EXHIBIT 10.28
AMENDED AND RESTATED SECURITY DEPOSIT AGREEMENT
dated as of December 18, 1996
among
PANDA-BRANDYWINE, L.P.,
as Lessee,
PANDA BRANDYWINE CORPORATION,
as General Partner,
GENERAL ELECTRIC CAPITAL CORPORATION,
as LOC Issuer and Owner Participant,
FLEET NATIONAL BANK,
as Owner Trustee, Lessor and as Security Agent,
CREDIT SUISSE,
as Administrative Agent
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
(230 MW Natural Gas-Fired Qualifying Cogeneration
Facility located in Brandywine, Maryland)
TABLE OF CONTENTS
Page
ARTICLE I
Definitions 3
SECTION 1.1 Defined Terms. 3
SECTION 1.2 Other Definitional Provisions 3
ARTICLE II
Appointment of Security Agent; Establishment of Accounts 3
SECTION 2.1 Appointment of Security Agent 3
SECTION 2.2 Creation of Accounts 5
SECTION 2.3 Security Interest 6
SECTION 2.4 Location of the Accounts 7
ARTICLE III
Deposits into Accounts 7
SECTION 3.1 Deposits 7
SECTION 3.2 Information to Accompany Amounts
Delivered to Security Agent; Deposits
Irrevocable 9
SECTION 3.3 Books of Account; Statements 9
ARTICLE IV
Payments from Accounts 9
SECTION 4.1 Completion Account 9
SECTION 4.2 Revenue Account--Monthly Transfers
After the Lease Closing Date 10
SECTION 4.3 Revenue Account--Quarterly Transfers
After the Lease Closing Date 11
SECTION 4.4 Supplemental Rent 12
SECTION 4.5 Rent Reserve Account 13
SECTION 4.6 Operation and Maintenance Reserve
Account 13
SECTION 4.7 Release of Excess Amounts 14
SECTION 4.8 Special Payment Account 14
SECTION 4.9 Partnership Security Account. 14
SECTION 4.10 Distribution Reserve Account 15
SECTION 4.11 Insurance and Condemnation Proceeds
Account 15
SECTION 4.12 Warranty Maintenance Reserve Account 18
SECTION 4.13 Current Account 18
SECTION 4.14 Defaults 18
SECTION 4.15 Certain Payments 19
SECTION 4.16 Interest Hedging Account 19
SECTION 4.17 Delivery of Officer's Certificates;
Timing of Payments 20
SECTION 4.18 Payments under Lease 20
SECTION 4.19 LOC Fee Account 20
ARTICLE V
Investment 21
SECTION 5.1 Investment 21
ARTICLE VI
Security Agent 22
SECTION 6.1 Rights, Duties, etc. 22
SECTION 6.2 Resignation or Removal 23
ARTICLE VII
Determinations 24
SECTION 7.1 Value 24
SECTION 7.2 Other Determinations 24
SECTION 7.3 Sales of Permitted Investments 24
SECTION 7.4 Available Cash 25
ARTICLE VIII
Representations and Warranties 25
SECTION 8.1 Representations 25
SECTION 8.2 Indemnification 25
ARTICLE IX
Miscellaneous 25
SECTION 9.1 Fees and Indemnification of
Security Agent 25
SECTION 9.2 Termination 26
SECTION 9.3 Severability 26
SECTION 9.4 Counterparts 26
SECTION 9.5 Amendments 26
SECTION 9.6 APPLICABLE LAW 26
SECTION 9.7 Notices 27
SECTION 9.8 Submission to Jurisdiction; Waivers 27
SECTION 9.9 Limited Liability 27
SECTION 9.10 WAIVERS OF JURY TRIAL 27
SECTION 9.11 Benefit of Agreement 27
SECTION 9.12 Certain Rights of Power Purchaser 28
SECTION 9.13 Countersignatures; Rights of
Administrative Agent 28
ANNEX A Definitions
SCHEDULES
Schedule 1 Form of Project Certificate
EXHIBITS
Exhibit A Form of Certificate to be delivered
pursuant to Section 4.1
Exhibit B Form of Certificate to be delivered
pursuant to Section 4.4
Exhibit C Form of Certificate to be delivered
pursuant to Section 4.5
Exhibit D Form of Certificate to be delivered
pursuant to Section 4.6
Exhibit E Form of Certificate to be delivered
pursuant to Section 4.7
Exhibit F Form of Certificate to be delivered
pursuant to Section 4.9(b)
Exhibit G Form of Certificate to be delivered pursuant
to Section 4.12(a)
AMENDED AND RESTATED SECURITY DEPOSIT AGREEMENT, dated
as of December 18, 1996, among PANDA-BRANDYWINE, L.P., a Delaware
limited partnership, as lessee (the "Lessee" or the "Partnership"),
of which PANDA BRANDYWINE CORPORATION, a Delaware corporation, is
the sole general partner (the "General Partner"), GENERAL ELECTRIC
CAPITAL CORPORATION, a New York corporation, in its individual
capacity and as owner participant ("GE Capital" or the "Owner
Participant"), FLEET NATIONAL BANK, not in its individual capacity
but solely as owner trustee (in such capacity, the "Owner Trustee")
under the Trust Agreement (as defined below), FLEET NATIONAL BANK,
a national banking association, as security agent hereunder (in such
capacity, the "Security Agent") for GE Capital, the Owner Trustee and
the Loan Participants (as defined below), CREDIT SUISSE, a bank organized
and existing under the laws of Switzerland, acting by and through
its New York branch ("Credit Suisse"), as administrative agent
for the Loan Participants (the "Administrative Agent") and FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity but solely as
indenture trustee under the Indenture (as defined below).
W I T N E S S E T H :
WHEREAS, capitalized terms used herein and not
otherwise defined shall have the respective meanings assigned
thereto in Article I;
WHEREAS, in order to finance the cost of developing,
constructing and equipping the Project, the Partnership entered
into the Construction Loan Agreement and Lease Commitment, dated
as of March 30, 1995 (as amended, supplemented or otherwise
modified from time to time, the "Construction Loan Agreement"),
among the Partnership, the General Partner and GE Capital,
pursuant to which GE Capital agreed, subject to the terms and
conditions set forth therein, to make loans to the Partnership
and to issue letters of credit for the account of the
Partnership;
WHEREAS, the construction of the Facility has been
substantially completed and the Date of Substantial Completion
has occurred;
WHEREAS, the Partnership has requested that the Owner
Participant cause the Owner Trustee to purchase the Facility from
the Partnership and lease the same to the Partnership as provided
in the Construction Loan Agreement;
WHEREAS, the Partnership and the Owner Trustee are
entering into the Facility Lease and the other Lease Documents
pursuant to which, among other things, the Owner Trustee will
lease the Facility to the Partnership;
WHEREAS, the Partnership and GE Capital are entering
into the Reimbursement Agreement to provide for the continued
issuance by GE Capital to the Power Purchaser of the PEPCO
Letters of Credit;
WHEREAS, the Owner Participant has elected to fund the
Facility Lease with non-recourse indebtedness as a leveraged
lease pursuant to Section 5.8 of the Construction Loan Agreement;
WHEREAS, the obligations of the Partnership under the
Reimbursement Agreement to GE Capital and under the Site Sublease
and the Facility Lease to the Owner Trustee, including its
obligations to repay the LOC Reimbursement Obligations and to
make payments of Rent, are secured by, among other things, a
first assignment of and prior perfected security interest in all
rights and property of the Partnership, including all of the
revenues of the Partnership, to the Security Agent, as agent for
GE Capital and the Owner Trustee (and, by collateral assignment,
the Indenture Trustee), pursuant to the terms and provisions of
the Security Agreement and the Deed of Trust and Security
Agreement;
WHEREAS, the obligations of the Owner Trustee under the
Participation Agreement and the Indenture to the Indenture
Trustee and the Loan Participants, including its obligations to
repay the Loan Certificates with interest thereon, are secured
by, a first assignment of and prior perfected security interest
in all rights and property of the Owner Trustee, including an
assignment, by the Owner Trustee of all of its right, title and
interest under the Facility Lease, the Security Agreement, the
Deed of Trust and Security Agreement and the Pledge Agreements to
the Indenture Trustee;
WHEREAS, in order to give effect to the foregoing, the
parties hereto are entering into this Agreement, pursuant to
which (i) GE Capital, the Owner Trustee and the Indenture Trustee
appoint Fleet National Bank, to act as Security Agent hereunder
and under the other Lessee Security Documents, to hold all Lessee
Collateral for the benefit of GE Capital and the Owner Trustee
(and, by collateral assignment, the Indenture Trustee) and to
hold all Indenture Property described in clause (i) of the
Granting Clause of the Indenture ("Lessor Collateral") for the
benefit of the Indenture Trustee (acting on behalf of the Loan
Participants) and (ii) the Partnership agrees that its revenues
will be paid directly to the Security Agent, as agent for GE
Capital, the Owner Trustee and the Indenture Trustee, held by the
Security Agent as collateral security for the Lessee Obligations
for the benefit of GE Capital and the Owner Trustee (and, by
collateral assignment, the Indenture Trustee), and as collateral
security for the Lender Obligations for the benefit of the
Indenture Trustee, and distributed by the Security Agent as
provided herein;
WHEREAS, Fleet National Bank has agreed to act as
security agent on behalf of GE Capital, the Owner Trustee and the
Indenture Trustee pursuant to the terms of this Agreement and the
other Collateral Security Documents;
NOW, THEREFORE, in consideration of the premises and of
other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.1 Defined Terms. Capitalized terms used in
this Agreement shall, unless otherwise defined herein, have the
respective meanings assigned to such terms in Annex A ("Annex A")
to the Participation Agreement, dated as of December 18, 1996,
among the Lessee, the General Partner, GE Capital, the Owner
Trustee, the Security Agent, the Administrative Agent, the
Indenture Trustee and the Loan Participants listed on Schedule I
thereto, as amended, supplemented or otherwise modified from time
to time (the "Participation Agreement").
