EXHIBIT 10.24
PANDA-BRANDYWINE, L. P.
CONSTRUCTION LOAN AGREEMENT
AND LEASE COMMITMENT
Dated as of March 30, 1995
GENERAL ELECTRIC CAPITAL CORPORATION
(230 MW Natural Gas-Fired Qualifying Cogeneration Facility
located in Brandywine, Maryland)
[TABLE OF CONTENTS AT BOTTOM OF DOCUMENT]
CONSTRUCTION LOAN AGREEMENT AND LEASE COMMITMENT (this
"Agreement"), dated as of March 30, 1995 among PANDA-
BRANDYWINE, L.P., a Delaware limited partnership (the
"Partnership"), PANDA BRANDYWINE CORPORATION, a Delaware
corporation and the sole general partner of the Partnership
(the "General Partner"), and GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation ("GE Capital").
W I T N E S S E T H :
WHEREAS, (a) the Partnership desires that GE
Capital (i) provide construction financing for the Project
hereinafter referred to, (ii) issue the Letters of Credit as
collateral security for certain obligations of the
Partnership under the Power Purchase Agreement hereinafter
referred to, (iii) acting through the Owner Trustee, lease
the Site from the Partnership and sublease the Site back to
the Partnership (iv) upon completion of the Project, acting
through the Owner Trustee, purchase the Facility hereinafter
referred to from the Partnership and lease the Facility back
to the Partnership, and (v) upon completion of the Project,
make Equity Loans to the Partnership or the Partners, and
(b) GE Capital is willing, either directly or through the
Owner Trustee, as the case may be, to provide such
financing, issue the Letters of Credit, lease and sublease
the Site, purchase and lease the Facility and make the
Equity Loans subject to and upon the terms and conditions
set forth herein;
NOW, THEREFORE, it is agreed:
Section 1. DEFINITIONS
1.1 Defined Terms. Capitalized terms used in
this Agreement shall, unless otherwise defined herein, have
the respective meanings assigned thereto in Appendix A.
1.2 Other Definitional Provisions. (a) All
terms defined in this Agreement shall have the defined
meanings when used in the Note or in any certificate or
other document made or delivered pursuant hereto.
(b) As used herein and in any certificate or
other document made or delivered pursuant hereto, accounting
terms not defined in Appendix A, and accounting terms partly
defined in Appendix A, to the extent not defined, shall have
the respective meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder"
and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and section,
schedule and exhibit references are to this Agreement unless
otherwise specified.
(d) Any term defined by reference to an
agreement, instrument or other document shall have the
meaning so assigned to it whether or not such agreement,
instrument or document is in effect.
Section 2. AMOUNTS AND TERMS OF LOANS
2.1 Loans. (a) Subject to the terms and
conditions of this Agreement, GE Capital agrees to make
construction loans (collectively, the "Loans") to the
Partnership from time to time during the Loan Commitment
Period in an aggregate principal amount not to exceed the
Loan Commitment. If the Loan Commitment Period shall expire
on the Lease Closing Date, on the Lease Closing Date the
Partnership may, subject to the terms and conditions of this
Agreement, nonetheless borrow an amount up to the available
Loan Commitment equal to the amount required to be deposited
on the Lease Closing Date in the Rent Reserve Account, the
Operation and Maintenance Reserve Account and the Warranty
Maintenance Reserve Account pursuant to Section 7 of the
Facility Lease and an amount equal to the Success Fee, if
any, payable on the Lease Closing Date. Such borrowing
shall be repaid on such date from the proceeds received from
the sale of the Facility to the Owner Trustee pursuant to
Section 5 hereof.
(b) Each Loan shall be payable on the
Construction Loan Maturity Date without further action on
the part of GE Capital.
(c) Unless required to be converted pursuant to
the terms of this Agreement, the Loans shall be Eurodollar
Loans.
2.2 Procedure for Borrowing. Whenever the
Partnership desires GE Capital to make a Loan, the
Partnership shall give GE Capital irrevocable notice to be
received by GE Capital prior to 10:00 A.M., New York City
time, at least three Business Days prior to the requested
Borrowing Date, which notice shall be in substantially the
form of Exhibit C-2 (a "Notice of Borrowing") and shall
specify (i) the amount to be borrowed, (ii) the proposed
Borrowing Date, (iii) wire transfer instructions for the
disbursement of the proceeds of the Loan and (iv) the length
of the initial Interest Period with respect thereto. The
Borrowing Date shall be the next-to last Business Day of
each calendar month, or such other Business Day as GE
Capital and the Partnership shall mutually agree. Each Loan
shall be in the minimum amount of $100,000. No more than
one Borrowing shall be made in any calendar month.
2.3 Disbursement of Loans. Not later than 1:00
p.m., New York City time, on the Borrowing Date specified in
the Notice of Borrowing given by the Partnership pursuant to
subsection 2.2, if the conditions precedent to the requested
Loan listed in Section 4 have been satisfied, GE Capital
will make available the requested Loan on such date in
Dollars and in immediately available funds, by wire transfer
in accordance with the instructions set forth in such
notice.
2.4 Note. The Loans made by GE Capital pursuant
to subsection 2.1 shall be evidenced by a promissory note of
the Partnership, substantially in the form of Exhibit A,
with appropriate insertions, payable to the order of GE
Capital (the "Note"). The Note shall (a) be dated the
Initial Loan Funding Date, (b) represent the Partnership's
obligation to pay the amount of the Loan Commitment or, if
less, the aggregate unpaid principal amount of all
outstanding Loans, (c) be stated to mature on the
Construction Loan Maturity Date, (d) bear interest for the
period from the date thereof until paid in full on the
unpaid principal amount thereof from time to time
outstanding in accordance with subsection 2.7 and (e) be
entitled to the benefits of this Agreement and the
Collateral Security Documents. GE Capital is hereby
authorized to record the date and amount of each Loan, each
continuation or conversion thereof, the length of
each Interest Period with respect thereto and the date and
amount of each payment or prepayment of principal or
interest in respect thereof, on the schedules annexed to and
constituting a part of the Note (or, at GE Capital's option,
in its books and records), and any such recordation shall
constitute prima facie evidence of the accuracy of the
information so recorded. Failure by
GE Capital to make any such recordation shall not limit or
otherwise affect the obligations of the Partnership
hereunder or under the Note.
2.5 Fees. (a) The Partnership agrees to pay to
GE Capital, on the Initial Loan Funding Date, an origination
fee in an amount equal to 1.50% of the Loan Commitment.
(b) The Partnership agrees to pay to GE Capital a
commitment fee for the period commencing on the Initial Loan
Funding Date and ending on the Loan Commitment Termination
Date, computed at the rate of 1/2 of 1% per annum on the
average daily unused amount of the Loan Commitment. Such
commitment fee shall be payable on the next-to-last Business
Day of each calendar month occurring during the Loan
Commitment Period and on the Loan Commitment Termination
Date.
2.6 Mandatory Prepayments; Special Payments. (a)
If an Event of Loss shall occur, unless the Project is being
repaired in accordance with Section 9(c)(i) of the Facility
Lease, (i) the Commitment shall terminate forthwith and (ii)
on the earlier of (A) the date occurring 90 days after the
date of such Event of Loss and (B) the date on which
insurance proceeds are received with respect to such Event
of Loss, the Partnership shall (x) prepay in full the unpaid
principal amount of the then outstanding Loans and LOC
Reimbursement Obligations, together with accrued interest
thereon to the date of prepayment, and all fees and other
amounts owing with respect thereto by the Partnership
hereunder and under the other Loan Documents and (y) cash
collateralize all undrawn and outstanding Letters of Credit
in the manner provided in the introductory paragraph of
Section 8.
(b) If the Partnership receives any payments in
respect of liquidated damages (Contract Price Discounts)
pursuant to Section 5.04 of the Construction Contract, the
Partnership shall promptly deposit such payments in the
Special Payment Account. On the Construction Loan Maturity
Date, such amounts on deposit in the Special Payment Account
shall be applied to the repayment of the principal of the
Loans, provided that all such amounts received after the
Lease Closing Date shall be applied to the retroactive
reduction of Lessor's Cost. If the Partnership receives any
payments in respect of liquidated damages (Contract Price
Discounts) pursuant to Section 5.02 of the Construction
Contract, the Partnership shall, subject to the provisions
of Section 4.14 of the Security Deposit Agreement, promptly
apply such amounts to the payment of accrued and unpaid
interest on the Loans and to such other items which are due
and owing as GE Capital may specify in writing.
(c) If the Partnership receives any payments from
the Power Purchaser pursuant to Subsection 15.3(b) of the
Power Purchase Agreement, the Partnership shall promptly
deposit all such payments in the Special Payment Account.
Such amounts shall be promptly applied to (i) the repayment
in full of the principal amount of the Loans and the LOC
Reimbursement Obligations, together with accrued interest
thereon and all fees and other amounts owing with respect
thereto by the Partnership hereunder and under the other
Loan Documents and (ii) the cash collateralization of all
undrawn and outstanding Letters of Credit (or the termination
thereof without liability to GE Capital) in the manner provided
in the introductory paragraph of Section 8. Any amounts remaining
in the Special Payment Account after such application shall be
distributed to the Partnership in accordance with the terms
of the Security Deposit Agreement.
(d) Except as required by this subsection 2.6,
the Partnership shall not be permitted to prepay the Loans.
2.7 Computation of Interest and Fees. (a) (i)
The Loans that are Eurodollar Loans shall bear interest for
each day during each Interest Period with respect thereto on
the unpaid principal amount thereof at the rate per annum
equal to the Interest Rate set forth in clause "(a)" of the
definition of "Interest Rate" and (ii) the Loans that are
Base Rate Loans shall bear interest on the unpaid principal
amount thereof at the Interest Rate then in effect as set
forth in clause "(b)" of the definition of "Interest Rate".
Interest in respect of Eurodollar Loans and all fees
hereunder shall be calculated on the basis of a 360-day year
for the actual days elapsed. Interest in respect of Base
Rate Loans shall be calculated on the basis of a 365/366 day
year for the actual days elapsed.
(b) Interest on the aggregate unpaid principal
amount of the Loans shall be payable in arrears on each
Interest Payment Date, provided that interest accruing
pursuant to paragraph (c) of this subsection 2.7 shall be
payable from time to time on demand.
(c) In the event that, and for so long as, any
Event of Default shall have occurred and be continuing, the
outstanding principal amount of all Loans and, to the extent
permitted by Applicable Law, accrued interest in respect of
all Loans, and all fees and other amounts payable hereunder
shall bear interest at a rate per annum equal to the Default
Rate from the date of such Event of Default until such
amount is paid in full (as well after as before judgment).
(d) GE Capital shall as soon as practicable
notify the Partnership of each determination of a Eurodollar
Rate and a Base Rate and of the effective date and amount of
each change in the Base Rate. Each determination of an
interest rate by GE Capital pursuant to any provision of
this Agreement shall be conclusive and binding on the
Partnership in the absence of manifest error. GE Capital
shall, at the request of the Partnership, deliver to the
Partnership a statement showing the quotations, if any, used
by GE Capital in determining any interest rate pursuant to
paragraph (a) of this subsection 2.7. In the event that GE
Capital shall have determined that by reason of
circumstances affecting the interbank eurodollar market,
adequate and reasonable means do not exist for ascertaining
the Eurodollar Rate applicable for any Interest Period with
respect to (a) proposed Loans or (b) the continuation of
Eurodollar Loans beyond the expiration of the then current
Interest Period therefor, GE Capital shall give notice of
such event to the Partnership. Within 30 days following the
date of such notice by GE Capital, GE Capital and the
Partnership shall enter into negotiations in good faith with
a view to agreeing to an alternative basis acceptable to the
Partnership and GE Capital for determining the interest rate
(the "Substitute Eurodollar Rate") which shall be applicable
during such Interest Period for the Eurodollar Loans to
which such Interest Period applies and which shall reflect
the cost to GE Capital of funding such Eurodollar Loans for
such Interest Period from alternate sources plus the margin
for Eurodollar Loans set forth in the definition of
"Interest Rate". At the expiration of 30 days from the
giving of such notice by GE Capital, (i) if GE Capital and the
Partnership have agreed to such Substitute Eurodollar Rate, such
Substitute Eurodollar Rate shall take effect with respect to such
Interest Period from the beginning of such Interest Period
or (ii) if GE Capital and the Partnership have not agreed to
a Substitute Eurodollar Rate, (A) any requested Loans shall
be deemed to have been made as Base Rate Loans, and (B) any
outstanding Eurodollar Loans shall be converted, on the last
day of the then current Interest Period therefor, to Base
Rate Loans. Until such notice has been withdrawn by GE
Capital, no further Eurodollar Loans shall be made.
(e) The Partnership shall select the duration of
the initial Interest Period with respect to each Eurodollar
Loan in the Notice of Borrowing. Unless the Partnership
otherwise elects pursuant to the proviso to this sentence,
the Partnership shall be deemed to have elected to continue
such Eurodollar Loan at the expiration of the Interest
Period with respect thereto as a loan having an Interest
Period of the same duration as such expiring Interest
Period; provided that the Partnership may elect to convert
such Eurodollar Loan, on the last day of the then current
Interest Period with respect thereto, to a loan having an
Interest Period of any other authorized duration by
providing irrevocable notice to GE Capital not less than
three Business Days prior to the last day of the then
current Interest Period with respect thereto; and provided,
further, that no Eurodollar Loan will be continued as such
when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a Base
Rate Loan on the last day of the Interest Period with
respect thereto.
(f) It is the intention of the parties hereto to
conform strictly to applicable usury laws and, anything
herein or elsewhere to the contrary notwithstanding, the
Obligations shall be subject to the limitation that the
Partnership shall not be required to pay, and GE Capital
shall not be entitled to charge or receive, any interest to
the extent that such interest exceeds the maximum rate of
interest which GE Capital is permitted by any applicable law
to contract for, charge or receive and which would not give
rise to any claim or defense of usury. If, as a result of
any circumstances whatsoever, performance of any provision
hereof or of any of the Loan Documents shall, at the time
performance of such provision is due, violate applicable
usury law, then, ipso facto, the obligation to be performed
shall be reduced to the highest lawful rate, and if, from
any such circumstance, GE Capital shall ever receive
interest or anything which might be deemed interest under
applicable law which would exceed the highest lawful rate,
the amount of such excess interest shall be applied to the
reduction of the principal amount owing on account of the
Note or the amounts owing on other Obligations and not to
the payment of interest, or if such excessive interest
exceeds the unpaid principal balance of the Obligations,
such excess shall be refunded to the Partnership.
(g) (A) Any other provision of this Agreement to
the contrary notwithstanding, if any Law or any change
therein or in the interpretation or the application thereof
by any Governmental Authority charged with interpretation or
administration thereof shall make it unlawful for GE Capital
to make or maintain Eurodollar Loans as contemplated by this
Agreement, GE Capital shall give written notice thereof to
the Partnership and the commitment of GE Capital hereunder
to make Eurodollar Loans shall forthwith be suspended so
long as such Law, interpretation or application shall
continue, and all Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to Base Rate
Loans on the last day of the then current Interest
Period therefor or within such earlier period as may be
required by Law and all Loans made thereafter by GE Capital
shall bear interest based upon the Base Rate. If any such
conversion of Eurodollar Loans is made on a day which is not
the last day of an Interest Period, the Partnership shall
pay to GE Capital upon such request, such amount or amounts
as may be necessary to compensate GE Capital for any loss or
expense sustained or incurred by GE Capital in respect of
the Eurodollar Loans as a result of such conversion,
including but not limited to any interest or fees payable by
GE Capital to lenders of funds obtained by it in order to
make or maintain the Eurodollar Loans hereunder, and shall
pay to GE Capital the Eurodollar Rate on such Eurodollar
Loans to the date of such automatic conversion.
(B) In the event that any Law or any change
therein or in the interpretation or application thereof by
any Governmental Authority charged with the administration
or interpretation thereof, or compliance by GE Capital with
any request or directive (whether or not having the force of
Law) received from any central bank or monetary authority or
other Governmental Authority:
(1) does or shall subject GE Capital to any tax
of any kind whatsoever or change therein with respect
to this Agreement, or any Loan hereunder, or the
performance by GE Capital of its obligations hereunder,
or change the basis of taxation of payments to GE
Capital of principal, interest, or any other amount
payable hereunder (except for changes in the rate of
tax on the overall net income of GE Capital); or
(2) does or shall impose, modify or hold applicable
or change any reserve (including, without limitation,
basic, supplemental, marginal and emergency
reserves), special deposit, compulsory loan or
similar requirement against assets held by, deposits
or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or
any other acquisition of funds by (including, without
limitation, all eurocurrency funding by and all
eurocurrency liabilities), any office of GE Capital
which is not otherwise included in the determination
of the Eurodollar Rate; or
(3) does or shall impose on GE Capital any
other condition, or change therein;
and the result of any of the foregoing is to increase the cost
to GE Capital (as compared to the Initial Loan Funding Date) of
making, committing to make, renewing, converting or maintaining
Loans, or to reduce any amount receivable by GE Capital
hereunder or thereunder (as compared to the Initial Loan
Funding Date), then, in any such case, the Partnership shall
promptly pay GE Capital, upon its demand, such additional
amount which will compensate GE Capital for such additional
cost or reduced amount receivable.
(C) In the event that the adoption of any Law, rule,
regulation or guideline regarding capital adequacy, or any
change therein or in the interpretation or application thereof
by any Governmental Authority charged with the administration
or interpretation thereof or compliance by GE Capital with any
request or directive regarding capital adequacy (whether or not
having the force of Law) from any central bank or Governmental
Authority including, without limitation, the issuance of any
final rule, regulation or guideline, does or shall have the
effect of reducing the rate of return on GE Capital's capital
as a consequence of its obligations hereunder to a level below
that which GE Capital could have achieved but for such
adoption, change or compliance (taking into consideration GE
Capital's policies with respect to capital adequacy) by any
material amount, then from time to time, upon demand by GE
Capital, the Partnership shall pay to GE Capital such
additional amount or amounts as will compensate GE Capital for
such reduction.
(D) If circumstances arise that would entitle GE
Capital to claim any additional amounts pursuant to this
paragraph (g) of this subsection 2.7, GE Capital shall promptly
notify the Partnership thereof and consult in good faith with
the Partnership with a view toward avoiding such circumstance
to the extent reasonably practicable; provided that the failure
of GE Capital to so notify or consult the Partnership shall not
act as a waiver of the right of GE Capital to receive
additional amounts pursuant to this paragraph (g) when GE
Capital provides the required notice to the Partnership. A
certificate as to any additional amounts payable pursuant to
this paragraph (g) submitted by GE Capital to the Partnership
shall be conclusive absent manifest error. The provisions of
this paragraph (g) shall accrue to the benefit of each Assignee
of GE Capital and shall survive the termination of this
Agreement, payment of the outstanding Notes and all other
amounts payable hereunder.
2.8 Payments. All payments (including prepayments)
to be made by the Partnership on account of principal,
interest, reimbursement obligations and fees shall be made
without set-off or counterclaim and shall be made not later
than 12:00 Noon New York City time on the date when due and
shall be sent by wire transfer to GE Capital's account no. 50-
205-776 (GECC Depositary Account) at Bankers Trust Company, Xxx
Xxxx, Xxx Xxxx 00000, ABA Number: 0000-0000-0 (Re: Panda
Brandywine) in lawful money of the United States of America and
in immediately available funds. Any payment received by GE
Capital after 12:00 Noon shall be deemed to have been paid on
the next succeeding Business Day. If any payment hereunder
becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business
Day and, with respect to payments of principal, interest
thereon shall be due and payable at the then applicable rate
during such extension.
2.9 Letter of Credit Commitment. (a) Subject to
the terms and conditions of this Agreement, GE Capital agrees
to issue and deliver certain stand-by letters of credit during
the Letter of Credit Commitment Period, substantially in the
form of Exhibits X-0, X-0, X-0 and B-4 hereto, as applicable,
for the account of the Partnership in favor of the Power
Purchaser to secure the following obligations of the
Partnership under the Power Purchase Agreement: (i) its
obligation to post development security (the "Development
Security Letter of Credit") as required by Section 4.1 of the
Power Purchase Agreement, (ii) its obligation to post security
in respect of interconnection costs (the "Interconnection
Letter of Credit") as required by Section 4.2 of the Power
Purchase Agreement, (iii) the Partnership's performance
obligations under the Power Purchase Agreement after the
Commercial Operation Date (the "Performance Letter of Credit")
as required by Section 4.5 of the Power Purchase Agreement and
(iv) its obligation to provide for operating and maintenance
cost reserves pursuant to Section 8.7 of the Power Purchase
Agreement (the "O&M Letter of Credit"; collectively with the
other letters of credit described in this paragraph (a), the
"PEPCO Letters of Credit" or the "Letters of Credit"). The
commitment of GE Capital to issue Letters of Credit, or
increase the stated amount of any Letter of Credit, shall
terminate on the Letter of Credit Issuance Termination Date.
(b) (i) Subject to the satisfaction of the
conditions precedent set forth in Section 4 hereof, the
Development Security Letter of Credit shall initially be issued
on the Initial Loan Funding Date in the stated amount of
$3,450,000 and shall expire on the earlier to occur of (A) the
date occurring forty (40) days after the Commercial Operation
Date and (B) June 30, 1998.
(ii) Subject to the satisfaction of the
conditions precedent set forth in Section 4 hereof, the
Interconnection Letter of Credit shall initially be issued on
the Initial Loan Funding Date in the stated amount of
$2,003,460. Upon the receipt of a certificate of the Power
Purchaser (attached as Annex 1 to the Interconnection Letter of
Credit) detailing the interconnection costs incurred by the
Power Purchaser and paid by the Partnership during the
preceding month, the stated amount of the Interconnection
Letter of Credit shall decrease by the amount shown in such
certificate; provided that the stated amount of such Letter of
Credit shall never be less than $330,000. The Interconnection
Letter of Credit shall expire on the earlier to occur of (A)
the date occurring forty (40) days after the Commercial
Operation Date and (B) June 30, 1998.
(iii) Subject to the satisfaction of the
conditions precedent set forth in Section 4 hereof, the
Performance Letter of Credit shall initially be issued on the
Commercial Operation Date in the stated amount of $2,000,000
and shall expire on the earlier to occur of (A) the next
succeeding December 31 and (B) the Letter of Credit Commitment
Termination Date.
(iv) Subject to the satisfaction of the
conditions precedent set forth in Section 4 hereof, the O&M
Letter of Credit shall initially be issued on the later of
December 31, 1998 and the second anniversary of the Commercial
Operation Date in the stated amount of $1,000,000 and shall
expire on the earlier to occur of (A) the next succeeding
December 31 and (B) the Letter of Credit Commitment Termination
Date. So long as no Default, Event of Default, Lease Default
or Lease Event of Default shall have occurred and be continuing
at such time, the O&M Letter of Credit shall be amended on the
later of December 31, 1999 and the third anniversary of the
Commercial Operation Date to increase the stated amount to
$2,000,000 and shall be amended on the later of December 31,
2000 and the fourth anniversary of the Commercial Operation
Date to increase the stated amount to $5,000,000.
(c) Intentionally Left Blank.
(d) Intentionally left blank.
(e) On or prior to October 31 of each calendar year
after the occurrence of the Commercial Operation Date, the
Partnership shall deliver a certificate to GE Capital
confirming that the Partnership continues to have obligations
to the LOC Beneficiary and requesting GE Capital to renew the
Letters of Credit referred to in paragraphs (b)(iii) and (iv)
above. So long as no Default, Event of Default, Lease Default
or Lease Event of Default shall have occurred and be
continuing, on or prior to the November 30 next succeeding the
delivery of the notice specified in the immediately preceding
sentence, GE Capital shall deliver to the LOC Beneficiary a replacement
Letter of Credit in a stated amount equal to the amount
requested and having an effective date on the next succeeding
January 1 and an expiration date the following December 31. GE
Capital's obligation to renew Letters of Credit pursuant to
this paragraph (e) shall expire pursuant to this paragraph on
the Letter of Credit Commitment Termination Date.
(f) Prior to the Commercial Operation Date, the Letter
of Credit Commitment shall automatically decrease on the last
Business Day of each month by an amount equal to any decrease
in the stated amount of the Interconnection Letter of Credit
(as set forth in the certificate of the Power Purchaser
referred to in paragraph (b)(ii) of this subsection 2.9) since
the last Business Day of the preceding month. After the
Commercial Operation Date, the Letter of Credit Commitment
shall automatically decrease (on a dollar for dollar basis)
with any corresponding decrease in the stated amount of any
Letter of Credit or with any termination of any Letter of
Credit.
(g) The aggregate stated amount of the Letters of
Credit at any time shall not exceed the lesser of (i)
$12,453,460 and (ii) the then applicable Letter of Credit
Commitment.
2.10 Partnership's Obligations in Respect of
Drawings Under Letters of Credit.
(a) If GE Capital makes any payment to a LOC
Beneficiary with respect to a Letter of Credit, the Partnership
shall reimburse GE Capital for the amount thereof not later than
the close of business on the Business Day on which payment by
GE Capital was made and shall pay all charges and expenses
relating to such payment and, if such payment is not made when
due, shall pay upon demand interest at the Interest Rate
applicable to one month Eurodollar Loans plus an additional
265 basis points on the amount of such payment for the period
commencing on and including the date of any such payment and
ending on but not including the date reimbursement is received
by GE Capital (after as well as before judgment). The obligation
of the Partnership to reimburse GE Capital for Letter of Credit
payments (such obligation being herein called the "LOC
Reimbursement Obligation") is absolute, unconditional and
irrevocable and shall be observed strictly in accordance with
the terms of this Agreement under all circumstances whatsoever
including, without limitation, the following circumstances:
(i) any lack of legality, validity, enforceability or
regularity of any Letter of Credit, this Agreement or any other
Transaction Document; (ii) any amendment, waiver of or any
consent to or departure from all or any of the Transaction
Documents; (iii) the existence of any claim, set-off, defense,
counterclaim or other right which the Partnership may have at
any time against GE Capital, the Owner Trustee, the Security
Agent, any LOC Beneficiary or any other person, whether in
connection with this Agreement, any Letter of Credit, the other
Loan Documents, the Lease Documents, the Project Documents or
any unrelated transaction; (iv) any statement or any other
document presented under any Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect whatsoever;
(v) payment by GE Capital under any Letter of Credit against
presentation of a sight draft or certificate that does not
comply with the terms of such Letter of Credit; (vi) the
existence of any dispute between the Partnership and any LOC
Beneficiary or any transferee thereof; (vii) any error,
omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in
connection with any Letter of Credit; and (viii) any other
circumstance or happening whatsoever, whether or not similar to
any of the foregoing.
(b) Without limiting the effect of paragraph (a)
above, the Partnership agrees with GE Capital that:
(i) GE Capital is authorized to make payments
under each Letter of Credit upon the presentation of the
documents provided for therein and without regard to
whether the Partnership has failed to fulfill any of its
obligations with respect to any Project Document or Loan
Document or Lease Document or any other default has
occurred thereunder.
(ii) GE Capital is authorized to take such
action on its behalf under the provisions of this
Agreement and to exercise such powers and perform such
duties as are specifically delegated to or required of it
by the terms hereof, together with such powers as are
reasonably incidental thereto.
(iii) GE Capital shall be entitled to rely upon
any certificate, notice, demand or other communication
(whether by cable, telegram, telecopy, telex or other
written communication) believed by it to be genuine and to
have been signed or sent by the proper Person or Persons
(and no such reliance or failure shall place it under any
liability to the Partnership or limit or otherwise affect
the Partnership's obligations under this Agreement).
(iv) Any action, inaction or omission on the
part of GE Capital under or in connection with any Letter
of Credit or the instruments or documents related thereto,
if in good faith and in conformity with such laws,
regulations or customs as GE Capital may reasonably deem
to be applicable, shall be binding upon the Partnership
(and shall not place GE Capital under any liability to the
Partnership or limit or otherwise affect the Partnership's
obligations under this Agreement).
(v) Notwithstanding any change or modification,
with or without the consent of the Partnership, in any
instruments or documents called for in any Letter of
Credit, including waiver of noncompliance of any such
instruments or documents with the terms of any Letter of
Credit, this Agreement shall be binding on the Partnership
with regard to each Letter of Credit and to any action
taken by GE Capital relative thereto.
(vi) The Partnership will indemnify and hold
harmless GE Capital from any loss or expense arising from
or in connection with any Letter of Credit (exclusive of
any loss or expense arising directly from the gross
negligence or wilful misconduct of GE Capital).
2.11 Letter of Credit Fees. (a) On the initial
date of issuance of each Letter of Credit hereunder, the
Partnership agrees to pay to GE Capital a letter of credit
issuance fee in an amount equal to one and three-quarters
percent (1.75%) of the stated amount thereof.
(b) So long as a Letter of Credit shall be
outstanding, the Partnership agrees to pay to GE Capital an
annual letter of credit fee in an amount equal to one and one
half percent (1.50%) of the stated amount of the then
outstanding Letter of Credit. From the date hereof to and
including the Basic Term Commencement Date, such fee shall be
payable in arrears on the next-to-last Business Day of each
March, June, September and December, commencing with the first
such date to occur following the initial issuance date of a
Letter of Credit hereunder. From the Basic Term Commencement
Date to and including the end of the Basic Term, such fee shall
be payable in arrears on each Rent Payment Date (each such
payment date, an "LOC Fee Payment Date").
(c) During the Letter of Credit Commitment Period,
the Partnership shall pay to GE Capital an annual letter of credit
commitment fee in an amount equal to one-hundred and twenty-
five basis points (1.25%) multiplied by the amount by which the
Letter of Credit Commitment exceeds the aggregate stated amount
of the then outstanding Letter(s) of Credit. The letter of
credit commitment fee shall be payable on each LOC Fee Payment
Date.
2.12 Funding Indemnity. The Partnership agrees to
indemnify GE Capital and to hold GE Capital harmless from any
loss or expense which GE Capital may sustain or incur as a
consequence of (a) a default by the Partnership in making a
borrowing or a continuation of Eurodollar Loans after the
Partnership has given a notice requesting the same in
accordance with the provisions of this Agreement, (b) a default
by the Partnership in making any prepayment after the
Partnership has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment
of Eurodollar Loans on a day which is not the last day of the
Interest Period with respect thereto. Such indemnification may
include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so
prepaid, or not so borrowed or continued, for the period from
the date of such prepayment or of such failure to borrow to the
last day of the current Interest Period for such Loan in the
case of such prepayment (or to the last day of the Interest
Period that would have commenced on the date of such failure in
the case of a failure to borrow), in each case at the
applicable rate of interest for such Loans provided for herein
over (ii) the amount of interest (as reasonably determined by
GE Capital) which would have accrued on such amount by placing
such amount on deposit for a comparable period with a leading
bank in the interbank eurodollar market. This provision shall
accrue to the benefit of each Assignee of GE Capital and shall
survive the termination of this Agreement and payment of the
Note and all other amounts payable hereunder.
2.13 Use of Proceeds. The proceeds of the Loans
shall be used by the Partnership only to pay, or to reimburse
itself for having paid, Project Costs due and owing by it.
2.14 Taxes. All payments made by the Partnership
under this Agreement shall be made free and clear of, and
without reduction or withholding for or on account of, any
present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority (all such taxes, levies, imposts,
deductions, charges or withholdings being hereinafter called
"Withholding Taxes"). If any Withholding Taxes are required to
be withheld from any amounts payable to GE Capital hereunder or
under the Note, the amounts so payable to GE Capital shall be
increased to the extent necessary to yield to GE Capital (after
payment of all Withholding Taxes) interest or any such other
amounts payable hereunder at the rates and in the amounts
specified in this Agreement and the Note. Notwithstanding the
preceding two sentences, the Partnership will have no duty to
compensate GE Capital for amounts that the Partnership is
required to withhold under Section 1441 or 1442 of the Code.
Whenever any Withholding Taxes are payable by the Partnership,
as promptly as possible thereafter, the Partnership shall send
to GE Capital a certified copy of an original official receipt
received by the Partnership showing payment thereof. If the
Partnership fails to pay any Withholding Taxes when due to the
appropriate taxing authority or fails to remit to GE Capital
the required receipts or other required documentary evidence,
the Partnership shall indemnify GE Capital for (i) any
incremental taxes, interest or penalties that may become
payable by GE Capital as a result of any such failure and (ii) any
expenses incurred by GE Capital arising from or with respect to
such Withholding Taxes. This indemnification shall be made within
30 days from the date GE Capital makes written demand therefor.
The agreements in this subsection 2.14 shall accrue to the benefit
of each Assignee under subsection 9.6 and shall survive the termination
of this Agreement and the payment of the Note and all other
Obligations.
2.15 Maximum Number of Tranches. All borrowings,
conversions and continuations of Eurodollar Loans hereunder and
all selections of Interest Periods hereunder shall be made so
that, after giving effect thereto, there shall not be more than
three Eurodollar Tranches outstanding at any one time. As used
in this subsection 2.15, a "Eurodollar Tranche" shall mean and
refer to Eurodollar Loans made by GE Capital pursuant to a
single borrowing and having interest periods which begin on the
same date and end on the same later date (whether or not such
Eurodollar Loans shall originally have been made on the same
day).
Section 3. REPRESENTATIONS AND WARRANTIES
In order to induce GE Capital to make the Loans and
to issue the Letters of Credit hereunder and to enter into and
to cause the Owner Trustee to enter into the transactions
contemplated by Section 5, each of the Partnership and the
General Partner represents and warrants to GE Capital and the
Owner Trustee that:
3.1 Financial Statements. (a) The balance sheets
of the Partnership delivered pursuant to subsection 4.1(dd) are
complete and correct in all material respects, and fairly
present the financial condition of the Partnership on such
date, and were prepared in conformity with GAAP applied on a
consistent basis. All liabilities, direct and contingent, of
the Partnership on such date are disclosed in such balance
sheets.
(b) The balance sheets of the General Partner,
Holdings and Panda delivered pursuant to subsection 4.1(dd) are
complete and correct in all material respects, fairly present
the financial condition of the General Partner, Holdings and
Panda as of such date, and were prepared in conformity with
GAAP applied on a consistent basis. All liabilities, direct
and contingent, of the General Partner, Holdings and Panda on
such date are disclosed in such balance sheets.
(c) Since the respective dates of the balance sheets
of the Partnership, the General Partner, Holdings and Panda
referred to in paragraphs (a) and (b) above, no material
adverse change has occurred in (i) the financial condition of
the Partnership, the General Partner, Holdings or Panda, (ii)
the properties, business, prospects, operations or financial
condition of the Partnership, the General Partner, Holdings,
Panda or the Project, or (iii) the Partnership's ability to
perform its obligations under this Agreement, the Note and the
other Transaction Documents to which it is a party or will
become a party.
3.2 Partnership Existence and Business; Partners.
(a) The Partnership is a limited partnership duly organized
and validly existing under the laws of the State of Delaware
and is duly qualified to do business in the States of Delaware
and Maryland, the only jurisdictions in which the conduct of
its business or the ownership or lease of its assets requires
such qualification. The Certificate of Limited Partnership of
the Partnership has been duly filed in the office of the
Secretary of State of Delaware and no other filing, recording,
publishing or other act is necessary or appropriate in connection
with the existence or the business of the Partnership except those
which have been duly made or performed. Prior to the date hereof,
the Partnership has engaged in no business other than the
development of the Project, and the negotiation, execution,
delivery and performance of the Development Loan Agreement, the
documents related thereto and the Transaction Documents to
which it is a party or will become a party, and the Partnership
has no obligations or liabilities other than those directly
related to the conduct of such business. The Partnership is
and will be engaged solely in the business of constructing,
owning (and, after the Lease Closing Date, leasing) and
operating the Project and activities reasonably incidental
thereto.
(b) Each of the General Partner and the Limited
Partner is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware, the
General Partner is duly qualified to do business and is in good
standing in the State of Maryland and each of the General
Partner and the Limited Partner is qualified to do business in
each other jurisdiction in which the nature of its business
requires it to be so qualified. The General Partner is the
sole general partner of the Partnership, and is engaged solely
in the business of being the general partner of the
Partnership. The Limited Partner is the sole limited partner
of the Partnership, and is engaged solely in the business of
being the limited partner of the Partnership.
(c) The only partners of the Partnership are the
General Partner, as the sole general partner, and the Limited
Partner as the sole limited partner.
(d) None of the Partnership, the General Partner nor
the Limited Partner has any Subsidiaries.
3.3 Compliance With Law. Each of the Partnership
and the General Partner is in compliance with all Applicable
Laws except to the extent that the failure to comply therewith
would not, in the aggregate, have a Material Adverse Effect.
3.4 Power and Authorization; Enforceable
Obligations. (a) The Partnership has full power and authority
and the legal right to construct, own (and, after the Lease
Closing Date, hold under lease) and operate the Project, to
conduct its business as now conducted and as proposed to be
conducted by it, to execute, deliver and perform this
Agreement, the Note, the Collateral Security Documents, the
Lease Documents and the other Transaction Documents to which it
is or is to become a party, to take all action as may be
necessary to complete the transactions contemplated hereunder
and thereunder, to grant the liens and security interests
provided for in the Collateral Security Documents to which it
is a party and to borrow hereunder. The Partnership has taken
all necessary partnership and legal action to authorize the
borrowings hereunder on the terms and conditions of this
Agreement, the Note and the other Transaction Documents to
which it is a party, to grant the liens and security interests
provided for in the Collateral Security Documents to which it
is a party and to authorize the execution, delivery and
performance of this Agreement, the Note, the Lease Documents
and the other Transaction Documents to which it is a party or
is to become a party. No consent or authorization of, filing
with, or other act by or in respect of any other Person is
required in connection with the borrowings hereunder or with
the execution, delivery or performance by the Partnership or
the validity or enforceability as to the Partnership of this
Agreement, the Note, the Lease Documents or the other Transaction
Documents except the Governmental Actions and other consents and
approvals referred to in subsection 3.5. Each of this Agreement
and the other Transaction Documents to which the Partnership is a
party has been duly executed and delivered by the Partnership and
constitutes, and each of the other Transaction Documents to
which the Partnership is to become a party will, upon execution
and delivery thereof by the Partnership and the other parties
thereto (if any), constitute, a legal, valid and binding
obligation of the Partnership enforceable against the
Partnership in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general
principles of equity. None of the Project Documents to which
the Partnership is a party has been amended or modified except
in accordance with subsection 6.10 of the Development Loan
Agreement or subsection 7.6 hereof (which amendments or
modifications have been duly delivered to GE Capital), and all
such Project Documents are in full force and effect.
(b) Each of the General Partner and the Limited
Partner has full power and authority and the legal right to own
its properties and to conduct its business as now conducted and
proposed to be conducted by it, to execute, deliver and perform
the Transaction Documents to which it is or is to become a
party, to take all action as may be necessary to complete the
transactions contemplated thereunder, and, in the case of the
General Partner, to act as the general partner of the
Partnership. Each of the General Partner and the Limited
Partner has taken all necessary corporate action to authorize
the execution, delivery and performance of the Transaction
Documents to which it is or is to become a party. No consent
or authorization of, filing with, or other act by or in respect
of any other Person (including any stockholder of the General
Partner or the Limited Partner) is required in connection with
the execution, delivery or performance by the General Partner
or the Limited Partner, or the validity or enforceability as to
the General Partner or the Limited Partner, of the Transaction
Documents to which it is a party or is to become a party except
the Governmental Actions and other consents and approvals
referred to in subsection 3.5. Each of the Transaction
Documents to which the General Partner or the Limited Partner
is a party has been duly executed and delivered by the General
Partner or the Limited Partner, as the case may be, and
constitutes, and each of the other Transaction Documents to
which the General Partner or the Limited Partner is to become a
party will upon execution and delivery thereof by the General
Partner or the Limited Partner, as the case may be, and the
other parties thereto (if any), constitute, a legal, valid and
binding obligation of the General Partner or the Limited
Partner, as the case may be, enforceable against the General
Partner or the Limited Partner, as the case may be, in
accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity.
