the Equipment or any part thereof, or transport of material,
equipment and other parts of the Equipment or any part thereof; and
(d) all amendments, supplements, substitutions and
renewals to any of the aforesaid agreements;
2.1.2 all other personal property and fixtures of Owner,
including without limitation the Equipment and personal property and fixtures
relating to the Equipment, whether now owned or existing or hereafter acquired
or arising, or in which Owner may have an interest, and wheresoever located,
whether or not of a type which may be subject to a security interest under the
UCC, including without limitation all machinery, tools, engines, turbines
2
467
(including combustion turbines and steam turbine generators), boilers, fuel
storage tanks, control equipment, appliances, mechanical and electrical systems,
elevators, lighting, alarm systems, fire control systems, furnishings,
furniture, as-extracted collateral, equipment, service equipment, motor
vehicles, building or maintenance equipment, building or maintenance materials,
pipes and pipelines supplies, goods and property covered by any warehouse
receipts or bills of lading or other such documents, spare parts, maps, plans,
specifications, architectural, engineering, construction or shop drawings,
manuals or similar documents, copyrights, trademarks and trade names, and any
replacements, renewals or substitutions for any of the foregoing or additional
tangible or intangible personal property hereafter acquired by Owner;
2.1.3 all goods, money, instruments, investment securities,
investment property, accounts, contract rights, commercial tort claims, letters
of credit, letter of credit rights, payment intangibles, promissory notes,
software, supporting obligations, documents, deposit accounts, chattel paper
(including tangible and electronic chattel paper), general intangibles, and
inventory, including without limitation those relating to the Equipment; and
2.1.4 the proceeds of all of the foregoing (all of the
collateral described in clauses 2.1.1 through 2.1.4, being herein collectively
referred to as the "Collateral"), including without limitation, (a) all rights
of Owner to receive moneys due and to become due under or pursuant to the
Collateral; (b) all rights of Owner to receive the return of any premiums for,
or proceeds of, any insurance, indemnity, warranty or guaranty with respect to
the Collateral or to receive any condemnation proceeds; (c) all claims of Owner
for damages arising out of, or for breach of or default under, the Assigned
Agreements or any other Collateral; (d) all rights of Owner to terminate, amend,
supplement, modify or waive performance under the Assigned Agreements, to
perform thereunder and to compel performance and otherwise exercise all remedies
thereunder; and (e) to the extent not included in the foregoing, all proceeds
receivable or received when any and all of the foregoing Collateral is sold,
collected, exchanged or otherwise disposed of, whether voluntarily or
involuntarily.
2.2 In order to effectuate the foregoing, Owner has heretofore
delivered, or concurrently with the delivery hereof, is delivering to
Administrative Agent an executed counterpart or certified copy of each of the
Assigned Agreements. Owner will likewise deliver to Administrative Agent an
executed counterpart of each future lease, construction agreement, operation
agreement and other agreement, including without limitation those relating to
the purchase of the Equipment or any part thereof, and amendments and
supplements to the foregoing, included in the Collateral, as they are entered
into by Owner promptly upon the execution thereof. Notwithstanding anything to
the contrary contained herein, no such future lease, construction agreement,
operation agreement or other material agreement may be entered into by Owner
except as permitted under the Credit Documents.
2.3 Notwithstanding anything to the contrary contained herein,
Owner shall remain liable under each of the Assigned Agreements to perform all
of the obligations undertaken by it thereunder, all in accordance with and
pursuant to the terms and provisions thereof, and Administrative Agent shall
have no obligation or liability under any of such Assigned Agreements by reason
of or arising out of this Agreement, nor shall Administrative Agent be required
or obligated in any manner to perform or fulfill any obligations of Owner
3
468
thereunder or to make any payment or inquiry as to the nature or sufficiency of
any payment received by it, or present or file any claim or take any action to
collect or enforce the payment of any amounts which may have been assigned to it
or to which it may be entitled at any time.
2.4 If any default by Owner under any of the Assigned Agreements
shall occur and be continuing, then Administrative Agent shall, at its option
and after the expiration of the applicable cure periods under Section 8.1.7 of
the Credit Agreement, be permitted (but shall not be obligated) to remedy any
such default by giving written notice of such intent to Owner and to the parties
to the Assigned Agreement or Assigned Agreements for which Administrative Agent
intends to remedy the default. After giving such notice of its intent to cure
such default and upon the commencement thereof, Administrative Agent will
proceed diligently to cure such default. Any cure by Administrative Agent of
Owner's default under any of the Assigned Agreements shall not be construed as
an assumption by Administrative Agent or any of the Banks of any obligations,
covenants or agreements of Owner under such Assigned Agreement, and neither
Administrative Agent nor any of the Banks shall be liable to Owner or any other
Person as a result of any actions undertaken by Administrative Agent in curing
or attempting to cure any such default, except as set forth in Section 12.13 of
the Credit Agreement. This Agreement shall not be deemed to release or to affect
in any way the obligations of Owner under the Assigned Agreements.
3. OBLIGATIONS SECURED. Without limiting the generality of the
foregoing, this Agreement and all of the Collateral secure the payment and
performance when due of the Obligations (as defined in the Credit Agreement) of
each of the Portfolio Entities (including Owner) under the Credit Documents,
including Borrower's Obligations under the Credit Agreement and the other Credit
Documents to which Borrower is a party to the Administrative Agent and the Banks
(the "Obligations"); provided, however, the Obligations as defined in this
Section 3 shall not include any Obligations (as defined in the Credit Agreement)
of any Portfolio Entity under the Credit Documents relating to or arising from
Projects (as defined in the Credit Agreement) that have achieved Operation prior
to the effective date of this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF OWNER. Owner represents and
warrants as of the date hereof as follows:
4.1 Owner has not assigned any of its rights under the Assigned
Agreements except as provided in the Credit Documents.
4.2 Owner has not executed and is not aware of any effective
financing statement, security agreement or other instrument similar in effect
covering all or any part of the Collateral, except such as may have been filed
pursuant to this Agreement and the other Credit Documents or pursuant to the
documents evidencing Permitted Liens.
4.3 Except as permitted by the Credit Agreement, Owner is lawfully
possessed of ownership of the Collateral and has full right, title and interest
in and to all rights purported to be granted to it under the Assigned
Agreements, not subject to any mortgages, liens, charges, or encumbrances except
Permitted Liens. Owner has full power and lawful authority to grant and assign
the Collateral hereunder.
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469
5. COVENANTS OF OWNER. Owner covenants as follows:
5.1 Any action or proceeding to enforce this Agreement or any
Assigned Agreement may be taken by Administrative Agent either in Owner's name
or in Administrative Agent's name, as Administrative Agent may deem necessary.
5.2 Owner will, so long as any Obligations shall be outstanding,
warrant and defend its title to the Collateral and the interest of
Administrative Agent in the Collateral against any claim or demand of any
persons (other than Permitted Liens) which could reasonably be expected to
materially adversely affect Owner's title to, or Administrative Agent's right or
interest in, such Collateral.
5.3 Owner will at all times keep accurate and complete records of
the Collateral. Owner shall permit representatives of Administrative Agent upon
reasonable prior notice, and in accordance with Section 5.6 of the Credit
Agreement, at any time during normal business hours of Owner to inspect and make
abstracts from Owner's books and records pertaining to the Collateral. Upon the
occurrence and during the continuation of any Event of Default, at
Administrative Agent's request, Owner shall promptly deliver copies of any and
all such records to Administrative Agent.
5.4 Unless waived in writing by Administrative Agent, Owner shall
give Administrative Agent at least 45 days' notice before it changes the
location of its principal place of business, chief executive office or state of
organization and shall at the expense of Owner execute and deliver such
instruments and documents as may reasonably be required by Administrative Agent
to maintain a prior perfected security interest in the Collateral.
6. EVENTS OF DEFAULT. The occurrence of an Event of Default under the
Credit Agreement, whatever the reason therefor and whether it shall be voluntary
or involuntary or be effected by operation of law, or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body, shall constitute an event of default
hereunder (an "Event of Default").
7. REMEDIES UPON EVENT OF DEFAULT.
7.1 If any Event of Default has occurred and is continuing,
Administrative Agent may (a) proceed to protect and enforce the rights vested in
it by this Agreement, including but not limited to, the right to cause all
revenues pledged hereby as security and all other moneys pledged hereunder to be
paid directly to it, and to enforce its rights hereunder to such payments and
all other rights hereunder by such appropriate judicial proceedings as it shall
deem most effective to protect and enforce any of such rights, either at law or
in equity or otherwise, whether for specific enforcement of any covenant or
agreement contained in any of the Assigned Agreements, or in aid of the exercise
of any power therein or herein granted, or for any foreclosure hereunder and
sale under a judgment or decree in any judicial proceeding, or to enforce any
other legal or equitable right vested in it by this Agreement or by law; (b)
cause any action at law or suit in equity or other proceeding to be instituted
and prosecuted to collect or enforce any Obligations or rights hereunder or
included in the Collateral, or to foreclose or
5
470
enforce any other agreement or other instrument by or under or pursuant to which
such Obligations are issued or secured, subject in each case to the provisions
and requirements thereof; (c) sell or otherwise dispose of any or all of the
Collateral or cause the Collateral to be sold or otherwise disposed of in one or
more sales or transactions, at such prices and in such manner as Administrative
Agent may deem commercially reasonable, and for cash or on credit or for future
delivery, without assumption of any credit risk at any broker's board or at
public or private sale, with or without a warranty of title, without demand of
performance or notice of intention to sell or of time or place of sale (except
such notice as is required by applicable statute and cannot be waived), it being
agreed that Administrative Agent may be a purchaser on behalf of the Banks or on
its own behalf at any such sale and that Administrative Agent, any Bank, or any
other Person who may be a bona fide purchaser for value and without notice of
any claims of any or all of the Collateral so sold shall thereafter hold the
same absolutely free from any claim or right of whatsoever kind, including any
equity of redemption, of Owner, any such demand, notice or right and equity
being hereby expressly waived and released to the extent permitted by law; (d)
incur reasonable expenses, including reasonable attorneys' fees, reasonable
consultants' fees, and other costs appropriate to the exercise of any right or
power under this Agreement; (e) perform any obligation of Owner hereunder or
under any other Credit Document, and make payments, purchase, contest or
compromise any encumbrance, charge or lien, and pay taxes and expenses without,
however, any obligation to do so; (f) in connection with any acceleration and
foreclosure, take possession of the Collateral and render it usable and repair
and renovate the same without, however, any obligation to do so, and enter upon
any Site or any other location where the same may be located for that purpose,
control, manage, operate, rent and lease the Collateral, collect all rents and
income from the Collateral and apply the same to reimburse the Banks for any
cost or expenses incurred hereunder or under any of the Credit Documents and to
the payment or performance of Owner's obligations hereunder or under any of the
Credit Documents, and apply the balance to the Loans of Borrower as provided for
in the Credit Agreement and any remaining excess balance to whomsoever is
legally entitled thereto; (g) secure the appointment of a receiver of the
Collateral or any part thereof; or (h) exercise any other or additional rights
or remedies granted to a secured party under the UCC. If pursuant to applicable
law prior notice of any such action is required to be given to Owner, Owner
hereby acknowledges that the minimum time required by such applicable law, or if
no minimum time is specified, 10 Banking Days, shall be deemed a reasonable
notice period.
7.2 All reasonable costs and expenses (including reasonable
attorneys' fees and expenses) incurred by Administrative Agent in connection
with any such suit or proceeding or in connection with the performance by
Administrative Agent of any of Owner's agreements contained in any of the
Assigned Agreements or any exercise of its rights or remedies hereunder,
pursuant to the terms of this Agreement, together with interest thereon (to the
extent permitted by law) computed at a rate per annum equal to the Default Rate
from the date on which such costs or expenses are incurred to the date of
payment thereof, shall constitute additional indebtedness secured by this
Agreement and shall be paid by Owner to Administrative Agent on behalf of the
Banks on demand.
8. REMEDIES CUMULATIVE; DELAY NOT WAIVER.
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471
8.1 No right, power or remedy herein conferred upon or reserved to
Administrative Agent is intended to be exclusive of any other right, power or
remedy and every such right, power and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right, power and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder or otherwise shall not
prevent the concurrent assertion or employment of any other appropriate right or
remedy. Resort to any or all security now or hereafter held by Administrative
Agent may be taken concurrently or successively and in one or several
consolidated or independent judicial actions or lawfully taken nonjudicial
proceedings, or both.
8.2 No delay or omission of Administrative Agent to exercise any
right or power accruing upon the occurrence and during the continuance of any
Event of Default as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or an acquiescence
therein; and every power and remedy given by this Agreement may be exercised
from time to time, and as often as shall be deemed expedient, by Administrative
Agent.
9. APPLICATION OF PROCEEDS. Upon the occurrence and during the
continuation of an Event of Default, the proceeds of any sale of or other
realization upon, all or any part of the Collateral shall be applied: first, to
all fees, costs and expenses incurred by and due and owing to Administrative
Agent and the Banks under the Credit Agreement, the other Credit Documents or
the Collateral Documents; second, to accrued and unpaid interest on the
Obligations (including any interest which, but for the provisions of the
Bankruptcy Code, would have accrued on such amounts); third, to the principal
amounts of the Obligations outstanding; fourth, to any other Obligations of
Owner owing to Administrative Agent or the Banks; and fifth, to, or as directed
by, Owner.
10. ATTORNEY-IN-FACT. Owner hereby constitutes and appoints
Administrative Agent, acting for and on behalf of itself and the Banks and each
successor or assign of Administrative Agent and the Banks, the true and lawful
attorney-in-fact of Owner, with full power and authority in the place and stead
of Owner and in the name of Owner, Administrative Agent or otherwise to enforce
all rights, interests and remedies of Owner with respect to the Collateral,
including, without limitation, the right:
10.1 to ask, require, demand, receive and give acquittance for any
and all moneys and claims for moneys due and to become due under or arising out
of the Assigned Agreements or any of the other Collateral, including without
limitation, any insurance policies;
10.2 to elect remedies thereunder and to endorse any checks or
other instruments or orders in connection therewith;
10.3 to file any claims or take any action or institute any
proceedings in connection therewith which Administrative Agent may reasonably
deem to be necessary or advisable;
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472
10.4 to pay, settle or compromise all bills and claims which may be
or become liens or security interests against any or all of the Collateral, or
any part thereof, unless a bond or other security satisfactory to Administrative
Agent has been provided; and
10.5 upon foreclosure and to the extent provided in the Consents,
to do any and every act which Owner may do on its behalf with respect to the
Collateral or any part thereof and to exercise any or all of Owner's rights and
remedies under any or all of the Assigned Agreements;
provided, however, that Administrative Agent shall not exercise any such rights
except upon the occurrence and continuation of an Event of Default. This power
of attorney is a power coupled with an interest and shall be irrevocable.
11. ADMINISTRATIVE AGENT MAY PERFORM. Upon the occurrence and during the
continuance of an Event of Default, if Owner fails to perform any agreement
contained herein, Administrative Agent may itself perform, or cause performance
of, such agreement, and the reasonable expenses of Administrative Agent incurred
in connection therewith shall be part of the Obligations.
12. PERFECTION; FURTHER ASSURANCES.
12.1 Owner agrees that from time to time, at the expense of Owner,
Owner shall promptly execute and deliver all instruments and documents, and take
all action, that may be reasonably necessary, or that Administrative Agent may
reasonably request, in order to perfect and protect the assignment and security
interest granted or intended to be granted hereby or to enable Administrative
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Collateral. Without limiting the generality of the foregoing, Owner shall
(a) if any Collateral shall be evidenced by a promissory note or other
instrument in excess of $5,000, deliver and pledge to Administrative Agent for
the benefit of the Banks such note duly endorsed without recourse, and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to Administrative Agent; and (b) execute and deliver
to Administrative Agent such financing or continuation statements, or amendments
thereto, and such other instruments, endorsements or notices, as may be
reasonably necessary or desirable or as Administrative Agent may reasonably
request, in order to perfect and preserve the assignments and security interests
granted or purported to be granted hereby.
12.2 Owner hereby authorizes Administrative Agent to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of Owner where permitted
by law.
12.3 Owner shall pay all filing, registration and recording fees
and all refiling, re-registration and re-recording fees, and all reasonable
expenses incident to the execution and acknowledgment of this Agreement, any
assurance, and all federal, state, county and municipal stamp taxes and other
taxes, duties, imports, assessments and charges arising out of or in connection
with the execution and delivery of this Agreement, any agreement supplemental
hereto, any financing statements, and any instruments of further assurance.
8
473
12.4 Owner shall, promptly upon request, provide to Administrative
Agent all information and evidence it may reasonably request concerning the
Collateral to enable Administrative Agent to enforce the provisions of this
Agreement.
13. PLACE OF BUSINESS; LOCATION OF RECORDS. Unless Administrative Agent
is otherwise notified under Section 5.4, the place of business and chief
executive office of Owner is, and all records of Owner concerning the Collateral
are and will be, located at the address set forth in Schedule 4.24 to the Credit
Agreement and Owner is, and will be, a _____________ organized under the laws of
the state of Delaware.
14. CONTINUING ASSIGNMENT AND SECURITY INTEREST. This Agreement shall
create a continuing assignment of, and security interest in, the Collateral and
shall (a) remain in full force and effect until payment in full of the
Obligations, (b) be binding upon Owner, its successors and assigns; provided,
however, that the obligations of Owner, its successors and assigns hereunder may
not be assigned without the prior written consent of Administrative Agent; and
(c) inure, together with the rights and remedies of Administrative Agent, to the
benefit of Administrative Agent, the Banks and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing but
subject to the terms of the Credit Agreement, Administrative Agent or any of the
Banks may assign or otherwise transfer all or any part of or interest in the
Notes and the other Credit Documents or other evidence of indebtedness held by
them to any other Person to the extent permitted by and in accordance with the
Credit Agreement, and such other Person shall thereupon become vested with all
or an appropriate part of the benefits in respect thereof granted to the Banks
herein or otherwise. The release of the security interest in any or all of the
Collateral, the taking or acceptance of additional security, or the resort by
Administrative Agent to any security it may have in any order it may deem
appropriate, shall not affect the liability of any person on the indebtedness
secured hereby. If this Agreement shall be terminated or revoked by operation of
law, Owner will indemnify and save Administrative Agent and the Banks harmless
from any loss which may be suffered or incurred by Administrative Agent and the
Banks in acting hereunder prior to the receipt by Administrative Agent, its
successors, transferees, or assigns of notice of such termination or revocation.
15. TERMINATION OF SECURITY INTEREST. Upon the indefeasible payment in
full of the Obligations, the security interest granted hereby shall terminate
and all rights to the Collateral shall revert to Owner. Upon any such
termination, Administrative Agent will, at Owner's expense, execute and, subject
to Section 21 hereof, deliver to Owner such documents (including, without
limitation, UCC-3 termination statements) as Owner shall reasonably request to
evidence such termination.
16. ATTORNEYS' FEES. In the event any legal action or proceeding
(including, without limitation, any of the remedies provided for herein or at
law) is commenced to enforce or interpret this Agreement or any provision
thereof, unless Owner is the prevailing party, Owner shall indemnify each of
Administrative Agent and the Banks for their reasonable attorneys' fees and
other costs and expenses incurred therein, and if a judgment or award is entered
in any such action or proceeding, such reasonable attorneys' fees and other
costs and expenses may be made a part of such judgment or award.
9
474
17. LIABILITY. Recourse against the Owner, the other Portfolio Entities,
the Member and their respective Affiliates, members, partners, stockholders,
officers, directors and employees under this Agreement shall be limited to the
extent provided in Article 9 of the Credit Agreement.
18. AMENDMENTS; WAIVERS; CONSENTS. No amendment, modification,
termination or waiver of any provision of this Agreement, or consent to any
departure by Owner therefrom, shall in any event be effective without the
written concurrence of Administrative Agent and the Owner.
19. NOTICES. All notices required or permitted under the terms and
provisions hereof shall be in writing and any such notice shall be effective if
given in accordance with the provisions of Section 12.1 of the Credit Agreement.
Notices to Owner may be given at the address of Borrower set forth in such
Section 12.1.
20. GOVERNING LAW. This Agreement, including all matters of
construction, validity, performance and the creation, validity, enforcement or
priority of the lien of, and security interests created by, this Agreement in or
upon the Collateral shall be governed by the laws of the state of New York,
without reference to conflicts of law (other than Section 5-1401 of the New York
General Obligations Law), except as required by mandatory provisions of law and
except to the extent that the validity or perfection of the lien and security
interest hereunder, or remedies hereunder, in respect of any particular
Collateral are governed by the laws of a jurisdiction other than the state of
New York.
21. REINSTATEMENT. This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any amount received by
Administrative Agent in respect of the Obligations is rescinded or must
otherwise be restored or returned by Administrative Agent upon the insolvency,
bankruptcy, reorganization, liquidation of Owner or any general partner of Owner
or upon the dissolution of, or appointment of any intervenor or conservator of,
or trustee or similar official for, Owner or any general partner of Owner or any
substantial part of Owner's or any of its general partners' assets, or
otherwise, all as though such payments had not been made.
22. SEVERABILITY. The provisions of this Agreement are severable, and if
any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Agreement in any jurisdiction.
23. SURVIVAL OF PROVISIONS. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Agreement and the Credit Agreement and the making of the Loans and extensions of
credit thereunder. Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements, representations and warranties of Owner set
forth herein shall terminate only upon payment of the Obligations, and the
termination of all Commitments and other obligations of the Banks under the
Credit Documents.
10
475
24. HEADINGS DESCRIPTIVE. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
25. ENTIRE AGREEMENT. This Agreement, together with any other agreement
executed in connection herewith, is intended by the parties as a final
expression of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
26. TIME. Time is of the essence of this Agreement.
27. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
together constitute one and the same agreement.
28. WAIVER OF JURY TRIAL. OWNER AND ADMINISTRATIVE AGENT HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP AMONG OWNER AND
ADMINISTRATIVE AGENT THAT IS BEING ESTABLISHED. OWNER AND ADMINISTRATIVE AGENT
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. OWNER AND ADMINISTRATIVE AGENT FURTHER WARRANT AND REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.
29. ADDITIONAL WAIVERS. Owner hereby waives and relinquishes all rights
and remedies accorded by applicable law to sureties or guarantors and agrees not
to assert or take advantage of any such rights or remedies, including without
limitation (a) any right to require Administrative Agent or the Banks to proceed
against any Portfolio Entity or any other Person or to proceed against or
exhaust any security held by Administrative Agent or the Banks at any time or to
pursue any other remedy in Administrative Agent's or the Banks' power before
proceeding against Owner, (b) any defense that may arise by reason of the
incapacity, lack of power or authority, death, dissolution, merger, termination
or disability of any Portfolio Entity or any other Person or the failure of
Administrative Agent or the Banks to file or enforce a claim against the estate
(in administration, bankruptcy or any other proceeding) of any Portfolio Entity
or any other Person, (c) demand, presentment, protest and notice of any kind,
including without limitation notice of the existence, creation or incurring of
any new or additional indebtedness or obligation or of any action or non-action
on the part of any Portfolio Entity, Administrative Agent, the Banks, any
endorser or creditor of the foregoing or on the part of any other Person under
this or any other instrument in connection with any obligation or evidence of
indebtedness held by Administrative Agent or the Banks as collateral or in
connection with any Obligations, (d) any defense based upon an election of
remedies by Administrative Agent or the Banks,
11
476
including without limitation an election to proceed by non-judicial rather than
judicial foreclosure, which destroys or otherwise impairs the subrogation rights
of Owner, the right of Owner to proceed against a Portfolio Entity or another
Person for reimbursement, or both, (e) any defense based on any offset against
any amounts which may be owed by any Person to Owner for any reason whatsoever,
(f) any defense based on any act, failure to act, delay or omission whatsoever
on the part of a Portfolio Entity of the failure by a Portfolio Entity to do any
act or thing or to observe or perform any covenant, condition or agreement to be
observed or performed by it under the Credit Documents, (g) any defense based
upon any statute or rule of law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more burdensome than that
of the principal provided, that, upon payment in full of the Obligations, this
Agreement shall no longer be of any force or effect, (h) any defense, setoff or
counterclaim which may at any time be available to or asserted by a Portfolio
Entity against Administrative Agent, the Banks or any other Person under the
Credit Documents, (i) any duty on the part of Administrative Agent or the Banks
to disclose to Owner any facts Administrative Agent or the Banks may now or
hereafter know about any Portfolio Entity, regardless of whether Administrative
Agent or the Banks have reason to believe that any such facts materially
increase the risk beyond that which Owner intends to assume, or have reason to
believe that such facts are unknown to Owner, or have a reasonable opportunity
to communicate such facts to Owner, since Owner acknowledges that Owner is fully
responsible for being and keeping informed of the financial condition of the
Portfolio Entities and of all circumstances bearing on the risk of non-payment
of any obligations and liabilities hereby guaranteed, (j) the fact that any
Portfolio Entity may at any time in the future dispose of all or part of its
direct or indirect interest in any other Portfolio Entity, (k) any defense based
on any change in the time, manner or place of any payment under, or in any other
term of, the Credit Documents or any other amendment, renewal, extension,
acceleration, compromise or waiver of or any consent or departure from the terms
of the Credit Documents, (l) any defense arising because of Administrative
Agent's or the Banks' election, in any proceeding instituted under the Federal
Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal
Bankruptcy Code, and (m) any defense based upon any borrowing or grant of a
security interest under Section 364 of the Federal Bankruptcy Code.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
12
477
IN WITNESS WHEREOF, each of the undersigned has caused this
Equipment Finance Company Security Agreement to be duly executed and delivered
as of the day and year first above written.
_________________________________
a Delaware ______________________
By: ___________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
as Administrative Agent
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
478
EXHIBIT D-4E
to the Credit Agreement
FORM
OF
EQUIPMENT FINANCE COMPANY SECURITY AGREEMENT
Dated as of ______, 200__
between
________________
a Delaware _______________
and
CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch,
as Administrative Agent
479
TABLE OF CONTENTS
PAGE
----
1. Definitions..............................................................2
2. Assignment, Pledge and Grant of Security Interest........................2
3. Obligations Secured......................................................4
4. Representations and Warranties of Owner..................................4
5. Covenants of Owner.......................................................5
6. Events of Default........................................................5
7. Remedies Upon Event of Default...........................................5
8. Remedies Cumulative; Delay Not Waiver....................................6
9. Application of Proceeds..................................................7
10. Attorney-In-Fact.........................................................7
11. Administrative Agent May Perform.........................................8
12. Perfection; Further Assurances...........................................8
13. Place of Business; Location of Records...................................9
14. Continuing Assignment and Security Interest..............................9
15. Termination of Security Interest.........................................9
16. Attorneys' Fees..........................................................9
17. Liability...............................................................10
18. Amendments; Waivers; Consents...........................................10
19. Notices.................................................................10
20. Governing Law...........................................................10
21. Reinstatement...........................................................10
22. Severability............................................................10
23. Survival of Provisions..................................................10
24. Headings Descriptive....................................................11
25. Entire Agreement........................................................11
26. Time....................................................................11
27. Counterparts............................................................11
28. Waiver of Jury Trial....................................................11
29. Additional Waivers......................................................11
i
480
EXHIBIT D-6
to Credit Agreement
SCHEDULE OF SECURITY FILINGS
KEY TO ABBREVIATIONS
The abbreviations and words listed below when used herein have the
meanings assigned to them below.
