Support Obligations. (a) Prior to Closing, Parent shall use its commercially reasonable efforts (and shall reasonably cooperate with the Sellers’ efforts) to terminate, or cause Parent or any of the Acquired Companies to be substituted in all respects for the Seller and their Affiliates (other than the Acquired Companies) under, and the Sellers, their Affiliates (other than the Acquired Companies), and where applicable, their sureties or letter of credit issuers, to be released from their respective obligations under, the Support Obligations set forth in Section 6.10 of the Company Disclosure Schedule as soon as possible after Closing. In furtherance and not in limitation of the preceding sentence, at the Sellers’ request, Parent will offer (and provide, if accepted) (i) a sufficient amount of letters of credit, (ii) cash collateral, and (iii) to assume the Sellers’ or their Affiliates’ obligations under guaranties, to the counterparties with respect to the Support Obligations to enable the Sellers and their Affiliates to terminate such Support Obligations without liability or otherwise be released or replaced in connection therewith; provided that, with respect to each Support Obligation, Parent shall not be required under this Section 6.10 to deliver replacement credit support of the same type as, or with terms and conditions substantially similar to, such Support Obligations, provided that the replacement credit support delivered by Parent complies with the terms and conditions of the applicable Contract or is otherwise acceptable to the counterparty thereto. For any Support Obligations for which Parent or any of the Acquired Companies, as applicable, is not substituted in all respects for the Sellers and their Affiliates (and for which the Sellers and their Affiliates are not released) effective as of the Closing, (a) Parent shall continue to use its commercially reasonable efforts and shall cause the Acquired Companies to use their commercially reasonable best efforts to effect such substitution and release as soon as possible after the Closing, and provided, that in the event that any Support Obligation cannot be replaced at or prior to the Closing, Parent’s obligations hereunder shall be satisfied if Parent or its Affiliate enters into at Closing a back-to-back guarantee with respect to such Support Obligation for the benefit of the Sellers in the form of an irrevocable, standby letter of credit or other similar form of security for 100% of the Sellers’ or their Affiliates’ obligations with respect to such Support Obligation and (b) the Sellers and their Affiliates shall continue to maintain such support Obligations as required pursuant to the terms of the Support Obligations and the related Contracts. (b) If any continuing Support Obligation addressed by the last sentence of Section 6.10(a) is drawn upon after the Closing Date, Parent shall pay, or cause the applicable Acquired Company to pay, Sellers or their designees the amount so claimed or drawn within ten (10) Business Days after the date of the draw. If Parent, or the applicable Acquired Company, fails to pay Sellers or their designees during such ten (10) Business Day period, Sellers may draw upon the back-to-back guarantee provided by Parent or its Affiliate in accordance with the terms thereof.
Appears in 2 contracts
Samples: Stock Purchase Agreement and Agreement and Plan of Merger, Stock Purchase Agreement and Agreement and Plan of Merger (Dynegy Inc.)
Support Obligations. (a) Prior to Closing, Parent shall use its commercially reasonable efforts (and shall reasonably cooperate with the Sellers’ efforts) to terminate, or cause Parent or any of the Acquired Companies to be substituted in all respects for the Seller and their Affiliates (other than the Acquired Companies) under, and the Sellers, their Affiliates (other than the Acquired Companies), and where applicable, their sureties or letter of credit issuers, to be released from their respective obligations under, the Support Obligations set forth in Section 6.10 of the Company Disclosure Schedule as soon as possible after Closing. In furtherance and not in limitation of the preceding sentence, at the Sellers’ request, Parent will offer (and provide, if accepted) (i) a Buyer recognizes that Seller and certain of its Affiliates have provided credit support to the Paper Group, their Subsidiaries and the Business and may have to (but shall not be obligated to) provide other credit support in connection with the transactions contemplated by this Agreement (collectively, the “Support Obligations”). Buyer shall use reasonable best efforts to effect the full and unconditional release of Seller and its Affiliates from all Support Obligations, including by the issuance, to the beneficiaries thereof, in sufficient amount of letters of credit, guaranties, cash collateral and/or other credit support as would reasonably be expected to cause the release of the Support Obligations.
(ii) cash collateralIn connection with replacement of such Support Obligation by Buyer, Buyer and (iii) Seller shall cooperate to assume cause the Sellers’ beneficiary or their Affiliates’ obligations under guaranties, to the counterparties with respect to beneficiaries of the Support Obligations to enable terminate and redeliver to Seller or its Affiliates, as applicable, as soon as practicable, each original copy of each original guaranty, letter of credit or other instrument constituting or evidencing such Support Obligations as well as to redeliver to Seller and its Affiliates, any cash collateral in respect of the Sellers Support Obligations and, as to any Support Obligations terminated after the Closing, promptly to redeliver such originals or cash to Seller or its Affiliates, as applicable, and their Affiliates in each case, to take such other actions as may be required to terminate such Support Obligations without liability or otherwise be released or replaced Obligations.
(iii) If Buyer is not successful in connection therewith; provided that, with respect to each Support Obligation, Parent shall not be required under this Section 6.10 to deliver replacement credit support obtaining the complete and unconditional release of Seller and its Affiliates from the same type as, or with terms and conditions substantially similar to, such Support Obligations, provided that the replacement credit support delivered by Parent complies with the terms and conditions of the applicable Contract or is otherwise acceptable to the counterparty thereto. For any Support Obligations for which Parent or any of the Acquired Companies, as applicable, is not substituted in all respects for the Sellers and their Affiliates (and for which the Sellers and their Affiliates are not released) effective as of the Closing, (a) Parent shall continue to use its commercially reasonable efforts and shall cause the Acquired Companies to use their commercially reasonable best efforts to effect such substitution and release as soon as possible after the Closing, and provided, that in the event that any Support Obligation cannot be replaced at or prior to the Closing, Parent’s obligations hereunder then Buyer shall be satisfied if Parent continue to try to obtain such release after Closing and shall indemnify, defend and hold harmless Seller and its Affiliates from and against any and all Losses incurred by any such indemnified Persons in connection with the Support Obligations. Buyer shall, for so long as any Support Obligation remains outstanding, not, and shall cause each member of the Paper Group and their respective Subsidiaries not to, effect any amendments or its Affiliate enters into at Closing a back-to-back guarantee with respect modifications or any other changes to the contracts, guaranties or letters of credit to which any of such Support Obligations relate, or otherwise take any action that would effect any change to such contracts, guaranties or letters of credit, without Seller’s prior written consent.
(iv) Notwithstanding anything in this Agreement to the contrary, during the period from the date of this Agreement until the Closing Date, Buyer shall have the right to contact and have discussions with each beneficiary of a Support Obligation for the benefit of the Sellers in the form of an irrevocableorder to satisfy its obligations under this Section 8O; provided that (a) Buyer shall give Seller prior notice before making any such contact, standby letter of credit or other similar form of security for 100% of the Sellers’ or their Affiliates’ obligations with respect to such Support Obligation and (b) Seller shall have the Sellers right to have one of its representatives present on the telephone line or in person, as applicable, during any such contact or discussion, (c) Buyer shall only contact and their Affiliates hold discussions with such beneficiaries through representatives of Buyer previously approved by Seller, and (d) Buyer shall continue cause such representatives to maintain comply with all procedures and protocols regarding such support Obligations as required contacts and discussions that may be established by Seller.