(c) The Partnership Agreement has been duly
authorized, executed and delivered by each of the Partners and
constitutes a legal, valid and binding obligation of each of
the Partners enforceable in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general
principles of equity.
3.5 Governmental Actions and Other Consents and
Approvals. No Governmental Actions or other consents or
approvals are required in connection with (a) the participation
by the Partnership or the Partners in the transactions
contemplated by this Agreement and the other Transaction
Documents, (b) the construction, use, ownership (and, after the
Lease Closing Date, lease) or operation of the Project
(including the Transmission Facilities and all pipelines to be
used to transport Fuel or water to the Facility) in accordance
with the applicable provisions of the Transaction Documents and
in compliance with all applicable Environmental Laws, (c) the
validity and enforceability of this Agreement, the Facility
Lease, the Power Purchase Agreement, the Gas Contracts and the
other Transaction Documents, (d) the use of the Fuel for
operation of the Facility, (e) the grant by the Partnership,
the Partners and Holdings of the Liens created pursuant to the
Collateral Security Documents and the validity and
enforceability thereof and the perfection of and the exercise
by GE Capital of its rights and remedies thereunder or (f) the
participation by GE Capital or the Owner Trustee in the
transactions contemplated by this Agreement, the Lease
Documents and the other Transaction Documents (other than any
Governmental Actions under any law, rule or regulation of (or
administered by) any federal or state regulatory body primarily
responsible for regulating the activities of GE Capital or the
Owner Trustee) to which either is a party, except in each case
for those Governmental Actions and other consents and approvals
which are set forth in Schedule 2. Each of the Governmental
Actions and other consents and approvals listed in Part A of
Schedule 2 has, as of the Initial Loan Funding Date, been duly
obtained or made, is in full force and effect, is final and is
not subject to appeal or judicial, governmental or other
review. None of the Governmental Actions and other consents
and approvals listed in Part B of Schedule 2 are obtainable
prior to the Initial Loan Funding Date. The Partnership
reasonably believes that each of the Governmental Actions and
other consents and approvals listed in Part B of Schedule 2
will be duly obtained or made on or prior to the date required
therefore in Schedule 2, will be in full force and effect, will
be final and will not then be subject to appeal or judicial,
governmental or other review. The Partnership has no reason to
believe that any of the Governmental Actions and other consents
and approvals listed in Part B of Schedule 2 cannot or will not
be obtained or made in the normal course of business as and
when required hereunder. There is no (i) action, suit,
investigation or proceeding pending, or to the best knowledge
of the Partnership or the General Partner, threatened, against
the Partnership, any Participant or the Project, (ii) condition
that could reasonably be expected to result in an action, suit,
investigation or proceeding referred to in clause (i) above,
nor (iii) any other action, suit, investigation or proceeding
not involving the Partnership, any Participant or the Project,
that, in the case of clause (i) or (ii), could result in (or,
in the case of clause (iii), could reasonably be expected to
result in) the modification, rescission, termination, or
suspension of any Governmental Action referred to in Schedule 2
obtained prior to the date this representation is made or
deemed made.
3.6 No Legal Bar. The execution, delivery and
performance of this Agreement, the Note and the other
Transaction Documents, the borrowings by the Partnership
hereunder and the use of the proceeds thereof, (i) will not
violate any Applicable Law applicable to, or any Contractual
Obligation of, the Partnership, the General Partner or the
Limited Partner or any Affiliate of any thereof, (ii) will not
result in, or require, the creation or imposition of any Lien
on any of the properties or revenues of the Partnership or the
General Partner pursuant to any Applicable Law or Contractual
Obligation, except for Permitted Liens, (iii) will not violate
any provision of the Certificate of Limited Partnership of the
Partnership or the Partnership Agreement of the Partnership or
he Certificate of Incorporation or Bylaws of the General Partner
or the Limited Partner, or any other organizational documents of the
Partnership, the General Partner or the Limited Partner.
3.7 No Proceeding or Litigation. Except for the
Columbia Proceeding and the Columbia Bankruptcy Proceeding, no
litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the best
knowledge of the Partnership, threatened against or affecting
the Partnership or the General Partner or against or affecting
any of their respective properties, rights, revenues or assets,
or the Project, which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
3.8 No Default or Event of Loss. Neither the
Partnership nor the General Partner is in default in any
material respect under or with respect to any Contractual
Obligation, including without limitation, any Transaction
Document; and no notice of default has been given to the
Partnership or the General Partner under any of the Project
Documents. To the best knowledge of the Partnership and the
General Partner, no other party to a Project Document is in
default thereunder. No Default or Event of Default has
occurred and is continuing; no Event of Loss has occurred; and
no Event of Regulation has occurred.
3.9 Ownership of Property; Liens. The Partnership
(which shall use the proceeds of the initial Loan to acquire
the Site) will, as of the Initial Loan Funding Date, have good,
marketable and indefeasible title to the Site and all other
Collateral owned by it, in each case free and clear of all
Liens except Permitted Liens. No mortgage or financing
statement or other instrument or recordation covering all or
any part of the Collateral which has been executed by, or with
the permission of, the Partnership or the General Partner is on
file in any recording office, except as such has been filed in
favor of GE Capital or the Security Agent.
3.10 Taxes. (a) Each of the Partnership and the
General Partner has filed or caused to be filed all tax returns
which are required to be filed by it, and has paid or caused to
be paid all taxes shown to be due and payable on such returns
(and such amounts thereon adequately reflect the respective tax
liability of the Partnership and the General Partner) or on any
assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority, except taxes, fees and
other charges arising after the date hereof which are subject
to a Contest.
(b) Except for (i) transfer taxes and registration,
recordation and other fees and taxes payable in connection with
the recordation of the Deed of Trust and Security Agreement and
the filing of financing statements required to perfect the
Security Agent's and GE Capital's rights under the Collateral
Security Documents, all of which taxes and fees will have been
paid in full by the Partnership on or before the first
Borrowing Date hereunder, (ii) other taxes or fees, if any,
which are indemnified against by the Partnership pursuant to
subsection 2.7(g) and which shall have been paid in full by the
Partnership on or before each Borrowing Date hereunder to the
extent then required and (iii) income, capital, receipts or
franchise taxes imposed with respect to GE Capital (or the
Owner Trustee or the Security Agent) by the federal government or the
jurisdiction in which GE Capital (or the Owner Trustee or the
Security Agent) is organized or in which an office of
GE Capital(or the Owner Trustee or the Security Agent) is
located or any political subdivision or taxing authority
thereof or therein, neither the execution and delivery of this
Agreement, the Note or any other Transaction Document, nor the
consummation of any of the transactions contemplated hereby or
thereby, will result in any tax, levy, impost, duty, charge or
withholding imposed by the United States or any agency or
taxing authority thereof, or by the State of Delaware or any
political subdivision or taxing authority thereof or therein,
on or with respect to such execution, delivery or consummation,
or upon or with respect to GE Capital, the Owner Trustee or the
Security Agent.
3.11 Federal Regulations. Neither the Partnership
nor the General Partner is engaged or will engage in the
business of extending credit for the purpose of "purchasing" or
"carrying" any "margin stock" within the respective meanings of
each of the quoted terms under Regulations G, U and X of the
Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect. No part of the proceeds
of the Loans will be used for "purchasing" or "carrying" any
"margin stock" as so defined or for any purpose which violates,
or which would be inconsistent with, the provisions of the
Regulations of such Board of Governors.
3.12 ERISA. The Partnership is not in violation of
applicable provisions of ERISA and the regulations and
published interpretations thereunder with respect to any Plan.
Neither the Partnership nor the General Partner maintains, or
is required under ERISA to maintain, any Plan.
3.13 Investment Company Act; etc. None of the
Partnership, the General Partner, the Limited Partner, Panda or
Holdings is (i) an "investment company" or a company
"controlled" by an "investment company," within the meaning of
the Investment Company Act of 1940, as amended, (ii) subject to
regulation under the Holding Company Act as a "holding company"
or a "subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary
company" of a "holding company", or (iii) subject to any other
Law which purports to restrict or regulate its ability to
borrow money.
3.14 Collateral Security Documents; Lease Documents.
Upon execution and delivery thereof, the Collateral Security
Documents will be effective to create, in favor of the Security
Agent, for the benefit of the Owner Trustee and GE Capital,
legal, valid and enforceable liens on and security interests in
all right, title, estate and interest of the Partnership, the
Partners or Holdings, as the case may be, in and to the
Collateral and, prior to the Initial Loan Funding Date, all
necessary and appropriate recordings and filings will have been
duly effected in all appropriate public offices so that the
liens and security interests created by each of the Collateral
Security Documents will constitute perfected first liens on and
prior perfected security interests in all right, title, estate
and interest of the Partnership, the Partners or Holdings, as
the case may be, in and to the Collateral described therein
prior and superior to all other Liens, existing or future,
except Permitted Liens. The recordings and filings shown on
Part A of Schedule 3 are all the recordings, filings and other
action necessary and appropriate to establish, protect and
perfect the Security Agent's Lien on and security interest in
and to the Collateral for the benefit of the Owner Trustee and
GE Capital.
3.15 Full Disclosure. No representation, warranty
or other statement made by the Partnership or the General
Partner in any Project Document or in any certificate, written
statement or other document furnished to GE Capital or GE
Capital's Representative by or on behalf of the Partnership, or
the General Partner, contains, at the time made, any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were
made, and at the time so made, not misleading, unless such
misstatement or omission has been corrected or disclosed prior
to the Initial Loan Funding Date. There is neither any fact
known to the Partnership or the General Partner which it has
not disclosed to GE Capital in writing prior to the Initial
Loan Funding Date nor any Contractual Obligation which
materially adversely affects, or which could reasonably be
expected in the future to affect, materially and adversely, the
Project or the properties, business, prospects, operations or
financial condition of the Partnership or the General Partner
or the ability of the Partnership or the General Partner to
perform its obligations under any Transaction Document to which
it is or is to become a party. Neither the Partnership nor the
General Partner is aware of any pending, proposed or
contemplated changes (other than changes of a routine or
immaterial nature or changes to the Construction Contract set
forth in Exhibit B of the Consent delivered by the Contractor)
to the Project Documents after the Initial Loan Funding Date.
The Operating Projections were prepared by the Partnership in
good faith based on reasonable assumptions consistently
applied.
3.16 Property Rights, Utilities, etc. All utility
services, means of transportation, facilities and other
materials that can reasonably be expected to be necessary for
the construction and operation of the Facility (including,
without limitation, gas, electrical, water and sewage services
and facilities) are available to the Facility and, to the
extent appropriate, arrangements have been made on commercially
reasonable terms for such services, means of transportation,
facilities and other materials.
3.17 Compliance with Building Codes, Zoning Laws,
etc. The Project is in all material respects in compliance
with all applicable zoning, environmental protection, use and
building codes, laws, regulations and ordinances. The
Partnership has no knowledge of any material violations of any
laws, ordinances, codes, requirements or orders of any
Governmental Authority affecting the Project.
3.18 Principal Place of Business, etc. The
principal place of business and chief executive office of each
of the Partnership and the General Partner and the office where
each of the Partnership and the General Partner keeps its
records concerning the Project and all contracts relating
thereto is located at 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxx 00000; provided that certain records concerning the
Project and certain contracts relating thereto are kept at the
Partnership's office at 0000 X. Xxxxx Xxxxxxx, Xxxxx Xxxxxxxx
(Xxxxxx Xxxxxx'x Xxxxxx), Xxxxxxxx 00000 or at the Site.
3.19 Description of Property. The descriptions set
forth in the Deed of Trust and Security Agreement of the Site,
the Easements and the Facility are true and accurate in all
material respects, and are adequate for the purpose of
establishing, preserving, protecting and perfecting the
interests and rights, and the first priority of the liens
(subject only to Permitted Liens), intended to be created and
provided in such property by the Deed of Trust and Security Agreement.
3.20 Public Utility Status. (a) As long as the
Facility is a Qualifying Facility, neither the Partnership nor
the General Partner nor the Limited Partner will, solely by
reason of (i) the ownership (or leasing), operation or
maintenance of the Project by the Partnership (including
operation or maintenance by an agent of the Partnership) or
(ii) any other transaction contemplated by this Agreement or
any other of the Transaction Documents, be: (i) subject to
regulation under Part II or III of the Federal Power Act,
except for Sections 202(c), 210, 211, 212, 213, 214 and 305(c)
of the Federal Power Act (16 U.S.C. 824a(c), 824i, 824j, 824k,
824l, 824m and 825d(c), respectively) and the enforcement
provisions of Part III of the Federal Power Act relating
thereto; (ii) an "electric utility company" for purposes of the
Holding Company Act; (iii) subject to state law or regulation
respecting the rates of electric utilities or state law or
regulation respecting the financial and organizational
regulation of electric utilities (except for state law or
regulation implementing Subpart C of 18 C.F.R. Part 292); or
(iv) subject to regulation as a "steam heating company" under
Article 78, Public Service Commission Law, of the Annotated
Code of Maryland.
(b) As long as the Facility is a Qualifying
Facility, none of the Owner Trustee nor GE Capital nor any of
GE Capital's Affiliates will be a Public Utility solely by
reason of (i) the ownership (or leasing), operation or
maintenance of the Project by the Partnership (including
operation or maintenance by an agent of the Partnership), (ii)
the making of the Loans, (iii) the securing of the Obligations
by Liens on the Collateral, (iv) the Owner Trustee's ownership
of the Facility as contemplated by subsection 5.2 hereof or (v)
any other transaction contemplated by this Agreement or any
other Transaction Document (other than any transaction
described in subsection 3.20(c) hereof).
(c) None of the Owner Trustee, the Security Agent,
GE Capital nor any of GE Capital's Affiliates will, solely by
reason of the Security Agent's, the Owner Trustee's, GE
Capital's or any such Affiliate's ownership or operation of the
Project upon the exercise of remedies under the Collateral
Security Documents, be: (i) subject to regulation under Part II
or III of the Federal Power Act, except for Sections 202(c),
210, 211, 212, 213, 214 and 305(c) of the Federal Power Act (16
U.S.C. 824a(c), 824i, 824j, 824k, 824l, 824m and 825d(c),
respectively) and the enforcement provisions of Part III of the
Federal Power Act relating thereto; (ii) an "electric utility
company" for purposes of the Holding Company Act; (iii) subject
to state law or regulation respecting the rates of electric
utilities or state law or regulation respecting the financial
and organizational regulation of electric utilities (except for
state law or regulation implementing Subpart C of 18 C.F.R.
Part 292); or (iv) subject to regulation as a "steam heating
company" under Article 78, Public Service Commission Law, of
the Annotated Code of Maryland; provided, that (x) (as a result
of any transaction other than the transactions contemplated by
the Transaction Documents) none of the Owner Trustee, the
Security Agent nor GE Capital nor any such Affiliate owning or
operating the Project is for purposes of the PURPA Regulations
an "electric utility" or an "electric utility holding company"
or a wholly or partially-owned direct or indirect subsidiary of
an "electric utility" or "electric utility holding company" and
(y) the Facility is operated in compliance with the
requirements set forth in the PURPA Regulations for the
Facility to be a Qualifying Facility.
3.21 Material Agreement and Licenses. No licenses,
trademarks, patents or agreements with respect to the usage of
technology (other than any thereof which have been obtained and
are in full force and effect and have been assigned to the
Security Agent) are necessary for the construction, ownership,
operation and maintenance of the Project.
3.22 Sufficiency of Project Documents. The services
to be performed, the materials to be supplied and the leasehold
and other property interests, license agreement(s), easement(s)
and other rights granted pursuant to the Project Documents and
the Easement Agreements:
(a) will comprise substantially all of the services,
materials and property interests required for the
acquisition, development, construction, installation,
completion, operation and maintenance of the Project in
accordance with all Applicable Laws and the Project
Documents; and
(b) will provide adequate ingress and egress from
the Site for any reasonable purpose in connection with the
construction, operation and maintenance of the Facility
(including, without limitation, access for transportation
of Fuel and water to, and electricity, water and steam
from, the Site).
There will then be no services, materials or rights required
for the construction, operation or maintenance of the Facility
in accordance with the Project Documents, other than (x) those
granted by or to be provided by or on behalf of the Partnership
pursuant to the Project Documents or (y) those that can
reasonably be expected to be commercially available at the Site
when required.
3.23 Representations and Warranties. The
representations and warranties of the Reporting Participants
contained in the Transaction Documents other than this
Agreement are true and correct, and the Partnership and the
General Partner hereby confirm each such representation and
warranty with the same effect as if set forth in full herein.
3.24 Location of Site. Except as disclosed in
Schedule 8, the Site and the Easements do not lie within an
area of "special flood hazard" as that term is defined in 44
Code of Federal Regulations Section 59.1.
3.25 Environmental Matters. (a) Except as
disclosed in Schedule 8 or in the Environmental Audit on or
prior to the execution and delivery of this Agreement:
(i) no Environmental Proceeding, notice,
notification, demand, request for information, citation,
summons or order has been issued, no complaint has been
filed, no penalty has been assessed, and to the actual or
constructive knowledge of the Partnership, no
investigation or review is pending or threatened by any
Governmental Authority or other Person:
(A) with respect to any violation or
alleged violation of any Environmental Law in
connection with the property, operations or conduct
of business of the Partnership or of the Project; or
(B) with respect to any failure to have
any Governmental Action relating to Hazardous
Substances or any Environmental Law required in
connection with the property, operations or conduct of
the business of the Partnership or of the Project in
violation of any Environmental Law; or
(C) with respect to the presence, use,
handling generation, treatment, storage, recycling,
transportation, emission, spill, leak, seepage,
discharge, release, threatened release or disposal of
any Hazardous Substance generated by the operations or
business of the Partnership or the Project or located
on, under or at any property of the Partnership or the
Project.
(ii) neither the Partnership nor the businesses
conducted by the Partnership has committed any material
violation of any applicable Environmental Law or engaged in
any conduct which would give rise to any material liability
to the Project, any Participant, the Owner Trustee or GE
Capital under any applicable Environmental Law and there are
no circumstances which could reasonably be expected to
prevent or interfere with material compliance by the
Partnership or the Project with any applicable Environmental
Law in the future;
(iii) no Person has committed any violation of any
applicable Environmental Law or engaged in any conduct which
would give rise to any material liability to the Partnership,
any Participant, the Owner Trustee, GE Capital or the Project
under any applicable Environmental Law while owning,
operating, leasing or occupying the Project;
(iv) neither the Partnership nor the businesses
conducted by the Partnership, nor any other Person, has
placed, held, located, released or disposed of any Hazardous
Substance on, under or at any property now or previously
owned, operated, leased, occupied or otherwise used by the
Partnership (including the Project) in such quantities or
conditions so as to require any material investigation,
study, sampling, testing, removal, response, remediation or
other action of any kind which has not yet been taken, or
result in any material liability to the Partnership, any
Participant, GE Capital, the Owner Trustee or the Project
under any applicable Environmental Law and none of such
properties has been used by the Partnership, or any other
Person, as a site for the material dumping or other disposal
of any kind of any Hazardous Substance or in material
violation of any applicable Law or Environmental Law,
including, without limitation, any such law relating to use
of a property as a storage site (whether permanent or
temporary) for any Hazardous Substance;
(v) no Hazardous Substance is or has been present
at any property now or previously owned, operated, leased,
occupied or otherwise used by the Partnership (including the
Project) in such quantities or conditions so as to require
any material investigation, study, sampling, testing,
removal, response, remediation or other material action of
any kind which has not yet been taken or result in any
material liability to the Partnership, any Participant, GE
Capital, the Owner Trustee or the Project under any
applicable Environmental Law;
(vi) there are no underground storage tanks,
active or abandoned or removed, which have been used to store
or have contained any Hazardous Substance at any property now
or previously owned, operated, leased or occupied by the Partnership
(including the Project);
(vii) no Hazardous Substance has been released at,
on or under any property now or previously owned, operated,
leased, occupied or otherwise used by the Partnership
(including the Project) in such quantities or conditions so
as to require any material investigation, study, sampling,
testing, removal, response, remediation or other material
action of any kind which has not yet been taken or result in
any material liability to the Partnership, any Participant,
GE Capital, the Owner Trustee or the Project under any
applicable Environmental Law; and
(viii) no Hazardous Substance is present in a
reportable or threshold planning quantity, where such a
quantity has been established by Applicable Law as a quantity
sufficient to require any reporting or notification to any
Governmental Authority, investigation, study, sampling,
testing, removal, response, remediation or other action of
any kind at, or result in any material liability to the
Partnership, any Participant, GE Capital, the Owner Trustee
or the Project under any applicable Environmental Law, on or
under any property now or previously owned, operated, leased,
occupied or otherwise used by the Partnership (including the
Project).
(b) Neither the Partnership nor any business conducted
by it has generated, transported, disposed or arranged for the
transportation or disposal (directly or indirectly) of any
Hazardous Substance to any location which is listed or proposed
for listing under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA") National
Priorities List ("NPL"), the Comprehensive Environment Response,
Compensation and Liability Information System ("CERCLIS") or any
similar state list or which is the subject of federal, state or
local enforcement actions or other investigations or to any other
location or in any manner that could result in material liability
to the Partnership under any applicable Environmental Law.
(c) No property now or previously owned, operated,
leased, occupied or otherwise used by the Partnership (including
the Project) is listed or, to the knowledge of the Partnership,
proposed for listing on the NPL promulgated pursuant to CERCLA, or
CERCLIS, or any similar state list of sites requiring
investigation or cleanup, nor does the Partnership know of any
facts or circumstances which would support any such listing of any
such property.
(d) There are no environmental liens on the
Partnership's interest in any property owned or leased by the
Partnership (including the Project) and the Partnership has not
received any written notice of any actions taken by any
Governmental Authority which could subject any of such properties
to such liens.
(e) Notwithstanding the foregoing, the disclosure, if
any, in any Environmental Audit of any fact or circumstance which
would render any of the foregoing representations untrue shall not
otherwise relieve the Partnership of its obligations under
subsections 6.24, 6.25 and 7.20.
(f) The Partnership has not assumed, contractually or
by operation of Law (other than pursuant to Subsection 16.1(c) of
the Power Purchase Agreement and certain of the other Project
Documents), any liabilities or obligations under any Environmental
Law.
(g) There are no past or present actions, activities,
events, conditions or circumstances relating to the Partnership,
the Site or the Project, including without limitation the release,
threatened release, emission, discharge, generation, treatment,
storage or disposal of Hazardous Substances, that could give rise
to any material liability under any Environmental Law or any
contract or agreement.
3.26 Fuel Supply. The amount and quality of natural
gas which the Gas Supplier is obligated to deliver to the Facility
pursuant to the Gas Supply Contract satisfy the requirements of
Subsection 11.2 of the Power Purchase Agreement and are sufficient
to permit the operation of the Facility in accordance with the
obligations of the Partnership under the Power Purchase Agreement
for a period of at least 15 years.
3.27 Qualifying Facility. FERC has issued an order
(the "QF Certification Order") granting the Partnership's
application (the "QF Certification Application") for certification
of the Facility as a Qualifying Facility, and the QF Certification
Order is in full force and effect and is not the subject of any
pending or, to the Partnership's knowledge, threatened
administrative or judicial proceedings. The Facility, when
constructed, owned and operated in the manner contemplated by the
Transaction Documents, the QF Certification Order and the QF
Certification Application, will be a Qualifying Facility and will
be eligible for the benefit of the exemptions provided by 18
C.F.R. 292.601(c), 292.602(b) and 292.602(c). The manner in
which the QF Certification Order and the QF Certification
Application contemplate that the Facility will be constructed,
owned and operated does not differ in any material respect from
the manner in which the Transaction Documents contemplate that the
Facility will be constructed, owned and operated, except for the
Owner Trustee's ownership of the Facility as contemplated by
subsection 5.2 hereof.
3.28 Completion of Project. The Partnership has no
reason to believe that (a) Substantial Completion of the Facility
will not occur on or before the Construction Loan Maturity Date or
(b) Project Costs for any Budget Category will exceed amounts
budgeted therefor in the Approved Budget.
The Partnership and the General Partner shall make (or
be deemed to have made) the representations and warranties set
forth in this Section 3 as of the Initial Loan Funding Date, each
Borrowing Date (or other date on which an extension of credit is
requested hereunder) thereafter, on the Lease Closing Date and on
the Date of Final Completion (and on each other date on which a
Partnership Equity Loan is requested to be made thereafter).
Section 4. CONDITIONS PRECEDENT TO LOANS
4.1 Conditions of Initial Loan. The obligation of GE
Capital to make its initial Loan hereunder and to issue the
Letters of Credit is subject to the fulfillment to the
satisfaction in form and substance of, or waiver by, GE Capital of
each of the conditions precedent set forth in subsection 4.2 and
each of the following conditions precedent:
(a) Notice of Initial Loan Funding. GE Capital shall
have received the Notice of Initial Loan Funding, duly
executed by an Authorized Officer of the Partnership, three
Business Days prior to the proposed Initial Loan Funding
Date.
(b) Note. GE Capital shall have received the Note
conforming to the requirements hereof, dated as of the
Initial Loan Funding Date and duly executed and delivered by
the Partnership.
(c) Title Insurance; Survey. GE Capital shall have
received (i) a policy of title insurance issued by the Title
Company, in form and substance satisfactory to GE Capital,
with such endorsements and affirmative coverage as
GE Capital may reasonably request and with such reinsurance
(with direct access provisions) and/or coinsurance as
GE Capital may request, insuring the Security Agent, for the
benefit of the Owner Trustee and GE Capital, in the amount of
$130,000,000, that the Deed of Trust and Security Agreement
constitutes a valid first mortgage lien on the Partnership's
interest in the Site and the Partnership's interest in the
Easements, subject only to Permitted Liens; and (ii) a survey
of the Site by a licensed surveyor satisfactory to GE Capital
and the Title Company, certified to GE Capital and the Title
Company, showing no state of facts unsatisfactory to GE
Capital, which survey shall be made in accordance with the
"Minimum Standard Detail Requirements" for ALTA/ACSM Land
Title Surveys jointly established and adopted by the American
Title Association and the American Congress on Surveying and
Mapping in 1992 and shall include all of the specifications
included in "Table A-Optional Survey Responsibilities and
Specifications." GE Capital shall have received evidence
that the premium in respect of such policy has been paid.
(d) Legal Opinions. GE Capital shall have received
the following opinions of counsel, each dated the Initial
Loan Funding Date:
(i) the opinion of Xxxxxxxxxx & Xxxxx, counsel to
the Partnership, the General Partner, the Limited Partner
and Holdings, substantially in the form of Exhibit Y-1;
(ii) the opinion of Xxxxx & Xxxxxx, special Maryland
counsel to the Partnership, the General Partner, the Limited
Partner and Holdings, substantially in the form of Exhibit Y-2;
(iii) the opinion of Piper & Marbury, special Maryland
counsel to GE Capital, substantially in the form of Exhibit Y-3;
(iv) the opinion of Xxxxxxxx and Xxxxxx, special Texas
counsel to GE Capital, substantially in the form of Exhibit Y-4;
(v) the opinion of counsel to each Participant (other
than the Partnership and its Affiliates) with respect to its
obligations under the Project Document to which it is a party,
substantially in the form of Exhibit Y-5;
(vi) the opinion of Venable, Baetjer, Xxxxxx & Civiletti,
special counsel to the Partnership, substantially in the form
of Exhibit Y-6;
(vii) the opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, special
tax counsel to GE Capital, substantially in the form of Exhibit Y-7;
(viii) the opinion of Xxxxxxx and Berlin, special regulatory
counsel to GE Capital, substantially in the form of Exhibit Y-8; and
(ix) the opinion of Xxxxxxx & Xxxxxxx, counsel to the Owner
Trustee and the Security Agent, substantially in the form of Exhibit Y-9.
Such opinions shall also cover such other matters incident
to the transactions contemplated by this Agreement and the
other Transaction Documents as GE Capital may reasonably
request.
(e) Trust Agreement. GE Capital shall have received
the Trust Agreement, in form and substance satisfactory to
it, duly executed and delivered by the Owner Trustee.
(f) Collateral Security Documents. GE Capital shall
have received each of the following, in form and substance
satisfactory to it, duly executed and delivered by the
Security Agent and the Partnership (or the Partners or
Holdings, as the case may be) or, in the case of the
Consents to Assignment, the appropriate Participant:
(i) the Deed of Trust and Security Agreement;
(ii) the Security Deposit Agreement;
(iii) the General Partner Pledge Agreement;
(iv) the Limited Partner Pledge Agreement;
(v) the Stock Pledge Agreement;
(vi) each Assignment of the agreements set forth below:
(A) Construction Contract (together with the Parent
Guaranty of Raytheon Company)
(B) Power Purchase Agreement (and Transfer Agreement)
(C) Gas Supply Contract and Fuel Management Agreement
and Gas Supply Guaranty and Fuel Management Guaranty
(D) Columbia Precedent Agreement (together with a
supplementary letter regarding payments) and Columbia FTS
Agreement
(E) CLNG Agreement
(F) Washington LDC Agreement
(G) Steam Agreements
(H) Operation and Maintenance Agreement
(I) Effluent Water Agreement;
(vii) each Consent to Assignment of the agreements set forth below:
(A) Construction Contract
(B) Power Purchase Agreement (and Transfer Agreement)
(C) Gas Supply Contract and Fuel Management Agreement
(D) Gas Supply Guaranty and Fuel Management Guaranty
(E) Columbia Precedent Agreement and Columbia FTS Agreement
(F) CLNG Agreement
(G) Washington LDC Agreement
(H) Steam Agreements
(I) Operation and Maintenance Agreement
(J) Effluent Water Agreement; and
(viii) the Security Agreement.
(g) Power Purchase Agreement. GE Capital shall have
received a true and complete copy of the Power Purchase
Agreement in form and substance satisfactory to it, certified
by the Partnership as such on the Initial Loan Funding Date.
The Maryland Commission shall have issued an order approving
the First Amendment, dated as of September 16, 1994, to the
Power Purchase Agreement between the Partnership and the Power
Purchaser (the "First Amendment"), and such order shall have
become final and nonappealable, and the Power Purchaser shall
have notified the Partnership pursuant to Section 3.1(b)(iii)
of the First Amendment that such order is satisfactory in form and
substance to the Power Purchaser. GE Capital shall have
received from the Power Purchaser the PEPCO Closing Certificate,
satisfactory in form and substance to GE Capital.
(h) Construction Contract. GE Capital shall have
received a true and complete copy of the Construction
Contract (together with the executed Parent Guaranty of
Raytheon Company) in form and substance satisfactory to it,
certified by the Partnership as such on the Initial Loan
Funding Date. Raytheon Company shall have executed an
acknowledgment of assignment of its Parent Guaranty to GE
Capital.
(i) Steam Agreements. GE Capital shall have received a
true and complete copy of each of the Steam Sales Agreement
and the Steam Lessee Security Agreement in form and substance
satisfactory to it, certified by the Partnership as such on
the Initial Loan Funding Date.
(j) Gas Contracts. GE Capital shall have received true
and complete copies of the Gas Supply Contract, the Gas
Supply Guaranty, the Fuel Management Agreement (together with
the Fuel Management Guaranty) and the Gas Transportation
Contracts, certified by the Partnership as such on the
Initial Loan Funding Date.
(k) Operation and Maintenance Agreement. GE Capital
shall have received a true and complete copy of the Operation
and Maintenance Agreement in form and substance satisfactory
to it, certified by the Partnership as such on the Initial
Loan Funding Date.
(l) Effluent Water Agreement. GE Capital shall have
received a true and complete copy of the Effluent Water
Agreement in form and substance satisfactory to it, certified
by the Partnership as such on the Initial Loan Funding Date.
(m) Partnership Agreement; Formation Documents.
GE Capital shall have received a true and complete copy of
each of the Partnership Agreement, the Certificate of
Limited Partnership of the Partnership and the Certificate of
Incorporation and By-laws of each of the Partners, certified
by the Partnership as such on the Initial Loan Funding Date.
(n) Project Schedule; Approved Budget. GE Capital
shall have received from the Partnership (a) the Project
Schedule, in form and substance satisfactory to it (after
consultation with GE Capital's Representative), and (b) the
Approved Budget, in form and substance satisfactory to it
(after consultation with GE Capital's Representative), for
all anticipated costs to be incurred in connection with the
construction and start-up of the Project, including in such
budget all construction and non-construction costs, and
including, without limitation, all interest, taxes and other
carrying costs, and such other information as GE Capital may
request. The Approved Budget will contain an appropriate
number of budget categories (each such category a "Budget
Category") and will detail the drawdowns to date in each
Budget Category and the projected timing and value of each of
the remaining drawdowns in each Budget Category and the total
amount for each Budget Category (the "Budget Category
Amount").
(o) Letter of Credit Pledge Agreements; Ascending
Letter of Credit and Overfunding Letter of Credit. GE
Capital shall have received the Ascending Letter of Credit
Pledge Agreement and the Overfunding Letter of Credit Pledge
Agreement, each in form and substance satisfactory to GE
Capital and duly executed and delivered by the Partnership
and the Security Agent. The Ascending Letter of Credit and
the Overfunding Letter of Credit shall have been issued and
assigned to the Security Agent for the benefit of the Owner
Trustee and GE Capital pursuant to the Ascending Letter of
Credit Pledge Agreement and the Overfunding Letter of Credit
Pledge Agreement, respectively, and a Transfer Certificate in
respect of each thereof shall have been delivered to the
Security Agent.
(p) Site Lease; Site Sublease. GE Capital shall have
received each of the Site Lease and Site Sublease, duly
executed and delivered by the Partnership and the Owner
Trustee.
(q) GE Capital's Representative's Report. GE Capital
shall have received a report, in form and substance
satisfactory to GE Capital, of GE Capital's Representative,
in form and substance satisfactory to GE Capital, with
respect to the construction and operation of the Facility,
covering the Approved Budget, the Project Schedule, the
construction plan and responsibilities, equipment selection,
probable performance of the Facility, the expected operating
specifications of the Facility (including expected operating
and maintenance costs, capacity, downtime and generating
efficiencies of the Facility), the major maintenance and
overhaul plan for the Facility, the water supply for the
Facility, the technical ability of the Facility to respond to
the dispatch requirements contained in the Power Purchase
Agreement, the permitting requirements of the Facility and
such other matters with respect to the Facility and the
Project as shall be requested by GE Capital.
(r) Perfection of Liens and Security Interests. All
filings, recordings and other actions (including all filings
and recordings set forth in Schedule 3) that are necessary or
desirable in order to establish, protect, preserve and
perfect the Security Agent's lien on and perfected security
interest in all right, title, estate and interest of the
Partnership, the Partners and Holdings in and to the
Collateral, prior and superior to all other Liens, existing
or future, except Permitted Liens, shall have been duly made
or taken and all fees, taxes and other charges relating to
such filings and recordings and other actions shall have been
paid by the Partnership. The Security Agent shall have a
first lien on and prior perfected security interest in all
right, title, estate and interest of the Partnership in and
to the Collateral prior and superior to all other Liens
including existing mechanics' and materialmen's liens, except
Permitted Liens. GE Capital shall have received
authenticated copies or other evidence of all filings,
recordings and other actions obtained or made in order to
create and perfect such first lien on and perfected security
interest in the right, title, estate and interest of the
Partnership in and to the Collateral.
(s) Fees. GE Capital shall have received the fees
referred to in subsections 2.5(a) and 2.11(a).
(t) Insurance Coverage. GE Capital shall have received
binders for, or other evidence satisfactory to
GE Capital (including, if requested by GE Capital,
certificates of insurers, independent brokers and the
Partnership) of the maintenance of and payment of premiums
with respect to the insurance required to be maintained by
the Partnership pursuant to the provisions of this Agreement,
the Deed of Trust and Security Agreement, the Security
Agreement, the Power Purchase Agreement and the other
Transaction Documents.
(u) Preliminary Appraisal. GE Capital shall have
received the preliminary written appraisal from Appraisal
Economics, Inc. which shall state that (i) Lessor's Cost (as
assumed on Schedule 6) is equal to the Fair Market Sales
Value of the Facility, (ii) the Facility has an estimated
useful life of at least 25 years, (iii) the Facility will
have a residual value at the end of the Basic Term of not
less than twenty percent (20%) of Lessor's Cost (without
giving effect to inflation or deflation) and (iv) it is
commercially feasible for a party other than Lessee to use
the Facility at the end of the Basic Term.
(v) Notice to Proceed. The Partnership shall have
notified the Contractor of the occurrence of the Initial Loan
Funding Date pursuant to Section 2.02 of the Construction
Contract (the "Notice to Proceed").
(w) Easement Agreements. GE Capital shall have
received a true and complete copy of each Easement Agreement
(except for those set forth on Part B of Schedule 2 which are
to be obtained after the Initial Loan Funding Date) in form
and substance satisfactory to it, certified by the
Partnership as such on the Initial Loan Funding Date. Each
counterparty to an Easement Agreement shall have executed a
consent to assignment of its Easement Agreement to the
Security Agent, for the benefit of GE Capital and the Owner
Trustee.
(x) Steam Host Arrangements; Qualifying Facility
Status. GE Capital shall have received information from the
Partnership, to its satisfaction, as to the steam host
arrangements of the Project and available mitigation to the
risk of the Facility losing its status as a Qualifying
Facility.
(y) Subcontractors; Suppliers. GE Capital shall have
received from the Partnership a list of all major
subcontractors and suppliers for the construction and
operation of the Project, which list shall be satisfactory to
GE Capital.
(z) Governmental Actions. GE Capital shall have
received originals (or copies certified to be true copies by
an Authorized Officer of the Partnership) of (i) all
Governmental Actions set forth in Part A of Schedule 2 and
(ii) such other Governmental Actions as GE Capital may
reasonably request and that in the reasonable opinion of GE
Capital are necessary or desirable under Applicable Law in
connection with the transactions contemplated by the
Transaction Documents. GE Capital shall have received an
Officer's Certificate of the Partnership to the effect that
(A) the copies of such Governmental Actions, if any,
delivered to GE Capital are true, correct and complete copies
of such Governmental Actions (B) each Governmental Action set
forth in Part A of Schedule 2 is in full force and effect and
final and non-appealable and (c) the Partnership expects that
each Governmental Action set forth in Part B of Schedule 2
that has not been obtained will be obtainable in due course
prior to the date set forth with respect to such Governmental
Action in Part B of Schedule 2.
(aa) No Material Adverse Change. In the opinion of GE
Capital, (i) no material adverse change in the financial
condition, business or operations or prospects of the Project
or any Participant shall have occurred since the Development
Loan Closing Date, and (ii) no other event shall have
occurred since the Development Loan Closing Date which could
reasonably be expected to have a Material Adverse Effect.
(bb) No Material Tax Change. In the opinion of GE
Capital, no material tax change shall have occurred since the
Development Loan Closing Date which might reasonably be
expected to affect the Lease Financing in a manner adverse to
the Lessor.
(cc) Litigation. No litigation, proceeding or
investigation shall be pending, entered or threatened by any
Governmental Authority or any person (i) against the
Partnership, the Project, any Participant or any related
party or (ii) which could reasonably be expected to prevent
or enjoin any Participant from performing its obligations
under any Transaction Document.
(dd) Financial Statements. GE Capital shall have
received and be satisfied with (i) unaudited financial
statements for the Partnership, the General Partner and
Holdings and audited financial statements for Panda, in each
case for the most recently completed fiscal year of such
Person, (ii) financial statements for such Person for the
most recently completed fiscal quarter of such Person, and
(iii) such other financial information regarding such Person
as GE Capital may reasonably request.
(ee) Pledged Stock. The Security Agent shall have
received the original stock certificates evidencing the stock
pledged pursuant to the Stock Pledge Agreement, together with
undated stock powers duly executed in blank in connection
therewith.
