EXHIBIT 10.26
SECURITY DEPOSIT AGREEMENT, dated as of March 30, 1995,
among PANDA-BRANDYWINE, L.P., a Delaware limited partnership, as
borrower and lessee (the "Partnership"), of which PANDA
BRANDYWINE CORPORATION, a Delaware corporation, is the sole
general partner (the "General Partner"), GENERAL ELECTRIC
CAPITAL CORPORATION, a New York corporation, as construction
lender and owner participant ("GE Capital"), SHAWMUT BANK
CONNECTICUT, NATIONAL ASSOCIATION, not in its individual
capacity but solely as owner trustee (in such capacity, the
"Owner Trustee") under the Trust Agreement (as defined below)
and SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION, a national
banking association, as security agent hereunder (in such
capacity, the "Security Agent") for GE Capital and the Owner
Trustee.
W I T N E S S E T H:
WHEREAS, capitalized terms used herein
and not otherwise defined shall have the respective
meanings assigned thereto in Article I;
WHEREAS, in order to finance the cost of
of developing, constructing and equipping the Project,
the Partnership has entered into the Construction Loan
Agreement and Lease Commitment, dated as of March 30, 1995 (as
amended, supplemented or otherwise modified from time to time,
the "Loan Agreement"), among the Partnership, the General
Partner and GE Capital, pursuant to which GE Capital has
agreed, subject to the terms and conditions set forth therein,
to make loans (the "Loans") to the Partnership and to issue
letters of credit (the "Letters of Credit") for the account of
the Partnership;
WHEREAS, upon completion of construction of
the Project, and subject to the satisfaction of the conditions
precedent set forth in the Loan Agreement, GE Capital (acting
through the Owner Trustee) has agreed to purchase the Facility
from the Partnership and to lease the Facility back to the
Partnership pursuant to the Facility Lease;
WHEREAS, the obligations of the Partnership under the Loan
Agreement to GE Capital and under the Site Sublease and the Facility
Lease to the Owner Trustee, including its obligations to repay the Loans
with interest thereon, to repay the LOC Reimbursement
Obligations and to make payments of Rent, are secured by, among
other things, a first assignment of and prior perfected
security interest in all rights and property of the
Partnership, including all of the revenues of the Partnership,
to the Security Agent, as agent for GE Capital and the Owner
Trustee, pursuant to the terms and provisions of the Security
Agreement and the Deed of Trust and Security Agreement;
WHEREAS, in order to give effect to the foregoing, the parties
hereto are entering into this Agreement, pursuant to which (i)
GE Capital and the Owner Trustee appoint Shawmut Bank
Connecticut, National Association, to act as Security Agent
hereunder and the other Collateral Security Documents, to hold
all Collateral for the benefit of GE Capital and the Owner
Trustee and (ii) the Partnership agrees that its revenues will
be paid directly to the Security Agent, as agent for GE Capital
and the Owner Trustee, held by the Security Agent as collateral
security for the obligations of the Partnership to GE Capital
and the Owner Trustee, and distributed by the Security Agent as
provided herein;
WHEREAS, Shawmut Bank Connecticut, National
Association has agreed to act as security agent on behalf of GE
Capital and the Owner Trustee pursuant to the terms of this
Agreement and the other Collateral Security Documents; NOW,
THEREFORE, in consideration of the premises and of other good
and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
Section 1.1 Capitalized terms used in this Agreement
shall, unless otherwise defined herein, have the respective meanings
assigned to such terms in Appendix A to this Agreement.
Section 1.2 Other Definitional Provisions.
(a) As used herein and in any certificate or other document
made or delivered pursuant hereto, accounting terms not defined herein
or in Appendix A and accounting terms partly defined herein or in Appendix A,
to the extent not defined, shall have the respective meanings
given to them under GAAP.
(b) 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, exhibit and appendix references are to this Agreement
unless otherwise specified.
(c) References to agreements defined
herein or in Appendix A shall include such agreements
as they may be amended, supplemented or otherwise modified from
time to time in accordance with the provisions of the
Transaction Documents.
(d) Terms defined in Appendix A or
otherwise defined herein by reference to any other agreement,
document or instrument shall have the meanings assigned to them
in such agreement, document or instrument whether or not such
agreement, document or instrument is then in effect.
ARTICLE II
Appointment of Security Agent; Establishment of Accounts
Section 2.1 Appointment of Security Agent.
(a) Shawmut Bank Connecticut, National Association is
hereby appointed by GE Capital and the Owner Trustee as
security agent hereunder, under the Deed of Trust and Security
Agreement, under the Security Agreement, under the Pledge Agreements
and under the other Collateral Security Documents, and GE Capital and
the Owner Trustee hereby authorize Shawmut Bank Connecticut, National
Association, in its capacity as the Security Agent, to take such action on
their behalf under the provisions of this Agreement and the
other Collateral Security Documents and to exercise such powers
and perform such duties as are expressly delegated to the
Security Agent by the terms of this Agreement, together with such
other powers as are reasonably incidental thereto.
(b) Except as otherwise specifically provided in this Security
Deposit Agreement, upon the written instructions at any time
and from time to time of GE Capital, the Security Agent shall
take such of the following actions as may be specified in such
instructions: (i) exercise such election or option, or m ake
such decision or determination, or give such notice, consent,
waiver or the approval or exercise such right, remedy or power
or take such other action hereunder or under any other
Transaction Document or in respect of any part or all of the
Collateral as shall be specified in such instructions and as
are consistent with this Security Deposit Agreement and the
other Collateral Security Documents; (ii) take such action with
respect to, or to preserve or protect, the Collateral
(including the discharge o f Liens) as shall be specified in
such instructions and as are consistent with this Security
Deposit Agreement and the other Collateral Security Documents;
and (iii) take such other action in respect of the subject
matter of this Security Deposit Agreement and the other
Collateral Security Documents as is consistent with the terms
hereof, thereof and the other Transaction Documents. The
Security Agent shall have the righ t to request such written
instructions at any time and from time to time. The Security
Agent will execute and file or cause to be filed such
continuation statements with respect to financing statements
relating to the security interest created under the Collateral
Security Documents in the Collateral as may be specified from
time to time in written instructions of GE Capital (which
instructions may, by their terms, be operative only at a future
date and which shall be accompanied by the execution fo rm of
such continuation statements so to be filed). The Security
Agent hereby accepts the trust created by this Security Deposit
Agreement and to act as security agent hereunder and under
the Collateral Security Documents. (c) The Security Agent
agrees to accept all revenues, cash, payments, insurance and
condemnation proceeds, other amounts and Permitted Investments
to be delivered to or held by the Security Agent pursuant to
the terms of this Agreement. The Security Agent shall hold and
safeguard the Accounts (and the revenues, cash, payments,
insurance and condemnation proceeds, instruments, securities
and other amounts on deposit therein) during the term of this
Agreement and shall treat the revenues, cash, payments,
insurance and condemnation proceeds, instruments, securities
and other amounts in the Accounts as funds, instruments,
securities and other properties pledged by the Partnership to
the Security Agent as collateral securing the Obligations in
accordance with the provisions hereof.
Section 2.2 Creation of Accounts. The Security Agent hereby
establishes the following nine special, segregated and irrevocable cash
collateral accounts in the name of the Security Agent and for the benefit
of GE Capital and the Owner Trustee which shall be maintained
at all times until the termination of this Agreement: (a)
Revenue Account; (b) Operation and Maintenance Reserve Account;
(c) Rent Reserve Account; (d) Warranty Maintenance Reserve
Account; (e) Insurance and Condemnation Proceeds Account; (f)
Special Payment Account; (g) Partnership Security Account; (h)
Distribution Reserve Account; and (i) Current Account. All
moneys, investments and securities at any time on deposit in
any of the Accounts shall constitute collateral to be held in
the custody of the Security Agent for the purposes and on the
terms set forth in this Agreement.
Section 2.3 Security Interest.
(a) In order to secure the payment and performance by the
Partnership when due of all of the Obligations, this Agreement
is intended to create, and the Partnership hereby pledges to,
and creates in favor of the Security Agent, for the benefit of
GE Capital and the Owner Trustee, a prior perfected and
continuing security interest in all right, title and interest
of the Partnership in and to the Accounts, all cash, cash
equivalents, instruments, investments and other securities at
any time on deposit in the Accounts, all present and future
accounts, chattel paper, documents, general intangibles and
instruments (each as defined in the New York Uniform Commercial
Code) of the Partnership, all other rights of the Partnership
to receive the payment of money, including (without limitation)
all moneys due and to become due to the Partnership under the
Power Purchase Agreement, the Steam Sales Agreement, the Steam
Lease and any other contract of the Partnership for the sale of
electricity or steam or by-products produced by the Facility,
all other Project Revenues, all amou nts payable under
insurance policies maintained by the Partnership, all license
fees and all moneys due and to become due to the Partnership
under the Construction Contract and the Gas Supply Contract,
and all proceeds of any of the foregoing.
