Construction Agency Agreement
EXHIBIT 10.38
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AMENDED AND RESTATED CONSTRUCTION AGENCY AGREEMENT
[_____________] FACILITY
DATED AS OF NOVEMBER [ ], 2001
AMONG
RELIANT ENERGY [_____________], LLC,
A DELAWARE LIMITED LIABILITY COMPANY, AS AGENT,
[_____________] TRUST,
A DELAWARE BUSINESS TRUST, AS OWNER TRUST,
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
IN ITS INDIVIDUAL CAPACITY, BUT ONLY TO THE EXTENT
EXPRESSLY PROVIDED FOR HEREIN, AS BANK,
APPLE INVESTMENTS 2001 TRUST,
A DELAWARE BUSINESS TRUST, AS OWNER TRUST PARENT,
XXXXXXX XXXXX XXXXXX INC.,
AS LEAD ARRANGER AND BOOKRUNNER,
CITICORP USA, INC.,
AS ADMINISTRATIVE AGENT,
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH,
AS ISSUING BANK,
ROYAL BANK OF CANADA,
AS ARRANGER AND SYNDICATION AGENT,
ABN AMRO BANK N.V.,
AS ARRANGER AND DOCUMENTATION AGENT,
COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES,
AS ARRANGER AND CO-SYNDICATION AGENT,
TORONTO DOMINION (TEXAS) INC.,
AS ARRANGER AND CO-DOCUMENTATION AGENT,
THE FINANCIAL INSTITUTIONS LISTED ON SCHEDULE I,
AS CERTIFICATE PARTICIPANTS,
AND
THE FINANCIAL INSTITUTIONS LISTED ON SCHEDULE I,
AS LENDERS
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Construction Agency Agreement
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND INTERPRETATION..............................................................2
1.1 Interpretation..............................................................................2
1.2 Accounting Terms............................................................................4
1.3 Legal Representation of the Parties.........................................................4
1.4 Defined Terms...............................................................................4
1.5 Amendment and Restatement..................................................................34
ARTICLE II APPOINTMENT OF AGENT.......................................................................35
2.1 Appointment and Acceptance.................................................................35
2.2 Agent's Required Actions...................................................................35
2.3 Scope of Authority.........................................................................38
2.4 Term.......................................................................................39
2.5 Guaranty...................................................................................39
ARTICLE III BUDGET.....................................................................................39
3.1 Preparation of Budget......................................................................39
3.2 Accuracy of Budget.........................................................................40
3.3 Budget Revisions...........................................................................40
3.4 Non-Budget Amount..........................................................................41
ARTICLE IV CONSTRUCTION OF FACILITY...................................................................42
4.1 Construction...............................................................................42
4.2 Amendments; Modifications..................................................................42
4.3 Casualty, Condemnation, Force Majeure Events and Liquidated Damages........................42
4.4 Completion Date Conditions.................................................................42
ARTICLE V ADVANCES AND DIRECT PAYMENTS; LETTERS OF CREDIT; AGENT'S DEPOSIT ACCOUNT COLLATERAL........43
5.1 Payments Pursuant to Budget................................................................43
5.2 Financing Costs and Owner Trust Yield......................................................45
5.3 Fees.......................................................................................46
5.4 Deemed Funding Requests....................................................................46
5.5 Payments to Collateral Agent and Authorized Representatives................................47
ARTICLE VI INSURANCE; CASUALTY AND CONDEMNATION.......................................................47
6.1 Coverage...................................................................................47
6.2 Adjustment of Losses.......................................................................48
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Construction Agency Agreement
6.3 Casualty; Condemnation; Application of Net Available Proceeds..............................48
ARTICLE VII REPRESENTATIONS, WARRANTIES AND COVENANTS OF AGENT, OWNER TRUST AND BANK..................50
7.1 Representations and Warranties of Agent....................................................50
7.2 Representations and Warranties of Owner Trust..............................................56
7.3 Representations and Warranties of Bank.....................................................57
7.4 Covenants of Agent.........................................................................58
7.5 Conditions to Effectiveness................................................................61
7.6 Conditions to Payments.....................................................................65
ARTICLE VIII AGENT EVENTS OF DEFAULT....................................................................65
8.1 Agent Events of Default....................................................................65
8.2 Remedies...................................................................................68
8.3 Survival...................................................................................69
8.4 Waivers; Rights Cumulative.................................................................69
ARTICLE IX TERMINATION BY OWNER TRUST; FAILURE TO COMPLETE............................................70
9.1 Owner Trust Termination Events.............................................................70
9.2 Owner Trust Termination Notice.............................................................71
9.3 Compliance with Required Actions...........................................................71
ARTICLE X AGENT'S OPTIONS............................................................................71
10.1 Purchase Option............................................................................71
10.2 Lease Option...............................................................................76
ARTICLE XI REMARKETING OF FACILITY....................................................................77
11.1 Remarketing of Facility....................................................................77
11.2 Deposit Payment and Allocation of Proceeds of Sale.........................................77
ARTICLE XII AGENT'S INDEMNITIES........................................................................78
12.1 Agent's General Indemnification............................................................78
12.2 Agent's Environmental Indemnity............................................................79
12.3 Agent's General Tax Indemnity..............................................................80
12.4 Agent's Special Tax Indemnity..............................................................88
12.5 Additional Costs...........................................................................88
12.6 Agent's Indemnity Exclusions...............................................................88
12.7 Agent's Indemnification Procedure under Sections 12.1 and 12.2.............................89
12.8 Agent's Subrogation........................................................................91
12.9 Agent's Survival of Agent's Indemnification Obligations....................................91
ARTICLE XIII OWNER TRUST'S INDEMNITIES..................................................................92
13.1 Owner's Trust's General Indemnification....................................................92
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Construction Agency Agreement
13.2 Owner Trust's Environmental Indemnity......................................................92
13.3 Owner Trust's General Tax Indemnity........................................................93
13.4 Owner Trust's Special Tax Indemnity........................................................98
13.5 Indemnity Exclusions.......................................................................98
13.6 Indemnification Procedure under Section 13.1 or 13.2.......................................99
13.7 Subrogation...............................................................................100
13.8 Survival of Indemnification Obligations...................................................100
13.9 Limitation on Indemnification.............................................................100
13.10 Third Party Beneficiary Rights............................................................100
ARTICLE XIV CREDIT AGREEMENT, MASTER TRUST AGREEMENT AND OTHER FINANCING DOCUMENT RIGHTS..............101
14.1 Assignment of Credit Agreement, Master Trust Agreement Rights and Other Financing
Documents.................................................................................101
ARTICLE XV MISCELLANEOUS.............................................................................103
15.1 Intent....................................................................................103
15.2 Notices...................................................................................104
15.3 Assignment; Successors and Assigns........................................................105
15.4 GOVERNING LAW.............................................................................107
15.5 SUBMISSION TO JURISDICTION; WAIVERS; SERVICE OF PROCESS...................................107
15.6 WAIVERS OF JURY TRIAL.....................................................................108
15.7 Amendments and Waivers....................................................................108
15.8 Counterparts..............................................................................109
15.9 Severability..............................................................................109
15.10 Headings and Table of Contents............................................................109
15.11 Parties in Interest.......................................................................109
15.12 Payment Obligations Absolute..............................................................109
15.13 Further Assurances........................................................................109
15.14 Limitations on Recourse...................................................................109
15.15 No Petition...............................................................................110
15.16 Conflict in Operative Agreements..........................................................110
ARTICLE XVI REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE CERTIFICATE PARTICIPANTS.................110
16.1 Trust Agreements..........................................................................110
16.2 [Intentionally Omitted]...................................................................110
16.3 Upstream Purchase and Releases............................................................110
16.4 Disclosure................................................................................111
16.5 Representations and Warranties of Secured Parties.........................................111
16.6 Confidentiality...........................................................................112
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Construction Agency Agreement
List of Exhibits
Exhibit A - Budget
Exhibit B - Form of Completion Certificate
Exhibit C - Form of Payment Direction/Borrowing Notice
Exhibit D - Form of Quarterly Certificate
Exhibit E - Intentionally Omitted
Exhibit F - Insurance
Exhibit G - Form of Purchase Option Certificate
Exhibit H - Form of Purchase Option Assignment and Assumption Agreement
Exhibit I - Form of Lease Supplement
Exhibit J - Marketing Procedures
Exhibit K - Form of Opinion of Local Counsel
List of Schedules
Schedule I - Certificate Participants, Administrative Agent, Lenders
and Addresses
Schedule II - Land
Schedule III - [_____________] Remediation
Schedule IV - Shared Facilities
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Construction Agency Agreement
AMENDED AND RESTATED
CONSTRUCTION AGENCY AGREEMENT
AMENDED AND RESTATED
CONSTRUCTION AGENCY AGREEMENT dated as of
________, 2001 (this "Agreement"), among [_____________] TRUST, a Delaware
business trust (the "Owner Trust"), RELIANT ENERGY [_____________], LLC, a
Delaware limited liability company (by way of assignment from Reliant Energy
Construction, LLC) (the "Agent"), FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, a national banking association, in its individual capacity, but
only to the extent expressly provided for herein (the "Bank"), and APPLE
INVESTMENTS 2001 TRUST, a Delaware business trust (the "Owner Trust Parent"),
the banks and other financial institutions from time to time parties hereto as
identified on Schedule I hereto as lenders (the "Lenders") and as certificate
participants (the "Certificate Participants"), XXXXXXX XXXXX BARNEY INC., a
New
York corporation, as lead arranger and bookrunner (in such capacity, the "Lead
Arranger"), CITICORP USA, INC., a Delaware corporation, as administrative agent
for the Lenders (in such capacity, the "Administrative Agent"), WESTDEUTSCHE
LANDESBANK GIROZENTRALE,
NEW YORK BRANCH, a duly licensed branch of Westdeutsche
Landesbank Girozentrale, a public law banking institution organized under the
laws of North Rhine Westphalia, Germany, as issuing bank for letters of credit
(the "Issuing Bank"), ROYAL BANK OF CANADA, a Canadian chartered bank, as
arranger and syndication agent (in such capacity, the "Syndication Agent"), ABN
AMRO BANK, N.V., a Netherlands banking corporation acting through its duly
licensed Chicago branch, as arranger and documentation agent (in such capacity,
the "Documentation Agent"), COMMERZBANK, AG,
NEW YORK AND GRAND CAYMAN BRANCHES,
the
New York and Grand Cayman licensed branches, respectively, of a German
banking corporation, as arranger and co-syndication agent (in such capacity, the
"Co-Syndication Agent") and TORONTO DOMINION (TEXAS) INC., a Delaware
corporation, as arranger and co-documentation agent (in such capacity, the
"Co-Documentation Agent").
Preliminary Statement
WHEREAS, Owner Trust is in the business of leasing and
providing or arranging lease financing for various equipment and a power
generation project, and pursuant to the
Construction Agency Agreement dated as
of April 27, 2001, as amended by Amendment No. 1 to Construction Agency
Agreement dated as of July 25, 2001 and as amended by Amendment No. 1 to Letter
of Intent and Amendment No. 2 to Construction Agency Agreements dated October
23, 2001 (as so amended, the "Original Agreement"), among Owner Trust, Agent,
Bank, Apple Investments LLC ("Apple LLC"), Apple Equity Capital Trust, a
Delaware business trust ("Equity Capital Trust"), the banks and other financial
institutions from time to time parties to the Credit Agreement dated as of April
27, 2001, as amended by Amendment No. 1 to Credit Agreement dated as of July 25,
2001 (as so amended, the "Original Credit Agreement"), and Westdeutsche
Landesbank Girozentrale,
New York Branch, a duly licensed branch of Westdeutsche
Landesbank Girozentrale, a public law banking institution organized under the
Construction Agency Agreement
laws of North Rhine-Westphalia, Germany, as holder of all of the certificates of
beneficial interest in Equity Capital Trust (in such capacity, the "Original
Certificate Participant"), as the original lender under the Original Credit
Agreement (the "Original Lender") and as administrative agent for the Original
Lender (in such capacity, the "Original Administrative Agent"), and the
documents entered into in connection therewith, acquired the Facility (as
hereafter defined) and agreed to finance the construction of the power
generation facility to be owned by Owner Trust;
WHEREAS, on July 26, 2001, the Original Lender assigned,
transferred and conveyed to each of Citicorp USA, Inc., The Chase Manhattan
Bank, Bank of America, N.A., and Royal Bank of Canada (collectively, together
with the Original Lender, the "Club Lenders") an interest in and to certain of
the Original Lender's rights and obligations under the Original Credit
Agreement;
WHEREAS, effective as of the date hereof, Apple LLC, Original
Certificate Participant, Equity Capital Trust and certain other persons are
entering into the Master Assignment Agreement pursuant to which (i) Apple LLC is
assigning, transferring and conveying to the Owner Trust Parent its entire
interest in Owner Trust and (ii) the Club Lenders are assigning, transferring
and conveying to the Lenders an interest in and to all of the Club Lenders'
rights and obligations under the Original Credit Agreement, as amended and
restated as of the date hereof;
WHEREAS, subject to the terms and conditions hereof, the
parties hereto desire to amend and restate in its entirety the Original
Agreement, and pursuant to this Agreement (i) Owner Trust appoints Agent as its
sole and exclusive agent in connection with the construction of the Facility and
(ii) Agent accepts such appointment in accordance with the terms and conditions
set forth herein; and
WHEREAS, the Facility (as hereinafter defined), as
constructed, will be the property of Owner Trust;
NOW, THEREFORE, in consideration of the foregoing, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 Interpretation. In this Agreement, unless a clear contrary
intention appears:
(a) the singular number includes the plural number and
vice versa;
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Construction Agency Agreement
(b) reference to any Person includes such Person's
successors and assigns but, if applicable, only if such successors and
assigns are permitted by this Agreement, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually;
(c) reference to any gender includes each other gender;
(d) reference to any agreement (including this Agreement),
document or instrument means such agreement, document or instrument as
amended, supplemented, modified or restated and in effect from time to
time in accordance with the terms thereof and, if applicable, the terms
of this Agreement and the other Operative Agreements;
(e) reference to any Applicable Law means such Applicable
Law as amended, modified, codified, replaced or reenacted, in whole or
in part, and in effect from time to time, including rules and
regulations promulgated thereunder and reference to any section or
other provision of any Applicable Law means that provision of such
Applicable Law from time to time in effect and constituting the
substantive amendment, modification, codification, replacement or
reenactment of such section or other provision;
(f) reference in this Agreement to any Article, Section,
Appendix, Schedule or Exhibit means such Article or Section hereof or
Appendix, Schedule or Exhibit hereto;
(g) "hereunder," "hereof," "hereto" and words of similar
import shall be deemed references to this Agreement as a whole and not
to any particular Article, Section or other provision thereof;
(h) "including" (and with correlative meaning "include")
shall be deemed to be followed by the words "without limitation";
(i) relative to the determination of any period of time,
"from" means "from and including" and "to" means "to but excluding";
(j) with reference to any time or date specified herein,
time is of the essence;
(k) with respect to any rights and obligations of the
parties, all such rights and obligations shall be enforced to the
extent permitted by Applicable Law;
(l) with respect to any mathematical calculation, the
concept of "without duplication," shall be deemed to apply in all
instances; and
(m) notwithstanding anything to the contrary contained in
this Agreement, and except as provided for in the Intercreditor
Agreement, any Operative
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Construction Agency Agreement
Agreement or any other document entered into in connection therewith or
herewith, no Authorized Representative, Secured Party or Participant
shall be entitled to exercise (or direct or consent to the exercise of)
any right or remedy; or amend, modify, supplement or waive any such
right, remedy or provision under this Agreement in respect of any
representation, warranty, agreement, covenant, default, Agent Default,
Agent Event of Default, or Owner Trust Termination Event or other
provision contained in this Agreement unless such Person is a Benefited
Secured Party or the Authorized Representative of a Benefited Secured
Party and such representation, warranty, agreement, covenant, default,
Agent Default, Agent Event of Default, or Owner Trust Termination Event
or other provision is a Special Provision of such Benefited Secured
Party.
1.2 Accounting Terms. In this Agreement, unless expressly
otherwise provided, accounting terms shall be construed and interpreted, and
accounting determinations and computations shall be made, in accordance with
GAAP.
1.3 Legal Representation of the Parties. The Operative
Agreements were negotiated by the parties with the benefit of legal
representation and any rule of construction or interpretation otherwise
requiring the Operative Agreements to be construed or interpreted against any
party shall not apply to any construction or interpretation hereof or thereof.
1.4 Defined Terms. Unless a clear contrary intention appears,
terms defined herein have the respective indicated meanings when used in this
Agreement.
"Actual Knowledge" shall mean, with respect to any Person,
actual knowledge of, or receipt of written notice by, an officer (or other
employee whose responsibilities include the administration of the Facility or
the Operative Agreements, as the case may be) of such Person.
"Additional Costs" shall mean amounts payable by Owner Trust
pursuant to Sections 9.2 and 9.3 of the Credit Agreement and Sections 13.03 and
13.04 of the Master Trust Agreement.
"Administrative Agent" shall mean Citicorp USA, Inc., as the
administrative agent for the Lenders under the Operative Agreements, or any
successor administrative agent appointed in accordance with the terms of the
Credit Agreement.
"Advance Payments" shall mean funds advanced to Agent by Owner
Trust pursuant to the Budget (a) to make payment to third parties or (b) as
reimbursement for Agent's or any of Agent's Affiliates' costs and expenses
incurred or accrued in connection with Agent's Required Actions, including
payments to Contractors under the Construction Contracts, not less frequently
than is customary for the construction of a power generation plant in the power
generation industry or otherwise in a timely manner.
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Construction Agency Agreement
"Affiliates" shall mean, when used with respect to a specified
Person, another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with the
Person specified.
"After Tax Basis" shall mean, with respect to any payment to
be received, on a basis such that such payment received shall be supplemented by
a further payment or payments to the recipient so that the sum of all such
payments shall, after deduction for the net increase in all Taxes (taking into
account all reductions in Taxes attributable to credits and deductions resulting
from the Impositions or Claims for which payments are being made, as determined
in good faith by such recipient) resulting from the receipt (actual or
constructive) or accrual of such payments, be equal to the payment otherwise
required to be made.
"Agent" shall have the meaning assigned to such term in the
opening paragraph.
"Agent Default" shall mean any event or condition which, with
the lapse of time or the giving of notice, or both, would constitute an Agent
Event of Default.
"Agent Event of Default" shall have the meaning set forth in
Section 8.1.
"Aggregate Lenders' Commitment" shall mean $756,600,000.
"Aggregate Owner Trust's Commitment" shall mean $780,000,000.
"Aggregate Owner Trust's Contribution Commitment" shall mean
$23,400,000.
"Agreement" shall mean this Amended and Restated Construction
Agency Agreement.
"Allowance for Owner Trust's Cost of Financing" shall mean the
amount of allowance for Owner Trust's actual cost of financing (interest, fees,
Letter of Credit costs and the like) as set forth in the Budget line item so
labeled (but excluding Owner Trust Yield).
"Apple LLC" shall have the meaning set forth in the first
recital to this Agreement.
"Applicable Laws" shall mean, as to any Person, all existing
and future laws (including all Environmental Laws), rules, regulations,
statutes, treaties, codes, ordinances, permits, certificates, orders, decrees,
rulings, directives, binding judgments, injunctions, writs, determinations,
awards, permits, licenses and concessions of and interpretations by, any
Governmental Authorities having the force of law, as the same may be issued or
promulgated from time to time, which are applicable to (a) such Person with
respect to the ownership and/or operation of the Property or the transactions
contemplated by this Agreement and the other Operative Agreements or (b) the
Property or any part thereof, or the ownership, acquisition,
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Construction Agency Agreement
financing, installation, construction, operation, mortgaging, occupancy,
possession, use, non-use or condition of the Property or any part thereof.
"Applicable Payee" shall have the meaning set forth in, as
applicable, Section 12.3(a) or 13.3(a).
"Applicable Payor" shall have the meaning set forth in, as
applicable, Section 12.3(a) or 13.3(a).
"Appraisal" shall mean a valuation of the Property which is
prepared in a manner consistent with the appraisal accepted by the
Administrative Agent under Section 7.5(f) and is otherwise reasonably
satisfactory in scope and content to the Administrative Agent.
"Appraiser" shall mean American Appraisal Associates, Inc. or
any other appraiser selected by Administrative Agent and consented to by Agent,
such consent not to be unreasonably withheld.
"Appurtenant Rights" shall mean (i) all agreements, easements,
rights of way or use, rights of ingress or egress, privileges, appurtenances,
tenements, hereditaments and other rights and benefits at any time belonging or
pertaining to the Land or the Improvements, including the use of any streets,
ways, alleys, vaults or strips of land adjoining, abutting, adjacent or
contiguous to the Land and (ii) all permits, licenses and rights, whether or not
of record, appurtenant to the Land.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by Owner Trust and an Owner Trust Eligible Assignee in
connection with any assignment by Owner Trust of any of its rights and
obligations under this Agreement pursuant to Sections 15.3(c) and (d), in a form
consistent with the provisions of Sections 15.3(c) and (d) and otherwise
mutually agreed upon by Owner Trust and the Owner Trust Eligible Assignee and
reasonably satisfactory to the Administrative Agent.
"Asset Purchase" shall have the meaning set forth in Section
10.1(a).
"Authorized Representative" shall have the meaning set forth
in the Intercreditor Agreement.
"Auxiliary Equipment" shall mean all auxiliary equipment to be
affixed to, associated with or necessary for the operation of the Facility.
"Available Aggregate Owner Trust's Commitment" shall mean an
amount equal to the excess, if any, of (a) the amount of the Aggregate Owner
Trust's Commitment, less (b) the Outstanding Balance.
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Construction Agency Agreement
"Bank" shall mean First Union Trust Company, National
Association acting hereunder in its individual capacity and its successors and
assigns as Master Owner Trustee under the Master Trust Agreement or as Owner
Trustee under any Trust Agreement.
"Base Rate" shall have the meaning set forth in the Credit
Agreement or any other Financing Document, as applicable.
"Benefited Secured Party" has the meaning assigned to such
term in the Intercreditor Agreement.
"Bond Balance" shall mean, at any time, the aggregate
principal amount of any Bonds outstanding.
"Bond Closing Date" shall mean, with respect to each series of
Bonds, the date on which the Bond Documents related thereto are executed.
"Bond Documents" shall mean the Loan Agreement or
participation or installment payment agreement or lease, the Bond Trust
Indenture, the Tender Agent Agreement, the Bonds and any similar documents that
may be entered into from time to time in connection with the issuance of a
series of Bonds.
"Bond Fees" shall mean the fees of Bond Trustee and any other
fees provided for in the Bond Documents other than the Bond Underwriting Fees
(to the extent it is customary for Bond Underwriting Fees to be deducted from
such fees).
"Bond Proceeds" shall mean the proceeds of any Bonds, net of
any Bond Underwriting Fees (to the extent it is customary for such fees to be
deducted from such fees).
"Bond Trustee" shall mean Chase Manhattan Trust Company,
National Association or any other Person, in its capacity as Bond Trustee under
a Bond Trust Indenture.
"Bond Trust Indenture" shall mean the Trust Indenture, dated
as of the Bond Closing Date, from PEDFA to Bond Trustee or any other indenture
providing for the issuance of Bonds.
"Bond Underwriting Fees" shall mean the fees, charges and
expenses incurred in connection with the authorization, sale, issuance and
delivery of a series of Bonds; including bond discount, printing expense, title
insurance, recording fees, and initial fees and expenses of the Bond Trustee,
PEDFA, Indiana County Industrial Development Authority, the Issuing Bank and the
Bond remarketing agent, subject to the limitations of the Loan Agreement or any
similar agreement in connection with any series of Bonds.
"Bondholders" shall mean beneficial owners of Bonds.
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Construction Agency Agreement
"Bonds" shall mean one or more series of (i) PEDFA's Exempt
Facilities Revenue Bonds (Reliant Energy [_____________], LLC Facility) in the
aggregate principal amount of up to $400,000,000 issued pursuant to the Bond
Trust Indenture relating thereto or (ii) any other Securities or Tax-Exempt
Bonds, both as defined in the Intercreditor Agreement.
"Borrowers" shall mean any Person owning a Facility or
Replacement Facility, each in its capacity as a Borrower under a Financing
Document.
"Budget" shall mean the budget attached hereto as Exhibit A
and, to the extent amended in accordance with the provisions of Section 3.3,
such budget as so amended.
"Business Day" shall mean (a) any day of the year except
Saturday, Sunday and any day on which banks are required or authorized to close
in
New York City or Houston, Texas and (b) if the applicable Business Day
relates to any Payments as to which the Financing Costs or Owner Trust Yield are
based on a LIBO Rate, any day which is a "Business Day" described in clause (a)
and which is also a day for trading in Dollar deposits by and between commercial
banks in the London interbank market.
"CAA Termination Date" shall mean the earliest to occur of (i)
the Maturity Date, (ii) the closing date with respect to the exercise by Agent
(or a Designee) of the Purchase Option for the Property, (iii) the closing date
with respect to the exercise by Agent (or a Designee) of the Lease Option for
the Property, and (iv) the closing date with respect to the Remarketing
Requirement for the Property.
"Cancellation Premium" shall mean, at any time, with respect
to any Construction Contract, the amount, if any (whether denominated as a
cancellation fee, penalty, liquidated damages or otherwise), that is required to
be paid to the Seller or EPC Contractor thereunder in excess of all purchase
price payments made prior to the date of such cancellation under the
Construction Contracts that have been or are being cancelled by Owner Trust on
such date.
"Cash Collateral Date" shall mean the third anniversary date
of the Closing Date.
"Casualty" shall mean any damage to or destruction of all or
any portion of the Facility as a result of a fire, earthquake, vandalism,
explosion, collision, storm, lightning, or other similar event including the
Release of Hazardous Substances.
"Certificate Participants" shall mean the several banks and
financial institutions, or other Equity Eligible Assignees, from time to time
holders of beneficial interests in Owner Trust Parent.
"[_____________] CAA" shall mean the Amended and Restated
Construction Agency Agreement dated as of the Closing Date among Reliant Energy
[_____________] County, LLC, [_____________] County Trust, Bank, Owner Trust
Parent, the Certificate Participants, the Lender Agents and the Lenders.
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Construction Agency Agreement
"[_____________] County Trust" shall mean [_____________]
County Trust, a Delaware business trust.
"[_____________] Facility" shall mean the "Facility" as
defined in the [_____________] CAA.
"Citibank" shall mean Citibank, N.A.
"Claims" shall mean any and all actions, causes of action,
suits, fines, penalties, claims, demands, liabilities, losses, and reasonable
out-of-pocket costs and expenses (including reasonable attorneys' and, with
consent of Agent unless an Agent Event of Default or an Owner Trust Termination
Event has occurred and is continuing, consultants' fees and expenses) of any
nature whatsoever (but excluding, in any event, Taxes).
"Closing Date" shall mean November , 2001.
"Club Lenders" shall have the meaning set forth in the second
recital to this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated or issued from time to time
thereunder.
"Co-Documentation Agent" shall mean Toronto Dominion (Texas)
Inc., a Delaware corporation, as the co-documentation agent or any successor
co-documentation agent for the Lenders under the Credit Agreement.
"Collateral Agent" shall mean the entity acting in such
capacity from time to time under the Intercreditor Agreement.
"Collateral Agreement" shall mean a Collateral Agreement among
Agent, the Collateral Agent and Deposit Bank (in a form acceptable to Agent,
Lessee, Owner Trust, Administrative Agent and other Authorized Representatives
of the applicable Secured Parties), providing for the deposit of Deposit Account
Collateral by Agent with Deposit Bank, for the benefit of Lenders, Certificate
Participants and other applicable Secured Parties subject to a collateral
deposit requirement pursuant to Section 5.1(e) naming Collateral Agent and such
other applicable Authorized Representatives as the beneficiary, for the benefit
of such Secured Parties and any other party having rights therein pursuant to
the terms of the Intercreditor Agreement.
"Collateral Assignment of Lessee Mortgage" shall mean a
collateral assignment of the Lessee Mortgage from Owner Trust to Collateral
Agent, for the benefit of the Secured Parties.
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Construction Agency Agreement
"Commitment Fee" shall have the meaning set forth in Section
5.3(a).
"Commitments" shall mean, collectively, the Lenders'
Commitment and any commitment of any Person to fund under a Financing Document.
"Complete," "Completion" or "Completed" shall mean, with
respect to the Facility, such time as the Facility shall have been completed as
provided in Section 4.4. The term "Complete" used as a verb shall have a
correlative meaning.
"Completion Date" shall mean, with respect to the Facility,
the date on which Completion has occurred.
"Condemnation" shall mean any taking or sale of the use,
access, occupancy, easement rights or title to the Facility or any part thereof,
wholly or partially (temporarily or permanently), by or on account of any actual
eminent domain or expropriation proceeding or other taking of action by any
Person having the power of eminent domain or expropriation in the exercise of
such power, including an action by a Governmental Authority to change the grade
of, or widen the streets adjacent to, the Facility, or alter the pedestrian or
vehicular traffic flow to the Facility so as to result in a change in access to
the Facility, or by or on account of an eviction by paramount title or any
transfer made in lieu of any such proceeding or action.
"Construction Contracts" shall mean the EPC Contract and the
Purchase Agreements.
"Construction Period" shall mean, with respect to the
Facility, the period commencing on the date on which such construction of the
Facility begins and ending on the earlier to occur of (a) the Completion Date
and (b) the Outside Completion Date.
"Contest" shall mean, with respect to (a) any Liens arising by
operation of law, materialmen's, mechanics', workmen's, repairmen's, employees',
carriers', warehousemen's and other like Liens or other Claims (each, a "Subject
Claim") or any Applicable Law affecting any Person or its property, a contest of
the amount, validity or application, in whole or in part, of such Subject Claim
or Applicable Law pursued in good faith and by appropriate legal, administrative
or other proceedings diligently conducted so long as: (i) adequate reserves have
been established with respect to such Subject Claim or Applicable Law, as the
case may be, in accordance with GAAP, (ii) during the period of such Contest the
enforcement of such Subject Claim or Applicable Law, as the case may be, is
effectively stayed, (iii) such contest, in the case of Applicable Law, does not
involve any material risk of (A) foreclosure, sale, forfeiture or loss of, or
imposition of any material Lien on, the Facility or any part thereof, or (B) the
impairment of the ownership, use, operation or maintenance of the Facility or
any part thereof, and (iv) during the period of such Contest there shall be no
risk of the imposition of criminal liability or civil penalties or fines (that
in the case of such civil penalties or fines are not fully indemnifiable by
Agent) on the Secured Parties and (b) any Taxes or any Lien imposed on
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Construction Agency Agreement
property of any Person (or the related underlying claim for labor, material,
supplies or services) by any Governmental Authority for Taxes, a contest
conducted in accordance with the provisions of Section 12.3(k). The term
"Contest" used as a verb shall have a correlative meaning.
"Continue," "Continuation" and "Continued" each refer to a
continuation of Payments of one Type as such Type.
"Contractors" shall mean the EPC Contractor and Sellers.
"Control" shall mean (including the correlative meanings of
the terms "controlled by" and "under common control with"), as used with respect
to any Person, the ability of another Person (whether directly or indirectly and
whether by the ownership of voting securities, contract or otherwise) to appoint
and/or remove the majority of the members of the board of directors or other
governing body of that Person.
"Corporate Rating" shall mean the rating assigned by a Rating
Agency (whether indicative or formal) to Guarantor as its corporate or
counterparty ratings, as applicable.
"Co-Syndication Agent" shall mean Commerzbank AG,
New York and
Grand Cayman branches, as the co-syndication agent for the Lenders under the
Credit Agreement.
"Credit Agreement" shall mean the Amended and Restated Credit
Agreement dated as of the Closing Date among the Borrowers, the Lender Agents,
the Lenders, the Bank and the Issuing Bank.
"Debt Funding" shall mean any funding of a Payment made or to
be made with the proceeds of any Lease Indebtedness.
"Deposit Account Collateral" shall mean United States Treasury
securities having a maturity of 90 days or less, cash or such other forms of
collateral as may be mutually acceptable to Owner Trust, all of the applicable
Secured Parties who benefit from a collateral deposit requirement in accordance
with Section 5.1(e), Administrative Agent, Collateral Agent and Agent, which
Deposit Account Collateral, if required, shall be deposited with Deposit Bank in
accordance with a Collateral Agreement executed and delivered by Agent, to and
in respect of which Agent shall have delivered or caused to be delivered to
Owner Trust such Uniform Commercial Code financing statements as Owner Trust
shall request and one or more opinions of counsel to Agent, reasonably
acceptable to Owner Trust, opining as to the enforceability of the Collateral
Agreement, the perfection of a valid first priority security interest in such
collateral and such other matters concerning the foregoing as Owner Trust shall
reasonably request.
"Deposit Bank" shall mean a bank or other financial
institution (which is not Administrative Agent or any Secured Party) that is
reasonably acceptable to Agent, Administrative Agent, Collateral Agent and Owner
Trust.
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Construction Agency Agreement
"Deposit Payment" shall have the meaning set forth in Section
11.2.
"Designee" shall mean any Person to which Agent assigns a
Purchase Option pursuant to Section 10.1(c).
"Direct Payments" shall mean: (i) all payments actually made,
incurred or accrued directly by Owner Trust to third parties other than the
Secured Parties pursuant to the Budget, and (ii) all payments actually made,
incurred or accrued directly by Owner Trust to third parties as a Non-Budget
Amount for the Completion of the Facility, including (A) payments made by Owner
Trust to third parties for indemnification claims, additional taxes, penalties,
cancellation fees, Financing Costs and additional costs borne by Owner Trust
contemplated as a contingency item in the Budget, and (B) payment of a
Non-Budget Amount.
"Disbursement Request" shall mean a disbursement request
issued by Agent to a Bond Trustee pursuant to the applicable Loan Agreement.
"Documentation Agent" shall mean ABN AMRO Bank N.V., as the
documentation agent for the Lenders under the Credit Agreement.
"Dollars" and "$" means lawful money of the United States of
America.
"Environmental Action" shall mean any administrative,
regulatory or judicial action, suit, demand, demand letter, claim, notice of
noncompliance or violation, notice of liability or potential liability,
investigation, proceeding, consent order or consent agreement arising under any
Environmental Law or arising from alleged injury or threat of injury to human
health, safety, natural resources, land use or the environment in connection
with or arising from exposure to or the actual or potential Release of Hazardous
Substances, including, without limitation, (a) by any Governmental Authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
and (b) by any Governmental Authority or any third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive relief.
"Environmental Audit" shall mean a Phase I environmental site
assessment (the scope and performance of which meets or exceeds the current ASTM
Standard Practice E1527 for Environmental Site Assessments: Phase I
Environmental Site Assessment Process) prepared for the Facility and/or a Phase
II environmental site assessment (the scope and performance of which meets or
exceeds the current ASTM Standard Practice E1903 for Environmental Site
Assessments: Phase II Environmental Site Assessment Process) prepared for the
Facility (if recommended by the environmental consultant who prepared the Phase
I environmental site assessment).
