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EXHIBIT 10.2
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AMENDED AND RESTATED SECURITY DEPOSIT AGREEMENT
dated as of June 28, 2000
among
COGENTRIX OF RICHMOND, INC.,
BNP PARIBAS, as Agent
and
FIRST UNION NATIONAL BANK,
as Security Agent and Securities Intermediary
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Table of Contents
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ARTICLE I
Definitions...........................................................2
ARTICLE II
Appointment of Security Agent;
Establishment of Accounts ........................................4
SECTION 2.01. Appointment of Security Agent..........................4
SECTION 2.02. Creation of Accounts...................................4
SECTION 2.03. Security Interest......................................5
SECTION 2.04. .......................................................6
ARTICLE III
Deposits into Accounts................................................7
SECTION 3.01. Required Deposits......................................7
SECTION 3.02. Revenues and Insurance and Condemnation Proceeds.......7
SECTION 3.03. Deposits Irrevocable...................................7
ARTICLE IV
Payments from Accounts................................................7
SECTION 4.01. [INTENTIONALLY OMITTED]................................7
SECTION 4.02. Revenue Account--Weekly Payments.......................7
SECTION 4.03. Revenue Account--Monthly Payments......................8
SECTION 4.04. [INTENTIONALLY OMITTED]...............................10
SECTION 4.05. Revenue Account - Quarterly Payments in respect of the
Borrower's Security Account.................................10
SECTION 4.06. Debt Service Account; Issuing Bank's Term VP Account..10
SECTION 4.07. Debt Service Reserve Letter of Credit.................11
SECTION 4.07A. System Upgrade Expense Account.......................11
SECTION 4.08. Transfers from Borrower's Security Account and System
Upgrade Expense Account; Borrower's Security Account........12
SECTION 4.09. [INTENTIONALLY OMITTED]...............................13
SECTION 4.10. Insurance and Condemnation Proceeds Account...........13
SECTION 4.11. Tax Account...........................................14
SECTION 4.12. [INTENTIONALLY OMITTED]...............................14
SECTION 4.13. Reimbursement Account.................................14
SECTION 4.14. Property Tax Account..................................14
SECTION 4.15. Defaults..............................................14
SECTION 4.16. Transfers from Accounts on the Restatement
Effective Date..............................................15
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ARTICLE V
Investment...........................................................15
ARTICLE VI
Security Agent.......................................................16
SECTION 6.01. Rights, Duties, etc...................................16
SECTION 6.02. Resignation or Removal................................17
ARTICLE VII
Determinations.......................................................17
SECTION 7.01. Value.................................................17
SECTION 7.02. Other Determinations..................................18
SECTION 7.03. Available Cash........................................18
ARTICLE VIII
Miscellaneous........................................................18
SECTION 8.01. Fees and Indemnification of Security Agent............18
SECTION 8.02. Waiver of Right of Set-Off............................19
SECTION 8.03. Termination...........................................19
SECTION 8.04. Severability..........................................19
SECTION 8.05. Counterparts..........................................19
SECTION 8.06. Amendments............................................19
SECTION 8.07. APPLICABLE LAW........................................19
SECTION 8.08. Notices...............................................19
SECTION 8.09. Benefit of Agreement..................................20
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AMENDED AND RESTATED SECURITY DEPOSIT AGREEMENT dated as of June 28,
2000 among COGENTRIX OF RICHMOND, INC., a North Carolina corporation (the
"Borrower"), BNP PARIBAS, as agent (in such capacity the "Agent") for the
Secured Parties (as defined in the Reimbursement Agreement referred to below),
and FIRST UNION NATIONAL BANK, a national banking association ("First Union"),
as agent for the Agent under this Security Deposit Agreement (in such capacity,
the "Security Agent"), and as Securities Intermediary (as such term is defined
in Section 8-102(a)(14) of the Uniform Commercial Code) with respect to the
Accounts (in such capacity, the "Securities Intermediary").
W I T N E S S E T H :
WHEREAS, the Borrower owns and operates the Facility (as defined in the
Reimbursement Agreement referred to below); and
WHEREAS, the acquisition and construction of the Facility has been
financed by loans and other extensions of credit made to the Borrower pursuant
to the Reimbursement and Loan Agreement, dated as of December 1, 1990, among the
Borrower, Paribas, as Issuing Bank (in such capacity, the "Issuing Bank"), the
Existing Lenders (as defined in the Reimbursement Agreement) and the Agent, as
amended by the First Amendment thereto dated as of February 1, 1991, the Second
Amendment thereto dated as of December 1, 1991, the Third Amendment thereto
dated as of December 15, 1993, the Fourth Amendment thereto dated as of February
15, 1995, the Fifth Amendment thereto dated as of June 1, 1995, the Sixth
Amendment thereto dated as of March 31, 1996 and the Seventh Amendment thereto
dated as of December 1, 1997 (as so amended, the "Existing Reimbursement
Agreement"); and
WHEREAS, pursuant to the provisions of the Existing Reimbursement
Agreement, the Borrower entered into the Security Deposit Agreement, dated as of
December 1, 1990, as amended by the First Amendment thereto dated as of December
15, 1993 (the "Existing Security Deposit Agreement"), among the Borrower, the
Agent and the Security Agent; and
WHEREAS, the parties thereto have agreed to amend and restate the
Existing Reimbursement Agreement in its entirety pursuant to the Amended and
Restated Reimbursement and Loan Agreement, dated as of June 28, 2000, among the
Borrower, the Issuing Bank, the Lenders thereunder and the Agent (as amended,
supplemented or otherwise modified from time to time, the "Reimbursement
Agreement"); and
WHEREAS, it is a condition to the Reimbursement Agreement's becoming
effective that the Existing Security Deposit Agreement shall be amended and
restated in its entirety to read as hereinafter set forth; and
WHEREAS, First Union has agreed to continue to act as Security Agent
pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereby agree that, on and
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as of the Restatement Effective Date (as defined in the Reimbursement
Agreement), the Existing Security Deposit Agreement shall be amended and
restated in its entirety to read as follows:
ARTICLE I
Definitions
Unless the context shall otherwise require, the capitalized terms used
herein (and not otherwise defined herein) shall have the meanings assigned to
them in the Reimbursement Agreement (such definitions to be equally applicable
to the singular and plural forms of the terms defined).
In addition, the following terms when used herein shall have the
following meanings:
"Accounts" shall mean the Security Agent Accounts.
"Agreement", "hereto", "hereunder" and words of similar import
shall mean this Amended and Restated Security Deposit Agreement, as the
same may from time to time be amended, supplemented or otherwise
modified in accordance with the provisions hereof.
"Borrower Distribution Date" shall mean the first Business Day
to occur after each date on which the Security Agent makes the
distributions from the Revenue Account required by Section 4.05 hereof.