(b) All moneys, cash equivalents, instruments, investments and
securities at any time on deposit in any of such Accounts shall constitute
collateral security for the payment and performance by the
Partnership when due of the Obligations and shall at all times
be subject to the sole dominion and control of the Security
Agent, and shall be held in the custody of the Security Agent
for the purposes of, and on the terms set forth in, this
Agreement.
(c) The Partnership shall not have any rights or powers with
respect to any amounts in the Accounts or any part
thereof except (i) as provided in Article IV hereof and (ii)
the right to have such amounts applied in accordance with the
provisions hereof.
Section 2.4 Location of the Accounts. The Accounts
shall be maintained by the Security Agent at its corporate
trust office located at 000 Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx
00000, until the Security Agent gives written notice to the
other parties to this Agreement setting forth a different
location of the Accounts, in the manner specified in Section
9.7; provided, however, that such location shall be in
Hartford, Connecticut or New York City.
ARTICLE III
Deposits into Accounts
Section 3.1 Deposits. (a) The Partnership shall instruct
each Person from whom it receives or is entitled to receive any
Project Revenues to pay such Project Revenues directly to the
Security Agent for deposit in the Revenue Account, and if the
Partnership shall receive any Project Revenues it shall delive
r such Project Revenues in the exact form received (but with
the Partnership's endorsement, if necessary) to the Security
Agent for deposit in the Revenue Account not later than the
second Business Day after the Partnership's receipt thereof.
The Security Agent shall have the right to receive all Project
Revenues directly from the Persons owing the same. All Project
Revenues received by the Security Agent shall be deposited in
the Revenue Account. (a) The Partnership shall instruct the
Contractor, the Power Purchaser, the Gas Supplier and any other
applicable Per son to make all Special Payments (identifying
them as such) to the Security Agent for deposit in the Special
Payment Account (provided that the Partnership may instruct the
Power Purchaser to make payments pursuant to Subsection 15.3
of the Power Purchase Agreement directly to GE Capital), and if
the Partnership shall receive any Special Payments it shall
deliver such Special Payments in the exact form received (but
with the Partnership's endorsement, if necessary) to the
Security Agent for deposit in the Special Payment Account not
later than the second Business Day after the Partnership's
receipt thereof. The Security Agent shall have the right to
receive all Special Payments directly from the Persons owing
the same. All Special Payments received by the Security Agent
shall be deposited in the Special Payment Account.
(b) The Partnership shall deliver to the Security Agent all payments
in respect of casualty to or loss of property receive d by it from
any insurer pursuant to the property or casualty insurance
maintained by the Partnership and all awards and proceeds in
respect of a taking in the exact form received, bu t with the
Partnership's endorsement, if necessary ("Insurance a nd
Condemnation Proceeds"), for deposit in the Insurance and
Condemnation Proceeds Account not later than the second Busine
ss Day after the Partnership's receipt thereof.
(c) On the Lease Closing Date, the Lessee shall deposit in the
Operation and Maintenance Reserve Account an amount equal to the Initial
Operation and Maintenance Reserve Deposit.
(d) On the Lease Closing Date, the Lessee shall deposit in the
Warranty Maintenance Reserve Account an amount equal to the Required
Warranty Maintenance Reserve Deposit.
(e) On the Lease Closing Date, the Lessee shall deposit in the
Rent Reserve Account an amount equal to the Initial Rent Reserve Deposit.
Section 3.2 Information to Accompany Amounts Delivered to Security
Agent; Deposits Irrevocable. (a) All amounts delive red to the
Security Agent by the Partnership shall be accompanied by
information in reasonable detail specifying the source of the
amounts and the Account or Accounts into which such amounts are
to be deposited. If the Security Agent shall be unable to
determine the source of any payments received or the Account or
Accounts into which such payments are to be deposited, the
Security Agent shall hold such amounts in the Revenue Account
until identified by the Partnership and GE Capital.
(b) Any deposit made into any Account hereunder shall,
absent manifest error, be irrevocable and the amount of such deposit and
any instrument or security held in such Account hereunder and all
interest thereon shall be held in trust by the Security Agent
and applied solely as provided herein.
Section 3.3 Books of Account; Statements. (a) The Security Agent
shall maintain books of account on a cash basis and reco rd therein all
deposits into and transfers to and from the Accoun ts and all investment
transactions effected by the Security Agent pursuant to Article
V.
(b) Not later than the tenth Business Day of each month,
commencing with the first month to occur after the earlier of
(i) the Commercial Operation Date (as certified to the Security
Agent by GE Capital or the Partnership) and (ii) the date on
which any Special Payments or Insurance and Condemnation
Proceeds are received, the Security Agent shall deliver to the
Partnership and GE Capital a statement setting forth the
transactions in each Account during the preceding month and
specifying the Project Revenues, Special Payments, Insurance
and Condemnation Proceed s Deposits, cash equivalents and other
amounts held in each Acco unt at the close of business on the
last Business Day of the preceding month and the Value thereof
at such time.
ARTICLE IV
Payments from Accounts
Section 4.1 Revenue Account--Payments On and Prior to the Lease
Closing Date. On and prior to the Lease Closing Date, the Security Agent
shall, upon receipt by it of a certificate signed by an Authorized Officer
of the Partnership in substantially the form of Exhibit A (and
countersigned by GE Capital) instructing it to do so, apply
cash available in the Revenue Account to the payment of the
Project Costs specified in such certificate or to such other
costs or amounts or purposes (which may include the funding of
a working capital reserve) as may be specified in such
certificate.
Section 4.2 Revenue Account--Monthly Transfers After the
Lease Closing Date. (a) On or before the twentieth day of each
month (or if such day is not a Business Day, the immediately
preceding Business Day), the Partnership shall deliver to GE
Capital a Project Certificate in substantially the form of
Schedule 1 signed by an Authorized Officer of the Partnership
requesting distributions to be made from the Revenue Account.
If GE Capital approves such Project Certificate, GE Capital
shall countersign such Project Certificate on the Business Day
prior to the applicable Monthly Transfer Date and the
Partnership shall cause such countersigned Project Certificate
to be delivered to the Security Agent. On the twenty-fifth day
of each month (or if such date is not a Business Day, the
immediately succeeding Business Day) (each such date, a
"Monthly Transfer Date"), the Security Agent shall distribute,
from the cash available in the Revenue Account, (i) (A)
directly to each Person to which an amount in excess of
$100,000 is due and payable, the amounts identified as Project
Expenses then due and owing in Item 1 of the Project
Certificate referred to above, or (B) to the Partnership for
the benefit of the Persons entitled thereto, all other Project
Expenses then due and owing in Item 1 of such Project
Certificate and (ii) to the Current Account, the amounts
identified as Project Expenses expected to be due and owing
prior to the next Monthly Transfer Date in Item 2 of such Project
Certificate. Project Expenses owing to the Gas Supplier, the
Operator, the Gas Transporters and for fuel supplies shall, to
the extent sufficient funds are not on deposit to satisfy all
Project Expenses set forth in such Project Certificate, take
priority over all other Project Expenses.
(b) For purposes of this Section 4.2, cash available in the
Revenue Account shall not include any check or other instrument which may be
deposited therein until the final collection thereof.