SECTION 1.2 Other Definitional Provisions. (a) As
used herein and in any certificate or other document made or
delivered pursuant hereto, accounting terms not defined herein or
in Annex A and accounting terms partly defined herein or in Annex
A, to the extent not defined, shall have the respective meanings
given to them under GAAP.
(b) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and section, schedule, exhibit and appendix
references are to this Agreement unless otherwise specified.
(c) References to agreements defined herein or in
Annex A shall include such agreements as they may be amended,
supplemented or otherwise modified from time to time in
accordance with the provisions of the Transaction Documents.
(d) Terms defined in Annex A or otherwise defined
herein by reference to any other agreement, document or
instrument shall have the meanings assigned to them in such
agreement, document or instrument whether or not such agreement,
document or instrument is then in effect.
ARTICLE II
Appointment of Security Agent; Establishment of Accounts
SECTION 2.1 Appointment of Security Agent. (a) Fleet
National Bank is hereby appointed by GE Capital, the Owner
Trustee and the Indenture Trustee as security agent hereunder,
under the Deed of Trust and Security Agreement, under the
Security Agreement, under the Pledge Agreements and under the
other Lessee Security Documents, and GE Capital, the Owner
Trustee and the Indenture Trustee hereby authorize Fleet National
Bank, in its capacity as the Security Agent, to take such action
on their behalf under the provisions of this Agreement and the
other Lessee Security Documents and to exercise such powers and
perform such duties as are expressly delegated to the Security
Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto.
(b) Except as otherwise specifically provided in this
Security Deposit Agreement, upon the written instructions at any
time and from time to time of Owner Participant and/or the
Administrative Agent, as the case may be (which instructions, if
requested by the Security Agent, shall state that such parties
are authorized to act on behalf of the Owner Trustee and the
Indenture Trustee and that such instructions are consistent with
Section 3.10 of the Indenture), the Security Agent shall take
such of the following actions as may be specified in such
instructions: (i) exercise such election or option, or make such
decision or determination, or give such notice, consent, waiver
or the approval or exercise such right, remedy or power or take
such other action hereunder or under any other Transaction
Document or in respect of any part or all of the Lessee
Collateral or the Lessor Collateral as shall be specified in such
instructions and as are consistent with this Security Deposit
Agreement and the other Collateral Security Documents; provided
that remedial actions taken with respect to the Lessor Collateral
shall be at the exclusive direction of the Indenture Trustee (or
the Administrative Agent acting on its behalf); (ii) take such
action with respect to, or to preserve or protect, the Lessee
Collateral and Lessor Collateral (including the discharge of
Liens) as shall be specified in such instructions and as are
consistent with this Security Deposit Agreement and the other
Collateral Security Documents; and (iii) take such other action
in respect of the subject matter of this Security Deposit
Agreement and the other Collateral Security Documents as is
consistent with the terms hereof, thereof and the other
Transaction Documents. The Security Agent shall have the right
to request such written instructions at any time and from time to
time. The Security Agent will execute and file or cause to be
filed such continuation statements with respect to financing
statements relating to the security interest created under the
Lessee Security Documents in the Lessee Collateral or under the
Indenture in the Lessor Collateral as may be specified from time
to time in written instructions of the Owner Participant and the
Administrative Agent (which instructions may, by their terms, be
operative only at a future date and which shall be accompanied by
the execution form of such continuation statements so to be
filed). The Security Agent hereby accepts the trust created by
this Security Deposit Agreement and to act as security agent
hereunder and under the Lessee Security Documents.
(c) The Security Agent agrees to accept all revenues,
cash, payments, insurance and condemnation proceeds, other
amounts and Permitted Investments to be delivered to or held by
the Security Agent pursuant to the terms of this Agreement. The
Security Agent shall hold and safeguard the Accounts (and the
revenues, cash, payments, insurance and condemnation proceeds,
instruments, securities and other amounts on deposit therein)
during the term of this Agreement and shall treat the revenues,
cash, payments, insurance and condemnation proceeds, instruments,
securities and other amounts in the Accounts as funds,
instruments, securities and other properties pledged by the
Partnership (other than the Interest Hedging Account, in which
the Partnership has no interest) to the Security Agent as
collateral securing the Lessee Obligations and pledged by the
Owner Trustee (other than the Equity Collateral) to the Indenture
Trustee for the benefit of the Loan Participants, to be held by
the Security Agent as collateral securing the Lender Obligations
in accordance with the provisions hereof.
SECTION 2.2 Creation of Accounts. The Security Agent
hereby establishes the following ten special, segregated and
irrevocable cash collateral accounts in the name of the Security
Agent and for the benefit of GE Capital, the Owner Trustee and
the Indenture Trustee which shall be maintained at all times
until the termination of this Agreement:
(a) Revenue Account;
(b) Operation and Maintenance Reserve Account;
(c) Rent Reserve Account, and within such account
including the following sub-account:
Equity Rent Reserve Sub-Account (for the sole
benefit of the Owner Participant);
(d) Warranty Maintenance Reserve Account;
(e) Insurance and Condemnation Proceeds Account;
(f) Special Payment Account;
(g) Interest Hedging Account (Owner Trustee);
(h) Partnership Security Account;
(i) Distribution Reserve Account;
(j) Current Account;
(k) Construction Completion Account; and
(l) Letter of Credit Fee Account.
All moneys, investments and securities at any time on deposit in
any of the Accounts shall constitute collateral to be held in the
custody of the Security Agent for the purposes and on the terms
set forth in this Agreement; provided that the money, investments
and securities on deposit (x) in the Interest Hedging Account
shall constitute collateral only for the payment of the Owner
Trustee Obligations and not the Lessee Obligations and (y) in the
Equity Rent Reserve Sub-Account shall constitute collateral only
for the payment of the Lessee Obligations and not the Owner
Trustee Obligations.
SECTION 2.3 Security Interest. (a) In order to
secure the payment and performance by the Partnership when due of
all of the Lessee Obligations, this Agreement is intended to
create, and the Partnership hereby pledges to, and creates in
favor of the Security Agent, for the benefit of GE Capital and
the Owner Trustee (and, by collateral assignment, the Indenture
Trustee), a prior perfected and continuing security interest in
all right, title and interest of the Partnership in and to the
Accounts (other than the Interest Hedging Account), all cash,
cash equivalents, instruments, investments and other securities
at any time on deposit in such Accounts, all present and future
accounts, chattel paper, documents, general intangibles and
instruments (each as defined in the New York Uniform Commercial
Code) of the Partnership, all other rights of the Partnership to
receive the payment of money, including (without limitation) all
moneys due and to become due to the Partnership or the Owner
Trustee under the Power Purchase Agreement, the Steam Sales
Agreement, the Steam Lease and any other contract of the Owner
Trustee or the Partnership for the sale of electricity, steam,
excess natural gas or fuel oil or by-products produced by the
Facility, all other Project Revenues, all amounts payable under
insurance policies maintained by the Partnership, all license
fees and all moneys due and to become due to the Partnership
under the Construction Contract and the Gas Supply Contract, and
all proceeds of any of the foregoing.
(b) In order to secure the payment and performance by
the Owner Trustee when due of all of the Owner Trustee
Obligations, this Agreement is intended to create, and the Owner
Trustee hereby pledges to, and creates in favor of the Indenture
Trustee, for the equal and ratable benefit of the Loan
Participants, a prior perfected and continuing security interest
in all right, title and interest of the Owner Trustee in, to and
under this Agreement and in and to the Accounts (other than the
Equity Rent Reserve Sub-Account), all cash, cash equivalents,
instruments, investments and other securities at any time on
deposit in such Accounts, all present and future accounts,
chattel paper, documents, general intangibles and instruments
(each as defined in the New York Uniform Commercial Code) of the
Owner Trustee, all other rights of the Owner Trustee to receive
the payment of money including (without limitation) all moneys
due and to become due to the Partnership or the Owner Trustee
under the Power Purchase Agreement and any other contract of the
Owner Trustee or the Partnership for the sale of electricity,
excess natural gas, fuel oil, by-products or steam produced by
the Facility, all other Project Revenues, all amounts payable
under insurance policies maintained by the Partnership (excluding
any policy maintained by the Owner Trustee or the Owner
Participant for its own account and not required to be maintained
by the Lessee), all license fees and all moneys due and to become
due to the Owner Trustee under the Construction Contract and the
Gas Supply Contract, and all proceeds of any of the foregoing;
but, excluding from the foregoing all Excepted Payments.
