EXHIBIT 4.19
EXECUTION VERSION
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CALPINE GENERATING COMPANY, LLC
AND
CALGEN FINANCE CORP.
and each of the Guarantors named herein
FIRST PRIORITY SECURED FLOATING RATE NOTES DUE 2009
FIRST PRIORITY INDENTURE
Dated as of March 23, 2004
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WILMINGTON TRUST FSB
Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)................................................ 7.10
(a)(2)............................................... 7.10
(a)(3)............................................... N.A.
(a)(4)............................................... N.A.
(a)(5)............................................... 7.10
(b).................................................. 7.10
(c).................................................. N.A.
311(a)................................................... 7.11
(b).................................................. 7.11
(c).................................................. N.A.
312(a)................................................... 2.05
(b).................................................. 12.03
(c).................................................. 12.03
313(a)................................................... 7.06
(b)(1)............................................... 10.03
(b)(2)............................................... 7.06; 7.07
(c).................................................. 7.06; 10.03; 12.02
(d).................................................. 7.06
314(a)................................................... 4.03; 12.02; 12.05
(b).................................................. 10.02
(c)(1)............................................... 12.04
(c)(2)............................................... 12.04
(c)(3)............................................... N.A.
(d).................................................. 10.03, 10.04, 10.05
(e).................................................. 12.05
(f).................................................. N.A.
315(a)................................................... 7.01
(b).................................................. 7.05, 12.02
(c).................................................. 7.01
(d).................................................. 7.01
(e).................................................. 6.11
316(a) (last sentence)................................... 2.09
(a)(1)(A)............................................ 6.05
(a)(1)(B)............................................ 6.04
(a)(2)............................................... N.A.
(b).................................................. 6.07
(c).................................................. 2.12
317(a)(1)................................................ 6.08
(a)(2)............................................... 6.09
(b).................................................. 2.04
318(a)................................................... 12.01
(b).................................................. N.A.
(c).................................................. 12.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
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ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions............................................................................ 1
Section 1.02 Other Definitions...................................................................... 42
Section 1.03 Incorporation by Reference of Trust Indenture Act...................................... 42
Section 1.04 Rules of Construction.................................................................. 43
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating........................................................................ 43
Section 2.02 Execution and Authentication........................................................... 44
Section 2.03 Registrar and Paying Agent............................................................. 45
Section 2.04 Paying Agent to Hold Money in Trust.................................................... 45
Section 2.05 Holder Lists........................................................................... 45
Section 2.06 Transfer and Exchange.................................................................. 46
Section 2.07 Replacement Notes...................................................................... 58
Section 2.08 Outstanding Notes...................................................................... 58
Section 2.09 Treasury Notes......................................................................... 59
Section 2.10 Temporary Notes........................................................................ 59
Section 2.11 Cancellation........................................................................... 59
Section 2.12 Defaulted Interest..................................................................... 59
Section 2.13 Same Day Settlement and Payment........................................................ 59
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee..................................................................... 60
Section 3.02 Selection of Notes to Be Redeemed or Purchased......................................... 60
Section 3.03 Notice of Redemption................................................................... 61
Section 3.04 Effect of Notice of Redemption......................................................... 61
Section 3.05 Deposit of Redemption or Purchase Price................................................ 62
Section 3.06 Notes Redeemed or Purchased in Part.................................................... 62
Section 3.07 Optional Redemption.................................................................... 62
Section 3.08 Mandatory Redemption................................................................... 62
Section 3.09 Offer to Purchase by Application of Net Proceeds....................................... 63
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes....................................................................... 64
Section 4.02 Maintenance of Office or Agency........................................................ 65
Section 4.03 Reports................................................................................ 65
Section 4.04 Compliance Certificate................................................................. 66
Section 4.05 Taxes.................................................................................. 67
Section 4.06 Stay, Extension and Usury Laws......................................................... 67
Section 4.07 Restricted Payments.................................................................... 67
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries......................... 68
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Equity............................ 69
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Section 4.10 Asset Sales............................................................................ 72
Section 4.11 Transactions with Affiliates........................................................... 74
Section 4.12 Liens.................................................................................. 76
Section 4.13 Business Activities.................................................................... 76
Section 4.14 Corporate Existence.................................................................... 76
Section 4.15 Offer to Repurchase Upon Change of Control............................................. 77
Section 4.16 Limitation on Issuances and Sales of Equity Interests in Subsidiaries.................. 78
Section 4.17 Payments for Consent................................................................... 78
Section 4.18 Restrictions on Activities of CalGen Finance........................................... 79
Section 4.19 Deposit of Revenues.................................................................... 79
Section 4.20 Additional Subsidiaries................................................................ 79
Section 4.21 Maintenance of Insurance............................................................... 79
Section 4.22 Financial Covenants.................................................................... 79
Section 4.23 Changes in Covenants when Third Priority Notes Rated Investment Grade.................. 80
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets............................................... 80
Section 5.02 Successor Corporation Substituted...................................................... 81
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default...................................................................... 81
Section 6.02 Acceleration........................................................................... 83
Section 6.03 Other Remedies......................................................................... 83
Section 6.04 Waiver of Past Defaults................................................................ 84
Section 6.05 Control by Majority.................................................................... 84
Section 6.06 Limitation on Suits.................................................................... 84
Section 6.07 Rights of Holders of Notes to Receive Payment.......................................... 85
Section 6.08 Collection Suit by Trustee............................................................. 85
Section 6.09 Trustee May File Proofs of Claim....................................................... 85
Section 6.10 Priorities............................................................................. 85
Section 6.11 Undertaking for Costs.................................................................. 86
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee...................................................................... 86
Section 7.02 Rights of Trustee...................................................................... 87
Section 7.03 Individual Rights of Trustee........................................................... 88
Section 7.04 Trustee's Disclaimer................................................................... 88
Section 7.05 Notice of Defaults..................................................................... 88
Section 7.06 Reports by Trustee to Holders of the Notes............................................. 88
Section 7.07 Compensation and Indemnity............................................................. 88
Section 7.08 Replacement of Trustee................................................................. 89
Section 7.09 Successor Trustee by Merger, etc....................................................... 90
Section 7.10 Eligibility; Disqualification.......................................................... 90
Section 7.11 Preferential Collection of Claims Against Company...................................... 90
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance............................... 91
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Section 8.02 Legal Defeasance and Discharge......................................................... 91
Section 8.03 Covenant Defeasance.................................................................... 91
Section 8.04 Conditions to Legal or Covenant Defeasance............................................. 92
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions............................................................................. 93
Section 8.06 Repayment to Company................................................................... 93
Section 8.07 Reinstatement.......................................................................... 94
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.................................................... 94
Section 9.02 With Consent of Holders of Notes....................................................... 95
Section 9.03 Compliance with Trust Indenture Act.................................................... 96
Section 9.04 Revocation and Effect of Consents...................................................... 96
Section 9.05 Notation on or Exchange of Notes....................................................... 96
Section 9.06 Trustee to Sign Amendments, etc........................................................ 97
ARTICLE 10.
COLLATERAL AND SECURITY
Section 10.01 Equal and Ratable Sharing of Collateral by Holders of Secured Debt Within a Class...... 97
Section 10.02 Class Voting........................................................................... 98
Section 10.03 [Reserved]............................................................................. 98
Section 10.04 Relative Rights........................................................................ 98
Section 10.05 Release of Security Interest in Respect of Notes....................................... 98
ARTICLE 11.
SUBSIDIARY GUARANTEES
Section 11.01 Guarantee.............................................................................. 99
Section 11.02 Limitation on Guarantor Liability......................................................100
Section 11.03 Execution and Delivery of Subsidiary Guarantee.........................................100
Section 11.04 Guarantors May Consolidate, etc., on Certain Terms.....................................101
Section 11.05 Releases Following Sale of Assets......................................................101
ARTICLE 12.
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge.............................................................102
Section 12.02 Application of Trust Money.............................................................102
ARTICLE 13.
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls...........................................................103
Section 13.02 Notices................................................................................103
Section 13.03 Communication by Holders of Notes with Other Holders of Notes..........................104
Section 13.04 Certificate and Opinion as to Conditions Precedent.....................................104
Section 13.05 Statements Required in Certificate or Opinion..........................................105
Section 13.06 Rules by Trustee and Agents............................................................105
Section 13.07 Non-Recourse; No Personal Liability of Directors, Officers, Employees and
Stockholders...........................................................................105
Section 13.08 Governing Law..........................................................................105
Section 13.09 No Adverse Interpretation of Other Agreements..........................................106
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Section 13.10 Successors.............................................................................106
Section 13.11 Severability...........................................................................106
Section 13.12 Counterpart Originals..................................................................106
Section 13.13 Table of Contents, Headings, etc.......................................................106
EXHIBITS AND SCHEDULES
Schedule A PERMITTED PRIOR LIENS EXISTING ON THE CLOSING DATE
Exhibit A FORM OF NOTE
Exhibit B FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit C FORM OF CERTIFICATE OF TRANSFER
Exhibit D FORM OF CERTIFICATE OF EXCHANGE
Exhibit E FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit F FORM OF NOTATION OF SUBSIDIARY GUARANTEE
Exhibit G FORM OF SUPPLEMENTAL INDENTURE
Exhibit H FORM OF SUBORDINATION TERMS
Exhibit I FORM OF WORKING CAPITAL FACILITY
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FIRST PRIORITY INDENTURE, dated as of March 23, 2004, among Calpine
Generating Company, LLC, a Delaware limited liability company (the "Company"),
CalGen Finance Corp., a Delaware corporation ("CalGen Finance"), the Guarantors
(as defined below in Section 1.01) and Wilmington Trust FSB, as Trustee.
As set forth in Section 13.07 below and notwithstanding anything to the
contrary set forth in this Indenture, the Notes, any Security Document or any
other Note Document, the Notes and the Subsidiary Guarantees are non-recourse
secured obligations of the Company and Guarantors, respectively. The Company,
CalGen Finance, the Guarantors and the Trustee agree as follows for the benefit
of each other and for the equal and ratable benefit of the Holders (as defined
below in Section 1.01) of the First Priority Secured Floating Rate Notes due
2009 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a Global Note substantially in the form of
Exhibit A, bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into or became a Subsidiary of such
specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging with
or into, or becoming a Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Administrative Services Agreement" means the Master Administrative
Services Agreement, dated as of the Closing Date, among Calpine Administrative
Services Company, Inc., the Company and the Facility Owners party thereto.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided, that beneficial ownership of 10% or more of
the Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"Affiliate Subordinated Indebtedness" means Indebtedness incurred by
the Company pursuant to any arrangement with an Affiliate of the Company;
provided, that such Indebtedness (1) is contractually subordinated in right of
payment and in all other respects to the Notes and all other Secured Obligations
in accordance with the Subordination Terms, including an agreement by the
holders of such Indebtedness not to exercise any remedies until the Secured
Obligations Termination Date, (2) does not provide for mandatory redemption or
other redemption thereof until at least six months after final Stated Maturity
of
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the Notes, (3) provides for payment of interest thereon in the form of cash
or additional Affiliate Subordinated Indebtedness having a principal amount
equal to the amount of interest due (i.e., "pay-in-kind"), and (4) is otherwise
subordinated in accordance with the Subordination Terms.
"Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"Applicable First Priority LIBOR Rate" means, for each interest period,
375 basis points over the rate determined by the Company (notice of such rate to
be sent to the Trustee by the Company on the date of determination thereof)
equal to the greater of (x) 1.250% or (y) the applicable British Bankers'
Association LIBOR rate for deposits in U.S. dollars for a period of one, two,
three or six months (as the Company may elect in an Officer's Certificate
delivered to the Trustee as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two Business Days prior to
the first day of such interest period; provided, that, if no such British
Bankers' Association LIBOR rate is available to the Company, the Applicable
First Priority LIBOR Rate for the relevant interest period shall instead be the
rate at which Xxxxxx Xxxxxxx Senior Funding, Inc. or one of its affiliate banks
offers to place deposits in U.S. dollars with first-class banks in the London
interbank market for a period of one, two, three or six months (as applicable)
as of approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such interest period, in amounts equal to $1.0 million.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any
assets or rights by the Company or any of its Subsidiaries; provided,
that the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Company and its Subsidiaries
taken as a whole will be governed by the provisions of Section 5.01 and
not by the provisions of Section 4.10; and
(2) the issuance of Equity Interests in any of the Company's
Subsidiaries or the sale of Equity Interests in any of its
Subsidiaries.
Notwithstanding the preceding, none of the following items will be
deemed to be an Asset Sale:
(1) any single transaction or series of related transactions
that involves assets having a Fair Market Value of less than $25.0
million (other than any transaction which involves the sale of an
undivided interest, participation or Equity Interest in any Facility or
Subsidiary of the Company, each of which will constitute an Asset
Sale);
(2) a transfer of assets between or among the Company and the
Guarantors;
(3) an issuance of Equity Interests by a Subsidiary of the
Company to the Company or to a Guarantor;
(4) the sale or lease of products, services or accounts
receivable in the ordinary course of business and any sale or other
disposition of damaged, worn-out or obsolete assets in the ordinary
course of business;
(5) the sale or other disposition of cash or Cash Equivalents;
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(6) a Restricted Payment that does not violate the covenant
contained in Section 4.07 or a Permitted Investment;
(7) an issuance of Equity Interests in the Company in
accordance with the terms of this Indenture; and
(8) the sale of the Columbia Facility pursuant to the Columbia
FILOT Arrangement.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Baytown Facility" means the facility described under "Business--Power
Generation--ERCOT--Facility Descriptions--Baytown Facility" in the Offering
Memorandum.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13 (d) (3)
of the Exchange Act) , such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms "Beneficially Owns" and
"Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of
the corporation or any committee thereof duly authorized to act on
behalf of such board;
(2) with respect to a partnership, the Board of Directors of
the general partner of the partnership or any committee duly authorized
and empowered to take action on behalf of such partnership by the
partnership agreement of such partnership;
(3) with respect to a limited liability company, the managing
member or members or any controlling committee of managing members
thereof; and
(4) with respect to any other Person, the board or committee
of such Person serving a similar function.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"CalGen Expansion Company" means CalGen Expansion Company, LLC.
"CalGen Holdings" means Calpine CalGen Holdings, Inc.
"Calpine" means Calpine Corporation.
"Calpine Performance Guaranty" means the Affiliated Party Agreement
Guaranty, dated as of the Closing Date, made by Calpine in favor of the Company
and the Facility Owners party thereto.
"Calpine Project Undertaking" means the Project Undertaking and
Agreement, dated as of the Closing Date, among Calpine, the Company and the
Facility Owners party thereto.
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"Capital Lease Obligation" means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP, and the Stated Maturity thereof shall be the date of the last payment of
rent or any other amount due under such lease prior to the first date upon which
such lease may be prepaid by the lessee without payment of a penalty.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership interests (whether general or limited) or membership
interests; and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person, but excluding from all
of the foregoing any debt securities convertible into Capital Stock,
whether or not such debt securities include any right of participation
with Capital Stock.
"Xxxxxxxx Facility" means the facility described under "Business--Power
Generation--The Southeast--Facility Descriptions--Xxxxxxxx Facility" in the
Offering Memorandum.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or
insured by the United States government (or any agency or
instrumentality thereof), the Canadian government (or any agency or
instrumentality thereof) or the government of a member state of the
European Union (or any agency or instrumentality thereof), in each case
the payment of which is backed by the full faith and credit of the
United States, Canada or the relevant member state of the European
Union, as the case may be, and having maturities of not more than six
months from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any lender party to the Credit Facilities
or any domestic commercial bank having capital and surplus in excess of
$500.0 million and a Thomson Bank Watch (or successor rating agency)
Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (2)
and (3) above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) overnight deposits with entities whose unsecured
commercial paper or other unsecured short-term debt obligations, have,
at the time of such deposit, credit ratings of at least P-1 (or its
equivalent) or higher from Xxxxx'x and A-1 (or its equivalent) or
higher from S&P; and
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(6) investments in money market funds or money market mutual
funds which have, at the time of such investments, credit ratings of at
least P-1 (or its equivalent) or higher from Xxxxx'x and A-1 (or its
equivalent) or higher from S&P.
"Casualty Event" means any damage to or destruction of a Facility in
excess of $20.0 million.
"Change of Control" means the occurrence of any of the following:
(1) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(2) the consummation of any transaction (including any merger
or consolidation) the result of which is that any "person" (as that
term is used in Section 13(d) of the Exchange Act) becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the
Voting Stock of Calpine, measured by voting power rather than number of
shares;
(3) the first day on which Calpine fails to own, directly or
indirectly, 100% of the issued and outstanding Equity Interests (other
than Perpetual Preferred Stock) of the Company (other than as a result
of the issuance of Perpetual Preferred Stock by an indirect or direct
parent of the Company); or
(4) the first day on which the Company fails to own, directly
or indirectly, 100% of the issued and outstanding Equity Interests of
CalGen Finance.
"Channel Facility" means the facility described under "Business--Power
Generation--ERCOT--Facility Descriptions--Channel Facility" in the Offering
Memorandum.
"Class" means (1) in the case of First Priority Lien Debt, every Series
of First Priority Lien Debt, taken together, (2) in the case of Second Priority
Lien Debt, every Series of Second Priority Lien Debt, taken together, and (3) in
the case of Third Priority Lien Debt, every Series of Third Priority Lien Debt,
taken together.
"Clearstream" means Clearstream Banking, S.A.
"Closing Date" means March 23, 2004.
"Closing Date Facilities" means the Baytown Facility, the Xxxxxxxx
Facility, the Channel Facility, the Columbia Facility, the Corpus Facility, the
Decatur Facility, the Delta Facility, the Freestone Facility, the Goldendale
Facility, the Los Medanos Facility, the Xxxxxx Facility, the Xxxxx Facility, the
Pastoria Facility and the Zion Facility.
"Collateral" means all collateral in which a Lien is granted to the
Collateral Agent in the Security Documents.
"Collateral Agent" means Wilmington Trust Company, in its capacity as
collateral agent for the Secured Parties under the Security Documents, together
with its successors in such capacity.
"Collateral Trust Agreement" means the Collateral Trust Agreement,
dated as of the Closing Date, among CalGen Holdings, the Company, the
Guarantors, each Secured Debt Representative party thereto and the Collateral
Agent.
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"Columbia Facility" means the facility described under "Business--Power
Generation--The Southeast--Facility Descriptions--Columbia Facility" in the
Offering Memorandum.
"Columbia FILOT Arrangement" means a fee-in-lieu-of-taxes arrangement
pursuant to which the Columbia Facility will be sold to Xxxxxxx County, South
Carolina, or a Person acting on its behalf, and leased to Columbia Energy LLC
for a nominal annual amount in lieu of certain ad valorem taxes that would
otherwise be owed to Xxxxxxx County in connection with the Columbia Facility,
together with the payment of a fee to Xxxxxxx County in lieu of such ad valorem
taxes; provided, that (1) Columbia Energy LLC has the right under such
arrangement to repurchase the Columbia Facility for nominal consideration upon
completion or termination of the lease agreement, (2) the leasehold interest
held by Columbia Energy LLC is part of the Collateral, (3) the arrangement is
not reasonably expected to have a material adverse effect on the operation or
financial condition of the Columbia Facility and (3) the arrangement does not
impair the Columbia Facility's status as a QF.
"Condemnation Event" means any Facility (or any portion thereof in
excess of $20.0 million) is condemned, confiscated, requisitioned, captured,
seized or subjected to forfeiture, or title thereto is taken, by any
Governmental Authority (or any Person acting under color of Governmental
Authority).
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus,
without duplication:
(1) an amount equal to any extraordinary loss plus any net
loss realized by such Person or any of its Subsidiaries in connection
with an Asset Sale, to the extent such losses were deducted in
computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such
Person and its Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net
Income; plus
(3) the Fixed Charges of such Person and its Subsidiaries for
such period, to the extent that such Fixed Charges were deducted in
computing such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of
intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period) and other non-cash expenses (excluding any
such non-cash expense to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period) of such Person
and its Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income; minus
(5) non-cash items increasing such Consolidated Net Income for
such period, other than the accrual of revenue in the ordinary course
of business;
in each case, on a consolidated basis and determined in accordance with
GAAP.
"Consolidated EBITDA" means, for any period, Consolidated Net Income
for such period, plus:
(1) without duplication and to the extent deducted in
determining such Consolidated Net Income, the sum of:
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(a) any and all interest expense for such period,
including, without limitation, Consolidated Interest Expense
and any interest expense attributable to Affiliate
Subordinated Indebtedness,
(b) consolidated income tax expense for such period,
(c) all amounts attributable to depreciation and
amortization for such period,
(d) any extraordinary or non-recurring non-cash
charges (other than the write-down of current assets) for such
period (including any such non-cash charges for such period
relating to the application of fresh start accounting
principals),
(e) any non-cash goodwill or other intangible asset
impairment charges incurred after the Closing Date resulting
from the application of Statement Number 142 of the Financial
Accounting Standards Board,
(f) any non-recurring expenses incurred in connection
with the transactions contemplated by the Secured Debt
Documents, and
(g) any non-cash compensation charges, including any
such charges arising from stock options, restricted stock
grants and other equity incentive programs,
provided, that to the extent all or any portion of the income of any
Subsidiary of the Company or other Person is excluded from Consolidated
Net Income pursuant to the definition thereof for all or any portion of
such period, any amounts set forth in the preceding clauses (a) through
(g) that are attributable to such Subsidiary or other Person will be
not be included for purposes of this clause (1) for such period or
portion thereof; plus
(2) without duplication, the cash amount of:
(a) prepayments received by the Company or any of its
Subsidiaries under any Major Project Document during such
period, and
(b) any distributions received by the Company or any
of its Subsidiaries pursuant to the Index Hedge during such
period; minus
(3) without duplication:
(a) all cash payments made during such period on
account of reserves, restructuring charges and other non-cash
charges added to Consolidated Net Income pursuant to clause
(1) above in a previous period, and
(b) to the extent included in determining such
Consolidated Net Income, any extraordinary gains and all
non-cash items of income for such period, all determined on a
consolidated basis in accordance with GAAP;
provided, that, if the Company has any Subsidiary that is not a Wholly Owned
Subsidiary, Consolidated EBITDA will be reduced (to the extent not otherwise
reduced by GAAP) by an amount equal to (A) the sum of (i) the consolidated net
income (loss) of such Subsidiary (to the extent included in Consolidated Net
Income) and (ii) the amounts set forth in clause (1)(a)-(g) above attributable
to such Subsidiary, multiplied by (B) the percentage of Equity Interests in such
Subsidiary not directly or indirectly owned by
7
the Company on the last day of such period. Notwithstanding anything to the
contrary herein, for each of the first four fiscal quarters ended after the
Closing Date, Consolidated EBITDA will be calculated on a Pro Forma basis as if
all transactions entered into by the Company on the Closing Date were entered
into on the first day of the period for which Consolidated EBITDA is being
measured.
"Consolidated Interest Expense" means, for any period:
(1) the sum of, without duplication:
(a) the interest expense (including imputed interest
expense in respect of Capital Lease Obligations and Synthetic
Lease Obligations, but excluding any interest expense
attributable to Affiliate Subordinated Indebtedness) of the
Company and its Subsidiaries for such period (including all
commissions, discounts and other fees and charges owed by the
Company and its Subsidiaries with respect to letters of credit
and bankers' acceptance financing), net of interest income, in
each case determined on a consolidated basis in accordance
with GAAP, plus
(b) any interest accrued (other than interest accrued
with respect to Affiliate Subordinated Indebtedness) during
such period in respect of Indebtedness of the Company or any
of its Subsidiaries that is required to be capitalized rather
than included in consolidated interest expense for such period
in accordance with GAAP; minus
(2) to the extent included in such consolidated interest
expense for such period, amounts attributable to the amortization of
financing costs and non-cash amounts attributable to the amortization
of debt discounts.
For purposes of this definition, interest expense will be determined after
giving effect to any net payments made or received by the Company or any of it
is Subsidiaries with respect to interest rate Hedging Obligations.
Notwithstanding anything to the contrary herein, for each of the first four
fiscal quarters ended after the Closing Date, Consolidated Interest Expense will
be calculated on a Pro Forma basis as if all transactions entered into by the
Company on the Closing Date were entered into on the first day of the period for
which Consolidated Interest Expense is being measured.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided, that:
(1) the Net Income of any Subsidiary will be excluded to the
extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that Net Income is not at the date
of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation
of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to
that Subsidiary or its stockholders; and
(2) the cumulative effect of a change in accounting principles
will be excluded.
"Control Agreement" means the Collateral Account Control Agreement,
dated as of the Closing Date, between the Company and the Collateral Agent.
"Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 13.02 or such other address as to which the Trustee
may give notice to the Company.
8
"Corpus Christi Facility" means the facility described under
"Business--Power Generation--ERCOT--Facility Descriptions--Corpus Christi
Facility" in the Offering Memorandum.
"Credit Facilities" means one or more debt facilities or commercial
paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced (including by means of sales of debt securities to
institutional investors) in whole or in part from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Decatur Facility" means the facility described under "Business--Power
Generation--The Southeast--Facility Descriptions--Decatur Facility" in the
Offering Memorandum.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06, substantially in
the form of Exhibit A, except that such Note shall not bear the Global Note
Legend and shall not have the "Schedule of Exchanges of Interests in the Global
Note" attached thereto.
"Delta Facility" means the facility described under "Business--Power
Generation--The West--Facility Descriptions--Delta Facility" in the Offering
Memorandum.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Discharge of First Priority Lien Obligations" means the occurrence of
all of the following:
(1) termination of all commitments to extend credit that would
constitute First Priority Lien Debt;
(2) payment in full in cash of the principal of and interest
and premium (if any) on all First Priority Lien Debt (other than any
undrawn letters of credit) and/or defeasance of all First Priority Lien
Debt in accordance with the applicable First Priority Lien Documents;
(3) discharge or cash collateralization (at 102.5% of the
aggregate undrawn amount) of all outstanding letters of credit
constituting First Priority Lien Debt; and
(4) payment in full in cash of all other First Priority Lien
Obligations that are outstanding and unpaid at the time the First
Priority Lien Debt is paid in full in cash (other than any obligations
for taxes, costs, indemnifications, reimbursements, damages and other
liabilities in respect of which no claim or demand for payment has been
made at such time).
"Discharge of Second Priority Lien Obligations" means the occurrence of
all of the following:
9
(1) termination of all commitments to extend credit that would
constitute Second Priority Lien Debt;
(2) payment in full in cash of the principal of and interest
and premium (if any) on all Second Priority Lien Debt (other than any
undrawn letters of credit) and/or defeasance of all Second Priority
Lien Debt in accordance with the applicable Second Priority Lien
Documents;
(3) discharge or cash collateralization (at 102.5% of the
aggregate undrawn amount) of all outstanding letters of credit
constituting Second Priority Lien Debt; and
(4) payment in full in cash of all other Second Priority Lien
Obligations that are outstanding and unpaid at the time the Second
Priority Lien Debt is paid in full in cash (other than any obligations
for taxes, costs, indemnifications, reimbursements, damages and other
liabilities in respect of which no claim or demand for payment has been
made at such time).
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with the covenant contained in Section 4.07. The amount of
Disqualified Stock deemed to be outstanding at any time for purposes of this
Indenture will be the maximum amount that the Company and its Subsidiaries may
become obligated to pay upon the maturity of, or pursuant to any mandatory
redemption provisions of, such Disqualified Stock, exclusive of accrued
dividends.
"Equally and Ratably" means, in reference to sharing of Liens or
proceeds thereof as among Secured Parties of the same Class that such Liens or
proceeds:
(1) will be allocated and distributed first to the Secured
Debt Representative for each outstanding Series of Secured Debt within
such Class, for account of the holders of such Series of Secured Debt,
ratably in proportion to the principal of, and interest and premium (if
any) and reimbursement obligations (contingent or otherwise) with
respect to letters of credit, if any, outstanding (whether or not
drawings have been made under such letters of credit) on, each
outstanding Series of Secured Debt within such Class when the
allocation or distribution is made, and thereafter
(2) will be allocated and distributed (if any remain after
payment in full of all of the principal of, and interest and premium
(if any) and reimbursement obligations (contingent or otherwise) with
respect to letters of credit, if any, outstanding (whether or not
drawings have been made under such letters of credit) on, all
outstanding Secured Obligations within such Class) to the Secured Debt
Representative for each outstanding Series of Secured Obligations
within such Class, for account of the holders of any remaining Secured
Obligations within such Class, ratably in proportion to the aggregate
unpaid amount of such remaining Secured Obligations within such Class
due and demanded (with written notice to the applicable Secured Debt
Representative and the Collateral Agent) prior to the date such
distribution is made.
10
"Equity Contributions" means contributions of cash and Cash Equivalents
to the common equity capital of the Company by Persons other than the Company
and its Subsidiaries.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Estimated Peak Capacity" means, with respect to a Facility, the
nominal, as-tested new and clean capacity of such Facility, as corrected to
average ambient conditions, plus all incremental peaking capability of such
Facility derived from duct firing, power augmentation, steam injection or other
means.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system.
"Excess Cash Flow" means, for any period:
(1) the sum of:
(A) all revenues (excluding (i) non-cash revenues and
(ii) any payments received from contract monetizations,
contract buy-outs and similar transactions) received by the
Company and its Subsidiaries during such period,
(B) all Net Proceeds of Asset Sales, Casualty Events
and Condemnation Events, and all net proceeds from the sale,
lease, conveyance or other disposition of any assets or rights
not constituting "Asset Sales," in each case received by the
Company and its Subsidiaries during such period and remaining
after application of such proceeds to an offer to redeem Notes
in accordance with the covenant contained in Section 4.10, and
(C) all Excess Expansion Asset Financing Proceeds
received by the Company and its Subsidiaries during such
period; less
(2) the sum of:
(A) all costs, expenses, fees and other charges
(including liquidated damages or other damages or penalties)
incurred by the Company and its Subsidiaries during such
period in connection with the ownership, operation,
maintenance and use of the Facilities, including all payments
under Major Project Documents and other agreements relating to
the Facilities (other than Major Maintenance Expenses),
(B) all trustee fees, collateral agent fees and other
similar administrative fees and expenses paid by the Company
and its Subsidiaries during such period,
(C) the Fixed Charges of the Company and its
Subsidiaries during such period (other than Fixed Charges of
the kind referred to in clause (4) of the definition of Fixed
Charges and Fixed Charges relating to Subordinated
Indebtedness or any other Indebtedness of the Company or any
of its Subsidiaries that is contractually subordinated to the
Secured Obligations),
(D) all payments of principal of Indebtedness of the
Company and its Subsidiaries required to be made (whether or
not actually made) during such period, other than payments of
principal of Subordinated Indebtedness or any other
Indebtedness of the Company or any of its Subsidiaries that is
contractually subordinated to the Secured Obligations, and
11
(E) all amounts paid by the Company and its
Subsidiaries for capital expenditures to the Facilities during
such period, other than Excluded CapEx Amounts.
"Excess Expansion Asset Financing Proceeds" means the excess of (1) the
aggregate amount of net cash proceeds of Expansion Debt incurred to finance
costs associated with Expansion Assets in accordance with clause (3) of the
definition of Permitted Debt and Equity Contributions made in connection
therewith, over (2) the amount of such proceeds and Equity Contributions
required to finance costs associated with such Expansion Assets in compliance
with the conditions set forth in clause (3) of the definition of Permitted Debt.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant
to Section 2.06(f).