Section 4.3 Revenue Account--Quarterly Transfers After the Lease
Closing Date. On each Basic Rent Payment Date, the Security Agent shall
distribute from the cash available in the Revenue Account
(after making any distribution required by Sections 4. 2 and
4.4) the following amounts in the following order of priority:
first, to GE Capital, the amount of all fees payable pursuant
to subsection 2.11 of the Loan Agreement, which GE Capital
certifies to the Security Agent to be due and payable on such
date; second, to the Owner Trustee (or, so long as GE Capital
shall be the sole beneficiary of the trust established pursuant
to the Trust Agreement, directly to GE Capital), the amount
of Basic Rent which GE Capital certifies to the Security Agent
to be due and payable on such date; third, to GE Capital, the
amount, if any, equal to the principal (excluding any mandatory
prepayments thereof), interest, fees and other amounts which GE
Capital certifies to the Security Agent to be due and payable
in respect of any Partnership Equity Loans; fourth, to the
Operation and Maintenance Reserve Account, the amount certified
to the Security Agent by an Authorized Officer of the
Partnership (and countersigned by GE Capital) required to be
deposited therein pursuant to Sections 7(b)(i) and 7(b)(iii) of
the Facility Lease; fifth, to the Rent Reserve Account, the
amount certified to the Security Agent by an Authorized Officer
of the Partnership (and countersigned by GE Capital) required
to be deposited therein pursuant to Sections 7(c)(i) and
7(c)(iii) o f the Facility Lease; sixth, to GE Capital, the
amount, if any, equal to the required prepayment of principal
of the Partnership Equity Loa ns which GE Capital certifies to
the Security Agent to be due and payable; seventh, to GE
Capital, the amount, if any, equal to the principal (including
any mandatory prepayments thereof), interest, fees and other
amounts which GE Capital certifies to the Security Agent to be
due and payable in respect of any Partner Equity Loans; eighth,
if the conditions precedent to cash distributions to the
Partners set forth in subsection 7.3 of the Loan Agreement are
not satisfied as of such Basic Rent Payment Date (as set forth
in a certificate of GE Capital to the Security Agent), to the
Distribution Reserve Account, an amount equal to the lesser of
(x) the remainder of the cash available in the Revenue Account
and (y) Cash Available for Distributions for the immediately
preceding Quarterly Measurement Period; and ninth, if and to
the extent permitted pursuant to subsection 7.3 of the Loan
Agreement (as set forth in a certificate of an Authorized
Officer of the Partnership and countersigned by GE Capital), to
the Partnership Security Account, an amount equal to the lesser
of (x) the remainder of the cash available in the Revenue
Account and (y) Cash Available for Distributions for the
immediately preceding Quarterly Measurement Period.
Section 4.4 Supplemental Rent. On any date when due, the Security
Agent, upon receipt of a certificate signed by an Authorized Officer
of the Partnership or GE Capital, in substantially the form of
Exhibit B (and in the case of a certificate signed by the
Partnership, countersigned by GE Capital), shall promptly pay
to the Owner Trustee or such other Person as may be entitled
thereto the amount (to the extent of cash available in the
Revenue Account) equal to the amount of Supplemental Rent
(other than amounts specifically provided for in Section 4.3),
including the fees and expenses of the Security Agent and the
Owner Trustee, then due and payable pursuant to Section 3(b) of
the Facility Lease and not otherwise paid or payable from
amounts on deposit in the Insurance and Condemnation Proceeds
Account or the Special Payment Account, as specified in such
certificate.
Section 5.5 Rent Reserve Account. If, on any Basic Rent
Payment Date, the cash available in the Revenue Account, the
Distribution Reserve Account and the Partnership Security
Account is insufficient to make the payment obligations set
forth in clauses second and third of Section 4.3 on such Basic
Rent Payment Date, the Security Agent shall immediately notify
GE Capital and GE Capital, at its option, may direct the
Security Agent (by delivering a certificate in substantially
the form of Exhibit C) to transfer to the Owner Trustee (or to
GE Capital, if GE Capital is the sole beneficiary of the trust
established pursuant to t he Trust Agreement or if the
deficiency is in the payment obligations set forth in clause
third of Section 4.3) the amount (to the extent cash is
available in the Rent Reserve Account) equal to the amount of
any deficiency in the payment obligations set forth in clauses
second and third of Section 4.3 on such Basic Rent Payment
Date.
Section 4.6 Operation and Maintenance Reserve Account. Within
three Business Days after receipt by the Security Agent of a
certificate, which (a) states that a drawing has been made und
er the O&M Letter of Credit or (b) includes a list of requested
disbursements and invoices and other supporting documents as m
ay be necessary to properly document all such disbursements,
which certificate is signed by GE Capital (in the case of
clause (a) ), or by an Authorized Officer of the Partnership
and countersign ed by GE Capital (in the case of clause (b)),
substantially in the form of Exhibit D hereto, and, in the
case of clause (b), so l ong as no Lease Default or Lease Event
of Default shall have occurred and be continuing (as set forth
in such certificate), funds on deposit in the Operation and
Maintenance Reserve Account shall be distributed to GE Capital
or to the Partnership or the payee(s), as the case may be, in
the manner, in the amount and at the addresses specified in
such certificate.
Section 4.7 Release of Excess Amounts. If, as of any
Basic Rent Payment Date, (i) an amount is on deposit in the
Rent Reserve Account or the Operation and Maintenance Reserve
Account in excess of the Required Rent Reserve Balance or the
Required Operation and Maintenance Reserve Balance, as the case
may be, as the result of the actual realization of income or
gain on the amounts on deposit in such Account, (ii) no Lease
Default or Lease Event of Default has occurred and is
continuing and (iii ) the Security Agent shall have received a
certificate signed by an Authorized Officer of the Partnership
and countersigned by GE Capital, substantially in the form of
Exhibit E, certifying as to such matters, then the Security
Agent shall distribute any such excess amounts to the Revenue
Account.
Section 4.8 Special Payment Account. (a) All Special Payments
deposited in the Special Payment Account constituting liquidated
damages (Contract Price Discount) under Section 5.04 of the
Construction Contract shall be applied by GE Capital to the
prepayment of the Loans as provided in subsection 2.6(b) of the
Loan Agreement (provided that all such liquidated damages
received after the Lease Closing Date shall be applied by GE
Capital to the retroactive reduction of Lessor's Cost) and, in
the case of Special Payments constituting liquidated damages
(Contract Price Discount) under Section 5.02 of the Construction
Contract, shall, subject to Section 4.14 of this Agreement,
be applied by GE Capital 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.
(a) All Special Payments deposited in the Special Payment
Account constituting payments by the Power Purchaser pursuant to
Subsection 15.3(b) (whether in respect of costs, expenses or fees) of
the Power Purchase Agreement shall be applied by GE Capital to the
prepayment of the Loans and the LOC Reimburseme nt Obligations
and the cash collateralization of the Letters of Credit as
provided in subsection 2.6(c) of the Loan Agreement.
(b) All Special Payments deposited in the Special Payment Account
constituting payments by the Gas Supplier pursuant to Section
17.3 of the Gas Supply Agreement shall, subject to Section 4.14
of this Agreement, be applied by the Partnership with the
consent of GE Capital to the costs of entering into a
replacement gas supply agreement and to such other related costs
as shall be approved by GE Capital in writing.
Section 4.9 Partnership Security Account. (a) To the extent that at
any time the cash then available in the Revenue Account is
insufficient to make any of the payments, deposits or transfers
contemplated by Sections 4.1, 4.2, 4.3 and 4.4, the Security
Agent shall from and to the extent of the cash available in the
Partnership Security Account withdraw such amounts from the
Partnership Security Account as directed by GE Capital and make
the aforesaid payments, deposits and transfers.
(b) Within three Business Days after each Basic Rent Payment
Date, if the Partnership has delivered a certificate signed by an Authorized
Officer of the Partnership and countersigned by GE Capital,
substantially in the form of Exhibit F hereto, certifying that
the conditions precedent to cash distributions to the Partners
set forth in subsection 7.3 of the Loan Agreement have been
satisfied, the Security Agent shall distribute to the
Partnership the cash then available in the Partnership Security
Account.
Section 4.10 Distribution Reserve Account. (a) If, as of
any Basic Rent Payment Date after the issuance of the Equity
Loans, the Security Agent shall have received a certificate of
an Authorized Officer of the Partnership or GE Capital (and in
the case of a certificate of the Partnership, countersigned by
GE Capital) that the Operating Cash Flow Ratio for each of the
two Quarterly Measurement Periods immediately preceding such
Basic Rent Payment Date was less than 1.20 to 1, the Security
Agent shall, subject to any required applications taking
precedence pursuant to paragraph
(b) below, apply the amounts on deposit in the Distribution
Reserve Account to the prepayment of the remaining installments of
principal of the Equity Loans in the inverse order of maturity, as specified
in a certificate from GE Capital to the Security Agent. (a) To the
extent that at any time the cash then available in the Revenue
Account is insufficient to make any of the payments, deposits
or transfers contemplated by Sections 4.1, 4.2, 4.3 a nd 4.4,
the Security Agent shall from and to the extent of the cash
available in the Distribution Reserve Account withdraw such
amounts from the Distribution Reserve Account as directed by GE
Capital and make the aforesaid payments, deposits and
transfer s.
(c) If, as of any Basic Rent Payment Date, the
Security Agent shall have received a certificate of an
Authorized Officer of the Partnership (and countersigned by GE
Capital) that (i) the Operating Cash Flow Ratio for each of the
two Quarterly Measurement Periods immediately preceding the
date of such certificate was greater than 1.20 to 1 and
provided that no Le ase Default or Lease Event of Default shall
have occurred and be continuing (as set forth in such
certificate), the Security Ag ent shall transfer the amounts on
deposit in the Distribution Reserve Account to the Revenue
Account.
