EXHIBIT 00.XX
AMENDED AND RESTATED PARTICIPATION AGREEMENT
AMONG
EL PASO CORPORATION
(A DELAWARE CORPORATION)
LIMESTONE ELECTRON TRUST
(A DELAWARE BUSINESS TRUST)
LIMESTONE ELECTRON, INC.
(A DELAWARE CORPORATION)
CREDIT SUISSE FIRST BOSTON (USA), INC.
(A DELAWARE CORPORATION)
EL PASO CHAPARRAL HOLDING COMPANY
(A DELAWARE CORPORATION)
EL PASO CHAPARRAL HOLDING II COMPANY
(A DELAWARE CORPORATION)
EL PASO CHAPARRAL INVESTOR, L.L.C.
(A DELAWARE LIMITED LIABILITY COMPANY)
EL PASO CHAPARRAL MANAGEMENT, L.P.
(A DELAWARE LIMITED PARTNERSHIP)
CHAPARRAL INVESTORS, L.L.C.
(A DELAWARE LIMITED LIABILITY COMPANY)
MESQUITE INVESTORS, L.L.C.
(A DELAWARE LIMITED LIABILITY COMPANY)
EL PASO ELECTRON OVERFUND TRUST
(A DELAWARE BUSINESS TRUST)
EL PASO ELECTRON SHARE TRUST
(A DELAWARE BUSINESS TRUST)
ELECTRON TRUST
(A DELAWARE BUSINESS TRUST)
WILMINGTON TRUST COMPANY,
AND
THE BANK OF NEW YORK
DATED AS OF APRIL 12, 2002
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND CERTAIN UNDERSTANDINGS................................................................1
Section 1.1 Definitions...........................................................................1
Section 1.2 Rules of Construction.................................................................2
ARTICLE II CLOSING; AGREEMENTS TO PURCHASE AND SELL.............................................................2
Section 2.1 Time and Place of Closing.............................................................2
Section 2.2 Agreements............................................................................2
Section 2.3 Closing...............................................................................2
Section 2.4 Consent...............................................................................7
ARTICLE III CONDITIONS PRECEDENT................................................................................7
Section 3.1 Conditions to the Occurrence of the Closing Date......................................7
Section 3.2 Reserved.............................................................................10
ARTICLE IV REPRESENTATIONS AND WARRANTIES......................................................................10
Section 4.1 Representations and Warranties of El Paso............................................10
Section 4.2 Representations and Warranties of El Paso with Respect to Limestone, the
Co-Issuer, Chaparral, Mesquite, the Overfund Trust and the Share Trust...............14
Section 4.3 Representations and Warranties of El Paso with Respect to the New Assets.............19
Section 4.4 Representations and Warranties of El Paso with Respect to the Specified New
Assets...............................................................................23
Section 4.5 Representations and Warranties of the Indenture Trustee..............................23
Section 4.6 Representations and Warranties of Wilmington Trust Company...........................24
ARTICLE V COVENANTS; ACKNOWLEDGEMENTS..........................................................................24
Section 5.1 Covenants of El Paso.................................................................24
Section 5.2 Guaranty.............................................................................28
Section 5.3 Covenant of Chaparral................................................................28
Section 5.4 Agreement of Parties.................................................................28
Section 5.5 Covenants of Overfund Trust..........................................................29
Section 5.6 Covenants of Indenture Trustee.......................................................30
Section 5.7 Withdrawal of DLJ Inc................................................................30
ARTICLE VI INDEMNIFICATION.....................................................................................30
Section 6.1 General Indemnification..............................................................30
Section 6.2 Tax Indemnification..................................................................38
Section 6.3 Agreements...........................................................................38
ARTICLE VII MISCELLANEOUS......................................................................................38
Section 7.1 Survival.............................................................................38
Section 7.2 Notices..............................................................................39
Section 7.3 Severability of Provisions...........................................................41
Section 7.4 Governing Law; Waiver of Jury Trial; Consent to Jurisdiction.........................41
Section 7.5 Amendments, Waivers, Etc.............................................................43
Section 7.6 Entire Agreement.....................................................................43
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Section 7.7 Benefit of Agreement.................................................................43
Section 7.8 Expenses.............................................................................44
Section 7.9 No Bankruptcy Petitions..............................................................44
Section 7.10 Limitation of Liability..............................................................45
Section 7.11 General Limitation of Liability......................................................45
Section 7.12 Counterparts.........................................................................45
Section 7.13 Effectiveness........................................................................46
ANNEXES AND SCHEDULES
Annex A Definitions and Rules of Construction
Annex B El Paso Energy Presentation to Investors
Annex C Due Diligence Presentation Materials
Schedule I Section 4.1(r) - Disclosure
Schedule II Schedule of Existing Liabilities of Chaparral
Schedule III Schedule of Existing Liens
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This AMENDED AND RESTATED
PARTICIPATION AGREEMENT, dated as of
April 12, 2002 (this "Agreement") is by and among (i) EL PASO CORPORATION
(formerly El Paso Energy Corporation), a Delaware corporation, (ii) LIMESTONE
ELECTRON TRUST, a Delaware business trust, (iii) LIMESTONE ELECTRON, INC., a
Delaware corporation, (iv) Credit Suisse First Boston (USA), Inc., a Delaware
corporation, as successor to Xxxxxxxxx, Xxxxxx & Xxxxxxxx, Inc., (v) EL PASO
CHAPARRAL HOLDING COMPANY, a Delaware corporation, (vi) EL PASO CHAPARRAL
HOLDING II COMPANY, a Delaware corporation, (vii) EL PASO CHAPARRAL INVESTOR,
L.L.C., a Delaware limited liability company, (viii) EL PASO CHAPARRAL
MANAGEMENT, L.P., a Delaware limited partnership, (ix) CHAPARRAL INVESTORS,
L.L.C., a Delaware limited liability company, (x) MESQUITE INVESTORS, L.L.C., a
Delaware limited liability company, (xi) EL PASO ELECTRON OVERFUND TRUST, a
Delaware business trust, (xii) EL PASO ELECTRON SHARE TRUST, a Delaware business
trust, (xiii) ELECTRON TRUST, a Delaware business trust, as sole
Certificateholder, (xiv) WILMINGTON TRUST COMPANY and (xv) THE BANK OF
NEW YORK,
a
New York banking corporation, as successor to United States Trust Company of
New York (and together with the other parties hereto (other than Credit Suisse
First Boston (USA), Inc., as successor to Xxxxxxxxx, Lufkin & Xxxxxxxx, Inc.),
each a "Party") (defined terms used herein shall have the meanings assigned
thereto in Section 1.1 hereof).
WHEREAS, as of Xxxxx 00, 0000, XXX Inc. and each of the
Parties (or its predecessor) entered into a
Participation Agreement (the
"Original
Participation Agreement") pursuant to which DLJ Inc. and each Party
assumed the duties ascribed to it thereunder and under the other Transaction
Documents on the terms and conditions expressly set forth therein;
WHEREAS, DLJ Inc. and each of the Parties hereto desires to
amend and restate the Original
Participation Agreement in its entirety on and as
of the Signing Date to become effective on and as of the Effective Date pursuant
to Section 7.13;
NOW, THEREFORE, in consideration of the mutual agreements
herein contained and other good and valuable consideration, receipt of which is
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND
CERTAIN UNDERSTANDINGS
Section 1.1 Definitions.
Each capitalized term used herein and not otherwise defined
herein shall have the definition assigned to that term in Annex A ("Annex A").
Section 1.2 Rules of Construction.
This Agreement and the definitions referred to in Section 1.1
shall be governed by, and construed in accordance with, the rules of
construction set forth in Section 1.02 of Annex A.
ARTICLE II
CLOSING; AGREEMENTS TO PURCHASE AND SELL
Section 2.1 Time and Place of Closing.
The closing of the transactions described in Section 2.3
hereof shall commence at 9:00 a.m.,
New York City time, on the Closing Date at
the offices of Milbank, Tweed, Xxxxxx & XxXxxx LLP, 0 Xxxxx Xxxxxxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or at such other time and at such other location as shall
be agreed by the parties hereto.
Section 2.2 Agreements.
Pursuant to the Original
Participation Agreement, each party
thereto acknowledged and consented to the transactions described in Section 2.3
thereof, subject to the terms and conditions of the Original
Participation
Agreement and on the basis of the representations and warranties set forth
therein, in consideration for the agreement of each other party as set forth
therein.
Section 2.3 Closing.
On or before the Closing Date, the following transactions
shall be consummated (if on the Closing Date, simultaneously, unless otherwise
specified herein or in the other Transaction Documents), subject to the terms
and conditions hereof and on the basis of the representations and warranties set
forth herein:
(a) El Paso. (i) At least one Business Day prior to the
Closing Date, El Paso shall cause its interests in the Specified New Assets to
be sold to Mesquite.
(ii) On the Closing Date, El Paso shall (i) contribute $4,000
to the Share Trust as consideration for the sole certificate of beneficial
interest in the Share Trust and (ii) issue the El Paso Preferred Stock to the
Share Trust against payment therefor of $2,000 from the Share Trust and other
good and valuable consideration described in the Share Trust Agreement and the
Transaction Documents.
(iii) On the Closing Date, El Paso shall, and shall cause the
Share Trust to, enter into the Share Trust Agreement and the Remarketing
Agreement.
(iv) On the Closing Date, El Paso shall issue El Paso Debt
Securities to the Overfund Trust in an aggregate principal amount equal to the
Overfund Amount (less amounts, if
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any, invested in Financial Investments) against payment to El Paso of an amount
equal to the Overfund Amount.
(v) On the Closing Date, El Paso shall enter into the
Limestone Trust Agreement, the Share Trust Agreement, the Overfund Trust
Agreement, the Tax Indemnification Agreement, the El Paso Debt Security
Direction Letter and each other Transaction Document to which it is a party and
that has not previously been entered into by it.
(vi) On the Closing Date, notwithstanding the terms of the
Existing El Paso Demand Note, El Paso shall repay $61,600,509.17 of the
principal amount of the Existing El Paso Demand Note in accordance with the
demand made by Chaparral pursuant to Section 2.3(j)(ii) and the outstanding
principal amount of the Existing El Paso Demand Note shall be reduced to
$11,149,490.83.
(vii) On the Closing Date, El Paso shall amend and restate the
Existing El Paso Demand Note to reflect the transactions described in clause
(vi) above, and the original Existing El Paso Demand Note providing for a
maximum outstanding principal amount of $72,750,000 shall be returned to El Paso
for cancellation.
(viii) On the Closing Date, El Paso shall issue one or more El
Paso Notes to Mesquite evidencing loans to El Paso with an aggregate outstanding
principal amount of approximately $131,354,009.17 representing the amount of the
proceeds of the issuance of the Limestone Securities not used for other purposes
by Mesquite.
(b) El Paso Chaparral Holding. On the Closing Date, El Paso
Chaparral Holding shall enter into each Transaction Document to which it is a
party and that has not previously been entered into by it.
(c) El Paso Chaparral. On the Closing Date, El Paso Chaparral
shall enter into the Chaparral LLC Agreement, the Management Agreement and each
other Transaction Document to which it is a party and that has not previously
been entered into by it.
(d) El Paso Chaparral Holding II. On the Closing Date, El Paso
Chaparral Holding II shall enter into the Chaparral LLC Agreement and each other
Transaction Document to which it is a party and that has not previously been
entered into by it.
(e) Electron. (i) On the Closing Date, Electron shall purchase
the Subsequent Certificates and pay Limestone the full consideration therefor,
each to the extent it has funds available.
(ii) On the Closing Date, Electron, as sole Certificateholder,
shall enter into the Limestone Trust Agreement, the Tax Indemnification
Agreement and each other Transaction Document to which it is a party and that
has not previously been entered into by it.
(f) Limestone. (i) On March 15, 2000, Limestone shall enter
into the Note Purchase Agreement. On the Closing Date, Limestone shall enter
into the Indenture, and shall issue the Initial Notes under the Indenture to the
Initial Purchaser pursuant to the terms of the
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Note Purchase Agreement against payment of the purchase price therefor of
$1,000,000,000 by the Initial Purchaser to Limestone.
(ii) On March 15, 2000, Limestone shall cause the Co-Issuer to
enter into the Note Purchase Agreement. On the Closing Date, Limestone shall
cause the Co-Issuer to enter into the Indenture, the Administrative Services
Agreement and each other Transaction Document to which the Co-Issuer is a party
and that has not previously been entered into by it.
(iii) On the Closing Date, Limestone shall issue the
Subsequent Certificates to Electron pursuant to the Limestone Trust Agreement
against payment of the purchase price thereof of $100,000,000 by Electron to
Limestone.
(iv) On the Closing Date, Limestone shall pay the proceeds of
the Initial Notes and Subsequent Certificates, if any, (A) as a Capital
Contribution to Chaparral in the amount of $1,027,250,000 pursuant to the
Chaparral LLC Agreement and (B) to the Limestone Lender in the amount of
$72,750,000 in full satisfaction of the outstanding principal amount of the
Limestone Loan.
(v) On the Closing Date, Limestone shall use the distribution
from Chaparral described in Section 2.3(j)(iii) to pay $1,200,716.02 to the
Limestone Lender in full satisfaction of the accrued and unpaid interest on the
Limestone Loan.
(vi) On the Closing Date, Limestone shall enter into the
Remarketing Agreement and the Security Agreement, and shall pledge its rights
thereunder to the Indenture Trustee pursuant to the Indenture.
(vii) On the Closing Date, Limestone shall enter into the
Limestone Trust Agreement, the Chaparral LLC Agreement, the Tax Indemnification
Agreement, the El Paso Debt Security Direction Letter, the Administrative
Services Agreement and each other Transaction Document to which it is a party
and that has not previously been entered into by it.
(viii) On the Closing Date, Limestone shall, and shall cause
the Co-Issuer to, enter into the Administrative Services Agreement with the
administrator named therein.
(g) Co-Issuer. (i) On or before the Closing Date, the
Co-Issuer shall issue its stock to Limestone.
(ii) On the Closing Date, the Co-Issuer shall co-issue the
Initial Notes with Limestone under the Indenture to the Initial Purchaser
pursuant to the terms of the Note Purchase Agreement against payment of the
purchase price therefor of $1,000,000,000 by the Initial Purchaser to Limestone.
(iii) On March 15, 2000, the Co-Issuer shall enter into the
Note Purchase Agreement. On the Closing Date, the Co-Issuer shall enter into the
Indenture, the Administrative Services Agreement and each other Transaction
Document to which it is a party and that has not previously been entered into by
it.
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(h) Limestone Lender. On the Closing Date, the Limestone
Lender shall release Limestone from all obligations under the Limestone Credit
Agreement in exchange for payment of the outstanding principal of and accrued
interest on the Limestone Loan and shall execute appropriate Uniform Commercial
Code termination statements to evidence the release of the security interests
granted under the Assignment and Assumption Agreement.
(i) Management Company. On the Closing Date, the Management
Company shall enter into the Management Agreement and each other Transaction
Document to which it is a party and that has not previously been entered into by
it.
(j) Chaparral. (i) At least one Business Day prior to the
Closing Date, Chaparral shall make a contribution to Mesquite of all assets
currently held by Chaparral (other than the Existing El Paso Demand Note and the
Mesquite LLC Interest), to the extent not already owned by Mesquite.
(ii) On or prior to the Closing Date, Chaparral shall demand
payment from El Paso on the Existing El Paso Demand Note in an amount equal to
$61,600,509.17 in principal amount plus $1,200,716.02 in payment of a portion of
the accrued and unpaid interest on the Existing El Paso Demand Note through the
Closing Date leaving an unpaid principal balance thereon of $11,149,490.83.
(iii) On the Closing Date, Chaparral shall distribute
$1,200,716.02 to Limestone, as Class A Member of Chaparral, to be used by
Limestone to pay the accrued and unpaid interest on the Limestone Loan.
(iv) On the Closing Date, Chaparral shall issue Certificates
of Interest representing the Member interests in Chaparral to El Paso Chaparral,
El Paso Chaparral Holding II and Limestone pursuant to the Chaparral LLC
Agreement.
(v) On the Closing Date, Chaparral shall increase Limestone's
Class A Member capital account by $1,027,250,000 in connection with the Capital
Contribution of Limestone described in Section 2.3(f)(iv).
(vi) On the Closing Date, Chaparral shall enter into the
Chaparral Documents, the El Paso Debt Security Direction Letter and each other
Transaction Document to which it is a party and that has not previously been
entered into by it.
(vii) On the Closing Date, Chaparral shall contribute to the
Overfund Trust the Overfund Amount in further consideration for the sole
certificate of beneficial interest in the Overfund Trust.
(viii) On the Closing Date, Chaparral shall make a cash
contribution to Mesquite of approximately $796,013,202.43 representing the
amount of the proceeds of the issuance of the Limestone Securities not used for
other purposes by Chaparral.
(ix) Upon the issuance by El Paso of an amended and restated
El Paso Note pursuant to Section 2.3(a)(vii), Chaparral shall deliver to El
Paso, for cancellation, the original Existing El Paso Demand Note providing for
a maximum principal amount of $72,750,000.
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(k) Mesquite. (i) On the Closing Date, Mesquite shall pay El
Paso approximately $664,659,193.26 to repay amounts outstanding under the
Mesquite Credit Agreement (which repayment shall not limit or otherwise affect
Mesquite's right to reborrow and repay advances thereunder).
(ii) On the Closing Date, Mesquite shall enter into the
Management Agreement and each other Transaction Document to which it is a party
and that has not previously been entered into by it.
(iii) On or prior to the Closing Date, as applicable, Mesquite
shall increase Chaparral's capital account in Mesquite in connection with the
contribution of Chaparral described in Sections 2.3(j)(i) and 2.3(j)(viii).
(iv) On the Closing Date, Mesquite shall loan an aggregate
principal amount of approximately $131,354,009.17 representing the amount of the
proceeds of the issuance of the Limestone Securities not used for other purposes
by Mesquite to El Paso, which loan shall be evidenced by one or more El Paso
Notes.
(l) Overfund Trust. (i) On the Closing Date, the Overfund
Trust shall issue a certificate of beneficial interest in the Overfund Trust to
Chaparral pursuant to the Overfund Trust Agreement as described above.
(ii) On the Closing Date, the Overfund Trust shall use a
portion of the Overfund Amount to purchase an El Paso Debt Security that will
provide payments of principal and interest at the times and in the amounts
required to satisfy clause (b)(i) of the definition of the Class A Member's
Priority Return.
(iii) On the Closing Date, the Overfund Trust shall use a
portion of the Overfund Amount to purchase an El Paso Debt Security that will
provide payments of principal and interest at the times and in the amounts
required to satisfy clause (b)(ii) of the definition of the Class A Member's
Priority Return.
(iv) On the Closing Date, the Overfund Trust shall enter into
the Security Agreement to secure its obligations to make payments to Limestone
in accordance with Section 5.5(b) hereof.
(v) On the Closing Date, the Overfund Trust shall enter into
the Overfund Trust Agreement, the El Paso Debt Security Direction Letter and
each other Transaction Document to which it is a party.
(m) Share Trust. (i) On the Closing Date, the Share Trust
shall issue a certificate of beneficial interest in the Share Trust to El Paso
pursuant to the Share Trust Agreement against payment therefor of $4,000 by El
Paso.
(ii) On the Closing Date, the Share Trust shall purchase the
El Paso Preferred Stock and pay El Paso $2,000 and other good and valuable
consideration described in the Share Trust Agreement and the Transaction
Documents as full consideration therefor.
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(iii) On the Closing Date, the Share Trust shall enter into
the Share Trust Agreement, the Remarketing Agreement and each other Transaction
Document to which it is a party.
(n) The Indenture Trustee. On the Closing Date, the Indenture
Trustee shall enter into the Indenture, the Remarketing Agreement, the El Paso
Debt Security Direction Letter and each other Transaction Document to which it
is a party.
Section 2.4 Consent.
Pursuant to the Original
Participation Agreement, each of the
parties thereto, on behalf of itself and its successors and assigns, consented
to and approved of all transactions contemplated thereby and by any other
Transaction Document or other document referred to therein, and each such party,
for itself and its successors and assigns, represented that no transaction
contemplated thereby or by any Transaction Document or other document referred
to therein constituted or gave rise to a Default or Liquidating Event under the
Chaparral LLC Agreement or any other Transaction Document on the part of such
party; provided that such consent, approval and representation shall not affect
any right of any such party to indemnity or reimbursement under any Transaction
Document.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to the Occurrence of the Closing Date.
The obligation of each party to the Original
Participation
Agreement to enter into the transactions described in Section 2.3 hereof on or
prior to the Closing Date shall be (i) subject to the terms and conditions
hereof, (ii) on the basis of the representations and warranties set forth herein
and (iii) subject to the satisfaction (or waiver by such party) on or prior to
the Closing Date of the following conditions precedent:
(a) Transaction Documents. Each of the Transaction Documents
entered into or required to be entered into on or prior to the Closing Date
shall be reasonably satisfactory to such party and shall, upon execution and
delivery thereof as contemplated in Section 3.1(b), be in full force and effect.
(b) Authorization, Execution and Delivery of Documents. Each
of the Transaction Documents entered into or required to be entered into on or
prior to the Closing Date shall have been duly authorized, executed and
available for delivery by each of the parties thereto (other than such party).
Such party shall have received a true and correct copy of each Transaction
Document (not furnished in original form) entered into or required to be entered
into on or prior to the Closing Date, including without limitation all
amendments and supplements to each such Transaction Document.
(c) Collateral. All actions necessary, in the reasonable
opinion of such party (other than the Indenture Trustee), in order to
effectively establish and create a first priority lien
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and perfected security interest in the Security for the Limestone Notes,
subject, in each case, only to Permitted Liens, shall have been duly taken (or
provisions therefor shall have been made), including without limitation, the
making of all conveyances, registrations and filings.
(d) Ratings. El Paso shall have received ratings letters from
S&P and Xxxxx'x, confirming that the Initial Notes have been rated at least
"BBB-" by S&P and "Baa3" by Xxxxx'x, respectively.
(e) Opinions. Opinions addressed to the Arranger and the
Certificateholders (except as otherwise specified below) dated the Closing Date
of the following counsel (or, if counsel is not identified, of counsel
reasonably satisfactory to such Persons), shall have been delivered to the
applicable addressees, each such opinion to be reasonably satisfactory to the
recipients and their counsel:
(i) Xxxxx, Day, Xxxxxx & Xxxxx, counsel to El Paso,
with a separate opinion as to the non-consolidation of certain
entities.
(ii) Xxxxx Xxxxxxx, senior counsel of El Paso;
(iii) King & Spalding, FERC counsel to El Paso;
(iv) Potter Xxxxxxxx & Xxxxxxx LLP, special Delaware
counsel to El Paso;
(v) Xxxxxxxx, Xxxxxx & Finger, P.A., counsel to
Wilmington Trust Company (addressed to El Paso, the Arranger and the
Certificateholders);
(vi) Xxxxxx & Xxxxxx LLP, counsel to the Indenture
Trustee;
(vii) Xxxxx Xxxxxxxxxx LLP, special counsel to the
Certificateholders (addressed to the Certificateholders only), with a
separate opinion addressed to El Paso as to the enforceability of each
Transaction Document to which the Certificateholders are parties), and
a separate opinion addressed to the Arranger, the Certificateholders
and El Paso as to the status of the Certificateholders as Qualified
Purchasers; and
(viii) Milbank, Tweed, Xxxxxx & XxXxxx LLP, special
counsel to the Arranger (addressed to the Arranger only), with a
separate opinion addressed to El Paso as to the enforceability of the
Remarketing Agreement against DLJ.
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(f) Closing Certificates. (i) On the Closing Date, such party
shall have received a certificate of each other party (other than the
Certificateholders and the Limestone Lender) dated the Closing Date in form and
substance reasonably satisfactory to such party, certifying (A) as to the facts
and circumstances applicable to the certifying party set forth in Section 3.1(h)
hereof, (B) that the Transaction Documents to which such certifying party is a
party have been duly executed and delivered by such certifying party and are in
full force and effect, and (C) such certifying party has satisfied all
conditions precedent (other than conditions precedent that have been waived)
contained in the Transaction Documents to which it is a party required to be
satisfied by it on or prior to the Closing Date.
(ii) On the Closing Date, such party shall have received a
certificate of each other party (other than the Certificateholders and the
Limestone Lender) dated the Closing Date in form and substance reasonably
satisfactory to such Person, attaching and certifying as of the Closing Date as
to (A) the certifying party's Organizational Documents, (B) the resolutions of
the certifying party's board of directors or other governing body, if
applicable, duly authorizing the certifying party's execution, delivery and
performance of each Transaction Document to which it is or is to be a party and
each other document required to be executed and delivered by it in accordance
with the provisions hereof or thereof and (C) the incumbency and signatures of
the Persons authorized to execute and deliver, as may be required hereunder,
documents on its behalf in connection with the transactions contemplated hereby
and by the other Transaction Documents.
(g) Fees and Expenses. On the Closing Date, El Paso shall have
paid or provided for payment (without duplication of any amounts paid in
connection with the Phase II
Participation Agreement or any agreements referred
to therein) of (i) the out-of-pocket expenses and fees due and payable through
the Closing Date, and the trustee fees for the first year, payable to Wilmington
Trust Company as the Electron Trustee under the Electron Trust Agreement, the
Limestone Trustee under the Limestone Trust Agreement, the Overfund Trustee
under the Overfund Trust Agreement and the Share Trustee under the Share Trust
Agreement, and the indenture trustee fees for the first year, payable to United
States Trust Company of
New York as the Indenture Trustee under the Indenture,
(ii) the out-of-pocket expenses and fees due and payable through the Closing
Date of the Arranger (in each case, including, to the extent an invoice therefor
has been delivered to El Paso at least one Business Day before the Closing Date,
the reasonable fees and expenses of counsel to such Persons through the Closing
Date), and (iii) to the extent an invoice therefor has been delivered to El Paso
at least one Business Day before the Closing Date, the out-of-pocket expenses of
the Certificateholders and any Certificateholder Related Person and the
reasonable fees and expenses of counsel to the Certificateholders through the
Closing Date, in each case, in accordance with the funding memorandum dated as
of the Closing Date.
(h) Certain Facts and Circumstances. (i) The representations
and warranties of each party set forth in this Agreement and each other
Transaction Document shall be true and correct on and as of the Closing Date
(both immediately prior to the consummation of the transactions intended to
occur on the Closing Date and also after giving effect thereto) in all material
respects as if made on and as of such date (or, if stated to have been made
solely as of an earlier date, were true and correct as of such date).
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(ii) No Default shall have occurred and be continuing on the
Closing Date.
(iii) No change in the financial or other condition of El Paso
shall have occurred that would reasonably be expected to result in an El Paso
Material Adverse Effect and no other act, event or circumstance shall have
occurred that has had or would reasonably be expected to have an El Paso
Material Adverse Effect.
(iv) There shall be no actions, suits, investigations or
proceedings at law or in equity by or before any Governmental Authority pending
or, to the actual knowledge of any Responsible Officer of El Paso, threatened,
and there shall not have been issued or, to the actual knowledge of any
Responsible Officer of El Paso, proposed to be issued any orders, judgments or
decrees by any Governmental Authority, to set aside, restrain, enjoin or prevent
the execution, delivery or performance of any of the Transaction Documents or
the consummation of the transactions contemplated thereby.
(i) No Liability. The closing of the transactions contemplated
hereby and by each of the other Transaction Documents will not violate any
Applicable Law in effect as of the Closing Date and will not subject any party
that was a party to the Phase II Participation Agreement (other than El Paso, El
Paso Chaparral Holding and El Paso Chaparral) to any Tax (other than any
Documentary Tax for which such Party is indemnified under the Transaction
Documents and other than income taxes incurred after December 28, 1999), penalty
or liability under or pursuant to any Applicable Law in effect as of the Closing
Date.
(j) Additional Documents and Certificates, Etc. The Arranger
and the Certificateholders shall have received such other documents,
certificates and opinions as any such Person or their counsel may reasonably
request.
Section 3.2 Reserved.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of El Paso.
El Paso makes the following representations and warranties on
its own behalf to the other Parties as of March 15, 2000 and as of the Closing
Date:
(a) Corporate Existence and Power. El Paso is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware. Each Relevant El Paso Party is duly incorporated or
organized, validly existing and in good standing in the jurisdiction of its
incorporation or organization. Each of El Paso and the Relevant El Paso Parties
possesses all corporate, partnership, limited liability company or other
applicable Business Entity powers and other authorizations and licenses
necessary to engage in its business and operations as now conducted and as
contemplated by the Transaction Documents (other than the Note Purchase
Agreement), the failure to obtain or maintain which would have an El Paso
Material Adverse Effect.
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(b) Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by each of El Paso and
the Relevant El Paso Parties of each Transaction Document (other than the Note
Purchase Agreement) to which it is a party are within its corporate,
partnership, limited liability company or other applicable Business Entity
powers, have been duly authorized by all necessary corporate, limited liability
company or other applicable Business Entity action, and do not contravene (i)
its Organizational Documents or (ii) any law or material contractual restriction
binding on or affecting it.
(c) Governmental Approvals. No authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by each of El Paso and
the Relevant El Paso Parties of each Transaction Document (other than the Note
Purchase Agreement) to which it is a party, except (i) those that have been
obtained or made and (ii) those that are necessary to comply with laws, rules,
regulations and orders required in the ordinary course to comply with the
ongoing obligations of (A) El Paso under Article V and (B) El Paso and the
Relevant El Paso Parties under the Transaction Documents to which they are a
party, provided that all authorizations, approvals, actions, notices and filings
described in this clause (ii) that are necessary to have been obtained or made
on or prior to the Closing Date for the consummation by El Paso and the Relevant
El Paso Parties of the transactions contemplated by the Transaction Documents or
are required to have been obtained or made on or prior to the Closing Date have
been obtained or made on or prior to the Closing Date.
(d) Binding Effect. Each Transaction Document (other than the
Note Purchase Agreement) to which any of El Paso and the Relevant El Paso
Parties is a party will be duly executed and delivered by El Paso and such
Relevant El Paso Party and, subject to the due execution and delivery by the
other parties thereto, will, upon such due execution and delivery, constitute
the legal, valid and binding obligations of El Paso and/or such Relevant El Paso
Party, as applicable, enforceable against El Paso and/or such Relevant El Paso
Party, as applicable, in accordance with its terms, except as may be limited by
any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors rights generally or by general principles of equity
(whether enforcement is sought by proceedings in equity or at law).
(e) Compliance with Laws. Each of El Paso and the Relevant El
Paso Parties is in compliance with all laws, rules, regulations and orders of
any governmental authority applicable to it or its property, except where the
failure to so comply, individually or in the aggregate, would not, in the
reasonable judgment of El Paso, be expected to result in an El Paso Material
Adverse Effect.
(f) Litigation. There is no action, suit or proceeding
pending, or, to the knowledge of any Responsible Officer of El Paso, threatened,
against or involving El Paso or any Relevant El Paso Party in any court, or
before any arbitrator of any kind, or before or by any governmental body, which,
in the reasonable judgment of El Paso (taking into account the exhaustion of all
appeals), would have an El Paso Material Adverse Effect, or which purports to
affect the legality, validity, binding effect or enforceability against El Paso
or any Relevant El Paso Party of any Transaction Document (other than the Note
Purchase Agreement) to which it is a party.
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(g) Taxes. Each of El Paso and the Relevant El Paso Parties
has duly filed all tax returns required to be filed, and has duly paid and
discharged all taxes, assessments and governmental charges upon it or against
its properties now due and payable, the failure to file or pay which would have
an El Paso Material Adverse Effect, unless and to the extent only that the same
are being contested by such Person in good faith and by appropriate proceedings.
(h) ERISA. (i) No ERISA Termination Event has occurred or is
reasonably expected to occur with respect to any Plan which, with the giving of
notice or lapse of time or both, would result in an aggregate liability of El
Paso or any ERISA Affiliate that would exceed 10% of the Net Worth of El Paso.
(ii) Each Plan has complied with the applicable provisions of
ERISA and the Code where the failure to so comply would reasonably be expected
to result in an aggregate liability that would exceed 10% of the Net Worth of El
Paso.
(iii) The statement of assets and liabilities of each Plan and
the statements of changes in fund balances and in financial position, or the
statement of changes in net assets available for plan benefits, for the most
recent plan year for which an accountant's report with respect to such Plan has
been prepared, fairly present the financial condition of such Plan as at such
date and the results of operations of such Plan for the plan year ended on such
date.