"Environmental Law" shall mean all existing and future
federal, state, regional, county or local law (as well as obligations, duties,
and requirements under common law), statute, ordinance, code, rule, regulation,
license, permit, authorization, approval, covenant,
12
Construction Agency Agreement
administrative or court order, judgment, decree or injunction or any agreement
with a Governmental Authority applicable to the ownership and/or operation of
the Property and the transactions contemplated by this Agreement:
(x) relating to Hazardous Substances or materials
containing Hazardous Substances (or the investigation, cleanup,
removal, remediation or encapsulation thereof, or any other response
thereto), or the regulation or protection of human health, safety
(including work place safety), natural resources, land use, or the
environment, including air, water vapor, surface water, groundwater,
drinking water, land (including surface or subsurface), plant, aquatic
and animal life, or
(y) concerning exposure to, or injury or damage
caused by, or the use, containment, storage, recycling, treatment,
generation, discharge, emission, Release or threatened Release,
transportation, processing, handling, labeling, production, disposal or
remediation of any Hazardous Substance, Hazardous Condition or
Hazardous Activity.
"Environmental Violation" shall mean any activity, occurrence
or condition that violates or results in noncompliance with any Environmental
Law or Governmental Action pursuant to an Environmental Law.
"EPC Contract" shall mean the Agreement for Engineering,
Procurement and Construction, dated as of January 17, 2001, between WestLB and
the EPC Contractor for engineering, procurement and construction (including
installation of Turbines) of the Facility, as assigned to, and accepted by, the
Owner Trust pursuant to the Purchase Option Assignment and Assumption Agreement,
effective as of May 23, 2001 among REPG, the Owner Trust and WestLB, and as
amended by the First Amendment, dated as of July 5, 2001.
"EPC Contractor" shall mean the consortium formed by
Duke/Fluor Xxxxxx and Alstom Power Inc., as the contractor who entered into the
EPC Contract.
"Equipment" shall have the meaning set forth in the Security
Agreement.
"Equity Capital Trust" shall have the meaning set forth in the
first recital to this Agreement.
"Equity Eligible Assignees" shall have the meaning set forth
in Section 16.08 of the Master Trust Agreement.
"Event of Loss" shall mean any of the following events: (a)
loss of all or a substantial portion of the Facility or the use thereof due to
destruction, damage beyond economical repair or rendition of the Facility
permanently unfit for the Intended Use contemplated by the Plans and
Specifications on a commercially feasible basis; (b) any event which results in
the receipt of Net Available Proceeds with respect to the Facility on the basis
of
13
Construction Agency Agreement
a total loss or taking or constructive total loss or taking and Agent fails to
demonstrate to the reasonable satisfaction of Owner Trust and Administrative
Agent that the restoration thereof can reasonably be expected to be completed
within the limits of the Budget (taking into account Net Available Proceeds) so
that the Facility will be completed on or before the Completion Date; (c) a
Condemnation for an indefinite period or a period in excess of 180 days by any
Governmental Authority which constitutes the taking of all or a substantial
portion of the Facility such that the remainder is not sufficient to permit
operation of the Facility on a commercially feasible basis, the occurrence of
such events to be confirmed by the Independent Engineer unless Agent,
Administrative Agent and Owner Trust shall otherwise agree; and (d) the
incurrence of a Material Environmental Liability. A loss of a "substantial
portion" of the Facility shall be deemed to occur if, in the judgment of Owner
Trust and Administrative Agent, based on the advice of the Independent Engineer
after such event, (i) Agent or Lessee will not be able to fully perform in all
material respects its obligations under this Agreement, the Lease, the other
Operative Agreements to which it is a party or (ii) a material diminution in the
Value of the Facility will occur. A material diminution in the Value of the
Facility shall mean 80% of the Value as of the Completion Date as determined by
the appraisal described in Section 7.5(f).
"Existing [_____________] Facility" shall mean the existing
coal-fired power plant currently owned by Reliant Mid-Atlantic Power Holdings,
LLC and located on the Land.
"Facility" means the Land and the Improvements and Equipment
constructed thereon (including all related appliances, Appurtenances,
accessions, controls, interconnection facilities, transmission lines, wiring,
furnishings, materials and parts and other related facilities and equipment,
along with any replacements) pursuant to the EPC Contract (or any other
construction contracts entered into by the Lessor or the Lessee) and the
Construction Agency Agreement, and all associated contracts, rights and assets,
which constitutes under the Plans and Specifications is contemplated to be a 521
MW (net) electrical generating facility and related facilities located in East
Wheatfield and West Wheatfield Townships, Indiana County and Xxxxxxxxxxxx
County, Pennsylvania, excluding the Existing [_____________] Facility, but
including certain Shared Facilities.
"Fee Payment Date" shall mean the last day of each March,
June, September, and December, and the CAA Termination Date; provided, however,
that if such day is not a Business Day, such Fee Payment Date will be the next
Business Day.
"Final Project Costs" shall mean the Outstanding Balance
computed as of the Completion Date after giving effect to any Payments made
hereunder in connection with the Completion of the Facility (less amounts funded
for punch list items that are not expended for such purpose and applied to
repayment of the Lease Indebtedness and Owner Trust Contributions).
"Financier Documents" shall have the meaning set forth in
Section 16.5(a).
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Construction Agency Agreement
"Financing Costs" shall mean interest due on the Loans, the
Bond Balance (including reimbursement obligations in respect of drawings under a
Letter of Credit to pay interest on the Bond Balance) and other Lease
Indebtedness, in each case as calculated in accordance with the applicable
Financing Documents including adjustments to such rates, if any, upon the
occurrence of an event of default.
"Financing Documents" shall have the meaning set forth in the
Intercreditor Agreement.
"Fixtures" shall mean all fixtures paid for by Owner Trust
relating to the buildings or the other Improvements, including all components
thereof, located in or on the buildings or the other Improvements, together with
all replacements, modifications, alterations and additions thereto.
"Force Majeure Event" shall mean any event beyond the control
of Agent, other than a Casualty or Condemnation, including strikes, lockouts,
acts of God, adverse weather conditions, inability to obtain labor or materials,
governmental activities, civil commotion, war and enemy action and delays in
obtaining necessary permits and approvals from any Governmental Authority,
including any event or condition that is characterized or defined as a force
majeure or force majeure event in any Construction Contract, in each case as
determined by the Agent in its reasonable discretion by written notice to the
Administrative Agent delivered after the occurrence of the relevant event; but
an event shall not be considered to have been beyond the control of Agent if
such event (x) could have been avoided by exercising that standard of foresight,
care and due diligence that an experienced developer of power generation
facilities would exercise under the circumstances or (y) could have been avoided
through the commercially reasonable expenditure of funds by Agent from the
proceeds of Payments.
"Funded Budget Amount" shall mean at any time the excess of
(a) the sum of (i) the aggregate of all Payments made by Owner Trust included in
or contemplated by Part A of the Budget as amended in accordance with this
Agreement plus (ii) funds on deposit in the Project Fund before any application
referred to in clause (b)(i) of this definition, plus (iii) the Bond
Underwriting Fees, plus (iv) all Financing Costs and other fees and expenses
that are included in Part A of the Budget that are accrued and unpaid as of the
date on which payment of the Deposit Payment or the Termination Amount, as the
case may be, is due and payable, over (b) the sum of (i) funds on deposit in the
Project Fund that are available for application to the Bonds, the Letter of
Credit Obligations and Loans and, in the case of the calculation of the Deposit
Payment or the Termination Amount, have been actually applied for such purpose,
plus (ii) any amounts received by Owner Trust and allocable to such Payments
upon consummation of the Purchase Option; provided, however, that in the event
this Agreement is terminated prior to the expiration of its Term, the Funded
Budget Amount shall be increased to include all Cancellation Premiums and all
other actual or reasonably anticipated wind-up costs incurred by Owner Trust
(including amounts reimbursable to Agent for items under the Budget incurred by
Agent but not yet paid with respect to the Facility) in connection with the
Facility.
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Construction Agency Agreement
"Funded Non-Budget Amount" shall mean at any time the
aggregate of all Non-Budget Amounts funded by Owner Trust pursuant to Part B of
the Budget minus any amounts received by Owner Trust and allocable to such
Payments upon consummation of the Purchase Option.
"GAAP" shall mean United States generally accepted accounting
principles, in effect from time to time.
"Good Faith" or good faith shall mean a party hereto
conducting itself reasonably and in good faith under the circumstances.
"Governmental Action" shall mean all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, decrees, licenses, exemptions, legally enforceable notices to and
declarations of or with, or required by, any Governmental Authority which are
applicable to Agent or to Owner Trust with respect to the transactions
contemplated by this Agreement and the other Operative Agreements, or required
by any Applicable Laws.
"Governmental Authority" shall mean any United States,
foreign, state, county, regional, municipal or other local governmental
authority or judicial or regulatory agency, board, body, commission,
instrumentality, public registry, court or quasi-governmental authority, in each
case having jurisdiction over the Property or the applicable party to the
Operative Agreements, except that with respect to Tax indemnification
obligations and Impositions, the term "Governmental Authority" shall not include
any authority of a jurisdiction outside of the United States of America.
"GPU" shall mean GPU, Inc., a Pennsylvania corporation.
"Ground Lease" shall mean, with respect to the Land, a Ground
Lease, dated as of the Closing Date, by and between Ground Lessor, as lessor and
Owner Trust, as lessee (and any memorandum thereof) in form and substance
reasonably satisfactory to Owner Trust and Administrative Agent.
"Ground Lessor" shall mean Reliant Energy [_____________],
LLC, a Delaware limited liability company.
"Guarantor" shall mean Reliant Resources, Inc., a Delaware
corporation.
"Guaranty" shall mean that certain Amended and Restated
Guaranty, dated as of the Closing Date, executed by Guarantor in favor of the
beneficiary as described therein.
"Guaranty Default" shall mean any event or condition that, but
for notice or lapse of time, would be a Guaranty Event of Default.
16
Construction Agency Agreement
"Guaranty Event of Default" shall have the meaning set forth
in the Guaranty.
"Hazardous Activity" shall mean any activity, process,
procedure or undertaking that directly or indirectly (i) produces, generates or
creates any Hazardous Substance, (ii) causes or results in the Release of any
Hazardous Substance into the environment, including air, water vapor, surface
water, groundwater, drinking water, land (including surface or subsurface),
plant, aquatic and animal life, (iii) involves the containment, transport,
handling, treatment, storage or disposal of any Hazardous Substance, or (iv)
would be regulated as hazardous waste treatment, storage or disposal within the
meaning of any Environmental Law.
"Hazardous Condition" shall mean any condition that violates
or that results in noncompliance with, or a duty to report, investigate or
remediate under any Environmental Law.
"Hazardous Substance" shall mean any of the following: (i) any
petroleum or petroleum product, explosives, radioactive materials, asbestos,
formaldehyde, polychlorinated biphenyls, lead and radon gas; or (ii) any
substance, contaminant, material, product, derivative, compound or mixture,
mineral, chemical, waste, gas, medical waste or pollutant that is regulated, or
the use, storage, treatment, Release, transportation or handling of which is
regulated, under any Environmental Law.
"[_____________] CAA" shall mean the Amended and Restated
Construction Agency Agreement dated as of the Closing Date among Reliant Energy
[_____________], LLC, [_____________] Trust, Bank, Owner Trust Parent, the
Certificate Participants, the Lender Agents and the Lenders.
"[_____________] Facility" shall mean the "Facility" as
defined in the [_____________] CAA.
"[_____________] Trust" shall mean [_____________] Trust, a
Delaware business trust.
"Impositions" shall have the meaning set forth in Section
12.3(d).
"Improvements" shall mean all buildings, structures, Fixtures,
Equipment, and other improvements of every kind existing at any time and from
time to time on or under the Land paid for or otherwise purchased with amounts
advanced by Lessor, together with any and all appurtenances on the Land, to such
buildings, structures or improvements, including sidewalks, utility pipes,
conduits and lines, parking areas and roadways, and including all additions to
or changes in such Improvements at any time located on the Land, including any
Shared Facilities, but excluding the Existing [_____________] Facility.
"Indemnified Person" shall mean Owner Trust and its successors
and assigns.
17
Construction Agency Agreement
"Independent Engineer" shall mean a licensed engineer of
national standing selected by Administrative Agent with consent of Agent, such
consent not to be unreasonably withheld.
"Initial Turbine" shall mean the Alstom STG turbine being
manufactured by Alstom Power, Inc. pursuant to the EPC Contract.
"Insurance Requirements" shall mean, as applicable, insurance
meeting the requirement of Article VI, on terms and conditions of any insurance
policy required by this Agreement, and all requirements of the issuer of any
such policy.
"Intended Use" shall mean a coal-fired generation facility.
"Intercreditor Accession Agreement" shall mean any
Intercreditor Accession Agreement executed and delivered pursuant to Section 17
of the Intercreditor Agreement.
"Intercreditor Agreement" shall mean the Collateral Agency and
Intercreditor Agreement, dated as of the Closing Date among [_____________]
Trust, as a Borrower, [_____________] Trust, as a Borrower, Signal Peak Trust,
as a Borrower, [_____________] County Trust, as a Borrower, Citicorp USA, Inc.,
as Lender Agent, Citibank N.A., as Collateral Agent, and certain other Secured
Parties and authorized representatives.
"Interest Period" shall, as applicable, have the meaning set
forth in the Credit Agreement or in any other Financing Document.
"Investment Grade Corporate Rating" shall mean a Corporate
Rating of at least BBB- (or equivalent ) from each Rating Agency that at the
date of determination has issued a Corporate Rating for Guarantor.
"Issuer" shall mean the issuer of a series of Bonds, including
PEDFA.
"Issuing Bank" shall mean WestLB or another Lender issuing a
Letter of Credit or any entity issuing a Replacement Letter of Credit.
"Issuing Bank Fronting Fee" shall have the meaning set forth
in Section 5.3(b).
"Land" shall mean the parcel of land described on Schedule II
hereto and all Appurtenant Rights thereto.
"Lead Arranger" shall mean Xxxxxxx Xxxxx Xxxxxx Inc., as the
lead arranger and bookrunner for the Lenders under the Credit Agreement.
"Lease" shall mean the applicable lease agreement between a
lessor and the respective lessee for each Facility as contemplated by Section
10.2.
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Construction Agency Agreement
"Lease Commencement Date" shall have the meaning set forth in
Section 10.2(c).
"Lease Event of Default" shall mean a Lease Event of Default
as defined in the Lease.
"Lease Indebtedness" shall have the meaning set forth in the
Intercreditor Agreement.
"Lease Option" shall have the meaning set forth in Section
10.2.
"Lender Agents" shall mean the Lead Arranger, the
Administrative Agent, the Documentation Agent, the Syndication Agent, the
Co-Syndication Agent, the Co-Documentation Agent and the Issuing Bank,
collectively.
"Lender Eligible Assignee" shall have the meaning set forth in
the Credit Agreement.
"Lender Financing Statements" shall mean UCC financing
statements appropriately completed and executed by Owner Trust for filing in the
appropriate state and county offices in Delaware, Texas and Pennsylvania, and
such other offices as may be reasonably requested by Administrative Agent, in
favor of the Collateral Agent for the benefit of the Participants.
"Lenders" shall mean the several banks and other financial
institutions, or other Lender Eligible Assignees, from time to time lenders
under the Credit Agreement.
"Lenders' Commitments" shall mean the Tranche A Commitments
and the Tranche B Commitments.
"Lessee" shall have the meaning set forth in the Lease.
"Lessee Mortgage" shall mean, with respect to the Facility, a
mortgage made by Agent in favor of or, for the benefit of, Owner Trust in form
and substance reasonably satisfactory to Administrative Agent, Owner Trust and
Agent, to be entered into on the Closing Date.
"Lessor Indemnified Person" shall mean the Administrative
Agent, the Collateral Agent, the Certificate Participants, Owner Trust Parent,
the Master Owner Trustee, any co-trustee, each Owner Trustee, each other Lender
Agent, the Issuing Bank, and each Lender, together with all successors, assigns,
officers, directors, agents, employees and Affiliates of the Administrative
Agent, each other Lender Agent, the Issuing Bank and each Lender.
19
Construction Agency Agreement
"Lessor Mortgage" shall mean, with respect to the Facility, a
mortgage made by Owner Trust in favor of, or for the benefit of Collateral Agent
in form and substance reasonably satisfactory to Administrative Agent and Owner
Trust, to be entered into on the Closing Date.
"Letter of Credit" shall mean an irrevocable direct pay letter
of credit or similar instrument, in a form mutually agreed among Owner Trust,
Administrative Agent, Agent and Issuing Bank, which is issued by the Issuing
Bank pursuant to the Credit Agreement, as the same may be increased, reinstated
or extended pursuant to the Credit Agreement for the account of Owner Trust. The
term "Letter of Credit" shall include any Replacement Letter of Credit issued by
the applicable issuing bank pursuant to any other Financing Document.
"Letter of Credit Application" shall mean an application, in
such form as an Issuing Bank, Owner Trust and Agent may agree from time to time,
requesting such Issuing Bank to issue or maintain a Letter of Credit.
"Letter of Credit Commitments" shall have the meaning set
forth in the Credit Agreement (or in the case of a Replacement Letter of Credit,
the applicable other Financing Document).
"Letter of Credit Fee" shall have the same meaning set forth
in Section 5.3(b).
"Letter of Credit Obligations" shall have the meaning set
forth in the Credit Agreement (or in the case of a Replacement Letter of Credit,
the applicable other Financing Document).
"Letter of Credit Participants" shall have the meaning set
forth in the Credit Agreement (or in the case of a Replacement Letter of Credit,
the applicable other Financing Document).
"LIBO Rate" shall have the meaning set forth in the Credit
Agreement or in any other Financing Document, as applicable.
"Lien" shall mean any mortgage, deed of trust, lien, mechanics
lien, pledge, encumbrance, charge or security interest to secure creditors
against loss, including the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement.
"Loan(s)" shall have the meaning set forth in Section 2.1(c)
of the Credit Agreement.
"Loan Agreement" shall mean (a) the Loan Agreement, dated as
of the applicable Bond Closing Date, between PEDFA and Owner Trust or (b) any
other loan agreement entered into in connection with a series of Bonds.
20
Construction Agency Agreement
"Marketing Period" shall mean each period commencing upon
Owner Trust's election to exercise the Remarketing Requirement pursuant to
Section 11.1 and ending (i) sixty (60) days thereafter or (ii) at the option of
Owner Trust such longer period as Owner Trust may determine but in no event
beyond the Maturity Date.
"Master Assignment Agreement" shall mean the Master Assignment
Agreement dated as of the Closing Date between [_____________] Trust,
[_____________] Trust, [_____________] County Trust, WestLB, Citicorp USA, Inc.,
Apple Investments LLC, Apple Investments 2001 Trust, Apple Equity Capital Trust.
"Master Owner Trustee" shall mean First Union in its capacity
as trustee for the Owner Trust Parent.
"Master Trust Agreement" shall mean the Master Trust
Agreement, dated as of the Closing Date, among the Bank, the Borrowers, the
Administrative Agent and the Certificate Participants, Master Owner Trustee,
Administrative Agent, and each Owner Trust.
"Material Adverse Effect" shall mean a material adverse effect
on any of (i) the ability of Agent and Guarantor, taken as a whole, to perform
any of its obligations under this Agreement or any other Operative Agreement to
which either of them is a party on a timely basis, (ii) any material rights of
or benefits available to Collateral Agent, Owner Trust or any Secured Parties,
(iii) the Value, condition or operation of the Facility or (iv) the validity or
enforceability of any Operative Agreement.
"Material Environmental Liability" shall mean, with respect to
the Facility, any Environmental Actions, Environmental Violations or other
liabilities pursuant to an Environmental Law, including with respect to
Hazardous Conditions, which either individually or in the aggregate would be
reasonably likely to result in financial liabilities on the parties hereto that
in the aggregate (without duplication) are likely to exceed $10,000,000 ( or
$20,000,000 at any time that Guarantor has an Investment Grade Corporate
Rating).
"Maturity Date" shall mean December 31, 2004.
"Memorandum of Lease" shall mean a memorandum of the Lease in
recordable form, in form and substance satisfactory to Administrative Agent and
Owner Trust.
"Minimum Collateral Value" shall mean, at any time, an amount
equal to 103% of the sum of (a) Outstanding Balance (unless such Secured
Obligations and related Financing Costs and Owner Trust Yield, as the case may
be, are not entitled to cash collateral pursuant to their applicable Financing
Documents) plus (b) the aggregate Cancellation Premiums for all Construction
Contracts, minus (c) the Uncollateralized Amount. The Minimum Collateral Value
shall never be less than zero.
21
Construction Agency Agreement
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Net Available Proceeds" shall mean, with respect to the
Facility, any Condemnation or Casualty, any insurance proceeds, condemnation
awards or other compensation, awards, damages, liquidated damages and other
payments or relief (including any compensation payable in connection with a
taking) received by Collateral Agent, Agent or Owner Trust from its property
interest in the Facility in respect thereof, net of reasonable expenses incurred
in connection with the collection thereof.
"Non-Budget Amounts" shall have the meaning set forth in
Section 3.4.
"Notes" shall mean any note issued pursuant to the Credit
Agreement and any other Financing Document.
"Operative Agreements" shall mean:
(a) this Agreement;
(b) the Guaranty;
(c) the Credit Agreement;
(d) any Notes;
(e) the Security Agreement;
(f) the Letters of Credit;
(g) any Collateral Agreement;
(h) the Lessor Mortgage;
(i) the Lessee Mortgage;
(j) the Collateral Assignment of Lessee Mortgage;
(k) the EPC Contract;
(l) the Purchase Agreements;
(m) the Purchase Option Assignments;
(n) the Services Agreement;
(o) the Trust Agreement;
22
Construction Agency Agreement
(p) the Master Trust Agreement;
(q) the Ground Lease;
(r) the Lease; and
(s) the Intercreditor Agreement.
"Original Agreement" shall have the meaning set forth in the
first recital to this Agreement.
"Original Certificate Participant" shall have the meaning set
forth in the first recital to this Agreement.
"Original Credit Agreement" shall have the meaning set forth
in the first recital to this Agreement.
"Original Lender" shall have the meaning set forth in the
first recital to this Agreement.
"Original Administrative Agent" shall have the meaning set
forth in the first recital to this Agreement.
"Other CAAs" shall mean the Signal Peak CAA, the
[_____________] CAA and the [_____________] CAA or any Other CAA for a
Replacement Facility.
"Other Leases" shall mean the Lease with respect to the Signal
Peak Facility, the [_____________] Facility and the [_____________] Facility or
any Replacement Facility.
"Other Taxes" shall have the meaning set forth in, as
applicable, Section 12.3(b) or 13.3(b).
"Outside Completion Date" shall mean, with respect to the
Facility, the Maturity Date.
"Outstanding Balance" shall mean, at any time, the amount
equal to the sum of (i) the Funded Budget Amount and (ii) the Funded Non-Budget
Amount, at the time of determination, plus an amount equal to the Financing
Costs, Owner Trust Yield, Commitment Fees, Letter of Credit Fees, Issuing Bank
Fronting Fees, Bond Fees and other obligations, fees and expenses owing to the
Participants under the Financing Documents accrued and unpaid at such time, net
of any Termination Amount or other amounts paid by Agent as of such time.
"Owner Trust" shall have the meaning assigned to such term in
the opening paragraph.
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Construction Agency Agreement
"Owner Trust Contributions" shall mean the portion of any
Payments made by Owner Trust, other than with the proceeds of Lease
Indebtedness.
"Owner Trust Eligible Assignee" shall mean (i) with respect to
any Payment or portion thereof, any commercial bank or financial institution or
other entity consented to by Agent and the Administrative Agent (which consent
shall not be unreasonably withheld or delayed) with respect to an Assignment and
Acceptance, which shall be: (A) a bank, trust company or other financial
institution (1) which is organized under the laws of the United States of
America, any state thereof, any other member of the Organization of Economic
Cooperation and Development or Japan and has an office in the United States of
America, (2) which has capital, surplus and undivided profits of at least
$500,000,000, (3) which has outstanding unsecured long-term indebtedness (that
is not guaranteed by any other Person or subject to any other credit
enhancement) which is rated "A+" or better by S&P and "A1" or better by Xxxxx'x
(or an equivalent rating by another nationally recognized statistical rating
organization of similar standing if neither such corporation is in the business
of rating unsecured bank indebtedness), (4) with respect to which Agent would
have no obligation to withhold Taxes as of the date that such bank or trust
company would assume Owner Trust's rights and obligations, (5) which is not a
competitor of Agent, Guarantor or any of Guarantor's Affiliates (excluding any
such affiliate which is a bank, finance company or other lending institution),
(6) which is not involved in any material litigation or substantive commercial
dispute with Agent, Guarantor or any of Guarantor's Affiliates, and (7) which
will not require the registration of this Agreement or any of the rights of
Owner Trust hereunder under any applicable securities laws or (B) any owner
trust, special purpose vehicle or other entity which is Controlled through 100%
direct or indirect ownership by an entity described in clause (i)(A); provided,
that Owner Trust shall give Agent thirty (30) days prior written notice of any
such proposed transfer or assignment, including the identity of the proposed
assignee, and (ii) with respect to any Payment or the portion thereof subject to
collateral deposit requirements pursuant to Section 5.1(e), if Agent shall
previously have given or shall be giving any Payment Direction/Borrowing Notice
as to such Payment or portion thereof any entity (A) which is organized under
the laws of the United States of America, or any state thereof, (B) with respect
to which Agent would have no obligation to withhold Taxes as of the date that
such entity would assume Owner Trust's rights and obligations, (C) which is not
a competitor of Agent, Guarantor or any of Guarantor's Affiliates (excluding any
such Affiliate which is a bank, finance company or other lending institution),
(D) which is not involved in any material litigation or substantive commercial
dispute with Agent, Guarantor or any of Guarantor's Affiliates, and (E) which
will not require the registration of this Agreement or any of the rights of
Owner Trust hereunder under any applicable securities laws; provided, that Owner
Trust shall give Agent written notice of any such transfer or assignment as soon
as reasonably possible after such transfer or assignment.
"Owner Trust Financing Statements" shall mean UCC financing
statements appropriately completed and executed by Agent for filing in the
appropriate state and county offices in Delaware, Texas and Pennsylvania, and
such other offices as may be reasonably
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Construction Agency Agreement
requested by Collateral Agent or Administrative Agent naming Agent as debtor and
the Owner Trust as secured party, and assigned by the Owner Trust to the
Collateral Agent.
"Owner Trust Lien" shall mean any Lien, true lease or sublease
or disposition of title or liability arising as a result of any claim against
Bank, Owner Trust or any Affiliate of Owner Trust or their property as a result
of action or omission by the Secured Parties, Bank, Owner Trust or any Affiliate
of Owner Trust which does not result from the transactions contemplated by this
Agreement or the other Operative Agreements.
"Owner Trust Parent" shall mean Apple Investments 2001 Trust,
a Delaware business trust.
"Owner Trust Termination Events" shall have the meaning set
forth in Section 9.1.
"Owner Trust Termination Notice" shall have the meaning set
forth in Section 9.2.
"Owner Trust Yield" shall mean yield on the drawn amount of
Payments funded with Owner Trust Contributions.
"Owners' Contribution Commitments" shall have the meaning set
forth in the Master Trust Agreement.
"Participants" shall mean, collectively, any holder(s) of
Lease Indebtedness and the Certificate Participants.
"Payment Date" shall mean the date on which any Financing
Costs, Owner Trust Yield or principal payments are required to be paid pursuant
to any Financing Document.
"Payment Direction/Borrowing Notice" shall have the meaning
set forth in Section 5.1(a).
"Payments" shall mean Advance Payments and Direct Payments.
"PEDFA" shall mean the Pennsylvania Economic Development
Finance Authority, a public instrumentality and body corporate and politic of
the Commonwealth of Pennsylvania, organized and existing under the Pennsylvania
Economic Development Financing Law, as amended, and the issuer of the Bonds.
"Permitted Liens" shall mean the following Liens and other
matters: (a) Liens securing the payment of Taxes and other governmental charges
or levies which are either not delinquent or, if delinquent, are subject to a
Contest; (b) the rights and interests contemplated by or created pursuant to the
Operative Agreements or the Security Documents and, subject to
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Construction Agency Agreement
compliance with the Intercreditor Agreement, the Financing Documents; (c)
mechanics' liens arising in the ordinary course of business for amounts the
payment of which is either not yet delinquent or is subject to a Contest; (d)
Liens arising out of judgments or awards with respect to which (i) appeals or
other proceedings for review are subject to a Contest, or (ii) have been bonded
in an amount not less than the full amount in dispute or other appropriate
provisions have been made; (e) any Owner Trust Lien; (f) zoning, easements,
rights-of-way, restrictions and other similar encumbrances incurred in the
ordinary course of business or in connection with the construction, acquisition,
improvement, operation, use, ownership or restoration of the Facility that do
not materially impair the property affected thereby for the purpose for which
title thereto was acquired, and encumbrances (not securing the payment of
borrowed money), licenses, restrictions on the use of property or minor
imperfections in title that do not materially, individually or in the aggregate
impair the Value, condition or marketability of the Property; (g) pledges or
deposits in connection with obligations under workers compensation, unemployment
insurance and other social security legislation laws or similar legislation; (h)
pledges or deposits securing liability to insurance carriers under insurance or
self-insurance arrangements; (i) pledges or deposits to secure the performance
of bids, trade contracts, surety bonds, performance bonds and other obligations
of a like nature incurred in each case in the ordinary course of business; (j)
setoff rights arising under Applicable Law which are not yet asserted or if
asserted are subject to a Contest; (k) the unrecorded Rema Agreements and (l)
liens and other matters disclosed in title commitments, survey and other
materials delivered pursuant to Section 7.5 and which are reasonably acceptable
to Collateral Agent.
"Permitted Modifications" shall mean each of the following
permitted amendments and modifications to the Plans and Specifications, the
Facility or the Equipment: (i) changes in or further definition of technical
requirements of the Facility; (ii) any increases in costs or prices or other
terms or conditions as permitted pursuant to Section 3.3; (iii) any decreases in
costs or prices as permitted pursuant to Section 3.3; and (iv) any revisions,
amendments or modifications otherwise permitted pursuant to Section 4.2;
provided, that no such amendment or modification shall increase Owner Trust's
indemnification or other payment (except as provided in Section 3.3 or 4.2)
obligations to any Contractor.
"Person" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, limited liability company,
trust, unincorporated organization, Governmental Authority or any other entity.
"Plans and Specifications" shall mean the plans and
specifications for the Facility as provided by Agent, as such Plans and
Specifications may be amended, modified or supplemented from time to time in
accordance with the terms of this Agreement. Plans and Specifications for the
Facility shall include a reasonably detailed description of:
(a) the Facility;
(b) the Improvements to be constructed;
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Construction Agency Agreement
(c) the materials to be utilized; and
(d) the time periods for Completion of the Facility.
"Prescribed Forms" shall mean (A) for a party that is
incorporated or otherwise formed under the laws of the United States of America
or a state thereof, one duly completed and executed copy of IRS Form W-9 (or
replacement or successor form thereto); and (B) for a party that is not
incorporated or otherwise formed under the laws of the United States of America
or a state thereof (a "Non-U.S. Person"), one duly completed and executed copy
of IRS Form W-8ECI (or replacement or successor form thereto) or IRS Form W-8BEN
(or replacement or successor form thereto); provided, however, that any Non-U.S.
Person that is not the beneficial owner of a payment, as defined in Treasury
Regulation Section 1.1441-1(c)(6), and therefore is unable to provide a Form
W-8BEN or W-8ECI, may provide one duly completed and executed copy of IRS Form
W-8IMY (in lieu of the Form W-8BEN or W-8ECI), and all additional forms or
certifications, as provided in Treasury Regulation Section 1.1441-1(e)(3),
required to be attached to such Form W-8IMY, necessary to establish that such
party is entitled to receive payments hereunder without deduction or withholding
of any United States Federal income taxes, or subject to a reduced rate thereof.
"Project Costs" shall mean, all costs, fees and expenses to be
incurred by Agent or Owner Trust to complete the Facility in the manner
contemplated by the Operative Agreements and the Financing Documents, including
(i) all costs and expenses incurred in connection with the development,
construction, acquisition and installation of the Facility and the achievement
of Completion; and (ii) all amounts in respect of Financing Costs, Owner Trust
Yield, Commitment Fees, Letter of Credit Fees, Issuing Bank Fronting Fees, Bond
Fees and other amounts payable by Agent or Owner Trust hereunder (including
capitalization, if applicable under GAAP, of the same) or under the Financing
Documents.
"Project Fund" shall mean any trust fund established or that
may be established by the Bond Trustee on a date of issuance of Bonds designated
the "Project Fund" (or a similar term) for the payment of Project Costs not paid
from the Settlement Fund.
"Property" shall mean any and all rights, title and interest
of Owner Trust, to and under the Facility, including any and all rights, title
and interest in, to and under the Land, the Improvements, and the Construction
Contracts.
"Prudent Industry Practice" shall mean at a particular time
(i) any of the practices, methods and acts engaged in or approved by a
significant portion of the wholesale electric generating industry at such time
or (ii) any of the practices, methods and acts which, in the exercise of
reasonable judgment in light of the facts known at the time the decision was
made, could have been expected to accomplish the desired result at a reasonable
cost consistent with good business practices, reliability, safety and
expedition. "Prudent Industry Practice" is not intended to be limited to the
optimum practice, method or act to the exclusion of all others, but
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Construction Agency Agreement
rather to be a spectrum of possible practices, methods or actions having due
regard for, among other things, manufacturers' warranties and the requirements
of Governmental Authorities of competent jurisdictions.
"Purchase Agreement(s)" shall mean agreements for the
acquisition of Equipment and related services for the Facility between Owner
Trust or Agent and the applicable Contractor.
"Purchase Option" shall have the meaning set forth in Section
10.1(a).
"Purchase Option Assignment" shall mean a Purchase Option
Assignment and Assumption Agreement in the form attached hereto as Exhibit H.
"Purchase Option Assignments" shall mean those Purchase Option
Assignment and Assumption Agreements pursuant to which REPG has designated Owner
Trust as the purchaser and Owner Trust has purchased from WestLB certain
Construction Contracts and all rights thereunder, including rights to certain
Equipment.
"Purchase Option Certificate" shall have the meaning set forth
in Section 10.1(a).
"Purchase Option Notice" shall have the meaning set forth in
Section 10.1(a).
"Quarterly Certificate" shall have the meaning set forth in
Section 5.1(d).
"Rating Agencies" shall mean (a) Standard & Poor's Ratings
Group, a division of XxXxxx-Xxxx Companies, Inc.; (b) Fitch, Inc.; and (c)
Xxxxx'x Investors Service, Inc., or any successor to any of such rating
agencies.
