Exhibit 4.17
PROJECT PARTY
CONSENT TO ASSIGNMENT
THIS CONSENT TO ASSIGNMENT (this "Consent to Assignment") is entered
into as of June 1, 1999 by Pennsy Supply, Inc. (the "Consenting Party"), and IBJ
Whitehall Bank & Trust Company, as Collateral Agent (hereinafter, in such
capacity, together with any successors thereto in such capacity, referred to as
the "Assignee"), for the benefit of and on behalf of the Senior Parties defined
below.
A. AES Ironwood, L.L.C. (the "Company"), a Delaware limited liability
company, is providing for the development, construction, ownership and operation
of a nominal 705 MW (net) gas-fired combined cycle electric generating facility
and related equipment and facilities (the "Project") to be located in South
Lebanon Township, Lebanon County, Pennsylvania.
B. The Company intends to finance the development and construction of
the Project, in part, through the issuance, from time to time, of certain
securities (the "Securities") pursuant to a Trust Indenture, dated as of June 1,
1999 between the Company and IBJ Whitehall Bank & Trust Company, as trustee (the
"Trustee"), as it may be amended or supplemented from time to time (the
"Indenture").
C. In connection with the commencement of commercial operation of the
Project, the Company is required to deliver the Debt Service Reserve Letter of
Credit (the "DSR Letter of Credit"). Dresdner Bank AG, New York Branch, as
issuing bank, has agreed to issue the DSR Letter of Credit subject to the terms
and conditions contained in the DSR LOC Reimbursement Agreement, dated as of
June 1, 1999 (as amended, supplemented or modified and in effect from time to
time, the "DSR LOC Reimbursement Agreement"), among each of the banks and
financial institutions parties thereto and Dresdner Bank AG, New York Branch, as
issuing bank and as agent for such banks and financial institutions (in such
capacity as agent, and together with its successors and assigns, the "DSR LOC
Provider").
D. In connection with the Company's fulfillment of its obligations
under Section 19.2 of the Power Purchase Agreement, the Company may deliver the
Construction Period Letter of Credit (the "CP LOC"). Dresdner Bank AG, New York
Branch, as issuing bank, has agreed to issue the CP LOC subject to the terms and
conditions contained in the CP LOC Reimbursement Agreement, dated as of June 1,
1999 (as amended, supplemented or modified and in effect from time to time, the
"CP LOC Reimbursement Agreement"), among each of the banks and financial
institutions parties thereto and Dresdner Bank AG, New York Branch, as issuing
bank and as agent for such banks and financial institutions (in such capacity as
agent, and together with its successors and assigns, the "CP LOC Provider").
E. The Company may finance certain working capital requirements of the
Project by entering into a working capital agreement with a financial
institution for the provision of credit to the Company (such financial
institution, the "Working Capital Provider").
F. All obligations of the Company under the Securities, the DSR LOC
Reimbursement Agreement, the CP LOC Reimbursement Agreement, the Collateral
Agency Agreement (defined below), and any working capital agreement
(collectively, the "Financing Documents") to the Trustee, the DSR LOC Provider,
the CP LOC Provider, the Collateral Agent, any Working Capital Provider, each
successor to any such person and each other person providing Senior Debt to the
Company who becomes a party to the Collateral Agency Agreement pursuant to its
terms (collectively, the "Senior Parties") will be secured by a certain
Mortgage, Security Agreement, Indenture, Pledge Agreement and Assignment of
Leases and Income, each between the Company and IBJ Whitehall Bank & Trust
Company (collectively, the "Security Documents").
G. The Collateral Agent, the Company, the DSR LOC Provider and the
Trustee entered into the Collateral Agency and Intercreditor Agreement (as
amended, supplemented or modified and in effect from time to time, the
"Collateral Agency Agreement") to set forth their mutual understanding with
respect to (a) the exercise of certain rights, remedies and options by the
respective parties thereto under the above described documents, (b) the priority
of their respective security interests created by the Security Documents, (c)
the application of project revenues and certain other monies and items and (d)
the appointment of the Collateral Agent as collateral agent.