(iv) Neither El Paso nor any ERISA Affiliate has incurred, or
is reasonably expected to incur, any Withdrawal Liability to any Multiemployer
Plan which, when aggregated with all other amounts required to be paid to
Multiemployer Plans in connection with Withdrawal Liability (as of the date of
determination), would exceed 10% of the Net Worth of El Paso.
(i) Neither El Paso nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization, insolvent or has
been terminated, within the meaning of Title IV of ERISA, and no Multiemployer
Plan is reasonably expected to be in reorganization, to become insolvent or to
be terminated within the meaning of Title IV or ERISA, the effect of which would
result in an aggregate liability of El Paso or any ERISA Affiliate that would
exceed 10% of the Net Worth of El Paso.
(j) Financial Statements. PricewaterhouseCoopers LLP (the
"Auditors") are independent certified public accountants with respect to El Paso
within the meaning of the Securities Act and Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public Accountants
and its interpretations and rulings thereunder. The historical financial
statements of El Paso included or incorporated by reference in the Preliminary
Offering Memorandum and the Offering Memorandum and the related notes thereto
present fairly, in conformity with GAAP except as otherwise expressly noted
therein, the consolidated financial position of El Paso and its Subsidiaries at
the dates indicated and the statement of operations, stockholders' equity and
cash flows of El Paso and its Consolidated Subsidiaries for the periods
specified, and such financial statements have been prepared in accordance with
GAAP consistently applied throughout the periods purported to be covered
thereby. The pro forma financial statements and the related notes thereto, if
any, included or incorporated by reference in the Preliminary Offering
Memorandum and the Offering Memorandum present fairly the information shown
therein, have been properly compiled on the bases described therein, and the
12
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(k) Not an Investment Company. El Paso is not an "investment
company" within the meaning of the Investment Company Act. Each of the Relevant
El Paso Parties is not an "investment company" within the meaning of the
Investment Company Act.
(l) PUHCA. El Paso is not a "holding company" or a "subsidiary
company" of a "holding company" within the meaning of PUHCA. Each of the
Relevant El Paso Parties is not a "holding company" or a "subsidiary company" of
a "holding company" within the meaning of PUHCA.
(m) No Defaults. To the actual knowledge of any Responsible
Officer of El Paso, on the Closing Date there will exist no Default and no
Limestone Note Trigger Event on the part of El Paso under any of the Transaction
Documents (other than the Note Purchase Agreement) to which El Paso is a party.
(n) Presentation to Investors. Except with respect to (i)
financial projections and (ii) information for which the source is any
separately identified third party, the El Paso Energy Presentation to Investors
attached as Annex B hereto does not contain any untrue statement of material
fact or omit to state a material fact necessary in order for such information
(taken as a whole) not to be misleading in light of the circumstances in which
made with respect to (x) El Paso and its Subsidiaries, Limestone, Chaparral,
Mesquite, the Existing Assets or the New Assets referred to in clause (i) or
(ii) of the definition thereof and (y) the Transaction Documents.
(o) Due Diligence Presentation Material. Except with respect
to (i) financial projections and (ii) information for which the source is any
separately identified third party, the due diligence presentation material
attached as Annex C hereto does not contain any untrue statement of material
fact or omit to state a material fact necessary in order for such information
(taken as a whole) not to be misleading in light of the circumstances in which
made with respect to (x) El Paso and its Subsidiaries, Limestone, Chaparral,
Mesquite, the Existing Assets or the New Assets referred to in clause (i) or
(ii) of the definition thereof and (y) the Transaction Documents.
(q) Title to Property. Each of El Paso and the Relevant El
Paso Parties has good title to their respective properties and assets, free and
clear of all Liens, except for (A) Liens (including covenants, restrictions,
rights, easements and minor irregularities in title) that do not materially
interfere with the business or operations of such Person as presently conducted,
(B) Liens not prohibited by the El Paso Additional Credit Facility Agreement and
(C) the pledges and security interests provided to El Paso in connection with
the Mesquite Financing Documents, and except that no representation or warranty
is made with respect to Margin Stock.
(r) Disclosure. Except as set forth on Schedule I, there is no
fact known to El Paso, any Relevant El Paso Party, Chaparral or Mesquite after
reasonable inquiry that has specific application to El Paso, any Relevant El
Paso Party, Chaparral or Mesquite or the Project Companies (other than general
economic or industry conditions) and that, as far as El Paso can
13
reasonably foresee, would reasonably be expected to have an Aggregate Chaparral
Material Adverse Effect.
(s) Compliance. El Paso has complied with the covenants set
forth in Section 5.1 of the Phase II Participation Agreement for the period
commencing on December 28, 1999 and terminating on the Closing Date.
(t) Management Fee. The Management Company has not exercised,
and El Paso has not caused the Management Company to exercise, its rights under
Section 5.4 of the Phase II Participation Agreement.
Section 4.2 Representations and Warranties of El Paso with
Respect to Limestone, the Co-Issuer, Chaparral, Mesquite, the Overfund Trust and
the Share Trust.
El Paso makes the following representations and warranties
with respect to Limestone, the Co-Issuer, Chaparral, Mesquite, the Overfund
Trust and the Share Trust to the other Parties as of March 15, 2000 and as of
the Closing Date, except as otherwise specified:
(a) Existence and Power. Each of Limestone, the Overfund Trust
and the Share Trust (together, the "Trusts") is a business trust duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite trust powers and all material Permits required to carry on
its business as now conducted and as contemplated by the Transaction Documents.
Each of Chaparral and Mesquite is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite limited liability company powers and all material Permits
required to carry on its business as now conducted and as contemplated by the
Transaction Documents the failure to have which would reasonably be expected to
have an Aggregate Chaparral Material Adverse Effect. The Co-Issuer is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate powers and all
material Permits required to carry on its business as now conducted and as
contemplated by the Transaction Documents.
(b) Limestone and Co-Issuer Special Purpose Status. Limestone
has not engaged in any activities since its organization (other than those
incidental to its organization, activities referred to in or contemplated by the
Participation Agreement dated as of December 28, 1999 (the "Phase II
Participation Agreement") among El Paso, Limestone, Limestone Investors, DLJ
Inc., DLJ Capital Corporation, El Paso Chaparral Holding, El Paso Chaparral
Holding II, El Paso Chaparral, the Management Company, Chaparral, Mesquite and
Electron and other appropriate steps including the issuance of certificates
representing beneficial ownership interests in Limestone and arrangements for
the payment of fees to its trustees, the authorization and the issuance of the
Limestone Notes and the Limestone Certificates, the execution of the Transaction
Documents to which it is a party executed on or prior to March 15, 2000 and the
activities referred to in or contemplated by such Transaction Documents), and
has not made any distributions since its organization other than the
distributions made to Electron on January 18, 2000 in the amount of $33,578.13
and March 10, 2000 in the amount of $1,008,155.58, each with respect to a
special tax distribution pursuant to Section 5.01(c) of the Third Amended and
Restated Limited Liability Company Agreement of Chaparral. The Co-Issuer has not
engaged in
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any activities since its incorporation (other than those incidental to its
incorporation and other appropriate corporate steps including the issuance of
stock to Limestone and arrangements for the payment of fees to its directors,
the authorization and the issue of the Limestone Notes, the execution of the
Transaction Documents to which it is a party executed on or prior to March 15,
2000 and the activities referred to in or contemplated by such Transaction
Documents), and has not paid any dividends or made any distributions since its
incorporation.
(c) Overfund Trust Special Purpose Status. The Overfund Trust
has not engaged in any activities since its organization (other than those
incidental to its organization and other appropriate steps including (i)
arrangements for the payment of fees to its trustees, (ii) the issuance of a
certificate of beneficial interest in the Overfund Trust to Chaparral pursuant
to the Overfund Trust Agreement, (iii) the execution of the Transaction
Documents to which it is a party executed on or prior to March 15, 2000 and (iv)
the other activities referred to in or contemplated by the Overfund Trust
Agreement, this Agreement and the other Transaction Documents), and has not made
any distributions since its organization.
(d) Share Trust Special Purpose Status. The Share Trust has
not engaged in any activities since its organization (other than those
incidental to its organization and other appropriate steps including (i)
arrangements for the payment of fees to its trustees, (ii) the issuance of a
certificate of beneficial interest in the Share Trust to El Paso pursuant to the
Share Trust Agreement, (iii) the execution of the Transaction Documents to which
it is a party executed on or prior to March 15, 2000 and (iv) the other
activities referred to in or contemplated by the Share Trust Agreement, this
Agreement and the other Transaction Documents), and has not made any
distributions since its organization.
(e) Chaparral and Mesquite. The operations, activities and
business of each of Chaparral and Mesquite since its inception have been
conducted in accordance with its Organizational Documents, and each of Chaparral
and Mesquite has no accrued liabilities other than (i) any such liabilities in
connection with activities in accordance with the Phase II Participation
Agreement and any agreements referred to therein, (ii) any such liabilities that
will be paid in full upon the Closing Date, (iii) in the case of Chaparral, any
such liabilities that are set forth in Schedule II hereto and (iv) in the case
of Mesquite, any such liabilities that are not prohibited by the Chaparral LLC
Agreement or the Mesquite LLC Agreement.
(f) Trust, Corporate or Company and Governmental
Authorization; No Contravention. The execution, delivery and performance by each
of Limestone, the Co-Issuer, Chaparral, Mesquite, the Overfund Trust and the
Share Trust of each of the Transaction Documents (other than the Note Purchase
Agreement) to which it is a party are (i) within Limestone's trust powers, the
Co-Issuer's corporate powers, Chaparral's limited liability company powers,
Mesquite's limited liability company powers, the Overfund Trust's trust powers
and the Share Trust's trust powers, as the case may be, (ii) have been duly
authorized by all necessary trust, corporate or limited liability company
action, as the case may be, (iii) require in respect of Limestone, the
Co-Issuer, Chaparral, Mesquite, the Overfund Trust and the Share Trust, as the
case may be, no action by or in respect of, or filing (except Uniform Commercial
Code continuation statements to be filed in the future) with, any Governmental
Authority that has not been taken or made and (iv) do not contravene, or
constitute a default under, any provision of Applicable Law in effect on the
Closing Date or of Limestone's, the Co-Issuer's, Chaparral's,
15
Mesquite's, the Overfund Trust's or the Share Trust's Organizational Documents,
or of any agreement or other instrument binding upon Limestone, the Co-Issuer,
Chaparral, Mesquite, the Overfund Trust or the Share Trust, as the case may be,
or result in the creation or imposition of any Lien on any asset of Limestone,
the Co-Issuer, Chaparral, Mesquite, the Overfund Trust or the Share Trust, as
the case may be, except for (A) Permitted Liens, in the case of Chaparral or
Mesquite and (B) Permitted Liens of the type described in clause (iii) of the
definition thereof, in the case of Limestone, the Co-Issuer, the Overfund Trust
or the Share Trust.
(g) Binding Effect. (i) Each of the Transaction Documents
(other than the Note Purchase Agreement) to which any of Limestone, Chaparral,
Mesquite, the Overfund Trust or the Share Trust is a party has been or on the
Closing Date will be duly executed and delivered by such Party and, subject to
the due execution and delivery by the other parties thereto, each of the
Transaction Documents (other than the Note Purchase Agreement) to which any of
Limestone, Chaparral, Mesquite, the Overfund Trust or the Share Trust is a party
constitutes or will constitute (or in the case of the Limestone Notes, when duly
authenticated, issued, paid for and delivered in accordance with the Indenture
and the Note Purchase Agreement, will constitute) a legal, valid and binding
obligation of Limestone, Chaparral, Mesquite, the Overfund Trust or the Share
Trust, as the case may be, enforceable against Limestone, Chaparral, Mesquite,
the Overfund Trust or the Share Trust, as the case may be, in accordance with
its terms except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
(ii) Each of the Transaction Documents (other than the Note
Purchase Agreement) to which the Co-Issuer is a party has been or on the Closing
Date will be duly executed and delivered by the Co-Issuer and, subject to the
due execution and delivery by the other parties thereto, each of the Transaction
Documents (other than the Note Purchase Agreement) to which the Co-Issuer is a
party constitutes or will constitute (or in the case of the Limestone Notes,
when duly authenticated, issued, paid for and delivered in accordance with the
Indenture and the Note Purchase Agreement, will constitute) a legal, valid and
binding obligation of the Co-Issuer, enforceable against the Co-Issuer in
accordance with its terms except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles (whether enforcement is sought by proceedings in equity or at law).
(h) Security for the Limestone Notes. The Grant (as defined in
the Indenture) of the Security for the Limestone Notes securing the payment of
the Secured Obligations (as defined in the Indenture) for the benefit of the
Indenture Trustee and the Holders of the Limestone Notes will constitute a
valid, first priority, perfected security interest in the Security for the
Limestone Notes, free and clear of any Lien or claims of any Person (other than
Permitted Liens), to the extent perfection can occur under Article 8 and Article
9 of the
New York UCC by possession, filing of a financing statement or control
of a securities account. Following such perfection, such security interest will
be enforceable as such subject to Permitted Liens against all creditors of
Limestone and any Persons purporting to purchase any of the Security for the
Limestone Notes from Limestone, except in each case as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the
16
enforcement of creditors' rights generally and general equitable principles
(whether enforcement is sought by proceedings in equity or at law) and other
than as permitted by the Transaction Documents. None of Limestone, Chaparral,
Mesquite, the Overfund Trust or the Share Trust has executed any valid financing
statement covering the Indenture Trustee's interest in the Security for the
Limestone Notes that is on file in any public office other than the financing
statements, if any, filed pursuant to the Transaction Documents and the
financing statements, if any, with respect to the Limestone Loan.
(i) No Consents. (i) The execution, delivery and performance
by each of Limestone, the Co-Issuer, Chaparral, Mesquite, the Overfund Trust or
the Share Trust of each Transaction Document (other than the Note Purchase
Agreement) to which each of Limestone, the Co-Issuer, Chaparral, Mesquite, the
Overfund Trust or the Share Trust is a party do not require the consent or the
approval or authorization of, or any filing, registration or qualification with,
any Person or any Governmental Authority on the part of such Party as a
condition to such execution, delivery and performance by it as and when required
that has not been obtained, given or taken except where the failure to obtain
such consent, approval or authorization, or make such filing, registration or
qualification, would not reasonably be expected to have, in the case of
Chaparral or Mesquite, an Aggregate Chaparral Material Adverse Effect.
(ii) The offering of the Limestone Securities by Limestone and
the Co-Issuer and the creation of the Security for the Limestone Notes do not
require the consent or the approval or authorization of, or filing, registration
or qualification with, any Person or any Governmental Authority on the part of
Limestone or the Co-Issuer as a condition to such execution, delivery and
performance as and when required which has not been obtained, given or taken
except (i) for filings of financing statements to perfect the security interests
contemplated by the Indenture and (ii) where the failure to obtain such consent,
approval or authorization, or filing, registration or qualification would not
have an Issuer Material Adverse Effect. Neither the issuance or delivery of the
Limestone Notes to the Initial Purchaser, nor the consummation of any other of
the transactions contemplated herein, nor compliance with the provisions of the
Indenture, will conflict with or result in, the breach of any material term or
provision of any agreements to which Limestone or the Co-Issuer is a party, or
constitute a violation of any Applicable Law.
(j) Litigation. There is no Proceeding pending against or,
after reasonable inquiry, to the actual knowledge of any Responsible Officer of
El Paso, threatened against any of Limestone, the Co-Issuer, Chaparral,
Mesquite, the Overfund Trust or the Share Trust before any Governmental
Authority.
(k) Tax Claims. There is no Tax claim pending against or,
after reasonable inquiry, to the actual knowledge of any Responsible Officer of
El Paso, threatened against any of Limestone, the Co-Issuer, Chaparral,
Mesquite, the Overfund Trust or the Share Trust. Limestone and the Co-Issuer
have each paid all Taxes that they are required to have paid prior to March 15,
2000 and prior to the Closing Date.
(l) Not an Investment Company. None of Limestone, the
Co-Issuer, Chaparral, Mesquite, the Overfund Trust and the Share Trust will be
required to be registered as an "investment company" within the meaning of the
Investment Company Act, and none of
17
Limestone, the Co-Issuer, Chaparral, Mesquite, the Overfund Trust or the Share
Trust will become such as a result of the issuance and sale of the Limestone
Notes and the Limestone Certificates or the other transactions contemplated by
the Transaction Documents.
(m) Liens. (i) There are no Liens of any kind (other than
Permitted Liens described under clause (iii) of the definition thereof)
affecting title to any of the assets or rights of any of Limestone, the
Co-Issuer, the Overfund Trust or the Share Trust under any Transaction Documents
(other than the Note Purchase Agreement).
(ii) There are no Liens of any kind (other than Permitted
Liens) affecting title to any of the assets or rights of Chaparral or Mesquite
under any Transaction Documents (other than the Note Purchase Agreement).
(n) Compliance. Each of Limestone, the Co-Issuer, Chaparral,
Mesquite, the Overfund Trust and the Share Trust is not in breach or violation
of or in default (nor, after reasonable inquiry, to the actual knowledge of any
Responsible Officer of El Paso, has an event occurred that with notice or lapse
of time or both would constitute a default) under the terms of (i) its
Organizational Documents, (ii) any of the Transaction Documents (other than the
Note Purchase Agreement) or any other agreements to which Limestone, Chaparral,
Mesquite, the Overfund Trust or the Share Trust is a party, as the case may be,
or (iii) any Applicable Law, the default in or the breach or violation of which
in the case of clauses (ii) and (iii), would reasonably be expected to have (A)
an Aggregate Chaparral Material Adverse Effect, in the case of Chaparral or
Mesquite, or (B) an Issuer Material Adverse Effect, in the case of Limestone or
the Co-Issuer.
(o) Margin Compliance. No part of the proceeds of the sale of
the Limestone Securities will be used, directly or indirectly, for the purpose
of purchasing or carrying any "margin stock" within the meaning of Regulations U
and X of the Board of Governors of the Federal Reserve System.
(p) Indebtedness. None of Limestone, the Co-Issuer, Chaparral,
Mesquite, the Overfund Trust and the Share Trust has created, assumed or
incurred any indebtedness in violation of its Organizational Documents or any
other Transaction Document.
(q) Employees; Subsidiaries. (i) Limestone, the Co-Issuer, the
Overfund Trust and the Share Trust have no employees, no subsidiaries (other
than the Co-Issuer in the case of Limestone) and no place of business outside of
the State of Delaware.
(ii) Chaparral has no employees, no direct subsidiaries (other
than Mesquite and the Overfund Trust (as of the Closing Date)), and no place of
business outside of the State of Delaware; provided that Chaparral may be
required to qualify as a foreign Business Entity in certain jurisdictions.
(iii) Mesquite has no employees, no subsidiaries, other than
Mesquite Operating Subsidiaries, and no place of business outside of the State
of Delaware; provided that Mesquite is or may be required to qualify as a
foreign Business Entity in Massachusetts and certain other jurisdictions.
18
(r) Compliance with Environmental Law. Each of Limestone, the
Co-Issuer, Chaparral, Mesquite, the Overfund Trust and the Share Trust is in
compliance with all, and is not subject to current liability under any,
applicable Environmental Law except, in the case of Chaparral or Mesquite, for
any such non-compliance or liability that would not reasonably be expected to
have an Aggregate Chaparral Material Adverse Effect.
(s) PUHCA. None of Limestone, the Co-Issuer, Chaparral,
Mesquite, the Overfund Trust and the Share Trust is subject to regulation as a
"holding company" or a "subsidiary company" or an "affiliate" of a "holding
company," in each case as such terms are defined in the PUHCA.
(t) FPA. None of Limestone, the Co-Issuer, Chaparral,
Mesquite, the Overfund Trust and the Share Trust is in the business of
producing, transmitting or selling electrical power and the principal business
of each of Limestone, the Co-Issuer, Chaparral, Mesquite, the Overfund Trust or
the Share Trust is other than that of a "public utility" as such term is defined
in Section 201 of the FPA and the orders of the FERC interpreting such section.
(u) Securities Act. Assuming that the representations of the
Initial Purchaser relating to matters of securities law set forth in the Note
Purchase Agreement and the representations of the Certificateholders relating to
matters of securities law set forth in the Limestone Trust Agreement and in the
Investment Certificate (as defined in the Limestone Trust Agreement) delivered
by them pursuant hereto and thereto are true and correct, and assuming
compliance by the Initial Purchaser and the Certificateholders with the
restrictive legends contained in the Limestone Notes and the Limestone
Certificates, respectively, the sale of the Limestone Notes and the Limestone
Certificates by Limestone in the manner contemplated by the Note Purchase
Agreement and the Limestone Trust Agreement, respectively, will be exempt from
the registration requirements of the Securities Act by reason of Section 4(2)
thereof.
(v) Title to Property. Immediately after giving effect to the
transactions occurring as of March 15, 2000, Chaparral has good title to its
properties and assets that are material to the operations of Chaparral, free and
clear of all Liens, except (A)(1) Permitted Liens and (2) the pledges and
security interests provided to El Paso in connection with the Mesquite Financing
Documents, or (B) where the failure to own or have good title to such properties
and assets, or the existence of such Lien, would not have an Aggregate Chaparral
Material Adverse Effect.
(w) No Defaults. To the actual knowledge of any Responsible
Officer of El Paso, no Event of Default has occurred and is continuing and no
condition, event or act has occurred and is continuing which with the giving of
notice and/or the lapse of time and/or any determination or certification would
constitute an Event of Default.
Section 4.3 Representations and Warranties of El Paso with
Respect to the New Assets.
(a) Except for, or with respect to, any acquisition of New
Assets during a period during which the Class A Member has exercised its rights
under Section 6.1(a) of the Chaparral LLC Agreement or Section 5.2 of the
Management Agreement to (i) remove
19
(A) El Paso Chaparral as the Managing Member of Chaparral or (B) the Management
Company as the Manager under the Management Agreement, or (ii) cause (A) El Paso
Chaparral to cease to act as the Managing Member of Chaparral or (B) the
Management Company to cease to act as the Manager under the Management Agreement
(any such period, the "Replacement Period"), El Paso shall be deemed to make to
the Certificateholders as of the date of the acquisition by purchase,
contribution or exchange of each New Asset the following representations and
warranties with respect to such New Asset at the time of, and immediately after,
giving effect to the acquisition of such New Asset; provided, however, that the
breach of, or inaccuracy in, such representations and warranties shall not
constitute a Default under any of the Transaction Documents but shall be subject
to the indemnity contained in Section 6.1.
(b) Organization; Authority. The Chaparral Operating
Subsidiary, Mesquite Operating Subsidiary or the Underlying Entity, as
applicable, is duly incorporated, in the case of a corporation, or organized, in
the case of any other Business Entity, validly existing and, to the extent
applicable, and except where the failure to be in good standing would not
reasonably be expected to have an Aggregate Chaparral Material Adverse Effect,
in good standing under the laws of the state of its jurisdiction of
incorporation or organization. Such Chaparral Operating Subsidiary, such
Mesquite Operating Subsidiary and their Subsidiaries or such Underlying Entity,
as applicable have all corporate, limited liability company and other applicable
Business Entity power and authority and all Permits required in each case to
carry on its business, except to the extent that the failure to have such power,
authority and Permits would not reasonably be expected to have an Aggregate
Chaparral Material Adverse Effect.
(c) No Violation. The execution, delivery and performance by
(i) such Mesquite Operating Subsidiary of the relevant Investment Agreement or
(ii) any of El Paso, El Paso Chaparral Holding, El Paso Chaparral, Chaparral,
Mesquite, any Chaparral Operating Subsidiary, any Mesquite Operating Subsidiary
or any Underlying Entity (collectively, the "Reference Entities") of the
relevant Contingent Debt Instrument or New Contingent Debt Instrument and
related documents, if any, to which it is a party, in each case, do not (1)
violate any Applicable Law to which any of such Reference Entities, as
applicable, is a party or to which any of such Reference Entities, as
applicable, is subject; or (2) conflict with, or result in a breach or violation
of the terms of any agreement, contract, indenture or other instrument to which
any of such Reference Entities, as applicable, is a party or to which any of
their respective properties is subject, except in the case of clause (1) or (2)
as would not reasonably be expected to have, in the case of El Paso, El Paso
Chaparral Holding or El Paso Chaparral, an El Paso Material Adverse Effect, or
in the case of any other Reference Entity, an Aggregate Chaparral Material
Adverse Effect.
(d) Approvals. The execution, delivery and performance by (i)
such Chaparral Operating Subsidiary or such Mesquite Operating Subsidiary, as
applicable, of the relevant Investment Agreement or (ii) any of such Reference
Entities of such Contingent Debt Instrument or New Contingent Debt Instrument
and related documents, if any, to which it is a party, in each case, do not
require the consent, approval, order or authorization of any Government
Authority or, any other Person under any Permit, agreement, indenture or other
instrument to which any of such Reference Entities, as applicable, is a party or
to which any of its respective properties are subject, and no declaration,
filing or registration with any Governmental Authority is required by any of
such Reference Entities, as applicable, in
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connection with the execution, delivery and performance by it of such Investment
Agreement or Contingent Debt Instrument or New Contingent Debt Instrument and
related documents, if any, to which it is a party, as applicable, except in each
case above as has been obtained or made or as would not reasonably be expected
to have, in the case of El Paso, El Paso Chaparral Holding or El Paso Chaparral,
an El Paso Material Adverse Effect, or in the case of any other Reference
Entity, an Aggregate Chaparral Material Adverse Effect.
(e) Litigation. Except as set forth in the Disclosure
Schedule, no action, suit or proceeding has been commenced and is pending, or,
to the actual knowledge of any Responsible Officer of El Paso, threatened
against any of such Reference Entities, as applicable, before any Governmental
Authority, challenging the legality of or seeking to restrain or enjoin the
acquisition of such New Asset or except for matters that, if adversely
determined, would not reasonably be expected to have, in the case of El Paso, El
Paso Chaparral Holding or El Paso Chaparral, an El Paso Material Adverse Effect,
or in the case of any other Reference Entity, an Aggregate Chaparral Material
Adverse Effect.
(f) Environmental Matters. Except as set forth in the
Disclosure Schedule, the operation of any of such Reference Entities, as
applicable, are conducted in compliance with all applicable Environmental Laws,
except to the extent the failure to comply with such applicable Environmental
Laws would not reasonably be expected to have, in the case of El Paso, El Paso
Chaparral Holding or El Paso Chaparral, an El Paso Material Adverse Effect, or
in the case of any other Reference Entity, an Aggregate Chaparral Material
Adverse Effect. Except as set forth in the Disclosure Schedule, to the actual
knowledge of any Responsible Officer of El Paso, none of such Reference
Entities, as applicable, has received any notice, notification, demand, request
for information, citation, summons or order from, and no complaint has been
filed by, and no penalty has been assessed by, any Governmental Authority with
respect to matters arising out of or relating to any applicable Environmental
Law that would, individually or in the aggregate, reasonably be expected to
have, in the case of El Paso, El Paso Chaparral Holding or El Paso Chaparral, an
El Paso Material Adverse Effect, or in the case of any other Reference Entity,
an Aggregate Chaparral Material Adverse Effect.
(g) Compliance with Law. Except as set forth in the Disclosure
Schedule, none of such Reference Entities, as applicable, has violated, or to
the actual knowledge of any Responsible Officer of El Paso, is under
investigation with respect to or has been threatened to be charged with or given
notice of any material violation of, any Applicable Law, except as would not
reasonably be expected to have, in the case of El Paso, El Paso Chaparral
Holding or El Paso Chaparral, an El Paso Material Adverse Effect, or in the case
of any other Reference Entity, an Aggregate Chaparral Material Adverse Effect.
(h) Taxes. Except as set forth in the Disclosure Schedule, (i)
all tax returns of or with respect to any Tax that are required to have been
filed by or with respect to (x) such Chaparral Operating Subsidiary or such
Mesquite Operating Subsidiary, as applicable, on or before the Investment
Closing Date or (y) such Underlying Entity on or before the closing of the
purchase of the relevant Contingent Debt Instrument or New Contingent Debt
Instrument, in each case, (1) have been timely filed and (2) include all items
of income, gain, loss, deduction and credit or other items required to be
included in each such tax return, (ii) all information provided in each such tax
return is true, correct and complete in all material respects, (iii) all
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Taxes that have become due with respect to the period covered by each such tax
return have been timely paid in full or are being contested in good faith by
appropriate proceedings and for which adequate reserves have been established in
accordance with GAAP on the books and records of the Person contesting such
Taxes, and (iv) all withholding Tax requirements imposed on or with respect to
(x) such Chaparral Operating Subsidiary or such Mesquite Operating Subsidiary,
as applicable, since the Investment Closing Date or (y) such Underlying Entity
since the closing of the purchase of the Contingent Debt Instrument or New
Contingent Debt Instrument, have been satisfied in full in all material respects
or are being contested in good faith by appropriate proceedings, except where
the failure of any statement contained in clauses (i), (ii), (iii) or (iv) above
to be true would not reasonably be expected to have an Aggregate Chaparral
Material Adverse Effect.
(i) Subsidiary Assets. Except as set forth in the Disclosure
Schedule, the assets owned or used under valid lease, license or other
contractual rights by such Chaparral Operating Subsidiary or such Mesquite
Operating Subsidiary, as applicable, (or any Subsidiary thereof that consists of
an operating business) (i) constitute all of the assets necessary for the
conduct of the business conducted by such Chaparral Operating Subsidiary or such
Mesquite Operating Subsidiary, as applicable, as currently conducted and (ii)
have been maintained in accordance with standard industry practices, ordinary
wear and tear and retirements in accordance with ordinary industry practice
excepted, except where the failure of any statement contained in clauses (i) or
(ii) above to be true would not reasonably be expected to have an Aggregate
Chaparral Material Adverse Effect.
(j) Information. (i) Any historical financial statements that
have been prepared by El Paso or its Affiliates for such Chaparral Operating
Subsidiary or such Mesquite Operating Subsidiary or such Underlying Entity, as
applicable, set forth in any information provided to Limestone or the
Certificateholders have been prepared in accordance with GAAP and fairly present
in all material respects the financial position of such Chaparral Operating
Subsidiary or such Mesquite Operating Subsidiary or such Underlying Entity, as
applicable, as at the dates thereof and the results of operations and cash flows
for the periods set forth therein and (ii) any statistical and market-related
data prepared by El Paso or its Affiliates with respect to such Chaparral
Operating Subsidiary or such Mesquite Operating Subsidiary or such Underlying
Entity, as applicable, that are set forth in any information provided to
Limestone or the Certificateholders are based on or derived from sources that El
Paso believes to be reliable and accurate in all material respects and are based
upon assumptions and qualifications that El Paso considers reasonable and
appropriate in all material respects.
(k) Costs of Investments. No New Asset shall be acquired that
shall require Mesquite, Chaparral or any member thereof to qualify to do
business, obtain any permit or pay any tax in the jurisdiction in which such New
Asset is acquired nor shall Mesquite or Chaparral be responsible for any
expenses or any other amounts for which the entity in which such New Asset is
acquired may be or become liable, except for any such required qualification,
permit or tax, or any such expenses, (i) that would not reasonably be expected
to have an Aggregate Chaparral Material Adverse Effect or (ii) as to which
Limestone, any Certificateholder or Certificateholder Related Person is
indemnified under Section 6.1(a).
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(l) Binding Effect. Each of the Contingent Debt Instrument or
New Contingent Debt Instrument and related documents to which any Reference
Entity is a party has been or, on the closing date of the purchase of such
Contingent Debt Instrument or New Contingent Debt Instrument, will be duly
executed and delivered by such Reference Entity party thereto and, subject to
the due execution and delivery by the other parties thereto, each of the
Contingent Debt Instrument or New Contingent Debt Instrument and related
documents to which such Reference Entity is a party constitutes or, on the
closing date of the purchase of such Contingent Debt Instrument or New
Contingent Debt Instrument, will constitute a legal, valid and binding
obligation of such Reference Entity, enforceable against such Reference Entity
in accordance with its terms except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
Section 4.4 Representations and Warranties of El Paso with
Respect to the Specified New Assets.
El Paso shall be deemed to make to the Certificateholders as
of March 15, 2000 and as of the Closing Date the following representation and
warranty with respect to the Specified New Assets after giving effect to the
contribution of such Specified New Assets from El Paso indirectly to Mesquite;
provided, however, that the breach of, or inaccuracy in, such representation and
warranty shall not constitute a Default under any of the Transaction Documents
but shall be subject to the indemnity contained in Section 6.1:
Each subsidiary of Chaparral (other than the Project Companies
or any subsidiary directly owning a Project Company) owning, directly or
indirectly, Specified New Assets owns such Specified New Assets free and clear
of all Liens other than the Liens set forth on Schedule III hereto.