(ff) Record Searches. A search, made no more than 30
days prior to the Initial Loan Funding Date, of the Uniform
Commercial Code filing offices or other registers in each
jurisdiction in which any of the Partnership, the Partners,
the Steam Host or Panda has an office or in which assets of
the Partnership, the Partners or Panda are located, as
certified by an Authorized Officer of the Partnership, shall
have revealed no filings or recordings with respect to any of
the Collateral in favor of any Person other than GE Capital,
as Agent under the Development Loan Agreement. GE Capital
shall have received a copy of the search reports received as
a result of such search. GE Capital shall have also received
satisfactory reports of federal and state tax lien searches
conducted by a search firm acceptable to GE Capital with
respect to the Partners and Holdings.
(gg) Taxes. GE Capital shall have received evidence
satisfactory to it that all Taxes, if any, payable on or
prior to the Initial Loan Funding Date in connection with the
execution, delivery, recording and filing of the Transaction
Documents and the documents and instruments described in
Schedule 3 (including all applicable transfer, sales and
recordation taxes) or in connection with the consummation of
any other transaction contemplated hereby or by the other
Transaction Documents shall have been paid in full.
(hh) Gas Supply Assessment. GE Capital shall have
received a satisfactory review of the fuel supply and
transportation arrangements, prepared by the Fuel Consultant
covering such matters with respect to the fuel supply to the
Project as GE Capital may request.
(ii) Projections. GE Capital shall have received from
the Partnership operating projections for the Project (the
"Operating Projections"), setting forth projections of
revenues, operating and other expenses and cash flows of the
Project for each operating year, in such detail and based
upon such assumptions as shall be satisfactory to GE Capital
(after consultation with GE Capital's Representative), which
Operating Projections shall be substantially in the form of
Schedule 9 and otherwise satisfactory in substance to GE
Capital.
(jj) Environmental Information. GE Capital shall have
received such information (including, without limitation, the
Environmental Audit and a letter of reliance entitling GE
Capital to rely on the Environmental Audit as if it had been
delivered to GE Capital) as to the past ownership and use of
the Site and environmental conditions at and about the Site,
and as to any Governmental Action as GE Capital may have
requested; and such information shall not disclose any
environmental risks associated with the Site or the Project
unacceptable to GE Capital.
(kk) Authorizing Actions. All partnership and
corporate proceedings in connection with the transactions
contemplated by this Agreement and the other Transaction
Documents, and all documents and instruments incident
thereto, shall be satisfactory in form and substance to
GE Capital and its counsel; and GE Capital and its counsel
shall have received such counterpart originals or certified
or other copies of all such documents and instruments and of
all records of partnership and corporate proceedings in
connection with such transactions, and such incumbency and
signature certificates of officers of the Participants, as GE
Capital or its counsel may reasonably request.
(ll) Distilled Water Facility Business Plan. GE
Capital shall have received from the Partnership the
Distilled Water Facility Business Plan, in form and substance
satisfactory to GE Capital.
(mm) Fuel Management Plan. GE Capital shall have
received from the Partnership the Fuel Management Plan, in
form and substance satisfactory to GE Capital.
4.2 Conditions to All Loans. The obligation of
GE Capital to make any Loan (including, without limitation, the
initial Loan), to issue the Letter(s) of Credit and to make any
other extension of credit hereunder is subject to (in addition to
the fulfillment of the conditions precedent set forth in
subsection 4.1) the fulfillment to the satisfaction of, or waiver
by, GE Capital on the Borrowing Date with respect to such Loan of
the following conditions precedent:
(a) Governmental Actions and Other Consents and
Approvals. All Governmental Actions and other consents and
approvals referred to in subsection 3.5, including, without
limitation, those listed in Part B of Schedule 2 which were
not required to be obtained prior to the Initial Loan Funding
Date but which were required to be obtained by the respective
dates specified in Schedule 2, shall have been duly obtained
or made and shall be in full force and effect on or prior to
any Borrowing Date occurring on or after the date specified
for the receipt of such consent or approval in Schedule 2,
and shall not then be subject to appeal or judicial,
governmental or other review and a copy of each such
Governmental Action, consent and approval shall have been
delivered to GE Capital.
(b) Qualifying Facility. The representation made in
subsection 3.27 hereof shall continue to be true and correct.
(c) No Change in Law. No change shall have occurred
after the Initial Loan Funding Date in any Law or in the
interpretation thereof by any Governmental Authority charged
with the administration or interpretation thereof (i) which,
in the reasonable judgment of GE Capital, would make
GE Capital's or the Owner Trustee's participation in the
transactions contemplated hereby illegal or subject the Owner
Trustee or GE Capital or any of its Affiliates to any
material incremental governmental regulation in connection
with such transactions or (ii) which, in the reasonable
judgment of GE Capital, would require the cancellation,
suspension or termination of any of the Transaction
Documents, which cancellation, suspension or termination, in
the reasonable judgment of GE Capital, could reasonably be
expected to have a Material Adverse Effect.
(d) No Material Adverse Change, etc. In the reasonable
judgment of GE Capital, (i) no material adverse change in the
financial condition, business or operations or prospects of
the Partnership or the General Partner or the Project
(including, without limitation, no material adverse change in
the Approved Budget or the Operating Projections) shall have
occurred since the Initial Loan Funding Date, and (ii) no
other event (including, without limitation, a material
adverse change in the financial condition, business or
operations of any Participant) shall have occurred since
the Initial Loan Funding Date which might reasonably be
expected to have a Material Adverse Effect.
(e) Payment of Project Costs. The amount of the Loan
requested by the Partnership on such Borrowing Date shall not
exceed the Project Costs due and to be paid on such Borrowing
Date as such Project Costs are set forth in the relevant Cost
Certificate, and all Project Costs specified as due and
payable in the Borrowing Certificate and the Cost Certificate
with respect to such Loan or disbursement shall be paid with
the proceeds thereof.
(f) Evidence of Project Costs; Lien Waivers; Ascending
Letter of Credit. At least ten Business Days prior to such
Borrowing Date, GE Capital and GE Capital's Representative
shall have received a copy of the Contractor's monthly
application for payment under the Construction Contract,
together with (i) copies of all third-party invoices and
other statements of charges with respect to the payment to be
made to the Contractor pursuant to the Construction Contract
on such Borrowing Date and with respect to all other items of
Project Costs to be paid on such Borrowing Date, (ii) such
evidence as GE Capital or GE Capital's Representative may
reasonably require that such payments and items of Project
Cost have been properly incurred and are due and payable and
(iii) in the case of GE Capital, a new or amended Ascending
Letter of Credit with an increase in the stated amount
thereof equal to ten percent of the amount shown to be due
and owing to the Contractor in such application (together
with an appropriately completed Transfer Certificate), which
Letter of Credit and Transfer Certificate shall be promptly
delivered to the Security Agent in accordance with the
Ascending Letter of Credit Pledge Agreement. GE Capital and
the Title Company shall have received sworn statements as to
lien waivers from the Contractor and such of its
subcontractors as it shall reasonably require.
(g) Representations and Warranties. The
representations and warranties made by the Partnership or the
General Partner or any other Reporting Participant herein or
in any other Transaction Document to which it is a party, or
which are contained in any certificate, document, financial
or other statement furnished by the Partnership or the
General Partner or any other Reporting Participant hereunder
or thereunder or in connection herewith or therewith shall be
true and correct in all material respects, on and as of such
Borrowing Date as if made on and as of such date, except to
the extent that such representations and warranties relate
solely to an earlier date; provided that if any
representation or warranty made pursuant to subsection 3.25
hereof is not true and correct solely because of the action
or inaction of the Contractor or a sub-contractor then, so
long as (i) the Partnership shall not have contributed to or
otherwise be responsible for such action or inaction, (ii)
there is no material liability to the Project, the
Partnership, GE Capital, the Owner Trustee or any other
Participant (other than the Contractor or such sub-
contractor), (iii) such action or inaction has not caused,
nor could it reasonably be expected to cause, a Material
Adverse Effect and (iv) the Person whose action or inaction
is responsible for the incorrectness of such representation
or warranty is liable for any such matter and, in the
reasonable opinion of GE Capital, is capable of curing such
matter and is diligently proceeding to cure the same, then
the incorrectness of such representation shall not prevent
the Partnership from satisfying the conditions of this
paragraph (g).
(h) No Default or Event of Default; Event of Loss. No
Default or Event of Default shall be in existence on such
Borrowing Date, or shall occur after giving effect to the
Loan to be made on such Borrowing Date. No Event of Loss
shall have occurred.
(i) No Force Majeure, Cancellation, Suspension,
Termination, etc. No event of force majeure, default or
other event or condition shall exist which permits or
requires any party to any of the Project Documents to cancel,
suspend or terminate its performance thereunder in accordance
with the terms thereof or which could excuse any such party
from liability for non-performance thereunder, unless (i) the
parties to such Project Document shall have effectively
waived such right or requirement with respect to such
cancellation, suspension, termination or release from
liability or (ii) in the judgment of GE Capital, such
cancellation, suspension, termination or release from
liability would not have a Material Adverse Effect or delay
the Substantial Completion beyond the Construction Loan
Maturity Date.
(j) Report of GE Capital's Representative. GE Capital
shall have received a report of GE Capital's Representative
dated not more than five days prior to the relevant Borrowing
Date, satisfactory to GE Capital, to the effect that (v)
construction of the Facility is proceeding in accordance with
the Construction Contract and each other EPC Contract, (w) as
of the date of such report, sufficient funds are available
under the Loan Commitment to complete the Project, (x) in its
reasonable judgment, the Commercial Operation Date can and
should occur on or before the Scheduled Commercial Operation
Date and Substantial Completion can and should occur prior to
the Construction Loan Maturity Date, (y) no events or changes
have occurred since the date of the last such report that
would have a material adverse effect on the Project, the
Project Schedule, the Approved Budget or the Contract Sum,
(z) GE Capital's Representative has received and approved each
Borrowing Certificate and each Cost Certificate due in
respect of such Borrowing and (A) does not disagree in any
material respect with any of the statements or calculations
relating to the construction or operation of the Project
contained therein or timely completion of the Project within
the Approved Budget and (B) in the reasonable judgment of GE
Capital's Representative, payments made to each EPC
Contractor and/or any major equipment vendors are customary
and reasonable based upon construction progress, delivery of
equipment and contractual terms.
(k) Borrowing Certificate. GE Capital shall have
received from the Partnership a Borrowing Certificate (with a
Cost Certificate and Project Schedule attached) dated such
Borrowing Date.
(l) Notice of Borrowing. GE Capital shall have
received from the Partnership a Notice of Borrowing
conforming to the requirements of subsection 2.2 hereof three
Business Days prior to the proposed Borrowing Date.
(m) Approved Budget Amount. GE Capital shall be
reasonably satisfied that the proceeds of any such Loan will
not be used to pay Project Costs incurred by or on behalf of
the Project in respect of any Budget Category in excess of
the Budget Category Amount for such Budget Category.
(n) Sufficient Financing. GE Capital shall not have
in good faith determined that the available Loan Commitment
is insufficient to fund the balance of the Project Costs
necessary to achieve Final Completion.
(o) Interest Payments and Fees. The Partnership shall
have paid (or will pay from the proceeds of the Loans to be
made on such Borrowing Date) to GE Capital (i) all accrued
interest and fees to the extent required on such Borrowing
Date, (ii) such other expenses as the Partnership is
obligated to pay pursuant to the Transaction Documents as may
then be due and payable, and (iii) any funds required by GE
Capital to be deposited or delivered to GE Capital pursuant
to this Agreement.
(p) Taxes and Assessments. The Partnership shall have
paid in full (or will pay from the proceeds of Loans)
(i) all installments of special assessments, if any, then due
or payable within 30 days thereafter and (ii) all
installments of general real estate or personal property
taxes not less than 10 days prior to the delinquency date
thereof.
(q) Project Documents. Except as otherwise permitted
pursuant to subsection 7.6, there has been no change,
modification or amendment to any of the Project Documents
without GE Capital's prior written consent and approval.
There shall have been no assignment of Assigned Contracts
other than to the Security Agent, for the benefit of
GE Capital and the Owner Trustee.
(r) Major Subcontractors. GE Capital shall have
received an updated listing of all major subcontractors.
(s) Additional Project Documents. If the Partnership
shall have entered into any Additional Project Document on or
prior to such Borrowing Date, GE Capital shall have received
(i) a true and complete copy of each such Additional Project
Document, certified by the Partnership as such, (ii) an
Assignment relating thereto, (iii) the Consent to Assignment
relating to such Additional Project Document, and (iv) an
opinion of counsel of the parties thereto (unless such
opinion is not available after diligent attempts to procure
the same), in each case in form and substance satisfactory to
GE Capital.
(t) Final Completion, etc. GE Capital shall have
determined that (i) no disputes exist with any EPC Contractor
which could reasonably be expected to have a material adverse
effect on (A) Project Costs or (B) the Partnership's ability
to attain Substantial Completion by the Construction Loan
Maturity Date or to attain Final Completion no later than six
months after the Date of Substantial Completion, and (ii)
there have been no substantial delays which would result in
failure to attain the foregoing.
(u) Notices, Stop-Work Orders. GE Capital shall have
determined that none of the following events will (i) have a
material adverse impact on the construction of the Project or
the cost thereof, or (ii) delay Substantial Completion beyond
the Construction Loan Maturity Date (or delay Final
Completion beyond the date required hereunder):
(A) any assertion or notice by any
Governmental Authority or other Person that the work in
connection with the Project does not comply with any
Applicable Law;
(B) the institution or notice of any
Environmental Proceeding or Adverse Proceeding;
(C) any material delays for any reason in (1)
construction of the Facility or (2) the delivery of
materials or equipment to be supplied under the
Construction Contract; or
(D) any cessation or suspension in the Work
or the construction of the Facility for any reason by
any EPC Contractor.
(v) Title Insurance Continuation. On any Borrowing
Date, GE Capital shall have received from the Title Company a
continuation endorsement (a "Continuation Endorsement") of
the mortgagee's title insurance policy referred to in
subsection 4.1(c) covering the Loan to be made on such date
and indicating that since the date of the most recent
Continuation Endorsement (or the date of the title insurance
policy referred to in subsection 4.1(c) if the Loan to be
made on such date is the first Loan to be made since the
initial Loan made hereunder), there has been no change in the
state of title of the Project (other than a change which
benefits the Partnership) and that there are no Liens
affecting the Project (except Liens for real estate taxes not
yet due and other Permitted Liens) which may take priority
over the Loan then being made or the other Loans made
hereunder; if requested by GE Capital, the Partnership shall
have prepared and shall furnish to the Title Company a survey
of the Site or, if acceptable to the Title Company, an update
to the existing survey of the Site, in form and substance
satisfactory to the Title Company, if the Title Company
requires the same in order to issue the Continuation
Endorsement.
(w) Liens. The Partnership (or the Partners or
Holdings, as the case may be), will, on such Borrowing Date,
have good, marketable and indefeasible title to the Site and
all other Collateral owned by it, in each case free and clear
of all Liens, except Permitted Liens. GE Capital shall have
received lien waivers from each contractor which has provided
goods or services to the Project in an amount greater than
$150,000 prior to such Borrowing Date.
(x) No Notice Under Section 15.3 of Power Purchase
Agreement. The Partnership shall not have received from the
Power Purchaser a notice pursuant to Subsection 15.3(a) of
the Power Purchase Agreement.
(y) Confirmation Certificate. GE Capital shall have
received a Confirmation Certificate in respect of the
proceeds of the Borrowing which was made on the immediately
preceding Borrowing Date.
(z) Additional Matters. All other documents and legal
matters in connection with the transactions contemplated
hereby shall be reasonably satisfactory in form and substance
to GE Capital and its counsel.
Section 5. SALE AND LEASE OF THE FACILITY
5.1 Lease Closing Date. When Substantial Completion has
occurred, the Partnership shall deliver to GE Capital and the
Owner Trustee a Closing Notice in the form of Exhibit G, selecting
a date (the "Lease Closing Date") for the conveyance and transfer
of the Facility to the Owner Trustee which date shall not be
earlier than fifteen Business Days from the date of the Lease
Closing Notice and not later than the Construction Loan Maturity
Date (and, to the extent possible, shall be the last day of a
calendar month). The Lease Closing Notice shall be accompanied by
a Certificate of Lessor's Cost in the form of Exhibit H, setting
forth Lessor's Cost. The closing of the sale and lease of the
Facility on the Lease Closing Date shall take place at the offices
of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, or at such other place as the parties hereto may
agree. The Lease Closing Date specified in the Lease Closing
Notice may be adjourned from time to time as the parties hereto
may agree.
5.2 Actions by the Partnership on the Lease Closing Date.
Upon the satisfaction of all conditions precedent set forth in
subsection 5.6, on the Lease Closing Date, the Partnership shall
assign, bargain and sell to the Owner Trustee all of its right,
title and interest in and to the Facility, by executing and
delivering to the Owner Trustee the Xxxx of Sale, the Lease
Documents to which it is a party and such other documents,
consents, opinions and assignments as are required by this
Agreement to be delivered on the Lease Closing Date. The
obligation of the Partnership to sell the Facility to the Owner
Trustee in accordance with the terms hereof and to otherwise enter
into the transactions contemplated by the Lease Documents shall
survive the payment in full of the Loans and all other amounts
owing hereunder (whether upon the occurrence of an Event of
Default or otherwise), shall be secured by the Collateral Security
Documents and shall be specifically enforceable.
5.3 Actions by GE Capital on the Lease Closing Date. When
all conditions precedent to GE Capital's obligations under this
Section 5 have been satisfied, on the Lease Closing Date, GE
Capital shall (a) on behalf of the Owner Trustee, pay Lessor's
Cost to the Partnership by discharging the principal amount of and
accrued interest on the Note in an amount equal to Lessor's Cost
and (b) cause the Owner Trustee to execute and deliver all of the
Lease Documents to which it is to be a party.
5.4 Lease of Facility. On the Lease Closing Date, the Owner
Trustee and the Partnership will enter into the Facility Lease
pursuant to which the Owner Trustee will lease to the Partnership
and the Partnership will lease from the Owner Trustee, subject to
all of the terms and conditions hereof and of the Facility Lease,
the Facility for the Basic Term, and subject to the exercise by
the Partnership of its renewal option as provided in Sections 12
and 13 of the Facility Lease for one or more renewal terms.
5.5 Conditions Precedent to Obligations of GE Capital. The
obligations of GE Capital to cause the Owner Trustee to purchase
the Facility from the Partnership and lease the same to the
Partnership and the obligation of GE Capital to make available the
Equity Loan Facility pursuant to subsection 5.9 shall be subject
to the fulfillment to the satisfaction of, or waiver by, GE
Capital of the following conditions precedent on or prior to the
Lease Closing Date (and, in the case of the Equity Loan Facility,
on or prior to the Date of Final Completion):
(a) Substantial Completion. The Date of Substantial
Completion shall have occurred, and the Partnership shall
have executed and delivered the Substantial Completion
Certificate.
(b) Closing Notice; Certificate of Lessor's Cost.
GE Capital and the Owner Trustee shall have received the
Lease Closing Notice and the Certificate of Lessor's Cost.
(c) Lease Documents. The following documents shall
have been duly authorized, executed and delivered by the
respective parties thereto (other than GE Capital), and an
executed counterpart of each thereof shall have been
delivered to GE Capital:
(i) Xxxx of Sale;
(ii) Present Assignment;
(iii) Facility Lease;
(iv) Steam Lease; and
(v) Tax Indemnity Agreement.
(d) Legal Opinions. GE Capital shall have received
the following opinions of counsel, each dated the Lease
Closing Date (and, in the case of the Equity Loan Facility,
dated the Date of Final Completion):
(i) the opinion of Xxxxxxxxxx & Xxxxx, counsel to
the Partnership, the General Partner, the Limited Partner
and Holdings, in form and substance satisfactory to GE Capital;
(ii) the opinion of Xxxxx & Xxxxxx or Venable, Baetjer,
Xxxxxx & Civiletti, special Maryland counsel to the Partnership
and the General Partner, in form and substance satisfactory to
GE Capital;
(iii) the opinion of Xxxxxxx & Xxxxxxx, counsel to the Owner
Trustee, in form and substance satisfactory to GE Capital; and
(iv) the opinion of Piper and Marbury, special Maryland counsel
to GE Capital, in form and substance satisfactory to GE Capital,
as to such matters as GE Capital shall request.
Such opinions also shall cover such other matters incident to
the transactions contemplated by this Agreement, the Lease
Documents and the other Transaction Documents as
GE Capital may reasonably request, including with respect to
the opinions of counsel set forth in clauses (i) and (ii), an
opinion that neither GE Capital (nor any Affiliate of GE
Capital) nor the Owner Trustee would be or become a Public
Utility as a result of the execution, delivery and
performance of the Lease Documents and opinions confirming
the validity and perfection of all interests of GE Capital
and the Owner Trustee (and any leveraged lease lenders, if
applicable) and the payment of all applicable filing and
recordation taxes.
(e) Title. The Owner Trustee shall have received from
the Partnership good, valid and indefeasible title in and to
the Facility under the Xxxx of Sale and shall have been
conveyed a valid leasehold interest in the Site and the
Easements pursuant to the Site Lease (except for those
Easements which have been transferred to PEPCO or the County
Commissioners of Xxxxxxx County, Maryland as contemplated by
subsection 9.15 hereof), in all cases free and clear of all
Liens except Permitted Liens.
(f) Requirements under the Power Purchase Agreement.
The "Actual Commercial Operation Date" shall have occurred
under the Power Purchase Agreement and the operation of the
Project shall comply in all other material respects with all
requirements set forth in the Power Purchase Agreement.
(g) Operating Budget. GE Capital shall have received
the Operating Budget for the Project, which shall be in form
and substance reasonably satisfactory to GE Capital.
(h) Title Insurance; Survey. GE Capital shall have
received (i) a policy of title insurance issued by the Title
Company, in form and substance satisfactory to GE Capital,
with such endorsements and affirmative coverage as
GE Capital may reasonably request and with such reinsurance
(with direct access provisions) and/or coinsurance as
GE Capital may request, insuring the Security Agent for the
benefit of the Owner Trustee and GE Capital, in an amount
equal to the maximum secured amount of the Deed of Trust and
Security Agreement, that the Owner Trustee has a valid
leasehold interest in the Site and the Easements pursuant to
the Site Lease, subject only to Permitted Liens; and (ii) an
as-built survey of the Site by a licensed surveyor
satisfactory to GE Capital and the Title Company, certified
to GE Capital and the Title Company, showing no state of
facts which GE Capital reasonably determines to have a
materially adverse effect on the value of the Owner Trustee's
leasehold interest in the Site and the Easements which survey
shall be made in accordance with the standards set forth in
subsection 4.1(c). GE Capital shall have received evidence
that the premium in respect of such policy has been paid.
(i) Authorizing Actions. All partnership, corporate
and other proceedings in connection with the transactions
contemplated by this Agreement and the other Transaction
Documents, and all documents and instruments incident
thereto, shall be satisfactory in form and substance to
GE Capital and its counsel; and GE Capital and its counsel
shall have received such counterpart originals or certified
or other copies of all such documents and instruments and of
all records of partnership and corporate proceedings in
connection with such transactions, and such incumbency and
signature certificates of officers of the Participants, as GE
Capital or its counsel may reasonably request.
(j) Filings and Recordings. All filings, recordings
and other actions that are necessary or desirable in order to
establish, protect, preserve and perfect the Security
Agent's, the Owner Trustee's and GE Capital's right, title,
estate and interest in and to the Facility and the other
Collateral shall have been duly made or taken (including,
without limitation, the Facility Lease, the Site Lease, the
Site Sublease, or memoranda thereof) and all fees, taxes
(including transfer and recordation taxes) and other charges
relating to such filings and recordings and other actions
shall have been paid by the Partnership. The Security Agent,
for the benefit of the Owner Trustee and GE Capital,
shall have a first lien on and prior perfected security
interest in all right, title, estate and interest of the
Partnership in and to the Collateral prior and superior to
all other Liens including existing mechanics' and
materialmens' liens, except Permitted Liens. GE Capital
shall have received authenticated copies or other evidence of
all filings, recordings and other actions obtained or made in
order to create and perfect such first lien on and perfected
security interest in the right, title, estate and interest of
the Partnership in and to the Collateral.
(k) Insurance Coverage. GE Capital shall have received
(i) certified copies of all policies evidencing the insurance
required to be maintained pursuant to the provisions of this
Agreement, the Facility Lease, the Deed of Trust and Security
Agreement, the Security Agreement, the Power Purchase
Agreement and the other Project Documents and (ii) evidence
(including certificates of insurers and independent brokers)
of the payment of all premiums due thereon and that such
insurance complies in all material respects with the
requirements of this Agreement, the Facility Lease, the Deed
of Trust and Security Agreement, the Security Agreement, the
Power Purchase Agreement and the other Project Documents.
(l) Governmental Actions and Other Consents and
Approvals. All Governmental Actions and other consents and
approvals referred to in subsection 3.5, including, without
limitation, those listed on Schedule 2, shall have been duly
obtained or made, shall be in full force and effect and shall
be final and no longer subject to appeal, and a copy of each
such Governmental Action, consent and approval shall have
been delivered to GE Capital.
(m) Qualifying Facility. PURPA shall be in full force
and effect on the Lease Closing Date (and, with respect to
the Equity Loan Facility, on the Date of Final Completion)
without modification in any respect materially adverse to GE
Capital; and the Facility, upon acquisition by the Owner
Trustee and operation as contemplated by the Transaction
Documents, shall be a Qualifying Facility.
(n) No Change in Law. No change shall have occurred
after the Initial Loan Funding Date in any Applicable Law or
in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof (i)
which, in the reasonable judgment of GE Capital, would make
GE Capital's or the Owner Trustee's participation in the
transactions contemplated hereby illegal or subject GE
Capital or the Owner Trustee or any of their respective
Affiliates to any material incremental governmental
regulation in connection with such transactions or (ii)
which, in the reasonable judgment of GE Capital, would
require the cancellation, suspension or termination of any of
the Transaction Documents, which cancellation, suspension or
termination, in the reasonable judgment of GE Capital, could
reasonably be expected to have a Material Adverse Effect.
(o) No Material Adverse Change, etc. In the reasonable
judgment of GE Capital, (i) no material adverse change in the
financial condition, business, operations or prospects of the
Partnership or the General Partner or the Project (including
without limitation, no material adverse change in the
Operating Projections) shall have occurred since the Initial
Loan Funding Date, and (ii) no other event
(including, without limitation, a material adverse change in
the financial condition, business or operations of any
Specified Participant) shall have occurred since the Initial
Loan Funding Date which could reasonably be expected to have
a Material Adverse Effect.
(p) Representations and Warranties. The
representations and warranties made by (i) the Partnership
herein or by the Partnership or any other Reporting
Participant in any other Transaction Document to which it is
a party, or which are contained in any certificate, document,
financial or other statement furnished by the Partnership or
any other Reporting Participant hereunder or thereunder or in
connection herewith or therewith and (ii) each Affiliate of the
Partnership, and to the best knowledge of the Partnership, each
other Specified Participant, in any other Transaction Document or
in any other certificate, document, financial or other statement
furnished by such Affiliate or Specified Participant to the
Partnership or GE Capital in connection with the transaction
herein contemplated, shall be true and correct in all
material respects, on and as of the Lease Closing Date (and,
with respect to the Equity Loan Facility, on and as of the
Date of Final Completion) as if made on and as of such date,
except to the extent that such representations and warranties
relate solely to an earlier date.
(q) No Default or Event of Default; Event of Loss;
Event of Regulation. No Default or Event of Default shall be
in existence. No Event of Loss shall have occurred. No
Event of Regulation shall have occurred.
(r) No Force Majeure, Cancellation, Suspension,
Termination, etc. The Project Documents shall be in full
force and effect. No event of force majeure or other event
or condition shall exist which permits or requires any party
to any of the Project Documents to cancel, suspend or
terminate its performance thereunder in accordance with the
terms thereof or which could excuse any such party from
liability for non-performance thereunder, unless (i) the
parties to such Project Document shall have effectively
waived such right or requirement with respect to such
cancellation, suspension, termination or release from
liability or (ii) in the reasonable judgment of GE Capital,
such cancellation, suspension, termination or release from
liability would not have a Material Adverse Effect.
(s) Tax Opinion. GE Capital shall have received an
opinion, dated the Lease Closing Date, from Xxxxxxx Xxxxxxx &
Xxxxxxxx, special tax counsel for GE Capital, as to such tax
matters as GE Capital may reasonably request.
(t) Lien Searches. GE Capital shall have received UCC
and other lien searches relating to the Project and the
Collateral, showing no Liens other than Permitted Liens and
Liens discharged concurrently with the closing of the
transactions contemplated by the Lease Documents.
(u) Appraisal. GE Capital shall have received the
final written appraisal of a firm chosen by GE Capital, which
appraisal shall be in form and substance satisfactory to it.
(v) Project Costs. Project Costs shall not have
exceeded $215,000,000.
(w) Engineer's Report. GE Capital shall have received
an engineer's report from GE Capital's Representative,
satisfactory in form and substance to it, in respect of the
completion of construction and the operation of the Facility.
(x) Reserve Account. Each Reserve Account shall have
been funded in the amount required pursuant to Section 7 of
the Facility Lease.
(y) Working Capital. GE Capital shall have received
evidence satisfactory to it that the Partnership has on hand
sufficient cash necessary to meet the working capital and
debt service needs of the Project during the period from the
Basic Term Commencement Date through the initial Basic Rent
Payment Date.
(z) Transfer and Recordation Taxes. GE Capital shall
have received evidence satisfactory to it that the
Partnership has paid all applicable Maryland sales, transfer,
filing and recordation taxes.
(aa) Payment of Project Costs. All Project Costs shall
have been paid in full, or escrow arrangements which are
satisfactory to GE Capital shall have been made for the
payment thereof.
(bb) Maryland Commission Order. The Partnership shall
have received the Maryland Commission Order in form and
substance satisfactory to GE Capital.
(cc) GE Capital shall have received an updated Fuel
Management Plan, which plan shall be in form and substance
satisfactory to GE Capital and the Power Purchaser.
5.6 Conditions Precedent to the Obligations of the
Partnership. The obligations of the Partnership to sell the
Facility to the Owner Trustee and to lease the Facility from the
Owner Trustee shall be subject to the fulfillment to the
satisfaction of, or waiver by, the Partnership of the following
conditions precedent on or prior to the Lease Closing Date:
(a) Lease Documents. Each of the Lease Documents shall
have been duly authorized, executed and delivered by the
party or parties thereto (other than the Partnership) and
shall be in full force and effect on the Lease Closing Date,
and the Partnership shall have received an executed
counterpart of each such Lease Document.
(b) No Change in Law. No change shall have occurred
after the date hereof in any Applicable Law or regulation or
in the interpretation thereof by an Governmental Authority
charged with the administration or interpretation thereof
which would make the Partnership's participation in the
transactions contemplated hereby illegal.
5.7 Basic Rent Factors; Stipulated Loss Values; Adjustments.
(a) Based on the assumptions stated in Schedule 6,
the Basic Rent Factors and Stipulated Loss Values from the Basic
Term Commencement Date through the end of the Basic Term shall be
as set forth in Schedule 10.
(b) To the extent that (i) any of the assumptions
stated in Schedule 6 or Section 1(b) of the Tax Indemnity
Agreement are incorrect on the Lease Closing Date, (ii) a Change
in Tax Law occurs on or prior to the Lease Closing Date or
(iii) a Change in Accounting Treatment occurs on or prior to the
Lease Closing Date, the Basic Rent Factors and Stipulated Loss
Values set forth in Schedule 10 shall be adjusted as of the Lease
Closing Date so as to preserve GE Capital's Net Economic Return.
(c) In making any adjustment pursuant to this
subsection 5.7, GE Capital, consistent with the provisions of
Section 3(d) of the Facility Lease (including the preservation of
GE Capital's Net Economic Return), shall compute such adjustment
(except in the case of an adjustment resulting from an increase in
Lessor's Cost from that set forth in Schedule 6) in a manner
designed to maintain level Operating Cash Flow Ratios for each
Quarterly Measurement Period during the Basic Term and to minimize
any resulting increase and to maximize any resulting decrease in
the present value of the installments of Basic Rent. GE Capital
shall certify, and, at the Partnership's request and expense, KPMG
Peat Marwick (or such other independent auditors as may be
selected by GE Capital and reasonably satisfactory to the
Partnership) shall verify, that each adjustment made pursuant to
this Section 5.7 was calculated in accordance with the same
methodology as was applicable to the Basic Rent Factors and
Stipulated Loss Values set forth in Schedule 10; provided,
however, that in the event that the amount of the rent adjustment
is changed by the greater of (i) five percent of the rent
adjustment or (ii) one half percent of the rent as adjusted, in
each case in present value terms following such audit, then the
cost of performing such audit shall be borne by GE Capital.
5.8 Leverage Option; Adjustment of Basic Rent. At the
sole option of GE Capital, the Facility Lease may be funded at any
time with non-recourse indebtedness ("Lease Debt") as a leveraged
lease rather than a single investor lease. In such event, the
Partnership shall reasonably cooperate with GE Capital and the
Owner Trustee in effecting any such leveraging, including
negotiating and executing amendments to the Transaction Documents
to provide for terms and conditions customary for leveraged lease
transactions. In the event GE Capital so decides to leverage the
Facility Lease, the installments of Basic Rent shall be
recalculated and reduced in the manner set forth in Schedule 13.
Such adjustment shall be computed by GE Capital on the closing of
the Lease Debt financing consistent with the methodology set forth
in Schedule 13, and GE Capital shall promptly certify, and, at the
Partnership's request and expense, KPMG Peat Marwick or such other
independent financial advisors expert in leasing transactions
selected by GE Capital and reasonably satisfactory to the
Partnership shall verify the same to the Partnership.
5.9 Equity Loan Facility. (a) Subject to the
satisfaction of the conditions precedent set forth in subsections
5.5 (on the Date of Final Completion), 5.9(b) and in Schedule 7
(with respect to each drawing), on the Date of Final Completion,
GE Capital shall make available to the Partnership or, at the
option of GE Capital, to the Partners jointly and severally, a
multiple draw credit facility (the "Equity Loan Facility") on
substantially the terms and conditions set forth in Schedule 7.
(b) The obligation of GE Capital to make available the
Equity Loan Facility shall be subject to the fulfillment to the
satisfaction of, or waiver by, GE Capital of the following
conditions precedent and the conditions precedent set forth in
subsection 5.5 and in Schedule 7 (with respect to each drawing) on
or prior to the Date of Final Completion:
(i) the occurrence of the Date of Final Completion
and the delivery by the Partnership to GE Capital of the
Final Completion Certificate;
(ii) the execution and delivery of a loan
agreement, or an appropriate amendment of this Agreement, in
each case in form and substance satisfactory to GE Capital
and reflecting the terms set forth in Schedule 7;
(iii) the execution and delivery by the Partnership
(or the General Partners, as the case may be) of a note, in
form and substance satisfactory to GE Capital, and in an
amount equal to the Equity Loan Commitment;
(iv) the delivery by the Partnership of updated
Operating Projections which shall be satisfactory in form and
substance to GE Capital and shall show, among other things,
an Operating Cash Flow Ratio (for this purpose, taking into
account (A) required debt service on the Equity Loans,
assuming the drawing in full of all amounts available under
the Equity Loan Facility on the Date of Final Completion and
the amortization thereof in accordance with Schedule VII, (B)
required deposits into the Rent Reserve Account and the
Maintenance Reserve Account and (C) the effect of the
capacity payment clawback under the Power Purchase Agreement
and, if the actual amount thereof has not yet been
determined, assuming the maximum clawback) of at least 1.35
to 1.0 for each Quarterly Measurement Period to occur during
the Basic Term and an average Operating Cash Flow Ratio of
not less than 1.40 to 1.0 for the Basic Term; provided that
to the extent the foregoing restrictions would prevent the
Equity Loan Facility from being made available in the full
amount of the Equity Loan Commitment, the Partnership shall
nevertheless have the right to establish the Equity Loan
Facility in a lesser amount meeting the foregoing
restrictions; and
(v) the execution and delivery of all amendments
to the Loan Documents reasonably required by GE Capital to
reflect the making of the Equity Loans, including any
necessary modifications to the Collateral Security Documents
to secure the payment obligations of the borrower of the
Equity Loans.
5.10 Adjustments of Supplemental Rent. In the event
that the Panda Transfer Event does not occur on or prior to
December 31, 1995, the Facility Lease shall be amended to provide
for the payment of Supplemental Rent to GE Capital on each Basic
Rent Payment Date of an amount equal to twenty-five percent (25%)
of Distributable Cash Flow for the Quarterly Measurement Period
ended one-month prior to such Basic Rent Payment Date and to
provide for the payment to GE Capital of twenty-five percent (25%)
of the amounts on deposit in each Reserve Account upon the
liquidation of any such Account pursuant to Section 7(e) of the
Facility Lease (the "Contingent GE Capital Distributions"). GE
Capital hereby consents to (x) the transfer to Panda by Holdings
of 100% of the capital stock of the General Partner and the
Limited Partner under the circumstances described in clause (b) of
the definition of "Panda Transfer Event" and (y) the merger of
Holdings into Panda, so long as the surviving corporation of such
merger is obligated to perform all of the respective obligations
of each of Panda and Holdings under the Transaction Documents and
all necessary actions as may be reasonably requested by GE Capital
are taken to preserve the Liens on the Collateral in favor of the
Security Agent (including the execution of a new stock pledge
agreement by Panda).
Section 6. AFFIRMATIVE COVENANTS
So long as the Commitment remains in effect or any Note
remains outstanding and unpaid, any Letter of Credit remains
outstanding, any obligations are owing to the Owner Trustee under
the Facility Lease or any other amount is owing to GE Capital or
the Owner Trustee hereunder or under the Collateral Security
Documents, each of the Partnership and the General Partner hereby
agrees, for the benefit of the Owner Trustee and GE Capital, that:
6.1 Completion of Facility; Monthly Reports. The
Partnership shall cause the Project to be constructed and
completed in substantial compliance with all applicable national,
state and local engineering, construction, safety and electrical
generation codes and standards, the terms of the Construction
Contract (and any other EPC Contract) and in accordance with the
provisions of the Power Purchase Agreement, and shall cause
Substantial Completion of the Facility to occur on or before the
Construction Loan Maturity Date, and shall cause Final Completion
to occur no later than six months after the Commercial Operation
Date. The Partnership shall provide GE Capital's Representative
and GE Capital with a monthly Construction Progress Report, a copy
of each report furnished by each EPC Contractor to the Partnership
pursuant to each EPC Contract, and shall respond, and shall cause
the Contractor to respond, to GE Capital's Representative's
inquiries regarding each EPC Contractor's performance of its work
under each EPC Contract. The Partnership shall provide to GE
Capital and GE Capital's Representative, promptly upon delivery of
the same to the Power Purchaser, a copy of the monthly progress
report required to be delivered to the Power Purchaser pursuant to
Section 7.1(b) of the Power Purchase Agreement.
6.2 Conduct of Business, Maintenance of Existence, etc.
The Partnership shall at all times (i) engage solely in the
business of developing, constructing, financing and owning (until
the Lease Closing Date), and leasing and operating the Project,
and activities incident thereto, (ii) preserve and maintain in
full force and effect its existence as a limited partnership under
the laws of the State of Delaware, its qualification to do
business in the States of Delaware and Maryland and in each other
jurisdiction in which the conduct of its business requires such
qualification and all of its rights, privileges and franchises
necessary for the construction, ownership (and, after the Lease
Closing Date, leasing) and operation of the Project, (iii) obtain
and maintain in full force and effect all Governmental Actions and
other consents and approvals required at any time in connection
with the construction, ownership or operation of the Project, and
(iv) maintain the Facility as a Qualifying Facility. Each of the
Partnership and the General Partner agrees that the General
Partner will (i) engage solely in the business of being the sole
general partner of the Partnership, and (ii) preserve and maintain
its existence as a validly existing corporation and in good
standing under the laws of the State of Delaware and its
qualification to do business in the States of Delaware and
Maryland and in each other jurisdiction in which the conduct of
its business requires such qualification.
