EXHIBIT 4.3
EXECUTION COPY
DEPOSIT AND DISBURSEMENT AGREEMENT
between
PROJECT ORANGE FUNDING, L.P.,
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Collateral Agent
and Securities Intermediary
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
Dated as of December 6, 1999
TABLE OF CONTENTS
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Page
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Article 1
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Definitions
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Section 1.01. Capitalized Terms................................... 2
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Section 1.02. Definitions, Construction........................... 2
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Article 2
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Establishment of Accounts
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Section 2.01. Acceptance of Appointment as Collateral Agent....... 11
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Section 2.02. Establishment of Funds and Sub-funds................ 12
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Section 2.03. Security Interest................................... 14
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Section 2.04. Termination......................................... 14
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Article 3
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The Funds
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Section 3.01. Revenue Account..................................... 14
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Section 3.02. Principal Account................................... 18
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Section 3.03. Interest Account.................................... 18
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Section 3.04. Debt Service Reserve Account........................ 19
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Section 3.05. Gas Reserve Account................................. 21
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Section 3.06. Capital Expenditure Reserve Account................. 21
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Section 3.07. Subordinated Asset Management Fee Account........... 22
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Section 3.08. Distribution Account................................ 23
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Section 3.09. Distribution Suspense Account....................... 24
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Section 3.10. Loss Proceeds Account............................... 25
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Section 3.11. Redemption Account.................................. 31
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Section 3.12. Investment of Accounts.............................. 32
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Section 3.13. Disposition of Accounts upon Retirement of
Senior Secured Notes................................ 33
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Section 3.14. Account Balance Statements.......................... 33
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Section 3.15. Events of Default................................... 34
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Section 3.16. Accounts Maintained as UCC "Securities Accounts".... 34
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Section 3.17. Stipulation Reserve Account......................... 35
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Page
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Article 4
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Collateral Agent
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Section 4.01. Appointment of Collateral Agent, Power and
Immunities.......................................... 36
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Section 4.02. Reliance by Collateral Agent........................ 37
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Section 4.03. Court Orders........................................ 38
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Section 4.04. Resignation or Removal.............................. 38
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Article 5
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Expenses; Indemnification; Fees
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Section 5.01. Expenses............................................ 40
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Section 5.02. Indemnification..................................... 40
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Section 5.03. Fees................................................ 40
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Article 6
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Miscellaneous
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Section 6.01. Amendments; Etc..................................... 40
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Section 6.02. Addresses for Notices............................... 41
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Section 6.03. Governing Law....................................... 41
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Section 6.04. Waiver of Jury Trial................................ 41
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Section 6.05. Headings............................................ 42
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Section 6.06. No Third Party Beneficiaries........................ 42
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Section 6.07. No Waiver........................................... 42
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Section 6.08. Severability........................................ 42
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Section 6.09. Successors and Assigns.............................. 42
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Section 6.10. Execution in Counterparts........................... 42
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Section 6.11. Consequential Damages............................... 42
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Section 6.12. Limitation of Liability............................. 43
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Section 6.13. Regarding the Collateral Agent...................... 44
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Section 6.14. Dispute Resolution.................................. 44
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ii
This DEPOSIT AND DISBURSEMENT AGREEMENT (this "Depositary Agreement") dated
as of December 6, 1999 between Project Orange Funding, L.P., a Delaware limited
partnership (together with its successors, including Project Orange Associates,
L.P., a Delaware limited partnership, as the survivor of the merger of Project
Orange Funding L.P. with and into Project Orange Associates, L.P. concurrently
with the issuance and sale of the Senior Secured Notes referred to below and the
execution and delivery of this Agreement by the parties hereto, the "Issuer"),
and U.S. Bank Trust National Association, a national banking association, in its
separate capacities as Trustee (as defined below), as Collateral Agent (together
with its successors and permitted assigns in such capacity, the "Collateral
Agent"), for the benefit of the holders of all senior secured notes (the "Senior
Secured Notes") issued pursuant to the Indenture (as defined below) and the
other Secured Parties (as defined below), and as securities intermediary
(together with its successors and permitted assigns in such capacity, the
"Securities Intermediary").
RECITALS
A. The Issuer leases and operates an 80 megawatt (net) natural gas fired
simple cycle cogeneration facility, including an electric transmission line, a
9.5 mile gas pipeline and certain easements (the "Project"), located on the
campus of Syracuse University in Syracuse, New York.
B. The Issuer will issue the Senior Secured Notes under the Indenture
dated as of the date hereof (the "Indenture") between the Issuer and U.S. Bank
Trust National Association, a national banking association, in its capacity as
Trustee (together with its successors and permitted assignees in such capacity
the "Trustee").
C. Pursuant to the Indenture, the Issuer will use the proceeds of the
Senior Secured Notes for the purposes and in the amounts described in the
Indenture.
D. The Senior Secured Notes will be secured by a senior first priority
Lien on substantially all of the assets of the Issuer and a pledge of the
partnership interests in the Issuer.
E. The Trustee desires to appoint the Collateral Agent to administer money
deposited in the various accounts established pursuant to this Depositary
Agreement and funded with, among other things, revenues received by the Issuer
from the Project and proceeds of insurance and condemnation and the Issuer
consents to such appointment.
AGREEMENT
In consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
Definitions
Section 1.01. Capitalized Terms. Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to them in the indenture.
Section 1.02. Definitions, Construction. For all purposes of this
Depositary Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
(a) all terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular;
(b) all references in this Depositary Agreement to designated "Articles,"
"Sections," "Exhibits" and other subdivisions are to be designated Articles,
Sections, Exhibits and other subdivisions of this Depositary Agreement;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Depositary Agreement as a whole and not to any
particular Article, Section or other subdivision;
(d) unless otherwise expressly specified, any agreement, contract or
document defined or referred to herein shall mean such agreement, contract or
document as in effect as of the date hereof, as the same may thereafter be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof and the Indenture and the other Financing
Documents and including any agreement, contract or document in substitution or
replacement of any of the foregoing;
(e) unless the context clearly intends to the contrary, pronouns having a
masculine or feminine gender shall be deemed to include the other;
(f) unless otherwise specified, all references to the credit ratings of
any person shall mean those assigned to the senior unsecured long-term debt
securities of such person without third-party credit enhancement, and any rating
assigned to any other debt security of such person shall be disregarded; and
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(g) any reference to any Person shall include its successors and assigns.
"Account Collateral" has the meaning specified in Section 2.03 hereof.
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"Accounts" has the meaning specified in Section 2.02.
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"Administrative Costs" means all obligations of the Issuer, now or
hereafter existing, to pay administrative fees, costs and expenses to any
trustee or agent of the holders of the Senior Secured Notes, including the
Collateral Agent, the Securities Intermediary and the Trustee (including,
without limitation, the reasonable fees and expenses of counsel, agents and
experts).
"Allocation Certificate" means each certificate provided by the Issuer or
the Trustee, as applicable, setting forth the allocation of Loss Proceeds,
Eminent Domain Proceeds, Title Event Proceeds, or cash proceeds resulting from
liquidation of the Collateral (to the extent the Obligations of such Holders of
the Senior Secured Notes may be redeemed or prepaid from such amounts under the
Indenture).
"Canadian Hunter" means Canadian Hunter Exploration Ltd., an Alberta,
Canada corporation.
"Capital Expenditure Reserve Account" means the Account of such name
established pursuant to Section 2.02.
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"Capital Expenditure Reserve Required Balance" means an amount equal to:
(1) the aggregate Capital Expenditures budgeted for the next succeeding
twelve-month period (A) as approved by the Independent Engineer and delivered to
the Trustee and the Collateral Agent at least annually and (B) as adjusted by
management and set forth in an Officers' Certificate delivered to the Trustee
and the Collateral Agent six (6) months following each budget approved by the
Independent Engineer plus
(2) $3.5 million until such time as a life extension program for the Steam
Plant is approved by the Issuer and the Independent Engineer, at which time the
portion of the Capital Expenditures Reserve Required Balance required by this
clause (2) shall be reduced to an amount equal to the discounted present value
of the Capital Expenditures contemplated by the approved life extension program
for the Steam Plant (or, in the event of a dispute between the two, the Required
Capital Expenditure Reserve Balance shall be reduced to the discounted present
value of the Capital Expenditures
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contemplated by the life extension program approved by the Independent Engineer
and then, if the net present value of the Capital Expenditures contemplated by
the life extension program approved by a third party pursuant to expedited
dispute resolution procedures set forth in Section 6.14 hereof, is lower, the
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Required Capital Expenditure Reserve Balance shall be further reduced to such
lower amount).
"Contract Termination Event" means:
(i) the occurrence of an early termination event (whether by default
or otherwise) under the Indexed Swap Agreement with respect to which
Niagara Mohawk is required to make a termination payment under the Indexed
Swap Agreement to the Issuer; or
(ii) any event of force majeure under, or the termination of, the Gas
Purchase Agreement with respect to which Canadian Hunter is required to
refund or repay any portion of the lump-sum payment corresponding to the
unused portion of the Maximum Entitlement (as defined in the Gas Purchase
Agreement).
"Creditors" means the Trustee, the Collateral Agent and the Securities
Intermediary.
"Debt Service Coverage Ratio" means for any period, without duplication,
the ratio of (i) the sum of (A) all revenues (including interest and fee income
but excluding any insurance proceeds and all other similar non-recurring
receipts) of the Issuer for such period, minus (B) the aggregate amount of
Operating and Maintenance Costs of the Issuer for such period, minus (C) all
Capital Expenditures during such period, to (ii) the sum of (A) all principal,
premium (if any) and interest payable with respect to Permitted Indebtedness
outstanding for such period, plus (B) the aggregate amount of overdue principal,
premium (if any) and interest payments owed with respect to Permitted
Indebtedness outstanding from previous periods; all as determined on a cash
basis in accordance with GAAP.
"Debt Service Reserve Account" means the Account of such name established
pursuant to Section 2.02.
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"Debt Service Reserve Letter of Credit" one or more irrevocable, direct pay
letters of credit issued by the Debt Service Reserve LOC Provider in favor of
the Collateral Agent where the account party is not the Issuer.
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"Debt Service Reserve LOC Provider" means any commercial bank(s) or
financial institution(s) issuing the Debt Service Reserve Letter of Credit,
which institution shall be rated not less than A by S&P and A2 by Xxxxx'x.
"Debt Service Reserve Required Balance" means, on the Closing Date,
$6,200,000, and thereafter an amount equal to the aggregate amount of the
principal and interest due on the Senior Secured Notes on the next succeeding
semi-annual scheduled payment date.
"Distribution Account" means the Account of such name established pursuant
to Section 2.02.
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"Distribution Suspense Account" means the Account of such name established
pursuant to Section 2.02.
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"Funding Date" means any day from the 10th through the 15th day of each
month, as determined by the Issuer in an officer's certificate received by the
Collateral Agent at least three (3) Business Days prior to such Funding Date,
provided that there shall only be a single Funding Date for any month (except in
the case of an immediate need to pay Operating and Maintenance Costs referred
to below), or if no earlier date is so determined, then the 15th day of each
month, or in each case if such day is not a Business Day the next succeeding
Business Day, or in the case of an immediate need to pay Operating and
Maintenance Costs, any Business Day of the month; provided that notice of such
funding shall have been provided to Collateral Agent at least one Business Day
prior to such Funding Date.
"Gas Purchase Agreement" means (i) the Restated Gas Sale and Purchase
Agreement dated as of March 18, 1991, between POA and Noranda, which was
assigned by Noranda to, and assumed by, Canadian Hunter pursuant to an
Assignment, Amendment and Release Agreement dated on or prior to the Closing
Date among Noranda, Canadian Hunter and Orange L.P. and (ii) the agreements
between Orange L.P. and Canadian Hunter and UPR, respectively, to be entered
into in replacement of the Restated Gas Sale and Purchase Agreement in
accordance with the terms of a letter agreement dated on or prior to the Closing
Date among Orange L.P., Canadian Hunter and UPR as in effect on the date hereof.
"Gas Reserve Account" means the Account of such name established pursuant
to Section 2.02.
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"Gas Reserve Deficit" means, at any time, the amount that equals (i) the
amount of gas necessary, in the judgment of the Independent Engineer, to operate
the
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Project through the Final Maturity Date so that electric output of the Project
for such period will average at least 663,000 MWh per year and the Issuer can
meet its obligations to deliver steam under the Steam Contract, less (ii) the
sum of (A) the "Unconsumed Entitlement" (as such term is used in the Gas
Purchase Agreement) at such time plus (B) the unconsumed quantity, at such time,
of any natural gas (in addition to the Unconsumed Entitlement), purchased and
paid for by the Issuer and as to which transportation pursuant to arrangements
approved by the Independent Engineer as being consistent with prudent industry
practice are in place plus (C) the Btu equivalent of energy and associated
capacity that the Issuer has purchased the right to acquire in connection with
permitted sales of natural gas as described in Section 4.18 of the Indenture.
"Gas Reserve Required Balance" means, at any time, the amount equal to the
Gas Reserve Deficit at such time multiplied by the highest average "Niagara
Border Spot Price" for natural gas (delivered to pipe as stated in U.S. dollars)
at any time during the previous twelve (12) months in the weekly Canadian Price
Report published by Natural Gas Week (on an MMBtu basis).
"Indemnified Party" has the meaning specified in Section 5.02.
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"Indexed Swap Agreement" means the ISDA Master Agreement and the related
Confirmation each dated as of June 30, 1998 between Orange L.P. and Niagara
Mohawk.