"Borrower's Security Account" shall mean the special account
designated by that name established by the Security Agent pursuant to
Section 2.02(a).
"Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banks in New York, New York or Charlotte,
North Carolina are authorized or required by law or executive order to
be closed.
"Debt Service Account" shall mean the special account
designated by that name established by the Security Agent pursuant to
Section 2.02(a).
"Debt Service Reserve Deposit" shall have the meaning assigned
thereto in Section 4.16.
"Emissions Monitoring System Upgrade Expenses" shall mean all
capital costs incurred by the Borrower in connection with the procuring
and installing of certain emissions monitoring equipment for the
Facility required to comply with Environmental Protection Agency data
collection and reporting requirements pursuant to 40 CFR (Code of
Federal Regulation) 75, Subpart H.
"Insurance and Condemnation Proceeds" shall mean (a) all
payments received by the Borrower or the Agent from any insurer
pursuant to the insurance required to be
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maintained by the Borrower pursuant to clause (i) or (ii) of Section
10.05(b) of the Reimbursement Agreement, and (b) all awards and
proceeds of a Taking with respect to the Project.
"Insurance and Condemnation Proceeds Account" shall mean the
special account designated by that name established by the Security
Agent pursuant to Section 2.02(a).
"Insurance and Condemnation Proceeds Deposits" shall mean all
cash and Permitted Investments at any time on deposit in the Insurance
and Condemnation Proceeds Account including all interest or other
income earned with respect thereto.
"Issuing Bank's Term VP Account" shall mean the special
account designated by that name established by the Security Agent
pursuant to Section 2.02(a).
"Permitted Investments" shall have the meaning assigned
thereto in Article V.
"Priority Cash Operating Costs" shall mean all Cash Operating
Costs as defined in the Reimbursement Agreement excluding payments in
respect of Operating Management Fees, Junior Working Capital Loans,
Emissions Monitoring System Upgrade Expenses and real and personal
property taxes.
"Property Tax Account" shall mean the special account
designated by that name established by the Security Agent pursuant to
Section 2.02(a).
"Reimbursement Account" shall mean the special account
designated by that name established by the Security Agent pursuant to
Section 2.02(a).
"Reimbursement Cash Collateral" shall mean any cash given to
the Agent by the Borrower pursuant to this Agreement, the Reimbursement
Agreement or any other Project Document for deposit by the Agent into
the Reimbursement Account.
"Revenue Account" shall mean the special account designated by
that name established by the Security Agent pursuant to Section
2.02(a).
"Revenues" shall mean all revenues and payments at any time
received by the Borrower (other than (i) the proceeds of Loans made
under the Reimbursement Agreement, (ii) the proceeds from the sale of
Bonds, and (iii) Insurance and Condemnation Proceeds), including,
without limitation, (a) all amounts received by the Borrower in respect
of Junior Working Capital Loans, (b) all payments received by the
Borrower under the Power Purchase Agreements and the Steam Purchase
Agreement and all other payments received by the Borrower from the sale
of electricity, heat and/or steam produced by the Facility, (c) all
payments received from the sale of by-products produced by the
Facility, (d) all proceeds of any business interruption insurance, (e)
all payments received by the Borrower pursuant to any Interest Hedging
Transaction, (f) all payments received by the Borrower from Cogentrix
Energy pursuant to Section 5.05 of the Project Development Agreement,
(g) all revenues received from the sale of Allowances by the Borrower
and (h) all payments received by the Borrower under all other Project
Documents.
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"Security Agent Accounts" shall mean the Reimbursement
Account, the Borrower's Security Account, the Debt Service Account, the
Insurance and Condemnation Proceeds Account, the Revenue Account, the
Tax Account, the Property Tax Account, the System Upgrade Expense
Account and the Issuing Bank's Term VP Account.
"System Upgrade Expense Account" shall mean the special
account designated by that name established by the Security Agent
pursuant to Section 2.02(a).
"System Upgrade Expense Account Required Balance" shall mean
as of any Installment Payment Date, the amount equal to (i) $500,000
less (ii) the sum of all Emissions Monitoring System Upgrade Expenses
paid through such date; provided that the System Upgrade Expense
Account Required Balance shall be deemed to be zero upon delivery of
the certificate required under Section 4.07A(c).
"Taking" shall have the meaning assigned to such term in the
Project Mortgage.
"Tax Account" shall mean the special account designated by
that name established by the Security Agent pursuant to Section
2.02(a).
"Value" shall have the meaning assigned thereto in Section
7.01.
ARTICLE II
Appointment of Security Agent;
Establishment of Accounts
SECTION 2.01. Appointment of Security Agent. First Union is hereby
appointed by the Borrower and by the Agent to continue to act as security agent
hereunder, and the Security Agent hereby agrees to continue to act as such and
to accept all cash, payments, other amounts and Permitted Investments to be
delivered to or held by the Security Agent pursuant to the terms of this
Agreement. The Security Agent shall hold and safeguard the Security Agent
Accounts (and the cash, instruments and securities on deposit therein) during
the term of this Agreement and shall treat the cash, instruments, and securities
in the Security Agent Accounts as funds, instruments and securities pledged by
the Borrower to the Agent for the ratable benefit of the Secured Parties, to be
held by the Security Agent, as agent of the Agent, in trust in accordance with
the provisions hereof.
SECTION 2.02. Creation of Accounts. (a) The Security Agent will
establish or has heretofore established and will or is maintaining at its office
located at 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx (or
such other office of the Security Agent as the Security Agent shall from time to
time designate in writing to the Borrower and the Agent) the following nine
special, segregated and irrevocable cash collateral accounts which shall be
maintained at all times until the termination of this Agreement:
(1) Borrower's Security Account
(2) Debt Service Account
(3) Insurance and Condemnation Proceeds Account
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(4) Revenue Account
(5) Tax Account
(6) Property Tax Account
(7) Issuing Bank's Term VP Account
(8) Reimbursement Account
(9) System Upgrade Expense Account.
(b) All moneys, investments and securities at any time on deposit in
any of the Security Agent Accounts shall constitute trust funds to be held in
the custody of the Security Agent for the purposes and on the terms set forth in
this Agreement.
