EXHIBIT 4.5
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INTERCREDITOR AGREEMENT
Dated as of October 23, 2001
among
XXXXXX ENERGY LLC,
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee,
THE OTHER SECURED PARTIES
(OR REPRESENTATIVES THEREOF) PARTY HERETO,
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
as Collateral Agent, Intercreditor Agent and
Administrative Agent
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EXHIBIT 4.5
INTERCREDITOR AGREEMENT
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This INTERCREDITOR AGREEMENT (this "Agreement"), dated as of October
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23, 2001, is by and among XXXXXX ENERGY LLC, a Delaware limited liability
company (the "Issuer"), BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION, a
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national banking association formed under the laws of the United States, as
Trustee, Collateral Agent, Administrative Agent and Intercreditor Agent, and
each other Secured Party (or representative thereof) that becomes a party to
this Agreement pursuant to Section 7.18.
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RECITALS
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WHEREAS, the Issuer was formed for the purpose of developing,
financing, constructing, owning and operating an approximately 1,409 MW natural
gas-fired electric generation peaking facility located in Elwood, Illinois;
WHEREAS, the Issuer has determined to issue $402,000,000 aggregate
principal amount of its 8.159% Senior Secured Bonds due July 5, 2026 (the
"Bonds") pursuant to the Trust Indenture, dated as of the date hereof (the
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"Indenture"), between the Issuer and Bank One Trust Company, National
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Association, as trustee (the "Trustee");
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WHEREAS, the Issuer will use proceeds of the Bonds for (i) working
capital; (ii) financing, legal and consulting fees and expenses associated with
the offering of the Bonds; (iii) required funding of the Major Maintenance
Account; (iv) payments for residual construction costs under contracts with GE;
and (v) repayment in full of Indebtedness outstanding under existing
intercompany loans provided by the Members and partial reimbursement of the
Sponsors and Members for advances or capital contributions to the Issuer that
the Issuer has used to pay the costs of developing, constructing and financing
the Project, and for no other purpose; and
WHEREAS, in connection with the issuance and sale of the Bonds and the
execution of the related Financing Documents, the parties hereto wish to enter
into this Agreement in order to set forth certain intercreditor provisions,
including the method of voting and decision making for the Secured Parties, the
arrangements applicable to joint consultation and actions in respect of approval
rights and waivers, the limitations on rights of enforcement upon default and
the appointment of the Intercreditor Agent for the purposes set forth herein.
AGREEMENT
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NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS; RULES OF INTERPRETATION
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Section 1.1 Definitions. Except as otherwise expressly provided
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herein, capitalized terms used in this Agreement and its exhibits and schedules
shall have the meanings given thereto in the Indenture. In addition, the terms
set forth below shall have the respective meanings given such terms below. To
the extent such terms are defined by reference to other Transaction Documents,
for purposes hereof such terms shall continue to have their original definitions
(but will bear the governing law of this Agreement) notwithstanding any
termination, expiration or amendment of such agreements except to the extent the
parties hereto agree to the contrary.
"Acceleration Event" has the meaning set forth in Section 6.6.3.
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"Additional Indebtedness Facility" means the aggregate amount of the
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Combined Exposure outstanding under any Additional Indebtedness Agreement.
"Bond Facility" means the aggregate amount of the Combined Exposure
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outstanding under the Indenture.
"Combined Exposure" means, as of any date of calculation, the sum
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(calculated without duplication) of the following, to the extent the same is
held by a Secured Party: (i) the aggregate amount of Indebtedness outstanding
under the Facility Documents; (ii) the aggregate amount of all available undrawn
financing commitments under the Facility Documents which the Secured Parties
party thereto have no right to terminate other than upon the occurrence of an
event of default (howsoever defined) thereunder; and (iii) the maximum amount
available to be drawn under all letters of credit issued pursuant to the
Facility Documents.
"Debt Service Reserve L/C Facility" means the aggregate amount of the
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Combined Exposure outstanding under any Debt Service Reserve L/C Agreement.
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"Decision Period" means the period of time determined by the
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Intercreditor Agent and designated in any notice delivered by the Intercreditor
Agent for the Designated Voting Parties to make any decision hereunder, subject
to the following: (i) any such period of time may be extended by any Designated
Voting Party for a period not to exceed thirty (30) days on a one time basis
only for any notice; (ii) if there is no period for giving of notice, passage of
time or cure of the event or circumstance that is the subject of such notice
(each, a "Cure Period"), if the Cure Period has expired, or if the remaining
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Cure Period is less than fifteen (15) days after the date of such notice, the
Decision Period shall end not earlier than fourteen (14) days nor later than
twenty-one (21) days after the date of such notice; and (iii) in all other
cases, the Decision Period shall end not earlier than fourteen (14) days after
the date of such notice nor later than the end of the Cure Period; provided that
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the Intercreditor Agent may designate a lesser period (being at least seven (7)
days) as it may consider necessary or advisable in circumstances where the
interests of the Secured Parties or any of them would otherwise be likely to be
prejudiced.
"Default" means any event or condition that, with the giving of notice
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or the passage of time, or both, would constitute an Event of Default.
"Designated Voting Party" means, at any time, with respect to any
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Voting Facility, the Person then entitled to cast the votes under this Agreement
for such Voting Facility. The Designated Voting Party for each Voting Facility
is as follows:
(a) with respect to the Bond Facility, the Designated Voting
Party is the Trustee acting in accordance with the terms and provisions of
the Indenture;
(b) with respect to any Working Capital Facility, the Designated
Voting Party is the Working Capital Agent therefor acting in accordance
with the terms and provisions of the applicable Working Capital Agreement;
(c) with respect to any Debt Service Reserve L/C Facility, the
Designated Voting Party is the Debt Service Reserve L/C Agent therefor,
acting in accordance with the terms and provisions of the applicable Debt
Service Reserve L/C Agreement; and
(d) with respect to any Additional Indebtedness Facility, the
Designated Voting Party is the Additional Indebtedness Agent therefor,
acting in accordance with the terms and provisions of the applicable
Additional Indebtedness Agreement.
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"Event of Default" means an "event of default" under any Facility
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Document.
"Facility Documents" means, collectively, the Indenture, any Working
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Capital Agreement, any Debt Service Reserve L/C Agreement and any Additional
Indebtedness Agreement.
"Fundamental Decisions" has the meaning set forth in Section 6.1.
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"Initiating Percentage" means Designated Voting Parties representing,
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in the aggregate, (i) in the case of an Event of Default under Section 8.1(a) of
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the Indenture or any similar Event of Default under any other Financing
Document, Secured Parties holding at least thirty-three and one-third percent
(33 1/3%) of the aggregate Combined Exposure, and (ii) in the case of any other
Event of Default, Senior Secured Parties holding greater than fifty percent
(50%) of the aggregate Combined Exposure.
"Intercreditor Vote" means, at any time, a vote conducted in
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accordance with the procedures set forth in Article 4 of this Agreement among
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the Designated Voting Parties with respect to the particular decision at issue
at such time.
"Loan Party" means any of the Intercreditor Agent, the Administrative
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Agent, the Collateral Agent or any Designated Voting Party, as applicable.
"Majority Secured Parties" means Secured Parties holding greater than
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fifty percent (50%) of the aggregate Combined Exposure.
"Modification" means, with respect to any Financing Document, any
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amendment, supplement, Waiver or other modification of the terms and provisions
thereof.
"Notice of Default" has the meaning set forth in Section 5.1.
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"One Hundred Percent Secured Parties" means Secured Parties holding
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one hundred percent (100%) of the aggregate Combined Exposure.
"Other Unit" has the meaning set forth in Section 2.2.3.
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"Proposed Remedies" has the meaning set forth in Section 5.2.1.
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"Relevant Person" means any Project Party, any Designated Voting
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Party, any other Secured Party or any other advisor or other Person with respect
to any of the Transaction Documents.
"Remedies Commencement Date" has the meaning set forth in Section
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5.2.2.
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"Remedies Initiation Notice" has the meaning set forth in Section
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5.2.1.
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"Remedies Instruction" has the meaning set forth in Section 5.3.1.
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"Required Secured Parties" has the following meaning:
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(a) Designated Voting Parties representing, in the aggregate, the
One Hundred Percent Secured Parties with respect to any Modification,
instruction or exercise of discretion pursuant to Section 6.1;
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(b) Designated Voting Parties representing, in the aggregate, the
Majority Secured Parties with respect to any Modification, instruction or
exercise of discretion pursuant to Section 6.2, except as otherwise
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provided therein;
(c) the Initiating Percentage with respect to any decision to
exercise remedies made pursuant to Section 5.2.3; or
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(d) Designated Voting Parties representing, in the aggregate, the
Majority Secured Parties with respect to any other action not otherwise
described or dealt with in this definition of "Required Secured Parties" or
elsewhere in this Agreement and not otherwise specifically delegated to the
Intercreditor Agent.
"Subordinated Affiliate Bonds" means Bonds which are beneficially or
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legally held by the Issuer, any equity participant in the Issuer or any of their
respective Affiliates and which are purchased after a Default or an Event of
Default shall exist and be continuing.