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Excluded Assets" means:
(1) the fixtures and equipment relating to any Facility if, to
the extent that and for so long as (A) the ownership or operation of
such Facility is regulated by any federal or state regulatory authority
and (B) under the law applicable to such regulatory authority the grant
of a security interest in such fixtures and equipment is prohibited or
a security interest in such fixtures and equipment may be granted only
after completion of a filing with, or receipt of consent from, such
regulatory authority which has not been effectively completed or
received; provided, that (i) such fixtures and equipment will be an
Excluded Asset only to the extent and for so long as the conditions set
forth in clauses (A) and (B) in this clause (1) are and remain
satisfied and to the extent such assets otherwise constitute
Collateral, will cease to be an Excluded Asset, and will become subject
to the security interests granted to the Collateral Agent under the
Security Documents, immediately and automatically at such time as such
conditions cease to exist, including by reason of the effective
completion of any required filing or effective receipt of any required
regulatory approval, and (ii) unless prohibited by law, the proceeds of
any sale, lease or other disposition of any such fixtures or equipment
that are Excluded Assets shall not be an Excluded Asset and shall at
all times be and remain subject to the security interests granted to
the Collateral Agent under the Security Documents except as such
proceeds are applied and used by the Company or its Subsidiaries in the
ordinary course of business and applied in accordance with the covenant
contained in Section 4.10.
(2) with respect to personal property, any contract,
agreement, lease, license, permit, franchise, power, authority or right
if, to the extent that and for so long as (A) the grant of a security
interest therein constitutes or would result in the abandonment,
invalidation or unenforceability of such contract, agreement, lease,
license, permit, franchise, power, authority or right or the
termination of or a default under the instrument or agreement by which
such contract, agreement, lease, license, permit, franchise, power,
authority or right is governed and (B) such abandonment, invalidation,
unenforceability, termination or default is not rendered ineffective
pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform
Commercial Code (or any successor provisions) of any relevant
jurisdiction or any other applicable law (including the United States
bankruptcy code); provided, that (i) such contract, agreement, lease,
license, permit, franchise, power, authority or right will be an
Excluded Asset only to the extent and for so long as
12
the conditions set forth in clauses (A) and (B) of this clause (2) are
and remain satisfied and to the extent that such assets otherwise
constitute Collateral, will cease to be an Excluded Asset, and will
become subject to the security interests granted to the Collateral
Agent under the Security Documents, immediately and automatically at
such time as such conditions cease to exist, including by reason of any
waiver or consent under the applicable instrument or agreement, and
(ii) the proceeds of any sale, lease or other disposition of any such
contract, agreement, lease, license, permit, franchise, power,
authority or right that is or becomes an Excluded Asset shall not be an
Excluded Asset and shall at all times be and remain subject to the
security interests granted to the Collateral Agent under the Security
Documents except as such proceeds are applied and used by the Company
or its Subsidiaries in the ordinary course of business and applied in
accordance with the covenant contained in Section 4.10.
(3) with respect to any real property, any lease, license,
permit, franchise, power, authority or right if, to the extent that and
for so long as the grant of a security interest therein constitutes or
would result in the abandonment, invalidation or unenforceability of
such lease, license, permit, franchise, power, authority or right or
the termination of or a default under the instrument or agreement by
which such lease, license, permit, franchise, power, authority or right
is governed; provided, that such lease, license, permit, franchise,
power, authority or right will be an Excluded Asset only to the extent
and for as long as the condition set forth above is and remains
satisfied and to the extent such assets otherwise constitute
Collateral, will cease to be an Excluded Asset, and will become subject
to the security interests granted to the Collateral Agent under the
Security Documents except as such proceeds are applied and used by the
Company or its Subsidiaries in the ordinary course of business and
applied in accordance with the covenant contained in Section 4.10.
(4) any Excluded Subsidiary Securities;
(5) any property or assets owned by the Excluded Subsidiary;
(6) any Expansion Assets; provided, that any Expansion Assets
will be Excluded Assets only if an for so long as the limitations
imposed by the debt instruments of Calpine and its Subsidiaries on the
ability to xxxxx x Xxxx on such Expansion Assets to secure the Secured
Obligations continue to be applicable, as determined in good faith by
the Company; and
(7) the Company's rights under or with respect to the Working
Capital Facility.
"Excluded CapEx Amounts" means amounts paid by the Company and its
Subsidiaries for capital expenditures to the Facilities using funds derived from
either of the following funding sources:
(1) Equity Contributions, other than Equity Contributions made
to comply with clause (3) of the definition of Permitted Debt; and
(2) proceeds of Expansion Debt incurred in accordance with
clause (3) of the definition of Permitted Debt.
"Excluded Subsidiary" means Goldendale Energy Center, LLC, only if and
for so long as the limitations imposed by the debt instruments of Calpine and
its Subsidiaries on Goldendale Energy Center, LLC's ability to be a Guarantor
and xxxxx x Xxxx on its property and assets to secure the Secured Obligations
continue to be applicable to Goldendale Energy Center, LLC, as determined in
good faith by the Company.
13
"Excluded Subsidiary Securities" means Capital Stock or other
securities of any Subsidiary of the Company, other than the Equity Interests in
CalGen Expansion Company.
"Existing Purchase Option" means an Asset Sale required in accordance
with any of the following, without giving effect to any amendments or other
modifications thereto after the Closing Date:
(1) the exercise by Xxxxxxx Chemical Company (or its
successors and permitted assigns) of any of its purchase options under
the Energy Services Agreement, dated as of August 15, 2000 and as
amended to the Closing Date, between Columbia Energy LLC and Xxxxxxx
Chemical Company;
(2) the exercise by Solutia, Inc. (or its successors and
permitted assigns) of its purchase option upon an event of default
under the Second Amended and Restated Lease, Steam Sales and Shared
Services Agreement, dated as of January 31, 2001 and as amended to the
Closing Date, between Decatur Energy Center, LLC and Solutia;
(3) the exercise by Bayer Corporation (or its successors and
permitted assigns) of its purchase option under the Energy Services
Agreement, dated as of January 12, 2000 and as amended to the Closing
Date, between Baytown Energy Center LP and Bayer Corporation;
(4) the exercise by Lyondell-CITGO Refining L.P. (or its
successors and permitted assigns) of any of its options to acquire
certain property under the Amended and Restated Ground Lease and
Easement Agreement, dated as of March 30, 2001 and as amended to the
Closing Date, between Channel Energy Center, LP and Lyondell-CITGO
Refining L.P.;
(5) the exercise by CITGO Refining and Chemicals Company L.P.
(or its successors and permitted assigns) of its right of first offer
under the Energy Services Agreement, dated as of March 23, 1999 and as
amended to the Closing Date, between Corpus Christi Cogeneration LP and
CITGO Refining and Chemicals Company L.P.; and
(6) the exercise by Flint Hills Resources, L.P. (or its
successors and permitted assigns) of its purchase option under the
Energy Services Agreement, dated as of July 24, 2003 and as amended to
the Closing Date, between Corpus Christi Cogeneration LP and Flint
Hills Resources, L.P.
"Expansion Assets" means the assets (including real property rights,
contractual rights, rights under permits, other general intangibles and other
ancillary rights) added to a Facility in connection with the addition of
capacity to, or other expansion of, such Facility; provided, that such Expansion
Assets are not necessary for the operation of such Facility or any other
Facility (other than the Expansion Assets themselves), are readily
distinguishable from such Facility and can be removed or separated from such
Facility, dismantled or operated independently of the operation of such Facility
without impairing such Facility or any other Facility in any material respect.
"Expansion Debt" means Indebtedness incurred for the purpose of
financing the development, construction or purchase of, or repairs, improvements
or additions to, Expansion Assets relating to one or more Facilities, including
any Indebtedness existing at the time such Expansion Assets are acquired,
whether or not such Indebtedness is incurred in connection with, or in
contemplation of, the acquisition of such Expansion Assets; provided, that such
Indebtedness was incurred to finance the development, construction or purchase
of, or repairs, improvements or additions to, such Expansion Assets.
14
"Facilities" means the Closing Date Facilities and any other electric
generating facilities acquired or constructed after the Closing Date described
in the definition of Permitted Business; provided, that any Facility disposed of
in accordance with the terms of the Secured Debt Documents will be deemed not to
be a Facility from and after the date of such disposition.
"Facility Owner" means, with respect to a Facility, the Subsidiary of
the Company that directly owns such Facility.
"Fair Market Value" means the value that would be paid by a willing
buyer to a willing seller in a transaction not involving distress or necessity
of either party, determined in good faith by (1) an officer of the Company and
evidenced by an Officer's Certificate delivered to the Trustee, if such value is
less than or equal to $10.0 million, or (2) the Board of Directors of the
Company and evidenced by a resolution delivered to the Trustee, if such value is
greater than $10.0 million.
"FERC" means the Federal Energy Regulatory Commission or any successor
agency.
"First Priority Debt Representative" means:
(1) in the case of the Notes, the Trustee;
(2) in the case of the Revolving Loans, the Revolving Loan
Administrative Agent;
(3) in the case of the First Priority Term Loans, the First
Priority Term Loan Administrative Agent; or
(4) in the case of any other Series of First Priority Lien
Debt, the trustee, agent or representative of the holders of such
Series of First Priority Lien Debt who maintains the transfer register
for such Series of First Priority Lien Debt and (a) is appointed as a
First Priority Debt Representative (for purposes related to the
administration of the Security Documents) pursuant to the indenture or
other agreement governing such Series of First Priority Lien Debt and
(b) has become a party to the Collateral Trust Agreement by executing a
joinder in the form required under the Collateral Trust Agreement.
"First Priority Lien" means a Lien granted pursuant to a Security
Document to the Collateral Agent upon any property of the Company or any
Guarantor to secure First Priority Lien Obligations.
"First Priority Lien Cap" means, as of any date:
(1) the principal amount of Notes issued on the Closing Date;
plus
(2) the principal amount of all Indebtedness outstanding under
the First Priority Term Loan Agreement on the Closing Date, plus any
Indebtedness outstanding under any other Credit Facility (including the
Revolving Loan Agreement), all in an aggregate principal amount not to
exceed the amount provided by clause (1)(a) of the definition of
Permitted Debt; less
(3) the amount of Second Priority Lien Debt or Third Priority
Lien Debt incurred after the Closing Date the net proceeds of which are
used to repay any First Priority Lien Debt; plus
(4) the amount of accrued interest, fees and expenses,
including premiums, paid in connection with the incurrence of any
Permitted Refinancing Indebtedness with respect to the Indebtedness
described in clauses (1) and (2); plus
15
(5) the notional amount of Hedging Obligations incurred to
hedge or manage interest rate risk with respect to First Priority Lien
Debt having an aggregate notional amount not to exceed, together with
the aggregate notional amount of any outstanding Hedging Obligations
constituting Second Priority Lien Debt, $500.0 million.
For purposes of this definition of First Priority Lien Cap, all letters of
credit will be valued at the face amount thereof, whether or not drawn.
"First Priority Lien Debt" means:
(1) the Notes;
(2) Indebtedness under the First Priority Term Loan Agreement
incurred on the Closing Date;
(3) Indebtedness under the Revolving Loan Agreement;
(4) Hedging Obligations incurred to hedge or manage interest
rate risk with respect to First Priority Lien Debt having an aggregate
notional amount not to exceed, together with the aggregate notional
amount of any outstanding Hedging Obligations constituting Second
Priority Lien Debt, $500.0 million;
(5) Indebtedness under any other Credit Facility that is
secured by a First Priority Lien; and
(6) any other Indebtedness the net proceeds of which are used
to refund, refinance, replace, defease, discharge or otherwise acquire
or retire any other First Priority Lien Debt;
provided, that in the case of any Indebtedness referred to in clause (3), (4),
(5) or (6) of this definition:
(a) such Indebtedness was permitted to be incurred and so
secured under each applicable Secured Debt Document (or the lenders
under such Indebtedness obtained an Officer's Certificate at the time
of incurrence to the effect that such Indebtedness was permitted to be
incurred and so secured under each applicable Secured Debt Document);
(b) on or before the date on which such Indebtedness is
incurred by the Company or the applicable Subsidiary, such Indebtedness
is designated by the Company, in an Officer's Certificate delivered to
each First Priority Debt Representative and the Collateral Agent, as
"First Priority Lien Debt" for the purposes of the Collateral Trust
Agreement and the other First Priority Lien Documents;
(c) such Indebtedness is governed by an agreement that
includes a Sharing Confirmation, a Lien Priority Confirmation, and an
agreement by the holder of such Indebtedness and the applicable First
Priority Debt Representative to vote with respect to such Indebtedness
in accordance with Article 4 of the Collateral Trust Agreement; and
(d) all requirements set forth in the Collateral Trust
Agreement as to the confirmation, grant or perfection of the Collateral
Agent's Liens to secure such Indebtedness and all Obligations in
respect thereof are satisfied (and the satisfaction of such
requirements will be conclusively established if the Company delivers
to the Collateral Agent an Officer's Certificate stating that such
requirements have been satisfied and that such Indebtedness is "First
Priority Lien Debt").
16
"First Priority Lien Documents" means the Notes, the Subsidiary
Guarantees, this Indenture, the First Priority Term Loan Agreement, the
Revolving Loan Agreement, each agreement governing any other Series of First
Priority Lien Debt and all other agreements governing, securing or relating to
any First Priority Lien Obligations.
"First Priority Lien Obligations" means the First Priority Lien Debt
and all other Obligations in respect of First Priority Lien Debt.
"First Priority Term Loan Administrative Agent" means Xxxxxx Xxxxxxx
Senior Funding, Inc., as administrative agent under the First Priority Term Loan
Agreement, together with its successors in such capacity.
"First Priority Term Loan Agreement" means the Credit and Guaranty
Agreement, dated as of the Closing Date, among the Company, the Guarantors, the
First Priority Term Loan Administrative Agent and the agents and lenders
thereunder, relating to $600.0 million in aggregate principal amount of term
loans, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, as amended,
modified, renewed, restated or replaced, in whole or in part, from time to time.
"First Priority Term Loans" means the principal of and interest and
premium (if any) on Indebtedness of the Company incurred under the First
Priority Term Loan Agreement.
"Fixed Charge Coverage Ratio" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
for such period to the Fixed Charges of such Person for such period. In the
event that the specified Person or any of its Subsidiaries incurs, assumes,
guarantees, repays, repurchases, redeems, defeases or otherwise discharges any
Indebtedness (other than ordinary working capital borrowings) or issues,
repurchases or redeems preferred equity subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated and on or
prior to the Calculation Date, then the Fixed Charge Coverage Ratio will be
calculated giving Pro Forma effect to such incurrence, assumption, Guarantee,
repayment, repurchase, redemption, defeasance or other discharge of
Indebtedness, or such issuance, repurchase or redemption of preferred equity,
and the use of the proceeds therefrom, as if the same had occurred at the
beginning of the such period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions that have been made by the specified Person
or any of its Subsidiaries, including through mergers or
consolidations, or any Person or any of its Subsidiaries acquired by
the specified Person or any of its Subsidiaries, and including any
related financing transactions and including increases in ownership of
Subsidiaries, during the applicable reference period or subsequent to
such reference period and on or prior to the Calculation Date will be
given Pro Forma effect as if they had occurred on the first day of such
reference period;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses (and ownership interests therein) disposed of prior to the
Calculation Date, will be excluded;
(3) the Fixed Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses
(and ownership interests therein) disposed of prior to the Calculation
Date, will be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the
specified Person or any of its Subsidiaries following the Calculation
Date;
17
(4) any Person that is a Subsidiary on the Calculation Date
will be deemed to have been a Subsidiary at all times during such
reference period;
(5) any Person that is not a Subsidiary on the Calculation
Date will be deemed not to have been a Subsidiary at any time during
such reference period; and
(6) if any Indebtedness bears a floating rate of interest, the
interest expense on such Indebtedness will be calculated as if the rate
in effect on the Calculation Date had been the applicable rate for the
entire reference period (taking into account any Hedging Obligation
applicable to such Indebtedness if such Hedging Obligation has a
remaining term as at the Calculation Date in excess of 12 months).
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued, including
amortization of debt issuance costs and original issue discount,
non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated
with Capital Lease Obligations, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations in respect of interest rates,
plus one-third of all payments with respect to operating leases, but
excluding the consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued, under any
Affiliate Subordinated Indebtedness; plus
(2) the consolidated interest of such Person and its
Subsidiaries that was capitalized during such period, but excluding the
consolidated capitalized interest of such Person and its Subsidiaries
for such period under any Affiliate Subordinated Indebtedness; plus
(3) any interest accruing on Indebtedness of another Person
that is guaranteed by such Person or one of its Subsidiaries or secured
by a Lien on assets of such Person or one of its Subsidiaries, whether
or not such Guarantee or Lien is called upon; plus
(4) the product of (a) all dividends, whether paid or accrued
and whether or not in cash, on any series of preferred equity of such
Person or any of its Subsidiaries, other than dividends on Equity
Interests payable solely in Equity Interests of the Company (other than
Disqualified Stock) or to the Company or a Subsidiary of the Company,
multiplied by (b) a fraction, the numerator of which is one and the
denominator of which is one minus the effective combined federal, state
and local statutory tax rate of such Person for the immediately
preceding fiscal year, expressed as a decimal,
in each case, on a consolidated basis and determined in accordance with GAAP.
"FPA" means the Federal Power Act, as amended.
"Freestone Facility" means the facility described under
"Business--Power Generation--ERCOT--Facility Descriptions--Freestone Facility"
in the Offering Memorandum.
"GAAP" means generally accepted accounting principles set forth in the
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other
18
entity as have been approved by a significant segment of the accounting
profession, which are in effect on the applicable date of determination.
"Global Note Legend" means the legend set forth in Section 2.06(g)(2),
which is required to be placed on all Global Notes issued under this Indenture.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A or Exhibit B, as applicable, issued in accordance with Section
2.01, 2.06(b)(3), 2.06(b)(4), 2.06(d)(2) or 2.06(f).
"Goldendale Facility" means the facility described under
"Business--Power Generation--The West--Facility Descriptions--Goldendale
Facility" in the Offering Memorandum.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Governmental Authority" means any federal, state, municipal, national
or other government, governmental department, commission, board, bureau, court,
agency or instrumentality or political subdivision thereof or any entity or
officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, by way of a pledge of assets or through
letters of credit or reimbursement agreements in respect thereof, of all or any
part of any Indebtedness (whether arising by virtue of partnership arrangements,
or by agreements to keep-well, to purchase assets, goods, securities or
services, to take or pay or to maintain financial statement conditions or
otherwise).
"Guarantors" means each of:
(1) CalGen Expansion Company, CPN Freestone LLC, Calpine
Freestone, LLC, Freestone Power Generation LP, Calpine Freestone Energy
GP, LLC, Calpine Freestone Energy LP, Calpine Power Equipment LP,
Calpine Channel Energy Center LP, LLC, Calpine Channel Energy Center
GP, LLC, Channel Power GP LLC, Channel Power LP, Channel Energy Center,
LP, CalGen Equipment Finance Holdings, LLC, CalGen Project Equipment
Finance Company One, LLC, CalGen Project Equipment Finance Company
Three LLC, CalGen Equipment Finance Company, LLC, Nueces Bay Energy
LLC, Calpine Northbrook Southcoast Investors, LLC, Calpine Corpus
Christi Energy GP, LLC, Calpine Corpus Christi Energy, LP, Corpus
Christi Cogeneration LP, Zion Energy LLC, Los Medanos Energy Center,
LLC, Xxxxxx Energy Center, LLC, Xxxxxxxx Energy LLC, Decatur Energy
Center, LLC, Calpine Xxxxx Power I, LLC, Calpine Xxxxx Power II, LLC,
Calpine Xxxxx Power, L.P., Calpine Baytown Energy Center LP, LLC,
Calpine Baytown Energy Center GP, LLC, Baytown Energy Center, LP,
Baytown Power GP, LLC, Baytown Power, LP, Columbia Energy LLC, Delta
Energy Center, LLC, CalGen Project Equipment Finance Company Two, LLC,
Pastoria Energy Facility L.L.C. and Calpine Pastoria Holdings, LLC; and
(2) any other Subsidiary of the Company that executes a
Subsidiary Guarantee in accordance with the provisions of this
Indenture;
and their respective successors and assigns.
19
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to
floating or from floating to fixed), interest rate cap agreements and
interest rate collar agreements;
(2) other agreements or arrangements designed to manage
interest rate risk; and
(3) other agreements or arrangements designed to protect such
Person against fluctuations in currency exchange rates or commodity
prices.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means a Global Note substantially in the form of
Exhibit A, bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in
respect thereof);
(3) in respect of bankers' acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the
purchase price of any property or services due more than six months
after such property is acquired or such services are completed; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of
any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a
Lien on the assets of the specified Person, the lesser of:
20
(A) the Fair Market Value of such asset at the date
of determination, and
(B) the amount of the Indebtedness of the other
Person.
Notwithstanding anything to the contrary in this definition of
Indebtedness, with respect to any contingent obligations (other than with
respect to contractual obligations to repurchase goods sold or distributed,
which shall be included to the extent reflected on the balance sheet of such
Person in accordance with GAAP) of a Person, the maximum liability of such
Indebtedness shall be as determined by such Person's Board of Directors, in good
faith, as, in light of the facts and circumstances existing at the time,
reasonably likely to be incurred upon the occurrence of the contingency giving
rise to such obligation.
"Indenture" means this First Priority Indenture, as amended or
supplemented from time to time.
"Indentures" means, collectively, this Indenture, the Second Priority
Indenture and the Third Priority Indenture.
"Index Based Gas Sale and Power Purchase Agreement" means the Index
Based Gas Sale and Power Purchase Agreement, dated as of the Closing Date, among
Calpine Energy Services, L.P., the Company and the Facility Owners party
thereto.
"Index Hedge" means, collectively, (1) the ISDA Master Agreement
(MULTICURRENCY-CROSS BORDER), dated as of March 12, 2004, between the Company
and Xxxxxx Xxxxxxx Capital Group Inc., as supplemented by the Schedule to the
Master Agreement, dated as of March 12, 2004, between the Company and Xxxxxx
Xxxxxxx Capital Group Inc. and by the Amended and Restated Confirmation, dated
as of March 12, 2004, between the Company and Xxxxxx Xxxxxxx Capital Group Inc.,
and (2) the Guaranty, dated as of March 12, 2004, by Xxxxxx Xxxxxxx for the
benefit of the Company.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Purchaser" means Xxxxxx Xxxxxxx & Co. Incorporated.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the form
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Subsidiary of the Company sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of the Company, the Company will be deemed to have made an Investment
on the date of any such sale or disposition equal to the Fair Market Value of
the Company's Investments in such Subsidiary that were not sold or disposed of
in an amount determined as provided in the final paragraph of the covenant
contained in Section 4.07. Except as otherwise provided in this Indenture, the
amount of an Investment will be determined at the time the Investment is made
and without giving effect to subsequent changes in value.
21
"Issuers" means, collectively, the Company and CalGen Finance.
"Junior Debt Representative" means the trustee, agent or representative
of the holders of a Series of Junior Lien Debt who maintains the transfer
register for such Series of Junior Lien Debt and is appointed as a Junior Debt
Representative (for purposes related to the administration of the Security
Documents) pursuant to the indenture or other agreement governing such Series of
Junior Lien Debt.
"Junior Lien" means a Lien granted by a Security Document to the
Collateral Agent upon any property of the Company or any Guarantor to secure
Junior Lien Obligations.
"Junior Lien Debt" means:
(1) Expansion Debt that is secured by a Junior Lien that was
permitted to be incurred under clause (7)(b) or (7)(c) of the
definition of Permitted Liens; and
(2) Third Party Subordinated Indebtedness that is secured by a
Junior Lien that was permitted to be incurred under clause (19) of the
definition of Permitted Liens,
but only if on or before the day on which such Indebtedness is incurred by the
Company or the applicable Subsidiary, such Indebtedness is designated by the
Company, in an Officer's Certificate delivered to each Junior Debt
Representative and the Collateral Agent on or before such date, as "Junior Lien
Debt" for the purposes of each of the Junior Lien Documents and the Collateral
Trust Agreement.
"Junior Lien Documents" means all agreements governing, securing or
relating to any Junior Lien Obligations.
"Junior Lien Obligations" means the Junior Lien Debt and all other
Obligations in respect of Junior Lien Debt.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company, CalGen Finance and the Guarantors and sent to all Holders of the
Notes for use by such Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Lien Priority Confirmation" means:
(1) as to any Series of First Priority Lien Debt, the written
agreement of the holders of such Series of First Priority Lien Debt, as
set forth in the indenture or other agreement governing such Series of
First Priority Lien Debt, for the enforceable benefit of each existing
and future
22
holder of Permitted Prior Liens, to be bound by the provisions set
forth in the Collateral Trust Agreement;
(2) as to any Series of Second Priority Lien Debt, the written
agreement of the holders of such Series of Second Priority Lien Debt,
as set forth in the indenture or other agreement governing such Series
of Second Priority Lien Debt, for the enforceable benefit of all
holders of each existing and future Series of First Priority Lien Debt,
each existing and future First Priority Debt Representative, the
Collateral Agent and each existing and future holder of Prior Permitted
Liens, to be bound by the provisions set forth in the Collateral Trust
Agreement; and
(3) as to any Series of Third Priority Lien Debt, the written
agreement of the holders of such Series of Third Priority Lien Debt, as
set forth in the indenture or other agreement governing such Series of
Third Priority Lien Debt, for the enforceable benefit of all holders of
each existing and future Series of First Priority Lien Debt and each
existing and future Series of Second Priority Lien Debt, each existing
and future First Priority Debt Representative and each existing and
future Second Priority Debt Representative, the Collateral Agent, and
each existing and future holder of Prior Permitted Liens, to be bound
by the provisions set forth in the Collateral Trust Agreement.
"Los Medanos Facility" means the facility described under
"Business--Power Generation--The West--Facility Descriptions--Los Medanos
Facility" in the Offering Memorandum.
"Major Maintenance Expenses" means all costs, expenses, fees and other
charges (including liquidated damages or other damages or penalties) incurred by
the Company and its Subsidiaries during such period for major maintenance of the
Facilities under the Master Maintenance Services Agreement or otherwise.
"Major Project Documents" means the WECC Fixed Price Gas Sale and Power
Purchase Agreement, the Index Based Gas Sale and Power Purchase Agreement, the
Index Hedge, the Working Capital Facility, the Master Operation and Maintenance
Agreement, the Master Maintenance Services Agreement, the Calpine Performance
Guaranty, the Master Construction Management Agreement, the Calpine Project
Undertaking and the Administrative Services Agreement.
"Master Construction Management Agreement" means the Master
Construction Management Agreement, dated as of the Closing Date, among Calpine
Construction Management Company, Inc., the Company and the Facility Owners party
thereto.
"Master Maintenance Services Agreement" means the Master Maintenance
Services Agreement, dated as of the Closing Date, among Calpine Operating
Services Company, Inc., the Company and the Facility Owners party thereto.
"Master Operation and Maintenance Agreement" means the Master Operation
and Maintenance Agreement, dated as of the Closing Date, among Calpine Operating
Services Company, Inc., the Company and the Facility Owners party thereto.
"Material Adverse Effect" means a material adverse effect on (a) the
current or reasonably anticipated business, property, results of operation or
financial condition of the Company and its Subsidiaries taken as a whole, (b)
the ability of the Company and its Subsidiaries to perform their obligations
under the Notes and the Subsidiary Guarantees or (c) the value of, or the
validity or priority of the Collateral Agent's security interests in, the
Collateral taken as a whole.
23
"Materially Adverse" means, with respect to an event or circumstance,
that such event or circumstance has had or is reasonably expected to have a
material adverse effect on the Company and its Subsidiaries, taken as a whole;
it being understood that an event or circumstance would have a material adverse
effect on the Company and its Subsidiaries, taken as a whole, if the Excess Cash
Flow for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such event or circumstance occurred or commenced to exist, as applicable,
would have decreased by more than 5.0%, determined on a Pro Forma basis.
"Moody's" means Xxxxx'x Investors Services, Inc., or any successor
rating agency.
"Xxxxxx Facility" means the facility described under "Business--Power
Generation--The Southeast--Facility Descriptions--Xxxxxx Facility" in the
Offering Memorandum.
"Mortgages" means the mortgages and deeds of trust, dated as of the
Closing Date, entered into between the Guarantors and the Collateral Agent.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (but not loss), together with any related
provision for taxes on such gain (but not loss), realized in connection
with (a) any Asset Sale or (b) the disposition of any securities by
such Person or any of its Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Subsidiaries; and
(2) any extraordinary gain (but not loss), together with any
related provision for taxes on such extraordinary gain (but not loss).
"Net Proceeds" means:
(1) the aggregate cash proceeds received by the Company or any
of its Subsidiaries in respect of any Asset Sale (including any cash
received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale, including legal, accounting and investment
banking fees, sales commissions, any relocation expenses incurred as a
result of the Asset Sale, and any taxes paid or payable as a result of
the Asset Sale, in each case, after taking into account any available
tax credits or deductions and any tax sharing arrangements, amounts
required to be applied to the repayment of Indebtedness secured by a
Lien on the asset or assets that were the subject of the Asset Sale
(other than Secured Obligations), and any reserve for adjustment in
respect of the sale price of such asset or assets established in
accordance with GAAP;
(2) all proceeds of any insurance, indemnity, warranty or
guaranty payable from time to time with respect to any Casualty Event
that are not applied to the repair, replacement or rebuilding of the
applicable Facility to the extent commercially feasible, other than
business interruption insurance proceeds, net of the direct costs
relating to the collection of such proceeds; and
(3) all payments (in any form whatsoever) made or due and
payable from time to time in connection with any Condemnation Event by
any Governmental Authority (or any Person acting under color of
Governmental Authority) that are not applied to the repair, replacement
or
24
rebuilding of the applicable Facility to the extent commercially
feasible, net of the direct costs relating to the collection of such
proceeds.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Documents" means this Indenture, the Notes, the Subsidiary
Guarantees, the Collateral Trust Agreement, each Sharing Confirmation, the other
Security Documents and all other agreements related thereto.
"Notes" has the meaning assigned to it in the preamble to this
Indenture.
"Obligations" means, with respect to any Indebtedness of any Person
(collectively, without duplication):
(1) all debt, financial liabilities and obligations of such
Person of whatsoever nature and howsoever evidenced (including
principal, interest, fees, reimbursement obligations, cash cover
obligations, penalties, indemnities and legal and other expenses,
whether due after acceleration or otherwise) to the providers or
holders of such Indebtedness or to any agent, trustee or other
representative of such providers or holders of such Indebtedness under
or pursuant to each agreement, document or instrument evidencing,
securing, guaranteeing or relating to such Indebtedness, financial
liabilities or obligations relating to such Indebtedness (including
Secured Debt Documents applicable to such Indebtedness (if any)), in
each case, direct or indirect, primary or secondary, fixed or
contingent, now or hereafter arising out of or relating to any such
agreement, document or instrument;
(2) any and all sums paid or advanced by the Collateral Agent
or any other Person in order to preserve the Collateral or any other
collateral securing such Indebtedness or to preserve the Liens and
security interests in the Collateral or any other collateral securing
such Indebtedness; and
(3) the costs and expenses of collection and enforcement of
the obligations referred to in clauses (1) and (2), including:
(a) the costs and expenses of retaking, holding,
preparing for sale or lease, selling or otherwise disposing of
or realizing on any Collateral or any other collateral;
(b) the costs and expenses of any exercise by the
Collateral Agent or any other Person of its rights under the
Security Documents or any other security documents; and
(c) reasonable attorneys' fees and expenses and court
costs.
"Offering Memorandum" means the Offering Memorandum dated March 17,
2004 relating to the Notes.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officer's Certificate" means a certificate signed on behalf of the
Company by one Officer of the Company that meets the requirements of Section
13.05.