"Release" shall mean any release, pumping, pouring, emptying,
injecting, escaping, leaching, dumping, seepage, spill, leak, flow, discharge,
disposal or emission of a Hazardous Substance into the environment.
"Rema [_____________] Agreement" shall mean the license
agreement between Reliant Energy [_____________], LLC, as licensor, and Reliant
Energy Mid-Atlantic Power Holdings, LLC, as licensee, dated April 20, 2001.
"Rema [_____________] Agreement" shall mean the license
agreement between Reliant Energy [_____________], LLC, as licensor, and Reliant
Energy Mid-Atlantic Power Holdings, LLC, as licensee, dated April 20, 2001.
"Rema Agreements" shall mean, collectively, the Rema
[_____________] Agreement and the Rema [_____________] Agreement.
"Remarketing Funds" shall have the meaning set forth in
Section 11.2.
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Construction Agency Agreement
"Remarketing Requirement" shall have the meaning set forth in
Section 11.1.
"REPG" shall mean Reliant Energy Power Generation, Inc., a
Delaware corporation.
"Replacement Facility" shall have the meaning set forth in
Section 1.5 of the Credit Agreement.
"Replacement Letter of Credit" shall have the meaning set
forth in the Intercreditor Agreement.
"Required Actions" shall have the meaning set forth in Section
2.2.
"Required Modifications" shall have the meaning set forth in
Section 2.2(j).
"Responsible Officer" shall mean the chief financial officer,
the chief accounting officer, the vice president-finance, the treasurer, an
assistant treasurer, or the comptroller of Agent or any other officer of Agent
whose primary duties are similar to the duties of any of the previously listed
officers.
"S&P" shall mean Standard & Poor's Ratings Group, a division
of XxXxxx-Xxxx Companies, Inc.
"Scope of Authority" shall have the meaning set forth in
Section 2.3(a).
"Secured Parties" shall have the meaning set forth in the
Intercreditor Agreement.
"Security Agreement" shall mean the Amended and Restated
Security Agreement, dated as of the Closing Date, between Owner Trust and
Collateral Agent, for the benefit of the Secured Parties, as specified therein.
"Security Documents" shall mean, collectively, the Security
Agreement, the Lessor Mortgage, the Lease, the Memorandum of Lease, the Lessee
Mortgage, the Collateral Assignment of Lessee Mortgage, the UCC Financing
Statements, the Collateral Agreement, the Intercreditor Agreement, this
Agreement and all other documents, agreements and instruments executed and
delivered in order to establish, preserve, protect and perfect the Lien of Owner
Trust or Collateral Agent in the Collateral (as defined in the Intercreditor
Agreement) and the Deposit Account Collateral relating to the Facility.
"Seller(s)" shall mean any party to a Purchase Agreement with
Agent providing Equipment or related goods or services to Agent for the
Facility.
"Services Agreement" shall mean an agreement pursuant to which
Agent or Lessee uses reasonable commercial efforts to provide or agrees to
provide the applicable Owner
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Construction Agency Agreement
Trust and its successors and assigns interconnections and other services and
facilities necessary to the operation of the Related Facility on a commercially
viable basis and in accordance with Prudent Industry Practice all to the extent
that such services and facilities are not integrated into such Facility. Without
limiting the generality of the foregoing, to the extent practicable, Agent shall
satisfy its obligations under the Services Agreement by making such services and
facilities available through the arrangements described in Section 10.1(h)
hereof, in which case, subject to Applicable Law, there shall be no charge for
such services and facilities except for any charges that Agent would have been
required to pay had it operated the Facility. In all other cases, Owner Trust or
its successors and assigns shall pay the fair market value of such services and
facilities and such services shall otherwise be on terms as would pertain
between unaffiliated persons on an arms length basis.
"Settlement Fund" shall mean an account established by a Bond
Trustee in connection with the issuance of Bonds and designated the "Settlement
Fund" (or a similar name) for the payment of Bond Underwriting Fees in incurred
in connection with the issuance of the applicable series of Bonds.
"Shared Facilities" shall mean the stacks, sump pumps,
warehouses and other improvements located on the Land and set forth in Schedule
IV as "items not included in Existing Plant", to the Deed dated April 20, 2001
wherein Reliant Mid-Atlantic Power Holdings, LLC, conveyed title to the Land and
such improvements to the Lessee.
"Signal Peak CAA" shall mean the Construction Agency Agreement
dated as of the Closing Date among Reliant Energy Signal Peak, LLC, Signal Peak
Trust, Bank, Owner Trust Parent, the Certificate Participants, the Lender Agents
and the Lenders.
"Signal Peak Facility" shall mean the "Facility" as defined in
the Signal Peak CAA.
"Signal Peak Trust" shall mean Signal Peak Trust, a Delaware
business trust.
"Special Provision" shall mean any provision in a Transaction
Document designated as such in such Transaction Document or in this Agreement or
the Intercreditor Agreement or in an Intercreditor Accession Agreement.
"Subcontractor Agreements" shall mean any one or all of a
series of contracts between any Contractor and various subcontractors for the
Facility.
"Subject Claim" shall have the meaning set forth in the
definition of the term "Contest."
"Syndication Agent" shall mean Royal Bank of Canada as the
syndication agent for the Lenders under the Credit Agreement.
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Construction Agency Agreement
"Taxes" shall have the meaning set forth in Section 12.3(d).
"Tender Agent Agreement" shall have the meaning set forth in
the Credit Agreement.
"Term" shall have the meaning set forth in Section 2.4 of this
Agreement.
"Termination Amount" shall mean, at any time with respect to
the Property, the aggregate of the Outstanding Balance, together with any and
all reasonably anticipated expenses and costs of any nature incurred or
reasonably anticipated by Owner Trust with respect to this Agreement and the
Operative Agreements and the Financing Documents or the transactions
contemplated hereby and thereby, including cancellation or wind-up costs,
breakage costs and reasonably anticipated costs and expenses of any other Person
entitled to payment of Transaction Expenses.
"Tranche" shall mean each Loan funded as a Tranche A-1 Loan,
Tranche A-2 Loan or Tranche B Loan, as applicable.
"Tranche A Amount" shall mean the sum of the Tranche A-1
Amount and Tranche A-2 Amount.
"Tranche A-1 Amount" shall mean the sum of the Tranche A-1
Commitment plus, without duplication, any Lease Indebtedness which is designated
as a Tranche A-1 Amount in the Intercreditor Agreement or an Intercreditor
Accession Agreement; provided, however, that the aggregate amount of such Lease
Indebtedness outstanding shall at no time be greater than 85% of the Aggregate
Owner Trust Commitment; provided, further, that any proceeds of Lease
Indebtedness held in a Project Fund or similar arrangement granting a lien on
such proceeds in favor of the holders of such Lease Indebtedness until such
proceeds are expended in accordance with the terms of this Agreement shall not
be deemed to be outstanding for purposes of the preceding proviso.
"Tranche A-1 Loan" shall mean a Loan funded under the Credit
Agreement with respect to the Tranche A-1 Amount.
"Tranche A-2 Amount" shall mean the sum of the Tranche A-2
Commitment plus, without duplication, any Lease Indebtedness which is designated
as a Tranche A-2 Amount in the Intercreditor Agreement or an Intercreditor
Accession Agreement; provided, however, that the aggregate amount of such Lease
Indebtedness outstanding shall at no time be greater than 12% of the Aggregate
Owner Trust Commitment; provided, further, that any proceeds of Lease
Indebtedness held in a Project Fund or similar arrangement granting a lien on
such proceeds in favor of the holders of such Lease Indebtedness until such
proceeds are expended in accordance with the terms of this Agreement shall not
be deemed to be outstanding for purposes of the preceding proviso.
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Construction Agency Agreement
"Tranche A-2 Loan" shall mean a Loan funded under the Credit
Agreement with respect to the Tranche A-2 Amount.
"Tranche B Amount" shall mean the difference of (i) the
Aggregate Owner Trust's Commitment and (ii) the sum of: (x) the Tranche A-1
Amount, plus (y) the Tranche A-2 Amount, plus (z) the Aggregate Owner Trust's
Contribution Commitment.
"Tranche B Commitment" shall have the meaning set forth in
Section 1.5 of the Credit Agreement.
"Tranche B Lender" shall mean any Lender which has a Tranche B
Commitment or is owed a Tranche B Loan (or a portion thereof).
"Tranche B Loan" shall mean a Loan funded under the Credit
Agreement with respect to the Tranche B Amount.
"Transaction Documents" shall mean the Operative Agreements,
the Security Documents and the Financing Documents.
"Transaction Expenses" shall mean:
(a) Bond Fees, Bond Underwriting Fees, Letter of
Credit Fees, Commitment Fees, Issuing Bank Fronting Fees, and any
Financing Costs on any Payments;
(b) the reasonable out-of-pocket expenses,
disbursements or costs of the Owner Trust Parent, Master Owner Trustee,
the Owner Trust, and the Trustee incurred in connection with the
consummation of the transactions contemplated by this Agreement and the
other Operative Agreements and the Financing Documents, including any
third party consultants (e.g. accountants, engineers, insurance
consultants, etc.) and the fees and disbursements of counsel to
Collateral Agent, Administrative Agent, the Owner Trust Parent or the
Master Owner Trustee, each Owner Trust and the Owner Trustee, but
subject to the limitation set forth in agreements among the
Administrative Agent, the Certificate Participants and Agent on the
amount of such fees and disbursements of counsel and other consultants
payable for activities up to the Closing Date;
(c) any and all Taxes and fees incurred in recording
or filing this Agreement or any other Operative Agreement or the
Financing Documents, any deed, declaration, deed of trust, mortgage,
security agreement, notice or financing statement with any public
office, registry or governmental agency in connection with the
transactions contemplated by this Agreement;
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Construction Agency Agreement
(d) any real estate brokers' and/or notary public
fees and any and all stamp, transfer and other similar taxes, fees and
excises, if any, including any interest and penalties which are payable
in connection with the acquisition, construction and financing of the
Facility by Owner Trust of its interest in the Facility;
(e) all reasonable out-of-pocket costs and expenses
incurred in connection with the enforcement or preservation of any
rights under this Agreement, including the reasonable fees and
disbursements of counsel to Collateral Agent, Administrative Agent,
Deposit Bank and Owner Trust;
(f) all reasonable out-of-pocket costs and expenses
incurred in connection with any amendment, supplement, modification
assignment or termination of this Agreement and the other Operative
Agreements or the Financing Documents requested, executed or acquiesced
in by Agent and any other documents prepared in connection therewith,
and the consummation and administration of the transactions
contemplated thereby, including the reasonable fees and disbursements
of counsel to Administrative Agent and Owner Trust; and
(g) all reasonable out-of-pocket costs and expenses
incurred by Administrative Agent or Owner Trust in connection with any
purchase, lease, transporting, handling, installing, monitoring,
maintaining or otherwise dealing with the Property or the Facility or
any interest therein or sale of the Facility to Agent or any third
party pursuant to this Agreement.
For purposes of this definition, fees and expenses incurred by
the Owner Trust Parent, the Master Owner Trustee, the Collateral Agent and the
Administrative Agent shall apply to an allocable share based upon the aggregate
cost of the Facility, unless such fee or expense is directly related to a
particular Facility.
"Transfer Taxes" shall mean any present or future sales, use,
documentary, value added, goods and services, recording, stamp, license,
transfer, transfer gains, publication filings, or any other Taxes in the nature
of the foregoing.
"Trust Agreement" shall mean the Second Amended and Restated
Trust Agreement, dated as of November [ ], 2001, among Owner Trust Parent, as
Certificate Participant, Bank, as Owner Trustee, and Administrative Agent.
"Trustee" shall mean First Union Trust Company, National
Association, not in its individual capacity, but solely as Owner Trustee under
the Trust Agreement or Master Owner Trustee under the Master Trust Agreement,
and any successor or replacement Trustee expressly permitted by the Operative
Agreements.
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Construction Agency Agreement
"Trust Estate" shall mean the Property and all other property
held by the Trust from time to time, including any rights of the Owner Trustee
and the Trust under the Transaction Documents.
"Turbines" shall mean the to-be-built turbine identified in
the Construction Contracts, including the Initial Turbine and any contract
rights relating to such turbine under such Construction Contracts, and any other
Turbine that from time to time constitutes a part of the Facility.
"UCC Financing Statements" shall mean collectively the Lender
Financing Statements and the Owner Trust Financing Statements.
"Uncollateralized Amount" shall mean (i) the amount due to all
Lenders, Participants and other Secured Parties (other than the Tranche B
Lenders) whose Secured Obligations are subject to Deposit Account Collateral
until the Cash Collateral Date or, in the case of Lease Indebtedness not
incurred under the Credit Agreement, such other date when cash collateral must
be posted under the applicable Financing Document and (ii) thereafter, zero.
"Uniform Commercial Code" and "UCC" shall mean the Uniform
Commercial Code as in effect in any applicable jurisdiction.
"Upstream Purchase" shall have the meaning set forth in
Section 10.1(a).
"Value" shall mean, with respect to the Facility, the amount,
which in any event shall not be less than zero, that would be paid in cash in an
arm's-length transaction between an informed and willing purchaser and an
informed and willing seller, neither of whom is under any compulsion to purchase
or sell, respectively, for the ownership of the Facility.
"WestLB" shall mean Westdeutsche Landesbank Girozentrale,
New
York Branch.
1.5 Amendment and Restatement. (a) This Agreement amends and
restates in its entirety the Original Agreement and, upon effectiveness of this
Agreement, the terms and provisions of the Original Agreement shall, subject to
Sections 1.5(b) and (c), be superseded hereby.
(b) Notwithstanding the amendment and restatement of the
Original Agreement by this Agreement, Agent shall continue to be liable to Owner
Trust with respect to agreements on the part of Agent under the Original
Agreement to indemnify and hold Owner Trust harmless pursuant to Article XII of
the Original Agreement for matters within the scope of such indemnification
provisions that arose during the period that such agreement was in effect.
(c) Notwithstanding the amendment and restatement of the
Original Agreement by this Agreement, the indebtedness, liabilities and
obligations owing to Owner Trust by Agent under the Original Agreement remain
outstanding as of the date hereof, constitute
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Construction Agency Agreement
continuing Payments hereunder and shall continue to be secured by the collateral
described in and pursuant to Section 15.1 but are payable in accordance with the
terms of this Agreement. This Agreement is given in substitution for the
Original Agreement, and does not evidence a repayment and reborrowing of the
obligations of Agent under such agreement, and is in no way intended to
constitute a novation of the Original Agreement, and the Liens granted with
respect thereto shall be continuing.
(d) The parties hereto acknowledge and agree that any
waivers, express or implied by course of conduct or otherwise, amendments or
other actions (or failures to act) under the Original Agreement and the other
Operative Agreements shall be of no force or effect, and of no use in
interpreting the rights and duties of the parties under this Agreement.
ARTICLE II
APPOINTMENT OF AGENT
2.1 Appointment and Acceptance. (a) Subject to the terms and
conditions hereof, Owner Trust hereby designates and appoints Agent as its sole
and exclusive agent in connection with the Required Actions; provided, that
Agent may delegate responsibility for performing certain or all of its Required
Actions to any other Person qualified, and, to the extent required, duly
licensed by appropriate Governmental Authorities, to perform such Required
Actions, but any such delegation shall not relieve Agent of its obligations to
perform such Required Actions. Agent hereby accepts such appointment.
(b) Agent is expressly authorized to negotiate and enter
into, as agent for and on behalf of Owner Trust, an EPC Contract with the EPC
Contractor (which shall have the right to enter into Subcontractor Agreements),
and such other Construction Contracts as the Agent shall deem necessary or
desirable in connection with the transaction contemplated hereby, in each case
in order to Complete the Facility on or before the Maturity Date in all material
respects in accordance with the Plans and Specifications therefor, Applicable
Law and in amounts not to exceed the amounts therefor set forth in the Budget
with respect thereto.
(c) Agent shall cause the Sellers, EPC Contractor and
subcontractors to Complete the Facility in all material respects in accordance
with the Plans and Specifications therefor, the EPC Contract (including all
Subcontractor Agreements) and Applicable Law and at costs not to exceed the
amounts therefor set forth in the Budget with respect thereto. The EPC Contract
and the applicable Subcontractor Agreements for the Facility shall be treated as
one single turnkey agreement under the single point responsibility of the EPC
Contractor.
2.2 Agent's Required Actions. Agent hereby unconditionally
covenants that it shall take all actions necessary or desirable for the
Completion of the Facility on or before the Maturity Date pursuant to the Plans
and Specifications therefor and Applicable Law and in
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Construction Agency Agreement
accordance with the Budget (subject to reimbursement by the Owner Trust), the
Construction Contracts, and the highest standards prevalent in the independent
power generation industry which are reasonable under the circumstances,
including the following services and actions (collectively, the "Required
Actions"):
(a) take all actions or conduct all due diligence, as
applicable (including using highest grade materials and services which
are reasonable under the circumstances for the Facility, constructing
the Facility in accordance with Prudent Industry Practice and in no
event less favorable to the Facility than was or is being applied to
other facilities owned and maintained by or under construction for
Agent or any of its Affiliates and, taking into consideration Owner
Trust's debt financing and standards normally applied, expected or
required by lenders in financing transactions for development and
operation of facilities of a similar type to the Facility, and the
nature of the transaction given the intent of Owner Trust, Agent and
the Secured Parties as set forth in Section 15.1) with regard to Owner
Trust's ownership interest in the Facility or contractual obligations
and rights under the Construction Contracts and otherwise with respect
to the Facility, including any regulatory, tax or legal impact of such
ownership or contractual obligation or right, any foreseeable material
diminution in the Value of the Facility (by reason of environmental or
other regulatory or technological change), the ability of Agent or the
Contractors to Complete the Facility, and any other such application of
Agent's expertise in the independent power generation industry, that
may mitigate the cost or risk to Owner Trust of the Facility;
(b) take all actions or omit to take any actions which
ensure that all material licenses, approvals, entitlements,
authorizations, consents, and permits, and amendments thereto including
those required by Applicable Law and Governmental Authority, will be
obtained with respect to the Facility and the Property and that the
Property is free of all Liens other than Permitted Liens and that all
Liens required to be perfected in favor of the Collateral Agent for the
benefit of the Participants be perfected as first priority liens, with
only such exceptions as may be permitted hereunder or under the other
Operative Agreements in accordance with the terms thereof;
(c) use Advance Payments or direct Owner Trust to make
Direct Payments for the Completion of the Facility in accordance with
the Budget and in timely manner to ensure that all payments under the
Construction Contracts are paid when due, or to make other Payments in
accordance with the Budget, including Transaction Expenses, but for no
other purposes whatsoever (except as may be specifically agreed by
Owner Trust and Administrative Agent in writing); and in the event that
the Tranche B Lenders do not consent to the amendment of the
Intercreditor Agreement referred to in Section 5.1(e) hereof, arrange
for a refinancing of the Tranche B Commitments to be consummated not
more than thirty (30) days after Agent is informed of the withholding
of such consent whereby after giving effect thereto and to any other
refinancing then consummated, Payments funded from the Tranche A-2
Amount plus the Investments (as
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Construction Agency Agreement
Defined in the Master Trust Agreement) shall be no less than 15% of the
Outstanding Balance;
(d) take all actions and not omit to take actions which
cause (to the extent it may legally do so) Owner Trust to be in
compliance at all times with the terms and provisions of the Operative
Agreements, the Budget, the Construction Contracts, Applicable Laws and
Insurance Requirements with respect to the Property and the Facility
and give Owner Trust prompt written notice of changes in Applicable
Laws affecting Owner Trust's ownership of the Facility or the
fulfillment of the obligations hereunder or under the Construction
Contracts;
(e) give prompt written notice to Owner Trust and
Administrative Agent of the occurrence of any Agent Default or Agent
Event of Default or any Owner Trust Termination Event after obtaining
actual knowledge thereof;
(f) not take any action which will result in the Value of
the Facility being less than the aggregate amount of all Payments made
by Owner Trust hereunder with respect to the Facility; provided,
however, that this subsection (f) shall not be construed as a guaranty
of the residual value of the Facility;
(g) not take any action or omit to take any action which
could result in any Claim or Imposition against Owner Trust or the
Property under the terms of the Construction Contracts or in connection
with the Facility other than Permitted Liens;
(h) upon the request of Owner Trust, represent Owner Trust
or cooperate with Owner Trust in bringing or defending any Claims or
seeking resolution of any disputes to the same extent as Agent and its
Affiliates would pursue with respect to a similar facility owned or
leased by it and based on prevailing industry practice, whether through
arbitration or other proceeding pursuant to or in connection with any
Construction Contracts; provided, that any fees and expenses incurred
by Agent in connection therewith and resulting from the acts or
failures to act of Agent shall be reimbursed by Owner Trust as part of
the Aggregate Owner Trust's Commitment;
(i) give Owner Trust and Administrative Agent prompt and
full written notice, with such detail and background as Owner Trust or
Administrative Agent may reasonably require, upon Agent obtaining any
knowledge or notice of any Force Majeure Event which could have a
Material Adverse Effect or which could reasonably be expected to result
in a failure to Complete the Facility by the Outside Completion Date,
delay in performance, change in law, breach by Agent or a Contractor,
suspension of work or other event or occurrence which could give rise
to an increase in any payments due or to become due under any
Construction Contracts;
37
(j) make alterations, renovations, improvements and
additions to the Facility or any part thereof (subject to Agent's right
to reimbursement from Owner Trust as provided herein) that are required
to be made pursuant to any Applicable Law and Insurance Requirements
("Required Modifications");
(k) without duplication of any actions required under
clause (d) above, take all actions to arrange for the appropriate
insurance coverage required pursuant to the Insurance Requirements;
(l) take all actions and conduct due diligence to ensure,
to the extent possible under Applicable Laws, that the transactions
contemplated by this Agreement and the Required Actions result in no
more Taxes to the Indemnified Persons and Secured Parties than if the
transactions contemplated by the Operative Agreements created a loan
directly between Agent and the Secured Parties (including not
permitting the transfer of any Equipment that is the subject of the
Operative Agreements from one location to another if such action would
result in the imposition of any Taxes that are not provided for in the
Budget); and
(m) take all actions necessary to cause title to all
Equipment and other Improvements and all contract rights with respect
thereto under the applicable Purchase Agreements to be transferred to
Owner Trust.
2.3 Scope of Authority. (a) Owner Trust hereby grants to Agent
the authority (the "Scope of Authority") to take directly on behalf of Owner
Trust all Required Actions in order to Complete the Facility; provided, that
Agent's Scope of Authority shall not include:
(i) any action for or on behalf of Owner Trust other than
the Required Actions;
(ii) except as provided in Section 2.1, entering into any
Construction Contracts or other agreement, as agent of Owner Trust,
without the written consent of Owner Trust;
(iii) making any expenditure or binding Owner Trust in any
way not contemplated by the Budget, except for Permitted Modifications,
including Required Modifications; and
(iv) except for Permitted Modifications, submitting or
approving any change order or suspension of work or taking or failing
to take any other action, which has the effect of, or would result in
or have the effect of creating any obligation of Owner Trust to any
Contractor unless included in the Budget or to any other Person under
or with respect to any Construction Contracts without the written
consent of Owner Trust.
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Construction Agency Agreement
(b) In connection with the performance by Agent of the
Required Actions within the Scope of Authority, Agent acknowledges and agrees
(i) that, as between Owner Trust and Agent, the Property is in Agent's control
and possession during the Term, (ii) that it is responsible as agent for Owner
Trust for the acts and omissions of itself, the Contractors and their respective
agents, and (iii) that Agent has agreed to take all actions and not omit to take
any actions necessary to maintain, or cause to be maintained, the Property so as
to avoid injury or mishap to third Persons. Further, Agent acknowledges and
agrees that in accordance with the terms thereof or the provisions of Section
2.2 or this Section 2.3, all responsibilities and actions to be taken by Owner
Trust under the Construction Contracts have been delegated to, and assumed by,
Agent, subject to Agent's right of reimbursement from Owner Trust pursuant to
the Budget, and are within Agent's control.
(c) Subject to the terms and conditions of this Agreement,
as between Owner Trust and Agent, Agent shall have sole management and control
over the construction means, methods, sequences and procedures with respect to
the construction of the Facility.
2.4 Term. Subject to Article VIII and Section 12.9, this
Agreement shall commence on the Closing Date and shall terminate upon the CAA
Termination Date (the "Term").
2.5 Guaranty. The obligations of Agent pursuant to this
Agreement shall be guaranteed by Guarantor pursuant to the Guaranty in
accordance with its terms. Agent shall deliver the Guaranty on the date hereof,
and the Guaranty shall be maintained in full force and effect at all times
thereafter during the Term, which Guaranty shall be pledged and assigned by
Owner Trust to the Collateral Agent, for the benefit of the Secured Parties.
ARTICLE III
BUDGET
3.1 Preparation of Budget. With respect to the Facility, on
the Closing Date, the Agent shall submit a Budget substantially in the form
attached hereto as Exhibit A, which shall specify the anticipated Completion
Date for the Facility, (x) set forth in Part A, Agent's calculation of the
anticipated Payments to be made by Owner Trust in connection with the Completion
of the Facility pursuant to the Plans and Specifications therefor, and (y) set
forth in Part B, Agent's calculation of the Non-Budget Amounts in accordance
with Section 3.4. Part A of the Budget shall include the following:
(a) The aggregate of scheduled Advance Payments to Agent
and Direct Payments to be made to the Contractors and other third
parties or reimbursements to Agent or its Affiliates in accordance with
specified schedules or schedules to be specified under the Construction
Contracts during the Construction Period (including
39
Construction Agency Agreement
estimates for change orders, modifications and for the inclusion of
additional Subcontractor Agreements and Purchase Agreements);
(b) Other scheduled or anticipated payments in connection
with (but not directly arising from) the Project and/or the
Construction Contracts, such as Taxes, and franchise fees, customs,
duties and related charges, and Transaction Expenses, change orders and
contractual cost escalators and costs and expenses related to hedging
agreements;
(c) A specific amount for contingent payments by Owner
Trust including, among other things, for payments to third parties for
indemnification payments, additional Taxes directly attributed to
activities of Owner Trust unrelated to the Facility and the other
transactions contemplated by the Operative Agreements or the Financing
Documents, Construction Period penalties, cancellation or other wind-up
expenses, change orders, contractual cost escalators, or other
additional costs Owner Trust may bear as the result of Agent's acts or
failures to act within the Scope of Authority and Required Actions;
(d) An amount for the expected premiums and other costs
associated with insurance that Agent will arrange on Owner Trust's
behalf pursuant to Article VI;
(e) An Allowance for Owner Trust's Cost of Financing (but
excluding any imputed equity yield to Owner Trust or other party);
(f) An amount for reimbursement to Agent for soft costs;
and
(g) an amount to refinance all costs financed under the
Original Agreement.
3.2 Accuracy of Budget. Based upon Agent's experience in the
power generating industry, Agent has concluded, taking into account the
circumstances in existence on the date the Budget was prepared, that the
aggregate amount set forth in the Budget will be sufficient to satisfy all
obligations, including payment obligations, of Owner Trust to successfully
Complete the Facility, and Owner Trust and Secured Parties are relying on such
conclusion of Agent.
3.3 Budget Revisions. Agent may from time to time present to
Owner Trust a revised Budget which changes the Aggregate Owner Trust's
Commitment, and the corresponding Aggregate Lenders' Commitment and Aggregate
Owner Trust's Contribution Commitment, and/or reallocates the dollar amounts of
the line items set forth in any previous Budget; provided, that (a) in no event
shall the combined Aggregate Owner Trust's Commitments for the Facility and the
other projects under the Other CAAs be increased thereby without Owner Trust's
and Administrative Agent's written consent or the combined Aggregate Lender's
Commitments for
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Construction Agency Agreement
the Facility and the other projects under the Other CAAs be increased thereby
without the written consent of each holder of Lease Indebtedness, (b) in no
event, as a result of any such reallocation, shall the Lease Indebtedness
designated as the Tranche A-1 Amount be outstanding at any time in an amount
greater than 85% of estimated Project Costs; provided, further, that any
proceeds of Lease Indebtedness held in a Project Fund or similar arrangement
granting a lien on such proceeds in favor of the holders of such Lease
Indebtedness until such proceeds are expended in accordance with the terms of
this Agreement shall not be deemed to be outstanding for purposes of the
preceding proviso, and (c) in the event any revision in the Budget would cause
it to exceed 105% of the amount of the Aggregate Owner Trust's Commitment as of
the Closing Date, such revision shall require the approval of 100% of the Bank
Lenders (as defined in the Intercreditor Agreement). Each such revised Budget
submitted by Agent that complies with the proviso to the preceding sentence
shall be deemed automatically to amend the previous Budget without any further
action by Owner Trust or Agent. Each revised Budget shall be accompanied by
Agent's certification that the revised Budget is sufficient, taking into account
the circumstances in existence on the date the Budget was prepared, to Complete
the Facility.
3.4 Non-Budget Amount. Part B of the Budget submitted by Agent
will also set forth a schedule of estimated amounts agreed to by Agent and Owner
Trust which may be paid by Owner Trust in connection with the Construction
Contracts or the Facility but are outside Part A of the Budget (such estimated
amounts plus any additional amounts actually paid by Owner Trust in connection
with the Construction Contracts or the Facility, collectively, the "Non-Budget
Amounts"). If Owner Trust does not fund or finance such amounts under the
Non-Budget Amounts, Agent may elect to have Owner Trust fund or finance such
costs (excluding those Transaction Expenses described in clause (a) below) under
Part A of the Budget. The Non-Budget Amounts shall include the following:
(a) Transaction Expenses which are not capitalized in
accordance with GAAP, including Owner Trust's fees;
(b) Owner Trust Yield;
(c) An estimated amount for contingent payments to third
parties other than lenders for indemnification payments, additional
taxes, penalties, cancellation or other wind-up expenses, change
orders, contractual cost escalations or other additional costs that
Owner Trust may bear that either (i) are not as the result of Agent's
act or failure to act within its Scope of Authority and Required
Actions, or (ii) would not give rise to an obligation of Agent to Owner
Trust in accordance with Article VIII, Article X or Article XI; and
(d) Agent shall, at no time, be permitted to revise Part B
of the original Budget delivered on the Closing Date without the
written consent of all Lenders (as defined in the Credit Agreement);
provided, any increase in Part B of such original
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Construction Agency Agreement
Budget which results in a cumulative increase of said Part B of less
than or equal to 200% shall be permitted.
ARTICLE IV
CONSTRUCTION OF FACILITY
4.1 Construction. Subject to the Operative Agreements, Agent
shall cause the Facility to be constructed and equipped in material compliance
with all requirements of the Plans and Specifications, the applicable
Construction Contracts, Applicable Law and Insurance Requirements.
4.2 Amendments; Modifications. (a) Agent may at any time
revise, amend or modify the Plans and Specifications or the Facility without the
consent of Owner Trust and Administrative Agent; provided, that any such
revisions, amendments or modifications do not (i) result in the Completion Date
of the Facility occurring on or after the Maturity Date, or (ii) result in the
projected Project Cost of the Facility to be funded by the Budget exceeding the
then Available Aggregate Owner Trust's Commitment, or (iii) materially change
the Facility's Intended Use, or (iv) reduce the Value of the Property below that
set forth in the appraisal referenced in Section 7.5(f), or (v) results in a
breach of Agent's obligations under Section 2.2(k) or Section 6.
(b) Agent agrees that it will not implement any revision,
amendment or modification to the Facility or Plans and Specifications for the
Facility if the aggregate effect of such revision, amendment or modification
together with any prior amendments, revisions or modifications would be to
reduce the Value of the Facility as Completed as projected on the Closing Date,
unless such revision, amendment or modification is a Required Modification or
otherwise approved by Owner Trust and Administrative Agent, each such consent to
be granted or withheld in such party's sole discretion.
4.3 Casualty, Condemnation, Force Majeure Events and
Liquidated Damages. If at any time prior to the Completion Date for the Facility
there occurs a Casualty or a Force Majeure Event with respect to the Facility,
or Owner Trust or Agent receives notice of a Condemnation, then, in each case,
Agent shall continue to perform the Required Actions in accordance with Sections
2.2 and 2.3, subject to reimbursement from Owner Trust pursuant to the Budget
and from Net Available Proceeds pursuant to Section 6.3.
4.4 Completion Date Conditions. The occurrence of the
Completion Date with respect to the Facility shall be evidenced by the delivery
to the Administrative Agent, the Certificate of Completion by the Agent in the
form of Exhibit B as attached hereto; provided, that any such Certificate of
Completion shall be with reservation of any and all rights relating to
Completion of the Facility against the EPC Contractor or other Persons in
connection with the
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Construction Agency Agreement
construction and mobilization of the Facility and is not intended to preclude
the assertion of any such rights against the EPC Contractor or such other
Persons.
ARTICLE V
ADVANCES AND DIRECT PAYMENTS; LETTERS OF CREDIT; AGENT'S DEPOSIT
ACCOUNT COLLATERAL
5.1 Payments Pursuant to Budget. (a) Agent may, from time to
time, deliver to Owner Trust and to Administrative Agent payment
directions/borrowing notices or letter of credit issuance directions (a "Payment
Direction/Borrowing Notice") in substantially the form attached hereto as
Exhibit C or other form acceptable to the other applicable Secured Parties for
the purpose of requesting Debt Fundings, or procuring Letters of Credit from
Issuing Bank to secure Bonds issued under the Bond Trust Indenture, the proceeds
of which will be used to make Payments hereunder to refinance or pay Project
Costs that are contemplated by the Budget. The Payment Direction/Borrowing
Notice shall be delivered to the Owner Trust and to the Administrative Agent or
other representative of the applicable holder of Lease Indebtedness, as the case
may be, on or before the time specified in the applicable Financing Documents
for the delivery of such Payment Direction/Borrowing Notice. Advance Payments
shall be made either to the payee or to Agent's bank account in the United
States as set forth on Schedule I hereto, or to such other bank account of Agent
as Agent shall designate in writing to Owner Trust and Administrative Agent.
Agent in turn will be responsible for disbursing Advance Payments to itself or
other Persons. In no event shall there be more than two (2) funding dates during
any calendar month (exclusive of fundings (or deemed fundings pursuant to
Section 5.4) to pay interest on the Lease Indebtedness, Owner Trust Yield,
Additional Costs or the fees described in Section 5.3). In no event shall the
aggregate amount of Payments (including any thereof funded with disbursements
from the Project Fund) outstanding at any time exceed the Aggregate Owner
Trust's Commitment. Each Payment Direction/Borrowing Notice shall request
Payments in an aggregate amount of not less than $5,000,000.