"Voting Facility" means any of the Bond Facility, any Working Capital
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Facility, any Debt Service Reserve L/C Facility or any Additional Indebted ness
Facility, as applicable.
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"Waiver" means, with respect to any particular conduct, event or other
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circumstance, any change to an obligation of any Person under any Transaction
Document requiring the consent of one or more Senior Secured Parties, which
consent has the effect of excusing performance of or compliance with such
obligation, or any Default or Event of Default with respect thereto to the
extent relating to such conduct, event or circumstance, provided that any Waiver
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shall be limited solely to the particular conduct, event or circumstance and
shall not purport, directly or indirectly, to alter or otherwise modify the
relevant obligation with respect to future occurrences of the same conduct,
event or circumstance.
"Working Capital Facility" means the aggregate amount of the Combined
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Exposure outstanding under any Working Capital Agreement.
Section 1.2 Rules of Interpretation. Except as otherwise expressly
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provided herein, the principles of construction set forth in the Indenture shall
apply to this Agreement.
ARTICLE II
INTERCREDITOR AGENT
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Section 2.1 Appointment of the Intercreditor Agent. Each of the
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Secured Parties that is a party hereto (for itself, each party on whose behalf
it executes this Agreement and any Person claiming through it) hereby appoints
Bank One Trust Company, National Association to act as its intercreditor agent
in connection with the Project and the Transaction Documents and authorizes it
to exercise such rights, powers, authorities and discretion as are specifically
delegated to the Intercreditor Agent by the terms hereof and any of the other
Financing Documents together with all such rights, powers, authorities and
discretion as are reasonably incidental thereto. The Intercreditor Agent shall
have no duties or obligations except those expressly set forth herein and in the
other Financing Documents. By its signature hereto, Bank One Trust Company,
National Association accepts such appointment.
Section 2.2 Intercreditor Agent's Rights and Obligations.
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2.2.1 In the course of its duties hereunder, the Intercreditor
Agent may at all times:
(a) assume, absent written notice to the contrary, that
(i) any representation warranty, recital or statement made by the
Issuer or any Project Party in connection with any Transaction
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Document is true, (ii) no Default or Event of Default exists; and
(iii) neither the Issuer nor any Project Party is in breach or default
of its obligations under any Transaction Document;
(b) assume any notice, certificate or report given by any
Relevant Person has been validly given by a Person authorized to do so
evidenced by a writing which states that such Person is an authorized
representative of such Relevant Person and act upon such notice or
certificate unless the same is revoked or superseded by a further such
notice or certificate;
(c) assume that the address, telecopy and tele phone numbers
for the giving of any written notice to any Person hereunder are those
identified in Section 7.1 until it has received from such Person a
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written notice designating some other office of such Person to replace
any such address, telecopy or telephone number, and act upon any such
notice until the same is superseded by a further such written notice;
(d) pay reasonable fees and expenses for the advice or
services of any lawyers, accountants, engineers, consultants or other
experts whose advice or services the Intercreditor Agent may determine
are necessary, expedient or desirable and rely upon any advice so
obtained, and, if it so decides to make any such payment, such fees
and expenses shall be reimbursed to the Intercreditor Agent pursuant
to Section 7.16; provided that it shall be under no obligation to act
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upon such advice if it does not deem such action to be appropriate;
(e) rely and act upon a certificate or request signed by or
on behalf of any Relevant Person with respect to any matters of fact
which might reasonably be expected to be within the knowledge of such
Relevant Person and which states that the Person signing such
certificate is an authorized representative of such Relevant Person
and, where applicable, states specifically the Facility Document and
provision thereof pursuant to which the Intercreditor Agent is being
directed to act;
(f) rely upon any communication (including, but not limited
to, any note, letter, cablegram, telegram, telecopy, telex or teletype
message) or document from any Person reasonably believed by it to be
genuine;
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(g) refrain from acting or continuing to act in accordance
with any instructions of the Required Secured Parties to begin any
legal action or proceeding arising out of or in connection with any
Transaction Document until it shall have received such indemnity,
security or undertaking for costs from the Secured Parties as it may
require (whether by payment in advance or otherwise) for all costs,
claims, losses and expenses (including reasonable legal fees and
expenses) and liabilities which it will or may expend or incur in
complying or continuing to comply with such instructions; and
(h) seek instructions from the Required Secured Parties as
to the exercise of any of its rights, powers or discretion hereunder
and in the event that it does so it shall not be considered as having
acted unreasonably when acting in accordance with such instructions
or, in the absence of any (or any clear) instructions, when refraining
from taking any action or exercising any right, power or discretion
hereunder.
2.2.2 The Intercreditor Agent shall, subject to Section 2.2.1:
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(a) promptly provide each Designated Voting Party with a
copy of any material notice or document which it, in its capacity as
Intercreditor Agent, receives from or delivers to: (i) the Issuer;
(ii) any Project Party; (iii) the Administrative Agent; (iv) the
Collateral Agent; (v) any other Designated Voting Party; (vi) any
Independent Consultant; or (vii) any Governmental Authority;
(b) except as otherwise provided herein, act as
Intercreditor Agent hereunder in accordance with any instructions
given to it by the Required Secured Parties; and
(c) if so instructed by the Required Secured Parties,
refrain from exercising any right, power or discretion vested in it as
the Intercreditor Agent hereunder.
2.2.3 The relevant branch(es), division(s) or department(s) of
the Person serving as the Intercreditor Agent hereunder shall be treated as a
separate entity from any other of its branches, divisions or departments ("Other
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Units") and, if any Other Unit should act for any Secured Party in any capacity
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in relation to any other matter, any information given by such Secured Party to
such Other Unit in such other capacity may be treated as confidential by such
Person.
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Section 2.3 Intercreditor Agent.
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2.3.1 Notwithstanding anything to the contrary expressed or
implied herein, the Intercreditor Agent shall not:
(a) be bound to inquire as to (i) whether or not any
representation or warranty made by any Person in connection with any
Transaction Document is true, (ii) the occurrence or other wise of
any Default or Event of Default, (iii) the performance by any Person
of its obligations under any of the Transaction Documents or (iv) any
breach of or default by any Person of its obligations under any of the
Transaction Documents;
(b) be bound to account to any Person for any sum or the
profit element of any sum received by it for its own account;
(c) be bound to disclose to any other Person any
information relating to the Project or any Person if such disclosure
would, or might, constitute a breach of any law or regulation or be
otherwise actionable at the suit of any Person;
(d) be under any fiduciary duties or obligations other
than those for which express provision is made herein or in any of the
other Financing Documents to which it is a party; or
(e) whether at the direction of the Required Secured
Parties (pursuant to a Remedies Instruction or otherwise), and
regardless of whether it is indemnified with respect thereto, be
required to take or direct the Collateral Agent to take any action
which it believes, based on a written opinion of counsel, is in
conflict with any Applicable Law, any Governmental Approval, this
Agreement or any other Financing Document or any order of any court
or administrative agency.
2.3.2 The Intercreditor Agent is not responsible for and does not
accept any responsibility for: (i) any recitals, statements, representations or
warranties made by the Issuer, any Project Party or any Secured Party (other
than itself in its capacity as Intercreditor Agent) contained in this Agreement
or any other Transaction Document or in any certificate or other document
referred to or provided for in, or received by any Secured Party under, this
Agreement or any other Transaction Document; (ii) the value, validity,
effectiveness, genuineness,
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enforceability or sufficiency of this Agreement or any other Transaction
Document or any other document referred to or provided for hereunder or
thereunder; (iii) the value, validity, perfection, priority or enforceability of
any Lien purported to be created by any Security Document; or (iv) any failure
by the Issuer, any Project Party or any Secured Party (other than itself in its
capacity as Intercreditor Agent) to perform its obligations under this Agreement
or any other Transaction Document; provided, however, that nothing in this
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Section 2.3.2 shall be deemed or construed as limiting the rights of the
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Intercreditor Agent or any Secured Party or the obligations of any Project
Party, in each case as is set forth in the applicable Transaction Documents.
2.3.3 Each of the Secured Parties that is a party hereto (for
itself, each party on whose behalf it executes this Agreement and any Person
claiming through it) understands and agrees that it has itself been, and will
continue to be, solely responsible for making its own independent appraisal of,
and investigations into, the financial condition, creditworthiness, condition,
affairs, status and nature of the Issuer and each Project Party and,
accordingly, each such Secured Party warrants to the Intercreditor Agent that it
has not relied on and will not hereafter rely on the Intercreditor Agent:
(a) to check or inquire on its behalf into the adequacy,
accuracy or completeness of any information provided by any Relevant
Person in connection with any of the Transaction Documents or the
transactions therein contemplated (whether or not such information has
been or is hereafter circulated to such Relevant Person by the
Intercreditor Agent); or
(b) to assess or keep under review on its behalf the
financial condition, creditworthiness, condition, affairs, status or
nature of any Relevant Person.