(c) All moneys, cash equivalents, instruments,
investments and securities at any time on deposit in any of such
Accounts shall constitute collateral security for the payment and
performance by the Partnership when due of the Lessee Obligations
(other than with respect to the Interest Hedging Account) and
collateral security granted by the Owner Trustee to the Indenture
Trustee for the payment and performance by the Owner Trustee of
the Owner Trustee Obligations (other than with respect to the
Equity Collateral) and shall at all times be subject to the sole
dominion and control of the Security Agent (as agent of the
Indenture Trustee (until the Lien of the Indenture has been
discharged) and the Owner Trustee), and shall be held in the
custody of the Security Agent in trust for the purposes of, and
on the terms set forth in, this Agreement. For the purpose of
perfecting the security interest of the Indenture Trustee in and
to the Accounts and all cash, investments and securities at any
time on deposit in the Accounts, the Security Agent shall be
deemed to be the agent of the Indenture Trustee.
(d) The Partnership shall not have any rights or
powers with respect to any amounts in the Accounts or any part
thereof except (i) as provided in Article IV hereof and (ii) the
right to have such amounts applied in accordance with the
provisions hereof; provided that the Lessee shall have no right,
title or interest whatsoever in or to the Interest Hedging
Account.
SECTION 2.4 Location of the Accounts. The Accounts
shall be maintained by the Security Agent at its corporate trust
office located at 000 Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000,
until the Security Agent (i) gives written notice to the other
parties to this Agreement setting forth a different location of
the Accounts, in the manner specified in Section 9.7; provided,
however, that such location shall be in Hartford, Connecticut or
New York City or in another location as may be agreed to by the
Owner Participant and the Administrative Agent; and (ii)
furnishes to the Owner Trustee and, until such time as the
Indenture shall have been terminated in accordance with its
terms, the Indenture Trustee an Opinion, in form and substance
and of counsel satisfactory to the Owner Trustee and the
Indenture Trustee, with respect to the perfection of the security
interest of the Owner Trustee and the Indenture Trustee in and to
the Accounts.
ARTICLE III
Deposits into Accounts
SECTION 3.1 Deposits. (a) Each of the Partnership
and the Owner Trustee shall instruct each Person from whom it
receives or is entitled to receive any Project Revenues to pay
such Project Revenues directly to the Security Agent for deposit
in the Revenue Account, and if either the Partnership or the
Owner Trustee shall receive directly any Project Revenues it
shall deliver such Project Revenues in the exact form received
(but with its endorsement, if necessary) to the Security Agent
for deposit in the Revenue Account not later than the second
Business Day after its receipt thereof. The Security Agent shall
have the right to receive all Project Revenues directly from the
Persons owing the same. All Project Revenues received by the
Security Agent shall be deposited in the Revenue Account.
(b) The Partnership and the Owner Trustee shall
instruct the Contractor, the Power Purchaser, the Gas Supplier
and any other applicable Person to make all Special Payments
(identifying them as such) to the Security Agent for deposit in
the Special Payment Account, and if either the Partnership or the
Owner Trustee shall receive any Special Payments it shall deliver
such Special Payments in the exact form received (but with its
endorsement, if necessary) to the Security Agent for deposit in
the Special Payment Account not later than the second Business
Day after its receipt thereof. The Security Agent shall have the
right to receive all Special Payments directly from the Persons
owing the same. All Special Payments received by the Security
Agent shall be deposited in the Special Payment Account.
(c) Each of the Partnership and the Owner Trustee
shall deliver to the Security Agent all payments in respect of
casualty to or loss of property received by it from any insurer
pursuant to the property or casualty insurance maintained by the
Partnership pursuant to Section 6.6 of the Participation
Agreement (but not pursuant to any insurance maintained by the
Owner Participant or the Owner Trustee for its own account) and
all awards and proceeds in respect of a taking in the exact form
received, but with the Partnership's or the Owner Trustee's
endorsement, if necessary ("Insurance and Condemnation
Proceeds"), for deposit in the Insurance and Condemnation
Proceeds Account not later than the second Business Day after the
Partnership's or the Owner Trustee's receipt thereof.
(d) The Owner Trustee shall deliver to the Security
Agent all payments received under the Interest Hedging Agreement
("Interest Hedging Payments") for deposit in the Interest Hedging
Account not later than the second Business Day after the Owner
Trustee's receipt thereof. The Security Agent shall have the
right to receive all Interest Hedging Payments directly from the
Interest Hedging Counterparty.
(e) On the Lease Closing Date, the Lessee shall
deposit in the Operation and Maintenance Reserve Account an
amount equal to the Initial Operation and Maintenance Reserve
Deposit.
(f) On the Lease Closing Date, the Lessee shall
deposit in the Warranty Maintenance Reserve Account an amount
equal to the Required Warranty Maintenance Reserve Deposit.
(g) On the Lease Closing Date, the Lessee shall
deposit in the Rent Reserve Account an amount equal to the
Initial Rent Reserve Deposit.
(h) On the Lease Closing Date, the Lessee shall
deposit in the Construction Completion Account an amount equal to
the Initial Construction Completion Deposit.
SECTION 3.2 Information to Accompany Amounts
Delivered to Security Agent; Deposits Irrevocable. (a) All
amounts delivered to the Security Agent by the Partnership shall
be accompanied by information in reasonable detail specifying the
source of the amounts and the Account or Accounts into which such
amounts are to be deposited. If the Security Agent shall be
unable to determine the source of any payments received or the
Account or Accounts into which such payments are to be deposited,
the Security Agent shall hold such amounts in the Revenue Account
until identified by the Partnership, the Owner Participant and
the Administrative Agent.
(b) Any deposit made into any Account hereunder shall,
absent manifest error, be irrevocable and the amount of such
deposit and any instrument or security held in such Account
hereunder and all interest thereon shall be held in trust by the
Security Agent and applied solely as provided herein.
SECTION 3.3 Books of Account; Statements. (a) The
Security Agent shall maintain books of account on a cash basis
and record therein all deposits into and transfers to and from
the Accounts and all investment transactions effected by the
Security Agent pursuant to Article V.
(b) Not later than the tenth Business Day of each
month, commencing with the first month to occur after the Lease
Closing Date the Security Agent shall deliver to the Partnership,
GE Capital and the Administrative Agent a statement setting forth
the transactions in each Account during the preceding month and
specifying the Project Revenues, Special Payments, Insurance and
Condemnation Proceeds Deposits, cash equivalents and other amounts
held in each Account at the close of business on the last Business
Day of the preceding month and the Value thereof at such time.
ARTICLE IV
Payments from Accounts
SECTION 4.1 Completion Account. The Security Agent
shall, upon receipt by it of a monthly certificate signed by an
Authorized Officer of the Partnership in substantially the form
of Exhibit A (and countersigned by the Independent Engineer, the
Administrative Agent and the Owner Participant) instructing it to
do so, apply cash available in the Completion Account to the
payment of the Project Costs specified in such certificate or to
such other costs or amounts or purposes as may be specified in
such certificate. So long as no Lease Default or Lease Event of
Default shall have occurred and be continuing, (a) on the date of
final acceptance under the Construction Contract, the Security
Agent shall transfer from amounts on deposit in the Completion
Account to the Partnership an amount equal to 66 2/3% of the excess
of (i) all funds on deposit therein and (ii) all remaining
Project Costs (including amounts in respect of any remaining
dispute under the Construction Contract) not yet paid (such
excess at any time, the "Completion Contingency"), (b) upon the
release of all liens relating to all matters listed on the
Contractor's final release provided by Xxxxxx Construction
Company (other than any claims relating to the XxXxxxxx dispute)
the Security Agent shall transfer from amounts on deposit in the
Completion Account to the Partnership an amount equal to 10% of
the sum of the (i) Completion Contingency and (ii) the amounts
transferred to the Partnership, if any, pursuant to clause
(a) above and (c) after transfers have been made pursuant to
clauses (a) and (b) above, on each date on which it receives a
monthly certificate pursuant to this Section 4.1, the Security
Agent shall transfer from amounts on deposit in the Completion
Account to the Partnership an amount equal to the "Applicable
Percentage" of the remaining Completion Contingency, all as
certified by an authorized officer of the Partnership and
countersigned by the Independent Engineer, the Administrative
Agent and the Owner Participant. The "Applicable Percentage" as
of any such date on which a monthly certificate is delivered
pursuant to this Section 4.1 is a percentage equal to the ratio
that the Project Costs set forth in such certificate bears to all
remaining Project Costs.