Section 4.11 Insurance and Condemnation Proceeds Account. (a)
All cash, cash equivalents, instruments, investments and
securities at any time on deposit in the Insurance and
Condemnation Proceeds Account, including all interest or other
income earned with respect thereto, are herein called the
"Insurance and Condemnation Proceeds Deposits".
(b) The Insurance and Condemnation Proceeds Deposits shall be
accumulated in the Insurance and Condemnation Proceeds Account
and held therein until paid to or upon the order of the
Partnership as provided in paragraph (c) of this Section 4.11,
or paid to GE Capital as provided in paragraph (d) or (e) of
this Section 4.11, or returned to the Partnership as provided
in Section 9.2.
(c) (i) If the amount of Insurance and Condemnation Proceeds
Deposits of the Partnership is less than $500,000, such amount shall,
subject to the provisions of paragraphs (d) and (e) of this Section 4.11,
be paid over to or upon the order of the Partnership, as the case may be, to
reimburse it for, or to pay, the cost of repairing, rebuilding
or otherwise replacing the damaged or destroyed or lost or
condemned property in respect of which such moneys were
received, upon the receipt by the Secur ity Agent of a
certificate of an Authorized Officer of the Partnership,
countersigned by GE Capital, (A) containing the plans and
specifications setting forth in reasonable detail the work
done or proposed to be done and materials purchased or to be
purchased by way of the renewal, repair, rebuilding or other
replacement of the damaged or destroyed or lost or condemned
property and (B) stating the specific amount requested to be paid
over to or upon the order of the Partnership or that such
amount is requested to reimburse the Partnership as the case
may be, for, or to pay, costs actually incurred to repair,
rebuild or replace property and that such amount, together with
amounts remaining in the Insurance and Condemnation Proceeds
Account for such purpose and other funds of the Partnership
available for such purpose, are sufficient to pay in full the
costs of such renewal, repair, rebuilding or other replacement.
GE Capital shall countersign such certificate if (w) no Lease
Default or Lease Event of Default has occurred and is
continuing, (x) GE Capital shall have received an opinion of
counsel, satisfactory to it, stating that all Governmental
Actions required in connection with the work done or proposed
to be done have been obtained, (y) in the reasonable opinion of
GE Capital and GE Capital's Representative, the matters
referred to in such certificate can be accomplished in the
manner provided for in such certificate and (z) GE Capital
shall have received (I) evidence of any lien waivers requested
to be obtained by it, a nd (II) evidence, satisfactory to GE
Capital, that the Lien of th e Collateral Security Documents is
in full force and effect; or (i) if the amount of Insurance and
Condemnation Proceeds Deposits is more than $500,000, such
amount shall, subject to the provisions of paragraphs (d) and
(e) of this Section 4.11, be paid over to the Persons entitled
thereto from time to time (as set forth in the certificate
referred to below) to pay the cost of repairing, rebuilding or
otherwise replacing the damaged or destroyed or lost or
condemned property in respect of which such moneys were
received, upon the receipt by the Security Agent of a
certificate of an Authorized Officer of the Partnership
countersigned by GE Capital, (A) containing the plans and
specifications setting forth in reasonable detail the work done
or proposed to be done and the materials purchased or to be
purchased by way of the renewal, repair, rebuilding or other
replacement of the damaged or destroyed or lost or condemned
property and (B) stating the specific amounts requested to be
paid, the Persons to whom and the dates on which such amounts
are to be paid, that such amounts will be used to pay costs
actually incurred to repair, rebuild or replace property and
that such amounts, together with amounts remaining in the
Insurance and Condemnation Proceeds Account for such purpose
and other funds of the Partnership available for such purpose,
are sufficient to pay in full the costs of such renewal,
repair, rebuilding or other replacement. GE Capital shall
countersign such certificate if (w) no Lease Default or Lease
Event of Default has occurred an d is continuing, (x) GE
Capital shall have received an opinion of counsel,
satisfactory to it, stating that all Governmental Actions
required in connection with the work done or proposed to be
done have been obtained, (y) in the reasonable opinion of GE
Capital and GE Capital's Representative, the matters referred
to in such certificate can be accomplished in the manner
provided for in such certificate and (z) GE Capital shall have
received (I) evidence of any lien waivers requested to be
obtained by it, and (II) evidence, satisfactory to GE Capital,
that the Lien of the Collateral Security Documents is in full
force and effect; or (ii) In the event that any amounts remain
in the Insurance and Condemnation Proceeds Account after
application thereof in accordance with this paragraph (c), the
Security Agent shall either apply such Insurance and
Condemnation Proceeds Deposits to the payment of the
Obligations or in accordance with Section 9(g)(iii) of the
Facility Lease, in accordance with the instructions of GE
Capital. (c) If GE Capital shall at any time notify the
Security Agent that an Event of Loss has occurred, then, unless
the Project is being repaired in accordance with Section
9(c)(i) of the Facility Lease, the Security Agent shall
promptly withdraw the Insuranc e and Condemnation Proceeds
Deposits from the Insurance and Condemnation Proceeds Account
and deliver the same to GE Capital to be applied by GE Capital
to the payment of the Obligations in accordance with the
provisions of the Loan Agreement, the Facility Lease and the
Collateral Security Documents. (d) If GE Capital shall at any
time notify the Security Agent that an Event of Default or a
Lease Event of Default has occurred and is continuing, then
the Security Agent shall promptly withdraw the Insurance and
Condemnation Proceeds Deposits from the Insurance and
Condemnation Proceeds Account and apply the same to the payment
of the Obligations in accordance with the provisions of the
Loan Agreement, the Facility Lease and the Collateral Security
Documents, as instructed in writing by GE Capital.
Section 4.12 Warranty Maintenance Reserve Account.
(a) Within three Business Days after receipt by the Security Agent of a
certificate, which includes a list of requested disbursements and invoices
and other supporting documents as may be necessary to properly
document all such disbursements, signed by an Authorized
Officer of the Partnership and countersigned by GE Capital,
substantially in the form of Exhibit G hereto, and so long as
no Lease Default or Lease Event of Default shall have occurred
and be continuing (as specified in such certificate), funds on
deposit in the Warranty Maintenance Reserve Account shall be
distributed to the Turbine Manufacturer in the manner and in the
amount and at the addresses specified in such certificate.
(b) Upon receipt of a certificate signed by an Authorized
Officer of the Partnership or GE Capital (and in the case of a
certificate signed by the Partnership, countersigned by GE
Capital) certifying that the warranty period in respect of the
Turbine Contract, including any extensions thereof, has expired,
and provided that no Lease Default or Lease Event of Default
shall have occurred and be continuing (as specified in such
certificate), the Security Agent shall promptly transfer the
amounts on deposit in the Warranty Maintenance Reserve Account
to the Revenue Account.
Section 4.13 Current Account. The Security
Agent shall pay, from and to the extent of cash available in
the Current Account and as set forth in an officer's
certificate signed by an Authorized Officer of the Partnership
(and countersigned by GE Capital), (i) directly to each Person
to which an amount in excess of $100,0 00 is due and payable,
the amounts previously identified as Project Expenses in Item
2 of the most recently delivered Project Certificate which are
then due and owing, or (ii) to the Partnership for the benefit
of the Persons entitled thereto, all other such Project
Expenses previously identified in Item 2 of the most recently
delivered Project Certificate which are then due and owing.
Section 4.14 Defaults. Any other provision contained in this Agreement
to the contrary notwithstanding, upon receipt by the Security
Agent of written notice from GE Capital stating that an Event
of Default or Lease Event of Default has occurred and is
continuing, the Security Agent shall thereafter distribute cash
from the Accounts only upon the express written instructions
of GE Capital (which instructions may provide that such
amounts be applied to the payment of the Obligations as GE
Capital sees fit) until notified in writing by GE Capital that
any such Event of Default or Lease Event of Default has been
waived by GE Capital or the Owner Trustee or has been cured.
Section 4.15 Certain Payments. Any other provision contained in this
Agreement to the contrary notwithstanding, in the event that
on any Basic Rent Payment Date there are insufficient funds on
deposit in any Account to pay principal, interest, fees,
distributions and/or other amounts due and payable from such
Account on such Basic Rent Payment Date to GE Capital or to the
Owner Trustee, as the case may be, and thereafter funds are
deposited into the Revenue Account, the Security Agent shall
distribute such funds to GE Capital or to the Owner Trustee, as
the case may be, for the payment of such principal, interest,
fees or other amounts, such payments to be made in the same order
of priority as they would have been made had such funds
been on deposit in the applicable Account on such Basic Rent
Payment Date.