(b) During the term of this Agreement, subject to Section
5.2, Owner Trust may make Direct Payments for the purposes set forth in Section
3.1(c) and (e) or Section 3.4 without the receipt of a Payment
Direction/Borrowing Notice; provided, that Owner Trust agrees to provide to
Agent and either Administrative Agent or the applicable representative of the
holders of other Lease Indebtedness at least five (5) Business Days prior
written notice of any such Direct Payments. This notice will include a summary
of the nature of the Payment, including a statement as to whether the amount is
to be paid in connection with Section 3.1(c) or (e) or Section 3.4.
(c) Subject to Section 7.6, Owner Trust agrees to make
such Payments and cause Letters of Credit to be issued by Issuing Bank in
accordance with each duly completed
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Construction Agency Agreement
and submitted Payment Direction/Borrowing Notice, cause the applicable Bond
Trustee, on behalf of the applicable Issuer, to make disbursements from the
applicable Project Fund to fund Advance Payments or Direct Payments in
accordance with each duly completed and submitted Disbursement Request and make
Direct Payments, subject to a maximum aggregate limitation equal to the
Aggregate Owner Trust's Commitment. Owner Trust will directly arrange or provide
financing for the Aggregate Owner Trust's Commitment pursuant to the Credit
Agreement, the Bond Documents and, if applicable, the other Financing Documents.
Payments shall be funded by Owner Trust at the direction of Agent from Owner
Trust Contributions and the Tranche A-1 Amount and the Tranche A-2 Amount in the
following proportions: in order that after giving effect to any funding of
Payments from the Tranche A-1 Amount, the aggregate amount of outstanding
Payments funded from the Tranche A-2 Amount and Owner Trust Contributions shall
be at least 12% and 3%, respectively, of all Payments outstanding at such time
and for this purpose shall exclude any Tranche B Amount; provided, that any
draws under Letters of Credit shall be funded entirely by the Letter of Credit
Participants from the Letter of Credit Commitments as set forth in the Credit
Agreement. When the Tranche A Amount is not available for funding, Payments
shall be funded with any unused aggregate Owner Trust's Contribution Commitment.
When the Tranche A Amount and Aggregate Owner Trust's Contribution Commitment
have been exhausted, Payments shall be funded from the Tranche B Amount, such
Tranche B Amount being subject to the requirements of Section 5.1(e) below.
Notwithstanding the foregoing, if, after the Tranche A Amount under this
Agreement has been exhausted and any portion of the Tranche A Amount under any
Other CAA has not been exhausted, Agent under this Agreement and the agents
under any or all of the Other CAAs may agree to (i) increase the Tranche A-1
Amount and the Tranche A-2 Amount (in the proportions of 87.6% and 12.4%,
respectively) under this Agreement and (ii) decrease the aggregate Tranche A-1
Amount and the Tranche A-2 Amount (in the same relative proportions) under any
or all of the Other CAAs by the same aggregate amount. If the Tranche A Amount
under this Agreement is increased, the Tranche B Amount under this Agreement
shall be decreased in a like amount. If the Tranche A Amount under an Other CAA
is decreased, the Tranche B Amount under such Other CAA shall be increased by a
like amount. By way of illustration of the three previous sentences, if the
Tranche A Amount under this Agreement has been exhausted, but at least
$10,000,000 of the Tranche A Amount under the [_____________] CAA has yet to be
advanced, Agent under this Agreement and the agent under the [_____________] CAA
may agree to (w) increase the Tranche A Amount under this Agreement by
$10,000,000, (x) decrease the Tranche A Amount under the [_____________] CAA by
$10,000,000, and thereby (y) decrease the Tranche B Amount under this Agreement
by $10,000,000 and (z) increase the Tranche B Amount under the [_____________]
CAA by $10,000,000.
(d) Not later than the last Business Day of each quarter
in which a Payment Direction/Borrowing Notice has not been submitted, Agent
shall submit to Owner Trust a quarterly certificate in the form attached hereto
as Exhibit D (a "Quarterly Certificate"); provided, that notwithstanding the
inability of Agent to deliver any such Quarterly Certificate, Agent shall be
entitled to reimbursement from Owner Trust pursuant to the Budget for any costs
44
Construction Agency Agreement
or expenditures incurred by Agent prior to the date on which Agent fails to
deliver the Quarterly Certificate. Agent agrees that it will not incur any costs
or expenditures for which it would be entitled to reimbursement hereunder if at
the time of the proposed incurrence any of its Responsible Officers has Actual
Knowledge of any facts or circumstances that render Agent unable to make the
representations and other statements required to be made in the Quarterly
Certificate.
(e) Prior to 11:00 a.m., New York time, (i) prior to the
Cash Collateral Date, on the date of each requested Advance Payment and as a
condition to such Advance Payment, and upon receipt of notice from Owner Trust
of any Direct Payments to be made by Owner Trust, if such Payment is to be
funded from the Tranche B Amount and (ii) on the Cash Collateral Date and on
each date thereafter when there is an increase in the Outstanding Balance, Agent
shall make a deposit of Deposit Account Collateral with the Deposit Bank in an
amount sufficient to cause the aggregate Deposit Account Collateral on deposit
with the Deposit Bank to be not less than the Minimum Collateral Value as of
such date (such Deposit Account Collateral shall be marked to market by the
Agent upon request, but in no event less than monthly). Such deposits shall be
held and administered in accordance with a Collateral Agreement. Any change in
the composition of the Deposit Account Collateral from U.S. government
securities of a tenor less than ninety (90) days will require the consent of all
applicable Secured Parties. Prior to, and as a condition to, the initial funding
of any Advance Payment constituting a Tranche B Loan, the Intercreditor
Agreement shall be amended and restated in a manner reasonably satisfactory to
the Tranche A-1 Lenders, the Tranche B Lenders (each defined in the Credit
Agreement), Agent and [_____________] Trust, [_____________] Trust, Signal Peak
Trust, [_____________] County Trust, Citicorp USA, Inc. and certain other
authorized representatives.
(f) Amounts utilized to pay down any revolving Lease
Indebtedness under the other Financing Documents to the Secured Parties as
provided in Section 8 of the Intercreditor Agreement in connection with the
receipt of Net Available Proceeds shall, subject to Section 6.3 (d) or (e),
continue to be available to finance the construction, reconstruction, repair or
restoration of the Facility pursuant to Article VI.
(g) In connection with the Completion of the Facility,
Owner Trust may request an Advance Payment, and notwithstanding any other
provisions herein to the contrary, may make repayment on the Loans or Owner
Trust Contributions, in amounts such that, after giving effect thereto, the sum
of the outstanding amounts funded under the Tranche A-1 Amount shall be not more
than 85% of the Final Project Costs less the amount of the Final Project Costs
funded with Tranche B Loans and the Owner Trust Contributions shall be at least
3% of the Final Project Costs. Notwithstanding any other provisions herein to
the contrary, the amount of the Owner Trust Contributions for the Facility shall
equal not less than 3% of the Final Project Costs therefrom.
5.2 Financing Costs and Owner Trust Yield. Agent shall pay to
Owner Trust, solely from funds advanced by Owner Trust, interest due on the
drawn amount of Payments
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Construction Agency Agreement
funded with Lease Indebtedness (including reimbursement obligations in respect
of drawings under a Letter of Credit to pay interest on the Bond Balances)
(collectively, "Financing Costs"), and Agent shall pay to Owner Trust, solely
from funds advanced by Owner Trust (and unless directed otherwise by Agent,
derived from Owner Trust Contributions), yield on the drawn amount of Payments
funded with Owner Trust Contributions ("Owner Trust Yield") until the CAA
Termination Date at the rate per annum specified in or determined in accordance
with the terms of the applicable Financing Documents and, in the case of Owner
Trust Yield (unless directed otherwise), by capitalizing such amount in
accordance with Section 5.4 without actual payment as provided in such section.
5.3 Fees. (a) During the Term, Agent shall pay to Owner Trust,
solely from funds advanced by Owner Trust, any commitment and other similar fees
payable under the Financing Documents and any other fees in connection with any
other Lease Indebtedness and the undrawn Owners' Contribution Commitments to the
extent provided in the applicable Financing Documents (the "Commitment Fee").
Each Commitment Fee shall be calculated and be payable on the dates and in the
manner set forth in the applicable Financing Documents.
(b) During the Term, as hereinafter provided, Agent shall,
to the extent provided in the applicable Financing Document, pay to Owner Trust,
solely from funds advanced by Owner Trust, (i) a Letter of Credit fee on each
Letter of Credit issued by the Issuing Bank (the "Letter of Credit Fee"), and
(ii) for the account of the Issuing Bank, a fronting fee with respect to each
Letter of Credit issued by such Issuing Bank (the "Issuing Bank Fronting Fee").
Each Letter of Credit Fee and Issuing Bank Fronting Fee shall be calculated and
be payable on the dates and in the manner set forth in the applicable Financing
Documents.
(c) During the Term, Agent shall pay to Owner Trust,
solely from funds advanced by Owner Trust, the Bond Fees and any other fees and
expenses computed in the manner, and payable at such times as are, set forth in
the Bond Documents and the Financing Documents as applicable.
5.4 Deemed Funding Requests. Notwithstanding anything herein
to the contrary, unless otherwise requested by Agent by delivery of a Payment
Direction/Borrowing Notice to Owner Trust and Administrative Agent or a
Disbursement Request at least three (3) Business Days prior to each Payment Date
or Fee Payment Date, as applicable, Agent shall be deemed to have requested a
Payment in an amount equal to the aggregate amount of accrued and theretofore
unpaid indemnity payments described in the parenthetical to the first sentence
of Section 12.1, 12.3(c) or the last sentence of Section 13.9, Financing Costs,
Owner Trust Yield, Commitment Fees, Letter of Credit Fees, Issuing Bank Fronting
Fees, Bond Fees and other like fees payable pursuant to any other Financing
Document (to the extent applicable) and such amount shall be due and payable on
the applicable Payment Date or Fee Payment Date, as applicable, which amount, to
the extent appropriate, but in any event in the case of Owner Trust Yield, shall
not be paid to the applicable payee, but instead such amount shall be
capitalized as of the date set forth above as part of the Funded Budget Amount
(or, with respect to the Owner
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Construction Agency Agreement
Trust Yield, the Funded Non-Budget Amount) by deeming such amount to be an
Advance Payment hereunder charged to the applicable Commitments.
5.5 Payments to Collateral Agent and Authorized
Representatives. (a) Notwithstanding the terms of the Operative Agreements or
the Financing Documents, any payment required to be made pursuant to any
Operative Agreement or Financing Document by the Agent to Owner Trust, or by
Owner Trust to any Participant out of amounts paid by Agent to Owner Trust,
shall be made directly, to or at the direction of the Collateral Agent to the
extent that the disposition of such Payment is governed by the Intercreditor
Agreement, and otherwise to or as directed by the Authorized Representative of
the Participants entitled to the benefit of such Payment (which direction may
change from time to time), for application in accordance with the terms of the
Operative Agreements or Financing Documents on behalf of the applicable
payee(s).
(b) (i) All payments made by Agent to or at the direction
of or on behalf of the Collateral Agent or any such Authorized Representative in
accordance with this Section 5.5 shall be deemed to have been applied by the
Collateral Agent or such Authorized Representative to the purposes for which
such payments were made in accordance with the terms of the Financing Documents
and (ii) upon delivery of good funds to the Collateral Agent or such Authorized
Representative in any such case, Agent's and Owner Trust's payment obligations
in the particular instance shall be deemed satisfied to the extent of the funds
so furnished. All amounts payable to or at the direction of the Collateral Agent
or such Authorized Representative hereunder shall be paid in U.S. Dollars and in
immediately available funds by 1:00 p.m. (New York City time) on the date when
due, unless any such date is not a Business Day, in which case payment shall be
due and payable on the next succeeding Business Day (or, as required by the
definition of Interest Period, the next preceding Business Day), at the
Collateral Agent's address as set forth in Schedule I hereto, or at such other
address or to such other Person as the Collateral Agent, from time to time, may
designate to Agent by written instructions.
ARTICLE VI
INSURANCE; CASUALTY AND CONDEMNATION
6.1 Coverage. (a) Agent shall arrange for and procure, on
behalf of Owner Trust, and thereafter maintain, all appropriate and
comprehensive public liability, hazard and other "all risk" insurance, with
reputable insurers, of the kinds and in the amounts as set forth in Exhibit F
attached hereto. The cost of such insurance will be paid by Owner Trust in
accordance with the applicable Budget. On or before the Closing Date, Agent
shall deliver to Owner Trust and Administrative Agent certificates of insurance
evidencing the existence of such insurance coverage and naming Collateral Agent,
Certificate Participants, Administrative Agent and Lenders (and Secured Parties
as required by the applicable Financing Documents) as additional insureds.
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Construction Agency Agreement
(b) During the Construction Period of a Replacement
Facility subject to earthquake or flood risk, the Agent agrees to acquire
earthquake and/or flood insurance to the extent such insurance is available on a
commercially reasonable basis.
6.2 Adjustment of Losses. Losses, if any, with respect to the
Facility under any property damage policies required to be carried under Section
6.1 shall be adjusted with the insurance companies, including the filing of
appropriate proceedings by Agent if Agent is required by this Agreement to, or
has agreed to, repair the damage to the Property, unless an Agent Event of
Default or Owner Trust Termination Event shall have occurred and be continuing,
in which case losses shall be adjusted by Collateral Agent as assignee of Owner
Trust. Losses shall be adjusted by Collateral Agent as assignee of Owner Trust
in circumstances where Agent is not required to, and has not agreed to, repair
the damage to the Property, unless Agent has purchased the Property pursuant to
the terms of this Agreement.
6.3 Casualty; Condemnation; Application of Net Available
Proceeds. (a) Subject to Section 6.3(c), the Agent hereby irrevocably assigns to
Collateral Agent as assignee of Owner Trust any award or compensation or
insurance payment or other proceeds (including proceeds of insurance policies
described in Article VI) to which Agent may become entitled by reason of its
interest in the Property or any portion thereof in case of a Casualty or
Condemnation giving rise to such proceeds or other amounts.
(b) The Agent shall, promptly upon a Responsible Officer
obtaining Actual Knowledge thereof, notify the Owner Trust in writing (i) of the
occurrence of any such Casualty or Condemnation when the costs of repair or
restoration of the Facility are expected to exceed $10,000,000 ($2,000,000 if
such event is caused by a Hazardous Condition or a Release or other
Environmental Violation of or noncompliance with Environmental Laws) or (ii)
Agent's determination that there is more than a remote possibility that any
Casualty or Condemnation would result in an Event of Loss, in which case
Administrative Agent and Owner Trust may at any time during the sixty (60) day
period following receipt of such notice under clause (i) or (ii) engage an
Independent Engineer to determine whether or not the Casualty or Condemnation
would constitute an Event of Loss. The Independent Engineer shall issue its
report within ten (10) days from the date of its engagement. If the Independent
Engineer determines that an Event of Loss shall have occurred, then the
Administrative Agent may exercise its rights under Section 6.3(d) or (e), as
applicable. In such event, Owner Trust shall take control of any actions with
regard to compensations for such Casualty or Condemnation. If Administrative
Agent does not exercise such rights or should the Independent Engineer determine
that no Event of Loss exists, the provisions of Section 4.3 shall apply and in
accordance with Section 4.3, Agent shall appear on behalf of Owner Trust in any
proceeding or action to defend, negotiate, prosecute or, consistent with its
obligations under the Required Actions, settle or adjust any claim for any award
or compensation or insurance payment on account of any Casualty or Condemnation
and shall take all appropriate action in connection with any Casualty or
Condemnation, including the employment of counsel reasonably satisfactory to the
Administrative Agent. Agent shall give Administrative Agent and Owner Trustee
prompt written notice of any such settlement or
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Construction Agency Agreement
adjustment of any such proceeding, action or claim. Furthermore, notwithstanding
anything to the contrary contained herein, whether or not the Independent
Engineer is engaged, Agent may commence taking steps to obtain compensation in
respect of any such Casualty or Condemnation and shall diligently prosecute the
same as contemplated above until such time as it is determined that an Event of
Loss has occurred and Owner Trust has exercised its rights under Section 6.3(d)
or (e).
(c) All Net Available Proceeds shall (i) to the extent
less than $20,000,000 per occurrence and so long as no Agent Event of Default or
Owner Trust Termination Event has occurred and is continuing, be paid over to
Agent (unless Agent in its sole discretion elects to have such Net Available
Proceeds paid over to the Collateral Agent pursuant to clause (ii) for the
purpose of repair or restoration to the Facility caused by the applicable
Casualty or Condemnation; provided, that if any such event would have a Material
Adverse Effect, Agent shall consult with Owner Trust and Administrative Agent
prior to commencing any such repairs, and (ii) to the extent equal to or greater
than $20,000,000 per occurrence or if Agent elects to apply such funds under
this clause (ii) or if an Agent Event of Default or Owner Trust Termination
Event has occurred and is continuing, be paid over to the Collateral Agent.
Collateral Agent shall either (i) apply such amounts to the repayment of
revolving Lease Indebtedness in accordance with Section 8 of the Intercreditor
Agreement, and such amounts may be readvanced to pay the costs of repair and
restoration unless an Agent Event of Default or an Owner Trust Termination Event
has occurred and is continuing or (ii) deposit such amounts into a segregated
account and invest such amounts in Permitted Investments (as defined in the
Intercreditor Agreement). Net Available Proceeds paid over to Collateral Agent
pursuant to this Section 6.3 (so long as no Agent Event of Default or Owner
Trust Termination Event has occurred and is continuing) shall be disbursed (up
to two times per month) to Agent for the purpose of repairing the damage to the
Facility caused by the applicable Casualty or Condemnation. If the damage or
loss exceeds $20,000,000, the Agent shall, as a condition precedent to the
disbursement of additional funds, deliver to Owner Trust a revised Budget
reasonably satisfactory to Owner Trust.
(d) If an Event of Loss occurs due to both (i) Agent's act
or failure to act and (ii) by reason of fraud, misappropriation of funds,
illegal acts or willful misconduct by Agent, at the election of the
Administrative Agent, Agent shall be deemed to have exercised its Purchase
Option under this Agreement and shall pay the Termination Amount in accordance
with Section 10.1 and otherwise comply with the provisions of that Section. If
an Event of Loss would not be covered by the preceding sentence, but would
constitute an Owner Trust Termination Event, the provisions of Article IX shall
apply if so elected by the Administrative Agent. In either case, all Net
Available Proceeds shall be distributed pursuant to Section 8 of the
Intercreditor Agreement.
(e) If an Event of Loss occurs that is not due to
circumstances described in (d) above, notwithstanding Agent's obligation under
Section 4.3 herein to perform the Required Actions, at the election of
Administrative Agent, this Agreement shall terminate,
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Construction Agency Agreement
whereupon Owner Trust shall be relieved of any obligation to make further
payments hereunder or make available to Agent any Net Available Proceeds for the
payment of Project Costs. The Net Available Proceeds and any proceeds realized
from the sale of the Facility will be paid to the Collateral Agent and
distributed in accordance with Section 8 of the Intercreditor Agreement and
Agent shall surrender all of its interest in the Facility to Owner Trust in
accordance with the procedures set forth in Exhibit J and thereafter Agent shall
be released from all obligations hereunder and the other Operative Agreements
(other than indemnity obligations which survive in accordance with the terms of
this Agreement), and Agent shall transfer to Owner Trust all of Agent's right,
title and interest in and to the Facility and the Net Available Proceeds.
ARTICLE VII
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF AGENT, OWNER TRUST AND BANK
7.1 Representations and Warranties of Agent. Agent hereby
represents and warrants to each of the other parties hereto that:
(a) Organizational Status. Agent (i) is a duly organized
and validly existing limited liability company in good standing under the laws
of the State of Delaware, (ii) is duly qualified, and if applicable, in good
standing under the laws of each jurisdiction in which the character of the
Equipment or any properties and assets now owned or leased by it or the nature
of the business transacted by it requires it to be so qualified, except where
the failure to be so qualified, individually or in the aggregate, would not have
a Material Adverse Effect and (iii) has the power and authority to own its
properties and to conduct the business in which it is currently engaged.
(b) Power and Authority. Agent has the power and authority
to execute, deliver and carry out the terms and provisions of the Operative
Agreements to which it is a party and has taken all necessary action to
authorize the execution, delivery and performance of the Operative Agreements to
which it is a party, and has duly executed and delivered this Agreement and each
other Operative Agreement to which it is a party on the date that this
representation is made or deemed made, and this Agreement and each other
Operative Agreement to which it is a party constitutes a legal, valid and
binding obligation enforceable against it in accordance with its terms, except
as enforceability may be limited by insolvency, bankruptcy, reorganization or
other laws relating to or affecting the enforcement of creditors' rights
generally and general principles of equity.
(c) No Violation. Neither the execution, delivery and
performance by Agent of each Operative Agreement to which it is a party nor
compliance with the terms and provisions thereof, nor the consummation of the
transactions contemplated herein or therein (i) will contravene any applicable
provision of any Applicable Laws, except for such Applicable
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Construction Agency Agreement
Laws as Agent shall Contest or that the contravention of which would not have a
Material Adverse Effect, (ii) will conflict or be inconsistent with or result in
any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or (other than pursuant to such Financing Documents
to which it is a party) result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets of
Agent pursuant to the terms of any indenture, loan agreement, lease agreement,
mortgage, deed of trust, or other agreement relating to indebtedness for
borrowed money to which Agent is a party or by which it or any of its property
or assets is bound or to which it may be subject, other than as contemplated
hereby or as would not have a Material Adverse Effect, or (iii) will violate any
provision of the organizational documents of Agent.
(d) Litigation. There are no actions, suits or proceedings
pending or, to the Actual Knowledge of a Responsible Officer of Agent,
threatened (i) that are binding on or otherwise affect in any way the Property
and in which there is a likelihood of an adverse decision that would have a
Material Adverse Effect or (ii) that question the validity, legality or
enforceability of any Operative Agreement to which Agent or Guarantor is a party
or the rights or remedies of Owner Trust or Administrative Agent thereunder.
(e) Governmental Approvals; Compliance with Laws. Except
with respect to approvals which are customarily applied for after the date
hereof and which are anticipated to be obtained in due course or subject to a
Contest, no Governmental Action by any Governmental Authority having
jurisdiction over Agent or Owner Trust or the Property is required to authorize
or is required in connection with (i) the execution, delivery and performance by
Owner Trust or by Agent of any Operative Agreement to which it is a party, or
(ii) the legality, validity, binding effect or enforceability against Agent of
any Operative Agreement to which it is a party, except in either such case, for
any such Governmental Action the absence of which or the failure to obtain would
not have a Material Adverse Effect. All Governmental Actions, easements and
rights-of-way, including proof and dedication, required for (i) construction of
the Improvements in accordance with the Plans and Specifications and the
Operative Agreements to which it is a party and (ii) the use and operation of
the Facility have either been obtained from the appropriate Governmental
Authorities having jurisdiction or from private parties, as the case may be, or
will be obtained from the appropriate Governmental Authorities having
jurisdiction or from private parties, as the case may be, as and when necessary
for Agent to comply with the Required Actions and in any event prior to the
Completion Date, except for any Governmental Action, the failure of which to
obtain would not have a Material Adverse Effect. The Facility and the Property,
as improved in accordance with the Construction Contracts, will at all times
comply in all material respects with all requirements of Applicable Law
(including all applicable zoning and land use laws and Environmental Laws) and
Insurance Requirements, except to the extent such failure to comply with
Applicable Laws would not result in a Material Adverse Effect; provided,
however, that any such failure to comply with Environmental Laws would not
reasonably be expected to result in a Material Environmental Liability.
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Construction Agency Agreement
(f) Investment Company Act. Agent is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
(g) Public Utility Holding Company Act. Agent (solely as a
consequence of the fulfillment of its obligations under each Operative Agreement
to which it is a party) is not (nor will be) subject to, or is (or will be)
exempt from regulation as a "holding company," a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended. Based upon its due diligence review,
Agent has concluded that neither Owner Trust nor any Secured Party (solely as a
consequence of the fulfillment of its obligations under the Operative
Agreements) is (nor will be) subject to, or each is (or will be) exempt from
regulation as a "holding company," a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
(h) Title; Restrictions. Owner Trust shall have a valid
and marketable leasehold interest in and to the Land and a valid and marketable
fee interest in the Improvements, and upon recording of the Ground Lease, free
and clear of Liens (other than Permitted Liens).
(i) Use of Funds; Margin Stock. No part of the proceeds of
any Payment or any Letters of Credit made available to Agent will be used,
directly or indirectly, for any purpose which violates or which would be
inconsistent with, the provisions of Regulations T, U or X of the Board of
Governors of the Federal Reserve System.
(j) Defaults. No Agent Default, Agent Event of Default,
Owner Trust Termination Event or Force Majeure Event has occurred and is
continuing hereunder.
(k) Location. Agent shall notify Owner Trust in writing
not less than thirty (30) days prior to any change of its location (as
determined pursuant to Section 9-307 of the UCC).
(l) [Intentionally Omitted.]
(m) Investigation. Owner Trust has made no representation
or warranty whatsoever with respect to the Facility, the Property or that any
information provided to Agent with respect to the Property is accurate, true,
correct, or fit for its intended purpose. Agent acknowledges that it is Agent's
responsibility to determine the existence and nature of all information that may
affect the Property or Agent's obligations under this Agreement.
(n) Regulatory Matters. Owner Trust shall not become
subject to any statutory or regulatory requirements solely by virtue of
executing, delivering and performing its obligations under the Operative
Agreements to which it is a party, except for (i) regulation the
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Construction Agency Agreement
applicability of which depends upon the existence of facts in addition to the
exercise of Owner Trust's rights and obligations under the Operative Agreements
to which it is a party, the ownership of, or the holding of, any interest in the
Facility, and (ii) regulatory requirements with respect to the filing of
construction, safety, and operational reports, the creation and filing of which
shall be a Required Action of Agent.
(o) FIRPTA. The sale or other disposition of the Property,
the Facility or any interest therein by Owner Trust as a result of the exercise
of the Purchase Option or any transfer of the Property or the Facility (or any
interest therein or in an entity owning directly or indirectly the Facility or
the Property) shall not give rise to any Tax under Code Section 897 or
withholding under Code Section 1445.
(p) Budget. The Budget has been prepared in good faith on
the basis of reasonable assumptions and the amounts set forth in the Budget
provide for all of the reasonably anticipated costs to be incurred by Owner
Trust from the Closing Date until the Maturity Date in connection with the
transactions contemplated by this Agreement.
(q) Use and Operation of Facility. Except for such as are
reasonably expected to be obtained on or prior to the Completion Date and are
not necessary or required prior thereto or the failure to obtain or maintain of
which will not have a Material Adverse Effect, all agreements, easements and
other rights, public or private, which are necessary to permit the lawful
ownership, use and operation of the Facility pursuant to the Operative
Agreements have been obtained and are in full force and effect and there is no
breach, default, violation, pending modification or cancellation of any of the
same.
(r) Property Related Matters. Upon Completion of the
Improvements in accordance with the Construction Contracts, the Improvements on
the Land will not encroach in any material manner onto any adjoining land
(except as permitted by express written easements or variance) or violate any
material covenant, restriction, right of way, license, agreement or easement
affecting the Property, whether recorded or unrecorded. The Land has legal
access to a public road. There is no action, suit or proceeding (including any
proceeding in condemnation or eminent domain or under applicable Environmental
Law other than as set forth in Schedule III attached hereto) pending or, to
Agent's knowledge, threatened which materially and adversely affects the title
to, or the use, operation or value of, the Facility. No Casualty or Condemnation
with respect to the Property has occurred which would constitute an Event of
Loss.
(s) Taxes. Agent has filed or caused to be filed all
United States federal tax returns and all other tax returns or reports which are
required to have been filed by or on behalf of Agent or its business or
activities as of the Closing Date (taking into account any permitted extensions
taken by Agent) and has timely paid or caused to be paid all taxes due pursuant
to said returns or pursuant to any assessment relating to such taxes, except
such taxes, if any, as are being Contested. As of the Closing Date, no tax liens
have been filed and no claims
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Construction Agency Agreement
are being asserted with respect to any such taxes which would have a Material
Adverse Effect. As of the Closing Date, the charges, accruals and reserves on
the books of Agent in respect of any taxes or other governmental charges are
adequate in all material respects. As of the Closing Date, Agent knows of no
pending investigation of Agent by any taxing authority, nor of any pending but
unassessed tax liability which, in either case, would have a Material Adverse
Effect.
(t) Recording and Filing. The Ground Lease (or memorandum
thereof), the Lease, the Memorandum of Lease, the Lessor Mortgage, the Lessee
Mortgage, and the UCC Financing Statements shall be executed and delivered by
all parties thereto and in proper form to be duly recorded or filed, and,
provision for all recording and filing fees and Taxes with respect to any such
recording or filing shall have been made in full on or prior to the Closing Date
and the same will create a valid, perfected first priority security interest and
Lien on the Property in favor of Collateral Agent subject to no other Liens
except in each case for Permitted Liens.
(u) Environmental Compliance.
(i) Except as disclosed in Schedule III, the Facility
complies in all material respects with all Environmental Laws
except to the extent such failure to comply with Environmental
Laws would not reasonably be expected to result in a Material
Environmental Liability; all necessary Governmental Actions
pursuant to Environmental Laws have been obtained and are in full
force and effect with respect to the Facility, except such
Governmental Actions, customarily obtained or which are permitted
by Applicable Law to be obtained at a later date (in which case
Agent, having completed all appropriate due diligence in
connection therewith, has no reason to believe that such
Governmental Actions will not be granted in the usual course of
business prior to the date that such Governmental Actions are
required by Applicable Law without substantial expense or delay
and without terms or conditions that may have a Material Adverse
Effect) except for any Governmental Action, the failure to obtain
would not have a Material Adverse Effect; and no Environmental
Violation or Hazardous Condition exists that could be reasonably
likely to (A) form the basis of an Environmental Action against
the Facility that would reasonably be expected to result in a
Material Environmental Liability or (B) cause the Facility to be
subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law except for
restrictions arising under the issued or to be issued
Governmental Actions which would not result in a Material Adverse
Effect.
(ii) No portion of the Facility is listed or, to the
knowledge of Agent, proposed for listing on the NPL or on CERCLIS
or any analogous list of sites requiring investigation or cleanup
which would reasonably be expected to result in a Material
Environmental Liability.
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Construction Agency Agreement
(iii) Except as disclosed in Schedule III, (A) No
Hazardous Substances that have been generated at or transported
from any portion of the Facility have been disposed at any
location that is listed or proposed for listing on the NPL or on
the CERCLIS or any analogous list where such disposal would
reasonably be expected to result in a Material Environmental
Liability, and (B) all Hazardous Substances generated, used,
treated, handled or stored at or transported to or from the
Facility have been disposed of in compliance with all
Environmental Laws and Governmental Actions pursuant to
Environmental Laws, except for such actions that would not
reasonably be expected to result in a Material Environmental
Liability.
(iv) Except as disclosed in Schedule III, Agent has
not received any written notice, mandate, order, Lien or request
which remains pending under an Environmental Law concerning the
Facility or any part thereof or relating to an alleged
Environmental Violation or Environmental Action concerning the
Facility or any part thereof or relating to any potential adverse
action in any way involving human health, safety (including
workplace safety), natural resources, land use or environmental
matters affecting the Facility or any part thereof except for
such notices, mandates, orders, Liens, or requests that would not
reasonably be expected to result in a Material Environmental
Liability.
(v) Except as disclosed in Schedule III, there is no
Environmental Action pending or, to the knowledge of Agent,
threatened against Agent or Owner Trust by any Governmental
Authority with respect to the presence or release of any
Hazardous Substance on or from the Facility or any part thereof
except for such Environmental Actions that would not reasonably
be expected to result in a Material Environmental Liability.
(vi) Except as disclosed in Schedule III, to the
knowledge of Agent, no Hazardous Substances are present or have
been released from or on or beneath the Facility or any part
thereof or are migrating into the Facility for which remedial
action could reasonably be expected to be required under any
Environmental Law or may be necessary to prevent or eliminate a
significant risk to human health or the environment except for
the presence or release or migration of Hazardous Substances that
would not reasonably be expected to result in a Material
Environmental Liability.
(v) Compliance with Requirements. The Improvements, when
completed, will comply with all material requirements and conditions set forth
in this Agreement and all other material conditions and requirements of the
Operative Agreements.
(w) No Material Misstatements. No information, report,
financial statement, exhibit or schedule with regard to the Property furnished
by Agent to Appraiser
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Construction Agency Agreement
in connection with the preparation of the Appraisal described in Section 7.5(f)
when taken as a whole, contained any misstatement of a material fact or omitted
to state any material fact with regard to the Property necessary to make the
statements therein, in the light of the circumstances under which they were, are
or will be made, not misleading in any material respect on the date as of which
such information is stated or certified.
(x) Ground Lease. The Ground Lease is in full force and
effect and no default or event of default has occurred thereunder. No event has
occurred which gives the Ground Lessor the right to terminate the Ground Lease.
(y) Compliance with Loan Agreement Covenants. Agent will
comply on behalf of Owner Trust, and will cause Owner Trust to comply, with the
covenants contained in Article V of the Loan Agreement dated as of the initial
Bond Closing Date with PEDFA; provided, that this covenant shall not include
Section 5.10 of such Loan Agreement.
7.2 Representations and Warranties of Owner Trust. Owner Trust
hereby represents and warrants to each of the other parties hereto that (a) it
is a business trust duly organized, validly existing and in good standing under
the laws of the State of Delaware and has the power and authority to carry on
its business as now conducted and to enter into and perform its obligations
under each Operative Agreement to which it is a party, (b) the execution,
delivery and performance of each Operative Agreement to which it is or will be a
party are within Owner Trust's power and have been duly authorized by all
necessary action on its part and neither the execution and delivery thereof by
Owner Trust, nor the consummation of the transactions contemplated thereby by
Owner Trust, nor compliance by it with any of the terms and provisions thereof
(i) requires or will require any approval of the holders of trust interests of,
or approval or consent of any holders of any indebtedness or obligations of
Owner Trust (in each case, which approval has not been obtained) or (ii) does or
will contravene or result in any breach of or constitute any default under its
organizational documents, or result in the creation of any Lien upon the
Property, other than any Lien in favor of Collateral Agent and other holders of
Lease Indebtedness under the Security Agreement or any other Financing Document,
(c) each Operative Agreement to which it is a party has been duly executed and
delivered by it and constitutes a legal, valid and binding obligation
enforceable against it in accordance with the terms thereof, subject, in each
case, to enforceability, bankruptcy, insolvency, reorganization and other
similar laws affecting enforcement of creditor rights generally (insofar as any
such law relates to the bankruptcy, insolvency, reorganization or similar event
of Owner Trust) and, as to the availability of specific performance or other
injunctive relief, subject to the discretionary power of a court to deny such
relief and to general equitable principles and (d) there are no actions,
proceedings, claims, suits, investigations, inquiries or similar actions
pending, or to the knowledge of Owner Trust, threatened, against Owner Trust
before any Governmental Authority or arbitral tribunal that question the
validity or enforceability of any Operative Agreement to which it is a party or
that would adversely affect Owner Trust's ability to perform its obligations
under any Operative Agreement to which it is a party.