SECTION 2.03. Security Interest. (a) In order to secure the performance
by the Borrower of all of its covenants, agreements and obligations under the
Reimbursement Agreement and the Security Documents and the payment by the
Borrower of all Obligations (subject to the provisions of paragraph (b) of this
Section 2.03), this Agreement is intended to create, and the Borrower hereby
pledges to, and creates in favor of the Agent, for the ratable benefit of the
Secured Parties, a security interest in and to, the Accounts, all cash, cash
equivalents, instruments, investments and other securities at any time on
deposit in the Accounts, all present and future accounts, chattel paper,
documents, general intangibles and instruments (each as defined in the New York
Uniform Commercial Code) of the Borrower, all other rights of the Borrower to
receive the payment of money including, without limitation, all moneys due and
to become due to the Borrower under the Power Purchase Agreements, the Steam
Purchase Agreement and any other contract of the Borrower for the sale of
electricity, steam and/or heat produced by the Facility or the sale of
by-products produced by the Facility, and all moneys due and to become due to
the Borrower under all Project Documents, and all proceeds of any of the
foregoing. All moneys, cash equivalents, instruments, investments and securities
at any time on deposit in any of the Accounts shall constitute collateral
security for the payment by the Borrower of the Obligations (subject to the
provisions of paragraph (b) of this Section 2.03) and the performance and
observance by the Borrower of all the covenants and conditions contained herein
and in the Reimbursement Agreement, the Notes and the other Security Documents,
and shall at all times be subject to the control of the Agent, acting through
the Security Agent, and to the extent on deposit in the Security Agent Accounts,
shall be held in the custody of the Security Agent in trust for the purposes of,
and on the terms set forth in, this Agreement. For the purpose of perfecting the
security interest of the Agent in and to the Security Agent Accounts and all
cash, investments and securities at any time on deposit in the Security Agent
Accounts, the Security Agent shall be deemed to be the agent of the Agent.
(b) Notwithstanding the provisions of paragraph (a) of this Section
2.03 or any other provision of this Agreement, the moneys, cash equivalents,
instruments, investments and securities at any time on deposit in the Borrower's
Security Account and representing the Debt Service Reserve Deposit shall not
constitute collateral security for any of the indebtedness, obligations and
liabilities of the Borrower to the Secured Parties in connection with
Outstanding Bond Extensions of Credit (the "Bond Obligations") until such time
as the outstanding Loans shall have been permanently reduced to an amount less
than $3,500,000, whereupon from and after such time the Bond Obligations shall,
without further act, be secured by the moneys, cash equivalents, instruments,
investments, and securities on deposit in the Borrower's Security Account and
representing the Debt Service Reserve Deposit equally and ratably with all of
the other
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Obligations. The Borrower agrees to execute and deliver to the Agent and the
Security Agent such instruments, UCC financing statements and other documents as
the Agent shall request in order to confirm and perfect the pledge of and grant
of a security interest in the Debt Service Reserve Deposit as collateral
security for the Bond Obligations, at or after the time of such pledge and grant
of a security interest in accordance with the provisions of the preceding
sentence, but such pledge and grant of a security interest shall be effective
whether or not any such instruments, statements or documents are in fact
executed and delivered. Notwithstanding the provisions of Article V hereof, the
Borrower and the Agent hereby acknowledge that at the time any cash on deposit
in the Borrower's Security Account and representing the Debt Service Reserve
Deposit constitutes collateral security for the Bond Obligations as set forth
above, the investment of such cash or portions thereof may be subject to yield
restrictions and the Agent and Borrower agree that at such time the yield on
such investments shall be restricted in a manner as instructed to them by bond
counsel. The provisions set forth in this Section 2.03(b) shall cease to be in
effect after January 1, 2001.
(c) The Borrower shall not have any rights or powers with respect to
any amounts in the Accounts or any part thereof except (i) as provided in
Article V hereof and (ii) the right to have such amounts applied in accordance
with the provisions hereof.
SECTION 2.04. Certain Agreements Regarding the Accounts. The parties
hereto hereby agree that (a) each Account is and will be maintained as a
"securities account" (as defined in Section 8-501(a) of the Uniform Commercial
Code) by the Securities Intermediary; (b) the Securities Intermediary shall
treat the Agent as entitled to exercise the rights that comprise any "financial
asset" (as defined in Section 8-102(a)(9) of the Uniform Commercial Code)
credited to any of the Accounts without further consent by the Borrower,
including without limitation the right to exercise "entitlement orders" (as
defined in Section 8-102(a) of the Uniform Commercial Code); (c) each item of
property (whether cash, cash equivalents, instruments, investments, investment
property or other) credited to the Accounts shall be treated as a "financial
asset" within the meaning of Section 8-102(a)(9) of the Uniform Commercial Code;
(d) the "securities intermediary's jurisdiction" (as defined in Section 8-110(e)
of the Uniform Commercial Code) shall be the State of North Carolina; (e) all
securities or other property underlying any financial assets credited to the
Accounts shall be registered in the name of the Securities Intermediary or
indorsed to the Securities Intermediary or in blank, and in no case whatsoever
will any financial asset credited to an Account be registered in the name of the
Borrower, payable to the order of the Borrower or specially indorsed to the
Borrower except to the extent that the foregoing have immediately thereafter
been specially indorsed by the Borrower to the Securities Intermediary or in
blank.
ARTICLE III
Deposits into Accounts
SECTION 3.01. Required Deposits. The Borrower covenants and agrees that
all amounts required to be delivered to or deposited with the Agent by the
Borrower pursuant to Section 4.04(b) of the Reimbursement Agreement shall
constitute Reimbursement Cash Collateral and be paid directly to the Agent for
deposit into the Reimbursement Account.
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SECTION 3.02. Revenues and Insurance and Condemnation Proceeds. (a) The
Borrower shall instruct each Person from whom it receives any Revenues to pay
such Revenues directly to the Security Agent for deposit in the Revenue Account,
and if the Borrower shall receive any Revenues it shall deliver such Revenues in
the exact form received (but with the Borrower's endorsement, if necessary) to
the Security Agent for deposit in the Revenue Account not later than the third
Business Day after the Borrower's receipt thereof. The Security Agent shall have
the right to receive all Revenues directly from the Persons owing the same. All
Revenues received by the Security Agent shall be deposited in the Revenue
Account.
(b) Each of the Borrower and the Agent shall pay all Insurance and
Condemnation Proceeds received by it over to the Security Agent in the exact
form received (but with the Borrower's or the Agent's endorsement, as the case
may be, if necessary) for deposit in the Insurance and Condemnation Proceeds
Account. All Insurance and Condemnation Proceeds received by the Security Agent
shall be deposited in the Insurance and Condemnation Proceeds Account.
SECTION 3.03. Deposits Irrevocable. Any deposit made into any Account
hereunder shall be irrevocable and the amount of such deposit and any instrument
or security held in such Account hereunder and all interest thereon shall be
held by the Agent or in trust by the Security Agent, as the case may be, and
applied solely as provided herein.