Section 4.5 Representations and Warranties of the Indenture
Trustee.
United States Trust Company of
New York, in its individual
capacity, makes the following representations and warranties on its own behalf
to the other Parties as of March 15, 2000 and as of the Closing Date:
(a) Corporate Existence and Power. United States Trust Company
of
New York is a banking corporation duly organized, validly existing and in
good standing under the laws of the State of
New York and has all requisite
corporate powers and all material Permits required to carry on its business as
now conducted and as contemplated by the Transaction Documents.
(b) Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by United States Trust
Company of New York, in its individual or trustee capacity, as applicable, of
each of the Transaction Documents to which it is a party are within United
States Trust Company of New York's corporate powers, have been duly authorized
by all necessary corporate action and do not contravene, or constitute a default
under, any provision of the Organizational Documents of United States Trust
Company of New York.
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(c) Binding Effect. Each of the Transaction Documents to which
United States Trust Company of New York, in its individual or trustee capacity,
is a party has been duly executed and delivered by United States Trust Company
of New York and each constitutes a legal, valid and binding agreement of United
States Trust Company of New York enforceable against United States Trust Company
of New York in accordance with its terms except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
Section 4.6 Representations and Warranties of Wilmington Trust
Company.
Wilmington Trust Company, in its individual capacity, hereby
represents and warrants to the other Parties as of March 15, 2000 and as of the
Closing Date that:
(a) it is duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(b) it has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement and each other
Transaction Document to which it is a party, and this Agreement and each other
Transaction Document to which it is a party have been duly authorized by it by
all necessary corporate action;
(c) no authorization, consent or approval of any governmental
authority, regulatory body or other Person is required for the due
authorization, execution, delivery or performance by it of this Agreement and
any Transaction Document to which it is a party;
(d) this Agreement and any Transaction Document to which it is
a party have been duly executed and delivered by it and (subject to the due
execution and delivery by the other parties hereto) constitute its legal and
binding obligation, enforceable against it in accordance with their terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in effect,
relating to the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity); and
(e) it complies with all the requirements of the Act relating
to the qualification of a trustee of a Delaware business trust.
ARTICLE V
COVENANTS; ACKNOWLEDGEMENTS
Section 5.1 Covenants of El Paso.
El Paso covenants and agrees (except, in the case of
Chaparral, Mesquite and the Overfund Trust, during any Replacement Period), from
and after the Closing Date, for the
24
benefit of the other Parties and the Certificateholders, as follows, so long as
any of the Limestone Notes or the Limestone Certificates shall remain
outstanding:
(a) Maintenance of Existence. (i) El Paso shall at all times
preserve and maintain its legal existence; provided that this Section 5.1(a)(i)
shall not apply to or prohibit any merger or consolidation or other act to
similar effect where El Paso is the survivor or the survivor assumes all of the
obligations of El Paso under the Transaction Documents (other than the Note
Purchase Agreement, the Closing Agreement and the Dealer Manager Agreement) to
which El Paso is a party and no Limestone Note Trigger Event, Specified Equity
Event or Limestone Certificate Trigger Event or event that with the giving of
notice or lapse of time, or both, would become a Limestone Note Trigger Event,
Specified Equity Event or Limestone Certificate Trigger Event shall have
occurred and be continuing immediately after giving effect to such merger,
consolidation or other act to similar effect.
(ii) El Paso shall at all times cause Limestone to preserve
and maintain its legal existence, rights (charter, if applicable, and statutory)
and material franchises except as otherwise provided in the Limestone Trust
Agreement.
(iii) El Paso shall at all times (except during a Replacement
Period) cause each Relevant El Paso Party, to the extent within its power, to
cause the Overfund Trust to preserve and maintain its legal existence, rights
(charter, if applicable, and statutory) and material franchises except as
otherwise provided in the Overfund Trust Agreement.
(iv) El Paso shall at all times cause the Share Trust to
preserve and maintain its legal existence, rights (charter, if applicable, and
statutory) and material franchises except as otherwise provided in the Share
Trust Agreement.
(v) El Paso shall cause each of the Relevant El Paso Parties
at all times to preserve and maintain its legal existence, rights (charter, if
applicable, and statutory) and franchises; provided, that this Section 5.1(a)(v)
shall not apply to or prohibit any merger or consolidation or other act to
similar effect where the applicable Relevant El Paso Party is the survivor or
the survivor assumes all of the obligations of such applicable Relevant El Paso
Party under the Transaction Documents (other than the Note Purchase Agreement)
to which such applicable Relevant El Paso Party is a party and no Limestone Note
Trigger Event, Specified Equity Event or Limestone Certificate Trigger Event
shall have occurred and be continuing immediately after giving effect to such
merger, consolidation or other act to similar effect; provided, further that El
Paso may permit any such Person to Dispose of any such rights or franchises if
El Paso shall determine that the preservation thereof is no longer desirable in
the conduct of the business of such Person and that the loss thereof would not
reasonably be expected to have an Aggregate Chaparral Material Adverse Effect.
(vi) El Paso shall cause each of Chaparral and Mesquite to, at
all times preserve and maintain its legal existence, rights (charter, if
applicable, and statutory) and material franchises; provided that El Paso may
permit any such Person to Dispose of any such rights or franchises if El Paso
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of such Person and that the loss thereof would not
reasonably be expected to have an Aggregate Chaparral Material Adverse Effect.
25
(b) Maintenance of Government Approvals and Permits. (i) El
Paso shall cause Chaparral, Mesquite, the Overfund Trust and the Share Trust to,
and shall take no action to cause Limestone not to, obtain and maintain, or
cause to be obtained and maintained, in full force and effect all necessary
Governmental Approvals and Permits required to be obtained in its name from time
to time, unless failure to obtain or maintain the same would not reasonably be
expected to have an Aggregate Chaparral Material Adverse Effect.
(ii) El Paso shall cause Chaparral, Mesquite, the Overfund
Trust and the Share Trust not to, and shall take no action to cause Limestone
to, take any action that would or might, or fail to take any action the failure
to take which would or might, reasonably be expected to cause any Government
Approval or Permit required to be obtained or maintained from time to time in
the name of any Mesquite Operating Subsidiary not to be so obtained or
maintained, the failure to obtain or maintain which would reasonably be expected
to have an Aggregate Chaparral Material Adverse Effect.
(c) Compliance with Laws. (i) El Paso shall, and shall cause
each of the Relevant El Paso Parties to, comply in all material respects with
all applicable laws, rules, regulations and orders (including, without
limitation, all environmental laws and laws requiring payment of all taxes,
assessments and governmental charges imposed upon it or upon its property except
to the extent contested in good faith by appropriate proceedings) the failure to
comply with which would have an El Paso Material Adverse Effect.
(ii) El Paso shall take no action to cause Limestone not to
comply with all Applicable Law, applicable Permits and applicable governmental
requirements, except where non-compliance therewith would not reasonably be
expected to result in an Aggregate Chaparral Material Adverse Effect.
(iii) El Paso shall cause Chaparral, Mesquite, the Share Trust
and the Overfund Trust to comply with all Applicable Law, applicable Permits and
applicable governmental requirements, except where non-compliance therewith
would not reasonably be expected to result in an Aggregate Chaparral Material
Adverse Effect.
(d) Insurance. El Paso shall, on behalf of each of Chaparral
and Mesquite, maintain or cause to be maintained in effect, with underwriters or
insurance companies of repute, which may be Affiliates of El Paso, policies of
insurance in relation to the business and assets of Chaparral and Mesquite and
the business and assets of the Mesquite Operating Subsidiaries consistent with
normal industry standards for the business conducted by such Persons (including,
where appropriate consistent with the foregoing standard, policies to cover
public and third party liability and insurance against business interruption).
(e) Information. El Paso shall deliver to Limestone, the
Indenture Trustee and the Rating Agencies by making available on "XXXXX" or El
Paso's home page on the "World Wide Web" at xxx.xxxxxx.xxx, or otherwise
transmitting to Limestone, the Indenture Trustee and the Rating Agencies (i)
promptly after the sending or filing thereof, a copy of each of El Paso's
reports on Form 8-K (or any comparable form), (ii) promptly after the filing or
sending thereof, and in any event within 45 days after the end of each of the
first three fiscal quarters of each fiscal year of El Paso a copy of El Paso's
report on Form 10-Q (or any comparable form) for
26
such quarter, which report will include El Paso's quarterly unaudited
consolidated financial statements as of the end of and for such quarter, (iii)
promptly after the filing or sending thereof, and in any event within 90 days
after the end of each fiscal year of El Paso, a copy of El Paso's report on Form
10-K (or any comparable form) for such year, (iv) promptly after the filing or
sending thereof, and in any event within 120 days after the end of each fiscal
year of El Paso, a copy of El Paso's annual report which it sends to its public
security holders, which annual report or Form 10-K will include El Paso's annual
audited consolidated financial statements as of the end of and for such year and
(v) notice or a copy of any filing by El Paso of a report on Form 8-K (or any
comparable form) sent pursuant to Section 7.2 hereof.
(ii) El Paso shall deliver to Limestone, the Indenture Trustee
and the Rating Agencies simultaneously with the furnishing of each of the annual
or quarterly reports referred to in clause (i) above, a certificate of a
Responsible Officer of El Paso in a form reasonably acceptable to the Indenture
Trustee stating whether, to the knowledge of El Paso, there exists on the date
of such certificate any Event of Default, any New Indenture Event of Default, a
Limestone Note Trigger Event, a Specified Equity Event or a Limestone
Certificate Trigger Event, and if so, setting forth the details thereof and the
action that El Paso has taken and proposes to take with respect thereto;
(iii) El Paso shall deliver to Limestone, the Indenture
Trustee and the Rating Agencies (A) as soon as possible and in any event within
the five Business Days after a Responsible Officer of El Paso obtains knowledge
thereof, notice of the occurrence of any Event of Default, any New Indenture
Event of Default, a Limestone Note Trigger Event, a Specified Equity Event or a
Limestone Certificate Trigger Event, or any event which, with the giving of
notice or lapse of time, or both, would constitute an Event of Default, a New
Indenture Event of Default, a Limestone Note Trigger Event, a Specified Equity
Event or a Limestone Certificate Trigger Event, continuing on the date of such
notice, and a statement of a Responsible Officer of El Paso setting forth
details of such event and the action which El Paso has taken and proposes to
take with respect thereto; and (B) promptly, and in any event, within five
Business Days after a Responsible Officer of El Paso obtains knowledge thereof,
notice of a change in, or issuance of any rating of El Paso's senior unsecured
long-term debt by S&P or Xxxxx'x which causes a reduction in, the rating level
of such debt; and
(iv) El Paso shall deliver to Limestone, the Indenture Trustee
and the Rating Agencies the information specified in Rule 144A(d)(4)(i) and (ii)
with respect to the Issuers to enable the Issuers to satisfy their obligations
to furnish such information pursuant to Section 7.01(t) of the Indenture.
(f) Nature of Business. El Paso shall not cause Chaparral or
Mesquite to engage in any business other than as expressly permitted by the
terms of the Chaparral LLC Agreement and the Mesquite LLC Agreement,
respectively, or the other Transaction Documents.
(g) Transactions with Affiliates. El Paso shall not, and shall
cause its Affiliates not to, enter into transactions with Chaparral, Mesquite,
any Chaparral Operating Subsidiary or any Mesquite Operating Subsidiary in
violation of Section 6.3 of the Management Agreement.
27
(h) Disclosure Schedule. El Paso shall deliver to the
Certificateholders, as soon as reasonably practicable following the acquisition
thereof, a Disclosure Schedule for each New Asset acquired after the Closing
Date pursuant to the Chaparral LLC Agreement.
(i) Future Acquisitions of Non-Utility Generation Assets. El
Paso shall comply, and shall cause each controlled Affiliate of El Paso to
comply, with Section 3.4(e) of the Chaparral LLC Agreement.
(j) Reserved.
Section 5.2 Guaranty.
Subject to Section 6.1(c), El Paso hereby absolutely,
unconditionally and irrevocably, to the fullest extent permitted by Applicable
Law, irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
guarantees, for the benefit of the Parties, the performance and observance by
each of the Relevant El Paso Parties of each of its obligations under each
Transaction Document to which it is a party, but excluding any obligation of El
Paso Chaparral, as the Managing Member, to cause Chaparral to pay the Class A
Member's Priority Return or to make any other distributions or other payment on
or in respect of the Class A Member Interest under the Chaparral LLC Agreement
(except to the extent that there are funds on deposit in the Chaparral
Investor's Account that are available to be applied to such payment at the time
such payment is due and are properly payable in respect thereof, and then only
from such funds and except with respect to a failure to make a payment once an
Irrevocable Election is given); provided that the foregoing provisions of this
Section 5.2 shall in no event constitute a Guaranty by El Paso of the payment
obligations of Limestone under the Limestone Certificates, the Limestone Notes
or the Indenture or (without limiting the El Paso Guarantee) the New Limestone
Notes or the New Indenture. Without limiting the foregoing, El Paso hereby
expressly waives diligence, presentment, demand of payment, protest and all
notices whatsoever, and any requirement that any Party hereto exhaust any right,
power or remedy or proceed against any Relevant El Paso Party or any other
Person under this Agreement or any other agreement or instrument referred to
herein in respect of such obligations of the Relevant El Paso Parties whose
obligations are guaranteed hereunder.
Section 5.3 Covenant of Chaparral.
Chaparral shall cause the Overfund Trust to make the payments
to Limestone that are described in Section 5.5(b) hereof.
Section 5.4 Agreement of Parties.
Each Party acknowledges and agrees that (a) any payments from
the Overfund Trust to Limestone or the Indenture Trustee, as applicable, in
accordance with Section 5.5(b) hereof, to the extent of each such payment made
to Limestone or directly to the Indenture Trustee (less any amounts disbursed by
the Indenture Trustee to Chaparral pursuant to Section 5.04(a), 5.04(b) or
5.04(d) of the Indenture) and (b) any payment of the New Notes Liquidity Payment
to the New Indenture Trustee in accordance with Section 3.08 of the New
Indenture (less any amounts in excess of any interest or Default Interest on the
New Notes) shall be
28
deemed to satisfy the obligation of Chaparral to make a Distribution of the
Class A Member's Priority Return in respect of the Class A Member Interest
pursuant to Section 5.1(a) of the Chaparral LLC Agreement. Except as provided in
Section 5.4 of the Chaparral LLC Agreement, each such payment shall reduce the
Capital Account of the Class A Member pursuant to the Chaparral LLC Agreement to
the same extent as if such payment had been made by Chaparral to Limestone as a
Distribution. Each party acknowledged in the Original Participation Agreement
that (i) Annex A thereto would be revised after March 15, 2000 but on or prior
to the Closing Date to conform to the definitive form of Annex A attached to the
Chaparral LLC Agreement and, on and after the Closing Date, all references to
such Annex A in this Agreement or any other Transaction Document shall, without
any further act by any Person, be deemed to refer to such Annex A as so revised
on or prior to the Closing Date and as amended, supplemented, amended and
restated or otherwise modified from time to time after the Closing Date in
accordance with the Transaction Documents and (ii) the Mesquite Credit Agreement
would be amended prior to the Closing Date to provide for rolling monthly
determination of a single "Eurodollar Rate" thereunder to be applicable to all
loans outstanding during such period on such rate.
Section 5.5 Covenants of Overfund Trust.
(a) Financial Investments. The Overfund Trust shall promptly
invest, or cause the investment of, all amounts authorized or required to be
invested by it under the terms of the Overfund Trust Agreement in such El Paso
Debt Securities or other Financial Investments that amortize to generate
payments to the Overfund Trust in amounts and at the times at least sufficient
to pay on each Distribution Date the amounts described in clauses (b)(i) and
(b)(iii) of the definition of Class A Member's Priority Return due and owing on
such Distribution Date as El Paso shall direct from time to time by written
notice to the Overfund Trust and the Indenture Trustee signed by a Responsible
Officer of El Paso; provided, that in the event an El Paso Debt Obligation
Repayment Event occurs, any El Paso Debt Securities or other loans to El Paso
(other than loans constituting Financial Investments issued by El Paso) from the
Overfund Trust shall by their terms become due and payable immediately, subject
to any applicable grace period, or, in the case of demand loans, be deemed on
the date such event occurs, to be subject to a demand for repayment. If any El
Paso Debt Obligation Repayment Event occurs and El Paso is required to repay any
El Paso Debt Obligations held by the Overfund Trust, subject to the provisions
of the Indenture, the Indenture Trustee shall, as promptly as possible, invest
such funds, or cause such funds to be invested, in Financial Investments
described in clause (d) of the definition thereof that mature no later than the
Maturity Date. The investment of any such amounts in Financial Investments by
the Indenture Trustee in accordance with this Agreement and the Indenture shall
be deemed to satisfy the obligations of the Overfund Trust under this Section
5.5(a).
(b) Payment Obligations to Limestone. The Overfund Trust shall
pay or cause to be paid to Limestone (or, so long as the Indenture has not been
discharged, to the Indenture Trustee, as assignee of Limestone), on or before
11:00 a.m. (New York City time) on each Distribution Date, any payments received
by the Overfund Trust in respect of the El Paso Debt Securities or other
Financial Investments that the Overfund Trust purchased with the Overfund Amount
or the proceeds thereof (unless paid by El Paso pursuant to Section 5.5(a)
hereof). Each payment made by the Overfund Trust pursuant to this Section 5.5(b)
shall be as
29
follows: (a) so long as the Indenture has not been discharged pursuant to
Section 10.01 thereof, each payment shall be made directly to the Indenture
Trustee, as assignee of Limestone, for deposit in the Indenture Distribution
Account and (b) upon and after the discharge of the Indenture pursuant to
Section 10.01 thereof, each such payment shall be made to Limestone, for deposit
in the Limestone Distribution Account.
Section 5.6 Covenants of Indenture Trustee.
(a) Financial Investments. Subject to the Indenture Trustee's
rights of control and rights as entitlement holder, the Indenture Trustee shall
promptly invest all amounts authorized or required to be invested by it under
the terms of the Indenture in such Financial Investments as El Paso shall direct
from time to time by written direction to the Indenture Trustee signed by a
Responsible Officer of El Paso; provided, that upon the occurrence of an El Paso
Debt Obligation Repayment Event, the provisions of Section 5.5(a) hereof shall
govern.
(b) Gains and Losses. Any proceeds of Financial Investments in
excess of the amount required to redeem or prepay the Limestone Securities under
the terms thereof and any losses generated by such investments shall be for the
account of El Paso, except as otherwise provided in the Transaction Documents.
Section 5.7 Withdrawal of DLJ Inc.
DLJ Inc. and each Party acknowledges and agrees that (a) DLJ
Inc. was a party to the Original Participation Agreement and pursuant to Section
7.5 thereof, is required to sign this Agreement and (b) DLJ Inc. has no further
rights or obligations under this Agreement and, from and after the date hereof,
DLJ Inc. shall withdraw from, and no longer be considered a party to, this
Agreement.
ARTICLE VI
INDEMNIFICATION
Section 6.1 General Indemnification.
(a) Expense Indemnification. Whether or not (i) any of the
Limestone Certificates are sold or the Closing occurs or (ii) such Expense
Indemnified Person shall be indemnified as to such Indemnified Expense by any
other Person, El Paso agrees, subject to Section 7.11 hereof, to indemnify,
protect, defend and hold harmless each Expense Indemnified Person on an
After-Tax Basis against Indemnified Expenses directly or indirectly resulting
from or arising out of or alleged by a Person other than such Expense
Indemnified Person to result from or arise out of:
(i) this Agreement, the "Transaction Documents" as
defined in the Phase II Participation Agreement (the "Phase II
Transaction Documents") or any other Transaction Document or any of the
transactions contemplated hereby and thereby whether or not in
compliance with the terms of the Transaction Documents;
30
(ii) (A) any act or omission (whether negligent or
otherwise) by El Paso or any Affiliate of El Paso, (B) any breach of,
failure to perform or observe, or other non-compliance with, any
covenant, condition or agreement to be performed by, or other
obligation of, El Paso or any Affiliate of El Paso under any of the
Transaction Documents, or (C) the breach of any representation or
warranty (without giving effect to any qualification with respect to
the materiality thereof) made by El Paso in any of the Transaction
Documents or in any document or certificate delivered in connection
therewith;
(iii) any violation of Applicable Law by El Paso or
any of its Related Persons in respect of the transactions contemplated
by the Transaction Documents or the Phase II Transaction Documents;
(iv) any sale, transfer or holding of Limestone
Certificates being deemed to result in a non-exempt "prohibited
transaction" under ERISA and/or Section 4975 of the Code due to any act
or omission by El Paso or its Affiliates; provided that the Expense
Indemnification set forth in this clause (iv) shall not apply to any
Certificateholder to the extent that such "prohibited transaction"
results from a breach by such Certificateholder of its representations,
warranties or covenants contained in the Investment Certificate
delivered by it pursuant to this Agreement and the Limestone Trust
Agreement;
(v) any Chaparral Extraordinary Liabilities except to
the extent attributable to any Replacement Period; provided that the
Expense Indemnification provided for in this Section 6.1(a)(v) shall
continue to apply during any Replacement Period for any Chaparral
Extraordinary Liabilities to the extent attributable to events or
circumstances that existed prior to the Replacement Period and with
respect to which a Successor Manager has (x) pursued or continued the
same course of action as the Management Company in accordance with
standard utility or other applicable industry practices (if the
Management Company knew of and had taken a course of action in respect
of such events or circumstances) or (y) acted in accordance with
standard utility or other applicable industry practices (if the
Management Company did not know of such events or circumstances or had
taken no action as a result thereof);
(vi) any agreement, activity or action or failure to
take action or any violation of Applicable Law by or of either of
Chaparral and Mesquite, except to the extent attributable to any such
agreement, action, failure to take action or violation made or taken or
omitted to be made or taken during any Replacement Period;
(vii) Documentary Taxes;
(viii) [reserved];
(ix) the acquisition or ownership by Chaparral,
Mesquite or any Subsidiary of Mesquite of the New Assets, except for
any New Assets acquired during any Replacement Period; and
31
(x) any of the Certificateholders or Limestone
becoming (A) subject to regulation as a "public utility" as such term
is defined in Section 201 of the FPA, or (B) subject to the
requirements of Section 203 of the FPA, in each case solely by virtue
of any Certificateholder's acquiring and holding the Limestone
Certificates and exercising, or the Class A Member exercising, the
rights available to such Certificateholder under the Limestone Trust
Agreement or to such Class A Member under the Chaparral LLC Agreement
in the manner contemplated by the Limestone Trust Agreement or the
Chaparral LLC Agreement; provided that this clause (x) shall not apply
to any Indemnified Expenses to the extent such Indemnified Expenses
result from or arise out of any of the following actions by the Class A
Member: (1) such Class A Member chooses not to file, or cause to be
filed by the appropriate entity, an application pursuant to Section 203
of the FPA in the circumstances described in Section 6.1 of the
Chaparral LLC Agreement and Section 5.2 of the Management Agreement,
(2) such Class A Member causes the Disposition of any asset of
Chaparral or Mesquite pursuant to an Asset Disposition or pursuant to
Section 11.3 of the Chaparral LLC Agreement without the filing by the
appropriate entity of an application pursuant to Section 203 of the FPA
with respect to such Disposition and the receipt of any requisite order
pursuant thereto, or (3) such Class A Member acts, or causes Chaparral
or Mesquite (or any other holder of FERC jurisdictional assets) to act,
in material contravention of any such filing referred to in subclause
(1) or (2) above or any order received in respect thereof.
(b) Economic Losses Indemnification. El Paso agrees (except as
provided below) to indemnify, protect, defend and hold harmless each Loss
Indemnified Person against Economic Losses directly or indirectly resulting from
or attributable to Chaparral Expense Payments to the extent but only to the
extent such Chaparral Expense Payments are paid or incurred by Chaparral,
Mesquite, any Subsidiary of Mesquite or any Mesquite Minority Owned QEC by
reason of:
(i) (A) any act or omission constituting gross
negligence or wilful misconduct on the part of El Paso or any Affiliate
of El Paso, other than the Management Company or any other Affiliate of
El Paso acting as Manager under the Management Agreement, or as a
subcontractor thereto, or as a supervisor of such Manager, in
connection with the performance of general management or other
obligations or duties under the Management Agreement, unless such
performance constitutes wilful misconduct or gross negligence, (B) any
breach of, failure to perform or observe, or other non-compliance with,
any covenant, condition or agreement to be performed by, or other
obligation of, El Paso or any Affiliate of El Paso under any of the
Transaction Documents, except with respect to Sections 2, 3 and 6.1 of
the Management Agreement, unless such breach, failure or non-compliance
with respect to the obligations of El Paso under such Sections 2, 3 and
6.1 of the Management Agreement constitutes wilful misconduct or gross
negligence, or (C) the breach of any representation or warranty
(without giving effect to any qualification with respect to the
materiality thereof) made by El Paso in any of the Transaction
Documents or in any document or certificate delivered in connection
therewith;
(ii) any violation of Applicable Law by El Paso, El
Paso Chaparral, the Management Company, Chaparral, Mesquite, any
Subsidiary of Mesquite or any
32
Mesquite Minority Owned QEC, except, in the case of Chaparral and
Mesquite, during any Replacement Period; and
(iii) Chaparral Extraordinary Liabilities, except to
the extent attributable to any Replacement Period; provided that the
Loss Indemnification provided for in this Section 6.1(b)(iii) shall
continue to apply during any Replacement Period for any Chaparral
Extraordinary Liabilities to the extent attributable to events or
circumstances that existed prior to the Replacement Period and with
respect to which a Successor Manager has (x) pursued or continued the
same course of action as the Management Company in accordance with
standard utility or other applicable industry practices (if the
Management Company knew of and had taken a course of action in respect
of such events or circumstances) or (y) acted in accordance with
standard utility or other applicable industry practices (if the
Management Company did not know of such events or circumstances or had
taken no action as a result thereof);.
Any amount payable pursuant to this Section 6.1(b) shall be
payable upon the earliest of the Retirement Date, the Purchase Date or the
Payment Date with respect to a liquidation of Chaparral (the "Economic Loss
Indemnity Payment Date"). On the Economic Loss Indemnity Payment Date, if there
would, but for the payment provided for pursuant to this Section 6.1(b), exist
an Economic Loss, El Paso shall supply to each Certificateholder computations
setting forth in reasonable detail the basis on which the amount payable
pursuant to this Section 6.1(b) is determined. The provisions of Section 6.1(e)
shall not apply to any indemnity pursuant to this Section 6.1(b).
Except as expressly set forth in this Section 6.1(b), in no
event shall El Paso have any indemnification obligation for, and in no event
shall El Paso be deemed a guarantor of, or otherwise be responsible for, any (x)
Economic Losses incurred by any Certificateholder or the failure of any
Certificateholder to receive any yield or other return on, or return of the
Certificate Face Amount of, or any other amount in respect of, such
Certificateholder's Limestone Certificates or (y) any Economic Losses incurred
by the Limestone Lender or the failure of the Limestone Lender to receive any
principal of, interest on or any other amounts in respect of, the Limestone Loan
and the indemnification obligations of El Paso hereunder shall in no event
constitute a guaranty of payment with respect to the Limestone Certificates or
the Limestone Loan.
(c) Limitations on Indemnification Obligations. The
indemnification and other obligations of El Paso provided in this Section 6.1
shall be subject to the following limitations:
(i) Limitation by Law. Such indemnification or other
obligations of El Paso shall be enforced only to the
maximum extent permitted by law.
(ii) No Duplication. Indemnified amounts under this
Section 6.1 shall be without duplication of any
amounts actually paid to Indemnified Persons under
(A) indemnification, reimbursement or other
provisions of any Transaction Document or (B) any
insurance policy or other relevant Contractual
Obligation.
33
(d) Insured Items. In the case of any Indemnified Expenses or
Economic Losses covered by a policy of insurance maintained by El Paso or any of
its Affiliates, or by Chaparral, Mesquite or any of Mesquite's Subsidiaries or
any Mesquite Minority Owned QEC, or by any other Person, each Indemnified Person
agrees to provide reasonable cooperation to the insurers in the exercise of
their rights to investigate, defend, settle or compromise any claim, action,
suit or other circumstance giving rise to any Chaparral Expense Payment,
Indemnified Expenses or Economic Losses as may be required for El Paso or any of
its Affiliates, or Chaparral, Mesquite or any of Mesquite's Subsidiaries or any
Mesquite Minority Owned QEC, or any such other Person, to retain the benefits
of, and effect recovery under, such insurance with respect to such item.
(e) Claims Procedure. (i) An Indemnified Person shall, after
obtaining actual knowledge thereof, promptly notify El Paso in writing of any
claim, action, suit or other legal or regulatory proceeding (collectively,
"Legal Proceedings") or other event or circumstance giving rise to an
Indemnified Expense or Economic Loss as to which indemnification will be sought
pursuant to this Agreement (the foregoing, collectively, "Indemnified Events");
provided, however, that the failure to give such notice shall not release El
Paso from any of its obligations under this Section 6.1, except (but only if El
Paso shall not have actual knowledge of such Indemnified Event) to the extent
that failure to give notice of any such Indemnified Event shall prejudice El
Paso's ability to defend or contest any Indemnified Event or Indemnified Expense
(or results in El Paso's forfeiture of substantive rights or defenses) or
recover proceeds under any insurance policies maintained by El Paso or any of
its Affiliates, or by Chaparral, Mesquite or any of Mesquite's Subsidiaries or
any Mesquite Minority Owned QEC, or by any other Person. El Paso shall, after a
Responsible Officer of El Paso obtains actual knowledge thereof, promptly notify
each Indemnified Person of any Indemnified Event affecting such Indemnified
Person. Each Indemnified Person agrees to provide El Paso with a copy of all
relevant documents and details, including all relevant papers served, claims
made and invoices received, in each case, as are reasonably requested by El
Paso, to the extent such information is available to such Indemnified Person and
such Indemnified Person can do so in a commercially reasonable manner. Subject
to the provisions of the following paragraph, El Paso shall at its sole option,
and at its sole cost and expense, be entitled to participate in, or to control
and to assume full responsibility for, the defense of such Indemnified Event
with Xxxxx, Day, Xxxxxx & Xxxxx or Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, or
with other counsel reasonably satisfactory to such Indemnified Person, and shall
provide the Indemnified Person(s) who are the subject of such Indemnified Event
with all information with respect to such Indemnified Event as such Indemnified
Person(s) shall reasonably request to the extent such disclosure shall not (A)
result in the waiver of any attorney-client privilege between El Paso and its
counsel or otherwise result in the loss of any attorney work product or other
privilege preventing disclosure of confidential material or (B) violate any
applicable confidentiality agreement relating to an asset of a Chaparral
Operating Subsidiary or a Mesquite Operating Subsidiary or entered into in good
faith or (C) violate any Applicable Law.
(ii) Notwithstanding any of the foregoing to the contrary, El
Paso shall not be entitled to control and assume responsibility for the defense
of any Indemnified Event if (A) such Indemnified Person shall have reasonably
concluded in good faith that there exists an actual or potential conflict of
interest between such Indemnified Person and El Paso such that it is advisable
for such Indemnified Person to retain control of all or any portion of such
Indemnified
34
Event (except that El Paso shall be entitled to control and assume
responsibility for the defense of that portion of the Indemnified Event as to
which such conflict of interest does not apply), or (B) such Indemnified Event
involves the possibility of criminal sanctions against or criminal liability of
such Indemnified Person. In the circumstances described in clauses (A) and (B),
the Indemnified Person shall be entitled to control and assume responsibility
for the defense of that aspect of such Indemnified Event covered by clauses (A)
and (B) at the expense of El Paso, provided that such defense is conducted by
one counsel (in addition to any local counsel) acceptable to El Paso, such
acceptance not to be unreasonably withheld or delayed. Each Indemnified Person,
by its acceptance of any indemnification rights hereunder, agrees that El Paso
shall only be responsible for the expenses of one counsel to be retained by all
Indemnified Persons with respect to any Indemnified Event for which a claim for
indemnification will be sought under this Section 6.1 in a particular
jurisdiction, unless counsel to any Indemnified Person reasonably determines
that there are actual or potential conflicts of interest between such
Indemnified Person and other Indemnified Persons or that there may be one or
more different or additional defenses, claims, counterclaims, or causes of
action available to such Indemnified Person, in which case such Indemnified
Person may retain separate counsel together with all other Indemnified Persons
subject to the same conflict of interest or sharing such additional defenses,
claims, counterclaims or causes of action at the expense of El Paso. In addition
any Indemnified Person may participate in any Indemnified Event controlled by El
Paso pursuant to this Section 6.1, (x) at its own expense in respect of any such
Indemnified Event as to which El Paso shall have acknowledged in writing its
obligation to indemnify such Indemnified Person pursuant to this Section 6.1 for
Indemnified Expenses (subject to the limitations and exclusions contained in
this Agreement) and in a manner that is not materially prejudicial to the
interests of El Paso, and (y) at the expense of El Paso in respect of any such
Indemnified Event as to which El Paso shall not have so acknowledged its
obligation in respect of Indemnified Expenses to such Indemnified Person
pursuant to this Section 6.1, or for so long as El Paso fails to assume
responsibility for the defense of such Indemnified Event. El Paso may in any
event participate in all Indemnified Events at its own cost. Nothing contained
in this Section 6.1(e) shall be deemed to require an Indemnified Person to
contest any Indemnified Event or to assume responsibility for or control of any
judicial proceeding with respect thereto.