H. The Company and the Consenting Party have entered into that certain
Agreement Relating to Real Estate dated October 22, 1998 and Easement and Right
of Access Agreement dated April 15, 1999, as amended from time to time,
(collectively the "Assigned Agreement") for the purposes therein set forth.
I. The Company has notified the Consenting Party that all of the
Company's right, title and interest in the Assigned Agreement is to be assigned
to the Collateral Agent as security pursuant to one or more of the Security
Documents.
J. It is a condition precedent to the extension of credit by the Senior
Parties that the Consenting Party execute and deliver this Consent to Assignment
for the benefit of the Senior Parties.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
1. Definitions. Capitalized terms used herein shall have the respective
meanings specified herein or, if not defined herein, as defined in the Assigned
Agreement.
2. Consent to Assignment. The Consenting Party hereby irrevocably
consents to the assignment of the Assigned Agreement by the Company to the
Assignee for the benefit of the Senior Parties as security, and the Consenting
Party shall continue performance under the Assigned Agreement in accordance with
its terms and the terms of this Consent to Assignment. Until all
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obligations under the Financing Documents have been performed and paid in full,
all obligations of the Consenting Party under the Assigned Agreement, subject to
the terms and conditions of the Assigned Agreement with respect to the rights of
the parties thereunder, shall inure to the benefit of the Assignee for the
benefit of the Senior Parties to the same extent as if the Assignee instead of
the Company were an original party to the Assigned Agreement.
3. No Defaults. The Consenting Party acknowledges and agrees that (a)
the Assigned Agreement is in full force and effect and there are no amendments,
modifications or supplements thereto, either oral or written, (b) the Consenting
Party has not assigned, transferred or hypothecated the Assigned Agreement or
any interest therein, (c) the Consenting Party has no knowledge of any default
by the Company in any respect of the performance of any provision of the
Assigned Agreement and no knowledge of any grounds for termination of the
Assigned Agreement by the Consenting Party, (d) none of the Company's rights
under the Assigned Agreement has been waived, (e) the assignment by the Company
of the Assigned Agreement to the Assignee, as security, and the acknowledgment
of and consent to such assignment by the Consenting Party, will not cause or
constitute a default under the Assigned Agreement or an event or condition which
would, with the giving of notice or lapse of time or both, constitute a default
under the Assigned Agreement, and (f) a foreclosure or other exercise of
remedies under any of the Security Documents or any sale thereunder by the
Assignee, any of the Senior Parties or any of their respective designees or
assignees, whether by judicial proceedings or under any power of sale contained
therein, or any conveyance from the Company to the Assignee, any of the Senior
Parties or any of their respective designees or assignees, in lieu thereof, if
made to a Permitted Assignee (only) in accordance with the terms and provisions
of the Assigned Agreement (a "Permitted Assignee") and provided such remedies do
not violate the terms of the Assigned Agreement, shall not require further
consent of the Consenting Party or cause or constitute a default under the
Assigned Agreement or an event or condition which would, with the giving of
notice or lapse of time or both, constitute a default under the Assigned
Agreement.