Section 4.16 Delivery of Officer's Certificates; Timing
of Payments. (a) Each of the certificates of an Authorized Officer
required to be delivered hereunder shall be delivered not
later than 12:00 noon, New York City time, on the Business Day
immediately prior to the day on which the Security Agent is
required to make transfers hereunder. Any certificate of an
Authorized Officer delivered later than the time specified herein
shall nevertheless be considered valid and shall be honored
by the Security Agent on or as promptly after the date
otherwise specified herein for payment as is practicable,
subject to the availability of cash in the applicable Account.
(b) Subject to (i) the timely receipt of a certificate of an
Authorized Officer as set forth in Section 4.16(a), (ii) the
availability of cash in the applicable Account and (iii) other
circumstances beyond the control of the Security Agent, the
Security Agent shall make any payment hereunder required (except
for transfers between Accounts) by means of wire transfer of
immediately available funds, to the address of the payee(s) set
forth in the applicable certificate, to be received prior to
2 :00 p.m., New York City time, on the date specified herein
for such payment.
ARTICLE V
Investment
Section 5.1 Investment. (a) Any cash held by the Security Agent in
any Account shall be invested by the Security Agent from time to time as
directed in writing by the Partnership (or, if GE Capital shall have
notified the Security Agent that a Default, Event of Default, Lease Default
or Lease Event of Default has occurred and is continuing, by GE
Capital) in Permitted Investments. Any income or gain realized
as a result of any such investment shall be held as part of
the applicable Account and reinvested as provided herein. Any
income tax payable on account of any such income or gain shall
be paid by the Partnership or its Affiliates. Any such
investment may be sold (without regard to maturity date) by
the Security Agent whenever necessary to make any distribution
required by this Agreement. The Security Agent shall have no
liability for any loss resulting from any such investment or
sale thereof other than by reason of its willful misconduct or
negligence. The Security Agent will promptly notify GE Capital
and the Partnership of any loss resulting from any such
investment or sale and GE Capital, in its sole discretion, may
instruct the Security Agent to, and the Security Agent shall,
reimburse the affected Account from the Revenues received
pursuant to Section 4.2 hereof.
(b) The term "Permitted Investments" means (i) obligations of,
or guaranteed as to the interest and principal by, the United States
Government or any agency thereof; (ii) open market commercial paper, with a
maturity of not longer than ninety (9 0) days, of any
corporation incorporated under the laws of the United States or
any state thereof rated "prime-1" or its equivalent by Xxxxx'x
Investors Service, Inc. or "A-1" or its equivalent by Standard
& Poor's Ratings Group; (iii) bankers acceptances or
certificates of deposit issued by any bank rated "Aa" or "AA"
or better by Xxxxx'x Investors Service, Inc. or Standard &
Poor's Ratings Group, and having a maximum maturity of one (1)
year; (iv) any obligations of the Security Agent, any bank
rated "A" or better by Xxxxx'x Investors Service, Inc. or
Standard & Poor's Ratings Group, in respect of the repurchase
of obligations of the type described in clause (i) which
obligati on is secured by obligations of the type described in
clause (i) or by any one or more certificates of deposit of the
type described in clause (iii) hereof; (v) federally insured
demand deposit accounts with the Security Agent and banks
having capital, surplus and undivided profits of at least One
Billion dollars ($1,000,000,000) that are members of the
Federal Reserve Syste m of the United States; or (vi) a money
market fund registered under the Investment Company Act of
1940, as amended from time to time, the portfolio of which is
limited to United States government obligations and United
States government agency obligations (bearing the full faith
and credit of the United States government); provided, that all
funds in the Accounts shall not at any time be invested in
Permitted Investments wit h a maturity of greater than one (1)
year or with an average maturity, calculated on a weighted
average basis, of more than six (6) months; and provided,
further, that with respect to th e credit ratings specified
above, if neither Xxxxx'x Investors Service, Inc. nor Standard
& Poor's Ratings Group is in the business of rating the
relevant Permitted Investment, such Permitted Investment shall
have received a rating equivalent to that specified above for
such Permitted Investment by another nationally recognized
credit rating agency of similar standing.
ARTICLE VI
Security Agent
Section 6.1 Rights, Duties, etc. The acceptance by the Security Agent
of its duties hereunder and under the other Collateral Security
Documents is subject to the following terms and conditions
which the parties to this Agreement hereby agree shall govern
and control with respect to its rights, duties, liabilities and
immunities: (i) it shall act hereunder as an agent only and
shall not be responsible or liable in any manner whatever for
soliciting any funds or for the sufficiency, correctness,
genuineness or validity of any funds, securities or other
amounts deposited with or held by it; (ii) it shall be
protected and held harmless in acting or refraining from acting
upon, and shall not be bound to make any investigation into
the facts or other matters stated in, any written notice,
certificate, instruction, request or other paper or document,
as to the due execution thereof and the validity and
effectiveness of the provisions thereof and as to the truth of
any information therein contained, which the Security Agent in
good faith believes to be genuine; (iii) it shall not be liable
for any error of judgment or for any act done or step taken or
omitted except in the case of its gross negligence, willful
misconduct or bad faith; (iv) it may consult with and obtain
advice from counsel of its own choice in the event of any
dispute or question as to the construction of any provision
hereof or otherwise in connection with its duties as Security
Agent hereunder; (v) it shall have no duties as Security Agent
except those which are expressly set forth herein and in any
modification or amendment hereof, and it is not charged with
knowledge of or any duties or responsibilities in connection
with any other docume nt or agreement other than the Collateral
Security Documents; provided, however, that no such
modification or amendment here of shall affect its duties
unless it shall have given its prior written consent thereto;
(vi) it may execute or perform any duties hereunder and under
the other Collateral Security Documents (other than the holding
of the Accounts and stock certificates or any other Collateral
which is required to be held by it for purposes of perfection)
either directly or through agents or attorneys selected with
reasonable care; (vii) it may engage or be interested in any
financial or other transactions with any party hereto and may
act on, or as depositary, trustee or agent for, any committee
or body of holders of obligations of such Persons as freely as
if it were not Security Agent hereunder; (viii) it shall have
no right of set-off against any Account; (ix) it hereby waives
any and all Liens which may arise from time to time in its
favor on any Account or any other amounts received by it
pursuant to this Agreement; and (x) it shall not be obligated
to take any action which in its reasonable judgment would
involve it in expense or liabili ty unless it has been
furnished with an indemnity reasonably satisfactory to it.
Section 6.2 Resignation or Removal. (a) The Security Agent may at
any time resign by giving notice to each other party to this Agreement,
such resignation to be effective upon the appointment of a
successor Security Agent as hereinafter provided.
(b) GE Capital may remove the Security Agent at any time by
giving notice to each other party to this Agreement, such removal to
be effective upon the appointment of a successor Security Agent
as hereinafter provided.
(c) In the event of any resignation or removal of the Security
Agent, a successor Security Agent, which (i) shall be a bank or trust
company organized under the laws of the United States of America or of
the State of Connecticut or the State of New Yor k, having a capital and
surplus of not less than $100,000,000, an d shall in any event
maintain an office in Hartford, Connecticut or New York City
where it will hold the Accounts, and (ii) shall be appointed by
GE Capital, subject to the approval of the Partnership (which
approval shall not be unreasonably withheld or delayed) so long
as no Default or Event of Default or Lease Default or Lease
Event of Default shall have occurred and be continuing. If a
successor Security Agent shall not have been appointed or shall
not have accepted its appointment as Security Agent hereunder
within 45 days after such notice of resignation of the
Security Agent or such notice of removal of the Security
Agent, the Security Agent, GE Capital, the Owner Trustee or the
Partnership may apply to any court of competent jurisdiction
to appoint a successor Security Agent to act until such time,
if any, as a successor Security Agent shall have accepted its
appointment as above provided. Any successor Security Agent so
appointed by such court shall immediately and without further
act be superseded by any successor Security Agent appointed by
GE Capital and the Owner Trustee with the approval of the
Partnership as above provided. Any such successor Security Agent
shall deliver to each party to this Agreement a written
instrument accepting such appointment hereunder and under the
other Collateral Security Documents and thereupon such success
or Security Agent shall succeed to all the rights and duties of
the Security Agent hereunder and thereunder and shall be
entitled to receive the Accounts and other Collateral from the
predecessor Security Agent.