6.3 Payment of Obligations. The Partnership will pay,
discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, all of its obligations
under the Transaction Documents and all of its Indebtedness and
other obligations of whatever nature, except in the case of such
other obligations, those obligations which are subject to a
Contest.
6.4 Performance Under Other Agreements. The
Partnership shall duly perform and observe all of the covenants,
agreements and conditions on its part to be performed and observed
hereunder and under the Note, under the Facility Lease (from and
after the Lease Closing Date) and the Collateral Security
Documents, and shall duly perform and observe in all material
respects all of the covenants, agreements and conditions on its
part to be performed and observed under the Project Documents and
the Easement Agreements to which it is a party. The Partnership
shall diligently enforce all of its rights under each Assigned
Contract.
6.5 General Partner. The General Partner shall remain
at all times the sole general partner of the Partnership.
6.6 Insurance Coverage. Without limiting any of the
other obligations or liabilities of the Partnership under this
Agreement, the Partnership shall at all times carry and maintain
or cause to be carried and maintained at its own expense such
insurance as is customarily maintained by constructors, owners,
operators, and lessees of electric generating facilities and in
all events shall carry and maintain at least the minimum insurance
coverage set forth in this subsection relating to the operation or
construction of the Facility. The Partnership shall also carry
and maintain any other insurance that GE Capital may reasonably
require from time to time. All insurance carried pursuant to this
subsection shall be with such insurers, in such amounts and in
such form and with deductibles as shall be reasonably satisfactory
to GE Capital.
(a) During the period from and including the Initial
Loan Funding Date to and including the Commercial Operation Date,
the Partnership shall maintain or cause to be maintained all risk
builder's risk insurance, covering physical loss or damage to the
Facility and transmission lines (related to the interconnection
facilities) including, but not limited to, fire and extended
coverage, collapse, liquid damage, earthquake, flood and
comprehensive boiler and machinery (including electrical
malfunction and mechanical breakdown). Such insurance shall cover
all property during construction and testing as well as any and
all materials, equipment and machinery intended for the Facility
during offsite storage and inland transit and, if any, ocean and
air transit. The ocean/air transit policy shall be on a
"warehouse to warehouse" basis. The all risk builder's risk
coverage shall not contain an exclusion for testing or an
exclusion for resultant damage caused by faulty workmanship,
design or materials. Coverage shall be written on a replacement
cost basis and in an amount acceptable to GE Capital, but in no
event less than the replacement cost of the Facility, except for
(i) offsite storage and transit where sublimits equal to the
maximum storage value or transit value shall be acceptable and
(ii) loss due to floods or earth movement, where sublimits of $75
million shall be acceptable. Such policy shall contain a valid
agreed amount endorsement waiving any coinsurance penalty. The
policy may be subject to deductibles not to exceed $100,000 per
occurrence.
(b) During the period from and including the Initial
Loan Funding Date to and including the Commercial Operation Date,
the Partnership shall maintain or cause to be maintained cost of
delayed opening insurance in an amount equal to one year projected
continuing expense, debt service and profit of the Partnership.
Any such extension or policy shall include coverage for delays
resulting from (i) damage to the Facility, (ii) damage to
equipment while in transit, including any marine or air transit
and (iii) damage to any equipment while at manufacturers'
locations or in storage away from the Site. Any such extension or
policy shall also include coverage for expediting expenses with a
sublimit of not less than $1,000,000. Any such extension or
policy shall have a deductible not to exceed 30 days' delay except
for expediting expense which deductible shall not exceed $100,000.
Contingent cost for delayed opening shall be written on critical
path items while at the manufacturer's site and on the Distilled
Water Facility.
(c) From and after the Commercial Operation Date, the
Partnership shall maintain or cause to be maintained all-risk
property and boiler and machinery insurance, covering physical
loss or damage to the Facility and the transmission lines related
to the interconnection facilities, including, but not limited to,
fire and extended coverage, collapse, liquid damage, earthquake,
flood and comprehensive boiler and machinery (including electrical
malfunction and mechanical breakdown). Such insurance shall cover
each and every component of the Facility and the interconnection
facilities. The all-risk property and boilers and machinery
coverage shall not contain an exclusion for resultant damage
caused by faulty workmanship, design or materials. Coverage shall
be written on a replacement cost basis and in an amount acceptable
to GE Capital, but in no event less than the replacement cost of
the Project; sublimits of not less than $75,000,000 are acceptable
for loss or damage due to flood or earthquake. Such policy shall
contain a valid agreed amount endorsement waiving any coinsurance
penalty. The policy may be subject to deductibles not to exceed
$100,000 per occurrence (or $250,000 in the case of gas
turbine/generator packages). At the time when and to the extent
that, the sum of (i) the face amount of outstanding Letters of
Credit, (ii) the principal of and interest on the Equity Loans and
(iii) the Stipulated Loss Value exceeds the limits of coverage
under the property and boiler and machinery policy specified in
this subsection 6.6(c), the Partnership shall include as a part of
this policy or procure a special policy known as a "Lender's
Single Interest Excess of Loss Coverage" or "Stipulated Loss
Coverage" covering all the perils provided by the property and
boiler and machinery policy. Such policy shall provide limits
equal to the difference between (A) the sum of the amounts
specified in clauses (i), (ii) and (iii) of the immediately
preceding sentence and (B) the property and boiler and machinery
limits, or equal to such other amount as may be mutually agreed
between the Partnership and GE Capital. The insureds and loss
payees under this "Lender's Single Interest Excess of Loss
Coverage" or "Stipulated Loss Coverage" policy shall be GE
Capital, the Owner Trustee and the Security Agent.
(d) As an extension of the policy referred to in
subsection 6.6(c) or as a separate policy, the Partnership shall
maintain or cause to be maintained business interruption insurance
in an amount equal to 12 months projected net operating profits of
the Partnership and contingent business interruption insurance in
an amount equal to 12 months projected net operating profits of
the Partnership. This extension or separate policy shall include
coverage for (i) business interruption arising from loss or damage
to the Project, including a service interruption endorsement with
a limit of $5,000,000 and a deductible period of not more than 72
hours and (ii) contingent business interruption arising from
damage to the property and equipment of customers and suppliers of
the Project, which is not covered by the insurance specified in
subsection 6.6(c). Such customers and suppliers shall include but
not be limited to the purchasers of steam and electricity and the
suppliers of natural gas. This extension or separate policy shall
also include coverage for expediting expenses and extra expense
with a sublimit of $1,000,000. This extension or separate policy
shall have a deductible not to exceed 30 days' business interruption,
except for expediting expenses and extra expense, which deductible shall
not exceed $100,000.
(e) The Partnership shall maintain or cause to be
maintained comprehensive (or commercial) general liability
insurance written on an occurrence basis and with a combined
single limit of not less than $1,000,000. Such coverage shall
include premises/operations, explosion, collapse and underground
hazards, broad form contractual, independent contractors,
products/completed operations, broad form property damage and
personal injury. Such policy shall be written on a project
specific basis and shall apply solely to the construction, use,
operation and maintenance of the Facility. It shall also contain
a drop down provision in the event of exhaustion of underlying
limits or aggregates and apply on a following form basis.
(f) The Partnership shall maintain or cause to be
maintained (i) Workers' Compensation insurance with statutory
limits and (ii) employers liability insurance coverage with limits
of not less than $1,000,000 including occupational disease
coverage.
(g) The Partnership shall maintain or cause to be
maintained comprehensive (or business) automobile liability
insurance for owned (if any), nonowned, hired and borrowed
vehicles with combined single limits of not less than $1,000,000.
(h) The Partnership shall maintain or cause to be
maintained excess (or umbrella) liability insurance written on an
occurrence basis and providing coverage limits in excess of the
insurance required to be maintained pursuant to subsections
6.6(e), (f)(ii) and (g). The limits of such insurance and such
excess insurance (or umbrella) coverage, when combined, shall be
not less than $25,000,000 on a project-specific basis or shall be
not less than $50,000,000 over all with not less than $10,000,000
on a project-specific basis. Such policy shall be written on a
project-specific basis naming the Partnership as the insured and
GE Capital, the Owner Trustee and the Security Agent as additional
named insureds and shall apply solely to the construction, use,
operation and maintenance of the Facility.
(i) The Partnership shall maintain such insurance as
the Partnership is required to maintain pursuant to the provisions
of any Project Document.
(j) The Partnership shall cause (i) the Contractor to
obtain and maintain in full force and effect such insurance as the
Contractor is required to maintain pursuant to Sections 3.08 and
4.16 of the Construction Contract and (ii) the Operator to
obtain and maintain such insurance as the Operator is required to
maintain pursuant to Section 9.01 of the Operation and Maintenance
Agreement.
(k) The insurance carried in accordance with this
subsection 6.6 shall be endorsed as follows:
(i) the Partnership shall be the named insured and
GE Capital and the Owner Trustee and the Security Agent shall
be additional named insureds with respect to the insurance
required to be maintained pursuant to subsections 6.6(a),
(b), (c) and (d). The Partnership shall be the named insured
and GE Capital and the Owner Trustee and the Security Agent
shall be additional insureds with respect to the insurance
required to be maintained pursuant to subsections 6.6(e),
(f)(ii), (g) and (h). The Partnership and GE Capital and the
Owner Trustee and the Security Agent shall be additional insureds
with respect to insurance maintained pursuant to subsection 6.6(j)
(in respect of any liability policy);
(ii) the interest of the Security Agent as security
agent, of GE Capital as lender and of the Owner Trustee as
lessor shall not be invalidated by any action or inaction of
the Partnership or any other Person and of any breach or
violation by the Partnership or any other Person of any
warranties, declarations or conditions in such policies;
(iii) the insurer thereunder shall waive all rights
of subrogation against GE Capital and the Owner Trustee and
the Security Agent, any right of setoff or counterclaim and
any other right to deduction, whether by attachment or
otherwise;
(iv) such insurance shall be primary without right
of contribution of any other insurance carried by or on
behalf of GE Capital and the Owner Trustee and the Security
Agent with respect to their respective interests as such in
the Facility;
(v) if such insurance is canceled for any reason
whatsoever, including nonpayment of premium, or any
substantial change is made in the coverage which affects the
interest of GE Capital or the Owner Trustee or the Security
Agent, such cancellation or change shall not be effective as
to GE Capital or the Owner Trustee or the Security Agent, for
60 days, except for nonpayment of premium which shall be 10
days, after receipt by GE Capital and the Owner Trustee and
the Security Agent of written notice sent by registered mail
from such insurer of such cancellation or change;
(vi) any insurance carried in accordance with
subsections 6.6(e), (f)(ii), (g), (h) and (j) (in respect of
any liability policy) shall be endorsed to provide that,
inasmuch as the policy is written to cover more than one
insured, all terms, conditions, insuring agreements and
endorsements, with the exception of limits of liability,
shall operate in the same manner as if there were a separate
policy covering each insured; and
(vii) any insurance carried in accordance with
subsections 6.6(a), (b), (c) and (d) shall include a standard
lender's loss payable endorsement in favor of
GE Capital and the Owner Trustee and the Security Agent and
shall name GE Capital and the Owner Trustee and the Security
Agent as the sole loss payees. Deductibles or self insured
retentions shall be subject to approval by GE Capital.
(l) The Partnership shall deliver to GE Capital and the
Owner Trustee and the Security Agent on or prior to the expiration
date of each insurance policy required to be maintained by it
pursuant to this subsection 6.6, a certificate executed by the
insurer or its duly authorized agent evidencing the continuance of
such insurance policy (or, upon request, a certified copy of such
insurance policy).
(m) All payments received by GE Capital, the Owner
Trustee, the Security Agent or the Partnership from any insurer
with respect to loss or damage to the Facility or other Collateral
shall promptly be deposited in the Insurance and Condemnation
Proceeds Account for application in accordance with
the provisions of Section 4.11 of the Security Deposit Agreement.
(n) No provision of this subsection 6.6 or any
provision of any other Transaction Document shall impose on
GE Capital or the Owner Trustee or the Security Agent any duty or
obligation to verify the existence or adequacy of the insurance
coverage maintained by the Partnership, nor shall GE Capital or
the Owner Trustee or the Security Agent be responsible for any
representations or warranties made by or on behalf of the
Partnership to any insurance company or underwriter.
(o) Concurrently with the furnishing of all
certificates referred to in paragraph (l), the Partnership shall
furnish GE Capital and the Owner Trustee and the Security Agent
with an opinion of an independent insurance broker stating that
all premiums then due have been paid and that, in the opinion of
such broker, the insurance then carried and maintained is in
accordance with subsection 6.6. Furthermore, the Partnership
shall cause each insurer or such broker to advise GE Capital and
the Owner Trustee and the Security Agent promptly in writing of
any default in the payment of any premiums or any other act or
omission on the part of the Partnership or the Contractor which
might invalidate or render unenforceable, in whole or part, any
insurance provided hereunder. GE Capital or the Owner Trustee or
the Security Agent may, at its sole option, obtain such insurance
if not provided by the Partnership and in such event the
Partnership shall reimburse GE Capital or the Owner Trustee or the
Security Agent upon presentation of a certificate of insurance
setting forth the cost thereof.
6.7 Inspection of Property; Books and Records;
GE Capital's Representative; Discussions. (a) The Partnership
shall keep proper books of records and accounts in which full,
true and correct entries shall be made of all of its transactions
in accordance with sound accounting practice. The Partnership
agrees that a representative of GE Capital ("GE Capital's
Representative") (at the expense of the Partnership, based on
invoices for the reasonable actual costs thereof) may visit the
Facility and the other properties of the Partnership (or, if
requested by GE Capital, may be located on the Site) at any and
all times during normal business hours and, if such representative
is not located on the Site, upon reasonable prior notice, during
the period from the Initial Loan Funding Date until Final
Completion. GE Capital and GE Capital's Representative will be
given access to (a) all Plans and Specifications (including,
without limitation, data relating to design changes in the
Facility), (b) quality control data, (c) invoices relating to
construction progress and to services to be performed and materials
to be supplied on a cost reimbursement basis, and invoices relied on
by the Contractor in verifying construction progress, (d) contracts
relating to the engineering of, the procurement of services, equipment,
supplies or other materials for, or the construction of, the Facility
and (e) all other data relating to the Project Schedule and construction
progress as may be reasonably requested by GE Capital's
Representative. The Partnership shall permit representatives of
GE Capital and GE Capital's Representative to examine its books of
records and accounts and to discuss its affairs, finances and
accounts with its principal officers, engineers and independent
accountants, all at such reasonable times during business hours
and at such reasonable intervals as GE Capital or GE Capital's
Representative may request. GE Capital's Representative shall
also have the right to monitor, witness and appraise the Work,
review and audit the records specified in clauses (a) through (e)
above and verify the costs submitted in any Notice of Borrowing or
Cost Certificate which relate to the costs specified in
clauses (a) through (e) above. The Partnership shall at all times
cause an accurate and complete set of the Plans and Specifications
to be maintained at the Facility. At least once each calendar
month, the Partnership shall notify GE Capital's Representative of
any change made to the Plans and Specifications since the last
such notice and shall meet with GE Capital's Representative (and
GE Capital, should GE Capital so request) to discuss such changes.
Without GE Capital's prior written consent, no such amendment or
modification of the Plans and Specifications shall be made, nor
shall any change, change order or change bulletin or other change
to the Construction Contract be made which would, in any such
case, (a) result in costs (or an increase in price) in excess of
$50,000 individually, or $250,000 in the aggregate, (b) impair or
reduce the operating capacity, output, cost efficiency, utility,
reliability, value, useful life or cost of the Facility, (c)
extend the Project Schedule or (d) violate any law or present an
additional risk in maintaining the effectiveness of any applicable
permit or other Governmental Action. Notwithstanding the
foregoing, the Partnership shall not enter into any agreement to
modify or change the Plans and Specifications as the result of or
in conjunction with any final settlement of any EPC Contract
without the prior written consent of GE Capital. The Partnership
will make such changes to the Plans and Specifications as GE
Capital may, on or prior to the completion of the engineering work
under the Construction Contract, reasonably suggest; provided that
such changes are consistent with the provisions of the Power
Purchase Agreement.
(b) Anything to the contrary herein or in any other
Project Document notwithstanding, no act or omission of
GE Capital or GE Capital's Representative shall in any way affect
the obligations of the Partnership, the Contractor, any other EPC
Contractor or any other Person under any contract relating to the
Construction Contract, any other EPC Contract, or the Work, be
deemed to be the acceptance of any defective work performed by the
Contractor, any other such EPC Contractor or any other Person
under the Construction Contract or any other such EPC Contract or
be deemed to be a waiver of any rights against the Contractor,
such other EPC Contractor or any other Person under the
Construction Contract or any such EPC Contract or otherwise.
(c) The Partnership shall provide at least five
Business Days' advance notice to GE Capital and GE Capital's
Representative of any planned Site or other meetings between the
Partnership and any EPC Contractor.
6.8 Compliance With Laws. The Partnership shall comply
with all Applicable Laws including, without limitation, all
applicable Environmental Laws, and shall from time to time obtain
and comply with all applicable Governmental Actions as shall now
or hereafter be necessary under all Applicable Laws, in connection
with the construction, ownership (and, after the Lease Closing
Date, leasing), operation or maintenance of the Project, except if
such non-compliance would not have a Material Adverse Effect.
6.9 Financial Statements. The Partnership shall
furnish or cause to be furnished to GE Capital:
(a) as soon as available, but in any event within 120
days after the end of each fiscal year of each of the
Partnership, the General Partner, Holdings and Panda, a copy
of the unaudited balance sheet of the Partnership, Holdings
and the General Partner and the audited balance sheet of
Panda as of the end of such fiscal year and the related
statements of income, retained earnings (or partners'
capital) and changes in cash flows of the Partnership, the
General Partner, Holdings and Panda (and audited in the case
of Panda), for such fiscal year, setting forth in each case
in comparative form the figures for the previous fiscal year
(provided, that during the Lease Term, all of the financial
statements required to be furnished pursuant to this
subsection 6.9(a) shall be audited) and each of the audited
financial statements delivered pursuant to this subsection
6.9(a) shall be certified without qualification or exception
as to the scope of its audit by Price Waterhouse or other
independent public accountants of national standing
reasonably acceptable to GE Capital;
(b) as soon as available, but in any event within
60 days after the end of each quarterly period of each fiscal
year of each of the Partnership, the General Partner,
Holdings and Panda (other than the last quarterly period of
each such fiscal year), the unaudited balance sheet of each
of the Partnership, the General Partner, Holdings and Panda
as of the end of such quarterly period and the related
unaudited statements of income and retained earnings (or
partners' capital) and changes in cash flows of the
Partnership, the General Partner, Holdings and Panda for such
quarterly period and for the portion of the fiscal year then
ended, setting forth in each case in comparative form the
figures for the previous period, certified by the chief
accounting officer or chief financial officer of the
Partnership, the General Partner, Holdings and Panda (subject
to normal year-end audit adjustments); and
(c) to the extent and within 30 days after becoming
publicly available, a copy of the audited, yearly balance
sheet and unaudited quarterly balance sheet of each Specified
Participant other than the Partnership and its Affiliates, in
such form as the same have been made publicly available;
(d) as soon as practicable, but in any event within 30
days after the end of each calendar month, an operating
report of the Partnership as at the end of such period and
for the period of such fiscal year then ended, containing
such information as shall be agreed to by GE Capital and the
Partnership and setting forth in comparative form the
corresponding figures for the corresponding periods in the
preceding fiscal year (and in the then current Operating
Budget), certified by the chief accounting officer or chief
financial officer of the Partnership and the General Partner;
(e) as soon as available, but in any event 60 days
prior to the end of each fiscal year of the Partnership
during the Lease Term, an annual operating budget (the
"Operating Budget") for the Project, satisfactory in form and
substance to GE Capital, setting forth projected operating
expenses and cash flow for the Project for the upcoming
fiscal year; all such financial statements (other than those required to be
furnished pursuant to subsection (c) hereof) to be complete and
correct in all material respects and to be prepared in reasonable
detail and in accordance with GAAP applied consistently throughout
the periods reflected therein (except for changes approved or
required by the independent public accountants certifying such
statements and disclosed therein).
6.10 Certificates; Other Information. The Partnership
shall furnish or cause to be furnished to GE Capital and, on and
after the Lease Closing Date, the Owner Trustee:
(a) concurrently with the delivery of the financial statements of
the Partnership referred to in subsection 6.9(a), a certificate of the
independent public accountants which certified such financial statements
(which certificate may be limited to accounting matters and may disclaim
responsibility for legal interpretations) stating that in making the
examination necessary for the audit thereof no knowledge was obtained of
any Default, Event of Default, Lease Default or Lease Event of Default,
except as specified in such certificate;
(b) concurrently with the delivery of the financial statements of
the Partnership referred to in subsections 6.9(a) and 6.9(b), a certificate
of an Authorized Officer of the General Partner stating that, to the best
of such officer's knowledge after due inquiry, each of the Partnership and
the General Partner, during the period covered by such financial statements
has observed and performed all of its covenants and other agreements
hereunder, and satisfied every condition, contained in this Agreement and
the other Transaction Documents to be observed, performed or satisfied by it,
and that such Authorized Officer has obtained no knowledge of any Lease
Default, Lease Event of Default, Default or Event of Default hereunder at
any time during such period or on the date of such certificate and no
knowledge of any default or event which with the giving of notice or the
lapse of time or both would constitute a default under any of the other
Transaction Documents at any time during such period or on the date of
such certificate (or, if any such Lease Default, Lease Event of Default,
Default or Event of Default or default or event shall have occurred, a
statement setting forth the nature thereof and the steps being taken by
the Partnership to remedy the same);
(c) promptly after the same are sent, copies of all financial
statements and reports which the Partnership sends to its Partners;
(d) promptly after the filing thereof, the "Annual
Returns" (Form 5500 series) and attachments filed annually
with the Internal Revenue Service with respect to each Single
Employer Plan, if any, of the Partnership;
(e) with respect to any Single Employer Plan adopted or
amended by the Partnership or the General Partner or any
Commonly Controlled Entity on or after the first Borrowing
Date, any determination letters received from the Internal
Revenue Service with respect to the qualification of such
Plan, as initially adopted or amended under Section 401(a) of
the Code;
(f) promptly after delivery or receipt thereof, a copy
of each material notice, demand or other communication
delivered by or received by the Partnership pursuant to any
Project Document;
(g) copies of each Governmental Action or other consent
or approval obtained or made by the Partnership or the
General Partner, or obtained or made by any EPC Contractor
and delivered to the Partnership pursuant to each EPC
Contract;
(h) fifteen days prior to each Basic Rent Payment Date,
a certificate of an Authorized Officer of the General
Partner, in form and substance satisfactory to GE Capital,
stating the Available Cash Flow, the Distributable Cash Flow,
Cash Available for Distributions and the Operating Cash Flow
Ratio for the 3-month period ending on the date 30 days prior
to such Basic Rent Payment Date (each such quarterly period,
a "Quarterly Measurement Period") and setting forth
reasonably sufficient information to permit GE Capital to
confirm the accuracy of such amounts;
(i) promptly after any material interruption in the
supply of natural gas to the Facility (other than any (A)
normal interruptions caused by a Gas Transporter with respect
to that portion of the natural gas supply for which firm
transportation capacity has not been arranged or (B)
occasional interruptions caused by a supplier providing for
the delivery of natural gas on an interruptible basis), a
notice describing the circumstances of such interruption;
provided that such notice shall be delivered with respect to
any interruption (whether or not excused or whether or not
material) that results in the Partnership using fuel oil to
operate the Facility or that could give rise to a "Fuel
Default" (as defined in the Consent of the Power Purchaser);
(j) fifteen days prior to each Basic Rent Payment Date,
a report for the 3-month period ending on the date 30 days
prior to such Basic Rent Payment Date setting forth the
amount of distilled water produced by the Steam Host during
such period and the amount of distilled water sold by the
Steam Host during such period;
(k) promptly, notice of any failure by the Partnership
to deliver Net Electrical Output (as defined in the Power
Purchase Agreement) in satisfaction of the dispatch
requirements of the Power Purchaser under the Power Purchase
Agreement and a report describing the circumstances of such
failure; and
(l) promptly, such additional financial and other
information with respect to the Partnership, the General
Partner or the Project as GE Capital may from time to time
reasonably request.
6.11 Taxes. The Partnership shall pay and discharge
all taxes, assessments and governmental charges or levies imposed
on it or on its income or profits or on any of its property,
including, without limitation, any property that it leases prior
to the date on which penalties attach thereto, and all lawful
claims which, if unpaid, might become a Lien upon the property of
the Partnership, except to the extent the payment of any such tax,
assessment, charge or levy is subject to a Contest. The
Partnership will promptly pay or cause to be paid any valid, final
judgment enforcing any such tax, assessment, charge, levy or claim
and cause the same to be satisfied of record.
6.12 Maintenance of Property. (a) The Partnership, at
its expense, shall keep the Facility in good working order and
condition and make all repairs, replacements and renewals with
respect thereto and additions and betterments thereto which are
necessary for the Facility to operate in strict compliance with
the terms of the Power Purchase Agreement and in material
compliance with all Applicable Laws affecting the Project.
(b) If, after any loss, destruction or damage with
respect to the Project referred to in the definition of "Event of
Loss", the conditions specified in clause (i) of Section 9(c) of
the Facility Lease are satisfied, the Partnership at all times
thereafter will proceed diligently with all work necessary to
correct such loss, destruction or damage to the extent of the
insurance proceeds or other funds received by it.
6.13 Notices. The Partnership will, promptly upon
obtaining knowledge of any of the following, give notice to
GE Capital and, on and after the Lease Closing Date, the Owner
Trustee:
(a) of the occurrence of any Default, Event of Default, Lease
Default or Lease Event of Default;
(b) of any default or event of default under any Assigned Contract;
(c) of any litigation, investigation or proceeding which may exist
or, to the best knowledge of the Partnership or the General Partner, which
may be threatened) at any time between the Partnership and any Governmental
Authority;
(d) of any litigation or proceeding against the Partnership or
affecting the Project of which the Partnership is aware in which the amount
involved is $50,000 or more or in which injunctive or similar relief is
sought;
(e) of the following events, as soon as possible and in
any event within 30 days after the Partnership knows or has
reason to know thereof: (i) the occurrence or expected
occurrence of any Reportable Event with respect to any Plan,
or (ii) the institution of proceedings or the taking or
expected taking of any other action by PBGC or the
Partnership to terminate, withdraw or partially withdraw from
any Plan, or (iii) the reorganization or insolvency of any
Multiemployer Plan, and, in addition to such notice, deliver
to GE Capital and, on and after the Lease Closing Date, the
Owner Trustee whichever of the following may be applicable:
(A) a certificate of the chief financial officer of the
Partnership setting forth details as to such Reportable Event
and the action that the Partnership proposes to take with
respect thereto, together with a copy of any notice of such
Reportable Event that may be required to be filed with PBGC,
or (B) any notice delivered by PBGC evidencing its intent to
institute such proceedings or any notice to PBGC that such
Plan is to be terminated, or (C) any notice of the
reorganization or insolvency of a Multiemployer Plan received
by the Partnership;
(f) of any change, event or condition (including any
actual or prospective change of law, rule or regulation)
which has or could have a Material Adverse Effect;
(g) of any loss or damage to the Facility or the other
Collateral in excess of $50,000;
(h) of any delays for any reason in construction of the
Facility which could reasonably be expected to affect the
Project Schedule;
(i) of any event or condition which would change any
matter represented to in subsection 3.27;
(j) of the proposed execution and delivery of any
Additional Project Document;
(k) of any material event constituting force majeure
under any of the Project Documents or any claim by any party
to any Project Document alleging that a force majeure event
thereunder has occurred;
(l) of any litigation, investigation or proceeding
affecting any Affiliate of the Partnership or, to the best
knowledge of the Partnership or the General Partner, any
Specified Participant which, if adversely determined, would
have a Material Adverse Effect;
(m) of any material violation of any applicable
Environmental Law, or any event or condition that could be
reasonably expected to result in a material liability under
any applicable Environmental Law or any litigation or
proceeding relating to environmental matters concerning the
Partnership or the Project and affecting the Partnership or
any other Person on or in connection with the assets of the
Partnership or any part thereof (including, but not limited
to, receipt by Partnership of any notice of any Environmental
Proceeding or any Reportable Spill);
(n) of any assertion by any Governmental Authority or
other Person that the Work does not comply with any
Applicable Law;
(o) of the institution of any Adverse Proceeding;
(p) of any material delays for any reason in the
delivery of materials or equipment to be supplied under any
EPC Contract;
(q) of any Stop-Work Order;
(r) of any cessation or suspension in the Work for any
reason by any EPC Contractor;
(s) of any Change Order or requested or required
change in the Plans and Specifications;
(t) of the cancellation or expiration (without renewal
or replacement) of any insurance required to be maintained
under this Agreement or any other Transaction Document;
(u) of the initiation of any condemnation proceedings
against any of the Collateral;
(v) of any Lien or claim against any Collateral other
than Permitted Liens;
(w) at least 30 days prior to the Lease Closing Date,
preliminary notice of such anticipated Lease Closing Date,
together with notice of any of the conditions precedent set
forth in subsection 5.5 which the Partnership will be unable
to satisfy as of the Lease Closing Date;
(x) of any order, notice or declaration by a
Governmental Authority that could result in the Facility
ceasing to be a Qualifying Facility; and
(y) of any order, notice or declaration by any
Governmental Authority that could result in GE Capital, the
Owner Trustee or any of their respective Affiliates becoming
a Public Utility.
Each notice pursuant to this subsection shall be accompanied by a
statement of an Authorized Officer of the General Partner setting
forth details of the occurrence referred to therein and stating
what action the Partnership proposes to take with respect thereto
and, with respect to a notice given pursuant to clause (j), shall
be accompanied by a copy of the Additional Project Document. For
all purposes of clause (e) of this subsection, the Partnership
shall be deemed to have all knowledge or knowledge of all facts
attributable to the administrator of such Plan.
6.14 Assignments of Additional Project Documents;
Maintenance of Liens of the Collateral Security Documents; Future
Mortgages. The Partnership will:
(a) after the execution and delivery of any Additional
Project Document and promptly upon the request of
GE Capital, execute and deliver to the Security Agent, for the
benefit of GE Capital and the Owner Trustee, an Assignment
with respect to such Additional Project Document and cause the
other party or parties to such Additional Project Document to
execute and deliver to GE Capital and the Security Agent, for
the benefit of GE Capital and the Owner Trustee, a Consent to
Assignment with respect to such Assignment;
(b) promptly upon the request of GE Capital, and at the
Partnership's expense, execute and deliver, or cause the
execution and delivery of, and thereafter register, file or
record in each appropriate governmental office, any document
or instrument supplemental to or confirmatory of the
Collateral Security Documents or otherwise deemed by
GE Capital to be necessary or desirable for the creation or
perfection of the liens and security interests purported to be
created by the Collateral Security Documents; and
(c) if the Partnership shall at any time acquire any
real property or leasehold or other interests therein not
covered by the Deed of Trust and Security Agreement, promptly
upon such acquisition execute, deliver and record a supplement
to the Deed of Trust and Security Agreement, satisfactory in
form and substance to GE Capital, subjecting such real
property or leasehold or other interests to the loan and
security interest created by the Deed of Trust and Security
Agreement.
6.15 Annual Opinion of Counsel. The Partnership shall
furnish to GE Capital within 90 days after the end of each calendar
year, beginning with the calendar year ending December 31, 1995, an
opinion of counsel addressed to GE Capital (a) stating that such action
has been taken with respect to the filing, recording, re-filing and
re-recording of (i) the Collateral Security Documents and/or financing
statements and continuation statements with respect thereto as is necessary
to protect and preserve the rights and interests of the Partnership (or any
Partner or Holdings, as the case may be) in and to the Collateral
and the liens on and security interests in the rights and interests
of the Partnership (or any Partner or Holdings, as the case may be)
in and to the Collateral created by the Collateral Security
Documents and (ii) the Lease Documents and/or financing statements
and continuation statements with respect thereto as is necessary to
protect and preserve the rights and interests of the Owner Trustee
and GE Capital in and to the Facility, and in the case of clauses
(i) and (ii) above, reciting the details of such action or
referring to prior opinions of counsel in which such details are
given and (b) stating what, if any, action of the foregoing nature
may reasonably be expected to become necessary during the next succeeding
twelve months in order to protect and preserve the rights and interests
of (i) the Partnership (or any Partner or Holdings, as the case may be)
in and to the Collateral and the liens on and security interests in the
Collateral created by the Collateral Security Documents and (ii)
the Owner Trustee and GE Capital in and to the Facility.
6.16 Employee Plans. For each Plan adopted by the
Partnership, the Partnership shall (a) use its best efforts to seek
and receive determination letters from the Internal Revenue Service
to the effect that such Plan is qualified within the meaning of
Section 401(a) of the Code; and (b) from and after the date of
adoption of any Plan, cause such Plan to be qualified within the
meaning of Section 401(a) of the Code and to be administered in all
material respects in accordance with the requirements of ERISA and
Section 401(a) of the Code.
6.17 Management Letters. The Partnership shall promptly
deliver to GE Capital a copy of each report delivered to the
Partnership by its independent public accountants in connection
with any annual or interim audit of its books, including, without
limitation, any letters or reports addressed to the Partnership or
to the General Partner or any of its officers relating to internal
controls, adequacy of records or the like.
6.18 Documentation of Project Costs. No later than the
16th day of each calendar month, the Partnership shall submit to GE
Capital's Representative and GE Capital a proposed Cost Certificate
listing all Project Costs incurred since the date of the last Cost
Certificate, signed by an Authorized Officer of the General Partner
and accompanied by invoices properly documenting all Project Costs
covered by the proposed Cost Certificate. The Partnership shall
include all invoices for Project Costs received since the date of
the last Cost Certificate submitted to GE Capital's Representative
including, in the case of payments to EPC Contractors, a certificate
of an Authorized Officer of such EPC Contractor satisfactory to GE
Capital certifying equipment costs and progress in the construction
of the Facility. Not later than the 22nd day of such calendar month,
and, in any event, at least five Business Days prior to the next
Borrowing Date, the Partnership shall deliver to GE Capital a Cost
Certificate based on the items in the proposed Cost Certificate submitted
to GE Capital's Representative and accompanied by all invoices verified
by GE Capital's Representative.
6.19 Disputes. Any disputes between GE Capital or GE
Capital's Representative and the Partnership as to any Project Cost
shall be reduced to writing and submitted to GE Capital and the
Partnership, with such evidence as each may deem appropriate. If GE
Capital and the Partnership cannot agree on a mutually acceptable
resolution within 30 days, the parties may pursue any remedies
afforded by law. Until the dispute is resolved, this Agreement and
all other Transaction Documents shall remain in full force and
effect without regard to such dispute, but
GE Capital shall not have any obligation to make any Loan in
respect of any amount in dispute. If requested by GE Capital or GE
Capital's Representative, the Partnership shall diligently
prosecute any dispute with third parties.
6.20 Lists and Approval of Contractors, Subcontractors
and Materialmen. (a) Partnership shall furnish to GE Capital and
GE Capital's Representative from time to time as requested by GE
Capital a listing which is accurate in all material respects, of
all EPC Contractors and first tier subcontractors employed in
connection with the construction of the Facility. Each such list
shall show the name, address and telephone number of each EPC
Contractor or first tier subcontractor and a general statement of
the nature of the work to be done and the labor and materials to be
supplied. GE Capital shall have the right (to the extent of
Owner's rights under the Construction Contract) to dismiss any EPC
Contractor (other than the Contractor) or first tier subcontractor
for cause.
(b) Failure by GE Capital to disapprove an EPC
Contractor, subcontractor or materialman shall not constitute a
warranty or representation by GE Capital that any contractor,
subcontractor and materialman not so disapproved is in fact
qualified.
(c) GE Capital shall have the right to make direct
contact (to the extent of Owner's rights under the Construction
Contract) with each EPC Contractor, subcontractor and materialman
to verify the facts disclosed by the list.
(d) The Partnership shall notify GE Capital of any
changes in such lists within five days of the time that the
Partnership learns of the occurrence of such change. All contracts
entered into by the Partnership or its contractors after the
Initial Loan Funding Date hereof relating to the design,
engineering, or construction of the Facility shall require
disclosure to GE Capital of information reasonably sufficient to
make such verification.
6.21 Easements. The Partnership agrees to submit to GE
Capital for GE Capital's approval copies of all prospective
Easement Agreements (other than the easement for the Power
Purchaser's Interconnection Facilities, the form of which has
already been approved), easements, licenses, restrictive covenants
or other similar agreements affecting the Site and the Easements
(including all reciprocal easement agreements with parties
interested in the Site and the Easements or with parties interested
in adjacent property) prior to their execution, together with a
drawing or survey showing the location thereof.
6.22 Use of Project Cash Flow Prior to the Lease Closing
Date. Any other provision of this Agreement or any other Loan
Document to the contrary notwithstanding, prior to the Lease
Closing Date the Partnership shall promptly apply all Project
Revenues to the payment of Project Costs or to such other costs,
amounts or purposes (which may include a working capital reserve)
relating to the Project as GE Capital may specify in writing.
6.23 Further Assurances. The Partnership shall cause to
be promptly and duly taken, executed, acknowledged and delivered
all such further acts, documents and assurances as may be necessary
or as GE Capital from time to time may reasonably request in order
to carry out more effectively the intent and purposes of this
Agreement, the other Loan Documents and the Project Documents, and
the transactions contemplated hereby and thereby. The Partnership
shall cause the financing statements (and continuation statements
with respect thereto) and the documents enumerated and described in
Schedule 3, and all other documents necessary in that connection,
to be recorded or filed at such places and times, and in such
manner, and shall take, or shall cause to be taken, all such other
action as may be necessary or reasonably requested by GE Capital in
order to establish, preserve, protect and perfect the title of the
Owner Trustee and GE Capital to the Project and the interest of the
Owner Trustee and GE Capital in the Site and the Liens of the
Security Agent, for the benefit of GE Capital and the Owner
Trustee, on the Collateral.
6.24 Storage of Materials. The Partnership will cause
all materials owned or controlled by the Partnership and supplied
for, or intended to be utilized in, the construction of the
Project, but not affixed to or incorporated into the Project, to be
suitably stored on the Site (or stored in the proximity of
construction of the Transmission Facilities or the Effluent
Pipeline) after delivery to the vicinity of the Site (or such other
construction site) or at such other location as may be approved by
GE Capital in writing, with adequate safeguards as required by GE
Capital, to prevent loss, theft, damage or commingling with other
materials.
6.25 Hazardous Substances. (a) The Partnership agrees
to manage, handle, store, transport, label and provide information
as reasonably requested by GE Capital about all Hazardous
Substances which may exist at the Site and which are involved in
the Project, and to store, contain, label and provide information
about, and provide for the removal and disposition of all Hazardous
Substances which may exist at the Site and which are involved in
the Project in accordance in all material respects with any
Applicable Law including, but not limited to, any applicable
Environmental Law.
(b) The Partnership shall cause the transportation
and/or disposal of Hazardous Substances (whether with its own
employees or through the services of third-party independent
contractors) to comply in all material respects with any Applicable
Law including, but not limited to, any applicable
Environmental Law. The Partnership shall retain only those third
party independent contractors who are properly licensed by each
applicable Governmental Authority and any other applicable
licensing authority to provide the services they are retained to
perform.