SECTION 4.2 Revenue Account--Monthly Transfers After
the Lease Closing Date. (a) On or before the twentieth day of
each month after the Lease Closing Date (or if such day is not a
Business Day, the immediately preceding Business Day), the
Partnership shall deliver to the Owner Participant and the
Administrative Agent a Project Certificate in substantially the
form of Schedule 1 signed by an Authorized Officer of the
Partnership requesting distributions to be made from the Revenue
Account. If the Owner Participant and the Administrative Agent
approve such Project Certificate, the Owner Participant and the
Administrative Agent shall countersign such Project Certificate
on the Business Day prior to the applicable Monthly Transfer Date
and the Partnership shall cause such countersigned Project
Certificate to be delivered to the Security Agent. On the twenty-
fifth day of each month (or if such date is not a Business Day,
the immediately succeeding Business Day) (each such date, a
"Monthly Transfer Date"), the Security Agent shall distribute,
from the cash available in the Revenue Account, (i) (A) directly
to each Person to which an amount in excess of $100,000 is due
and payable, the amounts identified as Project Expenses then due
and owing in Item 1 of the Project Certificate referred to above,
or (B) to the Partnership for the benefit of the Persons entitled
thereto, all other Project Expenses then due and owing in Item 1
of such Project Certificate and (ii) to the Current Account, the
amounts identified as Project Expenses expected to be due and
owing prior to the next Monthly Transfer Date in Item 2 of such
Project Certificate. Project Expenses owing to the Gas Supplier,
the Operator, the Gas Transporters and for fuel supplies shall be
identified in the Project Certificate and shall, to the extent
sufficient funds are not on deposit to satisfy all Project
Expenses set forth in such Project Certificate, take priority
over all other Project Expenses.
(b) For purposes of this Section 4.2, cash available
in the Revenue Account shall not include any check or other
instrument which may be deposited therein until the final
collection thereof.
SECTION 4.3 Revenue Account--Quarterly Transfers
After the Lease Closing Date. On each Basic Rent Payment Date,
the Security Agent shall distribute from the cash available in
the Revenue Account (after making any distribution required by
Sections 4.2 and 4.4) the following amounts in the following
order of priority:
first, to the LOC Fee Account, the amount of all fees
payable pursuant to subsection 2.3 of the Reimbursement
Agreement, which GE Capital and the Administrative Agent
certify to the Security Agent to be due and payable on such
date;
second, to the Indenture Trustee, for distribution in
accordance with Section 5.2 of the Indenture, a portion of
the Basic Rent then due equal to the sum of (x) fees owing
to the Administrative Agent and the Indenture Trustee and
(y) the amount of principal, interest and commitment fees
payable on or with respect to the Loan Certificates and (z)
amounts payable under the Interest Hedging Agreement that
the Administrative Agent certifies to the Security Agent are
due and payable on such date;
third, to the Owner Trustee (or, so long as the Owner
Participant shall be the sole beneficiary of the trust
established pursuant to the Trust Agreement, directly to the
Owner Participant), the remaining portion of Basic Rent
which the Owner Participant certifies to the Security Agent
to be due and payable on such date;
fourth, to the Operation and Maintenance Reserve
Account, the amount certified to the Security Agent by an
Authorized Officer of the Partnership (and countersigned by
the Owner Participant and the Administrative Agent) required
to be deposited therein pursuant to Sections 7(b)(i) and
7(b)(iii) of the Facility Lease;
fifth, to the Person entitled thereto, an amount equal
to the amount of Supplemental Rent then due and payable but
not yet paid by reason of the proviso to Section 4.4 (as set
forth in a certificate signed by an Authorized Officer of
the Partnership and countersigned by the Owner Participant
and the Administrative Agent) or of the Owner Participant
and the Administrative Agent, in substantially the form of
Exhibit B;
sixth, to the Rent Reserve Account, the amount
certified to the Security Agent by an Authorized Officer of
the Partnership (and countersigned by the Owner Participant
and the Administrative Agent) required to be deposited
therein pursuant to Sections 7(c)(i) and 7(c)(iii) of the
Facility Lease;
seventh, if the conditions precedent to cash
distributions to the Partners set forth in Section 7.3 of
the Participation Agreement are not satisfied as of such
Basic Rent Payment Date (as set forth in a certificate of
the Owner Participant and the Administrative Agent to the
Security Agent), to the Distribution Reserve Account, an
amount equal to the lesser of (x) the remainder of the cash
available in the Revenue Account and (y) Cash Available for
Distributions for the immediately preceding Quarterly
Measurement Period; and
eighth, if and to the extent permitted pursuant to
Section 7.3 of the Participation Agreement (as set forth in
a certificate of an Authorized Officer of the Partnership
and countersigned by the Owner Participant and the
Administrative Agent), to the Partnership Security Account,
an amount equal to the lesser of (x) the remainder of the
cash available in the Revenue Account and (y) Cash Available
for Distributions for the immediately preceding Quarterly
Measurement Period.
SECTION 4.4 Supplemental Rent. On any date when due,
the Security Agent, upon receipt of a certificate signed by an
Authorized Officer of the Partnership or of the Owner Participant
and the Administrative Agent, in substantially the form of
Exhibit B (and in the case of a certificate signed by the
Partnership, countersigned by the Owner Participant and the
Administrative Agent), shall promptly pay to the Owner Trustee or
such other Person as may be entitled thereto the amount (to the
extent of cash available in the Revenue Account) equal to the
amount of Supplemental Rent (other than amounts specifically
provided for in Section 4.3, which shall be paid in accordance
with such Section 4.3, but including the fees and expenses of the
Security Agent and the Owner Trustee and any LOC Reimbursement
Obligations (but in the case of LOC Reimbursement Obligations in
respect of the O&M Letter of Credit, only after amounts have been
applied thereto from the Operation and Maintenance Reserve
Account) then due and payable pursuant to Section 3(b) of the
Facility Lease and not otherwise paid or payable from amounts on
deposit in the Insurance and Condemnation Proceeds Account or the
Special Payment Account, as specified in such certificate;
provided that any portion of Supplemental Rent not included in
the current Operating Budget in excess of $250,000 per calendar
year with respect to the Lessee's general indemnity or general
tax indemnity obligations pursuant to Section 8 of the
Participation Agreement or with respect to the Lessee's
Obligations under the Tax Indemnity Agreement shall only be paid
to the Person entitled thereto on a Basic Rent Payment Date after
the payment of all amounts specified in clauses "first" through
"fourth" of Section 4.3 on such date.
SECTION 4.5 Rent Reserve Account. If, on any Basic
Rent Payment Date, the cash available in the Revenue Account, the
Distribution Reserve Account and the Partnership Security Account
is insufficient to make the payment obligations set forth in
clauses second and third of Section 4.3 on such Basic Rent
Payment Date, the Security Agent shall immediately notify the
Administrative Agent and the Owner Participant of such fact, and
(a) the Administrative Agent, at its option, may direct the
Security Agent (by delivering a certificate in substantially the
form of Exhibit C) to transfer to the Indenture Trustee the
amount (to the extent cash is available in the Rent Reserve
Account (other than amounts on deposit in the Equity Rent Reserve
Sub-Account)) equal to the amount of any deficiency in the
payment obligations set forth in clause second of Section 4.3 on
such Basic Rent Payment Date and (b) the Owner Participant, at
its option, may direct the Security Agent (by delivery of a
certificate in substantially the form of Exhibit C) to transfer
to the Owner Trustee (or to the Owner Participant, if the Owner
Participant is the sole beneficiary of the trust established
pursuant to the Trust Agreement) the amount (to the extent cash
is available in the Equity Rent Reserve Sub-Account) equal to the
amount of any deficiency in the payment obligations set forth in
clause third of Section 4.3 on such Basic Rent Payment Date). On
each Basic Rent Payment Date, after giving effect to all other
transactions hereunder on such date, the Security Agent shall
transfer from amounts on deposit in the Rent Reserve Account to
the Equity Rent Reserve Sub-Account an amount equal to the excess
of (x) the amount on deposit in the Rent Reserve Account (not
counting amounts on deposit in the Equity Rent Reserve Sub-
Account) over (y) an amount equal to the sum of the payments of
principal and interest expected to be due on the Loan
Certificates on the next two succeeding Payment Dates (less any
Accretion Amount), as reasonably determined by the Administrative
Agent and certified to the Security Agent.