"Interest Account" means the Account of such name established pursuant to
Section 2.02.
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"Interest Payment Date" means each March 15 and September 15 commencing
March 15, 2000 and concluding on the Final Maturity Date.
"Loss Proceeds Account" means the Account of such name established pursuant
to Section 2.02.
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"Niagara Mohawk" means the Niagara Mohawk Power Corporation, a New York
corporation.
"Non-Budgeted Operating and Maintenance Costs Certificate" has the meaning
specified in Section 3.01.
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"O&M Agreement" means (i) the Cogeneration Facility Operation and
Maintenance Agreement dated as of November 1, 1998 between Orange L.P. and
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Operator and (ii) any subsequent operation and maintenance agreement entered
into by POA with the Operator having terms and conditions that are, in the
opinion of the Independent Engineer, reasonable and customary for agreements of
its type and which are consistent with prudent industry practice.
"Operating and Maintenance Costs" means, for any periods, all amounts
disbursed by or on behalf of the Issuer for operation, maintenance (excluding
Capital Expenditures), administration, repair, or improvement of the Project,
including, without limitation, premiums on insurance policies, property and
other taxes, payments under the relevant Lease Documents and under agreements,
or options, to purchase energy and associated capacity in connection with
permitted sales of natural gas, operating and maintenance agreements, leases,
royalty and other land use agreements and fees, expenses, and any other payments
required under the Project Documents (excluding Subordinated Asset Management
Charges).
"Operator" means General Electric International, Inc., a Delaware
corporation, or such other Person with technical expertise and industry standing
of at least that of General Electric International, Inc. as the operator of the
Project pursuant to the O&M Agreement.
"Payment Date" means any Interest Payment Date or Principal Payment Date.
"Permitted Investments" means an Investment in any of the following:
(1) direct obligations of the Department of the Treasury of the United
States of America;
(2) obligations, representing full faith and credit of the United States of
America, of any of the following federal agencies: Export-Import Bank, Farmers
Home Administration, General Services Administration, U.S. Maritime
Administration, Small Business Administration, Government National Mortgage
Association (GNMA), U.S. Department of Housing & Urban Development (PHA's) and
Federal Housing Administration;
(3) obligations issued or fully guaranteed by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof and, at the time of the acquisition, having one of the
two highest ratings obtainable from either S&P's or Xxxxx'x;
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(4) certificates of deposit and Eurodollar time deposits, bankers'
acceptances and overnight bank deposits, in each case with any domestic or
foreign commercial bank having capital and surplus in excess of $250.0 million;
(5) notes, bonds, collateralized mortgage obligations or other evidences
of indebtedness rated "AAA" by S&P's and "Aaa" by Xxxxx'x issued by the Federal
Home Loan Bank, the Federal National Mortgage Association or the Federal Home
Loan Mortgage Corporation;
(6) commercial paper rated in any one of the two highest rating
categories by Xxxxx'x or S&P's;
(7) investment agreements with banks (foreign and domestic),
broker/dealers, and other financial institutions rated at the time of bid in any
one of the three highest rating categories by Xxxxx'x and S&P's;
(8) repurchase agreements with banks (foreign and domestic),
broker/dealers, and other financial institutions rated at the time of bid in any
one of the three highest rating categories by Xxxxx'x and S&P's, provided, (a)
collateral is limited to the securities specified in clauses (1) through (5)
above, (b) the margin levels for collateral must be maintained at a minimum of
102% including principal and interest, (c) the Trustee shall have a first
perfected security interest in the collateral, (d) the collateral will be
delivered to a third party custodian, designated by the Issuer, acting for the
benefit of the Trustee and all fees and expenses related to collateral custody
will be the responsibility of the Issuer, (e) the collateral must have been or
will be acquired at the market price and marked to market weekly and collateral
level shortfalls cured within 24 hours, (f) unlimited right of substitution of
collateral is allowed provided that substitution of collateral must be permitted
collateral substituted at a current market price and substitution fees of the
custodian shall be paid by the Issuer;
(9) asset-backed securities having the highest rating obtainable from
either S&P's or Xxxxx'x;
(10) forward purchase agreements delivering securities specified in
clauses (1) and (6) above with banks (foreign and domestic), broker/dealers, and
other financial institutions maintaining a long-term rating on the day of bid no
lower than investment grade by both S&P's and Xxxxx'x (such rating may be at
either the parent or subsidiary level); and
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(11) money market funds rated "AAAm" or "AAAm-G" or better by S&P's and
other financial funds investing exclusively in investments of the types
described in clauses (1) through this clause (11) of this definition.
"Principal Account" means the Account of such name established pursuant to
Section 2.02.
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"Principal Payment Date" hen used with respect to any Senior Secured Note
means the date on which all or a portion of the principal of such Senior Secured
Note becomes due and payable as provided therein or in this Indenture, whether
on a scheduled date for payment of principal at a Redemption Date, the Final
Maturity Date, a date of declaration of acceleration, or otherwise.
"Project Revenues" means all income and receipts of the Issuer derived from
the ownership or operation of the Project, including payments due the Issuer
under the Niagara Mohawk Agreements, the Canadian Hunter Agreements or the O&M
Agreement, proceeds of any business interruption or other insurance, income
derived from the sale or use of electric energy or steam transmitted or
distributed by the Project, together with any receipts derived from the sale of
natural gas and any other property pertaining to the Project or incidental to
the operation of the Project, all as determined in conformity with cash
accounting principles, the investment income on amounts in the Accounts
established under the Depositary Agreement, the proceeds of any insurance or
condemnation awards relating to the Project and proceeds from the Collateral
Documents, and any payments to the Issuer (to the extent not included within
other items listed in this definition) under the Master Lease, but not including
sums paid to the Issuer in satisfaction of a contractual obligation to indemnify
the Issuer for third party liability to the extent such sums do not exceed the
actual damage, loss or cost suffered by the Issuer in connection therewith.
"Redemption Account" means the Account of such name established pursuant to
Section 2.02.
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"Requisition" means a Non-Budgeted Operating and Maintenance Costs
Certificate, a Restoration Requisition or a Title Event Requisition.
"Reserve Account" means the Capital Expenditure Reserve Account, the Debt
Service Reserve Account and the Gas Reserve Account.
"Responsible Officer" means, (i) with respect to knowledge of any default
under the Indenture, the chief executive officer, president, managing member,
managing partner, chief financial officer, general counsel, principal accounting
officer, treasurer, or
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any vice president of the Issuer or the General Partner, as applicable, or other
officer of such corporation who in the normal performance of his or her
operational duties would have knowledge of the subject matter relating to such
default or (ii) with respect to the Asset Manager, the chief executive officer,
president, chief financial officer, general counsel, principal accounting
officer, treasurer, or any vice president of the Asset Manager, or other officer
of such corporation who in the normal performance of his or her operational
duties would have knowledge of the subject matter relating to the performance by
the Asset Manager of its obligations under the Asset Management Agreement.
"Restoration Budget" has the meaning specified in Section 3.10.
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"Restoration Progress Payment Schedule" has the meaning specified in
Section 3.10.
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"Restoration Requisition" has the meaning specified in Section 3.10.
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"Restoration Sub-Account" means the Account of such name established
pursuant to Section 2.02.
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"Revenue Account" means the Account of such name established pursuant to
Section 2.02.
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"Secured Obligations" means all amounts owing to the Secured Parties
pursuant to the terms of the Indenture, the Senior Secured Notes and the
Collateral Documents, including, without limitation: (a) the principal, premium,
if any, or interest on the Senior Secured Notes (including any interest accruing
after the commencement of any bankruptcy or insolvency proceeding relating to
the Issuer, whether or not such interest is allowed or allowable as a claim in
any such proceeding), and all other obligations and liabilities of the Issuers
including, without limitation, indemnities, fees and interest incurred under,
arising out of or in connection with the Indenture, the Senior Secured Notes and
the Collateral Documents, (b) any and all sums advanced by or on behalf of the
Issuers in order to preserve the Collateral or preserve its interest in the
Collateral, and (c) in the event of any proceeding for collection or enforcement
by or on behalf of any Secured Party after an Event of Default shall have
occurred and be continuing and unwaived, the expenses of retaking, holding,
preparing for sale or lease, selling or otherwise disposing of or realizing on
the Collateral, or of any exercise by or on behalf of any Secured Party of its
rights under the Indenture, the Senior Secured Notes and the Collateral
Documents, together with attorneys' fees and court costs.
"Secured Parties" means the Holders, the Trustee, the Collateral Agent.
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"Stipulation" means the Stipulation dated November 14, 1994 and Order of
the Bankruptcy Court dated December 8, 1994 among Kronish Xxxx, Xxxx Xxxxxx and
GAS LP.
"Stipulation Reserve Account" means the Account of such name established
pursuant to Section 2.02.
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"Subordinated Asset Management Fees" means fees and other amounts payable
to the Asset Manager pursuant to the Asset Management Agreements and the Asset
Manager Consent and Agreement.
"Subordinated Asset Management Fee Account" means the Account of such name
established pursuant to Section 2.02.
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"Title Company" means Ticor Title Insurance Company.
"Title Event" means the existence of any defect of title or lien or
encumbrance on the Project (other than certain Permitted Liens) in effect on the
Closing Date that entitles the Collateral Agent to make a claim under the policy
or policies of title insurance issued to it pursuant to the Financing Documents
or that entitles the Issuer to make a claim under any policy or policies of
title insurance held by it.
"Title Event Requisition" has the meaning specified in Section 3.10.
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"Title Event Sub-Account" means the Account of such name established
pursuant to Section 2.02.
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"Title Policy" means the policy or policies of title insurance required
pursuant to the Indenture.
"Trigger Event Date" has the meaning specified in Section 3.15.
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"UPR" means Union Pacific Resources Inc.
"Withdrawal Certificate" shall mean a certificate signed by a Responsible
Officer of the Issuer, or in the case of a withdrawal from the Revenue Account
to pay Operating and Maintenance Costs or from the Capital Expenditures Reserve
Account to pay Capital Expenditures or from the Gas Reserve Account, signed by a
Responsible Officer of the Asset Manager.
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Article 2
Establishment of Accounts
Section 2.01. Acceptance of Appointment as Collateral Agent.
(a) U.S. Bank Trust National Association hereby agrees to act as
Collateral Agent and to accept all cash, payments, other amounts and Permitted
Investments to be delivered to or held by the Collateral Agent pursuant to the
terms of this Depositary Agreement and the Indenture. The Collateral Agent
shall hold and safeguard the Accounts during the term of this Depositary
Agreement and shall treat the cash, instruments and notices in the Accounts as
monies, instruments and securities pledged by the Issuer to the Collateral Agent
for the benefit of the Secured Parties to be held in the custody of the
Collateral Agent, in accordance with the provisions of this Depositary
Agreement. Until such time as the Secured Obligations have been fully repaid
or, provision for such payment has been made in accordance with the provision of
the Indenture, in performing its functions and duties under this Depositary
Agreement, the Collateral Agent shall act solely as agent for the Secured
Parties and, except in such capacity, does not assume and shall not be deemed to
have assumed any obligation toward or relationship of agency or trust with or
for the Issuer.
(b) The Issuer shall not have any rights against or to monies held in
the Accounts, as third party beneficiary or otherwise, except the right to
receive or make requisitions of monies held in the Accounts, as permitted by
this Depositary Agreement and the Indenture, and to direct the investment of
monies held in the Accounts as permitted by Section 3.12.
Section 2.02. Establishment of Funds and Sub-funds. The Collateral
Agent hereby establishes the following accounts (the "Accounts") in the form of
non-interest bearing trust accounts and sub-accounts thereof, which shall be
maintained at all times until the termination of this Depositary Agreement:
(a) Revenue Account;
(b) Principal Account;
(c) Interest Account;
(d) Debt Service Reserve Account;
(e) Gas Reserve Account;
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(f) Capital Expenditure Reserve Account;
(g) Subordinated Asset Management Fee Account;
(h) Distribution Account;
(i) Distribution Suspense Account;
(j) Loss Proceeds Account;
(k) Stipulation Reserve Accounts; and
(l) Redemption Account.
The accounts referred to in clauses (b), (c), (h) and (i) are not required
to be separate accounts but may be maintained as sub-accounts of the Revenue
Account. For administrative purposes, the Collateral Agent shall be permitted
to establish sub-accounts as separate non-interest bearing trust accounts.
The following two sub-accounts are hereby established and created within
the Loss Proceeds Accounts:
(i) Restoration Sub-Account; and
(ii) Title Event Sub-Account.
The following sub-account is hereby established and created within the
Redemption Account:
(i) Mandatory Redemption Sub-Account.
Certain additional sub-accounts within certain of the Accounts may be
established and created from time to time in accordance with this Depositary
Agreement.
All amounts from time to time held in each Account shall be held (a) in the
name of the Collateral Agent for the benefit of the Secured Parties, and (b) in
the sole custody and control of the Collateral Agent for the purposes and on the
terms set forth in this Depositary Agreement and the Indenture and all such
amounts shall constitute a part of the Collateral and shall not constitute
payment of any Secured Obligation or any other obligation of the Issuer until
applied as hereinafter provided.