25
"Xxxxx Facility" means the facility described under "Business--Power
Generation--Other--Facility Descriptions--Xxxxx Facility" in the Offering
Memorandum.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
13.05. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Pastoria Facility" means the facility described under "Business--Power
Generation--The West--Facility Descriptions--Pastoria Facility" in the Offering
Memorandum.
"Permitted Business" means the ownership, construction, operation and
maintenance of the Closing Date Facilities and any substantially similar
electric generating facilities located in the United States, together with any
related assets or facilities, including gas pipelines supplying natural gas to
such generating facilities, electric transmission lines carrying energy
generated from such generating facilities, and any related gas or electric
interconnection facilities.
"Permitted Counterparty Lien" means a Lien in favor of a counterparty
under a PPA; provided, that the following conditions are satisfied:
(1) the counterparty is not an Affiliate of the Company;
(2) the Lien does not secure any Indebtedness and (a) is
granted solely to secure the performance obligations of the Company or
the applicable Subsidiary under the PPA and/or any obligation of the
Company or the applicable Subsidiary to make a termination payment
under the PPA upon the occurrence of the event described in clause
(3)(c)(i) below or the termination by the counterparty upon the
occurrence of any of the events described in clause (3)(c)(ii) below,
or (b) creates rights designed to enable the counterparty to assume
operational control of the relevant Facility or Facilities (e.g.,
step-in rights) or otherwise continue performance of the Company's or
the applicable Subsidiary's obligations under the PPA;
(3) the counterparty can exercise its rights with respect to
the Lien only:
(a) for so long as the counterparty remains current
with respect to all of its payment obligations under the PPA
and is not otherwise in a continuing default under the PPA,
(b) if the counterparty continues to acknowledge the
existence of the Liens securing the Secured Obligations
(unless and until Liens securing the Secured Obligations are
eliminated in connection with a foreclosure of the Lien as
contemplated by clause (4) of this definition), and
(c) if either (i) the Company or the applicable
Subsidiary has terminated, rejected or repudiated the PPA
(including, without limitation, any rejection or similar act
by or on behalf of the Company or the applicable Subsidiary in
connection with any proceeding under Bankruptcy Law) or (ii)
the Company or the applicable Subsidiary has intentionally
breached its obligations under the PPA; provided, that the
following actions will be considered an intentional breach by
the Company or the applicable Subsidiary
26
under the PPA: (A) the Company or the applicable Subsidiary
provides or delivers capacity or energy to a third party if
the Company or the applicable Subsidiary is required under the
PPA to provide or deliver such capacity or energy to the
counterparty; (B) the Company or the applicable Subsidiary
fails to operate or attempt to operate one or more of the
relevant Facilities at a time when the Company or the
applicable Subsidiary was required under the PPA to operate or
attempt to operate such Facility or Facilities and such
operation or attempted operation is not prevented by force
majeure, forced outage or other events or circumstances
outside the reasonable control of the Person responsible
therefor; (C) any failure by the Company or the applicable
Subsidiary to comply with any provisions of the PPA designed
to enable the counterparty to assume operational control of
the relevant Facility or Facilities (e.g., step-in rights) or
otherwise take actions necessary to continue performance of
the Company's or the applicable Subsidiary's obligations under
the PPA, in each case to the extent the Company or the
applicable Subsidiary is then capable of complying with such
provisions; or (D) any failure by the Company or the
applicable Subsidiary to pay to the counterparty any amount
due and payable in accordance with the terms and conditions of
the PPA; and
(4) the counterparty's exercise of its rights with respect to
the Lien is limited to (a) the taking of actions pursuant to any
provisions of the PPA designed to enable the counterparty to assume
operational control of the relevant Facility or Facilities (e.g.,
step-in rights) or otherwise necessary to continue performance of the
Company's or the applicable Subsidiary's obligations under the PPA or
(b) the recovery of any termination payment due under the PPA upon the
occurrence of the event described in clause (3)(c)(i) above or the
termination by the counterparty upon the occurrence of any of the
events described in clause (3)(c)(ii) above.
"Permitted Investments" means:
(1) any Investment in the Company or in a Guarantor;
(2) (a) any Investment in the Goldendale Facility to finance
the construction and completion of the Goldendale Facility and any
other repairs, improvements or other capital expenditures necessary to
operate and maintain such Facility in accordance with prudent industry
practice, and (b) any other Investment in the Goldendale Facility made
with the proceeds of Equity Contributions, Perpetual Preferred Stock or
Affiliate Subordinated Indebtedness;
(3) any Investment in Cash Equivalents;
(4) any Investment by the Company or any Guarantor in a
Person, if as a result of such Investment:
(a) such Person becomes a Wholly Owned Subsidiary of
the Company and becomes a Guarantor; or
(b) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the
Company or a Guarantor;
(5) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant contained in Section 4.10;
27
(6) any acquisition of assets or Capital Stock solely in
exchange for the issuance of Equity Interests (other than Disqualified
Stock) of the Company;
(7) any Investments received in compromise or resolution of
(a) obligations of trade creditors or customers that were incurred in
the ordinary course of business of the Company or any of its
Subsidiaries, including pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of any trade
creditor or customer, or (b) litigation, arbitration or other disputes
with Persons who are not Affiliates;
(8) Investments represented by Hedging Obligations;
(9) repurchases of the Notes and other Secured Obligations;
(10) negotiable instruments held for deposit or collection in
the ordinary course of business; and
(11) other Investments in any Person other than an Affiliate
of the Company having an aggregate Fair Market Value (measured on the
date each such Investment was made and without giving effect to
subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (11) that are at the time
outstanding, not to exceed $30.0 million.
"Permitted Liens" means:
(1) Liens in favor of the Collateral Agent Equally and Ratably
securing the Notes, the First Priority Term Loans, the Revolving Loans
and all other First Priority Lien Debt, all in an aggregate principal
amount not exceeding the First Priority Lien Cap, and all related First
Priority Lien Obligations;
(2) Liens in favor of the Collateral Agent Equally and Ratably
securing the Second Priority Notes, the Second Priority Term Loans and
all other Second Priority Lien Debt, all in an aggregate amount not
exceeding the Second Priority Lien Cap, and all related Second Priority
Lien Obligations;
(3) Liens in favor of the Collateral Agent Equally and Ratably
securing the Third Priority Notes and all other Third Priority Lien
Debt, and all related Third Priority Lien Obligations;
(4) Liens in favor of the Company or the Guarantors;
(5) pledges or deposits made under workers' compensation,
unemployment insurance laws or similar legislation, or good faith
deposits in connection with bids, tenders, contracts (other than for
payment of Indebtedness) or operating leases to which such Person is a
party;
(6) Liens or deposits to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of
business;
(7) (a) Liens to secure Expansion Debt that encumber the
Expansion Assets financed with the proceeds of such Expansion Debt and
other Expansion Assets owned by the Person incurring such Expansion
Debt (including any rights of such Person under Shared Facilities
Arrangements), (b) Liens to secure Expansion Debt that encumber the
Capital Stock of CalGen Expansion Company; provided, that any such
Capital Stock must be part of the Collateral and any such
28
Liens must be junior to all Liens securing Secured Obligations in
accordance with the terms of the Collateral Trust Agreement, including
an agreement by the holders of such Liens not to exercise any remedies
with respect to such Collateral, and a provision to the effect that the
holders of such Liens will not be entitled to the proceeds of such
Collateral upon a sale thereof, in each case until the Secured
Obligations Termination Date; and (c) if such Expansion Assets are not
Excluded Assets and are part of the Collateral, Liens to secure
Expansion Debt on the other property and assets of such Person;
provided, that any such Liens must be junior to all Liens securing
Secured Obligations in accordance with the terms of the Collateral
Trust Agreement, including an agreement by the holders of such Liens
not to exercise any remedies with respect to such Collateral, and a
provision to the effect that the holders of such Liens will not be
entitled to the proceeds of such Collateral upon a sale thereof, in
each case until the Secured Obligations Termination Date;
(8) obligations under Shared Facilities Arrangements, to the
extent such obligations constitute Liens, and Liens on Shared
Facilities securing the Company's or the applicable Subsidiary's
obligations under Shared Facility Arrangements;
(9) Liens which constitute bankers' liens, rights of set-off
or similar rights and remedies as to deposit accounts or other funds
maintained with any bank or other financial institution, whether
arising by operation of law or pursuant to contract;
(10) Liens existing on the Closing Date;
(11) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly instituted and diligently
concluded; provided, that any reserve or other appropriate provision as
is required in conformity with GAAP has been made therefor;
(12) Liens imposed by law, such as carriers', warehousemen's,
landlord's and mechanics' Liens, in each case, incurred in the ordinary
course of business; or Liens arising out of judgments that do not
constitute a Default or an Event of Default;
(13) survey exceptions, easements or reservations of, or
rights of others for, licenses, rights-of-way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or
other restrictions as to the use of real property or Liens incidental
to the conduct of the business of such Person or to the ownership of
its properties that were not incurred in connection with Indebtedness
and that do not in the aggregate materially adversely affect the value
of said properties or materially impair their use in the operation of
the business of such Person;
(14) Liens to secure any Permitted Refinancing Indebtedness
permitted to be incurred under this Indenture; provided, however, that:
(A) the new Lien shall be limited to all or part of
the same property and assets that secured the original Lien
(plus repairs, improvements and additions to such property or
assets); and
(B) the Indebtedness secured by the new Lien is not
increased to any amount greater than the sum of (x) the
outstanding principal amount or, if greater, committed amount,
of the Permitted Refinancing Indebtedness and (y) an amount
necessary to pay any fees and expenses, including premiums,
related to such Indebtedness;
29
(15) Liens not in respect of Indebtedness arising from Uniform
Commercial Code financing statements for informational purposes with
respect to operating leases incurred in the ordinary course of business
and not otherwise prohibited by this Indenture;
(16) Liens not in respect of Indebtedness consisting of the
interest of the lessor under any operating lease entered into in the
ordinary course of business and not otherwise prohibited by this
Indenture;
(17) Permitted Counterparty Liens;
(18) to the extent constituting Liens, obligations of the
Company or its Subsidiaries under or restrictions imposed by any PPA
Recognition Agreement;
(19) Liens on property and assets of the Company to secure
Third Party Subordinated Indebtedness; provided, that all such property
and assets must be part of the Collateral and any such Liens must be
junior to all Liens securing Secured Obligations in accordance with the
terms of the Collateral Trust Agreement, including an agreement by the
holders of such Liens not to exercise any remedies with respect to the
Collateral, and a provision to the effect that the holders of such
Liens will not be entitled to the proceeds of any Collateral upon a
sale thereof, in each case until the Secured Obligations Termination
Date; and
(20) unperfected security interests to secure (a) intercompany
Indebtedness permitted to be incurred under clause (5) of the
definition of Permitted Debt or (b) Affiliate Subordinated Indebtedness
permitted to be incurred under clause (9) of the definition of
Permitted Debt; and
(21) Liens incurred in the ordinary course of business of the
Company or any Subsidiary of the Company with respect to obligations
that do not exceed $50.0 million at any one time outstanding.
"Permitted Prior Liens" means:
(1) Liens securing First Priority Lien Debt not exceeding the
First Priority Lien Cap and all related First Priority Lien
Obligations;
(2) Liens securing Second Priority Lien Debt not exceeding the
Second Priority Lien Cap and all related Second Priority Lien
Obligations;
(3) Liens directly on Expansion Assets of the kind described
in clause (7)(a) of the definition of Permitted Liens;
(4) Liens described in clause (8), (10) (to the extent set
forth on Schedule A), (17) or (18) of the definition of Permitted
Liens; and
(5) Liens that arise by operation of law and are not
voluntarily granted, to the extent entitled by law to priority over the
security interests created by the Security Documents.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Subsidiaries (other than intercompany
Indebtedness); provided, that:
30
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness extended,
refinanced, renewed, replaced, defeased or refunded (plus all accrued
interest on the Indebtedness and the amount of all expenses and
premiums incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and is subordinated in
right of payment to, the Notes on terms at least as favorable to the
Holders of Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and
(4) such Indebtedness is incurred either by the Company or by
the Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"Permitted Tax Payments" means, without duplication as to amounts and
as long as the Company is a pass-through entity for U.S. federal income tax
purposes, payments to Calpine in an amount equal to the federal, state, local
and foreign taxes (including any penalties and interest) that the Company would
owe if the Company were a corporation for U.S. federal income tax purposes
filing a consolidated or combined return with its Subsidiaries.
"Perpetual Preferred Stock" means, with respect to any Person, any
preferred Capital Stock of such Person that is not subject to mandatory
redemption and is not Voting Stock.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Pledge Agreements" means (1) the Membership Interest Pledge Agreement,
dated as of the Closing Date, among CalGen Holdings, the Company and the
Collateral Agent, and (2) the Membership Interest Pledge Agreement, dated as of
the Closing Date, among the Company, CalGen Expansion Company and the Collateral
Agent.
"PPA" means an agreement (including a tolling agreement, fuel
conversion services agreement or other similar agreement) entered into by the
Company or any of its Subsidiaries for the sale of capacity or energy (and
services ancillary or related thereto) from one or more of the Facilities.
"PPA Recognition Agreement" means an agreement by the Collateral Agent,
on behalf of the holders of Secured Obligations, (a) to assume, directly or
indirectly (through any agent or Affiliate), the rights and obligations of the
Company or any of its Subsidiaries under the WECC Fixed Price Gas Sale and Power
Purchase Agreement in the event of a foreclosure under any Secured Debt
Document, and (b) not to reject the WECC Fixed Price Gas Sale and Power Purchase
Agreement in a proceeding under Bankruptcy Law (subject to applicable law and
the discretion of the bankruptcy court), so long as Calpine Energy Services,
L.P. is not then in default under the WECC Fixed Price Gas Sale and Power
Purchase Agreement or the Index Based Gas Sale and Power Purchase Agreement,
provided, that such PPA Recognition Agreement is substantially in the form of
Exhibit B to the Collateral Trust Agreement.
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"Private Placement Legend" means the legend set forth in Section
2.06(g)(1) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"Pro Forma" means, with respect to a calculation, that such calculation
is made in accordance with Regulation S-X under the Securities Act and gives
effect to all relevant modifications to Major Project Documents and other
contractual arrangements that have been made prior to, or are being made on, the
calculation date; provided, that in the case of a calculation for any period
occurring prior to the Closing Date, all Major Project Documents and other
contractual arrangements in effect on the Closing Date shall be deemed to have
been in effect for the entirety of such period.
"PUHCA" means the Public Utility Holding Company Act of 1935, as
amended.
"PURPA" means the Public Utility Regulatory Policies Act of 1978, as
amended.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"QF" means a "qualifying cogeneration facility" as defined under the
FPA, as amended by PURPA and Subpart B of Part 292 of the FERC's regulations.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Closing Date, among the Initial Purchaser, the
Company, CalGen Finance and the Guarantors.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note
or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent Global Note in
the form of Exhibit A, bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee, issued in a denomination equal to the outstanding
principal amount of the applicable Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary Global Note in
the form of Exhibit B, deposited with or on behalf of, and registered in the
name of, the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of Notes initially sold in reliance on Rule 903 of
Regulation S.
"Remedy Bar Lift Trigger Date" means, at any time after the occurrence
and during the continuation of an event of default with respect to Second
Priority Lien Debt, the earlier of (1) the date that is 180 days after the
occurrence of such event of default and (2) the date of the commencement of any
proceeding under Bankruptcy Law in respect of the Company or any Guarantor.
"Required First Priority Debtholders" means, at any time, the holders
of a majority in aggregate principal amount of:
(1) the aggregate outstanding principal amount of First
Priority Lien Debt (including outstanding letters of credit whether or
not then available or drawn); plus
(2) other than in connection with an exercise of remedies, the
aggregate unfunded commitments to extend credit which, when funded,
would constitute First Priority Lien Debt,
32
in each case voting in accordance with the provisions set forth in Article 4 of
the Collateral Trust Agreement. For purposes of this definition, First Priority
Lien Debt registered in the name of, or Beneficially Owned by, the Company or
any Affiliate of the Company will be deemed not to be outstanding.
"Required Second Priority Debtholders" means, at any time, the holders
of a majority in aggregate principal amount of:
(1) the aggregate outstanding principal amount of Second
Priority Lien Debt (including outstanding letters of credit whether or
not then available or drawn); plus
(2) other than in connection with an exercise of remedies, the
aggregate unfunded commitments to extend credit which, when funded,
would constitute Second Priority Lien Debt,
in each case voting in accordance with the provisions set forth in Article 4 of
the Collateral Trust Agreement. For purposes of this definition, Second Priority
Lien Debt registered in the name of, or Beneficially Owned by, the Company or
any Affiliate of the Company will be deemed not to be outstanding.
"Required Third Priority Debtholders" means, at any time, the holders
of a majority in aggregate principal amount of:
(1) the aggregate outstanding principal amount of Third
Priority Lien Debt (including outstanding letters of credit whether or
not then available or drawn); plus
(2) other than in connection with an exercise of remedies, the
aggregate unfunded commitments to extend credit which, when funded,
would constitute Third Priority Lien Debt,
in each case voting in accordance with the provisions set forth in Article 4 of
the Collateral Trust Agreement. For purposes of this definition, Third Priority
Lien Debt registered in the name of, or Beneficially Owned by, the Company or
any Affiliate of the Company will be deemed not to be outstanding.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Office of the Trustee (or any successor group
of the Trustee) or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day distribution compliance period as
defined in Regulation S.
"Revolving Loan Administrative Agent" means The Bank of Nova Scotia, as
administrative agent under the Revolving Loan Agreement, together with its
successors in such capacity.
33
"Revolving Loan Agreement" means the Amended and Restated Credit
Agreement, dated as of the Closing Date, among the Company, the Guarantors, the
Revolving Loan Administrative Agent and the agents and lenders thereunder,
relating to $200.0 million in aggregate principal amount of revolving credit
facilities, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, as amended,
modified, renewed, restated or replaced, in whole or in part, from time to time.
"Revolving Loans" means the principal of, and interest and premium (if
any) on, Indebtedness of the Company incurred under the Revolving Loan
Agreement.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"S&P" means Standard and Poor's Ratings Group, or any successor rating
agency.
"SEC" means the Securities and Exchange Commission.
"Second Priority Debt Representative" means:
(1) in the case of the Second Priority Notes, the Second
Priority Trustee;
(2) in the case of the Second Priority Term Loans, the Second
Priority Term Loan Administrative Agent; or
(3) in the case of any other Series of Second Priority Lien
Debt, the trustee, agent or representative of the holders of such
Series of Priority Lien Debt who maintains the transfer register for
such Series of Second Priority Lien Debt and (a) is appointed as a
Second Priority Debt Representative (for purposes related to the
administration of the Security Documents) pursuant to the indenture or
other agreement governing such Series of Second Priority Lien Debt and
(b) has become a party to the Collateral Trust Agreement by executing a
joinder in the form required under the Collateral Trust Agreement.
"Second Priority Indenture" means the Second Priority Indenture, dated
as of the Closing Date, among the Company, CalGen Finance, the Guarantors and
Wilmington Trust FSB, as trustee.
"Second Priority Lien" means a Lien granted pursuant to a Security
Document to the Collateral Agent upon any property of the Company or any
Guarantor to secure Second Priority Lien Obligations.
"Second Priority Lien Cap" means, as of any date:
(1) the principal amount of Second Priority Notes issued on
the Closing Date; plus
(2) the principal amount of all Indebtedness outstanding under
the Second Priority Term Loan Agreement on the Closing Date, plus any
Indebtedness outstanding under any other Credit Facility, all in an
aggregate principal amount not to exceed the amount provided by clause
(1)(b) of the definition of Permitted Debt; less
34
(3) the amount of Third Priority Lien Debt incurred after the
Closing Date the net proceeds of which are used to repay any Second
Priority Lien Debt; plus
(4) the amount of accrued interest, fees and expenses,
including premiums, paid in connection with the incurrence of any
Permitted Refinancing Indebtedness with respect to the Indebtedness
described in clauses (1) and (2); plus
(5) the notional amount of Hedging Obligations incurred to
hedge or manage interest rate risk with respect to Second Priority Lien
Debt having an aggregate notional amount not to exceed, together with
the aggregate notional amount of any outstanding Hedging Obligations
constituting First Priority Lien Debt, $500.0 million.
For purposes of this definition of Second Priority Lien Cap, all letters of
credit will be valued at the face amount thereof, whether or not drawn.
"Second Priority Lien Debt" means:
(1) the Second Priority Notes;
(2) Indebtedness under the Second Priority Term Loan Agreement
incurred on the Closing Date;
(3) Hedging Obligations incurred to hedge or manage interest
rate risk with respect to Second Priority Lien Debt having an aggregate
notional amount not to exceed, together with the aggregate notional
amount of any outstanding Hedging Obligations constituting First
Priority Lien Debt, $500.0 million;
(4) Indebtedness under any other Credit Facility that is
secured by a Second Priority Lien; and
(5) any other Indebtedness the net proceeds of which are used
to refund, refinance, replace, defease, discharge or otherwise acquire
or retire any other Second Priority Lien Debt or any First Priority
Lien Debt;
provided, that in the case of any Indebtedness referred to in clause (3), (4) or
(5) of this definition:
(a) such Indebtedness was permitted to be incurred and so
secured under each applicable Secured Debt Document (or the lenders
under such Indebtedness obtained an Officer's Certificate at the time
of incurrence to the effect that such Indebtedness was permitted to be
incurred and so secured under each applicable Secured Debt Document);
(b) on or before the date on which such Indebtedness is
incurred by the Company or the applicable Subsidiary, such Indebtedness
is designated by the Company, in an Officer's Certificate delivered to
each Second Priority Debt Representative and the Collateral Agent, as
"Second Priority Lien Debt" for the purposes of the Collateral Trust
Agreement and the other Second Priority Lien Documents;
(c) such Indebtedness is governed by an agreement that
includes a Sharing Confirmation, a Lien Priority Confirmation, and an
agreement by the holder of such Indebtedness and the applicable Second
Priority Debt Representative to vote with respect to such Indebtedness
in accordance with Article 4 of the Collateral Trust Agreement; and
35
(d) all requirements set forth in the Collateral Trust
Agreement as to the confirmation, grant or perfection of the Collateral
Agent's Liens to secure such Indebtedness and all Obligations in
respect thereof are satisfied (and the satisfaction of such
requirements will be conclusively established if the Company delivers
to the Collateral Agent an Officer's Certificate stating that such
requirements have been satisfied and that such Indebtedness is "Second
Priority Lien Debt").
"Second Priority Lien Documents" means the Second Priority Notes, the
related Subsidiary guarantees, the Second Priority Indenture, the Second
Priority Term Loan Agreement, each agreement governing any other Series of
Second Priority Lien Debt and all other agreements governing, securing or
relating to any Second Priority Lien Obligations.
"Second Priority Lien Obligations" means the Second Priority Lien Debt
and all other Obligations in respect of Second Priority Lien Debt.
"Second Priority Notes" means the Second Priority Secured Floating Rate
Notes due 2010 issued by the Company and CalGen Finance on the Closing Date
under the Second Priority Indenture.
"Second Priority Term Loan Administrative Agent" means Xxxxxx Xxxxxxx
Senior Funding, Inc., as administrative agent under the Second Priority Term
Loan Agreement, together with its successors in such capacity.
"Second Priority Term Loan Agreement" means the Credit and Guaranty
Agreement, dated as of the Closing Date, among the Company, the Guarantors and
the Second Priority Term Loan Administrative Agent, relating to $100.0 million
in aggregate principal amount of term loans, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, as amended, modified, renewed, restated or replaced, in
whole or in part, from time to time.
"Second Priority Term Loans" means the principal of and interest and
premium (if any) on Indebtedness of the Company incurred under the Second
Priority Term Loan Agreement.
"Second Priority Trustee" means the trustee under the Second Priority
Indenture.
"Secured Debt" means First Priority Lien Debt, Second Priority Lien
Debt and Third Priority Lien Debt.
"Secured Debt Documents" means the First Priority Lien Documents, the
Second Priority Lien Documents and the Third Priority Lien Documents.
"Secured Debt Representatives" means each First Priority Debt
Representative, each Second Priority Debt Representative and each Third Priority
Debt Representative.
"Secured Obligations" means, collectively, all First Priority Lien
Obligations, all Second Priority Lien Obligations and all Third Priority Lien
Obligations.
"Secured Obligations Termination Date" means the date on which all
Secured Obligations (including all interest accrued thereon after the
commencement of any bankruptcy, insolvency or liquidation proceeding at the
rate, including any applicable post-default rate, specified in the applicable
Secured Debt Documents, even if such interest is not enforceable, allowable or
allowed as a claim in such proceeding) have been paid in full in cash (and/or
defeased in accordance with the applicable Secured Debt Documents), all
commitments to extend credit under all Secured Debt Documents have terminated
36
or expired and all outstanding letters of credit issued pursuant to any Secured
Debt Documents have been cancelled, terminated or cash collateralized at 102.5%
of the aggregate undrawn amount.
"Secured Parties" means the Collateral Agent and the holders of any
Secured Obligations at any time outstanding.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the Security Agreement, dated as of the
Closing Date, among the Company, the Guarantors and the Collateral Agent.
"Security Documents" means the Security Agreement, the Pledge
Agreements, the Mortgages, the Control Agreement, the Collateral Trust
Agreement, each Sharing Confirmation and Lien Priority Confirmation, and all
security agreements, pledge agreements, collateral assignments, mortgages,
collateral agency agreements, control agreements, deeds of trust or other grants
or transfers for security executed and delivered by the Company or any Guarantor
creating (or purporting to create) a Lien upon Collateral in favor of the
Collateral Agent, in each case, as amended, modified, renewed, restated or
replaced, in whole or in part, from time to time, in accordance with its terms.
"Series of First Priority Lien Debt" means, severally, the Notes, the
First Priority Term Loans, the Revolving Loans and each other issue or series of
First Priority Lien Debt for which a single transfer register is maintained.
"Series of Junior Lien Debt" means, severally, each issue or series of
Junior Lien Debt for which a single transfer register is maintained.
"Series of Second Priority Lien Debt" means, severally, the Second
Priority Notes, the Second Priority Term Loans and each other issue or series of
Second Priority Lien Debt for which a single transfer register is maintained.
"Series of Secured Debt" means, severally, each Series of First
Priority Lien Debt, each Series of Second Priority Lien Debt and each Series of
Third Priority Lien Debt.
"Series of Third Priority Lien Debt" means, severally, the Third
Priority Notes and each other issue or series of Third Priority Lien Debt for
which a single transfer register is maintained.
"Shared Facilities" means equipment, facilities, pipelines, permits,
real estate rights, entitlements or other property that are shared or jointly
used, owned or operated by the Company or any of its Subsidiaries and any owner
of Expansion Assets.
"Shared Facilities Arrangement" means any arrangement that provides for
the sharing, joint operation or use, common ownership, leasing or contingent use
of Shared Facilities between the Company or any of its Subsidiaries and any
owner of Expansion Assets or Toll Party (as defined below), and/or their
respective lenders, including (1) agreements for the sharing or joint use or
operation of Shared Facilities, (2) ownership of undivided interests in Shared
Facilities as tenants in common or other similar forms of joint ownership, (3)
leasing of Shared Facilities by the Company or any of its Subsidiaries to an
owner of Expansion Assets, (4) ownership of Shared Facilities by a single
purpose entity formed solely to own the Shared Facilities and owned by the
Company or any of its Subsidiaries or jointly owned by the Company or any of its
Subsidiaries and the owner of the Expansion Assets, (5) tolling agreements
between the Company or any of its Subsidiaries and any other Person (the "Toll
Party") with respect to a Facility's steam turbine, (6) granting of conditional
or unconditional real estate rights for the construction,
37
installation or use of Shared Facilities, and (7) Liens on the Shared Facilities
or interests therein to secure any such arrangement; provided, that the Company
will deliver to the Collateral Agent an Officer's Certificate to the effect
that, and, with respect to items (c) and (d) below, a nationally recognized
independent engineer will deliver a report concluding that (subject to customary
assumptions and qualifications):
(a) the ownership, operation, leasing or use of such Shared
Facilities by the owner of Expansion Assets (including the use of the
steam turbine by the Toll Party) cannot unreasonably interfere with or
otherwise materially adversely affect the operation of the Facility;
(b) the owner of the Facility (or another entity on such
owner's behalf) continues to operate and maintain the Facility and the
Shared Facilities;
(c) the costs of operating and maintaining the Shared
Facilities are shared by the owner of the Facility and the owner of the
Expansion Assets or the Toll Party, as applicable, on an equitable
basis;
(d) the Shared Facilities and the entitlements related thereto
are sufficient to fully serve both the Facility and the Expansion
Assets or the Toll Party, as applicable, or, to the extent the Shared
Facilities or the entitlements related thereto are insufficient to
fully serve both the Facility and the Expansion Assets or the Toll
Party, as applicable, the Facility will have priority with respect to
such Shared Facilities or entitlements, so long as the Facility is
operated within the requirements, operating restrictions and other
limitations associated with such Shared Facilities or entitlements;
(e) the holder of the Expansion Assets or the Toll Party, as
applicable, will not have any rights with respect to the sale or other
disposition of, or exercise of remedies with respect to, the Facility,
so long as the Shared Facilities remain subject to the Shared
Facilities Arrangements;
(f) each party waives the defense that an adequate remedy
exists at law and affords the other party (and its lenders or agents on
behalf of such lenders) the right to specifically enforce the
agreement; and
(g) the owner of the Expansion Assets or the Toll Party, as
applicable, cannot prevent a dismantling of the Facility and the
receipt by the holders of the Secured Debt of the proceeds of the sale
thereof, so long as (i) such owner or Toll Party, as applicable, is
given an option to purchase the Shared Facilities at their Fair Market
Value, as determined by appraisal, prior to dismantling of the
Facility, (ii) such owner or Toll Party, as applicable, is given a
right of first refusal to acquire the Shared Facilities in the event
they are offered for sale in connection with the dismantling of the
Facility, and (iii) the owner of the Facility cooperates with the owner
of the Expansion Assets or the Toll Party, as applicable, in
accommodating the continued use and operation of the Expansion Assets
and the Shared Facilities to the maximum extent reasonably possible
notwithstanding the dismantling of the Facility, including providing
reasonable periods for and cooperating in the modification of the
Shared Facilities.
"Sharing Confirmation" means, as to any Series of Secured Debt within a
Class, the written agreement of the holders of such Series of Secured Debt, as
set forth in the indenture or other agreement governing such Series of Secured
Debt, for the enforceable benefit of all holders of each other existing and
future Series of Secured Debt within such Class and each existing and future
Secured Debt Representative therefor to be bound as set forth under Section
10.01.
38
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the Closing Date.
"Special Interest" means all liquidated damages then owing pursuant to
the Registration Rights Agreement.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the documentation governing
such Indebtedness as of the Closing Date, and will not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"Subordinated Indebtedness" means any Affiliate Subordinated
Indebtedness, Working Capital Facility Indebtedness or Third Party Subordinated
Indebtedness.
"Subordination Terms" means the subordination terms set forth in
Exhibit H.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency and
after giving effect to any voting agreement or stockholders' agreement
that effectively transfers voting power) to vote in the election of
directors, managers or trustees of the corporation, association or
other business entity is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of
that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are that Person
or one or more Subsidiaries of that Person (or any combination
thereof).
"Subsidiary Guarantee" or "Note Guarantee" means the Guarantee by each
Guarantor of the Company's payment obligations under this Indenture and on the
Notes, executed pursuant to the provisions of this Indenture.