4. Notice of Company's Defaults and Termination. Anything in the
Assigned Agreement notwithstanding, for so long as any financing liabilities are
outstanding under the Financing Documents and until the same have been satisfied
in full, the Consenting Party shall not claim prevention of or interference with
performance of its obligations under the Assigned Agreement, nor shall the
Consenting Party exercise any right it may have under the Assigned Agreement, at
law or in equity, to cancel, suspend or terminate the Assigned Agreement, or any
of its obligations thereunder, as the result of any default or other action or
omission of the Company without first giving a copy of a notice of default to
the Assignee, such notice to be coupled with an opportunity to cure any such
default within forty-five (45) days from notice to the Assignee (or, with
respect to nonmonetary defaults or defaults the curing of which requires the
Assignee's possession of the Facility through foreclosure, such longer period of
time as may be necessary under the circumstances to cure such default or
complete such foreclosure, provided the Assignee, any of the Senior Parties, or
any of their respective assignees or designees is diligently pursuing such cure
or foreclosure), such cure period to commence upon delivery of such notice to
the Assignee, or, with respect to any defaults which are not susceptible of
being so corrected, to rectify to the Consenting Party's reasonable satisfaction
the effect upon the Consenting Party of such default by the Company within such
period. Such notice shall be in writing and shall be deemed to have been given
(a) when presented personally, (b) one business day after being deposited for
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overnight delivery with a nationally recognized overnight courier, such as
FedEx, (c) when received, if deposited in a regularly maintained receptacle for
the United States Postal Service, postage prepaid, registered or certified,
return receipt requested, addressed to the Assignee at the address indicated
below or such other address as the Assignee may have specified by written notice
delivered in accordance herewith), or (d) when transmitted by telecopy to the
number specified below and the receipt confirmed telephonically by recipient,
provided that such telecopy is then followed by a copy of such notice delivered
by a method specified in clause (a), (b) or (c) above.
IBJ Whitehall Bank & Trust Company, as Collateral Agent
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Capital Markets Trust Services
Facsimile: 000-000-0000
Notwithstanding the foregoing or anything in the Assigned Agreement,
(a) with respect to Emergency Defaults only, the Assignee shall not be entitled
to any additional cure periods beyond the cure periods provided to the Company
under the Assigned Agreement; (b) the Consenting Party acknowledges that the
Consenting Party shall have no right to exercise any remedy for an Emergency
Default other than self-help and monetary damages; (c) the Consenting Party
agrees that it shall not unreasonably interfere with the operations of the
Project in exercising its self-help remedies; and (d) the Assignee may at any
time step in, in a commercially reasonable manner, to cure any Event of Default
whether or not the Consenting Party is exercising its self-help remedies with
respect thereto, and, upon the Assignee's assumption of the remedies being
exercised by the Consenting Party in a commercially reasonable manner, the
Consenting Party shall cease exercising self-help; provided, however, that, with
respect to an Event of Default relating to water pumping obligations, the
Assignee (or its Contractor) must meet the standards applicable to a Permitted
Assignee under Section 4(c) of the Assigned Agreement.
Failure of the Consenting Party to provide such notice to the Assignee
shall not constitute a breach of this Consent to Assignment, and the Assignee
agrees that the Consenting Party shall have no liability to the Assignee for
such failure whatsoever; however, no cancellation, suspension or termination of
the Assigned Agreement by the Consenting Party, or of any of the Consenting
Party's obligations thereunder by the Consenting Party, shall be binding upon
the Assignee or any of the Senior Parties without such notice and the lapse of
the applicable cure period. Any dispute that may arise under the Assigned
Agreement notwithstanding, the Consenting Party shall continue performance under
the Assigned Agreement and resolve any dispute without discontinuing such
performance until the lapse of the notice and applicable cure periods or
extension periods. The Assignee or any of the Senior Parties may, but shall be
under no obligation to, make any payment or perform any act required thereunder
to be made or performed by the Company, with the same effect as if made or
performed by the Company. If the Assignee or any of the Senior Parties fails to
cure or rectify the effect of a default under the Assigned Agreement within
forty-five (45) days from notice to the Assignee (or, with respect to
nonmonetary defaults or defaults the curing of which requires the Assignee's
possession of the Facility through foreclosure, such longer period of time as
may be necessary under the circumstances to cure such default or complete such
foreclosure, provided the Assignee, any of the Senior Parties, or any of their
respective assignees or designees is diligently pursuing such cure or such
foreclosure), whichever is longer, such cure period to
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commence upon such notice to the Assignee, the Consenting Party shall have all
its rights and remedies with respect to such default as set forth in the
Assigned Agreement.