It is agreed and understood that the Trustee makes no representation as to
itself but only in its capacity as the Trustee and based only on the
authorization and represen tations set forth in the Indenture.
Section 2.4 Defaults. The Intercreditor Agent shall not be deemed to
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have knowledge or notice of the occurrence of any Default or Event of Default
unless the Intercreditor Agent has received a written notice (i) from a
Designated Voting Party, referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "Notice of Default", (ii)
from the Issuer referring to a Transaction Document, describing such Default or
Event of Default, (iii) from a Project Party stating that a default exists
pursuant to any
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Transaction Document to which it is a party or (iv) from the Collateral Agent
stating that it has received a notice from a Project Party that a default exists
pursuant to a Transaction Document to which such Project Party is a party. If
the Intercreditor Agent receives such a notice of the occurrence of a Default or
an Event of Default, the Intercreditor Agent shall give prompt notice thereof to
each Designated Voting Party (and each Designated Voting Party shall, in turn,
give prompt notice thereof to each party to its respective Facility Document).
The Intercreditor Agent shall take such action with respect to any Default or
Event of Default as is provided in this Intercreditor Agreement; provided,
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however, that unless and until the Intercreditor Agent shall have received
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directions from the Required Secured Parties, the Intercreditor Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as is in the best interest of
the Secured Parties.
Section 2.5 Nonliability. Each of the Secured Parties that is a
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party hereto (for itself, each party on whose behalf it executes this Agreement
and any Person claiming through it) agrees that neither the Intercreditor Agent
nor any of its officers, directors, employees, affiliates or agents shall be
liable to any Secured Party or any other Relevant Person for any action taken or
omitted under this Agreement or under the other Financing Documents or in
connection herewith or therewith except to the extent directly caused by the
Intercreditor Agent's gross negligence or willful misconduct, as finally
determined by a court of competent jurisdiction no longer subject to appeal or
review. Each of the Secured Parties that is a party hereto (for itself, each
party on whose behalf it executes this Agreement and any Person claiming through
it) hereby releases, waives, discharges, exculpates and covenants not to xxx the
Intercreditor Agent for any action taken or omitted under this Agreement or
under the other Financing Documents and from any cost, claim, loss, expense or
liability resulting therefrom, except to the extent directly caused by the
Intercreditor Agent's gross negligence or willful misconduct, as finally deter
mined by a court of competent jurisdiction no longer subject to appeal or
review.
Section 2.6 Resignation of the Intercreditor Agent.
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2.6.1 The Intercreditor Agent may resign its appointment hereunder
at any time without providing any reason therefor by giving not less than thirty
(30) days prior written notice to that effect to each of the other parties
hereto, provided that neither such resignation or a removal of the Intercreditor
Agent pursuant to Section 2.7, shall be effective until:
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(a) a successor for the Intercreditor Agent is appointed
in accordance with (and subject to) the succeeding provisions of this
Section 2.6;
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(b) the resigning or removed Intercreditor Agent has
transferred to its successor all of its rights, powers, privileges and
obligations in its capacity as Intercreditor Agent under this
Agreement and the other Financing Documents; and
(c) the successor Intercreditor Agent has executed and
delivered an agreement to be bound by the terms hereof and of the
other Financing Documents and to perform all duties required of the
Intercreditor Agent hereunder and under the other Financing Documents.
2.6.2 If the Intercreditor Agent has given notice of its
resignation pursuant to this Section 2.6 or if the Required Secured Parties give
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the Intercreditor Agent notice of removal pursuant to Section 2.7, then a
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successor to the Intercreditor Agent may be appointed by the Required Secured
Parties during the period of such notice but, if no such successor is so
appointed within thirty (30) days after the above notice, the Intercreditor
Agent may petition a court of competent jurisdiction or it may appoint such a
successor which (a) is authorized under the laws of the jurisdiction of its
incorporation to exercise corporation trust powers, (b) shall have a combined
capital and surplus of at least fifty million Dollars (US$50,000,000),] (c)
shall be rated "Baa3" or better by Xxxxx'x or "BBB-" or better by S&P and (d)
shall be acceptable to the Required Secured Parties (provided that, if the
Required Secured Parties do not confirm such acceptance in writing within thirty
(30) days following selection of such successor by the Intercreditor Agent or
select another Intercreditor Agent within such thirty (30) day period, then they
shall be deemed to have given such acceptance and such successor shall be deemed
appointed as the Intercreditor Agent hereunder) and, so long as no Default or
Event of Default has occurred and is continuing, the Issuer.
2.6.3 If a successor to the Intercreditor Agent is appointed
under the provisions of Section 2.6.1 or Section 2.6.2, then:
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(a) the predecessor Intercreditor Agent shall be
discharged from any further obligation hereunder (but without
prejudice to any accrued liabilities);
(b) notwithstanding the predecessor Intercreditor
Agent's resignation pursuant to this Section 2.6 or removal pursuant
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to
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Section 2.7, the provisions of this Agreement shall continue to inure
to its benefit as to any actions taken or omitted to be taken by it
under this Agreement and the other Financing Documents while it was
the Intercreditor Agent; and
(c) the successor Intercreditor Agent and each of the other
parties hereto shall have the same rights and obligations among
themselves as they would have had if such successor Intercreditor
Agent originally had been a party to this Agreement.
Section 2.7 Removal of the Intercreditor Agent. Designated Voting
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Parties representing, in the aggregate, Secured Parties holding at least thirty-
three percent (33%) of the Combined Exposure may remove the Intercreditor Agent
from its appointment hereunder with or without cause by giving not less than
ninety (90) days prior written notice to that effect to the Intercreditor Agent
and the Issuer; provided that no such removal shall be effective until a
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successor for the Intercreditor Agent is appointed in accordance with Section
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2.6. If the Intercreditor Agent is also the Collateral Agent and the
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Administrative Agent, it must also forfeit these roles if removed by the Secured
Parties as Intercreditor Agent.
Section 2.8 Authorization. The Intercreditor Agent is hereby
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authorized by each of the Secured Parties that is a party hereto (for itself,
each party on whose behalf it executes this Agreement and any Person claiming
through it) to execute, deliver and perform each of the Financing Documents to
which the Intercreditor Agent is a party and each Secured Party that is a party
hereto (for itself, each party on whose behalf it executes this Agreement and
any Person claiming through it) agrees to be bound by all of the agreements of
the Intercreditor Agent contained in the Financing Documents.
Section 2.9 Intercreditor Agent as Secured Party; Other Banking
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Business. With respect to any Secured Obligations held by it, the Person
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serving as Intercreditor Agent hereunder shall have the same rights and powers
under the Financing Documents as any other Secured Party and may exercise the
same as though it were not the Intercreditor Agent. The term "Secured Party",
"Secured Parties", "Holder" or "Holders", and any other similar terms, when used
with respect to such Person, shall, unless otherwise expressly indicated,
include such Person in its individual capacity. Such Person and its Affiliates
may accept deposits from, lend money to, act as trustee under indentures of and
generally engage in any kind of business with the Issuer or any other Person
without any duty to account therefor to the Secured Parties.
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Section 2.10 Notice of Amounts Owed. Upon the request of the
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Intercreditor Agent, in connection with the taking of any action hereunder by
the Intercreditor Agent, each Secured Party hereto shall promptly notify the
Intercreditor Agent in writing, as of any time that the Intercreditor Agent may
specify in such request, of (i) the aggregate amount of Secured Obligations
owing under its respective Facility Document as of such date, (ii) the
principal, interest, expenses and other components of such Secured Obligations,
and (iii) such other information as the Intercreditor Agent may reasonably
request.
ARTICLE III
SHARING
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Section 3.1 Payments Received by Intercreditor Agent or Collateral
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Agent. Subject to the provisions of Section 3.3 and the provisions set forth in
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each Facility Document which affect the allocation of funds among the Secured
Parties party to such Facility Document, all amounts paid to the Collateral
Agent or realized by the Collateral Agent that are to be redistributed to the
Secured Parties (other than the Designated Voting Parties in their respective
capacities as agents) shall be paid, to the extent funds are available, to each
Secured Party (without priority of any one over any other except as set forth in
Section 3.3) in accordance with Article IV of the Collateral Agency Agreement.
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Section 3.2 Payments Received by Any Other Senior Secured Party.
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Except as excluded in Section 3.3 or otherwise provided under this Agree ment,
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if any Secured Party (other than the Collateral Agent as contemplated by Section
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3.1 above) shall obtain any amount (whether (i) by way of voluntary or
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involuntary payment, (ii) by virtue of an exercise of any right of set-off,
banker's lien or counterclaim, (iii) as proceeds of any insurance policy
covering any proper ties or assets of the Issuer, (iv) from proceeds of
liquidation or dissolution of the Issuer or distribution of its assets among its
creditors, however such liquidation, dissolution or distribution may occur, (v)
as payment of any Senior Secured Obligations following the acceleration thereof,
whether in whole or in part, (vi) as consideration for the agreement of such
Secured Party or as part of any transaction or series of related transactions in
which such Secured Party shall have agreed to waive or amend any provision of
any Financing Document, (vii) from any realization on any Collateral, (viii) by
virtue of the application of any provision of any of the Financing Documents
(other than this Agreement), or (ix) in any other manner) other than amounts
obtained from or through the Collateral Agent pursuant to the Financing
Documents or amounts representing capitalized interest in respect of any
Financing Document, such Secured Party shall forthwith notify the Intercreditor
Agent thereof and shall promptly, and in any event within ten (10) Business Days
of its so
14
obtaining the same, pay such amount (less any reasonable costs and expenses
incurred by such Secured Party in obtaining such amount) to the Collateral Agent
for the account of the Secured Parties, to be shared among the Secured Parties
in accordance with Section 3.1. Upon receipt of any such payment, the Collateral
-----------
Agent shall distribute the appropriate amount to each Secured Party as provided
in the previous sentence.