"ALSS" = The Office of the Alabama Secretary of
State
"Administrative Agent" = Credit Suisse First Boston, acting
through its New York Branch
"BIP1" = Calpine Baytown Energy Center GP, LLC, a
Delaware limited liability company, as
the general partner of BPO
"BIP2" = Calpine Baytown Energy Center LP, LLC, a
Delaware limited liability company, as
the limited partner of BPO
"BMCO" = The Office of the Clerk of Boston,
Massachusetts
"BPO" = Baytown Energy Center, LP, a Delaware
limited partnership, as Baytown Project
Owner
"BRPO" = Broad River Investors LLC, a Delaware
limited liability company, as Broad River
Project Owner
"CAPO" = ▇▇▇▇▇▇▇▇ Energy LLC, a Delaware limited
liability company, as ▇▇▇▇▇▇▇▇ Project
Owner
"CASS" = The Office of the California Secretary of
State
"CCFC II" = Calpine Construction Finance Company II,
LLC, a Delaware limited liability company
"CCIP" = Clerk of the Court of the Iberville
Parish, Louisiana
"CCOC" = County Clerk of Oklahoma County, Oklahoma
"CCRO" = The Contra Costa County, California,
Recorder's Office
481
"CHIP1" = Calpine Channel Energy Center GP, LLC, a
Delaware limited liability company, as
the general partner of CHPO
"CHIP2" = Calpine Channel Energy Center LP, LLC, a
Delaware limited liability company, as
the limited partner of CHPO
"CHPO" = Channel Energy Center, LP, a Delaware
limited partnership, as Channel Project
Owner
"COIP1" = Nueces Bay Energy LLC, a Delaware limited
liability company, as the general partner
of COPO
"COIP2" = SkyGen SouthCoast Investors LLC, a
Delaware limited liability company, as
the limited partner of COPO
"COPO" = Corpus Christi Cogeneration LP, a
Delaware limited partnership, as Corpus
Project Owner
"COMPANY" = CCFC II Project Equipment Finance Company
One, LLC, a Delaware limited liability
company
"DESS" = The Office of the Delaware Secretary of
State
"DEVELOPMENT" = CCFC II Development Company LLC, a
Delaware limited liability company
"DPO" = Decatur Energy Center, LLC, a Delaware
limited liability company, as Decatur
Project Owner
"EQUIPMENT" = CCFC II Equipment Finance Company, LLC, a
Delaware limited liability company
"FINANCE" = CCFC II Equipment Finance Holdings, LLC,
a Delaware limited liability company
"FIP1" = Calpine Freestone, Inc., a Delaware
corporation, as the general partner of
FPO and TO
"FIP2" = CPN Freestone, Inc. a Delaware
corporation, as the limited partner of
FPO and TO
"FLSS" = The Office of the Florida Secretary of
State
"FPO" = Freestone Power Generation, LP, a Texas
limited partnership, as Freestone Project
Owner
2
482
"HOLDINGS" = Calpine CCFC II Holdings, Inc., a
Delaware corporation, as sole member of
Borrower
"LMPO" = Los Medanos Energy Center LLC, a Delaware
limited liability company, as Los Medanos
Project Owner
"MPO" = ▇▇▇▇▇▇ Energy Center, LLC, a Delaware
limited liability company, as ▇▇▇▇▇▇
Project Owner
"MSS" = The Office of the Massachusetts Secretary
of State
"PIP1" = Calpine ▇▇▇▇▇ Power I, LLC, a Delaware
limited liability company, as the general
partner of PPO
"PIP2" = Calpine ▇▇▇▇▇ Power II, LLC, a Delaware
limited liability company, as the limited
partner of PPO
"PPO" = Calpine ▇▇▇▇▇ Power, L.P. a Delaware
limited partnership, as Panda ▇▇▇▇▇
Project Owner
"SCSS" = The Office of the South Carolina
Secretary of State
"SRPO" = Santa ▇▇▇▇ Energy LLC, a Delaware limited
liability company, as Santa ▇▇▇▇ Project
Owner
"TO" = Calpine Power Equipment, L.P., a Texas
limited partnership
"TXSS" = The Office of the Texas Secretary of State
UCC-1 FINANCING STATEMENTS
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
CCFC II Administrative Credit Agreement, All personal CASS, DESS
Agent (on Borrower Security property,
behalf of the Agreement, including
Banks) Depositary Accounts and
Agreement and Equity Interests
Pledge and Security of Development
Agreement (Pledged and Finance
Equity Interests)
3
483
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
BIP1 Administrative Pledge and Security Equity Interests CASS, DESS, TXSS
Agent (on Agreement (Pledged of BPO
behalf of the Equity Interests)
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
BIP2 Administrative Pledge and Security Equity Interests CASS, DESS, TXSS
Agent (on Agreement (Pledged of BPO
behalf of the Equity Interests)
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
BPO Administrative Project/Turbine All personal CASS, DESS, TXSS
Agent (on Owner Security property
behalf of the Agreement
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
BRPO Administrative Project/Turbine All personal CASS, DESS,
Agent (on Owner Security property SCSS, MSS, BMCO
behalf of the Agreement
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
CAPO Administrative Project/Turbine All personal CASS, CCIP,
Agent (on Owner Security property DESS, TXSS
behalf of the Agreement
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
CHIP1 Administrative Pledge and Security Equity Interests CASS, DESS, TXSS
Agent (on Agreement (Pledged of CHPO
behalf of the Equity Interests)
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
CHIP2 Administrative Pledge and Security Equity Interests CASS, DESS, TXSS
Agent (on Agreement (Pledged of CHPO
behalf of the Equity Interests)
Banks)
4
484
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
CHPO Administrative Project/Turbine All personal CASS, DESS, TXSS
Agent (on Owner Security property
behalf of the Agreement
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
COIP1 Administrative Pledge and Security Equity Interests CASS, DESS, TXSS
Agent (on Agreement (Pledged of COPO
behalf of the Equity Interests)
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
COIP2 Administrative Pledge and Security Equity Interests CASS, DESS, TXSS
Agent (on Agreement (Pledged of COPO
behalf of the Equity Interests)
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
COPO Administrative Project/Turbine All personal CASS, DESS, TXSS
Agent (on Owner Security property
behalf of the Agreement
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
COMPANY Administrative Company One All personal CASS, DESS
Agent (on Security Agreement property
behalf of the
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
DEVELOP- Administrative Development Company All personal CASS, DESS
MENT Agent (on Security Agreement property,
behalf of the and Pledge and including Equity
Banks) Security Agreement Interests of -
(Pledged Equity Intermediate
Interests) Parents, BRPO,
CAPO, DPO, LMPO,
MPO and SRPO
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
DPO Administrative Project/Turbine All personal ALSS, CASS,
Agent (on Owner Security property DESS, TXSS
behalf of the Agreement
Banks)
5
485
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
EQUIP- Administrative Equipment Finance All personal CASS, DESS
MENT Agent (on Security Agreement property,
behalf of the and Pledge and including equity
Banks) Security Agreement, interests of
(Pledge Equity Company
Interests)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
FINANCE Administrative Pledge and Security Pledged Equity CASS, DESS
Agent (on Agreement of Equipment
behalf of the
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
FIP1 Administrative Pledge and Security Equity Interests CASS, DESS, TXSS
Agent (on Agreement (Pledged of FPO and TC
behalf of the Equity Interests)
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
FIP2 Administrative Pledge and Security Equity Interests CASS, DESS, TXSS
Agent (on Agreement (Pledged of FPO and TO
behalf of the Equity Interests)
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
FPO Administrative Project/Turbine All personal CASS, TXSS
Agent (on Owner Security property
behalf of the Agreement
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
HOLDINGS Administrative Pledge and Security Equity Interests CASS, DESS
Agent (on Agreement (Pledged of CCFC II
behalf of the Equity Interests)
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
LMPO Administrative Project/Turbine All personal CASS, DESS
Agent (on Owner Security property
behalf of the Agreement
Banks)
6
486
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
MPO Administrative Project/Turbine All personal ALSS, CASS,
Agent (on Owner Security property DESS, TXSS
behalf of the Agreement
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
PIP1 Administrative Pledge and Security Equity Interests CASS, DESS, TXSS
Agent (on Agreement (Pledged of PPO
behalf of the Equity Interests)
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
PIP2 Administrative Pledge and Security Equity Interests CASS, DESS, TXSS
Agent (on Agreement (Pledged of PPO
behalf of the Equity Interests)
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
PPO Administrative Project/Turbine All personal CASS, CCOC,
Agent (on Owner Security property DESS, TXSS
behalf of the Agreement
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
SRPO Administrative Project/Turbine All personal CASS, DESS,
Agent (on Owner Security property FLSS, BMCO, MSS
behalf of the Agreement
Banks)
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
TO Administrative Project/Turbine All personal CASS, DESS, TXSS
Agent (on Owner Security property,
behalf of the Agreement including
Banks) Turbine Purchase
Contract
FIXTURE FILINGS
Debtor Secured Party Granting Document Collateral Filing Office
------ ------------- ----------------- ---------- -------------
LMPO Administrative Security Agreement All fixtures CCRO
Agent (on relating to the
behalf of the Los Medanos
Banks) Project
7
487
EXHIBIT D-7
to Credit Agreement
FORM
OF
DEBT SUBORDINATION AGREEMENT
between
__________________________________
and
CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch,
as Administrative Agent
488
DEBT SUBORDINATION AGREEMENT
This SUBORDINATION AGREEMENT ("Agreement"), dated as of
________________, is made by and between ___________________________, a
__________________ ("Junior Claimant"), and CREDIT SUISSE FIRST BOSTON, acting
through its New York Branch, as Administrative Agent (the "Administrative
Agent") for the Senior Claimants (as defined below).
PREFACE
A. Calpine Construction Finance Company II, LLC, a Delaware
limited liability company ("Borrower"), has entered into that certain Credit
Agreement ("Credit Agreement"), dated as of October 16, 2000, by and among
Borrower, the financial institutions listed on Exhibit H thereto (the "Banks"
and, together with Administrative Agent, Lead Arrangers, Arrangers, Syndication
Agents, Documentation Agents, Bookrunner and LC Bank, the "Senior Claimants"),
Credit Suisse First Boston, acting through its New York Branch, as Lead Arranger
and Administrative Agent ("Administrative Agent"), The Bank of Nova Scotia, as
Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of America Securities
LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger
and Co-Syndication Agent, Bayerische Landesbank Girozentrale, as Arranger,
Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as Arranger and
Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as
Arranger and Co-Documentation Agent and TD Securities (USA) Inc., as Arranger
and Co-Documentation Agent, pursuant to which the Senior Claimants will, subject
to the terms and conditions contained therein and in the other Credit Documents,
provide credit facilities to Borrower in connection with Borrower's development,
construction and ownership of the Projects.
B. Borrower and Junior Claimant have and/or will enter into one
or more promissory notes and/or other documents and instruments (collectively,
the "Subordinated Agreement") pursuant to which, subject to the terms and
conditions contained therein and herein, Junior Claimant has and/or will lend to
Borrower funds in a principal amount up to the amount of Contributions required
or permitted to be made by Borrower under the Credit Agreement (the "Junior
Claimant Loan").
C. The Senior Claimants have agreed that Borrower may incur such
indebtedness to Junior Claimant under the Subordinated Agreement only if Junior
Claimant shall join in this Agreement and Junior Claimant shall subordinate, to
the extent and in the manner hereinafter set forth, all claims and rights in
respect of the Subordinated Debt (as defined below) to all Senior Claims (as
defined below) to the extent set forth in this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the premises and as an inducement
to the Senior Claimants to grant financial accommodations to Borrower, and in
consideration of the granting thereof, the parties hereby agree as follows:
489
1. DEFINITIONS. All capitalized terms used herein and not
otherwise defined herein shall have the meaning given in the Credit Agreement
as in effect on the date hereof. As used in this Agreement, the following
terms shall have the following respective meanings:
"Proceeding" means any (a) insolvency, bankruptcy,
receivership, liquidation, reorganization, readjustment, composition or other
similar proceeding of or against Borrower, its property or its creditors as
such, (b) proceeding for any liquidation, dissolution or other winding-up of
Borrower, voluntary or involuntary, whether or not involving insolvency or
bankruptcy proceedings, (c) general assignment for the benefit of creditors of
Borrower or (d) other marshalling of the assets of Borrower.
"Senior Claims" means, subject in each case to Sections 3 and
8 hereof, (a) the principal of, and premium, if any, and interest on, the Loans
under the Credit Agreement (including, without limitation, any interest accruing
thereon at the legal rate after the commencement of any Proceeding and any
additional interest that would have accrued thereon but for the commencement of
such Proceeding); and (b) all other Obligations of Borrower to any Senior
Claimants, whether now existing or hereafter incurred or created, under or with
respect to the Credit Documents or any replacement, supplement to, or
refinancing of the Loans and other Obligations of the Borrower to any Senior
Claimants permitted under Section 3 hereof.
"Subordinated Debt" means all indebtedness owing to Junior
Claimant arising under or in respect of the Subordinated Debt Documents.
"Subordinated Debt Documents" means the Subordinated
Agreement, any promissory note or other instrument relating thereto and any
other documents or instruments directly relating to the foregoing (including any
amendments, replacements or substitutions thereof).
2. CERTAIN SUBORDINATION TERMS. Until all Senior Claims shall
have been paid in full and the Senior Claimants' commitments irrevocably
terminated under the Credit Documents, and notwithstanding anything in the
Subordinated Debt Documents to the contrary:
2.1 Except as permitted under the Credit Agreement
(including Sections 3.10(b) and 7.2.1(8) thereof), Borrower shall not, directly
or indirectly, make any payment of principal, interest or otherwise on or in
respect of the Subordinated Debt.
2.2 Except for the right to demand and accept payments
permitted under the Credit Agreement or as provided in Section 2.1 or 2.5.2 of
this Agreement, Junior Claimant shall not demand, ▇▇▇ for, or accept from
Borrower or any other Person any such payment or collateral, nor take any other
action to enforce or collect upon any such payment or to enforce its rights to
receive any such payment, in either case in respect of the Subordinated Debt,
provided, however, that nothing herein shall limit the right or ability of
Junior Claimant (i) to receive payments from Borrower in respect of the
Subordinated Debt as provided in Section 2.1 so long as no Event of Default
under the Credit Agreement has occurred and is continuing, or
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(ii) to accelerate the maturity of the Subordinated Debt at any time after the
Loans under the Credit Agreement have been accelerated; and provided further
that in the event that the Senior Claimants rescind the acceleration of the
Loans and provide written notice to Junior Claimant thereof, or the Junior
Claimant otherwise becomes aware of such rescission, Junior Claimant shall
rescind the acceleration of the Subordinated Debt.
2.3 Neither Borrower nor the Junior Claimant shall take any
action prejudicial to or inconsistent with the Senior Claimants' priority
position over Junior Claimant created by this Agreement, including, without
limitation, any action which will hinder, delay or otherwise prevent the Senior
Claimants from taking any action they deem necessary to enforce rights with
respect to the Senior Claims or the Lien of the Collateral Documents. Junior
Claimant shall not take any action or otherwise act to contest on account of the
Subordinated Debt (i) the validity or priority of any Liens or security
interests granted to, or for the benefit of, the Senior Claimants, (ii) the
relevant rights and duties of the Senior Claimants with respect to the Junior
Claimant on account of any Subordinated Debt as established in this Agreement or
(iii) Senior Claimants' exercise of remedies in accordance with the Credit
Agreement and the other Credit Documents.
2.4 Each document or instrument evidencing Subordinated Debt
shall bear a legend providing that payment of the Subordinated Debt thereunder
has been subordinated to prior payment of the Senior Claims in the manner and to
the extent set forth in this Agreement.
2.5 Without the prior written consent of the Administrative
Agent, acting in its sole discretion, Junior Claimant shall not commence or join
with any other creditor or creditors of Borrower in commencing any Proceeding
against Borrower or the Member, but may join in any Proceeding after it has
commenced. At any general meeting of creditors of Borrower or the Member, or in
the event of any Proceeding, if all Senior Claims have not been paid in full at
such time, Administrative Agent on behalf of the Senior Claimants is hereby
irrevocably authorized at any such meeting or in any such Proceeding:
2.5.1 To enforce claims comprising Subordinated Debt in
the name of Junior Claimant, by proof of debt, proof of claim, suit or
otherwise;
2.5.2 To collect any assets of Borrower distributed,
divided or applied by way of dividend or payment as a result of a Proceeding, or
such securities issued, on account of Subordinated Debt as a result thereof and
apply the same, or the proceeds of any realization upon the same that the Senior
Claimants in their discretion elect to effect, to Senior Claims until all Senior
Claims shall have been paid in full (the Senior Claimants hereby agreeing to
render any surplus to Junior Claimant and/or other subordinated creditors, as
their interests appear, or to interplead such surplus with a court of competent
jurisdiction); and
2.5.3 To take generally any action in connection with
any such meeting or proceeding which Junior Claimant might otherwise take in
respect of the Subordinated Debt and claims relating thereto; provided, however,
that Junior Claimant shall retain, to the exclusion of Senior Claimants and
Administrative Agent, the right to vote claims
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comprising or arising out of the Subordinated Debt in any Proceeding, including
the right to vote to accept or reject any plan of partial or complete
liquidation, reorganization, readjustment, arrangement, composition or
extension.
After the commencement of any such Proceeding, Junior Claimant
may inquire in writing of Administrative Agent on behalf of the Senior Claimants
whether the Senior Claimants intend to exercise the foregoing rights with
respect to the Subordinated Debt. Should the Senior Claimants fail, at least 20
days before the deadline therefor, either to file a proof of claim with respect
to the Subordinated Debt and to furnish a copy thereof to the Junior Claimant,
or to inform such Junior Claimant in writing that the Senior Claimants intend to
exercise their rights to assert the Subordinated Debt in the manner hereinabove
provided, Junior Claimant may, but shall not be required to, proceed to file a
proof of claim with respect to the Subordinated Debt and take such further steps
with respect thereto, not inconsistent with this Agreement, as Junior Claimant
may deem proper.
2.6 Upon the occurrence and during the continuation of an
Event of Default, Junior Creditor may, but shall have no obligation to, upon not
less than 10 days prior written notice to Administrative Agent, purchase all of
the outstanding Loans and other Obligations of Borrower owing to the Senior
Claimants by irrevocably tendering, in immediately available funds, full payment
of the Purchase Price (as defined below) to Senior Claimants:
2.6.1 The Purchase Price shall be equal to the total\
amount of Senior Claims at the time of acceleration (assuming such obligations
have been accelerated);
2.6.2 Any such purchase by Junior Claimant shall be
without warranty by, or recourse to, the Senior Claimants, except with respect
to the legal and beneficial ownership by the Senior Claimants of the Obligations
so purchased, free and clear of all Liens and rights of others; and
2.6.3 Concurrently with any such purchase the Senior
Claimants shall forthwith sell, assign, transfer and convey to Junior Claimant
all of their right, title and interest in and to the Credit Documents and all
Liens and other security interests in favor of the Senior Claimants securing the
obligations of Borrower in connection therewith.
3. CREDIT AGREEMENT AND CREDIT DOCUMENTS. Junior Claimant
acknowledges that it has been provided with a copy of the Credit Agreement and
has read and is familiar with the provisions of the Credit Agreement, including
without limitation Article 7 thereof. Junior Claimant hereby consents to the
application of Project Revenues in accordance with the Credit Agreement,
including without limitation Article 7 thereof, notwithstanding anything in the
Subordinated Debt Documents to the contrary.
4. TIME OF FILING. Notwithstanding the time of filing, attachment
or recording of any document or other instrument, it is agreed by Junior
Claimant that any liens arising under or pursuant to the Collateral Documents
(as defined in the Credit Documents) shall be senior to any liens arising in
favor of Junior Claimant as part of or relating to the
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492
Subordinated Debt Documents; provided, however, that nothing herein shall be
deemed to permit Junior Claimant to obtain any such liens.
5. WRONGFUL COLLECTIONS. Should any payment on account of, or any
collateral for any part of, the Subordinated Debt be received by Junior Claimant
in violation of this Agreement, such payment or collateral shall be delivered
forthwith to Administrative Agent on behalf of the Senior Claimants by the
recipient for application to Senior Claims, in the form received. Administrative
Agent is irrevocably authorized to supply any required endorsement or assignment
which may have been omitted. Until so delivered, any such payment or collateral
shall be held by the recipient in trust for the Senior Claimants and shall not
be commingled with other funds or property of the recipient.
6. OWNERSHIP OF SUBORDINATED DEBT; AMENDMENT OF SUBORDINATED
DEBT DOCUMENTS.
6.1 Junior Claimant represents and warrants that it is the
lawful owner of the Subordinated Debt and no part thereof has been assigned to
or subordinated or subjected to any other security interest in favor of anyone
other than the Senior Claimants. Junior Claimant agrees that it may not assign
all or any portion of the Subordinated Debt or any of its rights or remedies
under the Subordinated Debt Documents except upon the execution and delivery to
Administrative Agent of an agreement by any such assignee to be bound by the
terms of this Agreement (including provisions relating to assignment), in form
and substance the same as this Agreement, or otherwise as may be reasonably
satisfactory to Administrative Agent.
6.2 Without the prior written consent of Administrative
Agent and the Required Banks, the Subordinated Debt Documents may not be amended
so as to have an adverse effect upon the Senior Claims or Borrower's ability to
pay the Senior Claims at any time.
7. WAIVERS. Administrative Agent and the Senior Claimants are
hereby authorized to demand specific performance of this Agreement, whether or
not Borrower shall have complied with the provisions hereof applicable to it, at
any time when Junior Claimant shall have failed to comply with any provision
hereof applicable to it. Junior Claimant hereby irrevocably waives any defense
based on the adequacy of a remedy at law which might be asserted as a bar to the
remedy of specific performance hereof in any action brought therefor by the
Senior Claimants. Junior Claimant (a) further waives presentment, notice and
protest in connection with all negotiable instruments evidencing Senior Claims
or Subordinated Debt to which Junior Claimant may be a party, notice of the
acceptance of this Agreement by the Senior Claimants, notice of any loan made,
extension granted or other action taken in reliance hereon, and all demands and
notices of every kind in connection with this Agreement, Senior Claims or time
of payment of Senior Claims or Subordinated Debt and (b) hereby assents to any
renewal, extension or postponement of the time of payment of Senior Claims or
any other indulgence with respect thereto, to any increase in the amount of
Senior Claims, to any substitution, exchange or release of collateral therefor
and to the addition or release of any person primarily or secondarily liable
thereon and assents to the provisions of any instrument, security or other
writing evidencing Senior Claims.
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8. SUBROGATION; NO IMPAIRMENT OF BORROWER'S OBLIGATIONS. Subject
to and from and after the payment in full of all Senior Claims and the
irrevocable termination of Senior Claimants' commitments under the Credit
Documents, Junior Claimant shall be subrogated to the rights of the Senior
Claimants to receive payments or distributions of cash, property or securities
of Borrower applicable to the Senior Claims until all amounts owing on the
Subordinated Debt shall be paid in full. For purposes of such subrogation, no
payments or distributions to the Senior Claimants to which Junior Claimant would
be entitled but for the provisions of this Agreement, and no payments paid over
by Junior Claimant to Senior Claimants pursuant to this Agreement shall, as
among the Borrower, its creditors other than the Senior Claimants, and Junior
Claimant, be deemed to be a payment or distribution on account of the
Subordinated Debt, it being understood that the provisions of this Agreement are
intended solely for the purpose of defining the relative rights of Junior
Claimant and the Senior Claimants. Nothing contained in this Agreement is
intended to or shall impair, as between Borrower and Junior Claimant, the
obligation of Borrower, which is absolute and unconditional, to pay to Junior
Claimant the principal of and the premium, if any, and the interest on the
Subordinated Debt, and all other amounts payable by Borrower under the
Subordinated Debt Documents, as and when the same shall become due and payable,
or to affect the relative rights of Junior Claimant and creditors of Borrower
other than the Senior Claimants.
9. REINSTATEMENT. The obligations of Junior Claimant under this
Agreement shall continue to be effective, or be reinstated, as the case may be,
if at any time any payment in respect of any Senior Claim, or any other payment
to any holder of any Senior Claim in its capacity as such, is rescinded or must
otherwise be restored or returned by the holder of such Senior Claims upon the
occurrence of any Proceeding, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for,
Borrower or any substantial part of its property, or otherwise, all as though
such payment had not been made.
10. BANKRUPTCY. This Agreement shall remain in full force and
effect as between the Junior Claimant and Senior Claimant notwithstanding the
occurrence of any Proceeding affecting Borrower.
11. FURTHER ASSURANCES. Borrower and Junior Claimant shall execute
and deliver to the Senior Claimants such further instruments and shall take such
further action as the Senior Claimants may at any time or times reasonably
request in order to carry out the provisions and intent of this Agreement.
12. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Neither the Junior Claimant nor the Senior
Claimants shall have a duty to preserve rights against prior parties in any
property of any kind received hereunder. Nothing contained herein shall impose
on the Senior Claimants any duties with respect to any property of Borrower or
Junior Claimant received hereunder.
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494
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, but all such counterparts shall together constitute but one
agreement. In making proof of this Agreement, it shall not be necessary to
produce or account for more than one counterpart signed by each of the parties
hereto.
14. GOVERNING LAW. This Agreement is intended to take effect as a
sealed instrument, shall be binding upon the parties hereto and their respective
executors, administrators, other legal representatives, successors and assigns,
and shall inure to the benefit of the Senior Claimants, their respective
successors and assigns and shall be governed by the laws of the State of New
York without reference to principles of conflict of laws (other than Section
5-1401 of the New York General Obligations Law). The parties hereto intend and
agree that this Agreement shall remain binding on such parties (other than
Borrower) notwithstanding the termination (except upon the payment in full of
Senior Claims) or unenforceability of this Agreement as against Borrower.
[REMINDER OF PAGE INTENTIONALLY LEFT BLANK]
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495
IN WITNESS WHEREOF, the parties hereto have caused this
Subordination Agreement to be duly executed as of the date first above written.
[JUNIOR CLAIMANT]
______________________________
a ____________________________
By: ____________________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
as Administrative Agent
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
Acknowledged and Agreed:
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By: ______________________________
Name:
Title:
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496
TABLE OF CONTENTS
PAGE
----
1. Definitions...............................................................2
2. Certain Subordination Terms...............................................2
3. Credit Agreement and Credit Documents.....................................4
4. Time of Filing............................................................4
5. Wrongful Collections......................................................5
6. Ownership of Subordinated Debt; Amendment of Subordinated Debt Documents..5
7. Waivers...................................................................5
8. Subrogation; No Impairment of Borrower's Obligations......................6
9. Reinstatement.............................................................6
10. Bankruptcy................................................................6
11. Further Assurances........................................................6
12. Successors and Assigns....................................................6
13. Counterparts..............................................................7
14. Governing Law.............................................................7
497
EXHIBIT D-8
to Credit Agreement
AFFILIATE
SUBORDINATION AGREEMENT
Dated as of _________, 200_
between
_________________,
a _______________,
and
CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch,
as Administrative Agent
498
SUBORDINATION AGREEMENT
This AFFILIATE SUBORDINATION AGREEMENT (this "Agreement") dated as
of __________, 200_ is entered into by and between __________, a __________ (the
"Junior Claimant"), and CREDIT SUISSE FIRST BOSTON, acting through its New York
Branch, as Administrative Agent ("Administrative Agent") for the Senior
Claimants (as defined below).
PREFACE
A. Calpine Construction Finance Company II, LLC, a Delaware
limited liability company ("Borrower"), the financial institutions listed on
Exhibit H thereto (the "Banks"), Credit Suisse First Boston, acting through its
New York Branch, as Lead Arranger and Administrative Agent ("Administrative
Agent"), The Bank of Nova Scotia, as Lead Arranger, Co-Syndication Agent and
Bookrunner, Banc of America Securities LLC, as Arranger and Co-Syndication
Agent, ING (U.S.) Capital LLC, as Arranger and Co-Syndication Agent, Bayerische
Landesbank Girozentrale, as Arranger, Co-Documentation Agent and LC Bank, CIBC
World Markets Corp., as Arranger and Co-Documentation Agent, Dresdner Kleinwort
▇▇▇▇▇▇ North America Services LLC, as Arranger and Co-Documentation Agent and TD
Securities (USA) Inc., as Arranger and Co-Documentation Agent (the Banks,
Administrative Agent, the Lead Arrangers, the Arrangers, the Syndication Agents,
the Documentation Agents, the Bookrunner and all financial institutions parties
to the Credit Agreement, the "Senior Claimants"), have entered into that certain
Credit Agreement dated as of October 16, 2000 ("Credit Agreement"), pursuant to
which the Senior Claimants will, subject to the terms and conditions contained
therein, provide credit facilities to Borrower in connection with the
development, construction and ownership of the Projects. Pursuant to the Credit
Agreement, (i) proceeds of such credit facilities will be utilized by Borrower
for, among other things, distribution to Project Owner for the payment of
Project Costs associated with the _____ Project, (ii) all Project Revenues
received by Project Owner will be transferred to the Accounts held by Borrower
and (iii) all O&M Costs, including the Subordinated O&M Costs, will be paid by
Project Owner from funds available for such purposes in accordance with Article
7 of the Credit Agreement.
B. __________ a __________ ("Project Owner") and Junior Claimant
have entered into (i) that certain __________ (the "______________") and (ii)
that certain ____________ (the "_________" and together with the ____________,
the "Subordinated Contracts") pursuant to which, subject to the terms and
conditions contained therein and herein, Project Owner has agreed to pay certain
fees for the [OPERATION, MAINTENANCE AND MANAGEMENT] of the _____ Project by
Junior Claimant (the "O&M Costs"). That portion of the O&M Costs which are
designated in Section ___ of the _______, or Section ___ of the _____ is
referred to herein as the "Subordinated O&M Costs."
C. Project Owner and Administrative Agent, on behalf of the
Banks, have entered into the Project Owner Guaranty dated as of ____, 200_ (the
"Guaranty") pursuant to which Project Owner has guaranteed the obligations of
each of the other Portfolio Entities under
499
the Credit Documents, including Borrower's Obligations under the Credit
Agreement and the other Credit Documents to which Borrower is a party.
D. The Senior Claimants have agreed that Project Owner may enter
into each of the Subordinated Contracts only if Junior Claimant shall join in
this Agreement and Junior Claimant shall subordinate, to the extent and in the
manner hereinafter set forth, all claims and rights in respect of the
Subordinated O&M Costs to all Senior Claims (as defined below) to the extent set
forth in this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the premises and as an inducement
to the Senior Claimants to grant financial accommodations to Borrower, and in
consideration of the granting thereof, the parties hereby agree as follows:
1. DEFINITIONS. All capitalized terms used herein and not
otherwise defined herein shall have the meaning given in the Credit Agreement.
As used in this Agreement, the following terms shall have the following
respective meanings:
"Proceeding" means any (a) insolvency, bankruptcy,
receivership, liquidation, reorganization, readjustment, composition or other
similar proceeding relating to Project Owner, its property or its creditors as
such, (b) proceeding for any liquidation, dissolution or other winding-up of
Project Owner, voluntary or involuntary, whether or not involving insolvency or
bankruptcy proceedings, (c) assignment for the benefit of creditors of Project
Owner or (d) other marshaling of the assets of Project Owner.
"Senior Claims" means (a) the principal of, and premium, if
any, and interest on the Loans under the Credit Agreement (including, without
limitation, any interest accruing thereon at the legal rate after the
commencement of any Proceeding and any additional interest that would have
accrued thereon but for the commencement of such Proceeding) and all other
Obligations of Borrower to any Senior Claimants, whether now existing or
hereafter incurred or created, under or with respect to the Credit Documents and
any related documents; and (b) all of the Obligations of Project Owner to the
Senior Claimants, whether now existing or hereafter incurred or created, under
or with respect to the Credit Documents, including without limitation the
Guaranty, and any related documents.
2. CERTAIN SUBORDINATION TERMS. Until all Senior Claims shall
have been paid in full and the Senior Claimants' commitments irrevocably
terminated under the Credit Documents, and notwithstanding anything in either of
the Subordinated Contracts to the contrary:
2.1 Junior Claimant acknowledges that, notwithstanding
anything in either of the Subordinated Contracts to the contrary, Project Owner
may pay to Junior Claimant Subordinated O&M Costs due to Junior Claimant with
funds available for distribution by Borrower to Project Owner under Waterfall
Level 6 of Section 7.2 of the Credit Agreement only if and to the extent monies
are sufficient for the payment thereof pursuant to such Section 7.2.
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500
Except as provided in this Section 2.1, Project Owner shall not, directly or
indirectly, make any payment on or in respect of the Subordinated O&M Costs, and
Project Owner shall not in any event transfer any collateral for any part of,
the Subordinated O&M Costs.
2.2 Except for the right to demand and accept payments set
forth in Section 2.1 hereof, Junior Claimant shall not demand, ▇▇▇ for, or
accept directly or indirectly from Project Owner any such payment or collateral,
nor take any other action to enforce or collect upon any such payment or to
enforce its rights, in either case in respect of the Subordinated O&M Costs, nor
set off against obligations owed to Project Owner under either of the
Subordinated Contracts or otherwise against any part of the Subordinated O&M
Costs. Notwithstanding anything in either of the Subordinated Contracts to the
contrary, the failure by Project Owner to pay any Subordinated O&M Costs shall
not under any circumstances, except where the funds are available therefor and
payment is permitted under Section 2.1 hereof, constitute a breach or default
under either of the Subordinated Contracts.