(v) Prior to the Release Date, each of Buyer and Buyer Sub agrees not to assign, sell, transfer or convey all or any portion of the Target Units and/or the Paper Units and shall cause the members of the Paper Group not to assign, sell, transfer or convey all or any substantial portion of the assets of the Paper Group and its Subsidiaries, in a single transaction or series of related transactions, in each case without the assignment to the transferee of the rights of Buyer and Buyer Sub under this Agreement and the assumption in writing by the transferee (which assumption shall be enforceable by Seller and its Affiliates) of the obligations of Buyer and Buyer Sub under this Agreement (including the obligations of Buyer and Buyer Sub pursuant to this Section 8O); provided that, for the terms avoidance of doubt, the sale of equity interests of Buyer (whether accomplished by merger or otherwise) shall not be deemed a sale, transfer, conveyance or assignment for purposes of this Section 8O. Buyer and Buyer Sub agree to take such actions such that any assignment, sale, transfer or conveyance in contravention of the preceding sentence shall be null and void ab initio. Buyer and Buyer Sub agrees to provide Seller with a copy of such assignment and assumption agreement prior to execution and prior to the assignment, sale, transfer or conveyance and a copy of the executed assignment and assumption agreement which shall be in the same form with such changes as Seller may reasonably request. Upon such an assignment, sale, transfer or conveyance pursuant to which the transferee assumes all of Buyer’s and Buyer Sub’s rights and obligations under this Agreement, Buyer and Buyer Sub shall have no further rights or obligations under this Agreement (except for obligations relating to breaches by Buyer and/or Buyer Sub occurring prior to the date of the assignment, sale, transfer or conveyance). The “Release Date” shall be the later of the date on which all of the Support Obligations have been fully and unconditionally released and the related Contractsdate on which Seller has no more obligations owing to Buyer and/or Buyer Sub under this Agreement.
(b) If any continuing Support Obligation addressed by the last sentence of Section 6.10(a) is drawn upon after the Closing Date, Parent shall pay, or cause the applicable Acquired Company to pay, Sellers or their designees the amount so claimed or drawn within ten (10) Business Days after the date of the draw. If Parent, or the applicable Acquired Company, fails to pay Sellers or their designees during such ten (10) Business Day period, Sellers may draw upon the back-to-back guarantee provided by Parent or its Affiliate in accordance with the terms thereof.
Appears in 2 contracts
Samples: Purchase and Sale Agreement (Aldabra 2 Acquisition Corp.), Purchase and Sale Agreement (Boise Cascade Holdings, L.L.C.)
Support Obligations. (a) Prior to Closing, Parent Purchaser shall use its commercially reasonable efforts (and shall reasonably cooperate with the Sellers’ efforts) to terminate, or cause Parent Purchaser or any of the Acquired Companies to be substituted in all respects for the Seller and their Affiliates (other than the Acquired Companies) under, and the Sellers, their Affiliates (other than the Acquired Companies), and where applicable, their sureties or letter of credit issuers, to be released from their respective obligations under, the Support Obligations set forth in Section 6.10 of the Company Disclosure Schedule as soon as possible after Closing. In furtherance and not in limitation of the preceding sentence, at the Sellers’ request, Parent Purchaser will offer (and provide, if accepted) (i) a sufficient amount of letters of credit, (ii) cash collateral, and (iii) to assume the Sellers’ or their Affiliates’ obligations under guaranties, to the counterparties with respect to the Support Obligations to enable the Sellers and their Affiliates to terminate such Support Obligations without liability or otherwise be released or replaced in connection therewith; provided that, with respect to each Support Obligation, Parent Purchaser shall not be required under this Section 6.10 to deliver replacement credit support of the same type as, or with terms and conditions substantially similar to, such Support Obligations, provided that the replacement credit support delivered by Parent Purchaser complies with the terms and conditions of the applicable Contract or is otherwise acceptable to the counterparty thereto. For any Support Obligations for which Parent Purchaser or any of the Acquired Companies, as applicable, is not substituted in all respects for the Sellers and their Affiliates (and for which the Sellers and their Affiliates are not released) effective as of the Closing, (a) Parent Purchaser shall continue to use its commercially reasonable efforts and shall cause the Acquired Companies to use their commercially reasonable best efforts to effect such substitution and release as soon as possible after the Closing, and provided, that in the event that any Support Obligation cannot be replaced at or prior to the Closing, ParentPurchaser’s obligations hereunder shall be satisfied if Parent Purchaser or its Affiliate enters into at Closing a back-to-back guarantee with respect to such Support Obligation for the benefit of the Sellers in the form of an irrevocable, standby letter of credit or other similar form of security for 100% of the Sellers’ or their Affiliates’ obligations with respect to such Support Obligation and (b) the Sellers and their Affiliates shall continue to maintain such support Support Obligations as required pursuant to the terms of the Support Obligations and the related Contracts.
(b) If any continuing Support Obligation addressed by the last sentence of Section 6.10(a) is drawn upon after the Closing Date, Parent Purchaser shall pay, or cause the applicable Acquired Company to pay, Sellers or their designees the amount so claimed or drawn within ten (10) Business Days after the date of the draw. If ParentPurchaser, or the applicable Acquired Company, fails to pay Sellers or their designees during such ten (10) Business Day period, Sellers may draw upon the back-to-back guarantee provided by Parent Purchaser or its Affiliate in accordance with the terms thereof.