(c) The Partnership shall comply in all material
respects with all Applicable Laws including, but not limited to,
all applicable Environmental Laws in connection with the
generation, management, handling, labeling, containing, treatment,
storage, transportation or disposal of Hazardous Substances,
including without limitation, proper and complete preparation of
any required manifests, maintenance of Material Safety Data Sheets,
preparation of a hazardous materials business plan if required by
any Applicable Law including, but not limited to, any applicable
Environmental Law and maintenance of safe working conditions. The
Partnership shall establish a regular schedule for transfer of all
Hazardous Substances off the Site as soon as practicable after its
generation and, in any event, the Partnership shall not allow any
Hazardous Substance to be maintained at the Site for a period
exceeding that permitted by any Applicable Law including, but not
limited to, any applicable Environmental Law. The Partnership
shall monitor the disposition of all Hazardous Waste by contractors
engaged in connection with the transportation and disposal thereof.
6.26 Development Security Letter of Credit Proceeds.
Subject to the prior issuance and continuing effectiveness of the
Development Security Letter of Credit in form and substance
satisfactory to the Power Purchaser, the Partnership shall, on the
Initial Loan Funding Date, use the proceeds of the cash collateral
released to it by the provider of the letter of credit in respect
of the Development Security (as such term is defined in Section 4.1
of the Power Purchase Agreement), together with the proceeds of the
initial Loan to be made on such date, to pay the Project Costs then
shown to be due and owing in the Borrowing Certificate presented to
GE Capital in connection with the
Initial Loan Funding Date.
6.27 Distilled Water Facility Business Plan. The
Partnership shall comply, and shall cause the Steam Host to
comply, in all material respects with the Distilled Water Facility
Business Plan. The Partnership will itself operate the Distilled
Water Facility if the Steam Lease is terminated.
6.28 Fuel Management Plan. The Partnership shall
comply in all material respects with the Fuel Management Plan.
6.29 Qualifying Facility Recertification. Within 180
days after the Initial Loan Funding Date, the Partnership shall
obtain from the FERC an order recertifying the Facility as a
Qualifying Facility (the "QF Recertification Order"), which order
shall be a result of the Partnership's filing of an application,
after review and comment by GE Capital, to the FERC for such
recertification, pursuant to section 292.207(b) of the PURPA
Regulations, describing the Facility as the Transaction Documents
contemplate it will be constructed, owned and operated prior to
and during the Lease Term, and conforming to the Distilled Water
Facility Business Plan.
6.30 Qualifying Facility Status Certificates. (a)
Within five days after the last day of each calendar month during
the Initial QF Standards Measurement Period, the Partnership shall
furnish or cause to be furnished to GE Capital and the Owner
Trustee a Monthly QF Status Certificate covering the period
beginning on the first day of the Initial QF Standards Measurement
Period and ending on the last day of such calendar month.
(b) No later than 25 days prior to the last day of the
Initial QF Standards Measurement Period, the Partnership shall
furnish or cause to be furnished to GE Capital and the Owner
Trustee an Annual QF Status Certificate covering the period
beginning on the first day of the Initial QF Standards Measurement
Period and ending on the day that is 30 days prior to the last day
of the Initial QF Standards Measurement Period.
(c) Within five days after the last day of each
calendar month of each QF Standards Measurement Period, the
Partnership shall furnish or cause to be furnished to GE Capital
and the Owner Trustee a Monthly QF Status Certificate covering the
period beginning on the first day of such QF Standards Measurement
Period and ending on the last day of such calendar month.
(d) No later than 25 days prior to the last day of each
QF Standards Measurement Period, the Partnership shall furnish or
cause to be furnished to GE Capital and the Owner Trustee an
Annual QF Status Certificate covering the period beginning on the
first day of such QF Standards Measurement Period and ending on
the day that is 30 days prior to the last day of such QF Standards
Measurement Period.
Each Monthly QF Status Certificate and Annual QF Status
Certificate furnished to GE Capital and the Owner Trustee pursuant
to this subsection 6.30 shall contain sufficient data and
calculations necessary to verify the statements made in such
certificate.
6.31 Final Completion. The Partnership shall cause the
Date of Final Completion to occur no later than six months
following the Commercial Operation Date.
6.32 Additional Oil Requirement. If the Power
Purchaser shall deliver a notice of Fuel Default to the
Partnership, the Partnership shall thereafter at all times
maintain as much oil as practicable (but never less than 1,300,000
gallons) in storage at the Facility until the Power Purchaser
agrees, in writing, that such Fuel Default and any related
Fuel/Performance Failure has been cured ("Fuel Default" and
"Fuel/Performance Failure" shall have the meanings given such
terms in the Consent of the Power Purchaser).
6.33 LNG Reserve. If at any time CLNG shall file with
a Governmental Authority for authorization to import and/or ship
LNG, the Partnership will promptly notify GE Capital and take such
action with respect to such filing as GE Capital shall reasonably
request, including, without limitation, opposing such filing
and/or petitioning FERC to establish specifications in CLNG's
tariff for such LNG that are satisfactory to GE Capital (the
"Requested Specifications"). At the time of such filing by CLNG,
there shall be established a reserve account (the "LNG Account")
under the Security Deposit Agreement, and all Cash Available for
Distributions shall be deposited in the LNG Account until the LNG
Account contains such amount as GE Capital's Representative
reasonably advises as being required to acquire and install
monitoring and processing equipment necessary for the Facility to
safely and efficiently burn gas from LNG. At such time as CLNG's
request to import LNG is denied by a final nonappealable order
from the appropriate Governmental Authority or FERC establishes
the Requested Specifications as part of CLNG's tariff, GE Capital
shall instruct the Security Agent to release all funds in the LNG
Account as Cash Available for Distributions. If CLNG obtains
permission to import and/or ship LNG and FERC does not establish
the Requested Specifications as part of CLNG's tariff, the
Partnership shall acquire and install the monitoring and
processing equipment recommended by GE Capital's Representative
and may use funds in the LNG Account to pay for the cost (or a
portion thereof) of such equipment and installation.
6.34 Pipeline Facilities. If at any time GE Capital
shall have reason to believe that any of the Pipeline Facilities
shall not be completed in a timely manner (including, without
limitation, by the Commercial Operation Date) or any Gas
Transportation Contract will otherwise not become, or cease to be,
effective by the Commercial Operation Date, the Partnership shall
promptly take all such actions as may be necessary to arrange
alternative firm gas transportation satisfactory to GE Capital to
the extent GE Capital deems such actions necessary.
6.35 Fuel Oil Arrangements. By October 10 of each
year, the Partnership will have signed contracts satisfactory to
GE Capital (which may be a pre-approved standard form) providing
for the firm supply and transportation of fuel oil for the
Facility for the period commencing on November 1 of such year
through March 30 of the following year (the "Winter Heating
Period"). Such contracts shall contain a provision confirming
that they are assigned to the Security Agent as Collateral. At
all times during the Winter Heating Period the Partnership shall
use its best efforts to maintain the oil storage tank at its
maximum level, but in any event it shall maintain at least
1,300,000 gallons at all times.
Section 7. NEGATIVE COVENANTS
So long as the Commitment remains in effect, any Note
remains outstanding and unpaid, the Letter(s) of Credit remain
outstanding, any obligations are owing to the Owner Trustee under
the Lease Documents or any other amount is owing to GE Capital or
the Owner Trustee hereunder or under the Collateral Security
Documents, each of the General Partner and the Partnership hereby
agrees, for the benefit of GE Capital and the Owner Trustee that:
7.1 Merger, Sale of Assets, Purchases, etc. The
Partnership shall not merge into or consolidate with any other
Person, change its form of organization or its business, or
liquidate or dissolve itself (or suffer any liquidation or
dissolution), or sell, lease, transfer or otherwise dispose of any
assets other than sales of electric power or steam pursuant to the
Power Purchase Agreement or the Steam Sales Agreement, sales of
natural gas permitted by the Fuel Management Plan, the sale of the
Facility to the Owner Trustee pursuant to Section 5 hereof and
sales, transfers and other dispositions of assets permitted by
Section 8(f) of the Facility Lease. The Partnership will not
purchase or acquire any assets other than (x) the purchase of
assets in connection with the completion of the Project, (y) the
purchase of assets in the ordinary course of business reasonably
required in connection with the operation and maintenance of the
Project and (z) Permitted Investments. The Partnership will not
create any Subsidiaries.
7.2 Indebtedness. The Partnership shall not create,
incur, assume or suffer to exist any Indebtedness, except
(i) Indebtedness in respect of the Note and the other
Obligations, and (ii) Indebtedness for ordinary course legal and
consulting fees incurred in connection with the development of
the Project.
7.3 Distributions, etc. The Partnership shall not
make any distributions to the Partners or to any other Person in
respect of any interests of the Partners in the Partnership,
whether in cash or other property, or redeem, purchase or
otherwise acquire any interests of the Partners in the
Partnership, or permit any Partner to withdraw any capital from
the Partnership, except for (a) prior to the Lease Closing Date,
the construction management fee and the monthly management fees
and the Success Fee to the extent the same constitute Project
Costs, and (b) after the Lease Closing Date, after delivery to GE
Capital of the certificate referred to in subsection 6.10(h),
on each Basic Rent Payment Date, the making of cash distributions
to the Partners in accordance with the Partnership Agreement and
the Security Deposit Agreement out of Cash Available for
Distributions for the immediately preceding Quarterly Measurement
Period to the extent there is cash available in the Partnership
Security Account and if (i) all amounts then required to be
deposited in the Rent Reserve Account, the Operation and
Maintenance Reserve Account and the Warranty Maintenance Reserve
Account shall have been deposited therein, (ii) all Supplemental
Rent then due and owing shall have been paid, (iii) all
principal, interest and other amounts due in respect of the
Equity Loans have been paid in full, (iv) the Operating Cash Flow
Ratio for the immediately preceding Quarterly Measurement Period
shall be greater than 1.2 to 1.0 and (v) at the time of such
distribution, and immediately after giving effect thereto, no
Lease Default, Lease Event of Default, Default or Event of
Default shall have occurred and be continuing.
7.4 Liens. The Partnership shall not create or suffer
to exist any Lien on any of its properties or assets securing any
Indebtedness or other obligation of the Partnership or any other
Person, other than Permitted Liens. Notwithstanding the
foregoing, the Partnership shall protect and defend (a) its
interest in, and the Security Agent's Liens on, the Collateral
and (b) after the Lease Closing Date, the right, title and
interest of the Owner Trustee in and to the Facility against any
Lien for the performance of work or the supply of materials filed
against the Collateral or the Facility, as the case may be.
The Partnership will promptly pay or cause to be paid
any valid, final judgment enforcing any item, cause the Lien
relating thereto to be removed and otherwise cause such item to
be satisfied of record. The Partnership hereby indemnifies and
holds GE Capital and the Owner Trustee harmless from and against
any loss, costs, expense or damages which may be suffered by any
of them as the result of the failure of the Partnership to
discharge and satisfy any such Lien.
7.5 Nature of Business. The Partnership shall not
engage in any business other than the development, construction
and operation of the Project (and activities incidental thereto),
and the General Partner shall not engage in any business other
than the business of being the managing general partner of the
Partnership.
7.6 Amendment of Contracts, etc. The Partnership will
not, without the prior written consent of GE Capital (and, to the
extent required by the Power Purchase Agreement, the Power
Purchaser), agree to or permit (a) the cancellation, suspension
or termination of any Project Document or Easement Agreement
(except upon the expiration of the stated term thereof), (b) the
assignment of the rights or obligations of any party to any
Project Document or Easement Agreement except (i) as contemplated
by this Agreement or the Collateral Security Documents or (ii) as
permitted without the consent of the Partnership by the terms of
such Project Document or Easement Agreement, or (c) any
amendment, supplement or modification of, or waiver with respect
to any of the provisions of, the CPCN or any Easement Agreement
or Project Document to which the Partnership or the General
Partner is a party or with respect to which the consent of the
Partnership or the General Partner is required (other than any
amendment or modification to a tariff on file with and approved
by a Governmental Authority which sets forth rates, terms and
conditions of utility service and which is incorporated by
reference into a Project Document); provided, however, that the
Partnership or the General Partner may, upon prior written notice
to GE Capital (but without its consent), amend, supplement, waive
or otherwise modify any agreement to which it is a party (other
than the Construction Contract, any other EPC Contract, the Power
Purchase Agreement, any Gas Contract or any other Assigned
Contract) in any manner which does not alter in any material
respect the rights or obligations of the respective parties
thereto. The Partnership shall not, without the prior written
approval of GE Capital (which approval or disapproval shall not
be unreasonably delayed), exercise any election or option, or
give any approval or material notice or demand with respect to
any obligation of any Participant under any Project Document. The
Partnership shall not, without the prior written consent of GE
Capital, enter into any Change Order, change bulletin or other
change to the Construction Contract except in accordance with
subsection 6.7(a). The Partnership will notify GE Capital of all
proposed change orders and promptly deliver copies thereof to GE
Capital. GE Capital agrees to promptly respond to all such
change order requests.
7.7 Investments. The Partnership shall not make any
investments (whether by purchase of stock, bonds, notes or other
securities, loan, advance or otherwise) other than Permitted
Investments.
7.8 Qualifying Facility. Neither the Partnership nor
the General Partner nor the Limited Partner shall take or omit to
take any action, or permit any Person to take or omit to take any
action, which action or omission could foreseeably result in (i)
GE Capital, the Owner Trustee or any of their respective
Affiliates becoming a Public Utility, (ii) the Project ceasing to
be a Qualifying Facility or (iii) the Partnership, the General
Partner or the Limited Partner becoming (A) subject to regulation
under Part II or III of the Federal Power Act to which such
Person would not otherwise be subject, (B) an "electric utility
company" for purposes of the Holding Company Act, (C) subject to
state law or regulation respecting the rates of electric
utilities or state law or regulation respecting the financial and
organizational regulation of electric utilities (except for state
law or regulation implementing Subpart C of 18 C.F.R. Part 292),
(D) subject to regulation as a "steam heating company" under
Article 78, Public Service Commission Law, of the Annotated Code
of Maryland, or (E) subject under any Law to financial,
organizational or rate regulation (except for state law or
regulation implementing Subpart C of 18 C.F.R. Part 292) related
to electric utilities or steam utilities.
7.9 Leases. The Partnership shall not enter into, or
be or become liable under, any agreement for the lease, hire or
use of any real property or of any personal property, except for
(i) the Facility Lease, the Site Lease, the Site Sublease, the
Steam Lease and the Easements and (ii) other leases of personal
property which are not Capital Leases, the aggregate annual
rental under which shall not exceed $150,000 in any fiscal year
of the Partnership.
7.10 Change of Office. The Partnership shall not
change the location of its chief executive office or principal
place of business or the offices where it keeps its records
concerning the Project and all contracts relating thereto from
that existing on the date of this Agreement and specified in
subsection 3.18, unless the Partnership shall have given
GE Capital at least 30 days' prior written notice thereof and all
action necessary or advisable in GE Capital's opinion to protect
and perfect the Liens and security interests with respect to the
right, title, estate and interest of the Partnership in and to
the Collateral created by the Collateral Security Documents is a
party shall have been taken, and GE Capital shall have confirmed
the same in writing.
7.11 Change of Name. The Partnership shall not change
its name without the prior written consent of GE Capital.
7.12 Compliance With ERISA. The Partnership shall not
(a) terminate any Single Employer Plan so as to result in any
material liability to PBGC, (b) engage in or permit any Affiliate
to engage in any "prohibited transaction" (as defined in Section
406 of ERISA or Section 4975 of the Code) involving any Plan
which would subject the Partnership to any material tax, penalty
or other liability, (c) incur or suffer to exist any material
"accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, involving any Plan
subject to Section 412 of the Code or Part 3 of Title I(b) of
ERISA, (d) allow or permit to exist any event (including a
Reportable Event) or condition which represents a material risk
of incurring a material liability to PBGC, or (e) permit the
present value of all benefits vested under all Single Employer
Plans subject to Title IV of ERISA, based on those assumptions
used to fund the Plans, as of any valuation date with respect to
such Plans to exceed the value of the assets of the Plans
allocable to such benefits.
7.13 Transactions With Affiliates and Others. The
Partnership shall not, directly or indirectly, purchase, acquire,
exchange or lease any property from, or sell, transfer or lease
any property to, or borrow any money from, or enter into any
management or similar fee arrangement with, any Affiliate or any
officer, director or employee of the Partnership or the General
Partner, except for (a) the transactions specifically contemplated
by the Project Documents and the Fuel Management Plan and (b)
transactions in the ordinary course of business and upon fair and
reasonable terms no less favorable than the Partnership could
obtain, or could become entitled to, in an arm's length
transaction with a Person which is not an Affiliate.
7.14 Acceptance of Facility. The Partnership shall
not, without the prior written consent of GE Capital, which shall
not be unreasonably withheld or delayed, accept the Facility as
"substantially complete" under the Construction Contract or issue
to the Contractor the "Completion Certificate" (as defined in the
Construction Contract) for the Facility. The Partnership will
promptly forward to GE Capital any notice it receives from the
Contractor pursuant to the Construction Contract requesting that
the Facility be accepted as complete or as substantially complete.
7.15 Payment of Project Costs. The Partnership shall
not pay any Project Cost or expense or any amount otherwise due to
any EPC Contractor or any other Person based on any cost or
expense or any percentage thereof except such Project Costs as are
set forth in a Cost Certificate duly signed by the Partnership,
verified by GE Capital's Representative and accompanied by
invoices and other supporting documentation as GE Capital may deem
necessary to properly document such Project Costs.
7.16 Approval of Additional Project Documents. The
Partnership shall not enter into any Additional Project Document
without the prior written approval of GE Capital and, to the
extent required under the Power Purchase Agreement, the Power
Purchaser.
7.17 Alteration of the Site or Project. Except after
the Lease Closing Date, as permitted or required by the Facility
Lease, the Partnership shall not, without the prior written
consent of GE Capital, alter, remodel, add to, reconstruct,
improve or demolish any material part of the Project or Site or
any other Collateral covered by the Collateral Security Documents,
except as contemplated by or in accordance with the Plans and
Specifications (including any permitted amendments thereto).
7.18 Changes in Plans and Budgets. The Partnership
shall not modify or supplement in any material respect the
Approved Budget or the Plans and Specifications then in effect,
without the prior written consent of GE Capital.
7.19 Capital Expenditures. Except, after the Lease
Closing Date, as permitted or required by the Facility Lease, the
Partnership shall not directly or indirectly make or commit to
make any expenditure in respect of the purchase or other
acquisition (including installment purchases or financing leases)
of fixed or capital assets (excluding normal replacements and
maintenance which are properly charged to current operations),
except for expenditures covered by the Approved Budget.
7.20 Hazardous Substances and Compliance with
Environmental Law. The Partnership shall not cause or permit the
location, production, handling, treatment, generation, recycling,
transportation, incorporation, discharge, emission, release,
storage, deposit or disposal of any Hazardous Substance in, upon,
under, over or from any part of the Project, or permit or engage
in any other conduct or permit the existence of any condition
except in material compliance with all Applicable Laws including,
without limitation, all applicable Environmental Laws. At any
time after the Initial Loan Funding Date when a material liability
under applicable Environmental Laws to the Partnership or the
Project could reasonably be expected to result from any activity,
event or condition, the Partnership, upon request by GE Capital,
shall have additional Environmental Audits and other reports
related to environmental issues, including, but not limited to,
Governmental Actions, prepared by a consultant acceptable to GE
Capital relating to the Project or any issue relating to the
Project in such detail as GE Capital shall reasonably specify, all
at the cost of the Partnership. The Partnership acknowledges and
agrees that GE Capital shall not have any liability or
responsibility for either:
(i) costs, liabilities, expenses, penalties,
damage, loss or injury to human health, property, the
environment or natural resources caused by the presence of
Hazardous Substances on any part of the Site or the Project,
or any violation of any applicable Environmental Law related
in any way to the Partnership, the Site or the Project, or
(ii) abatement and/or clean-up required under any
applicable Environmental Law, including, without limitation,
CERCLA, of any Hazardous Substances located at or in any way
related to the Project, whether by virtue of the interest of
GE Capital in the Site, the Easements, the Facility or the
other Collateral or as the result of the enforcement of its
rights or remedies hereunder with respect to the Project
(including, but not limited to, becoming the owner thereof by
foreclosure or conveyance in lieu of foreclosure) or for any
other reason.
7.21 Sale of Electricity. The Partnership will not
sell any electricity generated by the Facility to any Person other
than the Power Purchaser.
7.22 O&M Letter of Credit. The Partnership shall not
draw upon, or request the Power Purchaser to draw upon, the O&M
Letter of Credit.
7.23 Increased Gas Quantity. The Partnership shall not
establish the "Maximum Daily Quantity" nor the "Minimum Daily
Quantity" pursuant to Section 3(a)(ii) of Appendix I to the Gas
Supply Contract without the prior written consent of GE Capital.
7.24 Washington Gas Balancing. The Partnership will
only exercise its rights to incur a "Daily Negative Imbalances"
pursuant to Section 5.1(f) of the Washington LDC Agreement when
Columbia pipeline and CLNG pipeline balancing services are not
available.
7.25 Capacity Releases. The Partnership shall not
release any of its firm transportation capacity for periods
greater than specified in the Fuel Management Plan without the
prior written consent of GE Capital. At the same time that the
Partnership is obligated to furnish the financial statements
pursuant to subsection 6.9 hereof, the Partnership shall furnish
an annual report on transportation management, specifically
focusing on the use of the Partnership's gas transportation
capacity. The Partnership shall immediately report to GE Capital
any adverse impact on its ability to meet Power Purchaser's
dispatch orders due to any gas transportation capacity release.
Section 8. EVENTS OF DEFAULT
If any of the Events of Default listed below in this
Section 8 shall occur and be continuing, GE Capital may (i) by
notice to the Partnership, declare the Commitment to be
terminated, whereupon the same shall forthwith terminate; and/or
(ii) declare the entire unpaid principal amount of the Loans and
the Note, all interest accrued and unpaid thereon, and all other
Obligations to be forthwith due and payable, whereupon such
amounts shall become and be forthwith due and payable, without
presentment, demand, protest, or notice of any kind, all of which
are hereby expressly waived by the Partnership; and/or
(iii) demand that the Partnership immediately pay to GE Capital an
amount equal to the full amount available to be drawn under the
Letter(s) of Credit whereupon the Partnership shall immediately
make such payment to GE Capital which shall hold such payment as
collateral security for the LOC Reimbursement Obligations of the
Partnership; and/or (iv) foreclose on any or all of the
Collateral; and/or (v) proceed to enforce all other remedies
available to it under Applicable Law. Notwithstanding the
foregoing, if an Event of Default referred to in paragraph (g) or
(h) below shall occur with respect to the Partnership, the General
Partner, the Limited Partner, Panda or Holdings, automatically and
without notice the actions described in clauses (i), (ii) and
(iii) above shall be deemed to have occurred.
Such Events of Default are the following:
(a) Any principal of or interest on the Loans or under
the Note shall not be paid when due; or any fee or any other
amount payable to GE Capital hereunder shall not be paid when
due and shall remain unpaid for five or more days; or any LOC
Reimbursement Obligation shall not be paid when due and shall
remain unpaid for five or more days; or any liquidated damage
amount payable pursuant to the Construction Contract or any
other EPC Contract shall not be offset against amounts owed
to the EPC Contractor by the Partnership under the relevant
EPC Contract or paid when due and shall remain unpaid for 15
or more Business Days; or
(b) Any representation or warranty made by the
Partnership herein or by the Partnership, any Partner or
Holdings in any Transaction Document to which the
Partnership, such Partner or Holdings is a party, or any
representation, warranty or statement in any certificate,
financial statement or other document furnished to
GE Capital by or on behalf of the Partnership hereunder or
the Partnership, any Partner or Holdings under any
Transaction Document, shall prove to have been false or
misleading in any material respect as of the time made or
deemed made and, if such misrepresentation is capable of
being corrected as of a subsequent date and if such
correction is being sought diligently, such misrepresentation
shall not have been corrected as of a day within thirty
calendar days following notice thereof being given to the
Partnership, any Partner or Holdings, as the case may be; or
any of the representations contained in clause (ii) of
subsection 3.13, subsection 3.20 or subsection 3.27 shall
cease to be true and correct at any time; or the Facility
shall at any time cease to be a Qualifying Facility (unless
such event constitutes a Special QF Loss Event); or
(c) (i) The Partnership or the General Partner shall
fail to perform or observe any of its covenants contained in
subsection 6.2(iv) (unless such failure is due solely to the
occurrence of a Special QF Loss Event) or in subsection 6.6;
(ii) the Partnership or the General Partner shall fail to
perform or observe any of its covenants in Section 7 of this
Agreement; or (iii) the Partnership or the General Partner
shall fail to perform or observe any other of its covenants
contained in this Agreement (other than those referred to in
paragraphs (a) and (b) above and in clauses (i) and (ii) of
this paragraph (c)) and each such failure shall continue
unremedied or unwaived for a period of 30 days after written
notice thereof from GE Capital to the Partnership or the
General Partner, or in the event that such failure cannot be
cured during such 30-day period despite the Partnership's or
the General Partner's best efforts to do so, the cure period
shall be extended by an additional 30 days, for a total of 60
days, as long as the failure cannot be cured by the payment of
money, the Partnership or the General Partner has
promptly commenced cure of the default within the initial 30
day period and thereafter diligently and continuously
prosecutes such cure and the failure is of such a nature that
is capable of being cured with 60 days; provided that no cure
period shall be provided for a failure to comply with any such
covenant or obligation if providing such cure period could
reasonably be expected to have a Material Adverse Effect; or
(d) The Partnership, any Partner, Panda, Holdings or
any Affiliate of any thereof, shall fail to perform or observe
any of its covenants or obligations contained in any of the
Loan Documents to which it is a party (except those described
in paragraphs (a), (b) and (c)) or shall breach or otherwise
be in default under any such Loan Document (except to the
extent that the applicable grace period, if any, under such
Loan Document has not expired). The Partnership or any
Participant shall fail to perform or observe in any material
respect the terms or conditions of any Project Document to
which it is a party or shall materially breach or otherwise be
in default under any such Project Document; provided that any
such failure or breach by a Participant (other than any
Specified Participant) shall not constitute an Event of
Default hereunder so long as such failure or breach (i) does
not give rise to a default under the Power Purchase Agreement
and (ii) does not have (nor could it reasonably be expected to
have) a Material Adverse Effect.
(e) The Partnership or the General Partner or any other
Specified Participant shall (i) default in any payment of
principal of or interest on any Indebtedness (other than the
Note) beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was
created; or (ii) default in the observance or performance of
any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, in each case beyond
the period of grace, if any, provided therein, or any other
event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit
the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause, such
Indebtedness to become due prior to its stated maturity or to
realize upon any collateral given as security therefor;
provided, however, with respect to any Specified Participant
other than the Partnership (or any Affiliate thereof) or the
Power Purchaser, any such event described in clause (i) or (ii)
shall not constitute an Event of Default hereunder unless such
event would (x) give rise to a default under the Power Purchase
Agreement or (y) have (or could reasonably be expected to have)
a Material Adverse Effect; or
(f) Any Governmental Action, consent or approval set
forth in Part B of Schedule 2 shall not have been obtained on
or prior to the date specified for receipt of such
approval in Schedule 2; provided, that in the case of a "non
critical" Governmental Action, consent or approval specified
in Part B of Schedule 2, such failure to obtain such "non
critical" Governmental Action, consent or approval would (i)
give rise to a default under the Power Purchase Agreement or
(ii) have (or could reasonably be expected to have) a Material
Adverse Effect; or
(g) Any Specified Participant shall (i) apply for or
consent to the appointment of, or the taking of possession by,
a receiver, custodian, trustee or liquidator of itself or of
all or a substantial part of its property, (ii) admit in
writing its inability, or be generally unable, to pay its
debts as such debts become due, (iii) make a general
assignment for the benefit of its creditors, (iv) commence a
voluntary case under the Bankruptcy Code (as now or hereafter
in effect), (v) file a petition seeking to take advantage of
any other law relating to bankruptcy, insolvency,
reorganization, winding up, or composition or readjustment of
debts, (vi) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against
such Specified Participant in an involuntary case under such
Bankruptcy Code, or (vii) take any partnership or corporate
action for the purpose of effecting any of the foregoing;
provided that, with respect to any Specified Participant other
than the Partnership (or any Affiliate thereof) or the Power
Purchaser, any such action or failure to act shall not
constitute an Event of Default hereunder unless such action or
failure to act would (x) give rise to a default under the
Power Purchase Agreement or (y) would have (or could
reasonably be expected to have) a Material Adverse Effect; or
(h) A proceeding or case shall be commenced after the
date hereof without the application or consent of any
Specified Participant in any court of competent jurisdiction,
seeking (i) its liquidation, reorganization, dissolution,
winding-up, or the composition or readjustment of debts, (ii)
the appointment of a trustee, receiver, custodian, liquidator
or the like of such Specified Participant under any law
relating to bankruptcy, insolvency, reorganization, winding-
up, or composition or adjustment of debts or (iii) a warrant
of attachment, execution or similar process against all or a
substantial part of the assets of such Specified Participant,
and such proceeding or case shall continue undismissed, or any
order, judgment or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in
effect, for a period of 60 or more days, or any order for
relief against such Specified Participant shall be entered in
an involuntary case under such Bankruptcy Code; provided that,
with respect to any Specified Participant other than the
Partnership (or any Affiliate thereof) or the Power Purchaser,
such proceeding or appointment shall not constitute an Event
of Default hereunder unless such action
or failure to act would (x) give rise to a default under the
Power Purchase Agreement or (y) would have (or could
reasonably be expected to have) a Material Adverse Effect; or
(i) A judgment or judgments for the payment of money
in excess of $150,000 shall be rendered against the
Partnership, the Steam Host or the General Partner, and (x)
such judgment or judgments shall remain in effect and
unstayed and unbonded for a period of 30 or more consecutive
days or (y) enforcement proceedings shall be commenced by any
creditor on any such judgments; or
(j) Any material provision of any Project Document
shall at any time for any reason cease to be valid and
binding or in full force and effect or any party thereto
shall so assert in writing; or any material provision of any
Project Document shall be declared to be null and void or the
validity or enforceability thereof shall be contested by any
party thereto or any Governmental Authority; or any
Participant shall deny that it has any further liability or
obligation under any Project Document to which it is a party,
except upon fulfillment of its obligations thereunder;
provided, that with respect to any Project Document (other
than the Gas Contracts, the Power Purchase Agreement and the
Construction Contract), it shall not constitute an Event of
Default under this paragraph if (i) the Partnership shall
obtain a replacement agreement satisfactory in form and
substance to GE Capital (and, to the extent required under
the Power Purchase Agreement, the Power Purchaser) with a
Person reasonably satisfactory to GE Capital (and, to the
extent required, the Power Purchaser) within 30 days after
such invalidity, contest or denial shall have occurred and
(ii) such event does not give rise to a default under the
Power Purchase Agreement; or
(k) Any Collateral Security Document shall cease, for
any reason, to be in full force and effect, or any party
thereto shall so assert in writing; or any Collateral
Security Document shall cease to be effective to grant a
perfected Lien to the Security Agent, for the benefit of the
Owner Trustee and GE Capital, on the Collateral described
therein with the priority purported to be created thereby; or
(l) (i) The General Partner shall at any time cease to
be the managing general partner of the Partnership, or (ii)
the General Partner or the Limited Partner shall transfer,
sell, assign, mortgage, pledge or otherwise dispose of all or
any part of its equity interest in the Partnership or the
Project or (iii) Holdings shall transfer, sell, assign,
mortgage, pledge or otherwise dispose of its interest in any
Partner or (iv) Panda shall cease to directly own 100% of the
capital stock of Holdings or indirectly own 100% of the
capital stock of the General Partner and the Limited Partner,
in each case without GE Capital's prior written consent; provided,
that, the provisions of clauses (iii) and (iv) notwithstanding,
Holdings and Panda may transfer interests in the General
Partner and the Limited Partner so long as (x) any such
transfer is not prohibited by and is made in accordance with
the applicable provisions of the Power Purchase Agreement,
(y) Panda and Holdings (or, if Panda and Holdings merge into
each other, the surviving company of such merger) each
continues to directly or indirectly own at least 51% of the
capital stock of the General Partner and the Limited Partner
and (z) any such transfer is made subject to the Liens in
favor of the Security Agent under the Collateral Security
Documents (and any transferee shall so confirm the same); or
(m) The Partnership shall abandon the Project for a
period longer than 30 consecutive days; or
(n) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section
4975 of the Code) involving any Plan, (ii) any "accumulated
funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan,
or (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate any
Single Employer Plan, which Reportable Event or institution
of proceedings is, in the reasonable opinion of GE Capital,
likely to result in the termination of such Plan for purposes
of Title IV of ERISA, or (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, or (v) the
Partnership or any Commonly Controlled Entity shall, or is,
in the reasonable opinion of GE Capital, likely to incur any
liability in connection with a withdrawal from, or the
insolvency or reorganization of, a Multiemployer Plan, or
(vi) any other event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other
such events or conditions, if any, could subject the
Partnership to any tax, penalty or other liabilities in the
aggregate material in relation to the business, operations,
property or financial or other condition of the Partnership;
or
(o) A Lease Event of Default shall have occurred and
be continuing; or
(p) Any Governmental Action required for (i) the
execution, delivery or performance by the Partnership, any
General Partner or any Reporting Participant of its
respective rights and obligations under any of the
Transaction Documents or (ii) the construction, ownership,
leasing or operation of the Project as contemplated by the
Transaction Documents (including, without limitation, the QF
Recertification Order), shall be revoked, terminated,
withdrawn, modified, suspended or withheld or shall cease to
be in full force or effect, or any proceeding shall be
commenced by or before any Governmental Authority for the
purpose of so revoking, terminating, withdrawing, modifying,
suspending or withholding any such Governmental Action and
such proceeding is not dismissed within 60 days of the
commencement thereof; and such revocation, termination,
withdrawal, modification, suspension, withholding or
cessation or such proceedings have or could reasonably be
expected to have a Material Adverse Effect; or
(q) The Limited Partner or the General Partner shall
breach any of its obligations under the Transfer Agreement;
or the Power Purchaser shall have given the Partnership a
notice of a "Fuel Default" (as defined in the Consent of the
Power Purchaser), which shall have given rise to a
"Fuel/Performance Failure" (as defined in the Consent of the
Power Purchaser); or an "Event of Default" shall occur under
Subsection 15.1 of the Power Purchase Agreement; or
(r) The Partnership shall (i) fail to furnish to GE
Capital an Annual QF Status Certificate pursuant to subsection 6.30(b)
or (d) on the day such certificate is due or (ii) any Annual QF Status
Certificate furnished pursuant to subsection 6.30(b) or (d) shall indicate
that, during the period covered by such certificate, the Steam Host purchased
an amount of steam under the Steam Sales Agreement which was less than the
QF Minimum Steam Take set forth in such certificate; provided, that an Event
of Default shall not be deemed to have occurred so long as either:
(A)(i) such Annual QF Status Certificate
indicates that the Facility met the QF Operating
Standard for the period covered by such certificate and
(ii) on or prior to the day that is 7 days after the
last day of the period covered by such certificate, the
Steam Host shall have purchased under the Steam Sales
Agreement, during the period covered by such certificate
plus this additional 7-day period, an amount of steam at
least equal to the QF Minimum Steam Take as determined
for purposes of such certificate; or
(B)(i) the Partnership shall have obtained from
FERC an order granting the Partnership a waiver of the
QF Operating Standard for the Initial QF Standards
Measurement Period or the QF Standards Measurement
Period, as the case may be, for which such certificate
was furnished and (ii) such order shall have become
final and not subject to appeal and shall not have
become the subject of any judicial or administrative
proceedings.
If any Event of Default shall have occurred and be
continuing, GE Capital may, in addition to any other remedies
which it, the Owner Trustee or the Security Agent may have under
this Agreement, the Facility Lease or any Collateral Security
Document or by statute or by rule of law, upon ten Business Days'
prior written notice to the Partnership, enter upon the Project
and construct, equip and complete the Project in accordance with
the plans and specifications therefor with such changes therein as
GE Capital may from time to time and in its sole discretion deem
appropriate, all at the risk, cost and expense of the Partnership.
GE Capital shall have the right at any and all times to
discontinue any work commenced by it in respect of the Project or
to change any course of action undertaken by it and shall not be
bound by any limitations or requirements of time except as
expressly set forth herein. GE Capital shall have the right and
power (but shall not be obligated) to take over and use all or any
part of the labor, materials, supplies and equipment contracted
for by or on behalf of the Partnership, whether or not previously
incorporated into the Project, all in the sole and absolute
discretion of GE Capital. In connection with any construction of
the Project undertaken by GE Capital pursuant to the provisions of
this paragraph, GE Capital may (a) engage builders, contractors,
architects, engineers and others for the purpose of furnishing
labor, materials and equipment in connection with any construction
of the Project, (b) pay, settle or compromise all bills or claims
which may become Liens against any part of the Project, or which
have been or may be incurred in any manner in connection with the
construction, completion and equipping of the Facility or any
other part of the Project or for the discharge of Liens or defects
in the title of the Site and/or the leasehold estate in the
Facility and/or any other part of the Project, and (c) take such
other action (including the employment of watchmen to protect the
Project) or refrain from acting under this Agreement as GE Capital
may in its sole and absolute discretion from time to time
determine without any limitation whatsoever. The Partnership
shall be liable to GE Capital for all sums paid or incurred for the
construction, completion and equipping of the Project whether the same
shall be paid or incurred pursuant to the provisions of this paragraph or
otherwise, and all payments made or liabilities incurred by
GE Capital under this Agreement of any kind whatsoever shall be
paid by the Partnership to GE Capital upon demand with interest at
the Default Rate to the date of payment to GE Capital. Upon the
occurrence of and during the continuance of any Event of Default,
the rights, powers and privileges provided in this paragraph and
all other remedies available to GE Capital, the Owner Trustee or
the Security Agent under this Agreement, the Facility Lease or any
Collateral Security Document or by statute or by rule of law may
be exercised by GE Capital or such other Person at any time and
from time to time whether or not the Loans shall be due and
payable, and whether or not GE Capital shall have instituted any
foreclosure or other action for the enforcement of any of the
Transaction Documents. For the purpose of carrying out the
provisions and exercising the rights, powers and privileges
granted by this paragraph, the Partnership hereby irrevocably
constitutes and appoints GE Capital its true and lawful attorney-
in-fact to execute, acknowledge and deliver any instruments and to
do and to perform any acts such as are referred to in this
paragraph in the name and on behalf of the Partnership. This
power of attorney is a power coupled with an interest and cannot
be revoked.
Section 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement,
the Note, any other Loan Document nor any of the terms hereof or
thereof may be changed, waived, discharged or terminated unless
such change, waiver, discharge or termination is in writing signed
by the Partnership, GE Capital, the Security Agent (with respect
to any Collateral Security Document) and, to the extent required
by Subsection 8.9(b) of the Power Purchase Agreement, consented to
by the Power Purchaser.
9.2 Notices. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in
writing, by telecopier or by telex and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made
when delivered by hand, or three days after being deposited in the
mail, first class postage prepaid, or, in the case of a nationally
recognized overnight courier service, one Business Day after
delivery to such courier service, or in the case of transmission
by telecopier, when confirmation of receipt is obtained, or in the
case of telex notice, when sent, answerback received, addressed as
follows, or to such other address as may be hereafter notified by
the respective parties hereto and any future holders of the Note:
The Partnership: Panda-Brandywine, L.P.
0000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Chairman,
with a copy to the General Counsel
GE Capital: General Electric Capital Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Vice President,
Energy Project Operations
except that any notice, request or demand to or upon GE Capital
pursuant to subsection 2.2 shall not be effective until received
by GE Capital.
9.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of GE Capital,
any right, remedy, power or privilege hereunder, shall operate as
a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
9.4 Survival. All representations and warranties made
hereunder and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the Note. All
covenants and agreements of the Partnership and the General
Partner contained in Sections 6 and 7 hereof shall survive the
payment in full of amounts outstanding hereunder and under the
Note in accordance with the provisions of such Sections 6 and 7.