(iii) Without the prior written consent of such Indemnified
Person, El Paso shall not settle or compromise, or consent to the entry of any
judgment in, any pending or threatened Indemnified Event, unless such
settlement, compromise or consent or related judgment includes an unconditional
release of such Indemnified Person from all liability for Indemnified Expenses
under the underlying claim in the Legal Proceeding that is the basis of such
Indemnified Event. No Indemnified Person shall settle or compromise, or consent
to the entry of any judgment, decree or order in, any pending or threatened
Indemnified Event in respect of which any payment or claim for indemnification
would or will result or be made by such Indemnified Person hereunder or under
the other Transaction Documents without the prior written consent of El Paso,
such consent not to be unreasonably withheld or delayed.
(f) Subrogation. If an Indemnified Expense or Economic Loss
indemnified by El Paso under this Section 6.1 other than with respect to Taxes
is paid in full by El Paso and/or an insurer under a policy of insurance
maintained by El Paso or any of its Affiliates or by Chaparral, Mesquite or any
of Mesquite's Subsidiaries or any Mesquite Minority Owned QEC, or by any other
Person, such insured Person and/or such insurer, as the case may be, shall be
35
subrogated to the extent of such payment to the rights and remedies of the
Indemnified Person (other than (i) under insurance policies maintained by such
Indemnified Person or (ii) against any of Chaparral, Mesquite, Limestone, the
Limestone Trustee or the holders of the Limestone Certificates) on whose behalf
such Indemnified Expense or Economic Loss was paid with respect to the
Indemnified Event giving rise thereto. So long as no event referred to in clause
(A) of Section 6.1(e)(ii) hereof shall have occurred and be continuing, if an
Indemnified Person receives any refund, in whole or in part, with respect to any
Indemnified Expense or Economic Loss paid by El Paso hereunder, it shall
promptly pay over the amount refunded (but not in excess of the amount El Paso,
any such other insured Person or any of their respective insurers has paid) to
El Paso or such other insured person, as their interests may appear.
(g) Reports and Returns. In case any return, report or
statement shall be required to be made with respect to any obligation of El Paso
under or arising out of this Section 6.1 of which a Responsible Officer of El
Paso is, or through reasonable due diligence should be, aware, El Paso shall, to
the extent required or permitted by law, make and file in its own name such
return, statement or report, and in the case of any such return, statement or
report required to be made in the name of an Indemnified Person, to the extent
of the actual knowledge of a Responsible Officer of El Paso, advise such
Indemnified Person in writing of such fact and, to the extent such information
is available to El Paso and El Paso can do so in a commercially reasonable
manner, provide such Indemnified Person with information sufficient to permit
such return, statement or report to be properly and timely made with respect to
any obligations of El Paso under or arising out of this Section 6.1.
(h) Affiliated Group. For purposes of this Section 6.1, the
term "Indemnified Person" when used in respect of a Certificateholder (or a
member, partner or beneficiary of a Certificateholder that is a pass-through
entity for Tax purposes), shall include any combined, consolidated or affiliated
group and each member thereof of which such Certificateholder (or member,
partner or beneficiary of such Certificateholder that is a pass-through entity
for Tax purposes) is or shall become a member if combined or consolidated
returns are or shall be filed for such affiliated group for Tax purposes.
(i) Calculation of Payments in Respect of Taxes. Any indemnity
that El Paso shall be required to make to or for the account of any Indemnified
Person under this Section 6.1 shall include an additional amount necessary to
hold such Indemnified Person harmless on an After-Tax Basis from any Taxes
required to be paid or accrued by such Indemnified Person as a result of such
payment, and the exclusion of the Excluded Items shall be disregarded in
determining such additional amount.
(j) Payment in Respect of Taxes. El Paso shall pay any Tax for
which it is liable pursuant to this Section 6.1 directly to the appropriate
taxing authority on a timely basis sufficient to avoid the imposition of
interest and penalties (or upon demand of an Indemnified Person to such
Indemnified Person within 30 Business Days of a written demand, but in no event
prior to the date which is more than 5 days prior to the date such Tax is due
(including all extensions)) or, in the case of Taxes which are being contested
pursuant to a contest permitted pursuant to Section 6.1(e), the time such
contest is finally resolved. Any such demand shall specify in reasonable detail
the calculation of the payment and the facts upon which the right to payment is
based. Each Indemnified Person shall promptly forward to El Paso any notice,
xxxx or
36
advice received by it from the relevant taxing authority concerning any Tax
which El Paso may be required to indemnify against hereunder but the failure to
give such notice shall not diminish El Paso's obligation hereunder except to the
extent the right of El Paso to contest (or cause a contest of) such claim in a
court of competent jurisdiction is thereby precluded. El Paso shall furnish the
relevant Indemnified Person with the original or a certified copy of a receipt
(if any is available to El Paso) for El Paso's payment of any Tax that is
subject to indemnification pursuant to this Section 6.1, or such other evidence
of payment of such Tax as is reasonably requested by such Indemnified Person.
(k) Tax Savings. (i) Upon receipt by any Indemnified Person of
a refund (the amount of any such refund to be determined, in the case of an
Indemnified Person in the reasonable judgment of such Indemnified Person) of all
or part of any Taxes which El Paso shall have paid for such Indemnified Person
or for which El Paso shall have reimbursed, advanced funds to or indemnified
such Indemnified Person, such Indemnified Person shall, but not before El Paso
shall have made all payments then due pursuant to this Section 6.1 and any other
payments then due to such Indemnified Person under any of the Transaction
Documents and, in any event, provided that no Event of Default or New Indenture
Event of Default shall have occurred and be continuing, pay or repay to El Paso
an amount which, after the subtraction of the amount of any further net Tax
savings actually realized by such Indemnified Person as a result of the payment
under this Section 6.1 (but only to the extent of the amounts previously paid by
El Paso with respect to such refunded Taxes in order to pay them on an After-Tax
Basis), and the addition of any net Tax detriment realized by such Indemnified
Person as a result of the receipt or accrual of such refund and any interest
received or accrued by such Indemnified Person on such refund, is equal to the
amount of such refund and any interest received by such Indemnified Person that
is fairly attributable to such refund. If it is later determined that the
Indemnified Person was not entitled to such refund, the portion of such refund
that is repaid, recaptured or disallowed will be treated as Taxes for which El
Paso must indemnify the Indemnified Person pursuant to the provisions of Section
6.1(a) but without regard to the exclusion of Excluded Items.
(ii) If an Indemnified Person shall actually realize for any
taxable period a reduction in Tax (whether attributable to a credit, deduction,
exclusion from income or otherwise) which would not have been realized but for
any Tax, claim or other cost or expense with respect to which El Paso has
reimbursed or indemnified such Indemnified Person on an After-Tax Basis pursuant
to this Section 6.1, and such reduction in Tax was not taken into account in
determining the amount payable by El Paso on account of such indemnification,
such Indemnified Person shall pay to El Paso, so long as no Event of Default or
New Indenture Event of Default shall have occurred and be continuing, within 30
days after such Indemnified Person shall have actually realized such Tax
savings, the amount of such savings, together with the amount of any Tax savings
actually realized as a result of any payment pursuant to this sentence; provided
that El Paso shall not be entitled to receive an amount in excess of the amount
of such Taxes, claims, costs or expenses in respect of which the indemnification
was paid by El Paso. Each Indemnified Person shall have sole control over the
positions taken with respect to its tax returns and filings and such Indemnified
Person shall determine in good faith the realization of any Tax benefit, saving,
deduction or credit for purposes of calculations made under this Section 6.1. If
it is later determined that the Indemnified Person was not entitled to such Tax
savings or reduction in Tax, the portion of such Tax savings or reduction in Tax
that is repaid, recaptured or
37
disallowed will be treated as Taxes for which El Paso must indemnify the
Indemnified Person pursuant to the provisions of Section 6.1(a) but without
regard to the exclusion of Excluded Items.
(l) Notice. In the event that El Paso is required to make any
payments pursuant to this Section 6.1 with respect to the Limestone Certificates
and any Certificateholder Related Person, El Paso shall provide the Limestone
Trustee with written notice of the amount of such payment.
Section 6.2 Tax Indemnification.
El Paso shall enter into the Tax Indemnification Agreement as
of the Closing Date.
Section 6.3 Agreements.
(a) Each Party that was party to the Phase II Participation
Agreement hereby agrees that (i) except as set forth in Section 6.3(b) below,
the Phase II Participation Agreement shall be terminated effective as of March
15, 2000, and (ii) the indemnities set forth in this Article VI with respect to
the Parties that were party to the Phase II Participation Agreement shall be
effective as of December 28, 1999 (without duplication of the indemnities set
forth in the Phase II Participation Agreement).
(b) Each Party that was a party to the Phase II Participation
Agreement hereby agrees that (i) the Phase II Participation Agreement shall
continue to be in full force and effect with respect to DLJ Capital Corporation
and (ii) Section 7.8 of the Phase II Participation Agreement shall continue to
be in full force and effect with respect to each Party that was a party to the
Phase II Participation Agreement.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Survival.
All agreements, representations, warranties and indemnities
contained in this Agreement and in any agreement, document or certificate
delivered pursuant hereto, or in connection herewith, shall survive and continue
in effect following the execution and delivery of this Agreement and the Closing
Date. Upon the repayment in full of the Outstanding Limestone Notes and the
cancellation of all Limestone Certificates pursuant to Section 7.04 of the
Limestone Trust Agreement, this Agreement shall terminate except as to those
provisions, including without limitation, Article VI and Section 7.9 hereof,
expressly intended to survive such termination.
38
Section 7.2 Notices.
Except as otherwise expressly provided herein in any
particular case, all notices, approvals, consents, requests and other
communications hereunder shall be in writing and shall, if addressed as provided
in the following sentence, be deemed to have been given, (i) when delivered by
hand on a Business Day, (ii) one Business Day after being sent by a private
nationally or internationally recognized overnight courier service or (iii) when
sent on a Business Day by telecopy, if immediately after transmission the
sender's facsimile machine records in writing the correct answer back. Actual
receipt at the address of an addressee, regardless of whether in compliance with
the foregoing is effective notice hereunder. Until otherwise so notified by the
respective parties, all notices, approvals, consents, requests and other
communications shall be addressed to the following addresses:
If to El Paso or the Relevant El Paso Parties:
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxx Xxxxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
with a copy to:
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
If to Limestone, the Limestone Trustee,
or the Certificateholders:
c/o Wilmington Trust Company, as Trustee
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
with copies to:
DLJ Investment Partners II, L.P.
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx XxXxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
00
XXX Xxxxxxxxxx Xxxxxxxx XX, X.X.
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx Xxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
If to the Share Trust or the Share Trustee:
c/o Wilmington Trust Company, as Trustee
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
with copies to:
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
If to Chaparral, Mesquite or the Overfund Trust:
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
40
c/o El Paso Chaparral, as Manager
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxx Xxxxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
with a copy to:
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
If to the Indenture Trustee:
The Bank of New York
0 Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
A duplicate copy of each notice, approval, consent, request or
other communication given hereunder by each of the Parties, to any one of the
others or to the Certificateholders or the Indenture Trustee shall also be given
to all of the others. However, failure to give notice to any Party shall not
affect effectiveness of notice to Parties as to whom notice has been given in
accordance with the first two sentences of this Section 7.2. Each of the Parties
may, by notice given hereunder, designate any further or different addresses to
which subsequent notices, approvals, consents, requests or other communications
shall be sent or persons to whose attention the same shall be directed.
Section 7.3 Severability of Provisions.
If any provision hereof shall be held invalid or unenforceable
by any court of competent jurisdiction, such holding shall not invalidate or
render unenforceable any other provision hereof. To the extent permitted by
Applicable Law, the Parties hereto hereby agree that any provision hereof that
renders any other term or provision hereof invalid or unenforceable in any
respect shall be modified, but only to the extent necessary to avoid rendering
such other term or provision invalid or unenforceable, and such modification
shall be accomplished in the manner that most nearly preserves the benefit of
all Parties' bargain hereunder.
Section 7.4 Governing Law; Waiver of Jury Trial; Consent to
Jurisdiction.
(a) THE RIGHTS AND OBLIGATIONS OF EACH OF THE PARTIES UNDER
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
41
(b) EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES TO THE
FULLEST EXTENT PERMITTED BY LAW ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING
ARISING OUT OF OR RELATING DIRECTLY OR INDIRECTLY TO ANY OF THIS AGREEMENT OR
ANY OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.
(c) ANY PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX IN
THE COUNTY OF NEW YORK IN THE COMMERCIAL DIVISION OF THE SUPREME COURT, CIVIL
BRANCH OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK OR THE
EASTERN DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF THE PARTIES HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS IN RESPECT OF, BUT ONLY IN RESPECT OF, PROCEEDINGS WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.
(d) EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID PROCEEDINGS ARISING OUT OF
OR IN CONNECTION WITH THIS OR ANY OTHER TRANSACTION DOCUMENT BROUGHT IN THE
COURTS REFERRED IN SECTION 7.4(c) HEREOF AND HEREBY FURTHER IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, AND AGREES NOT TO PLEAD OR
CLAIM IN ANY SUCH COURT THAT ANY SUCH PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
(e) EACH OF LIMESTONE, THE SHARE TRUST AND THE OVERFUND TRUST
HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS AND HEREBY CONFERS AN
IRREVOCABLE SPECIAL POWER, AMPLE AND SUFFICIENT, TO CT CORPORATION SYSTEM, WITH
OFFICES ON THE DATE HEREOF AT 000 XXXXXX XXXXXX, XXX XXXX, XX 00000 AS ITS
DESIGNEE, APPOINTEE AND AGENT WITH RESPECT TO ANY SUCH PROCEEDING IN NEW YORK TO
RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS
PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS
WHICH MAY BE SERVED IN ANY SUCH PROCEEDING AND AGREES THAT THE FAILURE OF SUCH
AGENT TO GIVE ANY ADVICE OF ANY SUCH SERVICE OF PROCESS TO LIMESTONE SHALL NOT
IMPAIR OR AFFECT THE VALIDITY OF SUCH SERVICE OR OF ANY CLAIM BASED THEREON. IF
FOR ANY
42
REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS
SUCH, EACH OF LIMESTONE, THE SHARE TRUST AND THE OVERFUND TRUST AGREES TO
DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND
FOR THE PURPOSES OF THIS PROVISION. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF LIMESTONE, THE SHARE TRUST AND THE OVERFUND TRUST IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS WITH RESPECT TO ANY PROCEEDING (WHETHER OR NOT IN NEW
YORK), BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO SUCH PERSON, AT ITS RESPECTIVE ADDRESS SET FORTH IN SECTION 7.2
HEREOF, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
Section 7.5 Amendments, Waivers, Etc.
This Agreement may not be amended, discharged or terminated
nor may any provision hereof be waived unless such amendment, discharge,
termination or waiver is in writing and signed by each Party.
Section 7.6 Entire Agreement.
Except as otherwise provided in Section 6.3 with respect to
the Phase II Participation Agreement, (i) this Agreement (including, without
limitation, the appendices hereto) and the other Transaction Documents supersede
all prior agreements, written or oral, between or among any of the Parties
relating to the transactions contemplated hereby and thereby, and (ii) each of
the Parties represents and warrants to the others that this Agreement and the
other Transaction Documents constitute the entire agreement among the Parties
relating to the transactions contemplated hereby and thereby.
Section 7.7 Benefit of Agreement.
All agreements, representations, warranties and indemnities in
this Agreement and in any agreement, document or certificate delivered pursuant
hereto shall be binding upon the Person making the same and its successors and
assigns and shall inure to the benefit of and be enforceable by the Person for
whom made and its successors and assigns (including, in the case of agreements,
representations, warranties and indemnities made to each Certificateholder, any
Person claiming by, through or under such Certificateholder or who is entitled
to any contractual right of reimbursement or indemnity in connection with the
transactions contemplated herein); provided, however, none of El Paso,
Limestone, El Paso Chaparral Holding, El Paso Chaparral, the Management Company,
Chaparral, Mesquite, the Overfund Trust or the Share Trust may assign or
transfer any of its rights or obligations hereunder except as provided in the
Transaction Documents without the prior written consent of the
Certificateholders or, so long as any Limestone Notes are Outstanding, the
Indenture Trustee, except pursuant to any merger, consolidation or other act to
similar effect permitted under Section 5.1(a) hereof where El Paso or such other
entity is the survivor or the survivor assumes all the obligations of such
entity. This Agreement is for the sole benefit of the Parties and their
respective successors and assigns and all Indemnified Persons and their
respective successors and assigns, and is not for the benefit of any other
Person.
43
Section 7.8 Expenses.
All statements, reports, certificates, opinions and other
documents or information required to be furnished by any Party to the Indenture
Trustee, Limestone or the Certificateholders under this Agreement or any other
Transaction Document shall be supplied without cost to the Indenture Trustee,
Limestone or the Certificateholders. El Paso shall pay, within 30 days after
demand therefor, (a) any Administrative Expenses incurred by the Indenture
Trustee, the Limestone Trustee, the Overfund Trustee, the Share Trustee or any
Certificateholder Related Person to the extent such amounts are not paid
pursuant to the Transaction Documents and (b) all reasonable and documented
out-of-pocket costs and expenses of the Indenture Trustee, Limestone, the
Limestone Trustee, the Overfund Trustee, the Share Trustee or the
Certificateholders (and any Person claiming by, through or under such
Certificateholders or who is entitled to any contractual right of reimbursement
or indemnity in connection with the transactions contemplated herein), incurred
in connection with (i) the negotiation, preparation, execution and delivery of
the Transaction Documents or any waiver or amendment of, or supplement or
modification to, the Transaction Documents and (ii) the review of any of the
other agreements, instruments or documents referred to in this Agreement or
relating to the transactions contemplated hereby. In addition, El Paso shall
pay, or cause to be paid, within 30 days after demand therefor, all reasonable
and documented out-of-pocket costs and expenses of the Indenture Trustee,
Limestone and the Certificateholders (and any Person claiming by, through or
under such Certificateholders or who is entitled to any contractual right of
reimbursement or indemnity in connection with the transactions contemplated
herein) (including the reasonable and documented fees and disbursements of
counsel), incurred in connection with the enforcement or protection of its
rights under the Transaction Documents, including in connection with any
workout, restructuring or negotiations in respect thereof, and including the
exercise of the remedies of the Indenture Trustee, Limestone and the
Certificateholders (and any Person claiming by, through or under such
Certificateholders or who is entitled to any contractual right of reimbursement
or indemnity in connection with the transactions contemplated herein) under the
Transaction Documents following the occurrence of a Default under the
Transaction Documents.
Section 7.9 No Bankruptcy Petitions.
(a) El Paso. El Paso covenants and agrees that prior to the
date that is a year and a day after the cancellation of all outstanding
Limestone Certificates pursuant to Section 7.04 of the Limestone Trust
Agreement, it will not institute against, or join any other person in
instituting against, Limestone, El Paso Chaparral Holding, El Paso Chaparral,
the Management Company, Chaparral, Mesquite, the Overfund Trust or the Share
Trust any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or similar proceeding under the laws of the United States or any
state of the United States.
(b) Chaparral. Chaparral covenants and agrees that prior to
the date that is a year and a day after the cancellation of all outstanding
Limestone Certificates pursuant to Section 7.04 of the Limestone Trust
Agreement, it will not, other than upon the direction of Limestone, institute
against, or join any other person in instituting against, Limestone, the
Management Company, Mesquite, the Share Trust or the Overfund Trust any
bankruptcy, reorganization,
44
arrangement, insolvency or liquidation proceedings or similar proceeding under
the laws of the United States or any state of the United States.
(c) Mesquite. Mesquite covenants and agrees that prior to the
date that is a year and a day after the cancellation of all outstanding
Limestone Certificates pursuant to Section 7.04 of the Limestone Trust
Agreement, it will not, other than upon the direction of Chaparral, institute
against, or join any other person in instituting against, Chaparral, the
Overfund Trust, the Share Trust or the Management Company, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or similar
proceeding under the laws of the United States or any state of the United
States.
Section 7.10 Limitation of Liability.
It is expressly understood and agreed by the parties hereto
that, except with respect to Section 4.6, (a) this Agreement is executed and
delivered by Wilmington Trust Company, not individually or personally, but
solely as Trustee, in the exercise of the powers and authority conferred and
vested in it, (b) each of the representations, undertakings and agreements
herein made on the part of Limestone, the Overfund Trust or the Share Trust is
made and intended not as personal representations, undertakings and agreements
by Wilmington Trust Company but is made and intended for the purpose of binding
only Limestone, the Overfund Trust or the Share Trust, respectively, (c) nothing
herein contained shall be construed as creating any liability on Wilmington
Trust Company, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by any Person claiming by, through or
under the parties hereto, and (d) under no circumstances shall Wilmington Trust
Company be personally liable for the payment of any indebtedness or expenses of
Limestone, the Overfund Trust or the Share Trust or be liable for the breach of
failure of any obligation, representation, warranty or covenant made or
undertaken by Limestone, the Overfund Trust or the Share Trust under this
Agreement.
Section 7.11 General Limitation of Liability.
Subject to the following sentence, no Party to any Transaction
Document shall be liable for any punitive, exemplary, or treble damages,
including without limitation for the inaccuracy of any representation or
warranty made by such Party; in addition, with respect to the representations,
warranties, covenants and indemnities made by El Paso in this Agreement, or
otherwise in any Transaction Document, El Paso shall not be liable for any
punitive, exemplary, treble or consequential damages arising out of a breach,
default or other violation thereof. Notwithstanding the limitations of liability
described in the preceding sentence, Indemnified Expenses will include
out-of-pocket payments by an Indemnified Person of consequential, punitive,
exemplary or treble damages owing to a third Person arising out of any claim,
action or suit against such Indemnified Person to the extent not excluded
pursuant to Section 6.1(c).
Section 7.12 Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
45
Section 7.13 Effectiveness.
This Agreement shall become effective on and as of the
Effective Date.
[signature pages follow]
46
IN WITNESS WHEREOF, each of El Paso, Limestone, the Co-Issuer,
Credit Suisse First Boston (USA), Inc., El Paso Chaparral Holding, El Paso
Chaparral Holding II, El Paso Chaparral, the Management Company, Chaparral,
Mesquite, the Overfund Trust, the Share Trust, Electron, Wilmington Trust
Company and The Bank of New York has caused this Agreement to be executed in its
name and on its behalf as of the date first above written.
EL PASO CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Participation Agreement
LIMESTONE ELECTRON TRUST
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely in its capacity as trustee
By: /s/ Xxx X. Xxxxxxx
---------------------------------
Name: Xxx X. Xxxxxxx
Title: Assistant Vice President
Participation Agreement
LIMESTONE ELECTRON, INC.
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
Participation Agreement
CREDIT SUISSE FIRST BOSTON (USA), INC.
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Chairman of Global Investment
Banking & Private Equity
Participation Agreement
EL PASO CHAPARRAL HOLDING COMPANY
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
EL PASO CHAPARRAL HOLDING II COMPANY
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
EL PASO CHAPARRAL INVESTOR, L.L.C.
By: El Paso Chaparral Holding Company, as its sole
Member
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
EL PASO CHAPARRAL MANAGEMENT, L.P.
By: El Paso Chaparral Partner, L.L.C., as general
partner
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
Participation Agreement
CHAPARRAL INVESTORS, L.L.C.
By: El Paso Chaparral Investor, L.L.C., as Managing
Member
By: El Paso Chaparral Holding Company, as its sole
Member
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
MESQUITE INVESTORS, L.L.C.
By: Chaparral Investors, L.L.C., as sole Member
By: El Paso Chaparral Investor, L.L.C., as Managing
Member
By: El Paso Chaparral Holding Company, as its sole
Member
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
Participation Agreement
EL PASO ELECTRON OVERFUND TRUST
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely in its capacity as trustee
By: /s/ Xxx X. Xxxxxxx
---------------------------------
Name: Xxx X. Xxxxxxx
Title: Assistant Vice President
EL PASO ELECTRON SHARE TRUST
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely in its capacity as trustee
By: /s/ Xxx X. Xxxxxxx
---------------------------------
Name: Xxx X. Xxxxxxx
Title: Assistant Vice President
ELECTRON TRUST
By: Wilmington Trust Company,
not in its individual capacity, but solely as
Trustee
By: /s/ Xxx X. Xxxxxxx
---------------------------------
Name: Xxx X. Xxxxxxx
Title: Assistant Vice President
WILMINGTON TRUST COMPANY
By: /s/ Xxx X. Xxxxxxx
---------------------------------
Name: Xxx X. Xxxxxxx
Title: Assistant Vice President
Participation Agreement
THE BANK OF NEW YORK
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Authorized Signatory
ANNEX A TO
FIFTH AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF
CHAPARRAL INVESTORS, L.L.C.
AND TO THE PARTICIPATION AGREEMENT
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.01 DEFINITIONS. Capitalized terms used in this Annex A and,
except as otherwise expressly provided in any Transaction Document with respect
to specific capitalized or other terms used in such Transaction Document,
capitalized terms used in the Transaction Documents and all appendices,
schedules and exhibits thereto, shall in each case have the respective meanings
given to them in this Section 1.01. Not all of the terms defined in this Annex A
are used in any particular Transaction Document.
"ACCELERATION TRIGGER" means the occurrence of an Event of Default
under the Indenture and the acceleration of the Limestone Notes as a result
thereof.
"ACT" means the Delaware Business Trust Act, Chapter 38 of Title 12 of
the Delaware Code, 12 Del. Code Section 3801 et seq., as in effect from time to
time.
"ADDITIONAL CAPITAL CONTRIBUTIONS" means, with respect to each Member,
the Capital Contributions made by such Member (or its predecessors in interest)
pursuant to Section 3.3 of the Chaparral LLC Agreement.
"ADDITIONAL CLASS B MEMBER INTEREST" is defined in Section 3.2(b)(iii)
of the Chaparral LLC Agreement.
"ADDITIONAL FINANCING COSTS" means (i) all Administrative Expenses,
excluding any Taxes other than Documentary Taxes, plus (ii) if applicable, any
Limestone Notes Make-Whole Premium and/or New Limestone Notes Make-Whole
Premium.
"ADDITIONAL FINANCING COSTS PAYMENT DATE" is defined in Section 6.10 of
the Chaparral LLC Agreement.
"ADDITIONAL SHARES" means shares of El Paso Common Stock or, if
authorized by the Board of Directors of El Paso, El Paso Preferred Stock, in
each case to be issued by El Paso following a Partial Remarketing pursuant to
Section 8(f) of the Remarketing Agreement.
"ADJUSTED CAPITAL ACCOUNT" means, with respect to any Member, the
balance, if any, in such Member's Capital Account as of the end of the relevant
Allocation Period, after giving effect to the following adjustments:
Project Electron
Annex A
(i) Credit to such Capital Account any amounts that such
Member is obligated to contribute or deemed to be obligated to
contribute pursuant to the penultimate sentences of Regulation Sections
1.704-2(g)(1) and 1.704-2(i)(5); and
(ii) Debit to such Capital Account the items described in
Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5)
and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account is intended to
comply with the provisions of Regulation Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.
"ADMINISTRATIVE EXPENSES" means, without duplication: (a) any fees,
expenses (including extraordinary expenses) and/or indemnities due or payable as
of any Limestone Note Payment Date or any Additional Financing Costs Payment
Date to any of the Indenture Trustee, the Limestone Trustee, the Overfund
Trustee and the Share Trustee or any Certificateholder Related Person, in each
case, in accordance with the Transaction Documents, including all amounts set
forth in the Administrative Expenses Certificate; (b) any fees and expenses due
or payable as of any Limestone Note Payment Date or any Additional Financing
Costs Payment Date, to (i) each of the accountants and agents of (including the
servicer under the Administrative Services Agreement) and counsel for Limestone
and the Co-Issuer, the Overfund Trust and the Share Trust in connection with
services rendered in accordance with the Transaction Documents, and (ii) each
Rating Agency in connection with any rating or rating estimate of the Limestone
Notes or the Limestone Certificates as contemplated by the Transaction
Documents; (c) any governmental fee, charge or tax, including Taxes, due or
payable as of any Limestone Note Payment Date or any Additional Financing Costs
Payment Date by each of the Issuer, the Co-Issuer, the Overfund Trust and the
Share Trust; provided, however, that Administrative Expenses shall not include
any amounts due or accrued with respect to any actions taken on or in connection
with the Closing Date which shall be paid on the Closing Date.
"ADMINISTRATIVE EXPENSES CERTIFICATE" means the certificate of
Limestone dated as of the Closing Date and delivered to the Indenture Trustee
setting forth the annual Administrative Expenses, as such certificate may be
amended from time to time; provided, that, with respect to any contemplated
amendment of the Administrative Expenses Certificate in connection with a
recurring Administrative Expense, Limestone shall provide as much advance notice
as is practicable to El Paso of such contemplated amendment and Limestone shall
use its best efforts to allow El Paso to take reasonable steps to manage the
amount of such recurring Administrative Expense.
"ADMINISTRATIVE SERVICES AGREEMENT" means the Amended and Restated
Administrative Services Agreement dated as of March 27, 2002, among Limestone,
the Co-Issuer and the Management Company.
"AFFILIATE" means with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such Person. The term "control"
(including the correlative term "controlled") means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting stock, by
contract, or
-2-
Project Electron
Annex A
otherwise. Affiliate, when used with respect to El Paso or any of its
Subsidiaries, shall not include Chaparral or any of its Subsidiaries; provided
that none of Limestone, Chaparral, Mesquite, or any of their Subsidiaries shall
be deemed to be Affiliates of El Paso.
"AFTER-TAX BASIS" means, with respect to any payment to be made on an
"AFTER-TAX BASIS", that such payment will be grossed-up by the payor to make the
payee whole for the net amount of additional Taxes payable as a result of the
receipt or accrual of such payment and such gross-up amount (taking into account
all available credits or deductions attributable to the payment or accrual of
such additional Taxes). In calculating the gross-up amount, the Tax rates used
shall be the highest marginal Tax rates in effect for (and payable by) the payee
(or in the case of a payee that is a pass-through entity for any Tax purposes,
the Persons who are required to take into account any items of income, gain,
loss, deduction or credit with respect to such entity) on the date of such
payment or accrual; provided, however, that in the case of a payee that is (i) a
pass-through entity in which CSFB or any of its Affiliates is a general partner
or managing member or is otherwise managed by CSFB or any of its Affiliates, or
(ii) a pass-through entity in which a party in (i) above has a direct or
indirect beneficial interest, the Tax rates used shall be the highest marginal
Tax rates in effect for an individual residing in the United States.