"Synthetic Lease Obligations" means all monetary obligations of a
Person under (1) a so-called synthetic, off-balance sheet or tax retention lease
or (2) an agreement for the use or possession of any property (whether real,
personal or mixed) creating obligations which do not appear on the balance sheet
of such person, but which, upon the insolvency or bankruptcy of such Person,
would be characterized as Indebtedness of such Person (without regard to
accounting treatment).
"Third Party Subordinated Indebtedness" means Indebtedness loaned to
the Company by a Person other than an Affiliate of the Company; provided, that
such Indebtedness (1) is contractually subordinated in right of payment and in
all other respects to the Notes and all other Secured Obligations in accordance
with the Subordination Terms, including an agreement by the holders of such
Indebtedness not to exercise any remedies until the Secured Obligations
Termination Date, (2) does not provide for mandatory redemption or other
redemption thereof until at least six months after final Stated Maturity of
39
the Notes, (3) provides for payment of interest thereon in the form of cash or
additional Third Party Subordinated Indebtedness having a principal amount equal
to the amount of interest due (i.e., "pay-in-kind"), and (4) is otherwise
subordinated in accordance with the Subordination Terms.
"Third Priority Debt Representative" means:
(1) in the case of the Third Priority Notes, the Third
Priority Trustee; or
(2) in the case of any other Series of Third Priority Lien
Debt, the trustee, agent or representative of the holders of such
Series of Third Priority Lien Debt who maintains the transfer register
for such Series of Third Priority Lien Debt and (a) is appointed as a
Third Priority Debt Representative (for purposes related to the
administration of the Security Documents) pursuant to the indenture or
other agreement governing such Series of Third Priority Lien Debt and
(b) has become a party to the Collateral Trust Agreement by executing a
joinder in the form required under the Collateral Trust Agreement.
"Third Priority Indenture" means the Third Priority Indenture, dated as
of the Closing Date, among the Company, CalGen Finance, the Guarantors and
Wilmington Trust FSB, as trustee.
"Third Priority Lien" means a Lien granted pursuant to a Security
Document to the Collateral Agent upon any property of the Company or any
Guarantor to secure Third Priority Lien Obligations.
"Third Priority Lien Debt" means:
(1) the Third Priority Notes;
(2) any other Indebtedness the net proceeds of which are used
to refund, refinance, replace, defease, discharge or otherwise acquire
or retire any other Third Priority Lien Debt or any First Priority Lien
Debt or Second Priority Lien Debt; and
(3) Hedging Obligations incurred to hedge or manage interest
rate risk with respect to Third Priority Lien Debt having a notional
amount not to exceed the aggregate principal amount of outstanding
Third Priority Lien Debt;
provided, that, in the case of any Indebtedness referred to in clause (2) or (3)
of this definition:
(a) such Indebtedness was permitted to be incurred and so
secured under each applicable Secured Debt Document (or the lenders
under such Indebtedness obtained an Officer's Certificate at the time
of incurrence to the effect that such Indebtedness was permitted to be
incurred and so secured under each applicable Secured Debt Document);
(b) on or before the date on which such Indebtedness is
incurred by the Company or the applicable Subsidiary, such Indebtedness
is designated by the Company, in an Officer's Certificate delivered to
each Third Priority Debt Representative and the Collateral Agent, as
"Third Priority Lien Debt" for the purposes of the Collateral Trust
Agreement and the other Third Priority Lien Documents;
(c) such Indebtedness is governed by an agreement that
includes a Sharing Confirmation, a Lien Priority Confirmation, and an
agreement by the holder of such Indebtedness and the applicable Third
Priority Debt Representative to vote with respect to such Indebtedness
in accordance with Article 4 of the Collateral Trust Agreement; and
40
(d) all requirements set forth in the Collateral Trust
Agreement as to the confirmation, grant or perfection of the Collateral
Agent's Liens to secure such Indebtedness and all Obligations in
respect thereof are satisfied (and the satisfaction of such
requirements will be conclusively established if the Company delivers
to the Collateral Agent an Officer's Certificate stating that such
requirements have been satisfied and that such Indebtedness is "Third
Priority Lien Debt").
"Third Priority Lien Documents" means, collectively, the Third Priority
Notes, the related Subsidiary guarantees, the Third Priority Indenture, each
agreement governing any other Series of Third Priority Lien Debt and all other
agreements governing, securing or relating to any Third Priority Lien
Obligations.
"Third Priority Lien Obligations" means the Third Priority Lien Debt
and all other Obligations in respect of Third Priority Lien Debt.
"Third Priority Notes" means the Third Priority Secured Floating Rate
Notes due 2011 and 11 1/2% Third Priority Secured Notes due 2011, each issued by
the Company and CalGen Finance on the Closing Date under the Third Priority
Indenture.
"Third Priority Trustee" means the trustee under the Third Priority
Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent global Note substantially
in the form of Exhibit A attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing Notes that do not bear the Private Placement
Legend.
"U.S. Person" means a U.S. Person as defined in Rule 902(o) under the
Securities Act.
"Voting Group" means a group of one or more Series of Secured Debt that
casts its votes as a combined group in connection with decisions made by holders
of Secured Debt under the Collateral Trust Agreement.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"WECC Fixed Price Gas Sale and Power Purchase Agreement" means the WECC
Fixed Price Gas Sale and Power Purchase Agreement, dated as of the Closing Date,
among Calpine Energy Services, L.P., the Company and the Facility Owners party
thereto.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
41
(1) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment at
final maturity, in respect of the Indebtedness, by (b) the number of
years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by
(2) the then outstanding principal amount of such
Indebtedness.
"Wholly Owned Subsidiary" of any specified Person means a Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) will at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person.
"Working Capital Facility" means the Working Capital Facility
Agreement, dated as of the Closing Date, among Calpine, CalGen Holdings and the
Company.
"Working Capital Facility Indebtedness" means Indebtedness incurred by
the Company or any of its Subsidiaries under the Working Capital Facility;
provided, that such Indebtedness has the terms (including subordination terms)
set forth in Exhibit I.
"Zion Facility" means the facility described under "Business--Power
Generation--Other--Facility Descriptions--Zion Facility" in the Offering
Memorandum.
Section 1.02 Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction".................................... 4.11
"Asset Sale Offer"......................................... 4.10
"Authentication Order"..................................... 2.02
"Change of Control Offer".................................. 4.15
"Change of Control Payment"................................ 4.15
"Change of Control Payment Date"........................... 4.15
"Covenant Defeasance"...................................... 8.03
"DTC"...................................................... 2.03
"Event of Default"......................................... 6.01
"incur".................................................... 4.09
"Legal Defeasance"......................................... 8.02
"Offer Amount"............................................. 3.09
"Paying Agent"............................................. 2.03
"Payment Default" ......................................... 6.01
"Permitted Debt"........................................... 4.09
"Purchase Date"............................................ 3.09
"Registrar"................................................ 2.03
"Restricted Payments"...................................... 4.07
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
42
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Subsidiary Guarantees means the Issuers
and the Guarantors, respectively, and any successor obligor upon the Notes and
the Subsidiary Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and transactions;
(7) references to sections of or rules under the Securities
Act will be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time; and
(8) references in this Indenture to Sections, Exhibits and
Schedules are to Sections of, and Exhibits and Schedules to, this
Indenture.
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication
will be substantially in the form of Exhibit A or Exhibit B, as applicable. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note will be dated the date of its authentication.
The Notes shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes will constitute, and
are hereby expressly made, a part of this Indenture and the Issuers and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby. However, to the extent any
43
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form will be substantially in
the form of Exhibit A or Exhibit B, as applicable (including the Global Note
Legend thereon and the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Notes issued in definitive form will be substantially in the
form of Exhibit A (but without the Global Note Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Each
Global Note will represent such of the outstanding Notes as will be specified
therein and each shall provide that it represents the aggregate principal amount
of outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby will be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06.
(c) Temporary Global Notes. Notes offered and sold in reliance on
Regulation S will be issued initially in the form of the Regulation S Temporary
Global Note, which will be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its corporate trust office, as
Custodian, and registered in the name of the Depositary or the nominee of the
Depositary for the accounts of designated agents holding on behalf of Euroclear
or Clearstream, duly executed by the Issuers and authenticated by the Trustee as
hereinafter provided. The Restricted Period will be terminated upon the receipt
by the Trustee of (1) a written certificate from the Depositary, together with
copies of certificates from Euroclear and Clearstream, certifying that they have
received certification of non-United States beneficial ownership of 100% of the
aggregate principal amount of the Regulation S Temporary Global Note (except to
the extent of any beneficial owners thereof who acquired an interest therein
during the Restricted Period pursuant to another exemption from registration
under the Securities Act and who will take delivery of a beneficial ownership
interest in a 144A Global Note or an IAI Global Note bearing a Private Placement
Legend, all as contemplated by Section 2.06(b)), and (2) an Officer's
Certificate from the Company stating that such Restricted Period has ended.
Following the termination of the Restricted Period, beneficial
interests in the Regulation S Temporary Global Note will be exchanged for
beneficial interests in Regulation S Permanent Global Notes pursuant to the
Applicable Procedures. Simultaneously with the authentication of Regulation S
Permanent Global Notes, the Trustee will, upon receipt of written directions,
cancel the Regulation S Temporary Global Note. The aggregate principal amount of
the Regulation S Temporary Global Note and the Regulation S Permanent Global
Notes may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee, as the case may be, in
connection with transfers of interest as hereinafter provided.
(d) Euroclear and Clearstream Procedures Applicable. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking" and "Customer Handbook" of Clearstream will be applicable to transfers
of beneficial interests in the Regulation S Temporary Global Note and the
Regulation S Permanent Global Notes that are held by Participants through
Euroclear or Clearstream.
Section 2.02 Execution and Authentication.
One Officer of each Issuer must sign the Notes for the Issuers by
manual or facsimile signature.
44
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of
the Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee will, upon receipt of a written order of the Issuers signed
by one Officer of each Issuer (an "Authentication Order"), authenticate Notes
for original issue up to the aggregate principal amount stated in paragraph 4 of
the Notes. The aggregate principal amount of Notes outstanding at any time may
not exceed such amount except as provided in Section 2.07.
The Trustee may appoint an authenticating agent acceptable to the
Issuers to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Issuers.
Section 2.03 Registrar and Paying Agent.
The Company, on behalf of itself and CalGen Finance, will maintain an
office or agency where Notes may be presented for registration of transfer or
for exchange ("Registrar") and an office or agency where Notes may be presented
for payment ("Paying Agent"). The Registrar will keep a register of the Notes
and of their transfer and exchange. The Issuers may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Issuers may change any Paying Agent or Registrar without
notice to any Holder. The Company will notify the Trustee in writing of the name
and address of any Agent not a party to this Indenture. If the Issuers fail to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such. The Company or any of its Subsidiaries may act as Paying
Agent or Registrar.
The Issuers initially appoint The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Issuers initially appoint the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Issuers will require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, or premium, if any, interest or Special Interest, if any, on, the
Notes, and will notify the Trustee of any default by the Issuers in making any
such payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) will have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee will serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
45
The Trustee will preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company will furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders and the
Company shall otherwise comply with TIA Section 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. A Global Note will be exchangeable by
the Issuers for Definitive Notes if:
(1) the Issuers deliver to the Trustee written notice from the
Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under
the Exchange Act and, in either case, a successor Depositary is not
appointed by the Issuers within 120 days after the date of such notice
from the Depositary;
(2) the Issuers in their sole discretion determine that the
Global Notes (in whole but not in part) should be exchanged for
Definitive Notes and deliver a written notice to such effect to the
Trustee; provided, that in no event shall the Regulation S Temporary
Global Note be exchanged by the Issuers for Definitive Notes prior
to (x) the expiration of the Restricted Period and (y) the receipt
by the Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act; or
(3) there has occurred and is continuing a Default or Event
of Default with respect to the Notes.
Upon the occurrence of any of the preceding events in (1), (2) or (3)
above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee in writing. Global Notes also may be exchanged or replaced,
in whole or in part, as provided in Sections 2.07 and 2.10. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.06(a); however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f).
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes will be subject to restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also will require compliance with
either subparagraph (1) or (2) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend;
provided, however, that prior to the
46
expiration of the Restricted Period, transfers of beneficial interests
in the Regulation S Temporary Global Note may not be made to a U.S.
Person or for the account or benefit of a U.S. Person (other than the
Initial Purchaser). Beneficial interests in any Unrestricted Global
Note may be transferred to Persons who take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note. No
written orders or instructions shall be required to be delivered to the
Registrar to effect the transfers described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(1) above,
the transferor of such beneficial interest must deliver to the
Registrar either:
(A) both:
(i) a written order from a Participant or an
Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing
the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an
amount equal to the beneficial interest to be
transferred or exchanged; and
(ii) instructions given in accordance with
the Applicable Procedures containing information
regarding the Participant account to be credited with
such increase; or
(B) both:
(i) a written order from a Participant or an
Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing
the Depositary to cause to be issued a Definitive
Note in an amount equal to the beneficial interest to
be transferred or exchanged; and
(ii) instructions given by the Depositary to
the Registrar containing information regarding the
Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange
referred to in (1) above;
provided, that in no event shall Definitive Notes be
issued upon the transfer or exchange of beneficial
interests in the Regulation S Temporary Global Note
prior to (A) the expiration of the Restricted Period
and (B) the receipt by the Registrar of any
certificates required pursuant to Rule 903 under the
Securities Act.
Upon consummation of an Exchange Offer by the Company in accordance
with Section 2.06(f) hereof, the requirements of this Section
2.06(b)(2) shall be deemed to have been satisfied upon receipt by the
applicable exchange agent of (i) the instructions contained in the
Letter of Transmittal delivered by the Holder of such beneficial
interests in the Restricted Global Notes or (ii) the instructions
contained in the agent's message received by such exchange agent
through DTC's Automated Tender Offer Procedures, as applicable. Upon
satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture and
the Notes or otherwise applicable under the Securities Act, the Trustee
shall adjust the principal amount of the relevant Global Note(s)
pursuant to Section 2.06(h) hereof.
(3) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof
47
in the form of a beneficial interest in another Restricted Global Note
if the transfer complies with the requirements of Section 2.06(b)(2)
above and the Registrar receives the following:
(A) if the transferee will take delivery in the form
of a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit
C, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form
of a beneficial interest in the Regulation S Temporary Global
Note or the Regulation S Global Note, then the transferor must
deliver a certificate in the form of Exhibit C, including the
certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form
of a beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of Exhibit
C, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in an Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(2) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or
(iii) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit
D, including the certifications in item (1)(a)
thereof; or
(ii) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit
C, including the certifications in item (4) thereof;
48
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has not yet
been issued, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02, the Trustee shall
authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the aggregate principal amount of beneficial
interests transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in
the form of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(1) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit D, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A, a certificate to the
effect set forth in Exhibit C, including the certifications in
item (1) thereof;
(C) if such beneficial interest is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904, a certificate to the effect set
forth in Exhibit C, including the certifications in item (2)
thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144, a certificate
to the effect set forth in Exhibit C, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit C,
including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable;
49
(F) if such beneficial interest is being transferred
to the Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit C, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
Exhibit C, including the certifications in item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.06(h), and the Issuers shall execute and the Trustee shall
authenticate upon receipt of an Authentication Order and deliver to the
Person designated in such order a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions
from the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest in a Restricted Global Note pursuant
to this Section 2.06(c)(1) shall bear the Private Placement Legend and
shall be subject to all restrictions on transfer contained therein.
(2) Beneficial Interests in Regulation S Temporary Global Note
to Definitive Notes. Notwithstanding Sections 2.06(c)(1)(A) and (C), a
beneficial interest in the Regulation S Temporary Global Note may not
be exchanged for a Definitive Note or transferred to a Person who takes
delivery thereof in the form of a Definitive Note prior to (A) the
expiration of the Restricted Period and (B) the receipt by the
Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act, except in the case of a
transfer pursuant to an exemption from the registration requirements of
the Securities Act other than Rule 903 or Rule 904.
(3) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal
that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or
(iii) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
50
(i) if the holder of such beneficial
interest in a Restricted Global Note proposes to exchange such
beneficial interest for a Definitive Note that does not bear
the Private Placement Legend, a certificate from such holder
in the form of Exhibit D, including the certifications in item
(1)(b) thereof; or
(ii) if the holder of such beneficial
interest in a Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the form of a Definitive Note that does not bear
the Private Placement Legend, a certificate from such holder
in the form of Exhibit C, including the certifications in item
(4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(4) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest
in an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive
Note, then, upon satisfaction of the conditions set forth in Section
2.06(b)(2), the Trustee will cause the aggregate principal amount of
the applicable Global Note to be reduced accordingly pursuant to
Section 2.06(h), and the Company will execute and the Trustee will
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive
Note issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(3) will be registered in such name or names and in such
authorized denomination or denominations as the holder of such
beneficial interest requests through instructions to the Registrar from
or through the Depositary and the Participant or Indirect Participant.
The Trustee will deliver such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(3)
will not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(1) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit D, including the certifications in item (2)(b)
thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit C, including
the certifications in item (1) thereof;
51
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904, a certificate to the
effect set forth in Exhibit C, including the certifications in
item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule
144, a certificate to the effect set forth in Exhibit C,
including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs
(B) through (D) above, a certificate to the effect set forth
in Exhibit C, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit C, including
the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set
forth in Exhibit C, including the certifications in item
(3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note,
increase or cause to be increased the aggregate principal
amount of, in the case of clause (A) above, the appropriate
Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (C) above, the
Regulation S Global Note, and in all other cases, the IAI
Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution
of the Exchange Notes or (iii) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive Notes
proposes to exchange such Notes for a beneficial
interest in the Unrestricted Global Note, a
certificate from
52
such Holder in the form of Exhibit D, including the
certifications in item (1)(c) thereof; or
(ii) if the Holder of such Definitive Notes
proposes to transfer such Notes to a Person who shall
take delivery thereof in the form of a beneficial
interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit
C, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.06(d)(2), the Trustee will cancel the
Definitive Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Unrestricted Definitive Note to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee will cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B),
(2)(D) or (3) above at a time when an Unrestricted Global Note has not
yet been issued, the Company will issue and, upon receipt of an
Authentication Order in accordance with Section 2.02, the Trustee will
authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of Definitive Notes so
transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar will register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule
144A under the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit C, including the
certifications in item (1) thereof;
53
(B) if the transfer will be made pursuant to Rule 903
or Rule 904, then the transferor must deliver a certificate in
the form of Exhibit C, including the certifications in item
(2) thereof; and
(C) if the transfer will be made pursuant to any
other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate
in the form of Exhibit C, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution
of the Exchange Notes or (iii) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted
Definitive Note proposes to exchange such Note for an
Unrestricted Definitive Note, a certificate from such
Holder in the form of Exhibit D, including the
certifications in item (1)(d) thereof; or
(ii) if the Holder of such Restricted
Definitive Note proposes to transfer such Note to a
Person who shall take delivery thereof in the form of
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of
Unrestricted Definitive Notes. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
54
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee will authenticate:
(1) one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes accepted for exchange in the
Exchange Offer by Persons that certify in the applicable Letters of
Transmittal that (A) they are not Broker-Dealers, (B) they are not
participating in a distribution of the Exchange Notes and (C) they are
not affiliates (as defined in Rule 144) of the Company; and
(2) Unrestricted Definitive Notes in an aggregate principal
amount equal to the principal amount of the Restricted Definitive Notes
accepted for exchange in the Exchange Offer by Persons that certify in
the applicable Letters of Transmittal that (A) they are not
Broker-Dealers, (B) they are not participating in a distribution of the
Exchange Notes and (C) they are not affiliates (as defined in Rule 144)
of the Company.
Concurrently with the issuance of such Notes, the Trustee will cause
the aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company will execute and the Trustee, upon receipt
of an Authentication Order, will authenticate and deliver to the Persons
designated by the Holders of Definitive Notes so accepted Unrestricted
Definitive Notes in the appropriate principal amount.
(g) Legends. The following legends will appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend. Except as permitted by the
paragraph immediately following the legend below, each Global Note and
each Definitive Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the
following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS NOT A U.S.
PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON
AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME
PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE
144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN
EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON
WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE
904 UNDER THE
55
SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE REGISTRATION OF TRANSFER OF THIS
NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES AT THE TIME OF
TRANSFER OF LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (F) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE,
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO
ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
TRUSTEE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER
THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING
RESTRICTIONS."
Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(4), (c)(3), (c)(4), (d)(2),
(d)(3), (e)(2) or (e)(3) of this Section 2.06 (and all Notes issued in
exchange therefor or substitution thereof) will not bear the Private
Placement Legend.
(2) Global Note Legend. Each Global Note will bear a
legend in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY AND CALGEN FINANCE.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
56
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(3) Regulation S Temporary Global Note Legend. The
Regulation S Temporary Global Note will bear a legend in substantially
the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11. At any
time prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note or for Definitive Notes,
the principal amount of Notes represented by such Global Note will be reduced
accordingly and an endorsement will be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another
Global Note, such other Global Note will be increased accordingly and an
endorsement will be made on such Global Note by the Trustee or by the Depositary
at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the
Issuers will execute and the Trustee will authenticate Global Notes and
Definitive Notes upon receipt of an Authentication Order in accordance
with Section 2.02 or at the Registrar's request.
(2) No service charge will be made to a Holder of a Global
Note or to a Holder of a Definitive Note for any registration of
transfer or exchange, but the Issuers may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05).
(3) The Registrar will not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes will be the valid obligations of the Issuers, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Global Notes or Definitive Notes surrendered upon such registration of
transfer or exchange.
(5) The Issuers will not be required:
57
(A) to issue, to register the transfer of or to
exchange any Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for
redemption under Section 3.02 and ending at the close of
business on the day of selection;
(B) to register the transfer of or to exchange any
Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note
between a record date and the next succeeding interest payment
date.
(6) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Issuers may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Note and for all other purposes, and
none of the Trustee, any Agent, the Company or CalGen Finance shall be
affected by notice to the contrary.
(7) The Trustee will authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02.
(8) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06
to effect a registration of transfer or exchange may be submitted by
facsimile.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Issuers and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Issuers will issue and the Trustee, upon receipt of an
Authentication Order, will authenticate a replacement Note if the Trustee's
requirements hereunder are met. If required by the Trustee or either Issuer, an
indemnity bond must be supplied by the Holder that is sufficient in the judgment
of the Trustee and the Issuers to protect the Issuers, the Trustee, any Agent
and any authenticating agent from any loss that any of them may suffer if a Note
is replaced. The Issuers may charge the applicable Holder for their expenses in
replacing a Note.
Every replacement Note is an additional obligation of the Issuers and
will be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note.
If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section
4.01, it ceases to be outstanding and interest on it ceases to accrue.
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If the Paying Agent (other than the Company, a Subsidiary of the
Company or an Affiliate of any thereof) holds, on a redemption date or maturity
date, money sufficient to pay Notes payable on that date, then on and after that
date such Notes will be deemed to be no longer outstanding and will cease to
accrue interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, will be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee will be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned will be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Issuers may prepare and the Trustee, upon receipt of an Authentication Order,
will authenticate temporary Notes. Temporary Notes will be substantially in the
form of certificated Notes but may have variations that the Issuers consider
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Issuers will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of
this Indenture.
Section 2.11 Cancellation.
The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent will forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
Upon receipt of written directions, the Trustee and no one else will cancel all
Notes surrendered for registration of transfer, exchange, payment, replacement
or cancellation and will destroy canceled Notes (subject to the record retention
requirement of the Exchange Act). Certification of the destruction of all
canceled Notes will be delivered to the Issuers. The Issuers may not issue new
Notes to replace Notes that they have paid or that have been delivered to the
Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it will
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01. The Company will notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Note and the date of
the proposed payment. The Company will fix or cause to be fixed each such
special record date and payment date, provided, that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) will mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
Section 2.13 Same Day Settlement and Payment.
The Issuers will make payments in respect of the Notes represented by
the Global Notes
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(including principal, premium, if any, and interest and Special Interest, if
any) by wire transfer of immediately available funds to the accounts specified
by the Holder of the Global Note. The Issuers will make all payments of
principal, interest and premium and Special Interest, if any, with respect to
Definitive Notes by wire transfer of immediately available funds to the accounts
specified by the Holders of the Definitive Notes or, if no such account is
specified, by mailing a check to each such Holder's registered address.
Because of time zone differences, the securities account of a Euroclear
or Clearstream participant purchasing an interest in a Global Note from a
Participant in DTC will be credited, and any such crediting will be reported to
the relevant Euroclear or Clearstream participant, during the securities
settlement processing day (which must be a business day for Euroclear and
Clearstream) immediately following the settlement date of DTC. DTC has advised
the Issuers that cash received in Euroclear or Clearstream as a result of sales
of interests in a Global Note by or through a Euroclear or Clearstream
participant to a Participant in DTC will be received with value on the
settlement date of DTC but will be available in the relevant Euroclear or
Clearstream cash account only as of the business day for Euroclear or
Clearstream following DTC's settlement date.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at
least 30 days but not more than 60 days before a redemption date, an Officer's
Certificate setting forth:
(1) the clause of this Indenture pursuant to which the
redemption shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee will select Notes for redemption or
purchase on a pro rata basis except:
(1) if the Notes are listed on any national securities
exchange, in compliance with the requirements of the principal national
securities exchange on which the Notes are listed; or
(2) if otherwise required by law.
In the event of partial redemption or purchase by lot, the particular
Notes to be redeemed or purchased will be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption or
purchase date by the Trustee from the outstanding Notes not previously called
for redemption or purchase.
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The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.
Section 3.03 Notice of Redemption.
Subject to the provisions of Section 3.09, at least 30 days but not
more than 60 days before a redemption date, the Company will mail or cause to be
mailed, by first class mail, a notice of redemption to each Holder whose Notes
are to be redeemed at its registered address, except that redemption notices may
be mailed more than 60 days prior to a redemption date if the notice is issued
in connection with a defeasance of the Notes or a satisfaction and discharge of
this Indenture pursuant to Article 8 or 12 of this Indenture. Notices of
redemption may not be conditional.
The notice will identify the Note(s) to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is to be redeemed in part only, the portion of
the principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued upon
cancellation of the original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(6) that, unless the Issuers default in making such redemption
payment, interest on Notes called for redemption ceases to accrue on
and after the redemption date;
(7) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(8) that no representation is made as to the correctness
or accuracy of the CUSIP number, if any, listed in such notice or
printed on the Notes.
At the Company's request, the Trustee will give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company has delivered to the Trustee, at least 45 days prior to the redemption
date, an Officer's Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
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Once notice of redemption is mailed in accordance with Section 3.03,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
Section 3.05 Deposit of Redemption or Purchase Price.
Not less than one Business Day prior to the redemption or purchase
price date, the Issuers will deposit with the Trustee or with the Paying Agent
money sufficient to pay the redemption or purchase price of and accrued interest
and Special Interest, if any, on all Notes to be redeemed or purchased on that
date. The Trustee or the Paying Agent will promptly return to the Issuers any
money deposited with the Trustee or the Paying Agent by the Issuers in excess of
the amounts necessary to pay the redemption or purchase price of, and accrued
interest and Special Interest, if any, on, all Notes to be redeemed or
purchased.
If the Issuers comply with the provisions of the preceding paragraph,
on and after the redemption or purchase date, interest will cease to accrue on
the Notes or the portions of Notes called for redemption or purchase. If a Note
is redeemed or purchased on or after an interest record date but on or prior to
the related interest payment date, then any accrued and unpaid interest shall be
paid. If any Note called for redemption or purchase is not so paid upon
surrender for redemption or purchase because of the failure of the Issuers to
comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption or purchase date until such principal is paid,
and to the extent lawful on any interest not paid on such unpaid principal, in
each case at the rate provided in the Notes and in Section 4.01.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the
Issuers will issue and, upon receipt of an Authentication Order, the Trustee
will authenticate for the Holder, at the expense of the Company, a new Note
equal in principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
Section 3.07 Optional Redemption.
The Issuers may not redeem all or any part of the Notes prior to April
1, 2007. On or after April 1, 2007, the Issuers may redeem all or a part of the
Notes, upon not less than 30 nor more than 60 days prior notice, at the
redemption prices (expressed at percentages of principal amount) set forth below
plus accrued and unpaid interest and Special Interest, if any, on the Notes
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on April 1 of the years indicated below, subject to the rights
of the Holders on the relevant record date to receive interest on the relevant
interest payment date:
Year Percentage
---- ----------
2007................................................. 102.5%
2008, and thereafter................................. 100.0%
Unless the Company defaults in the payment of the redemption price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.
Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Sections 3.01 through 3.06.
Section 3.08 Mandatory Redemption.
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The Issuers are not required to make mandatory redemption or sinking
fund payments with respect to the Notes.
Section 3.09 Offer to Purchase by Application of Net Proceeds.
In the event that, pursuant to Section 4.10, the Issuers are required
or elect to commence an Asset Sale Offer, they will follow the procedures
specified below.
Within 30 days following the receipt by the Company or any of its
Subsidiaries of Net Proceeds from an Asset Sale, Casualty Event or Condemnation
Event, in the case of an Asset Sale Offer described in clause (1) of the second
paragraph of Section 4.10, or upon completion of a prior required Asset Sale
Offer (and any associated mandatory purchase, prepayment or redemption), in the
case of an Asset Sale Offer described in clause (2) or (3) of the second
paragraph of Section 4.10, the Issuers will mail a notice to the Trustee and
each Holder regarding such Asset Sale Offer. The notice will contain all
instructions and materials necessary to enable the Holders to tender Notes
pursuant to the Asset Sale Offer. The notice, which will govern the terms of the
Asset Sale Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to
this Section 3.09 and Section 4.10;
(2) the amount of Net Proceeds being offered to purchase Notes
and other First Priority Lien Obligations (the "Offer Amount"), the
purchase price and the date on which the purchase will be made (the
"Purchase Date"), which date will be no earlier than 30 and no later
than 60 days from the date the notice is mailed;
(3) that any Note not tendered or accepted for payment
will continue to accrue interest;
(4) that, unless the Issuers default in making such payment,
any Note accepted for payment pursuant to the Asset Sale Offer will
cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer may elect to have Notes purchased in integral
multiples of $1,000 only;
(6) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, or transfer by book-entry transfer, to the Company,
the Depositary or the Paying Agent at the address specified in the
notice at least three Business Days before the Purchase Date;
(7) that Holders will be entitled to withdraw their election
if the Company, the Depositary or the Paying Agent, as the case may be,
receives, not later than two Business Days before the Purchase Date, a
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Note the Holder delivered for purchase and
a statement that such Holder is withdrawing his election to have such
Note purchased;
(8) that, if the aggregate principal amount of Notes and other
First Priority Lien Obligations tendered in the Asset Sale Offer (or
required to be purchased, prepaid or redeemed) exceeds the Offer
Amount, the Company will select the Notes and other First Priority Lien
Obligations to be purchased, prepaid or redeemed on a pro rata basis
based on the principal amount of Notes and such other First Priority
Lien Obligations tendered (or required to be
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purchased, prepaid or redeemed), with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of
$1,000, or integral multiples thereof, will be purchased, prepaid or
redeemed; and
(9) that Holders whose Notes were purchased only in part will
be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Issuers will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes and other First Priority Lien Obligations or portions thereof
tendered pursuant to the Asset Sale Offer (or required to be purchased, prepaid
or redeemed), or if less than the Offer Amount has been tendered (or is required
to be purchased, prepaid or redeemed), all Notes and other First Priority Lien
Obligations tendered (or required to be purchased, prepaid or redeemed), and
will deliver or cause to be delivered to the Trustee the Notes properly accepted
together with an Officer's Certificate stating that such Notes or portions
thereof were accepted for payment by the Issuers in accordance with the terms of
this Section 3.09. Payment for any Notes so purchased will be made in the same
manner as interest payments are made. The Issuers, the Depositary or the Paying
Agent, as the case may be, will promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Issuers for purchase, and the Issuers will promptly issue a new Note, and
the Trustee, upon written request from the Issuers, will authenticate and mail
or deliver (or cause to be transferred by book entry) such new Note to such
Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Issuers to the Holder thereof. The Issuers will publicly announce the
results of the Asset Sale Offer on the Purchase Date.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Special Interest, if any, will be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
The Issuers will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Section 3.09 or Section 4.10, the Issuers will comply with the applicable
securities laws and regulations and will not be deemed to have breached their
obligations under this Section 3.09 or Section 4.10 by virtue of such
compliance.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06.