Section 3.3 Amounts Not Subject to Sharing. Notwithstanding any
------------------------------
other provision of this Agreement or any other Financing Document, no Secured
Party shall have any obligation to share:
(a) any payment made to a Secured Party pursuant to any
provision of any Financing Document which is in the nature of a
closing or commitment fee or an indemnity against or reimbursement for
(i) additional funding costs and similar costs incurred by such
Secured Party including, without limitation, payments with respect to
increased reserve provisions, capital adequacy provisions, make-whole
premiums, breakage provisions or other similar provisions, (ii) costs
with respect to taxes incurred or payable by such Secured Party on
principal, interest and other payments payable to it under the
Financing Documents, and (iii) costs, liabilities, claims and other
expenses incurred by such Secured Party which are the subject of any
indemnity or reimbursement provision contained in the Financing
Documents;
(b) any non pro rata prepayment made to any Secured Party
pursuant to any Financing Document; and
(c) any payment of fees made to the Intercreditor Agent
pursuant to any separate fee arrangement between the Intercreditor
Agent and the Issuer.
Notwithstanding the foregoing, sharing of payments made with respect to a
particular Voting Facility shall be subject to the sharing provisions of the
applicable Facility Document.
Section 3.4 Presumption Regarding Payments. For purposes hereof, any
------------------------------
payment received by a Secured Party pursuant to this Article III may be presumed
-----------
by such Secured Party to have been properly received by such Secured Party in
accordance with this Article III unless such Secured Party receives notice from
-----------
any other Secured Party that such payment was not made in accordance herewith.
If any such distributed or shared payment is rescinded or must otherwise
15
be restored by the Secured Party that first obtained it, each other Secured
Party that shares the benefit of such payment shall return to such Secured Party
its portion of the payment so rescinded or required to be restored.
Section 3.5 No Separate Security. Each Secured Party that is a party
--------------------
hereto (for itself, each party on whose behalf it executes this Agreement and
any Person claiming through it) (a) agrees that all collateral security pledged
under the Security Documents is for the joint benefit of all the Secured Parties
and (b) represents and warrants to each other Secured Party that, in respect of
the Senior Secured Obligations owing to it, it has received no security or
guarantees from the Issuer or any of its Affiliates other than its interest in
the Collateral as provided in the Security Documents.
Section 3.6 Subordinated Affiliate Bonds. Notwithstanding any
----------------------------
provision of this Article III or any Financing Document to the contrary, so long
-----------
as any Default or Event of Default shall exist and be continuing, no sharing or
other payment shall be made in respect of any Subordinated Affiliate Bonds until
the remainder of the Secured Obligations have been indefeasibly paid in full in
cash or in cash equivalents. Any proceeds otherwise payable as contemplated by
this Agreement and the Collateral Agency Agreement in respect of any
Subordinated Affiliate Bonds shall be distributed to the remainder of the
Secured Parties in accordance with Article IV of the Collateral Agency
----------
Agreement.
ARTICLE IV
VOTING AND DECISION MAKING
--------------------------
Section 4.1 Decision Making.
---------------
4.1.1 Each Secured Party that is a party hereto (for itself,
each party on whose behalf it executes this Agreement and any Person claiming
through it) agrees that no Secured Party shall, except in accordance with the
provisions of this Agreement, but without prejudice to any separate rights
expressly granted to a Designated Voting Party under the Facility Documents,
exercise or enforce any right, remedy or power under any Financing Document
where such right, remedy or power arises as a result of a Default or an Event of
Default under such Financing Document (it being agreed that no acceleration in
respect of an Event of Default or termination or suspension of a commitment
under a Facility Document shall be deemed to be a remedy for any purposes of
this Agreement).
4.1.2 Each Secured Party that is a party hereto (for itself,
each party on whose behalf it executes this Agreement and any Person claiming
through
16
it) agrees that each decision made in accordance with the terms of this
Agreement shall be binding upon each Secured Party that is a party hereto (for
itself, each party on whose behalf it executes this Agreement and any Person
claiming through it) and each other party to the Financing Documents.
4.1.3 Notwithstanding Section 4.1.2 or any other term or
-------------
provision of this Agreement, no term or provision of any Facility Document may
be Modified except with the written consent of the applicable Designated Voting
Party thereto (acting in accordance with the terms of the relevant Facility
Document), but any Modification of a provision of any other Financing Document
made in accordance with the terms of this Agreement and such Financing Document
that is incorporated by reference into such Facility Document shall also be
deemed to modify such Facility Document, mutatis mutandis, without such written
consent of such Designated Voting Party.
Section 4.2 Voting Generally; Intercreditor Votes. Where, in
-------------------------------------
accordance with this Agreement or any other Financing Document, any
Modification, direction or other decision of the Intercreditor Agent, the
Collateral Agent or the Administrative Agent is required (other than as
otherwise provided in Section 5.2), the granting or withholding of such
-----------
Modification, the giving of such direction, or the making of such other decision
shall be determined through an Intercreditor Vote; provided, however, that the
-------- -------
Intercreditor Agent shall (or shall instruct any party it is entitled to
instruct to), at the request of the Issuer or any Designated Voting Party, make
such corrections to any Financing Document as are permitted under Section 12.1
of the Indenture and such other corrections so long as the corrections are of
patent errors in the document and reflective of the clear intent of the parties
to such document (for example, errant cross-references and misspelled defined
terms) and do not involve any material change whatsoever (the Intercreditor
Agent being entitled to rely on the advice of counsel and having all of the
rights provided to it under Article 2 hereof).
---------
Section 4.3 Intercreditor Votes; Each Party's Entitlement to Vote.
-----------------------------------------------------
4.3.1 Each Designated Voting Party shall be entitled to vote in
each Intercreditor Vote conducted under this Agreement.
4.3.2 For all purposes of voting under this Agreement, no
actual vote need be taken in respect of any Bond if the Indenture permits the
Trustee to rely on a certificate, report of an expert or Rating Agency
confirmation in determining how to cast its votes in any Intercreditor Vote.
Upon receipt of such certificate, report or confirmation, the Trustee shall cast
its votes in accordance therewith.
17
4.3.3 Except (i) for the limitation on the enforcement of
rights, remedies and powers under Section 4.1.1, (ii) for matters requiring an
-------------
Intercreditor Vote under Section 4.2 or this Section 4.3 or (iii) as otherwise
----------- -----------
expressly provided for in a Facility Document, the respective Designated Voting
Parties may make all decisions, determine the acceptability of and rely on
certificates, exercise discretion, execute Modifications and grant Waivers as
are contemplated by such Facility Document.
Section 4.4 Intercreditor Votes; Votes Allocated to Each Party.
--------------------------------------------------
4.4.1 Each Person that is a Designated Voting Party for any
Intercreditor Vote shall have a number of votes in such Intercreditor Vote equal
to the portion of the Combined Exposure represented by its Voting Facility.
4.4.2 In calculating the percentage of the Combined Exposure in
any Intercreditor Vote consenting to, approving, waiving or otherwise providing
direction with respect to a decision which requires an Intercreditor Vote, the
total dollar amount of the Combined Exposure voting, through the Designated
Voting Parties, in any one direction with respect to such decision shall be
divided by the aggregate Combined Exposure. Each Designated Voting Party and
each of the Secured Parties that is a party hereto (for itself, each party on
whose behalf it executes this Agreement and any Person claiming through it)
hereby waives any and all rights it may have to object to or seek relief from
the decision of the Designated Voting Parties voting with respect to such matter
and agrees to be bound by such decision. Nothing contained in this Section
-------
4.4.2 shall preclude any Designated Voting Party from participating in any re-
-----
voting or further voting relating to such matter.
4.4.3 No Bonds held by the Issuer or any member of the Issuer
or any of their respective Affiliates shall have any vote in respect of any
matter and such Bonds shall be disregarded for all purposes of any such vote.
ARTICLE V
DEFAULTS AND REMEDIES
---------------------
Section 5.1 Notice of Defaults. Promptly after any Designated Voting
------------------
Party obtains knowledge of the occurrence of any Default or Event of Default
under any Financing Document to which it is a party or that any Default or Event
of Default under any Financing Document to which it is a party has ceased to
exist or has been rescinded, such Designated Voting Party shall notify the
Intercreditor Agent
18
in writing thereof (such notice, a "Notice of Default"). Each such Notice of
-----------------
Default shall specifically refer to this Section 5.1 and shall describe such
-----------
Default or Event of Default (or its cessation or rescission) in reasonable
detail (including the date of occurrence of the same). Upon receipt by the
Intercreditor Agent of any such Notice of Default, it shall promptly send copies
thereof to each Designated Voting Party.