Appears in 1 contract
Support Obligations. (a) Prior On or prior to Closingthe Closing Date, Parent Buyer shall use its commercially reasonable efforts (and shall reasonably cooperate with the Sellers’ efforts) to terminate, or cause Parent or any replace each of the Acquired Companies to be substituted in all respects for the Seller and their Affiliates (other than the Acquired Companies) under, and the Sellers, their Affiliates (other than the Acquired Companies), and where applicable, their sureties or letter of credit issuers, to be released from their respective obligations under, the Support Obligations set forth in Section 6.10 of the Company Disclosure Schedule as soon as possible after Closing. In furtherance and not in limitation of the preceding sentencewith parent guarantees, at the Sellers’ request, Parent will offer (and provide, if accepted) (i) a sufficient amount of letters of credit, bonds, indemnities, or another credit assurance of comparable and sufficient nature, in each case in form that satisfies the requirements of the underlying Contract requiring provision of such Support Obligations in such a manner that each such Support Obligation is released and returned by the beneficiary thereof, or cancelled or otherwise terminated, by the Closing Date. Notwithstanding the foregoing, Sellers (iiacting in their sole discretion) cash collateral, and (iii) shall have the option to assume elect to waive the Sellers’ or their Affiliates’ obligations under guaranties, to the counterparties condition precedent with respect to the replacement of any individual Support Obligations in order to enable facilitate timely Closing, in which case Buyer shall be obligated to complete such replacement in the Sellers same manner within 10 Business Days after the Closing, and their Affiliates to terminate in the event of any draw on or claim against the applicable Support Obligation in the period after the Closing and before replacement of such Support Obligations without liability or otherwise be released or replaced in connection therewith; provided thatObligation by Xxxxx, with respect Xxxxx agrees to each Support Obligation, Parent shall not be required under this Section 6.10 to deliver replacement credit support of the same type as, or with terms indemnify and conditions substantially similar to, such Support Obligations, provided that the replacement credit support delivered by Parent complies with the terms and conditions of the applicable Contract or is otherwise acceptable to the counterparty thereto. For any Support Obligations for which Parent or any of the Acquired Companies, as applicable, is not substituted in all respects for the hold harmless Sellers and their Affiliates (excluding for the avoidance of doubt, any Company Entity) for any and for which all resulting Losses (including the payment of any costs incurred by Sellers and their Affiliates are not released) effective as of the Closing, (a) Parent shall continue to use its commercially reasonable efforts and shall cause the Acquired Companies to use their commercially reasonable best efforts to effect in maintaining such substitution and release as soon as possible after the ClosingSupport Obligations), and provided, that in the event that any Support Obligation cannot be replaced at or Buyer shall deliver to Sellers prior to the Closing, Parent’s obligations hereunder shall be satisfied if Parent or its Affiliate enters into at Closing a backfirst-todemand, non-back revocable and transferrable bank guarantee with respect to such Support Obligation for the benefit of the Sellers in the form of an irrevocable, standby or letter of credit, issued by an international bank of primary standing (and with a credit rating of investment grade by a reputable rating agency), in a form reasonably satisfactory to Sellers, guaranteeing without any exceptions or other similar form of security for 100% of the Sellers’ or their Affiliates’ conditions Buyer’s indemnification obligations with respect to such Support Obligation and (b) the Sellers and their Affiliates shall continue to maintain such support Obligations as required under this Section 6.07, that is callable, pursuant to the terms of the Support Obligations and the related Contracts.
(b) If any continuing Support Obligation addressed by the last sentence of Section 6.10(a) is drawn upon after the Closing Date, Parent shall pay, or cause the applicable Acquired Company to pay, Sellers or their designees the amount so claimed or drawn within ten (10) Business Days after the date of the draw. If Parent, or the applicable Acquired Company, fails to pay Sellers or their designees during such ten (10) Business Day period, Sellers may draw upon the back-to-back guarantee provided by Parent or its Affiliate in accordance with its terms until the terms thereoflater of (i) the full release of all outstanding Support Obligations, and (ii) the full and final discharge of all of Buyer’s obligations under this Section 6.07.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (Ormat Technologies, Inc.)
Support Obligations. (a) Prior to Closing, Parent Purchaser shall use its commercially reasonable efforts (to replace and shall reasonably cooperate with effect the Sellers’ efforts) to terminaterelease of, or cause Parent or any of the Acquired Companies to be substituted in all respects for the Seller and their Affiliates (other than the Acquired Companies) under, and the Sellers, their Affiliates (other than the Acquired Companies), and where applicable, their sureties or letter of credit issuers, to be released from their respective obligations under, the Support Obligations set forth in Section 6.10 of the Company Disclosure Schedule as soon as possible after Closing. In furtherance and not in limitation of the preceding sentence, at the Sellers’ request, Parent will offer (and provide, if accepted) (i) a sufficient amount of letters of credit, (ii) cash collateral, and (iii) to assume the Sellers’ or their Affiliates’ obligations under guaranties, to the counterparties with respect to the Support Obligations to enable the Sellers and their Affiliates to terminate such Support Obligations without liability or otherwise be released or replaced in connection therewith; provided that, with respect to each Support Obligation, Parent shall not be required under this Section 6.10 to deliver replacement credit support of the same type as, or with terms and conditions substantially similar to, such Support Obligations, provided that the replacement credit support delivered by Parent complies with the terms and conditions of the applicable Contract or is otherwise acceptable to the counterparty thereto. For any Support Obligations for which Parent or any of the Acquired Companies, as applicable, is not substituted in all respects for the Sellers and their Affiliates (and for which the Sellers and their Affiliates are not released) effective as of the Closing, the non-cash credit support obligations provided with respect to the Companies and the Facilities listed on Section 6.12 of the Disclosure Letter (athe “Non-Cash Credit Support Obligations”), including by:
(i) Parent furnishing a letter of credit to replace each existing letter of credit that is a Non-Cash Credit Support Obligation containing terms and conditions that are substantially similar to the terms and conditions of such existing letter of credit, or otherwise reasonably acceptable to Purchaser, and from an Acceptable LOC Bank; and
(ii) with respect to the Non-Cash Credit Support Obligations consisting of guarantees on Section 6.12 of the Disclosure Letter, offering to provide a letter of credit from an Acceptable LOC Bank in replacement of such guarantee in an amount up to the maximum amount set forth under “Subject Amount” next to such guarantee on Section 6.12 of the Disclosure Letter.
(b) If Purchaser is not successful, following the use of commercially reasonable efforts, in obtaining the release of a Non-Company Affiliate from any Non-Cash Credit Support Obligations prior to the Closing (each such Non-Cash Credit Support Obligation, until such time as such Non-Cash Credit Support Obligation is released in accordance with Section 6.12(b)(i), a “Continuing Support Obligation”) then, from and after the Closing:
(i) Purchaser shall continue to use its commercially reasonable efforts and to obtain the release of the applicable Non-Company Affiliate from such Continuing Support Obligation;
(ii) Purchaser shall cause the Acquired Companies deliver to use their commercially reasonable best efforts to effect such substitution and release as soon as possible after Calpine at the Closing, and providedmaintain at all times until the release of such Continuing Support Obligation in accordance with Section 6.12(b)(i), a letter of credit reasonably satisfactory to Calpine from an Acceptable LOC Bank in an amount equal to the maximum amount set forth under “Subject Amount” next to such Continuing Support Obligation on Section 6.12 of the Disclosure Letter, which letter of credit shall terminate when such Continuing Support Obligation is released or expires by its terms;
(iii) during the period that Calpine has any Continuing Support Obligations outstanding in the event that any Support Obligation cannot be replaced at or prior to form of letters of credit following the thirtieth (30th) day after Closing, Parent’s obligations hereunder Purchaser, commencing from and after such thirtieth (30th) day, shall be satisfied if Parent or its Affiliate enters into at Closing pay Calpine a back-to-back guarantee credit support fee equal to 2.5% per annum on the aggregate “Subject Amount” outstanding with respect to such Support Obligation for the benefit of the Sellers in the form of an irrevocable, standby letter letters of credit or other similar form of security for 100% of the Sellers’ or their Affiliates’ obligations with respect to such Support Obligation and (b) the Sellers and their Affiliates which shall continue to maintain such support Obligations as required pursuant to the terms of the Support Obligations and the related Contracts.