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes.
The Company will pay or cause to be paid the principal of, and premium,
if any, interest and Special Interest, if any, on, the Notes on the dates and in
the manner provided in the Notes. Principal, premium, if any, interest and
Special Interest, if any, will be considered paid on the date due if the Paying
Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m.
Eastern Time on the due date money deposited by the Company in immediately
available funds and designated for and sufficient
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to pay all principal, premium, if any, and interest and Special Interest, if
any, then due. The Company will pay all Special Interest, if any, in the same
manner on the dates and in the amounts set forth in the Registration Rights
Agreement.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Special Interest (without regard to any applicable grace period) at the same
rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
fails to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission will in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03.
Section 4.03 Reports.
Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company will furnish to the Holders or
cause the Trustee to furnish to the Holders, within the time periods specified
in the SEC's rules and regulations:
(1) all quarterly and annual reports that would be required to
be filed with the SEC on Forms 10-Q and 10-K if the Company were
required to file such reports; and
(2) all current reports that would be required to be filed
with the SEC on Form 8-K if the Company were required to file such
reports.
All such reports will be prepared in all material respects in accordance with
all of the rules and regulations applicable to such reports. Each annual report
on Form 10-K will include a report on the Company's consolidated financial
statements by the Company's certified independent accountants. In addition,
following consummation of the Exchange Offer contemplated by the Registration
Rights Agreement, the Company will file a copy of each of the reports referred
to in clauses (1) and (2) above with the SEC for public availability within the
time periods specified in the rules and regulations applicable to such reports
(unless the SEC will not accept such a filing or the Company has elected to pay
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Special Interest in lieu of complying with the registration requirements of the
Registration Rights Agreement) and will post the reports on its website within
those time periods.
If the Company is not subject to the periodic reporting requirements of
the Exchange Act for any reason, the Company will nevertheless file the reports
specified in the preceding paragraphs of this covenant with the SEC within the
time periods specified above unless the SEC will not accept such a filing or the
Company has elected to pay Special Interest in lieu of complying with the
registration requirements of the Registration Rights Agreement. However, if the
Company does not file any such reports with the SEC, the Company will post the
reports referred to in the preceding paragraphs on its website within the time
periods that would apply if the Company were required to file those reports with
the SEC.
In addition, the Company and the Guarantors agree that, for so long as
any Notes remain outstanding, if at any time they are not required to file with
the SEC the reports required by the preceding paragraphs, they will furnish to
the Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
Section 4.04 Compliance Certificate.
(a) The Issuers and each Guarantor (to the extent that such Guarantor
is so required under the TIA) will deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officer's Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officer with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture and the other Notes Documents, and further
stating, as to the Officer signing such certificate, that to the best of his or
her knowledge the Company has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and the other Notes Documents and is
not in default in the performance or observance of any of the terms, provisions
and conditions of this Indenture or any other Note Document (or, if a Default or
Event of Default has occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest or Special Interest, if any,
on the Notes is prohibited or if such event has occurred, a description of the
event and what action the Company is taking or proposes to take with respect
thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(1) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 or, if any such violation has occurred,
specifying the nature and period of existence thereof, it being understood that
such accountants shall not be liable directly or indirectly to any Person for
any failure to obtain knowledge of any such violation.
(c) So long as any of the Notes are outstanding, the Company will
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officer's Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
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Section 4.05 Taxes.
The Company will pay, and will cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06 Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.07 Restricted Payments.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly:
(1) (a) declare or pay any dividend or make any other payment
or distribution on account of the Company's Equity Interests (including
any payment in connection with any merger or consolidation involving
the Company) or to the direct or indirect holders of the Company's
Equity Interests in their capacity as such, including Permitted Tax
Payments (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or dividends
or distributions payable to the Company or a Guarantor), or (b) pay any
Major Maintenance Expenses;
(2) purchase, redeem or otherwise acquire or retire for value
(including in connection with any merger or consolidation involving the
Company) any Equity Interests of the Company;
(3) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any
Subordinated Indebtedness or any other Indebtedness of the Company or
any of its Subsidiaries that is contractually subordinated to the
Secured Obligations (excluding any intercompany Indebtedness between or
among the Company and any of the Guarantors); or
(4) make any Restricted Investment;
(all such payments and other actions set forth in these clauses (1) through (4)
above being collectively referred to as "Restricted Payments"), unless:
(A) such Restricted Payment is made from Excess Cash
Flow generated since the Closing Date;
(B) no Default or Event of Default has occurred and
is continuing or would occur as a consequence of such
Restricted Payment (other than any Default or Event of Default
that is cured as a result of such Restricted Payment); and
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(C) at the time of making any such Restricted Payment
that is not a payment on or with respect to, or a purchase,
redemption, defeasance or other acquisition or retirement for
value of, Subordinated Indebtedness, all amounts then due
under all Subordinated Indebtedness have been paid in full; or
(5) use the proceeds of any Indebtedness under any revolving
Credit Facility which is First Priority Lien Debt to prepay, repay or
redeem the principal of any Second Priority Lien Debt or Third Priority
Lien Debt.
The amount of all Restricted Payments (other than cash) will be the
Fair Market Value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or the applicable
Subsidiary, as the case may be, pursuant to the Restricted Payment.
Section 4.08 Dividend and Other Payment Restrictions Affecting
Subsidiaries.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Subsidiary of the
Company to:
(1) pay dividends or make any other distributions on its
Capital Stock to the Company or any of its Subsidiaries, or with
respect to any other interest or participation in, or measured by, its
profits, or pay any indebtedness owed to the Company or any of its
Subsidiaries;
(2) make loans or advances to the Company or any of its
Subsidiaries; or
(3) transfer any of its properties or assets to the Company or
any of its Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) this Indenture, the Notes and the Subsidiary Guarantees,
the Second Priority Notes and the related Subsidiary guarantees, the
Second Priority Indenture, the Third Priority Notes and the related
Subsidiary guarantees and the Third Priority Indenture;
(2) agreements governing Credit Facilities as in effect on the
Closing Date (including the First Priority Term Loan Agreement, the
Second Priority Term Loan Agreement and the Revolving Loan Agreement)
and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of those
agreements; provided, that the amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or
refinancings are not materially more restrictive, taken as a whole,
with respect to such dividend and other payment restrictions than those
contained in those agreements on the Closing Date;
(3) any applicable law, rule, regulation or order;
(4) customary non-assignment provisions in contracts,
agreements, leases, permits or licenses entered into or issued in the
ordinary course of business and consistent with past practices;
68
(5) purchase money obligations for property acquired in the
ordinary course of business and Capital Lease Obligations that impose
restrictions on the property purchased or leased of the nature
described in clauses (1) and (3) of the preceding paragraph;
(6) any agreement for the sale or other disposition of a
Subsidiary that restricts distributions by that Subsidiary pending the
sale or other disposition;
(7) Permitted Refinancing Indebtedness; provided, that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as
a whole, than those contained in the agreements governing the
Indebtedness being refinanced;
(8) Liens securing Indebtedness otherwise permitted to be
incurred under the provisions of the covenant contained in Section 4.12
that limit the right of the debtor to dispose of the assets subject to
such Liens or to use the proceeds of any such disposition;
(9) provisions limiting or prohibiting the disposition or
distribution of assets or property in joint venture agreements, asset
sale agreements, sale-leaseback agreements, stock sale agreements and
other similar agreements entered into with the approval of the
Company's Board of Directors, which limitation or prohibition is
applicable only to the assets that are the subject of such agreements;
(10) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary
course of business; and
(11) provisions restricting or encumbering the sale or other
disposition of Expansion Assets or the payment of dividends,
distributions or similar payments made from cash flow derived
exclusively from Expansion Assets, in each case pursuant to the terms
of any Expansion Debt incurred pursuant to clause (3) of the definition
of Permitted Debt; provided, that such encumbrance or restriction will
not materially adversely affect the Company's ability to meet its
obligations on the Notes when due, and, in the written opinion of the
president, chief operating officer or chief financial officer of the
Company, is required in order to obtain such Expansion Debt and is
customary for financings of such type.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Equity.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), and the
Company will not issue any Disqualified Stock and will not permit any of its
Subsidiaries to issue any shares of preferred equity.
The preceding paragraph will not prohibit the incurrence of any of the
following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Company (and the guarantee by its
Subsidiaries) of:
(a) Indebtedness and letters of credit under Credit
Facilities in an aggregate principal amount at any one time
outstanding under this clause (1)(a) (with letters of credit
being deemed to have a principal amount equal to the maximum
potential liability of the Company and its Subsidiaries
thereunder) not to exceed $800.0 million, less the
69
aggregate amount of all Net Proceeds of Asset Sales, Casualty
Events or Condemnation Events applied by the Company or any of
its Subsidiaries since the Closing Date to repay any term
Indebtedness under any such Credit Facility or to repay, or
cash collateralize letters of credit under, any revolving
Indebtedness under any such Credit Facility and effect a
corresponding commitment reduction thereunder; and
(b) Indebtedness and letters of credit under Credit
Facilities in an aggregate principal amount outstanding under
this clause (1)(b) (with letters of credit being deemed to
have a principal amount equal to the maximum potential
liability of the Company and its Subsidiaries thereunder) not
to exceed $100.0 million, less the aggregate amount of all Net
Proceeds of Asset Sales, Casualty Events and Condemnation
Events applied by the Company or any of its Subsidiaries since
the Closing Date to repay any term Indebtedness under any such
Credit Facility or to repay, or cash collateralize letters of
credit under, any revolving Indebtedness under any such Credit
Facility and effect a corresponding commitment reduction
thereunder;
(2) the incurrence by the Issuers and the Guarantors of
Indebtedness represented by the Notes, the Second Priority Notes and
the Third Priority Notes to be issued on the Closing Date, the related
Subsidiary guarantees and the other Obligations incurred under the
Indentures on the Closing Date, and the Exchange Notes and the related
Subsidiary guarantees to be issued pursuant to the Registration Rights
Agreement;
(3) the incurrence by the Company or any of its Subsidiaries
of Expansion Debt; provided, that:
(a) any Expansion Debt incurred by the Excluded
Subsidiary is recourse only to the Expansion Assets financed
with such Expansion Debt and to other Expansion Assets owned
by the Excluded Subsidiary (including any rights of the
Excluded Subsidiary under Shared Facilities Arrangements);
(b) if the Fixed Charge Coverage Ratio for the
Company's most recently ended four full fiscal quarters for
which internal financial statements are available immediately
preceding the date on which the Expansion Debt is incurred
would have been at least 2.0 to 1.0, determined on a Pro Forma
basis as if the Expansion Debt had been incurred at the
beginning of such period and the proceeds therefrom had been
applied as intended to be applied (but without giving effect
to the completion of any construction projects unless actual
completion has been achieved), at least 25% of the cost of
such Expansion Assets is financed with Equity Contributions or
the proceeds of Perpetual Preferred Stock or Affiliate
Subordinated Indebtedness;
(c) if the Fixed Charge Coverage Ratio for the
Company's most recently ended four full fiscal quarters for
which internal financial statements are available immediately
preceding the date on which the Expansion Debt is incurred
would have been less than 2.0 to 1.0, determined on a Pro
Forma basis as if the Expansion Debt had been incurred at the
beginning of such period and the proceeds therefrom had been
applied as intended to be applied (but without giving effect
to the completion of any construction projects unless actual
completion has been achieved),
(i) at least 40% of the cost of such
Expansion Assets is financed with Equity
Contributions or the proceeds of Perpetual Preferred
Stock or Affiliate Subordinated Indebtedness, and
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(ii) after giving effect to such incurrence,
the amount of Expansion Debt incurred pursuant to
this clause (3), together with the aggregate amount
of all other Expansion Debt then outstanding,
including all Permitted Refinancing Indebtedness
incurred to renew, refund, refinance, replace,
defease or discharge any Expansion Debt incurred
pursuant to this clause (3), does not exceed $250.0
million;
(4) the incurrence by the Company or any of its Subsidiaries
of Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to refund, refinance or replace,
Indebtedness (other than intercompany Indebtedness) that was permitted
by this Indenture to be incurred under clauses (2), (3), (4) or (10) of
this paragraph;
(5) the incurrence by the Company or any Guarantor of
intercompany Indebtedness between or among the Company and any
Guarantor that is subordinated in right of payment to all Secured
Obligations pursuant to a customary subordination agreement delivered
to the Collateral Agent (together with all other documents or
instruments required to effect such subordination and any other
documents reasonably requested by the Collateral Agent in connection
therewith), and is not secured other than by unperfected security
interests; provided, however, that (i) any subsequent issuance or
transfer of Equity Interests that results in any such Indebtedness
being held by a Person other than the Company or a Guarantor and (ii)
any sale or other transfer of any such Indebtedness to a Person that is
not either the Company or a Guarantor will be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or such
Guarantor, as the case may be, that was not permitted by this clause
(5); and provided, further, that any such intercompany Indebtedness
must be included in the Collateral;
(6) the incurrence by the Company or any of its Subsidiaries
of Hedging Obligations, in connection with Permitted Debt or otherwise,
in the ordinary course of business and not for speculative purposes;
provided, that (a) such Hedging Obligations have tenors that expire on
or prior to the maturity date (or other expiration) of the underlying
obligation being hedged, and (b) any such Hedging Obligations hedging
or managing interest rate risk with respect to (i) First Priority Lien
Debt have tenors that expire on or prior to the Stated Maturity of the
Notes, (ii) Second Priority Lien Debt have tenors that expire on or
prior to the Stated Maturity of the Second Priority Notes, or (iii)
Third Priority Lien Debt have tenors that expire on or prior to the
Stated Maturity of the Third Priority Notes;
(7) the incurrence by the Company or any of its Subsidiaries
of Indebtedness in respect of workers' compensation claims,
self-insurance obligations, bankers' acceptances, and performance and
surety bonds in the ordinary course of business;
(8) the incurrence by the Company or any of its Subsidiaries
of Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn
against insufficient funds, so long as such Indebtedness is covered
within five Business Days;
(9) the incurrence by the Company of (a) Affiliate
Subordinated Indebtedness in an aggregate principal amount not to
exceed $250.0 million at any one time outstanding and (b) Working
Capital Facility Indebtedness in an aggregate principal amount not to
exceed $750.0 million at any one time outstanding;
(10) the incurrence by the Company of Third Party Subordinated
Indebtedness; provided, that:
71
(a) the net proceeds of the Third Party Subordinated
Indebtedness are applied:
(i) to acquire all or substantially all of
the assets of, or any Equity Interests in, a business
that constitutes a Permitted Business; provided, that
in the case of an acquisition of Equity Interests,
the business is or becomes a Subsidiary of the
Company and a Guarantor concurrently with such
acquisition;
(ii) to make a capital expenditure;
(iii) to acquire other assets that are not
classified as current assets under GAAP and that are
used or useful in a Permitted Business; or
(iv) any combination of the foregoing; and
(b) the Fixed Charge Coverage Ratio for the Company's
most recently ended four full fiscal quarters for which
internal financial statements are available immediately
preceding the date on which the Third Party Subordinated
Indebtedness is incurred would have been at least 2.0 to 1.0,
determined on a Pro Forma basis as if the Third Party
Subordinated Indebtedness had been incurred at the beginning
of such period and the proceeds therefrom had been applied as
intended to be applied (but without giving effect to the
completion of any construction projects unless actual
completion has been achieved).
The Company will not incur, and will not permit any Subsidiary to
incur, any Indebtedness (including Permitted Debt) that is contractually
subordinated in right of payment to any other Indebtedness of the Company or
such Subsidiary unless such Indebtedness is also contractually subordinated in
right of payment to the Secured Obligations on substantially identical terms or
on terms that are more favorable to the holders of the Secured Obligations;
provided, however, that no Indebtedness will be deemed to be contractually
subordinated in right of payment to any other Indebtedness of the Company or any
of its Subsidiaries solely by virtue of being unsecured or by virtue of being
secured on a junior basis.
For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (1) through (10) above,
the Company will be permitted to classify such item of Indebtedness on the date
of its incurrence, or later reclassify all or a portion of such item of
Indebtedness, in any manner that complies with this Section 4.09. The accrual of
interest, the accretion or amortization of original issue discount, the payment
of interest on any Indebtedness in the form of additional Indebtedness with the
same terms, and the payment of dividends on Disqualified Stock in the form of
additional shares of the same class of Disqualified Stock will not be deemed to
be an incurrence of Indebtedness or an issuance of Disqualified Stock for
purposes of this covenant. Notwithstanding any other provision of this covenant,
the maximum amount of Indebtedness that the Company or any Subsidiary may incur
pursuant to this covenant shall not be deemed to be exceeded solely as a result
of fluctuations in exchange rates or currency values.
Section 4.10 Asset Sales.
The Company will not, and will not permit any of its Subsidiaries to,
consummate any Asset Sale unless:
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(1) except with respect to an Asset Sale made pursuant to an
Existing Purchase Option, the Company (or any of its Subsidiaries, as
the case may be) receives consideration at the time of the Asset Sale
at least equal to the Fair Market Value of the assets or Equity
Interests issued or sold or otherwise disposed of;
(2) at least 90% of the consideration received in the Asset
Sale by the Company or such Subsidiary is in the form of cash. For
purposes of this provision, each of the following will be deemed to be
cash:
(a) any liabilities, as shown on the Company's most
recent consolidated balance sheet, of the Company or any of
its Subsidiaries (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes
or any Subsidiary Guarantee) that are assumed by the
transferee of any such assets pursuant to a customary novation
or similar agreement that releases the Company or such
Subsidiary from further liability;
(b) any securities, notes or other obligations
received by the Company or any such Subsidiary from such
transferee that are promptly, subject to ordinary settlement
periods, converted by the Company or such Subsidiary into
cash, to the extent of the cash received in that conversion;
and
(c) in connection with the exercise by a purchaser of
an Existing Purchase Option, any amount owed by the Company or
the applicable Subsidiary to the purchaser under the agreement
containing such Existing Purchase Option that is set off by
the purchaser against the purchase price;
(3) if the assets disposed of in such Asset Sale include any
component of a Facility that is necessary for the operation of such
Facility, the Asset Sale involves the disposition of such Facility as a
whole; and
(4) if the Asset Sale involves the sale of a Facility or all
or substantially all the assets of a Facility, (a) such Asset Sale is
to a Person other than an Affiliate of the Company, and (b) all
necessary amendments are made to those Major Project Documents
applicable to such Facility to remove such Facility from the scope of
such Major Project Documents.
The Company and its Subsidiaries will be required to use the Net
Proceeds from any Asset Sale, Casualty Event or Condemnation Event to make an
offer (an "Asset Sale Offer"):
(1) first, to all holders of Notes and all holders of
other First Priority Lien Obligations (to the extent required
under the applicable First Priority Lien Documents) to
purchase, prepay or redeem the maximum principal amount of
Notes and such other First Priority Lien Obligations that may
be purchased, prepaid or redeemed out of such Net Proceeds
(taking into account any mandatory purchase, prepayment or
redemption of First Priority Lien Obligations required under
any First Priority Lien Document);
(2) second, if any such Net Proceeds remain after the
offer to holders of First Priority Lien Obligations (and any
mandatory purchase, prepayment or redemption of First Priority
Lien Obligations) in accordance with clause (1) above, to all
holders of Second Priority Notes and all holders of other
Second Priority Lien Obligations (to the extent required under
the applicable Second Priority Lien Documents) to purchase,
prepay or redeem the maximum principal amount of Second
Priority Notes and such other Second
73
Priority Lien Obligations that may be purchased, prepaid or
redeemed out of such remaining Net Proceeds (taking into
account any mandatory purchase, prepayment or redemption of
Second Priority Lien Obligations required under any Second
Priority Lien Document); and
(3) third, if any such Net Proceeds remain after the
offer to holders of First Priority Lien Obligations and Second
Priority Lien Obligations (and any mandatory purchase,
prepayment or redemption of First Priority Lien Obligations and
Second Priority Lien Obligations) in accordance with clauses
(1) and (2) above, to all holders of Third Priority Notes and
all holders of other Third Priority Lien Obligations (to the
extent required under the applicable Third Priority Lien
Documents) to purchase, prepay or redeem the maximum principal
amount of Third Priority Notes and such other Third Priority
Lien Obligations that may be purchased, prepaid or redeemed out
of such remaining Net Proceeds (taking into account any
mandatory purchase, prepayment or redemption of Third Priority
Lien Obligations required under any Third Priority Lien
Document).
The Issuers may, at their sole option, make an Asset Sale Offer in
accordance with the priorities described above with the net proceeds from any
sale, lease, conveyance or other disposition of any assets or rights not
constituting an Asset Sale. The offer price in any Asset Sale Offer will be
equal to 100% of the principal amount plus accrued and unpaid interest and
Special Interest, if any, to the date of purchase, and will be payable in cash.
If any of such Net Proceeds remain after consummation of the Asset Sale Offer,
the Company and its Subsidiaries may use those excess Net Proceeds for any
purpose not otherwise prohibited by this Indenture, including the making of
Restricted Payments in accordance with Section 4.07. If the aggregate principal
amount of Notes and other First Priority Lien Obligations tendered into such
Asset Sale Offer or required to be purchased, prepaid or redeemed exceeds the
amount of Net Proceeds available therefor, the Issuers will purchase, prepay or
redeem Notes and such other First Priority Lien Obligations on a pro rata basis
based on the principal amount of Notes and such other First Priority Lien
Obligations tendered (or required to be purchased, prepaid or redeemed), with
such adjustments as may be deemed appropriate by the Company so that only Notes
in denominations of $1,000, or integral multiples thereof, will be purchased,
prepaid or redeemed. The Issuers will comply with the procedures set forth in
Section 3.09 with respect to any Asset Sale Offer.
Section 4.11 Transactions with Affiliates.
The Company will not, and will not permit any of its Subsidiaries to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate of the Company
(each, an "Affiliate Transaction"), unless:
(1) the Affiliate Transaction, taken as a whole with all other
related Affiliate Transactions, is on terms that are no less favorable
to the Company and its Subsidiaries, taken as a whole, than those that
would have been obtained in a comparable transaction by the Company or
such Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee (other than with
respect to a Shared Facilities Arrangement between or among the Company
and/or any of its Subsidiaries):
(a) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $10.0 million but less than or
74
equal to $25.0 million, a resolution of the Board of Directors
set forth in an Officer's Certificate certifying that such
Affiliate Transaction complies with this covenant and that
such Affiliate Transaction has been approved by a majority of
the Board of Directors; and
(b) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $25.0 million, a positive opinion
as to the Fair Market Value of such Affiliate Transaction
issued by an accounting, appraisal or investment banking firm
of national standing.
The following items will not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of the prior paragraph:
(1) any employment agreement, employee benefit plan, officer
and director indemnification agreement or any similar arrangement
entered into by the Company or any of its Subsidiaries in the ordinary
course of business;
(2) transactions between or among the Company and/or any of
the Guarantors (other than Shared Facility Arrangements);
(3) transactions with a Person that is an Affiliate of the
Company (but not a Subsidiary of the Company) solely because the
Company owns, directly or through a Subsidiary, an Equity Interest in,
or controls, such Person;
(4) payment of reasonable directors' fees to Persons who are
not otherwise Affiliates of the Company;
(5) any issuance of Equity Interests (other than Disqualified
Stock) of the Company to Affiliates of the Company; provided, that such
Equity Interests are included in the Collateral;
(6) Restricted Payments that do not violate Section 4.07;
(7) loans or advances to employees in the ordinary course of
business not to exceed $1.0 million in the aggregate at any one time
outstanding;
(8) Permitted Tax Payments;
(9) transactions under or pursuant to written agreements with
Affiliates of the Company in place as of the Closing Date or any
amendment or modification thereto, so long as any such amendment or
modification meets the requirements of clause (10) or (11) of this
paragraph;
(10) any amendments or modifications of, or waivers under, any
written agreement described under clause (9) of this paragraph that is
not a Major Project Document; provided, that no such amendment,
modification or waiver alters any such agreement in a manner that is
materially adverse to the Holders;
(11) any amendments or modifications of, or waivers under, any
Major Project Document, which are permitted by Section 4.13 and are on
terms that are no less favorable to the Company or its relevant
Subsidiary (as certified to the Trustee in an Officer's Certificate)
than those that would have been obtained in a comparable transaction by
the Company or such Subsidiary with an unrelated Person; and
75
(12) any agreement to do any of the foregoing.
Section 4.12 Liens.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Lien of any
kind on any asset now owned or hereafter acquired, except Permitted Liens.
Section 4.13 Business Activities.
The Company will not, and will not permit any of its Subsidiaries to,
engage in any business other than Permitted Businesses, except to such extent as
would not be material to the Company and its Subsidiaries taken as a whole.
The Company will, and will cause its Subsidiaries to, perform all their
obligations under the Major Project Documents, and the Company will not, and
will not permit any of its Subsidiaries to, terminate, amend or otherwise
modify, or consent to any termination, amendment or modification of, or grant
any waiver under, any Major Project Document, unless any failure to so perform
or any such termination, amendment, modification or waiver would not, when taken
together with all other such failures to perform, terminations, amendments,
modifications and waivers since the Closing Date, be Materially Adverse, as
evidenced by a certificate of the chief financial officer of the Company;
provided, however, that the provisions of this paragraph will not apply to any
amendment, modification or termination of any Major Project Document required
under this Indenture in connection with an Asset Sale.
The Company will, and will cause its Subsidiaries to, obtain and
maintain all permits and approvals necessary for the construction and operation
of the Facilities, including applicable exemptions from PUHCA, unless the
failure to do so would not reasonably be expected to have a Material Adverse
Effect.
The Company will not, and will not permit any of its Subsidiaries to,
use or dispose of any hazardous materials or allow any hazardous materials to be
brought onto or stored or used on or transported to or released from the
Facilities, other than in accordance with prudent industry practices and in
compliance with all applicable environmental laws, except to the extent such
non-compliance, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
Section 4.14 Corporate Existence.
Subject to Article 5, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect:
(1) its corporate existence, and the corporate, partnership or
other existence of each of its Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from
time to time) of the Company or any such Subsidiary; and
(2) the rights (charter and statutory), licenses and
franchises of the Company and its Subsidiaries; provided, however, that
the Company will not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any of
its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, and
that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
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Section 4.15 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Issuers will make
an offer (a "Change of Control Offer") to each Holder to repurchase all or any
part (equal to $1,000 or an integral multiple of $1,000) of such Holder's Notes
at a purchase price in cash equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and Special Interest, if any, on the
Notes repurchased, to, but excluding, the date of purchase (the "Change of
Control Payment"), subject to the rights of Holders on the relevant record date
to receive interest due on the relevant interest payment date. Within 30 days
following any Change of Control, the Issuers will mail a notice to each Holder
describing the transaction or transactions that constitute the Change of Control
and stating:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.15 and that all Notes tendered will be accepted for
payment;
(2) the purchase price and the purchase date, which shall be
no earlier than 30 days and no later than 60 days from the date such
notice is mailed (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue
interest;
(4) that, unless the Issuers default in the payment of the
Change of Control Payment, all Notes accepted for payment pursuant to
the Change of Control Offer will cease to accrue interest after the
Change of Control Payment Date;
(5) that Holders electing to have any Notes purchased pursuant
to a Change of Control Offer will be required to surrender the Notes,
with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Notes completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than the close of business on
the second Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of Notes delivered for
purchase, and a statement that such Holder is withdrawing his election
to have the Notes purchased; and
(7) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral multiple thereof.
The Issuers will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change in Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Sections 4.15, the Issuers will comply with the applicable
securities laws and regulations and will not be deemed to have breached their
obligations under this Section 4.15 by virtue of such compliance.
(b) On the Change of Control Payment Date, the Issuers will, to the
extent lawful:
(1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer;
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(2) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions of Notes
properly tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes
so properly accepted together with an Officer's Certificate stating the
aggregate principal amount of Notes or portions of Notes being
purchased by the Issuers.
The Paying Agent will promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee, at the
written request of the Company, will promptly authenticate and mail (or cause to
be transferred by book entry) to each Holder a new Note equal in principal
amount to any unpurchased portion of the Notes surrendered, if any; provided,
that each new Note will be in a principal amount of $1,000 or an integral
multiple thereof.
The Issuers will publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.
The provisions described above that require the Issuers to make a
Change of Control Offer following a Change in Control will be applicable whether
or not any other provisions of this Indenture are applicable. Except as
described above with respect to a Change in Control, this Indenture does not
contain provisions that permit the Holders to require that the Issuers
repurchase or redeem the Notes in event of a takeover, recapitalization or
similar transaction.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Issuers will not be required to make a Change of Control Offer upon a Change of
Control if (1) a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.15 and purchases all Notes properly tendered and not withdrawn under
the Change of Control Offer, or (2) notice of redemption has been given pursuant
to Section 3.07, unless and until there is a default in payment of the
applicable redemption price.
Section 4.16 Limitation on Issuances and Sales of Equity Interests in
Subsidiaries.
The Company will not, and will not permit any of its Subsidiaries to,
transfer, convey, sell, lease or otherwise dispose of any Equity Interests in
any Subsidiary of the Company to any Person (other than the Company or a
Guarantor), unless:
(1) such transfer, conveyance, sale, lease or other
disposition is of all the Equity Interests in such Subsidiary; and
(2) the Net Proceeds from such transfer, conveyance, sale,
lease or other disposition are applied in accordance with Section 4.10.
In addition, the Company will not permit any Subsidiary of the Company
to issue any of its Equity Interests (other than, if necessary, shares of its
Capital Stock constituting directors' qualifying shares) to any Person other
than to the Company or a Guarantor.
Section 4.17 Payments for Consent.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of any Note Document unless such
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consideration is offered to be paid and is paid to all Holders that consent,
waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
Section 4.18 Restrictions on Activities of CalGen Finance.
CalGen Finance will not hold any material assets, become liable for any
material obligations or engage in any significant business activities; provided,
that CalGen Finance may be a co-obligor or guarantor with respect to
Indebtedness if the Company is an obligor on such Indebtedness and the net
proceeds of such Indebtedness are received by the Company, CalGen Finance or one
or more of the Company's other Subsidiaries.
Section 4.19 Deposit of Revenues.
The Company will, and will cause its Subsidiaries to, deposit all
revenues received by the Company and its Subsidiaries, within 10 Business Days
of receipt thereof, in the "Revenue Account" established under the Control
Agreement. Notwithstanding the foregoing, Excess Cash Flow may be distributed in
accordance with Section 4.07.
Section 4.20 Additional Subsidiaries.
If the Company or any of its Subsidiaries acquires or creates another
Subsidiary after the Closing Date, then (1) that newly acquired or created
Subsidiary will become a Guarantor and execute a supplemental indenture in the
form of Exhibit G and deliver an Opinion of Counsel reasonably satisfactory to
the Trustee within 30 days of the date on which it was acquired or created, and
(2) all real and personal property of that Subsidiary will become part of the
Collateral within 30 days of the date on which that Subsidiary was acquired or
created pursuant to documentation (including Security Documents, financing
statements, opinions and other documents) reasonably satisfactory to the Trustee
and the Collateral Agent.