Section 5.2 Election to Pursue Remedies Following Events of Default.
-------------------------------------------------------
5.2.1 At any time after the occurrence of an Event of Default,
any Designated Voting Party in respect of a Facility Document under which an
Event of Default has occurred and is continuing may serve a notice (such notice,
a "Remedies Initiation Notice") on the Intercreditor Agent which describes the
--------------------------
Event of Default with respect to which such Designated Voting Party is seeking
to pursue remedies as well as the various remedies (the "Proposed Remedies")
-----------------
that such Designated Voting Party wishes the Intercreditor Agent to pursue.
5.2.2 If the Intercreditor Agent receives any Remedies
Initiation Notice from any Designated Voting Party pursuant to Section 5.2.1,
-------------
and if such notice has not been withdrawn by such Designated Voting Party prior
to the end of the fifth Business Day after the day on which the Intercreditor
Agent receives such notice, the Intercreditor Agent shall promptly after such
fifth Business Day provide each Designated Voting Party with a copy of such
notice and inform each of them of the date (such date, which shall be the 30th
day after the date that the Intercreditor Agent receives the Remedies Initiation
Notice, the "Remedies Commencement Date") on which the Intercreditor Agent will
--------------------------
commence the exercise of the Proposed Remedies if so directed by Designated
Voting Parties constituting the Initiating Percentage. Unless the Remedies
Initiation Notice was executed by Designated Voting Parties constituting the
Initiating Percentage, the Intercreditor Agent shall request instructions from
the Designated Voting Parties as to whether the Intercreditor Agent should
exercise the Proposed Remedies or other remedies on the Remedies Commencement
Date or no remedies.
5.2.3 If, on or prior to the Remedies Commencement Date (as
that date may be extended pursuant to the definition of Decision Period),
Designated Voting Parties constituting the Initiating Percentage direct the
Intercreditor Agent to exercise remedies (which direction may include an
instruction to exercise the Proposed Remedies or an instruction to exercise
other remedies), the Intercreditor Agent shall exercise any such remedies in
accordance with Section 5.4 below beginning on the Remedies Commencement Date as
-----------
directed by Designated Voting Parties constituting the Initiating Percentage,
provided that the Event of Default which is the subject of such Remedies
Initiation Notice has not been previously
19
cured or waived (by Modification of the provisions giving rise to such Event of
Default in accordance with the terms of Article 6 of this Agreement).
---------
5.2.4 During the period prior to the Remedies Commencement Date
with respect to any Event of Default, no Secured Party (other than the
Intercreditor Agent as provided in the proviso to Section 2.4) shall be entitled
-----------
to exercise any remedy in connection with such Event of Default, nor shall any
Secured Party instruct the Intercreditor Agent to exercise any remedy in
connection with such Event of Default.
5.2.5 A Designated Voting Party may serve only one Remedies
Initiation Notice with respect to any Event of Default and each Remedies
Initiation Notice served by such Designated Voting Parties shall be deemed to
have been served with respect to all Events of Default in existence on the date
such Remedies Initiation Notice is served.
5.2.6 Nothing in this Section 5.2 shall be construed to
-----------
restrict the right of the Required Secured Parties to elect at any time to agree
to any Modification of the Financing Documents in accordance with Article 6 that
---------
could have the effect of waiving or rescinding such Event of Default.
Section 5.3 Exercise of Remedies.
--------------------
5.3.1 If the Required Secured Parties pursuant to Section 5.2.3
-------------
above elect to exercise remedies, then subject to Section 5.3.3 the
-------------
Intercreditor Agent shall follow the written instruction regarding the exercise
of remedies delivered by the Required Secured Parties which may be in the form
of an Intercreditor Vote (the "Remedies Instruction"). Each Remedies Instruction
--------------------
shall specify the particular action that the Required Secured Parties propose to
cause the Intercreditor Agent to take.
5.3.2 At the direction of the Required Secured Parties pursuant
to a Remedies Instruction, the Intercreditor Agent shall exercise the remedies
provided therein (provided that the relevant Security Documents permit such
--------
remedy) including, if so directed, to promptly instruct the Collateral Agent to
seek to enforce the Security Documents, to realize upon the Collateral or, in
the case of a proceeding against the Issuer under the Bankruptcy Code, to seek
to enforce the claims of the Secured Parties thereunder.
5.3.3 Each Remedies Instruction shall, except as otherwise
provided herein, be effective on the date set forth in such notice. In the event
that more than one group of Secured Parties constituting the Required Secured
Parties
20
delivers a Remedies Instruction, then the Remedies Instruction from the group
representing the greatest percentage of the Combined Exposure shall control
unless the Intercreditor Agent has already commenced action called for by
another Remedies Instruction having an earlier effective date, and the
Intercreditor Agent shall be entitled to ignore any Remedies Instruction
regarding the same Default or Event of Default provided by any other group of
Secured Parties.
5.3.4 Allocation of Collateral Proceeds. Upon the occurrence of
---------------------------------
an Acceleration Event, the proceeds of any collection, recovery, receipt,
appropriation, realization or sale of any or all of the Collateral or the
enforcement of any Security Document ("Collateral Proceeds") shall be applied in
-------------------
accordance with Article IV of the Collateral Agency Agreement.
----------
5.3.5 No Remedies. No Bonds held by the Issuer or any member of
-----------
the Issuer or any of their respective Affiliates shall have the benefit of any
remedies until the remainder of the Senior Secured Obligations are indefeasibly
paid in full in cash or cash equivalents.
ARTICLE VI
MODIFICATIONS; INSTRUCTIONS; OTHER RELATIONSHIPS
------------------------------------------------
Section 6.1 100% Voting Issues: Modifications of, and Instructions
-------------------------------------------------------
with Respect to, Fundamental Aspects of the Financing Documents. With respect to
---------------------------------------------------------------
any of the matters listed on the attached Schedule A (the "Fundamental
---------- -----------
Decisions"), (i) no Modification shall be agreed to by the Intercreditor Agent,
the Collateral Agent or the Administrative Agent under any Financing Document,
(ii) no instruction shall be given to the Intercreditor Agent under or with
respect to any Financing Document, and (iii) no discretion shall be exercised by
the Intercreditor Agent under or with respect to any Financing Document, unless,
in each case, an Intercreditor Vote is taken in accordance with the procedures
set forth in Section 6.4 and the One Hundred Percent Secured Parties, through
-----------
the Designated Voting Parties, authorize the Intercreditor Agent to agree to
such Modification, provide the Intercreditor Agent with such instruction or
authorize the Intercreditor Agent to exercise such discretion, as the case may
be.
Section 6.2 Majority Voting Issues: Modifications of, and
----------------------------------------------
Instructions with Respect to, Material Aspects of the Financing Documents.
-------------------------------------------------------------------------
Except as expressly provided for in Section 6.1 and Section 6.4 and except as
----------- -----------
set forth in the proviso to Section 4.2, (i) no Modification shall be agreed to
-----------
by the Intercreditor Agent, the Collateral Agent or the Administrative Agent
under any Financing Document, (ii) no instruction shall be given to the
Intercreditor Agent under or with
21
respect to any Financing Document, and (iii) no discretion shall be exercised by
the Intercreditor Agent under or with respect to any Financing Document, unless,
in each case, an Intercreditor Vote is taken in accordance with the procedures
set forth in Section 6.3 and the Majority Secured Parties authorize the
-----------
Intercreditor Agent to agree to such Modification, provide the Intercreditor
Agent with such instruction or authorize the Intercreditor Agent to exercise
such discretion, as the case may be.
Section 6.3 Certain Procedures Relating to Modifications,
---------------------------------------------
Instructions and Exercises of Discretion.
----------------------------------------
6.3.1 If, at any time:
(a) the Intercreditor Agent (i) proposes to agree
to a Modification or proposes to authorize any Secured Party to agree
to a Modification under any Financing Document or (ii) proposes to
exercise any discretion conferred on it under the Financing Documents;
or
(b) any Designated Voting Party or the Issuer (i)
proposes that there should be a Modification under any Financing
Document, (ii) proposes to provide the Intercreditor Agent with
instructions regarding the Financing Documents, or (iii) proposes a
matter with respect to which it believes the Intercreditor Agent
should exercise its discretion, and, in each case, notifies the
Intercreditor Agent to that effect;
then the Intercreditor Agent shall promptly notify each Designated Voting Party
of the matter in question specifying:
(i) the nature of the Modification, instruction or
exercise of discretion that is at issue (which shall be conspicuously
stated);
(ii) the Required Secured Parties applicable to the
decision; and
(iii) the Decision Period determined by the
Intercreditor Agent by which the Designated Voting Parties must provide the
Intercreditor Agent with their votes with respect to such decision.