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Construction Agency Agreement
7.3 Representations and Warranties of Bank. Bank, in its
individual capacity, represents and warrants to each of the other parties hereto
as follows:
(a) Due Organization, etc. It is a national banking
association duly organized and validly existing under the laws of the United
States and has the organizational power and authority to enter into and perform
its obligations under the Trust Agreement and (assuming due authorization,
execution and delivery of the Trust Agreement by Owner Trust Parent) has the
corporate and trust power and authority to act as Trustee and to enter into and
perform the obligations under each of the other Operative Agreements to which
Bank or Trustee, as the case may be, is or will be a party and each other
agreement, instrument and document to be executed and delivered by it in
connection with or as contemplated by each such Operative Agreement to which
Bank or Trustee, as the case may be, is or will be a party.
(b) Authorization; No Conflict. The execution, delivery
and performance of each Operative Agreement to which it is or will be a party,
either in its individual capacity or (assuming due authorization, execution and
delivery of the Trust Agreement by Owner Trust Parent) as the Trustee, as the
case may be, has been duly authorized by all necessary action on its part and
neither the execution and delivery thereof, nor the consummation of the
transactions contemplated thereby, nor compliance by it with any of the terms
and provisions thereof (i) does or will require any approval or consent of any
trustee or holders of any of its indebtedness or obligations, (ii) does or will
contravene any current United States law, governmental rule or regulation
relating to its banking or trust powers, (iii) does or will contravene or result
in any breach of or constitute any default under, or result in the creation of
any Lien upon any of its property under, its articles of association or by-laws,
or any indenture, mortgage, deed of trust, conditional sales contract, credit
agreement or other agreement or instrument to which it is a party or by which it
or its properties may be bound or affected or (iv) does or will require any
Governmental Action by any Governmental Authority of the United States
regulating its banking or trust powers.
(c) Enforceability, etc. The Trust Agreement and, assuming
the Trust Agreement is the legal, valid and binding obligation of Owner Trust
Parent, each other Operative Agreement to which the Bank or Trustee, as the case
may be, is or will be a party have been, or on or before the Closing Date will
be, duly executed and delivered by Bank or Trustee, as the case may be, and the
Trust Agreement and each such other Operative Agreement to which Bank or
Trustee, as the case may be, is a party constitutes, or upon execution and
delivery will constitute, a legal, valid and binding obligation enforceable
against Bank or Trustee, as the case may be, in accordance with the terms
thereof, except as the same may be limited by insolvency, bankruptcy,
reorganization or other laws relating to or affecting creditors' rights or by
general equitable principles.
(d) Litigation. There is no action or proceeding pending
or, to its knowledge, threatened to which it is or will be a party, either in
its individual capacity or as Trustee, before any Governmental Authority that,
if adversely determined, would materially and
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Construction Agency Agreement
adversely affect its ability, in its individual capacity or as Trustee, to
perform its obligations under the Operative Agreements to which it is a party,
would have a material adverse effect on the financial condition of Trustee or
would question the validity or enforceability of any of the Operative Agreements
to which it is or will become a party.
(e) Assignment. It has not assigned or transferred any of
its right, title or interest in or under this Agreement except in accordance
with the Operative Agreements.
7.4 Covenants of Agent. Agent hereby covenants and agrees that
so long as this Agreement is in effect and until all amounts payable by and
obligations of Agent under the Operative Agreements have been paid or performed
in full and Owner Trust's obligations to make Payments shall have terminated or
Agent has exercised the Purchase Option with respect to the Facility:
(a) Preservation of Existence. Agent will preserve and
maintain its existence in the jurisdiction of its formation and all material
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits, or registrations from any Governmental Authority that are
necessary for the transaction of its businesses, except where the failure to so
preserve and maintain would not have a Material Adverse Effect and except that a
transaction permitted under paragraph (g) shall not constitute a violation of
this covenant; and Agent will qualify and remain qualified to transact business
in each jurisdiction in which such qualification is necessary in view of its
business or the ownership or leasing of its properties except where the failure
to so qualify or remain qualified would not have a Material Adverse Effect.
(b) Payment of Taxes and Other Potential Liens. Agent will
pay and discharge promptly all Taxes, assessments and governmental charges or
levies imposed upon it, upon the Property or any part thereof and upon its
income or profits or any part thereof, except that Agent shall not be required
to pay or cause to be paid any Tax, assessment, charge or levy that is being
Contested or for which the failure to pay does not have a Material Adverse
Effect.
(c) Compliance With Applicable Laws. Agent will comply in
all material respects within the time period, if any, given for such compliance
by the relevant Governmental Authority or Authorities with enforcement
authority, with all Applicable Laws except where being Contested or where
noncompliance would not have a Material Adverse Effect; and, in addition, if
such compliance involves Environmental Laws, noncompliance would not result in a
Material Environmental Liability.
(d) Books and Records. Agent will keep, or cause to be
kept, proper books of record and account, in which full and correct entries
shall be made of all its financial transactions and its assets and business, in
accordance with GAAP.
(e) Maintenance of Properties, Etc. Agent will maintain
and preserve all of its properties which are used in the conduct of its business
in good working order and
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Construction Agency Agreement
condition, ordinary wear and tear excepted, to the extent that any failure to do
so would have a Material Adverse Effect.
(f) Liens. Agent will not create, assume or suffer to
exist any Liens on the Facility or the Construction Contracts or the Operative
Agreements other than Permitted Liens.
(g) Mergers, Etc. Agent will not merge or consolidate with
any Person, except that Agent may merge or consolidate with (or liquidate into)
any other Person; provided, that (i) either (A) Agent shall be the continuing or
surviving Person or (B) the continuing or surviving Person is organized under
the laws of the United States or a State thereof and unconditionally assumes by
agreement all of the performance obligations of Agent under the Operative
Agreements and (ii) the Guaranty remains in full force and effect.
(h) Ratings Downgrade. In the event the Guarantor fails to
maintain an Investment Grade Corporate Rating, Agent shall deliver to Owner
Trust and Administrative Agent within sixty (60) days of such event the
following:
(i) Lenders' Title Policy. (A) An ALTA Loan Policy
(1992) issued by the title company or a marked up unconditional
binder for such insurance and otherwise reasonably satisfactory
to Administrative Agent, which policy shall (i) be issued in an
amount equal to the lesser of (A) the Aggregate Lender's
Commitment or (B) the Value (or projected Value) of the Land and
the Improvements when Complete (as determined by the Appraisal
delivered pursuant to Section 7.5(f)); (ii) be issued at standard
rates consistent with similar policies issued in the applicable
state; (iii) insure that the Lessor Mortgage insured thereby
creates a valid first Lien against Owner Trust's leasehold
interest in the Land and fee interest in the Improvements,
subject only to Permitted Liens; (iv) be clear of all defects and
encumbrances, except Permitted Liens; (v) name Collateral Agent,
for the benefit of the Secured Parties, as the insured
thereunder; and (vi) contain such endorsements and affirmative
coverage as Administrative Agent may reasonably request including
zoning and mechanic's lien coverage (if available on a
commercially reasonable basis); (B) evidence reasonably
satisfactory to it that all premiums in respect of such policy,
and all charges for any mortgage recording tax, if any, with
respect to the Lessor Mortgage have been paid or provision made
therefor; and (C) a copy of all recorded documents referred to,
or listed as exceptions to title in, such title commitment
relating to the title policy. If such title policy contains a
pending disbursements clause, Administrative Agent shall receive
title continuation reports simultaneously with each subsequent
Payment request, showing no additional exceptions to title and
otherwise in form and substance reasonably satisfactory to
Administrative Agent.
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Construction Agency Agreement
(ii) Owner's Title Policy. An ALTA Owner's Title Policy
(1992) and/or an ALTA Leasehold Title Policy (1992), as applicable,
issued by the title company, or a marked up unconditional binder for
such insurance, and otherwise satisfactory to Administrative Agent,
insuring Owner Trust's valid leasehold estate in the land and its
fee interest in the Facility in an amount equal to the lesser of (a)
the Aggregate Lender's Commitment or (b) the Value (or projected
Value) of the Land and the Improvements when Complete (as determined
by the Appraisal delivered pursuant to Section 7.5(f)), subject only
to Permitted Liens and containing such endorsements and affirmative
insurance as the Administrative Agent or the Owner Trust shall
reasonably request, including a zoning endorsement (if available on
a commercially reasonable basis) and a recharacterization
endorsement (or separate lenders title insurance policy) in the
event this Agreement or the Lease is recharacterized as a Loan; and
Administrative Agent shall have received evidence reasonably
satisfactory to it that all premiums in respect of such policy have
been paid or provision made therefor.
(iii) An ALTA/ACSM survey of the Facility certified to
the Collateral Agent for the benefit of the Secured Parties, the
Lessor and the title company in a manner reasonably satisfactory to
it, prepared by a professionally licensed land surveyor reasonably
satisfactory to Collateral Agent for the benefit of the Secured
Parties, which survey shall be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly
established and adopted by the American Land Title Association and
the American Congress on Surveying and Mapping in 1999 (or the most
recent promulgated standards), and, without limiting the generality
of the foregoing, there shall be surveyed and shown on such survey
the following: (A) the locations on the Land of all the significant
buildings, structures and other improvements, if any, and the
established building setback lines; (B) the lines of streets
abutting the Land; (C) all access and other easements appurtenant to
the Land; (D) all roadways, paths, driveways, easements,
encroachments and overhanging projections and similar encumbrances
affecting the Land, whether recorded, apparent from a physical
inspection of the Land or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the buildings, structures
and improvements on the Land; and (F) if the Land is described as
being on a filed map, a legend relating the survey to said map.
(i) Use of Proceeds. Agent shall not use the proceeds of any
Advance Payment made available to it under Section 5.1 for any purpose other
than to make payments required under the Construction Contracts, pay Project
Costs in accordance with the Budget, including amounts owing in respect of the
Financing Costs, Commitment Fee, Letter of Credit Fee, Issuing Bank Fronting
Fee, Bond Fees and Transaction Expenses that are permitted to be capitalized or
otherwise paid hereunder, or otherwise specifically agreed to in writing by
Owner
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Construction Agency Agreement
Trust and Administrative Agent, or reimburse itself or any of its Affiliates for
costs and expenses incurred or accrued in connection with Agent's Required
Actions.
(j) Utilities. Upon Completion of the Improvements, all water,
sewer, electric, gas, telephone and drainage facilities and all other utilities
required to adequately service such Improvements for the Intended Use will be
available to the Facility.
(k) Further Assurances. Agent shall take or cause to be taken
from time to time all action necessary to assure that the intent of the parties
pursuant to the Operative Agreements is given effect, and that the Collateral
Agent for the benefit of the Secured Parties holds a first priority (subject to
Permitted Liens) perfected Lien on the Property and that the Deposit Bank shall,
for the benefit of the applicable Secured Parties, hold a first priority
(subject to Permitted Liens) perfected Lien on the Deposit Account Collateral.
Agent shall execute and deliver, or cause to be executed and delivered, to the
Owner Trust, the Administrative Agent and the Collateral Agent hereto, from time
to time, promptly upon request therefor, any and all other and further
instruments (including correction instruments and security agreements, as
appropriate) that may be reasonably requested by the Administrative Agent or the
Collateral Agent to cure any deficiency in the execution and delivery of this
Agreement or any other Operative Agreement to which it is a party.
7.5 Conditions to Effectiveness. In addition to the conditions
precedent set forth in Section 4.1 of the Credit Agreement, the effectiveness of
this Agreement is subject to the delivery by Agent or to the satisfaction by
Agent to Owner Trust and Administrative Agent on or prior to the Closing Date of
the following:
(a) Legal Opinions.
(i) An opinion of counsel to Agent in the State of
Pennsylvania, in form and substance reasonably satisfactory to Owner
Trust and Administrative Agent, in the form attached hereto as
Exhibit K;
(ii) Opinions of Xxxxx Xxxxx L.L.P., as special counsel
and special New York counsel to the Agent and Guarantor, in form and
substance reasonably satisfactory to Owner Trust and Administrative
Agent;
(iii) An opinion of Xxxxxxx X. Xxxxx, in house counsel
of Agent and Guarantor, in form and substance reasonably
satisfactory to Owner Trust and Administrative Agent; and
(iv) An opinion of Potter, Xxxxxxxx & Xxxxxxx, L.L.P.,
special Delaware counsel to Owner Trust, in form and substance
reasonably satisfactory to the Administrative Agent.
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Construction Agency Agreement
(b) Environmental Audits.
(i) A "Phase I" and/or "Phase II" Environmental Audit
and other environmental reports, as applicable, with respect to the
Facility, prepared by an environmental engineer, in form and
substance reasonably satisfactory to Owner Trust and Administrative
Agent.
(ii) Letters from an environmental engineer stating,
among other things, that the Lenders may rely on the Environmental
Audit and other environmental reports with respect to the Facility
which have been prepared by such firm as if they were addressed to
them in all respects.
(c) Lien Searches. Results of a recent search of the Uniform
Commercial Code, judgment and tax lien filings which may have been filed in the
States of Delaware and Pennsylvania with respect to any personal property of
Owner Trust, and the results of such search shall be satisfactory to
Administrative Agent.
(d) Title Matters. A title insurance commitment on or prior to
the Closing Date with respect to the Land (and copies of all documents described
therein as exceptions) showing the absence of any Liens on the Closing Date
other than Permitted Liens and otherwise in form and substance reasonably
satisfactory to Owner Trust and Administrative Agent, together with true,
correct and complete copies of any existing title insurance policies with
respect to the Land and an assignment of Agent's rights under such title
insurance policies.
(e) Survey. An ALTA/ACSM Class A, if available, survey of the
Facility in form and substance reasonably satisfactory to the Administrative
Agent.
(f) Appraisal. An Appraisal of the Property, in form agreed by
the Administrative Agent and Agent, which Appraisal shall show that the Value of
the Property is forecasted to be (A) at the Outside Completion Date, at least
equal to the estimated Project Costs for the Property and (B) on the Expiration
Date (as defined in the Lease Agreement) at least equal to three (3) times the
sum of the principal amount of the Tranche A-2 Loans and the aggregate amount of
Owner Trust's Contribution projected to be outstanding at the Outside Completion
Date.
(g) Due Authorization, Execution and Delivery. The Operative
Agreements shall have been duly authorized, executed and delivered by all
parties thereto, shall be in full force and effect, and no condition or event
shall exist or have occurred which would constitute an Agent Default, an Agent
Event of Default or an Owner Trust Termination Event.
(h) Representations and Warranties. The representations and
warranties of each of Agent, Owner Trust, and Bank, respectively, set forth in
the Operative Agreements shall be true and correct in all material respects on
and as of the date of Closing
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Construction Agency Agreement
(except for those representations or warranties or parts thereof that, by their
terms, expressly relate solely to a specific date, in which case such
representations and warranties shall be true and correct in all material
respects as of such specific date).
(i) Agent and Guarantor Documents. Administrative Agent shall
have received on or before the Closing Date the following, each dated as of the
Closing Date (unless otherwise specified), and in form and substance reasonably
satisfactory to Administrative Agent:
(i) Secretary's Certificate. Certificates of the
Secretary or an Assistant Secretary of Agent and Guarantor
certifying (A) the certificate of formation, by-laws, limited
liability company agreement or other equivalent organizational
documents of Agent and Guarantor, (B) the resolutions of the
relevant governing board or other authority of Agent and Guarantor
approving the execution, delivery and performance of each Operative
Agreement to which Agent or Guarantor is or will be a party and (C)
the names and true signatures of the Officers of Agent and Guarantor
authorized to sign each Operative Agreement to which Agent or
Guarantor is or will be a party and the other documents or
certificates to be delivered hereunder and thereunder;
(ii) Good Standing Certificate; Certificate of
Authority. A good standing certificate from the Secretary of State
of Delaware, each for Agent and Guarantor, and a certificate of
authority to transact business in the Commonwealth of Pennsylvania
from the Secretary of State of the Commonwealth of Pennsylvania, for
Agent, all dated as of a recent date prior to the Closing Date;
(iii) Financing Statements. Agent shall have delivered
to the Owner Trust all Owner Trust Financing Statements relating to
the Property; and
(iv) Other Documents. Such other approvals, certificates
or documents as Administrative Agent may reasonably request to
evidence satisfaction of the conditions set forth in this Section
7.5.
(j) Bank Documents. Administrative Agent shall have received
on or before the Closing Date the following, each dated as of the Closing Date
(unless otherwise specified) and in form and substance reasonably satisfactory
to Administrative Agent:
(i) a certificate of the Secretary or an Assistant
Secretary of Bank certifying (A) the organizational documents of
Bank, (B) the resolutions of the board of directors of Bank
approving the execution, delivery and performance of each Operative
Agreement to which Bank, as Trustee is a party, and (C) the names
and true signatures of the officers of Bank authorized to sign each
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Construction Agency Agreement
Operative Agreement to which Bank, as Trustee is a party and the
other documents or certificates to be delivered hereunder and
thereunder;
(ii) an Officer's Certificate of Bank certifying as to
the truth and correctness of the representations and warranties made
by Bank in each Operative Agreement;
(iii) a certificate of authority from the Comptroller of
the Currency with respect to Bank dated as of a recent date prior to
the Closing Date; and
(iv) the Certificate of Trust of the Owner Trust issued
by the State of Delaware.
(k) Insurance Certificates. Administrative Agent shall have
received on or before the Closing Date certificates of insurance or other
reasonably satisfactory assurances evidencing compliance with the Insurance
Requirements.
(l) [Intentionally Omitted.]
(m) Construction Documents. Owner Trust and Administrative
Agent shall have received on or before the Closing Date copies of the Budget, in
form and substance satisfactory to Owner Trust and Administrative Agent, a
construction schedule, the Plans and Specifications, and all Construction
Contracts and such other documentation with respect to the acquisition,
condition, construction, operation and use of the Property, as Administrative
Agent or Owner Trust may reasonably request, each certified by an Officer of
Agent as being a true and correct copy thereof.
(n) [Intentionally Omitted.]
(o) Taxes. All taxes, charges, fees and costs, if any, due in
connection with the execution, delivery, recording and filing of the Operative
Agreements and the transactions contemplated to be consummated pursuant thereto
shall have been paid in full on or before the Closing Date, or arrangements for
such payment shall have been made to the reasonable satisfaction of Owner Trust
and Administrative Agent.
(p) Recording and Filing. The Ground Lease (or memorandum
thereof) the Lease, the Memorandum of Lease, the Lessor Mortgage, the Lessee
Mortgage, and the UCC Financing Statements shall be executed and delivered by
all parties thereto and in proper form to be duly recorded or filed, and, all
recording and filing fees and Taxes with respect to any such recording or filing
shall have been paid in full (or arrangement for such payment shall have been
made) on or prior to the Closing Date.
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Construction Agency Agreement
(q) Other Property Matters. Owner Trust and Administrative
Agent shall have received evidence satisfactory to each of them that the Land is
properly zoned for the Intended Use, is one or more separate tax lots and that
the Land is not located in a flood hazard area (except as delineated on the
surveys delivered pursuant to this Agreement). If the Land is located in a flood
hazard area, the Agent shall procure flood hazard insurance in such amounts and
in such form as shall be reasonably acceptable to the Administrative Agent.
(r) Proceedings Satisfactory and Other Evidence. All corporate
and other proceedings taken or to be taken in connection with the transactions
contemplated by the Operative Agreements and all documents, papers and
authorizations relating thereto shall be satisfactory to Administrative Agent,
the Participants, Owner Trust, Bank, Agent and their respective counsel.
(s) Legality. Loans and Owner Trust Contributions shall not be
subject to the registration requirements of the Securities Act of 1933, as
amended or any state securities or blue sky Law, and shall not be prohibited by
any Applicable Law (including Regulation T, Regulation U or Regulation X and any
applicable usury laws) and shall not subject Owner Trust, Bank, Administrative
Agent or any Participant to any Tax, penalty, liability or other onerous
condition under or pursuant to any Applicable Law.
(t) Transaction Expenses. All Transaction Expenses as may be
required to be paid on the Closing Date shall have been paid in accordance with
the terms of the Operative Agreements or shall be paid from the Payments to be
made or occur on the Closing Date.
7.6 Conditions to Payments. The obligation of Owner Trust to
make Payments under this Agreement is subject to the conditions set forth in
Section 4.2 of the Credit Agreement and, if applicable, any corresponding
provisions of the Bond Documents or other Financing Documents.
ARTICLE VIII
AGENT EVENTS OF DEFAULT
8.1 Agent Events of Default. If any one or more of the
following events (each an "Agent Event of Default") shall occur:
(a) Agent fails to apply any Advance Payment to payment
of the applicable Contractor pursuant to any Construction Contracts
or other Person identified in a Payment Direction/Borrowing Notice
within sixty (60) days of receipt thereof by Agent, or any amount
payable by Agent to Owner Trust pursuant to Sections 10.1 or 11.2
shall not be paid for more than five (5) Business Days after such
amount becomes due or
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Construction Agency Agreement
any amounts payable by Agent to Owner Trust pursuant to Article XII
shall not be paid for more than ten (10) Business days after such
amount becomes due;
(b) any representation or warranty made by Agent to
Owner Trust in any Operative Agreement or any material certificate,
document or other instrument delivered under any Operative Agreement
to which it is a party shall prove to have been inaccurate in any
material respect at the time made and such materiality shall be
continuing or Agent submits a Payment Direction/Borrowing Notice or
Quarterly Certificate which contains any materially false or untrue
statement or inaccuracy;
(c) (i) There shall be commenced against Agent any case,
proceeding or other action (A) seeking a decree or order for relief
in respect of Agent under any applicable domestic or foreign
bankruptcy, insolvency, reorganization or other similar law, (B)
seeking a decree or order adjudging Agent a bankrupt or insolvent,
(C) seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or similar relief of or in
respect of Agent, or its debts under any applicable domestic or
foreign law or (D) seeking the appointment of a custodian, receiver,
conservator, liquidator, assignee, trustee, sequestrator or other
similar official of Agent or of any substantial part of its
respective Properties, or the liquidation of its respective affairs,
and such petition is not dismissed within ninety (90) days or (ii) a
decree, order or other judgment is entered in respect of any
remedies, reliefs or other matters for which any petition referred
to in (i) above is presented, and such decree, order or other
judgment is not dismissed within ninety (90) days or (iii) there
shall be commenced against Agent any case, proceeding or other
action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of
its assets that results in the entry of an order for any such relief
that shall not have been vacated, discharged or stayed or bonded
pending appeal within ninety (90) days from the entry thereof; or
(d) (i) The commencement by Agent of a voluntary case,
proceeding or other action under any applicable domestic or foreign
bankruptcy, insolvency, reorganization or other similar law (A)
seeking to have an order of relief entered with respect to it, (B)
seeking to be adjudicated a bankrupt or insolvent, (C) seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other similar relief with respect to it
or its debts under any applicable domestic or foreign law or (D)
seeking the appointment of or the taking possession by a custodian,
receiver, conservator, liquidator, assignee, trustee, sequestrator
or similar official of Agent, or of any substantial part of the
Facility; or (ii) the making by Agent of a general assignment for
the benefit of creditors; or (iii) Agent shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts described in clause (i) or (ii)
above or in Section 8.1(c); or (iv) the admission by Agent in
writing of its inability to pay its debts generally as they become
due or the failure by Agent generally to pay its debts as such debts
become due;
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Construction Agency Agreement
(e) by both (A) any act of Agent or failure to act and
(B) reason of fraud, misapplication of funds, illegal acts or
willful misconduct of Agent, Agent shall fail to observe or perform
in any material respect, any term, covenant or condition of Agent
under this Agreement or any other Operative Agreement, including
delivery of the Guaranty and any Collateral Agreement (other than
any term, covenant or condition described in any other Event of
Default referred to in this Section 8.1), and such failure shall
have continued for thirty (30) Business Days after the earlier of
(i) delivery to Agent of written notice thereof from Owner Trust or
(ii) the date Agent shall have obtained knowledge of such failure;
(f) (i) the occurrence of a Guaranty Event of Default
under Section 5.01(h) or (i) of the Guaranty or (ii) the occurrence
of any other Guaranty Event of Default to the extent caused by both
(A) any act or failure to act of Guarantor and (B) by reason of
fraud, misapplication of funds, illegal acts or willful misconduct
of Guarantor;
(g) the occurrence of (1) an Agent Event of Default
under any of the Other CAAs, (2) a Lease Event of Default under
Section 16.1(e) or (f) of any of the Other Leases or (3) any other a
Lease Event of Default under any of the Other Leases, caused by both
(i) the respective Agent's or Lessee's act or failure to act and
(ii) by reason of fraud, misapplication of funds, illegal acts or
willful misconduct of such Agent or Lessee and in connection
therewith the applicable Agent or Lessee has not within the
applicable time period exercised its Purchase Option thereunder, and
if such Purchase Option is elected in Good Faith, such Agent or
Lessee, as the case may be, has not consummated such purchase within
the applicable time period;
(h) [Intentionally Omitted];
(i) by both (i) any act or failure to act by Agent and
(ii) reason of fraud, misapplication of funds, illegal acts or
willful misconduct by Agent, Agent shall (A) fail to obtain and
maintain in full force and effect any insurance policy (including
the amounts of coverage) required pursuant to Article VI, or (B)
fail to deliver any certificate of insurance required to be
delivered to Owner Trust and Administrative Agent pursuant to
Article VI and such failure shall continue unremedied for two (2)
Business Days after notice by Owner Trust or Administrative Agent to
Agent of such failure;
(j) by both (i) any act or failure to act of Agent,
Lessee or Guarantor and (ii) reason of fraud, misapplication of
funds, illegal acts or willful misconduct by Agent, Lessee or
Guarantor
(A) any Operative Agreement to which it is a
party or any obligation of Agent, Lessee or the
Guarantor thereunder shall be revoked or repudiated by
Agent, Lessee or the Guarantor in any respect or
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Construction Agency Agreement
attempted to be revoked or repudiated by Agent, Lessee
or the Guarantor or any Operative Agreement to which it
is a party shall cease to be the legal, valid, binding
and enforceable obligation of Agent, Lessee or the
Guarantor, in each case, in such manner as to be
materially adverse to the interest of Owner Trust,
Administrative Agent, Bank or any Participant;
(B) the Ground Lease or any obligation of
the Ground Lessor thereunder shall be terminated,
revoked or repudiated by the Ground Lessor in any
respect or attempted to be terminated, revoked or
repudiated by the Ground Lessor in any respect or the
Ground Lease shall cease to be the legal, valid, binding
and enforceable obligation of the Ground Lessor, in each
case, in such manner as to be materially adverse to the
interest of Owner Trust, Administrative Agent, Bank or
any Participant;
then, in any such event and during its continuance, subject to the Intercreditor
Agreement, Owner Trust or Collateral Agent as assignee thereof may in addition
to the other rights and remedies provided for in this Article, terminate the
Aggregate Owner Trust's Commitment and Agent's rights as Owner Trust's agent
hereunder by giving Agent notice of such termination; provided, however, that
such termination shall become effective automatically upon the occurrence of an
event described in Section 8.1(c) or (d).
8.2 Remedies. (a) If an Agent Event of Default shall have
occurred and be continuing, Owner Trust shall have the right by written notice
to Agent delivered,
(i) immediately and automatically in the case of any
Agent Event of Default specified in Section 8.1(c) or (d);
(ii) within five (5) Business Days of receipt of such
notice, in the case of any Agent Event of Default specified in
Section 8.1 (a), (e), (f) or (g) (other than for events of default
under clauses 8.1(b) of the Other CAAs); and
(iii) within thirty (30) days of receipt of such notice,
in the case of any other Agent Event of Default,
to require Agent to pay to Owner Trust, subject to Agent's right to elect the
Purchase Option pursuant to Section 10.1, the Termination Amount for application
as provided in the Intercreditor Agreement; and if an Event of Default shall
have occurred and be continuing under Section 8.1(c) and (d), the Termination
Amount shall automatically be due and payable immediately by Agent, without
request, demand, presentment, protest or notice of any kind. Upon the occurrence
and continuance of an Agent Event of Default, Owner Trust shall have the right
to set off an amount equal to the value of the Deposit Account Collateral then
on deposit with the Deposit Bank, if any, to an equal amount of the Termination
Amount. Upon receipt by
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Construction Agency Agreement
the Collateral Agent of the Termination Amount, this Agreement and the
Collateral Agreement shall terminate (except for any provisions that expressly
survive termination), and Owner Trust shall convey to Agent or its designee its
interest in and possession of the Property, free and clear of all Owner Trust
Liens, the Liens granted by Agent to Owner Trust and by Owner Trust in favor of
the Collateral Agent and any other Liens granted by Owner Trust (other than
those Liens arising or created as a result of actions undertaken or documents or
instruments executed by Owner Trust pursuant to the request of Agent), without
representation or warranty (except the representation and warranty that the
Property is free and clear of all such Liens) and Agent will accept such
interest on an AS IS, WHERE IS basis. If Agent thereupon fails to pay timely the
Termination Amount, Owner Trust may, in addition to all of its other rights and
remedies provided for in this Agreement, pursue all of its other rights and
remedies under Applicable Law, including its right to terminate this Agreement
and the Aggregate Owner Trust's Commitment hereunder and retain its ownership
interest in the Property. Agent shall pay all reasonably documented costs and
expenses reasonably incurred by or on behalf of Owner Trust, including
reasonable fees and expenses of counsel, as a result of any Agent Event of
Default hereunder.
(b) Notwithstanding the provisions of Section 8.2(a),
Agent shall have the right to cure any Agent Event of Default (other than an
Agent Event of Default under clauses (c) or (d) of Section 8.1) by (i) giving
the Purchase Option Notice pursuant to Section 10.1 prior to the expiration of
the five (5) Business Day period or thirty (30) day period, as applicable,
specified in Section 8.2(a) above and (ii) consummating, or causing its Designee
to consummate, the Purchase Option within five (5) Business Days after the date
of such Purchase Option Notice subject to the limitations set forth in the last
sentence of Section 10.1(a) with regard to the delivery of a Purchase Option
Certificate. If Agent has paid or caused to be paid the Termination Amount as
required hereunder, Agent may defer the transfer of title to the Facility for a
reasonable period, not to exceed ninety (90) days, as may be necessary to obtain
any approvals to such title transfer from Governmental Authorities as are
mandatory under Applicable Law. Owner Trust may require as a condition to any
such deferral that it receive an indemnity agreement from Guarantor with such
collateral therefor as Owner Trust, in its sole discretion, deems sufficient.
8.3 Survival. The termination of the Aggregate Owner Trust's
Commitment pursuant to Section 8.1 or 8.2 shall in no event relieve Agent of its
liability and obligations hereunder that accrued prior to such termination, all
of which shall survive any such termination.
8.4 Waivers; Rights Cumulative. No failure to exercise and no
delay in exercising, on the part of Owner Trust, any right, remedy, power or
privilege under this Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege under this
Agreement preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges provided in this Agreement are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
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ARTICLE IX
TERMINATION BY OWNER TRUST; FAILURE TO COMPLETE
9.1 Owner Trust Termination Events. Agent hereby agrees that
Owner Trust shall have the unconditional right and option to terminate the
Aggregate Owner Trust's Commitment upon the occurrence of any of the following
events ("Owner Trust Termination Events"):
(a) as a direct or indirect result of any act or failure
to act by Agent or any Contractor, the amount of Advance Payments
and Direct Payments required to successfully Complete the Facility
has exceeded, or is reasonably likely to exceed (as determined by
Agent or, at the request of Owner Trust, the Independent Engineer)
the Aggregate Owner Trust's Commitment (or the Budget, as from time
to time revised pursuant to this Agreement);
(b) in circumstances where an Agent Default or an Agent
Event of Default does not exist, Agent has failed, or is reasonably
likely to fail (despite Good Faith efforts), to perform the Required
Actions, such failure continues for thirty (30) days after written
notice thereof by Owner Trust to Agent, and such failure has
materially diminished the likelihood that the Facility will be
successfully Completed (i) in accordance with the Budget or (ii) by
the Outside Completion Date;
(c) an event described in Section 8.1 (i)(A) or (j) has
occurred which does not constitute an Agent Event of Default solely
by reason of the failure to meet the causation requirement in either
of clauses (i) and (ii) therein or an event described in Section
8.1(e) or (f) has occurred which does not constitute an Agent Event
of Default solely by reason of the failure to meet the causation
requirement in either of clauses (A) and (B) set forth; provided,
however, that any such failure in respect of a Special Provision
shall constitute an Owner Trust Termination Event hereunder only if
(x) the applicable Benefited Secured Parties holding not less than
50.1% of the related Lease Indebtedness shall have elected to treat
such failure as an Owner Trust Termination Event and (y) such
related Lease Indebtedness shall have been accelerated in accordance
with the terms of the related Financing Documents; or
(d) the occurrence of (i) an Owner Trust Termination
Event under any of the Other CAAs, or (ii) a Lease Event of Default
under any of the Other Leases which does not constitute an Agent
Event of Default solely by reason of the failure to meet the
causation requirements described in clauses (i) and (ii) set forth
in Section 8.1(g)(3), and in connection therewith the applicable
Agent or Lessee has not within the applicable time period exercised
its Purchase Option thereunder, and if such Purchase Option is
elected, such Agent or Lessee, as the case may be, has not
consummated such purchase within the applicable time period.
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In any such case, and during its continuance, Agent, Administrative Agent and
Owner Trust (but only with the unanimous consent of the Participants if such
revision would result in an increase of the Commitments above the Aggregate
Owner Trust Commitments) may mutually agree to a revised Budget which will
permit successful Completion of the Facility, in which case Owner Trust will
rescind the termination.
9.2 Owner Trust Termination Notice. Upon the occurrence and
the continuance of any such Owner Trust Termination Event, Owner Trust (or, if
such event arises under Section 9.1(c) or (d), the Collateral Agent, subject to
the Intercreditor Agreement) shall deliver to Agent a written notice specifying
in reasonable detail the nature of the Owner Trust Termination Event (the "Owner
Trust Termination Notice"). Agent shall have thirty (30) days following the
delivery of the Owner Trust Termination Notice in which to exercise the Purchase
Option by delivery of a Purchase Option Notice pursuant to Article X, for the
purchase of the Property or the Facility. If Agent fails to exercise the
Purchase Option, Owner Trust may exercise the Remarketing Requirement.
9.3 Compliance with Required Actions. For purposes of
determining whether an Owner Trust Termination Event has occurred and continues,
giving Owner Trust the right to issue an Owner Trust Termination Notice, Owner
Trust shall be entitled to deliver a notice pursuant to Section 9.1(b) based
upon any failure by Agent to comply with or perform the Required Actions
(provided that all the other conditions set forth in such Section 9.1(b) are
satisfied) even though such failure to comply with or perform the Required
Actions in and of itself would not restrict or limit Agent's right to request
draws under this Agreement because such failure would not result in a Material
Adverse Effect which prevents Agent from satisfying the conditions to such
payment.