Section 4.21 Maintenance of Insurance.
The Company will, and will cause its Subsidiaries to, maintain with
financially sound and reputable insurance companies, insurance on their property
and assets (including the Collateral), in at least such amounts, with such
deductibles and against at least such risks as is customary for companies of the
same or similar size engaged in the same or similar businesses as those of the
Company and its Subsidiaries and furnish to the Collateral Agent, upon written
request, full information as to such Persons' property and liability insurance
carriers. The Company will, and will cause the Guarantors to, cause all their
insurance policies to name the Secured Parties, as a class, as additional
insureds, with a waiver of subrogation, and shall cause all their property and
casualty policies to name the Collateral Agent as loss payee (together with
other lien holders as their interests may appear), with 30 days notice of
cancellation or material change.
Section 4.22 Financial Covenants.
The Company will cause the ratio of (x) Consolidated EBITDA to (y)
Consolidated Interest Expense, as of the end of each fiscal quarter of the
Company, to be equal to or greater than 1.05 to 1.0.
The Company will cause the ratio of (x) the aggregate principal amount
outstanding of Notes, First Priority Term Loans, Revolving Loans, Second
Priority Notes and Second Priority Term Loans to (y) the combined Estimated Peak
Capacity of all of the Facilities (including all Facilities in operation and
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under construction) owned by the Company and its Subsidiaries (expressed in
kilowatts), as of the end of each fiscal quarter of the Company, to be equal to
or less than $235 per kilowatt.
Section 4.23 Changes in Covenants when Third Priority Notes Rated
Investment Grade.
If on any date following the Closing Date:
(1) after giving effect to the suspension of covenants (and
the Event of Default) described below in the Third Priority Indenture,
the Third Priority Notes are rated Baa3 or better by Xxxxx'x and BBB-
or better by S&P; and &P
(2) no Default or Event of Default shall have occurred and
then be continuing,
then, beginning on that day and subject to the provisions of the following
paragraph, the covenants (and the Event of Default) of this Indenture
specifically listed below will be suspended:
(a) Section 4.07 (Restricted Payments);
(b) Section 4.08 (Dividend and Other Payment Restrictions
Affecting Subsidiaries);
(c) Section 4.09 (Incurrence of Indebtedness and Issuance of
Preferred Equity);
(e) Section 4.10 (Deposit of Revenues);
(d) Section 4.13 (Business Activities); and
(f) clause (9) under Section 6.01 (Events of Default).
Notwithstanding the foregoing, if the rating assigned to the Third
Priority Notes by either Xxxxx'x or S&P should subsequently decline to below
Baa3 or BBB-, respectively, the foregoing covenants (and the Event of Default)
will be reinstituted with respect to the Notes as of and from the date of such
rating decline. Calculations under reinstated Section 4.07 will be made as if
such covenant had been in effect since the Closing Date except that no Default
will be deemed to have occurred solely by reason of a Restricted Payment made
while such covenant was suspended.
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.
The Company will not, directly or indirectly:
(1) consolidate or merge with or into another Person (whether
or not the Company is the surviving corporation); or
(2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Subsidiaries taken as a whole, in one or more related transactions, to
another Person; or
(3) lease all or substantially all of its properties or
assets, in one or more related transactions, to any other Person.
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This Section 5.01 will not apply to (A) a merger of the Company with an
Affiliate solely for the purpose of reconstituting the Company in another
jurisdiction or (B) any sale, assignment, transfer, conveyance, lease or other
disposition of assets between or among the Company and the Guarantors.
Notwithstanding the foregoing, the Company is permitted to reorganize
as a corporation in accordance with the procedures established herein, provided,
that the Company shall have delivered to the Trustee an Opinion of Counsel in
the United States reasonably acceptable to the Trustee confirming that such
reorganization is not adverse to Holders (it being recognized that such
reorganization shall not be deemed adverse to the Holders solely because (i) of
the accrual of deferred tax liabilities resulting from such reorganization or
(ii) the successor or surviving corporation (a) is subject to income tax as a
corporate entity or (b) is considered to be an "includable corporation" of an
affiliated group of corporations within the meaning of the Internal Revenue Code
of 1986, as amended or any similar state or local law), and the Company delivers
to the Trustee such other certificates and other documents reasonably requested
by the Trustee in connection therewith.
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company and its Subsidiaries taken as a whole in a transaction that is
subject to, and that complies with the provisions of, Section 5.01, the
successor corporation formed by such consolidation or into or with which the
Company is merged or to which such sale, assignment, transfer, lease, conveyance
or other disposition is made shall succeed to, and be substituted for (so that
from and after the date of such consolidation, merger, sale, lease, conveyance
or other disposition, the provisions of this Indenture referring to the
"Company" shall refer instead to the successor corporation and not to the
Company), and may exercise every right and power of the Company under this
Indenture with the same effect as if such successor Person had been named as the
Company herein; provided, however, that the predecessor Company shall not be
relieved from the obligation to pay the principal of and interest on the Notes
except in the case of a sale of all of the Company's assets in a transaction
that is subject to, and that complies with the provisions of, Section 5.01.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an "Event of Default":
(1) default for 30 days in the payment when due of interest
on, or Special Interest, if any, with respect to, any of the Notes;
(2) default in the payment when due of the principal of, or
premium, if any, on any of the Notes ;
(3) failure by the Company or any of its Subsidiaries to
comply with the covenants contained in Sections 3.09, 4.10, 4.15 and
4.19;
(4) failure by the Company or any of its Subsidiaries for 30
days after written notice from the Trustee or the Holders of at least
25% in aggregate principal amount of outstanding Notes to comply with
any of the agreements in this Indenture or the Security Documents;
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(5) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its
Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Subsidiaries), whether such Indebtedness or guarantee
existed on the Closing Date or is created after the Closing Date, if
that default:
(a) is caused by a failure to pay principal of, or
interest or premium, if any, on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness
on the date of such default (a "Payment Default"); or
(b) results in the acceleration of such Indebtedness
prior to its express maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has
been so accelerated, aggregates $25.0 million or more, and such default
shall not have been cured or waived or any such acceleration rescinded,
or such Indebtedness repaid, within 20 days of the Company or the
applicable Subsidiary becoming aware of such default;
(6) failure by the Company or any of its Subsidiaries to pay
final judgments aggregating in excess of $25.0 million (excluding those
covered by insurance), which judgments are not paid, discharged or
stayed for a period of 60 days;
(7) the repudiation by CalGen Holdings, the Company or any of
its Subsidiaries of any of its obligations under the Security Documents
or the unenforceability of the Security Documents against CalGen
Holdings, the Company or any of its Subsidiaries for any reason;
provided, that such repudiation or unenforceability relates to
Collateral with a Fair Market Value of $25.0 million or more;
(8) except as permitted by this Indenture, any Subsidiary
Guarantee shall be held in any judicial proceeding to be unenforceable
or invalid or shall cease for any reason to be in full force and effect
or any Guarantor, or any Person acting on behalf of any Guarantor,
shall deny or disaffirm its obligations under its Subsidiary Guarantee,
and such condition shall not have been cured within 30 days after
written notice from the Trustee or the Holders of at least 25% in
aggregate principal amount of outstanding Notes;
(9) breach by any Person (other than the Company or any of its
Subsidiaries) of its obligations under, or termination or failure to be
in full force and effect of, a Major Project Document (unless such
breach, termination or failure to be in full force and effect would
not, when taken together with all other such breaches, terminations or
failures since the Closing Date (other than those that have been cured
as contemplated below, including by entering into a replacement
agreement), be Materially Adverse, as evidenced by an Officer's
Certificate of the chief financial officer of the Company), unless with
respect to any Major Project Document such breach is cured, or such
Major Project Document is replaced with a substantially similar
agreement (it being understood that (a) an agreement will be considered
substantially similar if it would not be Materially Adverse and (b) the
use of an Affiliate of the Company as the counterparty under an
agreement replacing the Index Hedge will not by itself be considered
Materially Adverse), within 60 days (or 120 days with respect to the
Index Hedge) thereafter; and
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(10) the Company, any of its Subsidiaries that is a
Significant Subsidiary or any group of its Subsidiaries that taken
together would constitute a Significant Subsidiary, pursuant to or
within the meaning of Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief
against it in an involuntary case,
(c) consents to the appointment of a custodian of it
or for all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
(e) generally is not paying its debts as they become
due; or
(11) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(a) is for relief against the Company, any of its
Subsidiaries that is a Significant Subsidiary or any group of
its Subsidiaries that taken together would constitute a
Significant Subsidiary, in an involuntary case;
(b) appoints a custodian of the Company, any of its
Subsidiaries that is a Significant Subsidiary or any group of
its Subsidiaries that taken together would constitute a
Significant Subsidiary, or for all or substantially all of the
property of the Company, any of its Subsidiaries that is a
Significant Subsidiary or any group of its Subsidiaries that
taken together would constitute a Significant Subsidiary; or
(c) orders the liquidation of the Company, any of its
Subsidiaries that is a Significant Subsidiary or any group of
its Subsidiaries that taken together would constitute a
Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days;
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (10) or (11) of
Section 6.01, all outstanding Notes will become due and payable immediately
without further action or notice. If any other Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes may declare all the Notes to be due and
payable immediately. Upon any such declaration, the Notes shall become due and
payable immediately.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may, on behalf of all of the
Holders, rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium or Special Interest, if
any, that has become due solely because of the acceleration) have been cured or
waived.
Section 6.03 Other Remedies.
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If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any, and
interest and Special Interest, if any, on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may, on behalf of the Holders
of all of the Notes, waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Special Interest, if any, or interest
on, the Notes (including in connection with an offer to purchase). Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.05 Control by Majority.
Subject to the provisions of the Collateral Trust Agreement, Holders of
a majority in aggregate principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
Section 6.06 Limitation on Suits.
Except to enforce the right to receive payment of principal, premium,
if any, or interest or Special Interest, if any, when due, no Holder may pursue
any remedy with respect to this Indenture or the Notes unless:
(1) such Holder has previously given the Trustee notice that
an Event of Default is continuing;
(2) Holders of at least 25% in aggregate principal amount of
the then outstanding Notes have requested that the Trustee pursue the
remedy;
(3) such Holders have offered the Trustee reasonable security
or indemnity against any loss, liability or expense;
(4) the Trustee has not complied with such request within 60
days after the receipt thereof and the offer of security or indemnity;
and
(5) Holders of a majority in aggregate principal amount of the
Notes then outstanding have not given the Trustee a direction
inconsistent with such request within such 60-day period.
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A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Special Interest,
if any, and interest on the Note, on or after the respective due dates expressed
in the Note (including in connection with an offer to purchase), or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder; provided,
that a Holder shall not have the right to institute any such suit for the
enforcement of payment if and to the extent that the institution or prosecution
thereof or the entry of judgment therein would, under applicable law, result in
the surrender, impairment, waiver or loss of the Lien of this Indenture upon any
property subject to such Lien.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Special Interest, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a Lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties that the Holders may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
Subject to the provisions of the Collateral Trust Agreement, if the
Trustee collects any money pursuant to this Article 6, it shall pay out the
money in the following order:
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First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Special Interest, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal,
premium and Special Interest, if any, and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to Section 6.07, or a suit by Holders of more than 10% in
aggregate principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
will exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee will examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture (but need not confirm or investigate the accuracy of
any calculations or other facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
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(1) this paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(2) the Trustee will not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is conclusively
determined by a court of competent jurisdiction that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee will not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section 7.01.
(e) No provision of this Indenture will require the Trustee to expend
or risk its own funds or incur any liability. The Trustee will be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holder, unless such Holder has offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee will not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel or both. The Trustee will not be
liable for any action it takes or omits to take in good faith in reliance on
such Officer's Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through its attorneys and agents and will not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee will not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company will be sufficient if
signed by an Officer of the Company.
(f) The Trustee will be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
(g) In no event shall the Trustee be required to take notice of any
default or breach hereof or any Event of Default hereunder unless and until the
Trustee shall have received from a Holder of a Note
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or from the Company written notice of the circumstances constituting the breach,
default or Event of Default and stating that said circumstances constitute an
Even of Default hereunder.
(h) If the Trustee is acting as Paying Agent and/or Registrar
hereunder, the rights and protections afforded to the Trustee pursuant to this
Article 7 will also be afforded to such Paying Agent and Registrar.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days after determining such
conflicting interest, apply to the SEC for permission to continue as trustee or
resign to the extent and in the manner provided by, and subject to the
provisions of, the TIA and this Indenture. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11.
Section 7.04 Trustee's Disclaimer.
The Trustee will not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee will mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium or Special
Interest, if any, or interest on any Note, the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each May 15 beginning with the May 15
following the Closing Date, and for so long as Notes remain outstanding, the
Trustee will mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA ss. 313(a) (but if no event described in
TIA ss. 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also will comply with TIA ss.
313(b)(2). The Trustee will also transmit by mail all reports as required by TIA
ss. 313(c).
(b) A copy of each report at the time of its mailing to the Holders of
Notes will be mailed by the Trustee to the Company and filed by the Trustee with
the SEC and each stock exchange on which the Notes are listed in accordance with
TIA ss. 313(d). The Company will promptly notify the Trustee when the Notes are
listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
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(a) The Company will pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation will not be limited by any law on compensation of a
trustee of an express trust. The Company will reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses will
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
(b) The Company and the Guarantors will indemnify the Trustee against
any and all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture and any other Note Documents to which it is a party, including the
costs and expenses of enforcing this Indenture and any other Note Documents to
which it is a party against the Company and the Guarantors (including this
Section 7.07) and defending itself against any claim (whether asserted by the
Company, the Guarantors, any Holder or any other Person) or liability, loss or
expense incurred by it in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence or bad faith as finally determined
by a court of competent jurisdiction. The Trustee will notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Company will not relieve the Company or any of the Guarantors of
their obligations hereunder. The Company or such Guarantor will defend the claim
and the Trustee will cooperate in the defense. The Trustee may have separate
counsel and the Company will pay the reasonable fees and expenses of such
counsel. Neither the Company nor any Guarantor need pay for any settlement made
without its consent, which consent will not be unreasonably withheld.
(c) The obligations of the Company and the Guarantors under this
Section 7.07 will survive the satisfaction and discharge of this Indenture.
(d) To secure the Company's payment obligations in this Section 7.07,
the Trustee will have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal of and
interest on particular Notes. Such Lien will survive the satisfaction and
discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(10) or (11) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee will become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of a
majority in aggregate principal amount of the then outstanding Notes may remove
the Trustee by so notifying the Trustee and the Company in writing. The Company
may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
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(2) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a custodian or public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company will promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in aggregate principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
(d) If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in aggregate principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will promptly transfer all property held by it
as Trustee to the successor Trustee, provided, that all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07. Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Company's obligations under Section 7.07 will continue for the benefit of
the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and (i) in the case of the initial Trustee, that also satisfies the
eligibility requirements for a trustee under the TIA and (ii) in the case of any
successor Trustee, that has a combined capital and surplus of at least $100
million as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
Section 7.11 Preferential Collection of Claims Against Company.
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The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Issuers may, at their option at any time, elect to have either
Section 8.02 or 8.03 be applied to all outstanding Notes upon compliance with
the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Issuers' exercise under Section 8.01 of the option applicable
to this Section 8.02, the Issuers and each of the Guarantors will, subject to
the satisfaction of the conditions set forth in Section 8.04, be deemed to have
been discharged from their obligations with respect to all outstanding Notes
(including the Subsidiary Guarantees) on the date the conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Issuers and the Guarantors will be deemed to have paid
and discharged the entire Indebtedness represented by the outstanding Notes
(including the Subsidiary Guarantees), which will thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 and the other Sections of
this Indenture referred to in clauses (1) and (2) below, and to have satisfied
all their other obligations under such Notes, the Subsidiary Guarantees and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which will survive until otherwise terminated or discharged
hereunder:
(1) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, or interest or premium or
Special Interest, if any, on such Notes when such payments are due from
the trust referred to in Section 8.04;
(2) the Issuers' obligations with respect to such Notes under
Article 2 and Section 4.02;
(3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Issuers' and the Guarantors' obligations in
connection therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Issuers may exercise
their option under this Section 8.02 notwithstanding the prior exercise of their
option under Section 8.03.
Section 8.03 Covenant Defeasance.
Upon the Issuers' exercise under Section 8.01 of the option applicable
to this Section 8.03, the Issuers and the Guarantors will, subject to the
satisfaction of the conditions set forth in Section 8.04, be released from each
of their obligations under the covenants contained in Sections 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21 and 4.22 with
respect to the outstanding Notes on and after the date the conditions set forth
in Section 8.04 are satisfied (hereinafter, "Covenant Defeasance"), and the
Notes will thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in
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connection with such covenants, but will continue to be deemed "outstanding" for
all other purposes hereunder (it being understood that such Notes may not be
deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes and Subsidiary
Guarantees, the Issuers and the Guarantors may omit to comply with and will have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply will not constitute a Default or an Event of Default under
Section 6.01, but, except as specified above, the remainder of this Indenture
and such Notes and Subsidiary Guarantees will be unaffected thereby. In
addition, upon the Issuers' exercise under Section 8.01 of the option applicable
to this Section 8.03, subject to the satisfaction of the conditions set forth in
Section 8.04, Sections 6.01(3) through 6.01(5) will not constitute Events of
Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance
under either Section 8.02 or 8.03:
(1) the Issuers must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally
recognized investment bank, appraisal firm or firm of independent
public accountants, to pay the principal of, or interest and premium
and Special Interest, if any, on the outstanding Notes on the Stated
Maturity or on the applicable redemption date, as the case may be, and
the Issuers must specify whether the Notes are being defeased to
maturity or to a particular redemption date;
(2) in the case of an election under Section 8.02, the Issuers
must have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that:
(A) the Issuers have received from, or there has been
published by, the Internal Revenue Service a ruling; or
(B) since the Closing Date, there has been a change
in the applicable federal income tax law;
in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(3) in the case of an election under Section 8.03, the Issuers
have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders
of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
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(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such
deposit);
(5) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(6) the Issuers must deliver to the Trustee an Officer's
Certificate stating that the deposit was not made by the Issuers with
the intent of preferring the Holders of Notes over the other creditors
of the Issuers with the intent of defeating, hindering, delaying or
defrauding creditors of the Issuers or others; and
(7) the Issuers must deliver to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 in respect of the outstanding Notes will be
held in trust and applied by the Trustee, in accordance with the provisions of
such Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium and Special Interest, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Issuers from time to time upon the request of the
Issuers any money or non-callable Government Securities held by them as provided
in Section 8.04 which, in the opinion of a nationally recognized investment
bank, appraisal firm or firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(1)), are in excess of the amount thereof that would
then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.
Section 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Issuers, in trust for the payment of the principal of, premium and
Special Interest, if any, or interest on any Note and remaining unclaimed for
two years after such principal, premium and Special Interest, if any, or
interest has become due and payable shall be paid to the Issuers on their
request or (if then held by the Issuers) will be discharged from such trust; and
the Holder of such Note will thereafter be permitted to look only to the Issuers
for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to
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such trust money, and all liability of the Issuers as trustee thereof, will
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which will not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Issuers.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03, as the case may be, by reason of any order or judgment of any court or
Governmental Authority enjoining, restraining or otherwise prohibiting such
application, then the Issuers' and the Guarantors' obligations under this
Indenture, the Notes and the Subsidiary Guarantees will be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance with Section 8.02 or 8.03, as the case may be; provided,
however, that, if the Issuers make any payment of principal of, premium or
Special Interest, if any, or interest on any Note following the reinstatement of
their obligations, the Issuers will be subrogated to the rights of the Holder of
such Note to receive such payment from the money held by the Trustee or Paying
Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02, the Issuers, the Guarantors and the
Trustee may, without the consent of any Holder, amend or supplement this
Indenture, the Subsidiary Guarantees or the Notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(3) to provide for the assumption of the Issuers' obligations
to the Holders of the Notes by a successor to the Issuers pursuant to
Article 5;
(4) to make any change that would provide any additional
rights or benefits to the Holders or that does not adversely affect the
legal rights hereunder of any Holder;
(5) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA;
(6) to make, complete or confirm any grant of Collateral
permitted or required by this Indenture or any of the Security
Documents or any release of Collateral that becomes effective as set
forth in this Indenture or any of the Security Documents;
(7) to conform the text of this Indenture, the Subsidiary
Guarantees, the Security Documents or the Notes to any provision of the
"Description of Notes" section contained in the Offering Memorandum to
the extent that such provision in such "Description of Notes" section
was intended to be a verbatim recitation of a provision of this
Indenture, the Subsidiary Guarantees, the Security Documents or the
Notes; or
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(8) to allow any Guarantor to execute a supplemental indenture
in the form of Exhibit G and/or a Subsidiary Guarantee with respect to
the Notes.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
7.02, the Trustee will join with the Company and the Guarantors in the execution
of any amended or supplemental indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee will not be obligated to enter
into such amended or supplemental indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including, without limitation,
Section 3.09, 4.10 and 4.15), the Subsidiary Guarantees and the Notes with the
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding voting as a single class (including, without
limitation, consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07,
any existing Default or Event of Default (other than a Default or Event of
Default in the payment of the principal of, premium or Special Interest, if any,
or interest on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of this
Indenture, the Subsidiary Guarantees or the Notes may be waived with the consent
of the Holders of a majority in aggregate principal amount of the then
outstanding Notes voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes). Section 2.08 shall determine which Notes are considered to be
"outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02, the Trustee will join
with the Company in the execution of such amended or supplemental indenture
unless such amended or supplemental indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but will not be obligated to, enter into such
amended or supplemental indenture.
It will not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it is sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company will mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such amended or
supplemental indenture or waiver. Subject to Sections 6.04 and 6.07, the Holders
of a majority in aggregate principal amount of the Notes then outstanding voting
as a single class may waive compliance in a particular instance by the Company
with any provision of this Indenture or the Notes. However, without the consent
of each Holder affected, an amendment or waiver under this Section 9.02 may not
(with respect to any Notes held by a non-consenting Holder):
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(1) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any
Note or alter the provisions with respect to the redemption of the Notes
(other than the provisions of Sections 3.09, 4.10 and 4.15);
(3) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(4) waive a Default or Event of Default in the payment of
principal of, or premium, interest or Special Interest, if any, on, the
Notes (except a rescission of acceleration of the Notes by the Holders
of at least a majority in aggregate principal amount of the then
outstanding Notes and a waiver of the payment default that resulted from
such acceleration);
(5) make any Note payable in money other than that stated in
the Notes;
(6) make any change in the provisions of this Indenture
relating to waivers of Defaults or Events of Default or the rights of
Holders of Notes to receive payments of principal of, or interest,
premium or Special Interest, if any, on the Notes;
(7) waive a redemption payment with respect to any Note (other
than a payment required under Section 4.10 or Section 4.15);
(8) release any Guarantor from any of its payment obligations
under its Subsidiary Guarantee or this Indenture, except in accordance
with the terms of this Indenture;
(9) release any portion of the Collateral from the Liens
created by the Security Documents except as specifically provided for in
this Indenture and the Security Documents; or
(10) make any change in the preceding amendment and waiver
provisions.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes will be set
forth in an amended or supplemental indenture that complies with the TIA as then
in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee
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shall, upon receipt of an Authentication Order, authenticate new Notes that
reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee will sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
will be entitled to receive and (subject to Section 7.01) will be fully
protected in relying upon, in addition to the documents required by Section
13.04, an Officer's Certificate and an Opinion of Counsel stating that the
execution of such amended or supplemental indenture is authorized or permitted
by this Indenture.
ARTICLE 10.
COLLATERAL AND SECURITY
Section 10.01 Equal and Ratable Sharing of Collateral by Holders of Secured
Debt Within a Class.
Notwithstanding:
(1) anything to the contrary contained in the Security
Documents;
(2) the time of incurrence of any Series of Secured Debt within
a Class;
(3) the order or method of attachment or perfection of any
Liens securing any Series of Secured Debt within such Class;
(4) the time or order of filing or recording of financing
statements, mortgages or other documents filed or recorded to perfect
any Lien upon any Collateral;
(5) the time of taking possession or control over any
Collateral; or
(6) the rules for determining priority under any law governing
relative priorities of Liens:
(a) all Liens at any time granted by the Company or any Guarantor to
secure any of the Secured Debt within such Class will secure, equally and
ratably, all present and future Secured Obligations within such Class; and
(b) all proceeds of all Liens at any time granted by the Company or any
Guarantor to secure any of the Secured Debt and other Secured Obligations within
such Class will be allocated and distributed equally and ratably on account of
the Secured Debt and other Secured Obligations within such Class; provided, that
in the absence of an Event of Default, subject to the requirements set forth in
Sections 3.09 and 4.10, the Company and the Guarantors shall be entitled to
utilize cash proceeds of Collateral in the ordinary course of their business.
The foregoing provision is intended for the benefit of, and will be
enforceable as a third party beneficiary by, each present and future holder of
Secured Obligations within the applicable Class, each
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present and future Secured Debt Representative therefor and the Collateral Agent
as holder of Secured Obligations within such Class. The Secured Debt
Representative of each future Series of Secured Debt within a Class will be
required to deliver a Sharing Confirmation to the Collateral Agent and the
Trustee at the time of incurrence of such Series of Secured Debt.
Section 10.02 Class Voting.
With respect to any vote to be cast by the Trustee on behalf of the
Holders in accordance with Article 4 of the Collateral Trust Agreement, the
Trustee will vote all of such Notes as directed by the Holders of a majority in
aggregate principal amount of the outstanding principal amount of Notes. For
purposes of such direction to the Trustee, Notes registered in the name of, or
Beneficially Owned by, the Company or an Affiliate of the Company will be deemed
not to be outstanding.
Section 10.03 [Reserved]
Section 10.04 Relative Rights.
Nothing in the Note Documents will:
(1) impair, as between the Company and the holders of the
Notes, the obligation of the Company to pay principal of, premium and
interest, if any, on the Notes in accordance with their terms or any
other obligation of the Company or any other obligor under the Note
Documents;
(2) affect the relative rights of holders of Notes as against
any other creditors of the Company or any Guarantor (other than holders
of other Secured Obligations);
(3) restrict the right of any holder of Notes to xxx for
payments that are then due and owing (but not enforce any judgment in
respect thereof against any Collateral to the extent specifically
prohibited by the provisions of the Collateral Trust Agreement);
(4) restrict or prevent any holder of Notes, the Trustee, the
Collateral Agent or other Person on their behalf from exercising any of
its rights or remedies upon a Default or Event of Default not
specifically restricted or prohibited by the Collateral Trust Agreement;
or
(5) restrict or prevent any Holder of Notes, the Trustee, the
Collateral Agent or any other Person on their behalf from taking any
lawful action in an insolvency or liquidation proceeding not
specifically restricted or prohibited by the Collateral Trust Agreement.
Section 10.05 Release of Security Interest in Respect of Notes.
The Collateral Agent's Liens upon the Collateral shall no longer secure
the Notes or any other Note Obligations, and the right of the holders of the
Notes and such Note Obligations to the benefits and proceeds of the Collateral
Agent's Liens on Collateral shall terminate and be discharged:
(1) upon satisfaction and discharge of this Indenture in
accordance with Article 12;
(2) upon a Legal Defeasance or Covenant Defeasance of the Notes
in accordance with Article 8; or
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(3) upon payment in full and discharge of all Notes and other
Note Obligations that are outstanding under this Indenture, due and
payable under this Indenture at the time those Notes are paid in full
and discharged.
Upon the occurrence of any of the events described in clauses (1), (2) and (3)
above, the Trustee will authorize the Collateral Agent to release the Liens on
the Collateral securing the Notes.
ARTICLE 11.
SUBSIDIARY GUARANTEES
Section 11.01 Guarantee.
(a) Subject to this Article 11 and the limitations set forth in Section
13.07, each of the Guarantors hereby, jointly and severally, unconditionally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Indenture, the Notes or the obligations of the
Company hereunder or thereunder, that:
(1) the principal of, premium and Special Interest, if any, and
interest on the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal of and interest and Special Interest, if any, on the
Notes, if any, if lawful, and all other obligations of the Company to
the Holders or the Trustee hereunder or thereunder will be promptly paid
in full or performed, all in accordance with the terms hereof and
thereof; and
(2) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that same will be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise.
Failing payment when due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
(b) Subject to the limitations set forth in Section 13.07, the
Guarantors hereby agree that their obligations hereunder are unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and covenant
that this Subsidiary Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise
to return to the Company, the Guarantors or any custodian, trustee, liquidator
or other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, will be reinstated
in full force and effect.
99
(d) Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (2) in the event of any declaration of acceleration of
such obligations as provided in Article 6, such obligations (whether or not due
and payable) will forthwith become due and payable by the Guarantors for the
purpose of this Subsidiary Guarantee. The Guarantors will have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Subsidiary Guarantee.
Section 11.02 Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor will be limited to the maximum amount
that will, after giving effect to such maximum amount and all other contingent
and fixed liabilities of such Guarantor that are relevant under such laws, and
after giving effect to any collections from, rights to receive contribution from
or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article 11, result in the
obligations of such Guarantor under its Subsidiary Guarantee not constituting a
fraudulent transfer or conveyance.
Section 11.03 Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form attached as Exhibit F will be endorsed by an Officer
of such Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture will be executed on behalf of such Guarantor by one of its
Officers.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 11.01 will remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee will
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any Subsidiary after
the Closing Date, if required by Section 4.21, the Company will cause such
Subsidiary to comply with the provisions of Section 4.21 and this Article 11, to
the extent applicable.
100
Section 11.04 Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 11.05, no Guarantor may sell or
otherwise dispose of all or substantially all of its assets to, or consolidate
with or merge with or into (whether or not such Guarantor is the surviving
Person), another Person, other than the Company or another Guarantor, except as
permitted by Section 4.10.
In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture in the form of
Exhibit G, executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the Subsidiary Guarantee endorsed upon the Notes and the due and
punctual performance of all of the covenants and conditions of this Indenture to
be performed by the Guarantor, such successor Person will succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Subsidiary Guarantees so issued will in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5, nothing contained in this
Indenture or in any of the Notes will prevent any consolidation or merger of a
Guarantor with or into the Company or another Guarantor, or will prevent any
sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Company or another Guarantor.
Section 11.05 Releases Following Sale of Assets.
In the event of any sale or other disposition of all or substantially
all of the assets of any Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the Capital Stock of any
Guarantor, in each case to a Person that is not (either before or after giving
effect to such transactions) the Company or a Guarantor, then such Guarantor (in
the event of a sale or other disposition, by way of merger, consolidation or
otherwise, of all of the Capital Stock of such Guarantor) or the Person
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) will be released and relieved
of any obligations under its Subsidiary Guarantee; provided, that the Net
Proceeds of such sale or other disposition are applied in accordance with the
applicable provisions of this Indenture, including without limitation Section
4.10. Upon delivery by the Company to the Trustee of an Officer's Certificate
and an Opinion of Counsel to the effect that such sale or other disposition was
made by the Company in accordance with the provisions of this Indenture,
including without limitation Section 4.10, the Trustee will execute any
documents reasonably required in order to evidence the release of any Guarantor
from its obligations under its Subsidiary Guarantee.
Any Guarantor not released from its obligations under its Subsidiary
Guarantee will remain liable for the full amount of principal of and interest
and premium and Special Interest, if any, on the Notes and for the other
obligations of any Guarantor under this Indenture as provided in this Article
11.
101
ARTICLE 12.