2.3 Neither Project Owner nor Junior Claimant shall
otherwise take any action prejudicial to or inconsistent with the Senior
Claimants' priority position over Junior Claimant created by this Agreement.
2.4 Each negotiable instrument or promissory note evidencing
a Subordinated O&M Cost or a lien, if any, in respect thereof shall bear a
legend (or otherwise include provisions satisfactory to Administrative Agent)
providing that payment of the Subordinated O&M Costs thereunder and the priority
of any such lien have been subordinated to prior payment of the Senior Claims
and the liens in respect thereof in the manner and to the extent set forth in
this Agreement.
2.5 Junior Claimant shall not commence or voluntarily permit
Project Owner to commence or join with any other creditor or creditors of
Project Owner in commencing any Proceeding against Project Owner or any other
Portfolio Entity or member or partner thereof; provided that Junior Claimant
shall not be so restricted with respect to claims arising directly out of
Project Owner's failure to perform its obligations or make any payments of O&M
Costs under either of the Subordinated Contracts other than the Subordinated O&M
Costs. At any general meeting of creditors of Project Owner or in the event of
any Proceeding, if all Senior Claims have not been paid in full at such time,
Administrative Agent on behalf of the Senior Claimants is hereby irrevocably
authorized at any such meeting or in any such Proceeding:
2.5.1 to enforce claims comprising the Subordinated O&M
Costs in the name of Junior Claimant, by proof of debt, proof of claim, suit or
otherwise;
2.5.2 to collect any assets of Project Owner
distributed, divided or applied by way of dividend or payment as a result of a
Proceeding, or such securities issued, on account of the Subordinated O&M Costs
as a result thereof and apply the same, or the proceeds of any realization upon
the same that the Senior Claimants in their discretion elect to effect, to
Senior Claims until all Senior Claims shall have been paid in full (the Senior
Claimants hereby agreeing to render any surplus as a court of competent
jurisdiction may direct); and
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501
2.5.3 other than voting claims comprising the
Subordinated O&M Costs, to take generally any action in connection with any such
meeting or proceeding which Junior Claimant might otherwise take in respect of
the Subordinated O&M Costs and claims relating thereto.
After the commencement of any such Proceeding, Junior Claimant may
inquire of Administrative Agent in writing whether Administrative Agent intends
to exercise the foregoing rights with respect to the Subordinated O&M Costs.
Should Administrative Agent fail, within a reasonable time after receipt of such
inquiry, either to file a proof of claim with respect to the Subordinated O&M
Costs and to furnish a copy thereof to Junior Claimant, or to inform Junior
Claimant in writing that the Senior Claimants intend to exercise their rights to
assert the Subordinated O&M Costs in the manner hereinabove provided, Junior
Claimant may, but shall not be required to, proceed to file a proof of claim
with respect to the Subordinated O&M Costs and take such further steps with
respect thereto, not inconsistent with this Agreement, as Junior Claimant may
deem proper.
2.6 In the event that (a) the Senior Claimants foreclose on
any or all of their liens on all or a substantial portion of the assets
constituting one or more of the Projects (or succeed to such assets by way of a
transfer in lieu of foreclosure), and (b) Senior Claimants assume either of the
Subordinated Contracts in accordance with the terms of the Consent and Agreement
dated as of ___________, 200_ among Junior Claimant, Administrative Agent and
Project Owner (the "Consent") (or enter into a new agreement pursuant to Section
1(d) of the Consent), then notwithstanding anything in either of the
Subordinated Contracts to the contrary, (i) Project Owner (or any successor or
assign) shall not be obligated to pay the Subordinated O&M Costs, if any, then
due, except as set forth in Section 2.6.1 or 2.6.2, as applicable, (ii) each of
the Subordinated Contracts shall remain in full force and effect notwithstanding
any such foreclosure (but subject to the terms and conditions thereof), and
(iii) the following shall apply:
2.6.1 In the event that the Senior Claimants (including,
for purposes of this Section 2.6.1, their Affiliates) or any of them become the
owners of one or more of the Projects, the Senior Claimants shall apply to the
outstanding balance, if any, of the Subordinated O&M Costs relating to such
Project(s) on (or promptly after) the last day of each calendar quarter all
Project Operating Revenues relating to such Project(s) received in excess of
amounts applied during such quarterly period to (a) the payment or application
of all costs for the operation and maintenance of such Projects in the nature of
those costs defined as "Senior O&M Costs" payable under Waterfall ▇▇▇▇▇ ▇ of
Section 7.2 of the Credit Agreement, which expenditures shall not be materially
greater than as are consistent with operation of such Project(s) in accordance
with prudent operating practices (as determined with reference to similar
facilities under similar operating conditions), (b) the payment of a return of
and on the investment of the Senior Claimants, whether such investment is in the
form of equity or debt (and whether or not the Senior Claimants have foreclosed
on their liens by way of a partial or full credit bid or otherwise), which
payments shall not be greater than the periodic payments which would have been
payable under the priorities specified in Waterfall Levels 2 through 5 and 8 of
Section 7.2 of the Credit Agreement as in effect immediately prior to such
foreclosure, as reasonably determined by the Senior Claimants (assuming for
purposes of calculating such payment that (i) Loans had been extended to
Borrower at the Base Rate in the amount of the
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502
unpaid balance of all Loans owed to the Senior Claimants immediately prior to
the exercise by such parties of their remedies, (ii) such deemed Loans have not
been repaid upon foreclosure, (iii) such deemed Loans are to be deemed amortized
straight line through the Loan Maturity Date (without giving effect to any
acceleration) and (iv) all outstanding Letters of Credit were fully drawn upon
by the respective LC Beneficiaries immediately prior to foreclosure) and (c)
funding of reserves in an amount which would have been available for the benefit
of the Senior Claimants under Waterfall Level 5 of Section 7.2 of the Credit
Agreement as in effect immediately prior to such foreclosure. Upon such
foreclosure by the Senior Claimants, each of the Subordinated Contracts, as
applicable, shall be deemed to be amended to reflect such arrangement.
2.6.2 In the event that the Senior Claimants sell one or
more of the Projects to a third party ("New Owner"), the New Owner shall apply
to the outstanding balance, if any, of the Subordinated O&M Costs relating to
such Project(s) on (or promptly after) the last day of each calendar quarter all
Project Operating Revenues relating to such Project(s) received in excess of
amounts applied during such quarterly period to (a) the payment of all costs for
the operation and maintenance of such Project(s) in the nature of those costs
defined as "Senior O&M Costs" payable under Waterfall ▇▇▇▇▇ ▇ of Section 7.2 of
the Credit Agreement, which expenditures shall not be materially greater than as
are consistent with operation of such Project(s) in accordance with prudent
operating practices (as determined with reference to similar facilities under
similar operating conditions), (b) the periodic payment of fees, interest and
principal as required by the lenders to the New Owner, which payments shall not
be materially greater on an annual basis than such amounts payable by Borrower
to the Senior Claimants under the Credit Agreement as in effect immediately
prior to foreclosure by the Senior Claimants, as reasonably determined by the
lenders to the New Owner; provided that greater payments shall be permitted so
long as the payment of such excess amounts is subordinated to the Subordinated
O&M Costs and (c) the funding of reserves not materially in excess of the
amounts which would have been available for the benefit of the Senior Claimants
under Waterfall Level 5 of Section 7.2 the Credit Agreement as in effect
immediately prior to such foreclosure. The lenders to such New Owner shall be
deemed to be Senior Claimants hereunder, and the payments specified in clause
(b) and (c) of this Section 2.6.2 shall be deemed to be Senior Claims under this
Agreement. Subject to Junior Claimant's rights under Section ___ of the _____,
Section _______ of the ________ and Section ____ of the _________, [SECTION
REFERENCES RELATING TO JUNIOR CLAIMANT'S RIGHT TO TERMINATE UPON CHANGE OF
CONTROL] Junior Claimant agrees that it will execute and deliver to New Owner's
lenders such new subordination agreement, such amendments to each of the
Subordinated Contracts, and such other instruments, in each case consistent with
the terms of this Agreement, and Junior Claimant shall take such further action,
as the lenders to the New Owner reasonably request in furtherance of this
Section 2.6.2.
3. CREDIT AGREEMENT. Junior Claimant acknowledges that it has
been provided with a copy of the Credit Agreement and the Guaranty and has read
and is familiar with the provisions of the Credit Agreement, including without
limitation Article 7 thereof. Junior Claimant hereby consents to the application
of Project Revenues in the order of priority set forth in the Credit Agreement
and Guaranty, including without limitation Article 7 of the Credit Agreement,
notwithstanding anything in either of the Subordinated Contracts to the
contrary.
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4. TIME OF FILING. Notwithstanding the time of filing, attachment
or recording of any document or other instrument, it is agreed by Junior
Claimant that any liens arising under or pursuant to the Collateral Documents
(as defined in the Credit Documents) shall be senior to any liens arising in
favor of Junior Claimant as part of or relating to either of the Subordinated
Contracts.
5. WRONGFUL COLLECTIONS. Should any payment on account of, or any
collateral for any part of, the Subordinated O&M Costs be received by Junior
Claimant in violation of this Agreement, such payment or collateral shall be
delivered forthwith to Administrative Agent on behalf of the Senior Claimants by
the recipient for application to Senior Claims, in the form received.
Administrative Agent is irrevocably authorized to supply any required
endorsement or assignment which may have been omitted. Until so delivered, any
such payment or collateral shall be held by the recipient in trust for the
Senior Claimants and shall not be commingled with other funds or property of the
recipient.
6. OWNERSHIP OF SUBORDINATED O&M COSTS; AMENDMENT OF SUBORDINATED
CONTRACTS.
6.1 Junior Claimant represents and warrants that it is the
lawful owner of the right to receive the Subordinated O&M Costs and no part
thereof has been assigned to or subordinated or subjected to any other security
interest in favor of anyone other than the Senior Claimants. Junior Claimant
shall not assign all or any portion of the Subordinated O&M Costs, its
commitment under, or any of its rights or remedies under, either of the
Subordinated Contracts without the prior written consent of Administrative Agent
and the Required Banks, which may be granted or withheld in their sole
discretion, and in any event only upon the execution and delivery to
Administrative Agent of an agreement by any such assignee to be bound by the
terms of this Agreement (including provisions relating to assignment), in form
and substance the same as this Agreement, or otherwise as may be reasonably
satisfactory to Administrative Agent.
6.2 Subject to Section 6.13.1 of the Credit Agreement and
Section 3(f) of the Guaranty, Junior Claimant shall not amend either of the
Subordinated Contracts without Administrative Agent's prior written consent.
7. WAIVERS. Administrative Agent and the Senior Claimants are
hereby authorized to demand specific performance of this Agreement, whether or
not Project Owner shall have complied with the provisions hereof applicable to
it, at any time when Junior Claimant shall have failed to comply with any
provision hereof applicable to it. Junior Claimant hereby irrevocably waives any
defense based on the adequacy of a remedy at law which might be asserted as a
bar to the remedy of specific performance hereof in any action brought therefor
by the Senior Claimants. Junior Claimant further waives presentment, notice and
protest in connection with all negotiable instruments evidencing Senior Claims
or Subordinated O&M Costs to which Junior Claimant may be a party, notice of the
acceptance of this Agreement by the Senior Claimants, notice of any loan made,
extension granted or other action taken in reliance hereon, and all demands and
notices of every kind in connection with this Agreement, Senior Claims or time
of payment of Senior Claims or Subordinated O&M Costs. Junior Claimant hereby
assents to any renewal, extension or postponement of the time of payment of
Senior
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Claims or any other indulgence with respect thereto, to any increase in the
amount of Senior Claims, to any substitution, exchange or release of collateral
therefor and to the addition or release of any person primarily or secondarily
liable thereon and assents to the provisions of any instrument, security or
other writing evidencing Senior Claims.
8. SUBROGATION; NO IMPAIRMENT OF PROJECT OWNER'S OBLIGATIONS.
Subject to and from and after the indefeasible payment in full of all Senior
Claims and the irrevocable termination of Senior Claimants' commitments under
the Credit Documents, Junior Claimant shall be subrogated to the rights of the
Senior Claimants to receive payments or distributions of cash, property or
securities of Project Owner applicable to the Senior Claims until all amounts
owing on the Subordinated O&M Costs shall be paid in full, it being understood
that the provisions of this Agreement are and are intended solely for the
purpose of defining the relative rights of Junior Claimant and the Senior
Claimants; provided that such rights of subrogation shall be nonexclusive, and
shall be shared with any other subordinated creditor of the Project Owner which
has entered into an agreement with the Administrative Agent providing similar
rights of subrogation. Nothing contained in this Agreement is intended to or
shall impair, as between Project Owner, its creditors other than the Senior
Claimants and Junior Claimant, the obligation of Project Owner, which is
absolute and unconditional, to pay to Junior Claimant the principal of and the
premium, if any, and the interest on the Subordinated O&M Costs as and when the
same shall become due and payable in accordance with the terms of this Agreement
and the Subordinated Contracts, or to affect the relative rights of Junior
Claimant and creditors of Project Owner other than the Senior Claimants.
9. REINSTATEMENT. The obligations of Junior Claimant under this
Agreement shall continue to be effective, or be reinstated, as the case may be,
if at any time any payment in respect of any Senior Claim, or any other payment
to any holder of any Senior Claim in its capacity as such, is rescinded or must
otherwise be restored or returned by the holder of such Senior Claims upon the
occurrence of any Proceeding, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for,
Project Owner or any substantial part of its property, or otherwise, all as
though such payment had not been made.
10. BANKRUPTCY. This Agreement shall remain in full force and
effect as between the Junior Claimant and Senior Claimant notwithstanding the
occurrence of any Proceeding affecting Project Owner.
11. FURTHER ASSURANCES. Project Owner and Junior Claimant shall
execute and deliver to the Senior Claimants such further instruments and shall
take such further action as the Senior Claimants may at any time or times
reasonably request in order to carry out the provisions and intent of this
Agreement.
12. SUCCESSORS AND ASSIGNS. The rights granted to the Senior
Claimants hereunder are solely for their protection and nothing herein contained
shall impose on the Senior Claimants any duties with respect to any property of
Project Owner or Junior Claimant received hereunder. The Senior Claimants shall
have no duty to preserve rights against prior parties in any property of any
kind received hereunder.
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13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, but all such counterparts shall together constitute but one
agreement. In making proof of this Agreement, it shall not be necessary to
produce or account for more than one counterpart signed by each of the parties
hereto.
14. GOVERNING LAW. This Agreement is intended to take effect as a
sealed instrument, shall be binding upon the parties hereto and their respective
executors, administrators, other legal representatives, successors and assigns,
and shall inure to the benefit of the Senior Claimants, their respective
successors and assigns and shall be governed by the laws of the State of New
York without reference to principles of conflict of laws (other than Section
5-1401 of the New York General Obligations Law). The parties hereto intend and
agree that this Agreement shall remain binding on such parties (other than
Project Owner) notwithstanding the termination (except upon the payment in full
of Senior Claims) or unenforceability of this Agreement as against Project
Owner.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
_______________________,
a _____________________,
as Junior Claimant
By: __________________,
a ________________,
its General Partner
By: ______________________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
as Administrative Agent
By: _________________________________________
Name:
Title:
By: _________________________________________
Name:
Title:
The undersigned acknowledges and agrees to the foregoing:
[NAME OF PROJECT OWNER],
a __________
By: __________________________________________
Name:
Title:
507
EXHIBIT D-9
PLEDGE AND SECURITY AGREEMENT (PLEDGED EQUITY INTERESTS)
This PLEDGE AND SECURITY AGREEMENT (PLEDGED EQUITY INTERESTS) (this
"Agreement"), dated as of ______________, 200__, is entered into by and among
_____________, a Delaware ___________ ("Pledgor"), _____________a Delaware
_____________ (the "Pledged Portfolio Entity"), and CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch, as Administrative Agent ("Administrative
Agent") for the Banks (as defined below). [FORM MAKES ASSUMPTION THAT PLEDGOR IS
A PORTFOLIO ENTITY. IN CASE OF PLEDGE BY NON-AFFILIATE PARENT OR MEMBER, AMEND
ACCORDINGLY]
PREFACE
A. Calpine Construction Finance Company II, LLC, a Delaware limited
liability company ("Borrower"), has entered into that certain Credit Agreement,
dated as of October 16, 2000 (as modified, supplemented or amended from time to
time, the "Credit Agreement"), among Borrower, the financial institutions listed
on Exhibit H thereto (the "Banks"), Credit Suisse First Boston, as Lead Arranger
and Administrative Agent ("Administrative Agent"), The Bank of Nova Scotia, as
Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of America Securities,
LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger
and Co-Syndication Agent, Bayerische Landesbank Girozentrale, as Arranger,
Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as Arranger and
Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇, as Arranger and
Co-Documentation Agent and TD Securities (USA) Inc., as Arranger and
Co-Documentation Agent, pursuant to which the Banks agreed to make certain
advances of credit to Borrower in the amounts specified and on the terms and
subject to the conditions set forth therein. For purposes of this Agreement the
term "Banks" shall include the Administrative Agent, the Lead Arrangers, the
Arrangers, the Sydincation Agents, the Documentation Agents, the Bookrunner and
the Banks (as such terms are defined in the Credit Agreement).
B. Borrower is the _________ of Pledgor. [DESCRIBE RELATIONSHIP]
C. Pledgor is the [GENERAL PARTNER][LIMITED PARTNER][SOLE MEMBER] of
the Pledged Portfolio Entity pursuant to that certain ______________ Agreement
of ______________, dated as of ________________ (as modified, supplemented or
amended from time to time in accordance with its terms, the "Constituent
Agreement").
D. Each of Pledgor and the Pledged Portfolio Entity acknowledges that
it will benefit, directly and indirectly, if Administrative Agent and the Banks
enter into the Credit Agreement.
E. As a condition precedent to the Banks' making the advances of credit
contemplated by the Credit Agreement, the Banks require that the Pledged
Portfolio Entity and Pledgor shall have executed this Agreement.
508
AGREEMENT
In consideration of the premises herein, and in order to induce the
Banks to enter into the Credit Agreement and to make the advances of credit
pursuant to the terms thereof, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Pledged Portfolio
Entity and Pledgor hereby agree with Administrative Agent for the benefit of
Administrative Agent and the Banks as follows:
1. DEFINITIONS.
1.1 "UCC" shall mean the Uniform Commercial Code as the same may,
from time to time, be in effect in the State of New York; provided, however, in
the event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, the term "UCC" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.
1.2 All capitalized terms used, but not otherwise defined herein,
shall have the meanings provided in the Credit Agreement. The rules of
interpretation contained in Exhibit A to the Credit Agreement shall apply to
this Agreement.
2. ASSIGNMENT, PLEDGE AND GRANT OF SECURITY INTEREST.
2.1 To secure the timely payment and performance of the
Obligations (as defined below), Pledgor hereby assigns and pledges to
Administrative Agent for the benefit of Administrative Agent and the Banks, and
grants to Administrative Agent for the benefit of Administrative Agent and the
Banks a security interest in all the estate, right, title and interest of
Pledgor, now owned or hereafter acquired, in, to and under any and all of the
following (the "Collateral"):
Any and all of Pledgor's [PARTNERSHIP][LIMITED LIABILITY
COMPANY] interest(s), whether now owned or subsequently acquired, in the Pledged
Portfolio Entity, including, without limitation, the certificates representing
such interest(s) and Pledgor's share of (i) all rights to receive all income,
gain, profit, loss or other items allocated or distributed to Pledgor under the
Constituent Agreement; (ii) all rights to receive all income, profit or other
distributions of any nature whatsoever by the Pledged Portfolio Entity with
respect to such interest(s); (iii) all of Pledgor's capital or ownership
interest, including capital accounts, in the Pledged Portfolio Entity, and all
accounts, deposits or credits of any kind with the Pledged Portfolio Entity;
(iv) all of Pledgor's voting rights in or rights to control or direct the
affairs of the Pledged Portfolio Entity; (v) all of Pledgor's right, title and
interest in the Pledged Portfolio Entity, in or to any and all of the Pledged
Portfolio Entity's assets or properties; (vi) all other right, title and
interest in or to the Pledged Portfolio Entity, as such rights are derived from
Pledgor's interest in the Pledged Portfolio Entity; (vii) all claims of Pledgor
for damages arising out of or for breach of or default relating to the
Collateral; and (viii) all rights of Pledgor to
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terminate, amend, supplement, modify or waive performance under the Constituent
Agreement, to perform thereunder and to compel performance and otherwise
exercise all remedies thereunder; and (ix) all proceeds of any of the above.
[ADD FOR MEMBER PLEDGE AGREEMENT] [PROVIDED, HOWEVER, THAT "COLLATERAL" SHALL
NOT INCLUDE ANY CASH OR OTHER PROPERTY DISTRIBUTED TO PLEDGOR FOLLOWING A
DISTRIBUTION MADE PURSUANT TO WATERFALL LEVELS 8 OR 10, AS THE CASE MAY BE, OF
THE CREDIT AGREEMENT.]
[ADD FOR NON-AFFILIATE PARENT PLEDGE AGREEMENT] [PROVIDED, HOWEVER, THAT
"COLLATERAL" SHALL NOT INCLUDE ANY CASH OR OTHER PROPERTY DISTRIBUTED TO PLEDGOR
FOLLOWING A DISTRIBUTION MADE PURSUANT TO WATERFALL LEVEL 7 OF THE CREDIT
AGREEMENT.]
2.2 If any default by Pledgor under the Constituent Agreement (a
"Constituent Agreement Default") shall occur, Administrative Agent shall, at its
option, be permitted (but shall not be obligated) to remedy any such Constituent
Agreement Default by giving written notice of such intent to the Pledged
Portfolio Entity and Pledgor. Administrative Agent shall have a period of 60
days after giving such notice in which to cure such Constituent Agreement
Default. In the event that any such Constituent Agreement Default (except
monetary defaults) shall not be reasonably curable within such sixty-day period,
neither the Pledged Portfolio Entity nor any Person acting on behalf of the
Pledged Portfolio Entity, including, without limitation, a general partner of
the Pledged Portfolio Entity, shall exercise any remedies thereunder if
Administrative Agent shall, within such 60-day period, initiate action to cure
such Constituent Agreement Default and proceed diligently to the curing thereof
within 120 days after giving written notice of a Constituent Agreement Default.
Any cure by Administrative Agent of a Constituent Agreement Default shall not be
construed as an assumption by Administrative Agent or any of the Banks of any
obligations, covenants or agreements of Pledgor under the Constituent Agreement,
and, subject to Section 12.13 of the Credit Agreement, neither Administrative
Agent nor any of the Banks shall be liable for any action taken pursuant to this
subsection 2.2 to cure any such Constituent Agreement Default, except as set
forth in Section 12.13 of the Credit Agreement. This Agreement shall not be
deemed to release or to affect in any way the obligations of Pledgor under the
Constituent Agreement.
3. OBLIGATIONS SECURED. Without limiting the generality of the
foregoing, this Agreement and all of the Collateral secure the payment and
performance when due of all Obligations (as defined in the Credit Agreement) of
Borrower and each other Portfolio Entity (including Pledgor) to the
Administrative Agent and the Banks pursuant to the Credit Documents (the
"Obligations"); provided, however, the Obligations as defined in this Section 3
shall not include any Obligations relating to or arising from Projects that have
achieved Operation prior to the effective date of this Agreement.
4. EVENTS OF DEFAULT. The occurrence of any of the following events
(each, an "Event of Default," and collectively the "Events of Default"),
whatever the reason for such Event of Default, and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body, shall entitle Administrative Agent to
exercise any and all of its rights and remedies hereunder or at law:
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4.1 The occurrence (whether as a result of acts or omissions by
the Pledged Portfolio Entity or any other Person) of an Event of Default (as
"Event of Default" is defined under the Credit Agreement or the respective
Credit Document) under the Credit Agreement or any of the other Credit
Documents; or
4.2 The failure on the part of Pledgor to observe or perform any
covenant contained in this Agreement on its part to be observed or performed,
and such failure shall continue unremedied for a period of 30 days after Pledgor
becomes aware thereof or receives written notice thereof from Administrative
Agent; provided, however, that, if (i) such failure cannot be cured within such
30 day period, (ii) such failure is susceptible of cure, (iii) Pledgor is
proceeding with diligence and in good faith to cure such failure, (iv) the
existence of such failure has not had and cannot after considering the nature of
the cure be reasonably expected to have a Material Adverse Effect on Borrower
and (v) Administrative Agent shall have received an officer's certificate signed
by a Responsible Officer of Pledgor to the effect of clauses (i), (ii), (iii)
and (iv) above and stating what action Pledgor is taking to cure such failure,
then such 30 day cure period shall be extended to such date, not to exceed a
total of 90 days, as shall be necessary for Pledgor diligently to cure such
failure; or
4.3 Any representation or warranty of Pledgor contained in this
Agreement shall contain an untrue or misleading statement of a material fact or
shall fail to state a material fact necessary to make the statements therein not
misleading as of the date made which could reasonably be expected to result in a
Material Adverse Effect on Borrower; or
4.4 The impairment of the priority of the security interest in the
Collateral granted herein.
5. REPRESENTATIONS AND WARRANTIES OF PLEDGOR. Pledgor represents and
warrants as follows as of the date hereof:
5.1 Pledgor (i) is a ____________ duly organized, validly existing
and in good standing under the laws of the State of Delaware with all requisite
corporate power and authority under the laws of such state to enter into the
Constituent Agreement and to perform its obligations thereunder and to
consummate the transactions contemplated thereby, (ii) is duly qualified,
authorized to do business and in good standing in each jurisdiction where the
character of its properties or the nature of its activities makes such
qualification necessary, [AND] (iii) has the power (A) to carry on its business
as now being conducted and as proposed to be conducted by it, (B) to execute,
deliver and perform each Operative Document to which it is a party, in its
individual capacity, (C) to take all action as may be necessary to consummate
the transactions contemplated thereunder, and (D) to grant the liens and
security interest provided for in this Agreement [AND (iv) [INSERT IF
CONSTITUENT DOCUMENTS GRANT PLEDGOR SIGNATORY POWERS] HAS THE POWER AND
AUTHORITY UNDER THE CONSTITUENT AGREEMENT TO EXECUTE AND DELIVER, ON BEHALF OF
THE PLEDGED PORTFOLIO ENTITY, EACH OPERATIVE DOCUMENT TO WHICH THE PLEDGED
PORTFOLIO ENTITY IS A PARTY].
5.2 Pledgor has the full right, power and authority to execute,
deliver and perform this Agreement and to pledge and assign the Collateral.
[INSERT IF PLEDGOR IS
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511
SOLE MEMBER, GENERAL PARTNER OR OTHERWISE CONTROLS PLEDGED PORTFOLIO ENTITY:
PLEDGOR HAS (i) TAKEN ALL NECESSARY ACTION TO AUTHORIZE THE EXECUTION, DELIVERY
AND PERFORMANCE OF THE CONSTITUENT AGREEMENT, THIS AGREEMENT AND EACH OTHER
OPERATIVE DOCUMENT TO WHICH THE PLEDGED PORTFOLIO ENTITY IS A PARTY; AND (ii)
DULY EXECUTED AND DELIVERED THE CONSTITUENT AGREEMENT, THIS AGREEMENT AND EACH
OPERATIVE DOCUMENT TO WHICH THE PLEDGED PORTFOLIO ENTITY IS A PARTY, IN EACH
CASE ON BEHALF OF THE PLEDGED PORTFOLIO ENTITY]. Neither Pledgor's execution and
delivery of any Operative Document nor its consummation of the transactions
contemplated thereby nor its compliance with the terms thereof (x) does or will
contravene the Constituent Agreement, the governing or other constituent
documents of Pledgor or any other Legal Requirement applicable to or binding on
Pledgor or any of its properties, or (y) does or will contravene or result in
any breach of or constitute any default under, or result in or require the
creation of any Lien (other than Permitted Liens) upon any of its property
under, any agreement or instrument to which it is a party or by which it or any
of its properties may be bound or affected.
5.3 The Constituent Agreement has been duly authorized, executed
and delivered by Pledgor, has not been amended or otherwise modified, is in full
force and effect, and is binding upon and enforceable against Pledgor in
accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
other similar laws affecting the enforcement of creditors' rights and by the
effect of general equitable principles. There exists no default under the
Constituent Agreement by Pledgor, or to the best of Pledgor's knowledge, by any
other party thereto that, with respect to such other party, could reasonably be
expected to have a Material Adverse Effect on Borrower or the Project directly
or indirectly owned by the Pledged Portfolio Entity.
5.4 No consent of any other party (including, without limitation,
any creditor, shareholder or partner of Pledgor) and no consent, authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required either (i) for the pledge by Pledgor of
the Collateral pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by Pledgor or (ii) for the exercise by the
Administrative Agent of the voting or other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this
Agreement (except as has been obtained or made or as may be required in
connection with disposition of any Collateral by laws affecting the offering and
sale of securities generally).
5.5 Pledgor is the lawful owner of and has full right, title and
interest in and to, its interest in the Pledged Portfolio Entity together with
the other rights and interests comprising the Collateral described above,
subject to no mortgages, liens, charges, or encumbrances of any kind except
Permitted Liens.
5.6 Pledgor has not previously assigned any of its rights under
the Constituent Agreement or any of the Collateral except as specifically
permitted by the Credit Documents.
5.7 Pledgor has not executed and is not aware of any effective
financing statement, security agreement or other instrument similar in effect
covering all or any part of the
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512
Collateral on file in any recording office, except such as may have been filed
pursuant to this Agreement and the other Credit Documents.
5.8 This Agreement is the legal, valid and binding obligation of
Pledgor, enforceable against Pledgor in accordance with its terms, except to the
extent that enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting the enforcement of
creditors' rights and by the effect of general equitable principles. Upon filing
the UCC-1 financing statements executed by Pledgor with respect to the
Collateral at the office of the Secretary of State for the States of Delaware
and __________ pursuant to this Agreement, the delivery of all certificates or
instruments representing or evidencing the Collateral and the execution of this
Agreement by the Pledged Portfolio Entity, Administrative Agent will have a
valid and perfected first priority security interest in the Collateral, securing
payment of the Obligations.
5.9 Pledgor is in compliance with all Legal Requirements
pertaining to it in connection with the Operative Documents to which it is a
party, the failure to comply with which could reasonably be expected to have a
Material Adverse Effect on Borrower or the Project owned directly or indirectly
by the Pledged Portfolio Entity, and no notices of violation of any Legal
Requirement or Operative Document relating to any Project or any Site have been
issued to or received by Pledgor.