ARTICLE IV
Payments from Accounts
SECTION 4.01. [INTENTIONALLY OMITTED]
SECTION 4.02. Revenue Account--Weekly Payments. On the first Business
Day of each week, the Security Agent shall distribute, from the cash available
in the Revenue Account (after making any distributions then required by Section
4.06), to the Borrower for the benefit of the Persons entitled thereto and in
the respective amounts as specified in writing by the Borrower, an amount equal
to the sum of (a) the Priority Cash Operating Costs which the Borrower certifies
are then due and owing by the Borrower with respect to the Project for the
preceding week, (b) any payments in respect of the Bond Letter of Credit Fee,
the Bond Fronting Fee, the Administration Fee, the Term VP Fronting Fee, the
Term VP Letters of Credit Fee, the Debt Service Reserve Letter of Credit
Fronting Fee, the Debt Service Reserve Letter of Credit Fee and other amounts
(except principal and interest payments) that are then due and payable to the
Agent, the Issuing Bank or the Lenders and (c) Trustee's Expenses and other fees
and expenses payable to the Remarketing Agent, the Custodian, the Registrar or
the Tender Agent which the Borrower certifies are then due and payable. For the
purpose of this Section 4.02, cash available in the Revenue Account shall not
include any check or other instrument which may be deposited therein until the
final collection thereof.
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SECTION 4.03. Revenue Account--Monthly Payments. On the last Business
Day of each calendar month (a "Monthly Distribution Date"), the Security Agent
shall distribute, from the cash available in the Revenue Account (after making
any distribution then required by Section 4.02), the following amounts in the
following order of priority:
(i) first, to the Property Tax Account, an amount equal to
one-twelfth of the real and personal property taxes becoming due and
payable within the next succeeding 12 months, as certified to the
Security Agent by the Borrower; and
(ii) second, to the Debt Service Account, an amount (as
specified in writing by the Agent) equal to the sum of (a) the interest
on the aggregate outstanding unpaid principal amount of Term Loans and
Debt Service Reserve Letter of Credit Loans accrued and unpaid during
such calendar month and (b) the interest on all Outstanding Bond
Extensions of Credit accrued and unpaid during such calendar month
(together with any deficiency in accumulation of either such amount
during any preceding month or months), plus, if any such interest is due
and payable on or before the last Business Day of the next succeeding
month, all such interest which will accrue at the applicable rate during
such succeeding month until the due date thereof; and
(iii) third, if an Installment Payment Date will occur within
three months after such Monthly Distribution Date or a Bond Redemption
Date will occur within six months after such Monthly Distribution Date
(as indicated in writing by the Agent), to the Debt Service Account, an
amount (as specified in writing by the Agent) equal to:
(a) one-third of the Term Loan Amortization Amount for
the next succeeding Installment Payment Date (together with any
deficiency in accumulation of such amount during any preceding
month or months since the last Installment Payment Date); plus
(b) one-sixth of the Bond Redemption Amount for the next
succeeding Bond Redemption Date (together with any deficiency in
accumulation of such amount during any preceding month or months
since the last Bond Redemption Date); plus
(c) if the next succeeding Installment Payment Date will
occur on or before the last Business Day of the next succeeding
month, an amount equal to the excess of (1) the Term Loan
Amortization Amount for such Installment Payment Date, over (2)
the amount then on deposit in the Debt Service Account for the
purpose of paying such amount including any amounts deposited
pursuant to clause (a) above; plus
(d) if the next succeeding Bond Redemption Date will
occur on or before the last Business Day of the next succeeding
month, an amount equal to the excess of (1) Bond Redemption
Amount for such Bond Redemption Date over (2) the amount then on
deposit in the Debt Service Account for the purpose of paying
such principal amount including any amounts deposited pursuant to
clause (b) above; less
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(e) any increase in the Value of the Debt Service Account
which occurred during such month as a result of earnings on the
amounts on deposit therein; and
(iv) fourth, if a Term VP Reimbursement Date will occur within
three months after such Monthly Distribution Date (as indicated in
writing by the Agent), to the Issuing Bank's Term VP Account, an amount
(as specified in writing by the Agent) equal to:
(a) one-third of the aggregate principal amount of any
Term VP Reimbursement Payment which is due and payable on the
next Term VP Reimbursement Date, plus an amount equal to the
accrued interest on the related Term VP Reimbursement Amount
during such calendar month (together with any deficiency in
accumulation of such amount during any preceding month or months
since the last Term VP Reimbursement Date); plus
(b) if such Term VP Reimbursement Date will occur on or
before the last Business Day of the next succeeding month, an
amount equal to the excess of (1) the aggregate principal amount
of the Term VP Reimbursement Payment which will be due and
payable on such Term VP Reimbursement Date together with accrued
interest on the related Term VP Reimbursement Amount over (2) the
aggregate amount then on deposit in the Issuing Bank's Term VP
Account for the purpose of paying such Term VP Reimbursement
Payment and such interest; less
(c) any increase in the Value of the Issuing Bank's Term
VP Account which occurred during such month as a result of
earnings on the amount on deposit therein; and
(v) fifth, to the Agent for the benefit of the Swap
Counterparties entitled thereto, an amount (as certified to the Security
Agent by the Borrower and countersigned by the Agent) equal to the
amount payable by the Borrower pursuant to any Swap Agreement between
the Borrower and a Swap Counterparty; and
(vi) sixth, to the Agent, an amount (as certified to the Security
Agent by the Borrower and countersigned by the Agent) equal to the
outstanding principal amount of all Debt Service Reserve Letter of
Credit Loans.
SECTION 4.04. [INTENTIONALLY OMITTED]
SECTION 4.05. Revenue Account - Quarterly Payments in respect of the
Borrower's Security Account. On each date on which the Borrower notifies the
Agent of the Excess Project Cash Flow of the Borrower for the immediately
preceding three months pursuant to Section 10.09(f) of the Reimbursement
Agreement, the Security Agent (after certification by the Borrower countersigned
by the Agent) shall distribute, from the cash available in the Revenue Account
(after making any distributions from the Revenue Account required by Sections
4.02, 4.03 and 4.06), to the Borrower's Security Account, the remainder of the
cash available in the Revenue Account.
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SECTION 4.06. Debt Service Account; Issuing Bank's Term VP Account. (a)
On each date on which any interest on or principal in respect of the Loans, any
reimbursement for Xxxx XX Reimbursement Obligations or any other Obligation
(other than VP Reimbursement Obligations) becomes due and payable pursuant to
the Reimbursement Agreement, the Notes or any of the Security Documents (whether
at maturity, upon acceleration of maturity, upon redemption of the Bonds or
otherwise) the Security Agent shall distribute to the Agent for payment of such
interest or principal or other amount, from the cash available in the Debt
Service Account, an amount equal to such interest or principal or other amount
then due and payable as specified in writing by the Agent. On each date on which
Reimbursement Cash Collateral is required to be deposited in the Reimbursement
Account pursuant to Section 4.04(b)(i) of the Reimbursement Agreement, the
Security Agent shall distribute to the Agent from cash available in the Debt
Service Account for deposit in the Reimbursement Account, an amount equal to
such Reimbursement Cash Collateral then due and payable as specified in writing
by the Agent. Any interest on or principal or other amount in respect of any
Obligations (other than VP Reimbursement Obligations), or any Reimbursement Cash
Collateral required to be deposited in the Reimbursement Account pursuant to
Section 4.04(b)(i) of the Reimbursement Agreement, which is not paid or
deposited when due because of insufficient cash available in the Debt Service
Account or otherwise shall continue to be due, shall accrue interest from the
date due to the date paid at the rate provided for in the Reimbursement
Agreement, and shall be payable as a Priority Cash Operating Cost pursuant to
Section 4.02.