The obligation of the Partnership to sell the Facility to the
Owner Trustee in accordance with the terms hereof and to otherwise
enter into the transactions contemplated by the Lease Documents
shall survive the payment in full of the Loans and all other
amounts owing hereunder (whether upon the occurrence of an Event
of Default or otherwise).
9.5 Payment of Expenses and Indemnity. (a) The
Partnership shall, whether or not any Loan is made or any of the
other transactions contemplated by this Agreement are consummated,
pay all reasonable out-of-pocket expenses incurred by GE Capital,
the Security Agent and the Owner Trustee with respect to the
negotiation, preparation, execution and delivery of this Agreement
and the other Loan Documents, any and all transactions
contemplated hereby or thereby and the preparation of any document
reasonably required hereunder or thereunder, including (without
limiting the generality of the foregoing) all reasonable fees and
expenses of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for GE Capital,
Xxxxxxxx & Knight, special Texas counsel for GE Capital, Piper &
Marbury, special Maryland counsel for GE Capital, Xxxxxxx &
Berlin, special regulatory counsel for GE Capital, all reasonable
fees and expenses of GE Capital's engineering consultant,
environmental consultant, fuel consultant and each other
professional consultant retained by it, all fees and expenses of
the Owner Trustee and the Security Agent (including their
reasonable legal fees and expenses), all title and conveyancing
charges, recording and filing fees and taxes, mortgage taxes,
intangible personal property taxes, escrow fees, revenue and tax
stamp expenses, insurance premiums, court costs, surveyors',
appraisers', architects', engineers', consultants', accountants'
and reasonable attorneys' fees and disbursements, and will
reimburse to GE Capital, the Owner Trustee and the Security Agent
all expenses paid by them of the nature described in this
subsection 9.5 which have been or may be incurred by GE Capital,
the Owner Trustee or the Security Agent with respect to any and
all of the transactions contemplated herein. GE Capital may pay
or deduct from the Loan proceeds any of such expenses (but shall
nevertheless be required to provide the Partnership with a
statement itemizing such expenses), and any Loan proceeds so
applied shall be deemed advances under this Agreement and secured
by the Collateral Security Documents.
(b) The Partnership shall pay all reasonable out-of
pocket costs and expenses of GE Capital, the Owner Trustee and the
Security Agent in connection with the preservation of rights
under, and enforcement of, the Loan Documents and the Lease
Documents and the documents and instruments referred to therein or
in connection with any restructuring or rescheduling of the
Obligations (including, without limitation, the reasonable fees
and disbursements of counsel.
(c) The Partnership shall indemnify each Indemnitee
from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages, expenses, obligations, penalties,
actions, judgments, suits, costs or disbursements of any kind or
nature whatsoever (including, without limitation, the reasonable
fees and disbursements of counsel for such Indemnitee in
connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Indemnitee
shall be designated a party thereto) that may at any time
(including, without limitation, at any time following the payment
of the Obligations) be imposed on, asserted against or incurred by
any Indemnitee as a result of, or arising out of, or in any way
related to or by reason of, (i) any of the transactions
contemplated hereby or the execution, delivery or performance of
any Transaction Document, (ii) any violation by the Partnership or
its Affiliates of any applicable Environmental Law, (iii) any
environmental claim arising out of the management, use, control,
ownership or operation of property or assets by the Partnership or
any of its Affiliates, including, without limitation, all on-Site
and off-Site activities involving Hazardous Substances, (iv) the
breach of any environmental representation or warranty set forth
in subsection 3.25, (v) the grant to the Security Agent of any
Lien in any property or assets of the Partnership or any equity
interest in the Partnership, and (vi) the exercise by GE Capital,
the Owner Trustee or the Security Agent of its rights and remedies
(including, without limitation, foreclosure) under any agreements
creating any such Lien (but excluding, as to any Indemnitee, any
such losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements
incurred solely by reason of the gross negligence or willful
misconduct of such Indemnitee). The Partnership's obligations
under this subsection 9.5 shall survive the repayment of all
Obligations and the termination of this Agreement.
9.6 Successors and Assigns. (a) This Agreement shall
be binding upon and inure to the benefit of the Partnership,
GE Capital, all future holders of the Notes and their respective
successors and assigns, except that the Partnership may not assign
or transfer any of its rights or obligations under this Agreement
without the prior written consent of GE Capital. Any assignment
or transfer made by the Partnership without the prior written
consent of GE Capital shall be void and of no effect.
(b) The Partnership acknowledges that GE Capital may,
in the ordinary course of its business and in accordance with
Applicable Law, at any time sell, assign, transfer, grant
participations in, or otherwise dispose of all or any portion of
its Commitment or the Loans (or participations in the Letters of
Credit) or of its right, title and interest therein or in this
Agreement and the Collateral Security Documents (collectively,
"Participations") to one or more banks or other financial
institutions or other entities ("Assignees"); provided that (i) no
such Participation shall, at the time of such Participation,
subject the Partnership to any increased costs or taxes for which
the Partnership has agreed to indemnify GE Capital hereunder and
(ii) such Assignee executes a supplement to this Agreement in
which it agrees to be bound by the provisions of this Agreement
and the provisions of the Consent of the Power Purchaser. The
Partnership agrees that each Assignee shall possess all rights of
"GE Capital" hereunder with respect to its Participation and
further agrees that it will enter into any necessary or desirable
amendment hereto to specifically provide for the same and to
otherwise give effect to such Participation (i.e., to provide for
GE Capital as the agent for the lenders hereunder).
(c) The Partnership authorizes GE Capital to disclose
to any prospective Assignee all financial information in
GE Capital's possession concerning the Partnership, the General
Partner or the Project which has been delivered to GE Capital by
or on behalf of the Partnership pursuant to this Agreement or any
other Transaction Document or which has been delivered to
GE Capital by or on behalf of the Partnership in connection with
GE Capital's credit evaluation of the Partnership and the Project
prior to or after entering into this Agreement; provided, however,
that prior to furnishing any information marked in writing as
being confidential information, GE Capital shall either (i) obtain
Panda's or the Partnership's consent to the furnishing of such
information or (ii) require the prospective Assignee to execute a
reasonably satisfactory confidentiality agreement with respect to
such confidential information in favor of the Partnership.
9.7 Severability. Any provision hereof which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof and without affecting the validity or enforceability of any
provision in any other jurisdiction.
9.8 Headings. The headings of the various sections and
paragraphs of this Agreement are for convenience of reference
only, do not constitute a part hereof and shall not affect the
meaning or construction of any provision hereof.
9.9 Counterparts. This Agreement may be executed by
one or more of the parties hereto on any number of separate
counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
9.10 GE Capital Sole Beneficiary. All conditions of
the obligations of GE Capital to make Loans, to issue the
Letter(s) of Credit and, acting through the Owner Trustee, to
enter into the sale and leaseback of the Facility or to make
available the Equity Loan Facility hereunder are imposed solely
and exclusively for the benefit of GE Capital and its assigns
(including each Assignee) and no other Person shall have standing
to require satisfaction of such conditions in accordance with
their terms or be entitled to assume that GE Capital will refuse
to make Loans in the absence of strict compliance with any or all
thereof and no Person shall, under any circumstances, be deemed to
be a beneficiary of such conditions, any or all of which may be
freely waived in whole or in part by GE Capital at any time if in
its sole discretion it deems it advisable to do so. Inspections
and approvals of plans and specifications, the Project and the
workmanship and materials used therein impose no responsibility or
liability of any nature whatsoever on GE Capital, and no Person shall,
under any circumstances, be entitled to rely upon such inspections and
approvals by GE Capital for any reason. GE Capital is obligated hereunder
solely to make Loans if and to the extent required by this
Agreement.
9.11 Signs. GE Capital shall be permitted to erect and
maintain on the Site until the Date of Final Completion of the
Facility a sign indicating the source of construction financing.
9.12 GOVERNING LAW. THIS AGREEMENT, THE LETTER(S) OF
CREDIT AND THE NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT, THE LETTER(S) OF CREDIT AND THE NOTE SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
9.13 SUBMISSION TO JURISDICTION; WAIVERS. (a) EACH OF
THE PARTNERSHIP AND THE GENERAL PARTNER HEREBY IRREVOCABLY AND
UNCONDITIONALLY:
(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, OR ANY
OTHER LOAN DOCUMENT OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE
COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING
MAY BE BROUGHT IN SUCH COURTS, AND WAIVES ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION
OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES
NOT TO PLEAD OR CLAIM THE SAME;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH
ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY
THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY
SIMILAR FORM OF MAIL), POSTAGE PREPAID TO IT AT ITS ADDRESS
SPECIFIED IN SUBSECTION 9.2 AND, IF APPLICABLE, TO GE CAPITAL
AT ITS ADDRESS SET FORTH IN SUBSECTION 9.2 HERETO OR AT SUCH
OTHER ADDRESS OF WHICH GE CAPITAL OR THE PARTNERSHIP OR THE
GENERAL PARTNER, IF APPLICABLE, SHALL HAVE BEEN NOTIFIED PURSUANT
HERETO; AND
(iv) AGREES THAT NOTHING HEREIN OR THEREIN SHALL
AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO XXX IN
ANY OTHER JURISDICTION.
(b) EACH OF THE PARTNERSHIP, THE GENERAL PARTNER AND GE
CAPITAL HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO OR ARISING OUT
OF THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
9.14 Limitation of Liability. There shall be full
recourse to the Partnership and all of its assets for the
liabilities of the Partnership under this Agreement, the Letters
of Credit and the Note and its other Obligations, but in no event
shall any Partner, Affiliate of any Partner, or any officer,
director or employee of the Partnership, any Partner or their
Affiliates or any holder of any equity interest in any Partner be
personally liable or obligated for such liabilities and
Obligations of the Partnership, except as may be specifically
provided herein or in any other Loan Document to which such
Partner is a party or in the event of fraudulent actions, knowing
misrepresentations, gross negligence or willful misconduct by the
Partnership, any Partner or any of their Affiliates in connection
with the financing contemplated by this Agreement. Subject to the
foregoing limitation on liability, GE Capital may xxx or
commence any suit, action or proceeding against any Partner or any
Affiliate thereof in order to obtain jurisdiction over the
Partnership in order to enforce its rights and remedies hereunder.
Nothing herein contained shall limit or be construed to limit the
liabilities and obligations of any Partner or any Affiliate
thereof in accordance with the terms of any other Loan Document
creating such liabilities and obligations to which such Partner or
Affiliate is a party.
9.15 Release of Easements on Transmission Facilities
and Effluent Pipeline. (a) Upon the transfer by the Partnership
to the Power Purchaser of the Transmission Facilities and the
Easements relating thereto in accordance with the terms of the
Power Purchase Agreement, GE Capital agrees to execute (and cause
the Owner Trustee and the Security Agent to execute) a supplement
to the Deed of Trust and Security Agreement, Security Agreement,
Site Lease and Site Sublease releasing such property from the Lien
thereon granted in favor of the Security Agent (or from the
leasehold interest therein in favor of the Owner Trustee) pursuant
to the terms of such agreements.
(b) Upon the transfer by the Partnership to the County
Commissioners of Xxxxxxx County, Maryland of the Effluent Pipeline
and the Easements relating thereto in accordance with the terms of
the Effluent Water Agreement, GE Capital agrees to execute (and
cause the Owner Trustee and the Security Agent to execute) a
supplement to the Deed of Trust and Security Agreement, Security
Agreement, Site Lease and Site Sublease releasing such property
from the Lien thereon granted in favor of the Security Agent (or
from the leasehold interest therein in favor of the Owner Trustee)
pursuant to the terms of such agreements.
9.16 Personal Property. It is the intention of GE
Capital and the Partnership that the Facility, each Modification
and every portion thereof is severed, and shall be and remain
severed, to the maximum extent permitted by Applicable Law, from
the real estate constituting the Site and the Easements and even
if physically attached thereto, shall retain the character of
personal property, shall be treated as personal property with
respect to the rights of all Persons, shall be removable (subject
to the provisions of the Transaction Documents) and shall not be
or become fixtures or part of the real estate constituting the
Site and the Easements.
9.17 Special Exculpation. No claim may be made by the
Partnership, the General Partner or any other Person claiming by
or through the Partnership or the General Partner against GE
Capital or any of its successors, assigns, Affiliates, directors,
officers, employees, attorneys or agents for any special,
indirect, consequential or punitive damages in respect of any
claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this
Agreement, or any act, omission or event occurring in connection
therewith; and the Partnership hereby waives, releases and agrees
not to xxx upon any claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its
favor.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
PANDA-BRANDYWINE, L.P.
By: Panda Brandywine Corporation, its
General Partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President, Chairman and
Chief Executive Officer
PANDA BRANDYWINE CORPORATION, as the
General Partner
By:
Name: Xxxxxx X. Xxxxxx
Title: President, Chairman and
Chief Executive Officer
GENERAL ELECTRIC CAPITAL CORPORATION
By:
Name: Xxxxxxx X. Xxxxxxx
Title: Attorney-in-Fact
Consented and Agreed:
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as
Owner Trustee
By:________________________________
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
TABLE OF CONTENTS
Page
Section 1. DEFINITIONS 1
1.1 Defined Terms 1
1.2 Other Definitional Provisions 1
Section 2. AMOUNTS AND TERMS OF LOANS 2
2.1 Loans 2
2.2 Procedure for Borrowing 2
2.3 Disbursement of Loans 3
2.4 Note 3
2.5 Fees 3
2.6 Mandatory Prepayments; Special Payments 3
2.7 Computation of Interest and Fees 4
2.8 Payments 8
2.9 Letter of Credit Commitment 9
2.10 Partnership's Obligations in Respect of
Drawings Under Letters of Credit 11
2.11 Letter of Credit Fees 13
2.12 Funding Indemnity 13
2.13 Use of Proceeds 14
2.14 Taxes 14
2.15 Maximum Number of Tranches 14
Section 3. REPRESENTATIONS AND WARRANTIES 15
3.1 Financial Statements 15
3.2 Partnership Existence and Business; Partners 15
3.3 Compliance With Law 16
3.4 Power and Authorization; Enforceable
Obligations 16
3.5 Governmental Actions and Other Consents and
Approvals 18
3.6 No Legal Bar 19
3.7 No Proceeding or Litigation 19
3.8 No Default or Event of Loss 19
3.9 Ownership of Property; Liens 20
3.10 Taxes 20
3.11 Federal Regulations 21
3.12 ERISA 21
3.13 Investment Company Act; etc. 21
3.14 Collateral Security Documents;
Lease Documents 21
3.15 Full Disclosure 22
3.16 Property Rights, Utilities, etc 22
3.17 Compliance with Building Codes, Zoning
Laws, etc. 22
3.18 Principal Place of Business, etc. 23
3.19 Description of Property 23
3.20 Public Utility Status 23
3.21 Material Agreement and Licenses 24
3.22 Sufficiency of Project Documents 24
3.23 Representations and Warranties 25
3.24 Location of Site 25
3.25 Environmental Matters 25
3.26 Fuel Supply 28
3.27 Qualifying Facility 28
3.28 Completion of Project 29
Section 4. CONDITIONS PRECEDENT TO LOANS 29
4.1 Conditions of Initial Loan 29
(a) Notice of Initial Loan Funding 29
(b) Note 29
(c) Title Insurance; Survey 29
(d) Legal Opinions 30
(e) Trust Agreement 31
(f) Collateral Security Documents 31
(g) Power Purchase Agreement 32
(h) Construction Contract 32
(i) Steam Agreements 32
(j) Gas Contracts 32
(k) Operation and Maintenance Agreement 32
(l) Effluent Water Agreement 33
(m) Partnership Agreement; Formation
Documents 33
(n) Project Schedule; Approved Budget 33
(o) Letter of Credit Pledge Agreements;
Ascending Letter of Credit and
Overfunding Letter of Credit 33
(p) Site Lease; Site Sublease 34
(q) GE Capital's Representative's Report 34
(r) Perfection of Liens and Security
Interests 34
(s) Fees 34
(t) Insurance Coverage 34
(u) Preliminary Appraisal 35
(v) Notice to Proceed 35
(w) Easement Agreements 35
(x) Steam Host Arrangements; Qualifying
Facility Status 35
(y) Subcontractors; Suppliers 35
(z) Governmental Actions 35
(aa) No Material Adverse Change 36
(bb) No Material Tax Change 36
(cc) Litigation 36
(dd) Financial Statements 36
(ee) Pledged Stock 36
(ff) Record Searches 37
(gg) Taxes 37
(hh) Gas Supply Assessment 37
(ii) Projections 37
(jj) Environmental Information 37
(kk) Authorizing Actions 38
(ll) Distilled Water Facility Business Plan 38
(mm) Fuel Management Plan 38
4.2 Conditions to All Loans 38
(a) Governmental Actions and Other Consents
and Approvals 38
(b) Qualifying Facility 38
(c) No Change in Law 39
(d) No Material Adverse Change, etc. 39
(e) Payment of Project Costs 39
(f) Evidence of Project Costs; Lien Waivers;
Ascending Letter of Credit 39
(g) Representations and Warranties 40
(h) No Default or Event of Default; Event
of Loss 40
(i) No Force Majeure, Cancellation,
Suspension, Termination, etc. 40
(j) Report of GE Capital's Representative 41
(k) Borrowing Certificate 41
(l) Notice of Borrowing 41
(m) Approved Budget Amount 41
(n) Sufficient Financing 42
(o) Interest Payments and Fees 42
(p) Taxes and Assessments 42
(q) Project Documents 42
(r) Major Subcontractors 42
(s) Additional Project Documents 42
(t) Final Completion, etc. 42
(u) Notices, Stop-Work Orders 43
(v) Title Insurance Continuation 43
(w) Liens 44
(x) No Notice Under Section 15.3 of Power
Purchase Agreement 44
(y) Confirmation Certificate 44
(z) Additional Matters 44
Section 5. SALE AND LEASE OF THE FACILITY 44
5.1 Lease Closing Date 44
5.2 Actions by the Partnership on the Lease
Closing Date 44
5.3 Actions by GE Capital on the Lease Closing
Date 45
5.4 Lease of Facility 45
5.5 Conditions Precedent to Obligations of GE
Capital 45
(a) Substantial Completion 45
(b) Closing Notice; Certificate of Lessor's
Cost 45
(c) Lease Documents 45
(d) Legal Opinions 46
(e) Title 46
(f) Requirements under the Power Purchase
Agreement 47
(g) Operating Budget 47
(h) Title Insurance; Survey 47
(i) Authorizing Actions 47
(j) Filings and Recordings 47
(k) Insurance Coverage 48
(l) Governmental Actions and Other Consents
and Approvals 48
(m) Qualifying Facility 48
(n) No Change in Law 49
(o) No Material Adverse Change, etc. 49
(p) Representations and Warranties 49
(q) No Default or Event of Default; Event of
Loss; Event of Regulation 49
(r) No Force Majeure, Cancellation,
Suspension, Termination, etc. 50
(s) Tax Opinion 50
(t) Lien Searches 50
(u) Appraisal 50
(v) Project Costs 50
(w) Engineer's Report 50
(x) Reserve Account 50
(y) Working Capital 50
(z) Transfer and Recordation Taxes 51
(aa) Payment of Project Costs 51
(bb) Maryland Commission Order 51
5.6 Conditions Precedent to the Obligations of
the Partnership 51
(a) Lease Documents 51
(b) No Change in Law 51
5.7 Basic Rent Factors; Stipulated Loss Values;
Adjustments 51
5.8 Leverage Option; Adjustment of Basic Rent 52
5.9 Equity Loan Facility 52
5.10 Adjustments of Supplemental Rent 53
Section 6. AFFIRMATIVE COVENANTS 54
6.1 Completion of Facility; Monthly Reports 54
6.2 Conduct of Business, Maintenance of
Existence, etc. 55
6.3 Payment of Obligations 55
6.4 Performance Under Other Agreements 55
6.5 General Partner 55
6.6 Insurance Coverage 55
6.7 Inspection of Property; Books and Records;
GE Capital's Representative; Discussions 61
6.8 Compliance With Laws 62
6.9 Financial Statements 63
6.10 Certificates; Other Information 64
6.11 Taxes 66
6.12 Maintenance of Property 66
6.13 Notices 67
6.14 Assignments of Additional Project Documents;
Maintenance of Liens of the Collateral
Security Documents; Future Mortgages 69
6.15 Annual Opinion of Counsel 70
6.16 Employee Plans 70
6.17 Management Letters 70
6.18 Documentation of Project Costs 71
6.19 Disputes 71
6.20 Lists and Approval of Contractors,
Subcontractors and Materialmen 71
6.21 Easements 72
6.22 Use of Project Cash Flow Prior to the Lease
Closing Date 72
6.23 Further Assurances 72
6.24 Storage of Materials 73
6.25 Hazardous Substances 73
6.26 Development Security Letter of Credit
Proceeds 74
6.27 Distilled Water Facility Business Plan 74
6.28 Fuel Management Plan 74
6.29 Qualifying Facility Recertification 74
6.30 Qualifying Facility Status Certificates 74
Section 7. NEGATIVE COVENANTS 76
7.1 Merger, Sale of Assets, Purchases, etc 77
7.2 Indebtedness 77
7.3 Distributions, etc 77
7.4 Liens 78
7.5 Nature of Business 78
7.6 Amendment of Contracts, etc 78
7.7 Investments 79
7.8 Qualifying Facility 79
7.9 Leases 79
7.10 Change of Office 79
7.11 Change of Name 80
7.12 Compliance With ERISA 80
7.13 Transactions With Affiliates and Others 80
7.14 Acceptance of Facility 80
7.15 Payment of Project Costs 81
7.16 Approval of Additional Project Documents 81
7.17 Alteration of the Site or Project 81
7.18 Changes in Plans and Budgets 81
7.19 Capital Expenditures 81
7.20 Hazardous Substances and Compliance with
Environmental Law 81
7.21 Sale of Electricity 82
7.22 O&M Letter of Credit 82
Section 8. EVENTS OF DEFAULT 83
Section 9. MISCELLANEOUS 91
9.1 Amendments and Waivers 91
9.2 Notices 91
9.3 No Waiver; Cumulative Remedies 91
9.4 Survival 92
9.5 Payment of Expenses and Indemnity 92
9.6 Successors and Assigns 93
9.7 Severability 94
9.8 Headings 94
9.9 Counterparts 95
9.10 GE Capital Sole Beneficiary 95
9.11 Signs 95
9.12 GOVERNING LAW 95
9.13 SUBMISSION TO JURISDICTION; WAIVERS 95
9.14 Limitation of Liability 96
9.15 Release of Easements on Transmission
Facilities and Effluent Pipeline 96
9.16 Personal Property 97
9.17 Special Exculpation 97
APPENDIX A Definitions
SCHEDULES
Schedule 1 Description of the Site and Easements
Schedule 2 Governmental Actions
Schedule 3 Recordings and Filings
Schedule 4 Approved Budget
Schedule 5 Project Schedule
Schedule 6 Assumptions
Schedule 7 Equity Loan Terms
Schedule 8 Environmental Matters
Schedule 9 Operating Projections
Schedule 10 Basic Rent Factors and Stipulated Loss Value
Schedule 11 Fuel Management Plan
Schedule 12 Distilled Water Facility Business Plan
Schedule 13 Leverage Option Adjustment
EXHIBITS
Exhibit A Form of Note
Exhibit B-1 Form of Development Security Letter of Credit
Exhibit B-2 Form of Interconnection Letter of Credit
Exhibit B-3 Form of Performance Letter of Credit
Exhibit B-4 Form of O&M Letter of Credit
Exhibit C-1 Form of Borrowing Certificate
Exhibit C-2 Form of Notice of Borrowing
Exhibit C-3 Form of Cost Certificate
Exhibit C-4 Form of Confirmation Certificate
Exhibit D Form of Notice of Initial Loan Funding
Exhibit E Form of Assignment
Exhibit F Form of Consent
Exhibit G Form of Lease Closing Notice
Exhibit H Form of Certificate of Lessor's Cost
Exhibit I-1 Form of Substantial Completion Certificate
Exhibit I-2 Form of Final Completion Certificate
Exhibit J Form of Xxxx of Sale and Severance Agreement
Exhibit K Form of Deed of Trust and Security Agreement
Exhibit L Form of Facility Lease
Exhibit M Form of Site Lease
Exhibit N Form of Site Sublease
Exhibit O Form of Security Deposit Agreement
Exhibit P-1 Form of General Partner Pledge Agreement
Exhibit P-2 Form of Limited Partner Pledge Agreement
Exhibit Q Form of Stock Pledge Agreement
Exhibit R Form of Present Assignment of Power Purchase
Agreement
Exhibit S-1 Form of Ascending Letter of Credit Pledge
Agreement
Exhibit S-2 Form of Overfunding Letter of Credit Pledge
Agreement
Exhibit T-1 Form of Ascending Letter of Credit
Exhibit T-2 Form of Overfunding Letter of Credit
Exhibit U Form of Tax Indemnity Agreement
Exhibit V Form of Security Agreement
Exhibit W Form of Steam Lease
Exhibit X Form of Steam Lessee Security Agreement
Exhibit Y-1 Form of Opinion of Xxxxxxxxxx & Xxxxx
Exhibit Y-2 Form of Opinion of Xxxxx & Xxxxxx
Exhibit Y-3 Form of Opinion of Piper & Marbury
Exhibit Y-4 Form of Opinion of Xxxxxxxx & Xxxxxx
Exhibit Y-5 Form of Opinion of Counsel to Participants
Exhibit Y-6 Form of Opinion of Venable, Baetjer,
Xxxxxx & Civiletti
Exhibit Y-7 Form of Opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx
Exhibit Y-8 Form of Opinion of Xxxxxxx and Berlin
Exhibit Y-9 Form of Opinion of Xxxxxxx & Xxxxxxx
Exhibit Z Form of Trust Agreement
Exhibit A
to
Construction Loan Agreement and Lease Commitment
Form of Note
[See Exhibit 10.245 filed with this Registration Statement]
Exhibit K
to
Construction Loan Agreement and Lease Commitment
Form of Deed of Trust and Security Agreement
[See Exhibit 10.27 filed with this Registration Statement]
Exhibit M
to
Construction Loan Agreement and Lease Commitment
Form of Site Lease
[See Exhibit 10.72 filed with this Registration Statement[
Exhibit N
to
Construction Loan Agreement and Lease Commitment
Form of Site Sublease
[See Exhibit 10.73 filed with this Registration Statement]
Exhibit O
to
Construction Loan Agreement and Lease Commitment
Form of Security Deposit Agreement
[See Exhibit 10.26 filed with this Registration Statement]
Exhibit P-1
to
Construction Loan Agreement and Lease Commitment
Form of General Partner Pledge Agreement
[See Exhibit 10.28 filed with this Registration Statement]
Exhibit P-2
to
Construction Loan Agreement and Lease Commitment
Form of Limited Partner Pledge Agreement
[See Exhibit 10.29 filed with this Registration Statement]
Exhibit Q
to
Construction Loan Agreement and Lease Commitment
Form of Stock Pledge Agreement
[See Exhibit 10.30 filed with Registration Statement]
Exhibit V
to
Construction Loan Agreement and Lease Commitment
Form of Security Agreement
[See Exhibit 10.33 filed with this Registration Statement]
Exhibit X
to
Construction Loan Agreement and Lease Commitment
Form of Steam Leasee Security Agreement
[See Exhibit 10.35 filed with this Registration Statement]
Exhibit Z
to
Construction Loan Agreement and Lease Commitment
Form of Trust Agreement
[See Exhibit 10.34 filed with this Registration Statement]
APPENDIX A to
Construction Loan Agreement
and Lease Commitment
DEFINITIONS
Whenever used in (i) the Construction Loan Agreement
and Lease Commitment, dated as of March 30, 1995 among
Panda-Brandywine, L.P., Panda Brandywine Corporation and General
Electric Capital Corporation, (ii) the Deed of Trust and Security
Agreement, dated as of March 30, 1995, between Panda-Brandywine,
L.P. and Chicago Title Insurance Company, as trustee, (iii) the
Security Deposit Agreement, dated as of March 30, 1995, among
Panda-Brandywine, L.P., Panda Brandywine Corporation, General
Electric Capital Corporation and Shawmut Bank Connecticut,
National Association, as Owner Trustee and Security Agent or (iv)
any of the other Loan Documents or Lease Documents referred to
therein, the following terms shall have the following meanings,
unless otherwise defined therein:
"Accounts": the collective reference to the Operation
and Maintenance Reserve Account, the Rent Reserve Account,
the Insurance and Condemnation Proceeds Account, the
Warranty Maintenance Reserve Account, the Revenue Account,
the Special Payment Account, the Current Account, the
Distribution Reserve Account and the Partnership Security
Account and each other established by the Security Agent
pursuant to the terms of the Security Deposit Agreement.
"Accrued Maintenance Payment": as defined in Section
5(e) of the Lease.
"Additional Construction Contract": direct order
contracts for miscellaneous project facilities and
additional construction contracts, other than the
Construction Contract, entered into by the Partnership with
the consent of GE Capital for the provision of labor,
services and/or material in connection with the design,
engineering, construction, equipping and/or testing of the
Project or any part thereof, including the Effluent Pipeline
and the Transmission Facilities.
"Additional Project Documents": any contract,
agreement or instrument (but excluding Governmental Actions)
related to the development, ownership, construction,
testing, maintenance, repair, operation or use of the
Project entered into by the Partnership and any other Person
subsequent to the Initial Loan Funding Date (including each
Additional Construction Contract) and any consent and
agreement which constitutes an Ancillary Document and is
delivered in connection therewith, but excluding Non-
Material Agreements.
"Adverse Proceedings": any action, investigation, law
or proceeding which seeks to revoke, suspend, delay or
adversely modify any of the Governmental Actions.
"Affiliate": of any designated Person, each Person
which, directly or indirectly, controls or is controlled by
or is under common control with such designated Person. For
the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person,
shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of
voting securities or by contract or otherwise; provided that
for purposes of Section 8(e) of the Stock Pledge Agreement
"control" (and its correlative meanings), as used with
respect to any Person, shall also mean the ownership,
directly or indirectly, of any equity securities of or any
interests in such Person, whether or not it has the power to
direct or cause the direction of the management and policies
of such Person.
"After-Tax Basis": with respect to any payment to be
received by any Person, the amount of such payment
supplemented by a further payment or payments so that, after
deducting from such payments the amount of all Taxes imposed
by any Governmental Authority with respect to such payments
(whether or not such Taxes are payable), the sum of such
payments shall be equal to the original payment to be
received by such Person.
"Ancillary Documents": with respect to each Additional
Project Document, (i) an Assignment in substantially the
form of Exhibit E to the Loan Agreement, together with any
amendments to the Collateral Security Documents necessary or
desirable to grant to the Security Agent, for the benefit of
GE Capital and the Owner Trustee, a first priority perfected
Lien in such Additional Project Document and all property
interests received by the Partnership in connection
therewith, (ii) all recorded financing statements and other
filings required to perfect such Liens, (iii) opinions of
counsel for the Partnership and, to the extent reasonably
required by GE Capital (and to the extent available after
diligent attempts to procure the same) the other parties to
such Additional Project Document, (iv) a Consent to
Assignment with respect to such Additional Project Document
from such other parties substantially in the form of Exhibit
F to the Loan Agreement or otherwise in form and substance
reasonably satisfactory to GE Capital, and (v) evidence of
the Partnership's authorization of such Additional Project
Document, all in form and substance satisfactory to GE
Capital.
"Annual QF Status Certificate": a certificate of an
Authorized Officer of the General Partner setting forth (a)
the QF Minimum Steam Take for the period covered by such
certificate, and (b) whether, during the period covered by
such certificate, the Steam Host has purchased an amount of
steam under the Steam Sales Agreement at least equal to such
QF Minimum Steam Take.
"Applicable Law" or "Law": with respect to any
Governmental Authority, any constitutional provision, law,
statute, rule, regulation, ordinance, treaty, order, decree,
judgment, decision, certificate, holding, injunction,
Governmental Action or requirement of such Governmental
Authority along with the interpretation and administration
thereof by any Governmental Authority charged with the
interpretation or administration thereof. Unless the
context clearly requires otherwise, the term "Applicable
Law" or "Law" shall include each of the foregoing (and each
provision thereof) as in effect at the time in question,
including any amendments, supplements, replacements, or
other modifications thereto or thereof, and whether or not
in effect as of the date of the Loan Agreement.
"Appraisal Procedure": a procedure whereby two
independent appraisers, one appointed by GE Capital and one
by the Lessee, shall agree upon the value, period, amount or
determination then the subject of an appraisal. If either
GE Capital or the Lessee shall determine that a value,
period, amount or determination to be determined under the
Facility Lease or any other Transaction Document cannot
timely be established by agreement, such party shall appoint
its appraiser and give notice thereof to the other party,
which shall appoint its appraiser within 30 days thereafter.
If such other party does not appoint its appraiser within
such thirty-day period, the determination of the first
appraiser made within 60 days thereafter shall be conclusive
and binding. If within 60 days after appointment of the
second of the two appraisers, such appraisers are unable to
agree upon the value, period, amount or determination in
question, they jointly shall appoint a third appraiser
within 10 days thereafter, or, if they do not do so, either
GE Capital or the Lessee may request the American
Arbitration Association, or any organization successor
thereto, to appoint the third appraiser from a panel of
arbitrators knowledgeable on the subject of natural gas-
fired cogeneration plants and the equipment used or operated
in connection therewith. The decision of the third
appraiser shall be given within 60 days after the
appointment thereof. If three appraisers shall be so
appointed, the average of all three determinations shall be
conclusive and binding on GE Capital and the Lessee unless
the determination of one appraiser is disparate from the
middle determination by more than twice the amount by which
the third determination is disparate from the middle
determination, in which case the determination of the most
disparate appraiser shall be excluded and the average of the
remaining two determinations shall be conclusive and binding
on GE Capital and the Lessee. The obligation to pay the
fees and expenses of appraisers incurred in connection with
any Appraisal Procedure relating to any transaction
contemplated by any provision of the Facility Lease or any
other Transaction Document shall be divided equally between
GE Capital and the Lessee (except the obligation to pay such
fees and expenses in connection with any Appraisal Procedure
pursuant to Section 15 of the Facility Lease, which shall be
solely that of the Lessee).
"Approved Budget": the budget prepared by the
Partnership in form and substance satisfactory to GE Capital
and attached to the Loan Agreement as Schedule 4, which sets
forth in reasonable detail all Project Costs anticipated to
be incurred in connection with the development and
construction of the Project, as such Approved Budget may be
amended from time to time with the prior written consent of
GE Capital.
"Ascending Letter of Credit": the letter of credit
issued by Deutsche Bank pursuant to the terms of Section
3.14(a) of the Construction Contract as security for the
performance by the Contractor of its obligations under the
Construction Contract, together with any amendments or
supplements thereto and any successor letters of credit
issued pursuant to such Section 3.14(a), each substantially
in the form of Exhibit T-1 to the Loan Agreement.
"Ascending Letter of Credit Pledge Agreement": the
Ascending Letter of Credit Pledge Agreement to be entered
into by the Partnership in favor of the Security Agent, for
the benefit of GE Capital and the Owner Trustee,
substantially in the form of Exhibit S-1 to the Loan
Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.
"Assigned Contracts": the collective reference to the
Construction Contract, the Raytheon Parent Guaranty, the
Power Purchase Agreement, the Gas Supply Contract, the Gas
Supply Guaranty, the Fuel Management Agreement, the Fuel
Management Guaranty, the Gas Transportation Contracts, the
Effluent Water Agreement, the Steam Sales Agreement, the
Steam Lease, the Steam Lessee Security Agreement, the
Operation and Maintenance Agreement and, from and after the
date any Additional Project Document is executed by the
Partnership, such Additional Project Document.
"Assignee": as defined in subsection 9.6(b) of the
Loan Agreement.
"Assignments": the collective reference to the
Assignments of each of the Assigned Contracts, each
substantially in the form of Exhibit E to the Loan
Agreement, to be executed by the Partnership in favor of the
Security Agent for the benefit of GE Capital and the Owner
Trustee.
"Authorized Officer": shall mean (i) with respect to
any Person that is a corporation, the president, any vice
president, the treasurer, or the chief financial officer of
such Person, (ii) with respect to any Person that is a
partnership, the president, any vice president, the
treasurer or the chief financial officer of a general
partner of such Person, or (iii) with respect to the Owner
Trustee, any officer in its Corporate Trust Administration
department, or (iv) with respect to any Person, such other
representative of such Person that is approved by GE Capital
in writing. No Person shall be deemed to be an Authorized
Officer unless named on a certificate of incumbency of such
Person delivered to GE Capital on or after the Initial Loan
Funding Date.
"Available Cash Flow": for any period (including any
Quarterly Measurement Period), the amount, if any, by which
Project Revenues for such period exceed the sum of (i)
Project Expenses of the Partnership for such period, plus
(ii) payments of Rent for such period, plus (iii) payments
of fees in respect of the Letter(s) of Credit for such
period, plus (iv) debt service (exclusive of any mandatory
prepayments of principal) on the Partnership Equity Loans,
if any, for such period.
"Bankruptcy Code": Title 11 of the United States Code
titled "Bankruptcy," as amended from time to time, and any
successor statute thereto.
"Base Rate": with respect to any Base Rate Loan (or
other amount owing under the Transaction Documents with
respect to which interest is payable at the Base Rate), the
interest equivalent of the 30-day rate on commercial paper
placed on behalf of issuers whose corporate bonds are rated
"AA" by Standard and Poor's Corporation ("S&P"), as made
available on a discount basis or otherwise by the Federal
Reserve Bank of New York for the Business Day immediately
preceding the applicable Reset Date for such Base Rate Loan
(or, with respect to other amounts owing with respect to
which interest is payable at the Base Rate, the Business Day
immediately preceding the date on which such interest begins
to accrue) or (b) in the event that the Federal Reserve Bank
of New York does not make available such a rate, then the
arithmetic average of the interest equivalent of the 30-day
rate on commercial paper placed on behalf of such issuers,
as quoted on a discount basis or otherwise by commercial
paper dealers to GE Capital for the close of business on the
Business Day immediately preceding the applicable Reset Date
for such Base Rate Loan. For purposes of this definition,
the "interest equivalent" of a rate stated on a discount
basis (a "discount rate") for commercial paper of a given
days' maturity shall be equal to the quotient (rounded
upwards to the next higher one-thousandth (.001) of 1%) of
(A) the discount rate divided by (B) the difference between
(x) 1.00 and (y) a fraction the numerator of which shall be
the product of the discount rate times the number of days in
which such commercial paper matures and the denominator of
which shall be 365.
"Base Rate Loans": the Loans that are made or
maintained at an interest rate based on the Base Rate.
"Basic Rent": as defined in Section 3(a) of the
Facility Lease.
"Basic Rent Factors": the percentages set forth in
Schedule C to the Facility Lease as such percentages may be
adjusted from time to time in accordance with the provisions
of Section 3(d) of the Facility Lease.
"Basic Rent Payment Dates": initially, (a) the last
Business Day of the calendar month which is three months
after the Basic Term Commencement Date and thereafter during
the Lease Term, (b) the last Business Day of each calendar
month occurring three months after the immediately preceding
Basic Rent Payment Date.
"Basic Term" or "Basic Lease Term": the period from
and including the Basic Term Commencement Date to and
including the last Business Day of the calendar month which
occurs twenty years after the Basic Term Commencement Date.
"Basic Term Commencement Date": the Lease Closing
Date.
"Xxxx of Sale": the Xxxx of Sale and Severance
Agreement substantially in the form of Exhibit J to the Loan
Agreement.
"Borrowing": a borrowing under the Loan Agreement of
one or more Loans.