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In addition to the Accounts, the Issuer may establish, fund and maintain
other accounts ("Excluded Accounts") with any bank, securities brokerage firm,
or financial institution, provided that such accounts are funded exclusively
with one or more of the following: (i) funds contributed to the Issuer by any
Partner, (ii) funds lent to the Issuer that constitute Permitted Indebtedness,
(iii) funds which have been properly released or otherwise properly paid to the
Issuer pursuant to the terms of this Agreement, (iv) pending the release
thereof, cash collateral subject to a Lien in favor of a person other than the
Collateral Agent that is permitted pursuant to the Indenture and/or (v) any
interest or other income earned on any of the Excluded Accounts. All Excluded
Accounts shall be free of any Liens and security interests in favor of the
Collateral Agent and/or the Secured and shall be free of any and all operating
restrictions and investment restrictions imposed under this Agreement, subject
to the requirement that monies released to an Excluded Account to provide for
the payment of Operating and Maintenance Costs and Capital Expenditures shall be
so used.
Section 2.03. Security Interest. As collateral security for the prompt and
complete payment and performance when due of all its Secured Obligations, the
Issuer hereby pledges, assigns, hypothecates and transfers to the Collateral
Agent, and hereby grants to the Collateral Agent for the benefit of the Secured
Parties a Lien on and security interest in and to, (i) each Account and (ii) all
cash, investments and securities at any time on deposit in any Account,
including all income or gain earned thereon and any proceeds thereof
(collectively, the "Account Collateral"). The Collateral Agent is the agent of
the Trustee for the purpose of receiving payments contemplated hereunder and for
the purpose of perfecting the Lien of the Trustee for the benefit of the Secured
Parties in and to the Accounts and all cash, investments and securities and any
proceeds thereof at any time on deposit in the Accounts; provided that the
Collateral Agent shall not be responsible to take any action to perfect such
Lien except through the performance of its express obligations hereunder or upon
the written direction of the Trustee complying with this Depositary Agreement.
Each of the Accounts shall at all times be in the exclusive possession of, and
under the exclusive domain and control of, the Collateral Agent, as agent for
the Trustee.
Section 2.04. Termination. This Depositary Agreement shall remain in full
force and effect until the later of (i) the date on which all the Secured
Obligations have been fully paid or, provision for such payment has been made in
accordance with the provisions of the Indenture, (ii) the termination for the
Indenture pursuant to Article 8 thereof, and (iii) the date on which the actions
contemplated by Section 313(b) have been taken.
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14
Article 3
The Funds
Section 3.01. Revenue Account.
(a) The following amounts shall (subject to Section 3.08 hereof) be
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deposited into the Revenue Account directly, in accordance with this Section
3.01(a):
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(i) all Project Revenues;
(ii) to the extent amounts in any Reserve Account equal the balance
required to be maintained therein under this Depositary Agreement, the
income, if any, from the investment of the monies in such Account pursuant
to Section 3.12; and
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(iii) all amounts required to be transferred to the Revenue Account
from any other Account as contemplated under this Depositary Agreement.
If any of the foregoing amounts required to be deposited with the Collateral
Agent in accordance with the terms of this Depositary Agreement are received by
the Issuer (or any Affiliate of the Issuer), the Issuer shall (or shall cause
any such Affiliate to) hold such payments in trust for the Collateral Agent and
shall promptly remit such payments to the Collateral Agent deposit in the
Revenue Account, in the form received, with any necessary endorsement.
(b) In the event the Collateral Agent receives monies without adequate
instruction with respect to the proper Account in which such monies are to be
deposited, the Collateral Agent shall deposit such monies into the Revenue
Account and segregate such monies from all other amounts on deposit in the
Revenue Account and notify the Issuer of the receipt of such monies. Upon
receipt of written instructions from the Issuer, the Collateral Agent shall
transfer such monies from the Revenue Account to the Account specified by such
instructions (other than the Distribution Account or the Distribution Suspense
Account).
(c) The Issuer hereby irrevocably authorizes and directs the Collateral
Agent to make withdrawals and transfers of monies on each Funding Date (via wire
transfer or by internal transfer between Accounts and/or sub-accounts, if
applicable) to the extent then available in the Revenue Account, upon the
delivery of a Withdrawal Certificate of the Issuer (or any of its duly
authorized agents for such purposes) to the Collateral Agent three Business Days
prior to the Funding Date setting forth the amounts to be withdrawn from the
Revenue Account and the amounts to be transferred pursuant to his
15
clause (c) pursuant to the terms of this Depositary Agreement in the following
order of priority all in accordance with such Withdrawal Certificate:
(i) First: As and when required, to pay when due the amount of
Operating and Maintenance Costs of the Issuer (or to provide for the
payment when due by transfer to an Excluded Account from which the Issuer
shall pay Operating and Maintenance Costs) as set forth in a Withdrawal
Certificate and certified in such Withdrawal Certificate to be the good
faith estimate of the amounts payable for Operating and Maintenance costs
during the period commencing on the first day of the next calendar month
and ending on the last day of such month, and stating that the proviso
immediately below does not apply to such withdrawal; provided that if the
aggregate cumulative Operating and Maintenance Costs of the Issuer in any
fiscal year, including the amounts set forth in such Withdrawal
Certificate, either exceed or fall short of the aggregate cumulative
projected Operating and Maintenance Costs in the applicable annual
Operational Budget of the Issuer by more than 10%, then no amounts may be
withdrawn on behalf of the Issuer to pay such Operating and Maintenance
Costs that exceed or fall short of the Operating and Maintenance Costs in
the Operating Budget by more than 10% unless there shall be filed with the
Collateral Agent:
(A) a certificate of the Issuer substantially in the form
attached hereto as Exhibit A (the "Non-Budgeted Operating and
Maintenance Costs Certificate") including, without limitation, a
representation that such additional non-budgeted (or reduced under-
budget) costs are reasonably designed to permit (or shall not
adversely affect the ability of) the Issuer to satisfy its obligations
in respect of the Secured Obligations and maximize its revenue and net
income; and
(B) an Independent Engineer's Certificate, in substantially the
form attached as Appendix I to Exhibit A, dated not more than three
Business Days prior to such requested Funding Date, certifying that
the excess (or reduced) Operating and Maintenance Costs are prudent
and reasonable (except to the extent that Permitted Indebtedness other
than Indebtedness described in clause (i) of the definition of
Permitted Indebtedness as set forth in the Indenture is otherwise
available to pay such Costs);
(ii) Second: After making each applicable withdrawal and transfer
specified in clause (i) above, withdraw and transfer from the Revenue
Account, to the Trustee and the Collateral Agent, any amounts set forth in
a Withdrawal
16
Certificate of the Issuer then due and payable to each of them as
Administrative Costs; provided, however, that if funds in the Revenue
Account are insufficient on any date to make the payments specified in this
clause (ii), distribution of funds shall be made ratably to the specified
receipts based on the respective amounts owed such recipients;
(iii) Third: After making each applicable withdrawal and transfer
specified in clauses (i) and (ii) above, transfer an amount set forth in a
Withdrawal Certificate of the Issuer from the Revenue Account (A) to the
Interest Account an amount which, together with the amount then in such
Account, equals all of the interest due or becoming due on the Senior
Secured Notes on the next succeeding Interest Payment Date; (B) to the
Principal Account an amount which, together with the amount then in such
Account, equals all of the principal and premium (if any) due or becoming
due on the Senior Secured Notes on the next succeeding Principal Payment
Date; (C) to a sub-account within the Principal Account an amount which,
together with the amounts then in such sub-account, equals all of the
principal due or becoming due on any Permitted Indebtedness other than the
Senior Secured Notes within the succeeding six-month period; and (D) to a
sub-account within the Interest Account an amount which, together with the
amounts then in such sub-account, equals all of the interest due or
becoming due on any Permitted Indebtedness other than the Senior Secured
Notes within the succeeding six month period; provided, however, that if
monies in the Revenue Account are insufficient on any date to make the
transfers specified in this clause (iii), distribution of monies shall be
made, first, ratably to the Accounts referred to in clauses (A) and (B) of
this paragraph Third based on the respective amounts owed such Accounts and
second, ratably to the Accounts referred to in clauses (C) and (D) of this
paragraph Third based on the respective amounts owed such Accounts;
(iv) Fourth: After making each applicable withdrawal and transfer
specified in clauses (i) through (iii) above, transfer, if the amount
available to be drawn under any Debt Service Reserve Letter of Credit is
less than the Debt Service Reserve Required Balance, to the Debt Service
Reserve Account so that the sum of the amount available to be drawn under
the Debt Service Reserve Letter of Credit plus the balance in the Debt
Service Reserve Account equals the Debt Service Reserve Required Balance;
(v) Fifth: After making each applicable withdrawal and transfer
specified in clauses (i) through (iv) above, transfer to the Gas Reserve
Account an amount necessary to cause the balance thereof to be equal to the
Gas Reserve Required Balance;
17
(vi) Sixth: After making each applicable withdrawal and transfer
specified in clauses (i) through (v) above, transfer to the Capital
Expenditure Reserve Account, an amount necessary to cause the balance
thereof to be equal to the Capital Expenditure Reserve Required Balance;
(vi) Seventh: After making each applicable withdrawal and transfer
specified in clauses (i) through (vi) above, transfer to the Subordinated
Asset Management Fee Account an amount necessary for the payment of
Subordinated Asset Management Fee then due and owing;
(vi) Eighth: After making each applicable withdrawal and transfer
specified in clauses (i) through (vii) above, transfer any remaining
amounts to the Distribution Account; and
(ix) Ninth: After making each applicable withdrawal and transfer
specified in clauses (i) through (viii) above, transfer, any amounts in the
Distribution Account which cannot be distributed because of the failure to
satisfy certain conditions to distributions, to the Distribution Suspense
Account.
Section 3.02. Principal Account.
(a) Except as otherwise provided in this Depositary Agreement, monies
deposited in the Principal Account on any Funding Date shall be allocated
ratably among sub-accounts of the Principal Account established for payment of
the principal and premium, if any, with respect to the Senior Secured Notes and
any other outstanding Permitted Indebtedness when due and payable (whether at
the Principal Payment Date or otherwise).
(b) On any date that amounts for the payment of principal of and premium,
if any, on the Senior Secured Notes and any other outstanding Permitted
Indebtedness are due and payable and for which a Withdrawal Certificate has been
delivered in accordance with Section 3.01(c) (or if such day is not a Business
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Day, then on the next succeeding Business Day), the Collateral Agent shall
withdraw the monies on deposit in the relevant sub-account of the Principal
Account, and remit such monies to the Persons entitled thereto for the payment
of such principal and premium, if any; provided, however, that the Collateral
Agent shall segregate such amounts from any other amounts on deposit in the
Principal Account until such time as payment is made to Persons entitled
thereto.
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(c) In the event that monies in the Principal Account exceed the amount
of money required by this Depositary Agreement to be deposited therein, the
Collateral Agent shall transfer such excess monies from the Principal Account to
the Revenue Account on the Business Day following the next Funding Date.
Section 3.03. Interest Account.
(a) Except as otherwise provided in this Depositary Agreement, monies
deposited in the Interest Account on any Funding Date shall be allocated ratably
among sub-accounts of the Interest Account established for the payment of
interest on (i) the Senior Secured Notes and (ii) any other outstanding
Permitted Indebtedness based on the interest with respect to the Senior Secured
Notes or such other outstanding Permitted Indebtedness when due and payable
(whether at the Interest Payment Date or otherwise).
(b) On any date that amounts for the payment of interest on the Senior
Secured Notes and any other Permitted Indebtedness are due and payable and for
which a Withdrawal Certificate has been delivered in accordance with Section
3.01(c) (or if such day is not a Business Day, then on the next succeeding
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Business Day), the Collateral Agent shall withdraw the monies on deposit in the
relevant sub-account of the Interest Account, and remit such monies to the
Persons entitled thereto for the payment of such interest, as requisitioned
pursuant to Section 3.01(c); provided, however, that the Collateral Agent shall
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segregate such amounts from any other amounts on deposit in the Interest Account
until such time as payment is made to Persons entitled thereto.
(c) In the event that monies in the Interest Account exceed the amount
of money required by this Depositary Agreement to be deposited therein, the
Collateral Agent shall transfer such excess monies from the Interest Account to
the Revenue Account on the Business Day following the next Funding Date.
Section 3.04. Debt Service Reserve Account.
(a) The Debt Service Reserve Account shall be funded as of the date of
this Depositary Agreement with proceeds from the sale of the Senior Secured
Notes in the amount equal to the Debt Service Reserve Required Balance. At any
time thereafter, the Issuer may replace amounts in the Debt Service Reserve
Account with a Debt Service Reserve Letter of Credit having a stated amount
equal to the amount being withdrawn from the Debt Service Reserve Account. These
deposits, in conjunction with the Debt Service Reserve Letter of Credit, if any,
will be available to the Collateral Agent to transfer to the applicable Account
in the event the Revenue Account, the
19
Principal Account and the Interest Account lack sufficient funds on a Payment
Date to meet payments of principal, premium, if any and interest on the Senior
Secured Notes.
(b) If Issuer elects to replace amounts in the Debt Service Reserve
Account with a Debt Service Reserve Letter of Credit, Issuer shall provide to
the Collateral Agent an unconditional, irrevocable direct-pay letter of credit,
issued in a stated amount equal to the amount replaced in the Debt Service
Reserve Account. The Debt Service Reserve Letter of Credit shall be for the
benefit of the Collateral Agent, naming the Collateral Agent, on behalf of the
Trustee and the holders of the Senior Secured Notes as the beneficiary and
containing customary terms and provisions, including a provision that (i) such
letter of credit shall automatically renew upon the expiration thereof unless,
at least sixty (60) days prior to such expiration, the issuer thereof shall
provide the Collateral Agent with a notice of non-renewal of such letter of
credit and (ii) there are no conditions to drawing other than that any documents
required to be delivered in connection therewith comply on their face with the
requirements thereof.