SECTION 4.6 Operation and Maintenance Reserve
Account. Within three Business Days after receipt by the
Security Agent of a certificate, which (a) states that a drawing
has been made under the O&M Letter of Credit or (b) includes a
list of requested disbursements and invoices and other supporting
documents as may be necessary to properly document all such
disbursements, which certificate is signed by GE Capital and the
Administrative Agent (in the case of clause (a)), or by an
Authorized Officer of the Partnership and countersigned by the
Owner Participant and the Administrative Agent (in the case of
clause (b)), substantially in the form of Exhibit D hereto, and,
in the case of clause (b), so long as no Lease Default or Lease
Event of Default shall have occurred and be continuing (as set
forth in such certificate), funds on deposit in the Operation and
Maintenance Reserve Account shall be distributed to GE Capital in
respect of such drawing or to the Partnership or the payee(s), as
the case may be, in the manner, in the amount and at the
addresses specified in such certificate.
SECTION 4.7 Release of Excess Amounts. If, as of any
Basic Rent Payment Date, (i) an amount is on deposit in the Rent
Reserve Account or the Operation and Maintenance Reserve Account
in excess of the Required Rent Reserve Balance or the Required
Operation and Maintenance Reserve Balance, as the case may be, as
the result of the actual realization of income or gain on the
amounts on deposit in such Account, (ii) no Lease Default or
Lease Event of Default has occurred and is continuing and (iii)
the Security Agent shall have received a certificate signed by an
Authorized Officer of the Partnership and countersigned by the
Administrative Agent and the Owner Participant, substantially in
the form of Exhibit E, certifying as to such matters, then the
Security Agent shall distribute any such excess amounts to the
Revenue Account.
SECTION 4.8 Special Payment Account.
(a) Intentionally Left Blank.
(b) All Special Payments deposited in the Special
Payment Account constituting payments by the Gas Supplier
pursuant to Section 17.3 of the Gas Supply Agreement shall,
subject to Section 4.14 of this Agreement, be distributed to the
Partnership to be applied by the Partnership with the consent of
the Administrative Agent and the Owner Participant to the costs
of entering into a replacement gas supply agreement and to such
other related costs as shall be approved by the Administrative
Agent and the Owner Participant in writing. If, as of any Basic
Rent Payment Date, an amount is on deposit in the Special Payment
Account after all amounts required (and, in the reasonable
opinion of the Administrative Agent and the Owner Participant,
will be required) to be distributed under this Section 4.8 have
been so distributed, the Security Agent shall distribute any such
excess amounts to the Revenue Account.
SECTION 4.9 Partnership Security Account. (a) To
the extent that at any time the cash then available in the
Revenue Account is insufficient to make any of the payments,
deposits or transfers contemplated by Sections 4.1, 4.2, 4.3 and
4.4, the Security Agent shall from and to the extent of the cash
available in the Partnership Security Account withdraw such
amounts from the Partnership Security Account as directed by the
Administrative Agent and the Owner Participant and make the
aforesaid payments, deposits and transfers.
(b) Within three Business Days after each Basic Rent
Payment Date, if the Partnership has delivered a certificate
signed by an Authorized Officer of the Partnership and
countersigned by the Administrative Agent and the Owner
Participant, substantially in the form of Exhibit F hereto,
certifying that the conditions precedent to cash distributions to
the Partners set forth in subsection 7.3 of the Participation
Agreement have been satisfied, the Security Agent shall
distribute to the Partnership the cash then available in the
Partnership Security Account.
SECTION 4.10 Distribution Reserve Account. (a) To
the extent that at any time the cash then available in the
Revenue Account is insufficient to make any of the payments,
deposits or transfers contemplated by Sections 4.1, 4.2, 4.3 and
4.4, the Security Agent shall from and to the extent of the cash
available in the Distribution Reserve Account withdraw such
amounts from the Distribution Reserve Account as directed by the
Administrative Agent and the Owner Participant and make the
aforesaid payments, deposits and transfers.
(b) If, as of any Basic Rent Payment Date, the
Security Agent shall have received a certificate of an Authorized
Officer of the Partnership (and countersigned by the
Administrative Agent and the Owner Participant that (i) the
Operating Cash Flow Ratio for each of the two Quarterly
Measurement Periods immediately preceding the date of such
certificate was greater than 1.20 to 1 and provided that no Lease
Default or Lease Event of Default shall have occurred and be
continuing (as set forth in such certificate), the Security Agent
shall transfer the amounts on deposit in the Distribution Reserve
Account to the Revenue Account.
SECTION 4.11 Insurance and Condemnation Proceeds
Account. (a) All cash, cash equivalents, instruments,
investments and securities at any time on deposit in the
Insurance and Condemnation Proceeds Account, including all
interest or other income earned with respect thereto, are herein
called the "Insurance and Condemnation Proceeds Deposits".
(b) The Insurance and Condemnation Proceeds Deposits
shall be accumulated in the Insurance and Condemnation Proceeds
Account and held therein until paid to or upon the order of the
Partnership as provided in paragraph (c) of this Section 4.11, or
paid to the Indenture Trustee as provided in paragraph (d) or (e)
of this Section 4.11, or returned to the Partnership as provided
in Section 9.2.
(c) (i) If the amount of Insurance and Condemnation
Proceeds Deposits of the Partnership is less than $500,000, such
amount shall, subject to the provisions of paragraphs (d) and (e)
of this Section 4.11, be paid over to or upon the order of the
Partnership, as the case may be, to reimburse it for, or to pay,
the cost of repairing, rebuilding or otherwise replacing the
damaged or destroyed or lost or condemned property in respect of
which such moneys were received, upon the receipt by the Security
Agent of a certificate of an Authorized Officer of the
Partnership, countersigned by the Administrative Agent and the
Owner Participant, (A) containing the plans and specifications
setting forth in reasonable detail the work done or proposed to
be done and materials purchased or to be purchased by way of the
renewal, repair, rebuilding or other replacement of the damaged
or destroyed or lost or condemned property and (B) stating the
specific amount requested to be paid over to or upon the order of
the Partnership or that such amount is requested to reimburse the
Partnership as the case may be, for, or to pay, costs actually
incurred to repair, rebuild or replace property and that such
amount, together with amounts remaining in the Insurance and
Condemnation Proceeds Account for such purpose and other funds of
the Partnership available for such purpose, are sufficient to pay
in full the costs of such renewal, repair, rebuilding or other
replacement. The Administrative Agent and the Owner Participant
shall countersign such certificate if (w) no Lease Default or
Lease Event of Default has occurred and is continuing, (x) the
Owner Participant and the Administrative Agent shall each have
received an opinion of counsel, satisfactory to it, stating that
all Governmental Actions required in connection with the work
done or proposed to be done have been obtained, (y) in the
reasonable opinion of the Owner Participant and the
Administrative Agent and the Independent Engineer, the matters
referred to in such certificate can be accomplished in the manner
provided for in such certificate and (z) the Owner Participant
and the Administrative Agent shall have each received (I)
evidence of any lien waivers requested to be obtained by it, and
(II) evidence, satisfactory to the Administrative Agent and the
Owner Participant, that the Lien of the Lessee Security Documents
is in full force and effect; or
(ii) If the amount of Insurance and Condemnation
Proceeds Deposits is more than $500,000, such amount shall,
subject to the provisions of paragraphs (d) and (e) of this
Section 4.11, be paid over to the Persons entitled thereto from
time to time (as set forth in the certificate referred to below)
to pay the cost of repairing, rebuilding or otherwise replacing
the damaged or destroyed or lost or condemned property in respect
of which such moneys were received, upon the receipt by the
Security Agent of a certificate of an Authorized Officer of the
Partnership countersigned by the Administrative Agent and the
Owner Participant, (A) containing the plans and specifications
setting forth in reasonable detail the work done or proposed to
be done and the materials purchased or to be purchased by way of
the renewal, repair, rebuilding or other replacement of the
damaged or destroyed or lost or condemned property and (B)
stating the specific amounts requested to be paid, the Persons to
whom and the dates on which such amounts are to be paid, that
such amounts will be used to pay costs actually incurred to
repair, rebuild or replace property and that such amounts,
together with amounts remaining in the Insurance and Condemnation
Proceeds Account for such purpose and other funds of the
Partnership available for such purpose, are sufficient to pay in
full the costs of such renewal, repair, rebuilding or other
replacement. The Administrative Agent and the Owner Participant
shall countersign such certificate if (w) no Lease Default or
Lease Event of Default has occurred and is continuing, (x) the
Administrative Agent and the Owner Participant shall have each
received an opinion of counsel, satisfactory to it, stating that
all Governmental Actions required in connection with the work
done or proposed to be done have been obtained, (y) in the
reasonable opinion of the Administrative Agent and the Owner
Participant and the Independent Engineer, the matters referred to
in such certificate can be accomplished in the manner provided
for in such certificate and (z) the Administrative Agent and the
Owner Participant shall have each received (I) evidence of any
lien waivers requested to be obtained by it, and (II) evidence,
satisfactory to the Administrative Agent and the Owner
Participant, that the Lien of the Lessee Security Documents is in
full force and effect; or
(iii) In the event that any amounts remain in the
Insurance and Condemnation Proceeds Account after application
thereof in accordance with this paragraph (c), the Security Agent
shall either apply such Insurance and Condemnation Proceeds
Deposits to the payment of the Lessee Obligations or in
accordance with Section 9(g)(iii) of the Facility Lease, in
accordance with the instructions of the Administrative Agent and
the Owner Participant.