5.10 Except as set forth on Exhibit G-7 to the Credit Agreement,
there are no pending or, to Pledgor's knowledge, threatened actions, suits,
proceedings or investigations of any kind, including actions or proceedings of
or before any Governmental Authority, relating to the Collateral or to which
Pledgor is a party or is subject, or by which it or its properties are bound
that, if adversely determined to or against Pledgor could reasonably be expected
to have a Material Adverse Effect on Borrower or the Project owned directly or
indirectly by the Pledged Portfolio Entity.
5.11 The financial statements of Pledgor delivered to the
Administrative Agent pursuant to Article 3 and Section 5.5 of the Credit
Agreement, if any, are, and, in the case of financial statements to be delivered
after the date hereof, will be, true, complete and correct in all material
respects as of the date of such statements and fairly present the financial
condition, results of operations and cash flow of Pledgor as of the date
thereof. Such financial statements have been prepared in accordance with GAAP.
5.12 Pledgor has filed all federal, state and local tax returns
that it is required to file, has paid all taxes it is required to pay to the
extent due (other than those taxes that it is contesting in good faith and by
appropriate proceedings, with adequate, reserves established for such taxes)
and, to the extent such taxes are not due, has established reserves that are
adequate for the payment thereof and are required by GAAP. Except as set forth
on Exhibit G-8 to the Credit Agreement, Pledgor has no knowledge of any past or
existing violations of any Environmental Laws by any Person relating in any way
to any Site, Improvements or Easements.
5.13 INSERT UNLESS PLEDGOR IS CALPINE CCFC II HOLDINGS, INC.]
[PLEDGOR HAS NOT CONDUCTED ANY BUSINESS OTHER THAN THE BUSINESS CONTEMPLATED BY
THE OPERATIVE DOCUMENTS;] Pledgor does not have any outstanding Debt or other
material liabilities
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other than pursuant to or allowed by the Operative Documents; Pledgor is not a
party to or bound by any material contract other than the Operative Documents to
which it is a party.
5.14 Neither Pledgor nor any of its Affiliates is an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
5.15 The chief executive offices of Pledgor are located at the
address set forth on Schedule 4.24 of the Credit Agreement with respect to
Pledgor.
5.16 Pledgor is not, and will not be, solely as a result of the
construction, ownership, leasing or operation of any Project owned directly or
indirectly by the Pledged Portfolio Entity, the sale of electricity therefrom or
the entering into any Operative Document or any transaction contemplated hereby
or thereby, subject to, or not exempt from, regulation under the FPA or PUHCA or
under state laws and regulations respecting the rates or the financial or
organizational regulation of electric utilities or will not be deemed by any
Governmental Authority having jurisdiction to be subject to financial,
organizational or rate regulation as an "electric utility," "electric
corporation," "electrical company," "public utility," "public utility holding
company" or any similar entity under any existing law, rule or regulation of any
Governmental Authority.
6. COVENANTS OF PLEDGOR. Pledgor covenants and agrees as follows:
6.1 Pledgor shall perform and comply with all obligations and
conditions on its part to be performed hereunder, under the Constituent
Agreement and with respect to the Collateral.
6.2 Pledgor shall, so long as any Obligations shall be
outstanding, defend its title to the Collateral and the interest of
Administrative Agent in the Collateral pledged hereunder against the claims and
demands of all persons whomsoever.
6.3 Pledgor shall not directly or indirectly create, incur, assume
or suffer to exist any liens on or with respect to any part of the Collateral
(other than the Lien created by this Agreement and other Permitted Liens).
6.4 Pledgor will not file or authorize or permit to be filed in
any jurisdiction any financing statements under the UCC or any like statement
relating to the Collateral in which Administrative Agent is not named as the
sole secured party.
6.5 Except as permitted by the Credit Agreement or this Agreement,
Pledgor will not cause, suffer or permit the sale, assignment, conveyance or
other transfer of all or any portion of Pledgor's ownership interest or
interests in the Pledged Portfolio Entity. As used herein, the transfer of an
ownership interest in the Pledged Portfolio Entity includes (i) the sale,
assignment, pledge, hypothecation, transfer or other disposition (voluntarily or
involuntarily, by gift or otherwise, and whether as security or otherwise) of an
equity interest in any Person substantially all of the assets of which consist
directly or indirectly of an interest in the Pledged
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Portfolio Entity, or (ii) the merger or consolidation of a Person referred to in
clause (i), with another Person.
6.6 Except as permitted by the Credit Agreement, Pledgor shall not
terminate, modify or amend the Constituent Agreement.
6.7 Pledgor shall give to Administrative Agent prompt notice of
(i) each material demand or notice received or given by it relating to the
Constituent Agreement; and (ii) any Default, Event of Default or event which
with the giving of notice or the passage of time or both might become an Event
of Default (as "Default" and "Event of Default" are defined in the Constituent
Agreement) under the Constituent Agreement, whether by the Pledged Portfolio
Entity, Pledgor or any other Person, of which Pledgor has knowledge or has
received notice.
6.8 If Pledgor in its capacity as an owner of the Pledged
Portfolio Entity receives any income or distribution of money or property of any
kind from the Pledged Portfolio Entity other than as permitted hereby or by
Section 7.2 of the Credit Agreement, Pledgor shall hold such income or
distribution as trustee for and shall deliver the same to Administrative Agent.
6.9 Pledgor will, at all times, keep accurate and complete records
of the Collateral. Pledgor shall permit representatives of Administrative Agent,
upon reasonable prior notice, at any time during normal business hours of
Pledgor to inspect and make abstracts from Pledgor's books and records
pertaining to the Collateral. Upon the occurrence and during the continuation of
any Event of Default, at Administrative Agent's request, Pledgor shall promptly
deliver copies of any and all such records to Administrative Agent.
6.10 Pledgor shall give Administrative Agent at least 45 days'
notice before it changes the location of its place of business, chief executive
office or state of organization and shall at the expense of the Pledged
Portfolio Entity execute and deliver such instruments and documents as may be
required by Administrative Agent to maintain a prior perfected security interest
in the Collateral.
7. REMEDIES UPON EVENT OF DEFAULT.
7.1 If any Event of Default has occurred and is continuing,
Administrative Agent shall have the right, at its election, but not the
obligation, to do any of the following: (i) in connection with any acceleration
and foreclosure, vote or exercise any and all of Pledgor's rights or powers
under the Constituent Agreement, including any rights or powers to manage or
control the Pledged Portfolio Entity; (ii) demand, ▇▇▇ for, collect or receive
any money or property at any time payable to or receivable by Pledgor on account
of or in exchange for all or any part of the Collateral; (iii) cause any action
at law or suit in equity or other proceeding to be instituted and prosecuted to
collect or enforce any Obligations or rights hereunder or included in the
Collateral, including specific enforcement of any covenant or agreement
contained herein or in the Constituent Agreement, or to foreclose or enforce the
security interest in all or any part of the Collateral granted herein, or to
enforce any other legal or equitable right vested in it by this Agreement or by
law; (iv) sell or otherwise dispose of all or any part of the Collateral or
cause all or any part of the Collateral to be sold or otherwise disposed of in
one or more sales or transactions, at such prices and in such manner as
Administrative Agent may deem appropriate,
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and for cash or on credit or for future delivery, without assumption of any
credit risk, at any broker's board or at public or private sale, without demand
of performance or notice of intention to sell or of time or place of sale
(except such notice which under applicable law cannot be waived) it being agreed
that Administrative Agent may be a purchaser on behalf of the Banks or on its
own behalf at any such sale and that Administrative Agent, any Bank or any other
Person who may be a bona fide purchaser for value and without notice of any
claims of any or all of the Collateral so sold shall thereafter hold the same
absolutely free from any claim or right of whatsoever kind, including any equity
of redemption, of Pledgor or the Pledged Portfolio Entity, any such demand,
notice or right and equity being hereby expressly waived and released; (v) incur
expenses, including reasonable attorneys' fees, reasonable consultants' fees,
and other costs appropriate to the exercise of any right or power under this
Agreement; (vi) perform any obligation of Pledgor hereunder or under the
Constituent Agreement; (vii) secure the appointment of a receiver for Pledgor
without notice to the Pledged Portfolio Entity or Pledgor; or (viii) exercise
any other or additional rights or remedies granted to a secured party under the
UCC. If, pursuant to applicable law, prior notice of any such action is required
to be given to Pledgor or the Pledged Portfolio Entity, Pledgor and the Pledged
Portfolio Entity hereby acknowledge and agree that the minimum time required by
such applicable law, or if no minimum is specified, of 10 Banking Days, shall be
deemed a reasonable notice period.
7.2 In addition to the foregoing remedies, Administrative Agent
may, but shall not be obligated to, cure any Event of Default and incur
reasonable fees, costs and expenses in doing so, in which event the Pledged
Portfolio Entity shall immediately reimburse Administrative Agent on demand for
all such fees, costs and expenses, together with interest thereon at the Default
Rate from the date incurred until the date repaid in full.
7.3 All costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) incurred by Administrative Agent in
connection with exercising any remedy provided for herein or at law, curing any
Event of Default or any Constituent Agreement Default, performing any of
Pledgor's agreements contained herein or in the Constituent Agreement or in
respect of any part of the Collateral, together with interest thereon (to the
extent permitted by law) computed at a rate per annum equal to the Default Rate
from the date on which such costs or expenses are incurred to the date of
payment thereof, shall constitute indebtedness secured by this Agreement and
shall be paid by the Pledged Portfolio Entity to Administrative Agent on demand.
7.4 If Administrative Agent shall decide to exercise its right to
sell any or all of the Collateral, and if in the opinion of counsel for the
Administrative Agent it is necessary to have such Collateral, or that portion
thereof to be sold, registered under the provisions of the Securities Act of
1933, as amended, or otherwise registered or qualified under any federal or
state securities laws or regulations (collectively, the "Securities Laws")
Pledgor and the Pledged Portfolio Entity will execute and deliver, all at
Pledgor's and the Pledged Portfolio Entity's expense, all such instruments and
documents which, in the opinion of Administrative Agent, are necessary to
register or qualify such Collateral, or that portion thereof to be sold, under
the provisions of the Securities Laws. Pledgor and the Pledged Portfolio Entity
will execute and will use best efforts to cause any registration statement
relating thereto to become effective and to remain effective for a period of not
less than six months from the date of the first public offering of such
Collateral, or that portion thereof to be sold, and to make all amendments
thereto and/or
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to any related prospectus or similar document which, in the reasonable opinion
of Administrative Agent, are necessary, all in conformity with the Securities
Laws applicable thereto. Without limiting the generality of the foregoing, the
Pledged Portfolio Entity agrees to comply with the provisions of the securities
or "Blue Sky" laws of any jurisdiction(s) which Administrative Agent shall
reasonably designate and to make available to its security holders, as soon as
practicable, an earnings statement which will satisfy the provisions of Section
11(a) of the Securities Act of 1933.
7.5 So long as no Event of Default has occurred and is continuing,
Pledgor reserves the right to exercise all of its rights under the Constituent
Agreement (except as limited by the Credit Documents) and to receive all income
and other distributions from the Collateral (except as limited by the Credit
Documents).
8. REMEDIES CUMULATIVE; DELAY NOT WAIVER.
8.1 No right, power or remedy herein conferred upon or reserved to
Administrative Agent or the Banks is intended to be exclusive of any other
right, power or remedy, and every such right, power and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right,
power and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy. Resort to any or all security now or hereafter held
by Administrative Agent, may be taken concurrently or successively and in one or
several consolidated or independent judicial actions or lawfully taken
nonjudicial proceedings, or both.
8.2 No delay or omission of Administrative Agent to exercise any
right or power accruing upon the occurrence and during the continuance of any
Event of Default as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or an acquiescence
therein. Every power and remedy given by this Agreement may be exercised from
time to time, and as often as shall be deemed expedient, by Administrative
Agent.
9. APPLICATION OF PROCEEDS. Upon the occurrence and during the
continuation of an Event of Default, the proceeds of any sale of or other
realization upon, all or any part of the Collateral shall be applied: first, to
all fees, costs and expenses incurred by and due and owing to Administrative
Agent and the Banks with respect to the Credit Agreement, the other Credit
Documents or the Collateral Documents; second, to accrued and unpaid interest on
the Obligations (including any interest which, but for the provisions of the
Bankruptcy Code, would have accrued on such amounts); third, to the principal
amounts of the Obligations outstanding; fourth, to any other Obligations of the
Pledged Portfolio Entity or Pledgor owing to Administrative Agent or the Banks;
and fifth, to or as directed by Pledgor.
10. CERTAIN CONSENTS AND WAIVERS.
10.1 [INSERT IF OTHER OWNERS OF PLEDGED PORTFOLIO ENTITY: PLEDGOR
HEREBY CONSENTS TO THE EXECUTION, BY THE OTHER PARTNER OR PARTNERS IN THE
PLEDGED PORTFOLIO ENTITY, OF AN AGREEMENT SIMILAR TO THIS AGREEMENT IN FAVOR OF
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ADMINISTRATIVE AGENT FOR THE BENEFIT OF ADMINISTRATIVE AGENT AND THE BANKS.
PLEDGOR SPECIFICALLY AGREES THAT SUCH OTHER AGREEMENT MAY, AMONG OTHER THINGS,
ASSIGN OR DELEGATE TO ADMINISTRATIVE AGENT RIGHTS TO CURE DEFAULTS UNDER THE
CONSTITUENT AGREEMENT, TO EXERCISE VOTING RIGHTS AND OTHER RIGHTS TO MANAGE OR
CONTROL THE PLEDGED PORTFOLIO ENTITY, AND TO ACT AS SUCH OTHER PARTNER'S
ATTORNEY IN FACT IN A MANNER SIMILAR TO THE ASSIGNMENT AND DELEGATION OF SUCH
RIGHTS PROVIDED HEREIN AND THAT PLEDGOR WILL RECOGNIZE AND ACCEPT SUCH
ASSIGNMENT AND DELEGATION AND THE EXERCISE OF SUCH RIGHTS BY ADMINISTRATIVE
AGENT IN CONNECTION WITH ANY ACTIONS BY OR BUSINESS OF THE PLEDGED PORTFOLIO
ENTITY.]
10.2 Pledgor hereby waives, to the maximum extent permitted by law
(i) all rights under any law limiting remedies, including recovery of a
deficiency, under an obligation secured by a mortgage or deed of trust on real
property if the real property is sold under a power of sale contained in the
mortgage, and all defenses based on any loss whether as a result of any such
sale or otherwise, of Pledgor's right to recover any amount from any Portfolio
Entity or any other Person, whether by right of subrogation or otherwise; (ii)
all rights under any law to require Administrative Agent to pursue any Portfolio
Entity or any other Person, any security which Administrative Agent may hold, or
any other remedy before proceeding against Pledgor; (iii) all rights of
reimbursement or subrogation, all rights to enforce any remedy that
Administrative Agent or the Banks may have against any Portfolio Entity or any
other Person, and all rights to participate in any security held by
Administrative Agent until the Obligations have been paid and the covenants of
the Credit Documents have been performed in full; (iv) all rights to require
Administrative Agent to give any notices of any kind, including, without
limitation, notices of nonpayment, nonperformance, protest, dishonor, default,
delinquency or acceleration, or to make any presentments, demands or protests,
except as set forth herein or expressly provided in the Credit Agreement; (v)
all rights to assert the bankruptcy or insolvency of any Portfolio Entity or any
other Person as a defense hereunder or as the basis for rescission hereof; (vi)
subject to Section 16 hereof, all rights under any law purporting to reduce
Pledgor's obligations hereunder if the Obligations are reduced; (vii) all
defenses based on the disability or lack of authority of any Portfolio Entity or
any other Person, the repudiation of the Credit Documents by any Portfolio
Entity or any other Person, the failure by Administrative Agent or the Banks to
enforce any claim against any Portfolio Entity or any other Person, or the
unenforceability in whole or in part of any Credit Documents; (viii) all
suretyship and guarantor's defenses generally; (ix) all rights to insist upon,
plead or in any manner whatever claim or take the benefit or advantage of, any
appraisal, valuation, stay, extension, marshaling of assets, redemption or
similar law, or exemption, whether now or at any time hereafter in force, which
may delay, prevent or otherwise affect the performance by Pledgor of its
obligations under, or the enforcement by Administrative Agent of, this
Agreement; (x) any requirement on the part of Administrative Agent or the holder
of any of the Notes to mitigate the damages resulting from any default; and (xi)
except as otherwise specifically set forth herein, all rights of notice and
hearing of any kind prior to the exercise of rights by Administrative Agent upon
the occurrence and during the continuation of an Event of Default to repossess
with judicial process or to replevy, attach or levy upon the Collateral. To the
extent permitted by law, Pledgor waives the posting of any bond otherwise
required of Administrative Agent in connection with any judicial process or
proceeding to obtain possession of, replevy, attach, or levy upon the
Collateral, to enforce any judgment or other security for the Obligations, to
enforce any judgment or other court order entered in favor of Administrative
Agent, or to enforce by specific performance, temporary restraining order,
preliminary or permanent injunction, this Agreement or any other agreement or
document
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between Pledgor, Administrative Agent and Banks. Pledgor further agrees that
upon the occurrence and during the continuation of an Event of Default under the
Credit Agreement, Administrative Agent may elect to nonjudicially or judicially
foreclose against any real or personal property security it holds for the
Obligations or any part thereof, or to exercise any other remedy against any
Portfolio Entity or any other Person, any security or any guarantor, even if the
effect of that action is to deprive Pledgor of the right to collect
reimbursement from any Portfolio Entity or any other Person for any sums paid by
Pledgor to Administrative Agent or any Bank.
10.3 If Administrative Agent may, under applicable law, proceed to
realize its benefits under any of the Credit Documents giving Administrative
Agent a Lien upon any Collateral, whether owned by any Portfolio Entity or by
any other Person, either by judicial foreclosure or by nonjudicial sale or
enforcement, Administrative Agent may, at its sole option, determine which of
its remedies or rights it may pursue without affecting any of the rights and
remedies of Administrative Agent under this Agreement. If, in the exercise of
any of such rights and remedies, Administrative Agent shall forfeit any of its
rights or remedies, including any right to enter a deficiency judgment against
any Portfolio Entity or any other Person, whether because of any applicable laws
pertaining to "election of remedies" or the like, Pledgor hereby consents to
such action by Administrative Agent and, to the extent permitted by applicable
law, waives any claim based upon such action, even if such action by
Administrative Agent shall result in a full or partial loss of any rights of
subrogation, indemnification or reimbursement which Pledgor might otherwise have
had but for such action by Administrative Agent or the terms herein. Any
election of remedies which results in the denial or impairment of the right of
Administrative Agent to seek a deficiency judgment against any of the parties to
any of the Credit Documents or Security Documents shall not, to the extent
permitted by applicable law, impair Pledgor's obligation hereunder. In the event
Administrative Agent shall bid at any foreclosure or trustee's sale or at any
private sale permitted by law or the Credit Documents, Administrative Agent may
bid all or less than the amount of the Obligations. To the extent permitted by
applicable law, the amount of the successful bid at any such sale, whether
Administrative Agent or any other party is the successful bidder, shall be
conclusively deemed to be the fair market value of the Collateral and the
difference between such bid amount and the remaining balance of the Obligations
shall be conclusively deemed to be the amount of the Obligations.
11. THE PLEDGED PORTFOLIO ENTITY'S CONSENT. The Pledged Portfolio Entity
hereby consents to the assignment of and grant of a security interest in the
Collateral to Administrative Agent and to the exercise by Administrative Agent
of all rights and powers assigned or delegated to Administrative Agent by
Pledgor hereunder, including, without limitation, the rights upon and during an
Event of Default to exercise Pledgor's voting rights and other rights under the
Constituent Agreement to manage or control the Pledged Portfolio Entity.
12. ATTORNEY-IN-FACT. Pledgor hereby irrevocably constitutes and
appoints Administrative Agent its true and lawful attorney-in-fact with full
power and authority in the place and stead of Pledgor and in the name of
Pledgor, Administrative Agent or otherwise, from time to time in the
Administrative Agent's discretion to take any action and to execute any
instrument to enforce all rights of Pledgor with respect to the Collateral,
including, without limitation, the right to ask, require, demand, receive and
give acquittance for any and all moneys and claims for money due and to become
due under or arising out of the Collateral; to elect
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remedies thereunder, to endorse any checks or other instruments or orders in
connection therewith; to vote, demand, receive and enforce Pledgor's rights with
respect to the Collateral; to give appropriate receipts, releases and
satisfactions for and on behalf of and in the name of Pledgor or, at the option
of Administrative Agent, in the name of Administrative Agent, with the same
force and effect as Pledgor could do if this Agreement had not been made; and to
file any claims or take any action or institute any proceedings in connection
therewith which Administrative Agent may reasonably deem to be necessary or
advisable; provided, however, Administrative Agent shall not exercise such
rights unless upon the occurrence and during the continuation of an Event of
Default. This power of attorney is a power coupled with an interest and shall be
irrevocable.
13. PERFECTION; FURTHER ASSURANCES.
13.1 Pledgor agrees that from time to time, at the expense of
Pledgor, Pledgor shall promptly execute and deliver all instruments and
documents, and take all action, that may be reasonably necessary, or that
Administrative Agent may reasonably request, in order to perfect and protect the
assignment and security interest granted or intended to be granted hereby or to
enable Administrative Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, Pledgor shall (i) deliver the Collateral or any part thereof to
Administrative Agent, as Administrative Agent may request, accompanied by such
duly executed instruments of transfer or assignment as Administrative Agent may
request, and (ii) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments, endorsements or notices, as may
be reasonably necessary or desirable or as Administrative Agent may reasonably
request, in order to perfect and preserve the assignments and security interests
granted or purported to be granted hereby.
13.2 Pledgor hereby authorizes Administrative Agent to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of Pledgor where
permitted by law.
13.3 Pledgor shall, promptly upon request, provide to
Administrative Agent all information and evidence it may reasonably request
concerning the Collateral to enable Administrative Agent to enforce the
provisions of this Agreement.
13.4 Pledgor and the Pledged Portfolio Entity shall pay all filing,
registration and recording fees and all refiling, re-registration and
re-recording fees, and all reasonable expenses incident to the execution and
acknowledgment of this Agreement, any assurance, and all federal, state, county
and municipal stamp taxes and other taxes, duties, imports, assessments and
charges arising out of or in connection with the execution and delivery of this
Agreement, any agreement supplemental hereto, any financing statements, and any
instruments of further assurance.
13.5 To the extent it may do so under applicable law, Pledgor, for
itself, its successors and assigns, agrees that it shall not cast any vote as an
owner in the Pledged Portfolio Entity (i) in favor of the commencement of a
voluntary case or other proceeding seeking liquidation, reorganization,
rehabilitation or other relief with respect to the Pledged Portfolio
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Entity or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect in any jurisdiction or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of the owners of the
Pledged Portfolio Entity or any substantial part of the Pledged Portfolio
Entity's property, (ii) to authorize the Pledged Portfolio Entity to consent to
any such aforesaid relief or to the appointment of or taking possession by any
such aforesaid official in an involuntary case or other proceeding commenced
against the Pledged Portfolio Entity or (iii) to authorize the Pledged Portfolio
Entity to make a general assignment for the benefit of creditors.
13.6 Pledgor will take all actions within its power to obtain like
title to and the right to pledge any other property at any time hereafter
pledged by it to Administrative Agent as Collateral hereunder.
13.7 Pledgor will pay, before any fine, penalty, interest or cost
attaches thereto, all taxes, assessments and other governmental or
non-governmental charges or levies (other than those taxes that it is contesting
in good faith and by appropriate proceedings, and in respect of which it has
established adequate, reserves for such taxes) now or hereafter assessed, levied
against the Collateral pledged by it hereunder (or against the Collateral in
which Pledgor has granted to Administrative Agent a security interest of first
priority) or upon the Liens for taxes and assessments not then delinquent or
subject to a contest and shall retain copies of, and, upon request, permit
Administrative Agent or any Bank to examine receipts showing payment of any of
the foregoing.
14. PLACE OF BUSINESS; LOCATION OF RECORDS. Unless Administrative Agent
is otherwise notified under Section 6.10, Pledgor's state of organization is and
will be the state of Delaware and the places of business and chief executive
offices of Pledgor are, and all records of Pledgor concerning the Collateral are
and will be, located at the address set forth on Schedule 4.24 of the Credit
Agreement with respect to Pledgor.
15. CONTINUING ASSIGNMENT AND SECURITY INTEREST; TRANSFER OF NOTES. This
Agreement shall create a continuing pledge and assignment of and security
interest in the Collateral and shall (a) remain in full force and effect until
payment in full of the Obligations; (b) be binding upon the Pledged Portfolio
Entity, Pledgor, and their respective successors and assigns; and (c) inure,
together with the rights and remedies of Administrative Agent, to the benefit of
Administrative Agent, the Banks and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing, Administrative Agent
or any of the Banks may assign or otherwise transfer all or any part of or
interest in the Notes or other evidence of indebtedness held by them to any
other Person to the extent permitted by and in accordance with the Credit
Agreement, and such other Person shall thereupon become vested with all or an
appropriate part of the benefits in respect thereof granted to the Banks herein
or otherwise. The release of the security interest in any or all of the
Collateral, the taking or acceptance of additional security, or the resort by
Administrative Agent to any security it may have in any order it may deem
appropriate, shall not affect the liability of any person on the indebtedness
secured hereby.
16. TERMINATION OF SECURITY INTEREST. Upon the indefeasible payment and
performance in full of the Obligations, this Agreement and the security interest
and all other
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rights granted hereby shall terminate and all rights to the Collateral shall
revert to Pledgor. Upon any such termination, Administrative Agent will return
all certificates evidencing ownership interests in the Pledged Portfolio Entity,
and all Ownership Powers executed hereunder, to Pledgor and will, at Pledgor's
expense, execute and, subject to Section 26 hereof, deliver to Pledgor such
documents (including, without limitation, UCC-3 termination statements) as the
Pledged Portfolio Entity or Pledgor shall reasonably request to evidence such
termination.
17. SECURITY INTEREST ABSOLUTE. All rights of Administrative Agent and
the Banks and the security interests hereunder, and all obligations of Pledgor
hereunder, shall be absolute and unconditional irrespective of:
17.1 Any lack of validity or enforceability of the Credit
Agreement, any Credit Documents or any other agreement or instrument relating
thereto;
17.2 Any change in the time, manner or place of payment of, or in
any other term of the Obligations (including any increase in the amount
thereof), or any other amendment or waiver of or any consent to any departure
from the Credit Agreement or any other Credit Document;
17.3 Any exchange, surrender, release or non-perfection of any
Collateral, or any release, amendment or waiver of or consent to departure from
any guaranty, for all or any of the Obligations;
17.4 Any bankruptcy or insolvency of Pledgor or any other Person;
or
17.5 Any other circumstance which might otherwise constitute a
defense available to, or a discharge of, Pledgor or a third party pledgor.
18. LIMITATION ON DUTY OF ADMINISTRATIVE AGENT WITH RESPECT TO THE
COLLATERAL. The powers conferred on Administrative Agent hereunder are solely to
protect its interest in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for monies actually received by it hereunder,
Administrative Agent shall have no duty with respect to any Collateral.
Administrative Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment that is substantially equivalent to that which
Administrative Agent accords its own property, it being expressly agreed, to the
maximum extent permitted by law, that Administrative Agent shall have no
responsibility for (a) taking any necessary steps to preserve rights against any
parties with respect to any Collateral, but Administrative Agent may do so and
all expenses incurred in connection therewith shall be part of the Obligations
or (b) taking any action to protect against any diminution in value of the
Collateral.
19. LIABILITY. Recourse against Pledgor and any other Portfolio Entity
and their respective Affiliates, members, partners, stockholders, officers,
directors and employees under this Agreement shall be limited to the extent
provided in Article 9 of the Credit Agreement.
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20. AMENDMENTS; WAIVERS; CONSENTS. No amendment, modification,
termination or waiver of any provision of this Agreement, or consent to any
departure by Pledgor therefrom, shall in any event be effective without the
written concurrence of Administrative Agent, the Pledged Portfolio Entity and
Pledgor.
21. NOTICES. All notices required or permitted under the terms and
provisions hereof shall be in writing and any such notice shall be effective if
given in accordance with the provisions of Section 12.1 of the Credit Agreement.
Notices to Administrative Agent may be given at the address set forth in such
Section 12.1. Notices to Pledgor or the Pledged Portfolio Entity may be given at
the following addresses:
_____________________
[ADDRESS]
or such other address as notified by a party pursuant to the terms hereof.
22. FINANCIAL STATUS. Pledgor hereby assumes responsibility for keeping
itself informed of the financial condition of each other Portfolio Entity and
any and all endorsers and/or other guarantors of any instrument or document
evidencing all or any part of the Obligations and of all other circumstances
bearing upon the risk of nonpayment of the Obligations or any part thereof that
diligent inquiry would reveal. Pledgor hereby agrees that Administrative Agent
shall have no duty to advise Pledgor of information known to Administrative
Agent regarding such condition or any such circumstances or of any changes or
potential changes affecting the Collateral. In the event Administrative Agent,
in its discretion, undertakes at any time or from time to time to provide any
such information to Pledgor, Administrative Agent shall be under any no
obligation (i) to undertake any investigation not a part of its regular business
routine, or reasonable commercial lending practices or (iii) to make any other
or future disclosure of such information to any other information to Pledgor.