ARTICLE VII
Determinations
Section 7.1 Value. Cash and Permitted Investments on deposit from
time to time in the Accounts shall be valued (the "Value") by the Security
Agent as follows: (a) cash shall be valued at the face amount
thereof; and (b) Permitted Investments shall be valued at the
lesser of the face amount and the purchase price.
Section 7.2 Other Determinations. The Partnership, GE Capital and the
Security Agent may establish procedures not inconsistent with this
Agreement pursuant to which the Security Agent may conclusively
determine, for purposes of this Agreement, the amounts from
time to time to be distributed or paid by the Security Agent
from cash available in the Accounts.
Section 7.3 Sales of Permitted Investments. The Security Agent will
use its best efforts to sell Permitted Investments so tha t actual cash is
available, on each date on which a distribution is to be made pursuant to
this Agreement, for the Security Agent to make such distribution
in cash on such date. The amount of any check or other
nstrument which may be deposited in any Account shall
not be treated as cash available until the final collection
thereof.
Section 7.4 Available Cash. In determining the amount of
available cash in any Account at any time, in addition to any
cash then on deposit in such Account, the Security Agent shall
treat as available cash the amount which the Security Agent
would have received on such day if the Security Agent had
liquidated all the Permitted Investments (at then prevailing
market prices) then on deposit in such Account.
ARTICLE VIII
Representations and Warranties
Sectoin 8.1 Representations. The Partnership represents and warrants,
for the benefit of GE Capital and the Owner Trustee, that each certificate
of an Authorized Officer delivered by the Partnership in connection
with this Agreement shall be true and correct in all material
respects and that the amounts of money certified thereby shall
be the proper amounts to be set forth in such certificate of an
Authorized Officer.
Section 8.2 Indemnification. The Partnership hereby undertakes to
indemnify and hold harmless the Security Agent, the Owner Trustee and GE
Capital from and against any and all expenses imposed on, incurred by or
asserted against such Person in any way relating to or arising out of any
inaccuracy in any certificate of an Authorized Officer
delivered by the Partnership.
ARTICLE IX
Miscellaneous
Section 9.1 Fees and Indemnification of Security Agent. The
Partnership agrees to pay the reasonable fees of the Security Agent as
compensation for its services under this Agreement. In addition, the
Partnership assumes liability for, and agrees to indemnify,
protect, save and keep harmless the Security Agent and its
officers, employees, successors, assigns, agents and servants
from and against, any and all claims, liabilities, obligations,
losses, damages, penalties, costs and expenses (including
reasonable attorney's fees and expenses) that may be imposed on,
incurred by, or asserted against, at any time, the Security
Agent or its officers and employees and in any way relating to
or arising out of the execution and delivery of this Agreement,
the establishment of the Accounts, the acceptance of deposits,
the purchase or sale of Permitted Investments, the retention of
cash, Permitted Investments or the proceeds thereof and any
payment, transfer or other application of cash or Permitted
Investments by the Security Agent or GE Capital in accordance
with the provisions of this Agreement, or as may arise by
reason of any act, omission or error of the Security Agent made
in good fait h in the conduct of its duties; except that the
Partnership shal l not be required to indemnify, protect, save
and keep harmless the Security Agent against its own gross
negligence, active or passive, or willful misconduct. The
indemnities contained in this Section 9.1 shall survive the
termination of this Agreement.
Section 9.2 Termination. Subject to Section 9.1, the provisions of
this Agreement shall terminate on the date on which all Obligations shall
have been paid in full and the Loan Agreemen t and the Facility Lease shall
have terminated in accordance with their respective terms. This
Agreement shall be deemed to hav e terminated upon receipt by
the Security Agent of a certificate to such effect executed by
the Partnership and GE Capital. Upon termination of this
Agreement the Security Agent shall transfer any remaining
amounts, together with any interest thereon, on deposit in the
Accounts to the party or parties specified in such
certificate. Any liability or obligation hereunder arising prior
to the termination of this Agreement shall survive such
termination.
Section 9.3 Severability. If any one or more of the covenants or
agreements provided in this Agreement on the part of the parties hereto
to be performed should be determined by a court of competent jurisdiction
to be contrary to law, such covenant or agreement shall be deemed and
construed to be severable from the remaining covenants and agreements herein
contained and shall in no way affect the validity of the
remaining provisions of this Agreement.
Section 9.4 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of wh ich shall
constitute but one and the same instrument.
Section 9.5 Amendments. This Agreement may not be modified or amended
except in accordance with the provisions of subsection 9.1 of the Loan
Agreement and with the prior written consent of each of t he parties hereto.
Section 9.6 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
EXCEPT THAT THE CREATION, VALIDITY AND PERFECTION OF THE
SECURITY INTERESTS IN THE ACCOUNTS HEREUNDER SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF CONNECTICUT.
Section 9.7 Notices. Unless otherwise specifically provided herein,
all notices, requests and demands to or upon the respective parties hereto
to be effective shall be in writing, by telecop ier or, if available,
by telex and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered by
hand, or when deposited in the mail, first class postage
prepaid or with an overnight 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, and shall be directed to the address,
telecopy or telex number of such Person designated pursuant to
the Loan Agreement, or in the case of the Security Agent or the
Owner Trustee, to 000 Xxxx Xxxxxx, Xxxxxxxx, XX 00000,
Attention: Corporate Trust Administration, Telecopy No. (203)
9867920, or to such other address, or telecopy number as may
be specified from time to time by such Person or the Security
Agent or the Owner Trustee.
Section 9.8 Submission to Jurisdiction; Waivers.
Each of the parties hereto irrevocably and unconditionally
agrees to the submission to jurisdiction and the waivers as set forth
in Section 9.13 of the Loan Agreement.
Section 9.9 Limited Liability. There shall be full recourse
to the Partnership and all of its assets for the liabilities of
the Partnership under this Agreement and its other Obligations,
but in no event shall any Partner, Affiliate of any Partner,
or an y 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 in any other Loan Document or
Lease 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 hereunder. Subject to the
foregoing limitation on liability, GE Capital or the Owner
Trustee 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 such Person in
accordance with the terms of any other Transaction Document
creating such liabilities and obligations to which such Partner
or Affiliate is a party.
Section 9.10 WAIVERS OF JURY TRIAL. THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS SECURITY DEPOSIT AGREEMENT
AND FOR ANY COUNTERCLAIM THEREIN.
Section 9.11 Benefit of Agreement. This Agreement shall inure
to the benefit of, and be enforceable by, the parties hereto
and their respective successors and permitted assigns, and no
other Person shall be entitled to any of the benefits of this
Agreement.
Section 9.12 Leveraged Lease. If, upon the sale of the
Facility by the Partnership to the Owner Trustee in accordance
with the provisions of the Loan Agreement, GE Capital exercises
its option under subsection 5.8 of the Loan Agreement to
borrow funds to finance (or refinance) a portion of the
purchase price of the Facility, the parties hereto agree to
execute a supplement hereto to provide for the payment of any
such Lease Debt and to otherwise provide for such provisions as
are customary and appropriate in respect of leveraged lease
transactions.
Section 9.13 Certain Rights of Power Purchaser. Nothing
in this Security Deposit Agreement shall be deemed to limit the
provisions of the Consent of the Power Purchaser, which
provisions are solely for the benefit of the Power Purchaser and
not the Partnership. Without limiting the scope of the
foregoing, the Security Agent agrees, for the exclusive benefit
of the Power Purchaser and not the Partnership, that the
exercise of remedies or any similar action under this Security
Deposit Agreement is subject to, and shall be conducted in a
manner consistent with, the Power Purchaser's rights under (i)
the Consent of the Power Purchaser and (ii) the Power Purchase
Agreement and the Transfer Agreement (to the extent such rights
under the Power Purchase Agreement and the Transfer Agreement
are not explicitly waived by the Power Purchaser in accordance
with the terms of the Consent of the Power Purchaser).
IN WITNESS WHEREOF, the parties hereto have each caused this
Agreement to be duly executed by their duly authorized
officers, all 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: Chairman, President and
Chief Executive Officer
PANDA BRANDYWINE CORPORATION,
as the General Partner
By:
Name: Xxxxxx X. Xxxxxx
Title: Chairman, President and
Chief Exeuctive Officer
GENERAL ELECTRIC CAPITAL CORPORATION
By:
Name: Xxxxxxx X. Xxxxxxx
Title: Attorney-in-Fact
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION,
as Security Agent and as Owner Trustee
By:
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
SCHEDULE 1 FORM OF PROJECT CERTIFICATE
__________, _______ 199__
Shawmut Bank Connecticut,
National Association,
as Security Agent
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporate Trust Administration Re: Panda-Brandywine
Security Deposit Agreement
Dear Sirs:
Reference is made to the Security Deposit Agreement relating to the
Brandywine cogeneration facility, dated as of March 30, 1995 (as amended,
supplemented or otherwise modified from time to time the "SDA"),
among PANDA-BRANDYWINE, L.P., a Delaware limited partnership, of which
PANDA BRANDYWINE CORPORATION, a Delaware corporation, is the general
partner, GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation and
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION, as owner trustee and
security agent (in its capacity as security agent, the "Security Agent").