(b) If any continuing Support Obligation addressed by the last sentence of Section 6.10(a) is drawn upon after the Closing Date, Parent shall pay, or cause the applicable Acquired Company to pay, Sellers or their designees the amount so claimed or drawn be payable on a monthly basis within ten (10) Business Days days of receipt of an invoice from Calpine;
(iv) for any Continuing Support Obligations which constitute guarantees, Purchaser shall indemnify and hold Calpine harmless from any Losses incurred under such guarantees after Closing; and
(v) Purchaser shall not amend, modify, renew or extend any of the underlying Contracts with respect to (or requiring) such Continuing Support Obligations in any manner that increases or extends Calpine’s or any of its Affiliates’ exposure thereunder; and in addition, Sellers shall have no obligation to amend, modify or extend any letter of credit which remains in place after Closing (and may cause the termination of any “evergreen” letters of credit prior to the automatic renewal thereof but not sooner than the first anniversary of the Closing).
(c) All cash credit support obligations provided by Sellers or any of their Affiliates with respect to the Companies, the Facilities or the operation thereof, shall be included in the calculation of the Net Working Capital. Sellers shall not, nor shall they permit their Affiliates to, encourage or cause any beneficiary of any credit support consisting of a guarantee or letter of credit listed on Section 4.16 of the Disclosure Letter to make demand under or draw under such guarantee or letter of credit.
(d) Assuming compliance by Purchaser with this Section 6.12, Sellers shall and shall cause their Affiliates to maintain any Continuing Support Obligation which is a guaranty and no Seller shall, nor shall any Seller permit any Affiliate to, terminate any Continuing Support Obligation which is a guaranty after the date Closing Date until the Contract relating to such Continuing Support Obligation expires by its terms or by consent of the draw. If Parent, or applicable parties thereto until the applicable Acquired Company, fails Continuing Support Obligation is replaced pursuant to pay Sellers or their designees during such ten (10) Business Day period, Sellers may draw upon the back-to-back guarantee provided by Parent or its Affiliate in accordance with the terms thereofthis Section 6.12.
Appears in 1 contract
Support Obligations. (a) Buyer recognizes that certain of the Non-Company Affiliates have provided credit support on behalf of certain of the Acquired Companies with respect to the operation of their respective Businesses, to the Coal Participant Project Operators with respect to the Coal Participant Projects and otherwise pursuant to certain credit support obligations, including guarantees, letters of credit, escrow arrangements, surety and performance bonds and security agreements and arrangements (other than collateral included in Net Working Capital), all of which that are outstanding as of the date hereof are set forth on Schedule 6.5(a) (the “Support Obligations”).
(b) Prior to the Closing, Parent Buyer shall use commercially reasonable efforts to effect the full and unconditional release, effective as of the Closing Date, of the Non-Company Affiliates from all Support Obligations (provided that with respect to any Support Obligations posted or maintained in connection with an Affiliate Dedicated Contract, the terms of this Section 6.5 shall apply only to such Support Obligations posted or maintained in connection with those Affiliate Dedicated Contracts that become Assigned Contracts), including by:
(i) providing a Buyer guaranty to replace each existing guaranty that is a Support Obligation containing terms equal to or more favorable to the beneficiary thereof than the terms of such existing guaranty (other than with respect to the credit rating of the guarantor); provided that if the beneficiary of any existing guaranty does not accept such a replacement guaranty (effective as of the Closing) by the date that is forty-five (45) days after the date hereof (A) and the terms of such existing guaranty or of any Contract or Law requiring such existing guaranty to be maintained permit the replacement of such existing guaranty with another form of credit support, Buyer shall offer the beneficiary of such existing guaranty such other form of credit support in order to obtain the release of such existing guaranty or (B) if the terms of such existing guaranty or of any such Contract or Law requiring such existing guaranty to be maintained do not so permit the replacement of such existing guaranty, Buyer shall offer to replace such existing guaranty with a Letter of Credit or cash in an amount up to the amount of such existing guaranty in substitution therefor;
(ii) furnishing a Letter of Credit to replace each existing letter of credit that is a Support Obligation containing terms and conditions that are substantially identical to the terms and conditions of such existing letter of credit;
(iii) instituting an escrow arrangement to replace each existing escrow arrangement that is a Support Obligation with terms equal to or more favorable to the counterparty thereunder than the terms of such existing escrow arrangement;
(iv) posting a surety or performance bond to replace each existing surety or performance bond that is a Support Obligation issued by a Person having a net worth and Credit Rating at least equal to those of the issuer of such existing surety or performance bond, and containing terms and conditions that are substantially identical to the terms and conditions of such existing surety or performance bond; and
(v) replacing any other security agreement or arrangement on substantially identical terms and conditions to the existing security agreement or arrangement that is a Support Obligation.
(c) Buyer shall use commercially reasonable efforts to cause the beneficiary or beneficiaries of the Support Obligations to (i) remit any cash to Sellers or their respective Non-Company Affiliates, as applicable, held under any escrow arrangement that is a Support Obligation promptly following the replacement of such escrow arrangement pursuant to Section 6.5(b)(iii) (unless such cash has been reflected in Net Working Capital as being transferred with the Acquired Companies at Closing) and (ii) terminate and redeliver to Sellers or their respective Affiliates each original copy of each original guaranty, letter of credit or other instrument constituting or evidencing such Support Obligations; provided that for purposes of clarity, Buyer’s obligations to provide replacement credit support are limited exclusively to those items listed on Schedule 6.5(a), as amended or supplemented pursuant to Section 6.5(g).