(b) On each Term VP Reimbursement Date, the Security Agent shall
distribute to the Agent for reimbursement of Term VP Letter of Credit
Disbursements from cash available in the Issuing Bank's Term VP Account, an
amount equal to the Term VP Reimbursement Payment together with accrued interest
on the related Term VP Reimbursement Amount due and payable on such Term VP
Reimbursement Date as specified in writing by the Agent. Any Term VP
Reimbursement Payment and any interest on any Term VP Reimbursement Amount which
is not paid when due because of insufficient cash available in the Issuing
Bank's Term VP Account or otherwise shall continue to be due, shall accrue
interest from the date due to the date paid at the rate provided for in the
Reimbursement Agreement, and shall be payable as a Priority Cash Operating Cost
pursuant to Section 4.02.
SECTION 4.07. Debt Service Reserve Letter of Credit. In the event that,
on any date (as specified in writing by the Agent) on which the Borrower is
required to deliver to the Agent Reimbursement Cash Collateral for deposit in
the Reimbursement Account pursuant to Section 4.04(b)(i) of the Reimbursement
Agreement and/or a payment of interest on or principal or other amount in
respect of the Obligations becomes due and payable pursuant to the Reimbursement
Agreement, the Notes or any of the Security Documents, there shall be
insufficient cash available in the Debt Service Account, the System Upgrade
Expense Account and the Borrower's Security Account to make such deposit or
payment, the Security Agent shall immediately so notify the Agent and the Agent
shall make a drawing under the Debt Service Reserve Letter of Credit in an
amount equal to the lesser of the amount available to be drawn upon under the
Debt Service Reserve Letter of Credit and the amount required to make such
deposit of Reimbursement Cash Collateral and/or payment of interest or principal
or other amount in full, and apply the proceeds of such drawing to such payment.
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SECTION 4.07A. System Upgrade Expense Account. (a) Except during the
occurrence and continuation of a Default or an Event of Default, upon receipt of
a certificate signed by a Responsible Officer of the Borrower, specifying an
amount requested to be transferred from the System Upgrade Expense Account and
the items for which such amount is to be paid, and certifying that the payments
to be made with such amount constitute payments of Emission Monitoring System
Upgrade Expenses, the Security Agent shall transfer from the System Upgrade
Expense Account to the Persons specified in such certificate the amount of
Emission Monitoring System Upgrade Expenses specified in such certificate to be
then due and payable; provided that the Security Agent shall have received
written confirmation from the Agent (after consultation with the Independent
Engineer) that, in its reasonable judgment, such payments to be made constitute
payments of Emission Monitoring System Upgrade Expenses.
(b) If as of any Installment Payment Date the amount on deposit in the
System Upgrade Expense Account shall exceed the System Upgrade Expense Account
Required Balance as of such Installment Payment Date, the Security Agent shall,
upon receipt on such Installment Payment Date of a certificate signed by a
Responsible Officer of the Borrower and countersigned by the Agent certifying as
to the amount of such excess and stating that no Default or an Event of Default
has occurred and is continuing, transfer such excess amount from the System
Upgrade Expense Account to the Revenue Account.
(c) Upon receipt by the Security Agent of a certificate signed by a
Responsible Officer of the Borrower, and confirmed in writing by the Agent and
the Independent Engineer, certifying (x) that the upgrade to the Facility's
emissions monitoring system with respect to which Emission Monitoring System
Upgrade Expenses have been disbursed has been completed, all necessary tests of
such system have been satisfactorily performed and such system is functioning in
compliance with all legal requirements and (y) that all expenses relating to the
purchase, installation and testing of such system upgrade have been paid and
stating that no Default or an Event of Default has occurred and is continuing,
the Security Agent shall transfer all amounts remaining on deposit in the System
Upgrade Expense Account to the Revenue Account.
SECTION 4.08. Transfers from Borrower's Security Account and System
Upgrade Expense Account; Borrower's Security Account. (a) To the extent that at
any time the cash then available in the Revenue Account is insufficient (i) to
pay the Cash Operating Costs then due, (ii) to pay principal and interest and
any other amount then due and payable in respect of the Obligations and to
provide Reimbursement Cash Collateral for deposit into the Reimbursement Account
as required pursuant to Section 4.04(b)(i) of the Reimbursement Agreement, (iii)
to deposit into the Debt Service Account and the Issuing Bank's Term VP Account
the respective amounts then required to be deposited therein pursuant to Section
4.03 or Section 4.05 and (iv) to pay any amounts then due and owing to any Swap
Counterparty in respect of any Swap Agreement in accordance with Section 4.03,
the Security Agent shall from and to the extent of the cash available in the
Borrower's Security Account and the System Upgrade Expense Account withdraw such
amounts first from the Borrower's Security Account and second from the System
Upgrade Expense Account as the Agent shall specify in writing and apply such
amounts to make the aforesaid payments and/or deposits in accordance with the
Agent's written directions.
(b) On each Borrower Distribution Date, if the Borrower has delivered
to the Security Agent a certificate signed by a Responsible Officer of the
Borrower and countersigned by
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the Agent, certifying that the conditions precedent to the payment of Restricted
Payments by the Borrower, as set forth in Section 11.03 of the Reimbursement
Agreement, have been satisfied and setting forth certain amounts payable as
required below, the Security Agent shall transfer, from the cash then available
in the Borrower's Security Account, the following amounts in the following order
of priority:
first, to the Tax Account, an amount equal to (a) the estimated
income taxes (as specified by the Borrower in such certificate) on the
taxable income of the Borrower accrued and unpaid to such Monthly
Distribution Date (or, if income taxes on such net income are due and
payable on or before the last Business Day of the next succeeding month,
the estimated income taxes on such net income due and payable on the
next payment date therefor), computed as though the business of the
Borrower was at all times during such period conducted by a separate,
distinct and unaffiliated legal entity, less (b) the Value of the Tax
Account on such Monthly Distribution Date prior to giving effect to such
distribution; and
second, to the Borrower for the benefit of the Delaware Holdings
or Cogentrix Energy, an amount equal to the principal and/or interest
then due and owing in respect of Junior Working Capital Loans; and
third, to the Borrower for the benefit of Cogentrix Energy, an
amount equal to the Operating Management Fee payable to Cogentrix Energy
with respect to the preceding quarter, as certified to the Security
Agent by the Borrower; and
fourth, to the Borrower, an amount (as specified by the Borrower
in such certificate) equal to the allocated regional and central support
costs of the Borrower then due and owing; and
fifth, to the Borrower, an amount equal to all or any portion of
the remaining cash available in the Borrower's Security Account on such
Borrower Distribution Date to be applied to Restricted Payments not set
forth in clauses first through fourth above;
provided that if the Borrower has not delivered such certificate on such
Borrower Distribution Date, the Borrower may deliver such certificate on any
Business Day thereafter which is prior to the next succeeding Borrower
Distribution Date and the Security Agent shall, on the Business Day after such
delivery, distribute in accordance with clauses "first" through "fifth" above an
amount equal to the lesser of (x) the cash then available in the Borrower's
Security Account and (y) the cash which was available in the Borrower's Security
Account on such prior Borrower Distribution Date, and provided, further, that,
at all times until January 1, 2001, after giving effect to any distributions
made in accordance with this Section 4.08(b), $3,500,000 remains in the
Borrower's Security Account.