23. MODIFICATION OF OBLIGATIONS. If Administrative Agent shall at any
time or from time to time, with or without the consent of, or notice to,
Pledgor:
23.1 Change or extend the manner, place or terms of payment of, or
renew or alter all or any portion of, the Obligations;
23.2 Take any action under or in respect of the Credit Documents in
the exercise of any remedy, power or privilege contained therein or available at
law, equity or otherwise, or waive or refrain from exercising any such remedies,
power or privileges;
23.3 Amend or modify, in any manner whatsoever, the Credit
Documents;
23.4 Extend or waive the time for Pledgor's, any other Portfolio
Entity's or any other Person's performance of, or compliance with, any term,
covenant or agreement on its part to be performed or observed under the Credit
Documents, or waive such performance or compliance or consent to a failure of,
or departure from, such performance or compliance;
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23.5 Take and hold security or collateral for the payment of the
Obligations, or sell, exchange, release, dispose of, or otherwise deal with, any
property pledged, mortgaged or conveyed, or in which Administrative Agent has
been granted a Lien, to secure any indebtedness associated with the Credit
Documents of Pledgor, any other Portfolio Entity or any other Person to
Administrative Agent;
23.6 Release or limit the liability of anyone who may be liable in
any manner for the payment of any amounts under the Credit Documents owed by
Pledgor, any other Portfolio Entity or any other Person to Administrative Agent;
23.7 Modify or terminate the terms of any intercreditor or
subordination agreement pursuant to which claims of other creditors of Pledgor,
any other Portfolio Entity or any other Person are subordinated to the claims of
Administrative Agent under the Credit Documents; or
23.8 Apply any sums by whomever paid or however realized to any
amounts owing pursuant to the Credit Documents by Pledgor, any other Portfolio
Entity or any other Person to Administrative Agent in such manner as
Administrative Agent shall determine in its discretion in accordance with the
Credit Documents;
then, subject to Section 16 hereof, neither Administrative Agent nor any Bank
shall incur any liability to Pledgor pursuant hereto as a result thereof and no
such action shall impair or release the obligations of Pledgor under this
Agreement.
24. DELIVERY OF COLLATERAL. All certificates or instruments representing
or evidencing the Collateral shall be delivered to and held by or on behalf of
Administrative Agent pursuant hereto. All such certificates or instruments shall
be in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance acceptable to Administrative Agent. Administrative Agent shall have
the right, at any time in its discretion and without prior notice to Pledgor,
following the occurrence and during the continuation of an Event of Default, to
transfer to or to register in the name of Administrative Agent or any of its
nominees any or all of the Collateral and to exchange certificates or
instruments representing or evidencing Collateral for certificates or
instruments of smaller or larger denominations; provided that Administrative
Agent shall promptly notify Pledgor of any such transfer or registration; but
the failure to provide such notice shall not invalidate the effectiveness of
such transfer or registration provided, further, that once such Event of Default
has been cured, Administrative Agent will promptly transfer to or register in
the name or cause its nominees to transfer to or register in the name Pledgor
all such Collateral. In furtherance of the foregoing, Pledgor shall further
execute and deliver to Administrative Agent an ownership power in the form of
Exhibit A attached hereto with respect to the ownership interest(s) of the
Pledged Portfolio Entity owned by Pledgor that are represented by certificates
or other instruments.
25. GOVERNING LAW. This Agreement, including all matters of
construction, validity, performance and the creation, validity, enforcement or
priority of the lien of, and security interests created by, this Agreement in or
upon the Collateral shall be governed by the laws of the state of New York,
without reference to conflicts of law (other than Section 5-1401 of the New
17
524
York General Obligations Law), except as required by mandatory provisions of law
and except to the extent that the validity or perfection of the lien and
security interest hereunder, or remedies hereunder, in respect of any particular
Collateral are governed by the laws of a jurisdiction other than the state of
New York.
26. REINSTATEMENT. This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any amount received by
Administrative Agent in respect of the Obligations is rescinded or must
otherwise be restored or returned by Administrative Agent upon the insolvency,
bankruptcy, reorganization, liquidation of Pledgor, the Member or any Portfolio
Entity (including the Pledged Portfolio Entity) or upon the dissolution of, or
appointment of any intervenor or conservator of, or trustee or similar official
for, Pledgor, the Member or any Portfolio Entity (including the Pledged
Portfolio Entity) or any substantial part of Pledgor's, the Member's or any
Portfolio Entities' (including the Pledged Portfolio Entity's) assets, or
otherwise, all as though such payments had not been made.
27. SEVERABILITY. The provisions of this Agreement are severable, and if
any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Agreement in any jurisdiction.
28. SURVIVAL OF PROVISIONS. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Agreement and the Credit Agreement and the making of the Loans and extensions of
credit thereunder. Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements, representations and warranties of Pledgor set
forth herein shall terminate only upon payment of the Obligations, and the
termination of all Commitments and other obligations of the Banks under the
Credit Documents.
29. HEADINGS DESCRIPTIVE. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
30. ENTIRE AGREEMENT. This Agreement, together with any other agreement
executed in connection herewith, is intended by the parties as a final
expression of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
31. TIME. Time is of the essence of this Agreement.
32. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
together constitute one and the same agreement.
33. ATTORNEYS' FEES. In the event any legal action or proceeding
(including, without limitation, any of the remedies provided for herein or at
law) is commenced to enforce or interpret this Agreement or any provision
hereof, unless Pledgor is the prevailing party, Pledgor shall indemnify each of
Administrative Agent and the Banks for their reasonable attorneys' fees and
other costs and expenses incurred therein, and if a judgment or award is entered
in any such
18
525
action or proceeding, such reasonable attorneys' fees and other costs and
expenses may be made a part of such judgment or award.
34. CONSENT TO JURISDICTION. The Banks and Pledgor agree that any legal
action or proceeding by or against Pledgor or with respect to or arising out of
this Agreement, or any other Credit Document or Security Document may be brought
in or removed to the courts of the State of New York, in and for the County of
New York, or of the United States of America for the Southern District of New
York, as Administrative Agent may elect. By execution and delivery of the
Agreement, the Banks and Pledgor accept, for themselves and in respect of their
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. The Banks and Pledgor irrevocably consent to the service of process out
of any of the aforementioned courts in any manner permitted by law. Nothing
herein shall affect the right of Administrative Agent to bring legal action or
proceedings in any other competent jurisdiction, including judicial or
non-judicial foreclosure. Notwithstanding the foregoing, service of process
shall not be deemed served or mailed to Administrative Agent or the Banks until
a copy of all matters to be served have be mailed to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇ or such
other Person as Administrative Agent or the Banks may hereafter designate by
notice given pursuant to Section 12.1 of the Credit Agreement. The Banks and
Pledgor further agree that the aforesaid courts of the State of New York and of
the United States of America shall have exclusive jurisdiction with respect to
any claim or counterclaim of Pledgor based upon the assertion that the rate of
interest charged by the Banks on or under this Agreement, the Loans and/or the
other Credit Documents is usurious. The Banks and Pledgor hereby waive any right
to stay or dismiss any action or proceeding under or in connection with any or
all of the Project, this Agreement or any other Credit Document or Security
Document brought before the foregoing courts on the basis of forum
non-conveniens.
35. WAIVER OF JURY TRIAL. PLEDGOR AND ADMINISTRATIVE AGENT HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP AMONG PLEDGOR AND
ADMINISTRATIVE AGENT THAT IS BEING ESTABLISHED. PLEDGOR AND ADMINISTRATIVE AGENT
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. PLEDGOR AND ADMINISTRATIVE AGENT FURTHER WARRANT AND REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
19
526
IN WITNESS WHEREOF, each of the undersigned has caused this Pledge
and Security Agreement (Pledged Equity Interests) to be duly executed and
delivered as of the day and year first above written.
___________________,
a Delaware _______________,
as Pledgor
By: ____________________________________
Name: _____________________________
Title: _____________________________
_______________________,
a Delaware ________________,
as Pledged Portfolio Entity
By: ____________________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch,
as Administrative Agent
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
527
EXHIBIT A
OWNERSHIP POWER
FOR VALUE RECEIVED, _____________________, a Delaware ______________,
hereby sells, assigns and transfers unto _______________________ all of its
ownership interest(s) of _________________, a Delaware ___________________,
standing in its name on the books of _______________________, a Delaware
________________________, represented by the following certificate(s): _______,
and irrevocably appoints ___________________ as attorney to transfer the
ownership interest(s) with full power of substitution in the premises.
DATED: ___________________________ _____________________,
a Delaware ___________________
By: ______________________________
Name:
Title:
In the presence of:
____________________________________
528
Exhibit D-9
to Credit Agreement
PLEDGE AND SECURITY AGREEMENT (PLEDGED EQUITY INTERESTS)
Dated as of __________, 200__
among
________________________,
a Delaware ________________
________________________,
a Delaware ________________
and
CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch
as Administrative Agent
529
TABLE OF CONTENTS
PAGE
----
1. Definitions................................................................2
2. Assignment, Pledge and Grant of Security Interest..........................2
3. Obligations Secured........................................................3
4. Events of Default..........................................................3
5. Representations and Warranties of Pledgor..................................4
6. Covenants of Pledgor.......................................................7
7. Remedies Upon Event of Default.............................................8
8. Remedies Cumulative; Delay Not Waiver.....................................10
9. Application of Proceeds...................................................10
10. Certain Consents and Waivers..............................................10
11. The Pledged Portfolio Entity's Consent....................................12
12. Attorney-in-Fact..........................................................12
13. Perfection; Further Assurances............................................13
14. Place of Business; Location of Records....................................14
15. Continuing Assignment and Security Interest; Transfer of Notes............14
16. Termination of Security Interest..........................................14
17. Security Interest Absolute................................................15
18. Limitation on Duty of Administrative Agent with Respect to
the Collateral............................................................15
19. Liability.................................................................15
20. Amendments; Waivers; Consents.............................................16
21. Notices...................................................................16
22. Financial Status..........................................................16
23. Modification of Obligations...............................................16
24. Delivery of Collateral....................................................17
25. Governing Law.............................................................17
26. Reinstatement.............................................................18
27. Severability..............................................................18
28. Survival of Provisions....................................................18
29. Headings Descriptive......................................................18
30. Entire Agreement..........................................................18
31. Time......................................................................18
32. Counterparts..............................................................18
33. Attorneys' Fees...........................................................18
34. Consent to Jurisdiction...................................................19
35. Waiver of Jury Trial......................................................19
EXHIBITS
Exhibit A -Ownership Power
i
530
EXHIBIT D-10
to Credit Agreement
FORM OF PORTFOLIO ENTITY NOTE
PORTFOLIO ENTITY NOTE
Note Number: ____ [Date]
FOR VALUE RECEIVED, the undersigned ("Payor") promises to pay to the
order of , a Delaware ("Payee"), on demand, in lawful money of the United States
of America, in immediately available funds and at the appropriate office of the
Payee, the aggregate unpaid principal amount of all loans and advances
heretofore and hereafter made by Payee to Payor as shown either on Schedule A
attached hereto (and any continuation thereof) or in the books and records of
Payee, including loans and advances made by Payee to Payor pursuant to Section
7.14 of the Credit Agreement (as defined below). Capitalized terms used herein
but not otherwise defined herein shall have the meanings ascribed such terms in
the Credit Agreement (the "Credit Agreement") dated as of October 16, 2000 among
________, as Borrower, the financial institutions listed on Exhibit H thereto
(the "Banks"), Credit Suisse First Boston, acting through its New York Branch,
as Lead Arranger and Administrative Agent ("Administrative Agent"), The Bank of
Nova Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of
America Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital
LLC, as Arranger and Co-Syndication Agent, Bayerische Landesbank Girozentrale,
as Arranger, Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as
Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America
Services LLC, as Arranger and Co-Documentation Agent and TD Securities (USA)
Inc., as Arranger and Co-Documentation Agent.
The unpaid principal amount hereof from time to time outstanding
shall bear interest at a rate equal to the rate as may be agreed upon from time
to time by Payor and Payee. Interest shall be due and payable at such times as
may be agreed upon from time to time by Payor and Payee. Upon demand for payment
of any principal amount hereof, accrued but unpaid interest on such principal
amount shall also be due and payable. Interest shall be paid in lawful money of
the United States of America and in immediately available funds. Interest shall
be computed for the actual number of days elapsed on the basis of a year
consisting of 365 or 366 days, as the case may be.
Payor hereby waives presentment, demand, protest and notice of any
kind. No failure to exercise, and no delay in exercising, any rights hereunder
on the part of the holder hereof shall operate as a waiver of such rights.
This Portfolio Entity Note has been pledged by Payee to
Administrative Agent for the benefit of the Banks, as security for Payee's
Obligations under the Credit Documents to which Payee is a party. Payor
acknowledges and agrees that Administrative Agent may exercise all the rights of
Payee under this Portfolio Entity Note and will not be subject to any abatement,
reduction, recoupment, defense, setoff or counterclaim available to Payor. Payor
and Payee each
531
agrees that until Payee's Obligations under the Credit Documents to which Payee
is a party have been performed and paid in full and the Credit Documents have
been terminated neither Payor nor Payee shall amend, modify, supplement or
waiver any provision of this Portfolio Entity Note.
Payee agrees that any and all claims of Payee against Payor or any
endorser of this Portfolio Entity Note, or against any of their respective
properties, shall be subordinate and subject in right of payment to the prior
performance and payment, in full and in cash, of all Obligations of Payor to
Administrative Agent pursuant to the Credit Documents to which Payor is a party;
provided, that Payor may make payments to Payee at any time or times when Payor
does not have any outstanding Obligations under the Credit Documents to which
Payor is a party which are then due and payable; provided, further, that all
such payments shall be received by Payee subject to the provisions of the Credit
Documents. Notwithstanding any right of Payee to ask, demand, ▇▇▇ for, take or
receive any payment from Payor, all rights, liens and security interests of
Payee, whether now or hereafter arising and howsoever existing, in any assets of
Payor shall be and hereby are subordinated to the rights of Administrative Agent
in those assets.
If all or any part of the assets of Payor, or the proceeds thereof,
are subject to any distribution, division or application to the creditors of
Payor, whether partial or complete, voluntary or involuntary, and whether by
reason of liquidation, bankruptcy, arrangement, receivership, assignment for the
benefit of creditors or any other action or proceeding, or if the business of
Payor is dissolved or if (except as expressly permitted by the Credit Documents)
substantially all of the assets of Payor are sold, then, and in any such event,
any payment or distribution of any kind or character, either in cash, securities
or other investment property or any other property whatsoever, which shall be
payable or deliverable upon or with respect to any Debt of Payor to Payee
("Payor Indebtedness") shall be paid or delivered directly to Administrative
Agent for application on any of the Obligations of Payor pursuant to the Credit
Documents to which Payor is a party, due or to become due, until such
Obligations shall have first been fully performed and paid. Payee irrevocably
authorizes and empowers Administrative Agent to demand, ▇▇▇ for, collect and
receive every such payment or distribution and give acquittance therefor and to
make and present for and on behalf of Payee such proofs of claim and take such
other action, in Administrative Agent's own name or in the name of Payee or
otherwise, as Administrative Agent may deem necessary or advisable for the
enforcement of this Portfolio Entity Note. Administrative Agent may vote such
proofs of claim in any such proceeding, receive and collect any and all
dividends or other payments or disbursements made on Payor Indebtedness in
whatever form the same may be paid or issued and apply the same on account of
any of Payor's Obligations pursuant to the Credit Documents to which Payor is a
party.
Recourse under this Note shall be limited as provided in Article 9
of the Credit Agreement.
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS PORTFOLIO
ENTITY NOTE AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS
SUBORDINATED PROMISSORY NOTE, WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR
OTHERWISE, SHALL BE GOVERNED
2
532
BY THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) OF THE
STATE OF NEW YORK.
[Signature Page Follows]
3
533
IN WITNESS WHEREOF, Payor has caused this Portfolio Entity Note to
be executed and delivered by its proper and duly authorized officer as of the
date set forth above.
"PAYOR"
[NAME]
By_______________________________________
Name_____________________________________
Title:___________________________________
4
534
SCHEDULE A
----------
TRANSACTIONS
ON
PORTFOLIO ENTITY NOTE
Outstanding
Amount of Principal
Amount of Principal Balance from
Advance Paid Payor to Payee Notation
Date This Date This Date This Date Made By
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5
535
ENDORSEMENT
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and
transfer to ___________________________ all of its right, title and interest in
and to the Portfolio Entity Note dated _______________, made by _______________
_____________________________________, and payable to the undersigned. This
endorsement is intended to be attached to the Portfolio Entity Note and, when so
attached, shall constitute an endorsement thereof.
Dated: ________________
____________________________________________,
___, a Delaware __________
By: _____________________________
Name:
Title:
536
EXHIBIT E-1
to Credit Agreement
================================================================================
FORM OF
CONSENT AND AGREEMENT
[(CONTRACT)]
Dated as of _________, 200_
by
[CONTRACTING PARTY]
================================================================================
537
FORM OF CONSENT AND AGREEMENT
This FORM OF CONSENT AND AGREEMENT (this "Consent"), dated as of
___________, 200_ is executed by [CONTRACTING PARTY], a _______________
corporation (the "Undersigned"), and [NAME OF RELEVANT PROJECT OWNER OR TURBINE
OWNER], a Delaware [TYPE OF ENTITY] ("Owner"), for the benefit of CREDIT SUISSE
FIRST BOSTON, acting through its New York Branch, as Administrative Agent
("Administrative Agent") for the Banks under the Credit Agreement (as defined
below).
RECITALS
A. Calpine Construction Finance Company II, LLC, a Delaware limited
liability company ("Borrower"), has entered into that certain Credit Agreement,
dated as of October 16, 2000 (the "Credit Agreement"), by and among Borrower,
the financial institutions listed on Exhibit H thereto (the "Banks"), Credit
Suisse First Boston, acting through its New York Branch, as Lead Arranger and
Administrative Agent ("Administrative Agent"), The Bank of Nova Scotia, as Lead
Arranger, Co-Syndication Agent and Bookrunner, Banc of America Securities LLC,
as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and
Co-Syndication Agent, Bayerische Landesbank Girozentrale, as Arranger,
Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as Arranger and
Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as
Arranger and Co-Documentation Agent and TD Securities (USA) Inc., as Arranger
and Co-Documentation Agent. Unless otherwise defined, all terms used herein
which are defined in the Credit Agreement, shall have their respective meanings
as used therein.
B. The Undersigned and Owner have entered into that certain [CONTRACT]
dated as of ________, 200_ (as amended, supplemented or modified from time to
time in accordance with its terms and the terms hereof, the "Contract"), with
respect to the [NAME OF PROJECT] Project (the "Project"). [IF CONTRACT ENTERED
INTO BY A TURBINE OWNER, THIS RECITAL AND OTHER RELEVANT PROVISIONS TO BE
AMENDED ACCORDINGLY]
C. [IF PROJECT OWNER CONSENT] [OWNER AND ADMINISTRATIVE AGENT ON BEHALF
OF THE BANKS HAVE ENTERED INTO THE PROJECT OWNER GUARANTY DATED AS OF _________,
200__ (THE "GUARANTY") PURSUANT TO WHICH OWNER HAS GUARANTEED THE OBLIGATIONS OF
EACH OF THE OTHER PORTFOLIO ENTITIES UNDER THE CREDIT DOCUMENTS, INCLUDING
BORROWER'S OBLIGATIONS UNDER THE CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS
TO WHICH BORROWER IS A PARTY.
D. PURSUANT TO THE PROJECT/TURBINE OWNER SECURITY AGREEMENT DATED AS OF
_____________, 200__ (THE "SECURITY AGREEMENT"), BETWEEN OWNER AND
ADMINISTRATIVE AGENT, OWNER HAS ASSIGNED ITS INTEREST UNDER THE CONTRACT TO
ADMINISTRATIVE AGENT ON BEHALF OF THE BANKS AS SECURITY FOR OWNER'S OBLIGATIONS
UNDER THE GUARANTY AND THE OTHER CREDIT DOCUMENTS TO WHICH IT IS A PARTY.]
538
[IF TURBINE OWNER CONSENT] [PURSUANT TO THE PROJECT/TURBINE OWNER SECURITY
AGREEMENT DATED AS OF _____________, 200__ (THE "SECURITY AGREEMENT"), BETWEEN
OWNER AND ADMINISTRATIVE AGENT, OWNER HAS ASSIGNED ITS INTEREST UNDER THE
CONTRACT TO ADMINISTRATIVE AGENT ON BEHALF OF THE BANKS AS SECURITY FOR THE
OBLIGATIONS OF EACH OF THE OTHER PORTFOLIO ENTITIES UNDER THE CREDIT DOCUMENTS,
INCLUDING BORROWER'S OBLIGATIONS UNDER THE CREDIT AGREEMENT AND THE OTHER CREDIT
DOCUMENTS TO WHICH BORROWER IS A PARTY.]
[IF CONTRACT ENTERED INTO BY AN EQUIPMENT FINANCE COMPANY, THIS RECITAL AND
OTHER RELEVANT PROVISIONS TO BE AMENDED ACCORDINGLY]
AGREEMENT
NOW THEREFORE, the Undersigned hereby agrees as follows:
1. The Undersigned acknowledges receipt of the Security Agreement and
consents to the Owner's transfer, assignment, grant of a security interest and
all other provisions described therein, and agrees with Administrative Agent for
the benefit of the Banks as follows:
(a) Administrative Agent shall be entitled (but not obligated)
to exercise all rights and to cure any defaults of Owner under the Contract.
Upon receipt of notice from Administrative Agent, the Undersigned agrees to
accept such exercise and cure by Administrative Agent and to render all
performance due by it under the Contract and this Consent to the Banks. The
Undersigned agrees to make all payments to be made by it under the Contract
directly to Administrative Agent for the benefit of the Banks upon receipt of
Administrative Agent's written instructions.
(b) The Undersigned will not, without the prior written
consent of Administrative Agent (such consent not to be unreasonably withheld),
(i) cancel or terminate the Contract or suspend performance of its services
thereunder except as provided in the Contract and in accordance with paragraph
1(c) hereof, or consent to or accept any cancellation, termination or suspension
thereof by Owner, (ii) sell, assign or otherwise dispose (by operation of law or
otherwise) of any part of its interest in the Contract, or (iii) amend or modify
the Contract in any material respect. The Undersigned agrees to deliver
duplicates or copies of all notices of default delivered under or pursuant to
the Contract to Administrative Agent promptly upon receipt or delivery thereof.
(c) The Undersigned will not terminate the Contract on account
of any default or breach of Owner thereunder without written notice to
Administrative Agent and first providing to Administrative Agent (i) thirty (30)
days from the date notice of default or breach is delivered to Administrative
Agent to cure such default if such default is the failure to pay amounts to the
Undersigned which are due and payable under the Contract or (ii) a reasonable
opportunity, but not fewer than ninety (90) days, to cure such breach or default
if the breach or default cannot be cured by the payment of money to the
Undersigned so long as Administrative Agent or its designee shall have commenced
to cure the breach or default within such ninety (90)-day period and thereafter
diligently pursues such cure to completion and continues to perform any monetary
obligations under the Contract
2
539
and all other obligations under the Contract are performed by Owner or
Administrative Agent. If possession of the Project is necessary to cure such
breach or default, and Administrative Agent or its designee(s) or assignee(s)
declare Owner in default and commence foreclosure proceedings, Administrative
Agent or its designee(s) or assignee(s) will be allowed a reasonable period to
complete such proceedings. If Administrative Agent or its designee(s) or
assignee(s) are prohibited by any court order or bankruptcy or insolvency
proceedings from curing the default or from commencing or prosecuting
foreclosure proceedings, the foregoing time periods shall be extended by the
period of such prohibition. The Undersigned consents to the transfer of Owner's
interest under the Contract to the Banks or any of them or a purchaser or
grantee at a foreclosure sale by judicial or nonjudicial foreclosure and sale or
by a conveyance by Owner in lieu of foreclosure and agrees that upon such
foreclosure, sale or conveyance, the Undersigned shall recognize the Banks or
any of them or other purchaser or grantee as the applicable party under the
Contract (provided that such Banks or purchaser or grantee assumes the
obligations of Owner under the Contract).
(d) In the event that the Contract is rejected by a trustee or
debtor-in-possession in any bankruptcy or insolvency proceeding, or if the
Contract is terminated for any reason other than a default which could have been
but was not cured by Administrative Agent as provided in paragraph 1(c) above,
and if, within forty-five (45) days after such rejection or termination, the
Banks or their successors or assigns shall so request, the Undersigned will
execute and deliver to the Banks a new Contract, which Contract shall be on the
terms and conditions as the original Contract for the remaining term of the
Contract before giving effect to such termination.
(e) In the event the Banks or their designee(s) or assignee(s)
elect to perform Owner's obligations under the Contract or to enter into a new
Contract as provided in subparagraph (c) or (d) respectively above, the Banks,
their designee(s) and assignee(s), shall have no personal liability to the
Undersigned for the performance of such obligations, and the sole recourse of
the Undersigned in seeking the enforcement of such obligations shall be to such
parties' interest in the Project.
(f) In the event the Banks or their designee(s) or assignee(s)
succeed to Owner's interest under the Contract or enter into a new Contract, the
Banks or their designee(s) or assignee(s) shall cure any defaults for failure to
pay amounts owed under the Contract, but shall not otherwise be required to
perform or be subject to any defenses or offsets by reason of any of Owner's
other obligations under the Contract that were unperformed at such time. The
Banks shall have the right to assign all or a pro rata interest in the Contract
or a new Contract entered into pursuant to subparagraph (d) to [IF CONSENT
RELATED TO A FUNDED PROJECT: a person or entity to whom the Project is
transferred][IF CONSENT RELATED TO A TURBINE FUNDING: any person or entity],
provided such transferee assumes the obligations of Owner (or the Banks) under
the Contract. Upon such assignment, Administrative Agent and, if applicable, the
Banks (including their Administrative Agents and employees) shall be released
from any further liability thereunder to the extent of the interest assigned.
(g) The warranties provided by the Undersigned under the
Contract shall continue in full force and effect (until the expiration of the
warranty periods set forth in the
3
540
Contract) in the event that the Banks or their designee(s) or assignee(s)
succeed to Owner's interest in the Contract (whether by foreclosure, sale or
other assignment) and upon the further assignment or sale of the Contract by the
Banks or their designee(s) or assignee(s).
[(h) The Undersigned hereby assigns to Owner (and Owner's
assigns) all its interest in any subcontracts and purchase orders in excess of
$____________ now existing or hereinafter entered into by the Undersigned for
performance of any part of the Undersigned's obligations under the Contract (the
"Subcontracts"). Such assignment shall be effective only upon the occurrence of
a breach or default (after the expiration of any applicable cure period) by the
Undersigned under the Contract or upon the termination of the Contract, and then
only as to those Subcontracts which Owner (or its assigns) at such time accepts
in writing. The Undersigned hereby further assigns to Owner (and Owner's
assigns) all of its rights with respect to any warranties under all
Subcontracts. Each Subcontract hereinafter entered into by the Undersigned shall
contain a consent by the subcontractor thereunder to the foregoing assignments
set forth in this Section 1(h).]
2. The Undersigned hereby represents and warrants that:
(a) The execution, delivery and performance by the Undersigned
of the Contract and this Consent has been duly authorized by all necessary
corporate action, and does not and will not require any further consents or
approvals which have not been obtained, or violate any provision of any law,
regulation, order, judgment, injunction or similar matters or breach any
agreement presently in effect with respect to or binding on the Undersigned;
(b) This Consent and the Contract are legal, valid and binding
obligations of the Undersigned, enforceable against the Undersigned in
accordance with their respective terms;
(c) All government approvals necessary for the execution,
delivery and performance by the Undersigned of its obligations under the
Contract have been obtained and are in full force and effect;
(d) As of the date hereof, the Contract is in full force and
effect and has not been amended, supplemented or modified;
(e) Owner has fulfilled all of its obligations under the
Contract, and there are no breaches or unsatisfied conditions presently existing
(or which would exist after the passage of time and/or giving of notice) that
would allow the Undersigned to terminate the Contract; and
(f) The Contract constitutes the only agreement between the
Undersigned and Owner with respect to the matters and interests described
therein.
3. [THE UNDERSIGNED ACKNOWLEDGES THAT OWNER HAS SUCCEEDED BY ASSIGNMENT
TO THE INTERESTS, RIGHTS, DUTIES, OBLIGATIONS AND LIABILITIES OF ______________
IN THE CONTRACT, AND HEREBY CONSENTS TO SUCH ASSIGNMENT.]
4
541
4. All Notices required or permitted hereunder shall be in writing and
shall be effective (a) upon receipt if hand delivered, (b) upon receipt if sent
by facsimile and (c) if otherwise delivered, upon the earlier of receipt or two
(2) Banking Days after being sent registered or certified mail, return receipt
requested, with proper postage affixed thereto, or by private courier or
delivery service with charges prepaid, and addressed as specified below:
If to the Undersigned:
______________________________
______________________________
______________________________
Telecopy No: ________________
Telephone No: _______________
If to Administrative Agent:
Credit Suisse First Boston,
New York Branch
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Portfolio Management
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Owner:
[NAME OF OWNER]
[REGIONAL OFFICE]
Attn: Asset Optionization
Telecopy No: ________________
Telephone No: _______________
[NAME OF OWNER]
c/o Calpine Corporation
▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Asset Management
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
5. This Consent shall be binding upon and inure to the benefit of the
Undersigned, the Owner, the Banks and their respective successors, transferees
and assigns (including without limitation, any entity that refinances all or any
portion of the Obligations under the Credit Agreement). The Undersigned agrees
to confirm such continuing obligation in writing upon the reasonable request of
Owner, the Banks or any of their respective successors,
5
542
transferees or assigns. No termination, amendment, variation or waiver of any
provisions of this Consent shall be effective unless in writing and signed by
the Undersigned, Administrative Agent and Owner. This Consent shall be governed
by the internal laws of the State of [PROJECT LOCATION], without reference to
principles of conflict of laws.
6. This Consent may be executed in one or more duplicate counterparts,
and when executed and delivered by all the parties listed below, shall
constitute a single binding agreement.
7. All references in this Consent to any document, instrument or
agreement (a) shall include all exhibits, schedules and other attachments
thereto, (b) shall include all documents, instruments or agreements issued or
executed in replacement thereof, and (c) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, modified and
supplemented from time to time and in effect at any given time.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
6
543
IN WITNESS WHEREOF, the Undersigned by its officer thereunto duly
authorized, has duly executed this Consent as of the date first set forth above.
[THE UNDERSIGNED] a _______________
corporation
By _________________________________
Name:
Title:
Accepted and agreed to:
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
as Administrative Agent for Banks
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
[NAME OF PROJECT/TURBINE OWNER]
[TYPE OF ENTITY]
By: ___________________________
Name:
Title:
7
544
EXHIBIT F-1
to Credit Agreement
BORROWER'S CLOSING CERTIFICATE
Pursuant to the Credit Agreement (as defined below), the undersigned
hereby certifies on this __ day of _____ 2000 to Credit Suisse First Boston,
acting through its New York Branch, as Administrative Agent under that certain
Credit Agreement dated as of October 16, 2000 (the "Credit Agreement") among
Calpine Construction Finance Company II, LLC, a Delaware limited liability
company, as Borrower ("Borrower"), the financial institutions listed on Exhibit
H thereto, (the "Banks"), Credit Suisse First Boston, acting through its New
York Branch, as Lead Arranger and Administrative Agent ("Administrative Agent"),
The Bank of Nova Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner,
Banc of America Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.)