(d) If Buyer is not successful, following the use of commercially reasonable efforts, in obtaining the complete and unconditional release of the Non-Company Affiliates from any Support Obligations effective as of the Closing (each such Support Obligation, until such time as such Support Obligation is released in accordance with Section 6.5(d)(i), a “Continuing Support Obligation”), then:
(i) from and after the Closing, Buyer shall continue to use commercially reasonable efforts to obtain promptly the full and unconditional release of the Non-Company Affiliates from each Continuing Support Obligation;
(ii) Buyer shall indemnify each Seller and each Non-Company Affiliate for any Losses incurred by each Seller and each Non-Company Affiliate in connection with each Continuing Support Obligation;
(iii) Buyer shall not, shall cause each Acquired Company not to and shall use its commercially reasonable efforts (and shall reasonably cooperate with to cause each Coal Participant Project Operator not to, effect any amendments or modifications or any other changes to the Sellers’ efforts) Contracts or obligations to terminate, or cause Parent or which any of the Acquired Companies Continuing Support Obligations relate, or to be substituted otherwise take any action, in each case that increases, extends or accelerates the liability of the Non-Company Affiliates under any Continuing Support Obligation, without Sellers’ prior written consent; and
(iv) Buyer shall deliver to Sellers at the Closing and maintain at all respects times until the full and unconditional release of each Continuing Support Obligation in accordance with Section 6.5(d)(i) either:
(A) a Letter of Credit in an amount equal to maximum amount as set forth under “Subject Amount” on Schedule 6.5(a) for all Continuing Support Obligations in the Seller and their Affiliates aggregate (other than the Acquired Companies) under, and the Sellers, their Affiliates (other than full amount of such Letter of Credit shall be available for drawing with respect to any one or more of the Acquired CompaniesContinuing Support Obligations), and where applicable, their sureties or letter which amount shall be reduced from time to time by the amount of credit issuers, to be released from their respective obligations under, the any Continuing Support Obligations set forth in Section 6.10 from which Sellers are subsequently released; provided that, if at any time the issuer of the Company Disclosure Schedule as soon as possible after Closing. In furtherance and not in limitation Letter of Credit fails to meet the Minimum Issuer Requirements, then within five (5) Business Days of the preceding sentence, at the earlier of (1) Sellers’ requestrequest and (2) Buyer’s knowledge of such failure, Parent will offer (and provideBuyer shall replace the Letter of Credit with a Letter of Credit from an issuer that meets the Minimum Issuer Requirements; provided, further, that, if acceptedBuyer elects to fulfill its obligations under this Section 6.5(d)(iv) through the provision of a Letter of Credit pursuant to this clause (iA), then on the last Business Day of each three (3) a sufficient amount of letters of creditmonth period following the Closing Date until such time as no Continuing Support Obligations remain outstanding, (ii) cash collateral, and (iii) to assume the Sellers’ Buyer shall pay Sellers or their Affiliates’ designee a fee in respect of each Continuing Support Obligation, with such fee determined in accordance with Section 6.5(d)(iv)(C) below; or
(B) an unlimited guaranty of Buyer’s obligations under guaranties, to the counterparties hereunder with respect to the Continuing Support Obligations from a Person with a Credit Rating of Investment Grade, which guarantee shall be in form and substance satisfactory to enable the Sellers and their Affiliates to terminate such Support Obligations without liability or otherwise be released or replaced each Seller in connection therewithits sole discretion; provided that, if Buyer’s guarantor fails to maintain a Credit Rating of Investment Grade at any time, then Buyer shall provide a Letter of Credit pursuant to Section 6.5(d)(iv)(A) within five (5) Business Days of the earlier of (1) Sellers’ request and (2) Buyer’s knowledge of such failure; provided, further, that, if Buyer elects to fulfill its obligations under this Section 6.5(d)(iv) through the provision of a guaranty pursuant to this clause (B), then on the last Business Day of each three (3) month period following the Closing Date until such time as no Continuing Support Obligations remain outstanding, Buyer shall pay Sellers or their designee a fee in respect of each Continuing Support Obligation, with such fee determined in accordance with Section 6.5(d)(iv)(C) below.
(C) The fee payable by Buyer pursuant to clauses (A) and (B) of Sections 6.5(d)(iv) shall be determined as follows: On the last Business Day of the first three (3) month period following the Closing Date, the fee shall be calculated at a rate of one and one-quarter percent (1.25%) (on a per annum basis) on the amount under the heading “Subject Amount” on Schedule 6.5(a) with respect to each Continuing Support Obligation, Parent shall not be required under this Section 6.10 to deliver replacement credit support of the same type as, or with terms and conditions substantially similar to, such Support Obligations, provided that the replacement credit support delivered by Parent complies with the terms and conditions of the applicable Contract or is otherwise acceptable to the counterparty thereto. For any Support Obligations for which Parent or any of the Acquired Companies, as applicable, is not substituted in all respects for the Sellers and their Affiliates (and for which the Sellers and their Affiliates are not released) effective Obligation remaining outstanding as of such date, and the Closing, rate of such fee shall increase by an additional one-half percent (a0.5%) Parent shall continue to use its commercially reasonable efforts and shall cause (on a per annum basis) on the Acquired Companies to use their commercially reasonable best efforts to effect last Business Day of each subsequent three (3) month period after such substitution and release as soon as possible initial three (3) month period after the Closing, and provided, that in the event that any Support Obligation cannot be replaced at or prior to the Closing, Parent’s obligations hereunder shall be satisfied if Parent or its Affiliate enters into at Closing a back-to-back guarantee Date with respect to any such Continuing Support Obligation for the benefit that remains outstanding, up to a maximum rate of the Sellers in the form of an irrevocablethree and one-quarter percent (3.25%) (on a per annum basis); provided that, standby letter of credit or other similar form of security for 100% of the Sellers’ or their Affiliates’ obligations with respect to such if any Continuing Support Obligation and (b) the Sellers and their Affiliates shall Obligations continue to maintain such support Obligations as required pursuant to the terms remain outstanding, then on each twelve (12) month anniversary of the Support Obligations and the related Contracts.
(b) If any continuing Support Obligation addressed by the last sentence of Section 6.10(a) is drawn upon after the Closing Date, Parent the maximum rate for calculating such fee shall payincrease over the maximum rate applicable to the immediately preceding twelve (12) month period by the increase in LIBOR over such twelve (12) month period, if any (but for the avoidance of doubt, any decrease in LIBOR shall not affect such maximum rate); provided further, that if the rate for calculating any fee payable under this Section 6.5(d) would exceed the highest rate permitted under applicable Law, then, ipso facto, the rate shall be automatically reduced to the maximum lawful rate.
(e) Notwithstanding anything in this Agreement to the contrary, each Seller and each Non-Company Affiliate may not terminate any Continuing Support Obligations at any time after the Closing Date until such Continuing Support Obligations terminate or cause expire by their terms or by consent of the applicable beneficiary or are replaced pursuant to this Section 6.5.
(f) During the Interim Period, Buyer shall have the right to contact and have discussions with each beneficiary of a Support Obligation in order to satisfy its obligations under this Section 6.5; provided, however, that Buyer shall give Sellers prior notice before making any such contact.
(g) Any and all new or replacement credit support obligations or any modification or increase in the existing credit support obligations entered into or executed by any Seller or Non-Company Affiliate with respect to any Acquired Company and/or under the Co-Owner Agreements with respect to paythe Projects during the Interim Period shall constitute Support Obligations hereunder, and all of Buyer’s obligations under this Section 6.5 shall apply with respect thereto; provided that Sellers shall consult with Buyer prior to any Seller or their designees Non- Company Affiliate entering into or executing any new credit support obligation if as a result of such new credit support obligation, the aggregate outstanding amount so claimed of Support Obligations as of the Closing would be increased by more than $50,000,000 as compared to the outstanding amount of Support Obligations as of the date hereof. Sellers shall have the continuing obligation until the Closing to supplement or drawn within ten (10amend promptly Schedule 6.5(a) Business Days after with respect to any additional Support Obligations entered into during the Interim Period, which, if existing at the date of the draw. If Parentthis Agreement, would have been required to be set forth Schedule 6.5(a), and to provide such supplements or the applicable Acquired Company, fails amendments to pay Sellers or their designees during such ten (10) Business Day period, Sellers may draw upon the back-to-back guarantee provided by Parent or its Affiliate in accordance with the terms thereofBuyer on a regular basis.
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Support Obligations. (a) Buyer recognizes that certain of the Non-Company Affiliates have provided and/or will provide Credit Support (i) to the Companies, (ii) with respect to the Affiliate Contracts, and/or (iii) with respect to the CG&E Transactions pursuant to certain Credit Support obligations (the “Support Obligations”).