"AGGREGATE CHAPARRAL MATERIAL ADVERSE EFFECT" means that:
(a) with respect to any Immateriality Exception in any representation
and warranty, or any covenant, respectively, made by El Paso or any El Paso
Party in a particular agreement:
(i) the aggregate amount (without duplication) of (A) all
items included in such Immateriality Exception, and consequently
excluded from the coverage of such representation and warranty, or such
covenant, respectively, by reason of such Immateriality Exception, plus
(B) all other items included in the Immateriality Exceptions to, and
consequently excluded from the coverage of, other representations and
warranties, or covenants, respectively made by such Persons in the
Transaction Documents, less
(ii) to the extent relevant to such determination, the
aggregate of the amounts with respect to all items referred to in
clauses (a)(i)(A) and (a)(i)(B) that both (A) were reserved for on the
consolidated balance sheet of Chaparral and its consolidated
Subsidiaries and (B) were reflected in a reduction in the purchase
price or acquisition cost to Chaparral, Mesquite or Mesquite's
Subsidiaries of any asset or assets to which such representation and
warranty, or covenant, respectively, applies, as reflected on the
acquisition cash flow model for such purchase or acquisition would have
(I) a material adverse effect on the financial condition or operations
of Chaparral and its consolidated subsidiaries determined on a
consolidated basis, or (II) a material adverse effect on the ability of
any of El Paso, El Paso Chaparral Holding, El Paso Chaparral,
Chaparral, Mesquite or Management Company to perform its material
obligations under any Transaction Document to which it is a party; or
-3-
Project Electron
Annex A
(b) there would result the invalidity or unenforceability, in whole or
in material part, of any Transaction Document to which any of El Paso, El Paso
Chaparral Holding, El Paso Chaparral, Chaparral, Mesquite or Management Company
is a party; or
(c) there would result a material adverse effect on the rights and
remedies of any Indemnified Person under any such Transaction Document.
"ALLOCATION PERIOD" means (a) if no Earn-Out Period Commencement Date
has occurred, the annual period beginning on January 1 of each year, (b) if an
Earn-Out Period Commencement Date occurs, the period beginning on the first day
of each calendar month beginning with the first month in the calendar year in
which the Earn-Out Period Commencement Date occurs and ending on the earlier of
the last day of such month or the Earn-Out Period Termination Date and (c) if
Chaparral shall not have been liquidated on the Earn-Out Period Termination
Date, the period commencing immediately after such date and ending on the last
day of the calendar year in which such date occurs, and each calendar year
thereafter; provided, however, that in the year in which Chaparral is
liquidated, the final Allocation Period shall end on the date Chaparral is
liquidated.
"ALTERNATE BASE RATE" means, for any period a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum shall at
all times be equal to the highest of (a) the rate of interest announced publicly
by JPMorgan Chase Bank in New York, New York, from time to time, as its base
rate and (b) 1/2 of 1% (1/2%) per annum above the Federal Funds Rate.
"AMENDED EL PASO/CHAPARRAL NOTE" is defined in the Preliminary
Statements to the Chaparral LLC Agreement.
"ANNUAL FIXED FEE" means, for the year ending December 31, 2000, and
for each succeeding year, $20,000,000; provided, that during any year (or
portion thereof) from the Earn-Out Period Commencement Date to the Earn-Out
Period Termination Date, "Annual Fixed Fee" shall mean $5,000,000 (or the pro
rata portion thereof). For purposes of clause (b)(iv) of the definition of
"Available Net Present Value" and clause (b)(iv) of the definition of "Coverage
Ratio", the Earn-Out Period Commencement Date shall be assumed to occur on March
15, 2003.
"ANNUAL PERFORMANCE FEE" means (i) for the year ending December 31,
2000, $80,000,000 and (ii) for each succeeding calendar year, 20% of Available
Net Present Value, in each case as determined pursuant to Section 4.3 of the
Management Agreement and as adjusted pursuant to Section 4.4 of the Management
Agreement.
"APPLICABLE DISCOUNT RATE" is defined in Section 1 of the Management
Agreement.
"APPLICABLE LAW" means any legally binding law, statute, treaty,
constitution, regulation, rule, ordinance, order or Governmental Approval, or
other legally binding governmental restriction, requirement or determination, of
or by any Governmental Authority.
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"APPLICABLE TERMINATION PERIOD" means the period beginning on the first
of the following dates to occur: (i) the first day of the Earn-Out Period and
(ii) the first day following a Xxxx-to-Market Measurement Date.
"ARRANGER" means CSFB, as successor to Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation.
"ASSET DISPOSITION" is defined in Section 5.1(g) of the Chaparral LLC
Agreement.
"ASSET PV" means, with respect to any asset, the Present Value of such
asset's Cash Flows, which Asset PV shall (a) in the case of any asset held by
Chaparral or any Project Company on the Management Fee Calculation Date next
preceding the applicable date of determination, be calculated as of such
preceding Management Fee Calculation Date and (b) in the case of any asset
acquired thereafter, be calculated as the Present Value of such asset's Cash
Flows, as determined in the manner specified in the Management Agreement.
"ASSET REMEDY" is defined in Section 11.3(a) of the Chaparral LLC
Agreement.
"ASSET REMEDY NOTICE" is defined in Section 11.3(a) of the Chaparral
LLC Agreement.
"ASSET REMEDY STANDSTILL EXPIRATION DATE" means, with respect to any
Limestone Note Trigger Event or New Indenture Event of Default, the expiration
of the 21-day or 120-day period (as applicable) referred in the definition of
Asset Remedy Standstill Period.
"ASSET REMEDY STANDSTILL PERIOD" means (a) in the case of a Limestone
Note Trigger Event arising as a result of an Acceleration Trigger, the later of
(x) 21 days after such Acceleration Trigger and (y) if, within 21 days after
such event, El Paso files a registration statement for and is diligently
pursuing the registration and sale of El Paso equity consisting of mandatorily
convertible preferred stock or common stock (including the El Paso Preferred
Stock and the shares issued pursuant to the Remarketing Agreement) in order to
generate proceeds at least equal to the Share Trust Amount, then 120 days
following the occurrence of such Acceleration Trigger, (b) in the case of a
Limestone Note Trigger Event arising as a result of a Maturity Trigger, 120 days
following the occurrence of such Limestone Note Trigger Event and (c) in the
case of a New Indenture Event of Default, the period commencing on the
occurrence of such New Indenture Event of Default and ending 120 days after the
acceleration (if any) of the New Limestone Notes as a result thereof.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" is defined in the Preliminary
Statements to the Chaparral LLC Agreement.
"ATTRIBUTABLE PERCENTAGE" means, in respect of a non-wholly owned
Subsidiary of Mesquite or a Mesquite Minority Owned QEC, the proportion that (i)
Mesquite's direct or indirect common stock, limited liability company or other
ordinary Equity Interests in such Business Entity bears to (ii) the total
outstanding common stock, limited liability company or other ordinary Equity
Interests of such Business Entity.
"AUDITORS" is defined in Section 4.1(j) of the Participation Agreement.
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"AUTHORIZED OFFICER" means (a) in the case of El Paso (in any capacity)
and the Co-Issuer, any president, vice president, secretary, treasurer or any
other authorized officer or agent as may from time to time be designated as
such, and (b) in the case of the Indenture Trustee, the New Indenture Trustee
and Limestone, a Responsible Officer or such other Persons as may from time to
time be designated as such.
"AVAILABLE CASH" means on any date, (a) with respect to Chaparral, the
amount of Cash held by Chaparral on such date, less all Company Expenses of
Chaparral, less all other cash requirements of Chaparral, as reasonably
determined by the Managing Member, and (b) with respect to Mesquite, the amount
of Cash held by Mesquite on such date, less all Company Expenses of Mesquite,
less all contingent purchase price payments and capital expenditures, less all
other cash requirements of Mesquite, as reasonably determined by the Managing
Member.
"AVAILABLE NET PRESENT VALUE" is defined in Section 1 of the Management
Agreement.
"BANKRUPTCY" means, with respect to any Person, a Voluntary Bankruptcy
or an Involuntary Bankruptcy. A "VOLUNTARY BANKRUPTCY" means, with respect to
any Person: (a) (i) the inability of such Person generally to pay its debts as
such debts become due, (ii) the failure of such Person generally to pay its
debts as such debts become due or (iii) an admission in writing by such Person
of its inability to pay its debts generally or a general assignment by such
Person for the benefit of creditors; (b) the filing of any petition by such
Person seeking to adjudicate it a bankrupt or insolvent, or seeking for itself
any liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of such Person or its debts under any
Applicable Law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking, consenting to, or acquiescing in the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar
official for such Person or for any substantial part of its property or the
filing of an answer or other pleading admitting or failing to contest the
allegations of a petition filed against it in any proceeding of the foregoing
nature; or (c) action taken by such Person to authorize any of the actions set
forth above. An "INVOLUNTARY BANKRUPTCY" means, with respect to any Person,
without the consent or acquiescence of such Person, the entering of an order for
relief or approving a petition for relief or reorganization or any other
petition seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or other similar relief under any present or future
bankruptcy, insolvency or similar Applicable Law, or the filing of any such
petition against such Person, that shall not be dismissed or stayed within 60
days, or, without the consent or acquiescence of such Person, the entering of an
order appointing a trustee, custodian, receiver or liquidator of such Person or
of all or any substantial part of the property of such Person that shall not be
dismissed or stayed within 60 days. This definition is intended to supersede the
definition of Bankruptcy and similar events set forth in Sections 18-101(1) and
18-304 of the LLC Act.
"BENEFIT PLAN INVESTOR" has the meaning given to such term in the Plan
Asset Regulations issued by the United States Department of Labor at 29 C.F.R.
Section 2510.3-101.
"BUDGET PARAMETERS" means the budget parameters described on Schedule
6.3(f) to the Chaparral LLC Agreement.
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"BUSINESS DAY" means (a) any day of the year except Saturday, Sunday
and any day on which commercial banking institutions are authorized or obligated
by law, regulation or executive order to close in New York, New York,
Wilmington, Delaware or Houston, Texas and (b) if the applicable Business Day
relates to any day on which any amount to be paid under any of the Transaction
Documents is based on the Eurodollar Rate, any day that is a "Business Day"
described in clause (a) and that is also a day for trading by and between banks
in the London interbank market.
"BUSINESS ENTITY" means a corporation (or, when used as an adjective,
corporate), limited liability company, partnership (whether general or limited),
business trust, joint stock company, unincorporated association, joint venture
or other applicable business entity and any asset or group of assets that is or
can be operated as or as part of a business unit, whether or not having distinct
legal existence.
"CAPITAL ACCOUNT" means, with respect to any Member, the Capital
Account in Chaparral maintained for such Member in accordance with the following
provisions:
(i) To each Member's Capital Account there shall be credited
such Member's Capital Contributions (including all Additional Capital
Contributions), such Member's distributive share of Net Income and any
items in the nature of income or gain allocated to such Member pursuant
to Article IV of the Chaparral LLC Agreement, and the amount of any
Chaparral liabilities of such Member assumed by such Member or which
are secured by any Chaparral Property or Mesquite Property Distributed
to such Member;
(ii) To each Member's Capital Account there shall be debited:
(a) the amount of Cash and the Gross Asset Value of any Chaparral
Property or Mesquite Property Distributed to such Member pursuant to
any provision of the Chaparral LLC Agreement (including the Gross Asset
Value of any El Paso Note Distributed to any Member) or deemed
Distributed pursuant to Sections 5.4 or 5.5 of the Chaparral LLC
Agreement; (b) the amount of liabilities of any such Member assumed by
Chaparral or which are secured by and such property contributed by such
Member to Chaparral; and (c) such Member's distributive share of Net
Losses and any items in the nature of expenses or losses, allocated to
such Member pursuant to Article IV of the Chaparral LLC Agreement;
(iii) The obligations of El Paso pursuant to the Remarketing
Agreement, the Share Trust Agreement and the El Paso Guarantee shall
each be treated for purposes of maintaining Capital Accounts as a
deficit restoration obligation within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(c) in an amount equal to the Share Trust
Amount (in the case of El Paso's obligations pursuant to the
Remarketing Agreement and Share Trust Agreement) or the aggregate
Outstanding principal amount of the New Limestone Notes together with
accrued interest and premium (if any) thereon (in the case of El Paso's
obligations under the El Paso Guarantee);
(iv) In the event all or a portion of an Interest in Chaparral
is Disposed of in accordance with the terms of the Chaparral LLC
Agreement, the transferee shall succeed
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to the Capital Account of the transferor to the extent it relates to
the Transferred Interest; and
(v) In determining the amount of any liability for purposes of
this definition of "Capital Account", there shall be taken into account
Code Section 752(c) and any other applicable provisions of the Code and
Regulations.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such Regulations.
"CAPITAL CONTRIBUTIONS" means, with respect to any Member, the amount
of Cash and the Initial Gross Asset Value of any Chaparral Permitted Assets
(other than Cash) contributed (or deemed to be contributed) to Chaparral by such
Member (or its predecessors in interest) with respect to the Interest held by
such Member.
"CASH" means cash, amounts credited to deposit accounts and other
immediately available funds that are denominated in Dollars.
"CASH FLOWS" is defined in Section 1 of the Management Agreement.
"CDI PROJECT INTERESTS" means, subject to the provisions of Section 3
of the Contingent Debt Instrument: (a) the 45.75% limited partnership interest
in Polk Power Partners, L.P., a Delaware limited partnership, which is owned at
the Closing Date by EPEC MLP Inc., a Delaware corporation, (b) the 50% interest
in Polk Power XX XX, Inc., a Delaware corporation, which is owned at the Closing
Date by El Paso Energy International Company, a Delaware corporation, (c) the
49.5% limited partnership interest in Orange Cogeneration Limited Partnership, a
Delaware limited partnership, which is owned at the Closing Date by Orange
Acquisition Inc., a Delaware corporation, (d) the 50% interest in Orange
Cogeneration XX XX, Inc., a Delaware corporation, which is owned at the Closing
Date by El Paso Energy International Company, a Delaware corporation, (e) the
17.5% general partnership interest in Masspower, which is owned at the Closing
Date by EPEC Independent Power I Company, a Delaware corporation, (f) the 25%
unit membership interest in Berkshire Power Company, LLC, a Massachusetts
limited liability company which is owned at the Closing Date by El Paso
Berkshire Power II Company, a Delaware corporation, (g) the 25% unit membership
interest in Milford Power Company LLC, a Delaware limited liability company,
which is owned at the Closing Date by El Paso Milford Power II Company, a
Delaware corporation, (h) any Involuntary Transfer Non-Cash Consideration
received in connection with any Involuntary Transfer, as contemplated by Section
3(b) of the Contingent Debt Instrument, and (i) any Additional Polk Power
Interests and Additional Orange Cogeneration Interests acquired as contemplated
by clause (ii) of the definition of Project Interest Contributions (as defined
in the Contingent Debt Instrument).
"CERTIFICATE FACE AMOUNT" means, with respect to each Limestone
Certificate, the portion of the aggregate face amount of Limestone Certificates
outstanding corresponding to such Limestone Certificate as specified on the face
of such Limestone Certificate on its date of issuance.
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"CERTIFICATE OF INTEREST" is defined in Section 3.1 of the Chaparral
LLC Agreement.
"CERTIFICATE PURCHASE AMOUNT" means, as of any date of determination,
the aggregate amount that would be required to be paid to the Class A Member as
the Purchase Price of the Class A Member Interest pursuant to Section 11.2(e) of
the Chaparral LLC Agreement as if such date of determination were the Purchase
Date for purposes of such Section of the Chaparral LLC Agreement, minus the
aggregate amount then necessary to discharge both (x) the Indenture under
Section 10.01 thereof and (y) the New Indenture under Section 10.01 thereof.
"CERTIFICATE PURCHASE OPTION" is defined in Section 7.02(b) of the
Limestone Trust Agreement.
"CERTIFICATE PURCHASE OPTION NOTICE" means a notice delivered by the
holder of the El Paso Interest or its designee or assign in accordance with
Section 7.02(b) of the Limestone Trust Agreement.
"CERTIFICATEHOLDER" is defined in Article II of the Limestone Trust
Agreement.
"CERTIFICATEHOLDER RELATED PERSON" means each Person claiming by,
through or under a Certificateholder, or who is entitled to any contractual
right of reimbursement or indemnity from a Certificateholder, in connection with
the transactions contemplated by the Transaction Documents.
"CHAPARRAL" means Chaparral Investors, L.L.C., the limited liability
company formed pursuant to the Original LLC Agreement and the Chaparral
Certificate of Formation and continued pursuant to each of the First Amended and
Restated LLC Agreement, the Second Amended and Restated LLC Agreement, the Third
Amended and Restated LLC Agreement, the Fourth Amended and Restated LLC
Agreement and the Chaparral LLC Agreement, and the limited liability company
continuing the business of Chaparral Investors, L.L.C. pursuant to Section 12.1
of the Chaparral LLC Agreement in the event of dissolution of Chaparral as
provided in the Chaparral LLC Agreement.
"CHAPARRAL ACCOUNTANTS" means PricewaterhouseCoopers LLP or any other
independent accounting firm of national reputation selected by the Managing
Member with the consent of the Class A Member, which consent shall not be
unreasonably withheld or delayed.
"CHAPARRAL CERTIFICATE OF FORMATION" is defined in Section 1.6 of the
Chaparral LLC Agreement.
"CHAPARRAL DOCUMENTS" means the Chaparral LLC Agreement, the
Participation Agreement, the Mesquite LLC Agreement, the Management Agreement
and the Overfund Trust Agreement.
"CHAPARRAL EXPENSE PAYMENTS" means, collectively but without
duplication, 100% of amounts paid by Chaparral, Mesquite or any wholly-owned
Subsidiary of Mesquite, and the Attributable Percentage of amounts paid by any
non-wholly owned Subsidiary of Mesquite or any Mesquite Minority Owned QEC, (i)
to third Persons in respect of judgments, damages or
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penalties with respect to, or to third Persons in settlement of, claims
(including but not limited to negligence, strict or absolute liability,
liability in tort and liabilities arising out of violation of regulatory
requirements or other Applicable Laws of any kind), actions or suits and (ii) in
respect of out-of-pocket costs, expenses, disbursements (including reasonable
fees and disbursements of counsel (other than such fees and disbursements
constituting Chaparral Extraordinary Liabilities) and claims, damages,
liabilities and expenses relating to environmental matters) of Chaparral,
Mesquite, any Subsidiary of Mesquite or any Mesquite Minority Owned QEC and
other obligations payable by Chaparral, Mesquite, any Subsidiary of Mesquite or
any Mesquite Minority Owned QEC to third Persons.
"CHAPARRAL EXTRAORDINARY LIABILITIES" means for any year, without
duplication, any and all:
(a) (x) liabilities, taxes, losses, damages (including
foreseeable and unforeseeable, consequential and punitive damages),
obligations, and charges (including, without limitation, penalties,
fines, court costs, administrative service fees, response and
remediation costs, stabilization costs, encapsulation costs, treatment,
storage or disposal costs, groundwater monitoring or environmental
study, sampling or monitoring costs, and any other costs and reasonable
expenses (including reasonable attorneys', experts' and consultants'
fees and disbursements and investigating, laboratory and data review
fees)), and (y) sums paid in settlement of actions (formal or informal,
governmental, third-party or otherwise), claims (including claims for
personal injury under any theory or for real or personal property
damage), liens or administrative proceedings, in each case in clauses
(x) and (y) above, that are imposed upon or incurred by Chaparral or
any of the Project Companies arising directly or indirectly out of:
(i) the past, present or future release, spill,
emission, injection, leaching, dumping, escaping or seeping of
any Hazardous Materials, or material containing or alleged to
contain Hazardous Materials, at or from any past, present or
future properties or assets of Chaparral or any of the Project
Companies;
(ii) the violation or alleged violation by Chaparral,
any of the Project Companies or any third party of any
Environmental Laws with regard to the past, present or future
ownership, operation, use or occupying of any property or
asset of Chaparral or any of the Project Companies; or
(iii) any Environmental Action arising in connection
with any business or activities of Chaparral or any of the
Project Companies; and
(b) expenses incurred by Chaparral or any of the Project
Companies as a result of casualty, theft, product liability, tort or
breach of contract or any allegation of any of the foregoing to the
extent not paid or reimbursed by insurance;
provided, however, in the case of clause (a) or (b), (x) amounts shall be taken
into account only to the extent that such amounts are imposed upon or incurred
directly by Mesquite or Chaparral or are included in Chaparral's distributive
share of profits or losses from any Project Company
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and exceed, in the aggregate for such year, $3,000,000 and (y) no Taxes or
Excluded Items shall be taken into account.
"CHAPARRAL EXTRAORDINARY LIABILITY RECOVERY AMOUNT" means the remainder
of (x) the cumulative Chaparral Extraordinary Liabilities incurred, minus (y)
the cumulative Extraordinary Expenditure Recoveries.
"CHAPARRAL FINANCIAL MODEL" is defined in Section 4.1(n) of the
Participation Agreement.
"CHAPARRAL INVESTOR'S ACCOUNT" means the Chaparral Investors, L.L.C.
account (account number 003-3646) at Mellon Bank, ABA # 000000000.
"CHAPARRAL LLC AGREEMENT" means the Fifth Amended and Restated Limited
Liability Company Agreement of Chaparral Investors, L.L.C., dated as of the
Signing Date, and includes this Annex A and all other annexes, schedules and
exhibits attached thereto, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"CHAPARRAL OPERATING SUBSIDIARY" means the direct or indirect
subsidiaries of Chaparral which are organized to acquire (by purchase, exchange
or contribution) New Assets or other Qualified Energy Assets acquired from time
to time.
"CHAPARRAL PERMITTED ASSETS" means:
(a) the Mesquite LLC Interest;
(b) El Paso Loans;
(c) Financial Investments;
(d) Qualified Energy Assets that are Limited Liability Equity
Interests; provided, that such assets will only be "Chaparral Permitted
Assets" if (i) acquired by Chaparral for the purpose of transferring
(by contribution, sale or otherwise) such assets to Mesquite and (ii)
such assets are, or represent direct or indirect interests in, assets
located in the United States or Canada;
(e) Chaparral's sole beneficial interest in the Overfund
Trust; and
(f) any other assets that are contributed to or otherwise
acquired by Chaparral with the consent of all of the Members; provided,
that any assets acquired pursuant to this clause (f) that are Qualified
Energy Assets shall be, or shall represent direct or indirect interests
in, assets located in the United States or Canada.
"CHAPARRAL PERMITTED LIENS" means, collectively, (a) Permitted Liens
and (b) Liens created under the Mesquite Pledge Agreement.
"CHAPARRAL PROPERTY" means all real and personal property owned by
Chaparral and any improvements thereto, including both tangible and intangible
property.
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"CLASS A MEMBER" means any Person that holds all or any part of the
Class A Member Interest or the collective reference to all such Persons, as the
context may require.
"CLASS A MEMBER INTEREST" means the Interest in Chaparral designated as
a Class A Member Interest under the Chaparral LLC Agreement.
"CLASS A MEMBER'S CUMULATIVE PRIORITY RETURN" means, as of any given
day, the sum of the amounts determined pursuant to the definition of the "CLASS
A MEMBER'S PRIORITY RETURN" for each Current Period since the Closing Date, and
ending before such day.
"CLASS A MEMBER'S PRIORITY RETURN" means, (a) for the period beginning
January 1, 2000 and ending on the Closing Date $3,318,383.12, and (b) for the
period beginning on the day after the Closing Date and ending September 15,
2000, and each succeeding period ending on a Distribution Date or any other date
of determination, the sum of the amounts (without duplication) determined for
each day during such period (including the first day and excluding the last day
thereof), equal to the sum of:
(i) if any Limestone Notes are then outstanding, the amount of
interest (including Default Interest on any overdue amount) accruing on
such Limestone Notes for such day;
(ii) if any New Limestone Notes are then outstanding, the
amount of interest (including any Default Interest on any overdue
amount) accruing on such New Limestone Notes for such day.
(iii) the amount of interest that would accrue with respect to
the Limestone Equity Cash Component for such day as if such component
represented indebtedness accruing interest at a rate of (x) on any date
prior to March 15, 2003, 10.35% and (y) on any date occurring on or
after March 15, 2003, 10.85% (plus an additional 0.50% for every
additional successive semi-annual period commencing on or after
September 15, 2003 until March 15, 2006), in each case, calculated on
the basis of a 360-day year consisting of twelve 30-day months and
including Default Yield on any overdue amount; and
(iv) an amount equal to 17.5% per annum, compounded
semi-annually on the Limestone Equity PIK Component for such day.
"CLASS A PERCENTAGE" means, with respect to any Class A Member as of
any date, the ratio (expressed as a percentage) of such Class A Member's Capital
Account on such date to the aggregate Capital Accounts of all Class A Members on
such date, such Capital Accounts to be determined after giving effect to all
contributions, distributions and allocations for all Allocation Periods ending
on or prior to such date. If it is necessary to determine the relative Class A
Percentages of the Class A Members at a time when the balances of the Capital
Accounts of the Class A Members are zero or less, their relative Class A
Percentages shall be deemed to be their respective Class A Percentages as of the
last date on which a new Class A Member was admitted to Chaparral.
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"CLASS B MEMBER" means any Person that holds all or any part of the
Class B Member Interest or the collective reference to all such Persons, as the
context may require.
"CLASS B MEMBER INTEREST" means each Interest in Chaparral designated
as a Class B Member Interest under the Chaparral LLC Agreement.
"CLASS B PERCENTAGE" means, with respect to any Class B Member as of
any date, the ratio (expressed as a percentage) of such Class B Member's Capital
Account on such date to the aggregate Capital Accounts of all Class B Members on
such date, such Capital Accounts to be determined after giving effect to all
contributions, distributions and allocations for all Allocation Periods ending
on or prior to such date. If it is necessary to determine the relative Class B
Percentages of the Class B Members at a time when the balances of the Capital
Accounts of the Class B Members are zero or less, their relative Class B
Percentages shall be deemed to be their respective Class B Percentages as of the
last date on which a new Class B Member was admitted to Chaparral.
"CLOSING AGREEMENT" means the Closing Agreement dated as of March 27,
2002, among Limestone, the Co-Issuer, El Paso, Electron and The Bank of New
York, in its individual capacity and as New Indenture Trustee.
"CLOSING COSTS" means (i) all fees, costs and expenses payable pursuant
to the DLJ Fee Letter, (ii) all fees, costs and expenses of El Paso and its
Affiliates incurred in connection with the transactions contemplated in the
Chaparral LLC Agreement and the other Transaction Documents including El Paso's
counsel and accountants fees, (iii) all fees, costs and expenses of the Class A
Member incurred in connection with the transactions contemplated in the
Chaparral LLC Agreement, including the Class A Member's counsel fees, (iv) all
fees, costs and expenses of the Limestone Trustee, the Share Trustee, the
Overfund Trustee and the Indenture Trustee, including the respective counsel
fees of the Limestone Trustee, the Share Trustee, the Overfund Trustee and the
Indenture Trustee, and (v) any other fees, costs and expenses with respect to
the Limestone Certificates incurred in connection with the transactions
contemplated in the Chaparral LLC Agreement and the other Transaction Documents
certified in writing by the Limestone Trustee.
"CLOSING DATE" means March 27, 2000.
"CLOSING PRICE" for any Trading Day, means, for a security, an amount
equal to the closing price for such security on such Trading Day as reported by
Bloomberg L.P., or if not so reported by Bloomberg L.P., as reported by another
recognized source selected by the Chief Executive Officer or Chief Financial
Officer of El Paso, or by the Remarketing Agents, if the Chief Executive Officer
or Chief Financial Officer of El Paso fails to make such selection promptly upon
request by the Indenture Trustee (or, if a Limestone Contingent Share Trust
Remedy Condition shall exist, by Limestone).
"CODE" means the United States Internal Revenue Code of 1986, as
amended from time to time.
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Annex A
"CO-ISSUER" means Limestone Electron, Inc., a corporation organized
under the law of the State of Delaware.
"COLLECTIONS" is defined in Article II of the Share Trust Agreement.
"COMMENCEMENT DATE" means March 28, 2002.
"COMPANY EXPENSES" means (a) with respect to Chaparral, all interest,
costs, expenses, indemnities, fees (including reasonable attorneys' and
accountants' fees), Additional Financing Costs, Taxes and other payment
obligations incurred or owing by Chaparral, but not including any Distributions
required to be paid pursuant to Article V, Section 11.1, Section 11.2 or Article
XII of the Chaparral LLC Agreement, together with reasonable reserves for
payment of the foregoing, and (b) with respect to Mesquite, all interest, costs,
expenses, indemnities, fees (including reasonable attorneys' and accountants'
fees), Additional Financing Costs, Taxes and other payment obligations incurred
or owing by Mesquite, but not including any obligation to make Distributions
required to be paid pursuant to the Mesquite LLC Agreement, together with
reasonable reserves for payment of the foregoing.
"CONSOLIDATED" refers, with respect to any Person, to the consolidation
of accounts of such Person and its Subsidiaries in accordance with GAAP.
"CONTINGENT DEBT INSTRUMENT" means the contingent interest promissory
note of El Paso dated as of January 12, 2000.
"CONTRACTUAL OBLIGATION" means, as to any Person, any security issued
by, or Permitted Financial Obligation of, such Person or any other agreement,
instrument or undertaking to which such Person is a party or by which it or any
of its property is bound, or any provision of any of the foregoing.
"COVERAGE RATIO" means the ratio, determined as of the Closing Date for
the period ending December 31, 2000, and determined annually after the Closing
Date as provided in Section 4.3 of the Management Agreement and subject to
adjustment pursuant to Sections 4.4 and 4.5 of the Management Agreement, of (a)
the sum of (i) the Present Value of Cash Flows, plus (ii) the Fair Market Value
of Financial Investments, plus (iii) the outstanding principal amount of an
accrued and unpaid interest on all loans to El Paso from Chaparral, Mesquite or
any of their Subsidiaries, plus (iv) the Present Value of all other assets and
minus (v) with respect to the period ending December 31, 2000, $80,000,000, and
with respect to any succeeding calendar year, the Annual Performance Fee for
such succeeding calendar year and minus (vi) the unpaid portion of any Annual
Performance Fee deferred pursuant to Section 4.2(a) or 4.2(b) of the Management
Agreement to (b) the sum of (i) Liabilities not otherwise taken into account in
the computation of Cash Flows, (ii) the Limestone Equity Cash Component and
Limestone Equity PIK Component, (iii) the Limestone Note Component and (iv) the
Present Value of all Annual Fixed Fees payable to the Management Company after
the time of determination through March 31, 2003. Solely for purposes of
calculating Cash Flows in connection with the determination of the Coverage
Ratio, projection will be adjusted to reflect the benefits only of
restructurings that have actually occurred (i.e., unrestructured Present Value
will be used for projects that have not actually been restructured).
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"COVERAGE RATIO TEST" is defined in Section 1 of the Management
Agreement.
"CREDIT AGREEMENT" is defined in Section 1 of the Management Agreement.
"CSFB" means Credit Suisse First Boston Corporation.
"DEALER MANAGER" means CSFB.
"DEALER MANAGER AGREEMENT" means the Dealer Manager and Consent
Solicitation Agreement dated as of the Commencement Date among Limestone, the
Co-Issuer, El Paso and CSFB.
"DEFAULT" means any event or occurrence which with the giving of notice
or lapse of time or both would become a Limestone Note Trigger Event, a
Limestone Certificate Trigger Event, a New Indenture Event of Default or a
Specified Equity Event.
"DEFAULT INTEREST" means, for any period with respect to any defaulted
payment, the product of (a) the Default Interest Rate, (b) the amount overdue
and (c) the quotient of (i) the number of days actually elapsed since the date
on which such payment was due (calculated on the basis of a 360-day year
consisting of twelve 30-day months) and (ii) 360.
"DEFAULT INTEREST RATE" means 2% per annum.
"DEFAULT NOTICE" is defined in Section 9.01 of the Indenture (with
respect to the Limestone Notes) and Section 9.01 of the New Indenture (with
respect to the New Limestone Notes).
"DEFAULT YIELD" means, for any period with respect to any defaulted
payment, the product of (a) the Default Yield Rate, (b) the amount overdue and
(c) the quotient of (i) the number of days actually elapsed since the date on
which such payment was due (calculated on the basis of a 360-day year consisting
of twelve 30-day months) and (ii) 360.
"DEFAULT YIELD RATE" means 2% per annum.
"DELAWARE UCC" means the Uniform Commercial Code as in effect from time
to time in the State of Delaware.
"DEPRECIATION" means, for each Allocation Period, an amount equal to
the depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such Allocation Period (including the amortization of
any Closing Costs whether or not deductible for federal income tax purposes),
except that if the Gross Asset Value of an asset differs from its adjusted basis
for federal income tax purposes at the beginning of such Allocation Period,
Depreciation shall be an amount which bears the same ratio to such beginning
Gross Asset Value as the federal income tax depreciation, amortization, or other
cost recovery deduction for such Allocation Period bears to such beginning
adjusted tax basis; provided, however, that if the adjusted basis for federal
income tax purposes of an asset at the beginning of such Allocation Period is
zero, Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the Managing Member.