(d) If the Owner Participant or the Administrative
Agent shall at any time notify the Security Agent that an Event
of Loss has occurred, then, unless the Project is being repaired
in accordance with Section 9(c)(i) of the Facility Lease (as
certified to the Security Agent by the Partnership and
countersigned by the Administrative Agent and the Owner
Participant), the Security Agent shall promptly withdraw the
Insurance and Condemnation Proceeds Deposits from the Insurance
and Condemnation Proceeds Account and deliver the same to be
applied by the Indenture Trustee to the payment of the Lessee
Obligations and the Owner Trustee Obligations in accordance with
the provisions of Section 5.3 of the Indenture.
(e) If Owner Participant or the Administrative Agent
shall at any time notify the Security Agent that a Reimbursement
Event of Default or a Lease Event of Default has occurred and is
continuing and the Loan Certificates have become due and payable,
then the Security Agent shall promptly withdraw the Insurance and
Condemnation Proceeds Deposits from the Insurance and
Condemnation Proceeds Account and apply the same to the payment
of the Lessee Obligations and the Owner Trustee Obligations in
accordance with the provisions of Section 4.14 hereof.
SECTION 4.12 Warranty Maintenance Reserve Account.
(a) Within three Business Days after receipt by the Security
Agent of a certificate, which includes a list of requested
disbursements and invoices and other supporting documents as may
be necessary to properly document all such disbursements, signed
by an Authorized Officer of the Partnership and countersigned by
GE Capital and the Administrative Agent, substantially in the
form of Exhibit G hereto, and so long as no Lease Default or
Lease Event of Default shall have occurred and be continuing (as
specified in such certificate), funds on deposit in the Warranty
Maintenance Reserve Account shall be distributed to the Turbine
Manufacturer in the manner and in the amount and at the addresses
specified in such certificate.
(b) Upon receipt of a certificate signed by an
Authorized Officer of the Partnership or of the Owner Participant
and the Administrative Agent (and in the case of a certificate
signed by the Partnership, countersigned by GE Capital and the
Administrative Agent) certifying that the warranty period in
respect of the Turbine Contract, including any extensions
thereof, has expired, and provided that no Lease Default or Lease
Event of Default shall have occurred and be continuing (as
specified in such certificate), the Security Agent shall promptly
transfer the amounts on deposit in the Warranty Maintenance
Reserve Account to the Revenue Account.
SECTION 4.13 Current Account. The Security Agent
shall pay, from and to the extent of cash available in the
Current Account and as set forth in an officer's certificate
signed by an Authorized Officer of the Partnership (and
countersigned by the Administrative Agent and the Owner
Participant), (i) directly to each Person to which an amount in
excess of $100,000 is due and payable, the amounts previously
identified as Project Expenses in Item 2 of the most recently
delivered Project Certificate which are then due and owing, or
(ii) to the Partnership for the benefit of the Persons entitled
thereto, all other such Project Expenses previously identified in
Item 2 of the most recently delivered Project Certificate which
are then due and owing.
SECTION 4.14 Defaults. (a) Any other provision
contained in this Agreement to the contrary notwithstanding, upon
receipt by the Security Agent of written notice from the Owner
Participant or the Administrative Agent stating that a
Reimbursement Event of Default or Lease Event of Default has
occurred and is continuing, the Security Agent shall thereafter
distribute cash from the Accounts only upon the express written
instructions of the Administrative Agent (or, after the Indenture
shall have been terminated in accordance with its terms, the
Owner Participant), until such time as the Security Agent shall
have been notified in writing by such Person that such
Reimbursement Event of Default or Lease Event of Default has been
waived or cured in accordance with the Financing Documents. Any
other provision in this Agreement to the contrary notwith
standing, upon receipt by the Security Agent of written notice
from the Administrative Agent stating that an Indenture Event of
Default which is not and does not arise out of a Lease Event of
Default has occurred and is continuing, the Security Agent shall
thereafter distribute cash from the Interest Hedging Account only
upon the express written instructions of the Administrative Agent
until such time as the Security Agent shall have been notified in
writing by the Administrative Agent that such Indenture Event of
Default has been cured or waived in accordance with the Financing
Documents.
(b) If, following the occurrence and during the
continuance of a Lease Event of Default, the Administrative Agent
shall at any time notify the Security Agent that the Loan
Certificates have become due and payable in accordance with
Section 6.2(a) of the Indenture, then the Security Agent shall
transfer all cash, cash equivalents, instruments, investments and
securities available in the Accounts from time to time (after
making any transfers in respect of Project Expenses permitted
pursuant to Section 4.14(a)) first, on a pro rata basis (in
accordance with amounts payable under clauses (i) and (ii) below)
to (i) the Indenture Trustee, for the benefit of the
Administrative Agent and the Loan Participants, to the payment of
the amounts specified in Section 5.4 of the Indenture (other than
clause (vi) thereof) and (ii) to GE Capital, to the payment of
all amounts owing under the Reimbursement Agreement, including
all LOC Reimbursement Obligations, any payments owing to GE
Capital under Section 2.3 of the Reimbursement Agreement and all
cash collateralization obligations under Section 6 thereof, and
second, to the Owner Trustee, for distribution in accordance with
the Trust Agreement, to the payment of the remaining Lessee
Obligations.
SECTION 4.15 Certain Payments. Any other provision
contained in this Agreement to the contrary notwithstanding, in
the event that on any Basic Rent Payment Date there are
insufficient funds on deposit in any Account to pay principal,
interest, fees, distributions and/or other amounts due and
payable from such Account on such Basic Rent Payment Date to the
Person entitled thereto and thereafter funds are deposited into
the Revenue Account, the Security Agent shall distribute such
funds to such Person for the payment of such principal, interest,
fees or other amounts, such payments to be made in the same order
of priority (and pursuant to the same instructions) as they would
have been made had such funds been on deposit in the applicable
Account on such Basic Rent Payment Date.
SECTION 4.16 Interest Hedging Account. On each Basic
Rent Payment Date, the Security Agent shall pay all cash
available in the Interest Hedging Account to the Owner Trustee
for application in accordance with the Trust Agreement, provided
that all amounts payable pursuant to clause second of Section 4.3
hereof shall have been paid on such Basic Rent Payment Date from
amounts on deposit in the Revenue Account (or, in the event of a
shortfall, from the Interest Hedging Account). The Lessee shall
have no right, title or interest in the Interest Hedging Account
or amounts on deposit therein.
SECTION 4.17 Delivery of Officer's Certificates;
Timing of Payments. (a) Each of the certificates of an
Authorized Officer required to be delivered hereunder shall be
delivered not later than 12:00 noon, New York City time, on the
Business Day immediately prior to the day on which the Security
Agent is required to make transfers hereunder. Any certificate
of an Authorized Officer delivered later than the time specified
herein shall nevertheless be considered valid and shall be
honored by the Security Agent on or as promptly after the date
otherwise specified herein for payment as is practicable, subject
to the availability of cash in the applicable Account.
(b) Subject to (i) the timely receipt of a certificate
of an Authorized Officer as set forth in Section 4.17(a),
(ii) the availability of cash in the applicable Account and
(iii) other circumstances beyond the control of the Security
Agent, the Security Agent shall make any payment hereunder
required (except for transfers between Accounts) by means of wire
transfer of immediately available funds, to the address of the
payee(s) set forth in the applicable certificate, to be received
prior to 2:00 p.m., New York City time, on the date specified
herein for such payment.
(c) Each of the Lessee, the Owner Participant, the
Owner Trustee, the Indenture Trustee and the Administrative Agent
agrees that, concurrently with its delivery of any certificate,
notice or written request to the Security Agent, it shall deliver
a copy thereof to the other parties to this Agreement.
SECTION 4.18 Payments under Lease. Each transfer by
the Security Agent to the Indenture Trustee hereunder on account
of the payment or discharge of any Owner Trustee Obligation shall
be deemed, to the extent of such transfer, to satisfy the
obligation of the Lessee to pay any corresponding payment of
Rent, Stipulated Loss Value and all other corresponding amounts
payable by the Lessee under the Facility Lease, in each case due
and payable on such date under the Facility Lease.
SECTION 4.19 LOC Fee Account. On each Basic Rent
Payment Date, the Security Agent shall pay from cash available in
the LOC Fee Account, first, to any LOC Participant entitled
thereto, all fees payable to such LOC Participant pursuant to
Section 5(c) of the LOC Participation Agreement and second, to GE
Capital the remaining portion of fees payable pursuant to Section
2.3 of the Reimbursement Agreement (all as certified by GE
Capital or the Administrative Agent).
