1
AMENDED AND RESTATED
SECURITY DEPOSIT AGREEMENT
AMENDED AND RESTATED SECURITY DEPOSIT AGREEMENT, dated as of October 7,
1994, among (i) SARANAC POWER PARTNERS, L.P., a Delaware limited partnership
(the "Partnership"), of which SARANAC ENERGY COMPANY, INC., a Delaware
corporation, is the general partner (the "General Partner" or "SECI"), (ii)
CREDIT SUISSE, as agent (in such capacity, the "Agent") (x) for the lenders
parties to the Loan Agreement referred to below (the "Lenders") and GENERAL
ELECTRIC CAPITAL CORPORATION, a New York corporation ("GE Capital"), as the
letter of credit issuer (in such capacity, the "Letter of Credit Issuer") and
the surety bond arranger (in such capacity, the "Surety Bond Arranger") party to
the Loan Agreement referred to below and (y) with respect to the Collateral
Security Documents (as defined in the Loan Agreement), (iii) GE Capital, as the
lender under the SECI Term Loan Agreement referred to below (in such capacity,
the "SECI Term Lender"), as the swap counterparty under the Swap Agreement
referred to below (in such capacity, the "Swap Counterparty"), as the agent
under the Original Loan Agreement (in such capacity, the "Original Agent") and
as a limited partner of the Partnership (in such capacity, the "GE Capital
Limited Partner"), (iv) TPC SARANAC PARTNER ONE, INC., a Delaware corporation
("TPC One"), (v) TPC SARANAC PARTNER TWO, INC., a Delaware corporation ("TPC
Two") and, together with TPC One, the "Other Limited Partners"), (vi) the
General Partner and (vii) THE FUJI BANK AND TRUST COMPANY, a bank organized
under the laws of the State of New York, as agent for the Agent, the Lenders, GE
Capital, the Other Limited Partners and the General Partner under this Amended
and Restated Security Deposit Agreement (in such capacity, the "Security
Agent").
W I T N E S S E T H :
WHEREAS, unless otherwise defined herein, all terms that are defined in
Amended and Restated Appendix A hereto shall have the meanings therein assigned
to such terms;
WHEREAS, in order to finance the costs of developing, constructing and
equipping the Project, the Partnership, North Country and the XXX entered into
the Loan Agreement pursuant to which the Lenders made Construction Loans and
Terms Loans to, and the Letter of Credit Issuer issued or will issue letters of
credit for the account of, the Partnership;
WHEREAS, the Partnership and the Swap Counterparty have entered into
the Swap Agreement;
WHEREAS, at the request of the Partnership, the Surety Bond Arranger
has entered into the Surety Bond Arrangements;
Amended and Restated
Security Deposit Agreement
2
WHEREAS, (i) the obligations of the Borrowers under the Loan Agreement
and the other Loan Documents (other than reimbursement and fee obligations in
respect of the Senior Debt Service Reserve "B" Letter of Credit and the Surety
Bond Arrangements Reimbursements Obligations), including their obligations to
repay the Term Loans with interest thereon, and (ii) the obligations of the
Partnership under the Swap Agreement are secured by, among other things, a first
assignment of and prior perfected security interest in all of the revenues of
the Partnership pursuant to the terms and provisions of the Security Agreement;
WHEREAS, in order to give effect to said assignment and security
interest, the Partnership, GE Capital, as Original Agent, Lender and Letter of
Credit Issuer, and the Security Agent entered into the Security Deposit
Agreement, dated as of the Conformed Agreement Date (the "Original Security
Deposit Agreement"), pursuant to which the Partnership agreed that certain of
its revenues would be paid directly to the Security Agent, as agent for the
Original Agent, the Construction Lenders and the Letter of Credit Issuer, and
held by the Security Agent as collateral security for the obligations referred
to in the preceding recital and distributed by the Security Agent as provided
therein;
WHEREAS, pursuant to the Capital Contribution Agreement, the GE Capital
Limited Partner made a capital contribution to the Partnership on the Initial
Capital Contribution Date in exchange for a limited partnership interest in the
Partnership and agreed, subject to the satisfaction of certain other conditions
precedent, to make additional capital contributions to the Partnership on or
prior to the Second Capital Contribution Date;
WHEREAS, on the Initial Capital Contribution Date, SECI, the GE Capital
Limited Partner and the Other Limited Partners executed and delivered the
Amended and Restated Partnership Agreement;
WHEREAS, it is a condition precedent to the making by the GE Capital
Limited Partner of its capital contributions on the Second Capital Contribution
Date that, among other things, the parties hereto shall have executed and
delivered this Agreement, which provides for the deposit, investment and
disbursement of revenues, cash, payments, insurance and condemnation proceeds,
securities, investments and other amounts during the term of the Partnership;
WHEREAS, the SECI Term Lender and SECI are parties to the SECI Term
Loan Agreement, pursuant to which the SECI Term Lender has agreed to make SECI
Term Loans to SECI;
Amended and Restated
Security Deposit Agreement
3
WHEREAS, the obligations of SECI under the SECI Term Loan Agreement and
the other SECI Loan Documents, including its obligations to repay the SECI Term
Loans with interest thereon, are secured by, among other things, a security
interest in SECI's rights as the general partner and as a limited partner of the
Partnership pursuant to the terms and provisions of the SECI Collateral Security
Documents;
WHEREAS, pursuant to the terms of the Original Security Deposit
Agreement, upon the satisfaction of the conditions precedent to the Second
Capital Contribution Date (including, without limitation, the execution and
delivery of this Agreement), the terms and conditions of the accounts created
pursuant to the Original Security Deposit Agreement are to be governed by this
Agreement;
WHEREAS, the parties to the Original Security Deposit Agreement have
agreed to amend and restate the Original Security Deposit Agreement as
hereinafter set forth; and
WHEREAS, the Fuji Bank and Trust Company has agreed to act as security
agent for the Secured Parties, the Partnership, the Other Limited Partners and
SECI pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereto hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.1 Incorporation of Definitions by Reference, etc. (a) All
terms in Appendix A not otherwise defined herein shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto, accounting terms not defined in Appendix A or
otherwise defined herein and accounting terms partly defined in Appendix A or
otherwise partly defined herein to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section,
schedule, exhibit and appendix references are to this Agreement unless otherwise
specified.
Amended and Restated
Security Deposit Agreement
4
(d) References to agreements defined herein or in Appendix A shall
include such agreements as they may be amended, supplemented or otherwise
modified from time to time in accordance with the provisions of the Basic
Documents.
(e) Terms defined in Appendix A or otherwise defined herein by
reference to any other agreement, document or instrument shall have the meanings
assigned to them in such agreement, document or instrument whether or not such
agreement, document or instrument is then in effect.
SECTION 1.2 Certain Defined Terms. The following terms shall have the
following meanings (such definitions to be equally applicable to both singular
and plural forms of the terms defined):
"Accounts" means the collective reference to the twenty cash collateral
accounts established by the Security Agent pursuant to and more particularly
described in Section 2.2.
"Base Reserve Debt Account" means the special account designated by
that name established by the Security Agent pursuant to Section 2.2.
"Base Reserve Equity Account" means the special account designated by
that name established by the Security Agent pursuant to Section 2.2.
"Completion Account" means the special account designated by that name
established by the Security Agent pursuant to Section 2.2.
"Current Account" means the special account designated by that name
established by the Security Agent pursuant to Section 2.2.
"Distribution Reserve Account" means the special account designated by
that name established by the Security Agent pursuant to Section 2.2.
"Insurance and Condemnation Proceeds Account" means the special account
designated by that name established by the Security Agent pursuant to
Section 2.2.
"Insurance and Condemnation Proceeds Deposits" means all cash, cash
equivalents, instruments, investments and securities at any time on deposit
in the Insurance and Condemnation Proceeds Account.
"Major Maintenance Costs" means all costs incurred by the Partnership
or the Operator for labor, materials and other direct expenses for any
overhaul of, or major maintenance procedure for, the Facility which requires
Amended and Restated
Security Deposit Agreement
5
significant disassembly or shutdown of the Facility pursuant to
manufacturers' guidelines or recommendations, engineering or operating
considerations or the requirements of any applicable Governmental Approval,
all as contemplated in the Operation and Maintenance Agreement.
"Major Maintenance Required Balance" means, as of any Distribution
Date, the sum of all Major Maintenance Required Contributions required
through such date (regardless of whether they were actually made).
"Major Maintenance Required Contribution" means, with respect to any
Monthly Transfer Date from and after the Second Capital Contribution Date,
initially an amount equal to $208,333.33 (such amount to be (i) increased on
each anniversary of the Date of Commercial Operation by a percentage equal
to the percentage by which the management fee payable to the Operator
pursuant to Section 5.1 of the Operation and Maintenance Agreement is
escalated pursuant to Section 5.2 of the Operation and Maintenance Agreement
and (ii) adjusted annually, if necessary, in connection with the approval of
the Partnership Operating Budget).
"Major Maintenance Reserve Account" means the special account
designated by that name established by the Security Agent pursuant to
Section 2.2.
"Monthly Transfer Date" has the meaning assigned to such term in
Section 4.1.
"Project Expense Accrual Account" means the special account designated
by that name established by the Security Agent pursuant to Section 2.2.
"Project Expense Accrual Account Contribution" means the amounts
identified by the Partnership in Item 3 of a Project Certificate delivered
pursuant to Section 4.1(a) to be deposited into the Project Expense Accrual
Account in respect of any Project Expense which (i) the Partnership elects
to accrue, (ii) is paid on a periodic basis (but not more frequently than
once per calendar quarter) and (iii) is contained in the Partnership
Operating Budget in effect at the time such contribution is made; provided,
however, that in no event shall any amount exceed an amount equal to the
Project Expense in respect of which such amount is being accrued divided by
the number of Monthly Transfer Dates during the period from and including
the date such contribution is made to and including the date such Project
Expense is required to be paid; and provided, further, that the Partnership
agrees to elect to accrue in approximately equal amounts on a monthly basis
amounts required to pay in full when due Project Expenses in respect of
property taxes and insurance.
Amended and Restated
Security Deposit Agreement
6
"Project Letters of Credit Required Balance" means an amount equal to
the aggregate stated amount of all issued and outstanding Project Letters of
Credit.
"Project Letters of Credit Required Contribution" means, with respect
to any Distribution Date occurring on or after the date twelve years after
the Date of Commercial Operation, and until such time as the Project Letters
of Credit Required Balance shall be on deposit in the Project Letters of
Credit Reserve Account, and so long as any Project Letter of Credit remains
outstanding, an amount equal to 20% (or such lesser amount as is necessary
to achieve the Project Letters of Credit Required Balance) of the
Distributable Cash distributable to the Other Partners pursuant to Section
4.3(b) of the Amended and Restated Partnership Agreement.
"Project Letters of Credit Reserve Account" means the special account
designated by that name established by the Security Agent pursuant to
Section 2.2.
"Retention Account" means the special account designated by that name
established by the Security Agent pursuant to Section 2.2.
"Revenue Account" means the special account designated by that name
established by the Security Agent pursuant to Section 2.2.
"Revenues" means all revenues and all other payments at any time
received by or on behalf of the Partnership including, without limitation,
Project Revenues, Special Payments and dividends, distributions and other
payments (including, without limitation, payments made by North Country in
respect of principal and interest on intercompany advances received by North
Country from the Partnership) from North Country (other than (i) the
proceeds of capital contributions received from the GE Capital Limited
Partner, TPC One and TPC Two pursuant to the Capital Contribution Agreement,
(ii) the proceeds of insurance or of a Taking payable into the Insurance and
Condemnation Proceeds Account pursuant to Section 4.6, (iii) payments
received by the Partnership under the Swap Agreement payable into the Senior
Debt Service Account, (iv) Special Payments payable into the Completion
Account and (v) the proceeds of the Capital Contributions, if any, made or
deemed to have been made by SECI to the Partnership pursuant to Section 2.5
of the SECI Term Loan Agreement or Section 8.6 of the Amended and Restated
Partnership Agreement), including, without limitation, all interest and
other income on funds on deposit in the Accounts (other than the
Distribution Reserve Account, the Retention Account, the SECI Debt Service
Account and the SECI Reserve Account), all payments received
Amended and Restated
Security Deposit Agreement
7
by the Partnership under the Power Purchase Agreement and the Steam
Supply Agreement and all other payments received by the Partnership from the
sale of electricity, heat and/or steam produced by the Facility, all
payments in respect of business interruption insurance and all payments
received from any other source whatsoever.
"SECI Debt Service Account" means the special account designated by
that name established by the Security Agent pursuant to Section 2.2.
"SECI Default" means a "Default" as such term is defined in the SECI
Term Loan Agreement.
"SECI Event of Default" means an "Event of Default" as such term is
defined in the SECI Term Loan Agreement.
"SECI Installment Payment Date" means an "Installment Payment Date" as
such term is defined in the SECI Term Loan Agreement.
"SECI Interest Payment Date" means an "Interest Payment Date" as such
term is defined in the SECI Term Loan Agreement.
"SECI Ratio" has the meaning assigned to such term in the SECI Term
Loan Agreement.
"SECI Reserve Account" means the special account designated by that
name established by the Security Agent pursuant to Section 2.2.
"Secured Parties" means the collective reference to the Agent, the
Lenders, the Letter of Credit Issuer (other than in its capacity as issuer
of the Senior Debt Service Reserve "B" Letter of Credit), the Swap
Counterparty and the SECI Term Lender.
"Senior Debt Service Account" means the special account designated by
that name established by the Security Agent pursuant to Section 2.2.
"Senior Debt Service Coverage Account" means the special account
designated by that name established by the Security Agent pursuant to
Section 2.2.
"Senior Debt Service Letter of Credit" means a letter of credit issued
by the Senior Debt Service Letter of Credit Issuer in favor of the Agent,
for the ratable benefit of the Lenders and for the account of the GE Capital
Limited Partner, substantially in the form of Exhibit B, in a stated amount
equal to the amount that, pursuant to the provisions of Sections 4.2(a) and
(b), is required to be transferred to
Amended and Restated
Security Deposit Agreement
8
the Senior Debt Service Account on a Monthly Transfer Date. Such Senior
Debt Service Letter of Credit will be drawn in full by the Agent on each
Installment Payment Date that immediately follows the delivery of such
Senior Debt Service Letter of Credit and the proceeds of such drawing will
be applied to the payment of the principal of and interest on the Term Loans
due on such Installment Payment Date.