(c) At any time that the sum of the amount available to be drawn under
the Debt Service Reserve Letter of Credit plus the amount then on deposit in the
Debt Service Reserve Account is less than the Debt Service Reserve Required
Balance, funds shall be accumulated in the Debt Service Reserve Account from
cash available from, and in the following order of priority:
(i) transfers from the Revenue Account, as provided under Section
3.01(c);
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(ii) net interest, if any, earned on amounts deposited in the Debt
Service Reserve Account; and
(iii) amounts then on deposit in the Subordinated User Charge
Account.
(d) In the event that the Debt Service Reserve Required Balance is
reached, (i) all interest income on amounts in the Debt Service Reserve Account
and other amounts in excess of the Debt Service Reserve Required Balance shall
be transferred, on a daily basis, to the Revenue Account and (ii) the sum of the
amount available to be drawn under the Debt Service Reserve Letter of Credit may
be reduced so long as the reduced amount available to be drawn under the Debt
Service Reserve Letter of Credit plus the amount then on deposit in the Debt
Service Reserve Account is equal to or greater than the Debt Service Reserve
Required Balance.
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(e) In addition to and without limiting the foregoing, the Debt Service
Reserve Letter of Credit (i) shall have an initial expiration date of at least
one (1) year beyond the date of issuance, (ii) except as set forth in Section
3.02(b) or Section 3.03(b), shall not obligate the Collateral Agent to make any
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reimbursement or any other payment to the issuer or otherwise with respect
thereto, or provide the issuer or any other Person with any claim against the
Collateral Agent, the Trustee or the holders of the Senior Secured Notes,
whether for costs of maintenance, reimbursement of amounts drawn thereunder or
otherwise and (iii) shall be issued by a financial institution whose long-term
debt is rated at least "A" or equivalent by S&P and Xxxxx'x.
Section 3.05. Gas Reserve Account. (a) The Gas Reserve Account shall be
funded in accordance with the provisions set forth in Section 3.05(b) of this
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Depositary Agreement. Funds in the Gas Reserve Account shall be transferred to
the Revenue Account as set forth in a Withdrawal Certificate and as certified in
such Withdrawal Certificate to be the good faith estimate of full costs payable
by the Issuer within the 30 days following such transfer.
(b) At any time that the sum of the amount on deposit in the Gas Reserve
Account is less than the Gas Reserve Required Balance, funds shall be
accumulated in the Gas Reserve Account from cash available from, and in the
following order of priority:
(i) transfer from the Reserve Account, as provided under Section
3.01(c); and
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(ii) net interest, if any, earned on amounts deposited in the Gas
Reserve Account; and
(iii) amounts then on deposit in the Subordinated Asset Management
Fee Account (after giving effect to any funding of the Debt Service
Reserve Account pursuant to Section 3.04(c)(iii)).
(c) In the event that the Gas Reserve Required Balance is reached, all
interest income on amounts in the Gas Reserve Account and other amounts in
excess of the Gas Reserve Required Balance shall be transferred, on a daily
basis, to the Revenue Account.
Section 3.06. Capital Expenditure Reserve Account.
(a) The Capital Expenditure Reserve Account shall be funded as of the
date of this Depositary Agreement with proceeds from the sale of the Senior
Secured Notes
21
in the amount equal to the Capital Expenditure Reserve Required Balance.
Thereafter, the Capital Expenditure Reserve Account shall be funded from amounts
available therefor pursuant to the priority of payments specified in such
Section 3.01(c) in accordance with (i) the provisions set forth in Section
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3.01(c) of this Depositary Agreement and (ii) the Operating Budget and schedules
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thereto approved by the Independent Engineer prior to the end of each calendar
year (and, in good faith, so as to implement even monthly contributions) or with
such variation from such Operating Budget and schedules as the Issuer certifies
to the Trustee and the Collateral Agent is reasonable and necessary and in
accordance with prudent industry practice. Amounts on deposit in the Capital
Expenditure Reserve Account shall be used for Capital Expenditures for which a
Withdrawal Certificate has been delivered to the Collateral Agent certifying
that such Capital Expenditures are to be made in accordance with prudent
industry practice and the Operating Budget and as may be required pursuant to
the terms of the Indenture.
(b) At any time that the sum of the amount on deposit in the Capital
Expenditure Reserve Account is less than the Capital Expenditure Reserve
Required Balance, funds shall be accumulated in the Capital Expenditure Reserve
Account from cash available from:
(i) transfers from the Revenue Account, as provided under Section
3.01(c);
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(ii) net interest, if any, earned on amounts deposited in the
Capital Expenditure Reserve Account; and
(iii) amounts then on deposit in the Subordinated Asset Management
Fee Account (after giving effect to any funding of the Debt Service
Reserve Account pursuant to Section 3.04(c)(iii) and after giving effect
to any funding of the Gas Reserve Account pursuant to Section
3.05(b)(iii)).
(c) In the event that the Capital Expenditure Reserve Required Balance
is reached, all interest income on amounts in the Capital Expenditure Reserve
Account and other amounts in excess of the Capital Expenditure Required Balance
shall be transferred, on a daily basis, to the Revenue Account; provided,
however, that any such excess arising solely as a consequence of a reduction of
the Capital Expenditure Reserve Required Balance by operation of clause (2) of
the definition thereof shall be transferred as specified in a Withdrawal
Certificate of the Issuer; provided that there shall have been filed with the
Collateral Agent a Certificate of the Independent Engineer or an Independent
Expert (as defined in Section 6.14) certifying as to the amount of such
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reduction.
22
Section 3.07. Subordinated Asset Management Fee Account. The Subordinated
Asset Management Fee Account shall be funded in accordance with the provisions
set forth in Section 3.01(c) of this Depositary Agreement. Funds in the
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Subordinated Asset Management Fee Account shall be used for the payment of
Subordinated Asset Management Fees due and owing under the Asset Management
Agreement as specified in a Withdrawal Certificate of the Issuer.
In addition, funds in the Subordinated User Charge Account shall be
transferred to the Debt Service Reserve Account, the Gas Reserve Account and the
Capital Expenditure Reserve Account under the circumstances set forth in
Sections 3.04, 3.05 and 3.06, respectively, of this Depositary Agreement.
---- ---- ----
Section 3.08. Distribution Account.
(a) On any Business Day that all of the conditions set forth in Section
3.08(b) are satisfied, the Collateral Agent shall make payment from the
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Distribution Account but from no other Account to such Persons as may be
directed in writing by the Issuer; provided that payments from the Distribution
Account shall be made no more frequently than once every six months.
(b) The Distribution Account will be funded from monies transferred from
the Revenue Account after all other then-required amounts have been transferred
as provided in Section 3.01(c). Restricted Payments may be made only from and to
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the extent of monies on deposit in the Distribution Account. Such Restricted
Payments are subject to the prior satisfaction of the following conditions:
(i) the amount then on deposit in the Principal Account shall be
equal to or greater than the aggregate payments of principal and premium,
if any, due on the Senior Secured Notes on the next succeeding Principal
Payment Date and on other outstanding Permitted Indebtedness within the
succeeding six-month period;
(ii) the amount then on deposit in the Interest Account shall be
equal to or greater than the aggregate payments of interest due on the
Senior Secured Notes on the next succeeding Interest Payment Date and on
other outstanding Permitted Indebtedness within the succeeding six-month
period;
(iii) (A) the amount available to be drawn under the Debt Service
Reserve Letter of Credit plus the amount on deposit in the Debt Service
Reserve Account equals or exceeds the Debt Service Reserve Required
23
Balance, (B) the amount on deposit in the Gas Reserve Account equals or
exceeds the Gas Reserve Required Balance and (C) the amount on deposit in
the Capital Expenditure Reserve Account equals or exceeds the Capital
Expenditure Reserve Required Balance;
(iv) no Default or Event of Default under the Indenture shall have
occurred and be continuing;
(v) the Debt Service Coverage Ratio for the most recently ended
four full fiscal quarters for which internal financial statements are
available immediately preceding the date on which such distribution is to
be made (or in the case of any proposed distribution date prior to the
date on which internal financial statements are available for a period of
four full fiscal quarters after the Closing Date, the Debt Service
Coverage Ratio for the period commencing on the Closing Date and ending
on the last date of the most recently ended month for which internal
financial statements are available immediately preceding the date on
which such distribution is to be made) is equal to or greater than 1.40
to 1 in the opinion of the Independent Engineer;
(vi) the projected Debt Service Coverage Ratio for the next
succeeding four full fiscal quarters is equal to or greater than 1.40 to
1 in the opinion of the Independent Engineer;
(vii) the amount then on deposit in the Revenue Account, after
giving effect to the payment of such distributions, is at least $1.0
million;
(viii) either (i) the average of the "Market Price" (as defined in
the Indexed Swap Agreement) for preceding six months is less than 80% of
the then applicable "Indexed Contract Price" (as so defined) or (ii) if
the average Market Price for such period equals or exceeds 80% of the
then applicable Indexed Contract Price, then the average operating
availability for the immediately preceding four fiscal quarters for which
such information is available and the projected operating availability
for the next succeeding for fiscal quarters are, in each case, at least
94.61% in the opinion of the Independent Engineer; and
(ix) there are no pending or threatened actions or proceedings of
any kind, including actions or proceedings of or before any Governmental
Authority, that could, if determined adversely, have a Material Adverse
Effect.
24
The Collateral Agent may conclusively rely on such certificate of a Responsible
Officer certifying that all conditions for disbursement from the Distribution
Account have been met except that the Independent Engineer must certify as to
the satisfaction of the conditions set forth in clauses (v), (vi) and (viii) to
the extent therein provided.
Section 3.09. Distribution Suspense Account. On any Funding Date on which
any of the conditions precedent to Restricted Payments in Section 3.08(b) have
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not been satisfied, the Collateral Agent shall transfer all monies held in the
Distribution Account to the Distribution Suspension Account. On any Business Day
thereafter on which the conditions to Restricted Payments set forth in Section
3.08(b) are satisfied, upon delivery to the Trustee and the Collateral Agent of
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a certificate of a Responsible Officer of the Issuer certifying that all such
conditions to Restricted Payments are now satisfied, the Collateral Agent shall
withdraw and transfer all monies in the Distribution Suspense Account to the
Distribution Account and then to such Persons as may be directed in writing by
the Issuer. The Collateral Agent may conclusively rely on such certificate of a
Responsible Officer of the Issuer certifying that all conditions for
disbursement from the Distribution Account have been met. At any time that funds
in the Revenue Account are not sufficient to pay any amounts which are due and
payable and required to be paid with proceeds of the Revenue Account, then funds
in the Distribution Suspense Account shall be transferred to the Revenue Account
for distribution as provided therein.
Section 3.10. Loss Proceeds Account.
(i) All Loss Proceeds and Eminent Domain Proceeds received by the
Issuer shall be deposited in the Loss Proceeds Account. The Collateral
Agent shall separately segregate such Loss Proceeds and Eminent Domain
Proceeds for distribution in the manner as set forth below:
(A) All costs, if any, incurred by the Collateral Agent or the
Trustee in connection with any negotiation, action or proceeding to
collect the Loss Proceeds or Eminent Domain Proceeds in question
shall be withdrawn by the Collateral Agent and paid to the
Collateral Agent or the Trustee, as applicable (or reimbursed to the
extent the same have been paid or satisfied by the Issuer; provided
that no less than three Business Days prior to any such withdrawal a
Responsible Officer of the Collateral Agent or the Trustee, as
applicable, shall provide the Issuer with a certificate with the
relevant invoices, receipts or other documentation attached
indicating the aggregate amount of costs actually incurred in
connection with any of the negotiations, actions or proceedings
described above;
25
(B) In the event that the Issuer determines that the Project
cannot be rebuilt, repaired or restored to permit operation of all
or a portion of the Project on a commercially reasonable basis
following an Event of Eminent Domain or Event of Loss, or that the
Loss Proceeds or the Eminent Domain Proceeds together with any other
amounts available to the Issuer for such rebuilding, repair or
restoration are not sufficient to permit such rebuilding, repair or
restoration, upon delivery to the Collateral Agent and Trustee of a
certificate of a Responsible Officer of the Issuer (containing
customary assumptions and qualifications and information concerning
the amount of Loss Proceeds or Eminent Domain Proceeds to be
transferred to the Redemption Account) certifying to the foregoing
and specifying the amount of the Loss Proceeds or Eminent Domain
Proceeds, as applicable. Upon receipt of such certificate from the
Issuer, the Collateral Agent shall withdraw, transfer or distribute
the monies representing the Loss Proceeds or the Eminent Domain
Proceeds in the Loss Proceeds Account to the Redemption Account.
(C) In the event that the Issuer determines not to rebuild,
repair or restore the Project following an Event of Eminent Domain
or Event of Loss, upon delivery to the Collateral Agent and Trustee
of a certificate of a Responsible Officer of the Issuer certifying
that the Issuer has determined not to rebuild, repair or restore the
affected Project and information concerning the amount of Loss
Proceeds or Eminent Domain Proceeds to be transferred to the
Redemption Account. If only a portion of the Project is capable of
being rebuilt or replaced, the Issuer shall deliver to the
Collateral Agent and the Trustee certificate setting forth the
amount of the Loss Proceeds or the Eminent Domain Proceeds in excess
of the cost of repairing or replacing the Project. Upon receipt of
the certificate, the Collateral Agent shall withdraw, transfer or
distribute the monies representing the excess Loss Proceeds or the
excess Eminent Domain Proceeds in the Loss Proceeds Account to the
Redemption Account.