SECTION 4.09. [INTENTIONALLY OMITTED]
SECTION 4.10. Insurance and Condemnation Proceeds Account. (a) The
Insurance and Condemnation Proceeds Deposits shall be accumulated in the
Insurance and Condemnation Proceeds Account and held therein until paid to or
upon the order of the Borrower
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as provided in paragraph (b) of this Section 4.10, or paid to the Agent as
provided in paragraph (c) or (d) of this Section 4.10, or returned to the
Borrower as provided in Section 8.03.
(b) Subject to the provisions of paragraphs (c) and (d) of this Section
4.10, Insurance and Condemnation Proceeds Deposits shall be paid over to or upon
the order of the Borrower to reimburse it for, or to pay, the cost of renewing,
repairing, rebuilding or otherwise replacing the damaged or destroyed or lost
property in respect of which such moneys were received, upon the receipt by the
Security Agent of a certificate of a Responsible Officer of the Borrower,
countersigned by the Agent, (i) describing in reasonable detail the work done
and materials purchased by way of the renewal, repair, rebuilding or other
replacement of the damaged or destroyed or lost property, (ii) stating the
specific amount requested to be paid over to or upon the order of the Borrower,
that such amount is requested to reimburse the Borrower for, or to pay, the cost
of such renewal, repair, rebuilding or other replacement and that such amount,
together with amounts remaining in the Insurance and Condemnation Proceeds
Account for such purpose and other funds of the Borrower available for such
purpose, are sufficient to pay in full the cost of such renewal, repair,
rebuilding or other replacement, (iii) stating that all of the conditions set
forth in Section 10 of the Project Mortgage have been satisfied, and (iv)
stating that no Default or Event of Default has occurred and is continuing. In
the event that Insurance and Condemnation Proceeds Deposits shall remain in the
Insurance and Condemnation Proceeds Account after application thereof in
accordance with the first sentence of this paragraph (b), the Security Agent
shall either apply said Deposits to the payment of the Obligations then due or
return said Deposits to the Borrower, in accordance with the instructions of the
Agent.
(c) If the Agent shall at any time notify the Security Agent in writing
that an Event of Loss has occurred, the Security Agent shall promptly withdraw
the Insurance and Condemnation Proceeds Deposits from the Insurance and
Condemnation Proceeds Account and deliver the same to the Agent, for application
by the Lenders to the payment of the Obligations (and/or the provision of
Reimbursement Cash Collateral) in accordance with the provisions of Sections
4.04(b)(i) of the Reimbursement Agreement and the provisions of the Security
Documents.
(d) If the Agent shall at any time notify the Security Agent in writing
that an Event of Default under the Reimbursement Agreement has occurred and is
continuing, then the Security Agent shall, if and to the extent requested by the
Agent, promptly withdraw the Insurance and Condemnation Proceeds Deposits from
the Insurance and Condemnation Proceeds Account and deliver the same to the
Agent, to be held by the Agent and applied to the payment of the Obligations.
SECTION 4.11. Tax Account. On each date on which income taxes on the
net income of the Borrower are due and payable, the Security Agent shall
distribute, from the cash available in the Tax Account, to the Borrower or such
other Person or Persons from whom such taxes are due, an amount equal to such
taxes (computed as provided in clause (vi) of Section 4.03 hereof), provided
that the Security Agent shall have received a certificate signed by a
Responsible Officer of the Borrower, approved in writing by the Agent,
specifying the amount or amounts due to the Borrower or such other Person or
Persons from whom such amounts are payable. Any such taxes not paid when due to
a Person or Persons other than the Borrower because of insufficient
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cash available in the Tax Account shall be payable as a Priority Cash Operating
Cost pursuant to Section 4.02.
SECTION 4.12. [INTENTIONALLY OMITTED]
SECTION 4.13. Reimbursement Account. On each date in which any amount
in respect of Xxxx XX Reimbursement Obligations becomes due and payable pursuant
to the Reimbursement Agreement, the Security Agent shall distribute to the Agent
(upon written direction from the Agent) from the Reimbursement Account, an
amount equal to the Xxxx XX Reimbursement Obligations then due and payable.
SECTION 4.14. Property Tax Account. On each date on which any real or
personal property taxes are due and payable by the Borrower, the Security Agent
shall distribute, from the cash available in the Property Tax Account, an amount
equal to such taxes; provided that the Security Agent shall have received a
certificate signed by a Responsible Officer of the Borrower, specifying the
amount or amounts of such taxes and the governmental entity or entities to which
such taxes are payable. Any such taxes not paid when due because of insufficient
cash available in the Property Tax Account shall be payable as a Priority Cash
Operating Cost pursuant to Section 4.02.
SECTION 4.15. Defaults. Notwithstanding any other provision contained
in this Agreement, upon receipt by the Security Agent of written notice from the
Agent stating that a Default or an Event of Default under the Reimbursement
Agreement has occurred and is continuing, the Security Agent shall thereafter
distribute cash from the Security Agent Accounts only upon the express written
instructions of the Agent until notified in writing by the Agent that such
Default or Event of Default has been waived by the Required Lenders or cured.
SECTION 4.16. Transfers from Accounts on the Restatement Effective
Date. On the Restatement Effective Date after receipt of written notice from the
Borrower, the Agent and the Security Agent, as the case may be, shall distribute
to the Borrower all of the cash available on such date in the Accounts (as
defined in the Existing Security Deposit Agreement) (other than $3,000,000 in
the Revenue Account, $320,638.34 in the Property Tax Account and $225,000 in the
Debt Service Account and other than $4,000,000 in the Debt Service Reserve
Account (as defined in the Existing Security Deposit Agreement), of which (x)
$3,500,000 shall on the Restatement Effective Date be transferred to the
Borrower's Security Account (the "Debt Service Reserve Deposit") and (y)
$500,000 shall on the Restatement Effective Date be transferred to the System
Upgrade Expense Account).