ARTICLE X
AGENT'S OPTIONS
10.1 Purchase Option.
(a) Exercise of Purchase Option. Owner Trust hereby
grants to Agent the unconditional right and option (the "Purchase Option") to
purchase and acquire on any Business Day (provided that an Agent Event of
Default described in clause (c) or (d) of Section 8.1 has not occurred and is
not continuing) during the Term from:
(i) Owner Trust, all of Owner Trust's right, title
and interest in and to the Property ("Asset Purchase") for a
price equal to the Termination Amount; provided, that with the
consent of the Collateral Agent, Owner Trust may accept
Agent's indemnity and undertaking to pay all expenses and
costs that
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are expected to be incurred and which are included in the
Termination Amount but which are not due on the date of
purchase, or
(ii) Owner Trust Parent, all of Owner Trust Parent's
right, title and interest in, to and under its beneficial
interests in Owner Trust ("Upstream Purchase"), for a purchase
price equal to the Termination Amount which would have been
payable had Agent elected the Asset Purchase pursuant to
Section 10.1(a)(i); provided, that with the consent of the
Collateral Agent, Owner Trust may accept Agent's indemnity and
undertaking to pay all expenses and costs that are expected to
be incurred and which are included in the Termination Amount
but which are not due on the date of purchase;
The Purchase Option may be exercised by delivery to Owner Trust of a written
notice of the exercise of such Purchase Option (the "Purchase Option Notice")
and a certificate in the form attached hereto as Exhibit G ("Purchase Option
Certificate"). In the event that Agent is unable to deliver the Purchase Option
Certificate, any exercise of the Purchase Option with respect to the Property
shall be conditioned upon the simultaneous exercise by each Agent of its
purchase options under the respective Other CAAs or Other Leases and each
Replacement Facility with respect to the Signal Peak Facility, the
[_____________] Facility, the [_____________] Facility and each Replacement
Facility, respectively, or the ownership interests in the related Owner Trusts.
Owner Trust and Owner Trust Parent agree to cooperate with Agent to cause any
Purchase Option to be consummated.
(b) Payment of Termination Amount. Any Termination Amount that
may be due and payable from time to time in connection with the exercise of the
Purchase Option, shall be paid in cash only, except as expressly permitted by
Financing Documents governing any Lease Indebtedness with respect to portions of
the Termination Amount payable to the relevant Secured Parties. Any cash
payments to be made to Owner Trust upon the exercise of the Purchase Option
shall be deemed to be prepayments of the aggregate amount of all Payments made
by Owner Trust hereunder, have been assigned by Owner Trust to Collateral Agent
and shall be paid by Agent to Collateral Agent to be applied in accordance with
the Intercreditor Agreement.
(c) Appointment of Designee. From time to time and upon not
less than five (5) days prior written notice to Owner Trust, Agent may assign
the Purchase Option to another Designee; provided that (i) such assignment is
permitted under the applicable Construction Contracts and (ii) notwithstanding
any such assignment Agent shall not be released of any obligation under this
Agreement until such Purchase Option is consummated as provided in Section
10.1(d).
(d) Closing. Closing of a purchase and sale pursuant to
Section 8.2, 9.2 or 10.1(a) shall be conducted at the offices of Xxxxxxxxxx &
Xxxxx LLP, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other
location as may be mutually agreed upon by
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Owner Trust, Administrative Agent and Agent within thirty (30) days after
receipt of a Purchase Option Notice (but in no event later than the Maturity
Date) if the Purchase Option Notice is given pursuant to Section 9.2, on the
date specified in Section 8.2(b) if the Purchase Option is exercised pursuant
thereto, and on or prior to the Maturity Date in all other cases. At closing, as
appropriate, (i) in the case of an Asset Purchase, Owner Trust will sell and
assign to Agent or its Designee by a Purchase Option Assignment and Assumption
Agreement in the form of Exhibit H attached hereto (the "Purchase Option
Assignment"), or other mutually acceptable appropriate documentation, all of
Owner Trust's right, title and interest in, to and under the Property, (ii) in
the case of the Upstream Purchase, Owner Trust Parent will sell and assign to
Agent or its Designee, all of Owner Trust Parent's right, title and interest in,
to and under the ownership interest in Owner Trust, in each case with no
representations, warranties, or covenants of any kind whatsoever (except for the
representations and warranties set forth in the Purchase Option Assignment),
Agent agreeing for itself and its Designee that such transfer shall be (except
as to the representations and warranties set forth in the Purchase Option
Assignment) AS IS, WHERE IS, WITH ALL FAULTS OF ALL AND ANY KIND WHATSOEVER, and
(iii) Agent (or Agent's Designee, as the case may be) shall make payment of the
Termination Amount in accordance with the Intercreditor Agreement (but excluding
reasonably anticipated expenses and costs referred to in the definition of
Termination Amount to the extent assumed by Agent or its Designee, with Agent
remaining obligated with respect thereto hereunder; and provided, that an Agent
Event of Default described in clause (c) or (d) of Section 8.1 has not occurred
and is continuing) to Owner Trust. Owner Trust, Collateral Agent and
Administrative Agent, as applicable, shall, at Agent's or its Designee's
expense, execute and deliver such UCC termination statements, releases,
reconveyances and other documentation, in each case with no representations,
warranties or covenants of any kind, as shall be reasonably requested by Agent
to effect the termination and release of the Liens granted by Agent to Owner
Trust and by Owner Trust in favor of Collateral Agent and other Liens created by
Owner Trust. Once the Purchase Option has been exercised and the Termination
Amount as described in Section 10.1(a)(i) paid (provided that an Agent Event of
Default described in clause (c) or (d) of Section 8.1 has not occurred and is
continuing) (including, if applicable, by any assumption described in Section
10.1(b) above implemented in accordance with such Section) with respect to the
Property, this Agreement shall terminate (except for those provisions which
expressly survive such termination or to the extent assumed pursuant to Section
10.1). All reasonable charges incident to such conveyance, including reasonable
attorneys' fees that may be imposed by reason of such conveyance and assignment
and the delivery of such assignments, shall be paid by Agent.
(e) Taxes. Agent hereby agrees that it shall pay all Transfer
Taxes (and indemnify, defend and hold harmless each Indemnified Person on an
After Tax Basis against all Transfer Taxes required to be paid by such
Indemnified Person on its behalf or on behalf of any other Person) incurred as a
result of the transfer of the Property (or any interest therein or in any entity
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Construction Agency Agreement
owning directly or indirectly the Property) as a result of the exercise of the
Purchase Option or any other transfer of the Property (or any interest therein
or in an entity owning directly or indirectly the Property) requested or
consented to by Agent, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto (including from any
obligation to file any Tax return, report or statement with respect to any such
Transfer Taxes and any liability an Indemnified Person may incur or be required
to pay in respect of Transfer Taxes pursuant to the Credit Agreement). Agent
hereby agrees that if it exercises the Purchase Option or otherwise requests a
transfer of the Property (or any interest therein or in any entity which owns
directly or indirectly the Property) it shall increase the purchase price by an
amount so that after deducting all Taxes that are required to be paid by Owner
Trust or any other transferor or withheld from the purchase price, the purchase
price (after being reduced for applicable Taxes) equals the purchase price that
was otherwise due.
(f) Deemed Exercise of Purchase Option. In the event that
Agent has informed Owner Trust of its intent to exercise either the Purchase
Option or the Lease Option with respect to the Property at least sixty (60) days
prior to the scheduled date of Completion of the Facility, Agent shall have the
right to give notice to Owner Trust of its election to exercise its Lease Option
no later than thirty (30) days prior to the date of Completion of the Facility.
Failure to elect to exercise the Lease Option by such date shall automatically
be deemed to be an exercise by Agent of its Purchase Option with respect to the
Property.
(g) Closing of Upstream Purchase. In connection with any
Upstream Purchase requested by Agent, upon payment of the applicable Termination
Amount, Owner Trust Parent agrees to transfer to Agent or its Designee all of
its ownership interests in Owner Trust, upon consummation of the closing with
respect thereto in accordance with the terms of Section 10.1(d); provided, that
all references to the "Facility" shall be deemed to refer to the Owner Trust
Parent's ownership interests in Owner Trust. Upon such transfer, Owner Trust
Parent shall be deemed to have made the representations and warranties set forth
in the Purchase Option Assignment.
(h) Conveyance of Certain Property. At any time, Agent shall
have, and is hereby granted by Owner Trust, an option to receive an assignment
(or to have its Designee receive an assignment), from time to time, from Owner
Trust all of Owner Trust's right, title and interest in and to (i) substations
and related assets assigned and conveyed to electricity providers and
transmission companies and (ii) any other improvements and related appurtenant
rights for transmission lines, switchyards and related transmission systems, gas
and water pipelines and other pipelines, interconnection lines and equipment and
other conduits from the Facility located on or extending off the Land in order
that same may be conveyed to utility providers and/or fuel suppliers, including
electricity and other utility supply lines which will not be owned by either
Owner Trust or Agent, in either case pursuant to this clause (ii), or other
property having a value not in excess of $10,000,000 in the aggregate for this
Facility, in exchange in the case of clauses (i) and (ii) for the right to use,
pursuant to long term contracts consistent with Prudent Industry Practice such
improvements or property in connection with the operation of the Facility. Such
option may be exercised by Agent by delivery to Owner Trust of written notice,
which notice shall contain a description of the Property to be assigned or
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Construction Agency Agreement
conveyed. Owner Trust agrees, within ten (10) days after receipt of such notice
from Agent, to release its interest in such assigned improvements from the terms
and conditions of this Agreement and shall execute and deliver any documents
reasonably requested by Agent to accomplish the same, in each case without
recourse, representation or warranty of any kind, at the cost and expense of
Agent. In the case of any such assignment, Agent shall indemnify Indemnified
Persons as provided in Section 10.1(e).
(i) Grants of Easements and Releases, Etc. Notwithstanding
anything to the contrary provided for herein and provided that no Agent Event of
Default shall have occurred and be continuing, Agent shall have the right from
time to time and Owner Trust hereby consents to the following actions by Agent,
in the name and stead of Owner Trust, but at Agent's sole cost and expense: (a)
the sale, grant or conveyance of easements, licenses, rights-of-way and other
rights, interests and privileges of any kind or nature reasonably necessary or
desirable for the construction, use, operation, remediation, repair, renovation
or maintenance of the Facility as herein provided (prior to the Lien of the
Security Documents); (b) the release of existing easements or other rights in
the nature of easements, which release shall not harm the Facility; (c) the
dedication or transfer of portions of the Land not necessary for the
Improvements for road, highway or other public purposes (free of the Lien of the
Security Documents); (d) the execution of petitions to have the Land annexed to
any municipal corporation or utility district (free of the Lien of the Security
Documents); (e) the execution of amendments to any covenants and restrictions
affecting the Land (prior to the Lien of the Security Documents); (f) easements,
licenses, rights-of-way, and other rights, interests and privileges as may be
required by Governmental Authorities in connection with an Environmental Action;
and (g) the release of any portion of the Facility that is obsolete or not
necessary in the commercial operation of the Facility in accordance with Prudent
Industry Practice; provided, that in each case Agent shall have delivered to
Owner Trust a Responsible Officer's certificate stating that: (i) such grant,
release, dedication or transfer does not prohibit the Intended Use or materially
impair the Value, utility or remaining useful life of the Facility or (except as
provided hereinabove) the Liens created under the Operative Agreements, (ii) as
applicable, such grant, release, dedication or transfer is necessary in
connection with the construction, use, maintenance, alteration, renovation or
improvement or operation of the Facility or such affected portion of the
Facility or the Land is obsolete or not necessary, (iii) Agent shall remain
obligated under this Agreement and under any instrument executed by Agent
consenting to the assignment or release of Owner Trust's interest in this
Agreement as security for indebtedness, in each such case in accordance with
their terms, as though such grant, release, dedication or transfer, had not been
effected, (iv) Agent shall pay and perform any obligations of Owner Trust and
the Participants under such grant, release, dedication or transfer and (v) Agent
agrees to indemnify the Indemnified Persons in respect thereof as provided in
Article XII. Without limiting the effectiveness of the foregoing, provided, that
no Agent Event of Default or Owner Trust Termination Event shall have occurred
and be continuing, Owner Trust shall, upon the request of Agent, and at Agent's
sole cost and expense, execute and deliver any instruments necessary or
appropriate to confirm any such grant, release, dedication or transfer to any
Person permitted
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Construction Agency Agreement
under this Section 10.1 in form and substance satisfactory to the Owner Trust,
and in each case without recourse, representation or warranty of any kind.
10.2 Lease Option. Agent shall have the option (the "Lease
Option"), exercisable by written notice of such exercise to Owner Trust not
later than the sixtieth (60th) day (or thirtieth (30th) day, if Agent informed
Owner Trust of its intent to exercise the Purchase Option or Lease Option
pursuant to Section 10.1(f)) prior to the scheduled date of Completion of the
Facility, to cause Owner Trust to enter with Agent on or before the Completion
Date a supplement to the Lease in recordable form substantially in the form
attached hereto as Exhibit I (the "Lease Supplement") pursuant to which the term
of the Lease will commence with respect to the Facility, subject to the
following terms and conditions:
(a) Agent shall deliver a customary legal opinion with
respect thereto in form and substance reasonably acceptable to Owner
Trust and Administrative Agent;
(b) no Agent Default, Agent Event of Default or Owner
Trust Termination Event shall have occurred and be continuing;
(c) effective on the date of execution and delivery of
the supplement to the Lease (the "Lease Commencement Date") and all
related agreements and instruments, the term of the Lease shall
commence and the Termination Date shall be extended to the
Expiration Date as defined in the Lease, provided, however, that it
shall be a condition to such extension and to the execution and
delivery of the supplement to the Lease and the related agreements
and instruments that Agent shall have confirmed in writing to Owner
Trust and Administrative Agent that (i) no Agent Default, Agent
Event of Default or Owner Trust Termination Event shall have
occurred and be continuing and (ii) that its and Guarantor's
representations and warranties in this Agreement and the other
Operative Agreements are true and correct in all material respects
as if made on and as of the Lease Commencement Date (except for
those representations or warranties or parts thereof that, by their
terms, expressly relate solely to a specific date, in which case
such representations and warranties shall be true and correct in all
material respects as of such specific date); and
(d) if Agent exercises the Lease Option, all of Agent's
obligations hereunder shall continue until the Completion Date and
the Deposit Account Collateral, including the Collateral Agreement,
shall remain in place until such time as all of the provisions of
this Section 10.2 and Exhibit I hereto have been satisfied, at which
time this Agreement shall terminate (except for those provisions
which expressly survive such termination).
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Construction Agency Agreement
ARTICLE XI
REMARKETING OF FACILITY
11.1 Remarketing of Facility. In the event that Agent has not
(a) provided notice of its intent to exercise its Purchase Option or Lease
Option at least sixty (60) days prior to the scheduled date of Completion of the
Facility or (b) exercised the Purchase Option within thirty (30) days after
delivery of an Owner Trust Termination Notice, Agent shall be required to
remarket the Property (the "Remarketing Requirement") on behalf of Owner Trust
and comply with the marketing procedures set forth in Exhibit J attached hereto.
In connection with the event described in clause (a) of the first sentence
hereof, if the Property is not sold on or before the Completion Date, (i) the
Agent shall be deemed to have elected the Lease Option and shall take all
necessary actions to cause the Basic Term (as defined in the Lease) to commence
on the Completion Date; and (ii) the Remarketing Requirement (including Agent's
obligation to pay the Deposit Payment) shall be rescinded ab initio. In
connection therewith, Agent grants to Owner Trust an irrevocable proxy to
execute a lease supplement for such purpose. If the Remarketing Requirement
arises in connection with an event described in clause (b) of the first sentence
hereof, Agent shall enter into the Services Agreement on or before the
expiration of such thirty (30) day period.
11.2 Deposit Payment and Allocation of Proceeds of Sale. On
(a) the scheduled Completion Date of the Facility in the case of Section 11.1(a)
and (b) on the second Business Day after expiration of the thirty (30) day
period referred to therein in the case of Section 11.1(b), the Agent shall make
a payment to Owner Trust in an amount (the "Deposit Payment") equal to 89.9% of
the Funded Budget Amount reduced by (a) any reimbursement amounts due to Agent
by Owner Trust under the Budget which had been incurred by Agent but not yet
paid with respect to the Facility and (b) any payments previously made by Agent
or its Affiliates to Owner Trust or its Affiliates with respect to the Facility
which are required to be taken into account in the application of the maximum
guarantee test for purposes of EITF 97-10. The Deposit Payment shall be promptly
applied as provided in the Intercreditor Agreement. Upon sale of all the
Property, the sum (the "Remarketing Funds") of the gross proceeds of such sale
less the reasonable (as agreed to by Owner Trust and Administrative Agent)
documented expenses incurred by Agent as provided in Exhibit J shall be
allocated and distributed as follows:
(i) first, all such Remarketing Funds, up to an
amount equal to the Termination Amount less the Deposit
Payment, including without duplication Financing Costs to be
charged against the Allowance for Owner Trust's Cost of
Financing and Owner Trust Yield during the Marketing Period
and any Taxes that Agent would have paid pursuant to Section
10.1(e) had Agent exercised the Purchase Option, shall be paid
to Collateral Agent for application as provided in Section
8.1(d) of the Intercreditor Agreement; and
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Construction Agency Agreement
(ii) second, to the extent Remarketing Funds remain
after application pursuant to clause (i) above, all such funds
shall be paid to Agent.
Upon the performance by Agent of all its obligations under the Remarketing
Requirement with respect to all of the Property and the making of the payments
provided for in this Section 11.2, this Agreement (including Agent's rights as
Owner Trust's agent hereunder) and the Collateral Agreement shall terminate
(except for those provisions which expressly survive such termination).
ARTICLE XII
AGENT'S INDEMNITIES
12.1 Agent's General Indemnification. To the extent Claims
result from actions by Agent, or failures by Agent to act (provided that
indemnification with respect to any Claim arising as a result of Agent's acts or
failures by Agent to act which are related to Completion and which do not arise
due to fraud, willful misconduct, misapplication of funds, illegal acts or
bankruptcy shall be paid solely through Payments in accordance with Article V
hereof), Agent hereby assumes liability for and agrees to defend, indemnify and
hold harmless each Indemnified Person on an After Tax Basis from and against any
and all such Claims which may be imposed on, incurred by or asserted against
such Indemnified Person in any way relating to or arising or alleged to arise
out of (a) the proposed sale/purchase transaction with respect to the Property,
the funding of the Payments, the financing, refinancing, purchase, acceptance,
rejection, ownership, design, construction, delivery, acceptance, nondelivery,
acquisition, handling, installation, operation, transportation, maintenance,
testing, repair, leasing, subleasing, possession, use, modification, condition,
sale, return, repossession (whether by summary proceedings or otherwise) of all
or any portion of Property or any other matter concerning this Agreement, the
Construction Contracts, the other Operative Agreements, or the Property or the
proposed conveyance of the Property or any part thereof at the request of Agent;
(b) any latent or other defects in the Property or otherwise whether or not
discoverable by such Indemnified Person or Agent; (c) this Agreement, the
Construction Contracts, the other Operative Agreements, and any transaction
contemplated thereby; (d) any breach by Agent of any of its representations,
warranties or covenants under this Agreement or failure by Agent to perform or
observe any covenant or agreement to be performed by it under this Agreement;
(e) personal injury, death or property damage relating to the Property,
including Claims based on strict liability in tort; (f) the performance of any
labor or services or the furnishing of materials or other property in respect of
the Property, including any Claims of any nature by employees of the Agent or
the Contractors; (g) the Operative Agreements, or any transaction contemplated
thereby, including the enforcement of any rights, terms or provisions thereof,
any amendments or supplements thereto or any transaction contemplated thereby or
liability in tort (strict or otherwise); and (h) Claims made against Owner Trust
pursuant to Article XIII of this Agreement, Section 8.02 of the Trust Agreement
or Section 14 of the Intercreditor Agreement. Agent acknowledges and agrees in
this
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Construction Agency Agreement
connection that the Property is in its control and possession during the Term,
that it is responsible as agent for Owner Trust for the acts and omissions of
the Contractors and any other agents retained by Agent and that it has agreed to
maintain, or cause to be maintained, the Facility so as to avoid injury or
mishap to third Persons.
12.2 Agent's Environmental Indemnity. Without limitation of
any other provisions of this Agreement, Agent hereby agrees to indemnify, hold
harmless and defend each Indemnified Person on an After Tax Basis from and
against any and all Claims (including third party Claims for personal injury or
real or personal property damage), losses (including, to the extent of the
Payments plus accrued Financing Costs and Owner Trust Yield and Transaction
Expenses, any loss of Value of the Facility or the Property), damages,
Environmental Actions, administrative and judicial proceedings (including
informal proceedings) and orders, judgments, remedial action, legally
enforceable requirements and enforcement actions, and all reasonable and
documented costs and expenses incurred in connection therewith (including
reasonable and documented legal and consultant fees and expenses), including all
costs incurred in connection with any investigation or monitoring of site
conditions or any clean-up, remedial, removal or restoration work by any
Governmental Authority, arising in whole or in part, out of any of the
following:
(a) the presence, as of the Closing Date, on or under
the Facility or the Property of any Hazardous Condition or Hazardous
Substance, or any Releases or discharges of any Hazardous Substance
on, under, from or onto the Facility or the Property;
(b) any activity, including construction, carried on or
undertaken on or off the Facility or the Property, and whether by
Agent, any Affiliate of Agent or any predecessor in title or any
employees, agents, contractors or subcontractors of Agent, any
Affiliate of Agent or any predecessor in title, in connection with
the handling, treatment, removal, storage, decontamination,
clean-up, transport or disposal of any Hazardous Substance or
Hazardous Condition that at any time is located or present on or
under or that migrate, flow, percolate, diffuse or in any way move
under or from the Facility or the Property;
(c) loss of or damage to the Facility or the Property or
the environment (including, clean-up costs, response costs,
remediation and removal costs, costs of corrective action, costs of
financial assurance, fines and penalties and natural resource
damages), or death or injury to any Person, and all documented
expenses associated with the protection of wildlife, aquatic
species, vegetation, flora and fauna, and any mitigative action
required by or under Environmental Laws;
(d) any Environmental Violation or any Claim concerning
any Environmental Violation, or any Environmental Action, or any act
or failure by Agent to
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Construction Agency Agreement
act that would allow any Governmental Authority to record a Lien on
the Facility or the Property; or
(e) any residual contamination on or under the Facility
or the Property or any site related to the Facility or the Property,
or affecting any natural resources or the environment, and any
contamination of the Facility, the Property, or any site or natural
resources or the environment arising in connection with the
generation, use, handling, treatment, storage, transport or disposal
of any Hazardous Substance, and irrespective of whether any of such
activities were or will be undertaken in accordance with Applicable
Laws;
provided, however, that in the case of clauses (b) - (e), inclusive, to the
extent any event or condition described therein is related to the construction
of the Facility, Agent shall be obligated to indemnify the Indemnified Person in
respect thereof only to the extent such event or condition resulted from the
acts of Agent or failure by Agent to act.
12.3 Agent's General Tax Indemnity.
(a) Payments Free and Clear. All payments made to or for
the benefit of the Owner Trust under the Operative Agreements (including
payments of any Financing Cost, Owner Trust Yield fees and the purchase price
payable on the exercise of the Purchase Option) shall be made free and clear of
and without deduction for any and all present or future Impositions. If the
Agent, the Owner Trust, the Owner Trustee, the Guarantor or any other Person
("Applicable Payor") shall be required by law to deduct any Impositions from or
in respect of any amounts payable under this Agreement or any other Operative
Agreement to or for the benefit of a Lender, Lender Agent, Certificate
Participant, Owner Trust Parent, the Owner Trust or the Trustee thereof
("Applicable Payee"), (A) the amounts payable by the Applicable Payor (as rent,
interest or otherwise) shall be increased by the amount necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 12.3) the Applicable Payee shall receive an
amount equal to the sum it would have received had no such deductions been made,
(B) the Applicable Payor shall make such deductions and (C) the Applicable Payor
shall pay the full amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with all applicable laws. The Agent will
indemnify each Indemnified Person on an After Tax Basis for the full amount of
any sums paid by such Indemnified Person pursuant to the second sentence of this
Section 12.3(a) and any liability such Indemnified Person may incur or be
required to pay.
(b) Other Taxes. In addition, the Agent shall timely pay
any present or future transfer, stamp, value added, goods and services, license,
sales, use or documentary Taxes, excise Taxes or any other property, transfer,
transfer gains or recording, publication or filing Taxes, or any other Taxes in
the nature of the foregoing imposed by any Governmental Authority, which arise
directly or indirectly from (i) the acquisition, ownership, operation,
occupancy, possession, use, non-use, mortgaging, financing, leasing, subleasing,
or disposition
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or condition of the Property or any other property or rights conveyed to the
Owner Trustee or the Owner Trust; (ii) any payment made under the Operative
Agreements; (iii) the execution, delivery or registration of, or otherwise with
respect to the Operative Agreements; (iv) the conveyance or transfer of the
Owner Trust, the Owner Trust Parent, the Trust Estate, the Property or any part
thereof (or any portion thereof) in compliance with any requirement of the
Operative Agreements; (v) the recording of any mortgage, deed of trust,
financing statement or other collateral security document in any jurisdiction;
or (vi) the transactions contemplated by any of the Operative Agreements
(collectively, the "Other Taxes").
(c) Indemnification. To the extent Impositions and Other
Taxes result from actions by Agent or failures by Agent to act (but excluding
any Impositions and Other Taxes arising as a result of Agent's acts or failures
by Agent to act which are related to Completion), Agent shall indemnify, defend
and hold harmless all Indemnified Persons from and against the full amount of
all Impositions and Other Taxes (including, current or future stamp, intangible,
document or other Taxes that arise from the execution, delivery, recording, or
registration of this Agreement or any other agreement contemplated hereby) on an
After Tax Basis except those arising from the gross negligence or willful
misconduct of such Indemnified Person incurred in connection with the
transactions contemplated by this Agreement, the Construction Contracts, and any
other Operative Agreement (but without duplication for any amount payable
elsewhere under this Agreement or under any other Operative Agreement to the
extent actually paid) required to be paid by such Indemnified Person on its
behalf or on behalf of any other Person, and any liability (including penalties,
interest and expenses, except those arising from the gross negligence or willful
misconduct of such Indemnified Person; provided, that, solely for purposes of
this parenthetical, gross negligence or willful misconduct shall include the
failure by such Indemnified Person to provide written notice to Agent of any
written notice from any Governmental Authority received by such Indemnified
Person for any Impositions or Other Taxes as to which the Agent may have an
indemnity obligation pursuant to this Section 12.3 within 90 days after such
Indemnified Person shall have Actual Knowledge of such written notice, but only
to the extent the Agent shall have actually been prejudiced as a result of such
failure), arising therefrom or with respect thereto (including from any
obligation to file any Tax return, report or statement with respect to any such
Impositions or Other Taxes and any liability the Indemnified Person may incur or
be required to pay pursuant to Section 13.3), whether or not such Impositions or
Other Taxes were correctly or legally asserted.
(d) Impositions shall mean any and all liabilities,
losses, expenses and costs of any kind whatsoever for fees, taxes, levies,
imposts, duties, charges, impositions, assessments or withholdings of any kind
or nature whatsoever, general and special, ordinary and extraordinary, foreseen
and unforeseen, of every character imposed or assessed by a Governmental
Authority and any penalties, interest, and additions to tax (including inflation
adjustments imposed thereon that are similar to interest or penalties) of any
kind therewith ("Taxes"), excluding (except for Taxes that apply as a
consequence of the transactions contemplated by this Agreement not being treated
as a loan for Tax purposes by any Governmental Authority, but only to the extent
the amount of such Taxes exceed the amount of
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Taxes that would have been imposed had such Governmental Authority treated the
transactions contemplated by this Agreement as a loan for Tax purposes), (i)
Taxes imposed on, or based upon, or measured by, an Indemnified Person's or
Lessor Indemnified Person's (other than Owner Trust's or Owner Trust Parent's)
overall net income, net receipts, capital, or net worth (A) by the jurisdiction
under the laws of which such Person is organized (or in the case of an
Indemnified Person or Lessor Indemnified Person that is a bank, by the
jurisdiction in which such Person's office is located from which it funds the
Payments) or (B) by a jurisdiction in which such Person has a tax residence,
place of business, place of management or control, a permanent establishment, or
by a jurisdiction in which such Person would otherwise be subject to such Tax
apart from the transactions contemplated by this Agreement; (ii) Taxes in the
nature of franchise, capital gains, accumulated earnings, personal holding
company, excess profits, or alternative minimum Taxes imposed on an Indemnified
Person or Lessor Indemnified Person (other than Owner Trust or Owner Trust
Parent), (A) by the jurisdiction under the laws of which such Person is
organized (or in the case of an Indemnified Person or Lessor Indemnified Person
that is a bank, by the jurisdiction in which such Person's office is located
from which it funds the Payments) or (B) by a jurisdiction in which such Person
has a tax residence, place of business, place of management or control, a
permanent establishment, or by a jurisdiction in which such Person would
otherwise be subject to such Tax apart from the transactions contemplated by
this Agreement; (iii) Taxes included in the Outstanding Balance to the extent
actually paid; (iv) any Taxes imposed by the United States of America by means
of withholding at the source if and to the extent that such Taxes would be
avoided if such Person provided the Prescribed Forms in accordance with this
Section 12.3 or Section 13.3 except to the extent attributable to a change in
applicable law after the Closing Date; (v) Taxes resulting from the fraud, gross
negligence or willful misconduct of the Indemnified Person, the Lessor
Indemnified Person or its Affiliates or agents (it being expressly agreed that
Agent and its Affiliates shall not constitute an agent of any Indemnified Person
or Lessor Indemnified Person (including Owner Trust and Owner Trust Parent) for
this purpose); (vi) Taxes imposed on the Indemnified Person or Lessor
Indemnified Person as a result of an inaccuracy or breach of a representation,
warranty, or covenant of such Indemnified Person or Lessor Indemnified Person or
its Affiliates (including, a covenant in Section 15.1) or which is imposed on
the Indemnified Person or Lessor Indemnified Person as a result of acts by such
Person (or an Affiliate of such Person) that is expressly prohibited by this
Agreement or by another Operative Agreement, except to the extent such breach is
caused by Agent's actions (or failure to act); (vii) Taxes arising out of, or
caused by, any voluntary assignment, sale, transfer, or other voluntary transfer
or disposition of the Property, Facility, or any interest therein (it being
understood that any transfer or disposition as a result of the exercise of the
Purchase Option or Lease Option or the applicability of the Remarketing
Requirement or at the request of Agent or one of its Affiliates or consented to
by Agent or one of its Affiliates or while an Agent Event of Default shall have
occurred and is continuing shall not be a voluntary transfer) by such
Indemnified Person or Lessor Indemnified Person or any involuntary transfer or
disposition of the Property, the Facility, or an interest therein by such
Indemnified Person or Lessor Indemnified Person resulting from a bankruptcy or
similar proceeding in which such Indemnified Person or Lessor Indemnified Person
is a debtor or by foreclosure by a creditor of
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an Indemnified Person or Lessor Indemnified Person; provided, however, that the
foregoing exclusion shall not apply to any transfer that results from a
bankruptcy of Owner Trust or Owner Trust Parent or a foreclosure against Owner
Trust or Owner Trust Parent if the bankruptcy or foreclosure would not have
occurred if Agent and its Affiliates had performed all obligations under this
Agreement or any other Operative Agreement or if the bankruptcy or foreclosure
would not have occurred if all of Agent's representations or warranties in all
Operative Agreements were accurate in all respects or if such bankruptcy of
Owner Trust or Owner Trust Parent or foreclosure against Owner Trust or Owner
Trust Parent occurred while an Agent Event of Default has occurred and is
continuing; (viii) Taxes arising in connection with an Owner Trust Lien; (ix)
Taxes imposed on any assignee or successor in interest to an Indemnified Person
or Lessor Indemnified Person (including any successor or assignee by way of
merger, consolidation, liquidation, reorganization, or otherwise by operation of
law) to the extent any such Taxes exceed the Taxes that would have been imposed
had no assignment or transfer taken place determined under the law in effect on
the date of transfer, except if Agent or one of its Affiliates requests such
transfer or the transfer is required pursuant to the terms of an Operative
Agreement or the transfer occurs while an Agent Event of Default shall have
occurred and is continuing; (x) Taxes imposed on, based on, or measured by any
compensation the applicable Trustee receives for its services; (xi) Taxes
imposed on any Indemnified Person or Lessor Indemnified Person resulting from
any amendment, modification, supplement, or written waiver to any Operative
Agreement which was not requested or consented to by the Agent or one of its
Affiliates, unless such amendment, modification, supplement, or written waiver
(A) was required by Applicable Law or an Operative Agreement, (B) may be
necessary or appropriate to, or is in conformity with, any amendment,
modification, supplement, or written waiver requested by, or consented to, by
Agent or one of its Affiliates, or (C) is made while an Agent Event of Default
shall have occurred and be continuing; (xii) Taxes in the nature of a
value-added Tax that is imposed in lieu of an income Tax otherwise excluded from
the definition of Impositions; (xiii) Taxes that would not have been imposed on
an Indemnified Person or Lessor Indemnified Person (other than Owner Trust or
Owner Trust Parent) but for its activities in such jurisdiction unrelated to the
transactions contemplated by this Agreement; and (xiv) Taxes imposed
attributable to any period after the expiration or early termination of this
Agreement, or if later, where required by this Agreement, surrender to Owner
Trust or its successor of the Facility in compliance with the provisions of this
Agreement. It being expressly agreed that any Tax constituting an Imposition
(whether income, franchise, or otherwise) imposed on Owner Trust or Owner Trust
Parent as a result of any of the transactions or payments contemplated by the
Operative Agreements to which Agent is a party is subject to indemnification
under Section 12.3(c) or 13.3(c) as applicable.
(e) Payments. Each payment required to be made by the
Agent pursuant to this Section 12.3 shall be paid either (i) when due directly
to the applicable taxing authority by the Agent if it is permitted to do so, or
(ii) where direct payment is not permitted and with respect to gross up amounts,
in immediately available funds to such Indemnified Person by the later of (A) 30
days following the Agent's receipt of the Indemnified Person's written
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demand for the payment (which demand shall be accompanied by a statement of the
Indemnified Person describing in reasonable detail the Taxes for which the
Indemnified Person is demanding indemnity and the computation of such Taxes) and
certifying that such costs are being charged to other similarly situated
borrowers under similar financing arrangements or (B) subject to paragraph (k)
below, in the case of amounts which are being contested pursuant to such
paragraph (k), at the time and in accordance with a final determination of such
contest, provided, however, that with respect to a payment pursuant to Section
12.3(k)(ii)(D), in no event later than the date which is three Business Days
prior to the date on which such Taxes are required to be paid to the applicable
taxing authority. An Indemnified Person shall use reasonable best efforts to
deliver any such demand within thirty (30) days after such Indemnified Person
has Actual Knowledge that such payment is required; provided, that failure to
deliver such demand within thirty (30) days shall not alter such Indemnified
Person's rights under this Section 12.3.