(D) (1) In the event that the Issuer has determined to
rebuild, repair or restore all or a portion of the Project, upon
delivery to the Collateral Agent and Trustee of a certificate of a
Responsible Officer of the Issuer certifying that all or a portion,
as applicable, of the Project will be rebuilt, repaired or restored,
the Collateral Agent shall transfer the applicable Loss
26
Proceeds or Eminent Domain Proceeds, as the case may be, in the Loss
Proceeds Account to the Restoration Sub-Account. Amounts held in the
Restoration Sub-Account shall be applied solely for the payment of
the cost of rebuilding, restoration or repair of the Project as set
forth below or as otherwise contemplated herein. If the amount
deposited in the Restoration Sub-Account with respect to a
particular Event or Loss or Event of Eminent Domain exceeds
$1,000,000, the Issuer shall deliver to the Collateral Agent and the
Trustee (x) a restoration budget with respect to such Event of Loss
or Event of Eminent Domain (as amended, modified or supplemented
from time to time, the "Restoration Budget") prepared by the Issuer
identifying all categories and approximate amounts reasonably
anticipated to be incurred in connection with the rebuilding,
restoration or repair, together with a statement of uses of proceeds
of the Restoration Sub-Account and any other monies necessary to
complete the rebuilding, restoration or repair and (y) a restoration
progress payment schedule with respect to such Event of Loss or
Event of Eminent Domain (as amended, modified or supplemented from
time to time, the "Restoration Progress Payment Schedule")
determined by the Issuer for the projected requisitions to be made
from the Restoration Sub-Account.
(2) Before any withdrawal or transfer shall be made from
the Restoration Sub-Account, there shall be filed with the
Collateral Agent with respect to each Funding Date:
(I) a requisition from the Issuer substantially in
the form attached hereto as Exhibit B (a "Restoration
Requisition"), dated not more than three Business Days
prior to such Funding Date as set forth therein on which
such withdrawal and transfer is requested to be made,
signed by a Responsible Officer of the Issuer;
(II) if the amount deposited in the Restoration Sub-
Account with respect to any Event of Loss or Event of
Eminent Domain in question exceeds $1,000,000, an
Independent Engineer's Certificate in the form attached
hereto as Appendix I to Exhibit B,
27
dated not more than three Business Days prior to the Funding
Date;
(III) if clause (II) above does not apply, the Restoration
Requisition shall so state; and
(IV) a certification by the Title Company dated the Funding
Date to the effect that there are then no mechanics', workmen's,
materialmen's, supplier's, construction or other like Liens filed
of record against the Project, except such that are referred to
in clauses (a) and (b) of paragraph 7 of Exhibit B hereto.
(3) On the Funding Date referred to in Section 3.10(i)(D)(2) or
as soon thereafter as practicable following receipt of the documents
described in Sections 3.10(i)(D)(2)(I) through (III) above, the
Collateral Agent shall withdraw and transfer from the Restoration Sub-
Account and shall pay to the Issuer or to Persons directed by it in
writing the amounts set forth in the Restoration Requisition.
(4) Upon completion of any rebuilding, restoration or repair of
all or a portion of the Project, there shall be filed with the
Collateral Agent and the Trustee a certificate of a Responsible
Officer of the Issuer certifying that the completion of the
rebuilding, restoration or repair has been performed in accordance
with standard industry practices and the amount, if any, required in
its opinion to be retained in the Restoration Sub-Account for the
payment of any remaining costs of rebuilding, restoration or repair
not then due and payable or the liability for payment of which is
being contested or disputed by the Issuer and for the payment of
reasonable contingencies following completion of the rebuilding,
restoration or repair. Upon receipt of such certificate of a
Responsible Officer, the Collateral Agent shall transfer first the
amount remaining in the Restoration Sub-Account in excess of the
amounts to remain in the Restoration Sub-Account as stated in the
certificate of a Responsible Officer of the Issuer, to the Issuer or
to Persons directed by the Issuer in writing to the extent of any
amounts which have been expended in connection with such rebuilding,
restoration or repair (as set forth in such certificate of a
28
Responsible Officer) and not previously reimbursed and second,
segregate the remaining excess in the Restoration Sub-Account from any
other amounts therein. The Collateral Agent shall transfer any monies
remaining in the Restoration Sub-Account after the application of the
monies therein as provided in the preceding two sentences to the
Redemption Account for application pursuant to Section 3.11.
----
Thereafter, upon receipt of a certificate of a Responsible Officer of
the Issuer certifying payment of all costs of rebuilding, restoration
or repair of the Project, the Collateral Agent shall transfer any
amounts remaining in the Restoration Sub-Account to the Revenue
Account. Any monies retained in the Restoration Sub-Account pursuant
to the first sentence of this paragraph (4) and not used for the
purposes set forth in said sentence within one (1) year shall be
transferred to the Redemption Account for application pursuant to
Section 3.11.
(E) Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing, (1) the Collateral Agent may at its option (and
without obligation to do so) use the Loss Proceeds and Eminent Domain
Proceeds held by it to pay for the cost of restoration, rebuilding or
repair effect by the Collateral Agent; and (2) at the direction of the
Trustee shall transfer all Loss Proceeds and Eminent Domain Proceeds then
held by it (or so much thereof as the Trustee shall direct) to the
Redemption Account for application as provided in Section 3.11.
(ii) All Title Event Proceeds received by the Issuer shall be paid to the
Collateral Agent. All Title Event Proceeds received by the Collateral Agent
shall be deposited in the Loss Proceeds Account. The Collateral Agent shall
separately segregate such Title Event Proceeds for distribution in the manner
set forth below:
(A) All costs, if any, incurred by the Collateral Agent or the
Trustee in connection with any negotiation, retain or proceeding to collect
the Title Event Proceeds in question shall be withdrawn by the Collateral
Agent and paid to the Collateral Agent or the Trustee, as applicable (or
reimbursed to the extent the same have been paid or satisfied by the
Issuer); provided that no less than three Business Days prior to any such
withdrawal a Responsible Officer of the Collateral Agent or the Trustee, as
applicable, shall provide the Issuer with a
29
certificate with the relevant invoices, receipts or other documentation
attached, indicating the aggregate amount of costs actually incurred in
connection with any of the negotiations, actions or proceedings described
above;
(B) Title Event Proceeds in respect of any particular Title Event
remaining following the withdrawal of any amounts pursuant to paragraph (A)
above shall be applied in an effort to remedy the Title Event and for
payment of expenses incurred in connection therewith, as set forth below.
(C) Except for amounts withdrawn pursuant to Section 3.10(ii)(A)
above, before any withdrawal and transfer shall be made from the Title
Event Sub-Account, there shall be filed with the Collateral Agent and the
Trustee with respect to each Funding Date a requisition from the Issuer
substantially in the form attached hereto as Exhibit C (a "Title Event
Requisition"), dated not more than three Business Days prior to such
Funding Date as set forth therein on which such withdrawal and transfer is
requested to be made, signed by a Responsible Officer of the Issuer.
(D) On the Funding Date referred to in Section 3.10(ii)(C) or as soon
thereafter as practicable following receipt of the Title Event Requisition
described in Section 3.10(ii)(C) above, the Collateral Agent shall withdraw
and transfer from the Title Event Sub-Account and shall pay to the Issuer
or Persons directed by the Issuer in writing the amounts set forth in such
Title Event Requisition.
(E) Upon completion of the effort to remedy the Title Event there
shall be filed with the Collateral Agent and the Trustee a certificate of a
Responsible Officer of the Issuer certifying the result of the effort to
remedy the Title Event and the amount, if any, required in its opinion to
be retained in the Title Event Sub-Account for the payment of any remaining
expenses. Upon receipt of the documents described in the immediately
preceding sentence, the Collateral Agent shall, first, transfer the amount
remaining in the Title Event Sub-Account in excess of the amounts to remain
in the Title Event Sub-Account as stated in the certificate of a
Responsible Officer of the Issuer, to the Issuer or Persons directed by it
in writing to the extent of any amounts expended in connection with such
effort to remedy and not previously reimbursed and second, segregate the
remainder in the Title Event Sub-
30
Account from any other amounts therein. The Collateral Agent shall
transfer any monies remaining in the Title Event Sub-Account after
application of the monies therein as provided in the preceding
sentence to the Redemption Account for application pursuant to Section
3.11. Thereafter, upon receipt of a certificate of a Responsible
----
Officer of the Issuer certifying payment of all costs of remedying the
Title Event, the Collateral Agent shall transfer any amounts remaining
in the Title Event Sub-Account to the Revenue Account. Any monies
retained in the Title Event Sub-Account pursuant to the first sentence
of this paragraph E and not used for the purposes set forth in said
sentence within one (1) year shall be transferred to the Redemption
Account for application pursuant to Section 3.11.
(F) Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing, (1) the Collateral Agent may at its option
(and without obligation to do so) use the Title Event Proceeds held by
it to pay for the cost of curing the Title Event in question; and (2)
at the direction of the Trustee shall transfer all Title Event
Proceeds then held by it (or so much thereof as the Trustee shall
direct) to the Redemption Account for application pursuant to Section
3.11.
(G) Notwithstanding the foregoing, any Title Event Proceeds
payable with respect to any New York mortgage recording tax with
respect to the First Mortgage and any penalties and interest relating
thereto shall be used solely to pay such mortgage recording tax,
penalties and interest.
Section 3.11. Redemption Account.
(a) The following amounts shall be deposited into the Redemption Account
directly, or if received by the Issuer, as soon as practicable upon receipt, in
either case in accordance with this Section 3.11(a), to the extent such amounts
-------
are available for redemption of Senior Secured Notes under the Indenture:
(i) certain amounts from the Loss Proceeds Account received by
the Issuer in connection with an Event of Loss, an Event of Eminent
Domain or a Title Event, to the extent such amounts are required to be
transferred to the Redemption Account in accordance with Section 3.10;
----
(ii) certain amounts received in connection with a Contract
Termination Event; and
31
(iii) proceeds received as a result of foreclosure on the
Collateral securing the obligations of the Issuer following an Event
of Default under the Indenture.
If any of the foregoing amounts required to be deposited with the
Collateral Agent in the Redemption Account are received by the Issuer (or
any Affiliate of the Issuer) the Issuer shall (or shall cause any such
Affiliate to) hold such payments in trust for the Trustee and shall
promptly remit such payments to the Collateral Agent for deposit in the
Redemption Account, in the form received, with any necessary endorsements.
(b) The Collateral Agent shall ledger the amounts referred to in
Sections 3.11(a)(i) through (iii) above for distribution in the manner set
----------
forth below:
(i) Upon the receipt of those amounts described in Section
3.11(a)(i) or 3.11(a)(ii), the Collateral Agent shall so notify the
----------
Trustee, and shall separately segregate such monies. The Collateral
Agent shall withdraw, transfer or distribute the amounts described in
Section 3.11(a)(i) or 3.11(a)(ii) no later than one Business Day
----------
prior to the Redemption Date established pursuant to Section 3.01 of
----
the Indenture, provided, however, that if funds in the Loss Proceeds
Account are insufficient on any date to make the payments specified in
this clause (i), distribution of funds shall be made ratably to the
specified recipients based on the respective amounts owed such
recipients.
(ii) Upon the receipt of those amounts described in Section
3.11(a)(iii), the Collateral Agent shall so notify the Trustee, and
------------
separately ledger such monies. The Collateral Agent shall withdraw,
transfer or distribute the amounts described in Section 3.11(a)(iii)
as directed by the Trustee hereof for the payments described in
Section 5.10 of the Indenture.
Section 3.12. Investment of Accounts. Monies held in any Account
created by and held under this Depositary Agreement shall be invested and
reinvested in Permitted Investments at the written direction (which may be
in the form of a standing instruction) of a Responsible Officer of the
Issuer; provided, however, that at any time when (a) a Responsible Officer
of the Collateral Agent has received written notice that an Event of
Default under the Indenture shall have occurred and be continuing or (b) a
Responsible Officer of the Issuer has not timely furnished such a written
direction or, after a request by the Collateral Agent, has not so confirmed
a standing instruction to the Collateral Agent, the Collateral Agent shall
invest such monies only in Permitted Investments described in clause (viii)
of such definition of a maturity of thirty days or
32
less. Such investments shall mature in such amounts and have maturity dates
or be subject to redemption at the option of the holder thereof on or prior
to maturity as needed for the purposes of such Accounts, but in no event
shall such investments mature more than one year after the date acquired.
The Collateral Agent shall at any time and from time to time liquidate any
or all of such investments prior to their maturity as needed in order to
effect the transfers and withdrawals contemplated by this Depositary
Agreement in accordance with a certificate of a Responsible Officer of the
Issuer; provided that, in the absence of timely receipt of such
certificate, the Collateral Agent shall liquidate any or all such
investments as so needed in such manner as will minimize, to the extent
reasonably practicable, the costs, penalties and losses associated with
such liquidation. Any income or gain realized from such investments shall
be deposited into the Revenue Account. Any loss shall be charged to the
applicable Account. Except as otherwise provided in this Section 3.12, the
----
Collateral Agent shall have no obligation to invest and reinvest any cash
held in the Accounts in the absence of timely and specific written
investment direction from the required party. Other than by reason of its
willful misconduct or gross negligence, the Collateral Agent shall not be
liable for the selection of investments or for investment losses incurred
thereon. Other than by reason of its willful misconduct or negligence, the
Collateral Agent shall have no liability in respect of losses incurred as a
result of the liquidation of any investment prior to its stated maturity or
the failure of the required party to provide timely written investment
direction. For purposes of any income tax payable on account of any income
or gain on an investment, such income or gain shall be for the account of
the Issuer.