22
6.3.2 Each Designated Voting Party shall, within the specified
Decision Period pursuant to Section 6.3.1, provide a certificate to the
-------------
Intercreditor Agent setting forth its vote with respect to the matter for which
its instructions were sought by the Intercreditor Agent under Section 6.3.1.
-------------
6.3.3 If (i) a Designated Voting Party fails to provide such a
certificate to the Intercreditor Agent setting forth its vote within the
specified Decision Period and (ii) the matter for which its instructions were
sought by the Intercreditor Agent requires a vote of the One Hundred Percent
Secured Parties, then the Intercreditor Agent shall notify such Designated
Voting Party on or before the close of business on the next Business Day
following the last day of the Decision Period of such Designated Voting Party's
failure to provide such certificate and request that it provide such certificate
no later than 11:00 a.m. on the third Business Day after the last day of the
Decision Period; provided that the Intercreditor Agent shall not be held liable
--------
for any failure by it to provide such notice to such Designated Voting Party;
and provided, further that if such Designated Voting Party does not provide such
-------- -------
certificate by 11:00 a.m. on the third Business Day after the last day of the
Decision Period, such Designated Voting Party shall be deemed to have cast its
votes against the subject decision.
Section 6.4 Modifications by Secured Parties to their Respective
----------------------------------------------------
Facilities. Notwithstanding any provision contained herein to the contrary,
----------
each Secured Party (other than the Intercreditor Agent, the Administrative Agent
and the Collateral Agent) may, at any time and from time to time, without any
consent of or notice to any other Secured Party and without impairing or
releasing the obligations of any Person under this Agreement: (a) make any
Modifications under the Facility Document to which such Person is a party (and
to which none of the Intercreditor Agent, the Collateral Agent or the
Administrative Agent is a party); or (b) release anyone liable in any manner
under, or in respect of the Senior Secured Obligations owing under, such
Facility Document (but only in respect of such Senior Secured Obligations). The
rights of each Secured Party pursuant to the foregoing sentence are subject to
the provisions of its respective Facility Document regarding such Modifications
and releases.
Section 6.5 Effect of Modification on Intercreditor Agent. No
---------------------------------------------
Modifications shall be made to any Financing Document by any party hereto that
adversely affects the Intercreditor Agent without the written consent of the
Intercreditor Agent.
23
Section 6.6 Provision of Information; Meetings.
----------------------------------
6.6.1 Each Secured Party that is a party hereto (for itself,
each party on whose behalf it executes this Agreement and any Person claiming
through it) agrees that it will, from time to time (as it deems reasonably
necessary or appropriate in its sole judgment), consult with the other Secured
Parties with respect to the Senior Secured Obligations, the Project, the
Collateral or the affairs of the Issuer in general.
6.6.2 Any Designated Voting Party may, at any time following
the occurrence and during the continuation of an Event of Default, request that
a meeting or meetings of the Designated Voting Parties be convened, at
reasonable times and locations, and with reasonable frequency, and upon such
request having been given in accordance herewith, such meetings shall be
convened as provided herein. Such a request for a meeting shall be made by
written notice given to each Designated Voting Party in accordance herewith.
Each such notice shall state the date of such meeting (which shall be not less
than fifteen (15) nor more than thirty (30) days after the date of such notice,
unless otherwise agreed by the Designated Voting Parties) and a general outline
of the issues to be discussed at such meeting. Any Designated Voting Party shall
have the right to appoint any Person (including, without limitation, another
Designated Voting Party) to act as its representative at any such meeting of
Designated Voting Parties. No Person shall be obligated to attend any such
meetings, and no votes shall be taken at such meeting unless consented to by the
Required Secured Parties. Any costs or expenses incurred by any Secured Party in
connection with the meetings described in this Section 6.6.2 shall be reimbursed
-------------
to such Secured Party in accordance with Section 7.16.
------------
6.6.3 Each Designated Voting Party shall use reasonable efforts
to make available promptly to each other Designated Voting Party any material
information received by it regarding the occurrence of any Default or Event of
Default or any determination to accelerate the Indebtedness under its Facility
Document (an "Acceleration Event") or other event requiring joint action;
------------------
provided, however, that this Section 6.6.3 shall not require any Designated
-------- ------- -------------
Voting Party to make available to any other Person (a) information subject to
confidentiality restrictions or governmental or security clearance requirements
prohibiting such disclosure, (b) analyses, data or reports prepared solely for
internal use, or (c) information that the Issuer is obligated to provide. No
Designated Voting Party shall have any liability for any failure to make
available to any other party such information or for any inaccuracy or
incompleteness of any such information made available in good faith.
24
6.6.4 Each Designated Voting Party further agrees that it will
from time to time provide such information to each other Designated Voting Party
as may be necessary to enable such Designated Voting Party to make any
calculation required under the Financing Documents.
6.6.5 Each Designated Voting Party shall provide copies of any
Modifications to the Financing Documents to the Intercreditor Agent.
ARTICLE VII
MISCELLANEOUS
-------------
Section 7.1 Addresses. Any communications between the parties hereto
---------
or notices provided herein to be given shall be deemed to have been given only
if such notice is in writing and delivered personally, or by registered or
certified first-class mail with postage prepaid, or made, given or furnished in
writing by confirmed telecopy or facsimile transmission, or by prepaid courier
service to the appropriate party as set forth below:
Issuer: Xxxxxx Energy LLC
c/o Peoples Energy Resources Corporation
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx Energy LLC
c/o Dominion Resources Services, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Trustee: Bank One Trust Company, National Association
1 Bank Xxx Xxxxx
Xxxx Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Global Corporate Trust Services
25
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Collateral Agent: Bank One Trust Company, National Association
1 Bank Xxx Xxxxx
Xxxx Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Global Corporate Trust Services
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Intercreditor Agent: Bank One Trust Company, National Association
1 Bank Xxx Xxxxx
Xxxx Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Global Corporate Trust Services
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Administrative Agent: Bank One Trust Company, National Association
1 Bank Xxx Xxxxx
Xxxx Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Global Corporate Trust Services
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Senior Secured
Parties Becoming
Party Hereto After
the Date Hereof: To be specified at the time of execution of a
counter part hereto pursuant to Section 7.18
------------
hereof.
Any party may change its address by giving notice of such change in the manner
set forth herein. Any notice given to a party by mail or by courier shall be
deemed delivered upon receipt thereof (unless the party refuses to accept
delivery, in which case the party shall be deemed to have accepted delivery upon
presentation). Any notice given to a party by telecopy or facsimile
transmission shall be deemed effective on the date it is actually sent to the
intended recipient by confirmed telecopy or facsimile transmission to the
telecopier number specified above.
26
Section 7.2 Delay and Waiver. No delay or omission to exercise any
----------------
right, power or remedy accruing upon the occurrence of any Default or Event of
Default or any other breach or default of the Issuer under this Agreement shall
impair any such right, power or remedy of any Secured Party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or in any similar breach or default thereafter occurring, nor shall any
single or partial exercise by any such party of any right, power or remedy
hereunder preclude any other or future exercise thereof or the exercise of any
other right, power or remedy, nor shall any waiver of any single Default, Event
of Default or other breach or default be deemed a waiver of any other Default,
Event of Default or other breach or default theretofore or thereafter occurring.
Any waiver, permit, consent or approval of any kind or character on the part of
any Secured Party of any Default, Event of Default or other breach or default
under this Agreement or any other Financing Document, or any waiver on the part
of any Secured Party, of any provision or condition of this Agreement or any
other Transaction Document must be in writing and signed by such Secured Party
and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or any other Financing
Document or by law or otherwise afforded to any Secured Party, shall be
cumulative and not alternative.
Section 7.3 Entire Agreement. This Agreement and the other
----------------
Financing Documents integrate all the terms and conditions mentioned herein or
incidental hereto and supersede all oral negotiations and prior writings in
respect to the subject matter hereof. In the event of any conflict between the
terms, conditions and provisions of this Agreement and any Financing Document
the terms, conditions and provisions of this Agreement shall prevail.
Section 7.4 Governing Law. This Agreement shall be governed by the
-------------
laws of the State of New York of the United States of America and shall for all
purposes be governed by and construed in accordance with the laws of such state
without regard to the conflict of law rules thereof other than Section 5-1401 of
the New York General Obligations Law; provided, however, that, to the extent any
-------- -------
terms of this Agreement are incorporated in and made part of any other Financing
Document, any such term so incorporated shall for all purposes be governed by
and construed in accordance with the law governing the Financing Document into
which such term is so incorporated.
Section 7.5 Severability. In case any one or more of the provisions
------------
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby, and the parties hereto
shall enter into good faith negotiations to replace the invalid, illegal or
unenforceable provision with
27
a view to obtaining the same commercial effect as this Agreement would have had
if such provision had been legal, valid and enforceable.
Section 7.6 Headings. Section headings have been inserted in this
--------
Agreement as a matter of convenience for reference only and it is agreed that
such section headings are not a part of this Agreement and shall not be used in
the interpretation of any provision of this Agreement.