(f) Prescribed Forms. Each Certificate Participant shall
deliver to Agent, on or before the Closing Date, copies of all Prescribed Forms.
Thereafter and from time to time, each Certificate Participant shall submit to
Agent such additional duly completed and signed copies of the Prescribed Forms
(or such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may be (i) requested by Agent, and (ii)
required under then-current United States law or regulations to avoid United
States withholding taxes on payments in respect of all amounts to be received by
such Certificate Participant or its Affiliates pursuant to this Agreement or the
other Operative Agreements, including fees. If any Certificate Participant
determines, as a result of any change in applicable law, regulation or treaty,
or in any official application or interpretation thereof, that it is unable to
submit to Agent any form or certificate that such Certificate Participant is
obligated to submit pursuant to this Section 12.3, or that such Certificate
Participant is required to withdraw or cancel any such form or certificate
previously submitted, such Certificate Participant shall promptly notify Agent
of such fact.
(g) Reports. If any report, return, or statement is
required to be filed with respect to Taxes that are subject to indemnification
under Section 12.3 or 12.4, Agent shall, if permitted by Applicable Law, timely
prepare and file such report, return, or statement; provided, however, if Agent
is not permitted by Applicable Law to file such return, Agent shall promptly
notify the appropriate Person, in which case the Person, at Agent's expense,
will file any return after Agent properly prepares such return.
(h) Restructuring. If Agent is liable (or appears, in
Agent's reasonable belief, that it will be liable) for any Imposition under
Section 12.3 or 12.4 hereof or 13.3 or 13.4 hereof, Owner Trust, Owner Trust
Parent and the Certificate Participants agree to cooperate with Agent to take
all reasonable actions which are necessary or appropriate to restructure the
transactions contemplated hereby in any reasonable manner requested by Agent to
avoid or minimize Agent's indemnification obligations hereunder; provided,
however, Owner Trust, Owner Trust Parent and the Certificate Participants shall
not be required to take any action that results in any Tax, cost or other
expense to such Person (or any of its Affiliates) or which, in
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such Person's reasonable belief, would have an adverse effect on such Person's
(or any of its Affiliate's) rights under this Agreement or another Operative
Agreement or to its business or, in such Person's reasonable belief, would cause
such Person (or one of its Affiliates) to violate any Applicable Law.
(i) Receipt. Within thirty (30) days after the date of
any deduction of any Impositions, the Applicable Payor shall furnish to the
Applicable Payee, Lender Agent, the Owner Trust and the Trustee thereof the
original or a certified copy of a receipt or other documentation evidencing
payment thereof.
(j) Determinations. The determination of all Impositions
to be paid or indemnified against by the Agent under this Section 12.3 on an
After Tax Basis shall be made (in good faith) by the affected Applicable Payee.
Such determination shall state with reasonable clarity and detail the basis for
such determination, shall certify that such costs are being charged to other
similarly situated borrowers under similar financing arrangements and shall,
absent manifest error, be final and conclusive and binding on the Agent. In no
event shall the Agent in connection with this Section 12.3 or for any other
purpose whatsoever under any Operative Agreement have any right to examine any
Tax return or related books and records of any Applicable Payee.
(k) Contests. (i) If any written claim shall be made
against any Indemnified Person or if any proceeding shall be commenced against
any Indemnified Person (including a written notice of such proceeding)
(collectively a "Tax Claim") for any Tax as to which the Agent may have an
indemnity obligation pursuant to this Section 12.3, such Indemnified Person
shall as soon as practicable after its receipt or commencement, and in any event
within thirty (30) days notify the Agent in writing and furnish the Agent with
copies of such Tax Claim and all other writings received from the taxing
authority to the extent relating to such Tax Claim (provided, that failure to so
notify the Agent within thirty (30) days shall not alter such Indemnified
Person's rights under this Section 12.3 except to the extent such failure
precludes or materially adversely affects the ability to conduct a contest of
any Tax Claim) and shall not take any action with respect to such Tax Claim
without the written consent of the Agent (such consent not to be unreasonably
withheld or unreasonably delayed) for thirty (30) days after the receipt of such
notice by the Agent; provided, however, that in the case of any such Tax Claim,
if such Indemnified Person shall be required by law or regulation to take action
prior to the end of such 30-day period, such Indemnified Person shall in such
notice to the Agent, so inform the Agent, and such Indemnified Person shall not
take any action with respect to such Tax Claim without the consent of the Agent
(such consent not to be unreasonably withheld or unreasonably delayed) for ten
(10) days after the receipt of such notice by the Agent unless the Indemnified
Person shall be required by law or regulation to take action prior to the end of
such 10-day period.
(ii) The Agent shall be entitled for a period of thirty
(30) days from receipt of such notice from the Indemnified Person (or such
shorter period reasonably specified
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by the Indemnified Person as the Indemnified Person has notified the Agent is
required by law or regulation for such Indemnified Person to commence such
contest of such Tax Claim), to request in writing that such Indemnified Person
contest the imposition of such Tax, at the Agent's sole cost and expense and the
Indemnified Person shall not pay such Tax Claim during such period. If (x) such
Tax Claim can be pursued in the name of the Agent and independently from any
other proceeding involving a Tax liability of such Indemnified Person for which
the Agent has not agreed to indemnify such Indemnified Person, (y) such Tax
Claim must be pursued in the name of the Indemnified Person, but can be pursued
independently from any other proceeding involving a Tax liability of such
Indemnified Person for which the Agent has not agreed to indemnify such
Indemnified Person or (z) the Indemnified Person so requests, then the Agent
shall be permitted to control the contest of such Tax Claim; provided, that in
the case of a Tax Claim described in clause (y), if the Indemnified Person
reasonably determines that the contest of such Tax Claim by the Agent could have
an adverse impact on the business or operations of the Indemnified Person, such
Indemnified Person may elect to control or reassert control of the Tax Claim,
and provided, that by taking control of the Tax Claim, Agent acknowledges that
it is responsible for the Tax ultimately determined to be due by reason of such
claim. In all other claims requested to be contested by the Agent, such
Indemnified Person shall control the contest of such Tax Claim. In no event
shall the Agent be permitted to contest (or the Indemnified Person be required
to contest) any Tax Claim (A) if such Indemnified Person provides the Agent with
a legal opinion of counsel reasonably acceptable to the Agent that such action,
suit or proceeding involves a risk of imposition of criminal liability or could
involve a material risk of the sale, forfeiture or loss of, or the creation of
any Lien (other than a Permitted Lien) on any Property or any part of any
thereof unless the Agent shall have posted and maintained a bond or other
security satisfactory to the relevant Indemnified Person in respect to such
risk, (B) if an Event of Default has occurred and is continuing unless the Agent
shall have posted and maintained by a bond or other security satisfactory to the
relevant Indemnified Person in respect of the Taxes subject to such Tax Claim
and any and all expenses for which the Agent is responsible hereunder reasonably
foreseeable in connection with the contest of such Tax Claim, (C) unless the
Agent shall have agreed to pay and shall pay, to such Indemnified Person on
demand all reasonable out-of-pocket costs, losses and expenses that such
Indemnified Person may incur in connection with contesting such Tax Claim
including all reasonable legal, accounting and investigatory fees and
disbursements, or (D) if such contest shall involve the payment of the Tax prior
to the contest, unless the Agent shall provide to the Indemnified Person an
interest-free advance in an amount equal to the Tax that the Indemnified Person
is required to pay (with no additional net after-tax costs to such Indemnified
Person) (a "Tax Advance"). In addition for Indemnified Person controlled Tax
Claims and Tax Claims contested in the name of such Indemnified Person in a
public forum, no contest shall be required (A) unless the amount of the
potential indemnity (taking into account all similar or logically related Tax
Claims that have been or could be raised in any audit involving such Indemnified
Person with respect to any period for which the Agent may be liable to pay an
indemnity under this Section 12.3) exceeds $50,000 and (B) unless, if requested
by such Indemnified Person, the Agent shall have provided to such Indemnified
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Person an opinion of independent tax counsel selected by such Indemnified Person
and reasonably acceptable to the Agent that a reasonable basis exists to contest
such Tax Claim. In no event shall an Indemnified Person be required to appeal an
adverse judicial determination to the United States Supreme Court.
(iii) The party conducting the Tax Claim shall consult
in good faith with the other party and its counsel with respect to the contest
of such Tax Claim for Taxes (or claim for refund) but the decisions regarding
what actions are to be taken shall be made by the controlling party in its sole
judgment; provided, however, that if the Indemnified Person is the controlling
party and the Agent recommends the acceptance of a settlement offer made by the
relevant Governmental Authority and such Indemnified Person rejects such
settlement offer, then the amount for which the Agent will be required to
indemnify such Indemnified Person with respect to the Taxes subject to such
offer shall not exceed the amount which it would have owed if such settlement
offer had been accepted. In addition, the controlling party shall keep the
noncontrolling party and its designated counsel reasonably informed as to the
progress of the Tax Claim, and shall provide the noncontrolling party and its
designated counsel with a copy of (or appropriate excerpts from) any reports or
claims issued by the relevant auditing agents or taxing authority to the
controlling party thereof, in connection with such Tax Claim or the contest
thereof.
(iv) Each Indemnified Person shall, at the Agent's sole
cost and expense, supply the Agent with such information and documents
reasonably requested by the Agent as are necessary or advisable for the Agent to
participate in any action, suit or proceeding to the extent permitted by this
Section 12.3(k); provided, however, that such Indemnified Person shall not be
required to provide to the Agent copies of its tax returns or any other
information, documentation or materials that it deems to be confidential or
proprietary. No Indemnified Person shall enter into any settlement or other
compromise or fail to appeal an adverse ruling with respect to any Tax Claim
which is entitled to be indemnified under this Section 12.3 (and with respect to
which a contest is required under this Section 12.3) without the prior written
consent of the Agent, unless such Indemnified Person waives its right to be
indemnified under this Section 12.3 with respect to such Tax Claim.
(v) Notwithstanding anything contained herein to the
contrary, an Indemnified Person will not be required to contest (and the Agent
shall not be permitted to contest) a Tax Claim with respect to the imposition of
any Tax if such Indemnified Person shall waive its right to indemnification
under this Section 12.3 with respect to such Tax Claim (and any Tax Claim with
respect to such year or any other taxable year the contest of which is
materially adversely affected as a result of such waiver) and shall promptly
repay to the Agent any Tax Advance paid to such Indemnified Person in respect of
such Taxes.
(l) Refunds. To the extent that any Indemnified Person
has actually and finally received a refund of any Impositions or Other Taxes
(including interest) that can be clearly identified as specifically relating to
Impositions or Other Taxes paid or reimbursed by the Agent pursuant to this
Section 12.3 and that, after taking into account the amount of such refund,
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would result in the total payments under this Section 12.3 exceeding the amount
due to such Indemnified Person from Agent under Section 12.3, such Indemnified
Person shall pay to the Agent, with reasonable promptness following the date on
which it actually receives such refund, an amount equal to the lesser of the
amount of such refund or the amount of such excess, in each case net of all
reasonable out-of-pocket expenses incurred by such Indemnified Person in
securing such refund.
12.4 Agent's Special Tax Indemnity. To the extent any Tax
results from actions by Agent, or failures by Agent to act (provided that
indemnification hereunder with respect to any Tax arising as a result of Agent's
acts or failures by Agent to act which are related to Completion shall be paid
solely through payments in accordance with Article V hereof), Agent shall pay
and assume all liability for and does hereby agree to, indemnify, defend and
hold harmless any Indemnified Person on an After Tax Basis (but without
duplication for any amount payable elsewhere under this Agreement or under any
other Operative Agreement to the extent actually paid) from and against (a) any
Tax or other cost resulting from the breach, inaccuracy or incorrectness of the
representation found in Section 7.1(o), (b) any Taxes that have to be paid by
Owner Trust under Section 4.1(b) of the Credit Agreement; and (c) any Taxes that
would have to be indemnified by Owner Trust under Article XIII hereof. Any Taxes
subject to indemnification hereunder shall be reimbursed in accordance with the
provisions of Section 12.3(e).
12.5 Additional Costs. Agent agrees to pay any Additional
Costs that are due and payable pursuant to the Credit Agreement and the Master
Trust Agreement; provided, that except to the extent that such additional costs
arise by reason of Agent's act or failure to act unrelated to Completion,
Agent's obligations hereunder shall be satisfied solely from the proceeds of
Payments.
12.6 Agent's Indemnity Exclusions. Any Claim, to the extent
resulting from or arising out of or attributable to any of the following, is
excluded from Agent's agreement to indemnify any Indemnified Person under this
Article XII other than Sections 12.3 and 12.4:
(a) acts, omissions or events occurring after the
expiration or early termination of this Agreement and, if later,
where required by this Agreement; surrender to Owner Trust or its
successor of the Facility in compliance with the provisions of this
Agreement;
(b) with respect to the relevant Indemnified Person, any
offer, sale, assignment, transfer or other disposition (voluntary or
involuntary) by or on behalf of (A) Owner Trust Parent of its
interest in Owner Trust, or (B) Owner Trust of all or any of its
interest in the Facility, (C) the Lenders of any of their interests
in the Loans, or (D) the Certificate Participants of any of their
beneficial interest of Owner Trust Parent, unless such offer, sale,
assignment, transfer or other disposition is required by or
otherwise made in compliance with the terms of the Operative
Agreements or occurs in connection with the exercise of remedies
during an Agent Event of Default;
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(c) the gross negligence or willful misconduct of an
Indemnified Person seeking indemnification;
(d) the noncompliance with the terms of the Operative
Agreements by, or the breach of any agreement, covenant,
representation or warranty contained in any Operative Agreement to
which it is a party of, the Indemnified Person seeking
indemnification to the extent such noncompliance or breach has been
finally determined by a court of competent jurisdiction;
(e) any obligation or liability expressly borne, assumed
or to be paid in any Operative Agreement by the Indemnified Person
seeking indemnification; provided, however, that such exclusion
shall not apply to any indemnity obligations of Lessor expressly
undertaken under the Operative Agreements;
(f) with respect to the Indemnified Person seeking
indemnification, any claim constituting or arising from an Owner
Trust's Lien attributable to such Indemnified Person (other than
these Liens arising or created as a result of action undertaken or
documents or instruments executed by Owner Trust pursuant to the
request of Agent or in connection with an Agent Event of Default or
a Guarantor Event of Default); provided, however, that this
exception shall not apply with respect to Owner Trust obligations
under Article XIII of this Agreement;
(g) any amendment other than an amendment to which Agent
or Guarantor is a party or has been expressly requested by Agent or
Guarantor in writing or which occurs in connection with any Agent
Event of Default or Owner Trust Termination Event;
(h) any Claim that constitutes principal or interest on
the Loans or Owner Trust Yield as opposed to amounts payable by
Agent which are calculated based thereon;
(i) any Claim resulting from any event of default not
caused by an Agent Event of Default; and
(j) any misdirection or misapplication of funds by any
Secured Party.
12.7 Agent's Indemnification Procedure under Sections 12.1 and
12.2. Each Indemnified Person under Section 12.1 or 12.2 shall promptly after
such Indemnified Person shall have actual knowledge thereof notify Agent in
writing of any Claim as to which indemnification is sought; provided, that the
failure so to notify Agent shall not reduce or affect Agent's liability which it
may have to such Indemnified Person under Section 12.1 or 12.2. Any amount
payable to any Indemnified Person pursuant to Section 12.1 or 12.2 shall be paid
within ten (10) Business Days after receipt of such written demand therefor from
such Indemnified
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Person, accompanied by a certificate of such Indemnified Person setting forth
the calculations in reasonable detail constituting the basis for the
indemnification thereby sought and (if such Indemnified Person is not a party
hereto) an agreement to be bound by the terms hereof as if such Indemnified
Person were such a party. Promptly after Agent receives notification of such
Claim accompanied by such certificate, Agent shall notify such Indemnified
Person whether it intends to pay, object to, compromise or defend any matter
involving the asserted liability of such Indemnified Person. Agent shall have
the right to investigate and so long as no Agent Event of Default shall have
occurred and be continuing, Agent shall have the right in its sole discretion to
defend or compromise any Claim for which indemnification is sought under Section
12.1 or 12.2, provided, further, that no Claim shall be compromised by Agent if
there is (i) an admission of guilt, complicity or culpability or any criminal
violation or gross negligence or willful misconduct on the part of such
Indemnified Person or (ii) an incurrence of any payment obligation or other
civil or criminal liability on the part of any Indemnified Person (unless with
respect to a payment obligation it is paid by Agent) without the express written
consent of such Indemnified Person. If Agent elects, subject to the foregoing,
to compromise or defend any such asserted liability, it may do so at its own
expense and by counsel selected by it and reasonably satisfactory to such
Indemnified Person. Upon Agent's election to compromise or defend such asserted
liability and prompt notification to such Indemnified Person or its intent to do
so, such Indemnified Person shall cooperate at Agent's expense with all
reasonable requests of Agent in connection therewith to minimize the amount of
such Claim and the cost and expense to Agent of such compromise or defense
(provided that such Indemnified Person shall not suffer any material economic,
legal or regulatory disadvantage as a result of such cooperation) and will
provide Agent with all information not within the control of Agent as is
reasonably available to such Indemnified Person which Agent may reasonably
request; provided, however, that such Indemnified Person shall not, unless
otherwise agreed or required by Applicable Law, be obligated to disclose to
Agent or any other Person, or permit Agent or any other Person to examine (a)
any tax returns or related books and records of the Certificate Participants or
Owner Trust, or (b) any confidential information or pricing information not
generally accessible by the public possessed by Certificate Participants or
Owner Trust (and, in the event that any such information is made available,
Agent shall treat such information as confidential and shall take all actions
reasonably requested by such Indemnified Person for purposes of obtaining a
stipulation from all parties to the related proceeding providing for the
confidential treatment of such information from all such parties). Where Agent,
or the insurers under a policy of insurance maintained by Agent, undertake the
defense of such Indemnified Person with respect to a Claim (with counsel
reasonably satisfactory to such Indemnified Person and without reservation of
rights against such Indemnified Person), no additional legal fees or expenses of
such Indemnified Person in connection with the defense of such Claim shall be
indemnified hereunder unless such fees or expenses were incurred at the request
of the Agent or such insurers. Notwithstanding the foregoing, an Indemnified
Person may participate at its own expense in any judicial proceeding controlled
by Agent pursuant to the preceding provisions, but only to the extent that such
party's participation does not in the reasonable opinion of counsel to Agent
interfere with such control; provided, however, that such party's participation
does not
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constitute a waiver of the indemnification provided in Section 12.1 or 12.2;
provided, further, that if and to the extent that such Indemnified Person is
advised by counsel that an actual or potential conflict of interest exists where
it is advisable for such Indemnified Person to retain separate counsel or such
Indemnified Person may be indicted or otherwise charged in a criminal complaint
and such Indemnified Person informs Agent that such Indemnified Person desires
to be represented by separate counsel, such Indemnified Person shall have the
right to control its own defense of such Claim and the reasonable fees and
expenses of such defense (including the reasonable fees and expenses of such
separate counsel) shall be borne by Agent. So long as no Agent Event of Default
shall have occurred and be continuing, no Indemnified Person shall enter into
any settlement or other compromise with respect to any Claim without the prior
written consent of Agent unless (x) the Indemnified Person waives its rights to
indemnification hereunder or (y) Agent has not acknowledged its indemnity
obligation with respect thereto and there is a significant risk that a default
judgment will be entered against such Indemnified Person. Nothing contained in
this Section 12.7 shall be deemed to require an Indemnified Person to Contest
any Claim or to assume responsibility for or control of any judicial proceeding
with respect thereto.
12.8 Agent's Subrogation. To the extent that a Claim
indemnified by Agent under this Article XII is in fact paid in full by Agent or
an insurer under an insurance policy maintained by Agent, Agent (so long as no
Agent Event of Default shall have occurred and be continuing) or such insurer
shall be subrogated to the rights and remedies of the Indemnified Person on
whose behalf such Claim was paid to the extent of such payment (other than
rights of such Indemnified Person under insurance policies maintained at its own
expense) with respect to the transaction or event giving rise to such Claim.
Should an Indemnified Person receive any refund, in whole or in part, with
respect to any Claim paid by Agent under Section 12.1 or 12.2 hereof, it shall
promptly pay over to Agent the lesser of (i) the amount refunded reduced by the
amount of any Tax incurred by reason of the receipt or accrual of such refund
and increased by the amount of any Tax (but not in excess of the amount of such
reduction) saved as a result of such payment or (ii) the amount Agent or any of
their insurers has paid in respect of such Claim.
12.9 Agent's Survival of Agent's Indemnification Obligations.
It is expressly understood and agreed that the indemnification obligations of
Agent provided for in this Article XII shall survive the expiration or
termination of, and shall be separate and independent from any remedy under,
this Agreement or any direct or indirect acquisition of the Property or the
Facility by Agent or a Designee; provided, that except in the case of a
termination as a result of the exercise of the Remarketing Requirement or the
Lease Option, such indemnification obligation shall no longer be subject to the
following limitation set forth in the lead-in of Sections 12.1, 12.3(c) and
12.4: "To the extent Claims/Impositions/Tax results from actions by Agent, or
failures by Agent to act (but excluding any Claim/Imposition/Tax arising as a
result of Agent's acts or failures by Agent to act which are related to
Completion)".
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ARTICLE XIII
OWNER TRUST'S INDEMNITIES
13.1 Owner's Trust's General Indemnification. Owner Trust
hereby assumes liability for and agrees to defend, indemnify and hold harmless
each Lessor Indemnified Person on an After Tax Basis from and against any and
all such Claims which may be imposed on, incurred by or asserted against such
Lessor Indemnified Person in any way relating to or arising or alleged to arise
out of (a) the proposed sale/purchase transaction with respect to its Property,
the funding of its Lease Indebtedness, the financing, refinancing, purchase,
acceptance, rejection, ownership, design, construction, delivery, acceptance,
nondelivery, acquisition, handling, installation, operation, transportation,
maintenance, testing, repair, leasing, subleasing, possession, use,
modification, condition, sale, return, repossession (whether by summary
proceedings or otherwise of its Property), or any other matter concerning this
Agreement, the Construction Contracts, the other Operative Agreements, the
Financing Documents, or its Property or the proposed conveyance of its Property
or any part thereof; (b) any latent or other defects in its Property or
otherwise whether or not discoverable by such Lessor Indemnified Person; (c)
this Agreement, the Construction Contracts, the other Operative Agreements, the
Financing Documents and any transaction contemplated thereby; (d) any breach by
Owner Trust of any of its representations, warranties or covenants under this
Agreement or failure by Owner Trust to perform or observe any covenant or
agreement to be performed by it under this Agreement; (e) personal injury, death
or property damage relating to its Property, including Claims based on strict
liability in tort; (f) the performance of any labor or services or the
furnishing of materials or other property in respect of its Property including
any Claims of any nature by employees of Owner Trust or its Contractors; and (g)
the Operative Agreements, the Financing Documents, or any transaction
contemplated by any thereof, including the enforcement of any rights, terms or
provisions thereof, any amendments or supplements thereto or any transaction
contemplated thereby or liability in tort (strict or otherwise).
13.2 Owner Trust's Environmental Indemnity. Without limitation
of any other provisions of this Agreement, Owner Trust hereby agrees to
indemnify, hold harmless and defend each Lessor Indemnified Person on an After
Tax Basis from and against any and all Claims (including third party Claims for
personal injury or real or personal property damage), losses (including any loss
of Value of the Facility or the Property), damages, Environmental Actions,
administrative and judicial proceedings (including informal proceedings) and
orders, judgments, remedial action, legally enforceable requirements and
enforcement actions, and all reasonable and documented costs and expenses
incurred in connection therewith (including reasonable and documented legal and
consultant fees and expenses), including all costs incurred in connection with
any investigation or monitoring of site conditions or any clean-up, remedial,
removal or restoration work by any Governmental Authority, arising in whole or
in part, out of any of the following:
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(a) the presence, as of the Closing Date, on or under
the Facility or the Property of any Hazardous Condition or Hazardous
Substance, or any Releases or discharges of any Hazardous Substance
on, under, from or onto the Facility or the Property;
(b) any activity, including construction, carried on or
undertaken on or off the Facility or the Property, and whether by
Owner Trust, any Affiliate of Owner Trust or any predecessor in
title or any employees, agents, contractors or subcontractors of
Owner Trust, any Affiliate of Owner Trust or any predecessor in
title, in connection with the handling, treatment, removal, storage,
decontamination, clean-up, transport or disposal of any Hazardous
Substance or Hazardous Condition that at any time is located or
present on or under the Facility or the Property;
(c) loss of or damage to the Facility or the Property or
the environment (including, clean-up costs, response costs,
remediation and removal costs, costs of corrective action, costs of
financial assurance, fines and penalties and natural resource
damages), or death or injury to any Person, and all documented
expenses associated with the protection of wildlife, aquatic
species, vegetation, flora and fauna, and any mitigative action
required by or under Environmental Laws;
(d) any Environmental Violation or any Claim concerning
any Environmental Violation, or any Environmental Action, or any act
or failure by Owner Trust to act that would allow any Governmental
Authority to record a Lien on the Facility or the Property; or
(e) any residual contamination on or under the Facility
or the Property or any site related to the Facility or the Property,
or affecting any natural resources or the environment, and any
contamination of the Facility, the Property, or any site or natural
resources or the environment arising in connection with the
generation, use, handling, treatment, storage, transport or disposal
of any Hazardous Substance, and irrespective of whether any of such
activities were or will be undertaken in accordance with Applicable
Laws.
13.3 Owner Trust's General Tax Indemnity.
(a) Payments Free and Clear. All payments made to or for
the benefit of the applicable Trustee, Owner Trust Parent, the Master Owner
Trustee, the Lenders, the Certificate Participants or the other Lessor
Indemnified Persons under the Operative Agreements (including payments of any
Financing Costs, Owner Trust Yield, fees and the purchase price payable on the
exercise of the Purchase Option) shall be made free and clear of and without
deduction for any and all present or future Impositions. If the Owner Trust, the
Borrower, the applicable Trustee or any other Person ("Applicable Payor") shall
be required by law to deduct any Impositions from or in respect of any amounts
payable under this Agreement or any other
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Operative Agreement to or for the benefit of a Lender, Lender Agent, Certificate
Participant, the applicable Trustee, Owner Trust Parent, the Master Owner
Trustee or the Owner Trust or the other Lessor Indemnified Persons ("Applicable
Payee"), (i) the amounts payable by the Applicable Payor (as rent, interest or
otherwise) shall be increased by the amount necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 13.3) the Applicable Payee shall receive an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Applicable Payor shall make such deductions and (iii) the Applicable Payor shall
pay the full amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with all applicable laws. The Owner Trust
will indemnify each Lessor Indemnified Person on an After Tax Basis for the full
amount of any sums paid by such Lessor Indemnified Person pursuant to the second
sentence of this Section 13.3(a) and any liability such Lessor Indemnified
Person may incur or be required to pay.
(b) [Intentionally Omitted.]
(c) Indemnification. Each Owner Trust shall indemnify,
defend and hold harmless all Lessor Indemnified Persons from and against the
full amount of all Impositions and Other Taxes (including current or future
stamp, intangible, document or other Taxes that arise from the execution,
delivery, recording or registration of this Agreement or any other agreement
contemplated hereby) on an After Tax Basis except those arising from the gross
negligence or willful misconduct of such Lessor Indemnified Person incurred in
connection with the transactions contemplated by this Agreement and any other
Operative Agreement (but without duplication for any amount payable elsewhere
under this Agreement or under any other Operative Agreement to the extent
actually paid) required to be paid by such Lessor Indemnified Person on its
behalf or on behalf of any other Person, and any liability (including penalties,
interest and expenses, except those arising from the gross negligence or willful
misconduct of such Lessor Indemnified Person; provided, that solely for purposes
of this parenthetical, gross negligence or willful misconduct shall include the
failure by such Lessor Indemnified Person to provide written notice to the Owner
Trust of any written notice from any Governmental Authority received by such
Lessor Indemnified Person for any Imposition or Other Taxes as to which the
Owner Trust may have an indemnity obligation pursuant to this Section 13.3
within ninety (90) days after such Lessor Indemnified Person shall have Actual
Knowledge of such written notice, but only to the extent the Owner Trust shall
have actually been prejudiced as a result of such failure), arising therefrom or
with respect thereto (including from any obligation to file any Tax return,
report or statement with respect to any such Impositions or Other Taxes and any
liability the Lessor Indemnified Person may incur or be required to pay pursuant
to Section 13.3 hereof) whether or not such Impositions or Other Taxes were
correctly or legally asserted.
(d) [Intentionally Omitted.]
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(e) Payments. Each payment required to be made by the
Owner Trust pursuant to this Section 13.3 shall be paid either (i) when due
directly to the applicable taxing authority by the Owner Trust if it is
permitted to do so, or (ii) where direct payment is not permitted and with
respect to gross up amounts, in immediately available funds to such Lessor
Indemnified Person by the later of (A) 30 days following the Owner Trust's
receipt of the Lessor Indemnified Person's written demand for the payment (which
demand shall be accompanied by a statement of the Lessor Indemnified Person
describing in reasonable detail the Taxes for which the Lessor Indemnified
Person is demanding indemnity and the computation of such Taxes) and certifying
that such costs are being charged to other similarly situated borrowers under
similar financing arrangements or (B) subject to paragraph (k) below, in the
case of amounts which are being contested pursuant to such paragraph (k), at the
time and in accordance with a final determination of such contest, provided,
however, that with respect to a payment pursuant to Section 12.3(ii)(D) (as
incorporated in Section 13.3(k)(ii), in no event later than the date which is
three Business Days prior to the date on which such Taxes are required to be
paid to the applicable taxing authority. A Lessor Indemnified Person shall use
reasonable best efforts to deliver any such demand within thirty (30) days after
such Lessor Indemnified Person has Actual Knowledge that such payment is
required; provided, that failure to deliver such demand within thirty (30) days
shall not alter such Lessor Indemnified Person's rights under this Section 13.3.
(f) Prescribed Forms. Each Lessor Indemnified Person
will deliver to the Owner Trust and the Agent on or before the Closing Date,
copies of all Prescribed Forms. Thereafter and from time to time, each such
Lessor Indemnified Person shall submit, or cause to be submitted, to Owner Trust
and the Agent such additional duly completed and signed copies of the Prescribed
Forms (or such successor forms as shall be adopted from time to time by the
relevant United States taxing authorities) as may be (i) requested by Owner
Trust or the Agent, and (ii) required under then-current United States law or
regulations to avoid United States withholding taxes on payments in respect of
all amounts to be received by such Lessor Indemnified Person pursuant to the
Operative Agreements, including fees. If such Lessor Indemnified Person
determines, as a result of any change in applicable law, regulation or treaty,
or in any official application or interpretation thereof, that it is unable to
submit to Owner Trust any form or certificate that such Lessor Indemnified
Person is obligated to submit pursuant to this Section 13.3, or that such Lessor
Indemnified Person is required to withdraw or cancel any such form or
certificate previously submitted, such Lessor Indemnified Person shall promptly
notify Owner Trust of such fact.
(g) Reports. If any report, return, or statement is
required to be filed with respect to Taxes that are subject to indemnification
under Section 13.3 or 13.4, Agent shall, if permitted by Applicable Law, timely
prepare and file such report, return, or statement; provided, however, if Agent
is not permitted by Applicable Law to file such return, Agent shall promptly
notify the appropriate Person, in which case the Person, at Agent's expense,
will file any return after Agent properly prepares such return.
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(h) Restructuring. If Owner Trust is liable (or appears,
in Owner Trust's or Agent's reasonable belief, that Owner Trust will be liable)
for any Imposition under Section 13.3 or 13.4 hereof, the applicable Owner
Trust, Owner Trust Parent and the Lenders agree to cooperate with Owner Trust
and Agent to take all reasonable actions which are necessary or appropriate to
restructure the transactions contemplated hereby in any reasonable manner
requested by Owner Trust and Agent to avoid or minimize Owner Trust's
indemnification obligations hereunder; provided, however, the applicable Owner
Trust, Owner Trust Parent and the Lenders shall not be required to take any
action that results in any Tax, cost or other expense to such Person (or any of
its Affiliates) or which, in such Person's reasonable belief, would have an
adverse effect on such Person's (or any of its Affiliate's) rights under this
Agreement or another Operative Agreement or to its business or, in such Person's
reasonable belief, would cause such Person (or one of its Affiliates) to violate
any Applicable Law.
(i) Receipt. Within thirty (30) days after the date of
any deduction of any Impositions, the Applicable Payor shall furnish to the
Applicable Payee and the Administrative Agent the original or a certified copy
of a receipt or other documentation evidencing payment thereof.
(j) Determinations. The determination of all Impositions
to be paid or indemnified against by the Owner Trust under this Section 13.3 on
an After Tax Basis shall be made (in good faith) by the affected Applicable
Payee. Such determination shall state with reasonable clarity and detail the
basis for such determination, shall certify that such costs are being charged to
other similarly situated borrowers under similar financing arrangements and
shall, absent manifest error, be final and conclusive and binding on the Owner
Trust. In no event shall the Owner Trust in connection with this Section 13.3 or
for any other purpose whatsoever under any Operative Agreement have any right to
examine any Tax return or related books and records of any Applicable Payee.
(k) Contests.
(i) If any Tax Claim shall be made against any Lessor
Indemnified Person for any Tax as to which the Owner Trust may
have an indemnity obligation pursuant to this Section 13.3,
such Lessor Indemnified Person shall as soon as practicable
after its receipt or commencement, and in any event within
thirty (30) days notify the Owner Trust and Agent in writing
and furnish the Owner Trust and Agent with copies of such Tax
Claim and all other writings received from the taxing
authority to the extent relating to such Tax Claim (provided,
that failure to so notify the Owner Trust and Agent within
thirty (30) days shall not alter such Lessor Indemnified
Person's rights under this Section 13.3 except to the extent
such failure precludes or materially adversely affects the
ability to conduct a contest of any Tax Claim) and shall not
take any action with respect to such Tax Claim without the
written consent of the Owner Trust and Agent (such consent not
to be unreasonably withheld or unreasonably delayed) for
thirty (30) days after the receipt of such notice by the Owner
Trust and Agent; provided, however, that in the case of any
such Tax Claim, if such Lessor Indemnified Person shall be
required by law or regulation to take action prior to the end
of such 30-day period, such Lessor Indemnified Person shall in
such notice to the Owner Trust and Agent, so inform the Owner
Trust and Agent, and such Lessor Indemnified Person shall not
take any action with respect to such Tax Claim without the
consent of the Owner Trust and Agent (such consent not to be
unreasonably withheld or unreasonably
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delayed) for ten (10) days after the receipt of such notice by
the Owner Trust and Agent unless the Lessor Indemnified Person
shall be required by law or regulation to take action prior to
the end of such 10-day period.