Section 3.13. Disposition of Accounts upon Retirement of Senior
Secured Notes.
(a) Upon the payment in full of the principal, premium, if any, and
interest on the Senior Secured Notes such that the Senior Secured Notes are
no longer outstanding, all amounts held in the Interest Account, the
Principal Account and the Debt Service Reserve Account allocated to the
Senior Secured Notes, as the case may be, shall upon the written direction
of the Issuer be transferred to the Revenue Account.
(b) Upon termination of the Indenture and after payment in full of
the principal of, premium, if any, and interest on and all other amounts
due in respect of all the additional Senior Indebtedness, all Senior
Secured Notes Outstanding and after payment in full of all Administrative
Costs, and all other Secured Obligations, all amounts remaining in any
Account established in Section 2.02 shall be paid by the Collateral Agent
----
to the Issuer.
33
Section 3.14. Account Balance Statements. The Collateral Agent shall,
on a monthly basis and at such other times as the Trustee or the Issuer may
from time to time reasonably request, provide to the Trustee and the
Issuer, statements in respect of each of the Accounts, sub-accounts and
amounts segregated in any of the Accounts showing the Account balance,
amount of all receipts, the net investment income or gain received and
collected and shall also include withdrawals and transfers from and to any
Account and sub-accounts.
Section 3.15. Events of Default.
(a) On and after any date on which the Collateral Agent receives
written notice from the Trustee pursuant to Section 5.01 of the Indenture
----
that an Event of Default has occurred under the Indenture (the date of
receipt of such notice, the "Trigger Event Date"), the Collateral Agent
shall thereafter accept all notices and instructions required to be given
to the Collateral Agent pursuant to the terms of this Depositary Agreement
only from the Trustee and not from any other Person and the Collateral
Agent shall not withdraw, transfer, pay or otherwise distribute any monies
in any of the Accounts except pursuant to such notices and instructions
from the Trustee unless such Event of Default has been waived pursuant to
Section 5.04 of the Indenture or cured, in which event the terms of this
provision will be inapplicable to such Event of Default.
(b) On the Trigger Event Date, the Collateral Agent shall render an
accounting of all monies in the Accounts as of the Trigger Event Date to
the Trustee.
(c) On and after the Trigger Event Date, the Collateral Agent shall
distribute all money then held in any Account to the Trustee. The proceeds
of any sale, disposition or other realization with respect to Collateral
shall be applied in the order of priorities specified in Section 5.10 of
the Indenture, as directed by the Trustee.
Section 3.16. Accounts Maintained as UCC "Securities Accounts". The
Securities Intermediary hereby agrees and confirms that it has established
the Accounts as set forth and defined in this Depositary Agreement. The
Securities Intermediary agrees that (i) each such Account established by
the Securities Intermediary is and will be maintained as a "securities
account" (within the meaning of Section 8-501 of the Uniform Commercial
Code as adopted in the State of New York (the "UCC"); (ii) the Issuer is an
"entitlement holder" (within the meaning of Section 8-102(a)(7) of the UCC)
in respect of the "financial assets" (within the meaning of Section
8-102(a)(9) of the UCC, the "Financial Assets") credited to such accounts;
(iii) all Financial Assets in registered form or payable to or to order and
credited to any such Account shall be registered in the name of, payable to
or to the order of, or specially endorsed to, the
34
Securities Intermediary or in blank, or credited to another securities
account maintained in the name of the Securities Intermediary, and in no
case will any Financial Asset credited to any such Account be registered in
the name of, payable to or to the order of, or endorsed to, the Issuer
except to the extent the foregoing have been subsequently endorsed by the
Issuer to the Securities Intermediary or in blank. Each item of property
(including a security, security entitlement, investment property,
instrument or obligation, share, participation, interest or other property
whatsoever) credited to any Account shall be treated as a Financial Asset.
Until this Depositary Agreement shall terminate in accordance with the
terms hereof, the Collateral Agent shall have "control" (within the meaning
of Section 8-106(d)(2) of the UCC) of the Issuer's "security entitlements"
(within the meaning of Section 8-102(a)(17) of the UCC) with respect to the
Financial Assets credited to the Accounts. All property delivered to the
Securities Intermediary pursuant to this Depositary Agreement will be
promptly credited to the Accounts. If at any time the Securities
Intermediary shall receive any order from the Collateral Agent on behalf of
the Secured Parties directing transfer or redemption of any Financial Asset
relating to any Account, the Securities Intermediary shall comply with such
entitlement order without further consent by the Issuer or any other
Person.
Section 3.17. Stipulation Reserve Account. The Stipulation Reserve
Account will be funded as of the date of this Depositary Agreement with
proceeds of the Senior Secured Notes in the amount of $3.0 million. Amounts
on deposit to the Stipulation Reserve Account will be applied as certified
in a Withdrawal Certificate of the Issuer to make payments to Kronish Xxxx
of amounts which it is entitled to receive from time to time under the
Stipulation or to make provision for other payments to Kronish Xxxx in
respect of such amounts or Kronish Xxxx'x entitlement thereto, including
payments for the extinguishment of Kronish Xxxx'x entitlement to payment of
such amounts or the resolution of claims relating thereto and payments into
the escrow arrangement described in the Covenant. If the Issuer provides a
written certification to the Collateral Agent to the effect that the
likelihood is remote that all or any part of the amount on deposit to the
Stipulation Reserve Account will be required to make payments to Kronish
Xxxx of amounts which it is entitled to receive from time to time under the
Stipulation or to make other payments to Kronish Xxxx in respect of such
amounts or Kronish Xxxx'x entitlement thereto, or if Kronish Xxxx has
consented in a writing, filed with the Collateral Agent, to the release of
the amount on deposit in the Stipulation Reserve Account, then the
Collateral Agent will distribute all or any such portion of the amounts on
deposit as directed in a Withdrawal Certificate of the Issuer.
35
Article 4
Collateral Agent
Section 4.01. Appointment of Collateral Agent, Power and Immunities.
The Trustee on behalf of and for the benefit of the Secured Parties, hereby
appoints the Collateral Agent to act as its collateral agent hereunder and
under the other Collateral Documents (as defined in the Indenture), with
such powers as are expressly delegated to the Collateral Agent by the terms
of this Depositary Agreement and the terms of the other Collateral
Documents, together with such other powers as are reasonably incidental
thereto, and the Issuer hereby consents to such appointment. The Collateral
Agent shall not have any duties or responsibilities except those expressly
set forth in this Depositary Agreement and the other Collateral Documents
and no implied duties or covenants shall be read against the Collateral
Agent. Without limiting the generality of the foregoing, the Collateral
Agent shall take all actions as the Trustee shall direct it to perform in
accordance with the express provisions of this Depositary Agreement or the
other Collateral Documents or as the Trustee may otherwise direct it to
perform in accordance with the provisions of this Depositary Agreement or
the other Collateral Documents. Notwithstanding anything to the contrary
contained herein, the Collateral Agent shall not be required to take any
action which is contrary to this Depositary Agreement or the other
Collateral Documents or applicable law. Neither the Collateral Agent nor
any of its Affiliates shall be responsible to the Secured Parties for any
recitals, statements, representations or warranties made by the Issuer
contained in this Depositary Agreement or any other Project Document (as
defined in the Indenture) or Financing Document (as defined in the
Indenture) or in any certificate or other document referred to or provided
for in, or received by the Trustee under, the Indenture, this Depositary
Agreement or any other Project Document or Financing Document for the
value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Depositary Agreement or any Project Document or Financing Document
or any other document referred to or provided for herein or therein or for
any failure by the Issuer to perform its obligations hereunder or
thereunder. The Collateral Agent shall not be required to ascertain or
inquire as to the performance by the Issuer of any of its obligations under
the Indenture, any other Financing Document, this Depositary Agreement or
any other document or agreement contemplated hereby or thereby. The
Collateral Agent shall not be (a) required to initiate or conduct any
litigation or collection proceeding hereunder or under any other Collateral
Document or (b) responsible for any action taken or permitted to be taken
by it hereunder or in connection with any other Collateral Document (except
for its own gross negligence or willful misconduct). Except as otherwise
provided under this Depositary Agreement and the other Collateral
Documents, the Collateral Agent shall take action under this Depositary
Agreement and the other Collateral Documents only as it shall be directed
in writing. Whenever in the administration of this Depositary Agreement or
any other
36
Collateral Document the Collateral Agent shall deem it necessary or desirable
that a factual matter be proved or established in connection with the Collateral
Agent taking, suffering or omitting to take any action hereunder, such matter
(unless other evidence in respect thereof is herein specifically prescribed) may
be deemed to be conclusively proved or established by a certificate of a
Responsible Officer of the Issuer, or the Trustee, if appropriate. The
Collateral Agent shall have the right at any time to seek instructions
concerning the administration of this Depositary Agreement or any other
Collateral Document from the Trustee, the Issuer or any court of competent
jurisdiction. If the payment by the Issuer of, or the right of any partner of
the Issuer to receive, any permitted distribution or other payment by the Issuer
to any of its partners, is disputed pursuant to any pending or threatened legal
proceeding, the Collateral Agent shall have the right to deposit the disputed
amount of such distribution or payment in an interest bearing escrow account
pending the final resolution of such dispute. The Collateral Agent shall have no
obligation to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder. The Collateral
Agent shall not be liable for any error of judgment made in good faith by an
officer or officers of the Collateral Agent, unless it shall be conclusively
determined by a court of competent jurisdiction that the Collateral Agent was
grossly negligent in ascertaining the pertinent facts. The Collateral Agent may
execute any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, attorneys, custodians or nominees
appointed with due care, and shall not be responsible for any willful misconduct
or negligence on the part of, or for the supervision of, any agent, attorney,
custodian or nominee so appointed. Neither the Collateral Agent nor any of its
officers, directors, employees or agents shall be liable for any action taken or
omitted under this Depositary Agreement or any other Collateral Document or in
connection therewith except to the extent caused by the Collateral Agent's gross
negligence or willful misconduct, as determined by the final judgment of a court
of competent jurisdiction, no longer subject to appeal or review. The Collateral
Agent shall not be deemed to have knowledge of an Event of Default unless a
Responsible Officer of the Collateral Agent shall have received written notice
thereof.
Section 4.02. Reliance by Collateral Agent. The Collateral Agent shall be
entitled to conclusively rely upon and shall not be bound to make any
investigation into the facts or matters stated in any certificate, certificate
of a Responsible Officer of the Issuer, Independent Engineer's certificate,
Insurance Consultant's certificate, Trustee's certificate or any other notice or
document (including any cable, telegram, telecopy or telex) believed by it to be
genuine and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statement of legal counsel, independent accountants
and other experts selected by the Collateral Agent and shall have no liability
for its actions taken thereupon, unless due to the Collateral Agent's willful
misconduct or negligence. Without limiting the foregoing, the Collateral Agent
37
shall be required to make payments to the Secured Parties only as set forth
herein. The Collateral Agent shall be fully justified in failing or refusing to
take any action under this Depositary Agreement or any other Collateral Document
(i) if such action would, in the reasonable opinion of the Collateral Agent, be
contrary to applicable law or the terms of this Depositary Agreement or any
other Collateral Document, (ii) if such action is not specifically provided for
in this Depositary Agreement or any other Collateral Document, it shall not have
received any such advice or concurrence of the Trustee as it deems appropriate
or (iii) if, in connection with the taking of any such action that would
constitute an exercise of remedies under this Depositary Agreement or any other
Collateral Document (whether such action is or is intended to be an action of
the Collateral Agent of the Trustee), it shall not first be indemnified to its
satisfaction by the Secured Parties (other than the Trustee (in its individual
capacity) or the Collateral Agent (in its individual capacity) or any other
agent or trustee under any of the Financing Documents (in their respective
individual capacities)) against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Depositary Agreement or any other Collateral
Document in accordance with a request of the Trustee (to the extent that the
Trustee is expressly authorized to direct the Collateral Agent to take or
refrain from taking such action), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Secured Parties.
Section 4.03. Court Orders. The Collateral Agent is hereby authorized, in
its exclusive discretion, to obey and comply with all writs, orders, judgments
or decrees issued by any court or administrative agency affection any money,
documents or things held by the Collateral Agent. The Collateral Agent shall not
be liable to any of the parties hereto or any of the Secured Parties, their
successors, heirs or personal representatives by reason of the Collateral
Agent's compliance with such writs, orders, judgments or decrees,
notwithstanding such writ, order, judgment or decree is later reversed,
modified, set aside or vacated.