Capital LLC, as Arranger and Co-Syndication Agent, Bayerische Landesbank
Girozentrale, as Arranger, Co-Documentation Agent and LC Bank, CIBC World
Markets Corp., as Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇
North America Services LLC, as Arranger and Co-Documentation Agent and TD
Securities (USA) Inc., as Arranger and Co-Documentation Agent, that:
1. No Portfolio Entity is and, to Borrower's knowledge, no other party
to any Operative Document in existence as of the Closing Date is, or, but for
the passage of time or the giving of notice or both will be, in breach of any
obligation thereunder which could reasonably expected to have a Material Adverse
Effect on Borrower.
2. Each representation and warranty of the Member, Calpine and the
Portfolio Entities under the Credit Documents is true and correct in all
material respects as of the Closing Date.
3. There exists no Event of Default or Inchoate Default or, with
respect to any Initial Project, Non-Fundamental Project Default or
Non-Fundamental Project Inchoate Default as of the Closing Date.
4. The conditions precedent set forth in Section 3.1 of the Credit
Agreement have been satisfied or have been waived in writing by Administrative
Agent with the consent of the Banks.
5. The copies of the annual and quarterly financial statements of the
Portfolio Entities delivered by Borrower pursuant to Section 3.1.12 of the
Credit Agreement are true and correct in all material respects and are the most
recent annual and quarterly financial statements of the Member, Calpine and the
Portfolio Entities. As of the Closing Date, no material adverse change in the
consolidated assets, liabilities, operations or financial condition of the
Member, Calpine and the Portfolio Entities has occurred from those set forth on
such financial statements, or the balance sheet, as the case may be.
All capitalized terms used herein which are defined in the Credit
Agreement shall have the meaning given to them in the Credit Agreement unless
otherwise defined herein.
545
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
on behalf of the Borrower as of the date first written above.
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By: _________________________________
Name:
Title:
546
EXHIBIT F-2
to Credit Agreement
BORROWER'S PROJECT FUNDING CERTIFICATE
Pursuant to the Credit Agreement (as defined below), the undersigned
hereby certifies on this __ day of _____ 2000 to Credit Suisse First Boston,
acting through its New York Branch, as Administrative Agent under that certain
Credit Agreement dated as of October 16, 2000 (the "Credit Agreement") among
Calpine Construction Finance Company II, LLC, a Delaware limited liability
company, as Borrower ("Borrower"), the financial institutions listed on Exhibit
H thereto, (the "Banks"), Credit Suisse First Boston, acting through its New
York Branch, as Lead Arranger and Administrative Agent ("Administrative Agent"),
The Bank of Nova Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner,
Banc of America Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.)
Capital LLC, as Arranger and Co-Syndication Agent, Bayerische Landesbank
Girozentrale, as Arranger, Co-Documentation Agent and LC Bank, CIBC World
Markets Corp., as Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇
North America Services LLC, as Arranger and Co-Documentation Agent and TD
Securities (USA) Inc., as Arranger and Co-Documentation Agent, that:
1. Attached hereto are true, complete and correct copies of each
Project Document in existence with respect to the _______ Project (the
"Project") as of the Funding Date, and any supplements or amendments thereto,
and such Project Documents are in full force and effect in accordance with their
terms and all conditions precedent to the respective parties' performances
thereunder required to have been performed by the Funding Date have been
satisfied.
2. No Portfolio Entity is and, to Borrower's knowledge, no other party
to any Operative Document in existence as of the Funding Date is, or, but for
the passage of time or the giving of notice or both will be, in breach of any
obligation thereunder which is reasonably expected to have Material Adverse
Effect on Borrower or the Project.
3. Each representation and warranty of Borrower, the Portfolio Entities
with respect to the Project, the Member, Calpine and the Non-Affiliated Parents
with respect to the Project, if any, and under the Credit Documents and each
representation and warranty of Borrower and the Project Owner with respect to
such Project under the other Operative Documents, in each case with respect to
itself or the Project, are true and correct in all material respects as if made
on the Funding Date, unless such representation or warranty expressly relates
solely to another time.
4. There exists no Event of Default or Inchoate Default or, with
respect to any Initial Project or Funded Subsequent Project, Non-Fundamental
Project Default or Non-Fundamental Project Inchoate Default as of the Closing
Date.
5. The conditions precedent set forth in Section [3.2] [3.3] of the
Credit Agreement have been satisfied or have been waived in writing by
[ADMINISTRATIVE AGENT WITH THE CONSENT OF THE BANKS][THE TECHNICAL COMMITTEE].
547
6. The copies of the annual and quarterly financial statements of the
Project Owner and the Affiliated Major Project Participants delivered by
Borrower pursuant to Section [3.2.22] [3.3.23] of the Credit Agreement are true
and correct in all material respects and are the most recent annual and
quarterly financial statements of the relevant Project Owner and the Affiliated
Major Project Participants. As of the Funding Date, no material adverse change
in the consolidated assets, liabilities, operations or financial condition of
such Persons has occurred from those set forth on such financial statements or
balance sheet, as the case may be.
7. Each Applicable Permit listed in Part 1(A) of the Permit Schedule
with respect to the Project is in full force and effect, and except as disclosed
therein, is not subject to appeals or further proceedings or to any unsatisfied
condition that could reasonably be expected to have a Material Adverse Effect on
Borrower or the Project. Borrower has no reason to believe that any Permit
identified in Part II(A) of such Permit Schedule will be obtained at a cost
inconsistent with the applicable Project Budget or with material difficulty or
delay by the time they are needed except where there exists alternative
solutions (the expected cost of which is reflected in the Project Budget) which
will eliminate the need for such Permit.
All capitalized terms used herein which are defined in the Credit
Agreement shall have the meaning given to them in the Credit Agreement unless
otherwise defined herein.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
2
548
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
on behalf of the Borrower as of the date first written above.
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By: ________________________________
Name:
Title:
549
EXHIBIT F-3
to Credit Agreement
BORROWER'S TURBINE FUNDING CERTIFICATE
Pursuant to the Credit Agreement (as defined below), the undersigned
hereby certifies on this __ day of _____ 2000 to Credit Suisse First Boston,
acting through its New York Branch, as Administrative Agent under that certain
Credit Agreement dated as of October 16, 2000 (the "Credit Agreement") among
Calpine Construction Finance Company II, LLC, a Delaware limited liability
company, as Borrower ("Borrower"), the financial institutions listed on Exhibit
H thereto, (the "Banks"), Credit Suisse First Boston, acting through its New
York Branch, as Lead Arranger and Administrative Agent ("Administrative Agent"),
The Bank of Nova Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner,
Banc of America Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.)
Capital LLC, as Arranger and Co-Syndication Agent, Bayerische Landesbank
Girozentrale, as Arranger, Co-Documentation Agent and LC Bank, CIBC World
Markets Corp., as Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇
North America Services LLC, as Arranger and Co-Documentation Agent and TD
Securities (USA) Inc., as Arranger and Co-Documentation Agent, that:
1. Attached hereto is a true, complete and correct copy of the Turbine
Purchase Contract with respect to the relevant Turbine (the "Turbine"), and any
supplements or amendments thereto, and such Turbine Purchase Contract is in full
force and effect in accordance with its terms and all conditions precedent to
the parties' performances thereunder required to have been performed by the
Turbine Funding Date have been satisfied.
2. No Portfolio Entity is and, to Borrower's knowledge, no other party
to any Operative Document in existence as of the Turbine Funding Date is, or,
but for the passage of time or the giving of notice or both will be, in breach
of any obligation thereunder which is reasonably expected to have Material
Adverse Effect on Borrower. Neither the Turbine Owner with respect to the
Turbine nor, to Borrower's knowledge, the relevant Turbine Purchase Contractor
is or, but for the passage of time or giving of notice or both will be, in the
breach of any material obligation under the relevant Turbine Purchase Contract.
3. Each representation and warranty of the Member, Calpine and the
Portfolio Entities with respect to such Turbine under the Credit Documents and
each representation and warranty of the Borrower and Turbine Owner with respect
to such Turbine under the relevant Turbine Purchase Contract, in each case with
respect to itself or the Turbine, shall be true and correct in all material
respects as if made on the Turbine Funding Date, unless such representation or
warranty expressly relates solely to another time.
4. There exists no Event of Default or Inchoate Default.
5. The conditions precedent set forth in Section 3.5 of the Credit
Agreement have been satisfied or have been waived in writing by Administrative
Agent with the consent of the Banks.
550
6. The Turbine is owned by _____, the Turbine Owner with respect to the
Turbine, and the Turbine Delivery Date with respect to the Turbine is _____.
All capitalized terms used herein which are defined in the Credit
Agreement shall have the meaning given to them in the Credit Agreement unless
otherwise defined herein.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
2
551
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
on behalf of the Borrower as of the date first written above.
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC,
a Delaware limited liability company
By: ________________________________
Name:
Title:
552
EXHIBIT F-4
to Credit Agreement
[▇▇▇▇▇ USA INC. LETTERHEAD]
______, 200_
Credit Suisse First Boston,
New York Branch,
as Administrative Agent for the Banks
Eleven Madison Avenue
New York, New York 10010
Attn: Manager, Project Finance
Re: The _______ Project (the "Project")
Ladies and Gentlemen:
The undersigned, a duly authorized officer of ▇▇▇▇▇ USA, Inc., a
Delaware corporation ("Insurance Consultant"), hereby provides this letter to
you in accordance with Section [3.2.10] [3.3.11] of that certain Credit
Agreement dated as of October 16, 2000 (the "Credit Agreement"), among Calpine
Construction Finance Company II, LLC, a Delaware limited liability company, as
Borrower ("Borrower"), the financial institutions listed on Exhibit H thereto
(the "Banks"), Credit Suisse First Boston, acting through its New York Branch,
as Lead Arranger and Administrative Agent ("Administrative Agent"), The Bank of
Nova Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of
America Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital
LLC, as Arranger and Co-Syndication Agent, Bayerische Landesbank Girozentrale,
as Arranger, Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as
Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America
Services LLC, as Arranger and Co-Documentation Agent and TD Securities (USA)
Inc., as Arranger and Co-Documentation Agent. Except as provided herein, all
terms used herein which are defined in the Credit Agreement shall have the
meanings given therein.
Insurance Consultant acknowledges that pursuant to the Credit
Agreement, the Banks will be providing financing to Borrower for, among other
things, the construction of the Project and in so doing will be relying on this
certificate and the Insurance Consultant's report dated _________. Such report
represents Insurance Consultant's professional opinion with respect to the
Project as of such date and as of the date hereof. Attached hereto as Exhibit A
is a true, correct and complete list of the coverages which have been obtained
to date in connection with the Project as evidenced by certificates of insurance
and cover notes supplied by Borrower.
Upon delivery of the original certificates of insurance, copies of
which are attached as Appendix A, Borrower will have provided satisfactory
evidence of compliance with the provisions of Exhibit K to the Credit Agreement.
Sincerely,
[▇▇▇▇▇ USA, INC.]
553
EXHIBIT F-5
to Credit Agreement
[▇.▇. ▇▇▇▇ INC. LETTERHEAD]
______, 2000
Credit Suisse First Boston,
New York Branch,
as Administrative Agent for the Banks
Eleven Madison Avenue
New York, New York 10010
Attn: Manager, Project Finance
Re: The Initial Projects
Ladies and Gentlemen:
The undersigned, a duly authorized representative of ▇.▇.
▇▇▇▇, Inc., a Washington corporation ("Independent Engineer"), hereby provides
this letter to you in accordance with Section 3.1.21 of that certain Credit
Agreement dated as of October 16, 2000 (the "Credit Agreement"), among Calpine
Construction Finance Company II, LLC, a Delaware limited partnership, as
Borrower ("Borrower"), the financial institutions listed on Exhibit H thereto,
Credit Suisse First Boston, acting through its New York Branch, as Lead Arranger
and Administrative Agent ("Administrative Agent"), The Bank of Nova Scotia, as
Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of America Securities
LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger
and Co-Syndication Agent, Bayerische Landesbank Girozentrale, as Arranger,
Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as Arranger and
Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as
Arranger and Co-Documentation Agent and TD Securities (USA) Inc., as Arranger
and Co-Documentation Agent. Except as provided herein, all terms used herein
which are defined in the Credit Agreement shall have the meanings given therein.
▇.▇. ▇▇▇▇, Inc. has been retained by the Lead Arrangers as the
Independent Engineer and it has prepared an Independent Engineer's Report dated
[_________, 2000] addressing the feasibility of the Initial Projects (the
"Independent Engineer's Report").
The Independent Engineer's Report was prepared pursuant to the
scope of services under our Professional Services Agreement with the Lead
Arrangers and those services were provided in accordance with generally accepted
engineering practices.
In connection with the preparation of the Independent
Engineer's Report, personnel of the Independent Engineer have participated in
meetings or telephone discussions with representatives of Calpine Corporation
and it's affiliates, Borrower, counsel to Borrower, the Lead Arrangers and
counsel to the Lead Arrangers in regard to the Initial Projects.
554
This letter is solely for the information of, and assistance
to, the Lead Arrangers in conducting and documenting their investigation of the
matters covered by the Independent Engineer's Report in connection with the
Initial Projects and is not to be used, circulated, quoted or otherwise referred
to within or without the lending group for any purpose, nor is it to be referred
to in whole or in part in any other document, except that reference may be made
to it in the Credit Agreement or in any list of closing documents pertaining to
the Initial Projects.
Sincerely,
[▇.▇. ▇▇▇▇ INC.]
555
EXHIBIT F-6
to Credit Agreement
[▇.▇. ▇▇▇▇ INC. LETTERHEAD]
______, 200_
Credit Suisse First Boston,
New York Branch,
as Administrative Agent for the Banks
Eleven Madison Avenue
New York, New York 10010
Attn: Manager, Project Finance
Re: The ____ Project (the "Project")
Ladies and Gentlemen:
The undersigned, a duly authorized representative of ▇.▇.
▇▇▇▇, Inc., a Washington corporation ("Independent Engineer"), hereby provides
this letter to you in accordance with Section [3.2.12] [3.3.13] of that certain
Credit Agreement dated as of October 16, 2000 (the "Credit Agreement"), among
Calpine Construction Finance Company II, LLC, a Delaware limited liability
company, as Borrower ("Borrower"), the financial institutions listed on Exhibit
H thereto, Credit Suisse First Boston, acting through its New York Branch, as
Lead Arranger and Administrative Agent ("Administrative Agent"), The Bank of
Nova Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of
America Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital
LLC, as Arranger and Co-Syndication Agent, Bayerische Landesbank Girozentrale,
as Arranger, Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as
Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America
Services LLC, as Arranger and Co-Documentation Agent and TD Securities (USA)
Inc., as Arranger and Co-Documentation Agent. Except as provided herein, all
terms used herein which are defined in the Credit Agreement shall have the
meanings given therein.
▇.▇. ▇▇▇▇, Inc. has been retained by the Lead Arrangers as the
Independent Engineer and it has prepared an Independent Engineer's Report dated
_________, 200__ with respect to the Project (the "Independent Engineer's
Report").
The Independent Engineer's Report was prepared pursuant to the
scope of services under our Professional Services Agreement with the Lead
Arrangers and those services were provided in accordance with generally accepted
engineering practices.
In connection with the preparation of the Independent
Engineer's Report, personnel of the Independent Engineer have participated in
meetings or telephone discussions with representatives of Calpine Corporation
and it's affiliates, Borrower, counsel to Borrower, the Lead Arrangers and
counsel to the Lead Arrangers in regard to the Project.
556
This letter is solely for the information of, and assistance
to, the Technical Committee in conducting and documenting their investigation of
the matters covered by the Independent Engineer's Report in connection with the
Project and is not to be used, circulated, quoted or otherwise referred to
within or without the lending group for any purpose, nor is it to be referred to
in whole or in part in any other document, except that reference may be made to
it in the Credit Agreement or in any list of closing documents pertaining to the
Project.
Sincerely,
[▇.▇. ▇▇▇▇ INC.]
557
EXHIBIT F-7
to Credit Agreement
[▇.▇. ▇▇▇▇ INC. LETTERHEAD]
______, 200_
Credit Suisse First Boston,
New York Branch,
as Administrative Agent for the Banks
Eleven Madison Avenue
New York, New York 10010
Attn: Manager, Project Finance
Re: The ______ Turbine (the "Turbine")
Ladies and Gentlemen:
The undersigned, a duly authorized representative of ▇.▇.
▇▇▇▇, Inc., a Washington corporation ("Independent Engineer"), hereby provides
this letter to you in accordance with Section 3.5.11 of that certain Credit
Agreement dated as of October 16, 2000 (the "Credit Agreement"), among Calpine
Construction Finance Company II, LLC, a Delaware limited liability company, as
Borrower ("Borrower"), the financial institutions listed on Exhibit H thereto,
Credit Suisse First Boston, acting through its New York Branch, as Lead Arranger
and Administrative Agent ("Administrative Agent"), The Bank of Nova Scotia, as
Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of America Securities
LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger
and Co-Syndication Agent, Bayerische Landesbank Girozentrale, as Arranger,
Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as Arranger and
Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as
Arranger and Co-Documentation Agent and TD Securities (USA) Inc., as Arranger
and Co-Documentation Agent. Except as provided herein, all terms used herein
which are defined in the Credit Agreement shall have the meanings given therein.
▇. ▇. ▇▇▇▇, Inc. has been retained by the Lead Arrangers as
the Independent Engineer and it has prepared an Independent Engineer's Report
dated __________, 200__ addressing the technology and size of the Turbine (the
"Independent Engineer's Turbine Report"). The Independent Engineer's Turbine
Report was prepared pursuant to the scope of services under our Professional
Services Agreement with the Lead Arrangers and those services were provided in
accordance with generally accepted engineering practices.
In connection with the issuance of this certificate, personnel
of the Independent Engineer have participated, to the extent determined
necessary by the Independent Engineer, in meetings or telephone discussions with
representatives of Calpine Corporation and it's affiliates, Borrower, counsel to
Borrower, the Lead Arrangers and counsel to the Lead Arrangers in regard to the
Turbine.
558
This letter is solely for the information of, and assistance
to, the Technical Committee in conducting and documenting their investigation of
the matters covered by this Certificate in connection with the Turbine and is
not to be used, circulated, quoted or otherwise referred to within or without
the lending group for any purpose, nor is it to be referred to in whole or in
part in any other document, except that reference may be made to it in the
Credit Agreement or in any list of closing documents pertaining to the Turbine.
Sincerely,
[▇.▇. ▇▇▇▇ INC.]
559
EXHIBIT F-8
to Credit Agreement
[FUEL CONSULTANT LETTERHEAD]
_______________, 200_
Credit Suisse First Boston,
New York Branch,
as Administrative Agent for the Banks
Eleven Madison Avenue
New York, New York 10010
Attn: Manager, Project Finance
Re: The [____________] Project (the "Project")
Ladies and Gentlemen:
The undersigned, a duly authorized officer of
__________________, ("Fuel Consultant"), hereby provides this letter to you in
accordance with Section [3.2.14] [3.3.15] of that Credit Agreement dated as of
October 16, 2000 (the "Credit Agreement"), among Calpine Construction Finance
Company II, LLC, a Delaware limited liability company, as Borrower ("Borrower"),
the financial institutions listed on Exhibit H thereto (the "Banks"), Credit
Suisse First Boston, acting through its New York Branch, as Lead Arranger and
Administrative Agent ("Administrative Agent"), The Bank of Nova Scotia, as Lead
Arranger, Co-Syndication Agent and Bookrunner, Banc of America Securities LLC,
as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and
Co-Syndication Agent, Bayerische Landesbank Girozentrale, as Arranger,
Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as Arranger and
Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as
Arranger and Co-Documentation Agent and TD Securities (USA) Inc., as Arranger
and Co-Documentation Agent. Except as provided herein, all terms used herein
which are defined in the Credit Agreement shall have the meanings given therein.
Fuel Consultant acknowledges that pursuant to the Credit
Agreement, the Banks will be providing financing to the Borrower for, among
other things, the construction of the Project and in so doing will be relying on
this Certificate and Fuel Consultant's report dated _____________. Fuel
Consultant certifies that attached hereto as Exhibit A is a true, correct and
complete copy of Fuel Consultant's report with respect to the Project, and that
said report represents Fuel Consultant's professional opinion as of the date
hereof. Further, Fuel Consultant confirms, as of the date hereof, the
evaluation, estimates, projections, conclusions and recommendations contained in
such report.
Sincerely,
[FUEL CONSULTANT]
560
EXHIBIT F-9
to Credit Agreement
[INDEPENDENT POWER MARKETING CONSULTANT LETTERHEAD]
___________, 200_
Credit Suisse First Boston,
New York Branch,
as Administrative Agent for the Banks
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Manager, Project Finance
Attn: Manager, Project Finance
Re: The ____________ Project (the "Project")
Ladies and Gentlemen:
The undersigned, a duly authorized representative of _______,
("Independent Power Marketing Consultant"), hereby provides this letter to you
in accordance with Section [3.2.15] [3.3.16] of that certain Credit Agreement
dated as of October 16, 2000 (the "Credit Agreement"), among Calpine
Construction Finance Company II, LLC, a Delaware limited liability company, as
Borrower ("Borrower"), the financial institutions listed on Exhibit H thereto
(the "Banks"), Credit Suisse First Boston, acting through its New York Branch,
as Lead Arranger and Administrative Agent ("Administrative Agent"), The Bank of
Nova Scotia, as Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of
America Securities LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital
LLC, as Arranger and Co-Syndication Agent, Bayerische Landesbank Girozentrale,
as Arranger, Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as
Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America
Services LLC, as Arranger and Co-Documentation Agent and TD Securities (USA)
Inc., as Arranger and Co-Documentation Agent. Except as provided herein, all
terms used herein which are defined in the Credit Agreement shall have the
meanings given therein.
Independent Power Marketing Consultant acknowledges that
pursuant to the Credit Agreement, the Banks will be providing financing to the
Borrower for, among other things, the construction of the Project and in so
doing will be relying on this certificate and Independent Power Marketing
Consultant's report dated ____________. Independent Power Marketing Consultant
certifies that attached hereto as Exhibit A is a true, correct and complete copy
of Independent Power Marketing Consultant's report with respect to the Project,
and that said report represents Independent Power Marketing Consultant's
professional opinion as of such date and as of the date hereof. Further, since
the date of the aforementioned Independent Power Marketing Consultant's report,
nothing has come to our attention which would cause us to change that report.
Sincerely,
[INDEPENDENT POWER MARKETING CONSULTANT]
561
EXHIBIT G-1
to Credit Agreement
DESCRIPTION OF INITIAL PROJECTS
[*]
1
562
CCFC II SUBSEQUENT PROJECT LIST
EXHIBIT G2
[*]
563
CCFC II
DESCRIPTION OF TURBINES
EXHIBIT G3
MANUFACTURER: WESTINGHOUSE
CONTRACT/UNIT ONSITE PMTS. PMT. FOR PMT. FOR BALANCE
PROJECT NAME CTG# PRICE DATES THRU 9/00 OCT-00 NOV-00 REMAINING
----------------- ------ -------------- --------- ------------ ---------- --------- ------------
Baytown 1F9807 $ 27,900,500 ######### $ 26,228,981 $ 1,671,519
Baytown 1F9821 31,512,300 ######### 26,785,455 1,575,615 3,151,230
Baytown 1F9822 31,512,300 ######### 26,785,455 1,575,615 3,151,230
Channel 1F9818 29,682,600 ######### 5,936,520 1,484,130 22,261,950
Channel 1F9823 30,237,600 ######### 25,701,960 3,023,760 1,511,880
Decatur (Solutia) IF9906 32,760,670 ######### 8,225,000 1,603,201 6,552,134 16,380,335
Decatur (Solutia) IF9907 32,760,670 ######### 8,225,000 1,603,201 6,552,134 16,380,335
Decatur (Solutia) 1F9949 32,760,670 ######### 8,225,000 1,603,201 6,552,134 16,380,335
▇▇▇▇▇▇ (Amoco) 1F9819 31,704,337 ######### 4,750,000 1,590,867 25,363,469
▇▇▇▇▇▇ (Amoco) 1F9820 31,704,337 ######### 4,750,000 1,590,867 25,363,469
▇▇▇▇▇▇ (Amoco) 1F9950 31,704,337 ######### 4,750,000 1,590,867 25,363,469
============ ============ ========== =========== ============
Total $344,240,320 $150,363,371 $9,582,205 $27,315,522 $156,979,222
▇▇▇
▇▇▇▇▇▇▇▇ ▇-▇▇
LOS MEDANOS PROJECT BUDGET
(000's)
[*]
565
APPENDIX G-4B
BAYTOWN PROJECT BUDGET
(000's)
[*]
▇▇▇
▇▇▇▇▇▇▇▇ ▇-▇▇
▇▇▇▇▇▇▇▇ PROJECT BUDGET
(000's)
[*]
▇▇▇
▇▇▇▇▇▇▇▇ ▇-▇▇
PANDA PROJECT BUDGET
(000's)
[*]
▇▇▇
▇▇▇▇▇▇▇▇ ▇-▇▇
SANTA ▇▇▇▇ PROJECT BUDGET
(000's)
[*]
▇▇▇
▇▇▇▇▇▇▇▇ ▇-▇▇
DELTA PROJECT BUDGET
(000's)
[*]
▇▇▇
▇▇▇▇▇▇▇▇ ▇-▇▇
FREESTONE PROJECT BUDGET
(000's)
[*]
▇▇▇
▇▇▇▇▇▇▇▇ ▇-▇▇
▇▇▇▇▇ RIVER PROJECT BUDGET
(000's)
[*]
▇▇▇
▇▇▇▇▇▇▇▇ ▇-▇▇
CHANNEL PROJECT BUDGET
(000's)
[*]
▇▇▇
▇▇▇▇▇▇▇▇ ▇-▇▇
CORPUS PROJECT BUDGET
(000's)
[*]
▇▇▇
▇▇▇▇▇▇▇▇ ▇-▇▇
DECATUR PROJECT BUDGET
(000's)
[*]
▇▇▇
▇▇▇▇▇▇▇▇ ▇-▇▇
▇▇▇▇▇▇ PROJECT BUDGET
(000's)
[*]
▇▇▇
▇▇▇▇▇▇▇▇ ▇-▇▇
BORROWER BUDGET
Non Allocated Costs
(000's)
Land $ --
Development Costs --
Construction --
Power Island --
Insurance --
EPC --
Project Enhancements --
Sales Tax --
Construction Management
Startup --
Pending Change Orders --
Title Insurance --
--------
SUBTOTAL $ --
Interest Expense 176,505
Commitment Fees 8,799
Legal/Bank/Engineering/Admin Fee 45,900
--------
TOTAL $231,204
577
EXHIBIT G-5
to Credit Agreement
INITIAL PROJECT SCHEDULED COMPLETION DATES
CONSTRUCTION
PROJECT NAME LOCATION START COD
---------------------------- -------------- ------------ ------
Los Medanos Energy Center Pittsburg, CA Aug-99 Jul-01
Baytown Energy Center Baytown, TX Jan-00 Jan-02
Channel Energy Center Channel, TX Apr-00 Jun-01
Delta Energy Center Pittsburg, CA Apr-00 Jun-02
Broad River Energy Center II Gaffney, SC Aug-00 Jul-O1
▇▇▇▇▇▇▇▇ Energy Center St. ▇▇▇▇▇▇▇, LA Sep-00 Jul-02
Santa ▇▇▇▇ Energy Center I Milton, FL Sep-00 Jun-02
Freestone Energy Center Freestone, TX Sep-00 Jun-02
Decatur Energy Center Decatur, AL Sep-00 Jun-02
▇▇▇▇▇▇ Energy Center Decatur, AL Sep-00 Jun-02
▇▇▇▇▇ Energy Center Coweta, OK Oct-00 Jun-02
Corpus Christi Energy Center I Corpus, TX Oct-00 May-02
578
EXHIBIT G-6
to Credit Agreement
[*]
EXHIBIT G-7
to Credit Agreement
PENDING LITIGATION
Complaint filed on April 14, 2000 with the Environmental Protection Agency's
Office of Civil Rights by ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇▇▇ of
Californians for Renewable Energy, relating to the Los Medanos Energy Center
Project.
579
EXHIBIT G-8
to Credit Agreement
HAZARDOUS SUBSTANCES DISCLOSURE
None, except as disclosed in,
BAYTOWN ENERGY CENTER
- Phase I and II Environmental Site Assessment conducted by
Arcadis, ▇▇▇▇▇▇▇▇ & Mille for Bayer Corporation, dated November
3, 1999
BROAD RIVER ENERGY CENTER II
- Phase I Environmental Site Assessment conducted by ▇▇▇ ▇.
▇▇▇▇▇▇, Inc
- Limited Phase II Environmental Site Assessment conducted by ▇▇▇
▇. ▇▇▇▇▇▇, Inc
▇▇▇▇▇▇▇▇ ENERGY CENTER
- Phase I Environmental Site Assessment conducted by C-K
Associates, Inc. for ▇▇▇▇▇▇ Energy Commission, dated August
1998.
- Phase I Environmental Site Assessment Update by C-K Associates,
Inc. for Skygen Energy, LLC, dated August 16, 2000.
CHANNEL ENERGY CENTER
- Phase I and Limited Phase II Environmental Site Assessment
Report for Calpine Construction Finance Company, L.P. dated
January 2000.
CORPUS CHRISTI ENERGY CENTER I
- Phase I Environmental Site Assessment conducted by JD Consulting
for Skygen Energy LLC dated August 1999.
- Limited Phase II Environmental Site Assessment conducted by JD
Consulting for Skygen Energy LLC dated September 20, 2000.
DECATUR ENERGY CENTER
- Phase I Environmental Site Assessment dated December 1999,
regarding Solutia Decatur Plant Site.
- Phase II Environmental Site Assessment Report by RMT dated
February 25, 2000, regarding Solutia, Inc. Site.
580
- Phase II Environmental Site Assessment Report by RMT dated June
2000, regarding Utility Corridors and Lay-Down Area.
DELTA ENERGY CENTER
- Environmental Site Assessment prepared by Environmental
Resources Management for Calpine Corporation dated May 29, 1998.
FREESTONE ENERGY CENTER
- Phase I Environmental Site Assessment regarding ▇▇▇▇▇▇ Property
Site, Freestone County, by the WCM Group, Inc. for Entergy Power
Group, Inc.