Section 7.7 Successors and Assigns.
----------------------
7.7.1 The provisions of this Agreement shall be binding upon
and inure to the benefit of each party hereto and their respective successors
and assigns; provided that the Issuer shall not assign any of its rights or
--------
obligations hereunder without the consent of the Required Secured Parties.
7.7.2 Any Secured Party may transfer, assign or grant all or
such relevant part of its rights and obligations hereunder in connection with an
assignment or transfer of all or any part of its interest in its Senior Secured
Obligations in accordance with the applicable Financing Documents, provided
--------
that each assignee and participant shall be bound by the terms of this Agreement
and each applicable Financing Document.
Section 7.8 Reinstatement. This Agreement shall continue to be
-------------
effective or be reinstated, as the case may be, if at any time payment and
performance of the Issuer's obligations hereunder, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any Secured Party. In the event that any payment or any
part thereof is so rescinded, reduced, restored or returned, such obligations
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
Section 7.9 Counterparts. This Agreement may be executed in one or
------------
more duplicate counterparts and when signed by all of the parties listed below
shall constitute a single binding agreement.
Section 7.10 Termination. Upon the indefeasible payment in full in
-----------
cash of the Senior Secured Obligations in respect of each Financing Document and
the termination of all of the commitments of the Secured Parties under the
Financing Documents, and except as provided in Sections 7.8, 7.16 and 7.17, this
------------ ---- ----
Agreement shall terminate and be of no further force and effect.
28
Section 7.11 No Partnership. Nothing contained in this Agreement
--------------
and no action by any Secured Party is intended to constitute or shall be deemed
to constitute such Secured Parties (or any of them) a partnership, association,
joint venture or other entity.
Section 7.12 No Reliance. No Secured Party has relied on any
-----------
representation or warranty of any other Secured Party with respect to this
Agreement and the transactions contemplated hereunder unless such representation
or warranty has been set forth expressly in this Agreement.
Section 7.13 Third-Party Beneficiaries. This Agreement is for the
-------------------------
benefit of the parties hereto (and the Secured Parties claiming through such
parties) and their respective successors and permitted assigns, and nothing
herein shall give any other Person any benefit or any legal or equitable right
or remedy under this Agreement.
Section 7.14 Obligations of the Issuer Unaffected. The obligations
------------------------------------
of the Issuer under the Financing Documents are absolute and shall be unaffected
by this Agreement.
Section 7.15 Action without the Intercreditor Agent. If the
--------------------------------------
Intercreditor Agent shall not, in accordance with Section 2.2.1(g), be required
----------------
to take action as permitted by Section 2.2.1(g), the Secured Parties may then
----------------
elect, upon written notice to the Collateral Agent and the Issuer (provided that
--------
if a Bankruptcy Event shall have occurred with respect to the Issuer, such
notice shall not be required and shall be deemed to have been given upon the
election by the Secured Parties to take action hereunder), to take action
hereunder, including pursuing remedies directly and not acting through the
Intercreditor Agreement, if such remedies or other actions are otherwise
permitted by the terms of this Agreement.
Section 7.16 Costs and Expenses. The Issuer shall pay to each
------------------
Designated Voting Party all of their costs and expenses incurred in connection
with the preparation, negotiation and closing of this Agreement and the
documents contemplated hereby, including the reasonable fees, expenses and
disbursements of counsel retained by the Designated Voting Parties in connection
with the preparation of such documents and any amendments hereof or thereof, the
reasonable fees, expenses and disbursements of the Independent Consultants and
any other engineer ing, insurance and construction consultants to the Secured
Parties subsequent to the Closing Date, and the costs of the Designated Voting
Parties in administering the Secured Obligations, including the reasonable
travel and reasonable out-of-pocket costs incurred by the Designated Voting
Parties following the Closing Date. The Issuer shall reimburse the Collateral
Agent and the
29
Intercreditor Agent for all reasonable costs and expenses, including reasonable
attorneys' fees and Independent Consultant expenses, expended or incurred by the
Collateral Agent and the Intercreditor Agent in enforcing the Financing
Documents in connection with a Default or an Event of Default, in actions for
declaratory relief in any way related to the Financing Documents or in
collecting any sum which becomes due on the Secured Obligations.
Section 7.17 Indemnification.
---------------
7.17.1 Except as provided in Section 7.17.2, the Issuer shall
--------------
indemnify, defend and hold harmless each of the Intercreditor Agent, the
Collateral Agent, the Administrative Agent and the Trustee and their respective
officers, directors, shareholders, affiliates, controlling persons, employees,
agents and servants (collectively, the "Indemnitees") from and against and
-----------
reimburse the Indemnitees for:
(a) any and all claims, obligations, liabilities,
losses, damages, injuries (to person, property, or natural resources),
penalties, stamp or other similar taxes, actions, suits, judgments, costs
and expenses (including attorneys' fees subject to commercially reasonable
limitations) of whatever kind or nature, whether or not well founded,
meritorious or unmeritorious, which are demanded, asserted or claimed
against any such Indemnitee (collectively, "Subject Claims") in any way
--------------
relating to, or arising out of or in connection with this Agreement, the
other Transaction Documents or the Project, except for claims by the Issuer
against an Indemnitee (other than such claims determined against the
Issuer, as the case may be);
(b) any and all Subject Claims arising in connection
with the release or presence of any Environmentally Regulated Materials at
the Project, whether foreseeable or unforeseeable, including all costs of
removal and disposal of such Environmentally Regulated Materials, all
reasonable costs required to be incurred in (i) determining whether the
Project is in compliance and (ii) causing the Project to be in compliance,
with all Applicable Laws, all reasonable costs associated with claims for
damages to persons or property, and reasonable attorneys' and consultants'
fees and court costs; and
(c) any and all Subject Claims in any way relating to,
or arising out of or in connection with any claims, suits, liabilities
against the Issuer, any Member or any of their Affiliates (it being
understood that this Section 7.17 shall not entitle an Indemnitee to
------------
compensation for the costs of monitoring claims or suits against the
Issuer, any Member or any of their
30
Affiliates by third persons other than the Indemnitees except to the extent
reasonably required in such a claim or suit where participation therein by
the Indemnitee is reasonably deemed necessary to protect a material right
or interest of the Indemnitee).
7.17.2 The foregoing indemnities shall not apply with respect
to an Indemnitee, to the extent arising as a result of the gross negligence,
willful misconduct or bad faith of such Indemnitee or its officers or employees,
but shall continue to apply to other Indemnitees (e.g., willful misconduct by an
----
Intercreditor Agent employee will bar indemnification to the Intercreditor
Agent, but not to the Collateral Agent, the Administrative Agent or the
Trustee).
7.17.3 With respect to Subject Claims arising prior to the
payment in full of all Senior Secured Obligations of the Issuer under this
Agreement and the other Financing Documents, the provisions of this Section 7.17
------------
shall survive foreclosure of the Security Documents and satisfaction or
discharge of the Issuer's obligations under the Financing Documents, and shall
be in addition to any other rights and remedies of the Secured Parties.
7.17.4 In case any action, suit or proceeding shall be brought
against any Indemnitee, such Indemnitee shall promptly notify the Issuer of the
commencement thereof, and the Issuer shall be entitled, at its expense, acting
through counsel reasonably acceptable to such Indemnitee, to participate in,
and, to the extent that the Issuer desires, to assume and control the defense
thereof. Such Indemnitee shall be entitled, at its expense, to participate in
any action, suit or proceeding the defense of which has been assumed by the
Issuer. Notwithstanding the foregoing, the Issuer and the Indemnitee shall each
be entitled to participate with their own counsel, and the Issuer shall not be
accorded control over the defenses of any such action, suit or proceedings, if
and to the extent that, in the reasonable opinion of such Indemnitee and its
counsel, such action, suit or proceeding involves the genuine threat of the
imposition of criminal liability upon such Indemnitee or a fundamental conflict
of interest between such Indemnitee and the Issuer or between such Indemnitee
and another Indemnitee, and in such event (other than with respect to disputes
between such Indemnitee and another Indemnitee) the Issuer shall pay the
reasonable expenses of such Indemnitee in such defense.
7.17.5 The Issuer shall report to such Indemnitee on the status
of such action, suit or proceeding as developments shall occur and at least
within 60 days of the previous report. The Issuer shall deliver to such
Indemnitee a copy of each document filed or served on any party in such action,
suit or proceeding.
31
7.17.6 Notwithstanding the Issuer's rights hereunder to control
certain actions, suits or proceedings, any Indemnitee against whom any Subject
Claim is made shall be entitled to compromise or settle any such Subject Claim
if (a) failure to compromise or settle such Subject Claim could reasonably be
expected to have a material adverse effect on such Indemnitee, the Project or
such Indemnitee's interest in the Project and (b) the Issuer refuses to pursue
diligent, good faith and timely efforts, in consultation with the Indemnitee, to
settle such claim; provided that prior to entering into any final and binding
--------
compromise or settlement of any such Subject Claim without the Issuer's consent
such Indemnitee shall provide notice to, and shall consult with, the Issuer.