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"DISCLOSURE SCHEDULE" means the schedule, if any, accompanying the
representations given pursuant to Section 4.3 of the Participation Agreement.
"DISCUSSION AND ANALYSIS" is defined in Section 8.2(b)(ii) of the
Chaparral LLC Agreement.
"DISPOSITION" means, with respect to any property, any sale,
assignment, gift, exchange, lease, conversion, transfer, pledge or other
disposition or divestiture of such property, including any transfer by way of a
capital contribution and the creation of any, or material increase in any
existing, royalty, overriding royalty, reversionary interest, production
payment, or similar burden. "DISPOSE" and "DISPOSED" shall have correlative
meanings.
"DISTRIBUTION" means, as applicable, any distribution or dividend or
return of capital or any other distribution, payment, remittance or delivery of
property or Cash in respect of, or the redemption, retirement, purchase or other
acquisition, directly or indirectly, of, any Interest now or hereafter
outstanding or the setting aside of any funds for any of the foregoing purposes,
including any distribution under Section 5.1, Section 5.4, Section 11.1(d) or
Article XII of the Chaparral LLC Agreement, but specifically excluding any
Termination Period Guaranteed Payment or any payment under Section 3.4(f) or
6.10 of the Chaparral LLC Agreement or any other payment to the Class A Member
that is specified to be treated as a guaranteed payment pursuant to the
Chaparral LLC Agreement. "DISTRIBUTE", "DISTRIBUTED" and "DISTRIBUTIVE" shall
have correlative meanings.
"DISTRIBUTION AGREEMENT" means an underwriting, purchase, distribution
or placement agency agreement to be entered into among El Paso, the Share Trust,
the Remarketing Agents and any other Persons engaged by El Paso, the Share Trust
or the Remarketing Agents to remarket or distribute the Shares pursuant to the
provisions of the Remarketing Agreement (such agreement to be in a form
customary for a firm commitment underwritten public offering (in the case of an
underwriting agreement), a firm commitment underwritten private offering (in the
case of a purchase or distribution agreement) or a best efforts private
placement (in the case of a placement agency agreement), including without
limitation, representations and warranties, covenants, conditions precedent,
indemnification and other provisions as are then customary for such agreements),
and to be prepared, executed and delivered by El Paso and the Share Trust to the
Remarketing Agents on or prior to the Successful Repricing Date, as set forth in
Section 12 of the Remarketing Agreement.
"DISTRIBUTION DATE" means (a) prior to an Earn-Out Period, each
Limestone Note Payment Date and (b) during an Earn-Out Period, the 15th day of
each month.
"DLJ" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation or any
of its successors.
"DLJ FEE LETTER" means the engagement letter dated August 12, 1999 from
DLJ to El Paso.
"DLJ INC." means Xxxxxxxxx, Lufkin & Xxxxxxxx, Inc. or any of its
successors.
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"DOCUMENTARY TAXES" means Taxes (other than income or franchise taxes)
payable by reason of or in connection with the execution, delivery, filing,
release, discharge, amendment or recording of any Transaction Document.
"DOLLARS" and the sign "$" each mean the lawful currency of the United
States.
"EARN-OUT AMOUNT" means the excess, if any, of the maximum amount of
Gross Income that may be allocated to the Class A Member pursuant to Section
4.2(a)(i) of the Chaparral LLC Agreement over the amount of Gross Income
actually allocated pursuant to such Section.
"EARN-OUT DISTRIBUTION DATE" means (a) the fifteenth day of each month
on or after the Earn-Out Period Commencement Date (but prior to the Earn-Out
Period Termination Date) and (b) without duplication, the last Business Day of
the Earn-Out Period; provided, however, that if any day described in clause (a)
is not a Business Day, the Earn-Out Distribution Date for the applicable month
shall occur on the next succeeding Business Day.
"EARN-OUT PERIOD" means the period commencing on the first day of any
Fiscal Year in which the Earn-Out Period Commencement Date occurs and ending on
the Earn-Out Period Termination Date.
"EARN-OUT PERIOD COMMENCEMENT DATE" means the earliest date on which
both of the following shall have occurred: (i) the earlier of (x) the Maturity
Date and (y) the occurrence of a Limestone Note Trigger Event or a Specified
Equity Event and (ii) repayment in full of the Outstanding Limestone Notes and
the New Limestone Notes.
"EARN-OUT PERIOD TERMINATION DATE" means during an Earn-Out Period the
earliest to occur of: (i) the date on which: (x) the Earn-Out Amount equals zero
and (y) no further amounts are distributable pursuant to Section 5.1(b) of the
Chaparral LLC Agreement as the Capital Account of the Class A Member has been
reduced to zero and the Termination Period Guaranteed Payment has been paid in
full; (ii) the Purchase Date; (iii) the Retirement Date; and (iv) the date of a
Liquidating Event.
"ECONOMIC LOSS INDEMNITY PAYMENT DATE" is defined in Section 6.1(b) of
the Participation Agreement.
"ECONOMIC LOSSES" means with respect to each Certificateholder, the
excess of (x) the amount such Certificateholder would have received on the
Economic Loss Indemnity Payment Date if Chaparral, Mesquite or any Project
Company had each realized on the Xxxx-to-Market Measurement Date as an item of
income, a recovery of the Chaparral Extraordinary Liability Recovery Amount
incurred by such Person, and had each received on the last day of a liquidation
of Chaparral pursuant to Article XII of the Chaparral LLC Agreement, Cash in
respect of such amount realized, over (y) the amount such Certificateholder
actually receives on the Economic Loss Indemnity Payment Date pursuant to the
Transaction Documents.
"EFFECTIVE DATE" means the date upon which the Exchange Offer is
consummated.
"ELECTING PURCHASER" is defined in Section 11.2(a) of the Chaparral LLC
Agreement.
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"ELECTRON" means Electron Trust, a special purpose statutory business
trust created under the law of the State of Delaware.
"EL PASO" means El Paso Corporation, a Delaware corporation, and any
successor not prohibited by the terms of the Participation Agreement.
"EL PASO AFFILIATE" means any Person that, directly or indirectly
through one or more intermediaries, controls or is under direct or indirect
common control with El Paso; provided, that El Paso retains, directly or
indirectly, economic exposure to no less than 50% of the equity interest in such
Person. As used in this definition, the term "CONTROL" means possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"EL PASO APPLICABLE MARGIN" means 0.50% per annum.
"EL PASO APPLICABLE RATE" means for any day during any Eurodollar
Period a rate equal to the Eurodollar Rate for such Eurodollar Period plus the
El Paso Applicable Margin; provided, however, that in the event (i) adequate and
fair means do not exist to enable Chaparral to determine the Eurodollar Rate or
(ii) it is unlawful for banks generally in the United States to fund or maintain
loans bearing interest calculated by reference to the Eurodollar Rate hereunder,
then for each day thereafter and until the circumstances described in clause (i)
or (ii) no longer exists, the El Paso Applicable Rate shall be the Alternate
Base Rate on such day.
"EL PASO CHAPARRAL" means El Paso Chaparral Investor, L.L.C., a
Delaware limited liability company, and an indirect Wholly Owned Affiliate of El
Paso.
"EL PASO CHAPARRAL HOLDING" means El Paso Chaparral Holding Company, a
Delaware corporation and an indirect wholly-owned Subsidiary of El Paso.
"EL PASO CHAPARRAL HOLDING II" means El Paso Chaparral Holding II
Company, a Delaware corporation and an indirect wholly-owned Subsidiary of El
Paso Chaparral Holding.
"EL PASO CHAPARRAL LLC AGREEMENT" means the Second Amended and Restated
Limited Liability Company Agreement of El Paso Chaparral dated as of March 27,
2000.
"EL PASO COMMON STOCK" means the common stock, par value $3.00 per
share, of El Paso.
"EL PASO CREDIT FACILITY AGREEMENT" means the 364-Day Revolving Credit
and Competitive Advance Facility Agreement dated as of June 11, 2001, among El
Paso and certain of its Affiliates, the several banks and other financial
institutions from time to time party thereto, JPMorgan Chase Bank, as
administrative agent and CAF Advance Agent, Citibank, N.A. and ABN Amro Bank
N.V., as co-documentation agents and Bank of America, N.A. and Credit Suisse
First Boston, as co-syndication agents.
"EL PASO DEBT OBLIGATION REPAYMENT EVENT" means the occurrence of any
of the following: (a) any event described in Section 9.01(m) of the Indenture or
Section 9.01(k) of the New Indenture, (b) El Paso fails to make payment of
principal of or interest on any El Paso Debt
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Obligations (i) in the case of any El Paso Debt Securities, when due and such
default continues beyond the five Business Day grace period applicable to such
principal and interest payments, (ii) in the case of any El Paso Loan, within
five Business Days after any demand thereon and (iii) in the case of any other
El Paso Debt Obligations, on the date such principal and interest thereon is due
(after giving effect to any applicable grace period with respect thereto), or
(c) an Acceleration Trigger, an acceleration of the New Limestone Notes or a
Specified Equity Event.
"EL PASO DEBT OBLIGATIONS" means (a) the El Paso Debt Securities, (b)
the El Paso Loans and any other loans to El Paso made by the Overfund Trust,
Chaparral or Mesquite or made from amounts deposited in the Indenture Collection
Account pursuant to Section 5.03 of the Indenture or amounts deposited in the
New Notes Account pursuant to Section 5.02 of the New Indenture, which in each
case, by their terms, become due and payable upon the occurrence of an El Paso
Debt Obligation Repayment Event.
"EL PASO DEBT SECURITIES" means senior unsecured debt obligations of El
Paso the principal of which shall amortize at such times and in such amounts
that, together with the interest payments thereon, shall provide payments on
each Distribution Date in an amount equal to the Class A Member's Priority
Return (other than any amount described under clause (b)(ii) or (b)(iv) of the
definition thereof) to be Distributed by Chaparral on such Distribution Date
pursuant to Section 5.1(a) of the Chaparral LLC Agreement; provided that (i) any
such payment of principal and interest will have a five Business Day grace
period and (ii) each El Paso Debt Security shall provide that the principal and
accrued interest thereon becomes due and payable upon the occurrence of an El
Paso Debt Obligation Repayment Event.
"EL PASO DEBT SECURITY DIRECTION LETTER" means the letter agreement
among the Overfund Trust, El Paso, the Indenture Trustee and Limestone dated as
of the Closing Date, directing El Paso to make payments in respect of the El
Paso Debt Securities directly to the Indenture Trustee until the Indenture has
been satisfied and discharged, and thereafter to Limestone.
"EL PASO ENERGY WEST COAST INTEREST" means the sole membership interest
in El Paso Energy West Coast, L.L.C., a Delaware limited liability company.
"EL PASO GUARANTEE" is defined in Section 1.01 of the New Indenture.
"EL PASO INTEREST" has the meaning assigned to such term in the
Limestone Trust Agreement.
"EL PASO LOANS" means loans, including the El Paso Loan evidenced by
the Amended El Paso/Chaparral Note, made from time to time by Chaparral,
Mesquite or any of Mesquite's Subsidiaries to, and at all times the obligor
under which is, El Paso; provided that (i) the obligations of El Paso with
respect thereto rank at all times at least pari passu in priority of payment
with all other senior unsecured Relevant Indebtedness of El Paso, (ii) such loan
is payable five Business Days after demand thereon but only to the extent of the
amount demanded, (iii) such loan (other than the El Paso Loan evidenced by the
Amended El Paso/Chaparral Note which shall bear interest at the fixed rate
provided therein) bears interest at a floating rate not less than the El Paso
Applicable Rate, (iv) such loan is denominated in Dollars, (v) such loan is
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evidenced by an El Paso Note and (vi) each El Paso Loan shall provide that the
principal and accrued interest thereon becomes due and payable upon the
occurrence of an El Paso Debt Obligation Repayment Event.
"EL PASO MATERIAL ADVERSE EFFECT" means a material adverse effect on
the financial condition or operations of El Paso and its consolidated
Subsidiaries on a consolidated basis.
"EL PASO NOTE" means any promissory note evidencing an El Paso Loan,
the form of which is attached as Exhibit B to the Chaparral LLC Agreement.
"EL PASO PARTY" means any of, and "EL PASO PARTIES" means all of, El
Paso Chaparral Holding, El Paso Chaparral Holding II, El Paso Chaparral,
Chaparral, Mesquite and Management Company.
"EL PASO PREFERRED STOCK" means the Mandatorily Convertible Single
Reset Preferred Stock, Series A, par value $5,000 per share, issued by El Paso
and having an initial liquidation preference, in the aggregate, of
$1,000,000,000.
"EL PASO PREFERRED STOCK CERTIFICATE OF DESIGNATION" means the
Certificate of Designation adopted by the Board of Directors of El Paso
establishing the terms of the El Paso Preferred Stock.
"ENERGY ASSETS" include all power generation (including power
generation tolling contracts), transmission and distribution assets and all
natural gas, liquefied natural gas, crude, or natural gas liquids storage,
transportation, liquefaction and extraction facilities (but excluding any
nuclear, solar or wind power assets).
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand letter,
claim, notice of noncompliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to health, safety or
the environment, 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 third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any Federal, state, local or foreign statute,
law, ordinance, rule, regulation, code, order, writ, judgment, injunction,
decree or judicial or agency interpretation, policy or guidance relating to
pollution or protection of the environment, health, safety or natural resources,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"EQUITY INTERESTS" means, with respect to any Person (a) shares of
capital stock of (or other ownership or profit interests, including partnership,
member or trust interests, in) such
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Annex A
Person, (b) warrants, options or other rights for the purchase or other
acquisition from such Person of shares of capital stock of (or such other equity
ownership or equity profit interests in) such Person, or (c) securities
convertible into or exchangeable for shares of capital stock of (or such other
equity ownership or equity profit interests in) such Person, or warrants, rights
or options for the purchase or other acquisition from such Person of such shares
(or such other equity interests), in each case, whether voting or nonvoting, and
whether or not such shares, warrants, options, rights or other interests are
authorized or otherwise existing on any date of determination.
"ERISA" means the United States Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued from time to time thereunder.
"ERISA AFFILIATE" means any Person who is a member of El Paso's
controlled group within the meaning of Section 4001(a)(14)(A) of ERISA.
"ERISA TERMINATION EVENT" means (a) a "reportable event," as such term
is described in Section 4043 of ERISA (other than a "reportable event" not
subject to the provision for 30-day notice to the PBGC under subsection .21,
..22, .23, .25, .27, .28, .31, .33, .35 or .64 of PBGC Reg. Section 4043), or an
event described in Section 4062(e) of ERISA, or (b) the withdrawal of El Paso or
any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it
was a "substantial employer," as such term is defined in Section 4001(a)(2) of
ERISA or the incurrence of liability by El Paso or any ERISA Affiliate under
Section 4064 of ERISA upon the termination of a Multiple Employer Plan, or (c)
the filing of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under Section 4041 of ERISA, or (d) the institution
of proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA, or
(e) the conditions set forth in Section 302(f)(1)(A) and (B) of ERISA to the
creation of a lien upon property or rights to property of El Paso or any ERISA
Affiliate for failure to make a required payment to a Plan are satisfied, or (f)
the adoption of an amendment to a Plan requiring the provision of security to
such Plan, pursuant to Section 307 of ERISA, or (g) the occurrence of any other
event or the existence of any other condition which would reasonably be expected
to result in the termination of, or the appointment of a trustee to administer,
any Plan under Section 4042 of ERISA.
"EURODOLLAR PERIOD" means, with respect to any El Paso Loan, (a) the
period beginning on the date such loan is made and ending on the day that
numerically corresponds to such date three months thereafter and (b) thereafter,
each subsequent period commencing on the last day of the immediately preceding
Eurodollar Period and ending on the day that numerically corresponds to such
date three months thereafter; provided, that (i) if such month has no
numerically corresponding day, such Eurodollar Period shall end on the last
Business Day of such month and (ii) if the last day of any such period is not a
Business Day, such Eurodollar Period shall end on the next following Business
Day (unless such next following Business Day is the first Business Day of a
calendar month, in which case such Eurodollar Period shall end on the Business
Day next preceding such numerically corresponding day).
"EURODOLLAR RATE" means, for any Eurodollar Period, an interest rate
per annum equal to the rate per annum reported, on the date two Business Days
prior to the first day of such
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Annex A
Eurodollar Period, on the Dow Xxxxx Markets Service (formerly known as Telerate)
display page 3750 (or if such page shall cease to be publicly available, as
reported on Reuters Screen page "LIBO" or by any other publicly available source
of similar market data) for London interbank offered rates for United States
dollar deposits for a three month period.
"EVENTS OF DEFAULT" is defined in Section 9.01 of the Indenture.
"EXCHANGE ACT" means the United States Securities Exchange Act of 1934,
as amended.
"EXCHANGE OFFER" is defined in Section 1.01 of the Indenture and
Section 1.01 of the New Indenture.
"EXCLUDED ITEMS" means with respect to the determination of Indemnified
Expenses of any Expense Indemnified Person or Economic Losses of any Loss
Indemnified Person, any Indemnified Expenses of such Indemnified Person or
Economic Losses of such Loss Indemnified Person to the extent arising out of,
resulting from or attributable to (i) the bad faith, gross negligence or willful
misconduct of such Indemnified Person, (ii) any breach of, any failure to
perform or observe, or any other non-compliance with, any covenant, condition or
agreement to be performed by, or other obligation of, such Indemnified Person
under any of the Transaction Documents, or the falsity of any representation,
warranty or certification of such Indemnified Person in any of the Transaction
Documents or in any document or certificate delivered in connection therewith,
and (iii) any claims settled, or judgments, orders or awards entered or granted,
in any such case or circumstance with the consent or approval of such
Indemnified Person and without the prior written consent of El Paso (unless such
consent by El Paso has been unreasonably withheld).
"EXISTING ASSETS" means (a) the assets listed under "Existing Assets"
on Schedule 3.2(b) to the Chaparral LLC Agreement, (b) any Equity Interests in
any Business Entity that directly or indirectly (through one or more other
Business Entities) owns any of the assets referred to in clause (a) and (c) the
Contingent Debt Instrument.
"EXISTING EL PASO DEMAND NOTE" means the Amended and Restated Demand
Promissory Note of El Paso dated August 19, 1999 in a maximum principal amount
of $200,000,000, payable to Chaparral, as amended and restated as of December
28, 1999 to evidence and provide for a maximum outstanding principal amount of
$72,750,000.
"EXPENSE INDEMNIFIED PERSON" means (i) each Certificateholder, (ii)
each Certificateholder Related Person, (iii) the Indenture Trustee, (iv) the
Arranger and its Affiliates, (v) Limestone, (vi) the Indemnified Trustee
Persons, (vii) the respective directors, officers and employees of the Persons
referred to in clauses (i) through (vi) above, and (viii) the permitted
successors and assigns of each of the Persons referred to in clauses (i) through
(vii) above.
"EXTRAORDINARY EXPENDITURES" means, for any year, the amount of
Chaparral Extraordinary Liabilities that are deductible for United States
federal income tax purposes in the Allocation Period in which such expenditures
were incurred.
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Annex A
"EXTRAORDINARY EXPENDITURE RECOVERIES" means any amount received by
Chaparral or by any Project Company (but solely to the extent included in
Chaparral's distributive share of profits or losses from any such Project
Company), in each case in respect of indemnity claims, insurance proceeds,
reimbursements or other recoveries, including proceeds of settlements,
judgments, arbitrations or similar proceedings, that directly relate to the
previous payment of Extraordinary Expenditures, limited in each case to the
amount of the related Extraordinary Expenditure.
"FAILED REMARKETING" means a failure to sell the Shares required to be
remarketed under the Remarketing Agreement because of a Legal Impossibility.
"FAIR MARKET VALUE" is defined in Section 1 of the Management
Agreement.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rate quotations for such day on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers as
published by the Federal Reserve Board of New York on the following Business
Day, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for such day on such transactions received by
JPMorgan Chase Bank in New York, New York from three Federal funds brokers of
recognized standing selected by it.
"FERC" means the United States Federal Energy Regulatory Commission, or
any Federal agency or authority from time to time succeeding to its function.
"FINAL DETERMINATION" means, in respect of any Indemnified Party or El
Paso, (i) a decision, judgment, decree or other order by any court of competent
jurisdiction, which decision, judgment, decree or other order is binding on such
Indemnified Party or El Paso, has become final after all appeals allowable by
law and required hereunder by either party to the action have been exhausted, or
the time for filing such appeals has expired, (ii) a closing agreement entered
into under Section 7121 of the Code or any other settlement agreement entered
into in connection with an administrative or judicial proceeding that is binding
on such Indemnified Party or El Paso, (iii) the expiration of the time for
instituting a suit against such Indemnified Party or El Paso with respect to the
claimed deficiency or (iv) the expiration of the time for such Indemnified Party
or El Paso to institute a claim for refund, or if such a claim was filed, the
expiration of the time for such Indemnified Party or El Paso to institute a suit
with respect thereto.
"FINAL PAYMENT DATE" means the earliest date upon which either (a) the
Share Trust Amount equals zero or (b) an aggregate amount equal to the Share
Trust Amount shall have been distributed in accordance with the Share Trust
Agreement and the Remarketing Agreement.
"FINANCIAL INVESTMENTS" means:
(a) Cash;
(b) Direct general obligations of, or obligations fully and
unconditionally guaranteed as to the timely payment of principal and
interest by, the United States or any
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agency or instrumentality thereof having maturities of not more than
six months from the date of acquisition, but excluding any of such
securities whose terms do not provide for payment of a fixed dollar
amount upon maturity or call for redemption;
(c) Certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months from the date of
acquisition, and overnight bank deposits and other short-term deposit
instruments, in each case with any domestic commercial bank having
capital and surplus in excess of $500,000,000 and having a rating of at
least "A2" (or the equivalent thereof) by Xxxxx'x and at least "A" (or
the equivalent thereof) by S&P;
(d) Repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (b) or
(c) above entered into with any financial institution meeting the
qualifications specified in clause (c) above;
(e) Commercial paper (having original maturities of not more
than 180 days) of any Person rated "P-2" (or the equivalent thereof) or
better by Xxxxx'x or "A-2" (or the equivalent thereof) or better by
S&P;
(f) Money market mutual or similar funds having assets in
excess of $100,000,000, at least 95% of the assets of which are
comprised of assets specified in clauses (a) through (e) above; and
(g) unless an El Paso Debt Obligation Repayment Event shall
have occurred, El Paso Debt Obligations; provided, that in the event
that an El Paso Debt Obligation Repayment Event occurs, any El Paso
Debt Obligation shall by its terms become due and payable immediately.
So long as the Indenture or New Indenture, as applicable, has not been
discharged, if an El Paso Debt Obligation Repayment Event occurs and El
Paso is required to repay the El Paso Debt Obligations, the Indenture
Trustee or the New Indenture Trustee (with respect to amounts deposited
into and credited to the New Notes Account only) shall invest such
funds, or cause such funds to be invested, in Financial Investments, in
each case, other than El Paso Debt Obligations and commercial paper of
El Paso.
"FIRST AMENDED AND RESTATED LLC AGREEMENT" is defined in the
Preliminary Statements to the Chaparral LLC Agreement.
"FISCAL QUARTER" means (i) the period commencing on the Closing Date
and ending on March 31, 2000, and (ii) any subsequent three-month period
commencing on each of January 1, April 1, July 1 and October 1 and ending on the
next of March 31, June 30, September 30 and December 31, respectively; provided
that the last Fiscal Quarter shall end on the first date on which all Chaparral
Property is distributed pursuant to Section 12.2 of the Chaparral LLC Agreement
and the Chaparral Certificate of Formation has been canceled pursuant to the LLC
Act.
"FISCAL YEAR" means (i) the period commencing on the Closing Date and
ending on December 31, 2000, and (ii) any subsequent period commencing on
January 1 and ending on the
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earlier to occur of (a) the following December 31, or (b) the first date on
which all Chaparral Property is distributed pursuant to Section 12.2 of the
Chaparral LLC Agreement and the Chaparral Certificate of Formation has been
canceled pursuant to the LLC Act.
"FOURTH AMENDED AND RESTATED LLC AGREEMENT" is defined in the
Preliminary Statements to the Chaparral LLC Agreement.
"FPA" means the United States Federal Power Act.
"GAAP" means consistently applied United States generally accepted
accounting principles as in effect from time to time.
"GOVERNMENTAL APPROVAL" means, with respect to any Person, any consent,
license, approval, registration, permit, sanction or other authorization of any
nature which is required to be granted by any Governmental Authority under
Applicable Law (a) for the formation of such Person, (b) for the enforceability
of any Transaction Document against such Person and such Person's making of any
payments contemplated thereunder, and (c) for all such other matters as may be
necessary in connection with the performance of such Person's material
obligations under any Transaction Document.
"GOVERNMENTAL AUTHORITY" means any federal, national, state,
provincial, municipal, local, territorial or other governmental department,
commission, board, bureau, agency, regulatory authority, instrumentality or
judicial or administrative body, whether domestic or foreign, having
jurisdiction over the matter or matters in question, provided that, with respect
to any Subsidiary of Chaparral, such Governmental Authorities shall be limited
to the jurisdictions in which such Subsidiary is organized or operates.
"GROSS ASSET VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(i) The initial Gross Asset Value of any asset contributed by
a Member to Chaparral shall be determined in accordance with the
definition of "Initial Gross Asset Value";
(ii) The Gross Asset Values of all Chaparral assets shall be
adjusted to equal their respective Xxxx-to-Market Values (A) as
specified in Section 11.1, Section 11.2 and Section 12.2 of the
Chaparral LLC Agreement and (B) upon the liquidation of Chaparral
within the meaning of Regulation Section 1.704-1(b)(2)(ii)(g);
(iii) The Gross Asset Value of any Chaparral Property or
Mesquite Property distributed to any Member shall be adjusted to equal
the Xxxx-to-Market Value of such asset on the date of such
distribution; and
(iv) The Gross Asset Values of the assets of Chaparral shall
be increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or Code Section
743(b), but only to the extent that such adjustments are taken into
account in determining Capital Accounts pursuant to Regulation Section
1.704-1(b)(2)(iv)(m)
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and clause (v) of the definition of "NET INCOME" and "NET LOSSES" or
Section 4.4(g) of the Chaparral LLC Agreement; provided, however, that
Gross Asset Values shall not be adjusted pursuant to this clause (iv)
to the extent that an adjustment pursuant to clause (ii) is required in
connection with a transaction that would otherwise result in an
adjustment pursuant to this clause (iv).
"GROSS INCOME" means all items of gross income and gain (before
reduction for cost of goods sold or similar items of cost) that are realized by
Chaparral, including the component items of such income and gain that constitute
Chaparral's distributive share of income, gain, loss and deduction from any
Project Company or any Qualified Energy Assets, even if such component items are
not required to be separately stated.
"GUARANTOR" is defined in Section 1.01 of the New Indenture.
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum products and
by-products or breakdown products thereof, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and (b)
any other chemicals, materials or substances designated, classified or regulated
as hazardous or toxic or as a pollutant or contaminant under any Environmental
Law.
"HEDGE AGREEMENTS" means agreements relating to hedging activities in
accordance with standard utility practices.
"HOLDERS" and "NOTEHOLDERS" are defined in Section 1.01 of the
Indenture.
"IMMATERIALITY EXCEPTION" means any threshold, exclusion, exception or
qualification to, or limitation on, any representation and warranty, or any
covenant, respectively, made by any Person in a particular Transaction Document,
which threshold, exclusion, exception, qualification or limitation exists by
reason of the use therein of the term "Aggregate Chaparral Material Adverse
Effect".
"INDEMNIFIED EVENTS" is defined in Section 6.1(e) of the Participation
Agreement.
"INDEMNIFIED EXPENSES" means (i) any and all amounts paid to third
Persons in respect of judgments, damages or penalties with respect to, or
amounts paid to third Persons in settlement of, claims (including but not
limited to negligence, strict or absolute liability, liability in tort and
liabilities arising out of violation of regulatory requirements or other
Applicable Laws of any kind), actions or suits and (ii) any and all
out-of-pocket costs, Taxes, expenses, disbursements (including reasonable fees
and disbursements of counsel and claims, damages, liabilities and expenses
relating to environmental matters and to compliance with filing or other
regulatory requirements applicable to any Person solely by reason of their
participation in the transactions contemplated by the Transaction Documents) and
other obligations payable to third Persons, provided, however, that all
Indemnified Expenses shall expressly exclude (x) Taxes, other than Documentary
Taxes, (y) Economic Losses and (z) Excluded Items.
"INDEMNIFIED PARTY" is defined in Section 1 of the Tax Indemnification
Agreement.
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"INDEMNIFIED PERSON" means any Expense Indemnified Person and any Loss
Indemnified Person.
"INDEMNIFIED TRUSTEE PERSONS" means the Persons included in the
definition of "Indenture Trustee Persons" in Section 9.07 of the Limestone Trust
Agreement, Section 7.07 of the Overfund Trust Agreement and Section 7.07 of the
Share Trust Agreement.
"INDENTURE" means the Second Supplemental Indenture dated as of the
Effective Date among Limestone, the Co-Issuer and the Indenture Trustee.
"INDENTURE ACCOUNTS" means the Indenture Distribution Account and the
Indenture Collection Account.
"INDENTURE COLLECTION ACCOUNT" is defined in Section 5.01(a) of the
Indenture.
"INDENTURE DISTRIBUTION ACCOUNT" is defined in Section 5.01(a) of the
Indenture.
"INDENTURE TRUSTEE" means The Bank of New York, as successor to the
United States Trust Company of New York, in its capacity as Trustee under the
Indenture or any successor thereto under the Indenture.
"INDIRECT TAX MATTERS REPRESENTING PURCHASER" is defined in the
definition of "Tax Matters Representing Purchaser" in Article II of the
Limestone Trust Agreement.
"INITIAL GROSS ASSET VALUE" means the initial Gross Asset Value of any
Chaparral Property or Mesquite Property (in each case, other than Cash) on the
Closing Date or on the date such Chaparral Property or Mesquite Property is
contributed or otherwise acquired, determined as follows:
(i) The Initial Gross Asset Value of any El Paso Loan shall be
equal to the principal amount of the relevant El Paso Note;
(ii) The Initial Gross Asset Value of any Financial Investment
shall be equal to its face value, less unamortized discount and plus
unamortized premium, if any;
(iii) The Initial Gross Asset Value of the Contingent Debt
Instrument or any New Contingent Debt Instrument shall be equal to the
lower of (x) the face amount of such Contingent Debt Instrument or New
Contingent Debt Instrument and (y) the Asset PV of such Contingent Debt
Instrument or New Contingent Debt Instrument;
(iv) The Initial Gross Asset Value of any Chaparral Property
or Mesquite Property other than El Paso Loans, Financial Investments
and Contingent Debt Instruments shall be equal to (A) in the case of
any Mesquite Property held by Mesquite on the Closing Date, the value
set forth on Schedule 3.2(b) of the Chaparral LLC Agreement, and (B) in
the case of any Chaparral Property or Mesquite Property contributed by
the Class B Members after the Closing Date, the lower of (1) El Paso's
book value of such Chaparral Property or Mesquite Property on El Paso's
books and records in accordance with GAAP and (2) the Asset PV of such
Chaparral Property or
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Mesquite Property, determined in each case as of the date such
Chaparral Property or Mesquite Property was acquired by Chaparral or
Mesquite; and
(v) The Initial Gross Asset Value of Chaparral Property
contributed by the Class A Member with the consent of the members
pursuant to Section 3.3(b) of the Chaparral LLC Agreement shall be (x)
in the case of any Financial Investment, the face value of such
Financial Investment less unamortized discount and plus unamortized
premium, if any, and (y) otherwise, the value as agreed by the Members
at the time of such consent.
"INITIAL NOTES" means the 8.625% senior secured notes due 2003 issued
by Limestone and the Co-Issuer pursuant to the Original Indenture in an original
aggregate principal amount of $1,000,000,000.
"INITIAL PURCHASER" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation.
"INITIAL SHARES" has the meaning set forth in the recitals to the
Remarketing Agreement.
"INTEREST" means any membership interest in Chaparral, including any
and all benefits to which the holder of such an interest may be entitled as
provided in the Chaparral LLC Agreement, together with all obligations of such
Person to comply with the terms and provisions of the Chaparral LLC Agreement.