- Phase I Environmental Site Assessment regarding Hill Property
Site, Freestone County, by the WCM Group, Inc. for Entergy Power
Group, Inc dated June 2000.
LOS MEDANOS ENERGY CENTER
- Phase I Environmental Site Assessment regarding 12 Acre Parcel,
by ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of Enron Capital and
Trade Resources, dated April 30, 1998.
- Phase I Environmental Site Assessment regarding Enron
Cogeneration Facility Alternate Linear Routes, by ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of Enron Capital and Trade Resources,
dated July 8, 1999.
- Phase II Environmental Site Investigation regarding ▇▇▇ ▇▇▇▇▇▇
Corridor, by ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of Enron
Capital and Trade Resources, dated May 10, 1999.
- Phase I Site Assessment for ▇▇▇ ▇▇▇▇▇▇, by ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ on behalf of Enron Capital and Trade Resources, dated July
9, 1999.
- Phase I Environmental Site assessment regarding Two Acre Parcel
- Corner Harbor Road and Santa Fe Avenue, by ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of Enron Capital and Trade Resources,
dated June 23, 1999.
- Phase I Environmental Site Assessment regarding Pittsburg
District Energy Facility Proposed Truck Bypass Roadway East 3rd
Street, by ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of Enron Capital
and Trade Resources, dated June 23, 1999.
- Phase I Environmental Site Assessment for Enron regarding
Offsite Linear Routes, by ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf
of Enron Capital and Trade Resources, dated June 11, 1999.
- Phase I Environmental Site Assessment regarding Proposed Truck
Bypass Roadway, Santa Fe and Columbia Avenue, by ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of Enron Capital and Trade Resources,
dated June 14, 1999
581
- Phase I Environmental Site Assessment regarding Diablo Services,
East 3rd Street, by ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of
Enron Capital and Trade Resources, dated July 8, 1999.
- Phase II Environmental Site Assessment for Pittsburg District
Energy Facility, Proposed Truck Bypass Roadway and Two Acre
Parcel, by ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of Enron Capital
and Trade Resources, dated August 10, 1999
- Phase II Environmental Site Assessment, regarding USS POSCO
Industries Recreational Ballpark Site, by ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ on behalf of Enron Capital and Trade Resources, dated
September 15, 1999
▇▇▇▇▇▇ ENERGY CENTER
- Phase I Environmental Site Assessment by Environmental
Consulting and Technology, Inc. dated April 2000.
- Phase II Environmental Site Assessment submitted by ▇▇▇▇▇▇▇
Pinrie, Inc. dated July 2000.
▇▇▇▇▇ ENERGY CENTER
- Phase I Environmental Site Assessment by Environmental
Consulting & Technology, Inc. for Panda Energy International,
Inc. dated June 2000.
SANTA ▇▇▇▇ ENERGY CENTER
- Phase I Environmental Site Assessment Report by Sterling Fibers,
Inc for ▇▇▇▇▇▇ Energy Corporation dated July 1998.
- Phase I Environmental Site Assessment Update by Sterling Fibers,
Inc. for Skygen Energy, LLC dated August 2000.
- Phase II Environmental Site Assessment by ▇▇▇ ▇. ▇▇▇▇▇▇, Inc.
for ▇▇▇▇▇▇ Energy Commission dated September 3, 1999.
582
EXHIBIT G-9
to Credit Agreement
FORM OF POWER MARKETING PLAN
[*]
1
583
EDIT G-10
to Credit Agreement
FORM OF FUEL PLAN
[*]
1
584
EXHIBIT H
to Credit Agreement
SCHEDULE OF BANK/LENDING OFFICES
Bank Percentage of Loans Allocation
---- ------------------- ----------
1. CREDIT SUISSE FIRST BOSTON, 12.5% $312,500,000
NEW YORK BRANCH
Eleven Madison Avenue
New York, New York ▇▇▇▇▇
2. THE BANK OF NOVA SCOTIA 12.5% $312,500,000
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
3. BANK OF AMERICA, N.A. 12.5% $312,500,000
▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
4. ING (U.S.) CAPITAL LLC 12.5% $312,500,000
c/o ING Barings
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
5. BAYERISCHE LANDESBANK GIROZENTRALE 12.5% $312,500,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
6. CIBC INC. 12.5% $312,500,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
7. DRESDNER BANK AG, NEW YORK AND 12.5% $312,500,000
GRAND CAYMAN BRANCHES
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
8. TORONTO DOMINION (TEXAS) INC. 12.5% $312,500,000
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
---- -------------
TOTAL 100% 2,500,000,000
585
EXHIBIT I
to Credit Agreement
Annual Insurance Certificate
[LETTERHEAD OF BORROWER'S INSURANCE BROKER]
[DATE]
Credit Suisse First Boston,
New York Branch,
as Administrative Agent for the Banks
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Manager, Project Finance
Ladies and Gentlemen:
The undersigned, a duly authorized officer of _______________ a
_______________ ("Insurance Broker"), hereby provides this letter to you in
accordance with Section 5.8.8 of that certain Credit Agreement dated as of
October 16, 2000 (the "Credit Agreement"), among Calpine Construction Finance
Company II, LLC, a Delaware limited liability company, as Borrower ("Borrower"),
the financial institutions listed on Exhibit H thereto (the "Banks"), Credit
Suisse First Boston, acting through its New York Branch, as Lead Arranger and
Administrative Agent ("Administrative Agent"), The Bank of Nova Scotia, as Lead
Arranger, Co-Syndication Agent and Bookrunner, Banc of America Securities LLC,
as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and
Co-Syndication Agent, Bayerische Landesbank Girozentrale, as Arranger,
Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as Arranger and
Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as
Arranger and Co-Documentation Agent and TD Securities (USA) Inc., as Arranger
and Co-Documentation Agent. Except as provided herein, all terms used herein
which are defined in the Credit Agreement shall have the meanings given therein.
Insurance Broker acknowledges that pursuant to the Credit
Agreement, the Banks are providing financing to Borrower for the construction
and/or operation of the Initial Projects, the Funded Subsequent Projects and the
purchase of the Funded Turbines and in so doing are relying on Borrower's and/or
the other applicable Portfolio Entities, as the case may be, continued
compliance with the provisions of Exhibit K to the Credit Agreement.
Insurance Broker hereby certifies that, as of the date hereof,
Borrower and/or the other applicable Portfolio Entities, as the case may be,
have obtained and are maintaining in full force and effect insurance policies
conforming, in all material respects, to the requirements set forth in Exhibit K
to the Credit Agreement.
Respectfully submitted,
586
EXHIBIT J-1
to Credit Agreement
BANK WITHHOLDING CERTIFICATE (TREATY)
[DATE]
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC
a Delaware limited liability company
c/o Calpine Corporation
▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Manager, Project Finance
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
as Administrative Agent for the Banks
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Manager, Project Finance
In connection with the Credit Agreement dated as of October
16, 2000 (the "Credit Agreement"), among Calpine Construction Finance Company
II, LLC, a Delaware limited liability company, as Borrower, the financial
institutions listed on Exhibit H thereto, Credit Suisse First Boston, acting
through its New York Branch, as Lead Arranger and Administrative Agent
("Administrative Agent"), The Bank of Nova Scotia, as Lead Arranger,
Co-Syndication Agent and Bookrunner, Banc of America Securities LLC, as Arranger
and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and Co-Syndication
Agent, Bayerische Landesbank Girozentrale, as Arranger, Co-Documentation Agent
and LC Bank, CIBC World Markets Corp., as Arranger and Co-Documentation Agent,
Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as Arranger and
Co-Documentation Agent and TD Securities (USA) Inc., as Arranger and
Co-Documentation Agent, the undersigned hereby certifies, represents and
warrants that [NAME OF RELEVANT BANK OR AGENT] is a [NAME OF COUNTRY]
corporation and is currently exempt from any U.S. federal withholding tax on
amounts paid to it from U.S. sources under the Credit Agreement by virtue of
compliance with the provisions of the Income Tax Convention between the United
States and [NAME OF COUNTRY], signed [DATE], [AS AMENDED]. Our fiscal year is
the twelve months ending [_____________________].
The undersigned (a) is a corporation organized under the laws
of [NAME OF COUNTRY] whose registered business is managed or controlled in [NAME
OF COUNTRY], (b) [DOES NOT HAVE A PERMANENT ESTABLISHMENT OR FIXED BASE IN THE
UNITED STATES/DOES HAVE A PERMANENT ESTABLISHMENT OR FIXED BASE IN THE UNITED
STATES BUT THE CREDIT AGREEMENT IS NOT EFFECTIVELY CONNECTED WITH SUCH PERMANENT
ESTABLISHMENT OR FIXED BASE], (c) is not exempt from tax on the income in [NAME
OF COUNTRY] and (d) is the beneficial owner of the income.
We enclose two signed copies of Form 1001 of the U.S. Internal
Revenue Service.
Yours faithfully,
[NAME OF RELEVANT BANK]
By: _______________________________
Name:
Title:
587
EXHIBIT J-2
to Credit Agreement
BANK WITHHOLDING CERTIFICATE (EFFECTIVELY CONNECTED)
[DATE]
CALPINE CONSTRUCTION FINANCE COMPANY II, LLC
a Delaware limited liability company
c/o Calpine Corporation
▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Manager, Project Finance
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH,
as Administrative Agent for the Banks
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Manager, Project Finance
In connection with the Credit Agreement dated as of October
16, 2000 (the "Credit Agreement"), among Calpine Construction Finance Company
II, LLC, a Delaware limited liability company, as Borrower, the financial
institutions listed on Exhibit H thereto, Credit Suisse First Boston, acting
through its New York Branch, as Lead Arranger and Administrative Agent
("Administrative Agent"), The Bank of Nova Scotia, as Lead Arranger,
Co-Syndication Agent and Bookrunner, Banc of America Securities LLC, as Arranger
and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and Co-Syndication
Agent, Bayerische Landesbank Girozentrale, as Arranger, Co-Documentation Agent
and LC Bank, CIBC World Markets Corp., as Arranger and Co-Documentation Agent,
Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as Arranger and
Co-Documentation Agent and TD Securities (USA) Inc., as Arranger and
Co-Documentation Agent, the undersigned hereby certifies, represents and
warrants that [NAME OF RELEVANT BANK OR AGENT] is entitled to exemption from
withholding tax on payments to it under the provisions of Section 1441(c) of the
Internal Revenue Code of 1986, as amended, of the United States of America.
We enclose two signed copies of Form 4224 of the U.S. Internal
Revenue Service.
Yours faithfully,
[NAME OF RELEVANT BANK]
By: _____________________________
Name:
Title:
588
EXHIBIT K
to Credit Agreement
INSURANCE REQUIREMENTS
Defined terms used in this Exhibit K not otherwise defined herein shall
have the meanings set forth in that certain Credit Agreement dated as of October
16, 2000, by and among Calpine Construction Finance Company II, LLC., a Delaware
limited liability company ("Borrower"), Credit Suisse First Boston, as Lead
Arranger and Administrative Agent ("Administrative Agent"), The Bank of Nova
Scotia as Lead Arranger, Co-Syndication Agent and Bookrunner, Banc of America
Securities, LLC, as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC,
as Arranger and Co-Syndication Agent, Bayerische Landesbank Girozentrale, as
Arranger, Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as
Arranger and Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇, as Arranger and
Co-Documentation Agent and TD Securities (USA) Inc., as Arranger and
Co-Documentation Agent and the Banks parties thereto.
1. With respect to each Project having Initial Contributions, Funded
Project and Funded Turbine, Borrower shall, without cost to the Banks, maintain
or cause to be maintained on its behalf in effect at all times the types of
insurance required by the following provisions together with any other types
of insurance, in form acceptable to Administrative Agent, required hereunder,
with insurance companies rated "A-" or better, with a minimum size rating of
"IX," 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 Administrative
Agent, the following insurance coverages until all obligations of Borrower and
the other Portfolio Entities pursuant to the Credit Agreement and the other
Credit Documents have been fully discharged:
a. Commercial general liability insurance for such Project on an
"occurrence" policy form or AEGIS 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 the appropriate Portfolio Entities and for contractors,
with primary coverage limits of no less than $1,000,000 for injuries or death
to one or more persons or damage to property resulting from any one occurrence
and a $1,000,000 annual aggregate limit.
The 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. Policy exclusions
which are not standard to the commercial general liability coverage form or are
added by manual endorsements or are proposed to be added after the Funding Date
for each Funded Project, that restrict coverage, are to be approved by
Administrative Agent. Work performed by others for the
Exhibit K - page 1
589
appropriate Portfolio Entities at any such Project shall not commence until a
certificate of insurance has been delivered verifying coverages outlined above
to be in place and naming Borrower and the other applicable Portfolio Entities
as insured or additional insured and Administrative Agent as additional insured.
Deductibles in excess of $50,000 shall be subject to review and approval by
Administrative Agent.
b. Automobile liability insurance, including coverage for owned,
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 with respect to bodily injury, property damage or death.
c. Worker's compensation insurance and employer's liability
insurance, with a limit of not less than $1,000,000, disability benefits
insurance and such other forms of insurance which Borrower or the other
applicable Portfolio Entities are required by law to provide for any such
Project, providing statutory benefits and other states' endorsement and USL&H
Act coverage and ▇▇▇▇▇ Act (if any exposure exists), covering loss resulting
from injury, sickness, disability or death of the employees of Borrower and the
other applicable Portfolio Entities. Work performed by others for any Portfolio
Entity at any such Project shall not commence until a certificate of insurance
has been delivered verifying coverages outlined above to be in place.
d. From the point of groundbreaking for each Project and through the
date of Completion for such Project, builder's risk insurance covering each such
Project separately on an "all risk basis" on a completed value form with
"extended coverage" (including earthquake (subject to the next paragraph),
flood, collapse, sinkhole and subsidence) and "soft cost coverage" on a no
coinsurance basis and providing (i) coverage for such Project site, including
removal of debris, insuring the buildings, structures, machinery, equipment,
facilities, fixtures and other properties constituting a part of each such
Project in a minimum aggregate amount not less than the full replacement value
of each such Project, and in any case subject to a construction term aggregate
limit of $100,000,000 for flood coverage and for earthquake coverage, but in no
event an amount less than the limit necessary to satisfy the other related
Project contracts; (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
associated with such Project; (iii) transit coverage with a per occurrence limit
of not less than the greater of $5,000,000 or an amount 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 (i) above; (v) delay in opening coverage for interest during construction,
debt service and continuing expenses in an amount not less than an 18 month
indemnification period limit, on an "all risk" basis, as set forth in (i)
through (iv) above. Builder's risk insurance shall not contain an exclusion for
freezing, mechanical breakdown, or resultant damage caused by faulty
workmanship, design or materials and shall remain in effect until replaced by
property insurance coverage and boiler and machinery coverage as specified
Exhibit K - page 2
590
in Section I(e) below. All such policies may have deductibles of not greater
than $250,000 per loss; earthquake and flood coverage shall have a deductible of
not greater than $250,000 with the exception of California earthquake (for which
the deductible may be 5% of values at risk), coastal windstorm (2% deductible)
and any such Project located in a 100 year flood zone ($500,000 deductible); and
delay in opening coverage shall have a deductible not greater than a 45 day
period; operational testing shall have a deductible of not greater than
$750,000; and transit coverage shall have a deductible of not greater than
$100,000. Builders risk policy shall include first party cleanup, hazardous
materials, subject to a sublimit of $250,000.
At least 45 days prior to the shipment of equipment for any Project
or Funded Turbine manufactured outside the United States, ocean cargo coverage
shall be secured in an amount not less than the full replacement costs of the
value of equipment shipped. Such coverage shall apply to all equipment which is
valued in excess of $500,000 and has a lead time to replace exceeding five (5)
months. 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 applicable Project site including 60 days storage, or is
insured under the builders risk policy. Marine delay in opening or advanced loss
of profits shall be insured in an amount not less than the equivalent of
interest during construction, debt service and continuing expenses subject to an
indemnification period not less than twelve months or such additional time
required to repair/replace the equipment being shipped. The waiting period shall
not exceed 45 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.
Earthquake coverage shall include coverage for movement,
earthquakes, shocks, tremors, landslides, subsidence, volcanic activity,
sinkhole coverage, mud-flow or rock-fall, 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, inundation, rainfall and/or resulting runoff or the
rising (including the overflowing or breaking boundaries) of lakes, ponds,
reservoirs, rivers, harbors, streams, or other bodies of water, whether or not
driven by wind.
e. From and after the date of Completion for each such Project, "all
risk" property insurance coverage in the amount not less than the full
replacement value of such 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
Exhibit K - page 3
591
flood coverage may be subject to an annual aggregate limit of not less than
$100,000,000 with the exception of California (for which the limit shall be as
agreed to by Administrative Agent and Borrower and which in Administrative
Agent's reasonable discretion, after consultation with the Banks, is
commercially feasible), collapse, sinkhole, subsidence and such other perils as
Administrative Agent, after consultation with the Banks and Borrower, may from
time to time require to be insured, with a sublimit of not less than $250,000
for on-site clean-up required as a result of the occurrence of an insured risk;
(ii) off-site coverage with a per occurrence limit of $2,000,000 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 of not less than
$2,000,000; and (iv) boiler and machinery coverage on a "comprehensive" basis
including breakdown and repair with limits not less than the full replacement
cost of the insured objects. Property insurance coverage shall not contain an
exclusion for freezing, mechanical breakdown or resultant damage caused by
faulty workmanship, design or materials. Borrower shall also maintain or cause
to be maintained with respect to each such Project, from and after the date of
Completion of such Project, business interruption insurance on an "all risk"
basis as set forth in (i) through (iv) above, in an amount equal to satisfy
policy coinsurance conditions, but not less than the sum of 12 months scheduled
Debt Service attributable to such Project, continuing expenses and profits.
Borrower shall also maintain or cause to be maintained, expediting or extra
expense coverage in an amount not less than $3,000,000. Borrower shall also
maintain or cause to be maintained with respect to each such Project contingent
business interruption insurance on a blanket basis in an amount not less than
six months scheduled Debt Service attributable to such Project and continuing
expenses and profits of such Project. The policy/policies shall include
increased cost of construction coverage, debris removable, and building
ordinance coverage to pay for loss of "undamaged" property which may be required
to be replaced due to enforcement of local, state, or federal ordinances subject
to a sublimit of $10,000,000. All such policies may have deductibles of not
greater than $250,000 per loss with the exception of the combustion turbine
($1,000,000); windstorm if located in a coastal area (2%), earthquake if located
in California (for which the deductible may be 5% of values at risk) and flood
if located in a 100 year zone ($500,000); business interruption coverage shall
have a waiting period of not greater than 45 days. In the event the all risk
property and the boiler and machinery coverage are not written in the same
policy, each policy shall be endorsed to provide a joint loss agreement.
f. Umbrella/excess liability insurance of not less than
$50,000,000 per occurrence and in the aggregate during the construction and the
operation of each such Project. Such coverages shall be on a per occurrence
policy form or AEGIS claims-first-made form and over and above coverage provided
by the policies described in paragraphs (a), (b) and (c) above whose limits
shall apply toward the $50,000,000 limits set forth in this section. 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. The limit applying for each such
Exhibit K - page 4
592
Project can be satisfied by insuring multiple Projects under one policy subject
to a per Project aggregate endorsement. If the policy or policies provided under
this paragraph contain(s) aggregate limits applying to other operations of
Borrower, the other applicable Portfolio Entities, the Contractor or the
Operator other than with respect to each individual 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, Borrower shall take or cause immediate steps be taken to restore such
aggregate limits or shall provide other equivalent insurance protection for such
aggregate limits.
g. Watercraft liability and protection and indemnity, to the extent
exposure exists, in an amount not less than $10,000,000 for all owned, non-owned
and hired watercraft used in connection with the construction and operation of
each such Project. Such coverage can be accomplished under policies provided
pursuant to general liability policies, protection and indemnity policies or
separate watercraft liability policies.
h. 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 each such Project.
i. Such other or additional insurance (as to risks covered, policy
amounts, policy provisions or otherwise) as, under Prudent Utility Practices,
are from time to time insured against for property and facilities similar in
nature, use and location to the Funded Projects which Administrative Agent may
reasonably require.
j. All Major Contractors and Major Subcontractors and the Operator
(unless covered under the applicable Portfolio Entities' insurances) at each
such Project shall, prior to performing work at each such Project site, supply
proper evidence of insurance as set forth in paragraphs 1.a., 1.b., and 1.c.
above. In addition, excess liability or umbrella liability limits of not less
than $5,000,000 for Major Contractors and Major Subcontractors and Operators
shall be certified. Such insurance, with the exception of workers compensation,
supplied by these parties shall:
(i) add Borrower, applicable Portfolio Entities, Administrative
Agent and the Banks, as additional insureds;
(ii) be primary as respects insurance provided by Borrower,
applicable Portfolio Entities and Administrative Agent,
(iii) waive rights of subrogation against Borrower, applicable
Portfolio Entities and Administrative Agent;
(iv) continue in force until obligations of Contractors and
Subcontractors or the Operator are fulfilled at each such
Project.
Exhibit K - page 5
593
Contractors and Subcontractors shall be responsible for tools and
equipment brought onto each Project site unless such tools and equipment are
financed by one of the Portfolio Entities; all such financed tools and equipment
shall be covered under the builders risk policy.
2. All insurance coverage shall be on a "no coinsurance or self
insurance/replacement cost" basis and in such form (including the form of the
loss payable clauses) as shall be acceptable to Administrative Agent (which
acceptance shall not be unreasonably withheld). Borrower shall submit certified
copies of all policies received pursuant to the requirements of this Exhibit to
Administrative Agent for its review and approval.
3. All policies wherein the Banks party to this Agreement have an
insurable interest shall insure the interests of the Banks as well as Borrower
and/or the other applicable Portfolio Entities and all policies, with the
exception of workers compensation insurance, and shall name Administrative Agent
and the Banks as additional insured, unless Administrative Agent and/or the
Banks are named as an insured under the policy. All policies covering real or
personal property or business interruption shall name Administrative Agent or
its assigns as First Loss Payee in accordance with Lender's Loss Payable
Endorsement 438 BFU or equivalent and shall provide that any payment thereunder
for any loss or damage with respect to the applicable Project shall be made to
Administrative Agent and paid into the Loss Proceeds Account, except that such
policies may provide that any payments of less than $1,000,000 (not to exceed
$2,000,000 in any year) made in respect of any single casualty or other
occurrence may be paid solely to Borrower, unless Administrative Agent shall
have notified the insurer that an Event of Default or a related Non-Fundamental
Project Default has occurred there under and shall be continuing. Upon payment
and satisfaction of all of Borrower's and the other Portfolio Entities'
obligations under, and termination of, the Credit Documents, Administrative
Agent will instruct the insurers to name Borrower, or such successor credit
provider or other Person as Borrower shall specify, as loss payee. 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 applicable Portfolio
Entities) shall operate in the same manner as if there were a separate policy
covering each such insured. Each policy shall waive subrogation against
Administrative Agent, the Banks, Borrower and the other Portfolio Entities 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
Borrower, the other Portfolio Entities or the Banks. 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 for any reason
whatsoever, the insurers (or their representatives) will promptly notify
Borrower and Administrative Agent, and any such cancellation, termination or
change shall not be effective until 30 days after receipt of such notice by
Administrative Agent, and that appropriate certification shall be made to
Borrower by
Exhibit K - page 6
594
each insurer with respect thereto. Policies of insurance, provided in accordance
with this Exhibit K shall be primary with respect to any other insurance carried
by the Banks.
4. In the event that any of the Portfolio Entities (or Contractor as
appropriate) fail to respond in a timely and appropriate manner (as reasonably
determined by Administrative Agent) to take any steps necessary or reasonably
requested by Administrative Agent to collect from any insurers for any loss
covered by any insurance required to be maintained by this Exhibit K,
Administrative 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 applicable
Portfolio Entities; provided, however, that the Portfolio Entities shall, upon
Administrative Agent's request and at the Portfolio Entities' own cost and
expense, make all proofs of loss and take all other steps necessary or
reasonably requested by Administrative Agent to collect from insurers for any
loss covered by any insurance required to be obtained by this Exhibit K.
5. On or before December 30th of each year, Borrower shall furnish
to Administrative Agent, with a copy for each Bank, a certificate signed by a
Responsible Officer of Borrower or authorized insurance representative, showing
the insurance then maintained by or on behalf of the Portfolio Entities pursuant
to this Exhibit K 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
Administrative Agent hereunder in respect of the Event of Default or a related
Non-Fundamental Project Default which arises as a result of such failure)
Administrative Agent may at its option maintain the insurance required hereby
and, in such event, Borrower shall reimburse 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 and the builder's risk insurance described in paragraph l (d)
above, shall not be available and commercially feasible in the commercial
insurance market, Administrative Agent, with the approval of 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 (i) Borrower shall first request any such waiver in writing, which
request shall be accompanied by written reports prepared by an independent
insurance advisor of recognized national standing certifying that such insurance
is not reasonably available and commercially feasible in the commercial
insurance market for electric generating plants of similar type and capacity
(and, in any case where the required amount is not so available, certifying as
to the maximum amount which is so available) and explaining in detail the basis
for such conclusions, such insurance advisers and the form and substance of such
reports to be reasonably acceptable
Exhibit K - page 7
595
to Administrative Agent; (ii) at any time after the granting of any such waiver,
Administrative Agent may request, and Borrower shall furnish to Administrative
Agent within 15 days after such request, supplemental reports reasonably
acceptable to Administrative Agent from such insurance advisers updating their
prior reports and reaffirming such conclusion; and (iii) any such waiver shall
be effective only so long as such insurance shall not be available and
commercially feasible in the commercial insurance market, it being understood
that the failure of Borrower to timely furnish any such supplemental report
shall be conclusive evidence that such waiver is no longer effective because
such condition no longer exists, but that such failure is not the only way to
establish such non-existence.
7. The Portfolio Entities shall at all times maintain or cause to be
maintained the insurance coverage required under the terms of each of the
Project Documents to which they are a party. As a specific, limited exception to
the requirement that insurance be placed with companies of recognized
responsibility as described in 1. above, it is agreed that insurance may be
placed with other insurance companies or self-insured to the extent that the
Person first named insured on such policies of insurance or self-insuring shall
(i) maintain a S&P credit rating of BBB or better, (ii) comply with all other
requirements prescribed by this Schedule, (iii) maintain other insurance or
self-insurance that, in the aggregate, shall at no time exceed 1% of such
Person's net worth and (iv) the applicable Portfolio Entities shall provide
written notice thereof to the Administrative Agent along with evidence
reasonably satisfactory to the Administrative Agent of appropriate
indemnification of the Portfolio Entities and the Banks by such Person.
8. 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, Borrower shall obtain or cause to be obtained 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 Administrative Agent with proof that such
basic and supplemental extended reporting period coverage or "tail" has been
obtained.
Exhibit K - page 8
596
EXHIBIT L
to the Credit Agreement
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement") is entered
into as of ______, 200__ (the "Effective Date"), between _______________ (the
"Transferor") and _____________ (the "Transferee").
RECITALS
A. The parties refer to the Credit Agreement dated as of October 16,
2000 among Calpine Construction Finance Company II, LLC ("Borrower"), the
financial institutions listed on Exhibit H thereto (the "Banks"), Credit Suisse
First Boston, acting through its New York Branch, as Lead Arranger and
Administrative Agent ("Administrative Agent"), The Bank of Nova Scotia, as Lead
Arranger, Co-Syndication Agent and Bookrunner, Banc of America Securities LLC,
as Arranger and Co-Syndication Agent, ING (U.S.) Capital LLC, as Arranger and
Co-Syndication Agent, Bayerische Landesbank Girozentrale, as Arranger,
Co-Documentation Agent and LC Bank, CIBC World Markets Corp., as Arranger and
Co-Documentation Agent, Dresdner Kleinwort ▇▇▇▇▇▇ North America Services LLC, as
Arranger and Co-Documentation Agent and TD Securities (USA) Inc., as Arranger
and Co-Documentation Agent (as amended, modified or supplemented prior to, and
as in effect on, the date hereof, the "Credit Agreement").
B. The Transferor wishes to assign and sell certain rights and delegate
certain obligations with respect to the credit provided to Borrower pursuant to
the Credit Agreement (the "Credit Exposure"), and the Transferee wishes to
purchase and accept such rights and assume such duties, all as set forth below.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Definition and References. Capitalized terms not defined in this
Agreement shall have the meanings given in the Credit Agreement, and the Rules
of Interpretation attached as such to the Credit Agreement shall apply equally
to this Agreement. The term "assign" as used herein means, without limitation,
assign, delegate, transfer and sell; and the terms "assignment" and "assigned"
have corresponding meanings.
2. Assignment.
2.1 The Transferor hereby irrevocably sells and assigns to the
Transferee, effective as of the Effective Date, a percentage of the outstanding
Loans, the Total Loan Commitment, the Total Turbine Purchase Loan Commitment and
the Total Letter of Credit Commitment as set forth in Schedule 1, including such
percentage interest in and to all rights and obligations under the Credit
Agreement and the other Credit Documents (other than the Interest
597
Rate Agreements) (such transferred rights and obligations being referred to
herein as the "Interest"). The amount of outstanding Loans (including
Construction Loans and Turbine Purchase Loans) and aggregate Stated Amount of
all issued and outstanding Letters of Credit will, as of the Effective Date, be
as set forth on Schedule 2 attached hereto. On and after the Effective Date, the
Transferee shall have the same rights, benefits and obligations as the
Transferor had, as a Bank, under the Credit Agreement with respect to the
Interest, all determined as if the Transferee was a "Bank" originally named in
the Credit Agreement and the other Credit Documents (other than the Interest
Rate Agreements) with respect to the Interest, and the Transferor shall be
irrevocably released from its obligations, liabilities and responsibilities with
respect to the Interest. The assignment to the Transferee hereunder shall
include the Transferee's Proportionate Share of all interest, fees and other
amounts owed by Borrower with respect to the Interest which accrue on and after
(but not before) the Effective Date.