"Senior Debt Service Letter of Credit Issuer" means GE Capital, so long
as it maintains a Standard & Poor's credit rating of "A" or better and in
the event that it does not maintain such rating or elects to assign the
Senior Debt Service Letter of Credit, GE Capital until a successor or
assignee which is a financial institution with a Standard & Poor's credit
rating of "A" or better and which is reasonably acceptable to the Required
Lenders issues a Senior Debt Service Letter of Credit, in either case as
issuer of the Senior Debt Service Letter of Credit, it being understood that
the Senior Debt Service Letter of Credit Issuer shall be an entity that
maintains at all times a Standard & Poor's credit rating of "A" or better
and if the Senior Debt Service Letter of Credit Issuer is no longer rated
"A" or better by Standard & Poor's, it will be replaced by an entity with a
Standard & Poor's credit rating of "A" or better.
"Senior Debt Service Reserve Account" means the special account
designated by that name established by the Security Agent pursuant to
Section 2.2.
"Senior Debt Service Reserve Letters of Credit" means the Senior Debt
Service Reserve "A" Letter of Credit and the Senior Debt Service Reserve "B"
Letter of Credit.
"Senior Debt Service Reserve 'A' Letter of Credit" means a letter of
credit issued by the Senior Debt Service Reserve Letter of Credit Issuer in
favor of the Agent, for the ratable benefit of the Secured Parties (other
than the SECI Term Lender) and for the account of the Partnership,
substantially in the form of Exhibit C, in a stated amount equal to
$6,600,000.
"Senior Debt Service Reserve 'B' Letter of Credit" means a letter of
credit issued by the Senior Debt Service Reserve Letter of Credit Issuer in
favor of the Agent, for the ratable benefit of the Secured Parties (other
than the SECI Term Lender) and for the account of the Partnership,
substantially in the form of Exhibit D, in a stated amount equal to the
lesser of (i) the Base Reserve Amount and (ii) the excess, if any, of (A)
the sum of (1) the aggregate amount of transfers that have been made from
the Base Reserve Debt Account to the Base Reserve Equity Account and
immediately withdrawn from the Base Reserve Equity Account
Amended and Restated
Security Deposit Agreement
9
to make Level 1 Distributions to the GE Capital Limited Partner and (2)
the aggregate amount of drawings made under any Base Reserve Letter of
Credit to make Level 1 Distributions to the GE Capital Limited Partner over
(B) the sum of (1) the aggregate amount of deposits made into the Base
Reserve Debt Account pursuant to Section 4.2(d)(ii) and (2) the aggregate
amount of reinstatements of the stated amount of any Base Reserve Letter of
Credit made after any drawings thereof pursuant to Section 4.9(b).
"Senior Debt Service Reserve Letter of Credit Issuer" means GE Capital,
so long as it maintains a Standard & Poor's credit rating of "A" or better
and in the event that it does not maintain such rating or elects to assign a
Senior Debt Service Reserve Letter of Credit, GE Capital until a successor
or assignee which is a financial institution with a Standard & Poor's credit
rating of "A" or better and which is reasonably acceptable to the Required
Lenders issues a Senior Debt Service Reserve Letter of Credit, in either
case as issuer of the Senior Debt Service Reserve "A" Letter of Credit and
the Senior Debt Service Reserve "B" Letter of Credit, it being understood
that the Senior Debt Service Reserve Letter of Credit Issuer shall be an
entity that maintains at all times a Standard & Poor's credit rating of "A"
or better and if the Senior Debt Service Reserve Letter of Credit Issuer is
no longer rated "A" or better by Standard & Poor's, it will be replaced by
an entity with a Standard & Poor's credit rating of "A" or better.
"Special Payments" means all liquidated damage payments made by any
contractor (including, without limitation, the Contractor) to the
Partnership pursuant to any Assigned Contract (including, without
limitation, the Construction Contract) relating to the engineering of,
procurement of services, equipment, supplies or other materials for or
related to the construction or repair of the Project.
"Standard & Poor's" means Standard & Poor's Corporation.
"Steam Reserve Account" means the special account designated by that
name established by the Security Agent pursuant to Section 2.2.
"Swap Counterparty Account" means the special account designated by
that name established by the Security Agent pursuant to Section 2.2.
"Taking" means a taking of title to, or use or occupancy of, all or any
part of the Project as a result of the exercise of the right of condemnation
or power of eminent domain or similar power or the exercise by a
Amended and Restated
Security Deposit Agreement
10
governmental body of a non-contractual right to purchase all or any
part of the Project, or a sale or other transfer of all or any part of the
Project in lieu of condemnation or exercise of power of eminent domain.
"Tomen Distribution Account" means the special account designated by
that name established by the Security Agent pursuant to Section 2.2.
"Value" means, for cash, cash equivalents and Permitted Investments,
the value thereof determined in accordance with Section 7.1.
"Wind-up Account" means the special account designated by that name
established by the Security Agent pursuant to Section 2.2.
"Working Capital Account" means a checking account established by the
Security Agent in the name of the Partnership pursuant to Section 2.2(b) and
used for the payment by the Partnership of various minor costs and expenses
specified in Section 4.1(b) which are not otherwise directly provided for in
this Agreement; the Working Capital Account is not an "Account" for purposes
of this Agreement other than for purposes of Sections 3.5, 3.6 and 4.20 and
Articles VI, VII, VIII and IX.
ARTICLE II
Appointment of Security Agent; Establishment of Accounts
SECTION 2.1 Appointment of Security Agent. The Fuji Bank and Trust
Company is hereby appointed by the Secured Parties as security agent hereunder,
and the Security Agent hereby agrees to act as such and to accept all revenues,
cash, payments, insurance and condemnation proceeds, other amounts, and
Permitted Investments to be delivered to or held by the Security Agent pursuant
to the terms of this Agreement. The Security Agent shall hold and safeguard the
Accounts (and the revenues, cash, payments, insurance and condemnation proceeds,
instruments, securities and other amounts on deposit therein) during the term of
this Agreement and shall treat the revenues, cash, payments, insurance and
condemnation proceeds, instruments, securities and other amounts in the Accounts
as funds, instruments and securities (i) in the case of all Accounts (other than
the Distribution Reserve Account, the Retention Account, the Project Letters of
Credit Reserve Account (except as provided in clause (ii) below), the Swap
Counterparty Account (except as provided in clause (iii) below), the SECI
Reserve Account and the SECI Debt Service Account), pledged by the Partnership
to the Agent, the Lenders, the Letter of Credit Issuer (other than in its
capacity as issuer of the Senior Debt Service Reserve "B" Letter of
Amended and Restated
Security Deposit Agreement
11
Credit) and the Swap Counterparty, as collateral securing the Obligations, in
accordance with the provisions hereof, (ii) in the case of the Project Letters
of Credit Reserve Account, pledged by the Partnership to the Letter of Credit
Issuer, as collateral securing the Obligations (other than those relating to the
Senior Debt Service Reserve Letters of Credit) owing to the Letter of Credit
Issuer, in accordance with the provisions hereof, (iii) in the case of the Swap
Counterparty Account, pledged by the Partnership to the Swap Counterparty, as
collateral securing the Obligations owing to the Swap Counterparty in accordance
with the provisions hereof, (iv) in the case of the SECI Reserve Account, the
SECI Debt Service Account, the Distribution Reserve Account (to the extent of
SECI's interest therein) and the Retention Account (to the extent of SECI's
interest therein), pledged by SECI in favor of the SECI Term Lender, as
collateral securing to the SECI Obligations, in accordance with the provisions
hereof, (v) in the case of the Distribution Reserve Account and the Retention
Account, held for the benefit of the GE Capital Limited Partner and the Other
Partners and (vi) in the case of the Tomen Distribution Account, held for the
benefit of the Tomen Limited Partners.
SECTION 2.2 Creation of Accounts. (a) The Security Agent hereby
establishes the following twenty special, segregated and irrevocable cash
collateral accounts (a) in the case of all Accounts (other than the Distribution
Reserve Account, the Retention Account, the Project Letters of Credit Reserve
Account (except as provided in clause (b) below), the Swap Counterparty Account
(except as provided in clause (c) below), the Tomen Distribution Account, the
SECI Reserve Account and the SECI Debt Service Account), in the name of the
Agent for the benefit of the Secured Parties (other than the SECI Term Lender),
(b) in the case of the Project Letters of Credit Reserve Account, in the name of
the Letter of Credit Issuer for its own benefit, (c) in the case of the Swap
Counterparty Account, in the name of the Agent for the benefit of the Swap
Counterparty, (d) in the case of the SECI Reserve Account and the SECI Debt
Service Account, in the name of the SECI Term Lender for its own benefit, (e) in
the case of the Distribution Reserve Account and the Retention Account, in the
name of the GE Capital Limited Partner for the benefit of the Partners, and (f)
in the case of the Tomen Distribution Account, in the name of the Tomen Limited
Partners for their own benefit, which shall be maintained at all times until the
termination of this Agreement:
(1) Revenue Account,
(2) Current Account,
(3) Project Expense Accrual Account,
(4) Completion Account,
(5) Major Maintenance Reserve Account,
(6) Distribution Reserve Account,
(7) Retention Account,
(8) Base Reserve Debt Account,
Amended and Restated
Security Deposit Agreement
12
(9) Base Reserve Equity Account,
(10) SECI Reserve Account,
(11) SECI Debt Service Account,
(12) Project Letters of Credit Reserve Account,
(13) Steam Reserve Account,
(14) Insurance and Condemnation Proceeds Account,
(15) Wind-up Account,
(16) Senior Debt Service Account,
(17) Senior Debt Service Coverage Account,
(18) Senior Debt Service Reserve Account,
(19) Swap Counterparty Account, and
(20) Tomen Distribution Account.
(b) The Security Agent hereby establishes the Working Capital Account
in the name of the Partnership, which shall be maintained at all times until the
termination of this Agreement.
SECTION 2.3 Security Interest. (a)(i) In order to secure the payment
and performance by the Borrowers when due of all of their Obligations, this
Agreement is intended to create, and the Partnership hereby pledges to, and
creates in favor of, the Agent for its benefit and for the benefit of the
Lenders, the Letter of Credit Issuer and the Swap Counterparty, a security
interest in and to the Accounts (other than the Distribution Reserve Account,
the Retention Account, the Project Letters of Credit Reserve Account (except as
provided below), the Swap Counterparty Account (except as provided below), the
Tomen Distribution Account, the SECI Reserve Account and the SECI Debt Service
Account). All moneys, cash equivalents, instruments, investments and securities
at any time on deposit in any of such Accounts shall constitute collateral
security for the payment and performance by the Borrowers when due of the
Obligations and shall at all times be subject to the sole dominion and control
of the Agent, acting through the Security Agent, and shall be held in the
custody of the Security Agent for the purposes of, and on the terms set forth
in, this Agreement.
(ii) In order to secure the payment and performance by the Borrowers
when due of all of their Obligations to the Letter of Credit Issuer, this
Agreement is intended to create, and the Partnership hereby pledges to, and
creates in favor of the Letter of Credit Issuer, a security interest in and to
the Project Letters of Credit Reserve Account. All moneys, cash equivalents,
instruments, investments and securities at any time on deposit in the Project
Letters of Credit Reserve Account shall constitute collateral security for the
payment and performance by the Borrowers when due of the Obligations (other than
those relating to the Senior Debt Service Reserve Letters of Credit) owing to
the Letter of Credit Issuer and shall at all times be subject to the sole
dominion and control of the Letters of Credit Issuer, acting through the
Security Agent, and shall be held in the custody of the Security Agent for the
purposes of, and on the terms set forth in, this Agreement.
Amended and Restated
Security Deposit Agreement
13
(iii) In order to secure the payment and performance by the Borrowers
when due of all of their Obligations to the Swap Counterparty, this Agreement is
intended to create, and the Partnership hereby pledges to, and creates in favor
of the Agent for the benefit of the Swap Counterparty, a security interest in
and to the Swap Counterparty Account. All moneys, cash equivalents, instruments,
investments and securities at any time on deposit in the Swap Counterparty
Account shall constitute collateral security for the payment and performance by
the Borrowers when due of the Obligations owing to the Swap Counterparty and
shall at all times be subject to the sole dominion and control of the Agent,
acting through the Security Agent, and shall be held in the custody of the
Security Agent for the purposes of, and on the terms set forth in, this
Agreement.
(iv) For the purpose of perfecting the security interest of the Agent,
the Lenders, the Letter of Credit Issuer and the Swap Counterparty in and to
such Accounts and all cash, investments and securities at any time on deposit in
such Accounts, the Security Agent shall be deemed to be the agent of the Agent,
the Lenders, the Letter of Credit Issuer and the Swap Counterparty.
(b) In order to secure the payment and performance by SECI when due of
all of the SECI Obligations, this Agreement is intended to create, and SECI
hereby pledges to, and creates in favor of the SECI Term Lender, a security
interest in and to the SECI Reserve Account, the SECI Debt Service Account, the
Distribution Reserve Account (to the extent of SECI's interest therein) and the
Retention Account (to the extent of SECI's interest therein) and all cash, cash
equivalents, instruments, investments and other securities at any time on
deposit in such Accounts. All moneys, cash equivalents, instruments, investments
and securities at any time on deposit in such Accounts shall constitute
collateral security for the payment and performance by SECI when due of the SECI
Obligations and shall at all times be subject to the sole dominion and control
of the SECI Term Lender, acting through the Security Agent, and shall be held in
the custody of the Security Agent for the purposes of, and on the terms set
forth in, this Agreement. For the purpose of perfecting the security interest of
the SECI Term Lender in and to such Accounts, the Security Agent shall be deemed
to be the agent of the SECI Term Lender.
(c) Neither the Partnership nor SECI shall have any rights or powers
with respect to any amounts in the Accounts or any part thereof except (i) as
provided in Article IV and (ii) the right to have such amounts applied in
accordance with the provisions hereof and of the other Loan Documents and, in
the case of SECI, the SECI Loan Documents.
SECTION 2.4 Location of the Accounts. The Accounts shall be maintained
by the Security Agent at its corporate trust
Amended and Restated
Security Deposit Agreement
14
office located in New York City until the Security Agent gives written notice to
the other parties to this Agreement setting forth a different location of the
Accounts; provided, however, that such location shall be in the State of New
York.
ARTICLE III
Deposits into Accounts
SECTION 3.1 Deposits on Second Capital Contribution Date. (a) On the
Second Capital Contribution Date, after making all payments required to be made
on such date pursuant to Sections 4.2 and 4.3 of the Original Security Deposit
Agreement, the Security Agent shall transfer all remaining amounts, if any, on
deposit in the accounts maintained pursuant to the Original Security Deposit
Agreement to the Revenue Account.
(b) On the Second Capital Contribution Date, the Original Agent shall
transfer to the Security Agent for deposit in the Completion Account, from the
proceeds of the Construction Loans made by the Construction Lenders on such
date, the amount referred to in clause (u) of the definition of Certified
Construction Costs in Appendix A.
SECTION 3.2 Revenues and Insurance and Condemnation Proceeds. (a)
Except as otherwise provided in Sections 3.1 and 3.3, the Partnership shall
instruct each Person from whom it receives any Revenues (other than any Person
from whom $20,000 or less is expected to be payable to the Partnership in a
calendar year, unless the aggregate amount of Revenues of all such Persons
exceeds $250,000 in a calendar year, in which case all Revenues in excess of
$250,000 in a calendar year from all such Persons shall be paid as hereinafter
provided) to pay such Revenues directly to the Security Agent for deposit in the
Revenue Account, and if the Partnership shall receive any Revenues it shall
deliver such Revenues in the exact form received (but with the Partnership's
endorsement, if necessary) to the Security Agent for deposit in the Revenue
Account not later than the third Business Day after the Partnership's receipt
thereof. The Security Agent shall have the right to receive all Revenues
directly from the Persons owing the same. All Revenues received by the Security
Agent shall be deposited in the Revenue Account.
(b) The Partnership shall deposit in the Insurance and Condemnation
Proceeds Account all payments in respect of casualty to or loss of property
received by it from any insurer pursuant to the property or casualty insurance
maintained by the Partnership and all awards and proceeds in respect of a
Taking.
SECTION 3.3 Deposits into Senior Debt Service Account; Senior Debt
Service Reserve Account; Base Reserve Debt Account. (a)(i) Any payments made by
the Swap Counterparty under the Swap
Amended and Restated
Security Deposit Agreement
15
Agreement shall be deposited upon receipt into the Senior Debt Service Account.
(ii) Any amounts drawn under the Senior Debt Service Letter of Credit,
if any, as a result of a loss of or reduction in the rating of the Senior Debt
Service Letter of Credit Issuer shall be deposited upon receipt into the Senior
Debt Service Account.
(b) Any amounts drawn under either Senior Debt Service Reserve Letter
of Credit as a result of a loss of or reduction in the rating of the Senior Debt
Service Reserve Letter of Credit Issuer shall be deposited upon receipt into the
Senior Debt Service Reserve Account.
(c) Any amounts drawn under the Base Reserve Letter of Credit for the
benefit of the GE Capital Limited Partner shall be deposited upon receipt into
the Base Reserve Equity Account.
SECTION 3.4 Additional Deposits into Completion Account. Any Special
Payments received by the Partnership pursuant to the Construction Contract shall
be deposited into the Completion Account and amounts released pursuant to
Section 10(b) of the Surety Bond Arrangements Cash Collateral Agreement.
SECTION 3.5 Information to Accompany Amounts Delivered to Security
Agent; Deposits Irrevocable. (a) All amounts delivered to the Security Agent by
the Partnership shall be accompanied by information in reasonable detail
specifying the source of the amounts and the Account or Accounts into which such
amounts are to be deposited. If the Security Agent shall be unable to determine
the source of any payments received or the Account or Accounts into which such
payments are to be deposited, the Security Agent shall hold such amounts in the
Revenue Account until identified by the Partnership.
(b) Any deposit made into any Account hereunder shall, absent manifest
error, be irrevocable and the amount of such deposit and any instrument or
security held in such Account hereunder and all interest thereon shall be held
by the Security Agent and applied solely as provided herein.
SECTION 3.6 Books of Account; Statements. (a) The Security Agent shall
maintain books of account for the Partnership, SECI, the Agent, the Letter of
Credit Issuer, the Swap Counterparty and the SECI Term Lender on a cash basis
and record therein all deposits into and transfers to and from the Accounts and
all investment transactions effected by the Security Agent pursuant to Article
V. The Security Agent shall make such books of account available during normal
business hours with reasonable advance notice for inspection and audit by the
Partnership, SECI, the Agent, the Letter of Credit Issuer, the
Amended and Restated
Security Deposit Agreement
16
Swap Counterparty or the SECI Term Lender and their respective representatives.
(b) Not later than the fifteenth Business Day of each month, the
Security Agent shall deliver to the Partnership, SECI, the Agent, the Letter of
Credit Issuer, the Swap Counterparty and the SECI Term Lender, a statement
setting forth the transactions in each Account during the preceding month and
specifying the Revenues, Special Payments, Insurance and Condemnation Proceeds
Deposits, Permitted Investments and other amounts held in each Account at the
close of business on the first Business Day of such month and the value thereof
at such time.
ARTICLE IV
Payments from Accounts
SECTION 4.1 Revenue Account--Monthly Transfers with Respect to Project
Expenses. (a) On or before the twentieth day of each month, the Partnership
shall deliver to the Security Agent a Project Certificate (with appropriate
insertions) signed by a Responsible Officer of the Managing General Partner
(with a copy to the GE Capital Limited Partner) and countersigned by a
Responsible Officer of the Agent and, until the First GE Capital Flip Date, the
GE Capital Limited Partner, requesting distributions to be made from the Revenue
Account. Each of the Agent and the GE Capital Limited Partner agrees that it
shall countersign each such certificate presented to it which is in compliance
with the Partnership Operating Budget and the Loan Documents. On the last
Business Day of each month (each such date, a "Monthly Transfer Date"), the
Security Agent shall distribute, from the cash available in the Revenue Account,
(i) (A) directly to the Operator and each Person to which an amount in excess of
$250,000 is due and payable, the amounts identified as Project Expenses (other
than the Project Expenses on account of which amounts have already been
deposited or are to be deposited contemporaneously into the Major Maintenance
Reserve Account, the Current Account or the Project Expense Accrual Account)
then due and owing in Item 1 of the Project Certificate referred to above, or
(B) to the Partnership for the benefit of the Persons entitled thereto, all
other Project Expenses (other than the Project Expenses on account of which
amounts have already been deposited or are to be deposited contemporaneously
into the Major Maintenance Reserve Account, the Current Account or the Project
Expense Accrual Account) then due and owing in Item 1 of the Project Certificate
referred to above, (ii) to the Current Account, the amounts identified as
Project Expenses expected to be due and owing prior to the next Monthly Transfer
Date in Item 2 of the Project Certificate referred to above (other than the
Project Expenses on account of which amounts have already been deposited or are
to be deposited contemporaneously into the Major Maintenance Reserve Account or
the Project Expense
Amended and Restated
Security Deposit Agreement
17
Accrual Account), (iii) to the Project Expense Accrual Account, the amount
identified as the Project Expense Accrual Account Contribution in Item 3 of the
Project Certificate referred to above, (iv) so long as (A) no prepayments of any
of the Loans are required to be made by the Partnership on such Monthly Transfer
Date or during the Quarterly Period in which such Monthly Transfer Date occurs
pursuant to Section 4.2(a) of the Loan Agreement and (B) the Partnership has
performed its obligations under Section 4.1(b) to the Working Capital Account,
an amount equal to $50,000 minus the amount then on deposit in the Working
Capital Account as specified in Item 10 of the Project Certificate, (v) until
the amount on deposit in the Major Maintenance Reserve Account is equal to or
greater than the Major Maintenance Required Balance as of such Monthly Transfer
Date, to the Major Maintenance Reserve Account, the greater of (A) the Major
Maintenance Required Contribution and (B) the amount which equals the positive
difference, if any, between the Major Maintenance Required Balance as of such
Monthly Transfer Date and the amount then on deposit in the Major Maintenance
Reserve Account, (vi) directly to the Agent, all Agency Fees then due and
payable to the Agent under the Loan Agreement which are specified in Item 9 of
the Project Certificate, (vii) directly to the Security Agent, all fees,
expenses and other costs then due and payable to the Security Agent hereunder
which are specified in Item 9 of the Project Certificate, (viii) directly to the
Swap Counterparty, all expenses and other amounts then due and payable to the
Swap Counterparty under Sections 1(d) (in respect of deduction or withholding
for taxes), 4(e) (in respect of stamp or similar taxes) and 11 (in respect of
expenses) of the Swap Agreement which are specified in Item 9 of the Project
Certificate, (ix) to the extent not included in any of the foregoing clauses (i)
through (viii), directly to the Persons specified in Item 9 of the Project
Certificate, all expenses then due and payable to such Persons under Sections
3.13 and 11.5 of the Loan Agreement.
(b) The Partnership covenants and agrees that all amounts from time to
time on deposit in the Working Capital Account shall be used by it only to pay
Project Expenses or to enable North Country to pay Project Expenses related to
the North Country Project.
(c) For purposes of this Section 4.1, cash available in the Revenue
Account shall not include any check or other instrument which may be deposited
therein until the final collection thereof.
SECTION 4.2 Revenue Account--Monthly Transfers. On each Monthly
Transfer Date, the Security Agent shall distribute, as directed by the
Partnership from the cash available in the Revenue Account (after making all
transfers required by Section 4.1), the following amounts in the following order
of priority:
Amended and Restated
Security Deposit Agreement
18
(a) first, pro rata to (i) the Senior Debt Service Account, an amount
equal to one-third of the interest and (except as provided in Section 4.2(b))
other amounts payable in respect of the Term Loans which are due and payable on
the next succeeding Installment Payment Date (together with any deficiency in
accumulation of such amount during any preceding month or months since the last
Installment Payment Date) minus one-third of the amount, if any, payable by the
Swap Counterparty to the Partnership under the Swap Agreement (unless the Swap
Counterparty is in default under the Swap Agreement) on the next succeeding
Installment Payment Date unless, with respect only to the first and second
Monthly Transfer Dates of the three month period ending on the next Installment
Payment Date, the Security Agent shall have received a notice from the Agent
stating that a Senior Debt Service Letter of Credit has been issued and
delivered to the Agent in accordance with Section 4.3(c) and specifying the
stated amount thereof, in which case the Security Agent shall distribute to the
GE Capital Limited Partner (from the amount otherwise to be deposited into the
Senior Debt Service Account pursuant to this clause (i)) an amount equal to such
stated amount (such distribution to be treated in accordance with Section 4.17
of the Amended and Restated Partnership Agreement), (ii) the Letter of Credit
Issuer, an amount equal to all Letter of Credit Fees, interest and (except as
provided in Sections 4.1(a), 4.2(b) and 4.2(c)) other amounts payable to the
Letter of Credit Issuer under the Loan Agreement and in respect of the Letters
of Credit then due and payable by the Borrowers, (iii) the Swap Counterparty
Account, an amount equal to one-third of all amounts, if any, payable by the
Partnership to the Swap Counterparty under the Swap Agreement (except as
provided in Sections 4.1(a) and 4.2(b) which are due and payable on the next
succeeding Installment Payment Date (together with any deficiency in
accumulation of such amount during any preceding month or months since the last
Installment Payment Date) and (iv) the Surety Bond Arranger, an amount equal to
the sum of (1) the excess of the Surety Bond Arranger Fee then due and payable
by the Partnership to the Surety Bond Arranger under the Loan Agreement over the
amount of such Surety Bond Arranger Fee paid from funds available under the
Surety Bond Arrangements Cash Collateral Agreement and (2) expenses, interest
and other amounts (other than principal payments in respect of the Surety Bond
Arrangements Reimbursement Obligations) then due and payable by the Partnership
to the Surety Bond Arranger under the Loan Agreement and the Surety Bond
Arrangements Cash Collateral Agreement;
Amended and Restated
Security Deposit Agreement
19
(b) second, pro rata to (i) the Senior Debt Service Account, an amount
equal to:
(x) one-third of the aggregate scheduled principal amount of the
Term Loans which is due and payable on the next succeeding Installment
Payment Date (together with any deficiency in accumulation of such
amount during any preceding month or months since the last Installment
Payment Date); less (y) any increase in the Value of the Senior Debt
Service Account which occurred during the preceding month as a result
of earnings on the amounts on deposit therein;
unless, with respect to the first and second Monthly Transfer Dates of the three
month period ending on the next Installment Payment Date, the Security Agent
shall have received a notice from the Agent stating that a Senior Debt Service
Letter of Credit has been issued and delivered to the Agent in accordance with
Section 4.3(c) and specifying the stated amount thereof, in which case the
Security Agent shall distribute to the GE Capital Limited Partner (from the
amount otherwise to be deposited in the Senior Debt Service Account pursuant to
this clause (i)) an amount equal to such stated amount (such distribution to be
treated in accordance with Section 4.17 of the Amended and Restated Partnership
Agreement), (ii) the Senior Debt Service Account, an amount equal to any
prepayments on the Term Loans which are then due and payable, (iii) the Letter
of Credit Issuer, all amounts then due and payable (including, without
limitation, any prepayments) in respect of reimbursement obligations relating to
the Project Letters of Credit, and (iv) the Swap Counterparty, all amounts then
due and payable pursuant to Section 6(e) of the Swap Agreement;
(c) third, if there shall have been a drawing on either the Senior Debt
Service Reserve "A" Letter of Credit or the Senior Debt Service Reserve "B"
Letter of Credit (other than a drawing as a result of a loss of or a reduction
in the rating of the Senior Debt Service Reserve Letter of Credit Issuer) or a
withdrawal from the Senior Debt Service Reserve Account pursuant to Section
4.9(a), (x) first, to the Senior Debt Service Reserve Letter of Credit Issuer,
an amount equal to the aggregate amount of all unreimbursed drawings under the
Senior Debt Service Reserve "A" Letter of Credit, (y) second, to the Senior Debt
Service Reserve Letter of Credit Issuer, an amount equal to the aggregate amount
of all unreimbursed drawings under the Senior Debt Service Reserve "B" Letter of
Credit and (z) third, to the Senior Debt Service Reserve Account, an amount
equal to all withdrawals therefrom pursuant to Section 4.9(a) until such
withdrawals have been replenished;
Amended and Restated
Security Deposit Agreement
20
(d) fourth, in the following order of priority, (provided that (I) the
Security Agent shall not make any payments to the Partners or any of the
payments described in clauses (v) through (x) below if (i) the certificate of
the Managing General Partner described below states that a Default or Event of
Default has occurred and is continuing or (ii) the Agent has notified the
Security Agent that a Default or Event of Default has occurred and is continuing
and (II) if (i) the certificate of Managing General Partner described below
states that a Special Event has occurred and is continuing and (ii) the Security
Agent has not received either of the notices referred to in subclauses (i) and
(ii) of clause (I) of this proviso, the Security Agent shall distribute all
amounts that would otherwise be distributable to the Partners pursuant to this
Section 4.2(d) in accordance with Section 4.16(d))(x) subject to Section 4.2(e),
directly to the Partners, Distributable Cash in the amount distributable to the
Partners pursuant to Section 4.3(a) of the Amended and Restated Partnership
Agreement, and (y) subject to Section 4.2(e), directly to the Partners,
Distributable Cash in such amounts as are distributable to the Partners pursuant
to Section 4.3(b) and/or Section 4.6(b) (in respect of Net Cash from Sales or
Refinancing) and/or Section 4.13 and/or Section 4.14 of the Amended and Restated
Partnership Agreement and, in the case of each of clauses (x) and (y) above,
accompanied by a certificate of a Responsible Officer of the Managing General
Partner (with a copy to the Agent, the SECI Term Lender and the GE Capital
Limited Partner), setting forth the amounts so distributable and the amounts, if
any, required to be deposited in the Accounts specified below and the
calculations (including, without limitation, the Debt Service Coverage Ratio,
the Ratio and the SECI Ratio) used in determining such amounts and stating
whether any Special Event, Default or Event of Default has occurred and is
continuing; provided, however, that:
(i) if a withdrawal from the Base Reserve Debt Account or a
drawing under any Base Reserve Letter of Credit shall have occurred
pursuant to Section 4.9(a), until the amount of such withdrawal has
been replenished in the Base Reserve Debt Account or the stated amount
of such Base Reserve Letter of Credit has been reinstated in an amount
equal to the amount of such drawing, the amount of Distributable Cash
to be distributed on each Distribution Date from the cash in the
Revenue Account to each Partner pursuant to Sections 4.3(a), 4.3(b),
4.13 and 4.14 of the Amended and Restated Partnership Agreement that
corresponds to 100% of such Distributable Cash distributable to each
such Partner, shall not be distributed to each such Partner on such
Distribution Date but shall instead be
Amended and Restated
Security Deposit Agreement
21
transferred to and retained in the Base Reserve Debt Account and
applied as provided in Section 4.9;
(ii) subject to the availability of Distributable Cash after
application (if any) thereof pursuant to Section 4.2(d)(i), if a
transfer of cash from the Base Reserve Debt Account to the Base Reserve
Equity Account and a withdrawal of such cash from the Base Reserve
Equity Account or a drawing under any Base Reserve Letter of Credit
shall have occurred pursuant to Section 4.9(b), until the amount of
such withdrawal has been replenished in the Base Reserve Debt Account
or the stated amount of such Base Reserve Letter of Credit has been
reinstated in an amount equal to the amount of such drawing, the amount
of Distributable Cash to be distributed on each Distribution Date from
the cash in the Revenue Account to each Partner pursuant to Sections
4.3(a), 4.3(b), 4.13 and 4.14 of the Amended and Restated Partnership
Agreement that corresponds to 100% of such Distributable Cash
distributable to each such Partner, shall not be distributed to each
such Partner on such Distribution Date but shall instead be transferred
to and retained in the Base Reserve Debt Account and applied as
provided in Section 4.9;
(iii) subject to the availability of Distributable Cash after
application (if any) thereof pursuant to Sections 4.2(d)(i) and (ii),
during the period from and including the date of occurrence of a Steam
Host Event, as certified to the Security Agent in a certificate of the
Agent, to but excluding the date of receipt by the Security Agent of
either written notice from the Agent described in Section 4.15(a), 100%
of all Distributable Cash to be distributed from the cash in the
Revenue Account to each Partner pursuant to Sections 4.3(a), 4.3(b),
4.13 and 4.14 of the Amended and Restated Partnership Agreement and
100% of all Net Cash from Sales or Refinancing to be distributed from
the cash in the Revenue Account to each Partner pursuant to Section
4.6(b) of the Amended and Restated Partnership Agreement in respect of
each Distribution Date occurring during the continuance of such Steam
Host Event shall not be distributed to such Partner on each such
Distribution Date but instead shall be transferred to and retained in
the Steam Reserve Account and applied as provided in Section 4.15;
(iv) subject to the availability of Distributable Cash after
application (if any) thereof pursuant to Sections 4.2(d)(i), (ii) and
(iii), in the event that the Debt Service Coverage Ratio for any
Measurement Period with respect to any Distribution Date on or after
December 31, 1994 shall be less than 1.20 to
Amended and Restated
Security Deposit Agreement
22
1.00, as certified to the Security Agent in a certificate of the
Agent, 100% of the Distributable Cash to be distributed from the cash
in the Revenue Account to the Partners pursuant to Sections 4.3(a),
4.3(b), 4.13 and 4.14 of the Amended and Restated Partnership Agreement
in respect of each of the three Distribution Dates immediately after
the end of such Measurement Period and 100% of the Net Cash from Sales
or Refinancing to be distributed to the Partners pursuant to Section
4.6(b) of the Amended and Restated Partnership Agreement in respect of
the period commencing with the end of such Measurement Period and
ending on the third Distribution Date occurring immediately after the
end of such Measurement Period shall not be distributed to the Partners
on each such Distribution Date but shall instead be transferred to and
retained in the Senior Debt Service Coverage Account and applied as
provided in Section 4.11(a);
(v) subject to the availability of Distributable Cash after
application (if any) thereof pursuant to Sections 4.2(d)(i), (ii),
(iii) and (iv), until the sum of (1) the amount on deposit in the Base
Reserve Debt Account or, after the Loan Agreement is no longer in
effect, the Base Reserve Equity Account and (2) the then stated amount
of the Base Reserve Letter of Credit, if any, is equal to or greater
than the Base Reserve Amount, the amount of Distributable Cash to be
distributed from the cash in the Revenue Account to the Other Partners
pursuant to Section 4.3(b) of the Amended and Restated Partnership
Agreement that corresponds to 23.7% of such Distributable Cash
distributable to each such Other Partner on each Distribution Date
shall not be distributed to each such Other Partner on such
Distribution Date but shall instead be deposited and retained in the
Base Reserve Debt Account and applied as provided in Section 4.9;
(vi) subject to the availability of Distributable Cash after
application (if any) thereof pursuant to Sections 4.2 (d)(i), (ii),
(iii), (iv) and (v), in the event that the Ratio for any Quarterly
Period ending on or after December 31, 1994 shall be less than the
respective values set forth below, as certified in a certificate of the
GE Capital Limited Partner, the amount of Distributable Cash to be
distributed from the cash in the Revenue Account to the Other Partners
pursuant to Section 4.3(b) of the Amended and Restated Partnership
Agreement in respect of each of the three Distribution Dates
immediately after the end of such Measurement Period, in each case that
corresponds to the percentage set forth opposite each such value below,
shall not be distributed to such Other Partners
Amended and Restated
Security Deposit Agreement
23
on each such Distribution Date but shall instead be transferred to
and retained in the Distribution Reserve Account and applied as
provided in Section 4.11(b):
Ratio Percentage Retained
----- -------------------
1.40 to 1.00 20%
1.30 to 1.00 25%
1.20 to 1.00 98%
(vii) subject to the availability of Distributable Cash after
application (if any) thereof pursuant to Sections 4.2(d)(i), (ii),
(iii), (iv), (v) and (vi), in the event that the Security Agent shall
have received written notice from the GE Capital Limited Partner that,
but for the provisos to any of Sections 13.1(b), (c), (d), (f) or (m),
or the lapse of either the 180 day or 30 day period referred to in
clause (ii) of Section 13.1(t), of the Amended and Restated Partnership
Agreement, a Special Event would occur and be continuing, 98% of the
amount of Distributable Cash to be distributed from the cash in the
Revenue Account to the Other Partners pursuant to Sections 4.3(b) and
4.13 of the Amended and Restated Partnership Agreement on such
Distribution Date shall not be distributed to such Other Partners on
such Distribution Date but shall instead be transferred to and retained
in the Retention Account and applied as provided in Section 4.10;
(viii) subject to the availability of Distributable Cash after
application (if any) pursuant to Sections 4.2(d)(i), (ii), (iii), (iv),
(v), (vi) and (vii), until the amount on deposit in the Project Letters
of Credit Reserve Account is equal to the Project Letters of Credit
Required Balance as of such Distribution Date, 98% of the amount of
Distributable Cash to be distributed on each Distribution Date from the
cash in the Revenue Account to each Other Partner pursuant to Section
4.3(b) of the Amended and Restated Partnership Agreement that
corresponds to each such Other Partner's allocable share of the Project
Letters of Credit Required Contribution (determined by multiplying the
Project Letters of Credit Required Contribution by the Allocation
Percentage of each Other Partner in such Distributable Cash) shall not
be distributed to each such Other Partner on such Distribution Date but
shall instead be transferred to and retained in the Project Letters of
Credit Reserve Account and applied as provided in Section 4.12;
(ix) for so long as any amounts are due and payable under the SECI
Term Loan Agreement, the amount of Distributable Cash to be distributed
from the cash
Amended and Restated
Security Deposit Agreement
24
in the Revenue Account to SECI pursuant to Sections 4.3 and 4.13
of the Amended and Restated Partnership Agreement on each Distribution
Date and Net Cash from Sales or Refinancing to be distributed to SECI
pursuant to Section 4.6(b) of the Amended and Restated Partnership
Agreement, as certified in a certificate of a Responsible Officer of
the SECI Term Lender, shall be reduced by the amounts specified in
clauses (A) and (B) below and such amounts specified in such clauses
shall be transferred to and retained in the SECI Debt Service Account
and applied as provided in Section 4.13:
(A) first, an amount equal to one-third of the interest
and fees and other amounts payable in respect of the SECI Term
Loan which are due and payable on the next succeeding SECI
Interest Payment Date (together with any deficiency in
accumulation of such amount during any month or months since the
last SECI Interest Payment Date); and
(B) second, an amount equal to one-third of the principal
amount of the SECI Term Loans which is due and payable on the
next succeeding SECI Installment Payment Date (together with any
deficiency in accumulation of such amount during any preceding
month or months since the last SECI Installment Payment Date);
and
(x) subject to the availability of Distributable Cash after
application pursuant to Section 4.2(d)(ix), (A) for so long as any
amounts are due and payable under the SECI Term Loan Agreement, in the
event that the SECI Ratio for any Measurement Period occurring prior to
the First Tomen Flip Date shall be less than the respective values set
forth below, as certified in a certificate of a Responsible Officer of
the SECI Term Lender or a certificate of a Responsible Officer of SECI,
the amount of Distributable Cash to be distributed from the cash in the
Revenue Account to SECI pursuant to Sections 4.3 and 4.13 of the
Amended and Restated Partnership Agreement on each of the three
Distribution Dates immediately after the end of such Measurement Period
and Net Cash from Sales or Refinancing to be distributed to SECI
pursuant to Section 4.6(b) of the Amended and Restated Partnership
Agreement for the period commencing with the end of such Measurement
Period and ending with the third Distribution Date occurring
immediately after the end of such Measurement Period, in each case that
corresponds to the percentage set forth opposite each
Amended and Restated
Security Deposit Agreement
25
such value below shall not be distributed to SECI but shall
instead be transferred to and retained in the SECI Reserve Account and
applied as provided in Section 4.14:
SECI Ratio Percentage Retained
---------- -------------------
1.80 to 1.00 30%
1.60 to 1.00 100%; and
(B) for so long as any amounts are due and payable under
the SECI Term Loan Agreement, in the event that the SECI Ratio
for any Measurement Period occurring from and after the First
Tomen Flip Date shall be less than the respective values set
forth below, as certified in a certificate of the SECI Term
Lender or a certificate of a Responsible Officer of SECI, the
amount of Distributable Cash to be distributed from the cash in
the Revenue Account to SECI pursuant to Sections 4.3 and 4.13 of
the Amended and Restated Partnership Agreement on each of the
three Distribution Dates immediately after the end of such
Measurement Period and Net Cash from Sales or Refinancing to be
distributed to SECI pursuant to Section 4.6(b) of the Amended and
Restated Partnership Agreement for the period commencing with the
end of such Measurement Period and ending with the third
Distribution Date occurring immediately after the end of such
Measurement Period, in each case that corresponds to the
percentage set forth opposite each such value (as such values may
be adjusted in connection with an adjustment to the Capped Term
Allocation Percentage pursuant to Section 3.4 of the Amended and
Restated Partnership Agreement) below shall not be distributed to
SECI but shall instead be transferred to and retained in the SECI
Reserve Account and applied as provided in Section 4.14:
SECI Ratio Percentage Retained
---------- -------------------
1.70 to 1.00 30%
1.55 to 1.00 100%;
provided, that, if the SECI Term Lender shall have notified the
Security Agent that a SECI Default or SECI Event of Default has
occurred and is continuing, notwithstanding the provisions of
clause (ix) above and the foregoing provisions of this clause
(x), all amounts otherwise required to be distributed to SECI
pursuant to this Section 4.2(d) shall be transferred instead to
the SECI Term Lender.
Amended and Restated
Security Deposit Agreement
26
(e) The amount of Distributable Cash to be distributed from the cash in
the Revenue Account to the Tomen Limited Partners pursuant to Sections 4.3,
4.4 and 4.5 of the Amended and Restated Partnership Agreement on each
Distribution Date which does not occur on the last Business Day in a
Quarterly Period shall be transferred to and retained in the Tomen
Distribution Account and applied as provided in Section 4.21.
SECTION 4.3 Senior Debt Service Account; Swap Counterparty Account. (a)
On each Installment Payment Date or any other date on which any interest on or
principal of the outstanding Term Loans becomes due and payable pursuant to the
Loan Agreement or the Notes, first, the Security Agent shall distribute to the
Agent for payment of such principal or interest, from the cash available in the
Senior Debt Service Account, an amount equal to (i) the amount of such interest
and principal then due and payable minus (ii) the aggregate stated amount of all
Senior Debt Service Letters of Credit for which the Security Agent has received
notice from the Agent pursuant to Section 4.3(c) since the date of the next
preceding Installment Payment Date, and second, the Agent shall make a drawing
under the Senior Debt Service Letters of Credit in the aggregate amount
available to be drawn thereunder. Any amounts drawn under the Senior Debt
Service Letters of Credit shall be applied by the Agent to the payment of
principal and interest on the Loans due and payable on such Installment Payment
Date.
(b) On each Installment Payment Date or any other date on which any
interest or other amounts become due and payable to the Swap Counterparty
pursuant to the Swap Agreement, the Security Agent shall distribute to the Swap
Counterparty for payment of such interest or other amounts, from the cash
available in the Swap Counterparty Account, an amount equal to the aggregate
amount of such interest and other amounts then due and payable, as set forth in
a certificate of the Swap Counterparty delivered to the Security Agent (with a
copy to the Agent).
(c)(i) On any Monthly Transfer Date that is not an Installment Payment
Date, provided that on such date no Event of Default has occurred and is
continuing, the GE Capital Limited Partner may cause the Senior Debt Service
Letter of Credit Issuer to issue a Senior Debt Service Letter of Credit in favor
of the Agent in a stated amount equal to all or a portion of the amount that,
pursuant to the provisions of Sections 4.2(a) and (b), is required to be
transferred to the Senior Debt Service Account on such Monthly Transfer Date,
and expiring not earlier than the tenth Business Day following the next
Installment Payment Date. Any reimbursement obligations of the account party in
respect of a Senior Debt Service Letter of Credit shall not be secured by the
assets of any of the Partnership, SECI, North Country, SECI
Amended and Restated
Security Deposit Agreement
27
Holdings, FSPC or the Operator or the interest of any other person in such
person.
(ii) Upon receipt of a Senior Debt Service Letter of Credit meeting the
requirements of paragraph (i) above, the Agent shall notify the Security Agent
of the issuance thereof and the stated amount thereof.
SECTION 4.4 Completion Account. The Security Agent shall pay Certified
Construction Costs described in the Completion Budget on account of which
amounts have been deposited in the Completion Account out of cash available in
the Completion Account as such Certified Construction Costs become due and
payable in the amounts and as set forth in Item 8 of the Project Certificate.
Upon receipt of a certificate from the Independent Engineer, countersigned by a
Responsible Officer of the Agent and the GE Capital Limited Partner, stating
that the Project is complete and all items described in the Completion Budget
have been completed in accordance with the Construction Contract, the Security
Agent shall distribute all remaining amounts in the Completion Account directly
to SECI in partial payment of the Success Fee.
SECTION 4.5 Intentionally Omitted.
SECTION 4.6 Insurance and Condemnation Proceeds Account. (a) The
Insurance and Condemnation Proceeds Deposits shall be accumulated in the
Insurance and Condemnation Proceeds Account and held therein until paid to or
upon the order of the Partnership as provided in paragraph (b) of this Section
4.6, or returned to the Partnership as provided in Section 9.2.
(b)(i) If the amount of Insurance and Condemnation Proceeds Deposits of
the Partnership is less than $250,000, such amount shall be paid over to or upon
the order of the Partnership, as the case may be, to reimburse it for, or to
pay, the cost of repairing, rebuilding or otherwise replacing the damaged or
destroyed or lost or condemned property in respect of which such moneys were
received, upon the receipt by the Security Agent of: a certificate of a
Responsible Officer of the Managing General Partner, countersigned by the Agent,
(A) containing the plans and specifications setting forth in reasonable detail
the work done or proposed to be done and materials purchased or to be purchased
by way of the renewal, repair, rebuilding or other replacement of the damaged or
destroyed or lost or condemned property and (B) stating the specific amount
requested to be paid over to or upon the order of the Partnership, as the case
may be, or that such amount is requested to reimburse the Partnership for, or to
pay, costs actually incurred to repair, rebuild or replace property and that
such amount, together with amounts remaining in the Insurance and Condemnation
Proceeds Account for such purpose and other funds of the Partnership available
for such purpose, are sufficient to pay in full the costs of such
Amended and Restated
Security Deposit Agreement
28
renewal, repair, rebuilding or other replacement. The Agent shall countersign
such certificate if (w) no Default or Event of Default has occurred and is
continuing, (x) the Agent shall have received an opinion of counsel,
satisfactory in every regard to the Agent, stating that all Governmental
Approvals required in connection with the work done or proposed to be done have
been obtained and (y) the Agent shall have received (I) evidence of any lien
waivers requested to be obtained by the Agent, and (II) evidence, satisfactory
to the Agent, that the Lien of the Collateral Security Documents is in full
force and effect; or
(ii) if the amount of Insurance and Condemnation Proceeds Deposits is
more than $250,000, such amount shall be paid over to the Persons entitled
thereto from time to time (as set forth in the certificate referred to below) to
pay the cost of repairing, rebuilding or otherwise replacing the damaged or
destroyed or lost or condemned property in respect of which such moneys were
received, upon the receipt by the Security Agent of a certificate of a
Responsible Officer of the Managing General Partner countersigned by the Agent,
(A) containing the plans and specifications setting forth in reasonable detail
the work done or proposed to be done and the materials purchased or to be
purchased by way of the renewal, repair, rebuilding or other replacement of the
damaged or destroyed or lost or condemned property and (B) stating the specific
amounts requested to be paid, the Persons to whom and the dates on which such
amounts are to be paid, that such amounts will be used to pay costs actually
incurred to repair, rebuild or replace property and that such amounts, together
with amounts remaining in the Insurance and Condemnation Proceeds Account for
such purpose and other funds of the Partnership available for such purpose, are
sufficient to pay in full the costs of such renewal, repair, rebuilding or other
replacement. The Agent shall countersign such certificate if (w) no Default or
Event of Default has occurred and is continuing, (x) the Agent shall have
received an opinion of counsel, satisfactory in every regard to the Agent,
stating that all Governmental Approvals required in connection with the work
done or proposed to be done have been obtained, (y) in the reasonable opinion of
the Agent, the matters referred to in such certificate can be accomplished in
the manner provided for in such certificate and (z) the Agent shall have
received (I) evidence of any lien waivers requested to be obtained by the Agent,
and (II) evidence, satisfactory to the Agent, that the Lien of the Collateral
Security Documents is in full force and effect; or
(iii) if the Agent has determined that the conditions described in
clauses (i) or (ii), as applicable, of this Section 4.6(b) have not been
satisfied, such proceeds shall be applied by the Security Agent upon the written
direction of the Agent to the payment of Obligations or to the Partnership to
reimburse it for, or to pay, the cost of repairing, rebuilding or otherwise
replacing the damaged or destroyed or lost or condemned
Amended and Restated
Security Deposit Agreement
29
property in respect of which such moneys were received as the Agent shall elect;
and
(iv) in the event that any amounts remain in the Insurance and
Condemnation Proceeds Account after application thereof in accordance with this
Section 4.6(b), the Security Agent shall pay such amounts to the Agent for
application in accordance with the other Loan Documents.
(c) If the Agent shall at any time notify the Security Agent that an
Event of Loss has occurred, the Security Agent shall withdraw the Insurance and
Condemnation Proceeds Deposits from the Insurance and Condemnation Proceeds
Account and deliver the same to the Agent to be applied to the payment of the
obligations of the Borrowers under the Loan Agreement in accordance with the
provisions of the Loan Agreement and the Collateral Security Documents.
SECTION 4.7 Major Maintenance Reserve Account; Project Expense Accrual
Account; Current Account. (a) The Security Agent shall, from and to the extent
of the cash available in the Major Maintenance Reserve Account, pay the Major
Maintenance costs identified in Item 6 of the Project Certificate delivered to
the Security Agent pursuant to Section 4.1, directly to the Persons designated
in such certificate.
(b) The Security Agent shall, from and to the extent of cash available
in the Project Expense Accrual Account, pay Project Expenses identified in Item
7 of the Project Certificate delivered to the Security Agent pursuant to Section
4.1 and for which the Partnership has previously deposited reserves in the
Project Expense Accrual Account, directly to the Persons designated in such
certificate.
(c) The Security Agent shall, from and to the extent of cash available
in the Current Account, pay Project Expenses identified in Item 2 of the Project
Certificate delivered in connection with the making of the deposit in the
Current Account on the most recent Monthly Transfer Date, directly to the
Persons designated in such certificate.
SECTION 4.8 Release of Excess Amounts in Major Maintenance Reserve
Account. If on a Monthly Transfer Date the amount on deposit in the Major
Maintenance Reserve Account is in excess of the Major Maintenance Required
Balance, the Security Agent shall transfer such excess to the Revenue Account.
SECTION 4.9 Base Reserve Debt Account; Base Reserve Equity Account. (a)
To the extent that the cash available in the Revenue Account, the Senior Debt
Service Account and the Swap Counterparty Account, and under the Senior Debt
Service Letters of Credit, is insufficient to make any payments described in
Section 4.1(a)(vi), (vii), (viii) or (ix) or Section 4.2(a) or
Amended and Restated
Security Deposit Agreement
30
4.2(b) (the amount of any such shortfall being herein called the "Senior Debt
Service Deficiency Amount"), first, upon written direction from the Agent, the
Security Agent shall distribute to the Agent, from the cash available in the
Base Reserve Debt Account, an amount equal to the Senior Debt Service Deficiency
Amount, as set forth in a certificate of the Agent delivered to the Security
Agent, second, the Agent shall make a drawing under the Base Reserve Letter of
Credit in an amount equal to the lesser of (x) the amount available to be drawn
thereunder and (y) the excess of the Senior Debt Service Deficiency Amount over
the aggregate amount set forth in clause first of this paragraph, third, the
Agent shall make a drawing under the Senior Debt Service Reserve "B" Letter of
Credit (or, if necessary, upon written direction from the Agent, the Security
Agent shall make a distribution to the Agent from the Senior Debt Service
Reserve Account) in an amount equal to the lesser of (x) the amount available to
be drawn thereunder (or the cash available in the Senior Debt Service Reserve
Account, as the case may be) and (y) the excess of the Senior Debt Service
Deficiency Amount over the sum of the amounts set forth in clauses first and
second of this paragraph, and fourth, the Agent shall make a drawing under the
Senior Debt Service Reserve "A" Letter of Credit (or, if necessary, upon written
direction from the Agent, the Security Agent shall make a distribution to the
Agent from the Senior Debt Service Reserve Account) in an amount equal to the
lesser of (x) the amount available to be drawn thereunder (or the cash available
in the Senior Debt Service Reserve Account, as the case may be) and (y) the
excess of the Senior Debt Service Deficiency Amount over the sum of the amounts
set forth in clauses first, second and third of this paragraph. Any of the
foregoing amounts withdrawn from the Base Reserve Debt Account or the Senior
Debt Service Reserve Account, or drawn under the Base Reserve Letter of Credit
or the Senior Debt Service Reserve Letters of Credit, shall be applied by the
Agent to the payment of the Senior Debt Service Deficiency Amount in the order
of priority set forth in Sections 4.1(a)(vi), (vii), (viii) and (ix), 4.2(a) and
4.2(b).
(b) Subject to Section 4.9(a), if after giving effect to all transfers
required to be made pursuant to Sections 4.1(a) and 4.2(a), (b), (c) and (d)(i),
(ii), (iii) and (iv), (i) on the last Distribution Date of any Quarterly Period
the amount of Distributable Cash on such Distribution Date is insufficient to
make the scheduled Level 1 Distribution distributable to the Partners on such
Distribution Date and any shortfall in the Level 1 Distribution distributable to
the Partners on any prior Distribution Date (the aggregate amount of any such
shortfall being herein called the "Level 1 Deficiency Amount") and (ii) no
Default or Event of Default shall have occurred and be continuing, all as
certified in writing to the Security Agent and the Agent by the Managing General
Partner, first, the Security Agent shall promptly transfer from the Base Reserve
Debt Account to the Base Reserve Equity Account, from the cash available in such
Account, an amount equal to the Level 1 Deficiency Amount,
Amended and Restated
Security Deposit Agreement
31
as notified to the Security Agent and the Agent by the GE Capital Limited
Partner, and second, the Agent shall make a drawing under the Base Reserve
Letter of Credit in an amount equal to the lesser of (x) the amount available to
be drawn thereunder and (y) the excess of the Level 1 Deficiency Amount over the
amount transferred to the Base Reserve Equity Account pursuant to clause first
above. Any such amount drawn under the Base Reserve Letter of Credit shall be
deposited in the Base Reserve Equity Account. Upon receipt by the Security Agent
of a notice from the Agent stating that a Senior Debt Service Reserve "B" Letter
of Credit has been issued and delivered to the Agent in a stated amount equal to
at least the sum of the amount transferred to the Base Reserve Equity Account
pursuant to clause first above and the amount drawn under the Base Reserve
Letter of Credit pursuant to clause second above, the Security Agent shall
promptly withdraw from the Base Reserve Equity Account an amount equal to such
stated amount and distribute such amount to the Partners for payment of the
amounts described in this paragraph. The Agent agrees to provide the foregoing
notice to the Security Agent promptly after receipt by the Agent of a Senior
Debt Service Reserve "B" Letter of Credit in the stated amount specified above.
(c) If on any Distribution Date, (i) the sum of (x) the amounts on
deposit in the Base Reserve Debt Account (so long as the Loan Agreement is in
effect) and the Base Reserve Equity Account plus (y) the aggregate undrawn
amount of the Base Reserve Letters of Credit, if any, exceed the Base Reserve
Amount following any application thereof pursuant to Sections 4.9(a) and (b),
and (ii) no Default or Event of Default or Special Event shall have occurred and
be continuing, all as certified in writing by the Managing General Partner and
confirmed in writing by the Agent and the GE Capital Limited Partner, the
Security Agent shall promptly withdraw the amount of such excess of the Base
Reserve Amount and transfer such amount to the Partners entitled thereto.
(d) So long as no Event of Default or Special Event shall have occurred
and be continuing, the Partnership or the Managing General Partner shall have
the option, at any time, to cause a Base Reserve Letter of Credit to be issued
by the Base Reserve Letter of Credit Issuer in a stated amount equal to the cash
otherwise required to be deposited in the Base Reserve Debt Account pursuant to
Section 4.2(d)(v), or equal to the amount then on deposit in the Base Reserve
Debt Account. Upon notice from the Agent and the GE Capital Limited Partner to
the Security Agent stating that a Base Reserve Letter of Credit has been issued
and delivered to the Agent, for the benefit of the Secured Parties and the GE
Capital Limited Partner, in a stated amount not less than the amount referred to
above in this Section 4.9(d) and expiring not earlier than one year after the
issuance thereof, and setting forth the application (in accordance with Section
4.2) of the amounts then required to be deposited, or
Amended and Restated
Security Deposit Agreement
32
amounts then on deposit, in the Base Reserve Debt Account, the Security Agent
shall withdraw from the Base Reserve Debt Account an amount equal to the stated
amount of such Base Reserve Letter of Credit and distribute such amount to the
Other Partners entitled thereto in accordance with such notice. Such letter of
credit shall provide that the Agent may make a drawing thereunder upon the
occurrence and during the continuance of an Event of Default, whereupon the
proceeds of such drawing shall be applied by the Agent to the payment of the
obligations of the Borrowers under the Loan Agreement and the other Loan
Documents (other than the Partnership Agreement and the Capital Contribution
Agreement) in accordance with the provisions of the Loan Agreement and the other
Loan Documents.
(e) At any time after a drawing has been made under a Senior Debt
Service Letter of Credit, the GE Capital Limited Partner may notify the Agent
and the Senior Debt Service Letter of Credit Issuer in writing that it would
like to arrange for the cancellation of such Senior Debt Service Letter of
Credit. Upon receipt of such request, the Agent agrees to deliver a Cancellation
Certificate in the form of Annex C to such Senior Debt Service Letter of Credit
to the Senior Debt Service Letter of Credit Issuer and to notify the Security
Agent of such cancellation.
SECTION 4.10 Retention Account. (a) If (i) amounts shall be on deposit
in the Retention Account and (ii) the event or events specified in any of
Sections 13.1(b), (c), (d), (f), (m) or (t) of the Amended and Restated
Partnership Agreement that, but for the provisos to any of such Sections (or in
the case of Section 13.1(t), but for the lapse of the 30 or 180 day periods
referred to in clause (ii) of such Section), would cause a Special Event to
occur and be continuing, shall be cured, as certified in writing by the Managing
General Partner and confirmed in writing by the GE Capital Limited Partner, the
Security Agent shall promptly withdraw the amounts on deposit in the Retention
Account and distribute such amounts directly to the Other Partners entitled
thereto as if the deposits into the Retention Account had not occurred.
(b) If the Security Agent shall have received written notice from the
GE Capital Limited Partner that a Special Event has occurred and is continuing,
the Security Agent shall promptly withdraw the amounts on deposit in the
Retention Account and distribute such amounts to the GE Capital Limited Partner
as provided in Section 13.2(c) of the Amended and Restated Partnership
Agreement.
SECTION 4.11 Senior Debt Service Coverage Account; Distribution Reserve
Account. (a)(i) If the Security Agent shall have received written notice from
the Agent that, as of the end of any six consecutive Measurement Periods, the
Debt Service Coverage Ratio is less than the value specified in Section
Amended and Restated
Security Deposit Agreement
33
4.2(d)(iv) for each of such six consecutive Measurement Periods, the Security
Agent shall promptly withdraw amounts on deposit in the Senior Debt Service
Coverage Account and deliver the same to the Agent to be applied by the Agent to
the payment of the obligations of the Partnership under, and in accordance with,
Section 4.2(a)(ii) of the Loan Agreement.
(ii) If, as of the end of any six consecutive Measurement Periods, (x)
the Debt Service Coverage Ratio shall be equal to or greater than the value
specified in Section 4.2(d)(iv) for each of such six consecutive Measurement
Periods, as certified in writing by the Managing General Partner and confirmed
in writing by the Agent, but (y) the Ratio for any Quarterly Period during which
Distributable Cash was required to be deposited or maintained in the Senior Debt
Service Coverage Account shall not be equal to or greater than the value
specified in Section 4.2(d)(vi), as certified in writing by the Managing General
Partner and confirmed in writing by the GE Capital Limited Partner, the Security
Agent shall promptly withdraw amounts on deposit in the Senior Debt Service
Coverage Account, including without limitation all interest and other income
from the funds on deposit therein, and (1) (I) distribute directly to the GE
Capital Limited Partner such amounts as the GE Capital Limited Partner would
have been entitled to had the deposits into the Senior Debt Service Coverage
Account not occurred, as certified in writing by the Managing General Partner
and confirmed in writing by the GE Capital Limited Partner and (II) distribute
directly to the Other Partners such amounts as the Other Partners would have
been entitled to pursuant to Section 4.3(a) of the Amended and Restated
Partnership Agreement had the deposits into the Senior Debt Service Coverage
Account not occurred and (2) transfer the remaining balance in the Senior Debt
Service Coverage Account directly to the Distribution Reserve Account.
(iii) If, as of the end of any six consecutive Measurement Periods, the
Debt Service Coverage Ratio shall be equal to or greater than the value
specified in Section 4.2(d)(iv) for each of such six consecutive Measurement
Periods and the Ratio for each Quarterly Period occurring during such three
consecutive Measurement Periods shall be equal to or greater than the value
specified in Section 4.2(d)(vi), all as certified in writing by the Managing
General Partner and confirmed in writing by the Agent and the GE Capital Limited
Partner, the Security Agent shall promptly withdraw amounts on deposit in the
Senior Debt Service Coverage Account, including without limitation all interest
and other income from the funds on deposit therein, and distribute such amounts
directly to the Partners entitled thereto, as certified in writing by the
Managing General Partner and confirmed in writing by the GE Capital Limited
Partner, as if the deposits into the Senior Debt Service Coverage Account had
not occurred.
Amended and Restated
Security Deposit Agreement
34
(b) (i) If the Security Agent shall have received written notice from
the GE Capital Limited Partner that as of the end of any three consecutive
Quarterly Periods, the Ratio is less than the value specified in Section
4.2(d)(vi) for each of such Quarterly Periods, the Security Agent shall promptly
withdraw amounts on deposit in the Distribution Reserve Account and deliver the
same to the GE Capital Limited Partner which, in the case of such amounts as
would have otherwise been distributed to the Other Partners, will be treated as
an early distribution of the Level 1 Distributions to the extent required for
the GE Capital Limited Partner to achieve the Base Term Return.
(ii) If, as of the end of any three consecutive Quarterly Periods, the
Ratio shall be equal to or greater than the value specified in Section
4.2(d)(vi) for each of such three consecutive Quarterly Periods, all as
certified in writing by the Managing General Partner and confirmed in writing by
the GE Capital Limited Partner, the Security Agent shall promptly withdraw
amounts on deposit in the Distribution Reserve Account, including without
limitation all interest and other income from the funds on deposit therein, and
distribute such amounts directly to the Other Partners entitled thereto, as
certified in writing by the Managing General Partner and confirmed in writing by
the GE Capital Limited Partner, as if the deposits into the Distribution Reserve
Account had not occurred.
SECTION 4.12 Project Letters of Credit Reserve Account. (a) Upon
receipt of a certificate signed by the Letter of Credit Issuer, and
countersigned by a Responsible Officer of the Agent, stating that a draw has
been made under a Project Letter of Credit and that the amount of such drawing
has not been paid to the Agent or the Letter of Credit Issuer and specifying the
amount which has not been so reimbursed, the Security Agent shall pay to the
Letter of Credit Issuer, from the amounts on deposit in the Project Letters of
Credit Reserve Account, an amount equal to the amount specified in such
certificate.
(b) All amounts remaining in the Project Letters of Credit Reserve
Account after the payment of items contemplated in Section 4.12(a) and the
cancellation of the Project Letters of Credit shall be distributed to the Other
Partners entitled thereto, as certified in writing by the Managing General
Partner and confirmed in writing by the Agent and the Letter of Credit Issuer,
as if deposits into the Project Letters of Credit Reserve Account had not
occurred.
SECTION 4.13 SECI Debt Service Account. (a) On each SECI Interest
Payment Date and SECI Installment Payment Date or any other date on which any
interest on or principal of the outstanding SECI Term Loans becomes due and
payable pursuant to the SECI Term Loan Agreement or the SECI Term Note, the
Security Agent shall distribute to the SECI Term Lender for payment of such
principal or interest, from the cash available in the SECI
Amended and Restated
Security Deposit Agreement
35
Debt Service Account, an amount equal to the amount of such interest and
principal then due and payable, as set forth in a certificate of the SECI Term
Lender delivered to the Security Agent.
(b) On each date on which any prepayment of the outstanding SECI Term
Loans becomes due and payable pursuant to the SECI Term Loan Agreement or the
SECI Term Note, the Security Agent shall distribute to the SECI Term Lender,
from the cash available in the SECI Debt Service Account, after payments
pursuant to (a) above, an amount equal to such prepayment then due and payable,
as set forth in a certificate of the SECI Term Lender delivered to the Security
Agent.
SECTION 4.14 SECI Reserve Account. (a) If the Security Agent shall
receive written notice from the SECI Term Lender that, as of the end of any
three consecutive Measurement Periods, the SECI Ratio is less than the value
specified in Section 4.2(d) (x) for each of such Measurement Periods, the
Security Agent shall promptly withdraw amounts on deposit in the SECI Reserve
Account and deliver the same to the SECI Term Lender to be applied by the SECI
Term Lender to the payment of the obligations of SECI under, and in accordance
with, the provisions of the SECI Term Loan Agreement.
(b) Upon request of SECI, (i) if, as of the end of any three
consecutive Measurement Periods, the SECI Ratio shall be equal to or greater
than the value specified in Section 4.2(d) (x) for each of such Measurement
Periods, and (ii) no SECI Default or SECI Event of Default shall have occurred
and be continuing, all as certified in writing by SECI and confirmed in writing
by the SECI Term Lender, the Security Agent shall promptly withdraw amounts on
deposit in the SECI Reserve Account, including without limitation all interest
and other income from the funds on deposit therein, and deliver the same to
SECI.
SECTION 4.15 Steam Reserve Account. (a) (i) If the Security Agent shall
have received written notice from the Agent that a Steam Host Event has ceased
to exist either as a result of (x) the substitute facility described in the
Alternative Steam Plan commencing commercial operation or (y) the Required
Lenders and the GE Capital Limited Partner determining, in their reasonable
judgment, that the Alternative Steam Plan can be implemented substantially on
the terms and the timetable described therein, the Security Agent, subject to
the provisions of Sections 4.15(b) and 4.15(a) (ii), shall promptly withdraw
amounts on deposit in the Steam Reserve Account, including without limitation
all interest and other income from the funds on deposit therein, and transfer
such amounts to the Revenue Account.
(ii) If the Security Agent shall have received written notice from the
Agent that the amount on deposit in the Steam
Amended and Restated
Security Deposit Agreement
36
Reserve Account is equal to or greater than the amount then required to complete
the Alternative Steam Plan and required to be funded from amounts on deposit in
the Steam Reserve Account as set forth in clause (vii) of the definition of
Alternative Steam Plan in Appendix A (such required amount, the "Required
Alternative Steam Plan Amount"), the Security Agent, subject to the provisions
of Section 4.15(b), shall promptly withdraw all amounts on deposit in the Steam
Reserve Account in excess of the Required Alternative Steam Plan Amount and
transfer such excess amounts to the Revenue Account.
(iii) The Security Agent may rely on a certificate of the Managing
General Partner, confirmed in writing by the GE Capital Limited Partner, as to
the amounts to be transferred to the Revenue Account from the Steam Reserve
Account pursuant to paragraphs (i) and (ii) of this Section 4.15(a). The Agent
shall give any notice specified in paragraph (i) or (ii) of this Section 4.15(a)
promptly after receiving evidence satisfactory to the Agent that the conditions
specified in clause (x) or (y) of paragraph (i) of this Section 4.15(a) or the
conditions specified in paragraph (ii) of this Section 4.15(a), as the case may
be, have been satisfied.
(b) If the Security Agent shall have received written notice from the
Managing General Partner, confirmed in writing by the Agent and the GE Capital
Limited Partner, that all or a portion of the cash available in the Steam
Reserve Account is to be applied towards the development, construction and
completion of a substitute facility in compliance with the Alternative Steam
Plan, first, the Security Agent shall promptly withdraw, from the cash available
in the Steam Reserve Account, such amounts as shall be specified in such written
notice and second, the Agent shall make a drawing on the Letter of Credit
described in paragraph (c) below in an amount equal to the excess of the amount
to be so applied over the amount set forth in clause first above, and, in each
case, distribute such amount to the Persons specified in such written notice.
(c) The GE Capital Limited Partner, with the consent of the General
Partner, shall have the option, at any time, to request GE Capital to issue a
letter of credit for the benefit of the Agent, for the account of a Person other
than the Partnership and the reimbursement obligations in respect of which are
not secured by the assets of any of the Partnership, SECI, North Country, SECI
Holdings, FSPC or the Operator or the interest if any other person in such
person, in form and substance reasonably satisfactory to the Required Lenders,
in a stated amount equal to all or a portion of the cash then available in the
Steam Reserve Account and, upon issuance of such letter of credit, as certified
by the Agent to the Security Agent, the Security Agent shall distribute to the
GE Capital Limited Partner, from the cash available in the Steam Reserve
Account, an amount equal to the stated amount of such letter of credit. Such
letter of credit
Amended and Restated
Security Deposit Agreement
37
shall expire no earlier than the date on which the Agent delivers the notice
specified in Section 4.15(a), and shall provide that the Agent may make a
drawing thereunder (i) if the notice specified in Section 4.15(a) is delivered
by the Agent, whereupon the proceeds of such drawing shall be distributed to the
Partners entitled thereto or (ii) if the development, construction and
completion of the substitute facility described in the Alternative Steam Plan
are to be financed in compliance with the Alternative Steam Plan with the
amounts which were otherwise required to be deposited in the Steam Reserve
Account, upon receipt by the Agent of the written notice of the Managing General
Partner (confirmed in writing by the Agent and the GE Capital Limited Partner)
specified in Section 4.15(b), whereupon the proceeds of such drawing shall be
distributed to the Persons specified in such written notice or (iii) upon the
occurrence and during the continuance of an Event of Default, whereupon the
proceeds of such drawing shall be applied by the Agent to the payment of the
obligations of the Borrowers under the Loan Agreement and the other Loan
Documents (other than the Partnership Agreement and the Capital Contribution
Agreement) in accordance with the provisions of the Loan Agreement and the other
Loan Documents.
SECTION 4.16 Events of Default, Tax Indemnity Events; SECI Events of
Default and Special Events. (a) Upon notice to the Security Agent from the Agent
that an Event of Default shall have occurred and be continuing, the Security
Agent shall, at the written direction of the Agent, promptly withdraw amounts on
deposit in the Accounts specified in such written direction (other than the
Project Letters of Credit Reserve Account, the Distribution Reserve Account, the
Retention Account, the Tomen Distribution Account, the SECI Reserve Account and
the SECI Debt Service Account) and deliver the same to the Agent to be applied
by the Agent to the payment of the obligations of the Borrowers under the Loan
Agreement and the other Loan Documents (other than the Partnership Agreement and
the Capital Contribution Agreement) in accordance with the provisions of the
Loan Agreement and the other Loan Documents.
(b) Subject to Section 4.16(a), and provided that the Agent shall not
have notified the Security Agent in writing that a Default shall have occurred
and be continuing, upon notice to the Security Agent from the GE Capital Limited
Partner that a Tax Indemnity Event shall have occurred, the Security Agent
shall, at the written direction of the GE Capital Limited Partner, pay over to
the GE Capital Limited Partner all amounts otherwise distributable to SECI under
Section 4.2(d) (but subject to the provisions of Sections 4.2(d) (i) through
(ix)) until the GE Capital Limited Partner shall notify the Security Agent that
the Tax Indemnity Amount equals zero. When the Tax Indemnity Amount equals zero,
the GE Capital Limited Partner agrees promptly to give notice to such effect to
the Security Agent.
Amended and Restated
Security Deposit Agreement
38
(c) Upon notice to the Security Agent from the SECI Term Lender that a
SECI Event of Default shall have occurred and be continuing, the Security Agent
shall, at the written direction of the SECI Term Lender, promptly withdraw
amounts on deposit in the SECI Reserve Account and the SECI Debt Service Account
and deliver the same to the SECI Term Lender to be applied by the SECI Term
Lender to the payment of the obligations of SECI under the SECI Term Loan
Agreement and the other SECI Loan Documents in accordance with the provisions of
the SECI Term Loan Agreement and the other SECI Loan Documents.
(d) Subject to Section 4.16(a), and provided that the Agent shall not
have notified the Security Agent in writing that a Default shall have occurred
and be continuing, upon notice to the Security Agent from the GE Capital Limited
Partner that a Special Event has occurred and is continuing, the Security Agent
shall, at the written direction of the GE Capital Limited Partner, pay over to
the GE Capital Limited Partner and the Other Partners such amounts as are
otherwise required to be distributed to the Partners pursuant to Section 4.2(d)
(but subject to the provisions of Sections 4.2(d) (i) through (ix)) in the
amounts required to be distributed to the Partners pursuant to Section 4.7 of
the Amended and Restated Partnership Agreement until the GE Capital Limited
Partner shall notify the Security Agent that the GE Capital Limited Partner
shall have received such amounts as are distributable to the GE Capital Limited
Partner pursuant to Section 4.7 of the Amended and Restated Partnership
Agreement or that no Special Event shall be continuing. When the conditions
specified in the foregoing sentence have been satisfied, the GE Capital Limited
Partner agrees promptly to give notice to such effect to the Security Agent.
(e) Upon notice to the Security Agent from the Letter of Credit Issuer
that an Event of Default has occurred and is continuing, the Security Agent
shall, at the written direction of the Letter of Credit Issuer, promptly
withdraw amounts on deposit in the Project Letters of Credit Reserve Account and
deliver the same to the Letter of Credit Issuer to be applied by the Letter of
Credit Issuer to the payment of the obligations of the Partnership in respect of
the Project Letters of Credit in accordance with the provisions of the Loan
Agreement.
SECTION 4.17 Events of Default; Special Events. (a) Notwithstanding any
other provision of this Agreement which requires the Security Agent to follow
the written instructions of any other party hereto with respect to deposits
into, transfers to or withdrawals from, any of the Accounts (other than the
Project Letters of Credit Reserve Account, the Distribution Reserve Account, the
Retention Account, the Tomen Distribution Account, the SECI Reserve Account and
the SECI Debt Service Account), upon receipt by the Security Agent of written
notice from the Agent stating that an Event of Default has occurred and is
continuing, the Security Agent shall thereafter distribute
Amended and Restated
Security Deposit Agreement
39
cash from the Accounts (other than the Project Letters of Credit Reserve
Account, the Distribution Reserve Account, the Retention Account, the Tomen
Distribution Account, the SECI Reserve Account and the SECI Debt Service
Account) in accordance with the other provisions hereof only upon the express
written instructions of the Agent (which instructions shall comply with the
terms of this Agreement and may provide that such amounts be applied to the
payment of the Obligations or that the Security Agent continue to follow the
instructions of the Managing General Partner) until notified in writing by the
Agent that such Event of Default has been waived by the Agent or cured. The
Agent shall give such notice of waiver or cure promptly after the granting of
such waiver or receiving evidence satisfactory to the Agent that such Event of
Default has been cured.
(b) Subject to Sections 4.16(a) and 4.17(a), but notwithstanding any
other provision of this Agreement which requires the Security Agent to follow
the written instructions of any other party hereto with respect to deposits
into, transfers to or withdrawals from, any of the Accounts (other than the
Project Letters of Credit Reserve Account, the Tomen Distribution Account, the
SECI Reserve Account and the SECI Debt Service Account), upon receipt by the
Security Agent of written notice from the GE Capital Limited Partner stating
that a Special Event has occurred and is continuing, the Security Agent shall
thereafter distribute cash from the Accounts (other than the Project Letters of
Credit Reserve Account, the Tomen Distribution Account, the SECI Reserve Account
and the SECI Debt Service Account) in accordance with the other provisions
hereof only upon the express written instructions of the GE Capital Limited
Partner (which instructions shall comply with the terms of this Agreement and
may provide that the Security Agent continue to follow the instructions of the
Managing General Partner) until notified in writing by the GE Capital Limited
Partner that such Special Event has been waived by the GE Capital Limited
Partner or cured. The GE Capital Limited Partner shall give such notice of
waiver or cure promptly after the granting of such waiver or receiving evidence
satisfactory to the GE Capital Limited Partner that such Special Event has been
cured.
(c) Notwithstanding any other provision of this Agreement which
requires the Security Agent to follow the written instructions of any other
party hereto with respect to deposits into, transfers to or withdrawals from the
SECI Reserve Account or the SECI Debt Service Account, upon receipt by the
Security Agent of written notice from the SECI Term Lender stating that a SECI
Event of Default has occurred and is continuing, the Security Agent shall
thereafter distribute cash from the SECI Reserve Account and the SECI Debt
Service Account in accordance with the other provisions hereof only upon the
express written instructions of the SECI Term Lender (which instructions shall
comply with the terms of this Agreement and may provide that such amounts be
applied to the payment of the SECI Obligations or that
Amended and Restated
Security Deposit Agreement
40
the Security Agent continue to follow the instructions of the Managing General
Partner) until notified in writing by the SECI Term Lender that such SECI Event
of Default has been waived by the SECI Term Lender or cured. The SECI Term
Lender shall give such notice of waiver or cure promptly after the granting of
such waiver or receiving evidence satisfactory to the SECI Term Lender that such
SECI Event of Default has been cured.
(d) Notwithstanding any other provision of this Agreement which
requires the Security Agent to follow the written instructions of any other
party hereto with respect to deposits into, transfers to or withdrawals from the
Project Letters of Credit Reserve Account, upon receipt by the Security Agent of
written notice from the Letter of Credit Issuer stating that an Event of Default
has occurred and is continuing, the Security Agent shall thereafter distribute
cash from the Project Letters of Credit Reserve Account in accordance with the
other provisions hereof only upon the express written instructions of the Letter
of Credit Issuer (which instructions shall comply with the terms of this
Agreement and may provide that such amounts be applied to the payment of the
Obligations in respect of the Project Letters of Credit or that the Security
Agent continue to follow the instructions of the Managing General Partner) until
notified in writing by the Letter of Credit Issuer that such Event of Default
has been waived by the Letter of Credit Issuer or cured. The Letter of Credit
Issuer shall give such notice of waiver or cure promptly after the granting of
such waiver or receiving evidence satisfactory to the Letter of Credit Issuer
that such Event of Default has been cured.
(e) So long as the obligations of the Borrowers under the Loan
Agreement and the other Loan Documents shall remain outstanding, if the Security
Agent shall receive inconsistent instructions from the Agent, the GE Capital
Limited Partner, the Letter of Credit Issuer and the SECI Term Lender, the
Security Agent shall rely on the instructions of the Agent.
SECTION 4.18 Certain Payments. Notwithstanding anything to the contrary
contained herein, in the event that on any Monthly Transfer Date or Distribution
Date there are insufficient funds on deposit in any Account to pay principal,
interest, reimbursement obligations, fees, distributions and/or other amounts
due and payable from such Account on such Monthly Transfer Date or Distribution
Date to the Agent, the Lenders, the Letter of Credit Issuer, the Swap
Counterparty and/or the Security Agent pursuant to any of the Loan Documents,
and thereafter funds are deposited into the Revenue Account, the Security Agent
shall distribute such funds to the Agent for the payment of such principal,
interest, reimbursement obligations, fees or other amounts, such payments to be
made in the same order of priority as they would have been made had such funds
been on deposit in the applicable Account on such Monthly Transfer Date or
Distribution Date.
Amended and Restated
Security Deposit Agreement
41
SECTION 4.19 Wind-up Account. (a) Subject to the provisions of Section
4.17, but notwithstanding any other provision of this Agreement, upon receipt of
notice from the Managing General Partner and the GE Capital Limited Partner that
the Partnership shall be dissolved in accordance with the terms of the Amended
and Restated Partnership Agreement, the Security Agent shall transfer to the
Wind-up Account all amounts in all the Accounts (other than the Tomen
Distribution Account, the SECI Debt Service Account and the SECI Reserve
Account) and all amounts subsequently received by the Security Agent.
(b) On any date specified in a certificate of a Responsible Officer of
the Managing General Partner, countersigned by a Responsible Officer of the GE
Capital Limited Partner (the "Wind-up Date") (which date shall not be earlier
than five Business Days following the date of receipt by the Security Agent of
the certificate of a Responsible Officer of the GE Capital Limited Partner
specified in Section 4.19(a)), the Security Agent shall transfer, from and to
the extent of cash available in the Wind-up Account, to the Partners such
amounts, certified in such certificate, as are required to be distributed
pursuant to Section 13.4(c) of the Amended and Restated Partnership Agreement.
SECTION 4.20 Delivery of Officer's Certificates; Timing of Payments.
(a) Each of the certificates of a Responsible Officer required to be delivered
hereunder shall be delivered not later than 1:00 p.m., New York City time, on
the day on which the Security Agent is required to make transfers hereunder. Any
certificate of a Responsible Officer delivered later than the time specified
herein shall nevertheless be considered valid and shall be honored by the
Security Agent on or as promptly after the date otherwise specified herein for
payment as is practicable, subject to the availability of cash in the applicable
Account.
(b) Subject to (i) the timely receipt of a certificate of a Responsible
Officer as prescribed in Section 4.20(a), (ii) the availability of cash in the
applicable Account and (iii) other circumstances beyond the control of the
Security Agent, the Security Agent shall make any payment hereunder required
(except for transfers between Accounts) by means of wire transfer of immediately
available funds, to the address of the payee set forth on Schedule I or, in the
case of payments to be made pursuant to Section 4.1(a), to the address of the
payee set forth in the Project Certificate, to be received prior to 3:00 p.m.,
New York City time, on the date specified herein for such payment, or by such
other means of payment, to such other address or at such later time as shall be
specified in the certificate of a Responsible Officer of such payee.
(c) Each Partner shall deliver to each other Partner, simultaneously
with the delivery thereof to the Security Agent, a
Amended and Restated
Security Deposit Agreement
42
true copy of each certificate of a Responsible Officer of such Partner delivered
by such Partner pursuant to this Agreement.
SECTION 4.21 Tomen Distribution Account. On each Distribution Date
which occurs on the last Business Day of a Quarterly Period, the Security Agent,
after making the transfer described in Section 5.1(e), shall promptly withdraw
all amounts on deposit in the Tomen Distribution Account and transfer such
amounts to the Tomen Limited Partners entitled thereto.
ARTICLE V
Investment
SECTION 5.1 Investments. (a) Any cash held by the Security Agent in any
Account (other than the Project Letters of Credit Reserve Account, the
Distribution Reserve Account, the Retention Account, the Tomen Distribution
Account, the SECI Reserve Account and the SECI Debt Service Account), shall be
invested by the Security Agent from time to time as directed in writing by the
Managing General Partner (or, if the Agent shall have notified the Security
Agent that a Default or an Event of Default under the Loan Agreement has
occurred and is continuing, by the Agent or, if no such notice shall have been
received from the Agent and the GE Capital Limited Partner shall have notified
the Security Agent that a Special Event has occurred and is continuing, by the
substitute Managing General Partner appointed by the GE Capital Limited Partner)
in Permitted Investments. Any income or gain realized as a result of any such
investment shall be held as part of the applicable Account and reinvested as
provided herein. The Security Agent shall have no liability for any loss
resulting from any such investment or sale thereof other than any reason of its
willful misconduct or negligence. Any such investment may be sold (without
regard to maturity date) by the Security Agent whenever necessary to make any
distribution required by this Agreement. The Security Agent will promptly notify
the Agent and the Partnership of any loss resulting from such investment.
(b) Any cash held by the Security Agent in the SECI Reserve Account and
the SECI Debt Service Account shall be invested by the Security Agent from time
to time as directed in writing by SECI (or, if the SECI Term Lender shall have
notified the Security Agent that a SECI Default or a SECI Event of Default has
occurred and is continuing, by the SECI Term Lender) in Permitted Investments.
Any income or gain realized as a result of any such investment shall be held as
part of the applicable Account and reinvested as provided herein. The Security
Agent shall have no liability for any loss resulting from any such investment or
sale thereof other than by reasons of its willful misconduct or negligence. Any
such investment may be sold (without regard to maturity date) by the Security
Agent whenever
Amended and Restated
Security Deposit Agreement
43
necessary to make any distribution required by this Agreement. The Security
Agent will promptly notify the SECI Term Lender and the SECI of any loss
resulting from any such investment.
(c) Any cash held by the Security Agent in the Distribution Reserve
Account and the Retention Account shall be invested by the Managing General
Partner (or, if the GE Capital Limited Partner shall have notified the Security
Agent that a Special Event has occurred and is continuing, by the substitute
Managing General Partner appointed by the GE Capital Limited Partner) in
Permitted Investments. Any income or gain realized as a result of any such
investment shall be held as part of the Distribution Reserve Account and the
Retention Account and reinvested as provided herein. The Security Agent shall
have no liability for any loss resulting from any such investment or sale
thereof other than by reason of its willful misconduct or negligence. Any such
investment may be sold (without regard to maturity date) by the Security Agent
whenever necessary to make any distribution required by this Agreement. The
Security Agent will promptly notify the GE Capital Limited Partner and the
Partnership of any loss resulting from any such investment.
(d) Any cash held by the Security Agent in the Project Letters of
Credit Reserve Account shall be invested by the Security Agent from time to time
as directed in writing by the Managing General Partner (or, if the Letter of
Credit Issuer shall have notified the Security Agent that a Default or an Event
of Default under the Loan Agreement has occurred and is continuing, by the
Letter of Credit Issuer or, if not such notice shall have been received from the
Letter of Credit Issuer and the GE Capital Limited Partner shall have notified
the Security Agent that a Special Event has occurred and is continuing, by the
substitute Managing General Partner appointed by the GE Capital Limited Partner)
in Permitted Investments. Any income or gain realized as a result of any such
investment shall be held as part of the applicable Account and reinvested as
provided herein. The Security Agent shall have no liability for any loss
resulting from any such investment or sale thereof other than by reason of its
willful misconduct or negligence. Any such investment may be sold (without
regard to maturity date) by the Security Agent whenever necessary to make any
distribution required by this Agreement. The Security Agent will promptly notify
the Letter of Credit Issuer and the Partnership of any loss resulting from any
such investments.
(e) Any cash held by the Security Agent in the Tomen Distribution
Account shall be invested by the Security Agent from time to time as directed in
writing by the Managing General Partner (or, if the Agent shall have notified
the Security Agent that a Default or an Event of Default under the Loan
Agreement has occurred and is continuing, by the Agent or, if no such notice
shall have been received from the Agent and the GE Capital
Amended and Restated
Security Deposit Agreement
44
Limited Partner shall have notified the Security Agent that a Special Event has
occurred and is continuing, by the substitute Managing General Partner appointed
by the GE Capital Limited Partner) in Permitted Investment maturing not later
than the date such case is to be distributed to the Tomen Limited Partners
pursuant to Section 4.21. Any income or gain realized as a result of any such
investment shall be held in such Account and be reinstated as provided herein,
and on each Distribution Date which occurs on the last Business Day of a
Quarterly Period, all amounts in such Account in excess of the sum of the
transfers to such Account pursuant to Section 4.2(e) during such Quarterly
Period shall be transferred to the Revenue Account. The Security Agent shall
have no liability for any loss resulting from any such investment or sale
thereof other than by reason of its willful misconduct or negligence. Except as
may otherwise be directed by the Tomen Limited Partners pursuant to a written
notice delivered to the Security Agent, any such investment may be sold (without
regard to maturity date) by the Security Agent whenever necessary to make any
distribution required under Section 4.21. The Security Agent will promptly
notify the Agent, the Partnership and the Tomen Limited Partners of any loss
resulting from any such investment.
ARTICLE VI
Security Agent
SECTION 6.1 Rights, Duties, etc. (a) The acceptance by the Security
Agent of its duties hereunder is subject to the following terms and conditions
which the parties to this Agreement hereby agree shall govern and control with
respect to its rights, duties, liabilities and immunities:
(i) it shall act hereunder as an agent only and shall not be
responsible or liable in any manner whatsoever for soliciting any funds or
for the sufficiency, correctness, genuineness or validity of any funds,
securities or other amounts deposited with or held by it;
(ii) it shall be protected in acting or refraining from acting upon any
written notice, certificate, instruction, request or other paper or
document, as to the due execution thereof and the validity and effectiveness
of the provisions thereof and the validity and effectiveness of the
provisions thereof and as to the truth of any information therein contained,
which the Security Agent in good faith believes to be genuine;
(iii) it shall not be liable for any error of judgment or for any act
done or step taken or omitted except in the case of its gross negligence,
willful misconduct or bad faith;
Amended and Restated
Security Deposit Agreement
45
(iv) it may consult with and obtain advice from counsel of its own
choice in the event of any dispute or question as to the construction of any
provision hereof or otherwise in connection with its duties as Security
Agent hereunder, and any action taken or omitted by the Security Agent in
reasonable reliance upon such opinion shall be full justification and
protection to its;
(v) it shall have no duties as Security Agent except those which are
expressly set forth herein and in any modification or amendment hereof;
provided, however, that no such modification or amendment hereof shall
affect its duties unless it shall have given its prior written consent
thereto;
(vi) it may execute or perform any duties hereunder (other than the
holding of the Accounts) either directly or through agents or attorneys;
(vii) it may engage or be interested in any financial or other
transactions with any party hereto and may act on, or as depositary, trustee
or agent for, any committee or body of holders of obligations of such
Persons as freely as if it were not Security Agent hereunder;
(viii) it shall have no right of set-off against any Account;
(ix) it hereby waives any and all Liens which may arise from time to
time in its favor on any Account or any other amounts received by its
pursuant to this Agreement; and
(x) it shall not be obligated to take any action which in its
reasonable judgment would involve it in expense or liability unless it has
been furnished with an indemnity reasonable satisfactory to it.
(b) No implied covenants or obligations shall be read into this
Agreement. If in one or more instances the Security Agent takes any action or
assumes any responsibility not specifically delegated to it hereunder, neither
the taking of such action nor the assumption of such responsibility shall be
deemed to be an express or implied undertaking on the part of the Security Agent
that it will take the same or similar action or assume the same or similar
responsibility in any other instance.
(c) The Security Agent shall not be under any liability for interest on
any funds received by its pursuant to any of the provisions of this Agreement.
(d) The Security Agent shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice,
Amended and Restated
Security Deposit Agreement
46
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by the Agent; provided, however, that if the
payment within a reasonable time to the Security Agent of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Security Agent, not reasonably assured to the Security
Agent by the security afforded to it by the terms of this Agreement, the
Security Agent may require reasonable indemnity against such expense or
liability as a condition to taking any such action. The reasonable expense of
every such examination shall be paid by the Partnership or, if paid by the
Security Agent, shall be repaid by the Partnership upon demand from the
Partnership's own funds.
SECTION 6.2 Resignation or Removal. (a) The Security Agent may at any
time resign by giving notice to each other party to this Agreement, such
resignation to be effective upon the appointment of a successor Security Agent
as hereinafter provided.
(b) The Agent may remove the Security Agent at any time by giving
notice to each other party to this Agreement, such removal to be effective upon
the appoint of a successor Security Agent as hereinafter provided.
(c) In the event of any resignation or removal of the Security Agent, a
successor Security Agent, which (i) shall be a bank or trust company organized
under the laws of the United States of America or of the State of New York,
having a capital and surplus of not less than $100,000,000, and shall in any
event maintain an office in the State of New York where it will hold the
Accounts, and (ii) shall be acceptable to the Agent, the SECI Term Lender and
the GE Capital Limited Partner, shall be selected by the Partnership (or, if a
Default or Event of Default shall have occurred and be continuing, by the Agent
or the GE Capital Limited Partner) and appointed by the Agent on behalf of
itself and the Secured Parties. If a successor Security Agent shall not have
been appointed, or shall not have accepted its appointment, as Security Agent
hereunder within 45 days after such notice of resignation of the Security Agent
or such notice of removal of the Security Agent, the Security Agent, the Agent
or the GE Capital Limited Partner may apply to any court of competent
jurisdiction to appoint a successor Security Agent to act until such time, if
any, as a successor Security Agent shall have accepted its appointment as above
provided. Any successor Security Agent so appointed by such court shall
immediately and without further act be superseded by any successor Security
Agent appointed by the Agent on behalf of itself and the Secured Parties as
above provided. Any such successor Security Agent shall deliver to each party to
this Agreement a written instrument accepting such appointment hereunder and
thereupon such successor Security Agent shall succeed to all the rights and
Amended and Restated
Security Deposit Agreement
47
duties of the Security Agent hereunder and shall be entitled to receive the
Account from the predecessor Security Agent.
ARTICLE VII
Determinations
SECTION 7.1 Value. Cash and Permitted Investments on deposit from time
to time in the Accounts shall be valued by the Security Agent as follows:
(a) cash shall be valued at the face amount thereof; and
(b) Permitted Investments shall be valued at the amount which the
Security Agent would have received at such time if the Security Agent had
liquidated such Permitted Investments (at then prevailing market prices).
SECTION 7.2 Other Determinations. The Partnership, the Agent, GE
Capital, the SECI Term Lender and the Security Agent may establish procedures
not inconsistent with this Agreement pursuant to which the Security Agent may
conclusively determine, for purposes of this Agreement, the amounts from time to
time to be distributed or paid by the Security Agent from cash available in the
Accounts.
ARTICLE VIII
Representations and Warrants
SECTION 8.1 Representations. Each Partner represents and warrants, for
the benefit of each other Partner, the Agent, the Lenders, the Letter of Credit
Issuer, the Swap Counterparty and the SECI Term Lender, that each certificate of
a Responsible Officer delivered by such Partner in connection with this
Agreement shall be true and correct in all material respects and that the
amounts of money certified thereby shall be the proper amounts to be set forth
in such certificates of a Responsible Officer.
SECTION 8.2 Indemnification. (a) The Managing General Partner hereby
undertakes to indemnify and hold harmless each Partner, the Agent, the Lenders,
the Letter of Credit Issuer, the Swap Counterparty and the SECI Term Lender from
and against any and all expenses imposed on, incurred by or asserted against
such Person in any way relating to or arising out of any inaccuracy in any
certificate of a Responsible Officer delivered by the Managing General Partner.
Amended and Restated
Security Deposit Agreement
48
(b) The GE Capital Limited Partner hereby undertakes to indemnify and
hold harmless the Partnership from and against any and all expenses imposed on,
incurred by or asserted against the Partnership arising solely out of the
issuance or use of the Senior Debt Service Letter of Credit or any draw or
attempt to draw thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.1 Fees and Indemnification of Security Agent. The Partnership
agrees to pay the reasonable fees of the Security Agent as compensation for its
services under this Agreement. In addition, the Partnership assumes liability
for, and agrees to indemnify, protect, save and keep harmless the Security Agent
and its officers, employees, successors, assigns, agents and servants from and
against, any and all claims, liabilities, obligations, losses, damages,
penalties, costs and expenses that may be imposed on, incurred by, or asserted
against, at any time, the Agent or its officers and employees and in any way
relating to or arising out of the execution and delivery of this Agreement, the
establishment of the Accounts, the acceptance of deposits, the purchase or sale
of Permitted Investments, the retention of cash and Permitted Investments or the
proceeds thereof and any payment, transfer or other application of cash or
Permitted Investments by the Security Agent in accordance with the provisions of
this Agreement, or as may arise by reason of any act, omission or error of the
Security Agent made in good faith in the conduct of its duties; except that the
Partnership shall not be required to indemnify, protect, save and keep harmless
the Security Agent against (a) its own gross negligence, active or passive, or
willful misconduct and (b) any claims which the Agent, GE Capital, the SECI Term
Lender, the GE Capital Limited Partner or the Tomen Limited Partners (solely
with respect to the Tomen Distribution Account) may have against the Security
Agent as a result of a failure by the Security Agent to perform its obligations
hereunder. The indemnities contained in this Section 9.1 shall survive the
termination of this Agreement.
SECTION 9.2 Termination. This Agreement shall terminates upon written
notice by the Partnership, the Agent, the GE Capital Limited Partner, the Letter
of Credit Issuer, the Swap Counterparty and the SECI Term Lender to the Security
Agent; provided, that upon payment in full of the Obligations, as notified in
writing by the Agent, the Letter of Credit Issuer and the Swap Counterparty to
the Security Agent, the Accounts listed in numbers (8), (12), (16), (17), (18)
and (19) of Section 2.2(a) shall be closed by the Security Agent and any
remaining amounts, together with any interest thereon, on deposit in such
Accounts, shall be transferred to the Revenue Account; provided, further,
Amended and Restated
Security Deposit Agreement
49
that if at the time of delivery of the notice referred to in the foregoing
proviso, either the GE Capital Limited Partner or the SECI Term Lender shall
have delivered a written notice to the Security Agent that a Special Event has
occurred and is continuing or that a SECI Event of Default has occurred and is
continuing, as the case may be, the Security Agent shall transfer such remaining
amounts in accordance with Sections 4.16(d) and 4.16(c), respectively. Upon
termination of this Agreement, except following a transfer pursuant to Section
4.19, the Security Agent shall transfer any remaining amounts, together with any
interest thereon, on deposit in the Accounts to the party or parties specified
in such notice. Any liability or obligation hereunder arising prior to the
termination of this Agreement shall survive such termination.
SECTION 9.3 Agreement Regarding Letters of Credit. The Agent, the
Partnership and GE Capital intend that the Letters of Credit issued by GE
Capital in favor of the Agent pursuant to this Agreement and the Loan Agreement
shall constitute in all respects letters of credit as such term in commonly used
in the commercial banking business, it being understood that the obligations of
GE Capital under such Letters of Credit are independent of and shall not be
affected by the occurrence of any Default or Event of Default, any choice of
remedies under the Collateral Security Documents by the Agent, any invalidity,
irregularity or unenforceability of or any modification to the terms of this
Agreement, the Loan Agreement or the release or granting of any security
interest by the Partnership in favor or the Agent, and that GE Capital, in its
capacity as issuer of such Letters of Credit, hereby waives notice of any of the
foregoing (except to the extent provided for or required by the terms of any
draw certificate under such Letter of Credit) and waives any right to assert any
counterclaim or set-off rights against any beneficiary of any such Letter of
Credit in connection with its obligations under such Letters of Credit.
SECTION 9.4 Severability. If any one or more of the covenants or
agreements provided in this Agreement on the part of the parties hereto to be
performed should be determined by a court of competent jurisdiction to be
contrary to law, such covenant or agreement shall be deemed and construed to be
severable from the remaining covenants and agreements herein contained and shall
in no way affect the validity of the remaining provisions of this Agreement.
SECTION 9.5 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
SECTION 9.6 Amendments. This Agreement may not be modified or amended
without the prior written consent of each of the parties hereto, other than the
Original Agent.
Amended and Restated
Security Deposit Agreement
50
SECTION 9.7 Applicable Law. This Agreement shall in all respects be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 9.8 Notices. Unless otherwise specifically provided herein, all
notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be in writing and shall become effective, if mailed, upon the
earlier of (i) receipt by the addressee and (ii) five Business Days after being
deposited in the United States mail, proper postage for first-class mail affixed
thereto or, if delivered by hand or courier service or in the form of a telex,
telecopy or telegram, when received and shall be directed to the address,
telecopy or telex number of such Person designated pursuant to the Loan
Agreement, the Swap Agreement, the SECI Term Loan Agreement or the Amended and
Restated Partnership Agreement, as the case may be, or in the case of the
Security Agent, to Two World Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Trust Administration Department, telephone number, 000-000-0000,
facsimile number, 000-000-0000, telex number, 000-000 XXX TRUI, or to such other
address, or telecopy number as may be specified from time to time by such Person
or the Security Agent.
SECTION 9.9 Limited Liability. There shall be full recourse to the
Partnership and all of its assets for the liabilities of the Partnership under
this Agreement and its other Obligations, but in no event shall any officer,
shareholder, director, employee or holder of any equity interest in the
Partnership or any Affiliate of any thereof, be personally liable or obligated
for such liabilities and Obligations of the Partnership except as may be
specifically provided in any other Basic Document to which such Person is a
party. Nothing herein contained shall limit or be construed to limit the
liabilities and obligations of any such Person in accordance with the terms of
any other Basic Document creating such liabilities and obligations to which
such Person is a party.
SECTION 9.10 Benefit of Agreement. This Agreement shall inure to the
benefit of, and be enforceable by, the parties hereto and their respective
successors and permitted assigns, and no other Person shall be entitled to any
of the benefits of this Agreement.
Amended and Restated
Security Deposit Agreement
51
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement
to be duly executed by their duly authorized officers, all as of the day and
year first above written.
SARANAC POWER PARTNERS, L.P.
By: Saranac Energy Company, Inc.,
its general partner
By: /s/ Xxxxxx X. Xxxxx, Xx.
--------------------------------------
Title: Senior Vice President
SARANAC ENERGY COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
--------------------------------------
Title: Senior Vice President
TPC SARANAC PARTNER ONE, INC.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------------
Title: Chief Financial Officer
TPC SARANAC PARTNER TWO, INC.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------------
Title: Chief Financial Officer
Amended and Restated
Security Deposit Agreement
52
CREDIT SUISSE, as Agent
By: /s/ PP Xxxx
--------------------------------------
Title: Associate
By: /s/ PP Xxxxxxxxxxx
--------------------------------------
Title: Associate
GENERAL ELECTRIC CAPITAL
CORPORATION, as Original Agent,
Letter of Credit Issuer, Swap
Counterparty, SECI Term Lender and GE
Capital Limited Partner
By: /s/ illegible
--------------------------------------
Title: Manager Operations
THE FUJI BANK AND TRUST COMPANY
By: /s/ Xxxxxx Xxxxx
--------------------------------------
Title: Vice President
Amended and Restated
Security Deposit Agreement