ARTICLE V
Investment
SECTION 5.1 Investment. (a) Any cash held by the
Security Agent in any Account shall be invested by the Security
Agent from time to time as directed in writing by the Lessee (or,
if GE Capital, the Owner Participant or the Administrative Agent,
as the case may be, shall have notified the Security Agent that a
Reimbursement Default, Reimbursement Event of Default, Lease
Default or Lease Event of Default has occurred and is continuing,
by the Administrative Agent or, after the Indenture has been
terminated, the Owner Trustee, as the case may be) in Permitted
Investments. Any income or gain realized as a result of any such
investment shall be held as part of the applicable Account and
reinvested as provided herein. Any income tax payable on account
of any such income or gain shall be paid by the Lessee or its
Affiliates. Any such investment may be sold (without regard to
maturity date) by the Security Agent whenever necessary to make
any distribution required by this Agreement. The Security Agent
shall have no liability for any loss resulting from any such
investment or sale thereof other than by reason of its willful
misconduct or negligence. The Security Agent will promptly
notify GE Capital, the Owner Participant, the Administrative
Agent and the Lessee of any loss resulting from any such
investment or sale and the Administrative Agent, or, after the
Indenture shall have been terminated in accordance with its
terms, the Owner Trustee in its sole discretion, may instruct the
Security Agent to, and the Security Agent shall, reimburse the
affected Account from the Revenues received pursuant to Section
4.2 hereof.
(b) The term "Permitted Investments" means (i)
obligations of, or guaranteed as to the interest and principal
by, the United States Government or any agency thereof having a
maturity of less than one (1) year; (ii) open market commercial
paper, with a maturity of not longer than ninety (90) days, of
any corporation incorporated under the laws of the United States
or any state thereof rated "prime-1" or its equivalent by Xxxxx'x
Investors Service, Inc. or "A-1" or its equivalent by Standard &
Poor's Ratings Group; (iii) bankers acceptances or certificates
of deposit issued by any bank rated "Aa" or "AA" or better by
Xxxxx'x Investors Service, Inc. or Standard & Poor's Ratings
Group, and having a maximum maturity of one (1) year; (iv) any
obligations of the Security Agent, any bank rated "A" or better
by Xxxxx'x Investors Service, Inc. or Standard & Poor's Ratings
Group, in respect of the repurchase of obligations of the type
described in clause (i) which obligation is secured by
obligations of the type described in clause (i) or by any one or
more certificates of deposit of the type described in clause
(iii) hereof; (v) federally insured demand deposit accounts with
the Security Agent and banks having capital, surplus and
undivided profits of at least One Billion dollars
($1,000,000,000) that are members of the Federal Reserve System
of the United States; or (vi) a money market fund registered
under the Investment Company Act of 1940, as amended from time to
time, the portfolio of which is limited to United States
government obligations and United States government agency
obligations (bearing the full faith and credit of the United
States government); provided, that all funds in the Accounts
shall not at any time be invested in Permitted Investments with a
maturity of greater than one (1) year or with an average
maturity, calculated on a weighted average basis, of more than
six (6) months; and provided, further, that with respect to the
credit ratings specified above, if neither Xxxxx'x Investors
Service, Inc. nor Standard & Poor's Ratings Group is in the
business of rating the relevant Permitted Investment, such
Permitted Investment shall have received a rating equivalent to
that specified above for such Permitted Investment by another
nationally recognized credit rating agency of similar standing.
ARTICLE VI
Security Agent
SECTION 6.1 Rights, Duties, etc. The acceptance by
the Security Agent of its duties hereunder and under the other
Lessee Security Documents is subject to the following terms and
conditions which the parties to this Agreement hereby agree shall
govern and control with respect to its rights, duties,
liabilities and immunities:
(i) it shall act hereunder as an agent only and
shall not be responsible or liable in any manner whatever
for soliciting any funds or for the sufficiency,
correctness, genuineness or validity of any funds,
securities or other amounts deposited with or held by it;
(ii) it shall be protected and held harmless in
acting or refraining from acting upon, and shall not be
bound to make any investigation into the facts or other
matters stated in, any written notice, certificate,
instruction, request or other paper or document, as to the
due execution thereof and the validity and effectiveness of
the provisions thereof and as to the truth of any
information therein contained, which the Security Agent in
good faith believes to be genuine;
(iii) it shall not be liable for any error of
judgment or for any act done or step taken or omitted except
in the case of its gross negligence, willful misconduct or
bad faith;
(iv) it may consult with and obtain advice from
counsel of its own choice in the event of any dispute or
question as to the construction of any provision hereof or
otherwise in connection with its duties as Security Agent
hereunder;
(v) it shall have no duties as Security Agent
except those which are expressly set forth herein and in any
modification or amendment hereof, and it is not charged with
knowledge of or any duties or responsibilities in connection
with any other document or agreement other than the
Collateral Security Documents; provided, however, that no
such modification or amendment hereof shall affect its
duties unless it shall have given its prior written consent
thereto;
(vi) it may execute or perform any duties
hereunder and under the other Lessee Security Documents
(other than the holding of the Accounts and stock
certificates or any other collateral which is required to be
held by it for purposes of perfection) either directly or
through agents or attorneys selected with reasonable care;
(vii) it may engage or be interested in any
financial or other transactions with any party hereto and
may act on, or as depositary, trustee or agent for, any
committee or body of holders of obligations of such Persons
as freely as if it were not Security Agent hereunder;
(viii) it shall have no right of set-off against any
Account;
(ix) it hereby waives any and all Liens which may
arise from time to time in its favor on any Account or any
other amounts received by it pursuant to this Agreement; and
(x) it shall not be obligated to take any action
which in its reasonable judgment would involve it in expense
or liability unless it has been furnished with an indemnity
reasonably satisfactory to it.
SECTION 6.2 Resignation or Removal. (a) The
Security Agent may at any time resign by giving notice to each
other party to this Agreement, such resignation to be effective
upon the appointment of a successor Security Agent as hereinafter
provided.
(b) The Owner Participant and the Administrative Agent
may jointly remove the Security Agent at any time by giving
notice to each other party to this Agreement, such removal to be
effective upon the appointment of a successor Security Agent as
hereinafter provided.
(c) In the event of any resignation or removal of the
Security Agent, a successor Security Agent, which shall be a bank
or trust company organized under the laws of the United States of
America or any state thereof having a capital and surplus of not
less than $100,000,000 and shall be appointed by the Owner
Participant and the Administrative Agent, subject to the approval
of the Lessee (which approval shall not be unreasonably withheld
or delayed) so long as no Reimbursement Default or Reimbursement
Event of Default or Lease Default or Lease Event of Default shall
have occurred and be continuing. If a successor Security Agent
shall not have been appointed or shall not have accepted its
appointment as Security Agent hereunder within 45 days after such
notice of resignation of the Security Agent or such notice of
removal of the Security Agent, the Security Agent, the Owner
Participant, the Owner Trustee, the Indenture Trustee or the
Lessee may apply to any court of competent jurisdiction to
appoint a successor Security Agent to act until such time, if
any, as a successor Security Agent shall have accepted its
appointment as above provided. Any successor Security Agent so
appointed by such court shall immediately and without further act
be superseded by any successor Security Agent appointed by the
Owner Participant, the Administrative Agent and the Owner Trustee
with the approval of the Lessee as above provided. Any such
successor Security Agent shall deliver to each party to this
Agreement a written instrument accepting such appointment
hereunder and under the other Lessee Security Documents and
thereupon such successor Security Agent shall deliver to each
party to this Agreement a written instrument accepting such
appointment and thereupon succeed to all the rights and duties of
the Security Agent hereunder and thereunder and shall be entitled
to receive the Accounts and other collateral from the predecessor
Security Agent. Any such successor Security Agent shall execute
the Consent of the Power Purchaser.
ARTICLE VII
Determinations
SECTION 7.1 Value. Cash and Permitted Investments
on deposit from time to time in the Accounts shall be valued (the
"Value") by the Security Agent as follows:
(a) cash shall be valued at the face amount thereof;
and
(b) Permitted Investments shall be valued at the
lesser of the face amount and the purchase price.
SECTION 7.2 Other Determinations. The Lessee, the
Administrative Agent, the Owner Participant and the Security
Agent may establish procedures not inconsistent with this
Agreement pursuant to which the Security Agent may conclusively
determine, for purposes of this Agreement, the amounts from time
to time to be distributed or paid by the Security Agent from cash
available in the Accounts.
SECTION 7.3 Sales of Permitted Investments. The
Security Agent will use its best efforts to sell Permitted
Investments so that actual cash is available, on each date on
which a distribution is to be made pursuant to this Agreement,
for the Security Agent to make such distribution in cash on such
date. The amount of any check or other instrument which may be
deposited in any Account shall not be treated as cash available
until the final collection thereof.
SECTION 7.4 Available Cash. In determining the
amount of available cash in any Account at any time, in addition
to any cash then on deposit in such Account, the Security Agent
shall treat as available cash the amount which the Security Agent
would have received on such day if the Security Agent had
liquidated all the Permitted Investments (at then prevailing
market prices) then on deposit in such Account.