(b) Prior to Closing, Parent Buyer shall use commercially reasonable efforts to effect the full and unconditional release, effective as of the Closing, of the Non-Company Affiliates from all Support Obligations, including by undertaking the following promptly following the Signing Date:
(i) offering to each beneficiary thereof a guaranty from a Person with Credit Ratings at least equal to the Required Rating to replace each existing guaranty that is a Support Obligation, which shall contain terms at least as favorable to such beneficiary thereof in all respects (including terms, amount and conditions) than such existing guaranty (other than with respect to the credit rating of the guarantor); provided, that if the beneficiary of any existing guaranty does not accept such a replacement guaranty by the date that is ninety (90) days after the Signing Date (A) and the terms of such existing guaranty or of any Contract or Law requiring such existing guaranty to be maintained permit the replacement of such existing guaranty with another form of credit support, Buyer will offer the beneficiary of such existing guaranty such other form of credit support in order to obtain the release of such existing guaranty or (B) if the terms of such existing guaranty or of any such Contract or Law requiring such existing guaranty to be maintained do not so permit the replacement of such existing guaranty, Buyer will offer to replace such existing guaranty with a Letter of Credit or cash in the amount of such existing guaranty in substitution therefor;
(ii) furnishing a Letter of Credit to replace each existing letter of credit that is a Support Obligation (including all such letters of credit posted by or on behalf of any Duke Credit Support Provider with respect to the Transactions) containing terms and conditions that are substantially identical to the terms and conditions of such existing letter of credit;
(iii) instituting an escrow arrangement to replace each existing escrow arrangement that is a Support Obligation with terms at least as favorable to the counterparty thereunder than the terms of such existing escrow arrangement;
(iv) posting a surety or performance bond to replace each existing surety or performance bond that is a Support Obligation issued by a Person having a net worth and Credit Rating at least equal to those of the issuer of such existing surety or performance bond, and containing terms and conditions that are substantially identical to the terms and conditions of such existing surety or performance bond;
(v) posting cash to replace any cash that is a Support Obligation provided by a Non-Company Affiliate; provided that Buyer shall have the option to offer a Letter of Credit to replace such cash so long as such Letter of Credit is (A) non-recourse to Seller or any Non-Company Affiliate, (B) issued by Buyer in favor of the applicable Counterparty, (C) in a form acceptable to the applicable Counterparty and Buyer (with a copy of such form of such Letter of Credit provided by Buyer to Seller prior to such Letter of Credit being offered to such Counterparty) and (D) not reasonably expected to delay the consent of the applicable Counterparty to the release of such Credit Support; and
(vi) replacing any other security agreement or arrangement on substantially identical terms and conditions to the existing security agreement or arrangement that is a Support Obligation.
(c) Buyer shall use commercially reasonable efforts to cause the beneficiary or beneficiaries of the Support Obligations to (i) remit any cash to Seller or one of its Affiliates, as applicable, held under any escrow arrangement that is a Support Obligation promptly following the replacement of such escrow arrangement pursuant to Section 6.7(b)(iii) and (ii) terminate and redeliver to Seller or one of its Affiliates each original copy of each original guaranty, letter of credit or other instrument constituting or evidencing such Support Obligations; provided that if a party is unable to return such item of Credit Support (in the form of guaranties, letters of credit or other instruments constituting or evidencing such Support Obligations (other than cash)) because such items of Credit Support cannot be located after diligent efforts, then in lieu of returning such item of Credit Support the party obligated to make such return may, with the consent of the Person entitled to receive such Credit Support, provide an affidavit of lost guaranty, letter of credit or such other instrument, which shall contain an indemnity reasonably satisfactory to such receiving party and which shall acknowledge that such Credit Support is terminated and no further obligations exist thereunder.
(d) If Buyer is not successful, following the use of commercially reasonable efforts, in obtaining the complete and unconditional release of the Non-Company Affiliates from any Support Obligations as of Closing (each such Support Obligation, until such time as such Support Obligation is released in accordance with this Section 6.7(d)(i), a “Continuing Support Obligation”), then:
(i) from and after the Closing, Buyer shall use its commercially reasonable efforts to obtain promptly the full and unconditional release of Seller and the Non-Company Affiliates from each Continuing Support Obligation;
(ii) Buyer shall indemnify Seller and the Non-Company Affiliates for any Losses incurred by it or the Non-Company Affiliates in connection with each Continuing Support Obligation;
(iii) Buyer shall not, and shall reasonably cooperate with cause the Sellers’ efforts) Companies not to, effect any amendments or modifications or any other changes to terminate, the contracts or cause Parent or obligations to which any of the Acquired Companies Continuing Support Obligations relate, or to be substituted otherwise take any action, in each case that increases, extends or accelerates the liability of the Non-Company Affiliates under any Continuing Support Obligation, without Seller’s prior written consent; and
(e) Until such time as all respects for Continuing Support Obligations in the Seller form of guaranties have been fully and their Affiliates (other than the Acquired Companies) under, and the Sellers, their Affiliates (other than the Acquired Companiesunconditionally released in accordance with Section 6.7(d), and where applicable, their sureties Buyer shall pay to Seller or letter Seller’s designee on the last Business Day of credit issuers, to be released from their respective obligations under, each month beginning on the Support Obligations set forth in Section 6.10 last Business Day of the Company Disclosure Schedule as soon as possible after Closing. In furtherance and not in limitation three month anniversary of the preceding sentenceClosing Date (each, at the Sellers’ request, Parent will offer a “Payment Date”) a fee of 0.55% (and provide, if acceptedon a per annum basis) on (i) a sufficient the maximum aggregate exposure (determined solely by reference to the maximum amount of letters of credit, (ii) cash collateralthat may be guaranteed under Continuing Support Obligations in accordance with the terms thereof with respect to Continuing Support Obligations that are capped, and determined solely by reference to the xxxx-to-market exposure thereunder with respect to Continuing Support Obligations that are not capped), calculated as of the 15th day of such month in which the applicable Payment Date occurs, of the applicable Seller or Non-Company Affiliates providing such Continuing Support Obligations. Buyer shall deliver to Seller on each Payment Date a listing of any releases of Continuing Support Obligations pursuant to Section 6.7(d) obtained since the prior Payment Date.
(iiif) Notwithstanding anything in this Agreement to assume the Sellers’ contrary, Seller and the Non-Company Affiliates may not terminate any Continuing Support Obligations at any time after the Closing until such Continuing Support Obligations terminate or expire by their Affiliates’ terms or by consent of the applicable beneficiary or are replaced pursuant to this Section 6.7.
(g) Buyer shall have the right to contact and have discussions with each beneficiary of a Support Obligation in order to satisfy its obligations under guarantiesthis Section 6.7; provided, however, that Buyer shall give Seller prior notice before making any such contact and Seller shall have the right to the counterparties be present during any such discussions.