"INTERNAL RATE OF RETURN" or "IRR" means, as of the date of
determination, the internal rate of return with respect to the Limestone Equity
PIK Component calculated to be that discount rate compounded semi-annually
which, when applied to each cash distribution relating to the Limestone
Certificates from December 28, 1999, and up to and including the date such
calculation is made, reduced in each case by any distribution attributable to
the Limestone Equity Cash Component, and taking into account the date of each
such distribution, produces a present value of such amounts equal to
$50,000,000. For purposes of this definition, payments with respect to the
Limestone Certificates attributable to Sections 5.1(c) or 5.1(e)(ii) of the
Chaparral LLC Agreement will be deemed to be with respect to the Limestone
Equity PIK Component and all other payments with respect to the Limestone
Certificates will be deemed to be with respect to the Limestone Equity PIK
Component only to the extent such amounts exceed the Limestone Equity Cash
Component at the time of determination.
"INVESTMENT" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise.
"INVESTMENT AGREEMENT" means the agreement(s) and other documentation
evidencing Mesquite's interest in the applicable New Asset.
"INVESTMENT CERTIFICATE" is defined in Section 4.05(e) of the Limestone
Trust Agreement.
"INVESTMENT CLOSING DATE" means the date of consummation of the
acquisition (by purchase, exchange or contribution) of the applicable New Asset.
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"INVESTMENT COMPANY ACT" means the United States Investment Company Act
of 1940, as amended.
"INVOLUNTARY BANKRUPTCY" is defined in the definition of "Bankruptcy".
"INVOLUNTARY TRANSFER" is defined in Section 10(a) of the Contingent
Debt Instrument.
"INVOLUNTARY TRANSFER NON-CASH CONSIDERATION" is defined in Section
10(a) of the Contingent Debt Instrument.
"IRREVOCABLE ELECTION" means, with respect to the Purchase Option or
Retirement Option, the delivery by the Primary Class B Member to the Class A
Member of a written notice pursuant to which the Primary Class B Member
unconditionally covenants and agrees that the Purchase Option or Retirement
Option shall be consummated on or prior to the Purchase Date or Retirement Date
specified in the related Purchase Option Notice or Retirement Notice.
"ISSUANCE ITEMS" is defined in Section 4.4(h) of the Chaparral LLC
Agreement.
"ISSUER" means Limestone.
"ISSUER MATERIAL ADVERSE EFFECT" means a material adverse change in the
financial condition of the Issuers or any event or occurrence of whatever nature
that could reasonably be expected to materially and adversely affect the ability
of the Issuers to perform their obligations under the Transaction Documents.
"ISSUERS" means Limestone and the Co-Issuer.
"JUNE 11 AGREEMENT" means the El Paso Credit Facility Agreement dated
as of June 11, 2001 (without giving effect to any amendment, restatement,
termination, or replacement of such El Paso Credit Facility Agreement after such
date).
"LEGAL IMPOSSIBILITY" is defined in Section 1 of the Remarketing
Agreement.
"LEGAL PROCEEDINGS" is defined in Section 6.1(e) of the Participation
Agreement.
"LIABILITIES" is defined in Section 1 of the Management Agreement.
"LIEN" means any mortgage, pledge, hypothecation, assignment for
security, encumbrance, lien (statutory or other), security interest or other
security device or arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any lease having
substantially the same effect as any of the foregoing).
"LIMESTONE" means Limestone Electron Trust, a special purpose statutory
business trust created under the law of the State of Delaware.
"LIMESTONE CERTIFICATES" means the Limestone Certificates issued under
the Limestone Trust Agreement, including the Original Certificates and the
Subsequent Certificates, but expressly excluding the El Paso Interest.
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"LIMESTONE CERTIFICATE TRIGGER EVENT" means (i) the occurrence of a
Limestone Note Trigger Event (and the expiration of the applicable Asset Remedy
Standstill Period or Share Trust Remedy Standstill Period, as applicable), (ii)
after the repayment in full of the Outstanding Limestone Notes, the occurrence
of a New Indenture Event of Default and the acceleration of the New Limestone
Notes as a result thereof (and the expiration of the applicable Asset Remedy
Standstill Period) or (iii) following the repayment of the Limestone Notes and
the New Limestone Notes in full and the commencement of the Earn-Out Period, the
failure of Chaparral to make the distributions or payments to Limestone in
respect of its Class A Member Interest under Sections 3.4(f), 5.1, 6.10, 11.1,
11.2 and 12.2 of the Chaparral LLC Agreement.
"LIMESTONE CERTIFICATE YIELD" means, for any period, the product of (a)
a rate of (x) on any date prior to March 15, 2003, 10.35% and (y) on any date
occurring on or after March 15, 2003, 10.85% (plus an additional 0.50% for every
additional successive semi-annual period commencing on or after September 15,
2003 until March 15, 2006), in each case, per annum and (b) the Limestone Equity
Cash Component and (c) the quotient of (i) the number of days actually elapsed
(calculated on the basis of a 360-day year consisting of twelve 30-day months)
since the later of the Closing Date or the last payment of Limestone Certificate
Yield and (ii) 360.
"LIMESTONE COLLECTION ACCOUNT" is defined in Section 6.02(b) of the
Limestone Trust Agreement.
"LIMESTONE CONTINGENT SHARE TRUST REMEDY CONDITION" is defined in
Section 1 of the Remarketing Agreement.
"LIMESTONE CREDIT AGREEMENT" means the $72,750,000 Credit Agreement
dated as of August 19, 1999, among Limestone (as assignee of Limestone
Investors), the Limestone Lenders, and Xxxxxxxxx, Lufkin & Xxxxxxxx, Inc. as
administrative agent and as security agent, as amended by the Assignment and
Assumption Agreement.
"LIMESTONE DISTRIBUTION ACCOUNT" is defined in Section 6.02(a) of the
Limestone Trust Agreement.
"LIMESTONE EQUITY CASH COMPONENT" means $100,000,000 or such lesser
amount as may be indicated in writing by Limestone to the Managing Member from
time to time pursuant to Section 6.07(b) of the Limestone Trust Agreement.
"LIMESTONE EQUITY CASH COMPONENT MAKE-WHOLE PREMIUM" means (i) if
calculated on any date on or prior to March 14, 2003, the excess, if any, of (x)
the present value as of such date of a stream of semi-annual payments consisting
of 10.35% annual interest on the Limestone Equity Cash Component in effect on
such date payable on each Distribution Date from such date through the Maturity
Date, and a payment of the Limestone Equity Cash Component in effect on the date
of determination on the Maturity Date, discounted on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the applicable
Treasury Yield plus 100 basis points, over (y) the Limestone Equity Cash
Component in effect on such date and (ii) if calculated on or after the Maturity
Date, zero.
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"LIMESTONE EQUITY PIK COMPONENT" means on the Closing Date
$51,148,850.05 and on any date thereafter, such amount increased by the portion
of the cumulative Class A Member's Priority Return described in clause (b)(iv)
of the definition thereof which has accrued through such date and decreased by
the sum of (a) the aggregate distributions made pursuant to Section 5.1(c) or
Section 5.1(e)(ii) of the Chaparral LLC Agreement and pursuant to Section 5.1(c)
or Section 5.1(e)(ii) of the Fourth Amended and Restated LLC Agreement, and (b)
such amounts as may be indicated in writing by Limestone to the Managing Member
from time to time pursuant to Section 6.07(b) of the Limestone Trust Agreement.
"LIMESTONE EQUITY PIK COMPONENT XXXX-TO-MARKET YIELD AMOUNT" means
(a) if the Earn-Out Period Commencement Date has not occurred, that
amount when added to other cash to be paid or distributed on such date with
respect to the Limestone Certificates that is with respect to the Limestone
Equity PIK Component would produce the same IRR with respect to the Limestone
Equity PIK Component as would have been achieved if Limestone had received its
Capital Account balance with respect to its Class A Member Interest on the
Xxxx-To-Market Measurement Date (after giving effect to the allocations called
for on such Xxxx-to-Market Measurement Date) and the Limestone Notes and New
Limestone Notes were retired on such Xxxx-to-Market Measurement Date for an
amount equal to their outstanding principal balance and accrued interest
thereon, and
(b) if the Earn-Out Period Commencement Date has occurred (i) on or
prior to the Maturity Date, the greater of (x) the Unpaid Premium Amount,
calculated as of such determination date, and (y) the amount that would be
determined under clause (ii) as of such date and (ii) after the Maturity Date,
that amount which when added to other cash to be distributed on such date with
respect to the Limestone Certificates that is attributable to the Limestone
Equity PIK Component would produce an IRR of 21% for the period from December
28, 1999 to the Earn-Out Period Commencement Date and 25% for the period from
the Earn-Out Period Commencement Date to the Earn-Out Period Termination Date.
"LIMESTONE EQUITY PIK COMPONENT MAKE-WHOLE PREMIUM" means on any date,
the excess, if any, with respect to any amount distributed or paid prior to the
Maturity Date that, upon distribution with respect to the Limestone
Certificates, would reduce the Limestone Equity PIK Component (a "REDUCTION
AMOUNT") of (x) the sum of the present values to the date of determination of
(I) the Distributions that would have been made to the Class A Member pursuant
to Section 5.1(c) or Section 5.1(e)(ii) of the Chaparral LLC Agreement during
the period from such date of determination through March 15, 2005 assuming net
taxable income is allocated to the Class A Member sufficient to produce an IRR
of 17.5% with respect to such Reduction Amount during each taxable period during
such period, and (II) a hypothetical future payment with respect to such
Reduction Amount on March 15, 2005, which payment would produce an IRR with
respect to such Reduction Amount of 17.5%, each such payment discounted to the
date of determination on a semi-annual basis at the applicable Treasury Yield
plus 450 basis points over (y) such Reduction Amount of such date.
"LIMESTONE INVESTORS" is defined in the Preliminary Statements to the
Chaparral LLC Agreement.
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"LIMESTONE INVESTORS PURCHASE AGREEMENT" is defined in the Preliminary
Statements to the Chaparral LLC Agreement.
"LIMESTONE LENDERS" means the "Lenders" under, and as defined in, the
Limestone Credit Agreement.
"LIMESTONE LOAN" means the loan of $72,750,000 made by the Limestone
Lenders to Limestone pursuant to the Limestone Credit Agreement.
"LIMESTONE NOTE COMPONENT" means, on any date, the aggregate
outstanding principal amount of the Limestone Notes and the New Limestone Notes.
"LIMESTONE NOTE PAYMENT DATE" means (a) with respect to the Limestone
Notes, a Limestone Note Payment Date under (and as defined in) the Indenture and
(b) with respect to the New Limestone Notes, a Limestone Note Payment Date under
(and as defined in) the New Indenture.
"LIMESTONE NOTES" means the 8.625% senior secured notes due 2003 issued
by Limestone and the Co-Issuer pursuant to the Original Indenture in an original
aggregate principal amount of $1,000,000,000.
"LIMESTONE NOTES MAKE-WHOLE PREMIUM" means an amount equal to the
excess, if any, of (a) the aggregate amounts payable by the Issuers pursuant to
Section 14.01(e)(ii) of the Indenture as of any Optional Redemption Date (as
defined in the Indenture), over (b) the aggregate outstanding principal amount
of Limestone Notes to be redeemed as of such Optional Redemption Date.
"LIMESTONE NOTE TRIGGER EVENT" means the occurrence of (a) the
Acceleration Trigger or (b) the Maturity Trigger.
"LIMESTONE SECURITIES" means the Limestone Notes, the New Limestone
Notes (where applicable) and the Limestone Certificates.
"LIMESTONE TRUST AGREEMENT" means the Third Amended and Restated Trust
Agreement dated as of the Signing Date, among El Paso, Electron, Wilmington
Trust Company, a Delaware banking corporation, and Limestone.
"LIMESTONE TRUSTEE" means Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as trustee under the
Limestone Trust Agreement.
"LIMITED LIABILITY EQUITY INTERESTS" means Equity Interests that do not
provide for recourse against the holder thereof for the liabilities of the
issuer thereof.
"LIQUIDATING EVENTS" is defined in Section 12.1 of the Chaparral LLC
Agreement.
"LIQUIDATION NOTICE" is defined in Section 12.10(a) of the Chaparral
LLC Agreement.
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"LIQUIDATOR" is defined in Section 12.8 of the Chaparral LLC Agreement.
"LLC ACT" means the Delaware Limited Liability Company Act, as set
forth in Del. Code Xxx. Tit. 6, Sections 18-101, et seq. and any successor
statute, as the same may be amended from time to time.
"LOSS INDEMNIFIED PERSON" means each Person referred to in clauses (i)
and (ii) of the definition of Expense Indemnified Person, and the permitted
successors and assigns of such Person.
"MAJORITY CERTIFICATEHOLDERS" has the meaning assigned to such term in
the Limestone Trust Agreement.
"MAJORITY HOLDERS" or "MAJORITY NOTEHOLDERS" has the meaning assigned
to such term in the Indenture.
"MAJORITY NEW HOLDERS" OR "MAJORITY NEW NOTEHOLDERS" has the meaning
assigned to such term in the New Indenture.
"MANAGEMENT AGREEMENT" means the Amended and Restated Management
Agreement dated as of March 27, 2000 among El Paso Chaparral, Chaparral,
Mesquite, and the Management Company regarding the operations and management of
Chaparral, Mesquite and their respective Subsidiaries.
"MANAGEMENT COMPANY" means El Paso Chaparral Management, L.P., a
Delaware limited partnership.
"MANAGEMENT FEE CALCULATION DATE" means, with respect to each year,
October 1 of such year or such other date on which the Management Company shall
deliver to the Project Companies its calculation of the Annual Performance Fee
and the Coverage Ratio pursuant to Section 4.3 or 4.4 of the Management
Agreement.
"MANAGER" means the Management Company or any successor manager
appointed pursuant to Section 5 of the Management Agreement, in each case
providing administrative and management services pursuant to Section 2 of the
Management Agreement.
"MANAGING MEMBER" means (a) at all times prior to the appointment of
any replacement Managing Member in accordance with Section 6.1(a) of the
Chaparral LLC Agreement, the Primary Class B Member, and (b) on and after the
appointment of any replacement Managing Member in accordance with Section 6.1(a)
of the Chaparral LLC Agreement, the Class A Member.
"MANDATORY REDEMPTION" means (a) with respect to the Notes, a Mandatory
Redemption under, and as defined in, the Indenture, and (b) with respect to the
New Limestone Notes, a Mandatory Redemption under, and as defined in, the New
Indenture.
"MARGIN STOCK" means "margin stock" as defined in Regulation U of the
Board of Governors of the Federal Reserve System, as in effect from time to
time.
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"XXXX-TO-MARKET BALANCE SHEET" is defined in Section 8.2(d) of the
Chaparral LLC Agreement.
"XXXX-TO-MARKET MEASUREMENT DATE" means (a) with respect to the
retirement of the Class A Member Interest in accordance with Section 11.1 of the
Chaparral LLC Agreement, the last day of the Fiscal Quarter preceding the Fiscal
Quarter during which the earliest of (i) the Retirement Notice was delivered,
(ii) if the Retirement Notice is delivered after a Limestone Note Trigger Event,
the date such Limestone Note Trigger Event occurred or (iii) if the Retirement
Notice is delivered after a Specified Equity Event, the date such Specified
Equity Event occurred; (b) with respect to the liquidation of Chaparral pursuant
to Section 12.2 of the Chaparral LLC Agreement, the last day of the Fiscal
Quarter immediately preceding the Fiscal Quarter during which the earliest of
(i) the Liquidating Event giving rise to such liquidation occurred, (ii) if
applicable, the date the Limestone Note Trigger Event giving rise to such
Liquidating Event occurred or (iii) if applicable, the date the Specified Equity
Event giving rise to such Liquidating Event occurred; or (c) with respect to the
exercise of the Purchase Option, the last day of the Fiscal Quarter immediately
preceding the Fiscal Quarter during which the earliest of (i) the date on which
the Purchase Option Notice was delivered, (ii) if the Purchase Option Notice was
delivered after a Limestone Note Trigger Event, the date such Limestone Note
Trigger Event occurred or (iii) if the Purchase Option Notice is delivered after
a Specified Equity Event, the date such Specified Equity Event occurred.
"XXXX-TO-MARKET VALUE" means, with respect to any asset, the following:
(i) The Xxxx-to-Market Value of any El Paso Loan shall be the
outstanding principal balance of such El Paso Loan plus accrued but
unpaid interest.
(ii) The Xxxx-to-Market Value of any Financial Investment
shall be its face value less unamortized discounts and plus unamortized
premium, if any.
(iii) The Xxxx-to-Market Value of Chaparral shall be (A) prior
to a Xxxx-to-Market Measurement Date, the sum of the Initial Gross
Asset Values of the assets contributed by the Members to Chaparral, and
(B) on or after a Xxxx-to-Market Measurement Date, the sum of the Asset
PVs of each asset owned by Chaparral net of all applicable liabilities
not taken into account in the calculation of Asset PVs.
(iv) The Xxxx-to-Market Value of Mesquite shall be (A) prior
to a Xxxx-to-Market Measurement Date, the sum of the Initial Gross
Asset Values of the assets contributed to Mesquite by Chaparral or
otherwise acquired by Mesquite, and (B) on or after a Xxxx-to-Market
Measurement Date, the sum of the Asset PVs of each asset owned by
Mesquite net of all applicable liabilities not taken into account in
the calculation of Asset PVs.
"MASSPOWER" means MASSPOWER, a Massachusetts general partnership.
"MATURITY DATE" means March 15, 2003.
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"MATURITY TRIGGER" means the failure to deposit with the Indenture
Trustee, at least 120 days prior to the Maturity Date, an amount that, in the
aggregate with all funds and any investments then held in the Indenture Accounts
and available to the Indenture Trustee for repayment of the Limestone Notes, is
sufficient to repay all accrued and unpaid interest on and all outstanding
principal of the Limestone Notes on the Maturity Date and any other determinable
amounts that are, or are scheduled to become, due and payable under the
Indenture on or prior to the Maturity Date.
"MEMBERS" means the Class A Member and the Class B Members,
collectively. "MEMBER" means any one of the Members.
"MEMBER NONRECOURSE DEBT MINIMUM GAIN" means an amount, with respect to
each partner nonrecourse debt within the meaning of Regulations Section
1.704-2(b)(4), equal to partnership minimum gain within the meaning of
Regulations Sections 1.704-2(b)(2) and 1.704-2(d) that would result if such
partner nonrecourse debt were treated as a nonrecourse liability with the
meaning of Regulations Section 1.704-2(b)(3), determined in accordance with
Regulation Section 1.704-2(i)(3).
"MESQUITE" means Mesquite Investors, L.L.C., a Delaware limited
liability company of which Chaparral is the sole member.
"MESQUITE CREDIT AGREEMENT" means the Credit Agreement dated as of
August 12, 1999, among Mesquite, the lenders party thereto, and El Paso, as
administrative agent, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"MESQUITE FINANCING DOCUMENTS" means, collectively, (a) the Mesquite
Specified Credit Documents and (b) each other agreement governing Mesquite
Permitted Financial Obligations and each agreement or instrument delivered in
connection with the granting of security for any Mesquite Permitted Financial
Obligation, in each case as amended, supplemented, amended and restated or
otherwise modified from time to time.
"MESQUITE LLC AGREEMENT" means the Third Amended and Restated Limited
Liability Company Agreement of Mesquite dated as of the Closing Date, as amended
from time to time.
"MESQUITE LLC INTEREST" means the sole membership interest in Mesquite.
"MESQUITE MINORITY OWNED QEC" means any Qualified Energy Company (i) in
which Mesquite owns any Equity Interest and (ii) that is not a Subsidiary of
Mesquite.
"MESQUITE OPERATING SUBSIDIARY" means the direct or indirect
subsidiaries of Mesquite which are organized to acquire (by purchase, exchange
or contribution) Existing Assets, New Assets or other Qualified Energy Assets
acquired from time to time.
"MESQUITE PERMITTED ASSETS" means:
(a) Qualified Energy Assets that are Limited Liability Equity
Interests (including the Existing Assets and the Specified New Assets);
provided, that such assets will only be "Mesquite Permitted Assets" if
such assets are, or represent direct or indirect interests in, assets
located in the United States and Canada;
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(b) Financial Investments;
(c) El Paso Loans;
(d) the Contingent Debt Instrument; and
(e) any other assets that are contributed to or otherwise
acquired by Mesquite with the consent of all of the Members of
Chaparral; provided, that any assets acquired pursuant to this clause
(e) that are Qualified Energy Assets shall be, or shall represent
direct or indirect interests in, assets located in the United States or
Canada.
"MESQUITE PERMITTED FINANCIAL OBLIGATIONS" means Permitted Financial
Obligations of Mesquite and its Subsidiaries that are non-recourse to Chaparral
(except as to Chaparral's interest in the Mesquite LLC Interest) and are secured
(if at all) only by the Mesquite LLC Interest and/or the assets of Mesquite and
its Subsidiaries.
"MESQUITE PLEDGE AGREEMENT" means the Pledge and Security Agreement
dated as of August 12, 1999, as amended from time to time, by Chaparral in favor
of El Paso.
"MESQUITE PROPERTY" means all real and personal property owned by
Mesquite and any improvements thereto, including both tangible and intangible
property.
"MESQUITE SPECIFIED CREDIT DOCUMENTS" means, collectively, the Mesquite
Credit Agreement, the Notes (as defined in the Mesquite Credit Agreement), and
the Mesquite Pledge Agreement.
"MODIFIED ITEMS" is defined in Section 4.4(h) of the Chaparral LLC
Agreement.
"MOODY'S" means Xxxxx'x Investors Service, Inc. or any successor by
merger, consolidation or otherwise to its business.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which El Paso or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions and in
respect of which El Paso or an ERISA Affiliate has any liability (contingent or
otherwise), such plan being maintained pursuant to one or more collective
bargaining agreements.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of El Paso or
an ERISA Affiliate and at least one Person other than El Paso and its ERISA
Affiliates or (b) was so maintained and in respect of which El Paso or an ERISA
Affiliate could have liability under Sections 4064 or 4069 of ERISA in the event
such plan has been or were to be terminated.
"NET INCOME" and "NET LOSSES" means, for each Allocation Period, an
amount equal to Chaparral's taxable income or loss for such Allocation Period,
determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss, or deduction required to be stated
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separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:
(i) Any income of Chaparral that is exempt from federal income
tax and not otherwise taken into account in computing Net Income or Net
Losses pursuant to this definition of "NET INCOME" and "NET LOSSES"
shall be added to such taxable income or loss;
(ii) Any expenditures of Chaparral described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures
pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise
taken into account in computing Net Income or Net Losses pursuant to
this definition of "NET INCOME" and "NET LOSSES" shall be subtracted
from such taxable income or loss;
(iii) In the event the Gross Asset Value of any asset of
Chaparral is adjusted pursuant to clause (ii) or (iii) of the
definition of Gross Asset Value, the amount of such adjustment shall be
taken into account as taxable income or loss from the disposition of
such asset for purposes of computing Net Income or Net Losses;
(iv) Gain or loss resulting from any disposition of Chaparral
Property with respect to which gain or loss is recognized for federal
income tax purposes shall be computed by reference to the Gross Asset
Value of Chaparral Property disposed of, notwithstanding that the
adjusted tax basis of such Chaparral Property differs from its Gross
Asset Value;
(v) To the extent an adjustment to the adjusted tax basis of
any asset of Chaparral pursuant to Code Section 734(b) is required,
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken
into account in determining Capital Accounts as a result of a
distribution other than in liquidation of a Member's Interest, the
amount of such adjustment shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) from the disposition of such asset and shall be
taken into account for purposes of computing Net Income or Net Losses;
(vi) Any items that are allocated pursuant to Section 4.2 or
4.4 of the Chaparral LLC Agreement shall not be taken into account in
computing Net Income or Net Losses; and
(vii) In lieu of depreciation, amortization and other cost
recovery deductions taken into account in computing Net Income and Net
Losses, there shall be taken into account Depreciation for such
Allocation Period, computed in accordance with the definition of
Depreciation.
The amounts of the items of income, gain, loss or deduction of
Chaparral available to be allocated pursuant to Sections 4.2 and 4.4 of the
Chaparral LLC Agreement shall be determined by applying rules analogous to those
set forth in clauses (i) through (vi) above.
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"NET WORTH" means with respect to El Paso, as of any date of
determination, the sum of the preferred stock and stockholders' equity of El
Paso as shown on the most recent consolidated balance sheet of El Paso made
available in accordance with Section 5.1(e) of the Participation Agreement.
"NEW ADMINISTRATIVE EXPENSES" is defined in Section 1.01 of the New
Indenture.
"NEW ASSETS" means (i) the Specified New Assets, (ii) any Equity
Interests in any Business Entity that directly or indirectly (through one or
more other Business Entities) owns any of the Assets referred to in clause (i),
and (iii) any other assets that become Chaparral Permitted Assets owned by
Chaparral or Mesquite Permitted Assets owned by Mesquite.
"NEW CONTINGENT DEBT INSTRUMENTS" means each instrument substantially
in the form of Exhibit C to the Chaparral LLC Agreement.
"NEW HOLDERS" and "NEW NOTEHOLDERS" are defined in Section 1.01 of the
New Indenture.
"NEW INDENTURE" means the indenture dated as of the Effective Date
among the Issuers, El Paso, as guarantor, and The Bank of New York, as New
Indenture Trustee.
"NEW INDENTURE EVENTS OF DEFAULT" means the "Events of Default" under,
and as defined in, the New Indenture.
"NEW INDENTURE TRUSTEE" means The Bank of New York in its capacity as
New Indenture Trustee under the New Indenture or any successor thereto under the
New Indenture.
"NEW INDENTURE TRUSTEE FEE" means the initial and annual fee to be paid
to the New Indenture Trustee pursuant to Section 11.07 and in accordance with a
separate fee agreement between Limestone and the New Indenture Trustee.
"NEW LIMESTONE NOTES" means up to $1,000,000,000 of aggregate principal
amount of 8.625% guaranteed senior unsecured notes due 2003 issued by Limestone
and the Co-Issuer pursuant to the New Indenture in exchange for a like aggregate
principal amount of Limestone Notes.
"NEW LIMESTONE NOTES MAKE-WHOLE PREMIUM" means an amount equal to the
excess, if any, of (a) the aggregate amounts payable by the Issuers (x) pursuant
to Section 14.01(e)(ii) of the New Indenture as of any Optional Redemption Date
(as defined in the New Indenture) or (y) pursuant to Section 9.01 or 15.01 of
the New Indenture in connection with an acceleration of the New Limestone Notes
or a Mandatory Redemption of the New Limestone Notes as a result of a New
Indenture Event of Default of the type described in Section 9.01(a) of the New
Indenture over (b) the aggregate outstanding principal amount of New Limestone
Notes to be redeemed as of such Optional Redemption Date.
"NEW NOTES ACCOUNT" is defined in Section 1.01 in the New Indenture.
"NEW NOTES LIQUIDITY PAYMENTS" is defined in Section 3.08 of the New
Indenture.
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"NEW SERIES" means the shares of preferred stock or other equity
securities of El Paso, in each case which contemplate the mandatory issuance of
shares of El Paso Common Stock, or shares of El Paso Common Stock, the
registration and sale of which are permitted pursuant to Section 7(a) of the
Remarketing Agreement.
"NON-UTILITY GENERATION ASSETS" means Limited Liability Equity
Interests in any Business Entity not less than 90% of the aggregate book value
of the property, plant and equipment of which at the time of the proposed
acquisition thereof are tangible assets that are electric power generation
assets (other than nuclear, solar or wind power assets) located in the United
States of America that have commenced commercial operations at the time of the
contemplated acquisition thereof.
"NOTE PURCHASE AGREEMENT" means the Note Purchase Agreement dated March
15, 2000 among El Paso, Limestone, the Co-Issuer and DLJ.
"OBLIGATION" means, with respect to any Person, any obligation of such
Person of any kind, including, without limitation, any liability of such Person
on any claim, whether or not the right of any creditor to payment in respect of
such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured, and
whether or not such claim is discharged, stayed or otherwise affected by any
proceeding.
"OCTOBER 1 FINANCIAL MODEL" is defined in the definition of "Cash
Flows" in the Management Agreement.
"OFFERING CIRCULAR AND CONSENT SOLICITATION STATEMENT" means the Offer
to Exchange and Consent Solicitation Statement dated March 28, 2002 of the
Issuers.
"OFFERING MEMORANDUM" means the Offering Memorandum dated March 15,
2000 relating to the issuance and sale of the Limestone Notes.
"OFFICER'S CERTIFICATE" means a certificate of any Person signed by any
Authorized Officer of such Person.
"OPTIONAL REDEMPTION" means (a) with respect to the Limestone Notes, an
Optional Redemption under (and as defined in) the Indenture, and (b) with
respect to the New Limestone Notes, an Optional Redemption under (and as defined
in) the New Indenture.
"ORDINARY PROJECT ACTIVITIES" means, with respect to any Project
Company, the operating and maintenance activities required to operate such
Project Company in accordance with standard utility practices (other than
Restructurings) including, but not limited to, entering into, amending or
canceling (i) operating and maintenance contracts, (ii) engineering,
construction and procurement contracts, (iii) power purchase or sales contracts,
(iv) gas/alternative fuel purchase and sales contracts, (v) purchase, sales or
disposals of inventories, parts, or other assets and (vi) other Permitted
Financial Obligations of such Project Company.
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"ORGANIZATIONAL DOCUMENTS" means, with respect to any Person, any
certificate of incorporation, charter, by-laws, memorandum of association,
articles of association, partnership agreement, limited liability company
agreement, certificate of formation of a limited liability company, certificate
of limited partnership, certificate of trust, trust agreement or other agreement
or instrument under which such Person is formed or organized, and which
established the legal personality of such Person under Applicable Law, and any
amendment to any of the foregoing.
"ORIGINAL CERTIFICATES" means the $50,000,000 aggregate certificate
face amount of Limestone Certificates issued on December 28, 1999.
"ORIGINAL INDENTURE" is defined in the first recital of the Indenture.
"ORIGINAL LLC AGREEMENT" is defined in the Preliminary Statements to
the Chaparral LLC Agreement.
"ORIGINAL OVERFUND TRUST AGREEMENT" means the Trust Agreement of El
Paso Electron Overfund Trust dated March 15, 2000.
"ORIGINAL PARTICIPATION AGREEMENT" is defined in the Preliminary
Statements of the Participation Agreement.
"ORIGINAL SHARE TRUST AGREEMENT" means the Trust Agreement of El Paso
Electron Share Trust dated March 15, 2000.
"OUTSTANDING" is defined in Section 1.01 of the Indenture (with respect
to the Limestone Notes) and Section 1.01 of the New Indenture (with respect to
the New Limestone Notes).
"OVERFUND AMOUNT" means $278,659,876.73 of the proceeds of the issuance
and sale of the Limestone Notes.
"OVERFUND AMOUNT (LIMESTONE NOTES PORTION)" means the collective
reference to (i) the El Paso Debt Security captioned "El Paso Debt Security
(Limestone Notes)" in the initial principal amount of $225,899,784.09, created
to provide for payments at least equal to the interest payable on the Limestone
Notes, (ii) all payments of principal and interest thereon (whether upon stated
payment dates, prepayment, acceleration or otherwise), (iii) all Financial
Investments acquired with any proceeds of payments under such "El Paso Debt
Security (Limestone Notes)" or otherwise held to provide for payments at least
equal to the interest payable on the Limestone Notes and all proceeds of the
foregoing and (iv) all amounts (and investments thereof) paid to Limestone or
the Indenture Trustee from or in respect of the foregoing.
"OVERFUND DISTRIBUTION ACCOUNT" is defined in Section 4.02(a) of the
Overfund Trust Agreement.
"OVERFUND DISTRIBUTION DATE" means each and every Business Day other
than the Closing Date.
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"OVERFUND TRUST" means El Paso Electron Overfund Trust, a statutory
business trust created under the law of the State of Delaware.
"OVERFUND TRUST AGREEMENT" means the Second Amended and Restated Trust
Agreement of El Paso Overfund Trust dated as of the Signing Date, among the
Overfund Trustee, Chaparral, El Paso, as depositor, and the Overfund Trust.
"OVERFUND TRUSTEE" means Wilmington Trust Company, a Delaware banking
corporation, in its capacity as trustee of the Overfund Trust.
"PARTIAL REMARKETING" is defined in Section 1 of the Remarketing
Agreement.