ARTICLE VIII
Representations and Warranties
SECTION 8.1 Representations. The Lessee represents
and warrants, for the benefit of GE Capital, the Administrative
Agent and the Loan Participants, that each certificate of an
Authorized Officer delivered by the Lessee in connection with
this Agreement shall be true and correct in all material respects
and that the amounts of money certified thereby shall be the
proper amounts to be set forth in such certificate of an
Authorized Officer. The Security Agent represents and warrants
to the other parties hereto that it has the power and authority
to enter into and perform its obligations under this Agreement.
SECTION 8.2 Indemnification. The Lessee hereby
undertakes to indemnify and hold harmless the Security Agent, the
Administrative Agent and GE Capital from and against any and all
expenses imposed on, incurred by or asserted against such Person
in any way relating to or arising out of any inaccuracy in any
certificate of an Authorized Officer delivered by the Lessee.
ARTICLE IX
Miscellaneous
SECTION 9.1 Fees and Indemnification of Security
Agent. The Lessee agrees to pay the reasonable fees of the
Security Agent as compensation for its services under this
Agreement. In addition, the Lessee assumes liability for, and
agrees to indemnify, protect, save and keep harmless the Security
Agent and its respective officers, employees, successors,
assigns, agents and servants from and against, any and all
claims, liabilities, obligations, losses, damages, penalties,
costs and expenses (including reasonable attorney's fees and
expenses) that may be imposed on, incurred by, or asserted
against, at any time, the Security Agent or its respective
officers and employees and in any way relating to or arising out
of the execution and delivery of this Agreement, the
establishment of the Accounts, the acceptance of deposits, the
purchase or sale of Permitted Investments, the retention of cash,
Permitted Investments or the proceeds thereof and any payment,
transfer or other application of cash or Permitted Investments by
the Security Agent in accordance with the provisions of this
Agreement, or as may arise by reason of any act, omission or
error of the Security Agent made in good faith in the conduct of
its duties; except that the Lessee shall not be required to
indemnify, protect, save and keep harmless the Security Agent
against its own gross negligence, active or passive, or willful
misconduct. The indemnities contained in this Section 9.1 shall
survive the termination of this Agreement.
SECTION 9.2 Termination. Subject to Section 9.1, the
provisions of this Agreement shall terminate on the date on which
all Lessee Obligations and Lender Obligations shall have been
paid in full and the Indenture, the Reimbursement Agreement, the
Participation Agreement and the Facility Lease shall have
terminated in accordance with their respective terms. This
Agreement shall be deemed to have terminated upon receipt by the
Security Agent of a certificate to such effect executed by the
Lessee, GE Capital and the Administrative Agent. Upon
termination of this Agreement the Security Agent shall transfer
any remaining amounts, together with any interest thereon, on
deposit in the Accounts to the party or parties specified in such
certificate. Any liability or obligation hereunder arising prior
to the termination of this Agreement shall survive such
termination.
SECTION 9.3 Severability. If any one or more of the
covenants or agreements provided in this Agreement on the part of
the parties hereto to be performed should be determined by a
court of competent jurisdiction to be contrary to law, such
covenant or agreement shall be deemed and construed to be
severable from the remaining covenants and agreements herein
contained and shall in no way affect the validity of the
remaining provisions of this Agreement.
SECTION 9.4 Counterparts. This Agreement may be
executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same
instrument.
SECTION 9.5 Amendments. This Agreement may not be
modified or amended except in accordance with the provisions of
the Participation Agreement and with the prior written consent of
each of the parties hereto.
SECTION 9.6 APPLICABLE LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, EXCEPT THAT THE CREATION, VALIDITY AND
PERFECTION OF THE SECURITY INTERESTS IN THE ACCOUNTS HEREUNDER
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CONNECTICUT.
SECTION 9.7 Notices. Unless otherwise specifically
provided herein, all notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing, by
telecopier or, if available, by telex and, unless otherwise
expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, or when deposited in the
mail, first class postage prepaid or with an overnight courier
service, or in the case of transmission by telecopier, when
confirmation of receipt is obtained, or in the case of telex
notice, when sent, answerback received, and shall be directed to
the address, telecopy or telex number of such Person designated
pursuant to the Participation Agreement, or in the case of the
Security Agent or the Owner Trustee, to 000 Xxxx Xxxxxx,
Xxxxxxxx, XX 00000, Attention: Corporate Trust Administration,
Telecopy No. (000) 000-0000, or to such other address, or
telecopy number as may be specified from time to time by such
Person or the Security Agent.
SECTION 9.8 Submission to Jurisdiction; Waivers.
Each of the parties hereto irrevocably and unconditionally agrees
to the submission to jurisdiction and the waivers as set forth in
Section 13.11 of the Participation Agreement.
SECTION 9.9 Limited Liability. There shall be full
recourse to the Lessee and all of its assets for the liabilities
of the Lessee under this Agreement and the other Lessee
Obligations, but in no event shall any Partner, Affiliate of any
Partner, or any officer, director or employee of the Lessee, any
Partner or their Affiliates or any holder of any equity interest
in any Partner be personally liable or obligated for such
liabilities and Lessee Obligations, except as may be specifically
provided in any other Financing Document to which such Partner is
a party or in the event of fraudulent actions, knowing
misrepresentations, gross negligence or willful misconduct by the
Lessee, any Partner or any of their Affiliates hereunder.
Subject to the foregoing limitation on liability, GE Capital, the
Administrative Agent, or the Owner Trustee or the Indenture
Trustee may xxx or commence any suit, action or proceeding
against any Partner or any Affiliate thereof in order to obtain
jurisdiction over the Lessee in order to enforce its rights and
remedies hereunder. Nothing herein contained shall limit or be
construed to limit the liabilities and obligations of any Partner
or any Affiliate thereof in accordance with the terms of any
other Transaction Document creating such liabilities and
obligations to which such Partner or Affiliate is a party.
SECTION 9.10 WAIVERS OF JURY TRIAL. THE PARTIES
HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS SECURITY
DEPOSIT AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
SECTION 9.11 Benefit of Agreement. This Agreement
shall inure to the benefit of, and be enforceable by, the parties
hereto and their respective successors and permitted assigns, and
no other Person shall be entitled to any of the benefits of this
Agreement.
SECTION 9.12 Certain Rights of Power Purchaser.
Nothing in this Security Deposit Agreement shall be deemed to
limit the provisions of the Consent of the Power Purchaser, which
provisions are solely for the benefit of the Power Purchaser and
not the Lessee. Without limiting the scope of the foregoing, the
Security Agent agrees, for the exclusive benefit of the Power
Purchaser and not the Lessee, that the exercise of remedies or
any similar action under this Security Deposit Agreement is
subject to, and shall be conducted in a manner consistent with,
the Power Purchaser's rights under (i) the Consent of the Power
Purchaser and (ii) the Power Purchase Agreement and the Transfer
Agreement (to the extent such rights under the Power Purchase
Agreement and the Transfer Agreement are not explicitly waived by
the Power Purchaser in accordance with the terms of the Consent
of the Power Purchaser).
SECTION 9.13 Countersignatures; Rights of
Administrative Agent. (a) In the event that the Security Agent
shall have received notice from the Indenture Trustee that an
Indenture Event of Default that is not and does not arise out of
a Lease Event of Default shall have occurred and be continuing,
approvals or countersignatures of the Owner Participant (but not
"GE Capital", in its capacity as issuer of the Letters of Credit)
shall not be required in order for the Security Agent to take any
action hereunder.
(b) In the event that a drawing under any Letter of
Credit shall have been made and not have been reimbursed by the
Lessee, upon written notice from the Administrative Agent to the
Lessee, GE Capital and the Security Agent that the LOC
Participants have funded all amounts owing to GE Capital under
the LOC Participation Agreements, the Administrative Agent (or
the Indenture Trustee, as the case may be) shall be entitled to
exercise any and all rights of GE Capital (as issuer of the
Letters of Credit), to the exclusion of GE Capital, hereunder and
under the other Lessee Security Documents in respect of the
Letters of Credit and the LOC Reimbursement Obligations.
IN WITNESS WHEREOF, the parties hereto have each caused
this Agreement to be duly executed by their duly authorized
officers, all as of the day and year first above written.
PANDA-BRANDYWINE, L.P.
By: Panda Brandywine Corporation, its
General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
PANDA BRANDYWINE CORPORATION, as the
General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Manager of Operations
FLEET NATIONAL BANK, as Security Agent
and as Owner Trustee
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
CREDIT SUISSE, a bank organized and
existing under the laws of Switzerland,
acting by and through its New York
branch, as Administrative Agent
By: /s/ Xxx X. Xxxxxxxxxx /s/ Xxxxx X. Laconetti
Name: Xxx X. Xxxxxxxxxx Xxxxx X. Laconetti
Title: Member of Associate
Senior Management
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Indenture Trustee
By: /s/ C. Xxxxx Xxxxxxx
Name: C. Xxxxx Xxxxxxx
Title: Vice President