Section 4.04. Resignation or Removal. Subject to the appointment and
acceptance of a successor Collateral Agent as provided below, the Collateral
Agent may resign at any time by giving 30 days written notice thereof to the
Trustee and the Issuer, provided that in the event the Collateral Agent is also
the Collateral Agent and Trustee, it must also at the same time resign as
Collateral Agent and Trustee. The Collateral Agent may be removed at any time
with cause by the Trustee. Issuer shall have the right to remove the Collateral
Agent upon thirty (30) days' notice to the Trustee with or without cause,
effective upon the appointment of a successor Collateral Agent under this
Section 4.04, which is reasonably acceptable to the Trustee. In the event that
----
the Collateral Agent shall decline to take any action without first receiving
38
adequate indemnity from the Issuer or the Secured Parties, as the case may be
and, having received an indemnity, shall continue to decline to take such
action, the Trustee shall be deemed to have sufficient cause to remove the
Collateral Agent. In the event that the Collateral Agent is also the Trustee,
the Trustee shall have the right to remove the Collateral Agent with or without
cause. Upon any such resignation or removal, the Issuer shall have the right to
appoint a successor Collateral Agent, which Collateral Agent shall be reasonable
acceptable to the Issuer. If no successor Collateral Agent shall have been
appointed by the Issuer and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's giving of notice of resignation or the
removal of the retiring Collateral Agent, then the retiring Collateral Agent may
appoint a successor Collateral Agent, which shall be a bank or trust company
reasonable acceptable to the Issuer. Upon the acceptance of any appointment as
Collateral Agent hereunder by the successor Collateral Agent, (a) such successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent, and the
retiring Collateral Agent shall be discharged from its duties and obligations
hereunder and (b) the retiring Collateral Agent shall promptly transfer all
monies and Permitted Investments within its possession or control to the
possession or control of the successor Collateral Agent and shall execute and
deliver such notices, instructions and assignments as may be necessary or
desirable to transfer the rights of the Collateral Agent with respect to the
monies and Permitted Investments to the successor Collateral Agent. After the
retiring Collateral Agent's resignation or removal hereunder as Collateral
Agent, the provisions of Article IV and of Article V shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Collateral Agent. Any corporation into which the
Collateral Agent may be merged or converted or with which it may be consolidated
or any corporation resulting from any merger, conversion or consolidation to
which the Collateral Agent shall be a party, or any corporation succeeding to
the business of the Collateral Agent shall be the successor of the Collateral
Agent hereunder without the execution or filing of any paper with any party
hereto or any further act on the part of any of the parties hereto except where
an instrument of transfer or assignment is required by law to effect such
succession, anything herein to the contrary notwithstanding.
39
Article 5
Expenses; Indemnification; Fees
Section 5.01. Expenses. Subject to the terms of the agreement referenced in
Section 5.03, the Issuer agrees to pay or reimburse all reasonable out-of-pocket
----
expenses of the Collateral Agent (including reasonable fees and expenses for
legal services) in respect of, or incident to, the administration or enforcement
of any of the provisions of the Depositary Agreement or any other Collateral
Document or in connection with any amendment, waiver or consent relating to this
Depositary Agreement or any other Collateral Document.
Section 5.02. Indemnification. The Issuer agrees to indemnify the
Collateral Agent in its capacity as such, and in their capacity as such, its
officers, directors, shareholder, controlling persons, employees, agents and
servants (each an "Indemnified Party") from and against any and all claims,
losses, liabilities and expenses (including the reasonable fees and expenses of
counsel) growing out of or resulting from this Depositary Agreement or any other
Collateral Document (including, without limitation, performance under or
enforcement of this Depositary Agreement or any other Collateral Document, but
excluding any such claims, losses or liabilities resulting from the Indemnified
Party's gross negligence or willful misconduct). This indemnity shall survive
the termination of this Depositary Agreement or any other Collateral Document,
and the resignation or removal of the Collateral Agent.
Section 5.03. Fees. On the Closing Date, and on each anniversary of the
Closing Date to and including the Final Maturity Date, the Issuer shall pay the
Collateral Agent an annual fee in an amount mutually agreed on in a separate
agreement between the Issuer and the Collateral Agent. The payment of the
Collateral Agent's reasonable out-of-pocket expenses (including fees and expense
of counsel) for its administration of any provisions of this Depositary
Agreement or any other Collateral Document shall be subject to the terms of such
separate agreement.
Article 6
Miscellaneous
Section 6.01. Amendments; Etc. No amendment or waiver of any provision of
the Depositary Agreement nor consent to any departure by the Issuer herefrom
shall in any event be effective unless the same shall be in writing and signed
by the Trustee, the Collateral Agent and the Issuer. Any such amendment, waiver
or
40
consent shall be effective only in the specific instance and from the specified
purpose for which given.
Section 6.02. Addresses for Notices. All notices, requests and other
communication provided for hereunder shall be in writing and, except as
otherwise required by the provisions of the Depositary Agreement, shall be
sufficiently given and shall be deemed given when delivered or mailed by
registered or certified mail, postage prepaid, or sent by overnight delivery,
telecopy, telegram or telex, addressed to the parties as follows:
The Issuer: Project Orange Associates, L.P.
c/o Scolaro, Shulman, Xxxxx, Xxxxxx & Xxxxxxxx, P.C.
00 Xxxxxxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
Collateral Agent: U.S. Bank Trust National Association
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx, 00000
Attention: Corporate Trust Services
Fax: 000-000-0000
Section 6.03. Governing Law. This Depositary Agreement, including all matters of
construction, validity, performance and the creation, validity, enforcement or
priority of the lien of, and security interests created by, this Depositary
Agreement in or upon the Accounts shall be governed by the laws of the State of
New York, without reference to conflicts of law (other than Section 5-1401 of
the New York General Obligations law), except as required by mandatory
provisions of law and except to the extent that the validity or perfection of
the lien and security interest hereunder, or remedies hereunder, in respect of
any particular Account are governed by the laws of a jurisdiction other than the
State of New York.
Section 6.04. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE ARISING OUT OF, IN CONNECTION WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP AMONG THEM ESTABLISHED BY THIS
AGREEMENT.
Section 6.05. Headings. Headings used in this Depositary Agreement are for
convenience of reference only and do not constitute part of this Depositary
Agreement for any purpose.
41
Section 6.06. No Third Party Beneficiaries. The agreements of the parties hereto
are solely for the benefit of the Issuer, the Collateral Agent, the Trustee and
the other Secured Parties and their respective successors and assigns and no
Person (other than the parties hereto and the Secured Parties) shall have any
rights hereunder.
Section 6.07. No Waiver. No failure on the part of the Collateral Agent, the
Collateral Agent, the Secured Parties or any of their respective nominees or
representatives to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Collateral
Agent, the Collateral Agent, the Secured Parties or any of their nominees or
representatives of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
Section 6.08. Severability. If any provision of the Depositary Agreement or the
application thereof shall be invalid or unenforceable to any extent (a) the
remainder of this Depositary Agreement and the application of such remaining
provisions shall not be affected thereby and (b) each such remaining provision
shall be enforced to the greatest extent permitted by law.
Section 6.09. Successors and Assigns. All covenants, agreements, representations
and warranties in this Depositary Agreement by the Trustee, the Collateral Agent
and the Issuer shall bind and, to the extent permitted hereby, shall inure to
the benefit of and be enforceable by their respective successors and assigns,
whether so expressed or not.
Section 6.10. Execution in Counterparts. This Depositary Agreement may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section 6.11. Consequential Damages. In no event shall the Collateral Agent be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Collateral
Agent has been advised of the likelihood of such loss or damage and regardless
of the form of action.
Section 6.12. Limitation of Liability. Notwithstanding anything to the contrary
contained in the Depositary Agreement and the Transaction Documents, no officer,
director, manager, management committee, employee, shareholder or partner of the
Issuer nor any director, officer, manager, management committee, employee,
incorporator, shareholder, partner or member of any partner of the Issuer or any
Affiliate of any such party (collectively, the "Nonrecourse Parties") shall be
personally liable under this Depositary Agreement for the payment of any sums or
for the performance of any obligation contained in, this Depositary Agreement.
Collateral Agent agrees that its rights shall be limited to proceeding against
the Issuer, and the security provided or intended to be provided pursuant to the
Security Documents and that it shall have no right to proceed against the
Nonrecourse Parties for (a) the
42
satisfaction of any monetary obligation of, or enforcement of any monetary claim
against, the Issuer, (b) the performance of any obligation, covenant or
agreement arising under this Depositary Agreement, or (c) any deficiency
judgment remaining after foreclosure of any property securing the obligations
hereunder; provided that (a) the foregoing provisions of the Section 6.12 shall
----
not constitute a waiver, release or discharge of any of the indebtedness, or of
any of the terms, covenants, conditions or provisions of the Depositary
Agreement or any Financing Document and the same shall continue until fully
paid, discharged, observed or performed; (b) the foregoing provisions of this
Section 6.12 shall not limit or restrict the right of any Secured Party to name
----
the Issuer or any other Person as a defendant in any action or suit for a
judicial foreclosure or for the exercise of any other remedy under or with
respect to this Depositary Agreement or any other Financing Document, or for
injunction or specific performance, so long as no judgment in the nature of a
deficiency judgment shall be enforced against any Nonrecourse Party, except as
set forth in the Section 6.12; (c) the foregoing provisions of the Section 6.12
---- ----
shall not in any way limit or restrict any right or remedy of any Secured Party
with respect to, and all of the Nonrecourse Parties shall remain fully liable to
the extent that it would otherwise be liable for its own actions with respect
to, any fraud, negligence or willful misrepresentation, or misappropriation of
any revenues derived from the Project and the proceeds thereof or any other
earnings, revenues, rents, issues, profits or proceeds that are subject of the
Security Documents that should or would have been paid as provided therein or
paid or delivered to the Secured Parties towards any payment required under this
Depositary Agreement or any other Financing Document; (d) the foregoing
provisions of this Section 6.12 shall not affect or diminish or constitute a
----
waiver, release or discharge of any specific written obligation, covenant, or
agreement in respect of the Project made by any of the Nonrecourse Parties or
any security granted by the Nonrecourse Parties as security for the obligations
of the Issuer; and (e) nothing contained herein shall limit the liability of (i)
any Person who is a party to any Project Document or has issued any certificate
or statement in connection therewith with respect to such liability as may arise
by reason of the terms and conditions of such Project Document, certificate or
statement, or (ii any Person rendering a legal opinion, in each case under this
clause (e) relating solely to such liability of such Person as may arise under
such referenced instrument, agreement or opinion.
Section 6.13. Regarding the Collateral Agent. The Collateral Agent shall
be afforded all of the rights, powers, protections, immunities and indemnities
set forth in those certain Collateral Documents dated as of the date hereof,
between the Collateral Agent and the Issuer as if the same were specifically set
forth herein.
Section 6.14. Dispute Resolution. In the event of any dispute or
disagreement arising out of or relating to the determination of the amount, if
any, by which the Capital Expenditure Reserve Required Balance is to be reduced
by way of operation of clause (2) of the definition thereof that the
representatives of the Issuer and the Independent
43
Engineer have been unable to settle or agree upon within a period of 15 days
after the dispute or disagreement arises, the Issuer and the Independent
Engineer shall each nominate and commit a senior officer to meet at a mutually
agreed time and place not later than 30 days after the dispute or disagreement
has arisen to attempt to resolve such dispute or disagreement. Should a
resolution of such dispute or disagreement not be obtained within 15 days after
such meeting of senior officers for such purposes, or such longer period as may
be mutually agreed, then the Issuer and the Independent Engineer shall each have
the right, by written notice to the other, to resolve the dispute or
disagreement through a mutually acceptable independent expert (the "Independent
Expert") agreed upon by the parties at the time of their agreement to submit
such dispute to an Independent Expert for resolution. Such disputes shall be
resolved by the Independent Expert in accordance with such mutually agreed
procedures and rules. The Independent Expert shall resolve such dispute as soon
as practicable in light of the circumstances, but in no event later than 30 days
after submission to him/her of such dispute. The Issuer agrees that any decision
and/or award of the Independent Expert shall be binding on the Issuer and, to
the extent permitted by applicable Law, any rights to appeal from or cause a
review of any such decision and/or award are hereby waived by the Issuer.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
44
IN WITNESS WHEREOF, the parties hereto have caused this Deposit and Disbursement
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
PROJECT ORANGE FUNDING, L.P.
By: G.A.S. Orange Associates, L.L.C.,
a Delaware limited liability company,
its General Partner
By: /s/ Xxxxxxx Xxxxxxx
_____________________________________
Name: Xxxxxxx Xxxxxxx
Title: Vice President
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Collateral Agent and
Securities Intermediary
By: /s/ Xxxx X. Xxxxxxx
_____________________________________
Name: Xxxx X. Xxxxxxx
Title: Vice President
45
Exhibit A to
Depositary Agreement
NON-BUDGETED OPERATING AND MAINTENANCE
COSTS CERTIFICATE
No. ____
[Date]
U.S. Bank Trust National Association, as Collateral Agent
under the Depositary Agreement
referred to below
[Address]
Attention: [__________________________]
Re: DEPOSIT AND DISBURSEMENT AGREEMENT (as amended, modified or otherwise
supplemented from time to time, the "Depositary Agreement") dated as of
December 6, 1999 among Project Orange Associates, L.P. (as successor by
merger to Project Orange Funding, L.P., the "Issuer"), a Delaware limited
partnership, U.S. Bank Trust National Association, a national banking
association, in its capacity as Collateral Agent and in its capacity as
Collateral Agent.
Ladies and Gentlemen:
This certificate (the "Non-budgeted Operating and Maintenance costs
Certificate") is delivered to you pursuant to Section 3.01(c)(i)(A) of the
-------------
Depositary Agreement. Capitalized terms used and not otherwise defined herein
shall have the meanings assigned thereto in the Depositary Agreement. The
information relating to this Non-Budgeted Operating and Maintenance Costs
Certificate is as follows:
1. The aggregate amount requested to be withdrawn from the Revenue Account in
accordance with this Non-Budgeted Operating and Maintenance Costs
Certificate is $______________.