(h) From and after Closing, Buyer shall provide or cause to be provided all Credit Support required to be provided with respect to the Support Obligations to enable the Sellers and their Affiliates to terminate such Support Obligations without liability or otherwise be released or replaced in connection therewith; provided that, with respect to each Support Obligation, Parent shall not be required under this Section 6.10 to deliver replacement credit support of the same type as, or with terms and conditions substantially similar to, such Support Obligations, provided that the replacement credit support delivered by Parent complies with the terms and conditions of the applicable Contract or is otherwise acceptable to the counterparty thereto. For any Support Obligations for which Parent or any of the Acquired Companies, as applicable, is not substituted in all respects for the Sellers and their Affiliates (and for which the Sellers and their Affiliates are not released) effective as of the Closing, (a) Parent shall continue to use its commercially reasonable efforts and shall cause the Acquired Companies to use their commercially reasonable best efforts to effect such substitution and release as soon as possible after the Closing, and provided, that in the event that any Support Obligation cannot be replaced at or prior to the Closing, Parent’s obligations hereunder shall be satisfied if Parent or its Affiliate enters into at Closing a back-to-back guarantee with respect to such Support Obligation for the benefit of the Sellers in the form of an irrevocable, standby letter of credit or other similar form of security for 100% of the Sellers’ or their Affiliates’ obligations with respect to such Support Obligation and (b) the Sellers and their Affiliates shall continue to maintain such support Obligations as required CG&E Transactions pursuant to the terms of the Support Obligations and the related ContractsTRS Agreement.
(bi) If Promptly following the effective date of the termination or expiration in full of any continuing Continuing Support Obligation addressed in the form of a letter of credit (i) that was posted by a Duke Credit Support Provider on behalf of a Company (which, for purposes of clarification, shall not include any Credit Support provided with respect to the last sentence CG&E Transactions) and (ii) to the extent that such letter of Section 6.10(a) is drawn upon after credit was included in the Closing Datecalculation of the Credit Support Payment made by Buyer to Seller pursuant to Article II, Parent Seller shall pay, or cause return to Buyer an amount of cash equal to the applicable Acquired Company portion of the Credit Support Payment allocated to pay, Sellers or their designees such letter of credit in the calculation thereof minus the amount so claimed of any drawings made on such letter of credit on or drawn within ten (10) Business Days after Closing and prior to the date of the draw. If Parent, termination or the applicable Acquired Company, fails to pay Sellers or their designees during expiration of such ten (10) Business Day period, Sellers may draw upon the back-to-back guarantee provided by Parent or its Affiliate in accordance with the terms thereofletter of credit.
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Support Obligations. (a) Buyer recognizes that certain of the Non-Company Affiliates have provided credit support to certain of the Project Companies with respect to the Projects pursuant to certain credit support obligations, all of which that are outstanding as of the date hereof are set forth on Schedule 6.5(a) (the “Support Obligations”).
(b) Prior to Closing, Parent Buyer shall use its commercially reasonable efforts (to effect the full and shall reasonably cooperate with the Sellers’ efforts) to terminateunconditional release, or cause Parent or any effective as of the Acquired Companies Closing Date, of the Non-Company Affiliates from all Support Obligations (provided, that with respect to be substituted any Support Obligations posted or maintained in all respects for connection with an Affiliate Contract, the Seller and their Affiliates (other than the Acquired Companies) under, and the Sellers, their Affiliates (other than the Acquired Companiesterms of this Section 6.5 shall apply only to such Support Obligations posted or maintained in connection with those Affiliate Contracts that become Assigned Contracts), and where applicable, their sureties or letter of credit issuers, to be released from their respective obligations under, the Support Obligations set forth in Section 6.10 of the Company Disclosure Schedule as soon as possible after Closing. In furtherance and not in limitation of the preceding sentence, at the Sellers’ request, Parent will offer (and provide, if accepted) including by:
(i) a sufficient amount of letters of credit, (iisubject to Section 6.5(c) cash collateral, and (iii) to assume the Sellers’ or their Affiliates’ obligations under guaranties, to the counterparties with respect to the Lease Guaranty and the Specified Guaranties, providing a Buyer guaranty to replace each existing guaranty that is a Support Obligations Obligation containing terms equal to enable or more favorable to the Sellers and their Affiliates to terminate beneficiary thereof than the terms of such Support Obligations without liability or otherwise be released or replaced in connection therewith; provided that, existing guaranty (other than with respect to each Support Obligationthe credit rating of the guarantor); provided, Parent shall that if the beneficiary of any existing guaranty does not accept such a replacement guaranty by the date that is 45 days after the date hereof (A) and the terms of such existing guaranty or of any Contract or Law requiring such existing guaranty to be required under this Section 6.10 to deliver maintained permit the replacement of such existing guaranty with another form of credit support, Buyer will offer the beneficiary of such existing guaranty such other form of credit support in order to obtain the release of such existing guaranty or (B) if the same type asterms of such existing guaranty or of any such Contract or Law requiring such existing guaranty to be maintained do not so permit the replacement of such existing guaranty, Buyer will offer to replace such existing guaranty with a Letter of Credit or with cash in the amount of such existing guaranty in substitution therefor;
(ii) furnishing a Letter of Credit to replace each existing letter of credit that is a Support Obligation containing terms and conditions that are substantially similar to, such Support Obligations, provided that the replacement credit support delivered by Parent complies with identical to the terms and conditions of the applicable Contract such existing letter of credit;
(iii) instituting an escrow arrangement to replace each existing escrow arrangement that is a Support Obligation with terms equal to or is otherwise acceptable more favorable to the counterparty thereto. For thereunder than the terms of such existing escrow arrangement;
(iv) posting a surety or performance bond to replace each existing surety or performance bond that is a Support Obligation issued by a Person having a net worth and Credit Rating at least equal to those of the issuer of such existing surety or performance bond, and containing terms and conditions that are substantially identical to the terms and conditions of such existing surety or performance bond; and
(v) replacing any other security agreement or arrangement on substantially identical terms and conditions to the existing security agreement or arrangement that is a Support Obligation.
(c) Effective on or prior to Closing:
(i) With respect to the Lease Guaranty, Buyer shall cause the full defeasance of the Outstanding Bonds (as defined in the South Bay Indenture) in accordance with Article X of the South Bay Indenture or, if such Outstanding Bonds cannot be defeased on the Closing Date, shall have deposited into an escrow account satisfactory to Seller an amount of cash necessary to effect the defeasance described above in this clause (i);
(ii) With respect to the PG&E Guaranties, the SDUPD Guaranties, and the SDG&E Guaranty (collectively, the “Specified Guaranties”) and the Lease Guaranty (other than the obligations thereunder that are satisfied by the defeasance of the Outstanding Bonds (as defined in the South Bay Indenture) in accordance with Section 6.5(c)(i)), Buyer shall use commercially reasonable efforts to effect the full and unconditional release of Duke Capital LLC from all obligations thereunder in accordance with the requirements of Section 6.5(b)(i) and by offering to the applicable beneficiaries of such guaranties both (A) an unlimited guaranty from Buyer to cover any obligations thereunder and (B)(1) with respect to the Lease Guaranty, a Letter of Credit in an amount equal to $34 million,, (2) with respect to the PG&E Guaranties, one or more Letters of Credit in an amount equal to $15 million in the aggregate for all such PG&E Guaranties; (3) with respect to the SDUPD Guaranties, one or more Letters of Credit in an amount equal to $5 million in the aggregate for all of the SDUPD Guaranties, and (4) with respect to the SDG&E Guaranty, a Letter of Credit in an amount equal to $1 million.