Capitalized terms used herein without definition shall have the meanings
assigned to them in the SDA. The undersigned hereby certifies that he is
an Authorized Offi cer of the Partnership and, as such, he is authorized to
execute this certificate on behalf of the Partnership and
further certifies that:
(1) In addition to the Project Expenses set forth in Item 2 of the
Project Certificate delivered in any previous month (if any) and
Item 2 of this Project Certificate, the following Project Expenses
will be due and payable to the following Pers ons on the next
Monthly Transfer Date [FIRST LIST ALL PAYMENTS TO THE OPERATOR,
THE GAS SUPPLIER, EACH GAS TRANSPORTER AND FOR FUEL SUPPLIES,
WHICH WILL BE PAID FIRST;
PAYMENTS IN EXCESS OF $100,000 INDIVIDUALLY WILL BE MADE
DIRECTLY TO THE OBLIGEE; AL L OTHER PAYMENTS WILL BE TO THE
PARTNERSHIP]: Amount Description Payee (2) In addition to the
Project Expenses set forth in Item 1 of this Project
Certificate, the following Project Expenses are expected to be
due and payable to the following Persons in the period after
the next Monthly Transfer Date and prior to the Monthly
Transfer Date immediately thereafter (the "Payment Period"):
Total Accrual Estimated Due Amount Description Amount Due Date
Payee (3) The following punch list items will be due and
payable to the following Persons during the Payment Period:
Amount Description Due Date Payee (4) The amounts requested in
Item 1 of the previous Project Certificate and Item 2 of the
Project Certificate delivered pr ior thereto were applied to
the payments as set forth in such Proj ect Certificate [if
applicable, specify in detail any excess in the amount
requisitioned with respect to the previous Project Certificate
for the prior month]. (5) The amounts for Project Expenses set
forth in Items 1 and 2 above (together with the aggregate
amount of all Project Expenses requisitioned by the Partnership
pursuant to the SDA during the year in which this Project
Certificate is made) are within the Partnership's Operating
Budget for this year.
IN WITNESS WHEREOF, the undersigned has executed this Project
Certificate this ___ day of ___________.
PANDA-BRANDYWINE, L.P.
By: Panda Brandywine Corporation,
its general partner
By:_______________________
Title:
COUNTERSIGNED:
GENERAL ELECTRIC CAPITAL CORPORATION
By:_____________________________
Title:
EXHIBIT A TO SECURITY DEPOSIT AGREEMENT
[Certificate To Be Delivered Prior To The
Lease Closing Date Pursuant To Section 4.1]
__________, __199__
Shawmut Bank Connecticut,
National Association,
as Security Agent
000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Corporate Trust Administration Re: Panda-Brandywine Security
Deposit Agreement
Dear Sirs:
Reference is made to the Security Deposit Agreement relating to the
Brandywine cogeneration facility, dated as of the March 30, 1995
(as amended, supplemented or otherwise modified from time to time, the
"SDA"), among PANDA-BRANDYWINE, L.P., a Delaware limited
partnership, of which PANDA BRANDYWINE CORPORATION, a Delaware
corporation, is the general partner, GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation and SHAWMUT BANK
CONNECTICUT, National Association, as owner trustee and as
security agent (in its capacity as security agent, the
"Security Agent"). Capitalized terms used herein without
definition shall have the meanings assigned to them in the SDA.
The undersigned hereby certifies that he is an Authorized
Officer of the Partnership and, as such, he is authorized to
execute this certificate on behalf of the Partnership and
further certifies that: The following Project Costs and other
costs and amounts will be due and payable to the following
Persons [on _________, 199____] [on the next Borrowing Date] [NOTE:
PAYMENTS IN EXCESS OF $100,000 TO ANY PAYEE WILL BE MADE
DIRECTLY TO SUCH PAYEE; ALL OTHER PAYMENTS WILL BE TO THE
PARTNERSHIP]: Amount Description Payee
IN WITNESS WHEREOF, the undersigned has executed this Certificate
this ___ day of___________.
PANDA-BRANDYWINE, L.P.
By: Panda Brandywine Corporation,
its general partner
By:_______________________
Title:
COUNTERSIGNED:
GENERAL ELECTRIC CAPITAL CORPORATION
By:_____________________________
Title:
EXHIBIT B TO THE SECURITY DEPOSIT AGREEMENT
[To be delivered to release funds from the Revenue Account to pay
Supplemental Rent pursuant to Section 4.4]
__________, __ 199__
Shawmut Bank Connecticut,
National Association,
as Security Agent
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporate Trust Administration Panda-Brandywine, Security
Deposit Agreement - Supplemental Rent
Dear Sirs:
Reference is made to the Security Deposit Agreement relating to the
Brandywine cogenerating facility (the "Securit y Deposit Agreement"), dated
as of March 30, 1995, among Panda- Brandywine, L.P., a Delaware limited
partnership (the "Partnership"), General Electric Capital Corporation, a
New York corporation ("GE Capital") and Shawmut Bank Connecticut,
National Association (the "Security Agent").
Capitalized terms used herein without definition shall have the
respective meanings specified in the Security Deposit
Agreement. The undersigned hereby certifies that he is an
Authorized Officer of the Partnership and, as such, he is
authorized to execute this certificate on behalf of the
Partnership, and further represen ts and warrants as of the
date of this certificate as follows: Supplemental Rent is due
and owing pursuant to Section 3(b) of the Facility Lease and is
not otherwise specifically provided for in Section 4.3 of the
Security Deposit Agreement and is not otherwise payable from
amounts on deposit in the Specia l Payment Account or the
Insurance and Condemnation Proceeds Account. Please transfer
funds from the Revenue Account to pa y such Supplemental Rent.
Such proceeds should be paid by [official bank check] [wire
transfer] to [_________] in the amounts and at the addresses
indicated below: [Insert name and address for payment][Insert amount]
IN WITNESS WHEREOF, the undersigned has executed this Certificate
this ____ day of _______________, 19__.
PANDA BRANDYWINE, L.P.
By: PANDA BRANDYWINE CORPORATION,
its general partner
By: _________________________
Title:
COUNTERSIGNED:
GENERAL ELECTRIC CAPITAL CORPORATION
By: ____________________
Title:
EXHIBIT C TO SECURITY DEPOSIT AGREEMENT
[To be delivered to release funds from the Rent Reserve Account pursuant to
Section 4.5]
__________ __, 199_
Shawmut Bank Connecticut,
National Association,
as Security Agent
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Corporate Trust Administration Panda-Brandywine Security Deposit
Agreement - Rent Reserve Account
Dear Sirs:
Reference is made to the Security Deposit Agreement relating to the
Brandywine cogenerating facility (the "Securit y Deposit Agreement"),
dated as of March 30, 1995, among Panda- Brandywine, L.P., a
Delaware limited partnership (the "Partnership"), General
Electric Capital Corporation, a New Yo rk corporation ("GE
Capital") and Shawmut Bank Connecticut, National Association
(the "Security Agent"). Capitalized terms used herein without
definition shall have the respective meanings specified in the
Security Deposit Agreement. The undersigned hereby represents
that he is an Authorized Officer of GE Capital, and as such,
he is authorized to execute this certificate on behalf of GE
Capital, and further represents and warrants as of the date of
this certificate as follows: The Partnership is deficient in
satisfying its payment obligations under the Facility Lease or
the Loan Agreement (in respect of amounts payable pursuant to
clauses second or third of Section 4.3 of the Security Deposit
Agreement) in an amount equal to $_______. Please liquidate
investments in the Rent Reserve Account as fully as is
necessary to yield proceeds in the amou nt of such deficiency.
Proceeds with respect thereto should be p aid by [official bank
check] or [wire transfer] to [GE Capital] [t he Owner Trustee]
as indicated below: [Insert name and address for
payment] [Insert amount]
IN WITNESS WHEREOF, the undersigned has executed this Certificate
this ____ day of______________, 19__.