ARTICLE V
Investment
Any cash held by the Security Agent or the Agent in any Account shall
be invested by the Security Agent or the Agent, as the case may be, from time to
time as directed in writing by the Borrower (or, if the Agent shall have
notified the Security Agent that a Default or an Event of Default under the
Reimbursement Agreement has occurred and is continuing, by the Agent) in the
"Permitted Investments" described below. Any income or gain realized as a result
of any such
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investment shall be held as part of the applicable Account and reinvested as
provided herein. Any income tax payable on account of any such income or gain
shall be payable by the Borrower as provided in Section 4.11. Neither the Agent
nor the Security Agent shall have any liability for any loss resulting from any
such investment or sale thereof. Any such investment may be sold (without regard
to maturity date) by the Agent or the Security Agent whenever necessary to make
any withdrawal or distribution required by this Agreement. The Security Agent
and the Agent will promptly notify each other and the Borrower of any loss
resulting from any such investment and the Agent, in its sole discretion, may
decide that the affected Account shall be reimbursed from Revenues received
pursuant to Section 4.02 hereof and the Security Agent, upon receiving written
instructions from the Agent, will make the reimbursement or reimbursements
specified in such instructions. "Permitted Investments" shall mean (a)
marketable direct obligations of the United States of America, (b) marketable
obligations directly and fully guaranteed as to interest and principal by the
United States of America, (c) demand deposits with the Security Agent, and time
deposits, certificates of deposit and banker's acceptances issued by (i) the
Agent or (ii) any member bank of the Federal Reserve System which is organized
under the laws of the United States of America or any state thereof or any
United States branch of a foreign bank, in each case whose long-term debt
securities are rated "A" or better by Standard & Poor's Corporation and "A2" or
better by Xxxxx'x Investors Service, Inc., (d) commercial paper or tax exempt
obligations given the highest rating by Xxxxx'x Investors Service, Inc. and
Standard & Poor's Corporation, (e) obligations of the Agent or any bank
described in clause (c) above, in respect of the repurchase of obligations of
the type as described in clauses (a) and (b) hereof, provided that such
repurchase obligations shall be fully secured by obligations of the type
described in said clauses (a) and (b) and the possession of such obligations
shall be transferred to, and segregated from other obligations owned by, the
Agent or any such bank, (f) instruments rated "AAA" by Standard & Poor's
Corporation and "Aaa" by Xxxxx'x Investors Service, Inc. issued by investment
companies and having a maturity of 180 days or less, (g) eurodollar certificates
of deposit issued by the Agent or any bank described in clause (c) above, and
(h) marketable securities rated not less than "A-1" by Standard & Poor's
Corporation or not less than "Prime-1" by Xxxxx'x Investors Service, Inc. In no
event shall any cash in the Accounts be invested in any obligation, certificate
of deposit, acceptance, commercial paper or instrument which by its terms
matures (A) more than 180 days after the date of investment, unless the Agent or
a bank meeting the requirement of clause (c) above shall have agreed to
repurchase such obligation, certificate of deposit, acceptance, commercial paper
or instrument at its purchase price plus earned interest within no more than 180
days after its purchase hereunder or (B) after the next Installment Payment Date
or Bond Redemption Date.
ARTICLE VI
Security Agent
SECTION 6.01. Rights, Duties, etc. The acceptance by the Security Agent
and by the Agent of their respective duties hereunder is subject to the
following terms and conditions which the parties to this Agreement hereby agree
shall govern and control with respect to the rights, duties, liabilities and
immunities of the Security Agent and of the Agent:
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(a) it shall act hereunder as an agent only and shall not be
responsible or liable in any manner whatever for soliciting any funds or
for the sufficiency, correctness, genuineness or validity of any funds
or securities deposited with or held by it;
(b) it shall be protected in acting or refraining from acting
upon any written notice, certificate, instruction, request or other
paper or document, as to the due execution thereof and the validity and
effectiveness of the provisions thereof and as to the truth of any
information therein contained, which it in good faith believes to be
genuine;
(c) it shall not be liable for any error of judgment or for any
act done or step taken or omitted except in the case of its gross
negligence, willful misconduct or bad faith;
(d) it may consult with and obtain advice from counsel of its own
choice in the event of any dispute or question as to the construction of
any provision hereof;
(e) it shall have no duties as Security Agent or Agent, as the
case may be, except those which are expressly set forth herein and in
any modification or amendment hereof; provided, however, that no such
modification or amendment hereof shall affect its duties unless it shall
have given its prior written consent thereto;
(f) it may execute or perform any duties hereunder either
directly or through agents or attorneys;
(g) it may engage or be interested in any financial or other
transactions with any party hereto and may act on, or as depositary,
trustee or agent for, any committee or body of holders of obligations of
such Persons as freely as if it were not Security Agent or Agent, as the
case may be, hereunder; and
(h) it shall not be obligated to take any action which in its
reasonable judgment would involve it in expense or liability unless it
has been furnished with reasonable indemnity.
SECTION 6.02. Resignation or Removal. (a) The Security Agent may at any
time resign by giving notice to each other party to this Agreement, such
resignation to be effective upon the appointment of a successor Security Agent
as hereinafter provided.
(b) The Agent may remove the Security Agent at any time by giving
notice to each other party to this Agreement. The Borrower may remove the
Security Agent at any time with the approval of the Agent by giving written
notice to the Security Agent (countersigned by the Agent). Each such removal to
be effective upon the appointment of a successor Security Agent as hereinafter
provided.
(c) In the event of any resignation or removal of the Security Agent, a
successor Security Agent, which shall be a bank or trust company organized under
the laws of the United States of America or of the State of New York or the
State of North Carolina, having a corporate trust office in New York City or
North Carolina and a capital and surplus of not less than $100,000,000, shall be
appointed by the Agent. If a successor Security Agent shall not have been
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appointed and accepted its appointment as Security Agent hereunder within 45
days after such notice of resignation of the Security Agent or such notice of
removal of the Security Agent, the Security Agent or the Agent may apply to any
court of competent jurisdiction to appoint a successor Security Agent to act
until such time, if any, as a successor Security Agent shall have accepted its
appointment as above provided. Any successor Security Agent so appointed by such
court shall immediately and without further act be superseded by any successor
Security Agent appointed by the Agent. Any such successor Security Agent shall
deliver to each party to this Agreement a written instrument accepting such
appointment hereunder and thereupon such successor Security Agent shall succeed
to all the rights and duties of the Security Agent hereunder and shall be
entitled to receive the Security Agent Accounts from the predecessor Security
Agent.
ARTICLE VII
Determinations
SECTION 7.01. Value. Cash and Permitted Investments on deposit from
time to time in the Accounts shall be valued by the Agent or the Security Agent,
as the case may be, as follows:
(a) cash shall be valued at the face amount thereof; and
(b) Permitted Investments shall be valued at the lesser of the
face amount thereof and the purchase price thereof.