5. Payments to Revenue Account. The Consenting Party hereby agrees
that, so long as any notes, bonds, loans, letters of credit, commitments or
other obligations are outstanding under the Financing Documents and until the
same have been satisfied in full, all payments to be made by the Consenting
Party with respect to the Assigned Agreement shall be in lawful money of the
United States of America, in immediately available funds. The Company hereby
directs the Consenting Party to, and the Consenting Party hereby agrees to, make
all such payments with respect to the Assigned Agreement directly to the
Assignee at ABA No. 000000000, for credit to AES Ironwood, L.L.C., for further
credit to Account No. 630000041.2 (Revenue Account) Attention: Capital Markets
Trust Services, or to such other person and/or at such other address as the
Assignee may from time to time specify in writing to the Consenting Party. Any
such payment shall be deemed to be a payment by the Consenting Party to the
Company under the Assigned Agreement.
6. Protection of the Assignee. In the event that either (a) the
Company's interest in the Project shall be sold, assigned or otherwise
transferred to a Permitted Assignee pursuant to the exercise of any right, power
or remedy by the Assignee or pursuant to judicial proceedings, or (b) the
Company rejects all or a portion of the Assigned Agreement under Xxxxx 00,
Xxxxxx Xxxxxx Code, or other similar Federal or state statute and such rejection
is approved by the appropriate bankruptcy court or is otherwise effective
pursuant to such statute, and in either case (i) no funds payable under the
Assigned Agreement shall be due and payable to the Consenting Party, (ii) the
effect upon the Consenting Party of any default not susceptible of being
corrected shall have been rectified to the Consenting Party's reasonable
satisfaction, (iii) the Assigned Agreement shall have been validly terminated
pursuant to the terms of the Assigned Agreement by reason of a default or a
rejection by the Company or a trustee in bankruptcy under Xxxxx 00, Xxxxxx
Xxxxxx Code, or other similar Federal or state statute, and (iv) the Assignee or
any of the Senior Parties (or a designee or nominee) and shall be obligated to
cure, or shall have arranged for the curing, of any default susceptible of being
corrected by the Assignee or any of the Senior Parties or by a purchaser at any
judicial or non-judicial sale, provided the party actually curing the default is
a Permitted Assignee, the Consenting Party shall, promptly, and in no event
longer than ten (10) days after receipt of written request therefor, execute and
deliver an agreement to the Assignee, any of the Senior Parties or any of their
respective nominees, purchasers, assignees or transferees, as the case may be,
provided such party is a Permitted Assignee, for the remainder of the term of
the Assigned Agreement and with the same terms as are contained therein.
References in this Consent to Assignment to "Assigned Agreement" shall be deemed
also to include such new agreement.
7. Acknowledgement of the Assignee's Obligations and Rights. Neither
the Assignee nor any of the Senior Parties has any obligation hereunder to
extend credit to the Consenting Party or any contractor of the Consenting Party
at any time for any purpose. Neither the Assignee nor any of the Senior Parties
shall have any obligation to the Consenting Party under the Assigned Agreement
unless and until such time as such entity succeeds to the interest of the
Company under the Assigned Agreement pursuant to the Assignee's election to
exercise its rights hereunder. Upon the occurrence and during the continuance of
an event of default under any of the Security Documents, the Assignee or any of
the Senior Parties shall have the right to the extent authorized
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under the Assigned Agreement and the Security Documents, to (a) take possession
of the Project and operate the same, (b) sell or otherwise transfer their
interest in the Project if such purchaser at such sale is a Permitted Assignee,
and such purchaser shall succeed to the Assignee's or the Senior Parties' rights
hereunder, as the case may be, in accordance with the terms of the Assigned
Agreement and this Consent to Assignment and (c) exercise all rights of the
Company under the Assigned Agreement in accordance with the terms thereof.