"Borrowing Certificate": a certificate of the
Partnership substantially in the form of Exhibit C-1 to the
Loan Agreement.
"Borrowing Date": each date on which GE Capital makes
a Loan under the Loan Agreement.
"Budget Category": as defined in subsection 4.1(n) of
the Loan Agreement.
"Budget Category Amount": as defined in subsection
4.1(n) of the Loan Agreement.
"Business Day": a day other than a Saturday, a Sunday
or any other day on which commercial banks in New York City
or Hartford, Connecticut are required or authorized by Law
to be closed and which is also a day on which dealings in
Dollar deposits are carried out in the London interbank
market.
"Capital Lease": any lease of property, real or
personal, which, in accordance with GAAP, would be required
to be capitalized on a balance sheet of the lessee thereof.
"Cash Available for Distributions": for any period
(including any Quarterly Measurement Period), the amount, if
any, by which Distributable Cash Flow for such period
exceeds the sum of (i) contributions to the Rent Reserve
Account for such period plus (ii) any required prepayments
of principal of the Partnership Equity Loans for such period
plus (iii) debt service on the Partner Equity Loans for such
period.
"Change in Accounting Treatment": any amendment to or
revision or official interpretation of the Statements of
Financial Accounting Standards applicable to lease
transactions by the Financial Accounting Standards Board
that shall become effective subsequent to March 23, 1994 and
on or prior to the Lease Closing Date.
"Change in Tax Law": any amendment to the Code that
shall be enacted into law, become effective or is
promulgated (including any technical correction to any such
effective amendment that subsequently shall be enacted into
law) or any change in the Treasury Regulations (including
any proposed or temporary Treasury Regulations) or any other
administrative interpretation of the Code that shall be
adopted or promulgated, as the case may be, subsequent to
March 23, 1994 and through the end of the session of the
United States Congress which is in office during and
including the later of (a) the year in which the Facility is
placed in service or (b) the year in which the Lease Closing
Date occurs, that causes GE Capital to experience tax
consequences more or less favorable than those assumed in
the Tax Indemnity Agreement, provided, however, a Change in
Tax Law shall not include any favorable change with respect
to investment tax credits or allowances of any kind except
to the extent that GE Capital actually realizes tax benefits
therefrom, and in such case, only to the extent of such
benefits actually realized (which, in both cases, shall be
determined by GE Capital in its reasonable discretion).
"Change Order": a change in the Construction Contract
pursuant to Section 2.15 of the Construction Contract.
"CLNG": Cove Point LNG Limited Partnership, a limited
partnership organized under the laws of the State of
Delaware.
"CLNG Agreement": the FTS Service Agreement dated as
of March 30, 1995 between the Partnership and CLNG, as
supplemented by the letter dated as of March 30, 1995, as
the same may be amended, supplemented or otherwise modified
from time to time in accordance with the terms of such
agreement and the Loan Agreement.
"Closing Date": the Initial Loan Funding Date.
"Code": the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral": the collective reference to all real and
personal property, tangible and intangible, and the proceeds
thereof, subjected from time to time to the Liens intended
to be created by the Collateral Security Documents.
"Collateral Security Documents": the collective
reference to the Deed of Trust and Security Agreement, the
Security Agreement, the Security Deposit Agreement, the
Ascending Letter of Credit Pledge Agreement, the Overfunding
Letter of Credit Pledge Agreement, the Pledge Agreements,
the Steam Lessee Security Agreement, the Assignments, the
Consents to Assignment, each assignment (or consent to
assignment) of an Easement Agreement, and any other
agreement or instrument hereafter entered into by the
Partnership or any other Person which secures the payment of
the indebtedness evidenced by the Notes, the payment of Rent
or the payment or performance of any other covenant or
obligation or liability of the Partnership to GE Capital, or
the Owner Trustee or the Security Agent under the Loan
Agreement, the Facility Lease or any other Transaction
Document.
"Columbia": the Columbia Gas Transmission
Corporation, a corporation organized under the laws of
the State of Delaware.
"Columbia Bankruptcy Proceeding": the proceeding
before the United States Bankruptcy Court for the
District of Delaware captioned as In re: The Columbia
Gas System Inc., and Columbia Gas Transmission
Corporation, Case Nos. 91-803 and 91-804.
"Columbia Facilities": the pipeline improvements and
other facilities to be constructed by Columbia pursuant to
the Columbia Precedent Agreement.
"Columbia FTS Agreement": the Amended and
Restated FTS Service Agreement, dated as of March 23,
1995, between Columbia and the Partnership, as the same
may be amended, supplemented or otherwise modified from
time to time in accordance with the terms of such
agreement and the Loan Agreement.
"Columbia Precedent Agreement": the Precedent
Agreement between Columbia and the Partnership, dated
as of February 25, 1994, as amended by the Amending
Agreement, dated as of March 24, 1995 and supplemented
by a letter dated as of March 30, 1995, as the same may
be amended, supplemented or otherwise modified from
time to time in accordance with the terms of such
agreement and the Loan Agreement.
"Columbia Proceeding": shall mean the proceeding
before FERC in which Columbia will request the issuance of a
certificate of public convenience and necessity, pursuant to
Section 7(c) of the Natural Gas Act (15 U.S.C. 717f(c)),
for authority to construct pipeline facilities to provide
transportation service to the Project under the Columbia FTS
Agreement.
"Commercial Operation Date": the "Actual Commercial
Operation Date", as defined in the Power Purchase Agreement.
"Commitment": GE Capital's obligation to (a) make
Loans to the Partnership pursuant to subsection 2.1 of the
Loan Agreement in an aggregate amount not to exceed the Loan
Commitment and (b) issue the Letters of Credit pursuant to
subsection 2.9 of the Loan Agreement in an aggregate stated
amount not to exceed the Letter of Credit Commitment.
"Commonly Controlled Entity": an entity, whether or
not incorporated, which is under common control with the
Partnership within the meaning of Section 414(b) or (c) of
the Code.
"Confirmation Certificate": a certificate of Price
Waterhouse or such other nationally recognized accounting
firm as GE Capital shall reasonably approve, substantially
in the form of Exhibit C-4 to the Loan Agreement.
"Consent of the Power Purchaser": the Consent and
Agreement, dated April 10, 1995, entered into by the Power
Purchaser, the Partnership, GE Capital, the Security Agent
and the Owner Trustee.
"Consents to Assignment": the collective reference to
each Consent, substantially in the form of Exhibit F to the
Loan Agreement, to be executed and delivered by each party
(other than the Partnership) to each Assigned Contract in
respect of the Assignments.
"Construction Contract": the Amended and Restated
Turnkey Cogeneration Facility Agreement, dated as of
March 30, 1995 between the Contractor and the Partnership in
the form (including all amendments and clarification letters
relating thereto) delivered to GE Capital on the Initial
Loan Funding Date, together with the Raytheon Parent
Guaranty, as the same may thereafter be amended,
supplemented or otherwise modified from time to time in
accordance with the terms of such agreement and the Loan
Agreement.
"Construction Loan Maturity Date": the earliest to
occur of (i) the Lease Closing Date, (ii) the date which
occurs six months prior to the latest required commercial
operations date in the Power Purchase Agreement (which
latest required commercial operations date is, as of the
Initial Loan Funding Date, June 1, 1997), as such date may
be extended pursuant to the terms thereof, and (iii) the
date which occurs 22 months after the Initial Loan Funding
Date.
"Construction Progress Report": a monthly report from
the Partnership to GE Capital and GE Capital's
Representative providing (a) an assessment by the
Partnership of the overall construction progress of the
Project and the Pipeline Facilities and the PEPCO
Interconnection Facility since the date of the last such
report and since the Initial Loan Funding Date, together
with an assessment of how such progress compares to the
Project Schedule, (b) a detailed description of any and all
material problems (including, but not limited to, actual and
anticipated cost overruns, if any) encountered or
anticipated in connection with the Project and the Pipeline
Facilities and the PEPCO Interconnection Facility since the
date of the last such report, together with an assessment of
how such problems may impact the Project Schedule, (c) a
detailed description of the proposed solutions to the
problems referred to in clause (b) above, (d) a statement as
to the anticipated delivery dates of major equipment for the
Project, together with an assessment of how such delivery
dates will impact the Project Costs, Contract Sum and the
Project Schedule and (e) a discussion and/or analysis of
such other matters related to the Project and the Pipeline
Facilities and the PEPCO Interconnection Facility and the
Project Schedule as GE Capital shall reasonably request.
Each such Construction Progress Report shall be executed by
the project manager and certified by an Authorized Officer
of the Partnership.
"Contest": with respect to any Tax, Lien, or claim, a
contest pursued in good faith and by appropriate proceedings
diligently conducted, so long as (i) adequate cash reserves
have been established with respect thereto, (ii) any Lien
filed in connection therewith shall have been removed from
the record by the bonding of such Lien by a reputable surety
company satisfactory to GE Capital, or security satisfactory
to GE Capital is otherwise provided to assure the discharge
of the obligation thereunder and of any additional charge,
penalty or expense arising from or incurred as a result of
such contest, (iii) the failure to pay any such Tax, Lien or
claim during the pendency of such contest would not
otherwise have (nor could it reasonably be expected to have)
a Material Adverse Effect and (iv) the Person subject to any
such Tax, Lien or claim has no knowledge of any material
actual or proposed deficiency or additional assessment that
there is a substantial likelihood of being imposed if a
contest is pursued (but which might otherwise be avoided if
such contest were not pursued).
"Contingent GE Capital Distributions": as defined in
subsection 5.10 of the Loan Agreement.
"Contingent Obligation": with respect to any Person,
any obligation of such Person guaranteeing or intended to
guarantee any Indebtedness, leases, dividends or other
obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of
such Person, whether or not contingent, (i) to purchase any
such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply
funds (a) for the purchase or payment of any such primary
obligation or (b) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of
such primary obligation, or (iv) otherwise to assure or hold
harmless the owner of such primary obligation against loss
in respect thereof; provided, however, that the term
Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course
of business.
"Continuation Endorsement": as defined in subsection
4.2(v) of the Loan Agreement.
"Contract Sum": $121,658,816.
"Contractor": Raytheon Engineers & Constructors, Inc.
(formerly known as United Engineers & Constructors Inc.
d/b/a Raytheon Engineers & Constructors), a Delaware
corporation.
"Contractual Obligation": as to any Person, any
provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is
a party or by which it or any of its property is bound.
"Cost Certificate": a certificate of an Authorized
Officer of the Partnership substantially in the form of
Exhibit C-3 to the Loan Agreement setting forth in detail
specific work items for which payment is being requested,
such Cost Certificate to be accompanied by invoices and
other supporting documents as may be necessary to properly
document all Project Costs identified therein and to
otherwise include sufficient detail to (x) reconcile to the
Approved Budget; (y) verify that sufficient amounts are
available under the Loan Commitment to complete the Project;
and (z) specify any appropriate increase in the stated
amount of the Ascending Letter of Credit.
"CPCN": the Certificate of Public Convenience and
Necessity granted to the Partnership pursuant to Sections
54A and 54B of Article 78, Public Service Commission Law, of
the Annotated Code of Maryland, by Order No. 71487 dated
October 6, 1994 and by Order No. 71529 dated October 27,
1994, as amended by Order No. 71644 dated December 16, 1994,
of the Maryland Commission, and as such certificate may be
further amended from time to time by the Maryland
Commission.
"Current Account: the special account designated by
that name established by the Security Agent pursuant to
subsection 2.2 of the Security Deposit Agreement.
"Date of Final Completion": the date on which:
(a) the Facility has achieved final
acceptance under the Construction Contract;
(b) no defects and/or deficiencies exist
that adversely affect the performance of the Facility
under the performance standards set forth in the
Construction Contract;
(c) the Partnership has received all as-
built drawings of the Facility, test data, and other
technical information required for the Partnership or
operator to operate and maintain the Facility;
(d) the Partnership has received all manuals
and instruction books necessary to operate and maintain
the Facility in a safe, efficient and effective manner;
(e) all special tools to be supplied by any
EPC Contractor or the Partnership have been delivered
to the Site;
(f) all EPC Contractors', contractors' and
subcontractors' personnel, supplies, equipment, waste
materials, rubbish and temporary facilities have been
removed from the Site;
(g) the Partnership has received from each
EPC Contractor (i) any waivers of liens and claims
relating to the Work which were not previously
delivered by such EPC Contractor, and (ii) final
waivers of all liens and claims by each subcontractor
or materialman of such EPC Contractor relating to the
Work;
(h) there are no significant unresolved
disputes, litigation or arbitration proceedings with
respect to any of the EPC Contracts;
(i) each EPC Contractor has performed all
provisions of and delivered all items required by the
relevant EPC Contract in a manner reasonably
satisfactory to the Partnership;
(j) GE Capital has received a Final
Completion Certificate, and if requested by GE Capital,
the Partnership and GE Capital have received from each
EPC Contractor an executed copy of a completion
certificate, such completion certificate to be in form
and substance satisfactory to GE Capital and
GE Capital's Representative;
(k) all Project Costs incurred in connection
with Final Completion of the Facility have been paid;
and
(l) the Commercial Operation Date has
occurred under the Power Purchase Agreement.
"Date of Substantial Completion": the date on
which:
(a) the Facility has achieved "Substantial Completion"
under Section 6.04 of the Construction Contract;
(b) no defects and/or deficiencies exist that
materially adversely affect the performance of the
Facility under the performance standards set forth in
the Construction Contract;
(c) the Partnership has received all manuals and
instruction books necessary to operate and maintain the
Facility in all material respects in a safe, efficient
and effective manner;
(d) all special tools to be supplied by any EPC
Contractor or the Partnership necessary to operate and
maintain the Facility in all material respects have
been delivered to the Site; and
(e) there are no significant unresolved disputes,
litigation or arbitration proceedings with respect to
any of the EPC Contracts.
"Deed of Trust and Security Agreement": the Deed of
Trust and Security Agreement to be entered into between the
Partnership and Chicago Title Insurance Company, as trustee
for the use and benefit of the Security Agent (for the
benefit of GE Capital and the Owner Trustee), substantially
in the form of Exhibit K to the Loan Agreement, as the same
may be amended, supplemented or otherwise modified in
accordance with its terms from time to time.
"Default": any of the events specified in Section 8 of
the Loan Agreement, whether or not any requirement for the
giving of notice, the lapse of time, or both, or for the
happening of any other condition, has been satisfied.
"Default Rate": as to any Loans or other amounts, the
sum of (i) the Interest Rate otherwise applicable to such
Loans or other amounts (which, in the case of other amounts,
shall be deemed to be the Base Rate) plus (ii) two hundred
basis points (2.0%) per annum.
"Development Loan Agreement": the Development Loan
Agreement, dated as of March 23, 1994, among the
Partnership, the General Partner, GE Capital (as agent and
as a lender) and the Contractor, as amended through the
Initial Loan Funding Date.
"Development Loan Closing Date": March 23, 1994.
"Development Security Letter of Credit": the Letter of
Credit referred to by that name in subsection 2.9(a) of the
Loan Agreement.
"Discount Rate": the Treasury Index Rate.
"Distilled Water Facility": the distilled water
facility to be constructed on the Distilled Water Facility
Premises pursuant to the Construction Contract, as more
particularly described in Schedule A to the Steam Lease.
"Distilled Water Facility Business Plan": the
Distilled Water Facility Business Plan set forth in Schedule
12 to the Loan Agreement.
"Distilled Water Facility Premises": that portion of
the Site described in Schedule B to the Steam Lease, on
which the Distilled Water Facility is to be located.
"Distributable Cash Flow": for any period (including
any Quarterly Measurement Period), the amount, if any, by
which Project Revenues of the Partnership for such period
exceed the sum of (i) Project Expenses of the Partnership
for such period, plus (ii) payments of Rent for such period
plus (iii) payments of fees in respect of the Letter(s) of
Credit for such period, plus (iv) contributions to the
Operation and Maintenance Reserve Account for such period,
plus (v) debt service (exclusive of any mandatory
prepayments of principal) on the Partnership Equity Loans
for such period.
"Distribution Reserve Account": the special account
designated by that name established by the Security Agent
pursuant to subsection 2.2 of the Security Deposit
Agreement.
"Dollars" and "$": dollars in lawful currency of the
United States of America.
"Easements": any easement, license, right-of-way or
similar real property interest or right that is the subject
of an Easement Agreement.
"Easement Agreements": each agreement set forth in
Schedule 1 to the Loan Agreement entered into prior to the
Initial Loan Funding Date and each similar agreement entered
into subsequent thereto granting or assigning to the
Partnership ownership of or other rights in respect of any
easement, license, right-of-way or similar real property
interest or right relating to the Facility or the Site or to
the transportation and delivery of Fuel, water, electricity
or steam to or from the Facility or the Site or to ingress
or egress to or from the Facility or the Site, each such
agreement to be satisfactory in form and substance to GE
Capital.
"Effluent Pipeline": the pipeline to be constructed
pursuant to the terms of the Effluent Water Agreement to
transport water to the Facility.
"Effluent Water Agreement": the Treated Effluent Water
Purchase Agreement dated as of September 13, 1994 between
the Partnership and the County Commissioners of Xxxxxxx
County, Maryland, together with the Water Easement
Maintenance Agreement, in the form (including all amendments
and clarification letters relating thereto) delivered to GE
Capital on the Initial Loan Funding Date, as the same may be
amended, supplemented or otherwise modified from time to
time in accordance with the terms of such agreement and the
Loan Agreement.
"Environmental Audit": each report or audit relating
to environmental conditions at the Site (including the
environmental reports of (i) Environmental Consulting &
Technology, Inc. ("ECT") dated September 23, 1993, October
18, 1993 January 3, 1994, March 21, 1994 and September 1994,
(ii) International Engineers, Inc. dated July 13, 1992 and
December 17, 1992, (iii) CSC, Inc. dated April 13, 1994 and
October 10, 1994 and (iv) TPS Technologies dated April 14,
1994 and the audit thereof by ENVIRON Corporation dated
January 11, 1995), each such report or audit to be
satisfactory in form and substance to GE Capital and to be
performed by an engineering firm satisfactory to GE Capital.
"Environmental Law": as to any Person, any current or
future law, treaty, rule, code, ordinance, regulation,
permit, certificate, order, interpretation or license of any
Governmental Authority or any determination of an arbitrator
or a court or other Governmental Authority, relating to the
presence, use, generation, handling, treatment, storage,
transport, recycling, emission, spill, leak, seepage,
discharge, release, threatened release or disposal of
Hazardous Substances, the occurrence or remediation of any
discharge of Hazardous Substances, environmental protection
or any other environmental matter.
"Environmental Proceeding":
(a) any litigation, proceeding, consent order or
agreement under any Environmental Law whether judicial or
administrative (including receipt by the Partnership or
General Partner of any document) relating to:
(i) the happening of any event
involving the use, recycling, emission, spill, leak,
seepage, discharge, release, threatened release, clean-
up or remediation of any Hazardous Substance in such
quantities or under such conditions so as to require
under any Environmental Law removal or other remedial
actions which have not yet been taken; or
(ii) any complaint, order, citation
or notice filed or issued under any Environmental Law
by any Person (including, without limitation, the
United States Environmental Protection Agency) alleging
violation of any Environmental Law; or
(b) any notice from any Person of:
(i) any violation or alleged
violation of any Environmental Law or any allegation
that the Partnership may have any liability under any
Environmental Law; or
(ii) the commencement of any
environmental remediation or other similar remedial or
corrective activity pursuant to or in accordance with
any Environmental Law.
"EPA": the United States Environmental Protection
Agency.
"EPC Contractor": the collective reference to the
Contractor and each party (other than the Partnership) to an
Additional Construction Contract.
"EPC Contracts": the collective reference to the
Construction Contract and each Additional Construction
Contract.
"Equity Borrower": either the Partnership or the
Partners, as the case may be, as borrower under the Equity
Loan Facility.
"Equity Loan Facility": as such term is defined in
subsection 5.9 of the Loan Agreement.
"Equity Loans": as such term is defined in subsection
5.9 of the Loan Agreement.
"ERISA": the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as
applied to a Eurodollar Loan, the aggregate (without
duplication) of the rates (expressed as a decimal fraction)
of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or
other Governmental Authority having jurisdiction with
respect thereto), as now and from time to time hereafter in
effect, dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board) maintained by a
member bank of the Federal Reserve System; provided, that
the Eurocurrency Reserve Requirements shall be deemed to be
zero, unless GE Capital has, in accordance with subsection
9.6 of the Loan Agreement assigned any portion of its rights
and obligations under the Loan Agreement to any financial
institution which is a member of the Federal Reserve System
and is required to maintain reserve requirements prescribed
for eurocurrency funding by any regulation of the Board or
any other Governmental Authority having jurisdiction with
respect thereto, in which event the Eurocurrency Reserve
Requirements shall be as set forth above. Eurodollar Loans
shall be deemed to constitute Eurocurrency Liabilities and
to be subject to such reserve requirements without benefit
of or credit for proration, exceptions or offsets which may
be available from time to time to a lender under
Regulation D.
"Eurodollar Base Rate": with respect to any Interest
Period, (a) the rate per annum determined on the basis of
the offered rates for deposits in Dollars for a period equal
to such Interest Period reported by Telerate News Service on
the day that is two Business Days prior to the beginning of
such Interest Period or (b) in the event that the rate
described in clause (a) of this definition ceases to be
available, the rate as determined from such financial
reporting service or other information as shall be mutually
acceptable to GE Capital and the Partnership.
"Eurodollar Loan": the Loans that are made or
maintained at an interest rate based on the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during
each Interest Period pertaining to a Eurodollar Loan, a rate
per annum (rounded upwards to the nearest whole multiple of
1/16th of one percent) determined for such day in accordance
with the following formula:
Eurodollar Base Rate
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": as defined in subsection 2.15 of
the Loan Agreement.
"Event of Default": any of the events specified in
Section 8 of the Loan Agreement, provided that any
requirement for the giving of notice, the lapse of time, or
both, or for the happening of any other condition, has been
satisfied.
"Event of Loss": (i) the actual or constructive total
loss of all or substantially all of the Facility, or the
condemnation, confiscation or seizure of, or requisition of
title to, or requisition by any Governmental Authority (for
a period exceeding the lesser of six months or the remainder
of the Basic Term or any Renewal Term then in effect) of the
use of all or substantially all of the Facility; (ii) the
cessation or material impairment of the operation of the
Facility as a result of damage to the Facility or (iii) the
loss, theft, destruction or damage of, or condemnation,
confiscation or seizure of, or requisition of title to, or
requisition by any Governmental Authority of the use of,
such portion of the Project as shall render the Facility
unable to operate at the level of operation prior to the
occurrence of such event or as a Qualifying Facility (in a
situation in which clause (i) is not applicable).
"Event of Regulation": GE Capital or any of its
Affiliates becoming a Public Utility solely by reason of the
execution, delivery and performance of the Lease Documents
or the ownership or leasing of the Facility by the Owner
Trustee under the Lease Documents; provided, that no event
resulting solely from a Special QF Loss Event shall be
deemed an Event of Regulation.
"Expenses": liabilities, obligations, losses, damages,
penalties, claims (including, without limitation, claims
involving liability in tort, strict or otherwise), actions,
suits, judgments, out-of-pocket costs, expenses and
disbursements (including reasonable legal and other
professional fees and expenses and costs of investigation)
of any kind and nature whatsoever.
"Facility": the (a) gas-fired cogeneration facility
having a net rating of approximately 230 megawatts (measured
at the Site) to be constructed on the Site pursuant to the
Construction Contract, including all equipment and systems
set forth in the Construction Contract and any other EPC
Contract, if any, and (b) the Distilled Water Facility, all
as more particularly described in Schedule A to the Facility
Lease.
"Facility Lease": the Facility Lease to be entered
into between Lessor and the Lessee, substantially in the
form of Exhibit L to the Loan Agreement, as the same may be
amended, supplemented or otherwise modified from time to
time in accordance with its terms.
"Fair Market Rental Value": the value, which shall not
in any event be less than zero, that would be obtained in an
arm's-length transaction for cash between an informed and
willing lessee and an informed and willing lessor, neither
of whom is under any compulsion to lease, for the use of the
Facility for the appropriate period. Except as required to
be determined pursuant to Section 15 of the Facility Lease,
Fair Market Rental Value shall be determined on the
assumptions that: (i) the Facility is in at least the
condition and state of repair required under Section 8(a) of
the Facility Lease; (ii) the Partnership is in compliance
with the requirements of the Transaction Documents; and
(iii) during such lease period, Basic Rent will be payable
in equal quarterly installments in arrears.
"Fair Market Sales Value": the value, which shall not
in any event be less than zero, that would be obtained in an
arm's-length transaction for cash between an informed and
willing purchaser and an informed and willing seller,
neither of whom is under any compulsion to purchase or sell,
respectively, for the ownership of the Facility. Except as
required to be determined pursuant to Sections 9 and 15 of
the Facility Lease, Fair Market Sales Value of the Facility
shall be determined on the assumptions that: (i) the
Facility is in at least the condition and state of repair
required under Section 8(a) of the Facility Lease and
(ii) the Partnership is in compliance with the requirements
of the Transaction Documents.
"Federal Power Act": the Federal Power Act of 1935, as
amended from time to time.
"FERC": the Federal Energy Regulatory Commission or
any successor or analogous federal Governmental Authority.
"Final Completion": final completion of the Facility,
which shall be deemed to have occurred when the Date of
Final Completion for the Facility shall have occurred and
the conditions described in clauses (a) through (l) of the
definition of "Date of Final Completion" shall have been
satisfied.
"Final Completion Certificate": a certificate
substantially in the form of Exhibit I-2 to the Loan
Agreement, signed by the Partnership.
"First Amendment": as defined in subsection 4.1(g) of
the Loan Agreement.
"Fixed Rate Renewal Basic Rent": for each three-month
period during the Fixed Rate Renewal Term, if any, an amount
equal to 50% of the average of the installments of Basic
Rent payable by the Lessee during the Basic Term.
"Fixed Rate Renewal Option": as defined in
Section 12(a) of the Facility Lease.
"Fixed Rate Renewal Term": as defined in Section 12(a)
of the Facility Lease.
"Fuel": all fuel purchased or acquired by the
Partnership, or on the Partnership's behalf, as fuel for the
operation of the Facility, including without limitation all
natural gas purchased, acquired or transported pursuant to
the Gas Contracts.
"Fuel Consultant": X.X. Xxxx Resources, Inc.
"Fuel Management Agreement": the Fuel Supply
Management Agreement, dated as of March 30, 1995, between
Cogen Development Company, a Michigan corporation, and the
Partnership in the form (including all amendment and
clarification letters relating thereto) delivered to GE
Capital on the Initial Loan Funding Date, as such Fuel
Supply Management Agreement may thereafter be amended,
supplemented, or otherwise modified from time to time in
accordance with the terms of such agreement and the Loan
Agreement.
"Fuel Management Guaranty": the Guaranty of the Fuel
Supply Management Agreement, dated as of March 30, 1995, by
MCN Investment Corporation, a Michigan corporation, in favor
of the Partnership, as such Guaranty may thereafter be
amended, supplemented or otherwise modified from time to
time in accordance with the terms of such agreement and the
Loan Agreement.
"GAAP": generally accepted accounting principles as in
effect from time to time in the country under whose laws the
relevant Person is organized.
"Gas Contracts": the collective reference to the Gas
Supply Contract, the Fuel Management Agreement, the Gas
Supply Guaranty , the Fuel Management Guaranty and the Gas
Transportation Contracts.
"Fuel Management Plan": the Fuel Management Plan set
forth in Schedule 11 to the Loan Agreement.
"Gas Supplier": Cogen Development Company, a Michigan
corporation.
"Gas Supply Contract": the Gas Sales Agreement, dated
as of March 30, 1995, between the Gas Supplier and the
Partnership, in the form (including all amendments and
clarification letters relating thereto) delivered to GE
Capital on the Initial Loan Funding Date, as such Gas Sales
Agreement may thereafter be amended, supplemented or
otherwise modified from time to time in accordance with the
terms of such agreement and the Loan Agreement.
"Gas Supply Guaranty": the Guaranty of the Gas Sales
Agreement, dated as of March 30, 1995, by MCN Corporation, a
Michigan corporation, in favor of the Partnership, as such
Guaranty may thereafter be amended, supplemented or
otherwise modified from time to time in accordance with the
terms of such agreement and the Loan Agreement.
"Gas Transportation Contracts": the Columbia Precedent
Agreement, the Columbia FTS Agreement, the CLNG Agreement
and the Washington LDC Agreement.
"Gas Transporters": the collective reference to
Columbia, CLNG and Washington.
"GE Capital": General Electric Capital Corporation, a
New York corporation.
"GE Capital's Representative": as defined in
subsection 6.7 of the Loan Agreement.
"General Partner": Panda Brandywine Corporation, a
Delaware corporation.
"General Partner Pledge Agreement": the General
Partner Pledge Agreement to be entered into between the
General Partner and the Security Agent, for the benefit of
GE Capital and the Owner Trustee, substantially in the form
of Exhibit P-1 to the Loan Agreement, as the same may be
amended, supplemented or otherwise modified from time to
time in accordance with the terms of such agreement and the
Loan Agreement.
"GNP Deflator": as defined in the Power Purchase
Agreement.
"Governmental Action": all permits, authorizations,
registrations, consents, approvals, waivers, exceptions,
variances, claims, orders, judgments and decrees, licenses,
exemptions, publications (to the extent legally binding upon
the Partnership, any other Participant or the Project),
filings (other than filings of a purely ministerial nature),
notices to and declarations of or with any Governmental
Authority and shall include, without limitation, all siting,
environmental, construction and operating permits and
licenses that are required for the construction, use and
operation of the Project.
"Governmental Authority": any nation or government,
any state or other political subdivision thereof, and any
entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"Hazardous Substance": (a) any toxic, caustic or
otherwise hazardous substance, including, without
limitation, petroleum, its derivatives, by-products and
other hydrocarbons, solid wastes, contaminants,
polychlorinated biphenyls, paint containing lead, urea,
formaldehyde foam insulation, asbestos and discharge of
sewage or effluent, whether or not regulated under Federal,
state or local environmental statutes, ordinance, rules,
regulations or orders; (b) any "hazardous substance,"
"extremely hazardous substance," "hazardous waste," "solid
waste," "pollutant," "toxic pollutant," "toxic substance,"
"oil" or "contaminant" as those terms are used in or defined
pursuant to any Environmental Law of the United States, the
State of Maryland, the District of Columbia or relevant
local government, including, without limitation, the
Comprehensive Environmental Response, Compensation, and
Liability Act, as amended, 42 U.S.C. 9601 et seq., the
Safe Drinking Water Act, as amended, 42 U.S.C. 300f et
seq., the Oil Pollution Act, as amended, 33 U.S.C. 2701
et seq., the Federal Clean Air Act, as amended, 42 U.S.C.
7401 et seq., the Solid Waste Disposal Act, as amended,
42 U.S.C. 6901 et seq., the Toxic Substances Control Act,
as amended, 15 U.S.C. 2601 et seq., the Federal Water
Pollution Control Act, as amended, 33 U.S.C. 1251 et
seq., the Emergency Planning and Community Right to-Know
Act, as amended, 42 U.S.C. 11001 et seq., and any
regulations promulgated pursuant to the foregoing statutes;
and (c) any other substance, waste, pollutant, or material,
the presence, use, handling, generation, treatment, storage,
disposal, transport, recycling, emission, spill, leak,
seepage, discharge, release or threatened release of which
is regulated by, or could result in the imposition of
liability under, any statute, ordinance, rule or regulation
of the United States, the State of Maryland, the District of
Columbia, relevant local government or other applicable
Governmental Authority, including, but not limited to, the
foregoing cited statutes and rules.
"Holding Company Act": the Public Utility Holding
Company Act of 1935, as amended from time to time.
"Holdings": Panda Holdings, Inc., a Delaware
corporation. If Holdings merges into Panda, all references
in the Transaction Documents to "Holdings" shall be deemed
references to Panda from and after the time of such merger.
"Indebtedness": as to any Person, (a) indebtedness of
such Person for borrowed money or for the deferred purchase
price of property or services (other than obligations under
agreements for the purchase of goods and services in the
normal course of business which are not more than 60 days
past due); (b) obligations of such Person under Capital
Leases; (c) Contingent Obligations of such Person, including
obligations of such Person under direct or indirect
guarantees in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness
or obligations of others of the kinds referred to in clause
(a) or (b) above (other than endorsements of negotiable
instruments in the ordinary course of business); and (d) any
obligation of such Person or a Commonly Controlled Entity to
a MultiEmployer Plan.
"Indemnitees": GE Capital, any Affiliate thereof,
Shawmut Bank Corporation, National Association, in its
individual capacity, as Owner Trustee and as Security Agent,
and their respective successors, assigns (including any
Assignee), agents, officers, shareholders, directors and
employees.
"Initial Loan Funding Date": the date set forth in the
Notice of Initial Loan Funding as the date on which GE
Capital is to make its initial Loan under the Loan
Agreement.
"Initial Operation and Maintenance Reserve Deposit":
$1,000,000.
"Initial QF Standards Measurement period": (a) the 12-
month period beginning with the date the Facility first
produces electricity or (b) any successor or analogous
period specified under the PURPA Regulations for the purpose
of determining whether the Facility is in compliance with
the QF Operating Standard and the QF Efficiency Standard and
that includes the date the Facility first produces
electricity.
"Initial Rent Reserve Deposit": $2,400,000.
"Insurance and Condemnation Proceeds": as such term is
defined in the Security Deposit Agreement.
"Insurance and Condemnation Proceeds Account": the
special account designated by that name established by the
Security Agent pursuant to subsection 2.2 of the Security
Deposit Agreement.
"Insurance and Condemnation Proceeds Deposits": as
such term is defined in the Security Deposit Agreement.
"Interconnection Letter of Credit": the Letter of
Credit referred to by that name in subsection 2.9(a) of the
Loan Agreement.
"Interest Payment Date": (a) as to any Base Rate Loan,
the next-to-last Business Day of each March, June, September
and December to occur while such Loan is outstanding, (b) as
to any Eurodollar Loan having an Interest Period of three
months or less, the last day of such Interest Period, and
(c) as to any Eurodollar Loan having an Interest Period of
six months, the next-to-last Business Day of the calendar
month ending three months after the first day of such
Interest Period and the last day of such Interest Period.
"Interest Period": with respect to each Eurodollar
Loan:
(a) initially, the period from and including
the Borrowing Date with respect to such Eurodollar Loan
to but excluding the next-to-last Business Day of the
calendar month ending one, two, three or six months
thereafter, as selected by the Partnership in its
Notice of Borrowing given with respect thereto; and
(b) thereafter, each period from and
including the last day of the next preceding Interest
Period applicable to such Eurodollar Loan to but
excluding the next-to-last Business Day of the calendar
month ending one, two, three or six months thereafter,
as selected by the Partnership by irrevocable notice to
GE Capital in accordance with subsection 2.7(e) of the
Loan Agreement not less than three Business Days prior
to the last day of the then current Interest Period
with respect thereto;
provided that the foregoing provisions are subject to the
following:
any Interest Period that would otherwise
extend beyond the Construction Loan Maturity Date shall
end on the Construction Loan Maturity Date or, if such
day shall not be a Business Day, on the preceding
Business Day.
"Interest Rate": (a) as to Eurodollar Loans for any
applicable Interest Period, the rate of interest per annum
equal to the sum of (i) the Eurodollar Rate for such
Interest Period and (ii) two hundred fifty basis points
(2.50%) and (b) as to Base Rate Loans for any monthly
period, the rate of interest per annum equal to the sum of
(i) the Base Rate for the applicable monthly period and
(ii) two hundred fifty basis points (2.50%).
"Law": see "Applicable Law".
"Lease Closing Date": as defined in subsection 5.1 of
the Loan Agreement.
"Lease Closing Notice": the notice of closing to be
delivered pursuant to subsection 5.1 of the Loan Agreement
substantially in the form of Exhibit G to the Loan
Agreement.
"Lease Debt": as defined in subsection 5.8 of the Loan
Agreement.
"Lease Default": any of the events specified in
Section 14 of the Facility Lease, whether or not any
requirement for the giving of notice, the lapse of time, or
both, or for the happening of any other condition has been
satisfied.
"Lease Documents": the collective reference to the
Xxxx of Sale, the Site Lease, the Site Sublease, the Present
Assignment and the Facility Lease.
"Lease Event of Default": as defined in Section 14 of
the Facility Lease.
"Lease Financing": the lease of the Facility pursuant
to the Facility Lease and consummation of the transactions
contemplated by the Lease Documents.
"Lease Term": the Basic Term and, if the Facility
Lease is renewed pursuant to Sections 12 and 13 of the
Facility Lease, each Renewal Term.
"Lease Termination Date": the last day of the Lease
Term (whether occurring by reason of a termination or
expiration of the Lease Term).
"Lease Transaction Expenses": the expenses,
disbursements and costs incurred in connection with (i) the
preparation, execution and delivery of the Transaction
Documents and the consummation of the transactions
contemplated thereby for the Borrowing Dates and the Lease
Closing Date and (ii) any other costs relating to the
transactions contemplated by the Transaction Documents which
may not, for tax purposes, be borne by Lessee.
"Lease Year": initially, the period commencing on the
Lease Closing Date and ending on the first anniversary
thereof and, thereafter, each yearly period commencing on
the last day of the prior Lease Year and ending twelve
months thereafter, until the Lease Termination Date.
"Lessee": the Partnership, as lessee under the
Facility Lease.
"Lessor": the Owner Trustee, as lessor under the
Facility Lease.
"Lessor's Cost": the least of (a) all Project Costs,
(b) the outstanding amount of the Loans (excluding the
Equity Loans, if any) on the Lease Closing Date not repaid
in cash on such date and (c) $215,000,000; provided that in
no event shall Lessor's Cost exceed the appraised value of
the Facility as set forth in the appraisal referred to in
subsection 5.5(u) of the Loan Agreement.
"Lessor's Liens": Liens against the Facility or the
Site that result from acts of, or any failure to act by, or
as a result of claims against, the Lessor unrelated to the
ownership of the Facility or any other part of the Project,
its status as Lessor under the Facility Lease, its interest
in the Site Lease or the transactions contemplated by the
Transaction Documents.
"Letters of Credit": the PEPCO Letters of Credit.
"Letter of Credit Commitment": $12,453,460 as the same
may be reduced pursuant to subsection 2.9(f) of the Loan
Agreement.
"Letter of Credit Commitment Period": the period from
and including the date of the Loan Agreement to and
including the Letter of Credit Commitment Termination Date.
"Letter of Credit Commitment Termination Date": the
fifteenth anniversary of the Basic Term Commencement Date or
such earlier date on which the Letter of Credit Commitment
shall terminate.
"Letter of Credit Issuance Termination Date": the date
occurring ten days after the later of December 31, 2000 and
the fourth anniversary of the Commercial Operation Date, or
such earlier date on which the Letter of Credit Commitment
shall terminate.
"Lien": any mortgage, security interest, pledge,
hypothecation, encumbrance or lien (statutory or other) of
any kind or nature whatsoever (including, without
limitation, any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any
Maryland construction lien or any financing lease having
substantially the same economic effect as any such
agreement, the filing of any statement under the Uniform
Commercial Code or comparable law of any jurisdiction and
any right of first refusal or option to purchase granted to
the Power Purchaser in the Power Purchase Agreement or the
Transfer Agreement).
"Limited Partner": Panda Energy Corporation, a
Delaware corporation.
"Limited Partner Pledge Agreement": the Limited
Partner Pledge Agreement to be entered into between the
Limited Partner and the Security Agent, for the benefit of
GE Capital and the Owner Trustee, substantially in the form
of Exhibit P-2 to the Loan Agreement, as the same may be
amended, supplemented or otherwise modified from time to
time in accordance with the terms of such agreement and the
Loan Agreement.
"LNG": liquified natural gas.
"LNG Account": as defined in subsection 6.33 of the
Loan Agreement.