The Security Agent will advise the Borrower no less frequently than monthly of
the amount of cash and Permitted Investments on deposits in the Security Agent
Accounts.
SECTION 7.02. Other Determinations. The Borrower, the Agent and the
Security Agent may establish procedures not inconsistent with this Agreement
pursuant to which the Security Agent may conclusively determine, for purposes of
this Agreement, the amounts from time to time to be distributed or paid by the
Security Agent from cash available in the Accounts. In the event of any dispute
as to any such amount, the Security Agent is authorized and directed to retain
in its possession without liability to anyone all or any part of the cash
available in the Accounts until such dispute shall have been settled by mutual
agreement of the Borrower and the Agent or by a final order, decree or judgment
of a Federal or State court of competent jurisdiction located in the State of
North Carolina, and time for an appeal has expired and no appeal has been
perfected, but the Agent or the Security Agent, as the case may be, shall be
under no duty whatsoever to institute or defend any such proceedings.
SECTION 7.03. Available Cash. In determining the amount of available
cash in any Account at any time, in addition to any cash then on deposit in such
Account, the Agent and the Security Agent shall treat as available cash the
amount which the Agent or the Security Agent, as the case may be, would have
received on such day if it had liquidated all the Permitted Investments (at then
prevailing market prices) then on deposit in such Account. The Agent and the
Security Agent will use its best efforts to sell Permitted Investments such that
actual cash is available on each date on which each withdrawal or distribution
is to be made pursuant to this Agreement so
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that the Agent or the Security Agent, as the case may be, can make such
withdrawal or distribution in cash on such date.
ARTICLE VIII
Miscellaneous
SECTION 8.01. Fees and Indemnification of Security Agent. The Borrower
agrees to pay the reasonable fees of the Security Agent as compensation for its
services under this Agreement. In addition, the Borrower assumes liability for,
and agrees to indemnify, protect, save and keep harmless the Agent and the
Security Agent and its successors, assigns, agents and servants from and
against, any and all claims, liabilities, obligations, losses, damages,
penalties, costs and expenses that may be imposed on, incurred by, or asserted
against, at any time, the Agent or the Security Agent and in any way relating to
or arising out of the execution and delivery of this Agreement, the
establishment of the Accounts, the acceptance of deposits, the purchase or sale
of Permitted Investments, the retention of cash and Permitted Investments or the
proceeds thereof and any payment, transfer or other application of cash or
Permitted Investments by the Agent or the Security Agent in accordance with the
provisions of this Agreement, or as may arise by reason of any act, omission or
error of the Agent or the Security Agent made in good faith in the conduct of
its duties; except that the Borrower shall not be required to indemnify,
protect, save and keep harmless the Agent or the Security Agent, as the case may
be, against its own gross negligence or willful misconduct. The indemnities
contained in this Section 8.01 shall survive the termination of this Agreement.
SECTION 8.02. Waiver of Right of Set-Off. The Security Agent waives,
with respect to all of its existing and future claims against the Borrower or
any Affiliate thereof, all existing and future rights of set-off and banker's
liens against the Security Agent Accounts and all items (and proceeds thereof)
that come into its possession in connection with the Security Agent Accounts;
provided that the Security Agent retains the right to charge the Revenue Account
and the Insurance and Condemnation Proceeds Account (a) for all items deposited
in such Account after the date hereof and subsequently returned to the Security
Agent unpaid and (b) for all compensation and expenses with respect to the
Security Agent Accounts.
SECTION 8.03. Termination. The provisions of Articles III and IV with
respect to the Accounts shall terminate on the date on which all Obligations
shall have been paid in full, the Letters of Credit have been terminated and the
Security Documents shall have been discharged. Promptly after such termination,
the Agent shall notify the Security Agent of such termination and each of the
Agent and Security Agent hereby agrees that at the time of such termination (x)
any Permitted Investments in the Accounts held by it shall be liquidated as soon
as commercially prudent, (y) a reconciliation shall be made of the distributions
made from the Accounts held by it and any necessary adjustments to the balances
of such Accounts as a result of such reconciliation shall be made and (z) the
moneys in the Accounts held by it (after giving effect to such liquidation and
such adjustments) shall be distributed to the Borrower.
SECTION 8.04. Severability. If any one or more of the covenants or
agreements provided in this Agreement on the part of the parties hereto to be
performed should be determined
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by a court of competent jurisdiction to be contrary to law, such covenant or
agreement shall be deemed and construed to be severable from the remaining
covenants and agreements herein contained and shall in no way affect the
validity of the remaining provisions of this Agreement.
SECTION 8.05. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
SECTION 8.06. Amendments. This Agreement may not be modified or amended
without the prior written consent of each of the parties hereto.
SECTION 8.07. APPLICABLE LAW. THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH
CAROLINA.
SECTION 8.08. Notices. Except as otherwise specifically provided
herein, all notices, consents, directions, approvals, instructions, requests and
other communications required or permitted by the terms hereof to be given to
any Person shall be in writing and shall be duly given or made if delivered by
hand or courier or if sent by first class mail or by tested or authenticated
telex, or by facsimile transmission, or by telegram or cable, and shall be
deemed to have been duly given or made upon the receipt thereof if by hand or
courier or upon the transmittal thereof if by telex or facsimile transmission or
upon the delivery thereof to the telegraph office if by telegram or cable, or on
the third Business Day following the deposit thereof in the mail, first class
postage prepaid, in each case addressed to the party to which such notice is
required or permitted to be given or made hereunder, if to the Agent or the
Borrower at its address, facsimile number or telex number specified in the
Reimbursement Agreement, or if to the Security Agent to the address, facsimile
number or telex number set forth below its signature hereto, or such other
address, facsimile number or telex number as may be specified from time to time
by the Security Agent.
SECTION 8.09. Benefit of Agreement. This Agreement shall inure to the
benefit of, and be enforceable by, the parties hereto and their respective
successors and permitted assigns, and no other Person shall be entitled to any
of the benefits of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have each caused this Security
Deposit Agreement to be duly executed by their duly authorized officers, all as
of the day and year first above written.
COGENTRIX OF RICHMOND, INC.,
as the Borrower
By /s/ Xxxx X. Xxxxxxx
-----------------------------
Title: Vice President - Project Finance
BNP PARIBAS,
as Agent
By /s/ Xxxx X. Xxxxxx
-----------------------------
Title: Director
By /s/ Xxxx Xxxxx
-----------------------------
Title: Assistant Vice President
FIRST UNION NATIONAL BANK,
as Security Agent
By /s/ Xxxxx Xxxxxx
-----------------------------
Title: Vice President
FIRST UNION NATIONAL BANK,
as Securities Intermediary
By /s/ Xxxxx Xxxxxx
-----------------------------
Title: Vice President
Address for Notices:
First Union National Bank
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx
00000-0000
Attention: Corporate Trust Department