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further effect
as to all Notes issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated (except
lost, stolen or destroyed Notes that have been replaced or paid
and Notes for whose payment money has theretofore been
deposited in trust and thereafter repaid to the Issuers) have
been delivered to the Trustee for cancellation; or
(b) all Notes that have not been delivered to the
Trustee for cancellation have become due and payable by reason
of the mailing of a notice of redemption or otherwise or will
become due and payable within one year and the Issuers have or
any Guarantor has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust solely for
the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such
amounts as will be sufficient without consideration of any
reinvestment of interest, to pay and discharge the entire
indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, premium and Special Interest, if
any, and accrued interest to the date of maturity or
redemption;
(2) no Default or Event of Default has occurred and is
continuing on the date of such deposit or will occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Issuers
are or any Guarantor is a party or by which the Issuers are or any
Guarantor is bound;
(3) the Issuers have or any Guarantor has paid or caused to be
paid all sums payable by it under this Indenture; and
(4) the Issuers have delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the
payment of the Notes at maturity or the redemption date, as the case may
be.
In addition, the Issuers must deliver an Officer's Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if
money has been deposited with the Trustee pursuant to subclause (b) of clause
(1) of this Section 12.01, the provisions of Section 12.02 and Section 8.06 will
survive. In addition, nothing in this Section 12.01 will be deemed to discharge
those provisions of Section 7.07, that, by their terms, survive the satisfaction
and discharge of this Indenture.
Section 12.02 Application of Trust Money.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 12.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including either Issuer acting
102
as Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium and Special Interest, if any) and interest for
whose payment such money has been deposited with the Trustee; but such money
need not be segregated from other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 12.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or Governmental
Authority enjoining, restraining or otherwise prohibiting such application, the
Company's and any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 12.01; provided, that if the Issuers have made any payment of principal
of, premium or Special Interest, if any, or interest on any Notes because of the
reinstatement of its obligations, the Issuers shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.
ARTICLE 13.
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss.318(c), the imposed duties will control.
Section 13.02 Notices.
Any notice or communication by the Issuers, any Guarantor or the Trustee
to the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested), facsimile
or overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company, CalGen Finance and/or any Guarantor:
Calpine Generating Company, LLC
CalGen Finance Corp.
00 Xxxx Xxx Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Chief Financial Officer
With a copy to:
Xxxxxxxxx & Xxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
If to the Trustee:
Wilmington Trust, FSB
c/o Wilmington Trust Company
103
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxx
With a Copy to:
Xxxxx Xxxxxxx LLP
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx Xxxxxxx
The Company, any Guarantor or the Trustee, by notice to the others, may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) will
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if sent by facsimile; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication will also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it will not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it will mail
a copy to the Trustee and each Agent at the same time.
Section 13.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
Section 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officer's Certificate in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth
in Section 13.05) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been satisfied; and
104
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set
forth in Section 13.05) stating that, in the opinion of such counsel,
all such conditions precedent and covenants have been satisfied.
Section 13.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) must comply with the provisions of TIA ss. 314(e)
and must include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
Section 13.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 13.07 Non-Recourse; No Personal Liability of Directors, Officers,
Employees and Stockholders.
Notwithstanding anything to the contrary set forth in this Indenture, the
Notes, any Security Document or any other Note Document, the Notes and the
Subsidiary Guarantees are non-recourse secured obligations of the Company and
Guarantors, respectively. The only recourse a Holder will have with respect to
the payment of principal of, or interest or premium on, the Notes (whether under
the Indenture or the Notes, or pursuant to the Subsidiary Guarantees) will be
enforcement of its rights against CalGen Finance under this Indenture or against
the Collateral pursuant to the Security Documents. The Holders will have no
recourse to the equity or assets of the Excluded Subsidiary.
No director, officer, employee, incorporator, stockholder, or partner of the
Company or any of its Subsidiaries, as such, will have any liability for any
obligations of the Issuers or any of its Subsidiaries under the Notes, this
Indenture, the Subsidiary Guarantees or the Security Documents, or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
The waiver may not be effective to waive liabilities under the federal
securities laws.
Section 13.08 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES
105
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
Section 13.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 13.10 Successors.
All agreements of the Issuers in this Indenture and the Notes will bind
their respective successors. All agreements of the Trustee in this Indenture
will bind its successors. All agreements of each Guarantor in this Indenture
will bind its successors, except as otherwise provided in Section 11.05.
Section 13.11 Severability.
In case any provision in this Indenture or in the Notes is invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired thereby.
Section 13.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy will be an original, but all of them together represent the same
agreement.
Section 13.13 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and will in no
way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
106
SIGNATURES
Dated as of March 23, 2004
CALPINE GENERATING COMPANY, LLC
By: /s/ XXXXX XXXX
---------------------------
Name: Xxxxx Xxxx
Title: Vice President
CALGEN FINANCE CORP.
By: /s/ XXXXX XXXX
---------------------------
Name: Xxxxx Xxxx
Title: Vice President
107
THE GUARANTORS:
CALGEN EXPANSION COMPANY, LLC
CPN FREESTONE, LLC
CALPINE FREESTONE, LLC
CALPINE FREESTONE ENERGY GP, LLC
CALPINE CHANNEL ENERGY CENTER LP, LLC
CALPINE CHANNEL ENERGY CENTER GP, LLC
CHANNEL POWER GP, LLC
CALGEN EQUIPMENT FINANCE HOLDINGS, LLC
CALGEN PROJECT EQUIPMENT FINANCE COMPANY ONE, LLC
CALGEN PROJECT EQUIPMENT FINANCE COMPANY THREE LLC
CALGEN EQUIPMENT FINANCE COMPANY, LLC
NUECES BAY ENERGY LLC
CALPINE NORTHBROOK SOUTHCOAST INVESTORS, LLC
CALPINE CORPUS CHRISTI ENERGY GP, LLC
ZION ENERGY LLC
LOS MEDANOS ENERGY CENTER, LLC
XXXXXX ENERGY CENTER, LLC
XXXXXXXX ENERGY LLC
DECATUR ENERGY CENTER, LLC
CALPINE XXXXX POWER I, LLC
CALPINE XXXXX POWER II, LLC
CALPINE BAYTOWN ENERGY CENTER LP, LLC
CALPINE BAYTOWN ENERGY CENTER GP, LLC
BAYTOWN POWER GP, LLC
COLUMBIA ENERGY LLC
DELTA ENERGY CENTER, LLC
CALGEN PROJECT EQUIPMENT FINANCE COMPANY TWO, LLC
PASTORIA ENERGY FACILITY L.L.C.
CALPINE PASTORIA HOLDINGS, LLC
Executing this First Priority Indenture on behalf of and
so as to bind each of the limited liability companies
named above under the caption "The Guarantors"
By: /s/ XXXXX XXXX
--------------------------------------------
Name: Xxxxx Xxxx
Title: Vice President
108
THE GUARANTORS:
FREESTONE POWER GENERATION LP
CALPINE FREESTONE ENERGY, LP
CALPINE POWER EQUIPMENT LP
CHANNEL POWER, LP
CHANNEL ENERGY CENTER, LP
CALPINE CORPUS CHRISTI ENERGY, LP
CORPUS CHRISTI COGENERATION LP
CALPINE XXXXX POWER, L.P.
BAYTOWN ENERGY CENTER, LP
BAYTOWN POWER, LP
Executing this First Priority Indenture on behalf of and
so as to bind each of the limited partnerships named
above under the caption "The Guarantors"
By: /s/ XXXXX XXXX
--------------------------------------------
Name: Xxxxx Xxxx
Title: Vice President
109
WILMINGTON TRUST FSB
By: /s/ XXXXX X. XXXXXXXX
--------------------------------------------
Name: Xxxxx X. XxXxxxxx
Title: Vice President
110
SCHEDULE A
PERMITTED PRIOR LIENS EXISTING ON THE CLOSING DATE
See attached.
SCHEDULE A-1
EXHIBIT A
[Face of Note]
--------------------------------------------------------------------------------
CUSIP [13135B AA 4--144A] [13135B AE 6--Exchange]
ISIN [US13135BAA44--144A] [US13135BAE65--Exchange]
First Priority Secured Floating Rate Note due 2009
No. ___ $____________
CALPINE GENERATING COMPANY, LLC
CALGEN FINANCE CORP.
promises to pay to ______________
or registered assigns,
the principal sum of ___________________________________________________________
Dollars on April 1, 2009.
Interest Payment Dates: January 1, April 1, July 1 and October 1
Record Dates: December 15, March 15, June 15 and September 15
CALPINE GENERATING COMPANY, LLC
CALGEN FINANCE CORP.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
Dated: March 23, 2004
This is one of the Notes referred to
in the within-mentioned Indenture:
WILMINGTON TRUST FSB,
as Trustee
By: __________________________________
Authorized Signatory
EXHBIT A-1
[Back of Note]
First Priority Secured Floating Rate Note due 2009
[THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS NOT A U.S.
PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON
AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME
PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE
144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN
EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON
WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE
904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) TO AN IAI
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE REGISTRATION
OF TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
NOTES AT THE TIME OF TRANSFER OF LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN
WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING RESTRICTIONS.]
[THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO
EXHBIT A-2
SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY AND FINANCE CORP.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. Calpine Generating Company, LLC, a Delaware
limited liability company (the "Company"), and CalGen Finance Corp., a
Delaware corporation ("CalGen Finance" and, together with the Company,
the "Issuers"), jointly and severally promise to pay interest on the
principal amount of this Note at the Applicable First Priority LIBOR
Rate (as defined below) per annum from March 23, 2004 until maturity
and will pay the Special Interest, if any, payable pursuant to the
Registration Rights Agreement referred to below. The Issuers will pay
interest and Special Interest, if any, semiannually in arrears on
January 1, April 1, July 1 and October 1 of each year or, if any such
day is not a Business Day, on the next succeeding Business Day (each,
an "Interest Payment Date"). Interest on the Notes will accrue from the
most recent date to which interest has been paid or, if no interest has
been paid, from the date of issuance; provided, that if there is no
existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from
such next succeeding Interest Payment Date; provided, further, that the
first Interest Payment Date will be July 1, 2004. The Issuers will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at a rate that is 1% per annum in excess of the rate
then in effect. The Issuers will pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Special Interest (without regard to any
applicable grace periods) from time to time on demand at the same rate
to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
"Applicable First Priority LIBOR Rate" means, for each
interest period, 375 basis points over the rate determined by the
Company (notice of such rate to be sent to the Trustee by the Company
on the date of determination thereof) equal to the greater of (x)
1.250% or (y) the applicable British Bankers' Association LIBOR rate
for deposits in U.S. dollars for a period of one, two, three or six
months (as the Company may elect in an Officer's Certificate delivered
to
EXHBIT A-3
the Trustee as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such interest period; provided, that, if no
such British Bankers' Association LIBOR rate is available to the
Company, the Applicable First Priority LIBOR Rate for the relevant
interest period shall instead be the rate at which Xxxxxx Xxxxxxx
Senior Funding, Inc. or one of its affiliate banks offers to place
deposits in U.S. dollars with first-class banks in the London interbank
market for a period of one, two, three or six months (as applicable) as
of approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such interest period, in amounts equal to $1.0
million.
PRINCIPAL. The Issuers jointly and severally promise to pay
principal of the Notes in quarterly installments, commencing July 1,
2007, as follows:
Percentage of Original
Payment Date Principal Amount Payable
------------ ------------------------
July 1, 2007....................... 0.250%
October 1, 2007.................... 0.250%
January 1, 2008.................... 0.250%
April 1, 2008...................... 0.250%
July 1, 2008....................... 0.250%
October 1, 2008.................... 0.250%
January 1, 2009.................... 0.250%
The Issuers jointly and severally promise to pay all remaining
principal of, interest and Special Interest, if any, on, and fees and
costs in respect of the Notes on April 1, 2009.
(2) METHOD OF PAYMENT. The Company will pay interest on
the Notes (except defaulted interest) and Special Interest, if any, to
the Persons who are registered Holders of Notes at the close of
business on the December 15, March 15, June 15 or September 15
immediately preceding the Interest Payment Date, even if such Notes are
canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.12 of the Indenture with respect
to defaulted interest. The Notes will be payable as to principal,
premium, interest and Special Interest, if any, at the office or agency
of the Company maintained for such purpose within or without the City
and State of New York, or, at the option of the Company, payment of
interest and Special Interest, if any, may be made by check mailed to
the Holders at their addresses set forth in the register of Holders;
provided, that payment by wire transfer of immediately available funds
will be required with respect to principal of, and interest, premium
and Special Interest, if any, on, all Global Notes and all other Notes
the Holders of which will have provided wire transfer instructions to
the Company or the Paying Agent. Such payment will be in such coin or
currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
(3) PAYING AGENT AND REGISTRAR. The Company, on behalf of
itself and CalGen Finance, will maintain an office or agency where
Notes may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Notes may be presented for
payment ("Paying Agent"). The Registrar will keep a register of the
Notes and of their transfer and exchange. The Issuers may appoint one
or more co-registrars and one or more additional paying agents. The
term "Registrar" includes any co-registrar and the term "Paying Agent"
includes any additional paying agent. The Issuers may change any Paying
Agent or Registrar without notice to any Holder. The Company will
notify the Trustee in writing of the name and
EXHIBIT A-4
address of any Agent not a party to the Indenture. If the Issuers fail
to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may
act as Paying Agent or Registrar. The Issuers initially appoint The
Depository Trust Company to act as Depositary with respect to the
Global Notes. The Issuers initially appoint the Trustee to act as the
Registrar and Paying Agent and to act as Custodian with respect to the
Global Notes.
(4) INDENTURE. The Company issued the Notes under a First
Priority Indenture, dated as of March 23, 2004 (the "Indenture"), among
the Issuers, the Guarantors and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended
(15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions
of the Indenture shall govern and be controlling. The Notes are secured
obligations of the Company and CalGen Finance limited to $235.0 million
in aggregate principal amount. The Notes are secured on a
first-priority basis, Equally and Ratably with all other First Priority
Lien Obligations, by (a) a security interest in all the assets of the
Company and the Guarantors other than Excluded Assets, and (b) a pledge
of the equity interests in the Company and CalGen Expansion Company,
LLC, subject to Permitted Prior Liens.
(5) OPTIONAL REDEMPTION. The Issuers may not redeem all
or any part of the Notes prior to April 1, 2007. On or after April 1,
2007, the Issuers may redeem all or a part of the Notes, upon not less
than 30 nor more than 60 days prior notice, at the redemption prices
(expressed at percentages of principal amount) set forth below plus
accrued and unpaid interest and Special Interest, if any, on the Notes
redeemed, to the applicable redemption date, if redeemed during the
twelve-month period beginning on April 1 of the years indicated below,
subject to the rights of the Holders on the relevant record date to
receive interest on the relevant interest payment date:
Year Percentage
---- ----------
2007......................................... 102.5%
2008, and thereafter......................... 100.0%
Unless the Company defaults in the payment of the redemption
price, interest will cease to accrue on the Notes or portions thereof
called for redemption on the applicable redemption date.
(6) MANDATORY REDEMPTION. The Issuers will not be
required to make mandatory redemption or sinking fund payments with
respect to the Notes.
(7) REPURCHASE AT OPTION OF HOLDER..
(a) Upon the occurrence of a Change of Control,
the Issuers will make an offer (a "Change of Control Offer") to each
Holder to repurchase all or any part (equal to $1,000 or an integral
multiple of $1,000) of such Holder's Notes at a purchase price in cash
equal to 101% of the aggregate principal amount thereof plus accrued
and unpaid interest and Special Interest, if any, on the Notes
purchased, to, but excluding, the date of purchase, subject to the
rights of Holders on the relevant record date to receive interest due
on the relevant interest payment date. Within 30 days following any
Change of Control, the Issuers will mail a notice to each Holder
describing the transaction or transactions that constitute the Change
of Control and
EXHIBIT A-5
stating the procedures governing the Change of Control Offer as
required by Section 4.15 of the Indenture.
(b) The Issuers will be required to use the Net
Proceeds from any Asset Sale, Casualty Event or Condemnation Event to
offer to prepay Notes and other First Priority Lien Obligations (an
"Asset Sale Offer"). The offer price in any Asset Sale Offer will be
equal to 100% of the principal amount plus accrued and unpaid interest
and Special Interest, if any, on the Notes purchased, to, but
excluding, the date of purchase, and will be payable in cash, subject
to the rights of Holders on the relevant record date to receive
interest due on the relevant interest payment date. If the aggregate
principal amount of Notes and other First Priority Lien Obligations
tendered into such Asset Sale Offer (or required to be purchased,
prepaid or redeemed) exceeds the amount of Net Proceeds available
therefor, the Trustee will select the Notes and such other First
Priority Lien Obligations to be purchased on a pro rata basis.
(8) NOTICE OF REDEMPTION. Notice of redemption will be
mailed at least 30 days but not more than 60 days before the redemption
date to each Holder whose Notes are to be redeemed at its registered
address. Notes in denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000, unless all of the Notes
held by a Holder are to be redeemed. On and after the redemption date
interest ceases to accrue on Notes or portions thereof called for
redemption.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples thereof. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted
by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part.
Also, the Company need not exchange or register the transfer of any
Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the
corresponding Interest Payment Date.
(10) PERSONS DEEMED OWNERS. The registered Holder of a
Note may be treated as its owner for all purposes.
(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions and the Collateral Trust Agreement, the Indenture, the
Subsidiary Guarantees and the Notes may be amended or supplemented with
the consent of the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding (including consents
obtained in connection with a purchase or tender offer or exchange
offer for Notes) voting as a single class, and any existing default or
compliance with any provision of the Indenture, the Subsidiary
Guarantees or the Notes may be waived with the consent of the Holders
of a majority in principal amount of the Notes then outstanding voting
as a single class. Without the consent of any Holder, the Indenture,
the Subsidiary Guarantees and the Notes may be amended or supplemented
to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes,
to provide for the assumption of the Company's or any Guarantor's
obligations to Holders of the Notes in case of a merger or
consolidation, to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such
Holder, to comply with the requirements of the SEC in order to effect
or maintain the qualification of the Indenture under the Trust
Indenture Act, to make, complete or confirm any grant of Collateral
permitted or required by the Indenture
EXHIBIT A-6
or any of the Security Documents or any release of Collateral that
becomes effective as set forth in the Indenture and the Security
Documents, to conform the text of the Indenture, the Subsidiary
Guarantees, the Security Documents or the Notes to any provision of the
Description of Notes in the Offering Memorandum to the extent such
provision of the Description of Notes in the Offering Memorandum was
intended to be a verbatim recitation of a provision of the Indenture,
the Subsidiary Guarantees, the Security Documents or the Notes, or to
allow any Guarantor to execute a supplemental indenture in the form of
Exhibit G to the Indenture and/or a Note Guarantee with respect to the
Notes.
(12) DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest or Special
Interest, if any, on any of the Notes; (ii) default in the payment when
due of the principal of or premium, if any, on any of the Notes, (iii)
failure by the Company or any of its Subsidiaries to comply with
Section 3.09, 4.10, 4.15 or 4.19 of the Indenture; (iv) failure by the
Company or any of its Subsidiaries to observe or perform any other
agreement in the Indenture or the Security Documents for 30 days after
notice to the Company by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding voting as a
single class; (v) default under certain other agreements relating to
Indebtedness of the Company and its Subsidiaries which default is
caused by the failure to pay principal of, or interest or premium, if
any, on, such Indebtedness, or results in the acceleration of such
Indebtedness prior to its express maturity; (vi) final judgments for
the payment of money that remain undischarged for a period of 60 days,
provided the aggregate amount of such judgments exceeds $25.0 million
(excluding those covered by insurance); (vii) the repudiation of the
Security Documents by the Company or a Guarantor or the
unenforceability of the Security Documents under certain circumstances;
(viii) except as permitted by the Indenture, any Subsidiary Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid
or shall cease for any reason to be in full force and effect or any
Guarantor or any Person acting on its behalf shall deny or disaffirm
its obligations under such Guarantor's Subsidiary Guarantee; (ix) the
breach by any Person (other than the Company and its Subsidiaries) of
its obligations under, or the termination or failure to be in full
force of, a Major Project Document, unless such breach when taken
together with all other such breaches would not be materially adverse
to the Company and its Subsidiaries taken as a whole; and (x) certain
events of bankruptcy or insolvency with respect to the Company or any
of its Significant Subsidiaries. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate
principal amount of the then outstanding Notes may declare all the
Notes to be due and payable. Notwithstanding the foregoing, in the case
of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes will become due and payable without
further action or notice. Holders may not enforce the Indenture or the
Notes except as provided in the Indenture and the Collateral Trust
Agreement. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Notes may direct the Trustee
in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment
of principal, interest or premium or Special Interest, if any) if it
determines that withholding notice is in their interest. The Holders of
a majority in aggregate principal amount of the Notes then outstanding
by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event
of Default in the payment of principal of, or premium, if any, or
interest or Special Interest, if any, on, the Notes. The Issuers are
required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Issuers are required upon
becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
EXHIBIT A-7
(13) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not
the Trustee.
(14) NO RECOURSE AGAINST OTHERS. A director, officer,
employee, incorporator or stockholder of the Company or any Guarantor,
as such, will not have any liability for any obligations of the Company
or such Guarantor under the Notes, the Subsidiary Guarantees or the
Indenture or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. This waiver and release are
part of the consideration for the issuance of the Notes.
(15) AUTHENTICATION. This Note will not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
(16) ABBREVIATIONS. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants
with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
(17) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL
NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights
provided to Holders of Notes under the Indenture, Holders of Restricted
Global Notes and Restricted Definitive Notes will have all the rights
set forth in the Registration Rights Agreement, dated as of March 23,
2004 (the "Registration Rights Agreement"), among the Company, CalGen
Finance, the Guarantors and the initial purchaser of the Notes.
(18) CUSIP NUMBERS. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the
Notes and the Trustee may use CUSIP numbers in notices of redemption as
a convenience to Holders. No representation is made as to the accuracy
of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
(19) NON-RECOURSE. Notwithstanding anything to the
contrary set forth in the Indenture, this Note, any Security Document
or any other Note Document, this Note and the Subsidiary Guarantees are
non-recourse secured obligations of the Company and Guarantors,
respectively. The only recourse a holder of the Notes will have with
respect to the payment of principal of, or interest or premium or
Special Interest, if any, on, this Note (whether under the Indenture or
the Note, or pursuant to the Subsidiary Guarantees) will be enforcement
of its rights against CalGen Finance under the Indenture or against the
Collateral pursuant to the Security Documents.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture, the Registration Rights Agreement and the
Security Documents. Requests may be made to:
Calpine Generating Company, LLC
CalGen Finance Corp.
00 Xxxx Xxx Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Chief Financial Officer
EXHIBIT A-8
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:
---------------------------------
(Insert assignee's legal name)
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
-------------------
Your Signature:
----------------------------------------------------
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*:
---------------------------
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
EXHIBIT A-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$---------------
Date:
-------------------
Your Signature:
----------------------------------------------------
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.:
---------------------------------------------
Signature Guarantee*:
---------------------------
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
EXHIBIT A-10
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
Principal Amount
at maturity of this
Amount of decrease Amount of increase in Global Note Signature of
in Principal Amount Principal Amount following such authorized officer
at maturity of at maturity of decrease of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ---------------- ---------------- ------------- ---------
* This schedule should be included only if the Note is issued in global form.
EXHIBIT A-11
EXHIBIT B
[Face of Regulation S Temporary Floating Rate Global Note]
--------------------------------------------------------------------------------
CUSIP U1305Q AA 7
ISIN USU1305QAA77
First Priority Secured Floating Rate Note due 2009
No.
--- ------------
CALPINE GENERATING COMPANY, LLC
CALGEN FINANCE CORP.
promises to pay to
---------------
or registered assigns,
the principal sum of
----------------------------------------------------------
Dollars on April 1, 2009.
Interest Payment Dates: January 1, April 1, July 1 and October 1
Record Dates: December 15, March 15, June 15 and September 15
CALPINE GENERATING COMPANY, LLC
CALGEN FINANCE CORP.
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
Dated: March 23, 2004
This is one of the Notes referred to in the within-mentioned Indenture:
WILMINGTON TRUST FSB,
as Trustee
By:
---------------------------------------
Authorized Signatory
EXHIBIT B-1
[Back of Regulation S Temporary Floating Rate Global Note]
First Priority Secured Floating Rate Notes 2009
[THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.]
[THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS NOT A U.S.
PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON
AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME
PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE
144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE
EXHIBIT B-2
SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE REGISTRATION OF TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES AT THE TIME OF TRANSFER OF LESS THAN
$250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS
IN COMPLIANCE WITH THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS NOTE OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES
ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.]
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. Calpine Generating Company, LLC, a Delaware
limited liability company (the "Company"), and CalGen Finance Corp., a
Delaware corporation ("CalGen Finance" and, together with the Company,
the "Issuers"), jointly and severally promise to pay interest on the
principal amount of this Note at the Applicable First Priority LIBOR
Rate (as defined below) per annum from March 23, 2004 until maturity
and will pay the Special Interest, if any, payable pursuant to the
Registration Rights Agreement referred to below. The Issuers will pay
interest and Special Interest, if any, semiannually in arrears on
January 1, April 1, July 1 and October 1 of each year or, if any such
day is not a Business Day, on the next succeeding Business Day (each,
an "Interest Payment Date"). Interest on the Notes will accrue from the
most recent date to which interest has been paid or, if no interest has
been paid, from the date of issuance; provided, that if there is no
existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from
such next succeeding Interest Payment Date; provided, further, that the
first Interest Payment Date will be July 1, 2004. The Issuers will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at a rate that is 1% per annum in excess of the rate
then in effect. The Issuers will pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Special Interest (without regard to any
applicable grace periods) from time to time on demand at
EXHIBIT B-3
the same rate to the extent lawful. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
"Applicable First Priority LIBOR Rate" means, for each
interest period, 375 basis points over the rate determined by the
Company (notice of such rate to be sent to the Trustee by the Company
on the date of determination thereof) equal to the greater of (x)
1.250% or (y) the applicable British Bankers' Association LIBOR rate
for deposits in U.S. dollars for a period of one, two, three or six
months (as the Company may elect in an Officer's Certificate delivered
to the Trustee as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such interest period; provided, that, if no
such British Bankers' Association LIBOR rate is available to the
Company, the Applicable First Priority LIBOR Rate for the relevant
interest period shall instead be the rate at which Xxxxxx Xxxxxxx
Senior Funding, Inc. or one of its affiliate banks offers to place
deposits in U.S. dollars with first-class banks in the London interbank
market for a period of one, two, three or six months (as applicable) as
of approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such interest period, in amounts equal to $1.0
million.
PRINCIPAL. The Issuers jointly and severally promise to pay
principal of the Notes in quarterly installments, commencing July 1,
2007, as follows:
Percentage of Original
Payment Date Principal Amount Payable
------------ ------------------------
July 1, 2007........................ 0.250%
October 1, 2007..................... 0.250%
January 1, 2008..................... 0.250%
April 1, 2008....................... 0.250%
July 1, 2008........................ 0.250%
October 1, 2008..................... 0.250%
January 1, 2009..................... 0.250%
The Issuers jointly and severally promise to pay all remaining
principal of, interest and Special Interest, if any, on, and fees and
costs in respect of the Notes on April 1, 2009.
Until this Regulation S Temporary Global Note is exchanged for one or
more Regulation S Permanent Global Notes, the Holder hereof shall not be
entitled to receive payments of interest hereon; until so exchanged in full,
this Regulation S Temporary Global Note shall in all other respects be entitled
to the same benefits as other Notes under the Indenture.
(2) METHOD OF PAYMENT. The Company will pay interest on
the Notes (except defaulted interest) and Special Interest, if any, to
the Persons who are registered Holders of Notes at the close of
business on the December 15, March 15, June 15 or September 15
immediately preceding the Interest Payment Date, even if such Notes are
canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.12 of the Indenture with respect
to defaulted interest. The Notes will be payable as to principal,
premium, interest and Special Interest, if any, at the office or agency
of the Company maintained for such purpose within or without the City
and State of New York, or, at the option of the Company, payment of
interest and Special Interest, if any, may be made by check mailed to
the Holders at their addresses set forth in the register of Holders;
provided, that payment by wire transfer of immediately available funds
will be required with respect to principal of, and interest, premium
EXHIBIT B-4
and Special Interest, if any, on, all Global Notes and all other Notes
the Holders of which will have provided wire transfer instructions to
the Company or the Paying Agent. Such payment will be in such coin or
currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
(3) PAYING AGENT AND REGISTRAR. The Company, on behalf of
itself and CalGen Finance, will maintain an office or agency where
Notes may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Notes may be presented for
payment ("Paying Agent"). The Registrar will keep a register of the
Notes and of their transfer and exchange. The Issuers may appoint one
or more co-registrars and one or more additional paying agents. The
term "Registrar" includes any co-registrar and the term "Paying Agent"
includes any additional paying agent. The Issuers may change any Paying
Agent or Registrar without notice to any Holder. The Company will
notify the Trustee in writing of the name and address of any Agent not
a party to the Indenture. If the Issuers fail to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as
such. The Company or any of its Subsidiaries may act as Paying Agent or
Registrar. The Issuers initially appoint The Depository Trust Company
to act as Depositary with respect to the Global Notes. The Issuers
initially appoint the Trustee to act as the Registrar and Paying Agent
and to act as Custodian with respect to the Global Notes.
(4) INDENTURE. The Company issued the Notes under a First
Priority Indenture, dated as of March 23, 2004 (the "Indenture"), among
the Issuers, the Guarantors and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended
(15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions
of the Indenture shall govern and be controlling. The Notes are secured
obligations of the Company and CalGen Finance limited to $235.0 million
in aggregate principal amount. The Notes are secured on a
first-priority basis, Equally and Ratably with all other First Priority
Lien Obligations, by (a) a security interest in all the assets of the
Company and the Guarantors other than Excluded Assets, and (b) a pledge
of the equity interests in the Company and CalGen Expansion Company,
LLC, subject to Permitted Prior Liens.
(5) OPTIONAL REDEMPTION. The Issuers may not redeem all
or any part of the Notes prior to April 1, 2007. On or after April 1,
2007, the Issuers may redeem all or a part of the Notes, upon not less
than 30 nor more than 60 days prior notice, at the redemption prices
(expressed at percentages of principal amount) set forth below plus
accrued and unpaid interest and Special Interest, if any, on the Notes
redeemed, to the applicable redemption date, if redeemed during the
twelve-month period beginning on April 1 of the years indicated below,
subject to the rights of the Holders on the relevant record date to
receive interest on the relevant interest payment date:
Year Percentage
---- ----------
2007......................................... 102.5%
2008, and thereafter......................... 100.0%
Unless the Company defaults in the payment of the redemption
price, interest will cease to accrue on the Notes or portions thereof
called for redemption on the applicable redemption date.
EXHIBIT B-5
(6) MANDATORY REDEMPTION. The Issuers will not be
required to make mandatory redemption or sinking fund payments with
respect to the Notes.
(7) REPURCHASE AT OPTION OF HOLDER..
(a) Upon the occurrence of a Change of Control,
the Issuers will make an offer (a "Change of Control Offer") to each
Holder to repurchase all or any part (equal to $1,000 or an integral
multiple of $1,000) of such Holder's Notes at a purchase price in cash
equal to 101% of the aggregate principal amount thereof plus accrued
and unpaid interest and Special Interest, if any, on the Notes
purchased, to, but excluding, the date of purchase, subject to the
rights of Holders on the relevant record date to receive interest due
on the relevant interest payment date. Within 30 days following any
Change of Control, the Issuers will mail a notice to each Holder
describing the transaction or transactions that constitute the Change
of Control and stating the procedures governing the Change of Control
Offer as required by Section 4.15 of the Indenture.