(d) Buyer shall use commercially reasonable efforts to cause the beneficiary or beneficiaries of the Support Obligations for which Parent to (i) remit any cash to Seller or any one of the Acquired Companiesits Affiliates, as applicable, held under any escrow arrangement that is not substituted in all respects for the Sellers and their Affiliates (and for which the Sellers and their Affiliates are not released) effective as of the Closing, (a) Parent shall continue to use its commercially reasonable efforts and shall cause the Acquired Companies to use their commercially reasonable best efforts to effect such substitution and release as soon as possible after the Closing, and provided, that in the event that any a Support Obligation cannot be replaced at promptly following the replacement of such escrow arrangement pursuant to Section 6.5(b)(iii) and (ii) terminate and redeliver to Seller or prior to the Closingone of its Affiliates each original copy of each original guaranty, Parent’s obligations hereunder shall be satisfied if Parent or its Affiliate enters into at Closing a back-to-back guarantee with respect to such Support Obligation for the benefit of the Sellers in the form of an irrevocable, standby letter of credit or other similar form instrument constituting or evidencing such Support Obligations.
(e) If Buyer is not successful, following the use of security for 100% commercially reasonable efforts, in obtaining the complete and unconditional release of the Sellers’ Non-Company Affiliates from any Support Obligations prior to Closing (each such Support Obligation, until such time as such Support Obligation is released in accordance with Section 6.5(e)(i), a “Continuing Support Obligation”), then:
(i) from and after the Closing, Buyer shall continue to use commercially reasonable efforts to obtain promptly the full and unconditional release of the Non-Company Affiliates from each Continuing Support Obligation;
(ii) Buyer shall indemnify Seller and the Non-Company Affiliates for any liabilities, losses, costs or their Affiliates’ expenses incurred by it or the Non-Company Affiliates in connection with each Continuing Support Obligation;
(iii) Buyer shall not, and shall cause the Project Companies not to, effect any amendments or modifications or any other changes to the contracts or obligations to which any of the Continuing Support Obligations relate, or to otherwise take any action, in each case that increases, extends or accelerates the liability of the Non-Company Affiliates under any Continuing Support Obligation, without Seller’s prior written consent;
(iv) Buyer shall deliver to Seller (for the benefit of Duke Capital LLC) at the Closing and maintain at all times until the full and unconditional release of each Continuing Support Obligation in accordance with Section 6.5(e)(i) either:
(A) a Letter of Credit in an amount equal to maximum amount as set forth under “Subject Amount” on Schedule 6.5(a) for all Continuing Support Obligations in the aggregate (and the full amount of such Letter of Credit shall be available for drawing with respect to such Support Obligation and (b) the Sellers and their Affiliates shall continue to maintain such support Obligations as required pursuant to the terms any one or more of the Continuing Support Obligations and Obligations), which shall include, as applicable, (1) until such time as the related Contracts.
San Diego Unified Port District (b) If any continuing Support Obligation addressed or another Person mutually agreed by the last sentence of Section 6.10(aParties) is drawn upon after provides an acknowledgement to Seller and Buyer that the Closing Date, Parent shall pay, or cause demolition and remediation under the applicable Acquired Company to pay, Sellers or their designees the amount so claimed or drawn within ten (10) Business Days after the date of the draw. If Parent, or the applicable Acquired Company, fails to pay Sellers or their designees during such ten (10) Business Day period, Sellers may draw upon the back-to-back guarantee provided by Parent or its Affiliate South Bay Lease Facility have been completed in accordance with the terms thereofof the South Bay Lease Facility, an amount equal to $34 million with respect to the obligations under the Lease Guaranty, (other than the obligations thereunder that are satisfied by the defeasance of the Outstanding Bonds (as defined in the South Bay Indenture) in accordance with Section 6.5(c)(i)),(2) $21.0 million in the aggregate for the PG&E Guaranties, the SDUPD Guaranties and the SDG&E Guaranty collectively (the “Specified Guaranty Amount”), which Specified Guaranty Amount shall decrease upon the full and unconditional release of (x) the PG&E Guaranties by $15 million, (y) the SDUPD Guaranties by $5 million, and (z) the SDG&E Guaranty by $1 million; provided that if Buyer elects to fulfill its obligations under this Section 6.5(e)(iv) through the provision of a Letter of Credit under this clause (A) then, on the last Business Day of each three month period after the later of the Closing Date or the effective date of such guaranty through the ten year anniversary of the Closing Date, Buyer shall pay Seller or Seller’s designee a fee of 1.0% (on a per annum basis) on the amount under the heading “Subject Amount” on Schedule 6.5(a) with respect to each Specified Guaranty, which fee shall increase by an additional 0.5% (on a per annum basis) on each six month anniversary of the Closing Date (or such effective date, as applicable) with respect to any such Specified Guaranty that remains outstanding, up to a maximum fee of 3.0% (on a per annum basis); or
(B) an unlimited guaranty of the Buyer’s obligations hereunder with respect to the Continuing Support Obligations from a Person with a Credit Rating of Investment Grade, which guarantee shall be in form and substance satisfactory to Seller in its sole discretion, provided that if Buyer elects to fulfill its obligations under this Section 6.5(e)(iv) through the provision of a guaranty pursuant to this clause (B), then on the last Business Day of each three month period after the later of the Closing Date or the effective date of such guaranty, Buyer shall pay Seller or Seller’s designee a fee of 1.0% (on a per annum basis) on the amount under the heading “Subject Amount” on Schedule 6.5(a) with respect to each Continuing Support Obligation, which fee shall increase by an additional 0.5% (on a per annum basis) on each six month anniversary of the Closing Date (or such effective date, as applicable) with respect to any such Continuing Support Obligation that remains outstanding, up to a maximum fee of 3.0% (on a per annum basis);
(f) Notwithstanding anything in this Agreement to the contrary, Seller and the Non-Company Affiliates may not terminate any Continuing Support Obligations at any time after the Closing Date until such Continuing Support Obligations terminate or expire by their terms or by consent of the applicable beneficiary or are replaced pursuant to this Section 6.5.
(g) During the Interim Period, Buyer shall have the right to contact and have discussions with each beneficiary of a Support Obligation in order to satisfy its obligations under this Section 6.5; provided, however, that Buyer shall give Seller prior notice before making any such contact.
(h) From and after the Closing, Buyer shall indemnify Duke Capital LLC for any liabilities, losses, costs or expenses incurred by it under (i) any guaranty issued by it pursuant to (A) the requirements of Section 2.4(m) of the Cooperation Agreement in respect of the Port Leases and Permits (as defined in the Cooperation Agreement) or (B) the requirements of Section 13.14 of the Cooperation Agreement, in either case where such liabilities, losses, costs or expenses are incurred due to a breach of the Cooperation Agreement by Duke South Bay or a breach of such Port Leases and Permits and (ii) the Siemens Guaranty, except to the extent any such liabilities, losses, costs or expenses with respect to the Siemens Guaranty constitute an Excluded Liability described as the second item under the heading “Bridgeport” on Schedule 6.6.
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