Any such compromise or settlement by the Indemnitee in accordance with this
Section 7.17 shall be binding upon the Issuer for purposes of this Section 7.17.
------------ ------------
7.17.7 Upon payment of any Subject Claim by the Issuer pursuant
to this Section 7.17 or other similar indemnity provisions contained herein to
------------
or on behalf of an Indemnitee, the Issuer, without any further action, shall be
subrogated to any and all claims that such Indemnitee may have relating thereto,
and such Indemnitee shall cooperate with the Issuer and give such further
assurances as are necessary or advisable to enable the Issuer vigorously to
pursue such claims.
7.17.8 Any amounts payable by the Issuer pursuant to this
Section 7.17 shall be regularly payable after the Issuer receives an invoice for
------------
such amounts from any applicable Indemnitee.
7.17.9 Notwithstanding anything to the contrary set forth
herein, the Issuer shall not, in connection with any one legal proceeding or
claim, or separate but related proceedings or claims arising out of the same
general allegations or circumstances, in which the interests of the Indemnitees
do not materially differ, be liable to the Indemnitees (or any of them) under
any of the provisions set forth in this Section 7.17 for the fees and expenses
------------
of more than one separate firm of attorneys (which firm shall be selected by the
affected Indemnitees) subject to the Issuer's reasonable approval.
The provisions of Sections 7.16 and 7.17 hereunder shall survive
------------- ----
termination of this Agreement and the other Financing Documents and the
resignation or removal of any Indemnity.
Section 7.18 Additional Secured Parties. Each of the parties to
--------------------------
this Agreement agrees that any Person which becomes a Secured Party (or
representative thereof) after the Closing Date shall become a party to this
Agreement upon execu tion and delivery by such Person of a counterpart to this
Agreement. Any Person that becomes a party to this Agreement pursuant to this
Section 7.18 shall be
------------
32
bound by and subject to the terms and conditions hereof and the covenants,
stipulations and agreements contained herein.
Section 7.19 Amendments. Amendments hereof shall be in writing,
----------
shall be made in accordance with Article VI and shall require the written
----------
consent of the Issuer.
33
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their officers thereunto duly authorized as of the day and year
first above written.
BANK ONE TRUST COMPANY, NATIONAL
ASOCIATION,
in its capacity as the Intercreditor Agent
By: /s/ Xxxxxx Xxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxx
Title: Account Executive
BANK ONE TRUST COMPANY, NATIONAL
ASSOCIATION,
in its capacity as the Collateral Agent
By: /s/ Xxxxxx Xxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxx
Title: Account Executive
BANK ONE TRUST COMPANY, NATIONAL
ASSOCIATION,
in its capacity as the Collateral Agent
By: /s/ Xxxxxx Xxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxx
Title: Account Executive
BANK ONE TRUST COMPANY, NATIONAL
ASSOCIATION,
in its capacity as the Collateral Agent
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx
Title: Account Executive
XXXXXX ENERGY LLC
By: /s/ Xxx Xxxxxxxx
---------------------------
Name: Xxx Xxxxxxxx
Title: Authorized Representative
Additional SENIOR SECURED PARTY
pursuant to Section 7.18
By:____________________________
Name:
Title:
Schedule A to Intercreditor Agreement
-------------------------------------
Fundamental Decisions
---------------------
The following Fundamental Decisions require the vote of the One
Hundred Percent Secured Parties:
(a) Any Modification of the Financing Documents to which
the Intercreditor Agent, the Collateral Agent or the Administrative Agent
is a party that has the effect of changing the date for (including any
changes to mandatory or voluntary prepayments), changing the method of
calculation contained in, altering the amount of, or changing the currency
of, any payment of principal, interest or of any other fee, commission or
any other amount payable to any Secured Party under any Financing Document;
(b) any Modification of the Financing Documents to which
the Intercreditor Agent, the Collateral Agent or the Administrative Agent
is a party that has the effect of releasing Collateral from the Lien of any
of the Security Documents or releasing funds held by the Collateral Agent
or the Administrative Agent, in each case other than as expressly permitted
in accordance with the terms of the Financing Documents;
(c) except as set forth in the proviso to Section 4.2 of
-----------
the foregoing Intercreditor Agreement, any Modification of Section 3.1(b)
--------------
of the Deposit and Disbursement Agreement;
(d) except as set forth in the proviso to Section 4.2 of
-----------
the foregoing Intercreditor Agreement and Section 12.1 of the Indenture,
any Modification of any provision of the Intercreditor Agreement;
(e) any Modification of any definition contained in the
Deposit and Disbursement Agreement or in any other Financing Docu ment to
which the Intercreditor Agent, the Collateral Agent or the Adminis trative
Agent is a party but only if and to the extent such Modification would
result in the making of any of the Modifications referred to in clauses (a)
through (d) above;
(f) any Modification of a Financing Document to which the
Intercreditor Agent, the Collateral Agent or the Administrative Agent is a
party which would permit the assignment by the Issuer of its rights under
any Financing Document or any Power Sales Agreement other than as
A-1
expressly permitted under the Financing Documents (prior to such
Modification).
A-2
TABLE OF CONTENTS
-----------------
Page
----
RECITALS......................................................................................... 1
AGREEMENT........................................................................................ 1
ARTICLE I DEFINITIONS; RULES OF INTERPRETATION................................................... 2
Section 1.1 Definitions....................................................................... 2
Section 1.2 Rules of Interpretation........................................................... 6
ARTICLE II INTERCREDITOR AGENT................................................................... 6
Section 2.1 Appointment of the Intercreditor Agent............................................ 6
Section 2.2 Intercreditor Agent's Rights and Obligations...................................... 6
Section 2.3 Intercreditor Agent............................................................... 9
Section 2.4 Defaults.......................................................................... 10
Section 2.5 Nonliability...................................................................... 11
Section 2.6 Resignation of the Intercreditor Agent............................................ 11
Section 2.7 Removal of the Intercreditor Agent................................................ 13
Section 2.8 Authorization..................................................................... 13
Section 2.9 Intercreditor Agent as Secured Party; Other Banking Business...................... 13
Section 2.10 Notice of Amounts Owed............................................................ 14
ARTICLE III SHARING.............................................................................. 14
Section 3.1 Payments Received by Intercreditor Agent or Collateral Agent...................... 14
Section 3.2 Payments Received by Any Other Senior Secured Party............................... 14
Section 3.3 Amounts Not Subject to Sharing.................................................... 15
Section 3.4 Presumption Regarding Payments.................................................... 15
Section 3.5 No Separate Security.............................................................. 16
Section 3.6 Subordinated Affiliate Bonds...................................................... 16
ARTICLE IV VOTING AND DECISION MAKING............................................................ 16
Section 4.1 Decision Making................................................................... 16
Section 4.2 Voting Generally; Intercreditor Votes............................................. 17
Section 4.3 Intercreditor Votes; Each Party's Entitlement to Vote............................. 18
Section 4.4 Intercreditor Votes; Votes Allocated to Each Party................................ 18
ARTICLE V DEFAULTS AND REMEDIES.................................................................. 19
Section 5.1 Notice of Defaults................................................................ 19
Section 5.2 Election to Pursue Remedies Following Events of Default........................... 19
Section 5.3 Exercise of Remedies.............................................................. 21
ARTICLE VI MODIFICATIONS; INSTRUCTIONS; OTHER RELATIONSHIPS...................................... 22
Section 6.1 100% Voting Issues: Modifications of, and Instructions with
Page
----
Respect to, Fundamental Aspects of the Financing Documents........................ 22
Section 6.2 Majority Voting Issues: Modifications of, and Respect to, Material Aspects of
the Financing Instructions with Documents......................................... 22
Section 6.3 Certain Procedures Relating to Modifications, Instructions and Exercises of
Discretion........................................................................ 22
Section 6.4 Modifications by Secured Parties to their Respective Facilities................... 24
Section 6.5 Effect of Modification on Intercreditor Agent..................................... 24
Section 6.6 Provision of Information; Meetings................................................ 24
ARTICLE VII MISCELLANEOUS....................................................................... 25
Section 7.1 Addresses......................................................................... 25
Section 7.2 Delay and Waiver.................................................................. 27
Section 7.3 Entire Agreement.................................................................. 27
Section 7.4 Governing Law..................................................................... 28
Section 7.5 Severability...................................................................... 28
Section 7.6 Headings.......................................................................... 28
Section 7.7 Successors and Assigns............................................................ 28
Section 7.8 Reinstatement..................................................................... 28
Section 7.9 Counterparts...................................................................... 29
Section 7.10 Termination....................................................................... 29
Section 7.11 No Partnership.................................................................... 29
Section 7.12 No Reliance....................................................................... 29
Section 7.13 Third-Party Beneficiaries......................................................... 29
Section 7.14 Obligations of the Issuer Unaffected.............................................. 29
Section 7.15 Action without the Intercreditor Agent............................................ 29
Section 7.17 Indemnification................................................................... 30
Section 7.18 Additional Secured Parties........................................................ 33
Schedule A - Fundamental Decisions
ii