"PARTICIPATION AGREEMENT" means the Amended and Restated Participation
Agreement dated as of the Signing Date, among El Paso, Limestone, DLJ Inc., El
Paso Chaparral Holding, El Paso Chaparral Holding II, El Paso Chaparral,
Management Company, Chaparral, Mesquite, Electron, Wilmington Trust Company (in
its individual capacity), the Indenture Trustee, the Overfund Trust and the
Share Trust.
"PARTY" is defined in the first paragraph of the Participation
Agreement.
"PAYMENT DATE" means with respect to (i) the liquidation of Chaparral
pursuant to Article XII of the Chaparral LLC Agreement, the date on which all
Chaparral Property is distributed pursuant to Section 12.2 of the Chaparral LLC
Agreement and the Chaparral Certificate of Formation has been canceled pursuant
to the LLC Act, (ii) the election by the Electing Purchasers to purchase the
Class A Member Interest pursuant to Section 11.2 of the Chaparral LLC Agreement,
the Purchase Date, or (iii) the election by the Class B Member to retire all of
the Class A Member Interest pursuant to Section 11.1 of the Chaparral LLC
Agreement, the Retirement Date.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"PERMIT" means any approval, certificate of occupancy, consent, waiver,
exemption, variance, franchise, order, permit, authorization, right or license
of or from any Governmental Authority.
"PERMITTED FINANCIAL OBLIGATIONS" of any Person means, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than any portion of any trade payable obligation that shall not
have remained unpaid for 91 days or more from the later of (i) the original due
date of such portion and (ii) the customary payment date in the industry and
relevant market for such portion), (c) all obligations of such Person evidenced
by bonds, notes, debentures or other similar instruments, (d) all obligations of
such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (whether or
not the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), (e) all
leases that have been or should be, in accordance with GAAP, recorded as
capitalized leases, (f) all obligations, contingent or otherwise, of such Person
under acceptance, letter of credit or similar
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facilities, (g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise acquire for value any partnership or member or other equity
interests of such Person, (h) the amount of all financial obligations of such
Person in respect of Hedge Agreements, (i) the amount of all other financial
obligations of such Person under any other Contractual Obligation of such
Person, (j) all Permitted Financial Obligations of other Persons of the type
described in clauses (a) through (i) above guaranteed directly or indirectly in
any manner by such Person, or in effect guaranteed directly or indirectly by
such Person through an agreement (i) to pay or purchase such Permitted Financial
Obligations or to advance or supply funds for the payment or purchase of such
Permitted Financial Obligations, (ii) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Permitted Financial Obligations or
to assure the holder of such Permitted Financial Obligations against loss, (iii)
to supply funds to or in any other manner invest in the debtor (including any
agreement to pay for property or services irrespective of whether such property
is received or such services are rendered) or (iv) otherwise to assure a
creditor against loss, and (k) all Permitted Financial Obligations of the type
described in clauses (a) through (j) above secured by (or for which the holder
of such Permitted Financial Obligations has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for payment of such Permitted Financial Obligations.
"PERMITTED LIENS" with respect to any Person shall mean the following:
(i) Liens for taxes not yet delinquent or Liens for taxes
being contested in good faith and by appropriate proceedings for which
adequate reserves (in the good faith judgment of the management of such
Person) have been established;
(ii) Liens in respect of property or assets imposed by law
which were incurred in the ordinary course of business, such as
carriers', warehousemen's, materialmen's and mechanics' Liens and other
similar Liens arising in the ordinary course of business, which do not
in the aggregate materially detract from the value of such property or
assets or materially impair the use thereof in the operation of the
business of such Person or any Subsidiary of such Person;
(iii) Liens created under or contemplated by any Transaction
Document;
(iv) Mechanic's Liens, carrier's Liens, and other Liens to
secure the performance of tenders, statutory obligations, contract
bids, government contracts, performance and return-of-money bonds and
other similar obligations, incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed
money), whether pursuant to statutory requirements, common law or
consensual arrangements; and
(v) Liens (including covenants, restrictions, rights,
easements and minor irregularities in title) that do not materially
interfere with the business or operations of such Person as presently
conducted.
"PERMITTED TRANSFER" is defined in Section 10.1(c) of the Chaparral LLC
Agreement.
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"PERMITTED TRANSFEREE" is defined in Section 10.1(c) of the Chaparral
LLC Agreement.
"PERSON" means any individual, trust, estate, association, Business
Entity or other entity, or a government or any political subdivision or agency
thereof.
"PHASE II PARTICIPATION AGREEMENT" is defined in Section 4.2(b) of the
Participation Agreement.
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
"POWER ASSETS" means (a) the Existing Assets, (b) the Specified New
Assets and (c) the Contingent Debt Instrument.
"PRELIMINARY OFFERING MEMORANDUM" means the Preliminary Offering
Memorandum dated March 10, 2000 relating to the issuance and sale of the
Limestone Notes.
"PRESENT VALUE" is defined in Section 1 of the Management Agreement.
"PRICING" means, with respect to any security, the determination of the
price at which the underwriter(s) (in a firm commitment underwriting
arrangement) or the purchaser(s) are willing to purchase, and the holder of such
security (or issuer thereof, if such security is being newly issued) is willing
to sell, such security.
"PRIMARY CLASS B MEMBER" means El Paso Chaparral.
"PRINCIPAL MARKET" means the principal exchange on which the security
in question is traded or the principal market on which such security is quoted,
as determined by the board of directors of El Paso from time to time.
"PROCEEDING" means any suit in equity, action at law or other judicial
or administrative proceeding.
"PROJECT COMPANIES" means Mesquite, any direct or indirect subsidiary
of Mesquite, each other Qualified Energy Company and each of their respective
direct or indirect subsidiaries.
"PROJECT COMPANY FINANCIAL MODEL" is defined in Section 4.1(n)(ii) of
the Participation Agreement.
"PROJECT DOCUMENTS" means (i) the respective Organizational Documents
of, or other applicable operating documents of, the Project Companies, (ii) any
material agreements with respect to the ownership, management, operation or
assets of the Project Companies, (iii) the power purchase agreements, steam sale
agreements, gas supply agreements and similar agreements held by the Project
Companies, (iv) any financing arrangements or other Contractual Obligations of
the Project Companies and (v) all documents and agreements executed in
connection with or relating to the foregoing.
"PROJECT INTEREST CONTRIBUTIONS" is defined in Section 10(a) of each
Contingent Debt Instrument.
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"PROJECT MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
on the financial condition, properties, or operations of the Project Companies
taken as a whole and on a consolidated basis, (ii) a material adverse effect on
the ability of any of the Project Companies to perform its respective material
obligations under Project Document to which it is a party, (iii) the invalidity
or unenforceability, in whole or in material part, of any Project Document to
which any of the Project Companies is a party or (iv) a material adverse effect
on the rights and remedies of any Project Company under any such Project
Document.
"PTP RELEVANT PERSON" is defined in Article II of the Limestone Trust
Agreement.
"PUHCA" means the Public Utility Holding Company Act of 1935, as
amended.
"PURCHASE DATE" is defined in Section 11.2(c)(iii) of the Chaparral LLC
Agreement.
"PURCHASE OPTION" is defined in Section 11.2(a) of the Chaparral LLC
Agreement.
"PURCHASE OPTION NOTICE" is defined in Section 11.2(a) of the Chaparral
LLC Agreement.
"PURCHASE PRICE" is defined in Section 11.2(e) of the Chaparral LLC
Agreement.
"QUALIFIED ENERGY ASSETS" means (i) real and personal property, whether
tangible or intangible, constituting Energy Assets, (ii) direct or indirect
(through one or more other Business Entities or otherwise) Equity Interests in
Qualified Energy Companies, (iii) Permitted Financial Obligations of, and other
Contractual Obligations and other Obligations of, Qualified Energy Companies,
(iv) rights under or in respect of Contractual Obligations and other
Obligations, or other rights, in each case relating to or derived from Energy
Assets, (v) to the extent not otherwise including in the foregoing, the Power
Assets, (vi) New Contingent Debt Instruments and (vii) any other assets that are
owned by, or contributed to or otherwise acquired by, Chaparral, Mesquite or any
Qualified Energy Company with the consent of all of the Members of Chaparral.
"QUALIFIED ENERGY COMPANY" means any Business Entity not less than 90%
of the aggregate book value of the assets of which are comprised of (a)(i) real
and personal property, whether tangible or intangible, constituting Energy
Assets, (ii) rights under or in respect of Contractual Obligations and other
Obligations, or other rights, in each case relating to or derived from Energy
Assets, (iii) to the extent not otherwise included in the foregoing, the
Existing Assets (other than the Contingent Debt Instrument) and the Specified
New Assets, (iv) New Contingent Debt Instruments and (v) any other assets that
are approved as such by the unanimous consent of the Members of Chaparral; (b)
Permitted Financial Obligations of, and Hedge Agreements with, and other
Contractual Obligations of, Business Entities not less than 90% of the aggregate
book value of the assets of which is comprised of (I) assets referred to in
clause (a) above or (II) direct or indirect (through one or more other Business
Entities or otherwise) Equity Interests in other Business Entities not less than
90% of the aggregate book value of the assets of which is comprised of assets
referred to in clause (I) above; (c) direct or indirect (through one or more
other Business Entities or otherwise) Equity Interests in other Business
Entities not less than 90% of the aggregate book value of the assets of which is
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comprised of assets referred to in clause (a) or (b) above; (d) El Paso Loans;
and/or (e) Financial Investments.
"QUALIFIED EQUITY PROCEEDS" means, for purposes of the El Paso
Preferred Stock Certificate of Designation, amounts in Dollars.
"QUALIFIED HOLDER" means any Person (i) with respect to which,
immediately after giving effect to the applicable Disposition of the Class A
Member Interest to such Person, (A) no more than 25% of the Equity Interests in
such Person shall be held by Benefit Plan Investors and (B) there shall be no
more than 99 PTP Relevant Persons and (ii) that is a Tax Matters Representing
Purchaser.
"QUALIFIED PURCHASER" is defined in Section 2(a)(51)(A) of the
Investment Company Act.
"RATE RESET DATE" means the earlier of (i) the date of the consummation
of the remarketing of the Initial Shares (which is expected to be on or about
the third Trading Day following the Successful Repricing Date) or (ii) the date
a Failed Remarketing is declared.
"RATING AGENCIES" means Xxxxx'x and S&P.
"RECOURSE FOR THE NOTES" has the meaning assigned to such term in
Section 2.05(f) of the New Indenture.
"REDEMPTION EVENT" is defined in Section 2 of the El Paso Preferred
Stock Certificate of Designation.
"REDEMPTION PROCEEDS" means any Collections in respect of the payment
of the redemption price for the El Paso Preferred Stock upon a Redemption Event
in accordance with the El Paso Preferred Stock Certificate of Designation.
"REFERENCE ENTITIES" is defined in Section 4.3(c) of the Participation
Agreement.
"REGULATIONS" means the Income Tax Regulations, including Temporary
Regulations, promulgated under the Code, as such regulations are amended,
modified or supplemented from time to time.
"RELATED PERSONS" means, with respect to any Person, each Affiliate of
such Person and all officers, directors, employees, advisors and representatives
of such Person or any of its Affiliates.
"RELEVANT EL PASO PARTY" means any of, and "RELEVANT EL PASO PARTIES"
means all of, El Paso Chaparral Holding, El Paso Chaparral Holding II, El Paso
Chaparral and Management Company.
"RELEVANT INDEBTEDNESS" of any Person means, without duplication, (a)
indebtedness of such Person for borrowed money, (b) obligations of such Person
(other than any portion of any trade payable obligation of such Person that
shall not have remained unpaid for 91 days or more from the original due date of
such portion) to pay the deferred purchase price of property or
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services, and (c) obligations of such Person as lessee under leases that shall
have been or should be, in accordance with GAAP, recorded as capital leases,
except that where such indebtedness or obligation of such Person is made
jointly, or jointly and severally, with any third party or parties other than
any consolidated Subsidiary of such Person, the amount thereof for the purposes
of this definition only shall be the pro rata portion thereof payable by such
Person, so long as such third party or parties have not defaulted on its or
their joint and several portions thereof.
"REMARKETING AGENTS" means the Persons named as remarketing agent under
the Remarking Agreement.
"REMARKETING AGREEMENT" means the Amended and Restated El Paso
Preferred Stock Remarketing and Registration Rights Agreement dated as of the
Signing Date among El Paso, Limestone, the Share Trust, the Indenture Trustee
and the Remarketing Agents.
"REPLACEMENT BUDGET" is defined in Section 6.3(f) of the Chaparral LLC
Agreement.
"REPLACEMENT PERIOD" is defined in Section 4.3(a) of the Participation
Agreement.
"RESPONSIBLE OFFICER" means (a) with respect to El Paso, Chaparral and
Mesquite, any officer of El Paso or an El Paso Affiliate with knowledge of the
financial matters of El Paso and Chaparral, (b) with respect to the Limestone
Trustee, the Overfund Trustee and the Share Trustee, any officer of the
Corporate Trust Administration group, or other officer who customarily performs
similar functions of the Limestone Trustee, the Overfund Trustee or the Share
Trustee, respectively, and who has direct responsibility for the administration
of the related trust and (c) with respect to the Indenture Trustee or the New
Indenture Trustee, any officer assigned to the principal corporate trust office
of the Indenture Trustee or the New Indenture Trustee, including any managing
director, vice president, assistant vice president, assistant treasurer,
assistant secretary or any other officer of the Indenture Trustee or the New
Indenture Trustee customarily performing functions similar to those performed by
any of the above designated officers and having direct responsibility for the
administration of the Indenture or the New Indenture, as applicable, and also,
with respect to a particular matter, any other officer, to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"RESTRICTED PERSON" means any Certificateholder, Electron, CSFB and any
Affiliate of the foregoing (other than any such Affiliate that is an Affiliate
solely by reason of its investment in funds managed by affiliates of CSFB).
"RESTRUCTURING" means, with respect to any Project Company, any
termination or material modification of the material Project Documents for such
Project Company, or any monetization of any Project Document for such Project
Company.
"RESTRUCTURING GAINS" means any item of income or gain realized by
Chaparral in connection with a Restructuring.
"RESTRUCTURING LOSSES" means any item of deduction or loss incurred by
Chaparral in connection with a Restructuring.
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"RETIREMENT AMOUNT" is defined in Section 11.1(d) of the Chaparral LLC
Agreement.
"RETIREMENT DATE" is defined in Section 11.1(b)(ii) of the Chaparral
LLC Agreement.
"RETIREMENT NOTICE" is defined in Section 11.1(a) of the Chaparral LLC
Agreement.
"RETIREMENT OPTION" is defined in Section 11.1(a) of the Chaparral LLC
Agreement.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor by merger, consolidation or
otherwise to its business.
"SEC" means the Securities and Exchange Commission.
"SECOND AMENDED AND RESTATED LLC AGREEMENT" is defined in the
Preliminary Statements to the Chaparral LLC Agreement.
"SECRETARY OF STATE" means the office of the Secretary of State of the
State of Delaware.
"SECURITIES ACT" means the Securities Act of 1933 or any successor law,
and regulations and rules issued pursuant to the Securities Act or any successor
law.
"SECURITIES INTERMEDIARY" means (i) as used in the Indenture, United
States Trust Company of New York acting in such capacity and any successor
acting in such capacity and (ii) as used in the Limestone Trust Agreement and
the Overfund Trust Agreement, Wilmington Trust Company acting in such capacity
and any successor acting in such capacity.
"SECURITY AGREEMENT" means the Amended and Restated Security Agreement
dated as of the Signing Date between the Overfund Trust and Limestone.
"SECURITY FOR THE LIMESTONE NOTES" is defined in Section 3.01 of the
Indenture.
"SHARE TRUST" means El Paso Electron Share Trust, a special purpose
statutory business trust created under the law of the State of Delaware pursuant
to the Original Share Trust Agreement for the purpose of holding the Shares.
"SHARE TRUST AGREEMENT" means the Second Amended and Restated Trust
Agreement of El Paso Share Electron Trust dated as of the Signing Date among the
Share Trustee, El Paso and the Share Trust.
"SHARE TRUST AMOUNT" means, as of any date of determination, an amount
equal to (a) the aggregate amount then necessary to discharge the Indenture
under Section 10.01 of the Indenture minus (b) any funds or the proceeds of the
sale of any investments then held in the Indenture Accounts and available to the
Indenture Trustee for the payment of the Limestone Notes (but in an amount not
in excess of the amount described in clause (a)) plus (c) the aggregate proceeds
from the Asset Remedy or from any asset sales made pursuant to Section 2.05(f)
of the New Indenture or from Asset Dispositions made by the Managing Member
after the Special Management Replacement Date that, in any such case, have been
used to repay the Limestone Notes or, to the extent included in the amount
referenced in clause (b) above, are then
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available to the Indenture Trustee for the payment of the Limestone Notes, but
in an amount not to exceed the Certificate Purchase Amount as of such date (net
of any funds or the proceeds of the sale of any investments then held for the
benefit of the Limestone Certificateholders in the Limestone Distribution
Account, Limestone Collection Account or, to the extent such amounts are
available for distribution by the Indenture Trustee to Limestone for the benefit
of the Limestone Certificateholders under the Indenture, the Indenture
Accounts).
"SHARE TRUST CONTRIBUTION ACCOUNT" is defined in Section 4.05(a) of the
Share Trust Agreement.
"SHARE TRUST REMEDY STANDSTILL PERIOD" is defined in Section
9.04(b)(ii) of the Indenture.
"SHARE TRUSTEE" means Wilmington Trust Company, a Delaware banking
corporation, in its capacity as trustee under the Share Trust Agreement.
"SHARES" means the Initial Shares and the Additional Shares, or the
portion thereof that is then required to be issued or available for remarketing,
as the context requires.
"SIGNING DATE" means April 12, 2002.
"SINGLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of El Paso or
an ERISA Affiliate and no Person other than El Paso and its ERISA Affiliates or
(b) was so maintained and in respect of which El Paso or an ERISA Affiliate
could have liability under Section 4069 of ERISA in the event such plan has been
or were to be terminated.
"SOLVENT" means, when used with respect to any Person, that at the time
of determination: (a) the fair market value of such Person's assets is in excess
of the total amount of its liabilities (including, without limitation,
contingent liabilities), (b) the present fair saleable value of such Person's
assets is greater than its probable liability in its existing debts, as such
debts become absolute and mature, (c) such Person is then able to and believes
that it will be able to pay its indebtedness (including, without limitation,
contingent indebtedness and other commitments), as such indebtedness comes due,
and (d) such Person's remaining assets will not constitute unreasonably small
capital in relation to the businesses to be conducted by such Person.
"SPECIAL MANAGEMENT REPLACEMENT DATE" means the date upon which the
Class A Member or its designee becomes the Managing Member of Chaparral pursuant
to Section 6.1(a) of the Chaparral LLC Agreement as a result of the occurrence
of a Specified Equity Event.
"SPECIAL MANAGEMENT STANDSTILL EXPIRATION DATE" means (a) in the case
of a Specified Equity Event that arises as a result of (i) an "Event of Default"
under Section 7.1(a), 7.1(d) or 7.1(e) of the June 11 Agreement or (ii) an Event
of Default under Section 9.01(m) of the Indenture, the 30th day after the
occurrence of such Specified Equity Event and (b) in the case of any other
Specified Equity Event, the later of (x) the 30th day after the occurrence of
such Specified Equity Event and (y) if a Certificate Purchase Option Notice is
delivered within 30
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days after the occurrence of such Specified Equity Event, the 60th day after the
occurrence of such Specified Equity Event.
"SPECIAL REDEMPTION" means (a) with respect to the Limestone Notes, a
Special Redemption under, and as defined in, the Indenture, and (b) with respect
to the New Limestone Notes, a Special Redemption under, and as defined in, the
New Indenture.
"SPECIAL REDEMPTION DATE" means (a) with respect to the Limestone
Notes, a Special Redemption Date under, and as defined in, the Indenture, and
(b) with respect to the New Limestone Notes, a Special Redemption Date under,
and as defined in, the New Indenture.
"SPECIFIED NEW ASSETS" means the assets listed under "Specified New
Assets" on Schedule 3.2(b) to the Chaparral LLC Agreement.
"SPECIFIED EQUITY CURE" means, in the case of any Specified Equity
Event other than a Specified Equity Event arising from (A) an event described in
Section 7.1(a), (d) or (e) of the June 11 Agreement or (B) an event described in
Section 9.01(l) (as it applies to El Paso or El Paso Chaparral only) or 9.01(m)
of the Indenture, the Underlying Default is remedied (or, in the case of a
payment default, paid) by El Paso on or prior to the Special Management
Standstill Expiration Date.
"SPECIFIED EQUITY EVENT" means any of (a) the occurrence of an "Event
of Default" under (and as defined in) the June 11 Agreement giving effect to any
permitted cure period but without giving effect to any waiver of such "Event of
Default" (or any waiver of the covenants or representations underlying such
"Event of Default") by the lenders thereunder; provided that when notice is
required to commence the maturing of a "Default" into an "Event of Default"
under the June 11 Agreement, notice given by the Required Certificateholders to
El Paso shall also constitute notice under the June 11 Agreement for this
purpose; (b) after repayment in full of all Outstanding Limestone Notes but
prior to the date on which the New Limestone Notes shall have been paid in full,
any event that would constitute an "Event of Default" (other than an "Event of
Default" relating solely to an event of the type described in clause (a), (b) or
(f) of Section 9.01 of the Indenture or, unless the Share Trust Amount is
greater than zero, relating solely to an event related to the Share Trust) under
(and as defined in) the Indenture (as in effect on the Effective Date and as
supplemented, amended, restated or otherwise modified from time to time prior to
the repayment in full of all Outstanding Limestone Notes but without giving
effect to any supplement, amendment, restatement or other modification made in
contemplation of such repayment) that is not an "Event of Default" under the New
Indenture and/or (c) the acceleration of the New Limestone Notes.
"SUBSEQUENT CERTIFICATES" means the $100,000,000 aggregate certificate
face amount of Limestone Certificates issued on the Closing Date.
"SUBSIDIARY" means, as to any Person, any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
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contingency), (b) the right or power to direct, in the case of any entity of
which such Person or any of its Subsidiaries is a general partner, or both the
beneficial ownership of and the right or power to direct, in any other case,
such limited liability company, partnership or joint venture, or (c) the
beneficial interest in such trust or estate, is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more of
its other Subsidiaries or by one or more of such Person's other Subsidiaries;
provided, however, that notwithstanding anything in this definition to the
contrary, in the case of Chaparral, the term "Subsidiary" shall include the
Project Companies; and, provided, further, that no such corporation,
partnership, joint venture or other entity shall (i) constitute a Subsidiary of
El Paso, unless such entity is a Consolidated Subsidiary of El Paso, or (ii)
constitute a Subsidiary of any other Person unless such entity would appear as a
consolidated subsidiary of such Person on a consolidated balance sheet of such
Person prepared in accordance with GAAP.
"SUCCESSFUL REPRICING DATE" is defined in Section 1 of the Remarketing
Agreement.
"SUCCESSOR MANAGER" is defined in Section 5.2 of the Management
Agreement.
"TAX" or "TAXES" means any and all taxes (including net income, gross
income, franchise, value added, ad valorem, gross receipts, leasing, excise,
fuel, excess profits, sales, use, property (personal or real, tangible or
intangible) and stamp taxes), levies, imposts, duties, charges, assessments, or
withholdings of any nature whatsoever, general or special, ordinary or
extraordinary, now existing or hereafter created or adopted, together with any
and all interest, penalties, fines, additions to tax and interest thereon.
"TAX INDEMNIFICATION AGREEMENT" means the Amended and Restated Tax
Indemnification Agreement dated as of the Closing Date among El Paso, Limestone
and Electron.
"TAX MATTERS MEMBER" is defined in Section 8.3(a) of the Chaparral LLC
Agreement.
"TAX MATTERS REPRESENTING PURCHASER" has the meaning assigned to such
term in Article II of the Limestone Trust Agreement.
"TAX RATE" means the composite rate for an individual subject to the
highest generally applicable U.S. federal, state and local marginal income tax
rates, after taking into account the deductibility of state and local taxes for
U.S. federal income tax purposes.
"TEMPORARY BUDGET" is defined in Section 6.3(f) of the Chaparral LLC
Agreement.
"TERMINATION PERIOD GUARANTEED PAYMENT" means, on any date, an amount
equal to the excess, if any, of (a) the sum of (without duplication): (i) the
excess, if any, of (x) the Class A Member's Cumulative Priority Return,
excluding for any Applicable Termination Period if no Earn-Out Period
Commencement Date has occurred the amount described in clause (b)(iv) of the
definition of Class A Member's Priority Return, over (y) the aggregate amount of
items of Gross Income allocated to the Class A Member pursuant to Section
4.4(d)(i) of the Chaparral LLC Agreement; (ii) the Additional Financing Costs,
if any, due and payable by the Class A Member on or prior to such date; (iii) if
no Limestone Note Trigger Event, Limestone Certificate Trigger
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Event, Specified Equity Event or acceleration of the New Limestone Notes as a
result of a New Indenture Event of Default (other than a Specified Equity Event
arising solely as a result of an acceleration of the New Limestone Notes that
arises as a result of a New Indenture Event of Default of the type described in
Section 9.01(a) of the New Indenture) has occurred, the Limestone Equity Cash
Component Make-Whole Premium (calculated as of such date); and (iv) the
Limestone Equity PIK Component Xxxx-To-Market Yield Amount over (b) without
duplication of any amount, any amounts previously paid to the Class A Member in
respect of the Termination Period Guaranteed Payment.
Amounts payable as Termination Period Guaranteed Payments shall be
treated as guaranteed payments within the meaning of Code Section 707(c), shall
be considered an expense of Chaparral for income tax purposes and an expense or
capital item for financial reporting purposes, as the case may be, and shall not
be considered a distribution of money to the Class A Member that would reduce
its Capital Account.
"TRADING DAY" means a day on which the Principal Market with respect to
a security is regularly scheduled to be open for trading. For purposes of this
definition, a day on which any such exchange is scheduled to close (as opposed
to unexpectedly closing) prior to its regular closing time shall not constitute
a Trading Day.
"TRANSACTION DOCUMENTS" means the Participation Agreement, the
Limestone Trust Agreement, the Chaparral LLC Agreement, the Mesquite LLC
Agreement, the Management Agreement, the Overfund Trust Agreement, the Security
Agreement, the Indenture, the Limestone Notes, the Limestone Certificates, the
Share Trust Agreement, the Remarketing Agreement, the El Paso Preferred Stock
Certificate of Designation, the El Paso Notes, the Tax Indemnification
Agreement, the Note Purchase Agreement, the Administrative Services Agreement,
any other documents required to be executed in order to satisfy, comply or
evidence compliance with Section 2.3 of the Participation Agreement, the Closing
Agreement, the New Limestone Notes and the El Paso Guarantee endorsed thereon,
the New Indenture and the Dealer Manager Agreement.
"TRANSFERRED INTEREST" is defined in Section 10.1(c) of the Chaparral
LLC Agreement.
"TREASURY YIELD" means is defined in Section 1.01 of the Indenture.
"UNCERTIFIED BUDGET" is defined in Section 6.3(f) of the Chaparral LLC
Agreement.
"UNDERLYING DEFAULT" means with respect to any Specified Equity Event,
the "Event of Default" referenced in the definition of Specified Equity Event
that gave rise to such Specified Equity Event.
"UNDERLYING ENTITY" means the entity owning the interest in any New
Asset, which interest will be subject to a New Contingent Debt Instrument, and
its subsidiaries and affiliates.
"UNDERWRITERS" has the meaning assigned to such term in Section 4.02 of
the Indenture.
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"UNITED STATES" or "U.S." means the United States of America and the
territories, possessions and territorial waters of the United States of America.
"UNPAID PREMIUM AMOUNT" means after the Earn-Out Period Commencement
Date the excess of (a) the sum of (x) all Limestone Equity PIK Component
Make-Whole Premiums as determined from time to time and (y) an accretion factor
of 17.5% per annum, compounded semi-annually with respect to the outstanding
Unpaid Premium Amount from time to time, over (b) the aggregate of any
distributions previously made with respect to the Limestone Certificates that
are treated as with respect to the Limestone Equity PIK Component pursuant to
the last sentence of the definition of Internal Rate of Return and that are not
applied in reduction thereof.
"VOLUNTARY BANKRUPTCY" is defined in the definition of "Bankruptcy".
"WHOLLY OWNED AFFILIATE" of any Person means (i) an Affiliate of such
Person 100% of the capital stock (or its equivalent in the case of entities
other than corporations) of which is owned beneficially by such Person,
directly, or indirectly through one or more Wholly Owned Affiliates, or by any
Person who, directly or indirectly, owns beneficially 100% of the capital stock
(or its equivalent in the case of entities other than corporations) of such
Person, and (ii) an Affiliate of such Person who, directly or indirectly, owns
beneficially 100% of the capital stock (or its equivalent in the case of
entities other than corporations) of such Person; provided that, for purposes of
determining the ownership of the capital stock of any Person, de minimis amounts
of stock held by directors, nominees and similar persons pursuant to statutory
or regulatory requirements shall not be taken into account.
"WITHDRAWAL LIABILITY" shall have the meaning given such term under
Part 1 of Subtitle E of Title IV of ERISA.
SECTION 1.02 RULES OF CONSTRUCTION. This Annex A and, except as
otherwise expressly provided in any Transaction Document with respect to
specific rules of construction for such Transaction Document, all Transaction
Documents and all appendices, schedules and exhibits to the Transaction
Documents shall be governed by, and construed in accordance with, the following
rules of construction:
(a) Computation of Time Periods. In the computation of periods of time
from a specified date to a later specified date, the word or phrase "FROM" and
"COMMENCING ON" mean "from and including" and the words or phrase "TO" and
"UNTIL" and "ENDING ON" mean "to but excluding".
(b) Accounting Terms. All accounting terms shall be construed in
accordance with GAAP applied consistently, except with respect to Capital
Accounts and items entering into the computation of Capital Accounts, and except
to the extent otherwise specified in the provisions of Section 1.01 or 1.02
hereof.
(c) No Presumption Against Any Party. Neither any Transaction Document
nor any uncertainty or ambiguity therein shall be construed against any
particular party, whether under any rule of construction or otherwise. On the
contrary, each Transaction Document has been reviewed by each of the parties
thereto and their respective counsel and shall be construed and
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interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of all parties thereto.
(d) Use of Certain Terms. Unless the context of any Transaction
Document requires otherwise, the plural includes the singular, the singular
includes the plural, and "INCLUDING" has the inclusive meaning of "including
without limitation." The words "HEREOF," "HEREIN," "HEREBY," "HEREUNDER," and
other similar terms of any Transaction Document refer to such Transaction
Document (including this Annex A to the extent incorporated or referred to
therein (whether or not actually attached thereto) and all other annexes,
schedules and exhibits attached thereto) as a whole and not exclusively to any
particular provision of such Transaction Document. All pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine, or
neuter, singular or plural, as the identity of the Person or Persons may
require.
(e) Headings and References. Article, Section and other headings are
for reference only, and are not intended to describe, interpret, define or limit
the scope, extent or intent of any Transaction Document or any provision
thereof. References in any Transaction Document to Articles, Sections, Annexes,
Schedules and Exhibits refer to Articles, Sections, Annexes, Schedules, and
Exhibits of or to such Transaction Document, and references in Sections of such
Transaction Document to any clause refer to such clause of such Section. Whether
or not specified in any Transaction Document or in this Annex A, references in
such Transaction Document or in this Annex A to such Transaction Document, any
other Transaction Document or any other agreement include, unless otherwise
provided in such Transaction Document or in this Annex A, this Annex A, such
Transaction Document, the other Transaction Documents and such other agreements,
as the case may be, as the same may be amended, restated, supplemented or
otherwise modified from time to time pursuant to the provisions thereof and of
any other Transaction Documents applicable thereto. Whether or not specified in
any Transaction Document or in this Annex A, a reference to any Applicable Law
or law (as the case may be) as at any time shall mean that Applicable Law or law
(as the case may be) as it may have been amended, restated, supplemented or
otherwise modified from time to time, and any successor Applicable Law or law
(as the case may be). A reference to a Person includes the successors and
assigns of such Person, but such reference shall not increase, decrease or
otherwise modify in any way the provisions in this Annex A or any Transaction
Document governing the assignment of rights and obligations under, or the
binding effect, of any provision of this Annex A or any Transaction Document.
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