"Loan Agreement": the Construction Loan Agreement and
Lease Commitment, dated as of March 30, 1995, among the
Partnership, the General Partner and GE Capital, as amended,
supplemented or otherwise modified from time to time.
"Loan Commitment": $215,000,000.
"Loan Commitment Period": the period from and
including the Initial Loan Funding Date to and including the
Loan Commitment Termination Date.
"Loan Commitment Termination Date": the Construction
Loan Maturity Date or such earlier date on which the
Commitment shall terminate.
"Loan Documents": the collective reference to the Loan
Agreement, the Note, the Trust Agreement and the Collateral
Security Documents.
"Loans": the loans to be made by GE Capital to the
Partnership pursuant to subsection 2.1 of the Loan
Agreement. In the event Partnership Equity Loans are made
to the Partnership pursuant to the Loan Agreement, the term
"Loans" shall include the Partnership Equity Loans.
"LOC Beneficiary": the Power Purchaser.
"LOC Fee Payment Date": as defined in subsection 2.11
(b) of the Loan Agreement.
"LOC Reimbursement Obligations": as defined in
subsection 2.10 of the Loan Agreement.
"Maryland Commission": the Maryland Public Service
Commission.
"Maryland Commission Order": an order from the
Maryland Commission in form and substance satisfactory to GE
Capital (a) declaring that neither the Owner Trustee nor GE
Capital nor any Affiliate of GE Capital could, solely as a
result of the Owner Trustee's ownership of the Facility as
contemplated by subsection 5.2 of the Loan Agreement, become
a Public Utility for any purpose under Maryland law
(including, without limitation, for purposes of compliance
with any condition of the CPCN), (b) permitting under the
CPCN the Owner Trustee's ownership of the Facility as
contemplated by subsection 5.2 of the Loan Agreement (unless
the Partnership supplies evidence satisfactory to GE Capital
that no such order is required to permit under the CPCN the
Owner Trustee's ownership of the Facility as contemplated by
subsection 5.2 of the Loan Agreement) and (c) permitting
under the CPCN, as appropriately modified, without the need
for any future action by the Maryland Commission, the
operation of the Project by the Security Agent, the Owner
Trustee, GE Capital or any Affiliate of GE Capital upon the
exercise of remedies under the Collateral Security Documents
(unless the Partnership supplies evidence satisfactory to GE
Capital that no such order is required to permit under the
CPCN, without the need for any action by the Maryland
Commission, the operation of the Project by the Security
Agent, the Owner Trustee, GE Capital or any Affiliate of GE
Capital upon the exercise of remedies under the Collateral
Security Documents), and such order shall have become final
and nonappealable and shall not be the subject of any
judicial or administrative proceedings.
"Material Adverse Effect": a material adverse effect
upon (i) the business, operations, properties, assets,
prospects or condition (financial or otherwise) of the
Partnership, any Partner or the Project, (ii) the Project
Schedule, (iii) the value, validity, perfection and
enforceability of the Liens granted to the Security Agent,
for the benefit of GE Capital and the Owner Trustee, under
the Collateral Security Documents, (iv) the ability of GE
Capital, the Owner Trustee or the Security Agent to enforce
any of the Obligations or any of its rights and remedies
under the Transaction Documents or (v) the ability of any
Specified Participant to perform any of its material
obligations under the Transaction Documents to which it is a
party.
"Modification": (a) any addition, alteration,
improvement or modification to the Facility, other than
original, substitute or replacement parts incorporated into
the Facility, and (b) the addition, betterment or
enlargement of any property constituting part of the
Facility or the replacement of any such property with other
property, irrespective of whether (i) such replacement
property constitutes an enlargement or betterment of the
property that it replaces, (ii) the cost of such addition,
betterment, enlargement or replacement is or may be
capitalized, or (iii) such addition, betterment or
enlargement is or is not included or reflected in the plans
and specifications for the Facility, as built.
"Monthly QF Status Certificate": a certificate of an
Authorized Officer of the General Partner stating whether
the Facility met the QF Efficiency Standard and the QF
Operating Standard for the period covered by such
certificate.
"Monthly Transfer Date": as defined in subsection 4.2
of the Security Deposit Agreement.
"Multiemployer Plan": a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Net Economic Return": GE Capital's expected net after-
tax return on investment and after-tax net income resulting
from the transactions described in and contemplated by the
Loan Agreement and the Lease Documents based on the amount
of Basic Rent during the Basic Term equal to the percentages
of Lessor's Cost set forth on Schedule 10 to the Loan
Agreement and based on the assumptions set forth in Schedule
6 to the Loan Agreement and the Tax Indemnity Agreement;
provided, however, that in determining the amount of
increase or decrease required to preserve GE Capital's Net
Economic Return, it is intended that GE Capital's net
after-tax return on investment and after-tax net income
shall each be maintained (or where one such component must
be enhanced to preserve the other component, enhanced).
"Non-Material Agreements": (i) short term agreements
entered into in the ordinary course of business in
accordance with the provisions of the Fuel Management Plan,
(ii) agreements entered into by the Partnership in the
ordinary course of business with environmental consultants,
public relations consultants, financial consultants,
engineering consultants and legal counsel for the Project,
and (iii) agreements (other than those described in (i) and
(ii)) entered into by the Partnership in the ordinary course
of business under which the Partnership shall have
obligations not in excess of $25,000 under any such
agreement or $50,000 in the aggregate as to all such
agreements in any fiscal year, excluding, however, any
agreement providing for non-monetary obligations of the
Partnership the performance of which could reasonably be
expected to have a Material Adverse Effect. For purposes of
this definition, indemnity obligations of the Partnership
subject to a maximum dollar amount shall be computed at such
amount, and all other indemnity obligations of the
Partnership shall be computed at the amount thereof which
could, at the time such agreement is entered into,
reasonably be expected to become due and payable.
"Non-Severable Modification": any Modification that is
not a Severable Modification.
"Note" or "Notes": as defined in subsection 2.4 of the
Loan Agreement. In the event GE Capital assigns a portion
of the Loan to an Assignee pursuant to subsection 9.6 of the
Loan Agreement, the note issued to such Assignee to evidence
its portion of the Loan shall constitute a "Note". The term
"Note" shall also include any note issued to GE Capital to
evidence any Partnership Equity Loans.
"Notice of Borrowing": the notice of borrowing to be
delivered pursuant to subsection 2.2 of the Loan Agreement
substantially in the form of Exhibit C-2 of the Loan
Agreement.
"Notice of Initial Loan Funding": the notice of
Initial Loan Funding to be delivered pursuant to subsection
4.1(a) of the Loan Agreement substantially in the form of
Exhibit D to the Loan Agreement.
"Notice to Proceed": as defined in subsection 4.1(v)
of the Loan Agreement.
"O&M Letter of Credit": the Letter of Credit referred
to by that name in subsection 2.9(a) of the Loan Agreement.
"Obligations": all the unpaid principal amount of, and
accrued interest on (including, without limitation, interest
accruing after the maturity of the Loans and interest
accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like
proceeding, relating to the Partnership, whether or not a
claim for post-filing or post-petition interest is allowed
in such proceeding) the Notes, the Letter of Credit
Obligations, all Rent and other obligations payable by the
Partnership under the Facility Lease and all other
obligations and liabilities of the Partnership and the
Partners to GE Capital, the Owner Trustee or the Security
Agent (including, without limitation, pursuant to subsection
5.2 of the Loan Agreement, but excluding any Partner Equity
Loans), whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, the
Loan Agreement, the Note, the Facility Lease, the Collateral
Security Documents or any other Transaction Document and any
other document made, delivered or given in connection
therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees and
disbursements of counsel to GE Capital) or otherwise.
"Operating Budget": as defined in subsection 6.9(e) of
the Loan Agreement.
"Operating Cash Flow": for any three month period
(including any Quarterly Measurement Period), the amount by
which Project Revenues for such period exceed the sum of (i)
Project Expenses and (ii) fees payable pursuant to
subsections 2.11(b) and (c) of the Loan Agreement for such
period.
"Operating Cash Flow Ratio": as of any date of
determination, the quotient obtained by dividing Operating
Cash Flow for the rolling three-month period ending on the
last calendar day of the preceding month by the sum of the
Basic Rent payable on the next succeeding Basic Rent Payment
Date plus the principal and interest payments due in respect
of the Equity Loans, if any, on such Basic Rent Payment
Date.
"Operating Projections": as such term is defined in
subsection 4.1(ii) of the Loan Agreement.
"Operation and Maintenance Agreement": the Operation
and Maintenance Agreement, dated as of December 7, 1994
between the Operator and the Partnership, in the form
(including all amendments and clarification letters relating
thereto) delivered to GE Capital on the Initial Loan Funding
Date, as the same may thereafter be amended, supplemented or
otherwise modified from time to time in accordance with the
terms of such agreement and the Loan Agreement and the Power
Purchase Agreement.
"Operation and Maintenance Reserve Account": the
special account designated by that name established by the
Security Agent pursuant to subsection 2.2 of the Security
Deposit Agreement.
"Operator": Xxxxx Brandywine Operations, Inc., a
corporation organized under the laws of the State of
Delaware.
"Overdue Rate": at any time, the highest of (i) 12.0%
per annum, (ii) the rate of interest then applicable to the
Lease Debt plus 200 basis points and (iii) the Base Rate
plus 750 basis points.
"Overfunding Letter of Credit": the letter of credit
issued by Deutsche Bank pursuant to the terms of
Section 3.14(c) of the Construction Contract as security for
the performance by the Contractor of its obligations under
the Construction Contract, substantially in the form of
Exhibit T-2 to the Loan Agreement.
"Overfunding Letter of Credit Pledge Agreement": the
Overfunding Letter of Credit Pledge Agreement to be entered
into by the Partnership in favor of the Security Agent, for
the benefit of GE Capital and the Owner Trustee,
substantially in the form of Exhibit S-2 to the Loan
Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.
"Owner Trustee": Shawmut Bank Connecticut, National
Association, a national banking association, in its capacity
as trustee under the Trust Agreement, and any successor
trustee thereunder.
"Panda": Panda Energy Corporation, a corporation
organized under the laws of the State of Texas.
"Panda Transfer Event": the earliest to occur of (a)
the date on which 100% of the capital stock of
Panda-Xxxxxxxx Corporation and PRC II Corporation has been
duly transferred to Holdings, (b) the date on which 100% of
the capital stock of all Subsidiaries of Panda (including
the General Partner and the Limited Partner) then directly
owned by Holdings has been duly transferred by Holdings to
Panda (or the date on which Holdings has been merged into
Panda such that each of Panda-Xxxxxxxx Corporation, PRC II
Corporation, the General Partner and the Limited Partner are
directly owned by the surviving company of such merger) and
(c) the date on which financial closing (and initial
funding) occurs by any Subsidiary or Subsidiaries of
Holdings (other than the Partnership or the General Partner
or the Limited Partner) with respect to the construction
financing of power project(s) having an aggregate net
capability rating of at least 225 megawatts and which, in
the reasonable judgment of GE Capital (and based upon pro
forma cash flows for such Projects(s) prepared by Panda and
reasonably acceptable to GE Capital), provide for equity
distributions to Holdings and/or Subsidiaries of Holdings
(in the case of non-wholly-owned Subsidiaries of Holdings,
counting only that portion of equity distributions
attributable to Holdings' ownership interest) in an amount
equal (on a net present value basis at a discount rate of
9%) to the equity distributions to Holdings and/or
Subsidiaries of Holdings for the Xxxxxxxx Project (based
upon actual and pro forma cash flows for the Xxxxxxxx
Project prepared by Panda and reasonably acceptable to GE
Capital). For the purposes of this definition, the term
"Subsidiary(ies) of Holdings" shall mean (i) any
corporation, partnership, association, joint venture,
limited liability company, or other business entity of which
more than 50% of the total voting power of shares of stock
or other ownership interests entitled to vote in the
election of the Person or Persons (whether directors,
managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction
of management and policies thereof, is owned or controlled,
directly or indirectly, by Holdings, (ii) any partnership of
which Holdings or any Subsidiary of Holdings is the sole
general partner, and (iii) any corporation, partnership,
association, joint venture, limited liability company or
other business entity organized outside the United States of
which Holdings or any Subsidiary of Holdings has the
contractual right (whether by agreement of the owners of
such entity or by the charter, articles of association or
other organizational document of such entity) (A) to elect
or appoint the Person or Persons (whether directors,
managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction
of management and policies thereof or (B) otherwise to
direct or cause the direction of management and policies
thereof.
"Participants": collectively, the Partnership, the
Limited Partner, the General Partner, Panda, Holdings, the
Contractor, the Power Purchaser, the Gas Supplier, the Gas
Transporters and each other Person who is a party to a
Project Document.
"Partner Equity Loans": Equity Loans which are made by
GE Capital to a Partner. The term "Partner Equity Loans"
shall not include any Equity Loans made by GE Capital to the
Partnership.
"Partners": collectively, the General Partner and the
Limited Partner.
"Partnership": Panda-Brandywine L.P., a Delaware
limited partnership.
"Partnership Agreement": the Agreement of Limited
Partnership of Panda-Brandywine L.P., dated as of March 25,
1991, between the General Partner and the Limited Partner,
as amended by Amendment No. 1 thereto dated as of December
2, 1993 and Amendment No. 2 thereto dated as of December 2,
1994, in the form delivered to GE Capital on the Initial
Loan Funding Date, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with
the terms of such agreement and the Loan Agreement.
"Partnership Equity Loans": Equity Loans which are
made by GE Capital to the Partnership. The term
"Partnership Equity Loans" shall not include any Equity
Loans made by GE Capital to the Partners.
"Partnership Security Account": the special account
designated by that name established by the Security Agent
pursuant to subsection 2.2 of the Security Deposit
Agreement.
"Parts": appliances, parts, instruments,
appurtenances, accessories and equipment of whatever nature,
whether or not constituting Modifications.
"PBGC": the Pension Benefit Guaranty Corporation.
"PEPCO Closing Certificate": the certificate, in
substantially the form of Exhibit C to the Consent of the
Power Purchaser and otherwise in form and substance
satisfactory to GE Capital, to be delivered by the Power
Purchaser to GE Capital on the Initial Loan Funding Date.
"PEPCO Letters of Credit": as defined in subsection
2.9(a) of the Loan Agreement.
"Performance Letter of Credit": the Letter of Credit
referred to by that name in subsection 2.9(a) of the Loan
Agreement.
"Permitted Investments": as defined in the Security
Deposit Agreement.
"Permitted Liens": (i) the Liens created by the
Collateral Security Documents; (ii) Liens which arise in the
ordinary course of business (including materialmen's,
mechanics', workers', repairmen's and employees' Liens or
similar Liens which arise in connection with any tax,
assessment, governmental charge or levy) of the Partnership,
but not in connection with any Indebtedness, and which
are subject to a Contest; (iii) Liens arising out of
judgments or awards and which are subject to a Contest,
which are satisfactorily bonded or with respect to which at
the time an appeal or proceeding for review is being
prosecuted in good faith and for the payment of which
adequate cash reserves shall have been provided, (iv) Liens
arising out of the rights of the Power Purchaser arising
under the Power Purchase Agreement and the Transfer
Agreement and (v) the matters excepted on the title
insurance policies issued by the Title Company on the
Initial Loan Funding Date in favor of the Security Agent.
"Person": an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other
entity of whatever nature.
"Pipeline Facilities": collectively, the Columbia
Facilities and the construction work to be carried out by
the other Gas Transporters in order to furnish the gas
transportation service to the Facility.
"Plan": any pension plan which is covered by Title IV
of ERISA and in respect of which the Partnership or a
Commonly Controlled Entity is an "employer" as defined in
Section 3(5) of ERISA.
"Plans and Specifications": all plans and
specifications for the construction, operation and
maintenance of the Facility in accordance with the
Construction Contract, any other EPC Contract, the Power
Purchase Agreement and any Governmental Action or any Law.
"Pledge Agreements": the collective reference to the
General Partner Pledge Agreement, the Limited Partner Pledge
Agreement and the Stock Pledge Agreement.
"Power Purchase Agreement": the Power Purchase
Agreement, dated as of August 9, 1991, between the Power
Purchaser and the Partnership, as amended as of the date of
the Loan Agreement, in accordance with the First Amendment
to Power Purchase Agreement, dated as of September 16, 1994,
(provided that in the event the First Amendment to the Power
Purchase Agreement is not approved by any Governmental
Authority having jurisdiction, then in the original form of
the Power Purchase Agreement, together with such portions of
the First Amendment to the Power Purchase Agreement which
are determined to survive) in the form (including all
amendments and clarification letters relating thereto)
delivered to GE Capital on the Initial Loan Funding Date, as
the same may thereafter be amended, supplemented or
otherwise modified from time to time in accordance with the
terms of such agreement and the Loan Agreement.
"Power Purchaser" or "PEPCO": Potomac Electric Power
Company, a corporation organized under the laws of the
District of Columbia and the State of Virginia, or any
permitted successor or assign thereof.
"Present Assignment": the Present Assignment of Power
Purchase Agreement to be entered into substantially in the
form of Exhibit R to the Loan Agreement, as the same may be
amended, supplemented or otherwise modified in accordance
with its terms from time to time.
"Project": the Facility, the Site, the Easements and
all other easements, licenses, permits and other real
property interests owned by the Partnership or in which the
Partnership has any rights.
"Project Costs": the following costs and expenses
incurred by the Partnership in connection with the
development, design, engineering, acquisition, construction,
financing, testing, start-up and completion of the Project
which are referred to on Schedule 4 to the Loan Agreement:
(a) the price payable by the Partnership pursuant to the
Construction Contract and any Additional Construction
Contract; (b) all costs and expenses payable by the
Partnership in connection with the performance by it of its
covenants in the Construction Contract, any Additional
Construction Contract and all permitting costs associated
with the Project; (c) the cost of site acquisition and
improvement and the cost of the interconnection facilities
and other items required for the Project which are not
included within the work to be performed by the Contractor
under the Construction Contract; (d) initial organizational
expenses and other start-up, testing and training costs of
the Partnership (including employees' salaries and
benefits); (e) legal, accounting, engineering, development
and financial fees and expenses set forth on Schedule 4 to
the Loan Agreement, as such Schedule may revised from time
to time; (f) cost of insurance and bonds; (g) financing fees
and expenses, interest on the Loans and fees in respect of
the Letters of Credit accruing during construction; (h) ad
valorem, property and sales and use taxes (including
recordation and transfer taxes); (i) the construction
management fee payable to Panda in the amount of $1,000,000
on the Initial Loan Funding Date and the monthly management
fee payable to Panda in an amount equal to $111,000 per
month but not to exceed an aggregate amount equal to
$2,000,000; (j) third-party development costs; (k) an
amount equal to $750,000 in respect of the initial deposit
into the Warranty Maintenance Reserve Account, an amount
equal to $1,000,000 in respect of the initial deposit into
the Operation and Maintenance Reserve Account and an amount
equal to $2,400,000 in respect of the initial deposit into
the Rent Reserve Account; (l) after the payment of all other
Project Costs and to the extent of funds remaining in the
Loan Commitment, the Success Fee, if any, payable to Panda;
(m) payments to the Power Purchaser in respect of the
Partnership's interconnection security obligations pursuant
to subsection 4.2 of the Power Purchase Agreement; (n)
payments to Columbia as a "Contribution-in-aid-of
Construction" as provided in the Columbia Precedent
Agreement; (o) payments for such other reasonable costs and
expenses associated with the Project as GE Capital may
approve; and (p) principal and interest on the Development
Loans and all other amounts owing under the Development Loan
Agreement. There shall be excluded from the foregoing items
set forth in clauses (a) through (o) any amounts which have
been previously funded pursuant to the Development Loan
Agreement.
"Project Documents": the collective reference to the
Power Purchase Agreement, the Construction Contract, the
Raytheon Parent Guaranty, the Operation and Maintenance
Agreement, the Steam Agreements, the Gas Contracts, the
Effluent Water Agreement, the Partnership Agreement and each
Additional Project Document.
"Project Expenses": for any period, the sum (without
duplication) of the following items for the Partnership to
the extent that the same are due and owing or have actually
been paid by the Partnership and are necessary or desirable
for the standard operation and maintenance of the Project:
(i) the sum of all salaries, employee benefits and other
compensation, plus (ii) the cost of acquiring Fuel
(including payments under Sections 3.3 and 7.1 of the Gas
Supply Agreement and Section 6.1 of the Fuel Management
Agreement) and the cost of other materials and utilities
paid, including the transportation costs for Fuel and such
other materials and utilities paid, plus (iii) insurance
premiums, plus (iv) costs of operating and maintaining the
Project, plus (v) property and other Taxes (except income
taxes), plus (vi) fees for accounting, legal and other
professional services, plus (vii) general and administrative
expenses plus (viii) capital expenditures in the ordinary
course of business and set forth in the current Operating
Budget, plus (ix) all other cash expenditures approved by
GE Capital relating to operation, maintenance and
administrative costs of the Project plus (x) the aggregate
annual rental for leases of personal property other than
Capital Leases. There shall be excluded from the foregoing
clauses (i) through (x) payments with respect to federal,
state and local income taxes, payments of Rent or principal,
interest or fees with respect to the Loans or the funding of
the Reserve Accounts or payments in respect of any other
Indebtedness of the Partnership or any Partner.
"Project Revenues" or "Revenues": for any period the
sum of (i) all revenues received by the Partnership under
the Power Purchase Agreement, plus (ii) all other revenues
received by the Partnership from the sale of electricity,
heat or steam or from the sale of surplus natural gas
(including any payments received for "Banked Quantities"
under the Washington LDC Agreement) or from releases of firm
transportation capacity held by the Partnership under the
Gas Transportation Agreements, and all amounts received by
the Partnership as rent under the Steam Lease, plus
(iii) the amount of earnings by the Partnership in respect
of Permitted Investments during such period, to the extent
such earnings have been deposited into the Revenue Account,
plus (iv) any other revenues received by the Partnership.
"Project Schedule": a schedule of Project construction
substantially in the form of Schedule 5 to the Loan
Agreement.
"Prudent Utility Practice": at a given time, any of
the practices, methods and acts engaged in or approved by a
majority of independent power producers prior to such time
with respect to similar facilities owned and operated by
such independent power producers. "Prudent Utility
Practice" is not intended to be limited to the optimum
practice, method or act to the exclusion of all others, but
rather to a spectrum of possible practices, methods or acts
having due regard for, among other things, manufacturers'
warranties, engineering and operating considerations and the
requirements of Governmental Authorities and the
requirements of the Power Purchase Agreement and the other
Transaction Documents.
"Public Utility":
(a) any Person who has been deemed by any
Governmental Authority having jurisdiction to be, for
the purposes of the PURPA Regulations, (i) "primarily
engaged in the generation or sale of electric power
(other than electric power solely from cogeneration
facilities or small power production facilities)" or
(ii) an "electric utility" or an "electric utility
holding company" or a wholly or partially-owned direct
or indirect subsidiary of an "electric utility" or
"electric utility holding company"; or
(b) any Person who is, under any Law,
regulated as a "public utility", a "public service
corporation", an "electric utility", a "steam utility",
a "public utility holding company", an "affiliate" or
"subsidiary" of a "public utility" or "public utility
holding company", or any other type of entity subject
under any Law to regulation relating to public
utilities, including, without limitation:
(i) a "public utility"
under the Federal Power Act;
(ii) a "holding company",
an "affiliate" of a "holding company" or a
"subsidiary company" of a "holding company" under
the Holding Company Act;
(iii) a "public service
company", an "electric company" or a "steam
heating company" under Article 78, Public Service
Commission Law, of the Annotated Code of Maryland;
or
(iv) a "public utility"
or an "electric corporation" under Title 43,
Public Utilities, of part V of the District of
Columbia Code.
"PURPA": the Public Utility Regulatory Policies Act of
1978, as amended from time to time.
"PURPA Regulations": FERC's Regulations under Sections
201 and 210 of PURPA with regard to Small Power Production
and Cogeneration, 18 C.F.R. Part 292, as such regulations
may be amended or supplemented from time to time.
"QF Certification Application": as defined in
subsection 3.27 of the Loan Agreement.
"QF Certification Order": as defined in subsection
3.27 of the Loan Agreement.
"QF Efficiency Standard": the efficiency standard
specified in Section 292.205(a)(2)(i) of the PURPA
Regulations or any successor or analogous standard specified
under the PURPA Regulations that the Facility must meet to
be a Qualifying Facility.
"QF Minimum Steam Take": for purposes of each Annual
QF Status Certificate furnished pursuant to Section 6.30(b)
or (d) of the Loan Agreement, an amount of steam purchased
by the Steam Host under the Steam Sales Agreement during the
period covered by such certificate such that the Facility
would meet the QF Operating Standard for the Initial QF
Standards Measurement Period or the QF Standards Measurement
Period, as the case may be, even if both:
(i) the Steam Host were to purchase no more
steam during the remaining portion of such period; and
(ii) the Power Purchaser were to dispatch
the Facility under the Power Purchase Agreement such
that the Facility's electric generating capacity would
be fully loaded during every hour of the remaining
portion of such period at a level for each such hour
equal to the greater of (x) 230 megawatts and (y) the
Facility's reasonably predicated "Available Capacity",
as such term is defined under the Power Purchase
Agreement, for each such hour.
"QF Operating Standard": the operating standard
specified in Section 292.205(a)(1) of the PURPA Regulations
or any successor or analogous standard specified under the
PURPA Regulations that the Facility must meet to be a
Qualifying Facility.
"QF Recertification Order": as defined in subsection
6.29 of the Loan Agreement.
"QF Standards Measurement Period": (a) any calendar
year other than the calendar year in which the first day of
the Initial QF Standards Measurement Period occurred or (b)
any successor or analogous period specified under the PURPA
Regulations for the purpose of determining whether the
Facility is in compliance with the QF Operating Standard and
the QF Efficiency Standard and that does not include the
date the Facility first produces electricity.
"Qualifying Facility": a cogeneration facility that
meets all the requirements set forth in the PURPA
Regulations for such facility to be a "qualifying facility"
under such regulations.
"Quarterly Measurement Period": as of any Basic Rent
Payment Date, the three-month period (or, in the case of the
initial Quarterly Measurement Period, the two-month period)
ending one month prior to such Basic Rent Payment Date.
"Raytheon Parent Guaranty": the Parent Guaranty dated
as of March 30, 1995 executed by Raytheon Company in favor
of the Partnership, in the form delivered to GE Capital on
the Initial Loan Funding Date, as the same may thereafter be
amended, supplemented or otherwise modified from time to
time in accordance with the terms of such agreement and the
Loan Agreement.
"Registry of Deeds": the Office of Land Records for
Prince George's County and Xxxxxxx County, Maryland.
"Renewal Rent": Fixed Rate Renewal Basic Rent.
"Renewal Term": Fixed Rate Renewal Term.
"Rent": the collective reference to Basic Rent,
Supplemental Rent and Renewal Rent.
"Rent Payment Date": a Basic Rent Payment Date.
"Rent Reserve Account": the special account designated
by that name established by the Security Agent pursuant to
subsection 2.2 of the Security Deposit Agreement.
"Reportable Event": any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder.
"Reportable Spill": a release, suspected or threatened
release, or spill of a Hazardous Substance which gives rise
to an obligation under applicable Law to give notice to any
Governmental Authority.
"Reporting Participant": each of the Partnership, the
General Partner, the Limited Partner, Panda and Holdings.
"Requested Specifications": as defined in subsection
6.33 of the Loan Agreement.
"Required Operation and Maintenance Reserve Balance":
from the Lease Closing Date until the fifth anniversary
thereof, $5,000,000; and for each calendar year from and
after the fifth anniversary of the Lease Closing Date, an
amount equal to the sum of (x) the Required Operation and
Maintenance Reserve Balance then in effect for the prior
calendar year (the "Existing Balance") plus (y) the product
of the GNP Deflator for the prior calendar year times the
Existing Balance.
"Required Rent Reserve Balance": at any time, the
greater of (a) $2,400,000 and (b) an amount equal to the sum
of the payments of Basic Rent scheduled to be due and owing
on the next two succeeding Rent Payment Dates.
"Required Warranty Maintenance Reserve Deposit":
$750,000.
"Reset Date": with respect to each Base Rate Loan, the
date on which such Base Rate Loan is made (or on which a
Eurodollar Loan is converted to such Base Rate Loan) and the
next-to-last Business Day of each calendar month thereafter.
"Revenue Account": the special account designated by
that name established by the Security Agent pursuant to
subsection 2.2 of the Security Deposit Agreement.
"Xxxxxxxx Project": the 180 megawatt, gas-fired,
combined cycle cogeneration facility located in Roanoke
Rapids, North Carolina owned by Panda-Xxxxxxxx, L.P.
"Sale Proceeds": the gross proceeds of any sale of the
Facility, or any part thereof, by the Lessor to any Person
paid in cash, less all costs and expenses incurred by the
Lessor in connection therewith.
"Scheduled Commercial Operation Date": as defined in
the Power Purchase Agreement.
"Security Agent": Shawmut Bank Connecticut, a national
banking association, or any bank acting as successor
security agent under the Security Deposit Agreement.
"Security Agreement": the Security Agreement to be
entered into between the Partnership and the Security Agent,
for the benefit of GE Capital and the Owner Trustee,
substantially in the form of Exhibit V to the Loan
Agreement, as the same may be amended, supplemented or
otherwise modified in accordance with its terms from time to
time.
"Security Deposit Agreement": the Security Deposit
Agreement to be entered into among the Partnership,
GE Capital, the General Partner, the Owner Trustee and the
Security Agent, substantially in the form of Exhibit O to
the Loan Agreement, as the same may be amended, supplemented
or otherwise modified from time to time.
"Severable Modification": any modification that can be
removed from the Facility without damaging the Facility or
diminishing the value, durability, performance
characteristics, useful life or utility of the Facility.
"Single Employer Plan": any Plan which is not a
Multiemployer Plan.
"Site": the land and easements located in Brandywine,
Maryland described in Schedule 1 to the Loan Agreement, on
which the Facility is to be located.
"Site Lease": the Site Lease to be entered into on the
Initial Loan Funding Date between the Partnership, as
lessor, and the Owner Trustee, as lessee, substantially in
the form of Exhibit M to the Loan Agreement, as the same may
be amended, supplemented or otherwise modified in accordance
with its terms from time to time.
"Site Sublease": the Site Sublease to be entered into
on the Initial Loan Funding Date between the Owner Trustee,
as sublessor, and the Partnership, as sublessee,
substantially in the form of Exhibit N to the Loan
Agreement, as the same may be amended, supplemented or
otherwise modified in accordance with its terms from time to
time.
"Special Payment Account": the special account
designated by that name established by the Security Agent
pursuant to Section 2.2 of the Security Deposit Agreement.
"Special Payments": the collective reference to (i)
all "Contract Price Discounts" paid by the Contractor
pursuant to Sections 5.02 and 5.04 of the Construction
Contract and all "liquidated damage" or similar payments
made by any other Contractor under any provision of any
other EPC Contract, (ii) all payments made by the Power
Purchaser under Subsection 15.3(b) of the Power Purchase
Agreement (whether made to the Security Agent or directly to
GE Capital) and (iii) all payments made by the Gas Supplier
(or any guarantor of the Gas Supplier) in respect of the
lump sum termination payment pursuant to Section 17.3 of the
Gas Supply Agreement.
"Special QF Loss Event": the loss of the Facility's
Qualifying Facility status solely as a result of the Owner
Trustee's ownership of the Facility causing the Facility not
to be in compliance with the ownership criteria of 18 C.F.R.
292.206.
"Specified Participant": each of the Partnership, the
Partners, Panda, the Steam Host, Holdings, the Contractor,
the Gas Supplier, each Gas Transporter and the Power
Purchaser, provided that after the date of expiration of the
warranties under the Construction Contract, the Contractor
shall cease to be a Specified Participant.
"Steam Agreements": the Steam Sales Agreement, the
Steam Lease and the Steam Lessee Security Agreement.
"Steam Host": Brandywine Water Company, a corporation
organized under the laws of the State of Delaware.
"Steam Lease": the Lease Agreement, dated as of the
Lease Closing Date, between the Partnership, as lessor, and
the Steam Host, as lessee, in the form of Exhibit W to the
Loan Agreement (including all amendments and clarification
letters relating thereto), as the same may thereafter be
amended, supplemented or otherwise modified from time to
time in accordance with the terms of such agreement and the
Loan Agreement.
"Steam Lessee Security Agreement": the Lessee Security
Agreement, dated as of the Initial Loan Funding Date,
between the Lessee (as steam lessor), the Steam Host and the
Security Agent, for the benefit of GE Capital and the Owner
Trustee, in the form of Exhibit X to the Loan Agreement, as
the same may be amended, supplemented or otherwise modified
from time to time.
"Steam Sales Agreement": the Steam Sales Agreement,
dated as of the Initial Loan Funding Date between the Steam
Host and the Partnership, in the form (including all
amendments and clarification letters relating thereto)
delivered to GE Capital on the Initial Loan Funding Date, as
the same may thereafter be amended, supplemented or
otherwise modified from time to time in accordance with the
terms of such agreement and the Loan Agreement and the Power
Purchase Agreement.
"Stipulated Loss Value": as of the Basic Term
Commencement Date or any Basic Rent Payment Date, as the
case may be, the percentage of Lessor's Cost set forth
opposite such date in Schedule D to the Facility Lease, as
adjusted pursuant to Section 3(d) of the Facility Lease.
Stipulated Loss Value as of any Basic Rent Payment Date
during any Renewal Term shall mean an amount equal to the
Fair Market Sales Value of the Facility as of the first day
of such Renewal Term, after deducting from such amount
depreciation to such Rent Payment Date calculated on a
straight-line basis from the first day of such Renewal Term
to the end of the estimated useful life of the Facility.
"Stock Pledge Agreement": the Stock Pledge Agreement
to be entered into by Holdings in favor of the Security
Agent, for the benefit of GE Capital and the Owner Trustee,
substantially in the form of Exhibit Q to the Loan
Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.
"Stop-Work Order": any stop-work order issued by the
Partnership to any EPC Contractor, or any stop-work order
issued with respect to the Project by any Person, including,
without limitation, any Governmental Authority.
"Subsidiary": as to any Person, a corporation of which
shares of stock having ordinary voting power (other than
stock having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors
or other managers of such corporation are at the time owned,
or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries,
or both, by such Person.
"Substantial Completion": substantial completion of
the Facility, which shall be deemed to have occurred when
the Date of Substantial Completion for the Facility shall
have occurred and the conditions described in clauses (a)
through (e) of the definition of "Date of Substantial
Completion" shall have been satisfied.
"Substantial Completion Certificate": a certificate
substantially in the form of Exhibit I-1 to the Loan
Agreement, signed by the Partnership.
"Substitute Eurodollar Rate": as defined in Section
2.7(d) of the Loan Agreement.
"Success Fee": the amount equal to the unused Loan
Commitment on the Lease Closing Date after the funding of
all other Project Costs (including any amounts funded into
the Reserve Accounts or into a completion account in respect
of punch list or similar items) incurred in connection with
the construction and start-up of the Project.
"Supplemental Rent": as defined in Section 3(b) of the
Facility Lease.
"Tax" or "Taxes": any and all fees (including, without
limitation, documentation, recording, license and
registration fees), taxes (including, without limitation,
net income, franchise, value added, ad valorem, gross
income, gross receipts, sales, use, rental, property
(personal and real, tangible and intangible) and stamp
taxes), levies, imposts, duties, charges, assessments or
withholdings of any nature whatsoever, general or special,
ordinary or extraordinary, together with any and all
penalties, fines, additions to tax and interest thereon.
"Tax Indemnity Agreement": the Tax Indemnity Agreement
to be entered into between the Partnership and GE Capital,
substantially in the form of Exhibit U to the Loan
Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.
"Termination": as such term is defined in the Security
Deposit Agreement.
"Title Company": Chicago Title Insurance Company and
First American Title Insurance Company as co-insurers, or
such other title insurance company approved by GE Capital,
to insure the priority of the Lien of the Deed of Trust and
Security Agreement on (i) the Site and (ii) the Easements.
"Transaction Documents": the collective reference to
the Loan Documents, the Project Documents, the Site Lease,
the Site Sublease and, from and after the Lease Closing
Date, the other Lease Documents.
"Transfer": the transfer, by xxxx of sale or
otherwise, by the Lessor of all the Lessor's right, title
and interest in and to the Facility, the Site and the
Partnership's interest in the Easements, on an "as is, where
is with all faults" basis, free and clear of all Lessor's
Liens but otherwise without recourse, representation or
warranty, together with the due assumption by the transferee
of, and the due release of the Lessor and GE Capital from,
all the Lessor's and GE Capital's obligations under the
Transaction Documents by an instrument or instruments
satisfactory in form and substance to GE Capital.
"Transfer Agreement": The Agreement With Respect To
Transfers Of Interest in Panda-Brandywine, L.P., dated as of
August 8, 1991, between the Power Purchaser, the General
Partner and the Limited Partner, as the same may be amended,
supplemented or otherwise modified in accordance with the
terms of such agreement and the Loan Documents.
"Transfer Certificate": a certificate, in
substantially the form of Exhibit D to the Ascending Letter
of Credit or Exhibit D to the Overfunding Letter of Credit,
as the case may be.
"Transmission Facilities": as defined in the Power
Purchase Agreement.
"Transmission Facilities Site": as defined in the
Power Purchase Agreement.
"Treasury Index Rate": the rate per annum equal to the
sum of the average of the interpolated rates for United
States Treasury Notes with constant maturities equal to the
weighted average life of the Facility Lease (not counting
any renewals) (as published in Federal Reserve Statistical
Release H.15(519) Selected Interest Rates) for the four week
period ending on the most recent Friday which is at least 15
days prior to the Lease Closing Date.
"Trust Agreement": the Trust Agreement to be entered
into between GE Capital and the Owner Trustee, substantially
in the form of Exhibit Z to the Loan Agreement, as the same
may be amended, supplemented or otherwise modified from time
to time.
"Trust Estate": as defined in the Trust Agreement.
"Turbine Contract": the contract between the
Contractor and the Turbine Manufacturer providing for the
supply of the combustion and steam turbine generators and
associated parts and equipment to the Project.
"Turbine Manufacturer": the General Electric Company,
a corporation organized under the laws of the State of New
York, acting through its General Electric Power Systems
division.
"Turbine Warranty Termination Date": the date the
General Electric turbine warranty expires, as certified by
the Partnership to GE Capital, but no later than the second
anniversary of the Date of Final Completion.
"Value": as such term is defined in the Security
Deposit Agreement.
"Warranty Maintenance Reserve Account": the special
account designated by that name established by the Security
Agent pursuant to subsection 2.2 of the Security Deposit
Agreement.
"Washington": Washington Gas Light Company, a
corporation organized under the laws of the Commonwealth of
Virginia and the District of Columbia.
"Washington LDC Agreement": the Gas Transportation and
Supply Agreement, dated as of November 10, 1994, between
Washington and the Partnership, in the form (including all
amendments and clarification letters relating thereto)
delivered to GE Capital on the Initial Loan Funding Date, as
the same may thereafter be amended, supplemented or
otherwise modified from time to time in accordance with the
terms of such agreement and the Loan Agreement.
"Water Easement Maintenance Agreement": the Agreement
dated April 4, 1995 between the Partnership and Prince
George's County, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the
terms of such agreement and the Loan Agreement.
"Withholding Taxes": as defined in subsection 2.14 of
the Loan Agreement.
"Work": any and all services, functions, duties,
responsibilities or other obligations to be undertaken and
performed by any EPC Contractor pursuant to any EPC
Contract, including, but not limited, to all "Work", as
defined in the Construction Contract, and the provision of
all labor, material and services utilized in the design,
construction, engineering, equipping and testing of the
Facility.
"Winter Heating Period": as defined in subsection 6.35
of the Loan Agreement.