(b) The Issuers will be required to use the Net
Proceeds from any Asset Sale, Casualty Event or Condemnation Event to
offer to prepay Notes and other First Priority Lien Obligations (an
"Asset Sale Offer"). The offer price in any Asset Sale Offer will be
equal to 100% of the principal amount plus accrued and unpaid interest
and Special Interest, if any, on the Notes purchased, to, but
excluding, the date of purchase, and will be payable in cash, subject
to the rights of Holders on the relevant record date to receive
interest due on the relevant interest payment date. If the aggregate
principal amount of Notes and other First Priority Lien Obligations
tendered into such Asset Sale Offer (or required to be purchased,
prepaid or redeemed) exceeds the amount of Net Proceeds available
therefor, the Trustee will select the Notes and such other First
Priority Lien Obligations to be purchased on a pro rata basis.
(8) NOTICE OF REDEMPTION. Notice of redemption will be
mailed at least 30 days but not more than 60 days before the redemption
date to each Holder whose Notes are to be redeemed at its registered
address. Notes in denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000, unless all of the Notes
held by a Holder are to be redeemed. On and after the redemption date
interest ceases to accrue on Notes or portions thereof called for
redemption.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples thereof. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted
by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part.
Also, the Company need not exchange or register the transfer of any
Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the
corresponding Interest Payment Date.
This Regulation S Temporary Global Note is exchangeable in whole or in
part for one or more Global Notes only (i) on or after the termination of the
40-day restricted period (as defined in Regulation S) and (ii) upon presentation
of certificates (accompanied by an Opinion of Counsel, if applicable) required
by Article 2 of the Indenture. Upon exchange of this Regulation S Temporary
Global Note for one or more Global Notes, the Trustee shall cancel this
Regulation S Temporary Global Note.
EXHIBIT B-6
(10) PERSONS DEEMED OWNERS. The registered Holder of a
Note may be treated as its owner for all purposes.
(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions and the Collateral Trust Agreement, the Indenture, the
Subsidiary Guarantees and the Notes may be amended or supplemented with
the consent of the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding (including consents
obtained in connection with a purchase or tender offer or exchange
offer for Notes) voting as a single class, and any existing default or
compliance with any provision of the Indenture, the Subsidiary
Guarantees or the Notes may be waived with the consent of the Holders
of a majority in principal amount of the Notes then outstanding voting
as a single class. Without the consent of any Holder, the Indenture,
the Subsidiary Guarantees and the Notes may be amended or supplemented
to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes,
to provide for the assumption of the Company's or any Guarantor's
obligations to Holders of the Notes in case of a merger or
consolidation, to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such
Holder, to comply with the requirements of the SEC in order to effect
or maintain the qualification of the Indenture under the Trust
Indenture Act, to make, complete or confirm any grant of Collateral
permitted or required by the Indenture or any of the Security Documents
or any release of Collateral that becomes effective as set forth in the
Indenture and the Security Documents, to conform the text of the
Indenture, the Subsidiary Guarantees, the Security Documents or the
Notes to any provision of the Description of Notes in the Offering
Memorandum to the extent such provision of the Description of Notes in
the Offering Memorandum was intended to be a verbatim recitation of a
provision of the Indenture, the Subsidiary Guarantees, the Security
Documents or the Notes, or to allow any Guarantor to execute a
supplemental indenture in the form of Exhibit G to the Indenture and/or
a Note Guarantee with respect to the Notes.
(12) DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest or Special
Interest, if any, on any of the Notes; (ii) default in the payment when
due of the principal of or premium, if any, on any of the Notes, (iii)
failure by the Company or any of its Subsidiaries to comply with
Section 3.09, 4.10, 4.15 or 4.19 of the Indenture; (iv) failure by the
Company or any of its Subsidiaries to observe or perform any other
agreement in the Indenture or the Security Documents for 30 days after
notice to the Company by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding voting as a
single class; (v) default under certain other agreements relating to
Indebtedness of the Company and its Subsidiaries which default is
caused by the failure to pay principal of, or interest or premium, if
any, on, such Indebtedness, or results in the acceleration of such
Indebtedness prior to its express maturity; (vi) final judgments for
the payment of money that remain undischarged for a period of 60 days,
provided the aggregate amount of such judgments exceeds $25.0 million
(excluding those covered by insurance); (vii) the repudiation of the
Security Documents by the Company or a Guarantor or the
unenforceability of the Security Documents under certain circumstances;
(viii) except as permitted by the Indenture, any Subsidiary Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid
or shall cease for any reason to be in full force and effect or any
Guarantor or any Person acting on its behalf shall deny or disaffirm
its obligations under such Guarantor's Subsidiary Guarantee; (ix) the
breach by any Person (other than the Company and its Subsidiaries) of
its obligations under, or the termination or failure to be in full
force of, a Major Project Document, unless such breach when taken
together with all other such breaches would not be materially adverse
to the Company and its Subsidiaries taken as a whole; and (x) certain
events of bankruptcy or insolvency with respect to the Company or any
of its Significant Subsidiaries. If any Event of
EXHIBIT B-7
Default occurs and is continuing, the Trustee or the Holders of at
least 25% in aggregate principal amount of the then outstanding Notes
may declare all the Notes to be due and payable. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain
events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not
enforce the Indenture or the Notes except as provided in the Indenture
and the Collateral Trust Agreement. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes
may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of the Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default
relating to the payment of principal, interest or premium or Special
Interest, if any) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of
the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of principal of, or premium,
if any, or interest or Special Interest, if any, on, the Notes. The
Issuers are required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Issuers are required
upon becoming aware of any Default or Event of Default, to deliver to
the Trustee a statement specifying such Default or Event of Default.
(13) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not
the Trustee.
(14) NO RECOURSE AGAINST OTHERS. A director, officer,
employee, incorporator or stockholder of the Company or any Guarantor,
as such, will not have any liability for any obligations of the Company
or such Guarantor under the Notes, the Subsidiary Guarantees or the
Indenture or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. This waiver and release are
part of the consideration for the issuance of the Notes.
(15) AUTHENTICATION. This Note will not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
(16) ABBREVIATIONS. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants
with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
(17) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL
NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights
provided to Holders of Notes under the Indenture, Holders of Restricted
Global Notes and Restricted Definitive Notes will have all the rights
set forth in the Registration Rights Agreement, dated as of March 23,
2004 (the "Registration Rights Agreement"), among the Company, CalGen
Finance, the Guarantors and the initial purchaser of the Notes.
(18) CUSIP NUMBERS. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the
Notes and the Trustee may use CUSIP numbers in notices of redemption as
a convenience to Holders. No representation is made as to the accuracy
of such numbers either as
EXHIBIT B-8
printed on the Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed
thereon.
(19) NON-RECOURSE. Notwithstanding anything to the
contrary set forth in the Indenture, this Note, any Security Document
or any other Note Document, this Note and the Subsidiary Guarantees are
non-recourse secured obligations of the Company and Guarantors,
respectively. The only recourse a holder of the Notes will have with
respect to the payment of principal of, or interest or premium or
Special Interest, if any, on, this Note (whether under the Indenture or
the Note, or pursuant to the Subsidiary Guarantees) will be enforcement
of its rights against CalGen Finance under the Indenture or against the
Collateral pursuant to the Security Documents.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture, the Registration Rights Agreement and the
Security Documents. Requests may be made to:
Calpine Generating Company, LLC
CalGen Finance Corp.
00 Xxxx Xxx Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Chief Financial Officer
EXHIBIT B-9
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:
---------------------------------
(Insert assignee's legal name)
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
-----------------
Your Signature:
-------------------------------------------------------
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*:
---------------------------
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
EXHIBIT B-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:
Section 4.10 Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$---------------
Date:
-----------------
Your Signature:
-------------------------------------------------------
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.:
-----------------------------------------------
Signature Guarantee*:
---------------------------
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
EXHIBIT B-11
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or of other Restricted Global Notes
for an interest in this Regulation S Temporary Global Note, have been made:
Principal Amount
at maturity of this
Amount of decrease Amount of increase in Global Note Signature of
in Principal Amount Principal Amount following such authorized officer
at maturity of at maturity of decrease of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ---------------- ---------------- ------------- ---------
EXHIBIT B-12
EXHIBIT C
FORM OF CERTIFICATE OF TRANSFER
Calpine Generating Company, LLC
CalGen Finance Corp.
00 Xxxx Xxx Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Wilmington Trust FSB, as Trustee
c/o Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Re: First Priority Secured Floating Rate Notes due 2009
---------------------------------------------------
Reference is hereby made to the First Priority Indenture, dated as of
March 23, 2004 (the "Indenture"), among Calpine Generating Company, LLC, a
Delaware limited liability company (the "Company"), CalGen Finance Corp., a
Delaware corporation, the Guarantors party thereto and Wilmington Trust FSB, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably believed
and believes is purchasing the beneficial interest or Definitive Note for its
own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE TEMPORARY REGULATION S GLOBAL NOTE, THE REGULATION S GLOBAL NOTE OR A
DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a Person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such
EXHIBIT C-1
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed Transfer is being made prior to the
expiration of the Restricted Period, the Transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note, the Temporary
Regulation S Global Note and/or the Definitive Note and in the Indenture and the
Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and
in accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or
a subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities
Act;
or
(d) [ ] such Transfer is being effected to an
Institutional Accredited Investor and pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A,
Rule 144 or Rule 904, and the Transferor hereby further certifies that
it has not engaged in any general solicitation within the meaning of
Regulation D under the Securities Act and the Transfer complies with
the transfer restrictions applicable to beneficial interests in a
Restricted Global Note or Restricted Definitive Notes and the
requirements of the exemption claimed, which certification is supported
by (1) a certificate executed by the Transferee in the form of Exhibit
D to the Indenture and (2) if such Transfer is in respect of a
principal amount of Notes at the time of transfer of less than
$250,000, an Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with
the Securities Act. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the IAI
Global Note and/or the Definitive Notes and in the Indenture and the
Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
EXHIBIT C-2
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes or Restricted
Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes or Restricted Definitive Notes and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
--------------------------------------------
[Insert Name of Transferor]
By:
-----------------------------------------
Name:
Title:
Dated:
---------------------
EXHIBIT C-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP
_________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP
_________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(iv) [ ] Unrestricted Global Note (CUSIP
_________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
EXHIBIT C-4
EXHIBIT D
FORM OF CERTIFICATE OF EXCHANGE
Calpine Generating Company, LLC
CalGen Finance Corp.
00 Xxxx Xxx Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Wilmington Trust FSB
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-00000
Re: First Priority Secured Floating Rate Notes due 2009
---------------------------------------------------
(CUSIP ____________)
Reference is hereby made to the First Priority Indenture, dated as of
March 23, 2004 (the "Indenture"), among Calpine Generating Company, LLC, a
Delaware limited liability company (the "Company"), CalGen Finance Corp., a
Delaware corporation, the Guarantors party thereto and Wilmington Trust FSB, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the
EXHIBIT D-1
Securities Act and (iv) the Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] [ ]144A Global Note, [ ]Regulation S Global Note, [ ]IAI Global Note
with an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer and (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
EXHIBIT D-2
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
-----------------------------------------------
[Insert Name of Transferor]
By:
--------------------------------------------
Name:
Title:
Dated:
-------------------
EXHIBIT D-3
EXHIBIT E
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Calpine Generating Company, LLC
CalGen Finance Corp.
00 Xxxx Xxx Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Wilmington Trust FSB
c/o Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Re: First Priority Secured Floating Rate Notes due 2009
---------------------------------------------------
Reference is hereby made to the First Priority Indenture, dated as of
March 23, 2004 (the "Indenture"), among Calpine Generating Company, LLC, a
Delaware limited liability company (the "Company"), CalGen Finance Corp., a
Delaware corporation, the Guarantors party thereto and Wilmington Trust FSB, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and, if such
transfer is in respect of a principal amount of Notes, at the time of transfer
of less than $250,000, an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144(k) under the Securities Act or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
Person purchasing the Definitive Note or beneficial interest in a Global Note
from us in a transaction meeting the
EXHIBIT E-1
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
------------------------------------------------
[Insert Name of Accredited Investor]
By:
---------------------------------------------
Name:
Title:
Dated:
---------------------
EXHIBIT E-2
EXHIBIT F
FORM OF NOTATION OF SUBSIDIARY GUARANTEE
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, on a non-recourse basis to the extent set forth in the First
Priority Indenture, dated as of March 23, 2004 (the "Indenture"), among Calpine
Generating Company, LLC, a Delaware limited liability company, CalGen Finance
Corp., a Delaware corporation, the Guarantors party thereto and Wilmington Trust
FSB, as trustee (the "Trustee"), and subject to the provisions of the Indenture,
(a) the due and prompt payment of the principal of, premium, if any, and
interest and Special Interest, if any, on the Notes (as defined in the
Indenture), whether at maturity, by acceleration, redemption or otherwise, the
due and prompt payment of interest on overdue principal of and interest and
Special Interest, if any, on the Notes, if any, if lawful, and the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee all in accordance with the terms of the Indenture, and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee and the
Indenture are expressly set forth in Article 11 of the Indenture and reference
is hereby made to the Indenture for the precise terms of the Subsidiary
Guarantee.
[NAME OF GUARANTOR(S)]
By:
-------------------------------------
Name:
Title:
EXHIBIT F-1
EXHIBIT G
[FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS]
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, 20__, among __________________, a ___________________ (the
"Guaranteeing Subsidiary"), Calpine Generating Company, LLC (the "Company"),
CalGen Finance Corp. ("CalGen Finance" and, together with the Company, the
"Issuers"), the other Guarantors (as defined in the Indenture referred to
herein) and Wilmington Trust FSB, as trustee under the Indenture referred to
herein (the "Trustee").
WITNESSETH
WHEREAS, the Issuers have heretofore executed and delivered to the
Trustee a First Priority Indenture, dated as of March 23, 2004 (the
"Indenture"), providing for the issuance of an aggregate principal amount of
$235.0 million of First Priority Secured Floating Rate Notes due 2009 (the
"Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Subsidiary Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby
agrees to provide an unconditional Guarantee on the terms and subject to the
conditions set forth in the Note Guarantee and in the Indenture, including but
not limited to Article 11 thereof, and to become bound as a "Guarantor" under
the Indenture.
3. NO RECOURSE AGAINST OTHERS. This Subsidiary Guarantee is a
non-recourse secured obligation of the Subsidiary Guarantor. The only recourse a
Holder of Notes will have under the Subsidiary Guarantee is enforcement of its
rights against the Collateral securing the Subsidiary Guarantee pursuant to the
Security Documents. No past, present or future director, officer, employee,
incorporator, stockholder or agent of the Guaranteeing Subsidiary, as such,
shall have any liability for any obligations of the Company or any Guaranteeing
Subsidiary under the Notes, any Subsidiary Guarantee, the Indenture or this
Supplemental Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of the Notes by accepting a
Note waives and releases all such liability. This waiver and release are part of
the consideration for issuance of the Notes. Such waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
SEC that such a waiver is against public policy.
4. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
EXHIBIT G-1
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
5. COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
6. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
7. THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.
EXHIBIT G-2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: , 20
----------------- ---
[GUARANTEEING SUBSIDIARY]
By:
------------------------------------
Name:
Title:
[COMPANY]
By:
------------------------------------
Name:
Title:
[EXISTING GUARANTORS]
By:
------------------------------------
Name:
Title:
[TRUSTEE],
as Trustee
By:
------------------------------------
Authorized Signatory
EXHIBIT G-3
EXHIBIT H
SUBORDINATION TERMS
[TO BE INCLUDED AS AN ARTICLE IN THE INSTRUMENT EVIDENCING "AFFILIATE
SUBORDINATED INDEBTEDNESS" INCURRED PURSUANT TO CLAUSE (9)(a) OF THE DEFINITION
OF PERMITTED DEBT AND "THIRD PARTY SUBORDINATED INDEBTEDNESS" INCURRED PURSUANT
TO CLAUSE (10) OF THE DEFINITION OF PERMITTED INDEBTEDNESS]
[THE COLLATERAL AGENT SHALL EITHER BE A PARTY TO OR A THIRD PARTY BENEFICIARY OF
THESE SUBORDINATION TERMS]
ARTICLE [__]
SUBORDINATION
Section [__].1. Definitions. All capitalized terms used herein
and not otherwise defined herein shall have the meanings given to such terms in
the Collateral Trust Agreement, dated as of March 23, 2004, among Calpine CalGen
Holdings, Inc., Calpine Generating Company, LLC ("CalGen"), CalGen Finance
Corp., the guarantors party thereto from time to time (the "Guarantors"), the
Secured Debt Representatives party thereto and Wilmington Trust Company, as
collateral agent (the "Collateral Agent"), as in effect on the date hereof. As
used in this Article, the following terms shall have the following respective
meanings:
"Junior Claimant" means [INSERT NAME OF LENDER UNDER
SUBORDINATED DEBT].
"Proceeding" means any (a) insolvency, bankruptcy,
receivership, liquidation, reorganization, readjustment, composition or
other similar proceeding of or against the Subordinated Debtor or its
property or its creditors as such, (b) proceeding for any liquidation,
dissolution or other winding-up of the Subordinated Debtor, voluntary
or involuntary, whether or not involving insolvency or bankruptcy
proceedings, (c) general assignment for the benefit of creditors of the
Subordinated Debtor, or (d) other marshalling of the assets of the
Subordinated Debtor.
"Senior Claimants" means the holders of Senior
Obligations.
"Senior Claim Documents" means the Secured Debt
Documents other than the Other Junior Lien Debt Documents.
"Senior Claims" means, collectively, (a) the principal
of, and premium, if any, and interest on, the Senior Obligations (in
each case, including, without limitation, any interest accruing thereon
at the legal rate after the commencement of any Proceeding and any
additional interest that would have accrued thereon but for the
commencement of such Proceeding), and (b) all other Obligations of the
Subordinated Debtor to the Senior Claimants, whether now existing or
hereafter incurred or created, under or with respect to the Senior
Claim Documents or any replacement, supplement to or refinancing of the
Senior Obligations.
"Senior Obligations" means all Secured Obligations other
than the Other Junior Lien Obligations.
EXHIBIT H-1
"Senior Obligations Termination Date" means the date on
which all Senior Obligations (including all interest accrued thereon
after the commencement of any bankruptcy, insolvency or liquidation
proceeding at the rate, including any applicable post-default rate,
specified in the applicable Senior Claim Documents, even if such
interest is not enforceable, allowable or allowed as a claim in such
proceeding) have been paid in full in cash (and/or defeased in
accordance with the applicable Senior Claim Documents), all commitments
to extend credit under all Senior Claim Documents have terminated or
expired and all outstanding letters of credit issued pursuant to any
Senior Claim Documents have been cancelled, terminated or cash
collateralized at 102.5% of the aggregate undrawn amount.
"Subordinated Debt" means all indebtedness owing to
Junior Claimant arising under or in respect of the Subordinated Debt
Documents.
"Subordinated Debt Documents" means [DESCRIBE
SUBORDINATED DEBT INSTRUMENT], any promissory note or other instrument
relating thereto and any other documents or instruments directly
relating to the foregoing (in each case, including any amendments,
replacements or substitutions thereof).
"Subordinated Debtor" means [INSERT CALGEN OR GUARANTOR
INCURRING THE SUBORDINATED DEBT].
Section [_].2. Certain Subordination Terms. Until the Senior
Obligations Termination Date, and notwithstanding anything in the Subordinated
Debt Documents to the contrary:
[__].2.1. Except as permitted under the Senior Claim
Documents, the Subordinated Debtor shall not, directly or indirectly, make any
payment of principal, interest or otherwise on or in respect of the Subordinated
Debt.
[__].2..2. Except for the right to accept payments as
provided in Section [__].2.1 or [__].2.5(b), Junior Claimant shall not demand,
xxx for or accept from the Subordinated Debtor or any other Person any such
payment or collateral, nor take any other action to enforce or collect upon any
such payment or to enforce its rights to receive any such payment, in either
case in respect of the Subordinated Debt, provided, however, that nothing herein
shall limit the right or ability of Junior Claimant (i) to receive payments from
the Subordinated Debtor in respect of the Subordinated Debt as provided in
Section [__].2.1 so long as no default or event of default under any Secured
Debt Document has occurred and is continuing, or (ii) to accelerate the maturity
of the Subordinated Debt at any time after all of the Senior Claims have been
accelerated; and provided further, that in the event that after an acceleration
any of the Senior Claimants rescind the acceleration of the Senior Claims, and
provide written notice to Junior Claimant thereof, or Junior Claimant otherwise
becomes aware of such rescission, Junior Claimant shall rescind the acceleration
of the Subordinated Debt.
[__].2.3. Neither the Subordinated Debtor nor Junior
Claimant shall take any action prejudicial to or inconsistent with the Senior
Claimants' priority position over Junior Claimant created by this Article,
including, without limitation, any action which will hinder, delay or otherwise
prevent the Senior Claimants from taking any action they deem necessary to
enforce rights with respect to the Senior Claims or the Lien of the Senior Claim
Documents. The Junior Claimant shall not take any action or otherwise act to
contest on account of the Subordinated Debt (i) the validity or priority of any
Liens or security interests granted to, or for the benefit of, the Senior
Claimants, (ii) the relevant rights and duties of the Senior Claimants with
respect to Junior Claimant on account of any Subordinated Debt as established in
this Article or (iii) the Senior Claimants' exercise of remedies in accordance
with the Senior Claim Documents.
EXHIBIT H-2
[__].2.4. Each document or instrument evidencing
Subordinated Debt shall bear a legend providing that payment of the Subordinated
Debt thereunder has been subordinated to prior payment of the Senior Claims in
the manner and to the extent set forth in this Article.
[__].2.5. Junior Claimant shall not commence or join
with any other creditor or creditors of the Subordinated Debtor in commencing
any Proceeding against the Subordinated Debtor, [CalGen, CalGen Holdings or any
Guarantor -- ADD ALL THAT ARE NOT SUBORDINATED DEBTORS], but may join in any
Proceeding after it has commenced. At any general meeting of creditors of
Subordinated Debtor, [CalGen, CalGen Holdings or any Guarantor -- ADD ALL THAT
ARE NOT SUBORDINATED DEBTORS], or in the event of any Proceeding, if all Senior
Claims have not been paid in full in cash at such time, the Collateral Agent on
behalf of the Senior Claimants is hereby irrevocably authorized at any such
meeting or in any such Proceeding:
(a) To enforce claims comprising
Subordinated Debt in the name of Junior Claimant, by proof of
debt, proof of claim, suit or otherwise;
(b) To collect any assets of the
Subordinated Debtor distributed, divided or applied by way of
dividend or payment as a result of a Proceeding, or such
securities issued, on account of Subordinated Debt as a result
thereof and apply the same, or the proceeds of any realization
upon the same that the Senior Claimants in their discretion
elect to effect, to Senior Claims until all Senior Claims
shall have been paid in full in cash (the Senior Claimants
hereby agreeing to render any surplus to Junior Claimant
and/or other subordinated creditors, as their interests
appear, or to interplead such surplus with a court of
competent jurisdiction); and
(c) To take generally any action in
connection with any such meeting or proceeding which Junior
Claimant might otherwise take in respect of the Subordinated
Debt and claims relating thereto.
After the commencement of any such
Proceeding, Junior Claimant may inquire in writing of the Collateral Agent on
behalf of the Senior Claimants whether the respective Senior Claimants intend to
exercise the foregoing rights with respect to the Subordinated Debt. Should the
Senior Claimants fail, at least 20 days before the deadline therefor, either to
file a proof of claim with respect to the Subordinated Debt and to furnish a
copy thereof to Junior Claimant, or to inform Junior Claimant in writing that
the Senior Claimants intend to exercise their rights to assert the Subordinated
Debt in the manner hereinabove provided, Junior Claimant may, but shall not be
required to, proceed to file a proof of claim with respect to the Subordinated
Debt and take such further steps with respect thereto, not inconsistent with
this Article, as Junior Claimant may deem proper.
[__].2.6. Upon the occurrence and during the
continuation of an event of default under a Secured Debt Document, Junior
Claimant may, but shall have no obligation to, upon not less than 10 days prior
written notice to the Collateral Agent, purchase all of the outstanding Senior
Obligations owing to the Senior Claimants by irrevocably tendering, in
immediately available funds, full payment of the Purchase Price (as defined
below) to the Senior Claimants:
(a) The Purchase Price shall be equal
to the total amount of Senior Claims at the time of
acceleration (assuming such obligations have been
accelerated);
EXHIBIT H-3
(b) Any such purchase by Junior
Claimant shall be without warranty by, or recourse to, the
Senior Claimants, except with respect to the legal and
beneficial ownership by the Senior Claimants of the
Obligations so purchased, free and clear of all Liens and
rights of others; and
(c) Concurrently with any such
purchase, the Senior Claimants shall forthwith sell, assign,
transfer and convey to Junior Claimant all of their right,
title and interest in and to the Senior Obligations, and all
Liens and other security interests in favor of the Senior
Claimants securing the obligations of the Subordinated Debtor
in connection therewith.
Section [__].3. Senior Claim Documents. The Junior
Claimant acknowledges that it has been provided with a copy of the Senior Claim
Documents and has read and is familiar with the provisions thereof.
Section [__].4. Time of Filing. Notwithstanding the time
of filing, attachment or recording of any document or other instrument, it is
agreed by Junior Claimant that any Liens arising under or pursuant to the Senior
Claim Documents shall be senior to any Liens arising in favor of Junior Claimant
as part of or relating to the Subordinated Debt Documents, if any; provided,
however, that nothing herein shall be deemed to permit Junior Claimant to obtain
any such Liens.
Section [__].5. Wrongful Collections. Should any payment
on account of, or any collateral for any part of, the Subordinated Debt be
received by Junior Claimant in violation of this Article, such payment or
collateral shall be delivered forthwith to the Collateral Agent by the recipient
for application to Senior Claims, in the form received. The Collateral Agent is
irrevocably authorized to supply any required endorsement or assignment which
may have been omitted. Until so delivered, any such payment or collateral shall
be held by the recipient in trust for the Senior Claimants and shall not be
commingled with other funds or property of the recipient.
Section [__].6. Ownership of Subordinated Debt;
Amendment of Subordinated Debt Documents.
[__].6.1. The Junior Claimant
represents and warrants that it is the lawful owner of the Subordinated Debt.
Any security interest in the Junior Claimant's interest in the Subordinated Debt
will at all times be subject to the rights of the Senior Claimants hereunder.
The Junior Claimant agrees that it may not assign all or any portion of the
Subordinated Debt or any of its rights or remedies under the Subordinated Debt
Documents unless any assignee expressly agrees in writing for the benefit of the
Collateral Agent that it takes such Subordinated Debt subject in all respects to
the rights of the Senior Claimants hereunder.
[__].6.2. The Subordinated Debt
Documents may not be amended so as to have an adverse effect upon the Senior
Claims or the Subordinated Debtor's ability to pay the Senior Claims at any
time.
Section [__].7. Waivers. The Collateral Agent and the
Senior Claimants are hereby authorized to demand specific performance of this
Article, whether or not the Subordinated Debtor shall have complied with the
provisions hereof applicable to it, at any time when Junior Claimant shall have
failed to comply with any provision hereof applicable to it. Junior Claimant
hereby irrevocably waives any defense based on the adequacy of a remedy at law
which might be asserted as a bar to the remedy of specific performance hereof in
any action brought therefor by the Senior Claimants. Junior Claimant (a) further
waives presentment, notice and protest in connection with all negotiable
instruments
EXHIBIT H-4
evidencing Senior Claims or Subordinated Debt to which Junior Claimant may be a
party, notice of the acceptance of this Article by the Senior Claimants, notice
of any loan made, extension granted or other action taken in reliance hereon,
and all demands and notices of every kind in connection with this Article,
Senior Claims or time of payment of Senior Claims or Subordinated Debt and (b)
hereby assents to any renewal, extension or postponement of the time of payment
of Senior Claims or any other indulgence with respect thereto, to any increase
in the amount of Senior Claims, to any substitution, exchange or release of
collateral therefor and to the addition or release of any person primarily or
secondarily liable thereon and assents to the provisions of any instrument,
security or other writing evidencing Senior Claims.
Section [__].8. Subrogation; No Impairment of
Subordinated Debtor's Obligations. Subject to and from and after the Senior
Obligations Termination Date, Junior Claimant shall be subrogated to the rights
of the Senior Claimants to receive payments or distributions of cash, property
or securities of the Subordinated Debtor applicable to the Senior Claims until
all amounts owing on the Subordinated Debt shall be paid in full. For purposes
of such subrogation, no payments or distributions to the Senior Claimants to
which Junior Claimant would be entitled but for the provisions of this Article,
and no payments paid over by Junior Claimant to Senior Claimants pursuant to
this Article shall, as among the Subordinated Debtor, its creditors other than
the Senior Claimants, and Junior Claimant, be deemed to be a payment or
distribution on account of the Subordinated Debt, it being understood that the
provisions of this Article are intended solely for the purpose of defining the
relative rights of Junior Claimant and the Senior Claimants. Nothing contained
in this Article is intended to or shall impair, as between the Subordinated
Debtor and Junior Claimant, the obligation of the Subordinated Debtor, which is
absolute and unconditional, to pay to Junior Claimant the principal of and the
premium, if any, and the interest on the Subordinated Debt, and all other
amounts payable by the Subordinated Debtor under the Subordinated Debt
Documents, as and when the same shall become due and payable, or to affect the
relative rights of Junior Claimant and creditors of Subordinated Debtor other
than the Senior Claimants.
Section [__].9. Reinstatement. The obligations of Junior
Claimant under this Article shall continue to be effective, or be reinstated, as
the case may be, if at any time any payment in respect of any Senior Claim, or
any other payment to any holder of any Senior Claim in its capacity as such, is
rescinded or must otherwise be restored or returned by the holder of such Senior
Claims upon the occurrence of any Proceeding, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Subordinated Debtor or any substantial part of its property, or
otherwise, all as though such payment had not been made.
Section [__].10. Bankruptcy. This Article shall remain
in full force and effect as between Junior Claimant and the Senior Claimants
notwithstanding the occurrence of any Proceeding affecting the Subordinated
Debtor.
Section [__].11. Further Assurances. The Subordinated
Debtor and Junior Claimant shall execute and deliver to the Senior Claimants
such further instruments and shall take such further action as the Senior
Claimants may at any time or times reasonably request in order to carry out the
provisions and intent of this Article.
Section [__].12. Successors and Assigns. The provisions
of this Article shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Neither Junior Claimant nor
the Senior Claimants shall have a duty to preserve rights against prior parties
in any property of any kind received hereunder. Nothing contained herein shall
impose on the Senior Claimants any duties with respect to any property of the
Subordinated Debtor or Junior Claimant received hereunder.
EXHIBIT H-5
Section [__].13. Governing Law. This Article is intended
to take effect as a sealed instrument, shall be binding upon the parties hereto
and their respective executors, administrators, other legal representatives,
successors and assigns, and shall inure to the benefit of the Senior Claimants,
their respective successors and assigns and shall be governed by the laws of the
State of New York without reference to principles of conflict of laws (other
than Section 5-1401 of the New York General Obligations Law). The parties hereto
intend and agree that this Article shall remain binding on such parties (other
than the Subordinated Debtor) notwithstanding the termination (except upon the
payment in full of Senior Claims in cash) or unenforceability of this Article as
against the Subordinated Debtor.
EXHIBIT H-6
EXHIBIT I
FORM OF WORKING CAPITAL FACILITY
See attached.
EXHIBIT I-1