(ii) The Agent shall be entitled for a period of
thirty (30) days from receipt of such notice from the Lessor
Indemnified Person (or such shorter period reasonably
specified by the Lessor Indemnified Person as the Lessor
Indemnified Person has notified the Agent as required by law
or regulation for such Lessor Indemnified Person to commence
such contest of such Tax Claim), to request in writing that
such Lessor Indemnified Person contest the imposition of such
Tax, at the Agent's sole cost and expense and the Lessor
Indemnified Person shall not pay such Tax Claim during such
period. The provisions of Section 12.3(k) shall control the
conduct of any Tax Claim with all references in such Section
to "Indemnified Person" being deemed references to "Lessor
Indemnified Person."
(iii) Notwithstanding anything contained herein to
the contrary, a Lessor Indemnified Person will not be required
to contest (and the Agent shall not be permitted to contest) a
Tax Claim with respect to the imposition of any Tax if such
Lessor Indemnified Person shall waive its right to
indemnification under this Section 13.3 with respect to such
Tax Claim (and any Tax Claim with respect to such year or any
other taxable year the contest of which is materially
adversely affected as a result of such waiver and shall
promptly repay to the Agent any Tax Advances paid to such
Lessor Indemnified Person in respect of such Taxes).
(l) Refunds. To the extent that any Lessor Indemnified
Person has actually and finally received a refund of any Impositions or Other
Taxes (including interest) that can be clearly identified as specifically
relating to Impositions or Other Taxes paid or reimbursed by the Owner Trust
pursuant to this Section 13.3 and that, after taking into account the amount of
such refund, would result in the total payments under this Section 13.3
exceeding the amount due to such Lessor Indemnified Person from Owner Trust
under this Section 13.3, such Lessor Indemnified Person shall pay to the Owner
Trust, or Agent, as applicable, with reasonable promptness following the date on
which it actually receives such refund, an amount equal to the lesser of the
amount of such refund or the amount of such excess, in each case net of all
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reasonable out-of-pocket expenses incurred by such Lessor Indemnified Person in
securing such refund.
13.4 Owner Trust's Special Tax Indemnity. To the extent any
Tax results from actions by Agent, or failures by Agent to act (provided that
indemnification hereunder with respect to any Tax arising as a result of Agent's
acts or failures by Agent to act which are related to Completion shall be paid
solely through payments in accordance with Article V hereof), Owner Trust shall
pay and assume all liability for and does hereby agree to, indemnify, defend and
hold harmless any Lessor Indemnified Person on an After Tax Basis (but without
duplication for any amount payable elsewhere under this Agreement or under any
other Operative Agreement to the extent actually paid) from and against (a) any
Tax or other cost resulting from the breach, inaccuracy or incorrectness of the
representation found in Section 7.1(o) and (b) any Taxes that have to be paid by
Owner Trust under Section 4.1(b) of the Credit Agreement. Any Taxes subject to
indemnification hereunder shall be reimbursed in accordance with the provisions
of Section 13.3(e).
13.5 Indemnity Exclusions. Any Claim, to the extent resulting
from or arising out of or attributable to any of the following, is excluded from
each Owner Trust's agreement to indemnify any Lessor Indemnified Person under
this Section 13 other than Sections 13.3 and 13.4:
(a) acts, omissions or events occurring after the
expiration or early termination of this Agreement and, where
required by this Agreement, surrender to the Agents or its successor
of the Facility in compliance with the provisions of this Agreement;
(b) with respect to the relevant Lessor Indemnified
Person, any offer, sale, assignment, transfer or other disposition
(voluntary or involuntary) by or on behalf of (i) Owner Trust Parent
or its Affiliates of any of their interest in the applicable Owner
Trust, or (ii) the applicable Owner Trust of all or any of its
interest in the Facility, or (iii) the Lenders of any of their
interests in the Loans, unless such transfer is required by the
terms of the Operative Agreements or occurs in connection with the
exercise of remedies during an Event of Default;
(c) the gross negligence or willful misconduct of the
Lessor Indemnified Person seeking indemnification;
(d) the noncompliance with the terms of the Operative
Agreements by, or the breach of any agreement, covenant,
representation or warranty of, the Lessor Indemnified Person seeking
indemnification;
(e) any obligation or liability expressly borne, assumed
or to be paid in any Operative Agreement by the Lessor Indemnified
Person seeking indemnification;
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(f) with respect to the Lessor Indemnified Person
seeking indemnification, any claim constituting or arising from a
Lien attributable to such Lessor Indemnified Person (other than
these Liens arising or created as a result of action undertaken or
documents or instruments executed by the Owner Trust pursuant to the
request of Administrative Agent on behalf of the Lenders or the
Authorized Representative of any other Secured Party);
(g) any amendment other than an amendment to which any
Agent is a party or has been expressly requested by Agent in
writing;
(h) any Claim resulting from any event of default not
caused by an Agent Event of Default, if applicable, an Owner Trust
Termination Event or a Guarantor Event of Default; and
(i) any misdirection or misapplication of funds by any
Certificate Participant, Owner Trust Parent or by Owner Trust (but
in the case of Owner Trust, only to the extent such misdirection or
misapplication is attributable to such Certificate Participant or
Owner Trust Parent or their Affiliates).
13.6 Indemnification Procedure under Section 13.1 or 13.2.
Each Lessor Indemnified Person under Section 13.1 or 13.2 shall promptly after
such Lessor Indemnified Person shall have actual knowledge thereof notify the
Owner Trust and Agent in writing of any Claim as to which indemnification is
sought; provided, that the failure so to notify the Owner Trust and Agent shall
not reduce or affect the Owner Trust's liability which it may have to such
Lessor Indemnified Person under Section 13.1, 13.2, 13.3 or 13.4. Any amount
payable to any Lessor Indemnified Person shall be paid within fifteen (15) days
after receipt of such written demand therefor from such Lessor Indemnified
Person, accompanied by a certificate of such Lessor Indemnified Person stating
in reasonable detail the basis for the indemnification thereby sought and (if
such Lessor Indemnified Person is not a party hereto) an agreement to be bound
by the terms hereof as if such Lessor Indemnified Person were such a party.
Promptly after the Owner Trust receives notification of such Claim accompanied
by a written statement describing in reasonable detail the Claims which are the
subject of and basis for such indemnity and the computation of the amount so
payable, the Owner Trust (acting at the direction of Agent) shall notify such
Lessor Indemnified Person whether it intends to pay, object to, compromise or
defend any matter involving the asserted liability of such Lessor Indemnified
Person. The Agent shall have the right to investigate and so long as no Event of
Default shall have occurred and be continuing, the Agent shall have the right in
its sole discretion to defend or compromise any Claim for which indemnification
is sought under Section 13.1 or 13.2, provided, further, that no Claim shall be
compromised by the Agent on a basis that admits any criminal violation or gross
negligence or willful misconduct on the part of such Lessor Indemnified Person
without the express written consent of such Lessor Indemnified Person. If the
Agent elects, subject to the foregoing, to compromise or defend any such
asserted liability, the provision of Section 12.7
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shall control with all references therein to "Indemnified Person" being deemed
to be references to "Lessor Indemnified Person."
13.7 Subrogation. To the extent that a Claim indemnified by
the Owner Trust under this Article XIII is in fact paid in full by the Owner
Trust, Agent or an insurer under an insurance policy maintained by the Owner
Trust or Agent, the Owner Trust or, (so long as no Event of Default shall have
occurred and be continuing, Agent,) or such insurer shall be subrogated to the
rights and remedies of the Lessor Indemnified Person on whose behalf such Claim
was paid to the extent of such payment (other than rights of such Lessor
Indemnified Person under insurance policies maintained at its own expense) with
respect to the transaction or event giving rise to such Claim. Should a Lessor
Indemnified Person receive any refund, in whole or in part, with respect to any
Claim paid by the applicable Owner Trust hereunder, it shall promptly pay over
to the applicable Owner Trust the lesser of (a) the amount refunded reduced by
the amount of any Tax incurred by reason of the receipt or accrual of such
refund and increased by the amount of any Tax (but not in excess of the amount
of such reduction) saved as a result of such payment or (b) the amount the
applicable Owner Trust or any of its insurers has paid in respect of such Claim.
13.8 Survival of Indemnification Obligations. It is expressly
understood and agreed that the indemnification obligations of the Owner Trust
provided for in this Article XIII shall survive the expiration or termination of
and shall be separate and independent from any remedy under this Agreement or
any direct or indirect acquisition of any Property by Agent or a Designee.
13.9 Limitation on Indemnification. Notwithstanding the
provisions of this Article XIII, each of the Lessor Indemnified Persons hereby
acknowledge and agree that with respect to those matters covered in Article XII
hereof Owner Trust's obligations set forth in this Article XIII are intended to
pass through the obligations of the Agent set forth in such Article XII or,
shall be contingent upon receipt of payments from the Agent under such Article
XII and the Owner Trust agrees not to contest the amount of any indemnification
paid by Agent (and received by the applicable Owner Trust) pursuant to court
order, arbitration proceeding or agreement reached among the applicable Lessor
Indemnified Person and Agent with respect thereto and be bound by such court
order, arbitration proceeding or agreement.
13.10 Third Party Beneficiary Rights. Any Person who is or
becomes an Indemnified Party hereunder but which is not a signatory hereto shall
have the rights granted under this Article XIII to enforce such provisions.
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ARTICLE XIV
CREDIT AGREEMENT,
MASTER TRUST AGREEMENT AND
OTHER FINANCING DOCUMENT RIGHTS
14.1 Assignment of Credit Agreement, Master Trust Agreement
Rights and Other Financing Documents. Notwithstanding anything to the contrary
contained in the Financing Documents, Owner Trust hereby irrevocably assigns and
conveys to Agent the following rights of Owner Trust as "Borrower" or "Company",
as applicable, under the Financing Documents and agrees that so long as no Agent
Event of Default has occurred and is continuing:
(a) Agent shall have the right to execute and deliver
all Payment Directions/Borrowing Notices hereunder and similar
notices under the Financing Documents as such notices relate to the
Facility;
(b) Agent shall have the right to convert or continue
Lease Indebtedness relating to the Facility in accordance with the
Financing Documents;
(c) Agent shall have the right to receive copies of all
notices delivered to the Secured Parties under the Financing
Documents and the other Operative Agreements and such notices shall
not be effective until received by Agent;
(d) Agent shall have the right, but not the obligation,
to cause prepayment of the Lease Indebtedness in accordance with the
Intercreditor Agreement;
(e) Agent shall have the right but not the obligation to
cure, to the extent susceptible to a cure, any event of default of
Owner Trust under the Financing Documents;
(f) Agent shall have the right, but not the obligation,
to approve any successor Issuing Bank or any Administrative Agent
pursuant to Section 7.9 of the Credit Agreement or similar Person
pursuant to any similar provision of any Financing Document;
(g) [Intentionally Omitted];
(h) Agent shall have the right, but not the obligation,
to control the defense of any Claim or Imposition and consent to the
settlement thereof, in each case pursuant to any Financing Document;
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(i) Agent shall have the right to approve the form of
Letter of Credit Applications under (and as defined in) the Credit
Agreement and other Financing Documents;
(j) Agent shall have the right to reallocate the
Lenders' Commitments amongst the various Tranches pursuant to
Section 2.9(c) of the Credit Agreement or similar provisions of the
other Financing Documents;
(k) Agent shall have the right to replace Issuing Bank,
Administrative Agent or any Lender or any Authorized Representative
or Secured Party at any time; provided, however, that the
Administrative Agent may only be removed hereunder for cause;
(l) Agent shall have the right to approve the form of
collateral for the Deposit Account Collateral for loans subject to a
collateral deposit requirement in accordance with Section 5.1(e) of
the applicable Construction Agency Agreement;
(m) Agent shall have the right to execute and deliver
all Disbursement Requests under each Loan Agreement or other Bond
Document or Financing Document;
(n) Agent shall have the right, but not the obligation
(except as specifically provided for herein), to cause redemption of
the Bonds in accordance with any Loan Agreement or other Bond
Document or Financing Document;
(o) Agent shall have the right, but not the obligation,
to direct the investment or reinvestment of Bond Proceeds pursuant
to each Loan Agreement or other Financing Document;
(p) Agent shall have the right, but not the obligation,
to control the defense of any indemnification claim and consent to
the settlement thereof, in each case pursuant to each Loan Agreement
or other Financing Document; and
(q) Agent shall have the right, but not the obligation,
to direct Owner Trust in the administration of each Loan Agreement
or other Financing Document.
Owner Trust shall have no right to perform any of the foregoing actions or
exercise any of the foregoing rights.
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ARTICLE XV
MISCELLANEOUS
15.1 Intent. It is the intent of the parties hereto that for
purposes of commercial, real estate, bankruptcy, federal, state and local tax
law and banking regulations, (a) the transactions contemplated hereby are a
financing arrangement between Agent, as borrower, and the Secured Parties, as
lenders; (b) Owner Trust is a security device for the repayment of the amounts
due the Secured Parties; (c) the Property is pledged to secure the payment of
the debt owed the Secured Parties as provided for in the Security Documents (and
for tax purposes, the debt owed Certificate Participants); and (d) the
obligation of Agent to pay the Termination Amount or the Funded Budget Amount
pursuant to this Agreement shall be treated as payments of interest on and
principal of, respectively, from the Secured Parties. For commercial, real
estate, bankruptcy and banking regulations, it is the intent of the parties
hereto that Agent hereby collaterally conveys, assigns, transfers and sets over
to Owner Trust on behalf of the Secured Parties and grants a security interest
in, all of the right, title and interest of Agent in, to and under the Property
and all proceeds thereof and all of Agent's right, title and interest in, to and
under Agent's estate under this Agreement, all to secure payment and performance
of all obligations of Agent under the Operative Agreements, effective on the
date hereof in accordance with the terms of the Intercreditor Agreement.
Specifically, but without limiting the generality of this Section 15.1, Owner
Trust and Agent further intend and agree that, for the purpose of securing
Agent's obligations for the repayment of the amounts outstanding from Owner
Trust to Agent, (x) this Agreement shall be deemed to be a security agreement
and financing statement within the meaning of Article 9 of the UCC; and (y) the
conveyance provided for hereby shall be deemed to be a grant by Agent to Owner
Trust of a lien and security interest in all of Agent's present and future
right, title and interest in and to the Property (whether now existing or
hereafter acquired), including all right, title and interest of Agent in all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, investments, securities or other property, whether in the form of cash,
investments, securities or other property to secure the amounts outstanding
hereunder. The parties further intend that Owner Trust and Owner Trust Parent
shall be disregarded for income tax purposes and that Agent shall be treated as
owner of the Property for income tax purposes and shall be entitled to all tax
benefits associated with ownership, including deductions for depreciation. Each
party hereto agrees and covenants that it shall not (unless required to do so
under Applicable Law) file any tax return, statement, or schedule, or take any
other action, inconsistent with such treatment, or take any action that would
cause Owner Trust or Owner Trust Parent to be taxed as an association taxable as
a corporation or to cause Owner Trust to be taxable as a trust that is not a
grantor trust for United States federal income tax purposes. Solely to the
extent that a court were to construe this Agreement as a Lease under (and as
defined in) Article 2A of the Uniform Commercial Code as in effect from time to
time in the State of New York (the "NY UCC"), to the maximum extent permitted by
Applicable Law, Agent hereby waives any rights to which it may be entitled as a
lessee under
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Article 2A of the NY UCC, including, without limitation, the right to revoke or
reject acceptance of the relevant goods.
15.2 Notices. (a) Unless otherwise specifically provided
herein, all notices, consents, directions, approvals, instructions, requests and
other communications required or permitted by the terms hereof to be given to
any Person shall be given in writing and delivered (i) personally, (ii) by a
nationally recognized overnight courier service, (iii) by mail (by registered or
certified mail, return receipt requested, postage prepaid) or (iv) by facsimile
(with verbal confirmation of such transmission), in each case directed to the
address of such Person as indicated below, or to such other address as may be
hereafter notified by the respective parties hereto:
Agent: Reliant Energy [_____________], LLC
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Attention: Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Reliant Resources, Inc.
0000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Owner Trust: [_____________] Trust
c/o First Union Trust Company, National
Association
One Xxxxxx Square
000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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Bank: First Union Trust Company, National
Association
One Xxxxxx Square
000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Administrative Agent:
Certificate
Participants,
Lender Agents
and Lenders: At the addresses set forth on Schedule I
Any such notice shall be effective upon receipt or refusal. From time to time
any party may designate a new address for purposes of notice hereunder by
written notice to each of the other parties hereto in accordance with this
Section. The parties agree and acknowledge that time is of the essence for
purposes of notices under this Agreement.
(a) Agent acknowledges and agrees that any agreement of Owner
Trust to receive certain notices by facsimile (including any Payment
Directions/Borrowing Notices and Quarterly Certificates) from Agent is solely
for the convenience and at the request of Agent. Owner Trust shall be entitled
to reasonably rely on any notices signed by a Responsible Officer of Agent and
Owner Trust shall not have any liability to Agent or other Person on account of
any action taken or not taken by Owner Trust in reliance upon such facsimile
notice. The obligation of Agent to make any payment pursuant to Section 8.2,
10.1, 11.2 or Article XII shall not be affected in any way or to any extent by
any failure by Owner Trust to receive written confirmation of any facsimile
notice or the receipt by Owner Trust of a confirmation which is at variance with
the terms contained in the facsimile notice.
15.3 Assignment; Successors and Assigns. (a) This Agreement shall be
binding upon and inure to the benefit of Owner Trust and Agent and their
respective permitted successors and assigns.
(b) Subject to Article X, Agent shall not assign any of its
rights or obligations hereunder without the prior written consent of Owner Trust
and Administrative Agent and Collateral Agent; provided, that notwithstanding
the foregoing, Agent shall have the right, from time to time, to assign any or
all of its rights or obligations hereunder to any Designee
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(in the case of an assignment of the Purchase Option in accordance with Section
10.1(c)) or any Affiliate of Agent, so long as (i) the Guaranty remains in full
force and effect, as confirmed in writing by the Guarantor, and Agent agrees to
provide Owner Trust with at least five (5) Business Days prior written notice of
any such assignment and (ii) in the event the assignee is a non-United States
Affiliate of Agent, such assignee agrees in writing that service of process may
be made on such assignee at the address of Guarantor in the same manner as
provided for in the Guaranty; provided, that Agent also delivers to Owner Trust
and Collateral Agent new UCC Financing Statements, legal opinions and such other
documents necessary for the perfection of Liens on the Facility as Owner Trust
may reasonably request.
(c) If as a result of any change in applicable law or
regulation (i) Owner Trust is prohibited from making or maintaining any Payments
or (ii) being party to the Purchase Agreements or owning the assets contemplated
thereby, or (iii) Owner Trust's participation in the transactions contemplated
by this Agreement becomes substantially more costly or administratively
burdensome, Owner Trust may, or at the direction of Agent shall, assign to one
or more Owner Trust Eligible Assignees all or a portion of Owner Trust's rights
and obligations under this Agreement (including all or a portion of its
Aggregate Owner Trust's Contribution Commitment and the Payments owing to it);
provided, however, that (A) each such assignment shall be of a constant, and not
a varying, percentage of all rights and obligations under this Agreement, (B)
except in the case of an assignment of all of Owner Trust's rights and
obligations under this Agreement, the amount of the Aggregate Owner Trust's
Contribution Commitment being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $10,000,000, (C) the parties to each
such assignment shall execute an Assignment and Acceptance and (D) at the time
of execution of the Assignment and Acceptance, such assignee shall deliver to
Agent any necessary Prescribed Forms in accordance with Section 13.3(f). Upon
such execution, delivery, acceptance and recording, from and after the effective
date specified in each Assignment and Acceptance, (x) the assignee thereunder
shall be a party hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, have the
rights and obligations of Owner Trust hereunder and (y) Owner Trust shall, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of Owner Trust's rights and obligations
under this Agreement, Owner Trust shall cease to be a party hereto, except that
the rights of Owner Trust under Article XII shall continue with respect to
events and occurrences before or concurrently with its ceasing to be a party
hereto).
(d) By executing and delivering an Assignment and Acceptance,
Owner Trust and the assignee thereunder confirm to and agree with each other as
follows: (i) other than as provided in such Assignment and Acceptance, Owner
Trust makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with any Operative Agreement or any other instrument or document
furnished pursuant hereto or in connection herewith or the
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execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Operative Agreement or any other instrument or document furnished
pursuant hereto or in connection herewith; (ii) Owner Trust makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Agent or the Guarantor or any other Person or the
performance or observance by Agent or the Guarantor or any other Person of any
of its respective obligations under any Operative Agreement or any other
instrument or document furnished pursuant hereto or in connection herewith;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section 3.01(a)
of the Guaranty and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon Owner Trust and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement, any of the other Operative
Agreements or any other instrument or document; (v) such assignee confirms that
it is an Owner Trust Eligible Assignee; and (vi) such assignee agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it.
(e) Upon the execution of an Assignment and Acceptance by an
Owner Trust Eligible Assignee, Owner Trust shall give prompt written notice
thereof to Agent.
(f) Owner Trust may, in connection with any assignment or
proposed assignment pursuant to this Section 15.3, disclose to the assignee or
proposed assignee any information relating to Agent or any of its Affiliates
furnished to Owner Trust by or on behalf of Agent or any of its Affiliates;
provided, that prior to any such disclosure, the assignee or proposed assignee
shall execute and deliver to Owner Trust and Agent a confidentiality agreement
reasonably satisfactory to Owner Trust and Agent.
(g) Notwithstanding any other provision set forth in this
Agreement, Owner Trust may at any time create a security interest in all or any
portion of its rights under this Agreement (including the Payments owing to it)
in favor of the Secured Parties.
15.4 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(EXCLUDING ANY CONFLICT-OF-LAW OR CHOICE-OF-LAW RULES WHICH MIGHT LEAD TO THE
APPLICATION OF THE INTERNAL LAWS OF ANOTHER JURISDICTION).
15.5 SUBMISSION TO JURISDICTION; WAIVERS; SERVICE OF PROCESS. EACH
PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER
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OPERATIVE AGREEMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE
GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS
OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT
IN SUCH COURTS AND WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN
INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(c) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING
REFERRED TO IN THIS SECTION 15.5(c) ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES;
(d) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY DELIVERING A COPY THEREOF BY REGISTERED
OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, RETURN RECEIPT REQUESTED TO SUCH PARTY AT ITS ADDRESS SET
FORTH IN SECTION 15.2 OR AT SUCH OTHER ADDRESS AS SUCH PARTY SHALL HAVE
GIVEN NOTICE TO THE OTHER PARTIES; AND
(e) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
15.6 WAIVERS OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT AND FOR ANY COUNTERCLAIM
THEREIN.
15.7 Amendments and Waivers. No amendments, waivers, supplements or
modifications hereto, shall be effective unless the same shall be in writing and
signed by Owner Trust and Agent, with the consent of the requisite applicable
Authorized Representatives and Secured Parties, subject to Section 5 of the
Intercreditor Agreement.
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15.8 Counterparts. This Agreement may be executed on any number of
separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
15.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
15.10 Headings and Table of Contents. The headings and table of
contents contained in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.
15.11 Parties in Interest. Except as expressly provided herein, none
of the provisions of this Agreement are intended for the benefit of any Person
except the parties hereto.
15.12 Payment Obligations Absolute. Except as otherwise specifically
provided in this Agreement, to the extent permitted by Applicable Law, all
payments to Owner Trust by Agent pursuant to Section 8.2, 10.1, 11.2 or Article
XII shall be made in all events without any abatement, suspension, deferment,
reduction, deduction, defense, setoff or counterclaim to Administrative Agent
for the account of the Secured Parties and Owner Trust at Collateral Agent's
office specified in Section 19 of the Collateral Agency and Intercreditor
Agreement to be distributed as provided in Sections 8 of the Collateral Agency
and Intercreditor Agreement.
15.13 Further Assurances. Each of the parties hereto shall promptly
cause to be taken, executed, acknowledged or delivered, at the sole expense of
Agent (subject to reimbursement by Owner Trust pursuant to the Budget), all such
further acts, conveyances, documents and assurances as the other party hereto
may from time to time reasonably request in order to carry out and effectuate
the intent and purposes of this Agreement and the transactions contemplated
hereby.
15.14 Limitations on Recourse. The parties hereto agree that Bank,
in its individual capacity shall have no personal liability whatsoever to Agent
or its respective successors and assigns for any claim based on or in respect of
this Agreement or any of the other Operative Agreements or arising in any way
from the transactions contemplated hereby or thereby; provided, however, that
Bank shall be liable in its individual capacity (a) for its own willful
misconduct or gross negligence (or negligence in the handling of funds), (b) for
liabilities that may result from the incorrectness of any representation or
warranty expressly made by it in Section 7.3 or (c) for any Taxes based on or
measured by any fees, commission or compensation received by it for acting as
Trustee as contemplated by the Operative Agreements. It is understood and agreed
that, except as provided in the preceding proviso: (i) Bank shall have no
personal liability under any of the Operative Agreements as a result of acting
pursuant to and
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Construction Agency Agreement
consistent with any of the Operative Agreements; (ii) all obligations of Bank to
Agent are solely nonrecourse obligations except to the extent that Bank has
received payment from others and are enforceable solely against Owner Trust's
interest in the Property; (iii) all such personal liability of Bank is expressly
waived and released as a condition of, and as consideration for, the execution
and delivery of the Operative Agreements by Owner Trust; and (iv) this Agreement
is executed and delivered by Bank solely in the exercise of the powers expressly
conferred upon it as the Trustee of Owner Trust under the Trust Agreement.
15.15 No Petition. Each of Agent, Owner Trust and Bank hereby
covenants and agrees that, prior to the date of the winding up of Owner Trust
and payment of all liabilities in accordance with Section 3808 of the Business
Trust Statute (as defined in the Trust Agreement), each of the parties will not
institute against, or join with any other Person in instituting against, Owner
Trust Parent or Owner Trust any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceedings under the
laws of the United States or any state of the United States. This Section 15.15
shall survive termination of this Agreement.
15.16 Conflict in Operative Agreements. If there is any conflict
between any Operative Agreements, such Operative Agreement shall be interpreted
and construed, if possible, so as to avoid or minimize such conflict but, to the
extent (and only to the extent) of such conflict, this Agreement shall prevail
and control.
ARTICLE XVI
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF THE CERTIFICATE PARTICIPANTS
16.1 Trust Agreements. Each Certificate Participant hereby agrees to
perform its obligations under, and otherwise comply with, the provisions of the
Operative Agreements to which such Person is a party (the "Trust Agreements").
None of the Secured Parties shall terminate, amend, modify or waive any of the
Trust Agreements or any of the organizational documents of Owner Trust or Owner
Trust Parent, if any such termination, amendment, modification or waiver could
reasonably be expected to have a material adverse effect on (a) the rights and
obligations of Agent under this Agreement, including the rights of Agent to
obtain or benefit from Payments, distributions or the release of any Liens
pursuant to this Agreement or (b) the intent of the parties as expressed in
Section 15.1.
16.2 [Intentionally Omitted].
16.3 Upstream Purchase and Releases. Each Certificate Participant
and Owner Trust Parent agrees to be bound by, and comply with, the provisions of
Article X. The Secured Parties agree to release any Liens and to take other
actions necessary or appropriate to effectuate
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Construction Agency Agreement
the consummation of the Purchase Option at the cost and expense of the Agent and
subject to the compliance by Agent in all respects with the terms of Article X.
16.4 Disclosure. The parties to this Agreement agree that,
notwithstanding any contrary implication in any of the documents related to this
transaction to the contrary, disclosure of this structure and the aspects (as
defined and used in Treas. Reg. Section 301.6111-2T(c)(i)) of the transactions
contemplated hereby are not limited in any way. The parties further agree that
the structure and tax aspects of the transactions contemplated hereby are not
protected from disclosure or use in any manner (such as a claim that the tax
aspects or structure are proprietary to any Person).
16.5 Representations and Warranties of Secured Parties. Each of the
Secured Parties other than Bondholders represents and warrants to each of the
other parties hereto as follows:
(a) Due Organization, etc. It is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and has the power and authority to enter into the Operative
Agreements to which such Person is a party (the "Financier Documents") (assuming
due authorization, execution and delivery thereof by the other parties thereto),
and perform the obligations under each of the Financier Documents to which such
Person is or will be a party and each other agreement, instrument and document
to be executed and delivered by it in connection with or as contemplated by the
Financier Documents.
(b) Authorization. The execution, delivery and performance of
each Financier Document to which such Person is or will be a party (assuming due
authorization, execution and delivery thereof by the other parties thereto) has
been duly authorized by all necessary action on its part.
(c) Enforceability, etc. Each of the Financier Documents to
which such Person is a party is the legal, valid and binding obligation of such
Person, and has been duly executed and delivered by such Person, and the other
Financier Documents to which such Person will, upon execution and delivery
thereof, constitute a legal, valid and binding obligation enforceable against
such Person, in accordance with the terms thereof, except as the same may be
limited by insolvency, bankruptcy, reorganization or other laws relating to or
affecting creditors' rights or by general equitable principles.
(d) ERISA. No part of the funds to be used by any Secured
Party to make its investment pursuant to the Financier Documents, directly or
indirectly, constitutes or is deemed to constitute assets (within the meaning of
ERISA and any applicable rules, regulations and court decisions thereunder) of
any employee benefit plan (as defined in Section 3(3) of ERISA).
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16.6 Confidentiality. Each of Owner Trust and the Secured Parties
agrees to exercise its best efforts to keep and to cause any third party
recipient of the information described in this Section 16.6 to keep any
information delivered or made available by Agent to it (including any
information obtained pursuant to Section 7.4) confidential; provided, that
nothing shall prevent Owner Trust or any Secured Party from disclosing such
information (a) to any other Secured Party for the purpose of administering or
enforcing this Agreement or the other Operative Agreements, (b) pursuant to
subpoena or upon the order of any court or administrative agency, (c) upon the
request or demand of any Governmental Authority having jurisdiction over Owner
Trust or such Secured Party, (d) if such information has been publicly disclosed
other than in connection with a breach of this Section, (e) to the extent
reasonably required in connection with any litigation to which either Owner
Trust, any Secured Party or their respective Affiliates may be a party, (f) to
the extent reasonably required in connection with the exercise of any remedy
hereunder, (g) to Owner Trust's or such Secured Party's, as the case may be,
legal counsel, independent auditors and other professional advisors, (h) to any
actual or proposed permitted assignee of Owner Trust or a Secured Party that has
agreed in writing to be bound by the provisions of this Section 16.6. Unless
prohibited from doing so by applicable law, in the event that any Secured Party
is legally requested or required to disclose any confidential information
pursuant to clause (b), (c), or (e) of this Section 16.6, such party shall
promptly notify the Agent of such request or requirement prior to disclosure so
that the Agent may seek an appropriate protective order and/or waive compliance
with the terms of this Agreement. If, however, in the opinion of counsel for
such party, such party is nonetheless, in the absence of such order or waiver,
compelled to disclose such confidential information or otherwise stand liable
for contempt or suffer possible censure or other penalty or liability, then such
party may disclose such confidential information without liability to the Agent;
provided, however, that such party will use its best efforts to minimize the
disclosure of such information. Subject to the exceptions above to disclosure of
information, each Secured Party agrees that it shall not publish, publicize, or
otherwise make public any information regarding this Agreement or the
transactions contemplated hereby without the written consent of the Agent, in
its sole discretion. Subject to the exceptions above to disclosure of
information, Owner Trust, each of the Secured Parties and Agent agrees that it
shall not publish, publicize, or otherwise make public any information regarding
this Agreement or the transactions contemplated hereby without the written
consent of Agent and the Secured Parties.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Construction Agency Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the day and year
first above written.
OWNER:
[_____________] TRUST
By: First Union Trust Company, National
Association, not in its individual capacity,
but solely as Owner Trustee
By:
------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
AGENT:
RELIANT ENERGY [_____________], LLC
By:
-------------------------------------------------
Name:
Title:
BANK:
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, in its individual
capacity, but only to the extent
expressly provided for herein
By:
-------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
OWNER TRUST PARENT:
APPLE INVESTMENTS 2001 TRUST
By: First Union Trust Company, National
Association, not in its individual capacity,
but solely as Owner Trustee
By:
------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
LEAD ARRANGER:
XXXXXXX XXXXX BARNEY INC.
By:
-------------------------------------------------
Name:
Title:
ADMINISTRATIVE AGENT:
CITICORP USA, INC.
By:
-------------------------------------------------
Name:
Title:
ISSUING BANK:
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH
By:
-------------------------------------------------
Name:
Title:
By:
-------------------------------------------------
Name:
Title:
DOCUMENTATION AGENT:
ABN AMRO BANK N.V.
By:
-------------------------------------------------
Name:
Title:
SYNDICATION AGENT:
ROYAL BANK OF CANADA
By:
-------------------------------------------------
Name:
Title:
By:
-------------------------------------------------
Name:
Title:
CO-SYNDICATION AGENT:
COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES
By:
-------------------------------------------------
Name:
Title:
CO-DOCUMENTATION AGENT:
TORONTO DOMINION (TEXAS) INC.
By:
-------------------------------------------------
Name:
Title:
CERTIFICATE PARTICIPANTS:
XXXXXXX XXXXX XXXXXX INC.
By:
-------------------------------------------------
Name:
Title:
CITICORP USA, INC.
By:
-------------------------------------------------
Name:
Title:
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH
By:
-------------------------------------------------
Name:
Title:
By:
-------------------------------------------------
Name:
Title:
ROYAL BANK OF CANADA
By:
-------------------------------------------------
Name:
Title:
By:
-------------------------------------------------
Name:
Title:
ABN AMRO BANK N.V.
By:
-------------------------------------------------
Name:
Title:
LENDERS:
XXXXXXX XXXXX BARNEY INC.
By:
-------------------------------------------------
Name:
Title:
CITICORP USA, INC.
By:
-------------------------------------------------
Name:
Title:
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH
By:
-------------------------------------------------
Name:
Title:
By:
-------------------------------------------------
Name:
Title:
ROYAL BANK OF CANADA
By:
-------------------------------------------------
Name:
Title:
By:
-------------------------------------------------
Name:
Title:
JOINDER
The undersigned hereby join in the execution of the foregoing Amended and
Restated Construction Agency Agreement, solely for the purpose of Section 1.5.
RELIANT ENERGY CONSTRUCTION, LLC
By:
-------------------------------------------------
Name:
Title:
APPLE EQUITY CAPITAL TRUST
By:
-------------------------------------------------
Name:
Title:
APPLE INVESTMENTS LLC
By:
-------------------------------------------------
Name:
Title:
