EXHIBIT 99.4
EXECUTION COPY
AMENDED AND RESTATED
CONSTRUCTION CONTRACT UNDERTAKING
by
TECO ENERGY, INC.,
a corporation organized and existing under the laws of Florida
as TECO
in favor of
PANDA GILA RIVER, L.P.,
a Delaware limited partnership
as Borrower
and
CITIBANK, N.A.,
as Administrative Agent under
the Gila River Project Credit Agreement
dated as of May 14, 2002
AMENDED AND RESTATED
CONSTRUCTION CONTRACT UNDERTAKING
THIS AMENDED AND RESTATED CONSTRUCTION CONTRACT UNDERTAKING, dated as of
May 14, 2002 (as amended, supplemented or otherwise modified from time to time,
this "Undertaking"), made by TECO ENERGY, INC., a corporation organized and
existing under the laws of Florida ("TECO"), in favor of PANDA GILA RIVER, L.P.,
a Delaware limited partnership ("Borrower") and CITIBANK, N.A., as
administrative agent for the Banks under the Credit Agreement described below
("Administrative Agent" and, together with Borrower, the "Beneficiaries").
RECITALS
A. Pursuant to the Gila River Project Credit Agreement, dated as of May
31, 2001 (as amended, amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among Borrower, LC Bank, the Banks and
Administrative Agent, the Banks have agreed to provide Loans and issue Letters
of Credit in the amounts specified and on the terms and subject to the
conditions set forth therein to fund a portion of the costs associated with
Borrower's construction of the Project.
B. Pursuant to the Original Construction Contract, Original Contractor
agreed to provide certain design, engineering, procurement, construction,
start-up and testing services with respect to the Project at a price and on the
terms and subject to the conditions set forth therein.
C. Pursuant to that certain Construction Contract Undertaking, dated as of
January 16, 2002 (the "Original undertaking"), by TECO in favor of the
Beneficiaries, TECO undertook to support certain of the obligations of Original
Contractor under the Original Construction Contract.
D. Borrower intends to terminate the Original Construction Contract and
replace it with the Construction Contract to be entered into by Borrower and
Contractor concurrently with such termination.
E. Administrative Agent and the Banks have agreed to approve and or make
certain additional amendments to the Operative Documents to give effect to such
termination and the entering into by Borrower of the Construction Contract on
the condition that TECO amend and restate the Original Undertaking as provided
herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and to induce the Banks to
continue to provide Loans and issue the Letters of Credit pursuant to the Credit
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, TECO hereby agrees, effective on
and after the Effective Date (under, and as defined in, the Construction
Contract), as follows:
ARTICLE I
DEFINITIONS.
Unless the context shall otherwise require, capitalized terms used but not
defined herein (including the Recitals) are used as defined in the Credit
Agreement and, except as otherwise expressly provided, the Rules of
Interpretation set forth in Exhibit A to the Credit Agreement shall apply to
this Undertaking. In addition, unless the context shall otherwise require, as
used herein the following terms shall have the following meanings:
"Actual Construction Cost" means the aggregate amounts required to be
paid to Original Contractor, Contractor, Subcontractors and other Persons (i) to
complete the work required by Original Contractor under the Original
Construction Contract and Contractor under the Construction Contract, (ii) to
provide oversight and auditing of Original Contractor and Contractor in addition
to that contemplated in the original Project Budget or (iii) in connection with
the preparation and execution of the First Amendment to Credit Agreement and
Second Amendment to Credit Agreement. The amounts paid as Actual Construction
Cost shall include, and be limited to: (i) any amounts which have been paid or
which may be owed to Original Contractor, Contractor or any Subcontractor for
completion of the work required by Original Contractor under the Original
Construction Contract and the Contractor under the Construction Contract; (ii)
reasonable costs paid to the Independent Engineer to monitor the work performed
under the Original Construction Contract and under the Construction Contract;
(iii) reasonable costs of personnel to provide management and engineering
oversight of the work performed under the Original Construction Contract and
under the Construction Contract; (iv) reasonable legal and accounting work
required to monitor and audit work performed under the Original Construction
Contract and under the Construction Contract and payments made to Original
Contractor, Contractor and Subcontractors; and (v) costs to prepare and execute
the First Amendment to Credit Agreement and Second Amendment to Credit
Agreement.
"Base Amount" means $918,124,674.
"Capitalization" means, as to TECO, the sum of Total Debt and
Consolidated Shareholders Equity, in each case, as at the date of any
determination thereof.
"Capitalized Lease Obligations" means, as to any Person, all rental
obligations as lessee which, under GAAP, are or will be required to be
capitalized on the books of such Person, in each case taken at the amount
thereof accounted for as indebtedness in accordance with GAAP.
"Collateral Documents" means the "Collateral Documents," referred to in
the Credit Agreement and the Bridge Loan Agreement.
"Commercial Operation" has the meaning given in the Original
Construction Contract.
"Consolidated Adjusted Interest Expense" means, for any period, the sum
of Interest Expense (a) of TECO and its subsidiaries and (b) accruing on any
Indebtedness of any other Person to the extent such Indebtedness is guaranteed
by TECO or any of its subsidiaries,
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but excluding any Interest Expense (i) on Non-Recourse Indebtedness; and (ii)
on Indebtedness of a Person before the date (A)it becomes a subsidiary of TECO,
(B)it is merged or consolidated with TECO or (C) a subsidiary of TECO or its
assets are acquired by TECO to the extent that income or loss of such Person is
excluded under the definition of Consolidated Adjusted Net Income, each
determined for such period on a consolidated basis in accordance with GAAP.
"Consolidated Adjusted Net Income" means, for any period, the net
income or loss of TECO and its subsidiaries for such period determined on a
consolidated basis in accordance with GAAP (and before giving effect to any
elimination of minority interests in non-wholly owned subsidiaries); provided
that there shall be excluded the income or loss of any Person accrued before (a)
the date it becomes a subsidiary of TECO, (b) the date it is merged into or
consolidated with TECO or any subsidiary of TECO or (c) the date its assets are
acquired by TECO or any subsidiary of TECO, other than amounts of income accrued
before such date which are actually paid as dividends after such date.
"Consolidated EBITDA" means, for any period, Consolidated Adjusted Net
Income for such period plus (a) without duplication and to the extent deducted
in determining such Consolidated Adjusted Net Income, the sum of (i)
Consolidated Adjusted Interest Expense for such period, (ii) consolidated income
tax expense for such period, (iii) all amounts attributable to depreciation and
amortization for such period and (iv) any extraordinary non-cash charges for
such period, and minus (b) without duplication and to the extent included in
determining such Consolidated Adjusted Net Income, any extraordinary gains for
such period, all determined on a consolidated basis in accordance with GAAP.
"Consolidated Shareholders Equity" means, as of the date of any
determination, the consolidated tangible net worth of TECO and its subsidiaries,
and including amounts attributable to (a) junior subordinated debentures;
provided that such junior subordinated debentures have subordination and
deferral features substantially similar to those in the TECO Subordinated
Debentures; and (b) preferred stock to the extent excluded from Total Debt,
minus the value of minority interests in any of TECO's subsidiaries, and
disregarding unearned compensation associated with TECO's employee stock
ownership plan or other benefit plans, foreign currency translation adjustments
and other comprehensive income adjustments, all determined in accordance with
GAAP.
"Construction Contract" means that certain Cost Reimbursable Plus Fixed
Fee Engineering, Procurement and Construction Agreement for Combined-Cycle
Generation Facility, dated as of May 14, 2002, between Borrower and Contractor.
"Construction Contract Guaranty" means that certain Parent Guaranty,
dated as of May 14, 2002, by Contractor Guarantor in favor of Borrower.
"Contingent Obligation" means, as to any Person, any obligation of such
Person guaranteeing any Indebtedness or lease obligation (each a "primary
obligation") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation
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or any property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor or (c) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof; provided, however, that the term
Contingent Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be the maximum probable liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
in good faith by TECO.
"Contractor" means SNC-Lavalin Constructors Inc., a Delaware
corporation.
"Contractor Guarantor" means SNC-Lavalin Group, Inc., a Canadian
corporation.
"E1 Dorado Bridge Loan" has the meaning given to the term "Bridge Loan"
in Exhibit A to the El Dorado Bridge Loan Agreement.
"El Dorado Obligations" means all "Obligations" of El Dorado Borrower
under, and as defined in, the El Dorado Credit Agreement.
"El Dorado Partners" has the meaning given to the term "Partners" in
Exhibit A to the El Dorado Credit Agreement.
"El Dorado Undertaking" means the Amended and Restated Construction
Contract Undertaking, dated as of May 14, 2002, by TECO in favor of El Dorado
Administrative Agent and El Dorado Borrower.
"Enron" means Enron Corp., an Oregon corporation.
"Equity Interests" means (a) shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person or (b) any
warrants, options or other rights to acquire such shares or interests.
"Excluded Change Orders" means change orders referred to in Section
7.02(c)(ii) of the Construction Contract arising out of an Owner Caused Delay
(as defined in the Construction Contract), but only to the extent such Owner
Caused Delay (as defined in the Construction Contract) is caused by Borrower's
failure to perform the obligations in connection with the Owner-Provided Work
(as defined in the Construction Contract).
"Final Acceptance" has the meaning given to such term in the Original
Construction Contract.
"First Amendment to Credit Agreement" means the First Amendment to
Credit Agreement and Waiver, dated as of January 16, 2002, among Borrower,
Administrative Agent (on behalf of the Banks) and LC Bank.
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"Hedge Transactions" means transactions under any interest swap
agreements, caps, collars or other interest rate hedging mechanisms.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) the deferred purchase price
of assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (c) the face amount of all
letters of credit issued for the account of such Person (other than letters of
credit issued to secure a financial obligation of such Person to the extent such
obligation is not outstanding at the time) and all unreimbursed drafts drawn
thereunder, (d) all Indebtedness of another Person secured by any Lien on any
property owned by such Person, whether or not such Indebtedness has been assumed
by such Person, (e) all Capitalized Lease Obligations of such Person, (f) all
obligations of such Person under any subscription or similar agreement, (g) the
discounted present value of all obligations of such Person (other than Tampa
Electric) payable under agreements for the payment of a specified purchase price
for the purchase and resale of power whether or not delivered or accepted, ie.,
take-or-pay and similar obligations, (h) any unfunded or underfunded obligation
subject to the minimum funding standards of Section 412 of the Code of such
Person to any "employee pension benefit plan" (as defined in Section 3(2) of
ERISA) maintained at any time, or contributed to, by such Person or any other
Person which is under common control (within the meaning of Section 414(b) or
(c) of the Code) with such Person, (i) all Contingent Obligations of such Person
and (j) all obligations of such Person in respect of Hedge Transactions;
provided, however, that Indebtedness shall specifically exclude accounts payable
arising in the ordinary course of business.
"Interest Expense" means, with respect to any Person, for any period,
total cash interest expense of such Person payable for such period with respect
to all outstanding Indebtedness of such Person, including all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs under hedging agreements to the
extent such net costs are allocable to such period in accordance with GAAP.
"LC Issuer" means the bank or banks issuing an Undertaking Letter of
Credit.
"NEPCO EPC Cost" means the "Separated Contract Price" (as defined in
the Original Construction Contract) in effect on May 14, 2002, which as of such
date was equal to $896,569,168; provided, however, that such amount shall be
adjusted to reflect the amount of any change order under the Construction
Contract entered into in accordance with the Credit Agreement.
"Non-Recourse Indebtedness" means Indebtedness which is not an
obligation of, and is otherwise without recourse to, the assets or revenues of
TECO or any subsidiary of TECO (other than the assets or revenues of TPS or any
subsidiary of TPS).
"Original Construction Contract" means, subject to the following
sentence, the Amended and Restated Turnkey Engineering, Procurement and
Construction Agreement for Combined-Cycle Generation Facility, dated as of
February 28, 2001, between Borrower and Original Contractor, as amended and
restated on April 30, 2001, and as further amended and
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clarified by (a) those certain change orders set forth on Exhibit E to the
Construction Contract, (b) those certain amendments dated November 29, 2001 and
December 3, 2001, and (c) that certain clarification letter dated
January 11, 2002. References in this Undertaking to the Original Construction
Contract shall refer to the Original Construction Contract (i) as if it remained
in full force and effect and had not been replaced with the Construction
Contract except that the Original Construction Contract shall be deemed to be
amended by, and in accordance with the terms of, any change order (other than
Excluded Change Orders) under the Construction Contract entered into in
accordance with the Credit Agreement and (ii) as if the subcontracts and
purchase orders between (or assigned to) Original Contractor, on the one hand,
and Subcontractors and Vendors (each as defined in the Original Construction
Contract), on the other hand, were not assigned (or reassigned) to Borrower.
"Original Contractor" means National Energy Production Corporation, a
Delaware corporation.
"Owner Caused Delay" has the meaning given to such term in the Original
Construction Contract.
"Performance Liquidated Damages" has the meaning given to such term in
the Original Construction Contract.
"Required Final Acceptance Date" has the meaning given to such term in
the Original Construction Contract.
"Schedule Liquidated Damages" has the meaning given to such term in the
Original Construction Contract.
"Second Amendment to Credit Agreement" means the Second Amendment to
Credit Agreement and Waiver, dated as of May 14, 2002, among Borrower,
Administrative Agent (on behalf of the Banks) and LC Bank.
"Significant Subsidiary" means, collectively, Tampa Electric Company,
TPS and any other subsidiary of TECO formed or acquired after the Closing Date
the total assets (after intercompany eliminations) of which exceed 10% of the
total assets of TECO and its subsidiaries (taken as a whole).
"Subcontractors" means Subcontractors and Vendors, each as defined in,
as applicable, the Original Construction Contract or the Construction Contract.
"Substitute Guarantor Date" means the date on which (x) an entity
reasonably satisfactory to the Majority Banks enters into, or guarantees the
obligations of its subsidiary which enters into, a contract with Borrower on
terms reasonably acceptable to the Majority Banks providing for the performance
of all of the obligations of Original Contractor under the Original Construction
Contract, and (y) an entity reasonably satisfactory to the Majority Banks
assumes the obligations set forth in Sections 2.l(c) and (d) of this Undertaking
or the Majority Banks determine that such assumption is not necessary.
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"Supported Obligations" has the meaning given in Section 2.l(a).
"Taxes" means any present or future tax, levy, impost, duty, charge,
assessment or fee of any nature (including interest, penalties and additions
thereto) that is imposed by any government or other taxing authority in respect
of any payment under this Undertaking other than any income, franchise or
similar tax imposed upon or measured by the gross or net income or capital of
either Beneficiary by the United States, New York State, any jurisdiction where
such Beneficiary is organized and/or any other jurisdiction with the ability to
levy such taxes on such Beneficiary.
"TECO Event of Default" has the meaning given in Section 5.1.
"TECO Material Adverse Effect" means:
(a) a material adverse change in the business, property, results
of operations, or financial condition of TECO and its Significant
Subsidiaries (taken as a whole); or
(b) any event or occurrence of whatever nature which materially
and adversely changes TECO's ability to perform its obligations under this
Undertaking,
provided that a change in any Beneficiary's or any of the Beneficiary's
consultant's view of the future price of electricity or gas will not
constitute a TECO Material Adverse Effect.
"TECO Subordinated Debentures" means the 8.50% Junior Subordinated
Notes Due 2041, issued by TECO on December 20, 2000, in the original principal
amount of $206,200,000.
"Total Debt" means, without duplication, Indebtedness of TECO and its
Significant Subsidiaries determined on a consolidated basis outstanding at the
date of any determination thereof, but expressly excluding (a) Non-Recourse
Indebtedness, (b) junior subordinated debentures issued by TECO; provided that
such junior subordinated debentures have subordination and deferral features
substantially similar to those in the TECO Subordinated Debentures, and
(c)preferred stock of TECO in an amount not to exceed 10% of TECO's
Capitalization on such date.
"Total EPC Cost" means, at any time and from time to time, $943,527,380
plus the amount of any change order under the Construction Contract entered into
in accordance with the Credit Agreement.
"Trans-Union Partners" means each of Trans-Union Interstate Pipeline I,
LLC and Trans-Union Interstate Pipeline II, LLC, each a Delaware limited
liability company.
"Undertaking Letter of Credit" means one or more letters of credit as
security for the Supported Obligations, which letter(s) of credit shall: (a) be
in an aggregate amount at all times greater than or equal to the then-applicable
Undertaking Limit plus the aggregate then-
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unfunded amount set forth on Schedule 1 attached hereto less the aggregate
amount (drawn and undrawn) of the retainage letter of credit provided by TECO
pursuant to Section 2.1(b)(i), or such lesser amount as is satisfactory to the
Majority Banks; (b) be issued by a bank or banks who are not a party to the
Credit Documents and whose long term senior unsecured indebtedness is rated at
least A by S&P and A2 by Xxxxx'x and are otherwise reasonably acceptable to
Administrative Agent; (c) have an initial expiration date of at least 60 days
beyond the Required Final Acceptance Date (or an earlier expiration date if such
Undertaking Letter of Credit permits Administrative Agent to draw thereon the
full stated amount of such Undertaking Letter of Credit in the event such
Undertaking Letter of Credit has not been renewed within 30 days of the
then-applicable expiration date or a substitute Undertaking Letter of Credit has
not then been provided); (d) not be secured by any of the Collateral; (e) allow
Administrative Agent to draw upon such Undertaking Letter of Credit in the event
that no agreement for a replacement Undertaking Letter of Credit has been made
within 15 days after a bank providing such Undertaking Letter of Credit is
downgraded below A by S&P or A2 by Xxxxx'x; and (f) have an "applicant" or
"account party" other than Borrower or El Dorado Borrower.
"Undertaking Limit" means, from time to time, the then-applicable Total
EPC Cost; provided that the Undertaking Limit shall be reduced by fifty percent
(50%) of one quarter of the Total EPC Cost upon achieving Commercial Operation
of each Phase.
ARTICLE II
THE UNDERTAKING.
2.1 Undertaking.
(a) TECO hereby unconditionally and irrevocably:
(i) guarantees (as primary obligor and not as surety), in favor
of the Beneficiaries, the prompt performance in full of all performance (in the
case of each reference to "performance" herein, to cause performance through
TECO's causing another party to perform Original Contractor's performance
obligations strictly in accordance with the terms of the Original Construction
Contract (except as expressly set forth herein)) and payment obligations of
Original Contractor strictly in accordance with the terms set forth in the
Original Construction Contract (except as expressly set forth herein) (such
obligations being collectively referred to herein as the "Supported
Obligations");
(ii) agrees that (A) if for any reason whatsoever Contractor
shall fail, or be unable or, under the terms of the Construction Contract, is
not required to perform or pay in full any of the Supported Obligations as and
when required or due, TECO will promptly perform or pay the same as and when
required or due without regard to any exercise or non-exercise by any
Beneficiary of any right, remedy, power or privilege under or in respect of the
Construction Contract, the Original Construction Contract or the Construction
Contract Guaranty, and (B) in the case of any extension of time of the
performance, payment or renewal of any of the Supported Obligations pursuant to
the terms of the Construction Contract and, if necessary, the Credit Documents,
the same will be promptly performed or paid in full when required or due in
accordance with the terms of such extension or renewal, in each case, except as
set forth in
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Section 2.1 (c) hereof, by expending an aggregate amount up to the
then-applicable Undertaking Limit; and
(iii) agrees that if, notwithstanding the representation and
warranty set forth in Section 3.11 hereof or anything to the contrary herein,
enforcement of the liability of TECO hereunder for the full amount of the
Supported Obligations would be an unlawful or voidable transfer under any
applicable fraudulent conveyance or fraudulent transfer law or any comparable
law, then the liability of TECO hereunder shall be reduced to the highest amount
for which such liability may then be enforced without giving rise to an unlawful
or voidable transfer under any such law.
(b) In fulfilling its obligations hereunder with respect to the
Supported Obligations, TECO hereby irrevocably and unconditionally guarantees,
promises and agrees to perform and comply with the Original Construction
Contract, except that the Guaranteed Commercial Operation Date for each Phase
under, and as defined in, the Original Construction Contract shall be deemed for
the purposes hereof to be the corresponding date therefor set forth on Schedule
3 attached hereto (as each such date may be extended day-for-day for each day of
extension (other than any extension caused by an Excluded Change Order) of the
corresponding Guaranteed Commercial Operation Date of the applicable Phase
under, and as defined in, the Construction Contract). The words "perform and
comply with" are used in their most comprehensive sense and include without
limitation (x) the payment of all costs and expenses with respect to the
achievement of Final Acceptance of the Project within the time and in the manner
set forth in the Original Construction Contract as if such Original Construction
Contract remained in full force and effect and had not been replaced with the
Construction Contract, (y) the payment, satisfaction or discharge of all Liens
arising out of, or relating to, any work associated with the Original
Construction Contract, the Construction Contract or any subcontracts related
thereto that are or may be imposed upon or asserted against the Project and (z)
the defense and indemnification of the Beneficiaries against all such Liens,
whether arising from the furnishing of labor, materials, supplies or equipment,
from taxes, assessments, fees or other charges, from injuries or damage to
persons or property, or otherwise, in each case, except as provided in clause
(ii) below and Section 2.l(c), as and to the extent required by the terms of the
Original Construction Contract as if such Original Construction Contract
remained in full force and effect and had not been replaced with the
Construction Contract. Without limiting the generality of the foregoing, TECO
agrees:
(i) to obtain and maintain in favor of, and deliver to, the
Beneficiaries as security for the performance of its obligations hereunder a
revolving letter of credit having a stated amount at all times in accordance
with Schedule 2 attached hereto;
(ii) to pay from TECO's own resources up to the then-applicable
Undertaking Limit, Schedule Liquidated Damages and Performance Liquidated
Damages as and when the same would have been due under the Original Construction
Contract as if the Original Construction Contract had remained in full force and
effect and had not been replaced by the Construction Contract except that the
Guaranteed Commercial Operation Date for each Phase under, and as defined in,
the Original Construction Contract shall be deemed for the purposes hereof to be
the corresponding date therefor set forth on Schedule 3 attached hereto (as each
such
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date may be extended day-for-day for each day of extension (other than any
extension caused by an Excluded Change Order) of the corresponding Guaranteed
Commercial Operation Date of the applicable Phase under, and as defined in, the
Construction Contract); provided, however, that any amounts actually received by
Borrower from Contractor, Contractor Guarantor, Subcontractor or any other
Person, in each case in respect of schedule or delay liquidated damages or
performance liquidated damages shall be deemed to have been paid by TECO
pursuant to this Undertaking in respect of Schedule Liquidated Damages or
Performance Liquidated Damages, respectively; provided further, however,
notwithstanding the limits on Schedule Liquidated Damages set forth in Section
11.O7(c) of the Original Construction Contract applicable to Original
Contractor, TECO shall be obligated to pay Schedule Liquidated Damages without
regard to any such limits set forth in Section 11.07(c) of the Original
Construction Contract; provided further, however, in the event that the Schedule
Liquidated Damages which would be payable by Original Contractor under the
Original Construction Contract or TECO pursuant to this Section 2.1(b)(ii)
exceed fifteen percent (15%) of the NEPCO EPC Cost, such amounts in excess of
such fifteen percent (15%) shall not be considered in determining whether the
limit of twenty five percent (25%) of the NEPCO EPC Cost for Schedule Liquidated
Damages and Performance Liquidated Damages, collectively, has been met; and
(iii) to cause Final Acceptance of the Project to occur on or
before the Required Final Acceptance Date in accordance with the terms of the
Original Construction Contract.
(c) TECO acknowledges and agrees that the Actual Construction Cost
will exceed the Base Amount. TECO further acknowledges and agrees that: (x)
Borrower shall not be liable for the difference between (i) the Actual
Construction Costs (less the amount of any change orders under the Construction
Contract (other than Excluded Change Orders) increasing the amount payable by
Borrower entered into after May 14, 2002 in accordance with the Credit
Agreement) and (ii) the sum of (A) the Base Amount plus (B) the aggregate amount
of the Retainage L/C Proceeds; and (y) TECO shall be liable to pay the actual
amount by which the Actual Construction Cost (less the amount of any change
orders under the Construction Contract (other than Excluded Change Orders)
increasing the amount payable by Borrower entered into after May 14, 2002 in
accordance with the Credit Agreement) exceeds the sum of the Base Amount plus
the aggregate amount of Retainage L/C Proceeds.
(d) To implement the agreement set forth in clause (c) above, subject
to the following sentence, (i) not later than the last Banking Day of each month
commencing in February 2002, TECO shall be obligated to deposit into the account
referred to below an aggregate amount equal to the amount set forth on Schedule
1 attached hereto corresponding to such month, (ii) at such time, if ever, as
the amount by which the Actual Construction Cost (less the amount of any change
orders under the Construction Contract (other than Excluded Change Orders)
increasing the amount payable by Borrower entered into after May 14, 2002 in
accordance with the Credit Agreement) exceeds the sum of the Base Amount plus
the aggregate amount of Retainage L/C Proceeds by more than the aggregate amount
set forth on Schedule 1 attached hereto, TECO shall deposit such excess amounts
in the account referred to below as such excess amounts become due and payable
and use the proceeds thereof to pay any remaining amounts due to Original
Contractor, Contractor, Subcontractors and any other Person to which
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Actual Construction Costs are then due and owing, and (iii) at such time, if
ever, that TECO provides Administrative Agent evidence, satisfactory to
Administrative Agent (determination of which shall not be unreasonably withheld
or delayed), that the amount by which the Actual Construction Cost (less the
amount of any change orders under the Construction Contract (other than Excluded
Change Orders) increasing the amount payable by Borrower entered into after May
14, 2002 in accordance with the Credit Agreement) exceeds the sum of the Base
Amount plus the aggregate amount of the Retainage L/C Proceeds is less than the
amounts set forth on Schedule 1 by more than $5,000,000, TECO and Administrative
Agent shall amend Schedule 1 to reflect any agreed upon adjustments.
Notwithstanding the immediately preceding sentence, in any month where funds are
not being paid to Persons performing work included within the "Scope of Work"
described in the Construction Contract, TECO's obligation to pay or deposit any
amounts referred to in this Section 2.1(d) shall be deferred until such date as
payments to such Persons resume, at which time TECO shall deposit all amounts
deferred pursuant to this sentence into the account described below. TECO shall
maintain an account with Depositary Agent into which all amounts to be paid by
TECO pursuant to this Section 2.1(c) shall be deposited and with respect to
which Administrative Agent shall be granted a first priority security interest.
Provided no Event of Default exists, TECO shall have the right to withdraw
amounts in such account and advance such amounts to Borrower to pay Original
Contractor, Contractor, Subcontractors and or any other Person to which Actual
Construction Costs are then due and owing as and when amounts are due such
Persons. At any time an Event of Default exists, TECO shall have no rights of
withdrawal with respect to such account and, in any event, Administrative
Agent's only rights with respect to such account shall be to pay to Original
Contractor, Contractor, Subcontractors and/or any other Person to which Actual
Construction Costs are then due and owing with amounts in such account. To the
extent any amounts are remaining in such account after Final Acceptance has been
achieved in accordance with the terms of the Original Construction Contract,
such amounts shall be paid to TECO in accordance with TECO's instructions.
(e) Except as provided in clauses (c) and (d) of this Section 2.1, but
notwithstanding any other provision of this Undertaking to the contrary, the
aggregate amount expended by TECO in the performance of this Undertaking shall
not exceed the then-applicable Undertaking Limit.
2.2 Obligations Absolute and Unconditional.
(a) The obligations of TECO hereunder are primary obligations of TECO
and are an absolute, unconditional, continuing and irrevocable guaranty of
payment and performance of the Supported Obligations and not of collectibility
and are in no way conditioned on or contingent upon any attempt to enforce in
whole or in part Original Contractor's, Contractor's or Contractor Guarantor's
liabilities and obligations to the Beneficiaries. If Original Contractor or
Contractor shall fail to pay or perform any of the Supported Obligations as and
when they are due or required, TECO shall forthwith perform or pay such
Supported Obligations (and in the case of any payment required hereunder, in
immediately available funds), and each such failure by Original Contractor or
Contractor to pay or perform a Supported Obligation shall give rise to a
separate cause of action herewith, and separate suits may be brought hereunder
as each cause of action arises.
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(b) Subject to the following sentence, the Beneficiaries may, at any
time and from time to time (whether or not after revocation or termination of
this Undertaking) without the consent of or notice to TECO, except such notice
as may be required by applicable law which cannot be waived or any notice
required hereunder, without incurring responsibility to TECO, without impairing
or releasing the obligations of TECO hereunder, upon or without any terms or
conditions and in whole or in part, (i) change the manner, place and terms of
payment or performance or change or extend the time of such payment or
performance of, renew, or alter any Supported Obligation, or any obligations and
liabilities (including any of those hereunder) incurred directly or indirectly
in respect thereof or hereof or in any manner modify, amend or supplement the
terms of the Construction Contract, any documents, instruments or agreements
executed in connection therewith, and the undertaking herein made shall apply to
the Supported Obligations, as changed, extended, renewed, modified, amended,
supplemented or altered in any manner; (ii) exercise or refrain from exercising
any rights against Original Contractor, Contractor, Contractor Guarantor or
others (including TECO) or otherwise act or refrain from acting; (iii) add or
release any other guarantor from its obligations without affecting or impairing
the obligations of TECO hereunder; (iv) settle or compromise any Supported
Obligations and/or any obligations and liabilities (including any of those
hereunder) incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
obligations and liabilities which may be due to the Beneficiaries or others; (v)
sell, exchange, release, surrender, realize upon or otherwise deal with in any
manner or in any order any property by whomsoever pledged or mortgaged to secure
or howsoever securing the Supported Obligations or any liabilities or
obligations (including any of those hereunder) incurred directly or indirectly
in respect thereof or hereof and/or any offset thereagainst; (vi) apply any sums
by whomsoever paid or howsoever realized to any obligations and liabilities of
Original Contractor, Contractor or Contractor Guarantor to the Beneficiaries
under the Original Construction Contract, the Construction Contract or the
Construction Contract Guaranty in the manner provided therein regardless of what
obligations and liabilities remain unpaid; (vii) consent to or waive any breach
of, or any act, omission or default under, the Original Construction Contract or
the Construction Contract; and/or (viii) act or fail to act in any manner
referred to in this Undertaking which may deprive TECO of its right to
subrogation against Original Contractor, Contractor, Contractor Guarantor or any
other Person to recover full indemnity for any payments made pursuant to this
Undertaking or of its right of contribution against any other party.
Notwithstanding any provision of this Undertaking to the contrary, no amendment
to or modification of the Construction Contract resulting from the Banks', or
any agent acting on behalf of, or transferee of, the Banks acting as Owner
under, and as defined in, the Construction Contract (to the exclusion of TECO)
pursuant to remedies provided in the Credit Documents shall affect or modify the
Support Obligations in any manner without the prior written consent of TECO.
(c) No invalidity, irregularity or unenforceability of the Supported
Obligations or invalidity, irregularity, unenforceability or nonperfection of
any collateral therefor, shall affect, impair, or be a defense to this
Undertaking, which is a primary obligation of TECO.
(d) This is a continuing Undertaking and all obligations to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in
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reliance hereon. In the event that, notwithstanding the provisions of Section
2.2(a) hereof, this Undertaking shall be deemed revocable in accordance with
applicable law, then to the extent permitted by applicable law any such
revocation shall become effective only upon receipt by the Beneficiaries of
written notice of revocation signed by TECO. To the extent permitted by
applicable law, no revocation or termination hereof shall affect in any manner
rights arising under this Undertaking with respect to Supported Obligations
arising prior to receipt by the Beneficiaries of written notice of such
revocation or termination and the sole effect of revocation and termination
hereof shall be to exclude from this Undertaking Supported Obligations
thereafter arising which are unconnected with Supported Obligations theretofore
arising or transactions theretofore entered into.
(e) Except as otherwise provided by law or by the terms of the
Original Construction Contract (as if such Original Construction Contract had
remained in full force and effect and had not been replaced by the Construction
Contract), each payment to be made by TECO to, or on behalf of, the
Beneficiaries hereunder shall be made without deduction or withholding for or on
account of Taxes. If such deduction or withholding is so required, TECO shall,
upon notice thereof from any Beneficiary, (i) pay the amount required to be
deducted or withheld to the appropriate authorities before penalties attach
thereto or interest accrues thereon (including deductions from amounts payable
under this Section 2.2(e)), (ii) on or before the 30th day after payment of such
amount, forward to such Beneficiary an official receipt evidencing such payment
(or a certified copy thereof), and (iii) in the case of any such deduction or
withholding, forthwith pay to such Beneficiary such additional amount as may be
necessary to ensure that the net amount actually received by such Beneficiary,
free and clear of such Taxes, including any Taxes on such additional amount, is
equal to the amount that such Beneficiary would have received had there been no
such deduction or withholding.
2.3 Waiver.
(a) Subject to Section 2.3(b) and the last sentence of Section 2.2(b),
to the extent permitted by applicable law, TECO hereby unconditionally and
irrevocably waives and relinquishes all rights and remedies accorded by
applicable law to sureties or guarantors and agrees not to assert or take
advantage of any such rights or remedies, including (i) any right to require the
Beneficiaries to proceed against Original Contractor, Contractor, Contractor
Guarantor or any other Person or to proceed against or exhaust any security held
by the Beneficiaries at any time or to pursue any other remedy in any
Beneficiary's power before proceeding against TECO, (ii) any defense that may
arise by reason of the incapacity, lack of power or authority, dissolution,
merger, bankruptcy, termination or disability of Original Contractor,
Contractor, Contractor Guarantor or any other Person or the failure of any
Beneficiary to file or enforce a claim against the estate (in administration,
bankruptcy or any other proceeding) of Original Contractor, Contractor,
Contractor Guarantor or any other Person, (iii) promptness, diligence, demand,
presentment, protest and notice of any kind (other than notices required
hereunder or under the Construction Contract or under the Credit Documents),
including notice of the existence, creation or incurring of any new or
additional indebtedness or obligation or of any action or non-action on the part
of Original Contractor, Contractor, Contractor Guarantor Beneficiary, any
endorser or creditor of Original Contractor, Contractor, Contractor Guarantor or
TECO or on the part of any other person under this or any other
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instrument in connection with any obligation or evidence of indebtedness held by
the Beneficiaries in connection with any Supported Obligations, (iv) any defense
based upon an election of remedies by the Beneficiaries, including an election
to proceed by non-judicial rather than judicial foreclosure, which destroys or
otherwise impairs the subrogation rights of TECO, the right of TECO to proceed
against Original Contractor, Contractor or Contractor Guarantor for
reimbursement, or both, (v) any defense based on any offset against any amounts
which may be owed by any Person to TECO for any reason whatsoever, (vi) any
defense based on any act, failure to act, delay or omission whatsoever on the
part of Borrower, Original Contractor, Contractor, Contractor Guarantor or the
failure by Borrower, Original Contractor, Contractor or Contractor Guarantor to
do any act or thing or to observe or perform any covenant, condition or
agreement to be observed or performed by it under the Original Construction
Contract, the Construction Contract, the Construction Contract Guaranty or the
Credit Documents, (vii) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal, (viii) any defense,
setoff or counterclaim which may at any time be available to or asserted by
Borrower, Original Contractor, Contractor or Contractor Guarantor against the
Beneficiaries or any other Person under the Original Construction Contract, the
Construction Contract, the Construction Contract Guaranty, the Credit Agreement
or any other Credit Document (other than, subject to Section 6.14, defense of
payment of the applicable amounts), (ix) any duty on the part of the
Beneficiaries to disclose to TECO any facts the Beneficiaries may now or
hereafter know about Original Contractor, Contractor or Contractor Guarantor,
regardless of whether the Beneficiaries have reason to believe that any such
facts materially increase the risk beyond that which TECO intends to assume, or
have reason to believe that such facts are unknown to TECO, or have a reasonable
opportunity to communicate such facts to TECO, since TECO acknowledges that TECO
is fully responsible for being and keeping informed of the financial condition
of Original Contractor, Contractor and Contractor Guarantor and of all
circumstances bearing on the risk of non-payment of any obligations and
liabilities hereby guaranteed, (x) any defense arising because of any
Beneficiary's election, in any proceeding instituted under the Federal
Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal
Bankruptcy Code, (xi) any defense based upon any borrowing or grant of a
security interest under Section 364 of the Federal Bankruptcy Code and (xii) any
other circumstance (including any statute of limitations) or any existence of or
reliance on any representation by the Beneficiaries that might otherwise
constitute a defense available to, or discharge of, any guarantor or surety
(other than, subject to Section 6.14, defense of payment of the applicable
amounts).
(b) Notwithstanding any provision of this Undertaking to the contrary
but subject to the following sentence, TECO shall be entitled to assert the
defense that payment or performance is not then due and owing in accordance with
the terms of the Original Construction Contract (as if such Original
Construction Contract remained in full force and effect and had not been
replaced with the Construction Contract). TECO hereby agrees not to assert or
take advantage of and waives all rights hereunder with respect to any Owner
Caused Delay except to the extent the same actually and demonstrably result
directly (i) from a breach by third parties of their obligations under Project
Documents or (ii) from "force majeure events" affecting such Persons (other than
claims of force majeure events by Persons arising out of Borrower's or
Contractor's acts or failure to act) or (iii) from the Banks, or any agent
acting on behalf of, or
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transferee of, the Banks acting as Owner under, and as defined in, the
Construction Contract (to the exclusion of TECO) pursuant to remedies provided
in the Credit Documents.
2.4 Subrogation. For so long as this Undertaking or the El Dorado
Undertaking remains in effect, except as provided below, (a) TECO shall not
exercise any right of subrogation or enforce any remedy which it or the
Beneficiaries now have or may hereafter have against Contractor or Contractor
Guarantor in respect of the Supported Obligations, and, except as provided
below, will not claim the benefit of any rights to, or seek to participate in,
any security now or hereafter held by the Beneficiaries from Contractor or
Contractor Guarantor and (b) TECO shall not enforce any claim, right or remedy
which TECO may now have or hereafter acquire against Contractor or Contractor
Guarantor that arises hereunder, from the existence or enforcement of this
Undertaking and/or from the performance by TECO hereunder, including any claim,
remedy or right of subrogation, reimbursement, exoneration, contribution,
indemnification, or participation in any claim, right or remedy of the
Beneficiaries against Contractor or Contractor Guarantor, or any security which
the Beneficiaries now have or hereafter acquire, whether or not such claim,
right or remedy arises in equity, under contract, by statute, under common law
or otherwise; provided, however, TECO shall be entitled to receive reimbursement
from Original Contractor, Contractor, Enron, Contractor Guarantor, any
Subcontractor or from Borrower (in the case of Borrower, solely from funds
provided by Original Contractor, Contractor, Enron, Contractor Guarantor or any
Subcontractor and solely to the extent such amounts represent amounts previously
paid by TECO under this Undertaking) or evidence of the right to such
reimbursement (in the form of a note or other instrument), and, notwithstanding
any provision of the Credit Documents or the Bridge Loan Documents to the
contrary, Borrower shall be entitled to assign to TECO its rights against
Original Contractor, Contractor, Enron, Contractor Guarantor or any
Subcontractor, in each case solely in respect of, and to the extent such
assignment relates to, amounts paid or obligations performed by TECO under this
Undertaking. Subject to any such rights being assigned to TECO as referred to in
the preceding sentence, nothing herein shall affect the right of Borrower to
enforce any rights or claims it may have against Original Contractor,
Contractor, Enron, Contractor Guarantor or any Subcontractor or to terminate the
Construction Contract, in each case subject to the terms of the Credit
Agreement. Notwithstanding anything to the contrary in the foregoing proviso,
prior to the date on which remedies have been exercised under the Credit
Documents, the consequence of which is that TECO no longer directly or
indirectly owns any interest in Borrower or the Project, TECO shall not have the
right to xxx, claim against, institute any action against or otherwise enforce
any right to seek the reimbursement described above from Borrower for amounts
paid or obligations performed by TECO under this Undertaking.
2.5 Bankruptcy. For so long as this Undertaking or the E1 Dorado
Undertaking remains in effect, TECO shall not, and shall not permit any of its
subsidiaries to, without the prior written consent of Administrative Agent,
commence, or join with any other Person in commencing, any bankruptcy,
reorganization, or insolvency proceeding against Borrower, Contractor or
Contractor Guarantor. Except as specifically contemplated herein, the
obligations of TECO under this Undertaking shall not be altered, limited or
affected by any proceeding, voluntary or involuntary, involving the bankruptcy,
reorganization, insolvency, receivership, liquidation or arrangement of
Borrower, Original Contractor, Contractor, Enron or Contractor Guarantor or by
any defense which Borrower, Original Contractor, Contractor, Enron or
15
Contractor Guarantor may have by reason of any order, decree or decision of any
court or administrative body resulting from any such proceeding.
2.6 Actions by Administrative Agent. Except as set forth in the definition
of Undertaking Letter of Credit, Sections 2.1(b)(z), 2.1(c) or 2.1(d), Article
IV, Article V or Article VI of this Undertaking, Administrative Agent shall have
no right to enforce any rights or remedies under this Undertaking unless and
until an Event of Default shall have occurred and be continuing; provided that
nothing in this Section 2.6 shall impact the rights and remedies of Collateral
Agent and the Banks under the Collateral Documents. Notwithstanding anything to
the contrary in this Undertaking, nothing in this Section 2.6 shall in any way
affect, modify or limit the waivers and agreements of TECO set forth in Section
2.2(b), 2.2(d), 2.2(e), 2.3(a), 2.4 or 2.5 of this Undertaking regardless of
whether any Event of Default exists.
ARTICLE III
REPRESENTATIONS AND WARRANTIES.
TECO hereby represents and warrants that, as of the date hereof:
3.1 Corporate Existence and Business. TECO is a corporation duly organized
and validly existing in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified to do business and is in good standing in
each jurisdiction in which such qualification is necessary to execute, deliver
and perform this Undertaking and each other document to which it is or is to
become a party to complete the transactions contemplated hereby.
3.2 Power and Authorization; Enforceable Obligations. TECO has full power
and authority and the legal right to execute, deliver and perform this
Undertaking and each other document to which it is or is to become a party to
complete the transactions contemplated hereby and to take all action as may be
necessary to complete the transactions contemplated hereunder and thereunder.
TECO has taken all necessary corporate action to authorize the execution,
delivery and performance of this Undertaking and each other document to which it
is or is to become a party to complete the transactions contemplated hereby. No
consent or authorization of, filing with, or other act by or in respect of any
other Person or Governmental Authority is required in connection with the
execution, delivery or performance by TECO, or the validity or enforceability as
to TECO, of this Undertaking and each other document to which it is or is to
become a party to complete the transactions contemplated hereby, except such
consents or authorizations or filings or other acts as have already been
obtained or where the failure to obtain such consent or authorization could not
reasonably be expected to have a TECO Material Adverse Effect. This Undertaking
and each other document to which TECO is a party relating to the completion of
the transactions contemplated hereby have been duly executed and delivered by
TECO and constitute, and each other such document to which it is to become a
party relating to the completion of the transactions contemplated hereby will
upon execution and delivery thereof by TECO and the other parties thereto (if
any) constitute, a legal, valid and binding obligation of TECO enforceable
against it in accordance with its terms except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the right of creditors generally and by general principles of equity.
16
3.3 No Legal Bar. The execution, delivery and performance by TECO of this
Undertaking and each other document to which it is or is to become a party to
complete the transactions contemplated hereby and the making by TECO of any
payments hereunder or under any other document to which it is a party relating
to the completion of the transactions contemplated hereby will not violate any
applicable law or any material contractual obligation of TECO and will not
result in, or require, the creation or imposition of any Lien on any of the
properties or revenues of TECO pursuant to any applicable law or any such
contractual obligation except, in each case, where such violation, creation or
imposition could not reasonably be expected to have a TECO Material Adverse
Effect.
3.4 No Proceeding or Litigation. No litigation or proceeding of or before
any Govermental Authority is pending or, to the knowledge of TECO, threatened in
writing against TECO with respect to the transactions contemplated by this
Undertaking or any other document to which TECO is or is to become a party
relating to the completion of the transactions contemplated hereby, except where
such litigation or proceeding could not reasonably be expected to have a TECO
Material Adverse Effect.
3.5 Governmental Approvals. All governmental authorizations and actions
necessary in connection with the execution and delivery by TECO of this
Undertaking and the performance of its obligations hereunder have been obtained
or performed and remain valid and in full force and effect.
3.6 Financial Statements. All quarterly and annual financial statements of
TECO and its Significant Subsidiaries heretofore delivered by TECO to
Administrative Agent were true, correct and complete in all material respects,
did not fail to disclose any material liabilities, whether direct or contingent,
and fairly presented in all material respects the financial condition of TECO or
such Significant Subsidiary, as the case may be, in each case as of the date
delivered and were prepared in accordance with GAAP. Since the date of the most
recent such financial statements, there has been no material adverse change in
the business, operations, property, assets or financial condition of TECO or its
Significant Subsidiaries taken as a whole.
3.7 True and Complete Disclosure. All factual information heretofore or
contemporaneously furnished by TECO or its representatives in writing to
Administrative Agent or any Bank for purposes of or in connection with this
Undertaking or any transaction contemplated herein was true and accurate in all
material respects on the date as of which such information was dated or
certified and at such date did not omit to state any fact necessary to make such
information not misleading at such time in light of the circumstances under
which such information was provided. The information referred to in the
immediately preceding sentence furnished to Administrative Agent or any Bank on
or prior to the date hereof, taken as a whole, as updated or supplemented from
time to time, is true and correct in all material respects as of the date
hereof, and as of the date hereof all such information does not omit to state
any fact which could reasonably be expected to have a TECO Material Adverse
Effect.
3.8 Investment Company Act. TECO is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended and is exempt from
regulation under PUHCA and the Federal Power Act.
17
3.9 Compliance with Law. There is no violation by TECO or any Significant
Subsidiary of any Governmental Rule which could reasonably be expected to have a
TECO Material Adverse Effect. Except as have been delivered to Administrative
Agent, no notices of violation of any Governmental Rule relating to the Project
or the Site have been issued, entered or received by TECO.
3.10 ERISA. TECO and any other Person which is under common control (within
the meaning of Section 414(b) or (c) of the Code) have fulfilled their
obligations (if any) under the minimum funding standards of ERISA and the Code
for each ERISA Plan in compliance in all material respects with the currently
applicable provisions of ERISA and the Code and have not incurred any liability
to the PBGC or an ERISA Plan under Title IV of ERISA (other than liability for
premiums due in the ordinary course). Assuming that the credit extended
hereunder does not involve the assets of any employee benefit plan subject to
ERISA, neither the execution of this Undertaking nor the consummation of the
transactions contemplated hereby will involve a Prohibited Transaction.
3.11 Adequate Financial Means. (a) TECO is not, and will not as a result of
the execution and delivery of this Undertaking, be rendered insolvent, (b) TECO
does not intend to incur, or believe it is incurring, obligations beyond its
ability to pay, (c) TECO is not executing this Undertaking with any intention to
hinder, delay or defraud any present or future creditor or creditors of TECO and
(d) TECO's property remaining after the delivery and performance of this
Undertaking will not constitute unreasonably small capital.
ARTICLE IV
COVENANTS.
TECO hereby covenants and agrees that:
4.1 Existence. TECO shall, and shall cause each Significant Subsidiary to,
maintain and preserve its existence in good standing in the state of its
formation and its qualification to do business in each other jurisdiction where
such qualification is necessary and all material rights, privileges and
franchises necessary in the normal conduct of its business.
4.2 Consents, Legal Compliance. TECO shall maintain in full force and
effect all consents of any Governmental Authority that are required to be
obtained by it in order for it to perform its obligations under this Undertaking
and will obtain any that may become necessary in the future.
4.3 Prohibition of Certain Transfers.
(a) TECO shall not, and shall not permit any Significant Subsidiary
to, liquidate or dissolve, or combine, consolidate or merge with or into another
Person; except that TECO or any Significant Subsidiary may combine, consolidate
or merge with another Person if (i) TECO or a Significant Subsidiary, as the
case may be, is the surviving corporation of such merger, consolidation or
combination; (ii) prior to such merger, consolidation or combination, and after
giving effect thereto, no default under this Undertaking shall have occurred and
be continuing; (iii) such merger, consolidation or combination shall not cause a
violation of
18
Section 4.11 hereof; (iv) TECO shall have provided pro forma calculations to
Administrative Agent demonstrating that, to the reasonable satisfaction of
Administrative Agent, after giving effect to such merger, consolidation or
combination (A) the projected ratio of Total Debt to Capitalization for the next
succeeding fiscal quarter will be less than or equal to 0.65 to 1.00 and (B) the
projected ratio of Consolidated EBITDA to Consolidated Adjusted Interest Expense
for the next succeeding twelve months will equal or exceed 3.0 to 1.00; and (v)
TECO's obligations under this Undertaking and the Beneficiaries' rights and
remedies under this Undertaking shall not be diminished in any manner as a
result of such merger, consolidation or combination.
(b) Except as set forth in this Section 4.3 or sales that are in the
nature of financing leases, TECO shall not, and shall not permit any Significant
Subsidiary to, sell, lease, assign or otherwise transfer or dispose of, directly
or indirectly, all or any substantial part of any Significant Subsidiary's
property, business or assets; provided that (i) TECO or any Significant
Subsidiary may sell, lease or otherwise transfer or dispose of, directly or
indirectly, assets to any of TECO, any Significant Subsidiary, either Partner,
either El Dorado Partner, either Trans-Union Partner, Borrower, El Dorado
Borrower or Trans-Union, (ii) Tampa Electric may sell, contribute or transfer
its transmission and transmission-related assets for fair value to a regional
transmission organization and (iii) TPS may sell up to 30% of its assets in
exchange for assets similar to those sold, or for cash so long as the proceeds
of such cash sales are (x) retained by TPS or TECO in cash or equivalent short
term investments (provided that TECO shall not be obligated to so maintain any
such proceeds in cash or equivalent investments at any time that TECO is rated
at least Baa2 by Xxxxx'x and BBB+ by S&P or Baa1 by Xxxxx'x and BBB by S&P) and
reinvested within nine months of the date of such sale in assets similar to
those sold or (y) applied by Borrower, on a pro-rata basis, toward (a) the
prepayment of the outstanding principal amount of the Bridge Loans and the El
Dorado Bridge Loans, and (b) satisfaction of TECO's then due and payable
obligations under the Equity Contribution Guaranty and under that certain Equity
Contribution Guaranty, dated as of May 31, 2001, by TECO in favor of El Dorado
Administrative Agent, and following the applications set forth in the foregoing
clauses (a) and (b), pro-rata to satisfaction of all other then due and payable
obligations of Borrower and El Dorado Borrower guaranteed by TECO under the
Equity Guaranties and under the "Equity Guaranties" as defined in the El Dorado
Credit Agreement.
(c) Except as set forth in this Section 4.3, TECO shall not, and shall
not permit any Significant Subsidiary to, mortgage, pledge or encumber all or
substantially all of its assets (other than, solely in the case of TPS, pursuant
to limited recourse project financing transactions entered into by TPS after the
Closing Date in the ordinary course of its business), except for encumbrances
listed on Schedule 4.3.
(d) TECO shall not sell, assign or otherwise transfer, by way of
collateral assignment or otherwise, or dispose of, directly or indirectly (by
way of collateral assignment or otherwise) any Equity Interest in any
Significant Subsidiary; provided that for fair value TECO may sell, assign or
transfer up to 20% of its Equity Interests in TPS.
4.4 Payment of Material Obligations. TECO shall, and shall cause each
Significant Subsidiary to, pay all its material obligations, howsoever arising,
as and when due and payable, except (a) such as may be contested in good faith
or as to which a bona fide dispute may exist;
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provided that adequate reserves have been established in accordance with GAAP,
and (b) trade payables which shall be paid in the ordinary course of business.
4.5 Taxes. TECO shall, and shall cause each Significant Subsidiary to, file
all tax returns and pay, or cause to be paid, as and when due and prior to
delinquency, all taxes, assessments and governmental charges of any kind that
may at any time be lawfully assessed or levied against or with respect to it;
provided that TECO or any Significant Subsidiary may contest in good faith any
such taxes, assessments and other charges and, in such event, may permit the
taxes, assessments or other charges so contested to remain unpaid during any
period, including appeals, when such Person is in good faith contesting the
same, so long as (a) adequate reserves have been established in accordance with
GAAP, (b) enforcement of the contested tax, assessment or other charge is
effectively stayed for the entire duration of such contest if such enforcement
could reasonably be expected to have a TECO Material Adverse Effect, and (c) any
tax, assessment or other charge determined to be due, together with any interest
or penalties thereon, is promptly paid as required after final resolution of
such contest.
4.6 Maintenance of Property, Insurance. TECO shall, and shall cause each
Significant Subsidiary to, (a) keep all property useful and necessary in its
business in good working order and condition except where the failure to so
maintain could not reasonably be expected to have a TECO Material Adverse
Effect, (b) maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and against at least such
risks as are in accordance with normal industry practice, or make provisions
reasonably satisfactory to Administrative Agent for self-insurance, and (c)
furnish to Administrative Agent, upon written request, full information as to
the insurance carried.
4.7 Compliance with Laws, Instruments, Etc. TECO shall, and shall cause
each Significant Subsidiary to, promptly comply, or cause compliance, with all
Governmental Rules, except where the failure to comply could not reasonably be
expected to have a TECO Material Adverse Effect, including Governmental Rules
relating to pollution control, environmental protection, equal employment
opportunity or employee benefit plans, ERISA Plans and employee safety.
4.8 No Change in Business. TECO shall maintain a substantial part of its
business in the power industry and businesses reasonably related thereto and
TECO shall cause each Significant Subsidiary to maintain as a substantial part
of its business the general type of business now conducted by such Significant
Subsidiary.
4.9 Financial Statements. Unless the Beneficiaries otherwise consent,
deliver or cause to be delivered to the Beneficiaries, in form and detail
reasonably satisfactory to the Beneficiaries:
(a) As soon as practicable and in any event within 60 days after the
end of the first, second and third quarterly accounting periods of its fiscal
year, an unaudited consolidated balance sheet of TECO and its consolidated
subsidiaries as of the last day of such quarterly period and the related
statements of income, cash flow, and partners' capital (where applicable) for
such quarterly period and (in the case of second and third quarterly periods)
for the portion of
20
the fiscal year ending with the last day of such quarterly period, setting forth
in each case in comparative form corresponding unaudited figures from the
preceding fiscal year; and
(b) As soon as practicable and in any event within 120 days after the
close of each applicable fiscal year, audited consolidated financial statements
of TECO and its consolidated subsidiaries. Such financial statements shall
include a statement of equity, a balance sheet as of the close of such year, an
income and expense statement, reconciliation of capital accounts and a statement
of cash flow, all prepared in accordance with GAAP, certified by an independent
certified public accountant selected by TECO. Such certificate shall not be
qualified or limited because of restricted or limited examination by such
accountant of any material portion of the records of TECO.
(c) Each time the financial statements are delivered under Sections
4.9(a) and (b), deliver, along with such financial statements, a certificate
signed by a Responsible Officer of TECO (i) setting forth reasonably detailed
calculations demonstrating compliance with Sections 4.12(a) and (b) and
including a schedule describing all Contingent Obligations of TECO, and (ii)
certifying that (A) such Responsible Officer has made or caused to be made a
review of the transactions and financial condition of TECO during the relevant
fiscal period and that, to such Responsible Officer's knowledge, TECO is in
compliance with all applicable material provisions of this Undertaking and each
Credit Document to which TECO is a party or, if such is not the case, stating
the nature of such non-compliance and the corrective actions which TECO has
taken or proposes to take with respect thereto, and (B) such financial
statements are true and correct in all material respects and that no material
adverse change in the consolidated assets, liabilities, operations, or financial
condition of TECO has occurred since the date of the immediately preceding
financial statements provided to the Beneficiaries or, if a material adverse
change has occurred, the nature of such change.
(d) As long as TECO is required or permitted to file reports under the
Securities Exchange Act of 1934, as amended, a copy of its report on Form 10-K
shall satisfy the requirements of Section 4.9(a) and a copy of TECO's report on
Form 10-Q shall satisfy the requirements of Section 4.9(b).
4.10 Notices. TECO shall promptly, upon acquiring notice or giving notice,
as the case may be, or obtaining knowledge thereof, deliver written notice to
the Beneficiaries of:
(a) Any litigation pending or threatened in writing against TECO or
any Significant Subsidiary involving claims against TECO or such Significant
Subsidiary that could reasonably be expected to have a TECO Material Adverse
Effect, such notice to include copies of all papers filed in such litigation and
to be given monthly if any such papers have been filed since the last notice
given;
(b) Any dispute or disputes which may exist between TECO or any
Significant Subsidiary and any Governmental Authority and which involve (i)
claims against TECO or such Significant Subsidiary that could reasonably be
expected to have a TECO Material Adverse Effect, (ii) injunctive or declaratory
relief that could reasonably be expected to have a TECO Material Adverse Effect,
(iii) revocation or material modification or the like of any
21
applicable material permit or imposition of additional material conditions with
respect thereto, or (iv) any liens for any material amount of taxes due but not
paid;
(c) Any default under this Undertaking or under any other agreement
with respect to any Indebtedness of TECO outstanding in an amount equal to or in
excess of $50,000,000;
(d) TECO being placed on watch or review for possible rating
down-grade by S&P or Xxxxx'x;
(e) Any negative change, from the date hereof, from the rating given
to TECO's long-term senior unsecured debt by either S&P or Xxxxx'x; and
(f) Any event or circumstance which could reasonably be expected to
have a TECO Material Adverse Effect.
4.11 Maintenance of Ratings. If TECO's long term unsecured indebtedness is
not rated at least (a) BBB- by S&P and Baa2 by Xxxxx'x or (b) BBB by S&P and
Baa3 by Xxxxx'x, TECO shall, within 15 days following such downgrade, (x) cause
the LC Issuer to issue the Undertaking Letter of Credit, naming Administrative
Agent as beneficiary and (y) in the event the Undertaking Letter of Credit shall
have been issued in accordance with clause (x) of this Section 4.11, secure a
replacement Undertaking Letter of Credit within 15 days after the LC Issuer's
long term unsecured indebtedness is rated below A by S&P or below A2 by Xxxxx'x,
or the rating on such indebtedness is removed altogether.
4.12 Financial Covenants. TECO shall comply with the following covenants as
of the last day of each fiscal quarter:
(a) The ratio of Total Debt to Capitalization, for the fiscal quarter
then ended, shall be less than or equal to 0.65 to 1.00; and
(b) The ratio of Consolidated EBITDA to Consolidated Adjusted Interest
Expense, for the twelve months then ended, shall equal or exceed 3.0 to 1.0.
ARTICLE V
EVENTS OF DEFAULT
5.1 Events of Default. The occurrence of any of the following events shall
constitute an event of default (a "TECO Event of Default") hereunder:
(a) Debt Cross Default. (i) TECO or any Significant Subsidiary shall
default for a period beyond any applicable grace period in the payment of any
principal, interest or other amount due under any agreement involving the
borrowing of money or the advance of credit (other than trade payables) and the
outstanding amount or amounts payable under all such agreements equals or
exceeds $50,000,000 or (ii) an event of default shall have occurred and be
continuing under an agreement, or related agreements, under which TECO or any
Significant Subsidiary has outstanding indebtedness for borrowed money of
$10,000,000 or more and, in the
22
case of this clause (ii), such debt has been accelerated by the holder of such
debt, or the holder of such debt has attempted to accelerate but such
acceleration was prevented by applicable Governmental Rule.
(b) Bankruptcy; Insolvency. TECO or any Significant Subsidiary shall
become subject to a Bankruptcy Event.
(c) Misstatements; Omissions. Any representation or warranty of TECO
set forth in this Undertaking shall be untrue or misleading in any material
respect as of the time made and such untrue or misleading representation or
warranty (i) is having or could reasonably be expected to result in a TECO
Material Adverse Effect and (ii) shall remain unremedied by TECO for a period of
30 days after the earlier of the date that TECO becomes aware thereof or
receives written notice thereof from Beneficiary.
(d) Breach of Terms of Agreement. TECO shall fail to perform or
observe any of the covenants set forth in this Undertaking and (except with
respect to any covenants set forth in Section 2.l(c), 2.l(d), 4.1 (with respect
to its obligation to maintain its existence), 4.3, 4.8, 4.11 or 4.12) such
failure shall continue unremedied for 30 days after TECO becomes aware thereof
or receives written notice with respect thereto from either Beneficiary.
(e) Judgments. A final judgment or judgments shall be entered against
TECO or any Significant Subsidiary in the amount of $50,000,000 or more (net of
amounts covered by insurance) individually or in the aggregate (other than (i) a
judgment which is fully discharged within 30 days after its entry, or (ii) a
judgment, the execution of which is effectively stayed within 30 days after its
entry but only for 30 days after the date on which such stay is terminated or
expires) or, in the case of injunctive relief, which if left unstayed could
reasonably be expected to have a TECO Material Adverse Effect.
(f) Change in Control. Without the consent of the Majority Banks, TECO
shall cease to directly or indirectly own and control at least 80% of (i) the
economic interests and (ii) the voting interests (whether by committee, contract
or otherwise) in TPS.
ARTICLE VI
MISCELLANEOUS.
6.1 Successions or Assignments.
(a) This Undertaking shall inure to the benefit of the successors or
assigns of the Beneficiaries who shall have, to the extent of their interest,
the rights of the Beneficiaries hereunder.
(b) This Undertaking is binding upon TECO and its successors or
permitted assigns; provided that TECO is not entitled to assign its obligations
hereunder to any other person without the prior written consent of each
Beneficiary and any purported assignment in violation of this provision shall be
void.
23
6.2 Waivers.
(a) No delay on the part of any Beneficiary in exercising any of its
rights (including those hereunder) and no partial or single exercise thereof and
no action or non-action by any Beneficiary, with or without notice to TECO or
anyone else, shall constitute a waiver of any rights or shall affect or impair
this Undertaking.
(b) BORROWER, ADMINISTRATIVE AGENT AND TECO HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS UNDERTAKING OR ANY DOCUMENT ENTERED INTO IN CONNECTION
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL, OR WRITTEN), OR ACTIONS OF BORROWER, ADMINISTRATIVE AGENT OR TECO. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR BORROWER AND ADMINISTRATIVE AGENT TO
ACCEPT THIS UNDERTAKING.
6.3 Interpretation. The section headings in this Undertaking are for the
convenience of reference only and shall not affect the meaning or construction
of any provision hereof.
6.4 Remedies Cumulative. Each and every right and remedy of the
Beneficiaries hereunder shall be cumulative and shall be in addition to any
other right or remedy given hereunder or under any Credit Document, or now or
hereafter existing at law or in equity.
6.5 Severability. Any provision of this Undertaking that may be determined
by competent authority to be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
6.6 Amendments. This Undertaking may be amended, waived or otherwise
modified only with the written consent of all parties hereto.
6.7 Jurisdiction. Administrative Agent, Borrower and TECO agree that any
legal action or proceeding by or against TECO or with respect to or arising out
of this Undertaking may be brought in or removed to the courts of the State of
New York, in and for the County of New York, or of the United States of America
for the Southern District of New York, as the Beneficiaries may elect. By
execution and delivery of this Undertaking, Administrative Agent, Borrower and
TECO accept, for themselves and in respect of their property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Administrative Agent,
Borrower and TECO irrevocably consent to the service of process out of any of
the aforementioned courts in any manner permitted by law. Any such process or
summons in connection with any such action or proceeding may also be served by
mailing a copy thereof by certified or registered mail, or any substantially
similar form of mail, addressed to TECO as provided for notices hereunder.
Nothing herein shall affect the right of the Beneficiaries to bring legal action
or proceedings in any other competent jurisdiction. Borrower, Administrative
Agent and TECO hereby waive any right to stay or dismiss any action or
proceeding under or in connection with any or all of the
24
Project, this Undertaking or any Credit Document or any other document related
hereto brought before the foregoing courts on the basis of forum non-conveniens.
6.8 Governing Law. This Undertaking and the rights and obligations of the
Beneficiaries and of TECO shall be governed by and construed in accordance with
the law of the State of New York without reference to principles of conflicts of
laws (other than Section 5-1401 and Section 5-1402 of the New York General
Obligations Law).
6.9 Integration of Terms. This Undertaking contains the entire agreement
between TECO, Administrative Agent and Borrower relating to the subject matter
hereof and supersedes all oral statements and prior writings with respect
hereto.
6.10 Consent. TECO hereby acknowledges receiving copies of the Original
Construction Contract, the Construction Contract, the Credit Agreement and the
other Credit Documents (in each case, as amended to consummate the transactions
contemplated hereby), and consents to the terms and provisions of each thereof.
6.11 Notices.
(a) All notices in connection with this Undertaking shall be given by
notice in writing hand-delivered or sent by facsimile transmission or by
electronic mail or by first class or certified mail return-receipt requested
(airmail, if overseas), postage prepaid. All such notices shall be sent to the
appropriate telecopier number or address, as the case may be, set forth below or
to such other number or address as shall have been subsequently specified by
Written notice to the other party, and shall be sent with copies, if any, as
indicated below. All such notices shall be effective upon receipt.
If to TECO: TECO Energy, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to Borrower: Panda Gila River, L.P.
0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to Administrative Citibank, N.A.
Agent: 000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx
25
Tel: (000) 000-0000
Fax: (000) 000-0000
Citibank, N.A.
0 Xxxxx Xxx, Xxxxx 0000
Xxx Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
6.12 Collection Expenses. Without regard to any limitation set forth in this
Undertaking, if any Beneficiary is required to pursue any remedy against TECO
hereunder, TECO shall pay to such Beneficiary within 30 days after demand and
delivery of reasonable backup documentation, all reasonable attorneys' fees and
all other costs and expenses incurred by such Beneficiary in enforcing this
Undertaking.
6.13 Termination. This Undertaking shall terminate on the earliest to occur
of: (v) a Substitute Guarantor Date, (w) a Replacement Obligor for TECO executes
and delivers a guaranty substantially in the form of this Undertaking and as is
otherwise reasonably satisfactory to Administrative Agent, (x) indefeasible
payment in full of all Obligations of Borrower under the Credit Documents, (y)
indefeasible performance in full of all Supported Obligations, and (z) the
payment by TECO under this Undertaking of an aggregate amount equal to the sum
of the Undertaking Limit plus the amounts described in clause (c) of Section
2.1.
6.14 Reinstatement. Notwithstanding anything to the contrary in Section
6.13, this Undertaking shall continue to be effective or be automatically
reinstated, as the case may be, if and to the extent that for any reason any
payment by or on behalf of Contractor in respect of the Supported Obligations is
rescinded or a Beneficiary is otherwise obligated to remit any payment to any
Person, whether as a result of any proceedings in bankruptcy or reorganization
or otherwise, all as if such payment had not been made, and TECO agrees that it
will indemnify the Beneficiaries, on demand for all reasonable costs and
expenses (including reasonable fees of counsel) incurred by the Beneficiaries in
connection with any such rescission or restoration.
6.15 Counterparts. The Undertaking may be executed in one or more duplicate
counterparts, and when executed and delivered by all of the parties listed below
shall constitute a single binding agreement.
6.16 Non-Recourse. Recourse to TECO under this Undertaking shall be limited
to the extent provided in this Agreement and in Article 9 of the Credit
Agreement.
6.17 Limitation on Liability. Recourse against Administrative Agent, the
Banks or any of their Affiliates, directors, employees, attorneys or agents
under this Undertaking shall be limited to the extent provided in Section 12.13
of the Credit Agreement, which Section 12.13 is incorporated by reference
herein, mutatis mutandis.
26
6.18 Further Assurances. TECO shall execute and deliver any such further
instruments and shall take such further actions as the Beneficiaries may at any
time or times reasonably request in order to carry out the provisions and intent
of this Undertaking.
6.19 Amendment and Restatement. The Original Undertaking is hereby
superceded in its entirety by this Undertaking, which has been executed in
renewal, amendment, restatement and modification of, but not in extinguishment
of, the obligations of TECO under the Original Undertaking. From and after the
date hereof, whenever referred to in any Operative Document, the term
"Undertaking" shall mean this Undertaking.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
27
IN WITNESS WHEREOF, intending to be legally bound, TECO has caused this
Undertaking to be duly executed and delivered as of the day and year first above
written.
TECO ENERGY, INC.,
a Florida corporation
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President - Treasury and Risk
Management (Treasurer) and
Assistant Secretary
S-1
[Amended TECO Undertaking (Gila River)]
Accepted:
PANDA GILA RIVER, L.P.,
a Delaware limited partnership
By: Panda Gila River I, LLC,
a Delaware limited liability company,
its General Partner
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President - Finance
S-2
[Amended TECO Undertaking (Gila River)]
Accepted:
CITIBANK, N.A.,
as Administrative Agent under
the Gila River Project Credit Agreement
By: /s/ Xxxxxx Xx
----------------------------------------
Name: Xxxxxx Xx
Title: Vice President
S-3
[Amended TECO Undertaking (Gila River)]
SCHEDULE 1
CONSTRUCTION CONTRACT UNDERTAKING
BY TECO ENERGY, INC. IN FAVOR OF PANDA GILA RIVER, L.P.
MONTHLY UNDERTAKING OBLIGATION
Jan-02 $ 2,734,000
Feb-02 2,838,000
Mar-02 3,467,000
Apr-02 3,358,000
May-02 3,728,000
Jun-02 3,194,000
Jul-02 4,229,000
Aug-02 2,383,000
Sep-02 2,647,000
Oct-02 2,113,000
Nov-02 1,484,000
Dec-02 1,387,000
Jan-03 984,000
Feb-03 812,000
Mar-03 781,000
Apr-03 595,000
May-03 501,000
Jun-03 376,000
Jul-03 518,000
Aug-03 734,569
Sep-03 -
-----------
Total $38,863,569*
===========
--------------
*TECO acknowledges that such amount is an estimate of the amount of cost
overruns as of the date of the Original Undertaking. TECO further acknowledges
that: (a) as a consequence of the termination of the Original Construction
Contract and the entering into of the Construction Contract, additional cost
overruns are anticipated and the estimated amount of such overruns is $1,488,500
and (b) all such additional cost overruns shall be paid as provided in (c) and
(d) of Section 2.1 of the Undertaking.
--------------------------------------------------------------------------------
PROJECTED RETAINAGE LOC AMOUNTS: GILA RIVER
Gila River
Date Balance
-------------- ------------------
Upon Agreement $ 78,740,543
07/01/02 85,597,746
10/01/02 87,745,134
01/01/03 89,134,619
04/01/03 71,964,543
07/01/03 33,834,884
10/01/03 27,067,908
01/01/04 20,300,931
04/01/04 -
Schedule assumes that that reduction events are achieved according to current
construction schedule. Reduction events include mechanical completion,
commercial operation, and testing of each phase and final acceptance.
Balance must be in effect on or before the first day of each calendar quarter.
Thus, balances must be in effect on or before date shown.
--------------------------------------------------------------------------------
SCHEDULE 3
GUARANTEED COMMERCIAL OPERATION DATES
PHASE DATE
----- ----
Phase I Guaranteed Commercial Operation Date April 30, 2003
Phase II Guaranteed Commercial Operation Date May 31, 2003
Phase III Guaranteed Commercial Operation Date June 30, 2003
Phase IV Guaranteed Commercial Operation Date August 31, 2003
SCHEDULE 4.3
1. First Mortgage Indenture of Tampa Electric Company (First Mortgage on Tampa
Electric assets).