Subject to the Assignee's compliance with the provisions of the Assigned
Agreement (if applicable) and the terms of this Consent to Assignment, the
Consenting Party shall cooperate with the Assignee and comply in all respects in
the Assignee's exercise of such rights. Without limiting the generality of the
foregoing, upon the occurrence and during the continuance of an event of default
under any of the Financing Documents, the Assignee, any of the Senior Parties or
any of their respective designees or assignees shall, in accordance with the
terms of the Assigned Agreement, have the full right and power to enforce
directly against the Consenting Party all obligations of the Consenting Party
under the Assigned Agreement and otherwise to exercise all remedies thereunder,
and to make all demands and give all notices and make all requests required or
permitted to be made by the Company under the Assigned Agreement. The Assignee,
any of the Senior Parties or any of their respective designees shall have the
right, but not the obligation, to perform any act, duty or obligation required
of the Company thereunder at any time; provided that nothing herein shall
require the Assignee, any of the Senior Parties or any of their respective
designees or assignees to cure any default of the Company under the Assigned
Agreement or to perform any act, duty or obligation of the Company under the
Assigned Agreement.
8. Refinancing. The Consenting Party hereby acknowledges that the
Company may from time to time obtain refinancing for the Project (including
privately or publicly placed bonds or notes), and the Consenting Party agrees
that it will promptly upon request execute in favor of the lenders providing
such refinancing a consent to assignment as requested by such lenders; provided
that the terms and conditions contained in such consent to assignment shall be
no less favorable to the Consenting Party than those terms and conditions
contained in this Consent to Assignment.
9. Representations. The Consenting Party represents and warrants to the
Assignee as follows:
(a) The Consenting Party is a corporation duly organized,
validly subsisting and in good standing under the laws of the Commonwealth of
Pennsylvania and is in good standing in all jurisdictions where necessary in
light of the business it conducts (including, without limitation, performance of
its obligations under the Assigned Agreement) and the properties it owns.
(b) The Consenting Party has the necessary corporate power,
corporate authority and legal right to execute, deliver and perform its
obligations under the Assigned Agreement and this Consent to Assignment, and the
execution and delivery by the Consenting Party of the Assigned Agreement and
this Consent to Assignment and the performance of its obligations thereunder and
hereunder have been duly authorized by all necessary corporate action and do not
and will not (i) require any consent or approval of the Consenting Party's board
of directors or any shareholder of the Consenting Party, (ii) violate any
provision of the corporate charter or by-laws of the Consenting Party or any
provision of any material law, rule or regulation, or any material order, writ,
judgment, injunction, decree, determination or award having applicability to the
Consenting
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Party, (iii) result in a breach of or constitute a default under any indenture
or loan or credit agreement or any other agreement, lease or instrument to which
the Consenting Party is a party or by which it or its properties may be bound or
affected or (iv) result in, or require, the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest, charge or encumbrance
of any nature upon or with respect to any of the properties now owned or
hereafter acquired by the Consenting Party; and the Consenting Party is not in
violation, breach or default of any provision of the corporate charter or
by-laws of the Consenting Party or any provision of any material law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
having applicability to the Consenting Party or any agreement referred to above
in clause (iii) of this subsection (b), which violation could have a material
adverse effect on the ability of the Consenting Party to perform its obligations
under this Consent to Assignment or the Assigned Agreement.
(c) The Assigned Agreement and this Consent to Assignment have
been duly executed and delivered and each constitutes a valid and binding
obligation of the Consenting Party, enforceable in accordance with its terms,
except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization or
other similar laws affecting the enforcement of creditors' rights and general
equitable principles.