2. The Funding Date on which the withdrawals and transfers pursuant to this
Non-budgeted Operating and Maintenance Costs Certificate are to be made is
_________, _____.
A-1
3. Set forth on Schedule I attached hereto is the name of each Person to whom
any payment is to be made, the aggregate amount due and payable on the
Funding Date or reasonably expected to be due and payable within the thirty
(30) day period following the Funding Date to such Person and a summary
description of the work performed, services rendered, materials, equipment
or supplies delivered or any other purpose for which each payment was or is
to be made.
4. The proceeds received pursuant to this Non-Budgeted Operating and
Maintenance Costs Certificate to be withdrawn from the Revenue Account will
be used to pay Operating and Maintenance Costs which exceed the aggregate
projected Operating and Maintenance Costs in the annual Operating Budgets
of the Issuer by more than ten percent (10%).
5. The Operating and Maintenance Costs for which payment is requested under
this Non-Budgeted Operating and Maintenance Costs Certificate have not been
the basis for any prior requisition by the Issuer.
6. All proceeds of prior requisitions under any Non-Budgeted Operating and
Maintenance Costs Certificate have been expended or applied pursuant to the
provisions of the Indenture.
7. Attached hereto as Appendix I is an Independent Engineer's Certificate in
respect of this Non-Budgeted Operating and Maintenance Costs Certificate
confirming that the Operating and Maintenance Costs for which payment is
requested hereunder are prudent and reasonable.
8. The Operating and Maintenance Costs for which payment is requested under
the Non-Budgeted Operating and Maintenance Costs Certificate are reasonably
designed to permit the Issuer to satisfy its obligations in respect of the
Senior Secured Notes and maximize its revenue and net income.
A-2
PROJECT ORANGE ASSOCIATES, L.P.
By: G.A.S. Orange Associates, L.L.C.,
a Delaware limited liability company,
its General Partner
By: _________________________________
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Collateral Agent and Securities Intermediary
By: _________________________________
Name:
Title:
A-3
Schedule 1
to Exhibit A
to Depositary Agreement
Name Amount of Payment Purpose
A-4
Appendix I
to Exhibit A
to Depositary Agreement
INDEPENDENT ENGINEER'S CERTIFICATE
[Date]
[Name], as Collateral Agent
under the Depositary Agreement
referred to below
[Address]
Attention: [______________]
Re: DEPOSIT AND DISBURSEMENT AGREEMENT (as amended, modified or otherwise
supplemented from time to time, the "Depositary Agreement") dated as of
December 6, 1999 among Project Orange Associates, L.P. (as successor by
merger to Project Orange Funding, L.P., the "Issuer"), a Delaware limited
partnership, U.S. Bank Trust National Association, a national banking
association, in its capacity as Collateral Agent and in its capacity as
Securities Intermediary.
Ladies and Gentlemen:
This certificate (the "Non-Budgeted Operating and Maintenance Costs
Certificate") is delivered to you pursuant to Section 3.01(c)(i)(B) of the
Depositary Agreement. Capitalized terms used and not otherwise defined herein
shall have the meanings assigned thereto in the Depositary Agreement and the
Indenture.
We hereby certify to the Collateral Agent as of the date hereof that:
1. We have reviewed the Non-Budgeted Operating and Maintenance Costs
Certificate dated _____ of the Issuer relating to the Project (the
"Project").
2. Based on our review of the aforementioned information and date provided to
us by the Issuer and such other investigation as is referenced on the Annex
hereto, and the understanding and assumption that we have been provided
true, correct and complete information, and [insert customary exceptions
and qualifications] we are of the opinion that, as of the date hereof, the
expenditures described in
A-5
the Non-Budgeted Operating and Maintenance Costs Certificate delivered by
the Issuer to the Collateral Agent are prudent and reasonable.
The person signing this Certificate is a duly qualified representative of
the Independent Engineer and as such is authorized to execute this Certificate
on behalf of the Independent Engineer.
[Name of Independent Engineer]
By:___________________________
Name:
Title:
A-6
Exhibit B to
Depositary Agreement
RESTORATION REQUISITION
No. ________
[Date]
[Name], as Collateral Agent
under the Depositary Agreement
referred to below
[Address]
Attention: [______________]
Re: DEPOSIT AND DISBURSEMENT AGREEMENT (as amended, modified or otherwise
supplemented from time to time, the "Depositary Agreement") dated as of
December 6, 1999 among Project Orange Associates, L.P. (as successor by
merger to Project Orange Funding, L.P., the "Issuer"), a Delaware limited
partnership, U.S. Bank Trust National Association, a national banking
association, in its capacity as Collateral Agent and in its capacity as
Securities Intermediary.
Ladies and Gentlemen:
This requisition (this "Restoration Requisition") is delivered to you
pursuant to Section 3.10(i)(D)(2) of the Depositary Agreement. Capitalized
terms used and not otherwise defined herein shall have the meanings assigned
thereto in the Depositary Agreement. The information relating to the
Restoration Requisition is as follows:
1. The aggregate amount requested to be withdrawn from the Restoration Sub-
Account in accordance with this Restoration Requisition is $____________.
2. The Funding Date on which the withdrawals and transfers pursuant to this
Restoration Requisition are to be made is ________, ___.
3. Set forth on Schedule I attached hereto is the name of each Person to whom
any payment is to be made, the aggregate amount incurred on or prior to the
Funding Date or reasonably expected to be incurred within the thirty (30)
day period following the Funding Date by such Person and a summary
description
B-1
of the work performed, services rendered, materials, equipment or supplies
delivered or any other purpose for which each payment was or is to be made.
4. The proceeds of this Restoration Requisition withdrawn from the Restoration
Sub-Account will be used to pay the costs of rebuilding, restoration or
repair of ________ (the "Project") in accordance with the Restoration
Budget and the Restoration Progress Payment Schedule, and the Collateral
Agent may properly charge such costs against the Restoration Sub-Account.
5. The rebuilding, restoration, or repair costs which have been paid or for
which payment is requested under this Restoration Requisition are in
accordance with the Restoration Budget and the Restoration Progress Payment
Schedule.
6. The costs of rebuilding, restoration, or repair for which payment is
requested under this Restoration Requisition from the Restoration Sub-
Account have not been the basis for any prior requisition by the Issuer
7. As of the date hereof, the Issuer has not received any written notice of
any lien, right to lien or attachment upon, or claim affecting the
rebuilding, repair or restoration that is the subject of the Restoration
Requisition, or in the event that the Issuer has received notice of any
such lien, attachment or claim, that such lien, attachment or claim,
(giving details with respect thereto) either (a) is a Permitted Lien
pursuant to clause (3) of the definition of "Permitted Liens" and the funds
estimated to be required to pay such lien, attachment or claim (giving
details of the basis for such estimate) remain on deposit in the
Restoration Sub-Account; or (b) has been released or discharged as of the
date hereof or is expected to be released or discharged out of the proceeds
of this Restoration Requisition.
8. [Attached hereto as Appendix I is an Independent Engineer's Certificate in
respect of this Restoration Requisition.]/1/
_________________________
/1/To be furnished only in the event that the amount requested in any
consecutive 12-month period with respect to any Event of Loss or Event of
Eminent Domain exceeds $1,000,000 in the aggregate.
B-2
PROJECT ORANGE ASSOCIATES, L.P.
By: G.A.S. Orange Associates, L.L.C.,
a Delaware limited liability
company, its General Partner
By: _________________________________
Name:
Title:
B-3
Schedule I
to Exhibit B
to Depositary Agreement
Name Amount of Payment Purpose
B-4
Appendix I
Exhibit B
to Depositary Agreement
INDEPENDENT ENGINEER'S CERTIFICATE
[Date]
[Name], as Collateral Agent
under the Depositary Agreement
referred to below
[Address]
Attention: [______________]
Re: DEPOSIT AND DISBURSEMENT AGREEMENT (as amended, modified or otherwise
supplemented from time to time, the "Depositary Agreement") dated as of
December 6, 1999 among Project Orange Associates, L.P. (as successor by
merger to Project Orange Funding, L.P., the "Issuer"), a Delaware limited
partnership, U.S. Bank Trust National Association, a national banking
association, in its capacity as Collateral Agent and in its capacity as
Securities Intermediary.
Ladies and Gentlemen:
This Certificate is delivered to you in connection with Section
3.10(i)(D)(2) of the Depositary Agreement and in connection with the requisition
for payment to which this Certificate is attached as Appendix II (the
"Restoration Requisition") delivered by the Issuer to the Collateral Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned thereto in the Depositary Agreement.
We hereby certify to the Collateral Agent as of the date hereof that:
1. We have reviewed the material and data made available to us by the
Issuer with respect to [describe rebuilding, repair or restoration project] and
have performed such other investigation as is referenced in the Annex attached
hereto (the "Review"). Our Review was performed in accordance with generally
accepted engineering and construction practices and included such investigation,
[insert customary exceptions and qualifications] and review as we in our
professional capacity deemed necessary or appropriate in the circumstances and
within the scope of our
B-5
appointment [insert customary exceptions and qualifications]. We have also
reviewed the Restoration Requisition dated ________________, including any
Appendices, Schedules and requisitions and/or invoices attached thereto or
delivered therewith.
2. Based on our Review and the understanding and assumption that we have
been provided true, correct and complete information, and [insert customary
exceptions and qualifications] we are of the opinion that, as of the date
hereof:
(a) After giving effect to the payments requested under the Restoration
Requisition, the undisbursed moneys in the Restoration Sub-Account
together with any other amounts that the Issuer is willing to commit
or cause to be committed to such rebuilding, repair or restoration is
reasonably estimated to equal or exceed the amount necessary to pay
for (i) all work, labor or services performed and all materials,
supplies or equipment furnished for which payment has not yet been
made and (ii) all other reasonably anticipated costs of rebuilding,
repair or restoration ("Restoration Costs") which have yet to be paid
in order to achieve operation of [all] [a portion] of the Project.
[Alternative if applicable: After giving effect to the payments
requested under the Restoration Requisition, the undisbursed moneys in
the Restoration Sub-Account may be less than the amount necessary to
pay for (i) all work, labor or services performed and all materials,
supplies or equipment furnished for which payment has not yet been
made and (ii) all other reasonably anticipated Restoration Costs which
have yet to be paid in order to achieve operation of [all] [a portion]
of the Project; however, in our opinion, such insufficiency could not
reasonably be expected to result in a Material Adverse Effect.]
(b) The major rebuilding, repair and restoration activities and the
progress of the rebuilding, repair and restoration of the Project
through the date of this Certificate are proceeding in a satisfactory
manner in accordance with the Restoration Budget and the Restoration
Progress Payment Schedule.
(c) The Restoration Costs set forth on Schedule I to the Restoration
Requisition not incurred on or prior to the Funding Date are
reasonably anticipated to be incurred during the thirty (30) day
period following the Funding Date.
B-6
(d) The payments made with respect to the Restoration Requisition are in
accordance with the Restoration Budget and the Restoration Progress
Payment Schedule.
The person signing this Certificate is a duly qualified representative of
the Independent Engineer and as such is authorized to execute this Certificate
on behalf of the Independent Engineer.
Very truly yours,
[Name of Independent Engineer]
By: ____________________________
Name:
Title:
B-7
Exhibit C to
Depositary Agreement
TITLE EVENT REQUISITION
No. ____
[Date]
[Name], as Collateral Agent
under the Depositary Agreement
referred to below
[Address]
Attention: [______________]
Re: DEPOSIT AND DISBURSEMENT AGREEMENT (as amended, modified or otherwise
supplemented from time to time, the "Depositary Agreement") dated as of
December 6, 1999 among Project Orange Associates, L.P. (as successor by
merger to Project Orange Funding, L.P., the "Issuer"), a Delaware limited
partnership, U.S. Bank Trust National Association, a national banking
association, in its capacity as Collateral Agent and in its capacity as
Securities Intermediary.
Ladies and Gentlemen:
This requisition (the "Title Event Requisition") is delivered to you
pursuant to Section 3.10(ii)(C) of the Depositary Agreement. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned
thereto in the Depositary Agreement. The information relating to the Title
Event Requisition is as follows:
1. The aggregate amount requested to be withdrawn from the Title Event
Sub-Account in accordance with this Title Event Requisition is
$__________________.
2. The Funding Date on which the withdrawals and transfers pursuant to
this Title Event Requisition are to be made is _____, ___.
3. Set forth on Schedule I attached hereto is the name of each Person to
whom any payment is to be made, the aggregate amount incurred on or
prior to the Funding Date or reasonably expected to be incurred within
the thirty (30) day period following the Funding Date to such Person.
C-1
4. The proceeds of this Title Event Requisition withdrawn from the Title
Event Sub-Account will be used solely for the purpose of attempting to
effect a remedy of the Title Event and for payment of expenses
incurred in connection therewith and the Collateral Agent may properly
charge such costs against the Title Event Sub-Account.
5. The costs of such remediation efforts in respect of the Title Event
and expenses incurred in connection therewith for which payment is
requested under this Title Event Requisition from the Title Event Sub-
Account have not been the basis for any prior requisition by the
Issuer.
PROJECT ORANGE ASSOCIATES, L.P.
By: G.A.S. Orange Associates, L.L.C.,
a Delaware limited liability
company, its General Partner
By _________________________________
Name:
Title:
C-2
Schedule I
to Exhibit C
to Depositary Agreement
Name Amount of Payment Purpose
C-3