2.2 The Transferee acknowledges and agrees that the assignment
hereunder is made entirely without recourse to the Transferor, and that, except
to the extent set forth in Section 6 below, the Transferor does not make any
representation or warranty of any kind to the Transferee and, in particular, the
Transferor shall not be responsible for (i) the due execution, legality,
validity, enforceability, genuineness, value or sufficiency of the Credit
Agreement or any other Credit Document, (ii) the collectibility of the Interest,
(iii) any representation, warranty or statement made in or in connection with
any of the Credit Documents, (iv) the financial condition or creditworthiness of
Borrower or any guarantor or any affiliate, partner or shareholder of Borrower
or any guarantor, (v) the performance of or compliance with any of the terms or
provisions of any of the Credit Documents by Borrower or any other Person (other
than the Transferor), (vi) the validity, enforceability, perfection, priority,
condition, value or sufficiency of any documents granting the Transferor and the
other Banks a security interest in assets of Borrower (or any guarantor) or any
collateral securing or purporting to secure the Credit Exposure or any part
thereof, (vii) inspecting any of the property, books or records of Borrower or
any other Person, or (viii) providing any credit or other information concerning
the affairs of Borrower or any Person which may come into the possession of the
Transferor or any of its affiliates.
2.3 Except as expressly set forth in the Credit Agreement,
neither the Transferor nor any of its affiliates, officers, directors,
employees, agents or attorneys (collectively, the "Transferor Parties") shall be
liable for any mistake, error of judgment, or action taken or omitted to be
taken in connection with the Interest or the Credit Documents. Except as
expressly set forth in the Credit Agreement, the Transferor Parties shall incur
no liability hereunder to the Transferee by reason of the fact that the
Transferor is, or as a consequence of the Transferor's duties as, a Bank[, or in
the case of the Administrative Agent, Lead Arrangers, Syndication Agent,
Bookrunner or LC Bank, as Administrative Agent, Lead Arrangers, Syndication
Agent, Bookrunner or LC Bank,] under the Credit Agreement.
3. Assumption and Agreement to be Bound. The Transferee hereby accepts,
effective as of the Effective Date, the assignment of rights and delegation of
obligations referred to in Section 2, and assumes and agrees to perform fully
all of the obligations of the Transferor under the Credit Agreement and the
other Credit Documents (other than the Interest Rate Agreements) with respect to
the Interest, including, without limitation, the obligation to fund the
2
598
presently unfunded portion of the Interest subject to satisfaction of the
applicable conditions in the Credit Agreement and the other Credit Documents.
The Transferee agrees to be bound by the terms and conditions of the Credit
Agreement and the other Credit Documents (other than the Interest Rate
Agreements) as if it were a "Bank" originally named therein with respect to the
Interest.
4. Notices. Notices shall be given under this Agreement in the manner
set forth in the Credit Agreement.
5. Conditions Precedent. The Transferor's obligation to transfer the
Interest to the Transferee hereunder is expressly conditioned upon payment by
the Transferee to the Transferor of the amount set forth in Schedule 1.
6. Representations and Warranties.
6.1 The Transferor hereby represents and warrants to the
Transferee that as of the Effective Date:
6.1.1 The Transferor is the owner of the Interest,
free and clear of any rights of others;
6.1.2 The Transferor is duly authorized to assign the
Interest and has obtained all consents and given all notices required under the
Credit Documents; and
6.1.3 This Agreement is valid and binding on the
Transferor and enforceable against the Transferor in accordance with its terms.
6.2 The Transferee hereby represents and warrants to the
Transferor that as of the Effective Date:
6.2.1 The Transferee is duly authorized and qualified
to purchase and accept the Interest;
6.2.2 This Agreement is valid and binding on the
Transferee and enforceable against the Transferee in accordance with its terms;
6.2.3 The Transferee has made its own credit analysis
of Borrower, its own credit and legal analysis of the Credit Documents and the
transactions described therein, and its own decision to purchase and accept the
Interest and to assume the duties and obligations of the Transferor with respect
to the Interest as set forth hereunder, and has done so independently and
without reliance on the Transferor, except that the Transferee has relied on the
Transferor's representations contained in Section 6.1 hereof; and
6.2.4 The Transferor has made no representations or
warranties to the Transferee with respect to the Interest except as set forth in
this Agreement.
3
599
7. Miscellaneous.
7.1 Headings. Headings are for reference only and are to be
ignored in interpreting this Agreement.
7.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, United States of
America, without giving effect to principles of conflicts of laws (other than
Section 5-1401 of the New York General Obligations Law).
7.3 Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties hereto and supersedes all prior
agreements and understandings between the parties relating to the subject matter
hereof.
7.4 Further Assurances. Each of the Transferor and the
Transferee hereby agrees to execute and deliver such other instruments, and take
such other action, as any party may reasonably request in furtherance of the
transactions contemplated by this Agreement.
7.5 Counterparts. This Agreement may be executed in
counterparts.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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600
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
and Assumption Agreement by their duly authorized officers as of the date first
above written.
TRANSFEROR:
__________________________
By: _____________________________
Name: ___________________________
Title: __________________________
By: _____________________________
Name: ___________________________
Title: __________________________
TRANSFEREE:
__________________________
By: _____________________________
Name: ___________________________
Title: __________________________
By: _____________________________
Name: ___________________________
Title: __________________________
Acknowledged and approved:
ADMINISTRATIVE AGENT: BORROWER:
CREDIT SUISSE FIRST BOSTON, CALPINE CONSTRUCTION FINANCE
NEW YORK BRANCH COMPANY II, LLC
By: _____________________________ By: _____________________________
Name: ___________________________ Name: ___________________________
Title: __________________________ Title: __________________________
By: _____________________________
Name: ___________________________
Title: __________________________
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Schedule 1
to Assignment and
Assumption Agreement
Percentage Interest in the outstanding Loans, the Total Loan Commitment,
the Total Turbine Purchase Loan Commitment and the Total Letter of
Credit Commitment being Transferred: ___________%
Payment to the Transferor Hereunder: $__________
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Schedule 2
to Assignment and
Assumption Agreement
DESCRIPTION OF THE CREDIT EXPOSURE
Principal Amount of all Loans Outstanding: $___________
Unfunded Amount of the Total Loan Commitment: $___________
Total Loan Commitment: $___________
Principal Amount of all Construction Loans Outstanding: $___________
Principal Amount of all Turbine Purchase Loans Outstanding: $___________
Available Amount of the Total Turbine Purchase Loan Commitment: $___________
Total Turbine Purchase Loan Commitment: $___________
Aggregate Stated Amount of all Letters of Credit Issued and Outstanding: $___________
Available Amount of the Total Letter of Credit Commitment: $___________
Total Letter of Credit Commitment: $___________
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SCHEDULE 1
REQUIRED CONTRIBUTION PERCENTAGE*
[*]
604
Schedule 3.2
Special Conditions Precedent
[*]
1
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SCHEDULE 3.3.41
MODIFIED CONDITIONS PRECEDENT TO INITIAL FUNDING
1. Joint Venture Projects. In the case of a Subsequent Project that is only
partially owned by the relevant Project Owner, (a) Administrative Agent on
behalf of the Banks shall have received the Joint Venture Agreement which shall
include provisions (i) requiring the Joint Venturers to fund their respective
obligations in connection with the development, construction and operation of
such Subsequent Project, providing reasonable remedies for a Joint Venturer's
failure to fund, and permitting the relevant Project Owner to fund such
obligations if any of the Joint Venturers fail to do so, (ii) permitting the
relevant Project Owner to ▇▇▇▇▇ ▇ ▇▇▇▇ on its interest in such Subsequent
Project in favor of the Banks pursuant to this Agreement, and (iii) prohibiting
any of the other Joint Venturers from granting a Lien on or otherwise
encumbering the relevant Project Owner's interest in such Subsequent Project and
(b) if required by applicable law, such Joint Venture Agreement or the relative
rights of the Joint Venturers in such Subsequent Project (or a memorandum
thereof) shall have been recorded or filed, as applicable, in the appropriate
public records in order to give third parties notice of such Joint Venture
Agreement.
2. Operative Documents.
(a) Delivery to Administrative Agent on behalf of the Banks of executed
originals of:
(i) Amendments, supplements or modifications to each of the
Collateral Documents with respect to such Subsequent Project (or additional
Collateral Documents if reasonably requested by the Technical Committee,
including a Project Owner Guaranty and a Project/Turbine Owner Security
Agreement executed by the Project Owner with respect to such Subsequent Project,
an Equipment Finance Company Security Agreement executed by the Equipment
Finance Company with respect to such Subsequent Project, if applicable, and
Pledge Agreements (Pledged Equity Interests) executed by each Portfolio Entity
with respect to such Subsequent Project (other than the relevant Project Owner
and Equipment Finance Company, if any) and the Non-Affiliated Parents with
respect to such Subsequent Project, if any) considered necessary by the
Technical Committee to ensure that all rights and assets related to such
Subsequent Project, including all real property and personal property comprising
such Subsequent Project and all rights of the relevant Project Owner under any
Joint Venture Agreement relating to such Subsequent Project, have been pledged
to Administrative Agent and the Banks; provided, however, as set forth in the
relevant Project/Turbine Owner Security Agreement, Equipment Finance Company
Security Agreement, Pledge Agreements (Pledged Equity Interests) and Deed of
Trust, the Lien on the Collateral comprising such Subsequent Project and the
ownership interests in the relevant Portfolio Entities shall not secure those
Obligations relating to or arising from Projects that have achieved Operation
prior to the Funding Date.
(ii) Consents to assignment in substantially the form of
Exhibit E-1 or otherwise in form and substance reasonably satisfactory to the
Technical Committee from the counterparties to each Major Project Document
(Major Gas Supply Contracts, Major Power Purchase Agreements and Major Gas
Transportation Agreements only to the extent then in
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existence), electric transmission and interconnection agreements and material
water supply agreements in respect of such Subsequent Project.
(iii) Affiliated Subordination Agreements substantially in the
form of Exhibit D-8 or otherwise in form and substance reasonably satisfactory
to the Technical Committee (or, if applicable, amendments to existing Affiliated
Subordination Agreements) executed by each Affiliate of Calpine (other than the
relevant Project Owner and Equipment Finance Company, if any) entering into
Project Documents with respect to such Subsequent Project considered necessary
by the Technical Committee to subordinate certain O&M Costs that the relevant
Project Owner may incur pursuant to such Project Documents to the Obligations.
Such O&M Costs shall only include amounts payable to such Affiliate which do not
represent reimbursement of costs payable to third parties not Affiliates of
Calpine and shall be subordinated to the Obligations to the same extent as O&M
Costs are subordinated to the Obligations in the corresponding documents
furnished by Borrower pursuant to Section 3.2.8 or otherwise to the extent
satisfactory to the Technical Committee.
(b) Borrower shall have delivered to Administrative Agent the federal
employer number and all other information requested by Administrative Agent with
respect to the Portfolio Entities and the Non-Affiliated Parents, if any, with
respect to such Subsequent Project and all actions shall have been taken to
provide the Banks with a valid and perfected first priority Lien on the
Collateral in respect of such Subsequent Project (except as otherwise approved
by the Technical Committee, including all personal property comprising such
Subsequent Project) including, without limitation, to the extent necessary, the
execution, delivery and recordation of the Deed of Trust and fixture filings
with respect to such Subsequent Project in the appropriate locations, the filing
of UCC-1, UCC-2 or UCC-3 financing statements, as applicable, with respect to
such Collateral with the Secretary of State and/or other appropriate filing
office in the states in which such Subsequent Project is located, the states of
formation of the relevant Portfolio Entities or Non-Affiliated Parents or the
states in which such Portfolio Entities' or Non-Affiliated Parents' principal
places of business are located, the delivery of the Pledged Equity Interests of
the Portfolio Entities with respect to such Subsequent Project in accordance
with the relevant Pledge Agreements (Pledged Equity Interests) and the delivery
of a Portfolio Entity Note executed by the relevant Project Owner and Equipment
Finance Company, if any.
(c) Delivery to Administrative Agent on behalf of the Banks of a
certified list of, and true and correct copies of, each Project Document with
respect to such Subsequent Project then in effect (including all the Major
Project Documents (other than Major Gas Supply Contracts (other than Gas Supply
Contracts with Affiliates of Borrower) and Major Power Purchase Agreements),
electric transmission and interconnection agreements and material water supply
agreements), and, in each case, any supplements or amendments thereto, and all
of which Project Documents shall be certified by a Responsible Officer of
Borrower as being true, complete and correct and in full force and effect on the
Funding Date and a Responsible Officer of Borrower shall deliver to
Administrative a certificate stating that neither the relevant Project Owner
nor, to Borrower's knowledge, any other party to any such Project Document is
or, but for the passage of time or giving of notice or both will be, in breach
of any material obligation thereunder, and that all conditions precedent to the
performance of the parties under such Project Documents then required to have
been performed have been satisfied.
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(d) Delivery to Administrative Agent of (i) all shared use agreements
and/or joint ownership agreements reasonably requested by the Technical
Committee evidencing the relevant Project Owner's interests, rights and
obligations with respect to any shared facilities incorporated into or used with
respect to such Subsequent Project, (ii) all intercreditor agreements and/or
non-disturbance agreements reasonably requested by the Technical Committee
establishing the relative rights and remedies between Administrative Agent on
behalf of the Banks and any other Persons with interests in any such shared
facilities or other properties incorporated into or used with respect to such
Subsequent Project and (iii) in the case of a Subsequent Project where the
relevant Project Owner is directly or indirectly partially owned by Borrower,
all joint venture, joint operating or other documents relating to the joint
ownership or joint governance of such Project Owner between the Portfolio
Entities and the Non-Affiliated Parents with respect to such Subsequent Project.
3. Insurance. Insurance with respect to such Subsequent Project complying with
Exhibit K to the Credit Agreement (as the same may be modified to include such
Subsequent Project) shall be in full force and effect and Administrative Agent
on behalf of the Banks shall have received (a) a certificate from Borrower's
insurance broker(s), dated as of the Funding Date and identifying underwriters,
type of insurance, insurance limits and policy terms, listing the special
provisions required as set forth in Exhibit K, describing the insurance obtained
and stating that such insurance is in full force and effect and that all
premiums due thereon have been paid and that, in the opinion of such broker(s),
such insurance complies with Exhibit K, and (b) certified copies of all policies
evidencing such insurance (or a binder, commitment or certificates signed by the
insurer or a broker authorized to bind the insurer).
4. Certificate of the Independent Engineer. Delivery to Administrative Agent on
behalf of the Banks of the Independent Engineer's certificate with respect to
such Subsequent Project, in substantially the form of Exhibit F-6, with the
Independent Engineer's report with respect to such Subsequent Project attached
thereto, confirming that the revenue assumptions approved by the Power Marketing
Consultant in its report delivered to Administrative Agent on behalf of the
Banks pursuant to this Schedule 3.3.41 and fuel price assumptions approved by
the Fuel Consultant in its report delivered to Administrative Agent on behalf of
the Banks pursuant to this Schedule 3.3.41 have been properly incorporated into
the Base Case Project Projections and that the Project Schedule with respect to
such Subsequent Project is consistent with the applicable Project Budget, and
the Technical Committee shall be satisfied that the projected O&M Costs and the
projected performance (including output, heat rate, environmental and Permit
compliance, and availability, individually or taken as a whole) of such
Subsequent Project as reflected in the Base Case Project Projections delivered
to Administrative Agent on behalf of the Banks as contemplated in this Schedule
3.3.41 and the design and other technical aspects of, such Subsequent Project,
are reasonable and achievable in a manner consistent with the applicable Project
Budget and Project Schedule.
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5. Reports of the Environmental Consultant. Delivery to Administrative Agent on
behalf of the Banks of Borrower's Environmental Consultant's Phase I reports
with respect to such Subsequent Project and, if a Phase II environmental review
is warranted by any of such Phase I reports, as reasonably determined by the
Technical Committee, delivery to Administrative Agent on behalf of the Banks of
a Phase II report, in each case, along with the corresponding reliance letters
from such Environmental Consultant either (i) confirming that no Hazardous
Substances were found in, on or under the Site or Easements of such Subsequent
Project or (ii) disclosing matters that are otherwise satisfactory to the
Technical Committee.
6. Certificate of the Fuel Consultant. Delivery to Administrative Agent on
behalf of the Banks of the Fuel Consultant's certificate with respect to such
Subsequent Project, in substantially the form of Exhibit F-8, with the Fuel
Consultant's report with respect to such Subsequent Project attached thereto,
confirming that there is sufficient fuel available to such Subsequent Project to
operate such Subsequent Project in the manner contemplated by, and in accordance
with the fuel price assumptions incorporated in the Base Case Project
Projections delivered to Administrative Agent on behalf of the Banks as
contemplated in this Schedule 3.3.41 and that the Fuel Plan delivered to
Administrative Agent on behalf of the Banks as contemplated in this Schedule
3.3.41 for such Subsequent Project constitutes a reasonable plan for the supply
and transportation of fuel for such Project under existing and expected market
conditions affecting such Subsequent Project and consistent with the intended
operation thereof.
7. Certificate of Power Marketing Consultant. Delivery to Administrative Agent
on behalf of the Banks of a Power Marketing Consultant's certificate with
respect to such Subsequent Project, in substantially the form of Exhibit F-9,
with a Power Marketing Consultant's report with respect to such Subsequent
Project attached thereto, confirming that the revenue assumptions incorporated
in the Base Case Project Projections delivered to Administrative Agent on behalf
of the Banks as contemplated in this Schedule 3.3.41 are reasonable in light of
existing and expected market conditions affecting such Subsequent Project.
8. Power Marketing Plan. Delivery to Administrative Agent on behalf of the Banks
of a plan with respect to power marketing setting forth Borrower's good faith
assessment of the projected sales of power with respect to such Subsequent
Project, which plan shall not in any way be construed to modify or limit
Borrower's rights and obligations set forth herein, substantially in the form of
the Power Marketing Plans furnished by Borrower pursuant to Section 3.2.16 and
with such additional changes as may be appropriate under the circumstances.
9. Fuel Plan. Delivery to Administrative Agent on behalf of the Banks of a plan
with respect to fuel setting forth Borrower's good faith assessment of such
Subsequent Project's projected fuel consumption needs and fuel supply and
transportation strategy, which plan shall not in any way be construed to modify
or limit Borrower's rights and obligations set forth herein, substantially in
the form of the Fuel Plans delivered furnished by Borrower pursuant to Section
3.2.17 and with such additional changes satisfactory in form and substance to
the Fuel Consultant as may be appropriate under the circumstances.
10. No Change in Tax Laws. No change shall have occurred, since the date upon
which this Agreement was executed and delivered, in any law or regulation or
interpretation thereof that would subject any Bank to any material unreimbursed
Tax or Other Tax.
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11. Absence of Litigation. (a) No action, suit, proceeding or investigation
shall have been instituted or threatened against any Portfolio Entity in respect
of such Subsequent Project which could reasonably be expected to have a Material
Adverse Effect on Borrower or such Subsequent Project, and (b) except for the
applicability of the FPA solely by reason of the relevant Project Owner being an
Exempt Wholesale Generator, no order, judgment or decree shall have been issued
or proposed to be issued by any Governmental Authority that, as a result of the
construction, ownership, leasing or operation of such Subsequent Project, the
sale of electricity or steam therefrom or the entering into of any Operative
Document with respect to such Subsequent Project or any transaction contemplated
hereby or thereby, would cause or deem the Banks, any Portfolio Entity or any
Affiliate of any of them to be subject to, or not exempted from, regulation
under the FPA or PUHCA or under state laws and regulations respecting the rates
or the financial or organizational regulation of electric utilities.
12. Payment of Filing Fees. All amounts required to be paid to or deposited with
the Banks (including the Activation Fee) in respect of such Subsequent Project,
and all taxes, fees and other costs payable in connection with the execution,
delivery, recordation and filing of the documents and instruments referred to in
this Schedule 3.3.41, shall have been paid in full or, as approved by the
Technical Committee, provided for.
13. UCC Reports. Administrative Agent on behalf of the Banks shall have received
a UCC report of a date reasonably close to the Funding Date for each of the
jurisdictions in which any UCC-1 financing statements or amendments thereto are
intended to be filed in respect of the Collateral with respect to such
Subsequent Project, showing that upon due filing (assuming such filing or
recordation occurred on the date of such respective reports), the security
interests created under the Collateral Documents with respect to such Subsequent
Project will be prior to all other financing statements or other security
documents wherein the security interest is perfected by filing in respect of
such Collateral.
14. Project Budgets. Borrower shall have furnished Administrative Agent on
behalf of the Banks budgets in substantially the form of the Project Budgets
delivered pursuant to Section 3.1.14 but with such changes as are required to
address the specifics of such Subsequent Project for all anticipated costs to be
incurred in connection with the construction and start-up of such Subsequent
Project, including in such budgets all construction and non-construction costs,
and including all interest, taxes and other carrying costs, together with a
balanced statement of sources (including an allocation between Construction Loan
proceeds and Contributions) and uses of proceeds (and any other funds necessary
to complete such Subsequent Project), broken down as to separate construction
phases and components.
15. Project Schedule. Borrower shall have furnished Administrative Agent a
project schedule with respect to such Subsequent Project in substantially the
form of the Project Schedules delivered pursuant to Section 3.2.25 but with such
changes as are required to address the specifics of such Subsequent Project and
showing a guaranteed completion date for such Subsequent Project that is on or
before the Loan Maturity Date and which is consistent with the Base Case Project
Projections delivered pursuant to Section 16 of this Schedule 3.3.41 and the
Independent Engineer's report delivered pursuant to Section 4 of this Schedule
3.3.41.
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16. Base Case Project Projections. Borrower shall have furnished to
Administrative Agent on behalf of the Banks the combined Base Case Project
Projections of operating expenses and cash flow for all Funded Initial Projects
and Funded Subsequent Projects (including such Subsequent Project) showing, for
each year in such projections, a projected annual Four-Quarter Portfolio
Interest Coverage Ratio equal to or exceeding 2.25 to 1.00 (which ratio shall be
supported by the projections set forth in the Independent Consultant's reports
delivered pursuant to Sections 3.2 and 3.3 with respect to such Projects) in
substantially the form (including the duration thereof) of those projections
delivered pursuant to Section 3.1.16.
17. No Material Adverse Change. No event or circumstance having a Material
Adverse Effect with respect to Borrower has occurred since the Closing Date,
and, with respect to such Subsequent Project, no event or circumstance having a
Material Adverse Effect with respect to such Subsequent Project shall have
occurred.
18. Title Policies. Borrower shall have delivered to Administrative Agent on
behalf of the Banks a lender's A.L.T.A. policy of title insurance, together with
such endorsements as are required by the Technical Committee (without a
mechanics' and materialmen's exception included in such title policy, except
where applicable Governmental Rules prevent the deletion of such exception), or
commitment to issue such policy, dated as of the Funding Date (x) in an amount
equal to 50% of the aggregate amount of Project Costs set forth in the Project
Budget for such Subsequent Project (or such other amount as is reasonably
acceptable to the Technical Committee) and (y) with such reinsurance as is
satisfactory to the Technical Committee, issued by the Title Insurer in form and
substance satisfactory to the Technical Committee, insuring (or agreeing to
insure) that:
(a) the relevant Project Owner has a good, marketable and insurable fee
or leasehold title to or right to control, occupy and use the Site and the
Easements with respect to such Subsequent Project, free and clear of liens,
encumbrances or other exceptions to title except Permitted Liens described in
clause (a), (b) or (e) of the definition thereof, those otherwise permitted
pursuant to this Section 18 of Schedule 3.3.41 and those satisfactory to the
Technical Committee and specified on such policy; and
(b) the Deed of Trust with respect to such Subsequent Project is (or
will be when recorded) a valid first lien on the Mortgaged Property with respect
to such Subsequent Project, free and clear of all liens, encumbrances and
exceptions to title whatsoever, other than those encumbrances permitted pursuant
to clause (a) above.
19. Regulatory Status. Such Subsequent Project shall (a) have complied with the
requirements of 18 C.F.R. Section 292.207 required to be complied with as of the
Funding Date and delivered to Administrative Agent on behalf of the Banks either
(i) a certificate of FERC certifying such Subsequent Project as a Qualifying
Facility, or (ii) documentation evidencing the self-certification of such
Subsequent Project as a Qualifying Facility and a legal opinion of counsel to
the Portfolio Entities with respect to the effectiveness of such documentation
to qualify such Subsequent Project as a Qualifying Facility or (b) be or be
capable of becoming an Eligible Facility, and (x) if the relevant Project Owner
has previously filed an application with FERC for a determination that such
Project Owner is an Exempt Wholesale Generator, Borrower shall have delivered to
the Technical Committee a copy of an additional or supplemental application
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regarding Exempt Wholesale Generator with respect to such Subsequent Project
filed by such Project Owner with FERC and (y) the Technical Committee shall have
received a legal opinion of counsel to the Portfolio Entities to the effect that
(i) if FERC has previously determined that such Project Owner is an Exempt
Wholesale Generator, such Subsequent Project will not adversely impact such
Project Owner's status as an Exempt Wholesale Generator or (ii) if FERC has not
yet determined that such Project Owner is an Exempt Wholesale Generator, there
exists no reasonable basis for FERC to deny an application filed by such Project
Owner pursuant to Section 5.12.1 for Exempt Wholesale Generator status.
20. Calpine Compliance. No "event of default" (as defined therein) that are
greater than $10,000,000 under any agreement or instrument documenting or
evidencing any of Calpine's Debt obligations shall have occurred and be
continuing.
21. Calpine Guaranties. Calpine shall have executed (a) an acknowledgement, in
form and substance satisfactory to the Technical Committee, that such Subsequent
Project shall be included with the obligations undertaken pursuant to the
Project Completion Guaranty and (b) (i) in the case of each Person party to a
Project Document that is directly or indirectly more than 50% owned by Calpine
(other than the relevant Project Owner and Equipment Finance Company, if any),
an Affiliated Party Agreement Guaranty in respect of each Project Document
(guarantying 100% of such Person's obligations under each such Project Document)
entered into between the relevant Project Owner and such Person for such
Subsequent Project or (ii) in the case of each Person party to a Project
Document that is directly or indirectly 50% owned by Calpine (other than the
relevant Project Owner and Equipment Finance Company, if any), an Affiliated
Party Agreement Guaranty in respect of each Project Document (guarantying at
least Calpine's percentage ownership interest of such Person's obligations under
each such Project Document) entered into between the relevant Project Owner and
such Person for such Subsequent Project; provided, in the case of clause (b)(ii)
of this Section 21 of this Schedule 3.3.41, Borrower shall also deliver to
Administrative Agent a guaranty agreement in favor of the relevant Project Owner
in respect of each such Project Document, executed by a guarantor satisfactory
to the Technical Committee and in form and substance satisfactory to the
Technical Committee, guarantying those obligations of such Person under each
such Project Document not otherwise addressed in the Affiliated Party Agreement
Guaranty delivered pursuant to such clause.
22. Updated Exhibits. Borrower shall have delivered to Administrative Agent
supplements to (a) Exhibit G-8 (Hazardous Substances) referencing the
environmental reports in respect of such Subsequent Project that were delivered
to Administrative Agent on behalf of the Banks pursuant to this Schedule 3.3.41,
(b) Exhibit D-6 reflecting the filings and recordings required to be made to
perfect security interests in the Collateral in respect of such Subsequent
Project, and (c) Exhibit K reflecting any additional or revised insurance
policies or coverages required by the Insurance Consultant to account for such
Subsequent Project.
23. Diversification Requirements. Such Subsequent Project satisfies the
Diversification Requirements.
24. Calpine Corporation Credit Rating. Calpine shall be rated at least Ba2 by
▇▇▇▇▇'▇ and BB by S&P.
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Schedule 4.24
Chief Executive Offices of Portfolio Entities
As used in this Schedule 4.24, the following terms shall apply
"Chief Executive Office" shall mean the chief executive office or chief
place of business as that term is used in Article 9 of the Uniform Commercial
Code as in effect in each state where the Projects are located and the States of
California and New York from time to time
"Corporate" shall mean the Corporate Headquarters of Calpine Corporation,
located at ▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"CRO" shall mean the Central Regional Office of Calpine Corporation,
located at ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
"ERO" shall mean the Eastern Regional Office of Calpine Corporation,
located at The ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"FEIN" shall mean federal employer identification number
"WRO" shall mean the Western Regional Office of Calpine Corporation,
located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Portfolio Entities Chief Executive Office and FEIN
Calpine Construction Finance Company, II LLC
Chief Executive Office: Corporate
FEIN: ▇▇-▇▇▇▇▇▇▇
CCFC II Development Company, LLC
Chief Executive Office: Corporate
FEIN: ▇▇-▇▇▇▇▇▇▇
CCFC II Equipment Finance Holdings, LLC
Chief Executive Office: Corporate
FEIN: ▇▇-▇▇▇▇▇▇▇
CCFC II Equipment Finance Company, LLC
Chief Executive Office: Corporate
FEIN: ▇▇-▇▇▇▇▇▇▇
CCFC II Project Equipment Finance Company One, LLC
Chief Executive Office: Corporate
FEIN: ▇▇-▇▇▇▇▇▇▇
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613
Los Medanos Energy Center, LLC
Chief Executive Office Corporate, WRO
FEIN: ▇▇-▇▇▇▇▇▇▇
Delta Energy Center, LLC
Chief Executive Office: Corporate, WRO
FEIN: ▇▇-▇▇▇▇▇▇▇
CPN Delta Holdings LLC
Chief Executive Office: Corporate, WRO
FEIN: ▇▇-▇▇▇▇▇▇▇
Corpus Christi Cogeneration LP
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
SkyGen SouthCoast Investors LLC
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
Nueces Bay Energy LLC
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
Decatur Energy Center, LLC
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇▇ Energy Center, LLC
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
Baytown Energy Center, LP
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
Calpine Baytown Energy Center GP, LLC
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
Calpine Baytown Energy Center LP, LLC I
Chief Executive Office: Corporate, CRO
FEIN:▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Energy LLC
Chief Executive Office: Corporate, CRO
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614
FEIN ▇▇-▇▇▇▇▇▇▇
Calpine ▇▇▇▇▇ Power, L.P.
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
Calpine ▇▇▇▇▇ Power I, LLC
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
Calpine ▇▇▇▇▇ Power II, LLC
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
Freestone Power Generation, LP
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
Calpine Power Equipment LP
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
CPN Freestone, Inc.
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
Calpine Freestone, Inc.
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
Channel Energy Center, LP
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
Calpine Channel Energy Center GP, LLC
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
Calpine Channel Energy Center LP, LLC
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
Nueces Bay Energy LLC
Chief Executive Office: Corporate, CRO
FEIN: ▇▇-▇▇▇▇▇▇▇
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615
Broad River Investors LLC
Chief Executive Office: Corporate, ERO
FEIN ▇▇-▇▇▇▇▇▇▇
Santa ▇▇▇▇ Energy LLC
Chief Executive Office: Corporate, ERO
FEIN: ▇▇-▇▇▇▇▇▇▇
4