(d) No consent or approval of, or other action by, or any
notice or filing with, any court or administrative or governmental body (except
those previously obtained and in full force and effect) is required in
connection with the execution and delivery of the Assigned Agreement or this
Consent to Assignment or the performance by the Consenting Party of its
obligations thereunder or hereunder. The Consenting Party has obtained all
permits, licenses, approvals, consents, authorizations and exemptions, if any,
with respect to the performance of its obligations under the Assigned Agreement
and this Consent to Assignment required by applicable laws, statutes, rules and
regulations in effect as of the date hereof.
(e) The Consenting Party is not in default with respect to the
Assigned Agreement and has no knowledge, as of the date hereof, of any claims or
rights of set-off by the Consenting Party or by any of its affiliates against
the Company.
(f) There are no proceedings pending or, to the best of the
Consenting Party's knowledge after due inquiry, threatened against or affecting
the Consenting Party in any court or before any governmental authority or
arbitration board or tribunal (whether or not purportedly on behalf of the
Consenting Party) which may result in a material or adverse effect upon the
property, business, prospects, profits or condition (financial or otherwise) of
the Consenting Party, or the ability of the Consenting Party to perform its
obligations under, or which purports to affect the legality, validity or
enforceability of, the Assigned Agreement or this Consent to Assignment; and the
Consenting Party is not in default with respect to any order of any court,
governmental authority or arbitration board or tribunal.
10. Binding Upon Successors. All agreements, covenants, conditions and
provisions of this Consent to Assignment shall be binding upon and inure to the
benefit of the successors and assigns of each of the parties hereto.
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11. Captions. The captions or headings at the beginning of each Section
hereof are for the convenience of the parties hereto only and are not a part of
this Consent to Assignment.
12. Governing Law. In accordance with New York General Obligations Law
Section 5-1401, this Consent to Assignment shall be governed by and construed in
accordance with the internal laws of the State of New York, provided, that the
parties agree that any interpretation of the Assigned Agreement shall be in
accordance with the laws of the Commonwealth of Pennsylvania.
13. Amendment. This Consent to Assignment may be modified, amended or
rescinded only by a writing expressly referring to this Consent to Assignment
and signed by both the Consenting Party and the Assignee. The Assignee may
request the direction of the Senior Parties prior to signing any amendments
described herein.
14. Severability. Every provision of this Consent to Assignment is
intended to be severable. If any term or provision hereof is declared by a court
of competent jurisdiction to be illegal, invalid or unenforceable for any reason
whatsoever, such illegality, invalidity or unenforceability shall not affect the
other terms and provisions hereof, which terms and provisions shall remain
binding and enforceable, and to the extent possible all of such other provisions
shall remain in full force and effect.
15. Counterparts. This Consent to Assignment may be executed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
16. Authority to Take Specific Actions. Notwithstanding any provision
of this Consent to Assignment to the contrary, if an action by the Assignee is
authorized by the Assigned Agreement or by this Consent to Assignment, the
Consenting Party shall be obligated to recognize or follow instructions given by
a Senior Party or any of its respective designees or assignees, or any successor
or assign of Assignee or any Senior Party, only if such person has provided to
the Consenting Party reasonable written documentation of its authority by or on
behalf of the Assignee to undertake the action which it is requesting or
directing, and a written certification to the Consenting Party that it is so
authorized to act.
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IN WITNESS WHEREOF, each of the Consenting Party and the Assignee has
duly executed this Consent to Assignment as of the date first above written.
PENNSY SUPPLY, INC.
By: /s/ Xxxxx X. Xxxx, Xx.
--------------------------------
Name: Xxxxx X. Xxxx, Xx.
Title: Sr. VP Sales & Marketing
IBJ WHITEHALL BANK & TRUST COMPANY,
as COLLATERAL AGENT
By: /s/ Xxxxxx XxXxxxxxxx
------------------------------------
Name: Xxxxxx XxXxxxxxxx
Title: Assistant Vice President
REVIEWED AND CONSENTED TO:
AES IRONWOOD, L.L.C.
By: /s/ Xxxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
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