GENERAL ELECTRIC CAPITAL CORPORATION
By:
Title:
EXHIBIT D
[To be delivered to release funds from the Maintenance Reserve Account
pursuant to Section 4.6]
_________, 199_
Shawmut Bank Connecticut,
National Association,
as Security Agent
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Corporate Trust Administration Panda-Brandywine Security
Deposit Agreement - Operation and Maintenance Reserve Account
Dear Sirs:
Reference is made to the Security Deposit Agreement
relating to the Brandywine cogenerating facility (the "Security
Deposit Agreement"), dated as of March 30, 1995, among Panda-
Brandywine, L.P., a Delaware limited partnership (the
"Partnership"), General Electric Capital Corporation, a New York
corporation ("GE Capital") and Shawmut Bank Connecticut,
National Association (the "Security Agent"). Capitalized
terms used herein without definition shall have the respective
meanings specified in the Security Deposit Agreement. Please
liquidate investments in the Operation and Maintenance Reserve
Account in an amount sufficient to yield proceeds of
$_________________ to be used for [Reimbursement Obligations in
respect of drawings under the O&M Letter of Credit] [ ]. [list
requested disbursements separately.] Such amount[s] should be
paid by [official bank check] [wire transf er] to [GE Capital]
[the Partnership] [payee[s]] at [address[es]] of [GE Capital]
[the Partnership] [payee[s]]. The undersigned hereby certifies
that he is an Authorized Officer of [GE Capital] [the
Partnership] and, as such, he is authorized to execute this
certificate on behalf of [GE Capital] [the Partnership,] and
[the following to apply on ly to a certificate delivered by the
Partnership] further represents and warrants as of the date of
this certificate as follows:
(a) no Lease Default or Lease Event of Default
has occurred and is continuing; and
(b) the moneys to be delivered pursuant hereto represent
[amounts that the Partnership has paid from its own funds] [amounts that are
currently due and owing to the payees identified above] with
respect to Project Expenses constituting maintenance expenses
incurred with respect to the Project or any portion thereof
for which funds are not available for payment from revenues of
the Project.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
this ____ day of ________________, 19__.
[PANDA-BRANDYWINE, L.P.]
By: PANDA BRANDYWINE CORPORATION,
its general partner
By:___________________________
Title: President
[GENERAL ELECTRIC CAPITAL CORPORATION]
By:___________________________
Title:
COUNTERSIGNED:
[GENERAL ELECTRIC CAPITAL CORPORATION]
By:__________________________
Title:
EXHIBIT E TO THE SECURITY DEPOSIT AGREEMENT
[To be delivered to release funds from the Operation and Maintenance
Reserve Account or the Rent Reserve Account pursuant to Section
4.7]
________ __, 1995
Shawmut Bank Connecticut,
National Association,
as Security Agent
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Corporate Trust Administration Panda-Brandywine Security Deposit
Agreement
Dear Sirs:
Reference is made to the Security Deposit Agreement relating to the
Brandywine cogenerating facility (the "Securit y Deposit
Agreement"), dated as of March 30, 1995, among Panda-
Brandywine, L.P., a Delaware limited partnership (the
"Partnership"), General Electric Capital Corporation, a New York
corporation ("GE Capital") and Shawmut Bank Connecticut,
National Association (the "Security Agent"). Capitalized terms
used herein without definition shall have the respective
meanings specified in the Security Deposit Agreement. The
undersigned hereby certifies that he is an Authorized Officer
of the Partnership and, as such, he is authorized to execute
this certificate on behalf of the Partnership, and further
represen ts and warrants as of the date of this certificate as
follows: (a) no Lease Default or Lease Event of Default has
occurred and is continuing; and (b) the amount on deposit in
the [Operation and Maintenance Reserve] [Rent Reserve] Account
is $___________ and the amount of the Required [Operation and
Maintenance] [Rent Reserve] Balance is $___________, resulting
in excess funds in the amount of $___________ which excess
funds are as a result of income or gain earned on amounts on
deposit therein (the "Excess Amount"). In accordance with the
provisions of Section 4.7 of the Security Deposit Agreement,
the Excess Amount should be transferred to the Revenue Account.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this ____ day of ________________, 19__.
PANDA-BRANDYWINE, L.P.
By: PANDA BRANDYWINE CORPORATION,
its general partner
By:____________________________
Name:
Title:
APPROVED:
GENERAL ELECTRIC CAPITAL CORPORATION
By:__________________________
Title:
EXHIBIT F TO THE SECURITY DEPOSIT AGREEMENT
__________, __ 199__
[To be delivered to release funds from the Partnership Security Account
pursuant to Section 4.9(b) of the Security Deposit Agreement] [Within
three Business Days after each Basic Rent Payment Date]
Shawmut Bank Connecticut,
National Association,
as Security Agent
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Corporate Trust Administration Panda-Brandywine Security Deposit
Agreement
Dear Sirs:
Reference is made to the Security Deposit Agreement relating to the
Brandywine cogenerating facility (the "Security Deposit Agreement"),
dated as of March 30, 1995, among Panda-Brandywine, L.P., a Delaware
limited partnership (the "Partnership"), General Electric Capital
Corporation, a New York corporation ("GE Capital") and Shawmut Bank
Connecticut, National Association (the "Security Agent"). Capitalized terms
used herein without definition shall have the respective
meanings specified in the Security Deposit Agreement. The
undersigned hereby certifies that he is an Authorized Officer
of the Partnership and, as such, he is authorized to execute
this certificate on behalf of the Partnership, and further
represents and warrants as of the date of this certificate as
follows: (a) all amounts currently required to be deposited in
the Rent Reserve Account, the Warranty Maintenance Reserve
Account and the Operation and Maintenance Reserve Account have
been deposited therein; (b) all Basic Rent and Supplemental
Rent and all debt service on the Equity Loans due and owing
have been paid; (c) no Lease Default, Lease Event of Default,
Default or Event of Default has occurred and is continuing; (d)
the Operating Cash Flow Ratio for the immediately preceding
Quarterly Measurement Period is greater than 1.20 to 1.00; and
(e) the amount that may be withdrawn from the Partnership
Security Account pursuant to Section 4.9(b) of the Security
Deposit Agreement is $ . Such amount should be paid by
[official bank check] [wire transfer] to the Partnership at the
address indicated be low [insert address].
IN WITNESS WHEREOF, the undersigned has executed this Certificate
this ____ day of ________________, 19__.
PANDA-BRANDYWINE, L.P.
By: PANDA BRANDYWINE CORPORATION,
its general partner
By:____________________________
Name:
Title:
APPROVED:
GENERAL ELECTRIC CAPITAL CORPORATION
By:__________________________
Title:
EXHIBIT G TO THE SECURITY DEPOSIT AGREEMENT
[To be delivered to release funds from the Account pursuant to Section
4.12(a)]
___________ __, 199_
Shawmut Bank Connecticut,
National Association,
as Security Agent
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Corporate Trust Administration Panda-Brandywine Security Deposit
Agreement - Warranty Maintenance Reserve Account
Dear Sirs:
Reference is made to the Security Deposit Agreement relating to the
Brandywine cogenerating facility (the "Security Deposit
Agreement"), dated as of March 30, 1995, among Panda-
Brandywine, L.P., a Delaware limited partnership (the
"Partnership"), General Electric Capital Corporation, a New York
corporation ("GE Capital") and Shawmut Bank Connecticut,
National Association (the "Security Agent"). Capitalized terms
used herein without definition shall have the respective
meanings specified in the Security Deposit Agreement. Please
liquidate investments in the Warranty Maintenance Reserve
Account in an amount sufficient to yield proceeds of
$_________________ to be used for ________________ . [list
requested disbursements separately.] Such amount[s] should be
paid by [official bank check] [wire transfer] to the Turbine
Manufacturer at [address] of the Turbine Manufacturer. The
undersigned hereby certifies that he is an Authorized Officer
of the Partnership and, as such, he is authorized to execute
this certificate on behalf of the Partnership, and further
represents and warrants as of the date of this certificate as
follows: (a) no Lease Default or Lease Event of Default has
occurred and is continuing; and (b) the moneys to be delivered
pursuant hereto represent [amounts that the Partnership has
paid from its own funds] [amounts that are currently due and
owing to the Turbine Manufacturer with respect to Project
Expenses constituting maintenance expenses incurred with
respect to the Project or any portion thereof for which funds
are not available for payment from revenues of the Project.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this ____ day of ________________, 19__.
PANDA-BRANDYWINE, L.P.
By: PANDA BRANDYWINE CORPORATION,
its general partner
By:___________________________
Title: President
GENERAL ELECTRIC CAPITAL CORPORATION
By:__________________________
Title:
